CITY OF PICKERINGTON

FINANCE COMMITTEE OF COUNCIL

CITY HALL, 100 LOCKVILLE ROAD

TUESDAY, MAY 30, 2006

7:30 P.M.

SPECIAL MEETING AGENDA

1. ROLL CALL. Mr. Wisniewski called the meeting to order at 7:30 P.M., with roll call as follows: Mr. Wisniewski, Mr. Hackworth, and Mr. Fix were present. Mr. Smith was absent. Others present were: Mayor Shaver, Mike Sabatino, Cristie Hammond, Lynda Yartin, Ed Drobina, Brenda VanCleave, Chris Schornack, Linda Fersch, Steve Grasbaugh, Greg Stype, Dan Horne, John McGory, Rick Palsgrove, Greg Daniels, Robin Harris, and others.

2. SCHEDULED MATTERS:

A. Review and request for motion to approve draft ordinance authorizing the City Manager to execute agreement to purchase 3.0 acres from Stuart S. Schlotterbeck and Robin M. Harris, located at 512 Diley Road, City of Pickerington, County of Fairfield, State of Ohio. Mr. Wisniewski stated this involves property that is on Diley Road and will be a total take. Mr. Sabatino clarified this property is at the south end of the railroad tracks, east of Diley. Mr. Sabatino further clarified the property was being purchased for the Diley Road widening project. Mr. Wisniewski moved to approve and forward to Council with emergency language; Mr. Fix seconded the motion. Roll call was taken with Mr. Wisniewski, Mr. Fix, and Mr. Hackworth voting “Yea.” Motion passed, 3-0.

B. Review and request for motion to approve draft ordinance amending Ordinance No. 2001-127 to terminate the abatement of certain real property from real property taxation and to revise the description of the real property exempted from real property taxation granted by Ordinance No. 2001-127.

C. Review and request for motion to approve draft ordinance declaring the improvement to certain parcels of real property to be a public purpose and exempt from taxation; establishing a Tax Increment Equivalent Fund, and providing for the collection and deposit of service payments into that Fund; providing for the distribution of service payments to the Pickerington Local School District; specifying the public infrastructure directly benefiting the parcels; and authorizing the execution of a Tax Increment financing agreement and Construction agreement

Mr. Steve Grasbaugh stated he was with Peck, Schaffer, and he was representing the City on this issue. Mr. Grasbaugh stated further Mr. Horne, the developer, and his attorneys are also present this evening to answer any questions the Committee may have. Mr. Grasbaugh stated the Committee had received two revised draft ordinances and several handouts on the proposed TIF this evening. Mr. Grasbaugh stated in 2001, Council enacted a 10-year, 75 percent TIF on a number of parcels including one that we will discuss this evening. He stated that TIF will expire in six years and was to pay for certain public improvements, including the extension of Stone Creek Drive. He stated a considerable amount of that TIF money has been expended over the first four years, and some money has been borrowed to pay for the public improvements and you still owe on that borrowing. He stated there are still about $300,000 of additional public improvements other than Stone Creek Drive that were to be paid from that TIF. He stated the 2001 TIF money would not generate enough money to pay for the Stone Creek Drive extension. Mr. Grasbaugh stated Equity has now purchased one parcel that is in the 2001 TIF, and they also have the right to acquire a portion of the Nicodemus property and that is the other parcel that is being proposed to be put in the 2006 TIF. Mr. Grasbaugh stated Equity is proposing to renovate the existing office buildings on the property that they own, and build three to five new office buildings on that parcel. He stated they are also proposing to build a shopping center on the Nicodemus property and a couple of other developments out there. He continued, for them to be able to do that, they need to have Stone Creek Drive extended. Mr. Grasbaugh stated Equity then approached the City about doing a TIF on their new property to pay for Stone Creek Drive. Mr. Grasbaugh stated after review, it was determined it would be best to let the 2001 TIF expire on its own, and remove the parcel Equity owns from that TIF and create a new TIF for this development. He stated the new TIF would exempt 100 percent of the value of the improvements, and it would be a non-school TIF. He stated the TIF would be for 30 years, which is the maximum, however, if everything is paid off it will expire earlier than the 30 years. Mr. Grasbaugh stated with a non-school TIF, the local school district will receive the amount it would receive as if there was no TIF, so they are made harmless. Mr. Grasbaugh stated he would like to clarify the local school district will be made harmless, the joint vocational school district is not being made harmless and they will lose some of their revenue.

