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Thursday, January 23, 2020

City Punishes Farm Family. Then Punishes Taxpayers With The Bill.




From the "we have to destroy the farm in order to save it" files comes another story about the misleadership and really bad decisions from within Janesville's backward if not corrupt city hall.

Before I begin, I must give the Janesville Gazette another one of those rare once or twice a year credits for the story.

This time it revolves around a couple ...well, here's the Gazette's quick take ...



The city took their land, but it wasn't in lieu of a six figure debt payment as the local Janesville Gazette suggests. The city took their land to punish the couple for not being able to afford to pay the city's demand. That's right. The couple said they can't afford to pay and with dwindling farm activity and other pressures, said it would take 170 years of their modest annual farm rent income to pay the city's bill.

So it was agreed and the city took their land.

It's one thing if the couple requested the curb, gutter and sidewalks, or fell behind on property tax. But they did not. The $130K bill for unrequested, unnecessary public works literally fell from the sky into their mailbox.

Why is the land NOT in lieu of the $130K road cost? Because according to the newspaper story, the city will replant the land (not sell it to recoup the money) with native wildflowers and turn it into a park while holding the property in a covenant for the family in case the family at some point in the future can afford to pay the ransom.

So how does the city pay the bill with the land they confiscated? They don't. Who pays? Unsurprisingly, the Gazette doesn't dig into that because well, THAT would ruin everything.

And so it is. They force $130K worth of needless public infrastructure on this family, get $130K in land value AND still collect the $130K from taxpayers snookered to pay the bill. It's a Win-Win double jackpot for the city! No eminent domain necessary. They'll all get raises and special commemorative coins from the city manager for this one.

What many in Janesville see as an obvious, bold act of extortion and an affront to common sense and decency, is turned into a "gift" trope by the city with the protectionist Gazette in tow. All in all, this story like dozens of eye-opening raging stories before it, is likely to just die on the vine. But to the folks running city hall, it's just another day and week in Janesville Wisconsin.

Sunday, January 05, 2020

Top Ten Janesville Stories From 2019


#10: The city's bizarre plan to relocate its growing homeless population from downtown to Palmer Park, then to Traxler, eventually settling on a parking lot near the police station.

#9: Uncovered by citizen journalist "The Rock," was another city fail when a contractor hired for restoration work after the removal of the Monterey Dam reported that more testing of the soil was needed for contaminants and structural integrity to build a berm. For his diligence, the contractor was fired.

#8: The city's skyline changed forever as the iconic GM smokestack was dragged down into rubble without notice. For many in Janesville the chimney was a symbol of activity, prosperity and community. Daft city officials squandered the historic moment.

#7: Warned of a historic property tax shift and hike resulting from their support of the city's wrongheaded growth plans, the Janesville school board made the ultimate sacrifice; they voted themselves an annual property tax relief stipend! No referendum.

#6: City Hall opened 2019 by expanding TIF District agreements to include housing developments. The city closed 2019 with a proposal to loosen TIF District property tax kickback terms even further for downtown, from 15 years to 20, for select developers.

#5: Under normal circumstances this would have been #1, but the sale of the Janesville Gazette, its radio stations, followed by the sale of the Beloit Daily News, should have brought renewal and hope. It didn't. On the plus side, I have more content than ever.

#4: With the end of the bitter, petty and divisive partisan politics of Paul Ryan and Scott Walker, 2019 marks a potential new beginning for Wisconsin and Janesville. Both have packed up their bags and were last seen heading to the East Coast.

#3: The run-up to a holy-cow 53% increase in water rates, purportedly needed to lower the city's long-term debt load by $24M, coincided perfectly with the city's urgency to open a new $24M borrowing note for hockey rinks at the capital investor owned Mall.

#2: The Janesville School Board sold out by putting developers' profit over childrens' education and taxpayers when they endorsed city deals exempting sweetheart housing developers from paying property taxes from up to 500 families paying market-rate rent for the next 15 years.

#1 A perfect storm of bad city economics and mismanagement culminated in the city-wide property tax revaluation to deliver historic increases on homeowners tax bills. The Janesville Gazette editorialized that the dynamics behind the tax hike are a "mystery."

One honorable mention. The city of Beloit picked up two major construction developments in 2019. It was announced that a developer for Amazon will be building a one million square foot warehouse in the city. Meanwhile, local investor D. Hendricks paired with Q. Studer to propose building a new ball park for the Beloit Snappers. The big kicker: Local taxpayers will not be put on the hook paying out long-term annual subsidies for either of these proposals. SHOCK!

