Webster Board rescinds tainted TIF

Russ Burford outlined his TIF concerns.  

A tax increment financing district (TIF) that had been tentatively approved several weeks ago, was instead rescinded by the Webster Village Board last week during a special board meeting, after several questionable issues were raised by a concerned citizen.

The Webster board held a special meeting on Wednesday, Oct, 27, where the sole purpose was to hear from the public on whether to reconsider the vote approving TIF district #3, and also to withdraw the application to the Wisconsin Department of Revenue (DOR), after a number of questions were raised on the procedure and reasoning behind the establishment of the new TIF district, which would also overlay the previous Webster TIF district,’ meaning it owes more than it has returned in increased property values.

Webster resident Russ Burford has been before the board several times in the last two months, outlining questions he has not only on the need or reason for the new TIF, but also on the process from which it was borne.

“I went through 46 months of (village board) meeting minutes, with nothing about a TIF district,” Burford told the board, where he also cited the lack of detailed discussion or even mentions of the establishment of the new TIF, stating he was searching to “(Find) the rationale for how TIF #3 came about.”

Burford cited several passages in meeting minutes where the TIF was referenced, but mainly only in the last few months as it was actually proposed, including where it was mentioned that by meeting a Sept. 30, 2021 state DOR deadline to establish the new TIF, improvements to the proposed district could be captured and included in the ‘base value’ of the new district. Burford contended that the process was hurried along without proper public review, suggesting that the issue was discussed and planned without full committee review or investigation into the ramifications and potential financial impacts. He said the proposed maps, boundaries and project plan were created by MSA Engineering prior to a meeting where the TIF was first discussed. 

“The sole purpose was to meet the Sept. 30 deadline (by the DOR),” Burford exclaimed, suggesting that the TIF project plan was either made by MSA or by the board “in the back room.”

The suggestion that the TIF creation was a “back room deal” did not sit well with the board or village president Jeff Roberts, who said he knew about the financial impacts of the overlay on TIF #2, and said that while he was solely responsible for the early discussions, it was purely to take advantage of the extension of the Webster Main Street to the west, and expanding Smith Pines for development, that it might be a good time to create a new TIF, so they can fully utilize the process for ‘looping’ the water and upgrading roads and utilities, as the situation had changed with several parcels downtown, allowing for the long-discussed street extension.    

Burford suggested that the process was hurried along, without full discussion on the impacts or need.

He also said it was unwise for the village to take on another ‘risky’ TIF, when they were already saddled with more than a half-million dollars in outstanding debt from TIF #2, which still has five years of life left, but cannot have any TIF #3 value increases transferred.   

“Speed and cutting corners seems to be the only thing that the board and MSA considered,” Burford stated, noting conversations he had with state DOR representatives on the issue, and how he encouraged the board to rescind their previous action to create TIF #3, and to open the debate on how to resolve the outstanding TIF #2 debt before moving forward with any new projects. “What are the remedies for failing TIF (districts)? What works?” 

According to the DOR, TIF # 2 has over a $534,000 deficit, which would not transfer to the new TIF district, even with the overlay. 

Burford did give credit to village trustees Tim Maloney and Aaron Sears, who did not vote to support the new TIF #3, but he also implied that the trustees, Roberts or MSA had conspired to hustle the new TIF ahead, under the radar or away from public scrutiny.

Trustee Bill Summer objected loudly to the implication and noted that there was no ‘cloak and dagger’ action behind the creation process. 

“You are accusing us of nefarious acts,” Summer said with a loud sigh and a shake of his head. “It’s not that, at all.”

“There is no public record,” Burford said flatly in response, several times during the exchange. “There is no public record.”

“Okay, you’ve very well made your point,” village president Jeff Roberts responded, trying to defuse the implication and explaining that he had conversations with MSA about the project a number of times, and that he also talked with the League of Municipalities, who suggested the village board rescind the TIF #3 proposal and application to the DOR with the issues.

Roberts also noted that Burford was correct in saying that the TIF #2 issue would need to be addressed, and that there is ‘financial risks’ for ‘freezing’ TIF #2 with the creation of a new TIF.

“That’s correct,” Roberts repeated, while also pushing to rescind the new TIF. “The increments in TIF #2 will go to TIF #2.”

Roberts read the proposed resolution to rescind, which the board voted unanimously to accept, stopping the new TIF in its track at no cost to the village, as it had not been officially filed, certified or accepted with the DOR, with no increment collected and no money spent, including that MSA had not charged the creation fee and maintenance fee of $13,500, which was discussed but had not been allocated.

“There’s no cost (to the village),” Roberts said. “None at this point.”

After the vote and adjournment, Roberts had several comments on the issue.

“Just for the record, there was no ‘backroom’ dealings,” Roberts said with a nod. “It was Dave (Rasmussen of MSA) and I discussing this, and the plan was brought to the board.” 

Roberts admitted it did not go through the typical chain of command and committee system for review before the full board discussions, but he rebuked any implication of nefarious activities, and noted that neither he nor any of the board members would have stood to benefit, in any way sharp or form from the creation of TIF #3, that it was purely a tool to help advance village development and pass the costs down over the years.

Roberts also said that they decided to rescind the TIF due to the possibility of a legal challenge, and that again, nobody on the board was going to make any money off the deal.

“Truthfully, I have nothing to gain,” Roberts said, stating that he knew TIF #2 was troubled, but he was hoping that in the half dozen years of life it still had, there was possibly a way to get out of the hole. “There is building going on out there, and maybe we can reduce it (the debt) … But it’s okay. It’s all okay.”