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John Williams: Fire district can demand that city return about $500,000 in property taxes

Hey, Clackamas Fire District #1. Pamplin Media Group reports say you have a shortage of operating cash. Need a little help? I may have part of an answer to your problem. You need money, and the Oregon City Urban Renewal Agency has money. This fiscal year OCURA legally diverted $3 million from your budget and the budgets of all other overlapping taxing districts.John Williams

You can get your share back. It's easy as pie. Yearly, property tax money, available from improved taxable property values, is diverted from local government budgets to a special urban-renewal account. Actually, it's in a bank, sitting idle, unspent, earning interest. At least at last check, it was.

However, by state regulation ORS 457.440(3): "All moneys remaining unexpended from the special fund…after payment of all …indebtedness is provided for…shall be turned over to the county treasurer by the agency and prorated by the treasurer back to the taxing districts…in proportion to the amount of money in the fund attributable to each taxing district…".

If OCURA has no debt, Clackamas Fire should get back about $500,000 in property tax funds! Will that help? The Oregon City UR executive director should notify the county assessor of the facts, and the cash will be returned. The library district, the state school fund, the city, the county and all the taxing districts will also get cash back.

Why hasn't the OCURA met this legal commandment before? Why are Oregon City commissioners soliciting and holding money they don't need? Why does the UR executive director (OC's city manager) continue to ignore the state constitution and regulations? It can't be that he and the commissioners don't know the law, having been reminded dozens of times over the years.

If they don't or won't return the tax revenues to the rightful owners, what to do? How does a citizen shake up a UR Agency seemingly stuck in neutral? How about this. Clackamas Fire's Board of Directors, or a property taxpaying citizen in the fire district, could file a writ of mandamus demanding the OCURA "do its lawful duty." Unfortunately, there is no "cop on the beat," no enforcement agency built into urban-renewal regulations. Put the fire district's lawyer to work. Let the court decide.

Now a related issue: Why is OCURA paying hundreds of thousands of dollars to Oregon City for "administrative expenses" or legal charges when ORS 457 regulations lay out, in numerous chapters, it is a violation of the law to use tax-increment revenues for any expense except for paying debt? Even the Good Practices Manual of the Urban Renewal Association shouts out "tax increment revenues are not "general revenue."

UR tax income is exclusively for paying debt. UR as legislated provides for "tax-increment financing", not "tax-increment billpaying" or "tax-increment storefront improvement funding." UR is a financing system. Nothing else.

Believers in urban renewal see UR as a useful economic "tool." They may be correct. Maybe a realistic economic project could improve business in Oregon City. Useful or not, the OCURA and the city must operate within the law. It's a moral imperative. If the city's manager attorneys and elected commissioners can't or won't follow the instructions of the state constitution and the regulations written to operate UR fairly, it's time to make some changes. Elections are coming.

John Williams is a former Oregon City mayor.


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