City of West Bend borrows $1.5 million after “mistake” and looks to borrow $10 million more tonight

The West Bend Common Council recently voted 5 – 2 in favor of borrowing an extra (approximately) $1.5 million after a “mistake” was made on bidding out the Seventh Avenue reconstruction project.

The City engineer said they realized the “mistake” on Monday, March 8, 2021. The council was notified about the “mistake” in an email sent 5:24 p.m. on Friday, March 12, 2021. The council was to vote on the project at its Monday, March 15 meeting.

Below is a copy of the letter set to aldermen on Friday, March 12.

Mayor and Council,

Some of you have asked about the agenda items included for Monday’s meeting around the planned borrowing. These resolutions are required as part of this year’s borrowing process. The borrowing is for the 2021 portion of our 5-year plan. The adopted capital plan is attached and included with our budget on our website. Phil Cosson provided a document that today was added to the agenda with similar level of detailed projects included in the $5.5 million borrowing.

Good news that the 7th Ave project bids came in lower than estimated. Also, we mistakenly included water and sewer utility costs in our original $2.3 million estimate. The end result of borrowing the $5.5 million in 2021 will greatly reduce our anticipated 2022 borrowing (approx. $1.5 million). We will be able to utilize the funds borrowed in 2021 for our 18th Avenue project constructed in 2022.

Our projected 2022 extra (beyond our $3 million annual amount) borrowing of $1.8 million for 18th Avenue should be reduced to approximately $300,000.

Phil, Max, Carrie and I will all be present on Monday to further explain this good news and logic for maintaining the borrowing at $5.5 million this year.

Please call my cell over the weekend 262-355-6102 or on Monday if you have any questions.

Enjoy the weekend!

Jay Shambeau  City Administrator  City of West Bend  (262) 335-5171

During the Monday, March 15 meeting Dist. 4 alderman Randy Koehler asked if the council borrows about $1.5 million over the project cost in 2021, is there a way to make sure the council borrows less next year? He also asked, “We’re just going to sit on that $1.4 million for a year and do nothing with it? That doesn’t make any sense to me. And if we don’t need it why are we borrowing it,” asked Koehler.

 

The representative from Ehlers Public Finance Advisors said “the City could earn interest on the $1.4 million. You also have the ability to lock in at the day of sale at a fixed rate for the life of the debt at a low interest rate environment for not only this year’s projects but a portion of next year’s projects.”

Koehler responded. “You said we have the ability to earn interest but we’re also going to be paying interest on money for a year that we’re just going to leave sit there. I would like us to scale this back by $1.4 million and just borrow the $4.1 million that we need to do the projects this year. That way we’re not tying the hands of the council next year and we’re also not saying we have an extra $1.5 million and then next year we borrow the same… we can’t determine how that will go next year. I want to scale this back and borrow just what we need.”

A clarification was made that the money borrowed would have to be spent on roads.

City engineer Max Marechal was asked if the money could be used in 2021 on other road projects. Marechal indicated contractors are already booked through the end of the year.

During a separate interview Phil Cosson from Ehlers indicated the interest for a year on the extra $1.5 million would cost the City $20,000. The interest received on the borrowing would be “nominal,” according to Cosson. Questioned what the dollar figure on “nominal” is he said “less than $1,000.”

“Do we think the rates are going to be better today, or are they going to be better next year,” said Cosson. “I don’t have a crystal ball…”

Cosson said interest rates would have to move “about 100 basis points or 1 percent in order to make up for that $20,000 interest payment.”

Questioned whether a 1 percent jump is normal, Cosson said, “I can’t estimate that… we’re not hearing the Federal Reserve is going to change policy over the next six months or so but it is certainly possible they could move up.”

The final vote on March 15 to borrow an extra $1.5 million was 5 – 2.

Those voting in favor: Alderman Dist. 1 Jon Butschlick, Dist. 2 Mark Allen, Dist. 3 Brett Bergquist, Dist. 5 Jed Dolnick, Dist. 7 Justice Madl

Those voting against: Dist. 4 Randy Koehler and Dist. 8 Meghann Kennedy

During tonight’s meeting, Monday, April 5, 2021 the council is voting on a proposal to create a new Tax Increment District #15 in the area north of Highway 33 and Main Street. Click HERE for details starting with Page 72.

This would be a $10 million borrowing with total borrowing of about $15 million with interest.

