Janesville City Council to ignore fire station, spending petitions

Neil Johnson

September 6, 2014

JANESVILLE—Billy McCoy was fishing on a hot August afternoon when he learned Janesville's city attorney was urging the city council to ignore his petitions to control city spending and halt the proposed Milton Avenue fire station project.

He got a phone call with the news.

After that, the fish stopped biting.

“It was known the heat was on,” McCoy said. “The fish, they was heading for deeper water. When the heat is too warm, they run off.”

McCoy has tried to put the heat on the city with two direct legislation petitions.

One is a proposed charter ordinance that would require the city to get voter permission through referendum for all municipal capital projects that cost more than $2 million.

The other calls for delay of a $9 million fire station project the council approved out of close-session discussions. The petition calls for a delay until voters decide through a referendum whether the city should move ahead on the project.

But just like McCoy's fishing trip, nobody on the council is biting.

The council last month vowed in solidarity it wouldn't act on the petitions. Now, just a week before the council's state-imposed deadline to decide on the petitions, the agenda for Monday's city council meeting makes no mention of McCoy's petitions.

Council President DuWayne Severson said late last week that the council plans to do nothing with the petitions.

“There has been a decision, and I think it's been spelled out already by the council. We aren't going to place those items on a ballot for a referendum,” Severson said. “There was no vote taken (last month), but there was a consensus among the council and an understanding that we'd take no further action.”

City attorney Wald Klimczyk argues McCoy's petitions are invalid because they try to use an administrative hammer to trump the council's legislative authority, something he argues is illegal under state statutes that govern direct legislation.

Klimczyk argues the petitions seek to unlawfully reverse decisions made by an elected body whose job it is to craft and maintain city policy and make spending decisions.

Klimczyk's opinion appears to fly in the face of a 2003 state Supreme Court ruling that upheld a citizen petition for a $1 million, referendum-based spending cap in the village of Mount Horeb. That petition is similar in wording to McCoy's spending-cap petition.

The village of Mount Horeb fought the petition but ultimately enacted it as policy after the Supreme Court upheld the petition was lawful under the state's direct legislation statutes. Klimczyk's legal opinion rests in part on a legal argument an attorney used while representing the village of Mount Horeb in its failed fight against the spending-cap petition.

McCoy clings to an argument that his petitions are written with clauses that would legally force them onto an election ballot as a pair of referendums if the council fails to act on them.

But in order for a direct legislation petition to appear on a ballot, it must be approved for submission by a city council resolution and sent to the city clerk's office, who would formalize it and forward it to the county clerk's office for placement on a ballot, County Clerk Lori Stottler said.

Unless the council has a change of heart, which appears unlikely, it could take a lawsuit by McCoy or another group to keep the petitions out of the trashcan at City Hall.

McCoy said he's in the process of filing a complaint through the state Government Accountability Board to try to spur the city council to act on the petitions, and he said he's in talks with attorneys in case the council ignores the petitions.

“We'd probably have to end up asking the citizens for money to fight City Hall and take Wald Klimczyk to court,” McCoy said late last week. “I'm hoping the council will reconsider, put both of them (the petitions) on a voter referendum and stop all procedures with the fire station. It'd be in their best interest.”

It's a standoff that in recent days has left council members sputtering in frustration, mainly because of McCoy's $2 million spending-cap petition. Council members argue it would hobble the city fiscally in carrying out services, infrastructure work and facility projects and would cripple the city's ability to attract private development.

In an impassioned speech in council chambers last month, council member Doug Marklein lambasted McCoy's spending cap petition, saying it would “cut the city and the council off at the balls.”

FORCE OF LAW

McCoy said the petitions, which he began circulating earlier this year, were a reaction to public “mistrust” after the city council and other city officials used closed-session discussions when deciding to build a new central fire station. The city has closed on all but one of 12 homes in the footprint of the new station and plans to tear them down.

“If you look right down through all of this, to the brass knuckles, what the council's saying is, 'We don't care what you'd vote for, and we could care less about you.' If that's not intimidation, what is?” McCoy said.

McCoy believes an issue that's being pushed to the sideline is whether his petitions have force of law--regardless of whether city officials would like their potential impacts. McCoy said the city attorney is misinforming people with recycled legal arguments already shot down by the Supreme Court in the Mount Horeb case.

