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Cooperative Economic Development
Made Easy
With JEDDs and CEDAs
July/August 2004
By:
Price D. Finley
VIEW OR PRINT ARTICLE IN PDF FORMAT
Looking for a way to facilitate cooperative economic
development efforts between your municipality and
surrounding townships and counties? A Joint Economic
Development District (JEDD) is one viable option that
you should consider. JEDDs are often used to provide for
water and sewer, fire, police and EMS, street
maintenance, trash pick-up and planning and zoning
services. JEDDs can pay for the costs of such services by
imposing an income tax on non-residential property
owners within the district.
Another less stringent
option is a Cooperative Economic Development
Agreement (CEDA). CEDAs enable municipalities,
townships, counties and private entities to cooperate in
the provision of infrastructure improvements and
public services within a defined area and to share in
paying the costs of such activities, but a CEDA cannot
impose a special income tax like a JEDD can. JEDDs and
CEDAs can also be important in helping to deal with
annexation (and providing a structure for economic
development in the absence of annexation by a
municipality) of territory in the unincorporated portion
of a township. Let’s take a more detailed look at the
requirements for and opportunities presented by JEDDs
and CEDAs.
Joint Economic Development Districts1
Overview. JEDDs are special-purpose districts that are created by
a contract between a combination of municipal
corporations and townships. JEDDs allow for the
levying of a district-wide income tax and the provision
of municipal services in unincorporated areas. Under
Ohio law, one or more municipal corporations and one
or more townships may enter into a contract to create
a JEDD for the purpose of facilitating economic
development. Except in limited circumstances, each
contracting party must be contiguous to at least one
other contracting party. In addition, the territory
included in the JEDD must meet each of the following
requirements:
The JEDD must be located within the territory of
one or more of the contracting parties and may
consist of all of that territory;
The territory may not include existing residential
areas or areas zoned for residential use; and
The area may not include any land owned by or
leased to a municipal corporation or township,
unless such municipal corporation or township is a
contracting party or has consented to the inclusion
of that land within the JEDD.
Once the JEDD has been created, any county within
which the JEDD is located may enter into an agreement
with the contracting parties regarding the provision of
services within the JEDD.
Procedure for Creation of a JEDD. To create a JEDD, you must first allow for public
inspection of the contract and the economic
development plan for the JEDD, which consists of a
schedule of the new, expanded, or additional services,
facilities or improvements to be provided, and a
schedule for the collection of any income tax to be levied
within the JEDD. You must also provide a description of
the area to be included within the JEDD, including a
map. Next, a public hearing must be held to promote
public discussion of the contract and the JEDD. Each
contracting party must then adopt legislation
approving the contract. Finally, the contract must be
executed.
Once the contract is in place, the parties must file the
following documents with the board of county
commissioners of each county within which the JEDD is
to be located:
A signed copy of the contract.
The description of the area, including the map.
The plan.
Certified copies of the parties’ legislation approving
the contract and the JEDD.
A certificate of each contracting party that a public
hearing was held to get community input on the
JEDD.
A petition signed by a majority of the property
owners located within the proposed JEDD.
A petition signed by a majority of the business
owners located within the proposed JEDD.
Next, the board of county commissioners of
each county within which the JEDD is to be located
must pass a resolution approving or disapproving the
creation of the JEDD. If the board of county
commissioners approves the JEDD, a vote of the
electors of each township proposing to be a
contracting party on the creation of the JEDD must be
held; provided, however, that the township trustees
may determine not to submit the question of the
creation of the JEDD to the voters within the
township if:
The resolution passed by the township’s board of
trustees approving the JEDD is unanimous;
A majority of the property owners within the
proposed JEDD file a petition for the JEDD’s
creation; and
Appropriate zoning is already in place in the JEDD
area.
Governance of a JEDD. A JEDD is governed by a board of directors comprised
of: (a) one person representing all municipalities that
are contracting parties, (b) one person representing all
townships that are contracting parties, (c) one person
representing the owners of businesses located within
the JEDD, (d) one person representing all persons
working within the JEDD, and (e) one person selected
by the four people previously selected (who shall serve
as chairperson)2.
The contract sets the method for
appointing board members.
Powers of a JEDD. The powers of JEDDs are not clearly defined by Ohio
law but include:
The power to levy an income tax within the JEDD
at a rate not higher than the highest rate being
levied by a municipality that is a contracting
party, with an amount being set aside for the longterm
maintenance of the JEDD.
The power to determine the substance and
administration of zoning and other land-use
regulations, building codes, permanent public
improvements and other regulatory and
proprietary matters determined to be for a
public purpose.
