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Tulare holds study session on fiscal-impact analyses and community facilities districts
Summary
City staff and consultant NBS explained how fiscal-impact studies and Mello-Roos (CFD) special taxes can fund long-term maintenance and some capital costs of new development; staff proposed hiring NBS for two studies and expects results early next year to guide whether subdivisions annex to individual CFDs or a citywide CFD.
The Tulare City Council opened a 6 p.m. special study session to hear a presentation on fiscal impact analysis and community facilities districts (CFDs), tools staff say could help the city fund long-term maintenance and certain capital costs tied to new development.
Mark Mondell, the city manager, introduced Sarah Mares, chief operating officer at NBS, who explained CFDs as a response to Proposition 13 and described them as a tool—commonly called Mello-Roos districts—that allows cities to levy a special tax to fund additional services and infrastructure for new development. "The community facilities district act was a response... it's also known as the Mello-Roos Community Facilities Act of 1982," Mares said.
Mares outlined fiscal-impact analysis methodology: estimate revenues a project will generate (incremental property taxes, sales taxes, transient-occupancy taxes) and compare those to the per-person cost of providing services to determine the net fiscal impact. She said residential development commonly shows a negative fiscal impact, while some commercial or industrial projects can be positive. She described two analytical approaches: project-specific studies tied to a single subdivision and a citywide buildout analysis.
The presentation reviewed the CFD formation process—adopt local policy, resolution of intention, a public hearing (30'60 days later), an election (landowner or registered voters), two-thirds approval, and ongoing administrative tasks including annual special-tax levy calculations and county collection procedures.
In council discussion, Mondell recommended hiring NBS to prepare a project-specific fiscal-impact analysis and a citywide study; he said both studies could be completed "first quarter of next year" if the council approved the scope and procurement. Council members asked how CFDs would interact with development-impact fees and with the city's existing lighting and landscape districts; Mares said CFDs are not benefit-based like LMDs and are designed to cover additional services or financing needs identified by the fiscal study.
Mondell said the studies will inform whether the city should use a subdivision-by-subdivision CFD approach or a single overarching CFD to which future development would annex. He also noted the city is preparing to update development impact fees and that the CFD work would inform that process.
The city manager said staff will return with the proposals and a schedule if council supports moving forward with the consultant work.
The next procedural step is for staff to bring consultant proposals and a recommended scope to council for approval; no CFD was formed or decided at the meeting.
