Talent on the hot seat
A proposed new Talent Urban Renewal District could raise money for needs such as affordable housing, but would divert millions of dollars of property tax revenue from fire and police protection, schools, libraries and other services for 30 years.
Jackson County Fire District No. 5 Chief Charles Hanley said with less money, the district would either have to cut fire protection or ask voters to increase taxes by passing a supplemental funding levy.
A financial analysis hasn’t been released that would show how much the fire district and other taxing districts would lose if Talent City Council approves a new urban renewal district.
“We stand to lose a tremendous amount of revenue. We don’t know the amount,” Hanley said. “If we lose funding, that impacts our service level. We would not be able to provide services, or the taxpayers would have to decide to raise their taxes for fire protection. It's a choice between less fire protection after a giant fire or pay more taxes.”
Hanley said the community should question the wisdom of diverting money from fire protection, especially after the September 2020 Almeda fire destroyed thousands of homes in the Rogue Valley.
“This was the largest disaster in the history of Oregon. Now we’re defunding fire protection. It doesn’t make sense to me,” he said.
Urban renewal districts receive tax money that would ordinarily go to other taxing districts that overlap the same area. Urban renewal districts are usually placed in areas that are blighted or underdeveloped. They use the tax revenue they receive to make improvements to the area.
The difference with the proposed Talent Urban Renewal District is that it would be placed on part of the Almeda fire scar. The district would capture the tax revenue as the area is rebuilt.
The proposal calls for setting the start point for the tax diversion in January 2021 — four months after the Almeda fire, when vast swaths were nothing but charred rubble. Some property owners have already rebuilt their homes and businesses, and reconstruction is underway in many areas.
Fire District 5 would be responsible for providing fire protection for the newly built homes and businesses, but wouldn’t get the growth in property taxes to cover its costs. The fire district covers Talent, Phoenix and rural areas near Ashland.
Hanley said whether putting an urban renewal district on burned land is appropriate is a matter for lawyers to debate. But he doesn’t think it’s right.
“If an area is not blighted, it should not be placed in an urban renewal district. This isn’t blighted. It’s brand-new construction. We stand to lose millions of dollars. This would have a drastic impact on our ability to provide fire services,” he said.
As proposed, the new urban renewal district would include 212 acres within city limits. That is close to the maximum allowable 25% that can be included in a district. Much of the land is adjacent to Highway 99, but there are also other areas.
Urban renewal is funded by what’s called tax increment financing. At the time an urban renewal plan is adopted, the county assessor calculates the total assessed value of the area and establishes this value as the “frozen base” for the area. Taxes from that frozen base continue going to all of the taxing jurisdictions. Growth above the base is called the “increment.” Taxes from the increment go to the urban renewal agency for improvement projects.
If adopted, plans call for the urban renewal district to receive its first revenue during the 2023-24 fiscal year and have a 30-year life span.
A new urban renewal district could benefit both commercial and residential owners in the burn scar area of the Almeda fire, said Talent Mayor Darby Ayers-Flood, who is also chair of the Talent Urban Renewal Agency Board of Directors.
“It will speed up our ability to rebuild the burn scar,” said Ayers-Flood. “It’s all part of the plan we will be putting together right now.”
Business and property owners are struggling because insurance payments are not covering the costs of rebuilding as material costs continue to increase. There’s not a lot of opportunity to recover for those folks, said Ayers-Flood.
“It’s important to wait for the analysis to be prepared before we start concluding and developing opinions,” Ayers-Flood said of concerns by other districts about potential financial impacts. She said the council has asked for a clear analysis from agency officials.
Creation of the new district is on a fast track with a goal of it being in place by Aug. 5, according to timelines presented at a Talent City Council session Feb. 16 by Talent Urban Renewal Agency Executive Director Jon Legarza and consultant Elaine Howard.
A consultation period with affected taxing districts is scheduled for May 5 through June 19. But Talent City Council can create the district without approval from other entities.
“I think there is a legal argument to stop them from doing this. It’s a corruption of the intention of urban renewal for them to do this,” said County Administrator Danny Jordan at a Feb. 17 County Board of Commissioners meeting.
He said the action would take all of the land where houses were burned, freezing tax value for the other taxing districts, with all new value going to the new urban renewal district.
