(A) General Description Of The Proposed Financing Method:
1. The Agency is authorized to finance this project with revenue allocation funds, financial assistance from the City (loans, grants, other financial assistance), State of Idaho, Federal Government or other public entities, interest income, developer advanced funds, donations, loans from private financial institutions (bonds, notes, line of credit), the lease or sale of Agency-owned property, public parking revenue, or any other available source, public or private, including assistance from any taxing district or any public entity.
2. The Agency is also authorized to obtain advances, lines of credit, borrow funds, and create indebtedness in carrying out this Plan. The Agency may also consider an inter-fund transfer from other urban renewal project areas and a grant from the City. The principal and interest on such advances, funds, and indebtedness may be paid from any funds available to the Agency. The City, as it is able, may also supply additional assistance through City loans and grants for various public facilities.
3. The City or any other public agency may expend money to assist the Agency in carrying out this Project.
4. As allowed by law and subject to restrictions as are imposed by law, the Agency is authorized to issue notes or bonds from time to time, if it deems appropriate to do so, in order to finance all or any part of the project. Neither the members of the Agency nor any persons executing the bonds are liable personally on the bonds by reason of their issuance.
(B) Revenue Allocation Financing Provisions:
1. The Agency hereby adopts revenue allocation financing provisions as authorized by the Act, effective retroactively to January 1, 2019. These revenue allocation provisions shall apply to all taxing districts which are located in or overlap the Revenue Allocation Area shown and described on Attachments 1 and 2 to this Plan, as attached to Ord. 982. The Agency shall take all actions necessary or convenient to implement these revenue allocation financing provisions. The Agency specifically finds that the equalized assessed valuation of property within the Revenue Allocation Area is likely to increase as a result of the initiation of the Project.
2. The Agency, acting by one (1) or more resolutions adopted by its Board, is hereby authorized to apply all or any portion of the revenues allocated to the Agency pursuant to the Act to pay as costs are incurred (pay-as-you-go) or to pledge all or any portion of such revenues to the repayment of any moneys borrowed, indebtedness incurred, or notes or bonds issued by the Agency to finance or to refinance the Project Costs (as defined in Idaho Code §50-2903(14)) of one (1) or more urban renewal projects.
3. Upon enactment of a City Council ordinance finally adopting these revenue allocation financing provisions and defining the Revenue Allocation Area described herein as part of the Plan, there shall hereby be created a special fund of the Agency into which the County Treasurer shall deposit allocated revenues as provided in Idaho Code §50-2908. The Agency shall use such funds solely in accordance with Idaho Code §50-2909 and solely for the purpose of providing funds to pay the project costs, including any incidental costs, of such urban renewal projects as the Agency may determine by resolution or resolutions of its Board.
4. A statement listing proposed public improvements and facilities, a schedule of improvements, an economic feasibility study, estimated project costs, fiscal impact upon other taxing districts, and methods of financing project costs required by Idaho Code §50-2905 is included in this Plan and in Attachments 5.1-5.5 of Ord. 982. This statement necessarily incorporates estimates and projections based on the Agency's and consultants' present knowledge and expectations. The Agency is hereby authorized to adjust the presently anticipated urban renewal projects and use of revenue allocation financing of the related project costs if the Board deems such adjustment necessary or convenient to effectuate the general objectives of the Plan in order to account for revenue inconsistencies and unknown future costs. Agency revenue and the ability to fund reimbursement of eligible project costs is more specifically detailed in the annual budget.
5. The Agency may appropriate funds consisting of revenue allocation proceeds on an annual basis without the issuance of notes or bonds. The Agency may also obtain advances or loans from the City or Agency, or from the Agency's other revenue allocation area, or private entity and financial institutions in order to immediately commence construction of certain of the public improvements. Revenues will continue to be allocated to the Agency until termination of the revenue allocation area as set forth in the attachments to Ord. 982. Attachments 5.1-5.5 of Ord. 982 incorporate estimates and projections based on the Agency's and its consultants' present knowledge and expectations concerning the length of time to complete the improvements and estimated future revenues. The activity may take longer depending on the significance and timeliness of development. Alternatively, the activity may be completed earlier if revenue allocation proceeds are greater than estimated or if the Agency obtains additional funds from another source.
