Colby borrows $300,000, moves to create new TIF
Colby’s city council agreed Monday to borrow $300,000 from a local bank and also took a step toward creating a new TIF district — actions both related to the recent purchase of land for the extension of Community Drive.
The $300,000 loan is being issued by Forward Bank, with an interest rate of 1.75 percent and a five-year payback period. The money will be used to cover the cost of purchasing a 37-acre parcel of land at 1004 N. Division St. from Audrey Venzke, which cost the city $297,900.
City clerk Connie Gurtner said the new debt will allow the city to raise its property tax levy next year in order to make principal and interest payments. The first payment is due on April 15, 2021, with a second payment due on Dec. 15.
Property taxes will be used to make the twice-annual payments until the loans is fully paid off in 2025.
The newly approved loan allowed the city to raise its tax levy by $31,839 next year (5.76 percent), up to $584,783. If the city had not borrowed the money, the amount of taxes collected would have dropped by about $32,000.
Gurtner has told the council that it’s best to use the city’s borrowing capacity at this time to avoid major fluctuations in the tax levy over time.
“I think it’s beneficial for the city to borrow this money — especially with the interest rate as favorable as it is — to keep our levy steady,” she said.
The city may also borrow additional money from Clark Electric Co-op, which has a revolving loan fund to support development projects within its service area. Representatives from the co-op said as much as $300,000 may be available to the city for street and utility extensions.
City officials have not said much publicly about their plans for the parcel, other than extending Community Drive to the north so that it connects with Elderberry Road near Kwik Trip.
Plans for that area of the city may become more fleshed out if the council proceeds with creating a new TIF district, which would be able to use the taxes generated by any new developments to pay for new roads and other public infrastructure.
The council on Monday approved a $13,000 contract with MSA Professional Services to develop a plan for creating what would be Colby’s TIF district number 3. Colby’s TIF 2 just closed this year after paying off all of its expenses over a 20-year period.
Under the terms of the contract, MSA will conduct up to two planning meetings, prepare an economic feasibility study and develop the TIF district boundaries for elected officials to approve.
MSA will also help form a joint review board with representatives of the Colby School District, Marathon County and Northcentral Technical College, who will need to sign off on forfeiting tax revenue on new developments over the life of the TIF district.
Once the TIF plan is approved locally, MSA will also submit all of the required documents to the Wisconsin Department of Revenue, which oversees TIF districts throughout the state.
The TIF district itself would not be created until next year, since the deadline has already passed to establish a new district this year. Once the district is established, all of the property taxes on newly constructed buildings within the district would stay with the city instead of being distributed to other government entities.
_ The council adopted a 2021 budget that includes about $1.5 million in expenses and revenues, including the $584,783 tax levy, $459,700 in shared revenue from the state and $149,456 in state transportation aid. No residents showed up to comment on the budget during a public hearing held Monday.
_ The council approved 58-cent hourly raises for all city employees, plus an additional 25-cents-per-hour for Al Raatz and Clint Smith for duties related to DNR requirements. Of the 58-cent raises, 40 cents came from applying the increase in the Consumer Price Index (1.56 percent) to the entire pool of wages and distributing it equally among employees. The other 18 cents came from sharing 50 percent of the city’s health insurance savings for next year with city employees. The 25-cent raises for Raatz and Smith also came from the insurance savings.
_ The council renewed the city’s health insurance plan through Spectrum Employee Benefits Co-op and its dental plan through Delta Dental — both of which had 0 percent increases for 2021.
_ The council approved the Colby-Abbotsford Police Department’s enrollment in the Spectrum health insurance co-op and also approved a new one-year contract with the local police officers union.
_ The council authorized the city clerk’s office to close on the day after Thanksgiving and also changed next month’s meeting from Dec. 1 to Dec. 8, with the start time at 6:30 p.m.
