TIF
Agreement Synopsis
In
2012 The city, and Wilmington schools agreed to a Tax Increment
Financing (TIF) arrangement with ATSG, the parent company of Airborne
Express. The deal will divert property taxes that ATSG would normally
pay to the Clinton County treasurer for a new joint use maintenance
and paint (JUMP) hangar being built at the Wilmington Air Park. Those
tax revenues would, under normal circumstances, be distributed to the
various local entities such as the school district, city and county.
The
state of Ohio has arranged for
a $4 million loan to help finance the construction of the hangar and
the diverted tax dollars will be used by the city to pay off that
loan over the 20 years starting in 2016.
The
hope is that the new
259 good paying promised by ATSG as a result of the hangar
construction will increase tax revenue by other means, both direct
and indirect.
All
JUMP hangar Property tax payments shall be placed in a city
controlled state loan repayment fund, called the service payment
fund.
Starting
in tax year 2014, collected in 2015, the city will start collecting
service payments from JUMP hangar property taxes.
Payments
from the service fund for the $4 million, plus 1% interest, loan
repayment, shall commence on 5/15/16 with the first payment of
$88,145 and a second payment of $88,586 on 11/1516. Twice per year
payments of increasing amounts will continue until the final payment
of $107,000 is made on 05/15/36.
VALUATION OF PROPERTY
Assuming that the original value
of the hangar will approximate the $15.5 million cost of
construction, the resultant tax payment would be:
15,500,000 X .35 = 5,425,000
taxable value X .048 tax rate = $260,671 per year for the service
fund.
Under
this valuation scenario, where the first year loan payment of
$176,731 is $83,900 less than service fund revenue the Wilmington
school district can
receive their annual compensation payment.
ANNUAL SCHOOL COMPENSATION
PAYMENTS
The
city shall make semi annual payments to the Wilmington school
district from the service payment fund, if
enough funds are available.
The payments will calculated at
25% of the amount the district would have received if the TIF
agreement had not existed.
Using the above valuation, the
amount of the annual payment would be:
$5,425,000 X .0263 (school
millage) = $141,000 X .25 (agreement allowed) = $35,263. Using the
same formulation Laurel Oaks JVS would receive $3,369.
Note: Any new school levies
would effect the annual payments to the schools.
INCOME TAX
IF
the service fund lacks sufficient money to fully compensate the
schools in any given year the city shall provide make up payments via
new income tax sharing
If
no make up payments are required: From calendar year 2012 and
thereafter the City will make annual income tax payments to the
school district equal to one-third of any new city
income tax revenues derived from new JUMP
hangar
employees including construction employees.
Paul
Hunter (contact or comment paulhunter45177@gmail.com)