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Full Agenda Packet CITY OF JANESVILLE CITY COUNCIL MEETING AGENDA MONDAY, October 11, 2010 7:00 P.M. 1. Call to Order and Pledge of Allegiance. 2. Roll Call. 3. Regular City Council meeting minutes of September 27, 2010. “C” 4. Licenses; and Recommendations of the Alcohol License Advisory Committee including a negative recommendation for a Class B intoxicating liquor and fermented malt beverage license for MACSFORYOU AND FRIENDS, LLC d/b/a Club Haven. (Refer to separate agenda.) “C” 5. Action on a motion to approve final Certified Survey Map 10008-C, Clinton Distribution Center, 4 lots along Freedom Lane. “C” 6. Action on a proposed resolution recognizing the firefighters and paramedics of the Janesville Fire Department. (File Res. No. 2010-740) 7. Recognition of City of Janesville support of armed services: Staff Sergeant Luke Creed present flag which was flown over Forward Base. OLD BUSINESS 1. Requests and comments from the public regarding items on the Agenda not requiring a public hearing. 2. Action on a proposed resolution authorizing the issuance of $6,765,000 General Obligation Promissory Notes, Series 2010-A, and $1,055,000 taxable General Obligation Promissory Notes, Series 2010-B, of the City of Janesville, Wisconsin, and providing the details thereof. (File Res. No. 2010-728) 3. Second reading, public hearing and action on a proposed ordinance amending JGO Chapter 2.56 regulating the payment of prevailing wages on public works construction projects and publicly funded private construction projects with penalties as set forth in proposed JGO 2.56.070. (File Ord. No. 2010-462) ----------------------- “C” – This designation indicates an item that the City Council will take up under a Consent Agenda. City Council Agenda – October 11, 2010 Page 2 NEW BUSINESS 1. Action on a proposed resolution authorizing the City Manager to enter into a management agreement with Kemper Sports Management, Inc. for the management, operation and maintenance of Riverside and Blackhawk Golf Courses. (File Res. No. 2010-739) 2. Direction to staff on implementation of installation of planned unfunded sidewalks: Pedestrian Transportation Corridor Plan. 3. Presentation of Milwaukee Street and Court Street two-way traffic study. 4. Action on a proposed resolution authorizing the acquisition of tax foreclosed property at 1332 Hawthorne Avenue. (File Res. No. 2010-736) 5. Action on a proposed resolution authorizing demolition of 903 McKinley Street and direction to staff on disposition of 203 Linn Street. (File Res. No. 2010-737) 6. Review and approval of an economic development grant for MCDJ LLC (DBA as Sneakers Sports Bar and Grill), 1221 Woodman Road. 7. Action on a proposed resolution authorizing a 10 year special assessment payment plan for Austin Conservancy Group, LLC. (File Res. No. 2010-738) 8. Action on a proposed resolution authorizing the City Manager to submit a grant request to the USEPA for funding through their 2011 Brownfields Program. (File Res. No. 2010-741) 9. Introduce and schedule a public hearing on a proposed ordinance amending the City’s solid waste ordinance. (File Ord. No. 2010-463) 10. Requests and comments from the public on matters which can be affected by Council action. 11. Matters not on the Agenda. 12. Consideration of one or more motions to convene into closed session, pursuant to Wisconsin Statute Section 19.85(1)(e) for the purpose of deliberating, negotiating, and/or setting the bargaining, negotiating, and/or bidding terms and conditions for acquiring certain property(ies), since competitive and/or bargaining reasons require a closed session. The use of audible cell phone ringers and active use and response to cellular phone technology by the governing body, staff and members of the public is discouraged in the Council Chambers while the Council is in session. PROCEEDINGS OF THE CITY COUNCIL CITY OF JANESVILLE, WISCONSIN REGULAR MEETING September 27, 2010 VOL. 61 NO. 17 Regular meeting of the City Council of the City of Janesville held in the Municipal Building on September 27, 2010. The meeting was called to order by Council President Voskuil at 7:00 PM. Council President Voskuil led the Council in the Pledge of Allegiance. Present: Council President Voskuil, Councilmembers Brunner, McDonald, Perrotto, Rashkin, Steeber and Truman. CONSENT AGENDA Regular City Council meeting minutes of September 13, 2010. Licenses and Recommendations of the Alcohol License Advisory Committee. Financial statement for the month of August, 2010. Action on a proposed resolution deferring special assessments for the property located at 402 South Washington Street. (File Res. No. 2010-732) Council President Voskuil stated that all items on the consent agenda, including the amendment to the minutes submitted by the Clerk-Treasurer, would be approved as recommended if there were no objections. There were none. OLD BUSINESS 1. Requests and comments from the public regarding items on the Agenda not requiring a public hearing. Burdette Erickson, 115 S. High St. and Teresa McKeown, representing Habitat for Humanity spoke in favor of the acquisition and building demolition of property located at 176 Lincoln Street (NB #2). Ms. McKeown stated that if the City purchased the property they would salvage building materials. Allen Ellefson, 1245 Bouchard Ave., Betty Ellefson, 1245 Bouchard Ave., Kevin Ellefson, 1027 S. Pearl St., Terry Ellefson, 203 Elliott St., Carol Garry, 126 E. State St., Joseph Knilans, 1600 Alpine Dr., Bruce Steube, 1215 Bouchard Ave., Angie Viles, 1238 Bouchard Ave., Jamie Rasmussen, 1109 Bingham Ave., Alice Thompson, 1120 Bingham Ave. and Scott Miles, 1115 Bingham Ave. spoke against introducing ordinances to annex and to zone property located adjoining LaPrairie Park south of East Delavan Drive and west of Read Road (NB #4 and 5). Meredith Helgerson, representing the Rock County Historical Society, spoke in favor of funding improvements for the Tallman House (OB #4). Attorney Robert Consigny, Eric Gilbert, and Dave Anderson, all representing Mule Hill properties, spoke in favor of the property annexation and zoning (NB #4 and 5). Andreah Briarmoon, 339 S. Locust St. spoke against the demolition of the building at 176 S. Locust St. (NB #2). She also requested that a citizen committee for capital projects be created and consulted before the City borrows money (OB #4). Council President Voskuil stated that agenda items New Business #4 and #5 would be considered at this time. 4. & 5. Introduce and schedule a public hearing on proposed ordinances annexing (2010-464) and zoning (2010- 465) property located adjoining LaPrairie Park south of East Delavan Drive and west of Read Road. Councilmember Steeber moved to deny the introduction of ordinance 2010-464, seconded by Councilmember Rashkin and passed by the following vote: Aye: Brunner, McDonald, Rashkin, Steeber, Truman, and Voskuil. Nay: Perrotto. No action was needed for 2010-465. (File Ord. Nos. 2010-464 & 2010-465) OLD BUSINESS 2. A proposed ordinance for a comprehensive text amendment to change the zoning and building codes with regard to detached structures received its second reading and public hearing. Bill McCoy, 1326 Putnam Ave., asked if his non-conforming house would be grandfathered in and received an affirmative response. The public hearing was closed. Councilmember Steeber moved to adopt said ordinance, seconded by Councilmember Rashkin and passed unanimously. (Revised File Ord. No. 2010-459) 3. A proposed ordinance amending the list of streets required to yield to other designated streets to include North Osborne Avenue yields to Bond Place; North Marion Avenue yields to Bond Place; North Willard Avenue yields to Bond Place; and Division Street yields to East Van Buren Street received its second reading and public hearing. Andreah Briarmoon, 339 S. Locust St., spoke in favor of the proposed ordinance. The public hearing was closed. Councilmember Steeber moved to adopt said ordinance, seconded by Councilmember Rashkin and passed unanimously. (File Ord. No. 2010-724) 4. Action on a proposed resolution authorizing the issuance of $7,620,000 in Promissory Notes for financing various public purposes. Councilmember Steeber moved to adopt said resolution and seconded by Councilmember Brunner. Councilmember Rashkin moved to amend the motion by adding $500,000 for property acquisition, seconded by Councilmember Truman and failed by the following vote: Aye: Perrotto, Rashkin, and Truman. Nay: Brunner, McDonald, Steeber and Voskuil. Councilmember Perrotto moved to amend the motion by deleting $250,000 for the Tallman House, seconded by Councilmember McDonald and failed by the following vote: Aye: Perrotto and McDonald. Nay: Brunner, Rashkin, Steeber, Truman and Voskuil. Councilmember Rashkin moved to amend the motion by adding $200,000 for property acquisition, seconded by Councilmember Truman and passed by the following vote: Aye: Brunner, Rashkin, Truman and Perrotto. Nay: McDonald, Steeber and Voskuil. Council voted on the main motion, as amended, and it passed by the following vote: Aye: Brunner, Rashkin, Steeber, Truman, and Voskuil. Nay: Perrotto, McDonald. (File Res. No. 2010-727) NEW BUSINESS Council President Voskuil Combined New Business #1 and #2. 1. Action on a proposed resolution authorizing of the conveyance of an easement across a portion of greenbelt west of Castlemoor Drive. (File Res. No. 2010-726) 2. Action on a proposed resolution authorizing the acquisition and demolition of real property located at 176 Lincoln Street. (File Res. No. 2010-733) Councilmember Steeber moved to adopt resolutions 2010-726 and 2010-733, seconded by Councilmember McDonald and passed by the following vote: Aye: McDonald, Perrotto, Rashkin, Steeber, Truman and Voskuil. Nay: Brunner. 3. A proposed ordinance amending JGO Chapter 2.56 regulating the payment of prevailing wages on public works construction projects and publicly funded private construction projects with penalties as set forth in proposed JGO 2.56.070 was introduced and scheduled for a public hearing on October 11, 2010. (File Ord. No. 2010-462) 6. Requests and comments from the public on matters which can be affected by Council action. Andreah Briarmoon, 339 S. Locust St., and Peter Apted, 324 S. Academy St. disagreed with the handling of the Case Feed Building Demolition process and procedures. Councilmembers Perrotto and Truman applauded how the City of Janesville handled the Case Feed Building. 7. Matters not on the Agenda. Councilmember Rashkin stated that the “Chalk Walk” event would be held on October 15, 2010. 8. Councilmember Steeber moved to convene into closed session, pursuant to Wisconsin Statute Section 19.85(1)(e) for the purpose of deliberating, negotiating, and/or setting the bargaining, negotiating, and/or bidding terms and conditions for acquiring certain property(ies), since competitive and/or bargaining reasons require a closed session, seconded by Councilmember Truman and passed by the following vote: Aye: Brunner, Perrotto, Rashkin, Steeber, Truman, Voskuil. Nay: McDonald. There being no further business, Council adjourned at 9:11 p.m. These minutes are not official until approved by the City Council. Jean A. Wulf, Clerk-Treasurer JANESVILLE CITY COUNCIL LICENSE AGENDA 10/11/2010 RECOMMENDED A. ELECTRICIANS–ORIGINAL Tim Lins W13969 Selwood Drive Prairie Du Sac, WI Jeffrey A. Knudtson 4269 Argosy Court, Madison, WI NEGATIVE RECOMMENDATION A. ORIGINAL CLASS B INTOXICATING LIQUOR AND FERMENTED MALT BEVERAGE LICENSE MACSFORYOU AND FRIENDS, LLC d/b/a Club Haven Mary A. McIntyre 18-24 S. River St. JANESVILLE POLICE DEPARTMENT October 7, 2010 TO: City Council FROM: Deputy Chief Dan Davis SUBJECT: Council Action on an Application for a Class B Intoxicating Liquor and Fermented Malt Beverage License by MACSFORYOU and Friends LLC, d/b/a Club Haven, 18-24 S. River Street Executive Summary At the October 5, 2010, meeting the Alcohol License Advisory Committee (ALAC) on a 3-1 vote sent a negative recommendation to the Common Council for a Class B Intoxicating Liquor and Fermented Malt Beverage License for Club Haven. The Negative Recommendation was based upon the unwillingness of Mary McIntyre to provide financial information that would show credit solvency for the business. Background Mary McIntyre first appeared before the ALAC on August 3, 2010, after applying for a Class B alcohol license. On that date, the ALAC decided to postpone a decision on the application for 30 days. The decision to postpone was based on the fact that the most recent tenant of 18-24 S. River Street, Robert Forbush, had delivered a letter to the police department on August 2, alleging that the building was subject to foreclosure action. Forbush also alleged that the building was not up to code and that the owner, Kurt Miller, had engaged in illegal activity and questionable business practices. The ALAC decided that the police department should have the opportunity to investigate Forbush’s claims of criminal activity. In a 3-1 vote the ALAC postponed the decision 30 days and asked that Mary McIntyre present a business plan and financial statement showing credit solvency for her proposed business. Detective Buescher from the police department investigated the claims of criminal activity on the part of building owner Kurt Miller. Detective Buescher determined that Forbush’s claims had no merit. On August 25, 2010, the City Clerk’s office received a business plan for Club Haven. The letter was not signed, but indicated that it was the work of Mary McIntyre. The business plan did not contain and made no mention of the financial solvency of the business. At the September 7, 2010, ALAC meeting Mary McIntyre appeared with Kurt Miller and Ryan Vega. Ryan Vega is listed as the Secretary/Member on the original Class B license application. When asked about the financial statement, Ms. McIntyre stated that she did not understand the request and thought she had done what was asked when she submitted the business plan. She also stated that she had been trying to get personal financial information from the other members of the LLC, and that she had receipts from when she paid vendors and rent. Ms. McIntyre was told that the ALAC was not interested in personal financial information, and that the ALAC was only interested in being able to confirm financial solvency of the business. The ALAC voted unanimously to allow 30 days for MACSFORYOU and Friends LLC to submit financial statements that would show financial solvency of the business. Mary McIntyre was asked to return to the October 5, 2010, ALAC meeting with that information. When Kurt Miller addressed the ALAC he intimated that the ALAC was discriminating against Mary McIntyre and her LLC because the group are homosexuals. Mary McIntyre appeared alone at the October 5, 2010, ALAC meeting. She initially said that she was withdrawing her application for a Class B license. After some discussion she stated that she did not want to withdraw the application, but said that neither she nor any other member of the LLC was willing to divulge personal financial information. She was again reminded that the ALAC was not interested in personal financial information and only wanted financial information related to the business. Ms. McIntyre said she felt that the request was unreasonable and that if she presented the information she would be asked for something else because the ALAC just did not want her to have the business. She also noted that other applicants are typically not asked to provide financial information nor does the application have a field requesting financial information. Recommendation The site at 18-24 S. River St. has a recent history of short term and problematic licensed alcohol establishments. This would have been the 8th licensed establishment at this location in the past 5 years. When the businesses dissolve, the police department routinely takes complaints of civil disputes between Kurt Miller and whoever the licensed agent at the time is. Mr. Miller has a history of finding tenants who are idealistic about their establishment’s success, but lack the business experience or skills to see that success come to fruition. While the request for financial information was somewhat out of the ordinary, some level of assurance that there was a likelihood that the business would survive seems reasonable. Ms. McIntyre was either unwilling or unable to provide the information requested therefore, the police department is recommending that the application for a Class B Intoxicating Liquor and Fermented Malt Beverage License for MACSFORYOU and Friends LLC, d/b/a Club Haven be denied. Respectfully Submitted, Deputy Chief Dan Davis C: Eric Levitt Jay Winzenz Community Development Department Memorandum October 11, 2010 TO: Janesville City Council FROM: Duane Cherek, Planning Services Manager SUBJECT: Final CSM 10008-C, City of Janesville, 4 lots along Freedom Lane and Conde Street. SUMMARY The City of Janesville has submitted a four-lot survey of land containing approximately 15 acres which will reconfigure two existing lots within TIF District No. 26. The lots are located between Freedom Lane and Conde Street east of Beloit Avenue. Clinton Aluminum is located on Lot 2. The CSM reflects a lot arrangement that results from an exchange of property between the City and Clinton as provided under a TIF Agreement. Lot 1 will be conveyed to the City in order to allow Clinton to expand the area of Lot 2. The City will retain ownership of Lot 4, while Clinton Aluminum is expected to acquire Lot 3 under the terms of a purchase offer. RECOMMENDATION The Plan Commission and Community Development Department recommend that the City Council support a motion to approve Final CSM 10008-C subject to the payment of any outstanding special assessments including taxes owed (the applicant should contact the City Clerk’s Office regarding this item). ANALYSIS A. The proposed lots are zoned M2, General Industrial District, and comply with the standards of the Subdivision Ordinance and Zoning Ordinance. B. The survey complies with the Comprehensive Plan which identifies this area as appropriate for general industrial use. C. There are no sidewalks planned for this portion of Conde Street or Freedom Lane. D. The final survey includes easements as requested by the utility companies having the rights to serve the area. The requisite note regarding use of those easements is already shown on the survey. E. Storm sewer, street light and sidewalk fees have been previously satisfied. F. Based on past practice, this survey is not subject to the parkland dedication requirements since the property is zoned for industrial use. G. The applicant should contact the City Clerk’s Office regarding the payment of any outstanding special assessments or taxes owed on the properties. PLAN COMMISSION ACTION – 4 October 2010 The Plan Commission unanimously agreed to forward Final CSM 10008-C to the City Council with a favorable recommendation subject to the conditions listed in Section I. cc: Vic Grassman Gale Price Ý·¬§ Ô·³·¬ Û Ý±²¼» Í¬ q Ô»¹»²¼ ÍËÞÖÛÝÌ Í×ÌÛ Ü¿¬»æ çñîîñïð Í½¿´»æ ïþã ìððù Ó¿° Ý±±®¼·²¿¬»æ Òóïï ÔÑÝßÌ×ÑÒ ÓßÐ Ý×ÌÇ ÑÚ ÖßÒÛÍÊ×ÔÔÛ ÓßÐ ï ÝÍÓ ïðððèóÝ ÐÔßÒÒ×ÒÙ ÍÛÎÊ×ÝÛÍ ÍæÐ®±¶»½¬ÄÐ´¿²²·²¹ÄÍ«®ª»§Ó¿°ÄÍ«®ª»§Ó¿°îðïðÄÒóïïÁïðððèóÝ Fire Department Memorandum October 4, 2010 TO: City Council FROM: Jim Jensen, Deputy Fire Chief SUBJECT: Action on a proposed resolution recognizing the Firefighters and Paramedics of the Janesville Fire Department (File Resolution No. 2010-740) Councilmember Russ Steeber and Councilmember George Brunner have requested that the City Council recognize the service and dedication of Janesville Firefighters and Paramedics as part of Fire Prevention Month. October has been designated as Fire Prevention Month and makes this time of year appropriate for such recognition. In October, citizens are encouraged to recognize the sacrifices and contributions of our Firefighters and Paramedics and to honor these men and women for their dedication to duty. The City of Janesville Fire Department has 94 authorized personnel. To honor these men and women, Resolution 2010-740 states the City Council’s intent to encourage all citizens to show their appreciation for the commitment to service of Janesville’s Firefighters and Paramedics. Chief Grorud and I will be in attendance along with other representatives of the Fire Department at the City Council meeting on October 11 to accept this recognition on behalf of all Janesville Firefighters and Paramedics. cc: Eric J. Levitt, City Manager Jay Winzenz, Director of Administrative Services/Assistant City Manager RESOLUTION NO. 2010-740 A Resolution recognizing the Firefighters and Paramedics of the Janesville Fire Department (File Resolution No. 2010-740) WHEREAS, October is recognized as Fire Prevention Month, a time when Firefighters and Paramedics make a concerted effort to reach out to the community to teach fire safety; and WHEREAS, we routinely witness their heroic efforts by putting themselves in harm’s way as our guardians of life and property; and WHEREAS , it is important that all citizens know and understand the duties, responsibilities, hazards, and sacrifices of their Firefighters and Paramedics, as those members of the Fire Departments recognize their duty to serve the people of their community; and WHEREAS , the Janesville City Council desires to honor the valor, service, and dedication of the Firefighters and Paramedics that serve the City of Janesville. NOW, THEREFORE, LET IT BE RESOLVED By the Common Council of the City of th Janesville , on the 11 day of October, 2010, that the month of October is to be observed as Fire Prevention Month; and BE IT FURTHER RESOLVED by the Common Council that all Janesville citizens are called upon to especially honor and show our appreciation for the Firefighters and Paramedics of the City of Janesville by deed, remark and attitude in honor of these men and women who work to protect their fellow citizens and community. 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: Wald Klimczyk, City Attorney Proposed by: Councilmember Steeber and Councilmember Brunner Prepared by: Fire Department ADMINISTRATIVE SERVICES MEMORANDUM October 5, 2010 TO: City Council FROM: Jacob J. Winzenz, Director of Admin. Services\Assistant City Manager SUBJECT: Action on a Proposed Resolution Authorizing the Issuance of $6,765,000 General Obligation Promissory Notes, Series 2010-A, and $1,055,000 Taxable General Obligation Promissory Notes, Series 2010-B, of the City of Janesville, Wisconsin, and Providing the Details Thereof (File Res. #2010- 728) Summary On September 27, 2010, Council approved Resolution #2010-727 authorizing the issuance of $7,820,000 in promissory notes to fund our annual Capital Improvement Program. The General Fund portion of the proposed Note Issue is $3,535,000. If this is approved it will result in average annual debt service of approximately $400,000. However, in 2011 some debt is being retired which results in a net increase in debt service of approximately $143,000. For the owner of an average home assessed at $114,000, this will result in a property tax increase of $4.66. Recommendation Staff recommends that the City Council adopt File Resolution 2010-728 approving the issuance of $7,820,000 on Promissory Notes. City Manager’s Recommendation The City Manager concurs with staff’s recommendation. Analysis The following table indicates the amount of proposed note proceeds that each Fund would receive. 2010 CAPITAL BUDGET/NOTE ISSUE General Fund: Public Works Program$1,125,000 Street Maintenance and Improvements550,000 Renovate Playgrounds/Maintain Equipment35,000 Bike Trail (Tripp Road to Eau Claire Road)60,000 Downtown and Neighborhood Property Acquisitions200,000 Review of Oakhill Cemetery Structures15,000 Transit Services Center (Year 5)300,000 Building Maintenance350,000 Oakhill Cemetery Maintenance Building100,000 Riverside Park Storage Building100,000 Oakhill Cemetery Chapel/Carport Repairs55,000 Tallman House250,000 Golf Course Capital100,000 Technology Enhancements100,000 ERP Phase IV (Accounting, Payroll, Human Resources)100,000 GIS Enhancements25,000 Transit Capital Projects25,000 Parks Capital45,000 $3,535,000 Special Assessments (includes Water and Wastewater)485,000 Water Fund970,000 Wastewater Fund325,000 Stormwater Fund1,125,000 Sanitation Fund240,000 Hedberg Public Library85,000 TIF/Industrial Development Fund1,055,000 TOTAL$7,820,000 The table below indicates the history of note sales over the last five years. The proposed 2010 issue is approximately 52% below the average annual amount issued between the years 2005–2009. HISTORY OF G.O. NOTE SALES 5-Issue Fund20052006200720082009 Average General Fund $6,268,000$6,460,000$4,935,000$6,395,000$7,965,000$6,404,600 Special Assessments 2,870,0004,275,0002,790,0001,535,000760,0002,446,000 Water Utility Assessable 1,090,0001,700,000650,0001,060,0000900,000 Non-Assessable 425,0003,685,000725,0001,990,0002,145,0001,794,000 Subtotal Water 1,515,0005,385,0001,375,0003,050,0002,145,0002,694,000 Wastewater Utility Assessable 945,0002,205,000810,000700,0000932,000 Non-Assessable 1,170,0001,555,0003,040,0001,185,000765,0001,543,000 Subtotal WW 2,115,0003,760,0003,850,0001,885,000765,0002,475,000 Stormwater Utility Assessable 750,0000375,000 Non-Assessable 25,0001,045,000535,000 Subtotal Storm 750,000140,00020,000775,0001,045,000910,000 2 Sanitation Fund 000465,0001,750,000443,000 Tax Incremental Districts 395,000620,00070,000915,000625,000525,000 Golf Courses 000000 Benefits Internal Service Fund 795,0000000159,000 Library 742,000160,000125,000225,000350,000320,400 TOTAL $15,450,000$20,800,000$13,165,000$15,245,000$15,405,000$16,377,000 NOTE - Does not include • Water and Wastewater Utility Revenue Bonds • Amount borrowed in 2006 to refund 1999 Promissory Notes $3,175,000 • Amount borrowed in 2009 to refund 2000, 2001, 2002, & 2003 Promissory Notes $9,065,000 The 2010 General Fund Budget contains a debt service appropriation of $5,368,643. Based upon previously issued General Obligation Debt, our 2011 General Fund debt service appropriation would be $5,089,204. However, proposed in the 2011 budget is a reallocation of golf course debt from the Golf Fund to the General Fund, and a reallocation of sanitation debt from the General Fund to the Sanitation Fund. The net effect of these changes is a reduction in 2011 General Fund debt service of $530,303 to $4,558,901. However, we anticipate having to budget approximately $438,620 for debt service, based on an average estimated 2.8% interest rate, related to the proposed 2010 Note Issue. Therefore, our total 2011 debt service appropriation will be approximately $4,997,521 or $371,122 (6.9%) less than the amount budgeted for this year. The General Fund’s share of the authorized issue will be repaid over a term of ten years. Based upon an anticipated 2.8% interest rate, Graph I presents the impact that the proposed issue will have on future annual debt service tax levies. Please note that the amount reported for 2015 does not include our $2,103,000 principal payment related to the 2005 taxable note issue (WRS refinancing). 3 GRAPH I DEBT SERVICE PAYMENT SCHEDULE General Fund Payment Amount (in thousands of dollars) 6,000 5,000 4,000 3,000 2,000 1,000 0 '08'09'10'11'12'13'14'15'16'17'18 Years Current Proposed The Special Assessments Projects (non-Water/Wastewater) account will receive $285,000 of note proceeds. We have structured the proposed debt retirement schedule so that the principal will be repaid over a term of six years (2011-2016). Please refer to Graph II, which presents the impact that the proposed note issue will have on the corresponding Special Assessments Projects debt service requirements. GRAPH II DEBT SERVICE PAYMENT SCHEDULE Special Assessments Payment Amount (in thousands of dollars) 3,500 3,000 2,500 2,000 1,500 1,000 500 0 `10`11`12`13`14`15`16`17`18`19`20 Years CurrentProposed The Water Utility is expected to receive note proceeds totaling $970,000. We have structured the proposed debt retirement schedule so that the Water Utility will repay the principal over a term of ten years. We have prepared Graph III, which indicates the effect that the proposed note issue will have on the Water Utility’s annual debt service requirements. Please note that the amount reported for 2016 does not include our 4 $950,000 principal payment related to the 2006A note issue (Water Tower). We have projected that the Utility’s 2011 debt service payment will increase decrease $39,924, or 1.26% from the amount paid in 2010. GRAPH III DEBT SERVICE PAYMENT SCHEDULE Water Utility Payment Amount (in thousands of dollars) 3,500 3,000 2,500 2,000 1,500 1,000 500 0 `10`11`12`13`14`15`16`17`18`19`20 Years CurrentProposed The Wastewater Utility is expected to receive note proceeds totaling $525,000. Please refer to Graph IV, which presents the impact that the proposed note issue will have on the Wastewater Utility’s annual debt service requirements. We have projected that the Utility’s 2011 debt service payment will increase $330,143, or 10.1% from the amount paid in 2010. GRAPH IV DEBT SERVICE PAYMENT SCHEDULE Wastewater Utility Payment Amount (in thousands of dollars) 6,000 5,000 4,000 3,000 2,000 1,000 0 `10`11`12`13`14`15`16`17`18`19`20 Years CurrentProposed The Stormwater Utility is expected to receive note proceeds of $1,125,000. Please refer to Graph V, which presents the impact that the proposed note issue will have on the 5 Stormwater Utility’s annual debt service requirements. GRAPH V DEBT SERVICE PAYMENT SCHEDULE Stormwater Utility Payment Amount (in thousands of dollars) 600 500 400 300 200 100 0 `10`11`12`13`14`15`16`17`18`19`20 Years CurrentProposed The Hedberg Public Library is expected to receive note proceeds in the amount of $85,000. We have prepared Graph VI to illustrate the effect that the proposed note issue will have on the Library’s annual debt service requirements. Please note that the amount reported for 2015 does not include our $341,000 principal payment related to the 2005 taxable note issue (WRS refinancing). We have projected that the Hedberg Public Library 2011 debt service payment will increase $7,934, or 3.4% from the amount paid in 2010. GRAPH VI DEBT SERVICE PAYMENT SCHEDULE Hedberg Public Library Payment Amount (in thousands of dollars) 300 250 200 150 100 50 0 `10`11`12`13`14`15`16`17`18`19`20 Years CurrentProposed The Sanitation Fund is expected to receive note proceeds in the amount of $240,000. Prior to 2008, Sanitation fund projects had been funded through the General Fund. The 6 2011 budget proposes to transfer all the pre-2008 sanitation debt from the General Fund to the Sanitation Fund. The 2010 note repayment has been structures so that the principal will be retired within ten years. We have prepared Graph VII to illustrate the effect that the proposed note issue. GRAPH VII DEBT SERVICE PAYMENT SCHEDULE Sanitation Fund Payment Amount (in thousands of dollars) 1,000 900 800 700 600 500 400 300 200 100 0 `10`11`12`13`14`15`16`17`18`19`20 Years CurrentProposed The TIF District #23 (Downtown) will receive $865,000. We have prepared Graph VIII to illustrate the effect that the proposed note issue will have on the TIF #23 annual debt service requirements. GRAPH VIII DEBT SERVICE PAYMENT SCHEDULE TIF 23 -Downtown Payment Amount (in thousands of dollars) 140 120 100 80 60 40 20 0 `10`11`12`13`14`15`16`17`18`19`20 Years CurrentProposed 7 The TIF#26 District (Reuther Way/Conde Street) will receive $190,000 for TIF development loans. We have prepared Graph IX to illustrate the effect that the proposed note issue will have on the TIF #26 annual debt service requirements. GRAPH IX DEBT SERVICE PAYMENT SCHEDULE TIF 26-Reuther way/condest Payment Amount (in thousands of dollars) 1,400 1,200 1,000 800 600 400 200 0 `10`11`12`13`14`15`16`17`18`19`20 Years CurrentProposed Graph X presents the impact that the proposed note issue will have on the City’s total General Obligation Debt Service requirements. Please note that the amount reported for 2015 does not include our $3,000,000 principal payment related to the 2005 taxable note issue (WRS refinancing) or the $950,000 related to the water tower borrowed with issue 2006A. These notes will be refinanced to extend the term of the debt. GRAPH X DEBT SERVICE PAYMENT SCHEDULE General Obligation Debt-all Funds Payment Amount (in thousands of dollars) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 `10`11`12`13`14`15`16`17`18`19`20 Years CurrentProposed The Council Policy Statement – “Debt Management” references the several debt ratios, 8 which are used by investors and financial rating analysts when they review the City’s credit worthiness. These ratios are: Applicable to Legal Debt Margin; Debt Per Capita – All Funds (G.O. & Revenue Debt); Debt as Percentage of Equalized Value; and General Fund Debt Service as Percentage of Total Actual Expenditures. Attachment I illustrates these ratios. It should be noted that we are proposing to issue $7,820,000 in debt, whereas, the total amount of existing debt principal scheduled to be retired this year will total $14,917,519. During the Council Meeting of October 11, 2010, the Council will consider Resolution #2010-728 which will finalize their consideration of City projects, which are proposed to be financed by the issuance of long-term debt (Exhibit I). It should be noted, regarding the General Fund debt service requirements, based upon an average estimated interest rate of 2.8% and a term of ten years, each $100,000 of note proceeds will result in an average annual debt service payment of approximately $11,300. For Council’s reference, also attached is a Memorandum Report, which describes the scope of the individual projects (Exhibit II). This attachment was also included with the previously adopted Resolution #2010-727, which authorized the issuance of these notes. If you should require any additional information concerning the overall fiscal impact that the proposed 2008 G.O. Note Issue will have on the City’s finances, please feel free to contact me at your convenience. Attachments J:\Finance & Administration\Finance Administration\Debt\Note Issue\Spring 2010\Details Memo.doc 9 Ü»¾¬ ÐÛÎ ÝßÐ×Ìß ßÔÔ ÚËÒÜÍ Ù»²»®¿´ Ñ¾´·¹¿¬·±² Ü»¾¬ $ Amount Percent 1500 100 80 1200 60 900 40 600 20 300 0 0 2000200120022003200420052006200720082009 2000200120022003200420052006200720082009 Year Year Ù»²»®¿´ Ú«²¼ ÙòÑò Ü»¾¬ Ù»²»®¿´ Ñ¾´·¹¿¬·±² Ü»¾¬ PercentPercent 520 416 3 12 2 8 1 4 0 0 2000200120022003200420052006200720082009 2000200120022003200420052006200720082009 Year Year RESOLUTION NO. 2010-728 RESOLUTION AUTHORIZING THE ISSUANCE OF $6,765,000 GENERAL OBLIGATION PROMISSORY NOTES, SERIES 2010-A, AND $1,055,000 TAXABLE GENERAL OBLIGATION PROMISSORY NOTES, SERIES 2010-B, OF THE CITY OF JANESVILLE, WISCONSIN, AND PROVIDING THE DETAILS THEREOF Be it resolved by the City Council of the City of Janesville, Wisconsin, as follows: Section 1. Authority and Purpose . This resolution is adopted pursuant to Section 67.12(12) of the Wisconsin Statutes to authorize the issuance of notes for the improvements or purposes described below. First, $6,765,000 General Obligation