flag image
Form Wealth Management

Walworth takes first step toward TIF


Board spending $5,000 for feasability study



SQUARE
shadow

HOW DOES TAX INCREMENT FINANCING WORK? Tax Increment Financing is a tool used to create improvements within a community that wouldn't otherwise occur. "It's the most common and powerful economic tool that municipalities have in the state," Greg Johnson, a financial advisor for Ehlers said. When a municipality creates a TID, the area is evaluated to determine the "base value." All of the tax bodies within the district — the county, school districts, Gateway Technical College and the state — continue to collect taxes from the base value. However, any additional value is considered increment and goes toward improvements within the district. "Inside of a TIF or outside a TIF the tax rate is the same," Johnson said. "The only difference is how that value is distributed." Any additional value that occurs over the base rate, even regular appreciation, goes toward the spending within the TIF. However, depending on appreciation for increment may not be enough. "The best way to generate increment is through development," Johnson said. So, if a piece of property inside of the TID is valued at $100,000 when the district is created, and in five years increases in value to $125,000, the taxes collected on the additional $25,000 goes toward projects within the district.
August 10, 2011 | 08:07 AM
WALWORTH — Before the village creates a Tax Increment Financing District, it needs to prove that one would be economically feasible.

On Monday night, the Village Board approved a $5,000 contract with Ehlers, a company that provides financial planning to municipalities, to complete a feasibility study on a potential TIF district.

During the meeting, Greg Johnson, a financial advisor at Ehlers, taught a crash course on how TIFs work and how they are created.

The board identified tax increment funds as a possible financing option to reroute Highway 14. Under the village's proposed plan, Highway 14 would no longer have right angle turns, but the road would move closer to the school.

The village's plan, which was developed by its planner Jamie Rybarczyk, would require the acquisition of the Antique Mall and a neighboring residence. The highway would travel through the acquired properties and run along the west end of Heyer Park.

The village's Plan Commission recommended approval of this plan during its July meeting. Village President David Rasmussen asked that the Highway 14 issue be placed on the agenda for the Village Board's September meeting. Rasmussen knew he would be unable to attend the board's August meeting and wanted to be present during the debate.

The Department of Transportation also developed a plan for the road, which would require the acquisition of the Antique Mall. With the DOT's plan, the road would remain relatively in the same place, but the turns around it would become wider.

shadow
shadow
shadow
With the DOT's plan, all the angle parking around the square would be eliminated.

With the village's plan, Madison Street, which runs south of the square, and North Main Street, which is east of the square, both become one-way streets and are no longer part of the state highway.

DOT officials have said the village's plan costs about $400,000 more than the other option. The DOT also has made it clear the state isn't willing to pay the difference, which is where TIF comes into place.

Creating a TIF, funding a reroute

Before the village uses TIF money to fund a new route for Highway 14, it must clear a few hurdles.

ad
click to see advertisement
The board took the first step by hiring Ehlers to complete a financial feasibility study. After the study is complete the board will need to identify a project plan.

A public hearing on the district would need to be held and receive approval from the Village Board and Plan Commission.

Approval also is needed from a Joint Review Board consisting of five members — one member from the village, Gateway Technical College, the County Board, a citizen at large and a representative from an area school.

At the meeting, it wasn't clear whether that representative would come from the Big Foot High School District or Walworth Elementary School.

Trustee Kent Johnson questioned whether TIFs historically have been approved by Joint Review Boards.

ad
click to see advertisement
Greg Johnson said the Joint Review Boards have approved TIFs in Delavan, East Troy and Elkhorn.

"It's something they want to feel comfortable with that there is economic actively within it, but by no means is it a slam dunk," Greg Johnson said.

printPrint
emailEmail
CommentFeedback
shareShare

Tags: Geneva Lake West, Highway 14

Comments ()
Walworth County Fair
Regional News
LAKE GENEVA AREA REALTY