HomeMy WebLinkAbout2012-12-07 TranscriptionDecember 7, 2012 Iowa City City Council Special Work Session With Area Legislators
Council Present: Champion, Dickens, Dobyns (12:40), Hayek, Mims, Payne (12:45),
Throgmorton
Legislators Present: Jacoby, Bolkcom, Mascher, Lensing
Staff Present: Markus, Fruin, Dilkes, Karr
Others Present: Standberry, Carlucci, Neades
Priority #1— Support of the Chicago to Council Bluffs / Omaha Passenger Rail Proiect:
Page 1
Hayek/ ...go ahead and get started. I want to welcome everyone to our joint meeting with, uh,
area legislators. Um ... I think everyone knows each other, but as is typically the custom,
uh, we go around the room introducing ourselves so ... I ... I suggest we do that. I'm Matt
Hayek, of course, with the City Council.
Dickens/ Terry Dickens, City Council.
Bolkcom/ Uh, Joe Bolkcom, Member of the Iowa Senate.
Throgmorton/ Jim Throgmorton, City Council.
Lensing/ Vicki Lensing, State Representative.
Mascher/ Mary Mascher, State Rep.
Mims/ Susan Mims, City Council.
Champion/ Connie Champion, City Council.
Markus/ Tom Markus, City Manager.
Hayek/ ...people in the peanut gallery? (mumbled) (unable to hear people away from mic)
Great, um ... I'm just going to, uh, very briefly speak and then ... and then, uh, turn the mic
over to Tom Markus. Um, but I ... I wanted to start out by, uh, expressing our gratitude as
a city for your work on our behalf, and on the region's behalf, um, we have a ... a strong
relationship with all of you, um, and it's a growing one. Um, and uh, it means a lot to us
to have that kind of access and to ... to have that back and forth communication, um, these
are interesting times for cities, uh, I think on some of the issues, especially, uh, property
tax reform, I think cities, uh, dodged the bullet in the last session, but the issue remains,
uh, quite alive and be interesting to see what ... what happens going forward. Um, but we
...your efforts last year on that and other issues were ... were critical to us and ... and we
feel very, uh, good about our... our local delegation. Um, we've identified four priorities
that are laid out in ... in the materials you've received, um, and ... and Tom is going to
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 2
walk us through, um, each of those and provide a few highlights and get your thoughts,
that sort of thing. So with that (mumbled)
Markus/ Yeah, so if I get going too long, you know, just throw something at me, raise your hand
(laughter) and ... and I want these to be an interactive type of discussion, but what I'd like
to say to you is that I've served now ... this is the fourth state in the Midwest and I have to
tell you that this, uh, our legislators, um, our Governor, uh, the administration, I find to
be the most accessible people, um, that I've dealt with from Minnesota, Michigan,
Illinois and ... and now Iowa, and that's quite frankly that's a real pleasure for us to be
able to have the kind of relationship that we have with you folks. Um, we started
something a little differently last year. We employed our own lobbyist in Tom
Standberry with, uh, Davis Brown, and... and of course, um, Jessica was with Davis
Brown last year. Uh, we have a new member, uh, Kate Carlucci, and so we welcome her
to this process. Um, our commitment to you is if you ... if you see something, um, that we
haven't contacted you on, and you need our information, just give us a call. We will be
there. Um ... what we've done is we've put a little packet together for you, and what I'd
like to do is just kind of walk through generally some of the items. So I would refer you
to the, um, the colored sheets and what we've done is we've prioritized each of our
issues, uh, that we, uh, as the City Council has adopted a resolution and stated these...
these priorities. Now intuitively probably many of you would say maybe number two
should be number one. We've selected number one, which is the support of the Chicago
to Council Bluffs and uh, Dave was in earlier in the week and we made a point about
naming it Council Bluffs /Omaha passenger rail project because, uh, we learned during
the process that actually Council Bluffs can support a rail station in Council Bluffs and
um, knowing that a certain individual lives in Council Bluffs and represents Council
Bluffs, oh yes, Mr. Gronstal. We thought, you know, that might be a good idea to
include him in this process. So what we've tried to do, because we really felt that the
issue didn't get a whole lot of traction just from Chicago to Iowa City is we've really
worked hard, uh, with Des Moines and ... and I will tell you that our point person on this
project is the Assistant in the Manager's office, and that's Geoff Fruin. Geoff behind us,
and Geoff has been very active in these discussions. Um ... one of the things that was
attractive about Geoff in coming over here is not only did he previously work in a
university town, he had an experience with Amtrak and a station, and all the benefits that
that provided, uh, to the City of Normal. So what we'd like to do is just kind of walk
through the first priority. I want you to stop me any time you feel like you want to ask an
additional question and ... and either our lobbyists or Geoff or somebody else here in the
room, uh, might chime in. Um ... again, this issue rises to our number one priority
because it has benefit across the state of Iowa, but it has some very specific and
significant benefits to Iowa City, and we want to make sure, um, that this project is, uh,
our focus. And the other thing I would tell you about this is, this is our last year of
opportunity for this. This is absolutely critical that we ... we decide what we're going to
do, and that we engender your support and our other leg... legislative delegation
members' support. We expect the final decision for this to be made here in 2013. Um,
this goes back to a federal grant in 2010 and you know the controversy's gone back and
forth. It's originally a $230 million federal grant; $87 million of that is designated for the
Iowa, uh, route ... that Amtrak route through Iowa. Um, it requires a $20.6 million match
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 3
from the State of Iowa, but in recent discussions with the Department of Transportation
here and the folks in Illinois, we think that that number can be ratcheted down because
we think that the proportionality may, um, actually, uh, require that a significant more of
that dollar amount belongs in Illinois and not Iowa. Illinois recognizes that, um, having
the service extended first to Iowa City and the on to Council Bluffs /Omaha and through
Des Moines and Grinnell and all the other places along the route has real benefit and
means better ridership and better numbers for Illinois, so we think that there's a real
opportunity there, uh, to ... to get them involved in t his ... in this process and pick up a
bigger share, which should help sell, um, this issue, uh, in the state of Iowa. Um, and we
are planning to pursue that negotiation. Illinois, as you know, they've accepted their
...their portion of this grant and they, um, they're moving ahead. They're... they're
rockin' and rollin'. These ... these, uh, the Illinois, despite all the negative financial issues
you here out of Illinois, they're proceeding with this process, and so, um, this to me, I
I'm impassioned by this. I hope you can tell that. I ... I feel that this is one of the most
critical events that .... in improvements that could hurt, uh, could occur here in Iowa City,
uh, over the quarter century, the half century, for us and foregoing forward. So I really
believe in this. I really want to see this happen, and if you need us in any regard for
testimony, for lobbying, for discussing, for holding forums —just inform us. We'll be
there. We'll help out in that process.
Mascher/ can you talk a little bit about, um, discussions you've had with the Governor's office
and where are we on that?
Markus/ Yeah, um, we've had a lot of our discussions in terms of the Department of
Transportation, that's through the administration, and as you know, the environmental
impact statement is out now and that ... that supports the route from an EIS standpoint, uh,
and so the Department of Transportation seems positive, uh, seems like they want to get
on board. Course they take signals from the Governor's office. Our conversations are
probably like the conversations you've had with the Governor's office, and that is that he
kinda ... kinda shuffles it to the House. Now, my hopes are that ...that with the growing
number of Democrats in the House, that we have a stronger negotiation position in the
House and some of the more, um ... persons who were not as supportive of this rail
process. Some of those folks have moved on to other opportunities in their life, and I'm
hopeful that there is a balance that's going to be in this House that can kind of reach
agreement with this. The other thing I would tell you is, is a part of this process there is
what's called a `service development plan,' that still needs to be developed. And that's in
the process, and the service development plan is like the business plan for this rail service
across Iowa. That means what's it going to engender in terms of population, uh, riders,
uh, what those numbers mean in terms of operational efficiencies. That's not going to be
done, I think, until potentially April or May, so we're concerned that the Department of
Transportation may not get this plugged into their budget, and so knowing what, um, our
fund balance is at the state level, we would hope that the legislature can negotiate some
sort of pre - conditional arrangement so that if in fact this service plan comes out, the
business plan comes out in favor that we will have a designated amount of money that we
can move forward with (coughing, unable to hear) Again, this is our last year. The
Department of Transportation, I think ... I think there is genuine support there, but you
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 4
know, this is ... all decisions are, you know, have an element of politics to `em and so we
really are counting on you as our delegates to inform us where we have to go, who we
need to involve. I can tell you that ... I think the University's been reluctant to jump into
this discussion and I think that ... that's partly because of the politics that we experienced
last year. So knowing that, we went to the Student Senate. We, you know, we worked
with the Student Senate, got them involved. The students are on board. They get it.
