Boone County Tax Increment Financing Districts

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Overview

Four Redevelopment Commissions have created ten TIF Districts in Boone County.

A. The Boone County Redevelopment Commission was established by the Boone County Board of Commissioners and provides oversight for the following five TIF Districts: (1) 96th Street Economic Development Area (Zionsville), (2) I-65 Corridor East Economic Development Area No .1 (Anson in Whitestown), (3) I-65 Corridor East Economic Development Area No. 2 (Anson in Whitestown), (4) I-65 Corridor West Economic Development Area (for road improvements to 650 S between I-65 and 267), (5) Allocation Area No. 2 - Medco (for the Medco facility in Anson).

B. The Lebanon Redevelopment Commission was established by the Lebanon City Council and provides oversight for the Lebanon Business Park/Lebanon Downtown TIF District.

C. The Whitestown Redevelopment Commission was established by the Whitestown Town Council and provides oversight for the following three TIF Districts: (1) Perry Industrial Park, (2) Whitestown Crossing, (3) Maple Grove Project.

D. The Zionsville Economic Redevelopment Commission was established by the Zionsville Town Council and provides oversight for the 106th Street/Downtown/Main Street TIF District.

TIF Debt Instruments

Seventeen outstanding debt instruments (primarily bonds and lease rentals) were issued in Boone County before 2012 that have TIF District revenues as the primary source of repayment. It is interesting to note that the incurred TIF debt is not subject to the issuer’s debt limit. Listed next are these debt instruments, the total 2013 repayments for each debt instrument, and the primary and secondary sources of repayment for each debt instrument. The source of this data is the Report Builder from the Indiana Gateway for Government Units at https://gateway.ifionline.org/report_builder/: click on “Bond/Lease” under “Debt,” make the indicated “Selections,” and click on “View Report” (NOTE: TIF bonds include a “Code Cite” showing 36-7-14 and/or 36-7-25 and “TIF Revenue” will be shown as “Primary” under “Security on the Debt - Source of Repayment”).

A. Boone County Redevelopment Commission ($7,837,576 total repayments in 2013).
1. Boone County Redevelopment Commission Redevelopment District Bonds of 2007 (Reamortized and Extended) – $120,448 total repayments in 2013 – I-65 Corridor West and East TIFs are the primary sources of repayment.
2. Redevelopment District Tax Increment Revenue Refunding Bonds, Series 2004 (Fixed Portion) – $150,138 total repayments in 2013 – 96th Street TIF is the primary source of repayment and property tax outside the TIF is the secondary source.
3. Tax Increment Revenue Bonds of 2006, Series A – $547,950 total repayments in 2013 – I-65 Corridor East No. 2 TIF is the primary source of repayment and Duke Realty is the secondary source.
4. Tax Increment Revenue Bonds of 2005, Series B – $633,168 total repayments in 2013 – I-65 Corridor East No. 1 and No. 2 TIFs are the primary sources of repayment and Duke Realty is the secondary source.
5. Tax Increment Revenue Bonds of 2004, Series A – $719,416 total repayments in 2013 – I-65 Corridor East No. 1 and No. 2 TIFs are the primary sources of repayment and Duke Realty is the secondary source.
6. Redevelopment District Tax Increment Revenue Capital Appreciation Bonds of 2008 – $225,000 total repayments in 2013 – I-65 Corridor East No. 2 (Medco) TIF is the primary source of repayment.
7. Bond Anticipation Notes of 2010 – $5,441,456 total repayments in 2013 – I-65 Corridor East No. 2 TIF is the primary source of repayment and Duke Realty is the secondary source.

B. Lebanon Redevelopment Commission ($495,700 total repayments in 2013).
8. Economic Development Tax Increment Revenue Bonds, Series 2010 (DA Lubricant Project) – $79,000 total repayments in 2013 – DA Lubricant Economic Development Allocation Area is the primary source of repayment.
9. Economic Development Revenue Bonds, Series 2011 (Skjodt-Barrett Project) – $59,700 total repayments in 2013 – Lebanon Business Park Building #11 Allocation Area is the primary source of repayment.
10. Taxable Economic Development Revenue Bonds, Series 2011 (Lebanon FiberNet Project) – $47,000 total repayments in 2013 – Lebanon FiberNet, Lebanon Downtown, and Lebanon Business Park Allocation Areas are the primary sources of repayment.
11. Economic Development Lease Rental Bonds of 2011 (new fire station at Lasley Drive near I-65) – $310,000 total repayments in 2013 – Lebanon Business Park Development Area is the primary source of repayment and property tax outside the TIF District is the secondary source.

C. Whitestown Redevelopment Commission ($874,126 total repayments in 2013).
12. Economic Development Tax Increment Revenue Bonds Series 2010A – $754,126 total repayments in 2013 – Perry Industrial Park and Whitestown Crossing TIFs are the primary sources of repayment and the developer is the secondary source.
13. Taxable Jr. Economic Development Tax Increment Revenue Bonds, Series 2010 B – $120,000 total repayments in 2013 – Perry Industrial Park and Whitestown Crossing TIFs are the primary sources of repayment and the developer is the secondary source.
14. Taxable Jr. Economic Development Tax Increment Revenue Bonds, Series 2010 C – first repayment not due until 2016 – Perry Industrial Park and Whitestown Crossing TIFs are the primary sources of repayment and the developer is the secondary source.
15. Economic Development Revenue Bonds, Series 2011 (Maple Grove Project) – no repayments due in 2013 - Maple Grove Project TIF is the primary source of repayment and the developer is the secondary source.

