Saunders Point Special Community Benefit District

Special Taxing District Coordinator
Anne Arundel County
P.O. Box 2700 ‑ MS 1403
Annapolis , Maryland 21404
(410) 222-1222

SPECIAL COMMUNITY BENEFIT DISTRICTS

DEFINITION

A Special Community Benefit District (SCBD) is a geographic district of the County established by legislation of the County Council to provide public benefits to properties that would not otherwise receive these benefits. Districts have been established in Anne Arundel County for a variety of purposes, including the maintenance and improvement of community property; insect and pest control, and the maintenance of private roads.

ADMINISTRATIVE GUIDELINES

The law concerning Special Community Benefit Districts appears in the Anne Arundel County Code Sections 4-7-201 through 205. The Office of the Budget has developed administrative guidelines to implement the law. The following guidelines include the process for establishing and operating a Special Community Benefit District.

Once the decision to enter into the process has been made by a community association, two steps must be completed to become a SCBD. First, a petition must be prepared, circulated and validated; and, second, legislation must be adopted by the County Council and signed by the County Executive. The central point of all districts is that they are formed to confer to properties special benefits not otherwise available to them. These benefits must be public purposes, much like the functions performed by a government.

PETITION PROCESS

The formulation of the petition and completion of the signature process is one of the most difficult and important steps to be accomplished. The petition must identify the properties to be included in the district and must set forth the purpose of the district. The designation of properties may be done several ways: 1. by a metes and bounds description of the area; 2. by a reference to a subdivision plat, including the book and page number of the plat; 3. by a listing of the property parcels as shown on the tax map of the State Department of Assessments and Taxation; or, 4. by a listing of each property by property tax account number. (See Sample Petition following this section.)

The petition must also indicate the method of taxation for the district. There are three methods of taxation currently in use. The tax may be a uniform assessment for each tax account or each lot, or a uniform rate of assessment applied to the taxable base of a property. The first method provides for an equal payment for each tax account. The second provides for a uniform payment for each lot owned. The third relies on the taxable value of the properties to determine the tax due. In the last method, the total taxable base of the community is used to determine the tax rate necessary to support the proposed budget.

The name of the community association that will be responsible for administering the expenditure of the special tax assessments must be specified in the petition. This association must meet the three criteria set forth in the Anne Arundel County Code Section 4-7-101.

The petition must also include an affidavit concerning ownership of property. All persons who sign a petition must own property within the proposed SCBD.

Before circulating petitions for signatures, the community must consult the County's Office of the Budget for approval of the petition format. The Special Taxing District Coordinator will coordinate review of the petition by the Office of Law and the State Department of Assessments and Taxation. The Special Taxing District Coordinator will notify the community association that the format and content of the petition have been approved. The community association will then photocopy the final petition and provide each property owner with the opportunity to sign a petition.

COUNTY-APPROVED PETITION FOR THE SAUNDERS POINT SPECIAL COMMUNITY BENEFIT DISTRICT

I(We), the designated property owner(s) of Saunders Point petition the County Council of Anne Arundel County to establish the Saunders Point Special Community Benefit District, in accordance with Anne Arundel County Code Section 4-7-202. The limits of the proposed Saunders Point Special Community Benefit District are: those lands, lots and parcels shown on the following plats recorded among the Land Records of Anne Arundel County: Plat of Part 1 of Saunders Point, recorded in Plat Book 21, folio 42; , Plat of Part 2 of Saunders Point, recorded in Plat Book 22, folio 8; Plat of Part 3 of Saunders Point, recorded in Plat Book 23, folio 19; Plat of Part 4 of Saunders Point, recorded in Plat Book 25, folio 9; and Parcels A, B and C shown on the subdivision plat recorded in Plat Book 2362, folio 279.

The purposes of the district are:

To maintain, repair, construct, and remove snow from, non-County-owned roads, streets, street or road signs, drainage ditches, swales, culverts, walks, ways, bridges, jetties and wharves;
To maintain, improve, develop, acquire and protect the community-owned real and personal property;
To provide recreational activities directly related to the community; and;
To establish and operate of a community security program; and,
To provide for the administrative and operating expenses incidental to carrying out these purposes, including postage and mailing, auditing, insurance, attorney’s fees, legal costs, and including acquisition and repayment of any loans and any interest thereon.

