Newport City Councilors Monday night took another step toward creating a new urban renewal district for the city – stretching from the bridge on the south to as far north as Agate Beach. The council hopes that by establishing another urban renewal district it will raise the value of properties within the district to where enough tax revenues can be raised to begin replacing old and failing sewer and water lines running up and down Highways 101 and 20 and laterals off to the east and west.
Many of these lines are in a state of extreme decay, some having been in the ground for up to 75 years. Previous taxpayers and city councils, they say, simply didn’t “pay it forward” for future generations so that they could confidently run water in their kitchens and gardens as well as flush their toilets. Public Works Director Tim Gross has often estimated the cost of repair and replacement of these lines running millions of dollars every year clear off into the future. But can urban renewal work well enough so the city doesn’t have to raise water and sewer rates that could very well force many low income residents, especially senior citizens, out of their homes?
That’s one of the questions the council will be grappling with over the next year as it evaluates a comprehensive study by consultants EcoNorthwest, a well known professional firm on matters dealing with taxation and urban development. EcoNorthwest has offered several approaches to creating a revenue-generating urban renewal district with varying district boundaries, estimated tax yields, the number of property value-raising projects, etc. The council will be guided through their evaluations by Community Development Director Derrick Tokos, City Manager Spencer Nebel, City Attorney Rob Connell and Public Works Director Tim Gross, among others, as each analyzes a number of variables, some of which are highly fluid.
Another important issue is how much tax revenue taxing authorities like the city, the county, cooperative extension, county library district and others will suffer as future tax revenue increases go mostly to paying off the debt the city takes on in order to put in those sewer and water lines, attractive streetscapes, possible utility undergroundings and so on. The losses to those districts are caused by not receiving the added taxes the properties produce by virtue of all the improvements in and around them. The added tax revenues they produce are instead plowed back into the urban renewal district to pay off the debt the city incurred putting in those improvements.
School districts are also affected but not as much because the state steps in and makes up the difference based on a minimum guarantee of funding for each child in the schools.
But when all the debt is paid off, the entire urban renewal district once again re-joins the tax rolls at full value. That dramatically increases the amount of property taxes that go to all the districts that were getting no more tax revenues than what they got before the district was set up.
Now that the city council has endorsed the idea of the district it will be further “shopped around” to other affected taxing entities to get their cooperation. The pitch is “to forego small increases in taxable assessed valuation now, in order to get considerably more in the future, due to faster rising property values due to the urban renewal improvements.”
Again, a final plan and list of improvement projects will take shape over the next nine months to a year.