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Q

I appreciate your interesting analysis of Florida Community Development Bonds. I am interested but concerned with risk assessment in the current environment. For example, your offering of Meadow Pointe ll. How do I determine the buildout/tax delinquency and general viability of the community other than through a physical visit?

A

James A. Klotz responds:

There are a number of ways to acquire information on community development districts. The easiest is a search of the Internet. Many CDDs maintain Web sites that contain budgets and other financial information. Obtaining the Official Statement for the issue in question will give great detail of the CDD and its financing at the time of sale. If the issue is rated, you can obtain a rating report by contacting Standard & Poor’s or Moody’s.

Updated information may be obtained by contacting the original underwriters of the issue. The District is responsible for providing annual financial information to public repositories, a requirement that most municipal issuers must meet as well. Of course, you may also contact one of our tax-free bond specialists and we would be pleased to assist you.

The issue in question, Meadow Pointe II CDD, had 1,260 of 1,294 single family homes occupied by owners and 497 of 1,515 townhomes owner occupied at the time of sale in 2004. The issue has since been rated “Baa3” by Moody’s indicating it is now of investment grade quality. Developers are not required to release sales data once they reach approximately 75% of lots sold to builders. Delinquent assessments for fiscal year 2008 were 12.8% of assessments levied, all of which were collected through either late payments or the sale of tax certificates.