The vote is being held the day before the April 6, 2021 election which means no one will be representing taxpayers in Dist. 6 since that seat is open following the death of alderman Steve Hoogester.

 

The former chair of the council finance committee, Adam Williquette, reviewed available data on the proposed TID #15 and sent a note last week to alderman warning them of the dicey situation this proposal could mean for taxpayers.

Dear Council Members,

I am writing to voice some concern with the new proposed TID# 15 in West Bend. I not only bring the municipal background of TID creation and municipal finance, but an even greater understanding of TIDs due to my profession as a commercial real estate broker for the last 17 years. Having been on common council and having a good knowledge of the city’s finances, I write this as a West Bend resident with no ill intention to any of the parties involved in this development.

 

In looking at the TID plan, I find it confusing that West Bend would include borrowings for the following:

$1,000,000 developer incentive (What is this paying for?)

$4,545,000 MRO to Developer (What is this paying for?)

$2,200,000 for Riverwalk restoration south of Highway 33

$1,500,000 Main Street Improvements

I can understand how the following could be seen as “beneficial to the TID” and applicable for TID borrowing given the boundary:

$500,000 for Riverwalk North of Highway 33

Unlike other similar recent TIDs in West Bend, this has a whopping projected borrowing of $9,725,000 (without interest).

So now we get to the cash flow part of the TID plan. It factors in a very aggressive building schedule and is projecting that $17,000,000 would be completed by January 2022 to be paying $349,000 in taxes to pay for expenses in 2023. Even then the TID is only projected to cash flow $4,920 that year.

Then projecting that the project will assess at $30,000,000 in January 2023, the taxes for 2024 will be $558,000, with expenses increasing to $554,000, this projects a cash flow of $3,800 for the year.

The TID increases slowly to a maximum $14,000 surplus in 2046 (24 years from now) before finally paying off enough debt to pay surpluses of $323,711 in 2047, $711,057 in 2048 and, $714,489 in the last year of the TIDs life.

The first 24 years of this TIF are razor thin, and if things such as construction schedule are off by anything, the TIF will lose money over that time period and not actually benefit the taxpayers until 2047, and even then, everything would have to go 100% as projected.

This reminds me of the downtown River Shores TID # 10 which would have been costly to the taxpayers had the developer chosen not to pay their shortfall, which we should be thankful they had deep enough pockets and a great moral compass to do so. Thankfully, they also further developed Cast Iron Luxury Living to generate further increment in the failing downtown TID. If they didn’t have deep pockets, again, this would not have happened.

Next is downtown TID# 9, which has been one, if not the biggest, drain on city finances for the past few decades. This was the Veterans Avenue relocation which sat vacant, and then was sold largely to non-profit groups and did not pay anywhere near its TID “projection” or potential had the city held out for higher taxed entities.

The last one is downtown TID# 12. This was the relocation of a company downtown and trade for their former headquarters. In exchange for a lot of their taxes in return, they stayed in West Bend. Good, yes, but the taxpayers paid for it. The city even paid a consultant $100,000 to tell them this was a good idea, on the taxpayer’s dime. TID# 9 & 12 accounted for a huge amount of the city’s debt payments for many years and there is still work to pay those debts down. At least there has been some headway the last few years to put as much increment in those TIDs as possible. We do not need to attempt another downtown TID that we can’t look at and call a no-brainer and gamble with the taxpayer’s money again. We have had many successful TIDs in West Bend that passed that test and need to continue that as a test for approval of new ones.

TID # 15 is a Blight Rehabilitation TID. The other Blight Rehabilitation TIDs that West Bend tried downtown lead to the biggest drain on West Bend’s finances for the last decade and a half because the city gambled with the taxpayer’s money and lost.

This brings me back to some of the expenses of TID# 15. The MRO (Municipal Revenue Obligation) on the Table 4- Cash Flow shows the MRO as all principal. I assume it includes interest because the borrowing says it will be $4,545,000 MRO to Developer and the Cash Flow spreadsheet says it has a total cost of $8,574,201. If we calculate interest on that number, it is around 4.5% over the life of the TID. If those costs are going to pay for public infrastructure, which TID costs generally are required to do, why would we not issue GO Bonds at a 2% interest rate? I suppose that would look like a tax increase, but nonetheless save the taxpayers money.

