Are we taking this seriously?

On a scale of 1-10, how seriously are we taking the Covid-19 Pandemic? On Wednesday, a city administrator told me he went to pick up a to-go order at a local bar/restaurant the night before and found the bar open, with a crowd of folks lined up elbow to elbow. Meanwhile, three Wisconsin counties are reporting “community spread” cases of the illness. Community spread means so many people have the virus in one area that it is now spreading from people within the county; it was not brought in from Italy, China, or a cruise ship. No counties had community spread two days ago; there are three counties today. How many will there be in a week? Are we taking this seriously enough?

The League’s job is to help you do your job. To that end, we’re tracking down and cranking out as much information as we can find that is relevant to municipal responses to the Coronavirus. Our role is to listen to you and then find answers to your questions, particularly those questions that relate to state laws and regulations. If you haven’t done so recently, I recommend you check out the Coronavirus page on lwm-info.org. We’re updating it constantly and there’s some very useful, practical information there.

On St. Patrick’s Day the Governor issued Emergency Order Number Five. That order closes the taverns in Wisconsin (never thought I’d see that), limits restaurants to “carry out” and, most significantly, it places a moratorium on “mass gatherings” of ten people or more. The order echoes the latest recommendation from the world-renowned Centers for Disease Control (CDC) which were amplified by President Trump’s “15 Days to Slow the Spread” campaign.

The order exempts government offices from the crowd moratorium, allowing city councils, village boards, and the other instruments of government to continue. That’s necessary, good and helpful, but I’ll be honest with you; it’s also troubling. You now have the power to decide whether crowds may gather in municipal buildings. Use that power wisely.

The Governor’s order, President Trump’s campaign and your work at the local level are all targeted at the same goal: flattening the curve. “Flattening the curve” means slowing down the spread of the Coronavirus to a rate that our hospitals, doctors and clinics can handle. If we don’t slow it down, there will quickly come a point where there are more people who need to be in the hospital than there are hospital beds available. Italy found out to its horror what happens when you don’t flatten the curve. People die in the corridors of hospitals as they wait their turn for a ventilator or other critical care.

Flattening the curve happens by limiting person-to-person contact. It doesn’t make the virus go away, but it allows our health care providers to adequately treat those who are seriously ill. The alternative, people who need critical care but can’t get it, is something we should not even consider. Emergency Order Number Five was the most recent action taken to flatten that curve. But its success or failure will be determined locally.

The CDC is in Atlanta. President Trump is in the White House. Governor Evers is in the State Capitol building. You’re on the ground in your community. The success or failure of things like Executive Order Number Five is more in your power than that of the scientists at CDC, President Trump or Governor Evers. Are we planning to cancel large public hearings or use teleconference technology where possible, or will we maintain “business as usual”? How seriously are we taking this?

Day 2, Flying Through

What a jam-packed day! Day two of the conference was a busy day full of information and great networking with others. I hope that you enjoyed all the break out sessions just as much as I did.We had such a wide range of topics covered today from PFAS, to Liquor Licencing, covering the importance of ethics and so much more. While these topics might seem like boring issues to the average person; I always digging in when discussing policy. As local leaders it is vital that we always continue to learn new ideas and share our experiences with others because this is how we are able to grow and make improvements. 

It was  great to hear from Tricia Braun during lunch. Tricia is the Chief Operating Officer at the Wisconsin Economic Development Corporation. She is charged with leading the organization’s efforts to promote Wisconsin and help foster a positive workforce environment all across Wisconsin. It was wonderful to hear all the great work that WEDC is doing to help promote Wisconsin and encourage people to relocate here. As local leaders we rely on our state partners to help promote and life up our communities. 

We also took time to recognize Appleton Mayor Tim Hanna for his many years of service to Appleton and the League. I know that we all wish him well in his retirement. Mayor Hanna is a shining example of what a local leader should do.

Congrats on the respective winners for the Local Spark and Arts in the Community Awards. It is important to recognize the great work that is being done around the state, and brightening up our communities whether big or small. Seeing the great work being done reminds me that no matter the size of the municipality, that we can all achieve creative and innovative projects. 

This conference is zipping by. We are in the home stretch. I am super excited to hear LeRoy Butler speak tomorrow!

