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Full Agenda Packet CITY OF JANESVILLE CITY COUNCIL MEETING AGENDA MONDAY, August 10, 2009 7:00 P.M. 1. Call to Order and Pledge of Allegiance. 2. Roll Call. 3. Minutes of City Council meetings: “C” A. Regular meeting of July 27, 2009. B.Closed session of August 25, 2008. C.Closed session of June 12, 2009. D.Closed session of June 15, 2009. 4. Licenses; and Recommendations of the Alcohol License Advisory Committee. (Refer to separate agenda.) “C” OLD BUSINESS 1. Requests and comments from the public regarding items on the Agenda not requiring a public hearing. 2. Requests and comments from the public on matters which can be affected by Council action. 3. Public hearing and action on a final resolution for sewer and water assessments. (File Res. No. 2009-628) 4. Public hearing and action on a proposed resolution approving proposed amendment no. 2 to the project plan for Tax Increment Finance District No. 22. (File Res. No. 2009-621) ----------------------- “C” – This designation indicates an item that the City Council will take up under a Consent Agenda. City Council Agenda – August 10, 2009 Page 2 NEW BUSINESS 1. Award of Contracts C2009-19 (South River Road greenbelt) for Public Works Bid Schedule “F” – 2009; and C2009-20 (water and sewer system improvements – water main insulation & Riverview sewer) and C2009-21 (salt storage shed) for Public Works Bid Schedule “G” – 2009. 2. Action on a proposed resolution granting a utility easement on City property located at the southwest corner of North Parker Drive and Wall Street (downtown parking garage). (File Res. No. 2009-625) 3. Discussion and direction to staff on proceeding to bid an East Janesville water tower and related large diameter water mains. 4. Matters not on the Agenda. 5. Consideration of a motion to convene into closed session pursuant to Wisconsin Statute Section 19.85 (1) (e), for the purpose of deliberating or negotiating the purchasing of public properties, the investing of public funds, or conducting other specified public business, whenever competitive or bargaining reasons require a closed session, specifically setting the negotiation/bargaining terms and conditions for one or more TIF development agreements for TIF 22 and TIF 26. PROCEEDINGS OF THE CITY COUNCIL CITY OF JANESVILLE, WISCONSIN REGULAR MEETING JULY 27, 2009 VOL. 60 NO. 12 Regular meeting of the City Council of the City of Janesville held in the Municipal Building on July 27, 2009. The meeting was called to order by Council President Truman at 7:00 PM. Council President Truman led the Council in the Pledge of Allegiance. Present: Council President Truman, Councilmembers Brunner, McDonald, Perrotto, Rashkin, and Voskuil. Councilmember Steeber was absent. CONSENT AGENDA Minutes of the regular meeting of July 13, 2009 Licenses and Recommendations of the Alcohol License Advisory Committee Financial statement for the month of June 2009 Council President Truman stated the application of a bartender’s license for Brittany Tesch would be removed from the consent agenda and the remaining items would be approved if there were no objections. There were none. Ms. Tesch, Whitewater, WI, addressed the Council concerning her bartender’s application. Councilmember Rashkin moved to deny said application, seconded by Councilmember Brunner and passed unanimously. OLD BUSINESS 1. Requests and comments from the public regarding items on the agenda not requiring a public hearing. Andreah Briarmoon, 339 S. Locust St., expressed her concerns about adding 185 acres to TIF #26 and the associated costs to the City (Old Business #3). 2. Requests and comments from the public on matters which can be affected by Council action. Tom Brien, 807 Kellogg Ave., stated the crosswalk signals are not working at 5-points intersection; suggested police officers report traffic signal outages to City Services and suggested the continuation of annual bike rides with administrative staff, representatives from non-profit foundations, and media. Al Lembrich, 541 Miller Ave., suggested using safe route to schools grant money for embedded LED super flashing strobe lights at busy crosswalks. Andreah Briarmoon, 339 S. Locust St., suggested changes in how we handle code violations. Joe Hoppenjan, 1112 Burbank Ave., stated Council should focus on economic development. 3. Action on a proposed resolution approving amendment #3 to the project plan for TIF District No. 26. Councilmember Rashkin moved adopt said resolution, seconded by Councilmember Voskuil and passed unanimously. (File Res. No. 2009-617) NEW BUSINESS 1. Action on a proposed preliminary resolution for sewer and water assessments and schedule a public hearing for the final resolution. Councilmember Brunner moved to adopt said preliminary resolution and to schedule a public hearing on August 10, 2009 for the final resolution, seconded by Councilmember Rashkin and passed unanimously. (File Res. No. 2009-627) 2. Action on a proposed resolution releasing the deed restrictions imposed by the City of Janesville on 1114 South Cherry Street. Councilmember McDonald moved to adopt said resolution, seconded by Councilmember Voskuil and passed unanimously. Councilmember Brunner requested staff contact the potential buyer of this property and provide him with the lot restrictions. (File Res. No. 626) 3. Council President Truman scheduled a special Council Meeting to discuss the Tallman House on August 27, 2009 at 6:00 PM. 4. Matters not on the agenda. Councilmember Perrotto requested that staff review the recent storm sewer work on Court St. and make appropriate repairs, if necessary. Councilmember McDonald stated a pine tree at S. Ringold St. between Racine St. and Gray St. needs trimming; suggested more tree trimming along truck routes. Councilmember Brunner stated many traffic signs are obstructed and suggested the Police Department report them to City Services; commended Wisconsin Professional Police Association for sponsoring the State Golf Tournament in Janesville; expressed his concern on increased truck traffic in downtown. Council President Truman commented the City needs to do more tree trimming work on truck routes and other areas in the City; identified the following properties that may have code violations: 340 N. Franklin St., 1608 Grant St., Johnson St. Storage Building, 921McKinley St. 5. Councilmember McDonald moved to adjourn, seconded by Councilmember Voskuil and passed unanimously. There being no further business, Council adjourned at 8:21PM. These minutes are not official until approved by the City Council. Jean Ann Wulf Clerk-Treasurer JANESVILLE CITY COUNCIL LICENSE AGENDA 8/10/2009 RECOMMENDED A. ELECTRICIANS – ORIGINAL Lance A. Baior 4034 Ruger Ave Tim Lins W13969 Selwood Dr., Prairie du Sac, WI Michael J. Maier 820 Elizabeth St., Baraboo, WI Joel B. Samuelson 20085 W. Rustic Ridge Dr., New Berlin, WI B. SIGN ERECTOR – ORIGINAL SUN VISTA PROPERTIES, LLC 77 Spring Creek Rd., Barrington Hills, IL DEPARTMENT OF PUBLIC WORKS MEMORANDUM 30 July 2009 TO: City Council FROM: Mike Payne, Engineering Manager SUBJECT: PUBLIC HEARING AND ACTION ON A PROPOSED RESOLUTION FOR SEWER AND WATER ASSESSMENTS (FILE RES. NO. 2009-628) Summary An annexation of property owned by Rock County near the airport results in the need for Council action related to sewer and water assessments for improvements previously installed to serve the Rock County Airport. Payment of sewer and water assessments for most of the property owned by Rock County was addressed in the airport annexation agreement. However, the two affected County parcels were not included in that agreement and were also located outside the City of Janesville when the improvements were constructed. Therefore, the City of Janesville was not able to assess these properties at the time the improvements were installed. The affected parcels have now been annexed to the City of Janesville and this resolution levies special assessments related to sewer and water that was previously installed. The total amount for all assessments at the two parcels is $14,124.27. Rock County has requested a permanent non-use deferment and the Engineering Division recommends a 10-year deferment; or until the County requests connection to the public utilities. The Council approved Preliminary Resolution 2009-627 at the July 27 Council meeting. Discussion The resolution includes sanitary sewer and water main abutting undeveloped County owned property. The water main adjacent to the parcel at USH 51 and Knilans Road was installed in 1996. The water main and sanitary sewer adjacent to the parcel at USH 51 approximately 1 mile south of Knilans Road was installed in 2004. Both parcels are undeveloped at this time and are not connected to the public utilities. Attached is a letter from the County requesting a non-use deferment. Council Policy No. 63, IV permits a non-use deferment for a special assessment levied against a property while no use of the improvement is made or the property is undeveloped. Interest does not accrue on these parcels while the assessment is deferred. The granting of a non-use deferment is at the discretion of the Council and in this case the request is consistent with past practice. Recommendation The Engineering Division recommends a 10-year non-use deferment, which is consistent with the Council Policy and that following the public hearing, Council adopt Final Resolution 2009-628. \\petey\cojhome\agenda review\approved agenda items\2009\8-10-2009\rock county sewer & water - cover memo.doc City Manager Recommendation I concur with the Engineering Division’s recommendation. Suggested Motion I move to adopt Final Resolution No. 2009-628 and grant a 10 year non-use deferment for the property owner. Attachments: - Location Map - Council Policy No. 63, Parts IV - June 17, 2009 County Request Letter cc: Eric Levitt Jacob J. Winzenz \\petey\cojhome\agenda review\approved agenda items\2009\8-10-2009\rock county sewer & water - cover memo.doc ROCK COUNTY SEWER & WATER ASSESSMENT – 2009 10 AUGUST 2009 RESOLUTION NO. 2009-628 PAGE (1) OF (4) FINAL RESOLUTION FINAL RESOLUTION DECLARING INTENT TO EXERCISE SPECIAL ASSESSMENT POWER UNDER SECTION 66.0703, WISCONSIN STATUTES AND REQUIRING INSTALLATION OF WATER, SEWER, AND GAS SERVICE LATERALS AND PROVIDING FOR ASSESSMENT OF COSTS UNDER SECTION 66.0911, WISCONSIN STATUTES. WHEREAS, the Common Council of the City of Janesville Wisconsin, held a Public Hearing in the Council Chambers in the Municipal Building on the 10th day of August, 2009 for the purpose of hearing all interested persons concerning the Preliminary Resolution and Report of the City Engineer on the proposed improvements of the following streets, I. SANITARY SEWER, WATER MAIN, AND SEWER AND WATER LATERALS (FOR ASSESSMENT PURPOSES ONLY) All Property Fronting Upon Each Side Of From To USH 51(West Side) 50’ South of Knilans Road 250’ North of Knilans Road USH 51 (East Side) 5,500’ South of Knilans Road 5,900’ South of Knilans Road and has heard all persons desiring audience at such hearing; NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of Janesville as follows: 1. That the Report of the City Engineer pertaining to the construction of the above described public improvements, including plans therefore, as modified, is hereby adopted and approved and the grades of streets and alleys listed in said report are hereby adopted and established. 2. That the above-described public improvements be carried out in accordance with the Report of the City Engineer as finally approved. \\Petey\COJHome\Agenda Review\Approved Agenda Items\2009\8-10-2009\Rock County Sewer & Water - Res 2009-628.doc ROCK COUNTY SEWER & WATER ASSESSMENT – 2009 10 AUGUST 2009 FINAL RESOLUTION NO. 2009-628 PAGE (2) OF (4) 3. That the City anticipates that monies, other than the proceeds of any outstanding debt of the City, will be expended by the City with respect to such capital improvements. The City reasonably expects to be reimbursed for such expenditures with proceeds of its debt. The maximum principal amount of debt expected to be issued for the reimbursement of such expenditures is $5,000,000. No funds from sources other than the debt referred to above are, or are expected to be, reserved, allocated on a long-term basis, or otherwise set aside by the City or any entity controlled by the City pursuant to its budget or financial policies with respect to the Projects. This is consistent with the budgetary and financial circumstances of the City. Copies of this Resolution shall be made available for public inspection in the manner required by law. This Resolution is a declaration of official intent under Treasury Regulation Section 1.150-2. 4. That the payment for said improvements be made by assessing the cost to the property benefited as indicated in said Report. 5. That the property against which the assessments are proposed is benefited and the assessments shown on the Report, as modified, are true and current and are hereby confirmed, the improvement constituting an exercise of police powers. 6. That the assessments for all projects except laterals are included in said report and any interested property owner shall be entitled to object to each assessment except laterals for any purpose or purposes. 