Olentangy Valley News

Economic development

Leneghan questions agreement

Trustee raises concerns over plan to redirect income taxes to Liberty Township, Powell

By ThisWeek Community News  • 

Liberty Township Trustee Melanie Leneghan is speaking out against the proposed Joint Economic Development Zone among Liberty Township, Powell and Bexley that could collect an estimated $1.3 million in income taxes each year.

Leneghan said she was unable to attend the board of trustees' special meeting June 14, during which the JEDZ was explained by Trustee Curt Sybert and then approved by Sybert and Trustee Mary Carducci.

At the regular trustees meeting June 17, Leneghan said she would have voted against the zone that, if approved by Powell and Bexley city councils, will be put to a vote on the Nov. 5 ballot.

"It is another attempt on the part of this township and the city of Powell to unnecessarily grow their government on the backs of the taxpayers," Leneghan said, reading from a prepared statement.

On the other hand, Sybert called approving the JEDZ a "no-brainer," because it could bring in an estimated $300,000 each year for the township -- or the equivalent to the average yearly estate-tax revenue that it no longer receives because of a change in state law.

Establishing a JEDZ would allow Powell and Liberty Township to collect funds that originate as income taxes at Bexley's rate of 2.5 percent until 2043. The income taxes would be collected from workers whose companies are within the zone's boundaries, which include Liberty Township-owned properties, Olentangy schools located in Liberty Township, the Columbus Zoo and Aquarium, Zoombezi Bay, Safari Golf Course, Del-Co Water, Delaware County Sanitary and Columbus State Community College's Delaware branch.

Research conducted by Powell officials shows the parcels in the proposed JEDZ have an estimated annual payroll of $52 million. If the 2.5 percent income tax is applied, that would add an estimated $1.3 million to the JEDZ fund. Of those earnings, 85.8 percent would be allocated to Powell and 14.2 percent to Bexley. A separate contract would split Powell's share, allocating half of it to Liberty Township.

Once the funds are allocated, 3 percent would have to be paid to Bexley to cover its costs for acting as the tax collector, and 2 percent would be used to cover legal fees and a state-required audit.

Estimates show that fewer than 5 percent of Liberty Township residents would be affected by the JEDZ-imposed income tax, meaning out-of-town workers would make up the majority of those whose pay would be redirected. Whether a worker's income taxes would be raised or remain the same if the JEDZ went into effect would depend on the tax rate and tax credits available in his or her home city.

Leneghan questioned why only nonprofit agencies were included in the JEDZ, when typically such contracts also involve business developments that can net a higher return.

Township Fiscal Officer Mark Gerber said the decision was made to add only tax-exempt properties to the JEDZ because they tend to be the biggest recipients of township services, such as EMS and road repairs, but don't pay any property taxes.

Township resident Carl Salmon attended the June 18 Olentangy school board meeting to discuss the JEDZ and how it could affect some district employees who work in the proposed zone and live in the township.

School board President Ken O'Brien and Superintendent Wade Lucas didn't offer opinions on the proposal, but promised to keep their ears to the ground and stay updated with the ongoing JEDZ talks.

In addition to concern for the schools that fall into the JEDZ territory, Leneghan questioned why township parks are part of the agreement.

"If no one is employed there, it shouldn't be included," she said.

Leneghan said she opposed the inclusion of any undeveloped land, because it could be tempting for township leaders in the future to build on that land so it can receive more income taxes under the JEDZ.

Donald Brosius, the attorney acting as lead counsel for the contract, said parks are considered developed property and are not likely at risk for being rezoned for tax-collecting purposes. If any land in the JEDZ territory were to be rezoned, it would be up to the vote of trustees, just like any other zoning matter.

No residential property is part of the territory and no property can be added once the JEDZ contract is approved by voters, Brosius said.

Regardless, Leneghan said she still fears the township could lose some control under the JEDZ contract.

" ... The JEDZ creates a new or additional layer of government that is an appointed board selected by elected officials in Bexley, Powell and Liberty Township," she said. "That appointed board has authority over the land in the JEDZ, and worse than that, the board can do whatever they want with the taxpayers' money that they get -- and there is no oversight.

"This whole thing has ugly and underhanded and convoluted written all over it," she added.

It's true that a JEDZ nine-member board must be created and consist of three representatives each from Powell, Liberty Township and Bexley, but according to the section of Ohio Revised Code that dictates JEDZ agreements, board members would serve only as advisers on how the funds could be spent and would have no real authority. One member from each partnering municipality can be an elected official, while the other members would be chosen by the board of trustees and city councils.

The special June 14 meeting was the first time the JEDZ was discussed publicly, despite the contract's claim that all negotiations were made in public. Sybert admitted he had been discussing the agreement with Powell leaders for more than two years, but said no laws were broken because two elected officials from the same municipality were never in the conversations together.

"Something like this doesn't just happen overnight," he said. "This took years of work to put together and lots of coordination because there are so many people involved. I was out there every week, sitting down with people from Powell, finding out how to make this happen."

Sybert told Leneghan that if she does more research on how the JEDZ works and what it would mean to the township, he is certain she would feel differently.

"You're wrong about so many things," he said to her.

Carducci was absent from the June 17 meeting.

While Sybert and Leneghan debated, Bexley City Council had its first reading of the JEDZ resolution June 17. No opposition was voiced by council members or residents.

The first reading of the resolution by Powell City Council is on the agenda for Tuesday, July 16. Powell Mayor Rich Cline said he can't speak for his fellow council members, but he is in favor of the partnership.

"I know that this is something that is going to be good for both the township and the city," he said.

The JEDZ contract requires Powell and the township to work together to amend the Cooperative Economic Development Agreement that has kept the two at odds since it was allegedly violated in 2008. Leaders would have one year following the approval of the JEDZ to amend the agreement that spells out annexation terms or else the contract would be nullified.

Liberty Township will hold a public hearing on the proposal at 7:30 p.m. July 29 at the Liberty Township Complex, 7761 Liberty Road.

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