School hopes to capture some TIF district dollars

Representatives of Jay Schools have expressed concerns about funding cuts in future years.

The county may opt into an agreement specifying a portion of tax increment financing dollars go toward the local school system each year.

Jay County Redevelopment Commission agreed Wednesday to look into a proposed agreement with Jay School Corporation that would guarantee a certain amount of funding from new TIF districts to go into the school system’s coffers each year. Commission members also formally approved a resolution and economic development plan to begin the process of enacting three new TIF districts in Jay County.

TIF districts capture additional property tax revenue created by property improvements and set it aside to fund initiatives within the district, with the redevelopment commission overseeing those dollars.

The redevelopment commission is in the midst of creating TIF districts encompassing four prospective solar farms — Invenergy in northwest Jay County, Sun Chief Solar northeast of Redkey, Rose Gold Solar north of Dunkirk and New Jay Solar east of Dunkirk.

Jay County Redevelopment Commission non-voting member Shannon Current, who also serves as business manager for Jay School Corporation, read a prepared statement Wednesday to commission members.

“Jay Schools fully supports the county’s initiative to attract private investment and recognizes the significant long-term value of such projects,” Current said. “However, the fiscal landscape for public schools has changed substantially following the enactment of Senate Enrolled Act 1.”

Current referenced statistics compiled by financial consulting firm Baker Tilly, saying Jay Schools is projected to experience a $273,047 reduction in property tax levy capacity by 2028 and lose another $553,152 in local income tax revenues beginning the same year. That’s a total annual revenue decline of about $826,000 starting in 2028.

“These losses will occur irrespective of enrollment or operational efficiency and will directly affect our ability to sustain classroom, transportation and facility operations,” she said.

Current pointed to Indiana Code, which allows redevelopment commissions to allocate up to 15% of their annual TIF revenues toward educational or workforce training purposes. However, because the statute is permissive instead of mandatory, funding for the school could be up to the discretion of future commission members unless a separate agreement is enacted.

She and Jay School Corporation attorney Josh Atkinson presented a draft agreement to redevelopment commission, noting it’s modeled after a 2016 interlocal agreement between Jeffersonville Redevelopment Commission, the City of Jeffersonville and Greater Clark County Schools.

According to the agreement, dollars would be calculated based on the revenue “lost” by the school corporation as a result of the established TIF district. (Atkinson later clarified the school would be missing out on capturing additional tax dollars as a result of the upcoming solar farm developments.) It further states that each year the school’s lost revenue would be calculated based upon what the school would have received if the TIF districts weren’t in place.

Jay School Board member Chad Towell later shared a ballpark estimate for dollars the school would miss out on capturing, saying it would lose out on roughly $33,000 between the 10th and 25th years of the TIF districts.

Atkinson pointed to various other redevelopment commissions and school corporations across the state with similar agreements, all of which all requested specific dollar amounts.

“We’re not asking for a set sum of money,” he said. “Let’s do a calculation to see what would make Jay Schools whole …”

County auditor Emily Franks expressed concern about calculating the school’s annual allotment in that fashion, saying the county would likely need to hire a specialized firm to calculate the costs annually and that it may cost more than it is worth. She suggested setting a certain dollar amount or percentage instead.

Jay County Commissioner and redevelopment commission member Doug Horn pointed to various financial changes under SEA 1.

“I don’t want to cheat the school system out of anything, but I’m not sure we are, and that’s got to be explained to me better,” he said, suggesting the board table the agreement until it learns more about the financial impact.

Commission members Chuck Huffman and Harold Towell questioned whether the agreement needed to be approved along with other TIF legislation on the agenda Wednesday.

Atkinson said he wasn’t looking for redevelopment commission to approve the agreement Wednesday, suggesting county attorney Wes Schemenaur — he was absent — review the document first. He requested redevelopment commission forward the agreement along with approved TIF district legislation as it makes its way to other boards to keep the conversation going. Consultant Ed Curtin said attorneys could review the agreement over the next month and commission members could approve it at their December meeting.

Also Wednesday, the redevelopment commission approved an economic development plan for the three new TIF districts. According to the plan, the four solar projects represent a potential $473 million in new private investment in rural Jay County. Commission president Carl Walker noted a few minor changes to the plan originally proposed last week, including language which now generalizes energy projects instead of specifying solar and wind — he pointed to other potential energy projects in the future, such as nuclear energy. It also now allows using TIF dollars for educational purposes, an amendment proposed last week by Huffman.

Also, redevelopment commission members Horn, Walker and Huffman, with Towell dissenting, approved a resolution to formally enact the TIF districts. (Towell explained after the meeting he felt the resolution had too many unknowns and would have liked more time to tighten the language.)

A local resident questioned why redevelopment commission aimed to finalize legislation before Jan. 1. Walker explained land assessments are calculated at the beginning of the year. (As discussed at last week’s meeting, Skycrest Solar Farm may begin construction soon. If not enacted before then, the TIF district could miss out on some tax dollars captured from the project.)

Plans were to present TIF legislation at Jay County Plan Commission’s meeting Thursday and Jay County Commissioner’s meeting Nov. 24. If approved, redevelopment commission will host a public hearing and vote on final approval in early December.

In other business, commission members briefly reviewed a 60% cost design opinion from design firm Rundell, Ernstberger and Associates for proposed infrastructure plans on the county’s 68 acres along Indiana 67 in Portland. The cost is estimated at $2.65 million.

According to officials, no bids were submitted for the project. Per Indiana law, because there were no proposals, county officials may begin negotiating with individual firms on the project.