Good morning.

Welcome to the Tuesday, March 18, 2025 at 9.30.

The time is 9.39 a.m.

This is the meeting of the stadium area public financing authority.

This meeting is now called to order.

Per council rules procedure chapter 8A5.

We will need to elect a temporary chair for this meeting as there is no chair.

Are there nominations from members of the authority for a temporary chair?

I would like to do just the chair and vice chair or chair?

Just a chair for this meeting.

Later in the meeting we will select a chair and vice chair for the rest of the calendar

year.

For the chair I would like to nominate for a plucky bomb as a temporary chair for today.

Do I have a council member plucky bomb to accept the nomination for temporary chair?

Is there a second on that?

I will second.

I have a second by council member, my apologies.

Member Sheroma.

All in favour say aye.

Aye.

Aye.

The abstentions.

Thank you.

The motion passes and council member plucky bomb will be the temporary chair for this meeting.

The first order is the landing acknowledgement.

Darryl, I ask you to read the landing acknowledgement and the pledge of allegiance.

Could I stand?

All are able, please stand.

Please rise for the opening acknowledgments in honor of Sacramento's indigenous people

and tribal lands.

To the original people of this land, the Nisanan people, the southern mighty, the

Maitu, Valian planes, Miwok, Patwyn, Winton peoples, and the people of the Wilton Rancheria,

Sacramento's only federally recognized tribe.

May we acknowledge and honor the native people who came before us and still walk beside

us today on these ancestral lands by choosing to gather together today in the active practice

of acknowledgement and appreciation for Sacramento's indigenous peoples history, contribution,

and lives.

Thank you.

I pledge allegiance to the flag of the United States of America and to the Republic for

which it stands, one nation under God, indivisible with liberty and justice for all.

All right, next we have consent to have a motion.

Any comments?

Any comments?

Seeing none.

Make sure I have no public comments on this item.

All in favor, please say aye.

Aye.

Any opposed?

Any abstanions?

None?

Passes.

For discussion, item number three, overview of the proposed amendments to the Rally Arts

Enhanced Infrastructure and Financing District, known as the Stadium Area EIFT and draft

of the amended infrastructure financing plan with a long file ID.

Welcome.

Welcome.

And good morning, members of the PFA.

My name is Eany Malkisini with the Finance Department.

I'd like to welcome those who are new to the board.

Thank you for being here with us and accepting this position.

Appreciate that.

We are pleased to have this opportunity to present the draft amended infrastructure financing

plan for the proposed expansion of the Stadium Area EIFT.

I'm going to define the EIFT.

A lot of people are not sure what the financing district does.

So an EIFT is a type of special financing district that utilizes a portion of tax increment

revenues from a specific area to finance capital facilities or other specific projects of

community-wide significance that provide significant benefits to the area within the EIFT or the

surrounding community.

As part of the expansion effort of the Stadium Area EIFT, the amended plan is being prepared

in accordance with the EIFT law and will include all elements required under that law.

And with that said, I would like to turn the time over to Marco Gonzalez, who will present

a brief overview of the current status of the potential development of the overall RELYARDS

project.

Thank you.

Thank you.

Members of the PFA, good morning.

We're going to be going over today is just a quick overview of RELYARDS development activities.

The plan is for the first public hearing we'd have our development partners come and give

you an update more in depth on everything that's going on out in the RELYARDS.

But quickly getting into it, so we're working with the master developer of the RELYARDS,

the RELYARDS, to implement over $50 million of grants, so various grant programs such

as the Transit Intercity Rail Program, Affordable Housing Sustainable Communities Program,

and a State Parks Grant, plus leveraging various funding tools such as the EIFT, which

we're obviously here to discuss today, Meloroo's Districts, former redevelopment funds,

and developer equity, to really lay the groundwork for the backbone infrastructure and catalyze

development of the RELYARDS.

So the scope that you see here represented in orange is what's currently either under

development or soon to be under construction or soon to be under construction.

And I show this to illustrate that the job is not finished because if we layer on the

additional infrastructure that needs to be developed, you see that there's still a large

scope remaining.

