1 community facilities district & redevelopment overview january 19, 2008
TRANSCRIPT
![Page 1: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/1.jpg)
1
Community Facilities District & Redevelopment Overview
January 19, 2008
![Page 2: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/2.jpg)
2
Overview
What is a Community Facilities District
What can CFDs pay for
Advantages and disadvantages of CFDs
Redevelopment
![Page 3: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/3.jpg)
3
Community Facilities Districts
• Legal entity formed by School District
• Finances public facilities or fees
• Finances services
• Boundaries may be non-contiguous
![Page 4: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/4.jpg)
4
Facilities
• Public capital improvements with a useful life of more than 5 years
• Infrastructure, school buildings and other facilities, equipment, etc.
• Level II fees or other• May fund facilities of other public
agencies (joint financing agreement)• Lead Agency must have greater share
![Page 5: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/5.jpg)
5
CFD Services
• Services– Can fund School Maintenance with a
registered voter vote.
– Limited to new maintenance and services
![Page 6: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/6.jpg)
6
Community Facilities Districts
• Maximum special tax set by election• If less than 12 registered voters within
proposed boundaries, then landowner vote • Mailed ballot• 2/3 vote required - one vote per acre • Annual special tax levy - collected on property
tax bill• Constitutes annual tax lien (fixed period for
facilities, sufficient to cover debt services and other costs)
![Page 7: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/7.jpg)
7
CFD Bonds
• Finance public capital facilities• Maximum bond authorization set by
election • Requires 3 to 1 value-to-lien ratio • Appraisal/absorption study• Requires option to tax on
undeveloped property
![Page 8: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/8.jpg)
8
CFD Bonds (Cont.)
• Reserve fund, capitalized interest• Issue one or more series (25 to 30 year
maturities)• Financial advisor, underwriter, fiscal
agent, bond counsel, disclosure counsel, special tax consultant
• Bonds may be sold competitively or on a negotiated basis
![Page 9: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/9.jpg)
9
Financing Policy
Agencies are required to adopt Financing Policy for land-securing financings
Guidelines minimum acceptable credit quality for bonds to be issued
Guidelines for establishing the special tax levy Should address types of facilities and services
to be funded
![Page 10: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/10.jpg)
10
Benefits
For the School District: Bond issue provides timely construction of
facilities compared to pay-as-you-go Provides opportunity to bring developer to the
table Usually provides higher than Level II funding Burdens the new development with the cost of
new schools, not the entire school district
![Page 11: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/11.jpg)
11
Benefits
For the Developer/Builder: Assists cash flow on project by passing cost onto
homeowner Provides off-book financing
For the Homeowner: Potential lowering of home purchase price since
fees paid are not added into developer’s cost to build (partially offset by higher property tax bill)
![Page 12: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/12.jpg)
12
Disadvantages
For the School District: Ongoing existence and administration of CFD Line item on tax bill – public perception
For the Homeowner: Higher overall property tax rate than those without CFD Additional tax lien creates foreclosure risk (bonded)
For the Builder: Pays for all costs associated with setting up CFD Upfront credit enhancement and pays vacant land tax
(bonded)
![Page 13: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/13.jpg)
13
Redevelopment
Tax Increment
ERAF
![Page 14: 1 Community Facilities District & Redevelopment Overview January 19, 2008](https://reader035.vdocuments.mx/reader035/viewer/2022062517/56649ee95503460f94bfade4/html5/thumbnails/14.jpg)
14
Questions