Transcript Document

Racine Revenue Sharing
Program
Presented to:
The Local Government Institute of Wisconsin
May 30, 2012
William Mielke, P.E., R.L.S.
[email protected] w (262) 542-5733
Presentation Overview
• The Racine Area
• The Problem Statement
• The Racine Experience
• The Intergovernmental Process
• The Agreements Reached
43
Washington
Waukesha
Racine
Area
Ozaukee
43
94
94
43
894
794
Milwaukee
894
43
94
Racine
43
94
Walworth
Kenosha
Area Served
The Racine Experience
• Racine extended utility service without annexation in
1960’s
• Previous tax base growth depended on annexations
• Industry and high-value homes migrated to surrounding
towns.
• Courthouse, hospital and other tax-exempts stayed in the
City
• Racine residents supported regional amenities such as the
Zoo, Library and Art Museum
• City customers carried the cost of water and wastewater
capacity to support growth in the towns.
• Fiscal capacity of City fell to the point where the tax rates
needed to be twice as high in the city.
2000 Equalized Property
Values per Capita
Costs for the City
Created by Surrounding
Communities
• New development causes an increase in
demand for regional facilities.
– Library system, courthouse, jail, hospitals,
schools, churches, museums, and major
parks.
Costs for the City
Created by Surrounding
Communities
• Transportation systems
are increasingly
burdened by traffic
from the surrounding
communities.
Costs for the City
Created by Surrounding
Communities
• Municipal service costs for regional tax
exempt facilities from police protection
to snow plowing are being borne by City
residents.
Impetus for Negotiations
• Expiration of 20-year sewer service agreements; need to
renew and to accommodate new development, particularly
along IH 94 corridor
• Need for an $80.0 million expansion to Racine’s
Wastewater Treatment Facility
• Racine’s ability to impose a sewer moratorium
• Concern by broader community interests over potential
economic stagnation (RAMAC)
• The big State stick: Wisconsin’s “little 208” law requiring
regulatory decisions about sewerage facilities to be
consistent with area wide water quality management plans
Dovetailing Interests
• City of Racine
– Fair funding of regional infrastructure and
services
– A share of the revenues from development
supported by its utility service
• Outlying Municipalities
– More self-determination
– Extension of sewer service
Nine Areas of Study /
Negotiation
•
•
•
•
•
•
•
Wastewater Treatment Facility
Racine Public Library
Racine Zoo
Racine Art Museum
Belle Urban Transit System
Racine County Sheriff’s Department
Eastern Racine County Highway
Jurisdiction
• Consolidated Dispatch Service
• Revenue Sharing
The Process
• Leadership by Racine County Executive
• Formation of informal group of chief elected
officials (HOG)
• Monthly dinner and discussion meetings
• Private sector venues and meeting
sponsorship
• Closed-door sessions
• City of Racine sponsored the work effort
• Ruekert/Mielke carried out the staff work
The Process
• Racine County Planning Director and SEWRPC
Executive Director reviewed consultant’s work,
facilitated discussion, and helped the surrounding
communities to understand that the City’s analyses
and conclusions were sound
• Once the heads of government reached conceptual
agreement on the issues, the administrators, lawyers,
and consultants forged a 100+ page agreement
• Agreement executed by principal parties on April 25,
2002
• Process took nearly four years
Revenue Sharing
Objectives
• Sharing of commercial / industrial tax base
• Reduction in competition for development
• Equalization of fiscal capacity
• Reduction of disparities in tax rates
• Transfers of revenue from wealthy
municipalities to poorer municipalities
WI Statutory Authority
• §66.0301 –
Intergovernmental Cooperation
• §66.0305 –
Political Subdivision Revenue Sharing
Existing Revenue Sharing
Models: Didn’t Quite Fit
• Only a handful of programs nationwide
• Extensive review of academic research
analyzing the major programs
• Four programs most similar to our
vision:
–
–
–
–
Minnesota Fiscal Disparities Act of 1971
Hackensack-Meadowlands, NJ
Charlottesville and Albermarle Co., VA
McFarland and Madison, WI
Racine’s Unique Revenue
Sharing Program
• Modified the shortcomings of the Minnesota
model
• One of the largest in the U.S.
• Negotiated, not legislated
• Unique formula accounts for commercial and
industrial property values and overall fiscal
capacity
• Payments always flow from high fiscal capacity
to low fiscal capacity communities
How the Racine Plan
Works
• 30 years of payments
• Formula includes two components:
– The sharing of commercial and
manufacturing tax base.
– The sharing of the overall tax base on the
basis of fiscal capacity.
Revenue Sharing
Formula
(
Shared
Commercial
/ Mfg. Tax
Base
Local Tax
Rate
Shared
Residential
Tax Base
)
Shared
Revenues
Revenues from New
Development
Effect of $10 Million
New Development
in Mt. Pleasant
Municipality
Town of Caledonia
2003 Payment
New
Revenue
Sharing Payment
Increase/
(Decrease)
in Payment
$ (194,810)
$ (193,956)
(628,201)
(633,726)
(5,525)
(18,446)
(18,432)
14
Town of Somers
1,455
1,467
12
Town of Yorkville
(32,938)
(32,923)
15
Village of Elmwood Park
(2,740)
(2,733)
7
Village of North Bay
(7,751)
(7,744)
7
Village of Sturtevant
(84,160)
(84,080)
80
Village of Wind Point
(48,932)
(48,892)
40
Town of Mt. Pleasant
Town of Raymond
City of Racine
$ 1,016,523
$1,021,019
Additional
Tax
Revenues
Generated
$ 854
$ 4,496
$67,400
Lessons Learned
• Achieving significant intermunicipal cooperation is
extremely difficult.
• Must have a Win/Win solution where all parties gain
something from the arrangement.
• Communities must be open to exploring all of the
potential advantages to cooperation.
• Resolving past issues such as boundary disputes or
addressing fiscal capacity disparities can foster
cooperation on new issues.
• Shared services must provide financial benefits to
taxpayers.
“I’m very sure that this agreement will be the most important document I’ve ever signed. I
am extremely privileged and proud to do so.”
~Joe Clementi, Chairperson, Town of Mount Pleasant