County Board of Supervisors · Tuesday, September 29, 2026, 9:00 AM · Item 7 · REGULAR AGENDA

MajorPlanning & development, Taxes, fees & budget, Housing

County property tax money could fund Scotts Valley infrastructure financing district

In plain English

The City of Scotts Valley is forming an Enhanced Infrastructure Financing District (EIFD) covering about 236 acres — roughly 8% of the city, including the Town Center. An EIFD sets aside a share of the future growth in property tax revenue inside that area to pay for public infrastructure; it does not raise anyone's property taxes or create a new tax. A yes vote would approve the Infrastructure Financing Plan and commit up to 25% of the County's share of future property tax growth inside the district, for no more than 30 years, to projects such as roadway and interchange work at Mount Hermon and Granite Creek, water and sewer lines, fire facilities, wildfire fuel breaks and prescribed burning, stormwater culverts, a senior/community center/emergency shelter, and gap financing for affordable housing. The Scotts Valley Fire Protection District board approved the plan on September 9, 2026, and the Scotts Valley City Council on September 16, 2026.

County tax dollars that would otherwise flow to the general fund from new growth in this part of Scotts Valley would instead be steered for up to 30 years into infrastructure inside the district, while Scotts Valley residents and commuters would be the main users of the roads, sewer lines, fire facilities and wildfire risk work it pays for.

Key facts

  • The district covers approximately 236 acres, about 8% of the City of Scotts Valley, centered on development and rehabilitation opportunity sites including the Town Center.
  • Contribution caps: City up to 50% of its future property tax increment, Fire District up to 30%, County up to 25%; total EIFD funding capacity is estimated at approximately $40 million on a present-value basis.
  • A consultant analysis by Kosmont Companies estimates approximately $18 million in net positive County general fund revenue on a present-value basis over 50 years, plus roughly 15,100 temporary construction-related jobs and about 600 permanent jobs.
  • County conditions include a County seat on the district's Public Financing Authority board held by the local Supervisor, no use of eminent domain, and a requirement that any residential development receiving EIFD funding be 100% affordable.
  • A second public hearing and protest proceeding is set for October 19, 2026; if a majority protest exists, formation ends. Filing with the State Board of Equalization is targeted for November 2026.

Reasons to support

  • Only the growth above the current tax base is captured — existing baseline County property tax revenue is untouched, and no new tax is imposed on property owners.
  • The consultant's fiscal analysis projects the County comes out ahead, with roughly $18 million in net positive general fund revenue on a present-value basis over 50 years despite contributing up to 25% of increment.
  • The money would fund concrete needs: sewer line along Mount Hermon Road, interchange improvements, fire facilities, shaded fuel breaks and structure hardening for wildfire risk, and gap financing for affordable housing.

Reasons to oppose or change it

  • Up to 25% of the County's share of future property tax growth in the district is locked away from countywide uses for as long as 30 years, and that money is spent on infrastructure inside Scotts Valley rather than in unincorporated areas or other parts of the county.
  • The projected $18 million net benefit and $40 million funding capacity rest on assumptions about future assessed value growth in a consultant's model; if development in the 236-acre district falls short, the County's forgone increment may not deliver the promised return.
  • Nearby property owners and residents can still block the district: the October 19, 2026 protest proceeding terminates formation if a majority protest exists, and the plan could be modified afterward, which would send it back to the Board.

Official wording

Consider adopting a resolution approving the Infrastructure Financing Plan for the Scotts Valley Enhanced Infrastructure Financing District (EIFD) and the allocation of County property tax increment within the Scotts Valley EIFD (County Executive Office)
Official agendaStaff ReportResolution Approving Scotts Valley EIFD IFP CoversheetItem 7 - Scotts Valley EIFD IFP Presentation

Summary written by claude-opus-5 from the agenda and the Staff Report. It can contain mistakes. The official documents govern.