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CCR1982025RESOLUTION NO. 25-82 RESOLUTION AMENDING A PROJECT PLAN FOR TAX INCREMENTAL DISTRICT NUMBER TWO CITY OF MUSKEGO, WISCONSIN By the Common Council of the City of Muskego. . of Muskego has created Tax Incremental District Number Two, City of Muskego, and WHEREAS, pursuant to Section 66.46 of the Wisconsin Statutes, the City . WHEREAS, the City of Muskego, Planning Comnission has prepared and adopted a project plan for Tax Incremental District Number Two, and WHEREAS, the Planning Comnission has prepared an amended project plan for Tax Incremental District Number Two, which: 1. Includes a statement listing the kind, number and location of all proposed public works or improvements within such district; 2. Contains an economic feasibility study; 3. Contains a detailed list of estimated project costs; 4. Contains a description of the methods of’financing all estimated project costs and the time when such costs or monetary obligations related thereto are to be incurred; 5. Includes a map showing existing uses and conditions of real property in such district; 6. Includes a map showing proposed improvements and uses therein; 7. Shows proposed changes of: a. Zoning ordinances b. Master plan c. Map d. Building codes e. City ordinances 6 8. Contains a list of estimated nonproject costs; 9. Contains a statement of a proposed method for the relocation of any person to be displaced; and WHEREAS, the Planning Comnission has held a public hearing and has notified the chief executive officers of all local government entities having the power to levy taxes on property located within the district, including the district pursuant to Section 66.46(4)(e), Wisconsin Statutes; and, school board of any school district which includes property within the WHEREAS. the City of Muskego Planning Comnission has submitted such amefded project plan, a copy of which is attached as Exhibit A. to the Comnon Council of the City of Muskego; NOW THEREFORE, BE IT RESOLVED that the Comnon Council of the City of Muskego finds that: 1. Such amended project plan for Tax Incremental District Number 2, City of Muskego. is feapible. and 2. Such amended project plan is in conformity with the master plan of the City of Muskego. BE IT FURTHER RESOLVED that the Comnon Council of the City of Muskego approves such amended project plan for Tax Incremental District Number 2, pursuant to the provisions of Section 66.46. Wisconsin Statutes. Adopted this 7 day of +y lgaz Attest: Q City Clerk - EHLERS AND ASSOCIATES, INL. FINANCIAL SPECIALISTS iT NATIONAL-SOD LINE CONCOURSE 507 MARQUETTE AVE. MINNEAPOLIS. MINNESOTA 55402 338-8281 IAREA CODE 6721 - Amended Project Plan Tax Incremental District No. 2 City of Muskego, Wisconsin I 1. St2 ltement o sf K d, Number and Location of Proposed Public Works Tax Incremental District No. 2 of the City of Muskego (TI0 No. 2) was created primarily to promote industrial development as authorized in Wisconsin Statutes 66.52 to provide an expanding employment and tax base for the community. Land zoned for industrial use is located to the north of existing the city's sewage treatment plant is detrimental to the development of this industrial property but lack of proper storm water drainage and capacity in deficiencies is considered a "project cost" and eligible to be paid from tax property. Any cost directly or indirectly related to overcoming these list below. With all projects, the costs of engineering, design, survey, increments of the tax incremental district including but not limited to the inspection, materials, construction, installation, acquiring property or easements, restoring property to its original condition, apparatus necessary judgements or claims for damages and other expenses are included in project for the public work, legal and other consulting fees, testing, permits, costs. A. One storm water drainage project to provide for the discharge of surface water from the northeast section of the city. The project includes an environmental study to determine the most advantageous way ponds and water control structures are included. to provide the drainage. All ditching, piping, sodding, detention .B. Fire department addition and equipment to provide protection to the growing industrial and residential area. C. Pro rata share of sanitary sewer facilities study to evaluate the Milwaukee Metropolitan Sanitary District or with a treatment plant of feasibility of providing additional sewer capacity either with the its own. D. Street improvements including the installation of traffic lights at T. H. 24 