DNE
(See PDF for image) STATE OF WISCONSIN
DEPARTMENT OF JUSTICE
J.B. VAN HOLLEN
ATTORNEY GENERAL
Kevin M. St. John
Deputy Attorney General
Steven P. Means
Executive Assistant
114 East, State Capitol
P.O. Box 7857
Madison, WI 53707-7857
608/266-1221
TTY 1-800-947-3529
December 20, 2011 OAG—6—11
Ms. Kimberly R. Walker
Corporation Counsel
Milwaukee County
901 North Ninth Street, Rm. 303
Milwaukee, WI 53233
Dear Ms. Walker:
QUESTIONS PRESENTED AND BRIEF ANSWERS
¶ 1.
Your predecessor, then-acting Corporation Counsel Timothy R. Schoewe, requested a legal opinion concerning two questions:1.
May a Joint Review Board (“Board”) created under Wis. Stat. § 66.1105(4m) approve an amendment to a Tax Incremental District (“TID”) to provide for payment of already-scheduled street paving work, if the sole stated reason for the amendment is “freeing up street paving dollars in the [City of Milwaukee’s (“City”)] regular capital budget for use on street projects in areas more than one-half mile from a TID?”2.
May a Board approve the creation of a TID that includes street paving expenses that were already planned by the City before the creation of the TID in order to free up “street paving dollars in the City’s regular capital budget for use on street projects in areas more than one-half mile from a TID?”¶ 2.
In my opinion, the answer to each of these questions is the same. The goal of freeing up city street paving dollars for a city’s regular capital budget is not a valid legal basis to include expenses in the initial project plan for a TID or in an amendment to a project plan for an existing TID. However, the fact that a city has such a purpose does not, in itself, preclude the Board from approving or amending a TID. The Board must evaluate whether to approve the creation of or amendment to a TID based on whether the proposal as a whole meets the statutory criteria.¶ 3.
In conducting this analysis, the Board is required to review city council and planning commission resolutions under Wis. Stat. §§ 66.1105(4)(gm) and 66.1105(4)(h)1., to examine the city council’s project-specific findings under Wis. Stat. § 66.1105(4)(gm)4., and to consider the project-specific information provided by the city under Wis. Stat. § 66.1105(4)(i). The legal standards that the Board must apply are contained in Wis. Stat. §§ 66.1105(4m)(b)2. and 66.1105(4m)(c)1. Under those standards, the Board could conclude—but would not be required to conclude—that the costs of street paving planned before a TID is created or amended are appropriate project costs under Wis. Stat. § 66.1105(4m)(d). The Board is accorded considerable legal latitude in making these determinations.BACKGROUND
¶ 4.
We were advised that the City of Milwaukee Common Council has enacted two general resolutions concerning TIDs. The first resolution notes that tax incremental financing may be used for public works or improvements outside a TID but within one-half mile of the TID’s boundaries. It further notes that the project plans for an active TID could be amended to include certain street-paving projects within the TID, or within one-half mile of the TID’s boundaries, that have already been identified in the City’s most current six-year street paving program. The resolution specifically notes that such amendments would “free up street paving dollars in the City’s regular capital budget for use on street projects in areas more than one-half mile from a TID.” The second resolution makes similar affirmations with respect to project plans for prospective TIDs, and then states:The Mayor and Common Council of the City of Milwaukee do ordain as follows:
Part I. Section 304-95 of the [Milwaukee Code of Ordinances] is created to read:
304.95. Tax Incremental Districts-Inclusion of Street Paving Costs in Project Plan. In preparing the project plan for any new tax incremental district, the department of city development shall include in the plan, as project costs, the costs of all street paving projects anticipated to occur within the district and within one-half mile of the district’s boundaries within the next 6 years, as identified by the city’s most recent 6-year local street paving program. The department of city development shall consult with the department of public works in identifying all street paving projects to be included in the project plan.
¶ 5.
We were advised that, based upon the first of these resolutions, the Board has been requested to approve a project plan amendment for an existing TID solely to include the costs of previously-planned street paving. ANALYSIS
¶ 6.
The Board’s functions are set out in Wis. Stat. § 66.1105(4m). The Board reviews three kinds of proposals: “Any city that seeks to create a tax incremental district, amend a project plan, or incur project costs as described in sub. (2)(f)1.n. for an area that is outside of a district’s boundaries, shall convene a . . . joint review board . . . to review the proposal.” Wis. Stat. § 66.1105(4m)(a). When considering a proposal, the Board “shall review the public record, planning documents and the resolution passed by the local legislative body or planning commission under sub. (4)(gm) [project plan] or (h)1. [project plan amendment].” Wis. Stat. § 66.1105(4m)(b)1.¶ 7.
Before a city council submits a proposal to the Board to approve the creation or amendment of a TID, the city council must enact a resolution with provisions and findings specific to the proposal that is before the Board. Wis. Stat. § 66.1105(4)(gm)(h). All proposed “project costs” must be included in the project plan. Wis. Stat. § 66.1105(4)(f). “Project costs” are the city’s costs in implementing the project plan; the city council’s resolution must include findings that the costs “relate directly to eliminating blight, directly serve to rehabilitate or conserve the area or directly serve to promote industrial development, consistent with the purpose for which the tax incremental district is created[.]” Wis. Stat. § 66.1105(4)(gm)4.bm. The city council is also required to furnish the Board with project-specific information stating “[t]he reasons why the project costs . . . may not or should not be paid by the owners of property that benefits by improvements within the tax incremental district.” Wis. Stat. § 66.1105(4)(i)3.
