TCDA Financial Impact Report 2016-2017Tigard Town Center Development Agency
for the fiscal impact year ended
June 30, 2017
City Center Development Agency
Annual Financial Report | For the fiscal year ended June 30, 2016
Tigard, Oregon’s Urban Renewal Agency
TCDA
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Note: On September 5, 2017 the Tigard City Council formally changed the name of its urban renewal
agency from the City Center Development Agency (CCDA) to the Town Center Development
Agency (TCDA) to reflect the May 2017 adoption of the Tigard Triangle Urban Renewal Plan. The
TCDA will be responsible for overseeing both the City Center Urban Renewal Plan and the Tigard
Triangle Urban Renewal Plan.
Introduction
URBAN RENEWAL AGENCIES must prepare an annual financial report for the governing body
and public in accordance with Oregon Revised Statutes 457.460. The report includes a financial
summary of the preceding year and the budget for the new fiscal year. It also includes an analysis of
the financial impact of c arrying out the urban plan on the tax collections for all taxing districts.
Urban Renewal – An Overview
The purpose of urban renewal is to improve specific areas of a community that are poorly developed,
under-utilized, or that have declined over time. These areas can have old, deteriorated buildings;
streets and utilities in serious need of upgrades (or the areas can simply lack streets and utilities
altogether), weak business activity, and few or aging parks and public facilities. Urban renewal is a
process authorized by Oregon law (ORS 457) to finance improvements in these areas using “tax
increment financing.” A portion (the increment) of property tax revenues from properties within the
urban renewal district are designated to support financing for improvements to the urban renewal
area. While urban renewal provides for unique funding of improvements to a district, it is not
intended that tax increment financing be the only source of funding. Other sources including ones
typically used for capital improvements such as the gas tax, Traffic Impact Fee (TIF), System
Development Charges (SDC), interagency funding, or state grants are programmed to support
downtown projects.
For a city government to utilize urban renewal as a funding mechanism, it must establish an urban
renewal agency, and it must adopt an urban renewal plan. The Tigard City Council approved the City
Center Urban Renewal Plan for Downtown in December of 2005. In May 2006, a special ballot
measure was passed by the voters, authorizing the use of tax increment financing (urban renewal) in
downtown. Although they are not reflected in this report, which covers FY 2016-17, it is notable that
in May 2017, Tigard voters approved an amendment to the City Center Urban Renewal Plan that
expanded the City Center Area by 37.74 acres, increasing the total area to 228.96 acres. Also in 2017,
Tigard voters approved implementation of the Tigard Triangle Urban Renewal Plan, authorizing the
use of tax increment financing in the Tigard Triangle.
Tigard Town Center Development Agency
Financial Impact Report of the City Center Urban Renewal Plan
For the fiscal impact year ended June 30, 2017
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Tigard City Center Urban Renewal District
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Urban Renewal Finance – A Summary
Urban renewal is a process authorized by Oregon law to finance improvements in those
neighborhoods and districts that need special attention and revitalization. Once a district is
established, the tax valuation for the district is “frozen.” As properties appreciate in value, the
increase in taxes (the “increment”) generated above the frozen base are used to pay for debt on
specific projects within the urban renewal plan. These tax increments are used to repay municipal
bonds. Bond proceeds are used to finance improvements that will revitalize the district. New taxes
are not imposed to fund urban renewal. Bonds and tax increment financing will be used to fund
projects in the urban renewal plans. Under this system, the increment portion of property taxes
generated within the urban renewal area is temporarily shifted to repay the bonds used to finance
projects in the City Center.
Under tax increment financing, when the value of a property within the urban renewal district
increases, the proceeds from property taxes on the increased value (the “tax increment”) go to the
urban renewal district. These proceeds fund further urban renewal projects, either directly or by
providing for the repayment of municipal bonds that fund improvements. The tax increment is
unique as a source of funding, because it is usable only for projects identified in the urban renewal
plan.
How Does Urban Renewal Affect Taxes?
With urban renewal and the use of tax increment financing, there is no net change on Tigard
property tax bills. New property taxes are not created as a result of urban renewal. Under today’s
Oregon law, property tax rates are fixed. Tigard’s City Center Urban Renewal Plan and Tigard
Triangle Urban Renewal Plan also do not authorize any “local option” tax levies or special
assessments. Tax revenues are generated from the increase in property values multiplied by current
tax rates. These revenues pay for urban renewal under Oregon law.
