Friday, January 18th, 2019

Don’t let this pilot fly

2

Waukesha Freeman 9/10/2015 Page 6A Opinion

Don’t let this pilot fly

County involved in Sunset Homes loan, too

Internal emails uncovered during open records requests reveal that the city of Waukesha’s proposed loan to Sunset Homes for home repairs is even bigger than reported. The emails also suggest that the financing is not as sound as council members were led to believe.Capture

In addition to the $1.6 million in loan money backed by possible reliance on tax incremental financing, City Planner Jennifer Andrews wrote to City Administrator Kevin Lahner, “I received approval to use up to $200,000 of our CDBG funds for loans to individual unit owners to replace windows and doors in the units.”

Andrews explained to Lahner and to the contractor that the money would be available on a “first come first serve basis” with the requirement that the work would be complete by Nov. 1.

Lahner told me before the city’s finance committee meeting Tuesday night that the community block grant money was approved by Waukesha County and contingent on the city loan. The $200,000 is in addition to the funds being loaned by the city, not part of them, raising the public financing to $1.8 million.

Or possibly more. Andrews also explored how much each condo owner in the Sunset Homes development would have to contribute in additional condo fees if the city loan was up to $2.5 million. (The rough estimate was an additional $152 for a total of $320 per month.) But at the current proposed level, City Attorney Brian Running expressed reservations about the security of the city loan. In an email to Andrews, Running explained that the condo fees are not sufficient collateral.

“Even if we get an assignment of dues, all that does is give us the right to sue the unit owners for their dues if the association defaults — having the right to file 120 separate lawsuits (worst-case scenario) is not much security.”

Running added, “I am very skeptical about their ability to secure the loans adequately.”

Running’s suggested the city “should be stringent about their efforts to get private financing first.” However, we learned during the Common Council meeting the condo owners had rejected a $500,000 private loan.

Running also suggested, “we should require them to obtain a mortgage on every unit only accept just an assignment of dues if they can show with convincing proof that they can’t get the unit owners to participate.”

Unfortunately, another email from Running indicated that reversing the council decision became more difficult when Alderman Andy Reiland, acting for the vacationing Mayor Shawn Reilly, signed the legislation allowing the tax incremental district to be amended to allow the loan. Reiland, who is opposed to the loan, was not told that he could’ve vetoed the resolution in Reilly’s absence. Reiland was also not aware that signing the legislation prevented Reilly from changing his mind and casting a veto himself.

Now the Common Council has two options to try to stop the loan. One of the members who voted for the loan could move to have the legislation reconsidered. The other option is when the city staff presents the loan itself for approval the Common Council could vote against it.

In an email from the city planner to a condo resident, she expects a tie vote by the council on the loan with Reilly casting the deciding vote. Reilly previously supported the loan at the Plan Committee level.

If the loan passes, we can expect similar loans around the city. The city administrator wrote Alderman Vance Skinner, “Once (sic) of the issues that was not discussed fully at the Common Council due a focus on some other issues, is that in my view, this project is one step in the direction of a larger strategy to control blight and prevent property value decline. Quite frankly, this is somewhat of a pilot project to determine how something like this would work, and then possibly extend the program to other areas of the City.”

Skinner supports this use of TID financing to subsidize the repairs of private homes. Judging from the emails received by the mayor, the public does not. The question is whether the aldermen will hear more from their constituents or from the city staff.

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Photo by Moira Wigderson

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