Promissory Notes, Series 2010-A (the "Series 2010-A Notes"), for the following purposes: (a) $1,740,000 to construct and improve streets; (b) $1,220,000 to construct and improve storm sewers; (c) $110,000 to acquire, improve and maintain parks and public grounds; (d) $1,505,000 to acquire, improve and maintain public buildings and grounds; (e) $805,000 to acquire capital equipment; (f) $240,000 to construct and close landfills; (g) $795,000 to extend and improve the waterworks system; and (h) $350,000 to extend and improve the sanitary sewer system. Second, $1,055,000 Taxable General Obligation Promissory Notes, Series 2010-B (the "Series 2010-B Notes" and, collectively with the Series 2010-A Notes, the "Notes"), for the purpose of providing financial assistance for community development. The foregoing improvements or purposes are each hereby authorized to be made or undertaken by the City of Janesville, Wisconsin. For the purpose of paying principal of and interest on the notes, there is hereby levied on all the taxable property in the City a direct, annual, irreparable tax sufficient for that purpose. Section 2. Authorization and Terms of Notes . To meet part of the estimated cost of the improvements or purposes described in Section 1 of this resolution, there is hereby appropriated the sum of $7,820,000. For the purpose of financing said appropriation, (i) Series 2010-A Notes of the City shall be issued and sold in an aggregate principal amount of $6,765,000, and (ii) Series 2010-B Notes of the City shall be issued and sold in an aggregate principal amount of $1,055,000. The Notes shall be designated as described in Section 1 and shall be issuable in the denominations of $5,000 or any integral multiple thereof. Each series of Notes shall be numbered consecutively from 1 upwards in order of their issuance and may bear such other identifying numbers or letters as may be useful to facilitate the registration, transfer 1 4831-2213-2999.1 and exchange thereof. Each Note shall be dated as of the interest payment date next preceding the date of issuance thereof, except that (a) if such date of issuance shall be prior to the first interest payment date, said Note shall be dated as of the date of its initial delivery, (b) if such date of issuance shall be an interest payment date, said Note shall be dated as of such interest payment date, or (c) if interest due on said Note shall not have been paid in full, then, notwithstanding any of the foregoing provisions, said Note shall be dated as of the date to which interest has been paid in full on said Note. The Notes shall mature and bear interest on the dates and in the amounts established by subsequent action of the City Council. The principal of and premium, if any, on the Notes shall be payable in lawful money of the United States of America at the principal corporate trust office of the bank, trust company or national banking association designated in Section 7 of this resolution, as note registrar, or at any additional or successor paying agent or fiscal agent designated by the City pursuant to Section 67.10(2), Wisconsin Statutes. Interest on the Notes shall be payable in lawful money of the United States of America on each interest payment date to the registered owners of record thereof appearing on the registration books maintained by the City for such purpose at the principal office of the note registrar, as of the close of business on the fifteenth day of the calendar month next preceding the applicable interest payment date. Interest on the Notes shall be paid by check or draft mailed to such registered owners at their addresses appearing on the registration books. The Notes shall be subject to redemption prior to maturity as provided by subsequent action of the City Council. In the event of the redemption of less than all of a series of Notes of like maturity, the aggregate principal amount thereof to be redeemed shall be $5,000 or an integral multiple thereof, and the note registrar shall assign each Note of such maturity a distinctive number for each $5,000 principal amount of such Note and shall select by lot from the numbers so assigned as many numbers as, at $5,000 for each number, shall equal the principal amount of such Notes to be redeemed. The Notes to be redeemed shall be the Notes to which were assigned the numbers so selected, provided that only so much of the principal amount of each Note shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. Notice of the redemption of Notes shall be mailed not less than 30 days nor more than 60 days prior to the date fixed for such redemption to the registered owners of Notes to be redeemed at their last addresses appearing on said registration books. The Notes or portions thereof specified in said notice shall become due and payable at the applicable redemption price on the redemption date therein designated, and if, on the redemption date, moneys for payment of the redemption price of all the Notes or portions thereof to be redeemed, together with interest to the redemption date, shall be available for such payment on said date, then from and after the redemption date interest on such Notes or portions thereof shall cease to accrue and shall become payable. If there shall be drawn for redemption less than all of a Note, the City shall execute and the note registrar shall authenticate and deliver, upon the surrender of such Note, without charge to the owner thereof, for the unredeemed balance of the Note so surrendered, Notes of like maturity and of the denomination of $5,000 or any integral multiple thereof. The Notes may be initially issued in temporary form and shall be exchanged for definitive printed Notes as soon as possible. The temporary Notes shall be executed as provided herein and shall be in substantially the form set forth in Section 5 hereof. Section 3. Execution and Authentication of Notes . The Notes shall be executed in the name of the City by the manual or facsimile signatures of its City Manager and City Clerk, and the corporate seal of the City, or a facsimile thereof, shall be thereunto affixed, impressed or otherwise reproduced thereon. In case any officer whose signature, or a facsimile of whose signature, shall appear on any Notes shall cease to hold such office before the issuance of the Notes, such Notes shall nevertheless be valid and sufficient for all purposes, the same as if the person whose signature, or a facsimile thereof, appears on such Notes had not ceased to hold such office. Any Note may be signed, sealed or attested on behalf of the City by any person who, on the date of such act, shall hold the proper office, notwithstanding that at the date of such Note such person may not have held such office. No recourse shall be had for the payment of any Notes against any officer who executes the Notes. The Notes shall bear thereon a certificate of authentication executed manually by the note registrar. No Note shall be entitled to any right or benefit under this resolution or shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the note registrar. Section 4. General Obligations . The full faith and credit of the City are hereby irrevocably pledged to the punctual payment of the principal of and interest on the Notes. The Notes shall be direct and general obligations of the City, and the City shall be obligated to levy ad valorem taxes upon all the taxable property in the City for the payment of the Notes and the interest thereon, without limitation as to rate or amount. Section 5. Form of Notes . The Notes shall be issued as fully registered Notes and shall be substantially in the following form, the blanks to be appropriately completed when the Notes are printed: [FORM OF NOTE] United States of America State of Wisconsin County of Rock CITY OF JANESVILLE [GENERAL OBLIGATION PROMISSORY NOTE SERIES 2010-A] [TAXABLE GENERAL OBLIGATION PROMISSORY NOTE SERIES 2010-B] REGISTERED NO. REGISTERED $ Dated Date Interest Rate Maturity Date CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: The CITY OF JANESVILLE, a municipal corporation of the State of Wisconsin situate in the County of Rock, acknowledges itself indebted and for value received hereby promises to pay to the registered owner identified above, or registered assigns, the principal amount specified above on the maturity date specified above, unless this note shall be redeemable and shall have previously been called for redemption and payment of the redemption price made or provided for, and to pay interest on such principal amount from the dated date hereof at the interest rate per annum specified above, payable in lawful money of the United States of America on February 1, 2011, and semiannually thereafter on the first days of August and February in each year until the principal amount shall have been paid, by check or draft mailed to the registered owner of record hereof as of the fifteenth day of the calendar month next preceding such interest payment date, at the address of such owner appearing on the registration books maintained by the City for such purpose at the principal corporate trust office of Wells Fargo Bank, N.A., in the City of Chicago, Illinois, as fiscal agent pursuant to Section 67.10(2), Wisconsin Statutes, and as note registrar or its successor (the “Note Registrar”). This note, as to principal and premium, if any, when due, will be payable in lawful money of the United States of America upon presentation and surrender of this note at the office of the Note Registrar. The full faith and credit of the City are irrevocably pledged for the punctual payment of the principal of and interest on this note according to its terms. This note is part of a series of notes issued in the aggregate principal amount of $__________, which are all of like tenor except as to date, maturity, option of redemption and rate of interest. The notes are being issued for the following purposes: [(i) to construct and improve streets; (ii) to construct and improve storm sewers; (iii) to acquire, improve and maintain parks and public grounds; (iv) to acquire, improve and maintain public buildings and grounds; (v) to acquire capital equipment; (vi) to construct and close landfills; (vii) to extend and improve the waterworks system; and (viii) to extend and improve the sanitary sewer system] [to provide financial assistance for community development], including the costs of issuance of the notes. The notes are authorized and issued under and pursuant to Section 67.12(12) of the Wisconsin Statutes and under and in accordance with resolutions adopted by the City Council of the City on September 20, 2010 and entitled: “Resolution Authorizing the Issuance of $7,705,000 in Promissory Notes for Financing Various Public Purposes”; on October 11, 2010 and entitled: “Resolution Authorizing the Issuance of $6,765,000 General Obligation Promissory Notes, Series 2010-A, and $1,055,000 Taxable General Obligation Promissory Notes, Series 2010-B, of the City of Janesville, Wisconsin, and Providing the Details Thereof”; and on October 25, 2010, and entitled: “Resolution Awarding $6,765,000 General Obligation Promissory Notes, Series 2010-A, and $1,055,000 Taxable General Obligation Promissory Notes, Series 2010-B, of the City of Janesville, Wisconsin, Establishing Interest Rates Thereon and Levying Taxes Therefor.” The notes maturing on or after February 1, 2019 are subject to redemption prior to maturity as a whole or in part at the option of the City upon notice as herein provided, in any order of maturity and by lot within a single maturity, on February 1, 2018, and on any date thereafter, at a redemption price equal to 100% of the principal amount thereof to be redeemed plus accrued interest to the redemption date and without premium. Notice of the redemption of notes shall be mailed not less than 30 days nor more than 60 days prior to the date fixed for such redemption to the registered owners of notes to be redeemed at their last addresses appearing on such registration books. The notes or portions thereof specified in said notice shall become due and payable at the applicable redemption price on the redemption date therein designated, and if, on the redemption date, moneys for payment of the redemption price of all the notes or portions thereof to be redeemed, together with interest to the redemption date, shall be available for such payment on said date, then from and after the redemption date interest on such notes or portions thereof shall cease to accrue and shall become payable. This note is transferable only upon such registration books by the registered owner hereof in person, or by his attorney duly authorized in writing, upon surrender hereof at the office of the Note Registrar together with a written instrument of transfer satisfactory to the Note Registrar duly executed by the registered owner or by his duly authorized attorney, and thereupon a new registered note or notes, in the authorized denominations of $5,000 or any integral multiple thereof and of the same aggregate principal amount, maturity and interest rate as this note shall be issued to the transferee in exchange therefor. In like manner, this note may be exchanged for an equal aggregate principal amount of notes of the same maturity and interest rate and of any of such authorized denominations. The City or the Note Registrar may make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange of this note. No other charge shall be made for the privilege of making such transfer or exchange. The City and the Note Registrar may treat and consider the person in whose name this note is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal, premium, if any, and the interest due hereon and for all other purposes whatsoever. This note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been duly executed by the Note Registrar. It is hereby certified, recited and declared that all acts, conditions and things required to be done, exist and be performed precedent to and in the issuance of this note in order to make it a legal, valid and binding obligation of the City have been done, exist and have been performed in regular and due time, form and manner as required by law, that a direct, annual, irreparable tax has been levied by the City sufficient to pay the interest when it falls due and also to pay and discharge the principal at maturity, and that the series of notes of which this note is one, together with all other indebtedness of the City, is within every debt or other limit prescribed by law. IN WITNESS WHEREOF, the CITY OF JANESVILLE has caused this note to be executed in its name and on its behalf by the manual or facsimile signatures of its City Manager and its City Clerk, and its corporate seal, or a facsimile thereof, to be hereunto affixed or otherwise reproduced hereon. CITY OF JANESVILLE By City Manager By City Clerk CERTIFICATE OF AUTHENTICATION Date of Authentication: This note is one of the [General Obligation Promissory Notes, Series 2010-A][Taxable General Obligation Promissory Notes, Series 2010-B], described in the within mentioned resolutions. WELLS FARGO BANK, N.A., as Note Registrar By Authorized Officer ASSIGNMENT For value received the undersigned sells, assigns and transfers unto the within note and hereby irrevocably constitutes and appoints attorney to transfer the said note on the books kept for registration thereof, with full power of substitution in the premises. Dated Signature Guaranty: Section 6. Transfer, Exchange and Registry . The Notes shall be negotiable, subject to the provisions for registration of transfer contained herein. Each Note shall be transferable only upon the registration books maintained by the City for that purpose at the office of the note registrar, by the registered owner thereof in person or by his attorney duly authorized in writing, upon surrender thereof together with a written instrument of transfer satisfactory to the note registrar and duly executed by the registered owner or his duly authorized attorney. Upon the surrender for transfer of any such Note, the City shall execute and the note registrar shall authenticate and deliver a new Note or Notes registered in the name of the transferee, of the same aggregate principal amount, maturity and interest rate as the surrendered Note. Notes, upon surrender thereof at the office of the note registrar, with a written instrument satisfactory to the note registrar, duly executed by the registered owner or his attorney duly authorized in writing, may be exchanged for an equal aggregate principal amount of Notes of the same maturity and interest rate and of the denominations of $5,000 or any integral multiple thereof. For every such exchange or registration of transfer of Notes, the City or the note registrar may make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer, which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. No other charge shall be made for the privilege of making such transfer or exchange. The note registrar shall not be required to transfer or exchange any Note after notice of the redemption of all or a portion thereof has been mailed. The note registrar shall not be required to transfer or exchange any Note during a period of 15 days next preceding the mailing of a notice of redemption that could designate for redemption all or a portion of such Note. The City and the note registrar may deem and treat the person in whose name any Note shall be registered upon the registration books as the absolute owner of such Note, whether such Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of, premium, if any, or interest thereon and for all other purposes whatsoever, and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Note to the extent of the sums or sums so paid, and neither the City nor the note registrar shall be affected by any notice to the contrary. In order to provide for the initial issuance of the Notes in a form that provides for a system of book-entry only transfers, the ownership of one fully registered Note for each maturity in the aggregate principal amount of such maturity shall be registered in the name of Cede & Co., as a nominee of The Depository Trust Company, New York, New York (“DTC”). In the event that the City determines that the system of book-entry only transfers through DTC (or a successor securities depository) is not in the best interests of the Beneficial Owners (as hereinafter defined) of the Notes or is burdensome to the City, the City may notify DTC, whereupon DTC will notify the DTC Participants (as hereinafter defined) of the availability through DTC of Note certificates. In such event, the City shall issue and the note registrar shall authenticate, transfer and exchange note certificates as requested by DTC of like principal amount, series and maturity, in denominations of $5,000 or any integral multiple thereof to the identifiable Beneficial Owners, in replacement of such Beneficial Owners’ beneficial interests in the Notes. For the purposes of this paragraph, the term “Beneficial Owners” shall mean (a) those persons for whom DTC was created to hold their securities (“DTC Participants”), and (b) the persons for whom the DTC Participants acquire interests in the Notes as nominees. Section 7. Note Registrar . The City has contracted with and designated Wells Fargo Bank, N.A., Chicago, Illinois, to serve as fiscal agent pursuant to Section 67.10(2), Wisconsin Statutes, and as note registrar. The City covenants that it maintain at the designated office of such note registrar a place where Notes may be presented for payment and registration of transfer or exchange and that it shall require that the note registrar maintain proper registration books and perform the other duties and obligations imposed upon it by this resolution in a manner consistent with the standards, customs and practices of the municipal securities business. The note registrar shall signify its acceptance of the duties and obligations imposed upon it by this resolution by executing the certificate of authentication on any Note, and by such execution the note registrar shall be deemed to have certified to the City that it has all requisite power to accept, and has accepted, such duties and obligations not only with respect to the Note so authenticated but with respect to all the Notes. The note registrar is the agent of the City and shall not be liable in connection with the performance of its duties except for its own negligence or default. The note registrar shall, however, be responsible for any representation in its certificate of authentication on the Notes. The City may remove the note registrar at any time. In case at any time the note registrar shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of the note registrar, or of its property, shall be appointed, or if any public officer shall take charge or control of the note registrar or of its property or affairs, the City covenants and agrees that it will thereupon appoint a successor note registrar. The City shall mail notice of such appointment made by it to each registered owner of Notes within 20 days after such appointment. Any successor note registrar appointed under the provisions of this Section, other than the Finance Director, shall be a bank, trust company or national banking association maintaining a corporate trust office in the State of Wisconsin, the City of Chicago, Illinois, or the Borough of Manhattan, City and State of New York. Section 8. Sale of Notes . The Notes shall be advertised for sale by the City Clerk in the manner provided herein, and the City Clerk is authorized to circulate an Official Statement prepared by Wisconsin Public Finance Professionals, LLC, Milwaukee, Wisconsin, and an Official Notice of Sale. When the Notes shall have been sold, this Council will adopt the proceedings to award the Notes, fix the interest rates thereon in accordance with the bid accepted, and levy taxes to meet principal thereof and interest thereon at maturity as required by law. Section 9. Application and Investment of Note Proceeds . Following the sale of the Notes, the City Manager and City Clerk are hereby authorized and directed to execute and deliver the Notes to the purchasers thereof upon payment therefor; and the principal proceeds from the sale of the Notes shall be used only for the purposes and in the manner required by law and by this resolution. The proceeds may be invested in the manner permitted by law, subject to the restrictions contained in the next succeeding section. Section 10. Tax Covenants . (a) The City shall not take, nor omit to take, any action that is lawful and within its power to take, which action or omission would cause interest on any Note to become subject to federal income taxes in addition to federal income taxes to which interest on such Note is subject on the date of issuance thereof. (b) The City shall not permit any of the proceeds of the Notes, or any facilities financed with such proceeds, to be used in any manner that would cause any Note to constitute a “private activity bond” within the meaning of Section 141 of the Internal Revenue Code of 1986 (the “Code”). (c) The City shall not permit any of the proceeds of the Notes or other moneys to be invested in any manner that would cause any Note to constitute an “arbitrage bond” within the meaning of Section 148 of the Code. (d) The City shall comply with the provisions of Section 148(f) of the Code relating to the payment of certain investment earnings at periodic intervals to the United States of America; provided, however, that such payment shall not be required to the extent the City receives an opinion of nationally recognized bond counsel (which opinion may be given in reliance upon a ruling or rulings of the Internal Revenue Service) to the effect that such payment is not necessary to preserve the exemption from federal income taxes of interest on the Notes. (e) The City hereby designates the Notes as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. Section 11. Continuing Disclosure . For the benefit of the beneficial owners of the Notes, the City covenants and agrees to provide an annual report containing certain financial information and operating data relating to the City. The annual report shall be filed with the Electronic Municipal Market Access System ("EMMA") within 180 days after the close of the City’s fiscal year. The Annual Report may be submitted as a single document or as separate documents comprising a package. The City may include the information described below by cross-reference from official statements of debt issues of the City, which have been submitted to and are available from EMMA. The information to be contained in the annual report shall consist of the annual audited financial statement of the City for the most recently completed prior fiscal year and such additional information as noted in the official statement relating to the Notes under the caption “Continuing Disclosure.” Each annual audited financial statement will conform to generally accepted accounting principles applicable to governmental units prepared in accordance with standards of the Governmental Accounting Standards Board. The City also covenants and agrees for the benefit of the beneficial owners of the Notes to provide timely notice to EMMA of any failure of the City to file any such annual report within the 180-day period and of the occurrence of any of the following events with respect to the Notes, if material: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax-exempt status of the Notes; (7) modifications to rights of Noteholders; (8) Note calls; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Notes; and (11) rating changes. It is found and determined that the City has agreed to the undertakings contained in this Section in order to assist participating underwriters of the Notes and brokers, dealers and municipal securities dealers in complying with Securities and Exchange Commission Rule 15c2-12 promulgated under the Securities Exchange Act of 1934. The chief financial officer of the City is authorized and directed to do and perform, or cause to be done or performed, for or on behalf of the City, each and every thing necessary to accomplish the undertakings of the City contained in this Section for so long as said Rule 15c2-12 is applicable to the Notes and the City remains an “obligated person” under the Rule with respect to the Notes. Notwithstanding any other provisions in this resolution to the contrary, failure of the City to perform any covenant in this Section 11 shall not constitute an event of default hereunder; however, any Noteholder may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the City to comply with its obligations under this Section 11. The City may amend the provisions of this Section 11 and any provision of this Section 11 may be waived, if: (a) such amendment or waiver is made in connection with a change in circumstances that arises from a change in legal requirements, change in law or change in the identity, nature or status of the City, or the activities conducted at the financed facilities; (b) the undertaking herein, as amended or waived, would have complied with the requirements of the Securities and Exchange Commission Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (the “Rule”) at the time of the primary offering of the Notes, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the amendment or waiver (i) does not materially impair the interests of Noteholders, as determined by an opinion of nationally recognized bond counsel expert in federal securities laws acceptable to the City, or (ii) is approved by the affirmative vote of Noteholders of at least two-thirds in aggregate principal amount of the outstanding Notes at the time such consent is given. Following any such amendment or waiver, the next succeeding annual report shall explain, in narrative form, the reasons for the amendment or waiver and the impact of the change on the type of financial information being provided. Section 12. Defeasance and Payment of Notes . (a) If the City shall pay or cause to be paid to the registered owners of the Notes of a series the principal, premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated therein and in this resolution, then the pledge of taxes, securities and funds hereby pledged and the covenants, agreements and other obligations of the City to the registered owners and the beneficial owners of the Notes shall be discharged and satisfied. (b) Any Notes, whether at or prior to the maturity or the redemption date of such Notes, shall be deemed to have been paid within the meaning of this Section if (i) in case any such Notes are to be redeemed prior to the maturity thereof, there shall have been taken all action necessary to call such Notes for redemption and notice of such redemption shall have been duly given or provision shall have been made for the giving of such notice, and (ii) there shall have been deposited in trust with a bank, trust company or national banking association acting as fiduciary for such purpose either (A) moneys in an amount which shall be sufficient, or (B) “Federal Obligations” as defined in paragraph (c) of this Section, the principal of and the interest on which when due will provide moneys which, together with any moneys on deposit with such fiduciary at the same time for such purpose, shall be sufficient to pay when due the principal of, redemption premium, if any, and interest due and to become due on said Notes on and prior to the applicable redemption date or maturity date thereof. (c) As used in this Section, the term “Federal Obligations” means (i) noncallable, direct obligations of the United States of America, (ii) noncallable and nonprepayable, direct obligations of any agency of the United States of America, which are unconditionally guaranteed by the United States of America as to full and timely payment of principal and interest, (iii) noncallable, nonprepayable coupons or interest installments from the securities described in clause (i) or clause (ii) of this paragraph, which are stripped pursuant to programs of the Department of the Treasury of the United States of America, or (iv) coupons or interest installments stripped from bonds of the Resolution Funding Corporation. Section 13. Resolution To Constitute a Contract . The provisions of this resolution shall constitute a contract between the City and the owner or owners of the Notes. Any pledge made in this resolution and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the City shall be for the equal benefit, protection and security of the owners of any and all of the Notes. All of the Notes, regardless of the time or times of their issuance, shall be of equal rank without preference, priority or distinction of any of the Notes over any other thereof except as expressly provided in or pursuant to this resolution. This resolution and the resolution awarding the Notes, fixing the interest rates and levying taxes for the payment thereof shall constitute full authority for the issuance of the Notes and, to the extent that the provisions of this resolution conflict with the provisions of any other resolution of the City, the provisions of this resolution, as amended, shall control. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution. Section 14. Notice . The City Clerk is authorized to publish a notice of the issuance of the Notes as a class 1 notice pursuant to Section 893.77, Wisconsin Statutes. Section 15. Effective Date . This resolution shall become effective immediately upon its passage, the public welfare requiring it ADOPTED: Motion by: Second by: APPROVED: Councilmember Aye Nay Pass Absent Brunner McDonald Eric J. Levitt, City Manager Perrotto Rashkin ATTEST: Truman Steeber Voskuil Jean Ann Wulf, City Clerk-Treasurer APPROVED AS TO FORM: Wald Klimczyk, City Attorney Proposed by: Administrative Services Prepared by: Administrative Services Attachment III JJW - 09/28/2010 City of Janesville Proposed 2010 Note Issue - City Manager Recommended Projects Proposed 2010 Note Issue Major Capital Special Hedberg Projects Prior Years Assessment Water Wastewater Stormwater Sanitation Public Total Note ProjectOther LoansTotal ProjectBudget BorrowingsGeneral FundFundUtility FundUtility FundUtility FundFundLibraryTIF FundsIssue Construct and Improve Streets New and Replacement Sidewalks$175,000$65,000$240,000$240,000$1,295,000 Curb and Gutter Replacement & Reconstruction$600,000$600,000$600,000$500,000 Street Maintenance and Improvements$550,000$550,000$550,000$650,000 Major Arterials and Connecting Highways Ruger Avenue Bridge$220,000$220,000$220,000$125,000 S. Jackson St. Bridge (Feas. Study & Eng.)$130,000$130,000$130,000$130,000 Subtotal$1,675,000$65,000$1,740,000$1,740,000$2,700,000 Construct and Improve Storm Sewers System Improvements Channel/Pond Enhancements$200,000$200,000$200,000$200,000 Storm Sewer Enhancements$360,000$360,000$360,000$400,000 Storm Sewer Repairs$190,000$190,000$190,000$350,000 Manhole rehab./Replacement$250,000$250,000$250,000$250,000 System Expansion Channels/Ponds$120,000$120,000$120,000$400,000 Storm Sewers$100,000$100,000$100,000$300,000 Subtotal$220,000$1,000,000$1,220,000$1,220,000$1,900,000 Acquire, Improve & Maintain Parks and Public Grounds Replace Playground Equipment$35,000$35,000$35,000$70,000 Bike Trail (Tripp Road to Eau Claire Road)$60,000$60,000$60,000$60,000 Consultant Review of Oakhill Cemetery structures$15,000$15,000$15,000 Subtotal$110,000$110,000$110,000$130,000 Acquire, Improve & Maintain Public Bldgs. and Grounds Transit Services Center Construction (year 5)$300,000$300,000$300,000$400,000 Building Maintenance$350,000$350,000$350,000$350,000 Property Acquisitions (downtown & neighborhood)$200,000$200,000$200,000$500,000 Oakhill Cemetery Maintenance Bldg.$100,000$100,000$100,000$190,000 Riverside Park Storage Bldg.