Over the last 20 years, the changing fiscal situation in California has steadily undercut the financial capacity of local governments to fund infrastructure. Faced with these changes, many cities have had to adopt a policy of “growth pays its own way,” shifting the burden of funding infrastructure expansion onto new development. This funding shift has been accomplished primarily through the adoption of development impact fees.
Fee Credits
As public agencies continue to increase development impact fees and the scope of their capital improvement program, there continues to be a growing overlap between what new development is conditioned to construct and the improvements outlined in such capital improvement program. Zimmerman Group identifies this overlap and assists its clients in negotiating equitable fee credit agreements with public agencies, avoiding the developer having to pay “twice” for an improvement (i.e., constructing the facility and then paying an impact fee related to the same facility).
Reimbursements
The substantial infrastructure needs in developing areas along with public agencies’ inability to timely finance and construct master infrastructure has increased the circumstances in which projects are being conditioned to build oversized facilities. Such conditions should be accompanied by reimbursements for infrastructure costs in excess of the project’s related fee obligation. Zimmerman Group assists developers identify, quantify, and obtain such reimbursements in the most timely manner.
Reimbursement Packages
Many public improvements are the subject of agreements that provide for a public agencies acquisition of the facility and/or reimbursement of the facility costs. This is especially common when a project is utilizing a public financing district such as a CFD or assessment district. Zimmerman Group helps developers compile the information required (i.e., public works documentation) to obtain reimbursement as well as make sure maximum reimbursement is received.
Cost Sharing
When population and work force growth demand additional development in rural or underdeveloped areas, builders and developers will often collaborate to make a concerted effort to meet these increased demands. Inevitably, the infrastructure required to serve this developing area is significant and too much for any one developer to bear.
Zimmerman Group will work with the developer group to identify solutions for the cash flowing of improvements, equitable cost allocations, and the implementation of appropriate financing strategies to ensure that all development pays its fair share. These financing strategies may include any combination of land secured financing districts, development impact fees, cost
sharing agreements, letters of credit, local agency participation, and benefits districts.