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HomeMy WebLinkAbout1998-03-25 TranscriptionMarch 25, 1998 Council Work Session page 1 March 25, 1998 Council Work Session 2:00 PM Council: Lehman, Champion, Kubby, Norton, O'Donnell, Thomberry, Vanderhoef. Staff: Atkins, Helling, Karr, Franklin, Yucuis, Schoon, Craig. Tapes: 98-47, all; 98-48, Side 1. Meeting Schedule 98-47 S1 Vanderhoef/We have those long holiday weekends and then we try to come back and collapse an informal and formal on the same day. It creates a lot of work for staff.... I would like to consider going Tuesday/Wednesday of those two holiday weekends... Informal on Tuesday and formal on Wednesday .... Kubby/I could do that Labor Day but I can't do Memorial Day .... I am teaching a class. Norton/I would like to go that way but- We could have a meeting then without Karen around. Kubby/Yeah, but is that fair?... Lehman/We could do the September if that is agreeable to everybody. Karr/September we go 8 & 9, right? Okay. Lehman/Is that agreeable to everybody? .... Champion/So the work session will be on Tuesday and meeting on Wednesday. Karr/I will send a revised one .... April 23rd, 4:00, would that be a time that the council could meet with Mr. Dover. Lehman/April 23, 4:00 .... Kubby/ Karr/...that was the suggested time... Dean is out of town. Kubby/I prefer 2:00 but I can do 4:00. This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 2 Champion/2:00 is really hard. Karr/So 4:00 is a go, April 23, Peninsula. It will be a special work session. I will send a revised schedule on Friday. Lehman/ .... set a meeting for next Thursday to receive a report from the SEATS negotiation team along with the proposal from the county and recommendations and respond to that. Karr/April 2. Lehman/Whatever time. Kubby/I am busy from 3:00 on. I can do it anytime before then. Lehman/Thursday morning? 9:00 AM? 8:00 AM? Champion/9:00 is perfect. Karr/April ....2, 9:00. (All talking). Lehman/And we will stop today at 4:50 PM so we can get to JCCOG. This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 3 Downtown Projects 98-47 S1 Atkins/Where we left off at the last meeting ....The Downtown Investment Initiative involved those four components: Downtown Streetscape .... that is on its way. Iowa Avenue Streetscape, you have made some decisions .... Iowa Avenue Parking Garage .... You have given us some form of direction .... We are on our way on those three elements .... The Library/CenterSpace is sort of where we left off last time. As I envision where we are, the thing that we need to hear council before we can proceed to discuss financial options is a commitment to the project: Library/CenterSpace as a project. Is it a good idea? Is this something we want for the community? .... I heard at least a majority of you say yes, this is a package of projects we want to see occurring downtown. Lehman/I think we all agreed we would be willing to put that on the ballot. Atkins/...is this something good for downtown. Not whether it was going to pass or not .... I think I heard you say yes... Champion/ .... I think it is something good for Iowa City .... Thornberry/I don't agree. I think it is good for downtown. I don't think it is necessarily good for the entire community .... Lehman/A majority of the council feels it is good for the community and it will go on the ballot. I respect your opinion, Dean. Atkins/With that in mind... it leaves us in the position of how do we pay for it .... from your memo. The project is estimated to be $22.5 million. The proposal you have in front of you recommends that it be financed by a local option sales tax. To do so would require two public votes. One would be a vote to authorize the debt. While the property tax would be pledged as the underlying foundation of the debt, it would be retired with a sales tax. And a second referendum would be the vote on whether the imposition of a local option sales tax would occur. I show that third component of the parking fees... preliminary analysis... Getting much more detail on the Iowa Avenue Parking Garage .... This one of more difficult to do... so many other variables... Any fees generated that are directly attributable to that particular project, you would want in some way to apply to help assist in the financing. So I think the question that you have before you is this proposal. The This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 4 options, I think, are pretty straight forward. You could choose to have one vote and do it by way of property tax .... Champion/Because there is also going to be parking under the Library- Atkins/There is no parking under the Library .... 