2007/06/13 Council Agenda Packet

Local Infrastructure Financing Tool (LIFT) / Revenue Development Area Competitive Program 8 Riverfront RDA Background • The 2006 Legislature passed E2SHB 2673 creating the Local Infrastructure Financing Tool (LIFT), a new form of tax-increment financing. The LIFT legislation authorizes a local government to pass an ordinance creating a Revenue Development Area (RDA). Once the RDA is formed, the City can then competitively apply for a portion of the State's annual share of property and sales taxes generated within the RDA as the result of increased economic development. If the City's application for LIFT taxing authority is successful, the City can use these funds, along with local matching funds, to repay bonds issued to finance eligible public improvements within the RDA that help support and encourage increased private development. • The maximum award of LIFT authority for any one project is $1 million per year for up to 25 years, matched dollar for dollar with the local funds committed to the public infrastructure. • The taxes involved are sales and use taxes, which can be supplemented with property tax if it is needed to reach the amount of the annual LIFT authority awarded to the jurisdiction. • Once the LIFT project is awarded, the sponsoring local government imposes sales and use taxes that are credited against the state sales and use tax from the RDA. • The state's Community Economic Revitalization Board (CERB) will competitively select and approve the RDA proposals, based on applications submitted by June 29, 2007. • Tax revenues from the LIFT authority allocated to a jurisdiction can be used to service bonded debt, but the bonds must be issued and secured by the jurisdiction. • The public infrastructure improvements eligible for LIFT funding include the following: > Street and road construction and maintenance > Water and sewer system construction and improvements > Sidewalks, traffic controls, and streetlights > Parking, terminals, and dock facilities > Stormwater and drainage improvements > Park facilities and recreational areas Challenges and Restrictions • Only one RDA/LIFT project can be approved per county. • If other local governments or taxing districts participate in the LIFT project, written agreements with these jurisdictions must be obtained to allow the use of their applicable tax allocations. • The RDA must be comprised of contiguous tracts, lots, or parcels of land. • The sponsoring local government must have entered into, or expects to enter into, an agreement with a private developer, or have received a letter of intent from a private developer relating to the developer's plans for private improvements within the RDA. • The City bears all the risk that the taxes generated will be sufficient to service whatever debt is assumed for the public infrastructure. Riverfront RDA • Staff proposes to take advantage of this financial opportunity by forming an RDA in the Riverfront area. 4