“It will not go to the county. It will not go to the city of Talent. It will not go to the school district. It will not go to Fire District 5. It won’t go to the library district. It will go to the Talent Urban Renewal Agency. That’s for 30 years,” Jordan said.
He said after the Almeda fire, the Oregon Legislature stepped up and funded three years of lost property tax revenues for taxing districts impacted by the destruction — with the understanding that the value would come back onto the tax rolls as the area is rebuilt. That financial help from the Legislature is only temporary.
If Fire District 5 can’t get property tax revenue off the new construction, it would have to consider asking voters to approve a levy to make up for the losses, said Vicki Purslow, chair of the District 5 board, at a Talent City Council meeting.
“There are other solutions to affordable housing,” she said, referring to one of the proposed goals for a new urban renewal district.
“It’s clear this is a fast-track agenda. It’s the end of February. When are they going to invite us to the table?” Purslow said during an interview.
Closure of one of the district’s three stations might be a possibility. The district is already operating with just two stations after the Almeda fire damaged the station in Phoenix.
Talent’s city manager is also concerned about how to maintain city services and increase them as the town’s population grows over the next 30 years.
“We are currently waiting for the financial analysis to come out to understand what our property tax loss would be. The biggest hit would be to the general fund,” said Talent City Manager Jordan Rooklyn.
The general fund helps finance police, city staff, facilities, maintenance and other expenses, she said.
Like other law enforcement agencies, the Talent Police Department is struggling with recruitment and retention, Rooklyn said.
The cities of Talent and Ashland are considering whether to consolidate police services to save money.
“The cost of policing continues to go up,” Rooklyn said.
Talent has posted an online survey to ask the public to weigh in on the new urban renewal district. It’s part of a process that calls for a draft plan by April 19, approval by the city’s Planning Commission May 24, and a briefing for Jackson County commissioners May 31. Talent City Council would hold a public hearing on the plan June 20 and consider adopting the plan July 5.
The online survey doesn’t inform the public that an urban renewal district would be financed by diverting property tax revenue from fire protection and other services. It also doesn’t say the fire district might be forced to cut services or ask voters to approve a supplemental tax levy.
The survey states, “An urban renewal plan is simply a financing tool to allow the City Council to focus spending in a specific area of a community, in this case focusing on the burn scar area in downtown. It DOES NOT increase property taxes.”
The survey lists project categories and asks participants to select one that is most important to them, and also to rate the importance of all the projects. Choices include affordable housing projects for low-income households, developing the business corridor and recruiting new businesses, improvements along greenways and streets, creating multi-modal transportation, funding emergency preparedness, park improvements, public art installation and public infrastructure such as water, sewer, storm drains and street lighting.
A number of businesses along the Highway 99 corridor were lost in the Almeda fire, in an area that already had vacant properties. The plan also envisions development of Suncrest Park along Bear Creek. The city has owned the property for a number of years, but no improvements have been made.
For years, Talent had a previous Talent Urban Renewal District. That district stopped taking tax money during fiscal year 2020-21, as it had reached its maximum allowable indebtedness. The other taxing districts saw those revenues resume beginning that year.
Revenues other districts didn’t receive during the 2019/20 fiscal year due to that urban renewal district included: Phoenix-Talent School District, $258,137; city of Talent, $196,625; Fire District 5, $194,546; Jackson County, $122,294; Jackson County Library District, $31,617; Rogue Community College, $31,186; Jackson County Education Services District, $21,422; Jackson Soil and Water Conservation, $3,011; Vector Control, $2,581; and 4-H Extension Service District, $2,495.
It’s not clear yet how much each taxing district could lose per year from a new urban renewal district because the financial analysis has yet to be released.
Because the state equalizes school funding, it would make up losses to the Phoenix-Talent School District, said Jordan. But he said other taxing districts would suffer.
“All the rest of the taxing districts are going to get hit hard from doing this — and for 30 years,” he said.
Under the current governance, the board of directors for the first urban renewal agency consists of Talent’s mayor and city councilors. The board is still controlling a small amount of funds left from the first urban renewal district. The same board would serve a new district, according to Legarza.
Reach Ashland freelance writer Tony Boom at email@example.com. Mail Tribune reporter Vickie Aldous contributed to this story.