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Public Funding – Current Trends 
& Successful Strategies 
Presented By: 
Kurt Muchow 
vision to reality 
League of Wisconsin Municipalities 
2012 Annual Conference 
October 18, 2012
Session Agenda 
• Trends in Public Funding 
• Funding Opportunities 
• Funding Strategies 
• Example Projects
Trends in Public Funding 
• Funding Roller Coaster 
• Significant Increase in 
Funding 
– American Recovery & 
Reinvestment Act (ARRA) 
– 2008 Flood Recovery 
• Regular Programs Stimulated 
– Urgency to Allocate Funds 
– Relaxation of Program Rules 
• “Post Stimulus” Funding Era
Trends in Public Funding 
• Municipal Revenue Trends 
– General Fund Revenue Very Limited 
– Shift to Non-Tax Levy Sources of Revenue 
•Sewer & Water Utilities 
•Stormwater Utilities 
•User Fees 
•Impact Fees 
– Why? Additional 
Revenue & More Equitable
Trends in Public Funding 
• Private Development Relies More On 
Public Funding 
– Private Financing is Difficult to Access 
– Developers Need Public Funding to Make 
Projects Feasible 
– Sources of Funding 
•Tax Incremental Financing (TIF) 
•Grants & Tax Credits 
•Municipal Funded Private Development 
Secured with Special Assessments
Trends in Public Funding 
State of Wisconsin 
– Emphasis on Economic Development 
– Wis. Economic Development Corp. 
• Community Development 
– Infrastructure 
– Redevelopment 
– Disaster Recovery 
– Wisconsin Main Street Program 
• Business Development 
– Direct Business Loans 
– Economic Development Tax Credits 
– Jobs Tax Credits 
– Training Grants
Trends in Public Funding 
Tax Incremental Financing (TIF) 
Multiple Law Changes which have 
Enhanced Program 
– 2004 Law Changes 
– 2008 Law Changes 
– 2010 Law Changes 
– 2011 Law Changes
Public Funding Opportunities 
WDNR Safe Drinking Water Loan (SDWL) 
• 2013 Allocation 
– $56.298 million of Loan 
– $4.642 million of Principal Forgiveness 
• 2013 Applications = $38.454 million 
• 2013 Surplus Funds 
– $24.5 million of Loan 
– $0 of Principal Forgiveness 
• Surplus of Funds, Can Apply Until March 31, 2013 
• Need ITA & PERF Submitted by 12/31/11, or Get 
Emergency Waiver 
• Note: WDNR currently does not have authority to 
distribute Principal Forgiveness. Expects Legislature to 
approve in Spring of 2013. Until then, communities who 
have been allocated Principal Forgiveness have to wait, 
or proceed at risk of it not being there.
Public Funding Opportunities 
WDNR Safe Drinking Water Loan 
(SDWL) 
• 2014 Program 
– “Business as Usual” 
– Expect Stable Funding Levels 
– Expect to have Principal Forgiveness Again 
– ITA & PERFs by 12/31/2012 
– Application Deadline: June 30, 2013 
– Reduced Interest Rate Subsidy & Hardship 
Assistance (Interest Rates Range from 3.5% 
to 1.15% 
– Expect to have Principal Forgiveness Again 
Recent Changes 
• Davis Bacon Applies to All Projects
Public Funding Opportunities 
WDNR CWF Program 
•“Business as Usual” 
•2014 Program 
– Expect Stable Funding Levels 
– Expect to have Principal 
Forgiveness Again 
– ITA & PERFs by 12/31/2012 
– Application Deadline (Hardship 
Assistance): June 30, 2013 
– Application Deadline (Principal 
Forgiveness): Sept. 30, 2013 
– Interest rates range from 3.5% to 
1.155% 
•Recent Changes 
– Davis Bacon Applies to All Projects
Public Funding Opportunities 
Transportation Programs 
•State Funding Levels are 
Increasing 
•Federal Funding Levels 
Reduced 
•Funding Cycles 
– STP – Urban – January 2013 
– Local Road Improvement 
Program – Nov. 1, 2012 
– Transportation Economic 
Assistance (TEA) - Continuous
Public Funding Opportunities 
Federal Surface Transportation Bill (MAP-20) 
– Signed into law July 6, 2012 
– New “Transportation Alternatives Program” 
– Replaces: 
•Transportation Enhancement 
•Safe Routes to Schools 
•Scenic Byways 
•Recreational Trails
Public Funding Opportunities 
Transportation Alternatives Program 
– Funding Allocation Reduced from $1.2 billion 
per year to $808 million 
– 50% is allocated directly to larger 
metropolitan areas and other areas with 
capacity 
– 50% is allocated to smaller communities, 
however, if funding is not used, states can 
spend money on other state needs. 
