HomeMy WebLinkAboutItem 8.1 Statewide Comm Infrastructure ProgG~~~ OF DU~~~
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1`~.~~~~%Z STAFFREPORT CITY CLERK
~`c~ ~ ~ DUBLIN CITY COUNCIL File # ^0~~-~~
~LIFOR~
DATE: August 17, 2010
TO: Honorable Mayor and City Councilmembers
FROM: Joni Pattillo, City Manager
SUBJEC : Consideration of amending City of Dublin's participation in the Statewide
Community Infrastructure Program (SCIP) to include Multi-Family Residential
Development
Prepared By: Linda Maurer, Economic Development Director
EXECUTIVE SUMMARY:
The City Council is being asked to provide Staff direction relative to the potential amendment of
the City's participation in the Statewide Community Infrastructure Program (SCIP) to include
multi-family residential development.
FINANCIAL IMPACT:
None at this time.
RECOMMENDATION:
Staff recommends that the City Council provide Staff with direction on the potential amendment
of the City's participation in the Statewide Community Infrastructure Program (SCIP) to include
multi-family residential development.
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~,e(_,~ .~ / ~2,Q-uh~,~ J
C~__ Submitted B
Y
Economic Development Director
Revie ve By
Assistant City Manager
Page 1 of 3 ITEM NO. •!
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DESCRIPTION:
The 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. At this time, over 500 cities, counties and special districts are members of the
CSCDA, including this City. There are 30 SCIP Cities and Counties, including the City of
Livermore.
The Statewide Community Infrastructure Program ("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 City will be financed by the issuance of tax-exempt bonds by CSCDA. CSCDA will
impose a special assessment on the owner's property (bonds typically have a 30-year term) to
repay the portion of the bonds issued to finance the fees paid with respect to the property. The
debt service payment is transferred from the developer to the subsequent property owner (once
the property is developed). The property owner will either pay the impact fees at the time of
permit issuance, and will be reimbursed from the SCIP bond proceeds when the SCIP bond is
issued, or the fees will be prepaid to the City from the proceeds of the SCIP bonds. In this way,
the City is never at risk for the receipt of the impact fees.
On September 20, 2005, the City of Dublin adopted Resolution No. 185-05 authorizing the City
of Dublin to join SCIP (see Attachment 1). The program allows the City of Dublin to provide a
no-cost economic development incentive to attract commercial and industrial businesses and
provides developers with low-cost, long-term tax-exempt financing of those fees. The SCIP
program allows for the payment of certain City development impact fees: Public Facilities
(Community Parks, Community Parks Improvements, Community Buildings, and Neighborhood
Parks Improvements), Freeway Interchange, Traffic Impact, Tri-Valley Transportation, and
Noise Mitigation. The program does not allow for the payment of the following City fees: Public
Facilities (Libraries, Civic Center, and Aquatic Center), Fire Impact Fees, or the Inclusionary In
Lieu Fee. The Dublin San Ramon Services District (DSRSD) joined the SCIP program in 2006
and permits certain DSRSD fees to be financed over time. The SCIP program will not allow
bond proceeds to pay for School District or Zone 7 development fees.
At this time, two (2) Dublin projects (Venture Professional Center and the Hummer/Saturn/Saab
dealerships) have participated in SCIP financing.
When the program was adopted in 2005, Staff recommended that the program be made
available to commercial/industrial developments but did not recommend the program for any
residential developments as Staff was concerned about the potential for individual homeowners
being required to pay the development impact fees through the assessments on their property.
Since the time of the program's adoption, the housing market has softened and it has become
more difficult for residential developments (including multi-family) to access the necessary
funding. Staff believes that the availability of SCIIP financing for multi-family residential
developments would be beneficial to interested developers.
Staff feels that there are benefits to both the City and the property owner to extend the program
to multi-family residential developments. The benefits include (but are not limited to):
Page 2 of 3
CITY Benefits
• The City is not liable for the repayment of the bonds issued by CSCDA or the
assessments imposed on the participating properties.
• Little City staff time is required to administer the program, as CSCDA handles all
functions related to the bond issuance, etc.
• This type of tax-exempt financing helps cushion the impact of rising development impact
fees on property owners.
• The availability of financing could encourage developers to pull permits which would
provide the City with immediate access to development impact fee revenues.
PROPERTY OWNER Benefits
• Only property owners who choose to participate in the program will have assessments
imposed on their property.
• fnstead of paying cash for development impact fees, the property owner receives low-
cost, long-term tax-exempt financing for these fees, thus freeing up much-needed capital
for other purposes. ~
• The property owner can choose to pay off the special assessments at any time.