History of Tax Increment Financing
In less than two decades, three ballot measures – Measure 5 (1990), and Measure 50 (1997) – have
made significant changes to Oregon’s system of property taxation. Those changes have influenced
urban renewal programs and tax increment revenue calculations. The provisions of these changes to
the property tax system, Ballot Measures 5 and 50, now are incorporated into Oregon’s
Constitution, and into Oregon Urban Renewal Statutes. Those provisions provide the basic
framework for revenue calculations in this report.
Tigard Town Center Development Agency
Financial Impact Report of the City Center Urban Renewal Plan
For the fiscal impact year ended June 30, 2017 | TCDA
TCDA |
Tax Increment Calculations
To determine the amount of the taxes levied, the total assessed value within each urban renewal area
is segregated by the county assessor into two parts: (a) the total taxable assessed value in the district
at the time the Urban Renewal Plan was adopted (the base or “frozen” value); and (b) the difference
between the frozen base value and the current total assessed value (the incremental value or
“excess”). Revenues derived from the application of the tax rate for each affected taxing district to
the amount of the incremental value may be collected by the urban renewal agency and deposited in
its debt service fund. This revenue is used to repay indebtedness incurred in carrying out the
projects.
Tigard City Center Urban Renewal Plan – Purpose
The stated purpose of the City Center Urban Renewal Plan is to provide improvements in the
downtown area so that it will be economically healthy while maintaining its “uniquely Tigard”
character. The establishment of the urban renewal district provides a funding mechanism for
projects in downtown Tigard. For more information, you may review the City Center Urban
Renewal Plan and the report accompanying the City Center Urban Renewal Plan online at:
www.tigard-or.gov/document_center/CommunityDevelopment/urban_renewal_plan.pdf or
request a copy from the City of Tigard.
How Was the City Center Urban Renewal Plan Developed?
In late 2005, the same citizen-business-city partnership that worked on the Tigard Downtown
Improvement Plan collaborated to find financing for the “catalyst” projects identified in the
Downtown Improvement Plan. Urban renewal and tax increment financing was identified as a
potential source of financing and an urban renewal plan was prepared. The voter-approved Tigard
City Center Urban Renewal Plan provides the special financing for the public improvement projects
identified in the Tigard Downtown Improvement Plan.
What are Tigard's Specific Plans for Urban Renewal?
Under Oregon law, urban renewal can provide special funding for a wide variety of projects and
programs. Tigard’s approved City Center Urban Renewal Plan authorizes funding for up to 35
different projects in the city center over twenty years. Most of the proposed projects in Tigard’s City
Center Urban Renewal Plan are for public improvements and facilities, although some assistance for
private businesses and property owners is provided.
Tigard Town Center Development Agency
Financial Impact Report of the City Center Urban Renewal Plan
For the fiscal impact year ended June 30, 2017
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The Tigard City Council, working closely with dozens of citizens (and after numerous hearings and
meetings) included the following categories of projects in the City Center Urban Renewal Plan: Street
Improvements, Streetscape Improvements, Bicycle and Pedestrian Facilities, Parks, Public Spaces,
Public Facilities, Planning and Development Assistance (for privately owned properties). Property
Acquisition and Disposition are also approved projects.
The Tigard Triangle Urban Renewal Plan, approved by voters in May 2017, authorizes a variety of
projects that will address the Tigard Triangle’s underlying infrastructure deficiencies, build public
improvements, and provide assistance for new businesses and development. Similar to the City
Center Urban Renewal Plan, the intent of these projects is to stimulate new development and private
investment in the Tigard Triangle to create a new mixed-use town center. Projects in the Tigard
Triangle Urban Renewal Plan fall into five categories: Transportation; Public Utilities; Public Spaces,
Facilities, and Installations; Re/Development Assistance and Partnerships; and Finance Fees and
Plan Administration. Property Acquisition and Disposition are also approved projects.
