MONROE — Aldermen granted the extension of two tax increment finance districts for another year during their meeting Monday as part of the ongoing mission of the Redevelopment Authority to support housing and property upgrades within the city.
Alderman Michael Boyce, who serves as a member of the RDA, outlined the group’s plans during the Monroe Common Council meeting.
“The RDA is piggybacking on goals identified in the comprehensive plan, the housing study and TID 7,” Boyce said. “We’re looking to use the funding for additional amounts to borrow to avoid bonding.”
The extension of life for both Tax Increment Finance District No. 4 and 5 allows for roughly $335,000 from each to be allocated toward funding RDA projects.
A TID or TIF is a zone designated by a municipality, but regulated by state law, which allows the city to use tax funding within that particular district to address infrastructure needs, encourage development by businesses or incentivize redevelopment projects. The designation is measured by a “but for” financing tool, which means that were it not for the TID funding, the projects would not be feasible. There are different types of TIDs depending on how projects are funded. Investment in tax increment can mean a higher tax base for the municipality. It can also bolster area job growth; both are reasons municipalities utilize TIDs.
City Administrator Phil Rath said the RDA has not yet established any programs. Per a change in state law in recent years, the funding can be implemented for housing needs outside of the designated TID if the use meets lawful requirements.
State statute 66.1105(6)(g)3 requires that “the city shall use at least 75 percent of the increments received to benefit affordable housing in the city. The remaining portion of the increments shall be used by the city to improve the city’s housing stock.”
Rath said TID laws prohibit the city from spending funds gathered by tax increment in the final five years of the life of a district.
The majority of funding must be used for affordable housing containing households with costs of 30 percent or less of their gross monthly income. The RDA can apply the funding to any properties within its recently established RDA District 1 or other areas it may outline in the future, Rath said.
During the meeting Monday, Alderman Jeff Newcomer asked whether any incoming housing projects were planned. Though Rath said there were none, Newcomer remained positive, noting the funding allocation could help the city avoid repeated rejection of proposed housing projects.
“I hope this is a way we can get over that hurdle,” Newcomer said.
Boyce noted he was hopeful projects “would come along” and that the RDA is “working toward making this happen” as a way to provide grants or loans with 2 percent interest to city residents, and people interested in moving to the city, for upgrades. The loans can be used for creating home systems, increasing efficiency or space upgrades, according to the resolution.
The approval of the resolutions by six members of the nine member council is one of the steps required by Wisconsin Statute 66.1105(6)(g), which outlines how a municipality can extend the life of a TID after it “pays off the aggregate of all of its project costs.” The city must adopt a resolution to extend the life of the TID, specifying the number of months. For Monroe, it’s 12. Each resolution states that the TIDs can be closed earlier if the city decides to do so. Staff now have to forward a copy of the resolutions to the state Department of Revenue to continue authorization of allocating tax increments to the district.
Aldermen Mickey Beam, Rob Schilt, Ron Marsh, Donna Douglas, Newcomer and Boyce voted in favor of the resolution. Council members Richard Thoman, Brooke Bauman and Chris Beer were absent.