SALEM — Negotiations regarding a cooperative economic development agreement between the city and township which would establish terms for future annexations and for a collaborative process to attract new development are ongoing.

The current draft of the agreement would have an initial term of 25 years which would automatically “be extended for successive 25-year periods unless, at least one year prior to the expiration of the then-current term, either party provides written notice of its intent not to extend [the] agreement.”

During the term of the agreement the municipalities agree to collaborate to “encourage responsible development” of property within the township “in the best interest of both township and city” and the development or redevelopment of adjacent properties “to ensure cohesive and consistent land use and development around the property.” It also specifies that they will “primarily consider the financial benefits and aesthetic value of proposed development,” and that neither municipality will attempt to solicit, negotiate, or aid in the relocation of a business from the township into the city or from the city into the township, and to notify the other municipality if it receives a request to relocate.

The agreement would also mandate any future properties annexed from the township into the city while the agreement is in effect would be filed as an expedited type one annexation and that 70% of the income tax revenue collected from property would be retained by the city, with the remaining 30% being paid to the township, which cannot collect income tax normally, as a fee. Property or estate tax revenue from the property would be split down the middle with the city and township both receiving 50%.

It also specifies that the city must “provide written notice to [the] township identifying the parcel to be annexed along with written consent to such annexation from the owner thereof” for any new annexations and that the city agrees not to “approve, proceed with, or seek judicial enforcement of any annexation of any parcels to which the owners thereof has/have not consented in writing” and that the township “will not assist, aid, encourage, induce, discuss, negotiate with respect to, or take any action in opposition” of annexations made in accordance with the agreement.

The new revisions also address the question of properties within the township with deed restrictions mandating annexation into the city to retain city water and sewer service should the property ever becomes contiguous which proved to be the main point of contention during the last joint session on July 30.

The agreement would halt the enforcement of those restrictions for the first 12 and a half years of the agreement for residential parcels in the township, and stipulates that the city will not annex or use annexed parcels as means to encourage or launch an adversarial annexation action against any person or entity owning…adjacent or contiguous real estate against the owner’s consent” without the township’s express consent. However, it also stipulates that “the parties stipulate and agree that the execution of any deed restriction or the purchase of any property containing a deed restriction requiring annexation…is considered the owner’s consent for the purposes of this agreement.”

Councilman Jake Gano reiterated his concerns from the July 30 session regarding the percentages of the proposed tax revenue split, particularly the split of income tax revenue. Gano said that he had built a model based on the average increase in the cost of safety forces as a municipality grows and found while the proposed split of 30% going to the township would be fine initially, with continued growth the city’s cost for services exceeds the revenue generated by income tax in any split where the township receives more than approximately 12% to 17%.

Board of Trustees Chair Steve Bailey said that it had been determined during the negotiations that any expansions would not require a substantial increase in staffing and therefore wouldn’t bring a substantial increase in the cost of services.

“You could go back and forth on these numbers forever, but these are the numbers we could both be comfortable with,” said Bailey.

Mayor Cyndi Baronzzi Dickey said that the split had been determined based on the advice of the city’s safety forces, noting that while it was not the intention to do so that Police Chief J.T. Panezott said that even if the entirety of the township were to be annexed into the city it would only require two more officers to cover the entire area. She also said that the structure of the agreement meant that any tax revenue payments would only occur as properties were developed and tax revenue increased and that the city always has the right to deny a petition for annexation which may be harmful.

Gano said that he was still concerned that if personnel needs are higher than projected the city may be forced to request a levy to cover the costs of the income tax revenue payments and that he felt he “cannot in good conscious go to the residents and ask for a levy.”

Councilman Jim Harrington asked if properties with deed restrictions would automatically begin annexation once the moratorium period ended and Bailey said that state law requires petitions for annexation to be filed by property owners. Harrington then asked what stopped property owners from simply refusing to file the petition once the moratorium had ended and Councilman Jeff Stockman said that the deed restriction would require the property owner to either file the petition or have their water and sewer service shut off in 90 days. Bailey also noted that this potentiality is one of the inherent flaws of deed restrictions of that nature.

It was ultimately agreed that city and township officials would negotiate potential revisions further and reconvene, and to publish the current draft of the agreement on both municipalities websites and to share it with local news outlets so that township and city residents could present any concerns they have to their elected officials for consideration as the agreement approaches a finalized form. Once the agreement reaches a state that both municipalities can agree to in principle it must be published in that form by both municipalities for thirty days prior to another joint session where a public hearing must be held in which anyone is allowed to share their opinion on the agreement before it can be formally adopted.

Following the conclusion of the joint session the members of city council agreed to schedule a meeting of the committee of the whole prior to city council’s next meeting to further discuss their concerns with the agreement amongst themselves and have any further questions answered by City Law Director Brooke Zellers.

The city council will meet next at 7 p.m. Sept. 16.