100 spaces.. a Library/CenterSpace Parking Garage. Champion/Can we talk about the referendum?... Is there anyway that that underground parking could pay for itself?. Atkins/Yes, you could carve out the parking component and reduce the size of the project .... Lehman/Wouldn't separating those make it more complicated? .... The repayment of the bonds for the cultural center would be- We would use the one cent sales tax as a basis for those bonds. Atkins/No, the basis of the bonds would be the property tax. Lehman/ Kubby/ Atkins/It is abated by sales tax. We would not sell a debt instrument based on the sales tax. We would sell a debt instrument based on property tax which we choose abate .... Would it complicate the matters? .... No, I don't think so... If you are going to vote on a Library and CenterSpace, you can carve a parking garage component out. It is a free standing issue .... It is likely that we would have to consider how that might impact rates, so parking rates may have to be adjusted .... Lehman/You would not build CenterSpace without the parking underneath? Atkins/The parking is a component of the project. I will defer to Karen and Susan to take us through some of the history of those projects. It has been an integral part of the project sort of from day one. Champion/ This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 5 Atkins/If you use parking fees, you would not require a referendum on that component of the parking garage. If you are going to finance it by sales tax or property tax, thereby it requires a referendum .... Thornberry/There are approximately 100 parking places in that underground parking facility? Atkins/100. Thomberry/In a parking ramp, I understand the price of a parking space is about- Atkins/$12,000 to $14- Thomberry/If it were $14,000 per space, that would make this parking facility $42,000 per parking space .... Atkins/If it is a $3 million ramp, it is $30,000 a space ....It is substantially more .... Franklin/A parking facility underground... cost you double .... Thornberry/...$28,000 per space .... Atkins/That is the $2.7- Mike talked about... Kubby/I like the idea of keeping them together ....We may need to raise rates for other parking facilities... Atkins/Remember, you have other parking projects that may require that rate adjustment. Vanderhoef/ Norton/We might as well address the issue of sales tax versus property tax .... Atkins/If a majority of you are interested in a sales tax as a means to finance this project, I think an acknowledgment of that... Then you kind of move onto the other issues associated with the sales tax .... ballot issues, timing, distribution of the moneys .... Norton/I run a bunch of numbers myself. I look at the sales tax. The 1% producing is about $5 million which .....that would cost ordinary people somewhere between $4 and $10 a month .... This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 6 Lehman/Cedar Rapids estimates $136 per family. Norton/For a year .... The sales tax .... enable us to do some other things ..... also leave us something for the operating costs .... Atkins/ Norton/Transit subsidy, public safety issues... operating costs... direct property tax relief. .... It does a lot of things where property tax would only do one thing .... If you tried to retire the bonds only, the $22 million... that would take about $1.8 million a year which would, again, translate for the typical property owner, into something like $4 to $10 a month on your property taxes. The absolute increase to people would be about the same as the sales tax. Lehman/I think $63 for $100,000 was the estimate. Kubby/That is not the same as $4 to $10 a month. Norton/$4 to $10 a month on your property tax or $4 to $10 month on your sales tax .... That is my logic for coming down strongly for the sales tax kind of in the way Steve has outlined in the memo. Kubby/You are okay with all those operating costs in the sales tax? Norton/Yeah, they all got to be paid from somewhere. Lehman/First question... Are there a majority of council who are interested in using a sales tax to support not just but at least a portion of the cultural center/library? Vanderhoef/As capital or capital and operating? Lehman/I am just saying is there interest on part of council in exploring the possibility of a sales tax to help with the projects that we are talking about doing? (All talking). Lehman/We have an affirmative that there is interest in using the sales tax, with Karen saying no. This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 7 Atkins/Would you like me to walk through my proposal? Remember you have really significant flexibility ....The incurrence of debt is a 60% majority and the sales tax is a 50% .... Kubby/We had talked about the possibilities of giving the community a choice .... Champion/They will have a choice. Kubby/It matters what we state .... Atkins/As you package this thing together, I would encourage you to adopt some some of a policy position that explains that very issue .... Champion/What happens that the sales tax passes but the library doesn't? Thornberry/...indicate what that sales tax is for .... Atkins/Depends on how you word it. Vanderhoef/Do it as capital projects and examples of. Atkins/Let me take you through it... We have estimated that it would generate about $5 million a year .... 