Sewer Plant Funding Ideas Last December, the City initiated a comprehensive study of revenue options to fund the new sewer plant. This process is often referred to as “The Green Ribbon Committee”. This citizen group evaluated and discussed a wide array of funding options for the new plant. The two that are most interesting are an urban renewal district and a tax on prepared food and beverages. The combination of these two new revenue sources could pay for a substantial portion of the new sewer plant. The situation is a bit more complicated given the recent increase in the project cost which is now expected to exceed $7.2 million. Here is the text of the Green Ribbon report along with graphs of the revenue options. Note the tabs at the bottom of the Excel spreadsheet. These allow you to examine all the details of the revenue options. The urban renewal district captures property taxes on value above a “frozen level” that would normally go to other taxing districts. The current goal is to freeze the value of the district at Jan 1, 2005. The good news about this approach is that it does not result in any tax increase to Yachats property owners and has the potential to generate a lot of tax revenue that the City would not normally see. A citizen group has been formed to guide the City in the formation of an urban renewal district. The general consensus among those individuals most informed about this approach is there is nothing negative about this concept for Yachats residents. Taxes do not increase and it can provide considerable revenue for sewer plant financing. The only cautionary point is the fact that it takes time for the revenue stream to build making the financial impact greater in later years. A public meeting to discuss the urban renewal concept and related topics has been scheduled for May 23 at 6:00pm. The public is invited and will be provided an opportunity to comment on the plan and ask questions. The meeting agenda is available on the City web site. The prepared food and beverage tax was proposed by a local business owner and is supported by the owner of the Drift Inn. It calls for a 5% tax on prepared food and beverages. Initial estimates of the revenue potential are as high as $250,000 each year. Public discussion about this concept is only just beginning. The key point here is this is entirely new money and it reduces the need for more traditional revenues like utility rate increases or property taxes. The Public Works Commission continues to review current utility rates and is expected to make recommendations to the City Council sometime this summer. The commission review is expected to include the rate equity issue that was raised last year. No specific information about the direction future utility rates might take is available at this time. Based on the current utility rates and 2005 water consumption, residential property uses 57% of the water and pays 80% of the utility fees. Property Taxes are an option for sewer plant financing. Last year the voters approved the use of property taxes to finance the sewer plant so no additional voter authorization is needed to use this option. As much as possible, audio recordings of these meetings and meeting handouts will be posted on this web site.
QUESTIONS OR COMMENTS? Last Modified : 5/16/06
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