Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Finance Cfds topic
No spam. Unsubscribe anytime.
Lincoln staff and bond counsel outline proposed overhaul of CFD policy
Summary
City bond counsel briefed the council on a draft update to the city’s community facilities district (CFD) policy that would expand when developers may finance impact fees, limit third-party conduit issuers for large developments, and authorize taxing premiums or credit enhancements in some market conditions.
City bond counsel and staff presented a draft update to Lincoln’s Community Facilities District policy and sought preliminary council feedback on several policy choices that would affect how new development is financed.
Brian Forbath, the city’s bond counsel, told the council the city’s existing CFD policy dates to about 50 years ago and that state law and market practices have changed. “There’s been a growing trend in community facilities districts that developers want to finance … development impact fees,” Forbath said, describing the legal and federal-tax constraints that require prompt use of bond proceeds when impact fees are financed.
The draft policy would allow the city to permit financing of certain development impact fees but also to charge a developer a premium — Forbath said some jurisdictions charge about a 20% premium — and use the premium for additional public improvements. The policy would not mandate a premium but would give staff and council discretion to require one where appropriate.
Forbath also flagged an increased use of third-party “conduit” CFD issuers (programs referenced in the meeting as CMFA/CSCDA- or conduit-style issuers) that let a non‑city agency issue bonds. The draft would generally prohibit third-party CFD issuers for developments of more than 100 units, though the council could waive that limit for specific projects. Forbath said the tradeoff is that conduit issuers can be faster and are attractive to developers but remove some direct city control over issuance and timing.
The draft also updates administrative fees, clarifies compliance with recent Mello‑Roos developments in state law, and explicitly allows consideration of credit enhancements or other security where bonds are issued against largely undeveloped land in a weak market.
Sean Scully, a city staff member who introduced the item, said the goal of the project is to modernize the policy, provide clarity to developers and staff, and, if brought in-house, to retain more administrative revenue that could fund city oversight. He and Forbath said Roseville and other larger jurisdictions manage their CFDs internally and that internal administration can yield ongoing annual administrative fees that pay for staff oversight.
Developers and the Building Industry Association (represented on the Zoom line by Jeff Short) urged the council to preserve flexibility. Short told the council that the BIA supports keeping both options available — city-administered CFDs and third-party conduit programs — because every project has different financing needs and timelines.
Forbath and staff said there is no action tonight; staff will solicit feedback from builders’ trade groups and return with a final policy for council consideration.
Why it matters: CFDs and Mello‑Roos financing affect how infrastructure is paid for in new neighborhoods, how quickly developers recover costs, and what costs are ultimately carried by homeowners or property owners in a district.
