When the Aiken County School Board approved its limited participation in the City of North Augusta's major redevelopment efforts on Tuesday, that cleared a first hurdle for the City.
North Augusta officials still must get a favorable vote from the Aiken County Council as part of a complex process that will allow the City to get the financing it needs as part of a public-private collaboration.
If the City's goals for a baseball stadium, hotel, conference center and more are achieved, the School Board potentially could receive $1 million annually in the next 18 to 20 years.
The County Council rejected an earlier City proposal in March, prompting the City to postpone a similar vote from the School Board. The Board members almost certainly would not have approved that version either, said member Tad Barber.
“My initial thought was maybe we shouldn't be getting into the City's development project, but should do it by itself,” Barber said. “But the City did everything they could so we can be comfortable with the new plan.”
Other Board members had expressed initial concerns about the 30-year period in which the Board would divert tax revenue to the City. North Augusta Mayor Lark Jones and City Administrator Todd Glover came back in May with the new plan, and the Board accepted it by a 7-2 vote on Tuesday.
The negotiations between City and the School Board attorney and financial advisors provided “a clear picture of what we were looking at,” Fleming said. “The driver for me was the amount of time.”
Here in a nutshell is that process. North Augusta is relying on a Tax Incremental Financing plan. The School Board and County Council have been asked to divert tax revenues to help the City retire its costs for the redevelopment plans.
The reduction of the time from 30 years to 15 is significant, School Board attorney Bill Burkhalter said.
“What people still have misconstrued is that we are not going to use money we already have,” he said.
School District currently gets $4,000 in revenue annually for an undeveloped, 25-acre parcel within the Tax Incremental Financing area in North Augusta. From an earlier formal agreement in the late 1990s, the District had diverted tax revenues of about $66,000.
In conjunction with the new agreement, City officials have agreed to end that specific revenue diversion. The School District will get about $280,000 over the next four years.
Once the new Tax Incremental Financing plan takes effect for 15 years, the School District will divert tax revenue from its general operations budget, which could ultimately mean, over time, as much as $800,000 annually to the City and eventually for the School District once the 15-year period expires.
In the meantime, Burkhalter said, the City also agreed that the District can retain tax revenue from its debt-service budget, which is used for major facility needs and general maintenance. Burkhalter believes that action should generate $200,000 a year for the School District for the life of the formal agreement, and he's confident about North Augusta's future efforts.
“The old TIF does work and has proven itself,” said Burkhalter. “North Augusta has made a lot of infrastructure improvements.”