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    • Urban Renewal Information

the answers from Bandon's City Manager to some Urban Renewal questions

5/1/2012

Comments

 
Below are the answers from Bandon's City Manager to some Urban Renewal questions.

 Where can I find what tax payer urban renewal funds have been used for?  
 
You can find a  complete detailed list of the projects in the Urban Renewal plans for Area 1 and  Area 2, which are available for inspection or copying at City Hall.   Some of the  projects previously funded by Bandon’s Urban Renewal Areas include the Boardwalk  and Crabbing Dock, street paving and lighting, sidewalks,  undergrounding  electric lines, Fillmore Avenue construction, the Historical Society Museum, the  South Jetty tsunami emergency evacuation route, the Coquille River Lighthouse  renovation, the Barn/Community Center  and Senior Center, the Bandon Public  Library, and numerous City Park improvements.  Some of the  proposed new Urban Renewal projects include an Eco-Tourism Center, public  parking lots, infrastructure improvements to the Woolen Mill property to  encourage industrial and business development and private sector job creation 
(such as the proposed cheese factory and brewery which will be privately  financed and constructed), a building renovation loan/grant program, the bicycle & pedestrian pathway system, extension of the boardwalk, City park 
restrooms, renovation of the ballfields, a skate park and BMX track, expansion  of the dog park, playground improvements, and a City Park amphitheater.  In  addition, in 2000 and again in 2010, a measure was approved by the voters under  which the Urban Renewal Agency agreed to trade their special levy funds for an 
equivalent street tax, which enabled all of the streets in Bandon to be paved  and maintained over the last 11 years at absolutely no increase to property tax  rates. 


What about the concept of spending less?  Isn't this what individuals are doing? 
 

The concept of “spending less” is  somewhat difficult to apply in the case of Urban Renewal since the money gets  spent regardless of whether it is spent by Urban Renewal or by the overlapping  taxing districts from which the money comes.  The funds are already being  collected from the taxpayers as part of the tax bases
of the overlapping taxing  districts such as the City, the County, the School District (School District  Urban Renewal expenditures are actually reimbursed by the State of Oregon), the  Port of Bandon, the Coos County  Airport District, the Hospital District, SWOCC, etc.  Urban Renewal is  allocated a share of those
revenues to spend on Bandon capital projects such as  the ones outlined above.  If Urban Renewal doesn’t spend the funds, then  they are simply retained by the overlapping taxing districts and spent on their  projects and programs.  So, either way, there is no difference in the  amount of money spent or the amount of taxes paid by the taxpayers.  It is  simply a question of where the money is spent.  The only way the total  amount of tax money spent or the amount of money collected from the taxpayers  would be lowered is if somehow the Oregon
Constitution was changed to lower the  permanent tax rates of the taxing districts, or if the taxing districts  voluntarily agreed to not collect all of the revenues they were eligible to  collect (which is highly unlikely since they are all struggling to provide  services within their current revenue limits).  Keep in mind also that one  of the proposed Urban Renewal expenditures is paying a share of the existing  voter-approved bond debts for the water treatment plant, which will lower  property tax rates.  So, spending less Urban Renewal money on that project,  for example, would actually increase property tax rates for the  taxpayers.


 Is borrowing the only way?

Urban Renewal doesn’t necessarily “borrow” funds.  State Statutes require that Urban Renewal only spend money  on “debt.”  That is where the term “maximum indebtedness” comes  from.  It is essentially a limit on the total amount of money Urban Renewal  can spend.  In Bandon’s case many of our projects were
paid for with cash  which had been saved and earned interest.  But, those expenditures had to  be done under a contract with the City, private contractors who did the  projects, etc., so they technically qualified as “debt” (ie. owed to the City or  the contractors) and therefore qualified for Urban Renewal funding.  In the  case of Fillmore  Avenue and paving all of the streets in Bandon, the  City did actually borrow those funds from the State of Oregon.  The only  time we “borrow” funds from the outside is in cases such as those where,  considering inflation and low interest rates from the State, we can ultimately  save money and at the same time benefit the citizens by getting the projects  done now instead of later.  For example, it would have cost us about the  same
amount (actually it cost us a little less) to borrow the money and pave all  the streets in Bandon in 2000, as it would have cost to save up the money until  we had enough in the bank and pave the streets by paying cash in 2010.  So,  for less money we were able to drive on paved streets for an extra 10 years  beginning in 2000 instead of waiting until 2010.  The same thing applied to  Fillmore  Avenue.  Many times, instead of borrowing money  from some outside agency, Urban Renewal borrows money from the City.  In  the case of the Library,
for example, we needed $160,000 from Urban Renewal for  construction, and in the case of the Community Center we needed about  $600,000.  Since Urban Renewal didn’t have the money in its account, it  borrowed the money from the City’s  Block Grant Fund which was set up for that  and other economic development
purposes.  The result was that Urban Renewal  benefitted by getting a lower interest rate than the bank would have charged,  the City benefitted by earning more in interest from Urban Renewal than the bank  was paying, and the citizens benefitted by getting the Library and Community  Center completed many years sooner than if we had waited for Urban Renewal to  actually have the funds in their account.  Keep in mind also that, unlike  the Federal government which goes into debt by increasing the national debt,  printing money, and then
worrying later about where the money to repay that debt  will come, Urban Renewal operates in an exactly opposite way.  Before  issuing debt, Urban Renewal has to first determine where the funds will come  from (such as the proposed amendment which will extend the time Urban Renewal  will continue to collect revenues from the overlapping taxing districts).   Then, once the revenue stream for repaying the debt is secured, Urban Renewal  can actually borrow the money and undertake the  projects.


  
 You have asked some very appropriate  and insightful questions, so I am also forwarding my responses to the City  Council so they will have the answers as  well.  Urban Renewal is  complicated and my responses are somewhat wordy, but hopefully I have adequately  addressed your concerns.  If you need additional
information or have  further questions, please let me know.


  Have a great  day!


  Matt
 
Matt  Winkel
City  Manager City of Bandon
P.O.  Box  67
555 Highway  101
Bandon, OR 97411
541-347-2437 ext.229
FAX:  541-347-1415
citymanager@ci.bandon.or.us
++++++++++++++++++++++++++++++PUBLIC RECORDS LAW  DISCLOSURE
This is a public document. This  e-mail is subject to the State Retention Schedule and may be made available to  the public upon request.



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