Delaware leaders and a local developer are trying to figure out what happens when two New Community Authorities overlap.

Delaware City Council on Jan. 27 discussed proposals to resolve an impasse involving two NCAs and the proposed annexation of nearly 44 acres from Berlin Township.

Evans Farm Delaware LLC has petitioned to annex the land -- north of Peachblow Road and west of the CSX and Norfolk Southern railroad tracks -- into the city for a housing development with up to 109 lots.

The project would be an extension of Evans Farm, a 1,250-acre mixed-use development north of Lewis Center Road in Orange and Berlin townships that began construction in late 2017.

An NCA adds a millage assessment on properties within a designated area to raise money to improve that area, usually in the form of infrastructure.

Properties within the city's southeastern area are within the Delaware South New Community Authority.

Those properties are subject to a 7.5-mill assessment, which the city uses to pay off the debt incurred by building Glenn Parkway, City Manager Tom Homan told council during discussion of the proposed annexation Nov. 11.

Homan added that any land annexed into that area would be expected to pay that assessment.

Evans Farm also has an NCA, for 10 mills, throughout the existing development.

Evans Farm partner Tony Eyerman on Jan. 27 told council the company is committed to extending its NCA onto what would be the annexed property.

"Rather than pass the full 17.5-mills burden onto the future homeowner, the city and the applicant are working to find a solution beneficial to all parties and equitable to those already in the South NCA," Homan wrote in a memo attached to the Jan. 27 agenda.

During those negotiations, the memo said, Evans Farm proposed a one-time payment to the city of $194,360 -- an amount based on 7 mills being collected on houses valued at $400,000 each, with a rate of completion of 10 homes in 2021 and 25 homes annually in 2022 through 2024. The city made a counter-proposal of a one-time payment of $250,000 to be made in 2023, the memo said.

"While staff has not had the opportunity to review this one-time payment in detail, a one-time guaranteed payment could potentially be beneficial while giving more certainty to receiving funds in the event that construction slows or stops for some unforeseen reason," the memo said.

Homan said the issue was on the Jan. 27 agenda to brief council on the status of the talks.

To meet the timeline required for an annexation, council's approval of the annexation would be needed by its March 9 meeting, he said.

In contrast to a one-time payment, Homan's memo said, the city staff also "broke the calculation down into a per-house rate based on the year built to allow the developer to better align the payment required with when a building permit might be issued."

At the rate of construction Evans Farm provided, the per-house payments would total $403,389, the memo said. The calculation is based on a fee of $6,624 for a 2021 build, with the fee decreasing annually to reach $1,159 for a 2026 build, according to the memo.

An increase in the rate of construction would increase the fee, the memo said.

City attorney Darren Shulman told council Jan. 27 that plan is based on what potentially might be built during that time frame, "Not what we thought would get built. ... It's all based on estimates and supposition," he said.

"So basically it's a $250,000 sure thing versus the potential for best-case scenario, the ($403,389) number," council member Drew Farrell said.

Council member Lisa Keller said if projections were met, 60 houses would be built before the city received the 2023 payment.

Eyerman said construction on 35 lots might be a more realistic number for that time frame. The economy and time required for engineering will affect the pace of construction, he said.

Homan told council if the land is not annexed, Evans Farm could request sanitary sewer service from the city or county.

Evans Farm is an expansive development based on the tenets of New Urbanism, which emphasizes walkability and smaller lots. Residents of the first homes north of Lewis Center Road in Orange Township moved in at the end of 2018.

"In an overly simplified nutshell, if you want to see what we're proposing, it's exactly what ... the houses that are down in Phase One look like right now," Eyerman told council. "It's a New Urbanism community."