Village Board of Trustees

Village of Weston, Wisconsin OFFICIAL PROCEEDINGS OF THE SPECIAL JOINT MEETING OF THE COMMUNITY DEVELOPMENT AUTHORITY, BOARD OF TRUSTEES, AND PLAN COMMISSION held on Tuesday, March 10, 2020, at 5:00 p.m., in the Board Room, at the Municipal Center AGENDA ITEMS. 1. Meeting called to order by Village Trustee & CDA Chair Zeyghami. 2. Roll Call of Community Development Authority (CDA) by Secretary Parker. Roll call indicated 6 CDA members present. Member Present Zeyghami, Hooshang YES Maloney, Mark YES Hagedorn, Todd YES Knopf, Michelle YES Jelmeland, David YES Marshall, Gayle NO - Absent Winkels, Stephen YES 3. Roll Call of Board of Trustees (BOT) by Secretary Parker. Roll call indicated 6 BOT present. Member Present Sparks, Wally YES Ermeling, Barb YES Fiene, Nathan YES Maloney, Mark YES Xiong, Yee Leng NO - Excused Zeyghami, Hooshang YES Ziegler, Jon YES – Via Phone 4. Roll Call of Plan Commission (PC) by Secretary Parker. Roll call indicated 5 PC members present. Member Present Maloney, Mark YES Sparks, Wally YES Gau, Duane NO - Excused Guerndt, Gary YES Jordan, Joe NO - Excused Meinel, Steve YES White, Loren YES Village Staff in attendance: Donner, Higgins, Trautman, Chartrand, Wheaton, Hodell, and Parker. There were a couple people in the audience. 5. Public Comment Mtg_BOT_200316_Consent_Minutes_CDA-BOT-PC Valerie Parker updated @ 3/12/2020 3:00 PM Page 1 200310200310 None. 6. Approval of minutes from the December 10, 2019, CDA meeting Motion by Maloney, second by Winkels: to approve the December 19, 2019, CDA Meeting minutes. Yes Vote: 6 No Votes: 0 Abstain: 0 Not Voting: 1 Result: PASS Member Voting Zeyghami, Hooshang YES Maloney, Mark YES Hagedorn, Todd YES Knopf, Michelle YES Jelmeland, David YES Marshall, Gayle --- Winkels, Stephen YES 7. Discussion of CDA/Plan Commission Roles & Responsibilities. a. Presentation via phone – Community Development Authority Financing Tools (Rebecca Speckhard, Quarles & Brady). Rebecca Speckhard, of Quarles & Brady, was present via phone and went over her Community Development Authority Financing Tools presentation (attached). Zeyghami asked Speckhard to explain double tax exemption. Speckhard explained (using street improvements as an example) if the Village issued bonds for street improvements, those bonds, when they are issued to investors, those investors get interest payments from the Village on those bonds, and that interest received is only exempt from Federal income taxes. They still have to pay State income taxes. However, if the CDA were to issue bonds for a public purpose, the investor would receive interest that they would be able to treat as tax exempt on their Federal return and also would not be treated as income to them on their State tax return. So that is a double-tax exemption that investors receive a benefit of from a CDA bond issue, and municipalities are only able to issue a single tax exempt bonds. b. Presentation – CDA Financing Options (Greg Johnson, Elhers Senior Municipal Advisor) Greg Johnson, of Elhers, was present and went over his CDA Financing Options presentation (attached). Johnson explained under Statutes there are two different types of debt that can be issued, general obligation debt (through tax levy) and revenue debt (legally pledging a non-property tax revenue source to repay the debt). He stated the Village has issued revenue debt under the Water Utility, Sewer Utility, and Stormwater Utility. The CDA has also issued CDA revenue bonds to finance projects in both TIF #1 and TIF #2. These forms of revenue debt do not count towards the Village’s general obligation debt. Johnson gave the example of going back to 2002, there was an amendment in TIF #1, and there was a blight finding and a redevelopment plan established. This is one of the areas where CDA can legally operate under is when they are involved in redevelopment or blight remediation activities. By doing the redevelopment plan and making appropriate blight findings, that essentially put the legal mechanism in place for the Village to issue CDA revenue bonds to finance the projects within TIF #1. By doing this that debt could be issued and not count towards the general obligation debt limit. Johnson explained another advantage of CDA bonds is that they can be issued for a term greater than 20 years. Johnson then described the disadvantages and risks. He stated it is a more costly due to legal expenses, agreements, and financial review. With all revenue debt, there is typically a debt service reserve fund. That is money that is borrowed as part of the issuance of the CDA lease revenue bonds and that money is set aside Mtg_BOT_200316_Consent_Minutes_CDA-BOT-PC Valerie Parker updated @ 3/12/2020 3:00 PM Page 2 200310200310 as