Transportation Benefit Districts


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Transportation Benefit Districts

  1. 1. Transportation Benefit Districts The Ridgefield Interchange Project Fall Conference of the American Public Works Association Washington State Chapter October 22, 2009 Justin L. Clary, P.E. City Manager City of Ridgefield, Washington
  2. 2. Ridgefield Location
  3. 3. 2008 Ridgefield Comprehensive Plan Map
  4. 4. Recent Residential Growth <ul><li>Pre-2004 – Relatively Stable Population Base </li></ul><ul><li>2004-Present </li></ul><ul><ul><li>825 New Homes Constructed </li></ul></ul><ul><ul><li>Population grew from 2,195 to 4,215; ranked No. 8 in State of Washington for Percentage of Population Growth Rate (2000-2009) </li></ul></ul><ul><ul><li>Approximately 1,900 residential lots have gained, at a minimum, preliminary plat approval </li></ul></ul>2005 2007
  5. 5. Recent Employment Growth <ul><li>Employment-based growth has taken longer to realize than residential growth </li></ul><ul><ul><li>Approximately 500 jobs created since 2004 </li></ul></ul>
  6. 6. Economic Development on the Horizon <ul><li>Ridgefield’s Comprehensive Growth Plan projects 20,000 jobs will be created over the 20-Year planning horizon </li></ul><ul><li>There are a number of large-scale developments under planning and two under build-out </li></ul>
  7. 7. Economic Development on the Horizon Union Ridge Master Planned Business Park
  8. 8. Economic Development on the Horizon Southwest Washington Health System Medical Campus
  9. 9. Economic Development on the Horizon Port of Ridgefield’s Waterfront Master Plan
  10. 10. Economic Development Attributes <ul><li>Ridgefield Junction Employment Area </li></ul><ul><ul><li>Approximately 1,500 acres of land zoned for employment-based development – the largest volume of developable land in the Greater Portland/Vancouver Metropolitan area </li></ul></ul><ul><ul><li>Direct access to an international trade corridor (Interstate-5) </li></ul></ul><ul><ul><li>25-minute drive to Portland International Airport </li></ul></ul><ul><ul><li>Four deep-water ports within 30 miles (Vancouver, Portland, Kalama and Longview) </li></ul></ul><ul><ul><li>Two major railroad lines within 20 miles (BNSF and Union Pacific) </li></ul></ul>
  11. 11. Transportation Challenge <ul><li>I-5/SR 501 Interchange </li></ul><ul><ul><li>Built in 1964 to serve a rural community </li></ul></ul><ul><ul><li>Sole access to Interstate 5 for Ridgefield </li></ul></ul><ul><ul><li>Existing capacity rapidly eroding due to recent growth </li></ul></ul><ul><ul><li>Development community has long identified the existing interchange as a detriment to recruiting quality businesses </li></ul></ul>
  12. 12. A New Interchange <ul><li>I-5/SR 501 Interchange </li></ul><ul><ul><li>Sized to serve 2030 traffic flows </li></ul></ul><ul><ul><li>Design initiated in 2005 through WSDOT-City partnership </li></ul></ul>
  13. 13. Pre-Benefit District Funding Deficit <ul><li>30% Design Completed in 2006 </li></ul><ul><ul><li>Projected an estimated total project cost of $38 million </li></ul></ul><ul><li>Funding Secured through 2006 </li></ul><ul><ul><li>Federal SAFETEA-LU - $9 million </li></ul></ul><ul><ul><li>State Transportation Partnership Account - $10 million </li></ul></ul><ul><ul><li>State CTED Economic Development Grant - $2 million </li></ul></ul><ul><ul><li>City Traffic Impact Fees - $2 million </li></ul></ul><ul><li>Projected Funding Deficit = $15 million </li></ul><ul><li>Consistent message from legislators </li></ul><ul><ul><li>Has the City used all local options? </li></ul></ul>
  14. 14. Transportation Benefit District Feasibility Study <ul><li>2007 Public-Private Partnership to conduct Feasibility Study </li></ul><ul><ul><li>Public – City of Ridgefield, Port of Ridgefield, CTED Grant </li></ul></ul><ul><ul><li>Private – Individual Developer Donations </li></ul></ul><ul><li>Stakeholder/Consultant Team </li></ul><ul><ul><li>FCS Group – Financial Analysis </li></ul></ul><ul><ul><li>K&L Preston Gates Ellis LLP – Legal Analysis </li></ul></ul><ul><ul><li>City, Port, developer and citizen representatives </li></ul></ul><ul><li>Scope </li></ul><ul><ul><li>Conduct legal analysis of RCW 36.73 </li></ul></ul><ul><ul><li>Evaluate Allowed Revenue Mechanisms </li></ul></ul><ul><ul><li>Create Revenue Projections based on Land Use Designations </li></ul></ul><ul><ul><li>Define District Boundaries </li></ul></ul><ul><ul><li>Assist in TBD Implementation </li></ul></ul>
