May 2016, Vol. 111, No. 5 Your Voice. Your Wisconsin.

2015–16 LEGISLATIVE SESSION TURNED OUT WELL

IN THIS ISSUE: The 2015–2016 Legislative Session Re-Cap Champions in the Legislature Fraud in Government Beware the Liability Boogeyman Wisconsin’s Recreational Immunity Statute Municipal Liability Letters from the Street

The Municipality May 2016, Vol. 111, No. 5

TABLE OF CONTENTS

FEATURES COLUMNS

6 The 2015–2016 Legislative Session Turned Out Well 5 From the Executive Director - for Municipalities The World is Run by Those Who Curt Witynski, Assistant Director, Show Up League of Wisconsin Municipalities 25 Wisconsin’s Recreational 17 Municipal Champions in the Legislature Immunity Statute: How Much Protection Does it Offer? 21 Fraud in Government: Prevention and Detection Claire Silverman, Legal Counsel Carla Gogin, CPA, Partner, Baker Tilly Virchow Krause, 32 Legal Questions LLP and Jenni Steiner, CPA, Senior Manager with Baker Tilly Virchow Krause, LLP 33 Legal Captions 24 Beware the Liability Boogeyman Matt Dregne and Kyle Engelke, Stafford and Rosenbaum LLP DEPARTMENTS

28 Municipal Liability - Where’s the Action? 30 2016 Wisconsin Clerks, Dennis Tweedale, CEO, League of Wisconsin Treasurers & Finance Officers Municipalities Mutual Insurance Institute

35 Letters from the Street 34 In Transition Tony Gilman, Street Superintendent, City of Rhinelander

ON THE COVER Governor Walker signed the TIF bills into law on March 1 with many of the people who supported the bills in attendance. From L-R: Kimberly Montgomery, City of Milwaukee; Rep. André Jacque; Tracey Young, Legislative Council; Rep. Michael Schraa; Melissa Schmidt, Leg. Council; James Buchen, Wis Econ Dev Assoc (WEDA); Danielle Zimmerman, Rep. Amy Loudenbeck’s office; Tom Larson, Wis. REALTORS Assoc; Scott Grosz, Leg. Council; Mary Rajek, WEDA; Michael Harrigan, Ehlers; Dan Pawlitzke, Northeast Wisconsin Regional Economic Partnership (NEWREP); Rebecca Hogan, NEWREP; Senator Rick Gudex; and Jerry Deschane. Photo by Greg Anderson.

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4 | the Municipality, May 2016 DIRECTOR’S COLUMN THE WORLD IS RUN BY THOSE WHO SHOW UP

There’s a coffee cup on my desk that Curt Witynski, with the help of our contract lobbying team is full of pens, an American flag and of Steve Lyons and Mike Rogowski, did a masterful job of a spoon. The spoon was accidentally piloting those bills through the complex legislative process. But stolen from the federal government. Curt, Steve and Mike would tell you that the horsepower that (It came from reception at a U.S. kept them moving came from you. City and Village officials Senate office building; I put it in my brought ideas to our attention for TIF reform; those ideas pocket and forgot it was there. Sorry, became legislation and that legislation became laws. Same with Uncle Sam.) The American flag is a new law clarifying when other units of government have there because, well, I’m American to reimburse cities for property tax chargebacks; a growing and it just seems to fit. The pens are concern in this age of “dark store” property tax challenges. souvenirs from governors, given out by tradition at legislative Behind every new municipal law, I can point to one, dozens, bill-signing ceremonies. This session, my cup runneth over. and in some cases hundreds of local officials who raised an idea, called the League and visited with their legislator. League staff and members have spent a lot of time at the Capitol this spring, witnessing Governor Walker signing his The world we live in is run by those who show up. During the name to bill after bill supported by the League of Wisconsin most recent Legislative session, city and village government Municipalities. I invite you to read through Curt Witynski’s showed up. You were there at hearings, study committees, in overview of the Legislative session. There were some bad bills emails, phone calls and local public forums. You spoke up for that leaked through, but there were a lot more positive changes Home Rule, local control and common sense legislation. And it made for local government. While I just shake my head at the made a difference. new law banning bans on plastic bags, I am very grateful to Thank you. lawmakers and the governor for supporting TIF reform, full funding for local transportation aids, levy limit flexibility and more. Jerry Deschane Executive Director

The Municipality OFFICERS DIRECTORS Official Monthly Publication of the President 2016 Term League of Wisconsin Municipalities Dan Devine Michael Aubinger Volume 111, No. 5, May 2016 President, Ashwaubenon Mayor John Dickert West Allis Mayor, Racine Editorial Offices — Neil Palmer 131 W. Wilson St., Suite 505, Madison, WI 53703 President, Elm Grove Dial (608) 267-2380 1st Vice President Ashanti Hamilton In-State (800) 991-5502 George Peterson Alderman, Milwaukee Fax: (608) 267-0645 STAFF President 2017 Term Executive Director Jerry Deschane e-mail: [email protected] Rothschild Tammy Bockhorst Website: www.lwm-info.org Trustee, Shorewood Assistant Director Curtis Witynski Kathy Ehley The Municipality serves as the medium of exchange of 2nd Vice President Mayor, Wauwatosa Legal Counsel Claire Silverman Tim Hanna Dean Kaufert ideas and information on municipal affairs for the officials Mayor, Neenah Assistant Legal Counsel Daniel M. Olson of Wisconsin cities and villages. Nothing included herein Mayor Tom Ratzlaff is to be construed as having the endorsement of the Appleton Mayor, Park Falls Member Engagement/ League unless so specifically stated. The Municipality 2018 Term Communications Director Gail Sumi (ISSN 0027-3597) is published monthly at $25 per year Past President Justin Nickels ($5.00 per copy, back issues $5.00 each) by the League of Mayor, Manitowoc Event Manager Carrie Jensen Dean Boehne Wisconsin Municipalities, 131 W. Wilson St. Suite 505, Donna Olson Technology Coordinator Mary K. Malone Madison, WI 53703. Periodical postage paid at Madison President Mayor, Stoughton & additional offices, WI. POSTMASTER: Send address Todd Schmidt Administrative Assistant Ginger Contreras Strum Administrator, Waunakee change to: The Municipality, 131 W. Wilson St. Suite Zach Vruwink 505, Madison, WI 53703 Mayor, Wisconsin Rapids

the Municipality, May 2016 | 5 LEGISLATIVE

THE 2015-2016 LEGISLATIVE SESSION TURNED OUT WELL FOR MUNICIPALITIES By: Curt Witynski, Assistant Director, League of Wisconsin Municipalities

Thanks to increased lobbying efforts by municipal officials, the 2015-2016 legislative session was one of the best for Legislators received 1,563 emails from 800 municipalities in years. Dozens of items helpful to cities and villages, including four tax incremental financing (TIF) bills, as people who responded to the League’s 14 well as the League initiated charge-back and adverse possession legislative alerts. bills were enacted into law.

THE SESSION BY THE NUMBERS The 2015-2016 session began on January 3, 2015 and ended March 15, 2016. As of March 15, 2016, legislators had introduced 1,791 bills. The Legislature and governor enacted over 390 bills into law. The League followed 119 bills and took formal positions on 82. Of the 53 bills we supported, 31 were enacted into law. Of the 17 bills we opposed, only five became law. Put another way, 58.5% of the bills we supported were enacted into law and 70% of the bills we opposed did not become law. By comparison, in the 2013-2014 legislative session 42% of the bills we supported became law while 65% of the bills we opposed did not become law. What made the difference? You did. When we sent alerts, Frank Fiorenza, Potosi Village President and Curt Witynski, League you took action. Municipal officials and staff contacted their Assistant Director talked after the Southwest Wisconsin Partnership for Prosperity tour stop in Dodgeville. legislators in record number during this legislative session. Legislators received 1,563 emails from 800 people who responded to the League’s 14 legislative alerts. All told, more League efforts to block bills restricting local control were than 200 people participated in the three League Capitol mostly successful as well. Lobby Days, many of them League Lobby Team members. The Lobby Team currently has more than 400 members and is Most bills interfering with local control or reducing municipal always welcoming new participants. In addition, more than 300 revenues failed to pass. The one significant exception was people signed in to the exclusive Lobby Team webinars over the room tax restrictions included in the state budget. Other the course of the session. Your active participation as advocates bills initially interfering with local control, such as AB 568, increased the League’s effectiveness in the Capitol. Thank you! the landlord rights bill, and AB 582, the private property rights bill, were substantially watered down by negotiated amendments. Also, despite the state’s ongoing budget challenges, legislators avoided making any cuts to the shared revenue, expenditure restraint, and tax exempt computer reimbursement programs. Funding for general transportation aids and mass transit assistance actually increased slightly. In addition, while the state budget cut the recycling grant program by $4 million in 2016, the Legislature subsequently reduced the cut by enacting legislation restoring $3 million to the program. This session’s successes and relatively few disappointments are discussed in more detail in this article. Gail Sumi, League Member Engagement and Communications Director talks with city and village officials about the League’s Partnership for Prosperity Agenda in Kronenwetter. 6 | the Municipality, May 2016 LEGISLATIVE

THE 2015-2016 LEGISLATIVE SESSION (CONTINUED)

Gudex (R-Fond du Lac) and Rep. John Spiros (R-Marshfield) for guiding the following four bills to passage within their respective houses. The Senate unanimously passed each of these bills and the Assembly concurred in each by voice vote. • Act 256: TIF Law Technical Changes. Makes several technical changes to the TIF law, including clarifying that the municipality’s equalized value for the preceding year, as used in the calculation of the levy limit exception for the year that a TID terminates, excludes the value of any TID value increments. • Act 257: Reporting and Transparency. Makes several changes improving reporting and transparency regarding the performance of TIF districts, including requiring Paul Kent, Stafford Rosenbaum LLP, successfully worked on behalf a community to submit an annual report by July 1 of the League’s Local Government Stormwater Group to support describing the status of each existing TID to each legislation providing additional flexibility and options for complying with stormwater regulations. He is shown here speaking at the overlying taxing jurisdiction as well as to the DOR. Also League’s 117th Annual Conference. requires communities to create permanent Joint Review Boards. The reporting and other changes made by Act 257 MUNICIPAL SUCCESSES take effect October 1, 2016. BILLS ENACTED INTO LAW THAT THE • Act 254: Impact on TIDs of State’s Buy-Down of Tech LEAGUE SUPPORTED College Property Tax Rate. Allows communities to extend the life of a TIF district by three years if the district Act 317: Charge-Back of Property Tax Refunds. Modifies was adversely impacted by 2013 Wisconsin Act 145, the state law to make sure that counties, school districts, and other technical college property tax rate buy-down legislation. taxing jurisdictions always pay their proportional share of any property tax refunds a municipality must make. Under prior • Act 255: Treatment of Vacant Property within TIDs. law that was not the case 20 percent of the time, resulting in Removes the restriction that vacant property may not many communities in recent years being held solely responsible comprise more than 25% of the area of a newly-created for covering 100% of a tax refund. The League sends a big TID, and excludes all tax-exempt city-owned property thank you to Sen. Rick Gudex (R-Fond du Lac) and Rep. Todd from the calculation of a TID’s initial tax incremental base Novak (R-Dodgeville) for introducing the bill at the tail end value. of the session and efficiently guiding it through the legislative Act 219: Prohibiting Persons from Acquiring Municipally- process. The League also thanks attorney Stan Riffle, Arenz, Owned Land by Adverse Possession. The League thanks Molter, Macy, Riffle & Larson, S.C., for working with the Sen. Howard Marklein (R-Spring Green), Rep. Rob Brooks DOR to get an initial version of the charge-back bill drafted (R-Saukville), and Rep. Melissa Sargent (D-Madison) for that was acceptable to the department. The Assembly passed introducing this bill on our behalf. Both houses passed the bill the bill by voice vote and the Senate passed it 32-0. by voice vote. AB 515*: Restoring $3 Million to the Recycling Grant SB 459*: Providing Additional Flexibility and Options Program. The state budget, Act 55, cut funding for the for Complying with Stormwater Regulations. Sen. Frank recycling grant program from $19 million to $15 million Lasee (R-De Pere) and Rep. Adam Jarchow (R-Balsam in 2016. AB 515* restores 75% of the cut to the recycling Lake) introduced this legislation modifying numerous water grant program in 2016. The Assembly passed the bill by a and wetlands laws. The League supported the bill because it vote of 87-8 and the Senate by a vote of 30-2. The League included the following items inserted through the efforts of thanks Sen. Rob Cowles (R-Green Bay) and Rep. Paul Tittl attorney Paul Kent, Stafford Rosenbaum LLP, working on (R-Manitowoc) for introducing the recycling funding bill and behalf of the League’s Local Government Stormwater Group: shepherding it through the legislative process. • Provides an exemption from chapter 30 dredging permits Four Acts Improving the TIF Law. The Legislature enacted for the dredging of existing stormwater ponds. into law 4 of the 8 bills recommended by the Legislative Council’s TIF Study Committee. The League thanks Sen. Rick (CONTINUED ON PAGE 9)