It is requested that the method of taxation be a uniform assessment per tax account.

The Saunders Point Citizens Association, Inc., a civic or community association that meets the criteria set forth in the Anne Arundel County Code, Section 2-102, shall be responsible for administering the special community benefit district assessments in furtherance of the purposes of the Saunders Point Special Community Benefit District.

I (We), the undersigned, affirm under the penalties of perjury that I am (we are) the owner(s) of the property whose address is __________________________________________ within the proposed Saunders Point Special Community Benefit District.

PLEASE SIGN YOUR FULL NAME AS IT APPEARS ON YOUR DEED.

IF YOU ARE UNSURE, SPELL OUT YOUR FIRST, MIDDLE AND LAST NAMES.

ALL OWNERS OF RECORD MUST SIGN.

_____________________________________________ Signature and Printed Name Date

_____I vote YES _____I vote NO

_____________________________________________ Signature and Printed Name Date

_____I vote YES _____I vote NO

The owners of over 50% of the properties in the proposed SCBD must sign a petition asking for creation of the district. Every property owner should be given an opportunity to sign a petition, even if they have previously expressed opposition to the formulation of a Special Community Benefit District. Petitions sent to nonresident property owners should be sent by Registered Mail, Return Receipt Requested. Only petitions with current property owners' signatures and all owners of record signing will be counted for approval. Each property counts as one vote. For this purpose, "property" has been defined as that which is included in a property tax account. For example, if an individual owns two lots and receives two tax bills, each property tax account would constitute a vote. On the other hand, if an owner of two lots receives only one tax bill, that property tax account would constitute one vote. The only variance to this example is when a district is being formed on the "per platted lot" basis. In that case, each lot counts as one vote.

The County uses the following criteria for counting votes in favor of the formation of the district:

*(In the case of multiple ownership, all owners must sign if there is no document designating a legal representative.)

To determine the percentage of votes in favor of the district, the number of certified petitions is divided by the number of property tax accounts to be included in the district. If the district is formed on a "per platted lot" basis, the number of lots represented by certified petitions is divided by the total number of lots in the district.

The signed petitions are collected by the community and forwarded to the Office of the Budget. The Special Taxing District Coordinator reviews each petition and ascertains that the signature names are the same as the property owners of record (as determined from the Consolidated Property File) and that the property is within the boundaries of the proposed Special Community Benefit District.

Once the petitions have been counted and verified and at least the minimum percentage of signatures has been certified, the Special Taxing District Coordinator will prepare a request for legislation to create the district. If the request is approved by the Administration, it will be forwarded for preparation of legislation.

Upon completion of the required internal reviews and approvals, the County Executive will send the proposed legislation to the County Council for their action.

The County Council will advertise the proposed legislation in the local newspaper at least once a week for four weeks. The cost of the advertising is billed directly to the community association. The advertising details the boundaries of the district, the purpose for its formation, and the date of the public hearing. The hearing is an opportunity for those who are proponents and opponents of the legislation to share their opinions with the County Council. Upon completion of the public hearing, the Council will vote to approve or deny the legislation. If the Council votes to deny, no further action takes place.

The Special Community Benefit District is established when the legislation is passed by the Council and is signed by the County Executive. The bill becomes law forty-five (45) days after the County Executive signs it. The district cannot expend funds until a budget is formally approved by the County Council.

If a proposed SCBD is going through the process of being established during the budget cycle, the responsible association may submit a proposed budget that is contingent upon County Council approval of the legislation to establish the SCBD. Generally, the legislation must be introduced and a public hearing scheduled prior to March 31 of the calendar year if taxes are to be collected July 1 of that year.

Each year the Special Community Benefit Districts are given an opportunity to prepare a budget for the next fiscal year. The budget preparation cycle begins in October and ends January 31 of the next calendar year. The County Code requires that all budget requests be submitted to the County on or before January 31 preceding the beginning of the next fiscal year on July 1. During the October through January period, the Board of Directors of the association responsible for expending the SCBD assessments must prepare a budget outlining the proposed expenditure items and the proposed tax rate. The budget must be presented to the property owners for their comments no later than December 31. It is the duty of the Board to prepare, adopt, and submit a final budget to the County.

