PUBLIC HEARING

Thursday, March 23, 2023 · 4 p.m. 7096 Pt. Whitehorn Rd, Birch Bay

During the regularly scheduled board meeting, the Commissioners will review a proposed increase to the General Facility Charge Rates (GFC). More information on the proposed changes to the GFC Rates can be found on the District’s website: https://bbwsd.com.

If you have any questions or concerns, please call 360-371-7100, or email office@bbwsd.com.

Interested parties may attend the meeting in person or via Zoom.

Zoom Meeting Link: https://us02web.zoom.us/j/85805016504 Meeting ID: 858 050 165 04

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TIF ...

From page 1 consultant who conducted the study, during a February 22 special meeting on TIF.

TIF guidelines

Taxing districts typically collect the previous year’s levy, the annual 1 percent levy increase and new construction costs. TIF allows an additional amount to be added that would go to the city’s general fund for the city to take out loans or bonds to fund the east Blaine infrastructure. No other taxing districts besides the city would receive the TIF revenue; however, they could benefit from additional tax revenue the development would ultimately bring.

TIF districts cannot last longer than 25 years and their boundaries can’t change, according to state requirements. There can’t be more than two active TIF ar- eas and they can’t overlap.

Using the 2023 levy rates, $3.63 of the $8.72 total levy would be available to repay the city’s infrastructure debt, according to city documents. The TIF district would cover 833 acres with an expected 1,442 homes and 50,000 square feet of commercial space.

Stowe said he looked at three scenarios on how the east Blaine housing development may occur using different project scopes and timeframes. If council decides to create an ordinance establishing TIF later this spring, the city can only collect up to the TIF revenue amount identified in the ordinance. This means if council determines it only wants to borrow $3.5 million from the TIF area, it cannot borrow more, even if the TIF area can generate more revenue. The TIF area ends when the city has paid off its debt.

The city originally was con- sidering borrowing $7 million through TIF but lowered it to $3.5 million, which is a quarter of the total $14 million estimated for new east Blaine infrastructure. The city has already secured $1 million from the state and Whatcom County, split evenly, for infrastructure and may be able to use an additional $500,000 in Covid-19 stimulus money, city manager Michael Harmon said.

Stowe told councilmembers February 22 the state would recommend how much it believed the city should borrow but the amount was ultimately up to council.

“It’s up to you in terms of what you believe you should issue debt for and how much you should issue it for,” Stowe said.

Impact on city taxpayers

In theory, TIF should only financially impact people living in the designated TIF area. TIF would allow the city to borrow money from expected increases in property tax revenues in the new east Blaine subdivisions to pay for electrical, sewer, water and roadway improvements.

However, all of the city’s taxpayers may be impacted by TIF if development is slower than anticipated or doesn’t occur at all. The city and developers Skip and Katie Jansen, of The Ridge and East Harbor Hills, and Ken Hertz, of Grandis Pond, would split the cost of the TIF debt if development is slow. Harmon said that a gap in when the city begins incurring debt and when the city begins seeing TIF funds as development progresses is expected in the first few years.

The city would need to pay the debt with its general fund reserves, which is currently around $4 million (the city is projecting using $1 million of its reserves to balance its general fund in 2023 so that number could decrease). If the general fund can’t be used to make a payment on the debt, then the city would likely raise utility rates and borrow the money from the utility funds, city finance director Daniel Heverling said. He added the city has about a year’s worth of money in the utility funds before it would need to raise rates.