TIF district clears school board hurdle
It appears a tax increment financing district in Eudora will move forward.
After airing concerns Thursday, the Eudora USD 491 Board of Education took no action and in effect agreed to support the district in eastern Eudora.
Last month, the Eudora City Council extended the time the school district and the Douglas County Commission could consider the TIF district. The county had already expressed support for the project.
With a vote for a $45 million bond referendum coming up, district officials wanted to be positive the TIF district's formation would be fiscally responsible.
The extended consideration period also delayed construction on the Deer Valley Subdivision by Wilson and Hoover LLC. The subdivision could be one of the first projects included in the TIF district.
During a presentation to the board, Eudora City Administrator Cheryl Beatty reiterated the city needed to find some way to bring commercial business to town.
"When I analyzed our tax base, it is obvious that if Eudora doesn't find a way to bring commercial development to our community the school district and our city will be hurting for a diversified tax base in order to support our huge infrastructure needs," Beatty said.
The TIF district will be north and south of 10th Street and east and west of East 2300 Road. It includes all of Intech Business Park, the proposed Deer Valley subdivision and 30 acres on the northeast side of 1400 Road.
The city is looking to the TIF district to spur commercial growth in the area by providing roads, electrical connections and sewer lines not currently available in the area. It would do so by freezing the plot of land at its current assessed value and bonding out the needed improvements. The bond would be paid for by taxes generated within the district in excess of the district's first-year valuation.
With the establishment of the district, the city would either accept or deny project plans from commercial entities looking to us the infrastructure.
"In the business world, it's a domino effect," Beatty said.
If the city can draw one or two businesses to the area, then more could come, Beatty said.
Because the school district could have a new bond of its own to pay off within the next six months, the exact role they would play in the TIF district needed to be determined.
To find out exactly how it might work, officials in the school district worked with Wilson and Hoover to find a plan that might work.
Although details of Wilson and Hoover's project plan aren't final, the developers could request up to $7 million worth of infrastructure to be covered in the TIF district.
Beatty suggested the school district look at the TIF district like a bank. When the 20-year bond ends, the district would have full access to the increased tax dollars within the TIF area, Beatty said.
"I don't call it a bank, I call it losing money," Martin said.
The area would be generating tax dollars the district wouldn't get to see, Martin said.
State statute protects 20 mills of the districts' taxing authority.
To make sure the school district would lose as little tax money as possible as the value of the land included in the TIF district increases, officials approached Wilson and Hoover with a plan to protect 10 more mills of taxing authority.
After running through projections, Wilson and Hoover legal counsel F. Chase Simmons told the board ten extra mills wouldn't work.
Simmons suggested the School district take five mills instead.
In all, the district would still get 38 percent of new taxes.
"It's kind of like a slow leak or hoping for a big gush sometime down the road," Superintendent Marty Kobza said.
After the presentation from Simmons and Beatty the Board decided to move forward with the school district's partnership in the TIF district.
"Make it go," Martin said.