Everything your lawyer will ask for.
The guide, the structure memo with its citations, the documents you will actually sign, and the questions that come up most often.
Developer Guide
The program end to end: how the money reaches the permit counter, what secures it, and what INSITE needs from you at each stage. Publication INS‑201.
How you get the money
You do not get a check, and you do not need one. When your permits are pulled, INSITE pays the eligible impact and school fees straight to the agency. There is no draw schedule and no monthly payment. Your day-one cash outlay on those fees is zero.
How it is repaid
The money is secured against the land, not against you. Each lot carries one line on its property tax bill. While you hold a lot, you pay that line on that lot. When the lot sells, the line goes with it. You never write a payoff check.
What the program looks at
- The finished-lot value from an appraisal prepared to the program’s standard, with the fees treated as paid.
- A preliminary title report on the parcels going into the district.
- The adopted fee schedules of every agency with a claim on the project.
- Entitlement status, site condition, and whether construction financing is in place.
If something changes
Lot counts move, fee schedules get amended, and projects get re-phased. Tell INSITE early: the special tax is sized per parcel, so a change in the map is a change in the sizing, and it is far cheaper to handle before the lien is recorded than after.
Structure Memo
For counsel, an investor, or a partner who wants the authority rather than the pitch. Every element is existing California law.
The Structure
Assembled from existing California law.
- Gov. Code 53311 et seq.A district can finance feesA district may fund the facilities those fees pay for, which is what lets the counter be paid now rather than reimbursed later.
- Gov. Code 53339.3One signature, no electionA parcel annexes on its owner’s unanimous approval. For a single-owner project that is one signature, which is why twelve lots works here.
- Gov. Code 53340It follows the parcelCollected with property taxes and attached per parcel, so it transfers to the buyer at closing.
The district
The Mello-Roos Community Facilities Act of 1982 (Gov. Code §§ 53311 et seq.) authorises a community facilities district to finance a broad range of public facilities. Section 53313.5 sets out what may be financed, and § 53313.5(g) contemplates paying fees imposed by other public agencies with their written consent — which is what allows the program to pay impact and school fees rather than build improvements.
One district, many projects
The Act authorises formation of a district and, separately, annexation of additional territory into an existing one. INSITE uses both: one permanent CFD with a future annexation area, into which qualifying projects are brought over time. A new district is not formed for every project.
Annexation without an election
Inside a future annexation area, territory is annexed on the unanimous approval of the owners of the parcels being annexed (Gov. Code § 53339.3). Each annexation is approved only by that owner. Existing participants do not vote, and the original proceedings are not reopened. For a single-owner project this is one notarised signature — and it is the provision that makes a twelve-lot deal viable at all.
Security
The special tax is levied on the annexed parcels and collected on the county property tax roll (Gov. Code § 53340). Repayment is secured by that special tax and by the security stated in the financing documents (§§ 53340, 53345–53359). The participating agency does not lend, does not guarantee repayment, and pledges no General Fund or unrestricted revenue. Delinquent special taxes remain a lien on the property, carry the same penalties and collection procedures as other property taxes, and the Act authorises judicial foreclosure of the lien (§§ 53356.1–53356.7).
Why not an assessment district
Assessment districts under the 1911, 1913 and 1915 Acts finance the construction or acquisition of improvements conferring a special benefit, proportional to that benefit. They generally cannot finance development impact fees, school fees, or utility connection charges. Because the purpose here is fee payment rather than construction financing, the CFD is the correct instrument.
Who holds authority
The participating public agency retains every legislative power under the Act: formation, special tax approval, annexation approval, debt authorisation and the annual levy (Gov. Code §§ 53321–53329.6, 53340, 53345). INSITE administers the program and exercises no legislative authority. Qualification by INSITE does not create a right to annexation or financing; participation remains subject to agency approval, completion of the legal proceedings, and availability of capital.
Document Examples
What you will actually sign, in the order you will see it. Current forms are issued with your application package.
Application stage
- Financing Application — project, ownership, entitlement status, lot schedule and the fee estimate.
- Authorization for Appraisal, Title and Fee Information — lets INSITE order the appraisal and preliminary title report, and request fee confirmations from the agencies.
- Preliminary Fee Schedule — each agency’s adopted fees applied to your product type and lot count.
Formation stage
- Unanimous Approval and Consent to Annexation — the notarised owner signature that brings the parcels into the district.
- Rate and Method of Apportionment — how the special tax is calculated and apportioned across the parcels.
- Notice of Special Tax Lien — recorded against the annexed parcels.
Closing stage
- Closing Checklist, Future Annexation — the sequence from approval through to funding.
- Notice of Special Tax to each buyer — the disclosure that travels with the home at resale.
Questions
Does every property in the district pay the special tax?
No. Properties in the future annexation area are not subject to the special tax unless the owner voluntarily annexes and approves the levy through the statutory procedures.
Do existing owners vote on my annexation?
No. Each annexation is approved only by the owners of the property being annexed. Only that property becomes subject to the tax, so prior participants have no vote and the original proceedings are not reopened.
Does a new district have to be formed for my project?
No. The Act allows annexation into an existing district. INSITE runs one permanent CFD and brings qualifying projects into it.
Does the city lend the money, or guarantee it?
Neither. The agency does not provide the financing and does not guarantee repayment. Eligible public costs are financed through a credit facility or other authorised source, secured by the special tax.
Is the city’s General Fund pledged?
No. The financing is secured solely by the special tax and the security stated in the financing documents. No General Fund or unrestricted revenue is pledged.
What happens if the special tax goes delinquent?
It remains a lien on the property and carries the same penalties and collection procedures as other property taxes. The Act also authorises judicial foreclosure of the special tax lien on behalf of the financing parties.
What happens if a lot does not sell?
You continue to pay that lot’s line on its property tax bill, exactly as you would any other property tax on land you hold. There is no acceleration and no payoff demand.
Must a CFD issue bonds when it is formed?
No. Formation and debt authorisation are separate acts. A district may exist before any debt is incurred, and outstanding financings may later be refinanced through a municipal bond issuance if that becomes advantageous.
What is the buyer told?
The special tax is disclosed to each buyer through the statutory Notice of Special Tax, and it appears as a line on the property tax bill for the home they are buying.