- EIFD Financing Plan
- EIFD Financing Plan - Exhibit A - Map of Boundaries
- EIFD Financing Plan - Exhibit B - List of Assessor Parcel Numbers
- EIFD Financing Plan - Exhibit C - List of Projects
- EIFD Financing Plan - Appendix A - Projected Tax Revenues
- EIFD Financing Plan - Appendix B - Fiscal Impact Analysis
- EIFD Financing Plan - Appendix C - Description of EIFD Subareas
- EIFD Financing Plan - Appendix D - Projection of Bonded Indebtedness
- EIFD Financing Plan - Appendix E - Determination of Maximum Cap on EIFD No 1 Tax Revenues
The City of West Sacramento’s Proposed Enhanced Infrastructure Financing District (EIFD) No. 1
Formation of West Sacramento’s First Enhanced Infrastructure Financing District (EIFD)
As directed by the City Council, the proposed district would include much of the area that comprised the former West Sacramento Redevelopment Project Area, or a proposed 4,125 acre EIFD versus the 5,416 acre Redevelopment Project Area. Those portions of the former RDA proposed to be included in the EIFD are the areas that have a potential for new development and/or private investment that would lead to an increase assessed in valuation and therefore tax increment growth. The redevelopment area was more inclusive because: 1) the boundaries had to capture conditions of “blight”, which is no longer necessary with EIFD formation, and 2) under redevelopment, tax increment funds could only be spent within the boundaries of the redevelopment area, requiring a larger area to capture “project uses”. For the EIFD, the proposed boundaries now include 14 subareas that are “non-contiguous” and focused around community planning, economic development, or other geographic planning parameters.
The existing fiscal year 2016-17 subarea “assessed valuation” will be the base value, with future growth over these amounts generating tax increment revenue, which for the purpose of our present analysis is estimated to be 45-years. Below is a summary of the subareas with existing assessed valuation
|Subarea||Subarea Acreage||Existing Subarea Assessed Valuation (In Millions $)|
|1A||The Rivers II||75||$14|
|1I||North of Port Industrial||240||$189|
|1J||Port North Terminal||172||$19|
|1K||Port of Sacramento Industrial Park||881||$575|
|1L||Southport Industrial Park||665||$293|
Ever since the City of West Sacramento incorporated nearly 30 years ago, property tax increment financing (TIF) has been an essential driver of positive economic and physical change. TIF, the concept of borrowing against future growth in property taxes to fund public infrastructure and other improvements to enable private investment, was available to the City through its former redevelopment agency. However, when the State Legislature eliminated redevelopment in 2011, communities throughout California were left without a viable mechanism for using TIF to promote economic development.
In response to redevelopment dissolution, in September 2011 Mayor Cabaldon commissioned a team of community leaders led by Councilmember Ledesma that looked at options for continuing investments in infrastructure and revitalization in the post-redevelopment environment. This effort culminated in the Council’s adoption of the Community Investment Action Plan (CI Plan), which became the blueprint for the City’s economic development program of today. The CI Plan put forth 20 recommendations which have since all been substantially implemented to recreate a redevelopment program using a new set of financing and real estate tools. The CI Plan’s two chief recommendations included: 1) adopting a budget measure to allocate funding received by the City from the dissolution of redevelopment to a new Community Investment Fund; and 2) forming one or more TIF districts known as Infrastructure Financing Districts (IFDs) to restore the City’s ability to bond against future revenue to finance infrastructure investments.
The first recommendation was ultimately implemented in November 2012 when over 87 percent of West Sacramento voters passed Measure G, an advisory measure proposed by the City Council which affirmed the use of former redevelopment funding for “Community Investment” projects. Since Measure G funding first became available in FY 2012-13, over $15 million in Community Investment Funds have been allocated to the planning, design, and construction of projects such as the McGowan Bridge, Village Parkway Extension, Washington District and Grand Gateway infrastructure, C Street Bridge, Broadway Bridge, bicycle-pedestrian improvement projects, and implementation of the Pioneer Bluff Transition Plan.
The second key recommendation of the CI Plan, the formation of IFDs, was impeded by problems with the original IFD law including a prohibition on forming a district within a former redevelopment area. After nearly two years of pursuing legislation to amend the IFD law to eliminate this prohibition, in February 2014 the Governor signed AB 471 (Atkins) which included this needed legislative fix. As a result of AB 471, the City was able to form the Bridge District IFD, which has now been in place since December 2014.
Following up on AB 471, the City joined a statewide effort to reshape the IFD law into a tool that could be used on a widespread basis to finance infrastructure and other economic development activities much in the same way redevelopment TIF was utilized. In September 2014 the Governor signed SB 628 (Beall), which authorized Enhanced Infrastructure Financing Districts. Some of the key “enhancements” to the IFD law enacted by SB 628 included a much longer district term, elimination of the vote requirements to form a district, and an expanded list of allowable uses of EIFD funds including projects that implement a sustainable communities strategy, brownfield remediation, industrial building improvements, and affordable housing. A year later, the Governor signed AB 313 (Atkins), which made additional cleanup changes to bring the EIFD law to its current form, which is codified under Section 53398.50-53398.88 of the California Government Code.