  15. 15. Feasibility Study Analysis <ul><li>Legal Analysis </li></ul><ul><ul><li>Benefit District Creation Process </li></ul></ul><ul><ul><li>Benefit District Board of Directors </li></ul></ul><ul><ul><li>Bondable Revenue Streams </li></ul></ul><ul><li>Funding Mechanisms </li></ul><ul><ul><li>Sales & Use Tax </li></ul></ul><ul><ul><li>Vehicle Fee </li></ul></ul><ul><ul><li>Fee or Charge (e.g., traffic impact fee) </li></ul></ul><ul><ul><li>Vehicle Tolls </li></ul></ul><ul><ul><li>Property Tax </li></ul></ul><ul><ul><li>Local Improvement District Assessments </li></ul></ul><ul><li>Land Use Projections </li></ul><ul><ul><li>Created model of buildable lands in the interchange influence area </li></ul></ul><ul><ul><li>Developed revenue projections based on land use designations </li></ul></ul><ul><ul><li>- Used actual increases in assessed valuation of properties near other area interchanges that were replaced over the past decade </li></ul></ul><ul><ul><li>- Created sales & use tax projections for commercially-zoned properties </li></ul></ul><ul><ul><li>Went through an iterative process with the community on revenue streams and district boundary delineation </li></ul></ul>
  16. 16. Feasibility Study Results <ul><li>Challenges Encountered </li></ul><ul><ul><li>Public Approval Process: Registered Voter (TBD) vs. Property Owner (LID) </li></ul></ul><ul><ul><li>TBD Boundary Delineation – raised a question of proportionality </li></ul></ul><ul><ul><li>Bonding Constraints (TBD sunset of 10 years on sales tax revenues does not allow for revenue bonding) </li></ul></ul><ul><ul><li>Revenues increase only as development occurs </li></ul></ul><ul><ul><li>Agriculture-designated lands were exempt from property taxes </li></ul></ul><ul><ul><li>Concern from property owners not intending to develop </li></ul></ul><ul><li>Recommended TBD Parameters </li></ul><ul><ul><li>Revenue Stream – 0.2% Sales & Use Tax would create $1-2 million over the 10 year life of the TBD </li></ul></ul><ul><ul><li>District Boundary – encompassed land zoned for employment-based development (industrial, professional and commercial) </li></ul></ul>
  17. 17. Transportation Benefit District Boundary
  18. 18. TBD Creation and Approval <ul><li>District Creation </li></ul><ul><ul><li>In June 2008, Ridgefield City Council approved an ordinance adopting the TBD and directed placement of the 0.2% sales & use tax on the November 2008 General Election ballot </li></ul></ul><ul><li>Public Process & District Justification </li></ul><ul><ul><li>City conducted informational mailings and open houses </li></ul></ul><ul><ul><li>Yes on Ridgefield TBD Committee formed by citizens </li></ul></ul><ul><ul><li>Common Message – Everyone using the new interchange to purchase goods that locate within the District will pay their “fair share” for using the interchange </li></ul></ul><ul><ul><li>Cost/Benefit Analysis – consumer would need to spend over $1,300 at the nearest commercial location before the 0.2% sales tax increase would be offset by the cost of fuel </li></ul></ul><ul><li>November 2008 General Election Outcome </li></ul><ul><ul><li>TBD approved by 66% </li></ul></ul>
  19. 19. TBD “Side Effects” <ul><li>Protection of Existing Project Funds </li></ul><ul><ul><li>2008 Legislative session – existing State funds were nearly reallocated to fully fund other transportation projects </li></ul></ul><ul><ul><li>Governor’s draft 2009-2011 budget released in Fall 2008 again proposed reallocation of project funds </li></ul></ul><ul><ul><li>City was able to effectively argue during the 2009 Legislative session that the Project has wide community support based on its approval of a sales tax increase despite a faltering economy </li></ul></ul><ul><li>Positioned Interchange Project for ARRA Funds </li></ul><ul><ul><li>Project visibility created by voter approval of the TBD was instrumental in the receipt of $10 million in ARRA funds </li></ul></ul>
  20. 20. Ridgefield Interchange Project Funding <ul><li>Federal </li></ul><ul><ul><li>SAFETEA-LU (2005) </li></ul></ul><ul><ul><li>American Recovery and Reinvestment Act (2009) </li></ul></ul><ul><li>State </li></ul><ul><ul><li>Transportation Partnership Account (2005) </li></ul></ul><ul><ul><li>CTED Economic Development Grant (2005) </li></ul></ul><ul><ul><li>Pre-existing Funds (secured 2007, available 2011-2013) </li></ul></ul><ul><li>Local </li></ul><ul><ul><li>Traffic Impact Fees (2005) </li></ul></ul><ul><ul><li>Transportation Benefit District (2008) </li></ul></ul>
  21. 21. Questions?