Canal Winchester council debates TIFs and new-community authorities for upcoming developments

Canal Winchester City Council on Feb. 18 spent a large portion of its meeting weighing tax-increment financing (TIF) and new community authority (NCA) tools as ways to fund roads, utilities and services for proposed developments, including a project identified repeatedly as Miller Farms.

Councilors and staff said the city faces rising development pressure and must decide which finance tools — alone or layered together — best protect current taxpayers while covering the infrastructure bills new projects will generate.

Development director Lucas Hair outlined how municipal TIFs work in Ohio: incremental property-tax revenue that results from new development is diverted into a TIF fund for public infrastructure while taxing entities keep their pre-development revenue. “Property taxes calculated on that increase in value are diverted from the normal property taxing entities and placed into a TIF fund,” Hair said during the meeting.

City attorney Thad Boggs and staff described NCAs as a separate statutory mechanism that can create new, targeted charges (for example, on rental receipts or as additional millage) to finance community facilities in defined areas. Boggs cautioned the council about a legal limit the council heard on mixing some charges with TIF: “If a new community authority imposes a community development charge determined on basis of rentals received … improvements of real property located in that new community district and subject to that charge may not be exempted from taxation under … the TIF section,” he said, referencing the relevant statutory interaction discussed at the meeting.

Councilors pressed staff on trade-offs. Some members favored using multiple tools — residential/commercial TIF plus an NCA charge — to capture differing revenue streams. Others warned an NCA can create a two-tier tax structure and can make it harder for other taxing entities (schools, counties) to pass levies later. City staff said developer-provided revenue projections and the city’s more conservative fiscal estimates differed, and staff stressed all projections rely on auditor valuations and assumptions that can change.

Hair said TIFs in Canal Winchester generally are structured so the school district is made financially whole and the municipality uses only the incremental revenue for infrastructure, adding that TIFs can be extended for terms (often up to 30 years) to cover repayment of public works. Staff and council discussed practical project impacts — for example, that Oregon Road would need widening and that shared infrastructure costs could otherwise fall on existing taxpayers.

Council members requested more detailed, side-by-side materials ahead of a planned March 3 presentation by a finance attorney the city has invited to brief council on differences among TIFs, NCAs and related options. Staff said it would circulate the consultant’s slide deck ahead of the March 3 meeting and that it has already run preliminary revenue projections internally and received developer-provided pro formas for comparison.

No formal vote or binding direction on TIFs or NCAs was taken; council agreed to hear the consultant’s presentation and to review staff’s pre-read before any legislative action.

The city flagged Miller Farms and a pending Wilcox proposal as likely near-term items that could be affected by any policy decision on finance tools; councilors said they preferred a public, comparative presentation before making a choice.

Next steps: staff will circulate the consultant’s materials in advance of March 3 and continue to model conservative and developer pro forma scenarios for council review.