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2003-11-13 Info Packet
CITY COUNCIL INFORMATION PACKET CITY OF IOWA CITY November 13, 2003 www.icgov.org NOVEMBER 17 WORK SESSION ITEMS IP1 Memorandum from Assistant City Manager: Responses from Latham & Associates Memorandum from Assistant City Manager: Responses from Latham & Associates from University of Iowa questions SEE ADDITIONAL INFORMATION ON ABOVE (PUBLIC POWER in Special meeting folder of 11/17 under correspondence) IP2 Memorandum from Council Member Kanner: Municipal Electric Efforts Nationwide I M,SCE''^.EOUS ,TEMS IP3 Letter from City Manager to FY04 Community Event and Program Funding Recipients: FY05 Community Event and Program Funding Request Process IP4 Letter from City Manager to James Knapp: Response to Complaint Filed with the U.S. Department of Housing and Urban Development (HUD) - 64-1a Property IP5 Memorandum from Planning and Community Development Director to City Manager: Plaza Towers IP6 Memorandum from Planning and Community Development Director and Development Code Rewrite Project Planner: Development Code Rewrite Project IP7 Response Letter from Traffic Engineering Planner to Matthew Hayek: Hayek Letter Dated November 4 - Downtown Congestion IP8 Memorandum from Senior Center Coordinator to City Manager: Participant Use of the Center's Exercise Equipment Room IP9 Memorandum from Council Member Kanner: Attracting the Creative Class IP10 Article [Truth0ut]: Without Honor [Pfab] IP'I'I Iowa City Police Department Use of Force Report - October 2003 IP12 Email to Senator Grassley from Garry and Betsy Klein: Support SAFE Act IP13 Email to Senator Harkin from Garry and Betsy Klein: Support SAFE Act IP14 City of Iowa City Quarterly Investment Report: June 30, 2003 to September 30, 2003 CITY COUNCIL INFORMATION PACKET CiTY OF iOWA CITY November 13, 2003 www.icgov.org / OVEMBER 17 WORK SESSION ITEMS IP1 Memorandum Assistant City Manager: Responses Latham & Associates IP2 Memorandum from Member Kanner: Electric Efforts Nationwide ELLANEOUS ITEMS IP3 Letter from City Manager --Y04 and Program Funding Recipients: FY05 Community and Funding Request Process IP4 Letter from City Manager to Jam l~napp: ~onse to Complaint Filed with the U.S. Department of Development (HUD) - 64-1a Property IP5 Memorandum from Planning and C munity Development Director to City Manager: Plaza Towers IP6 Memorandum from Planning a~( ~unity Development Director and Development Code Rewrite~P/oject ;r: Development Code Rewrite Project IP7 Response Letter from Traff~jC Engineering ler to Matthew Hayek: Hayek Letter Dated November 4.? Downtown Con( )n IP8 Memorandum from Seni(~ Center Coordinator to Manager: Participant Use of the Center's ExerciSe Equipment Room IP9 Memorandum from C~uncil Member Kanner: Attractin~the Creative Class IP10 Article [Truthout]: Without Honor [Pfab] \ IPll Iowa City Police/Department Use of Force Report - Octol~erX 2003 IP12 Emad to Sena~r Grassley from Garry and Betsy Klein: Supp~'t SAFE Act IP13 Email to Senator Harkin from Garry and Betsy Klein: Support S~FE Act / \ IP14 City of Iov)/a City Quarterly Investment Report: June 30, 2003',~o September 30, 27 / City of Iowa City MEMORANDUM TO: City Council FROM: Dale Helling, Assistant City Manager DATE: November 12, 2003 RE: Responses from Latham & Associates Latham & Associates has provided written responses to the questions posed earlier by Council and by Citizens for Public Power. These are attached for your review prior to your work session on November 17. You should feel free to ask that they clarify or expand upon any of these responses during your discussion. QUESTIONS for Latham & Associates From Iowa City City Council November 3, 2003 To be addressed at the City Council work session on November 17, 2003. Latham & Associates Answers in Bold Print November 11, 2005 1. How many feasibility studies has Latham & Associates done in the past five years? Answer: We have done approximately 25 preliminary electric feasibility studies in the past five years. 2. When was the last municipal electric utility created in Iowa? Answer: We have been told that the last municipal electric utility created in Iowa was in Aureiia in 1976. There are about 135 current Iowa municipal electric utilities. 3. Please respond to the assertion in the Black and Veatch letter that there will be stranded costs for MEC in that they have new generation facilities approved and under construction. Answer: A simple answer to this question is that MEC has generation facilities including gas-fired and coal-fired units that are under construction and those generating units have already been reflected in this study. The further simple answer is that there would not be stranded costs at the time the City would be acquiring generation capacity. The final simple answer is that the Iowa Utilities Board (IUB) would consider whether there is stranded generation but it need not find that there is stranded generation. MEC does not have excess generation according to its formal filings with its regional reliability council, the Mid-Continent Area Power Pool, for the first few years and, of course, for the remainder of the 25-year period of the study. Its filings of its generation plans and its projected electric loads with the IUB since 1998 are not available to the public, if any such studies exist. The MAPP filing includes the generation plants, including its natural gas-fired units and its share of a coal-fired plant, for which it has made commitments. With those commitments, MEC would still need to acquire additional capacity to meet its native load for retail customers. Although it has announced a wind system investment, that commitment is conditioned on a number of factors, those conditions including new state legislation in Iowa and federal subsidies that are yet to be met, and the accredited generation capacity for a wind system in the summer would be only about 25-30% of its nameplate capacity in any event. According to the most recent MAPP filing available to us, including MEC's planned units excluding wind, MEC stated the following surpluses/deficits: Summer 2004 20,000 kW surplus Summer 2005 280,000 kW deficit Summer 2006 380,000 kW deficit Summer 2007 59,000 kW deficit Summer 2008 176,000 kW deficit Summer 2009 293,000 kW deficit Summer 2010 409,000 kW deficit Summer 201 ~1 521,000 kW deficit For MEC, there is a projected longer-term shortage of generation capacity to meet its projected retail electric loads. Therefore, if the City forms a municipal electric utility requiring 144,000 kW of generation capacity according to our study and that generation is removed from MEC's required generation capacity, MEC will still have a generation capacity deficiency over nearly the entire study period of 25 years. Further, MEC will almost certainly be asked to be a bidder for supplying power to the new municipal electric utility. Even if there were stranded generation of MEC, the new City utility will be offering competitive prices to acquire that capacity. In summary, for study purposes, for MEC to have a valid claim for stranded generation costs it must demonstrate that it will have excess generation if the City load is no longer served by MEC and the value of the excess generation if sold into the market is less than MEC's generation costs included in its retail rates. Neither of these claims is believed to apply for the City study. Is it possible that them have been investments by the utility company since 1998 that would merit stranded costs consideration and, if so, how can that be determined? Answer: MEC is currently making investments in generation, but as mentioned above, these would not be stranded costs because, even with these investments, MEC would still be needing generation capacity to meet its retail load obligations according to its filings with MAPP. For the latter years of the 25-year study period, MEC will clearly be in a position of being short on capacity given current firm commitments. The concept of stranded costs is fundamentally a market issue of whether generation capacity, if any, made available to the market as a result of an event, in this case municipalization, has alternative uses with reasonable compensation to the owner. As is obvious, if Iowa City were to form a municipal electric utility, it would be seeking generation capacity in the market at least for the short term. MidAmerican would be a potential supplier. Therefore, it is difficult to believe that there would both be excess MEC generation and that that capacity would not realize a competitive price in the market from purchasers including Iowa City. We have carefully reviewed the IUB's responsibilities for analysis of stranded costs, if any. The IUB would consider whether there are stranded costs but it has no requirement to find that there are stranded costs. As mentioned above, if MEC is short of generation capacity in the future even with the investments it is making and if it has the opportunity to sell capacity on competitive terms, it is difficult to understand where there may be stranded costs. 4. Would inviting or allowing MEC to be a bidder for supplying power to an Iowa City municipal utility mitigate the value of any stranded costs if such costs are determined to exist? (Latham Report, page 2) Answer: Yes, as mentioned in answer to question # 3, if as a result of Iowa City municipalization MEC chose to sell some electric generation rather than use it for other customer or market purposes, Iowa City would, of course, be a potential buyer of that capacity and that would mitigate any stranded costs if such costs were to exist. 5. The Latham & Associates study computed a depreciated replacement cost value of approximately $11 million as the value or acquisition cost the City would have to pay to MidAmerican. Please reconcile this with the State Department of Revenue value reported in the June 2002 City Financial Repod, page 99, of $47 (actually $44.9 million) million. How can these numbers be so far apart, and which is more likely to be correct? Answer: The study results are much more likely to be correct. The $44.9 million valuation assessment includes both gas and electric investments. According to the Iowa Department of Revenue and Taxes, these valuation assessments include both the valuations for local MEC property and the allocation of MEC's total electric and gas investments subject to property tax assessment. Therefore, this $44.9 million includes an allocated portion of MEC's generation plant, transmission plant and general plant in addition to the local distribution plant. From MEC filings with the IUB for the Iowa MEC combined gas and electric system as a whole, the original cost of local electric distribution plant is about 25% of the total original cost of electric and gas plant as a whole. 25% of the $44.9 million valuation assessment is about $11.2 million, which is close to the estimated buyout cost of $11 million from the study for the purchase of the local electric distribution system for Iowa City. 6. Related to No. 5 above, the report assumes "Replacement Delivery Property Tax" expense of approximately $2.2 (actually $1.99 million) million in the early years. This seems high in relation to the assumed value of $11 million for the property. Please explain. Answer: From Section 437A of the Iowa Code, Iowa electric utility property taxes are allocated to individual communities on a new system with separate Replacement Property Taxes for generation, transmission and distribution investments. From MEC's IUB 2002 SPU-02-23 filing in its recent TRANSLink transmission proposal, of MEC's Iowa electric plant at original cost, 48.9% is for generation, 14.2% is for transmission, and 29.5% is for local distribution. Intangible and General Plant comprise the balance of the plant. Under Section 437A, the generation component is tied to actual electric generation in the state and the rate is $0.0006/kWh of generation. The transmission rate is tied to the miles of transmission lines at various transmission voltages. The balance of the replacement property tax is assigned to the Replacement Delivery Property Tax on a S/kwh basis. For MEC, that rate is $0.00278584/kWh or 4.6 times the rate for generation (even if all of the kWh generation is in Iowa which it is not) while the generation investment is 48.9% of the total original cost and the distribution investment is 29.5% of the original cost, A further factor with impact on Iowa City is, of course, the presence of The University of Iowa. The University uses significant kWh of electric energy and would, presumably, be subject to the Replacement Delivery Property Tax based on kWh used. However, the University, for the preponderance of its usage, takes delivery at transmission voltages and provides its own distribution system. Therefore, the University's usage would increase the amount of the Replacement Delivery Property Tax total amount with very minimal impact on the MEC local delivery system buyout cost. In sum, Section 437A of the Iowa Code shifts a hugely disproportionate share of the Replacement Property Taxes onto the distribution system. As noted, that Replacement Delivery Property Tax is simply a net balance of these property taxes after the generation and transmission taxes are removed from the overall property tax amount. The impact of the University increases the tax without increasing the buyout cost materially. As a result, this Replacement Delivery Property Tax of $1.99 million in the study is high in relation to the assumed value of $11 million but the two values are not directly related with the advent of Section 437A and with the impact of the University. 7. Please respond to the claim raised by Black and Veatch that in the Sheldon case the IUB rejected the use of "original cost depreciated" as a measure of value; and fudher, that observed condition of the system is the relevant measure of value, rather than "book" or "accounting" depreciation. Given this, how accurate is your estimated depreciation valuation in terms of probability or margin of error? Answer: Our review of the Sheldon case suggests that the IUB rejected the original cost depreciated measure of value. The IUB did accept the replacement cost depreciated measure of value and this is one of the two approaches we used. Our analysis used both replacement cost depreciated and original cost depreciated approaches. For the replacement cost component, we identified the types and quantities of lines by voltage, poles, transformers, street lights, sub-stations and other local delivery service facilities. We assessed the age or vintage of those facilities by neighborhood of the City. For each of these types of utility facilities, we obtained current costs of these facilities as if they were installed today using current technology. From this information, we estimated the replacement cost in today's dollars of the system as a whole. In each case, we used an asset class by asset class field review of the electric distribution system in Iowa City to determine the vintages and condition of the facilities throughout the City. These determinations of vintages and associated condition were made from direct observation by trained personnel with very extensive distribution system experience. For each type of line, in each part of the city, the percentage of that type of line at each vintage was estimated by these experienced observers. This is the "observed condition" of the p~ant to be acquired and this provided the basis for depreciating the replacement cost and the original cost, respectively. Through direct observation of the system, we have systematically developed depreciation based on condition, using vintage of plant as the primary reflection of condition for depreciation purposes. We did not use accounting or book depreciation as suggested by Black & Veatch but, rather, used depreciation based on the vintage of the plant. Apparently, Black & Veatch was unaware that these depreciation levels were based on actual field review of the condition of the system. 8. Does the study take into account capital replacement costs over the next 25 years, or is it limited only to repair and maintenance? Answer: Yes. The study does take into account capital replacement costs over the next 25 years and it is not limited to repair and maintenance. In addition to repair and maintenance, the study included 1% % per year of replacement costs for the system for a combination of capital replacement costs and improvements. As a side test on capital replacement costs, MEC's overall Iowa Distribution system has an average remaining life of 25.6 years from its 2002 Form IE-'I filed with the IU8. 9. What is the annual cost of improvements that will likely need to be made, and how much has been assumed in this study? Answer: As noted in answer to # 9, the study included 11/2 % per year of replacement costs for the system for a combination of capital replacement costs and improvements, in addition to the repair and maintenance expenses. Whether this amount is less or more than adequate requires a more detailed study than conducted in this preliminary analysis. 10. It would seem that certain assets of the utility company might actually increase in value over the years, based on replacement costs. Is this a reasonable assumption? Answer: Yes, it is possible that a certain utility asset might actually increase in value over the years just as other assets would decrease in value. As used in our study, replacement costs are estimated to generally increase through time but those increases are offset by corresponding increased depreciation for a given utility asset based on condition. We use this approach to arrive at replacement cost depreciated estimated values, with asset vintages used as reflections of asset condition. 11. In the private sector, when one's source of income is disrupted or eliminated, there usually are damages incurred for loss of profits. Could municipalization of the electrical distribution system in Iowa City incur such a liability? Answer: The IUB is required to consider the value of the electric utility assets purchased and the reintegration costs along with stranded costs, if any, for transmission and generation. With such fair compensation, there is no further compensation for lost net income. As used in the study, the transmission system of MEC would continue to be used without loss of earnings and MEC would not have stranded generation because it is already in a projected deficit position and it could potentially sell capacity to Iowa City in any event. In fact, if MEC were able to defer the need for another electric generation unit, it may actually increase its return on equity by avoiding that new piantl 12. Although this is not addressed in the study, what is the value to the community of the incentives given to local industry by MidAmerican Energy? What, if any, value can be attributed to the utility company for financial participation with local organizations and non-profits? Answer: These issues were not directly addressed either from the standpoint of MEC contributions to the community or from the standpoint of the alternative that would be a municipal utility. We are aware that in its last electric rate case, MEC was able to reduce or remove economic development or market based incentives to business that were provided in the prior electric rate case. Incentives, if any, to the University were presumably already reflected in the study. If there were other incentives provided to major businesses that provided their billing data for the study, those incentives would have been reflected in the study. We have not analyzed the amount of financial participation with local organizations and non- profits provided by MEC. For the study, the relevant question is whether those contributions by MEC would be more than or less than those expected from the formation of a municipal electric utility. With the projected savings from municipalization, over and above the financial incentives already reflected in the study, the City utility could choose to make contributions to local organizations as well. Certainly, the employees and vendors replacing MEC would be expected to make such contributions as well. 13. Recently a MEC official was quoted as saying that MEC has not received any requests for information relating to customer numbers or use data. Please indicate what specific requests have been made and what specific data was requested, or should be requested, from MEC if they are willing to provide such information. Answer: Our client is the Iowa Association of Municipal Utilities (IAMU) on behalf of the cities involved in the studies. We understand that neither the IAMU nor the City asked for specific load and revenue data from MEC. The City did ask larger electric users for their billing data. Indeed, when the City asked the University for load data and we followed that request for data with a follow-up letter, MEC sued both the University and our firm. We were never able to obtain revenue or rate data from MEC on the University even though there was a resolution of that law suit. Based on that lack of cooperation from MEC, our unreimbursed attorney's fees incurred in responding to the MEC law suit, and the lack of time for project completion, we did not independently later ask for the requisite load and revenue/rate data and MEC has never offered these data to us. The only offer of information from MEC was not for load and revenue/rate data. Rather, it was for unsolicited information/arguments regarding their perspective on municipalization and their preferred study assumptions. Those assumptions would effectively make it impossible for any MEC community to even consider municipalization. The information that is relevant for the revenue and usage analyses of this study is the following, subject to review of the data sources, for each rate class and significant sub-class for Iowa City MEC electric customers: Monthly kWh usage for a minimum of twelve months Monthly kW peak demand on an Iowa City coincident peak basis for a minimum of twelve months Monthly revenue including adJustment clauses and other additions to base rates for a minimum of twelve months Load research data by customer class to attribute MEC peak requirements to class monthly kWh usage requirements As part of an overall review and update of the study, the load and revenue data could be further considered. 