Paris to send out letter with answers to IGA FAQs

All Paris residents should be soon receiving a letter answering  frequently asked questions about the intergovernmental agreement with Somers.

A copy of the letter was posted on the town website Thursday and distributed to local media via email.

Answering questions the public posed about the IGA was something the board promised to do at the April 19 town annual meeting, which was dominated by questions about the IGA.

Most of the people at that meeting live in the area of Paris that under the IGA would be transferred to Somers. The introduction to the FAQs says the decision was made to distribute the information to all residents because the IGA is “significant to all Town residents, and so vital to the entire Town’s future.”

“The IGA addresses all of the Town’s most pressing problems and allows Paris to remain Paris,” the answer to one of the FAQ’s states.

The agreement will have Paris transfer designated land in the town along I-94 into the village of Somers. Villages have easier access to some development tools, such as tax increment financing. Paris and Somers will share revenue from development in the area controlled by the agreement. A commission with representation from both municipalities will govern the development activities within the development corridor. The commission will have no tax powers. The agreement says Paris also will fund two loan pools for Somers to spur development. Somers will also agree not to annex further territory from Paris. Both boards approved the agreement unanimously, but its implementation has been tied up by a legal challenge.

Here are the whole FAQs:

FAQS

1. Why did the Town enter into the IGA with Somers? We love Paris as it currently is—why did it have to change?

2. Was there anything improper about the way the deal was negotiated or approved?

3. Why wasn’t the City of Kenosha included in the IGA discussions? 

4. How much is Paris actually paying to Somers under the IGA? Why is it paying any amount?

5. What’s up with the loans? Why is Paris acting like a bank for Somers? 

6. Is it true that Somers cannot extend water and sewer service to the area being transferred under the IGA? 

7. What about the lawsuit that was filed? 

8. Is it true that there were adequate petition signatures filed to require a referendum on the IGA? 

9. If I have additional questions, what should I do?

ANSWERS

1. Why did the Town enter into the IGA with Somers? We love Paris as it currently is—why did it have to change?

We love Paris, too—that’s why we negotiated the IGA.  To fully understand the reasons for the IGA, a little background is in order.

The first factor to bear in mind is that Paris is a town, and under state law, towns are subject to piecemeal annexation by incorporated villages and cities.  Therefore, without some sort of boundary protection agreement in place, Paris stood to lose residents and territory without having any say at all in the process.  Towns also don’t have access to the same tools to facilitate development, such as tax incremental financing, as are available to incorporated municipalities under state law.

Another significant factor, intertwined with the first, is that Paris abuts the I-94 corridor, one of the fastest developing areas of the state and, indeed, of the entire region.  That being the case, it was only a matter of time before the significant development pressure that can already be seen taking shape along the Interstate began impacting Paris directly.  Faced with such intense development pressure, the Town Board recognized that unless something was done, and done soon, not only was the Town certain to lose this highly valuable territory along the Interstate as it developed but, even worse, Paris would have no input over how the land developed, which could have had a very negative impact on the remaining portions of the Town and its residents.

The final factor contributing to the need for the IGA is the questionable long-term future of the Waste Management landfill.  For decades, Paris has received annual payments from Waste Management for hosting the landfill, which have enabled Paris to completely fund its operations without a town tax and also to pay most of the County tax obligations of its residents.  While these payments have been a remarkable blessing, they have also led to a situation in which the Town is, at present, entirely dependent on the landfill’s continued operation.  In recent years, however, due to changes in state law and other factors, Waste Management’s annual payments to the Town have been reduced significantly, and the previously unthinkable prospect of the landfill’s closure has even been discussed.  So the Town Board has been forced to grapple with the fact that the Town’s sole revenue source is diminishing and could go away altogether.

Most communities faced with this situation could protect their residents by fostering business development to diversify the community’s tax base.  Before the IGA, though, this approach would have been counterproductive for Paris.  That is because the Town has no tax levy of its own, and it also pays the lion’s share of its residents’ County taxes, so the effect is that any new development in Paris actually hurts the Town’s finances, because development generates no tax revenue for the Town and it causes Paris to make ever-larger outlays to cover the development’s (often significant) County tax obligation, further depleting the Town’s coffers.

Unless something changed, therefore, Paris faced the prospect of losing residents and territory to annexation, and the Town’s reserves to diminishing landfill payments and increased County tax outlays, all of which would result in a situation where Town residents would not only have to bear their full County taxes, but also the full costs of operating the Town, with very little new development to help carry the costs.

The Paris-Somers IGA addresses all these concerns.

First and foremost, the agreement gives the Town meaningful boundary protection.  For the duration of the IGA, no additional land can be annexed into Somers without the approval of a supermajority of the intergovernmental commission, which is half controlled by Paris.  Moreover, if Somers were to let the agreement lapse at the end of its 10-year term, the Village would have to repay all amounts it received from Paris under the IGA, plus interest, plus an additional amount equating to 20 years’ future value of the area that was transferred to Somers under the IGA.

