San Diego County may now begin taking advantage of a program that has been available to cities in the state of California for more than a decade.
The California Statewide Communities Development Authority has a Statewide Community Infrastructure Program (SCIP), and the County of San Diego will become a member.
A 4-0 San Diego County Board of Supervisors vote Sept. 25 with Greg Cox in Washington, DC, adopted a resolution authorizing the county to join the SCIP and authorizing the CSCDA to accept applications from property owners seeking to form Community Facilities Districts, to conduct special election proceedings and to levy assessments.
“This program allows development to finance,” said Supervisor Jim Desmond. “That promotes more housing throughout the county.”
The California Statewide Communities Development Authority was created to provide local governments, non-profit public benefit corporations, and private entities with access to low-cost, tax-exempt financing for projects which create jobs, help communities prosper and improve the quality of life for local residents.
The CSCDA is a joint powers authority whose members consist of more than 530 cities, counties and special districts.
The County of San Diego joined the CSCDA in August 1991.
The county’s participation in the SCIP will allow developers to obtain low-cost, long-term financing for the costs required to fund infrastructure improvements, and the SCIP financing can also be used to provide the funding for developer impact fees.
Because the bond funding is pooled among multiple projects the costs associated with formation, administration, and bond issuance throughout the state are shared so the cost is reduced for developers as well as for the individual property owners responsible for the CFD tax assessment.
The CSCDA has the statutory authority to issue bonds, notes or other financing documents in order to promote economic development, including the provision and maintenance of multi-family housing.
Since its inception in 1988 the CSCDA has issued more than $60 billion of tax-exempt bonds.
The Statewide Community Infrastructure Program was created by the CSCDA to help finance development projects. The tax-exempt bond financing program pools the sale of bonds from different jurisdictions into a single issuance. The bonds can finance impact fees and public improvements through the establishment of assessment districts which levy a tax on property owners within the area.
The use of CSCDA resources to issue the bonds and administer the assessment districts reduces the staff time requirements of the local agency, which must approve the project and the financing in order for the CSCDA to issue the financing mechanism.
The local jurisdiction’s approval of the bonds does not make the jurisdiction liable for any financial obligations. The CSCDA rather than the jurisdiction will issue the bonds, and the project developer is responsible for their repayment.
The county will still have staff time to review the applications and manage payment requests, although developers are required to reimburse the county for the staff time costs.
A Community Facilities District includes a special tax to pay for services not funded by the regular property tax and can also be used to recover the cost of infrastructure for a project.
The annual assessment is part of a landowner’s property tax bill.
Although a CFD formed to provide services would be perpetual, a CFD created to recover the cost of infrastructure would be dissolved after the bonds are paid off although a homeowners’ association assessment could still be levied to cover maintenance.
In 2007 the county supervisors adopted Board Policy I-136 which outlines how potential Community Facilities District projects will be evaluated, ensures that the CFDs are created for the public good, and stipulates disclosure requirements which notify prospective property owners of the assessment.
Policy I-136 also defines credit requirements to protect bondholders from default for CFDs which issue bonds for reimbursement of constructed infrastructure.
Policy I-136 also limits the tax rate for a CFD to 1.86 percent of the estimated sales price of the residential homes.
Source: East County Californian