Docstoc

INFRASTRUCTURE FINANCING

Document Sample
INFRASTRUCTURE FINANCING Powered By Docstoc
					      INFRASTRUCTURE FINANCING




THIS REPORT WAS PREPARED WITH FINANCIAL ASSISTANCE FROM A GRANT
 PROVIDED BY THE OREGON DEPARTMENT OF LAND CONSERVATION AND
                         DEVELOPMENT.
MEMORANDUM


TO:            COLUMBIA-CASCADE RIVER DISTRICT STEERING COMMITTEE

FROM:          John Andersen, Consulting Planner

DATE:          April 9, 2007

TOPIC:         INFRASTRUCTURE FINANCING


Introduction

The purpose of an Infrastructure Financing Memorandum is to provide information on
the options for financing needed infrastructure within the study area. In the case of the
Columbia-Cascade River District (CCRD) this exercise pertains to the financing that
would be required to implement the CCRD Public Facilities Plan (PFP).

During the preparation of the PFP by the various agencies that provide water, sewer,
transportation and stormwater facilities and protection within the CCRD it was
determined that much of the financing would likely come from those agencies and
businesses that develop the land within the district. However, it was also recognized
that some of the services, particularly transportation and stormwater would require
special attention and funding.

This memorandum looks at the anticipated facilities identified for the CCRD, then
considers the funding options which may be considered by the various agencies
involved.

The final section contains a series of comments for consideration by the public service
organizations.


Columbia-Cascade Public Facilities Plan

The CCRD Public Facilities Plan was crafted by the Public Works Directors for the cities
of Fairview, Gresham, Troutdale and Wood Village meeting along with representatives
of Multnomah County’s Road Department and the Sandy Drainage Improvement
Company in a series of facilitated discussions.

The initial effort developed an inventory of existing facilities that was displayed on a set
of district-wide maps, one for each utility. These maps were then reviewed by the
Steering Committee and recommended for acceptance by the various partners’
governing bodies. After they were accepted the maps then served as a basis for
comparison with the District Action Plan. That gap analysis was aided by the decision
of the Steering Committee to make only minor changes to the existing comprehensive
plans for the four cities. This allowed the Public Works Directors (Public Facilities Plan
Sub-Committee) to use their existing Capital Improvement Plans as a beginning point in
their evaluation. Working again in a facilitated group setting the directors were able to
craft a list of the facilities that would be needed to accommodate the anticipated land
uses in the CCRD.

As a result of the analysis performed and described above the following program of
improvements was identified by the Public Facilities Plan Sub-Committee.


                                         Fairview*

Water:         Marine Drive Loop                              $700,000
               Fairview –Reynolds Site                        Unknown

Wastewater: Fairview – Reynolds Site                          $0.5 -1.0 M.

Stormwater: Sandy Blvd. Miscellaneous Improvements            $0.5 -1.0 M.

* Note:        Because of the unique condition of the Reynolds Site additional study is
               required to determine a final listing of public facilities.


                                         Gresham

Water:         12” water line and 8” water line               $937,000

Wastewater: None anticipated.

Stormwater: Project WQ-1A                                     $4.5 M.
            Project WGFC 4                                    $1.0 M.
            Project WQ 4 A&B                                  $2.9 M.

Transportation:

         Sandy Blvd.; 167 – 203rd                             $3.9 M.

         Riverside Drive extension                            $5.4 M.
         Gresham-Fairview Trail                               $4.345 M.
         Columbia Slough Trail                                $1.3 M.
         Marine Drive Trail                                   $1.178 M.
         Marine Drive Trailhead                               $0.315 M.
                                         Troutdale***

Water:

         Reynolds Site water line.                             $0.5 M.

         Water System for North Industrial Area                $0.325 M.

Wastewater:

         Reynolds and related wastewater line.                 $1.0 M.

         Sewer System Improvement for North Industrial Area $0.23 M.


Stormwater:

         Local stormwater drainage lines not including SDIC.   $1.0 M.

         Salmon Creek Weir                                     $0.15 M.

         Arata Creek Culvert                                   $50,000

         Graham Road Storm Drainage                            $0.26 M.

         North Arata Creek Drain Line                          $0.629 M.

         South Arata Creek Culvert                             $0.561 M.

         Marine Drive Culvert Bypass                           $0.526 M.

         Storm Improvements in North Industrial Area           $0.3 M.


Transportation:

         Local street related to industrial area expansion.     $3.0 M.