They then went to Grinnell and worked with Grinnell College and the students there.
They went to Des Moines and started talking to the schools there, and getting them
involved, and I think those students can have a voice in all of this. Again, this is a, you
know, this is a... a system that works. I can tell you when I was in Chicago, um, we built
a station and the ... the surrounding development, which is typically referred to as
`transitory (mumbled) development' will take off, and it's right in the heart of the River
Crossings area. If anything is going to kick that, start that River Crossings area, it's a
station with Amtrak service and that depot, you know, that historic depot, um being
rebuilt, it...it will get this thing going for us. So, we're excited about this. We know this
is our last chance. That's why we've made it our priority. I hope that kind of gets to
where we're at in terms of the administration.
Mascher/ It's been a frustration that the Governor hasn't been a leader...
Markus/ Yes!
Mascher/ ...in helping get this done. I think we've all seen the benefits and believe in it and
have worked really hard and have even met with him to have some of those discussions,
but, um, have been stymied in terms of being able to get through and I didn't know if
anybody had new ideas or...
Markus/ I do have an idea!
Mascher/ All right! (laughs)
Markus / And here's the idea. I think ... I think, you know, since moving here, and I can tell you,
I've been in the Midwest my whole career, and I can tell you each state I've been in is
different. We're all part of the Midwest, but we all view things very differently, and
what I've come to believe here is, our Farm Bureau in this state has a significant impact
on how we move things forward. So from my standpoint, I think a strong argument is
what is going to happen to freight traffic, and freight is going to definitely be benefitted
by the improvements associated with having passenger service on the system. The
intersections are going to be improved, the rail beds are going to be improved, the speed
of moving freight trains can be enhanced, all of those things in my opinion play to the,
uh, business, uh, environment in this community, from agra- business and play to the
agriculture market in this state. For whatever reason there seems to have been a
reluctance not to use that as an argument, but it's my belief that we can use that as an
argument and maybe bring the more conservative side over that's been reluctant to jump
on this, maybe we get to the Department of Transportation and work our way into the
Governor's office to have that conversation, because ... and the other part of it is, I think
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 5
Iowa's going to be at a significant competitive disadvantage. When you look at the
documents that our staff has put together and you see where rail is fanning out across this
part of the Midwest. If we don't do this, we're going to be the ones that are left out! And
so I think those are some arguments that haven't necessarily been made. We've been
getting into all these arguments about Amtrak's this or Amtrak's that. Well I can tell
you, Amtrak over the past ten years has been setting records every year with the
exception of the recession year, and all transportation dropped that year, but they've been
setting records in terms of numbers and they're on -time performance rivals that of the air
industry. So I think that there's all sorts of possibilities for us to argue this successfully,
uh, on both sides of the aisle. Our traditional constituents, you know, that align with each
party, I think all benefit from this improvement. At the end of the day, I find it... in...
unimaginable that we would not look at a $90 million grant, uh, on a ... even if it were $20
million in terms of our share, that ... just the... the... the quid pro quo, the return on what
our investment will get us. The ... just the jobs in construction! Let alone the additional
service, the improved track bed, the improved safety — all of those things, I mean, just
add up as win -win! I ... you know, and I ... yeah, I understand politics, but I don't get this
one. I don't get why we aren't on board 100% and moving forward with this! And...
Jacoby/ Well, I'm glad you understand politics. Explain it to me! (laughter) It's ... it's
frustrating, and it...it sounds, you know, we had a good conversation Monday, but it does
sound like a strategy that was discussed four years ago about combining the two — freight
and passenger — and it was pretty adamantly, let's keep `em separate, and now we're
looking again at the possibility of merging the two, in the hope ... that we can move
something along. Now I, and I realize ... we talked about this also, that it took us years to
get into the Midwest rail pact and then of course the Governor opted to save that $20,000
(mumbled( of which was ironic because in the House side, that was Libby Jacobs and
myself who were ... it was bipartisan to get that through the House years ago, and then
dump the Midwest rail pact, which is kind of a springboard. It doesn't ... it's not a deal -
breaker for this, but of course it's a group at the table ... to discuss how to get it done. I
guess my only question would be, uh, if Senator Bolkcom would yield to a question
(mumbled) is ... is do you see this off the top right now and it's not even January 14th, do
we have a strong enough push that the Senate would put this on a priority list as we head
months ahead of our conference committees in April?
Bolkcom/ Well I ... I think the Senate's supportive. I mean, we'd pass this in a minute! Um,
Senator Dvorsky obviously's in a good position to help. Senator Gronstal's supportive.
Senator McCoy from Des Moines has been a huge champion on this. So, I mean, I think
we have some real key members that would like to see this happen, and I ... we've got
Senator Sing in Davenport, I mean, our members are totally on board.
Markus/ The timing of it is what really concerns me, and that ... that whole.. the ... the service
plan, the business plan, is not going to be done, and I'm afraid that... that... that we could,
that could, you know, just (several talking) get to the edge and that ... and that it won't be
the pressure point. I mean, if that study came out in February and you folks were, you
know, seeing that study and it made sense at that point, it would be an easier conversation
to have. The ... the conversation though is, how do we reserve the monies so that we can
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 6
make sure that we can live up to our commitment, and I think that's going to take some
strategizing (coughing, unable to hear) our local delegation here and the others who are
supportive of this up and down the line. How do we reserve some of the surplus funds to
make sure that we've got a pot of money that if this study comes out and people are on
board with the results of this study that we can make this happen.
Lensing/ The Chamber has been supportive of this, before it was even an issue (both talking)
Markus/ Absolutely!
Lensing/ ...and I assume in these other cities the Chambers are equally supportive.
Hayek/ Oh yeah!
Markus/ Yes.
Lensing/ ...but what's the name of the business group? Uh, that ... the bigger business group that
we always...
Fruin/ Iowa Business Council.
Lensing/ Yes! Are they involved at all in this?
Markus/ Geoff, can you... or Rebecca comment.
Hayek/ Rebecca Neades from the Chamber's here too.
Jacoby/ Or ABI?
Mascher/ (several talking) I mean, I'm thinking if...if they're on board and they talk to the
governor, and maybe they could link up with Farm Bureau, but if they could both make a
strong argument, you know, I mean, we have all said the jobs things, I mean, these are all
arguments we have made over the years, that the Governor doesn't listen to, but I was
thinking the business council has his ear, and that would be like the HyVees and the
Rockwell Collins and the (mumbled) I mean, you know, bigger businesses, and then if
they, God if they and ABI and Farm Bureau all kind of got on his case about this, I mean,
I think they might have more pull then we would.
Champion/ I ... I want to ask a question. First of all, I think for Iowa to pass up this idea and this
money is ... is economically ... economic disaster. So does the Governor have the absolute
right not to do this? I mean, tell me the...
Mascher/ Uh -huh, he can veto it.
Jacoby/ ...veto power.
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 7
Mascher/ That's why I said without his leadership... in pushing this forward, it's very difficult to
get it done, because he's using the House as the scapegoat (several talking) whatever he
wants whenever he wants it, and he knows that, but um, he's been using that as a
scapegoat for quite a while. So ... you know what I mean? I mean, he has!
