Where Are All The Proud Self-Made Business Entrepreneurs?

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Here we go again. Another local business is requesting government assistance, this time to help pay the rent ...and oh, we can't forget the 30 jobs it will create.

JG Excerpt:
With Janesville City Council approval Monday, URT would receive a $50,000 forgivable TIF loan. The company would use the loan to lease a 40,000-square-foot facility from HCP ...and create 30 jobs.

The names of the players really don't concern me (they do, but for sake of web crawlers I replaced them with initials), but what does concern me is the monotony of these requests, their automatic approval by our city council and the steady lack of journalistic curiosity from our monopolized media.

Like in any and all of these government freebie deals, whether it involves a single individual or idea, but even more so particularly a hand-out to for-profit free enterprise business, I would want to ask for documented proof of hardship. In today's Orwellian political and social environment, I know many would call me a Socialist or worse for asking such a hurtful question, but there should be no good reason for government to distribute taxpayer dollars to private-for-profit entities just for the asking without a viable system of means testing.

$50,000 might sound like a cheap good deal to create 30 jobs, but that is not the point here. The point is why an established business can't seem to expand or create jobs without some sort of a tax perk or cash hand-out. Now, some might argue that if the government assistance is available, they would be foolish not to take it. I guess. Others could say I'm targeting the wrong party here, that its' the government's fault for making the assistance available. Yeah, I suppose.

Given our completely upside-down world of growth economics, this will probably sound either a bit old-fashioned or eccentric, but where are all the proud Americans, you know, the kind of people and business folks who would find it beneath them to take a government hand-out unless only as the very last resort for survival and existence. I know they're out there, I just never hear about them. But I hear and read about the businesses that request and capture tax payer's dollars all the time as if we're supposed to be all jolly and giddy over it. They get all the exposure.

So, I'm taking a different turn on this one and request to hear from anybody who started an independent business (unaffiliated, non-franchise) or business expansion in Janesville or anywhere in Rock County (10 employees or more) AND did not apply for or receive ANY type of government assistance such as a low interest government loan, TIF District advantages or funding, federal grants, contracts, a rail spur, or any other assistance or special exemptions paid for with tax dollars - when it was available to you. You know, NO federal, state, or local government assistance whatsoever - just pulled up by your own sweat and bootstraps.

You are the people the government and everyone else needs to hear from. We need to know what drove you away from government assistance and into the arms of private venture capital, private lenders or your own pockets. We need to know from where you learned these bizarre self-respecting and patriotic free market values. What schools did you attend? How you came to possess these virtues and how these valued traits could be passed on to others. In addition, you are the local businesses area residents need to become aware of and support with their spending dollars. You are my heroes.

I can't say for certain our local media would care to publish your self-made success story framed as I'd like to tell it. But if you're out there, I'd sure be willing to post your story here - with all the bells and whistles I could offer.

Note: There seems to be a controversy brewing in the Gazette's comment section involving the company requesting the TIF funding. It appears a former employee has accused the company of unethical business practices involving the disposal of contracted goods. I'll keep note on whether the Gazette follows up on the allegations and how the Janesville City Council handles the request for tax payer dollars.  

New Fire Station Location Projects Future City Growth

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For the past six months, Janesville administration officials have been promoting the idea of building a new centrally located fire station at the site of the current ice arena. Accordingly, the current (old) fire station's location has been deemed inadequate.

JG Excerpt:
The current location on Milton Avenue is not the best because the city has grown to the north and the east, Winzenz said.

Perhaps it was just a minor misstatement, but using that logic you'd think they'd plan on building a new fire station in a location to the north and to the east of the current fire station. Instead, they intend on building the new fire station even further south and a smidgeon to the west.

JG Excerpt:
-- The ice arena site at 821 Beloit Ave. The location provides a good response time to the east because of Palmer Drive and to the south with Beloit Avenue.