First Day of #LeagueWI2019 Starts Strong

The first day of the 121st League Conference is off to a great start. It is always rejuvenating to see so many passionate local leaders that care about making their communities a better place. I know this will be a very successful conference because we have a great lineup of speakers and sessions. I hope that you will learn a lot and leave this conference with a great sense of commitment to your community.

This has been an exciting day so far. This morning started off with several informational deep dive sessions. I attend the session on innovative housing solutions. As local leaders we all know that housing is an issue that we all are trying to address and help meet the needs of our communities. As we all know, there is no single easy solution to addressing the housing issue. That is why Kurt Paulsen encouraged all of our cities and villages to develop a community housing plan. When we develop strong housing plans, only then can our cities and villages begin to move forward.

I don’t know about you but, I filled my bag with so much stuff from the vendor fair. I now have plenty of pens and note pans to make it through the next year. I always enjoy chatting with the vendors and learning about all the different partners that we have that help us by providing us with the tools to help see our projects through. I would like to give a shout out to all of those sponsors and vendors that participated during the vendor fair. Whenever I swing through the exhibit hall, I am always excited to hear what services that Sheboygan utilized and some successes that they have had. 

I also want to thank the outgoing League Board President Tammy Bockhorst on a great year with her at the helm. Tammy’s leadership will be missed, but I know that she will continue to be a strong municipal leader for years to come. I also want to congratulate Mayor Zach Vruwink on becoming the new League Board President. As another young elected official, it is inspiring to see another young leader that is passionate about his hometown and Wisconsin. I know that Zach will do a wonderful job as the new Board President. 

It was great to have Mayor Karen Freeman-Wilson from Gary Indiana speak during the business meeting. Mayor Freeman-Wilson also serves as the President of the National League of Cities. She reminded all of us about the importance to love our communities and how fostering positive civic engagement is vital for our future. I know that we all love our communities and strive everyday to show off the hidden jewels that our communities have.

We are just getting started, and I know that the rest of the conference will be just as great and invigorating. 

Ryan Sorenson – Sheboygan City Council

Who is ready for #LWM2019

Hi everyone, I’m Ryan Sorenson. I am on the Sheboygan City Council. Jerry is letting me take over his blog for the next few days so I can share my perspective and thoughts about the upcoming League of Municipalities Conference. This will be the best and biggest conference so far. I hope that you are just as excited as I am!

I think it is very fitting that we are having the conference in Green Bay this year. So far the Packers are rocking, and finally have a defense! They also will hopefully continue to hold their 1^st place status for the NFC North. Don’t get me wrong the Packer still have room for improvement, just like all of us. It is even more exciting that LeRoy Butler will be our closing speaker. LeRoy was the original Lambeau Leaper. Having LeRoy is only just one of the exciting things that will be at this year’s conference. This year at the conference there will be big trucks in the exhibit hall, ethics expert Michael Gillette will be back, and of course there will be many engaging breakout sessions.

Attending the annual conference is always invigorating and helpful for me. There is always so much that I learn when I attend the conference. When I leave the conference I feel like I have added more tools in my tool belt, which makes me a better local leader. When we all have the tools and learn new ideas, we are able to make all our communities a better place.

I am looking forward to meeting and connecting with many of you. If you see me, please stop by and say hi!

-Ryan

Bonus round for potholes!

Wisconsin’s long road back to a well-maintained transportation system has begun. Yesterday the Wisconsin Department of Transportation announced the details of a one-time grant competition to invest $75 million repairing, rebuilding and/or upgrading Wisconsin’s local roads, bridges, bike trails and transit systems. The grant program is one part of a state transportation budget that acknowledged the need to beef up our transportation system, especially (but not exclusively) the local part of our system.

The League has a simple message for Wisconsin’s cities and villages: APPLY! Come on, you know you have a road that’s long overdue for reconstruction, a bus stop that should have been bulldozed years ago, or a pedestrian trail nobody uses because it has more weeds, mud puddles and broken concrete than it has walkers. This is their chance; it’s the bonus round! As they say on the commercial: “Send it in!”

I give Transportation Secretary Craig Thompson, Governor Tony Evers and the Wisconsin Legislature a serious “tip of the hat” on this one. It’s flexible, it’s responsive and it lets YOU at the LOCAL level make the call. Projects can be everything from “shovel ready” (can we hate that term yet??) to a gleam in your Public Works Director’s eye. As long as the project can be completed within six years, it’s eligible. Minimum project size is $250,000, and the maximum size is $3.5 million. You must have something that fits in between those two numbers. Every city and village does.

