THE CITY OF RIGGINS

URBAN RENEWAL PLAN

2006

 

TABLE OF CONTENTS

 

 

A.          TABLE OF CONTENTS                                                                  

 

B.      LIST OF FIGURES                                                                      

 

C.     AGENCY MEMBERS                                                                           

 

1.      INTRODUCTION                                                                          

 

            Deterioration Defined                                                                                                    

           

            Identifying Deteriorated Areas                                                                            

                        Existing Social Conditions                                                                                 

                        Existing Economic Conditions                                                                     

                        Other Factors                                                                                                  

                       

 

2.      BOUNDARY DESCRIPTION                                                          

            Urban Renewal District Legal Description                                                                  

            Urban Renewal District Map                                                                                        

 

3.       PROPOSED DEVELOPMENT ACTIONS                      

 

            General                                                                                                                       

 

            Phase One (1)                                                                                                                       

           

Conformance With State And Local Requirements                                                   

 

            Participation Opportunities                                                                                       

 

            Opportunities for owners and tenants                                                                         

           

            Property Acquisition                                                                                                    

 

            Property Management                                                                                                 

 

            Relocation of Businesses, Persons and Others                                                 

 

            Disposition and Development Agreements                                                                 

                        Agency Commitments                                                                          

                        Developer Commitments                                                                          

 

4.       USES PERMITTED IN PROJECT AREA                                     

 

            Comprehensive and Urban Renewal Plans                                                               

 

            Designated land uses of the Comprehensive Plan                                                     

                        Regional / Community Commercial / Office                                                  

                        Public rights-of-way                                                                                       

                        Interim uses                                                                                                     

                        Nonconforming uses                                                                                       

 

            General controls and limitations                                                                                

                        Construction                                                                                                    

                        Rehabilitation and retention of property                                                          

 

5.          PROJECT FINANCING METHODS                                             

           

            General Description Of Financing Methodology                                                   

 

            Bond Anticipation Notes                                                                                      

 

            Tax Increment Funds                                                                                                  

 

            Loans And Grants                                                                                                      

                        Community Development Block Grants                                                   

                        Local Improvement Districts                                                                                   

                        Loans And Advances                                                                                     

                        Tax Increment Guarantees                                                                              

                        Certificates Of Participation                                                                            

                        Joint Powers Authority                                                                                 

                        63-20 Debt                                                                                                    

 

6.       TAX ALLOCATION DISTRICT AND AFFECTED AGENCIES                

 

            Tax Allocation District Legal Description                                                                  

            Affected Agencies

            Tax Allocation District Map                                                                                                    

         

7.       ACTIONS BY THE CITY COUNCIL                                      

 

8.       ENFORCEMENT                                                                      

 

9.       DURATION OF THE PLAN                                                                  

 

10.      PLAN AMENDMENT PROCEDURES                                        

 

11.     TAX FEASIBILITY STUDY                                                              

 

12.     APPENDIXES                                                                             

 

 

            1.            Appendix A            (Project Costs)                                                                                               

 

 

2.            Appendix B            (IDAHO CODE SECTION 50-2008)                                                  

 

 

            3.            Appendix C            (NOTICE OF PUBLIC HEARINGS)                                      

                                               

 

4.            Appendix D            (Resolution No. 91-11)                                                      

                                               

 

            5.            Appendix E            (Resolution No. 02-XX)                                                    

                                                Agency Adoption of Plan

 

            6.            Appendix F            (Resolution No. 02-XX)                                                    

                                                Establishing Plan & Increment Area

 

            7.            Appendix G            (Ordinance No. 02-XX)                                                    

 

RIGGINS URBAN RENEWAL AGENCY 2006

 

CHAIR:    Bob Crump

 

VICE-CHAIR:     Larry Barnard

 

TREASURER:   Tom Anderson             

 

RIGGINS

URBAN RENEWAL PLAN

 

 

INTRODUCTION:

 

Riggins is located in a spectacular setting in the Salmon River Canyon, at the confluence of the Main and Little Salmon Rivers, adjacent to the Nez Perce National Forest and Hells Canyon National Recreation Area. It lies in southwestern Idaho County, in north central Idaho. The

county is the largest in Idaho, and the fourth largest in the United States, covering 8,503 square miles, 83% of which is public land.

 

Riggins was geographically isolated until 1937 when a north-south highway (U.S. 95) was completed from Bonners Ferry to Boise. Positioned on Highway 95, Riggins is 41 miles south of Grangeville (Idaho County seat), and 160 miles north of Boise (state capitol). Riggins is a resort and ranching community with a colorful past. Mining gave the area its economic beginning in the late 1800s, and contributed sporadically to the area's economy throughout its developing years. The early mining towns attracted gold seekers, while the Homestead Act of 1862 influenced families to settle and entrepreneurs to establish businesses. Many who had come to Idaho County to search for gold remained to take up agriculture, finding their gold in the rich soil and favorable climatic conditions.

 

By the late 1800s, agriculture was a primary industry. While local sawmills were producing lumber chiefly for home building, it was the huge demand for timber after World War II that made lumber production a leading industry and an economic asset to the area. In 1982, the sawmill in Riggins burned to the ground, eliminating the area's largest employer. When it became apparent that the mill would not be rebuilt due to inadequate and declining sales of timber from the national forests, community leaders focused on tourism to sustain the economy. Today Riggins is a year-round recreation destination, and a convenient stopping place for north-south travelers in Idaho. The Riggins area increasingly attracts outdoor recreation enthusiasts, former residents for return visits, and pass-through scenic travelers.

 

Key attractions in Riggins and the surrounding area include:  Outdoor recreation: whitewater rafting, kayaking, and jet boating; fishing for steelhead, salmon, trout, small mouth bass

and sturgeon on the Salmon River; hunting for upland game birds, elk, deer, black bear, cougar and wild turkey; hiking and horse packing in the Nez Perce National Forest and the Frank Church Wilderness and Hells Canyon.

 

Riggins’s proximity to Boise, and the recreational centers of McCall and Donnelly, Idaho, makes it a prime location for residential development, serving as a rural recreational community to larger metropolitan areas. Riggins is also renowned around the world as a white-water Mecca, drawing thousands of boaters to the city annually. Boise has a market population of 400,000, Idaho Falls 150,000, and Pocatello 130,000, many of whom seek the recreational opportunities seen in Riggins.

 

The City of Riggins contains a mixture of commercial development, vacant lots, and lots that are underused or contain unsightly conditions.  Commercial development has mainly occurred along Highway 95. This increase in growth and development has been realized in recent years. Unfortunately, the capacity of the city’s infrastructure has not kept pace, and is in need of upgrade.  This includes expanding the capacity of the city’s wastewater facility, and water reservoir. 

 

In addition, a recreational community should focus visitors’ attention on their greatest asset, which is the Salmon River. For this reason, to boost its economic base, the city needs to make upgrades to its parks and walking trails along the river.

 

In April 2006, community leaders developed five Goals for Economic Development. The leadership of Riggins recognizes the importance of developing a strategic plan to address key economic development issues, create an environment for successful business investment, and ultimately increase the community’s standard of living. The main theme of the Plan is to facilitate efforts community-wide among private and public partners to accomplish important goals for securing the economic future of the community. The goals have been identified to achieve successful community stability and quality of life. These goals have resulted from a synthesis of ideas about the community’s position in the marketplace, local strengths and challenges, potential opportunities, and residents’ feelings about the future. In several ways, these goals embrace the “Areas of Interest” prioritized by community members for achieving their potential:

 

Goal 1: Seek opportunities to enhance business support services and encourage new business development.