Thursday, October 24, 2019

Janesville School Board Delivers Crushing 25% Average Tax Increase to Homeowners



This. Is. Incredible.

But there's more punishing blows on the way.

According to a Janesville Gazette story on this week's school board meeting, the board voted unanimously to increase the local budget levy by 8.6% and pay down some notes that will "save" the school district $500K in debt service. That increase came despite declining enrollment and a last minute $2M injection in state aid.

The Gazette takes the usual soft approach beginning with "Taxpayers might not notice an increase in their tax bills come December" and how the district "held the line" on the tax rate keeping it nearly flat from last year at 8.48 per 1,000. But with property assessments going up an average 25% this year and residential at 31%, the flat tax rate is expected bump up the school tax portion of the bill the same percentage of our assessments. That translates to an average 25% increase for homeowners and renters. It's either 8.48 per 1,000 means 8.48 per 1,000, or it doesn't. Unless there was a huge mathematical error, typo or pile of unicorn dollars left uncounted in their figures, this is going to hurt a lot.

Meanwhile on social media, school supporters say the district did their part and are not to blame for the massive increase. Others claim if you don't like it ...move.

For the past six months, I've been warning about a perfect storm of devastating tax hikes resulting from a historic tax shift of wrongheaded economic development policies, dark store value lock ins and assessment decisions by the city. But even this doesn't add up.

The city has nearly zero countable new construction since most of it is quarantined in TIF Districts. So the city-wide average assessment bump of 25% acts as quasi-growth. How that plays out and whether it limits the school district's tax hike could be significant. The district, for their part, appears to be using the citywide assessment as a convenient backdoor for a a substantial revenue increase.

Yet soon after the school hike uproar, the Gazette wrote it's a mystery, and everyone should keep calm.

Link: Janesville School Board OKs 8.6% tax levy increase

Friday, September 13, 2019

Monterey Bay Contractor Gets Stuck In City Hall Muck


Wow. Will the scandals and cover-ups at Janesville city hall ever come to an end?

New revelations about interactions between a contractor and city officials regarding restoration work in Monterey Bay show a carefully plodding administration withholding important information with an intent to deceive.

According to FOIA documents gathered by a local Facebook page, The Rock, Janesville officials tried to either plead ignorance or pretend like they're not obligated to offer any information about the levels of toxic contamination they were aware of unless asked, instead hoping a contractor would unwittingly bury under acres and acres of muck first.

The Janesville Gazette editorial predictably attempts to soften the city's responsibility in this disturbing episode by blaming both sides. However, the contractor appears only guilty of seeking more information and additional testing to clear the air.

City officials involved in the cover-up are wasting no time to snuff the scandal out by respinning the storyline while a slew of documents tell a story of indifference in the city's responses to the contractor. Even the Wisconsin DNR, other than washing their hands clean of any responsibility, appears unwilling to commit or disclose any information regarding the Monterey controversy.

As a writer with a strong opinion, I don't want to color the work of the excellent citizen investigative journalism provided by the Rock on this issue. So, I encourage any of my readers who care about Janesville and the pattern of behavior in our local government to visit The Rock Facebook for more information on this extremely important matter.

For those new to this concerning issue, I suggest scrolling down the Rock's Facebook page to at least the Sept. 6th post titled, "The problem in Monterey Bay" and work your way up to bring you up to date.

Read it for yourself. You decide.

Wednesday, September 11, 2019

Shell Game: To Keep Up With Peer Cities, Janesville Water Rates Jump 53%



You probably have heard by now.

The state's PSC panel approved Janesville's unprecedented 53% water rate increase. That's right. Not a 2%, 3% or a 5% increase. 53%. That's a five followed by a three. Fifty-three. After approving the massive increase, officials on the PSC praised Janesville for "taking its medicine" to pay cash for water mains and said other Wisconsin communities should follow their lead. Again, this is a state-run panel praising a city for raising fee rates astronomically, not lowering them, as a result of decades of efficiencies and growth plans. If you believe that.

To look into the history of the city administration's rate hike request, we have to go back to 2016 when I predicted that due to the city's downtown TIF District among other factors, the city will begin putting the squeeze on Janesville homeowners. I wrote in 2016, "With commercial assessed values declining and future assessed growth quarantined in TIF’s – the people left holding the bag and a much larger share of paying for general fund operations are the residential property owners." Some folks might say that was an easy call, that things go up and higher taxes pay those costs. True I suppose. But keep in mind the city's ARISE design, now into its tenth year, is meant to induce growth and according to the rules, expand the base and lower the rates.

