CITY HALL, 100 LOCKVILLE ROAD

COUNCIL WORK SESSION

OPEN DISCUSSION REGARDING PROPOSED ECONOMIC DEVELOPMENT AGREEMENT

7:30 P.M.

1. ROLL CALL. Mayor Shaver opened the work session at 7:30 P.M., with Mr. Fix, Mr. Smith, Mr. Hackworth, Mrs. Hammond, Mr. Sabatino, Mr. Wisniewski, and Mayor Shaver present. Others present were: Judy Gilleland, Lynda Yartin, Tim Hansley, Phil Hartmann, Carol Carter, and others.

2. Review and discussion regarding proposed Economic Development Agreement. Mayor Shaver stated he would like to begin with Ms Gilleland briefly outlined the changes in the draft agreement provided to all council members dated 11-2-06. She stated the changes are highlighted on the comparison copy provided to all council members.

Mr. Hackworth stated he would like clarification regarding reimbursing Violet Township the road and bridge levy and if that meant that as the property is improved and the value goes up, if we would reimburse them the new valuation. Mr. Hartmann stated he thought the goal was to have it locked in at the year of the annexation, so that should probably be made clear in the agreement if that is what council desires.

Mayor Shaver stated he would like to review the document in an orderly fashion, and he would like to state that he has no interest in presenting to the Township an agreement that we knew would be rejected, and he felt there were elements in this agreement that would be rejected. Mr. Fix stated he appreciated the efforts of Ms Gilleland, Mr. Hansley, and Mr. Hartmann in putting together this draft and it certainly presents another option. He further stated, however, he felt it did not take into account is the fact that the Township Trustees also have to vote on the agreement and he did not see any reason in this draft why they would want to do it. He stated there is nothing in it for them other than five percent on parcels that we annex and in return they would give up 50 percent of every economic development they do outside of our contiguous boundaries. He also stated it does not take into consideration that there are other entities out there that have higher tax rates that they can form JEDDs with just as easily, or more easily, than they can with us. Mr. Fix further stated this agreement fails to take into effect that we spent months with the Trustees in developing the document dated 10-3-06. He stated he felt it would be a mistake to discard that document. Mr. Fix stated the document that is before Service Committee is the 10-3-06 document and he is comfortable that if we are able to move forward with that document, with some amendments, that is the document that the Township Trustees have said they would support. He stated what we have with this new document is something that would be extremely disappointing to them, and he cannot speak for the Township Trustees, but having spent a lot of time with them, he would imagine this would be discarded very quickly. Mr. Fix stated he would suggest this evening, council focus their efforts on the 10-3-06 document and talk about how that might need to be changed to make it make sense for the rest of council. Mr. Sabatino stated he felt this new document is a different position, and the issue we have is that in at least three members of council’s minds, the proposal dated 10-3-06 is a bit one-sided, and this is something that is a lot more palatable to council. Mr. Fix stated he felt the Township would think this new document is very one-sided for the City.

Mayor Shaver stated he would like to go through the 10-3-06 document and discuss the differences in that document. Mayor Shaver stated he would like to note that he felt we need to be cognizant of a third potential player in this agreement, and that is Canal Winchester. Mayor Shaver stated over the years he has received assurances from the Mayor of Canal Winchester, and to date he has acted in accordance with those assurances, to not do anything within our school district boundaries. Mayor Shaver stated he would like to reciprocate that and have this agreement apply only within our school district boundaries.

Mr. Fix stated this document is worded so that it is within our school district boundaries and if there are opportunities outside out school district boundaries, we will need to determine if some sort of cooperative economic development agreement can apply, and that leaves the door open for things that outside of Canal’s school district but possibly within other school districts, so he is comfortable with the language as it is. There were no objections to excluding the Canal Winchester School District.

Mr. Hackworth stated he does have problems with the wording that we could only annex commercial properties along our borders, and although we may not want to do any residential annexations today, perhaps several years out we may need to consider residential development for some reason. Mr. Wisniewski stated he would like to get to the root of what the Township wanted from the City besides not annexing. Mr. Fix stated based on his conversations with the Township while putting this document together, it was very clear to him that annexing residential properties was a deal killer. Mayor Shaver stated the question then appeared to be if the agreement should exclude residential annexations. Mr. Sabatino stated he understood we were supposed to be crafting an agreement that put the Township and the City as equal partners, on equal footing, and he could not understand why it would be okay for the Township to have residential development but its not for the City. He stated they are currently developing new residential developments and apparently intend to do so in the future. He stated he just did not understand this logic, and he felt it should be just as viable for the City to have residential development as it is for the Township. Mayor Shaver stated then, Mr. Sabatino would like to see the City retain the right to annex residential property. Mr. Hackworth stated he agreed with Mr. Sabatino that we need to retain that right, and giving up that right would be a mistake for the City. Mr. Wisniewski stated he would prefer we not give up our rights of annexation as it is one of the basics of City government and home rule. He stated he is, however, willing to make concessions based on whatever the Township desires and work on trying to find the core issue. He stated as he understood it, it was tax related on some matter, and he would be willing to make concessions in that arena. Mr. Smith stated he looked at this as a roadmap of the future and he hoped it would codify a cooperative relationship. He stated he felt that inviting the Township into the decision process about residential property is a fair trade for the City to be guaranteed first refusal for any economic development in the Township boundaries.