Mr. Grasbaugh stated the Committee had received copies of TIF revenue projections. He stated he would like to point out that the way the new TIF is being proposed, the City will enter into a contract with Equity to build the improvement and we will pay them from the TIF proceeds over a period of time. He stated with this TIF the developer will only be paid as the TIF produces enough money to pay them. He stated any excess money could be used by the City for other public improvements for other public improvements that benefit these parcels. Mr. Grasbaugh stated there is also a chance that Equity will not get back all of the money they spent for building the roadway but that is a business risk they are taking. Mr. Fix clarified that the contract will read that we will pay them to the extent that there are available monies from the TIF. If the TIF does not generate enough money, they don’t get paid. Mr. Grasbaugh stated the pressure will be on Equity to build things out there, because if they don’t build anything it doesn’t generate any TIF revenues.

Mayor Shaver inquired as to interest rate we would be paying on the amount expended by Equity, and Mr. Grasbaugh stated the construction contract is not complete as yet and that will have all of the terms regarding the interest rate, the amount we will pay, etc. He stated the reason the TIF ordinances were brought forward before that agreement is complete is because Equity has a desire to have the TIF ordinance passed before the end of June. Mr. Grasbaugh stated there were too many open issues in the construction contract to bring forward at this time. Mayor Shaver stated he felt the interest rate is a critical point. Mr. Grasbaugh stated the Mayor was correct, and what Equity was asking tonight was for the Committee to approve the TIF agreement, which will set up the TIF, but it doesn’t completely approve the entire transaction. He stated they would have to come back before Council at a later time to have the construction contract approved with those details in it. Mayor Shaver stated then, that approving the TIF agreement did not commit us to do anything further. Mr. Grasbaugh stated the only thing approving the TIF agreement would do would be to authorize the City Manager to sign it, and it would put the TIF in place on that property. Mr. Grasbaugh stated in the past, the TIF commenced the date of the TIF ordinance. He stated, however, the new TIF ordinances states the TIF is in place as of the date the ordinance is passed, but it actually takes effect parcel by parcel when a new structure is built on that parcel. He stated then if nothing was built out there for five years, the TIF would start five years from now and last 30 years from that date. He stated if something is built on one parcel next year, the TIF would start as to that parcel when it showed on the tax duplicate, and if something was built on another parcel five years from now, the TIF would start on that parcel at that time and last 30 years from then. So the clock on the TIF does not start on each parcel until something is built. Mr. Fix stated, however, it was a binding agreement. Mr. Grasbaugh stated that was correct, it would be a binding agreement. Mr. Horne stated Equity was requesting this be passed in June because they did not want to close or spend the money for an additional option on the Nicodemus property until they were fairly sure this would proceed.

Mayor Shaver clarified that the TIF would be in place even if the TIF agreement never got signed. Mr. Grasbaugh clarified that he would recommend the City Manager not sign the TIF agreement until such time as the construction contract has been finalized and approved by Council. Mr. Hackworth clarified there would still be two TIFs, the original would stay in place with the identified parcels removed, and a new TIF would be created with that property and the new parcels. Mr. Grasbaugh stated he has spoken with the County Auditor, and they have also seen the agreement that terminates these parcels from the original TIF, and they feel this is a good thing. Mr. Grasbaugh stated if the TIF is passed before the end of June, it will not be effective, but it will be through Council. Mayor Shaver inquired if a TIF ordinance, where there has been no activity, be repealed, and Mr. Grasbaugh stated if there were no signed agreement with someone, yes. Mayor Shaver clarified that once the City signed the TIF agreement, you have agreed that you will use the proceeds to pay for that road at some point, so you could not repeal it after you signed the TIF agreement. Mr. Grasbaugh continued that he did not think the City Manager would sign the TIF agreement until the construction contract is in place, and he was not sure that Equity would sign the TIF agreement until the construction contract is in place. He stated you have the control of not being bound by not signing the TIF agreement. Mr. Sabatino stated if neither party were going to sign it, what was the hurry to get the legislation passed. Mr. Grasbaugh stated he understood Equity wanted some assurance that the TIF would eventually happen. Mr. Horne stated they have deadlines with the property owners with respect to closing on the property and they did not anticipate the process to take this long. He stated they have just run into a time wall with respect to having the ordinance in place that would establish the ability to do the TIF. He stated that is very important as a component of their contingency with the seller in order to proceed. He stated the construction contract will detail between the City and developer what they are actually going to do; the TIF ordinance merely puts the TIF in place. Mr. Sabatino inquired when the developer would have the construction contract ready to present to the City. Mr. Grasbaugh stated that he felt that would be ready to present to Council in three or four weeks time, and that document will state that Equity must present the final plans to the City for their approval before they start anything. Mr. Grasbaugh stated as it is now drafted, the construction contract will be signed, and the proviso is that after the signing of the contract, Equity has up to three months to give us plans to review, and we have up to one month to get comments back to them on their plans. Mayor Shaver clarified the interest rate and all the numbers will be in the construction contract when it comes to Council. Mayor Shaver stated he wanted to be sure the developer understood the TIF agreement would not be signed until Council approved the construction contract. Mr. Horne stated he fully understood that. Mayor Shaver stated he just wanted to ensure no one came back with a reliance argument. He stated if the TIF ordinance was passed by Council, and then it was never signed, he wanted it clear on the record that he did not want to see a reliance argument coming back from the developer saying they relied on the City to do something with the TIF. He stated he wanted it clear they had no reliance, all Council would be doing is passing the TIF ordinance and the agreement may never be signed. Mr. Fix clarified the ordinance authorizes the City Manager to sign the agreement. Mr. Grasbaugh stated, however, what he understood is that the City Manager will not sign that agreement until they are signing the construction contract. Mr. Horne stated he heard the Mayor loud and clear. Mr. Grasbaugh stated the developer and the City want this to happen, but as the Mayor has stated, all Council is doing is accommodating the developer’s desire to have the TIF ordinance passed. He stated it did not give the developer any reliance that anything else was going to happen. Mr. Sabatino stated the Mayor has a very valid point, and Council wants to see what the terms will be in the agreement before they agree to move forward with it. Mayor Shaver stated having said all of this; it is the City’s desire to work with the developer to accomplish this project.