So we're making really great progress, but still a lot more work to be done.

A lot of this backbone infrastructure is intended to reconnect the RELYARDS, so historically

bifurcated from the rest of the city, and so laying this groundwork, we're really going

to reconnect the site and have it become one cohesive central city.

Also laying that groundwork for our vertical development projects.

As I mentioned, we've given update for the first public hearing, but all the blue dots

are really illustrating projects that are either under construction or that are in the

pipeline and soon to be under construction.

So again, laying great groundwork, but still a lot more to be done to realize that vision

of the 2016 specific plan.

Just some beautiful rendering showing what the build out will look like.

And wanted to give you an overview of the term sheet that we brought to council at the

end of last year.

So as a reminder, the term sheet was focused on three main items.

The first being development of a 1,200 to 10D soccer stadium for the sacri public.

The next is catalyzing and redeveloping the historic central shops.

And the last item is build out of the Sac Valley Station master plan project.

If I could stop you just for a second.

Of course.

You said a number that I know you wanted to put another zero on.

You said 1,200 and I thought it was 12,000.

It is 12,000.

Let me see if I can go back here.

For the record.

Make sure the record is clear.

That is the 12,000 seat capacity.

Let's see.

12,000 seat capacity.

Thank you, councilmember.

Appreciate that.

Just 1,0 off.

But yeah, 12,000 to 10D stadium.

So a key component of the term sheet was expansion or proposed expansion of the EIFD.

So right now we have our stadium area EIFD which encompasses the parcels east of

seven street.

And what we are proposing here today is expanding the EIFD for a larger tax increment

capture area and adding additional facilities to be funded via the EIFD.

And for more on that I would kick it over to Jamie Gomes with EPS.

Thank you.

Good morning members of the Public Finance and Authority.

Jamie Gomes with Economic and Planning Systems.

We are working on behalf of the city and your public financing authority.

Our role is preparing the amended infrastructure financing plan.

And that does accompany the amended EIFD that your body will be considering.

So with that I will dive right in.

As Marco described, many of the EIFD we have several purposes that the infrastructure financing

plan document needs to account for.

First is expansion of the boundaries as Marco mentioned.

Additionally identifying as denoted on this map to individual and separate project areas

within the EIFD.

An expanded list of infrastructure and facilities that will be eligible to be financed by the EIFD.

Alignment of the term sheet that Marco just described.

And then of course making sure we're compliant with current EIFD law.

So the overview of the plan as you have it in your packet includes several elements.

They're listed here but most importantly there's an updated tax increment revenue forecast.

There's an updated plan for financing the facilities that will be eligible to be funded.

And then lastly an examination of the fiscal impacts of the EIFD formation on the city.

And I'll talk about each of those in more detail.

So as many of you are familiar, tax increment financing takes a significant time to accumulate.

And this slide is really depicting what that timeline typically looks like.

EIFD formation that your public financing authority will be considering would be at the beginning.

And then there's stages where horizontal or backbone infrastructure development will transpire.

And then that's followed by vertical development that adds increased assessed value upon which

that incremental property tax revenue is derived.

And that incremental property tax revenue will be going into the EIFD.

So as I mentioned the list of facilities will be eligible to be financed as being updated

and expanded.

And generally the document you have categorizes the improvement into three main categories.

The first being developer led investments that will be eligible for reimbursement.

The second will be city led investments that could be financed.

And then lastly investments in affordable housing or affordable housing infrastructure.

And the term sheet has a specific waterfall and flow of funds as to how each of those may be financed.

The updated tax increment revenue forecast is certainly predicated upon a number of assumptions.

As I mentioned already there are two separate project areas.

And this is unique in that the original stadium area EIFD was formed in 2019.

So we have two different base years.

So while the document will show the cumulative revenues combined,

we're also tracking them separately by independent project area because they have those different base years.

As it stands now in the plan subject to your confirmation.

Yeah.

Just a real quick question.

Now that we're going to have the two EIFDs for East and West,

will this committee be responsible for both of them or will we have to establish a new EIFD committee?

Great question.

