The supervisors of the county gave to their vote approval early last week that softens the blow of the additional cost to building permits. In addition to all other fees and cost, new TIM fees as high as $37,000 per house is mandated in the new General Plan approved by voters this year.
The Supervisors approved the recommendation by unanimous vote last
week. Details of the proposal are outlined here.
EL
DORADO COUNTY BOARD OF SUPERVISORS
Consideration
of Participation in Statewide Community lnfrastructure Program (SCIP)
Recommendation:
The
Department of Transportation is recommending the Board of Supervisors approve in
concept participation in the Statewide Community lnfrastructure Program (SCIP)
to give property owners an option to finance Traffic Impact Mitigation (TIM)
fees.
Reasons
for Recommendation:
California
Statewide Communities Development Authority (CSCDA) is a joint powers authority
sponsored by the League of California. Cities and the California State
Association of Counties. The member agencies of CSCDA include approximately 230
cities and 54 counties throughout California, including El Dorado County. SCIP
was instituted by CSCDA in 2002 to allow owners of property in participating
cities and counties to finance the development impact fees that would be payable
by property owners upon receiving development entitlements or building permits.
If a property owner chooses to participate, the development impact fees owed to
the County will be financed by the issuance of tax-exempt bonds by CSCDA. CSCDA
will impose a special assessment on the owner's property to repay the bonds
issued to finance fees.
Participation
in SCIP is being recommended specifically to provide a financing option for TIM
fees, however, any County fees collected now or in the future for the purpose of
building public infrastructure are eligible for SCIP financing. Additionally,
fees levied within the County by another government entity may be financed
through SCIP provided that entity enters into a "Fee Accounting
Agreement" with CSCDA.
Within
SCIP, there are two programs, which can be mixed and matched, or used
individually:
>
The Impact Fee Reimbursement Program where the impact
fee is paid at the time of building permit issuance (or occupancy for commercial
projects) and reimbursed from the SCIP bond proceeds when bonds are issued
>
The Impact Fee Prefunding Program where fees are
prepaid to the County from the proceeds of the SCIP bonds.
Under
both programs, our County would not be at risk for the receipt of the impact
fees.
Through
the Impact Fee Prefunding Program, large blocks of development impact fees can
be financed and paid up front, prior to the issuance of building permits, and in
dollar amounts large enough to provide funding for necessary infrastructure
before development takes place. El Dorado County has accepted prefunding of fees
in the past, with the authorization being incorporated into subdivision map
conditions and where prepayment was made through Mello Roos Bond proceeds issued
by our County. This program would be similar except the bonds would be issued by
CSCDA. Through participation in SCIP, owners of smaller projects, both
residential and commercial, can have access to tax-exempt financing of
infrastructure where currently only projects large enough to justify the
formation of an assessment or communities facilities district have access to
this tax-exempt financing.
While
there is no minimum development size required for participation in SCIP, as a
practical matter, each property owner would need to compare the advantages of a
favorable interest rate to the cost of application fee (currently $1,500) and
time to make the application.
In
summary, the benefits to the property owner include:
1.
Only property owners who choose to participate in the program will have
assessments imposed on their property.
2.
Instead of paying cash for development impact fees, the property owner
receives low-cost, long-term tax-exempt financing of those fees, freeing up
capital for other purposes.
3.
The property owner can choose to pay off the
special assessments at any time.
4.
For homebuyers, paying for the costs of public infrastructure through a
special assessment is superior to having those costs "rolled" into the
cost of the home. Although the tax
bill is higher, the amount of the mortgage is smaller, making it easier to
qualify. Moreover, because the special assessment financing is at tax-exempt
rates, it typically comes at lower cost than mortgage rates.
5.
Owners of smaller projects, both residential and commercial, can have
access to tax-exempt financing of infrastructure.
The
benefits to the County include:
1.
In contrast to conventional assessment financing, the County is not
liable to repay the bonds issued by CSCDA or the assessments imposed on the
participating properties.
2.
CSCDA handles all district formation, district administration, bond
issuance and bond administration functions.
3.
A participating county can provide tax-exempt financing to property
owners through SClP with minimal staff time to administer the program.
4.
Providing tax-exempt financing would help cushion the impact of rising
development impact fees for property owners.
5.
The availability of financing will encourage developers to pull permits
and pay fees in larger blocks, giving our County immediate access to revenues
for public infrastructure, rather than receiving revenues stretched out over
time.
6.
As part of the entitlement negotiation process, the possibility of
tax-exempt financing of fees can be used to encourage a developer to pay fees up
front.
7.
In some cases, the special assessments on successful projects can be
refinanced through refunding bonds. Savings achieved through refinancing will be
directed back to the participating county for use on public infrastructure,
subject to applicable federal tax limitations.
The
SClP Manual of Procedures provides all of the details related to the program and
is available on the web page for the California Statewide Communities
Development Authority.
A
couple of key points from the manual warrant highlighting here:
o
The SClP requires
that the SClP trustee in an interest bearing account for each city or county
hold all fees paid either through reimbursement or prefunding. The SClP
administrator is therefore responsible for arbitrage calculations.
o
Funds will be
paid to the County upon written request and in conjunction with incurred capital
costs.
o
Funds must be
expended within three years of the bond issuance.
o
The prefunding
alternative would require changes to the provisions of our TIM fee resolutions
to provide for pre-payment. It is recommended that where fees are prefunded the
payments be considered a credit toward the fee in place at the time the building
permit is issued. In other words, the fee is not locked in by the prepayment.
o
To participate in
SClP your Board must approve a resolution (see attached) that authorizes CSCDA
to form an assessment district covering our planning jurisdiction, conduct
assessment proceedings and levy assessments against the property of
participating owners. It also authorizes miscellaneous related actions and makes
certain findings and determinations required by law.
Fiscal
Impact:
Staff
time associated with the coordination of this program is estimated to be minimal
and less than the time requirements of a County bond issue.
Net
County Cost:
There is no net County cost.
