The Launch Report – 1Q19

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In this quarter’s Launch Report we address the issue of reducing ever increasing infrastructure costs.

Greg Vogel, CEO of Land Advisors Organization, this issue’s guest writer, explores what he has dubbed as “the $250 (per front foot) problem”.

We have also included examples of how to offset $250 (front foot) of costs, as well as recent financing transactions and local market insights from the Land Advisor’s Organization.

Best,

Carter Froelich, CPA

Managing Principal

Marana Adopts a New CFD Policy

The Town of Marana (“Town”) adopted a new CFD policy (“Policy”) at its regular Council Meeting on June 4, 2019.

2019 Amended CFD Policy FINAL

The highlights of the Policy include:

A. Two Tiered CFD Structure

  1. Standard Infrastructure CFD – To be used for development projects that do not have large regional infrastructure items. In this instance the preferred financing source will be General Obligation Bonds.
  2. Extraordinary Public Infrastructure CFD – To be used for projects that have large regional infrastructure items.
  • a.  Extraordinary CFD’s will have the ability to use both General Obligation Bonds and Special Assessment Bonds.
  • b. Extraordinary Public Infrastructure includes: Traffic Interchanges, water reclamation facilities, water treatment campuses and similar regional infrastructure.

B. Increase in the General Obligation Bond Authorization period from 7 years to 15 years or 75% development of lots.

C. CFD Application Fee of $15,000 and $50,000 deposit.

D. Requirement for the maintenance of $100,000 in cash or letter of credit to fund operations and maintenance costs until such time as the $0.30 operations and maintenance tax exceeds $100,000 per year.

E. Requirement that Applicant fund $2 million of coverage for CFD Directors and Officers Insurance.