40% ... for debt retirement for GO bonds for downtown investment initiatives... that is very specific .... Estimated about $2 million would be necessary to retire $23 million worth of debt over 20 years .... strictly for the payment of debt. 10% or $500,000 would be pledged for day to day operating costs of the Library and CenterSpace... Library estimated costs for operation was about $150,000 for three people... CenterSpace... was about $170,000. So you got $320,000. These moneys would be earmarked for the maintenance and operations of these two facilities... Lehman/ ....if the operating costs... did not equal $500- .... Atkins/The intent was to give you some flexibility in there ....How you spell it out on the ballot issue will be very important .... This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 8 $500,000 for Human Service Agencies .... indirect property tax relief. We currently fund from the General Fund .... $500,000 would be available to the city council on an annual basis for distribution to the Human Service Agencies .... The $300,000 in General Fund moneys become available .... $100,000 in CDBG is now switched back to CDBG for those types of projects .... and we have additional moneys available for distribution .... that we are not putting out .... The next one is the public transportation programs for $500,000. The proposal would be the General Fund commitment to Transit would be eliminated .... rely on our current outside sources as well as the $.95 Transit Levy. The $.95 Transit levy is specifically earmarked for the purposes of running our public transportation system .... Also be able to reduce the Parking Fund transfer which improves the Parking Fund financial position... We fund out public transportation system substantially from a $.95 levy. It is very specific .... The next 10%, Public Safety programs. We are working on a Fire Department Master Plan ....Community Policing concept .... moneys that would simply be made available for application to those projects ....fire service, we would finance personnel from this amount .... Finally, the 20% is strictly identified as property tax relief... simply applied against the General Fund tax levy .... simply reduce property taxes .... Hopefully have direct and indirect property tax relief, funding of certain services which would allow us to remove the burden on the General Fund and at the same time, have the underlying financing .... O'Donnell/Steve, there is no mention here of water. Atkins/I didn't propose that. O'Donnell/What if we do propose that? Atkins/It is up to you. O'Donnell/I would like to say something, either retire debt or do something on the water bill. Thornberry/The water bills have more than doubled .... This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 9 Norton/ ....property tax relief is at least as virtuous. Thomberry/ Kubby/ O'Donnell/You are asking the people of Iowa City to approve the 1% increase in sales tax. I think you have to offer something back. Norton/Property tax relief.... Champion/You know what I like about the water reduction .... property tax relief... more fair than water rates... property tax is based on the price of your house. Water rates are based on how much water you use .... I think water has become a burden for young families .... fixed incomes .... I would like to see some component in here to reduce the water which would be much more benefit to low income people .... Kubby/Water and sewer rates, you have some degree of control .... O'Donnell/You can continue to conserve but your next water increase, your bill is going to go up. Thornberry/ Kubby/ Thornberry/ .... kids need bathing .... I don't know if anybody can have less water usage than you do ..... I flush my toilet more than that. I can't get by on minimum. Norton/ .... two of these items... human services .... public transportation... relieving things coming out of the General Fund .... Lehman/ Champion/ Lehman/We could conceivably apportion part of this to water bill that would be of an impact that would be at least as great or greater than the cost of the sales tax to the family .... average $136 a year. It is entirely conceivable that the water bills- The increase could be reduced by that much .... that applies to homeowners, renters... I This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 10 think one component that certainly would enable... community support is the water portion of it .... We have really gotten to the top .... Kubby/When you do water rate relief and because we have a declining structure for larger users, doesn't that disproportionately help them versus households .... Lehman/...if we didn't