TIF error will be fixed with 2020 tax bill
Edgar trying to determine amount of lost TID revenue
The Village of Edgar failed to divert B& D Fabricators property taxes to its Tax Increment District (TID) No. 3 account for the past 11 years and, with the mistake discovered, will increase taxes paid by village residents in 2020 to make up part of the loss. This was the message on Monday from village administrator Jennifer Lopez, who briefed village board members on the compli- cated tax error.
Lopez said she “stumbled” upon the mistake this past week after reviewing a statement of manufacturing property issued annually by the Wisconsin Department of Revenue (DOR).
The statement correctly lists B& D Fabricators as an Edgar industry but does not list its property at 810 Tamarack as part of TID No. 3, the village’s business park.
That raised a red flag, Lopez said. Upon further investigation, Lopez said she confirmed Edgar Tax Increment Finance consultant Vierbicher Associates properly included B& D Fabricators’ current parcel as part of the village’s TID No. 3 plan, but, as of 2004, the parcel was excluded from the TID by the DOR. With this error in place, B & D Fabricators taxes never were routed to the village’s TID account after the business built its factory in 2008.
Lopez said it was unclear how the mistake happened. A note left in a DOR file only states that the B& D Fabricators property was not included in TID No. 3. The mistake could have happened, she said, when the village closed out an original TID No. 2 and reopened it as TID No. 3.
As of the current tax year, B& D Fabricators is assessed at $1,295,000. Property taxes on the business are $24,630. The company will pay $1,246 in personal property taxes.
Lopez said B & D Fabricators taxes were mistakenly not sent to the village’s TID No. 3 account for 11 years. During that time, the company taxes were shared with all of the normal taxing jurisdictions, including Marathon County, Edgar School District, Northcentral Technical College and the Village of Edgar.
Going forward, Lopez said the DOR will require the village to partially correct the mistake in a “70.57” method.
In this process, the administrator said, the state will require the village in 2020 to make up lost TIF revenue from the 2018 and 2019 tax years.
The required tax increase, she said, could be sizable, while declining at this point to be specific while she continues to unravel the implications of the village error.
Lopez said the village has been able to make its bank loan payments for TID No. 3, but continues to miss paying itself back for money advanced to the TID from the village’s general fund.
Lopez said the 2020 tax surcharge would be used to, in part, repay the village’s general fund.
The village will collect $1,606,397 in village, K-12 school, county and tech school taxes this year and another $151,904 in TID taxes. Next year, the village will increase those TID taxes to make up for the two years of losses.
Lopez said she updated members of the TID No. 3 Joint Review Board (JRB), a five-member panel that is supposed to provide oversight, to the tax error.
She said she further discussed the issue with Edgar School District administrator Dr. Cari Guden, a JRB member, in advance of the district’s Feb. 18 operational referendum.
Board reaction to Lopez’s announcement was muted.
“Thank you for being thorough and looking back,” said trustee Patty Schroeder-Schuett.
Other trustees declined to ask Lopez any questions about the TID mistake.
Lopez said she and assessor Greg Schmidt reviewed all of Edgar’s TIF parcels to make sure that they were correctly included in TIDs.
She said the pair discovered two additional errors. Parcels owned by River Valley Cooperative and WEL Companies were included in TID No. 1, but these properties are not part of the TID, Lopez stated. She said the properties were low value and a 70.57 correction would have only an insignificant tax impact to Edgar residents.
The DOR was asked to comment on this story. It said it would respond with a statement in time for next week’s issue.
In other village board business:
_ Three incumbent trustees were nominated without opposition to serve new two-year terms on the village board. They are Cathy Schueller, Mike Butt and Ryan Hall.
_ Police Chief Jeanette Stankowski reported her department has completed this year’s DARE program at Edgar Public School. She said her department received a $500 DARE contribution from Ascension St. Clare’s Hospital, Weston.
_ Board members approved a Drive A Snowmobile To School Day event requested by Edgar FFA advisor Matt Reinders. The drive, like last year, will be from the R-Store to Edgar Public School. The board asked Reinders to give the Edgar Police Department a three-day advance notice to prepare for the event.
_ Board members discussed the need for part-time help with Police Chief Jeanette Stankowski. The chief said she could use additional part-time officers in order to accommodate offi cers who, working other jobs, need scheduling flexibility.
The chief said her department’s call volume has increased from 291 in 2013 to 785 in 2019 and that she feels the Edgar public wants additional law enforcement services. Trustee Jon Streit questioned whether Stankowski felt an officer should be scheduled all weekends and whether the chief herself worked weekends. She said yes to both questions.
_ Board members voted to pay employees an extra pay period in 2020 at their regular pay. Trustee Jon Streit cast the lone no vote. “You are getting a raise for doing nothing,” he said. “That’s wrong.”