The EDWC was asked to do an independent look at this TID. They were denied access to all information other than the public information by the city. (Which is the same information I was able to make these conclusions from.) If this project is such a great idea, why would the city not allow an independent economic development group that is one of the city’s trusted advisors on many other financial decisions, come to the “same great conclusion” that the plan is good and should be passed?

On top of the numbers not looking great, or even good, there seem to be a lot of unanswered questions. Why not do a pay-go TID where there is little to no risk for the taxpayers? Why try a Blight Rehabilitation TID again with worse projections than those of the past that failed?

 

I urge you all to ask more questions, not support this in its current form, or table this until further information is gathered.

This is a great project, but not the way that it is gambling with the taxpayer’s hard-earned money.

If any of you have any questions on my thoughts, please feel free to reach out to me.

Thank you for your time.

Sincerely, Adam Williquette West Bend, WI

Monday’s West Bend Common Council starts 6:30 p.m. in the council chambers at City Hall. The meeting is open to the public.

West Bend council votes 6-1 to move forward on development of TID #15

Following a one-hour closed session the West Bend Common Council cast a 6-1 vote (Dist. 8 Meghann Kennedy the lone dissent) to approve a project plan and establish boundaries for creation of TID #15.

The focal point of TID #15 would be the redevelopment of the old West Bend Brewery which would be converted by HKS Holdings, LLC into 181 apartments and retail space. “Tax base, foot traffic and connectivity between the north and south of the river walk were the key points of the project,” said Phil Cosson with Ehlers Public Finance Advisors.

HKS proposes a mixed-use development with 181 high-end apartment units and a commercial space for retail or a restaurant.

After closed session District 5 alderman Jed Dolnick rattled off a list of direct questions. “The current value of the brewery and land is worth $770,000 (amount corrected) and it will be replaced by a structure that is conservatively estimated to be $35 million,” he said.

“The only money we (the City) will borrow is for the public improvements of the City river walk, the river walk going under Highway 33 and improvements to Main Street plus a third of the cost to clean up this site but we are not borrowing any money ($10 million) to build this.

“The third point, the most confusing, the MRO is not being paid for by borrowing it is being paid for out of the tax being paid on the property.”

Cosson confirmed all of Dolnick’s statements.

Kennedy voted against the proposal adding, “I’m really excited for this project, it’s beautiful and I think it’s going to bring a lot to the City. My no vote is on the belief that we have four potential new board members that could be on this board tomorrow (April 6 is Election Day and the even-numbered seats are up for election) so that is why I’m voting no,” she said. “I think this issue should be put before the new board.”

During his initial review of the $35 million development plan, Cosson said:

It will take 23 of the 27 years to fully pay back the tax increment district (TID)

There are up to $9.7 million in capital expenditures that are TID eligible.

The $1 million incentive to the developer is for cleanup of the site including relocation of the We Energies site. Cleanup is estimated to cost $3 million total.

$500,000 for river walk north. The $1.5 will be borrowed and it would be paid back by the City from increment from the development.

River walk south is $2.2 million and that includes a tunnel under Highway 33.

Portion of Main Street improvements which will be tackled in 2023.

HKS estimates it will have its development constructed by 2023.

MRO = municipal revenue obligation – a contract between developer and City. After the City’s obligations are first paid the remaining increment will go back to the developer up to $4,425,000.  “The key is the City costs, borrowed money, will be paid first and what gets paid last is the MRO payment which will be due on an annual basis,” said Cosson. “If the valuation comes in less or it under performs the developers are the ones at risk and they are the ones that will be hurt.”

Increment from the HKS development is 1 half of 1 percent appreciation factor as the revenue that comes into the TID.

The proposed TID #15 must still go before the Joint Review Board later this month, April 15.

Dairy Destination is June 12 at Sunset Farms in Allenton

Washington County Dairy Promotion is rolling out a brand-new event for 2021, “Dairy Destination – Carloads of Fun. This event provides a unique opportunity to load up your car with family and friends and head to one of Washington County’s finest dairy farms, Sunset Farms located in Allenton, WI.

Upon arrival, you will be guided to the auto trail where you will roll through the entire dairy operation from the comfort of your car. Cows, calves, dairy barns, farm equipment and other fascinating sites that make the wheels turn on this dairy operation.

There will be games and surprises along the way for the kids. Each car will receive a signature “Dairy Dream Box” filled with dairy products, treats, and prizes valued at over $30.

Mike Strupp, event co-chair, said the goal of this new event is to show-case locally available dairy products through a fun and creative adventure at the farm.

