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HomeMy WebLinkAbout1998-05-14 TranscriptionMay 14, 1998 Special Council Work Session page 1 May 14, 1998 Council Work Session 9:05 AM Council: Lehman, Champion, Kubby, Norton, O'Donnell, Thornberry, Vanderhoef. Staff: Atkins, Helling, Karr, Dilkes, Yucuis, Craig, Franklin, Schoon. Tapes: 98~70, all; 98-71, Side 1. Lehman/...meeting Monday night... talking about the downtown... preliminary construction plans. We will all see this as part of regular council work ....If there are going to be three or more of us at that meeting, Marian needs to know... This coming Monday night. We will get all of this material anyway .... I do not plan to attend .... Karr/As long as there are four not going... Lehman/All right, we will not have three .... Vanderhoef/Other one I want to ask about is this one .... Press Citizen discussion ....Is that going to be one of those cases where there will be several people? Karr/No, because you are not going to be acting on that .... (All talking). Lehman/Steve, let's get started on the sales tax. Local Option Sales Tax Discussion 98-70 S1 Atkins/I prepared and submitted to you a memorandum... We did some additional research .... I provided you a chart that indicates the history of our proposal... Special guest (Coralville Mayor Jim Fausett) .... If there are technical questions- What I tried to do with this memo was boil down 10-12 pages of the stated code... translated into English for you... I jotted down what I thought were the issues that had to be identified, ballot proposition ....Date of that election... You will have to have a resolution officially calling the election... I put down a policy position which is sort of a summary when we place this on the ballot, this is the expression of the intent of the city council. Ballot language can be as specific or as general as you would like it to be ....I did run that by Ken Haynie, our bond counsel, and he found it satisfactory. Lehman/I think one question that is critical .... That is how we view the library as a component of the sales tax .... We can put the library bond issue and the sales tax This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 2 on the ballot in November...A sales tax issue with the funding going 50% for the library .... Funding would go to the library... makes it a library issue... funds the library, it requires a 51% majority to pass .... Gives the library folks an opportunity to get their project on the books. It funds the library if it is passed .... But it is a library issue .... The question is, do we .... Are we willing to put the sales tax on the ballot in November with the library as a 50% portion of it? If it passes, we then build the library. Champion/Yes. Norton/The holds the library hostage to the sales tax .... Lehman/...I think we have married the two. Thornberry/I don't agree. I don't think they are married. Lehman/We have said we will not build the library without the funding for it and that will have to come from the sales tax. Thornberry/Say people agree that roads, etc. are very important to them and the marry the tax with the library/cultural center and they don't maybe want to support that as much as they do roads. So they don't pass the sales tax. Lehman/Then we put the sales tax back on at a later time .... Norton/There is a contradiction... Marian's notes from April 20... Council agreed to place the Library/CenterSpace and sales tax on the same ballot in November and proceed with the sales tax irrespective of whether or not the library referendum passes. Steve's memo says just the opposite of that. Lehman/I think we had information from bond counsel and legal counsel that if in fact the library bond issue would pass and the sales tax would not pass, we would then be required to sell bonds and build the library without the funding and a majority of council has also said that we will not build the library without a source of funding .... Norton/ .... they should be put together .... It locks it in... Something is going to have to be done about the library situation... going to cost some money... looks like we have to have the sales tax .... Makes it a little sticky there .... Karr/Between the two elections? Norton/How soon can you go back for another sales tax vote? This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 3 Karr/ ....there is a provision .... Norton/...come back for six months .... Kubby/... if you have them on separately, you know which one passed pretty clearly .... You can design a campaign the explains two ballot issues .... Let people make the choice .... Thornberry/If we put the sales tax on first without the library .... And then have the library vote. Say the sales tax does not pass... then few months...library board .... Then they have a vote on the library/cultural center, say that passes. Then we are going to we... got the time... the time that the library passed... six months... put the sales tax back on for a second vote. Dilkes/(Can't hear). Thornberry/From the time it fails, you got six months before you can put it back on again .... Kubby/Why pay $25,000 three months apart...? Thornberry/ Kubby/ Thomberry/ Kubby/You are saying there are two votes for sure .... I would rather spend $25,000 on one of them .... Thornberry/Two different questions on the same ballot, Karen? Norton/Yeah. O'Donnell/...library .... Also operating revenue, I just don't think it has a chance. I think if we show we have a means to pay for it, I think it has a fighting