$100,000$100,000$100,000 Oakhill Cemetery Chapel/Carport Repairs$55,000$55,000$55,000 Tallman House$250,000$250,000$250,000$500,000 Golf Course Capital$100,000$100,000$100,000 General Building Repairs - Hedberg Public Library$50,000$50,000$50,000$50,000 Subtotal$1,455,000$50,000$1,505,000$1,505,000$4,440,000 Acquire Capital Equipment Technology Enhancements$100,000$50,000$50,000$200,000$200,000$200,000 ERP Phase IV (General Ledger, Payroll)$100,000$100,000$100,000$100,000$400,000$400,000$400,000 Library Computer Replacements$35,000$35,000$35,000$35,000 GIS Enhancements$25,000$25,000$25,000$25,000$100,000$100,000$100,000 Transit Capital Projects$25,000$25,000$25,000$26,840 Parks Capital$45,000$45,000$45,000$35,000 Public Safety Equipment$0$0$100,000 Subtotal$295,000$175,000$175,000$125,000$35,000$805,000$805,000$896,840 Construct and Close Landfills Odor Remediation Project$240,000$240,000$240,000 Subtotal$240,000$240,000$240,000 Construct and Extend Water Mains System Improvements: Undersized Main Replacement$130,000$470,000$470,000$600,000$300,000 Attachment III JJW - 09/28/2010 City of Janesville Proposed 2010 Note Issue - City Manager Recommended Projects Proposed 2010 Note Issue Major Capital Special Hedberg Projects Prior Years Assessment Water Wastewater Stormwater Sanitation Public Total Note ProjectOther LoansTotal ProjectBudget BorrowingsGeneral FundFundUtility FundUtility FundUtility FundFundLibraryTIF FundsIssue Lead Service Replacement$300,000$0$300,000$400,000 Manhole and Valve Replacement$40,000$0$40,000$165,000 Main Reinforcement (Black Bridge Road)$1,175,000$325,000$325,000$1,500,000$1,500,000 Subtotal$1,645,000$0$795,000$795,000$2,440,000$3,165,000 Construct and Extend Sewer Mains System Improvements: Sewer Main Repair/Replacement$0$805,000$805,000$750,000 Inflow/Infiltration Reduction$0$265,000$265,000$125,000 Siphon Improvements$925,000$75,000$75,000$1,000,000$0 System Expansion Sewer Extensions$200,000$75,000$275,000$275,000$400,000 Subtotal$925,000$200,000$150,000$350,000$1,070,000$2,345,000$1,275,000 Provide Financial Assistance for Community Redevelopment Under Sec. 66.46 (TIF) Development Incentives (TIF #23) - Taxable$865,000$865,000$865,000$0 Development Incentives (TIF #26) - Taxable$190,000$190,000$190,000$185,000 Subtotal$1,055,000$1,055,000$1,055,000$185,000 Grand Total$2,570,000$3,535,000$485,000$970,000$325,000$1,125,000$240,000$85,000$1,055,000$7,820,000$1,070,000$11,460,000$14,691,840 Projects which the City Council has committed to fund. Attachment IV 2010 Note Issue Project Descriptions Construct and Improve Streets - $1,740,000 (a) New and Replacement Sidewalks - $240,000 This program totals $240,000 (General Fund - $175,000; Assessable - $65,000) to construct new sidewalks and to replace deteriorated sidewalk and/or sidewalk with other safety deficiencies. General Fund costs for new and replacement sidewalk include curb ramps, sidewalk crossing city owned property (greenbelts, parks, etc.) and other miscellaneous costs typically paid by the city at large. (b) Curb and Gutter Replacement and Reconstruction - $600,000 This program totals $600,000 to replace damaged curb and gutter as well as eliminate areas of water ponding in conjunction with the street reconstructions and resurfacing programs. In the past half of this program has been funded through Special Assessments against the abutting property owners. As proposed for 2010 costs for curb replacement and reconstruction will be paid by the city at-large and will no longer be assessed against abutting property owners. Curb & Gutter functions as part of the street and having the City at-large pay for these costs is consistent with the street rehabilitation program approach. (c) Street Maintenance and Improvements - $550,000 This program includes funds to maintain City streets and make various other improvements to the street network such as intersection and railroad crossing improvements. In 2010 $550,000 is proposed for this program. (d) Major Arterials and Connecting Highways - $350,000 This category proposes a total of $350,000 in funding for 2010. There are several projects that provide for preliminary engineering on projects. This funding provides the local match to federal funding in most cases. The Ruger Avenue Bridge sufficiency rating is at a level that requires improvement. Funding in the amount of $220,000 provides for the local match to a federal grant for the project. Construction is currently underway with completion anticipated later this fall. The Jackson Street Bridge sufficiency rating is at a level that requires improvement. The total cost for this project is estimated to be $6,986,000 with 80% ($5,573,000) provided in federal funding and 20% ($1,413,000) from local funding. This 2010 budget proposes that design and engineering be commenced in 2010. The first installment of $130,000 for the local match to federal funding for preliminary engineering is also included. Attachment IV Construct and Improve Storm Sewers - $1,220,000 (a) System Improvements - $1,000,000 System Improvements total $1,000,000 for enhancements to the existing storm drainage system. Proposed projects include: Drainage Channel/Pond Enhancements are necessary to address capacity deficiencies or other problems which require enhancements to properly manage current and projected stormwater flow. Enhancement projects in 2010 are expected to cost $200,000. This will include the third year of a 10-year program to enhance the drainage channel within the greenbelt system and surface drainage improvements near the City Services Center ($20,000). In addition to routine maintenance of storm sewer infrastructure, areas within the system can develop capacity deficiencies or other problems which require enhancements to properly manage current and projected stormwater flow. Storm Sewer enhancement projects in 2010 are expected to cost $360,000. Planned projects include: Palmer Drive ($80,000), City Services Center Surface Drainage ($20,000), Kiwanis Pond ($60,000) and Fremont Street ($200,000). Planned projects may change based upon need. Storm sewer repair projects totaling $190,000 have been identified for 2010. Planned projects include: Laramie Lane ($115,000), Richardson Street ($35,000), Franklin Street Concrete Channel ($20,000), Palmer Drive ($10,000) and Memorial Bike Trail ($10,000). Projects can change if other repairs are identified and are considered higher priority. Rehabilitating or replacing manholes in conjunction with street resurfacing and reconstruction projects prevents future failures of the structures after a new street surface has been placed. In 2010 funding in the amount of $250,000 is proposed. Some manholes only need repairs to the upper portion and other manholes that need total replacement. (b) Storm Drainage Channels/Ponds storm drainage channels and ponds to serve new developments. Cost - $120,000; Assessable Portion - $120,000. (c) Storm Sewer Extensions storm sewer mains extended to serve new developments. Cost - $100,000; Assessable Portion - $100,000. Acquire, Improve & Maintain Parks and Public Grounds - $110,000 (a) Replace Playground Equipment - $35,000 In 1996, the City began a program to renovate/replace playground equipment in neighborhood parks. To date, renovations have been completed at 30 neighborhood parks at a cost of approximately $35,000 for each neighborhood park. Attachment IV The renovation/replacement of playground equipment will continue in 2010, with improvements proposed for Pershing Park ($35,000). (b) Bike Trail (Tripp Road to Eau Claire Road) - $60,000 A multi-governmental effort is underway to extend the bike trail from Janesville to Beloit. This $60,000 in funding will allow for the installation of a gravel trail surface on land currently owned by the City. This will effectively extend the Peace Trail from Tripp Road to Eau Claire Road. (c) Consultant Review of Oakhill Cemetery Structures - $15,000 $15,000 is requested to hire a consultant to review the four Oakhill Cemetery structures to develop an itemized list of projects necessary to ensure the continuation of the structures. This review will examine the facilities using a historical point of view. These buildings are in very poor condition and staff wants to be pro- active in developing a maintenance program. Acquire, Improve & Maintain Public Buildings and Grounds - $1,305,000 (a) Transit Services Center - $300,000 A new Transit Administration and Maintenance Building is proposed to replace the existing facility located on North Parker Drive. The existing facility was constructed in 1961 as a public works garage and became the Transit Maintenance Facility in the mid-1960s. An addition was constructed in 1979 to provide a dedicated area for vehicle maintenance. A new facility is estimated to cost $6,275,000, with $1,400,000 provided by 2009 ARRA funds requiring no local match, 80% ($3,900,000) funded by the Federal Transit Act and the remainder ($975,000) provided by the City of Janesville. In 2006 and 2007, $100,000 and $475,000 respectively were provided as the 20% local match for land acquisition and a portion of the construction costs. In 2010 $300,000 is proposed. The final share of the local match will be included in the 2011 Note Issue. (b) Building Maintenance - $350,000 Each year, funds are required for minor building maintenance projects at City facilities. In 2010, improvements totaling $350,000 are proposed for several public buildings. The locations may include the Municipal Building, various park and recreational facilities, and Senior Center. (c) Property Acquisitions (downtown & neighborhood) - $200,000 Major downtown and neighborhood planning efforts have recommended that the City become more active in the acquisition of vacant and/or blighted properties in the downtown and older residential neighborhoods. Available Community Development Block Grant funds are not sufficient for this effort. Funding in the amount of $200,000 is proposed for such property acquisitions. Attachment IV (d) Oakhill Cemetery Maintenance Building - $100,000 $100,000 is requested to construct a maintenance and operations building for Oakhill Cemetery. The current seasonal building is undersized, does not have room for all of the existing equipment, and has no heat/water. A new building would accommodate equipment and provide for better year-round usage, as cemetery operations dictate. (e) Riverside Park Storage Building - $100,000 $100,000 is requested to construct a maintenance building for Riverside Park. The current building is a former 1928 restroom building and is not large enough to accommodate service work or volunteer activities. A new structure would better accommodate equipment and maintenance operations. (f) Oakhill Cemetery Chapel/Carport Repairs - $55,000 $55,000 is necessary to complete immediate repairs to the cemetery carport and chapel. Repairs will include outside tuck pointing, caulking of windows/door frames and coping joints, roof repairs and carport foundation repairs. This work must be done if we wish to continue to have these structures present at the cemetery. (g) Tallman House - $250,000 In 2009 an architectural firm was retained to complete a property conditions report on the Tallman House. This report indicates that repairs in excess of $2,000,000 are necessary and the facility. Funding in the amount of $250,000 was provided in 2009. The 2010 budget includes $250,000 to continue funding these repairs. (h) Golf Course Capital - $100,000 The current lease for the golf course facilities expires on December 31, 2010. Due to changes in the golf industry locally and nationally we will be changing from a lease of the golf facilities to a management contract. Under the terms of the lease, the lessee must provide the equipment to maintain the courses. However, under a management contract the owner of the courses (the City) must provide such equipment. Funding in the amount of $100,000 is included to begin acquiring maintenance equipment. It is anticipated that additional funding will be necessary in 2011. (i) Building Repairs at Hedberg Public Library - $50,000 The Hedberg Public Library was constructed in 1996 so the building is now fourteen (14) years old. This project proposes funding for ongoing general building maintenance needs ($50,000). Attachment IV Acquire Capital Equipment - $805,000 (a) Technology Enhancements - $200,000 The City will continue implementation of the Information Technology Strategic Plan. This plan addresses improving the efficiency of City services and providing citizen satisfaction through the use of information technology. In 2010, funds are requested from the General Fund ($100,000), Water Utility ($50,000) and Wastewater Utility ($50,000) to obtain consulting services and purchase hardware and software for the implementation of specific citywide information technology priority projects, as determined by the City Manager. (b) ERP Phase IV - $400,000 The City is in the process of implementing an Enterprise Resource Planning (ERP) project which will replace disparate computer applications and integrate them into a single solution reducing redundant data entry and facilitating the sharing and tracking of information. Phase I of this project included the replacement of our Land Management/Computer-aided Mass Appraisal Software; phase II of this project included the replacement of code enforcement, building permits and inspections, complaint tracking, and planning software; phase III of this project included the replacement of our utility billing, and miscellaneous billing. Funding in the amount of $400,000 for Phase IV is proposed for 2010 to replace our accounting, payroll, and human resources software. Funds are requested from the General Fund ($100,000), Water Utility ($100,000), Wastewater Utility ($100,000) and Stormwater Utility ($100,000). (c) Library Technology Upgrades - $35,000 Funding is proposed to upgrade the automation system to include a Fines Payment Module ($10,500), to replace outdated computers ($21,000), and to upgrade the hardware and software in the computer lab ($3,500). (d) GIS Enhancements - $100,000 Implementing the GIS is an ongoing process with the continuing goals of increasing efficiency, providing updated geographic information and creating high-quality products for city departments and the public. In 2010 funds are requested to enhance the GIS, through increased staff utilization using additional software licenses, improved quality control efforts, establishing and maintaining public GIS access through a website and other services, expanded data acquisition and access for internal use, and other GIS development activities. Funds are requested from the General Fund ($25,000), Water Utility ($25,000), Wastewater Utility ($25,000), and Stormwater Utility ($25,000). (e) Transit Capital Projects - $25,000 Funding is included for several small Transit capital projects ($25,000) including Attachment IV capital repair parts ($7,500), refurbish the Transfer Center ($9,000), replace supervisory van ($5,000), replace shop equipment ($2,000), replace printer/copier/fax ($500), and replace 100 bus stop signs ($1,000). Transit projects are funded 80% from the Federal Transit Act and these costs represent the projects local share (20%). (f) Parks Capital - $45,000 Parks Capital ($30,000) provides funding to purchase an impoundment system to flood the Traxler Park ice skating land rink. This will increase the timeliness of when the land rink can open each year. Water would be pumped from the lagoon area, into a cooling pond that would send the water into the bermed skating area. This system would reduce the hours spent by staff spraying the current land rink and would allow the ice to form concurrently with staff working on snow removal. Construct and Close Landfills - $240,000 (a) Odor Remediation Project - $240,000 Current operations at the sanitary landfill have resulted in increased odors and complaints from residents. This project constructs additional gas well and places a temporary membrane cap on the landfill to allow additional gas to be drawn from the landfill. This gas, rather than escaping into the air, will be used to generate electricity. Construct and Extend Water Mains - $795,000 (a) System Improvements - $795,000 Undersize main replacements totaling $600,000 are proposed for 2010. Of this funds borrowed in prior years. This program is needed to replace undersized water mains (replace 1-1/2 inch and 4-inch mains with 6 inch mains) in the distribution system. There are approximately 9 miles of undersized mains in the system. Replacement is done in coordination with street restoration projects. Funds requested will replace about 6,000 feet of mains. In 2005, the Water Utility implemented a lead services replacement program within the City. This program is similar to the iron service replacement activities the City has historically undertaken. The actual cost of this program will vary from year to year based upon the number of lead services under streets that are being reconstructed in any given year. Currently, there are about 2,400 lead services in the City. In 2010, the Water Utility proposes to replace 150 lead services ($300,000). No funding is included is this Note Issue as funds will be reallocated from prior years projects. Prior to street reconstruction, the condition of the water manholes and valves in the street are evaluated. Old, deteriorated manholes are either rehabilitated or replaced prior to the street work. This helps insure the long term integrity of the Attachment IV street so that a newer street surface would not have to be dug up shortly after the work to replace a failing manhole. For 2010 $40,000 is proposed for this program. No funding is included is this Note Issue as funds will be reallocated from prior years projects. The Main Reinforcement program addresses identified weaknesses in the existing water distribution system by adding transmission mains or upgrading distribution mains to transmission mains. In 2010, Phase I of the Blackbridge Road main is scheduled. The total project estimate is $3,000,000 with $1,500,000 proposed for 2010. Of this amount $325,000 is included in the proposed Note Issue and $1,175,000 is available from funds borrowed in prior years. Construct and Extend Sewer Mains - $350,000 (a) System Improvements - $75,000 Janesville has approximately 140 miles of clay pipe in the sanitary sewer collection system that ranges in age from 40 to 100 years. Most of the clay pipe is structurally sound, but suffers from root intrusion and infiltration of groundwater. Proposed for 2010 is $805,000 in funding, which will reline about 3 3-1/2 miles of sanitary sewer main. This is the ninth year of a multi-year program, which reduces the potential for clogged sewers resulting from root growth and also ensures the continued structural integrity of the clay sewers. No funding is included in the proposed Note Issue as money was previously borrowed through the Clean water Fund loan program. This is an ongoing multi-year program to prevent water inflow and infiltration into the sanitary sewer system. This program has focused primarily on sanitary sewer manholes in the past, but its focus has now shifted to sewer laterals. For 2010 funding in the amount of $265,000 is proposed. No funding is included in the proposed Note Issue as money was previously borrowed through the Clean water Fund loan program. Siphons are used to move sewage from one side of the Rock River to the other. The City has four (4) siphons and they were in need of repairs to increase their reliability and the ability of our crews to maintain them in the event of a blockage. Funding in the amount of $1,000,000 is proposed for this project. No funding is included in the proposed Note Issue as money was previously borrowed through the Clean water Fund loan program. (b) System Expansion - $275,000 Subdivision Sewer Extensions sewer mains extended to serve new developments. Cost - $275,000; Assessable Portion - $200,000. Attachment IV Provide Financial Assistance for Community Redevelopment - $1,055,000 (a) Funding in the amount of $865,000 is included for development loans in TIF No. 23. Development loans were made to SARA Investments for the rehabilitation of the building located at 101 E. Milwaukee Street. (b) Funding in the amount of $190,000 is included for development loans in TIF No. 26. Development loans have been made to 3-D Targets ($128,000) for costs of building upgrades to meet code requirements for this expanding business and PPG Industries to finance manufacturing equipment and the creation of 6 new jobs in TIF #26 ($62,000). These projects will create an additional 11 full-time jobs in TIF #26. PUBLIC WORKS DEPARTMENT MEMORANDUM October 5, 2010 TO: City Council FROM: Carl J. Weber P.E., Director of Public Works SUBJECT: Public Hearing and Action on a Proposed Ordinance amending JGO Chapter 2.56 regulating the payment of prevailing wages on public works construction projects and publicly funded private construction projectswith penalties as set forth in proposed (File JGO 2.56.070. Ord. 2010-462) Staff Recommendation Staff recommends that, following the public hearing, the City Council adopt Proposed Ordinance 2010-462 amending JGO Chapter 2.56 regulating the payment of prevailing wages on public works construction projects and publicly funded private construction projects. City Manager’s Recommendation The City Manager recommends approval to make the current ordinance consistent with State Statutes. Requested Action Adopt Proposed Ordinance No. 2010-462 Request Due to recent changes in State statutes, staff seeks to update a related local ordinance to be in compliance with state statutes. Background Effective January 1, 2010, there were significant changes to State of Wisconsin elimination of single and prevailing wage laws. These changes included the multiple trade thresholds that change each year and the creation of a single unchanging threshold of $25,000. Most recently, on 1/1/09, the threshold was $48,000 for single trade projects and $234,000 for multiple trade projects. In prevailing wages be paid on publicly addition, State law now requires that funded private construction projects which receive public assistance of $1,000,000 or more. Analysis The proposed Ordinance No. 2010-462 amends JGO Chapter 2.56, so as to include a requirement for the payment of prevailing wages on private construction projects which receive public funding greater than a threshold established by the State (currently $1,000,000). It also updates to the threshold for public works construction projects (currently $25,000). Finally it establishes a reference to State 1 statutes which will automatically coordinate the thresholds in the ordinance with those in the State statutes which may be amended from time to time. cc: Eric Levitt, City Manager Jacob J. Winzenz, Assistant City Manager/Dir. of Administrative Services 2 ORDINANCE NO. 2010 - 462 An ordinance amending JGO Chapter 2.56 regulating the payment of prevailing wages on public works construction projects and publicly funded private construction projects with penalties as set forth in proposed JGO 2.56.070. THE COMMON COUNCIL OF THE CITY OF JANESVILLE DO ORDAIN AS FOLLOWS: SECTION I. Chapter 2.56 of the Code of General Ordinances of the City of Janesville is hereby amended to read as follows: Chapter 2.56 PUBLIC WORKS CONTRACTS WAGE SCALE Sections: 2.56.010 Definitions 2.56.020 Application 2.56.030 Minimum Wage Scale 2.56.040 Records and Compliance 2.56.050 Posting of Wage Scale 2.56.060 Use of City Employees 2.56.070 Penalties. 2.56.010 Definitions . ABuilding or work . "" shall mean construction activity, including the delivery of mineral aggregate such as sand, gravel, asphaltic concrete or stone which is incorporated into the work under contract with the City by depositing the material substantially in place, directly or through spreaders, from the transporting vehicle. "Building or work" does not include the manufacturing, furnishing of materials, or servicing and maintenance work. A. “Direct financial assistance” shall means moneys, in the form of a grant or other agreement or included as part of a contract, cooperative agreement, or any other arrangement, including a redevelopment agreement under Section 66.1333(5) of the Wisconsin Statutes as from time to time amended or renumbered, economic development agreement, contract under Section 66.1105(3) of the Wisconsin Statutes as from time to time amended or renumbered, or assistance provided under Section 66.1109 of the Wisconsin Statutes as from time to time amended or renumbered, that the City directly provides or otherwise directly makes available to assist in the erection, construction, repair, remodeling, demolition of a private facility. "Direct financial assistance" does not include any of the following: A public works contract, a supply procurement contract, a contract of insurance or guaranty, a collective bargaining agreement, or any other contract under which moneys are not directly provided or otherwise directly made available for that assistance. B.Person "" shall mean each person, firm, partnership, corporation, cooperative, joint venture, organization and entity of whatsoever kind or nature. CPublic works construction . "" shall mean building or work involving the erection, construction, remodeling, or repairing demolishing of a public work for the City., including all of the following: of buildings, parking lots, sidewalks, street lighting, traffic signals, sanitary and storm sewers, water mains and appurtenances, and the grading or landscaping of public lands. “Public works construction” does not include a project in which the labor for the project is provided by unpaid volunteers, minor service or maintenance work, warranty work, or work under a supply and installation contract. “Public works construction” includes all of the following: 1) (A highway, street, bridge, building, or other infrastructure project. (2) A project erected, constructed, repaired, remodeled, demolished by one local governmental unit for another local governmental unit under a contract under Sections 66.0301(2), 83.03, 83.035, or 86.31(2)(b) of the Wisconsin statutes as from time to time amended or renumbered or under any other statute specifically authorizing cooperation between local governmental units. (3) A project in which the completed facility is leased, purchased, lease purchased, or otherwise acquired by, or dedicated to, a local governmental unit in lieu of the local governmental unit contracting for the erection, construction, repair, remodeling, demolition of the facility. (4) A road, street, bridge, sanitary sewer, or water main project in which the completed road, street, bridge, sanitary sewer, or water main is acquired by, or dedicated to, a local governmental unit, including under Section 236.13 (2) of the Wisconsin Statutes as from time to time amended or renumbered, for ownership or maintenance by the local governmental unit. D.“Publicly funded private construction project” shall mean a construction project in which the developer, investor, or owner of the project receives direct financial assistance from the City for the erection, construction, repair, remodeling, demolition, including any alteration, painting, decorating, or grading, of a private facility, including land, a building, or other infrastructure. "Publicly funded private construction project" does not include a project in which the labor for the project is provided by unpaid volunteers, minor service or maintenance work, warranty work, or work under a supply and installation contract. "Publicly funded private construction project" does not include a project of public works or a housing project involving the erection, construction, repair, remodeling, demolition of any of the following: (1) A residential property, if the project is supported by affordable housing grants, home improvement grants, or grants from a local housing trust fund. (2) A residential property containing 4 dwelling units or less. (3) A residential property that contains retail, office, or commercial components, if the project is intended to increase the supply of affordable housing in a community. 2.56.020 Application . A. This Chapter shall be applicable to any municipal public works construction contract project as required by Section 66.0903 of the Wisconsin Statutes as from time to time amended or renumbered over Ten Thousand ($10,000.00) Dollars. B. This Chapter shall be applicable to any publicly funded private construction project as required by Section 66.0904 of the Wisconsin Statutes as from time to time amended or renumbered. 2.56.030 Minimum Wage Scale . A . Establishment of Minimum Wage Scale. Prior to the bidding or letting of a public works construction contract, the City Engineer or his/her designee shall determine the prevailing wage rate, hours of labor, and hourly basic pay rates for all trades and occupations required to complete the contemplated public works construction and building or work. In making this determination, the City Engineer shall obtain and incorporate a current schedule of prevailing wage rates from the Department of Industry, Labor and Human Relations (DILHR) Workforce Development (DWD) and a current schedule of prevailing wage rates from the Wisconsin Department of Transportation (WDOT) and shall require the contractor to compensate its employees at the prevailing wage rate in accordance with Section 66.0903(3) of the Wisconsin Statutes and DWD 290 of the Administrative Code as from time to time amended or renumbered. Except for known increases contained within the prevailing wage schedules received from DILHR DWD and WDOT, the prevailing wage rates shall not change during any public works construction contract. For publicly funded private construction projects under this Section the owner or developer of the real property for which the construction is taking place shall determine the prevailing wage rate, hours of labor, and hourly basic pay rates for all trades and occupations required to complete the contemplated publicly funded private construction project. In making this determination, the owner or developer of the real property shall obtain and incorporate a current schedule of prevailing wage rates from the Department of Workforce Development (DWD) and shall require all contractors or subcontractors to compensate its employees at the prevailing wage rate in compliance with this Section and with Section 66.0904(2) of the Wisconsin Statutes as from time to time amended or renumbered. B. Incorporation of Minimum Wage Scale in Construction Contracts . Whenever the City shall bid any public works construction contract or owner or developer of the real property for which a publicly funded private construction project is taking place enters a contract, the bidding documents and construction contracts shall contain the minimum rate of wage scale and hours of labor as determined in Section 2.56.030 A. of this Ordinance. C. Workers to be Paid According to Minimum Wage Scale. No laborer, worker, or mechanic employed directly upon the site of a public works construction contract or publicly funded private construction project by the contractor, or by a subcontractor, agent, or other person, doing or contracting any part of the work, may be paid less than the prevailing wage rate in the same or most similar trade or occupation; nor may he/she be permitted to work a greater number of hours per day or per calendar week than the prevailing hours of labor determined under this subsection, unless he/she is paid for all hours in excess of the prevailing hours of labor at a rate of at least one and one-half times his/her hourly basic rate of pay. An employee's classification shall not be changed to a classification of a lesser rate during the contract. D. Resolving Questions about Minimum Wage Scale and/or Hours. Questions regarding employee classification, rate of pay, or hours of labor shall be resolved by reference to the established practice that predominates in the industry and on which the trade or occupation classification is based. The determination of the City Engineer shall be final. 2.56.040 Records and Compliance . A. Contractor Records. Each contractor, subcontractor, or agent thereof participating in a public works construction contract or publicly funded private construction project covered by this Chapter shall keep full and accurate records clearly indicating the name and trade or occupation classification of every laborer, worker, or mechanic employed thereby in connection with the project. The contractor records shall include an accurate record of the number of hours worked by each employee and the actual wages paid therefore. The contractor shall require, and each subcontractor or agent shall provide, the contractor with evidence of compliance with the provisions of this subsection. B. Evidence of Compliance . Upon completion of the public works construction project and prior to the final payment therefore, each contractor shall file with the Janesville City Engineering Department an affidavit stating that the contractor has fully complied with the provisions and requirements of this Chapter, and that the contractor has received evidence of compliance from each of the contractor's subcontractors and agents. No final payment shall be made until such an affidavit is filed in proper form and order. For publicly funded private construction projects the evidence and affidavit of compliance from each agent or subcontractor shall be filed with the contractor. The contractor may not authorize final payment until the affidavit is filed in proper form and order. C. Complaints . Complaints made against any of the provisions of this Chapter may be investigated by the City Engineer or his/her designee, or may be referred to DILHR DWD in accordance with the provisions of Sections 66.0903 (10)(c) or 66.0904 (8)(c) of the Wisconsin Statutes as from time to time amended or renumbered ss 66.293 (3) (m). The City Engineer or his/her designee, may demand and examine copies of any weekly payrolls and other records and information relating to the wages paid to laborers, workers, and/or mechanics on public works construction contracts or publicly funded private construction projects covered by this Chapter. D. Inspection . (1) The contractor shall at all times maintain all records pertaining to the contract and make all such records available for inspection by the City and each and every of its elected and appointed officials, officers, employees, representatives, or agents. (2) Inspection by the City and related others shall be permitted by the contractor even without prior notice during normal business hours. (3) Failure to permit any inspection shall constitute a separate violation, each day's continuance constituting a separate violation. 2.56.050 Posting of Wage Scale . For the information of the employees working on the public works construction contract or publicly funded private construction project, the minimum wage rates and hours of labor determined under Section 2.56.030 A. of this Chapter shall be kept posted by the contractor in at least one conspicuous and easily accessible place at the site of the public works construction contract or publicly funded private construction project. 2.56.060 Use of City Employees on Building or Public Works Construction. No provision in this Chapter shall be interpreted as in any way limiting the City's right to use City employees to perform building or work or public works construction consistent with State Statutes. 2.56.070 Penalties. A. Any person who violates any rate of wage, hours of labor, related to or other provision of this Chapter shall, upon conviction, pay a forfeiture to the City of not less than One Hundred Dollars ($100.00) nor more than Five Thousand Dollars ($5,000.00) for each violation, together with the costs of prosecution. Upon default in forfeiture payment, such person shall be incarcerated for not more than ninety (90) days or otherwise penalized as provided by law. B . The failure to pay the required wage to an employee for any one week or part thereof shall constitute a separate violation. C . Each day that a person fails to pay the required wage to an eligible employee once it is determined that such wage should have been or should be paid shall constitute a separate violation. D. In addition to and not in lieu of any other penalty or forfeiture provided in this Chapter, the City may seek injunctive relief. E . In addition to and not in lieu of any other penalty or forfeiture provided in this Chapter, the City may disqualify, refuse to prequalify, and/or refuse to contract with any person who violates any provision of this Chapter. 