Jersey Township trustees Monday, Dec. 3, requested more information from the city of New Albany on an annexation agreement that includes revenue sharing for the township.
"We need clarification on the section of Ohio Revised Code (to be cited) and on the profit sharing and such," said Derek Myers, a Jersey Township trustee.
Trustees were expected to vote on the agreement during the Monday meeting. Instead, they requested the city provide more information for a future trustees meeting.
New Albany City Council on Nov. 27 approved a resolution authorizing the city manager to enter into the annexation agreement with Jersey Township for 43.1 acres north of state Route 161 and southeast of the extension of Smith's Mill Road, east of Beech Road.
The land would remain in Jersey Township and in Licking County after the annexation into the city.
New Albany City Manager Joseph Stefanov said the agreement is similar to other annexation agreements, except in this one the township would receive 50 percent of the incremental increase of property-tax revenues on the land for 15 years.
The incremental revenue would be tied to a tax-increment-financing district on the land.
A TIF is an economic-development mechanism available to local governments to finance public infrastructure improvements and, in certain circumstances, residential rehabilitation, according to the Ohio Department of Development.
A TIF works by locking in the taxable worth of real property at the value it holds at the time the authorizing legislation was approved, thus diverting the incremental revenue to the designated uses.
Myers said the revenue might be needed in the future to offset increased road maintenance costs and fire service costs.
New Albany and Jersey Township would share road maintenance.
Jersey Township contracts with the Monroe Township Fire Department to provide emergency services, which would not change.
Trustees requested the information to ensure all the documentation is clear, Myers said.
The 43 acres are owned by MBJ Holdings, but the annexation was requested by the New Albany Co., the area's largest developer.
If the annexation request clears the trustees, it must be approved by the Licking County commissioners.
If the commissioners approve, they have 60 days to return the legislation to New Albany City Council for approval.
Stefanov said the annexation agreement is similar to other recent agreements, except that it stipulates New Albany would share 50 percent of the incremental increases on the land's property-tax revenue for 15 years.
Stefanov said Jersey Township had requested a percentage of the TIF revenue to help with potentially increasing costs for road maintenance and fire service.
"We're already picking up some traffic and seeing some deterioration of the roads," Myers said. "We're trying to leverage the cost to the township as much as possible."
Myers said Jersey Township has applied for state funding to repair Beech Road north of New Albany's Personal Care and Beauty Campus, which is generating traffic that heads north into the township.
New Albany already has other revenue-sharing agreements in place for the 43 acres.
If any new businesses build on the land, the city would collect income taxes from the employees.
The income-tax revenue would be divided, with 30 cents of every dollar going to the New Albany Community Authority to pay off debt incurred to develop the local business parks.
The other 70 cents would be split equally between the city and the school district with jurisdiction over the area.
New Albany Mayor Nancy Ferguson asked how much revenue the TIF could generate.
Stefanov said the revenue would be minimal. He said land annexed into the city comes zoned as agricultural. Even if the land were changed to a commercial zoning, the value of the property would not increase much until it was developed.
Stefanov said incentives are used to encourage companies to build in the city. Tax abatements, for example, allow companies to defer the payment of a portion of property taxes for the term of the abatement.
Stefanov said if an abatement were offered to a prospective business and Jersey Township received less property-tax revenue because of it, the TIF revenue would help the township until the property-tax abatements expire.