Goal 2: Address deficiencies in community infrastructure to support residences and businesses.

Goal 3: Improve recreation facilities to enhance quality of life and tourism opportunities.

Goal 4: Enhance community services to improve quality of life for residents.

Goal 5: Coordinate a strategic marketing program to increase year-round tourism, retiree attraction and business development.   

 

These goals that will be addressed via The Urban Renewal Plan. It describes the project area and improvements, how those improvements will be funded and outlines the powers, duties and obligations of the Riggins Urban Renewal Agency (the Agency).  This plan, by way of adopted ordinance, establishes the Riggins Urban Renewal Area and Tax Allocation District, approximately 800 acres.  The City has commissioned an economic feasibility study, which includes a fiscal impact statement.  The economic feasibility study focuses on all aspects of the entire District, and aspects directly related to the project area.  It is the intention of the Agency for much of the costs incurred by this plan to be funded by tax allocation financing, for a period not to exceed ten (10) years.

 

The Riggins Urban Renewal district is proposed under the deteriorated urban renewal law.   For instance, a phasing plan in these types of districts are usually unfeasible as improvements made in one part of the district, may provide benefits to another area of the district, by reducing traffic congestion, improving safety, and reducing unfavorable items such as vacant lots, crime, and poor public utilities, for example.  This generally requires that the entire urban renewal district be adopted as a tax increment district because of interrelation of improvements and benefits with a deteriorated urban renewal district, and the inability to predict what areas exactly will benefit from an improvement made in a deteriorated urban renewal district.

 

DETERIORATION DEFINED

 

Under Idaho Local Economic Development Act (Municipal Corporations Code, Sec. 50-290 et. seq.) the city council must find and determine, on the basis of substantial evidence in the record, the project area as a “deteriorated area” (when adopting an ordinance approving and adopting Urban Renewal plan for a project area).  The purpose of this chapter is to present the conditions of deterioration as set forth in the Local Economic Development Act (LEDA), to show how such conditions relate to categories of being deteriorated, and to provide examples of the types of data to illustrate and substantiate the various conditions of deterioration.

 

The LEDA defines a deteriorated area as an area which is characterized by one or more of the conditions set forth in Sections 50-2903(7), which conditions cause a reduction or lack of, proper utilization of the area and place a burden on the community which cannot reasonably be expected to be reversed or alleviated by private enterprise acting alone.  Section 50-2903(7) of the LEDA reads as follows:

 

“(7)(a)            Any area, including slum area, in which there is a predominance of buildings or 

improvements, whether residential or nonresidential, which by reason of dilapidation, deterioration, age or obsolescence, inadequate provision for ventilation, light, air, sanitation, or open spaces, high density of population and overcrowding, or the existence of conditions which endanger life or property by fire and other causes, or any combination of such factors, is conducive to ill health, transmission of disease, infant mortality, juvenile delinquency, or crime, and is detrimental to the public health, safety, morals or welfare.

(b)               Any area which by reason of the presence of a substantial number of deteriorated or deteriorating structures, predominance of defective or inadequate street layout, faulty lot layout in relation to size, adequacy, accessibility or usefulness, unsanitary or unsafe conditions, deterioration of site or other improvements, diversity of ownership, tax or special assessment delinquency exceeding the fair value of the land, defective or unusual conditions of title, or the existence of conditions which endanger life or property by fire and other causes, or any combination of such factors, results in economic underdevelopment of the area, substantially impairs or arrests the sound growth of a municipality, retards the provision of housing accommodations or constitutes an economic or social liability and is a menace to the public health, safety, morals or welfare in its present conditions and use.

 

(c)            Any area which is predominately open and which because of obsolete platting, diversity of ownership, deterioration of structures or improvements, or otherwise, results in economic underdevelopment of the area, or substantially impairs or arrests the sound growth of a municipality.  The provisions of section 50-2008(d), Idaho Code (see Appendix A), shall apply to open areas. 

 

(d)            Any area which the local governing body certifies is in need of redevelopment or rehabilitation as a result of a flood, storm, earthquake, or other natural disaster or catastrophe respecting which the governor of the state has certified the need for disaster assistance under any federal law.

 

(e)            Any area which by reason of its proximity to the border of an adjacent state is competitively disadvantaged in its ability to attract private investment, business or commercial development which would promote the purposes of this chapter.”

 

Information presented in the deteriorated section of the plan is divided in two divisions, which address the broad categories prescribed by the law.  Appropriate headings for these major divisions are:  “Existing Social Conditions”, and “Existing Economic Conditions”.  Within these major divisions, subheadings are used, to the extent applicable to the particular project area.

 

 

IDENTIFYING DETERIORATED AREAS

 

1.            Existing Social Conditions

 

A.            Unsafe and hazardous traffic and pedestrian conditions exist which endanger life, buildings and structures having conditions which are unfit or unsafe to occupy, resulting from,

 

                        I.            Inadequate and Unsafe Public Rights of Way

 

·        Surfacing of roadways in deterioration

·        Narrow roadways

·        Partially paved streets

·        Partially completed rights-of-way

·        Unpaved streets

·        Uncompleted (dead end) rights of way

 

II.            Dilapidation or Deterioration

 

·        Structural conditions of buildings and poor site conditions in comparison to remainder of City

 

                        III.            Age or Obsolescence

 

·        Age of buildings

·        Obsolescence is mainly applicable to industrial and commercial buildings where size, layout, or other original design features may no longer be appropriate to current uses.

 

2.            Existing Economic Conditions

 

A.            Public Rights of Way, Buildings, Structures, and Conditions as described previously which result in economic underdevelopment of the area.

 

I.                    Inadequate and sub-standard traffic movements and flow

·        Streets, sidewalks, curbs, gutters non existent or in disrepair

·        Poor traffic circulation 

·        Street lighting non existent or in disrepair

                        II..            Substantially impairs or arrests the sound growth of a municipality.

 

                                    a.  Inadequate public improvements

·        Public improvements should be surveyed to determine adequacy/inadequacy by using the following factors:

 

ü      poor physical condition

ü      age

ü      deterioration

ü      improper design

ü      lack of sufficient capacity

ü      total absence of improvement in face of demonstrable need.

 

                                    b.  Inadequate Public Facilities -

                                         Need to be evaluated as in “a” (above)

 

·        Parks

·        Parking Facilities

·        Pedestrian/biking Trails

 

                                    c.  Inadequate Utilities -

                                         Should be evaluated as in “a” (above)

 

·        Water processing and distribution facilities

·        Gas

·        Electrical (above ground/underground)

·        Cable television

·        Telephone

·        Sewerage treatment facilities

·        Sewers, storm drains

 

                        III..            Retards the provision of housing accommodations or constitutes an economic or social liability                                          and is a menace to the public health, safety, morals or welfare in its present condition and use.

 

                                    a.  Shifting of uses

 

·        Rapid changes in tenants within commercial structures (this week a thrift store, used furniture the next week)

·        Conversions to uses other than the original use (service station converted to fast food operation)

 

                                    b.  Prevalence of depreciated values

 

                                    c.  Prevalence of impaired investments

 

An “impaired investment” is a rented or leased commercial, industrial or residential property on which the values or the return on the owner’s equity are diminished or have stopped altogether, and/or the equity itself is in danger of being partially or totally lost.  These conditions are evidenced by:

 

 

·        Decline in gross sales or gross rents.