– Specific programs will be developed in 
upcoming months.
Public Funding Opportunities 
WEDC – Community Development Programs 
– CDBG – Economic Development 
•Annual Allocation = $8.5 million 
•WEDC no longer uses this program 
•Reallocated Funds to CDBG-PF 
– CDBG-Public Facilities (PF) 
•Annual Allocation: 
$8.5 million + $8.5 million = $17 million
Public Funding Opportunities 
WEDC – Community Development Programs 
– CDBG – PF Categories 
•Public Infrastructure (70%) 
•Community Facilities (25%) 
•Downtown Revitalization (5%) 
– CDBG National Objectives 
•Low- to Moderate-Income Benefit (>51%) 
•Slum and Blight Removal 
•Local Urgent Need
Public Funding Opportunities 
CDBG PF Allocation of Funds 
– Minimum of 70% must go to LMI Projects 
– 30% can go to Blight & Urgent Need 
– Allocation for Local Urgent Need = $1.5M 
– Communities can do Income Survey to 
Document LMI 
•Roughly 7-8 communities per year 
•Survey usually results in raising % by a few points
Public Funding Opportunities 
WEDC – Community Development Program 
– Emphasis on Downtown Revitalization 
•Greatest impact on local economy 
•Incorporate Main Street Program ideas 
– Preference for “Community-Wide” Projects 
•Can still do “target areas”, but will be lower 
priority 
– Preference for Infrastructure Projects that 
increase capacity vs. maintenance 
– Will be updating application in December
What Communities Can Do 
• Capital Improvements 
Planning 
– 3 to 5 Year Planning Period 
– Develop Financing 
Strategy 
– Update Each Year at 
Budget Time 
• Combine Multiple 
Funding Sources 
• Public/Private Partnership 
• Creative 
• Realistic 
• Be Persistent
What Communities Can Do 
• Take Advantage of TIF Law Changes 
– Extended Expenditure Periods 
– Multiple TIF District Amendments (4) 
– One-half Mile Expenditure Radius 
– Distressed TID Designations 
• TIF Law Changes Can Open Up Significant 
Opportunities
What Communities Can Do 
Use Non General Fund Sources of Funding 
– Tax Incremental Financing 
– Sewer & Water Utilities 
– Stormwater Utilities 
– User Fees 
– Impact Fees
What Communities Can Do 
Municipal Funded Private Development 
– Municipality Funding Strategy 
• Generally Located in TID 
• Municipal Borrowing: G.O. Bonds or Special Assessment Bonds 
• Secure with Special Assessment 
– Developer Commitments 
• Create Economic Benefits: Tax Base & Jobs 
• Repay Municipal Debt: TIF Revenue and/or Special Assessments 
• Guarantee Repayment 
– Development Agreement 
• Community Must Avoid Putting Public Funds at Risk! 
• Be Sure Developer & Project are Solid 
• Use Professionals to Assist with Project
Example Project: TIF Program 
Existing TIDs
Example Project: TIF Program 
Existing TIDs with 
one-half mile radius
Example Project: TIF Program 
Existing TIDs with 
Eligible Projects 
Railroad Crossing 
Safety 
Improvements 
Downtown 
Revitalization 
Blackhawk 
Ave. 
Enhancements 
USH 18 
Bypass 
Marquette Road 
Reconstruction
Example Project 
• Rural City < 10,000 Population (Not LMI) 
• City Infrastructure Reconstruction 
– 10,000 LF of Street & Utility Reconstruction 
– Downtown Enhancement 
– Total Project Cost = $4.3 Million 
•$1.5 M WDNR CWF Loan 
•$1.7 M WDNR SDWL Loan 
•$660,000 WDOT Enhancement Grant 
•$300,000 CDBG Grant 
•$105,000 Tax Incremental Financing 
•$50,000 Fundraiser
Example Project 
• Urban Village (Non-LMI) 
• Municipal Funded Private Development 
– Project Summary 
• Private Business Park, 100 acres 
• $5,000,000 Development Cost 
– Village Obligations 
• Execute Development Agreement 
• Create TID & Special Assessment 
• Issue Bonds to Fund Infrastructure 
• Design & Construct Infrastructure 
– Developer Obligations 
• Execute Development Agreement 
• Implement Private Development 
• Repay Village Bond through TIF 
Revenue & Special Assessment Payments
Example Project 
• Rural Village (LMI) 
• Project Summary 
– New Water Tower 
– Water Distribution System Improvements 
– Well Rehab & Emergency Generator 
• Total Project Cost = $1,820,000 
– $600,000 CDBG-PF Grant 
– $1.22M WDNR SDWL Loan
Example Project 
• Rural Village (Non-LMI) 
• Project Summary 
– 80-acre Business Park 
– Creation of $9.0M new tax base 
– Creation of 150 jobs 
• Total Project Cost = $3.5M 
– $250,000 CDBG-PFED Grant 
– $530,000 DOT-TEA Grant 
– $2,720,000 TIF
Questions & Answers 
Kurt Muchow 
Vierbicher Associates, Inc. 
