MONTGOMERY COUNTY
ECONOMIC DEVELOPMENT/
GOVERNMENT EQUITY
(ED/GE) HANDBOOK
2011-2019
TABLE OF CONTENTS
The ED/GE Program
2
The Economic Development Fund
3
The Government Equity Fund
4
Settle-Up Provision
5
Funding Cycles
6
Funding Process
6
Award of Grant
6
Implementation and Completion
Requirements
7
ED/GE Advisory Committee
7
Administration of the Program
7
Contact Information
7
Appendix
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THE ED/GE PROGRAM
The ED/GE Program, which began in 1992 and has recently been renewed for another nine
years (2011-2019), was created to spur economic growth, as well as create regional
cooperation between its jurisdictions. This is accomplished with two separate, but
interrelated, funds – the Economic Development Fund (ED Fund), which enables
participating jurisdictions to apply for grants each year (amount available to be determined
by the Board of County Commissioners each year) and the Government Equity Fund (GE
Fund), which provides each participating jurisdiction with the opportunity to profit from
economic growth in the County, regardless of where the growth occurs.
THE ECONOMIC DEVELOPMENT FUND
(the “ED” of ED/GE)
The overall purpose of the Economic Development Fund is to assist townships, villages and
cities in promoting economic health and in taking advantage of economic opportunities for
their citizens. Specifically, the Economic Development Fund will use its resources to
establish or expand commercial, industrial and research facilities and create and preserve
job and employment opportunities.
The Economic Development Fund enables communities to fill funding gaps and take
advantage of strategic economic opportunities. In fact, 5% of the Economic Development
Fund resources is specifically reserved for responding to unexpected economic
opportunities or threats that occur between funding cycles of the program (Opportunity
Reserve Fund).
Two million dollars ($2,000,000) will be made available for the Economic Development
Fund from sales tax revenues for the year 2011. In the remaining eight years of funding
(2012-2019), the allocation will be determined annually by the Board of County
Commissioners. These resources can be used to support a broad range of economic
activities. The Fund will primarily support public infrastructure improvements critical to
particular economic development projects. However, the Fund will also support other
legally-allowable activities that foster economic development.
Policy criteria and guidelines focus priority on projects that:
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Create new jobs in existing local companies or retains existing local jobs
Meet or support Strategic Economic Development Investment goals
Encourage infill growth in areas already served by basic public infrastructure
Invest in “high growth” industries and markets
Are a joint effort between two participating jurisdictions
Limit speculative development
Discourage interjurisdictional relocation
Leverage private, non-profit and/or other government monies
Are ready to be implemented.
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Eligibility to participate in the Economic Development Fund is limited to political
subdivisions that choose to be partners and are a party to the nine-year ED/GE Agreement.
In conclusion, the Economic Development Fund will:
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Provide resources to local governments to respond to changing economic opportunities and
conditions
Nurture intergovernmental cooperation
Allow for systematic development of communities
Leverage other resources to create and retain employment
Further enhance the local area’s ability to compete successfully in a global economic
marketplace.
It will primarily assist innovative, entrepreneurial economic development projects that are
ready to be implemented, but will also address unexpected – the 5% -- economic
development opportunities (Opportunity Reserve Fund).
THE GOVERNMENT EQUITY FUND
(the “GE” of ED/GE)
The overall purpose of the Government Equity Fund is to share some of the economic
benefits (i.e., increased revenue) resulting from new economic development among the
jurisdictions of Montgomery County. Specifically, the goal of the Government Equity Fund
is to:
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Foster productive interlocal competition in pursuing economic development opportunities
Strengthen the fiscal capacity of local governments to promote regional economic growth
Share the costs and benefits of economic growth to promote economic health in all communities
Promote reasonable and environmentally sound development practices.
Participating townships, villages and cities in Montgomery County will make annual
contributions into the Government Equity Fund based on a single countywide growth
contribution formula and receive annual distributions resulting from a distribution formula
which is based on population. In general, the difference between the contribution and
distribution formulas will result in net distributions for declining, stable or slow growth
jurisdictions and net contributions for fast growth jurisdictions.