·        In ordinate increases in expenses due to circumstances existing in the area (such as higher insurance costs, inability to obtain insurance at all or higher costs for security protection)

·        Increasing vacancy rates

·        Inability to sell properties at reasonable prices

·        Inability to obtain loans to maintain, rehabilitate or expand

·        Increased public safety related issues

 

                                    d.  Prevalence of economic maladjustment

 

·        Business failures and move-outs

·        Declining employment figures

·        Increasing unemployment

·        Vacant stores, and buildings

·        Declining business registrations.

·        Declining property tax revenues and increasing police

and fire services

·        Declining sales taxes or stagnation of same

·        Inability of property owners to bear special assessments

·        Low incomes of residents

 

f.  Existing land uses inappropriate to needs of businesses, industries and residents of city.

 

·        The existence of vacant or partially vacant buildings of recent construction

·        The existence of unused or unique facilities of marginal need or usefulness

·        Lack of expansion area

·        Lack of proper access for customers & deliveries

·        Lack of transportation facilities

·        Lack of adequate parking

·        Lack of necessary utilities (water, power)

·        Improper zoning

3.            Other Factors

 

The conditions of deterioration affect the entire project area.  Non-blighted properties have been included because their inclusion is necessary for effective redevelopment.

 

RIGGINS URBAN RENEWAL DISTRICT Metes & Bounds Description

 

A tract of land located in Sections 10, 11, 14, 15 and 22, T24N R1E, Boise Meridian, City of Riggins, Idaho County, Idaho, consisting of the following Idaho County Assessor Tax Numbers:

 

CITY OF RIGGINS

 

Tax # 31          Tax #90           Tax #152

Tax #230         Tax #233         Tax #140

Tax #217         Tax #111`        Tax #272

Tax# 96           Tax #97           Tax #109

           

Riggins Original Township, Block 2, Lots 3,4,6,7; Block 3, Lots 2,7 and portions of 1,5,6

Chukar Point Subdivision:  Lots 1,2,3,4,5,7,8,9,11

North Riggins Addition, Block D, Lots 1,2

Smith Subdivision:  Lot 8

 

 

IDAHO COUNTY (In Annexation Process)

Tax 62             Tax #162         Tax #94

Tax #112         Tax 145

 

 

Non-TAX PUBLIC PROPERTY

 

City of Riggins, Tax #207, #208, #248, #150,  #166, #18, #81

USFS-NRA Tax #238

School Dist #241 Tax #125, #126, #153, #20, #25

IOOF Tax #85, #247  

State of Idaho Tax #19

US Highway #95

City of Riggins Streets:

 Ace’s Place, Salmon River Drive, MacArthur Avenue,

             North Street, Berger Street, Salmon Street, Well Street, Chukar Lane

 

RIGGINS URBAN RENEWAL DISTRICT

 

                PROPOSED BOUNDARIES

                   DRAWN IN YELLOW

 

 

PROPOSED DEVELOPMENT ACTIONS:

 

General

 

The major objective of this urban renewal plan is to provide traffic improvements and other public improvements, which implement the goals of the Riggins Urban Renewal Agency (URA), and the City.  The URA has established goals for the proposed area, which are as follows:

 

A.        Re-design and improve existing streets in the district, including redesigning intersections, widening of roadways, signalization, and pedestrian access 

B.         Encourage and assist the development of new businesses and residences in the area.

C.        Provide the necessary infrastructure support for the attraction of new     business.

D.        Rehabilitate existing vacant lots that have become collection points for junk.

 

The proposed projects, by highest priority, include:

 

  • Riggins Sewer System Upgrade and Expansion

 

  • Water System Improvements and Expansion

 

  • Emergency Services Improvements and Equipment

 

  • Off-Street Parking

 

  • Parks and Recreation

 

As shown, the City of Riggins is also confronted by several major impediments in generating economic vitality.  In promoting the Riggins Area to developers (within the city itself as well as to those entities who are looking to relocate, expand or startup) the URA and the City recognize that these impediments do exist and where possible, eliminate or mitigate them. These impediments include but are not limited to the following:

 

A.        Inadequate and unsafe public rights-of-way

B.         Lack of traffic circulation

C.        Lack of infrastructure

D.        Lack of maintenance of public & private property - blight

E.         Lack of amenities

F.         Business closures

G.        Lack of open space (parks and recreation)

H.        Inaccessible to pedestrians - unfriendly

I.          Low development densities

J.          Lack of commercial diversity

K..       Lack of fire protection capital assets

 

This plan cannot overcome all the impediments listed above, but if the aforementioned goals are achieved the economic vitality of the Riggins Area will be greatly enhanced and will eliminate or minimize most of them.  Given the lack of infrastructure and amenities in the Riggins area it is financially feasible to achieve all the objectives within a ten (10) year time frame. The plan is therefore broken down into a one (1) phase description.

 

  1. Riggins Sewer System Upgrade and Expansion

 

 

Below are the overall costs with this project as identified in appendix A of the Riggins Urban Renewal Plan. 

Site Improvement Costs                                                $2,400,000

 

  1. Water System Improvements and Expansion

 

Below are the overall costs with this project as identified in appendix A of the Riggins Urban Renewal Plan. 

Site Improvement Costs                                                $375,000

 

  1. Emergency Services Improvements and Equipment

 

Below are the overall costs with this project as identified in appendix A of the Riggins Urban Renewal Plan. 

Site Improvement Costs                                                $355,000

 

  1. Off-Street Parking

 

Below are the overall costs with this project as identified in appendix A of the Riggins Urban Renewal Plan. 

Site Improvement Costs                                                $202,000

 

  1. Parks and Recreation

 

Below are the overall costs with this project as identified in appendix A of the Riggins Urban Renewal Plan. 

Site Improvement Costs                                                $552,000

 

 

OVERALL PROJECT GRAND TOTAL:               $3,884,000

 

 

 

Conformance With State And Local Requirements

 

The proposed redevelopment as proposed in this plan conforms to the Comprehensive Plan for the City of Riggins, which was adopted by City Council.  This plan was reviewed by the Riggins Planning and Zoning Commission, stating that this plan is in conformity with the Riggins Comprehensive Plan.

 

Property Acquisition

 

Pursuant to State Code Section 50-2007 the URA may acquire (by purchase, lease, option, gift, grant, bequest, devise, eminent domain or otherwise) real property to hold, improve, renovate, rehabilitate, clear, or prepare such property for redevelopment. Absent the consent of the property owner, the URA will not acquire any property, which will not require modification or the imposition of restrictions.  In conjunction with the acquisition of a site, the URA shall accomplish the relocation of existing businesses and tenants.

 

Property Management

 

The URA may convey property it has acquired for less than market value. The URA may clear or move buildings, structures or improvements from any real property acquired, and the URA may develop a building site by constructing streets, utilities, parks, playgrounds and other public improvements in order to carry out the urban renewal plan. The URA may acquire land or other public improvements and construct facilities within and/or outside the plan area if it can determine that the improvements are of benefit to the plan area.  However, the URA shall not pay for maintenance or operation of said improvement.

 

Relocation Of Businesses, Persons And Others

 

If as a result of pursuing this plan individuals, families, businesses, non-profit organizations or others are required to relocate, the URA shall prepare a plan for the relocation of same. The URA shall be responsible to assist those individuals and entities in full accordance with state and federal statutes, including finding a new location and providing relocation payments.