The conversion of prime green fields into residential and commercial development (TIFS around farmland, etc.) appears to have shifted away from the northeast to the south and southeast quadrants of the city. This activity (in place of sustainable jobs growth) is consistent with the decades long city administration devised donut-shaped economic plan. The downtown of course being the hole of the donut.

On one hand, I believe if the city was as serious about downtown development as they have been about the big box developments up on Milton avenue, they would have made it a priority to keep Main Street clear of heavy commercial trucks and that includes using it as a regular route for fire trucks. There has been some recent interest and improvements downtown but... I don't think it's near where it belongs on the city administration's economic activity list. On the other hand, I'm afraid to see what the city does if a fire station or a taxroll contributor like residential housing isn't built on the large ice arena site, assuming they will waste the unique post-less million dollar facility with a bulldozer. Either way, the current ice arena site does not come as cheap as they appear to be leading on.

Large Wastewater Rate Increase Expected In Janesville

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I was holding back this post for a few days to see how the Janesville Gazette would report on the wastewater rate hike proposal as presented in the council agenda by the city administration. As it turns out the newspaper did not publish any report on the expected rate hike or agenda for Monday's city council meeting.

Agenda Excerpt:
As such, adjustments in the rates have occurred. This rate adjustment will generate an additional $2,125,200 in revenue in fiscal year 2010, or an overall increase in rates of 30.3%, effective January 1, residential 2010. The proposed rate adjustment will result in the average wastewater bill increasing by 29.3%, or $18.05 per quarter.

Let's back up a moment. For the past year, the Janesville water utility (with the help from the watchdog Gazette) repeatedly used the term "quarterly water bill" here and here rather loosely to help present a previous water rate increase. They pegged the average quarterly water bill at $40. For all practical purposes, Janesville residents do not receive a "wastewater bill" per se. Wastewater charges are included on the invoice most Janesville residents would call the "quarterly water bill."

Now that we're past that, it appears the city administration is making a slightly better effort to draw a distinction between the wastewater portion and the supply side on the "average quarterly water bill."From this we can assume the old average residential quarterly water bill was about $106 ($40 water supply + $61 wastewater and $5 fire department). After this latest increase including the one from earlier in the year, the new average "quarterly water bill" should be around $130.55

Well, we are still making assumptions. These figures may or may not include the fixed wastewater fee which the administration describes as rising disproportionately for different users. Got that? I would suppose that feature arose from the recently approved Clean Wisconsin agreement.

Still, the city administration appears to have made an effort this time and might begin to figure out what most people define as their water bill. Perhaps someday the term "quarterly water bill" in Janesville will mean just that - the total of all the charges from utilities that appear on our "quarterly water bill" and not just what administration officials want it to mean at any given time to fit their specific presentation or goal.

It's just as well the Gazette didn't run Monday's council agenda through their filter, at least now we see the information as it was intended - straight from the horse's mouth.

Revision: Only hours before the Janesville City council meeting, the Janesville Gazette posted a short blog entry? placing the projected "new" average quarterly water bill after the wastewater rate proposal at $120.40. This should be fairly accurate since the earlier water supply rate increase (mentioned in the above post) was replaced instead by Clean Wisconsin's progressive water rate policy.

City Management Divided, But Gazette Is In Lockstep

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Wednesday's (Aug. 12, 2009) Janesville Gazette offered the newspaper's spin on the local process preceding a split Janesville city council decision to not pursue stimulus money for a second water tower. In an editorial titled "Refreshing change is percolating within City Hall," the newspaper sees these interactions within city management along with the council's decision as a new era of change and openness.

Never mind the fact that the city water utility director's series of health and safety claims made months ago against the city's ability to serve one-third of its customers had gone unchecked and was seemingly irrelevant in the council's decision on funding the project. The city government's eventual guarded response following the director's warnings along with the newspaper's seeming cooperative efforts to de-emphasize its implications portend a very strange relationship between the two entities almost bordering on collusion. The water tower funding decision had very little to do with change or openness and everything to do with money. Instead of digging deep and looking for the details, the newspaper looks the other way.