a contingency fund so in the event the revenue stream that is being repledged to repay the lease is insufficient, those reserves can be drawn upon to make the debt service payments. He stated that underwriters want to see that the source you are pledging has a coverage level of 125% or higher. For every $1 of debt service you are issuing through a CDA, the revenue stream that you are pledging will have $1.25. He stated this carried a higher interest rate then general obligation debt. Also, if you issue CDA lease revenue bonds, and the revenue stream that you are pledging is insufficient, and you need to appropriate other funds to make that debt service payment, CDA lease revenue bonds are not exempted under levy limits. Johnson explained that while it is not legally general obligation debt, the Village has been rated by Moody’s Investor Services, and any CDA lease revenue that has historically been outstanding for both TIF #1 and TIF #2, the rating agencies factor that into the overall debt profile of the Village. Johnson explained the methods of issuing CDA revenue bonds noted in his presentation along with giving a summary of his presentation. Donner commented our CDAs do have outstanding debt to be paid. He confirmed we do not have the option to close it until the debt is paid off. Donner explained the concept of determining that something is blight, does not mean that it is condemnable property. Speckhard stated the definition (Statutes 66.1333) is very broad and while it includes things like deteriorating structures, it also includes things like areas that are predominately open due to diversity of ownership, lot layout, etc. Johnson stated when TIF #1 was created, it was an industrial district, and the redevelopment plan and blight plan done in 2002 gave the CDA legal authority to issue CDA bonds. He stated this does not change the type of district that was created, and TIF #1 is still an industrial district, and you can’t reclassify the district, once you have identified the type. Johnson explained when TIF#1 had the project plan amended to update the project costs and life of TIF #1 with the special legislation, the redevelopment plan originally in place was updated. Donner confirmed the CDA does not have taxing power, but then the Village could issue bonds or notes to aid the authority. He asked how this does not constitute using taxing authority. Johnson explained the Village can issue notes or secure loans on behalf of the CDA, that is essentially done under a general obligation basis; so if the Village wanted to execute some kind of a financing under the general obligation basis and use those proceeds from that borrowing to aid initiatives or projects of the CDA, that is legally permissible under the statutes. Speckard this is not a problem because that borrowing from Village would be subject to all the rules and restrictions Johnson talked about in his presentation, like the 5% limit of the equalized value. Ermeling confirmed if the Village does the General Obligation, then that is a tax levy possible event if the TIF failed. Ermeling then confirmed if CDA borrows it, and it fails, does it still go back to the Village? Johnson stated if the CDA fails, generally there is an appropriation clause within the bonds, that it is subject to appropriation by the Village Board. Johnson stated it is their recommendation that the Village Board make that appropriation, because if you don’t make the payment, you are in default. Ermeling questioned what the advantage is to have the CDA doing the borrowing if the Village can get a better rate. Johnson stated the main advantage is the borrowing limit. With general obligation debt you can’t have principal outstanding that exceeds 5% of the Village’s equalized value; and when CDA borrows those funds it does not count towards that. White commented it also benefits the investors, as it makes the bonds more palatable for the investors when they get a double tax exemption. Sparks brought up the USDA rule on development, and when we were originally looking at the new municipal center, and questioned if there is a benefit there and if people use the CDA to build a municipal center? Johnson stated there have been municipalities through the USDA rural development program that involve their CDA to help secure their projects. The steps that need to be taken to do that, if the CDA is going to be involved, there still needs to be a blight finding to designate that area as being blighted (to give CDA legal Mtg_BOT_200316_Consent_Minutes_CDA-BOT-PC Valerie Parker updated @ 3/12/2020 3:00 PM Page 3 200310200310 authority). You also need to go through and qualify for USDA loan program. That form of financing through the USDA is typically done on a revenue