Regular Meeting
12/18/23 07:00 PM
City Clerk / Records
Maribel Hernandez
Resolution
Doc ID: 5537
COUNCIL RESOLUTION
AGENDA MATTER:
ENHANCED INFRASTRUCTURE FINANCE DISTRICT RESOLUTION OF INTENTION EXECUTIVE SUMMARY:
A Resolution Declaring Its Intention to Establish the Barstow Enhanced Infrastructure Financing District (EIFD) and Establishing the Barstow EIFD Public Financing Authority (PFA); And Approve the Organization of the Public Financing Authority Board, Which Would Consist of Three Council Members and Two Members of the Public; And,
Find that the Adoption of the Resolution of Intention and Establishment of the Public Financing Authority Are Exempt from the California Environmental Quality Act (“CEQA”) as These Actions Do Not Constitute a “Project” Pursuant to CEQA Guidelines Sections 15378(B)(4) and 15378(B)(5), and that These Actions Are Also Exempt from the Requirements of CEQA Pursuant to Section 15061(B)(3) of the CEQA Guidelines.
DISCUSSION:
An Enhanced Infrastructure Finance District (“EIFD”) is a governmental entity that may be established by a City, County, or through a partnership between the two, that uses future incremental revenue from existing tax rates to help fund and complete public capital facilities and infrastructure projects, as well as other specified projects of community wide significance, that provide a significant benefit to the properties within the EIFD as well as the surrounding community. EIFDs are funded by capturing all or a portion of the future property tax increment revenue (i.e., the difference in property taxes owed prior to and post establishment of the EIFD) generated within the boundaries of the district. The EIFD may finance projects through the issuance of bonds or under a “pay-go” model where money is spent as it is collected. The requirements for the City’s establishment of an EIFD are set forth in California Government Code Sections 53398.50, and following (referred to as the “EIFD Law”). The following chart illustrates how tax increment financing (TIF) captures that new revenue from new development into the EIFD (note these dollars are for illustrative purposes only):
Regular Meeting
12/18/23 07:00 PM
City Clerk / Records
Maribel Hernandez
Resolution
Doc ID: 5537
COUNCIL RESOLUTION
In 2022, SCAG awarded the City a grant to study the formation of an EIFD that would encompass specific project areas needing infrastructure and that would address the City’s 2021-2029 RHNA requirements.
A presentation was provided to the City Council on August 21, 2023, to provide City Council and interested parties an opportunity to discuss EIFDs, and for Council to provide direction to staff as may be deemed appropriate. The City Council provided direction to further explore EIFDs as another tool for the City. In addition, a briefing with the Barstow Chamber of Commerce was conducted on November 29, 2023 and a general public workshop was conducted on November 15, 2023. The EIFD was well received by the Chamber and members of the public. Questions were addressed, and comments included DISCUSSION:
As part of the next steps of the EIFD process, a Resolution of Intention (ROI) will need to be adopted for allow for the formation steps to occur, which will include additional opportunities for the public to comment. The adoption of the City Council’s ROI, which is provided as an attachment, will provide for the following:
1. Preliminary boundaries of the EIFD. The proposed EIFD boundaries are noted in color in Exhibit A of the Resolution of Intention. Though the exact boundaries of the EIFD are subject to further review and refinement as the formation process continues, the current boundary is focused on properties with potential for new development or rehabilitation. The land included in these boundaries totals approximately 13,207 acres (approximately 50% of citywide acreage) and approximately $566 million in existing assessed property value (which currently represents approximately 35% of citywide assessed value).
2. The public facilities and development proposed to be financed by the EIFD. The activities listed under the Resolution of Intention include all eligible activities under the EIFD legislation and are listed in Exhibit B to the Resolution of Intention (more specific projects will be delineated in the required Regular Meeting
12/18/23 07:00 PM
City Clerk / Records
Maribel Hernandez
Resolution
Doc ID: 5537
COUNCIL RESOLUTION
Infrastructure Financing Plan prior to the district formation).
3. Use of Incremental Tax Revenue. The ROI anticipates that portion of the City property tax increment revenue generated within the EIFD will be allocated to the EIFD. In general, the City receives approximately 38 cents of every property tax dollar (9 cents for the General Fund, 6 cents for Parks, and 23 cents for Fire), plus the equivalent of approximately 15 cents in property tax in lieu of motor vehicle license fees (MVLF). A portion of the incremental growth of these revenue streams would be directed into the EIFD, with the exact amounts to be determined in future resolutions adopted by the City Council.
4. In the future, should another taxing entity such as the County of San Bernardino participate in the EIFD, a portion of that taxing entity’s property tax increment revenue will also be contributed to the EIFD. The exact percentage of tax increment recommended to be contributed by the City is still being analyzed, and that final decision will be made by the City Council at hearings toward the end of the formation process.
5. Establishes a Public Financing Authority to serve as the governing board of the EIFD. The PFA membership is comprised initially of three members of the City Council and two public members.
Alternate Board members will also be appointed to represent the City Council in the absence of a regular member.
6. If another taxing entity wishes to participate in the EIFD after the initial formation (such as the County of San Bernardino), the PFA membership will be revised to include members from that new entity in accordance with the resolution.
