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HomeMy WebLinkAbout1995-05-11 Minutes numberedMINUTES OF THE JOINT MEETING OF THE JOHNSON COUNTY BOARD OF SUPERVISORS AND TNE IOWA CITY COUNCIL - WITH CITY COUNCIL MEMBERS OF CITIES WITHIN JOHNSON COUNTY: MAY 11, 1995 Chairperson Duffy called the joint meeting to order in the Johnson County Administration Building at 5:30 p.m. Supervisors present were: Joseph Bolkcom, Sally Stutsman, Charles Duffy, Stephen Lacina, and Don Sehr. City of Iowa City Mayor Susan Horowitz was present along with Iowa City Council members: Larry Baker, Karen Kubby, Naomi Novick, and Ernie Lehman. Absent were Council members: Bruno PigoR and Jim Throgmorton. The following were also present: Coralville: Mayor Allan Axeen. Council members Tom Gill, Jim Fausett, Bill Potter, Henry Herwig, and Diana Luridell. City Manager Kelly Hayworth. Iowa City: City Clerk Marian Karr, City Manager Steve Aftfins, Assistant City Attorney Bey Ogren, and Economic Development Coordinator David Schoon. Lone Tree: Mayor Robert Wisor. North Liberty: Council member Glenn Siders. City Administrator Tom Doermann. Oxford: Mayor Don Saxton. Council member Nancy Skripsky. Solon: Mayor Steve Grover. Council members Brian Fleck and Merlin Studt. Swisher: Council member William Fisher. Tiffin: Mayor Glenn Potter. Council member Carfie Stratton. University Heights: Council members Louise From and Richard Martin. Johnson County: County Attorney Pat White. Board of Supervisors Administrative Assistant Carol Peters. Iowa City Area Chamber of Commeme President John Beckoral. Citizen Charley Grunewald. Duffy said the joint meeting was called to discuss the idea of implementing a local option sales tax. He said the meeting is for informational purposes, and to allow people to discuss the pros and cons. Horowitz said she felt it would be better if everyone got together and listened to each other, rather than hearing rumors about what each other said concerning this controversial subject. She said they have been asked by some citizens and cities about putting the sales tax to a vote. She said a packet of information was mailed out, which they thought contained all of the relevant information about the local option sales tax, but it was later found not to be totally complete. She said the meeting is informational, so the meeting's participants can get the information back to the citizens and a decision can be made of whether to put the issue on the ballot. She asked if there were any corrections to the material. Karr said there was a question raised about when the election could be held, and the packet failed to state that the local option sales tax can only be voted on at a State General Election or a Special Election. Karr said tharefor~, the issue cannot be on a ballot for a city election. She said this is fi'om Chapter 422B of the Code of Iowa. She said this omission was brought to light today. Horowitz said the Iowa City Council h~ sugg~ted putting the issue on the ballot so the citizens can determine whether or not they want the ~le~ lax. She ~haid Iowa City is contiguous to North Liberty, Coralville, University Heights, and Hills. Kubby clarified that some, but not all members of the Iowa City Council suggested putting the i~ue on .Toint Meeting of Board of Supervisors/Iowa City Council Minutes, Subject to Approval: May 11, 1995/page 2 the ballot. Horowitz said they have not voted on the issue yet, but some members have requested we do so. Tom Gill said if one of the contiguous cities decided they do not want to put the issue on the balloh and Iowa City does put it on the ballot, the other cities would have to vote on the issue whether or not they wanted to do so. He asked if the other city would then have to pay for the election even if they do not want one. Horowitz said she thought yes, but asked Karr to confirm the answer. Karr said the information she received today states that the issue is guided by population, and if triggered by Iowa City, each city would have to pay the costs for the special election, but noted she has not been able to confirm this yet. Novick asked if the issue has to be on the ballot everywhere in the County, even in unincorporated areas. Horowitz said yes. Lundell asked what would happen if Iowa City approves the tax, but all the unincorporated areas and small towns vote it down. Horowitz said as she understands the issue, the taxes are population based. Gill said the contiguous cities that turn the tax down would be obligated to have the tax for a year, but they then could opt out after the first year. Horowitz said she understands that the ballot must include a statement which says that there will be an option for repeal in one year. Karr said the law has changed, and the tax can be repealed after one year without having the statement on the ballot. Fausett asked if the money is allotted by population. Horowitz said yes. Studt said not totally. Studt said that his biggest problem is with the time frame that is used for the assessed valuation, which runs from 1982 to 1985. He said, with the exception of Iowa City, everybody lagged behind in assessed valuations from 5% to 15% or more, and noted that 25% of the disbursement of the funds is based on the assessed valuations of a bygone era. He said he has a problem with the State law regarding the use of the assessed valuations, but has no feeling pro or con toward the sales tax. G-rover asked if the valuation dates have been updated. Horowitz said not to her knowledge. Bolkcom asked if they could find out if they have changed. Horowitz asked Karr if the assessed valuation dates have been changed. Karr said she does not know. Novick said the formula utilizes a percentage of the tax levy of the entire county, so if a community assesses 2% of the tax of the entire County, then the tax the