A taxation issue is highlighting the power of the Tooele County School Board — not to make educational policy but to affect economic development.

On Tuesday, the board called a special meeting to discuss the district’s role in two new community development agencies proposed by the county. Tooele County Economic Development Director Nicole Cline, along with Tooele County Commission Chair Colleen Johnson and Craig Smith, an attorney working for the county, presented a plan to the school board for the creation of the two CDAs, one near the Deseret Peak Complex and the other at the north end of Stansbury Park.

CDAs are similar to a Redevelopment Agency. When a CDA is formed, the taxes paid to each taxing entity within it are frozen at a set level. Any increase in property taxes after the CDA is formed — called tax increment money — goes to the CDA. The governing board of the CDA, which in this case will be the county commissioners, determine how the money will be spent.

The purpose of forming the CDA is to use tax increment money to build infrastructure needed for commercial development, and for incentives such as tax rebates to attract new businesses. CDAs are created for a specific time span, after which the CDA goes out of existence and taxes collected from the former CDA area are distributed directly to the taxing entities according to current tax rates.

However, in order to create CDAs, the county needs to enter into an agreement with each of the taxing entities within the area. And that’s where the school board can make or break this particular plan, since it collects 60 to 80 percent of tax revenues on the property in question.

The first CDA proposal presented to the school board was for the Deseret Peak Commercial Development Project on property currently owned primarily by Larry H. Miller, east of Sheep Lane and the Deseret Peak Complex. That property currently generates $50,570 in property tax with about $42,000 going to the school district.

Reckitt Benckiser, a United Kingdom-based firm that manufactures household products like Lysol, Woolite and Spray & Wash, has been eyeing the property for a distribution and repackaging plant. The venture has been known to economic development planners by the code name “Project Flash,” assigned by the Economic Development Corporation of Utah. The company has narrowed down its site selection to Tooele or Reno, Nev., according to Cline.

If the school board approves the CDA plan, the school district will continue to receive the $42,000 a year, plus an additional $70,000 a year for 15 years — a payment that would be fixed regardless of the property’s market value. After this 15-year period is up, the district would receive its full portion of taxes on the property, estimated by the county to be $340,000 annually.

At Tuesday night’s meeting, board members were clearly grappling with a decision that pitted immediate funds for growing schools versus economic development, which could enrich the district more in the long run.

“What happens if we don’t approve this plan?” asked school board member Jeff Hogan.

“We call Project Flash and tell them to go to Reno,” said Smith.

The second CDA proposed is for North Stansbury, on vacant property west of SR-36 and south of the intersection with SR-138. The Woodbury Corporation, a developer that specializes in retail projects, is interested in putting in a retail complex anchored by a major grocery store.

Currently that property produces $23,792 in property taxes, of which $16,483 goes to the school district. The first year of the 15-year CDA agreement calls for the school district to receive $16,000, which gradually increases over 15 years to $156,000 by the last year of the agreement.

“The financial projections are not guaranteed. They are very speculative,” said Cline.

After hearing the presentations at the meeting Tuesday, the school board went into a closed-door executive session to discuss the proposals, and adjourned without making any final decision.

When it was brought to the attention of Gary Gowans, Tooele County School Board president, that discussion of the CDA and the agreement with the county may not be a valid reason to close a meeting under Utah’s open meeting laws, Gowans promised to seek the advice of the board’s attorney.

The proposals have been placed on the board’s agenda for next Tuesday, Oct. 21.

“it is a weighty decision,” said Gowans. “We realize that the financial future of our schools as well as the county relies on growth in our commercial tax base. However, with the need to finance the growth of our schools the length of time we can we go without collecting our full amount of taxes is a difficult question.”

The last time the county approached the school board for the approval of an economic development project was two years ago for Allegheny Technologies, a $450 million venture at Rowley. The school board approved the county’s plan at that time, Cline said.

“The county views the school district as a partner in economic development,” Cline said. “Without the work they do to educate students and prepare a workforce, we don’t have much to offer companies that want to locate within the county.”

“When you run for school board you don’t realize that you will be called on to make economic decisions that affect the entire county,” Gowans said.

Four of the seven seats on the school board are up for election this fall. Three incumbents — Gary Gowans, Julia Holt, and Beth Dale — are running unopposed. The fourth seat was vacated earlier this year by the resignation of Debbie Chapman, who stepped down to return to teaching. The school board filled the position with the interim appointment of David Gillette. Matt Robinson and Scott Bryan are both seeking to fill that position in this November’s general election.

Tim Gillie: tgillie@tooeletranscript.com