We won’t regurgitate all of the rules and regulations here; you can read them at the WisDOT’s web site. Just remember the deadline: December 6.

We also have a request: Send us pictures. The League would love to see the critical projects that our members want to work on. Send us an ugly “before” picture.

Potholes, your days are numbered.

 

A life or death conversation

One of my mentors is Clarence Anthony, the Executive Director of the National League of Cities. A week ago, Clarence posted this item as he reflected on the most recent round of pointless and tragic mass shootings. Like many of us, Clarence is struggling to understand why these things happen. But like many of us in the arena of local government, he asks an even more important and immediate question: What’s our role? What’s our role in response to tragedies such as those that have occurred in El Paso, Dayton, and Oak Creek? What’s our role in averting and avoiding these acts of deadly outrage? What’s our role as citizens?

Democracy in America is not a spectator sport. It is nothing more and nothing less than  every one of us acting together for the common good. What’s the role of democracy in the face of domestic terrorism? This will be a difficult conversation. It may be a painful conversation. But it’s a conversation we need to have if we are ever going to find a solution to this violence.

To quote Clarence Anthony: No more, no more, no more.

212 Roads to Somewhere

The Wisconsin Legislature is deciding this spring whether or not to delay main street in 212 Wisconsin Cities, Villages and Towns. There are 212 state highway rehabilitation projects included in a $320 million state highway rehabilitation program budget request. The request is being considered this month by the Legislature’s Joint Committee on Finance. Each of those projects is a vital piece of a community’s economic success. We hope the vote is “Green” for go.

We admit that the “State Highway Rehabilitation Program” is a name only a bureaucratic mother could love. And $320 million is a lot of money, even within a multi-billion dollar state budget. What’s the connection to downtown Wisconsin? It’s not local transportation aids. Why should we care?

We do care, because all roads in Wisconsin lead somewhere. For example, one of those 212 projects would resurface Highway 172 in the Green Bay Area; the highway that leads to the Brown County Airport. Another project would replace a critical bridge on Highways 59 and 18 in the City of Waukesha. One more resurfaces the road that runs through the Village of Athens in Marathon County. Project after project affects city after city, village after village and town after town. It’s all connected; connected to you and I.

State highways are the links between Wisconsin’s 602 cities and villages; they are also often the main thoroughfares through those communities. They carry farm products, manufacturing equipment, school buses, ambulances and the tens of thousands of family vehicles traveling back and forth every day. Without a quality network of these roads linking local roads and the highway system, it gets harder to get to work, to get to school, and to get emergency services to people who need them.

A few days ago, the Wisconsin DOT released the list of road rehabilitation projects that would be delayed or deferred (deferred is bureaucratic word that means something worse than delayed) if we cannot find consensus on how to pay for them. Take a look at the list; it’s long but organized by county. Chances are you’ll find a road that you drive on listed there. Think about that particular stretch of road. What happens to your village if that project doesn’t get done next year; or the year after; or maybe just doesn’t get done? Whose job is affected; whose school is affected; which ambulance has to be rerouted?

Think about that. Then call your area legislator. It’s all connected.

Another Dark Store Attempt Fails

Once again, the traveling troupe of Dark Store tax attorneys and appraisers-for-hire has failed to persuade a local judge. On April 4, 2019, Portage County Circuit Judge Thomas Flugaur dismissed a national chain store’s attempt to have its property tax bill cut in half. Lowe’s Home Centers, LLC claimed that the Village of Plover was charging them property taxes based on twice the actual value of their property. Judge Flugaur wouldn’t bite. The Judge’s decision is here.

Although the village “won” this case, it wasn’t free nor was it easy. It cost the village more than $80,000 to hire the expert attorneys and appraisal specialists that were needed to win a four-day trial. As with other Wisconsin Dark Store challenges, the cost of defending the assessment plays a practical and significant role in deciding whether or not to negotiate a settlement. Many times the municipality chooses to settle, rather than incur the cost and risk of a trial. Other Dark Store appeals have cost even more than Plover’s to defend against.

The Plover case played out similarly to other Dark Store road show performances. The property owner offered up a smorgasbord of vacant, boarded-up properties as “comparables,” including one former department store that had been vacant for four years. The Village countered that the property in question was in the middle of a popular shopping district that had a very low vacancy rate; by no means was it comparable to a dark property. In the end, the judge decreed that none of the properties offered by the paid experts were truly comparable. Under Wisconsin law, that finding next leads to an assessment of the cost of the property; what it would cost to build a comparable store.

