Berlin, Liberty townships: NCAs increase costs for buyers of new homes

Paul Comstock
ThisWeek

Hundreds of houses yet to be built in Liberty and Berlin townships are going to come with something extra.

Delaware County commissioners have approved petitions filed by developers that will create new-community authorities for two residential and mixed-use developments: the Berlin Meadows in Berlin Township and the Liberty Grand in Liberty Township.

Delaware County Commissioners building

The new-community authorities, or NCAs, add extra millage to the property-tax bills of those buying homes in the NCA areas. The petitions say the millage would be used to retire the debt of infrastructure costs, such as streets, as needed to complete the developments.

According to the Liberty Grand petition, the development covers 288 acres south of Hyatts Road, west of Sawmill Parkway and east of Steitz Road and would contain up to 489 single-family residences. 

The Berlin Meadows petition is for a development that would include up to 336 single-family residences on 280.22 acres, with sections located south of Peachblow Road and north and south of Cheshire Road. 

Jane Hawes, county director of communications, said the commissioners approved the petitions because townships play no role in NCAs’ formation. By comparison, Delaware City Council approves any NCAs formed in the city. 

The Liberty and Berlin petitions list no millage amounts for either NCA.

County economic-development director Bob Lamb said the Berlin Meadows millage is 10.25 mills. The petition said the millage collection would start in 2024 and continue until at least 2053.

Liberty Township administrator Mike Schuiling said the Liberty Grand NCA assessment is 3.5 mills.

"The duration of the charge is not determined at this time due to the fact that the charge is terminated upon repayment of the cost" of the infrastructure, he said.

Berlin Township trustee Ron Bullard said existing homes in the township are unaffected by the NCA, which covers only future homes to be built in the Berlin Meadows development.

Bullard said buyers need to do due diligence in advance of a house purchase to make sure they know what their property taxes would be.

By using millage to fund infrastructure, new houses in NCAs often have a lower comparative asking price, Bullard said.

 In areas without an NCA, he said, infrastructure costs often are integrated into the asking price of a house.

 "What happens is the houses appear to be less costly because you're paying directly for the house, but the (NCA millage is) going to hit you on the other side, which nobody ever bothers to look at. They find it when they get their tax bill," Bullard said.

The Berlin Meadows and Liberty Grand petitions include no reference on how home buyers should be notified about the NCAs.

State law requires that the community development charge be included in affected house purchase agreements, said Mike Ringle, the county’s chief deputy auditor.

Lee Yoakum, Delaware city community-affairs coordinator, said City Council has approved guidelines on how home buyers are to be notified about NCAs in the city.

"Legally, the presence of an NCA must be disclosed in closing documents,” Yoakum said. “The city requires an NCA to be highlighted to potential renters, property owners and others affected by the charge. We occasionally will hear from homeowners who were unaware, but overall, the development community seems to do a pretty good job of making property owners aware of an NCA charge."

"Once they've bought that house, there's nothing anybody can do to change where they're at," Bullard said.

New-community authorities are created under Chapter 349 of the Revised Code. NCAs have the authority to impose a “community development charge," Ringle said.

He said state law allows options for community-development charges. Millage based on assessed value -- similar to real property-tax levies -- is one option and was chosen for both NCAs. Assessed values are 35% of true (market) value.

For the Berlin Meadows NCA, the cost would be $358.76 annually per $100,000 of home value. For the Liberty Grand NCA, the cost would be $122.50.

Other options include a charge similar to a sales tax, a uniform fee per parcel or any combination of the three, Ringle said.

For millage, an NCA may certify the community-development charge to the auditor’s office, and any charges are entered on the tax list and duplicates for the applicable parcels as a special assessment, he said.

The charges would be included on real property-tax bills, he said.

As the charges are collected, the county auditor and treasurer determine the collection total, which is paid to the NCA, Ringle said.

An NCA is governed by a board of trustees that initially comprises residents, a local government representative and representatives of the developer, he said.

The NCA’s board makes bond payments or other expenditures in keeping with the development plan, he said.

Petitions filed by the developers routinely describe the proposed community-development charge, Ringle said.

Under state law, the millage for voted levies is reduced as overall property valuation in the affected district of municipality increases. Under that scenario, NCA millage is not reduced, he said. 

"The community-development charge is a charge not, technically, a tax. So if the charge is based on assessed value, the charge could fluctuate with any increase or decrease in the assessed value," Ringle said.

"If the millage is based on assessed value, the new homeowner could be charged more if the home is subsequently appraised at a higher value," he said.

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