New built and installed installed by Richard Venable III
and Steve Britton of CAPCO. Photo by Dian Courtright.

The latest Urban Renewal  project in Coquille is this  decorative gate installed at  old City Hall. Urban  Renewal has given downtown  Coquille a face lift  starting with the National  Bank building at the corner  of Central and First Streets.  Many of the awnings on  First Street were put up and  the green metal benches  located around town are all  part of the project. The  largest undertaking was the  sidewalks and utilities at the  new Credit Union building  on Second and Adams.

How does Urban  Renewal work?  The Oregon Constitution  allows the Legislature to set  up a system to finance  Urban Renewal. Oregon  Revised Statute Chapter 457  describes how the system  works. This law gives each  city and county the ability to  activate an Urban Renewal  agency with power to propose  and act on plans and  projects to remove "blight."  Examples of blight include  buildings that are unsafe or  unfit for occupancy or the  existence of inadequate  streets. The area where the  work is to be done is known  as a "plan area."

An Urban Renewal  agency is activated when the  city or county governing  body declares by ordinance  that a blighted area exists in  the city or county and there  is a need for an Urban  Renewal Agency to function  in the area. The Urban  Renewal Agency proposes a  plan for improving the area.  Following public notice and  hearing, and after considering  public testimony and  planning commission recommendations,  the city or  county may approve the  Urban Renewal plan by  ordinance. Unless required  by local law, no public vote  is necessary.  In FY 2006-07, there  were 55 active Urban  Renewal Agencies.

All but  four were city agencies.  There were 84 plan areas  located in 23 counties.  How is Urban Renewal  funded?  Most Urban Renewal  plans are funded substantially  from portions taken out  of local government property  tax levies (division of tax  revenue.) Many Urban  Renewal plans adopted  before December 6, 1996  may also raise revenue from  an Urban Renewal levy  (special levy revenue.)  These resources may only  be used to pay principal and  interest on indebtedness the  agency has incurred for the  Urban Renewal plan. When  these resources have accumulated  sufficiently to pay  off all outstanding principal  and interest on indebtedness,  the Urban Renewal Agency  is required to notify the  assessor to stop division of  tax.

How does division of tax  work?  Division of tax revenue is  calculated by splitting local  government property taxes  between the local governments  that levied the taxes  and the Urban Renewal  agency. The split is recalculated  each year based on  value growth within the plan  area. This tax splitting may  have a couple of different  effects depending on the  levy type. For operating  (permanent rate) levies that  are levied at a particular  rate, division of tax does not  change the tax rate or cause  much change in the overall  amount of tax billed, but it  does reduce the amount that  gets distributed to the local  governments.

In contrast,  division of tax affects some  bond and local option levies  that are levied to raise a particular  dollar amount by  causing those tax rates to be  higher in order to raise  enough tax to cover both the levied amount as well as the  division of tax amount.  Both the division of tax and Urban Renewal special levy  amounts are subject to the general government tax limitation  (Article XI, section 11b of the Oregon Constitution),  and are distributed to the Urban Renewal Agency.  What type of taxes are divided in the division of tax  method?  Only ad valorem property taxes for local governments  that have an Urban Renewal plan area within their boundaries  are divided. These can include operating, bond, and  local option taxes.

Taxes for schools, community colleges,  education service districts, cities, counties, and special districts  (such as fire districts, water districts, and ports) are  divided.  Some taxes are not divided. Bond and local option taxes  approved by voters after October 6, 2001, are not divided  for some Urban Renewal plans that were adopted before  October 6, 2001. These levies are also not divided for urban  renewal plans adopted on or after October 6, 2001. The  Urban Renewal special levy is not divided. Any tax  imposed on any basis other than the value of the property is  not divided. The most common taxes not based on value are  fire patrol assessments and the state manufactured dwelling  fee.

A taxing district seeking new taxing authority must consider  if the tax would be subject to Urban Renewal division  of tax that would reduce the tax available to the district. If  so, the district must ask the voters for enough tax authority  to provide the district with adequate funds after the Urban  Renewal division of tax amount is subtracted.  How does the special levy work?  The voters approved Measure 50 in 1997. This measure  required the Legislature to protect existing Urban Renewal  plans from losing revenue as a result of the measure.

The  division of tax method created by Measure 50 produces less  revenue than could have been produced under the prior  method. Special levy power was created to protect plans  from this loss. Plans adopted before December 6, 1996, are  protected.

The law allows these plans the option of imposing a special  levy up to a maximum amount. The assessor calculates  a separate tax rate for each special levy. The levy is billed  to all taxpayers in the city or county that established the  plan. Taxes imposed for the special levy are not divided.