The IGA addresses the Town’s other concerns as well.  In addition to the boundary protection, the IGA puts in place a mechanism by which Paris can ensure that the transferred area develops in manner consistent with the Town’s long-term plan.  The IGA also sets up a commission, answerable to the parties’ respective boards and, ultimately, to the voters, to see to it that the agreement is fairly implemented and to facilitate the area’s development.  Finally, the IGA enables Paris and its residents to actually share in the financial benefits of that development, by enabling area property owners to capitalize on the value of their land when and as they see fit.

In short, the IGA addresses all of the Town’s most pressing problems and allows Paris to remain Paris.

2. Was there anything improper about the way the deal was negotiated or approved?

Absolutely not.  The nature of negotiations is such that each party must be able to keep its strategy discussions confidential so that its interests and negotiating position aren’t compromised.  For this reason, state law allows local government discussions regarding negotiations of this sort to be held in closed session.

That being said, though, it was important to the Town Board that as soon as the draft IGA was in a form that appeared to be close to final, it should be released to the public.  In fact, Paris began releasing drafts of the agreement to the public even before the final details were worked out with Somers.  Paris officials also worked with a local Internet newspaper to keep the most up-to-date drafts of the IGA available online.  Moreover, rather than simply give the minimal public notice required by state statute, Paris sent notice of the public hearing to every Town resident.  Town officials also actively sought to inform Paris residents about the details of IGA, by going door-to-door to discuss it with residents, and by holding “office hours” at the Town Hall, totaling 18 hours over three days, for the express purpose of addressing any questions or concerns that residents had.

3. Why wasn’t the City of Kenosha included in the IGA discussions?

 Paris representatives have had numerous conversations over the years with Kenosha officials, including relatively recently, regarding a possible agreement between the City and Town that would both protect the Town’s boundaries and also provide for mutually-beneficial cost sharing to facilitate development.  Unfortunately, because of the way state law treats towns as opposed to cities, Kenosha had very little incentive to discuss any agreement with Paris that would have benefited both parties, rather than just the City.  After Somers recently incorporated, though, the new village indicated to Paris that it was both able and willing to enter negotiations for an IGA that would be mutually-beneficial to the parties, rather than completely one-sided.

4. How much is Paris actually paying to Somers under the IGA? Why is it paying any amount?

Paris is making a one-time payment of $1.25 million to Somers under the IGA.  To understand the reason for the payment, it’s important to bear in mind that, under state law, a city or village can annex land from a town without any compensation at all to the town for the lost territory.  Therefore, IGAs that include boundary protection for a town, like the current IGA does, almost always require the town to make a payment to the incorporated municipality in exchange for the boundary protection.  In this case, that payment is $1.25 million.  The agreement also provides for the payment by Paris of up to $500,000 to defray Somers’ costs related to implementing the IGA.

Weighed against the many benefits of the IGA, including securing meaningful boundary protection and enabling the Town to share in the transferred area’s economic growth, and considering the size of the payment relative to the overall value of the Town’s reserve, which has been saved up over the years largely for this purpose, the Town Board considers this money well spent.  Moreover, under the agreement, the Town will actually recoup these payments over time, because the Town will receive revenue under the IGA that it would not have received otherwise, since the Town has no tax levy of its own.  In fact, because the transferred area has the potential to become one of the most successful development areas in the state, Paris could actually end up recouping its IGA investment many times over.

It’s also worth noting that the amount Paris is paying under this IGA is significantly less than amounts paid by other towns under similar agreements.  For example, as part of the recent IGA between the Town of Somers and the City of Kenosha, Somers had to pay the City $5 million to secure it borders.  Likewise, when officials from Paris and Kenosha had preliminary discussions a few years back regarding a possible Paris-Kenosha IGA, the City indicated that it would require a payment of $10 million from Paris as part of the deal—and even that huge amount would have secured Paris’s borders for only a short time.  So the amount paid by Paris to Somers under this IGA is both common and reasonable when compared with comparable agreements.

5. What’s up with the loans? Why is Paris acting like a bank for Somers?

 The IGA provides Somers with access to two loan funds provided by Paris.  One loan, which is capped at $3 million, provides Somers with a source of funds to offset any new costs that it incurs strictly as a result of the agreement.  Because, by definition, Somers would not have incurred such costs in the first place absent the IGA, the parties agreed that it was appropriate that this $3 million loan fund would be interest-free.

