Centerburg corp limit sign

Centerburg village and Hilliar Township are at an impasse over a proposed annexation on the south side of the village. The type of annexation determines who gets property tax revenues. Jeff Gottke of the Area Development Foundation is working with both sides to reach a solution.

CENTERBURG — Growth and development often stirs controversy between townships and municipalities. Such a scenario is playing out in southwestern Knox County.

A proposed annexation has brought the Village of Centerburg and Hilliar Township to an impasse as each one fights to protect their residents and retain revenue.

“There are three separate parcels we have received a verbal request to annex. We have nothing in writing other than verbal,” said Centerburg Mayor Greg Sands.

According to Sands, the parcels are owned by Whistlestop Properties, William Saunders, and Knox Community Hospital. KCH bought its five acres from Saunders.

Hilliar Township Trustee Gary Ross said five properties are involved: Whistlestop Properties, Saunders, and three homeowners.

What type of annexation the property owners are requesting is unclear. Sands said it is a Type 1 annexation; Ross said it is a regular annexation. Jeffry Harris of Bricker & Eckler, counsel for Whistlestop Properties, declined to comment at this time.

The type of annexation is significant because it determines who gets the tax revenue. Under a Type 1 and Type 2 annexation, property taxes would go to the township and income taxes would go to the village. Under a regular annexation, both property and income tax revenue goes to the village. However, the village must compensate the township, usually over a 12-year period, for the loss of tax revenue.

“A Type 2 annexation, that's what we want,” said Ross. “That was the original suggestion, and they [the village] told us no. The reason we are wanting the village to work with us instead of annexing all of our property is it takes money out of our township.”

To protect the township's interests, the Hillier Township trustees met in emergency session on Aug. 10 and created a TIF (Tax Increment Financing) district. Its formal name is the Columbus Road Corridor 1 TIF (CRC1 TIF).

Under the TIF, the township continues to receive the property tax revenue, but the revenue is split: 25% will go into the township's general fund, and 75% will go into a special TIF fund. Money in the TIF fund is dedicated to paying for improvements, such as sewer and water, within the district.

The CRC1 TIF covers seven parcels:

  • 17-00368.000
  • 17-00497.001
  • 17-00497.002
  • 17-00571.000
  • 17-00571.001
  • 17-00609.000
  • 17-00411.000

The township did not include the parcel owned by Knox Community Hospital in the TIF.

“We didn't want to stop anything so that they could go ahead with their project,” explained Ross.

“That's where this whole thing went to a different position,” said Sands of the TIF. “It puts us back to the drawing table with all parties involved. The parties involved 100% agree with the village annexing the properties.

“We have been trying to spearhead things to make all this happen from the very beginning,” he continued. “From the time I took office, we've been doing all we could to make this happen. In that process, all people involved had a chance to comment. We were pretty much in a good position until this TIF thing happened.”

“The TIF is a bargaining chip so we can still get some of our tax money,” said Ross. “It just protects our people and protects the township.”

Property being annexed into the village must be contiguous to property already in the village. The hospital parcel is not contiguous. Until the village, township, and property owners resolve the annexation issue, no development can take place because the properties need sewer or septic.

Attorney Kim Rose of Critchfield, Critchfield & Johnston, who is assisting the hospital, declined to comment on the hospital's specific plans but did say the hospital wants to expand its services to the Centerburg area.

“The hospital is committed to the Centerburg community and believes its facility will be a significant benefit to the residents of the area,” he said. “They need a septic or sewer system for growth. They are willing to work with local officials and hope to reach an equitable solution to the problem. We have been and continue to be available for productive and forward-looking discussions with all interested parties.”

Sands and Ross both referenced a commitment to the community in expressing their desire to sit down and talk. They also favored the involvement of Jeff Gottke, president of the Knox County Area Development Foundation.

Although a meeting between village and township representatives is not yet scheduled, Gottke is in ongoing discussions with both sides to “determine their needs and reach a collaborative solution.”

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