The event is Saturday, June 12 through advanced ticket sales only. Tours run 7 a.m. to 11 a.m. Your ticket will indicate your tour arrival time.

Tickets go on sale May 1, 2021 and can be purchased online at washingtoncountydairy.com A limited number of tickets will be sold on a first-come first-serve basis. It is recommended to purchase early to guarantee a spot. The cost is just $20 per carload and promises to be fun for all ages. Tickets are non-refundable.

Washington County Dairy Promotion is dedicated to promoting the dairy industry through promotion and education in classrooms and through community events. Proceeds from this event make these programs possible. Washington County Dairy Promotion is supported and operated by dairy farmers and partners in the dairy industry.

Reported bomb threat deemed hoax by West Bend Police

Pick ‘n Save north, 2518 W. Washington Street, in West Bend was evacuated around 10 a.m. Thursday after police received a call about a bomb threat.

Police combed the area and visited other businesses along Wildwood Road including the strip mall to the north, Stein’s, and the Stockhausen mall area.

The entrances to the grocery were blocked with police vehicles and yellow tape. Employees and customers were evacuated from the store. Business owners in the area were also visited by police to ensure there was nothing amiss.

After a little more than an hour no device was found. Police issued the press release below.

Pick ‘n Save reopened around 1:30 p.m.

BOMB THREAT 2518 West Washington Street

On Thursday, April 08, 2021 at 9:23 AM, a person that did not identify themselves called the West Bend Police Department and stated a bomb had gone off at the Pick N Save North store.

West Bend Police Department personnel and West Bend Fire Department personnel responded to the store. Police officers arrived and found there was no explosion. Officers were directed to an unattended package in the parking lot.

Police and fire personnel then assisted in evacuating the area. The Milwaukee County Sheriff’s Department Explosive Ordnance Disposal Unit responded and examined the package. The package did not contain any explosive device or material. Personnel searched the store and surrounding area before opening the store.

The store and Wildwood Road from Washington Street to Park Avenue were closed for approximately one hour. Investigators are working on identifying the caller.

Helping small businesses recover in Washington County

Washington County, WI and Economic Development Washington County (EDWC) have partnered to offer easy-access rocket fuel financing to propel county businesses who are ready to move past the pandemic and engage in what’s next because ‘Together. We’ve Got This!’  County Executive Schoemann released the following statement on the new program:

COVID-19 and Safer at Home has ravaged our economy, and in particular our small businesses. While programs from the state and federal government have provided assistance to a great many, as the dust settles it appears that a small portion of ultra-small businesses have been hit particularly hard and have received little or no economic support.

That is why I’m excited to announce this pro-growth initiative aimed at providing funds to our farmers, restaurants and small retail establishments quickly and with no collateral necessary.  I’d also like to thank the Washington County Board for approving money for this program as I recommended: money returned to Washington County from Sales Taxes generated by the “Miller Park” tax.

I feel this money belongs to the businesses that helped generate it then and need our help now.   This is yet another example of how we are working to create a pro-growth environment.

Loans will become available on April 7 and EDWC will take applications until funds are exhausted on a first come, first serve basis. Financing subject to review and approval of EDWC. We anticipate high demand for the program.

More information on the WashCo Small Biz Loan is available at edwc.org/washcosmallbizloan/

Local establishments change hands as liquor license applications are reviewed

It was March 12, 2021 when a story was posted on WashingtonCountyInsider.com about the sale of Culaccino Bar + Italian Kitchen in West Bend.

Jeremy Hahn bought the establishment. On Monday, April 5, 2021 he will be one of six requests before the City of West Bend Licensing Board.

Hahn, who currently owns The Boardroom, The Inferno, and Garden Lounge, will be requesting an Original Class B Combination license for 110 Wisconsin Street. It will be the future home of Vino Con Volo. Hahn said his chef at The Inferno is classically trained in Italian cooking. “He ran Buca di Beppo in Milwaukee for 10 years so it could be a good fit,” Hahn said.

As far as the menu is concerned, Hahn sees things remaining Italian but will try to push for a lunch crowd.  “We’re going to have a special with burgers but I’m not 100% yet.” Hahn said he is leaning towards an “airplane theme” since his dad is a pilot and the blades on the ceiling fans resemble propellers from a plane.

Also on the docket for Monday is a liquor license request for The Wedge 53095 Uncorked. The story about the new cheese and wine store was first posted on WashingtonCountyInsider.com on January 15, 2021.

