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.
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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