This will be a single amended EIFD with both project areas combined.

Okay, sounds good. Thank you.

Sure.

As the plan is written, it is assumed that the city will be contributing 100% of the incremental property tax revenues into the EIFD.

But I do want to point out there is no commitment of the city's property tax in lieu of vehicle license fee.

And there's an assumption that the former rail yards redevelopment project area,

its share of the funding into the Innovation and Growth Fund will be maintained so that will continue to flow into the Innovation and Growth Fund.

And the city also receives pass-through revenues from that former project area.

So those monies, instead of going into the former redevelopment project area,

they get passed through to the city's general fund.

So this infrastructure financing plan assumes that both of those stay in their respective places.

The revenues to the IGF and pass-through revenues to the city's general fund.

The remaining incremental revenues will go into the EIFD.

So as I mentioned, the analysis and the flow of funds in the document is consistent with the city's term sheet.

And the revenues that your public financing authority will have discretion over could be used to finance improvements in a variety of ways.

There may be tax allocation bonds that are issued directly through the public financing authority.

The city or the public financing authority can also pay for improvements on a pay-as-you-go basis.

Meaning as revenues come in, you can reimburse for eligible improvements completed.

Or lastly, there may be another debt instrument.

As Marco denoted, there could be a Melarose Community Facilities District formed.

The debt could be issued through that CFD.

And EIFD revenues can be used to fund debt service on those bonds.

So we're preserving flexibility that you have discretion as to how you may want to finance improvements in the future.

So I mentioned in tracking the revenues by two separate project areas.

This slide is depicting them combined.

And there's a couple of points in time to point out.

First and foremost, I think at the beginning of the chart, you can see how flat the slope is.

And that is indicative of how long it can take for incremental property tax revenues to accumulate.

But then as sufficient vertical development transpires, then you see the slope of line get much deeper.

And that's really when the revenue generation begins to take hold.

So we did indicate in 2038, 2039, the estimated timeframe within which the former redevelopment project areas will dissolve entirely,

because all of the debt obligations to which they're obligated should be finished at that time.

And then from that point forward, it's a typical tax increment revenues.

Finally, the EIFD law requires the infrastructure financing plan to examine the fiscal impacts of an EIFD formation on any participating taxing entity.

In this case, the city of Sacramento is the only affected and participating taxing entity.

And this slide is depicting the fiscal impact analysis modeling effort.

So we use a number of inputs that are indicated on the left-hand side, the land use information from the project applicants.

And that is a number of units, number of hotel rooms, number of office square feet, retail square footage, et cetera.

We have the city of Sacramento's existing service levels and the city's operating budget.

And then we have a fiscal impact analysis model that we work with city staff to develop.

And we use that to forecast incremental revenues we anticipate from new development within the rail yards.

And then we're also using that to forecast marginal costs.

So what costs will the city incur in providing new police, new fire, planning and public work services to the new residents and employees within the district?

And comparing the revenues to against the expenses, then we get a net fiscal impact result.

So what you see here is a static look at the estimated fiscal impacts to the city at two points in time.

The first on the left-hand side is after an initial phase, which we've picked 20, 30 as the initial phase.

And then the right-hand side is build out.

After the initial phase, estimated expenditures to serve new residents, employees, are anticipated to outpace revenues by about $700,000 a year.

So that's an annual number.

And by 2030, that reflects only a percentage of the total build out of the project.

However, and that deficit of $700,000 is about 15% of that $4.9 million operating cost in that year.

So again, just looking at rail yards specifically.

That turns around and flips to the positive when we look at build out.

So once all the development has occurred, revenues anticipated to accrue to the city are about $16.1 million, as compared to about $14.1 million in cost,

indicating about a $2 million surplus.

So, again, that's just two points in time.

When you take that static look and expand it out, this is that build out.

Again, we're saying there's $16 million or estimating $16 million in revenue, $14 million in costs.

You can really see what the drivers of those revenues and costs are.

On the revenue side, property tax revenues and the past through revenues reflect about almost 40% of the revenues from new development,

even with the increment going into the EIFD.

