Commuinity Development Authority- MINUTES - 4/29/2004- Amened
APPROVED, AS AMENDED, 5/20/04
Audio recording of meeting is also available.
CITY OF MUSKEGO
COMMUNITY DEVELOPMENT AUTHORITY/COMMITTEE OF THE WHOLE
MINUTES OF JOINT MEETING HELD APRIL 29, 2004
CDA Chairman Frank Waltz called the joint meeting of the Committee of the Whole and
the Community Development Authority to order at 7:04 p.m.
The meeting was noticed in accordance with the open meeting law on 4/28/04.
PLEDGE OF ALLEGIANCE
Those present recited the Pledge of Allegiance.
COMMITTEE OF THE WHOLE MEMBERS PRESENT: Ald. Patterson, Ald. Salentine,
Ald. Schroeder, Mayor Slocomb
COMMUNITY DEVELOPMENT AUTHORITY MEMBERS PRESENT: Commissioners
Rob Glazier, David Lidbury, Suzi Link, Gail Miles, Frank Waltz, Ald. Salentine and Ald.
Schroeder.
Also in attendance were Finance Director Dawn Gunderson, Interim Plan Director Jeff
Muenkel, and Financial Advisor Todd Taves from Ehlers & Associates.
GUESTS: 3, including Attorney Dick Fredrick
New TIF Laws Presentation by Ehlers & Associates
Mr. Taves of Ehlers & Associates presented the changes in the Wisconsin TIF laws. He
mentioned that in general they are very beneficial and will give the communities more
flexibility. The City of Muskego has two active blight/rehab TIDs (No. 8 and No. 9).
The major features prior to change in the law:
Maximum life of 23 years
Expenditure period terminates seven years from date of creation
TID 8 (created 8-15-2000) Period expires 8-15-2007
TID 9 (created 2-25-2003) Period expires 8-15-2010
Allowed one amendment within first seven years
Neither district eligible to be a donor or recipient
The major features after change in law
Effective October 1, 2004, the maximum life for both TID 8 and TID 9 is extended
from 23 years to 27 years with possibility of a four-year extension for a total
possible maximum life of 31 years
Effective October 1, 2004, expenditure period is extended from termination seven
years from date of creation to termination five-years prior to the district’s
maximum unextended life
TID 8 (created 8-15-2000) Period expires 8-15-2022
TID 9 (created 2-25-2003) Period expires 2-25-2025
Joint Committee of the Whole/Community Development Authority Meeting Page 2
April 29, 2004
Effective October 1, 2004, number of amendments allowed increase from one
allowed within first seven years to a total of four that can be used at anytime
Effective July 1, 2004, both districts are eligible to become wither donor or
recipient districts
Over the last few years, some working groups have looked at ways to improve the TIF
laws. He talked about the most significant categories of changes. One thing important
to know about the law is in general it takes effect on July 1, 2004; but there are certain
provisions, actually most of them, don’t take effect until October 1, 2004. In looking at
whether an action is going to be treated under the existing statute or the new language,
the date that is looked at is the date Common Council actually adopts the resolution
creating a district or amending a district. The following is a synopsis of the changes in
the TIF laws:
Categories of Changes
Effective Date
Types of District
Maximum Life
Expenditure Periods
Equalized Value Test
Amendments
Pooling (Donor/Recipient)
Joint Review Board
Annexed Territory
Cash Grants
Public Hearing
Fees
Miscellaneous Changes
Effective Date
st
The new law takes effect 7-1-2004 (the 1 day of the fourth month following
publication
Certain provisions are not applicable or do not take effect until 10-1-2004
The date the City Council acts to approve a resolution creating or amending a
TID is the date utilized to determine the provision of law that applies
Types of Districts
Same provisions as old law for industrial, blight and rehabilitation TIDs
Beginning 10-1-2004, adds new “Mixed Use” TID that allows expenditures for
newly platted residential development with certain restrictions; intended for use
by communities that have difficulty in attracting new residential development
Maximum Life
Blight/rehab district maximum life 27 years
Blight/rehab district extension with Joint Review Board (JRB) approval 3 years
Industrial/mixed use district maximum life 27 years
Industrial/mixed use extension with JRB approval is not available
Requesting an Extension
Joint Committee of the Whole/Community Development Authority Meeting Page 3
April 29, 2004
Approval required from JRB; JRB must approve extension if an independent
audit shows that the additional years are needed to repay the district’s
obligations
For an industrial or mixed use TID (applies only to those created 10-2-2004 or
th
later), request must be made during the 18 year
For a blight or rehabilitation TID, request must be made at least one year prior to
the end of the TIDs maximum life, otherwise, Department of Revenue may deny
Expenditure Periods
Effective 10-1-2004, expenditure period for all existing and future districts,
including amended areas, is five years prior to the termination of district’s
unextended maximum life
All blight and rehabilitation TIDs, including Muskego TID 8 and TID 9, 22 years
(27 year maximum life – 5 years = 22 years)
Industrial TIDs created after 10-1-2004, 15 years (20 years maximum life – 5
years = 15 years)
In many cases, this means the expenditure of an existing district will be extended or
reopened.