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: __________________ Assistant City Attorney Proposed by: Public Works Department Prepared by: Assistant City Attorney ADMINISTRATIVE SERVICES MEMORANDUM October 4, 2010 TO: City Council FROM: Jacob J. Winzenz, Dir. of Admin. Services/Assistant City Manager SUBJECT: Action on a Proposed Resolution Authorizing the City Manager to enter into a Management Agreement with Kemper Sports Management, Inc. for the Management, Operation, and Maintenance of Riverside and Blackhawk Golf Courses (File Res. No. 2010-739) Summary The current lease with Crown Golf Properties (Crown) for the Janesville golf courses expires on December 31, 2010. In the fall of 2009 Crown indicated that they were not interested in renewing the lease, but would consider a management contract. In anticipation of the expiration of the current lease the City prepared a Request for Qualifications/Proposal (RFQP) for golf management services and mailed it to twenty-seven (27) regional and national companies. After reviewing the responses, conducting interviews, completing site visits, and conducting reference checks, the evaluation committee selected Kemper Sports Management, Inc. (Kemper) as the preferred vendor and staff has negotiated a management agreement. The proposed agreement was reviewed by the Golf th Course Advisory on September 29 and they voted unanimously to forward it to the City Council with a positive recommendation. Staff Recommendation Staff recommends that the City Council adopt File Resolution 2010-739 which authorizes the City Manager to enter into an agreement with Kemper Sports for the management, operation, and maintenance of Riverside and Blackhawk golf courses. City Manager Recommendation The City Manager recommends approval. Background The City owns two (2) golf courses; Riverside which is an eighteen (18) hole course and Blackhawk which is a nine (9) hole course. The City operated and maintained both golf courses until 1982 when the golf courses were leased to the Rajon Corporation. The lease with Rajon Corporation expired in 1990, and in 1991 the golf courses were leased to Greenvisions, Inc. In 1995 Greenvisions’ portfolio was purchased by Crown Golf Properties, L.P. (Crown) as the two organizations merged and Crown assumed the lease. Crown currently leases the courses and the lease expires December 31, 2010. Under the terms of the current lease, Crown pays the City a minimum of $100,000 per year, or 12% of gross revenue, whichever is greater, as a rent payment. In addition, Crown contributes a 1.5% of gross revenue into a Capital Improvement Fund (CIF) for mutually agreed upon improvements to the courses. In 2009 Crown paid the City $138,090 in rent and contributed $17,261 to the CIF. While this has been a beneficial arrangement for the City, in recent years it has not been particularly beneficial for Crown. Since 2002 the Janesville courses have had an average net operating income of approximately $70,000. However, after subtracting rent paid to the City of Janesville, the contribution to the CIF, interest expense, and depreciation Crown has lost an average of approximately $135,000 over this same period. What has occurred in Janesville is not unique across the country. In the mid 1990’s and into the early 2000’s new golf courses were constructed at a rapid pace. In this area we saw the construction of Prairie Woods, Glen Erin, and Bass Creek. What this did was divide the total pie of golf rounds into smaller pieces. This situation was further exacerbated by the economic downturn. Given these changes in the national and local golf economy, finding a company to lease the Janesville courses was determined to be unlikely. Therefore, the decision was made to seek a company to manage the golf courses. Golf management contracts are similar to leases in some respects, but very different in others. Under both a lease and management contact a third-party is retained to run the day-to-day operations of the golf course including staffing, food and beverage, maintenance, club house operations, accounting, etc. However, a management contract shifts the financial risk from the third-party to the owner. The following table summarizes the major differences: Lease Management Contract Revenue Accrues to Lessee Accrues to owner (City) Expenses Paid by Lessee Paid by Owner (City) Profit/losses Lessee Owner (City) Equipment Owned by Lessee Owned by Owner (City) Golf Carts Provided by Lessee Provided by Owner On April 26, 2010, a Request for Qualifications/Proposals (RFQP) was mailed to twenty-seven (27) regional and national companies that specialize in the management of golf courses. Responses were due on May 24, 2010, and a total of six (6) companies responded to our RFQ/P. The responses were reviewed by a committee comprised of members of the Golf Course Advisory Committee, City staff, and Councilmember Perrotto. Based upon their responses, three (3) companies were invited for interviews. Following the interviews the list was 2 narrowed to two (2) companies for site visits and reference checks. On August 30, 2010, the review committee met to review the results of the site visits and reference checks. Following the review the committee unanimously recommended that the City enter into negotiations for a management agreement with Kemper. Analysis The proposed Management Agreement with Kemper contains a number of important provisions:  Agreement is for a term of five (5) years with an option to renew for an additional five (5) years.  The City will have the ability to “opt-out” after three (3) years if Kemper is not meeting budget.  The City will be responsible for all operating costs associated with the golf courses.  The City will receive all revenue from the operation of the golf courses.  All staff will be employees of Kemper.  The City will retain the ability to approve budgets, set fees, and determine hours of operation.  The City will be involved in and offer advice on the selection of the General Manager and Golf Course Superintendent.  The City will pay Kemper a “Transition Services Fee” of $3,500 per month to assist the City in the time period between signing this agreement and st January 1.  The City will pay Kemper a monthly management fee of $6,250.  Kemper will receive an incentive fee of 30% of the first $30,000 of net operating income plus 40% of any net operating income in excess of $30,000.  Kemper will be reimbursed for a maximum of $3,500 per year in out-of- pocket expenses. Staff believes the proposed agreement represents the best opportunity for Riverside and Blackhawk golf courses to be successful. It minimizes the fixed costs to the City and provides incentives for Kemper to return the courses to profitability. Staff believes Kemper will bring fresh ideas, creativity, and energy to the courses. 3 FILE RESOLUTION No. 2010-739 A Resolution Authorizing the City Manager to enter into a Management Agreement with Kemper Sports Management, Inc. for the Management, Operation, and Maintenance of Riverside and Blackhawk Golf Courses WHEREAS, the City of Janesville is the owner of Riverside Golf Course located at 2100 Golf Course Road and Blackhawk Golf Courses located at 2100 Palmer Drive in the City of Janesville, County of Rock, State of Wisconsin, collectively the “Courses”; and WHEREAS, Kemper Sports Management, Inc., an Illinois corporation (“Kemper”), is in the business of golf course management with a portfolio of 103 18-hole courses in 28 states and Puerto Rico, thirty-three of which are public agency facilities; and WHEREAS, Kemper desires to manage, operate, and maintain the Courses as an independent contractor according to the terms and provisions of a certain negotiated and proposed Management Agreement (“Agreement”) which is incorporated herein by reference as if fully set forth verbatim; and WHEREAS, Kemper and the City Administration have negotiated a proposed five (5) year Agreement for such purposes for the term commencing January 1, 2011 and ending December 31, 2015; and WHEREAS, the City of Janesville Golf Course Advisory Committee review the proposed Agreement at their meeting on September 29, 2010, and unanimously recommended approval; and WHEREAS, the Common Council hereby find that this Agreement is in the best interest of the City of Janesville, the community, and surrounding area to execute and enter into the proposed Management Agreement; and WHEREAS, such management agreement, terms, and conditions are permitted by law and the Common Council are empowered to enter into such management agreement, pursuant to Wis. Stats. Sec. 62.11(5), 62.22, 62.23(17), and 66.0101 and other pertinent provisions in the Wisconsin Statutes. NOW THEREFORE BE IT RESOLVED by the Common Council of the City of Janesville that they hereby authorize and approve the Management Agreement by and between the City of Janesville and Kemper Sports Management upon the terms, conditions, obligations, and provisions set forth above as proposed by the City Administration; and further authorize the City Manager and his designee(s), on behalf of the City of Janesville, to execute and enter into the Management Agreement with Kemper Sports Management; and BE IT FURTHER RESOLVED by the Common Council that the City Manager and his designees are hereby authorized to negotiate, renew, amend, and execute such documents, papers, agreements, and forms, and to take whatever other actions, that the City Manager may, from time to time, find necessary, desirable, and/or beneficial to effectuate the Agreement and/or the intent of this Resolution. ADOPTED: Motion by: Second by: APPROVED: Councilmember Aye Nay Pass Absent Brunner McDonald Eric J. Levitt, City Manager Perrotto Rashkin ATTEST: Truman Steeber Voskuil Jean Ann Wulf, City Clerk-Treasurer APPROVED AS TO FORM: Wald Klimczyk, City Attorney Proposed by: Administrative Services Prepared by: Administrative Services MANAGEMENT AGREEMENT THIS MANAGEMENT AGREEMENT (“Agreement”) is made and entered into as of _______________________ 2010, by and between the City of Janesville, Wisconsin, a Municipal corporation (“Owner”) and Kemper Sports Management, Inc., an Illinois corporation (“KSM”). W I T N E S S E T H: WHEREAS, Owner owns the eighteen hole golf course and related facilities known as "Riverside Golf Course" as well as the nine hole golf course and related facilities known as “Blackhawk Golf Course” both located in Janesville, Wisconsin (collectively, the “Courses”); and WHEREAS, Owner and KSM desire for KSM to operate and manage the Courses subject to the terms and conditions set forth herein. NOW, THEREFORE, for and in consideration of the mutual covenants, promises, and agreements herein contained, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS 1.1. Definitions. All capitalized terms referenced or used in this Agreement and not specifically defined herein shall have the meanings set forth on Exhibit A attached hereto. ARTICLE 2 APPOINTMENT AND TERM 2.1. Appointment. Owner hereby retains, engages, and appoints KSM solely as an independent contractor to perform the Management Services during the Term, as more fully described herein, and KSM hereby accepts said appointment upon and subject to the terms hereof. 2.2. Term. The initial term of this Agreement shall begin on October 12, 2010 (the “Commencement Date”) and shall terminate on the fifth anniversary of the Operations Commencement Date (December 31, 2015) (the “Termination Date”) unless terminated or extended according to the provisions hereof (the “Term”). The Term of this Agreement shall automatically be extended for a term of five (5) years upon the expiration of the Term then in effect unless at least one hundred eighty (180) days prior to the expiration of the Term then in effect, either Owner or KSM shall notify the other that it elects not to extend the Term of this Agreement, whereupon the Term of this Agreement shall terminate as of the expiration of the Term then in effect. KSM Management Agreement Form Rev 3/10 12736967v.2 12736967v.4 2.3. Opt-out. At the end of the 2013 golf season, or December 1, 2013, the Owner shall review the operations and financial performance of the golf courses. If KSM does not meet or exceed the EBITDA projections contained in the approved 2013 Annual Operating Budget (unless such failure to meet the EBITDA projections is caused by the actions of Owner or by unforeseen events beyond the reasonable control of KSM), Owner shall have the right, but not the obligation, to terminate this Agreement upon ninety (90) days written notice, provided that such written notice shall be delivered to KSM prior to January 31, 2014. ARTICLE 3 MANAGEMENT SERVICES 3.1. Transition Services. Commencing on the Commencement Date until December 31, 2010 (the “Operations Commencement Date”), KSM shall perform the following transition services (the “Transition Services”) in preparation of its commencement of operations of the Course on the Operations Commencement Date: Begin recruiting for the General Manager for the Courses. o Prepare the transition budget for presentation to Owner. o Review the existing budgets for the Courses and initiate the proposed Operating Budget, o Capital Expenditure Budgets for the fiscal year ending December 31, 2011. Initiate the employee interview and recruiting process. o Perform facility audit including equipment and supplies. o Begin transition for liquor license and other licenses and permits. o Begin transition for local bank accounts and vendor relations. o Manage the employee transition and orientation in the days leading up to the Operations o Commencement Date. Manage all human resource activities necessary in connection with the commencement of operations. Initiate all other operations matters leading up to the official transfer on the Operations o Commencement Date. 3.2. Management of the Courses and Property. Commencing on the Operations Commencement Date, KSM shall perform the management services described in the remainder of this Article 3 (collectively, the “Management Services”) and shall supervise, manage, direct, and operate the Courses and the Property, solely as an independent contractor, on behalf of and for the account of Owner, subject to the terms hereof and at all times consistent with the Operating Budget approved by Owner. Owner hereby delegates to KSM, subject to the (i) Budgets, (ii) Owner’s approval rights specifically described in this Agreement (the “Approval Rights”), (iii) the extent of the powers and authority granted to the Common Council of the City of Janesville, Wisconsin under and pursuant to its charter and applicable laws, and (iv) other terms and conditions set forth herein, the discretion and authority to determine operating policies and procedures, standards of operation, house rules, standards of service and maintenance, pricing, and other policies, rules, and regulations affecting the Courses or the Property or the operation thereof, to implement all of same, and to perform any act on behalf of Owner deemed by KSM to be necessary or desirable for the operation and maintenance of the Courses and the Property. 2 KSM Management Agreement Form Rev 3/10 12736967v.4 3.3. Use of the Property. Owner hereby grants to KSM the right to use and occupy the Courses and Property during the Term solely for the purposes set forth herein. KSM shall, upon the expiration or prior termination of the Term, vacate and surrender the Courses and Property to Owner in good condition, reasonable wear and tear excepted (subject to Owner providing KSM sufficient funds to maintain the Courses and Property in such condition). 3.4. Scope of Services. KSM will manage all activities of the Courses that are included in the annual Operating Budget and approved by Owner. KSM will operate the Courses to high quality standards (i.e., golf course maintenance, customer service, etc.) as provided for in the approved Operating Budget. Subject to the terms of this Agreement and the approved Operating Budget, KSM shall have the authority and responsibility to: 3.4.1. Manage the Courses and use commercially reasonable efforts to achieve the approved Operating Budget; 3.4.2. Implement the policies and standards of the Courses, as approved by Owner; 3.4.3. Establish high quality golf course maintenance standards approved by Owner and funded appropriately in the Operating Budget; 3.4.4. Manage and supervise all day-to-day operations of the Courses, including tee time reservations, collecting green and cart fees, clubhouse operations, outside services, course maintenance, managing tournaments and events, payroll and benefits administration, accounting, and financial reporting, etc; 3.4.5. Hire, employ, train, and supervise all employees required to carry out KSM’s responsibilities; 3.4.6. Manage payment of the payroll and all operating expenses of the Courses as identified in the Operating Budget; 3.4.7. Determine hours of operations, dress code requirements, establish starter, marshal and other outside services, establish handicap services, and golf instruction programs; 3.4.8. Acquire all goods and services necessary to carry out KSM’s responsibilities; 3.4.9. Market the Courses to achieve targeted objectives; 3.4.10. Obtain licenses and other operating permits; 3.4.11. Negotiate contracts for maintenance equipment and carts to be executed by Owner; 3.4.12. Use commercially reasonable efforts to comply with all insurance and legal requirements of the Courses; and 3 KSM Management Agreement Form Rev 3/10 12736967v.4 3.4.13. Make repairs and other improvements to keep the Courses in good order. It is understood that some of the Management Services will only need to be provided when the Courses are open for business (e.g., customer survey and retention programs, certain staff training, certain marketing services, certain accounting responsibilities). 3.5. Budgets. All budgets, as hereinafter set forth (collectively the “Budgets”), shall be prepared with the advice and counsel of Owner, based on what KSM believes to be reasonable assumptions and projections, and delivered to Owner for Owner’s prior review and written approval. All Budgets shall be presented in reasonable detail. KSM shall not be deemed to have made any guarantee or warranty in connection with the results of operations or performance set forth in the Budgets and the parties acknowledge that the Budgets are based solely upon KSM’s judgment and the facts and circumstances known by KSM at the time of preparation. 3.5.1. Operating Budget. At least one-hundred thirty-five (135) days prior to the first day of each fiscal year during the Term, KSM shall submit to Owner, for Owner’s review and written approval, a preliminary operating budget setting forth the forecasted revenues and expenses associated with the operations of the Courses for the upcoming fiscal year or part thereof within the Term, which preliminary operating budget may be subject to adjustment until ninety (90) days prior to the first day of each fiscal year during the Term in order to reflect changes in forecasted revenues and expenses during such period (as adjusted, the “Operating Budget”). 3.5.2. Capital Expenditures Budget. At least one-hundred twenty (120) days prior to the first day of each fiscal year during the Term, KSM shall submit to Owner, for Owner’s review and written approval, a budget setting forth the proposed capital improvements (including equipment purchases and leases) within and to the Property for the upcoming fiscal year or part thereof within the Term (the “Capital Expenditures Budget”). 3.5.3. Owner’s Review and Approval of Budgets. The Budgets shall be for Owner’s review and written approval, subject to the terms of this Agreement. Owner shall give its written comment and approval by the first Monday in December of each year. In the event of disapproval of any Budgets, KSM shall continue operating the Courses pursuant to the Budgets then in effect, subject to increases in Operating Expenses required due to (i) increases in Gross Revenues or (ii) other matters beyond the control of KSM, until such time as Owner and KSM agree upon the appropriate replacement Budgets. 3.5.4. Unanticipated Expenditures and Reallocation of Funds. Owner agrees that the Budgets are intended to be reasonable estimates, and, accordingly, KSM shall be entitled from time to time to revise the Budgets to cover any expenditures that were unanticipated at the time of preparation of the Budgets but are reasonable and necessary to carry out the provisions of this Agreement; provided, however, that except as otherwise set forth in this Agreement, KSM shall be required to obtain Owner’s prior written approval of any expenditures which would result in the total budgeted expenditures being exceeded by more than five percent (5%) of the annual Operating 4 KSM Management Agreement Form Rev 3/10 12736967v.4 Budget. KSM is authorized to take all action reasonably deemed necessary by KSM to implement, perform, or cause the performance of the items set forth in the Budgets. Owner acknowledges that KSM has not made any guarantee, warranty, or representation of any nature whatsoever concerning or relating to (i) the Budgets, or (ii) the amounts of Gross Revenues or Operating Expenses to be generated or incurred from the operation of the Courses. 3.6. Course Operations. KSM shall use commercially reasonable efforts to perform all acts that are necessary in the opinion of KSM to operate and manage the Courses, subject to the Budgets, the Approval Rights and terms and conditions set forth herein, on behalf of and for the account, and at the sole cost and expense of, Owner, in accordance with the standards of quality expected at high quality golf courses in the vicinity of the Courses. KSM shall have the authority and responsibility for the administration, operation and management of the Courses and the Property. At a minimum, KSM shall perform the following acts and services: 3.6.1. Financial Management, Accounting Records and Reporting. Unless and until Owner elects for KSM to employ an on-site accountant or bookkeeper in accordance with this Section 3.6.1, the day-to-day accounting and financial affairs of the Courses shall be handled generally by KSM’s home office. KSM’s duties shall include (i) maintaining all books, records and other data associated with the financial activities of the Courses, (ii) preparing all operating budgets, cash flow budgets, and other financial forecasts, and (iii) being responsible for the day-to-day financial affairs of the Courses (the “Accounting Services”). All accounting records shall be maintained in a format consistent (in all material respects) with generally accepted accounting principles. In order to reimburse KSM for the use of its internal resources in connection with the performance of such Accounting Services by its home office, Owner shall pay to KSM a monthly accounting reimbursement as described in Section 5.2.2 (the “Accounting Reimbursement”), which Accounting Reimbursement shall be an Operating Expense. Owner may request, upon ninety (90) day written notice to KSM, that KSM employ an on-site accountant or bookkeeper at the Courses to perform the Accounting Services. The costs and expenses of such on-site accountant or bookkeeper shall be an Operating Expense. (A)Financial Reporting. During the Term, KSM shall provide the following financial statements in a format reasonably specified by Owner: i.KSM shall submit to Owner, within twenty (20) days after the close of each calendar month, a financial statement showing in reasonably accurate detail the financial activities of the Courses for the preceding calendar month and the fiscal year to date. ii. KSM shall submit to Owner, within sixty (60) days after the close of each fiscal year, a financial statement showing in reasonably accurate detail the financial activities of the Courses for the fiscal year then ended. 5 KSM Management Agreement Form Rev 3/10 12736967v.4 (B)Statistical Reporting and information. i.KSM shall provide to the Owner appropriate statistical records and reports regarding activity at and use of the Property by the public as may, from time to time, reasonably be requested or required by the Owner, City Manager, Assistant City Manager, and/or Comptroller. ii.KSM shall submit to the Owner monthly records showing the number and category of golf rounds played at each golf course, with substantiating records, within twenty (20) days after the close of each calendar month. Such records and reports shall, at a minimum, show an itemized statement of all Gross Revenue categories, a Gross Revenue analysis, and Annual Passes sold by category. iii.Any and all statistical records, reports and information KSM provides to the Owner must be categorized separately for the Riverside Golf Course and the Blackhawk Golf Course to the extent available under point-of-sale reporting software and systems. (C)Internal Control. KSM agrees to develop, install, and maintain reasonably appropriate accounting, operating, and administrative controls governing the financial aspects of the Courses, such controls to be consistent (in all material respects) with generally accepted accounting principles. (D) Records and Inspection. KSM shall maintain a set of all financial, vendor and operating records relating to the Courses at the Property. At any time during the Term, Owner shall have the right, after three (3) days prior written notice to KSM, to inspect the books, records, invoices, deposits, canceled checks, or other financial data or transactions of the Courses at reasonable times and during normal business hours; provided, however, Owner shall use its best efforts to not cause any disruptions in the operations of the Courses in connection with such inspections. Notwithstanding the foregoing, such inspection rights shall not extend to any inspection of KSM corporate records at its corporate office nor any records relating to any other KSM projects or locations. Upon expiration or termination of this Agreement, KSM will promptly turn over all such Course records to Owner. KSM acknowledges the need to comply with Wisconsin’s Public Records Laws, as from time to time amended and/or renumbered, with respect to records relating to the Courses. 3.6.2. Bank Accounts. KSM shall assist Owner in establishing, in Owner’s name, utilizing the federal tax identification number of Owner, a deposit account (the “Deposit Account”). KSM shall establish a disbursement account for payroll and operating expense obligations (the “Disbursement Account”) in KSM’s name. The records and bank statements shall be subject to inspection by Owner pursuant to the terms recited herein. All Gross Revenues of the Property shall be collected, received, and deposited by KSM exclusively through the Deposit Account in accordance with the terms 6 KSM Management Agreement Form Rev 3/10 12736967v.4 of this Agreement. KSM will be provided the bank information of the Deposit Account on an inquiry only basis in order to perform its duties related to cash management and reconciliation. All Gross Payroll and Operating Expenses shall be handled and expended exclusively through the Disbursement Account. The Owner shall electronically transfer sufficient funds to KSM’s Disbursement Account once a week, if necessary, to pay all Operating Expenses. On a bi-weekly basis and in accordance with Section 4.2, the City shall electronically transfer sufficient funds to pay all Gross Payroll obligations and maintain the Payroll Expense Minimum. 3.6.3. Employees. As part of the Operating Budget, KSM shall (i) determine personnel requirements, recruitment schedules, and compensation levels, (ii) furnish job descriptions, performance appraisal procedures, employee benefit programs, and operational and procedural manuals for all personnel, and (iii) establish forms and procedures for employee compensation and Course incentive programs. KSM shall hire, employ, promote, discharge, and supervise all employees performing services in and about the Courses. All of the employees of the Courses shall be employees of KSM and not of the Owner. 3.6.4. Marketing. KSM shall make recommendations to Owner as to green fees and other fees and rates. KSM shall develop the ongoing marketing plan for the Courses and define a schedule of marketing and advertising activities, which shall be submitted to Owner as part of the Operating Budget. Upon Owner’s approval, KSM shall indicate on the premises that the Courses are being operated by KSM. 3.6.5. Fee Schedule. (A)KSM shall prepare and submit in writing to the City Manager, no later than 1 October of the immediately preceding year, any and all proposed fee changes for the immediately subsequent year, which fees, if approved by the Owner, shall become effective the following January 1st. In the event Owner does not approve the fee schedule prepared by KSM, each Budget prepared with reference to such fee schedule shall be revised to reflect any changes such Budget attributable to changes to the fee schedule. (B)KSM may alter or add new fee categories only following prior review by the Golf Course Advisory Committee constituted by the Common Council (the “GCAC”), together with written authorization from the City Manager or his/her designee. (C)KSM shall not alter, eliminate nor modify Annual Pass categories or pass restrictions without prior review by of the GCAC and the prior written approval of the City Manager. 3.7. Owner Approval Rights. Except as specified elsewhere in this Agreement, Owner shall retain certain approval and comment rights on matters affecting the operation of the Courses. Specifically, and not limited to, the Owner shall approve: 7 KSM Management Agreement Form Rev 3/10 12736967v.4 (A)Annual operating budget (B)Capital budget (C)Hours of operation, including opening and closing dates (D)Greens fees, Annual Passes, and cart rental rates The Owner shall have the right to render advice and make recommendations any time KSM seeks to hire for the positions of General Manager or Golf Course Superintendent. The City Manager, or their designee, shall participate in the interview and selection process and shall offer their input, suggestions, and advice. However, such participation and input is advisory only and in no manner shall it constitute nor be construed as constituting any offer of employment to such person by or with the Owner and KSM shall have the ultimate authority to select and hire candidates for the positions of General Manager and Golf Course Superintendent. 3.8. Golf Course Advisory Committee - Meetings Upon reasonable notice and upon reasonable intervals (except in emergency situations), KSM shall cause a representative of KSM familiar with the operation of the Courses to meet with the GCAC, City Manager, Assistant City Manager, Comptroller, and/or Common Council to discuss the operation, maintenance, development, and related issues relating to the operation and maintenance of the Courses and the performance of this Agreement. 3.9. Environmental Remediation. Throughout the Term, if KSM becomes aware of the presence of any Hazardous Material in a quantity sufficient to require remediation or reporting under any Environmental Law in, on or under the Property or if KSM, Owner, the Courses, or the Property becomes subject to any order of any federal, state or local agency to investigate, remove, remediate, repair, close, detoxify, decontaminate, or otherwise clean up the Property, KSM shall, at Owner’s request and sole expense, use all commercially reasonable efforts to carry out and complete any required investigation, removal, remediation, repair, closure, detoxification, decontamination, or other cleanup of the Property; provided that such remediation activities shall be at KSM’s expense if such activities are required as a direct consequence of Hazardous Material being present in, on or under the Property solely as a result of grossly negligent actions undertaken by KSM. Owner acknowledges and agrees that Owner shall be solely responsible for any legal or other liability arising out of the presence of any Hazardous Material in, on, or under the Property, except to the extent such Hazardous Material is present in, on or under the Property solely as a result of grossly negligent actions undertaken by KSM. 3.10. Contracts. KSM shall negotiate, consummate, enter into, and perform, in the name of the Courses, such agreements as KSM may deem necessary or advisable for the furnishing of all food, beverages, utilities, concessions, entertainment, operating supplies, equipment, repairs, and other materials and services as KSM determines are needed from time to time for the management and operation of the Courses. Notwithstanding the above, any contract which exceeds Twenty Five Thousand Dollars ($25,000) in total payments over the term of such contract or which has a term of over one (1) year shall require the prior written consent of Owner, which consent shall be deemed to have been given if Owner neither consents nor disapproves within ten (10) business days after KSM’s written request for approval. Any contract that cannot be made in the name of the Courses shall be provided to Owner for its execution in the name of Owner. 8 KSM Management Agreement Form Rev 3/10 12736967v.4 3.11. Licenses, Permits, and Accreditations. KSM shall apply for and use its commercially reasonable efforts to obtain and maintain, in the name of KSM or a KSM affiliate (or, if otherwise required by applicable Laws, in Owner’s name), all licenses, permits, and accreditations required in connection with the management and operation of the Courses, the cost of which shall be an Operating Expense. Owner will cooperate with KSM in applying for, obtaining, and maintaining such licenses (including liquor licenses), permits, and accreditations, the cost of which shall be an Operating Expense. All alcohol licenses shall be solely in the name of KSM or a KSM affiliate. 3.12. Legal Action. KSM may not institute any legal action by or on behalf of Owner or the Courses without the prior written consent of Owner and Owner may not institute any legal action by or on behalf of KSM without the prior written consent of KSM. 3.13. Emergency Expenditures. In the event, at any time during the Term, a condition should exist in, on, or about the Property of an emergency nature which, in KSM’s sole and absolute discretion, requires immediate action to preserve and protect the Property, to better assure the Courses' continued operation, or to protect the Courses' customers, guests, or employees, KSM is authorized to take all steps and to make all reasonable expenditures necessary to repair and correct any such condition, whether or not provisions have been made in the applicable Budgets for any such expenditures. Owner shall be notified of the need for, and estimated amount of, any such emergency expenditures as soon as reasonably practical. 