Urban holding plan: 7 ways to pay

The county currently has placed an urban holding overlay on 2,100 acres of land off of Northeast 179th Street near the Clark County Event Center at the Fairgrounds. The designation halts development to ensure that new development doesn’t overwhelm existing infrastructure.

As the county has grown, development pressure has prompted the county to begin looking for ways to lift urban holdings in the area, which is the last large area of developable land that can occur under Clark County’s Comprehensive Growth Management Plan.

In December, the county council voted to lift urban holdings on about 40 acres near the Northeast 179th Street/Interstate 5 interchange. That was made possible with the approval of an accompanying agreement with a developer committing them to make infrastructure improvements. But lifting urban holdings on the rest of the area will require still greater investments that could result in a small increase in property taxes.

Seven options

Each of the options presented to the council had varying degrees of funding commitments by developers and the public.

Option 7 would require the most from developers and the least from county funds. Under this option, the county would take out a $12.3 million bond with an annual debt service payment of $946,000. The debt would be paid with either a $167 surcharge or a $75 in transportation impact fees paid by developers for each trip their development is expected to generate. This option would require no increase in property taxes.

Option 1, which was preferred by the committee, would have the county use its “banked capacity” from its general fund. Under state law, counties can increase the total levy for their general fund by 1 percent annually. Counties have the option of “banking” increases they choose not to adopt, which Clark County has done in recent years.

Option 1 would have the county use about 2 percent of its general fund banked capacity to generate $1.43 million in property taxes over five years beginning in 2020, adding $7.19 to the property tax bill for the median-priced home in Clark County. Under this option, the county would take out about $5 million in bonds with an annual debt service of $394,000. Developers would pay either a $66 surcharge or $31 transportation impact fee based on the number of trips their project is expected to generate that would be used to pay back the bond.

County Manager Shawn Henessee said money generated from using the general fund’s banked capacity would be used to free up the county’s road fund to make infrastructure investments in the area.

Councilors Julie Olson John Blom and Temple Lentz all voiced support for Option 1.

“This is a regional project,” said Olson, whose district includes the urban holdings area.

Olson, who sat on the committee that developed the funding options, preferred Option 1 because the bond would have the “least exposure” for the county. She also said that using the general fund’s banked capacity would have the smallest impact on homeowners because the $7.19 charged to homeowners would go down as the county’s tax base grows.

Clark County Council Chair Eileen Quiring, who also sat on the committee, said she was undecided on which option she’d support. During her campaign for council chair, Quiring touted her record in opposing tax increases and faulted her opponent, Marc Boldt, for voting to increase the general fund levy.

Quiring said she was waiting to hear from the county assessor on how recent assessments would affect taxes. She also noted that the county is likely to take out another large bond to replace or significantly upgrade the county jail.

Councilor Gary Medvigy said that while he didn’t want to delay the development any longer, he was reluctant to ask taxpayers for further support. He specifically referenced the “turbulence” created by the McCleary education funding package passed by the Legislature in 2017 that caused property taxes to spike and resulted in financial instability for local school districts.

With the turbulence unresolved, he said, he is resistant to increasing taxes.

“I wouldn’t want to increase any taxes on our households without a vote,” he said.

Although Medvigy said that he was reluctant to ask for more funding commitments from developers, he said he would support Option 7.

Option 8?

During the meeting, staff presented five infrastructure projects in the area. In 2015, the Legislature approved a transportation funding package that would direct $50 million to outdated Interstate 5 interchange at Northeast 179th Street. Funding won’t be available until 2023, and efforts to move the timeframe up have been unsuccessful.

It was also mentioned during the meeting that another source of state funding from the county is blocked. The county was planning to use $10 million loan from the Public Works Trust Fund, administered by the Washington State Department of Commerce, to fund a project on Northeast 10th Avenue.

However, because the Growth Management Hearings Board, a land-use appeal board, has ruled the county’s comprehensive plan is out of compliance with the Growth Management Act, it’s not eligible for the loan. The county is currently appealing the board’s decision.

Olson asked if there might be an “Option 8” if the county’s situation changed and became eligible. Clark County Public Works Director Ahmad Qayoumi said that either way, the county will have to use a “credit card” to pay for the improvements. The difference he said is that the Public Works Trust Fund has a lower interest rate.