Marysville city officials say their conversations with school leaders are starting to pay off.
They say the proof of that was on display in two pieces of legislation in front of council Monday.
Council approved a moratorium on the creation of tax increment financing (TIF) agreements for single-family homes through the end of 2025.
Council also heard the first reading of legislation that would allow the school district to collect 100% of the increase on residential properties, even those already in a TIF district, if it passes a new property tax.
A TIF is an economic development tool that diverts a property’s tax payments from things like schools, libraries, mental health and other entities that rely on property tax revenue, to the city for projects related to that property. While the property owner pays its full tax bill, the money goes to the city rather than those other entities.
The city placed TIFs on all or part of Adena Pointe, Walker Meadows, Keystone Crossing, Chestnut Crossing, Links Village, Woods at Mill Valley, Scott Farms and The Legends, meaning residents in those neighborhoods were paying school taxes, but the money was going to the city, not the school district.
City officials have explained that when the residential TIFs were implemented between 2004 and 2008, the city needed to build a wastewater treatment plant. Council member Mark Reams said that when the TIFs were implemented, it was council’s intent not to create more so the moratorium is in line with that expectation.
Under the new agreement, if the school district passes a new property tax, the city will continue to get the same millage it already receives through the TIF agreement, but the school district would receive the entire amount of the newly passed increase. In December, the city passed similar legislation that lasted only through the end of 2025. The legislation introduced Monday extended it through the 30-year life of the TIF.
Council member Henk Berbee said the city is 20 years through the TIF so, “10 years from now this should all be done and over with and any of the funds that currently the city receives from the TIF and helps to pay down the debt on the sewer fund, that all should be going away.”
He said he feels “very comfortable” with the legislation.
Berbee said the city continues to create TIF agreements for commercial property that does not add students to the school. He said the city has also approved some TIF agreements for multi-family housing, which is considered a commercial TIF, but has not done that if the developer does not have a payment agreement with the school district. Berbee said the city has tried in recent years to consider how development and incentives will impact the schools and other entities.
City manager Terry Emery said city and school officials have been holding regular meetings for months and the legislation is “basically a direct result of meetings that are continuing to take place.”
“We are making a lot of progress in our discussions with the schools,” Emery said.
He said there has been “some give and take” but officials are seeing “the overall benefit that not only the city has from the success of our schools, but vice versa.”
School Board Member Dick Smith said he agreed with Emery’s assessment. He said the conversations have been “very helpful to both the school district and the city.”
“We each, I think, are developing a better understanding of where the two government entities reside,” Smith said.
He said residents should see the city legislation and realize the schools and city are “making progress.”
“The city and the school district are working together so if anybody is listening or paying attention and questions that, these are a direct result of the conversations that we’ve had,” Smith said of the two pieces of legislation. “The conversations have been very direct at times, I would say blunt. And we still have a number of things that we need to work through, but I know that from my standpoint, I feel much more confident about the city and the school district being able to work together, shoulder to shoulder, to address the future.”
Smith told council that the school board is “looking forward to your approval of the actions.”
Emery said the conversations have “really given each of us an opportunity to understand each other and how things impact the city and how things impact the schools and how we can minimize those impacts on each of the entities together for the mutual benefit of the entire community.”
Council member Scott Hunter said there have been some “difficult conversations” but the two sides have “a lot of things in common that are mutually beneficial.”
Council president Donald Boerger said finding common ground and working together is “what government is truly about.”
“I hope that this shows not only to the schools but also to the community that we are working together to try to find common ground and we will continue to do that,” Boerger said.
He did say he wants residents to know that when one source of revenue goes away, the city needs to find new money.
“When money is taken away from one project to another, those projects are still there. So it means money has to be brought back, somehow, one way or another,” Boerger said.
Emery said the city and school district have more work to do.
“There is likely a strong possibility you will have other legislation that maybe coming forth in the coming months to do some things that specifically will not hinder what we are trying to accomplish in the commercial TIF areas but also will not hinder the schools as much with the number of students that some of those projects bring,” Emery said. “We are still working on those details.”
The legislation allowing the school district to collect revenue from future levies will be on the council for citizen comment at the April 8 council meeting.