Expense, Revenue Projections Detailed For Beaver Dam’s TIF #7

(Beaver Dam) It would take the next two years to fund the purchase of eight acres of Highway 151 frontage property north of Beaver Dam using revenues from a nearby TIF District. The city council approved the $488-thousand purchase on Monday with lingering questions about specific expenses in the TIF. The plan approved will use the city’s public-private economic development agency – the Beaver Dam Area Development Corp – to make the buy before the city annexes the land and buys it at the same price from the Development Corp.

Trent Campbell, vice president of the Development Corp, told city officials that Tax Increment Finance District #7 is strong and – even without future growth – would generate a minimum of a half million dollars in increment each year for the city. While Campbell acknowledged Monday that he did not have the exact numbers available, he did provide ballpark figures but not specifics on expenses.

The city finance department has provided DailyDodge.com with specific numbers that confirm at least $533-thousand dollars in revenue each year for the next 16 years. However, after expenses, revenue for 2019 is only $66-thousand dollars, primarily because of a one-time expense related to the storm water utility.

Expenses from this year and the next two years will reduce projected revenue – assuming no growth – to $301-thousand dollars. After 2022, the city will no longer have $217-thousand dollars in debt payments from the establishment of the TIF. However, there will be $69-thousand dollars in payments needed for the new debt service taken on with the planned northside land purchase.

Therefore, coupled with miscellaneous expenses, the projected annual revenue for TIF #7 between 2023 and its closing in 2031 – again assuming no growth – is estimated at $448-thousand dollars.

 

Here are the numbers from the Beaver Dam Finance Department:

TID #7 base level information:

Creation date = 5/16/16

Last date to incur project costs = 5/16/31

Last year to collect increment = 2036 (the city will collect at least $500,000 for the next 16 years. $533,375 was levied in 2020 and future levies will not be less than this amount).

2019 incremental value = $21,978,000; will increase by approximately $2,000,0000 in 2020 due to a cold storage project.

 

2019 unaudited financial information:

 

Revenues – increment $529,995

Revenues – miscellaneous $8,246

Revenues – total $538,241

 

Expenditures – principal and interest on long-term debt $216,543

Expenditures – storm sewer improvements $240,115

Expenditures – miscellaneous $15,578

Expenditures – total $472,236

 

Net revenues over expenditures = $66,005

 

Other information:

 

1 – the storm sewer improvements were a one-time expense in 2019.

2 – the 2020 levy for TID 7 is $533,375

3 – the city will borrow the necessary funds to cover the council’s approval of the Frank property. Principal and interest are estimated to be $68,500 based on a borrowing of $550,000, 10-year term, and 4.50% interest rate.

4 – TID 7 can easily support the additional debt service from the Frank property purchase considering the storm sewer improvements are not recurring, and the district’s existing debt is paid off in 2022.