Hayek/ This competitiveness issue, I think, is ... is really salient. I mean, I think for ... for a while,
you know, this was a project associated with the former Governor and ... and therefore
worthy of opposition just because of that. Well, we're several years out. That should be
ancient history, and this issue of Midwestern competitiveness is ... is extremely important,
and that's why these elected officials from Illinois and ... and Michigan and elsewhere talk
about rail as a bipartisan issue because if...as you see this hub and spoke, uh, system
develop out of Chicago, states that aren't jumping on this, and we are the glaring example
thus far (several talking)
Bolkcom/ ...Illinois's eating our lunch here. The Governor ... the Governor has a kind of a
Jones'n on Illinois, you know, that he's been over there trying to recruit Illinois
businesses because they raised their income taxes. He's ... I don't know if you're tracking
that but he's been just like Illinois- bashing. Fertilizer deal and this and that, I think, uh,
Governor... Illinois's beating us on this one! What you gonna do about it?
Jacoby/ We gave more money away to a fertilizer plant than we are (several talking)
Bolkcom/ ...maybe we could turn this into tax credits we'd have the money (several talking)
...would finance it.
Jacoby/ Well politically we're in the middle but geographically ... Connie's point, we ... we look
stupid. I mean, we're dead... dead center in the Midwest, you know, where we can have
people go up through Minnesota (mumbled) back down into Nebraska. Are you going to
do a semi - circle to get to Missouri? It's just...it...it really does look stupid (several
talking)
Dickens/ I've used the Amtrak. My daughter went to school in Chicago. So I would drive over
to the Princeton (several responding) stop, and I would spend money over there, which I
could have been spending (several talking) get gas, we'd stop to eat, we'd do ... so, and
then we'd pick her up in Mt. Pleasant on the way back cause there was another train
coming back on Fridays we'd come through there, but ... and back then they said Amtrak
was going to be coming through here in 2004. Well that ... all the maps they had up on
the wall and you know we were looking forward to it. Well she's 29, working here at the
store in Iowa City now. And Amtrak isn't any closer. But ... I see it as a big economic
boon for Iowa City because that's... people will be coming down from all the ... all the
areas that would be able to use that, and keep the money in Iowa instead of ... moving it
out of state.
Champion/ I think it's a boom for Iowa, not just Iowa City.
Dickens/ No, the whole state (several talking)
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 8
Jacoby/ I think it's a boom for the smaller towns that most people would not have an opportunity
to go through. Now it was a little disappointing that Representative Forristall, uh, on the
floor said he was against any kind of rail support because it gave the people in the town
where he lived in another way to move out.
Mascher/ They're moving by rail now?
Jacoby/ If you're going to move out I'm not going to load up on the train ... load up your stereo,
and a sleeping bag in your pickup truck, I guess but that's kind of the mind -set with a
couple people that we're working with but it ... let's go in, you know, thumbs up this year
and circle the wagons. Rebecca's been working on it too, uh, Tom and, uh, pull in the
big guns, Kate, uh, work on it and ... between both of `em hopefully working with some of
the other House members to at least be neutral, at least sit back a little bit and look ... look
at it. Uh, I'm meeting with the new guy, uh, Kaufmann, next week, I think next week.
Having just a quick coffee; we want to talk about things that we may agree on, and rail's
going to be the number one discussion (mumble) how do you feel about this.
Lensing/ And I think, don't you think we have to sell this as a benefit to the state? I'm not, I
mean (several talking) not make it an Iowa City issue because (several talking) then...
Jacoby/ Yeah, when you come to Des Moines, don't say you're from Iowa City (several talking)
Lensing/ Then the fireworks go off.
Jacoby/ Or Johnson County. (several talking and laughing)
Mascher/ Can you tell me where your negotiations are with Farm Bureau at this point? Have
you made the outreach and have they met with you and started discussions?
(male)/ (unable to hear, away from mic)
Hayek/ You may have to come up to the mic I think. Thanks, Geoff.
Fruin/ For a lot of other reasons that were just articulated, here we're trying not to be the, uh, the
loud squeaky wheel on this project. So we're, in ... in that respect yielding to Des Moines
quite a bit and... and Rebecca with the Chamber of Commerce is carrying a lot of the
water too because we don't want to associate this as an Iowa City project. Um, I believe
the .... the partnership in Des Moines, um, has considered some of those contacts with the
Farm Bureau. I'm not exactly sure where they're at with that though right now.
Markus/ I, you know, I ... I think it was a pretty strategic move though to add Council Bluffs to
this discussion, and I would hope that, um, Mr. Gronstal has...
Bolkcom/ He's fine! Yeah, I mean, he's ready to go. He's got members there like `we're going
to do this!'
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 9
Lensing/ Aren't there two more meetings coming up, one in Des Moines and one in Council
Bluffs?
Fruin/ Yes there (several talking) yeah. Yeah, that's on the environmental impact statement,
um, just the ... the typical public process on that, but there is a ... a, um, advocate group
that, we get together on conference call, uh, on a fairly regular basis. We're planning, uh,
a ... a series of talks in January actually, uh, in January, targeted to Des Moines and ... and
western Iowa. So, in addition to the ... the more formal open houses, which probably
won't draw a whole lot of interest, we're trying to bring in some speakers and .... and, uh,
promote it some other ways, as well.
Priority #2 — Responsible Tax Reform:
Markus/ So, with that, uh, so that we get you folks out of here on time, our next major priority is
responsible tax reform. Obviously we're in lock -step with, uh, the Iowa League of Cities
and with the Metro Coalition. We're all, you know, very similar, uh, aligned in this
particular issue. Um, from our standpoint, um, you know, we would like, um,
commercial property tax reform to result in ... in something that doesn't just shift the
burden to, um, another tax classification, namely residential, uh, so, you know, we're
concerned about how this gets rolled out. Uh, Joe, I know you had some suggestions in
terms of, uh, tax credit approaches to this ... this sort of solution. We think that that has
merit because then as the states abilities in terms of finance goes up and down, uh, the
credits relate to that. I think, Dave, you and I have had a discussion and I absolutely
agree with you, and it's not any different here in Iowa than in other places I've been, and
that is — this whole claim that we're going to backfill things, um, quickly evaporates in
subsequent legislative sessions so we're very cautious about the backfilling argument and
...and the concern with that. Uh, just some numbers, uh, for you folks. Our General
Fund totals about $52 million. And overall our total budget approaches $180 million.
Uh, property taxes make up about 60% of our General Fund, um, so over 30 mil, and
approximately 75% of our General Fund relates to personnel, uh, personnel. So it's
salaries, benefits, uh, and those types of issues. So ... (mumbled) that impact our revenue
streams certainly, uh, are an issue to us. Um, again, we like the tax credit, uh, approach,
uh, that has been offered, whether that's an income tax credit or some other program that
you set up as a separate fund, we think that that makes sense. Um, I've heard the
Governor speak and he's talked about ensuring that cities are not harmed, and ensuring
that the burden shift doesn't shift to another, uh, property tax classification, uh, namely
residential. Um ... we estimated that if the rollback were 15 %, phased in at 3% over five
years, that would be the reduction of about $620,000, and just to give you some relativity,
$620,000 equates to about eight and a half police officers. So, these are real numbers,
um, the ... the pain will be felt in personnel, uh, the pain will be felt with personnel that,
you know, that are not going to be working if these cuts have to be made. Um, reclassify
multiple from commercial to residential — um, if fully implemented in Iowa City, that's
about a $2.6 million hit, um, to the City and when you include the County and the School
in that number, that number rises to $6 million. Um, and ... and you know this whole
argument about the reform, um, the thing that concerns us is that there's a
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 10
disproportionate impact to Iowa City, to Ames, Des Moines — where we have higher
percentages of rental stock, and because our occupancy rates are so high. It's hard for us
to imagine that the landlords are going to pass this on to the, uh, tenants (several talking)
in those situations. Yeah, we just don't see that happening. So, if the argument is is that
this is creating property tax relief, and you know, I've been a renter in my life. Believe it
or not when I ... I and my wife started, we lived in ... we lived in federal housing. Okay?
And I, you know, to get these benefits down to the people that need `em, this isn't going
to work. I don't buy it!