JG Editorial Excerpt:
That council members could hear opposite viewpoints from both employees is refreshing and a stark change from the previous administration, when the staff and administrator almost always marched in lockstep.

Comical.

The Gazette’s attempt to turn this controversial episode into an exercise of expediency doesn't surprise me at all. They seldom if ever rock the council's boat and have been and always will be fans of Janesville city government management policies so long as they can tilt the wind their own way.

For years the Gazette championed the city's management and council's lockstep march and unanimous decisions as a bountiful reward and model of a united and efficient government absent of political discord and run by caring elected residents and academic professionals. And much like previous councils, today's city council members defend management and their economic policies against most any public criticism. Little has changed.

The newspaper's editorial almost seems meant to fabricate change, just in case you ain't noticed it.

Note: Unfortunately, the Gazette editorial referenced here is not on the open Web.

Water Tower Funding A Matter Of Savings Over Safety

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On Monday night (Aug.10) in a close and controversial decision (4-3), the Janesville city council voted to stop the city administration from seeking stimulus money to seed the funding for a water tower in the NE quadrant of the city. The Janesville Gazette wrote about the council's decision in an article on Tuesday misleadingly titled Council nixes water tower, and subtitled 'Struggling economy cited as key reason."

First of all, this recent council decision did not "nix" or cancel the city's plan for a water tower. It merely directed the administration not to seek stimulus funding. Secondly, how could city council members vote with any confidence on this funding without first erasing any doubt about the danger risks implied by the water director's earlier claims? Regardless of the economy.

Not so fast you say? After all, ain't I the guy who raised a ruckus on this blog portraying the water tower as nothing more than a socialized gift to encourage development into the farmland? Well, yes and no.

Back in April, I was livid when the Janesville water utility director explained that since 2005, the city experienced eight episodes of inadequate water pressure that placed nearly 20,000 people at risk of either bacterial contamination or fire safety, but he never came forward during the time frame since to recommend the council deny new development in that area based on 'public endangerment.' Not once. What does the director have to say for that now? Well, at Monday's meeting he said he dealt with those water issues "concurrently" at the time of the new construction. But that's like sending off an under fueled airliner knowing full well it has no place to land at the planned destination. And then finally thinking about the danger and consequences while the jet is still in flight, only to keep your fingers crossed tightly. That explanation doesn't work for me.

Rather than rehashing all the twists and turns of the past about the city administration's portrayal of the need for the water tower, we're now better left to just consider the impact from water tower decisions the council will be facing over the next several months.

Excerpt:
Voting with Steeber were George Brunner and Frank Perrotto. The three said a tower would improve water service quality and safety.

Because there was no closure on the safety issue, all the council members are now painted into a corner regarding future development in the NE or the water tower. Whether they want to believe it or not. The three voting for the funding based on safety issues should have to explain those safety concerns the next time a developer or parcel owner in the NE quadrant requests a hook-up to city water. Unless of course, money trumps safety. And the four council members (including the city manager) who voted against funding will have a difficult time bringing up the safety issue in future water tower discussions, lest they be accused of trading public safety for budget savings at this stage in the game.

Although they all seem to be in agreement that future growth does not play a major part into the decision regarding the water tower, the utility director said the city will eventually have to stop growing once it reached a certain elevation without the tower. The director at another point even implied that such a claim (for growth) is a false portrayal of the need for the water tower.

Despite the Gazette's "Council nixes water tower" claim, it looks like the council will still be entertaining a land purchase agreement for the tower site over next few months. This will be the next important decision to watch for.

City Council Approves Industrial Base Expansion

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JG Excerpt:
At least that's the opinion of Brad Cantrell, the city's community development director. And it appeared good enough for the city council, which voted unanimously to add 185 acres to TIF No. 26.

