A plan to fund millions of dollars in infrastructure in Ridgefield is getting some final touches before a potential approval, and mitigation for impacts to fire department funding is the biggest point of contention.
Ahead of their regular meeting July 13, the Ridgefield City Council hosted a “public briefing” from staff on a proposed tax increment financing (TIF) area. The area would comprise about 939 acres of land near the Interstate 5 junction with Pioneer Street and is intended to fund a number of projects that will help spur growth outside of residential developments.
Financing area benefits
The city’s 2016 comprehensive growth management plan update identified a need for development outside of residential growth, Ridgefield City Manager Steve Stuart told the council. Financially, the city has relied on the one-time sales tax from construction to fund city services, Stuart said, most notably road infrastructure, parks and police.
“The job of the city and of the city council has been to balance the equation,” Stuart said.
Through tax increment financing, the city would be able to fund the infrastructure needed to bring the kind of development that will help that balance by broadening where the city receives revenue, Stuart said.
Tax increment financing essentially “freezes” property tax rates for the majority of taxing districts in the area at the amount of collection they were at when the area was formed. Any excess above that frozen rate is directed to public improvements, such as roadwork.
The city submitted a draft report on the area to the Washington State Treasurer’s Office last month and has already received some feedback, Ridgefield Finance Director Kirk Johnson said. The city will have a second public briefing in the fall when the report is finalized. The proposal would then be brought back to the council for vote on adoption.
Washington is the last state in the U.S. to approve tax increment financing as a funding tool, Elaine Howard, a consultant who has worked with the city on the proposal, said. Since the legislation passed in 2021, a handful of taxing districts have approved their own financing areas in the state, she said.
The boundary for the proposed TIF area in Ridgefield sprawls across properties on both sides of the Interstate 5 junction, going as far west as Royle Road and as far east as 85th Avenue. The boundary also dips as far south as South 20th Way and north to North 20th Street.
Not all properties in that general geographic boundary are included in the proposed area. Howard said properties with significant development already, such as to the immediate southwest of the junction, were left out, as the area features mostly undeveloped parcels.
The report on the area identified 10 major infrastructure projects to be funded by tax increment financing. Of those, widening Pioneer Street to four lanes between 56th Place and Royle Road was one of the largest with a $35 million price tag, Johnson said.
“For public safety — fire, police — that’s really an area that for them to make their response times … We really need to get that fixed and we need to get that updated to match what the rest of Pioneer is,” Johnson said.
Another major project would be connecting South 10th Street and South 11th Street, which requires construction of an overpass over I-5.
Some of the projects will be paid for by private developers who will receive credit on traffic impact fees for their work, Johnson said. Other projects, like the Pioneer Street widening and overpass, are wholly funded by the city.
The TIF area would support $700 million in private development according to economic analysis in the report, Howard said. At full build-out, the area would support nearly 1,900 jobs directly, with $295 million in annual economic output from operations. Currently, the city has about 4,500 jobs, Johnson said.
The construction itself in the TIF area would lead to $26.5 million in state and local tax revenue, with $3.4 million in revenue annually at full buildout, according to the report.
Impacts on
other districts
The TIF area would affect a number of taxing authorities, including the city itself, the county, the port and fire districts.
Property tax levies for K-12 public schools at both the state and local level are not affected by the TIF area. Johnson said the development in the area could be a benefit for the school district as it would spread the tax base out, leading to lower levy rates for existing properties.
Of the taxing districts affected, Clark-Cowlitz Fire Rescue would see the greatest impact, with about $17.4 million in tax revenue foregone over the 25-year lifespan of the TIF area, according to the report.
The city has had conversations with CCFR on the impacts and possible mitigation, Stuart said. Using something like impact fees on development in the TIF area would require the fire district to develop a long-term capital facilities plan to identify the impacts over the course of the area’s lifespan.
Another mitigation effort would be scheduled reviews of the impacts of the TIF areas, Stuart said, not only for CCFR but all impacted taxing districts..
The fire district was opposed to any TIF area implementation without mitigation for impacts, CCFR Commission Chair Stan Chunn told the council. He said the district’s internal projections on foregone tax revenue was closer to $23 million than the roughly $17.4 million the report indicates.
“If businesses do come and build in the (TIF area) the business itself would be paying its fair share, but the distribution of those taxes would be anything but fair,” Chunn said.
The development will put a strain on the fire district given the new activity it will generate, but CCFR would not receive more funding that they ordinarily would with that growth, several staff members of the district testified.
“Except for the rare lightning strike, there are not fires where there are not people, and there are no EMS calls where there are no people,” CCFR Chief John Nohr said.
Even without the development in the area, CCFR is experiencing significant call growth in the city. The district responded to more than four times the number of calls in 2022 in Ridgefield than it did in 2012, Nohr said.
Though the fire district has laid out concerns, the city’s other side of public safety is more supportive of the creation of a TIF area. Ridgefield Police Lt. Rachel Andrew was in favor of creation of the area.
“I think that it is going to provide, really an opportunity for the city of Ridgefield to create an infrastructure that supports the growth that the city is seeing in a more comprehensive package,” Andrew said.
She said fire protection was only one piece of the public safety puzzle.
“I think that the impact that it may have on our fire partners is mitigated by the growth and opportunity it’s going to provide to the city of Ridgefield and all of the resources that are needed to support the growth of the city,” Andrew said.
