After several years of talking about it but always leaving some money on the table, the Greencastle City Council has agreed to capture the maximum assessed value possible from the TIF (tax increment financing) district.
Asked to approve a Greencastle Redevelopment Commission (RDC) letter requesting $125 million as the amount of assessed value (AV) to be captured from the Greencastle Economic Development Area -- aka TIF district -- for 2018, payable 2019, the City Council voted unanimously during its June meeting Thursday night to up the ante to the full 100 percent of available AV.
Had the Council accepted the joint recommendation of the RDC and Mayor Bill Dory, it would have passed along an estimated $20-25 million to other local taxing districts such as Greencastle Community Schools, Greencastle Township, the Putnam County Public Library, the Putnam County Airport Authority and Putnam County itself.
One point inevitably raised during annual discussions is that Greencastle is supposedly the only Indiana community that does not capture the entire available AV from its TIF district. After all, the whole community ultimately benefits from use of the captured AV, it was stressed.
The full AV amount for 2019 is likely to be $145-$150 million, Dory said, which is expected to generate in excess of $3.7 million for local projects through the RDC.
“My recollection,” Councilman Gary Lemon, who is also an RDC member, said, “is that we started out at about $50 million (three years ago) and have been pushing it up all the time. We were going to do $125 million last year and this year, and then do the 100 percent the following year (2018, payable 2019).”
Lemon said the $125 million requested by the RDC looked “like more of a lateral move.”
“Had we received the full $125 million, this would be a lateral move,” Mayor Dory agreed, “but it’s actually an increase because we didn’t receive the full $125 million.
“We submitted the proper paperwork to the courthouse,” he continued, “but an error at the courthouse resulted in only $100 million (in AV) being reserved. This will still generate $2.8 million for projects, as opposed to an expected $3.7 million.”
Dory said the error could be corrected but it was his recommendation that it not be rectified at this point since “that would have an adverse impact on some of the other taxing units because the tax rate has already been set.”
Councilman Tyler Wade said he agreed with Lemon about raising the reserved AV to the maximum amount for a couple of reasons, one being that the city did not receive the full allotment of what it had planned for this year.
"That’s $900,000 we can never get back,” Wade said.
Secondly, he said, “we’ve talked about trying to pull together as many resources as the city can to try and make improvements to things in the City of Greencastle.”
“We raised registration fees and did the wheel tax,” Wade continued, “and we didn’t get counted all the way on that this past year either due to an error at the state. So we have a hard time getting by as it is, and we have levels of government that haven’t helped us out a lot. But we still have money on the table we could capture but we don’t.
“I feel pretty strongly we’ve been responsible phasing this in,” he added, “but I see no reason why we shouldn’t take the full capture that we’re entitled to.“
Council President Adam Cohen wanted to assure the public that by raising the AV capture to 100 percent, there would still be no increase in anyone’s taxes.
“No,” Lemon said. “No, no, no. Take Gary Lemon for an example. Gary Lemon will not pay one more penny if we go to 100 percent.”
The other local taxing units, however, will no longer see a pass through, Cohen pointed out.
“We had gone through the math last year,” Lemon reminded the Council. “(The effect) is minimal.”
Councilman Dave Murray agreed that it was indeed explored last year.
“The only substantial loss, and they were pretty small amounts across the board,” he noted, “was the school system’s Capital Fund. The Council made it pretty clear, at least at that time, we would work with Supt. (Jeff) Hubble and their staff to say, ‘OK, with these additional funds are there ways in which we can do things that are allowable under TIF to help the school system?”
That was already in progress, the mayor assured.
“We’ll be working with the schools on the driveway at the middle school, for example, as part of our sidewalk project,” Dory said.
Assistance like that should continue, Lemon said.
“In the time I’ve been doing this,” he noted, “we’ve never said no to something we can do for the school district, right?”
And heads nodded all across the City Hall Council chambers.
Lemon made the motion to modify the RDC request by increasing the captured AV from $125 million to 100 percent of what is available. Councilor Stacie Langdon seconded and Cohen, Wade, Murray, Mark Hammer and Steve Fields made it unanimous.
Through the use of TIF, municipalities can typically divert future property tax revenue increases from a defined district -- like Greencastle’s industrial area on the East Side -- toward public improvement projects within the community.
The money from the captured AV has allowed the city to do things like reconstructing road past the high school and middle school (Percy Julian Drive) to the tune of $1.2 million, along with the roadway next to Crown Equipment (Edgewood Lake Road).
Last year GCSC Supt. Jeff Hubble, who was present Thursday night but made no comment, expressed his desire to work with the city for the betterment of the community, seeing “adding to and strengthening Tennessee Street” and its proximity to the new bus barn as a positive. Hubble said then that the loss in capital projects funds would affect money that could have been available for building buildings, repairing buildings, buying technology and purchasing furniture for school buildings, none of which is exactly considered a pressing need at the moment.
Meanwhile, the tax increment off the captured AV this year is being used by the city to fund projects like the reconstruction of South Jackson Street from Veterans Highway south to the city limits, and the long-awaited widening of Indianapolis Road to three lanes with sidewalks on at least one side, from east of the main Kroger entrance to Percy Julian Drive.
It should be noted that the city and RDC are not taking an additional $45 million in cash (aka, the increase in AV from $100 million to $145 million), as might be misconstrued. Instead, what is at stake is the captured tax increment off that AV, which amounted to $1.9 million for 2016 and $2.795 million to the city in 2017 at $100 million captured. It is likely to be somewhere north of $3.7 million with the maximum AV in play for 2019.
While the county has not yet finished tabulating the actual assessed valuation for 2018 pay 2019 taxes, the exact amount available won’t be determined until those values are established and a TIF neutralization study is completed, Mayor Dory said.