and Durham road and T. H. 24 and Tess Corners. E. Pro rata share of a major sanitary sewer interceptor will interconnect the two sewer treatment plants and eventually connect Muskego sewers to the Milwaukee metropolitan system or a new facility of the city. City of Muskego Tax Incremental District No. 2 Page 2 F. Imputed administrative costs including but not limited to a portion of the budget for city administration, building inspection, assessing, zoning, planning, public works, legal and financial fees. G. Organizational costs including but not limited to the fees of the makers and other contracted services, publications and supplies. financial consultant, attorney, planner, engineers, surveyors, map H. Capitalized interest, finance fees, bond discounts, bond redemption premiums, bond legal opinions, ratings, capitalized interest, bond insurance and other expenses related to financing. I. Pro rata share of capital cost contribution for any project providing metropolitan system, some other joint project or construction of a new sewerage treatment capacity, such as a hookup to the Milwaukee might take the form of a long-term contract with a joint facility or or expanded Muskego ovmd facility or facilities. This project cost debt to pay for capital costs to a metropolitan, jointly owned or city owned facility. This allocation of project cost shall not be financed or expended for any other purpose. J. A proportion of the cost of a tornado warning system. 'i 7 City of Muskego Tax Incremental District No. 2 0 11. Economic Feasibility Study Page 3 e The City of Muskego's corporate limits are almost coterminous with those Waukesha County. Three large lakes enhance the landscape. Most urban of the former six mile square Town of Muskego in the southeast corner of development is concentrated around the lakes and in the northeast corner closest to Milwaukee. State Highways No. 15, 24 and 36 connect Muskego to Milwaukee County and County Highway Y provides connection to the City of Waukesha. The city is 20 minutes west of General Mitchell Field, serving Milwaukee with scheduled airline service, and 15 minutes south of the ldaukesha County Airport with nonscheduled service. Muskego has become a regional retail shopping center with the opening of Parkland Mall, its largest taxpayer. Recognizing the need for expanded industrial tax base, the city opened and partially serviced an industrial park in 1972. All 110 acres in the park are creative lithographers, was the first industry to locate in the park. This now serviced with sewer, water and streets. Marek Lithographics, Inc., company, with 23 employees, has been located in Muskego approximately 7 years. Interstate Tool and Engineering Corporation, a tool and die manufacturer employing 36, has been located in the industrial park for 6 years. Brodel Machine Corporation moved from Milwaukee to the industrial park about 5 years ago. This company subcontracts machining. Other businesses in the industrial park include Robert A. Gumieny, a wholesale beer distributor; Alpine Lanes, a bowling alley; Lloyd Hamm Contractors; Tinti Contractors; and Ludman Machine Corporation. Other industries in Muskego include Muskego Rendering Co., which has 36 employees, Reynolds Machine Company, Inc., with 52 employees and Precision Schrew Thread Corporation with 70 employees. e The city has used a combination of land use zoning, subdivision control ordinances and long range capital improvement finance planning to control devleopment within the community. Land use zoning concentrates development in that portion of the city most adjacent to Milwaukee. Subdivision ordinances assure quality construction and restricted density levels. All city capital improvement financing to be repaid from general revenues is limited to a \ I\ self-imposed debt service limit of 0.34% of assessed value. 9 c The city is under an order by the Wisconsin Department of Natural Resources t: 0 which prohibits it froln allowing additional connections to its sanitary sewer from issuing new construction building permits in all but three subdivisions system. This moratorium against future sewer connections prohibits the city which were approved prlor to the moratorium. Because the city is within the Milwaukee Metropolitan Sewer Service Area, which is under a court order specifying discharge standards, the City of Muskego is unable to expand its sewer facilities under the regulations of the Department of Natural Resources. The city and the state are cooperating in seeking judicial review of this dilemma and the lifting of the sewerage moratorium, subject to a