         NW Graham Road                                         $0.525 M.

         Street Improvements in North Industrial Area           $0.3 M.

*** Note: Some infrastructure projects (such as WA-028, ST-045, SD-N16) will occur in
the CCRD that are not listed here as their impact is confined to local sites.
                                       Wood Village

Water:

         Possible 12” water line in Sandy Blvd                Unknown

Wastewater:

         Sandy Blvd. interceptor expansion                     $67,500
         Gresham WWTP capacity purchase                        $739,800

Stormwater:

         Sandy Blvd. Diversion                                 $71,200


                                    Multnomah County


Transportation:

         I-84 and 257th Interchange                           $10.0 M. initially
         Sandy Blvd.; 207 - 238th                             $7.9 M.
         223rd Northern RR                                    $6.2 M.
         238th North Extension Study                          $50,000


                          Sandy Drainage Improvement Company


Regional Stormwater Projects:

         Arata Ditch Improvements                             $0.5 – 1.0 M.
         Salmon Creek Improvements                            $1.5 – 2.0 M.
         Pump Station Improvements                            $1.0 – 1.5 M.
         Flood Storage                                        $0.5 – 1.0 M.



Summary of Improvement Costs

Altogether there is an estimated $65 – 68 million dollars in anticipated and needed
infrastructure improvements for the Columbia-Cascade River District, much of which is
focused in regional transportation and stormwater facilities. Only a portion of the $44.4
million initially required for transportation costs will accommodate CCRD traffic
exclusively, although all of the facilities will be used by the District’s commercial and
industrial businesses to some extent and are therefore important for the area’s success.

The same is true for the $16 – 18.4 million in stormwater pipes, detention ponds and
pump improvements. These services are important to the functioning of the District and
are therefore necessary. However, much of the water they deal with will arise in
development to the south, yet it must be assisted through the CCRD in its passage to
the Columbia River.

The preceding contrasts with the water ($2.462 M.) and wastewater ($2.5-3.0 M.)
projects, which will almost exclusively benefit the developing properties. This is a
helpful distinction to make when considering where the funding is to be obtained for the
various improvements.


Financing Options

Financing for development usually falls within two categories, either the funding comes
from those developing the property or it results from local or state governmental
sources. Since much of the Public Facilities Plan focused on the developer paying for
improvements we shall look at that side of the ledger first.

When property is developed in Oregon it is the responsibility of the developer, whether
a private entity or a public agency, to construct such public infrastructure as needed to
assure the property can be used in a safe and healthy manner. Usually this means the
construction of adequate water, wastewater (sewer) and stormwater lines, as well as
streets, to and through the site. The size of the lines must be sufficiently large to handle
the water as it enters and leaves the site. It is understood that this means some uses
will require lines larger or smaller than other uses. In planning for the growth of a
particular area it is routine to set a planning standard for the area to provide a basis for
the engineering calculations that determine the size of the lines. As an example,
Fairview assumes that industrial uses will use approximately 3,000 gallons of water per
hour, which means the water sources must be sufficient to supply that amount of water
and the lines must be large enough to carry that water to the site and away from the site
(it is assumed that the site will discard a similar amount to that brought in so 3,000 in =
3,000 out). Similar calculations are made for traffic activity.

Each property owner developing their site must pay the total cost if the facilities serve
only that site. If other properties are to benefit from the service lines or streets then
each will be allocated their proportionate share. In instances where it is to the
communities financial advantage to build a line larger than needed currently the city or
other service entity will pay for the “extra” size of the line and be compensated later
when the property develops. In some communities, where funding does not exist to
advance the “extra” dollars, agreements can be made with developers who wish to
proceed with improving their property for the developer to pay for all the improvements.
The city then compensates the developer from funds paid by those later developing
properties when they connect to the larger lines.

All of the cities involved have System Development Charges for new water, sewer and
stormwater facilities, as well as connection charges for connecting the on-site service
lines to the larger system. These funds are collected at the time building permits are
issued, unless special arrangements are made, and provide monies for the city to
improve its capacity to provide, treat or transport water to or from the site. The
particular development pays their proportional share of the overall system based upon
the city’s Capital Improvement Plan and the amount of use that their site’s activities will
require.

The cities will also obtain user fees from businesses for the use of the water, sewer and
stormwater lines. These user fees are used to pay for system maintenance. Such fees
may also be used to pay for revenue bonds that the city could sell to pay for other
system improvements if needed.

