Explanation
BACKGROUND: The City established the Stelzer-Stygler Community Reinvestment Area (CRA) in 1986 to stimulate private investment and job creation. In 1994, changes in the CRA law placed additional obligations on municipalities to compensate school districts for lost revenues arising from tax abatements. In May 2002, the City entered into a Compensation Agreement with the Gahanna-Jefferson School District to compensate the District for revenues from real property taxes forgone due to abatements on parcels in the Stelzer-Stygler CRA.
The present legislation authorizes the payment of $92,937.76 to the Gahanna-Jefferson City School District as the compensation due in 2023 for tax year 2022. This sum is calculated using the definitions in the Compensation Agreement and is based on one parcel (520-250987) in the Gahanna-Jefferson School District area of the Stelzer-Stygler CRA with building improvements and CRA tax abatements. The abatement for parcel 520-250987 commenced with tax year 2017 and will terminate in tax year 2026.
The total private investment subject to exemption in the new buildings constructed on this parcel was approximately $7,956,000.00 in 2022.
Emergency action is requested in order for the City to make the $92,937.76 payment to the Gahanna-Jefferson City School District according to the schedule established in the Compensation Agreement. Failure to make payment as required may be viewed as an event of default and may subject the City to the imposition of remedies available to the School District for such default. Further the funds need to be conveyed to the school district in time for the accounting and planned use of the funds for the new school year.
FISCAL IMPACT: The 2023 General Fund budget (citywide account) includes funding for this payment to the Gahanna-Jefferson School District. A transfer equal to 25 percent (25%) of the payment will be transferred from the Special Income Tax Fund.
Title
To authorize the City Audit...
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