The Vanguard

Reader asks about Falls Fest 

A Vanguard reader asked if we could look into the Falls Fest matter from a historical perspective as well as some of the "deals" that Falls Fest seems to get that no other non-profit organization(s) seem to get in Menomonee Falls from the Village Board.  We will attempt to cover this issue the best we can when the local press seems to under report or not report on at all over the last few years.  Thanks for the idea.  We apologize ahead of time for the length of this posting, but it is necessary to fully appreciate the scope of all of these dealings with Falls Fest and the taxpayers over the last 13-15 years. 

Falls Fest (www.falls-fest.com) is being held at Village Park July 24-27.  Stop by over the weekend to support the event.  

We will have had over 3,500 hits on our way to 5,000 in the first nearly three weeks of this blog.  We appreciate you visiting our site and your communications to The Vanguard.  We promise to keep it fresh, new and exciting.

Celebrating Menomonee Falls

Menomonee Falls has a rich history with many wonderful generational experiences.  We are afforded many opportunities.  We have a plethora of home choices.  Many job opportunities.  Great churches to attend.  An arts and culture venue of good entertainment.  Retail, restaurant and commerce continue to improve on an annual basis.  Many school choices.  Parks and recreation programs for all ages.  Good families.  Basically a safe community.  Various citizens and community groups thought it would be a good idea to help celebrate the 100th birthday of Menomonee Falls in 1991-92. 

Falls Fest is born

To celebrate the rich history with an eye on the future, the community came together with many volunteers, donations and hours of planning to observe the first 100 years of Menomonee Falls in 1992.  Observations at the time were that everyone enjoyed the experience and were appreciative.

To keep the event going on an annual basis, Falls Fest, a federal tax exempt 501 (c) 3 non-profit corporation, was incorporated in 1993-94 with a Mission Statement that read, "The Menomonee Falls Festivals Corporation is a charitable, non-profit, volunteer organization whose mission is to sponsor events that foster community spirit.  Funds generated from such events will be used to support community activities." 

Falls Fest is not part of the Village Government.  That is a misconception although Falls Fest is provided with many free Village Services (police, parks, EMT, fire, public works, etc.) for their event at the taxpayer's expense each year.

Former Village President, Bob Steliga, is the President of Falls Fest and current Village Trustee, Jeff Steliga, is the Treasurer of Falls Fest.  Current Village Trustee and Waukesha County Supervisor, Jim Jeskewitz, has been mentioned publicly as being on the Board of Directors of the some 10-20 member board without the other names ever being released to the public.  Former Village President, Joe Greco, has also been mentioned publicly as being associated with Falls Fest along with other current and former Village/Waukesha County Officials.

Community Giving and 990 Federal Tax Returns Revealed 

A reader of The Vanguard made available the community giving of Falls Fest and their 990 Federal Tax Returns (1998-2006) at www.guidestar.org.  The Falls Fest 2007 990 Federal Tax Return has not been filed yet.  Non-profit 501 (c) 3 990 Federal Tax Returns are due May 15th each year.  According to Guidestar, Falls Fest filed their federal tax returns late for years 2002, 2004, 2006 and 2007. 

A July 2004 published report in Menomonee Falls Express News, quoted current Village Trustee and Falls Fest Treasurer Jeff Steliga as saying, "We have donated $211,000 to various community organizations over the last 11 years."  Former Village President and current Falls Fest President, Bob Steliga, was quoted in the December 2003 Menomonee Falls News as saying, "Everything we make goes right back into the community."  He also said at the time, "They can kiss my @%#.", when he was asked if he would make Falls Fest financial records available to the public which is required by federal law. 

It is true that Falls Fest has given back to the community in the form of donations and gifts over the last 10-13 years.  Their giving is deeply appreciated.  However, a closer look at their tax returns shows a quite somewhat different accounting of what has been said and believed publicly as to what has actually occurred.

Guidestar only has Falls Fest federal tax returns from 1998-2006.  The following is a summary of those returns:

               Gross Receipts*   Expenses**  Net Rev   Gifts    Prof/Loss    Cash  Theater costs

1998           $144,789          $ 94,106        $50,683  $16,577    $34,106  $34,015

1999             126,639            93,874          32,765      8,857     23,908    52,960

2000             140,753          104,641          36,112     25,449    10,663    66,778

2001             154,551          126,079          28,472     30,490    (2,018)    58,278

2002             139,859          111,710          28,149     15,415   12,734     81,207

2003             163,434          119,903          43,531     28,080   15,541     86,438

2004             166,130          132,973          33,157     21,990  (12,975)    66,519     21,142***

2005             158,609          135,766          22,843     21,264  (30,432)    37,273     32,011

2006             176,998          132,408          44,590     13,888   30,702     32,410  not available****

Total        $1,371,762     $1,051,460       $320,302  $182,010 

*These receipts include annual revenue from the Falls Fest Event of about $130,000-$150,000, Chamber of Commerce annual rent about $15,000-$18,000 a year for the Kohler Zahn House, interest income from bank accounts of about $500-$1,000 a year.

**These expenses include the annual costs of the Falls Fest Event of about $120,000-$130,000 and the annual property taxes on the Chamber of Commerce Kohler Zahn House of about $4,000-$4,500 along with some other minor expenses for the house.

***First year of expense disclosure on tax returns for the cost of the Marcus Theater on Main Street that includes insurance, mortgage, taxes, utilities, etc. that was purchased by Falls Fest on March 13, 2003 as part of a deal with the Marcus Corporation and the Village Planning Commission and Board of Trustees in approving 4 new screens 10 days earlier at the March 3, 2003 Village Board Meeting. 

