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Friday, March 1, 2024
March 1, 2024

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Ridgefield approves tax increment financing plan

Program advances after city, Clark-Cowlitz Fire Rescue OK agreement

By , Columbian staff writer

After reaching agreement with Clark-Cowlitz Fire Rescue, the Ridgefield City Council on Thursday unanimously approved an ordinance establishing a tax increment financing area near Interstate 5. The tax program will allow the city to invest in infrastructure and other improvements, then pay later for those improvements through bonds or other methods.

One hold-up to approving the plan had been the anticipated impact to the fire district. The city estimated the fire district would miss out on $18.2 million in tax revenue over the 25-year lifespan of the program.

In a June interview, Chief John Nohr said without the tax revenue it would be difficult for the fire district to meet Ridgefield’s needs as the city continues to grow. Nohr and other fire district officials asked the city to consider ways to help counteract those losses.

The city announced last week it had agreed to a voluntary mitigation plan. While a mitigation plan is not required by the state for the tax plan, City Manager Steve Stuart said the city recognizes the fire district needs adequate funding to provide services.

“The voluntary mitigation plan really came from conversations between staff at the fire district and the city and elected officials,” Stuart said Friday.

Tax increment financing programs have been used in other states but are relatively new to Washington. The Legislature approved the program in 2021. To date, 11 jurisdictions have submitted tax increment financing proposals to the state for review, including Ridgefield and the Port of Vancouver.

Properties within the tax increment financing area are assigned a fixed or “base” property value when the tax area is formed. Local taxing districts, such as the city, county and fire district, would continue to receive tax revenues based on that base value rather than the assessed value, which is updated each year. Taxes levied on future increases in the assessed value of the property — or the increment value — go to the city to pay for the public improvements.

Stuart said the city councilors and fire district commissioners met in September to discuss mitigation options.

“They had a really good conversation. They talked about a lot of shared interests, questions and concerns. From that, the elected officials said let’s work to see if we can find a mutually beneficial solution,” Stuart said.

Three elements

The mitigation plan includes three key elements. City officials agreed to purchase property for a new Clark-Cowlitz Fire Rescue station by 2025. The cost of the property cannot exceed $2 million.

“Before any impacts have been seen by anybody, the city is committing to purchase land for a fire station that serves that tax increment area and the broader city,” Stuart said.

Stuart said the city does not currently own property that could be used for the new fire station but is working with the fire district to identify possible locations.

“We left it open to anywhere in city limits that they say, ‘Yes, we could build a fire station here,’ ” Stuart added.

The city and fire district also agreed to hold formal meetings on a regular basis beginning five years after the tax area is created to discuss impacts to the fire district’s calls for service, response times, capital needs and tax revenues. Ongoing meetings will be held every three years.

The third element of the mitigation plan is an agreement by the city to end the program early if the infrastructure bonds are fully paid. Once the plan is ended, taxing districts impacted by the program would begin receiving the full amount of property tax revenue.

At Thursday’s council meeting, Nohr voiced his support for the mitigation plan.

“We think it is a good step in the right direction. (Clark-Cowlitz Fire Rescue), along with many districts in the state, still have some concerns about how the law was written and we’ll continue to work on legislative fixes,” Nohr said. “(Clark-Cowlitz Fire Rescue) supports the current plan and we look forward to continue working with the city.”

Although the Port of Ridgefield will also receive less tax revenue under the plan, Chief Executive Officer Randy Mueller said the port leadership supports the program. In a July 5 letter to Stuart, Mueller said the tax plan “is a welcome new tool in the very limited toolbox to fund infrastructure needs in Ridgefield.”

Mueller said the tax increment financing plan was fair, responsible, and fiscally sound and is a good way to pay for infrastructure without burdening taxpayers.

Projects identified in the tax plan include a new roundabout at 51st Avenue, widening Pioneer Street and Royle Road, a regional stormwater facility at the I-5 interchange, and many others. Many of the projects are expected to be complete within the next two years.

To learn more

A full list of the projects, as well as more information on the tax increment financing plan, can be found at https://ridgefieldroundtable.org/tax-increment-area.