Item 9: IFD/CFD Update March 9, 2016
FORMATION PROCESS Prior Update December 2015 Board Meeting Formation guided and informed by Financing Plan and Housing Plan The IFD and CFD are established separately, but formation processes will proceed concurrently Forming the districts will take approximately 18 to 24 months to complete Working group including TIDA, Office of Public Finance, City Attorney, outside counsel, and consultants, and TICD working on formation Rate and Method of Apportionment (RMA) and Infrastructure Financing Plan (IFP) key formation documents for the CFD and IFD and Resolutions of Intent (ROI) for formation and issuance of debt being prepared/reviewed by working group
IFD & CFD FINANCING IFD Financing district formed over a specific geographic area San Francisco pledges City property Tax Increment generated within district for a specified period of years May finance infrastructure with community-wide significance and a useful life of 15 years or more; may not finance services CFD CFD formed over a specific geographic area Levies a supplemental tax on properties within the district to finance infrastructure facilities with a useful life of five years or more Initially paid by developer, ultimately by future homeowners & commercial tenants Eligible expenses and term more flexible that IFD May also finance services (such as park maintenance)
FORMATION ANALYSIS Cost and revenue projections being updated/revised Affordable housing discussions will inform formation Target housing percentages and costs Revenues committed to IFD Anticipate filing ROIs with the Board of Supervisors in May/June 2016 Will continue to update through Housing Committee and return to full TIDA board before filing ROIs Affordable housing discussions will influence IFP and ROI for IFD
IFD LEGISLATION ANALYSIS Three alternative authorizing State legislations IRFD: Infrastructure and Revitalization Financing Districts (AB 229) EIFD: Enhanced Infrastructure Financing Districts (SB 628) CRIA: Community Revitalization and Investment Authority (AB 2) Relative to 2011 IFD Law these new frameworks offer: Broader range of authorized improvements including affordable housing Longer period to leverage tax increment 40-45 years vs 30 years EIFD allows pledge and bonding of Vehicle License In-Lieu Fees IRFD allows project areas with unique time limits; allows post-formation annexation of additional area
IFD LEGISLATION ANALYSIS EIFD and CRIA have generally similar parameters, however: EIFD allows pledge of Vehicle License In-Lieu CRIA requires 10 year review and potential vote for continuing authorization IRFD has greater flexibility and preferable governance/administrative requirements IRFD: Project areas, annexation of property, and unique time limits EIFD: More stringent replacement housing provisions EIFD distinguished from IRFD by: 45 year term Ability to pledge of Vehicle License In-Lieu
IFD FORMATION ANALYSIS EIFD vs IRFD Term: Flexibility of the IRFD to set multiple clocks mitigates the additional term of an EIFD The City could elect to pledge general fund revenues beyond year 40 to affordable housing Developer reimbursements would already be fulfilled Would not be bondable under IRFD, but other bonding options Vehicle License In-Lieu Fees Possible to form an IRFD to pledge tax increment and EIFD for sole purpose of pledging In-Lieu VLF Certificates of Participation (COPs) can be used bond against a pledge of In-Lieu VLF Formation of IRFD Recommended Greatest flexibility Maximize present value of tax increment Alternative means available to pledge Vehicle License In-Lieu return equal or greater Net Present Value
FORMATION TIMELINE Q1 2016 Q2 2016 Q3 2016 Q3-Q4 2016 Finalize boundary maps, list of authorized facilities, rate and method of apportionment (RMA), infrastructure financing plan (IFP), resolutions etc. Validate voting pool, submit resolutions of intent to BOS for approval, initiate CFD Report, schedule public hearings Hold public hearings, submit resolutions of formation to BOS for approval, formation elections held Target for validation of IFD and formation of CFD
Questions?