****2006 tax return discloses that Falls Fest had to "capitalize" or borrow even more money (about $56,000) to stay afloat because of the high costs of the Marcus Theater on Main Street that was purchased by Falls Fest as part of a deal with the Planning Commission and Village Board in exchange for the approval of 4 new screens for Marcus Corporation in March of 2003.   

These tax returns are very revealing and beg the following questions of Jeff and Bob Steliga:

• In 2004, Jeff Steliga stated publicly that Falls Fest had given back to the community some $211,000 over the previous 11 years.  Their 990 Federal Tax Returns ('98-'03) show that Falls Fest only gave $124,868 during that time.  Where is the other $86,132?
• In late 2003, Bob Steliga stated publicly that, "...Falls Fest gives everything back to the community that they make."  Their 990 Federal Tax Returns ('98-'06) show that Falls Fest had a net revenue of $320,302 during that time and only gave $182,010.  Where is the other $138,292 and why wasn't "everything" given back to the community that was made during this time? 
• The Journal Sentinel reported in August 2004 that Charity Navigator (www.charitynavigator.org), a well respected and independent non-profit organization evaluator, showed that Milwaukee area charities on average devoted 83.6% of their money toward their missions.  Falls Fest is way below that in their contributions to the community.  Why?  Does this possibly jeopardize the 501 (c) 3 federal tax exempt status of Falls Fest?  Falls Fest had receipts of $177,000 in 2006 and gave away $13,888 or about 8%. 
• When will Falls Fest file their 2007 990 Federal Tax Returns?
• Why does Falls Fest regularly file their 990 Federal Tax Returns late?  
• How is it possible that Falls Fest's expenses are on average about $130,000 a year when Sussex Lions Days, a much larger, expensive and more comprehensive event, are about $110,000 without all of the volunteers and donations with that of Falls Fest?  Sussex Lions file their tax returns on time each year and give away between $35,000-$40,000 a year compared to Falls Fest giving away $13,888 in 2006. 
• How did Falls Fest show a nearly ($44,000) loss for the years 2004 and 2005? 
• Why did the "doubtful accounts" reach an all time high of over $7,000 in 2006?
• Why has the "giving" been virtually cut in half since 2003 ($28,080) to 2006 ($13,888)?
• Why did Falls Fest have to borrow or capitalize $56,000 in 2006 for expenses?
• Why did the cash balance for Falls Fest go from $86,438 in 2003 to $32,410 in 2007?

Preferential Real Estate Transactions Take Place

The Vanguard has reviewed many documents from the last 10 years or so that paint a very troubling pattern of Falls Fest acquiring chunks of real estate which is not mentioned as part of their Mission Statement (see above).

Falls Fest owns two major properties in Menomonee Falls.  The Kohler Zahn House, which is occupied by the Menomonee Falls Chamber of Commerce and Senator Alberta Darling's Senate District Office, on Appleton Avenue near North Middle School and the former Marcus Theater on Main Street near Pilgrim Road in the Pilgrim Village Shopping Center.

The Kohler Zahn House was a historic home of which the estate was desperate to sell because of rapidly deteriorating conditions in the late 1980's.  The following time line will show how Falls Fest, because of their directors being Village Board Members as well, came to own the Kohler Zahn House:

