Some residents may have tax breaks coming

CELINA - Hundreds of residents who received permits to make improvements to their homes over the last 10 years may be eligible for tax abatements now that city administrators have changed their interpretation of the Community Reinvestment Act.

In addition to the revised interpretation, city councilors recently learned residents who applied for permits with the engineering department the last several years may not have received applications for residential tax abatements.

Taking this into account, city officials have begun contacting those issued permits since 2014 to let them know they may be eligible for a tax abatement. During the timeframe in question, permits were issued for 91 residential additions, 218 residential accessory structures such as garages and 45 pools, according to mayor Jeff Hazel.

The length of the tax abatement to be granted depends on when the home improvement was made, meaning the older the project, the less the number of years of abatement.

"If you built something last year and you paid a year (of taxes), you still have nine years left to get that abatement," Hazel explained.

Hazel didn't have an estimate on the potential savings to property owners or hit to Celina City Schools, which reaps about 75% of property tax revenue.

"Because this isn't new construction, it's not going to be near what it would be if I had 218 new houses built," he told the newspaper. "We believe it will not be significant to the schools."

The city in 1981 enacted a CRA to encourage job growth and home improvements. Among other provisions, it allows 10-year tax abatements on the remodeling of dwellings containing no more than two family units upon which the improvements cost at least $2,500.

Over the last month or so, city councilors have had exchanges with a resident who claimed he was denied a tax abatement on an addition to his home.

The addition, in city law director George Moore's initial opinion, did not meet Ohio Revised Code's definition of "remodeling," which is "any change made in a structure for the purpose of making it structurally more sound, more habitable or for the purpose of improving its appearance."

"It would not include any additional room that would be put on. That would be not 'in,' that would be 'in addition to,'" Moore said at an April 8 commitee meeting.

A general discussion about the city's CRA between city and school officials around 2017 prompted Moore to review the city and state laws and come to an interpretation that additions don't meet the ORC definition of "remodeling."

However, the recent semantic debate drove Moore to reach out to other municipalities to see how they handle remodeling under CRA. He also sought the opinions of members of Ohio Municipal Attorneys Association.

"The legal opinions go both ways on the matter … but most say that the spirit of the CRA is to give tax abatements," Moore told the newspaper.

Moore also expounded on his research at this week's regular council meeting.

"I think what these folks are saying here is there is a lot of leeway and interpretation not only in how the ORC and the legislation locally passed can be … but also in what you want it to say," he told councilors.

Hazel agreed.

"I think collectively we believe that it's appropriate to go back through, even retroactively, the people that had an improvement such as an in-ground pool, for instance, that we do have that ability to retroactively go back to approve that at this point," Hazel said.

Councilors appeared to support the idea.

"If that's what we should have been doing and that's what we feel like if it was interpreted wrong, let's go back and make it right," councilman Thomas Sanford said.

"I agree. We need to make this right," Hazel replied.

However, Hazel stressed that the final authority on tax abatements rests with the Mercer County Auditor's Office.

"The county auditor determines if it increases the value of that property. If the county auditor determines it does not increase the value of that property, then they don't get a tax abatement," Hazel said. "It's only the taxes that would be on that added values above what they're currently paying."

After conferring with the Mercer County Auditor's Office on Wednesday, Hazel said he learned outbuildings or garages, additions and in-ground pools would improve property value and be eligible for a tax abatement.

Above-ground pools and fences, though, would not qualify.