Public hearing on Paddock Lake TIF district is Monday

In this map of the west side of Paddock Lake, the proposed TIF district boundaries are shaded blue.

A public hearing on creating a tax incremental financing district that would allow Paddock Lake to complete the water system it started on the village’s west side will take place Monday, June 4 at 7 p.m. at Village Hall, 6969 236th Ave., Paddock Lake.

The Wisconsin Department of Revenue defines a TIF as:

When a TIF district is created the aggregate equalized value of taxable and certain municipal owned property is established by the Department of Revenue (DOR). This is called the Tax Incremental Base. The municipality then installs public improvements and property values grow. Taxes paid on the increased value are used to pay for projects undertaken by the municipality. This is the Tax Increment. It is based on the increased values in the TID and levies of all the taxing jurisdictions that share the tax base. The municipality, county, school districts, and other taxing jurisdictions do not benefit from taxes collected on value increases in the district until project costs have been recovered. After that, the added value is included in the apportionment process and everyone gains.

The village sees the TIF as a better alternative of raising the $4,790,000 to finish the water system than raising taxes on village property owners, said Tim Popanda, village administrator.

“Having municipal water will encourage development in the western part of the village,” Popanda said.

Once upon a time, the water system was going to be paid for differently. With about 700 new single family homes proposed for the village in 2005, the village decided to proceed with a municipal water system that was going to be paid for by residential developers — and ultimately the people who bought lots in those subdivisions. Plans were made and wells were dug.

But then the development dried up and by 2007, the developers of the stalled subdivisions were slowing and then stopping their payments on their special assessments for the water system.

Up to now, the village has been able to make payments on its financing for the project with the money that has been received from the developers. But in about three years a larger payment would  be due and that would likely necessitate transferring the burden to taxpayers, Popanda said.

The TIF could prevent that scenario. Even with commercial development that has taken place in the TIF this year — a business expansion and two build outs of existing commercial space — the increment over 20 years should be enough to almost pay the cost for completing the system, substantially reducing if not eliminating the burden to taxpayers, Popanda said.

At this point, the village is looking to proceed only with one of three phases of work on the water system. Phase one would include:

  • A water pumping building.
  • An iron removal device.
  • Pumps in the west side wells.
  • A trunk line along Highway 50 to connect with the east side water system.

Additional phases would be considered if development in the district makes it financially feasible, Popanda said.

The village has about $600,000 from special assessments that were made in an account to also apply toward the project. In addition, the creation of the TIF would not excuse the special assessments — which now lie with banks that own the foreclosed properties  — but could give the village some new flexibility to lengthen the time in which they could be paid.

Popanda also wanted to stress that if the TIF goes through and the west side water system is completed no existing residence on a private well will be compelled to connect to the system. In fact in most cases that would not even be possible.


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