chance. Norton/ .... we would put a library issue .... It is not strictly a library referendum .... It is a sales tax referendum. Champion/I think you have got a couple of things going for you here. 1- We have already agreed that we are not going to build the library without the sales tax .... This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 4 Not going to fund this ....You have a group out here who is anxious to build this library and cultural center ....Will be great for the community... You are getting the bulk of the people who are really going to work to pass the sales tax... mutual beneficial thing to do both together.,. one issue... one vote, one issue. Thomberry/I don't think that will pass. Lehman/That is the public's choice. Norton/ ....you might still pledge property tax to back it up. Atkins/That is the dual source bond .... Norton/ Atkins/...legislature... I wrote you a memo some time ago about local option sales taxes and the state legislature .... Directly and indirectly, they are encouraging communities to pursue and adopt the sales tax legislation .... The dual source is really a matter of determining that we can pledge the property taxes and underlying finance without a bond referendum vote on by reverse referendum, I just think that is clearly the intent of the legislature. Kubby/ Atkins/...We recently sold some GO for water... Thornberry/looks like we have three options here... combine the two in one question. We can have one election and have two questions on the ballot or we can split .... There have been some question as to are we going too quickly on this sales tax question with our neighboring municipality .... Vanderhoef/One of the things that impressed me... Jessie Singerman .... She spelled out the possibility that it needed to be delayed a little bit .... Concerns of Coralville .... They would understand a short delay .... what is best for the entire community at large .... I am very interested in keeping two issues not as a single ballot ..... Norton/When you present the sales tax, what projects would you list?... Would you say anything about the library in that sales tax vote? ....You could say capital projects. Atkins/Let me help you on ballot language. Ballot language is reasonably discretionary on your part. The first point must show the property tax relief in reducing levy and we say zero. Now we know full well that the intent of ours is to still provide This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 5 property tax relief. By law you have to show that .... The language that I show up there, I thought expressed what I thought your policy position was the last time out. You may amend it .... You owe it to the public to say if it passes, our intent is this .... I want to talk about that second ballot issue because... I don't know how that would work. Kubby/This language says public buildings in it. It is our intent up front to build a new library and to use the sales tax. We have an obligation to be direct and clear about. Then there is no need for the second ballot .... That is what we should be saying. Vanderhoef/If the public library and cultural center is listed specifically and it does not pass on its own ballot, we have no requirement then to continue .... Arkins/If this passes with this language, that is an obligation on your part to do those things .... The rest of the language is much broader... Then if we go to this second ballot, the second ballot is a ballot proposition to do what?... What you are intending to do is seek public approval to do the Library/CenterSpace project .... If you are seeking that approval, is that 50%? .... You are not selling debt. Dilkes/You are talking about an advisory- Atkins/It is virtually an advisory referendum. Dilkes/That's allowable .... Second vote... go into debt for the library .... Atkins/You have the authority to have capital improvement debt paid for by sales tax in this ballot proposition. Norton/ Atkins/ Norton/Could we do anything less than the present library plan? Atkins/Certainly ....Because the language says a new addition to the library .... Kubby/ Norton/I am trying to make sure that we have the ability to do other projects without going back for some other permission to spend the money... without another referendum. This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 6 Karr/I think maybe the distinction is the difference between that 40% figure there locking you into a category of items, not specific to one. Should another council, after passage of the sales tax, wish to choose from the same category a different priority, there is no commitment of those funds to the library unless you enter into a second election to sell bonds .... Unless you change that language to dedicate it to the library, if you leave it in that group, you can't bind other councils to spend the money that way. It is within that category. Kubby/ Karr/ Norton/If we go that one route .... We would be well advised to put more than 40% into that first category because right now you are not leaving enough room to do some of the other projects... It would be wise to increase that 40% to 60% so that you would have more flexibility to do some upfront projects .... More room in there. Atkins/I am hearing two opinions .... You have flexibility in your ballot language ....You can drop off certain language .... Lehman/...we are not making a decision as to whether or not to build a library. The public is going to make that decision .... Also said we will not build the library if we