Just in case someone didn’t think that the GM industrial corridor in Janesville was unemployed enough at over 300 acres – and for good measure.

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A TIF DISTRICT PRIMER (Tax Increment Financing District)

Janesville TIF Policy Excerpt:
Thus, the TIF law provides that all property taxes levied on increased property value within a TIF district are retained by the community to finance the public expenditures made within the TIF district.

Instead of “retained by the community,” it should have read property taxes... “withheld from the community.” A large portion of the property taxes paid within the boundaries of the district do not all go to service the same community (schools, police, fire, public works, etc.) as property taxes paid by everyone else. As the property values in the district incrementally improve, so does the costs to service the area. While the properties in the TIF district enjoy all the amenities provided for by the "community" general fund, someone else is shouldering the cost. That someone else is you and I. This tax shift can go on for as long as 23 years.

Janesville TIF Policy Excerpt:
The base value (the assessed value of the property that existed at the time the TIF district is created), however, continues to provide the same level of revenues to other taxing jurisdictions.

Because most of the 185 acres is being farmed, the land probably meets Wisconsin’s land-use value provisions. This means while the private land is being improved under TIF provisions with new added value (streets, infrastructure etc.) the only taxes being paid into the general fund is the same amount the property was paying at the time the TIF district was created. In the case of working farmland, the taxes paid are very, very low. Usually pennies on the dollar compared to non-farm assessments. Generally, the lower the base value of TIF district properties - the greater the burden the district places on taxpayers outside of its boundaries.

Janesville TIF Policy Excerpt:
Once all of the public expenditures have been repaid, all taxing jurisdictions can collect taxes levied on the new property value.

Keep in mind the 23 year time frame. If the TIF is successful, its property taxes will provide a surplus revenue over the costs incurred to improve. New state TIF rules allow local jurisdictions to "port" or divert the incremental tax surplus away from the taxpayer general fund and use it for other private business ventures within the 1/2 mile radius of the TIF boundaries. When anyone implies money coming from TIF surplus revenues does not effect our taxes - they are wrong. The money is still being withheld from the general fund. Just because taxpayers aren't made aware that tax revenue is being withheld, doesn't mean no one has to make up the difference.

Janesville TIF Policy Excerpt:
Total TIF incremental revenues over the maximum 23-year life of TIF No.26 equal $6.62 million, compared to total TIF costs of $5.78 million.

The cost to incentivize the privately owned land with infrastructure improvements is projected to cost $5.78 million. Once the $5.78 million for the improvements has been repaid by taxes collected in the district (remember, most of the taxes collected do not go to the general fund), then and only then will the district begin paying into the general fund. BUT if it's paid before the TIF expires (in this case 23 years!), the local jurisdiction (city government) can continue to withhold the incremental monies or surplus from the general fund to instead pay for other capital improvements within the 1/2 mile radius until the TIF finally expires.

Janesville TIF Policy Excerpt:
Since TIF revenues are projected to exceed TIF costs by $0.84 million, the TIF district should be economically viable.

If, after 23 years have passed and all goes as planned, this TIF district is expected to generate $840,000 more or less in surplus tax revenue. Remember, this may or may not be diverted away from the general fund.

So how will taxpayers wind up losing? While we are allowing the property taxes being paid by the improved properties to be used to pay down the debt for all the infrastructure, pipes, streets, curbs, etc. - someone else is shouldering the incrementally higher added costs for schools, fire, police, library, public works, snowplowing, street sweeping, etc., the TIF district has shifted onto the community...for a span of up to 23 years. When you figure that Janesville has over 25 active TIF districts, the tax shift is substantial.

Put another way, while the taxes paid by the property owners inside the TIF boundaries are being spent on improvements that return higher property values and increased speculative prospects, those outside the district are shouldering the incrementally higher tax burden to service the district. It’s a circular motion of revenue made in the name of progress that has only one loser – the local taxpayers outside the TIF boundaries.