14. Please address the assumption of frozen rates through 2005, and then a 2% annual increase thereafter, as opposed to MEC's claim that it has agreed to freeze its rate levels through 2010. Answer: In the study, we assumed no rate change through 2005, four years of Iowa City rate reduction to rate equalization, and an offsetting rate increase of 2% per year for the remainder of the study period of 25 years. On a net basis, there was no rate increase assumed for the first 2 years (2004-2005), 1.08% compounded yearly rate increase the next 4 years (2006-2009), and 2% per year thereafter. Through the year 2010, that would mean a compounded yearly rate increase of 1.04%/year increase assumed in the study. MEC has apparently agreed to a revenue freeze through 2010 with conditions. We are reasonably certain that MEC will not increase rates through 2005. However, MEC's later revenue freeze is conditioned on a number of assumptions (a) that new legislation on wind energy be enacted in Iowa allowing utilities to own wind generation, (b) that federal wind credits be at least $0.018/kWh for at least 10 years after commencement of operations, (c) that MEC's rate of return on equity not fall below 10 % in a twelve month period, (d) that MEC's cumulative costs of compliance with environmental requirements to reduce emissions at its coal-fired plants not exceed $325 million, and (e) that MEC be able to secure sufficient transmission, among other conditions. In fact, this is not a rate or revenue freeze. MEC has asked for automatic recovery of its environmental costs of reduced coal-fired plant emissions, while at the same time claiming that it was under a rate freeze, and that request was denied by the IUB last year. Because of the conditions imposed on a revenue freeze, it is not certain that MEC rates for Iowa City will, indeed, be frozen through 2010. Further, MEC has informed us that even though Iowa City rates are among its highest, it does not intend to commence proceedings for rate equalization among its three systems. Even if MEC has no rate increase through 2010, the net present value to the City would remain in excess of $4 million, everything else equal. Because MEC would likely defer collection of certain costs, including coal-fired plant environmental costs, there would be a later payback in rates and, if they were 1% higher than assumed for the 7 years after 2010, the net present value of City municipalization would be about $50 million or near the $62 million estimated in the study. These assumptions further assume that the cost of the alternative power supply purchased for Iowa City would increase in cost at 2% per year for each of the 25 years of the study. If those costs were simply to increase at the same rate MEC argues that its rates would increase, namely no increases through 2010, the net present value would be $80.9 million. While there has been no assumed reduction in purchased power costs from the initial study assumptions, those market prices have fallen in the months since the study was commenced. In sum, it is difficult to take MEC's assertion of revenue freeze through 2010 at face value without considering the conditions for such a "freeze" that is really not a freeze. It is further difficult to look at that short-term freeze in isolation without asking the obvious question regarding the assumed rate of increase of the alternative power supply as well. The study is for a 25-year study period. It is difficult to believe that the MEC rate increases will systematically be less than the alternative power supply particularly when considered over this longer period. Are there ways to effectively increase rates or charges without a formal rate case proceeding? Answer: Yes, there are such ways. The most obvious method is through automatic adjustment mechanisms. In the rate freeze, MEC clearly isolates energy efficiency expenditures, alternate energy production purchases, and alternate energy revolving loan fund payments from the rate or revenue freeze. Please explain the contrast between this 2% figure and the 4% annual increase in costs apparently applied to the City's expenses to operate the utility. Answer: In the study, we assumed electric usage in Iowa City will increase at 3% per year for the 25-year study period. We used 2% per year as a general level of rate increases per unit of electricity for both MEC and for the City utility, with exceptions for MEC short term rate freezes and rate equalization. For the City expenses to operate the utility we assumed that costs would increase 2% per year and that electric growth would be 3%, for a total of 5%. We then assumed that there would be 1% per year efficiencies gained for anet total City cost increase of 4% per year. In the study, we assumed that most of the services for operating the City system would be outsourced in the initial years but that they would eventually be brought inside. They would not be brought inside unless there were savings and the 1% savings is a reflection of this longer term City cost efficiency gain compared to the outsourced services. 15. For every $1 million of additional cost of acquisition over and above that assumed in the study, what percentage must the customer rates increase to offset those additional costs? Answer: An additional $1 million in acquisition costs would reduce the net present value from $61.56 million to $60.34 million. The additional $1 million cost of acquisition would be offset in the model by a one-time first-year increase of 0.16% percent in MEC rates carried through the model. If the MEC buyout cost were to double to a total of $22 million, the net present value of the municipalization would be an estimated $48.3 million. 16. For every 1% increase in the interest rate on the initial bonds over and above the 4% (actually 4.5% and 7.5%) assumed, what percent will the utility rates have to go up in order to pay the additional interest costs? Answer: If the interest rate on investment in City utility facilities increased from 4.5% in the study to 5.5% and the interest rate on investment in the MEC buyout increased from 7.5% to 8.5% over the life of the study, the net present value in the replacement cost depreciated model would fall from $61.6 million to $59.6 million. The additional 1% in interest rates for investment and buyout would be offset in the model by a one-time first-year increase of 0.26% percent in MEC rates carried through the model. 17. Where and to whom do the savings accrue in the community when a municipal electric utility is created? Answer: The sharing of the net savings from a municipal electric utility is decided by the municipal utility governing authority. The savings may be shared with the customers by customer class and with the community. Presumably, the rates paid by customer class would reflect the cost of providing electric service to that customer class to avoid subsidies from one class to another. Sharing with the community may be through in lieu of taxes contributions to the City or to community economic development, park or other City improvement programs. 18. What would or could be the impact on the City's General Fund revenue if a municipal electric utility is created? Answer: As noted in response to question # 17, the municipal utility governing body could choose to provide in lieu of tax payments from the municipal utility savings to the City for its General Fund purposes or it could displace City expenditures for parks, for example, to the extent of the net savings. Indeed, there is not an obvious prohibition against providing even more contributions to the City than the net savings obtained. 19. What potential exists for promoting conservation and efficiency over and above what MEC currently promotes? Answer: Obviously, an individual municipal electric utility can reflect local interests in its sources and uses of electricity. Waverly is a good example of a community that has chosen significantly more focus on conservation, efficiency and alternative energy programs than is available through M£C. The obvious question is whether these programs are effective given the local community interests and methods of evaluation. What effect might this have on long-term savings? Answer: These questions were not addressed in the study. In the study, the amount of long-term electric usage was assumed to be the same whether from MEC or from a municipal electric utility. The impact on savings depends on whether these programs to reduce electric use and increase alternative energy production are effective financially and intangibly as measured by the community. 20. Can you identify the savings that might occur if we continue on in cooperation with other cities that participated in the joint feasibility study? Answer: Whether and when electric utility municipalization is feasible for an individual community depends on a number of factors as presented in the study. Some cities may not benefit from municipalization while others may and the net benefits to those cities may change through time. For whatever reason, no city has proceeded to a municipalization proceeding before the IUB in about 15 years. Whether one is in favor of or against municipalization, there are a number of questions that should be answered and the relevant forum for resolution of those issues is a proceeding before the IUB. Even if the City is not the first to proceed to a filing with the IUB, it will learn considerably from the first proceeding. Another obvious reason to cooperate with other communities is that utilities are expected to act differently toward their customers when there is the threat of competition. Regardless of whether Iowa City feels its rates are too high or the energy efficiency programs are inadequate, its only recourse now is through the IUB in a rate or policy proceeding or through the Iowa legislature. The threat of municipalization will cause MEC to focus more attention on the City and will encourage it to be more responsive to the City's wishes. For example, while MEC could do so, MEC has chosen not to seek a rate reduction for service in Iowa City even though rates in Iowa City are significantly higher than those in Waterloo or Sioux City from the same company with the same transmission and the same generation units. If MEC knows that the City does not have credible threats, it can ignore the continuing impact on the City of these significant rate differences. 21. There is reference to certain regulatory costs of municipalization that might be shared (see page 15 of the Latham report). Please elaborate on those costs that might be shared, and the ultimate impact of such cost sharing on the overall feasibility for Iowa City. Answer: The costs that might be shared are the costs of attorneys, expert witnesses, and other personnel and services that would be involved in a proceeding before the IUB and in subsequent court challenges, if any. This statement reflects discussions, of which we are aware, for communities to share costs particularly when the costs of the initial proceeding is expected to be higher than subsequent proceedings. For reasons, including those expressed in answer to # 20, there are reasons why cities would consider sharing these costs at least for the first few proceedings. Presuming there is a sharing of such costs, the impact of the proceedings on the overall feasibility for Iowa City would not be material considering the 25-year term of the study. 22. If there were a disaster early on after creation of the municipal electric utility, how might the City finance the repairs, equipment replacement costs, etc.? Answer: In the study, it is assumed that the City would have insurance to cover losses for repair and replacement of equipment on this local distribution system. It is difficult to imagine that the whole City system would be lost in such a disaster. Transmission and generation losses, to the extent these continue to be provided by others including MEC, would, of course, be covered by those suppliers. in addition, one of the most fundamental provisions of the Iowa law on electric utilities is the concept of territorial integrity. The City's electric service territory would be well-defined and the municipal utility would be able to set rates to reflect its full costs of service. Bankers know and understand this and are normally quite willing to finance utility facilities where territorial integrity is in place. 23. How many outside vendors of services would be sought for out-sourcing certain aspects of the operation as assumed in the study? Answer: The number of such potential vendors depends on the service to be provided. For power supply, there would likely be ten potential suppliers that would express significant interest but only about 3 of them would be particularly viable with financial strength and the desire to be iowa City's power supplier. For operations and maintenance of the system, there are probably 6 realistic suppliers in the area for all or parts of these services. MEC could be a supplier of such services along with others. Alliant Energy offers wholesale services such as these on its web site. Tree trimming, construction and high voltage line maintenance would attract a number of non-utility and utility suppliers. How many of these would be from the public sector? How many from the private sector? Answer: These vendors would be from both the public and the private sectors. How could the Iowa Association of Municipal Utilities assist us in procuring these contractors? Answer: The IAMU could provide lists of potential vendors as could a number of other utilities, vendors and, of course, consultants 24. Break down what services/functions could be out-sourced relative to both energy acquisition and operational functions. Answer: Power supply solicitation, power supply, dispatch of energy, transmission procurement and other services for the delivery of power to the City points of delivery at sub-stations can all be readily outsourced quite efficiently, particularly as part of a larger purchasing pool. Operational functions such as specialized line trucks and other service equipment can be readily out-sourced as well. · Billing systems and customer information systems can also be outsourced. At the extreme, meter reading could also be out-sourced. Would not the savings be greater if the operations were done with more in-house resources? Answer: Yes, while out-sourcing power supply and transmission procurement may be longer-term, operations would almost certainly be more efficient if provided by in- house resources. Because we believe the savings would be greater from these maintenance and operations moving from out-sourcing where more efficiently provided internally, we have assumed that there would be savings of about 1% per year from these efficiencies. 25. What "new jobs" would be created in the community as a result of the creation of a municipal electric utility? Answer: This question was not addressed in the study. However, as the City utility would move to in-house personnel for local operations, there would be new jobs, particularly for the supporting services that are now handled at MEC headquarter offices. In addition, to the extent that there are net benefits from municipalization, those resources could be used in part for City economic development purposes and the associated new jobs. 26. At what point in the process would the City be able to have any indication that the IUB would approve a municipal utility? Answer: This would come with the IUB's order in a municipalization proceeding. How much money would it require for us to reach that point? Answer: We made estimates of this is the study where we included $100,000, on Schedules 1 and 2, page 1 of 3. As mentioned in the text of the study and in response to question # 21, this presumes a sharing of regulatory costs with other communities. The overall costs would be higher if the City were the first city to proceed and the City chose to pay for the full costs itself. The overall costs could be lower if other cities have gone before it to IUB proceedings and the regulatory process becomes simplified. If a detailed study concludes there is financial feasibility, can the IUB still conclude the project is not in the public interest? Answer: Yes, that is a possibility. As mentioned in answer to question # 20, a proceeding before the IUB will be helpful in determining how the IUB is likely to decide certain issues in Iowa municipalization cases. We believe our analyses for the City has reflected the iUB's decision in its most recent municipalization case but that case was filed 15 years ago. 27. The study provides preliminary analyses for several communities in Iowa. The communities served by MEC represent 14% of its electrical revenue. If all of these communities chose to go to municipal power distribution, how would this be received by the IUB, which reviews rates? Answer: Presumably, the IUB would review each city's case on an individual basis. Based on our study results, not all communities would benefit significantly from municipalization. Not all of the cities would file for municipalization at the same time. In sum, it is very unlikely that all would choose to form municipal utilities and all would do so at the same time. If, however, all MEC cities did form municipal utilities at the same time, the most significant consideration would be the concept of stranded generation costs as discussed in answer to question # 3. Even if all cities did municipalize, if it were in 2010, there would not be stranded generation costs, particularly in the critical summer period, because MEC has a projected generation shortage of at least that amount by 2010. As noted above, MEC would still provide transmission services for municipalized communities and it would get compensated for the reduction of its local distribution system. It would be able to use its generation freed by the municipalization to meet its remaining shortages of generation or to sell that capacity in the market. Because utilities are regulated in Iowa, do you think the Board would raise the rates of those cities still served MEC in order to compensate the company for lost revenue? Answer: An noted above, MEC would be fully compensated for its transmission and for the ownership of the local distribution system and it could use freed generation capacity to meet its projected shortages of generation for its other retail customers. It could also choose to offer power to the municipalized utilities if it were not otherwise short of capacity. Finally, by freeing capacity for remaining retail load, it could avoid significant investments and its return on equity could, indeed, be higher. This is not a question of lost revenue but rather a question of whether MEC would have a resulting rate of return on equity that is commensurate with the risks it assumes and the most probable answer is that this would not result in an increase in rates to remaining retail customers. What influence might this have on the IUB in deciding whether or not municipalization is in the best public interest? Answer: As with a number of other issues, the IUB would likely consider this issue but would, presumably, look at the issue of expected rate of return on equity for MEC and reach the conclusion that we have reached based on the best information currently available about MEC's projected significant shortage of generation capacity. 28. Are there cases where communities have grouped together to create a single municipal electric utility? Answer: We are not aware of multiple cities joining to create a single municipal electric utility. We are aware of cities that have joined together in joint maintenance and operations and joint power supplies to realize the same goals. In fact, we have advised cities that have either taken over the operations of other cities' municipal utilities or have had their operations provided by another utility. Finally, we have advised over 50 Iowa municipal electric utilities regarding pooled electric power supplies and have negotiated joint contracts on their behalf and developed mechanisms for sharing the savings among utilities. In sum, we are not aware of Iowa communities sharing one municipal utility, but we are aware of numerous instances where joint operations and pooled purchasing power are utilized daily. 29. What is the political posture of the current IUB versus that of 10 or 20 years ago, in terms of their willingness to deem the creation of a municipal electric utility to be in the public interest? Answer: We will not speculate on the political posture of the current IUB. We will say that the issues surrounding municipalization are significantly different today than they were 10 or 20 years ago. In particular, 20 years ago a major issue in Iowa was excess electric generation capacity and that is clearly not the case today. There was no open access to the non-discriminatory use of the high voltage transmission system that is available today. There was not a developed market for electric generation that is continuing to evolve today. Because of these changes, regardless of political posture, we believe the IUB will come to different conclusions today based on these significant changes in regulation and in the electric power supply market. 30. Would an Iowa City electric utility serve the entire local service area now designated to MEC or could MEC continue to serve part of the area, either by designation or by mutual agreement with Iowa City? Answer: An Iowa City municipal electric utility could serve all or part of the current MEC electric service territory in Iowa City, noting that Eastern Iowa Light & Power serves part of the City today. Iowa City could do this either by designation or by agreement with MEC. Presumably, the designation would be the service territory the City utility would seek to serve through IUB proceedings. 31. Please comment on timelines for moving ahead, i.e., sequence of events for decision points and range of times to move from one to the next. Answer: We have not analyzed these timeline issues either in the report or otherwise. Other communities are taking their time to carefully review the studies and to consult with their legal advisers on the steps to be taken. Many are continuing dialogue through the IAMU with other communities that have studies. 32. Please clarify the meaning of the second report (Scenario II) as compared to the first (Scenario I). Answer: For the study, we had used the best data available to us regarding power supply, replacement costs and current MEC electric usage and rates/revenue. When we reviewed the study, we recognized that we may have overstated the number of housing units in Iowa City using water utility data, in terms of dwelling units per apartment complex, in particular. The water data had the number of apartment complexes but the units were not necessarily individually metered for water although they are generally individually metered for electric service. The key is the number of units per apartment complex. In Scenario II, we relied, instead, on the 2000 U.S. Census for the number of dwelling units as the starting point for the analysis of residential electric usage in the City. Scenario II reflected a lower level of residential usage along with corresponding reduction in required meters and services and operations and maintenance costs of this lower usage. This resulted in a change in the estimated net present value from $83.7 million for $61.6 Million. 33. Do you know why the Consumer's Council has said that rates should have been going down over the past five years? Answer: I presume this question refers to the Iowa Office of Consumer Advocate (OCA) that participates in rate cases at the IUB. Certain statements from the OCA have suggested that MEC's overall level of rates has been too high based on the OCA's measure of the appropriate rate of return on equity and, consequently, the rates should have been going down. However, the OCA has reached settlements with MEC regarding electric rates that have not resulted in rate reductions. 34. Please comment on the Winter Park, Florida successful municipal power referendum in terms of processes employed and the outcome. Answer: We haven't closely followed that municipal power referendum but are aware that the city voted to proceed with municipalization. 35. On the average, how much do investor-owned utilities spend on campaigns opposing municipalization compared to what is spent by local promoters in support? Answer: We haven't studied that issue either from the standpoint of the utilities or from the standpoint of local promoters. 36. The director of the IAMU has expressed an opinion that the Sheldon case would have been winnable on appeal. Do you agree or disagree with this assessment, and why or why not? Answer: We believe the issue was whether there should have been mitigation for the stranded generation that the IUB found in that case because the generation not used for Sheldon had alternative uses. We haven't really studied that particular issue in that case since the issues are so different today. That was a time of excess generation and today is a time of generation shortages. 37. Please elaborate on how you translate the numbers derived from the study into long- term projections in terms of payback, savings, and overall financial feasibility. Answer: The study presumes that all bonds and interest will be paid from municipal utility revenues, that all power supply costs will be paid, and all other costs of the municipal utility will be paid through the utility operations. After paying for all of the costs of the utility compared to the estimated revenue MEC would otherwise continue to realize from City customers, there would be estimated yearly savings from municipalization in each of the first 25 years of City municipal utility operations. When discounted back to the present at the City's after tax cost of money at an estimated 4.5%, there is an estimated one-time $61.6 million available in present dollars. Those savings could either be returned to the City electric customers as rate reductions compared to the MEC rates or could be used for other City and community purposes. There was no specific payback period analysis. The financial feasibility could be considered as the net present value of the proJect after all costs are reflected, including financing costs. 