don't have the funds to operate it. Seems to me that we have a commitment to the library board to put this on the ballot .... It becomes a single issue... We give the public an opportunity to vote... Are we willing to put this on the ballot and let the public tell us we want a library and to fund the library we are willing to have the 1% sales tax as a single issue? Norton/I certainly am... emphasize not only the library but some of these other things .... Put right package in there with sufficient room to do some capital projects .... Virtuous .... Lehman/Is that an agreement? Norton/...I have been known to wonder... Champion/...greatest impetus to pass this sales tax is the Library/CenterSpace .... Lehman/...Is it going to be a single question, a sales tax issue with 40% of that revenue committed to the library? ....We have made it one question by saying we won't do it without the sales tax. This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 7 Thornberry/If we were not even thinking about a library cultural center, would we be thinking about a sales tax? Norton/Possibly. Thomberry/Then it is two questions. Kubby/The only reason we started talking about it was because of the library. Thornberry/ Kubby/ O'Donnell/ Lehman/If we run this as a single issue and the public says no, did they say no to the library or did they say no to the sales tax? But we do have, we can run the sales tax in another six months without the library .... What do we want to do? Thornberry/I think there should be two questions. Norton/Dean, I think your first question about the sales tax... we have a number of changes since the library discussion started... property tax thing has gotten tighter and tighter ....! think the sales tax might have very well come up even without the library. Kubby/ ....there are three people, Ernie, Connie and Dee Norton, who have said yes, one issue .... Lehman/Are we willing to do that? One question with the revenue dedicated to the library? Thomberry/ Lehman/Do we want to tie these two and make one question? .... Thornberry/I am going to fight against it. Norton/You are going to go with whatever the majority decides I assume .... Thornberry/I cannot believe you guys don't understand how right I am .... (All talking). This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 8 Vanderhoef/I have trouble with it also .... O'Donnell/What if the Library/CenterSpace passes and the sales tax doesn't? Thornberry/Then you put the sales tax back on in six months .... Property taxes go out of sight .... O'Donnell/That is my problem. If we are going to pass one, I would like to have the means there to pay for it. (All talking). Thornberry/ ....One election for sales tax. A second election for library/cultural center .... O'Donnell/We are going to say... we propose to pass the local option sales tax and this is how we are going to spend out money .... It is clear, spelled out. Thornberry/ O'Donnell/ Norton/ Vanderhoef/I am following along here with Dean because I am not clear how strong the support is for any of these projects and what I want to do is leave it a little bit more general on the sales tax and then be sure the public has the opportunity to vote on that separately .... What you are saying is a 50% vote... and it is tie together .... I am saying that I don't want to tie it so tight like that... If we do just the sales tax one and it fails, we aren't going to know whether it fails because the library was on there .... (All talking). Kubby/It doesn't matter why it failed in some respect .... We can't do one without the other... If the majority wants to put the sales tax back on again without the library not in it, we can ....The things about the roads, we have money to do those big road projects ....We have lots of bonding capacity ....We have the ability to do those road projects in other ways .... Road Use taxes .... Norton/Are you talking for two ballots or one? This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 9 Kubby/I want one election, two ballots and that we live by the will of the people .... Two ballots, one election... Vanderhoef/...If the library part of that ballot fails on the 60% and on the 50% passes .... Lehman/We would word it in such a fashion that we wouldn't limit the sales tax revenue to the library. Karr/If the library passes and the sales tax doesn't, you are bound to the library. Champion/ Thornberry/I think that we need to know if the community wants a new library/cultural center or not .... If you have it as a separate question, you do know. Kubby/...I know that there are groups of people who want to be able to vote yes on the library/cultural center and no on the sales tax. Norton/If they do that, that is going to put us in a tough bind on our property tax. Lehman/If it is a single issue with 40% of that going to the library, it becomes a library issue .... The purpose of the vote is to approve the library .... Pass primarily on the merits of the library. Thornberry/...you can say public buildings... Lehman/If it passes, you are saying we will build the library. Thornberry/ Kubby/ Thornberry/ Champion/...If the sales tax passes, it is going to be because of the library .... I think it is unfair to ask them to work as hard as they are going to work to give us a sales tax revenue .... If it passes it is because of the library. Thornberry/It passed in Waterloo .... (All talking). Norton/Two votes or one? This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 10 Lehman/We have to decide that. Thornberry/ Kubby/We