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Council approves TIF districts, energy deregulation agreement

Bellefontaine City Council on Tuesday gave preliminary approval to two complicated measures: The creation of two tax increment financing districts and an electric deregulation agreement.

The two TIF districts would not create new taxes for city residents, but would position the city to reap economic development benefits for commercial growth in two sections of the city, finance committee chairman Mark Fissel said.

The first zone includes Main Street from the northern corporation limit south to Lake Avenue, and the second includes eastern portions of incorporated areas of the city such as Sloan Boulevard and basically farmland north to State Route 47 and south to U.S. Route 33.

The creation of the two TIF districts would allow the city to build up funds for particular projects based on increased property values in the zone over the 2012 property tax rates, but would not affect general taxpayers, Mr. Fissel said.

It mirrors two similar districts created at the end of 2011 along south Main Street and the western edge of the city and, despite not being on the agenda prior to the meeting, was passed on first reading to push the measure through before the end of the year.

“The two we did last year were working out so well we wanted to do these,” Mr. Fissel said. “If we get them in before year end, they will be based on property taxes from 2012.”

The creation of the TIF districts has already been approved by both the Bellefontaine and Benjamin Logan school districts.

The other issue was an affinity agreement with DPL Energy, which is a sister company of Dayton Power and Light, to provide energy savings offers to city residents.

DPL Energy is a retail energy supplier while DP&L is the distribution arm of the company, Robyn Livesay of DPL Energy said.

The DPL Energy agreement offers customers within the city of Bellefontaine rates of 6.25 cents per kilowatt hour if they sign a two-year agreement to stay with the company or else face a $75 early termination fee. Without the agreement, DPL Energy offers customers a rate of 6.5 cents per kilowatt hour, she said.

Other companies such as First Energy Solutions, a sister company of the electric company First Energy, also offer similar deals in the area for signing contracts.

Residents who do not sign up with a service will pay a fluctuating rate that is currently in the neighborhood of 9 to 10 cents per kilowatt hour, Ms. Livesay said.

Customers will still pay DP&L a flat rate for the distribution of energy and be able to count on DP&L to fix distribution problems such as downed power lines or blown transformers.

Energy retailers like DPL Energy are able to make money by buying electric energy as a commodity and reselling it to customers at a fixed rate while energy distribution companies like DP&L pay the current cost of available energy and pass that rate on to customers who have not signed up with an energy retail company.

One drawback, however, is that budget or level billing is not currently available.

The agreement itself is but a formal partnership between the city and the retail business, Ms. Livesay said.

“The affinity program, which we also call the community savings program, is basically an endorsement,” she said. “Together, we will send a communication out to the residents explaining the offer.”

The city has already signed up with DPL Energy for its own electric needs but negotiated a 17-month agreement to pay 5.3 cents per kilowatt-hour that is expected to save the city a considerable amount, city Service-Safety Director Jim Holycross said after the meeting.

The affinity agreement was an alternative to an aggregation program by which the city could negotiate prices for all residents, but would first require residents to vote on the measure, Mr. Holycross said. A significant difference in the agreement as opposed to the aggregation program is that city residents can choose whether to “opt in” to the offer.

“The aggregation program is much more complex and I don’t think we’re ready for that yet,” he told council. “I wasn’t trying to push this, but we do hear from a lot of citizens about people out there in the community shoving clipboards under their noses and expecting them to sign. I think this could eliminate a lot of the confusion.”

The agreement, which was in the form of a resolution, could have been passed on a single reading Tuesday evening, but utilities committee chairman Jerry Pitzer moved to pass it on first reading only so council members could have “more time to digest it.” It passed unanimously and must be reconsidered at the next meeting.

In other activity, council approved a resolution to commend its sister city of Suzuka, Japan, on its 70th anniversary and will send a delegation of Mr. Holycross and Council President David Henry to visit there for the celebration. Two routine finance issues were also passed on second reading.

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