• At the time the magazine went to print, the governor the Municipality, May 2016 | 7 hadn’t signed these bills into law. DID YOU KNOW? Fourteen Wisconsin municipalities have elected municipal attorneys: Stevens Point, Milwaukee, Sheboygan, Lake Geneva, West Allis, Wisconsin Rapids, Appleton, Crandon, Montello, Black River Falls, Shawano, Cudahy, South Milwaukee, and Waukesha.

8 | the Municipality, May 2016 LEGISLATIVE

THE 2015-2016 LEGISLATIVE SESSION (CONTINUED)

• Exempts from wetland permitting requirements any discharge that is the result of maintenance, operation, or abandonment of a sedimentation or stormwater detention basin and associated conveyance features that were not originally constructed in a wetland. This clarifies that upland stormwater ponds can be maintained without a wetland permit. • Allows DNR to provide credit for on-line ponds in navigable or non-navigable artificial waterways as a method for achieving compliance with DNR’s prescribed performance standards for sources of nonpoint water pollution. • A parallel provision in chapter 30 specifically provides that the DNR must consider the sediment control in and Representative Dale Kooyenga (R - Brookfield) spoke at the League’s water quality improvements to the watershed as a whole 117th Annual Conference. As a member of the Joint Finance that result from an on-line pond. Thus, while a chapter 30 Committee he supported League efforts to block the lodging permit is still required for an on-line pond, this provision industry’s efforts to add room tax law changes to the state budget. requires DNR take a holistic view of the benefits from such a pond. governing body and may not include industrial or The Senate passed the bill on a party line vote of 19-13. The single family parcels). Upon establishing a PEDD, a Assembly’s vote for concurrence was 56-37. municipality may issue up to two Premier “Class B” Reserved liquor licenses within the PEDD at a cost of Act 286: Providing Options for Municipalities to Issue no less than $30,000 each. These reserved licenses are Above-Quota Liquor Licenses. Rep. David Steffen non-refundable and non-transferable and are above the (R-Howard) introduced this bill after working out a community’s quota. compromise between the League, the Tavern League of Wisconsin, and the Wisconsin REALTORS Association. In exchange for these new quota exceptions, Act 286 makes Sen. Rob Cowles (R-Green Bay) introduced the Senate the following two changes to current law sought by the Tavern companion. The Act creates two new options for communities League: that have no liquor licenses available under the state imposed • Specifies that the initial $10,000 fee for a reserve “Class quota system, but seek to accommodate a new restaurant or B” liquor license may not be rebated or refunded. bar wanting to locate in the community. The new options are: • Modifies the current 300 seat restaurant quota exception • Regional Transfer Option: The Act allows a by clarifying that the exception only applies to restaurants municipality to purchase a “Class B” liquor license having an interior permanent seating capacity of 300 or from a contiguous municipality or a noncontiguous more seats. This change first applies to licenses initially municipality within 2 miles of the community’s borders. issued after the effective date of this Act. A municipality may purchase a license from a donor municipality for a minimum of $10,000. This is a The Assembly passed the bill by voice vote and the Senate one-time fee paid to the donor municipality that may not unanimously concurred. Act 286 takes effect June 1, 2016. be refunded or rebated. A municipality may transfer a Act 126: Sales Tax Exemption for Material Purchased maximum of three reserve “Class B” liquor licenses in this Directly by Contractors. Sen. Howard Marklein (R-Spring manner. Green) and Rep. Bob Kulp (R-Stratford) introduced this • PEDD Option: The bill allows a municipality to bill at the request of Associated General Contractors of establish a Premier Economic Development District Wisconsin. The Act creates a sales tax exemption for material (PEDD) and outlines specific requirements and qualifiers sold to construction contractors for inclusion in state and local for a PEDD (i.e., economic development project must government public construction projects. To qualify for the increase valuation in the district by at least $20 million, exemption, the project must involve a public building, shelter, only one PEDD per municipality, PEDD shall not exceed parking lot or garage, athletic field or park, storm sewer, water 40 acres, PEDD property must be contiguous, PEDD supply system, or sewerage and waste water treatment facility; boundaries established by 2/3 vote of municipality’s (CONTINUED ON PAGE 11)

the Municipality, May 2016 | 9 The League appreciates the support of the following Business Members:

American Transmission Co. Boardman & Clark LLP Ehlers Associates MSA Professional Services Inc. Short Elliot Hendrickson Siemens Stafford Rosenbaum LLP Walmart WEA Trust Whyte Hirschboeck Dudek SC

For more information, contact Gail Sumi: [email protected] | (608) 267-4477

10 | the Municipality, May 2016 LEGISLATIVE

THE 2015-2016 LEGISLATIVE SESSION (CONTINUED) and it may not be a highway, street, or road. The Senate passed the bill unanimously and the Assembly concurred by voice vote. Act 169: Authorizing Public Libraries to notify Collection Agencies and Law Enforcement Agencies of Delinquent Accounts. Permits a public library to report to a collection agency information about delinquent accounts of an individual who borrows or uses the library’s materials, as well as the number and type of overdue items. The Act also permits a public library to report such information to a law enforcement agency, but only if the delinquent account is at least $50. Sen. Sheila Harsdorf (R-River Falls) and Rep. Nancy Vander Meer (R-Tomah) introduced the bill on behalf of the Wisconsin Library Association. Both houses passed the bill by a voice vote. Russ Van Gompel, former Eau Claire City Manager and State Act 174: Making it easier for currently non-participating Representative Kathleen Bernier (R-Chippewa Falls), at the municipalities to join WRS. Allows a municipality that first League’s very well attended 2015 Legislative Luncheon. elects to participate in the Wisconsin Retirement System (WRS) after March 2, 2016, to elect to be a participating employer only with respect to employees hired on or after the The Act also provides that an actual or alleged lack of available date on which the municipality elects to participate in WRS. housing for a released sex offender under Wis. Stats. sec. However, a municipality taking advantage of this new provision 980.08 within a county because a local ordinance prohibits may offer its current employees the option of becoming placement may not constitute “good cause” for a judge to select participating employees in the WRS. The Act also allows a another county for placing the person. municipal employer electing to participate in the WRS after the effective date of the Act to choose not to include any of The League supported this bill as a reasonable compromise its public utility employees. Rep. Jeremy Thiesfeldt (R-Fond for addressing a complicated, highly charged area of the law. du Lac) and Sen. Jerry Petrowski (R-Marathon) introduced It establishes statewide standards that mirror most ordinances this bill at the request of the City of Sun Prairie. Both houses for locating sexually violent offenders following treatment. The passed the bill by voice vote. state releases about 12-15 such offenders annually. Rep. Mark Born (R-Beaver Dam) introduced this bill after consulting with Act 156: Residency Restrictions for Sexually Violent Persons. the League and other stakeholders. Both houses passed the bill Establishes standards the state must follow when releasing by voice vote. back to the community a sexually violent person on supervised release following the completion of treatment. Under the Act, Act 113: Ambulance Staffing Flexibility in Communities no sexually violent person may be placed in a residence within under 10,000. Changes the staffing requirements in effect for 1,500 feet of any school, child care facility, youth center, place emergency medical services under certain conditions in small of worship, or public park. If the person committed a sexually communities (i.e., under 10,000 in population). Specifically, the violent offense against a child, he or she may not be placed in Act allows: a residence in a property adjacent to a property where a child • An EMT-basic ambulance to be staffed by one EMT and resides. If the person committed a sexually violent offense one first responder. against an elderly or disabled person, he or she may not be • An EMT-intermediate technician ambulance to be staffed placed in a residence within 1,500 feet of a nursing home or by one EMT intermediate technician and one individual other assisted living facility. licensed at or above first responder. Under the Act, any local ordinance restricting or prohibiting a • An EMT-intermediate ambulance may be staffed by one sex offender from residing within a particular city, village, town, EMT-intermediate and one individual licensed at or above or county remains generally enforceable except that it may not the first responder level. be enforced against a sexually violent person who is placed in a residence under supervised release so long as the person is under supervision and is complying with court orders related to his or her release. (CONTINUED ON PAGE 12)

the Municipality, May 2016 | 11 LEGISLATIVE

THE 2015-2016 LEGISLATIVE SESSION (CONTINUED)

