July 27, 2024
Dear Editor,
The primary function of a Board of Directors is providing fiduciary oversight. That includes actions such as reviewing relevant signed agreements and requiring proof of payments in the form of invoices/receipts, to verify accuracy, etc. Yet, on 06/12/24, none of this standard oversight occurred when the PDA unanimously approved (6-to-0, 3 absent) a $635,612.11 Northgate TIF disbursement to the City of Pocatello based on a City-provided invoice lacking backup documentation or a signed agreement. The City also intends to request an additional $1,383,476.76 as more tax increment becomes available.
In all fairness, the PDA was told in response to a question about whether they needed an Owner Participation Agreement (OPA) that “ . . . there is a recorded agreement already for these reimbursements which kinda acts as its own OPA.” They were told they could go that route (to do an OPA), but they already have those agreements in place that are signed by all these entities (the PDA, City, County) that specify these reimbursements and that completing an OPA would be redundant. No one asked to see this signed document.
To be clear –there are NO recorded/signed agreements approving reimbursements between the PDA and any involved public parties or that establish a formal reimbursement schedule. A full five years after the May 2019 “Northgate Plan “approval, why are there no signed agreements to document both contributions and disbursement of TIF increment?
The “Northgate Plan” (NOT a signed contract) specifies the intent for the public entities to be repaid BEFORE private developers. It includes a list of possible projects and estimates, but that’s where it ends. The “Northgate Plan” (including the 3 pages provided to the Board) has language stating: “The actual costs to be reimbursed by the PDA will likely vary from the costs detailed here as they will be subject to a specific Owner Participation Agreement (‘OPA’) to be negotiated with the PDA once an urban renewal district is created.” And, in the “Cooperation with Public Bodies” section it specifies: “in the event the Agency is participating in the public development by way of financial incentive or otherwise, the public body shall enter into a participation agreement with the Agency . . .”
While PDA membership changes, they have been informed periodically that the gathering of costs and creation of OPAs were the next steps for the Northgate TIF. At a January 2022 training, the PDA’s attorney said: “So, the next step in this project area is what was contemplated by the plan itself is entering into an Owner Partnership Agreement . . . so that is on deck to be moving forward this year.”
She additionally said: “The public entities were contemplated in the plan as being paid out first. I do think there is probably a negotiation that can occur between the private developers, the County and the City and the Agency, as to what percentage is paid out to whom and when. But, do we want to share the dollars that’s coming in? Or do we want to first fund . . . umm . . . just the Agency reimbursement? Or should we first fund the County or is it the City? I do think we have some flexibility there.”
And, in response to a question from former-Commissioner Tovey about HOW the PDA should request its reimbursement, she said (in part): “Yes — I – there’s an estimate as to what was going to be used to fund the I-15 (interchange). We need to work with some actual dollars . . . So that cost documentation really should be submitted through the cost document process through an OPA.” Despite three of the Board present on 06/12/24 and four city staff (who provide PDA support) having attended that training, why did no one recall this counsel? What is the rush behind circumventing development of a plan and written agreements so the City receives $635K+ of its reimbursement ahead of all other entities?
Additionally perplexing, P.A.G.E. informed County Commissioner Hough (also a PDA member) two months earlier about this impending City reimbursement request and the lack of any signed agreements—easily confirmed through the PDA attorney or by requesting written agreement(s). Couldn’t Bannock County use at least a portion of its $1.3M+ contribution rather than wait another 2-to-5 years?
During my 4.5 years attending PDA and City Council meetings, I’ve heard contradictory claims regarding what order TIF money should be disbursed. Former-Commissioner Tovey indicated at the 2022 training that the PDA was first in-line for repayment with the County being second. To the contrary, Mayor Blad has said the City is first. The January 2022 discussions indicated the intention was to repay the three “Northgate Interchange” public contributions first, then public road development, then public infrastructure projects outside TIF boundaries. If that were the consensus, the interchange contributions were: the PDA = $1.6M, Bannock County = $1.3M, and Pocatello = $450K. These amounts exclude any monetary/in-kind contributions toward the Northgate/Olympus Road development or supporting infrastructure projects outside TIF boundaries.
As a separate and distinct entity from the City, PDA decisions should be in the best interest of the PDA. As I communicated during the PDA FY25 Budget Hearing, ensuring the PDA receives its reimbursement provides the PDA with funds to help secure potential development projects versus being limited by increment reimbursements developers may wait years to receive.
It’s not in dispute that the Northgate TIF increment was intended to provide reimbursement to the public contributors before the private developers. What’s disputed/disturbing is the complete lack of a plan or agreements after 5 years, and the manner in which this disbursement occurred without signed agreements, relevant facts and complete documentation – all fiduciary responsibilities of the PDA. Public-entity contributors will all get reimbursed eventually. But, the PDA Executive Director estimated it’ll take approximately 5-to-6 years, which utilizes 10 of the 20-year TIF lifespan. It’s uncertain without an OPA, how much is owed to private developers.
The Idaho Legislature continues to further restrict urban renewal agencies (URAs) because the Idaho public is dissatisfied with their return on investment and lack of oversight. Actions taken with very little contemplation, financial analysis or fact-finding earned the PDA (past and present) deserved criticism that continues to plague them. That said, PDA Board members deserve a degree of latitude since 2/3 are unpaid, volunteer-appointed members who are not provided adequate urban renewal or board training.
If URA supporters want to see this tool continue (used well, good outcomes can be achieved), the PDA Board must make concerted efforts to more thoroughly fulfill their fiduciary responsibilities. This includes better efforts to educate themselves on agenda issues, ask more probing financial questions, verify information, and generally DO MORE than show up at 30-to-60-minute monthly taxpayer-provided lunch meetings. Taxpayers expect more, and we deserve better oversight of our “investments.”
Heather Disselkoen, Pocatello
