Community Finance Strategies The Alphabet Soup of Community Finance Strategies A Look Into Various Public Finance and Tax Measures for Local Governments in Washington State By Patrick Malone, Horizons Coach

Public Finance Districts Port and/or Public Utility District Port and/or Public Utility District (most often countywide taxing and bondable districts with very broad economic development authority) Parks-Recreation District and Parking & Transportation Benefit Area Parks-Recreation District and Parking & Transportation Benefit Area (specific geographic taxing districts – often countywide – for recreation or transportation improvements) Public Development Authority and Facilities Districts Public Development Authority and Facilities Districts (specific geographic area revitalization tool by issuing bonds) Local Improvement District Local Improvement District (small area, short-term property taxing district for specific street and/or utility improvements) Parking & Business Improvement Area Parking & Business Improvement Area (small area business/property taxing district for neighborhood revitalization and marketing)

Public Finance Districts What Can a Parking and Business Improvement Area Do? The activities in a parking and business improvement area are financed through a special assessment that is imposed on businesses, multifamily residential developments, and mixed- use developments located within the geographic boundaries of the area. The assessments can be used to finance: construction, acquisition, or maintenance of parking facilities in the area; decoration of public areas; promotion of public events in public places in the area; furnishing of music in any public place in the area; provision of maintenance and security of common public areas; or management, planning, and promotion of the area, including the promotion of retail trade activities in the area. Parking and business improvement areas are not explicitly authorized to promote tourism. Parking & Business Improvement Area (small area business/property taxing district for neighborhood revitalization and marketing) Example: Downtown Spokane Partnership

Public Finance Districts LIDs are a means of assisting benefitting properties in financing needed capital improvements through the formation of special assessment districts. A variation of the LID is Utility Local and a Road Improvement District. LIDs play a positive role in developing and enhancing municipal infrastructure. Local Improvement District (small area, short- term property taxing district for specific street and/or utility improvements)

Public Finance Districts What Powers Do Public Development Authorities Have? The powers of a PDA are provided in chapter RCW. PDAs may: Own and sell real and personal property; Contract with a city, town or county to conduct community renewal activities; Contract with individuals, associations, corporations, the State of Washington and the United States; Sue and be sued; Loan and borrow funds and issue bonds and other instruments evidencing indebtedness; Transfer funds, real or personal property, property interests or services; Engage in anything a natural person may do; and Perform all types of community services. Public Development Authority (specific geographic area revitalization tool by issuing bonds) Example: Pike Place Market

Public Finance Districts Park and Recreation Districts (RCW – for counties) Park and Recreation Service Areas (RCW – for counties) Metropolitan Park Districts (RCW – for cities and counties) Parks-Recreation District (specific geographic taxing districts – often countywide – for recreation improvements) Example: Tacoma Metropolitan Park District (zoo)

Public Finance Districts Parking & Transportation Benefit Area (specific geographic taxing districts – often countywide – for transportation improvements) Example: Metro in King County

Public Finance Districts Port districts are hereby authorized to be established in the various counties of the state for the purposes of acquisition, construction, maintenance, operation, development and regulation within the district of harbor improvements, rail or motor vehicle transfer and terminal facilities, water transfer and terminal facilities, air transfer and terminal facilities, or any combination of such transfer and terminal facilities, and other commercial transportation, transfer, handling, storage and terminal facilities, and industrial improvements Port District (most often countywide taxing and bondable districts with very broad economic development authority) Example: Grant County

Public Finance Districts Broad powers including; – Water & irrigation works, – Electric energy, – Hydroelectric generation, – Sewage systems, – Telecommunications, – Community revitalization financing (TIF) Public Utility District (most often countywide taxing and bondable districts with very broad economic development authority) Example: Grant County

Public Finance Districts Authorized by Chapter 212, Laws of 2001 (or RCW 39.89) Allows cities, counties and port districts to sell general obligation bonds to make public improvements and then repay them from increased property tax revenue (or the increment) Community Revitalization Financing or Tax Increment Financing Example: Airway Heights/Hwy 2 Business Park

Public Finance Districts And, One More….. REGIONAL TAX BASE SHARING (Minnesota is our best example – no specific enabling legislation in Washington State)

Community Finance Mechanisms Community Development Financial Institutions (CDFIs) Community Development Financial Institutions (CDFIs) (most often countywide taxing and bondable districts with very broad economic development authority) Community Development Credit Unions Community Development Credit Unions (a state chartered member owned/operated financial institution) (a state chartered member owned/operated financial institution) Community Housing Development Organizations (CHDOs) Community Housing Development Organizations (CHDOs) (specific geographic taxing districts – often countywide – for recreation or transportation improvements) Community Endowments or Foundations Community Endowments or Foundations (a great way to capture and retain community wealth in perpetuity)

Community Finance Mechanisms General term encompassing numerous finance strategies 1994 Federal legislation created a CDFI fund within the Treasury Department Certification is required to gain access to the fund (certification is good for 3 yrs) Community Development Financial Institutions (CDFIs) Example: Neighborhood Assets by Spokane Neighborhood Action Program

Community Finance Mechanisms The credit union is an institution that is open to all members of the community and directly accountable to them. Members are not simply clients and they are not just beneficiaries of a small loan fund. They are shareholders with a political voice in the institution that holds their savings. TULIP Cooperative CU is a U.S. Treasury Department certified CDFI, or a community development financial institution. To become a CDFI, we have demonstrated our primary mission is to promote community development and we have a designated target market that is either low-income. Learn more about CDFIs and the certification process at TULIP Cooperative CU is a member of the National Federation of Community Development Credit Unions. Learn more about the Federation and the work of other community development credit unions at Community Development Credit Unions Example: Thurston Union of Low-Income People (TULIP)

Community Finance Mechanisms A CHDO (pronounced cho'do) is a private nonprofit, community-based service organization whose primary purpose is to provide and develop decent, affordable housing for the community it serves. A CHDO is certified by US Department of Housing and Urban Development Salem Arms is a small not-for-profit organization whose mission is to provide permanent supportive housing for chronically mentally ill individuals who are homeless at the time of referral to our program. Salem Arms was created in We started with one apartment building with 8 tenant units. In 2005 we were approved for a 10 unit expansion and now lease 10 other units from Northeast Washington Housing Solutions for a total of 18 units. Community Housing Development Organizations (CHDOs) Example: Salem Arms, Spokane

Community Finance Mechanisms Community Endowments or Foundations Example: Inland Northwest Community Foundation What are Community Foundations? Community foundations are tax-exempt public charities serving thousands of people who share a common interest—improving the quality of life in their area. Individuals, families, businesses, and organizations create permanent charitable funds that help their region meet the challenges of changing times. The foundation invests and administers these funds. All community foundations are overseen by a volunteer board of leading citizens and run by professionals with expertise in identifying their communities’ needs. In the United States, community foundations serve tens of thousands of donors, administer more than $31 billion in charitable funds, and address the core concerns of nearly 700 communities and regions. Community foundations: know their communities—what the needs are and how to address them share your interests care about the future offer giving vehicles that are easy to set up and manage, and that provide tax benefits