1. The taxpayers, through the Village Board, purchase the Kohler Zahn House for $82,500 in April of 1989 with Joe Greco and Bob Steliga voting yes.
2. The house continues to deteriorate for the next 4-5 years without any work being done on the home while the Village Board tries to sell the property.
3. Falls Fest is incorporated as a 501 (c) 3 federal tax exempt private non-profit corporation with Jeff and Bob Steliga as Directors on May 1, 1993.  Bob Steliga is no longer Village President as Joe Greco has taken over that office.
4. Village Board approves a $100,000 loan with interest to Falls Fest for the renovation of the Kohler Zahn House on April 18, 1994 one day before Jeff Steliga becomes a Village Trustee and Village President Joe Greco votes yes to approve along with Trustee Mike McDonald.
5. The Village Board, including Village President Greco and current Trustees Steliga and McDonald, vote yes on June 20, 1994 for Resolution 1076-94 requiring Falls Fest to enter into a $182,5000 loan with the Village to pay back the taxpayers for the purchase and renovation of the home as part of the official record for the Village.
6. Four newspaper articles from that time, 2 from Menomonee Falls News and 2 from The Milwaukee Journal, clearly state that Falls Fest was required to take the rent from the building to repay the loan to the taxpayers or the Village would take the property back.  The articles clearly state that Falls Fest would oversee the project renovation with volunteers, donations and fund raising to pay for the project.                                          
7. An additional $195,000 of the taxpayer's money, a $125,000 bond issue on 10-31-95 and a $70,000 transfer from the General Fund on 12-31-95, was approved by the Village Board to Falls Fest with Village President Greco and current Trustees Steliga and McDonald voting yes for the continued renovation of the Kohler Zahn House. 
8. Village Board, with Greco, Steliga and McDonald voting yes, approve an addition to the Kohler Zahn House for Falls Fest on 9-19-96.  
9. Checks in the amount of $66,795 were issued to Falls Fest from the Village between January 1996 and June 1997 for expenses that aren't clearly defined.
10. Village Board, with Greco, Steliga and McDonald voting yes, approve the deed transfer and lease agreement of the Kohler Zahn House from the Village to Falls Fest and Chamber of Commerce on 1-6-97 with Attorney Mike Morse, von Briesen & Purtel, s.c., who later became the full time Village Attorney, doing all of the Falls Fest legal work at the taxpayer's expense.  Cost to the taxpayers for the legal work is not disclosed by the Village.
11. Falls Fest enters into a rental lease agreement, prepared by the Village Attorney at the taxpayer's expense, with the Chamber of Commerce on 4-1-97 at $15,000 a year (that is currently $18,000) with the Chamber agreeing to pay for almost all of the costs to occupy the building. 
12. Since 1-1-98, the Village Board, with Greco, Steliga, Jeskewitz and McDonald voting yes, allocate approximately $16,000 a year to the Chamber for "tourism".  Some have suggested to The Vanguard that this money is really used by the Chamber to pay the $18,000 rent bill from Falls Fest.                 
13. The Kohler Zahn House is now assessed at $229,600 as a result of the 2005 village wide reassessment when it had been assessed at less than $200,000 for the longest time after sticking apparently some $400,000 - $450,000 of the taxpayer's money into the purchase and renovation of the house.
14. According to various Village Hall Staff Members in 2004 and 2005, Falls Fest has not repaid the taxpayers $1 for the debt that is owed on the Kohler Zahn House.  One staff member from the Financial Services Department was quoted in Menomonee Falls News in August of 2005 as saying, "I'm having real difficulty tracking the renovation funds.  I'm hitting a real blind spot here."
15. The Journal Sentinel repeatedly reported in a March 2004 article on Falls Fest that an "audit" had been done of their finances by the Village's Accounting Firm, Reilly, Penner & Benton.  In a March 15, 2004 letter released to the public by Reilly, Penner & Benton, the Village's Accounting Firm specifically states, "We were not engaged to, and did not, conduct an audit, the objective of which would be the expression of an opinion, on the accounting records.  Accordingly, we do not express such an opinion."  
16. The Village Clerk's Office released a letter to the public in July of 2005 explaining that there were no minutes of the Committee of the Whole for this loan and transfer transaction between the Village and Falls Fest even though Village Attorney Mike Morse sent a June 22, 1994 letter to the Clerk's Office disclosing these very transactions that were approved by the Village Board on June 20, 1994.
17. The Village Clerk's Office also produced another version of Resolution 1076-94 that mysteriously was not part of the Village's Official Record and did not include the language of having Falls Fest repaying the taxpayers the some $400,000 - $450,000 that it took to purchase and renovate the Kohler Zahn House.
18. It is estimated that Falls Fest has taken some $600,000 - $650,000 from the taxpayers for the purchase, renovation and rental payments of the Kohler Zahn House.     

Falls Fest also acquired the Marcus Theater on Main Street in 2003 under very questionable terms because of their director's position on the Village Board.   

The Vanguard has again reviewed many documents and have been approached by citizens on the condition of anonymity that put this transaction in a totally different perspective when looked at more closely and in an objective manner without the concern of protecting anyone involved.

The following time line will show how some of the Falls Fest Directors used their positions on the Village Board to purchase the Marcus Theater:

1. Marcus Corporation vacates their theater on Main Street in 1999-2000 shortly after they open their new complex at Appleton Avenue and County Line Road after very heated exchanges with the neighbors who did not want the new theater built in their backyard, but eventually agreed after a very strict conditional use permit was implemented limiting the number of screens to 12.
2. The theater sits empty for Marcus Corporation a few years while being assessed at $950,000 and paying just under $20,000 a year in property taxes in 2002.
3. Two prospective buyers separately approach Marcus Corporation in 2002 to purchase the old theater on Main Street.
4. The first buyer thought they had an agreement with Marcus in 2002 on the purchase price (approx. $300,000-$350,000) with Marcus taking a charitable deduction because the buyer was a tax exempt organization.  Apparently, Marcus approached the Village in an informal and preliminary way to see what the Village would think and the idea was immediately shot down by the Village because of the buyer's charitable affiliation.  Naturally, the buyer was extremely disappointed but moved on to find another location.
5. The second buyer was the shopping mall owner of which the theater was attached to.  The shopping mall owner wanted to buy the theater and convert it into retail/commerce as an extension of his 2003 renovation project of the mall.  As a matter of fact, his renovation sign on Main Street at the time had the theater as part of his mall because he thought he had had an agreement with Marcus Corporation for the purchase of the empty theater in 2002.
6. Unbeknownst to the buyers, Marcus Corporation, at about the same time in 2002, was again approaching the Village to expand their new complex which had been turned down by the Village once before during 2000 because of a strict conditional use permit limiting the number of screens to 12.
7. About 15 hours before the shopping mall owner was to turn over his $565,000 (approx.) cashier check/money order to Marcus Corporation to get the keys to the building, he receives a call from Marcus Corporation calling the deal off sometime in late 2002 without any explanation.  
8. Marcus Corporation begins formal approach to the Village for the expansion of their new complex sometime in late 2002.
9. Falls Fest drafts an Offer to Purchase on 12-10-02 for the purchase ($250,000) of the old theater on Main Street from Marcus Corporation and Falls Fest President Bob Steliga signs the offer on 1-9-03.
10. Planning Commission approves the theater expansion for Marcus Corporation on February 19, 2003 with Village President Joe Greco abstaining.
11. Village Board approves the theater expansion for Marcus Corporation on March 3, 2003 with Village President Greco and Trustees Steliga and Jeskewitz abstaining.
12. Marcus Corporation and Falls Fest President Bob Steliga sign a counteroffer on March 13, 2003 to the Falls Fest Offer to Purchase with an addendum from Marcus Corporation that specifically states, "It is expressly understood that the Seller, or an agent, servant or employee of the Seller, or a related legal entity, intends to seek permission from the Village of Menomonee Falls to add additional movie screens to a property currently in existence in the Village of Menomonee Falls and operating as a movie theater.  But for the Seller's ability to obtain permission to add four screens to that theater it would not consider or accept Buyer's Offer to Purchase the building formerly used as a theater in Menomonee Falls which is the subject of this Offer to Purchase."
13. Falls Fest now owns the building and gets financing from a local bank under questionable circumstances for reasons that can't be disclosed yet. 
14. When Menomonee Falls News confronted the Steligas and Joe Greco about this transaction with Marcus Corporation in December of 2003, they all had very conflicting stories about their recollection of the purchase of the theater.  Marcus Corporation said that Greco wanted the theater for free which he denies knowing anything about even though he abstained from voting on the proposal because, according to Village Minutes, of his affiliation with Falls Fest .  Bob Steliga said he didn't know anything about the purchase of the theater in exchange for the approval of the additional 4 new screens for Marcus Corporation even though his signature appears on the Counteroffer to Purchase from Marcus Corporation.  Jeff Steliga said there was no "quid pro quo" with Marcus for the purchase of the theater even though his dad signed the counteroffer that included the contingency of the sale to Falls Fest based on Marcus getting the approval of the additional 4 new screens by the Village Board. 
15. The Vanguard  has also spoken to a former Village Official and reviewed confidential communications between the parties that put this issue in a very different light.  For obvious reasons, The Vanguard can not disclose the details of those communications yet.  Safe to say, Falls Fest never had any intention of turning the old theater into a performing arts center contrary to what has been reported in the press for years.
16. A member of a very well known and widely respected local non-profit organization contacted The Vanguard to disclose that Falls Fest took $500 from them for the promotion of the so called performing arts center and never saw the money again or how it was even used.  If the money was not used for its intended purpose, it should have been returned to the non-profit organization. 
17. The local press has reported the theater being sold with big plans for office and retail development and then that deal mysteriously fell through in 2007.  The theater has been used for indoor baseball practice for the last several years.