The growth contribution formula for calculating the annual contributions to the
Government Equity Fund for individual participating jurisdictions is calculated in two
steps:
First, a single countywide growth contribution rate is calculated:
Growth Contribution Rate
1/3 of Growth in Property & Income Taxes
for Participating Jurisdictions Over Base Year
Increase in Assessed Valuation for
Participating Jurisdictions Over Base Year
=
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The single countywide growth contribution rate includes the growth in property and
income tax revenues as both are affected by development in individual jurisdictions.
Because each jurisdiction’s access to and use of property and income taxes varies, neither
tax source can be used alone in the growth contribution rate. The growth contribution rate
calculation only includes the growth in revenues for participating jurisdictions; it does not
include the growth in revenues for school districts or the county government’s share of
property taxes.
Only one-third (1/3) of the growth in property and income taxes over the base year will be
included in the growth contribution rate; none of the development prior to the base year is
included in the growth contribution formula. One-third (1/3) was selected as a level that is
low enough to permit the delivery of key jurisdiction services, but high enough to
distribute the benefits of development.
For the contribution and distribution formulas, the base year is 2007. After the third year,
the base year will advance one year annually. An individual jurisdictions’ contribution will,
therefore, be based on its growth experience over the prior three years. Both the growth
contribution and distribution formulas will use independent, verifiable and annually
updated data.
Second, the contribution for each jurisdiction is calculated:
Individual
Jurisdiction
Contribution
=
Growth Rate
Contribution
Rate
x the Sum of:
100% of Increase in Commercial
& Industrial Property Assessed
Valuation Over the Base Year
+
25% of the Increase in Residential
Property Assessed Valuation Over
the Base Year
+
50% of the Increase in Property
Tax Revenues Over the Base Year
+
50% of the Increase in Income Tax
Revenues Over the Base Year
Growth in residential assessed valuation is adjusted to 25% since although residential
property represents a development investment in a community, it is not as directly tied to
economic growth as is commercial and industrial development. Increases in property and
income tax revenues are included in the Growth Contribution formula since they also
reflect the impact of economic development, along with the increases in assessed valuation.
The distribution formula for calculating the annual distribution from the Government
Equity Fund for individual participating jurisdictions is:
Individual
Jurisdiction
Distribution
=
Government
Equity
Fund
x
4
Jurisdiction Population
Total Population of
Participating Jurisdictions
In essence, the distribution formula also establishes a uniform rate for calculating
distributions based on dividing the total of individual jurisdiction contributions over the
base year by the overall population of the jurisdictions. The distribution to individual
jurisdictions is calculated by multiplying the uniform rate by the population of each
jurisdiction. Population is a distribution method already used in a number of distribution
formulas familiar to Ohio local governments (i.e., Local Government Revenue Assistance
Fund).
A number of protections and safeguards are built into the process and the formulas to
preclude contributions that are unduly burdensome and to provide jurisdictions with
information critical to their internal planning processes. They include:
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Contribution and distribution calculations for individual jurisdictions will be calculated before
the fiscal year begins so that jurisdictions will have this information in advance of preparing
annual budgets. Jurisdictions will be notified of net contributions due or net distributions
expected in mid-September. Contributions and distributions will be made in April to allow time
for initial collection of property and income taxes for the fiscal year (other legally allowable
revenue sources may be used to meet the contribution obligation). Payment of sum obligation
is due and payable by April 15 of each year. Net distributions will be distributed by the County
on or before April 30 of each year.
The contribution (prior to the distribution) for individual jurisdictions will not be greater than
13% of their growth in property and income tax revenues from the base year to the comparison
year. Net contributions will be less than 13% of the growth in property and income tax
revenues since every jurisdiction will receive a distribution based on their population. If there
has been a decline in both property and income tax revenues from the base year to the
comparison year, the jurisdiction contributes nothing.
All contributions will be distributed in the same year as they are collected and can be used by
jurisdictions for any purposes.
Growth in revenues (property and income tax) due to millage and rate increases between the
base year to the comparison year will be factored out.
Individual jurisdictions that experience fiscal problems beyond their control will be considered
for late contribution payments to the Government Equity Fund.
