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MCCDD Unofficial Historical Summary

The following is one observer’s account of the history of the MCCDD from the county’s approval of the Development of Regional Impact (DRI) application by Hines in January, 1998, to today.

Since the start of Palencia, the Marshall Creek Community Development District (CDD) has been responsible for the issuance and repayment of bonds to pay for the infrastructure and for maintaining the roads, parks, recreational facilities, and other fixed assets.  As is typical of developments, the developer, Marshall Creek Partners (aka Hines) appointed all the 5 board members initially.    Over time with a formula based on registered voters, the control of the board transitioned to residents.   Walter O’Shea was the Chairman of the board until 2010 when he had to step down and all seats were held by residents.  Hoke Smith became Chairman of the Board and served until his tragic death in 2012 when Dick Hurley became Chairman.   Howard Hoffman followed Dick Hurley as chairman in 2016.

The cost to residents of repaying the bonds are fixed and do not increase or decrease but the costs of operating and maintenance (O & M) vary year to year based on amenities offered to residents, repair costs, the number of defaults on fee payments, and inflation.  During early stages it is in the developer’s interest to keep O & M fees as low as possible to help sell homes.  Since the infrastructure was new there were very few repairs needed and there are relatively few actual residents compared to land owners who also pay fees so the facilities aren’t used to capacity.  As the community aged, however, streets need repaving, pools need to be repaired, fitness center equipment needs replacement, etc., and costs increase.  With good financial management by the board, O & M fees in 2008 were $1,490 per lot and are $2,292 in 2019, only about 4% increase per year.

It has not been easy to keep fees as low as they are.  The housing slump in 2008-2009 resulted in a dramatic increase in defaults.  Specifically, Crosswinds, Trident, Village Square, and Augustine Island non-payment of fees cost the CDD millions in lost revenue.  Additionally, ICI which was the initial developer of Palencia North (aka Sweetwater or Lennar) did not pay their fair share of amenity costs for several years.  In recent years we have also added new services.  In 2011 the new fitness center opened, we started 24/7 manning of the North Loop guard house, the Las Calinas gate was built, and we started working with Neighborhood Publications to have a community-wide website.  The board foreclosed on the property between Starbucks and the school and is now receiving revenue from the home sites Pulte is developing.  We demolished the unfinished buildings in Avila and made a park.   We did foreclose on the Augustine Island undeveloped land but there is no commercial use now that justifies paying the back taxes.  In 2018, we built two junior tennis/pickleball courts and replaced the kiddie pool with a splash pad.  The boardwalk suffered major damage from Hurricanes Mathew and Erma and was closed for almost two years.  It was repaired, primarily with FEMA support, and reopened in 2018.

The board did a survey of resident satisfaction of the CDD’s amenities in 2016 and as a result made changes in management of tennis and fitness programs.  In 2012 we did an analysis of our infrastructure and determined what reserve funds we will need in the future to maintain our facilities.   We first saw major street repair costs in 2012 with sink holes and, with this reserve and the help of the POA, the re-pavement of the traffic circle in 2014 was possible without big fee increases.

We started using off-duty sheriff’s deputies which has cut vandalism costs and traffic issues (2012), we got county approval to use golf carts on our streets (2013), and undoubtedly most important, we re-financed the 2000 series bonds (2014).  We were able to get a rate of 4.8% instead of 7.7% which provided the CDD with $1.5 million in funds for future needs without changing the amount or term that anyone previously paid.   We renegotiated the Series 2002 bonds with the bond holders in 2017.  The interest rate would drop from 6.62% to 5.0% on about $12 million in bonds.  Retaining the savings in the CDD instead of rebating it to residents is consistent with what we did with the re-fi for the Series 2000 bonds and will provide the CDD with a $51,141 annuity starting in 2018 to help offset expenses for the next 15 years. 

In 2018 Hines Palencia Management Company, which has been managing the operations of both the CDD and the POA for 12 years decide to disband.  Hines has effectively completed their development of the community and is moving on the other projects.  The CDD hired FirstService Residential and he POA hired Leland Management to replace them.

November 2018

 
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