Under the cost approach, it seemed that the two sides were in agreement. The Village’s cost-approach figure was $8.5 million; the property owner’s expert came up with $8.9 million. (Both figures exceed the building’s actual assessment value.) But then, the property owner’s hired expert took his estimate one step further, claiming that the property had to be devalued by 50% due to “functional depreciation” of the property. The judge tossed that discount out, pointing out that the $8.5 million and $8.9 million figures both already accounted for depreciation. (The Lowe’s building has been standing for 10 years.)

In his decision, Judge Flugaur repeatedly quoted from the Wisconsin Property Assessment Manual, which states, among other things, that “The assessor should avoid using sales of improved properties that are vacant (‘dark’) or distressed as comparable sales unless the subject property is similarly dark or distressed.” So, once again, despite a local tax assessment that was done “by the book,” treating the property owner fairly, a major retailer sued the village, forcing it to incur tens of thousands of dollars to defend other taxpayers from a tax shift. On behalf of taxpayers in Plover and dozens of other cities, villages and towns that are under similar assault, we respectfully but urgently ask that the Wisconsin Legislature take up and pass the Dark Store legislation to make it clear once and for all that the Dark Store Road Show is over.

Wisconsin is Over-Reliant on the Property Tax

This week’s Local Perspective blog post is by Sharon Eveland, City Administrator, City of Clintonville

If you ask someone in my community what they think about their local government, one of the first things they will likely say is “our property taxes are too high” and they would be right. When I first moved here from Georgia, I was shocked by how high property taxes were here, and by here, I mean all over the state.  The house I currently live in is assessed at about $10,000 higher than the house I owned in Georgia and yet my property tax is twice as high!  I got curious and started looking in to why that might be and I quickly realized how local governments in Wisconsin are forced to rely almost exclusively on the property tax for raising revenue.  Well of course our property taxes are high! When you throw in the fact that the second largest portion of many municipalities’ revenue is state aid and consider that municipalities have no control over that revenue stream, it’s a recipe for disaster.  If the State decides to decrease what it gives us, we are left with one of two options: reduce services or increase our property tax levy.

And let’s be clear.  Increasing our levy is not as easy as it sounds because the State restricts our ability to do that as well.  Under current State law, we can only increase our levy be the rate at which we experience new development, specifically our net new construction rate.  What this means is that if you are a municipality that doesn’t experience growth, as is the case in Clintonville, you cannot increase your levy unless you meet one of the allowance requirements.  The most common of those allowances is for debt, which allows a municipality to increase its levy by the amount it needs for its debt payment.  Seems legit, right?  Wrong.  What this structure has done is forced municipalities to rely on borrowing for its major capital projects, rather than levy for them year to year.  As Appleton Mayor Tim Hanna has said, “Levy limits are making us debt junkies.”  It’s great for the banks and investors, but not so much for the taxpayers.  We are making future generations pay for the purchases of today, and even worse, making them pay more for it because of interest.  And to cap it all off, the State limits a municipality’s ability to borrow by restricting its debt capacity to five percent of its assessed value.  For the City of Clintonville, that’s roughly $10 million and we are currently at approximately $6 million.  Now, I want our taxpayers to know that the Council is firmly committed to reducing its debt and we have been working very hard to secure grant funds and find creative ways to make do with what we have, but it is a long process and one that is constrained in many ways by the State.

Recently, the Wisconsin Policy Forum, a non-profit engaged in nonpartisan, independent research on fiscal and policy issues affecting governments in Wisconsin, issued a report called Dollars and Sense: Is it time for a new municipal financing framework in Wisconsin?, which was funded by the League of Wisconsin Municipalities, Wisconsin REALTORS Association, and Greater Milwaukee Committee, to look at Wisconsin’s reliance on the property tax and whether a different revenue generation structure was needed.  The report found that of the twelve states in the Midwest region, Wisconsin had the highest reliance on the property tax of all twelve states and was ranked seventh nationally.  Wisconsin also has the lowest sales tax average of all twelve Midwest region states.  In Georgia, I lived in a county with a sales tax rate of 8% and according to the Georgia Department of Revenue, only two counties in the entire state have a rate of less than 7% as of April 1, 2019 and a couple were just shy of 9%.  The State sales and use tax is only 4%, meaning anything above that stayed in the county where the purchase was made and is apportioned between the municipalities and the county government based on an agreed upon formula.  So the money stayed where it was spent.  More importantly, the residents have to vote to approve these sale tax increases so it’s not forced upon them.  In addition, the sales tax is able to help offset the cost providing services to visitors and commuters who do not reside in a particular municipality but utilizes its services.

