The Joplin Globe, Joplin, MO

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November 16, 2012

Joplin school officials cite assessed value, enrollment as TIF-plan concerns

JOPLIN, Mo. — Joplin school officials say a proposed tax increment financing district could cost the school district millions if it is implemented.

In a Nov. 16 letter addressed to the 11-member TIF Commission and released to the Globe by Superintendent C.J. Huff, district officials outlined specific challenges they anticipate facing should the TIF district be created.

The TIF district is being proposed by the city’s master developer to help finance $806 million in redevelopment projects. It would freeze tax revenues at existing levels for all those that receive the revenue except the city. Any new taxes realized from increased assessments as the TIF district grows in value would go to a city TIF fund to pay off bonds the city would obtain to help finance projects.

School administrators’ primary concern, they said in the letter, is that the TIF district as currently proposed would freeze the school district’s assessed valuation at a post-tornado level, which is about $34 million less than it was before the May 2011 tornado. Officials estimate it would cost the district nearly $21.8 million over the life span of the TIF district, a maximum of 23 years.

In their letter, administrators suggested that commissioners consider payment in lieu of taxes to the district based on pre-tornado assessed valuation levels with 1.5 percent growth each year. This approach would “give us the funds as we need on an annual basis through the life of the TIF,” the letter states.

The second concern voiced in the letter is that of anticipated increased enrollment, particularly within the TIF area, without additional increases in property tax revenue coming from new developments in that area.

The district has projected that the 500 apartment units and 1,700 single-family units being planned for development could draw an additional 2,630 new students to the district, which it argues would stretch its existing schools to capacity and could require the construction of an additional middle school and two elementary schools. Those construction costs could run about $73.4 million, school officials say, while an additional $69.7 million in operating costs would be needed for extra staffing and costs such as utilities and transportation.

The district also maintains that the TIF proposal does not meet the “but-for” test, which contends that the area would not redevelop as quickly or to as high a standard but for the TIF project.

Officials cite “significant areas of renewal and reports of rebuild permits issued” as well as the fact that the TIF area, which encompasses more than 6,000 parcels across Joplin, covers areas of the city that are “unaffected by the tornado,” such as downtown, and “unwarranted” because of prior redevelopment, such as the west side of Range Line Road.

Paul Barr, chief financial officer for the Joplin school district, said the letter is not meant to be a statement of support of or opposition to the TIF proposal. The Board of Education is slated to make that determination, likely at its Nov. 27 meeting.

“I don’t think we take a stance with that letter that we oppose it or support it. I don’t think there’s any reference to just a flat statement of opposing the TIF,” Barr said. “To the contrary, I think it indicates we’re excited about a growth opportunity and the improvements to the area that a TIF could bring.”

David Wallace, CEO of Wallace Bajjali Development Partners, was traveling on Friday and said he would not have a response to the school district’s statements until he has had a chance to read the district’s letter to the TIF commissioners. He said that would be Monday.

“The TIF plan offers substantially greater benefits to the school district than without the creation of the TIF plan, and I am disappointed the school district would not have reached out to share these concerns with me prior to sending a letter to The Joplin Globe,” he said. “I look forward to having productive conversation with the school district as we advance this project.”

City Manager Mark Rohr also was traveling on Friday and would not comment because he had not seen the school district’s letter.

In the letter, the district also requests:

• Financial restrictions on the TIF. Specifically, school officials have asked that revenue from the TIF be used only for paying the principal and interest of the bonds with the goal of paying those bonds off before the end of the 23-year term. They have also asked that additional projects that could extend the life of the TIF beyond 23 years not be phased into the plan.

• That the timeline of approving the TIF plan — which is scheduled to be the subject of a public hearing Nov. 30 and will likely go before the City Council next month — be extended “to allow a full review and evaluation of the plan by all stakeholders and the public.”

• An annual audit of the TIF proposal.

Barr has regularly asked questions of commissioners during their meetings, but Friday’s letter is different from his previous memos in that it encompasses all concerns from school administrators, he said.

“As of now, that comprises the sum total of our concerns — questions, comments and requests on everything TIF. Right now, that is everything,” he said.

Globe staff writer Debby Woodin contributed to this report.

Next meeting

The Tax Increment Financing Commission is next scheduled to meet at noon Tuesday, at which time Paul Barr, chief financial officer for Joplin schools, said he expects city commissioners to discuss the issues raised in the school district’s letter.

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