The Reno City Council and Redevelopment Agency Board approved an agreement Tuesday for local taxing agencies to pay the Redevelopment Agency $5.5 million this year, and a guarantee of $2.7 million each year through 2018 to correct a longstanding tax distribution error.
The Redevelopment Agency is funded through a tax increment method, whereby increases in property tax revenue within the Redevelopment District support the agency. Over the years the Redevelopment Agency has sold bonds backed by the minimum tax increment, which is guaranteed under state law. With the Agency receiving the legally required funding, bond payments will be covered through 2018, by which time officials expect property tax revenues to have recovered sufficiently to finance future bond payments.
The settlement also corrects an issue regarding public property that is exempt from property tax. Exempting appropriate property reduces the property tax base, thus increasing the tax increment. The settlement agreement resolves this issue into the future.
The settlement provides for payments to the Reno Redevelopment Agency from the City of Reno, Washoe County and the Washoe County School District. Special provisions allow the School District to make payments over time to reduce the immediate fiscal impact. The agreement must be approved by Washoe County, the Washoe County School District and the State of Nevada to go forward. Once approved the parties will request a court order to ratify the agreement, settling the issue of the longstanding tax distribution error.