Mascher/ Well, and Tom, we know that's true, because we tried to put amendments on that said
they would reduce the rent proportionally to the decrease in taxes to the ... to the landlord,
and of course they didn't want any part of that. And so we know that that's all (both
talking) of course it isn't. They have no intention of doing that.
Markus / And the other thing I want to point out to you is ... um, our, my discussions with our City
Council have been very pointed about our property tax rate. This city recognizes that our
tax rate is higher than our neighbors, in Coralville, in Libertyville, or in North Liberty
(laughter) We know that...
Jacoby/ We're getting' bigger!
Markus/ We know ... we know that we have to ... we have to sharpen our pencils. We know that
we have to be competitive, but we have some built -in programs that we provide and that
are mandated that I'm going to talk to you about a little bit, that cause us to place more of
a burden on our property tax. And so we're looking at those programs. We're looking at
our tax rates, and we're looking at those to make ourselves more competitive. We can't
just blame our neighbors for, you know, growing their tax base. We need to compete. At
the end of the day we know that, and we will. Um, so ... this ... this approach, I want to tell
you, we lowered our tax rate last year, uh, 57- cents, okay? That was the largest tax rate
reduction in a, of the local jurisdictions, and it was the largest tax rate reduction of the ten
major cities in this state. So we're serious about this. We're working on this, and we
will continue to work on it, and I mean, knowing what the situation is with the rollup this
year, we're going right at it again, trying to figure out how we can lower our tax rates,
and still provide the same level of service as before. So...
Jacoby/ Is there any numbers cause I ... I'm generally interested in ... in a gradual rollback for
commercial rates. And I noticed that you figured it on 3 %. I don't know if anyone did
some of the numbers about the ... how the growth offsets that reduction, or if you have
any numbers. It ... we don't have to do that right now, but if there's anything that (both
talking) whether it's 1, 2, or 3% per year and then ... as you well know, my biggest
frustration, uh, my days on Ways and Means are numbered here for the next 24 days is
that, uh ... and you know but I don't think the public understands that the residential rates
have gone up over the last three years and it has nothing to do with you as City Council
people have done or us at the state. It's simply because of one factor — it's that tie to
agriculture. And so because agriculture is in joint or that ... that increased productivity
and ... and price per acre that cities valuations are going up. It has nothing to do with
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 11
what you or we have done, and ... and (mumbled) I know I'll probably grow a full head of
hair before it happens but I'd love to decouple agriculture and residential.
Lensing/ And that's not part of the discussion, now is it, Joe?
Bolkcom/ No. And (both talking) the ... the responsible city that Iowa City is, you know, as the
rollback has creeped up and is going to continue to, the levy rates have been reduced. So
you know while there's more to capture, because of the rollback going on. Um, cities
are, you know, it's not only what's at value, but what's the levy rate and your levy rate is
being adjusted downward to show that there's more available, uh, resources there. So um
...I, my judgment is we're gonna, I mean, the Senate's proposal targeted to Main Streets,
targeted to small businesses, working as a credit, phased in as we have the resources to do
it. That's our starting point. Uh, the cities have been supportive of that. The counties,
the school board ... the school boards, um, and I think that's where, having traveled the
state this last election visiting a lot of communities, um, while we have our challenges
here, there are a lot of Main Streets across this state that could use some ... that could use
a little bit of relief to frankly pour some money back into the storefronts and building
maintenance and the kinds of things, uh, that older, older buildings on many, many, many
streets in many small communities really are in dire need of. So that'll be our approach,
you know, the Walmarts of the world will, in the ... in the big industrial, uh, property tax
payers, uh, the ... the Governor's their advocate and hopefully, you know, we'll be able to
... come ... come to some agreement and some compromise. We're going to have to deal
with part of that but he's going to have to see the benefits of...of our plan and any kind of
compromise, it's going to go forward, but I think at the end of the day, I think we ... we
went into this session believing we had to come to a deal in (mumbled) in 2012, and uh,
because of the election — people want to see this! Both sides, and we ... the wheels fell off
and so I ... I mean I think a number of members of our caucus were ... were frustrated with
that but uh, I'm not of a mind that we need to make a bad deal, uh, that undermines the
ability of cities in particular, uh, and counties to ... to .... to do all things that people want
them to do, including be a strong partner with the state and economic development work.
Hayek/ This was, you know, the huge issue at the 11th hour of last year's session and uh, or the
last session, and um ... and ended with no resolution, which was also surprise ... do you
think it's the first thing that comes up?
Bolkcom/ No (mumbled) no. I think it'll be a talk, you know, be a conversation throughout the
session and, I mean, we'll ... the Senate's plan will be reintroduced and uh, we'll move it
forward, but I think we have ... we have some other tax priorities around. Earned income
tax credit, around lowering the rates for working, low -wage families. We ... we have
some of the earliest filing thresholds, you know, you make $17,500 in this state, making
minimum wage, and you pay state income tax. We're in like the ... we're in the top five
of when people start to pay. We have a significant poverty problem in this state that's
holding our state back, and I think that's going to be one of the tax policy areas we're
gonna ... we're gonna focus our attention on as opposed to giving big tax cuts to people
that don't need it and ... and large corporations that don't need it.
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 12
Jacoby/ It'll ... it'll come out of the House within weeks of us startin'. So I ... it'll be interesting to
see if...if the reclassification for multi - family buildings is included or not. I'm hoping
that's a separate discussion. In the early discussions I've had with (mumbled) others is,
they're, you know, Jacoby, what about your sep... creating a... a separate classification
and your 75 %. (mumbled) it all depends on what we're doing with everything else —
75% would hurt us in Johnson County significantly. 75% doesn't hurt Sac City a whole
lot, you know, with both their rental buildings. So (both talking)
Bolkcom/ ...the House needs to get serious, I mean, the bill they passed multiple times was like
everything in the kitchen sink. You talk to `em about it and they go, well, that wasn't
really a serious proposal, you know, we just put everything in there, you know, they
...we didn't get down to what makes sense and what we can afford.
Jacoby/ Let me tell my story about it. Real short! The gentleman that gave the bill the run first
...first one outta the shoot came over to me like an hour before he ran it and said, whoa!
I didn't know property taxes had anything to do with the schools. I looked at him, I said,
and you know, he's a freshman or was a freshman. I said go back to your leadership.
(mumbled) ...why the hell are you ... heck are you giving me this bill to run but I ... I'm, it
was a new guy and that's what he said — I didn't realize this had anything to do with
schools. I thought, well ... this is going to be ugly. Well, it's going to be kind of fun on
the floor but (laughter) but that shows you what, you know, it's a political impetus,
puttin' it forward without someone really knowin' taxes at even a second semester,
freshman level.
Priority #3 — Increased Funding for Road and Bridge Needs:
Markus/ (several talking) So our next priority, #3, is the issue of, um, trying to get the road and
bridge funding, the road use tax, uh, improved. Um, obviously we use ours to fund street
improvements and uh, capital needs, and I can tell you, uh, as I, uh, examined coming to
Iowa city, I got to watch all of our Council meetings on ... on board and one of the things I
saw them do was increase the amount of...of, uh, debt that they would consider issuing
on an annual basis, and I started to drill down into why those things were happening and
it was because some of the traditional revenues that supported things were falling off,
causing us then to look at shifting how we funded things and one of those things was
more and more we're funding roads through GO bonds. Well GO bonds are retired by
property tax. So the ... the failure to keep our ... our road tax at an ... at an appropriate level
has shifted the burden over to property tax, which you know at the same time, the
Governor's having conversations and everybody's talking about reforming property tax,
there's other things that are happening that are putting the pressure on the property tax to
begin with. Just so you know, the ... the gas taxes in this state are 21 -cents for gas, 19-
cents for gasohol, uh, and 22.5 -cents for diesel. And this is a little difficult for me to read
so I've really got to pull back (laughter) but in the case of Iowa, we rank 28th in terms of
our tax rate for diesel. In the case of gasohol, we rank ... uh, 33rd ... no, 39th. In the case
of, uh, just pure gas we rate 28th. And our, urn ... neighbors, Wisconsin, Illinois in
particular, uh, Nebraska, and Minnesota, all rank in a place where there rates are higher
than ours. So from a standpoint of... of where you buy your gas, I don't think an
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 13
adjustment in our rate is going to necessarily cause that elasticity of demand to cause a
volume reduction in how much gas gets purchased. What's happening of course is
vehicles have become more efficient. You know, there's less people, um, buying
vehicles necessarily, and there's alternative forms of transportation that people are using
so that reduces the demand on gas. I think our rates can stand a review. The Governor's
own Transportation Committee that studied this came up with several recommendations
for increases; nothing got done about it. And I think we do need to take, I mean, even
though our vehicles are more efficient, even though maybe there's fewer vehicles on the
road, we aren't reducing the number of miles of roads that we have, and they still require
the same level of maintenance, and on the expense side what's happening, of course, is
you know asphalt prices, commodity prices are going up, salt prices are going up, all of
those things are going up, so the burden ... this has been another one of those burden
shifts. It's moving from, you know, a user -fee approach over to a property (mumbled)
property tax approach and we ... we need to address that. Um...