38. Has Latham & Associates ever been involved in a study which included municipalization of an existing cable network as part of the feasibility assessment of creating a municipal electric utility? Answer: No, we have not been involved in such a study. There may be some joint benefit of municipalization of both at the same time. 39. Does Latham & Associates have any experience in the creation of municipal electric utilities where existing employees were incorporated into the municipal workforce? Did they retain their existing union representation? Answer: No, we have not been involved in employee issues in the creation of municipal electric utilities, Where we have negotiated an electric territory sale, existing employees were incorporated into the utility workforce and retained their existing union representation. We have not addressed this issue in the study. 40. There has been reference to the current situation as a "window of opportunity" for the City to create a municipal electric utility, citing the expiration of the franchise, possible lack of stranded costs, etc. If you agree that this is a limited window of opportunity, for what length of time are the findings of the feasibility study timely and applicable? Answer: We don't agree that this is a limited window of opportunity. Open access to the transmission system is available and maturing. Electric generation capacity is MEC is short for nearly all of the 25-year study period and opportunities for MEC to mitigate potential stranded generation are readily available, including selling electric power to the City. The general findings of the study are timely and applicable for the reasonable future of 2-3 years. Electric usage and load research, for example, do not change significantly from year to year. The study results should be updated intermittently to take into consideration significant changes such as the changes in longer term electric power supply markets. What factors or issues are of a time-sensitive nature that could affect the future feasibility of an Iowa City municipalization project? Answer: Perhaps the most significant issue for municipalization project feasibility is the projected cost of the power supply available to a municipal electric utility. In the few months since this study was commenced, those power supply costs have fallen along with natural gas market prices on the longer-term futures markets. Further, there is significant uncertainty in the upper Midwest transmission system and on MEC's role in that transmission system and that could affect power supply costs for both MEC and the municipal alternative. Because of these potential changes in prices of power supplies and transmission, the study should be refreshed, perhaps, every six months. 41. What are the major risk factors that affect feasibility, and at what point would you consider this project infeasible in terms of payback? Answer: As mentioned in answer to question # 40, perhaps the most significant risk factor is the cost of power supply including the transmission to deliver power to the City. The cost of the power supply has fallen in the intervening months since this study was commenced but there is more uncertainty today regarding MEC's role in the upper Midwest integrated transmission system. Another major risk factor is the price of MEC retail power over the next 25 years. If MEC truly is materially deferring costs in an attempt to avoid a short-term rate increase or if it has significant problems with its nuclear power plant operations or eventual nuclear power plant decommissioning, there could be significantly higher future rate increases from MEC than assumed in the study. From a strictly economic perspective, the project would not be feasible if the net present value were less than zero. 42. Given your experience and expertise in the area of electric distribution systems and their ability to generate revenue, do you believe that the projected savings of 4-5% during the first 13 years of ownership justifies the risks involved with the municipalization of the electric distribution system in Iowa City? Answer: We would work closely with other communities considering municipalization and take advantage of information from them. We would systematically update the municipalization study and run certain what-if scenarios based on the risks that have been noted. We would go beyond the strictly financial feasibility analysis and assess whether there are other non-financial objectives that could or could not be achieved through municipalization. We believe the City is best served through a process of careful review over the next year or so before making a decision yes or no. mg r/assb'mcpl-electric, doc Citizens for Public Power P.O. Box 252 Iowa City, IA 52242 QUESTIONS TO BE SUBMITTED TO LAT[tAM & ASSOCIATES TO BE ANSWERED AT THE PUBLIC SESSION, NOVEMBER 17, 2003 Latham & Associates Answers in Bold Print November 11, 2003 1) MidAmerican Energy now makes up to 14% return on investment. In one year alone (2002) MidAmerican Energy had net earnings of $359 million. In light of this, why is the savings for a municipal electric system projected at 2% initially and 5-7% after 25 years? Answer: The projected net savings per year depend on a number of factors including the cost of the alternative power supply. MidAmerican's return on equity or net earnings by themselves do not suggest whether these net savings are too high or too Iow. MidAmerican reported paying $1,137,576 in taxes on revenues from electricity. On Schedule 2, page 1, line 10 of your report, you estimated Iowa City's Replacement Delivery Properly Taxes at $2,165,141. Explain why you have estimated that Iowa City's Replacement Delivery Property Taxes would be about twice as much as that currently paid to the City by MidAmerican Energy? Answer: We don't have a direct answer to this question. We have checked our Replacement Delivery Property Tax estimate and believe it to be correct. We do know that part of the Replacement Delivery Property Tax would be used for Johnson County and school funds, among others. We have not been able to reconcile MidAmeriean's number if it is indeed a comparable number. 2) You have said that that the rationale for the cost of the buyout of MidAmerican's assets is well-grounded, that it is governed by the Iowa Utilities Board, and that you have allowed for contingency costs. Could you explain your methodology and why you are confident in your calculation? Answer: In the most recent IUB case on electric utility municipalization, the IUB considered alternative measures of utility facility valuation for buyout including Replacement Cost Depreciated (RCD) and Original Cost Depreciated (OCD) approaches. We prepared both of these approaches and presented them in the study. In that case, the IUB decided in favor of the RCD method and we believe that our RCD method reflects the approach approved by the IUB. For the replacement cost component, we had trained utility personnel tour the City and identify the types and quantifies of lines by voltage, poles, transformers, street lights, sub-stations and other local delivery service facilities. These personnel assessed the age or vintage of those facilities by neighborhood of the City. For each of these types of utility facilities, we obtained current costs of these facilities as if they were installed today using current technology. From this information, we estimated the replacement cost in today's dollars of the system as a whole. For the depreciation component of the RCD, we observed the condition of the electric facilities in the City. For each type of equipment or installation by region of the City, we estimated the vintage or age of the installation and noted the overall condition as well. The observers had nearly 70 years of combined distribution system experience in investor-owned utility systems as line personnel and distribution system management. Based on this assessment of distribution system condition, we used the vintages or ages of the installations as reflections of condition. With these ages and using the general depreciation rates used for these installations along with the current replacement costs, we estimated the depreciation component. The replacement costs less this depreciation based on condition provided the RCD estimates that were used in the study. We believe that this RCD approach accurately reflects the concept of RCD that was accepted by the IUB in the Sheldon case. Because we used the IUB method, we are confident in the analysis. As a side sensitivity test, we evaluated the impact of systematically assuming that the installations were 10 years newer than the installations were observed to be. The impact of that sensitivity is that the net present value would be reduced from $61.5 million to $53.1 million with the buyout cost increasing to $17.7 million. However, we have no reason to change our fundamental analysis of the age and condition of the installations in the Iowa City local electric delivery system. 3) Based on your study, we gather you believe there is a conservatively projected financial gain to Iowa City by forming a municipal electric utility of $2-3 million per year on average over a 25-year period. Explain the difference between your projections and those of MidAmerican? Answer: We are not aware of any projections by MEC regarding net savings from the City forming a municipal utility. We are aware of a letter prepared by Black & Veatch solicited by the Iowa Utilities Association to criticize our study. Their two most significant criticisms are related to our use of the RCD method and the potential for stranded costs for generation. As noted above, we used the RCD method accepted by the IUB in the Sheldon case. We actually inspected the condition of the facilities, which Black & Veatch did not. They compared our current evaluation of condition in Sheldon with the results of the 1UB decision in Sheldon from 15 years ago. Our field observation in Sheldon was that there had not been reinvestment in the MEC facilities there to offset the condition depreciation. As a result, the RCD has, indeed, fallen in the fifteen years since the initial studies, contrary to Black & Veatch's assertions. Black & Yeatch has not made a field study to support any of their allegations. They clearly don't understand the study's use of vintage as a reflection of system condition and the use of vintage in a RCD study. This is disappointing. They further criticized the study as having no stranded costs for generation. As noted in our response to the Iowa City City Council's question # 3, there are no stranded generation costs in our study because MEC is projecting significant shortages of generation through nearly all of the 25 years of the study. Black & Yeatch asserts "While there may be no finding by the Board that there is currently excess capacity, the fact remains that upon municipalization, excess capacity will result." (Page 4 of Black & Veatch letter) That is simply not true as demonstrated by MEC's own representations to the Mid-Continent Area Power Pool (MAPP) that there will be significant MEC generation deficits through the study period even after giving credit for new gas-fired and coal- fired generation facilities in their plan through 2011. See also our answer to ICCC question # 3. Finally, on the subject of stranded generation, the IUB will consider stranded generation but, of course, it need not find stranded generation, contrary to Black & Veatch's statements. Again, the superficial, inaccurate and misleading analysis of Black & ¥eatch is very disappointing. Another criticism by Black & Veatch is regarding the number of feet of line per meter or customer assumed in the study. As noted, Scenario II used a smaller number of customers than Scenario I so the feet of line per customer increases in Scenario II. However, the fact remains that the City has a large number of apartment units and the feet of line per meter would necessarily be less than for a less densely populated city. In sum, to be candid, we expected more from Black & Veatch. We find little that is constructive in their statement that was clearly designed to discredit the study. They have obviously not conducted field tours of the communities or the electric facilities on which they make comparative statements. They clearly missed their opportunity to provide valuable information to the City in its evaluation of this significant issue of municipalization. 4) Based on your knowledge, what do you consider to be the short term and long term benefits to Iowa City by forming a municipal electric utility and what do you consider the short term and long term risks? And based on these, if you were a citizen of Iowa City what would you deem to be the best course of action? Answer: Please refer to our answers to City Council questions 40-2. 5) Did you find that all of the communities in the study would benefit by forming a municipal electric utility? Answer: No, we did not find that ali of the communities would benefit from forming a municipal electric utility. The studies were all community-specific with field tours of systems to evaluate condition of instailations. We used actual billing and usage data from larger customers for much of the commercial and industrial electric load and these data clearly affected results. The pricing differences among the MEC systems also had impacts on the estimated net savings. 6) A recent article in the Iowa City Press-Citizen demonstrated the importance of the multiplier effect of expenditures spilling over from the football games and other tourism. As an economist you know the multiplier effect is an important and widely accepted concept. A municipal utility would recycle millions of dollars through local banks and local businesses. That money is mostly flowing out of town at the moment. Can you discuss the importance of this multiplier effect on a community and the impact of millions of dollars remaining in this community with the establishment of a municipal electric utility? Answer: We agree that there would be significant impact from the dollars remaining in the City either in the form of reduced rates or City use of net savings. Further, there would be the impact of more local employees and local purchases rather than having those funds leave the community. We haven't, however, included this impact as part of the study. 7) According to Barron's publications, a Wall Street Journal affiliate, MidAmerican Energy's net income, that's NET income, increased from $230 million in 2001 to $359 million in 2002, an increase of 56% in one year. According to the publication "substantially more," is expected in 2003. If net income in one year alone for MidAmerican Energy is $359 million, does that suggest to you that Iowa City has a potential of savings of even more than the whopping $61.5-$83.6 million you project? Answer: As in answer to question # 1 above, we are not able to reach a conclusion by reviewing MEC's net income. We also note that the Iowa Office of Consumer Advocate (OCA) has apparently reviewed MEC's earnings and has concluded not to push for a rate reduction but rather to seek a settlement with MEC in recent years. 8) Residents in Indianola, Iowa, pay through their municipally-owned utility an average of 5.43 cents/kilowatt hour as compared to MidAmerican's state average of 9 cents/kilowatt hour (2000). Basically MidAmerican charges 65 % more per month in Iowa City than the city utility in Indianola. Yet Indianola Municipal Utility buys all its power from MidAmerican wholesale. Could the City of Iowa City also buy power wholesale from MidAmerican or someone else and reduce retail rates substantially? Wouldn't this mean millions of dollars in savings for consumers and for the City? Answer: In the study, we assumed that the City would have access to power supplies on the market, including having MEC as a potential supplier. The net savings in the study are based on obtaining a power supply as part of a purchasing pool of more than 30 Iowa municipal utilities. 9) You said that your estimated savings of $2.4-3.3 million per year were conservative. If you had used a reasonable rate more in line with the market and still conservative of 3% instead of 2%, how much additional savings could be anticipated, all other factors being the same? Answer: We are sorry but we do not understand the question regarding 3% versus 2%. 10) You apparently did not get all the information you needed for this report from MidAmerican. Is there any specific information you still need from them? Could you provide a list of information you would want to have for a full analysis? Answer: Please refer to the answer to the City Council's question # 13. 11) MidAmerican Energy claims it is freezing RATES through 2010. Here is what the Office of the Consumer Advocate of the Iowa Dept. of Justice said about the MEC agreement: "It should be noted that the 2001 settlement agreement and extension are revenue requirement freezes. They are not rate freezes. The distinction is significant." Would you explain this "significant difference"? Answer: We have not talked with the OCA on this issue and do not understand the significant difference to which they referred. We note that this is neither a rate freeze nor a revenue requirement freeze. Please refer to the answer to the City Council's question # 14. Simply put, among the other reasons for changing rates or revenues, MEC can seek to raise its rates if its return on equity falls below 10 % during any 12-month period. IfMEC chooses to do so, the OCA is precluded from arguing that this increase violates the stipulation for the rate freeze. This is one of the reasons we do not believe this is an enforceable rate or revenue freeze. Submitted by Saul Mekies, and Carol Spaziani (338-6140), Co-Chairs, Citizens for Public Power City of Iowa City MEMORANDUM TO: City Council ~7,,~ ~Z/,~ FROM: A ssi st ant City Manager ~/--'~-,~,v~ DATE: November 17, 2003 RE: Municipal Electric Utility Study Attached for your information is a copy of Latham & Associates' answers to questions put forth by The University of Iowa. Our contact person at the University is P. Ferman Milster, Associate Director of Utilities, who provided the attached. University of Iowa Questions Latham & Associates Answers in Bold Print November 11, 2003 1. Will the University have access to the wholesale electric power market t't~owa C~ forms a municipal utility? Answer: This issue has not been discussed or evaluated in the study. The study assumption is that power supply would be available to the University on a cost of service basis. If so, how will this work? If not, what constraints will we operate under for purchasing electric power? Answer: There are a number of ways the University could have access to the electric power market in conjunction with the City with an agreement for sharing savings and costs of joint operations. There could be joint purchasing of power supply with a sharing arrangement. One party could be the lead purchaser with terms for resale to the other. The University could have a buy-through provision in an agreement with the City to allow the University to seek alternative power supplies if it is not satisfied with the City. 2. What will be the cost implications to the University, such that we maintain the same level of electric service reliability, if Iowa City forms a municipal utility? Answer: The study assumes that transmission is procured with the same level of reliability as that obtained by MEC for its own retail customers. The electric generation power supply is assumed to be procured from suppliers with financial and operational capabilities at levels meeting or exceeding those of MEC. The municipal utility power supply assumptions reflect a recently negotiated power supply with these conditions at the assumed prices. Additional cost implications of such electric service reliability were not considered. 3. Will any physical modifications be required at the University electric substations L and U to accommodate an Iowa City municipal utility? Answer: There may well be costs of metering to accommodate a new power supplier but those costs have been reflected and included in the study. No other physical modifications have been considered in the study. 4. MidAmerican Energy has traditionally negotiated long-term (five-year) electric service agreements with the University. lflowa City forms a municipal utility, will the University need to negotiate purchased electric power agreements more frequently? Answer: That is an issue between the City and the University. There is no obvious study reasons for more frequent electric power agreements. 5. Will the University need to install additional systems, equipment, and/or staffto monitor purchased power prices and agreements if Iowa City forms a municipal utility? Answer: That will depend on the actual agreement between the City and the University. The assumptions in the study are that power supply dispatch and related services along with transmission would be handled by the power supplier and the costs of those are included in the study. 6. How would an Iowa City municipal utility ensure there is no change, or at least no increase, in financial risk to the University resulting from uncertainty of future purchased power prices? Answer: That is an issue between the City and the University and was not included in the study. 7. How will electric market deregulation affect the University if Iowa City forms a municipal utility? Answer: That issue was not considered in the study except that the study assumptions are that the University would obtain service on a cost of service basis. As noted in answer to question # 1, there are a number of ways that the City and University could agree on the University's access to the power market. C,ty Counc,lmember. 'rowa C,ty Hor~.d~lre~: ~$0 E. C-o~r~or, #], ~o~ CIO,, ~o~ To: City Council From: Stevcn Kanner Date: ]1/]2/03 Re: Municipal Electric Efforts Nationwide Municipal electric efforts are happening nationwide. The October issue of the Iowa Association of Municipal Utilities (IAMU) has reprinted a story by the editor of the American Public Power Association (APPA) that addresses this issue. The article is attached. Iowa City and its fellow study participants in Iowa are on the cutting edge of fighting for local citizen's rights and for control of local economic development: by exploring the option of starting a municipally owned electric distribution system. The fight is an ag~-old battle (economic justice vs. private greed) as private big corporate interests continue their 100-year-old assault on municipal ownership and benefits. The latest attempt comes in 2003 at the hands of MidAmerican Energy. They are working to repeal the Public Utility Holding Company Act. In 1934, MidAmerican's predecessor, Iowa City Light and Power, worked to derail the citizens' choice after voters in Iowa City decided to form a muny electric system. Let us not let MidAmerican's corporate dollars now destroy our chance to have a fair debate on the merits of a municipal electric distribution system 70 years later. The potential for economic development - $65 million over 25 years, helping our city coffers and our residents alike - is great. We cannot let this potential reward for all of Iowa City be derailed by corporate fearmongering and conniving. APPA wASHINGTON REPORT: "CONSOLIDATION OR MUNICIPALIZATION" ~ By Robert Varela, Editor, APPA "Public Power Weekly~ Congress is poised (if it hasn't already done so by The 19 Iowa cities similarly had the example of the time you read this) to repeal the Public Utility almost 150 other cities and towns In their state, nat Holding Company Act and thereby prompt a new to mention their ail-publle power neighbor, Ne- wave of mergers within the electric utility industry, A braska, The 19 iowa cities 'were motivated by the leading advocate of PUHCA repeal, MidAmerican positive benefits public power could provide Energy CEO David Sokol, recently predicted that to their communities," APPA President and CEO within 30 years the number of dishibution utilities Alan Richardson noted. would be reduced by at least 50%. (Sokol counts this as a good thing,) Any way you cut It, that Sokol and the citizens of Winter Public power utilities can would include some public power utilities. Park, et al, offer dramatically take the future into different v~ons of the future for their own hands. That But Winter Park, Ra,, Is poised to buy out Progress public power. Waiting to see what sounds dramatic, and Energy Rorida's facilities In the city and form a the future will bring is an invitation it won't necessarily municipal electric utility, Some other towns in Florida to share in Sokol's future. Public be easy -- but it are watching with interest, in Iowa, 19 towns power utilities can take the future recently went together on a joint feasiblilty study, into their own hands. That sounds ~' comes down to doing a good job of leading Some of the cities would enjoy substantial savings, dramatic, and it won't necessarily be easy---but it a public power utility. the study found, and even the smallest would save comes down to doing a good job of leading a some money or break even financially by forming a public power utility. municipal utility. A road map exists. 