The Design Advocate: SB 214 (Wolk)

August 21, 2012

Assemblymember Cameron Smyth

Chair, California Assembly Local Government Committee

State Capitol Building, Room 4098
Sacramento, CA 95814

Re: SB 214 - SUPPORT

Dear Assemblymember Smyth:

We, the undersigned, a network of steward leaders representing all sectors (e.g., nonprofit, private, public, education, etc.) from California’s diverse economic regions who are dedicated to promoting a shared action agenda to catalyze California’s economic recovery through regional strategies, submit this letter in support of Senate Bill (SB) 214 (Wolk), as amended—a measure that would make it easier to establish Infrastructure Financing Districts throughout the State of California, enabling the development of critical infrastructure and offering communities a much-needed tool, especially with the demise of Redevelopment Agencies (RDA), to create jobs, reduce blight, and invigorate neighborhoods.

As you know, Infrastructure Financing Districts (IFDs) provide an opportunity for local governments to fund public infrastructure (such as highways, transit facilities, and libraries) by using bond proceeds that are repaid through property tax increment. While IFDs have been authorized in statute since 1990, overly complex and onerous barriers (such as the requirement of two-thirds voter approval for both the creation of the IFD and bonds associated with it) have prevented its utilization. Though several efforts have been made to apply IFDs to specific local areas—such as San Francisco with AB 1199 (Ammiano) in 2010 and San Diego with SB 207 (Peace) in 1999—only one, single project has been delivered using this broader statutory authority in over 20 years: the City of Carlsbad, which formed an IFD in 1999 to fund the public works associated with a hotel adjacent to Legoland.

SB 214 (as amended) removes some of the most onerous barriers associated with the creation of and issuance of bonds tied to IFDs, including:

§ Removing the two-thirds vote requirement associated with forming an IFD;

§ Removing the two-thirds vote requirement for issuing IFD-associated bonds;

§ Extending the life of an IFD from 30 years to 40 years, which increases an IFD’s bonding capacity; and

§ Removing the prohibition against an IFD including any portion of a redevelopment project area.

With the elimination of RDA, local governments are in critical need of additional tools—like IFDs—to help finance and deliver much-needed infrastructure throughout the State of California. As such, we want to thank you for your continued leadership on this bill, and we want to offer our formal support for SB 214, as amended—a bill we see as critical to strengthening our economy and providing local governments with needed tools to support California communities after redevelopment’s demise.

Sincerely,