LCDC: Tale of two perspectives

M. The LCDC doesn't affect me.

U. Well, if you live in Kootenai Co or CDA, the LCDC affects you.

M. How's that?

U. Per agreement between CDA City and the LCDC, the City and County receive from the Urban Renewal Districts (called LCDC Areas in this article) the same first year assessed Property Tax for 23 years; for the same time period, any increased assessed Taxes are given to the LCDC.

M. Well, what if the LCDC Areas need road repair, snowplowing, sewer service, etc. and the money they paid to the city or county doesn't cover it?

U. That's it exactly. With increased costs, what the City and County receive in Taxes from them won't cover expenses; so Property taxes outside the LCDC Areas are increased to pay for those services. On the average, County property owners pay 7.5 percent more tax than they should and City property owners pay almost 20 percent more than they should!

M. Well, doesn't the LCDC pay for these services?

U. No, they are contracted to develop the 2 LCDC Areas by CDA Lake and the Spokane River!

M. How big is that area?

U. 18 percent of Coeur d'Alene.

M. So you are saying that increased taxes in 18 percent of CDA are going to the LCDC except for the baseline tax that CDA and the County get from these expensive Areas?

U. Exactly.

M. How much tax is diverted to the LCDC?

U. In 2011, $5,655,488.00 was diverted to LCDC.

M. Wow! So the LCDC holds it and uses it for the good of the City?

U. You'd think. No, they don't hold it. They spend it buying properties in the LCDC areas that they may rent or develop.

M. Do they pay taxes?

U. Nope, once LCDC buys a property the City and County gets zero tax money from it. At least 24 buildings are owned by the LCDC.

M. And they're Tax free? You're kidding! Why is that?

U. The City Council made the agreement!

M. You're crazy. That's unbelievable! How long has this been going on?

U. Since 1997.

M. Will it ever stop?

U. The Lake District Agreement ends 2021; the River District in 2027; both are 24-year contracts.

M. The LCDC doesn't own all the properties in the Areas, do they?

U. No, private owners in the Areas pay full Property taxes and their Tax bills show how much is given to the LCDC. For us outside the Areas, the amount is not shown on our tax bill; but our taxes increase.

M. Well, I imagine their Taxes are increasing, too, living in that high priced area! Say, do Private Contractors build in the Areas?

U. Yes, they can contract with the LCDC to help them build (usually it is for infrastructure like sewers, streets, landscaping) and the LCDC will reimburse them!

M. What a deal! Do Contractors/Developers outside the Area get these rebates?

U. Nope. Outside the Areas, Contractors pay for everything.

M. So how much money are we losing, oops, giving to the LCDC?

U. The projection is $100 million over 24 years.

M. Wow! That's a pile of money. Our Property Taxes could be lowered or stabilized or improvements made in needy areas if we had use of that money! Maybe we should vote on it!! Say, how would the LCDC get money out of McEuen Park? It's a public park, isn't it?

U. Yes, our Property Taxes support all city parks. But because LCDC doesn't save the money they get, they will borrow 14 - 16 million from Washington Mutual Trust Bank to build the 1st phase of McEuen Park and you and I will pay back that loan with our increased taxes!

M. I can't believe this! This sounds corrupt! So what happens after the 24-year contract is ended?

U. The diverted taxes will go back to the City for services. The LCDC will end and no longer will LCDC areas be supplemented by Taxes outside the Areas; and everybody's tax bill should go down.

M. I'll be dead by then!! Or taxed out of my property. Those LCDC areas are worth a lot of money.

U. True.

M. To clarify, the Lake and River Districts are part of CDA; but per the City/LCD agreement, the Districts don't pay their full share of Taxes to benefit the City & County; all increased assessed Taxes go to the LCDC to develop the Area or help private Contractors build in the Area; and LCDC owned properties are not Taxed!! So we outside the Areas pay extra taxes to help them out. What a deal It is a big inequity.

U. Yes, it is BIG and it will continue to be bigger until 2021 and 2027.

M. Does the City Council know about this?

U. They made the contract.

M. But it is not a good thing for us. Say, does this have anything to do with the petition to recall the City council? Do you think they are doing a good job?

U. I think they think they are doing what's right and they are doing it legally. The problem is, legal protocols are not always best or fair and maybe a different mind set or set of minds is needed in the City Council. Policies can always be changed.

Mary Smith is a Coeur d'Alene resident.