West Sacramento became only the third jurisdiction in the State to form a non-redevelopment TIF district when the Bridge District IFD was established in 2014.
EIFD Geographic Scope
There is no limit to the size of an EIFD and the district boundaries may be non-contiguous, but the required Infrastructure Financing Plan (EIFD Plan) must include a fiscal impact analysis to demonstrate that the EIFD will not have an adverse impact on the city’s general fund. In other words, the analysis must show that the cost of providing services to the district area and the entire city can still be supported by the general fund if all or a portion of the property tax increment is diverted to the district. This fiscal balance can be achieved by either appropriately scaling the size of the EIFD or adjusting the portion of tax increment that is allocated to the district versus the general fund.
Staff considered various options for EIFD boundaries, ranging from the entire city to most of the former redevelopment project area. Since Measure G was enacted in 2012, all of the tax increment from the redevelopment area has been allocated to the Community Investment Fund, just as it would have been allocated to the Redevelopment Agency had it not been dissolved. Under the current Measure G system, the City’s General Fund has not been adversely impacted. Staff has concluded that the ideal EIFD boundaries would resemble the former redevelopment area, but omit areas that are most likely to generate higher costs for general city services and therefore may adversely impact the fiscal analysis of the EIFD Plan. This approach would essentially continue the implementation of the existing Measure G system of tax increment allocation and not divert any revenue from property taxes that are currently allocated to the General Fund.
Below is a map of all areas proposed to be included in the EIFD. In addition, individual sub-areas maps are individually labeled and included below.
EIFD Projects and Uses
The EIFD will finance the purchase, construction, expansion, improvement, seismic retrofit, or rehabilitation of any real or other tangible property with an estimated useful life of 15 years or longer and are projects of communitywide significance that provide significant benefits to the district or the surrounding community. Any facilities located outside the boundaries of the EIFD shall also have a tangible connection to the work of the EIFD as detailed in the infrastructure financing plan. The EIFD will also finance planning and design activities that are directly related to the purchase, construction, expansion, or rehabilitation of these projects. The EIFD may finance costs described in Government code sections 53398.56 and 53398.57. Projects financed by the EIFD may include, but not be limited to, all of the following:
- Highways, interchanges, and ramps;
- Arterial streets;
- Parking facilities;
- Transit facilities;
- Parks, recreational facilities, and open space;
- Sewage treatment and water reclamation plants and interceptor pipes;
- Facilities for the collection and treatment of water for urban uses;
- Facilities for the transfer and disposal of solid waste, including transfer stations and vehicles;
- Storm water conveyance and collection facilities;
- Flood control levees and dams, retention basins, and drainage channels;
- Child care facilities;
- Broadband and telecommunications infrastructure;
- Sidewalks and streetscape improvements;
- Bicycle lanes and paths;
- Public art;
- Corporation yards;
- Police facilities;
- Brownfield remediation;
- Affordable housing as authorized under the EIFD Law;
- Projects that implement a sustainable communities strategy and transit priority projects; and
- Acquisition, construction, or repair of industrial structures for private use.
In addition to the direct costs of the above facilities, other incidental expenses as authorized by the EIFD Law, including, but not limited to, the cost of environmental evaluation and environmental remediation; engineering and surveying; construction staking; utility relocation and demolition costs incidental to the construction of the facilities; costs of project/construction management; costs (including the costs of legal services) associated with the creation of the EIFD; issuance of bonds or other debt; costs incurred by the County or the EIFD in connection with the division of taxes pursuant to Government Code section 53398.75; or costs otherwise incurred in order to carry out the authorized purposes of the EIFD; reimbursements to other areas for facilities serving the EIFD; and any other expenses incidental to the formation and implementation of the EIFD and to the construction, completion, inspection and acquisition of the authorized facilities.
Through the EIFD formation process a more detailed list of projects will be developed, primarily based on the City’s Capital Improvement Plan (CIP), but also includes potential non-CIP uses that would be permitted under EIFD law. This list is intended to form the basis of the more detailed description of potential EIFD investments that will be included in the EIFD Plan. While it is unlikely that EIFD funds will be used to support all of the projects included on this list, the plan should maintain maximum flexibility since the law does not require the list to be exclusive.
A timeline of the formation process will be provided at that time, but in general the process includes the following major milestones:
|City Council adopts a ROI and establishes the PFA.||November 16, 2016|
|PFA directs the City to prepare the EIFD Plan.||February 15, 2017|
|City Council approves a Resolution Approving the EIFD Plan.||April 19. 2017|
|PFA holds a public hearing on the EIFD Plan, adopts a Resolution Proposing Adoption of the EIFD Plan and Formation of the EIFD, and adopts an Ordinance Adopting the EIFD Plan and Creating the EIFD.||April 19, 2017|