Sen. Terry Moulton (R-Chippewa Falls) and Rep. Jeff Mursau The League strongly opposed the bill. Thanks to the 10 (R-Crivitz) introduced this legislation. Both houses passed the municipal officials testified against it at a marathon public bill by voice vote. hearing in the state Capitol. After the hearing the authors offered to significantly amend the bill. The amended version Act 55: Two Helpful Policy Items in the State Budget. The state budget included the following policy changes beneficial to that was eventually enacted into law allows municipalities to do municipalities. the following: • Allow Communities to Carry Forward Unused Levy • Municipalities continue to be allowed to require that Capacity for Five Years. Beginning with the 2015 levy landlords be registered. More specifically, under the Act a limit worksheet municipalities have the option of carrying city or village may require landlords to provide the name forward unused levy limit capacity for a period of up of the landlord and an authorized contact person and an to five years under certain conditions. This option is in address and telephone number at which the contact person addition to an existing provision allowing a municipality may be contacted. Also, the Act contains no express to carry forward unused levy capacity to the following year prohibition on charging a registration fee reasonably only. Under the new provision created by the budget, the related to the cost of administering the program. maximum amount of carry forward that can be claimed • Establish and maintain a program of regularly scheduled as an adjustment in any given year is equal to five percent inspections conducted in compliance with s. 66.0119, as of the prior year’s actual levy. Claiming the carry forward applicable. (Sec. 66.0119 is the special inspection warrant requires approval by a two-thirds majority vote of the statute.) governing body, and the amount of general obligation debt outstanding in the year the carry forward is claimed must • Charge a fee for inspections as long as the fee is uniform be less than the amount of general debt outstanding in the and is charged at the time of inspection. prior year. The amended version also deleted the limits on historic • Prevailing Wage Law Repeal. Effective January 1, preservation regulations in the original bill, including the 2017, the state budget repealed the prevailing wage owner consent requirement, and replaced them with the law applicable to local government public construction following: contracts. • A requirement that local governments hold a public hearing before designating a historic landmark or BAD BILLS DEFEATED OR MODIFIED establishing a new historic district and notify any affected owner of the proposed designation or establishment. League staff and municipal officials successfully defeated or had amended prior to enactment the following bills negatively • A provision allowing a property owner affected by a impacting municipalities: decision by a local landmarks commission to appeal the decision to the governing body, and allows the governing Act 176: Restricting Municipalities from Regulating body to overturn the landmark commission’s decision by a Apartments and Landlords; and from Engaging in Historic majority vote. Preservation. Sen. Frank Lasee (R-De Pere) and Rep. Rob Brooks (R-Saukville) introduced this legislation at the request After the rental inspection and landlord registration changes of various landlord groups and the Wisconsin REALTORS were made, the League switched its position on the bill from Association. As originally introduced, the bill prohibited a oppose to neutral. The Assembly passed the bill by a vote of municipality from: 60-31 and the Senate concurred by a vote of 19-13. • Requiring that rental units be inspected without a showing AB 582*: Property Rights and Developer’s Discount. Sen. of good cause. Frank Lasee (R-De Pere) and Rep. Adam Jarchow (R-Balsalm Lake) introduced this legislation at the request of agricultural • Requiring that a landlord obtain a license, certification, or interests, the Wisconsin Builders Association, and the registration. REALTORS. The bill as originally introduced included the • Designating a property as a historic landmark without the following items interfering with local control and causing a tax consent of the owner. shift: • Requiring or prohibiting any action by an owner of a property relating to preservation of the historic or • At the time the magazine went to print, the governor aesthetic value of the property without the consent of the hadn’t signed these bills into law. owner. (CONTINUED ON PAGE 13) 12 | the Municipality, May 2016 LEGISLATIVE

THE 2015-2016 LEGISLATIVE SESSION (CONTINUED)

• A significant expansion of the concept of vested rights. The original bill provided that whenever a person applies for any state permit with regard to a particular project, the person obtains “vested rights” to existing local zoning regulations. Municipalities would be unable from that point forward to adjust zoning or other land use regulations applicable to the project. • A requirement that local governments provide written notice to any owner of property that would be affected by zoning changes relating to the density or the allowable use of the property. • A developer’s property tax discount by requiring non-agricultural lots platted and zoned for residential, commercial, or manufacturing use to be assessed at 50% Mark Rohloff, City Manager, Oshkosh, joined us on Jason Rohloff ’s of fair market value until a building was constructed and last day in the office. Jason interned with the League and researched occupied on the parcel. legislative issues for League lobbying. The League strongly opposed the bill and testified against it at a public hearing. After the hearing, the authors met with AB 583 – Restricting Municipalities from Prohibiting the League, the Counties Association, the Towns Association, Persons from Renting out their Homes. Rep. Scott Allen and other stakeholders and agreed to dramatically amend the (R-Waukesha) and Sen. Frank Lasee (R-De Pere) introduced bill. The first amendment removed the vested rights piece this bill at the request of the Wisconsin REALTORS and modified the requirement to provide written notice to Association, which has pushed for similar legislation the any property owner affected by proposed zoning changes. As last couple of sessions. The bill as introduced prohibited a a result of these and other changes, the League switched its local government from enacting or enforcing an ordinance position from oppose to neutral. The Assembly passed the that prohibits, regulates the duration or frequency of, or bill on a vote of 56-39. When the bill came up in the Senate, unreasonably restricts the rental of a “residential dwelling” for Sen. Duey Stroebel (R-Saukville) and other GOP senators seven consecutive days or longer. The League opposed the bill expressed firm opposition to the developer’s discount provision and testified against it at public hearings in the Assembly and and that item was deleted from the bill by a Senate floor the Senate. Nevertheless, the bill appeared to have momentum, amendment offered by Sen. Lasee. The Senate passed the particularly in the Assembly. Consequently, just prior to the amended bill by a 19-13 vote and the Assembly concurred. Assembly vote, we negotiated with the REALTORS the best deal we thought possible at the time and shifted our position to neutral when they agreed to make the following two changes on the floor: • Allow a municipality to limit the total number of days a dwelling may be rented within a 365 day period to no more than 180 days. • Delete language prohibiting municipalities from adopting ordinances that “unreasonably restrict” home rentals. The Assembly passed the bill by a voice vote. When the bill reached the Senate, Senator Chris Kapenga (R-Delafield) and several other GOP senators expressed concerns about the bill excessively interfering with local control. As a result, GOP Senate leaders declined to schedule the bill for a vote prior to the session ending.

• At the time the magazine went to print, the governor A League Lobby Day selfie in the rotunda with KateLynn hadn’t signed these bills into law. Schmidt, Richfield Administrative Services Coordinator; Gail Sumi, League; Bill Collins, Richfield Village Trustee; and Jim Healy, (CONTINUED ON PAGE 14) Richfield Village Administrator. the Municipality, May 2016 | 13 LEGISLATIVE

THE 2015-2016 LEGISLATIVE SESSION (CONTINUED)

AB 269: Requiring municipalities to pre-fund post- Towns Association, and the REALTORS Association caused retirement health benefits offered to employees hired after the authors to delay introducing the bill until the end of the January 1, 2016. Again this session Rep. Thiesfeldt (R-Fond session. du Lac) and Sen. Vukmir (R-New Berlin) introduced this Three Bad Bills that were Killed before Introduction. bill. Committees in both houses voted along party lines to League staff successfully convinced legislators not to introduce recommend passage. Leadership in both houses declined to three anti-municipal proposals that were under serious schedule the bill for a floor vote. consideration this session. One bill draft sought by the SB 263: Adding new Financial Accountability Towns Association would have created substantial obstacles Requirements to TID Creation Process. Sen. Duey to annexation. Another Towns Association bill would have Stroebel (R-Saukville) introduced this legislation requiring restricted the ability of less populous municipalities to freeze that the project plans of all TIDs created by a city or village zoning classifications within their extraterritorial jurisdiction in after October 1, 2015, contain at least one of the three anticipation of reaching agreement on an extraterritorial zoning accountability practices that currently apply to certain town ordinance with a neighboring town. The final proposal would TIDs and distressed TIDs only. Committees in both houses have significantly restricted the ability of municipalities to voted to recommend passage, but leadership in the Assembly impose and collect stormwater utility charges. and the Senate declined to schedule the bill for a floor vote. AB 290: Establishing uniform statewide residence restrictions on sex offenders released from prison and BIGGEST DISAPPOINTMENTS preempting local residence restrictions on such individuals. BAD BILLS ENACTED INTO LAW Rep. Joel Kleefisch (R-Oconomowoc) introduced this bill. We were disappointed the following items interfering with There was no Senate companion. The bill never received a municipal powers were enacted into law despite our opposition: public hearing. Act 55: The 2015-2017 state budget included three non-fiscal AB 750: Repeal of Personal Property Tax. Rep. Bob policy items preempting municipal powers: Kulp (R-Stratford) and Sen. Duey Stroebel (R-Saukville) introduced this legislation late in the session. It never • Room Tax Law Changes. The budget bill made several received a public hearing. The bill would have eliminated the changes to the room tax law sought by the lodging personal property tax in 2020 and the tax exempt computer industry that we strongly opposed. These changes, which aid program in 2016. The authors originally circulated the mostly take effect January 1, 2017, include: bill for co-sponsors in the spring of 2015. However, stiff – Eliminating municipal governing body discretion opposition from the League, the Counties Association, the to directly spend room tax revenues on tourism promotion and development; and – Modifying a 1994 grandfather clause in the law allowing communities with pre-1994 room tax ordinances to continue to retain more than 30% of room tax revenues for purposes other than tourism promotion and development. • Time of Sale Restrictions. The state budget created a provision sought by the Wisconsin Realtors Association, Wis. Stats. sec. 706.22, which prohibits municipalities from requiring an owner of real property to comply with building, housing, and other municipal ordinances at or near the time that real property is sold or transferred. • Requiring municipalities in Kenosha County to extend water and sewer outside their boundaries upon request Allison Byrne, City of Wauwatosa Alderwoman; Greg under certain circumstances. Walz-Chojnacki, City of Wauwatosa Alderman; and Kathy Ehley, City of Wauwatosa Mayor discuss their legislative meetings during Act 65: Preempting Municipal Authority to Create new the League’s Lobby Day. Occupational Licenses or Fees. Rep. Dale Kooyenga (R-Brookfield) and Sen. Van Wanggaard (R-Racine) introduced this legislation prohibiting municipalities from 14 | the Municipality, May 2016 (CONTINUED ON PAGE 15) LEGISLATIVE