'ti's Your Future--Lead ti,' a Farther West, Great Falls, Monf,, has scheduled a report produced by APPA's fask force on public rate on creating a municipal electdc utility. power in the 21.Cenfuty, is organized around ten Podiond, Ore,, has been negotiating with Enron to recommendations to guide public power leaders In purchase Portland General Electric (although if taking responsibility for fheir future, The ten recom- now appears Enron will spin PGE off in a bid to mendations are: provide more money to its creditors), in fhe South- 1, Provide superior customer service. west, the Southern Nevada Water Authority has 2. Deliver value through power supply manage- made a serious bid fo buy out Nevada Power Co, ment. and p~ovide electric service to Clark County, which 3. Focus on distribution Performance and opporfu- includes Las Vegas. In California, a number of cities, nih/. including DavIs and Irvine, are looking at the public 4. Pul communities first. power option. 5, Optimize community infrastructure. 6. Lead in environmental stewardship. Perhobs nat a coincidence, the latest issue of the 7, Build consensus through democratic governance. EcrLsen Elechtc iostitufe's Electdc Perspectives 8. Promote human resource excellence. features an article on the 'Ten Tools For Defeating 9. Engage policymakers through legislative advo- Government Takeovers,* cacy. These cities' reasons for considering municipalization 10. Invest in your technology future. vary. In both California and Montana, deregulation Following those recommendations won't necessarily failed dramatically, leaving bankrupt utilities and keep Sakol, et al, at bay, but they represent a high rates. Nevada also fell th~ effects, and pretty good insurance poilcy~nd, more impor- Nevada Power has flirted with bankruptcy, tantly, a way to benefit your community. However, Florida and Iowa have not had firsthand P.S. I can't resist mentioning EEl's 10 teals, I assumed experience with failed deregulation schemeS, With their list would look at least a little like the 21~ an expiring franchise agreement that included Century task force recommendations, Perhaps specific buyout provisions, Winter Park suffered from something like: ' 1, Provide reliable service at an terrible, pers~ent reliability problems. Things didn't honest price. 2, Be as responsive to the community improve after North Carolina-based Progress Energy as your fiducidry duty to your stockholders permits. bought Florida Power Corp, In addition, Rorida ,.." Talk about naive. Number one on EEl's list is Power/Progress Energy Florida. in three years of 'Communicate o clear corporate position"--that negotiations, 'refused to agree to any reliability you're not Interested in selling and will fight any standards in a new contract with Winter Park, buyout attempt. NO. 4: 'Use experienced external despite our City's record of the worst reliability in their bsue managers." I thought I saw some light at No, 8: territory,' the Winter Park City Commission said. Not 'Deal with each community individually." Wrong. a good idea when Winter Park is located next to The arllcle explained that 'a company with an Orlando, whose munioipal utility goes by the motto across-the-board communications program can and ethic, ~The Reliable One! # Winter Park citizens compound its problems by appeaflng to Ignore voted 69%-31% for the public power option, local circumstances or conditions," CITY OF IOWA CITY www.icgov.org OFFICE OF THE November 5, 2003 CITY MANAGER Stephen J. Atkins Karen Kubby City Manager Conner Center steve-atkins~iowa-city.org 728 2ndAvenue Dale E. Helling Iowa City, IA 52245 Assistant City Manager dale-helling~iowa-city.org Dear Karen: This letter is to inform you of an amended budget process for FY05 Community Event and Program Funding requests. Because of the budget situation created by the State aid reductions, the Council determined Community Event and Program Funding would be reduced an additional 10% for FY05. Event organizers must submit the enclosed Event/Program Confirmation and Funding Request form by December I to confirm their request, By submitting this form, you are indicating the scale of your event is at least as large as that held in 2004. Also, if applicable, please indicate if your event is to be downsized or the event will no longer take place. Funding tentatively approved for FY05 is as follows: Friday Night Concert (DTA) $ 5,184 Holiday Lighting (DTA) $ 2,025 Saturday Just Jazz (DTA) $ 0 Iowa Arts Festival $ 5,427 Fireworks (Jaycees) $ 4,455 Iowa City Jazz Festival $ 6,075 ADA Celebration (EvertConner) $ 972 JC Historical Society $ 3,750 Uptown Bill's Labor Day Fair $ 786 Contingency $ 900 Total $29,574 If you have any questions, please feel free to contact Lisa of my office. Sincerely yours, City Manager cc. City Council 410 E. Washington Street Iowa City, IA 52240 Phone: (319) 356-5010 Fax: (319)356-5009 FY2005 Event/Program Confirmation and Funding Request Event/Program Name: ADA Celebration Event/Program Date: Summer 2004 Amount approved for 2005: $972 The event/program be of the same scale or greater than last year. The event/program will be reduced. Therefore, we are requesting less funding in the amount of $ [] The event/program will not take place (no funding will be allocated). Signature of Event Organizer Date This form must be received by the City Manager's Office no later than 5:00 pm, December 1, 2003. Submit to: City Manager City Hall 410 E Washington Street Iowa City, Iowa 52240 Call 356-5010 if questions. Karen Kubby Executive Director Executive Director Conner Center DTA Iowa Arts Festival 728 2® Avenue PO Box 64 PO Box 3128 Iowa City, IA 52245 Iowa City, IA 52244 Iowa City, IA 52244 Steve Grismore Margaret Wieting Elisabeth Beasley Iowa City Jazz Festival JC Historical Society Extend the Dream Foundation PO Box 10054 PO Box 5081 401 S Gilbert Street Iowa City, IA 52244 Coralville, IA 52241 Iowa City IA 52240 President Iowa City/Coralville Jaycees PO Box 2358 Iowa City, IA 52244 VIA CERTIFIED MAIL November 10, 2003 Mr. ,lames Knapp 528 Rundell Street Iowa City, IA 52240 RE: Response to Complaint Filed with the U,$. Department of Housing and Urban Development (HUD) - 64-1a Property Dear Mr. Knapp: The HUD office in Omaha has forwarded your complaint regarding the Community Development Block Grant (CDBG) Program to our office requesting that we respond directly to you. Please see Exhibit A. This information, as forwarded to us by HUD, included an e-mail message you sent to Ns. Placie Houston on October 22, 2003 and the two attachments. Tn reviewing the materials you sent to HUD~ it appears the CDBG question or complaint focuses on the City's intent to sell parcel 64-1a to the Moen Group for development of the Plaza Towers project. The basis for your complaint or objection centers on the sale price for the 64-1a parcel, which is the last of the "urban renewal ground". As you note, proceeds from the sale of 64-1a will be deposited into the City's CDBG account as program income. That is correct. CDBG program income will be governed by the applicable regulations of Title 24 Code of Federal Regulations Part 570. This has been acknowledged by the City. We are planning on including i~he proceeds from the sale of the 64-1a property in the upcoming FY05 CDBG\HOPIE funding cycle. First, it is important to note that the City worked with HUD to determine any requirements or restrictions that would apply to the property. In an e-mail from Greg Bevirt (HUD Omaha office), dated February 15, 2001, he states that the City is "governed by state and local law" as it related to the disposition of the 64-1a property. Mr. Bevirt also cited a memorandum (see Exhibit B), dated Play 18, 1984, from Stephen 3. Bollinger, Assistant Secretary for Community Planning and Development, which states that Section 126(b)(21 and Section 126(b)(31 of the Housing and Urban-Rural Recovery Act of 1983 repealed the use restrictions for the Neighborhood Facilities Program authorized by Title VII of the Housing and Urban Development Act of 1965 and the Open Space Program authorized by Title VII of the Housing Act of 1961, respectively. This memorandum goes on to state that "The grantee may convert the .land or facility to any purpose it deems appropriate to its needs." 410 EAST WASHINGTON STREET · IOWA CITY, IOWA 52240-1826 · (3191 356-5000 · FAX (3191 356-5009 Second, in a letter from HUD, dated April 30, 2002 (see Exhibit C), Mr. Bevirt responds to an inquiry by Council member Kanner regarding the sale of 64-:La. Again, Hr. Bevirt refers to the Hay 18, 1984 memorandum outlined above saying that the restrictions on urban renewal land have been repealed. He notes that "...Iowa City may convert this land to any purpose it deems appropriate to its needs." In summation of these two documents, the City is under no obligation to sell the property for any particular use or according to any HUD oversight. Rather, HUD notes that state and local laws apply to the disposition. Accordingly, state law regarding the sale of urban renewal property dictated the process for the disposition of the 64-1a parcel. The long-term goal of the 64 l-a project was to achieve the purpose of urban renewal and build the community's tax base. This will generate revenue to continue existing services to our citizens as wetl as human service programs (the City does use general fund monies as well as CDBG for aid to local human service agencies). In addition, the RFP asked for "...a project that complements and enhances the existing uses in the downtown and adds vitaiib/to an already vibrant place..." and is "...a mixed-use development." The City chose to market the 64-1a property as an opportunity to create a significant presence in downtown in keeping with the spirit of urban renewal As such, a Request for Proposals (RFP) was issued (see Exhibit D) as an open invitation to bid. A decision was made through a public process using a Request For Proposal (RFP), presentations to the public of all responses with public input encouraged prior to recommendation to Council, and public discussions of selection at the Council level. Please note that the City received four responses to the RFP, not two as referenced in your communication with HUD. Of these, one offered no firm purchase price but would negotiate; one offered $250,000; one offered $500,000 and would negotiate; and one offered $1,775,000. These responses to the RFP, including the proposed purchase price for the land, were reviewed and evaluated with the final selection of a preferred developer to be determined by the City Council. Following opportunities for public discussion, a majority of the City Council selected the Moen Group as the preferred developer. The project you favored (submitted by Jim Clark) created more revenue in the short term through a higher purchase price, but less tax revenue in the long term and did not meet the goals of the RFP since it was essentially multi-family student housing built over a parking lot. The estimated value of construction (and therefore the relative amount of property taxes to be paid) of the project proposed by Mr. Clark, and advocated by you, was about one-half the value of the project selected, or any of the others submitted. As a result of Council's decision, a development agreement was negotiated and executed between the City and the Hoen Group. This development agreement stipulates performance measures for the Plaza Towers project and establishes the sale price of the 64-1a parcel as $250,000. in addition to the public process of the RFP, the 2 development agreement between the City and the Moen Group was approved through a public process. When the City was in the process of negotiating the development agreement with the Moen Group, two appraisals for the 64-1a property were completed by certified appraisers showing the value of the parcel between $0 (actually, a negative value was assigned) and $:L7 million, the difference being the requirements placed on the development of the parcel. These appraisals are available to the public and have been made available to you for review and reproduction. Your e-mail to HUD also contains a reference to the Peninsula project and use of CDBG funding. CDBG funds have not been allocated to Terry Stamper, the developer of the Peninsula, for the Peninsula project. The CDBG funding you could be referring to was provided to the Greater Iowa City Housing Fellowship (GICHF), a local nonprofit community housing development organization. GICHF has chosen to develop 16 affordable housing units in the Peninsula neighborhood. If you have any additional questions about the 64-1a (Plaza Towers) project please contact Karin Franklin, Director of Planning and Community Development at 356-5230. CDBG questions may be directed to Steven Nasby, Community and Economic Development Coordinator, at 356-5248. Sincerely, City Manager Enclosures Cc: U.S, Department of Housing and Urban Development, Omaha Office (Region VII) City Council Eleanor Dilkes, City Attorney Karin Franklin, Director of Planning and Community Development Steven Nasby, Community and Economic Development Coordinator EXHIBTT A U.S. Department of Houelng and Urban Development Nebraske State Office Executive Tower Centre 10909 Mill Valley Road Omaha, Nebraska 68154-3955 October 23, 2003 Mr.civicStephencenter J' Atkins, City Manager 410 East Washington Iowa City, lA 52240 Dear Mr. Atkins: We have received the enclosed complaint regarding the city-administered Community Development Block Grant (CDBG) Program. Because you have been provided with the responsibility for the administration of the CDBG Program, please respond to him within 15 days of receipt of this letter. Please provide a copy of your response to this office. Should you have any questions, please contact Ms. Barbara Koehn, Community Planning and Development Representative, at 402-492-3123.PatriciaSi Program Manager Community Planning and Development Division Enclosure cc: Mr. Steve Nasby Pat M. McCauley To: Barbara L Koehn/CPD/OMA/HUD@HUD CC: PM Subject: Fw: HDBG Funds ..... Forwarded by Pat M McCauley/CPD/OMA/HUD on 10/23/2003 02:25 PM --- "Jim Knapp" To: <Pat_M._McCauley@hud.gov> <jsknapp@mchsi.com cc: <William H. McNarney@hud.gov> · Subject: Fw: HDBG Funds 10/22/2003 04:47 PM Hi. Sorry 1 sent this to the wrong addressee but the copy should clarify my position. Tha. nk you for your time and attention. I enclosed my address to the city council, it was not received well. Such is life. Also my Christmas Card I will be sending my friend and family this year. Thank You. Jim Knapp 319 354 2443 ..... Original Message ..... REC From: Jim Knapp To: macie 1. houston~hud.gov Sent: Wednesday, October 22, 2003 3:58 PM OCT ~ Subject: HDBG Funds Dear Ms. Houston, M: 3G t'g['¥~i I am emailing you because I believe that the City of iowa City is not acting responsibly with the assets it owns and thereby denying the causes that provide services to the less fodunate people living here. We are a generous community to some extent but we in this instance I feel are neglebting our duties to our less fortunate citizens. We have a final parcel urban renewal ground left over from the Urban Renewal that took place in the 1970's. This land is located south of the Iowa City Library and east of the Marriot Hotel. For several years it has been used as a parking lot. Recently it was offered to developers and they came in with proposals for the use. The developer that whose proposal was recommended by the city staff proposed a 14 story hotel which would include a grocery store and a convention center. In order to have enough funding the property is to be sold to this gentleman's group for $250,000 which would then be turned over to CBDG funding. The property if appraised at the going rate in Iowa City would approach $1,700,000 and by using an appraisal that projected income the value was reduced to $250,000 and is to be sold to this group if he can obtain the financing for his building. He has failed to do so for over 3 months and was just allowed an additional 30 or 45 days to obtain that financing. Because the Other developers did not ask for this advantage they were willing to pay the appraised value of $1,700,000. Or at least pay a sum close to that amount. This if it is allowed to happen will in effect deprive the beneficiaries of CDBG funds, which understand are targeted for Iow income benefits, of $1,450,000. Last year in Iowa City the requests were for $2,724,414 and the grants were $1,612,448. This was about $1,112,000 less than requested. Two properties in Iowa City that were in the original Urban Renewal project failed, the first was the hotel and now the Old Capitol Shopping Mall. I do not believe the powers that be have done their demographics and that I am not convinced that the proposed hotel will not also fail. Also the city funded a piece of ground called the Peninsula for development by one developer and even it was given CDBG funding it is failing and I don't think it will recover. The only hope to stop this latest boondoggle is to make sure that the Moen Group does not get its' financing and thereby defaults on the deadline which has already been extended. To me the whole situation smacks of something illegal or at least immoral. I know we can not legislate morality. I also know that if all this information comes to light to the community that there may be some recalls and maybe that is what needs to happen. It appears to me that the city council is working for the city staff and that the constituency are not being fairly represented. If they are not being represented then they are being taxed without representation. This could start a taxpayer revolt, which I would be happy to lead. The action I am going to try to encourage is for the beneficiaries of the CDBG money to contact their elected officials and also all the potential capitol venturers and banking institutions to stop the financing of the project. This way we will still have the land to sell at it's real value and then the people that are being slighted will have a chance. We have 372 homeless children in schools here and we need to help them. We as a community are not any better that the condition of the lowest economic group we allow to exist when we have the capability to help them. In the name of all the people that will be hurt by this travesty I am looking to you for some assistance. Thank you, Jim Knapp 528 Rundell Street Iowa City, IA 52240 H 319 354 2443 C 319 325 2443 Dear Councilors.do~ Tis The Season To Be Jolly.d, Dear Councilors in case you don't remember me my name is Jim Knapp and I live at 528 Rundell St. Right here in River City. I suspect that tonight when the gavel falls you will rubberstamp the money collbcted from taxpayers and make Mr. Moan a gift of the $1.7 million. Since I am a taxpayer and voted for some of you I think I should have the right to ask some questions and the audience should be able to hear the answers. I have prepared both the questions and answers since I feel you are probably tired from lack of sleep. Having a guilty conscience does that to people. So lets proceed if you will. Question. Why are you giving all that extra money to Mr. Moan? Answer. So Mr. Moan can build a 14-story edifice to greed and malfeasance. Question. Didn't you have another candidate for this project? Answer. Yes, Mr. Clark wanted to build a building too. Question. Did Mr. Clark ask for the $1.7 million? Answer. No, he did not he was going to finance it on his own abilities. Question. So Mr. Clark did not want the special treatment, but Mr. Moan did? Answer. Yes. Question. So if I asked for $1.7 million would you give it to me? Answer. No. Question. Why not, don't you like me? Answer. This has nothing to do with you Mr. Knapp. Mr. Moen has a plan. Question. Is that the grocery store an, d coffee shop? Answer. Yes that's part of it, what the city staff recommended.. Question. Where do you suppose Mr. Moen came up with that grocery store idea? Answer. He is a smart man. You figure it out. Question. Did he have any help from City Staff? Answer. Well yes, they recommended it. Question. Would that be, Karen Franklin and Mr. Atkins? Answer. Yes, but where is this leading? Question. Do you always answer questions with questions? Actually it will become clear in a minute. Answer. I hope so, we are very busy spending the taxpayers' money and this is not helping. Response. Sorry, I will try to hurry after all if it took an hour that would be about $850,000. Question. Where do you think all these smart people got the idea for the grocery market? Answer. Does it really matter? If you must know Mr. Moen is a lawyer and very smart. Response. Another question for an answer, yes it does matter. I called Mr. Moen several years ago and suggested it to him. Then I talked with Karen Franklin and told her about the nice markets in Novi, Michigan. I was looking for work and hoped he would consider me to rebuild his place on Clinton St. He said that was a good Idea but he was going with the restaurant instead. So this is entirely my fault. I apologize to Jim Clark and to New Pioneer Coop. Do you think Jim Clark could have built the same type of building? Answer. Yes, we are well aware of Mr. Clark's capabilities. 3 Response. You should be, his taxes pay your salaries and probably the entire city budget. And I might add that he does it with out abatements or CBDG money. So why did you think it would be prudent to give Mr. Moen the advantage? Don't you like Mr. Clark? Answer. Of course we like Mr. Clark. Question. Then do you like Mr. Moen better?. Or is it just that Staff told you what to do? Answer. That had something to do with it. Question. What kind of a staff would tell you to spend $1.7million just to get a grocery store and a coffee house? When Mr. Clark would have done it with his money. Answer, Do we have to answer that? Response. There are those questions they just keep popping up. No, you don't have to answer that to me. But you might tell the your constituents before they run out and get a rope. Mr. Moen Move to Strike. Mr. Knapp Granted and I am sorry, in summing up let me see if I have this right. You like Mr. Moen better than Mr. Clark because he is 4 smarter than Mr. Clark. Is that about right? And you can measure that in dollars and cents? About $1.7 million dollars and cents, right? Wow! If I were Jim I would hire a bodyguard. That is more than the bounty on Saddam Hussein. So the only thing left to consider is what about New Pioneer Coop? They sell organic food and they don't buy food from 3rd wodd nations that abuse child labor. And they hire very nice people and cater to some of the better cooks and chefs in Iowa City. Can you say that the store Mr. Moen will build honor that same commitment? Council. There are no guarantees in life. Mr. Knapp True. We may have another flood and what if the New Pioneer had · to rebuild? Would you let them being in the flood plain. Council. We have bent the rules on some special occasions. Mr. Knapp. Can Mr. Moen guarantee that he can come up with the rest of the money? Council Shrug. Mr. Knapp When? Council. Shrug Mr. Knapp Tomorrow? How many days is he behind now? Were you fair to Mr. Clark? Can you sleep at night? You? You? Any of you? With Mr. Moen? Council. Don't be ridiculous. That is rude. Mr. Knapp. Sorry, again, I just can't figure why you like Mr. Moen more than Mr. Clark or why you like Mr. Moen more than your constituency. Did he elect you? What. He didn't elect you? Who did? Council. The voters did you dolt. Mr. Knapp. So does that mean myself and every one else that votes and pays taxes elected you? I'm insulted and I hope the rest of the taxpayers are too. You used their money and mine and especially Mr. Clarks' to screw him out of the project. By the way did you know that Jim and Loretta pay about $1,000,000 in property taxes a year? And all the rest of us out of our tax dollars, beside that you are failing to represent the majority. 