Bolkcom/ Has anybody done any analysis on that point, I mean, that's a great point. I mean, I
assume ... I assume other large cities are bonding for road projects (several talking) what
kind of...the relationship — it'd be interesting to see that for the ten largest communities.
(several talking)
Jacoby / And they're all GO bonding... against property taxes (several talking)
Markus/ Well, GO bonding more and more, you know, we could ... we could make smaller CIP's,
capital improvements, you know, out of the use of...of operating income, but now it just
becomes easier to just shift the capital improvements right into the CIP, and make the
improvements there. And the other thing that happens is that ... there is a point in the life
of a road where if you keep the maintenance up, you extend the life. If you defer the
maintenance, you've pushed that road into a road that needs to be fully improved, and so
what's happening is me ... maintenance is being deferred, which is not a good thing, and
it's pushing these roads into what causes them to be fully improved, needing a full
improvement. That's not smart ... investment from the public side or the private side.
And so if this number could get to a realistic number, I think we could do the
preventative maintenance that lengthens the life of roads and avoid some of that CIP,
which puts pressure on our property taxes.
Throgmorton/ Joe, you asked about whether there's been any research done on this. I think the
Transportation Research Board people have been lookin' at it for at least ten years, cause
they've been able to see ... look ahead and see that this is going to be a serious problem.
So maybe you could check with Pete Domi (mumbled) Domiono over at the Police
Center (several talking) ...transportation people there.
Jacoby/ ...to get out in the (mumbled) and too how much roads and bridges cost. Because I just
remember having a discussion between Tiffin and Coralville (mumbled) bridge over
there and they're talking about an arterial road and (mumbled) it'll cost $7 million, and
people, no, it doesn't cost that much! You'd be lucky to have a bridge for $7 million
with the amount of traffic you're looking at. I sure hope someday that we'll look at the
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 14
road use tax fund formula, uh, it's been frustrating .... my numbers are, I don't think,
amazingly accurate but even ... even with X21 I think Johnson County residents 37- cents,
up to 47 -cents of every dollar we invest in the fund goes away. And so we've got that
great highway 20 going to ... (mumbled) (several talking) Sioux City! And now that it's
connected and I use it when we go to visit the mother -in -law, you're driving down the
road, and it's a beautiful road but it's hello, hello, you know (mumbled) the road use tax
formula and then, uh, gas tax, to be honest with you, I'm not a huge fan of it but uh, the
Governor's kind of blown that up already. We had the meeting in Des Moines earlier this
week and ... and instead of, it was his idea originally, and he won't put forth a bill and
then we discussed it with Linda Upmeyer and other part of the panel and Governor said,
well, I don't know if I would veto it or not. You know, that's not leadership! Saying
maybe if it gets through the legislature I wouldn't veto it!
Mascher/ That's his communication style!
Jacoby/ (several talking) Well he needs to talk more better! (laughter) Cause that's just, uh,
workin' that way but (several talking)
Mascher/ Well at one point he was tying it to the property tax issue too, which is a non ... a non-
starter. If I do (both talking) property income and the gas tax then we can get a deal.
That's an enormous hurdle to jump, and I don't know that that's realistic. So I ... and I get
frustrated when originally he had a proposal that would have, um, taxed hybrids. There
would have been a higher fee on hybrid cars when you bought them. Because they don't
use as much gas, and I'm like, are you kidding me? You don't want to disincentivize
people buying hybrids; you want to incent that, because that's a good thing! But, I mean,
that's where I get frustrated with sometimes the lack of leadership and ... and not being
able to put forth an agenda and then really promote it. So he plays both sides of the aisle
all the time in terms of, well, I might pass it if...I might sign it if it came through, and yet
not providing the leadership to get it done.
Markus/ You know, one of the compelling arguments to me for a gas tax, uh ... uh, fuel tax ... to
me is follow the money. Who's paying it? You know, if it's property tax, it's typically
people that are residing here and living here. If it's gas tax, just go out onto Highway 80.
Mascher/ Is it 40% outside of the state, David? Isn't it (several talking) yeah.
Markus/ ...it's a huge number that's coming in as an import of revenue.
Mascher/ Right.
Markus / And it's not being extracted from our own people. It only makes sense, and if you go
into the neighboring states, which we do...
Mascher/ All the time!
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 15
Markus/ ... then ... then we're paying the premium when we go there. It just makes sense that,
you know, you want to be a nickel below what everybody else is so if somebody makes a
conscientious decision getting close to the border, do I buy the gas here or do I buy the
gas here ... we want `em buyin' it here, because we want the elasticity of demand to
suggest that we still want the volume here, but it's people from out of the state that are
coming through here. You've got major intersec ... you know, interstates runnin' through
here. Let's sell `em the gas! Let's pick up the tax and then, and it keeps the burden away
from our property tax that way. To me, I ... I don't understand why... (several talking)
well and I ... and I think sometimes we all get caught up (several talking) I think we all
get caught up in the argument of no new taxes. No additional taxes! Well there's always
going to be taxes, and you have to measure the equity of the tax — who's paying it, you
know, and how do all those things play out. We're going to have a full array of taxes.
Let's impose taxes that make the most sense for the people that live in Iowa, and that to
me is one where you get a lot of, you know, outsiders helpin' to pay the bill! So why
wouldn't we go there? Um, the last, uh, issue...
Mascher/ Can I just ask, did Farm Bureau come out in support of that? The gas tax? (several
talking) Are they this time around? (several talking) I didn't know that they had. I...
Jacoby/ (several talking) ... favor, as long as it doesn't go (both talking)
Mascher/ That's helpful! That ... that's a (several talking)
Fair and Sustainable Pension Systems:
Markus/ All right! The last one, you know, and I ... and I know our delegation here, I'm sensitive
to how you might react to this issue. And ... and it's titled "Fair and Sustainable Pension
Systems." But I want to give you a little bit of my perspective... you know, as a manager
that's served in other jurisdictions. And I ... and I've kind of come to the conclusion in
my life that, you know, it's great to be generous to your employees. It's good to be fair
to your employees. But, when you give benefits away that are not sustainable, ultimately
you haven't given them anything, and you've actually caused them to rely on something
that potentially they can't depend on, and that's the way I, I mean, that's what Michigan
did. That's exactly what Michigan did and I don't blame unions. Let's be clear about
that. I blame both management and labor, because they didn't negotiate what should be
known as a sustainable benefit. I'm not saying that this is not necessarily a sustainable
benefit, but if you start to look at the numbers on ... on this particular pension system, you
really have to be concerned about whether this is financially sustainable, and I ... I want to
give you some...
Jacoby/ Is there ... I'm sorry (mumbled) being a baby boomer, is there a chance that we're in a
tipping point where there's more retirees receiving benefits than we have people...
Markus/ Coming in?
Jacoby/ ...coming in or actually (several talking)
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 16
Markus/ You're abso ... you're abso ... and in fact, when you read this (both talking) that's exactly
the situation. Exactly the situation!
Jacoby/ Okay.