Mr. Grasbaugh stated the Committee had before them tonight two ordinances. The first ordinance amends the 2001 Cover TIF and provides for the removal of the designated property from the TIF and amends the description so that property is no longer included in the Cover TIF. He stated the second ordinance creates the new TIF. He stated it is a 30-year, non-school TIF on those two parcels and provides for the collection of the payments, and the money that goes to the school district will immediately be sent from the County Treasurer to the school district. He stated it is under this ordinance that the agreement is authorized. Mr. Grasbaugh stated the final document is the TIF agreement itself, and among other things this provides their agreement that they will make the TIF payments, their agreement that they are going to file in the real estate records of the County, a declaration stating not only will they make the payments, but also all subsequent people will make the payments. He stated the agreement also provides the developer will file all of the additional exemption applications with the County Auditor and the State of Ohio. Mr. Grasbaugh stated in Section 10 states the City if requested by them, we will provide the developer with a quit claim deed to any interest we may have in the property and they will provide to us, by general warranty deed, the property on which the road will be built. So, the City will own the property on which the road will be built. Mr. Sabatino clarified that the vocational school district will continue to receive the taxes they are collecting now, but they will not get any taxes off the increased value of what is built there as long as the TIF is in place. Mr. Wisniewski stated it was his understanding that was true for all of the entities.

Mr. Wisniewski stated he would like to have the opportunity to review the ordinances and the agreement that was given to the Committee this evening prior to sending it to Council, however, a Special Finance meeting could be scheduled just prior to Council and the agenda could be amended to place it on the Council meeting if there were no problems. Mr. Grasbaugh stated he could also provide all of Council with a redline version of the ordinances so they could see what has been changed very easily. Mr. Wisniewski stated he would like to have the redline copies in Council packets. Mayor Shaver clarified that in order to have the legislation included on the next Council agenda it would have to come out of Finance this evening. If a Special Finance meeting would be scheduled for Tuesday, then the agenda would have to be amended on Council floor to include the legislation on the agenda for that meeting. Mayor Shaver stated he would not like to see a TIF agreement added to the agenda on Tuesday night, because it would give the appearance that something was being done at the last minute and that was not the case. Mr. Wisniewski stated that was a valid point. He stated if the ordinance came out of Committee this evening and went on the agenda, and then there was a problem with it, it could always be tabled. Mr. Hackworth stated perhaps a work session could be scheduled just prior to Council and if there are any questions, they could be answered at that time. Mr. Wisniewski stated he would request a work session be scheduled for Tuesday, June 6, 2006, at 7:00 P.M., for all of Council so any questions could be answered prior to the regular Council meeting. All Finance Committee members concurred.

Mr. Wisniewski moved to forward the draft ordinance amending Ordinance 2001-127 to remove the property from the current Cover TIF to Council; Mr. Hackworth seconded the motion.. Roll call was taken with Mr. Wisniewski, Mr. Hackworth, and Mr. Fix voting “Yea.” Motion passed, 3-0.

Mr. Wisniewski moved to forward the draft ordinance creating the new TIF with the TIF agreement attached to Council; Mr. Fix seconded the motion. Roll call was taken with Mr. Hackworth, Mr. Fix, and Mr. Wisniewski voting “Yea.” Motion passed, 3-0.

4. ADJOURNMENT. There being nothing further Mr. Fix moved to adjourn; Mr. Wisniewski seconded the motion. Mr. Fix, Mr. Wisniewski, and Mr. Hackworth voted “Aye.” Motion carried, 3-0. The Special Finance Committee adjourned at 8:45 P.M., May 30, 2006.

RESPECTFULLY SUBMITTED:

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Lynda D. Yartin, Municipal Clerk