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HomeMy WebLinkAbout17 Brandis Tallman SCIP vs Traditional CFD Presentation WORKSHOP ITEM #17Infrastructure Program (SCIP)Statewide Community Infrastructure Program (SCIP)Statewide Community June 6, 2018 Statewide Community Infrastructure Program The bonds are not general or special obligations of the District•collectionassessment and special tax includes CFD Administration •Financing was secured by issuance of Special Tax Bonds•Gray’s Crossing 2004•Old Greenwood 2003•Facilities Districts (CFD) to fund infrastructureThe District was petitioned to form & administer Community •BACKGROUND / HISTORY Statewide Community Infrastructure Program Statewide Community Infrastructure Program SCIPdevelopers contacted the District about Two •The Railyard•Joerger Ranch•Truckee Springs•Canyon Springs•Coburn Crossing•Capital Avenue Development Grocery Store•Raley's•The Village at Gray’s Crossing•High Altitude Fitness•Major Development Projects in Truckee (9)•Recent activity shows renewed interest•Development starts were slow in Truckee since the recession•NEW INFORMATION Statewide Community Infrastructure Program Statewide Community Infrastructure Program Two developers recently contacted the District about SCIP•Council requested the topic be revisited July 10•projectsonly -Excluded residential•commercial or mixed useRestricted financing to •2018A Local Goals & Policies document was presented to Council May 22, •) Statewide Community Development Authority (CSCDACalifornia SCIP is a form of infrastructure financing offered by the •Infrastructure Program (SCIP) in Februarythe Statewide Community The Town held a Workshop on •NEW INFORMATION Statewide Community Infrastructure Program NEW INFORMATION Offers CFD, or SCIP structure•Facilitates & administers bond issuances•California Cities, Counties & Local Agencies are member eligible•The CSCDA is a Joint Powers Authority•James Hamill, Managing Director, CSCDA•Statewide Community Infrastructure ProgramStatewide Community Infrastructure Program NEW INFORMATION Secured Financing-Reviewing traditional vs. Conduit Issuer Land•Placement Agent for the Old Greenwood CFD Refunding Bonds•Principals of Brandis Tallman LLCRick Brandis & Nicki Tallman•Statewide Community Infrastructure ProgramStatewide Community Infrastructure Program Statewide Community Infrastructure Program A Program of the California Statewide Communities Development Authority What is the Statewide Community Infrastructure Program?servicesandimprovementspublicoffinancingforallowwhichDistrictsFacilitiesCommunityRoos-Melloalone-standestablishtoCSCDAallowsalsoProgramThe2003i ninceptionitssincebondsinMM450$nearlyissuedhasSCIP.Fall)andSpringthe(inyearaissuestwotypicallyareThereassessmentsownerpropertybysecuredbondsexempt-taxrate-fixedyear30areThesemembersitstobenefitpubl icofprogramsbondpromotetoCountiesofAssociationStateCaliforniatheandCitiesCaliforniaofLeaguethebysponsoredAuthorityPowersJointaiswhich(CSCDA)AuthorityDevelopmentCommunitiesStatewideCaliforniathebyissu edarebondsThetimestaffagencylocalminimizingsolution,keyturnaasdevelopersalltofinancingcompetitiveofferingofmeanstheagencylocaltheprovidetoSCIPinparticipatecanDistrictSpecial/County/CityAnydevelopme ntsprivateforimprovementspublicandfeesimpactfinancecanwhichprogramfinancingexempttaxpooledaisSCIP Program Mechanics Fees)MaintenanceandOperationsincludeMay:(Note.eligiblearefacilitieswhichspecifying(JCFA)agreementfacilitiesjointaadoptandCFDtheofformationrequestwillAgencyLocalThe.basisalonestandao nCSCDAandSCIPthroughfundedandcreatedbecanCFDsDistricts (CFDs)Community Facilities CFD IssuanceAlone -Stand can be combinedFunding Programs and Acquisition Funding -Reimbursement, PreCombined Funding ProgramfundedbeingimprovementsthetoapplieswagePrevailing.agencylocaltheanddeveloperthebetweenagreementacquisitionantopursuantcompletewhenbasisacquisitionanonfinancebecanimprovementsPublicdue otherwisewhencreditfeeareceivewilldeveloperthewhichforandpermitbuildingatduebenormallywouldwhichfeesimpactpays-Prepaid)arefeesthebeforedays60thanmorenosubmittedbemustApplication:(Note.bondsSCIPtheofI ssuancethetopriorbutPermitBuildingatpaidFeesImpactforownerspropertyReimburses Pooled Assessment District Issuance ImprovementsFunding of Public ProgramFunding -Impact Fee PreProgramImpact