7. That the actual levy of the special assessment shall take place at the time of the adoption of the final public works resolution by the Common Council of the City of Janesville concerning these improvements. The property owner(s) in Rock Township against whose property such special assessment shall be levied under and by this Resolution shall have their payment obligation deferred, without interest accruing thereon, until such time as their specific property is annexed or connects to such improvement(s), in which event the special assessment shall be due and payable either in full or in five (5) annual installment payments, the latter with interest accruing thereon from the date of annexation or connection. This method of payment shall be approved and ratified by the Board of the Town of Rock in accord with Section 66.0707 of the Wisconsin Statutes, and such other applicable provisions of law and intergovernmental agreement(s), and shall act, once so ratified by the Rock Town Board, as a levied special assessment against such abutting and/or benefiting properties in the Town of Rock. This levy and special assessment payment provisions are in accord with the City of Janesville/Town of Rock Cooperative Boundary Plan, City of Janesville Common Council Special Assessment Policy No. 63, related pertinent provisions, and the Town of Rock/Janesville Highway 11 Bypass Agreement. The special assessment levy and payments shall be made by the abutting, benefiting and affected property owners in accord with the LaPrairie and Rock Township City of Janesville Highway 11 Bypass Agreement, as well as the Rock/Janesville Cooperative Boundary Plan. This provision applies only to the properties located in the Town of Rock. \\Petey\COJHome\Agenda Review\Approved Agenda Items\2009\8-10-2009\Rock County Sewer & Water - Res 2009-628.doc ROCK COUNTY SEWER & WATER ASSESSMENT – 2009 10 AUGUST 2009 FINAL RESOLUTION NO. 2009-628 PAGE (3) OF (4) 8. Excluding any assessment for the installation of sewer and water service pipes (lateral) and preliminary grading and graveling, the assessment against any parcel owned by an individual property owner may be (a) paid in cash upon completion of the work; or (b) paid with the taxes the first year following completion of the work; or (c) at the election of the property owner, spread over a period of five (5) years with interest at seven percent (7%) per annum on the unpaid balance. The first installment on the five-year plan shall include one-fifth of the principal with the interest for November and December, on the unpaid portion, and shall be so entered in the Tax Roll. Each of the subsequent installments shall be entered in each of the annual tax rolls thereafter until all are collected. Deferred payment on the aforementioned installments shall bear interest at seven percent (7%) per annum. The assessments, as outlined above, pertain only to said individual property owners. The assessments against all parcels of land owned by others, which include subdividers, land developers, speculative builders, or owners of several or more lots on the same street or in the same area will be billed upon completion of the work after which interest at seven percent (7%) per annum will be charged from the last day of the month of the billing. The assessments for said other owners may be: (a) paid in cash upon completion of the work in the month of billing without interest; or (b) paid with the taxes the first year following the completion of the work, the amount to be entered in the tax roll shall include the unpaid principal with interest through the end of December in the year so entered; or, (c) at the election of the property owner and with the approval of the Committee of Public Works, spread over a period of five (5) years with interest at seven percent (7%) per annum on the unpaid balance. The first installment on the five-year plan shall include one-fifth of the principal with interest through the end of December in the year so entered. Each of the subsequent installments shall be entered on each of the annual tax rolls thereafter until all are collected. Deferred payment on the aforementioned installments shall bear interest at seven percent (7%). 9. That the sewer and water service pipes (laterals) be constructed and installed from the mains to a water shut-off box between the curb line and property line of each lot fronting thereon that is not presently served. When the record of the cost of such construction has been filed in the City Clerk's Office, he is directed to enter such cost of sewer and water service pipes on the Tax Roll as charge against the lot or parcel served, and to notify the owner of each lot of the amount of such charge against his premises. Such charge shall constitute a lien upon the premises until paid, and must be paid in cash or with the taxes in the year following the completion of the construction. The charges for grading and graveling of listed streets shall constitute a lien upon said premises until paid and must be paid in cash or with the taxes in the year following the completion of the construction. 10. The City Clerk is directed to publish this Resolution in The Janesville Gazette, the official newspaper of the City. \\Petey\COJHome\Agenda Review\Approved Agenda Items\2009\8-10-2009\Rock County Sewer & Water - Res 2009-628.doc ROCK COUNTY SEWER & WATER ASSESSMENT – 2009 10 AUGUST 2009 FINAL RESOLUTION NO. 2009-628 PAGE (4) OF (4) 11. The Clerk is further directed to mail a copy of this Resolution together with an Election to Pay Notice to every property owner whose name appears on the assessment roll whose post office address is known or can with reasonable diligence be ascertained. ADOPTED: MOTION BY: SECOND BY: APPROVED: COUNCILMEMBER AYE NAY PASS ABSENT BRUNNER Eric J. Levitt, City Manager McDONALD ATTEST: PERROTTO RASHKIN Jean Ann Wulf, City Clerk-Treasurer STEEBER TRUMAN APPROVED AS TO FORM: VOSKUIL City Attorney Proposed by: Engineering Division Prepared by: Engineering Division \\Petey\COJHome\Agenda Review\Approved Agenda Items\2009\8-10-2009\Rock County Sewer & Water - Res 2009-628.doc Economic Development Memorandum Date: August 4, 2009 TO: Janesville City Council FROM: Douglas Venable, Director of Economic Development SUBJECT: Action on a Resolution Approving Amendment No. 2 to the Project Plan for Tax Increment Finance District No. 22 (File Res. No. 2009-621) I. Summary City staff is proposing a second amendment to TIF No. 22 to add approximately 57 acres of existing industrial land and to authorize the expenditure of TIF funds on projects located within ½ mile of the TIF district. The Plan Commission met on August 3, 2009 and recommended that the Council approve proposed Amendment No. 2 to the Project Plan for TIF No. 22. II. Recommendation The City of Janesville has successfully used tax increment financing as an economic development tool. With the closing of numerous businesses in Rock County in the past year and the poor state of the national economy, Janesville needs to remain aggressive in pursuing all development opportunities. The proposed TIF No. 22 boundary amendment will add a rail served industrial site and allow for continued industrial development. Staff recommends that the Council adopt Resolution 2009 – 621, approving Amendment No. 2 to the Project Plan for TIF No. 22. If this Resolution passes, Amendment No. 2 will go to the Joint Review Board for its approval and then to the Department of Revenue for certification. City Manager Recommendation I concur with the Economic Development Director’s recommendation. III. Suggested Motion Move to adopt Resolution No. 2009 – 621, approving Amendment No. 2 to TIF No. 22 is recommended. ??? Economic Development Department Box 5005 Janesville, WI 53547-5005 755-3180 TIF 22 Amendment August 4, 2009 Page 2 IV. TIF Creation Procedures Wisconsin’s Tax Increment Law (§ 66.1105) sets forth a specific procedure for amending the boundary of a TIF district. The Plan Commission must hold a public hearing, preceded by a Class 2 public notice. The required hearing was held on August 3, 2009. The Plan Commission recommended that the City Council approve the proposed TIF boundary and Project Plan amendment. If the Council approves Amendment No. 2 to the TIF No. 22 Project Plan, then the Amendment will be considered by a Joint Review Board composed of representatives from the City, the School District, the County, the Vocational District, and a fifth member chosen at large V. Amendment No. 2 toTIF No. 22 TIF No. 22 was developed as an ‘industrial TIF district’ to stimulate the expansion and development of an emerging industrial area centered along Beloit Ave. and State Highway 11. The construction of the 700,000 SF Helgesen building, the 490,000 SF Deere warehouse; and the 250,000 SF Helgesen Spec Building have all been helped by the development of the industrial park and incentives provided by TIF No. 22. Proposed Amendment No. 2 will modify the TIF No. 22 boundary to include 57 additional acres of industrial land on the east side of Beloit Ave. This land is improved by a 140,000 SF industrial building currently leased by CRT Processing. Also included is a vacant industrial site and buildings on Burbank Ave., formerly owned by Quality Wood Treating. The City has a shortage of rail served industrial properties and the Quality Wood site is served by a spur off of the UP railroad. This site may need TIF incentives to attract a new user. Proposed Amendment No. 2 also includes the Plan changes and budget to allow for the use of TIF funds on development projects located within ½ mile of the boundary for TIF No. 22. This type of TIF expenditure was authorized by recent changes to State statutes and the City has been amending its TIF plans to include this type of spending. The flexibility to accommodate projects that are located within ½ mile of an existing TIF district enhances the City’s development efforts and helps avoid the need to create new TIF districts for projects not located within an existing TIF district. TIF 22 Amendment August 4, 2009 Page 3 The amended budget for TIF No. 22 includes funding for land acquisition, transportation improvements, utility costs, street lighting and landscaping, marketing and financial incentives, and administration. The total budget for TIF No. 22 is $14,396,618. Borrowing costs and interfund interest charges are estimated to add an additional $4,597,860 for a total TIF No. 22 budget of $19,030,944. Between 1999 and 2009, 1,440,000 SF of new industrial space has been constructed creating $48,825,200 in TIF incremental value. This value generates approximately $1.0 million in TIF revenues annually which are paying off TIF costs. Over the maximum life of TIF No. 22, the City estimates TIF revenue will total $21,811,400 exceeding TIF costs by $2,780,455. In accordance with City policy, the expenditure of any TIF funds would be linked to a specific development agreement which assures the availability of the property value and tax increments the City will need in order to recover its TIF costs. Douglas Venable Attachments: Plan Commission Report Amendment No. 2 - TIF No. 22 Project Plan Resolution 2009 – 621 Cc Eric Levitt, City Manager Jay Winzenz, Director of Administrative Services Community Development Department Memorandum August 4, 2009 TO: Janesville City Council FROM: Al Hulick, Development Specialist SUBJECT: Amendment No. 2 to the Project Plan for Tax Increment Finance District No. 22. I. RECOMMENDATION The Plan Commission and Community Development Department recommends that following a public hearing, the City Council support a motion to find the proposed amendment No. 2 to the Project Plan for Tax Increment Finance District No. 22 consistent with established City Plans. II. REQUEST TIF No. 22 was created in 1999 as an industrial TIF district to stimulate the expansion and development of an emerging industrial area centered along Beloit Avenue and STH 11. The construction of the 700,000 SF Helgesen building, the 490,000 SF John Deere warehouse; and the 250,000 SF Helgesen Spec Building have all been helped by the development of the industrial park and incentives provided by TIF No. 22. III. ANALYSIS A. Attached to this memorandum is a copy of the TIF District No. 22 Project Plan Amendment No. 2. The amended project plan has been prepared to reflect the proposed adjustments to the original plan approved. New text and figures are shown in highlighted format while obsolete data is presented in strike-out fashion. B. Proposed Amendment No. 2 will modify the TIF No. 22 boundary to include 57 additional acres of industrial land on the east side of Beloit Ave. This land is improved by a 140,000 SF industrial building currently leased by CRT Processing. Also included is a vacant industrial site on Burbank Ave. with access to rail service. The City has a shortage of rail served industrial properties and it is important to have TIF incentives available to market and improve this rail-served industrial site. Finally, Amendment 2 includes the now vacant Quality Wood Treatment Property. This site may need TIF incentives to attract a new user. C. Proposed Amendment No. 2 also includes the Plan changes and budget to allow for the use of TIF funds on development projects located within ½ mile of the boundary for TIF No. 22. This type of TIF expenditure was authorized by recent