6 I think you. should all resign. I realize this is an open and accepting society but I resent being screwed. Do you know that if I wanted a job with the city I would not have my application accepted if it were one day late? How late is Mr. Moen? He is over a month late, my goodness that late. Some people would really be sweating that now. Good thing Emma Goldman is just down the street. End of Q & A s The Pioneer May Fail Due to Your Actions. To build a coffee house and grocery store? Do you know what you are doing? More competition for the Pioneer Food Co-op which means a new grocery store and coffee house that buys food and coffee beans from Third Wodd Nations that use child labor for harvesting their crops. How will you sleep after you vote to give our money away when it is so badly needed in Iowa City to help our homeless families? Probably very well because you see only the skyline and never look down into the dumpsters or under the bridges where the poor and downtrodden people have to live. God will not be smiling tonight when the final gavel falls on the heads of the homeless children. It is such a shame that the rich get by while the poor just cry and die. Do you ever wonder why? Ask Steve and Karen. Better yet ask God for guidance. If you have the power to stop this nonsense then say no to Mr. Moen. It may be your ticket to one more term. The taxpaying voters will be reading Wednesdays Press Citizen and shaking their heads in shame. What do your constituents want you to do? Your sworn duty and that is not to take orders from staff or some well-connected citizens. I have often thought that politicians get the idea that they are eagles. I think this comes from being looked up to by their constituents. Actually when they turn their backs on their constituents they are more like buzzards. And when their constituents look up to them for help they get a face full of droppings. Those droppings are the digested remains of the carrion they feed upon. The carrion they feed upon are the dead and dying constituents that starve and freeze while being homeless so people like Mr. Moen can have another nice 14-story edifice to locate his market. That is the market that will probably put the Pioneer Food Coop out of business. Why? Lower costs because that market will buy cheaper food products harvested by enslaved children in South America, India, and Southeast Asia. Also because it does not have $1,700,000 given to it plus property tax abatements. How rich do you want to make Mr. Moen? How much is enough? What philanthropic endeavors does he become involved in? Where are your hearts and minds? Is it a requisite of this high office to be oblivious to the Iow- income families and the homeless? How many of you really need your few thousand dollars income or is it the power to effect the lives of so many people? This is the city that first turned down a sewer system, gave special consideration to the Peninsula developer is now about to slap the highest taxpayer in the city in the face and give all that money to a lawyer and his contractor. Shame on you, when you go to bed tonight think about the kids under the bridges, the kids lying in the alleys, the way you made them feel and then ask your God for forgiveness. The only problem your god is a small "g" god that will stand 160 feet in the air. So you can have a place to roost while you watch the impoverished and diseased children climbing in and out of dumpsters, picking out cans and bottles and looking for a few crumbs to eat. Then when they weaken and die you can swoop down on them and fatten yourselves up. You won't have dreams they will be nightmares. Martin Luther King Jr. had a dream, Christopher Columbus had a dream, Abraham Lincoln had a dream, Jimmy Carter had a dream. And I will have a dream. My dream is watching God dump the coal on your heads and watching you drag the chains eternally. So before it is to late admit that you have made a mistake and vote no. It is the right thing to do. When all the hugging and handshaking is over and the thrill wears off just think how nice you will feel. To paraphrase the song "What the World Needs Now." "What the world needs now Is love sweet love. We don't need another tower. We have towers enough to climb. In conclusion I want you to understand I hold no malice I realize your commitment and all I can say is that if you go through with this it should be to Independence. 9 While America Slumbers All Snug In Their Beds With Visions of Sugar Plumbs Dancing In Their Heads. In The Third World Children With Empty Stomachs Suck Then Thumbs. They Have Little Food, Sleep and Few Meds. The Season To Be Jolly? A Slave? Not likely I was born Lee. I won't be a slave, You see, I have a choice, Born in the land of the brave My birthrights give me a voice. Slave master? Me? No, never I say. Do you like my new necklace and shoes? I bought them on sale just the other day. There is nothing like shopping to cure the blues. Yes Dear, Oh my, of course I'd like some more tea And if you don't mind please pass me the paper too. Of course not the front section, it's so depressing for me, The ads will do. Christmas Is just a Ways off. I must start while the sales are on. ~im Knapp '" " EXHt'BI'T B Steven Nasb¥ From: Greg A. Bevirt [Greg_A._Bevirt@HUD.GOV] Sent: Thursday, February 15, 2001 12:21 PM To: Steven Nasby Subject: Re: Sale of Urban Renewal Parcel Steve: See my fax. You're governed by state and local law, Gre9 Steven Nasby <Steven-Nasby~iowa-city.org> on 02/15/2001 11:56:47 AM To: Greg A. Bevirt/CPD/OMA/HUD@HUD cc: Subject: Sale of Urban Renewal Parcel As you know we are working on a plan to sell our last urban renewal parcel (64-1a) , Do you if there are any special conditions or regs that we need to follow in order to sell the property? Thanks. City of Iowa City Steven Nasby, Community Development Coordinator 410 East Washington Street Iowa City, IA 52240 319-356-5248 319-356-5009 (fax) FF~-t~-O) THU t2:33 PM H,U,D,P,H, & O,P,D, FAX NO, 4024923163 .. by MEMO~NDUM FOR: All Regional Adm(ntstrators -~~ ~All Re~ional Otrectors for GPO All O~tce ~nagers All CPO O~vtsion Oirectors "' Ste hen O. Iolllnger, Assistant SecreCy SUSPECT: El~mfna:ton of ~O's Role ~ Respons~b~l~Ues.~tth Respect :o Changes ~n Lan~ Use of Facf31ttes la the'Open Space Program an~ the Netgh~rhood Fac{lt:~es Program 5ectton lZ6(b).(Z) and Section lg6(~)(3) of the Housing and Urban- Rural Recovery Act of 1983 repeale4 the use restrictions for the Neighborhood Facilities Program' tuthortzed by Title V%I of the Housing and Urban Development Act of 1965 ani the Open ~ce Program authorized by Title VII of, ~he Housing Act Ef lO61, res~ctlvely. It has b~ datelined ~t the effect of the repealers for these progea~ ~s ~ ~emove all'Federal eestricttons on the use of-.epen space In view of the foregoing it is not necessary for the grantee or public body to obtain HUO's co~urrence in conversionS, etc. You may wish to a~visa grantees accordingly. The ttantee:~y eonver't ~ land o~' facility to any purpose tt: de~s apprepr~a:e to its needs. ~ HUD~OMES_..~, ~ '~o, ~ / ~ nHUD EXHIBIT C U.S. Department of Housing and Urban Development Nebraska State Office 10909 Mill Valley Road Omaha, Nebraska 68154-3955 April30,2002 Mr. Steven Kanner City Councilmember 6 30 S. Governor, #1 Iowa City, lA 52240 RE: Parcel 64-1A Dear Mr. Kanner: Your letter of April 18, 2002, described Iowa City's negotiations to sell their last urban renewal parcel (64-1A). You stated that it is your understanding that the City is required to sell 64-IA for fair market value and use the proceeds for CDBG funding. Specifically, you requested the federal requirements for establishing "fair market value?" According to a May 18, 1984 memorandum, from Stephen J. Bollinger, Assistant Secretary for Community Planning and Development, U.S. Department of Housing and Urban Development (HUD), "Section 126Co)(2) and Section 126Co)(3) of the Housing and Urban Rural Recovery Act of 1983 repealed the use restrictions for the Neighborhood Facilities Program authorized by Title VII of the Housing and Urban Development Action of 1965 and the Open Space Program authorized by Title VII of the Housing Act of 1961, respectively." Consequently, Iowa City may convert this land to any purpose it deems appropriate to its needs. The Community Development Block Grant (CDBG) program does not define market value. HUD uses the Uniform Standards of Professional Appraisal Practice (USPAP) definition of market value, which is "the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus." USPAP is the generally accepted and recognized standard of appraisal practice in the United States and is used by state and federal regulatory agencies. Forming an opinion of market value is the purpose of many real property appraisal assignments, particularly when the client's intended use includes more than one intended user. The conditions included in market value definitions establish market perspectives for development of the opinion. These conditions may vary from definition to definition but generally fall into three categories: 1. the relationship, knowledge, and motivation of the parhes 0.e., seller and buyer); 2. the terms of sale (e.g., cash, cash equivalent, or other terms); and ' 3. the c~nditiohs o/' sale (e.g., exposur~ in a competitive market for a reasonable time prior to sat~-"' -If~e~ty hired a state-certified appraiser, that appraisal should 'be conducted according to""-] USPAP sta~'~s that arc under the jurisdiction of the Iowa Real Estate Appraiser Board. Because this is a complex issue, You may want to consider a review of the current appraisal or a second appraisal. For farther information regarding appraisal standards and practices in Iowa, we recommend that you contact the Iowa Real Estate Appraiser Board, 1918 S.E. Hulszier Avenue, Ankeny, IA 50021, 515- 281-7468 (phone); and 515-281-7411 (fax). Sincerely, ry A. Bevirt or unity Planning and Development Division Since ~ appraisal reflects prospective value conclusions concenung the future cost, income and expenses of a proposed project, the an~lys~ ~nnot be held reslx)ns~ole for changes in tho design or scop~ of the proposed project or un~or~seeable cysts h the market that alto' the condldons rdafivc t6 the ~ &re of completion ~ ~n. We assume the project will not deviate fi'om the proposal presented~ otherwi~, it inv~lldat~ the concl~ions of the report. Conclusion A~e~ carefully ~.atyzing the data and other pet'dne~t fa.-tors, it is my opinion that tho proposed project pre~ented and the r~trictions imposed upon the d~ wo~ld render this project not financially f-ca.ale. Consequently, tho indicated residual land value of the reuse parcel subject would result in a ne~. ~'o value. Therefore, in this case, no value is n,~.~d to Th~ is a stu~ary appraisal report, which is intended to comply with the n~x)riln8 requirements set forth under S,~-aard's Rule 2-2Co) of the Uniform Standards of Professional Appraisal Practice for that are used in the appraisal process to develop my opinion of value. SUplXa-ting doounentation concerning ~he data, reaso~*~ and analyses is retained in my file. The depth ofdiso_~s_*!on contained in this report is speci~c to the needs of the client and for the intended uses stated above. I am not responm~ole for unauthorized use of this report. Furthea'morc, in -_c¢ordance with prior ag~-emnent between the client nmi ou~ ot~ce, this report is the re. tit of a limited apl~6~l pr _c-o~___- in that certain ,allowable departures f~an apedf~,uidelines of the Uniform Standards of Profe_~J'onal Appraisal Practlc~ are invoked. The intended use~ oi'this report is warned that the reliability of the value conclusion provided may be impacted to the degree there departure f~om spedfic guidelines of USPAP. In this case, a complete Sales Comparison Approach, traditiol:taJ Land ValoatiOll nnd HJS~lest amd Be~ V$~ nnnl~s were ~ ~ This appraisal report is ~ubj~t to tl~ av:~¢~_ .~npnon~ and ~ Cond/aon~, induding the Hn-nrdous Material diacJahl~. EXHZBI'T D 64'1a pment fo Parcel 64-1a Redevelopment Request for Proposals City of Iowa City, Iowa PLEASE TAKE NOTE: THIS REQUEST FOR PROPOSALS CONSTITUTES A REQUEST FOR PROPOSAL, AND IS THUS A SOLICITATION FOR RESPONSES AND IS NOT GOVERNED AT THIS STAGE BY §384.95(f)(f), CODE OF IOWA. ANY ACCEPTANCE OF A PROPOSAL SHALL NOT RESULT IN A BINDING CONTRACT BETWEEN THE CITY AND THE PROPOSER, BUT INSTEAD WILL SIMPLY ENABLE NEGOTIATIONS TO TAKE PLACE WHICH MAY EVENTUALLY RESULT IN A MORE DETAILED AND REFINED AGREEMENT BETWEEN THE PROPOSER AND THE CITY. CONTENTS ~, PaRe The Redevelopment Project ............................................................. 3 The Community ................................................................................ 7 Proposal Procedure ........................................................................ 12 Private Developer Selection Process ............................................. 15 Available Reports ........................................................................... 17 Additional Information ..................................................................... 18 Appendix A - Zoning Map and Summary Description of Current Zoning ......................................................... 19 Appendix B - Area Map .................................................................. 20 Appendix C - Survey & Legal Description for Parcel 64-1a ........... 21 The Redevelo ment Pro'ect Project Focus & Project Criteria Parcel 64-1a is Iowa City's last urban renewal parcel, and as such provides the City with the opportunity to create an exciting capstone to downtown renewal efforts. The intent of the City is to enable the redevelopment of this site for a project that complements and enhances the existing uses in downtown and adds vitality to an already vibrant place. To this end, the City is seeking an innovative and imaginative developer to participate in a project that will result in a mixed-use development. Proposal submitted should address the following project criteria: Density. As the last undeveloped parcel of land within Iowa City's Central Business District, the City anticipates any proposed development will maximize the density allowed on the site under current zoning and building code regulations. Parcel 64-1a is located within the Central Business, CB-10, Zone. The CB-10 Zone permits a floor area ratio of ten, which would allow a ten-story building covering the entire parcel. Increases in height may be attained by building on a portion of the site. Proposed Uses. The CB-10 Zone is the high density, compact, pedestrian-oriented shopping, office, service, and entertainment area. Any proposed development is required to provide commercial space on the street and City Plaza levels of the development. Residential development is permitted above the ground floor. A detailed description and diagram of CB-10 zoning is found in Appendix A. The City is looking for a project which will enhance the downtown and add to the vibrancy of the pedestrian mall for people of all ages. Projects which are primarily residential in nature, particularly those with dormitory-style housing of 4-5 bedrooms per unit, are discouraged. Those projects containing residential units with no more than two bedrooms are preferred. Projects which include a mix of uses - commercial, office, entertainment - are encouraged. Single uses such as hotels, theaters, or other types of commercial uses are also welcomed. Parking. Most parking for the proposed development is expected to be provided by public parking facilities, not on-site. Proposals incorporating some private parking for the project will be considered; formal approval by the Iowa City Board of Adjustment will eventually be required. The ability to provide private parking on-site will depend upon the quality of the proposed project. This site has provided public parking in close proximity to the public library since 1997. The City will look favorably on any project that includes public parking spaces on the site. These parking spaces must be easily accessible to the Public Library. A well-defined pedestrian connection from the Dubuque Street parking ramp to the Public Library is also desirable. Design. Given this is the final structure in Iowa City's urban renewal program, the City expects an imaginative design that will be a striking addition to the downtown. A signature building design complimentary to the architecture of downtown Iowa City is desired. In addition, the design of the new structure should complement the design of the expanded public library and create an attractive entry point to City Plaza. The City Council will review and approve plans, specifications and construction drawings of this project. In addition to the administrative review processes set forth in the City ordinances, this process will include review of the entire pro- ject's design plans by the Design Review Committee and approval by the City Council. This process is outlined in the Design Review Ordinance. The approval of the preliminary plans by the Design Review Committee and the City Council will be conducted in a cooperative and expeditious manner. Construction The City of Iowa City plans to renovate and expand the existing Iowa City Staging. Public Library beginning the fall of 2001 and anticipates completion in the Spring of 2004. The construction staging for the development of Parcel 64-1a should take into consideration the construction of the Public Library project. Creative ways of addressing construction staging so that both projects may be completed smoothly, efficiently, and expeditiously are strongly encouraged. Unless staging of the library project and the project on 64-1a are coordinated, Parcel 64-1a will not be available for construction until January 2003. The Site DESCRIPTION Consisting of approximately 1,02 acres, Parcel 64-1a is located at the intersection of Linn Street and City Plaza, a well-landscaped pedestrian mall in the head of downtown Iowa City. A diagram of the area is found in Appendix B. The site is located approximately two blocks from the University of Iowa campus and one block from Old Capitol Town Center a two-level, 275,000 square feet, enclosed shopping mall. Land uses surrounding the site are: North - Located across the pedestrian mall is the existing Iowa City Public Library, which has averaged over 55,000 users per month and which will be undergoing a major expansion project beginning Fall 2001. South - A six-level (five above grade), 625-space municipal parking facility is located across an alley from the site. West - Adjacent to the site is the 9-story, 236-room Sheraton Hotel, downtown's only lodging facility. East - Located across Linn Street is the old Carnegie library which is privately owned and leased for office space. ACCESS Linn Street provides direct street access to the site while City Plaza facilitates pedestrian movement to and from the site. This area is characterized by heavy pedestrian movement and a variety of daytime and nighttime activities. Excellent bus service is provided by the downtown transit exchange two blocks away. In addition to the 625-space municipal parking facility immediately adjacent to the site, an 875- space multi-level municipal parking facility is located one and one-half blocks to the west and a 475-space multi-level municipal parking facility is located one and one-half blocks to the east. Construction of the fourth downtown parking facility, Tower Place, should be completed in late Spring of 2001. This parking facility along Iowa Avenue will contain approximately 600 parking spaces and will be only two blocks away from Parcel 64-1a. A detailed diagram of the site and legal description of the site is found in Appendix C. HISTORY~SITE CONDITIONS In 1937 this parcel was part of the area zoned as a business district. Thereafter, many different businesses operated from the block, including coffee shops, restaurants, taverns, shoe repair, car sales and realtors. The City began acquiring parcels of property on Block 64 in the mid-1950s. Through a series of land purcha~ses, including condemnation proceedings, the City acquired property on the south end of Block 64 for a parking lot. The existing structures were demolished, and the area was backfi~led and surfaced with asphaltic concrete for a parking lot. Results of exploratory soil borings on the site are available in a 1982 Foundation Investigation report. The report gives a physical content description of three borings on the site. There are approximately 7 to 11 feet of fill present (generally a silty clay with some crushed limestone and fragments of wood, brick and concrete). In general, the subsurface soils consist of about 32 to 44 feet of silt and clay soils overlying approximately 39 feet of sand. Limestone bedrock was encoun- tered in two of the borings at depths ranging from approximately 71 to 76 feet below existing grades. (Note: The City does not guarantee that the report fully describes subsoil conditions.) APPRAISED VALUE The last real estate appraisal of the site was conducted in May 1996. The appraised value of the site at that time was $1.2 million. The City is in the process of having a more current appraisal (zf the site completed. 5 FINANCING The City will consider providing financial incentives in return for an exceptional private project. These incentives could include, but are not limited to the following: Praperty Tax Exemption: The parce~ is located within the Central Business District Urban Revitalization Area and thus the non-residentia~ commercial components of any project would be eligible for property tax exemption for a period of years as outlined in the urban revitalization plan. Tax increment Financin,q: The parcel is located within the City-University I Urban Renewal Area (Project IA R-'I4) and thus tax increment financing could be available for a project to help finance up-front project costs or to provide a property tax rebate. The use of tax increment financing shall not exceed a period of ten years. Purchase Price: The purchase price of the land is negotiable. The proposed financial package and return to the City will be evaluated as part of the proposal selection criteria. Site Acquisition Terms for payment for acquisition of the site must be included as part of the development proposal. The Communit INTRODUCTION Thirty years ago, the City of Iowa City began an ambitious urban renewal project to renovate and reconstruct its downtown retail and employment center. Through public action and commitment, the City has stimulated private investment in redevelopment and rehabilitation of the vital downtown area and improved Iowa City's downtown environment to serve the employment, shopping, residential and leisure needs of its citizens. The City of Iowa City is preparing to develop the last undeveloped parcel, known as "Parcel 64- la," of the original 18 parcels of urban renewal land acquired for disposition and development by the City. The City is soliciting proposals for private development projects that will maximize the development potential of the site while also providing public parking for the Iowa City Public Library. The site provides an excellent development and investment opportunity in the dynamic Iowa City market. Community Overview Location ~ Iowa City is a thriving community strategically located in east central Iowa within 300 miles of Chicago, Minneapolis, and St. Louis. Cedar Rapids, Iowa's second largest city, is 25 miles north of Iowa City via 1-380. Interstate 80 links Iowa City with Des Moines (110 miles west) and Davenport (60 miles east). Iowa City is the Johnson County seat and the Iowa City Metropolitan Statistical Area (MSA) is coterminous with the county. 