need to make the decision. Lehman/Are we willing to take the chance of funding the library, the operation of the library if it passes on its own without a sales tax? Are we willing to put two issues on the ballot? .... How many want two issues on the ballot? O'Donnell/If there are two issues on the ballot, the library/cultural center takes 60% and the sales tax 50% .... Norton/If the library vote were no and the sales tax yes under two, how much of the sales tax receipts could be used for library work? .... (All talking). Lehman/! think that is dishonest... Norton/How far could you go? .... Lehman/That is devious. Norton/Some library renovation and/or expansion would have to happen. Lehman/ .... library combined with the lowering of water rates or stabilization of water rates has an awfully good chance of passing the sales tax .... Thornberry/Two questions on the same ballot .... O'Donnell/...one requires 60% and the other 50%. CHANGE TAPE TO REEL 98-70 SIDE 2 O'Donnell/I have a big problem with putting this on the ballot and not thinking it is a specific library question. (All talking). Norton/It will be a specific one embedded in the sales tax otherwise. This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 11 O'Donnell/What this boils down to is a matter of whether we want 50% to pass this or 60%. Lehman/I don't have a problem with either one .... (All talking). Norton/Let me ask this... If the library were no and the sales tax yes under the two voting process, could we still use some of the sales tax for increased operating expenses? Lehman/Whatever we specify we can use it for. Norton/I don't see then why we just don't go with the one and make it simpler for people .... Thornberry/I want two questions. Norton/If that- (All talking). Lehman/We got one for one question; we got two for one question- Thornberry/I want to know whether the people want this library/cultural center or not. The only way is to have it on two questions. Lehman/I think they will tell you that on the sales tax. O'Donnell/... it has to be two questions ....This separates it. We know if Iowa City wants this .... Kubby/Which means you are willing to do cuts to the operating budget if the library passes. O'Donnell/I don't think we have a choice. Lehman/All right. Dee Vanderhoef, do you want two questions or one? Vanderhoef/Two. Lehman/It appears that we have two questions. We got four people that want two questions. This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 12 Atkins/May I ask some questions?... Most of the discussion and debate today is political... I am just concerned that we are discussing failure. Everything we talk about is failure. I thought the council committed to the library and the CenterSpace folks .... 6-1 vote you are going to do this. Understand the financing issues. I think we have been consistent in telling you that the General Fund... should have to bear any additional burdens. We have to be very cautious about that. As far as our debt capacity, absolutely right, we have plenty. We have debt capacity... sold as a GO bond and pledging the property tax and if you have no sales tax, it pushes up taxes. You are going to have to try and explain that issue away. If you have two ballots, the first question... seeking the public's approval to build these projects by way of a debt authorization vote. Right? Two questions. You are seeking debt authorization which when you seek that debt authorization, you are 1-seeking approval of the public and 2-seeking the public's approval to incur the debt to take care of the project that they have chosen to approve. Norton/To incur the debt against the property tax. Atkins/Right, that is a property tax decision .... If the sales tax, then, is the second question and you can amend the language as you see fit, were it to fail, you are obligated to sell that debt, build that project and add it to the property tax. In addition to that you will add the operating cost to the property tax. And the sales tax goes away. Kubby/So this is a change. There were six people at our last meeting who said the only way we are going to build the library/cultural center is if there is a sales tax. Norton/That is what I thought. Kubby/And now there is only three people saying that. (All talking). Atkins/I am trying to figure out where you want to go with this... What do you want to accomplish? Let's put together a ballot composition that accomplishes that. Lehman/I think that is right .... Five people said we wouldn't do it without the sales tax .... Did say very very explicitly that we supported the concept of putting the library/cultural center on the ballot, coupling that with the sales tax .... Sales tax... pass because they have a broad base of support .... It is true the margin changes from 50 to 60% if you put it on a single issue. It is also true that you insure the funding of that if in fact is passes ....Library people will make this a library issue. It will be a library issue .... This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 13 Atkins/Ernie, it is going to pass or fail based upon what you intend to use the moneys for .... Library... Also a number of you very strongly supportive of water rates .... Political questions... Package it in a fashion to accomplish your goals... Resolution you passed said you will put this on the ballot no later than November .... You made a commitment to them to do that .... Vanderhoef/I have a question... If we put the $23 million in bonding onto our property tax bonding, where are