6. The revenue allocation proceeds are hereby irrevocably pledged for the payment of the principal and interest on the advance of monies or making of loans or the incurring of any indebtedness such as bonds, notes, and other obligations (whether funded, refunded, assumed, or otherwise) by the Agency to finance or refinance the Project in whole or in part.
7. The Agency is authorized to make such pledges as to specific advances, loans, and indebtedness as appropriate in carrying out the project.
8. The Agency reserves the right to either pay for project costs from available revenue (pay as you go basis) or borrow funds by incurring debt through notes or other obligations.
9. Revenue allocation proceeds are deemed to be only a part of the proposed funding sources for the payment of public improvements and other project improvements. Additionally, project funding is proposed to be phased for the improvements, allowing of funds to be accumulated for use.
(C) Economic Feasibility Study: Attachment 5.2 of Ord. 982 constitutes the Economic Feasibility Study ("Study"), as supported by Attachments 5.1, 5.3, 5.4, and 5.5 of Ord. 982, for the urban renewal area prepared by Phil Kushlan, Kushlan Associates. The study constitutes the financial analysis required by the Act and is based upon existing information from the developers, the Agency, the City and others. Projections are based upon input from the Agency, property owners, developers, City and other public entities.
(D) Assumptions And Conditions/Economic Feasibility Statement:
1. The information contained in Attachments 5.1-5.5 of Ord. 982 assumes certain completed and projected actions. All debt is projected to be repaid no later than the duration period of the Plan. The total amount of indebtedness (and all other loans or indebtedness) and the amount of revenue generated by revenue allocation are dependent upon the extent and timing of private development. Should all of the development take place as projected, the project indebtedness could be extinguished earlier, dependent upon other legal obligations. Should private development take longer to materialize, or should the private development be substantially less than projected, then the amount of revenue generated will be substantially reduced and debt may continue for its full term.
2. The Plan and the Plan Attachments to Ord. 982 incorporate estimates and projections based on the Agency's and consultants' present knowledge and expectations. The Plan proposes certain public improvements as set forth in Attachments 5.1 through 5.5 of Ord. 982, which will facilitate development in the Revenue Allocation Area.
3. The assumptions set forth in the study are based upon the best information available to the Agency and its consultants through public sources or discussions with property owners, developers, City staff and others. The information has been analyzed by the Agency and its consultants in order to provide an analysis that meets the requirements set forth under the Law and Act. At the point in time when the Agency may seek a loan from lenders or others, a more detailed and then-current financial pro forma will be presented to those lenders or underwriters for analysis to determine the borrowing capacity of the Agency. As set forth herein, the Agency reserves the right to fund the Project on a "pay as you go" basis. The Agency Board will prioritize the activities set forth in this Plan and determine what funds are available and what activities can be funded. The Agency will establish those priorities through its mandated annual budgetary process.
4. The assumptions concerning revenue allocation proceeds are based upon certain assessed value increases and assumed tax levy rates, as more specifically set forth in Attachments 5.1-5.5 of Ord. 982. The types of new construction expected in the Project Area are: commercial, office, residential, including residential above retail and office, live-work residences, local housing projects, higher density townhome and single-family homes, lodging and retail. Developers have identified significant interest in these development types. The Project Area has potential for a significant increase in residential growth due to the McCall Local Housing Program to encourage a year-round downtown economy, particularly with regard to the close access and walkability to the downtown. Other owners have expressed interest in developing their properties or selling to a developer. However, without a method to construct the identified public improvements such as main water and sewer lines and street infrastructure, development is unlikely to occur in much of the Project Area.
5. The financial analysis set forth in Attachments 5.3-5.4 of Ord. 982 has taken into account and excluded levies that do not flow to the Agency consistent with Idaho Code §50-2908.
6. It is understood that application of certain exemptions, including the homeowner's exemption and Idaho Code § 63-602K, which provides for personal property tax exemption to businesses may have the effect of reducing the increment value, which in turn reduces revenue.
(E) Ten Percent Limitation
1:
1. Under the Act, the base assessed valuation for all revenue allocation areas cannot exceed gross/net ten percent (10%) of the current assessed taxable value for the entire City. According to the Valley County Assessor, the assessed taxable value for the City as of January 1, 2018, less homeowners' exemptions, is one billion two hundred seventy-five million six hundred ninety-seven thousand six hundred forty-six dollars ($1,275,697,646.00). Therefore, the ten percent (10%) limit is one hundred twenty-seven million five hundred sixty-nine thousand seven hundred sixty-four dollars and sixty cents ($127,569,764.60).