THE 2015-2016 LEGISLATIVE SESSION (CONTINUED) imposing new occupational fees or licensing requirements on any profession, but allowing communities to continue regulating professions they were regulating as of November 13, 2015. The Act also provides that future state regulation of an occupation preempts local regulations and renders them unenforceable. Under the Act, if the Department of Safety and Professional Services (DSPS) imposes any new occupational fees or licensing requirements on any profession previously unregulated by the state, then a municipality may no longer regulate that profession and existing regulations do not apply and may not be enforced. The Senate passed the bill on a voice vote. The Assembly concurred by a vote of 56-34. Act 730: Prohibiting Municipalities from banning plastic bags and certain other containers. Rep. Mike Rohrkaste (R-Neenah) and Sen. Roger Roth (R-Appleton) introduced Governor Scott Walker hands Village of Ashwaubenon President this legislation on behalf of grocery stores, plastic bag Mike Aubinger one of the pens he used to sign AB 612 into law at the bill in signing in the Village. The bill facilitates the new manufacturers, and other business interests. The League Titletown District. opposed the bill because it violated the principle of local control. The Assembly passed the bill on a party line vote of long-term, sustainable solution to funding our state and local 63-35. The Senate concurred by a 19-13 vote. transportation needs. Act 178: Allowing towns in Dane County to withdraw from Four TIF Study Committee Bills. The League was county zoning. Rep. Keith Ripp (R-Lodi) and Sen. Scott disappointed that the Legislature failed to pass the most Fitzgerald (R-Juneau) introduced this bill at the request of the important bills recommended by the Legislative Council’s TIF Dane County Towns Association. The League joined the Dane study committee. The Assembly declined to pass the following County Cities and Villages Association in opposing. We are three TIF bills that the Senate passed unanimously in 2015. concerned that this is the first step toward allowing all towns Despite the Assembly Ways and Means Committee voting statewide to get out from county zoning and establish their to recommend passage of each of these bills, Assembly GOP own zoning ordinances, which may conflict with municipal leadership refused to schedule them for a floor vote. comprehensive plans covering development in a municipality’s extraterritorial jurisdiction. The Assembly passed the bill 62-35 • SB 52, Donor TIDS. Removes certain barriers preventing and the Senate concurred by a 19-13 vote. TIDs from sharing tax increments, including limiting the participation of certain special purpose districts in tax FAILURE OF KEY MUNICIPAL BILLS TO ADVANCE incremental district financing, and allowing any type of a We were disappointed the following legislation the League TID to be a recipient of donated tax increments. actively supported was not enacted into law: • SB 56, Extending Sunset on Distressed TID Law. Fixing the Transportation Funding Shortfall. The League Extends the October 1, 2015, deadline by which a local teamed up with the Counties Association, the Towns government must declare a TID to be distressed or Association, the Transportation Development Association, severely distressed to October 1, 2018. and other stakeholders to urge the Legislature and the • SB 57, Decrement TID Base Value Redetermination governor to address the state’s looming transportation funding Process. The version passed by the Senate repeals the shortfall as part of the 2015-2017 state budget. However, process for re-determining the base value of poorly Governor Walker rejected his Department of Transportation’s performing TIDs created by 2013 Wisconsin Act 183. recommendations to include various tax and fee increases in The amended bill authorizes a municipality to request a the state budget to help pay for current and future state and base value re-determination any time that a TID is in a local transportation needs. Instead, the governor introduced decrement situation (i.e., the current equalized value is a budget that relied on bonding to pay for pending state less than the TID’s base value). The ability to request base transportation projects. While the Legislature rejected the value re-determinations must be authorized in the governor’s approach, it declined to pass a gas tax increase or any new sources of revenue for the transportation fund. The League will continue to push the Legislature to pass a (CONTINUED ON PAGE 16) the Municipality, May 2016 | 15 LEGISLATIVE

THE 2015-2016 LEGISLATIVE SESSION (CONTINUED)

TID’s project plan, and the Joint Review Board must approve the project plan but not each specific request for re-determination. The new process for re-determining the base value of a TID in a decrement situation would have sunsetted December 31, 2018. Both the Senate and the Assembly failed to pass SB 55, increasing from 12% to 15% the maximum amount of a community’s total equalized value that can be located in TIDs. AB 210: Enabling a Local Sales Tax Option for Funding Local Street Maintenance. Rep. Dean Knudson (R-Hudson) introduced this bill after consulting with the League, the Counties Association and the Towns Association. The bill authorized counties, following voter approval, to impose a half percent sales tax for street maintenance. The county was Mike Heifetz, the State’s Budget Director stopped by the required to share sales tax revenues with cities, villages, and bill signing and talked with Joe Murray,Wisconsin REALTORS towns based on a formula involving population and road miles. Association and Jerry Deschane, the League’s Executive Director. While the bill was not perfect, (it didn’t, for example, allow sales tax revenue to cover transit costs), it was a reasonable compromise among competing stakeholders. We supported the bill because it was the first time the Legislature had offered OTHER NOTEWORTHY MUNICIPAL BILLS local governments a local revenue option for transportation infrastructure costs without an accompanying reduction The League took a neutral position on the following in state aid. Rep. Knudson and Speaker Robin Vos nearly legislation of interest to municipalities: convinced their caucus to pass the bill in the last week of the Act 211: Requiring Electronic Building Permits and session before talk radio got wind of the bill and criticized it as Electronic Digital Reporting to DSPS. This legislation a tax increase. Once that happened, support collapsed within was sought by the Wisconsin Builders Association. The Act the GOP caucus and the bill died. requires the Department of Safety and Professional Services (DSPS) to do all of the following by rule by January 2, 2017: • Establish a system by which a person may electronically submit an application to a municipality for a building permit for a one- or two-family dwelling, through which the person may be issued the building permit, and through which the municipality may submit copies of the issued permits to DSPS. • Prescribe a standard building permit application form that shall be furnished to all political subdivisions and used by all applicants for building permits for one- and two-family dwellings, except that DSPS may approve a political subdivision’s use of a different application form. • Require a political subdivision to use the standard building permit form as prescribed above, unless DSPS approves a political subdivision’s use of a different form. Speaking to “Challenges in Assessment Impacting Your Tax Base,” The Act also requires local governments to do all of the at the League’s 117th Annual Conference were Amie B. Trupke, JD, following: Stafford Rosenbaum LLP and Amy R. Seibel, JD, CPA, Seibel Law Offices LLC. They have also been helpful in setting strategy on • Begin implementation of the system described above no the “Dark Store” tax shift issue. later than January 2, 2018.

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THE 2015-2016 LEGISLATIVE SESSION (CONTINUED)

• Not later than the 15th day of the month following reimbursement programs. Funding for general transportation issuance of each building permit for one- or two- aids and mass transit assistance even increased slightly. family dwellings, electronically file a copy of the permit with DSPS. If a municipality fails to do so within this As state legislators campaign for office in your community timeframe, it must refund a portion of the permit fee to this summer and fall, ask them about the legislation discussed the applicant. in this article. Thank them for the bills they passed that help municipalities. But also remind them about the importance of preserving local control. Emphasize that local elected officials CONCLUSION are in the best position to decide the appropriate level of services and property taxes within a community. The 2015-2016 legislative session was a good one for municipalities. Dozens of items helpful to cities and villages, Finally, tell your state legislators that thriving cities and villages including four TIF bills, and the League initiated charge-back are critical to Wisconsin’s economic success and ask them to and adverse possession bills were enacted into law. focus on passing legislation next session that supports cities and villages. A good place to start, you might suggest, is passing Efforts to block bills restricting local control were mostly a long-term, sustainable solution to the state’s transportation successful. Also, legislators avoided making any cuts to the funding shortfall. shared revenue, expenditure restraint, and tax exempt computer MUNICIPAL CHAMPIONS IN THE LEGISLATURE

Many members of the Wisconsin state legislature, both Democrat and Republican, support municipalities generally and their own cities and villages in particular. The League is happy to work with all legislators and has excellent relationships with most members of both houses. Several legislators, however, stand out when it comes to supporting cities and villages and deserve to be recognized for their efforts to advance municipal powers and resources. The legislators highlighted on the following pages worked closely with the League to advance legislation helpful to municipalities and to oppose bills interfering with municipal powers. The League enthusiastically thanks each of them for their hard work on behalf of cities and villages.

MUNICIPAL CHAMPIONS Representative Todd Novak (R-Dodgeville) is also currently the mayor Senator Rick Gudex (R-Fond du of Dodgeville. This was his first session Lac) is a former mayor (Mayville) and in the Legislature and he consistently city council member (Fond du Lac). advocated for local control and protection During his tenure in the Legislature he of home rule powers. At our request Rep. has consistently worked to improve tax Novak authored AB 843, assuring the incremental financing laws. This session charge-back of refunded property taxes, was no exception. He co-chaired the TIF which was enacted into law. He also Study Committee in 2014 and in 2015 championed a budget amendment allowing communities to guided through the Senate 7 of the 8 bills recommended by carry forward unused levy capacity over five years. We also the Committee. He also introduced on the League’s behalf the are grateful for his enthusiastic and vocal support for the TIF reform bills. charge-back of refunded property taxes legislation, and guided it to passage in the Senate. Sen. Gudex also worked with the Representative David Steffen League on draft legislation designed to address the tax shift (R-Howard) is a former trustee for the caused by commercial retail chains using the dark store strategy Village of Howard. This session was to reduce their property taxes. Sen. Gudex is retiring from the his first term in the Legislature and he Legislature after this session. We will miss him. unfailingly supported bills the League supported and dependably opposed bills preempting municipal authority. Rep. Steffen authored AB 612, a compromise the League supported creating two new options for communities with no liquor licenses available under the state quota. He also authored AB 296, which returned excess Lambeau field sales tax revenue to local governments in Brown County. (CONTINUED ON PAGE 18) the Municipality, May 2016 | 17 LEGISLATIVE

MUNICIPAL CHAMPIONS (CONTINUED)

Senator Rob Cowles (R-Green Bay) has Representative Rob Brooks throughout his long tenure in the Senate (R-Saukville) was very active this session, consistently supported municipalities and his first as a state legislator. He introduced opposed efforts to infringe on local control bills on our behalf and responded to our and municipal home rule powers. This concerns about other bills he co-authored session Sen. Cowles authored and guided that interfered with municipal powers. through the legislative process SB 340, Rep. Brooks authored at our request AB restoring $3 million to the recycling grant 459, prohibiting persons from acquiring program in 2016. He also authored SB 535, the liquor license municipal and state lands through adverse possession, quota exemption bill enacted into law; and SB 233, returning which was enacted into law. He also championed a budget excess Lambeau field sales tax revenue to local governments in amendment allowing communities to carry forward unused Brown County. levy capacity over five years. We also are grateful to Rep. Brooks for drafting and considering introducing legislation addressing the tax shift caused by dark store tax strategies Senator Howard Marklein (R-Spring employed by some commercial property owners to reduce their Green) authored at our request SB 314, property tax bills. prohibiting persons from acquiring municipal and state lands through adverse possession, which was enacted into law. Representative Gordon Hintz He also supported, as a member of the (D-Oshkosh) has been a long-time Joint Committee on Finance, a long- supporter of cities and villages within the term, sustainable solution to the revenue legislature. The last two sessions he has shortfall in the state’s transportation fund. Sen. Marklein served on the Joint Committee on Finance, also introduced SB 227, clarifying that material purchased where as a vocal member of the minority directly by contractors for use in municipal and state public he consistently advocates for more funding construction projects is exempt from the sales tax. Also, as of municipal programs and against chair of the Senate Revenue Committee, he held a hearing and reducing municipal powers. a vote on the League’s charge-back bill in a timely manner, which ultimately allowed the Senate to concur in the bill on its last floor day. Representative Robb Kahl (D-Monona) served as mayor of Monona before entering the Legislature several years ago. OTHER STRONG SUPPORTERS OF During his tenure in the Legislature he has MUNICIPALITIES often consulted League staff about bills affecting municipalities. He nearly always Representative Mark Born (R-Beaver supports bills we support and opposes bills Dam) is a former city council member interfering with municipal powers. from Beaver Dam. He is a frequent supporter of municipalities in the Legislature. Rep. Born authored AB 497, Representative Dean Knudson establishing statewide standards for the (R-Hudson) is a former mayor of Hudson residency of violent sex offenders, which who has frequently supported municipal was enacted into law. Rep. Born reached bills during his tenure in the state out to the League and the City of Milwaukee to develop a Legislature. This session he authored AB workable compromise on this difficult issue. 210, enabling a local sales tax option for local street maintenance. Rep. Knudson consulted frequently with the League, the Counties Association, and the Towns Association at each step in the development of this bill, which ultimately failed to be enacted. Rep. Knudson is retiring from the Legislature at the conclusion of his current term. We will miss his thoughtful approach to legislation and the legislative process.