And then sales tax and measure you revenues combined also reflect about 38% of revenues.

On the expenditure side, about 75% of the costs that are estimated to serve new residents and employees are for public safety, for police and fire services.

One of the questions that arose as we were thinking about the financing plan and the fiscal impacts to the city is the EIFD law requires that you examine fiscal impacts during development of the project and at build out.

But certainly the city of Sacramento is interested in the cumulative effect over time.

And in particular, given budget deficits, the city is facing in the near term, we want to look at this over the longer term horizon.

So, what we did is try to extrapolate the static fiscal analysis and look at it dynamically over time.

And that's what you see depicted here.

The break even point is estimated to be about 2032, so a little less than 10 years from now.

So let me translate that by saying in the first seven years or so, the city may experience annual fiscal deficits to serve new residents and employees in the rail yards.

Thereafter, we anticipate there will be positive surplus revenues.

And then lastly, when we take that and expand it out over the entire 70 year term of the EIFD, the left hand side, that $75 million, is just a straight sum of the negatives and positives for that 75 year period.

And that's in $20, $24.

Then when we discount that revenue stream back to today's dollars, either using a four or five percent discount rate, it's still a positive either 53 million or about 40 million.

So when you look at it dynamically over time, yes, there are near term deficits, but over the long run, the present value of the investment indicates that it's a positive impact.

So I will conclude and turn it back over to you.

Senator Marcos.

I'm sure we'll entertain questions.

Thank you, Jamie. Thank you, Marco, for both of your presentations.

I'm sure there's a lot to digest as far as information that you guys have taken in at this time.

We'll set aside some time for questions.

Before we do so, we would like to conclude an item number three presentation and recommend a PFA Board adopt the resolution, consideration, approving the expansion of the EIFD boundaries, amendment of the plan and amendment of the facilities list.

And then the next steps as posted on the your laptops there.

So April 22nd, we would return back to the PFA Board for the first public hearing.

And just remind you there's two public hearings for this EIFD.

So at this point, we are happy to take any questions or comments from the Dices and Jamie and Marco can stand by and some of our team.

Thank you.

I was wondering if you can explain the net positive 4% and 5% on the last slide a little bit more.

I don't think my caffeine is kicked in yet.

I'm happy to do that.

Maybe I can go backward.

So I'll do my best to try to explain it because it is an important thing to consider.

When we're doing the fiscal impact analysis, we're using the city's budget, you know, one year budget.

And we're using that to the other slide.

Yeah. Is it okay with you if I start here?

Oh, yes.

Okay.

This, the blue line on this slide is the fiscal impacts as estimate on an annual basis.

And then we've escalated them because right now the analysis is in all in $20, $24.

But over time, we know cost and revenues would escalate.

So then taking that blue line, and if we sum the negative numbers in the first seven years, and just as an example, cumulative, let's say it was a negative $4 million.

And then from the positive years, we sum it and it's a positive $79 million.

So $79 minus the $4 is the $75 million that you see in the blue bar.

That's all in $20, $24.

When we escalate that into the future, we're discounting it back, saying what's the net present value of that revenue stream as if it were all in today's dollars.

And that that's where we use two different discount rates, sort of a risk-free rate of return being either 4% or 5%.

And what would that sum of negative and positive dollars be if a party were to receive it all today and were discounted to today?

That's what the net present value calculation is indicating.

Okay, thank you.

And then I do have a question for City staff. So for the fire station, when would that be triggered? When would it be built out before or after the stadium and all the new development?

What does the timeline look like for that? Because I know downtown fire is so busy and so I just want to make sure people have response.

So the short answer is that in the approvals for the rail yards, there is no requirement to build out a fire station.

It has been analyzed, but there is no trigger to require a fire station. So that would be dependent on the city, on potential revenue streams, but there is no trigger for a fire station within the rail yards.

Oh wow, okay. So right now, if calls for service, which fire station in downtown would be responsible for calls there?

I would defer to other staff if they have parameters, but not too far away from this site.

Okay, sounds good. Thank you.

And for answer.

Thank you. Quick questions. Let's make sure I've got my notes straight.