After having our quarterly water bills (water, waste and fire protection) double over the last five years, some city ambassadors would logically expect a rate cut during all of this reported ARISE growth. Right? No, instead they're now saying if we don't raise taxes and fees, we will face greater debt. Something isn't working, but that is the premise behind their water rate increase. They also warned us that if Janesville is unwilling to accept those increased tax obligations, our local economy could death spiral. Their words. Not mine. So let's move on to 2017.

In 2017, the city manager, Mark Freitag, created a "peer city fee and tax matching machine." No, I'm not joking. Freitag created a job position at city hall for someone to comb through fees in other Wisconsin cities and flag any Janesville fees that may be falling below the amounts charged in peer cities. In effect, flagged fees aren't a response to an expected budget shortfall or cost metrics but are sent to the city council for increases. Apparently, some city officials will raise taxes and fees for no other reason than a deep-seated resentment felt that residents might be getting off cheap. This tax and fee hiking ritual is done every year.

And so it was. After several years of water rate hikes, the city still had room to match peer city water rates. All they needed was a reason.

In 2018, Freitag, driven by consultants and rubber stamped by our failed city council, put in a request to the PSC for a 53% water rate increase to pay for replacement water mains. The state only recently OKed the city's request. It should be noted that the Janesville Gazette reports the approval as a "state order." That is not correct. The city is raising water bills by choice. Nothing prevents the city from cancelling the rate hike.

Supposedly, and I didn't research this, the city was already spending $3.5M on water mains budgeted annually and paid for with borrowed money. What this water rate increase does is allow the city to cut General Fund budgeted revenue draw (borrowing) momentarily, "Look ma, we cut $3.5M from our city budget!" and replace it with $3.5M cash in water bill collections. There's the shell game. Shell games are a matter of timing and intent.

According to Math, the 53% hike in the Janesville water rate will confiscate $80.5M from residents over the next 23 years. According to their Logic, this is needed because without it the city claimed its capital reserve was projected to finish $11.3M in the red by 2043. What a deal!

But the shell game is needed because underlining the city's budget mismanagement and failed growth policies is a perfect storm coming of major property tax increases on Janesville's residential taxpayers that is as historic as the 53% water rate increase.

My early findings showed that in order to keep the appearance of their growth plans as budget neutral as possible to show it's working, the city would have to cut about $7M from its annual budget. An impossible task given the wild spending mentality of the Freitag administration. But this $3.5M water rate increase acts as a back door to artificially cut budgeted draws while making no actual cuts in programs and services.

Yes, the state requires the $3.5M be spent on water mains, an expense however previously paid from General Fund notes. We can argue over who is responsible for water main replacement, but this in effect conveniently shifts a portion of the expected historic property tax increase on water utility customers.

After constant rate and fees increases since the day Freitag was hired, all he needed was a better reason to match peer cities on water rates and he found it in the water mains.

Drink up!!

Tuesday, August 20, 2019

Paul Ryan Scouting For Home In DC



According to a scoop from Politico, Paul Ryan will be moving his family out of Janesville to a suburb of DC.

Politico Excerpt:
But for a man who prided himself on going back to Janesville each weekend, the move is notable.

Tuesday, July 30, 2019

Janesville Officials and Newspaper Feel Cheated Out Of State aid, Lash Out At Wisconsin Communities.


In case you missed it, the Janesville Gazette posted an awful if not disturbing editorial, titled, "Other Cities Playing Janesville As Fool In Scheme" on Sunday attacking the cities of Beloit, La Crosse and Appleton, and Wisconsin communities in general for what the newspaper claims has been a conspiracy to cheat Janesville out of state shared revenue.

The Gazette's allegations are drawn from charts slapped together by the Wisconsin Policy Forum showing Janesville near the bottom in state aid and road maintenance spending compared to peer cities since the early 2000's. Because of that the newspaper states matter of factly those cities have been conspiring against Janesville and playing us for a fool. Their editorial ends with, "Cities such as Appleton can no longer rely on people's ignorance to perpetuate this shared-revenue scheme. We're wise to it, now."

Shockingly, the Janesville newspaper is not alone in their conspiracy theory. During the state's Joint Finance Committee hearing held in April, Janesville city manager and the police chief alluded to a deep resentment they apparently hold against Wisconsin communities. The city manager Mark Freitag asked and I quote, "How long must Janesville residents subsidize state shared revenue distributions to winning communities?" JPD Chief Moore later said he supports the 2% increase in state shared revenue but asked that not all Wisconsin communities should receive additional distribution because he feels Janesville has been cheated.