 

Disposition And Development Agreements

 

The Disposition and Development Agreements (DDA) are the legal documents that form Public/Private partnerships.  They are used by the URA when entering into an agreement with a private developer for a specific project.  The list below is merely illustrative and not all inclusive and does not prevent the Agency from including, or excluding any or some of the commitments:

 

1.         The Agency’s Commitments

 

a)         What it will do:

·        site acquisition

·        site improvements

·        parking

·        off site improvements, etc.

 

b)                  Determines how much the public investment is, and

how it will be financed

 

2.         The Developer’s Commitments

 

a)         A specific development concept:

·        mix of uses

·        building size

·        number of parking spaces

·        quality of development, etc.

 

b)         Payments to the Agency, which can be in the form of :

·        payment for fee simple sale of land

·        land payment for ground lease

·        lease payments for public facilities

·        commitments towards paying other sources of public financing, such as special assessment bonds

·        participation - percentage of future cash flows

·        loans and advances

·        tax increment guarantees

 

c)         Firm time schedules and contingencies affecting the timing

 

d)         Agreement to operate (e.g. Hotel) for a minimum number of years

 

USES PERMITTED IN PROJECT AREA:

 

Comprehensive And Urban Renewal Plans

 

The primary objectives for the Urban Renewal Agency are to improve the quality of life, bring economic vitality and improve the aesthetics of the Riggins area through development and redevelopment.  There are two (2) differing sets of land use issues involved in this plan . The first set of issues deal with the designated or planned land uses of the comprehensive plan and the second set of issues revolve around existing non-conforming land uses, meaning uses which don’t conform to the planned uses in the comprehensive plan.

 

Designated Land Uses Of The Comprehensive Plan

 

The Urban Renewal District land uses are consistent with the Generalized Land Use Map of the Riggins Comprehensive Plan.  If the necessary resources are available, the Urban Renewal Agency will assist any project that desires support, but that project must be consistent with this urban renewal plan and the comprehensive plan of the city. The following is a list of the land uses in the Urban Renewal Plan as it is described in the comprehensive plan. All proposed uses must comply with the appropriate land use designation in which it will be located.

 

Regional / Community Commercial / Office:

Most commercial properties are found in the urban renewal plan area along Highway 95.  The function of this area is to provide regional, local and tourist needs in readily accessible locations. Existing compatible land uses within the plan area consists of a mixture of office, retail and service commercial uses as well as vacant properties.

 

Public Rights-Of-Way:

With few exceptions, most of the public rights-of-way in the area are deficient in terms of development and are poorly maintained. Curbs, gutters and sidewalks are practically non-existent, except where Highway 95 is located.  Street infrastructure is inadequate and is a major drawback to most kinds of beneficial development.

 

Interim Uses:

There may be a need for the temporary use of vacant properties and/or structures within the plan area. If these uses are to be supported and/or assisted by the Urban Renewal Agency, they shall be compatible with the current land use designations of the comprehensive plan.

 

Non-Conforming Uses:

Uses which do not conform to the Riggins Urban Renewal Plan and/or the City of Riggins Comprehensive Plan and/or zoning map are not eligible for support or assistance from the Urban Renewal Agency.

 

 

 

 

 

General Controls And Limitations

 

Construction:

All construction which is funded or partially funded by the Urban Renewal Agency as a part of this plan will be required to meet all applicable city and state specifications. In addition, each project must meet any requirements made by the URA as a condition of assistance. Such requirements may be in the form of additional performance and development standards. Construction may be by the Agency independently, or in conjunction with any other public agency.

 

Rehabilitation And Retention Of Property:

Rehabilitation of dilapidated commercial structures is an objective of the URA, in as much as the use of the structure complies with the plan and revenues available for assistance. Except in extenuating circumstances, ownership retention will always be a priority for most projects undertaken by the URA.

PROJECT FINANCING METHODS:

 

General Description Of Financing Methodology

 

State law provides that urban renewal agencies have the power to finance urban renewal (redevelopment) activities and related costs. Agencies can issue both short and long term debt with existing and projected revenues. The debt of an urban renewal agency can be it’s own, or, it can include any assignments of revenues from others.  For the most part, urban renewal agencies utilize tax increment financing (TIF) as the financing tool.  However, Government Code Section 50-2007(f) allows other financing mechanisms, as well.  The following. are merely illustrative, and is not an all inclusive list, nor do they bind the Urban Renewal Agency to use one or any of the following financing mechanisms:

                                    1.         advances

                                    2.         loans

                                    3.         grants

                                    4.         contributions

                                    5.         any other form of financial assistance from public or private                                                        sources

 

Bond Anticipation Notes

 

Bond Anticipation Notes (BANs) are utilized when an agency needs to raise higher levels of financing than possible with a standard financing mechanism. The basic assumption of BAN financing is that tax increments will grow substantially over several years, due in part or whole to the application of the BANs funding to agency programs, and the agency will subsequently be able to afford a standard financing to refinance the BANs when the whole principal balance becomes due. BANs will typically have interest only payments for the short duration of the financing term, with all principal coming due in anticipation of a fully amortized standard bond financing that will refinance or take out the BANs.

 

BANs can raise substantial capital in advance of tax increment generation and project development. These notes can provide funding which can encourage private development in the early stages of the project when “seed” capital is needed most.

 

The customary BAN structure calls for the forecasting of tax increment revenues several years into the future, making an assumption about what interest rates will be at the end of the forecast / finance period, and then issuing short (two to three year) to medium (four to six year) notes. The financing program anticipates that the notes will be fully amortized standard bonds when the notes mature.  Ban financing often includes a large component of capitalized (prepaid from note proceeds) interest, as the agency can typically not support full interest payments on the notes with tax increment funds. Thus, for $100.00 of program funding, a BAN financing will require two sets of costs of issuance (both the BAN and permanent bond financing) totaling approximately $7.00 per hundred, plus at least $20.00 per hundred of capitalized interest. When the takeout bonds are issued, the agency will be borrowing over $127.00 (plus reserves) to pay for $100.00 of initial project funding.

 

Despite the higher financing costs, in a relatively stable legal, political and financial climate BANs can prove to be quite effective.

The URA can borrow substantial additional funds compared to a standard financing mechanism and after investing these funds in project improvements, cause further tax increment revenue growth. The concept is an attractive and convenient one that answers the problems facing any project area.  Subsidies and public investment are needed up front to spur development that generates tax increment within twelve to eighteen months following construction.

 

The risk is straight forward - if the tax increment does not grow as projected and is not adequate to support a standard financing to take out the BAN when it comes due, the agency faces a number of unpleasant choices, including borrowing funds from the city to help retire the note debt, rolling the BAN with a second BAN issue, or default. The typical option utilized is to roll the BAN in the hope that revenues will be high enough when the second issue of BAN matures to take out the note permanently.

 

The accuracy of the tax increment forecast is absolutely critical to the success of the program, market / interest rate fluctuations are also a significant variable, and the ability to “take-out” the BAN with bonds is subject to legal and political factors which are beyond the control of the URA. A successful BAN financing must take these variables fully into account.

 

A taxable BAN which is to be taken out with taxable bonds make more sense than tax-exempt notes because one of the primary risks, alterations of the tax law, is essentially removed.  Because taxable financing is typically utilized as bridge financing, waiting for private repayments, the short term nature of a BAN can be most effective.

