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Commuinity Development Authority - MINUTES - 5/20/2008 CITY OF MUSKEGO Approved, as amended, 8/19/08 COMMUNITY DEVELOPMENT AUTHORITY (CDA) Audio recording of meeting MINUTES is also available. Tuesday, May 20, 2008 Chairman Frank Waltz called the meeting of the Community Development Authority to order at 6:30 p.m. Those in attendance recited the Pledge of Allegiance. The meeting was posted in accordance with the Open Meeting Law. PRESENT: Commissioners Rob Glazier, Suzi Link, Gail Miles, Frank Waltz, Ald. Werner, Ald. Pavelko (6:41 p.m.) and Executive Director Jeff Muenkel ABSENT: Commissioner David Lidbury GUESTS: John Eland, Kathy Chiaverotti APPROVAL OF MINUTES April 21, 2008 Ald. Werner moved to approve the minutes, as amended, for the April 21, 2008 meeting, Commissioner Glazier seconded. Upon a voice vote, the motion carried. Correction to minutes was removal of Have the on the last bulleted item under Redevelopment District #2 Amendments. ELECTION OF CHAIR, VICE CHAIR AND SECRETARY Chairman Commissioner Link nominated Commissioner Glazier and Commissioner Link for Chairman. Ald. Werner nominated Commissioner Waltz for Chairman. Commissioner Glazier accepted the nomination. Commissioner Link withdrew her nomination of Commissioner Link. Ald. Werner moved to close the nominations, seconded by Commissioner Waltz. Upon casting of paper ballots, Commissioner Waltz was elected as Chairman, 3-2. Vice Chairman Ald. Werner nominated Commissioner Glazier for Vice Chairman. Commissioner Link nominated Commissioner Miles for Vice Chairman. Commissioner Glazier accepted the nomination. Commissioner Miles declined the nomination. Ald. Werner moved to close nominations, seconded by Commissioner Miles. Commissioner Glazier will serve as Vice Chairman. Secretary Ald. Werner nominated Commissioner Miles for Secretary. Commissioner Link nominated Ald. Pavelko as Secretary. Ald. Werner moved to close nominations, seconded by Commissioner Miles. Upon casting of paper ballots, Commissioner Miles was elected as Secretary, 4-2. NEW BUSINESS Executive Director of the Chamber of Commerce (Chamber) Report Cathy Chiaverotti gave her report on some of the things that are going on with the businesses along Janesville Road that will be affected by the road construction regarding the redevelopment and also the creation of a redevelopment district in the industrial park. In early 2005, the Chamber created an industrial manufacturing park committee in the city. She believed Mike Sekula of the InPro Corporation was chairman. They surveyed the businesses in the industrial park and received a good response on the survey and held some meetings to hear the concerns of the owners. Some of their concerns have been addressed by the city such as widening the roads, wider radius in the intersections turn lanes, Racine Avenue and Janesville Road. Some that have not been CDA Minutes, May 20, 2008 - page 2 addressed are new signage, name of the park, detention pond so that when a business wants to expand, they don’t have to put a little pond on their site and can utilize much more of their site. A few businesses have left Muskego because when it came to doing their expansion, they couldn’t do the whole expansion due to being required to put the pond on the site. Phil Ziegler is now chairing the committee and with the Chamber is going to start having meetings again for input from the business owners. She thought the meetings would happen during the summer. There was discussion on whether the committee had by-laws. Mrs. Chiaverotti stated they did not, but the Chamber did. Executive Director Muenkel said there were rules and regulations established at the initial development for the industrial park. He distributed copies to the commissioners. Commissioner Miles questioned if there was anything with the Tess Corners area industrial park. Mrs. Chiaverotti said they had been invited to the meetings, but no one came. They will be included in the upcoming meeting notices. She elaborated on the downtown business development group which is a part of the Mayor’s Task Force. The downtown area was being defined along Janesville Road from Bay Lane to Pioneer Drive. Their mission is to suggest strategies to the city to help support new and existing businesses in the downtown area and assist in implementing those approved suggestions. They sent out 150 surveys and received a 23 percent response. She shared the results of the survey by the downtown business development group with the commissioners. It did give the study group a good idea of what the businesses in the area wanted to do (in relation to future improvement on their properties) relative to the Janesville Road reconstruction. RLF (Revolving Loan Fund) Discussion John Meland of the South East Wisconsin Regional Planning Commission (SEWRPC) was present to help the commissioners gain a better understanding of the RLF. He said the funds originate at the Federal government level and passed down to the State; the Wisconsin Department of Commerce is the agency that oversees the fund. The Federal agency involved is the Department of Housing and Urban Development (HUD). HUD provides a grant every year to the State of Wisconsin. The State then distributes the money to small cities; cities of less than 50,000 population and counties that are non-urban. The other half of the program that HUD administers is the Entitlement Program. That program involves cities of over 50,000 population and urban counties and HUD oversees the expenditure of those funds. In the case of the State, the State receives the grant from HUD and then the State oversees the