Funding for construction of streets varies somewhat by the jurisdiction. The City of
Gresham controls and maintains all of the streets within their city and they have a
system development charge for street improvements, along with the ability to require
the construction of street improvements on-and-off site to assure the development is
meeting site and larger system responsibilities. The cities of Fairview, Troutdale and
Wood Village do have the ability to require site improvements. For off-site system
improvements they rely on a traffic impact analysis which is evaluated by Multnomah
County. That evaluation serves as the basis for a Traffic Mitigation Agreement which is
imposed on the developer by the city and administered by the county.

None of the cities involved have a Traffic User Fee, and therefore have no local method
for collecting a fee for the maintenance of local public streets. State Gas Tax money is
provided to each community, although it is certain that such funds are insufficient to pay
all street maintenance costs, resulting in the streets deteriorating more rapidly.

Each community also receives new property tax revenue, and a share of the County
Business Income Tax for businesses locating in Multnomah County (cities share a
portion of the first 0.6% collected in any year). A recent study by the Port of Portland
regarding property taxes paid by typical industrial uses in the Rivergate, Swan Island
and Columbia Corridor industrial areas estimates that the City of Troutdale would
realize about $4,600/acre of new property taxes for the lands developed in the Reynolds
Site. If 300 acres develop that would be $1,380,000 annually added to the city’s funds.
Property taxes and fees pay the administrative and personnel costs for providing most
public services, and with voter approval can be used to pay for general obligation bonds
where the community needs to borrow money for civic improvements.

Private financing through commercial banks or other investment organizations often is
the first source of funds for construction of buildings and infrastructure. This money is
made available through contracts between the developer and the financial institution
without the involvement of the local governments.

It is also sometimes possible to qualify for loans or grants from development agencies.
The City of Gresham offers grants (New Industries Grant Program) to qualifying
businesses in their urban renewal area to assist them to start-up new or expand existing
enterprises in the development area. The other three cities have not created such
funding options.

The State of Oregon provides a number of programs designed to make it easier for
businesses to obtain bank loans, such as:

      •   Oregon Business Development Fund
      •   Oregon Business Retention Program
      •   Oregon Capital Access Program
      •   Oregon Credit Enhancement Fund.

The federal government has available:

      •   US Small Business Administration 504 Program-
          Provides loan guarantees for small businesses.

The State of Oregon offers (and guides federal) loans and grants through the Oregon
Economic and Community Development Department (OECDD). These programs are
generally described as follows:

      Entrepreneurial Development Loan Fund-
      Provides initial direct loan to help companies get started in Oregon.

      Industrial Development Revenue Bonds/Express Bonds-
      Designed to help Oregon manufacturers grow, these are tax-exempt bonds
      issued by the state of Oregon. They provide long-term financing for land,
      buildings and equipment.

      Brownfields Redevelopment fund-
      This fund provides money for site assessment to cleanup properties where
      known or suspected environmental contamination is a barrier to redevelopment.

      Coalition Brownfields Cleanup Fund-
      Funds are to assist private persons and local governments to cleanup
      brownfields (existing developed areas) to make sites ready for redevelopment.

      Community Development Block Grants-
      Construction and improvement monies for a wide variety of facilities and
      infrastructure that will primarily benefit low-and-moderate-income persons.
      Immediate Opportunity Fund-
      By assisting in the construction and improvement of highways, streets and roads
      this fund supports the location or retention of firms, revitalization of business or
      industrial centers and the certification of industrial sites in Oregon.

      Port Revolving Fund-
      Funds for construction and/or improvement of facilities and infrastructure that
      promote maritime shipping, aviation and commercial activities of ports.

      Safe Drinking Water Revolving Fund-
      Low-cost financing for construction and/or improvements of public and private
      water systems.

      Special Public Works Fund-
      Construction and/or improvement of infrastructure needed to support industrial,
      manufacturing and certain types of commercial development.

      Water/Wastewater Fund-
      Funds are for construction and/or improvement of water and wastewater systems
      to meet state and federal standards.

There are also a number of tax exemption and tax credit programs available in Oregon.
The following briefly describes them:

      Construction-in-Progress-
      Exempts new commercial facilities from property taxes for a period of time.

      Food Processor Exemption-
      Provides that processors of raw and fresh fruits, vegetables, legumes, nuts or
      seafood receive new machinery and equipment exemption from property taxes
      for five years.

