CFD Formation and Management
A Community Facilities District can finance a substantial share of the public infrastructure a development is required to build. Capturing that value depends on documentation that most developers do not begin assembling until it is too late.
We handle the construction side of CFD formation and administration.
The construction documentation that CFD reimbursement depends on
Under the Mello-Roos Community Facilities Act, a district can issue bonds secured by a special tax and use the proceeds to finance eligible public facilities. For a developer building backbone infrastructure, this can convert a large upfront capital obligation into a financed public improvement.
The financing team, bond counsel, special tax consultant, and underwriter handle the district formation mechanics. What they need from the construction side is a defensible identification of eligible facilities and their cost, and then documentation that each reimbursement request actually satisfies the acquisition agreement.
Eligible facility identification and cost
Not every improvement a project builds is eligible. Facilities must be public, must be of the type the district is authorized to finance, and must be documented to the standard the agency and bond counsel require. We identify which improvements qualify, prepare the cost documentation supporting each, and work with the financing team on the facility list that supports bond sizing.
Acquisition agreements
Most districts acquire completed facilities from the developer rather than constructing them. The acquisition agreement defines what will be acquired, at what price or on what basis, what documentation is required, and when payment occurs. The terms of that agreement determine whether reimbursement is straightforward or contentious. We provide construction input during negotiation.
- Facility eligibility analysis against the district's authorized purposes
- Cost documentation supporting each eligible facility
- Prevailing wage applicability and certified payroll requirements
- Competitive bidding requirements where they apply to acquired facilities
- Acquisition agreement construction terms and payment triggers
- Cost allocation between eligible and ineligible work
- Change order treatment under the acquisition agreement
- Reimbursement package assembly and submission
Reimbursement processing
Once facilities are complete and accepted, reimbursement requires an organized package: cost documentation traced to the eligible facility, proof of payment, lien releases, certified payroll where applicable, and evidence of agency acceptance. Assembling this after the fact from an unstructured project file is painful and sometimes impossible. We structure the cost accounting from the start so the reimbursement package assembles itself.
Ongoing administration
For multi phase districts, the same discipline applies to each subsequent series: updated facility lists, cost documentation for the next phase, and reimbursement processing as improvements are accepted.
CFD support scope
- Eligible facility identification and analysis
- Facility cost estimation for bond sizing
- Prevailing wage applicability determination
- Competitive bidding requirement analysis
- Acquisition agreement construction terms input
- Cost accounting structure design
- Eligible and ineligible cost allocation
- Construction documentation for reimbursement
- Certified payroll compilation and verification
- Agency acceptance coordination
- Reimbursement package assembly and submission
- Multi phase district ongoing support
What you receive
Every engagement is scoped in writing before it begins, so you know exactly what is being produced and when.
Eligible facility list
Identification of which improvements qualify for district financing with the basis for each determination documented.
Facility cost estimate
Cost documentation for eligible facilities suitable for bond sizing and for the agency and bond counsel review.
Cost accounting structure
A project cost coding structure that separates eligible from ineligible costs from the first invoice rather than reconstructing later.
Acquisition agreement input
Construction specific comments on the acquisition agreement covering documentation, payment triggers, and change order treatment.
Reimbursement packages
Complete submissions with cost documentation, proof of payment, lien releases, certified payroll, and acceptance evidence.
Phase support
Updated facility lists and cost documentation for each subsequent bond series in a multi phase district.
Questions owners ask about this service
Do you handle the district formation itself?
No. Formation is handled by bond counsel, a special tax consultant, and the financing team. We provide the construction side: what facilities are eligible, what they cost, and the documentation that supports reimbursement.
When should the cost accounting structure be set up?
Before the first invoice is paid. Retroactively separating eligible from ineligible costs across a large infrastructure project is difficult and frequently results in eligible costs being abandoned because they cannot be adequately documented.
Does prevailing wage apply to CFD financed facilities?
Typically yes for facilities acquired or constructed with district proceeds, though the analysis depends on the structure. Getting this wrong is expensive because it is discovered at reimbursement, after the work is built and the payroll is set. See prevailing wage compliance.
Can you help with a district that is already formed?
Yes. We regularly assist with reimbursement processing, subsequent phase documentation, and resolution of disputed reimbursement requests on existing districts.
Talk to us about CFD Formation and Management
Send us the project details and we will tell you what a defensible scope of work looks like and what it would cost. Initial consultations carry no fee.
Send us the project
Tell us the site, the scope, and the deadline. Initial consultations carry no fee and no obligation.