The City has just completed a financial analysis of the proposed Rivers project. The current proposal with the developer, Center Cal properties, includes a provision were the urban renewal district would reimburse the developer for a portion of the costs of building on a landfill and mitigating the costs of safely handling methane and stabilizing the ground where structures would be built.

The amount of reimbursement proposed is 17.6 million. This amount has been analyzed to determine the effect on city budgets. The analysis was also done to update previous studies in order to include the fact that properties have experience loss in value due to the recent economic turndown. Listed below is a summary of frequently asked questions related to this topic :

Q: How will urban renewal funding for The Rivers project affect my taxes?
A: Urban renewal funding will not affect your current property taxes. The City’s
Urban Renewal Agency (URA) receives a portion of existing taxes already
paid. The total amount paid by individual property owners will not change as
a result of The Rivers development. The additional taxes generated by The
Rivers effectively is directed to the Agency until the district is terminated.

Q: By what annual amount will tax increment from The Rivers exceed debt
service?
A: Beginning in fiscal year 2014‐15 annual tax increment will exceed projected
annual debt service by $922,000. This amount will increase annually until the
debt is paid off in fiscal year 2027‐28 at which time annual tax increment will
exceed annual debt service by an estimated $1,944,000. Please refer to Table
3 for annual amounts.

Q: How much will additional revenue will the Project generate and how much
of that will be available for other projects in the district each year?
A: Beginning fiscal year 2012‐13 annual tax increment of an estimated $544,000
will be created, increasing to $1,660,000 in fiscal year 2013‐14, and
$2,816,000 in fiscal year 2014‐15, and increasing 3% per year thereafter, for a
total of $77,468,859 through fiscal year 2034‐35. After the project is complete
and debt issued, tax increment is projected to exceed annual debt service by
$922,000. This amount will increase annually until the debt is paid off in fiscal
year 2027‐28 at which time annual tax increment will exceed annual debt
service by an estimated $1,944,000. In fiscal year 2028‐29 the amount
available for other projects and programs is an estimated $3,954,000,
increasing three percent (3%) per year.

The total amount available from The Rivers, net of debt service, for other
Projects and Programs is an estimated $33.3 million. Please see Tables 1, 2
and 3 and Chart 2.

Q: How much will school funding be impacted?
A: Local school district funding is not negatively impacted by the proposed
development, i.e., the state school funding formula is based on student
enrollment, not the amount of local property taxes. State funding reflects an
amount per enrolled student less the amount of local property taxes raised.
Note that the state will receive additional income taxes, the primary source of
state general fund resources used to fund education. Please see discussion on
state income taxes later in the report.

Q: How much will the URA have to pay to finance The Rivers project?
A: The current estimate is approximately $17.9 million. This amount is expected
to be financed either through a bond or a loan from the developer, upon the
successful completion of the project. If a bond is used, the total amount to be
repaid, including interest is projected to be approximately $26.5 million. If a
developer loan is used, the total amount to be repaid, including interest, is
projected to be approximately $31.5 million. Please see Charts 3 and 4 and
Table 4.

Q: When is the urban renewal district expected to close?
A: Preliminary projections indicate the district could complete its Plan, i.e.,
complete all its projects and or expend its maximum indebtedness and pay off
its outstanding indebtedness as early as fiscal year 2030‐31 if the proposed
development, The Cove, and other anticipated development occurs. Without
The Rivers, and the other projects the district is anticipated to close several
years later.

For more information please contact the Economic Development Manager.