determination that expansion of the Muskego temporary treatment plants is justified. Citv of Muskeqo Tax Incremental District No. 2 a - Building permit data has been as follows: 1976 1977 - - Single family 158 158 Valuation $5,567,368 $6,887,885 Multi-family 9 0 Valuation $1,052,000 0 Remodel i ng and additions 147 169 Valuation $464,736 $507,257 Garages 39 42 Valuation $112,430 $122,624 0 Commercial Valuation - 1978 94 $5,218,248 0 0 120 $351,878 42 $123,578 7 11 14 $608,506 $599,600 $1,800,778 Other permits 227 158 Valuation $310,348 $293,395 $295,563 130 The following is a summary of U. S. Census data for the city. Population Trend: 1950 U. S. Census 4,157 1960 U. S. Census R ,888 1970 U. S. Census 11,573 1980 Prel imi nary U. S. Census 15,020 Page 4 - 1979 68 $3,932,530 0 0 100 $757,506 36 $111,962 5 $1,275,000 126 $436,648 City of Muskego Tax Incremental District No. 2 0 e Income/Age/Education Data: Mean family income Per capita income Medi an f ami ly income Percent below poverty level Median school years completed Percent above $15,000 income Median age Housing: Percent owner occupied Percent one unit structure Percent built before 1939 Percent built after 1959 Median contract rent Owner median value e Page 5 State City of Waukesha Overall Muskego County Average $ 3,194 $ 3,634 $ 3,046 $13,042 $14,285 $11,135 $12,581 $12,795 $10,068 3.8% 3.2% 7.4% 31.9% 34.3% 19.8% 12.4 12.5 12.1 23.8 25.4 21.2 94.2% 83.4% 27.7% 28.3% 23.5% 33.3% $22,900 $25,300 $105 $122 69.1% 70.7% 52.1% 20.2% 817,300 $91 8. , : r:.; I: i ., ..! . 1~ i ~.. I . , ..... .... City of Muskego Tax Incremental District No. 2 Page 7 In addition to general obligation bonds, the city can issue mortgage revenue bonds to be repaid from revenues of the sewer and/or water system, including revenues paid by the city that from any source represent the service of the system to the city. There is no statutory or constitutional limitation on the amount of revenue bonds that can be issued. However, sewer and water rates of the city are controlled by the Wisconsin Public Service Commission and the city must demonstrate to bond underwriters its ability to repay revenue debt with the assigned rates. properties to pay part of the cost of street, curb, gutter, sewer and water It is anticipated that special assessments may be levied to benefitted extensions. The city can issue special assessment "B" bonds pledging revenues from special assessment installations to the extent assessment payments are outstanding. These bonds are not counted against the city's constitutional debt 1 imi t. The creation of a Tax Incremental District allows the city to consider 0 the use of tax increment notes or bonds. This security would be retired from tax increment revenues generated solely within this tax incremental district. Any use of this security would require a historic record of tax increment revenues that would demonstrate the ability of the district to generate adequate revenues. To date this security is not marketable and its marketability is dependent on a Supreme Court decision. Based upon the economic characteristics and the financing resources of feasible. the city, all projects outlined in this project plan can be financed and are City of Muskego Tax Incremental District No. 2 Page 8 $4,109,900 to 95,409,370 as of January 1, 1981. This increase entitled the Property values in TID No. 2 have increased from the 1979 base of city to tax increelnent revenues of $11,395 collected in 1981 and $73,088 to be collected in 1982. Although this is somewhat less than revenues projected in available new development will occur at a rapid pace. It is estimated Metro Sewer will be available in 1984. The following pro forma demonstrates TIF revenues (both accrued and anticipated) will be sufficient to retire debt already incurred and that proposed to finance all projects of this district. The proforma is based on the following assumptions: the original plan it is expected when Milwaukee Metro Sewer Service is The base value of the district with an adjustment for the exemption of Line A personal property is $4,038,000. January 1 as follows: Private development which results in new tax base will be generated as of 1981 1982183 $ 375,000 1984186 500,000 1987191 7,500,000 5,000,000 The 1982 equalized tax rate of $18.09 per thousand will decline at the rate of 256 per thousand per year. property values will continue to increase at the rate of 6% per Year because of inflation. D :I, '7 , h I. 7 . 