3.14. Compliance with Laws. KSM shall use all commercially reasonable efforts to (i) comply with all federal, state and local laws, ordinances, rules, or governmental regulations now or hereafter in force, or by order of any governmental or municipal power, department, agency, authority, or officer (collectively “Laws”) applicable to the use, operation, maintenance, repair, and restoration of the Courses and Property, whether or not compliance therewith shall interfere with the use and enjoyment of the Courses and Property; and (ii), except for those which are the obligation of Owner or Owner’s separate contractors, procure, maintain, and comply with all licenses and other authorizations required for any use of the Courses and Property then being made, and for the operation and maintenance of the Courses and Property or any part thereof, the costs of which shall be Operating Expenses. Notwithstanding the foregoing, Owner acknowledges and agrees that Owner or its construction contractors shall be responsible for procuring, maintaining, and complying with all licenses and other authorizations relating to design, construction, zoning, erection, installation, and similar matters relating to any construction at the Courses. If at any time during the Term KSM is notified or determines that repairs, additions, changes, or corrections in the Property of any nature shall be required by reason of any Laws, KSM shall notify Owner and request Owner’s consent to take all reasonable steps and to make all reasonable expenditures necessary to repair and correct any such repairs, additions, changes, or corrections whether or not provisions have been made in the applicable Budgets for any such expenditures, the costs of which shall be Operating Expenses. If Owner withholds such consent, KSM shall not be liable for any failure of the Property to be in compliance with such Laws. 3.15. Other Duties and Prerogatives. KSM shall use commercially reasonable efforts to perform any act that is necessary to operate and manage the Courses and the Property during the Term, subject to the terms and conditions hereof. In fulfilling its operational and managerial 9 KSM Management Agreement Form Rev 3/10 12736967v.4 responsibilities hereunder, KSM shall have all rights ordinarily accorded to a manager in the ordinary course of business, including, without limitation, the collection of proceeds from the operation of the Courses and the Property, the incurring of trade debts in Owner’s name (other than mortgage indebtedness), the approval and payment of obligations, and the negotiating and signing of leases and contracts. KSM shall not be obligated to advance any of its own funds to or for the account of Owner nor to incur any liability, unless Owner shall have furnished KSM with funds necessary for the full discharge thereof. Further, KSM shall not be obligated to sign any leases, contracts, or other agreements in KSM’s name. However, if for any reason KSM shall have advanced funds in payment of any reasonable expense in connection with the maintenance and operation of the Courses or the Property, Owner shall reimburse KSM within twenty (20) days after Owner’s receipt of an invoice for the full amount of such KSM advance payments. ARTICLE 4 RESPONSIBILITIES OF OWNER 4.1Expenditures. Owner acknowledges that it is solely responsible for all Operating Expenses, Management Fees, lease obligations and capital expenditures required for or on behalf of the Courses provided that such Operating Expenses and capital improvements are made in accordance with the terms of this Agreement. Owner shall be responsible for all other expenditures and obligations in connection with the Courses and the Property, including without limitation, all federal, state and local taxes, and all principal and interest payments on indebtedness. 4.2Owner’s Advances. Owner shall transfer funds to the Disbursement Account described in Section 3.5.2 to conduct the affairs of the Courses and maintain the Property (the “Owner’s Advances”). In accordance with Section 3.6.2, Owner’s Advances shall be transferred weekly to the Disbursement Account, as needed, by electronic or other automatic clearing house transfer following receipt by Owner of a written request from KSM in the form of a check register detailing checks to be drawn, together with such supporting invoices or payroll register information as reasonably requested by Owner. Owner acknowledges and agrees that it has sole responsibility for providing Owner’s Advances and KSM shall have no responsibility to provide funds for the payment of any Operating Expenses, Gross Payroll, debts, or other amounts payable by or on behalf of the Club, the Property, or Owner. On or before the Operations Commencement Date (and in any event, prior to KSM’s incurrence of any Gross Payroll obligations), Owner shall remit to KSM for deposit into the Disbursement Account, Owner’s Advances equal to two (2) weeks’ estimated Gross Payroll (as specified in the approved Budget) (the “Payroll Expense Minimum”). Owner shall replenish the Disbursement Account in order to maintain the Payroll Expense Minimum in the Disbursement Account as described below. On a bi-weekly basis, KSM shall provide Owner with a statement describing the Gross Payroll use of funds. Within five (5) days after Owner’s receipt of such statement from KSM, Owner shall remit to the Disbursement Account the amount set forth on such statement. KSM shall use the funds in the Disbursement Account to pay the Operating Expenses, including the Gross Payroll, of the Courses. The parties agree to adjust the Payroll 10 KSM Management Agreement Form Rev 3/10 12736967v.4 Expense Minimum seasonally, or as otherwise required from time to time, in order to reflect the then-current payment obligations of the Courses. ARTICLE 5 FEES, EXPENSES AND RECEIPTS. 5.1Transition Services Fee. Commencing on the Commencement Date until the Operations Commencement Date, in addition to reimbursement of its out of pocket expenses as described in Section 5.3 below, Owner shall pay KSM a monthly transition services fee (the "Transition Services Fee") of Three Thousand Five Hundred and 00/100 Dollars ($3,500), which fee shall be paid on the Commencement Date and then monthly, in advance, no later than the first day of each calendar month until the Operations Commencement Date. The Transition Services Fee shall be prorated for any partial month occurring during such transition period. 5.2Management Fee. Commencing on the Operations Commencement Date, Owner shall pay KSM management fees as follows (the “Management Fee”): 5.2.1Base Management Fee. Owner shall pay KSM a monthly fee of Six Thousand Two Hundred Fifty and 00/100 Dollars ($6,250.00) (the “Base Management Fee”), which fee shall be paid in advance, no later than the first day of each calendar month. (Such Base Management Fee shall be prorated for any partial calendar month occurring during the Term.) The Base Management Fee shall be increased each year on the anniversary of the Operations Commencement Date by the All Urban Consumer Price Index (AUCPI) or three percent (3%), whichever is less. Payment of the Base Management Fee may be made directly from the Disbursement Account. 5.2.2Accounting Reimbursement. For so long as KSM provides Accounting Services from its home office, Owner shall pay KSM an annual Accounting Reimbursement equal to Eighteen Thousand Dollars ($18,000). The Accounting Reimbursement shall be paid in equal monthly installments, in advance, no later than the first day of each calendar month and may be paid directly from the Disbursement Account. The Accounting Reimbursement shall be increased each year on the anniversary of the Operations Commencement Date by the All Urban Consumer Price Index (AUCPI) or three percent (3%), whichever is less. 5.2.3Incentive Management Fee. In addition to the fees described above, Owner shall pay KSM an annual incentive management fee (the “Incentive Management Fee”) equal to thirty percent (30%) of the first $30,000 of EBITDA and forty percent (40%) of EBITDA in excess of $ 30,000 for the Courses, on a consolidated bases, for the applicable fiscal year. [For example: If EBITDA for the Courses, on a consolidated basis, was $48,000 for a particular fiscal year, the Incentive Management Fee for such year would be equal to $16,200 (0.30*30,000) + (0.40*18,000)] 11 KSM Management Agreement Form Rev 3/10 12736967v.4 The Incentive Management Fee shall be paid to KSM within sixty (60) days after the end of the fiscal year to which the Incentive Management Fee relates. 5.3Out-of-Pocket Expenses. Commencing on the Commencement Date, in addition to all other fees and expenses recited herein payable to KSM, and subject to Owner’s approval of same in the Budgets, it is agreed that Owner shall reimburse KSM within twenty (20) days of Owner’s receipt of KSM’s invoice for all actual out-of-pocket expenses incurred by KSM in the performance of this Agreement. Out-of-pocket expenses shall include, but shall not be limited to, reasonable travel, air express, costs of recruitment (including applicable agent’s fees), and other incidental expenses. Reimbursement for such out-of-pocket expenses will be made at actual cost and may be made directly from the Disbursement Account. It is understood that the out-of-pocket expenses will be capped at an aggregate maximum in the amount of Three Thousand Five Hundred and 00/100 Dollars ($3,500.00) per year (excluding any costs of recruitment) unless otherwise approved by Owner. 5.4Late Fees. Owner shall pay to KSM all of the fees described above, and any other sums due KSM, at the times, at the places, and in the manner herein provided. If any payment or any part thereof to be made by Owner to KSM, pursuant to the terms hereof, shall become overdue for a period of thirty (30) days, a “late charge” may be charged by KSM for the purpose of defraying the expense incident to handling such delinquency. The late charge shall be equal to the lesser of (i) one percent (1%) per month, or (ii) the highest amount allowed to be charged under applicable law. In the event any portion of this Section violates any state or federal law or regulation, this Section shall be deemed void and shall have no other effect or make invalid any other provision of this Agreement. Further, nothing herein shall be construed as waiving any rights of KSM arising out of any Events of Default of Owner by reason of KSM assessing or accepting any such late payment or late charge; the right to collect the late charge is separate and apart from any rights relating to remedies of KSM after default by Owner in the performance or observance of the terms of this Agreement. Owner shall bear the costs of any reasonable legal or collection fees and expenses incurred by KSM in attempting to enforce Owner’s payment obligations hereunder. 5.5 Automatic Withdrawal. In the reasonable discretion of KSM, upon the occurrence of an Insecurity Event, Owner shall take all necessary steps to initiate and authorize payment of the Management Fees and the out of pocket expenses of KSM through automatic withdrawal from an account designated by Owner and wire transfer to an account designated by KSM. Such automatic withdrawal shall occur on or before the first day of each month for services to be rendered during the upcoming month. 5.6 Deposit. In the reasonable discretion of KSM, upon the occurrence of an Insecurity Event, KSM will require the payment of a security deposit which will not be applied against amounts owing by Owner to KSM and will be retained by KSM as security for the payment of fees and expenses and returned to Owner at the end of the engagement. The terms and conditions applicable to the retainer are set forth in this Section 5.6. 5.6.1 Amount and Payment of Deposit. The initial deposit (the “Deposit”) shall be set at an amount equal to the aggregate of the Management Fees plus the expected out-of- pocket expenses of KSM, each to be estimated by KSM in its reasonable discretion based 12 KSM Management Agreement Form Rev 3/10 12736967v.4 on expected amounts due and owing from Owner to KSM during a one (1) month period. KSM shall have the right to request that Owner add to the Deposit in the event that, at any time, KSM’s monthly Management Fees plus the monthly expected out of pocket expenses exceeds the amount of the Deposit. Such Deposit shall be submitted by Owner as directed by KSM within fifteen (15) days after KSM’s request. 5.6.2 Security Interest in Deposit. The Deposit is a separate obligation of Owner and Owner understands and agrees that failure to submit such Deposit in accordance with the terms of this Agreement shall constitute an Event of Default hereunder. The Deposit shall not be applied or credited to amounts due from Owner as they come due, but will be returned to Owner once all amounts due hereunder are paid in full. Owner hereby grants a security interest in the Deposit to KSM to secure payment of all amounts due hereunder and expressly authorizes KSM to pay itself any amounts past due from the Deposit. Owner acknowledges and agrees that this security interest is perfected by virtue of KSM’s possession of the Deposit. 5.6.3. Interest on Deposit. Interest earned on the Deposit is the property of Owner and shall be returned to Owner once all amounts due under the Agreement are paid in full. KSM shall maintain such Security Deposit in an interest bearing account. The Deposit is not intended to be an estimate for the total expenses to be incurred by Owner hereunder. 5.7 Payment Prior to Insolvency Proceeding. Prior to the initiation of an Insolvency Proceeding (as defined in Section 11.3 below) by Owner, if applicable, Owner shall pay all amounts then outstanding and owing to KSM in immediately available funds by wire transfer. ARTICLE 6 COVENANTS AND REPRESENTATIONS 6.1Owner’s Covenants and Representations. Owner makes the following covenants and representations to KSM, which covenants and representations shall, unless otherwise stated herein, survive the execution and delivery of this Agreement: 6.1.1Corporate Status. Owner is a municipal corporation duly organized, validly existing, and in good standing under the laws Wisconsin, and authorized to transact business in Wisconsin, with full corporate power and authority to enter into this Agreement. 6.1.2Authorization. The making, execution, delivery, and performance of this Agreement by Owner has been duly authorized and approved by all requisite action. This Agreement has been duly executed and delivered by Owner and constitutes a valid and binding obligation of Owner, enforceable in accordance with its terms. 6.1.3Effect of Agreement. Neither the execution and delivery of this Agreement by Owner nor Owner’s performance of any obligation hereunder (a) shall constitute a 13 KSM Management Agreement Form Rev 3/10 12736967v.4 violation of any law, ruling, regulation, or order to which Owner is subject, or (b) shall constitute a default of any term or provision or shall cause an acceleration of the performance required under any other agreement or document (i) to which Owner is a party or is otherwise bound, or (ii) to which the Courses, the Property or any part thereof is subject. 6.1.4Ownership Rights. As of the Commencement Date and throughout the Term of this Agreement, Owner owns and shall retain all right, title, and interest in the Courses and the Property peaceably and quietly. Owner represents and warrants that KSM’s performance of any of the services contemplated by this Agreement shall not violate the property rights or interests of any other Person. 6.1.5Documentation. If necessary to carry out the intent of this Agreement, Owner agrees to execute and provide to KSM, on or after the Commencement Date, any and all other instruments, documents, conveyances, assignments, and agreements which KSM may reasonably request in connection with the operation of the Courses. 6.2KSM’s Covenants and Representations. KSM makes the following covenants and representations to Owner, which covenants and representations shall, unless otherwise stated herein, survive the execution and delivery of this Agreement: 6.2.1Corporate Status. KSM is a corporation duly organized, validly existing, and in good standing under the laws of Illinois, and authorized to transact business in Wisconsin, with full corporate power to enter into this Agreement and execute all documents required hereunder. KSM shall designate a Wisconsin corporate agent for all purposes. Every alcohol license agent of KSM for the Courses and Property in Janesville shall be a resident of Rock County and satisfy all other qualifications and requirements of applicable Laws, in all material respects. 6.2.2Authorization. The making, execution, delivery, and performance of this Agreement by KSM has been duly authorized and approved by all requisite action of the board of directors of KSM. This Agreement has been duly executed and delivered by KSM and constitutes a valid and binding obligation of KSM, enforceable in accordance with its terms. 6.2.3Effect of Agreement. Neither the execution and delivery of this Agreement by KSM nor KSM’s performance of any obligation hereunder (i) will constitute a violation of any law, ruling, regulation, or order to which KSM is subject, or (ii) shall constitute a default of any term or provision or shall cause an acceleration of the performance required under any other agreement or document to which KSM is a party or is otherwise bound. 14 KSM Management Agreement Form Rev 3/10 12736967v.4 ARTICLE 7 INSURANCE 7.1Course Insurance. During the Term, the following insurance shall be maintained in connection with the operations at the Courses: 7.1.1 Insurance Maintained by Owner. During the Term, Owner shall secure the following insurance: (A) Property Insurance covering loss or damage to the buildings, structures, or other Improvements, contents, equipment, and supplies. Such Property Insurance shall include a waiver of all right of recovery by way of subrogation against KSM and Owner in relation to any damage covered by such policy. (B) Business Interruption, Loss of Income, and Extra Expense Insurance that will reimburse Owner and KSM for direct and indirect loss of earnings attributable to six (6) months of business interruption and for the actual loss sustained until the structures are substantially rebuilt after an insured property loss. 7.1.2 Insurance Maintained by KSM. KSM shall secure, the cost of which shall be an Operating Expense, the following insurance covering its on-site activities under this Agreement: (A) Commercial General Liability and/or Umbrella/Excess Liability Insurance providing coverage for bodily injury and property damage arising in connection with the operation of the Club or on the Property and including coverage for contractual liability providing limits of not less than: Bodily Injury and Property Damage Liability - $5,000,000 each occurrence Personal Injury and Advertising Liability - $5,000,000 per person or per organization General Policy Aggregate - $5,000,000 Products Liability/Completed Operations Aggregate - $5,000,000 (B) Commercial Business Automobile Liability Insurance including coverage for all owned, non-owned, and hired vehicles providing coverage for bodily injury and property damage liability with combined single limits of not less than $1,000,000. (C) Commercial Liquor Liability including coverage for damages arising out of the selling, serving or furnishing of any alcoholic beverage with a limit of $5,000,000 per occurrence/$5,000,000 aggregate limit or the minimum limits required by statute if higher. Special Note: the limits of liability specified in A, B and C above can be satisfied through a combination of primary, umbrella, or excess liability policies, provided that the 15 KSM Management Agreement Form Rev 3/10 12736967v.4 coverage under such umbrella or excess liability policies is at least as broad as the primary coverage. (D) Workers’ Compensation Insurance in such amounts that comply with applicable statutory requirements, and Employer’s Liability limits, including Umbrella Liability Insurance, if necessary, of not less than $1,000,000 per accident, $1,000,000 disease- policy limit, and $1,000,000 disease each employee. (E) Fidelity Bond or Fidelity Insurance covering all employees who have access to or responsibility for or who handle Owner funds. All such insurance coverage maintained by KSM (except as set forth in (D) and (E)) shall name Owner as additional insured and shall be maintained with insurance companies rated at least A- by Best Key Rating Guide and shall be licensed to do business in Wisconsin. KSM shall deliver to Owner certificates of such insurance evidencing the required policies together with original copies of the policies if requested. Property insurance shall include a waiver of all recovery by way of subrogation against KSM and Owner in relation to any damage covered by such policy. The expenses for all the coverages outlined in Section 7.1.2 (A) through (E) above shall be Operating Expenses. 7.2Owner’s Option to Provide Insurance. Upon Owner’s prior written notification to KSM, Owner may procure and maintain, at Owner’s sole cost and expense, with insurance companies rated at least A- by Best’s Key Rating Guide, and licensed to do business in Wisconsin, sufficient insurance fully covering the Property and operation of the Courses, in at least the amounts specified in Section 7.1.1 and 7.1.2 (A) through (C) above. All such insurance shall name KSM and its shareholders, officers, directors, employees, agents, and representatives as additional insureds. Owner shall deliver to KSM certificates of insurance evidencing the above-required policies. Property insurance shall include a waiver of all recovery by way of subrogation against KSM in relation to any damage covered by such policy. Within fifteen (15) days after receipt of such written notification from Owner, along with appropriate certificates of insurance, KSM shall no longer secure the coverage specified in Section 7.1.2 (A) through (C) above; provided, however, that KSM shall continue to secure the coverage specified in Section 7.1.2 (D) and (E) above. The expenses for the coverages provided by KSM shall be Operating Expenses. 7.3 Waiver of Subrogation. Notwithstanding anything else contained in this Agreement, Owner and KSM each hereby waive all rights of recovery against the other and their Affiliates, and against each of their officers, employees, agents, and representatives, on account of loss by or damage to the waiving party’s property or the property of others under its control, to the extent that such loss or damage is (i) insured against under any insurance policy which either may have in force at the time of the loss or damage; or (ii) is required to be insured against in accordance with this Agreement; or (iii) given the facts and circumstances surrounding the Property and the Courses, should reasonably be insured against by the Owner (in any case, regardless of whether or not such insurance policy is in effect). Owner shall, upon obtaining any policies of insurance required under this Agreement, give notice to its insurance carrier or 16 KSM Management Agreement Form Rev 3/10 12736967v.4 carriers that the foregoing mutual waiver of subrogation is contained in this Agreement. This waiver of subrogation shall survive the expiration or termination of this Agreement. 7.4 Notice to Owner of Insurance Lapse, Default, Material Modification. The Owner shall be provided not less than ten (10) days prior notice of any lapse or material change of any such policy(ies). 7.5 The insurance provided by KSM shall be occurrence based insurance coverage. ARTICLE 8 DAMAGE AND CONDEMNATION 8.1Substantial Destruction. In the event the Real Property, Tangible Personal Property, and/or Improvements are damaged or destroyed by fire or other casualty to the extent that the damage cannot be materially restored with due diligence within two hundred seventy (270) days following such event, either party hereto may terminate this Agreement upon written notice to the other party given within ninety (90) days following the date of such destruction. In the event of termination of this Agreement pursuant to this Section, the Term shall cease and come to an end as of the effective date of termination specified in the termination notice (which shall in no event be prior to the date of receipt of the termination notice) as though such date were the date originally fixed for the expiration of the Term. Both parties shall pay all amounts due to the other party up to such effective date of termination (or, with respect to amounts due to KSM, after such date if it is reasonably necessary to incur additional expenses in the wind-down of operations of the Courses). 8.2Partial Destruction. In the event the Real Property, Tangible Personal Property, and/or Improvements, or any portion thereof, is damaged or destroyed by fire or other casualty and such damage can be materially restored with due diligence within two hundred seventy (270) days following such event, Owner shall have the obligation to repair the damaged Real Property, Tangible Personal Property, and/or Improvements as nearly as practicable to the condition the same were in prior to such damage. Owner shall cause such repair to be made with all reasonable dispatch so as to complete the same at the earliest possible date. ARTICLE 9 INDEMNIFICATION 9.1Owner’s Indemnification Obligations. Except as provided in Section 7.3, Owner shall defend, indemnify, and hold KSM and its Affiliates and each of their shareholders, members, officers, directors, managers, employees, agents, and representatives (the “KSM Related Parties”) harmless of and from all liability, loss, damage, cost, or expense (including, without limitation, reasonable attorneys’ fees and expenses) arising from or relating to (i) the performance of the Transition Services or the Management Services on behalf of Owner, and (ii) the ownership, leasing, organization, development or construction of the Courses or the Property; 17 KSM Management Agreement Form Rev 3/10 12736967v.4 and (iii) Hazardous Materials or other conditions existing at the Courses or the Property; and (iv) the use by KSM of Course trade names, trademarks, logos, or other intellectual property used in connection with the Courses; and (v) any acts or omissions of Owner (or its officers, directors, agents, employees, representatives, contractors and others for whom Owner is responsible); and (vi) any activities in connection with the transition of the management of the Courses to KSM; and (vii) any acts or omissions occurring in connection with the operation or management of the Courses prior to the Term and (viii) the relationship between Owner or any of Owner’s Affiliates and the prior lessee of the Courses or any acts or omissions of the prior lessee;to the fullest extent permitted by law, except to the extent such liabilities were caused by KSM’s willful or criminal misconduct, gross negligence, ordinary negligence, or fraud. Owner’s duty to defend and indemnify KSM and the KSM Related Parties shall extend to all liability, loss, damage, cost, or expenses hereunder arising from or relating to any event or occurrence taking place prior to, during, or after the Term. 9.2 KSM’s Indemnification Obligations. Except as provided in Section 7.3, KSM shall defend, indemnify and hold Owner and Owner’s elected and appointed officials, officers, employees, agents, representatives, and insurers, (the “Owner Related Parties”) harmless of and from all liability, loss, damage, cost, or expense (including, without limitation, reasonable attorneys’ fees and expenses) arising from or relating to the negligent acts or omissions of KSM (or its officers, directors, agents, employees, representatives, contractors, and others for whom KSM is responsible), to the fullest extent permitted by law, except to the extent such acts or omissions were directed or approved by Owner, or such liabilities were caused by Owner’s willful or criminal misconduct, gross negligence, ordinary negligence or fraud. KSM’s duty to defend and indemnify Owner and the Owner Related Parties shall extend to all liability, loss, damage, cost, or expenses hereunder arising from or relating to any event or occurrence taking place prior to, during, or after the Term. Notwithstanding anything else contained herein, Owner acknowledges that KSM shall not be responsible for any damage to property under the Owner’s care, custody, and control (except to the extent caused by KSM’s willful or criminal misconduct, gross negligence, or fraud), and that Owner shall ensure that all such damage is covered by appropriate insurance coverage. 9.3 Survival. The defense and indemnification obligations contained in this Article 9 shall survive the expiration or termination of this Agreement, and any and all extensions and renewal hereof, for any reason. ARTICLE 10 RIGHT TO CURE 10.1Performance. Other than with respect to Owner’s obligations pursuant to Section 5.5 to 5.6 hereof, if, after the expiration of any permitted grace period or notice and cure period, a party hereto shall have failed to cure any default in the performance of any representation, covenant, or obligation on its part to be performed, then the other party may, at any time thereafter, without further notice, perform the same for the account and at the expense of the other party. Notwithstanding the above, in the case of an emergency, either party may, after notice to the other party, so reasonably perform in the other party’s stead prior to the expiration 18 KSM Management Agreement Form Rev 3/10 12736967v.4 of any applicable grace period; provided, however, the other party shall not be deemed in default under this Agreement. 10.2Reimbursement. If, pursuant to this Article, either party at any time is compelled or elects (as permitted by the immediately preceding Section) (i) to pay any sum of money, (ii) to do any act which will require the payment of any sum of money, or (iii) to incur any expense (including reasonable attorneys’ fees) in instituting, prosecuting, and/or defending any action or proceeding instituted by reason of the other party’s failure to perform, as described in the immediately preceding Section, the sum or sums paid or payable by such party, with all interest, cost, and damages, shall be immediately due from the other upon receipt of a statement and reasonable documentation therefor. 10.3Disgorgement. If the incurring of any debt or the payments of money or transfers of property made to KSM by or on behalf of Owner, pursuant to this Agreement or any related documents shall subsequently be declared to be “void” or “voidable” within the meaning of any state or federal law relating to creditors’ rights, including, without limitation, fraudulent conveyances, a preference, or otherwise voidable or recoverable, in whole or in part, for any reason under the federal Bankruptcy Code or any other federal or state law (individually, a “Voidable Transfer”), and if KSM is required to repay or restore any such Voidable Transfer or the amount or any portion thereof, or upon the advice of its counsel is advised to do so, then, as to any such Voidable Transfer or the amount repaid or restored (including all reasonable costs, expenses and attorneys’ fees of Servicer on behalf of KSM related thereto), the obligations to KSM, or portion thereof, paid or deemed satisfied by such Voidable Transfer or such amount shall automatically be revived, reinstated and restored to the extent that such obligation to KSM, or portion thereof, existed immediately prior to such Voidable Transfer, and such indebtedness to KSM, or portion thereof, shall exist as though such Voidable Transfer had never been made, and this Agreement and all liens granted hereunder shall be revived, reinstated and restored as though such Voidable Transfer had never been made. Moreover, KSM shall be entitled to the imposition of a constructive trust and equitable lien on all of Owner’s assets to the extent any liens and security interest under this Agreement are not revived, reinstated or restored and there remains amounts due and owing under this Agreement as a consequence of a Voidable Transfer. ARTICLE 11 EVENTS OF DEFAULT The occurrence of any one or more of the following events which is not cured within the specified cure period, if any, shall constitute a default under this Agreement (hereinafter referred to as an “Event of Default”): 11.1Failure to Pay Sums Due. Either party’s failure to pay any sums payable under this Agreement when and as the same shall become due and payable and such failure shall continue for a period of fifteen (15) days (unless a longer period of time is specifically provided 19 KSM Management Agreement Form Rev 3/10 12736967v.4 for elsewhere in this Agreement) after written notice (specifying the item not paid) thereof from the other party to the defaulting party. 11.2Failure to Comply. Either party’s material failure to comply with any of the covenants, agreements, terms, or conditions contained in this Agreement and such failure shall continue for a period of thirty (30) days after written notice thereof from the other party to the defaulting party specifying in detail the nature of such failure. Notwithstanding the foregoing, in the event any such failure cannot with due diligence be cured within such 30-day period, if the defaulting party proceeds promptly and diligently to cure the same and thereafter diligently prosecutes the curing of such failure, the time within which the failure may be cured shall be extended for an additional period of thirty (30) days. Any extension of time for cure beyond the additional thirty (30) day period shall require the approval of both parties hereto. 11.3Bankruptcy. If either party (i) applies for or consents to the appointment of a receiver, trustee, or liquidator of itself or any of its property, (ii) is unable to pay its debts as they mature or admits in writing its inability to pay its debts as they mature, (iii) makes a general assignment for the benefit of creditors, (iv) is adjudicated as bankrupt or insolvent, or (v) files a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors, or taking advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or admits the material allegations of a petition filed against it in any proceedings under any such law, or if any action shall be taken by said party for the purpose of effecting any of the foregoing (collectively, an “Insolvency Proceeding”). 