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TIF - Tax Increment Financing
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TIF Case Study - Clark/Cowlitz Fire Rescue 0 T. Pettis In the closing minutes of the 2021 Legislative Session a Tax Incremental Financing (TIF) bill was passed.  The impacts to Fire Districts and Regional Fire Authorities along with library districts, hospital districts and other junior taxing districts became apparent in late 2022.  Under this law a city, port, or county can establish up to two Tax Increment Areas (TIAs) within their boundaries.  The total assessed value of the TIAs per entity cannot exceed $200 million.  A TIA can last up to 25 years.  For taxing purposes, the value in the TIA is frozen for all junior taxing districts, cities, and ports for up to 25 years.  Any taxes collected by these junior or senior taxing districts for new construction or for increases in value in the TIA will go to the TIA to pay bonds the TIA takes out.  In Clark/Cowlitz Fire Rescue (CCFR) the City of Ridgefield has established a TIA that includes most undeveloped or under developed property within the present city limits. The present value within the TIA at the time of adoption was $116,874,132.  They will sell bonds to develop roads and other infrastructure using taxes from the TIA to pay off the bonds.  For example, since the TIA was adopted, COSTCO has built a store within the TIA.  The 2025 assessed value of COSTCO is $21,810,600.  The TIA’s original fixed value of the property they built on was $2,211,094.  Applying CCFR’s fire and EMS tax rate ($1.9743) against COSTCO’s value, COSTCO paid $43,060 to Clark County for CCFR’s 2025 fire and EMS taxes.  Of that amount Clark County will distribute $4,365 to CCFR and $38,694 to the City of Ridgefield through the TIA.  This year’s tax statements makes it look like the tax dollars went to CCFR when over 90% of the tax dollars went to the TIA. The Port of Ridgefield adopted a second TIA of $200 million in the southern end of CCFR and the northern end of Clark Fire District 6.  They connected their southern part of the TIA to a waterfront site TIA about 5 miles north via a road to make the entire TIA one continuous TIA.  They plan on using the TIA money from the south to develop their water front TIA 5 miles north into a business and a park on the western edge of Ridgefield.  They did this as the southern portion of the TIA will experience significant growth, while the waterfront will not grow without additional money from somewhere.  Just within CCFR we estimate these two TIAs will cause our district to forfeit over $60 million dollars in 25 years.  We could potentially face up to 12 more TIAs because we serve three cities, two ports, and two counties.  So, as these areas within the TIA’s continue to develop, we will be required to provide more service with no additional revenue.  At present, expected development includes one senior living center, 11 apartment complexes, 5 fast food establishments, several housing developments, Les Schwab, Tractor Supply, and on and on.  I believe this TIF legislation negates the votes of our district taxpayers.  In 2022 over 62% (9,000 plus yes votes) of our voters supported an EMS levy to maintain and improve EMS.  In 2024 over 60% of our taxpayers voted to increase their fire levy to maintain and improve both fire and EMS services.  The TIF law allowed only as few as four out of seven city councilors or two out of three port commissioners to change our taxpayer’s votes and instead use new revenue within the TIA’s to fund non-fire and non-EMS services.   The net effect will be that CCFR taxpayers outside the TIAs will subsidize services within the TIAs (even though those within the TIAs are still paying their fire and EMS taxes but the majority of these taxes are going to subsidize development within the TIAs).  Furthermore, with increased service demands caused by the developments in the TIAs, taxpayers outside the TIAs may have to pay even more to maintain and improve their own services. For two years CCFR has explored ways to address this redirection of taxpayers’ money.  CCFR with others in the state were able to add a TIF amendment in the 2024 session that requires entities forming a TIA to enter into discussions to mitigate effects caused by the TIA to fire districts, RFAs, and hospital districts.  CCFR has also looked into legal challenges to the TIF and at entering into agreements with any entity forming a TIA.  CCFR is finding it very hard to plan long-term when we do not have a solid grasp on future revenues verses new response needs. If you have concerns, questions, or are impacted by this TIF law, please feel free to contact our Chief Nohr (360-887-4609) or myself (360-887-3793).  We continue to research a manageable answer to this significant financial impact.           CCFR Commissioner Larry Bartel Published in the 2Q 2025 Fireline Newsletter
by T. Pettis
Friday, October 3, 2025