basis and does not count towards the general obligation, and you can’t amortize the project greater than 20 years. He would argue that some portions of a large municipal complex are going to have a useful life of 40 years. If that debt is still outstanding at 30 years, you will likely be replacing portions of that facility, while that original debt is still outstanding. Johnson stated the main practical concern in getting involved with that is the levy limit. He stated if the allowable levy can’t cover the debt service on a CDA rural development loan for a municipal complex, the only way you can increase your allowable levy is you would need to secure a taxable loan (before adopting the budget) that is equal to the debt service payments on the CDA revenue bond financing the following year, and issue that taxable financing under a general obligation basis (short-term note). Sparks confirmed being at 50% our debt limit for general obligation, we would be better off sticking with that. Speckhard stated the driving factor, for most municipalities, is they want more than 20 years (and USDA will loan up to 40 years) to pay off the debt. Hagedorn questioned if the financing would have to be within the TIF boundaries. Johnson confirmed for a municipal site, it would not have to be within the TIF boundaries, but would have to have some kind of a spot blight finding. Zeyghami confirmed the underwriter has to be in Wisconsin? Johnson stated typically the underwriters are located in Wisconsin, but does not have to be owned in Wisconsin. Guerndt questioned if the property is bought by the Village and they want to go for CDA funds, if the CDA has to own it. Speckhard stated the CDA would have to end up owning it and the Village could lease it, making lease payments back to the CDA. Initially it could be owned by some other 3rd party, but then in the blight designation, it is usually a property owner that is on board with the designation, and transferring the ownership to the CDA. Usually this is an owner who is on board with the blight designation and transfers ownership. c. Discussion of the history of the CDA and its original intended purpose and responsibilities. Donner stated Chartrand put together a history of when the CDA was created, back to 2002. Typical reason to create a CDA or to release revenue bonds is if the general obligation debt limit is being flirted with. The then administrator worked with different consultants and created the authority (attached Municipal Law document). In 2014, the administrator kept the duties and responsibilities consistent with statutes. In 2015, Administrator Guild made a revision after consulting with the Village attorney, and additional duties we given (per attached Ordinance No. 15-012). We want to understand better the duties and responsibilities of CDA that would be different than what the statutes require or what our ordinance says that we could consider changing that. Staff just does not want there to be duplication of putting together meeting packets and conducting meetings where things overlap. Higgins stated over last few years it has gotten muddy as far as who reviews what. She brings the same plans to both and there are a lot of dual meetings. Higgins stated when looking at their role, they absorb the economic development committee, which we can’t find a lot of information on. One of the descriptions states administration and development of a revolving loan fund, and we don’t presently have a revolving loan fund. It states they provide oversight and development in the Village’s Industrial and Business Park, which we just have Business Park North and Business Park South, and does not take into account the rest of the business community. She explained PC is who deals with site plans and everything that comes in. Staff would like to have the Board discuss what they would like to see each committee do going forward. She stated CDA really only met to discuss the lease revenue bonds, and there was not a lot of CDA actual meetings. Higgins questioned if the Board’s view of the CDA is to make recommendations to them on giving TIF money, or is that the role of the PC? She stated that we haven’t given out any TIF money, mostly just land sales which are approved by the Board, but with PC site plan review. She questioned if the Board wants recommendations from the CDA for giving out money, and if it should be both CDA and PC? She pointed out how the tours that have been given to the CDA, really would benefit the PC more, as the PC is the one in charge of the zoning code. Mtg_BOT_200316_Consent_Minutes_CDA-BOT-PC Valerie Parker updated @ 3/12/2020 3:00 PM Page 4 200310200310 Donner stated this could be just a brainstorming session to get everyone’s thoughts. We