community gets is 25% of the 2%. She added that it is a terrible and complicated formula. Gill asked which census information will be used. Horowitz said it would include Coralville's and North Liberty's special census. Saxton asked what would happen in the case where a company's home base is in one county and a division of it is in another county. Horowitz said that is dealt with in the information contained in the packet. Studt said the business in the county would fall under the county's guidelines. G-rover said there are certain items which are exempt from the tax such as cars, trucks, gasoline, fuels, and maybe fertilizers. Duffy said the items not currently subject to State sales tax, plus some other items, are not subject to the local option tax. Potter asked if the tax passes in the contiguous areas, but not in the rest of the County, would the rest of the County have the tax. Horowitz said they would. Duffy said they would not because they are non-contiguous cities. Horowitz stood corrected. Potter ~d this would mean differing taxes depending on whether or not it passes in a given Joint Meeting of Board of Supervisors/Iowa City Council Minutes, Subject to Approval: May 11, 1995/page 3 municipality. Studt said in that in last week's election in Muscatine County ~o or three cities passed the local option tax. Horowitz said it was West Liberty and Durant. Studt thought there was another tovm that passed the issue. Novick said Museatlne County passed the tax a couple years ago, and the whole county had the tax except for the three cities. She said those cities now wanted the tax. Hayworth said Durant was recently annexed into the county. Lacina said the public needs to know what the benefit of the tax will be. He said many people will be opposed to a new tax unless they can see benefits such as property tax relief or better streets. He said if the issue goes on the ballot the uses will have to be specifically identified. Horowitz said the uses have to be shown, but she does not know if each municipality needs its own specific uses stated. Novick said each city must specify their intended use. Gill asked how this would apply to cities that do not want the tax. Kubby said you would still have to say what you would do with the money. Horowitz asked ifa certain percentage of the money is automatically used for property tax relief. The consensus was no. Novick said the issue would however have to be put on the ballot. Novick said that if everyone wants a "sunset" clause, the entke County would have to vote for the agreed upon date. Gill said any municipality could opt out ~er a year, and this does not have to be stated in the ballot language. Karr said a city has the right to commit to a period of time before the tax is automatically reconsidered again. Fleck said he is against the tax. Horowitz said they are not here to make decisions. Fleck said he thinks the tax is regressive, and many Solon business people have approached him saying that the extra percent will make them non-competitive with nearby toms that do not have the 1% sales tax. Horowitz said the information in Professor Pogue's article is interesting because one of the points implies that any property tax relief is almost offset by the impact fi'om the additional sales tax. Kubby said it matters what the proportion of lower income residents is, and how many of them are property owners. She said non-property owning lower income citizens do not receive the direct property tax relief, but are paying a bigger proportion of their income for the sales tax, which is unfair. Horowitz said the different communities represented here individually need to think in terms of what that proportion is. Kubby agreed, and said this time should be used to persuade each other to look at the issue fi'om different perspectives. Fausett said his perception is that Coralville will pay the fi'eight on this, and the citizens of Coralville will vote against this because they do not want to pay for other people's projects. He said they do not perceive the tax as being of any benefit to Coralville, and the feeling is that if the tax is approved, and Coralville does not approve it, it will probably be rescinded within a year. Lundell asked how much a special election would cost. Karr said the cost of a special election in Iowa City runs between $17,000 and $22,000. Lach~a ~d the cost for a County-wide special election for Supervisor was $19,000 to $20,000. Duffy said it was $19,882 to be exact. Horowitz ~d the question is whether the special election is Joint Meeting of Board of Supervisors/Iowa City Council Minutes, Subject to Approval: May 11, 1995/page4 worthwlfile. Deemann asked how the costs of the special election would be divided, and more specifi~ly how much will the cost be to North Liberty. Horowitz said the costs are based on the actual costs for the particular dry. Herwig said he understands that the tax can be rescinded ~er one year without a vote. He said a city council could sLmply ask the Board of Supervisors to remove the tax, and it is removed. Saxton asked if there was any way to project the potential tax revenues for a community. Horowitz said the Department of Revenue and Finance is the department to contact. Atkins said they worked up conservative estimates that use 95% of taxable sales from 1993. He said their ~leulations show that revenue would increase by $670,00 for Coralville; $3,900,000 for Iowa City; $61,000 for Lone Tree; $40,000 for Oxford; $13,000 for Shueyville; $40,000 for Swisher; $28,000 for Tifffin; $65,000 for Solon; $64,000 tbr University Heights: $175,000 for North Liberty; $40,000 for Hills; and $1,700,000 for unincorporated Johnson County. Arkins stressed that these numbers are very conservative. Herwig asked i~the figures represent the 1% increase. Arkins said the figures are