SETTLE-UP PROVISION
The ED/GE Program provides for a settle-up provision every three years, by which the
Government Equity (GE) Fund contribution amounts of each member jurisdiction are
compared to the dollar amounts each received through the Economic Development (ED)
Fund. If the member jurisdictions’ contributions to the GE Fund exceeded the amounts it
received from the ED Fund, the jurisdiction is entitled to an allocation in the amount of
such excess from the ED Fund balance. This allocation may be used by the jurisdiction at
its discretion. The jurisdiction may also opt to apply the excess amount to an economic
development project from the next distribution of the ED Fund, so long as the project
qualifies for funding under the guidelines and criteria established by the ED/GE Advisory
Committee.
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FUNDING CYCLES
There are two funding cycles per year. Application packets are mailed to participating
jurisdictions on January 31 (or the last working day of January) for the Spring cycle and
August 31 (or the last working day of August) for the Fall cycle
Applications are due in the Community and Economic Development Office by 5:00 p.m. on
April 1 (or the first working day of April) for the Spring cycle and November 1 (or the first
working day of November) for the Fall cycle. Funding notification is usually accomplished
within six weeks of the deadline.
The balance of funds remaining from the Spring cycle will be available for the Fall cycle.
FUNDING PROCESS
Summaries and a staff evaluation are completed on each project application and
distributed to the ED/GE Advisory Committee for review.
The ED/GE Advisory Committee tours each of the project sites by bus and applying
jurisdictions are given the opportunity to make a short presentation on the bus.
ED/GE Advisory Committee members rank the projects and meet to discuss and make
funding recommendations to the County Commissioners
Jurisdictions are notified by letter of the Advisory Committee’s recommendations and
advised when the County Commissioners will be taking action on the recommendations.
The County Commissioners act on the Advisory Committee’s recommendations by
resolution. Jurisdictions are sent a copy of the certified resolution approving the
recommendations (the date of this resolution is the “award date”).
Once notified of approval, the jurisdiction must provide a current work program and
budget for the project to County Economic Development staff. A resolution and contract
will be prepared for approval by the County Prosecutor. Once approved, it will be
submitted to the jurisdiction for signature and then to the County Commissioners for
passage. A certified copy of the resolution and contract will be sent to the jurisdiction upon
passage (the date of this resolution is “the contract date”).
AWARD OF GRANT
Any ED/GE grant given to a member jurisdiction will be awarded as follows: (1) Seventyfive percent (75%) of the grant amount will be reimbursed to the jurisdiction on an invoice
basis; (2) Twenty-five percent (25%) of the grant amount will be reimbursed to the
jurisdiction at anytime during a three (3) year period commencing with the full execution
of the agreement (the contract date) that the recipient/business of the grant funds attains
thirty-three percent (33%) of the total pledged jobs.
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IMPLEMENTATION AND COMPLETION REQUIREMENTS
Projects must be under contract and under construction within six months (three months
for Opportunity Reserve projects) of the award date or the applicant must apply to the
Advisory Committee for re-authorization of funding.
Projects must be completed within 24 months of the date of the award date.
ED/GE ADVISORY COMMITTEE
The ED/GE Advisory Committee consists of 15 members: 2 County Commissioners, 1
representative each from the Cities of Kettering and Dayton, 3 private sector
representatives and the remainder from the participating jurisdictions on a rotating basis
of two or three-year terms.
The Committee is responsible for reviewing all individual project applications and
measuring those requests against established ED/GE criteria and guidelines. From year to
year, the Committee may also recommend additions and/or deletions to the criteria and
guidelines (Appendix A).
ADMINISTRATION OF THE PROGRAM
Members of the Montgomery County Department of Community and Economic
Development staff will administer the ED/GE Program. The Department has been
designated as the County Office of Economic Development under Ohio Legislature
legislation (HB 173, effective October 30, 1989). In addition, the Montgomery County
Office of Management and Budget will be responsible for the implementation of the
Government Equity Fund formulas.
CONTACT INFORMATION
Linda Gum, ED/GE Coordinator
Montgomery County Department of Community & Economic Development
451 W. Third St., 10th Floor
Dayton, OH 45422
guml@mcohio.org
937.225.5711 (office)
937.225.6036 (fax)
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