JOPLIN, Mo. —
With an agreement in place, the Joplin Board of Education on Monday unanimously voted to support the tax increment financing district that is being proposed by the city and its master developer to spur redevelopment projects in the wake of the 2011 tornado.
Officials with the school district had been working with the city and the developer, Wallace Bajjali Development Partners, to build into the TIF proposal some financial protection for the school district over the 23-year duration of the tax-break plan.
“The TIF, in its original form, would have been disastrous for the school district,” said Superintendent C.J. Huff. “We needed enough flexibility in the plan to address possible growth.”
Officials said the TIF proposal would freeze assessed valuations at a post-tornado level, which is about $39 million lower than they were before the 2011 tornado. That amounts to more than $1 million in lost revenue annually for the school district, officials have said.
The agreement reached among the school district, the city and David Wallace, CEO of Wallace Bajjali, was disclosed Monday by Huff during a special board meeting. It directs a $13 million payment to the school district to help offset financial losses. The previous TIF plan had included a $12 million payment for those purposes.
The $13 million payment, under the agreement, is scheduled to be given to the school district in the third year of the TIF district, Huff said. An additional $1.6 million could be available to the schools through a TIF reserve account, and $1.4 million could be available through other sources of funding by the fifth year of the TIF district, Huff said. He said he expects the funds to be unrestricted.
The school district also has projected that housing redevelopment in the TIF area could attract new students, but without the increases in property taxes that the redevelopment would bring, as that revenue would go back to the TIF fund to pay off bonds used to finance building projects.
To address this challenge, Huff said, the district will receive $3,925 per new student above an agreed-upon baseline enrollment number. The developer had previously offered a $2,500 per-student payment.
The amount will cover the annual cost of educating students — $1,361 per elementary student and $1,525 per middle school student, according to actual costs from Cecil Floyd Elementary School and South Middle School. The remaining amount of the payment per pupil would be set aside in escrow, Huff said. That money could be tapped in the future if one or more new schools would need to be built because of an increase in enrollment, he said.
Wallace, during a work session Monday night to update the Joplin City Council on his firm’s redevelopment plan, credited “a lot of brain power” from city and school officials to have reached a solution that is satisfactory to all involved.
“We feel that the math (behind the agreements) makes sense,” he said. “We feel that the TIF plan can support this. We thought it was a creative way to be able to solve the issue.”
Huff said a number of other negotiated points are expected to be written into the memorandum of understanding that will accompany the documents creating the TIF district, including:
• The TIF district will not extend beyond 23 years of the date of the adoption of the ordinance by the City Council.
• Total TIF bonds issued will not exceed $42 million for the duration of the TIF district.
• All surplus TIF revenue will be used for early payoff of the $42 million in TIF bonds.
• Any surplus TIF revenue available after the bonds are paid in full will be redistributed to the taxing jurisdictions.
• Through the developer, the city and the school district will work to locate and set aside property for future schools.
Board President Randy Steele said he was thankful that the school district, the city and the developer had worked together to reach a solution to the district’s anticipated challenges.
“It’s nice that our part is done,” he said, adding that he looks forward to returning the board’s attention to the school district and its students. “We’re pretty excited.”
The board’s vote of approval essentially directs the votes of Huff and Paul Barr, the district’s chief financial officer. They hold the district’s two seats on the 11-member TIF Commission, an advisory panel to the City Council.
THE TIF COMMISSION is scheduled to meet Friday and vote on whether to recommend the TIF district proposal to the Joplin City Council. The City Council has scheduled a meeting for Friday, Dec. 28, to consider the proposal.