have cancelled a lot of CDA meetings, and want to be sure we are using their time wisely. Sparks feels there has been a lot of duplication. He stated this does cause more work for both the CDA and PC, and now if different views coming out of the two, how do you reconcile that. Ermeling stated she understands we have CDA because of TIF funds that are out there, is it possible to have a PC / CDA with two different functions. Johnson stated the legal authority of the CDA is with redevelopment, blight, and housing, which may expand into the area of financing with TIF. He sees other areas where CDA gets involved is in TIF creations or project planned amendments, a public hearing is required and can be held legally by PC or CDA. He stated our CDA has been quite involved in the TIF actions because of that redevelopment plan and trying to preserve the authority of the CDA to be involved in the financings. From what he sees in other communities, the CDA involvement, hedges on whether or not property is under the ownership of the Village or CDA. Outside of that, it is under the discretion of Village Board on what other authority you want the CDA to have in an advisory capacity. Sparks confirmed our CDA has not owned property. Higgins stated it has never been used that way here. Sparks questioned what CDA loans we have now? Trautman stated currently we have the 2017 that was recently issued to refund all the TIF #1 old CDA revenue bonds, which goes out to 2031. We have two CDA revenue bonds in TIF #2 that we are looking to pay both of those off this year. Sparks confirmed the CDA is limited to or primarily focused on the financial aspects of CDA loans, blight, and redevelopment. Johnson added housing is another area. Sparks asked if the Board has any desire for the Village to own and operate any housing? Sparks stated he does not. Fiene stated he has an interest in this, because there is a severe housing shortage in northcentral Wisconsin. He stated Marathon County is growing and in order to make Weston a desirable place to live, we should have some short-term interest with the CDA potentially holding and leasing/renting out housing properties. He feels this is not a permanent solution and in time the market will come to bear and more developers will come in. In the short term this is a need in central Wisconsin and we should bring in more younger individuals whose only draw back is where are they going to live. Sparks stated there is a difference between us owning and trying to manage and taking care of all of the leasing and he is not in favor of this. He feels we can adequately address the housing needs through the Plan Commission. Higgins stated the CDA can also do programs with current apartments, like those community block grant funds. This can be done in those reinvestment areas. This would be done by CDA through the housing component. Maloney is not in support of that and he feels there are a lot of private people coming in to play right now. Ziegler agrees with Maloney. Meinel stated there is federal money that comes through different communities and sets up different types of financing. Meinel stated this gave people the ability to stay in their homes until they move or pass away, and the family sells the house it gets repaid. You need to have someone on top of it. Knopf agrees. Maloney stated we have several private things coming in. Zeyghami feels we do not have the staff to do this, and pointed out White’s comment on hiring a management company, however, Zeyghami feels we should not get involved. Ermeling stated she would not want to get involved in that either. She stated the private industry is there for this. d. Discussion and possible action by Board of Trustees as to CDA Future Roles and Responsibilities. Zeyghami questioned if we need a CDA or not, although we have a loan out there, so the CDA has to exist. Mtg_BOT_200316_Consent_Minutes_CDA-BOT-PC Valerie Parker updated @ 3/12/2020 3:00 PM Page 5 200310200310 Maloney questioned in 2015, who’s direction was it to give CDA more duties? Higgins stated some of it had to do with the Camp Phillips Corridor. Some of the ways the CDA can be used is if we are going to implement the plans, either the CDA can purchase property or the Village can purchase property. She stated some of the lots there are blighted where you can’t do anything with for development unless you acquire several of them. She stated once those lots go up for sale, the Village or CDA (whichever has the capacity) could buy those lots and those lots could then be assembled and sold for development. Higgins pointed out that both of the TIF districts have become part of the Comprehensive Plan. She said it gets muddy when talking about the economic development