#09 Dissolve TIF District #15 (File Res. #2009-603)Economic Development Memorandum
Date: May 4, 2009
TO: City Council
FROM: Doug Venable, Director of Economic Development
SUBJECT: Action on a Resolution Dissolving Tax Incremental Finance District No. 15 (File
Resolution 2009- 603)
I. Summary
Wisconsin’s Tax Increment Finance (TIF) Law (Wisconsin Statutes 66.1105) requires
the dissolution of a TIF district when all of the TIF project costs have been recovered or no
later than 27 years after the date of creation. The City Council created the 27.1-acre TIF No.
15 in 1995 to facilitate the expansion of Freedom Plastics. In 2000, the Project Plan for TIF
No. 15 was amended to expand the boundary of the TIF district by approximately 1 acre. In
2006, the Project Plan was amended to permit incentive financing as a TIF expense.
All TIF No. 15 costs have been recovered and the district is ready to be dissolved. TIF
No. 15 was created with a base value of $1.69 million and now has a value of $5.51 million.
Over the life of the TIF District, the City invested $372,808 in TIF No. 15. The TIF district will
be dissolved with a positive fund balance of $ 367,600 which will be returned to the overlying
taxing jurisdictions in the same proportion that they contributed to the TIF district.
II. Recommendation
The Community Development Department recommends that the Council adopt
Resolution 2009 - 603, dissolving Tax Increment Finance District No. 15.
III. Suggested Motion
I move to adopt file Resolution No. 2009 - 603 dissolving TIF No. 15.
IV. City Manager Recommendation
The City Manager concurs with staff’s recommendation.
II. Background and Project Summary
TIF No. 15 was created by the City Council in 1995 to facilitate the continued
expansion of Freedom Plastics on Arch St. The TIF No. 15 Project Plan included funds for
transportation and utility improvements, industrial land development, landscaping, incentive
financing, and administrative costs. Over the life of the TIF District, the City invested
$292,169 in capital improvements, compared to a Project Plan budget of $395,980. Interest
and financing charges totaled $67,198. The City also spent $17,034 in administrative costs,
compared to a Project Plan budget of $20,020.
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Economic Development Department Box 5005 Janesville, WI 53547-5005 755-3180
Dissolution of TIF No. 15
May 4, 2009
Page 2
The primary development in TIF No. 15 was a 70,000 SF expansion by Freedom
Plastics with an estimated value of $1.2 million. Combined with the value of the existing
building, the after construction value of Freedom Plastics’ facilities was to exceed $2.5
million. For 2008, Freedom Plastics’ facility had an equalized property valuation of
$5,510,700 and generated approximately $83,000 in TIF incremental revenues.
The TIF Agreement with Freedom Plastics also called for the Company to expand
employment by Twelve (12) workers to 137 workers by January, 1997. The company
employed 150 workers in early 1997.
In 2006, the City Council approved a $50,000 TIF Development Loan to help with the
costs of constructing an employee training center. The loan was amortized over 10 years at
5.0% interest, but debt service payments were forgivable if Freedom Plastics maintained 150
or more workers over the life of the loan.
The rising cost of petroleum products in 2008 coupled with the rapid decline in
residential construction dramatically affected Freedom Plastics’ business model. The
company was no longer able to service debt, and earlier this year, the Janesville assets were
sold to two different plastics products producers. At the time of sale, $42,946.77 of the
$50,000 was repaid to the City and added to the funds in TIF No. 15. The other $7,053.23 of
the loan was forgiven, since Freedom Plastics had met its employment commitments for the
first 18 months of the TIF development loan.
In spite of the unfortunate demise of Freedom Plastics in the current uncertain
economic times, TIF No. 15 was successful at retaining a local manufacturing employer and
facilitating its growth. Upon dissolution, $3.82 million in new property tax base will be
returned to the tax rolls, and $367,600 in surplus TIF funds will be returned to the taxing
jurisdictions.
III. Financial Summary
Attached Table One summarizes the revenues and expenditures for TIF No. 15 from
the date of creation through April 30, 2009. TIF revenues exceeded TIF costs by $367,600
so the excess TIF funds will be returned to the participating taxing jurisdictions in the same
proportion that they were contributed. The surplus funds will be disbursed as follows:
County of Rock: $ 91,904
Janesville School District: $143,702
Blackhawk Technical College $26,280
City of Janesville $ 92,675
Janesville Public Library $ 13,039
Total Excess Funds $ 367,600
.