2. The adjusted base assessed value of the existing revenue allocation area as of January 1, 2018, is as follows:
Railroad Avenue Area Urban Renewal District: $9,641,150.00
3. The estimated base value for the proposed Downtown West District is fifty-three million three hundred nineteen thousand five hundred seventy-seven dollars ($53,319,577.00). The adjusted base values for the combined revenue allocation areas total sixty-two million nine hundred sixty thousand seven hundred twenty-seven dollars ($62,960,727.00), which is less than ten percent (10%) of the City's 2018 value.
(F) Financial Limitation:
1. The study identifies several capital improvement projects. Use of any particular funding source for any particular purpose is not assured or identified. Use of the funding source shall be conditioned on any limitations set forth in the Law, the Act, or by contract. If revenue allocation funds are unavailable, then the Agency will need to use a different funding source for that improvement.
2. The amount of funds available to the Agency from revenue allocation financing is directly related to the assessed value of new improvements within the Revenue Allocation Area. Under the Act, the Agency is allowed the revenue allocation generated from inflationary increases and new development value. Increases have been assumed based upon the projected value of new development as that development occurs along with possible land reassessment based on a construction start.
3. The study, with the various estimates and projections, constitutes an economic feasibility study. Costs and revenues are analyzed, and the analysis shows the need for public capital funds during the project. Multiple financing sources including annual revenue allocations and interfund loan are shown. This study identifies the kind, number, and location of all proposed public works or improvements, a detailed list of estimated project costs, a description of the methods of financing illustrating project costs, and the time when related costs or monetary obligations are to be incurred. See Idaho Code § 50-2905. Based on these funding sources, the conclusion is that the Project is feasible.
4. The information contained in the study assumes certain projected actions. First, the Agency has projected an inter-district loan from the Agency's existing project area to assist with the administrative costs for establishing the new Project Area. That loan is anticipated to be repaid to the existing Project Area in full, with interest. Second, under the provisions of the Act, the revenue allocation may continue until the end of the Plan term. Third, the total amount of indebtedness and the amount of revenue generated by revenue allocation is dependent upon the extent and timing of private development. The study considered and assessed the amount of geographic area in the Project Area that was highly probable to redevelop during the term of the Plan and Project Area. The potential maximum development capacity pursuant to the City Code was assessed for the area most likely to develop. To be conservative, the potential build-out value was limited to twenty percent (20%), which formed the basis for the annual new development estimates. Additional value was added in years 2023 and 2026 based on anticipated projects that have been discussed at a high-level and are reasonable to assume will occur at some point in the near future. Finally, it is assumed the Agency may re-prioritize projects and the location of those projects pursuant to market conditions, project timing, funding availability, etc. as more specifically detailed in the annual budget.
5. The proposed timing for the public improvements may very well have to be adjusted depending upon the availability of some of the funds and the Agency's ability to finance any portion of the Project. Any adjustment to Project timing or funding is technical or ministerial in nature and shall not be considered a modification of the Plan pursuant to Idaho Code §50-2903A.
6. Attachments 5.1-5.2 of Ord. 982 list those public improvements the Agency may directly fund in whole, or reimburse a future developer and/or public entity for through the term of the Plan. The costs of improvements are estimates only as it is impossible to know with any certainty what the costs of improvements will be in future years. There is general recognition that construction costs fluctuate and are impacted by future unknowns, such as the cost of materials and laborers. Final costs will be determined by way of construction contract public bidding or by an agreement between the developer/owner and Agency. The listing of public improvements does not commit the Agency to any particular level of funding; rather, identification of the activity in the Plan allows the Agency to negotiate the terms of any reimbursement with the developer and/or the public entities. This Plan does not financially bind or obligate the Agency to any project or property acquisition; rather, for purposes of determining the economic feasibility of the Plan, certain projects and expenditures have been estimated and included in the analysis. Agency revenue and the ability to fund reimbursement of eligible project costs is more specifically detailed in any participation agreement and in the annual budget adopted by the Agency Board. The proposed location of parking, waterfront improvements and the pedestrian plaza in the Project Area is generally shown in Attachment 5.5 of Ord. 982 recognizing that the specific location of improvements, including but not limited to roads and utilities, will depend on the type and timing of development. The change in the location of the improvements shown on Attachment 5.5 of Ord. 982 plus the actual siting of the improvements identified in Attachments 5.1 and 5.2 of Ord. 982 does not constitute a modification to the Plan.