(a) Unless otherwise provided by law, special taxing district budget requests shall be prepared by the board of directors of the civic or community association administering the district and submitted to the property owners for their comments not later than December 31 of each year or the date approved by the Budget Office, not later than January 14.

(1) for the collection and administrative charge of five percent of the funds collected in the district, but not less than $100 nor more than $2,000, to be paid into the general fund of the County;

(2) for the appropriation of unencumbered or unexpended surplus of the district's taxing district account; and

Upon receipt by the County, the budget will be checked for mathematical accuracy and for consistency with the legislated purposes of the district. Any discrepancies will be brought to the attention of the association's budget contact person and will be corrected before the budget is finally accepted by the Office of the Budget. The County Executive will include approved SCBD budgets in the proposed County budget presented to the County Council annually on the first working day of May. The County Council will hold two public hearings on the Operating Budget, at which time these budgets are subject to discussion and comment by the public. The County Council will enact all special tax rates during May, as it does the County property tax rate and certain other rates.

(Forms and definitions omitted here; see original document)

Expenditure of special community benefit district assessments must be consistent with line items approved in the annual budget adopted by the County Council. The fiscal year begins July 1, although taxes are not overdue until after September 30. The County's first disbursement of SCBD assessments to the association does not generally occur until 30 days following the closing of the tax payment period. All disbursement checks are forwarded to the association treasurer or other designated officer.

The association must submit a performance bond to the County's Office of Finance before any funds can be disbursed to the association. The bond must be in an amount equal to, or greater than, the budget appropriation. The bond may be for one or more years and may be made out for the position of treasurer rather than an individual. The disbursement may not exceed the annual budget appropriation and/or the limits established in the performance bond. Funds collected in excess of the appropriation will be held for appropriation the next fiscal year.

Article 19, Section 40, of the Annotated Code of Maryland stipulates requirements for audits of all special taxing districts in the State, and the methods by which the audits must be completed.

In summary of the Code, for any tax district with annual expenditures greater than $50,000, an audit is mandatory annually. For SCBD's with expenditures of less than $50,000, an annual financial report is required and once every four years a full audit is due.

It is the responsibility of the Anne Arundel County Auditor's staff to insure compliance with the State code. A copy of their guidelines follows:

A. Article 19, Section 40 of the Annotated Code of Maryland describes certain reporting and auditing procedures for special taxing districts within Maryland. These requirements can be summarized as follows:

1. All special taxing districts having moneys disbursed or expended by a person or body independent of the County government must file a financial report each year, no later than 90 days following the close of their fiscal year. This report must contain the following:

2. Special taxing districts having annual expenditures greater than $50,000 are required to have this financial report audited each year.

3. Special taxing districts having annual expenditures less than or equal to $50,000 are required to have an audit every four years, unless the County determines on a case-by-case basis that more frequent audits are required. (Note: This does not exempt the district from the filing requirements outlined in No. 1 above.)

4. If a special taxing district does not submit a financial report and audit report as specified above, the County may withhold the distribution of the taxes imposed on behalf of the district.

The following comments should clarify several of the most often asked questions relating to these requirements.

1. The statement of revenues and statement of expenditures and encumbrances should be presented in a format that compares actual figures to approved budgeted amounts.

2. Amounts that were due to the association from Anne Arundel County but not disbursed as of June 30, should be included as a receivable (Due from Anne Arundel County) on the balance sheet. This information is provided to each district in September of the subsequent fiscal year by a letter from Anne Arundel County and can be verified through the Anne Arundel County Office of Finance 410-222-1414.

3. The above reporting and auditing requirements became effective on July 1, 1983. Since audit reports are significantly more involved than unaudited financial statements, we recommend that each association responsible for the expenditure of SCBD assessments consult with a Certified Public Accountant or other qualified advisor well in advance of the close of the fiscal year.

B. Further questions concerning these reporting and auditing requirements can be addressed by referring to the audit guide which is issued to each district or by telephoning the County Auditor 's Office at 410-222-1138.