Scotts Valley and Santa Cruz County partner on infrastructure financing efforts
SCOTTS VALLEY - The city of Scotts Valley and the Santa Cruz County Board of Supervisors are collaborating to create the Scotts Valley Enhanced Infrastructure Financing District, a way to help fund infrastructure in the city without raising taxes amid a dubious future budget.
The initiative is a way for Scotts Valley to generate funding for future public projects in a specified area without creating new taxes or raising existing taxes for property owners. Instead, following final approval, the county will partner with the city of Scotts Valley to contribute a maximum of 25% of its future property growth within the Enhanced Infrastructure Financing District's borders.
"It's not a new tax on residents, that's the most important part," said Mali LaGoe, Scotts Valley city manager. "It's basically taking a small portion of the city that we expect to have some redevelopment activity on - and therefore the property tax value will increase significantly - and committing some of those future property taxes that we would be getting anyway to help support infrastructure projects."
Scotts Valley receives lower revenue from property taxes than most of Santa Cruz County, which for the city's budget means having to find income elsewhere to support infrastructure projects, said Scotts Valley Administrative Services Director Stephanie Hill at a Scotts Valley City Council meeting May 20.
Ultimately, the city does not get enough property tax to raise enough money to enhance infrastructure on its own, LaGoe said, so it must partner with Santa Cruz County for the additional support.
Only 8% of properties within the city of Scotts Valley are included in the district, existing property tax money will not be touched, LaGoe said.
"I am proud to lead the County's involvement and will serve on the EIFD (Enhanced Infrastructure Financing District) governing board to help ensure investments reflect community priorities and create lasting benefits for residents," Supervisor Monica Martinez said in a media release.
The Scotts Valley Enhanced Infrastructure Financing District will bring in an estimated $40 million over 50 years to be put toward projects like traffic signals and road improvements, sewer lines, affordable housing, Scotts Valley Fire Protection District facilities, community facilities and wildfire prevention efforts, according to Martinez.
The biggest priority for the funds is expected to be Scotts Valley's Town Center project, a proposed walkable downtown area with residential units, retail space and public gathering areas proposed for the site of the former Skypark Airport. The project has been in the works since 2008.
LaGoe also said the financing district can be an incentive for economic development, as it could be used to help pay for necessities needed to complete projects that otherwise may be too expensive for developers.
"For example, if to build the Town Center - which is the most important project in Scotts Valley - the developer says, ‘Well we really need help with all of the streets and sewer lines and utilities that are going to have to be built as a part of this project,' the EIFD could be used as a financing tool to help pay for some of that infrastructure, so that the developer can afford to build the project," LaGoe said.
Investments made through the Enhanced Infrastructure Financing District will benefit not only Scotts Valley, but neighboring communities like the San Lorenzo Valley and other areas of the county through increased housing options, local job creation and improved wildfire prevention efforts to protect the entire community's fire resiliency, Martinez said.
Another major project the financing district could help fund is a potential new fire station for the Scotts Valley Fire Protection District. The fire district had previous efforts to raise public funding, such as November 2024's Measure S, which ultimately failed.
"This could be a tool where some of the future revenue helps to build the fire station," LaGoe said. "Which means they could ask the voters for a smaller amount of a tax increase in order to pay for it."
Martinez will serve on the governing board for the Enhanced Infrastructure Financing District, known as the Public Financing Authority, composed of five members of elected officials and members of the public.
The board will help divide which project will be funded with the idea that the project would benefit not only Scotts Valley residents but residents in unincorporated areas as well - though the property tax contributed is only within the city.
The Infrastructure Financing Plan, which outlines projects to be funded, financing strategy and improvements timeline, will return to the Santa Cruz County Board of Supervisors for final approval in September.
The Scotts Valley City Council is set to approve the Enhanced Infrastructure Financing District in October, pending public hearings.
Copyright 2026 Tribune Content Agency. All Rights Reserved.