 

Tax Increment Funds

 

Tax increment financing is the principal method of financing the public costs of redevelopment. “Ad Valorem” property taxes generated from the increase in assessed valuation of property values, created by new development within a specified project area, is the major source of tax increment revenue. The assessed valuation at the time of adoption of the urban renewal plan becomes the base year value and is frozen at that level for the purpose of distribution of taxes to the various affected taxing entities. Each fiscal year, following the adoption of an urban renewal plan, the taxes generated by the assessed valuation that exceeds the base year level (known as tax increment) is paid to the urban renewal agency. The URA in turn utilizes these funds for the repayment of debt incurred by the URA in connection with redeveloping the project area.

 

When an urban renewal project is approved, there isn’t any tax increment immediately available to the agency. The fiscal year following the adoption of the project there is an opportunity for some tax increment to be generated, but only if the assessed valuation of the area has increased from the prior year.

 

Normally very little funding is available within the first few years of a project. Therefore, funding for the initial cost of a project and the costs of implementation must be provided from other sources. Many times the city will loan funds to the URA, or provide the capital improvements in the project area with the URA agreeing to reimburse the city when the agency receives its revenues.

 

In other situations, a developer may loan the agency the necessary startup funds. If there is a property owner or a developer who desires to build a project in an urban renewal area, the developer may loan the agency funds for both the startup costs as well as the capital improvements.  A portion, or all of the funds advanced would be repaid by the agency pursuant to an agreement with the developer.

 

Loans And Grants

 

Community Development Block Grants:

The Community Development Block Grants (CDBG) program replaced a number of specific aid programs (such as the former federal Urban Renewal program) to allow local communities broader discretion in the administration of community development funds. Eligible activities include acquisition of property, clearance and demolition, relocation, public facilities and historic preservation. The funds must be targeted to specific areas to benefit low and moderate income persons or to eliminate slums and blight. CDBG funds are widely used throughout the state for economic development and senior facilities.

 

Local Improvement Districts:

Local Improvement Districts (LID) have been used to fund public improvements that benefit private development. LID’s place upon the benefited property the costs which are not borne by the urban renewal agency (or city). The State of Idaho has determined that LID’s are a legal means for the city to fund such improvements. Formation of an LID requires the approval of a majority of the property owners in the affected area. The costs of the improvements are determined, and each property is assigned its prorata share. The LID expenses are paid off via the tax rolls over a predetermined period of time (usually 15 to 20 years).

 

Loans and Advances:

The URA may borrow funds for a project from the city or a lending institution.  The drawback being the rate of interest.  In addition, developers may advance or loan working capital to urban renewal agencies for preliminary redevelopment activities. Generally the developer is at risk with these advances and will be repaid only if the project goes forward.

 

Tax Increment Guarantees:

The willingness, or ability, of an urban renewal agency to incur project financial obligations for a specific development may be based on a projection that the development will produce tax increments in a certain amount, within a definite period of time. As an inducement to the urban renewal agency to proceed with its part of the development activities, such as paying for the costs of public facilities to serve the development, a developer may agree to guarantee to the URA the receipt of tax increments from the development in the amount and by the time projected.

 

Certificates Of Participation:

Certificates of Participation (COP’s) provide long term financing through a lease with an option to purchase, (also called a conditional sale agreement). This financing method is used for long term financing of major projects such as public facilities, parking garages, and recreational activities. 

Where applicable, this financing method can also be used to finance the acquisition of motorized equipment, communications equipment, computers, and other major items of equipment.

 

 

 

 

When a public sale of a lease, or COP’s in a lease, is planned the principle parties include:

                        1.         The public agency

                        2.         A bank, financial institution or lender (buys the present value of                                      future lease payments)

                        3.         Purchasers or investors (purchase the COP’s)

                        4.         A trustee (holds security for payment of lease - if any)

                        5.         An escrow agency (the trustee may also be the escrow agency)

 

Lease agreements are for one year at a time resulting in the COP’s commanding a higher interest rate. The URA would also have to comply with state public bidding for construction laws, usury and legal interest rate laws authorizing the lease and disclosure requirements.

 

Joint Powers Authority:

By agreement multiple public entities with common powers may form a Joint Powers Authority (J.P.A.) when it is to the advantage of those agencies to consolidate their forces to construct a public use facility or issue debt for public purposes that when done separately would be less advantageous. A joint exercise of power agreement must be approved by the participating entities in order to utilize a J.P.A.  The security of any issue of a J.P.A. will depend upon the existing or projected cash flows, reserves, and other capital resources of the participating agencies and the approved obligations of each agency. In some cases it may be advantageous for the URA to form a J.P.A. before debt obligations are approved by the individual agencies.


63-20 Debt:

States and political subdivisions are authorized, under federal tax law, to issue obligations, the interest on which is exempt from federal income taxation (“Tax-exempt bond”).  Each state has statutes and administrative rules that outline the terms under which tax-exempt bonds may be issued.  There are circumstances, however, when a political subdivision would prefer not to issue bonds for a project.  These reasons may be legal, practical or political.  A facility may qualify for tax-exempt financing, because of its use by a governmental entity; nevertheless, the governmental entity elects not to finance the project with its own tax-exempt bonds.  An alternative method of obtaining tax-exempt financing is available under the Internal Revenue Code.  This method of financing is commonly referred to as “63-20” financing.  The term “63-20” comes from the Department of Treasury Revenue Ruling which first described and authorized this type of tax-exempt financing (in 1963).

 

In a 63-20 financing, a nonprofit corporation may issue tax-exempt debt for the purpose of financing facilities as long as certain requirements are met.  The most well-known requirement is that title to the facilities must be transferred to a governmental entity when the debt is retired.  Interest on 63-20 debt is exempt from federal income taxation.  Therefore, the cost of capital is, lower than it would be in the conventional capital markets. 

 

Historically, 63-20 debt was primarily used for nonprofit corporations, qualified under Section 501(c)(3) of the Internal Revenue Code, to access the tax-exempt bond market.  63-20 debt is sold as tax-exempt bonds generally in the same financial markets as governmental tax exempt bonds.  The interest rates may be comparable, depending upon the credit strength of the collateral security.

 

If the financed facility is leased to an entity other than the nonprofit issuer of the debt, the tenant is required to be either a governmental entity or a charitable organization.  An underwriter may underwrite long term (20 years or more) bonds issued by the nonprofit corporation.  The credit support of the bonds may derive from the lease of the facility to the governmental agency.  The bonds may be issued on a non-recourse basis to the nonprofit corporation, i.e., the bonds would be secured solely by lease revenues.  In a non-recourse financing, the owners of the bonds would have no recourse against any other assets of the corporation.

