¶ 8. If the city council resolution submitted to the Board states only that street paving costs have been included in the project plan or plan amendment in order to free up street paving dollars in the city’s regular capital budget for use on street projects in areas more than a one-half mile radius from a TID, then the resolution is legally insufficient under Wis. Stat. § 66.1105(4)(gm)4. Assuming that the city council’s resolution is not so limited, however, the Board must apply the appropriate statutory criteria.
¶ 9. Initially, the Board must consider whether to approve the city council resolution that creates the TID or the amendment to the project plan. Wis. Stat. §§ 66.1105(4)(gm); 66.1105(4)(h); 66.1105(4m)(b)2. The Board’s approval must “contain[] a positive assertion that, in its judgment, the development described in the documents the board has reviewed . . . would not occur without the creation of a tax incremental district.” Wis. Stat. § 66.1105(4m)(b)2. ¶ 10. The “positive assertion” concerning the “development” mandated by Wis. Stat. § 66.1105(4m)(b)2. is also required in connection with any amendment. Wis. Stat. §§ 66.1105(4)(h)1.; 66.1105(4m)(b)2. The “development” referred to in Wis. Stat. § 66.1105(4m)(b)2. and (c)1.a. is the “project plan,” which is defined in Wis. Stat. § 66.1105(2)(g) as the “properly approved plan for the development or redevelopment of a tax incremental district, including all properly approved amendments thereto.”
¶ 11. The “development” is described in the project plan for the district as a whole. See Wis. Stat. § 66.1105(2)(g); see also State ex rel. Olson v. City of Baraboo, 2002 WI App 64, ¶ 29, 252 Wis. 2d 628, 643 N.W.2d 796 (interpreting prior law). The Board’s judgment that the development would not otherwise occur applies to the development in the entire TID, without reference to individual categories of project costs. ¶ 12. The Board must also apply the criteria contained in Wis. Stat. § 66.1105(4m)(c)1.a.-c. Each of the required findings examines the TID taken as a whole. The first criterion is “[w]hether the development expected in the tax incremental district would occur without the use of tax incremental financing.” Wis. Stat. § 66.1105(4m)(c)1.a. Because this provision examines the “development,” the analysis turns on the TID or amendment as a whole, not just one feature or the amendment in isolation. Wis. Stat. § 66.1105(2)(g); see also Olson, 252 Wis. 2d 628, ¶ 29 (interpreting prior law). ¶ 13. The second criterion in Wis. Stat. § 66.1105(4m)(c)1.b. is “[w]hether the economic benefits of the tax incremental district, as measured by increased employment, business and personal income and property value, are insufficient to compensate for the cost of the improvements.” Although Wis. Stat. § 66.1105(4m)(c)1.b. has not been judicially construed, its focus is again on the TID taken as a whole. The phrase “the cost of the improvements” in Wis. Stat. § 66.1105(4m)(c)1.b. refers to the proposed cost of the improvements for the entire TID, and not to the proposed cost of particular improvements. Where a TID or amendment thereto includes numerous already-planned, ordinary expenses, the Board may find that the total costs of the project outweigh the economic benefits of the TID. ¶ 14. The third item the Board must consider is “[w]hether the benefits of the proposal outweigh the anticipated tax increments to be paid by the owners of property in the overlying taxing districts.” Wis. Stat. § 66.1105(4m)(c)1.c. This criterion is specific to the proposal before the Board. For a proposal creating a TID, the Board determines whether the benefits of the proposal to create the TID outweigh the anticipated tax increments to be paid by the owners of property in the overlying taxing districts, again without reference to any specific category of project costs. For a proposal amending a TID, the Board determines whether the benefits of the amendment outweigh the anticipated tax increments. ¶ 15. If the Board finds that the proposal to create or amend a TID meets the standard in Wis. Stat. § 66.1105(4m)(b)2. and the three criteria set forth in Wis. Stat. § 66.1105(4m)(c)1., it may approve the proposal even if the inclusion of certain expenses was intended to free up dollars the City had already planned to spend apart from any TID. ¶ 16. The questions discussed above raise another issue that should be addressed. Project costs and liabilities that are outside of a TID, but within a half-mile radius of its boundaries, are subject to an additional layer of review. Wis. Stat. § 66.1105(4m)(d) states: “Before a city may make or incur an expenditure for project costs, as described in sub. (2)(f)1.n., for an area that is outside of a district’s boundaries, the joint review board must approve the proposed expenditure.” Review under that subsection is not triggered until after a project plan has been approved. I conclude that the principal function of the Board’s review under Wis. Stat. § 66.1105(4m)(d) is to determine if the money to be spent in the area outside the TID’s boundaries will, in fact, be spent in accordance with the approved plan and any approved amendments. When acting under that provision, the Board should not independently analyze individual expenditures to determine if each expenditure itself satisfies the specific criteria for initial plan approval under Wis. Stat. § 66.1105(4m)(c)1. ¶ 17. The Board possesses considerable legal latitude in making its determinations. The Board’s determinations are reviewable by certiorari. See Olson, 252 Wis. 2d 628, ¶ 8. A court will therefore review only whether the board “(1) kept within its jurisdiction; (2) proceeded on a correct theory of law; (3) acted in a way that was arbitrary, oppressive or unreasonable and represented its will and not its judgment; and (4) might reasonably make the order or determination in question, based on the evidence.” Olson, 252 Wis. 2d 628, ¶ 8. CONCLUSION
¶ 18. To summarize, the Board reviews all relevant information provided by the city council and the city planning commission. The principal criteria that the Board applies to proposed street paving costs is approval under Wis. Stat. § 66.1105(4m)(b)2. and the three-part legal standard contained in Wis. Stat. § 66.1105(4m)(c)1. The Board could conclude that the costs of street paving that had already been planned before a TID is created or before a project plan for an existing TID is amended are appropriate for inclusion as proposed project costs. The Board could also approve actual street paving expenditures incurred outside of a TID and within a onehalf mile radius of the TID’s boundaries, if the expenditures are in accordance with the approved project plan. Sincerely,
J.B. VAN HOLLEN
Attorney General
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