Oak Creek to close Tax Incremental District No. 7, returns roughly $3.47 million to taxing jurisdictions

The Oak Creek Common Council voted on March 31 to terminate Tax Incremental District (TID) No. 7 before its statutory end date, a move city finance staff said will return increment to the tax rolls and provide near-term levy relief.

Max Gagan, deputy city administrator and finance officer, told the council the TID was created in February 2007, has fulfilled the obligations of its project plan and that its expenditure period has lapsed. Gagan said the district generated about $164 million in increment over its life and that, after final accounting, roughly $3,470,000 in cash will be available to distribute to participating taxing jurisdictions.

Gagan said the city’s share of that distribution is estimated at about 30 percent, or roughly $1.05 million; the remainder — about $2.42 million — would go to the other jurisdictions. By state law, the city may re-levy half of the city’s share for operating purposes in the next budget cycle; staff estimated that would permit roughly a 1.67% levy increase allocation for the 2026 budget to help smooth revenue assumptions.

Gagan described prior debt related to the Drexel interchange project that was amortized through refinancing and payoffs in recent years; he said the city had structured recent redemptions so the district is in a position to close.

Council members said closing the district early is consistent with the city’s past practice of terminating healthy TIDs when feasible. One councilmember described the termination as “a great day for the taxpayers” and said the action will free up levy capacity and funding for other needs.

What’s next: The city will finalize the district’s accounting for 2024 and distribute the final cash balance between participating taxing jurisdictions per state law. The city plans to apply half of the city’s share as allowable levy capacity to blunt near-term budget pressures in 2026.