Mr. Fix stated the document dated 10-3-06 was before Service Committee, and if any changes to the agreement were recommended this evening, would the process be that they would be brought to Service as proposed amendments. Mayor Shaver stated he felt they would be proposed amendments and requested that Mr. Hartmann prepare proposed amendments based on any suggested amendments made this evening for Service Committee.

Mr. Hackworth stated he would like clarification on what we are actually giving up on the road and bridge levy issue because if it is current property value versus future property value, then he was not sure why we would give an additional five percent. He further questioned if they would have an obligation to maintain the roads and bridges in that area. Mr. Hartmann stated he would prepare a paragraph similar to the current one with the option of current or future value so council can determine which they would prefer.

Ms Gilleland stated when discussing an annexation agreement for commercial development, the terms of who would provide what services would be outlined in the annexation agreement. Mr. Fix stated one of the critical components of this is that tax proceeds are split after expenses, and if we do have expenses incurred both on-going and up front, those are paid first and then the revenues are split. Mr. Wisniewski stated if the expenses exceed the revenue, then there would be a real issue. Mr. Hartmann stated that is a good point, however, he felt that was something that would be handled much easier in the agreement itself. Mr. Wisniewski stated the annexation agreement would be a very complex and in-depth document that outlined all of the details. Mr. Smith stated then, with the 50-50 or the proposed 80-20 split, that is a revenue split and there is no revenue unless there is something left over after expenses.

Mr. Wisniewski stated his concern was if we had a property that is sitting on our borders on Diley Road and it is going to develop commercially in the Township, under the agreement it will now be annexed into the City. He continued if we cannot reach the terms of agreement on that annexation, we do not have rights to that annexation with the landowner. He stated if we cannot reach an agreement with the Township as to expenses, the sharing or whatever, what would then happen. Mr. Wisniewski stated his concern was there was no way the City could annex it, no way to control it or develop it, unless we reach terms of agreement with the Township. Mr. Fix stated there would not be an incentive for the Township to zone something commercially without an understanding that there is either an annexation agreement or a JEDD. Mr. Hartmann stated hopefully this document will provide a framework that makes everyone want to work together.

Mr. Sabatino stated he felt we should retain our municipal right to be able to conform our boundaries, and he has not heard any strong argument that would justify us giving up that right. Mr. Hackworth stated he concurred with Mr. Sabatino and would like to see that removed from this agreement. Mr. Fix stated he thought conforming our boundaries would be a mistake and he was willing to give up that right. Mr. Smith stated he agreed with Mr. Fix on this issue. Mr. Sabatino stated he would like to make it clear that he was not saying we should conform our boundaries, just that we should retain our right to be able to do so.

Mr. Smith stated with regard to the length of time for the agreement, whether it was five or ten years is a double edged sword, and to agree on an equitable time period you almost need to make an assumption on your predicted pace of development. He stated, based on the past, he did not see where development would occur in great numbers in the short term. Mr. Smith stated he would be afraid to have the agreement for too short a term, and he did not mind doing a ten-year with a couple of five-year extensions. He stated he would just like the initial term to be long enough so we could have some really good opportunities for development to happen. Mayor Shaver suggested the time period of an original ten year term and two five year terms, and Mr. Smith stated he was suggesting those time frames just to get the discussion started. Mr. Fix stated perhaps 30 years is too long, he doesn’t know. He stated once we give up our rights for any period of time we need to make sure we get paid back for that, but to give up our rights for five years and hope that there is a good bit of development in that time is false hope. He stated it may take ten or fifteen years. Mr. Fix stated he would suggest we do a 15-year initial term and that we have the right to opt out at that point, or extend it for another 15-year term. Mr. Wisniewski stated the length of the agreement was not as important to him as much as the ability to terminate it because we need to be able to remove ourselves from the agreement if it proves to be a bad deal to the City. Mr. Hartmann stated currently the document reads that both parties must agree to terminate the agreement, and Mayor Shaver stated perhaps we should have a clause that indicates that the failure of either party to act in good faith could justify the unilateral termination of the agreement. Mr. Sabatino stated he agreed with Mr. Wisniewski that the term did not matter as long as either party could get out at any time.

Mr. Smith stated he felt that city-owned property should be excluded from this agreement, and Mr. Hartmann stated that is something that we should keep in the agreement.

Mr. Hartmann stated based on the discussion this evening he would prepare the proposed amendments for consideration and discussion at the Service Committee meeting next week.

3. ADJOURNMENT: There being no further discussion, the work session closed at 9:17 P.M., November 2, 2006.

RESPECTFULLY SUBMITTED:

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Lynda D. Yartin, Municipal Clerk

ATTEST:

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David Shaver, Mayor