part. She said PC tends to deal with the businesses and the overall village plan. She stated that she had questioned if all the plans really need to go before CDA, when it says they oversee the Business Parks. She commented on a meeting with a developer who is looking to do something within TIF #1, but outside the Business Parks, where does she take this, as PC would review the development, but CDA would review TIF financing. Though it was stated that TIF financing does not have to go to CDA. Sparks feels CDA is just dealing with blighted areas, redevelopment, and financing issues. The other things should go to Plan Commission. Higgins brought up development agreements. Maloney feels it should go to Planning. Trautman explained our future borrowing for the new municipal center, projections show we will be going up to 40% of our general borrowing, and this is where CDA would come in. Hagedorn stated in 2015, they were using TIF for CDA money to hire someone to recruit some of these big boxes. He feels these were purely the only reason that was put in there, being a way to pay for outside parties to recruit. White stated the Economic Development Committee had not met for years. The plan was when looking at reorganizing some of the committees to find a good fit for that, which it was determined the CDA was the best fit at the time. He discussed the payments made and how we were able to pay the loan off without any development in the TIF. He discussed how TIF debt can be used to pay for projects within the TIF. Donner stated in reviewing the condition of both TIF’s before meeting, and within a few years we can reconstruct Weston Avenue with no additional debt. Donner stated we may be looking project amendment in TIF #2. We will need to decide whether to close TIF #2 or take on some redevelopment projects, buying property, demolish old buildings, and sell land. He stated we will need to decide what to do with our current municipal site here and could involve CDA in this. Hagedorn stated the CDA should be used as a vehicle for G.O. financing. He does not feel CDA is in the mode to economic develop. Sparks stated those would go to Finance before CDA. Sparks stated from the Board, we should narrow the scope of what CDA is. He feels CDA should meet as needed to take care of CDA loan financing, blight, and redevelopment, everything else should go to Plan Commission. He stated anything looking for CDA financing would go to Finance and then CDA. Donner stated from what he understands here, we would be eliminating the other duties that have been assigned to CDA in the ordinance and go back to the State Statutes. Hooshang asked Higgins to write down the responsibilities of CDA and PC. Higgins stated she will do this for the Board meeting on Monday. She can work with Weinkauf to set up the ordinance. Maloney stated this should basically revert back to 2015. Higgins stated there was also some changes to meet State Statutes back in 2015. Motion by Maloney, second by Ermeling: to adopt roles as discussed. Yes Vote: 6 No Votes: 0 Abstain: 0 Not Voting:1 Result: PASS Mtg_BOT_200316_Consent_Minutes_CDA-BOT-PC Valerie Parker updated @ 3/12/2020 3:00 PM Page 6 200310200310  Member Voting Sparks, Wally YES Ermeling, Barb YES Fiene, Nathan YES Maloney, Mark YES Xiong, Yee Leng --- Zeyghami, Hooshang YES Ziegler, Jon YES 8. Camp Phillips Centre Project Update. Donner stated at last Monday’s Board meeting, a presentation by FDG was given. Their conclusion is to suspend all work on the retail portion of any development on that property. This is due to wetland impacts and impasse we had with the Army Corps. and the DNR to obtain a permit. Donner stated that FDG has indicated they are looking at other development possibilities in the Village. Donner stated we met with another developer who is looking at residential projects. He stated we are going forward with the Weston Avenue Corridor Plan to get projects done within TIF #1. Referred to the table in the packet listing the current cost status from the Camp Phillips Centre project. He explained our contract with ATC allows us to recover the deposit. He stated it is up to Board on when to request that refund. This will be on Monday’s Board agenda. Guerndt stated there is a rumor of a residential developer asking for TIF funds. Donner stated that all developers are asking for TIF money. Guerndt stated when a developer has to put in sidewalks, trees, storm sewer, curb & gutter, etc., and with housing costs there is more risk than reward. He feels municipalites are putting more requirements on developers as they don’t have the funds to put those in, and how developers would be willing to develop if money is kicked in towards those required improvements. Guerndt asked if