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MUNICIPAL CHAMPIONS (CONTINUED)

Senator Julie Lassa (D-Stevens Point) has consistently been a strong voice for cities and villages during her entire tenure in the Legislature. This session she authored and successfully guided to enactment AB 439, changing the time by which municipalities must publish a class 1 notice of a budget amendment. The bill gives municipalities 15 days instead of 10 to publish the notice.

Senator Devin LeMahieu (R-Oostburg) frequently supported local control. He authored and championed a budget amendment allowing communities to carry forward over five years unused levy capacity. Senator LeMahieu is also very receptive to the needs and concerns of his local government constituents.

Senator Janice Ringhand (D-Evansville) served as mayor of Evansville before being elected to the Legislature several sessions ago. Throughout her tenure she has been a dependable defender of local control and a strong advocate for municipalities.

Representative Mark Spreitzer (D-Beloit) is a former Beloit city council president serving his first term as a state legislator. He consistently advocated for local control and home rule powers. Rep. Spreitzer worked with the League to introduce a bill that would have restored the ability of municipalities to impose residency requirements on city and village managers.

Representative Paul Tittl (R-Manitowoc) is a former member of the Manitowoc city council who authored and guided through the legislative process AB 515, restoring $3 million to the recycling grant program in 2016.

the Municipality, May 2016 | 19 20 | the Municipality, May 2016 FINANCIAL

FRAUD IN GOVERNMENT: PREVENTION AND DETECTION By: Carla Gogin, CPA, Partner, Baker Tilly Virchow Krause, LLP Jenni Steiner, CPA, Senior Manager with Baker Tilly Virchow Krause, LLP

Have you ever heard the saying, “Don’t be that guy”? Well in this case, “Don’t be that government.” In a recent study,1 government and public administration was the second most likely industry to be impacted by fraud. A finding from that study showed the presence of anti-fraud controls is associated with reduced fraud losses and shorter fraud duration. Management and those charged with governance are responsible for ensuring these controls are in place. This article will explore common fraud schemes and provide prevention and detection controls that can be put in place to help mitigate fraud risk.

WHAT IS FRAUD? 4. Create a whistleblower policy: Establishing a whistleblower hotline and/or policy is critical. History has shown that Fraud is often defined as wrongful or criminal deception the initial detection of fraud most often occurs through a intended to result in financial or personal gain. The impact of tip followed by management review, internal audit, or by fraud ranges from financial loss to declines in organizational accident. performance, credibility, and public confidence. As a result, risk management strategies and internal control systems should 5. Understand the objective of a financial audit and a be implemented, monitored, and modified as necessary by forensic audit: The Association of Certified Fraud management and governing bodies. Examiners reports that less than 10% of frauds are discovered as a result of a financial audit conducted by an independent accounting firm. That is because a financial auditor is WHO IS RESPONSIBLE FOR FRAUD PREVENTION? required to obtain reasonable assurance that the financial statements as a whole are free from material misstatement, According to American Institute of Certified Public whether caused by fraud or error. There is a risk that, even Accountants (AICPA) auditing standards,2 the primary though an audit is properly planned, material misstatements responsibility for prevention and detection of fraud rests may not be detected. Whereas, the objective of a forensic with those charged with governance and management. There audit is to determine whether fraud has/is occurring and to are a number of strategies3 to help management and public determine who is responsible. officials navigate the challenges associated with prevention and detection of fraud. While management and governing bodies are typically trusting, simple “blind faith” in a trusted employee alone is not sufficient. 1. Understand your organization and industry: Explore key Management and governing bodies need to also verify what drivers of revenue and related benchmarks, be active in the they are being told or shown. This begins by promoting an budget process and evaluate historical trends. organizational culture of honesty and ethical behavior and 2. Brainstorm with department heads, key members of includes spending time following through, holding others management, external and internal auditors to identify accountable, and asking probing questions. The simple tactic of fraud risks: Review material weaknesses, compliance verifying information can act as a deterrent, which could reduce findings, and control deficiencies related to the financial the likelihood of fraud. and single audits. Also consider decentralized operations. Examples of control weaknesses that contribute to fraud include: lack of internal controls, lack of management review, WHAT COMMON FRAUD SCHEMES LOOK LIKE AND override of existing controls, poor tone at the top, and lack of HOW TO PREVENT/DETECT FRAUD competent personnel. Skimming. Money intended for the government that an 3. Assess the tone at the top and the entity’s culture: It is individual takes for personal use. For example, cash receipts may imperative that organizations set an appropriate tone at the never get entered into the system or they may be entered, but top, one that demonstrates a commitment to honesty and then voided/manipulated. This type of fraud is more likely to ethical behavior. occur in unsupervised areas that lack controls over accepting cash.

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the Municipality, May 2016 | 21 FINANCIAL

FRAUD IN GOVERNMENT (CONTINUED)

Limit unsupervised cash collection locations. For remaining Enforce appropriate payroll process policies and controls. unsupervised cash collection locations, implement procedures Similar to the creation of new vendors, creation of new for reconciling receipts and ensure deposits are properly employees or financial disbursements in the payroll system reviewed and supported. For all cash collections, track, should be limited to select personnel who are not involved reconcile, and review adjustments made to fees charged and with the approval process. A supervisor should review new collected, and analyze deposits over time to identify anomalies. employees added to the system on a regular basis, and review of payroll or financial disbursements should be assigned to someone independent of the process. The simple tactic of verifying information can act as a deterrent... PREVENTION/DETECTION Conduct a fraud risk assessment: One of the most effective ways to prevent fraud is to conduct a fraud risk assessment. This type of assessment will identify where and how fraud could Forgery or alterations. Includes checks, p-cards, vendor occur, as well as who might be in a position to commit fraud. invoices, or employee payroll that are forged or altered. Be Fraud risk assessments will also determine an overall rating for aware of a lack of security surrounding unwritten checks the risk (high, medium, or low) and evaluate controls in place to and signature stamps, little to no oversight or segregation of detect those risks. Below are suggested components of a fraud responsibilities, and the failure to account for all checks, wires, risk assessment, adapted from the Committee of Sponsoring and electronic payments. Organizations of the Treadway Commission’s (COSO) guidance on enterprise risk management, internal control and Develop appropriate check processing and reconciliation fraud deterrence.4 procedures, and ensure the approval of disbursements includes accounting for the entire sequence of payments (checks, wires, 1. Identify the fraud risk electronic payments, etc.). Do not pre-sign checks. Require 2. Determine the likelihood of a misstatement occurring if a dual signatures. Finally, limit the number of bank accounts control were to fail or a control was not present used by decentralized locations. Someone independent of check processing and distribution should reconcile all bank accounts. 3. Determine the significance/magnitude of a misstatement occurring if control were to fail or control was not present Unauthorized vendor distributions. Payments may be made 4. Assign an overall rating (high, medium, or low) to a fictitious vendor for goods never received or a legitimate vendor for personal goods. Vulnerable situations that allow 5. Identify compensating controls for unauthorized vendor distributions occur in departments 6. Determine if existing controls are operating effectively without effective oversight. Vulnerability may also stem from the lack of segregation between ordering, receiving, and 7. If not, determine what additional, more effective controls approval functions. should be put in place Create/update purchasing, procurement card, wire transfer, We recommend updating the risk assessment on a regular basis. and vendor management policies. Purchasing policies should Making time to ensure proper controls are in place is critical. address limits and purchasing authority; as well as authorization No matter the size of your government, internal controls for users, daily and transaction limits, and documentation must be present. It is the responsibility of management, with requirements. When new vendors are created, limit access to oversight from those charged with governance, to ensure a select personnel who are not involved in the disbursement or system is in place to prevent and detect fraud. The time to act approval process. Ensure all new vendors are appropriately is now. reviewed and approved by a supervisor.

Unauthorized payroll disbursements. This can include 1 Association of Certified Fraud Examiners. Report to the Nations on Occupational Fraud fictitious employees, unauthorized pay increases, or overtime. and Abuse. Report. 2014. http://www.acfe.com/rttn/docs/2014-report-to-nations.pdf. An inadequate review of employee timesheets or lack of 2 “AU-C Section 240.04; Independent auditors are required to follow existing standards reconciliation of payroll records to disbursements is another put out by the AICPA.” American Institute of Certified Public Accountants (AICPA). gateway to unauthorized disbursements. 2015. http://www.aicpa.org/. 3 “Management Override of Internal Controls: The Achilles’ Heel of Fraud Prevention.” American Institute of Certified Public Accountants (AICPA). 2005. http://www.aicpa.org/

4  “Guidance on enterprise risk management, internal control and fraud deterrence.” Committee of Sponsoring Organizations of the Treadway Commission (COSO). May 14, 2013. http://www.coso.org/guidance.htm. 22 | the Municipality, May 2016 FINANCIAL

FRAUD IN GOVERNMENT (CONTINUED)

About the Authors: Carla Gogin, partner with Baker Tilly Virchow Krause, LLP, is a member of the firm’s public sector practice group. She has been with the firm since 1993 and specializes in providing financial and single audit services to local units of government. Carla’s five-year position as Baker Tilly’s Chief Risk Officer allowed her the opportunity to consider risk from a broader perspective. Carla assists her clients with the implementation of new Governmental Accounting Standards Board (GASB) pronouncements. Contact her at [email protected]. Jenni Steiner is a senior manager with Baker Tilly Virchow Krause, LLP in their public sector practice group. She has been with the firm since 2004 and specializes in providing financial and single audit services to local governmental units, providing recommendations on accounting policies and procedures that strengthen internal controls. She also assists with the implementation of new accounting standards. Contact Jenni at jenni.steiner@ bakertilly.com.

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the Municipality, May 2016 | 23 LEGAL

BEWARE THE LIABILITY BOOGEYMAN By: Matt Dregne, Partner, and Kyle Engelke, Senior Associate, Stafford and Rosenbaum LLP

When it comes to opposing governmental decision-making, quite high), then statutory immunity should apply. It’s also “boogeyman” threats are not just the stuff of bedtime stories. important to remember that even if immunity does not apply, Traditionally, the term “boogeyman” serves as a common that simple fact does not mean that the municipality is liable – allusion to a mythical creature used in many cultures to a burden which the claimant would still carry. frighten children into good behavior. If many nay-sayers at local governmental meetings are to be believed, these “boogeymen” are no longer confined to their children’s WHAT TO DO WHEN FACED WITH A bedroom closets. Rather, these nay-sayers dutifully warn “LIABILITY BOOGEYMAN” governing bodies everywhere that the threat of litigation The governing body should always know the purpose and looms ominously over every decision the governing body may scope of its own authority. The law also requires decision- make. As explained below, these “liability boogeymen” share makers to know and apply the proper procedure and standards an important characteristic with their childhood counterpart to its decision-making. If the governing body has followed – they are most often conjured up to control behavior and the rules and applied the appropriate review to its decision, decision-making. it is entitled to make a decision. The analysis on whether the “liability boogeyman” is a real threat should always boil down to whether someone cries foul based on the governing body’s THE “LIABILITY BOOGEYMAN” AND THE official decision-making. If so, the governing body should likely PARADE OF HORRIBLES be immune. Ordinarily, the threat of liability is raised as an argument If face-to-face with a “liability boogeyman” the following against taking action, and too often it is an argument lacking questions will help address stated concerns. Ask the in merit. The huffing and puffing of the “liability boogeyman” “boogeyman” for the basis of a potential legal claim. More is all too familiar: “if we approve this project, we’ll be exposed specifically, ask how the disputed decision falls outside the to liability” or “if we approve this application, then we will governing body’s discretion. Finally, other than disagreeing end up with a lawsuit on our hands.” Naturally, managing with a policy decision, ask what obligation the governing body risk is one of the most important functions of a governing has to act in a particular way. body, and there are inevitably real concerns about the effect a On the one hand, if the “boogeyman” has no real response, then governmental decision may have on the public. For a classic the conversation should return to a discussion on policy, not example, when a governing body reviews an alcohol license liability. The “boogeyman” may have legitimate concerns, but application, the applicant may not have a squeaky clean that does not mean they are legal ones. While governmental record and a few residents (perhaps even law enforcement) bodies have a responsibility to their constituents, that duty is may oppose the application and warn of the applicant’s driven by the obligation to balance the needs of all as a policy irresponsibility. Despite these objections, the governing body matter, not to succumb to the threats of a few as a legal matter. grants the license. The applicant then opens their doors for On the other hand, if the “boogeyman” provides a substantive business, over-serves their very first customer, who then response, ask whether they are the ones considering legal promptly gets in a vehicle and hurts someone. Has the “liability action and whether they are represented. At this point, seeking boogeyman” struck again? counsel may also be considered to help determine potential Although the nay-sayers may race one another to tell the exposure before moving forward. These simple tips can help governing body “I told you so” – and the tragic outcome dispel a municipality’s “liability boogeyman.” described above may affect policy decisions in the future – the law protects governmental decision-makers from precisely this type of legal liability. That’s because the law leaves policy- About the Authors: making to governmental decision-makers, and as a general Matthew P. Dregne is a partner at Stafford Rosenbaum LLP, rule, municipalities are not the insurer of all public works or and chairs the firm’s government law practice group. His governmental actions. In other words, the municipality is practice focuses on matters relating to local government law. not required to prevent all bad things that could happen to a He can be reached at [email protected]. property owner or citizen. Kyle Engelke is a Senior Associate at Stafford Rosenbaum Instead, the law grants governing bodies immunity for LLP, and is a member of the firm’s Litigation Group. His legislative, quasi-legislative, judicial and quasi-judicial decision- practice focuses on defending municipalities from personal making. As long as the governmental body did not violate an injury and property damage claims. He can be reached at existing ministerial duty (like an officially adopted policy) or [email protected]. ignore a known and compelling danger (a standard that is 24 | the Municipality, May 2016 LEGAL COMMENT

WISCONSIN’S RECREATIONAL IMMUNITY STATUTE: HOW MUCH PROTECTION DOES IT OFFER? By: Claire Silverman, Legal Counsel

Many Wisconsin municipalities own property used to provide The statute further provides that “no owner and no officer, residents and visitors with opportunities for recreation. These employee or agent of an owner is liable for the death of, any include municipal parks, playgrounds, pools, beaches, golf injury4 to, or any death or injury caused by, a person engaging courses, tennis courts, skating rinks, hills used for sledding, in a recreational activity on the owner’s property or for any skateboard parks, and paths and trails used for various activities death or injury resulting from an attack by a wild animal.” like biking, running, walking, rollerblading, skiing, and There are two statutory exceptions. Section 895.52(4) provides snowmobiling. Municipal officials often inquire whether the that the statute does not limit the liability of a municipality or municipality or its officials are exposed to liability for injuries any of its agencies or of an officer, employee, or agent for either that occur while people are engaged in these various activities of the following: on municipal property. Generally speaking, the answer is no. 1.A death or injury that occurs on property of which a Section 895.52, commonly referred to as Wisconsin’s governmental body is the owner at any event for which the “recreational immunity” statute, provides property owners, owner charges an admission fee for spectators; including municipal governments, with immunity against liability for any injury to a person engaged in a recreational 2. death or injury caused by a malicious act or by a malicious activity on the owner’s property. Although the statute provides failure to warn against an unsafe condition of which an broad immunity to municipal property owners, it is not officer, employee, or agent of a governmental body knew, absolute. There are statutory exceptions and some significant which occurs on property designated by the governmental cases interpreting the law as it pertains to municipalities body for recreational activities. and other governmental bodies that a municipality must be Conduct is “malicious” when it is the result of hatred, ill will, or aware of. This legal comment attempts to explain the general revenge, or is undertaken when insult or injury is intended.5 protections offered by the recreational immunity statute, as well as its limitations. STATUTORY DEFINITIONS AND TERMS STATUTORY PURPOSE AND COVERAGE Most of the specific terms used in sec. 895.52, Stats., are defined within the statute. “Owner” is defined as “a person, The legislature enacted Wis. Stat. sec. 895.52 at the same including a governmental body… that owns, leases or occupies time that it repealed Wisconsin’s first recreational use statute property” or that “has a recreational agreement with another because judicial interpretation had created a number of owner.” The term “governmental body” includes a “municipal exceptions which rendered the statute ineffective.1 In enacting governing body, agency, board, commission, committee, the current statute, the legislature expressly stated that it council, department” or a formally constituted subunit of any intended to overrule any previous Wisconsin supreme court such body. decisions interpreting the predecessor to 895.52, if the decision was more restrictive than or inconsistent with the provisions of Of all the terms used in sec. 895.52, “recreational activity” the new act. has spawned the most litigation. The statute broadly defines “recreational activity” as “any outdoor activity undertaken The recreational immunity statute was enacted to “limit for the purpose of exercise, relaxation or pleasure, including the liability of property owners toward others who use their practice or instruction in any such activity.” Importantly, the property for recreational activities under circumstances term excludes any organized team sport activity sponsored by in which the owner does not derive more than a minimal the owner of the property on which the activity takes place. In pecuniary benefit.”2 To that end, sec. 895.52, Stats., provides enacting the statute, the legislature provided an extensive list that no owner, officer, employee or agent of an owner owes of the kinds of activities that are meant to be included within to any person who enters the owner’s property3 to engage in the term but noted that it was impossible to specify every recreational activity: activity which might constitute a recreational activity.6 Where 1. A duty to keep the property safe for recreational activities; substantially similar circumstances or activities exist, the legislature intended that sec. 895.52 be liberally construed in 2. a duty to inspect the property; or favor of property owners to protect them from liability.7 3. a duty to give warning of an unsafe condition, use or activity (CONTINUED ON PAGE 26) on the property. the Municipality, May 2016 | 25 LEGAL COMMENT

RECREATIONAL IMMUNITY (CONTINUED)

SIGNIFICANT COURT DECISIONS held that a municipality does not lose the protection of the recreational immunity statute by undertaking an obligation that Over the years, the recreational immunity statute has spawned it need not take, such as providing some sort of supervision of litigation. This litigation has involved, among other issues, recreational activities on municipal property, and performing in whether the recreational immunity afforded by the statute is a manner that’s alleged to be negligent.8 affected when municipalities undertake to provide services they are not obliged to undertake, like supervision, which are The courts have had more difficulty, however, drawing the then performed inadequately; whether someone was engaged line between recreational and non-recreational activities in in recreational activity when the injury or death in question varied fact situations. The Wisconsin Supreme Court has occurred; and the limits of the organized sports exception. said that it continues to be frustrated in its efforts to state a Although space constraints prevent a comprehensive discussion test that can be applied easily because of the “seeming lack of the case law interpreting the statute, it’s worth noting a few of basic underlying principles in the statute.”9 This difficulty things. makes it harder to predict with certainty, what the outcome will be in a given case. In determining whether someone is For the most part, the courts have been mindful of the engaged in a recreational activity or not, the courts have held recreational immunity statute’s underlying purpose of that the injured person’s subjective assessment of the activity encouraging property owners to open property to recreational is pertinent, but not controlling. A court must consider the users and, in light of the legislature’s clear attempt to overrule nature of the property, the nature of the owner’s activity, and judicially created exceptions to the predecessor statute, have not the reason the injured person is on the property. A court should wavered in situations where application of the statute appears consider the totality of circumstances surrounding the activity, harsh because of alleged municipal negligence. The courts have including the intrinsic nature, purpose, and consequences of the

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(CONTINUED ON PAGE 27) 26 | the Municipality, May 2016 LEGAL COMMENT

RECREATIONAL IMMUNITY (CONTINUED) activity. A court should apply a reasonable person standard to CONCLUSION determine whether the person entered the property to engage in a recreational activity. Finally, a court should consider whether Wisconsin’s recreational immunity statute, sec. 895.52, Stats., the activity in question was undertaken in circumstances provides municipalities with broad immunity against liability substantially similar “to the circumstances of recreational for any injury to a person engaged in a recreational activity activities set forth in the statute.”10 on municipal property. While the immunity is broad, it is not absolute. Municipal officials and municipal attorneys should be In some cases, the issue has been whether the intrinsic nature aware of statutory exceptions and case law interpretations that of the activity is commercial rather than recreational so that might expose a municipality to potential liability so that the the recreational immunity statute might be held inapplicable. municipality can secure the requisite insurance or implement Profit earned by a governmental body does not, in itself, convert measures to avoid such liability. a recreational event into a commercial one for purposes of the recreational use statute.11 Liability 390R1