Dissolution of TIF No. 15
May 4, 2009
Page 3
Douglas Venable
cc: Jacob J. Winzenz. Director of Administrative Services/Assistant City Manager
Attachments: Resolution 2009 - 603
TIF No. 15 Map
TIF No. 15 Sources and Uses Statement
Resolution No. 2009 – 603
A Resolution Authorizing the Dissolution of Tax Increment Finance District No. 15
WHEREAS, the Common Council of the City of Janesville, pursuant to Wisconsin’s Tax Increment Law
(Section 66.1105 Wisconsin Statutes), created Tax Increment Finance District No. 15 (TIF No. 15) by
adopting Resolution No. 95 - 1877 on March 27, 1995; and
WHEREAS, the development projects contemplated in the TIF No. 15 Project Plan are completed and
all of the City’s costs associated with TIF No. 15 have been fully recovered through the positive tax
increments on new property value created within TIF No. 15; and
WHEREAS, TIF No. 15 has received tax increments in excess of project costs and the City wishes to
return these funds proportionally to the local taxing jurisdictions, which have contributed tax revenues to
TIF No. 15;
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Janesville, that TIF
No. 15 is hereby terminated and dissolved and that the City Clerk-Treasurer is hereby directed to notify
the Wisconsin Department of Revenue of this dissolution according to Section 66.1105 (8), Wisconsin
Statutes.
BE IT FURTHER RESOLVED, that the excess funds from TIF No. 15 held by the City of Janesville shall
be proportionally distributed to each contributing tax jurisdiction as follows:
County of Rock: $ 91,904
Janesville School District: $ 143,702
Blackhawk Technical College $ 26,280
City of Janesville $ 92,675
Janesville Public Library $ 13,039
Total Excess Funds $ 367,600
ADOPTED:
Motion by:
Second by:
APPROVED:
Councilmember Aye Nay Pass Absent
Brunner
McDonald
Eric J. Levitt, City Manager
Perrotto
Rashkin
ATTEST:
Steeber
Truman
Voskuil
Jean Ann Wulf, City Clerk-Treasurer
APPROVED AS TO FORM:
City Attorney
Proposed by: City Manager
Prepared by: Economic Development Director
CITY OF JANESVILLE
TAX INCREMENTAL DISTRICT NO. 15
HISTORICAL SUMMARY OF SOURCES, USES, AND STATUS OF FUNDS
From Date of Creation Through April 30, 2009
1995199619971998199920002001
SOURCES OF FUNDS
Tax increment$ -$ -$ 32,498$ 37,076$ 40,081$ 37,107$ 39,019
Computer Exemption Increment - - - - - 2,827 4,877
Investment income 5,836 4,200 - - - - -
Special assessments - - - - - - -
Intergovernmental - - - - - - -
Sale of property - - - - - - -
Miscellanous revenues - - - - - - -
Guarantee Payment - - 3,201 - - - -
Advances from other funds - - - - - - -
210,000 - - - - - -
Proceeds of long-term debt
215,836 4,200 35,699 37,076 40,081 39,934 43,896
Total Sources
USES OF FUNDS
Capital expenditures - 231,604 6,958 - - 3,582 -
Administrative expenditures 4,964 251 436 179 92 3,645 585
Refund to overlying district - - - - - - -
Interest on advances - 444 1,608 1,325 817 568 173
Transfer to other funds - - - - - - -
Debt issue costs 729 - 275 - - - 305
Interest on long-term debt - 11,870 9,965 8,845 7,655 6,406 5,213
- - 20,000 20,000 22,500 22,500 25,000
Principal on long-term debt
5,693 244,169 39,242 30,349 31,064 36,701 31,276
Total Uses
CITY OF JANESVILLE
TAX INCREMENTAL DISTRICT NO. 15
HISTORICAL SUMMARY OF SOURCES, USES, AND STATUS OF FUNDS
From Date of Creation Through April 30, 2009
Project
Plan
20022003200420052006200720082009TotalsEstimate
SOURCES OF FUNDS
Tax increment$ 48,430$ 46,694$ 44,575$ 49,730$ 45,227$ 123,772$ -$ 83,282$ 627,491 $ 483,198
Computer Exemption Increment 5,415 3,514 2,195 4,785 3,559 4,394 6,475 - 38,041
-
Investment income 298 436 706 2,608 6,464 6,771 4,535 467 32,321 -
Special assessments - - - - - - - -
- -
Intergovernmental - - - - - - - -
- -
Sale of property - - - - - - - -
- -
Miscellanous revenues - - - - - - - 42,947 42,947
-
Guarantee Payment - - - - - - - - 3,201
-
Advances from other funds - - - - - - 77,783 - 77,783
-
- - - - - - - - 210,000 210,000
Proceeds of long-term debt
54,143 50,644 47,476 57,123 55,250 134,937 88,793 126,696 1,031,784 693,198
Total Sources
USES OF FUNDS
Capital expenditures - - - - 25 50,000 - - 292,169
395,980
Administrative expenditures 26 28 180 120 2,750 135 50 3,593 17,034 20,020
Refund to overlying district - - - - - - - 367,600 367,600
-
Interest on advances - - - - - - - - 4,935
6,244
Transfer to other funds - - - - - 77,783 - - 77,783
-
Debt issue costs - - - - - - - - 1,309
-
Interest on long-term debt 6,050 2,750 1,650 550 - - - - 60,954
60,954
25,000 25,000 25,000 25,000 - - - - 210,000 210,000
Principal on long-term debt
31,076 27,778 26,830 25,670 2,775 127,918 50 371,193 1,031,784 693,198
Total Uses
FUND BALANCE
$ -0-
April 30, 2009