D. Zionsville Economic Redevelopment Commission ($548,365 total repayments in 2013).
16. Sewage Works Revenue Bonds of 2010 (SRF) – $87,865 total repayments in 2013 – Zionsville Economic Development Area is the primary source of repayment and wastewater revenues are the secondary source.
17. Economic Development Lease Rental Bonds of 2008 – $460,500 total repayments in 2013 – Zionsville Economic Development Area and County Option Income Tax are the co-primary sources of repayment and a special benefits property tax is the secondary source.

Tax Increment Replacement Property Tax Rates

Starting with the Pay 2002 property tax year, the history of imposing Tax Increment Replacement property tax rates in Boone County includes the following: none in Pay 2002, $0.0003 in Zionsville for Pay 2003, $0.0014 throughout Boone County (except for $0.0009 in Zionsville) for Pay 2004, $0.0012 in Zionsville for Pay 2005, $0.0023 in Zionsville for Pay 2006 (proposed), $0.0037 in Zionsville for Pay 2007, $0.0050 in Zionsville for Pay 2008, $0.0066 in Zionsville for Pay 2009, none in Pay 2010, none in Pay 2011, none in Pay 2012.

This Boone County Tax Increment Replacement property tax rate history raises the question: Why was there a Tax Increment Replacement property tax rate throughout all Boone County in Pay 2004, but was in place only in Zionsville for the Pay 2003, Pay 2005, Pay 2006, Pay 2007, Pay 2008, and Pay 2009 property tax years? Tom Lingafelter (Boone County Redevelopment Commission President) consulted with Brian Colton (H. J. Umbaugh and Associates Client Service Leader) to provide the information listed next.

(1) For the Boone County RDC, only the 96th Street TIF Area bonds have a property tax back up – the Pay 2004 county-wide Tax Increment Replacement property tax rate was imposed because the 96th Street TIF Area development had not occurred as quickly as anticipated – the original 96th Street TIF Area bonds were restructured in 2004 and subsequent 96th Street TIF Area development increased TIF revenues to provide more security for the bonds – the county-wide Tax Increment Replacement property tax rate has not been needed since Pay 2004 because the 96th Street TIF revenues have been deemed sufficient.

(2) Bond repayments for bonds issued by redevelopment commissions are NOT all supported by TIF revenues.

(3) The Zionsville Economic Redevelopment Commission bonds for the Zionsville Main Street TIF Area were issued as property tax bonds and TIF revenues are not pledged to these bonds – the property tax revenue is now sufficient to make the debt payments on these bonds.

(4) The decision has been made to not impose a county-wide Tax Increment Replacement property tax levy to supplement the TIF revenues from the Boone County RDC I-65 (Anson) TIF Areas – the I-65 (Anson) TIF bonds are also backed by Duke Realty, the developer for the Anson project.

It has not been clearly explained why, in addition to Pay 2004, Zionsville taxpayers had a Tax Increment Replacement property tax rate imposed for the Pay 2003 and Pay 2005-09 property tax years. A complicating factor cited in the TIF revenues shortfall was state changes to the funding of school general funds that resulted in a lowering of property tax rates, causing a decrease in TIF revenues.

Taxpayer Friendly TIF Bond Issues

It is apparent that careful attention has to be paid to bond issues supporting development in TIF areas so as to avoid the imposition of Tax Increment Replacement property taxes. The $13.6 million bond issue approved on November 13, 2012, for Anson’s I-65 Corridor East Economic Development Area No. 2 by the new Boone County Economic Development Commission is a good example of how TIF bond issues can be structured to avoid having Boone County taxpayers responsible for the repayment of any portion of a bond issue. 

The Boone County Council Ordinance No. 2012-03 rough draft states that the bond “complies with the purposes and provisions” of Indiana Code 36‑7‑12. Indiana Code 36-7-12-25(b) reads “The ordinance may also authorize the issuance of bonds payable solely from revenues and receipts derived from the financing agreement or from payments made under a guaranty agreement by developers, users, or related persons. The bonds are not in any respect a general obligation of the unit, nor are they payable in any manner from revenues raised by taxation.”

The Boone County Council Ordinance No. 2012-03 rough draft also states “The Bonds shall never constitute a general obligation of, an indebtedness of, or a charge against the general credit of the County as described in the Indenture.”

The Financing and Covenant Agreement rough draft between Duke Realty Limited Partnership and Boone County provides that Duke as both the “User” and “Purchaser” acknowledges and agrees that the obligation to pay the bonds is limited to 90% of the available tax increment generated in the I-65 Corridor East Economic Development Allocation Area, and that Duke “shall bear the risk of nonpayment” of the bonds.

The Bond Purchase Agreement rough draft between Boone County and Duke Realty Limited Partnership provides that Duke “has investigated the security for the Bonds, including the availability of TIF Revenues to its satisfaction, and it understands that the Bonds are payable solely from TIF Revenues.” It is further provided that Duke “understands that neither (Boone County) nor the Redevelopment Commission have the power or the authority to levy a tax to pay the principal of or interest on the Bonds.”

The Trust Indenture rough draft between Boone County and the Bank of New York Mellon Trust Company provides that the bond issue is “payable solely and only out of TIF Revenues” and bond proceeds. It is further provided that the neither Boone County nor the Redevelopment Commission “have the power or the authority to levy a tax to pay the principal of or interest on” the bond issue.

It is abundantly apparent that (1) this $13.6 million bond issue will be payable solely from TIF revenues, (2) Duke Realty Limited Partnership will bear the risk of nonpayment of the bonds, and (3) Boone County taxpayers will NOT have ultimate responsibility for the repayment of any portion of this proposed bond issue. Therefore, this bond issue is Taxpayer Friendly and is a good example of how TIF bond issues can be structured to avoid having Boone County taxpayers responsible for the repayment of any portion of a bond issue. 

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This page was last updated on 11/20/13 .