The TIF District tool can be a great boost for economic development when used to remove blight or lift economically depressed areas. But it is also easily abused. When its drawn around working farmland to increase the supply of industrial buildings in an area with a glut of vacant industrial buildings - there's something seriously wrong with our policies.

Obviously, there is no way I can cover all aspects of TIF District agreements and the consequences they bring in this blog posting. While those with the loudest megaphone tout the advantages of new amendments to Wisconsin TIF law and keep the general public off balance with loosely constructed rhetoric, probably the best way to think of TIF Districts is as nothing more than a good old fashioned tax shift.

Phantom City Growth Driving Up Janesville Water Bills

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DNR Excerpt:
Janesville is proposing extensive upgrading and renovations throughout the treatment plant to replace aging equipment or facilities, and to provide increased treatment capacity to accommodate future growth.

With the closing of the GM plant, Janesville's water utility lost 9% of it's water usage volume - a figure which should correspond favorably to the utility's newly found ability to accommodate future growth. Without GM, the Janesville water utility system is under-utilized. So under-utilized in fact, they are proposing a 15% increase in water rates charged to its' customers to make up for the lost volume.

DNR Excerpt:
The project has an estimated capital cost of $32,100,000. Assuming a Clean Water Fund loan is obtained, it’s anticipated that the typical residential user charge would increase from $51.50 per quarter to $66.80 per quarter.

Where did the DNR get those figures? In a very recent article from the Janesville Gazette, the city administration claimed the "average" water utility bill was $40 a quarter. That's an error of 21% assuming the DNR's figures are closer to reality. The newspaper published this same figure undisputed again in a follow-up article. Obviously, somebody was lying or deliberately misrepresented the "average" bill by leaving out the waste water numbers from the bill. The Gazette just plays right along and delivers the misinformation right up to their subscriber's doorsteps.

So as it stands, the Janesville administration requested a 15% hike in water rates to make up for the drop in demand from GM. Followed by the waste water upgrade request, a request partially built on the accommodation of future growth. That's another 30% increase in rates. In addition, the administration is proposing a water tower for the NE side (administration says not for growth) which will likely lead to another 15% increase on top.

Barring further adjustments for inflation and other unforeseen events, and depending on the sequence of the three rate increases (15-30-15) the city administration and council have planned for us, a $80 quarterly Janesville water bill will likely balloon to approximately $135. With no fault at all going to the current users or the system's ability to serve future sustainable growth.

As long as the Janesville city council continues to rubber stamp this series of increases along with the wrong-headed basis on which they are founded, there is little Janesville residents can do to reverse the direction.

Janesville’s Water Warning Lifted

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The water is safe to drink.

May 9, 2009 at 1:45PM: Precautionary Water Boil Lifted

Additional testing following the recent Coliform/E. Coli bacteria detection has come back normal and the precautionary water boil order for Janesville has been lifted. This means ALL city residents may use water as normal and no boiling is necessary.

Excerpt:
Residents of much of the city's east side had been under a state-ordered boil-water notice since Friday afternoon.

Plenty of questions remain never being asked or volunteered to answer. Why were the eight previous potentially dangerous events to the city's drinking water left publicly unreported until years later? What's different about this episode that a warning notice was issued compared to the eight previous? Is it because of state involvement? Was it because the previous eight events did not pose a danger to Janesville residents? If the previous eight episodes (without warnings) are not of the same urgency as #9, why will it cost the city over $7 million to cure? Was the water tower presentation at the last city council meeting merely a ploy to exploit fears? In light of that, what will this episode cost the city? Who's looking out for us?

Let’s hope that when our Water Utility Director notices something awry within the scope of his job that may negatively impact the health and safety of over 60,000 people, it doesn’t take a state order to issue a warning. One out of nine is a poor average. We don’t need to be kept in the dark.