The power to limit and control annexation of
unincorporated territory within the JEDD.
The power to limit the granting of property tax
abatements and other tax incentives within the
JEDD.
In addition, JEDDs have all other powers that are
described in the contract. But, since a JEDD is a
creature of statute, it can have only such powers as are
specifically granted by statute. Thus, except for the
powers described above, a JEDD can have no more
power than an individual municipality or township
would have. Ohio law specifically provides that the
powers granted to a JEDD “are in addition to and not
in derogation of all other powers granted to municipal
corporations and townships pursuant to law.” Thus,
creating a JEDD cannot cause a contracting party to
lose other powers.
Finally, if two or more contracting parties have
previously entered into a separate contract for utility
services, then amendment, renewal, or termination of
the separate contract for utility services may not
constitute any part of the consideration for the
contract. A contract is presumed to violate the above described
requirement if it is entered into within two
years prior or five years after the amendment,
renewal, or termination of a separate contract for
utility services that two or more contracting parties
have previously entered into.
Cooperative Economic Development
Agreements3
Overview. A Cooperative Economic Development Agreement
(CEDA) is a contract, initially between one or more
municipalities and one or more townships for the
purpose of facilitating economic development within
the territory described in the CEDA.
One or more municipal corporations and one or more
townships may enter into a CEDA for the purpose of
facilitating economic development within the territory
described in the CEDA.A county may become a party
to the CEDA upon the written consent of each of the
municipalities and townships that are a party to the
CEDA. The State, or any State agency, may become a
party to a CEDA upon approval of the governor and
the written consent of each entity that is a party to the
CEDA. In addition, the CEDA may authorize contracts
with a private party in connection with the economic
development initiatives described in the CEDA, and
such private party is considered a party to the CEDA.
Procedure for Entering into a CEDA. Before entering into a CEDA, each of the proposed
parties to the CEDA must jointly hold a public hearing
concerning the CEDA. Each of the parties must provide
at least 30 days notice to residents of the territory
affected by the CEDA of the time and place of the public
hearing by publishing such notice in a newspaper of
general circulation in that territory. During that 30-
day period, each of the local jurisdictions proposing to
enter into the CEDA must make a copy of the
agreement available for public inspection.
Powers of a CEDA. A CEDA has the following powers:
Provision of joint services and permanent
improvements anywhere within its territory.
Provision of services and improvements by a
municipal corporation in the unincorporated
portion of a township.
Provision of services and improvements by a
county or township within the territory of a
municipal corporation.
Payment of service fees to a municipal corporation
by a township or county.
Payment of service fees to a township or a county
by a municipal corporation.
Issuance of bonds and notes by a municipal
corporation, county, or township for public
purposes authorized by the CEDA and provision
for the allocation of the debt service payments
and other costs related to the issuance and
servicing of the debt.
Issuance of industrial development bonds and
debt of a municipal corporation to finance projects
located outside the municipal corporation and
provision for the allocation of the debt service
payments and other costs related to the issuance
and servicing of the debt.
Limitations on annexation of unincorporated
property that is part of the CEDA.
Agreements among a municipal corporation, a
township or county, and landowners or
developers of land that is to be annexed concerning
the provision of public services, facilities, and
permanent improvements.
Limitations on the use of tax abatements within
the territory affected by the CEDA.
Changes in township boundaries to exclude
annexed territory from the original township, and
provision of services to that territory.
Earmarking by a municipal corporation for its
general revenue fund of a portion of the utility
charges it collects in territory located outside the
municipal corporation, but only if the CEDA does
not cover any matters relating to annexation.
Payments in lieu of taxes to be paid by a municipal
corporation to a township, which may be in
addition to any other payments required by law to
be made to the township.
Any other matter pertaining to the annexation or
development of territory subject of the CEDA.
Practical Advice When Considering JEDDs
and CEDAs
When a municipality is looking at options for pursuing
cooperative economic development activities with the
townships and counties with which it shares territory
or otherwise borders, it should consider both JEDDs
and CEDAs. JEDDs are more difficult to establish than
CEDAs because they, at minimum, requirement the
participation of the property owners in the proposed
district, and a vote of the electors may be required in
order to establish the JEDD. Once created, a JEDD is a
powerful tool because it can generate revenue to pay
for the costs of infrastructure improvements and
services by imposing an income tax on non-residential
properties within the district. A CEDA, on the other
hand, does not have the ability to create a new and
distinct revenue stream to pay for infrastructure and
services, but no approval is required of affected
property owners in order to enter into a CEDA. Which
of these tools makes sense will be determined on a
case-by-case basis, ultimately depending on the
economic development goals of the participants and
the political dynamics at work within those
communities.
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