City Council approves TIF area but not the financing aspect

by Richard Uhlhorn

After one and one-half hours of negative discourse and Chelan City Council comments concerning the proposed TIF (Tax Incremental Financing) area, Councilwoman Erin McCardle made a motion to approve the TIA with six of the seven council members voting for its inclusion in the City’s plans to potentially implement the financing program.

Erin McCardle

The meeting began with the public voicing its concerns about the program with most comments coming from Lake Chelan Health representatives. Russ Jones – fire commission and Mayoral candidate Stan Morse also weighing in with their concerns.

Mayoral candidate Stan Morse

Morse remarked that the proposed TIF was nothing more than a gift to the Campbell’s and Weidner Apartment developers. “What are you going to say Councilman McCardle when a Microsoft millionaire might want to build another TIF,” remarked Morse, who warned that it might bring in that developer’s attorneys.

Hospital Commissioner Mary Signorelli was the only conciliatory person commenting on the TIF. She remarked that she was a strong supporter of the Chelan City Council and the City, “and am still a strong supporter.” Signorelli stated that the City and Junior Taxing Districts should be working together on all things going forward. “June 1st (the deadline for setting the TIF into motion) is not a magic number. Let’s deliberate a little and continue to work together.”

Hospital Commissioner asked that everyone work together

Most of the comments by other Hospital staff and administration was not conciliatory, but accusatory. Hospital Commissioner Jordana LaPorte said, “Politicians are nickel and diming us one small cut at a time.” She stated that the TIF program was not the right answer or the right time to implement.

Others called the City’s proposal short sighted and diverting much needed revenues from the Hospital and EMS efforts to get out from under their financial issues.

Fire Commisioner Russ Jones is concerned about the City’s ability to pay back bonds.

Fire Commissioner Russ Jones, who earlier in the week stated that the TIF wasn’t as concerning as he thought, stated that he doesn’t believe the City’s consultant on the matter. “The first time I saw the ‘Added Value’ was last week,” said Jones. “As a Junior Taxing District, it is very difficult to get good answers. There are too many questions, bad data and legal premises.” Jones went on to say he is concerned about the City’s ability to repay its bonds.

City Administrator Wade Farris told the crowded Council Chamber that the City has been looking at the TIF for quite a while. “This is only to establish an area,” said Farris. “This will give Council a range of options. We will look at future opportunities.”

Public Works Director Jake Youngren stated that there were five projects included in the proposal. The first, and most important is the construction of the one million gallon reservoir to meet maximum demand and serve the many residents in the City limits. There are pump station upgrades and new larger water transmission lines in the proposed infrastructure upgrades.

Consultant Bob Stowe weight in and stated that the TIF is not a new tax. He reiterated that the proposal is a No Harm program to Junior Taxing Districts. “The TIA will exist for a period of time and the City cannot add to it after approval.”

Councilwoman Erin McCardle remarked that the City still has until the end of the year and asked if the ordinance was repealed, would there be any impact if expired? No, but discussions can continue.

Councilman Peter Jamtgaard stated that there is a lot of misinformation being spread around, and it is hard for the City to support growth with aging infrastructure. “This is a chance to get ahead of the game.”

Mayor Goedde stated that the TIF (which is only 2% of each taxing districts revenue stream) is a small amount in order to pay for improvement. Jamtgaard added that the TIF is not subsidizing new development. “There is not enough water… too much demand and this is the best way forward,” said Jamtgaard.

Mayor Goedde

Councilman Tim Hollingsworth asked if there were late comer agreements associated with the TIF. Youngren replied that there are provisions for late comer agreements.

Tim Hollingsworth is skeptical but still voted for the TIA.

Mayor Goedde stated that if the Council decides not to adopt the ordinance and wait until June 1 of 2024, that whatever development takes place up to that time, the City will not be able to revenue off those new developments.

McCardle stated that there was no impact to the Junior Taxing Districts. “I hope that is cleared up,” she said. “The JTDs get everything coming to them.” She also agreed that the TIF should not be the first line of funding. “I agree with that. It is (just) one of the many things that can be used to fund this project.”

McCardle continued, “We have seven months to come up with a very detailed mitigation agreement with the Junior Taxing Districts by the end of the year.” According to her, the TIF is only one piece of a larger tool box.

Councilman Chris Baker said he cannot support the TIF because if it fails the City will potentially have (legal) claims against it.

Chris Baker was the only Councilmember to vote against the TIA.

Councilman John Olson read a prepared statement that supported the ordinance passage. His statement included what could happen if water availability was lacking.

Olson’s written statement stated that new developments could have permits denied including the Apple Blossom Center West Phase 1, 2 and 3, including affordable housing could be put on hold. The Hospital expansion and EMS relocation would need to be closely analyzed to assure water availability before being permitted.

John Olson read a statement outlining some of the issues that could arise if the TIF wasn’t enacted and the water reservoir and waterlines weren’t built.

Mayor Goedde also brought up the potential move of Chelan High School to their east Chelan location. “I think this is more emotional that it needs to be.”

Councilman Mark Ericks asked the hospital CEO how much money they would lose if the TIF went forward. The hospital’s CFO Brant Truman replied that he couldn’t give an answer to that question because it depends on if the assessed value in the entire district goes down.

Councilmand Mark Ericks said he wasn’t willing to kick the can down the road to leave the issues for the next generation.

“It’s common knowledge that the water system has been cobbled together for 100 years,” said Ericks. “The decision to fix it has definitely been punted down the road. We can punt again or we can try t do what should have been done long ago.” He added that the City has to make sure that it doesn’t harm anyone. “We have only two options, borrow and secure a bond or raise utility rates. What we don’t know is how much rates would have to be raised.” 

Ericks also remarked that someone paid to have anonymous calls made to Council phones. “I’m offended by that,” Ericks said. He then added that the Council is there to do the best for the community. “I’m not in favor of punting this for the next generation to address.”

Councilman Tim Hollingworth added that after five years on the Council, he has nothing but respect for Public Works and John Ajax. “I’m no influenced by big developers. “I’m convinced that the reservoir and water lines are very important.” He added that water is critical to both the hospital and fire district but is still skeptical of the TIF. “We are at a juncture where we have to examine all options available.”

McCardle ended the meeting with a motion to approve the TIF area and recognized that there is a lot of angst and concern. “I would add a deadline for us to have a detailed mitigation agreement by December 1.

With the approval, this gives the City and Junior Taxing Districts to move forward on the TIF program to the satisfaction of each organization. It also gives the City time to explore all other funding avenues available.

Author: allthingslakechelan

I have been a journalist, photojournalist and reporter in the Lake Chelan Valley since 1988; first with the Wenatchee World, then 15 years at the Lake Chelan Mirror and another 12 years at GoLakeChelan. Currently, I am semi-retired but can't give up the media gig which is why I started All Things Lake Chelan blog. I also have two social media platforms; allthingslakechelan/facebook and lakechelansportsandrecration/facebook. I am also a professional photographer with many credits with major outlets around the world.

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