we in possible bonding for some of these other projects? Atkins/We are in pretty good shape. We are at about 35% now. And our estimate, if you took the whole $22 million and put it on, put you at about 59%. That appeared to be the top. I am not nervous with that 60%. I am not so sure that you want to get too far beyond that. Karen's observation about street projects is absolutely right. We have a very healthy Road Use Tax fund .... We can do street projects .... Norton/My point is this, this is vital. Seems to me this vote is vital to the long term well being of this community .... Best way for it to fly is to combine them .... If you divide it, it is maximizing the way to lose. Kubby/Could we hear from the library? .... Thomberry/ Lehman/Susan .... Susan Craig/My reaction to you discussion .... Library board... they felt that your previous decision was we needed the sales tax revenue and it was required to have the additional space at the library and the renovation .... Now we hear from bond counsel that we capable of passing this issue with one vote at 50% which is great and the library will get out there are have a campaign and get supporters for the sales tax because the sales tax means the library project. Now what you just said a few minutes ago is the sales tax, we might not require that the sales tax means the library project and I don't see the library campaigning for sales tax if we don't have to because we will have a second issue that we must campaigning for .... We have to campaign on what is most important to the library .... Thornberry/ Lehman/Fact of the matter, if they campaigning-Their interest is a new library. They are going to work for whatever works best to get that library. If the sales tax is not tied to that, why would they work for the sales tax? This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 14 Thomberry/ Lehman/Why would they work for the sales tax if the sales tax is not necessary for the issuance of bonds for the library? They want the library, that is their job .... If we separate the two, and they pass that one, we then issue bonds if sales tax doesn't pass .... Kubby/Connie and I agree... that the only way a sales tax is going to pass is people know that a lot of it is going to go for the library ....The only way you are going to get a sales tax is if you connect it. Thomberry/Only way we have a prayer...if Cedar Rapids passes it. (All talking). Champion/Cedar Rapids is not going to pass their sales tax because they don't have a valid thing on there .... Norton/...one vote makes this issue simpler .... Two votes... is just going to confuse the scene. O'Donnell/Library .... Lehman/Our decision will determine how they want to campaign. Norton/They will campaign whichever way we go. Champion/Who is going to campaign for the sales tax? (All talking). Craig/I mailed Steve's memo... to the library board and ! told them to call me if they had questions. ! probably talked to five out of the nine and they think it is a wonderful idea to have one vote at 50% .... They would rather campaigning for a sales tax .... It is not just a library/culture center project .... It has a better chance... Norton/Simplistic... Seems to me that it is also coherent financially .... Champion/...now we are saying that five of us are willing to go with the property tax. Thornberry/I am not. Vanderhoef/...I do want the 60% vote but the confusion with the wording... This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 15 Norton/Why do you want the 60% answer? Vanderhoef/Because I think that is the way the law is written to begin with and- (All talking). Atkins/The law was written for property tax General Obligation debt at 60%. The law was also written for sales tax revenue bonds at 50%. They are both a matter of law. Norton/And there is no reason why we should implicitly burden the property tax .... When we have this other mechanism. Lehman/It is appropriate to burden property tax with 60%. It obviously is not appropriate to have 60 for a sales tax which is why you have a 50%. Norton/I am saying keep one vote .... Champion/If you want to finance it with sales tax, why not 50%? .... 60% is a big margin .... Norton/Compelling future is clarity and reduced requirement. Vanderhoef/...it always has concerned me... tying ourselves in operational and reoccurring expenses. Norton/We could change that and put more of it into capital things .... Vanderhoef/ ....we have reoccurring expenses coming in... public safety category. Lehman/I think we need to tell the library board .... Are we going to allow this to be a single ballot issue where if the library passes, the funding for it passes at the same time. Or are we going to make this two issues on the same ballot, two different elections? O'Donnell/I thought that is what we intended originally .... Lehman/We also at that time said if the library bond issue passes and the sales tax does not pass, that we will not build the library because we don't have the money. We have since found out that if the library bond issue passes, we will issue the bonds because that is state law... That kind of changes the rules of the game... This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 16 Vanderhoef/The reverse... depending on how we put the ballot question, it obligates us to build the library on the sales tax. Kubby/Can we have everybody on one conversation? Dean and Mike, could we have one conversation? Thornberry/Like you and Connie? Don't give me that Karen .... (All talking). Lehman/Hey, one at a