11.4Reorganization; Receiver. An order, judgment, or decree is entered without the application, approval, or consent of either party by any court of competent jurisdiction approving a petition seeking reorganization of said party or appointing a receiver, trustee, or liquidator of said party, or of all or a substantial part of any of the assets of said party, and such order, judgment, or decree remains unstayed and in effect for a period of ninety (90) days from the date of entry thereof. ARTICLE 12 REMEDIES 12.1Owner’s Remedies. Upon the occurrence of an Event of Default by KSM, Owner may: 12.1.1Seek specific performance of KSM’s obligations or injunctive relief, as applicable; 12.1.2Demand and receive payment of all amounts due Owner under the terms of this Agreement and the payment of all costs, damages, expenses, and reasonable attorneys’ fees of Owner arising due to KSM’s Event of Default; and 20 KSM Management Agreement Form Rev 3/10 12736967v.4 12.1.3Terminate this Agreement by written notice of termination to KSM. Upon proper termination of this Agreement, KSM shall surrender occupancy of the Property to Owner. No remedy granted to Owner is intended to be exclusive of any other remedy herein or by law provided, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity, or by statute. No delay or omission by Owner to exercise any right accruing upon an Event of Default shall impair Owner’s exercise of any right or shall be construed to be a waiver of any Event of Default or acquiescence thereto. IN NO EVENT SHALL KSM BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR PERFORMANCE OR NON-PERFORMANCE HEREUNDER (INCLUDING BUT NOT LIMITED TO LOST PROFITS, LOST BUSINESS AND LOSS OF GOODWILL) EVEN IF ADVISED OR AWARE OF THE POSSIBILITY OF SUCH DAMAGES . 12.2KSM’s Remedies. Upon the occurrence of an Event of Default by Owner, KSM may: 12.2.1Seek specific performance of Owner’s obligations or injunctive relief, as applicable; 12.2.2Demand and receive payment of all amounts due KSM under the terms of this Agreement and the payment of all costs, damages, expenses, and reasonable attorneys’ fees of KSM due to Owner’s Event of Default; and 12.2.3Terminate this Agreement by KSM’s written notice of termination to Owner. In such event, Owner shall pay to KSM within thirty (30) days of termination an amount equal to the total unpaid Management Fees that KSM would have earned had the Agreement remained in effect until the Termination Date. No remedy granted to KSM is intended to be exclusive of any other remedy herein or by law provided, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity, or by statute. No delay or omission by KSM to exercise any right accruing upon an Event of Default shall impair KSM’s exercise of any right or shall be construed to be a waiver of any Event of Default or acquiescence thereto. ARTICLE 13 TERMINATION 13.1Events of Termination. This Agreement shall terminate upon the occurrence of any of the events set forth below: 13.1.1An Event of Default by KSM, and Owner sends to KSM a notice of termination for cause (after the expiration of any applicable cure period); 21 KSM Management Agreement Form Rev 3/10 12736967v.4 13.1.2An Event of Default by Owner, and KSM sends to Owner a notice of termination for cause (after the expiration of any applicable cure period); 13.1.3Both parties agree in writing to terminate this Agreement; and 13.1.4Upon the expiration or termination of this Agreement according to its terms. 13.2Payments Upon Expiration or Termination. Upon expiration or termination of this Agreement, all sums owed by either party to the other shall be paid within thirty (30) days of the effective date of such termination. 13.3 Employee and Other Obligations Upon Termination. Only upon a termination of this Agreement for any reason, Owner shall remain responsible for payment of obligations connected with the Management Services rendered through the effective date of termination (including all Operating Expenses, all Gross Payroll obligations, as well as the Management Fees and all out of pocket expenses). Such obligations shall include all amounts to become due and owing to the terminated staff of KSM at the Courses through the effective date of termination. Owner shall pay all accrued wages for the terminated staff through such termination date and shall reimburse and/or hold harmless KSM for workers compensation insurance and other employee benefits paid or accrued by KSM on behalf of Owner to the terminated staff as of the termination date. Additionally, Owner shall be responsible for the payment of any earned and accrued vacation owed or due to the terminated staff as a result of the termination as well as any manual adjustments of wages and any unclaimed wages due the terminated staff accruing prior to the termination date and shall, if requested by KSM, reimburse KSM for any such payments made by KSM. Any amounts owed to KSM pursuant to this Section shall be paid to KSM within thirty (30) days of written request therefor. ARTICLE 14 NOTICES 14.1Notices. Any notices or other communications required or permitted hereunder shall be sufficiently given if in writing and (i) delivered personally, (ii) sent by certified mail, return receipt requested, postage prepaid (“Mail”), or sent by nationally-recognized overnight mail or courier service (“Overnight Courier”), addressed as shown below, or to such other address as the party concerned may substitute by written notice to the other. Any notice will be deemed received (A) upon the date personal delivery is made, (B) three (3) business days after the date it is deposited in the Mail, (C) one (1) business day after it is deposited with an Overnight Courier, or (D) the date upon which attempted delivery of such notice, whether by Mail, Overnight Courier or personal delivery, is refused or rejected. If to Owner: Jacob J. Winzenz Assistant City Manager/Director of Administrative Services Municipal Building 18 North Jackson Street P.O. Box 5005 22 KSM Management Agreement Form Rev 3/10 12736967v.4 Janesville, WI 53547-5005 with a copy to: Jean Ann Wulf City Clerk-Treasurer Municipal Building 18 North Jackson Street P.O. Box 5005 Janesville, WI 53547-5005 If to KSM: Kemper Sports Management, Inc. 500 Skokie Boulevard, Suite 444 Northbrook, Illinois 60062 Attention: Steven K. Skinner, Chief Executive Officer with a copy to: Kemper Sports Management, Inc. 500 Skokie Boulevard, Suite 444 Northbrook, Illinois 60062 Attention: Corporate Counsel The addresses and addressees may be changed by giving notice of such change in the manner provided herein for giving notice. Unless and until such written notice is received, the last address and addressee given shall be deemed to continue in effect for all purposes. ARTICLE 15 MISCELLANEOUS 15.1Exhibits. All Exhibits attached hereto are incorporated herein by this reference as if fully set forth herein. If any Exhibits are subsequently changed by the mutual written agreement of the parties, the Exhibits shall be modified to reflect such change or changes and dated and initialed by the parties. 15.2Entire Agreement. This Agreement and the Exhibits hereto embody the entire agreement and understanding of the parties relating to the subject matter hereof and supersede all prior representations, agreements, and understandings, oral or written, relating to such subject matter. 15.3Amendment and Waiver. This Agreement may not be amended or modified in any way except by an instrument in writing executed by all parties hereto; provided, however, either party may, in writing, (i) extend the time for performance of any of the obligations of the other, (ii) waive any inaccuracies and representations by the other contained in this Agreement, (iii) waive compliance by the other with any of the covenants contained in this Agreement, and 23 KSM Management Agreement Form Rev 3/10 12736967v.4 (iv) waive the satisfaction of any condition that is precedent to the performance by the party so waiving of any of its obligations under this Agreement. 15.4Proprietary Information. The trade names, trademarks, and logos of Owner (collectively, the “Owner Marks”) shall be used by KSM only in connection with the performance of the services provided under this Agreement and as otherwise provided in this Agreement or as agreed upon by Owner; provided, however, that Owner agrees that KSM may use the Owner Marks in its marketing and promotional materials as courses managed by KSM. All specifically identifiable information developed by KSM for Owner at the expense of Owner shall be the property of both KSM and Owner and such information may continue to be used by Owner at the Courses beyond any expiration or termination of this Agreement; provided, however, that Owner may not use or grant others the right to use such information at any other location nor disclose or grant any rights to such information to any third party. All of KSM’s proprietary information, including (i) trade names, trademarks and logos as well as programs that have been or may be developed by KSM, and (ii) software and technology, shall remain the exclusive property of KSM and neither Owner nor any of its affiliates or successors may use or disclose such proprietary information without the advance written consent of KSM. The obligations and restrictions contained in this Section shall survive the expiration or termination of this Agreement for any reason. 15.5No Partnership or Joint Venture. Nothing contained herein shall be deemed or construed by the parties hereto or by any third party as creating the relationship of (i) a partnership, or (ii) a joint venture between the parties hereto; it being understood and agreed that neither any provisions contained herein nor any acts of the parties hereto shall be deemed to create any relationship between the parties hereto other than the relationship of independent contractor. 15.6Restrictions as to Employees. During the Term and for a period of two (2) years after the end of the Term, it is agreed that Owner and/or its agents and contractors shall not, directly or indirectly, seek to contact, entice, or discuss employment with any Key Employee of KSM nor shall Owner, its agents and/or contractors employ or seek to employ, directly or indirectly, any such Key Employee, without first obtaining the written consent of KSM. For purposes hereof, a “Key Employee” of KSM shall mean any individual holding any of the following positions at any time during the Term: the general manager, superintendent, accountant/bookkeeper, head professional or assistant superintendent of either of the Courses, or any employee of KSM’s corporate office. 24 KSM Management Agreement Form Rev 3/10 12736967v.4 15.7Assignment; Successors and Assigns. 15.7.1This Agreement may not be assigned by either party hereto without the express written consent of the other party, except that KSM may assign this Agreement to any of its Affiliates. 15.7.2This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, legal representatives, and permitted assigns. 15.8Severability. Except as expressly provided to the contrary herein, each section, part, term, or provision of this Agreement shall be considered severable, and if for any reason any section, part, term, or provision herein is determined to be invalid and contrary to or in conflict with any existing or future law or regulation by a court or governmental agency having valid jurisdiction, such determination shall not impair the operation of or have any other affect on other sections, parts, terms, or provisions of this Agreement as may remain otherwise intelligible, and the latter shall continue to be given full force and effect and bind the parties hereto, and said invalid sections, parts, terms, or provisions shall not be deemed to be a part of this Agreement. 15.9Survival. All covenants, agreements, representations, and warranties made herein shall survive the execution and delivery of (i) this Agreement, and (ii) all other documents and instruments to be executed and delivered in accordance herewith, and shall continue in full force and effect. 15.10Accord and Satisfaction; Allocation of Payments. No payment by Owner or receipt by KSM of a lesser amount than that which is owed to KSM shall be deemed to be other than on account of such amounts owed to KSM, nor shall any endorsement or statement on any check or letter accompanying any check or payment to KSM be deemed an accord and satisfaction, and KSM may accept such check or payment without prejudice to KSM’s right to recover the balance of the amounts owed to KSM or pursue any other remedy provided for in this Agreement or as otherwise provided at law or in equity. In connection with the foregoing, KSM shall have the absolute right in its sole discretion to apply any payment received from Owner, regardless of Owner's designation of such payments, to any outstanding amount of Owner then not current and due or delinquent, in such order and amounts as KSM, in its sole discretion, may elect. 15.11Construction and Interpretation of Agreement. This Agreement shall be governed by and construed under the laws of the State of Wisconsin.. Should any provision of this Agreement require judicial interpretation, it is agreed that the court interpreting or considering same shall not apply the presumption that the terms hereof shall be more strictly construed against a party by reason of the rule or conclusion that a document should be construed more strictly against the party who itself or through its agent prepared the same. It is agreed and stipulated that all parties hereto have equally participated in the preparation of this Agreement and that legal counsel was consulted by each party before the execution of this Agreement. 25 KSM Management Agreement Form Rev 3/10 12736967v.4 15.12Captions. Captions, titles to sections, and paragraph headings used herein are for convenience of reference and shall not be deemed to limit or alter any provision hereof. 15.13Governing Document. This Agreement shall govern in the event of any inconsistency between this Agreement and any of the Exhibits attached hereto or any other document or instrument executed or delivered pursuant hereto or in connection herewith. 15.14Outside Businesses. Nothing contained in this Agreement shall be construed to restrict or prevent, in any manner, any party or any party’s affiliates, parent corporations, or representatives or principals from engaging in any other businesses or investments, nor shall Owner or KSM have any right to share or participate in any such other businesses or investments of the other party. 15.15Counterparts; Facsimile or E-Mailed Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same Agreement. Facsimile signature or scanned and e-mailed signature shall be as effective as an original signature. 15.16Unavoidable Delays. The provisions of this Section shall be applicable if there shall occur during the Term any (i) strikes, lockouts, or labor disputes, (ii) inability to obtain labor or materials, or reasonable substitutes therefor, (iii) acts of God, governmental restrictions, regulations or controls, enemy or hostile governmental action, civil commotion, fire, or other casualty, or (iv) other conditions beyond the reasonable control of the party obligated to perform. If either party shall, as the result of any of the above-described events, fail punctually to perform any obligation on its part to be performed under this Agreement, then such failure shall be excused and not be a breach of this Agreement by the party claiming an unavoidable delay (an “Unavoidable Delay”), but only to the extent the delay is occasioned by such event. If any right or option of either party to take any action under or with respect to the Term is conditioned upon the same being exercised within any prescribed period of time or at or before a named date, then such prescribed period of time or such named date shall be deemed to be extended or delayed, as the case may be, upon written notice, as provided above, for a time equal to the period of the Unavoidable Delay. Notwithstanding anything contained herein to the contrary, the provisions of this Section shall not be applicable to either party’s obligation to pay any sums, monies, costs, charges, or expenses required to be paid pursuant to the terms of this Agreement. 15.17No Third-Party Beneficiaries. Nothing herein contained shall be deemed to establish any rights of third parties against the parties hereto; it being the intent that the rights and obligations set forth herein are those of the parties hereto alone, with no third party beneficiary rights intended. 15.18Certain Services Excluded. Notwithstanding anything else contained in this Agreement to the contrary, KSM’s services are limited to those specifically noted in the Agreement and do not include, amongst others and without limitation, architectural, engineering, design or general contracting services, facility planning services, accounting or tax-related assistance or advice, legal advice or services, expert witness services, cost report preparation, data processing or information services, or feasibility studies. KSM’s services will not constitute an audit, review or compilation or any other type of financial statement reporting, or consulting 26 KSM Management Agreement Form Rev 3/10 12736967v.4 engagement subject to the rules of the AICPA or other similar bodies. KSM will not be expressing any professional opinions on and makes no representations or warranties in conjunction with this engagement. 15.19Bankruptcy Obligations. KSM shall have no obligation to provide any services under the Agreement in the event that Owner becomes a debtor under the Bankruptcy Code, and, in accordance with Section 12 hereof, may terminate the Agreement in such event. In the event that Owner is or becomes a debtor under Chapter 11 of the Bankruptcy Code and KSM agrees to provide services to Owner post-petition, the parties shall enter into a revised written agreement or an amendment to this Agreement to govern their respective rights and obligations as part of Owner’s bankruptcy case. Notwithstanding the foregoing, Owner expressly agrees that KSM shall be compensated by Owner for all commercially reasonable efforts to comply with all requirements or requests for information placed upon KSM in an Insolvency Proceeding by Owner, any receiver, trustee or liquidator for Owner or any property of Owner, any assignee for the benefit of creditors, or any trustee in any case under chapter 7 of the Bankruptcy Code, at a hourly rate set by KSM in its reasonable discretion, in addition to the out-of-pocket expenses (including legal fees) incurred by KSM in connection with the Insolvency Proceeding (the “Insolvency Administration Fees”). All such Insolvency Administration Fees shall be considered “Operating Expenses” under this Agreement. 15.20Time of Essence In Performance. All times set forth in this Agreement for performance by either party shall govern and be strictly enforced since time is of the essence. [SIGNATURES ON FOLLOWING PAGE] 27 KSM Management Agreement Form Rev 3/10 12736967v.4 IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above. KEMPER SPORTS MANAGEMENT, INC. CITY OF JANESVILLE, WISCONSIN By: By: Steven K. Skinner Name: Eric Levitt Chief Executive Officer Title: City Manager By: Jean Ann Wulf City Clerk-Treasurer Approved as to Form: _________________________ Wald Klimczyk, City Attorney KSM Management Agreement Form Rev 3/10 12736967v.2 12736967v.4 EXHIBIT A DEFINITIONS All capitalized terms referenced or used in the Management Agreement (the “Agreement”) and not specifically defined therein shall have the meaning set forth below in this Exhibit A, which is attached to and made a part of the Agreement for all purposes.  Affiliate(s). The term “Affiliate(s)” shall mean a Person that directly or indirectly, or through one or more intermediaries, controls, is controlled by, or is under common control with the Person in question and any officer, director, or trustee, and any stockholder or partner of any Person referred to in the preceding clause owning fifty percent (50%) or more of such Person. For purposes of this definition, the term “control” means the ownership of fifty percent (50%) or more of the beneficial interest of the voting power of the appropriate entity.  Annual Passes. The term “Annual Passes” shall mean the passes for play at the Courses with such rights and subject to such terms as determined by Owner and KSM.  Courses. The term “Courses” shall mean the golf courses to be operated as “Riverside Golf Course” and "Blackhawk Golf Course" located on and operated from the Real Property.  EBITDA. The term “EBITDA” shall mean, for any period, Net Operating Income for such period plus Management Fees for such period.  Environmental Laws. The term “Environmental Laws” shall mean all current and future federal, state, and local statutes, regulations, ordinances, and rules relating to (i) the emission, discharge, release, or threatened release of a Hazardous Material into the air, surface water, groundwater, or land; (ii) the manufacturing, processing, use, generation, treatment, storage, disposal, transportation, handling, removal, remediation, or investigation of a Hazardous Material; or (iii) the protection of human health, safety, or the indoor or outdoor environment, including, without limitation, the Clean Air Act, the Federal Water Pollution Control Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Occupational Safety and Health Act, all amendments thereto, all regulations promulgated thereunder, and their state or local statutory and regulatory counterparts.  Gross Revenues. The term “Gross Revenues” shall mean all monthly receipts related to or derived from the operation of the Courses from cash or credit transactions recognized during the Term, computed on an accrual basis, including, but not limited to, greens fees, cart rental fees, guest fees, income derived from the investment of Gross Revenues, the amount of all sales (wholesale or retail) of food, beverages, goods, wares, or merchandise on, at, or from the Property, or for services of any nature performed on, at, or from the Property, determined in accordance with generally accepted accounting principles applied on a consistent basis. Gross Revenues shall be reduced by any refunds, rebates, discounts, and credits of a similar A-1 KSM Management Agreement Form Rev 3/10 12736967v.4 nature given, paid, or returned by KSM or Owner in the course of obtaining such Gross Revenues. Gross Revenues shall not include: Applicable gross receipts taxes, admission, cabaret, excise, sales, and use o taxes, or similar governmental charges collected directly from customers or their guests or as a part of the sales price of any goods or services; Service charges that are percentage gratuities added to billings, to the extent o paid to employees of the Courses; Proceeds of borrowings by Owner; o Proceeds paid as a result of an insurable loss, unless paid for the loss or o interruption of business, to the extent such sums are used to remedy said loss; Interest or investment income earned on distributed Positive Net Cash Flow o to Owner or KSM pursuant to the terms of the Agreement; or Owner’s Advances. o Any of the above provisions resulting in a double exclusion from Gross Revenues shall be allowed as an exclusion only once.  Hazardous Material. The term “Hazardous Material” shall mean any solid, liquid, or gaseous substance, chemical, compound, product, byproduct, waste, or material that is or becomes regulated, defined, or designated by any applicable federal, state, or local governmental authority or by any Environmental Law as hazardous, extremely hazardous, imminently hazardous, dangerous, or toxic, or as a pollutant or contaminant, and shall include, without limitation, asbestos, polychlorinated biphenyls, and oil, petroleum, petroleum products and petroleum byproducts.  Improvements. The term “Improvements” shall mean the improvements, structures, and fixtures placed, constructed, or installed on the Real Property for the Courses, and any additions or subsequent modifications thereto.  Insecurity Event. The term “Insecurity Event” shall mean the occurrence of any one or more of the following events: (a) there shall occur a default under any agreement, document or instrument, other than this Agreement, to which Owner is a party, the consequences of which could reasonably be expected to have a Material Adverse Effect; (b) any statement, report, financial statement or certificate made or delivered by Owner, or any of its officers, employees or agents, to KSM is untrue, incomplete or incorrect in any material respect; (c) any of Owner’s assets are attached, seized, levied upon or subjected to a writ or distress warrant, or come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors and the same is not cured within thirty (30) days thereafter; (d) an application is made by any person, other than Owner, KSM Management Agreement Form Rev 3/10 12736967v.4 for the appointment of a receiver, trustee, or custodian for any of Owner’s assets and the same is not dismissed within thirty (30) days after the application therefor; (e) any material change in Owner’s capital structure or in any of its business objectives, purposes and operations which might in any way adversely effect the repayment of its obligations to KSM pursuant to this Agreement; or (f) any other event or occurrence, which, in the reasonable discretion of KSM, could materially and adversely affects Owner’s ability to repay its obligations to KSM pursuant to this Agreement.  Intangible Personal Property. The term “Intangible Personal Property” shall mean all intangible property or rights owned or held by Owner in connection with the Courses, including, but not limited to, security deposits, prepaid rents, liquor and operating licenses, and all trademarks related to the Courses.  KSM. The term “KSM” means Kemper Sports Management, Inc., an Illinois corporation, and its successors, legal representatives, and permitted assigns.  Management Services. The term “Management Services” shall mean the services provided by KSM pursuant to this Agreement.  Material Adverse Effect. The term “Material Adverse Effect” shall mean any event that has a material adverse effect on (i) the business, assets, operations or financial or other condition of Owner, and (ii) Owner’s ability to pay the amounts owed to KSM in accordance with the terms hereof.  Net Operating Income. The term “Net Operating Income” or “NOI” shall be computed as the sum of Gross Revenues less Operating Expenses, and the Base Management Fees. Such calculation shall not include payments associated with maintenance equipment leases, capital expenditures, interest expense, taxes, depreciation and amortization  Operating Expenses. The term “Operating Expenses” shall mean all operating expenses incurred or paid in connection with the operations of the Courses, computed on an accrual basis, including, but not limited to, the following items: Salaries, wages, employee benefits, and payroll expenses, including without o limitation, payroll service bureau fees, payroll taxes, Course profit sharing programs, and insurance for all employees employed on-site in the direct operation of the Courses, excluding, however, service charges, which are defined as percentage gratuities added to billings and paid to employees (collectively, the “Gross Payroll”); Marketing, advertising, and promotional expenses; o Purchase and replacement, as necessary, of inventories of maintenance parts o and supplies, food stores and bar supplies; Purchase and replacement, as necessary, of silver, chinaware, glassware, o cooking utensils, and other similar items of equipment; KSM Management Agreement Form Rev 3/10 12736967v.4 Purchase and replacement, as necessary, of office supplies, computers, o printers, facsimile machines, photocopiers, postage, printing, routine office expenses, and accounting services incurred in the on-site operation of the Courses; The costs of IT consultants and other consultants utilized for the Courses; o Reasonable travel expenses of on-site employees incurred exclusively in o connection with the business of the Courses; Accrual of a reserve for insurance (including workers’ compensation) and o property taxes each month in an amount or at a rate that is sufficient to pay such insurance premiums or property taxes when they become due and payable; Insurance premiums and property taxes, to the extent not provided for in the o reserve established therefore and any deductible amounts required to be paid pursuant to Course insurance coverage; Accounts receivable previously included within Gross Revenues, to the extent o they remain unpaid ninety (90) days after the first billing; Auditing, accounting costs, computer fees (including costs to license and o maintain accounting software), and legal fees incurred in respect of the operation of the Courses, including any reasonable financial management and reasonable accounting fees paid to third party accounting firms, if included in the Budgets; Costs incurred for utilities, including, but not limited to, all electric, gas, and o water costs, and any other private utility charges incurred in connection with the operation of the Courses; Ordinary maintenance and repairs, exclusive of any capital improvements or o capital replacements, which are hereby excluded; The amount to be retained for purposes of maintaining Working Capital at an o appropriate level; All out-of-pocket expenses incurred by KSM in providing the services under o the terms of the Agreement, including without limitation, reasonable travel for employees employed on-site at the Property and KSM’s other employees while engaged in performing the obligations of KSM hereunder, air express, costs of recruitment (including applicable agent’s fee), and other incidental expenses included in the Budget; KSM Management Agreement Form Rev 3/10 12736967v.4 Expenses, including legal fees, damages or other costs, involved in defending o any employment-related lawsuits, charges or claims involving personnel of the Courses; All expenses set forth in the approved Budgets; and o All other customary and reasonable expenses incurred in the operation of the o Courses and the Improvements. Any of the above provisions resulting in a double inclusion as an Operating Expense shall be allowed as an inclusion only once. Operating Expenses shall not include (i) depreciation or amortization, (ii) principal or interest payments on indebtedness, (iii) rental or lease payments for major items of furniture, fixtures, or equipment which, in accordance with generally accepted accounting principles, are purchased and capitalized as fixed assets, and (iv) federal, state and local income taxes of any nature or kind incurred by Owner or KSM.  Owner. The term “Owner” means City of Janesville, Wisconsin and its successors, legal representatives, and permitted assigns.  Person. The term “Person” shall mean any individual, partnership, corporation, association, or other entity, and the heirs, executors, administrators, legal representatives, successors, and assigns of such Person where the context so permits; and, unless the context otherwise requires, the singular shall include the plural, the masculine shall include the feminine and the neuter, and vice versa.  Personal Property. The term “Personal Property” shall mean the Intangible Personal Property and the Tangible Personal Property.  Positive Net Cash Flow. The term “Positive Net Cash Flow” shall mean the amount, if any, by which Gross Revenues exceed Operating Expenses for the particular period being measured.  Property. The term “Property” shall mean (i) the Improvements, (ii) the Personal Property, and (iii) the Real Property.  Real Property. The term “Real Property” shall mean those certain parcels of land upon which the Courses are located, the legal description of which is attached hereto as Exhibit B.  Tangible Personal Property. The term “Tangible Personal Property” shall mean all equipment, machinery, fixtures, furnishings, accessories, and other tangible personal property placed or installed, or to be placed or installed, on or about the Real Property and used as a part of or in connection with the operation of the Courses. KSM Management Agreement Form Rev 3/10 12736967v.4  Working Capital. The term “Working Capital” shall mean an amount sufficient to pay Operating Expenses for any given month. KSM Management Agreement Form Rev 3/10 12736967v.4 EXHIBIT B LEGAL DESCRIPTION OF REAL PROPERTY KSM Management Agreement Form Rev 3/10 12736967v.4 PUBLIC WORKS DEPARTMENT MEMORANDUM September 22, 2010 TO: City Council FROM: Carl J. Weber P.E., Director of Public Works SUBJECT: Direction to Staff on Implementation of Installation of Planned Unfunded Sidewalks: Pedestrian Transportation Corridor Plan Staff Recommendation Staff recommends the City Council approve a ranking system for the multiyear planned unfunded sidewalk installation, replace the special assessment procedure used in the past with a billing process authorized by State Statute 66.907 and schedule a public hearing for October 25, 2010 to receive comment on the locations considered for inclusion in the 2011 program. City Manager’s Recommendation The City Manager concurs with the recommended approach. I believe this approach is consistent with previous Council discussions. Suggested Motion I move to approve the ranking system for the multiyear planned unfunded sidewalk installation as presented, to schedule a public hearing on October 25, 2010 for the purpose of receiving comments on the 2011 considered locations and to direct staff to notify the abutting property owners of the tentative 2011 sidewalk program prior to the public hearing. Request The City Council, at its July 12, 2010 regular meeting, directed staff to proceed with the installation of the planned unfunded sidewalks from the previously adopted Pedestrian Transportation Corridor Plan (PTCP). Because of the large quantity of walk to be installed, staff has prepared and is seeking approval of a plan to prioritize and schedule completion of the sidewalk over a number of years in an orderly and efficient manner. Background  City Council Direction The PTCP adopted by the City Council on January 14, 2008 includes 63 miles of planned unfunded sidewalks. The City Council directed staff to proceed with the installation of the planned unfunded sidewalk on July 12, 2010, completing 5 to 9 miles of construction each year until completed and commencing in 2011. 1  Ranking To provide for orderly scheduling of the directed work, staff developed a ranking system which considered: 1. Development status 2. Land use 3. Proximity to schools 4. Traffic volume 5. Presence on a bus route Item 1 above considered streets with current conditions unsuitable for the installation of sidewalk. This involved streets primarily along the periphery of the City with rural cross sections, open ditches, prohibitive cross slopes or other major obstructions. This initial screening resulted in the recommended deferral of 17 of the original 63 miles of planned unfunded sidewalks. The remaining 47 miles of sidewalks were ranked using the following point system: 1. Zoning a. 0 points - Agricultural, conservation and mining (A,C & M) b. 1 point – Low density residential (R1 & 2) c. 2 points - Industrial (M1 thru 4) d. 3 points - Business or Office (B1 thru 6, BT and O1 thru 3) e. 4 points – Medium to high density (R3, R3M & R4) 2. School Proximity a. 1 point - Between ¼ and ½ mile radius b. 2 points - Within ¼ mile of schools 3. Street Classification a. 0 points - Local b. 1 points - Collector c. 2 points – Minor Arterial d. 3 points – Principle Arterial 4. On bus route a. 0 points - No b. 1 point – Yes  Scheduling Approximately one half (25 miles) of the streets received a ranking of 3 to 7 (with 7 being the highest priority) and the remaining (21 miles) ranking 1 to 2. In order to achieve construction and management efficiencies while giving priority to higher ranked locations, a schedule was devised to group work in adjacent PTCP zones and to make an initial pass of the City completing the locations ranked 3 or higher and then a second pass for the locations ranked below 3. With this in mind the following schedule was developed: PTCP Zones Rank Miles Year 3 & 4 3 thru 7 5.68 2011 1 & 2 3 thru 7 5.19 2012 7 & 8 3 thru 7 7.58 2013 2 5,6 & 9 3 thru 7 6.89 2014 2,3 & 4 1 & 2 6.95 2015 1,6 & 7 1 & 2 7.56 2016 5,6 & 9 1 & 2 6.88 2017 Locations designated as deferred would be worked into the schedule as their status changes. Also, any gaps within a block where partial existing walk exists would be installed along with the locations ranked 3 thru 7 in the same PTCP zone.  