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Decisions… Decisions… Decisions… FINANCING GROWTH GFOAz Summer Training August 9-11, 2006

Decisions… Decisions… Decisions… FINANCING GROWTH GFOAz Summer Training August 9-11, 2006. Decisions in Financing Infrastructure. Financing Methods Project Prioritization Monitoring and Tracking Progress. FRAMING the Issues. Know your standards Know what is fair Know the benefits

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Decisions… Decisions… Decisions… FINANCING GROWTH GFOAz Summer Training August 9-11, 2006

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  1. Decisions… Decisions… Decisions… FINANCING GROWTHGFOAz Summer TrainingAugust 9-11, 2006

  2. Decisions in Financing Infrastructure • Financing Methods • Project Prioritization • Monitoring and Tracking Progress

  3. FRAMING the Issues • Know your standards • Know what is fair • Know the benefits • Know the risks • Know what can be funded • Know what should be financed

  4. Funding/Financing Considerations…

  5. Options…

  6. Developer RequirementsEXACTIONS • Limited to zoning requirements • Must be proportionate to the impact of the development • Requires a case by case analysis • Multiple land owners can make it tricky • Does not most regional infrastructure

  7. Options…

  8. Community Facilities Districts • Separate legal entities used to finance construction, acquisition, operation and maintenance of public infrastructure that benefits the real property comprising the CFD and its ultimate users through the issuance of tax-exempt bonds.

  9. CFDFinancing • GO Bonds • Revenue bonds • Special Assessments

  10. CFDFormation • Appraisal and Feasibility study • Petition for formation • General Plan for the CFD • Council Adoption of Intent to form the district • Objection period • Election process • Legal formation

  11. CFDConsiderations • Size of district • Benefited area is capsulated • Enhanced infrastructure • Timing of infrastructure • Housing Affordability • O&M costs

  12. Options…

  13. Improvement Districts • A public/private sector partnership in which property and business owners of a defined area elect to make a collective contribution to the maintenance, development and marketing/promotion of their commercial district.

  14. Improvement DistrictConsiderations • Legal requirements are great • Bonds can be issued immediately • Used for specific infrastructure • Administrative difficulties

  15. Options…

  16. Development FeesThe Basics • “Rational Nexus” – there must be a reasonable relationship between the development and the fees that are assessed. • “Rough Proportionality” – The fee charged must be related both in nature and extent to the burden of use generated by the development.

  17. Development FeesConsiderations • Burden on new development • Other revenue sources • Developer contributions • Revenues realized later • Multiple funding sources • Administrative requirements • Political environment

  18. Planning for Capital Needs

  19. Options…

  20. GO Bonds Considerations • Debt Service • Constitutional Capacity • Voter Authorization

  21. Property Tax/Bonds Considerations • Legal Limits • Financial Limits • Fairly dependable stream of revenue • Burden is on existing residents • Growth projects compete with existing project needs • Political Environment

  22. Sales Tax/Bonds Considerations • Financial Limits • Variable stream of revenue • Burden is on everyone who purchases in the City • Growth projects compete with existing project needs • Political Environment

  23. Options…

  24. Revenue Bonds Considerations • Relatively Dependable revenues • Rates affect use • Burden is on water users • Growth projects compete with existing project needs • Political Environment (raising rates)

  25. Prioritizing Projects CAPITAL IMPROVEMENT PROGRAM

  26. Project PrioritizationConsiderations • Future Capital Expenditures • O&M Costs • Quality Of Life • Community Benefit • Perception of Need • Infrastructure Needs • Feasibility of Implementation • Implications of deferring project • Outside Contributions/agreements

  27. Development AgreementsTracking infrastructure Obligations

  28. Active Agreements Development Agreements • Quintero • Saddleback Heights • Lake Pleasant Heights • Vistancia • Tierra del Rio • Pleasant Valley/Cibola Vista • West Wing • Sonoran Mountain Ranch • Camino A Lago South • Casa del Rey • Thunderbird Office Park • Reliance • Peoria Commerce Developers • DMB Circle Partnership Sales Tax Agreements • Acura • Lexus • Mercedes • Peoria Nissan • Wal-Mart • Parke West Lease Agreements • MS Holdings • Alter Group • Chili Davis • AZ Broadway Theater

  29. Tracking Projects • Planning and Coordination key • Define the obligations • Developer Contributions • Public Contributions • Timing • Milestones/Triggers • Accountability • Implications

  30. Tools for Tracking • Development Agreement repository • System for tracking obligations, dedications and payments • Reporting Mechanism • Maps

  31. Reporting Requirements • Comprehensive Annual Financial Report • Developer Contributed Assets • Development Impact Fee Annual Report • Amounts assessed and collected • Location and use of fees • Future legislative requirements • Enhanced tracking responsibilities

  32. Decisions… Decisions… Decisions… FINANCING GROWTHGFOAz Summer TrainingAugust 9-11, 2006

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