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<DIV><FONT face=Arial size=2><FONT face="Times New Roman"
size=3> <STRONG><U><FONT face=Arial size=2>At the Urban Renewal Agency
meeting on July 24, BJ Swanson provided this testimony. Swanson, the
present chair of the Gritman Medical Center Board, is the former President of
the Moscow Chamber of Commerce and the former chair of the Latah Economic
Development Council. She has been a strong supporter of the Alturas
development and an outspoken supporter of economic development in Moscow.
When she speaks out so forcefully and convincingly about the need to close
Alturas and the role of the city in economic development, we need to pay
attention to her message. BL</FONT></U></STRONG></FONT>
<P style="MARGIN-BOTTOM: 0in"><U><B>URBAN RENEWAL MEETING 7 24 08</B></U></P>
<P style="MARGIN-BOTTOM: 0in"><STRONG><U>B. J. Swanson:</U></STRONG></P>
<P style="MARGIN-BOTTOM: 0in"><BR></P>
<P style="MARGIN-BOTTOM: 0in"><BR></P>
<P style="MARGIN-BOTTOM: 0in">I’d like to request that the URA commissioners
revise the budget presented and adopt the goal to close the Alturas URA district
as soon as possible. Based on the current tax receipts and expected lot sales,
the Alturas URA district could be closed within the next two years. In two
years, this action will return over <U><B>$300,000 annually</B></U> to benefit
all property taxpayers in Latah County.</P>
<P style="MARGIN-BOTTOM: 0in"><BR></P>
<P style="MARGIN-BOTTOM: 0in">When the Alturas URA district was formed in 1996,
the goal was to diversify the economy and broaden the tax base. It was
originally set up to close in 7 years because we wanted to see the benefit to
all as quickly as possible. That proved to be too optimistic so the timeline was
revised to be 20 years. Now we’re going on year 13. In year 15, or sooner, it
could be closed. </P>
<P style="MARGIN-BOTTOM: 0in"><BR></P>
<P style="MARGIN-BOTTOM: 0in">Alturas created jobs and economic value. It has
been a success as there are ~150 jobs in Alturas and the tax increment generated
last year was $267,176 that went entirely to the URA. Legacy Crossing needs to
create jobs too. Create a tax base to benefit all. Legacy Crossing should NOT be
a housing project. Housing and retail do not create economic value and will not
pay the bills.</P>
<P style="MARGIN-BOTTOM: 0in"><BR></P>
<P style="MARGIN-BOTTOM: 0in">The Legacy Crossing URA District has its share of
opposition. There is also opposition to a governmental entity hiring an Economic
Development Director as evidenced by two recent editorials in The Daily News and
several online comments. By showing good faith and closing Alturas early, I
believe this will greatly reduce animosity with your partners and certainly
build better rapport with all the taxpayers in Latah County.</P>
<P style="MARGIN-BOTTOM: 0in"><BR></P>
<P style="MARGIN-BOTTOM: 0in">The URA budget is divided into three parts:
General Agency, Alturas and Legacy. However, the sole income source is entirely
from Alturas. Legacy should stand on its own just as Alturas did. Alturas should
not be used to fund Legacy Crossing.</P>
<P style="MARGIN-BOTTOM: 0in"><BR></P>
<P style="MARGIN-BOTTOM: 0in">Government certainly has a place in our society.
Government is good at policy and regulation, but terrible at being efficient.
Economic Development directors employed by governmental entities are extremely
inefficient. That is why Lewiston and Pullman do not have economic development
directors. </P>
<P style="MARGIN-BOTTOM: 0in"><BR></P>
<P style="MARGIN-BOTTOM: 0in">The Urban Renewal Agency does not have a good
track record in prudent management of projects. This is typical of governmental
entities. Please don’t buy into thinking a government employed economic
development director will give any kind of return on investment. In private
business, “Time is Money.” In administration of the URA, this is not the case.
For example:</P>
<P style="MARGIN-BOTTOM: 0in"><BR></P>
<P style="MARGIN-BOTTOM: 0in">The Alturas Phase II expansion was first talked
about in 2003 with a preliminary budget of $180,000. As of your audit date
9.30.2007, the project was not yet complete and the price tag was over $575,000.
That equals cost overruns of 220%. Today, you talked about the monuments still
not being completed in Alturas Phase II. A private contractor would have
finished this in 6 months; it took the URA 5 years. If a private project manager
had taken 5 years and had 220% cost overruns, that person would have been fired
for wasting time and money.</P>
<P style="MARGIN-BOTTOM: 0in"><BR></P>
<P style="MARGIN-BOTTOM: 0in">Another example: In 2005, the URA purchased 6.34
acres from the Thompson Family for $614,145. I believe this purchase price was
based on “Unimproved Land values.” The land had already been platted into 7 lots
or about $87,735 per lot. Infrastructure to “improve” the 7 lots cost an
additional ~$575,000. So, 7 lots with an investment of $1,189.145 or $169,877
per lot. It appears the first two lots were sold for around $80,000-$90,000
each. Not even enough to payback the “unimproved land” debt. Here is another
example of poor decisions and unacceptable management. Obviously the unimproved
land was purchased at “<B>Improved</B> Values,” then more money was paid for
improvements. Using URA tax receipts to pay premium prices for land and allow
200% cost overruns on improvements, is basically robbing the taxpayers of Latah
County. If there had been prudent management of land and funds beginning in
2003, the Alturas URA could have been closed by now and all taxpayers of Latah
County would be benefiting.</P>
<P style="MARGIN-BOTTOM: 0in"><BR></P>
<P style="MARGIN-BOTTOM: 0in">These are just two examples of why a governmental
entity should not get involved in development. Your request for $40,500 for half
of the government employed economic development director and $30,000 (a $5,000
increase over last year) for URA administration is wasting taxpayer money. You
justify the $70,000 by talking about how many hours you spend on URA. Please
look at it from the position of “What did we accomplish for $70,000, what was
the return on our taxpayers investment?” Selling one lot in Alturas Phase II in
the last year for less than your investment in the lot is not a great
accomplishment.</P>
<P style="MARGIN-BOTTOM: 0in"><BR></P>
<P style="MARGIN-BOTTOM: 0in">Please revise the entire URA budget. Prioritize
efficiency and return on investment. Eliminate all discretionary expenses, pay
down debt and conserve cash to close this within 2 years or less. Please stick
to policy and regulation. Leave development up to the private sector.</P>
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