the result of adding 1%, and are based upon a proportion by population and using the 25% tax levy factor. Lehman asked if Iowa City decides to put the issue on the ballot, could the County decide not to put the issue on the ballot. Horowitz said no. Kubby asked the group to think about balancing out the fairness of the tax with alternative ways of getting the job done in the community. She said the sales tax is regressive, and hurts those who are the most vulnerable the hardest. Horowitz said Kubby's point is well taken, but the question is where do you get the resources to do what needs to be done. Grover said lower income people are going to be hit, but many property owners in Solon are tired of footing the bill for projects in Johnson County and are tired of all of the mandates that come down through property tax. He said they feel like they are paying for more than their fair share just because they are homeowners, and they feel the local option tax would spread the burden over everyone. He said they do not want any more taxes, but could live with a tax that is distributed over everyone in the County. Lehman agreed that the tax is regressive, but the issue is whether we want to let the people in .l'ohnson County decide if they want the sales tax. He said as much as he opposes the sties tax he finds it difficult to say that the people of Sobrison County do not have a right to decide the issue. Kubby said Iowa City would use the money for water and sewage improvements, and the decisions on how to pay for this is a policy decision that rests with the Council. She said for this reason this argument does not work for Iowa City. She said the argument may be all right for other communities. Novick said any city would be better off by not being too spedfie for the intended use of the money because times will change. She said if the issue is on the ballot, the best thing would be to say that the money will be used for fi~ture capital expenditures, so it could be used with more flexibility. Fausett said he totally disagrees, and feels the need to specify what the money will be used for and for how long the money v,411 be used. He said the tax could ea~sily become a growing tax that will never put a dent in property tax relief. He said the issue will be very divisive. Joint Meeting of Board of Super~sors/Iowa City Council Minutes, Subject to Approval: May 11, 1995/page 5 Potter said it does not matter what the areas outside of the City of Iowa City want and the only thing they can do is express their pleasure or displeasure to the Iowa City Council, because they are the ones who are going to decide what everyone is going to do. Horowitz said it is not known whether the citizens of Iowa City will approve the tax, and the Council's position is that they should let the citizens vote on it. Potter said the citizens of Iowa City will also be making the decision for other municipalities as well, and they would just as soon they did not. Novick said not all of the Iowa City Council Members have decided to put the issue on the ballot. Kubby said the Board could also put the issue on the ballot, but doubts that they would. Duffy said they would not do it. Kubby said she is not saying they would, but it is an option. She said another option is for the citizens who want the tax to petition the Council. Beckord said while Iowa City may be in control to put the issue on the ballot, Coralville's Council holds the true trump card, because even if Iowa City approves the tax, one year from the passage of such a tax, Coralville could rescind the tax without approval of the voters at about the time their new mall becomes operational. He said the City would then have this massive retail base without the tax, sitting right next to Iowa City, which would have the tax. Herwig said whether or not to put the issue on the ballot is an important decision. He said if the decision comes from an initiative, fine, but making that decision is difficult. He said it is difficult to understand the law, and the vote will be on people's perceptions of the law, and 99% of them will be incorrect. Wiser said they should forget the special election and go with the general election in November. Horowitz said they would have to wait until the next November as the next State general election is in a year and a half, because the issue cannot be run with a local general election. Studt said it would not look very good to spend money for an election that proposes a tax. He said if a consensus is reached to put the issue to a vote, plenty of educational work needs to be done before the issue gets put on a ballot, so people can make an informed decision. He said they could help themselves by raising the issue at a general election, which would save money, and taking the necessary time to inform people about the tax. Beckord said the retail people at the Chamber of Commerce are generally against the concept. He said he feels a lot of'work would have to be done to convince people of the utility of the tax. Crrunewald said Iowa City has had too much control, and he appreciates what Coralville is doing. He said Coralville is doing something which will help them and will hurt Iowa City, and he is for that. Fanserr said they are not intending to hurt Iowa City, and have good relations with Iowa City. He said it seems as if the two municipalities are often at odds, due to growth and other factors, but they work with Iowa City on many things. 1oint M~tin8 of Board of Supendsors/Iowa City Council Minute, s, Subj~ to Approval: May 11, 1995/paie 6 Fausett a~ked if there is any interest in a local tax on alcohol. Kubby ~d not in Iowa City. Horowitz said it is not legal. Adjourned at 6:07 p.m. Charles Duffy, Chak, Board of Supervisors Attest: Tom Sloekerr, Auditor By: On the day of By Ben Mosher Recording Secretary ,1995