There were three amendments in the capital budget regarding TIF – the discussion is 20 – 25 minutes long.
AMENDMENT 14
Bridget Maniaci says there are two amendments and she is trying to cover the bases because she doesn’t know where the policy discussion on TIF and TIF financing is going to go . . .
Michael May is going around the table handing out pieces of paper. The Mayor says the City Attorney is serving them all notice of the meeting, its so convenient that they are all there – its the notice of the special council meeting for the bargaining agreements. Larry Palm notes it includes contracts for the Attorneys Association as well.
Maniaci says that there was a lengthy discussion on the question and comment period, she doesn’t know where we are going on policy. What she is trying to do is to say we have to have something at the table. She says $5M is nearly enough money on a citywide basis, if that is the direction we are heading in. If that is not the direction we are heading in, there is very real implications for the Capitol Gateway Corridor. Apparently because staff chose to go to a city wide level, there is nothing in the budget for that. We put out and coming back to the council in October is the new RFP process for the 800 block, I’m sure Aaron (Olver) can speak to the good information we have about that block and the cost estimates to move forward. The RFP process they are slating to get done in February so they can have a project through the approval process and hit the timeframe window of the summer of 2014. There are other projects in the district that have development in hand and I’m sitting here trying to . . .
Larry Palm – point of order.
Maniaici, yeah, I’m speaking to number 14.
Palm says this is the $12M.
Mayor asks her to continue and apologizes for the rude interruption . . . lots of laughter. Jokes with Larry. These were in late and not everyone even has the amendments – same mistake I made with my blog.
Maniaci says that there are some, on the whole, finance committee members . . . still lots of motions around the table and interruptions. Mayor laughs but apologizes because its a little chaotic.
Maniaci says on the whole they need to get their act together and figure out what they are going to do with TIF for development projects in the pipeline moving forward. Part of her says if they go in a citywide determination, that is a policy determination, she was tempted to put in a budget with an infinity sign. If we are moving in that direction then the amendment number 16 would increase the city wide figure by $5M. That means for the 800 block of E Washington Ave, that 8 – 10M mark is on queue. She has projects moving through that are likely going to be coming forward. This is her saying guys, we have to figure this out, we have to solve this because there are real implications. She says Alder Rhodes-Conway got to a lot of the heart of the issues which is the equity and fairness issue of being if you are the first developer in the queue you get the 11 vote item vs if second or third in the queue. The way the budget is currently structures, you’re going to get about one project at $5M and I don’t know about you, but we need to be encouraging development every where we can because we absolutely need the tax base. And the way that, I hope you are all well aware of, if we are going to get to our budget issues we have to be looking at how we are increasing development as a percent of our city’s growth. So, the only other thing she has scribbled down to ask our good finance director, about is, how now, under state law the TIF supported borrowing is different than general G.O. because on paper these numbers look large, but they are counted differently. That is her question and she will leave her comments there.
Schmeidicke says he isn’t sure what she is talking about that it is counted differently, it is all borrowed as G.O. debt, it is counted as general borrowing under the constitutional test and for calculations for levy limit purposes. The debt service interaction is different for the levy limit.
Maniaci says that they have more authority under the statute limitation if it is a TIF eligible borrowing than if it is just general G.O.
Schmedicke says he doesn’t know what she means by more authority, more authority for what.
Maniaci say ok . . .
Schmidicke says that he is just trying to understand the question.
Maniaci says we know have had folks tell us how much we can budget and we have caps on what we can do and they have set that cap based on a formula but they have added bells and whistles for . . .
Mayor interrupts and asks if she is specifically referring to the levy limit?
Yes
And the exclusion under the levy limit in terms of debt services>
Correct, the implications for TIF districts vs. not TIF districts.
Schmiedicke says that is the levy limits interaction he was referring to in terms of debt service. Debt service on the general obligation bonds if it is paid for with something other than the property tax levy directly, the TIF bond payment is an indirect payment, then it does create some additional room under the levy limit.