7 Uniquely Iowa City Iowa City is regarded as one of the most attractive places to live in the Midwest: Editor & Publisher Market Guide (December 2000) Iowa City ranked as the most livable U.S. city on the Better Living index. The popular Better Living Index assesses cities based on three key factors: cost-of-living index, crime index, and education levels. Other rating criteria include population, disposable income, income per household, and retail sales in nine categories, as well as the retail sales total. Reader's Digest (April 97) Iowa City ranked in the nation's top 50 of the best places to raise a family, cited as having "what makes a town family - friendly. Parents topped the list with Iow crime rate, Iow drug and alcohol abuse, good schools, high quality health care, a clean environment and affordability". Kiplinger's Personal Finance Magazine (September 96) Iowa City ranked as the second healthiest city in the United States, because of the health benefits of University Hospitals and abundant recreational areas. Business Week (July 98) "As people challenge the conventional notion of retirement, they're rethinking the types of place where they want to spend their later years. For an increasing number of Americans, that means choosing an area where they can have access to culture, education, entedainment, history, and a shot at a rewarding full or part - time job." Iowa City was rated as on of the most attractive cities to retire; maintain a cost of living below the national average. Fortune (August 18, 1997) Iowa City has a higher percentage of college graduates than any other city in the U.S. as measured by Moran Stahl and Boyer, a consulting firm specializing in business location selection. Population With a population of approximately 62,200, according to the 2000 Census, Iowa City constitutes approximately 60% of the total population of Johnson County. During the 1990's, Johnson County's population grew by 15% to 111,000, while Iowa City's population grew by 4 per cent. Employment Total employment in Johnson County has increased an average of 2% per year from 1990 to 2000. In terms of net new job creation, the government and service sectors have shown the largest absolute gain. The finance/real estate/insurance, transportation/utilities, and service sectors have had the greatest percentage increase. Iowa City has one of the lowest unemployment rates among the nation's metropolitan areas. Annual unemployment has not exceeded 3% in the past seven years. In 2000 the annual unemployment rate in iowa City was 2.3 percent. 8 Major Employers Iowa City is home to the University of iowa and the location of numerous nationaliy known companies such as ACT, National Computer Systems, General Mills, Procter and Gamble, Lear, Oral B Laboratories, and Moore Business Forms. The University of Iowa campus, a Big Ten conference school, is adjacent to the downtown urban renewal area. With an enrollment of just under 27,000 and approximately 15,000 full-time faculty members and employees, the University plays a key supporting role for downtown commercial and retail activities. In addition to the University, city, county, and federal government offices are located in the downtown and also support commercial activity. Retail Since 1991, retail sales in Johnson County have grown by approximately $460 million, from $640 million to $1.1 billion. Approximately, 65% of these retail sates occurred within Iowa City. Coral Ridge Mall, in Coralville, opened in August 1998. This new retail center has had dramatic effects on the entire region. Taxable retail sales in Coralville doubled between 1998 and 1999. During this same time, taxable retail sales in Iowa City grew by approximately 5%. Downtown Iowa City is home to over 150 retail stores and restaurants, ranging from regionally recognized department stores to I~'cally-owned specialty shops. Housing Between 1990 and 2000, more than 4,300 housing units have been constructed in Iowa City. Of those 4,300 units, nearly 55% percent are multi-family units. These multi-family housing units were not only constructed on the periphery of the community, but were also constructed in and near the downtown as private sector redevelopment projects. Single-family home sales reached record levels in 1999. The iowa City Area Association of Realtors documented 1,895 single-family home sales in 1999 at an average sale price of $131,643. Lodging The Iowa City/Coralville area has 30 hotels and motels containing over 2,100 rooms. Complementing these hotels are 5 area bed and breakfasts containing 20 rooms. The area hotel market caters not only to traffic off of Interstate 80 and visitors to the University, but atso tourists to the area, conference attendants, and business travelers. The area's largest hotel (with 236 rooms) is the only hotel located in downtown Iowa City. Downtown Area Past Redevelopment Efforts With its Urban Renewal Program, the City used public investment to install functional and aesthetic improvements to utilities, streets, parking and other major public facilities in the downtown. Utilities on key streets were placed underground and extensive beautification programs were completed. Public parking facilities were constructed to encourage and support downtown activities. The City Plaza, a three-block pedestrian mall, has been designed to enhance pedestrian circulation within the downtown core. The character of City Plaza is warm and inviting with an abundance of landscaping. With the Urban Renewal Program, many redevelopment projects occurred. Private redevelopment projects included the 236-room Sheraton Hotel at the Center of the Plaza, a five story office building, Plaza Center One, across from the Sheraton Hotel, and a 275,000 square foot retail development, Old Capitol Town Center, which anchors the west end of the Plaza. Anchoring the east of the Plaza was the construction of the Iowa City Public Library. Recent Redevelopment Efforts The City is in the process of once again reinvesting in the downtown. A $4 million streetscape improvement project has been completed in downtown, and the $3 million Iowa Avenue streetscape project will be completed this fall. The City plans to begin construction of an $18 million dollar renovation and expansion project of the Iowa City Public Library. Tower Place and Parking, a $12 million mixed-used development project including nearly 30,000 square feet of commercial space at street level and 580 parking spaces will be completed this spring. The City is also in the process of designing the construction of the Near Southside Transportation Center. The transportation center is another mixed used development project including an interstate bus depot, a day care center on the street level and between 300 and 500 parking spaces. With the construction of these two facilities, there will be an additional 800-1000 parking spaces within 1 ~ blocks of Parcel 64-1a. These spaces will only add to the existing nearly 2700 public parking spaces in the core downtown Iowa City area. In addition to public investment, private investment has also occurred in recent years in the core downtown Iowa City area. The projects have consisted of mixed-use structures, typically commercial on the first floor and residential rental units above. These include buildings at Court and Gilbert streets, Linn and Court streets, Dubuque and Burlington streets and on Clinton Street between Burlington and College streets. A five-story commercial project, called Hieronymous Square, is planned at the corner of Burlington and Clinton streets. Over the years, the redevelopment projects in the downtown area were planned to complement and reinforce each other to create a strong economic and social center for Iowa City. The proximity to the University, the municipal parking system, and the mix of commercial uses are important indicators that downtown Iowa City will remain a strong community and activity center. These assets combine to make Iowa City's last Urban Renewal site an excellent development and investment oppodunity. 10 Pro osal Procedure PROPOSAL SUBMITTAL Developers are encouraged to contact the City of iowa City to obtain a Request for Proposals packet and to inform the City of their interest and intentions as soon as possible. Contact should be made with the City's Economic Development Coordinator (David Schoon, 319-356-5236 or the Director of Planning and Community Development Karin Franklin, 319-3,56-5232) at your earliest convenience. City representatives are prepared to meet with you to describe this development opportunity any time prior to the formal submission date. Responses to this solicitation for offers to purchase or lease and develop the site must be submit- ted to the City Clerk, 410 E. Washington Street, Iowa City, Iowa, on or before: 4:30 p.m. (CDT) on August 3, 200t Proposals must be submitted to the City Clerk with all suppoding documents in a sealed envelope or other container marked only with the following: Iowa City Urban Renewal Parcel 64-*/a Development Proposal The proposal envelope or container shall bear no exterior indication of the identity of the person or firm making the proposal. A written receipt will be given for each proposal filed with the City Clerk prior to the deadline. Faxed copies will not be accepted as proposals. PROPOSAL REQUIREMENTS Ten (10) copies of the following documentation requirements must be contained in the proposal. 1. Offer to Purchase Development Ri,qhts for Private Redevelopment - All offers to purchase be submitted in substantially the same format as the form furnished by the City and must be complete in all respects. ^ny additions, deletions, or modifications in the Offer t~o Purchase must be explained and justified in full detai~ in a narrative statement attached to the Offer. (Format of document included in proposal packet.) 2. Redeveloper's Statement of Qualifications and Financial Responsibility. (Format of document included in proposal packet.) Redeveloper's Statement for Public Disclosure. (Format of document included ~n proposal packet.) 4. A written narrative which describes the proposed development. At a minimum, the narrative should contain the following information: · The use or uses proposed. 11 · The height and number of stories in the structure. · The intensity of the proposed use(s) (e.g., total square footage, number of residential units by number of bedrooms, number of hotel rooms, common space, etc.). · The estimated total cost of improvements, including hard and soft costs. · The amount and likely source of equity capita~ and the probable amount and source(s) of other financing. State any specific assumptions which have been made concerning the financing terms deemed necessary for the project. 5. A site plan and elevation illustrating the proposed concept. These need not be engineered plans but should be to scale. 6. A written narrative which sets forth the developer's experience. At a minimum, this narrative must contain: a list of other properties or development projects and their location, type and size, and the name and phone number of a person familiar with your prior work so the City may be assured of prior satisfactory performance; the names and background of the principal(s) who will be responsible for this project; and the qualifications, persons and contact (for reference check purposes) of other persons or firms who will be involved in the project. GENERAL S TIPULA TIONS The City is not responsible for any expenses which proposers may incur in preparing and submitting the proposal. The City will not be liable for any costs incurred by the proposers that are related to the proposal process; this includes production of the proposal, interviews/presentations, travel and accommodations. A~I proposals received from proposers will become the property of the City of Iowa City and will not be returned to the proposers. In the event of contract award, all documentation produced as part of the contract will become the exclusive property of the City. Subsequent to written notification to the City of an interest in submitting a proposal and prior to August 3, 2001, the City may wish to meet with certain developers for further clarification. The City reserves the right to initiate such meetings. These meetings may be conducted on an individual or collective basis, involving anywhere from one to all of the prospective developers. The meetings may be called, however, only at the initiative of the City. In the event that no acceptable proposals are received by the City within the designated time limit, the City may negotiate for a proposal with any party, and/or re-solicit offers under changed terms or conditions. After August 3, 2001, no new proposals will be accepted and no modifications to those already submitted will be allowed unless specifically requested by the City. Also, after the deadline the names of those submitting proposals will become available to the public as a public record. 12 PROPRIETARY INFORMATION The City is sensitive to concerns regarding proprietary information and the RFP Process. However, the RFP process is subject to the State of Iowa's Open Records Laws, specifically Iowa Code Chapter 22. As such, if proprietary information is specifically requested by members of the public, it may be subject to dissemination, in accordance with the provisions of Iowa Code Chapter 22. The submitted proposals, excluding proprietary information, may be subject to general public review after the submission deadline upon appropriate inquiry. In accordance with Iowa Code Chapter 22, and except as may be provided by other applicable State and Federal Law, all proposers should be aware that Requests for Proposals and the responses thereto are in the public domain. However, the proposers are requested to specifically identify any information contained in their proposals which they consider confidential and/or proprietary and which they believe to be exempt from disclosure, citing specifically the applicable law and exempting the same from disclosure. 13 Private Developer Selection Process EVALUATION CRITERIA Upon receipt of the written proposals, the City will review and evaluate all submissions in accordance with the following criteria: Private Development Plan · Quality and creativity of the proposed development. · Compatibility with standards, objectives and controls set fodh in the Urban Renewal Plan, this Request for Proposals, and disposition documents. The probability of achieving market acceptance. · The timeliness of the proposed construction schedule. · The price offered and terms. Developer Experience and Qualifications · The success of previous development effo~s and/or the operation of facilities of similar nature as evidenced in this solicitation. · Public acceptance of previous developments, in terms of design, timing of work and functional relationships. · Reputation in regard to character, integrity, skills, judgment and competence. · Demonstrated ability to work with the public sector. Implementation Ability · Experience of the principals and key staff that will be involved in Iowa City in carrying out projects of similar scale and character, which information may be solicited during the course of the City's reference checks. · Availability of sufficient financial resources to complete the project in a timely manner. Additional information may be required to clarify a prospective developer's plans and intentions. The City reserves the right to request additional information from any prospective developer after offers have been received and opened. 14 DEVELOPER SELECTION This Request for Proposals is being sent out to a number of developers. After an initial screening by City staff, the development teams of ali qualified submitted projects will be asked to make a general presentation of their plans to the public. A private interview with the City staff selection committee will occur the following day. The selection committee reserves the right to have discussions with any or all of the submitting teams. The selection committee will make a recommendation to the City Council. After receiving recommendations from the staff, the City Council will select the preferred devel- oper. The announcement of preferred developer will be made by the City Council, and the preferred developer is expected to execute a development agreement within a period of 90 days. The City, through its staff and its representatives, reserves the right to continue negotiations and discussions with the preferred developer after designation is made, in order to discuss and accomplish modifications in the development proposal including, if necessary, modifications in the development contracts if such discussions and alterations are made necessary by evolving circumstances. If a development agreement has not been executed at the conclusion of 90 days, the City, at its sole option, reserves the right to rescind the designation of the preferred developer or to extend the time period allowed for negotiation and execution of a development agreement. Should the City exercise its option to rescind the preferred developer's designation, the City may initiate negotiations with one of the other developers who submitted a proposal on the parcel, or the City may begin a new selection process. All materials shall become the exclusi~/e property of the City and may be utilized as the City deems proper. The City of Iowa City reserves the right to waive informalities and irregularities in the proposal procedures specified in this offering or proposals received, and also reserves the right to reject any or all proposals. PROJECT EXECUTION Upon the execution of the development agreement, the developer shall proceed with the pro- posed project in accordance with the agreement as executed. Payment in full or as per contrac- tual conditions is due upon transfer of development rights to the property. WITHDRAWAL OF PROPOSALS Prior to opening of the proposals, a proposal may only be withdrawn by written request by the Offeror. After proposals are opened, Offers shall remain valid and irrevocable until one hundred and fifty days from the date of opening, and shall remain in force thereafter until withdrawn by the Offeror in writing. PUBLIC NOTICE Prior to entering into any signed documents or agreements, the City will give public notice of intent to enter into an agreement for the development rights of this Property as provided by the applica- ble state laws. Following such notice, the City will enter into an agreement with the proposer whose proposal, in the sole judgment of the City Council, best conforms to the Urban Renewal Plan and the City's objectives. 15 Available Re orts & Documents The following reports are relevant to this project. Copies of these reports may be obtained from the Iowa City Department of Planning and Community Development on an at-cost basis. Iowa City Urban Renewal Plan (supplied in proposal packet) Iowa City Zoning Ordinance, 2000 Iowa City Comprehensive Plan Update, 1997 Central Business District Urban Revitalization Plan, 1999 Foundation Investigation for 64-1a/64-1b (Soil Core Report), June, 1982 Design Review Ordinance, 1997 Downtown Strategy, 1997 16 Additional Information Specific questions related to the Request for Proposals must be addressed in writing to the City. Answers will then be distributed to all development teams. Additional and updated information will be provided to the teams via fax, e-mail, or correspondence. Please submit all requests to: David Schoon, Economic Development Coordinator City of Iowa City 410 E. Washington Street Iowa City, Iowa 52240 (319) 356-5236 (Office) (319) 356-5009 (Fax) david-schoon@iowa-city.org OR Karin Franklin, Director, Planning and Community Development City of Iowa City 410 E. WashingtorrStreet Iowa City, Iowa 52240 (319) 356-5232 (Office) (319) 356-5009 (Fax) karin-franklin@iowa-city.org 17 Appendix A Zoning Map and Summary Description of Current Zoning P P CB 2. 14~6E-8: Central Business Zone (CB-10) Intent: The Central Business Zone (CB-10) is intended to be the high density, compact, pedestrian-oriented shopping, office, service and entertainment area in Iowa City. Development and redevelopment in this Zone should occur in compact groupings, in order to intensify the density of usable commercial spaces, while increasing the availability of open spaces, plazas or pedestrianways. The Zone is intended to accommodate a wide range of retail, service, office and residential uses. Auto-oriented uses are not permitted except as otherwise provided. Consolidated off-street loading and service facilities should be provided wherever practical with access provided from public service alleys or courts. It is intended that off-street parking facilities be publicly provided and off-street accessory parking be allowed only as a special exception. Because of the proximity of the University of Iowa, residential development above the ground floor in this district is encouraged as a provisional use. 18 Appendix B Area Map CITY PLAZA ~ Old ~ Sheraton Public ~ '~' Library ~ U.~ ~ Service Alley Office ~ Municipal Parking Ramp ~ Hawkeye g State ..~ Z~ Ban~k __j ~ '-~ ~ E BURLINGTON ST ~ 19 Appendix C Survey and Legal Description for Parcel 64-1 a - See following page - ecodev \64-la\rfp parcel 64-1a - 2001.doc 2O AUDITOR'S PARCEL NO. 97013 ~Ei~ AUDITORS PARCEL NO. 970 ·.. ,~'5z5~'~ 85.00 ................... ' '~///~N~S'S~ ~z~'~, , '~ ~'/x/x/x/X//~xx~, ~ Addendum to Parcel 64-1a Redevelopment Request for Proposals Document 200~1 Appraised Value of Parcel 64-1a Issued May 31,2001 In the Parcel 64-1a Redevelopment Request fo/' Proposals document that the City released at the end of March 2001, the City noted that the last real estate appraisal of the site was conducted in May 1996 and that the appraised value of the site at that time was $1.2 million. During the month of April, the City hired Hertz Appraisal Services of Mt. Vernon, Iowa to complete a real estate appraisal of the site. As of April 24, 2001, the appraiser estimated the market value of the site at: One Million Seven Hundred Seventy-One Thousand Dollars $1,771,000 During the month of May and as standard procedure, the City hired Cook Appraisal Commercial Valuation Research Group to review the appraisal performed by Hertz Appraisal Services. In summary, the review appraiser found "the final estimate of value to be reasonably supported" and he "did not find any errors in logic, judgement, or appraisal procedures". For purposes of negotiations with the preferred developer, the value of the site will be considered to be this estimated market value. Addendum II to Parcel 64-1a Redevelopment Request for Proposals Document Compiled versus Audited Financial Statements Issued July 20, 2001 In the Parcel 64-1a Redevelopment Request for Proposals document titled "Redeveloper's Statement of Qualifications and Financial Responsibility," proposers were asked to provide: 4b. Name and address of auditor or public account who performed the audit on which said financial statement is based. The City has determined that audited financial statements are not required with the submittal of the development proposal. Submission of compiled financial statements is sufficient with the submittal of a development proposal. Upon designation as the preferred developer, the preferred developer shall be required to submit audited financial statements as requested by the City. So this section should read as follows. 4b. Name and address of auditor or public accountant who prepared the compiled financial statements as noted in Section 4.a. above. (Note: The preferred developer will be required to submit audited financial statements as requested by the City.) Though audited financial statements are not required at this stage of the process, if audited financial statements are available they may be submitted in substitution for the compiled financial statements. 