Enhanced Infrastructure Financing Districts

Transcription

1 Enhanced Infrastructure Financing Districts A New Power Tool for Growth in California Doug Praw doug.praw@hklaw.com Copyright 2015 Holland & Knight LLP. All Rights Reserved

2 Principles behind the design of the Enhanced Infrastructure Financing District Maximum flexibility in all design features of the legislation Creation of districts Creation of Public Finance Authorities Design of Business Plans Design of Investment Schedules Goal orientated approach encourages multiple investments to be integrated Investment are problem orientated not program or stovepipe driven Lifecycle costs can be integrated into the financing Creates the possibilities of multiple revenues streams Planning, financing and decision-making are integrated Benefits of investments to people and land can be captured and related to Investments (the Nexus test) Linkage of benefits and expenditures will assist in public acceptance Create Opportunity to address the Two California s dilemma PFA investments will create employment opportunities Will regenerate older and underperforming areas of the state 2

3 New Model for local and regional infrastructure investment in California Authorizes the creation of a Public Finance Authority (PFA) with comprehensive authority to address all local and regional needs All infrastructure except school facilities Economic Development including industrial, commercial, housing-broader eligibility than redevelopment Environmental clean up Single or multijurisdictional authority focused on the geography of the problem to be solved The size of the district is dependent on the public goals and needed investment- Governing Board(s) decide Can put multiple jurisdictions together Creates a way to put multiple organizations needed to address goals and problems to be solved City or Country initiates but all taxing entities are eligible to be on the Board including special districts Partnerships with private and non-profits can developed with streamlined procurement procedures 3

4 EIFDs: Process, Powers and Prerequisites Process All taxing entities adopt resolution to join EIFD and approve plan PFA, representing all stakeholders and the public, governs EIFD Powers Tax-increment financing from a wide range of revenue sources Wide range of potential infrastructure investments Lower threshold for voter approval (one 55% vote, no 2/3) Longevity in bonding (45 years) Brownfield remediation authority / Polanco Act revival Prerequisites Redevelopment wind-down: Dept. of Finance & Controller signoff Familiar procedural and public notice requirements Affordable housing requirements if housing is destroyed 4

5 Funding Strategies 1. All Property Tax revenue (except for money for schools) Tax increment within the district of the amount pledged by the consenting taxing agencies Revenues from the growth on the property tax attributed to backfill from the VLF received by the city or county. 2. Other sources in the statute: Property tax revenue distributed to a city, county or special district after payment of a redevelopment agency s debts by the successor entity. Fees or assessment revenues derived from one of 10 specified existing sources, including assessments for benefits and developer fees. Loans from a city, county or special district. 3. Other sources: User Fees and Public-Private Partnerships derived from the use of the Infrastructure Finance Act. Federal and State grants, - e.g., California s Cap and Trade auction proceeds, if benefitting a disadvantaged community under SB

6 EIFD - Summary of Key Terms 1. Enhanced Infrastructure Financing District Governmental entity established by a city or county that carries out a plan within a defined area to construct, improve and rehabilitate infrastructure The Area 2. Public Financing Authority (PFA) Legislative body that governs the EIFD The Team 3. Infrastructure Financing Plan Plan adopted by city or county. Describes public facilities & development to be financed by the EIFD Implemented by Public Financing Authority (PFA) The Strategy 6

7 Opportunities for Investment Purchase/construction/improvement of real or tangible property with estimated useful life of 15+ years, or related planning & design work Public capital facilities OR other projects of communitywide significance need not be within district as long as the project has a tangible connection to the work of the district Examples include (but are not limited to): Transportation facilities including highways, parking and transit facilities Community parks, open space and recreational facilities Brownfield restoration and other environmental mitigation Construction or repair of industrial structures for private use Projects which implement a Sustainable Community Strategy, and Transit Priority Projects. Affordable units within mixed-income housing developments. 7

8 EIFDs Diverse Funding Approach Can use multiple funding sources with tax increment: If Bond Issuance then 55% voter approval required Local Funding Sources: Private investment Redevelopment Property Tax Trust Fund (RPTTF) Development Agreement / Impact Fees User fees City / county / special district loans Hotel TOT Benefit assessments Contribution from Special District Levied by EIFD Vehicle License Fee (VLF) prop. tax backfill increment Potential to apply State funding sources: Proposition 1 bond funds Cap-and-trade proceeds Federal & State Grants: Greenhouse Gas Reduction Funds Federal DOT/EPA/DOE funding programs EIFD Fund 8

9 Forming an EIFD Successor Agency Prerequisite Receive Finding of Completion (FOC) Certify no SA assets under litigation will benefit Comply with State Controller s asset transfer review Participating legislative bodies adopt resolution of intention to establish EIFD Identify infrastructure projects Define project area Schedule public hearing for IFP Create Public Financing Authority (PFA) Identify District Members Appoint PFA Members Create Infrastructure Financing Plan (IFP) Choose official to prepare plan Distribute to property owners and affected taxing entities Conduct public hearing Approve the IFP Establish PFA Adopt resolution proposing adoption of IFP and formation of EIFD Adopt IFP and resolution of formation creating the EIFD 9

10 What Types of Projects Could an EIFD Fund? Public Light Rail Inf. Sustainable Communities Parks & Open Space Affordable Housing Stormwater Recharge Industrial Structures Public BRT Inf. Wastewater Treatment Childcare Facilities 10

11 Infrastructure Development Tools Compared Areas Mello-Roos/CFDs Classic IFDs EIFDs Voter Approval Multiple 2/3 approvals Multiple 2/3 approvals One 55% approval for bond issuance Revenue Sources Revenue from new special tax Only increment of tax levied on taxable property Broad authority to capture net available revenue (other than school funds) Investment Options Certain enumerated services (police/fire, recreation, maintenance, etc.) and construction of capital facilities Only public capital facilities of communitywide significance Any public capital facilities OR other specified projects of community significance (brownfields restoration, transit priority projects, etc.) Collaboration among Taxing Entities Possible, but requires creation of Joint Powers Authority IFD law allows other taxing entities to contribute taxes, but law has no procedure for joint governance (Joint Powers Authority presumably possible) EIFD Governed by Public Financing Authority representing participating governments and members of the public Longevity of Bonds/District 40 years from bond issuance 30 years from creation of district 45 years from Bond Issuance 11

12 Promising Opportunities Scenarios Where Establishing an EIFD is Worth Considering» Well-Developed Idea for Infrastructure Improvement» Multiple overlapping taxing entities» Area Where Planning Work is Needed or Underway» Small Discrete Area with Few Property Owners» Your Situation? 12

13 Contact Douglas Praw Holland & Knight Partner Los Angeles Office 400 South Hope Street 8th Floor Los Angeles CA Phone Fax