Markus / And that exacerbates the problem that we're having with the, um, the uh ... the MFPRSI
or for short the 411 pension system. Um, right now, and first off, a lot of people don't
understand that this only applies to 49 of the municipalities across the state. And... and I
asked staff to do a little research on this, and what' interesting about the numbers here are
that this goes back to I think 1990 and in ... in 1990, if your population exceeded (away
from mic) 8,000 in population, you were in this system, but since 1990, a number of
municipalities across this state have raised their population beyond that number. They
haven't joined this system. They stayed in the IPERS system. Now I want you to think
about something. That means Coralville. That means North Liberty... are not in this
system. But Iowa City and some of the older core cities are. And so what that means is,
that our proportionate expense, okay, is significantly higher than what's happening in
Coralville and what's happening in North Liberty. And our police officers, okay, and
their police officers in ... in all these other jurisdictions that aren't in this system, okay, to
me are at risk, and understand something. I don't have anything against police and fire.
As most of you know, my son's a police officer with the City of Chicago. And so he and
I have some interesting debates about what he's entitled to and what he isn't (laughter)
you know, from a manager, you know, labor standpoint, and I come from a (several
talking)
Hayek/ Father -son! Yeah!
Jacoby/ Is he Cubs or White Sox? That might explain a few things. (laughter)
Markus/ Dan's a Cub and Charles, the other boy, he's a White Sox!
Jacoby/ Okay!
Markus/ It's all in the family, right? (laughter) Anyway, he ... here's the interesting numbers.
When you look at IPERS, the employee contribution is 5.78 %, okay? When you look at
the, uh, 400 system, the employee contribution is 9.4 %, significantly higher. But here's
the rub, from a city standpoint, the employer rate in IPERS is 8.67% and in MFPRSI, it's
30 %! Now what that means is for every dollar that we pay our employees in salary,
there's another 30 -cents going to the pension system. And as Dave accurately pointed
out, the tipping point's been passed. We now have more beneficiaries than we do
participants in this system. The other thing I would tell you is that ... yes there's... there's
lots of ways to approach the resolution of these issues. There's the revenue side, and
there's the expense side. I can tell you the revenue side is usually the easy side that
people go to, but let's just throw more money at it. Okay? Now the State's part of the
problem here. Okay? The State decided in 2010 to ... to go into a decline on their
participation and their contribution. And they started doin' that, and so ... in 2012, that
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 17
was their last contribution. Now, the ... the 411 board, um, I sure the unions'll be on
board. I'm sure the Metro Coalition. I'm sure the Municipal League will all get on board
and they will support an additional state contribution. But I gotta tell you, and I ... I've
served on pension boards for decades, I understand unfunded accrued liability. I
understand actuarial analysis. I get all that. This system is challenged, okay, and think
not only do you have to look at the ... the revenue side, you have to look at the expense
side. And again going back to the theory that we want to treat our employees fairly, and
fairly to me means providing a benefit that they can count on. Now what I would say to
you is that maybe what has to happen is that we have a contract with our existing
employees. We've promised these things to our existing employees. I get that, and I
think we should honor that, but what I would say to you is that you have to take a serious
look at who we haven't hired yet. And we have to look at who we haven't hired yet and
define what benefits we should be providing to them that are sustainable. That's called
tiering. Unions don't like tiering. I get that. But unions are going to like very much less
the fact that they don't get the benefit they were promised, if in fact the golden goose gets
damaged so badly that we can't pay for these ... these things in the future. So ... I ... I
understand these things, and I will tell you what happened in Michigan. The cost of the
benefit structure got to be so much that we had to start reducing the service levels in other
parts of the operation. Now, I don't think your public's going to like that, and ... and
these things never translate very easily to a discussion with the public. I get that. I think
that the... employees that understand this, that directly benefit from this, I think they need
to step up and they ... we need at the state level, because we can't negotiate these things,
cause this is a state - controlled pension system. I think that discussion needs to take
place. I'm not anti - union. I'm not anti - employee. I'm about what's fair and ... and just
think about, is it fair to be saying that only 49 cities in this state should have their police
and fires eligible for this system, when all the others are in the IPERS system? And
they're being treated, uh, differently than those? I think that those are real issues, and I
think what else is happening is it's driving our tax rate up, and it's actually causing more
of an urban sprawl situation aways from ... away from the core cities. So we've got to
think about these systems and I think we have to be fair to the employees that we've
promised things to, but I think it's a different equation for those employees that haven't
been hired. And I can tell you, if we open up jobs right now for firefighters and police
officers, I will have a dearth of applicants, qualified applicants. That's not an issue.
Okay? We will get `em, under this system; Coralville will get `em under the system that
they have, as will North Liberty. But it's putting us at a competitive disadvantage, and I
think it's something in the long run that this state needs to deal with and address. So...
Mascher/ Tom, can you talk about ... nobody ever brings up the fact that the 411's don't pay into
Social Security.
Markus / Right.
Mascher/ And disability, correct?
Markus/ Well, there's a disability component as I understand it in this system too, and one of the
problems that we have is that there's been recent decisions to unilaterally say that any
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 18
cancer is job- related. Any heart condition is job - related. Now, you and all ... you and I
both know that that's not universal. That's not the way those things happen. But when
you make a policy determination like that, the actuary looks at that and says ... they look
at the tables. Who's subject to this, you know, and ... and now it's all part of the system.
Mascher/ And ... and, Tom, just to stop you for a moment. The reason that was done, and that
was done when Democrats were in control. I know that because we were part of that
decision. If you look at the statistics on that group of people only, and compare it to the
normal population, their cancer rates are so much higher. And their death rates are so
much higher. They die at a younger age. They don't live as long as a result of their
employment and what they do. I ... I don't think you can argue that!
Markus/ I'm not going to argue that.
Mascher/ Okay. All right.
Markus/ I'm not going to argue that. All I'm saying is ... honestly, you have ... you have split
your departments already in this state. You've already tiered `em in this state, and I'm
saying you have a very expensive system and then you have a system that I think is more
moderately priced, which I believe to be more sustainable.
Mascher/ Okay.
Markus / And I'm saying that those employees that have not yet been hired, it might make more
sense for us to have a serious discussion with the unions in this state that represent police
and fire about going forward, how do we make this more sustainable? I mean, the
growth, um, let me ... let me give you some numbers. Um, that are in here ... we estimate
in the six year period from fiscal year 11 through fif... fiscal year 16 that the, uh, increase
in cost has gone up 106 %. That translates to $1.6 million. That's just in the ... in the
pension system. The increase in fiscal year contribution alone is estimated at $215,000.
That's an extra 7 -cents on our tax levy. Over the six year period that I mentioned earlier
where the costs rolled up $1.6 million, that's a 56 -cent tax levy increase. That's what we
reduced it. We reduced it I think our tax levy 57- cents. It's all being chewed up by this
mandate that we're required to participate in, and this is comin' right out of property
taxes. The very thing that I think I need to get down on behalf of this community to be
able to compete with Coralville and North Liberty. Coralville's taxes I think are $3 to $4,
okay, per thousand cheaper than ours, and guess what? North Liberty's are another $3
less than Coralville's! Okay? So what we're doing is we're creating a tax incentive for
people to ... to sprawl, to move further out, at a time in my opinion where the current
thinking across the country is to get people back into the core cities because you've got
the infrastructure there. You have some employment centers there. You can reduce the
carbon footprint by putting them back in the core cities, and that's exactly what we're
trying to do here. And so ... we've got some policies in place that are contrary to those
things. Now some of this stuff happens (mumbled) it isn't ... it isn't a deliberate decision.
Some of this stuff evolves over time. It's just the history of this state. These things
happened and they grow that way, and so every so often you have to look back and have
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 19
those kind of thoughts about does it need to be reconfigured, and I think this is an issue
that we need to re- examine. But I do agree, we gotta bring all the people around the
table, and have an honest discussion about it.
Mascher/ Tom, if these folks were on IPERS, what would the increase be? Do you see what I'm
saying?
Markus/ Yeah. We can ... we can give you that, and in fact the union and um, the public
employees have sparred over this issue and when the union spars back, they throw in the
cost of Social Security and we look at those things back and forth. Um, everything I've
been informed about is even when those numbers are tossed back in, our costs are higher.
