[Vision2020] Urban Renewal Agency Abuse

[B. J. Swanson]

Taxpayers in Moscow and Latah County should be asking the same questions.
The Moscow Urban Renewal Agency is doing the same thing by funding Legacy
Crossing from the Alturas revenue allocation area, thereby withholding tax
reductions to citizens. The Moscow URA could easily return $300,000 annually
to reduce property tax assessments in Moscow and all of Latah County.
Instead, the Moscow URA uses the money for "administration" with nothing
tangible to show for it. At least the Lewiston URA is using the money for
projects that may eventually benefit taxpayers.

Also note that the Lewiston URA meets at noon.  The Moscow URA meets at 7:00
AM and strongly limits citizen input.  Is this by design?

B. J. Swanson




Assessor questions Urban Renewal Agency loan Nez Perce County official
believes Lewiston agency may have erred when it delayed paying off bonds so
it could loan money from two allocation areas to a third

By Sandra L. Lee of the Tribune
May 10, 2009

A decision by the Lewiston Urban Renewal Agency to loan money from two of
its revenue allocation areas to a third violates the letter and the spirit
of the plan on which the agency was created, Nez Perce County Assessor
Daniel J. Anderson says.

"I believe that is absolutely contrary to the plan that the (Lewiston) city
council approved and contrary to promises made by the city," Anderson said.

Property tax money in the North Lewiston revenue allocation area is
earmarked to pay back about $1.2 million in bonds that were sold to
reconstruct the water system on the east side of U.S. Highway 12.

Delaying paying off those bonds by using all the tax increment revenue
somewhere else, except for enough to make the minimum payment, delays
putting the assessed valuation back on the property tax rolls. "Which delays
the lowering of levies and resulting property taxes to all property
taxpayers," Anderson said.

He saw a bumper sticker that said, "It's only kinky the first time,"
Anderson said, and his fear is that in four years when the city is ready to
do a $15 million reconstruction of Main and D streets, money will be drained
from the other two areas for that.

The way revenue allocation areas and tax increment financing works is an
area is set aside and the property values on a certain date become the base.
Any increases because of new construction or changes in market value become
part of the tax increment, and property taxes levied on that portion of the
value are set aside for projects intended to aid economic development inside
a specific part of the revenue allocation area.

In North Lewiston, that was reconstruction of a part of the water system.
The property taxes from development such as the new Tyler-Kelly car
dealership are going into that fund.

In downtown, a parking study was paid for from tax-increment funds, but no
bonds have been sold.

At the Port of Lewiston Business and Technology Park, money will be borrowed
from those two areas to help pay for a street, sidewalk and underground
utilities.

The effect on taxpayers is obvious, Anderson said, when the base value in
each of the three revenue allocation areas is compared with the increment
value, the amount that values have gone up since January 2005, the starting
point for revenue allocations.

The base value in North Lewiston is $49.77 million and the increment value
is $18.6 million, according to figures provided by the assessor's office. In
rough figures, that's about 27 percent of the property tax dollars in that
area being pulled out of the county's overall revenue stream.

The base value actually has gone down since 2005 by about $840,000. That
happens because of things like the old George's Restaurant being torn down,
Anderson said. The old building came out of the base; the new restaurant
went into the increment value.

In the downtown area the base is $41.14 million and the increment is $16.8
million, although that will drop about $4.5 million because of the transfer
of ownership of the Clearwater Hall building at Fifth and Main streets from
a private company to Lewis-Clark State College. After that, the reduced
amount still will be more than 23 percent of the value.

In the Nez Perce Terrace area where the Business and Technology Park is
located, a new round of construction was just starting when the revenue
allocation areas were created. That set the base that includes the Safeway
and adjacent stores and Home Depot at $11.9 million, but the increment is
another $7.87 million, almost 40 percent of the total value in that area.

The total taxes, plus interest, allocated to urban renewal use in the five
months between November and March was $439,085, according to the county
treasurer's office.

Using the excess money in one area to invest in another is a philosophical
and policy decision that is up to the agency board, City Attorney Don L.
Roberts said. The law requires that money generated in one area be used
there, and not a dollar will be expended in one of the others, he said.

"We're simply investing the money from downtown and North Lewiston into the
project and it will be completely repaid." The agency also will pay 4.5
percent interest on the money, which is higher than if the money was left in
the bank, Roberts said, and it is reducing the overall costs of financing
the work.

The bond attorney hired by the board, Rick Skinner of Boise, wanted a
provision in the agreement that if the money was needed in the area in which
it originated, immediate repayment could be demanded, Roberts said.

It is true, he said, that it would be the agency board demanding repayment
from itself, but interfund transfers then can be arranged.

The total loan from the two areas will be about $500,000. The project itself
is about $806,000, with $200,000 coming from property taxes accumulated in
that revenue allocation area plus $100,000 from the port.

Anderson said it's possible his concerns could be addressed by rewriting the
plan that governs what the agency can do with the money. That requires
public notice and hearings by the city council and agency board.

But his concern remains that the decisions being made are increasing taxes
across the county.

"I believe those of us who are elected or in hired positions to watch
taxpayer dollars, we have two things at the end of the day: Our word and our
credibility. And I think to stray from this plan, compromises both."

The agency board's next meeting is noon Tuesday at city hall.

---

Lee may be contacted at slee at lmtribune.com or (208) 848-2266.
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