3 :I. 7 , I 1. I , (3 e City of Muskego Tax Incremental District No. 2 Page 10 Exhibit I demonstrates TIF revenues along with capitalized interest and other revenues to be collected would be sufficient to retire existing and proposed debt for TIF projects. * Issue 1 which has entries for principal only represents this district's share of $670,000 G.O. notes issued in 1979 and $1,225,000 G.O. notes issued in 1980. The city will issue $3,950,000 short term 6.0. promissory notes early in 1982 G.O. promissory notes will be issued for 1983 projects. Both these note to finance projects to be completed during the year. Late in 1982 $8,800,000 issues will be refinanced with long term G.O. bonds in the fall of 1983. Issue 2 represents principal and interest payments of that issue allocated to this district. for sewerage treatment capacity through hookup to the Milwaukee Metro Sewer Issue 3 represents this districts pro rata share of capital cost contribution System. e D .. m " - .. 0 City of Muskego Tax Incremental District No. 2 Page 14 Project (A) Storm water drainage project (B) Fire department addition & equipment (C) Sanitary sewer facilities study 1 (0) Street improvements of Lake Oenoon Tax Incremental District No. 2 Project Schedule - 1979 1980 1981 1982 1983 - - $195,000 $500,000 $500,000 150,000 15,000 13,102 ~ ~~ ~~ (E) Major sanitary sewer interceptor D (F) Administrative costs (G) Organizational costs (H) Finance fees (I) Capital cost contribution for any project providing capacity sewerage treatment (J) Tornado warning system Totals 262,050 5 ,no0 5,000 5,000 53,720 951,027 5,000 - " $3,720 $363,102 $520,000 $1,843,077 Tax Incremental District No. 2 City of Muskego Page 15 a IV. A Description of the Methods of Financing and the Time when such Costs or Monetary Obligation related thereto are to be Incrurred A. In 1977 the city issued $1,310,000 general obligation bonds to finance in part the payment to the Town of Norway and $320,000 and $365,000 nonassessable sewer costs for the Lake Oenoon area. This represents 52% of the principal of the issue. Thus, 52% of the TI0 No. 1 as follows: principal and interest on these bonds is the responsibility of Total principal and interest $1,875,081 Times 52% X .51 TID No. 1 share of debt payments $ 975,042 Wisconsin Statutes 66.46(6)(c) shall be made to the sinking fund for Transfers of money from the tax increment fund as authorized hy these bonds from time to time until $975,042 has been paid. Of this same bond issue, $400,000 was for the construction of a 30.5% or $442,650 of the remaining principal and interest on this police building, of which $19,825 principal has been repaid. Thus, loan of $1,451,312.50 is the liability of TID No. 7. B. In 1979 the city issued promissory notes totalling $670,000, a portion of which was used to finance planning costs for the city's seven tax incremental finance districts, payment to the Town of Norway Sanitary District that portion of treatment and interceptor costs allocated to TI0 No. 1 and other projects within various districts. In December, 1980 the city issued $1,225,000 G.O. promissory notes to fund TIF projects completed in 1980 and for planned 1981 capital projects some of which were eligible project costs in each of the seven districts. A total of 63.12% principal and interest of these two issues will be apportioned to the seven districts as shown below. Transfers of monies from the tax increment funds as authorized by W. S. 66.46(6)(c) shall be made from time to time to the sinking funds of these notes until the obligation of the various districts has been met. TID No. 1 TID Nb. 2 TI0 No. 3 TI0 No. 4 TI0 No. 5 TID No. 7 TI0 No. 6 Principal and Interest $406,875 563:627 3881325 55,342 12,676 22,260 502,410 All proceeds from the 1980 issue are not yet expended, therefore, final proration of this and future issues'will be made and reported in future annual reports. City of Muskego Tax Incremental District No. 2 C. 1982 Promissory Notes City of Muskego tax^ Incremental District No. 2 C. 1982 Promissory Notes Page 16 * Short term G.O. promissory notes will be issued early in 1982 to finance various projects of the seven districts to be constructed or purchased during 1982. The note issue is calculated as follows: Project costs TID No. 1 16 642,000 TID No. 2 TID No. 3 TID No. 4 TID No. 5 515.000 230;OOO 650,000 125,365 8 TID No. 6 TID No. 7 1,280,500 Total $3,442,865 Note discount 79,000 Finance fees 25,000 Interest during construction 403,135 Note issue $3,950,000 ” Total principle and interest of these notes will be apportioned to the seven districts as shown below: TID No. 1 TID No. 2 18.64 14.95 TID No. 3 6.68 TID No. 4 18.88 TID No. 5 3.65 TID No. 6 TI0 No. 7 . 