have the big users of water, we would all pay more as small users .... Proportionately the break would be the same. Norton/ Lehman/Do we have four people that want to include water? (All talking). Lehman/All right, sold. Steve I think there is consensus, with the exception of Karen, that water should be some component of this sales tax issue. Kubby/ ....assumption that the sunset clause .... Atkins/I proposed no sunset clause. Kubby/What happens after 20 years? Atkins/You would have to go back to the electorate and reappropriate it. Thomberry/ Kubby/One of my problems... have 3/5ths of it going to operating costs. That if the community does not renew this, we have placed the future community in a horrible position and I don't think we should do that ....$3 million of the $5 million is operating costs in the proposal .... Norton/ Kubby/...services are not going to be cut in 20 years .... Lehman/...if that money goes into the General Fund for services and then we re- appropriate the funds that we are currently using, then we cut those funds off, suddenly we are short. This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 11 (All talking). Norton/ .... no net deficit to those operating funds. You would have to go down now and go back up later. Kubby/At a minimum we are talking about $1.5 million for things we are currently doing and $1 million for property tax relief.... And we will probably be needing to provide different and more services within that 20 year period ..... Norton/I still think it is a safe risk. Lehman/ Vanderhoef/Public transportation, human services and safety. Kubby/We don't have to go to 1%, we could go to .5%. Thornberry/ ....could you say at end of X years, there is a sunset clause on half of it? Atkins/Sales tax. To my understanding, you can fashion it anyway you want. No community has done less than the 1%... We will have to check the law. Norton/I wonder if you could sunset half of it. Lehman/May I ask why we would want to sunset any of it? You can stop the tax at any point in time after one year .... Thomberry/The reason I am saying have as sunset clause on it is when you pay off GO bonds .... When you have to specify what the sales tax is for and what it is for has been paid off, isn't that an automatic sunset? Kubby/ Atkins/At the end of 20 years when the debt is retired, you would be out of compliance .... There is a provision of the law that you put it back on and can reappropriate it in some fashion for other projects ....If you are going to amend the language, it would require a referendum. This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 12 Vanderhoef/...write it... that at the end of those capital projects ....interested in water relief particularly for X number of years .... Atkins/...final debt schedule will conform to downtown projects selected .... Assume that if you want to invest in other downtown projects, you would be substantially in compliance with this as I have proposed it. Lehman/Could you not also say that proceeds from sales tax will be limited to capital projects? .... applied to capital projects which shall include .... Atkins/Yes, you could do that .... (All talking). Champion/If you have this tax for 20 years, it is going to be easy to pass the second time... Kubby/We are setting it up to force the community to renew it .... Norton/The alternative would be to put it in at a smaller percentage .... Kubby/Would anybody be interested in not going for the full 1%? .... O'Donnell/No. Norton/That would leave nothing for property tax or water relief.... Lehman/ O'Donnell/You just have to give something back. Lehman/The question really is how do we want to fashion this? We agree that a sales tax on the ballot would be a good idea. How we fashion this thing... determine... public support .... We have said we would like to identify water. Have we said we want to identify the capital projects that would include but not be limited to CenterSpace and downtown improvements. Norton/Yes. This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 13 Thomberry/I don't want to mislead the public .... I think we have to specify specifically and not just generally say downtown improvements. O'Donnell/You have to specify. Norton/...there must be some flexibility. Lehman/Be limited to capital projects .... (All talking). Norton/ ....water rates... Atkins/...I don't recommend water... If you say you want water, we did a very quick calculation and it appears that the rates would probably be pretty close to either frozen or very small .... Vanderhoef/Freezing at this point is acceptable to me... Kubby/What would we take off this list to insert water rate relief?. Norton/The property tax relief. Kubby/We need to make that very explicit... not giving property tax relief. We are giving water rate relief.... There are no property taxes going into water. Karr/The ballot would have to address that. The ballot would say zero because property tax relief has to be specified... 