Council discusses TIF, LIFT funds
LIBERTY LAKE – The Liberty Lake City Council passed a resolution supporting Spokane County’s May 20 ballot measure for a one-tenth of 1 percent sales tax to pay for Crime Check and emergency communications equipment, but not without objections from Councilman Patrick Jenkins.
The county should be spending the money it already has to pay for the communications system, he said. “It’s irresponsible government,” he said. “We’re not prioritizing. Clearly there’s money for public safety. They just bought a race track.”
Council members also discussed how to manage the tax-increment financing and Local Infrastructure Financing Tools funds that will soon be collected from sales and property taxes in the area being developed north of Interstate 90 on both sides of Harvard Road. The developer is Greenstone Corp. and the land is owned by Centennial Properties, a subsidiary of Cowles Co., which owns The Spokesman-Review.
Tax-increment financing diverts 75 percent of property taxes in a specified area for 15 years to help pay for core infrastructure such as streets, sewer systems, water systems and parks. LIFT is a similar program that collects the sales taxes above the 2008 baseline for 25 years. Under the TIF program the developer builds the projects and is reimbursed, while under the LIFT, the county issues a bond and pays for the projects up front. The bond is repaid with the sales tax funds collected.
The state will give $1 million under the LIFT program if the city provides matching funds, but it is anticipated that for the first few years the amount of sales tax collected with not reach $1 million. TIF funds are being collected now, while the LIFT program won’t start until 2010. The council discussed whether to use TIF funds to make up the difference so the city would qualify for the full amount of matching funds even though the decision won’t have to be made for another year or two.
“We can either utilize this fund to its full potential or give it away,” said Mayor Wendy Van Orman.
Jim Frank, owner of Greenstone Corp., said that once the LIFT program comes online, he would be willing to put off being reimbursed for TIF projects so the city can use TIF funds to get the LIFT match from the state. “We will agree to defer any reimbursement to us if you need that money to match,” Frank said. “Once you’ve made that match, you’d resume reimbursing us. At some point your sales tax will be over a million.”
No interest would accrue, and if the TIF money ran out before Frank was fully reimbursed, then his company would lose the difference, Frank said. “That’s completely our risk,” he said.
Frank’s offer was favorably received by the council. “I think Jim has put an excellent offer on the table,” said Councilman David Crump.
“I am anxious to take advantage of the state’s money that’s on the table,” said Councilwoman Judi Owens. “I see it as a win-win.”
Councilwoman Susan Schuler urged the council to move forward with several proposed TIF projects soon so construction can begin. “Let’s stop dragging our feet,” she said.
The council also briefly discussed a request from the Friends of Pavillion Park for $40,000. The council had voted last year to provide up to that amount for the summer concert series. Several council members said the original agreement called for the city to provide money for the concerts as they came up, not in a lump sum at the beginning of the year. It also appears that the group plans to use the money for more than just the concert series, said Councilman Neal Olander.
“Now it’s a funding source for all kinds of things,” he said. “That’s not what we were told before.”
As the meeting approached 10:30 p.m., the council cut short their discussion and voted to table the issue until the May 6 meeting.