00 37.19 with long term G.O. Bonds to be issued late in 1983. It is anticipated these notes will mature in 1984 and will be refinanced City of Muskego Tax Incremental District No. 2 Page 17 - 0. 1982 Promissory Notes a Late in 1982 short term G.O. promissory notes will be issued to finance various projects of the seven districts to be constructed or purchased during 1983. The note issue is calculated as follows: Project costs D TI0 No. 1 TI0 No. 2 TI0 No. 3 TI0 No. 4 TID No. 5 TI0 No. 6 TI0 No. 7 Subtotal Note discount Finance fees Interest during construction Note issue $ 510.000 887 in50 84,650 2,037,000 -592,300 2,510,350 1,214,700 $7,836,0511 176,000 45,000 742,950 ~8,800,noo Total principle and interest of these notes will be apportioned to the seven districts as shown below: TI0 No. 1 6.51 TID No. 2 11.32 TI0 No. 4 25.99 TID No. 5 7.56 TID No. 6 15.50 TI0 No. 7 32.04 TID No. 3 1.08 with long term G.O. Bonds to be issued late in 1983. It is anticipated these notes will mature in 1984 and will be refinanced Citv of Muskeqo e Tax' Incremental District No. 2 Page 18 e E. 1983 G.0. Bonds It is anticipated that in the fall of 1983 the city will issue long term General Obligation Bonds to refinance the short term promissory notes issued during 1982 for 1982 and 1983 projects. This will allow the city to take advantage of the maximum number of years allowed to generate tax increments without extending any maturities beyond 15 years which is compatible with today's market demand. It is likely this will result in a substantial interest saving, as well as allow the city to issue only enough long term debt to fund projects actually completed. Assuming all projects included in the project plans of the seven districts are completed, the bond issue is calculated as follows: 1982 Promissory notes $ 3,950,000 1982 Promissory notes 8,800,000 Total $12,750,000 Bond discount 303,000 Finance fees 52,000 Capitalized interest 2,045,000 Bond issue $15,150,000 8 City of Muskego Tax Incremental District No. 2 Page 20 It is anticipated Muskego's payments for Milwaukee Metro Sewer will be $827,700 per year for 15 years or $12,415,500. This cost must be Pro rata shared with the entire sewer service area. The TIDs share a total of 27.83% divided as follows: District Percent 3 TID No. 2 7.66 TID No. 3 1.28 TID No. 4 8.68 TID No. 5 2.55 TID No. 6 6.13 TI0 No. 7 1.53. Dol 1 ar Amount 1.077.665 -316;595 761,070 189,957 27.83 $3,447,232 These amounts will be transferred from the appropriate TID fund from time to time until this obligation has been met. The city reserves the right to use these funds for other sewage treatment facilities should the Milwaukee Metro 8 solution prove unworkable. City of Muskego Tax Incremental District No. 2 V. Map Showing Existing Uses (attached) VI. Map Showing Proposed Projects (attached) VII. Proposed Changes in Zoning Ordinances Page 21 There are no changes needed in zoning ordinances to comply with this Dl an. VIII. Proposed Changes in Master Plan, Zoning Map, Building Codes and City Ordinances There are no anticipated changes in the master plan, zoning map, building codes and city ordinances because of this project plan. IX. List of Estimated Nonproject Costs Private development and improvements ~8,875,noo X. Relocation business in conjunction with this project plan. In the event It is not expected that there will be a need to relocate any person or relocation becomes necessary at some time during the implementation period the city will take the following steps and actions. Before negotiations begin for the acquisition of property or easements, all property owners will he provided an informational pamphlet prepared by the Islisconsin Department of Industry, Lahor, and Human Relations (DILHR) and if any person is to he displaced as a result of the acquisition they will be given a pamphlet on "Relocation Benefits" as prepared by the DILHR. The city will provide each owner a full narrative appraisal, a map showing the owners of all property affected by the proposed project and a list of all or at least ten neighboring landowners to whom offers are being made. The city will file a relocation plan with the DILHR and shall keep records as required in Llisconsin Statutes 32.27. PAOJECT LOCATIONS - TID #2 worm drainage (B) Fire dept. equipment & addition (E) Pro-rata share of sanitary sewer (D) Traffic lights (Hwy. 24 & Durham & Hwy. 24 & Tess Corners Dr.) (F) Administrative costs interceptor (G) Organizational costs (H) Financing costs (I) Share of Milwaukee Metro sewer system (J) Tornado warning system Other Items Included in District (C) Sewer study r.