400 Viking Drive 
P.O. Box 379 
Reedsburg, WI 
(608) 524-6468 
Email: kmuc@vierbicher.com

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Public Funding-Current Trends & Successful Strategies

  • 1. Public Funding – Current Trends & Successful Strategies Presented By: Kurt Muchow vision to reality League of Wisconsin Municipalities 2012 Annual Conference October 18, 2012
  • 2. Session Agenda • Trends in Public Funding • Funding Opportunities • Funding Strategies • Example Projects
  • 3. Trends in Public Funding • Funding Roller Coaster • Significant Increase in Funding – American Recovery & Reinvestment Act (ARRA) – 2008 Flood Recovery • Regular Programs Stimulated – Urgency to Allocate Funds – Relaxation of Program Rules • “Post Stimulus” Funding Era
  • 4. Trends in Public Funding • Municipal Revenue Trends – General Fund Revenue Very Limited – Shift to Non-Tax Levy Sources of Revenue •Sewer & Water Utilities •Stormwater Utilities •User Fees •Impact Fees – Why? Additional Revenue & More Equitable
  • 5. Trends in Public Funding • Private Development Relies More On Public Funding – Private Financing is Difficult to Access – Developers Need Public Funding to Make Projects Feasible – Sources of Funding •Tax Incremental Financing (TIF) •Grants & Tax Credits •Municipal Funded Private Development Secured with Special Assessments
  • 6. Trends in Public Funding State of Wisconsin – Emphasis on Economic Development – Wis. Economic Development Corp. • Community Development – Infrastructure – Redevelopment – Disaster Recovery – Wisconsin Main Street Program • Business Development – Direct Business Loans – Economic Development Tax Credits – Jobs Tax Credits – Training Grants
  • 7. Trends in Public Funding Tax Incremental Financing (TIF) Multiple Law Changes which have Enhanced Program – 2004 Law Changes – 2008 Law Changes – 2010 Law Changes – 2011 Law Changes
  • 8. Public Funding Opportunities WDNR Safe Drinking Water Loan (SDWL) • 2013 Allocation – $56.298 million of Loan – $4.642 million of Principal Forgiveness • 2013 Applications = $38.454 million • 2013 Surplus Funds – $24.5 million of Loan – $0 of Principal Forgiveness • Surplus of Funds, Can Apply Until March 31, 2013 • Need ITA & PERF Submitted by 12/31/11, or Get Emergency Waiver • Note: WDNR currently does not have authority to distribute Principal Forgiveness. Expects Legislature to approve in Spring of 2013. Until then, communities who have been allocated Principal Forgiveness have to wait, or proceed at risk of it not being there.
  • 9. Public Funding Opportunities WDNR Safe Drinking Water Loan (SDWL) • 2014 Program – “Business as Usual” – Expect Stable Funding Levels – Expect to have Principal Forgiveness Again – ITA & PERFs by 12/31/2012 – Application Deadline: June 30, 2013 – Reduced Interest Rate Subsidy & Hardship Assistance (Interest Rates Range from 3.5% to 1.15% – Expect to have Principal Forgiveness Again Recent Changes • Davis Bacon Applies to All Projects
  • 10. Public Funding Opportunities WDNR CWF Program •“Business as Usual” •2014 Program – Expect Stable Funding Levels – Expect to have Principal Forgiveness Again – ITA & PERFs by 12/31/2012 – Application Deadline (Hardship Assistance): June 30, 2013 – Application Deadline (Principal Forgiveness): Sept. 30, 2013 – Interest rates range from 3.5% to 1.155% •Recent Changes – Davis Bacon Applies to All Projects
  • 11. Public Funding Opportunities Transportation Programs •State Funding Levels are Increasing •Federal Funding Levels Reduced •Funding Cycles – STP – Urban – January 2013 – Local Road Improvement Program – Nov. 1, 2012 – Transportation Economic Assistance (TEA) - Continuous
  • 12. Public Funding Opportunities Federal Surface Transportation Bill (MAP-20) – Signed into law July 6, 2012 – New “Transportation Alternatives Program” – Replaces: •Transportation Enhancement •Safe Routes to Schools •Scenic Byways •Recreational Trails
  • 13. Public Funding Opportunities Transportation Alternatives Program – Funding Allocation Reduced from $1.2 billion per year to $808 million – 50% is allocated directly to larger metropolitan areas and other areas with capacity – 50% is allocated to smaller communities, however, if funding is not used, states can spend money on other state needs. – Specific programs will be developed in upcoming months.
