Prepared by:
Kosmont Companies
Enhanced Infrastructure Financing District
(EIFD)
Analysis Summary for
Resolution of Intention (ROI)
December 18, 2023
Introduction and Background
2 • SCAG is providing technical advisory services to the City of Barstow to evaluate financing districts to accelerate private sector investment, capture the value created, and use to deliver community benefits/amenities and support affordable housing • Among the tools analyzed, Tax Increment Financing (TIF) was evaluated to be a feasible approach, with particular viability for implementation of an Enhanced Infrastructure Financing District (EIFD) due to its flexibility
• The first action to initiate formation of an EIFD is City Council adoption of a Resolution of Intention (ROI)
• Potential next steps include meeting with potential partner agencies, such as the County of San Bernardino, preparation of an Infrastructure Financing Plan (IFP), and required public notices and meetings / hearings
What is Critical City Infrastructure?
3 General Plan
Barstow 2045 Individual
Projects
(Private)
City
Infrastructure
(Public)
Parks &
Open Space
Childcare &
community
facilities
Streets, public
transit,
beautification
Public safety
facilities
Senior &
affordable
housing
Health
facilities &
shelters
4 $0M
$50M
$100M
$150M
$200M
$250M
$300M
$350M
$400M
$450M
$500M
0 5 10 15 20 25 30 35 40 45 50 55
Baseline Property Value
Property taxes continue to flow to City / County / Schools / Other Taxing Entities as normal New Property Value from
New Development / Rehabilitation
Available to TIF District
Years from District Formation
Assessed
Property Value
(A/V) within
TIF District
Boundaries
New Total
Value After
TIF District
Benefits all
Taxing Entities
Period of New
Development
Note: Illustrative. Conservative 2% growth of existing assessed value (A/V) shown; does not include mark-to-market increases associated with property sales.
Tax Increment Financing (TIF) Illustration
Not a New Tax
Enhanced Infrastructure Financing District (EIFD)
Fundamentals
Communicating in a Digital World
5 45 years from first bond issuance; can be formed in 12-18 months Long Term Districts
Governance Public Financing Authority (PFA) implements Infrastructure Financing Plan (IFP) Approvals Mandatory public hearings for formation with protest opportunity; no public vote EIFD project areas do not have to be contiguous Non-contiguous Areas
Any property with useful life of 15+ years & of communitywide significance; purchase, construction, expansion, improvement, seismic retrofit, rehabilitation, and maintenance
Eligible Projects
Does NOT increase property taxes
Districts in
Progress Statewide
(Partial List)
6 Fully Formed In Formation Process Under Evaluation
Why are Public Agencies Authorizing EIFDs?
Communicating in a Digital World
7 1. Return on Investment: Private sector investment induced by district commitment accelerates growth of net fiscal revenues, job creation, housing production, essential infrastructure improvements
2. Ability to attract additional funds (“OPM”) – tax increment from other entities (county, special districts), federal and state grants (e.g., for transit-oriented development, water, housing, parks, remediation)
Case Studies
8 La Verne Transit Oriented EIFD
City-County contributing property tax revenue to fund infrastructure around future Gold Line station – mixed-use housing, station area infrastructure, and sustainable projects
Status: formed by City in October 2017; L.A. County joined January 14, 2020; fully formed and receiving tax increment
Rancho Cucamonga EIFD
City-Fire Protection District partnership for improvements in Foothill/Haven area to support General Plan vision of mixed use development surrounding future Cucamonga Station multi-modal transportation hub; ongoing evaluation of S.B. County partnership Status: formed by City in July 2022; fully formed and receiving tax increment
Other S.B. Cities evaluating EIFD: Yucaipa, Apple Valley, Redlands, Ontario, San Bernardino
Barstow Financing District Study Area
9 Source: City of Barstow, San Bernardino County Auditor-Controller (2022) • Study area identified based on highest potential
growth and development – vacant and/or
underutilized sites
• Approx. 13,207 acres (~50% of Citywide acreage)
• Approx. $566M in existing assessed value (~35% of
Citywide A/V)
Area #2 (TIF)
Area #1 (TIF)
Area #3
(CFD+TIF)
Area #4 (CFD+TIF)
Area #1 (TIF)
Area #2 (TIF)
LEGEND
Barstow City Limits
Area #3 (CFD+TIF)
Area #4 (CFD+TIF)
10 • Ongoing discussions with City staff
• EIFD intro presentation to City Council (Aug 21, 2023) • Public Workshop in Council Chambers (Nov 15, 2023)
• Chamber of Commerce Briefing (Nov 29, 2023)
• Additional public meetings and hearings required as part of formation Stakeholder Engagement
11 1. Sewer utility expansion