Wisconsin State Statutes Strictly Prohibit These Types of Apparent Transactions             

State statutes that govern local elected officials make it very clear that these officials can not engage in any type of voting or transactions that could be interpreted to benefit themselves, an immediate family member or an organization that they are affiliated with because of their public office position. 

The Vanguard will let you decide what to believe with these transactions involving Falls Fest and the Village Board now that more of the story has been revealed. 

Tell us what you think

Use the comment section below to answer this week's questions.

Question 1

Should Falls Fest pay the taxpayers back the some $600,000-$650,000 that they have taken so far for the Kohler Zahn House?

_____yes

_____no

Question 2

Should Falls Fest Directors who are also Village Trustees avoid any appearance of deals between the two parties?

_____yes

_____no

Question 3

Should Falls Fest file their 990 Federal Tax Returns on time and make their financial records available to the public which is required by federal law?

_____yes

_____no

Next week's blog...Whatever happened regarding Falls Cable Access?

A huge thank you for reading The Vanguard over the last two weeks.  Like Oldies 95.7, the hits just keep coming.  By the time this posting is logged, we will have received over 2,400 hits in less than two weeks on our way to 3,000 and beyond.  We promise to keep the blog interesting, informative and insightful.  Thank you.

A number of citizens have either emailed, called or stopped members of The Vanguard on the street over the last two weeks asking for a follow up on a vast number of issues involving the Village President that they feel the mainstream press and media choose not to cover or follow up on for whatever reason.

The Vanguard, with the help and assistance of its readers, has attempted to do some research in an effort to bring our community those updates.  The Vanguard also realizes the commitment, time and effort that is expected and required of an elected official to hold office, which is deeply appreciated by the community.

The citizens have just simply asked what happened with certain issues involving the Village President over the last couple of years of which there seems to be no follow up.  We will attempt to answer those questions.  We apologize up front for the length of this post, but there is so much to cover that it requires a lot of inches.

One reader of The Vanguard from the south side of the Falls provided us with the Village President’s Law Firm marketing brochure that they had received some time in 2006 as an insert with a promotional flyer for the solicitation of condo sales in their newspaper box.  Apparently, there were many other flyers and law firm brochures distributed at this time in 2006 soliciting the sale of these condos with the Village President.

The reader thought it was very odd that the Village President would be offering his legal real estate services as a packaged program for the sale of condos that the Village President may have approved in his capacity as the Village President and as a Planning Commission Member.  The reader also wondered if this might be in violation of any state statutes that govern the “standards of local officials” and or “code of ethics” for local officials based on the reader's personal knowledge and experience of having worked with elected officials for over 30 years in their capacity with a very well respected financial organization in Wisconsin. 

Like an NFL referee who is asked by a coach to take a look at a questionable play during the game, “Upon further review…” we have found the following information to verify the reader’s concerns:

1. The marketing brochure is indeed that of the Village President’s Law Firm promoting himself as a real estate attorney as well as being the Village President and serving on the Village Planning Commission which approves or denies all business proposals before the Village.
2. The condo solicitation brochure is that of a company that had just completed and was now in a position to sell a large number of condos in Menomonee Falls very near the Village President’s former residence just off of Good Hope and Appleton Avenue.
3. The Village President did indeed approve this businesses’ condo proposal at the August 9, 2005 Planning Commission Meeting.
4. The Village President did indeed approve this businesses’ condo proposal at the September 6, 2005 Village Board Meeting.
5. The Citizens’ Guide to Standards of Conduct for Local Government Officials strictly prohibits the following:
1. Act officially in a matter in which the official is privately interested.
2. Use government position for private financial benefit.
3. Accept transportation, food, beverages, lodging or anything else of more than token value offered because the official holds a government position.
4. Solicit or accept rewards or items or services likely to influence the official.
5. Offer or provide influence in exchange for campaign contributions.
6. Wisconsin State Statute 19.59 strictly prohibits the following:
1. A local public official may not accept items or services of substantial value for private benefit, or for the benefit of the official’s immediate family or associated organization, if offered because of public position.
2. A local public official may not accept (and no one may offer or give) anything of value that could reasonably be expected to influence the official’s vote, official action or judgment.
3. A local public official may not accept (and no one may offer or give) anything of value that could reasonably be considered a reward for any official action or inaction.
4. A local public official may not take official action substantially affecting a matter in which the official, the official’s immediate family, or associated organization has a substantial financial interest.
5. A local public official may not use office or position to produce a substantial benefit for the official, the official's immediate family, or associated organization.  

The Vanguard spoke with a number of realtors and attorneys who practice in this profession regarding this type of an arrangement and they made it very clear that an attorney stands to make a lot of money with these types of closings as there is very little work to do for condo sales.

Everyone has to make a living.  That living should be done in an open, honest and ethical way.  Especially for elected officials who are entrusted with the public’s money.  The Vanguard would have asked the Village President questions about this matter for the citizen who raised the issue, but he makes it a practice to not return phone calls or answer emails.

A number of citizens have observed that the Village President has abstained from voting over the last couple of years on a number of business proposals before him at the Planning Commission and Village Board because of his close ties or association with these business people when they don’t recall him ever doing so over the last 15-20 years when these same business people had come before him for approval of their proposals.

It has been reported by the local press over the last couple of years that the Village President has abstained from voting for proposals from at least two business people because he is now or has been their attorney in the past.  He did not abstain from voting on the condo business sale proposal in late 2005 near his former residence referred to in the first part of this blog.  He voted twice to approve this proposal at the Planning Commission and Village Board levels.

The Vanguard has looked at a lot of documents and has spoken to a number of people who have asked for anonymity about this matter.  It is clear that the Village President never abstained from voting on these business proposals during his many years on the Planning Commission until he became Village President and started representing these same business people.  The Village President told the Journal Sentinel in March of 2007 when he was asked about this issue, that he now abstains from voting for these business proposals because he represents them in matters not associated with their proposals before the Village.

If that is true, then why didn't the Village President abstain from voting for their proposals over the last 15-20 years when they came before him at the Planning Commission level?

One businessman contacted The Vanguard on the condition of anonymity and out of frustration because his proposal was being stonewalled by The Village Board for several years.  He said he spoke to one of the business people who were regularly getting their proposals approved on a very timely basis by the Planning Commission and Village Board to see how this was getting done for them.  The business person told him it was simple, “All you have to do is hire the Village President as your attorney, he abstains from voting to make it look ethical, the votes are gotten for approval and then you pay him afterwards.”

Another local longtime business person contacted The Vanguard and said he had some legal work done for him by the Village President and wanted to pay him for his legal bill.  The Village President said, “Let’s just call it even.  If you do some work for me in exchange for what I did for you to settle up for whatever is owed to each other, that'll be fine.”

This practice is legal and is called bartering but must be disclosed.  This is similar to the situation that the Village President found himself in when it was reported by the Journal Sentinel that he had sold his Menomonee Falls home in 2006 to move to Sussex and live rent free from a business person that he represented with proposals before the Planning Commission and Village Board at the time.  More on that later.

Another very popular and prominent business person spoke with The Vanguard on the condition of anonymity about a local company that had hired the Village President to represent them in a strong armed tactic maneuver for the sale of their property in a very high profile area of the Falls. 

The business person refused to sell the property to the Village President’s client which could have ultimately resulted in the Village President having to once again possibly abstain from voting because he represents the very company who would be trying to get Village approval for this proposal.

Unfortunately, the business person was forced to hire his own attorney at a great expense to stop the strong armed sale by the Village President’s client and to refute an altered document accusation.

A number of The Vanguard readers have asked, “Who paid the Village President’s rent bill when he sold his house in the Falls and moved to Sussex in 2006?”

The Journal Sentinel reported in 2006-2007 that the Village President had sold his home in Menomonee Falls and had moved to Sussex to live rent free from a Menomonee Falls business person because his house sold unexpectedly.  This same business person had proposals before the Village President at the Planning Commission and Village Board levels at the same time he was living in Sussex rent free from this business person.  The paper also reported that $600 in campaign contributions were made to the Village President in early 2007 by this business person shortly after their proposals were approved by the Village in late 2006 of which the Village President had recused himself when he had not done so on the Planning Commission before becoming Village President for this same business person.

It was reported that the Village President moved to Sussex for 4 or 5 months in 2006 and as of March of 2007, some 6 months after he had moved back to the Falls from Sussex, had not yet paid his rent bill of some $3,000 because in his words, “…had not received a bill yet”.  This business person, whom the Village President represents, also requires his Sussex renters to pay a $100 a month premium for renters who rent from him for less than 6 months. 

The readers of The Vanguard would like to know if the some $3,000 rent bill and $400 premium fee from 2006 were ever paid or were they simply part of a possible bartering exchange between the two parties?

The Vanguard also learned that the Village President asked the taxpayers to pay his legal bill of some $700-$1,000 for a personal legal opinion that he had requested when he sold his house in the Falls to move to Sussex rent free in 2006 for residency requirements of elected officials.

The readers of The Vanguard found it incredibly interesting that the Village President was able to sell his residence in June of 2006 for nearly $80,000 more than it was assessed at just 180 days earlier.