410 EAST WASHINGTON STREET * IOWA CITY, IOWA 52240-1826 · (319) 356-5000 · FAX {319} 356-5009 City of Iowa City iP5 MEMORANDUM Date: November 11,2003 V- ' To: City Manager From: Karin Franklin, Director, P Re: Plaza Towers We have received a letter from David Dahlin of Bankers Bank Syndication Services, Inc. (BBSSI) indicating that BBSSI has reached agreement with Plaza Towers L.L.C. for the financing of up to $20,300,000 for the Plaza Towers project. We expect to convey the property within the coming week. Cc Eleanor Dilkes Sarah Holecek Kevin O'Malley Loren Brum City of Iowa City MEMORANDUM November 12, 2003 City Council / ~'~ .... /~ '~ To: - Karen Howard, Project F'lanne~/,~ Re: Development Code Rewrite Project Attached is an update regarding the Development Code Rewrite Project. It is in the form of an annotated table of contents that lists each chapter and article of the proposed Code and its current stage of completion. In addition, for those new to the Council, we provide the following brief overview of the project. Project Goals The Development Code Rewrite Project is intended to accomplish the following goals: · Implement the policies and qoals of the City's Comprehensive Plan - Zoning and subdivision regulations are important tools for achieving many of the goals listed in the Comprehensive Plan. For example, adopting regulations that guide and encourage best practices in subdivision and site planning will help to establish neighborhoods that will remain safe, stable and attractive over time. Simplifying and clarifying regulations for commercial and industrial development will promote economic growth in the community. · General clean-up of the Code - It has been about 20 years since the last major rewrite of the City's development regulations. As with any regulatory system, over time certain requirements and regulations have become obsolete or have proved problematic. While the Code has been amended many times to fix these "glitches," such piecemeal change has created inconsistencies. Looking at the ordinance as a whole will help to identify these inconsistencies so that we do not inadvertently hinder the kind of development that makes Iowa City a good place to live and work. · Streamline the development review process by establishing clear and objective development standards and by reducing reliance on the planned development process. Establishing clear and objective standards in the Code will make the development process more predictable and easier to navigate for developers, real estate professionals, and for average citizens wanting to make changes to their properties. · Revise the format, content and orqanization of the Code to make it more customer-friendly, predictable, enforceable, and efficient. Specific recommendations for changes to the development code are described in the Development Regulations Analysis, the report submitted to the Council by Duncan and Associates, the consultant that was initially hired for the project. Please let us know if you would like a copy of this report. Process As sections of the Code are drafted, we have been forwarding them to the Planning and Zoning Commission for their initial review. This allows the Commission to become familiar with the Code and review the draft language in more "digestible pieces." Once the Code in its entirety is in preliminary draft form, it will be presented to the public in a series of informal workshops. Following these public workshops, the Planning and Zoning Commission will solicit public input at a series of formal hearings. Based on input from the public and the Planning and Zoning Commission, staff will forward a "recommended draft" of the Code to the Council for consideration. Staff is making a concerted effort to discuss the project with any citizens and organizations that have indicated an interest in following the drafting process more closely. For example, we are forwarding all preliminary drafts to the local Home Builders Association at their request and have met with them several times to discuss the process and the Code language in detail. Environmental Advocates and the Housing and Community Development Commission have also asked staff to discuss the project at upcoming meetings. The Neighborhood Council has been informed about the project and will keep the many neighborhood associations updated on the project. Because we are releasing preliminary draft sections throughout the process, you may be lobbied by individuals and groups about aspects of the code prior to it being completed. We would ask that the Council withhold judgement on the code until the process is complete and the code is presented to you in a comprehensive form. The actual language of the code may change several times between the initial draft sections being released and the final draft being presented for Council consideration. This approach will allow the Planning and Zoning Commission to complete its work and will allow the public hearing process to occur. It is our goal to work with interested citizens and organizations to draft a development code that enacts the policies of the Comprehensive Plan and addresses the issues identified in the Development Regulations Analysis. If you have questions about the project or the process, or wish to amend the process, please let us know. Cc: City Manager Robert Miklo TITLE 14: UNIFIED DEVELOPMENT CODE OF IOWA CITY Chapter 1. Introductory Provisions Article A. Title, Applicability, Purpose P&Z Article B. Interpretation and Scope P&Z Chapter 2. Base Zones Article A. Single Family Residential Zones P&Z Article B. Multi-Family Residential Zones P&Z Article C. Commercial Zones P&Z Article D. Industrial and Research Zones P&Z (Partial) Article E. Special Purpose Zones Draft in progress Chapter 3. Overlay Zones Article A. Planned Development Housing Overlay (PDH) Draft in progress Article B. Historic Preservation Overlay (HP) Under staff review Article C. Conservation District Overlay (CD) Under staff review Article D. Design Review Overlay (DR) Draft in progress Chapter 4. Use Regulations Article A. Land Use Classification P&Z Article B. Provisional Uses and Special Exceptions P&Z Article C. Accessory Uses and Buildings P&Z Article D. Temporary Uses P&Z Article E. Nonconforming Situations P&Z Chapter 5. Site Development Standards Article A. Off-street Parking and Loading Standards Draft in progress Article B. Sign Regulations Draft in progress Article C. Access Management Standards Under staff review Article D. Intersection Visibility Standards P&Z Article E. Tree Standards Under staff review Article F. Landscaping and Screening Standards P&Z Article G. Outdoor Lighting Under staff review Article H. Off-Site Impact Standards Draft in progress Article I. Sensitive Lands and Features Draft in progress Chapter 6. Airport Zoning No changes Chapter 7. Subdivision Design and Improvements Draft in progress Chapter 8. Building and Housing Move to different Title Chapter 9. Public Works Move to different Title Chapter 10. Review and Approval Procedures Draft in progress Chapter 11. Boards and Commissions Draft in progress Chapter 12. Penalties and Enforcement No changes Chapter 13. Definitions and Measurement Standards Draft in progress Draft in progress = Staff is drafting code language. Under staff review = Language drafted and under review by a joint staff committee (including staff from the Planning Dept, Housing and Inspection Services, and City Attorney's Office + staff from other departments when needed). P&Z = Draft language forwarded to P&Z for initial discussion and review. P&Z (Partial) = A portion of this article has been forwarded to P&Z for review. November 12, 2003 ~ Hayek Hayek Brown and Moreland LLP Attorneys at Law 120% East Washington Street Iowa City, IA 52240-3924 Re: Your letter of November 4, 2003 Dear Mr. Hayek: Thank you for your letter of November 4 outlining your concerns about traffic and parking in downtown Iowa City. You are correct that downtown Iowa City is a place where motor vehicles, delivery trucks, pedestrians and bicyclists all compete for a limited amount of space. This results in a situation that some persons judge to be congested. I believe another way to look at this "congestion" is that it is indicative of a successful downtown with a high level of activity. I often comment to people who perceive a problem with parking in downtown Iowa City that if you show me a downtown that is not deemed to have a parking problem, I will show you a downtown that is failing. I believe any successful downtown is crowded and congested. This is what successful downtowns are: places with a high level of activity in a limited amount of space. I do not dispute your comments regarding the parking of delivery vehicles in downtown Iowa City. In fact, I share some of your concerns. This issue is largely a policy question of the appropriate level of parking enforcement for delivery vehicles in downtown Iowa City. This has been considered periodically by past city councils, and the present level of enforcement judged to be appropriate. Certainly delivery vehicles blocking crosswalks and extending into intersections are unacceptable. I will send a copy of your letter to Chris O'Brien, Parking Manager for the City, and I know he will make sure that his enforcement personnel are on top of this situation. I believe that generally such violations are enforced, but you may have observed what hopefully is the occasional exception. The City Council has considered the issue of delivery vehicles parking in the center of the 10 block of South Dubuque Street several times, and each time it has been determined that this is an allowable situation. As you know, the block in which your business is located does not have an alley. This has been the motivation for the City Council's decision to allow delivery vehicles to informally park in the center of Dubuque Street. I know our Parking enforcement personnel do attempt to keep unauthorized vehicles out of this area, and that citations for illegal parking are issued. There is also an issue with delivery vehicles becoming increasingly larger in size, with some of the beer trucks in particular approaching the size of full-sized semi-trailer trucks. This may be a trend that eventually causes reconsideration of some of the points that you raise, such as limiting deliveries to certain times of day. By forwarding your letter to the Mayor and City Council, you have raised their awareness of this situation. 410 EAST WASHINGTON STREET · IOWA CITY, IOWA 52240- 1826 · (319) 356 5000 - FAX (319) 356-5009 Matthew J. Hayek November 12, 2003 Page 2 Thank you again for your correspondence, and feel free to contact the Parking Division at 356-5096 when you observe vehicles parked illegally that you believe constitute a safety hazard. One benefit of the congestion in downtown Iowa City is that for the most part it results in vehicles moving fairly slowly. Slow moving vehicles generally result in a Iow incidence of collisions. Although the delay to motorists may be perceived as an inconvenience, it does help us manage the safe interaction of motor vehicles, pedestrians, and bicyclists in downtown Iowa City. Sincerely, ,....._ Jeff Davidson, Director Traffic Engineering Planning cc: Stephen J. Atkins, City Manager Karin Franklin Joe Fowler Chris O'Brien jccogtp/~tr/hayek doc Senior Center Memorandum To: Steve Atkins, City Manager From: Linda Kopping, Senior Center Coordinator'4~;:x~t~. '~--.~-,~_,~ Re: Participant Use of the Center's Exercise Equipment Room' ~ ~.~ Date: 6 November 2003 Since implementing the membership program in July of this year, access to the Center's exercise equipment room has been restricted to current members. Current members can access the exercise room, which is equipped with several treadmills, upright and recumbent stationary bicycles, and an elliptical stridor, Monday through Friday from 7 a.m. to 7 p.m. and Saturday and Sunday from 10:30 a.m. to 1:30 p.m. Members access the room by using their membership/access card. These cards are programmed to open specific doors during specific hours of each day. Participants using the exercise equipment room will find the following safety measures in place: · There are two windows in the exercise room. Both measure 78" x 22.5". These two windows provide complete visualization of the room from the hallway adjacent to the room. · A phone, with dialing instructions, is located in the room. · Senior Center staff schedules have been adjusted in order to provide staff coverage Monday through Friday from 7 a.m. to 7 p.m. Staff members are not always in close proximity to the room, but the room is checked on a regular basis. On Saturday and Sunday the kitchen staff is in the building. · A copy of the manufactures' personal safety instructions is attached to each treadmill, the elliptical stridor, and the newest stationary bicycle. Manufacturers' safety information has been ordered for the older stationary bicycles. · We have discussed the need for additional signage with Jim Gulland and are searching for an appropriate sign or poster providing general safety information, e.g. don't exercise if you have chest pain, consult your dr. first, etc. Aisc, exercise at your own risk. · A first aid kit is being prepared and will be placed in the exercise equipment room. · Emergency exit information is located the room. STEVEN KANNEIC City. Councilmember,. 'rowe City Home Address: 630 ~ Governor, #1, Iowa City, Iowa 52240 (319)338-8865 To: City Council From: Steven Kanner Date: 11/12/03 Re: Attracting the Creative Class In regards to economic development for Iowa City, here's an interesting article by columnist Neal Peiree from the National League of Cities' newsweekly. He writes about the hot new topic of the 2000's - ~g the "Creative Class" to your city. Of note in the article is the Memphis Manifesto, of 2003, that "takes a big swipe at American 'monoculture and homogeneity' - the sameness of big product names, the dull sameness of franchises as they stamp out local flavor...'Be authentic,' reads the Manifesto. 'Dare to be different, not simply the look-alike of another c, omraullity.'" Peiree continues his discussion of the Manifesto, "All-male boards of directors would get broken up. And dull corporate sameness would be challenged, whether it's chain stores forcing out local retailers or anomalies like a Wal-Mart landing in New Orleans' (}arden District." I would argue that the Manifesto's call for personal responsibility in '~battling mediocrity, intolerance, sprawl, poverty, bad schools, exclusivity and the like," should be joined by public responsibility. The City Council and organizational resources - public or private - need to be involved in a systemic fashion. Forget the same old economic development policy of the 19th and 20th centuries that tends to subscribe to the trickle down theory of giving money to millionaires through tax abatements, loans and grants. The City of Iowa City would be much better offby joining the 21~ century. We should be supporting trickle up economic development policies tin. at support the most vulnerable in our society while also considering ways to attract the Creative Class via some of the above proposals. This would ultimately help to augment our city coffers. "Memphis Manifesto The Young ~Y ~ ~'~ But what} the welcome mat to look like?How does a tow_n W~h~gton P~t W~ G~up by Bffi B~hop o~ actually draw the mobile and talented 25-to-34-year-olds who ~edc~-Statesm~. ~e theory has so~ded Yet the ~ion of yegg great ever s~ce mchard can add spice and ve~e to i~ economic m&? naves ~mg 'res~5~ Florida expounded it in ~s ~ of immense re.vance in 2~ ~k; "~e Rise of ~e "S~ ~," l~plm "yegg mealy ~om sho~g off i~ e~dfi~ ra~ back~o~ ~efi~ ~uffiti~ at t~ prosper ff ~ey hy out a wel- Memp~ to debate the new ciation with the new "crc- ~ of ide~ expre~io~ mi- ~e Memp~ ~o~ a ~n- cite in creative ide~ ~at "Memp~ M~ffesto' a~cu- A ~t s~me ~ ~e v~- In the sine ve~. ~e mm~ ~ put toge~er a pro- sp~ new and v~ed ~nomic lat~g im v~u~ tots gathered: they didn't Memp~ M~to ~ey ~ote ~e~ive, you~-o~en~ s~ate- activi~ ~ scientis~ artist~ ~e p~cip~ were you~- match the ~age of self- ~ a big s~pe at ~efi~ ~ for ~o~. ente~mer~ engineers, ~gh- ~ en~eprenem ~d ~nom- abmrbed "yuppi~" ~es who "mon~t~e ~d homogene- ~tofic~ly, Coletta note~ end ~agem ~c development ex~ Web view ~mmu~ti~ ~ ~spos- i~" ~ the sameness of big 1~ govemmen~ have But what's ~e welmme mt desirers ~d commmty able co~odities to pick pr~uct ~ ~e d~l ~e- f~d on ~e nucleg to l~k ~e? How does a to~ ~v~ m~m offid~ ~d mong l~t for ~ek o~ ~afi- a~ of ~ ~ ~ey s~p ~ Mom, Da& ~e ~o ~ ~d achy ~aw ~e mobile ~d r~ta~atem filmm~em ~d fi~fion, outl~vor."Beau~enfi~" homeowner. ~ncem~ talented ~-to-34-ye~-olds hm~ reso~ce dk~to~ Maybe that's became ~e rea~ ~e ~esto "D~e to ~m of m~er~ ~ve who m add spi~ ~d ve~e to &a~ ~om ~ Be~ to yegg Creafives who ~o~da be ~erenl, not s~ply ~e woffi~ a~ut ~e ~d~e-ag~ i~ ~no~c ~? ~mafi, Baton Rouge to St. ~d ~let~ ~d ~eir civifi I~k-~e of ~o~er m~u- men who d~de on b~e~ ~d jmt what ~ ~ ~e hea~ ~ Toronto to D~u~ to en~eprene~ ~en~ ~w ~d ~.' [~ation~ "But nobody,' she of ~e~ "yo~ g~fives" ~y- Poffi~d ~d dfi~ ~ ~n. ~ted ~ren't of ~t ~. One h~ to think' ff the notes, "h~ focused on t~ way7 A loc~ b~e~ d~elop- ~e~oup ~t ~ w~ h~d- yegg creatives m~d even younger age coho~.' ~ge ~ sp~g, Memp~ set out merit group, Memph~ ly a gient~c s~ple ~ start ~ose revolutions ~ pro~o~ of yegg ~ople to ~d out. ~ ~ofida's p~- ~mo~om su~ ~e event fl~ou~ it ~ ~d ~t ~e"Gen ~efi~, w~t a ~ move ~ ~ek ~ ~d ~y ficipation and sparked by ~ou~ ~rate ~d fo~- X' now ~ i~ yegg ad~t yem ~-~e ~ of ~o~ don't move ag~. "So ~ ~ a Memp~' o~ ~ol ~le~, fion supponer~ a~p~g e~bi~ ~er m~ mn~m wo~d get broken up. ~d d~ golden demo~ap~c, ~d host ~d product of ~e pubic Coletta's ~gment ~at ~ ~ople who matted ~ m~rate smeness wo~d be ~ve a s~t ~pact on radio inte~iew pro~ Memphis could benefit ~e ~ ~d '~ c~e~ed, whe~er it's ch~ whe~eryo~ ~ ~ su~." ~at's clear is ~at the stor~for~goutl~re~em ~mg~t's~e,~e Memphis ~erees weren't or ~om~ ~e a W~-M~ ori~ spl~h of interest m jmt fea~e~ thek o~ nest l~d~g in New Orleans' yegg geafive~ple ~ dfi~ for e~ple, to favor a F~y, ~d maybe ~ost ~t- opment stretches a world ap~ ~ ~'geafive ~m" f~t~g~ ~d ~e i~,~e m~esto ~ cre-atives from s~e old s~ate~es ~e ~ c~t~e, ~e, m~t take personal subsides for foot.se ~mpa- ~ ~ ~ mmic ~ne, ~ ~d d~i~- res~mib~~ to reprove thek ~ ~ ~ ~ er~ ~vely nei~borhood~ co~unifies. ~ey need to Now, it may ~o me~ a ~ -- ~ ~3 ~br~t do~to~ open ~d mmmit ~e~lves ~on~y broadened ci~c role for yo~ > ~ ~ ~cen sp~, de~, ~d q~- to bang mc~, ~toler- p~ple ~ ~ ~d ide~fic ~ ~ ty pubic spaces ance. sprawl, pove~, bad a~roach~ ~t's ho~ so. ~ (http~.~ea~vecla~or~a s~ exd~ ~d ~e ~e ~ crobaffm~to.~. It's a ~mbi~oa, s~e ~ N~ Pe~ce's e-~ ~s To the sponsors' su~e, f~ ~ pm. It d~m't erie ~e ~p~c~co~ · ey ~ added sp~tu~ m pe~ of a han~¢L of ,~p, ~ 2~3. ~ W~g~n Post p~ of ~eir ~ea~ve ems~- pla~s suing w~e you~ W~ G~up. rem. ~d talent (~d weal~) ~ ~op~r~ed~ ~d q~c~y ~ey voted to dried ~om others -- a ~ ~e ~t ~s~y ~se I "embra~ ~vers~" ~ ~e idea p~ sp~t ~eady ~g doc- of ~ N~ · ata ~ of people of ~erent mented by s~ Robe~ or N~n's ~ WeeMy. William Rivers Pitt I Without Honor Marian Karr From: Irvin Pfab [iplab@avalon,net] Sent: Sunday, November 09, 2003 10:09 PM To: Iowa City City Council Subject: 111003fw..Without honor: Truthout.org, by William Rivers Pitt Without Honor By William Rivers Pitt t r u t h o u t I Perspective Monday 10 November 2003 Very nearly 40 American soldiers have been killed in Iraq since the month of November began. 33 more were killed in October, and 16 more died in September. The total losses, to date, creep towards 400. Few American citizens are aware of this, because the Bush administration has made it policy to deliberately hide these honored dead from the media. No cameras are allowed inside the Dover, DE facility that receives the ruined bodies of our troops. No cameras are allowed inside Walter Reed Army Medical Center to film the thousands of soldiers who have been catastrophically wounded in Iraq, nor are cameras allowed inside the facility at Ft. Stewart in Georgia where the wounded await treatment in conditions they have described as inhumane. No Bush official has been to a single funeral for any of the fallen, because that would bring unwanted publicity onto the ruinous casualties we have suffered, The Pentagon is doing its part as well. The term "body bags" was dispensed with during the 1991 Gulf War for the kinder, gentler euphemism "human remains pouches." The term has been changed again by the Pentagon. Today in Iraq, soldiers killed in the line of duty are placed inside "transfer tubes" for their anonymous, unnoticed trip home. American soldiers killed in Afghanistan were roundly filmed as they returned home, and the images of their flag-draped caskets were broadcast all across the country with broad and honored fanfare. President Clinton was present to welcome home the coffins of soldiers killed in Kosovo. Pictures of the coffins carrying sailors killed in the bombing of the USS Cole were also widely broadcast. President Bush Sr. was on hand to welcome the caskets of soldiers killed in Lebanon and Panama. The men and women killed in Iraq are afforded no such honor. They are a dirty little secret, hidden from view lest they cause political discomfort to the administration that got them killed. The Bush administration has taken to hiding from even the most obvious signs that, once upon a time, this war served their propaganda purposes. When George W. Bush declared an end to combat operations in Iraq aboard the aircraft carrier Abraham Lincoln, his televised image was framed by a massive banner that read "MISSION ACCOMPLISHED." At the time, the administration was more than happy to take credit for the banner. Full and specific credit, at the time, was given to Scott Sforza, a former ABC producer hired by the administration to work for the White House Communication's Director. Mr. Sforza can be credited for those snappy backdrops draped around Bush when he speaks, the ones with the catch-words repeated ad nauseam. Sforza spent several days "embedded" aboard the Abraham Lincoln to organize the event for full media effect, going so far as to hand-pick the Navy personnel to be displayed, and to choose the color of the clothes they would wear. Once it became clear that the only mission that had been accomplished in Iraq was the looting of the American Treasury, the unnecessary deaths of hundreds of American troops, the unnecessary maiming of thousands more, and the ruination of our reputation around the world, George W. Bush himself went out of his way to disavow any involvement with the braggadocio of the banner. In an October 28 press conference, Bush said, "The 'Mission Accomplished' sign, of course, was put up by the members of the USS Abraham Lincoln, saying that their mission was accomplished," And so the military, again, is left holding the bag for Bush, who has fled even from the presence of the memory of the fallen. Let us remember a few things. George W. Bush and his administration pushed for this war based upon the premise that Saddam Hussein was hiding weapons of mass destruction, and that he would give those weapons to Osama bin Laden for use against us. The public record for this is clear and unequivocal, as is the fact that this administration, day after day, connected the attacks of September 11 to the war on Iraq as a means to frighten the American people into supporting the war. There is, in fact, a page on the White House's own website (whitehouse.gov) entitled 'Disarm Saddam Hussein.' It can be found with a simple search, and contains the administration's central argument for why war was necessary, and necessary now, and necessary 11/10/03 William Rivers Pitt [ Without Honor Page 2 of 3 even without the supped of the international community. Again, the claims on this page are clear and unequivocal. According to 'Disarm Saddam Hussein,' war with Iraq was necessary because iraq was in possession of 26,000 liters of anthrax, 38,000 liters of botulinum toxin, as well as 500 tons of sarin, mustard and VX gas. For those of you without your calculators, 500 tons equals 1,000,000 pounds. Along with this, Iraq was in possession of nearly 30,000 munitions capable of delivering these chemicals. Beyond this fearful armament, 'Disarm Saddam Hussein' claims that Iraq and Saddam Hussein enjoyed the company of a variety of al Qaeda terrorists. Saddam Hussein was little more than the Mayor of Baghdad in the years, months and weeks before the war. He was trapped in his palaces, unable to launch even a single fighter in his own airspace, militarily emasculated by years of sanctions and weekly bombing raids by American forces, with vast regions to the nor[h and south totally beyond his control. It is these nodhern regions that enjoyed the company of occasional al Qaeda fighters, in places where Saddam Hussein