  • 14. Public Funding Opportunities WEDC – Community Development Programs – CDBG – Economic Development •Annual Allocation = $8.5 million •WEDC no longer uses this program •Reallocated Funds to CDBG-PF – CDBG-Public Facilities (PF) •Annual Allocation: $8.5 million + $8.5 million = $17 million
  • 15. Public Funding Opportunities WEDC – Community Development Programs – CDBG – PF Categories •Public Infrastructure (70%) •Community Facilities (25%) •Downtown Revitalization (5%) – CDBG National Objectives •Low- to Moderate-Income Benefit (>51%) •Slum and Blight Removal •Local Urgent Need
  • 16. Public Funding Opportunities CDBG PF Allocation of Funds – Minimum of 70% must go to LMI Projects – 30% can go to Blight & Urgent Need – Allocation for Local Urgent Need = $1.5M – Communities can do Income Survey to Document LMI •Roughly 7-8 communities per year •Survey usually results in raising % by a few points
  • 17. Public Funding Opportunities WEDC – Community Development Program – Emphasis on Downtown Revitalization •Greatest impact on local economy •Incorporate Main Street Program ideas – Preference for “Community-Wide” Projects •Can still do “target areas”, but will be lower priority – Preference for Infrastructure Projects that increase capacity vs. maintenance – Will be updating application in December
  • 18. What Communities Can Do • Capital Improvements Planning – 3 to 5 Year Planning Period – Develop Financing Strategy – Update Each Year at Budget Time • Combine Multiple Funding Sources • Public/Private Partnership • Creative • Realistic • Be Persistent
  • 19. What Communities Can Do • Take Advantage of TIF Law Changes – Extended Expenditure Periods – Multiple TIF District Amendments (4) – One-half Mile Expenditure Radius – Distressed TID Designations • TIF Law Changes Can Open Up Significant Opportunities
  • 20. What Communities Can Do Use Non General Fund Sources of Funding – Tax Incremental Financing – Sewer & Water Utilities – Stormwater Utilities – User Fees – Impact Fees
  • 21. What Communities Can Do Municipal Funded Private Development – Municipality Funding Strategy • Generally Located in TID • Municipal Borrowing: G.O. Bonds or Special Assessment Bonds • Secure with Special Assessment – Developer Commitments • Create Economic Benefits: Tax Base & Jobs • Repay Municipal Debt: TIF Revenue and/or Special Assessments • Guarantee Repayment – Development Agreement • Community Must Avoid Putting Public Funds at Risk! • Be Sure Developer & Project are Solid • Use Professionals to Assist with Project
  • 22. Example Project: TIF Program Existing TIDs
  • 23. Example Project: TIF Program Existing TIDs with one-half mile radius
  • 24. Example Project: TIF Program Existing TIDs with Eligible Projects Railroad Crossing Safety Improvements Downtown Revitalization Blackhawk Ave. Enhancements USH 18 Bypass Marquette Road Reconstruction
  • 25. Example Project • Rural City < 10,000 Population (Not LMI) • City Infrastructure Reconstruction – 10,000 LF of Street & Utility Reconstruction – Downtown Enhancement – Total Project Cost = $4.3 Million •$1.5 M WDNR CWF Loan •$1.7 M WDNR SDWL Loan •$660,000 WDOT Enhancement Grant •$300,000 CDBG Grant •$105,000 Tax Incremental Financing •$50,000 Fundraiser
  • 26. Example Project • Urban Village (Non-LMI) • Municipal Funded Private Development – Project Summary • Private Business Park, 100 acres • $5,000,000 Development Cost – Village Obligations • Execute Development Agreement • Create TID & Special Assessment • Issue Bonds to Fund Infrastructure • Design & Construct Infrastructure – Developer Obligations • Execute Development Agreement • Implement Private Development • Repay Village Bond through TIF Revenue & Special Assessment Payments
  • 27. Example Project • Rural Village (LMI) • Project Summary – New Water Tower – Water Distribution System Improvements – Well Rehab & Emergency Generator • Total Project Cost = $1,820,000 – $600,000 CDBG-PF Grant – $1.22M WDNR SDWL Loan
  • 28. Example Project • Rural Village (Non-LMI) • Project Summary – 80-acre Business Park – Creation of $9.0M new tax base – Creation of 150 jobs • Total Project Cost = $3.5M – $250,000 CDBG-PFED Grant – $530,000 DOT-TEA Grant – $2,720,000 TIF
  • 29. Questions & Answers Kurt Muchow Vierbicher Associates, Inc. 400 Viking Drive P.O. Box 379 Reedsburg, WI (608) 524-6468 Email: kmuc@vierbicher.com