We're looking for a projective break even point of 2032, yet the timeline for debt payment is another six to seven years after that 2038, 2039.

There's no qualitative statement attached to this just trying to get my notes straight.

Yeah, let me maybe clarify, hopefully, on the fiscal impact analysis, yes.

The break even point is estimated to be about 2032. And that's contingent upon the development absorption based on the applicants, what the applicants have provided.

The timeframe of 2038, 2039, that relates to all of the former redevelopment project areas that are within the city.

That's when, right now, each of them still, they are still identified because there's outstanding obligations to which they are committed.

And that's the time period within which we think all of that former debt and all those former obligations to the old redevelopment project areas dissolves.

And then they disappear and the process through which property tax revenues right now are channeled into what's called RPTTF.

And that's a term of art after the redevelopment agencies were dissolved.

In 2038, 2039, after that point, there will be no more RPTTF. It's just simply back to the way it used to be.

Fantastic. Thank you.

Sure.

Thank you. Could you put that your timeline back on the screen for me?

That's possible.

Yeah, EIT formation, a meta timeline or timeline going forward.

Well, that's it. That's the, that's the timeline.

I'm not getting. I think this one right here counts. I remember right?

Let's see one more. This one right here, right?

Let me get it on my screen. Thank you.

It's the other timeline.

Okay. I think it's a formation.

Actually, no. The one you had before and the actual timeline of next steps. That one.

Okay.

So the meeting today is the first draft.

And then the PFA first public hearing would then take place at a council meeting?

It'll be here at the finance authority at the finance authority.

So it's back to us again. Right.

And then after that, made their 18th, it'll go before council for approval.

And then it'll come back for the second public hearing in May 27th.

And that's when the amended will, the format, what will happen for the amended?

So the, there has to be three public hearings, obviously.

Two. Two.

The April 22nd, May 27th.

So you say April 22nd. I'm just trying to be clear because I'm a literal person.

April 22nd is the first public hearing. Right.

And then it says May 27th. Hold a second.

Second public hearing.

And then a final public hearing. That's the second and final public hearing.

Sorry. A little confusing page because I'm reading it differently.

So at that point in time, the council has already approved it.

And then, and you want the council to approve it before the second hearing.

Right. They approve the, the infrastructure finance plan. Right. Got it.

Okay. That's clear now. Thank you.

Thank you.

Thank you. Chair.

First of all, I'd like to say it's a real privilege and honor to serve on this public financing authority.

And clearly a lot of work has gone into bringing us to today.

The materials are lengthy and dense, but I did manage to navigate my way through it.

I do have a few questions.

So first of all, for the initial phase of 2030, which is hardly five years away, there is the notion that there'll be multi-family dwelling units.

There'll be a, anyway, a number of things that are planned to be built, including a hospital,

medical offices, the, the stadium.

My question is, is, how is that looking in five, I mean, things take a long time to get built, developed, and so forth.

What is the city's outlook for those proposed items to be underway?

That's a terrific question. And we do have the master developer from downtown Raleigh, our adventure here.

If there's additional context, they'd like to add, but we're actually making really great progress right now.

So let me flip back to a map that I have.

I have two projects I want to highlight. Two housing projects, one that's opened already, and one that will soon open.

So the Wong Center, which is just to the south of the tracks on 7th Street, 150 senior affordable housing units.

Those are really the first residents in the Raleigh yards. Beautiful project.

If you haven't been there, I definitely recommend checking it out.

And just on the other side of the tracks is the AJ, which is a mixed use, mixed income project.

I'm scheduled to be open this year. Incredible project that I'm very excited about.

And then just to the left of that, the teleographer, which is right now, under planning and building review.

So we've got a few housing projects that have already been underway with, you know, additional in the pipeline.

And then when it comes to Kaiser, so grading is currently happening, and they're on track to open by 2029.

So I will say those components along with the rest of the development that you see spread out here is on track.

And so we do anticipate within the next few years, really, you'll see an acceleration of that vertical development that's out there.

So, you know, still, you know, you see a lot of dirt out there, but I don't think that's indicative of all the groundwork that's been laid and all the progress that's being made on the site.