changes to State statutes and the City has been amending its TIF plans to include this type of spending. The flexibility to accommodate projects that are located within ½ mile of an existing TIF district enhances the City’s development efforts and helps avoid the need to create new TIF districts for projects not located within an existing TIF district. D. In accordance with City policy, the expenditure of any TIF funds would be linked to a specific development agreement which assures the availability of the property value and tax increments the City will need in order to recover its TIF costs. E. The Community Development Department has reviewed the amended Project Plan for TIF 22 against City plans and policies including the 2008 Comprehensive Plan Update, Future Land Use Map, and the City Council’s Economic Development Policy. The Project Plan for TIF 22 includes the following objectives: ? Promote industry retention, expansion, and attraction through the development of a new fully improved industrial park, thereby creating new jobs and increased tax base. ? Provide appropriate financial incentives to encourage industrial expansion projects within the TIF district and for projects located within ½ mile of the TIF district. ? Reduce the financial risk to the taxpayer by timing the implementation of the Project Plan with the creation of additional property value through industry expansions. ? Generate sufficient new property tax increments within eight (8) to ten (10) years from each specific development project within the TIF District to fully repay the City's TIF project expenditures associated with the development project. F. The City of Janesville has successfully used tax increment financing as an economic development tool. With the closing of numerous businesses in Rock County in the past year and the poor state of the national economy, Janesville needs to remain aggressive in pursuing all development opportunities. The proposed TIF No. 22 boundary amendment will add a rail served industrial site and allow for continued industrial development. G. The Community Development Department finds the proposed Amendment No. 2 to TIF District No. 22 to be consistent with the above stated City plans and policies. IV. PLAN COMMISSION ACTION – 3 AUGUST 2009 Al Hulick, Development Specialist, presented the written staff report. Commissioner Werner asked if there was any interest in the property east of CRT Processing within the proposed amended boundary. Hulick responded that there was none at this time. Hulick stated that the property is a vacant industrial rail served property. Hulick explained that the City currently lacks industrial rail served sites which is primarily why this property has been included in the amended TIF Boundary. Commissioner Werner asked if there was any other redevelopment interest within the existing TIF and/or proposed amended boundary. Hulick indicated that he was not aware of any at this time. The public hearing was opened and no one appeared to speak regarding this item. The public hearing was closed. A motion was made by Commissioner Werner with a second by Commissioner Perrotto to find the proposed amendment No. 2 to the Project Plan for Tax Increment Finance District No. 22 consistent with established City Plans. cc: Brad Cantrell Duane Cherek TAX INCREMENT FINANCE DISTRICT No. 22 PROJECT PLAN Adopted September 27, 1999 AMENDMENT NO. 1 - October 25, 2004 AMENDMENT NO. 2 – August 10, 2009 Prepared By: Economic Development Agency Finance Division City of Janesville, Wisconsin 18 N. Jackson St. Janesville, WI 53545 CITY OF JANESVILLE TAX INCREMENT FINANCE DISTRICT No. 22 TABLE OF CONTENTS I. WISCONSIN TAX INCREMENT LAW AND PROCESS .................... 1 II. TIF No. 22 PLAN OBJECTIVES ..................................................... 2 III. BOUNDARIES OF TIF No. 22 .................................................... 3 IV. EXISTING ZONING AND PROPOSED LAND USES ........................ 4 5 V. PROPOSED TIF PUBLIC WORKS PROJECTS AND ....................... 7 8 IMPROVEMENTS VI. DETAILED LIST OF ESTIMATED PROJECT COSTS ......................10 12 VII. ECONOMIC FEASIBILITY AND METHODS OF FINANCING ...........14 16 VIII. PROPOSED CHANGES IN ORDINANCES, CODES, & PLANS .......19 22 IX. LIST OF ESTIMATED NON-PROJECT COSTS ................................19 23 X. METHODS FOR RELOCATION OF DISPLACED PERSONS ...........20 23 XI. PROMOTION OF THE ORDERLY DEVELOPMENT OF .................20 24 THE CITY MAPS 1. Map 1 TIF No. 22 Existing Land Use and Zoning .............................. 6 2. Map 2 TIF No. 22 Improvement Plan ................................................. 8 9 3. Map 3 TIF No. 22 – ½ Mile Boundary ................................................13 LEGAL AND PROCEDURAL 1. TIF No. 22 Plan Adoption and Creation Resolutions 2. Legal Opinion From City Attorney on Project Plan 3. Joint Review Board Resolution City of Janesville Tax Increment Finance District No. 22 Project Plan I. WISCONSIN TAX INCREMENT LAW AND PROCESS Under Wisconsin Statutes Section 66.1101 (1), the State declared that the policy of the State is "to encourage and promote the development of industry to provide greater employment opportunities and to broaden the State's tax base to reduce the tax burden of residents and homeowners." Locally, the City of Janesville has adopted an Economic Development Policy designed to "diversify the economic base of the City through the retention and expansion of existing businesses ..." In addition, the City seeks to attract new industries through the creation of fully improved industrial parks. One tool designed to help stimulate new development is "Tax Increment Financing (TIF)". When the State Legislature enacted the Tax Increment Law (ss 66.1105) in 1975, they found, "that the accomplishment of the vital and beneficial purposes of the Promotion of Industry Statute (ss 66.1101) is being frustrated by the lack of incentives and financial resources." One stated purpose of the Tax Increment Law, "is to create a viable procedure by which a city or village, through its own initiative and efforts, may finance projects which will tend to accomplish," the promotion of industry. Amendments to Wisconsin’s TIF law enacted in 2007 allow for the expenditure of TIF funds for similar projects located within ½ mile of a TIF boundary. The Tax Increment Law allows a community to recapture the costs of public expenditures made to stimulate new development, from the property taxes generated by the new development. Fundamental to the TIF law is the concept that new development will benefit an area broader than the municipality in which the development occurs. However, an inequity occurs because the community is left to finance the entire cost of public expenditures needed to facilitate the development. The TIF law recognizes that without the 1 TIF expenditures, the development could not have occurred. Thus, the TIF law provides that all property taxes levied on increased property value within a TIF district are retained by the community to finance the public expenditures made within the TIF district. The base value (the value that existed at the time the TIF district is created), however, continues to provide same level of revenues to the other taxing jurisdictions. Once all of the public expenditures have been repaid, all taxing jurisdictions can collect taxes levied on the new property value. State statutes are very specific as to how a TIF district is created. First, a TIF project plan is developed and presented to the Plan Commission for a formal public hearing. The Commission makes a recommendation on the TIF project plan to the City Council. The Council then must pass a resolution adopting the TIF project plan and establishing the TIF boundaries. Finally, a Joint Review Board is created with members from the City, school district, county, vo-tech district, and one member at large. The Joint Review Board reviews the TIF plan and public hearing comments and approves the creation of the TIF district. Amendments to a TIF Project Plan may be made by following the same procedures. TIF project plan amendments may be necessary to revise projected budgets and/or to amend the boundaries of the original TIF district. This document will meet the statutory requirements for a Project Plan for Tax Increment Finance District No. 22. II. TIF No. 22 PLAN OBJECTIVES Industrial development activities in the City of Janesville are guided by the City's Economic Development Strategy and implemented in accordance with an Economic Development Policy. The overall goal for the City's industrial development effort is to diversify the City's economic base through the retention and expansion of existing businesses, and through the attraction of growing industrial and large regional service sector employers that will create new employment opportunities and expand the local property tax base. 2 TIF No. 22 will advance the City of Janesville's industrial development objectives and specifically will: A. Promote industry retention, expansion, and attraction through the development of a new fully improved industrial park, thereby creating new jobs and increased tax base. B. Provide appropriate financial incentives to encourage industrial expansion projects within the TIF district and for projects located within ½ mile of the TIF district. C. Reduce the financial risk to the taxpayer by timing the implementation of the Project Plan with the creation of additional property value through industry expansions. D. Generate sufficient new property tax increments within eight (8) to ten (10) years from each specific development project within the TIF District to fully repay the City's TIF project expenditures associated with the development project. III. BOUNDARIES OF TIF No. 22 Part of the NW ¼ and part of the SW ¼ of Section 18, part of the SW ¼ of Section 7, and th part of the NW ¼ of Section 19, all being in T.2N., R.13E of the 4 P.M., LaPrairie Township; and Part of the SE ¼ of Section 12, T.2N., R.12E.; also Part of the NE ¼ and th Part of the SW ¼ and all of the SE ¼ of Section 13, T.2N., R.12E.; also of the 4 P.M., Rock Township, and Part of the NW ¼ and Part of the NE ¼ of Section 24, T.2N.,R.12E. th also of the 4 P.M., Rock Township; all in Rock County, Wisconsin. DESCRIBED AS FOLLOWS: Begin at the NW Corner of said Section 18; Thence o S.005’50”E. along the West Line of said Section 18, 628.26 feet to the SW Corner of a o Certified Survey Map as recorded in Volume 13, Pages 460 and 461; thence S.8944’30”E. along the South Line of said Certified Survey Map, 433.05 feet to an iron pin; Lot 1 of a Certified Survey Map recorded at the Rock County Register of Deeds as Document No. o 1719917 in Vol. 29, Pages 57, 58, 59, and 60; thence S.8944’30”E. along the North line of o said Lot 1 142.45 feet to a jog in said North Line; thence S.0052’06”E. 10.00 feet; thence o S.8945’29”E. continuing along North Line 471.80 feet to the point of a curve; thence continuing in an Easterly direction along the North Line of Lot 2 of said CSM along a curve convexed Southerly, 236.14 feet, having a radius of 452.91 feet and a chord bearing oo N.7520’38”E. 233.47 feet to the most Northeast corner of said Lot 2; thence S.018’40”W. along the West line of Burbank Ave, 33.90 feet to a point of curve; thence continuing along 3 the right-of-way line of Burbank Ave. around the cul-de-sac 365.65 feet to the Southerly corner of Outlot 3 of Certified Survey Map recorded at the Rock County Register of Deeds as Document 1076291 in Vol. 13, Pages 303, 304, and 305; thence along the East line of said Outlot 3 376.50 feet to the Southwesterly line of the Union Pacific Railroad; thence o S.3602’35”E. along the Southwesterly line of said railroad approximately 1,830 feet to the o North line of Section 18-2-13; thence N.8944’30”W. along said North line of Section 18 1,414.15 feet to the Northwest corner of Lot Two of a Certified Survey Map recorded at the Rock County Register of Deeds as Document 1085847 in Vol. 13, Pages 460 and 461; o thence S.006’15”E. along the East line of said Lot Two, 558.267 feet to the Southwest corner of Lot Two of said CSM, said Southwast corner also lying on the North line of Venture Drive; thence continuing in a Southerly direction approximately 70.0 feet to the Northeast corner of Lot 1 of a Certified Survey Map recorded at the Rock County Register of Deeds as Document No. 1459715 in Vol. 23 on Pages 254, 255, 256, and 257; said Northeast corner also being located on the South line of Venture Drive; thence 0 N.8944’40”W. 395.28 feet along the South line of Venture Dr. to the Northwest corner of oo said Lot 1; thence S.006’15”E. 551.0 feet to an iron pin; thence S.8944’30”E. 2,028.42 feet to the SE Corner of a Certified Survey Map as recorded in Volume 19, Pages 496, 497 o and 498; thence S.054’30”E. along the North-South Centerline of said Section 18, 1,414.72 feet to an iron pin on the relocated North Line of Avalon Road; thence oo N.8945’23”W. along said North Line, 2,248.51 feet to an iron pin; thence N.005'’0"W. o 73.95 feet to an iron pin; thence N.8944’42”W. 182.86 feet to an iron pin; thence o N.5851’35”W. 20.04 feet to an iron pin located on East right of way Prairie Road (Beloit o Ave); thence N.005’50”W. along said right of way, 489.3 feet; thence due West, 33 feet o being