The Village had a village wide re-assessment in 2005 with the Village President’s house being assessed at $235,400 and then was sold just 180 days later for $312,000 at a gain of nearly $80,000 or about 35%.

This can only mean one of several things.  The property was greatly under assessed for many years.  The company who assesses property for the Village didn’t do their job very well or that Menomonee Falls has the hottest real estate market in all of southeastern Wisconsin.  Or, is it something else that is not known?

Real estate agents that were contacted about this found it almost impossible for a property to sell at a 35% premium unless there were extenuating circumstances for a possible development or takings by the Village Government.  They also said that the market in the Falls had already started to soften in 2006 at the time the Village President sold his house and moved to Sussex rent free.

Citizens Appointment Committee Abolished  

The Village President lead the way to abolish the Appointment Committee in 2006-2007 that was created by the Village Board to have a fair and balanced way of reviewing those individuals who volunteered to serve on various Village Committees as nominees of the Village President.

The process involved public notices to the community in the newspapers and on the village website for vacancies or renewals of committee appointments and considerations.  The Village President would accept applications and the Appointment Committee made up of Village Trustees would review and interview the applicants nominated by the Village President for Village Board approval.

This system worked extremely well for the some 15-20 committees involving some 100 people

The obvious reason for this was to avoid any hint of nepotism, the alleged good ole’ boys’ network or the wink/wink nod/nod way of doing things for committee appointments.

The Village President led the way for the abolishment of the Appointment Committee to go back to the old way of putting citizens on various committees as a personal choice of favoritism or reward from the Village President.  That is his prerogative, but once again the citizens are shut out of the very community that they live in and want to serve because of an apparent closed system.

Perhaps the Village President and our community could have been spared the embarrassment of the August 2006 incident involving Menomonee Falls resident and WTMJ TV Channel 4 personality John Mercure, being appointed to a Village Committee that he did not seek nor could he accept because of Journal Communications corporate policy if he had simply followed Village Policy that was in place instead of ignoring it.

There are a lot of citizens that would love to serve the Village if they were only given a chance instead of the closed system that apparently exists with the current Village President.

Lights, camera…good bye Town Hall Broadcasts.

Another citizen contacted The Vanguard last week to report that the Village President has led the way to shut down the live broadcasts of Town Hall Meetings at the Village Board Meeting.

The Village Board Meetings are preceded by a 15 minute live broadcast of a Town Hall Meeting giving residents the opportunity to make public comments to the Village Board.  This process has been in effect for many years and has worked extremely well giving the citizens a voice and a chance to meet with their elected officials on the record and in person.  

It has been reported in the Express News that the Village President wanted to abolish this longtime policy with a resolution to the Village Board to shut it down.

With the elimination of this longtime policy, there will no longer be any record of issues or questions brought to the attention of the Village Board by the citizens because this part of the Board Meeting will no longer be recorded or broadcast for the public to view.

The citizens should be given every opportunity possible to ask questions of their elected officials and have a record of it regarding policy decisions, financial matters and or the behavior of those individuals that affect the citizenry.

Citizens are not buying the rational of the Village Manager or Village Attorney for shutting the broadcast down due to this function not being open to television and that it could be in violation of Open Meetings Law.

Why not have the Village President simply announce before the broadcast that citizens are welcome to make comments and ask questions and that officials would be happy to respond to them at a future time if they would simply leave their contact information.

Another citizen asked if it was legal when Express News reported that the Village President recently gave a large sum ($4-$5,000?) of money from his campaign account to the school district for the renovation of the press box at the high school.

It is clearly understood that political campaign accounts should only be used for political purposes unless one tries to exercise a little known state statute to try and get around it. 

The Government Accountability Office (GAO) said that prior to May of 2006, this practice was strictly prohibited and then the legislature passed a law that allowed political campaign accounts to give monies out for other purposes because some campaigns had taken contributions from felons and did not want to keep those contributions once they were discovered.

While the GAO said the law remains open to interpretation, politicians are allowed to do this but may have some explaining to do with contributors who thought they were making a contribution for political purposes and not charitable giving purposes.

State Statutes 11.25 and 11.65 are very clear that this type of practice is strictly prohibited.  If it is done, there has to be a full disclosure within 5 days to the Clerk’s Office and an explanation as to why the monies were not retained for political purposes.  One would have to check with the Clerk's Office to see if this has been done for the Village President's Campaign Account or if the Waukesha County DA's Office has received any inquiries.

This practice is usually done when a person is no longer going to be running for public office and their account is closed out.  The Village President has announced publicly on several occasions that he is not going to run again in 2009.

The Journal Sentinel reported in March of 2007 that the Village President had missed 12 Board Meetings in his first nearly two years in office.

Citizens have asked what his attendance record has been since then and it appears, according to the village website (www.menomonee-falls.org) that another 8 meetings have been missed in a little over a year.

That seems like a lot of Board Meetings to miss.  One could only hope that if a person really wants to hold public office that they would attend scheduled meetings for that position.

Being Taken to the Woodshed is not fun

One official with the Village shared with The Vanguard an experience they had with the Village President where they were in the words of their father, "...taken to the woodshed" by the Village President because this official needed to be, in the words of the Village President, "more cooperative" and provide a "unified front" to the public with their comments in the press and the questions they were asking at various meetings.

The Village Attorney was required to be at this meeting by the Village President with State Statutes in hand to remind this official what "could" and "could not" be done without certain potential consequences if they continued with their ways.

Fortunately, this official didn't cave in to the Village President and his tactics and continues to do what they think is best for our community.  Many thanks for having the courage to stand up and do the right thing in the face of these types of circumstances.     

