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County financial adviser briefs council on TIF portfolio, flags effects of recent property-tax reform
Summary
Baker Tilly financial adviser Matt Eckerley told the Delaware County Council that the county’s 27 tax-increment allocation areas remain largely sufficient to meet debt obligations but that Senate Enrolled Act 1 (property-tax reform) requires recalculation of estimated revenues and may reduce future capacity for certain TIF uses.
Matt Eckerley, a financial adviser with Baker Tilly, told the Delaware County Council on April 20 that Delaware County’s 27 tax increment allocation (TIF) areas are generally performing as expected but that the county must re-evaluate revenue estimates in light of the recently enacted property-tax reform bill (Senate Enrolled Act 1).
Eckerley said the county filed its annual TIF management report on the DLGS Gateway and presented a look-back for 2024 plus a forward-looking presentation dated March 13. He told council members that the report includes the statutory listing and expiration dates for each allocation area, summaries of revenues and expenditures as of Dec. 31, 2024, and the status of outstanding debt obligations. He said two legacy allocation areas (Daleville and the original Morrison Road area) expire tied to the final maturity of bonds, while other areas have statutory lives of 25 or 30 years depending on establishment date.
Why it matters: TIF proceeds fund bond payments and infrastructure in defined geographies without drawing on general-county funds; changes to state law that alter deductions, personal-property assessment, or local income-tax replacement formulas could shrink the county’s taxable base and change projected TIF revenues.
Key points Eckerley highlighted included: - Expiration and reestablishment: When an allocation area reaches statutory expiration the base resets if the county reestablishes the area, so reestablishment does not preserve prior capture levels. - Fund treatment at termination: Legal counsel’s interpretation is that remaining money in an allocation fund, collected as TIF, must continue to be spent consistent with TIF restrictions even after termination of the allocation area. - Debt structure and taxpayer risk: For the county’s TIF-backed bond issues, the only county obligation to repay is the tax increment generated in the related allocation area; no other county funds are at risk unless an explicit backup was structured. Eckerley noted that some recent transactions were structured as incentives (developer purchases) and other issues were refinanced in 2021 to remove property-tax backups. - Performance and shortfalls: Most allocation areas’ estimated 2025 revenues are sufficient to meet debt service. Two areas (identified as Mersics and NEBO Land Partners) have estimated shortfalls; the county has agreements with private developers making the developers responsible for those shortfalls rather than county general funds.
Eckerley reviewed several geographies that have operating capacity or unencumbered balances that the Redevelopment Commission could deploy (for example, Midwest Metal and an area he described as part of the “Industrious Center” geography). He also pointed council members to call or email his office for parcel-level or debt-detail follow-ups.
On the recently enacted Senate Enrolled Act 1, Eckerley said the county must: quantify the reformulation of the homestead deduction for affected geographies (notably Daleville and Morrison Road); account for a new deduction applying to certain 2% tax-cap properties including farmland and some rental housing; and reassess the capture potential for depreciable personal property because grandfathered designated taxpayers keep prior treatment while newly captured personal property will face the new rules. He also said rewiring of the local income-tax (LIT) property-tax replacement makes the treatment of credits and caps uncertain and could reduce county revenues unless the county reenacts a replacement rate or otherwise adapts.
Eckerley and council members discussed prior refinancing that removed tax-backup obligations and stressed the value of good banking partners for future refinancing opportunities.
Councilor Whitehead and other council members asked clarifying questions about expiration rules, pass-through of homestead residential assessments (which the county has historically chosen to pass through in Morrison Road), and where to find the detailed parcel and debt tables filed with the state. Eckerley said the full reports were filed and that he would circulate the larger presentation he sent to county staff yesterday.
Eckerley cautioned that the county’s TIF picture will need recalibration as state agencies and counsel issue guidance implementing the new law, and that his office is already consulting attorneys and state agencies. He said, as of the presentation, he did not see immediate red flags to meeting bond service across the portfolio but emphasized ongoing monitoring and recalculation once guidance arrives.
Looking ahead: Eckerley recommended continued monitoring, potential refinancing opportunities when market conditions permit, and staff-level conversations about redeploying unobligated TIF balances for local infrastructure or targeted projects.
Ending: Council members thanked Eckerley and county staff, and the auditor’s office and redevelopment commission will receive follow-up materials and further technical analysis as the law’s effects become clearer.