7. Sets a time and place for the first public hearing on the EIFD to be conducted by the Public Financing Authority. The first public hearing is scheduled for March 18, 2024, at 5:00 p.m. in the City Hall Council Chambers.
Approval of the Resolution of Intention and subsequent appointment to the PFA will begin a series of activities that will take place over the next several months, primarily by the PFA Board. The following schedule outlines the various key tasks and milestones in the formation process. As the schedule indicates, the final City Council approvals follow later in spring or summer of 2024:
Task Target Date Notes
EIFD Intro Presentation to City Council August 2023 Complete Regular Meeting
12/18/23 07:00 PM
City Clerk / Records
Maribel Hernandez
Resolution
Doc ID: 5537
COUNCIL RESOLUTION
General Public Workshop November 15,
2023
Complete
Stakeholder Briefing with Chamber of
Commerce
November 29,
2023
Complete
City Council Considers Resolution of
Intention
Today / December
18, 2023
Under consideration today
Initial meeting of PFA January 2024 PFA will review the EIFD, adopt bylaws, direct the preparation of the
draft Infrastructure Financing Plan
(IFP)
PFA meets to review draft IFP February 2024
Presentation to Planning Commission
on EIFD and draft Infrastructure
Financing Plan (IFP)
February 2024 Statute requires that the Planning
Commission be informed about the IFP
and review the CEQA documentation
PFA holds Public Hearing #1 March 2024 Written and oral comments taken on IFP; no action taken
Consideration by the City Council to
adopt the resolution approving the IFP
and allocation of property tax increment
March / April 2024
PFA holds Public Hearing #2 April 2024 Written and oral comments taken on IFP; opportunity to revise IFP or
terminate EIFD
PFA holds Public Hearing #3 May 2024 Majority protest opportunity; other adopt resolution approving IFP and
forming EIFD
The Infrastructure Financing Plan (IFP) referenced in the timeline above becomes the roadmap for the work to be accomplished by the EIFD. The IFP will analyze the tax increment anticipated to be generated by the properties in the EIFD boundary, consider the cost of various infrastructure options to be considered for investment, evaluate the bonding capacity created by the tax increment generated, and provide a plan for how the EIFD will capture tax increment to fund infrastructure investments. The IFP contents are currently under development and will be provided in draft format to the public, PFA, City Council, and Planning Commission in accordance with the schedule above.
Public information and outreach are also an important part of the EIFD formation process. Work has Regular Meeting
12/18/23 07:00 PM
City Clerk / Records
Maribel Hernandez
Resolution
Doc ID: 5537
COUNCIL RESOLUTION
already begun on various public information materials and an information page on the City Website that will serve as a resource to interested stakeholders. Landowners and residents within the EIFD boundaries will also receive mailed notification of the process, and public hearings will be advertised as well. In the event of a majority protest by property owners or residents within the boundaries, the formation proceedings would be discontinued.
Key projects that have been discussed include the following:
Sewer utility expansion
Water utility enhancements, including upgrades to existing wastewater treatment facilities Roadway / curb improvements
Workforce housing - focus on eastern part of City
ENVIRONMENTAL REVIEW:
The City Council’s adoption of the Resolution of Intention and establishment of the Public Financing Authority are exempt from the California Environmental Quality Act (“CEQA”) as actions solely related to the creation of a government funding mechanism and the administrative or organizational activities of the City. Therefore, these actions do not constitute a “project” pursuant to CEQA Guidelines Sections 15378(b)(4) and 15378(b)(5). Neither of these actions could result in a physical change in the environment because the City has not committed itself to any specific project(s) that could be funded by the EIFD. Further, these actions are also exempt from the requirements of CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines as it can be seen with certainty that there is no possibility that they will have a significant effect on the environment. However, future actions (such as the approval of infrastructure improvements using funding from the EIFD) will be subject to environmental review in accordance with CEQA.
FISCAL IMPACT:
There is no immediate fiscal impact for establishing the Barstow EIFD or PFA. If ultimately established, the EIFD would create the opportunity to use tax increment financing to fund targeted infrastructure investments in the City. Further information regarding fiscal impact will be analyzed as part of the development of the Infrastructure Financing Plan (IFP), which will be presented to the PFA and City Council as noted in the timeline above
RECOMMENDED ACTION:
That the City Council:
1. Adopt Resolution XXX-2023, a Resolution declaring its intention to establish the Barstow Enhanced Infrastructure Financing District (EIFD) and establishing the Barstow EIFD Public Financing Authority (PFA); and
Regular Meeting
12/18/23 07:00 PM
City Clerk / Records
Maribel Hernandez
Resolution
Doc ID: 5537
COUNCIL RESOLUTION
2. Approve the organization of the Public Financing Authority Board, which would consist of three Council Members and two members of the public; and,
3. Find that the adoption of the Resolution of Intention and establishment of the Public Financing Authority are exempt from the California Environmental Quality Act (“CEQA”) as these actions do not constitute a “project” pursuant to CEQA Guidelines Sections 15378(b)(4) and 15378(b)(5), and that these actions are also exempt from the requirements of CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines.