Committee-of-the-Whole Agenda Packet - 7: 00 PM

City of Oconomowoc Committee-Of-The-Whole Tuesday, March 03, 2026 - 7:00 PM City Hall - Council Chambers 174 E. Wisconsin Ave. Oconomowoc, WI 53066 (Or immediately following Public Services) Notice: If a person with a disability requires that the meeting be accessible or that materials at the meeting be in accessible format, call the City Clerk at least 48 hours prior to the meeting to request adequate accommodations. Tel: (262) 569-2186. 1. Call to order and confirmation of appropriate meeting notification 2. Committee Business a. Provide Direction on Potential Use of Funds from TID #4 for Affordable Housing 3. Adjourn Gina Kozlik, City Clerk City of Oconomowoc Notice is hereby given that a majority of the Common Council will be present at the above scheduled meeting to gather information about a subject over which they have decision-making responsibility. This constitutes a meeting of the Common Council pursuant to State ex rel. Badke v. Greendale Village Board, 173Wis. 2d 553, 494 N.W. 2d 408 (1993) and must be noticed as such, although the Common Council will not take any formal action at this meeting. 1 1 MEMORANDUM FINANCE DEPARTMENT Date: March 3, 2026 To: Committee of the Whole From: Steve Hatton, Finance Director Re: TID 4 – Affordable Housing Extension RELATES TO THE STRATEGIC PLAN Strategic Goal(s): II. Improve and Mainitain our Infrastructure / Facilities; C. Identify Future New Projects, Timeline for Implementation and Funding Mechanism III. Focus on Community Growth; A. Research and Plan for City Development V. Enhance the Effectiveness of City Government; E. Maintain/Improve the City’s Financial Sustainability BACKGROUND Tax Increment District #4 has reached the end of its life. The 2024 tax increment (collected in 2025) was sufficient to repay all outstanding TID project costs. State Statute permits Tax Increment Districts to be extended by one year and requires the increment revenue collected during this extended period to be used for Affordable Housing. Under this provision:  At least 75% of the final increment must benefit affordable housing in the municipality. The provision defines “affordable housing” as housing that costs a household no more than 30 percent of the household’s gross monthly income. The remaining portion of the final increment (25%) must be used to improve housing stock in the municipality.  Resolution must specify how the municipality will improve housing stock. TID 4 can use 2025 Tax collected in 2026 totaling $606,048 to support affordable housing in Oconomowoc. TID 4 would not remain open an additional year to utilize the affordable housing extension since funds collected in 2026 are not needed to pay project costs. The incremental value will return to the tax roll for the 2027 budget. This is only available at the end of a Tax Increment District’s lifespan or prior to closure if the District is terminating earlier than the end of its maximum life. Funds collected would be segregated and held in a separate fund. Funds could be used anywhere in the City and do not have a fixed timeframe in which they must be used. Additionally, TID 5 and 6 are nearing the end of their lives. TID 5 has an estimated ability to close in 2027. If extended into 2028 it would provide ~$900,000 to benefit affordable housing. TID 6 has an estimated ability to close in 2031. If extended into 2032 it would provide ~$500,000 to benefit affordable housing. 2 2 The Wisconsin Department of Revenue provides a Frequently Asked Questions (FAQ) document the you may find helpful at: https://www.revenue.wi.gov/Pages/FAQS/slf-tif-extensions.aspx ADDITIONAL ANALYSIS At the February 3, 2026 Committee of the Whole meeting, Ruekert & Mielke presented the Western Sanitary Sewer Study results. The report identified two areas within the City totaling approximately 1,180 acres within City limits that remain suitable for housing development. These areas are not currently connected to the City wastewater systems and would require a significant investment to connect to sewer services. City costs were estimated at $4.38MM for the Western (Reddelien) area with a per REC cost estimate of $20,960. City costs for the Southern area were estimated at $2.47MM with a per REC cost between $11,719 and $26,276. Affordable housing extension funds may help ensure these areas can be connected to the wastewater system affordably. A program would need to be developed to ensure affordable housing funding would produce a more affordable housing product, not a higher margin for the builder/developer. FINANCIAL IMPACT Levy Year 2023 2024 2025 2026 Collection / Budget Year 2024 2025 2026 2027 Estimated Levy Impact TID 4 Increment Revenue 490,190 650,072 Housing Extension Increment Revenue 606,048 City of Oconomowoc Levy Revenue 95,259 Estimated Fund Balance Distribution 232,941 County of Waukesha 25,843 Lake Dist 1-LaBelle - Lake Dist 2-Fowler 161 City of Oconomowoc 83,839 Ocon School District 118,082 Vocational School 5,016 232,941 Estimated Financial impact: Terminate TID 4 WITH Affordable Housing Extension 3 3 FINANCIAL IMPACT (CONTINUED) RECOMMENDATION For information and discussion. If the Committee of the Whole is supportive, staff would prepare the necessary resolutions and present to Council at the March 17, 2026 meeting. SUGGE STED MOTION N/A Levy Year 2023 2024 2025 2026 Collection / Budget Year 2024 2025 2026 2027 Estimated Levy Impact TID 4 Increment Revenue 490,190 650,072 Housing Extension Increment Revenue - City of Oconomowoc Levy Revenue 95,259 TID Closure - Return of Fund Balances 838,989 County of Waukesha 93,081 Lake Dist 1-LaBelle - Lake Dist 2-Fowler 579 City of Oconomowoc 301,964 Ocon School District 425,299 Vocational School 18,066 838,989 Estimated Financial impact: Terminate TID 4 WITHOUT Affordable Housing Extension 4