Other court decisions with significance for municipalities 1 See 1983 Wis. Act 418, repealing sec. 29.68 which was created in 1963. involve cases where the courts have interpreted the exclusion 2 1983 Wis. Act 418, sec. 1. from the definition of “recreational activity” of any organized 3 “Property” means real property and buildings, structures and improvements thereon, and the waters of the state. Section 895.52(1)(f), Stats. team sport activity sponsored by the owner of the property on 4 “Injury” means an injury to a person or property. Section 895.52(1)(b), Stats. 12 which the activity takes place. In Hupf v. City of Appleton, 5 Ervin v. City of Kenosha, 159 Wis.2d 464, 464 N.W.2d 654 (1991) a participant in a recreational softball league sued the city, 6 “Recreational activity” “includes hunting, fishing, trapping, camping, picnicking, exploring caves, nature study, bicycling, horseback riding, bird-watching, motorcycling, operating an all-terrain alleging negligence, after he was struck in the eye by a softball vehicle or utility terrain vehicle, operating a vehicle, as defined in s. 340.01(74) on a road while leaving the city park. The court held that the City was designated under s. 23.115, recreational aviation, ballooning, hang gliding, hiking, tobogganing, sledding, sleigh riding, snowmobiling, skiing, skating, water sports, sight-seeing, rock-climbing, the “sponsor” of the softball league within the meaning of cutting or removing wood, climbing observation towers, animal training, harvesting the products the recreational immunity statute, even if the city did not of nature, sport shooting and any other outdoor sport, game or educational activity.” Sec. 895.52(1)(g), Stats. have a profit motive, where the city took team registrations, 7 1983 Wis. Act 418, sec. 1. maintained the grounds, and provided umpires, scoreboards, 8 See Johnson v. City of Darlington, 160 Wis.2d 418, 466 N.W.2d 233 (Ct. App. 1991) and Ervin bases, and softballs. As further evidence of the City’s v. City of Kenosha, 159 Wis.2d 464, 464 N.W.2d 654 (1991). But cf Linville v. City of Janesville, 184 Wis.2d 705, 516 N.W.2d 427 (1994), where a vehicle was accidentally driven into a sponsorship, the court looked to a exculpatory contract signed municipal pond while the occupants were looking at a fishing spot, and the paramedics allegedly by participants releasing the city from any damage claims and were slow to respond or alleged to be negligent in other respects. Wisconsin Supreme Court held that sec. 895.52, Stats., did not afford the municipality immunity for injuries sustained referring to the city Parks and Recreation department or the by the recreational land users. The court reasoned that the claims were based on allegedly negligent emergency rescue services provided by the municipality which were unrelated to the school district as “sponsoring” the league. municipality’s ownership of the recreational land or were based on the allegedly negligent actions of municipal employees whose employment was unrelated to the recreational land. The City argued that because Hupf was injured while leaving 9 Auman v. School Dist, of Stanley-Boyd, 2001 WI 125, 248 Wis.2d 548, 635 N.W.2d 762. the park and not while participating in the organized sport, 10 Id. the exclusion didn’t apply. The court rejected that argument, 11 Fischer v. Doylestown Fire Dept, 199 Wis.2d 83, 543 N.W.2d 575 (Ct. App. 1995). But cf Silingo holding that although a walk in the park for the purpose of v. Village of Mukwonago, 156 Wis.2d 536, 458 N.W.2d 379 (Ct. App. 1990). 12 Hupf v. City of Appleton,165 Wis.2d 215, 477 N.W.2d 69 (Ct. App. 1991). exercise, relaxation, or pleasure is an activity for which the 13 Meyer v. School District of Colby, 226 Wis.2d 704, 595 N.W.2d 339 (1999) (school district was owner is immune, “the legislature did not intend to create a not immune from liability when spectator watching a high school sponsored football game was injured when the bleachers broke under her as she descended following the football game. corridor of immunity from the ball field to the parking lot when Although watching a high school football game is a recreational activity, and the school district the walk is inextricably connected to a non-immune activity.” had not charged spectators admission to watch the game, the organized team sport activity exception to the recreational use statute extends to spectators who are not participants and The court noted that this same logic applies equally when whose injuries do not arise out of team sport activity or the actions of participants in someone is engaged in a recreational activity that is covered by that activity). the statute, so that a momentary diversion such as going to the bathroom or taking a brief break from a recreational activity does not remove the protection of the recreational immunity statute. DID YOU KNOW? In another case involving the organized sport exclusion, the 197 municipalities have administrator positions, Wisconsin Supreme Court held that the exception from 88 of which are purely administrators and 109 landowner immunity extends not only to participants, but to of which combine the position with other titles. spectators as well.13

the Municipality, May 2016 | 27 FINANCIAL

MUNICIPAL LIABILITY – WHERE’S THE ACTION? By: Dennis Tweedale, CEO, League of Wisconsin Municipalities Mutual Insurance

“You Can’t Fight City Hall!” – If only this were true. While In terms of size, the chart below shows land use claims to be the Wisconsin Legislature has provided excellent liability the big “winner.” protection in the form of limited damages and immunities, a claimant always has the right to file a claim and a suit. And Top 20 Liability Claims (Total Loss of $12.7 Million) they DO! From 2002 through 2015, claimants filed 9,820 claims valued by League of Wisconsin Municipalities Mutual $2,393,510 z Auto Liability 19% (5) Insurance (LWMMI) at $60,000,000. Where do these claims $2,029,389 16% (6) z Employment come from? z Land Use First a few definitions: $1,850,322 14% (3) z Police Auto Liability: Municipal licensed vehicle claims related to 3rd $6,449,792 parties with injuries or property damage 51% (6) ( ) Number of Claims General Liability: Accidents other than auto such as: sewer backups, slip and falls, stones from mowers hitting vehicles, recreational injuries Most claims settle before trial. When a claim turns into a suit Police Liability: False arrests, excessive force, high speed chase, in either State or Federal Court, City Hall usually wins. violation of civil rights • Only 8% of claims end up in a suit Public Official: Intentional acts of municipal officials and employees such as: failure to grant zoning variance, tax • 81% of suits end with no payment to the plaintiff assessment suits, hire/fire claims, land use, discrimination, open • Only 4% of the claims that go to trial involve police; records/meeting violations. 73% are Public Official claims Here is a quick breakdown of the source of the claims: But winning isn’t everything. Beyond the numbers and charts, Auto Liability...... 2,250 Claims claims filed against a municipality take up scarce resources – employee time, attorney fees, and mental stress. Readers who General Liability...... 5,850 Claims have been unfortunate enough to be involved in a lawsuit know Police Liability...... 420 Claims the toll this takes on work and family life. Public Official...... 1,300 Claims Here are two examples of contentious claims More than a third of these claims closed with no cost. The (with enough facts changed to protect identities): average attorney expenses and claim payments of each remaining claim is $9,500. Land Use: A municipality wanted to “save” land for development that will help with the image of a technology The following pie charts show that the majority of the 9,820 center. The owner of the land and a developer wanted a big claims reported were General Liability, mainly sidewalk falls, box complex. Trustees violated open meeting laws, conspired sewer backups, and damage to private property. However, to deny necessary permits, and the municipality got sued by looking at the value of the claims, Public Officials is the clear the land owner and developer for $3,000,000 in damages. “winner.” Litigation lasted for about three years with legal fees % of Total % of Total approaching $300,000 for the municipality. Special meetings, Claims Reported Claim Dollars depositions, mediation, and strategy sessions took a toll. Trustees chose not to run for reelection and the same land use

4% 13% issue still faced the elected officials. 26% 47% Fireworks: Consider a claim involving a festival with a 60% fireworks incident. The village allowed a local nonprofit 23% 16% organization (not insured due to exclusions in the organization’s policy) using community donations to set off fireworks in the 11% village park. A premature explosion sent burning phosphorous into the crowd causing severe burns to children. There was z General Liability z Auto Liability z Police Professional z Public Official plenty of blame to go around. The village, because of statutory recreational immunity, was found not to be responsible for 28 | the Municipality, May 2016 (CONTINUED ON PAGE 29) FINANCIAL

MUNICIPAL LIABILITY (CONTINUED) any damages related to the children’s burns. Is this a situation 5. Make sure your employees have the proper tools to complete you want to find yourself in when you see the families of the work safely. children on a regular basis? 6. Involve land use planners and legal counsel on zoning, Over the past five years, more than 270 communities have conditional use issues, and comprehensive plan changes. watched an LWMMI video titled “In the Scope of Your 7. Finally, use the resources of the League of Wisconsin Authority: Preventing Public Officials’ Liability.” This 19- Municipalities. This includes legal resources, conferences, minute video is a great resource for city councils, village boards, and district boards and commissions to watch. Contact Sandy and a vast array of printed materials. Hagen at [email protected] if your municipality is interested in viewing this informational video. About the Author: When I am asked about a specific event or activity from an insurance or risk point of view, I generally answer: Dennis Tweedale graduated from the University of Wisconsin-Madison with Insurance coverage is in place. The question you need to a bachelor’s degree in Risk Management answer is, have you thought through the potential for injury and holds the designations of Associate in and taken appropriate actions? While the insurance and court Risk Management (ARM) and Chartered system will take care of the financial consequences, you will Property and Casualty Underwriter have to answer to the “Court of Public Opinion.” Are you (CPCU). Dennis’ experience as a public ready? risk manager, past president of PRIMA, Seven LWMMI recommendations: and the founder of several successful risk financing programs for 1. Use and follow the advice of your municipal attorney. This is public entity groups has earned him a national reputation for especially true in land use and employment issues. analyzing these entities and suggesting various risk financing structures. Dennis is the current Chief Executive Officer for 2. Elected officials should stay away from administrative and the League of Wisconsin Municipalities Mutual Insurance. staff functions. Let your employees do their job. The League’s insurance company is now in its thirteenth year 3. Know your municipality’s risk exposure and work to reduce it. of operation with over 395 cities, villages, and special districts as insureds and $25 million in premiums. He can be reached at 4. Hold supervisors accountable for training employees on and [email protected] or call 608-833-9595. carrying out daily operations and any resulting employee injuries and third party claims.

the Municipality, May 2016 | 29 TRAINING

2016 WISCONSIN CLERKS, TREASURERS & FINANCE OFFICERS INSTITUTE

Heidel House, Green Lake | June 22–24, 2016

WEDNESDAY, JUNE 22 EVENING 10:15–11:45 a.m. Track 1: Affordable Care Act Part II John Somers, Director of Administration, 5:30–6:30 p.m. | Cocktails Beaver Dam, President, Wisconsin Clerks, Moderator: Matt Trebatoski, City Treasurers & Finance Officers, presiding 6:30–7:30 p.m. | Picnic Clerk-Treasurer, Ft. Atkinson Speaker: Matthew J. Flanary, Attorney, MORNING THURSDAY, JUNE 23 Buelow Vetter Buikema Olson & Vliet, LLC 10:30 a.m. | Registration opens MORNING Concurrent Workshop Sessions Track 2: Elections/MOVE Act, etc. Moderator: Sandi Wesolowski, City AFTERNOON 8:00 a.m. | Coffee and Rolls Clerk, Franklin General Session 8:30 a.m. Speaker: Government Accountability Track 1: Affordable Care Act Part I 1:00 p.m. | Welcome: Green Lake Board Representative Mayor Jon McConnell Moderator: Matt Trebatoski, City 11:45 a.m.–1:00 p.m. | Business Clerk-Treasurer, Ft. Atkinson 1:15–2:30 p.m. | Legislative Update Meeting/Lunch (included) Curt Witynski, Assistant Executive Speaker: Matthew J. Flanary, Attorney, Sponsored by WEA Trust Director, League of WI Municipalities Buelow Vetter Buikema Olson & 2:30-2:45 p.m. | Break Vliet, LLC AFTERNOON Sponsored by River Valley Bank Track 2: Record Retention Concurrent Workshop Sessions 2:45–4:15 p.m. | DOR Update Moderator: Steve Braatz, Jr., Village 1:00–2:30 p.m. Speakers: Scott Shields, Director, Clerk-Treasurer, Mukwonago Technical and Assessment Services, Track 1: WI Alcohol Licensing DOR and Valeah Foy, Director, Local Speaker: Katie Scanlan, Waukesha and Recent Law Changes Gov’t Services, DOR County Records Management Moderator: Kelly Tarczewski, City 10:00–10:15 a.m. | Break Clerk-Treasurer, Pewaukee Sponsored by Johnson Block & Company Speakers: Special Agents Jason Lee and Rick Uhlig, Alcohol & Tobacco Enforcement, DOR