the NE Corner of property owned by L & J Gore; thence N.8841’50”W. along the North Line of said Gore property, 490.05 feet to NW Corner of said Gore property; thence o S.005’50”E.along West Line of said Gore property, 400.0 feet to SW Corner of said Gore o property; thence S.8841’50”E. along South Line of said Gore property, 450.04 feet to a line parallel with and 40.0 feet West of the East Line of the NE.1/4 of said Section 13; thence o S.005’50”E. along said parallel line, 90.31 feet to vision triangle at intersection of Prairie o (Beloit Ave.) and Avalon Roads (STH 11); thence S.5957’30”W. along said vision triangle, o 161.45 feet to North Line Avalon Road (STH 11); thence S.2615’45”E., 223.37 feet; thence o S.8959’47”E., 135.87 feet to the East Line of C.T.H. “G” (Prairie Ave.); thence oo S.0110’56”W., along said East Line of C.T.H.”G”, 135.84 feet; thence S.2136’55”W., o continuing along said East Line, 53.56 feet; thence S.0124’58”W., continuing along said o East Line, 242.64 feet; thence S.8920’59”E., 0.37 feet to a line that is 33.0 feet East of and o parallel with the East line of the SW ¼ of said Section 18; thence S.0000’13”W., along o said line, 2,079.14 feet; thence S. 0018’59”E., along a line that is 33.0 feet East and parallel with the East line of the NW ¼ of said Section 19, a distance of 401.19 feet; thence ooo N.8827’04”W., 33.02 feet; thence N.8827’04”W., 3,859.99 feet; thence N.0002’51”W., 1,704.64 feet to a point on the North line of the SE. ¼ of the SW. ¼ of said Section 13; o thence S.8902’36”E., along said North line, 1,291.03 feet to the NE. corner of said SE. ¼ o of said SW. ¼ of said Section 13; thence N.0000’24”E., along the North-South centerline of said Section 13, a distance of 1,283.03 feet to the South line of S.T.H. 11 (Avalon Road); o thence S.8841’40”E., along said South line, 1,757.16 feet to the West line of a Certified o Survey Map as recorded in Volume 8, Pages 114 and 115; thence S.0118’01”W., along 4 said West line, 217.05 feet to the SW. corner of said Certified Survey Map; thence o S.8842’05”E., along the South line of said Certified Survey Map, 110.0 feet to the SE. o corner of said Certified Survey Map; thence N.0118’01”E. along the East line of said o Certified Survey Map, 200.0 feet; thence S.8841’40”E., 70.0 feet to the NW. corner of Lot One of a Certified Survey Map as recorded in Volume 8, Pages 124 and 125; thence o S.0118’01”W. along the West line of said Lot One, 200.0 feet to the SW. corner of said Lot o One; thence S.8842’05”E. along the South line of said Lot One, 115.05 feet to the SE. o corner of said Lot One; thence N.0118’01”E. along the East line of said Lot One and said line extended North, 309.02 feet to a point on the South line of Outlot 1 of a Certified Survey Map as recorded in Volume 24, Pages 355, 356, 357, 358, and 359; thence o N.8841’40”W. along South line of Outlot 1, 2,054.32 feet to the North-South Centerline of o said Section 13; thence N.0002’50”W. along said North-South Centerline, 2,589.84 feet to N1/4 Corner said Section 13; thence continue North along North-South Centerline of said o Section 12, 639.87 feet to SW Corner Lot 8, Burbank Park Addition; thence S.8840’E., o 535.02 feet to East Line Jackson Street; thence N.009’E. 70 feet to South Line Jackson School property; thence East along said Jackson School property, 786 feet to SE Corner said Jackson School; thence North along East Line said Jackson School, 310 feet more or less to SW Corner Certified Survey Map as recorded in Volume 1, Page 219; thence o S.8832’E. 350.03 feet to SE Corner Certified Survey Map as recorded in Volume 3, Pages o 264 and 265; thence N.017’E. 100 feet to SW Corner Lot 6, Second Sundown Acres o Addition; thence S.8832’E. along South Line said Addition, 862.53 feet to West right of way Prairie Road line of Beloit Ave; thence South along said right of way, 160 feet more or less; thence in an Easterly direction perpendicular to the West line of Beloit Ave. 93.0 feet to the Northwest corner of Lot 1 of a Certified Survey Map recorded at the Rock County Register of Deeds as Document No. 1719917 in Vol. 29, Pages 57, 58, 59, and 60 and the , 1,130 feet more or less to South Line said Section 12; thence East along said South Line, 33 feet to Point of Beginning. IV. EXISTING ZONING AND PROPOSED LAND USES The City of Janesville is proposing to create TIF No. 22 to expand an existing industrial park on the City’s south side. At the time of its creation, TIF District No. 22 contained four parcels of land vacant land totaling 285 acres in an industrially zoned area on the City's south east side. Amendment No. 1 to the TIF No. 22 Project Plan will change changed the original boundary to add an additional 226 acres of vacant land located south of STH 11 (Avalon Road). Amendment No. 2 to the TIF No. 22 Project Plan will add an additional 57 acres of industrial land to the TIF boundary, bringing the total size of TIF No. 22 to 569 acres. The parcels are unimproved and have been used for agricultural crop 5 production. The City purchased 85 acres of the land within TIF No. 22 in late 1998. The 85 acres of land east of Beloit Ave. within TIF No. 22 is currently zoned M-1 Light Industrial. In 1999, the City purchased the 200 acres of land west of Beloit Ave. and zoned it M-1 Light Industrial and Conservancy. Generally, the 142 acres of land south of a natural drainage swale that runs from the northeast to the southwest were zoned and used for industrial purposes. The 58 acres of land north of this drainage swale were zoned Conservancy and was reserved for future parks and open space. In 2004, the City negotiated to purchase an additional 226 acres of land located south of STH 11. Upon annexation, this land will be was zoned M-1 Light Industrial and included within the boundaries of TIF No. 22 by approval of Amendment No. 1 to the TIF No. 22 Project Plan. The 57 acres of land added to the boundaries of TIF No. 22 by Amendment No. 2 contains three (3) parcels of land zoned a combination of M-1 Light Industrial and M-2 General Industrial. The 12.4 acre parcel fronting on Beloit Ave. is improved with a 140,000 SF industrial building leased to CRT Processing. The 15.1 acre vacant parcel fronting on Burbank Ave. is zoned predominately M-2. The third parcel contains 25.1 acres of land improved with 28,500 SF of vacant industrial buildings formerly occupied by Quality Wood Treating. State law requires that not less than 50% of the land within a TIF district be “suitable for ‘industrial sites’ within the meaning of (Wisconsin Statutes) s. 66.1101 and zoned for industrial use”. Within TIF No. 22 after Amendment No., 88.6% 89.3% of the land is proposed for industrial uses and 11.4% 10.7% is proposed for open space uses, thus meeting the required standard. All lands within TIF No. 22 zoned for industrial uses will remain zoned for industrial uses for the life of the TIF district. In addition, the Wisconsin TIF Law prohibits the costs associated with “newly platted residential areas” from being considered as TIF project costs. No residential development is planned for TIF No. 22. The TIF District Project Plan proposes to improve these properties with streets and utilities to create additional industrial sites. The timing of the street and utility improvements will be phased to meet the needs of specific development projects thereby minimizing the risk of incurring development costs in advance of tax-producing development projects. 6 Map 1 shows the land uses and zoning in TIF No. 22. 7 7 V. PROPOSED TIF PROJECTS AND IMPROVEMENTS The public expenditures proposed in TIF No. 22 will be linked to the expansion of the industry within the district. The expansion of the industry will increase property values and will generate new tax increments that will allow the City to recover its TIF costs. Helgesen Properties constructed a 700,000 sf industrial warehouse building within the TIF district. This building has been leased to a series of third party logistics firms that provide inventory sequencing services to General Motors. With the closure of GM, this building is vacant and available for lease. Helgesen has upgraded the HVAC and lighting to improve energy efficiency and has added demising walls to accommodate multiple tenants. To allow this expansion to occur, the City extended utilities to the property and constructed an extension of Venture Drive. Deere and Company contracted with Ryan, Inc. for the construction of a 490,000 sf warehouse on a 52 acre site west of Beloit Ave. Ryan, Inc. also took an option to purchase the remaining 70 acres of land zoned for industrial purposes west of Beloit Ave. In 2007, Helgesen purchased a 22.55 acre industrial site on Venture Dr. and constructed a 250,000 SF industrial building on speculation. The western ¼ of the building was leased to National Freight Industries while the eastern ¾ was leased to Cummins, Inc. The vacant land and vacant Quality Wood Treating property included in Amendment No. may need TIF assistance for future development projects. As the demand for industrial sites increases, the City will construct new streets and utilities on the remaining 296 industrial acres planned west of Beloit Ave industrial land within the proposed TIF district. Finally, the Project Plan provides funds for marketing the new industrial sites and for providing incentive financing to companies locating new facilities within the TIF district. The kind, number, and location of all proposed improvements proposed for TIF No. 22 are shown on Map 2 - Improvement Plan. 8 9 A. Land Acquisition In order to create a new industrial park, the City has acquired a 200 acre parcel on the west side of Beloit Ave. In addition, the City may acquire and an additional 226 acre parcel west of Beloit Ave. and south of STH 11. Land acquisition, surveying, soil testing, environmental engineering, and title policy expenses may be considered TIF project costs. Payments to neighboring townships to compensate them for lost tax revenues where TIF districts include newly annexed property will also be considered a TIF land acquisition expense. Payment of any land conversion penalty under the provisions of Wisconsin Statutes section 74.485 would also be considered a land acquisition cost. In addition, approximately 58 acres of the 200 acres purchased will be reserved for parks and open space to serve as a buffer between the industrial development to the south and the residential development outside the district to the north. B. Transportation Improvements Transportation improvements may include the construction of the southerly and westerly extension of Venture Drive back to Beloit Ave. and westerly extension of Venture Drive to Progress Drive. Beloit Ave. may be was widened to a 4-lane cross section as the traffic to and through TIF No. 22 increases with development. A traffic signal may be was installed at the Kellogg and Beloit Avenue intersection, with 50% of the cost attributable to the increased truck traffic within the district. In addition, the TIF Project Plan allows for the construction of Venture Dr. and Progress Dr. on the vacant land north of STH 11 and the construction of new streets on the vacant land west of Beloit Ave. and south of STH 11 to develop new industrial sites. Map No. 2 shows the planned location of these road improvements, however, the actual location of the roads may change depending on the needs of specific development projects. Wherever new street construction occurs, sidewalks or recreational trails, street trees, and landscaping may be installed along the new frontage road. The Project Plan also allows for the construction of a bike trail along the north right-of-way line of STH 11 10 when that road is widened to 4-lanes in 2004. Finally, a bike trail may be constructed from STH 11 north along Progress Dr. to Jackson St. to link the residential neighborhoods to the north to the new industrial park. C. Utility Costs As new streets are constructed to provide access to industrial sites, sewer, water, gas and electric utilities will be installed within the rights-of-way. In addition, a storm sewer collection system including underground piping, surface detention ponds and safety fencing may be installed. These utility improvements will be phased along with the street construction to meet the needs of specific development projects. The utility costs will be included as TIF expenditures. D. Street Lighting and Landscaping As new streets are developed within TIF No. 22, street lights and street trees may be installed. In addition, a landscaping buffer between the industrial uses to the south and the open space/residential uses to the north is planned as a TIF cost. E. Marketing and Incentive Financing In order to attract new development to the TIF No. 22 industrial park, it may be necessary to implement a marketing program. Marketing activities may include the development of brochures, photographs, topography and maps for use with industry prospects. Once the marketing materials are available, a direct mail program may be implemented to attract new development. Marketing activities may also include the payment of real estate commissions where a private “buyer’s broker” facilitates the sale of a new development site in TIF No. 22. Where a specific industry has been identified, incentive financing