Wow. Very bizarre.

I totally get the request and support for more state aid, but to literally ask that others should not share in the same award?

Financially, there's no reason why many cities in Wisconsin should lobby for a change in the state aid formula as there are just as many satisfied with it to those that aren't. But to turn it into an active conspiracy and feel intentionally cheated?

The Gazette's, City Manager's and Police Chief's talking points are so similar it is hard not to believe they are reciting from a deeply partisan playbook of divide and conquer victimhood politics spread by city hall operatives.

On the other hand, the Janesville Gazette and those running city hall endorsed Forward Janesville's lobby efforts to shift hundreds of millions in state aid away from local roads to enumerate funding for the I39/90 expansion. So, if anyone should be upset and hold resentments, it should be those communities from all over the state, including Janesville residents, that lost local road funding over the last ten years due to the endorsed legislative agenda and lobby efforts of Forward Janesville. It was Forward Janesville and their I39/90 coalition spearheaded by TDA lobbyist Craig Thompson, now the director of wisDOT (I want to scream) for his reward, who tilted the tables against local road funding.

Thompson's connection to Forward Janesville also helps explain why his department tied any extra state money for local roads in Evers budget to economic development. It's payback time!!

When Forward Janesville is involved, you can bet higher taxes are on the way for everyone else. Janesville now has a municipal vehicle tax thanks to Forward Janesville.

What a web they weave.

You can read about Forward Janesville's statement against state aid for local road funding here and here. Keep in mind that the Janesville city council ENDORSED a group whose mission was to cut off state funding for local city streets.

Note: I'm not a Janesville official or elected representative, but I strongly disagree with the Gazette's and city official's allegations, resentment and characterization of Wisconsin communities. That is not who we are in Janesville. I hope.

Friday, July 26, 2019

Silence Is Support: Janesville School Board Sold Out Children's Education For Developer



Perhaps it was bad timing OR great timing depending on your perception, but Janesville school board members recently voted themselves a $200 a month stipend. Personally, I think pay, raises or any form of compensation for the school board or city council should always go to referendum. I just believe that lawmakers slash local board members should not have the power to give themselves pay, raises or other taxpayer funds when they feel like it. But that's for another story.

But, what makes the Janesville school board pay decision exceptionally egregious if not totally damning in their fiduciary responsibility as a unit of local government is the fact that within the same week, not one board member or administration official stepped up to defend local taxpayers or school children against a recent city council deal exempting (refund) property taxes for a connected developer of a 260 unit apartment building for the next 17 years. That's right, 260 families paying competitive market-rate to a development firm, with property tax embedded into their monthly rent bill, will contribute NOTHING to police, fire, city operations, local roads and schools for the next 17 years and get this, ...the city justified their decision by claiming the assistance was necessary to ensure a reasonable rate of return for the developer. Their words. Not mine.

Of course nobody wants to deny a developer a reasonable rate of return. But it certainly should not be the taxpayers responsibility or come at the expense of a child's education to ensure that margin. The school board was silent.

On the surface this is nothing new for Janesville's dysfunctional economic planning. In order to keep their "but/for" demand of TIF District law honest, the city practically PROHIBITS development without TIF subsidies and has mortgaged off the best chance for tax revenue growth for the next 25 years. What makes this recent "incentive" deal so much more wrong than other kickback deals the city slapped together for developers, is the cost incurred on the community from those 260 families. That cost over 17 years is estimated at $7.6 million. So it's a double hit.

Mind you, this isn't about benevolence or hardship for those families or the developer. There is no hardship on their part. This is not low-income housing. They ARE market-rate. Besides not opposing the city's wrong-headed deal with the developer, the school board so far hasn't offered any plans for raising funds to pay for the education of children from those 260 families for the next 17 years. As it stands, somebody will be paying much more than their fair share in property taxes once again. That somebody is you and me.

This entire episode comes on top of early reports showing Janesville homeowners are about to get hit with a 3% shift increase in the overall general property tax burden shared with commercial property owners. So the school board's immediate priority was making sure they got some property tax relief for themselves.

For the record. Janesville school board members are: Steve Huth, Jim Millard, Greg Ardrey, Michelle Haworth, Karl Dommershausen, Kevin Murray, Cathy Meyers, Dale Thompson, Lisa Hurda.