Fee Reimbursement DescriptionProgram Type What Can be Financed through the Program?Gas SupplyWater SupplyFlood ControlStorm DrainageSidewalksPedestrian MallsFreeway InterchangesStreet and RoadwaysOpen Space and GreenbeltsBicycle and Pedestrian TrailsBridges and ThoroughfaresParks and ParkwaysSewer and PipelinesLandscapingParkingStreet lightingEligible ImprovementsEligible Feesincluding but not limited to, are listed below:Improvements identified in the 1913 / 1915 Assessment Act, Does not include school, housing, fire, and police fees Local Agency Requirements fundsofrequisitionApprovelawtaxfederalwithaccordanceinspentbewillFundsResolutionSCIPthewithincludediswhichofformtheimprovements,publicfordeveloperreimbursetoagreementacqui sitionanexecuteWillSCIPbypreparedReportEngineer'stheincontainedimprovementsandfeeseligibleverifyandreviewWillHearingPublicthetopriorAgencyLocalthebysignedbemusttheybutonlineapplicationsfundingsubmi tcanDevelopersCounselLegalSCIPbyproposalandManualSCIPtheincontainedareAgreementsandResolutionsSamplea)join)tocostno(againProgramSCIPtheofusetoconsentingResolutionSCIPAdoptmembers)532hascurrentlyCSC DAandjointocost(noCSCDAofMemberabeMust SCIP DevelopersAgenciesand Local Developers Risk)(Investor Payments Bond sImprovementof Completion Fees or Payment of EntitlementsAdministerinIssue BondsproceedingsConduct the ApplicationsApprove Resolution & Pass SCIP Local AgenciesDevelopers ForeclosureDisclosureContinuing RebateLot SplitsTax RollResponsibility ScheduleTasks and Traditional vs. Conduit Issuer Rick Brandis, PresidentNicki Tallman, CEO Secured Financing -Land About Brandis Tallman LLC 14 2004 and 2005 Gray’s Crossing CFD Bonds.Over time have been working with TDPUD to restructure and refund •Directly placed TDPUD’s 2014 Old Greenwood CFD Refunding Bonds •Principals have been working with TDPUD for over six years•over 25 yearssecured debt for -Principals have structured and underwritten land•California Public Financeservice investment banking firm founded in 2002 dedicated to -ullF• Overview of CF 15ratingissued without a owner, typically of property : Not a debt Note(Assessment Dist.)BondsSpecial Assessment Limited Obligation LevyAssessment LienSpecial Tax Property Tax RollCollected on County (mortgage/commercial loan) on the property.to any private debt seniorproperty taxes. Therefore, both are Special taxes & assessments share the legal lien status of Facilities Dist.)(Community Special Tax BondsRoos-Mello Secured by Real Property (Land & Improvements)Land Secured Bonds to Finance Capital Improvements DsAs vs. D The Community Facilities District (CFD) 16 thirds (⅔) affirma?ve vote is required. -A two•acre owned. landowner. Each landowner gets one vote for each acre or portion of If less than 12 registered voters reside in the CFD, the vote is by •votersIf at least 12 registered voters reside in the CFD, vote is by registered •The Vote for approval. Who votes?levy of the Special Tax are submitted to property owners in the CFD Following a public hearing, both the formation of the CFD and the •and the Special TaxDistrict Formation property (a “Special Tax”).contiguous property and levy a special tax on such -contiguous or nonagency can form a community facilities district (a “CFD”) over Roos Community Facilities Act of 1982, a public -Pursuant to the Mello•The Act The Special Tax 17 The only statutory standard for the Special Tax is that it be reasonable.•the development process.It is very common for property to be taxed differently as it moves through •Acreage, simple flat parcel tax, area/vicinity, or land use designation•For example, by:The Special Tax can be crafted in any manner that makes economic sense. •the CFD.The Special Tax does not need to be linked to a special benefit received by • The Assessment District 18assessment.the assessment. Ballots are weighted according to the amount of the proposed Assessments may only be imposed if a majority of the ballots returned support •Proposition 218.Assessments must comply with notice, hearing & voting requirements of •The Vote establishing ADs and issuing bonds.In addition, the Improvement Bond Act of 1911 allows for both •bonds.The Improvement Bond Act of 1915 provides for the issuance of •Issue BondsThe 1915 Act: Districts (“ADs”).The Municipal Improvement Act of 1913 