Financing Development Impact Road Fees through Property Assessments
At the City of Elk Grove, we're always searching for innovative ways to make our City attractive to new economic development projects. By partnering with the California Statewide Communities Redevelopment Authority (CSCDA) using the Statewide Community Infrastructure Program (SCIP), Elk Grove can offer new, cost-effective options for funding roadway development impact fees on non-residential projects.
What is SCIP?
SCIP allows the City of Elk Grove’s development impact fees on residential and non-residential projects to be financed. SCIP pays the City of Elk Grove the development impact fees via tax-exempt bonds, the developer/property owner applying for SCIP agrees to pay assessments to the SCIP over a period that may not exceed 30 years (secured by a lien against the property). Property owners of participating projects may be reimbursed for development impact fees paid at the time of building permit issuance, or can receive pre-funding of the development impact fees just prior to obtaining a building permit. The two SCIP programs are called the “Reimbursement Program” and the “Pre Funding Program”. They can be mixed and matched, or done individually. Property owners of participating projects may be reimbursed for public capital improvements upon determination by the City Engineer to pay the Acquisition price of the improvements as provided in Resolution No. 2012-96 passed and adopted by the City Council of the City of Elk Grove on Aug 23, 2012. This option allows developers to directly finance projects through SCIP and leverage SCIP's scale without the city or developer taking risk and forming a stand alone district.
Benefits to Property Owners
Using SCIP can assist in project cash flow by providing low-cost tax-exempt financing of development impact fees and direct infastructure financing. This also allows smaller projects to have access to tax exempt financing. Property owners also have the option to pay off the assessments at any time within the 30 year maximum period.
What City fees may be financed through SCIP?
All City of Elk Grove are eligible to be financed by SCIP. Other development impact fees here in the City are not eligible to be financed through the SCIP program.
What type of projects are eligible for SCIP?
SCIP can be used for residential and non-residential projects such as housing developments, retail, commercial, office, and industrial projects.
What is an assessment lien through SCIP?
The assessment lien is imposed on the parcel of land pursuant to the Municipal Improvement Act of 1913. The Act authorizes an issuer to impose an assessment lien on benefiting property to finance various public improvements. It is essentially a legal claim against the property used to secure funding through the SCIP program and must be paid when the property is sold (similar to a mortgage lien).
What is an assessment bond through SCIP?
The bonds are Limited Obligation Improvement Bonds authorized under the Improvement Bond Act of 1915 and secured by the liens imposed under the 1913 Act.
How is SCIP administered?
SCIP is administered by highly trained and experienced consultants selected by CSCDA who prepare the tax roll, disseminate continuing disclosure reports, and handle delinquencies. SCIP applications are available at http://www.cacommunities.org/.
How do I obtain more information on SCIP?
For questions relating to SCIP, contact Andrew Keys in the City Finance Department at (916) 478-2273 or email to firstname.lastname@example.org.