0% property tax relief would be stated. Lehman/ .... in effect, these project... paid for by sales tax instead of by property tax and the next result would be .... no increase .... Norton/It looks to me there is $1.5 million basically in property tax relief in those three categories .... (All talking) Lehman/One at a time. Kubby/ This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 14 CHANGE TAPE TO REEL 98-47 SIDE 2 Champion/Karen, I don't care what the water rates are. I can pay the price no matter how much they are. My concern is for people with families who are on smaller limited incomes. Water becomes a major expense for them. Kubby/And we have a limited income program and we have conservation income. Champion/Those low income do not meet the needs of a lot of people .... Kubby/That means we have a problem with our rate structure .... Vanderhoef/I had a call this week... right now their house payment and their water bills are meeting .... Atkins/I thought you decided water already. Lehman/I think we decided water. Norton/I would like to hear a comment. You did not include water, was that for some particular reason? Atkins/I think it is a user fee. You have it substantially under your control. We have extremely low water rates for many many years. We are doing some extraordinarily expenses ....generational issue ....This is not something I would incorporate into the plan ....Folks ....property taxes are tax deductible and water bill is not. Kubby/ Atkins/I can fashion this in a different fashion so it doesn't say zero .... I would remind you, we have financed this government... from property tax and it only takes an act by the state legislature to take away a big hunk of our money right now .... Lehman/Why don't we identify the areas that we would favor earmarking a sale tax for? We have said water .... This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 15 Thomberry/I think there ought to be some property tax relief.... sales tax... food... medicine... no taxes on that ....water is a necessity ....I am favoring property tax relief.... and water relief.... Atkins/Property tax relief... You can take the human services, public transportation, public safety, throw them out and put 30% property tax relief and reserve those decision for yourself.... Norton/Call them property tax relief. .... Atkins/I don't recommend that .... (All talking). Kubby/ O'Donnell/ .... I wanted water and property tax .... Set a priority here... I believe you have to give them something back .... Norton/ Thornberry/...my first choice... is not even put it on the ballot. Don't even consider a sales tax. Norton/We are over that. Kubby/ Thomberry/I have been against the sales tax since day one .... Kubby/So it was 5-2 on that first question today .... Thornberry/...I just don't want anymore taxes. Vanderhoef/10 for property tax relief and 10 for water. I will go with that one. Norton/That would be fine. Split that 20 to 10/10 .... This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 16 Atkins/Okay, 10 for property and 10 for water. All right .... You are going to call this property tax relief and you are going to call it water rate or water relief. Your water rates will still go up .... Vanderhoef/ Champion/How do people feel about not paying in the operating costs of the library? Atkins/I would remind you... adding an additional cost to the General Fund... Kubby/We would reduce property taxes on one hand but we would push it up on the other hand .... Vanderhoef/We are removing from the General Fund our current commitment to Transit .... put operating of the Library back into the General Fund... Kubby/Shell game .... Has to be easily explained and understood by people .... Thornberry/ Champion/If could take the day to day operating costs of the library out of there ....give us another $.5 million for water of property tax relief. Atkins/...advise you political .... kind of two options... tax this buys this big thing .... other is preparing something almost in the form of a shopping list... If you expect these projects to be approved and then financed, I really believe it has to be simple, straight forward and folks understand what they are purchasing with their 1% .... water rates .... understands .... now I know what I bought with my sales tax .... Going to have to amend some of these others... If that is really what you want to do with water, then sell it... Lehman/We said we like water .... tax relief.... number of items... do we want to include human service agencies? (All talking-yes). Atkins/I did not say housing .... Lehman/We have a rather significant amount of funding we do get for housing .... I guess I am just trying to get the laundry list .... Do we agree on human service agencies? This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 