Trending
COLUMBIANA -- Legal counsel for both the city and the Columbiana School District are negotiating an agreement that would help address the school district's complaint with Community Reinvestment Area (CRA) tax breaks.
Columbiana Municipal Attorney Mark Hutson was authorized by city council during the Dec. 5 meeting to begin discussions with the school district's legal counsel to come up with a plan that would allow the city to continue utilizing the CRA as an economic development tool in a way that would satisfy the school district's concerns.
School officials approached council for the second time on Dec. 5 to continue discussions on the matter.
District Superintendent Don Mook, Treasurer Kathy Davies and some school board members presented their side, stating that the CRA tax abatements result in a financial "burden" for the district.
However, city officials don't believe the tax abatements are causing undue financial hardship for the school.
"As we have said all along, we don't want the school to be harmed. As the motion stated, council is willing to enter into an agreement that if the expenses of the CRA to the school exceeds the revenues from the residential CRA program as a whole, including property taxes, and income taxes the city will be willing to make them whole. Our figures show that the school is not being negatively impacted and the CRA is already satisfying the school district's needs," Noel said after the meeting.
The city implemented the state-sanctioned CRA program about five years ago and has since entered into several agreements with residential, commercial and industrial property owners, offering up to 100 percent tax abatements over a period of 15 years for new construction projects.
Agreements for each project must be approved by city council and also the school district in the event that a proposed agreement would affect the district's tax base.
Aside from state funding and the city's 1 percent income tax revenue, the district relies heavily on property tax revenue.
School officials say 15 years is too long to go without receiving revenue from the CRA projects.
They also questioned the need for a CRA program and why it was started.
Board of Education member Kelly Williamson noted during the meeting that several other municipalities around the state and nearby -- including Boardman, Canfield, Poland, and Austintown -- completed successful new housing developments without a CRA.
Mayor Rick Noel said during the meeting that he reached out to the school district via a letter (a copy of which was provided to this paper) and also visited the school in person to attempt to set up a meeting outside of city chambers to discuss the matter prior to the Dec. 5 meeting, but received no response.
"We feel this kind of format is not appropriate, but since you give us no choice, I think we have no other choice but to respond to you tonight," he said.
Williamson reiterated that council was told at the October meeting that they would be returning on Dec. 5 to see where the city stood regarding the district's proposal about changes to the CRA program.
"We wanted to meet with the whole council. We addressed council the first time this past November. We just think it's needed for the whole council," Williamson said.
Noel countered that the CRA program has been successful since its inception and that the city has looked into the district's own financial projections, including its five-year financial forecast, and does not see any evidence of financial hardship.
Noel also cited the results of an independent study conducted by Thomas Maraffa in 2022 that stated that the CRA program is not negatively impacting the school district.
Maraffa was serving as an independent consultant for the Columbiana County Economic Development Agency at the time of the study.
The school district was also privy to the study at the time, however Board of Education member Scott Caron said during the Dec. 5 meeting that the study was not accurate and that he didn't agree with the results.
Noel pointed out that based on the district's financial forecast and information provided, the district is projected to remain in the black in the future, with increases reflected for property tax revenue and the 1 percent income tax revenue. (Those figures were also provided to this paper.)
Noel said that income tax revenue has increased 51 percent from fiscal year 2018 to 2023, from $1.8 million to $2.8 million.
"I don't see where the 'burden' or concern is that is being caused by the CRA," he said.
Williamson, Caron and school officials countered that just because the forecast appears favorable it does not mean that the school has a lot of money or should not have a say in where that money is going.
They cited possible future state funding changes and other variables as a reason.
Treasurer Kathy Davies noted that ESSER (Elementary and Secondary School Emergency Relief) funds included in the forecast also made a difference in revenue.
Noel also pointed out during the meeting that the school district signed off on a CRA agreement with APL Properties in 2022 for the Lake Front property development.
That agreement also authorized the tax increment financing, or TIF, for the project as well.
According to the agreement, a copy of which was also provided to this paper, APL and the city agreed on a 100 percent property tax abatement for a period of 25 years for the Lake Front improvements.
The agreement states that "while the school district supports economic development within the City, the school district has concerns as to the impact of the development of the Lake Front Land, and specifically the cost of the school district from additional students residing on the Lake Front Lands, upon the school district's budgets."
The agreement also states that the school district and APL reached an agreement whereby APL will address the district's concerns and as a result, according to the summary of understandings, "the school district will not suffer disadvantage as a result of the TIF and the CRA."
The agreement also states that should the cumulative gains in revenues realized by the school district attributable to property taxes on Lake Front land improvements, school income taxes generated from the property, plus all other school district revenue sources not meet or exceed increases in cost incurred by the school district on a per pupil basis for Lake Front property students, APL will pay the difference between the school district's cost on a per pupil basis.
School District Superintendent Don Mook said that the recent proposal offered to the city by the school is similar to what was agreed upon in the APL document.
"We would love nothing more than Mr. Hutson to work with our legal counsel to make sure we have a fair and equitable piece," he said.