The City of Kingman and a financial consultant are working to add a new option that could someday be used to help finance the Rancho Santa Fe interchange project. Mark Reader addressed city council members for 50 minutes Tuesday, explaining that Community Facilities Districts (CFD’s) can be formed to issue bonds to fund public infrastructure projects.
Reader has developed policies and guidelines that the Council may adopt, that would provide the opportunity for developers and residents to form districts to fund projects in the future. With voters rolling back a sales tax last fall and skepticism they’d approve a property tax, the City is now focused on possible use of CFD’s as a funding mechanism.
Reader explained a majority of property owners within any CFD boundary must agree to tax themselves to pay back bonds that would be issued to fund a project. He said boundaries can be drawn to include supporters and to largely exclude those who might oppose CFD formation.
“You define who is in your district and its boundaries,” Reader said. “Most are about 1,000 acres or more in size to spread cost.”
Reader explained CFD’s can form quickly if 100% of the property owners approve. Opposition, he said, can slow down the process and make it more contentious.
Reader said seven members are appointed to boards to administer CFD’s and that most cities place council members on them for purpose of oversight and management. He said that CFD’s can be a “disaster” if poorly but that they have been used very successfully in 19 Arizona communities, none of them in Mohave County.
“They work fantastic if they’re done right,” Reader said.
Reader said that a special assessment engineer is used to calculate the value of the benefit to each property owner in the district, so they can be taxed accordingly. He said owners can waive or exercise their right to protest the assessment.
Council took no action on the CFD policy proposal Tuesday. Vice Mayor Travis Lingenfelter has questions for an attorney in Reader’s firm and council member Deana Nelson wanted more time to study CFD’s before casting any vote.
The matter is expected to come back before the council at its May 7 meeting.