In both of Tigard’s urban renewal plans, the intent of projects such as new streets, parks, sewers, and
plazas, is to stimulate new investment and create vibrant, new town centers with public spaces that
the community can use. As property values rise in the urban renewal districts, the increase in tax
revenues generated supports the payment of bonds used to improve the area. Over time, it is
expected that the value of property and taxes generated will be higher through the use of urban
renewal than if left alone.
Effect of Urban Renewal on Taxing Districts
Carrying out an urban renewal plan has an effect on the county assessor’s calculation for each taxing
district that shares values with Tigard’s urban renewal agency. Some property taxes that may have
been received by the taxing bodies that levy property taxes within Tigard’s urban renewal area are
being paid to Tigard’s urban renewal agency.
Passage of Ballot Measure 50 (Article XI, Section 11 of the Oregon Constitution) resulted in
converting most property taxes from a levy-based system to a rate-based system. Page 7 of this
report shows the financial impact by taxing district for Tigard’s urban renewal agency.
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Tigard Town Center Development Agency
Financial Impact Report of the City Center Urban Renewal Plan
For the fiscal impact year ended June 30, 2017 | TCDA
Financial Reports
The financial reports on pages 6 and 7 account for the activities of Tigard’s urban renewal agency.
In accordance with ORS 457.460, these reports were prepared by the Finance Department of the
City of Tigard using the same basis of accounting it uses to prepare its financial statements —
modified accrual basis of accounting. These reports are due annually by January 31, information and
figures contained herein are based upon audited draft financial statements. At the end of each fiscal
year, June 30, this financial impact report is prepared which shows the urban renewal tax impact by
taxing district. Copies are available by January 31 at the Tigard Permit Center, 13125 SW Hall Blvd.,
Tigard, 97223.
Statement of Resources and Requirements
As summarized below, Town Center Development Agency's 2016-17 total requirements were
$1,687,460 for expenditures charged to the City Center Urban Renewal District as of
June 30, 2017. For fiscal year 2016-17, total budgeted resources of were balanced with
requirements of $1,447,713.
The District uses the funds it receives from the division-of-taxes method of calculating property
taxes to finance various urban renewal projects and activities. These property taxes totaled $440,497
in FY 2016-17 and are expected to increase slightly to $536,723 in FY 2017-18 per the Washington
County assessment summary received after budget adoption.
City Center Development Agency
Statement of Resources and Requirements
for the fiscal year ended June 30, 2016
As summarized below, City Center Development Agency's 2015-16 total requirements were $3,197,083 for expenditures
charged to the District as of June 30, 2016. For fiscal year 2016-17, total budgeted resources of were
balanced with requirements of $2,023,000.
The District uses the funds it receives from the division-of-taxes method of calculating property taxes to finance
various urban renewal projects and activities. These property taxes totaled $369,948 in FY 2015-16 and
are expected to increase slighty to $434,000 in FY 2016-17 per the Washington County assessment summary received after budget adoption.
Debt Service Fund Capital Projects Fund Total
Actual Budget Actual Budget Actual Budget
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
$362,207 $104,490 $140,349 32,000 $136,490
440,497 $536,723 - - $536,723
- - 84,425 $78,000
502,556
$440,497
$84,425 $78,000
$4,138 $1,500 $1,500
Resources:
Beginning Fund Balance
Tax Increment Property Taxes
Rental Income
Interest Income
Intergovernmental Revenues
Other Financing Sources
- - $140,344 $340,000 $ 340,000
Total Resources $ 806,842 642,713 $880,618 $805,000 $1,687,460 1,447,713
Requirements:
Debt Service 167,000 162,500 - - 167,000 $162,500
Transfers Out 515,500 337,000 - 515,500 $337,000
Capital Outlay - - $848,482 $805,000 $848,482 805,000
Ending Fund Balance 124,342 $143,213 32,136 -$156,478 $143,213
Total Requirements 806,842 642,713 $880,618 $805,000 $1,687,460 1,447,713
Note: Figures are based upon audited financial statements.
