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By LeAnn R. Ralph
COLFAX — The Village of Colfax’s Tax Increment Finance Districts 3 and 4 “are in very good shape” and are fulfilling their intended purpose of supporting development in the village.
TID 3 is able to repay three different debts, with $120,000 payments per year, by receiving revenue from TID 4, and TID 4 breaks even, said Sean Lentz of Ehlers Inc., the village’s financial consultant, at a meeting of the Joint Review Board for the TIF districts on November 9.
State law requires municipalities with TIF districts to hold an annual meeting with representatives from the village, the technical college district, the school district and the county, which are the entities affected by the property tax increment for new construction being placed into a special fund instead of being paid to the taxing authority.
Money in the special fund is used for expenses associated with the TIF district that are necessary to support new development, such as sewer and water service or street improvements.
When the TIF districts are closed out, the school district, the county, the technical college district and the municipality each receive their share of the money that is left over in the TIF district fund.
Members of the Joint Review Board who attended the meeting were Scott Gunnufson, village president and representative for the village; David Bartlett, chair of the Dunn County Board and the representative for the county; Dan Lytle, business development and campus manager for Chippewa Valley Technical College; William C. Yingst Jr., school district administrator and representative for the Colfax school district; and Mike Buchner, representative for the public.
TID 3 was created in 2002 with a termination date in 2029, and TID 4 was created in 2006 with a termination date in 2026.
After what seemed like a long dry spell, new development appears to be on the horizon for Colfax.
The former nursing home property on High Street was divided into three lots and sold at auction, Gunnufson said.
The nursing home building is one parcel, and two other parcels were created, one with access on High Street and one with access on University Avenue.
A developer is planning to build two duplexes on the parcel with access from High Street, and another developer is planning a multiplex development, with either four or eight apartments, on the parcel with access from University Avenue, Gunnufson said.
Another developer is planning to build a model home on Lot 5 of the East View residential development on Dunn Street, with the goal of building five houses on five lots within three years, he said, noting that the developer hopes to break ground in two or three weeks and to build the model house this winter.
Yet another developer is hoping to build a 32-unit apartment complex on a parcel located at 107 Dunn Street, Gunnufson said.
The new developments will generate tax revenue for the village and will help add families with children to help increase enrollment at the school district, he said.
The proposed developments on High Street and University Avenue are not in either of the village’s TIF districts, said Lynn Niggemann, village administrator-clerk-treasurer.
Yingst, who was nominated by the Joint Review Board to chair the meeting, commended the village board for supporting development, which could potentially add students to the school district.
School districts in Wisconsin, especially in rural areas, have been experiencing declining enrollment over the past 10 to 20 years.
The amount of state aid received by a school district is determined by the number of students who are enrolled.
If the two TIF districts maintain the status quo, TID 3 will be able to pay the outstanding debt in 2023, and then the district can be closed out, with an expenditure deadline in 2024, or the TIF district can be kept open another year with money put toward affordable housing, Lentz said.
TID 4 is transferring revenue to TID 3, and it also will be refunding part of the taxes paid by Timber Technologies on the company’s new addition, he said.
The agreement with Timber Tech is a $17,000 per year payment, for a total of $100,000. The property value will increase from $1.2 million to $1.9 million, Lentz said.
When Timber Technologies has been paid according to the agreement with the company, then TID 4 can close, he said, adding that both TIF districts are on schedule to pay their expenses.
Gunnufson asked about the feasibility of creating another TIF district to help the developments that are being proposed.
With the short amount of time left for TID 3 and TID 4, the village would not be able to accomplish what would be needed to assist new developments, so the village would have to create a new TIF, Lentz said.
To start a new TIF district, Colfax would have to pass the 12 percent test on the percentage of property value in the district as compared the village’s property value, he said.
Colfax is under 12 percent, and a new TIF district would be best for the projects that are coming up, Lentz said.
The Joint Review Board unanimously approved a resolution acknowledging the filing of the annual report for Colfax’s TIF districts and compliance with the annual meeting requirement.
For 2019, TID 3 had total revenues of $106,408 and total expenditures of $115,032, with a fund balance of $163,408 at the end of the year.
Future revenue for TID 3 is projected at $956,508 with a projected surplus of $753,460.
For 2019, TID 4 had total revenue of $35,839 and total expenditures of $30,107, with a fund balance of $15,246 at the end of the year.
Future revenue for TID 4 is projected at $281,515 with a projected surplus of $15,246.