REDCO was formed in the 1990's to bring economic development to the small town of Rainier, Oregon. Rainier had been dependent on tax money, collected from the Trojan Nuclear Power Plant. Since the shut down of Trojan the city has found themselves in dire need of a new tax base. Thus REDCO was born out of desperation. REDCO was instrumental in securing US Gypsum in to the area. REDCO borrowed $3.2 million dollars from USG to purchase the property. USG now sits on the said property.
The deal between REDCO and USG was purely simple, REDCO borrows the money from USG to purchase the property, and in return USG gets the property and REDCO would pay back the borrowed $3.2 million plus a total payment with interest of $7.4 million, like I have said before a pretty sweet deal for USG. Remember that USG was awarded approximately 7 years of no tax payments into the county/ city of Rainier.
REDCO was bound for trouble early on when then members of the REDCO board decided to limit the tax revenue collected from the US Gypsum plant. They decided that REDCO would only receive a total of $300,000.00 per year from USG, when it came on the tax rolls. The rest of the money would be distributed through out the other special districts in the county. This was a terrible mistake on the part of the REDCO board, by capping monies collected from USG, REDCO would have a shortfall of tax money collected from USG and would not be able to make the $600,000.000 payment on their loan to USG.
Resulting in an attempt from REDCO to ask for a pay back from several of the other special districts collection of the tax monies directed to them, this action may not be legal and REDCO has taken the problem to court and are waiting for a judge to render a verdict on this matter, hoping for a definite answer either way in late August or September of 2007.
While REDCO awaits the verdict, they have been spending monies on several projects with in the REDCO boundaries, knowing full well that they may not have the revenues to meet their obligations. If the verdict comes back that they cannot receive monies promised to the other special districts than REDCO will have to place a NEW SPECIAL TAX on the taxpayers in the REDCO boundaries.
When I was researching REDCO several years ago I found a document that REDCO had sent out to the other special districts, in this document it laid out the proposed back backs from each special district including Columbia County. At the end of the document it said that REDCO would take the monies collected from the other special districts and pay on the USG re-payment bill or USE THE MONIES COLLECTEDTO PAY ON THE DEBT/OR USE FOR OTHER SPECIAL ACTITIVES AT THEIR DESCRITISEN. I brought this document to the attention of the board of County Commissioners and they agreed that if the monies were collected from the other special districts than the money should go toward the debt. Commissioner Tony Hyde made it clear that the debt should be paid off before any new projects were okayed.
Evidently the City of Rainier along with REDCO does not agree to curtailing their spending until the USG verdict comes in, they have continued to match grants from various state agencies to beautify their city. I can understand that the city of Rainier wants to improve their fair city BUT maybe it would be better to wait until the judge rules on this boondoggle, if he rules against them it could mean a increase up to $3.00 per thousand tax obligation for the taxpayers in the REDCO district. Maybe the city of Rainier and REDCO again have counted their chickens before they were hatched, I hope this rush to spend does not come back to bite REDCO and the city of Rainier. Most importantly to cause a substantial increase of tax liability on the hard working people in the REDCO area.
Some in the City of Rainier and some on the REDCO board have taken offense at Commissioner Tony Hyde for his remarks, I have not seen eye to eye with commissioner Hyde on many issues but I find that I have to agree with him on the point that REDCO and the City of Rainier should not start any new projects until the debt to USG is paid off. Hyde, asked that the special levy be reduced or eliminated. He said that when the county agreed to pay back a share of increased taxes to help meet the annual payment, the commissioners had said that the levy should not be set at a rate higher than the one in the 2005-2006 fiscal year.
However, the addition of the USG property to the tax rolls would bring in more money even at a low rate, and Hyde said the county should have put a cap on the amount that could be raised as well as a cap on the rate.
He asked that REDCO finish its current projects but not start any new ones.
As an urban renewal agency REDCO also collects some money from a special levy tax, and has used this as a local match to get grants for the city.
The budget sets the special levy at $158,064, which is just over 70 cents per $1000 valuation.
. REDCO contributed $142,000 in park improvements to qualify the city for a $2,250,000 grant from the Local Streets Network Program of the Oregon Department of Transportation to extend A Street to the west.
The new boat launch was built with $491,737 from the Oregon Marine Board and $422,824 from the Oregon Department of Fish and Wildlife. REDCO gave $56,273 for the local match.
OECD (Oregon Economic and Community Development) grants were used for the new senior center ($561,000 from the state and $62,500 local match from REDCO) and the city hall remodeling and elevator installation ($251,500 state money, $25,650 from REDCO).
The new boat slips and transient tie-up at the city marina had an Oregon Marine Board grant of $363,600. REDCO contributed $134,384 to provide some space for commercial vessels such as the Empress of the North to dock and bring sightseers.
The group's most recent contribution was $81,970 to add to a grant of $111,970 from the Oregon Parks Commission for a new Little League baseball field. Rainier Little League gave another $30,000.
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The Rainier City Council voted to approve an amendment from the Oregon Department of Transportation adding $221,811 to the money allotted for the Highway 30 (B Street) enhancement project, bringing the total ODOT contribution to $961,180.
The total cost of the project is estimated to be $1,115,167, including a $50,000 ODOT Bike-Ped grant and a local match from the Rainier Economic Development Council, which increased its share by $25,387 to qualify the city for the extra state money. Part of the added money can be used to put back some features that had been deleted from the plan, such as street tree grates and highway "bulb-outs" to calm traffic.
It looks as if the REDCO debacle is a continuing point of discussion, and that the problems and bad decisions that REDCO has faced in the past continue to haunt the special district and the taxpayers of the REDCO District.