In interviews with The Gazette, officials at the state Government Accountability Board said they wouldn't comment on whether McCoy's petitions hold force of law. Staff with The League of Wisconsin Municipalities, a group that provides legal advice for member municipalities, would only say that it agrees with Klimczyk's argument that the petitions don't seem to comply with state statutes.

The Gazette obtained an outside legal opinion submitted to the city last month by Matthew Dregne, an attorney for the Wisconsin-based law firm Stafford Rosenbaum, The opinion, which Klimczyk said City Manager Mark Freitag requested, cost approximately $4,600.

In it, Dregne states his firm believes courts in Wisconsin have carved out exceptions that would allow a city council to lawfully refuse to enact or place as voter referendums any petitions which are “inappropriate” under state statutes on direct legislation.

Dregne also said his firm believes state direct legislation laws aren't designed to set up “a referendum process applicable to an entire class of legislative decisions,” even though it's what the state Supreme Court's village of Mount Horeb ruling allowed.

However, the law firm's opinion states the city “may, in good faith, seek a reversal or modification” of the Supreme Court's Mount Horeb decision.

'BAD PUBLIC POLICY'

The villages of Mount Horeb and Fontana both have dealt with their own referendum-based capital project spending caps. Both are set at $1 million and were brought about by citizen-based direct legislation petitions.

Mount Horeb's $1 million spending cap was put into place by the village board after the state Supreme Court ruling forced the village to act on the citizen petition. Village officials including Administrator Dave Ross said the village board repealed the measure after two years as allowed by state statutes.

Fontana's cap went into place in 2004 after a voter referendum that did not face a court challenge. It's is still in place, but the Fontana Village Board modified it after two years, adding language that excludes infrastructure repairs and maintenance work from the cap and adds an annual percentage increase to the cap, Village Administrator Dennis Martin said.

Those communities are much smaller than Janesville. Mount Horeb, for instance, has 7,000 residents and a budget less than half of Janesville's.

Fontana, a property-rich community of a few thousand people and an equalized value of over $1 billion, has had only one project large enough to go to referendum. It was replacement of a lift station, and voters approved the work, Martin said.

Larry Arft, who is Beloit city manager and president of the League of Wisconsin Municipalities, said he views the situation unfolding Janesville as a “very frightening prospect.”

Arft said he's never seen a city the size of Janesville deal with the specter of a $2 million spending cap. He called the measure “draconian,” and “bad, devastating public policy.”

“In cities the size of Janesville, $2 million wouldn't cover an intermittent street resurfacing program. It costs $400,000 for a fire truck, $250,000 for a tractor,” Arft said.

Dale Knapp, research director for the Wisconsin State Taxpayer Alliance, said McCoy's $2 million number strikes him as “awfully low for a city the size of Janesville.”

“They could find themselves going to referendum all the time,” he said.

According to city records, Janesville has had five city capital projects since 2012 that have cost more than $2 million, including:

-- The $2.6 million move to automated waste collection in 2012.

-- The Racine Street interchange project in 2013, which cost $10.5 million in federal, state and local money.

-- A $2 million, state-mandated closure of a cell at the city's landfill on Black Bridge Road.

Under McCoy's spending cap petition, none of those projects could have happened without voter permission through referendum.

In the next two years, Janesville has 10 capital projects planned that would exceed $2 million. Besides the $9 million fire station project, the city in 2015 to 2017 plans to reconstruct the downtown section of Main Street, resurface Milton Avenue, and replace bridges at Milwaukee and Jackson Streets.

According to city estimates, more than half of the 10 projects are estimated to cost more than $3 million in local and other government funding.

The city also plans public-private infrastructure projects, including a $3.8 million tax increment financing improvement project for the planned SHINE medical isotope development on the city's south side.

Arft said he sees public-private developments and economic development as areas that would suffer under a blanket spending-cap referendum rule.

Timelines and funding for projects would hinge on when referendums could go to ballot and whether voters approve spending.

Blocs of voters could band together in city wards affected by projects to block them based on reasons other than spending concerns.

“No developer is going to get on the dotted line with those measures in place,” Arft said.