What is a CSD?
When a housing area is created, its
developer must determine how the community infrastructure – its roads, street
lights, drainage systems, common landscaping, and so on – will be maintained.
In California, there are a couple of options: a homeowners association or
a governmental agency.
In most cases, a homeowners association ("HOA")
is formed. It is staffed by a board elected by its membership
and is funded solely by membership dues. The association is
responsible for collecting the dues and must find ways to enforce
payment in the event of delinquencies. The primary function of
an HOA is to enforce the Covenants, Conditions
and Restrictions ("CC&Rs") for the development and in cases
of non-compliance, the HOA must resort to private legal action,
funded by member dues.
A governmental agency can take over the infrastructure, such as a county government, but that puts
the development in the hands of an entity managing a much larger scope, and puts the development at the whim of that
governmental agency's budget process. California's legislature created the concept of a "community services
district" as a legal form of government to handle specific services in a specific area.
A community services district ("CSD") is very different from an HOA.
It is an official governmental agency, authorized by the State
of California pursuant to sections 56036 (definitions)
and 61000 et
seq. of the California Government Code, and operates like a city
government. Its board members are elected by registered voters
within the services district boundaries and just as a city council,
a CSD can pass and enforce laws, set speed limits and annex land.
A CSD can manage many different services as defined
by Section 61100-61107.
The specific services to be provided to be provided are to be determined by
the Community Services District Board of Directors with the approval of the Local Agency Formation Commission ("LAFCO").
LAFCO is a commission, typically at the county level, that oversees the formation and operation of districts. As with most
governmental agencies in California, CSD activities are governed by the Brown Act. This means that CSD proceedings must be
open to the public.
Services provided may include, but are not limited to, collection or disposal of
storm water; collection or disposal of garbage or other refuse;
protection against fire including weed abatement; mosquito abatement;
street lighting; police department or other police protection,
including restricting access to streets; maintaining libraries;
maintaining, opening and surfacing streets; construction and
improvement of culverts, gutters, drains, storage ponds and wetlands
habitats; conversion of overhead electrical and communications
facilities to underground locations; to contract for ambulance
services; to provide transportation services; to abate graffiti;
and provide for public recreation, including tennis courts, playgrounds,
golf courses, swimming pools, or recreation buildings.
Thus, a CSD is much more powerful, and therefore
potentially more complex than an HOA. In fact, a
CSD can assume the responsibilities of an existing HOA should that association cease to exist.
Reading about CSDs and the laws behind
State code governing CSD: As of January 1, 2006 the newly revised
Services District (CSD) law--SB135--took effect. The
rewrite of the old 1955 law was done in a collaborative effort
by the Senate Local Government Committee. It now provides a viable
local government option for communities in unincorporated areas
of the state.
Needs, Community Services provides an overview of the SB135
with background of why and how the Bill was created.
Time To Draw the Line: A Citizen's Guide to LAFCO 2003
How is a CSD funded?
A CSD supports its district's infrastructure
through an annual property tax assessment on each lot within
the district, or through some other appropriate funding mechanisms,
such as governmental bonds. Taxes are collected by the County,
which can place a tax lien against a property and eventually
take possession, in the event of delinquency.
The Trinity Center CSD tax revenue is approximately 0.46% of all property tax collected by Trinity County.
A community services district also has the authority
to assess usage fees and, with voter approval, levy additional
property taxes. If the voting community desires, the CSD can
increase taxes or raise a bond to fund libraries, parks, community
The CSD can derive revenue from other sources:
- special augmentation funds
from the State
- State park grant funds
- fees received from rental fees of the CSD assets