17 Thomberry/I think we can live within what we are doing now .... I don't think we need an additional .... Norton/I thought this is to replace what we are doing. Lehman/That is the shell game. You are taking the money that we had in human services and make that available for something else .... Kubby/...next FY .... it is an additional amount... this is an increase .... Atkins/10% is applied against $5 million ....there is an elasticity to sales tax revenues. Those numbers will increase .... Norton/... I think we do have a responsibility to make some moves in this direction .... We have some initiatives we are trying to consider.. tenant-owner, land trusts... (All talking). Atkins/If you are going to do something for housing, you owe it to the public to call it that. Kubby/Could call it housing and human services? Vanderhoef/We could have a category that is just services ..... Atkins/Dee, I said public transportation .... Champion/ Norton/Public safety ....community policing, accreditation, PCRB, juvenile delinquency ....all of those things... fire protection ....also recruits people to support the bond issue .... Thornberry/We are doing all of these things now. All you want to do is fund these things more .... I don't know... I don't think so. I think we can fund what we are doing now... and have a budget and live within that budget. I don't think we need to increase all of these things .... Norton/ This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 18 (All talking). Thornberry/Live within our budget on the things that we are already funding .... My list... cultural center/library ....water relief.... and maybe...property tax relief.... capital improvements .... Lehman/I don't think you want to specific identify or limit them. Norton/It would be wise to have some options that are not necessarily downtown implied .... Thornberry/ O'Donnell/Dean, you are not on a fixed income. Thornberry/Property tax and water and cultural center/library and capital improvements. Kubby/What about the new operating for the cultural center? Thornberry/Put it in .... Kubby/Can that be worded together, capital and operating? Atkins/We have them separate now as 40% and 10%. I assume you could make it 50% .... Kubby/ Thornberry/ Champion/You can't put them together .... Atkins/Practically speaking, you can incorporate that .... Under public safety ..... I am making the assumption that if you ever wanted to build a new fire station... You could use some of this cash to buy capital asset as well as finance the fire fighters .... You can do that. The wording is very much up to you all .... The public needs to understand what they are voting on .... Vanderhoef/ .... I would like to keep in unencumbered with operating in that 40% .... I want to be sure that we have capital projects in there .... This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 19 Lehman/We have about 35 minutes. Thomberry/Karen... If we had to put it on the ballot, your input would be helpful. Kubby/GO bonds for library/cultural center... some limited operating amounts for the new staff.... housing is a key issue ....I don't think water should be on there .... property tax relief. Norton/ Thomberry/...how would you like to see it split? Lehman/Cautious about earmarking a lot of this for operating expenses .... I don't think we should have a substantial portion of this go toward operating expenses .... Have to go along with operating costs of the cultural center .... Wording should include the cultural center but not be limited to the cultural center .... money should still be available for capital projects .... Interested in water rate stabilization .... tax relief is appropriate .... Rest of it I see going into capital projects .... If we pass the cultural center without a sales tax, the taxes on your house is going to go up about $126 a year. If pass the sales tax, it doesn't go up .... Money spent on capital projects from sales tax prevents the increase in sales taxes that are used to retire bonds .... Kubby/But it will cause you to do more capital projects than you would have .... Vanderhoef/When we are talking about capital projects .... thinking about maintenance... parks or streets .... There are a lot of things... taking care of our infrastructure that are capital projects... Thornberry/ Kubby/I kind of disagree that we can't find the operating expenses in the current budget for the library/cultural center ....That is about 1% of our General Fund ....Why can't we challenge ourselves ....? Norton/ ....It is getting tougher and tougher .... Kubby/We didn't cut things... We didn't do any real cutting... We shifted out framework of how we view our budget .... Do we operate any department differently?... I believe that for 1% of our General Fund, that we could some operating differently. This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 20 