Equalized Value Test
Eliminates completely the 7% test and replaces 5% test with a 12% test
Equalized value of the proposed TID base plus the value increments of all
existing TIDS may not exceed 12% of the municipality’s total EV
City’s current increment value is $512,400 (1-1-2003) or .03% of its total
$1,829,918,300 equalized value.
New test applies to boundary amendments (Amendments made under old law
were not subject to the EV test.)
For boundary amendments, the base value of the proposed amendment area is
added to the value increment of all existing TIDs plus the value increment of the
TID being amended (the base of the TID being amended is not included)
Test does not apply if purpose of amendment is to subtract property from the
district
Amendments
Districts allowed four boundary amendments, effective 10-1-2004
(1) applies to existing as well as new TIDs
(2) anytime during the existence of the district
(3) may add or subtract territory
(4) subtractions cannot make district non-contiguous
(5) expenditure period for amended area is same as for district
(6) if a TID has already completed a boundary amendment under the old law, this
counts as one of the four
Pooling (Donor/Recipient)
Pooling allowed between existing and new districts, subject to various restrictions
Effective 7-1-2004
JRB approval and common overlapping taxing jurisdiction requirements still apply
Joint Committee of the Whole/Community Development Authority Meeting Page 4
April 29, 2004
Donor district must demonstrate that it has sufficient revenues to pay for all
incurred project costs and sufficient surplus revenues to pay for some or all
eligible costs of the recipient TID
Donor district may remain open through its maximum life even if it has repaid all
of its project costs
Donor districts maximum life cannot be extended solely for purposes of diverting
increment to a recipient district
Recipient district must have been created upon a finding that not less than 50%
of its area is blighted or in need of rehabilitation, or
Recipient district must have project cost for the creation or rehabilitation of low-
cost housing, or
Recipient district must have project costs for environmental remediation
Joint Review Board
There were a number of technical changes made, the key ones, effective October 1,
2004, being noted as:
Allows both Temporary and Standing JRBs (Standing JRB can be disbanded by
city at anytime.)
Requires JRB to make positive assertion that the development would not occur
without TIF (“but for” test---the development could not happen, “but for”)
Eliminates requirement for JRB to wait 10 days before acting on a resolution
creating a TID (30 day rule still applies.)
Requires JRB to notify special districts that have taxing authority of meetings
(e.g. inland lake protection district)
Annexed Territory
There are some new laws regarding annexation. The old law did not cover this.
Prohibits inclusion within a TID lands annexed after January 1, 2004, unless one
of the following applies
(1) The city enters into a cooperative plan boundary agreement (s.66.0307 or
other agreement relating to the annexation with the town, or
(2) Three years have elapsed since the annexation, or
(3) The city agrees to pay the town for a period of five years the property taxes
levied by the town on the annexed land at the time of annexation (TIF eligible
expense)
Cash Grants
Prohibits cash grants as eligible project costs without a developer agreement
Agreement must be signed by grant recipient
Copy must be provided to JRB unless it has been disbanded
Effective October 1, 2004
Public Hearing
Waiting period reduced from 30 days to 14 days for Council to act on resolution
creating TID
No waiting period for project plan amendments and boundary amendments no
change)
Joint Committee of the Whole/Community Development Authority Meeting Page 5
April 29, 2004
Public hearing notice must include language advising if cash grants to land
owners, lessees or developers are included as part of the project plan
Fees
Effective March 5, 2004, the Department of Revenue began charging a fee of
$1,000 for certification of (a) the base value of any new TID, (b) re-certification of
base value resulting from an amendment that adds or subtracts property from a
TID
Fee does not apply to a project plan amendment that does not involve addition or
subtraction of territory
Miscellaneous Changes
Mr. Taves pointed out one of the significant changes to the law
Allows Department of Revenue (DOR) to determine “substantial
compliance” with TIF procedural requirements; the interpretations likely to
be done on a case-by-case basis with the intent to reduce special
legislation
Mr. Taves concluded his presentation at 7:33 p.m.
Commissioner Link inquired what bureaucracy would be involved with taking an
amendment to the Joint Review Board? Mr. Taves explained that the Joint Review
Board has five members—one from the city, one from the county, one from the
technical college, one from the local school district, and one citizen member, usually
from the city, selected by the JRB. In essence, the city could then have two
members on the JRB. The process for an amendment is the same as creating a
district, going through the same steps, putting a project plan amendment together,
goes to the Plan Commission, CDA, JRB, Common Council, and then back to the
JRB for final approval.
Ald. Salentine inquired if they could amend the TID before October 1, 2004 and not
be penalized? Mr. Taves stated that if they are looking at a project plan
amendment, they can do as many of those at any time they want, but would have to
go through the JRB process. The dates of July 1 and October 1 would not be a
factor. There have been no changes in the laws that affect the project plan or scope
of the project. If it was a boundary amendment, then there would be considerations
and the dates would matter.
CDA Chairman Waltz thanked Mr. Taves for his time and his presentation.
ADJOURNMENT
There being no further business, Mayor Mark Slocomb moved for adjournment.
CDA Commissioner Link seconded. Upon a voice vote, the motion carried. The
meeting adjourned at 7:38 p.m.
Stella Dunahee, CPS
Recording Secretary