Council sets public hearing on cooperative economic development agreement with Perry Township amid questions over 70/30 split

Salem City Council on Dec. 2 introduced and approved resolution 251202‑72 to set a public hearing for review and possible acceptance of a cooperative economic development agreement concerning annexations with Perry Township. The resolution was read by title and approved under an emergency clause.

The vote came after extended council questioning about the agreement’s financial mechanics and time frames. Councilor Mr. Harrington said his previous analysis assumed none of the township residents currently pay city income tax; he warned that if some residents already pay the city income tax, the municipal revenue gains from the proposed 70/30 fee split would be smaller than his earlier figures suggested. "In the analysis that I presented ... If 50% of the people pay already in city income tax, then the numbers that I presented a couple weeks ago would be less in our favor," Mr. Harrington said.

Councilors asked who would monitor the 70/30 arrangement; participants discussed whether the auditor, the treasurer, or a designated staff member (referred to in the transcript as Rita) would oversee collections and accounting. The law director cautioned that some deed‑restricted parcels are exempted for a period, and noted that other new housing could create contiguity that enables future commercial development. Utility staff reiterated that they are not instituting new deed restrictions and that annexation requires contiguity and a service request.

Why it matters: the agreement would set terms for annexation and a fee in lieu of taxes that affect how income tax or fees are allocated between the city and the township; councilors said additional financial analysis and clear monitoring responsibilities are necessary for understanding long‑term budget impacts.

What council decided: the council approved resolution 251202‑72 to set a public hearing on the cooperative economic development agreement and declared an emergency to allow prompt scheduling. Council also directed staff and finance committee members to examine monitoring responsibilities and the potential fiscal impacts in follow‑up meetings.

Next steps: the city clerk and planning staff will schedule the public hearing and publish notice as required; the finance committee is scheduled to meet Dec. 16 to continue reviewing related budget and wage‑ordinance issues.