The business is owned by Jessica Youso.

Just a bit up the road at 1539 N. Main Street the old M&R Bar has changed hands. Who has some history knowledge to tell us what M&R stands for?

B&K Sal Properties has applied for the license. Robert F. Salinas is the one filing the application. Right now, renovations are underway and there is a Dumpster in the parking lot as new life is breathed into the building.

Finally, it looks like the location to the south of Saloon Royale will be named Mavens on Main, 241 N. Main Street. Chad Goeman has applied for a liquor license. Monday’s meeting begins at 6:25 p.m. in the Council Chambers at City Hall. The meeting is open to the public.

Fond du Lac County Breakfast on the Farm is Sunday, June 27

Envision Greater Fond du Lac Agri-Business Council is gearing up for its annual Breakfast on the Farm. This year’s event is Sunday, June 27 at LaClare Family Creamery in Malone.

“We actually did a drive-thru last year and this year we are ready to celebrate June Dairy Month in person,” said Amy Ries, director of agricultural program.  “This is going to be a safe, outdoor event and we encourage families to come celebrate agriculture in Wisconsin.”

The breakfast is $8 in advance and $9 at the event. Breakfast will feature scrambled eggs with ham and cheese, pork sausage, cheesy potatoes, coffee and milk. “We will have custard in a separate van and those will be $1 apiece and we will also have LeClare Creamery goat ice cream sundaes and those will be $1 as well,” said Ries. “All proceeds from the goat ice cream goes to the Ag Ambassador (ag in the classroom) program.)

Sheboygan County Breakfast on the Farm

Sheboygan County Dairy Promotions Association has announced its 2021 Breakfast on the Farm will be at Devin Acres in Elkhart Lake on Saturday, June 19. Breakfast on the Farm in Sheboygan County will include pancakes, eggs and cows. The event at Devin Acres, W3844 Primrose Lane, Elkhart Lake is with your hosts Kevin and Deb Kirsch on Saturday June 19, 2021 from 7 a.m. – 12 p.m.

Wall panels put in place at new Milwaukee Tool in West Bend

The walls are finally going up at the new Milwaukee Tool in West Bend. The walls arrived on a flatbed and were then lifted in place by a crane. The new manufacturer is located on River Road.

 Transplanting 4th-generation rhubarb in Cedar Creek

On a dreary Saturday morning with temps in the low 50s Kevin Zimmer and his sidekick Coco set off on a mission to transplant a 4th generation rhubarb patch from the old Peil Farm.

Climbing into his 6-wheel drive red pickup Zimmer cut through the back of his property on County Highway C and headed south through the 97-acre Peil farm; a parcel he closed on purchasing this month.

Rolling through a tree line, past low rock walls that date to the mid-1800s, Zimmer is elated about transplanting the old Peil family rhubarb plot.

“This is just really nice rhubarb,” he said, his eyes a little wild, similar to when local auctioneer Mike Paul talks about his love of bread pudding or limburger cheese.

“It’s really nice rhubarb. Kinda like when you drive down the highway past a farm and you see great big rhubarb. It’s that kind of rhubarb; we like rhubarb.”

Coco kept her eyes forward, watching turkeys cross in front of the vehicle. She had heard the story before, she hid her excitement well.

The 97-acre Peil farm has an extensive history. Zimmer grabs the original abstract title off the dashboard. “I just really want to know how old this rhubarb patch is,” he said. “In 1849 the farm traded for $200 and if you page through in 1914 it traded for $5,700 on a 10-year land contract.”

Zimmer plans on developing the property, located north of Highway 60 and east of Hillside Road. His mission today was to save the rhubarb.

Armed with a yellow-handled shovel and a “rhubarb extracting tool” Zimmer got to work, separating the thick stalks and cutting through the roots.

Putting the business end of the shovel into the rich soil Zimmer jumped on the blade for good measure and heaved up a ball of leafy rhubarb.

The project moved rather quickly as Zimmer narrated. “This is nice rich dirt; rhubarb really likes organic dirt, sun and manure,” he said. “I could have my own Saturday morning gardening show.”

“If any of the Peil kids are watching and they want some of their heritage rhubarb back… I’ll part with a few,” said Zimmer. Before noon Zimmer potted 75 rhubarb plants.

Recipes are now being accepted as the sweet harvest is just around the corner.