MONROE - A crucial piece in purchasing 98 acres of land north of Monroe along Wisconsin 81 and County N was approved by Common Council members Tuesday: how to fund it.
Discussion mainly focused on the method to purchase the land with available city funds, which would be replenished through a long-term borrowing option. If used without replacement, the city's credit rating would likely be negatively affected by the drop below 25 percent of cash on hand, which City Administrator Phil Rath said could impact the amount the municipality is paying on its current loans.
Alderwoman Brooke Bauman noted during a meeting of the Finance and Taxation Committee on Monday that if the money were depleted by the $1.85 million purchase, the city would have limited funds in the event of a natural disaster.
"I think it's a huge risk to reduce it by that much," Bauman said. "You need to have some funds on hand to make sure there's enough to deal with any issue."
Rath had remarked in the meeting that the leftover funds would be enough to cover an emergency at least until a long-term financing solution could be organized. He added he would not recommend lowering city funds beyond the land purchase.
The resolution council members were considering was a recommendation from the committee to authorize city staff to first use city money to purchase the parcel from Dolan Family Farms LLC before researching and identifying the most cost-effective method for long-term financing. Options include a local bank loan or bonding over a 20-year term.
Joel Hedeman of First Weber Realty in Monroe attended the council meeting Tuesday. As the broker of the two-year land deal, Hedeman said he witnessed the hard work put into the project and the positive impact the addition could have for the city, especially crediting former Assistant City Administrator Martin Shanks, Rath and Mike Johnson, former executive director of the Green County Development Corporation, as imperative to the process.
"They saw what it could be," Hedeman said. "It's a need. That piece of land right there just seemed to be a perfect fit. The timing was right. It's a great investment for the city."
He added that the sale price was 50 cents to the dollar of any other offer the city had received when looking for land to purchase. The city bought the land for $18,785 per acre. Hedeman declined to comment on which businesses had contacted him about the land but said there have been three specific entities seriously interested, some for 3 to 5 acres, others up to 30 acres.
Members of the Joint Review Board considered on Tuesday the proposed Tax Increment District 9, which would encourage developers to purchase portions of the parcel. Green County representative Sherri Hawkins, Ron Olson of the Monroe school district, Renea Ranguette of Blackhawk Technical College, public member Carol Stamm and Rath unanimously approved it.
Council member Charles Koch erred on the cautious side during discussion among the aldermen. He pointed to wildfires and hurricanes as examples of how easily, and how quickly, a municipality can lose tax revenue. He said he would only support the resolution if it included language that the city would begin a long-term financing option by the end of 2017.
Alderman Michael Boyce, who said he was "not a fan of the project to begin with," thought TID 9 would be a better option for recovering city funds used to purchase the land.
"To me, the 25 percent rule is killing us," Boyce said. "We're not utilizing the cash that we have the best way we could. The proposed methods increase the cost of an already expensive project."
Koch suggested an amendment to the resolution to include language requiring city staff secure a financing option by Dec. 31, stemming from discussion at the committee meeting that it should be a quick transition to ensure the city credit goes unaffected. Aldermen Jeff Newcomer, Richard Thoman, Rob Schilt, Tom Miller, Bauman, Koch and Beer voted to add the language. Ron Marsh and Boyce voted against it.
The same 7-2 vote transpired when council members voted to pay for the project with city funds to be replaced with long-term financing by the end of the year.
The closing date on the purchase of the Dolan Property is Oct. 31.
Discussion mainly focused on the method to purchase the land with available city funds, which would be replenished through a long-term borrowing option. If used without replacement, the city's credit rating would likely be negatively affected by the drop below 25 percent of cash on hand, which City Administrator Phil Rath said could impact the amount the municipality is paying on its current loans.
Alderwoman Brooke Bauman noted during a meeting of the Finance and Taxation Committee on Monday that if the money were depleted by the $1.85 million purchase, the city would have limited funds in the event of a natural disaster.
"I think it's a huge risk to reduce it by that much," Bauman said. "You need to have some funds on hand to make sure there's enough to deal with any issue."
Rath had remarked in the meeting that the leftover funds would be enough to cover an emergency at least until a long-term financing solution could be organized. He added he would not recommend lowering city funds beyond the land purchase.
The resolution council members were considering was a recommendation from the committee to authorize city staff to first use city money to purchase the parcel from Dolan Family Farms LLC before researching and identifying the most cost-effective method for long-term financing. Options include a local bank loan or bonding over a 20-year term.
Joel Hedeman of First Weber Realty in Monroe attended the council meeting Tuesday. As the broker of the two-year land deal, Hedeman said he witnessed the hard work put into the project and the positive impact the addition could have for the city, especially crediting former Assistant City Administrator Martin Shanks, Rath and Mike Johnson, former executive director of the Green County Development Corporation, as imperative to the process.
"They saw what it could be," Hedeman said. "It's a need. That piece of land right there just seemed to be a perfect fit. The timing was right. It's a great investment for the city."
He added that the sale price was 50 cents to the dollar of any other offer the city had received when looking for land to purchase. The city bought the land for $18,785 per acre. Hedeman declined to comment on which businesses had contacted him about the land but said there have been three specific entities seriously interested, some for 3 to 5 acres, others up to 30 acres.
Members of the Joint Review Board considered on Tuesday the proposed Tax Increment District 9, which would encourage developers to purchase portions of the parcel. Green County representative Sherri Hawkins, Ron Olson of the Monroe school district, Renea Ranguette of Blackhawk Technical College, public member Carol Stamm and Rath unanimously approved it.
Council member Charles Koch erred on the cautious side during discussion among the aldermen. He pointed to wildfires and hurricanes as examples of how easily, and how quickly, a municipality can lose tax revenue. He said he would only support the resolution if it included language that the city would begin a long-term financing option by the end of 2017.
Alderman Michael Boyce, who said he was "not a fan of the project to begin with," thought TID 9 would be a better option for recovering city funds used to purchase the land.
"To me, the 25 percent rule is killing us," Boyce said. "We're not utilizing the cash that we have the best way we could. The proposed methods increase the cost of an already expensive project."
Koch suggested an amendment to the resolution to include language requiring city staff secure a financing option by Dec. 31, stemming from discussion at the committee meeting that it should be a quick transition to ensure the city credit goes unaffected. Aldermen Jeff Newcomer, Richard Thoman, Rob Schilt, Tom Miller, Bauman, Koch and Beer voted to add the language. Ron Marsh and Boyce voted against it.
The same 7-2 vote transpired when council members voted to pay for the project with city funds to be replaced with long-term financing by the end of the year.
The closing date on the purchase of the Dolan Property is Oct. 31.