Atkins/We did .... reduce the growth in the operating support expenses. We pulled those down... Thomberry/Had a big push on each department cutting X number of dollars from their department... Who has an idea? Right now there are just a few things out there and human services wasn't one of them. O'Donnell/Water, property tax, library/cultural center .... Kubby/Maybe we should take a few minutes and each person write them down, collect them .... Lehman/If we put a portion of this sales tax to debt retirement .... Would that give us the flexibility of doing a cultural center? .... applying them to any bonds .... Bottom line could result in tax relief and it would give you a certain amount of flexibility .... Kubby/...very important to have the word multi-use facility, library, CenterSpace, something like that. Lehman/! agree. Kubby/So when people go in there, they see those words. Atkins/Also... keep in mind... proposed property tax relief.... clearly a political decision. Property taxes in Iowa are controlled by the state legislature. You don't know from one day to the next what they are going to do .... Understand that that is something out there that is beyond your control. The sales tax is a 1%. It is based upon economic conditions. It is elastic. It is going to move with your economy .... There is a discomfort in using a sales tax ....In Iowa... state legislature makes the call on property taxes. Kubby/If we were to put something on there about operating expenses, what kind of place does that put us every year? .... Atkins/I would think you would make certain policy decision ..... Kubby/Could we have a resolution like the Hotel Motel Tax that on the ballot is says operating expenses for a certain amount of money. But then we could have a This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 21 resolution that kind of says what those moneys, percentages that could be changed council by council but it would give staff direction in budgeting. Atkins/It is not unlike your Parkland Acquisition Fund. Kubby/ Thornberry/...operating expenses... sort of absorbed... used... Atkins/ ....it doesn't have to be used but it is available... (All talking). Vanderhoef/A whole lot of things that we all think have them importance... list them individually... fund them over a long haul. What I would like to suggest... reserve fund... be 5% or 10% that gives every council hereafter at least some moneys for reserve .... It could be used out of the General Fund... It would allow future councils some decision making in how this money .... (All talking). Vanderhoef/You don't have to spend it .... Kubby/Our reserves have gone down a little bit. Vanderhoef/ Atkins/ Vanderhoef/ Lehman/Have we all written down the kinds of things you are going to write down. Kubby/I would like to hear more discussion... What are people's feelings about these two very different strategies... short and simple or longer and explicit? I want to hear some discussion .... Norton/Karen, I don't see how we can avoid some degree of specificity .... I think we need to allow something for other capital improvements .... leave something flexible for other capital improvements .... This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 22 Kubby/ Norton/ .... got to be something in the relief category .... Four categories so far: Library, operating and capital; relief, other capital improvements... something in for housing and human services .... Kubby/You are saying a larger list is a good political strategy. Norton/In between .... Atkins/I want to remind you on the housing issue under human services... It also relieves the CDBG program... which means housing could be switched to a CD program .... [All talking - Council members write lists for sales tax use- See Flip Chart.] FLIP CHART: Water relief Library/CenterSpace Property tax Capital imp (miscellaneous) Public safety Downtown improvements Public transportation Community enhancements Bond retirement Operating expenses Housing fund Human services Atkins/The only thing I see substantially different up there from the proposal- Kubby/Is the housing fund. Atkins/Yes .... intended that my human service, to be able to shift money over to CD, creates some housing opportunity. Norton/We have got the same shopping list that we had before .... Lehman/The packaging .... This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 23 Kubby/We are back to Steve's proposal. O'Donnell/Steve's proposal plus water. (All talking). Norton/ .... recognized that the Library/CenterSpace thing at 40% and some kind of operating costs .... are hardly avoidable... Agreed there should be something in for other capital improvements .... Kubby/One of the things we talked about .... CHANGE TAPE TO REEL 98-48 SIDE 1 Kubby/What kind of community support is there for what we tentatively decided and make changes?... Atkins/...How do you want me to take