time .... Norton/...we should now look for the most efficient way to get there .... Go for a single ballot ...sales tax tied right to it... Thornberry/ Champion/I have problems paying for the library/cultural center with property tax .... Lehman/ Thomberry/ Norton/We need to get together and get behind this project .... Vanderhoef/Okay, I will go with sales tax. Lehman/One issue? Could we kind of get more than 4-3? Anybody else want to join the troops .....I want you onboard ....If we can't get behind it, how do we expect the public? Thornberry/I don't want it to pass. I want it to go on the ballot .... Lehman/And you will accept the public's decision enthusiastically? Thomberry/ Norton/We are giving that chance at 50% .... Thomberry/There is four for one vote, so put it on that way. This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 17 Lehman/We will put it as a single issue. Word the sales tax in such a fashion that we will be committed. The library will be a commitment if the sales tax passes, those funds will be used for the library. Atkins/That is a commitment. Folks, I am a little nervous. You are committed to the library. You are committed to CenterSpace. You are committed to the renovation of the library and you also want to discretion to do some other projects. If that is the case, that is what that says. Lehman/We may change the percentages, Steve, but we won't change- Thornberry/Can we change the percentage after the election? Atkins/No, it requires a referendum. Lehman/ Atkins/You got to nail these percentages because it is going to go on the ballot. Lehman/When do we have to have the percentages nailed down? Karr/You have to have- The very latest, the deadline by state law is August 26. However, I don't think because we are triggering a county wide election, that you want to wait until that deadline to make your intentions known. Kubby/We also... pledged in May that we would pass a resolution or whatever expressing how this was going to go on the ballot. Atkins/ ....Your decision was the city council will call for a special election to be held no later than the 3rd day of November, 1998. That is your language. Kubby/It was an informal commitment. Atkins/Jessie brought the May 1. Jessie also brought the letter back to you saying if you don't want to do in November, we are willing to accept a little delay. That is still subject to discussion. Thornberry/I have got a question on the 40% .... There is discretion of that 40% as to how much of that goes for the building... It could be all 40% going to the library/cultural center. Atkins/We estimated it would be $5 million. Sales tax is an elastic revenue .... That number, 40% of $5 million, is $2 million .... Next year... You have built in... This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 18 When you build the library and build the CenterSpace .... That would be a permanent fixed cost... Then you will have flexibility... Thornberry/Do you pay for this strictly from there? .... Atkins/The sales tax receipts that will come to the city .... would be set aside in an account. We would then sell a bond. We will pledge those receipts. You must go into debt. Norton/...retire with sales tax .... Thornberry/In this scenario, we are guaranteeing it with sales tax. Norton/Back that up with property tax, too. Lehman/We are paying it with sales tax. We are guaranteeing it with property tax. Thornberry/ Atkins/A bond is a debt .... All the banks want to lmow is where is the money coming from to pay me back. Lehman/Can we guarantee repayment of the bonds with a sales tax when a council, one year from date of passage, can rescind the tax? Atkins/Yes... You pledge to levy an irrevocable tax above and beyond anything and everything else. Lehman/The sales tax is not irrevocable. Atkins/Sure it is once you pledge the debt. That also changes risk .... Lehman/ Atkins/Whatever the length of the bond .... You may go back to the votes, change the 40% or something later one... But you must fulfill your obligations for the debt. Norton/ Atkins/ Norton/I think we need to set a session to think real carefully about the percentages distribution .... Right now that 40% is roughly what is required .... This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 19 Atkins/We did a fixed rate schedule of $22 million of debt and it took 1.8 .... Lehman/There may be things we would like to work with Coralville or Johnson County .... Atkins/...unless the market would go wacko, you have some extra bond capacity in there. Vanderhoef/ .... We can always still of those joint projects. Atkins/You are not precluded from the joint projects because of this .... Champion/...it is a growing fund .... Since it is a growing pocket of money .... I would really like us to see the 5% human service agency raised .... Something to think about .... Thornberry/...remains to be seen .... Say we are locked in... Coralville, after one year, says we are out. Where do you think the growth is going to go? I think it is going to go straight to Coralville. Ours may not be growing .... Lehman/If we would like to individually think about a break down .... Kubby/Don't we need to talk about the date today, though. Lehman/We really should ask the library board. Are we in agreement that this is a November ballot issue? Champion/I would like to see referendums like this at a separate time than the general election. Thornberry/I like to see it at the same time to save $25,000. Craig/I think... Library board has talked about this twice... They would