FDG will be creating residential development and asking for TIF money to put in sewer and water. Zeyghami stated they can ask, but we may not agree. Maloney stated at the last Board meeting FDG plans to come back in, in a month or so to discuss possible projects. White stated our TIF is an industrial TIF, and there are restrictions on how you use it. He believes it can be used for industrial, commercial, and housing, but not only on housing. Johnson stated in an industrial TIF, there has to be 50% area zoned for industrial development. Maloney stated there are 4 or 5 potential housing developments, and none of those have TIF. Maloney feels if another development comes in and requests TIF, we would not offer it. Sparks stated FDG can come back, but Camp Phillips Centre is done. He stated FDG would have to go back through all steps and financial analysis as any others. Donner stated the answer we need to give people is “what is being asked that can’t be done but for providing you TIF assistance?”. Donner stated we are putting policies together, and technically TIF assistance is not supposed to be given unless the project can’t be done without it. Henschu from FDG stated that Ehlers had more or less said the project plan that FDG put forward in 2015 fit that financial test. They new our TIF had financial capacity, but that did not mean that the Village was going to throw it all at that project. Zeyghami stated that things are not the same now as they were in 2015, but we should give them the opportunity to come before us. 9. Reports: a. 2019 Building Permits Higgins stated this is just a link to the yearend building permits for 2019. b. January through February 2020 Building Permits Motion by Maloney, second by Jelmeland: to acknowledge Item B. Yes Vote: 6 No Votes: 0 Abstain: 0 Not Voting: 1 Result: PASS Mtg_BOT_200316_Consent_Minutes_CDA-BOT-PC Valerie Parker updated @ 3/12/2020 3:00 PM Page 7 200310200310  Member Voting Zeyghami, Hooshang YES Maloney, Mark YES Hagedorn, Todd YES Knopf, Michelle YES Jelmeland, David YES Marshall, Gayle --- Winkels, Stephen YES c. December 2019 through February 2020 New Business Occupancy Permit Issuance. Motion by Maloney, second by Knopf: to acknowledge Item C. Yes Vote: 6 No Votes: 0 Abstain: 0 Not Voting: 1 Result: PASS Member Voting Zeyghami, Hooshang YES Maloney, Mark YES Hagedorn, Todd YES Knopf, Michelle YES Jelmeland, David YES Marshall, Gayle --- Winkels, Stephen YES d. Vouchers from 02/10/2020 to 02/23/2020 Motion by Maloney, second by Jelmeland: to acknowledge Item d. Yes Vote: 6 No Votes: 0 Abstain: 0 Not Voting: 1 Result: PASS Member Voting Zeyghami, Hooshang YES Maloney, Mark YES Hagedorn, Todd YES Knopf, Michelle YES Jelmeland, David YES Marshall, Gayle --- Winkels, Stephen YES e. ED Coordinator Monthly Report. Chartrand stated he has been meeting with Weston businesses. He stated that most want more communication. He stated some have expressed to him that in past there was no explanations given and customer service was not good. He stated he is working towards mending bridges with the business community. Maloney feels the more contact the better. Zeyghami stated we need to find a way to communicate better. Chartrand stated he will draft a list of recommendations he received, rank them, and then will see where we can tweak in favor of businesses. Higgins stated some of the things brought up in the audit is to put together a business task force. She stated Chartrand will be highlighting businesses in our newsletter. Chartrand stated he has received support on the business task force. Mtg_BOT_200316_Consent_Minutes_CDA-BOT-PC Valerie Parker updated @ 3/12/2020 3:00 PM Page 8 200310200310 FUTURE ITEMS 10. Next meeting date of CDA: Tuesday, April 7, 2020 @ 5:00 p.m. – Regular Meeting. Higgins stated this will be as needed. 11. Next meeting of the BOT: Monday, April 6, 2020 @ 6:00 p.m. – Regular Meeting. Higgins clarified the next BOT meeting is on March 16th. 12. Next meeting of the PC: Monday, April 13, 2020 @ 6:00 p.m. – Regular Meeting. 13. Remarks from Staff and Board/Authority/Commission Members. Fiene stated his next open-door meeting is Saturday, March 21st, at Vino Latte, from 11am – 1pm. ADJOURNMENT 14. Adjournment of Plan Commission Motion by White, Second by Maloney: to adjourn at 6:52 p.m. 15. Adjournment of Board of Trustees Motion by Fiene, Second by Zeyghami: to adjourn at 6:52 p.m. 16. Adjournment of Community Development Authority Motion by Hagedorn, Second by Winkels: to adjourn at 6:52 p.m. Hooshang Zeyghami, CDA Chair and Trustee Jennifer Higgins, Director of Planning & Development Valerie Parker, Recording Secretary Mtg_BOT_200316_Consent_Minutes_CDA-BOT-PC Valerie Parker updated @ 3/12/2020 3:00 PM Page 9 200310200310