may be necessary to ‘close the deal’. Incentive financing may include below interest loans, funding for relocation, worker training, and unique start-up costs, and/or similar financing programs. Financing may go directly to a development project or to capitalize a revolving loan fund to provide financing assistance for industrial expansion projects throughout the TIF District. All marketing and incentive financing expenses will be considered TIF costs. Changes to State Law also allow the expenditure of TIF funds within ½ 11 mile of an existing TIF boundary. The existing industries located within ½ mile of TIF No. 22 may also need project financing and/or development incentives to maintain employment levels or to undertake expansion projects. This Project Plan includes TIF funding to assist with these types of industrial expansion projects located within ½ mile of TIF No. 22 (See Map 3). F. Administrative Costs The TIF No. 22 project plan includes the cost incurred for administrative, professional, organizational, and legal services related to the creation and administration of the TIF district. Direct engineering costs shall be charged to the specific construction projects within the TIF District. Direct legal and planning costs will be charged as administrative costs. The overhead costs of related city departments will also be charged against the TIF district in accordance with an indirect cost allocation plan. The cost of the three TIF audits required under Wisconsin Statutes ss 66.1105 will be included as TIF project costs. In addition, administrative costs will include any TIF Plan review fees charged by the Department of Revenue . VI. DETAILED LIST OF ESTIMATED PROJECT COSTS In order to determine the economic feasibility of the proposed TIF District No. 22, total project costs must be estimated and compared to the projected tax increments that will be generated by the new development in the TIF district. Based on 2004 actual costs through 2008 and construction costs in 2009, TIF No. 22 improvement costs are estimated as follows: A. Land Acquisition $6,218,329 $ 6,254,335 B. Transportation Improvements $2,364,394 2,548,952 C. Utility Costs $3,505,937 2,265,036 D. Lighting and Landscaping $217,023 99,298 12 E. Marketing & Incentive Financing $2,002,905 3,102,997 F. Administration $89,917 $ 126,000 Total Cost of Improvements $14,398,505 $ 14,396,618 13 13 The estimated cost of TIF expenditures is $14,398,505 $14,396,618. Under the revised TIF law, project costs may be incurred over the first eighteen (18) years of the TIF district, while TIF revenues will be collected over a maximum of twenty-three (23) years. The City will have to finance any negative TIF fund balance through interfund borrowing. Based on conservative projections, debt service and interfund borrowing will add an additional $10,631,445 $4,597,860 in TIF financing costs, bringing the total estimated TIF No. 22 project costs to $25,029,950 $19,030,944. All project costs and interfund borrowing estimates are based on the most current cost data available in September, 2004 June, 2009 and may be adjusted within the total amount shown without modification or amendment of this TIF No. 22 Project Plan. Under the changes to the TIF law enacted in 2004, all of the TIF No. 22 project costs except debt service and interfund borrowing will be incurred during the first eighteen (18) years of the TIF District. Table No. 1 shows the schedule and timing of the proposed expenditures. The actual timing of expenditures will be contingent on the commitments from industries locating facilities and guaranteeing a minimum property value that will generate sufficient tax increments over the life of the TIF district to cover the TIF project costs. Helgesen Properties constructed a 700,000 sf building on the east side of Beloit Ave. in 1999. Ryan, Inc, constructed a 490,000 sf distribution center for lease to Deere and Company in 2001. Helgesen Properties also constructed a 250,000 SF industrial building in 2007 and has an option on an adjacent parcel of land with plans to construct a third industrial building containing 150,000 SF. This Project Plan includes funds to market the remaining vacant industrial land within the TIF District for the development of other warehousing and distribution projects as well as continued industrial development. 14 Table No. 1 Tax Increment District No. 22 Summary of TIF Costs By Year Year Type of Cost Cost Cost 1999 Land Acquisition, $2,589,264$ 2,600,563 and Administration. 2000 Streets, Utilites, 149,016150,059 Marketing and Administration 2001 Streets, Utilities, Marketing and 1,443,384 1,443,658 Administration 2002 Utilities, Incentive Financing, 1,965,499 1,965,499 Administration 2003 Administration 538 538 2004 Streets, Administration 1,208,001 5,177,677 2005 Land Acq., Administration 4,187,04038,043 2006 Streets, Utilities, Marketing, Admin. $285,240 9,862 2007 Streets, Utilities, Marketing, Admin. $446,360 556,371 2008 Streets, Utilities, Marketing, Admin. $323,760 228,004 2009 Streets, Utilities, Marketing, Admin. $611,802 769,750 2010 Streets, Utilities, Marketing, Admin. $608,302 1,463,800 2011 - Streets, Utilities, Marketing, Admin. $580,302 $ 29,259 2015 Total Cost of Improvements $14,398,505 $14,433,084 Debt Service and Interfund Borrowing $10,631,445 4,597,860 Total Estimated TIF No. 22 Costs $25,029,950 $19,030,944 -------------------------------------------------------------------------------------------------------- Prepared By: Economic Development Agency 15 VII. ECONOMIC FEASIBILITY AND METHODS OF FINANCING A. Economic Feasibility Analysis Under Wisconsin's Tax Increment District Law (ss. 66.1105), 100% of the property taxes levied against new property value created within a TIF district is retained by the City to pay for improvement costs that were incurred to attract the new development. Implicit in the law is the concept that without the improvements, the attraction of new development, the creation of new jobs, and the expansion of the tax base would not occur. The Wisconsin TIF law as revised by the Legislature in 2004, allows the City eighteen (18) years in which to make the improvements needed to stimulate and support development. The property tax increments generated by the new development are retained by the City until all TIF costs are paid. In no case shall the TIF district have a life longer than twenty three (23) years. The City of Janesville's Tax Increment District No. 22 was created by Council action in September, 1999. The original TIF No. 22 Project Plan will be was amended by the City Council in October, 2004 to revise the budget and to amend the boundary to include an additional 226 acre parcel of land. The budget and boundary were amended again in August, 2009. Therefore, all TIF project improvements must be completed by September, 2017. The taxes on any increased property value in the district between 2000 and 2021 will be retained by the City to repay the TIF project costs. TIF No. 22 will be dissolved when all TIF project costs are repaid, or in September, 2021, whichever comes first. In order to determine the economic feasibility of the proposed TIF district, estimated TIF costs must be compared to projected TIF property tax increments. Where tax increments exceed TIF costs over the twenty three (23) year life of the TIF district, the TIF district is considered economically feasible. The City of Janesville has made conservative assumptions about the 16 future to determine the economic feasibility of TIF No. 22. All TIF costs related to industrial expansion projects are incurred according to the schedule shown in Table No. 1. TIF property value increases for are shown for the 700,000 sf industrial warehouse constructed in 1999 and for the 490,000 sf warehouse distribution center constructed in 2001, and the 250,000 SF warehouse constructed in 2007. In addition, as streets and utilities are installed, new industrial projects will be developed. The Project Plan assumes that an average of $2,500,000 $5,000,000 in new property value will be added every other year from 2005 through 2011 in 2010 and $2,500,000 in value added in 2012. At an average value of $25 $35 per square foot of industrial building, the City will need to add approximately 100,000 215,000 sf of construction bi-annually to achieve $2,500,000 $7,500,000 in new property value. From 1988 through 2003 2008, the City has averaged approximately 350,000 300,000 sf of new industrial space absorption annually citywide. Where possible, the construction of new streets and utilities will be phased and linked to known development projects. The City will enter into binding contracts with the industries locating within TIF No. 22 that will guarantee the minimum amount of investment needed to fully amortize all TIF costs associated with each project within 8 to 10 years. The overall TIF District should be able to recover all costs by the year 2020 2021. The equalized value property tax mill rate levy is projected to increase 0.5% per year remain constant into the future. This assumption is also conservative. In recent years, the equalized value property tax mill rate in Janesville increased slightly. Based on these assumptions, the $31,923,900 $48,825,200 in new property value generated between 1999 and 2004 2008, plus the estimated $10,000,000 $7,500,000 in new property value generated by development within TIF No. 22 between 2005 2010 and 2011 2012 will create sufficient new property tax increments to repay all planned TIF project costs. The City will limit the implementation of all TIF expenditures until the actual levels of new property value are known. Table 2 shows TIF costs as estimated in 2004 with Amendment No. 1 to 17 00 Table No. 215-Oct-04 TIF No. 22 JDV City of Janesville the TIF No. 22 Project Plan. Table 2A shows revised TIF costs of $14,398,505 Tax Increment vs. TIF Cost Comparison $14,433,084 plus financing costs of $10,631,445 $ 4,597,860 for a total TIF cost of EqualizedTaxDirect $25 Const.,029,950 $19,030,944 TotalValue. IncrementLong TermCosts &InterfundTIFTIF YearValueTID ValueMill Rate& Misc.Debt DebtInterestBalanceYearYear RevenueProceedsServiceCosts 1998000.0234600$0$01998 1999000.023585502,750,0002,600,563$0$149,98719991 200011,147,80011,147,8000.0237013,450245,000554,034$7,095($152,692)20002 20018,385,00019,532,8000.02382$285,377$455,0001,877,756$14,754($1,304,825)20013 20022,081,10021,613,9000.02394$489,683$2,633,4002,409,820$13,396($604,958)20024 200312,767,50034,381,4000.02283$525,534685,346$8,768($773,538)20035 2004031,923,9000.02294$948,922 966,908$19,338($810,862)20046 20052,500,00034,423,9000.02306$856,139 690,411$20,272($665,406)20057 2006034,423,9000.02317$917,7561,349,464$16,635($1,113,750)20068 20072,500,00036,923,9000.02329$921,7441,362,717$27,844($1,582,566)20079 2008036,923,9000.02341$984,2701,426,980$39,564($2,064,841)200810 20092,500,00039,423,9000.02352$988,5911,435,903$51,621($2,563,773)200911 2010039,423,9000.02364$1,052,0381,504,746$64,094($3,080,575)201012 20112,500,00041,923,9000.02376$1,056,6981,531,808$77,014($3,632,699)201113 2012041,923,9000.02388$1,121,0781,592,898$90,817($4,195,336)201214 2013041,923,9000.02400$1,126,083973,080$104,883($4,147,216)201315 2014041,923,9000.02412$1,011,114939,267$103,680($4,179,049)201416 2015041,923,9000.02424$1,016,169776,318$104,476($4,043,674) 201517 2016041,923,900 0.02436$1,021,250330,056$101,092($3,453,571)201618 2017041,923,9000.02448$1,026,356290,109$86,339($2,803,662)201719 2018041,923,9000.02460$1,031,488235,190$70,092($2,077,457)201820 2019041,923,9000.02473$1,036,646194,318$51,936($1,287,065)201921 2020041,923,9000.02485$1,041,829125,936$32,177($403,349)202022 2021041,923,9000.02497$1,047,03860,351$10,084$573,253202123 44,381,400Totals:$19,519,803$6,083,400$23,913,979$1,115,971 Assumptions:Expenditures: AmountYear 1. Mill Rate Growth :1.0050Debt2,589,2641999 2. Interfund Cost :2.5%Debt149,0162000 3. TIF Bal.10 Yrs :N/ADebt1,443,3842001 4. G.O. Bond Rate :4.00%Debt1,965,4992002 5. Deere Guarantee$120,000Direct Cost5382003 2005$2,500,000Debt and Direct costs1,208,0012004 2006$0Debt4,187,0402005 2007$2,500,000Debt285,2402006 2008$0Debt446,3602007 2009$2,500,000Debt323,7602008 2010$0Debt611,8022009 2011$2,500,000Debt608,3022010 2012$0Debt580,3022011 Project Costs14,398,505 Interest Costs10,631,445 Total TIF Costs$25,029,950 Prepared By: Economic Development Agencytif22.xls 18 Debt Direct Cost 00 Table No. 2A10-Aug-09 TIF No. 22 JDV City of Janesville Tax Increment vs. TIF Cost Comparison EqualizedTaxCapital Const.TotalValueIncrementLong TermExisting ExpenditureInterfundTIFTIF YearValueTID ValueMill Rate& Misc.Debt Debt & Future DebtInterestBalanceYearYear RevenueProceedsServiceServiceCosts 1998000.02343000$0$01998 1999000.023545502,750,00002,600,5630$149,98719991 200011,147,80011,147,8000.0232713,450245,000403,975150,0597,095($152,693)20002 20018,385,00019,532,8000.02333$285,377455,000434,0981,443,65814,754($1,304,826)20013 20022,081,10021,613,9000.02275$489,6832,633,400444,3211,965,49913,396($604,959)20024 200312,767,50034,381,4000.02290$525,5340684,8085388,768($773,539)20035 2004(5,408,500)28,972,9000.02306$1,010,3424,820,000666,9085,177,6776,632($794,414)20046 20056,000,80034,973,7000.02178$833,6730788,37638,04324,808($811,968)20057 20063,740,90038,714,6000.02047$933,7190909,2839,86241,322($838,716)20068 