What do you think?  

Please let The Vanguard know what you think about these issues involving the Village President.

Question 1

Should the Village President pay the rent bill ($3,000) and rental premium fee ($400) when he lived in Sussex in 2006 to the company whom he represented for business in the Falls?

_____yes

_____no

Question 2

Should the Village President have agreements with businesses that have proposals before the Village or should he avoid any appearance of these types of agreements for ethical reasons?

_____It’s ok to have the agreements.

_____Avoid these types of agreements for ethical reasons.

Question 3

Should the Village President reimburse the taxpayers some $700-$1,000 in residency opinion legal fees when he sold his house in the Falls and moved to Sussex in 2006?

_____yes

_____no

Question 4

What is an acceptable attendance record for elected officials at Village Board Meetings?

_____75%

_____85%

_____95%

Question 5

Do you want the Town Hall portion of the Village Board Meetings broadcast live or shut down like the Village President wants?

_____live

Just a short note of thanks for visiting The Vanguard over the last week.  The blog was started about a week ago and by the time this new blog is posted around 1,000 visits will have been made to The Vanguard.  We’re off to a really good start thanks to you.  Let’s keep it going.  We have heard many positive comments about the blog so far and  promise to keep it interesting and informative so our community has somewhat of an idea of what is really going on with our local politics that will affect us for years to come.

In the early 90’s, word was being spread around the Falls by local leaders that our community stood to gain a “windfall profit” by having a dump in our backyard.  All kinds of numbers ($10 million, $15 million, and $20 million) were being thrown out by our local leaders as to how much money the Village would “make” by having a dump and allowing all of the neighboring counties and perhaps other states to bring their trash to Menomonee Falls.  After many meetings with the various governmental entities, it was decided to bring a dump to Menomonee Falls in 1993-94.  Negotiations were concluded with the waste vendor agreeing to pay “tipping fees” to the Village to make up for the tax revenue that would be “lost” forever in lieu of having a tax base that would become a dump.  It was commonly accepted from public reports and discussions that the number of $15 million was going to be the net amount the Village would receive in “tipping fees” from the waste vendor.  The “tipping fee” was an agreed upon assessed amount paid to the Village per ton of garbage left at the dump by the vendor. 

As is often the case with local governments, there is little if any follow up or scrutiny of public policy decisions that have been implemented that affect our community.  It is without question that we need a place to send our trash.  The debate involves whether or not our community got what it was promised some 15 years ago by our local leaders and whether or not we are getting the most out of this deal for the future that will leave us with lost tax base, environmental concerns, lost tax revenue, potential litigation issues and aesthetic concerns forever.  Let’s just get it right now so that our community can look back in 15-20 years with pride and satisfaction instead of questions and second guessing because pertinent information may not have been fully disclosed at the time by our local leaders when it’s too late.

The following is what actually happened for the Village taxpayers with the waste vendor tipping fees from 1994-2003 in the initial 10 year period:

 Waste Management (WMX)           for Garbage Collection                          

     1994        $  176,761                              $  726,365

     1995         1,342,142                                  773,002

     1996            961,099                                  817,001

     1997            984,199                                  865,004

     1998         1,052,369                                  887,976

     1999         1,405,099                                  864,988

     2000         2,019,309                                  843,982

     2001         2,191,564                                  903,287

     2002         1,749,706                                  981,517

     2003         2,049,425                               1,007,456

                  $13,931,673*                           $8,670,578*

*These numbers are from Village Financial Department

The taxpayers did not receive $15 million like they were told by our local leaders in 1993-94.  The Village would not have gotten $13,931,673 from WMX from 1994-2003 unless the taxpayers gave WMX $8,670,578 to begin with.  Waukesha County did not receive any portion of the tipping fees.  There are many examples all over America where various businesses have to pay the local municipalities large amounts of royalties, taxes, federal and state income taxes, dividends, leases, contributions, fees or providing services in exchange for locating their business in that particular community.  More about that later.

The Village had to renegotiate a new 10 year contract with WMX in 2004 with the dump's closure scheduled for 2014 for permit purposes.  After many meetings and heated debate in 2003-04, the Village agreed to accept a $33 million, 10 year payout in tipping fees from WMX in early 2004.  Unfortunately, some of the Village Board Members, one who was on the Waukesha County Board with close ties to the County Board Chairman from the Falls, wanted to give Waukesha County at least 10%, when they had never received any of the tipping fees previously, of the projected $33 million from WMX when they knew that the taxpayers had already been stuck with a $42 million bill for the new library, police station and village hall Municipal Facilities Fund in 2000-02 that was already some $17 million short and would severely and adversely affect the taxpayer with an average of $800-$1,000 in new taxes above and beyond normal property taxes starting in 2016 through 2022, if not sooner, when the community was repeatedly told by the same Village Board Members that everything had been paid for without one penny from the taxpayers. 

Ultimately, in early 2004, the Village agreed, much to the chagrin of several Board Members at the time, to give the County 5% or $1.65 million in tipping fees over the new 10 year contract leaving the village taxpayer in an even worse debt situation with only $31.35 million of the originally promised $33 million which is well short of the needed $42 million.  Former and current Village Officials at the time, blamed the economy, the 911 Attack and low interest rates for the $17 million shortfall.  This is the agreement that the Village and WMX have been working under for the last four (4) years.