Public Hearing To allow affected property owners time to comment on sidewalk orders and/or to fiscally plan for the cost of installation, a public hearing will be held before the council each fall preceding the scheduled construction year for those locations included in the following year’s program. Staff will prepare a recommended list of locations based on the approved schedule. The final list of locations to receive sidewalk installation orders will be approved by the City Council following the public hearing. The hearing for 2011 installations can be th scheduled for the October 25 meeting.  Billing st Property owners will be given until May 31 of the year following notification to complete private installation of ordered sidewalk. Any sidewalk not installed by the property owner will be installed through a bid contract by the City with the cost thereof billed to the property owner. Once invoiced, the property owner will be given three (3) payment options. ST 1. They can pay the invoice in full by October 31 2. They can have the invoice rolled over onto their property tax bill and incur no interest. 3. If the bill is over $250 they can elect to use the five-year payment plan and incur interest charges. To allow for an approximate 6 month notice of sidewalk installation orders, it is recommended that the City use the procedure authorized by State Statute 66.0907 rather than the special assessment process. This will allow staff to notify property owners of an estimate of the installation cost rather than the current process of bidding projects in advance of the special assessment process. This will also provide efficiencies in the invoicing process. cc: Eric Levitt, City Manager Jacob J. Winzenz, Assistant City Manager/Dir. of Administrative Services 3 PUBLIC WORKS DEPARTMENT MEMORANDUM October 5, 2010 TO: City Council FROM: Carl J. Weber P.E., Director of Public Works SUBJECT: Report on Milwaukee Street/court Street Two-Way Conversion Staff Recommendation Staff recommends the City Council defer any action on this study pending review and comment by the Downtown Development Alliance (DDA). It is anticipated that the DDA could complete a review by early 2011. City Manager’s Recommendation The City Manager concurs with the Public Works Director’s recommendation. Suggested Motion I move to receive and place on file the Milwaukee Street/Court Street Two-Way Street Conversion Study and to defer any action until which time the Downtown Development Alliance reviews the study and returns its consensus comments to the Council. Request Council members Rashkin and Steeber asked that this study be presented to the Council. Background Subsequent to the conversion of Franklin and Jackson Streets through downtown to two way traffic, the City hired Ayres and Associates to study Milwaukee and Court Streets to evaluate the feasibility of converting those two streets to two way traffic as well. The final draft of the study was submitted to staff in August of 2010. A summary was presented to the DDA Board on 8/9/10 with a request for review and comment. The DDA referred the report to its Traffic and Parking Committee. A summary was also presented to the Transportation Committee for informational purposes on 8/11/10. The following is a text version of those summaries: Milwaukee/Court Street Two-way Conversion Summary Three alternatives were evaluated: Alternative 1(Base scenario) -Both Milwaukee and Court would be converted from one-way to two-way commencing at Atwood Avenue on the east. Milwaukee Street east of the Five-point intersection would be cul-de-saced, diverting traffic to Centerway on the west end of the conversion. Cost $1,777,680. 1 Alternative 2- Both Milwaukee and Court would be converted from one-way to two-way from Atwood Avenue on the east to the Five-point intersection, on the west with only westbound Milwaukee Street access remaining open to the Five- points. Cost $1,415,900. Alternative 2A- Following the review of the costs associated with Alternative 2, which required a costly reconstruction of the Five-points, Alternative 2 was adjusted to allow Milwaukee to remain one way west of Laurel Avenue and Court Street to remain one-way west of Academy Street. Cost $481,550. Each alternative in the study included $242,910 for a traffic signal interconnect system. However, an independently planned and funded controller replacement project will provide that function, negating its need for consideration as part of a two-way conversion. The consultant evaluated the conversion of Court Street to two-way from Atwood Avenue east to Randall Avenue. However, traffic volumes on Court Street increased from 6,000 to 8,200 vehicles per day in the residential area east of Atwood Avenue. Based on that significant amount of traffic increase and the potential negative impact on the residential area, the two-way conversion was restricted to Atwood Avenue. Significant Findings of the Study  Daily traffic volumes on Court and Milwaukee will remain relatively similar to existing volumes observed with the one-way system under all Alternatives.  Under the “base scenario” traffic signals would have to be installed at the intersection of Academy and Centerway. Signals would not be required at Academy Street under Alternative 2A.  The conversion of Milwaukee Street and Court Street to two-way streets would only marginally affect on-street parking  Single unit trucks (less than 30 feet in length) could be accommodated with the two way conversion of Milwaukee and Court with the removal of the curb bump-out at the Milwaukee Street intersection with Main. However, the Court Street and Milwaukee Street intersections with Main Street and Parker Drive will not accommodate the turning radius of semi trailer trucks under the two-way street operation without intersection improvements including ROW acquisition.  Recommended improvements include: Updating traffic signal timings and traffic control equipment at each o traffic signalized intersection. Updating signing and pavement markings to accommodate the new o traffic movements. Installing traffic signals at the intersection of Centerway and o Academy Street for the “Base” scenario. 2 The DDA will again be discussing this matter at its 10/6/10 board meeting. Staff feels that the DDA is an appropriate group to gather and organize the thoughts and concerns of the affected downtown businesses and to provide to the Council that group’s perception of the benefits and/or detrimental impacts of a two-way street conversion to business downtown. With the upcoming holidays, it is expected that it will take into early 2011 to complete that process. cc: Eric Levitt, City Manager Jacob J. Winzenz, Assistant City Manager/Dir. of Administrative Services 3 NEIGHBORHOOD SERVICES MEMORANDUM September 30, 2010 TO: City Council FROM: Jennifer Petruzzello, Neighborhood Services Director SUBJECT: Action on a Proposed Resolution Authorizing the Acquisition of Tax Foreclosed Property at 1332 Hawthorne Avenue (File Resolution No. 2010-736) Summary Each year, Rock County initiates foreclose actions on properties which are delinquent on their property taxes. Under this program, the City has a first right to purchase the properties before public auction. This year, one residential home was foreclosed upon. Under State Statutes, the City may acquire tax foreclosed properties for a price equal to the delinquent taxes, special assessments and charges, interest, and closing costs. Acquiring this property for rehabilitation purposes is consistent with City plans and recent City efforts to stabilize neighborhoods. Note issue funding is available for neighborhood property acquisitions. Department Recommendation Staff is recommending that the City acquire the residential property located at 1332 Hawthorne Avenue under the Rock County Tax Foreclosure Program for the purpose of neighborhood improvement utilizing note issue funding. Specifically, the Plan Commission and the Neighborhood Services Department recommend that the City Council support a motion to approve Resolution 2010- 736 authorizing the purchase of the real property located at 1332 Hawthorne Avenue, at a purchase price of $13,925.95. The property would then be rehabilitated and offered for re-sale with a deed restriction to maintain the property as owner-occupied. Any proceeds from the resale would be utilized to support the acquisition, demolition or rehabilitation of other neighborhood or downtown property acquisitions. City Manager Recommendation The CityManager concurs with the Department recommendation. Suggested Motion I move to approve file resolution 2010-736 authorizing the purchase of 1332 Hawthorne Avenue at a price of $13,925.95, as part of the City’s neighborhood improvement efforts. 1 Background Rock County foreclosed on the residential property located at 1332 Hawthorne Avenue on September 20, 2010. The County’s Finance Committee made a decision to foreclose on these properties due to delinquent property taxes, special assessments and charges. The delinquency on these properties began in 2006. The property owner was provided an opportunity to avoid the foreclosure by paying 2006 taxes by August 5, 2010 or all past due taxes by September 20, 2010. Because the City has an interest in the properties through unpaid City taxes and specials, the City has a first right to acquire the properties before Rock County sells the properties at a public auction. The purchase price is set by the County at an amount equal to the delinquent taxes, special assessments and charges, and interest plus closing costs. Property Address County Tax County Interest Closing Total Cost to Due Due Cost Acquire 1332 Hawthorne $9,869.50 $3,806.45 $250 $13,925.95 Purchasing properties under the Rock County Tax Foreclosure process is a fairly new program for the City of Janesville. Funding for the acquisition and rehabilitation of this property is proposed to come from note issue funding allocated for neighborhood and downtown property acquisitions. Five hundred Thousand ($500,000) dollars were included within the 2009 Note Issue, and approximately $300,000 remains to be allocated for specific projects. The property located at 1332 Hawthorne Avenue is single family, owner occupied property that was built in approximately 1949 and is zoned R2-Limited General Residence. The 1,575 square foot home has 4 bedrooms and one and one-half baths. In addition, there is a 440 sf detached garage. This property is a Cape Code style home with a brick exterior. The property is listed on assessor’s records as being in average condition. In addition, assessor’s records indicate an estimated fair market value of $111,319. Since this is a tax foreclosed property, the City has not been able to view the interior of the property, however, based upon an exterior inspection, it is believed that rehabilitation of this property will be moderate in nature. Rehabilitation would likely include: construction of a new roof, replacement gutters, new windows, new garage doors, energy efficiency improvements, and interior finish improvements. Assuming the above, rehabilitation is estimated at $40,000. City staff is proposing the acquisition, rehabilitation and resale of the property. The City will place deed restrictions on the property to assure the property remains in an owner occupied status. 2 Analysis A. The project is consistent with the City of Janesville Comprehensive Plan, which calls for the revitalization of neighborhoods that have experienced decline, and directs the City to acquire vacant, dilapidated, and tax- delinquent properties for rehabilitation and resale to increase owner- occupancy in target neighborhood areas. B. State Statutes require that the Plan Commission review any proposed acquisition of land to determine if it is consistent with established City plans. The Plan Commission reviewed this acquisition on October 4, 2010, and unanimously agreed to forward this item to the City Council with a favorable recommendation noting the Plan Commission has not reviewed the financial aspects of this transaction. C. Other advantages to acquiring this property at this time include: low acquisition cost, the renovation of a single-family home within the Community Development Block Grant target area, the ability to ensure this home is rehabilitated to a safe housing standard, the opportunity to deed restrict this property as owner occupied and the opportunity to obtain sale proceeds to be used to support future redevelopment efforts. D. The greatest potential disadvantage or risk to acquiring this property is the uncertainty regarding the rehabilitation estimate due to the City’s inability to inspect the interior of the property before acquisition. Based upon the exterior condition of the property, rehabilitation costs are estimated to be moderate. Attachments: Location Map Photographs of Properties GVS Information Sheet cc: Eric Levitt, City Manager Jay Winzenz, Assistant City Manager/ Director of Administrative Services Jean Wulf, City Clerk Treasurer 3 RESOLUTION NO. 2010-736 RESOLUTION AUTHORIZING THE ACQUISITION OF REAL PROPERTY LOCATED AT 1332 HAWTHORNE AVENUE WHEREAS , Wis. Stats. §§62.22 (1), 62.23 (17) (a), 62.23 (17) (b), 66.0101, 62.11(5) and Chapter 32 and other pertinent Wisconsin Statutes permit the City’s acquisition, development, ownership, protection, and conservation of parkland, open space, riverfront properties, and development properties; and WHEREAS, Rock County has foreclosed upon the property located at 1332 Hawthorne Avenue located in the City of Janesville, County of Rock, State of Wisconsin for delinquent property taxes as outlined in Wis. Stats. §75.521; and WHEREAS , the City of Janesville has a first right to acquire the properties before they are sold at public auction; and WHEREAS , the purchase price for such properties is equal to the amount of delinquent taxes, special assessments and charges, and interest plus closing costs as follows: 1332 Hawthorne Ave. - $13,675.95 plus $250 in closing costs; and WHEREAS , the rehabilitation cost are estimated at $40,000; and WHEREAS , the City of Janesville Comprehensive Plan calls for the revitalization of neighborhoods that have experienced decline, and directs the City to acquire vacant, dilapidated, and tax-delinquent properties for rehabilitation and resale to increase owner- occupancy in target neighborhood areas; and WHEREAS, the City of Janesville Comprehensive Plan advocates stabilizing and promoting continued investment in existing neighborhoods; and WHEREAS , the Janesville Plan Commission has reviewed this proposed acquisition on October 4, 2010 and found it to be consistent with long range City plans, but not commenting upon the financial aspects of the transaction; and WHEREAS , the Common Council approved Five Hundred Thousand Dollars ($500,000) in the 2009 Note issue for neighborhood and downtown property acquisitions for rehabilitation purposes; and WHEREAS , the funding source for the acquisition and rehabilitation of 1332 Hawthorne Avenue is the 2009 Note Issue; and WHEREAS, any proceeds from the resale of 1332 Hawthorne will be utilized to support the acquisition, demolition or rehabilitation of other neighborhood or downtown properties; and WHEREAS , The Common Council hereby find that this disposition is in the best interest of the City and of benefit to the taxpayers and community. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Janesville that they hereby approve and authorize the City Manager and/or his designee(s) to acquire and close upon the City’s purchase of the Properties described above from the owners on behalf of the City in the manner and for the amounts set forth in the above recitals; and BE IT FURTHER RESOLVED , that the City Manager and/or his designee(s) on behalf of the City of Janesville is/are hereby authorized and empowered to negotiate, draft, modify, review, execute, and enter into additional agreements, record, file and/or make minor modifications and/or amendments to any and all documents, papers, forms, and agreements, and to take whatever other actions as the City Manager and/or his designee may determine, from time to time and at any time, necessary and/or desirable to effectuate the intent of this resolution and/or the public good. 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: Neighborhood Services Department Prepared by: Neighborhood Services Director ïííî q Ô»¹»²¼ ÍËÞÖÛÝÌ Í×ÌÛ Ü¿¬»æ çñîíñïð Í½¿´»æ ïþã ïððù Ó¿° Ý±±®¼·²¿¬»æ Òóïé ÔÑÝßÌ×ÑÒ ÓßÐ Ý×ÌÇ ÑÚ ÖßÒÛÍÊ×ÔÔÛ ÓßÐ ï ïííî Ø¿©¬¸±®²» ßª»²«» ÐÔßÒÒ×ÒÙ ÍÛÎÊ×ÝÛÍ ÍæÐ®±¶»½¬ÄÐ´¿²²·²¹ÄÝ¿»ÄÝ¿»îðïðÄÒóïéÁß½¯«··¬·±² ïííî Ø¿©¬¸±®²» 1332 Hawthorne Avenue NEIGHBORHOOD SERVICES MEMORANDUM October 4, 2010 TO: City Council FROM: Jennifer Petruzzello, Neighborhood Services Director SUBJECT: Action on a Proposed Resolution Authorizing the Disposition of Tax Foreclosed Property located at 903 McKinley Street (File Resolution #2010-737) and Direction to Staff regarding Tax Foreclosed Property located at 203 Linn Street Summary Last year, the City Council approved the purchase of property located at 903 McKinley Street under the Rock County Tax Foreclosure Program at a price of $8,221.95 for the purpose of rehabilitating and reselling the property. It has been determined that rehabilitation costs significantly exceed original estimates, and staff is seeking Council approval to demolish the structure at this time. The vacant lot would then be maintained by the City until such time as it is feasible to redevelop the lot with a residential structure that is sensitive to the architecture of the neighborhood. In addition, staff is seeking the Council’s direction regarding tax foreclosed property located at 203 Linn Street. This property was purchased under the Rock County Tax Foreclosure Program for $4,719 for the purpose of rehabilitating and reselling the property. Again, rehabilitation costs are expected to exceed original estimates. Staff is seeking Council’s approval to seek private proposals regarding the rehabilitation of the property (in exchange the City would donate the property), and explore the construction of a new home that would replicate many of the historic features of this property. Department Recommendation Staff is recommending that the City Council approve the demolition of the residential structure located at 903 McKinley Street and the maintenance of this lot until such time as it is redeveloped. Specifically, the Plan Commission and the Neighborhood Services Department recommend that the City Council support a motion to approve Resolution 2010-737 authorizing the demolition of improvements upon real property located at 903 McKinley Street. In addition, staff is recommending that the City Council authorize staff to seek proposals for the private rehabilitation of the property located at 203 Linn Street and obtain estimates regarding the construction of a new home that would replicate many of the historic features of this property. 1 City Manager Recommendation Both the Neighborhood Services Director and City Manager would like to attempt to rehab the Linn Street property. Unfortunately, cost estimates to rehab the property are coming in at high costs similar to the High Street project. One alternative that the Neighborhood Services Director has come up with is to seek proposals for private rehabilitation of the 203 Linn Street property. I am supportive of this approach. Suggested Motion I move to approve file resolution 2010-737 authorizing the demolition of improvements upon real property located at 903 McKinley Street, as part of the City’s neighborhood improvement efforts. I move to direct staff to seek proposals for the private rehabilitation of the residential property located at 203 Linn Street and obtain estimates for the construction of a new home that would replicate many of the historic features of this property. Background Last year, the City Council authorized the purchase of three residential properties under the Rock County Tax Foreclosure Program for blight elimination or rehabilitation purposes. Under State Statutes, the City acquired these properties for a price equal to the delinquent taxes, special assessments and charges, interest, and closing costs. The City’s portion of these charges was returned to the City. The three properties were purchased for a total price of $19,764.17, with $3,797.01 returned to the City for a net cost of $15,967.16. Purchasing these properties under the Tax Foreclosure Program was consistent with the City of Janesville Comprehensive Plan, the Look West and Old Fourth Ward Neighborhood Revitalization Plan and recent City efforts to invest in the improvement of our historic central city neighborhoods. Purchasing these properties allows the City the opportunity to revitalize neighborhoods that have experienced decline, increase the percentage of owner-occupied housing in the area, and eliminate blight. The greatest potential disadvantage or risk to acquiring the properties through tax foreclosure was the uncertainty regarding the rehabilitation costs due to the City’s inability to inspect the interior of these properties before acquisition. At the time of approval, staff indicated we would bring the property back to the Plan Commission and City Council for possible demolition if costs to rehabilitate were found to be cost prohibitive. Funding for the purchase and planned rehabilitation of the properties at 903 McKinley and 203 Linn was provided through Tax Increment Financing. The Project Plan for TIF 33 includes $250,000 for neighborhood housing improvement efforts and includes provisions to provide low interest and/or forgivable loans to residential property owners to help revitalize and stabilize the residential neighborhoods. Additionally funds are included to acquire and remove 2 blighted properties to provide sites for architecturally sensitive infill redevelopment. TIF funds may not be used to demolish structures listed on the national historic register of historic places. The properties located at 903 McKinely and 203 Linn are specifically mentioned as contributing structures th within the 4 Ward Historic District. The property at 903 McKinley Street was purchased for rehabilitation purposes at a price of $8,221.95 (net cost $7,477). This property is a single family, rental property that was built in approximately 1880 and is zoned R3- General Residence. The 1,700 square foot, 1 ¾-story property has 3 bedrooms and one bath. This property is a c. 1855 Greek Revival home, and is a contributing th structure in the 4 Ward Historic District. The property is listed on assessor’s records as being in poor to average condition. Based upon an exterior inspection, it was originally believed that rehabilitation would be extensive and was therefore estimated at $90,000. Since this was a tax foreclosed property, the City was not able to view the interior of the property prior to purchase. Upon acquiring the property and completing an internal rehabilitation evaluation, significant structural issues were identified including: foundation cracks, exterior brick failure, roof damage, fire damage, electrical concerns, and HVAC concerns. In addition all flooring, walls, cabinets, and fixtures are damaged beyond repair and would require full replacement. No historical features remain in the property’s interior. Rehabilitation costs are now estimated to be a minimum of $200,000. Funding for the acquisition and demolition of the property located at 903 McKinley Street is proposed to come from note issue funding allocated for neighborhood and downtown property acquisitions. Five hundred Thousand dollars ($500,000) was included within the 2009 Note Issue, and approximately $300,000 remains to be allocated for specific projects. The demolition costs are estimated at $8,500 and annual maintenance costs are estimated at $720 per year. If demolished, staff will offer Habitat for Humanity an opportunity to salvage any items from the property and will seek bids for the demolition of the structure. After demolition, the City will maintain the lot as a vacant lot, until such time as it is feasible to redevelop the lot with a residential structure that is sensitive to the architecture of the neighborhood. The property at 203 Linn Street was purchased for rehabilitation purposes at a price of $4,719 (net cost $3,954). This property is a single family, rental property that was built in approximately 1910 and is zoned R2-Limited General Residence. The 1,548 square foot, two-story property has 3 bedrooms and one bath. In addition, there is a 400 sf detached garage. This property is a c. 1855 Greek Revival home, which is listed in the National Register of Historic Places as th a contributing structure within the 4 Ward Historic District. The property is listed on assessor’s records as being in poor condition. Based upon an exterior inspection, it was originally believed that rehabilitation would be extensive and was therefore estimated at $90,000. Since this was a tax foreclosed property, the City was not able to view the interior of the property prior to purchase. Upon 3 acquiring the property and completing an internal rehabilitation evaluation, significant structural issues were identified including: foundation cracks, exterior brick failure, roof damage, fire damage, electrical concerns, and HVAC concerns. In addition all flooring, walls, cabinets, and fixtures are damaged beyond repair and would require full replacement. Some historical features remain in the property’s interior (i.e. trim, built in cabinets, windows original size). Rehabilitation estimates vary widely but are believed to be extensive. Staff is seeking Council’s authorization to seek proposals from private contractors for the rehabilitation of the structure located at 203 Linn. Under this scenario, staff would propose that the property be donated to a private individual who would enter into an agreement to rehabilitate the structure, to maintain the exterior historic character of the building, to meet federal minimum housing quality standards, and to maintain or sell the property with a deed restriction to be owner-occupied. If satisfactory and acceptable proposals are not received, staff would recommend obtaining cost estimates for the construction of a new home that would replicate many of the historic components of the existing structure. Analysis A. The project is consistent with the City of Janesville Look West & Old Forth Ward Neighborhood Revitalization Plan, as well as the City of Janesville Comprehensive Plan. These plans call for the revitalization of neighborhoods that have experienced decline, including the Historic Fourth Ward Neighborhoods. The plans also direct the City to acquire vacant, dilapidated, and tax-delinquent properties for rehabilitation and resale to increase owner-occupancy in target neighborhood areas. This would involve the preservation of historically significant properties where possible. Given the high rehabilitation costs, demolition of the blighted structures, and/or construction of a new home that replicates historic features of the home is consistent with the goals of City plans as well. B. It is unlikely that there is sufficient funding within TIF 33 to rehabilitate both residential structures. C. Both homes are similar in exterior historic quality (Both Greek Revivals from the same time period), however, there are no remaining historic features in the interior of 903 McKinley St. D. Funding for the demolition of 903 McKinley Street is available through the 2009 note issue for neighborhood property acquisitions. If demolition is not approved at this time, roof repair should be undertaken immediately to avoid additional property damage. E. Seeking proposals for the private rehabilitation of 203 Linn Street may allow the structure to be rehabilitated while minimizing the risk of high redevelopment costs to taxpayers. Redevelopment of the structure is ideal if an individual can be located with the interest and financial means to do so, and if the City’s financial risks can be minimized. 4 F. In the event that satisfactory and acceptable proposals are not received, obtaining estimates of new construction would allow the City to better evaluate the value of preserving the original structure. If new construction is ultimately pursued, it may allow the City to provide a positive example of infill development that is sensitive to the neighborhood’s character. G. The Plan Commission reviewed the proposed demolition of the property at 903 McKinley Street and unanimously agreed to forward this item to the City Council with a favorable recommendation noting the Plan Commission has not reviewed the financial aspects of this transaction. Attachments: Location Map Photographs of Properties GVS Information Sheet cc: Eric Levitt, City Manager Jay Winzenz, Assistant City Manager/ Director of Administrative Services 5 RESOLUTION NO. 2010-737 RESOLUTION AUTHORIZING THE DEMOLITION OF IMPROVEMENTS LOCATED UPON REAL PROPERTY LOCATED AT 903 MCKINLEY STREET WHEREAS , Wis. Stats. §§62.22 (1), 62.23 (17) (a), 62.23 (17) (b), 66.0101, 62.11(5) and Chapter 32 and other pertinent Wisconsin Statutes permit the City’s acquisition, development, ownership, protection, conservation, and subsequent changes in use and disposition of surplus parkland, open space, riverfront properties, development properties, and other public properties; and WHEREAS, on September 28, 2009, the Janesville Common Council approved File Resolution No. 2009-638 authorizing the acquisition of real property located at 903 McKinley Street utilizing TIF 33 increment for the purpose of rehabilitation and resale; WHEREAS , the City of Janesville acquired the property at a price of Eight Thousand Two Hundred Twenty One and 95/100 Dollars ($8,221.95); and WHEREAS , the rehabilitation cost are estimated at Two Hundred Thousand Dollars ($200,000), which is One Hundred Ten Thousand Dollars ($110,000) more than originally estimated; and WHEREAS, it has been determined that rehabilitation is no longer feasible based on cost; and WHEREAS, the City of Janesville intends to demolish the structure at 903 McKinley Street and maintain the lot for future redevelopment purposes; and WHEREAS , the City of Janesville Comprehensive Plan calls for the revitalization of neighborhoods that have experienced decline, and recommends that the City acquire vacant, dilapidated, and tax-delinquent properties for rehabilitation, resale, and/or demolition in order to increase owner-occupancy or enhance the health, safety, and good order in target neighborhood areas; and WHEREAS , the Janesville Plan Commission has reviewed this proposed disposition on October 4, 2010 and found it to be consistent with long range City plans, but not commenting upon the financial aspects of the transaction; and WHEREAS , the Common Council approved Five Hundred Thousand Dollars ($500,000) in the 2009 Note issue for neighborhood and downtown property acquisitions; and WHEREAS , the funding source for the acquisition and demolition of 903 McKinley Street is the 2009 Note Issue; and WHEREAS , The Common Council hereby find that this disposition is in the best interest of the City and of benefit to the taxpayers and community. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Janesville that they hereby approve and authorize the City Manager and/or his designee(s) to acquire and close upon the City’s purchase of the Properties described above from the owners on behalf of the City in the manner and for the amounts set forth in the above recitals and to raze and remove the house and other structures and improvements thereon so as to create vacant lot for potential future disposition; and BE IT FURTHER RESOLVED , that the City Manager and/or his designee(s) on behalf of the City of Janesville is/are hereby authorized and empowered to negotiate, draft, modify, review, execute, and enter into additional agreements, record, file and/or make minor modifications and/or amendments to any and all documents, papers, forms, and agreements, and to take whatever other actions as the City Manager and/or his designee(s) may determine, from time to time and at any time, necessary and/or desirable to effectuate the intent of this resolution and/or the public good. 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: Neighborhood Services Department Prepared by: Neighborhood Services Director and City Attorney Shared/resolution 2010-737 – Tax Foreclosure Disposition 903 McKinley.doc ÓÝÕ×ÒÔÛÇ ÍÌ çðí É ÊßÒÞËÎÛÒ ÍÌ îðí É ØÑÔÓÛÍ ÍÌ q Ô»¹»²¼ ÍËÞÖÛÝÌ ÐÎÑÐÛÎÌ×ÛÍ Ü¿¬»æ ïðñìñïð Í½¿´»æ ïþã ïëðù Ó¿° Ý±±®¼·²¿¬»æ Ôóïì ÔÑÝßÌ×ÑÒ ÓßÐ Ý×ÌÇ ÑÚ ÖßÒÛÍÊ×ÔÔÛ ÓßÐ ï çðí ÓÝÕ×ÒÔÛÇ ÍÌ ú îðí Ô×ÒÒ ÍÌ ÐÔßÒÒ×ÒÙ ÍÛÎÊ×ÝÛÍ ÍæÐ®±¶»½¬ÄÐ´¿²²·²¹ÄÝ¿»ÄÝ¿»óîðïðÄÔóïìÁß½¯«·¬·±² 903 McKinley Street 903 McKinley Street COMMUNITY DEVELOPMENT DEPARTMENT October 5, 2010 TO: Janesville City Council FROM: Gale S. Price, AICP, Manager of Building and Development Services SUBJECT: Action on a Request from MCDJ LLC (DBA as Sneakers Sports Bar and Grill), 1221 Woodman Road, for an Economic Development Grant. Executive Summary In 2002 the City Council adopted an ordinance to establish an Economic Development Grant program to permit the City Council to approve economic grants to those establishments that obtain a Reserve Class B liquor license. Based on specific criteria the City Council may approve such grants up to the one-time $10,000 Reserve Class B liquor license fee. MCDJ LLC represented by Matt and Connie DeWitt have requested an Economic Development Grant for their Reserve Class B license which was issued earlier this year. Committee and Staff Recommendation The Alcohol License Advisory Committee and the Community Development Department recommend that following the City Council review, a motion to approve an Economic Development Grant in the amount of $10,000 for Sneakers Sports Bar and Grill be approved. Suggested Motion Motion to approve an Economic Development Grant in the amount of $10,000 for Sneakers Sports Bar and Grill. Request The City Clerks Office has received a written request for a $10,000 Economic Development Grant from Matt and Connie DeWitt, owners of Sneakers Sports Bar and Grill. The use was issued a Reserve Class B license earlier this year and has paid their initial $10,000 Reserve Class B license fee with their application. Background Alcohol licenses are regulated by State Statute Chapter 125 and Janesville Code of General Ordinances Chapter 5. In 1997, the State reduced the number of Class B licenses that a municipality may issue and created a new Reserve Class B alcohol license. A Class B license and a Reserve Class B license are the same except for the cost. A Class B license costs $600 per year and a Reserve Class B license costs $600 per year plus a one-time fee of $10,000 when the license is initially issued. The fees are paid to and retained by the City. Since the enactment of this Reserve Class B license fee, several cities in Wisconsin have created an economic development grant program which in effect refunds all or part of the initial $10,000 fee. In 2002, the City Council adopted an ordinance to establish such an Economic Development Grant Program to allow the City Council to issue a one-time non-repayable grant to businesses who receive a Reserve Class B License. According to the ordinance, after submission by the applicant of a written application to the City Clerk for a grant, the City Council may provide an Economic Development Grant to the licensee in an amount not to exceed 1 $10,000 following a review and recommendation from the Alcohol Licensing Advisory Committee (ALAC). The ordinance further provides that the City Council may consider the following criteria when determining whether to grant all or part of the $10,000 grant to a particular applicant: 1. That the extent to which the license and/or the grant will promote a redevelopment or rehabilitation project in the downtown or other commercial areas including the amount of investment, the extent of rehabilitation, historic preservation and public improvement effectuated, and related revitalization, health, welfare, peace and public good order factors. 