• For home buyers, paying the costs of the public infrastructure through a special
assessment is superior to having those costs "rolled into" the cost of the home. While it
might increase the property tax bill, the amount of the home buyer's mortgage would be
smaller, making it easier to qualify.
• Owners of smaller residential projects can have access to tax-exempt financing of
infrastructure.
The potential SCIP financing could however, place a future tax assessment on future multi-
family residential home buyers. While future home buyers will be apprised of the SCIP
assessments at the time of the purchase, they could have subsequent questions about the
assessment lien on their property. Those questions would be answered by the Alameda
County Assessor, rather than the City, as it is an assessment on the property. In addition, the
homeowners of the first residential project developed under SCIP financing would be paying an
assessment unlike any other development in Dublin.
Staff believes that the extension of SCIP financing to multi-family residential development will
ease the financing burden for residential development and could help stimulate future mult-
family residential development.
The Economic Development Ad-Hoc Committee discussed this issue at its June 28, 2010
meeting and recommended the amendment for consideration by the entire City Council.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
Not applicable.
ATTACHMENTS: 1. September 2005 Staff Report (w/out attachments)
Page3of3
CITY CLERK
Fiie # ^~~~'~~
AGENDA STA~`~MENT I tS~~
CITY C~UNCIL MEETING DATE: September 20, ~Q~5
SU~JECT:
PUBLIC HEARIIVG: AuthQrizataon far City of Dublin to join the
Statcwide Community I~ifrastructure Prograrn (SCiP}
Re~ort Yrepc~red by: Chrisfopher L. Fnss
Ec.onorr~ic T~evelvpment Director
ATTACHIVIENT~:
RECfl1VT1VYENDA~riox:
~" ~
1 • SGTP Pragram Inforrnation
2, Proposed ~esalutiv.n
5. Adopt the proposed resolutivn authori~ing th~ City of Dublin
to join the StAtewide Cammuruty infrastructure Program.
1 • Qp~n Pu1~1ic Hearing
2. Receive StaffPres~niation and Public Testimony
3• Question 5taff and Public
4• Close Public Hearing and Deliberate
FINANCIAL STATElVIENT: Narie.
1)ESCRIPTION: The California Statewide Communities ]]~velopment Autharity ("CSCDA")
is a joint powers autharit~ spo.nsared by the ~,eague of Galifo?~nia Citics a.nd the Califarnia staie
Associati4n o~ C~-u~ties. The membcr agencies of CSCDA, xnclude approximately 230 cities 2~rtd ~4
counties throughout California, including the City of ~ublyn.
The Statewide Comrnunity Infrastructure Pra~ram ("SCIP") was instituted by CSC~7A in 2002 to a11ow
owners af property in participaling citres a.nd counties to finance the c~eveloprnent impact fees that would
be payable b~ pro~erty owners upon recaiving develpprnent entitlernents or building permits (see
Attachment 1). lf a property owner choases to participate, the development impact fees owcd to the City
af Dublin will be financed by the issuance of tax-exempt bonds (current izaterest ratc: 5.25°/Q) by CgC]~A.
CSCDA will impose a speczal assessment on the owner's praperty to repay the partion of the bonds issued
to finaaac~ 1he fees paid With respcct to the praperty. The pr~perty owner wi11 either pay the iznp~ct fees at
thc time of pennit issuance, aaa.d wil] be reirnbursed from the SCrP band prqceeds whcn the SCiP bonds
are issued, or the qualifyin~ impact fees will be paid, at the time of the building pernaat i~suance, directly
ta the City of bubiin from the proce~ds of' the $CIP bonds. If the imp~~t fees inereasc from the ti~ne of
the bond issu~ce ~o Y~uildirig pcrmit issuaa~ce, the developer will be responsible for paying the di~'erence
hetween the bond procecds and the final imp~t fees at the timc af building permit issu~nce.
CUPIE~ '~"D; ,jv~n !!. Knnx
Urrj~:l~, H~rringlos & Sutrt:~r ~ r n
4(10 Sanso~rie Street
Sa~i Francisco, C'.4 5~411
Hlcc-forms/xgdaytmt.doc
ATTACHMENT 1
~-I ~- I a S ~ 1
Thc benefits to the City of ]~ublin include;
•`.~'he pragr~m provides an cconotnic develapment incentive ta ~.ltract commcrcial and in ust`~rial
. ~ ~~
businesses to the City that ~nay not atherwise be able to l~catc to Dublin.
• As in canventional assessment financing, the City of Dublyn is not liablc to repay the bonds issued by
CSCDA or the assessinents impased an the participating propcrties.
• C~CDA handles dl] distn~t iarmation, district administration, bond issuance ~nd hond administratian
functions. A participating City ca,n provide financing to praperiy o~uvriers through SC1P while
committing virtually no staff time to administer !he pragrarn.