like the vote to be as soon as possible but they understand that there are other situations here... Could be a county wide election. They feel it is important to have enough time to do am effective campaign .... The preference is for November but if it is felt by council that we have a better chance of success .... Thomberry/...is the vote taken the same day throughout the county? Karr/Yes. We petition it and we have the majority. So by us petitioning it with- This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 20 Thornberry/That would force the other communities to have a special election if it was not on the general election date. Karr/Yes. Thomberry/Perhaps we should talk to Coralville and some of the other communities .... Atkins/Coralville has expressed its opinion to you to have it later ....County... simply want to take more time to think the thing through... It is a matter of when. Lehman/...we have really not told anybody what we are going to do... Once we have nailed this thing down, it appears we have. Now I think the other entities within the county can now start talking about something .... Atkins/They really have June, July and a little bit of August because they have to declare their distribution of moneys at substantially the same time we do. Lehman/75 days. Atkins/ .... The difficulties we had... they are going to have some of the same concerns .... It may take some more time. Norton/ Thornberry/Mayor Fausett, I would like to get his input on when he would like to see .... Input on timing... Jim Fausett/Basically I came today just to observe... I think your staff has done an excellent job... commended for the work they have done in presenting this... probably the right track that you are taking. Many question is the feasibility strictly of timing... I fully support the library. I was concerned with the feasibility of the timing. I think we and the county need more time... You need to give Coralville and the county time and even yourselves to look at a bunch of regional projects that we do feel are essential .... We are strictly concerned with timing .... We need to have some public heatings... public input... One thing we are concerned about is what happens in Cedar Rapids .... We will know by mid-June what Cedar Rapids is doing... I have heard many of them say January, February, March. Norton/That would be the next step... Lehman/We are not nailing the date for November at this point .... This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 21 Norton/It would be nice if we had everybody comfortable about the date .... Atkins/Ernie, I think if it is not November, as soon as you can ....I would kind of like to know that. Lehman/I wonder if we can ask for some comment officially from the library board by our next meeting... 26th. Craig/I can poll them on the phone. Lehman/As far as November goes .... Give an indication at our next meeting. Craig/ Norton/ O'Donnell/ Kubby/As long as it doesn't fall in January at a time people are out of town .... Lehman/Probably looking at March .... Thomberry/...weather .... Kubby/The advantage is it gives us time... and get some feedback... Lehman/Steve, it doesn't appear that we are talking November. Arkins/Okay, November is out. I will keep this sort of on your pending agenda .... November is out, sometime after the first of the year, a date yet to be set... Vanderhoef/I would like to say no later than March. Norton/We got to get it going. Kubby/Say more clearly that we wouldn't do it in January .... Arkins/Now the ballot proposition. There is some general agreement about the categories. Norton/...how it compares with water rate relief... also trying to figure out... get as much operating out of there as we possibly can. This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 22 Vanderhoefd ...indirect property tax relief. Norton/ Atkins/ .... I think you need and approve... a policy position... if the sales tax is approved... we would intend to .... Lay things out for folks... Kubby/...by taking operating expenses out of the formula, we are not relieving the General Fund... Atkins/No, sure you are. We are substituting sales tax money for property tax moneys in a couple of those categories. Kubby/... we are relieving property taxes which are the things that go into the General Fund. Norton/Question is whether you want to do it directly or indirectly. Atkins/It is a matter of definition. Vanderhoef/ ....in the 10% for the operating expenses .... Fund is going to continue to grow ....To me, that part of it could be taken out of there and to be used for whatever capital things we want to do, not exclusively leave that money in there for operation of the library. Kubby/So like capital things that the library needs that are part of their annual budget gets shifted... Vanderhoef/That is where I am looking at that... As it continues to grow... cultural center will be come more self sufficient. That fund could continue to grow much larger... Kubby/It may be in the short term .... Have to get more from the General Fund at the very beginning .... Vanderhoef/And we are sending some relief into that General Fund .... Norton/The $500,000 reduction in General Fund expenditures translates into about $.30 a $1,000 or $20 a year .... Too bad... we can't show that on the ballot and make it a virtue... It is complicated... Kubby/We need a word-meister to help us .... Indirectness of it... policy statement. This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 23 Norton/I just keep trying to boil it down