By JASON COX
Of the Keizertimes
Councilor Joe Egli has an idea to pay down outstanding bond debt without extending the urban renewal district.
It got a cool reception from City Manager Chris Eppley, who said the consequences could be “catastrophic.” Nevertheless, city financial staff plan to run a scenario that would show how the numbers work.
A sense of urgency pervades the debate, with Community Development Director Nate Brown explaining the option to use urban renewal ends when the district expires.
While Egli’s proposal would include spending about $1 million in unspent urban renewal dollars, he said part of some $572,000 coming back annually to the city after the urban renewal district ends could be dedicated to making bond payments.
Urban renewal currently pays a portion of some city employees’ salaries and pays some civic center expenses. After those are absorbed into the general fund Egli expects about $332,000 would be left over.
The situation results from a local developer’s apparent inability to make payments on local improvement district bonds the city issued on behalf of Keizer Station. Local improvement districts are a government-backed way for property owners to build public improvements like street, water and sewer service.
Extending the urban renewal district means entities like Marion County, fire districts and the like receive less money than they would have otherwise. No final decision has been made about whether or how much to reimburse those taxing districts.
While a vote on extending the district isn’t expected for about another month, councilors voted Monday night to take about $35,000 from the capital outlay portion of urban renewal to pay for attorneys and consultants in preparation.
The vote was 4-1, with Egli voting no, and Mayor Lore Christopher and Councilor Mark Caillier absent.
Councilor Cathy Clark amended the resolution’s wording to note the River Road Renaissance program was not being discontinued – but it’s not getting funded, either.
Egli, a former Keizer Chamber of Commerce board president, said he wants to end what he portrayed as the city council’s habit of using urban renewal dollars to cover unexpected expense.
“It comes down to a curse and a blessing,” Egli said. “We’ve got this pot of money we go to every time we’ve got a problem. Every time we go over on city hall, we run to this bucket. At some point we told the people we’d stop doing this.”
Plans from both Egli and city staff depend on eventually foreclosing on and selling five properties owned or controlled by developer Chuck Sides. He’s currently about $858,246 past due on bond payments.
And while councilors will be asked to vote on the option next month, Councilor Brandon Smith said private discussions have been taking place for several months.
Eppley also took umbrage with media coverage of the situation, saying Sides is not receiving a bailout.
“The entity we are theoretically bailing out is the city,” Eppley said. “Understand that in this process the developer, who is responsible or the default … is going to be forfeiting property, the ownership of all of his parcels that are in default at (Keizer Station Area A), which is a significant penalty.”
In other business, the council:
• Authorized an interloan transfer to buy a police media storage system. City staff said it could keep up with the current rate of file accumulation for a decade.
• Gave permission to spend $750,000 in grants for the Keizer Rapids Park boat ramp.
• Authorized the city manager to enter into a contract for financial management software. It could lead the way for online utility billpay.
• Recommended liquor license applications for Mommy and Maddi’s along with an amended license for Plaza Morelia.