The following is a summary of that agreement since 2004:

WMX Tipping Fees to Village          Village Taxes to WMX       

     2004     $2,034,249                               $1,000,671

     2005       2,724,081                                 1,012,054

                  $4,758,330*                              $2,012,725*

Remember, the Village does not get $4,758,330 from WMX unless the taxpayers give WMX $2,012,725 first.  This is a far cry from the $3.1 million in annual payments for 10 years from WMX that our community was told it was going to get by certain members of the Village Board and Orchard Landfill Siting Committee at the time and some which still serve on those respective committees.

*Note: These numbers are supplied by the Village Financial Department

            The Vanguard requested the 2006-07 numbers from the Village

            Manager last year and have yet to receive them.

The new Village Manager met with a couple of members of The Vanguard almost a year ago and informed them that he was immediately given an edict by the Village Board to “fix” the $17 million shortfall for the library, police station and library Municipal Facilities Fund.  It’s been obvious for a long time that the Village needed to upgrade these facilities and it can be debated whether or not the upgrades needed to be as extravagant as they are, but the issue remains the same that our community was repeatedly told by our local leaders at the time, some of which still remain on the Board, that these facilities were all paid for without any dollars from the taxpayers which we now know not to have been true.

If this is true, then The Vanguard would like the Village Manager to make this public knowledge as to how these projections were attained without expanding the life of the dump and how the $17 million shortfall that has been suddenly and mysteriously made up since his arrival just one short year ago.  The only way that this could be possible is if the Village had an interest free bond(s), a write down in interest, a forgivable bond issue(s) or a windfall profit to pay off debt service early.  Also, if the shortfall has been made up, why is the dump’s life expectancy currently being negotiated to be extended and what will the projected tipping fees be to the Village and what will the County’s and Germantown’s cuts be?  Several members of the Village Board have frequently criticized those who raise these questions because they feel the numbers are outdated, misleading and incorrect.  Ok, then please give The Vanguard the current, accurate and truthful numbers and we will print them.  After all, it’s just the taxpayer’s money.

Village Assessor Projects $500,000 Loss in Tax Revenue with Dump Closure in 2014

The Village Assessor at the time (2003) released a letter to the public in response to a committee member's request stated that the property taxes from WMX in 2013 would be about $553,000 a year for the dump operations.  Once the dump closed in 2014, taxes from WMX would drop to about $53,000 or a loss of $500,000 a year forever to be picked up by the taxpayers of course.  The projected annual $3.1 million payments from WMX would also stop because the dump would then be closed leaving the taxpayers to make up for the projected $17 million shortfall that will hit the average homeowner with $800-$1,000 in new taxes above and beyond their regular property tax bill.  The Village also does not have any selling rights to the methane gas from the dump with WMX for revenue purposes.

Started in 1999, at a cost of approximately $16,500,000 (plus debt service/interest) to the taxpayers being paid back by the businesses that have located in the business park, TIF District 5 is located across the street from the dump.  Nearly 10 years later, it is still not full (about 50-60% occupied) and thanks to those businesses that came to the Falls, the debt service is currently being met.  The concern of course is how will the remaining available lots be sold with a dump across the street when the businessman who built the business park was told that the dump was probably going to be closed in 2014 and had no idea of it being expanded?  Tough sell when the property is across the street from a dump that is going to eventually be the size of a small mountain like the other already covered area that exists.

Many businesses across America have to make huge concessions to local governmental entities in order to domicile their operations in that particular location with royalty payments, tax rebates, provided services, federal and state income tax payments, dividends, leases, contributions to the community, etc.  The Vanguard is asking WMX to do the same for Menomonee Falls.  The issue is not with WMX, but it is with those local leaders who promised our community in 2002-03 and some of which still remain on the Village Board, that the $42 million Municipal Facilities Fund would be paid for, “…without any taxpayer’s dollars” that need to come up with a solution to correct this situation and soon.

Here’s the Corporate Profile of WMX (www.wm.com) as of 12-31-07:

·         Total Revenue: $13.31 billion

·         Net Income: $1.16 billion

·         More than 47,000 employees

·         Some 277 landfills

·         5 year Projected Growth Earnings 10.89% (www.tdameritrade.com)

·         $17.9 billion Market Cap

The Vanguard has done a little research and has found just a few of the possible hundreds of examples that currently may exist of the following arrangements across America:

• Oil wells in Los Angeles and Beverly Hills (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a5fyvudrWEoo)
• Oil drilling in Alaska (http://www.earthrights.net/docs/oilrent.html)
• Natural gas drilling in Fort Worth, Texas (http://money.cnn.com/2008/04/30/news/economy/elkind_ftworth.fortune/index.htm)
• Commanche Peak Power Plant in Glen Rose, Texas (http://www.txucorp.com/power/plants/comanche_peak.aspx)
• Portage Power Plant in Columbia County Wisconsin (Pacific Township) (www.co.columbia.wi.us)
• Natural gas in Wyoming (http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2004/10/25/MNGED9FNH01.DTL)
• Natural gas in Pennsylvania (http://www.timesleader.com/news/hottopics/shale/Study__Gas_royalties_will_help_all_of_Pa__06-25-2008.html) 
• John McCain's pick as his vice-presidential nominee gets it too (http://www.breitbart.tv/html/163813.html)

The $85 per household annual $1.2 million garbage tax indexed at 3% a year left unchecked will result in the following increases without a vote by the Village Board:

2013    $  98.55

2018    $114.26

2023    $132.47

2028    $153.56

The Vanguard is seeking openness and transparency from our local elected officials on this issue.  We will provide their contact information so they will know how you feel about the debt service and garbage tax:

      Trustee Sharon Ellis                                 Trustee Dennis Farrell

N79 W15360 Goldenrod Drive               N94 W15987 Cherokee Drive 

255-6478                                                251-0820

Sellis01@msn.com                     &nb