2. Water utility enhancements, including upgrades to existing wastewater treatment facilities
3. Roadway / curb improvements
4. Workforce housing – focus on eastern part of City
PotentialProjects for EIFD Funding
12 Estimated EIFD Funding Capacity
Taxing Entity
Partnership Scenario
Estimated Funding Capacity
50-Year Present Value
a) City only $86M to $172M
b) City + Fire $150M to $301M
c) City + Fire + County $182M to $365M
City of Barstow “Return on Investment”
13 • Economic benefits:
9,942 permanent, direct jobs from operation; additional 3,523 indirect and induced permanent jobs, supporting $682M in ongoing annual wages in the City and County
31,856 temporary construction-related jobs*, supporting $2.2B in construction-period wages in the City and County
• Acceleration of development and related fiscal revenues:
Positive City general fund net fiscal impact of $70M on a present-value basis over district lifetime (net of City service costs and net of City contribution to EIFD)**
• Catalyze economic development and attract other money (e.g., grants) * Construction job-years, where a construction job-year is defined as one-year of employment for one construction-related worker ** Present value at 3% discount rate
14 Potential EIFD Formation Schedule
Tax increment allocation begins fiscal year following district formation Debt issuance, if desired, would occur after a stabilized level of tax increment has been established (~3-5 years) Target Date Task
TODAY /
Dec 18, 2023 a) City Council considers Resolution of Intention (ROI) to form EIFD and formally establish PFA Board Jan-Mar 2024 b) Approach County for potential partnership in the EIFD (County would appoint members to the PFA Board) Mar 2024 c) Introductory PFA meeting to direct the drafting of the Infrastructure Financing Plan (IFP) Apr 2024 d) Distribute draft IFP to property owners, affected taxing entities, City Council, Planning Commission Apr 2024 e) PFA holds an initial public meeting to present the draft IFP to the public and property owners May 2024 f) PFA holds first “official” public hearing to hear written and oral comments but take no action (noticing must occur at least 30 days after “e”)
May/Jun 2024 g) City Council considers resolution approving IFP (County Board of Supervisor would also consider, if partnering) Jun 2024 h) PFA holds second public hearing to hear additional comments and take action to modify or reject IFP (at least 30 days after “f”)
Jul 2024 i) PFA holds third public hearing to consider oral and written protests and take action to terminate proceedings or adopt IFP and form the EIFD by resolution (at least 30 days after “h”) 15 Next Steps / Actions for Consideration
• Address questions and feedback from City Council
• City Council consideration of adoption of (non-binding) Resolution of Intention (ROI) • Following the ROI, appoint City’s Public Financing Authority (PFA) members* • Approach the County for potential partnership in the EIFD* • Preparation of draft Infrastructure Financing Plan (IFP)* * Future phase, not in current SCAG grant scope of work 16 THANK YOU
Questions?
Kosmont Companies
1601 N. Sepulveda Blvd. #382 Manhattan Beach, CA 90266
Ph: (424) 297-1070 | Fax: (424) 286-4632
www.kosmont.com
17 Appendix
18 EIFD versus Former Redevelopment Agencies
Sample of Differences
Former RDAs EIFDs
Eligible Use of Funds • Infrastructure and affordable
housing
• Market-rate housing
• Land clearing and parcel assembly
• Tax and other private business /
developer subsidies
• Public infrastructure (e.g., roads,
sewers, open space, utilities)
• Affordable housing
Eminent Domain /
Condemnation
• Allowed • Not allowed
Eligible Areas • Must qualify as “blighted” • No “blight” finding required Governance • City Council or County Board • Public Financing Authority including Public Members
Formation • Vote of governing body • 3 public hearings, majority protest opportunity
19 Potential Partner Agencies
Property Tax Distribution
• Primary non-school recipients and potential
contributors of property tax are City of Barstow,
Barstow Fire, and County of San Bernardino
• City general fund share varies by tax rate area and
averages ~9.1% of every $1 collected in property taxes
within the EIFD Study Area
– City Parks additionally receives ~5.9%
– Barstow Fire additionally receives ~22.6%
– City additionally receives equivalent of ~15.1% of
property tax in lieu of MVLF, also available to EIFD
• County share varies by area and averages ~11.3%
• School-related entities cannot participate
Tax Rate Area (TRA) weighted average distributions for EIFD Study Area shown. Post-ERAF (Education Revenue Augmentation Fund) distribution.
Source: San Bernardino County Auditor Controller (2023) City
9% City Park
6%
Barstow Fire
23%
County
11%
Other / School
Entities (not eligible)
51%
Weighted Average Property Tax Distribution
within EIFD Study Area