Mascher/ And that's what I want to see.
Markus/ And ... and we'll get you that.
Mascher/ Okay.
Markus/ That's... that's a fair question. I, you know ... I understand the politics of this very well.
It comes right out of my family, like I told you. I get that, but I think we have to be fair
about what we're doing.
Bolkcom/ I ... I actually, I mean, this is not ... this is a perennial issue. We've had this
conversation at this table probably in the last four or five years and I think it does need to
look ... be looked at, I mean, and ... and bring the parties in and, I mean, I think we ... you
know the ...I think we have a very good public employee retirement system under
IPERS. I think the State has done a responsible job and the employees, uh,
notwithstanding kind of the ... the hits to all pensions, uh, across the country when the
markets went nuts in... a couple years ago. But I think we have a really strong pension
system. I think the average, uh, average monthly check is about $1,200 for the average
IPERS employee. That's like super - overly generous, right? But I think it is important,
uh, to have us a solvent system. And I guess I have concerns about the solvency of this
one, um ... and I think we need to ... I know ... I think it's an IPER ... or it's a pension year.
(several responding) No?
Mascher/ And they did not do anything last year, Joe, if you remember.
Bolkcom/ That's what I was thinking.... that's what I was thinking it was. So, um, so I ... I do
think it needs ... I think it needs to look at. I don't know what ... I don't know exactly what
the mix of changes are but this isn't going away as a concern.
Markus / And I will tell you, I've been impressed with the IPERS sys... system since I've been
here. I think it's prudent. I think it's appropriate. I think it's well- managed. I think
it's...it...it does a lot of the right things and uh, in comparison to the other states I've
been here. The other...
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 20
Mascher/ Tom, can I just say, that's because the members and the people who are a part of it
have chosen to give up some benefits to be able to do that. I mean, I think people need to
realize that too, because I think oftentimes public employees are painted as the bad guys
in this discussion, and I don't think that's true in light of the fact that they've been willing
to give up benefits to make the system work.
Markus/ Yeah, and I would...
Mascher/ (both talking) ...pretty significant ones.
Markus / And I would say to you, I ... I see that, I recognize that, and I think it's ... I think it's what
drives why Iowa is got its nose above water fiscally compared to, uh, the bulk of the, uh,
Big Ten area. I mean when we talk as managers from the Big Ten cities, uh, Iowa,
Nebraska are the two places that still, you know, seem to have their fiscal house in pretty
good order compared to the other states. We're very fortunate. The last thing I wanted to
share with you, and I'm going to hand it out, um, and this was handed to me. Geoff came
across this. Geoff of course spends his ... spent his time in Illinois. I spent 11 years in
Illinois. I spent 22 years, almost 22 years in Michigan. And so we bring kind of a
different experience, you know (laughs) to these situations. Uh, we ... we think we've
landed in, uh, in a very great place because things fiscally are very sound and we're in
good shape here, but we're very cautious, okay, because at times those places were in
good shape at one point in time too and we don't ... you know, we have these
conversations about not letting us get to the same place that some of these other places
have. There's a... it's called the Kahn Academy Overview of the State of Illinois Pension
System, and I've got a web site on here for you. It's just a seven - minute blip, and
pensions are difficult to understand. This little clip puts it in great lay persons' terms and
it shows how these systems work and how far out of whack Illinois is, and I think it gives
you kind of a foundation to look at these pension systems with a little different
perspective about what we all have to watch. So I'll hand those out and if you get a
chance, I'd really encourage you to just take a look at that clip and... it's... it's really
pretty well done. So ... and that's ... I think I've said enough!
Bolkcom/ They're doing well on trains and not so well on pensions (mumbled) (several talking
and laughing)
Hayek/ So that's... that's all we've got. Uh, this ... these, uh, these four pieces along with some
others were, uh, have been discussed by Council. They're approved by resolution.
They're... they're our official priorities, um, we look forward to working with you, both
directly, uh, as elected to elected, uh, with our staff, with ... with Tom and Kate, um, who
we're hiring for a second year, uh, to ... to represent Iowa City, and of course to the Metro
Coalition, um, and ... and the League. So ... many points of contact and ... and uh, it'll be
exciting as we ... get out a few more weeks and start the ... start the show again.
Mascher/ Can I ask, um, you didn't have TIF on here and I assume there was a reason that that
wasn't on the list. We worked a great deal with both our city administrators and Tom last
year in terms of that particular issue. I'm just curious about the changes and how has that
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 21
affected you and are you pleased with those and are there other things we should be
looking at?
Markus/ All right, let me say this, um ... when we went into that issue, you know, there was
specific incidents that obviously led us to be concerned about that, um, in working with
Tom Standberry and, um, our staff, we picked, uh, four areas, um, that we felt needed
immediate attention; um, and that..the legislature, I think took those on and addressed
them. The reality is, there's, um ... we have been conservative, maybe ultra- conservative
in our use of TIF, and yet there's a whole number of jurisdictions across this state that
have, uh, used TIF to a much more liberal extent. I think our... our approach to it was, to
look at items that we thought we could make change on, and I... and I would say to you
that we haven't come back with TIF amendments at this point because one of the things
that you did amend was the reporting requirement, and I think getting some information
from the reporting requirement will in fact inform us as to whether additional
amendments are necessary. But I can tell you that the League and, uh, even the Metro
Coalition, um, there are ... there's more members that had strong positions about using it
and not curbing it than we did. So it took a fair amount of finesse, um, I ... I give, uh, Joe
Bolkcom and others, uh, the Medal of.. of Valor, maybe even a Purple Heart, uh, for
taking on that issue, and sitting right next to him, Dave, took a position in support of TIF.
So it's not an easy issue to resolution to. Now I tell you one of the things you're going to
see in the newspapers in the next month or so is we're going to be, uh, bringing to our
City Council what we call the Corridor Compact, and the Corridor Compact, um, is
somewhat an offshoot of the amended legislation that's going to talk about how we
behave amongst the three jurisdictions, and hopefully we intend to expand that to
Johnson County too. And that compact will talk about pirating of business. I don't really
care for that term. It just sounds too swash- buckling I guess, uh, but um ... it will talk
about how we behave, and ... and is important to me as ... that message is, I want the
message to be that we can get along, okay? Our jurisdictions can and will get along, and
what we need to do is open up our lines of communication. But make no mistake about
it, um, I have serious reservations about how TIF is used, and in certain circumstances I
don't support how TIF is used. Uh, the New York Times has done a series of three
articles over the past, I don't know, couple weeks and you should really pick `em up and
take a look at `em. This is not just an Iowa issue. This is an issue that's gone across the
country, and you know, I... Michigan got rid of `em because Michigan was forced to, but
Michigan is a big focus in those stories about General Motors, about movie credits and
about all those things, okay? And ... to me sometimes it's just movin' the, you know, I
think somebody was quoted as, oh, it was Jennifer Granholm, the ... you know, the former
Governor of Michigan, just movin' the chairs on the ... on the deck of the Titanic. And,
you know, you really have to wonder about how much that's used. Now I will tell you,
there's by- products to the use of TIF. The more TIF gets used, the higher the expectation
is that TIF will be used for everything. I mean ... people... people don't come in with
proposals. People come out with ... come in with their hands out, and ... you know, I think
there's ... I think there was misinformation that ... that occurred in some of these
conversations. On the other hand, I think the Fisher Report, um, served as a good talking
document about what we need to be concerned about, and how we operate, and so I think
we ... I think we need to grow. I think we need to educate each other on whether TIF is
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 22
TIF is always the right thing to be doing, and I think we probably need, you know,
eventually, um, some more curbs in that regard, but I think what we're waiting on is
some concrete evidence that's going to be coming from the reporting process.
Hayek/ I would add to that ... that these priorities reflect, um, obviously things that matter greatly
to Iowa City but things that we think are... are highly relevant to this upcoming session,
and you know, the fact is that we did get some modest reform last year and I don't ... I ... I
think it's our sense that the appetite for continued TIF discussion, at least so soon after
the ... the new legislation was ... is not there.
