Cash and Kalahari: Who gets the TIF money?

By SHAWN FOUCHER foucher@sanduskyregister.com PERKINS TWP. Property taxes from Kalahari Resort have generated more income than expected in the past few years, leading Erie County officials to figure out how much of the surplus they can keep before forwarding any to Perkins or Huron schools.
Sandusky Register Staff
May 16, 2010

 

By SHAWN FOUCHER

foucher@sanduskyregister.com

PERKINS TWP.

Property taxes from Kalahari Resort have generated more income than expected in the past few years, leading Erie County officials to figure out how much of the surplus they can keep before forwarding any to Perkins or Huron schools.

The county is sitting on $1.4 million in surplus funds from Kalahari's property taxes, money accrued in the past few years, since Kalahari added new guest rooms and more recreation areas.

When the water park came to town in 2005, its planners worked with Erie County to set up a special tax district.

The tax district diverts half of Kalahari's annual property taxes toward public infrastructure improvements. The improvements -- about $7.4 million worth -- were in areas around the water park and along U.S. 250, such as road and lane upgrades and sewer expansions.

Half of the water park's annual property tax -- about $715,000 a year -- pays off bonds that helped finance the infrastructure improvements, while the other half of the revenue goes to Perkins or Huron schools, county officials said.

The county anticipated it would take about 14 years to pay off the bonds.

But as Kalahari grew over the years, the property tax revenue has been greater than anticipated.

The surplus tax money is income beyond what was was originally projected when Kalahari opened, and it's slated as school district revenue.

But county commissioner Tom Ferrell said the tax-district agreement allows the county to use surplus funds to pay off debts accrued when the county upgraded infrastructure inside Kalahari's special tax district. The county prosecutor's office is currently researching the matter, Ferrell said.

Erie County is about $120 million in debt, some of which is money borrowed from the state to finance sewer projects on U.S. 250.

Perkins Schools superintendent Jim Gunner said he learned of the surplus revenue from Kalahari's property taxes a few months ago, and there are agreements in place to handle such situations.

"Should that happen, the money flows back to the rightful owners," he said.

Ideally, that would be the school districts.

"We put a formal request to the county," Gunner said. "It's tax dollars we would have been entitled to all along."

Even with county commissioners figuring out if they can use some of the money to pay for debts, Gunner said he's not worried.

"I would tell you the county is very cooperative with us," Gunner said. "If they're entitled to that money, they'll pay off part of the Kalahari (tax district). The school district wouldn't object to that -- we have no qualms about them taking the opportunity to look into that."

Perkins schools is financially secure, Gunner said, but they could use surplus revenue for capital improvements.

The district has a $21 million operating budget.

"Sure, we need it," Gunner said. "Every school district needs money. But are we in a financial crisis? No."