The benefits ta the develaper iaa.cl~de:
+ pnly devclopcrs who chaose to particzpate in the program wi11 have assessments iinposed ort their
property.
~ Instead af pa~ring cash far development impaat fees, the praperiy vwner receivcs 1ow-cost, long~term
tax-exempt financing af thase fees, freeing up capital For othcr purposes.
• The praperty owr,er c;an choosc to pay off the special assessmen#s at at~y time.
* Owners ot' smallcr projects ca~i have access to tdac-exempt ~nancing of infrastructure. Befare the
inception af SCIP, only projecis large enough to justify the for~nation af an assessrnent or
comrz~uniti~s facitides district h~d a.eeess to tax-exempt financin~.
Staff recently met with SCIF prograax, of~cials and it has bcen determined that the following City
development fees can be paid by the SCIP program:
Pub13c ~aci1~#ies Fees
Community Parks
Community Parks, irnprovcments
Cornmunity Buildings
Land, Neighborhaod Parks
Improvemenls, Nezghborhaod Parks
Freeway Interch~nge Fee
Traffic ~mpact Fees -{Easter~n Dublin Traffic Impact Fee and Dawntow~n Tr~ffic Impact Fee)
Tri-ValZey Transpartation Fee
Nnise Miti~~tion Fee
Th~ SCLP program will nat allow boz~d proceeds to pay for the following City fees:
Public Facilities Fees
Libraries
Civic Cant~r
Aquatrc Center
Fire ~mpact ~+'ee~
~nclusionary In Lieu ~'ees
The SCIP program vcrill ~.1so not aiIow bond proceeds to pay far School District development fees.
Thc SCLP program wili also a11ow ~orid proceeds to pay for certain ~SRSD ~.rtd Zane 7 fees. SCIP 5taff
has xziet with DSRSD and is currently warking on maki~ag this program available far #heir fees.
2
Th~ proposed re~olut~on (see Attachment 2) authorizcs thc CSCDA to accept applications fro~a~ of
prap~rty withyn thc City's pl~nning jurisdiction to apply far tax-exempt .Cnancing of developznent impact
fees tka.rouglZ SCTP. Tt al~o authon~es CSCDA to f'orm an assessment distric# c~vering thc C;ity of Dublin,
conduct assessment proceedings and levy assessmenis against thc property of narticipatin~ owners. It also
authorizes zniscellaneous related actions and makes ccrtain findings zannd deterrninations required by law.
Attached #o the Rcsolution, as Exhibit A, is a"Fann of CSCDA Resolution of Yntenti~n." This is for
infarmational purpases and d~es n.at require action by the City Coui~cil.
Over the past two years, the SCIP program issued honds for development in a nu,m~,ber of cities, includin~
Brentwoad, Elk Grove, Linco~z~., Mi~)brae, Napa, Richmond and Itoseville. ,At the prescnt time, SCIP
Staf.~wil] begin acceptrng applications in October 2005 for a Navemt~er/Deceml~er 240~ bond issues.
Staff has had conve~satio~s ~ith ldcal dewclopers as to their interest in this type of pragram, and the
response has becn positive with the develaper af the Gateway Mcdical Center (Tzi.ad Development}
prepared to submit an ap~~i.~alion to SCTP for considcration, shauld the Ci.~y ~ouncil approve this action.
At this point, Staff would recommend that this pzograrn bc made available t4 camrnerciallindustrial
developments within the City of ~7ubliz~_ Staff feels that this program is a valuable economic development
taol that would help ease the up-front cost burden af carrunerci.al and industrial development in Z7ubHn.
Staff is not recommending this pra~-am fa~ residential developments. Tf it we~e available for r~sidcntial
developments, the individu~l hameawncrs would end up paying t~~e f~es t~hrou~h tlie assessments, which
wau}d include thc costs of issuance and interest. There is na way ta assure that the sales prices ot th~
homes wauld be reduced by these costs. •
REC(7M~Vi~NATi4N: Staff recommends that the City Cauncil conduct the public hearing, deliberale, and
adopt the proposed ~resalution entitlcd "A Resolution of the ~ity Council of the City of Dublin authoriiing
the City to jQin thc Statcwide Cammunity Infrastructu~~ Prdgram and autharizing the California Statcwidc
Cammunities Developm.ent ,A~~thority ta aeccpt applications from pr~perty owncrs for non-residential
de~eiopmcnts, conduct s~ecial assessment proceedings and levy assessments within the t~rritory of thc
City of Dublin and authorizing related actions."
G:1ChrisISCIP Program - Fee FinancinglF4RIv1-agcnda gracement 5C.'tY Prub~ram August 2005,doc
R/31/2005 3:I7 PMF~13.{.{.~~~c,..}~};..~.a..~lA9
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