Mascher/ I ... I guess I was more looking at how are the changes working and whether that's
going to result in some, um ... I don't know, attitude changes or differences in how people
look at them.
Hayek/ (both talking ) ...too soon to tell.
Mascher/ Okay.
Markus/ We're opening up, uh...
Mascher/ And you made that comment that once the reporting starts coming out that there may
be, um, more of a pressure for .... for people to take a look at that.
Markus/ Kelly Hayworth, Ryan Heiar, and myself met this week to discuss how we behave
going forward. So we're having those discussions, and I'd rather have `em that way than
necessarily having them, you know, in a... statewide debate. Um, I do think that, you
know, we still have issues there. And ... you know, the traditional role, I see us as the
core community here. You know, Iowa City's the core community. To a much lesser
extent than like Chicago, Detroit, or Minneapolis. But we still kind of serve that
function, and as we age our infrastructure ages, we have to constantly reinvest to be
competitive, and it's always easier to go out and build on a green pasture than it is to
redevelop an existing site. So we have those challenges. Um ... so I, you know, we ... we
need to make sure that ... that, uh, Coralville and North Liberty understand that in my
experience at least, if you damage the core city, uh, because of loss of tax base too
substantially, all of us suffer. Everybody around us will suffer from that. You need a
healthy core city. And all I gotta do is point to Detroit to tell you that look at the
surround suffer... suburbs, and understand how they suffer in reputation because of
Detroit's demise. So ... I think we all have to understand that yes, new business into the
area lifts all of us, just moving businesses from one, you know, vicinity to the other,
there's really little net gain from that in my opinion. So...
Mims/ Tom, do you remember the name of that series cause I heard it on NPR. It was United
States of..
(male)/ Of subsidy?
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 23
Mims/ Of subsidies, is that it was?
Markus/ We can get you copies of it.
Mims/ Yeah. Well, and the other thing I would just add, they had a ... NPR had it on. They were
talking about it and one of the things that was really interesting is the woman who did all
this research was, how many consultants there are out there, who all they do is service the
middlemen between the business, the corporations, and the cities, and their incentive is to
get these subsidies because they get a cut of them. (several talking) Yeah, they were
talking 30 %. So you know as cities or counties or states you don't necessarily know
what the company really needs in order to come, because these consultants are going to
inflate what they need because they're making money off from it, and it's a huge business
out there. They talked about Ryan Company out of Texas I think (several responding) is
a huge one that's nationally doing a lot of this work but so I haven't seen the articles yet
but I ... I heard a thing on NPR. It was very, very interesting (several talking) Yeah, I
want to...
Bolkcom/ I ... I would say on TIF, I mean, I appreciate the leadership of Iowa City, uh, and ... and
the Council's support of...of the reforms that we worked for, uh, the Legislative Service
Agency and Department of Management this summer have worked amazingly to get a
web -based reporting system up. I think that you're already reporting your TIF stuff and
other communities are, uh, it'll be live shortly, but I think ... I think that there ... the feeling
is, let's assess the data. I think they're going to be, I mean, I thought we ... I think we
knew a lot about what's going on, but I think there're going to be some surprises that we
see in these reports as they kind of, yeah, so uh, so that's good. Uh, Dave and I both
on ... on Wednesday are going to be with the Tax Credit Review Committee, uh, which is
a committee that's been ... was set up when we were in charge, uh, to basically begin to
look at all the spending on the tax credit side, and one of the, uh, one of the credits is the
fund of funds, and it's, uh, it's the latest, I mean, and it's going to be reported on but the
news is we're taking about a $25 million loss because of this wonderful tax credit that,
essentially, hasn't worked and, uh ... um, but we need a far more attention to this, uh, in
terms of our work as a legislature, uh, to reign it in, and I mean, at the end of the day, it's
turned out to be this kind of, uh .... uh, entitlement, if you will, that companies from the
best of `em, you know, like Deere and Company. They, you know, they have their...
they have $3 billion n profits, but they expect that we're going to, as a taxpayers, uh,
subsidize them and ... and I don't know if the word's greed but ... I ... we've come to this
place where people are extraordinarily greedy, uh, for these credits. I mean, it's... and
...and the pressure on states, I mean, the fights, you know, we ... we don't want to disarm.
We have to have these programs. On the other hand, uh, it's ... it ought to be part of this
national conversation about the debt, uh, and about how we're going to get our financial
house in order (mumbled) large is all this money we're pouring out the door to essentially
very, very, uh, profitable corporations, both here, uh, you know, the $110 million we
gave to the, uh, probably the richest family in Egypt to come and build a fertilizer plant.
Do they, you know, do they really need our money, all right, so it's ... it's a challenge but
it's something that we're actively focused on to the greed which we ... we have power
over it.
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 24
Markus/ Jennifer Granholm, that was exactly her point. We need to have a national discussion
about what the policy should be across this country because we ... nobody can disarm,
because once it starts (several talking) we just keep, you know, going at each other.
Hayek/ It's the universal expectation!
Mascher/ Yeah.
Bolkcom/ Thanks for havin' us!
Hayek/ Yeah.
Mascher/ The only other question I was going to have is, we usually don't meet with you except
for right before session. There are some groups that we meet with during session. And I
don't think that that would be a bad idea. I'm not looking for another meeting — I don't
mean that! I know you all have enough (several talking and laughing) but you love `em.
Terry, thanks a lot! (laughter) Okay, but it might be helpful if we met a couple times
during sessions. I'm ... we're only there really about those four months, and uh (several
talking and laughing) and so I just think sometimes communication, um, is better and we
can keep you up to date and um, you can let us know if there are things that are ... I know
we can certainly do that through Tom and Kate but it's sometimes helpful to meet face -
to -face and have these discussions (several talking)
Jacoby/ ...but I'm open (mumble) Tom and Kate are talking to all of our friends around us,
that ... that (mumbled) communication should be with us first and then with Tom or Kate.
I mean, they'll ... I go down the back stairs to get away from her cause she's ... she'll track
you down (several talking) but ... but I think it's important too, uh, my point that we
hopefully (mumbled) improve on is that direct contact between us, because I ... I, you
know, even when we're ... we're not discussing 75% rates for ... for uh, commercial,
residential is what I call it. You know, I need to know how it affects us directly and I
know through the last couple years or last four years, every single person on the Council
in Tiffin, North Liberty, and Coralville I've talked to during the session, I mean, every
single one on their councils and ... and it's my own fault. You got seven of ya! Gosh,
that's a lot! (laughter) But I mean even if it's ... even if it's stuff we may not fully agree
on, uh, that doesn't matter. I just don't need the phone calls sayin' hey, dummy, this is
what we think, this is what we have. Let me know how it ... the way you feel there too,
and uh, I know Tom or (mumbled) we didn't want to flood you with phone calls or
emails. No! Calls, emails from our friends and neighbors is fine. You know (mumbled)
Dickens/ What do you think about chickens? (laughter and several talking)
Jacoby/ I'll be blunt about that. A certain University and chickens doesn't help us when we go
to Des Moines, and I (several talking and laughing)
Mascher/ We're home every Friday, usually, unless (several talking)
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.
December 7, 2012 Iowa City City Council Special Work Session With Area Legislators Page 25
Hayek/ We'll get that figured out.
Mascher/ (several talking)
Dobyns/ And, Dave, as my new representative, welcome to Iowa City!
Jacoby/ Oh, thanks, Doc! (laughter) Well and ... and if you're comin' to Des Moines, a quick
email saying we're coming in tomorrow, Tuesday, at 8:00 then ... then I know everyone
here's real good about blocking off time or having lunch or ... or comin' in to ... (several
talking)
Hayek/ Good! Well thank you for your leadership in Des Moines, all of you. Thank you for
your time.
Champion/ We can't complain about our local representatives. You're all terrific! (several
talking) It's better than the Governor! (laughter)
Mascher/ We're workin' on that! (laughter)
Hayek/ All right. Thanks, everyone.
Markus/ Thanks, folks! (several talking)
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session with area legislators of December 7, 2012.