use of the funds within the communities of less than 50,000. What is being dealt with is oversight provided by the Wisconsin Department of Commerce. The manual that the city has adopted was adopted with the blessing of the Wisconsin Department of Commerce. They actually set forth minimum standards for programs and then communities can add to or subtract from these standards and then it’s adopted by the city councils and then approved by the Department of Commerce. Muskego’s original funds were a grant to the Delta Group, the business that was in the industrial park in 1990, $320,000, a block grant loan from the Department of Commerce. Then, when they paid it back, they paid it back to the city, which then went into the revolving loan fund. The source of the money was the loan that was made, called a grant, to the Delta Group. Since 1990, Waukesha County has decided to participate in this urban county program where the money comes directly from HUD so now Muskego can no longer get grants from the State through this program. They can only get money through the urban county program for Waukesha County. But when Waukesha County switched over to the urban county program, they were able to keep the revolving loan program that was established prior to that so Muskego, Menomonee Falls, Sussex and Mukwonago are the exceptions in Waukesha County as they still have their revolving loan fund and participate in the urban county program. It’s all block grant money. The policies and procedures the city is working with start with the State. They flow down to the cities and how they want to spend their money. There is a lot of flexibility. The intent of the program is to create jobs and to build investment in the communities, build tax base. To that end, it is expected that the city will take risks with the money and not just invest in bankable deals. If only invest in bankable deals, then there is no need to have this fund as the bank is their fund. When the program started in the 1980s, there was a provision in the program called the “but for” clause--“but for” this financing, through the block grant program, this project would not occur so there had to be shown there was a need. In some cases, a turn down letter from the bank was presented. This all was changed in the ‘90s. Now, any business can get funds from this program whether large or small business. The Department of Commerce expects that the city will do its best to maintain the fund so you want to make loans that will get paid back if possible, but it the money is lost, something happens, there’s no penalty to the city except the ability to use those funds. It is the Common Council that decides who gets the funding. SEWPRC does not make CDA Minutes, May 20, 2008 - page 3 recommendations. They make sure the materials are complete and gives the city an understanding of what they believe the project is and it is up to the city or the CDA to ask questions or to ask for more information from the business. Some cities are very detailed about the information that they want and other communities that talk to the business and spend about 10 minutes on it. They don’t require a lot of information. SEWRPC uses the policies and procedures manual adopted by the city and every community has one. They make sure the business has met the minimum standards that are in the policies and procedures manual. Some communities want detailed financial information and some want the personal financial information; however, the personal cannot be disclosed in an open meeting. Those communities will then go into closed session for discussion of personal financial information. Then in open session, they make a decision on the loan. Depending on what information the city wants, the city may desire to hold a special meeting. It’s appropriate to look at the financial statements and personal financial statements. There is a requirement right now that the business have a business plan; however, the requirements of the city for what is in the business plan is rather loose. You need to have a description of the business. You need to have a marketing plan. You have to have an agent on accounts receivable, an agent on accounts payable, financial statements. There are some standards in the procedures for a business plan. You could look at making it more rigid, much like a bank; but the purpose of the program is not to be a public sector bank, but more to look at it from a community development perspective. Is it a business they want to support, bringing it into the community and if it is, is the information the business is giving adequate enough so they can feel comfortable giving the loan without the underwriting like a bank. However, they do work with banks in making these deals. There is no program like this that would fund 100%. They want a bank to do the underwriting and look at the criteria and as a governmental agency, relying quite a bit on what the bank does. Some loans can be approved contingent upon a bank approving a companion loan for the amount needed. SEWRPC will not close a loan until they have a companion loan through a participating bank. CDA could approve a loan with the contingency that they get bank financing. Some communities want the business to have the bank financing in place before they approve a loan and provide a letter from the bank. SEWRPC, as an agent of the city, retains the loan documentation for the duration of the loan. They have been directed by the city to keep it; if the city would request the documents, they would be turned over to the city. Once the loan is closed, SEWRPC contacts the city to see whether or not they want them to continue to retain the