2007630,70039,345,3000.02085$977,73970,000900,910556,37160,182($1,308,439)20079 20089,479,90048,825,2000.02058$996,603590,000924,015228,00429,211($903,067)200810 2009048,825,2000.02069$1,160,7400934,452022,577($699,356)200911 20105,000,00053,825,2000.02079$1,115,0540936,769107,76517,484($646,320)201012 2011053,825,2000.02089$1,224,5970912,133314,61816,158($664,632)201113 20122,500,00056,325,2000.02100$1,230,2190917,678303,68416,616($672,391)201214 2013056,325,2000.02110$1,288,6280915,227296,75016,810($612,549)201315 2014056,325,2000.02121$1,194,5710912,208285,81515,314($631,316)201416 2015056,325,2000.02131$1,200,5440927,289287,14015,783($660,984) 201517 2016056,325,2000.02142$1,206,5470920,359264,94716,525($656,268)201618 2017056,325,2000.02153$1,212,5790911,615256,01316,407($627,724)201719 2018056,325,2000.02164$1,218,6420837,194247,07915,693($509,047)201820 2019056,325,2000.02174$1,224,73600238,14412,726$464,818201921 2020056,325,2000.02185$1,230,85900152,2350$1,543,442202022 2021056,325,2000.02196$1,237,0140000$2,780,456202123 56,325,200Totals:$21,811,399$11,563,400$15,281,618$14,924,465$388,261 Assumptions:Expenditures: 1. Mill Rate Growth :1.0050 Project Costs14,433,084 2. Interfund Cost :2.5% Interest Costs4,597,860 3. G.O. Bond Rate :4.00% Total TIF Costs$19,030,944 4. Deere Guarantee:$100,000 5. Eq. Value Growth: 1.00 Prepared By: Economic Development Agency TIF 22 Amendment 2 19 These monies will only be expended if the property value of the industrial construction is adequate to ensure a sufficient tax increment to recover the cost within the life of the TIF district. If a total of $41,923,900 $56,325,200 of new property value is created as projected in Table 2, the TIF district will generate a total of $19,519,803 $21,811,399 in property tax increments over the 23 year life of the district. In addition, the TIF district borrowed an additional $6,083,400 $11,563,400 between 1999 and 2004 2008 resulting in a total of $25,603,203 $33,374,799 available to implement TIF projects. Since property tax increments plus existing debt are projected to exceed TIF costs including debt service by $573,253 $2,780,456 TIF No. 22 is found to be economically feasible. Projected TIF revenues will cover TIF costs within 22 21 years and the City projects that TIF No. 22 will be dissolved by 2021 2019. Since there is no guarantee that new development projects will be found to construct new property value within TIF No. 22, the City will only implement additional street and utility construction project when they are needed to prepare new industrial sites for specific projects. The TIF plan includes $2,671,405 $950,800 in funding for the extension of Venture Drive, west of Beloit Ave. and in funding for storm sewer special assessments that are paid as land is subdivided. Table No. 3 shows projected revenues and expenditures assuming that no new property value is created after 2003 and assuming that the only future expenditures are limited to the purchase of the additional 226 acres of land and the completion of 850’ of Venture Dr. west of Beloit Ave. Under this “no growth” scenario, TIF No. 22 is still projected to “break even” in 2019 (TIF Year 21) allowing the TIF district to be dissolved without any further general fund obligations. Given the remaining life of TIF No. 22, it is likely that the future installation of streets and utilities serving the 225 acres of industrial land south of STH 11 will need to be funded by the creation of a new TIF district. B. Methods of Financing Wisconsin Statutes provide several methods of financing the cost of improvements in tax increment districts. For smaller amounts, financing through the general fund may be feasible. Transfers can be made from the municipal general fund 20 account into the TIF expenditure account to cover the cost of TIF improvements. This method of financing avoids the interest cost associated with municipal borrowing. However, since the General Fund balance is reduced, the General Fund loses interest income, so an interfund borrowing cost is charged to the TIF account. State law also provides for municipal borrowing. Community borrowing is divided into two forms -- that subject to a statutory limitation and borrowing not subject to limitation. Possible funding sources include: 1. General Obligation Borrowing - Is sometimes referred to as a local promissory note from a bank, State Trust Fund, or other lending institution. This form of borrowing requires little effort or legal costs and works well for smaller sums. This sort of borrowing is included in the municipal borrowing limitation. 2. General Obligation Bonding – Is an irrepealable property tax obligation of the community. General obligation bonds can often be sold at lower interest rates than other forms of borrowing. However, there are additional regulations and requirements that make G.O. Bonds suitable for larger projects. G.O. Bonds are included in the municipal borrowing limitation. 3. Mortgage Revenue Bonds - Are repaid through the revenue generated by a public utility like a water or sewer utility. Revenue bonds also have regulatory and legal requirements that make them suitable for larger project costs. Since revenue bonds do not pledge the community's taxing capacity, they are not subject to a municipal borrowing limitation. 4. Federal and State Grant or Loan Programs - Like Community Development Block Grants or State Transportation aids are sometimes available to supplement local funding sources. However, the amount of grant dollars available is limited and state and federal funding is uncertain given the need to balance budgets. The actual method of financing specific TIF projects will be determined by the City based on the current fiscal condition of the City, anticipated non-TIF capital needs, municipal borrowing rates and terms, and the amount of financing needed. 21 Where general obligation borrowing is used, TIF financing costs have been calculated assuming financing over ten (10) years, with equal principal payments. The City will not proceed with any phase of the planned public improvements until a developer or business is committed to construct a new building or renovate an existing building with a value sufficient to generate the property tax increments needed to cover the cost of the improvements. Therefore, the actual City expenditures in TIF No. 22 may be substantially different that those shown in the project plan. C. Additional Economic Benefits The economic feasibility analysis has shown that the property tax increments will be sufficient to cover all TIF project costs over the twenty three (23) year life of the TIF district. The development of TIF No. 22 will facilitate an industrial expansion, increase property values, and create new jobs in the City of Janesville. These jobs will help diversify the local economy and the increased manufacturing and warehousing/distribution payrolls will have a positive multiplier effect in the trade and service sectors. VIII. PROPOSED CHANGES IN ORDINANCES, CODES, & PLANS The proposed TIF No. 22 project plan is in conformance with the City of Janesville's present zoning ordinance, with the City's Industrial Development Plan and the General Development Plan. All of the properties within TIF No. 22 with the exception of the 58 acres reserved for future outdoor recreation, have been found to be suitable for industrial development in accordance with Wisconsin's Promotion of Industry Statute ss 66.1101, and will remained zoned for industrial purposes for the life of the TIF district. All development in TIF No. 22 will have to conform with the State Building Codes and will be subject to the City's permitting and inspection procedures. The TIF No. 22 project plan conforms with all relevant State and local ordinances, plans, and codes, thus, no changes to the existing regulations are proposed or needed. 22 The City will request that the Wisconsin Department of Commerce amend the Janesville Community Development Zone boundary to include the newly annexed land within TIF No. 22. This will allow companies that locate within the amended TIF No. 22 boundary to apply for State of Wisconsin income tax credits under the Development Zone Program. In addition, the newly annexed land is located outside the current 208 Water Quality Plan boundary for sewer service. The City will request a sewer service area boundary amendment to include all of proposed TIF No. 22. The current 208 Water Quality Plan provided for sewer service to an additional 960 acres of industrial development, but the exact location of the development was not designated. The 208 Water Quality Plan amendment will allow the City to provide sewer service to the 226 acres of land to be annexed to TIF No. 22, and leave an additional 734 acres of industrial land for future sewer service area designation. IX. LIST OF ESTIMATED NON-PROJECT COSTS All of the public improvements and other project costs included in this project plan are TIF eligible costs as defined in Wisconsin Statutes ss. 66.1105, the Tax Increment District Law. Where an improvement (such as the planned traffic light at Beloit and Kellogg Avenues) can serve an area larger than the TIF district, the cost of the improvement will be prorated so that only the proportion of the costs to serve TIF No. 22 will be included as a project cost. That portion of the total costs which serves areas outside the TIF district will be considered 'non-project' costs and charged to funding sources other than TIF No. 22. X. METHODS FOR RELOCATION OF DISPLACED PERSONS The TIF No. 22 Project Plan does plan land acquisition, thus, there may be displacement of persons or business needing relocation assistance. For any reason, should relocation be necessitated by the City's involvement in the 23 implementation of this Project Plan, it will be undertaken pursuant to Wisconsin Statutes Section 32.19 and 33.195, and according to a Relocation Plan, as approved by the Wisconsin Department of Commerce. XI. PROMOTION OF THE ORDERLY DEVELOPMENT OF THE CITY The creation of TIF No. 22 and the implementation of the projects in the TIF Project Plan will promote the orderly development of the City of Janesville by encouraging that new industrial development occurs in areas of the City planned for industrial growth. By creating well designed and strategically located industrial parks, land use conflicts and infrastructure deficiencies can be avoided. By providing financial incentives to stimulate private development projects, the City is able to ensure that economic growth continues to occur, thus offsetting the inevitable loss of jobs and incomes when economic conditions force the closure of other employers in the community. By utilizing the provisions of the Tax Increment Finance Law, the City can increase property values through development projects that result in increased tax base. TIF No. 22 continues the industrial development on the City’s southeast side that began with the creation of TIF No. 5 in 1988 and TIF No. 16 in 1996. TIF No. 22 will add to the tax and employment base of the community, and will generate positive secondary impacts in the community through increased local disposable incomes. 24 17 17 18 19 Resolution No. 2009- 621 RESOLUTION APPROVING AMENDMENT NO. 2 TO THE PROJECT PLAN AND AMENDING THE BOUNDARIES OF TIF NO. 22. WITHIN THE CITY OF JANESVILLE, ROCK COUNTY, WISCONSIN WHEREAS, the City of Janesville adopted Resolution No. 99-2455 on September 27, 1999, creating City of Janesville Tax Increment Finance District No. 22 in accordance with the provisions of Wisconsin Statues ss 66.1105, and WHEREAS, the City of Janesville adopted Resolution No. 2004 – 89 on October 25, 2004, approving Amendment No. 1 to the Project Plan for TIF No. 22 in order to revise the project budget and to amend the TIF No. 22 boundary to include an additional 226 acres of industrial land, and WHEREAS, the City of Janesville is now proposing Amendment No. 2 to the Project Plan for TIF No. 22 again revising the project budget and amending the TIF No. 22 boundary to include an additional 32 acres of industrial land, and WHEREAS, the Plan Commission has held a public hearing on the proposed Amendment No. 2 to Tax Increment District No. 22 and the proposed new boundaries thereof, and recommended the approval of Amendment No. 2 to the Project Plan for Tax Increment District No. 22 and the modification to the boundaries of the Amended TIF district; and WHEREAS, the Chief Executive Officer of the local school district, Rock County Board, Blackhawk Technical College, and the other entities having the power to levy taxes on the property located within the proposed Tax Increment District No. 22 have been notified of the proposed Amendment to the Project Plan for TIF No. 22, pursuant to Section 66.1105 (4) (a) and (e), Wisconsin State Statutes; and WHEREAS, TIF No. 22 as amended, is declared to be an “industrial TIF district” where more than 51% of the land is currently zoned M-1 Industrial and has been found suitable for industrial development within the meaning of Section 66.1101, Wisconsin State Statutes and will remain zoned for industrial purposes for the 23 year life of the TIF District; and WHEREAS, the project costs directly serve to promote industrial development, consistent with the purpose for which the TIF District is created, and the improvement of such areas for industrial projects will significantly enhance the value of all property within the TIF District; and 20 Resolution 2009 – 621 Page 2 WHEREAS, the equalized value of taxable property within the amended boundaries of TIF No. 22 plus the value increment of all existing Janesville's TIF Districts does not exceed twelve percent (12%) of the total equalized value of property within the City of Janesville; and WHEREAS, Amendment No. 2 to the Project Plan for Tax Increment District No. 22 is economically feasible and has been found to be in accordance with the City's General Development Plans, Zoning Ordinance, and other relevant policies and that implementation of the improvements as set forth in Amended TIF No. 22 is in the best interest of the City of Janesville and for the benefit of its residents. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Janesville that it hereby approves Amendment No. 2 to the Project Plan for City of Janesville Tax Increment Finance District No. 22 and amends the boundaries of Tax Increment District No. 22 in the City of Janesville as described on the attached map and Amended Project Plan for TIF District No. 22. ADOPTED: Motion by: Second by: APPROVED: Councilmember Aye Nay Pass Absent Brunner DeGarmo Steven E. Sheiffer, City Manager Loasching Steeber ATTEST: Truman Wellnitz Williams Jean Ann Wulf, City Clerk-Treasurer APPROVED AS TO FORM: City Attorney Proposed by: City Manager Prepared by: Economic Development Director 21 CITY ATTORNEY’S OFFICE MEMORANDUM June 22, 2009 MEMORANDUM TO: J. Douglas Venable, Director of Economic Development FROM: Wald Klimczyk, City Attorney RE: Legal Opinion – Amendment No. 2 -- T.I.F. No. 22 Project Plan Sec. 66.1105(4)(f), Wis. Stats., of the Tax Increment Financing Law mandates that the project plan for a proposed tax increment financing district "include an opinion of the city attorney or an attorney retained by the city advising whether the plan is complete and complies with this section.” You have asked me to review a certain proposed “Amendment No. 2 to the Project Plan for Tax Incremental Finance District No. 22” dated August 10, 2009 (the expected date of City Council action) and determine if, in my opinion, it is complete and complies with the requirements of Wisconsin's T.I.F. Law. This memorandum constitutes my legal opinion. Sec. 66.1105(4)(f), Wis. Stats., sets forth those components of a T.I.F. project plan which are required by state law. They are as follows: 1. A statement listing the kind, number, and location of all proposed public works or improvements within the district or, to the extent provided in Section 66.1105(4)(f) 1. k, Wis. Stats., outside the district; 2. An economic feasibility study; 3. A detailed list of estimated project costs; 4. A description of the methods of financing all of the estimated projected costs; 5. The time when the costs or monetary obligations related thereto are to be incurred; J. Douglas Venable June 22, 2009 Page 2 6. A map showing the existing uses and conditions of the real property in the district; 7. A map showing the proposed improvements and uses in the district; 8. Proposed changes of: a. Zoning ordinances. b. The master plan, if any. c. The master map, if any. d. Building codes. e. City ordinances. 9. A list of estimated non-project costs; 10. A statement of proposed methods for the relocation of any person(s) to be displaced; and 11. How the Tax Increment Financing District promotes the orderly development of the City. I have reviewed proposed “Amendment No. 2 to the Tax Incremental Finance District No. 22 Project Plan,” dated August 10, 2009, prepared by the City of Janesville Economic Development Agency and Finance Division. It is my legal opinion that said Project Plan as amended, prepared by the Economic Development Agency is complete and does comply with Section 66.1105(4) (f), Wis. Stats. According to the terms of the above cited statute, this legal opinion should now become the final component of that project plan amendment. Wald Klimczyk City Attorney wk cc: Jean Ann Wulf, City Clerk-Treasurer DEPARTMENT OF PUBLIC WORKS MEMORANDUM August 3, 2009 TO: City Council FROM: Mike Payne, Engineering Manager SUBJECT: Award of Bid Schedule “F” – 2009 (Revisited) Contract 2009-19, South River Road Greenbelt Improvement Award of Bid Schedule “G” – 2009 Contract 2009-20, Water & Sewer System Improvements – Water Main Insulation & Riverview Sewer Contract 2009-21, Salt Storage Shed Summary Bids for Public Works Schedule “F” were presented to Council at the July 13 meeting where Contract 2009-19, South River Road Greenbelt Improvement was Awarded to Greener Valley Landscaping Inc. Greener Valley Landscaping Inc. has indicated there was an error in their bid and they can not complete the work for the bid amount. Greener Valley Landscaping Inc. is paying the City 10% of their bid as required by the bid documents as a forfeiture. The second low bidder submitted a bid within the project budget and below the project estimate and should be considered for completing the work. Bids for Public Works Schedule “G” were opened on Wednesday, July 22, 2009. The Engineering Division is recommending the Council award contracts 2009-20, -21 to the low bidders as shown on the attached tabulation of bids, and that the City Council express their intent to include in the 2009 Note Issue $517,650 for the Water and Sewer System Improvement Contract. Recommendation Following Review by the Council, the Engineering Division recommends awarding contract 2009-19 to the second low bidder and contracts 2009-20, -21 to the low bidders. City Manager Recommendation I recommend approval of the second low bid for contract 2009-19 and the low bids for contracts 2009-20 and 2009-21. Suggested Motion I move to award contract 2009-19 to the second low bidder and contracts 2009- 20, -21 to the low bidders and that the City Council express their intent to include \\petey\cojhome\agenda review\approved agenda items\2009\8-10-2009\award of contracts - memo.doc in the 2009 Note Issue $517,650 for the Water and Sewer System Improvement Contract. Background Contract 2009-19, South River Road Greenbelt Improvement This contract restores an existing greenbelt to correct ongoing erosion. The project includes tree and brush removal, excavation, grading, installing heavy rip rap, and restoration of the work area. Engineering staff held a neighborhood meeting and the neighbors support the project. Funding for this project was included in the 2008 Note Issue. We received four (4) bids for this project with Greener Valley Landscaping Inc. providing the low bid. This Contract was previously Awarded to Greener Valley Landscaping Inc. but Greener Valley Landscaping Inc. will be paying the City 10% of their bid amount rather than sign the contract due to an error during bidding. The Engineering Division is recommending award of this contract to Custon Ditching, Inc. of Beloit, Wisconsin in the amount of $75,312.50 as the second low bidder. Contract 2009-20, Water & Sewer System Improvements – Water Main Insulation & Riverview Sewer This contract has two components and corrects an ongoing sewer problem which has caused several sewer back-ups discharging to the Rock River as well as insulating watermains in portions of the Loch Lomond subdivision to prevent future water service freeze-ups. The project includes all corrective action and restoration of the work areas. Funding for this project is proposed in the 2009 Note Issue. We received three (3) bids for this project. with R.T. Fox Contractors providing the low bid. The Engineering Division is recommending award of this contract to R.T. Fox Contractors of Edgerton, Wisconsin in the amount of $517,650. There were two parts to this bid for the project which are described below: ? Part A – Riverview Drive Sewer Repairs ? Part B – Watermain Insulation Contract 2009-21, Salt Storage Shed This contract constructs a third salt storage facility to increase storage capacity and take advantage of economies of scale when purchasing salt prior to the winter season. The buiding is designed to hold 2,000 tons of salt. Funding for this project was included in the 2008 Note Issue. We received five (5) bids for this project with Paulson Kimball Construction providing the low bid. The Engineering Division is recommending award of this \\petey\cojhome\agenda review\approved agenda items\2009\8-10-2009\award of contracts - memo.doc contract to Paulson Kimball Construction of Janesville, Wisconsin in the amount of $135,402. The alternate bid items for the project are the following: ? Alternate Bid Item A – substitute poured in place frost walls in lieu of precast concrete. ? Alternate Bid Item B – installation of ionization protection system for metal structural framing. Attachments cc: Eric Levitt Jacob J. Winzenz \\petey\cojhome\agenda review\approved agenda items\2009\8-10-2009\award of contracts - memo.doc Bid Opening: 17 June 2009 Page 1 of 1 CITY OF JANESVILLE TABULATION OF BIDS PUBLIC WORKS BID SCHEDULE “F” – 2009 2009-19 SOUTH RIVER ROAD GREENBELT IMPROVEMENT Greener Valley Landscaping, Inc. Total Bid: $36,440.00 1702 Highland Avenue Janesville, WI 53545 Custom Ditching, Inc. Total Bid: $75,312.50 17 Auburn Drive Beloit, WI 53511 Bjoin Limestone, Inc. Total Bid: $76,236.25 7308 W. State Road 11 Janesville, WI 53548 Rock Road Companies, Inc. Total Bid: $148,182.50 P.O. Box 1779 Janesville, WI 53547 \\Petey\COJHome\Agenda Review\Approved Agenda Items\2009\8-10-2009\Award of Contracts - Bid Schedule F - C19 Results.doc Bid Opening: 22 July 2009 CITY OF JANESVILLE TABULATION OF BIDS PUBLIC WORKS BID SCHEDULE “G” – 2009 2009-20 WATER & SEWER SYSTEM IMPROVEMENTS – WATER MAIN INSULATION & RIVERVIEW SEWER R. T. Fox Contractors, Inc. Part A: $180,850 5628 Highway M Part B: $336,800 Burlington, WI 53105 Total: $517,650 E & N Hughes Co., Inc. Part A: $198,630 N2629 Coplien Road, P.O. Box 408 Part B: $361,380 Monroe, WI 53566 Total: $560,010 Globe Contractors, Inc. Part A: $287,400 N50 W23076 Betker Road Part B: $444,190 Pewaukee, WI 53072 Total: $731,590 2009-21 SALT STORAGE SHED Paulson Kimball Construction Base Bid: $135,402 917 Todd Drive Alternate Item A: $0 Janesville, WI 53546 Alternate Item B: $0 Total Bid: $135,402 Engineered Buildings, Inc. Base Bid: $149,000 2863 N. 79th Street Alternate Item A: $0 Milwaukee, WI 53222 Alternate Item B: $0 Total Bid: $149,00 Gilbank Construction, Inc. Base Bid: $154,000 301 Scot Drive, P.O. Box 718 Alternate Item A: $0 Clinton, WI 53525 Alternate Item B: $0 Total Bid: $154,000 Cover-All of Wisconsin, LLC Base Bid: $146,460 C4640 Hwy. 97, P.O. Box 35 Alternate Item A: $5,470 Stratford, WI 54484-0035 Alternate Item B: $13,300 Total Bid: $165,230 Bulk Storage, Inc. Base Bid: $197,170 28101 S. Yates Avenue Alternate Item A: $0 Beecher, IL 60401 Alternate Item B: $0 Total Bid: $197,170 \\Petey\COJHome\Agenda Review\Approved Agenda Items\2009\8-10-2009\Award of Contracts - Bid Schedule G-2009 Results.doc Community Development Department Memorandum August 10, 2009 TO: Janesville City Council FROM: Al Hulick, Development Specialist SUBJECT: Action on a proposed resolution granting a utility easement on city property located at the southwest corner of North Parker Drive and Wall Street (Downtown Parking Garage) (File Resolution No. 2009- 625). I. RECOMMENDATION The Plan Commission and Community Development Department recommend that the City Council support a motion to approve Resolution No. 2009-625 granting a utility easement on the city-owned property located at the southwest corner of North Parker Drive and Wall Street as necessary for the construction of the downtown parking structure. CITY MANAGER RECOMMENDATION The City Manager concurs with the Plan Commission and Community Development Department’s recommendation. II. REQUEST The City intends to build a parking structure at the southwest corner of Wall Street and North Parker Drive over the existing surface parking lot. Although there is no set timetable for construction of the structure, the project will require the relocation of several existing utilities and two electrical transformers that interfere with the proposed building site. A new utility easement must be granted across the east portion of the property to accommodate the relocation of the various easements and electrical transformers (see attached Map 1). City Council review and recommendation is required because the easement is being granted across public lands. III. ANALYSIS A. The proposed utility easement is approximately 18-feet in width and will accommodate various utility service lines and two electrical transformers that must be relocated within the proposed easement area as part of the construction process for the new downtown parking structure. B. The proposed utility easement will be on the parking lot site behind and adjacent to the properties located along the east side of North Main Street between Milwaukee Street and North Main Street. C. The City’s Engineering Staff has determined that the proposed easement will accommodate the existing utilities that will need to be relocated. The affected utility providers have been contacted and have agreed to relocate their respective utilities to the newly proposed utility easement at no cost to the