LEGAL DESCRIPTION

 

URBAN RENEWAL DISTRICT

 

 

THE TAX ALLOCATION DISTRICT FOR THE RIGGINS URBAN RENEWAL PROJECT AREA AS DEFINED BY THE FOLLOWING DESCRIBED BOUNDARY:

 

A tract of land located in Sections 10, 11, 14, 15 and 22, T24N R1E, Boise Meridian, City of Riggins, Idaho County, Idaho, consisting of the following Idaho County Assessor Tax Numbers:

 

CITY OF RIGGINS

 

Tax # 31          Tax #90           Tax #152

Tax #230         Tax #233         Tax #140

Tax #217         Tax #111`        Tax #272

Tax# 96  Tax #97  Tax #109

               

Riggins Original Township, Block 2, Lots 3,4,6,7; Block 3, Lots 2,7 and portions of 1,5,6

Chukar Point Subdivision:  Lots 1,2,3,4,5,7,8,9,11

North Riggins Addition, Block D, Lots 1,2

Smith Subdivision:  Lot 8

 

 

IDAHO COUNTY (In Annexation Process)

Tax 62             Tax #162         Tax #94

Tax #112         Tax 145

 

 

Non-TAX PUBLIC PROPERTY

 

City of Riggins, Tax #207, #208, #248, #150,  #166, #18, #81

USFS-NRA Tax #238

School Dist #241 Tax #125, #126, #153, #20, #25

IOOF Tax #85, #247  

State of Idaho Tax #19

US Highway #95

City of Riggins Streets:

 Ace’s Place, Salmon River Drive, MacArthur Avenue,

             North Street, Berger Street, Salmon Street, Well Street, Chukar Lane

 


Affected Agencies

 

The following is a list of agencies which are affected by the “Riggins Urban Renewal Plan”.

 

  1. Idaho County
  2. City of Riggins
  3. School District 241
  4. Riggins Cemetery
  5. Syringa Hospital

 

Recent changes in Idaho tax law have (excepting urban renewal agencies and school districts) have neutralized the drawbacks to the creation of Tax Allocation Districts and Urban Renewal Districts.  Currently, public agencies budgets are restricted to 3% annual growth from property taxes.  At the end of a project’s life, the tax increment generated was divided among the above-mentioned agencies in accordance to their respective agency’s property tax levy rates. With the current laws in effect, the tax increment is now used to lower property tax rates resulting in benefiting the property tax payers with no provision for assisting the impacted agencies. Public agency budgets are not benefited by property taxes generated from new development; but neither are they hurt by the formation of a Tax Allocation District for an Urban Renewal Agency.


RIGGINS URBAN RENEWAL DISTRICT

 

                PROPOSED BOUNDARIES

                   DRAWN IN YELLOW

ACTIONS BY THE CITY COUNCIL:

 

The City shall aid and cooperate with the URA in carrying out this plan and shall take all actions necessary to ensure the continued fulfillment of the purposes and objectives of this plan. The City shall assist and support the URA in preventing and eliminating the spread and/or recurrence of conditions causing blight in the plan area. Actions by the City shall include, but are not limited to, the following:

 

1.   Institution and completion of proceedings necessary for changes and improvements in private and publicly owned utilities within or affecting the project area.

 

2.   Revising of standards (if necessary) within the project area to permit the development authorized by this plan.

 

3.   Imposition, wherever necessary, through the use of special use permits or other means of appropriate controls within the limits of this plan upon parcels of land within the project area to ensure their proper development and use.

 

4.   Where possible, preservation of historical sites shall have a high priority in achieving development objectives.

 

5.   Performance of the above actions and all other functions and services relating to public health, safety, and physical development normally rendered in accordance with the schedule which will permit the redevelopment of the project area to be commenced and carried to completion without unnecessary delays.

 

6.   If necessary, institution and completion of proceedings for the establishment of a Local Improvement District, or districts under Chapter 17, Title 50, Idaho Code.

 

7.   Administration of Community Development Block Grants and/or other state/federal funds that may be available and are used for the purposes of this plan.

 

8.   The undertaking and completion of any other proceedings necessary to carry out the plan.

 

9.   Appropriate agreements with the URA for administration, supporting services, funding sources, and other similar needs.

 

10. The actions listed above which are to be taken by the City do not constitute any commitment of financial outlay by the City.


ENFORCEMENT

 

The enforcement and administration of this plan, including the preparation and execution of all the documents used for the implementation of the Riggins Plan, shall be performed by the URA and/or the City of Riggins.  The provisions of the Riggins Plan and other documents used pursuant to this plan may also be enforced by court litigation instituted by either the City or the URA.  Remedies include, but are not limited to the following:

 

1.         Specific performance

 

2.         Damages

 

3.         Injunctions

 

4.         Other appropriate remedies

 

DURATION OF THE PLAN

 

The duration of the various segments which make up this urban renewal plan for the Riggins area are as follows:

 

A.     The non-discrimination and non-segregation provisions of this plan shall be effective in perpetuity.

 

B.           Other provisions of this plan shall be effective for ten (10) years from the date of adoption of this plan by the Urban Renewal Agency.

 

C.     The Tax Allocation District and its respective revenue allocation financing shall be in effect for a period not to exceed ten (10) years.

PLAN AMENDMENT PROCEDURES

 

The Riggins Urban Renewal Plan may be further modified at any time by the URA, provided that the modification, if made after disposition of real property by the URA in the plan area, must be consented to by the developer(s) or successor(s) of interest of such real property if their interest is substantially affected by the proposed modification.

 

Where the proposed modification substantially alters the adopted plan, the modifications must be approved by the Urban Renewal Agency Board, the City Planning and Zoning Commission and the City Council in the same manner as the original plan. Substantial changes for Council purposes shall include revisions to the following:

 

1.         Project area boundaries

 

2.         Permitted land uses

 

3.         Land Acquisition

 

4.         Changes to plan objectives

 

Tax Allocation Feasibility Study

For The Riggins Redevelopment Area

 

Executive Summary

The use of the Tax Allocation Financing Provision in the proposed Riggins Redevelopment Area Urban Renewal District is feasible under the existing taxing laws.   Financing of the listed projects is projected by increment received through tax increment financing.

 

The following table shows the dollar amount of improvements for the total Urban Renewal Plan. 

Table 1

Summary of Infrastructure Investment

 

Improvement Phases

Cost

 

 

Wastewater Improvements and Upgrades

$2,400,000

Water System Improvements and Upgrades

      375,000

Emergency Services

          355,000

Off-Street Parking

          202,000

Parks and Recreation

          552,000

Total Project Costs

$3,884,000

 

 Methodology

Tax allocation financing is a method of providing revenue for economic development projects in urban renewal areas.  As part of an urban renewal plan, a revenue tax allocation financing provision is approved.  Within the urban renewal area, a tax allocation area is created.  Within the tax allocation area, a base assessment roll is established which is equal to the assessment rolls for all classes of taxable property as of January 1st of the year the urban renewal plan is adopted; in this case, 2006.  As new investment increases the assessed value within the tax allocation area, the increase in tax revenues is allocated to paying off bonds issued for public improvements.  By using this form of financing, local taxing districts make a short-term sacrifice in receipt of added tax revenues in exchange for a long-term tax revenue increase due to added investment in the urban renewal area.  This is partly mitigated by caps on increases in spending for tax districts.  However, the beneficiaries are taxpayers.  With added revenues and a ceiling on increased spending, the result for taxpayers is a reduction in the levy rate and decreased taxes.

 

To determine the feasibility of a tax increment financing provision for improving the Riggins Redevelopment Area, the first task was to list all properties by parcel number.  Then, for each parcel within the taxing area, the number of acres, market value by category and exemptions were listed.  An inventory of actual land uses was compiled to provide a better understanding of the availability of land for future development and to provide a base for preparation of projections of future use.

 

With a complete inventory of properties and their existing market values, a baseline projection of tax revenues was created.  This projection assumed that growth trends would continue as they have in the past with no sudden increase in investment activity in the area.   Growth rates for each sector were applied to existing land uses and then projected into the future.