On average, Wisconsin municipalities receive about 42% of their revenue from the property tax and in Georgia it’s about 27%.  This is why my property tax bill in Georgia was significantly less than my tax bill here for a home of roughly the same assessed value.  While some would argue that the State should just increase its state aid, which, by the way, when it was originally implemented was supposed to have 90% disbursement to local governments, I don’t believe that’s the right move.  Yes, I think there should be more distribution to local governments but I don’t want Clintonville to be any more reliant on the what the State decides to dole out than it has to be.  And just like an investment advisor would say, we need to diversify.  Municipalities and county governments shouldn’t be forced to put all their eggs in one proverbial basket.  The voters should have a say and by not even allowing that option, the State is telling the people it doesn’t matter if you want this, we’re not going to let you decide for yourselves.

Waupaca County, which has the half percent sales tax, collected a little more than $3.7 million in sales tax revenue in 2018 and has averaged $3.5 million over the last five years.  Just half a percent!  Assuming the sales tax revenue trends here continue, an 8% sales tax would generate about $22 million a year.  I’m not saying we should jump straight to that rate but I think it’s important to understand the potential financial benefit that could be derived from a sales tax, which could include property tax relief.  The total 2018 tax rate for a parcel in Clintonville is $27.13 and the City’s portion of that is $10.08, but we’re not alone.  What we are doing to raise revenue at the local level clearly isn’t working and we can’t continue.  Wouldn’t it be nice if we could finally find a way forward that doesn’t put so much emphasis on the property tax and puts more control in the hands of the voters?

 

Sharon Eveland
Clintonville City Administrator

Budgeting in Eden is No Paradise

Imagine being faced with a $460,000 tab for street repairs knowing your tax levy will total just $34,000? Welcome to budgeting in the Village of Eden.

Wisconsin’s small villages are often caught in this financial trap, with levy limits on one side and old infrastructure on the other. Communities that for years prided themselves on keeping property taxes low now find that when it’s time to replace main street or a sewer main, the levy limit law is a barrier. The only way around the barrier is to borrow money; effectively putting today’s problems in the laps of tomorrow’s residents.

The Village of Eden is a small community just Southeast of Fond du Lac with a population of around 900. According to Census bureau estimates, it’s growing, which is unusual for a small village in rural Wisconsin. In fact, the village’s slogan is “A place to grow.” Unfortunately, that “growth” doesn’t extend to the village budget. Under Wisconsin levy limits, Eden will see an allowable levy increase in 2019 of zero. According to the Wisconsin Department of Revenue, Eden’s “net new construction” growth in 2018 was a negative 0.26-percent, meaning it would not be allowed to increase its tax levy in 2019. The village will rely on borrowing and a small wheel tax for any funding increases. Efforts to attract grants have failed, due in significant part to the village’s small population.

Unfortunately for Eden, costs will not remain at zero. The state is rebuilding Highway 45 and village must pay $460,000 for its share of the work (Highway 45 is one of Eden’s main streets). In addition, for the past two years, Eden has been forced to borrow money to operate. The village has over $1.7 million in outstanding debt and will be required to pay for the replacement of a seventy-year-old water main. There is no money to pay for new hiring or other costs. The village’s sole computer was ten years old before it finally acted up once too often and had to be replaced.

Eden is a typical small Wisconsin community. It serves an area that is primarily agricultural, with some suburban influences owing to the short 20-minute drive to Fond du Lac or 30-minute drive to West Bend. You can rent the village park for a family reunion and the village president has been known to shovel sidewalks in the winter when needed. It embodies the values that Wisconsin points to with pride: small town, strong work ethic, conservative when it comes to spending. But there are limits.

In a report submitted to the League and posted on our website, the village pleads with state policy makers to, “PLEASE FIND A WAY TO HELP THE SMALL COMMUNITIES THAT HAVE BEEN TRYING TO KEEP TAXES LOW.”