Bidar-Sielaff says she will just speak once on 14, 15 and 16. She says she feels the only reason the money either is being put by Alder Maniaci or what was put in the capital budget is to avoid the 15 vote threshold. She doesn’t think that there are any other policies or procedures on how the money would be used. She doesn’t think that is a good way to direct funds and she is not sure, she wishes attorney May was here, because she thinks that the test is allocating the money to a specific project and that they would need 15 votes anyways. We wouldn’t be avoiding the 15 vote trigger, but she is not sure since she was going to ask Attorney May who is not there. She will not be supporting 14 and 16 but will be supporting 15. And waiting to see if there are more specifics about how they will spend the money in the future. That does not mean, in any way shape or form, that I would not hope and expect that we have a lot of requests for TIF next year and that she would not vote in support of those requests, she would hope that if they are the right requests and make sense that 14 of her colleagues will join her in that vote and they will allocate that money. She just doesn’t feel ready to settle on an amount of money right now and doesn’t feel the policy reasons to pick 5 or 10 or 11 million or why we would pick a specific district vs another one.
Rhodes-Conway says she agrees with Bidar-Sielaff and will only speak once on the three items. If we wish to change the threshold from 15 to 11 votes we should have that discussion, but it should not be tied to specific dollar amounts or specific projects or districts. She is happy to have that discussion, the next amendment calls for that discussion. She doesn’t have a strong opinion on which way to go, but she doesn’t want to have that policy discussion in the budget. This does not conform with current TIF policy, neither of these amendments nor what is in the Capital Budget. She actually has called to re-examine the TIF policy, but it should not be done ad hoc in the capital budget. I understand there is an effort to move those two things together, but that pre-supposes an outcome that hasn’t happened yet. Would urge oppose 14 and 16 and support 15. For all the reasons talked about at previous meetings, but because if we are going to make a policy decision we should do that in a policy context, not in the budget. She hopes that they can do that, whether it starts at EDC or another group is not at all important to her, whoever would like to talk about it should talk about it and we all can go to whatever meeting that is and participate, she looks forward to that and the results of that process and we should be looking at all these issues around development and combating, at least the perception that it is difficult, because I don’t actually believe it is difficult to do development in the City of Madison and I don’t believe that 15 votes is too high a threshold. With one recent notable exception, the truth is, good projects get 20 votes. And bad projects get none and we don’t often find ourselves hovering around the 15 vote mark.
Mark Clear says that since they last discussed this he has a number of arguments on both sides of the equation, and he thinks that Bidar-Sielaff and Rhodes-Conway make a good argument to zero out all TIF funding for development and he’s not sure that is a good idea either. I think that the budget is supposed to represent our best estimate of what we think will happen in 2013, that is how it works in other departments. And our best guess is not always right and he has come to the conclusion that the arguments about putting it in or taking it out – he doesn’t care. The important thing is that they make decisions on TIF funding on the quality of the project and its compliance with the policy goals and what we want to be as a city and how we want to spur development. We should do that regardless of whether the money is in the budget, we should make the decisions on that rather than a pretend pool of money in the budget. That wasn’t an urge to vote any which way, just to budget as accurately as we can and with development he’s not sure that we can, its out of our hands. And we should make the decisions based on the other elements.
Maniaci thanks them for the discussion. She asks that they could work on the equity thing, so we look at it comprehensively. She says project 20 and 29 are enumerated and we are stuck on two system and we should be consistent.
No aye vote, motion fails.
Jokes about how the mayor is conducting the meeting.
AMENDMENT 15
Mayor reminds them that they promised not to speak.
Marsha Rummel brought the TIF policy, from 2009, post boom, in the bust, this is a policy that was adopted when we looked at the downtown success and tried to focus on job creation. While I’m willing to look at it again, its pretty clear what our policy is or should be. The goal is simultaneous land use and TIF application. That doesn’t always work but it talks about how to do it if they are not in the same sequence. That is our goal, not to just put $5M in the budget and see what comes. She missed part of the meeting last time about why TIFs didn’t get funded. She wants support for this item, wants the policy review and that is what we need to do before we upend our policy, even if it helps Union Corners or others, she doesn’t want this to just benefit her district, she wants to have a policy discussion.
Motion passes. Unanimously.
AMENDMENT 16
Move to place on file.
I guess I really should go back and capture that discussion from the Capital Budget presentations, unless someone else wants to! 🙂
amendment 15 is about the mayor reminding about not to speak but amendment 16…move to a place on file?