dared not show his face. To say that Hussein was working with these terrorists is the same as saying Bush was working with the September 11 terrorists in the weeks before the attack, simply because they all happened to be in the same country at the same time. Beyond that, recall that Hussein was a secular dictator who spent 30 years killing every Islamic fundamentalist he could get his hands on. Osama bin Laden hated and despised Saddam Hussein, and called repeatedly for his death. The last of these calls came last February, when bin Laden publicly asked the Iraqi people to rise up and kill their Socialist infidel leader. The idea that Hussein would give any weapons at all to bin Laden is absurd on its face. It is even more absurd to imagine this transfer when greeted with the reality that the reported 26,000 liters of anthrax, 38,000 liters of botulinum toxin, 1,000,000 pounds of satin, mustard and VX gas, and the 30,000 munitions to deliver the stuff has absolutely, positively failed to appear. Iraq has been invested by the U.S. military, scoured by UNMOVIC weapons inspectors, and scoured again by Bush's hand-picked inspector, Dr. David Kay. Nothing, but nothing, has been found. Best of all is the fact that right now, as you read this, at this very moment, almost a year after the war began, claims that Iraq was seeking uranium from Niger for the development of a nuclear weapons program remains on this White House web page. The Niger uranium claim has been proven to be utterly fraudulent, based upon crudely forged documents so laughable that America stands embarrassed before the world because Bush used them to justify his war. Yet the claim remains seated on his website, even now. Not only has history proven this war to have been cynically contrived, but history has also proven beyond question that it was not necessary. Weapons inspectors could easily have determined that Iraq was not in possession of any weapons. A favorite talking point these days is that we had to invade because the United Nations was not doing its part. Hogwash. The Bush administration wrote Resolution 1441 from top to bottom, and pointedly included the words "Weapons Inspectors" in the text. The Security Council unanimously approved it. Many believe the U.S. wrote 1441 fully expecting Iraq to reject it because of those inspections, but Iraq turned that thinking on its head and welcomed the inspectors in. Immediately, the Bush administration began denigrating the very inspections they mandated with 1441, and began denigrating the United Nations for expecting them to live up to the bargain they authored. It was recently revealed that Saddam Hussein essentially surrendered on the eve of the war, throwing his country open to American forces in whatever capacity the Bush administration felt was necessary to guarantee that Iraq was not a threat. The Bush administration spurned this offer and rolled out the blitzkrieg, beginning a process that has killed hundreds of American soldiers, wounded thousands more, and consigned tens of thousands of civilians to die in the dust. Veteran's Day is upon us. A just world would see a long parade of veterans wending its way past the Vietnam Veteran's Memorial, past the Korean War Memorial, past every statue and plaque commemorating the service, and that full measure of devotion, given to this nation by men and women beyond number. In a just world, the parade would halt on the ground that, someday, will bear the names of the men and women who have died, and will die, in this Iraq war. In a just world, George W. Bush would be required to stand upon this ground and be spat upon by every person in that long, proud parade. In a just world, Bush would be made to visit the home of every American family who has had a beloved brother, sister, mother, father, husband or wife delivered to them in secret inside a "transfer tube." In a just world, he would be made to explain his lies, and further be made to apologize for using the wretched memory of September 11 against the American people in a process of criminal deception that got an incredible number of people killed. Then again, a just world would have left George W. Bush in the dustbin of history as a thrice-failed oilman who lacked even the courage to complete his stint in the National Guard while better men went offto war in Vietnam to die in his place. William Rivers Pitt is the Managing Editor of truthout, org. He is a New York Times and intemational best-selling author of throe books - "War On Iraq," available from Context Books, "The Greatest Sedition is Silence," available from Pluto Press, and "Our Flag, Too; The Paradox of Patriotism," a va#able in August from Context Books. 11/10/03 William Rivers Pitt I Without Honor Page 3 of 3 © Copyright 2003 by TruthOut.org 11/10/03 IOWA CITY POLICE DEPARTMENT USE OF FORCE REPORT October 2003 OFFICER DATE INC # INCIDENT FORCE USED 4, 60 10-03-03 3-51795 OWI At2er the subject was told she was under arrest she refused to be handcuffed and actively resisted officer attempts to place her hands behind her back as she kicked one of the officers. Officer used a hands control technique to handcuff her. When she refused to walk to the patrol car officers carried her. 20 10-04-03 3-52042 Public Intoxication While being handcuffed the subject tensed up and was told numerous times by the officer to stop resisting. After being handcuffed the subject started yelling profanities at the officer while trying to kick him. When the subject tried to spin around to face the officer the officer held him against a wall until additional officer arrived to assist. The officers carried the subject to the patrol car to prevent him from kicking them. 60 10-05-03 3-52371 Public Intoxication While escorting the subject from the Arrest patrol car to the jail the subject began to act aggressive and started to swing his elbows. After one of the elbows struck the officer in the chest the officer directed the subject to the ground to avoid being struck again and waited for jail staff to assist. 41 10-05-03 3-52386 PAULA Officer observed the subject attempt to carry a glass of beer out of the bar. She disregarded the officer's verbal commands to stop so he grabbed her by the wrist. When she attempted to pull away from him he placed her in handcuffs and walked her to the palrol car. 14, 60 10-05-03 3-52411 Disorderly Conduct After the officer observed the subject punch another subject in the face the officer attempted to pull him away while giving verbal commands to stop. The subject then pushed the officer away and attempted to nm. The officer caught the subject and direct him to the ground where he attempted to handcuff OFFICER DATE INC # INCIDENT FORCE USED him while the subject continued to struggle to get free. A second officer deployed a chemical agent and a hands control technique was used to handcuff the subject. The subject refused to get into the patrol car and the officer had to direct him into the backseat. 11 10-05-03 3-52430 OWI While investigating an OWI the officer observed a partially exposed handgun on the floorboard under the driver's seat. The officer drew his own sidearm and detained the driver and passenger until a backup officer amved. 24 10-05-03 3-52485 Injured Animal The officer responded to a complaint of a deer struck by a vehicle. The officer used his side arm to dispatch the deer. 36 10-10-03 3-53273 Public Intoxication After being advised he was under arrest the subject refused to be handcuffed. The officer used a hands control technique to place the subject's hands behind his back so he could be handcuffed. The subject then refused to get into the patrol car and had to be directed in by the officer. Once in the car the subject refused to put his legs in the car and attempted to kick the officer. The officer was able to force the subject's legs into the car and shut the door. 4, 58 10-11-03 3-53576 Fight While rtmning from officers the subject was exposed to a chem/cal agent. Officers were then able to direct the subject to the ground, but the subject ended up on top of one of the officers. After the other officer administered an active counter measure the first officer was able to free himself from the subject's grasp. The subject continued to fight with the officers and was again exposed to a chemical agent. The officers were able to use a hands control technique to get the subject's hands behind his back to handcuffhim. 7, 47 10-12-03 3-53847 Arrest Officers responded to a complaint of a person who was out of control and on an alcohol/crack binge. After placing OFHCER DATE INC # INCIDENT FORCE USED him in handcuffs the officers attempted to place him into the back of the patrol car. At this point the subject started banging his head on the doorframe, while saying he wanted to kill himself. The subject was restrained and directed to the ground to prevent him from hurting himself. The subject then started banging his head on the cement. The officers restrained his upper body until additional officers arrived. The subject was taken by ambulance to the hospital. 14 Officers 10-14-03 3-54032 Building Search SRT officers executed a search warrant at a residence in which they had reason to believe persons inside would be armed. The officers deployed, but did not discharge weapons assigned to them as SRT members. The residence was secured without incident. 56 10-15-03 3-54338 Assist other agency The officer assisted another agency with a traffic stop in which one of the passengers was wanted for murder. The officer detained the subject by drawing his sidearm until the subject was in custody. 55 10-18-03 3-54802 Fight in progress Two subjects were identified by a witness as having been involved in a fight. As the officer approached them they both fled on foot. The officer was able to catch one of the subjects after a short foot chase and direct him to the ground and handcuffhim. 25 10-24-03 3-56064 Injured deer The officer used his side arm to dispatch a deer that had been struck by a car. 5 10-24-03 3-56162 Building Search While executing a search warrant at a residence the officer drew his side arm. After determining the residence was safe he holstered his weapon. 31 10-29-03 3-57072 Disorderly conduct While giving the subject a verbal command to stand up the subject lunged across a desk to grab a pen. After the officer directed him to the ground the subject told the officer that he was going to kill himself by pushing the pen into his wrist. The subject OFHCER DATE INC # INCIDENT FORCE USED disregarded officer commands to release the pen and the officer sprayed him with a chemical agent. The subject then released the pen and placed his hands behind his back as directed and was handcuffed. 57 10-30-03 3-57321 Injured deer The officer used his side arm to dispatch a deer that had been struck by a car. 13, 60 10-31-03 3-57386 Intoxicated subject Officers had arrested a subject who was causing problems in the liquor store. While handcuffing the subject he became increasingly resistant and had to be physically escorted to the patrol car. A small bag of marijuana was found on his person and placed on the tnmk of the car. When the subject bent over and attempted to swallow the bag the officer went to get the bag out of the subject's mouth and was bit in the finger. The officer directed the subject to the ground after the subject grabbed the officer's crotch while being searched. While on the ground the subject continued to resist by kicking at the officers. The officer gained control of the subject after exposing him to a chemical agent. 12 Officers 03-23-03 ***3-14291 Building Search While serving a search warrant at a residence SRT members deployed weapons assigned to them as members of SRT. A flash/noise device was deployed in the residence prior to entry. The residence was secured without incident and a search was conducted. CC: City Manager, Chief, Captains, Lieutenants, Training Sergeant, City Clerk, Library Marian Karr IP12 From: Garry & Betsy Klein [the3rdiowa@mchsi.com] Sent: Tuesday, November 11, 2003 8:41 AM To: chuck_grassley@grassley.senate.gov Cc: cou ncil@iowa-city.org Subject: Support SAFT Act Dear Senator Grassley: Please support the proposed SAFE Act. Based on the information below, I ask that you consider this legislation because it, according te Common Cause "restores protections guaranteed in the Bill of Rights by fixing three sections ef the Patriot Act: 1} The PATRIOT ACT threatens your First P~lendment rights by letting the FSI go after your personal records without showing specific information that you are an agent of a foreign power. The SAFE ACT requires the FBI te first show that your records are really related tea suspected terrorist or spy. 2) The PATRIOT ACT puts at risk your Fourth Amendment right to be "secure ... against unreasonable searches" by allowing the government to secretly search your home, without prior notice and with no time limit on when they have te tell you they did it. The SAFE ACT will only allow this kind of search when there is danger to life, risk of destroying or tampering with evidence, or flight risk. 3) The PATRIOT ACT also threatens your Fourth Amendment rights by allowing the use of "John Doe" roving wiretaps with no name on the warrant. Marian Karr ~ From: Garry & Betsy Klein [the3rdiowa@mchsi.com] Sent: Tuesday, November 11, 2003 8:38 AM To: tom_harkin@harkin.senate.gov Cc: cou ncil@iowa-city.org Subject: Support SAFE Act Dear Senator Harkin: Please support the proposed SAFE Act. Based on the information below, I ask that you consider this legislation because it, according to Con, on Cause "restores protections guaranteed in the Bill of Rights by fixing three sections of the Patriot Act: The PATRIOT ACT threatens your First Amendment rights by letting the FBI go after your personal records without showing specific information that you are an agent of a foreign power. The SAFE ACT requires the FBI to first show that your records are really related to a suspected terrorist or spy. 2) The PATRIOT ACT puts at risk your Fourth Amendment right to be "secure against unreasonable searches" by allowing the government to secretly search your home, without prior notice and with no time limit on when they have to tell you they did it. The SAFE ACT will only allow this kind of search when there is danger to life, risk of destroying or tampering with evidence, or flight risk. The PATRIOT ACT also threatens your Fourth Amendment rights by allowing the use of "John Doe" roving wiretaps - with no name on the warrant. The SAFE ACT requires that the warrant name or describe the target and each place to be wiretapped, especially if no one is present when the wiretapping takes place." I have been involved with asking the Iowa City Council to write a letter on behalf of our citizens asking you to review the PATRIOT ACT which they did on October 27th. I believe the SAFE Act is a step in the right direction and in the spirit of the request. Thank you for your consideration. Garry Klein 628 2nd Ave. Iowa City, IA 52245 CITY OF IOWA CITY QUARTERLY INVESTMENT REPORT JUNE 30, 2003 to SEPTEMBER 30, 2003 Finance Department: Prepared by: Brian Cover Senior Accountant OVERVIEW The City of Iowa City's investment objectives are safety, liquidity and yield. The primary objective of the City of Iowa City's investment activities is the preservation of capital and the protection of investment principal. The City's investment portfolio remains sufficiently liquid to enable the City to meet operating requirements that cash management procedures anticipate. In investing public funds, the City's cash management portfolio is designed with the objective of regularly exceeding the average return on the six month U.S. Treasury Bill. The Treasury Bill is considered a benchmark for riskless investment transactions and therefore comprises a minimum standard for the portfolio's rate of return. The average return on the six-month U.S. Treasury Bill, as obtained from the Federal Reserve Bank in St. Louis, was 0.99% at 9/30/03. The investment program seeks to achieve returns above this threshold, consistent with risk limitations and prudent investment principles. Investments purchased by the City of Iowa City for the third quarter of this year were 31 basis points higher than the threshold. Rates on new investment purchases in our operating cash portfolio for the third quarter were approximately 47 to 78 basis points lower than investments purchased at this time last year. The federal funds rate is the interest rate at which banks lend to each other. The Federal Reserve kept the target of the federal funds rate at 1% for the third quarter of 2003. See exhibit A. The quarterly investment report lists investments by fund, by institution, by maturity date, and investments purchased and redeemed. New official state interest rates setting the minimum that may be paid by Iowa depositories on public funds in the 180 to 364 day range during this quarter were 0.60% in July 2003, 0.70% in August 2003 and 0.90% in September 2003. Federal Funds Rate 7.00 6.50 6.00 5.50 5.00 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 EXHIBIT A CITY OFIOWA CITY INVESTMENTS ON HAND DETAIL LISTING BY MATURITY DATE 6/30/2003 INSTITUTION INVESTMENT PURCHASE MATURITY INVESTMENT INTEREST NAME TYPE DATE DATE AMOUNT RATE VAN KAMPEN GOVT MUTUAL FUND 22-Jul-85 N/A 200,00000 VARIABLE NORWEST BANK SAVINGS 01-Dec-99 N/A 200,00000 VARIABLE IOWA PUBLIC AGENCY INVEST TRUST IPAIT 13-Jun-02 N/A 2,000,00000 VARIABLE IOWA PUBLIC AGENCY iNVEST TRUST IPAIT 16-May-02 N/A 156,484.07 VARIABLE IPAITNVELLS FARGO IPAIT 29-Nov-02 N/A 3,646,127.26 VARIABLE COMMERCIAL FEDERAL BANK CD 07-Feb-03 03-Oct-03 2,150,000.00 1.48 COMMERCIAL FEDERAL BANK CD 07-Feb-03 10-Oct-03 750,000.00 148 ~OWA STATE BANK CD 07-Feb-03 17-Oct-03 2,150,000.00 153 COMMERCIAL FEDERAL BANK CD 07-Feb-03 24-Oct-03 750,000.00 1.48 IOWA STATE BANK CD 07-Feb-03 31-Oct-03 2,150,000~00 1.56 COMMERCIAL FEDERAL CD 19-Feb-03 07-Nov-03 750,000.00 1.49 COMMERCIAL FEDERAL CD 18-Mar-03 07-Nov-03 750,00000 1.35 IOWA STATE BANK CD 19-Feb-03 14-Nov-03 2,150,000.00 1.49 COMMERCIAL FEDERAL CD 18-Mar-03 14-Nov-03 2,150,000.00 1.35 IOWA STATE BANK CD 19-Feb-03 21-Nov-03 750,000.00 149 COMMERCIAL FEDERAL CD 18-Mar-03 21-Nov-03 750,000.00 1.35 IOWA STATE BANK CD 18-Mar-03 26-Nov-03 2,150,000.00 1.35 WELLS FARGO SLGS 05-Nov-02 01-Dec-03 56,16400 1.80 UICCU CD 28-Mar-03 03-Dec-03 3,609,12000 1.38 COMMERCIAL FEDERAL CD 18-Mar-03 05-Dec-03 750,000.00 1.38 FREEDOM SECURITY BANK CD 12-Dec-01 12-Dec-03 518,740.00 3.80 UICCU CD 28-Mar-03 12~Dec-03 2,150,000.00 136 LIBERTY BANK CD 14-Jul-03 12~Dec-03 3,511,40000 1.07 FARMERS & MERCHANTS CD 28-Mar-03 19-Dec-03 750,000.00 143 IOWA STATE BANK CD 15-Apr-03 23-Dec-03 2,150,000.00 1.41 US BANK CD 15-Apr-03 02-Jan-04 750,000.00 1.26 IOWA STATE BANK CD 15-Apr-03 09-Jan-04 2,150,000.00 1~31 FARMERS & MERCHANTS CD 08-Jan-03 16-Jan-04 500,00000 1.97 US BANK CD 18-Apr-03 16-Jan-04 750,000.00 1.27 IOWA STATE BANK CD 15-Apr-03 23-Jan~04 2,150,000.00 136 COMMERCIAL FEDERAL CD 28-Apr-03 30-Jan-04 750,000.00 1.32 COMMERCIAL FEDERAL CD 28-Apr-03 06-Feb-04 2,150,000.00 1.32 COMMERCIAL FEDERAL CD 28-Apr-03 13-Feb-04 750,000.00 1.32 US BANK CD 28-Apr-03 20-Feb-04 2,150,000.00 1.23 COMMERCIAL FEDERAL CD 28-Apr-03 27-Feb-04 750,000.00 1.32 COMMERCIAL FEDERAL CD 12-May-03 05-Mar-04 2,150,00000 126 IOWA STATE BANK CD 12-May-03 12-Mar-04 750,000.00 1.21 LIBERTY BANK CD 10-Jun-03 19-Mar-04 2,150,000.00 1.71 LIBERTY BANK CD 10-Jun-03 26-Mar-04 750,000~00 1.71 LIBERTY BANK CD 23-Jun-03 02-Apr-04 2,150,000.00 121 FREEDOM SECURITY CD 23-Jun-03 09-Apr-04 750,00000 117 US BANK CD 22-Jul-03 16-Apr-04 2,150,00000 1.07 US BANK CD 22-Jul-03 23-Apr-04 750,000.00 1.09 FREEDOM SECURITY CD 22-Jul-03 30-Apr-04 2,150,000.00 115 LIBERTY BANK CD 13-Aug-03 07-May-04 750,000.00 1.23 LIBERTY BANK CD 13-Aug-03 14-May-04 2,150,000.00 1.27 LIBERTY BANK CD 13-Aug-03 21-May-04 750,000.00 1.23 LIBERTY BANK CD 13-Aug-03 28-May-04 2,150,000~00 1~27 WELLS FARGO SLGS 05-Nov-02 01-Jun-04 56,671 00 1 98 UICCU CD 18-Sep-03 04-Jun-04 750,00000 151 UICCU CD 18-Sep-03 11-Jun-04 2,150,000.00 1.51 UICCU CD 18-Sep-03 18~Jun 04 750,000.00 151 INSTITUTION INVESTMENT PURCHASE MATURITY INVESTMENT INTEREST NAME TYPE DATE DATE AMOUNT RATE UICCU CD 18-Sep-03 25-Jun-04 2,150,000,00 1.51 COMMERCIAL FEDERAL CD 03-Jul-03 01-Jul~04 977,42300 119 UICCU CD 18-Sep-03 02-Jul-04 750,000.00 1.51 UICCU CD 16-Dec-02 24-Sep~04 616,146.00 261 HILLS BANK CD 25-Feb-03 24-Sep-04 21,346.50 238 WELLS FARGO SLGS 05~Nov-02 01-Dec-04 57,231 00 2 16 COMMERCIAL FEDERAL CD 14-Mar-03 01-Dec-04 13,249,675.02 151 US BANK CD 08-Sep-03 25-Feb-05 961,187.50 190 US BANK CD 08-Sep-03 25-Feb-05 663,221.00 1 90 WELLS FARGO SLGS 05-Nov-02 01-Jun-05 3,957,84900 234 TOTAL $96,608,785.35 CITY OF IOWA CITY INVESTMENT ACTIVITY FOR THE QUARTER ENDED SEPTEMBER 30, 2003 INVESTMENTS ON HAND AT 6/30/03 104,308,785 35 INVESTMENT PURCHASE MATURITY INTEREST INSTITUTION TYPE DATE DATE RATE PURCHASES 6/30/03 TO 9/30/03 COMMERCIAL FEDERAL CD 03-Jul-03 01-Jul-04 1.19 977,423.00 LIBERTY BANK CD 14-Jul-03 12-Dec-03 107 3,511,400.00 US BANK CD 22-Jul-03 16-Apr-04 107 2,150,000.00 US BANK CD 22-Jul-03 23-Apr-04 1.09 750,000.00 FREEDOM SECURITY CD 22-Jul-03 30-Apr-04 1.15 2,150,000.00 LIBERTY BANK CD 13-Aug-03 07-May-04 1.23 750,000.00 LIBERTY BANK CD 13-Aug-03 14-May-04 1.27 2,150,000.00 LIBERTY BANK CD 13-Aug-03 21-May-04 1.23 750,000.00 LIBERTY BANK CD 13-Aug-03 28-May-04 127 2,150,00000 US BANK CD 08-Sep-03 25-Feb-05 1.90 961,187.50 US BANK CD 08-Sep-03 25-Feb-05 1.90 663,221.00 UICCU CD 18-Sep-03 04-Jun-04 1.51 750,000.00 UICCU CD 18-Sep-03 11-Jun-04 1.51 2,150,000.00 UICCU CD 18-Sep-03 18-Jun-04 1.51 750,000.00 UICCU CD 18-Sep-03 25-Jun-04 1.51 2,150,000.00 UICCU CD 18-Sep-03 02-Jul-04 1.51 750,000.00 TOTAL PURCHASES 23,513~231.50 REDEMPTIONS 6/30/03 TQ 9/30/03' HAWKEYE STATE BANK SAVINGS 18-Jul-97 N/A VARIABLE (1,500,000.00) UNION PLANTERS BANK CD 31-Oct-97 01-Jul-03 6.50 (250,000.00) COMMERCIAL FEDERAL BANK CD 10-Sep-02 01-Jul-03 1.90 (5,500,000.00) US BANK CD 30-May-03 01-Jul-03 1.24 (977,423.00 US BANK NA CD 23-Dec-02 03-Jul-03 1.30 (350,000.00 COMMERCIAL FEDERAL BANK CD 30-Jan-03 03-Jul-03 1.55 (800,000.00 UNION PLANTERS BANK CD 13-Jul-98 11-Jul-03 5.92 (3,511,400.00 US BANK NA CD 23-Dec-02 1 l-Jul-03 1.30 (1,750,000.00 US BANK NA CD 23-Dec-02 18-Jul-03 1.30 (400,000.00) COMMERCIAL FEDERAL BANK CD 30-Jan-03 18-Ju1-03 1.55 (700,000.00) US BANK NA CD 23-Dec-02 25-Jul-03 1.34 (1,800,000.00) COMMERCIAL FEDERAL BANK CD 22-Jan-03 01-Aug-03 1 57 (750,000.00) COMMERCIAL FEDERAL BANK CD 22-Jan-03 08-Aug-03 1.57 (2,000,000.00) COMMERCIAL FEDERAL BANK CD 22-Jan-03 15-Aug-03 1.57 (750,000.0( COMMERCIAL FEDERAL BANK CD 22-Jan-03 22-Aug-03 1.57 (2,000,000.0C IOWA STATE BANK CD 30-Aug-02 29-Aug-03 1.98 (961,187.5£ IOWA STATE BANK CD 30-Aug-02 29-Aug-03 1.98 (663,221.0¢ COMMERCIAL FEDERAL BANK CD 22-Jan-03 29-Aug-03 1.57 (750,000.0( FREEDOM SECURITY BANK CD 30-Jan-03 05-Sep-03 1.75 (2,150,000.0( FREEDOM SECURITY BANK CD 30-Jan-03 12-Sep-03 1.80 (750,000.0¢ FREEDOM SECURITY BANK CD 30-Jan-03 19-Sep-03 1.95 (2,150,000.0¢ FREEDOM SECURITY BANK CD 30-Jan-03 26-Sep-03 1.95 (750,000.0¢ TOTAL REDEMPTIONS (31,213,231.50) INVESTMENTS ON HAND AT 9/30/03 __96,608~785.35 CITY OF IOWA CITY INVESTMENTS ON HAND SUMMARY BY FUND GENERAL FUND 9/30/2003 9/30/2002 FUND INVESTMENT INVESTMENT TYPE AMOUNT AMOUNT ALL OPERATING FUNDS 85,030,201.35 79,286,087.18 GENERAL OBLIGATION BOND FUND 0.00 0.00 EMPLOYEE BENEFIT RESERVE FUND 700,000.00 1,450,000.00 BOND RESERVE FUND 10,878,584.00 11,691,091.50 TOTAL 96,608,785.35 92,427,178.68 CITY OF IOWA CITY INVESTMENTS ON HAND LISTING BY INSTITUTION 9~30~2003 9/30/2002 INSTITUTION INVESTMENT INVESTMENT NAME AMOUNT AMOUNT COMMERCIAL FEDERAL BANK 29,577,098.02 20,400,000.00 US BANK (FORMERLY FIRSTAR BANK) 8,174,408.50 0.00 FARMERS & MERCHANTS SAVINGS BANK 1,250,000.00 2,250,000.00 FREEDOM SECURITY BANK 3,418,740.00 6,118,740.00 HAWKEYE STATE BANK 0.00 5,800,000.00 HILLS BANK & TRUST 21,346.50 889,744.00 IOWA STATE BANK 16,550,000.00 13,724,408.50 IOWA PUBLIC AGENCY INVESTMENT TRUST 5,802,611.33 25,286,087.18 LIBERTY BANK 14,361,400.00 0.00 UNION PLANTERS BANK 0.00 3,761,400.00 WELLS FARGO BANK 4,327,915.00 1,618,463.00 U OF I COMM CREDIT UNION 12,925,266.00 12,378,336.00 US TREASURY NOTES AND AGENCIES 0.00 0.00 VAN KAMPEN 200,000.00 200,000.00 TOTAL 96,608,785.35 92,427,178.68