-
$515,500 $355,000
-$4,138
$140,344
$515,500 $ 355,000
--
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TCDA |Tigard Town Center Development Agency
Financial Impact Report of the City Center Urban Renewal Plan
For the fiscal impact year ended June 30, 2017
City Center Urban Renewal Plan
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Detail of Purpose - City Center Urban Renewal Plan
Base year
FY 2016-17 FY 2005-06 Change in Taxes levied Percent of
Total Permanent Incremental Incremental Incremental Impact on total Taxes Divided
Assessed Tax Assessed Assessed Assessed on Assessed for
Taxing District Value Rate Value Value Value Taxes Value Urban Renewal
Education
$6,124,925,250 0.2828 $107,510,119 $69,207,378 $38,302,741 $10,832 $1,732,129 1.76%
$6,124,925,250 0.1538 $107,510,119 $69,207,378 $38,302,741 $5,891 $942,014 1.76%
$6,124,925,250 4.9892 $107,510,119 $69,207,378 $38,302,741 $191,100 $30,558,477 1.76%
PCC
NW Regional ESD
Tigard/Tualatin School District
Beaverton School District $6,124,925,250 4.6930 $ 107,510,119 $69,207,378 $38,302,741 $179,755 $28,744,274 1.76%
Local Government
$6,124,925,250 2.2484 $107,510,119 $69,207,378 $38,302,741 $86,120 $13,771,282 1.76%
$6,124,925,250 0.0966 $107,510,119 $69,207,378 $38,302,741 $3,700 $591,668 1.76%
$6,124,925,250 0.0701 $107,510,119 $69,207,378 $38,302,741 $2,685 $429,357 1.76%
$6,124,925,250 1.5252 $107,510,119 $ 69,207,378 $38,302,741 $58,419 $9,341,736 1.76%
$6,124,925,250 2.5131 $107,510,119 $69,207,378 $38,302,741 $96,259 $15,392,550 1.76%
Washington County
Metro
Port of Portland
TV Fire & Rescue
City of Tigard
Tigard Tualatin Aquatic $6,124,925,250 0.0900 $107,510,119 $69,207,378 $38,302,741 $3,447 $551,243 1.76%
Excluded from M-5 rate limitation
$6,124,925,250 0.2659 $107,510,119 $69,207,378 $38,302,741 $10,185 $1,628,618 1.76%
$6,124,925,250 0.4394 $107,510,119 $69,207,378 $38,302,741 $16,830 $2,691,292 1.76%
$ 6,124,925,250 1.4752 $107,510,119 $69,207,378 $38,302,741 $56,504 $9,035,490 1.76%
$6,124,925,250 0.4179 $107,510,119 $69,207,378 $38,302,741 $16,007 $2,559,606 1.76%
$6,124,925,250 0.1159 $107,510,119 $69,207,378 $38,302,741 $4,439 $709,879 1.76%
Metro bonds
PCC bonds
Tigard/Tualatin School District
City of Tigard
TV Fire & Rescue
Beaverton School District $6,124,925,250 2.0938 $107,510,119 $69,207,378 $38,302,741 $80,198 $12,824,368 1.76%
Note: The division-of-taxes process results in some property taxes that may have been received by the "taxing districts" that levy
property taxes within the urban renewal area (for example, Washington County, NW Regional ESD) being paid over to Tigard's
urban renewal agency. The taxing districts forgo a share of the property tax income during the life of an urban renewal plan so
that the urban renewal agencies can carry out activities that increase property values in the long term. The above table shows
the urban renewal tax impact by taxing district using permanent rates established pursuant to Measure 50.
Capital Projects Fund
Actual Budget
2016-17 2017-18
Detail of Purpose:
Capital Outlay:
$89,878 $440,000
$47,622
$68,692
$150,000
$100,000
$100,000
Main St. at Fanno Property Cleanup
Main St. at Fanno Property Redevelopment
Main St. at Fanno Relocation
Tigard Street Heritage Trail Rotary Plaza
Main St. at Fanno Creek Public Space
Façade Improvement/Strolling Street Program
Land Purchase
Transit Center Redevelopment Planning
Property Taxes on Agency Owned Land
Admin/Legal $848,482 $805,000
$848,482Note: Figures are based upon audited financial statements.
$2,944
$515,500
$95,518
$15,779
$12,549
Financial Impact of City Center Urban Renewal Plan on Tax Collections
$15,000
Tigard Town Center Development Agency
Financial Impact Report of the City Center Urban Renewal Plan
For the fiscal impact year ended June 30, 2017 | TCDA