Ellis County hears primer on RHIDs as developer seeks district for 13-house subdivision east of NCK Tech

An attorney from Gilmore & Bell, serving as Ellis County special counsel, told the Board of County Commissioners that a Reinvestment Housing Incentive District, or RHID, is a tax‑increment financing tool counties and cities can use to help pay eligible project costs for housing developments.

The attorney said RHIDs “are tax increment financing” in which a base valuation is frozen on the district’s establishment, taxes on that base continue to be distributed pro rata to taxing jurisdictions, and “anything above that base is segregated and put into a special bucket that can be utilized to pay for eligible project costs.” Eligible costs typically include horizontal infrastructure and land acquisition; the statutory maximum term is 25 years and up to 100% of eligible costs may be reimbursed under the statute, though local governing bodies can set shorter terms or narrower reimbursement rules.

Why it matters: commissioners and a local developer discussed using the tool to lower per‑lot infrastructure costs so homes sell at lower price points without increasing a typical homeowner’s ad valorem tax bill. The county would control segregated RHID revenues and access by developers would be established in a development agreement that obligates developers to construct specified improvements before reimbursement.

During the meeting, developer Adam Pree described a proposed subdivision east of North Central Kansas Technical College. Pree said the project would include 15 lots (one for water retention, one offered to a neighbor to purchase at cost) with 13 lots intended for new home construction; water would be supplied by private wells and sewage would connect to Big Creek Sewer District using a new lift station. Pree said the lift station “could be north of 250,000.” He said he expects no direct county road cost because existing roads are already maintained by the county, and that the project “will work” if the county approves an RHID; without an RHID, he said the project likely would not proceed.

County staff and commissioners asked how RHIDs differ from special assessments. The attorney explained that RHIDs do not raise an individual homeowner’s ad valorem taxes; taxes are levied as usual but the increment above the frozen base is redirected to reimburse eligible project costs, which can lower the effective cost per lot compared with special assessments added on top of ad valorem taxes.

Commissioners asked several process questions that the attorney answered: jurisdictions must first make findings of housing need and submit those findings to the Kansas Department of Commerce for approval; the governing body then drafts a project plan, publishes notice and holds a public hearing scheduled 30 to 70 days after the resolution calling the hearing; following a favorable hearing the base valuation is set and taxable increments begin to be segregated. The attorney also noted a 30‑day window in which an affected school district may take official action to veto formation of an RHID if it finds the district would be adversely impacted.

Commissioners discussed whether Ellis County should adopt a formal RHID policy to provide guardrails for future requests or handle requests case‑by‑case. Some commissioners said overly restrictive policies can make the tool unusable; others raised concern that no policy leaves future decisions ad hoc and subject to changes by election. Commissioners noted county standards differ from city standards (for example, county road requirements and rural water district standards) and that any RHID policy would need to reflect those differences.

On funding supports, Pree and the attorney said grant funding for the lift station is possible but uncertain. Pree said local grant prospects are limited and estimated grant probability at less than 50%; the attorney recommended including development‑agreement language to adjust RHID reimbursement if the developer later receives grant funds so there is no “double dipping.” The attorney also cautioned that RHID revenues typically take two to three years to begin flowing because assessed valuation cycles delay initial collections.

Votes at a glance: The commission approved a motion to recess into an executive session under the attorney‑client privilege exception of the Kansas Open Meetings Act for 30 minutes; the motion passed 3‑0. No policy decisions or RHID approvals were made at the meeting.

How the project would proceed next: commissioners and county staff indicated the developer still must file the final plat (Pree said the plat is prepared but not yet filed), and whether the matter goes to the Planning and Zoning Commission depends on whether platting, zoning changes or additional subdivision review is required. Any RHID formation would require the statutory process described above, notice to affected taxing jurisdictions, and a development agreement specifying eligible costs, repayment mechanics and protections against reimbursement if other funding sources cover the same costs.

Community context: the developer and commissioners framed the proposal as potentially increasing availability of lower‑cost homes in Hays, where buildable lots are limited. Commissioners emphasized that an RHID could be structured differently for county projects than for city projects because city mill levies produce larger captured increments than county‑only RHIDs.