By JASON COX
Of the Keizertimes
Taxing entities like Marion County, Keizer Fire District and others impacted by a proposed extension of Keizer’s urban renewal district would be eventually compensated by foreclosing on and sell land affected by outstanding bond debt, the city manager told county officials this week.
But Marion County commissioners, fresh off cutting 56 beds from the county jail due to a funding shortfall, may seek a concrete arrangement. No firm date has been set for the county commission to oblige. The Keizer Fire District board has already agreed to give its support.
At a Monday management update – akin to a work session where final decisions are not generally made – Commissioner Sam Brentano told City Manager Chris Eppley firm arrangements for repayment, possibly with interest, may be part of the deal.
“How do you justify transferring the risk to the county?” Brentano said. “There has to be a real guarantee, not just you hope you’ll pay it back.”
City officials have been meeting with entities like Keizer Fire District, Marion County and Salem-Keizer Schools to round up support for extending the urban renewal district. Eppley said the city has until December to extend the district so that a delinquent bond holder’s local improvement district debt won’t massively impact basic city services.
The latest plan includes collecting 30 percent of the amount allowed to be collected, leaving the county, fire district and others with the remaining 70 percent. The city’s plan would collect about $6.2 million over approximately four years to keep with the fiscal repayment model.
Part of the city’s repayment plan also includes taking approximately $1 million set aside for River Road business improvements to pay towards outstanding bond debt.
The City of Keizer is responsible for any debt developers or property owners are unable to pay. Chuck Sides, a Keizer Station co-developer, owns or controls five parcels and is behind more than $800,000 in payments.
“The city’s general fund is pledged, but it was required to get the interest rate necessary to make that project viable,” Eppley said.
He said addressing the issue quickly will allow the city to keep up with bond payments without large impacts to public services, and hopes rising valuations in Keizer Station continue so that the land in question could be sold at some point after repossession.
“Honestly, if the market wasn’t where it was … we would liquidate (the land) and solve this issue,” Eppley said.
However, he added the “great risk” the city took on will produce more tax revenue for all involved taxing entities in the long run, including the county.
Commissioner Patti Milne expressed concern about short-term funding losses
“I’m very concerned about the negative impacts on the county,” she said.
“We’re going to forego things we need to do at the county to make this happen,” added Brentano, who pushed for some sort of reward in order for the county to take on risk.
But Eppley reminded commissioners of the possible trickle-down effect from a massive disruption in city services.
“We’d be looking at significant layoffs at the city … and significant reductions in service, including law enforcement,” Eppley said.