this out for public education as well as public comment? Norton/We have got to get our distribution straightened out before we do that. Thornberry/You can't put out all of that .... (All talking). Champion/ Atkins/Would it be- The most dramatic change is water. That is the biggie you added .... What if we were to go back and try to write- I am going to continue to use my proposal as a basic but expend the definitions, do a little more narrative work ....I can do that for you. I think the most substantial thing that you pointed out here was water and the extent to which you want to go with water is going to have a big bearing on what is left over for you. Thornberry/I would like to see a majority of four votes on each one of those items. Lehman/ This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 24 Atkins/You must go out for the referendum on the project that you would like to retire the debt with anyway. For example, the law says that if you are going to build a fire station with debt beyond the $700,000 cap, you have to go to referendum. You may retire it with sales tax but you must get it approved to incur the debt. If you want to say debt retirement for the purposes of covering Hwy 6- You cannot do the library/cultural center. Lehman/But you could include but not be limited to- Atkins/ ....the definition is going to be a really complex one. Norton/I think you ought to come back to us and tell us- I want to know how much property tax or water- What kind of percentages are necessary? What can you get out of $500,000 for either water or property? ....I do think we need to be very specific about most of these categories .... Kubby/We have a time constraint here, too .... We would have a resolution on at a council meeting in May ....If we are going to put this out to the public, we need to finalize it soon .... Atkins/I think there are several things- Norton/ Atkins/I would not jump ahead yet. The questions I have here to pose to you is the ballot issue... Then when you frame the ballot issue, I think you have to have some sort of a resolution that expresses your intent of that ballot issue .... express your policy position of what you mean by that... Then I think you have an obligation to kind of publicly say we intend to place this matter on the ballot .... allows us to contact the other communities... because they have to go through their process .... You then must give us the go-ahead... we will put together some sort of a public information, public comment process and be willing to receive those public comments .... Then. once you have got that together, you have to think about the date of your referendum .... Right now your policy position is you want this in November. I can tell you... They are due in June... I suspect you will here from the City of Coralville some reservations about November .... too soon. There are a bunch of questions you have got to answer but I do think you need to come pretty close on a ballot issue so you can say here is what we are thinking about. This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 25 Lehman/One other question... Are we willing to place the library/cultural center on the ballot and fund that through revenue bonds without a sales tax to help pay them off?. Kubby/Yes. Norton/Yes. Thomberry/No. I don't want that to be funded by property tax, personally .... Lehman/That will be a discussion for another day but that is a decision that has to be made. Vanderhoef/ Atkins/We are right back to if you choose to finance it with a property tax, you got to go into your General Fund for operations .... Dean says no, Karen is willing to make budget adjustments, others have different opinions. Point made is that the 8.10 is still limited. Champion/ .... what if Cedar Rapids doesn't pass theirs .... ? How does that affect people like car dealers? Lehman/It doesn't cars .... Atkins/Car dealer is a use tax... It is not a sales tax on cars. So it does not affect it... It is big ticket items, washer, dryer, jewelry... Karr/Connie, maybe you and Mike don't have that booklet from the last one... Q. and A. type of things .... We have copies in my office. Thomberry/If Cedar Rapids doesn't pass theirs, we don't have a prayer. Champion/I think you are wrong. Thornberry/ (All talking). Lehman/It is time, folks. This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598 March 25, 1998 Council Work Session page 26 (All talking). Karr/You have a meeting, April 2, 4:00 .... Atkins/I have a SEATS agreement to get together as well as this .... I will get back with you. Karr/We may have a need to start the April 6 work session early because of your agenda. Is there any problem with starting at 6:00? Council/No. Karr/6:00 on the 6th. Atkins/Thank you. Meeting adjourned: 3:45 PM This represents only a reasonably accurate transcription of the Iowa City council meeting of March 25, 1998 WS032598