Enhanced Infrastructure Districts Help Cities Secure Financing
In 2014 the California Senate adopted Senate Bill 628, which set up Enhanced Infrastructure Financing Districts (EIFD) to provide a new financing option for public agencies in the wake of the dissolution of the Redevelopment Districts that California cities used to obtain tax increment financing for capital improvement projects.
When SB 628 was first adopted, many cities started reviewing the legislation to see how EIFDs could help secure financing for needed infrastructure projects.
What has become clear is that the structure of an EIFD requires significant planning and collaboration with other agencies that are affected by the establishment of the district. Prior to formation of the district, there must be an Infrastructure Financing Plan (IFP). This requires that the city is made aware of the projects to be included and works with other public agencies in developing tax-sharing agreements. Once the IFP has been approved, then the EIFD can be formed.
The City of West Sacramento is currently working with the City of Sacramento to construct the Broadway Bridge, which would connect West Sacramento to Sacramento. An EIFD will be formed to provide the authority to issue bonds secured by tax increment revenues to pay for the construction of the bridge. The new bridge will accommodate motor vehicles, transit, bikes, and pedestrians. An ordinance adopting the EIFD Plan and creating the EIFD is expected to be approved by April 2017.
EIFD financing creates opportunities for cities in California to utilize tax increment financing for local and regional projects. Formation of an EIFD compels cities, counties, special districts, and private developers to collaborate. In a city’s arsenal of revenue generation, the EIFD can be a catalyst for economic development, with a focus on infrastructure and long-term projects. It is another powerful tool for public agencies to use in providing our communities with the infrastructure they need.