Preparing for Tax Increment Financing 0 T. Pettis Tax increment financing “TIF” is a revenue tool provided to cities, counties and port districts “TIF Entities” under chapter 39.114 RCW. When a TIF Entity wants to use tax increment financing, the TIF Entity creates an area with specific defined boundaries that is called a Tax Increment Area “TIA.” Once a TIA is created, the assessed value within the TIA is frozen and the fire district or RFA is limited to collecting tax revenues based on the frozen assessed value for up to 25 years. During this period the fire district or RFA is required to serve the developments generated in the TIA without the corresponding receipt of tax revenues generated by the developments.  The regular tax revenues (including EMS taxes) generated in the TIA on the increases in the assessed value of the TIA are transferred from the fire district or RFA to the TIF Entity. Unfortunately, TIAs can be formed without the consent of a fire district or RFA and are not subject to the approval of any third party. Additionally, multiple TIAs can be created within a single fire district or RFA thereby increasing the negative impacts on revenues.  Under current law, the only tool that fire districts or RFAs have to influence the TIF process is to document and pursue mitigation of the impacts that TIA based developments will have on your service levels. This article provides suggestions for the steps you can take now to be as prepared as possible to mitigate the impacts of a TIA within your fire district or RFA. If you are faced with the formation of a TIA, retaining appropriate legal counsel is advised. Step One – Planning. The most important step a fire district or RFA can take to prepare itself to address the formation of a TIA is to establish performance standards and a capital facilities plan that can be used to document and predict the impacts that development within a TIA will have on your levels of service. While it is recognized that many fire districts and RFAs do not have the resources or personnel to fully engage in this type of planning, it must be understood that absent this type of planning you will be at a serious disadvantage in the TIF process. Step Two- Engaging in the Process. Whether or not you have adopted performance standards or capital facilities plans, it is equally important that you engage and actively participate in the TIA formation process, as this is a narrow window of opportunity. If you need to challenge a TIF in the courts, participation in the process is critical to the potential success of a judicial challenge. The first step is to establish clear paths of communication with the TIF Entities located within your fire district or RFA. Let them know that you will oppose any TIA that does not adequately mitigate the impacts on your fire district or RFA. If you have adopted service levels, capital facilities plans, etc., provide them with copies of those documents as soon as you are notified that they intend to create a TIA.  Once a TIA has been proposed, you will need to be proactive in pursuing mitigation (see Step 3) under the following timelines: The TIF Entity proposing the TIA must provide written notice to your governing board a minimum of 90 days before submitting its project analysis to the State Treasurer’s office (RCW 39.114.040(1)). The TIF Entity’s project analysis must address the mitigation discussed under step 3, so it is critical that the District clearly communicate to the TIF Entity your position and documentation regarding service level impacts and mitigation early in this 90 day notice period. This may be difficult as the TIF Entity may give you notice prior to having developed a formal plan. If the TIF Entity fails to adequately mitigate your service level impacts you should be prepared to formally object to the project analysis at the time it is submitted to the Treasurer. While the State Treasurer does not have any authority to stop a TIA based on the project analysis, documenting your objections is necessary in the event that you choose to challenge a TIA in the courts. Any TIF Entity pursuing a TIA is also required to hold two public briefings after the 90 day review period allotted to the State Treasurer.  If the TIF Entity has not adequately addressed your need for mitigation, you should be prepared to submit comment and oppose the formation of the TIA at both public hearings particularly if you want the option of challenging the formation of the TIA on procedural grounds. Once the TIA is formed, you have 30 days in which to file a legal challenge based on the absence of mitigation or to challenge based on any procedural errors made by the City. Step Three – Negotiating Mitigation. A TIF Entity proposing a TIA is required to conduct: “[a]n assessment of any impacts on … [t]he local fire service … and emergency medical services….”  The assessment “must include any necessary mitigation to the local fire service, …  and emergency medical services…”(39.114.020(2)).  If you can demonstrate, through formally adopted performance standards or capital facilities plans, that the proposed TIA will “increase in the level of service directly related to the increased development” then the TIF Entity “must enter into negotiations for a mitigation plan … to address level of service issues in the increment area.”  By triggering this mandatory mitigation process your fire district or RFA can negotiate on a more even playing field. The mandatory mitigation places the TIF Entity in the position of having to address the service level impacts by agreement or face a mandatory arbitration process if an agreement cannot be reached. Even if you do not have adopted performance standards or capital facilities plans that allow you to trigger mandatory mitigation, you can still pursue mitigation at each step in the process as described above and if necessary, object to or challenge the TIA process. Hopefully this brief overview provides you with an understanding that the best defense against a TIA is having planning in place that lets you predict the service level impacts of the proposed development within a TIA. While projecting the impacts of future growth and development is never straightforward, if you have the planning in place, you will be better able to support your requests for mitigation.   By Attorney Brian Snure Published in the 4Q Fireline 2024.
by T. Pettis
Friday, October 3, 2025

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