Next, a projection of tax revenue was prepared assuming that a tax allocation provision is approved.  This projection assumes a 3% increase in the levy rate of revenue each taxing district (except for the county, because of the impact of new growth throughout other areas of the county) while the bonds are being paid.  It also shows the tax increases that will result when the bonds are paid and the entire tax revenue amount is allocated to reduce tax levy rate.  Part of this measurement determined how long the increment would need to be in place before the first phase improvement project could be financed with a positive cash flow.  Of course, if new investment in the area occurs above the normally anticipated growth, the length of time required to create sufficient revenue decreases proportionate to the amount of new investment.    

 

Determination of feasibility will be made by the City of Riggins in their action to either approve or disapprove the urban renewal plan and the tax allocation provision.  However, a statement of feasibility has been prepared which indicated whether a tax allocation provision is financially feasible.  That statement affirms that the tax allocation provision is financially feasible.

 

Redevelopment Planning Area

 

            Existing Conditions

                        Size and Parcels

The Idaho County Assessor has designated the parcels within the redevelopment area. 

 A complete listing of parcels, their size and use classification is provided in Appendix 1. 

           

Planned infrastructure developments include upgrades to the City’s wastewater and water plants, plus emergency services, off-street parking and parks and recreation.

 

The timing of these improvements depends upon the demand for services in the area and the amount of incremental investment made in the area.  The incremental investment will provide the tax revenue necessary for issuing bonds to pay for the improvements. 

 

In some instances, potential developers may agree to guarantee the City’s incremental investments, so as to expedite the expenditures ahead of the anticipated tax revenues.

            Baseline Build-out Potential

                        Resident Population

Most of the redevelopment area is residential.  It is likely that additional residences will be constructed to complete the residential build-out of previously platted lots, including the large parcel owned by Brown Industries.

                        Industrial Development

There is little demand for industrial development in the area.  Riggins is mostly a residential community, and as such boasts a modest commercial district to serve the population. Therefore, no industrial development is anticipated in the area.

                        Commercial Development

Expansion of commercial uses in the redevelopment area will be included, however.  Current commercial use will likely grow to the area’s capacity by 2017. Also, existing commercial areas will likely be redeveloped to newer structures and more intensive uses during the development period. 

 

 

 

                        Private Sector Investment Potential

A projection of private sector investment (and market value) has been prepared for the build-out of the redevelopment area.  The following table shows the anticipated growth in private sector investment in each economic sector through the year 2015. 

 

Table 2

Riggins Redevelopment Area

Private Sector Investment Growth, 2007 to 2014

 

 

Residential

Commercial

Total

 

 

 

 

2007

6,760,000

1,000,000

  7,760,000

2008

  900,000

0

     900,000

2009

6,440,000

1,000,000

  7,440,000

2010

7,000,000

1,000,000

  8,000,000

2011

9,350,000

1,000,000

10,350,000

2012

5,800,000

1,000,000

  6,800,000

2013

7,400,000

1,000,000

  8,400,000

2014

5,800,000

1,000,000

  6 ,800,000

 

 

 

 

TOTAL

49,450,000

7,000,000

56,450,000

 

Source: Panhandle Area Council

 

                                    Property Tax Generation

As investment occurs in the Riggins Redevelopment Area, additional taxes will be generated.  The following table shows a summary of the tax generation anticipated at normal growth rates within the redevelopment area.  Of course, as new infrastructure investment occurs in the area, the development rate will increase.  However, this projection assumes a normal rate of growth with services provided to support the growth.

Table 3

Riggins Redevelopment Area

Property Tax Generation, 2007 to 2016

 

 

Residential

Commercial

Total

 

 

 

 

2007

        41,727

          6,152

      47,879

2008

        53,432

             0

      53,432

2009

        87,415

         13,573

    100,988

2010

       134,500

         19,215

    153,715

2011

       201,887

         21,593

    223,480

2012

       231,384

         40,832

    272,216

2013

       288,331

         39,318

    327,649

2014

       333,558

         45,485

    379,043

2015

       327,899

         57,858

    385,757

2016

       345,626

         47,047

    392,673

2017

       351,820

         47,976

    399,796

 

 

 

 

TOTAL

    2,397,579

       339,049

 2,736,628

Source: Panhandle Area Council

Job Creation

 

Job creation is estimated based on the acreage growth of the commercial sector that translates into the construction of buildings based on lot coverage ratios.  Using standards for the number of square feet per employee results in an estimate of the number of employees likely to be located within the redevelopment area.  The following table shows the potential job growth:

 

Table 4

HIGWAY 95 Redevelopment

Job Creation and Employment Growth 2007 to 2017

 

 

  Commercial Jobs

 

 

2007

20

2008

 

2009

20

2010

20

2011

20

2012

20

2013

20

2014

20

 

 

TOTAL

140

 Source: Panhandle Area Council

 

Tax Allocation Project Projection

 

The following projection is based on the normal growth rates described in the section above.  Of course, these are merely projections and unanticipated changes in the area or economic growth rates can accelerate or slow down the estimates.  However, they are made with the best available projections from the Idaho State Department of Revenue.  

Improvements will be thoroughly described in the Urban Renewal Plan. These improvements include wastewater and water improvements, emergency services, parking and parks and recreation items.  The timing of these improvements will depend upon the growth in the area and the demand for urban services.  This projection is prepared to describe a scenario based on the assumptions described previously in this report. 

Several assumptions have been made regarding the future.  These assumptions are described in the following paragraphs.

 Levy Rates

It is assumed that levy rates for all taxing districts affected by the Tax Allocation District will increase somewhat, except the county’s, which will remain constant.  Also, based on legislation passed in August 2006, the .004 levy rate for school Maintenance and Operation will no longer be levied, replaced by a 1 cent increase in the sales tax. These rates are shown in the following table. 

 

 

 

 

 

Table 5

Levy Rates

 

Taxing Entity

Rate Per $1,000

Idaho County

.002749899

City of Riggins

.002440895

School District 241

.004477873

Riggins Cemetery

.000080663

Syringa Hospital

.00042061

 

 

Total

.010169940

 

Source Idaho County Auditor

Coverage Ratio

The coverage ratio applied to the Riggins Urban Renewal Project’s Tax Increment Revenues is 115%.  Application of a coverage ratio greater than 100% has the effect of reducing the projected amount of revenue that can be applied to serving the bonds.  Coverage ratios are applied to create a margin of safety should tax revenues fall short of expectations.  In this projection, actual revenue collected is used in the year following the year it was collected.  In this way, actual revenue is accounted for and not the amount available for debt service due to the coverage ratio.    Although the District may issue Tax Anticipation Notes for accrued taxes not yet paid, that funding mechanism is not used in this scenario.

 

In addition, a present value discount of 3% is used in the projections.  This helps to account for the inflationary effects on taxes received.

 

Personal Property Investment

No value is added for personal property (equipment, fixtures, etc.).  This property is also taxed and is subject to the tax increment but has been omitted from the projections to provide an added measure of margin.

 

School Payments

Previous tax law assigned a percentage of new tax increment revenues to the school districts.  That changed in August 2006, where after no Maintenance and Operations funds will be levied.

 

 

Determination of the Timing of the Required

 

Incremental Tax Base

 

As development occurs within the Riggins Redevelopment Area, additional investment will add incremental tax revenues.  Based on our growth assumptions, there will be sufficient increment added to the redevelopment area by the year 2007.  Since taxes are not collected until the following year, the tax required to pay for bonds will be available in 2008. 