30 | the Municipality, May 2016 TRAINING

Track 2: DOR-Assessment Errors, Corrections, Omitted FRIDAY, JUNE 24 Taxes & Chargebacks John Somers, Beaver Dam or Moderator: Mark Houtakker, City Treasurer, Monona Matt Trebatoski, Ft. Atkinson Speakers: Valeah Foy, Director, Local Gov’t Services and MORNING Mary Gawryleski Director, Equalization Bureau, DOR General Session 2:30–2:45 p.m. | Break 8:30 a.m. | Coffee and rolls Sponsored by Associated Appraisal Consultants, Inc. Sponsored by League of WI Municipalities Mutual Insurance 2:45–4:15 p.m. 9:00 a.m. | Safety/Active Shooter Training Track 1: ETF-General Overview-WRS Reporting Moderator: Ralph Chipman, City Finance Director, Moderator: Carolyn Toms-Neary, Director of New Berlin Office Services, Cudahy Speaker: Sergeant Dan Hanlon, New Berlin Speaker: ETF Staff 10:15 a.m. | Break Track 2: Room Tax 10:30 a.m. | Safety/Active Shooter Training Moderator: Steve DeQuaker, City Budget Officer/Treasurer, Burlington Moderator: Ralph Chipman, City Finance Director, New Berlin Speakers: Curt Witynski, Assistant Executive Director, League of WI Municipalities and Valeah Foy, Director, Speaker: Sergeant Dan Hanlon, New Berlin Local Gov’t Services, DOR 11:45 a.m. | Adjournment 5:30-6:30 p.m. | Escapade Yacht Cruise (First 60 registered)

the Municipality, May 2016 | 31 LEGAL QUESTIONS

LEGAL: FREQUENTLY ASKED QUESTIONS

1. If a municipal ordinance requires property weeks. Section 893.83 also makes clear that actions for damages owners to remove snow and ice from caused by accumulation of snow or ice existing more than sidewalks abutting their property, are the 3 weeks are subject to sec. 893.80 which affords municipalities property owners then liable for injuries which immunity for discretionary decisions and limits damages. If a result from a failure to remove snow or ice resident fails to remove snow and ice as required by ordinance, from a sidewalk? that resident is subject to a forfeiture if the ordinance imposes one, and the municipality can perform the work itself and No. Although a municipality can by ordinance require property charge the property owner for the removal as a special charge owners to remove snow and ice from sidewalks abutting under sec. 66.0627 or as a special tax under sec. 66.0907(5). their property, the long-standing rule in Wisconsin is that maintenance of a municipal sidewalk is a non-delegable duty and therefore, the municipality rather than the landowner is 2. Does the recreational immunity responsible for injuries caused by traveling on a snowy or icy statute, Wis. Stat. sec. 895.52, protect a municipal sidewalk. See McCoats v. Threshermen’s Mutual Ins. municipality from liability which might arise Co., Case No. 96-0715 (Ct. App. Jan 14, 1997, unpublished), from an injury that occurs on municipal citing Walley v. Patake, 271 Wis. 530, 540, 74 N.W.2d 130, 135 property when the injured person paid a fee (1956) and Hagerty v. Village of Bruce, 82 Wis.2d 208, 213-14, to the municipality to use the municipal 262 N.W.2d 102, 104 (1978). facility? Section 66.0907(5) and (10) require the board of public Generally speaking, the answer is yes. The recreational works or other municipal officers designated to handle street immunity statute would, for example, protect a municipality or sidewalk matters to “keep the sidewalks … clear of snow from liability when a person is injured at a municipal swimming and ice in all cases where the owners or occupants of abutting pool and that person paid an admission fee to use the pool. The lots fail to do so ….” Thus, it is ultimately the municipality’s recreational immunity statute does not protect against liability, responsibility. However, municipalities are afforded some however, when a death or injury occurs on municipal property protection by Wis. Stat. sec. 893.83, which prohibits an action at any event for which the municipality charges an admission for damages for injuries sustained because of a natural snow fee for spectators. Wis. Stat. sec. 895.52(4)(a). or ice accumulation unless the accumulation existed for three

SAVE THE DATE! THE LEAGUE MUNICIPAL ATTORNEYS INSTITUTE JUNE 15-17, 2016 STONE HARBOR RESORT & CONFERENCE CENTER, STURGEON BAY Municipal Attorneys will receive the full agenda and registration form in the mail in April. Tuition is $280 (League members), $305 (non-members). Reservations can be made at the Stone Harbor: 877-746-0700 Room charges are $129 single/double. Please indicate you are with the League Attorneys Institute when you call to make a reservation.

32 | the Municipality, May 2016 LEGAL CAPTIONS

LEGAL CAPTIONS

All legal articles are published in full at www.lwm-info.org. District option. Act 286 also prohibits municipalities from rebating or refunding the initial $10,000 fee for a reserve Liability 390 R1 “Class B” liquor license. The Act also clarifies that the 300 seat Summarizes Wisconsin’s recreational immunity statute, sec. restaurant quota exception only applies to restaurants having an 895.52, which provides municipalities with broad immunity interior permanent seating capacity of 300 or more seats. Act from liability for the death or injury of a person engaged in a 286 takes effect June 1, 2016. 3/31/16. recreational activity on municipal property. Also summarizes Building Regulation 111 significant court decisions interpreting the statute. 3/31/16. 2015 Wisconsin Act 211 requires the Department of Safety Miscellaneous 17 and Professional Services (DSPS) to take the following Reviews the 2015-2016 legislative session and newly enacted steps with regard to building permits for one- or two-family laws affecting municipalities, including charge-back legislation, dwellings by January 2, 2017: 1) establish an electronic system TIF law changes, stormwater law changes, and municipal relating to building permits under which a person applies for ability to regulate landlords. 3/31/16. a building permit, the municipality issues a building permit to Intoxicating Liquor 951 applicants, and the municipality provides copies of the issued 2015 Wisconsin Act 286 creates the following new options for permits to DSPS; and 2) prescribe a standard building permit communities that have no liquor licenses available under the application form and require local governments to use it, except quota system but seek to accommodate restaurants and taverns that DSPS may approve a local government’s use of a different wanting a liquor license; 1) the regional transfer of unused form. 3/31/16. licenses option; and 2) the Premier Economic Development

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the Municipality, May 2016 | 33 IN TRANSITION

WELCOME RETIREMENT Administrative Assistant-Utility Clerk: Thiensville. John R. Treffert is retiring Black Earth, Beth Berge as Village Trustee for the Village of Thiensville. He served 22 years as a Village Building Inspector: Stevens Point, Ximena Christianson Trustee. Before being elected as Village Plumbing Inspector: Stevens Point, Dennis Kurszewski Trustee John served two years on the Plan Commission. During John’s years of service Trustee: Mount Calvary, Donna Schrage; the Village became debt free, completed Marathon City, Mark Ludwig, Dave Wallenfelsz extensive stormwater improvements, multiple infrastructure Police Chief: Albany, James Placek; Clintonville, James Beggs projects, and John served on the Board of the Mid-Moraine Municipal Association. Thiensville residents wish John and his wife Pat many wonderful years as just Village residents.

Albany. Robert Levitt, Albany Chief of Police, retired April 1, 2016. Chief Levitt has been the chief since October 1, 1998.

ADDITIONS AND CHANGES Please send changes, corrections or additions to Mary Malone, [email protected], fax (608) 267-0645 or send to the League at 131 West Wilson St., Suite 505, Madison, WI 53703

Have you returned your municipality’s update form yet? In April we faxed, mailed or emailed the League’s annual update forms. Thank you for helping us to keep our database current. We also use the information in publishing the Annual Directory of Cities and Villages. The deadline for us to include updated information in the 2016-2017 Directory is May 15, 2016.

2016 LEAGUE OF WISCONSIN MUNICIPALITIES CALENDAR

Attorneys Institute Chief Executives Workshop Annual Conference June 15-17 Aug. 24-26 Oct. 19-21 Stone Harbor, Sturgeon Bay Lake Lawn Resort, Delavan Holiday Inn, Stevens Point (920) 746-0700 (800) 338-5253 (715) 344-0200 Clerks, Treasurers, Fin. Officers Assessors Institute Police and Fire Commission Institute Sept. 13-16 Workshop June 22 -24 Wilderness Resort, Wisconsin Dells Nov. 4 Heidel House, Green Lake (800) 867-9453 Glacier Canyon Lodge at (800) 444-2812 Plumbing Inspectors Wilderness Resort, Wisconsin Dells Sept. 21-23 (800) 867-9453 The Riverwalk Hotel, Neenah (920) 725-8441

34 | the Municipality, May 2016 LETTER

LETTERS FROM THE STREET

Dear League of Wisconsin Municipalities, One of our Alderpersons, Alex Young, requested some pictures of potholes if we had any available. Unfortunately, like every city and town across our nation, we have plenty! I have attached some photos from Lincoln Street, which we did a grind/overlay on in 2005. Lincoln Street is a 4 and 5 lane street leading to our main retail district. With some creative planning, we were fortunate enough to do a grind/overlay on the 5-lane portion (about ½ of the overall length) of Lincoln Street during the summer of 2015 at a cost of approximately $560,000, which is over 2.5 times more than our typical street work budget for an entire year. We apply and receive a grant from the Rhinelander is the Home of the Wisconsin DOT on a biennial basis to apply toward street projects but that grant Hodag and is the hub of Oneida is typically in the $21,000-$22,000 range, which does not get us anywhere close to County, rich in outdoor activities where we need to be. and also a strong commercial and industrial base. Rhinelander Winters like the one we just experienced are particularly trying for Public Works has a resident population of staff. The warm/cold/warm repetitiveness makes it appear as though there is no effort approximately 7800+/- with being made. When in fact we have had crews out on any day that the potholes are not a daytime population of completely iced over. We have expanded typical efforts by blowing or sweeping out the approximately 15,000+/- due potholes, heating the pothole with a propane torch, and then tamping the patch for to individuals traveling into the better results but those efforts are often fruitless once the melting process begins and city for work, shopping, or their allows water to seep under the patch and then refreezes, pushing the patch out of education at Nicolet Technical the holes. College. Rhinelander is set to I attempt to educate the public on street repair costs every opportunity I get but begin a $9.7 million Downtown it is often misunderstood as mismanagement of personnel and funds. The public Infrastructure Improvement does not always see the costs and it is our responsibility to educate them on that. Project in the spring of 2016 According to the pricing history we have on file, we have seen asphalt prices triple and through the acquisition of concrete prices double over the last 15 years, all while our city boundaries expand for multiple utility related grants and development, which often adds to the burden of streets in need. loans. Rhinelander’s ambitions I’m sure I speak for many municipalities when I say “Thank You” for your efforts of are to improve the overall trying to place our communities in better funding situations for road and street repairs performance of our utility system and keep up the good work! as well as the downtown retail experience for our businesses, residents, and visitors alike. Thank you, With the help of state legislators, Tony Gilman, Street Superintendent, City of Rhinelander Rhinelander was fortunate to have received the opportunity to pursue City of Rhinelander Street Superintendent Tony a Premier Resort Area Tax. If Gilman is a lifelong citizen of Rhinelander and an passed by referendum on 18-year veteran of the Public Works Department, April 5, 2016, this would allow following in the footsteps of his grandfather Virgil the city to impose a ½ cent on Hoffhein and uncle Lloyd Hoffhein. Tony takes pride the dollar sales tax on tourist in the 75+ years of service and counting that his family related items to be used solely has provided to the City of Rhinelander. Tony can be for transportation infrastructure contacted at [email protected]. improvements. Send your pothole pictures to [email protected].

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