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Public Financing, Bond Financing, Tax Exempt or Infrastructure Financing; Master Plan Community Developers Best Friend


Public Financing / Bond Financing or Infrastructure Financing Allows The Developer To Build Public Improvements And To Pass The Costs Onto The Ultimate User Of Those Facilities

What Improvements May Be Financed By Tax-Exempt Financing?

California assessment law and community facilities district law authorizes financing of the following:
Streets and Curbs
Water supply and distribution.
Gas, electric and telephone.
Sewers and drainage.

Other public improvements that afford a direct benefit to the public.

Police, Fire Protection and other services with a useful life of over five years.
Library and recreation program services including cost of maintenance and operation.
Flood and storm protection services including costs and expenses of operation
Local park, recreation, or parkway facilities.
Elementary and secondary school sites and structures, Libraries. Natural gas, telephone, or electrical facilities for new areas,

What Interest Rates And Terms May Be Available If Tax-Exempt Financing is Used?

Interest rates are generally 2% to 3% less than conventional borrowing rates.
Public improvement costs may be spread over a 10 to 30 year period.

Special Assessment District:

An assessment district is a financing tool available to most existing legislative bodies (cities, counties, special districts), that allows that agency to construct desired and authorized public improvements, with the costs and expenses being apportioned and spread against the benefited properties within the boundaries of a designated area (assessment district), with said costs and expenses being directly proportioned in accordance with the special and direct benefits that each parcel receives from the works of improvement.

The assessment liens, then, are financed through the issuance of bonds payable over a period of years, thus providing the advantage to the property owners of a loan or deferred funding for the improvements.

Community Facility Districts:

A governmental entity that may be formed by an existing local agency for the purpose of providing certain designated additional public services or facilities. The CFD has the power to finance a broad range of public capital facilities by levying special taxes secured by the area where said services or facilities are being provided. Bonds may be issued for assisting in the financing of the public capital facilities.

The special tax, prior to being levied, must be approved by favorable two-thirds vote of the qualified electorate in the CFD. The CFD may include areas that are non-contiguous. All of the above are considered either Public Financing, Bond Financing or Infrastructure Financing tools that the Master Plan Community Developer can use to offset their capital costs.


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