Village gets good news on refinancing, TIFs

by Emmitt B. Feldner
of The Review staff

ELKHART LAKE – The Village Board got good news on their refinancing bond sale and an update on the existing tax incremental finance districts Monday.

Phil Cosson, the village’s financial advisor from Ehlers and Associates, reported on the sale of $3.015 million in bonds the village sold that morning.

The bonding refinanced earlier TIF loans from the State Trust Fund as well as some additional TIF developer’s incentives.

Cosson said the winning bid was 3.05 percent, less than the 3.5 percent interest the village was paying on the trust fund loan.

In addition, it was lower than Ehlers had originally projected, which meant the amount could be reduced by $100,000 and the village still saved $187,000 in interest costs.

Cosson updated the board on the status of TIF Districts 2 (The Osthoff resort meeting room expansion), 3 (Sargento expansion and Victory development) and 4 (Wolf’s Motorsports development).

“Working form a cash flow perspective, (TIF) 3 is going to continue to work. (TIF) 2 and 4 are a little bit challenging,” Cosson explained.

In the latest district, Cosson said the problem is when the valuation for the development is established and how quickly.

“It will depend on how the build outs go, but it sounds like they’re going pretty great. We tried to be a little conservative and looked at a four-year build out, but a lot of the buildings are up already,” Cosson said.

However, he added, the district will have a $48,193 shortfall in tax revenue versus bond expenses in 2017. Future revenues under the Ehlers projection would be enough to eliminate the shortfall over the following two years.

Village Administrator/Clerk/Treasurer Jessica Reilly told the board that the village has enough reserves to cover that shortfall, which would be paid back with interest out of future TIF 4 revenues.

In TIF 2, Cosson said, “You have a little more systemic annual shortfall. This is going to be one you’re going to have to follow more closely.”

He was quick to add, though, that under the developer’s agreement with Sargento, the company has pledged to cover any revenue shortfall stemming from a state assessment that is less than the projected value of improvements used to set up the TIF.

“The good thing is you have a solid developer in place and a letter of credit in place,” for the still-pending Victory development in TIF 4, Cosson added.

He warned that the village will have to do more diligence on the TIF 4 numbers, including breaking out costs related to the two major developments in the district, Sargento and Victory.

Following the lead of other area municipalities, the board voted to add an annual recycling fee to the property tax bill for village residents.

The fee was set at $20 per property for 2017.

Village President Alan Rudnick noted that the recycling fee is one of only three types of fees municipalities are allowed to charge under state law.

He pointed out that the fee is $53 a year in the city of Plymouth and $107 a year in the town of Sheboygan. The fee is designed to cover the recycling fee the village is charged by its garbage collector, Advanced Disposal.

Mike Thun of Advanced informed the board that the day for collection of garbage and recyclables in the village will be changed from Wednesday to Monday starting Jan. 1

Thun explained that Advanced is adjusting collection days throughout the county in order to make collection more efficient.

“We’ll take care of all the notifications to the citizens,” Thun assured the board.

“For weekenders, it will be great,” Rudnick said of the change to Monday collection.


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