Financing Parks: A Pay-As-You-Go Guide
Reprinted with permission from Building Together: Investing in Community Infrastructure (National Association of Counties, National Association of Homebuilders, Government Finance Officers Association, and Urban Land Institute).
Source Characteristics
| FINANCING SOURCE |
PROVIDES FUNDS |
REPAYMENT |
ADVANTAGES |
DISADVANTAGES |
| Taxes |
Immediately |
By all taxpayers immediately |
Preserves borrowing capacity; saves interest
cost |
Funds may be insufficient; may not relate payment
to benefits received |
| Special Assessments and Special Districts |
Immediately |
By assessed customers at time of construction. If
bonded, over 10-30 years |
Makes funds available immediately; matches payments
and benefit |
Requires legislative approval; may seriously impact
assessed customers |
| User Charges |
Immediately |
By rate payers immediately |
Eliminates need for borrowing or reserves |
Impractical for large projects; may make rates
erratic from year to year |
| Reserves |
In future |
By rate payers each year until reserve is
adequate |
Eliminates need for borrowing; improves financial
stability of system |
Can be politically difficult; difficult to
"protect" reserves
for intended use; impractical for large projects |
| Negotiated Exactions or Impact Fees (hookups,
systems development or capital
fees) |
Immediately |
By developers or customers immediately |
Requires new customers to pay for impacts they
place on system |
Political problems (viewed as
"anti-development"); ineffective
where there is little or no growth; affects housing affordability |
| Grants |
Immediately |
No repayment needed |
Source of free money |
Reporting and administration may be burdensome, may
not be in accordance
with county priorities |
| Public-Private Ventures |
Varies |
By private investors and by taxpayers |
Total costs to county government are reduced |
Coordination can be complicated and
time-consuming |
|