The table on the following page, (Table 6, Anticipated Tax Increment Growth and Timing) shows this anticipated growth and the amount of incremental taxes expected.  A slight shortfall is anticipated in the second and third years (2008 and 2009) but will be quickly recouped.

 From that time on, the balance in the fund remains positive.

 

 

The interest rates established for the repayment of the bonds will be according to the municipal bond market standards at the time the bonds are issued.  This project anticipates an interest rate of 4.0%.

 

Fiscal Impact on Taxing Districts and Taxpayers

 

The fiscal impact on taxing districts will be to increase available revenue to the districts by collection of forgone taxes and a reduction in the levy rate applied to the valuation of their property. 

 

Limits are placed on the increase in budget a taxing district can spend even with a substantial increase in the tax base.  This limitation on receipt of additional revenue is partially mitigated by the collection of “Foregone Taxes”; taxes which the district has a right to collect but has not.  These taxes, which would normally be collected during the tax increment financing period, may be collected after the bonds have been paid, assuming the law remains the same.   The amount of foregone taxes for any given year can be obtained by requesting the Dollar Certification of Budget Request to Board of County Commissions L-2, for the year in question. 

 

Taxing districts can recover foregone taxes if they have a sufficient source of tax revenues.  The Urban Renewal Project can create these sources of additional tax revenue. 

 

Idaho State law limits the increase in budgets of each taxing district and there is a limit on the amount of foregone taxes a district can collect.  However, the result of an increased tax base is a decrease in the levy rate for each taxing district.  This reduces taxes for each individual taxpayer within the taxing district. 

 

Table 6

Anticipated Tax Increment Growth and Timing

Year

Tax Increment

 

 

2007

47,879

2008

53,432

2009

100,988

2010

153,715

2011

223,480

2012

272,216

2013

327,649

2014

379,043

2015

385,757

2016

392,673

2017

399,796

 

 

Total

2,736,628

 

Source: Panhandle Area Council

 

Feasibility of Tax Increment Financing of Improvements

 

As a result of this analysis, the feasibility of using the Tax Allocation Financing Provision for improvements within the Riggins Redevelopment Area are positive given the assumptions included in this report.  Growth assumptions applied to the development mix within the redevelopment area indicate that there will be sufficient incremental tax revenues to pay for the improvements if development in the area occurs as demonstrated in this projection.  Of course, this schedule could be accelerated by a large project going into the area and creating a large, unanticipated investment. 

 

The impact on taxing districts is also likely to be positive.  While there is a limit on the increase in budgets of the taxing districts, forgone taxes can be used to increase district activity to accommodate the new growth, or new growth can be added annually to increase district budgets in lieu of the loss of foregone tax authority.

 

Conclusion

 

The Idaho Economic Forecast, published by the Idaho Department of Financial Management sums up the need for this type of project in the conclusion of the January 2002 forecast:

“Small businesses are a vital part of rural America, but their ability to grow and reach new markets is hampered by aging infrastructures, lower skilled labor, and insufficient capital.  Policymakers and community leaders must overcome these three rural challenges to foster small business expansion in rural America.  By fostering small business expansion, many rural communities could develop new leaders, expand job rolls, enhance worker skills, and boost local tax receipts.  One way to approach these three rural challenges involves creating new partnerships or networks between small businesses, rural citizens, and public institutions”. [1]

 

In a related section, the need for an expanded infrastructure is recommended.

“Small firms that expand their reach beyond traditional products and markets enhance their ability to compete in today’s global economy.  But producing and delivering top-notch products still requires high-quality infrastructures, including roads, water and schools – and high-speed Internet connections.  Much of this infrastructure is lacking or deteriorating in rural America, tying many small businesses to traditional products and shrinking local markets.”[2]

 

With the availability of the Tax Increment Financing provision in the City of Riggins, a suitable area where public investment in infrastructure can enhance business growth and a positive financial outlook for application of Tax Increment Financing, the Riggins Redevelopment Area is a good candidate for use of this financing method. 


 

Appendix  1

Tax Valuation by Parcel

 

RIGGINS URBAN RENEWAL DISTRICT

 

  Tax Valuation by Parcel

Current

 

 

 

Market Value

 

   Parcel Description

 

Assessment

 

 

 

 

(1)

Tax 62

Brown's Industries  

212,180

(2)

Tax 31

Zatica Lot   

161,395

(3)

Tax 90

RTV Dev Corp

362,603

(4)

Tax 217

Walters

111,573

(5)

ROT-Lots 2,7(P)1,5,6

Carlson PO Parking

16,005

(6)

Tax 233

Gruell Subdivision

70,818

(7)

Tax 230

Blanton  

30,275

(8)

Tax 140

Wunsch 

8,976

(9)

Tax 111

Cereghino Subdivision 

215,820

(10)

ROT-Lots 6, 7 Blk 2

Arendell 

105,703

(11)

ROT-Lots 3, 4 Blk 2

Boldman

221,034

(12)

Tax 96, 97, 109

Carlson (Opal)      

206,565

(13)

Tax 162

Hart   

38,533

(14)

Tax 94,112

Bagley

102,406

(15)

Chukar Pt Lot 1

Sabin

53,977

(16)

Chukar Pt Lot 2

Sabin

34,606

(17)

Chukar Pt Lot 3

States

33,528

(18)

Chukar Pt Lot 4

States

35,552

(19)

Chukar Pt Lot 5

Segdbheir

35,244

(20)

Chukar Pt Lot 7

Maraviglia

40,304

(21)

Chukar Pt Lot 8

Murdock

41,415

(22)

Chukar Pt Lot 9

Murdock

40,249

(23)

Chukar Pt Lot 11

Murdock

60,857

(24)

Tax 272

Timberland Resource

92,243

(25)

Tax 152

Tilton  

157,684

(26)

Tax 145

Aitken 

127,878

(27)

NR Add-Lots 1,2

Thistlewood 

47,327

 

 

 

 

 

 

 

 

 

 

TOTAL (1)

2,664,750

(1) Total constitutes less than ten percent (10%) of the total assessed value of the city.

Appendix  2

Debt service schedule

Year

Bond Amount

Bond Payment

 

 

 

2007

0

0

2008

1,280,800

93,137

2009

1,280,800

93,137

2010

1,280,800

93,137

2011

1,280,800

93,137

2012

1,280,800

93,137

2013

1,280,800

93,137

2014

1,280,800

93,137

2015

1,280,800

93,137

2016

1,280,800

93,137

2017

1,280,800

1,482,452

 

 

 

TOTAL

 

2,300,683

 

 

 

 

 

 

 

Bond Amount

$1,280,800

Interest Rate

4.0%

Term (Years)

20

 

Present Value Discount

3%

Debt Service Margin

15% ($125,739 over ten years)

Balloon Payment

In Year 10 on $1,280,800 Bond


 

Appendix  3

Taxing District Projections

 

Tax Increment Available for Districts after Bond Retirement

 

Year

2017

Tax Increment Available for Districts (Annually)

$399,794

 

 

Idaho County

155,231

Riggins

174,546

School District 241

34,172

Riggins Cemetery

5,768

Syringa Hospital

30,077

 

 

Total

$399,794

 

This additional tax revenue may not be available without the Tax Increment Financing.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix  4

Total financial projection

 

Excel Spreadsheet Available at the Riggins City Clerk’s Office.