The second loan fund, which is a revolving loan fund capped at $5 million, can be used by Somers for any lawful purpose.  Somers does pay interest to the Town on this revolving loan fund.  The IGA is structured, though, such that Somers is able to realize a lower interest rate under the IGA than it otherwise would have had to pay, yet also that Paris is made whole by Somers’ interest payments relative to the earnings that the Town would have otherwise received on its funds.  So the revolving loan is a win-win for the communities.  Plus, the revolving loan fund allows Somers to improve its overall credit rating, which will end up saving both communities money when it comes time to finance the development of the transferred area.  In the end, because Paris will share equally in the area’s development under the IGA, the Town has a vested interest in seeing to it that the area attracts the best development possible.  The IGA’s loan provisions will help make that happen.

6. Is it true that Somers cannot extend water and sewer service to the area being transferred under the IGA?

Not at all.  Somers currently gets water and sewer service from the City of Kenosha and there is absolutely nothing in or about the IGA that prohibits Kenosha from providing water and sewer service to the transferred area as well.  In fact, Somers’ attorneys who negotiated the Village’s IGA with the City have indicated that they believe the current agreements already require Kenosha to provide water and sewer service to the entire Village, including the new areas that were added under the IGA.  Given this fact, and given the vital importance to the county, region and, indeed, the entire state of ensuring that this gateway to Wisconsin is developed to its highest and best use, the Town Board is confident that the area will be served with water and sewer in relatively short order.

It’s also worth noting that the cost of constructing new water and sewer mains will almost certainly be paid for by new development in the area, so extending services would likely cost Kenosha nothing.  To the contrary, providing water and sewer service to the transferred area would actuallybenefit the City, by bringing in hundreds of new utility customers to help pay for the City’s existing water and sewer infrastructure.  Not to mention, of course, that facilitating new development in the transferred area would create hundreds of new jobs and dramatically benefit the entire region economically, particularly Kenosha as the largest nearby community.  So there’s no reason that Kenosha couldn’t provide water and sewer service to the transferred area and several good reasons that it should want to do so.

If Kenosha nevertheless chooses to fight the extension of water and sewer service to the transferred territory, therefore, it could only mean that having new customers for its utilities and ashare of the value of new development isn’t enough for the City—that Kenosha demands it all for itself, including that residents must be forced into the City to get water and sewer, where their taxes would be more than twice as high as they would be in Somers.  By contrast to Kenosha’s approach, the Paris-Somers IGA sets up a situation where all three communities, as well as residents both in the area being transferred and those remaining in the Town, are best positioned to reap the benefits of the area’s inevitable future economic development and growth.  And, frankly, if Kenosha does insist on taking a “my way or the highway”-type approach to the area and to its neighboring communities, that’s all the more reason that the IGA and its boundary protection are vital to the Town’s interests.

7. What about the lawsuit that was filed?

Almost as soon as the IGA was effective, the City of Kenosha and a few Paris residents filed suit against Somers challenging the agreement.  The lawsuit alleges that Somers made various procedural missteps regarding the IGA’s approval, which they believe should nullify the agreement.  Paris was recently brought into the suit as well by three property owners who claim that they never received the public hearing notice that was sent to them via certified mail.  The Town is confident that it followed proper procedures in approving the IGA.

An additional claim was recently added to the lawsuit alleging that Paris wrongfully rejected a petition seeking a referendum on the IGA.  As discussed below, the Town does not agree with this most recent allegation either.

8. Is it true that there were adequate petition signatures filed to require a referendum on the IGA?

No.  The petitioners’ contention that they filed an adequate number of signatures is based on their position that it is only those electors in the area transferred from Paris to Somers that should count toward the petition threshold, and presumably only those electors who should be allowed to vote on the IGA were a referendum election held.  The Town Clerk concluded, though, as did Somers’ clerk when he was presented with petitions seeking a referendum on the Somers Village-Town consolidation IGA just last year, that it is actually the number of electors in the entire Town from which the adequacy of referendum petitions must be based and who, if the referendum were triggered, would get to vote on the IGA.  Significantly, Somers’ Clerk’s determination was challenged to the state’s Government Accountability Board (GAB) by a person who made the exact same argument the petitioners now allege, and the GAB determined that the Somers’ clerk’s determination was not improper.

In essence, the petitioners argue that it is only their voice that should count regarding the IGA.  The Somers and Paris Clerks, however, read the statute as providing that, because the IGA affects the entire Town, all Town voters should have a voice as to whether there should be referendum and, if so, whether the IGA should take effect.  The GAB previously reviewed this exact issue and affirmed the Clerks’ reading.

9. If I have additional questions, what should I do?

You should always feel free to direct any questions to the Town Clerk at the Town Hall, who will do her best to answer your questions or to direct them to the person best suited to do so.  The Town will also work to provide residents with periodic updates via the Town website, which can be viewed at www.town-of-paris.org.

As always, thank you for your continued support and interest in Town government.

Sincerely,

Town of Paris