By Chase Kamp
The councils for the cities of Casa Grande and Apache Junction each ratified a lawsuit against Pinal County, as well as County Treasurer Dodie Doolittle, to collect tax increment financing (TIF) funds that have been withheld since October 2010.
This lawsuit, filed jointly on behalf of the two cities on June 19, 2012, said TIF payments were distributed by the County for 12 years before being abruptly halted. The suit aims to collect the missing past payments and ensure payments will be made in the future.
Between 1996 and 1998, the County authorized the creation of “redevelopment areas,” zones where cities could make plans to improve dilapidated, deteriorated or unsafe buildings and infrastructure. The goal of the program was to encourage economic growth and eliminate substandard buildings.
These redevelopment plans were funded by using tax increment financing. At the onset of improvement, a tax levy is placed on the property, establishing its tax levy base year. As the property is improved, its assessed valuation goes up.
Upon completion of the property’s development, the difference between property taxes collected before and after the redevelopment is given to the municipalities to pay for part or all of the improvements.
Casa Grande established two redevelopment plans: the High School redevelopment area in 1996 and the Central City redevelopment area in 1998. Apache Junction established the Crossroad redevelopment area in 1998.
Both cities collected TIF funds for the projects until October 28, 2010. According to the cities’ complaint, “the County, through its attorney, advised the cities that the treasurer would withhold all TIF funds in a separate interest-bearing account and not distribute the funds to the cities.”
“Despite efforts on behalf of the City over the past 18 months to resolve these efforts short of litigation, the County has indicated that it will not make any further payments unless a Court requires them to,” said the Casa Grande City Council’s ratification notice.
County Attorney spokesman Kostas Kalatzidis said his office is reviewing the suit and declined to comment further.
The cities were required to publicly ratify the lawsuit, pursuant to requirements made in the Johnson v. Tempe Elementary School Board District No. 3 Governing Board appeal case in 2000.
Apache Junction ratified the suit at its regular council meeting on July 3 and Casa Grande ratified it at its July 2 meeting.