to dollars and sense .... Thornberry/What is the figure for operating costs... guestimate... Library/CenterSpace operating cost per year? Atkins/Is approximately $320,000 .... $150- for library operations and approximately $170- for a subsidy for operations of a center for the arts. Vanderhoef/So if we were to do 5% on operating expenses for library/cultural center, we would recognize .... $70,000 in first year that would have to come out of our General Fund... Atkins/No .... Vanderhoef/ ....if that $320,000 figure is correct ....That would be my preference .... Kubby/ Lehman/Is it possible to word the ballot in such a fashion... portion that would be earmarked for operating costs... whatever it has to be will be earmarked for operating costs up to the actual costs... access moneys would go into capital improvement... Atkins/I would probably encourage you in your policy position to do something such as that. Lehman/...talking about increased revenues in the cultural center .... It might go down .... Norton/Those are the kind of flexibilities we got to have. Vanderhoef/That is the one I would like to look at. Atkins/I think your policy position on each of the categories should be fairly detailed statement. Lehman/And clear cut... so the public knows... Atkins/Once you settle in on the ballot language, I need to go to work on a policy position draft for you... Vanderhoef/ This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 24 Thomberry/...drop the other subjects .... Atkins/The ballot proposition, the categories are no okay yet. We know what the percentages are and the categories you are still thinking about .... The date is not November but no later than March and late January at the earliest. That is what I heard you say collectively. Lehman/ CHANGE TAPE TO REEL 98-71 SIDE 1 Lehman/ Atkins/They are available for what is specified .... With little caution... 40% is more than sufficient to finance the library and CenterSpace under the plan we now have... 40% allows you to do a library... CenterSpace... and other projects at your discretion. Kubby/ Atkins/I think I did 35- My original was 40 .... Norton/ .... category .... some joint project .... Say not less than X% will go to some kind of joint thing. Lehman/ O'Donnell/Why are the operating expenses separated out? .... Atkins/Because... built in flexibility and flagging the issue of what you intended to use the money for .... Sales tax is a common from of local government revenue throughout the United States... Lehman/I would hate to see us put real strong reliance on sales tax for operations. Atkins/...it is also not something to get panicked about either .... Another one you have not spent any time... 25% of additional income for the water system .... Stabilize rates... That is a very general statement .... Not up to, 25%... 25% is forever .... Lehman/ Kubby/ This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 25 Thomberry/ Atkins/Remember you always have the ability to go back .... Norton/ Lehman/Most mail orders do not collect and pay sales tax .... Vast majority do not... Norton/Also on intemet sales .... Atkins/I would like to make the assumption that the categories are generally okay because I want to start writing up a policy position for you to start chewing on and that is going to take a little time. Lehman/Can we also communicate to the other entities in the county .... our intentions? Atkins/...I think a letter to all of the mayors an county board from you saying... here is where we are. Lehman/I think we should do that. Atkins/I will prepare that. Kubby/ Atkins/ Lehman/We need to coordinate the timing... Kubby/Joint road thing we do all of the time... Atkins/Are we not going to do police issues then? Lehman/I don't think we should start that. Atkins/I am going to send a memo to you. We had prepared a memo summarizing the last 12 months of their activities. ! will just mail that out to you .... Vanderhoef/Did we agree that we would do this by March? Lehman/Yes. This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 26 Atkins/Repeat: the ballot is not going to be in November but it will be no later than March. However, late January at the earliest .... (All talking). Atkins/ Lehman/After the first of February. Atkins/It is important when we write the letter to the other folks that you give them some indication... Lehman/A March date. Can we at this time re-schedule the police issues? Atkins/We are ready to go. Kubby/ ....agreed that we need it to be a separate meeting to focus on it. Norton What days do we have? (All talking- Schedule discussion). Lehman/9:00 AM, 17th. Karr/17th, 9:00 to 11:00. Lehman/June 17, 9:00 to 11:00 AM. Police issues. Karr/I will send a revised schedule. This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498 May 14, 1998 Special Council Work Session page 27 CouncilTime 98-71 S1 1. Lehman/This is Mayor Fausett's official challenge to the Iowa City council. The lazy boy and girl recliner race to be held next Thursday at 6:15, Coralville and we need a couple of council folks to ride these recliners. We need three .... Kubby/One person is in the chair and two people at any one time are pushing .... (All talking). Lehman/Dee Norton... you are captain of the team .... Norton/May 21... 2. Lehman/I got a letter from ACT. They are looking for folks- Council/We all got that. Lehman/Would someone please do it. We are adjourned. Adjoumed: 10:50 PM This represents only a reasonably accurate transcription of the Iowa City council meeting of May 14, 1998 WS051498