2. That the applicant demonstrates that their investment and the establishment issued the Class B reserve intoxicating liquor alcohol beverage license is equal to or greater than the dollar amount of the grant request. 3. That the Class B reserve establishment is located at least 300 feet from any residential- zoned area. Analysis The Community Development Department has evaluated this request based on the above criteria and believes that the entire $10,000 initial license fee could be refunded as a grant. Staff’s findings are based on the following: 1. While the property is not located within the downtown area, it is located on the south end of the Milton Avenue commercial corridor in an area that is in need of redevelopment. This project is considered to be an in-fill development as it is re-using a portion of the Rogan’s Shoe space and space formerly occupied by a Basics Food Co-op. 2. The owner was required to make extensive modifications to the building to meet current building and plumbing codes including installation of a grease interceptor, kitchen construction and HVAC modifications to accommodate all of the cooking equipment within the building. The investment to modify the existing facility is anticipated to increase the property value of the property in that the owners will have invested over $200,000 for the building. This amount of investment substantially exceeds the $10,000 initial license fee. 3. The establishment is not located greater than 300 feet from a residentially-zoned area. The site is located 225 feet from the closest residentially zoned lot, but the use was required to be approved through a conditional use permit process which is designed to protect the nearby residences. There have been no complaints lodged to the Community Development Department regarding the bar at this time. Staff believes the use meets the intent of the criteria. The Alcohol Licensing Advisory Committee reviewed this request at their October 5, 2010 meeting and unanimously voted to forward the request to the City Council with a positive recommendation. cc: Eric Levitt Jacob J. Winzenz 2 CLERK-TREASURER’S OFFICE MEMORANDUM October 1, 2010 TO: City Council FROM: Jean Ann Wulf, City Clerk-Treasurer SUBJECT: Action on a proposed resolution authorizing a 10 year special assessment payment plan for Austin Conservancy Group, LLC (File Res. No. 2010-738) Austin Conservancy Group, LLC contacted the Clerk-Treasurer’s Office concerning the special assessments that were levied against their 5 lots located on Falcon Ridge Ct. With the downturn in the local economy, they are requesting the opportunity to change from a 5 year to a 10 year payment plan and the interest rate would remain at 7.25% on the unpaid balance. The attached letter explains their request. In 2008, Austin Conservancy Group had $132,125.42 in special assessments levied against their property and it was placed on the 5 year payment plan. To date, they paid $33,559.26 in principal and the associated interest costs. The remaining $98,566.16 in principal is scheduled to be paid over the next 4 years. They are requesting the opportunity to spread this amount over the next 9 years with an annual principal payment of $10,951.80. Council Policy Statement No. 63 acknowledges financial hardships where a property owner cannot afford to pay their special assessments over 5 years. An excerpt from this policy states: V. Financial Hardships. A. If a property owner has a financial hardship, they may apply in writing to the Council to spread payments over ten years with interest; rather than five years. In the past, the City Council has granted a 10 year financial hardship. Therefore, the Clerk-Treasurer’s Office recommends that the City Council adopt Resolution No. 2010-738 which would allow a 10 year payment plan with interest. Attachment Jay Winzenz, Director of Administrative Services RESOLUTION NO. 2010-738 Resolution authorizing a 10 year special assessment payment plan for Austin Conservancy Group, LLC for the lots located on Falcon Ridge Ct. WHEREAS , the administration has determined that Austin Conservancy Group, LLC, owns five lots located on Falcon Ridge Ct., tax parcel nos: 0134400003, 0134400004, 0134400005, 0134400006, and 0134400007, Janesville, Wisconsin, and meets the conditions outlined in City Council Policy No. 63, paragraph V. A. for a financial hardship ten year payment plan; NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Janesville, that the special assessments be changed from a five year to a ten year payment plan with equal principal amounts and the associated interest levied. ADOPTED: Motion by: Second by: APPROVED: Councilmember Aye Nay Pass Absent Brunner McDonald Eric Levitt, City Manager Perrotto Rashkin ATTEST: Steeber Truman Voskuil Jean Ann Wulf, City Clerk-Treasurer APPROVED AS TO FORM: City Attorney Proposed by: City Clerk-Treasurer Prepared by: City Clerk-Treasurer City Manager’s Office Memorandum October 11, 2010 TO: Janesville City Council FROM: Al Hulick, Management Analyst SUBJECT: Action on a proposed resolution authorizing the City Manager to submit a grant request to the USEPA for funding through their 2011 Brownfields Program. (File Resolution No. 2010-741) Summary The City of Janesville is submitting a grant request to the USEPA for funding through their FY11 Brownfield’s Program. The City seeks to develop a Comprehensive Brownfield’s Redevelopment Program that will guide the planning, assessment, cleanup, and redevelopment of contaminated sites in the community. The ultimate goal of program is to protect public health and the environment, remove blight, and remediate sites so they can be redeveloped and reused. To guide the program, it is our intent to establish a Brownfield’s Advisory Committee comprised of representatives from various community groups, public agencies, and other engaged entities. A team of City staff and consultants will provide technical support to the Program To facilitate these efforts, the City intends to apply for the following grants: $200,000 Community-wide Hazardous Substances Assessment Grant  $200,000 Community-wide Petroleum Assessment Grant  There is no required financial match from the City for either of the two grant awards. City Manager Office’s Recommendation The City Administration recommends the City Council authorize the submission of a grant request for the USEPA for funding through their 2011 Brownfield’s Program for a Community-wide Hazardous Substances Assessment Grant and a Community-wide Petroleum Assessment Grant. Suggested Motion To make a motion approving File Resolution 2010-741 authorizing the submission of a grant request for the USEPA for funding through their 2011 Brownfield’s Program for a Community-wide Hazardous Substances Assessment Grant and a Community-wide Petroleum Assessment Grant. Background Brownfield sites can be any abandoned, idle or underused commercial or industrial properties, where the expansion or redevelopment is hindered by real or perceived contamination. Brownfield’s vary in size, location, age, and past use. Brownfield’s can be anything from a five-hundred acre automobile assembly plant to a small, abandoned corner gas station. Every community has brownfield sites that sit in this idle or underutilized condition for a variety of reasons. The City of Janesville is no different in this regard. For years, the City has taken an active, but incremental approach towards brownfield remediation. As sites became available for purchase, the City would work with available resources to research, remediate, and at times, redevelop brownfield sites. The City of Janesville has had some successes with this approach, but is looking to be more proactive in brownfield site remediation and redevelopment. Therefore, the City of Janesville is looking to submit a grant request to the USEPA for funding through their FY11 Brownfield’s Program for a Community- wide Hazardous Substances Assessment Grant and a Community-wide Petroleum Assessment Grant. These grants will provide the framework towards a more comprehensive brownfields redevelopment strategy. It is the City’s intent to develop a Comprehensive Brownfield’s Redevelopment Program that will guide the planning, assessment, cleanup, and redevelopment of contaminated sites in the community. The City envisions this grant opportunity as the first step in creating a more comprehensive brownfields program. It is hoped, that by creating this framework, the City will position itself more favorably for future grant opportunities. Additionally, the City will have a better knowledge of the City’s brownfield inventory and redevelopment potential. Analysis Specifically, the funding will be used for the following: Area-wide planning: a site inventory and prioritization process for Brownfield sites throughout the community which will result in a ranking of key sites for assessment, cleanup, and redevelopment. The prioritization of sites will result from a combination of the following: An initial environmental analysis of Brownfield sites based on known or  suspected contamination levels conducted by an environmental consultant. An evaluation of reuse options and redevelopment potential for each site  conducted by a planning consultant. Direct community input on key community concerns, goals, and objectives  for brownfields redevelopment. Site Assessment: Based on the outcomes of the above, the City will work with property owners to have the priority sites assessed to characterize the type and extent of potential environmental contamination, a critical first step toward ultimate clean-up and reuse. Health Monitoring Program: the City will engage a public health expert to work with area health professionals, the USEPA, and the WI Dept. of Health & Family Services to monitor community health in brownfields-impacted neighborhoods. The success of this program will rely greatly on the participation of partner organizations and direct input from residents throughout the community. The City is seeking letters of support for our application and commitments from organizations and individual to work with us. cc: Eric Levitt Jacob Winzenz RESOLUTION NO. 2010-741 A RESOLUTION authorizing the City of Janesville’s submission of a grant request to the USEPA for funding through their 2011 Brownfields Program for a Community-wide Hazardous Substances Assessment Grant and a Community-wide Petroleum Assessment Grant. WHEREAS, the Common Council of the City of Janesville recognize that the investigation, remediation, and redevelopment of Brownfields are important parts of protecting Wisconsin’s resources and reuse of abandoned lands; and WHEREAS, by adopting this Resolution, the Common Council declare their intent for the City Administration to submit a grant request to the USEPA for funding through their 2011 Brownfields Program for a Two Hundred Thousand Dollar ($200,000.00) Community-wide Hazardous Substances Assessment Grant and a separate Two Hundred Thousand Dollar ($200,000.00) Community-wide Petroleum Assessment Grant that will guide the planning, assessment, cleanup, and redevelopment of contaminated sites in the community; and WHEREAS, the City of Janesville will maintain records documenting all expenditures made during the grant period and abide by the necessary reporting responsibilities as determined by the USEPA; and WHEREAS, the City of Janesville will work cooperatively with employees, agents, and representatives of the USEPA during the grant period; and WHEREAS, the City of Janesville intends to comply with all requirements of and will submit all documents and participation requirements, to the USEPA; and WHEREAS, the Common Council find that the submission for and use of each of these Grants will be in the best interests of and benefit to the City, its properties, its residents, and taxpayers. NOW, THEREFORE, IT IS HEREBY RESOLVED by the Common Council of the City of Janesville that: 1. All above introductions and recitals are incorporated herein by reference as if fully set forth verbatim; and 2. The City Administration is authorized on behalf of the City of Janesville to prepare and submit applications for, and request funds and assistance available from, the United States Environmental Protection Agency for these two Grants; and 3. The City of Janesville shall take any and all necessary actions to undertake, direct, and complete approved grant activities, and comply with State and Federal rules for the program(s); and BE IT FURTHER RESOLVED, that the City Manager and his designee(s), on behalf of the City of Janesville, is/are hereby jointly and severally authorized and empowered to negotiate, draft, review, revise, modify, amend, execute, enter into, file and/or record additional applications, agreements, amendments, documents, reports, and letters of understanding concerning this matter, and to take whatever additional other actions that the City Manager may determine in his sole discretion, from time to time and at any time, necessary and/or desirable in the public interest to effectuate the intent of this Resolution and/or the public good. 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, Wald Klimczyk Proposed by: City Manager’s Office Prepared by: City Manager’s Office DEPARTMENT OF PUBLIC WORKS MEMORANDUM October 1, 2010 TO: City Council FROM: John Whitcomb, Operations Director SUBJECT: Introduction and Schedule a Public Hearing on a Proposed Ordinance Amending the City’s Solid Waste Ordinance (File Ordinance 2010-463) Attached is Ordinance 2010-463 which provides for several amendments to existing Janesville General Ordinance 8.64 (Solid Waste and Recycling). All proposed amendments are to be effective January 1, 2011. The following amendments are proposed:  Additions/revisions to the “Definitions” section of the Ordinance.  A ban on the landfill disposal of certain electronic equipment and oil filters/absorbents, consistent with recent changes in state law which bans these items from landfill statewide.  An increase in the tipping fee at the Sanitary Landfill, from the current rate of $28.90 per ton to $30.00 per ton. Per vehicle disposal rates are also increased proportionally. The increase is necessary based upon 2011 estimated landfill expenditures. It should be noted the current fees shown in the Ordinance (prior to amendment) do not include two separate DNR tonnage fee increases which took effect in July and October of 2009.  Establishment of a $10.00 fee to cover the cost of collecting and recycling microwave ovens at the Sanitary Landfill; this is the same fee charged for the collection and recycling of appliances containing refrigerants. It should be noted the fee charged to collect and recycle refrigerated appliances and microwave ovens could change prior to January 1, 2011, as a result of proposals recently solicited for this service. Proposals are still being evaluated by staff. Any change in the fee would require separate Council action.  Consistent with direction received from the City Council at the Sanitation Fund study session in August 2010, establishment of a solid waste collection and disposal fee to be charged to certain residential dwelling units and certain non-residential facilities. The proposed fee, as per the City Manager’s recommendation, is $40.00 per residential dwelling unit 1 per year and will be administered via the existing Water/Wastewater Utility bill. In residential facilities containing up to four units, as well as condominium buildings and trailer courts receiving City trash collection service, each separate dwelling unit will be assessed the proposed fee. A new section of Ordinance has been developed to implement this fee. It is recommended that, following the first reading, Ordinance 2010-463 be scheduled for public hearing and final action at the October 25, 2010 regular City Council meeting. cc: Jay Winzenz, Director of Administrative Services/Assistant City Manager Carl Weber, Director of Public Works Jean Wulf, City Clerk/Treasurer Peter Riggs, Assistant Operations Director 2 ORDINANCE NO. 2010-463 An ordinance amending Chapter 8.64 Solid Waste and Recycling Subsection I, Section 8.64.090, Definitions; Subsection II, Section 8.64.150, Fee Schedule; and creating by adding Subsection V, and Section 8.64.50, -- Solid Waste Collection and Disposal Fee; with penalties and other Relief for violations as set forth in JGO 8.64.190 and proposed 8.64.580. Janesville General ordinance Chapter 8.64. THE COMMON COUNCIL OF THE CITY OF JANESVILLE DO ORDAIN AS FOLLOWS: SECTION I. Section 8.64.090 of the Code of General Ordinances of the City of Janesville is hereby amended to read as follows: 8.64.090 DEFINITIONS. “As used in this Chapter: A. “Bi-metal Container” A container for carbonated or malt beverage that is made primarily of a combination of steel and aluminum. B. “Bulky Waste” Discarded articles of such size as are not normally collected with residential or commercial waste including, but not limited to, appliances, furniture, plumbing fixtures, windows and doors. C. “City” City of Janesville. D. “County” Rock County. E. “Demolition Waste” Waste resulting from building construction or demolition, alteration or repair including excavated material, remodeling and other waste such as concrete, stone, asphalt, sod, earth, dirt and brick. F. “Department” The City of Janesville Solid Waste Department. The City of Janesville Department of Public Works G. “DNR” Department of Natural Resources. H. “Dwelling Unit” Means a room or group of rooms including cooking accommodations, occupied by one family, and in which not more than two persons, other than members of the family, are lodged or boarded for compensation at any one time. H.I. “Effective Recycling Program” Has the meaning specified in NR544 Wisconsin Administrative Code, as from time to time amended. J. “Electronic Waste” Has the meaning specified in s. 287.07 (5), Wis. Stats., as from time to time amended or renumbered, and includes, but is not limited to, televisions, computers, desktop printers, computer monitors, other 1 computer accessories (including mice, keyboards, speakers, external hard drives, and flash drives), DVD players, VCRs and other video players, fax machines, and cell phones. K. “Eligible Customer” Owner(s) of Real Property enumerated and described in 8.64.530, as from time to time amended or renumbered. The Solid Waste Collection and Disposal Fee shall be charged against and imposed upon the Real Property of Eligible Customers, as set forth in 8.64.530. I. L. “Foam Polystyrene Packaging” Packaging made primarily from foam polystyrene that satisfies one of the following criteria: (a) Is designed for serving food or beverages. (b) Consists of loose particles intended to fill space and cushion the packaged article in a shipping container. (c) Consists of rigid materials shaped to hold and cushion the packaged article in a shipping container. J. M. “HDPE” High density polyethylene, labeled by the SPI code #2. K. N. “Hazardous or Toxic Wastes” Waste material or substances which during normal storage or handling may be a potential cause of harm, including but not limited to, pharmaceutical materials, corrosive chemicals, poisonous or pathogenic substances, pesticide chemicals, radioactive materials, toxic materials and all other similar harmful substances whether in solid, liquid or gaseous form. L. O. “LDPE” Low density polyethylene, labeled by the SPI code #4. M. P. “Magazines” Magazines and other materials printed on similar paper. N. Q. “Major Appliance” A residential or commercial air conditioner, clothes dryer, clothes washer, dehumidifier, dishwasher, freezer, microwave oven, oven, refrigerator, stove, furnace, boiler and water heater. O. R. “Motor Oil” An engine oil that is unmixed with any other substance which can no longer be used for its intended purpose. P. S. “Multiple-Family Dwelling” A property containing five (5) or more residential units including, but not limited to, those which are occupied seasonally. Q. T. “Newspaper” A newspaper and other materials printed on newsprint. R. U. “Non-Residential Facilities and Properties” Commercial, retail, industrial, institutional and governmental facilities and properties. This terms does not include multiple family dwellings. 2 S. V. “Office Paper” High grade printing and writing papers from offices in non-residential facilities and properties. T. W. “Oil Filter and Oil Absorbing Material” Used oil filters and oil absorbents originating at non-residential facilities. U. X. “Other Resins or Multiple Resins” Plastic resins labeled by the SPI code #7. V. Y. “Person” Any individual, natural or artificial, including, but not limited to, any firm, company, municipal or private corporation, association, society, institution, enterprise, joint venture, partnership, limited liability company, governmental agency, governmental unit, or other entity howsoever comprised or constituted. W.Z. “PETE” Polyethylene terephthalate, labeled by the SPI code # 1. X. AA. “Plastic Container” An individual, separate, rigid plastic bottle, can, jar or carton, except for a blister pack, that is originally used to contain a product that is the subject of a retail sale. Y. BB. “Post-Consumer Waste” Solid waste other than solid waste generated in the production of goods, hazardous waste, as defined currently in s. 144.61(5), Wis. Stats., waste from construction and demolition of structures, scrap automobiles, or high- volume industrial waste, as defined currently in s. 144.44(7)(a)1., Wis. Stats. Z. CC. “PP” Polypropylene, labeled by the SPI code #5. AA. DD. “PS” Polystyrene, labeled by the SPI code #6. BB. EE. “PVC” Polyvinyl chloride, labeled by the SPI code #3. CC. FF. “Recyclable Material” Lead acid batteries; major appliances; waste oil; yard waste; aluminum containers; corrugated paper or other container board; foam polystyrene packaging; glass containers; magazines; newspaper; office paper; rigid plastic containers, including those made of PETE, HDPE, PVC, LDPE, PP, PS and other resins or multiple resins; steel containers; waste tires; and bi-metal containers. DD. GG. “Residential Property” Means a lot or parcel of land developed exclusively for residential purposes, including single-family units, duplexes, and multi-family buildings containing up to four separate units. The term includes condominiums and manufactured homes. EE. HH. “Responsible Unit” Has the meaning specified in s. 159.09, Wis. Stats. FF. II. “Solid Waste” Has the meaning specified in s. 144.01(15), Wis. Stats. 3 GG. JJ. “Solid Waste Disposal Facility” Has the meaning specified in s. 144.43(5), Wis. Stats. HH. KK. “Solid Waste Treatment” Any method, technique or process which is designed to change the physical, chemical or biological character or composition of solid waste. “Treatment” includes incineration. II. LL. “Waste Tire” A tire that is no longer suitable for its original purpose because of wear, damage or defect. JJ. MM. “Yard Waste” Leaves, grass clippings, yard and garden debris, brush, and clean woody vegetative material no greater than 6 inches diameter. This term does not include stumps, roots or shrubs with intact root balls. SECTION II. Section 8.64.120(C) of the Code of General Ordinances of the City of Janesville is hereby amended to read as follows: C. The following wastes and materials are prohibited from disposal, placement or deposit at, upon, or into any Sanitary or Demolition Landfill by any person at any time: 1. Lead-acid batteries 2. Major appliances , oil filters or oil absorbent materials 3. Motor oil 4. Toxic or hazardous wastes 5. Waste Tires 6. Yard wastes 7. Materials listed in Section 8.64.130, unless those materials come from a responsible unit having an effective recycling program approved by DNR. 8. Concrete, reinforced concrete, bituminous concrete, broken pavement, shall not be disposed of in the Sanitary Landfill, but may be disposed of at the Demolition Landfill. Electronic wastes. 9. 4 SECTION III. Sections 8.64.150(A), (B), and (G) of the Code of General Ordinances of are the City of Janesville is hereby amended to read as follows: 8.64.150 FEE SCHEDULE A. For all materials hauled to the Sanitary Landfill in vehicles other than City of Janesville owned vehicles, excluding special wastes and wastes used as daily cover, the fee charged shall be the greater of: Thirty dollars and 00/100 Twenty one dollars and eighty cents ($21.80) cents ($30.00) per ton, or B. The following applicable minimum fee regardless of the actual weight deposited: three dollars and 1. Passenger cars, two dollars and fifty cents ($2.50) fifty cents ($3.50); 2. Station wagons, mini-vans and sport utility vehicles, three dollars and four dollars and fifty cents ($4.50); twenty five cents ($3.25) 3. Vans, mid-size pickup trucks and trailers with a capacity of two cubic seven dollars and twenty five yards or less, three dollars and twenty five cents ($5.25) cents ($7.25); 4. Full size pickup trucks and trailers with a capacity of more than two ten dollars and twenty five cents cubic yards, seven dollars and fifty cents ($7.50) ($10.25); 5. All other vehicles and trailers, including those which have been modified to increase capacity beyond standard capacity, twenty one dollars and eighty thirty dollars and 00/100 ($30.00). cents ($21.80) G. microwave ovensandfor For all major appliances containing and refrigerants and deposited for recycling, the fee charged shall be Ten Dollars 00/100unit ($10.00) per major appliance . All other major appliances and parts thereof may be deposited for recycling at no charge. SECTION IV.s– 8.64.580 Subsection V, Section 8.64.500 of the Code of General are Ordinances of the City of Janesville is hereby created to read as follows: SUBSECTION V. 8.64.500 Solid Waste Collection and Disposal Fee. 8.64.510 Creation. 5 8.64.520 Income and Revenue. 8.64.530 Eligible Customer Classification. 8.64.540 Rates and Charges. 8.64.550 Billing. 8.64.560 Payment of Charge; Lien; Penalty. 8.64.570 Conflict with Other Ordinances, Laws. 8.64.580 Penalty – Subsection V. 8.64.500 SOLID WASTE COLLECTION AND DISPOSAL FEE In addition to all other fees set forth in this Chapter, the following fees shall be imposed, charged, collected, and paid in the manner set forth below: 8.64.510 CREATION There is hereby established a solid waste collection and disposal fee, effective January 1, 2011. The entire charge and management of the solid waste collection and disposal operation is vested in the City Manager, subject, however, to the general control and supervision of the Common Council, pursuant to applicable State law. 8.64.520 INCOME AND REVENUE The solid waste collection and disposal fee finances shall be accounted for in the Sanitation Fund by the City. There shall be established annually a Sanitation Fund budget which is to include all solid waste collection and disposal costs and other costs related to the operation of the solid waste collection and disposal program. The annual Sanitation Fund budget is subject to approval by the Common Council. 8.64.530 ELIGIBLE CUSTOMER AND PROPERTY CLASSIFICATION For the purpose of imposing and collecting the fee established under this Subsection, the following eligible customer classifications shall apply: A. All residential properties containing up to four (4) separate dwelling units shall be subject to the fee. B. All condominiums receiving solid waste collection and disposal service performed by employees of the City of Janesville or its subcontractors shall be subject to the fee. C. All non-residential facilities receiving solid waste collection and disposal service performed by employees of the City of Janesville or its subcontractors shall be subject to the fee. This provision shall not apply to any City of Janesville governmental facilities. D. All unoccupied, developed, residential lots and parcels shall be subject to the fee. E. In all classifications above, each separate dwelling unit on a single parcel shall be subject to the fee. 6 8.64.540 RATES AND CHARGES A. Beginning January 1, 2011, the fee charged to each Eligible Customer, as classified in Section 8.64.530 of this Subchapter, and annually on the first day of each year thereafter, shall be Forty Dollars and 00/100 ($40.00) per calendar year. B. Every Eligible Customer shall pay to the City the applicable Solid Waste Collection and Disposal Fee established and imposed under this Subsection when due for each property and dwelling unit. C. The basis for computation of the Fee is established under this Subsection. The amount of the fee to be imposed, the establishment of formulas for the calculation of charges, the creation of customer classifications for the imposition of the fee, and changes in such charges, formulas, and customer classifications shall be consistent with this Ordinance. The fee established pursuant to this Ordinance shall be fair and reasonable. A schedule of current fee charges shall be maintained and on file in the office of the City Clerk. D. Charges shall be imposed to recover all or a portion of the costs of the City’s solid waste collection and disposal program. Such charges may include, but are not limited to, the following components: 1. Collection Component.The Collection Component shall include the estimated annual costs associated with the physical act of solid waste collection performed by employees of the City of Janesville or its subcontractors. This includes the act of curbside or off-street collection of solid waste and the total cost to transfer collected solid waste to a licensed solid waste disposal and/or processing facility. The Collection Component shall be calculated by taking the sum of all Collection Component costs and dividing that sum by the estimated number of billable customers. 2. Disposal Component.The Disposal Component shall include the estimated cost of disposing of all collected residential waste at a licensed solid waste disposal or processing facility. The Disposal Component shall be calculated by taking the sum of all disposal and/or processing costs and dividing that sum by the estimated number of billable customers. 8.64.550 BILLING The billing schedule for the solid waste collection and disposal fee shall coincide with the billing schedule for the Janesville Water Utility and the Janesville Stormwater Utility. The fee shall be due and payable to the City Treasurer at the same time that the Water Utility bills are payable but in no event sooner than the first billing statement sent to customers for the fee each calendar year. 8.64.560 PAYMENT OF CHARGE; LEIN; PENALTY A. Fees shall be payable upon receipt of invoice or statement, or as of the date of mailing, subject to the provisions of this section. 7 B. Fees shall not be payable in installments. C. Fees remaining unpaid for a period of thirty (30) days or more from the date of the invoice or statement shall be assessed a late payment penalty charge. All delinquent fees shall be subject to a penalty of one percent (1%) computed every thirty (30) days upon the unpaid balance and will be added thereto, in addition to all other charges, penalties or interest, arising or imposed, when the delinquent charge is extended upon the property tax roll for that year. D. If a charge and/or late penalty remains unpaid for a period of thirty (30) days after the date of the invoice or statement, such charge and penalty, from the date of the invoice or statement mailing, shall become a lien upon the real property to which it applies, as provided in Sections 66.0821 and 66.0809, and other applicable provisions of the Wisconsin Statutes, as from time to time amended or renumbered. E. Delinquent charges and penalties each year shall be automatically extended upon the next available tax roll as a delinquent tax against the real property, and all proceedings relating to the collection, return, and sale of property for delinquent real property taxes shall apply to such charges. 8.64.570 CONFLICT WITH OTHER ORDINANCES, LAWS In the event of any conflict between any provision set for in this Subsection and any other City ordinance, the competing provisions shall be harmonized to the fullest extent possible so as to facilitate the intent and proper effect of the separate areas of regulation. 8.64.580 PENALTY - SUBSECTION V A. Any person who violates or causes to be violated any provisions set forth in this Subsection shall, upon conviction thereof, pay a forfeiture to the City in the amount of not less than Fifty Dollars and 00/100 ($50.00) nor more than One Thousand Dollars and 00/100 ($1,000.00), together with the cost of prosecution thereof. Upon default in payment of the imposed forfeiture, the violator shall be committed to the Rock County Jail for a term of not more than ninety (90) days. B. The payment of such imposed forfeiture shall be in addition to the payment of any and all residential solid waste collection and disposal user fee charges imposed by this Chapter. C. Each day’s continuance of a violation shall constitute a separate offense to which a separate forfeiture may be imposed. D. It shall be the responsibility of the violator to cease and abate the violation immediately. E. In addition to the forfeitures set forth above and payment of the charges, the City may seek, obtain and enforce injunctive relief. 8 SECTION V. This ordinance and its fees shall take effect at 12:00 o’clock a.m. on January 1, 2011, the public interest, welfare, benefit and good so requiring, and the Common Council so finding. Shared/Ordinance Solid Waste 2010-463 Changes to Solid Waste and Recycling Ordinance Wald.doc 9