7. The Agency reserves its discretion and flexibility in deciding which improvements are more critical for development or redevelopment, and the Agency intends to coordinate its public improvements with associated development by private developers/owners. Where applicable, the Agency also intends to coordinate its participation in the public improvements with the receipt of certain grants or loans which may require the Agency's participation in some combination with the grant and loan funding.
8. Generally, the Agency expects to develop those improvements identified in Attachments 5.1-5.2 of Ord. 982 first, in conjunction with private development within the Project Area generating the increment as identified in Attachments 5.3-5.4 of Ord. 982.
9. The Plan has shown that the equalized valuation of the Revenue Allocation Area as defined in the Plan is likely to increase as a result of the initiation and completion of urban renewal projects pursuant to the Plan.
(G) [Reserved].
(H) Participation With Local Improvement Districts And Business Improvement Districts: Under the Idaho Local Improvement District Code, Chapter 17, Title 50, Idaho Code, the City has the authority to establish local improvement districts for various public facilities, including, but not limited to, streets, curbs, gutters, sidewalks, storm drains, landscaping, and other like facilities. To the extent allowed by the Law and the Act, the Agency reserves the authority to participate in the funding of local improvement district facilities. This participation may include either direct funding to reduce the overall cost of the local improvement district or to participate as an assessed entity to finance the local improvement district project. Similarly, to the extent allowed by the Law and the Act, the Agency reserves the authority, but not the obligation, to participate in the funding of the purposes specified under the Business Improvement Districts, Chapter 26, Title 50, Idaho Code.
(I) Issuance Of Debt And Debt Limitation: Any debt incurred by the Agency as allowed by the Law and Act shall be secured by revenue allocation funds as allowed by the Act. All such debt shall be repaid within the duration of this Plan, except as may be authorized by law.
(J) Impact On Other Taxing Districts And Levy Rate:
1. An estimate of the overall impact of the revenue allocation project on each taxing district is shown in the study through the new development projections.
2. The assessed value for each property in a revenue allocation area consists of a base value and an increment value. The base value is the assessed value as of January 1 of the year in which a revenue allocation area is approved by a municipality, with periodic adjustments allowed by Idaho law. The increment value is the difference between the adjusted base assessed value and current assessed value in any given year while the property is in a revenue allocation area. Under Idaho Code § 63-802, taxing entities are constrained in establishing levy rates by the amount each budget of each taxing district can increase on an annual basis. Taxing entities submit proposed budgets to the County Board of Commissioners, which budgets are required to comply with the limitations set forth in Idaho Code § 63-802. Therefore, the impact of revenue allocation on the taxing entities is more of a product of the imposition of Idaho Code § 63-802, then the effect of urban renewal.
3. The County Board of Commissioners calculates the levy rate required to produce the proposed budget amount for each taxing entity using the assessed values which are subject to each taxing entity's levy rate. Assessed values in urban renewal districts which are subject to revenue allocation (incremental values) are not included in this calculation. The combined levy rate for the taxing entities is applied to the incremental property values in a revenue allocation area to determine the amount of property tax revenue which is allocated to an urban renewal agency. The property taxes generated by the base values in the urban renewal districts and by properties outside revenue allocation areas are distributed to the other taxing entities. Properties in revenue allocation areas are subject to the same levy rate as they would be outside a revenue allocation area. The difference is how the revenue is distributed. If the overall levy rate is less than assumed, the Agency will receive fewer funds from revenue allocation.
4. In addition, without the Revenue Allocation Area and its ability to pay for public improvements and public facilities, fewer substantial improvements within the Revenue Allocation Area would be expected during the term of the Plan; hence, there would be lower increases in assessed valuation to be used by the other taxing entities.