documents. Also, once the loan is closed, there is no requirement from the Department of Commerce to keep the documents. The spirit of the program is to create jobs and build the tax base and take risks; however, not to the extent the fund is depleted. The intent is to walk a fine line between clients that are bankable and can pay back. The program is willing to take more risks than a bank. The Department of Commerce is concerned about the under-utilization of these funds. There are funds all over the State of Wisconsin that are not being used because they are acting like public sector banks. The Department of Commerce is threatening to take the money back and do something different with the funds. The fact that they give the City of Muskego as much money as they do for the revolving loan fund is strictly a creation of the Department of Commerce; that doesn’t come from HUD. They don’t really have to do that and make the loans themselves through the Department of Commerce. One of the requirements of the program, and it is from the Federal government, they cannot start the project until they get approval. The other CDAs that SEWRPC works with have the same policies and procedures as the City of Muskego. Going into closed session is probably the biggest difference between communities. There isn’t any that spend more than ½ hour looking at a project. The CDA could set up a loan committee. What does the city want? Some communities only want a two-page memo with the application; other communities want to see everything that’s available to them ahead of time. City of Muskego is no longer eligible for the State’s block grant program because of the agreement to participate in Waukesha County urban county program. At the end of the agreement, the City of Muskego could decide to opt out of the urban county program and then again be eligible for the State’s small cities program. As the City of Muskego had not actively used their money for many years, the Department of Commerce may not want to give money to Muskego any more. They would like to create a regional fund for the seven counties in southeastern Wisconsin and then have a Board that would oversee the fund. (Five-minute recess.) OLD BUSINESS Redevelopment District #2 Amendments Executive Director Muenkel made some changes to the map. The one item previously discussed was the pathways along Pioneer Drive and he stated they will look at implementing them in the 2020 comprehensive plan and the park plan. Basically, they are in good shape with the properties they want CDA Minutes, May 20, 2008 - page 4 and will have staff work on the amended redevelopment district plan over the summer. Hopefully, in the fall will know the impact on the properties and can note it on the properties. In re-creating the document, some of the concepts will be kept, but the whole district will be seen as blighted according to State Statute. Individual properties will not be pinpointed on how it might be blighted as was done in the past. He said it was a matter of defining the area, defining the programs and what the CDA wants to implement to make it better. He expected to have drafts available by the end of summer. Chairman Waltz noted that whatever the CDA decides on the changes for the redevelopment district, it would require public hearings and action by the Common Council. Industrial Park Redevelopment Districts For the industrial park, Executive Director Muenkel will be defining the area and what programs the CDA wants to implement for the whole area. This will also be worked on during the summer. Working with the Chamber, staff will be involved in setting up meetings with the industrial park groups to figure out what they would want and share what programs the CDA would like implemented. Some issues for the CDA members to consider include:  Looking over the past rules and regulations adopted in the 1970s;  A general clean-up schedule;  Implementing and promoting possible grant and loan programs;  Formulation of an assessment district for larger improvements; He was thinking of establishing a design guide for the industrial park. The CDA may also want to re-create the name. PUBLIC INPUT — None. MISCELLANEOUS BUSINESS AS AUTHORIZED BY LAW Financial Resources Commissioner Miles distributed a sheet on financing options to support and develop Muskego businesses. There will be more things as time goes on. Some of it is dependent on the Janesville Road reconstruction project. Executive Director Muenkel shared that Façade Loan Program, Industrial Park Clean-up and Renewal Program and Industrial Park Storm Water Program are not implemented right now. They have been talked about but not established. He would like to be able to prove that these are quality of life issues so money could be earmarked from the landfill fund. Chairman Waltz added the dollar amounts are things that might be possible but they still have to go through approval by the elected officials. These are ideas being put forth at this time. Valley Sand & Gravel Ald. Pavelko shared that there will be discussion next week in New Berlin relative to the quarry opening up again. 2020 Comprehensive Plan Executive Director Muenkel distributed a draft for the 2020 Comprehensive Plan for the CDA members to review and submit comments. This will be an item on the July agenda. Next Meeting The next meeting was set for Tuesday, June 17, at 6:30 P.M. Meeting attendance will be an agenda item. ADJOURNMENT: There being no further business, Commissioner Link moved for adjournment, Commissioner Miles seconded . Upon a voice vote, the motion carried unanimously. Meeting adjourned at 8:33 p.m. Stella Dunahee, CPS Recording Secretary