SANTA CRUZ >> The city of Santa Cruz is seeking two community members to serve on an oversight panel for its nascent enhanced infrastructure financing district. Once established, the financing district would allow the city to collect a portion of property tax revenue to fund public projects.

“This is about creating long-term solutions to support the infrastructure that our community relies on every day,” said Deputy City Manager Bonnie Lipscomb in a statement. “EIFDS (Enhanced infrastructure financing districts) allow us to reinvest local resources into local projects without new taxes on our residents.”

At the Santa Cruz City Council meeting in late March, where Lipscomb gave a presentation about the proposed financing mechanism, the council unanimously voted to declare the intention to establish the Santa Cruz Enhanced Infrastructure Financing District and the Santa Cruz EIFD Public Financing Authority, which oversees the district. The public financing authority board will consist of two community members and three Santa Cruz City Council members.

Passed in 2014, SB 628 gave jurisdictions in the state the authority to set up enhanced infrastructure financing districts, which can be formed by any entity with property taxing authority, including cities and counties. The funding mechanism is a way for a city to use property tax revenue above a certain threshold and within designated areas to issue bonds to fund infrastructure projects or other public purposes, such as the construction of housing or a new arena.

According to the agenda report from the March meeting, in May 2023 the city’s Economic Development and Housing Department issued a request for proposals to conduct a financial feasibility study to determine, “how the city may finance related public infrastructure, affordable housing and other community goals in the Downtown Plan Expansion area, adjacent riverwalk and the broader downtown area.”

The city’s proposed Downtown Plan Expansion project, which is centered around the construction of a new arena for the Santa Cruz Warriors in the area south of Laurel Street, was recently cleared by the city’s Planning Commission and is tentatively set to be considered by the Santa Cruz City Council in May.

In September 2023, the city contracted the El Segundo-based firm Kosmont Cos. to conduct the study and ultimately help guide the city through the process of establishing the financing district. At the March council meeting, Kosmont Cos. Senior Vice President Joe Dieguez gave a presentation showing how an enhanced infrastructure financing district works, what it would look like in the city of Santa Cruz and stressed multiple times that it does not create a new tax or taxes.

He explained that an enhanced infrastructure financing district defines a specific boundary in the city, and within that boundary, the assessed property value is frozen at a certain threshold. As property values grow over time, the city would be able to use a share of the tax revenue above that threshold for city projects.

The boundaries of the city’s enhanced infrastructure financing district are not yet set in stone. However, a map of the rough boundaries was included in the March meeting’s agenda packet and contained areas of downtown, the south of Laurel area, the city’s Eastside, Westside and the Santa Cruz Wharf. The agenda report states that the district would include about 543 acres, or approximately 5% of the city.

As the agenda report states, “Though the exact boundaries of the EIFD are subject to further review and refinement as the formation process continues, the current boundary is focused on the Downtown Plan Expansion area, various mixed-use corridors within the city and other development opportunity sites with planned or proposed future development consistent with the city’s general plan.”

The city is now looking for community members to serve on the public financing authority board, which will oversee the formation of the district and a public infrastructure financing plan.

To apply, visit cityofsantacruz.com.