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Ehlers consultant says Lake Hallie TIDs 1 and 2 have funds to retire outstanding liabilities
Summary
At a Jan. 20 special meeting, Ehlers consultant Brian Reilly told the Village Board that TIDs 1 and 2 appear able to retire outstanding liabilities with 2025 tax increment collections; the presentation outlined timing, the 12% test and an estimated levy impact of roughly 8.84% (~$264,000 applied to 2024 levy).
Brian Reilly, a consultant with Ehlers, told the Lake Hallie Village Board on Jan. 20 that “TIDs 1 & 2 appear to have sufficient assets to retire all liabilities outstanding with collection of tax increments in 2025.” The statement framed the board’s review of whether to terminate one or both tax increment districts and how that timing would affect levy limits and future tax increments.
Reilly reviewed specifics for each district. He said TID 1 would need to place on deposit with the Water Fund sufficient funds to pay 65% of remaining principal and interest on the village’s 2015 Safe Drinking Water Loan through 2035; he noted 2016 general obligation bonds remain subject to prepayment with 30 days’ notice and estimated a retirement advance from TID 1 of about $1,010,000 at the end of fiscal 2024. Reilly reported that TID 2 has recovered its costs and “can be terminated.”
The consultant described procedural consequences for termination timing. Terminating before April 15 returns the captured tax base for levy 2025 (collect 2026) and means no tax increment would be collected in 2026; terminating after April 15 shifts those impacts forward one fiscal year. Reilly also explained the 12% test consequence—when the board adopts a termination resolution the increment value of that TID becomes $0—and said the village could create a new TID, noting the 12% test would apply only to the new TID’s base area.
Reilly provided an estimated levy-limit impact if both TIDs were terminated under current assessed values: an 8.84% permanent increase to the unadjusted levy, which when applied to the 2024 levy is about $264,000. He cautioned the board that the exact figure will be known once 2025 values are published in August. Board members discussed possible uses of returned TID funds for housing in the area and asked staff to study options more thoroughly before any termination decision.
Next steps: the board did not adopt a termination resolution at the meeting; members asked for follow-up analysis and said they would revisit the options after updated valuation data and staff recommendations are available.