5. One result of new construction occurring outside the revenue allocation area (Idaho Code §§ 63-802 and 63-301A) is the likely reduction of the levy rate as assessed values increase for property within each taxing entity's jurisdiction. From and after December 31, 2006, Idaho Code § 63-301A prohibits taxing entities from including, as part of the new construction roll, the increased value related to new construction within a revenue allocation area until the revenue allocation authority is terminated. Any new construction within the Project Area is not available in the short-term for inclusion by the taxing entities to increase their budget capacity. Upon termination of this Plan or deannexation of area, the taxing entities will be able to include the accumulated new construction roll value in setting the following year's budget and revenue from such value is not limited to the three percent (3%) increase allowed in Idaho Code § 63-802(1)(a).
6. As the 2019 certified levy rates are not determined until late September 2019, the 2018 certified levy rates have been used in the study for purposes of the analysis. For tax year 2018
1 , those districts and rates for the parcels located within the City are as follows2:
Taxing Districts | Levy Rates: |
Taxing Districts | Levy Rates: |
Valley County | .001681086 |
City of McCall | .004689208 |
McCall-Donnelly School District #421 | .001592135 |
Valley County Emergency Medical | .000219031 |
McCall Cemetery | .000016076 |
McCall Fire | .000992805 |
McCall Hospital | .000344840 |
Payette Lakes Rec. Water & Sewer | .000193412 |
Valley County Road & Bridge | .000000000 |
TOTAL LEVY
3 |
.009728593 |
7. The study has made certain assumptions concerning the levy rate. First, for purposes of the study, the levy rate is estimated to be a conservative .0087, which is less than the 2018 combined certified levy rates and the levy rate is estimated to stay level for the life of the revenue allocation area. In part, a conservative levy rate is used in the study as the actual impact of the termination of the existing revenue allocation area during the term of this Plan and Project Area is unknown. Further, the impact of property value fluctuations on the levy rate is also unknown. The annual increment value is expected to increase by approximately two percent (2%) over the term of the Plan once the improvements have been completed and fully assessed by the County. If the overall levy rate is less than projected, or if expected development fails to occur as estimated, the Agency shall receive fewer funds from revenue allocation.
8. Pursuant to Idaho Code § 50-2908, the Agency is not entitled to revenue allocation proceeds from certain levy increases which are allowed by either specific statutory authorization or approved by an election of the qualified electors of the particular taxing district. Therefore, for any levy election, the Agency will not receive revenue allocation funds which would have been generated by imposing that levy on the assessed valuation within the Project Area. The study has taken this statute into account. It is important to note that pursuant to Idaho Code § 50-2908, the Agency receives an allocation from the McCall-Donnelly School District #421 budget stabilization and tort levies.
(K) Phasing And Other Fund Sources: The Agency anticipates funding only a portion of the entire cost of the public improvements shown on Attachments 5.1-5.5 of Ord. 982. Other sources of funds shall include City and developer participation. Agency participation shall be determined by the amount of revenue allocation funds generated.
(L) Lease Revenue And Bonds:
1. Under the Law (Idaho Code § 50-2012), the Agency is authorized to issue revenue bonds to finance certain public improvements identified in the Plan. Under that type of financing, the public entity would pay the Agency a lease payment annually which provides certain funds to the Agency to retire the bond debt. Another variation of this type of financing is sometimes referred to as conduit financing, which provides a mechanism where the Agency uses its bonding authority for the Project, with the end user making payments to the Agency to retire the bond debt. These sources of revenues are not related to revenue allocation funds and are not particularly noted in the study, because of the "pass through" aspects of the financing. Under the Act, the economic feasibility study focuses on the revenue allocation aspects of the Agency's financial model.
2. These financing models typically are for a longer period of time than the 20-year period set forth in the Act. However, these financing models do not involve revenue allocation funds, but rather funds from the end users which provide a funding source for the Agency to continue to own and operate the facility beyond the term of the Plan as allowed by Idaho Code § 50-2905(8) as those resources involve funds not related to revenue allocation funds.
(M) Membership Dues And Support Of Community Economic Development: The Act is premised upon economic development being a valid public purpose. To the extent allowed by the Law and the Act, the Agency reserves the authority to use revenue allocation funds to contract with non-profit and charitable organizations established for the purpose of supporting economic development and job creation. Additionally, the Agency reserves the authority to expend revenue allocation funds to join, participate and support nonprofit organizations established to support Agency best practices and administration. The line item of district operating expenses within the study shall be deemed to include expenditures for the purposes described in this section as may be deemed appropriate during the annual budgetary process. (Ord. 982, 10-24-2019)