City. These facilities will be relocated in conjunction with the timeline established for construction of the new downtown parking structure. Therefore, City Staff supports the granting of this easement. IV. PLAN COMMISSION ACTION – 20 JULY 2009 Al Hulick, Development Specialist, presented the written staff report. Commissioner Werner asked what was different with the new parking structure design, as compared to the former parking garage that existed on the site, that would require the easement relocation. Cantrell stated that when the parking lot was constructed the utility company installed a utility line running diagonally through the parking lot without obtaining an easement. Since the utility line location is conflicting with the construction of the parking garage, they must relocate the line at their expense. We have negotiated an acceptable easement location with the utility company which will accommodate their needs and not negatively impact future city plans. There was a motion by Commissioner Hanewold with a second by Chairperson Helgerson to forward the easement request to the City Council with a favorable recommendation. The motion carried on a 6-0-0 vote. cc: Brad Cantrell Duane Cherek Resolution No. 2009-625 A resolution granting a utility easement on city property located at the southwest corner of North Parker Drive and Wall Street (Downtown Parking Garage) WHEREAS , the City of Janesville, Rock County, Wisconsin, is the owner of the property located at: Part of Block 34, Original Plat, City of Janesville, Rock County, Wisconsin, Described as follows: Commencing at the most northerly corner of said Block 34, also being the R/W intersection of East Wall Street and North Parker Drive; thence S50°03'35"W, along the southerly R/W line of East Wall Street, 158.46 ft. to the POINT OF BEGINNING; thence S40°03'47"E, 172.18 feet; thence N50°03'15"E, 157.76 feet, to the westerly R/W line of North Parker Drive; thence S39°49'40"E, along said westerly R/W line, 10.00 feet; thence S50°03'15"W, 157.36 feet; thence S50°03'49"W, 19.00 feet; thence N36°10'48"W, 9.54 feet; thence N40°42'39"W, 47.50 feet; thence S50°03'35"W, 32.86 feet; thence N39°56'25"W, 15.00 feet; thence N50°03'35"E, 35.00 feet; thence N39°47'21"W, 43.74 feet; thence S50°03'35"W, 6.95 feet; thence N 39°45'00"W, 21.19 feet; thence N50°13'07"E, 4.78 feet; thence N39°48'15"W, 45.25 feet, to the southerly R/W line of East Wall Street; thence N50°03'35"E, along said southerly R/W line, 18.00 feet to the POINT OF BEGINNING. WHEREAS , as part of the proposed construction of the Downtown Parking Structure at the southwest corner of North Parker Drive and Wall Street, several existing underground and above ground utilities will need to be relocated to the proposed public utility easement to accommodate said construction; and WHEREAS , the City Planning and Engineering staff has determined that the located of the newly proposed easement along the rear lot line of the buildings located along the east side of North Main Street between Wall Street and East Milwaukee is the most appropriate place to relocate the existing utilities; and WHEREAS , the existing utilities will be relocated to the proposed public utility easement at no cost to the City of Janesville; and WHEREAS , on 20 July 2009 the Janesville Plan Commission, pursuant to Section 62.23, Wisconsin Statutes, reviewed the granting of this easement on public land and found it to be consistent with City Plans but did not review the financial aspects of the transaction; and WHEREAS , providing this easement is in the best interest of the City and its residents; and NOW, THEREFORE, BE IT RESOLVED BY THE COMMON COUNCIL OF THE CITY OF JANESVILLE that the City of Janesville hereby grants a public utility easement located at: Utility Easement: Part of Block 34, Original Plat, City of Janesville, Rock County, Wisconsin, Described as follows: Commencing at the most northerly corner of said Block 34, also being the R/W intersection of East Wall Street and North Parker Drive; thence S50°03'35"W, along the southerly R/W line of East Wall Street, 158.46 ft. to the POINT OF BEGINNING; thence S40°03'47"E, 172.18 feet; thence N50°03'15"E, 157.76 feet, to the westerly R/W line of North Parker Drive; thence S39°49'40"E, along said westerly R/W line, 10.00 feet; thence S50°03'15"W, 157.36 feet; thence S50°03'49"W, 19.00 feet; thence N36°10'48"W, 9.54 feet; thence N40°42'39"W, 47.50 feet; thence S50°03'35"W, 32.86 feet; thence N39°56'25"W, 15.00 feet; thence N50°03'35"E, 35.00 feet; thence N39°47'21"W, 43.74 feet; thence S50°03'35"W, 6.95 feet; thence N 39°45'00"W, 21.19 feet; thence N50°13'07"E, 4.78 feet; thence N39°48'15"W, 45.25 feet, to the southerly R/W line of East Wall Street; thence N50°03'35"E, along said southerly R/W line, 18.00 feet to the POINT OF BEGINNING. Bearings are referenced to the Southerly R/W line of East Wall Street, as shown on Ronald Combs Plat of Survey of Block 34, dated August 30, 2001, which bears S50°03'35"W. Containing 5408 sq ft (0.12 Ac) BE IT FURTHER RESOLVED that the City Manager and City Clerk of the City of Janesville are hereby authorized to negotiate, draft, enter into and execute, on behalf of the City of Janesville, a proposed public utility easement, prepare and file such other documents, forms and papers pertaining to this transaction as may, from time to time, be necessary or desirable to effectuate the intent of this resolution and/or easement. 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: Community Development Department Prepared by: Community Development Department DEPARTMENT OF PUBLIC WORKS MEMORANDUM August 3, 2009 TO: City Council FROM: Daniel L. Lynch, PE, Utility Director SUBJECT: Discussion and Direction to Staff on Proceeding to Bid an East Janesville Water Towerand Related Large DiameterWater Mains Summary The City of Janesville has experienced residential growth to the northeast. This growth has increased the demand on the water distribution system creating a need for additional eastside water storage. The City’s Engineering Department, Water Utility staff and AECOM, the engineering consultant for this project, have prepared the necessary reports, plans and specifications for the water tower and transmission main portions of this project. This project has been approved by the Wisconsin Department of Natural Resources (WDNR) and is ready to proceed to the bidding process. Unfortunately, the Janesville project is not presently on the WDNR’s list of funded projects, but it is the next major project eligible to receive funding. To remain eligible for WDNR funds (possibly up to $2.5 million in a grant) the City should continue with this project through the bidding process, but hold off on awarding any construction contracts. Completing the bidding process will help keep this project eligible for WDNR funds if they become available. The WDNR will award available funds to projects which are the most ready to proceed. Obtaining bids does not obligate the City to award contracts and if the WDNR funding does not materialize, the City can reject all bids. Department Recommendation Utility staff support proceeding with this project through the bidding process. Obtaining bids is the best step the City can take to maintain its eligibility for federal stimulus grants. Although this project did not make the initial WDNR funding list it still has an extremely good chance to receive a significant grant, but only if we continue through the bidding process. Regardless of the funding issue, this project will still need to come back before the City Council before it can proceed to the construction phase. Suggested Council Action Move to direct that staff bid the construction of an eastside water tower and related infrastructure and bring it back before the City Council prior to the award of any contract. City Manager Recommendation The City Manager understands the Utility Director’s desire to move forward with this project in the event that Stimulus funding is awarded. In looking at the issue, I looked at the following factors: ? Moving forward with the project in anticipation of receiving Stimulus funds will have minimal impact on user rates since we assume that only $2 million would be eligible for funding. ? The elevated tank project is estimated to increase rates 9% without stimulus funding in today’s dollars versus increasing rates by 7% with stimulus funding. ? Based on my review, growth slowing may have an impact on the perceived immediate need for the elevated water tank. ? The fact that it creates an additional water rate increase in one year time frame concerns me during these economic times. ? The City does not currently own land for the project, and I would recommend against bidding any project without the necessary land and easement already being procured by the City. Based on the above factors, I would recommend the Council proceed with caution on this project or defer the project until we receive further information from WDNR on whether we are eligible to receive funds. Analysis The purpose of this section is not to discuss the need for this project; rather it is to explain why the City should continue with the project at this time. The project’s need was discussed in the City Council memorandum dated April 17, 2009. Additional information concerning the need for this project, including an analysis of storage options is also available. Reasons to continue moving forward with this project essentially relate to maintaining the City’s eligibility to receive two million dollars or more in a federal stimulus grant. If we halt the process now, any funds which become available will go to a drinking water project in another community. If we go through the bidding phase, we continue to stay eligible; we will hold our place in line. While this project barely missed making the WDNR’s Project Priority Funding List, it is the next major project eligible to receive funds. The following is a list of reasons to let this project continue to the next step: ? There is an identified need for this project and the City has expended a great deal of effort both in terms of staff time and consultant effort (cost) to keep this project eligible for a stimulus grant. ? The tower project is ready to bid and can proceed to the bidding phase without much additional effort by City staff or additional cost to the City. ? The tower project is the next major project on the WDNR Priority Funding List and still has a very good chance of getting a grant. ($40 million in grants are available.) The Janesville tower project is number 48 on the funding list; the first 46 o th are proposed for funding. (The 47 project is only for $35,000.) These types of projects are already being bid in Illinois and the bids are o coming in lower than the estimated amounts. If this trend continues and the actual bids are 10% less than the project estimates, an additional $4,000,000 will be available from the projects ahead of the water tower for reallocation. Cost estimates for projects included in the Priority Funding List use a 10% o project contingency. When the project is bid, the WDNR reduces the contingency to 5%, which equals about $2,000,000 for the projects ahead of the water tower. It is unlikely that the first 46 projects will all bid without a problem. If a bid o for any of these 46 projects is contested or for any reason cannot be st awarded by October 1, that project loses its funding. There will not be time to rebid the project and that community will lose its grant. ? To remain eligible for American Recovery and Reinvestment Act (ARRA) funds, construction contracts must be bid and ready to proceed on or before October 1, 2009. While the City will not award any construction contracts for this project without Council approval, by proceeding through the bid process at this time, the City will be in a position to move very quickly if funds become available. ? Receiving bids to construct the tower or the water mains does not obligate the City to award those bids. The bids will be preconditioned to make it very clear to the bidders that the City does not intend to award these projects without significant financial assistance. Only the Council will determine if a financial assistance offer is adequate. ? The project will only get more expensive if it is delayed; both in terms of escalating construction costs, but also in terms of grant availability. It is unlikely that grants of this magnitude will be available in the future. ? The same engineering consultant will be providing construction-related and inspection services for both the water tower and the wastewater treatment plant projects allowing for some savings in construction-related engineering services. There will be a financial impact of this project on the community. Even with a major stimulus grant, this project will still cause water rates to increase. If this project receives a grant of two million dollars it will increase water rates to the average residential customer by approximately seven percent or $3.21 per quarter. However, without any stimulus grant, the water rate impact will be even bigger. Without any financial assistance this project will increase water rates by nine percent of $4.13 per quarter. cc: Eric Levitt, City Manager Jay Winzenz, Director of Administrative Services