A few more questions. Thank you. That's very helpful.

And I gather that the economic analysis that has been done for this includes some conservative presumptions, assumptions, what have you towards ensuring that the city doesn't overextend itself on this.

But the anticipated 700,000 deficit in the initial years for this project.

Does that start now? I mean, it says 2030, but do those deficits start now?

Let me bring up Jamie so we can give a bit more context to that.

Thank you, Mark.

The number of 700,000, about 15% of the estimated cost was for 2030, but it does gradually change over time.

So it's really contingent upon what physically comes out of the ground.

So as Mark had mentioned right now, only the Wong Center is the only occupied project out there.

So the city's service costs are relatively low.

The cost for service really are primarily isolated to that or any site related calls.

So to answer your question specifically, that 700,000 is for 2030, so we anticipate it will ramp up to that as development occurs.

And the cost will continue to go up as development transpires, but so too will revenues.

And in that 2032 timeframe, that's when we think the revenues catch up to the expenditures and then begin to outpace them.

And then in the near terms, one last question for now, in the near term, the plan also included the city's budget, which I thought was helpful.

And I know that the city and the colleagues on the financing authority are facing, you know, continuing to wittle away at the deficit in the current budget.

So what, what, maybe this is a broader question.

What are the outlook for these coming years and the impact of this great, you know, gradation of 700,000 deficit?

I mean, is there the notion that the city is going to have to cut something else in order to fund this?

Or is there an anticipation that there'll be better revenue as better days ahead?

Yeah, that's certainly a question related to some difficult policy choices that may need to be made, but certainly not something I'm qualified to speak to today.

Okay, well, I appreciate that.

You know, as a citizen of the city, these things, you know, are top of mind for our city.

Well, thank you so much, and I'll get a lot of hard work has gone into this. Thank you.

Number Talimatiz.

Commissioner Sherema, we're trying to see as a city how we grow our revenues because our expenditures continue to outpace our revenue coming in.

And I mean, we're hopeful that projects like this can help us, although we need something now.

But that's always like that's front, mine and center right now for us, especially as we're going to be having the TOT conversation with the passage of measure and it allows us to use TOT more flexible.

And so we're hoping to hopefully increase our revenue that way too.

And so we're just thinking about creative ways.

But I do have an ask for staff.

I do see the ice street bridge right here on the on the on the rendering and city council recently passed the Truxel bridge feasibility study and we're moving on in the process of it 12 years in the making.

So I don't want it to get forgotten as we move forward on the rail yards project.

Like I said at the beginning when I joined this commission.

Connectivity to downtown and South of the town was being able to enjoy the games and the concerts and all the investment we're doing here in the downtown core is important for me.

So just include it in any of the maps moving forward so that doesn't get lost on the public.

Councilmember that's a terrific point there in apologies I left it out by accident but this you know this slide here was meant to represent the Truxel bridge as well.

So I'll make sure that we highlight it for future presentations. Thank you.

Do we have any public comment on this item?

Chair I have no public comments on this item.

I would entertain a motion or if there are additional comments or questions.

I'll move it. This item.

Is there a second?

There is a second but I thought it was just an overview.

So I'm confused.

Yep I had the same reading so it's.

Receiving provide comments but also consider approving the expansion of the EFID boundaries or naming the EIFD and the public planning to authority.

And distribution and the amended plan and then setting those dates for the future hearings.

So with that I'll second.

Any other comments? All in favor please say aye.

Aye. Any opposed abstained?

None. Motion passes. Thank you. Thank you.

Our last order of business is the selection of chair and vice chair for the calendar year. Are there any motions?

There is a motion.

I would like to.

Since this project is in district four I would like to nominate.

Council member plucky bomb as the chair and I would like to.

Vice vice mayor tell a mantis as the vice chair.

I accept.

Any discussion?

Second motion.

All in favor please say aye.

Aye. Any opposed?

There was no public comment.

No chair there's no public comment.

Thank you.

Thank you. We appreciate your support.

And with that meeting is adjourned.