PATA History Pages

City at Debt Ceiling, Diverts School Revenue for Future Projects

City Pushes the 10 mil Limit, Tax Increment Financing Planned

CITY IN BIG DEBT??

One topic that many area residents have probably not heard enough about (partially because it is a fairly confusing subject) is the fact that the City of Pickerington is currently under significant debt.

By law, the combined governmental agencies for an area (County, Township, School District and City) can borrow up to 10 mills of the total property value in a particular area.
This debt is then paid by the taxes you pay to the City, etc. Those 10 mills of property values in the area are called “Inside 10 Mills.” What is a mill? Good question. A mill is one tenth of a penny. So if your house is worth $100,000, each 1 mill levy that is added costs you another $100. The good news is that without your say all governmental agencies can borrow on your behalf up to only 10 mills without your approval. So your $100,000 house can cost you only $1000 in property taxes that you do not have a say in. Above 10 mills other additional taxes, like school levies and other tax proposals on the ballot add to this total, but only with voter approval.

The point (and please forgive us if we get bogged down in this) is that the combined governmental entities have currently borrowed the equivalent of 9.9541 mills. Using the $100,000 property value example located within incorporated Pickerington boundaries:
 some of this money goes to Fairfield County ($193 to the County)
 some of it goes to the Township (about $10)
 the rest of the 9.95 mills (about 7.9191 mills – or $791) goes to the City.

These figures are based on the current Ten Mill Certificate available from both the City Finance Director and the County Auditors office. Again, this does not include the funds that you are paying in School District taxes.

The good news (and the bad news for that matter) is that the city is now bumping its head on the legal roof of this “Inside Millage.” Remember, the combined governmental agencies can’t go over the 10-mil limit, and right now those agencies are running with a combined 9.9541 mills. The City has bellied up to the taxation buffet for 79% of the total available. What this means is that basically, by law, the City has tapped the banks as much as they are legally able to, while limiting the financial capabilities of the other agencies. The good news is that the City can’t borrow much more without your approval. The bad news is that the City has effectively tied all governmental agencies hands behind their back in hitting this 10 mill ceiling. The County, the Township, the School District and the City are all now precluded from accessing funds inside the 10-mill cap for most types of project because the City has reached the debt limitation imposed by State Law.

SO WHAT?!!?

It’s really not a bad thing that the City can be stopped from borrowing ad nauseam. The problem is that in order to dig itself out of this debt, the City needs to grow its tax base by annexing and developing more and more land. By doing this, there is more value in the land, more taxes coming in, and hopefully a reduction of the debt. To grow the community (particularly to grow an INDUSTRIAL/COMMERCIAL tax base) the City needs to either improve existing roads, or build new ones. Sewer and Water services need to be extended to new areas as well. This all costs money.

Based on the debt that the City has currently incurred, it will be difficult for the City to make these necessary improvements without either creating some magic. In the past (and currently) one of the forms of this magic is TIF’s (Tax Incremental Financing). This method takes income funds from one source, usually our schools, to fund infrastructure expenses. And who do you think gets to replace these needed funds to our schools?

The reason the City is in this financial bind is that it has for quite some time turned over all available (and annexed) land to residential homebuilders. Instead of building the absolutely necessary diversified tax base with a mix of commercial, industrial, retail, and residential properties, the city has allowed home after home to be built with no balancing industrial tax base. And remember that the City loses money on every house that is built. Our December 2000 PATA newsletter (see http://www.neighborhoodlink.com/org/pata for previous editions) detailed the fact that the cost of community services is roughly $1.10 for each tax dollar brought in on residential property.

What this means is that the current City Council is guilty of continuing a growth policy started by former Mayor Lee Gray, and perpetuated by current Mayor Randy Hughes, that is literally choking the City with debt. Not to mention what their TIF’s do to our schools.


To avoid exceeding the debt limit, to avoid an eventual financial situation that could very well call for additional taxes or special assessments, the City needs to catch its breath, come up with a solid comprehensive land use plan, and move forward in a well thought out manner. That would mean immediately putting the brakes on additional residential development within the city. It would mean cooperating with Violet Township and putting together a CEDA in which EVERYONE, the City, the Township, and most importantly the School District comes out a winner. The February edition of the PATA Newsletter talks more about development in the Pickerington area (again refer to our web site)

PATA Urges your Attendance at an Important Hearing

On June 19th, the City will hold a public hearing at 7:00, at City Hall in downtown Pickerington (100 Lockville Rd.). This hearing has been set up to discuss the annexation and zoning of the “Diley Property” along Diley Road.

THIS IS A CLASSIC EXAMPLE OF WHAT HAS GONE WRONG WITH THE CITY OF PICKERINGTON!

The Diley property (245.5 acres) lies just 1½ miles from Rt. 33. The City has already applied for a State & Federal grant to widen Diley Road, and it feels that this request will be granted. The comprehensive land use plan, put together in 1993 by a more reasonable group of officials with strong input from the citizenry, slated a considerable amount of this property for commercial development. Why then, in 2001, is the city in such a rush to use this prime real estate to build more homes? This is a question that should be asked individually of each City Council member and Mayor Randy Hughes at the meeting on the 19th. It does not make logical sense, for a city with the considerable debt that Pickerington is suffering from, for that city to do the WRONG thing and authorize the building of 520 more houses. AND THIS SAYS NOTHING ABOUT WHAT THE CITY IS DOING TO OUR SCHOOLS BY ADDING ANOTHER 500+STUDENTS IN THE COMING YEARS.


Again that meeting time is noted below, just as the City advertised it in the Lancaster Eagle Gazette

>From LANCASTER EAGLE-GAZETTE, May 29, 2001<

Notice of Public Hearing

The Pickerington City Council will hold a public hearing at 7 p.m., June 19,
2001, at City Hall (100 Lockville Road Pickerington, OH) for open discussion on the proposed Preliminary Development Plan and rezoning from AG to PR4 for proposed annexation of 245.5 acres along Diley Rd. north of Busey Rd.

Details available from Municipal Clerk Lynda Yartin.

The membership of PATA urges all concerned community citizens to attend the hearing on the 19th to voice your strong concerns about the city’s choices of land use.

TEXT OF THE ZONING SECTION of the pre-annexation agreement appears on the Our pages to the left for your information.

Additional Experts provide comments related to municipal debt.

Figures from Mr. Conley, Senior Principal of Seasongood and Mayer, a bonding firm used in much of Fairfield County, in providing many local governments financial analysis, indicate the following data:

Pickerington’s Cash Balances at year-end:
Year End Balance Percentage of Revenues


1997 $930,000 28%

1998 $750,000 22%

1999 $620,000 16%


So the question bears asking – With our predominance of residential zoning and growth, are we following a predictable path of Costs for Community Services (COCS) outstripping our balance to finance this form of growth?

Mr. Conley states, “looking at the graph the financial conditions are on a down stroke and that if the 2000 year end cash balances are less than in 1999, it suggests the financial conditions of the city are weakening.” Mr. Conley also stated that “Operating expenses are beating out revenues.”

Contact Pickerington Officials and let them know what you think!

Contact City Officials in Pickerington