Council ups ante, opts for $125 million AV
After years of capturing less than half of the assessed value it legally could have, the Greencastle City Council upped the ante for the second straight year Thursday night.
Asked to approve a Greencastle Redevelopment Commission (RDC) letter requesting $115 million as the amount of assessed value (AV) to be captured from the Greencastle Economic Development Area -- aka TIF (tax increment financing) district -- for 2018, the Council voted unanimously to bump that figure to $125 million, while still passing along an estimated $20-30 million to other local taxing districts such as Greencastle Community Schools. Greencastle Township, the Putnam County Public Library, the Putnam County Airport Authority and Putnam County itself.
Last year -- 2016, payable 2017 -- the City Council opted to capture $100 million in assessed value, which was the starting point in this year’s discussion as well. In fact, Mayor Bill Dory initially suggested staying at a $100 million capture in his proposal to Redevelopment Commission last month.
That, however, grew to a suggested $115 million during spirited discussion by the RDC. And that $115 million was the amount included in the annual TIF letter to the City Council presented Thursday night.
Councilman Gary Lemon, who is also a member of the RDC, advised the Council he has pushed for $125 million throughout the process.
The additional AV capture, he stressed, “will not increase the property tax of any Greencastle homeowner, not one penny for anyone in the city.”
He reiterated a point made several times during discussions both this year and last that Greencastle is the only Indiana community that does not capture the entire available AV from its TIF district.
After all, the whole community benefits from use of the captured AV, it was stressed.
Through the use of TIF, municipalities can typically divert future property tax revenue increases from a defined district -- like Greencastle’s industrial area on the East Side -- toward public improvement projects within the community.
“This money has allowed the city to do some really good stuff,” Lemon said. “The road past the high school (Percy Julian Drive) was done with this money. The road next to Crown Equipment (Edgewood Lake Road) was done with this money.
“I don’t allow students to say this,” Lemon, an economics professor at DePauw University, continued, “but this is almost ‘a free lunch.’”
The capture also will not affect the general budget of the school corporation, Lemon stressed, noting that the biggest pushback he has heard is the erroneous concept that the school budget would suffer.
“If I thought this would have a negative impact on our schools, I’d be the strongest opponent,” Lemon said, noting that his parents were both educators and one of his sons teaches high school. “I’m convinced there will be no adverse effect to the school. The money they lose we can supplement and make better, I think.”
The only impact on the school reportedly would be in its Capital Projects Budget, which took an $81,000 hit last year, Councilman Dave Murray noted, when the AV taken by the city went from $52 million to $100 million.
Murray, who also attended the recent RDC meeting but is not a voting member of that commission, told the rest of the Council, “It seemed clear to me the spirit in the room was that the Redevelopment Commission would be open to using RDC dollars to help the schools.”
Mayor Dory noted that with the school bus barn project planned for an entrance where Tennessee Street meets Veterans Highway and a planned expansion of the apartments along Tennessee Street, there “probably needs to be a program to upgrade Tennessee Street” after all the construction is over next year.
The city could certainly help the schools by doing that, the mayor suggested.
GCSC Supt. Jeff Hubble was also present Thursday, noting that the school corporation “has been well aware of the discussion” and expressed his desire to work with the city for the betterment of the community, seeing “adding and strengthening Tennessee Street” as a positive.
He said the loss in capital projects funds would affect money available for building buildings, repairing buildings, buying technology and purchasing furniture for school buildings. None of those is exactly a pressing need at the moment. The new bus barn project will be funded by a bond issue, Hubble noted.
With positive comments from Hubble still hanging in the air, Murray made a motion to capture $125 million in TIF assessed value, which was seconded by Council President Adam Cohen and made unanimous by Lemon, Stacie Langdon, Mark Hammer, Steve Fields and Tyler Wade.
That $125 million in AV is expected to generate a reported $3,703,632 in revenue (under the same levy and same rate and without cap loss figures available) that could be used on costs associated with projects within the TIF district.
A prime example of such use is the $1.2 million spent in 2011 to upgrade Percy Julian Drive with a concrete surface and third lane in front of the middle school and high school. According to the economic development plan passed by the city, the tax increment off the AV will be used to fund projects like the reconstruction of South Jackson Street from Veterans Highway south to the city limits, and the proposed widening of Indianapolis Road to three lanes with sidewalks on at least one side, from east of the Kroger main entrance to Percy Julian Drive.
It should be noted that the city and RDC are not taking an additional $25 million (via the increase in AV from $100 million to $125 million), as some might misconstrue. Instead, what is at stake is the captured tax increment off that AV, which amounted to $1.9 million for 2016 and $2.795 million to the city in 2017 at $100 million captured.
While the county has not yet finished tabulating the actual assessed valuation for 2017 pay 2018 taxes, the exact amount available for pass through won’t be determined until those values are established and a TIF neutralization study is completed.