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Council receives EIFD briefing outlining how tax‑increment districts could fund long‑term infrastructure
Summary
City staff briefed the council on Enhanced Infrastructure Financing Districts (EIFDs): how tax‑increment capture works, eligible capital projects (roads, sewer, housing), feasibility steps and the requirement that participating taxing entities approve the financing plan; staff warned EIFDs take years to yield significant revenue and overlap with successor redevelopment obligations can delay benefits.
City staff presented an overview Aug. 20 of Enhanced Infrastructure Financing Districts (EIFDs) as a potential tool to finance capital projects by capturing future property‑tax growth within a defined boundary.
Director Millar explained tax‑increment mechanics: an EIFD sets a base year so that future property‑tax growth above that baseline is redirected to the EIFD for debt service on bonds or other capital financing. He emphasized EIFDs do not raise tax rates for property owners; they redirect growth in property tax revenue that otherwise would flow to the general fund and other taxing entities.
Millar reviewed eligible projects (roads, libraries, parks, sewer/water facilities, housing) and feasibility steps: assemble a team, complete a boundary/values feasibility study, conduct outreach with other taxing entities, form a public financing authority (PFA) and adopt a financing plan — a process that typically takes 12–18 months and requires participating taxing entities' approval. He cautioned that EIFDs are most effective where new development or substantial value growth is expected and that overlapping obligations tied to old redevelopment successor agency debt can reduce near‑term capture.
Councilmembers asked about local examples, likely partners and tradeoffs between general‑fund growth and EIFD allocations. Millar said several California jurisdictions have used similar vehicles and stressed the importance of matching project lists to the district boundary.
No formal action was taken; the briefing was informational. Staff suggested next steps would be a feasibility study only if council wishes to pursue the vehicle.