establishes Assessment •Establish DistrictThe 1913 Act: The Levy of Special Assessments 19 portion of the assessment (or an alternative source of funding is identified).Any land which receives a special benefit from the project needs to be allocated a •proportion to the special benefit conferred.Special benefit must be specifically identified and allocated to benefitted parcels in •sources of legally available funds (i.e. Cash or CFD financing).Cost of improvements that impart general benefit must be financed from other •enhancement of property value does not constitute ‘special benefit’.”benefit covered on real property located in the AD or to the public at large. General Special benefit means “a particular and distinct benefit over and above general •benefit and general benefit.Proposition 218 Article XIIID expressly recognizes the distinction between special •received.Assessments can only be calculated based on the allocation of special benefit •(Important due to recent court cases) Traditional CFD/AD 20 bonds (can access market at best time)Flexible timing for district formation and issuance of •Local Agencyand RMA to benefit developers, property owners, and Ability and time to structure district formation, tax levy, •timeIssuer participation throughout process, requires staff •Market rates/negotiable costs of issuance•Issuer has the option to hire a Municipal Advisor•Local Agency selects financing team•Local Agency issues bonds on behalf of CFD/AD•Single CFD/AD financing•Driven by Local Agency• Alternative to Traditional CFD/AD:21 FeeAgency as Issuer often receives an Admin Traditional CFD/AD underwriter fee = approx. 1.50% of par; Local •goes to charity)1.00% of par (.25% of issuer fee goes back to local agency and .25% 2.00% of par; CMFA charges an issuer fee of -underwriter fee = 1.50% Development) (Bond Opportunities for Land CMFA BOLD : Example•an issuer fee of 1.50% of par; Example: CSCDA SCIP underwriter fee = 2.50% of par; CSCDA charges •Costs are higher with a Conduit Issuer•Local Agency does not have Municipal Advisor during process •Financing team is predetermined•Local agency is subject to weaker credits in pool.•Bonds are often issued with higher interest rates.•Credit of financing is determined by weakest link in pool.•Pooled AD/CFD Financings•Developer Driven•Conduit Pooled Financing Alternative to Traditional 22 Local Agency must comply with Pool timing•Timing is predetermined•No (very little) staff time is required from Local Agency•tool for Gray’s Crossing) delinquent parcels (a very helpful for future reserve Ability to collect •Maintenance/Service tax levy•tax levy -go and max-Period of pay•Lose control of negotiation •Standard set of documents are issued•Conduit Pooled Financing Continued CFD/AD: Land 23 improvementsLevy of continued service/maintenance tax after levy for capital •determining changes in tax levygo period over which max tax is levied and conditions for -Pay•Ability to negotiate •SaleTiming of Bond •Financing Team•Costs•Transaction Control•Separate commercial development standards•Percentage of homes sold•Percentage of development•Lien-to-Value•Establishes credit standards for financing before bonds are sold•Local Debt Policy takes priority•Secured Financing Considerations- Conclusion Advantages/disadvantages of Conduit Issuer will vary depending on Local Agency’s goals 24 property ownershigher debt service for rates bonds issued with higher interest –Credit is based on weakest link •Higher costs•needsnot meet specific Local Agency ack of control of tax structure may L•Disadvantages of Conduit Issuersecured debt without any input -Local Agencies can issue landInfrequent or inexperienced •pooled financingWeaker credits benefit from •for valuable staff timeOffers financing without need •-landProvides a vehicle for small •Advantages of Conduit Issuer NEW INFORMATION futureThe Board may be asked to consider this type of financing in the •Statewide Community Infrastructure ProgramStatewide Community Infrastructure Program FISCAL IMPACT There is no fiscal impact associated with this Workshop Item •Statewide Community Infrastructure ProgramStatewide Community Infrastructure Program RECOMMENDATION Provide input and direction to staff•Statewide Community Infrastructure ProgramStatewide Community Infrastructure Program