      Oregon Investment Advantage Tax Exemption-
      Helps businesses start or locate in Oregon.

      Strategic Investment Program (SIP)-
      Administered by Multnomah County locally, this program exempts a major
      portion of large capital investments from property taxes, when businesses meet
      local and state standards.

      Business Energy Tax Credit-
      For investments in energy conservation, recycling, renewable resources and
      less-polluting transportation fuels.

      Dependent Care Tax Credit-
      Provides two different credits for employers.
       Federal/State Worker-Based Tax Credits-
       Three programs provide incentives to businesses for hiring certain workers.

       Pollution Control Tax Credits-
       Tax credits for facilities that prevent, reduce or control one of the following: air,
       water, noise pollution; solid waste, used oil by recycling or providing for
       appropriate disposal.

       Research Tax Credits-
       A corporate tax credit for qualified research conducted in Oregon.


As illustrated above a wide variety of private and public financing or financial incentives
are available to assist in the development of industrial areas in Oregon. In addition,
Oregon provides for Enterprise Zones which will be discussed further in the project
memorandum on incentives.


Comments

Because the CCRD has a defined development area it was possible for the four cities to
create public facility plans for each portion of the District. It was the determination of the
Public Works Directors that the benefit from the anticipated water and wastewater lines
would be exclusively to those entities developing the properties, which means the $2.5
million needed for water lines and $2.5 – 3.0 million needed for wastewater will come
from payments made by the property developers. Since the largest undeveloped area
within the CCRD is the Reynolds Site, this means most of the burden for paying for
those improvements will fall on the Port of Portland. The Port is an experienced
development organization that has available financial and staff resources to assure that
the appropriate service lines are constructed to each community’s standards. The Port’s
costs will be recovered when the property is sold or leased to new businesses. The
communities’ administrative costs will be compensated by the increased property and
business taxes that will be paid to the cities and county.

For non-Port lands private financing is the most likely source of money for the water and
wastewater infrastructure.

Two infrastructure categories will require outside funding and consistent collaborative
efforts by the partners. These services are transportation and stormwater management.

While local streets such as the $3.8 million dollars of improvements envisioned by
Troutdale will be developer funded, the other $40+ million in improvements are eligible
for regional and state (includes federal dollars) funding. The partners should continue
to work collaboratively to obtain sufficiently high priority for CCRD projects to qualify for
moneys through the Metropolitan Transportation Improvement Program (MTIP) and
Oregon Transportation Plan and related Improvement Program. It has been
demonstrated that working together the partners have been substantially more
successful in attracting needed regional and state dollars than has occurred in the past.
Continued cooperation is critical to assuring these important funds are forthcoming.

While the local elements of the stormwater improvements in all four cities will be funded
by developers (on-site) or system development fees (off-site) there remains $3.5-5.5
million, of the total $16-18.4 million, that will require new cooperative agreements and
funds. Some of this funding could be obtained from state sources (see page 7) but it is
likely that local resources will be needed as well. Since businesses in CCRD are likely
to benefit only partially from these improvements, it is appropriate that they fund only
their portion of the issue. Once the regional management plan is completed the actual
amounts of water, and associated funding requirements, can be reviewed. Fees paid
by businesses in the Sandy Drainage Improvement District should cover some of the
cost, either directly or with bonding assistance. Other regional water costs will have to
be negotiated with the pertinent cities to assure proper allocation of resources.

Industrial areas generate substantial truck and employee traffic (at least the successful
ones do). It would be prudent for all of the cities to consider adopting a Street User Fee
for all areas of each city to assure adequate street maintenance. Further research into
the Immediate Opportunity Fund could also provide needed transportation funding.

Financially the CCRD is well positioned to obtain the necessary funds required to
provide the public infrastructure required to site new businesses in a safe and healthy
manner. The most important resource will be cooperation and an on-going commitment
to the development of the area.

                                       Summary
      •   Work with Port of Portland to create a list of infrastructure projects to be
          funded by them
      •   Use System Development Charges to fund infrastructure
      •   Seek local cooperative agreements and state funding for a regional
          stormwater solution
      •   Consider adoption of a Street User Fee
      •   Continue to work collaboratively on obtaining regional, state and federal
          transportation funds
      •   Continually review the status of CCRD infrastructure projects
ATTACHMENTS

    Gresham New Industries Grant Program

    Gresham Enterprise Zone

    Port of Portland Anticipated Property Taxes Study

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:6
posted:9/13/2011
language:English
pages:12