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The Janesville City Council on Monday also:
-- Rezoned the former Moose Club at 120 N. Crosby Ave. so the owner can build a banquet facility in the basement.
-- Declined to amend charter ordinances to change the appointment process for some city committees.
-- Changed North Franklin Street between Highland Avenue and Mineral Point Avenue to a two-way street. Construction should begin this summer.
-- Bought homes at 414 N. Washington and 417 N. Washington St. The city will tear down the first to expand Washington Park and sell the second to a low-income family.
-- Sold the former Riverside Plating property at 1728 N. Washington St. The city sold the property for $13,500 to Brian Bailey, owner of adjacent The Watering Hole, to build a parking lot. Council members Tom McDonald and Yuri Rashkin voted no. McDonald was concerned that the city tore down a shed and graded and seeded the property but did not recoup the $5,000 cost. And Rashkin noted the value of a 0.8 acre of improved land in the city is about $50,000.
"We're selling $50,000 worth of land with improvements (for) $13,500?" he asked.
-- Authorized a $15,000 TIF loan to Jamin Arn, owner of OfficePro, to start a new business, Recycling 4U. The company would collect, recondition, reload and sell laser printer cartridges to office supply businesses. Up to half of the loan would be forgiven as Arn employs up to four people.
Council members Kathy Voskuil and Frank Perrotto voted no.
"I don't understand why this would have to be forgivable," Perrotto said. "If he went to a bank, he'd certainly have to repay his loan."
But council member Russ Steeber said it is not uncommon for the city to help businesses starting up or relocating.
McDonald said the city has given out forgivable loans in the past and mentioned a large company that just got a TIF loan. That company could have gone to a bank, too. The city should help the little guys as well as the big guys, he said.
Brad Cantrell, community development director, said other development loans have been tied to job creation. Arn has a proven track record of building a company and employing people.
"We think these small local entrepreneurs are our future," he said.
JANESVILLE — City officials are betting a drop in residential property values combined with a revaluation of commercial property will get the city get into compliance with state statutes.
If so, the city won't have to spend $1.75 million for a full revaluation.
Statutes require cities be between 90 percent and 110 percent of fair market value once every four years. The goal is to make taxing equitable.
Officials estimate that property in Janesville is assessed at about 84 percent of fair market value.
The city council Monday decided residential properties will not be inspected inside and out. That treatment will be reserved for commercial properties, a process expected to cost $100,000 to $180,000. That money is already budgeted.
The commercial revaluation coupled with declining housing values could push the city naturally into compliance, City Manager Eric Levitt said.
Richard Haviza, city assessor, said property values continue to decline and estimated they have fallen about 10 percent since last year.
Typically, values change only 2 to 5 percent a year, he said.
Once a city's ratio falls out of compliance, the state gives it three years to get back into compliance or the state orders its own revaluation.
The city's last revaluation in 2002 caused such a stir that enough residents protested to the state to investigate the process. The state gave the city high marks but said it could improve its public relations.
"Generally, revaluations are not well received by property owners." Haviza said in his presentation to the council.
Cities can revalue in three ways:
-- A full revaluation that includes interior and exterior inspections of all parcels, something the Department of Revenue recommends every 10 years. The cost is estimated between $1 million to $1.75 million. About 30 percent of Janesville properties were last inspected in 1996-97 and another 25 percent were inspected within the last five years. Doing only the commercial part of the full revaluation will take about a year—half as long as revaluing all properties.
-- External review, in which all parcels are inspected only from the exterior.
-- A market update, in which new properties or properties that have been sold or remodel are revalued.
City staff recommended a full revaluation. Staff said it would be more equitable, would update the city's property database and would provide a realistic picture of property values.
But Levitt recommended a hybrid approach.
Commercial properties would be inspected inside and out for the 2010 assessment role. If residential values do not fall naturally into compliance, staff could do a market update for 2011. The city could use budgeted money for the revaluation.
"I would say doing a full revaluation right now is unnecessary, expensive, misleading and inaccurate," council member Yuri Rashkin said.
Rashkin said even if the city did a full revaluation, real estate prices could drop or rise so dramatically that the city still could be out of compliance.
He wondered how true a picture the city would get if it did a full revaluation in such turbulent economic times.
Council member Frank Perrotto said he couldn't think of a more sensitive issue for property owners than revaluation.
"The question of spending $1.7 million as an estimate is a very difficult pill to swallow at this particular time," Perrotto said.
Perrotto believes real estate values will continue to decline and agreed Janesville might become compliant naturally.
"The way I look at this: We're taking a calculated risk at this moment in time," he said.
There is still time to consider a market update for 2011, he said.
Council member George Brunner said the fairness issue concerns him, especially when homes have been improved without needed building permits and so are not assessed at fair market value.
Inspections inside and out are the only way to address the fairness issue, Brunner said. But he said the hybrid suggestion makes sense in these uncertain times as property values decline.
"Why would we even do anything now?" council member Tom McDonald asked. "Why don't we just wait a year and see what the market does and use all seven of our years?"
Levitt said he suspects property values might begin to rise again after next year.
If the city gets into compliance next year, the city wouldn't need to do a revaluation again for another seven years.
McDonald was the only council member to vote against the eventual motion.