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HomeMy WebLinkAbout2014-06-30 Resolution2a(2) Prepared by: Marian K. Karr, 410 E. Washington St., Iowa City, IA 52240 (319) 356 -5043 RESOLUTION NO. 14 -200 RESOLUTION TO ISSUE CIGARETTE PERMITS WHEREAS, the following firms and persons have made application and paid the mulct tax required by law for the sale of cigarettes, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF IOWA CITY, IOWA, THAT: the applications be granted and the City Clerk is hereby directed to issue a permit to the following named persons and firms to sell cigarettes: Earthly Escape — 114 1/2 E. College St. Hala Hala Hookah — 327 S. Gilbert St. Passed and approved this 30th day of June MAYOR ATTEST: CITY-CLERK 20 14 Approved by City Attorney's Office It was moved by Mims and seconded by P Resolution be adopted, and upon roll call there were: the AYES: NAYS: ABSENT: x Botchway x Dickens x Dobyns x Hayek x Mims x Payne x Throgmorton 2a(5) Prepared by: Susan Dulek, Assistant City Attorney, 410 E. Washington St., Iowa City, IA 52240 (319) 356 -5030 RESOLUTION NO. 14 -201 RESOLUTION SETTING PUBLIC HEARING FOR JULY 15, 2014, ON A PROPOSAL TO CONVEY A SINGLE FAMILY HOME LOCATED AT 316 DOUGLASS COURT. WHEREAS, the UniverCity Neighborhood Partnership Program is a joint effort between the University of Iowa and the City to encourage home ownership and reinvestment in designated neighborhoods surrounding the University of Iowa; and WHEREAS, the City purchases rental units located in designated neighborhoods surrounding the University of Iowa, rehabilitates them, and then sells them to income - eligible buyers; and WHEREAS, the City purchased and rehabilitated a single family home located at 316 Douglass Court, Iowa City; and WHEREAS, the City has received an offer to purchase 316 Douglass Court for the principal sum of $85,000 (the amount the City paid to acquire the home), plus the "carrying costs ", which are all costs incurred by the City to acquire the home, maintain it and sell it, including abstracting and recording fees, interest on the loan to purchase the home, mowing and snow removal, utilities, real estate taxes, and any costs in excess of $50,000 to repair and rehabilitate the home; and WHEREAS, this sale would provide affordable housing in a designated area surrounding the University of Iowa; and WHEREAS, this sale is conditioned on the family securing adequate financing for the purchase of the home. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, that: The City Council does hereby declare its intent to convey a single family home located at 316 Douglass Court, Iowa City, Iowa, also known as Lot 26, Wise Addition, Iowa City, Iowa, for the sum of $85,000, plus the "carrying costs ". 2. A public hearing on said proposal should be and is hereby set for July 15, 2014, at 7:00 p.m. in Emma J. Harvat Hall of the Iowa City City Hall, 410 East Washington Street, Iowa City, Iowa, or if said meeting is cancelled, at the next meeting of the City Council thereafter as posted by the City Clerk, and that the City Clerk be and is hereby directed to cause notice of said public hearing to be published as provided by law. Resolution No. 14 -201 Page 2 It was moved by Mims adopted, and upon roll call there were: and seconded by Payne the Resolution be AYES: NAYS: ABSENT: x Botchway x Dickens x Dobyns x Hayek x Mims x Payne x Throgmorton Passed and approved this 30th day of June , 2014. MAYOR ATTEST: 2& .� CITY Approved by City Attorney's Office Prepared by Susan Craig, Library Director, Iowa City Public Library, 123 S Linn St, Iowa City, IA 52240 (319) 356 -5249 RESOLUTION NO. 14 -202 RESOLUTION AMENDING THE BUDGETED POSITIONS IN THE IOWA CITY PUBLIC LIBRARY BY ELIMINATING ONE .50 LIBRARY ASSISTANT III AND ADDING ONE .50 LIBRARY ASSISTANT I. WHEREAS, Resolution No. 13 -72 adopted by the City Council on March 5, 2013 authorized permanent positions in the Iowa City Public Library for FY14; and WHEREAS, a staff vacancy provides an opportunity to make personnel changes; and WHEREAS; staffing needs in the Development Office have changed; and WHEREAS; the proposed staffing changes result in cost savings and will better reflect current job needs and assignments; and NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF IOWA CITY, IOWA THAT: Effective June 30, 2014 the budgeted positions at the Iowa City Public Library be amended by: 1. Elimination of .50 Library Assistant III, AFSCME grade 8. 2. Addition of .50 Library Assistant I, AFSCME grade 6 Passed and approved this 30th day of June , 2014. ,Approved by: ATTEST: CIT LERK City Attorney's Office 2a(6) Resolution No. Page 2 14 -202 It was moved by Mims and seconded by Payne the Resolution be adopted, and upon roll call there were: AYES: DAYS: ABSENT: x Botchway x Dickens x Dobyns x Hayek x Mims x Payne x Throgmorton Prepared by Jennifer Jordan, Recycling Coordinator, 3900 Hebl Ave. SW, Iowa City, IA, 52246, (319) 887 -6160 RESOLUTION NO. 14 -203 RESOLUTION AUTHORIZING THE MAYOR TO SIGN AND THE CITY CLERK TO ATTEST TO AN AGREEMENT FOR RECYCLING SERVICES WITH CITY CARTON COMPANY, INC. WHEREAS, the City of Iowa City wishes to continue to improve its curbside and drop -off site recycling programs; and WHEREAS, the City of Iowa City issued a Request for Proposals for Recycling Processing Services; WHEREAS, City Carton Company, Inc. responded to the Request for Proposals; and WHEREAS, the City of Iowa City has previously contracted with City Carton Recycling, Inc. for recycling processing services; and WHEREAS, City Carton Recycling, Inc., meets the City's recycling processing service needs; and WHEREAS, the parties have negotiated a one year agreement, with an option to renew the contract for up to four, one -year terms at the City's discretion. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY THAT 1. The Mayor is authorized to sign and the City Clerk to attest to the attached Agreement for Recycling Services for recycling processing services with City Carton Company, Inc. 2. The City Manager is authorized to exercise the contract renewal option, as set forth therein. Passed and approved this30th day of June 2014. MAYOR ATTEST: CITY LERK It was moved by Mims upon roll call there were: AYES: Appr ved by: City Attorney's Office � /;FSAcr and seconded by Payne that the Resolution be adopted, and NAYS: ABSENT: X Botchway X Dickens X Dobyns X Hayek X Mims X Payne X Throgmorton AGREEMENT FOR RECYCLING SERVICES This Agreement is being made and entered into between the City of Iowa City ( "City ") and City Carton Company, Inc. [aka City Carton Recycling] ( "Contractor ") at 3 E. Benton Street, Iowa City, Iowa for services in connection with recycling. WHEREAS, City desires to remove and recycle certain materials in a manner consistent with regulations developed by the U.S. Environmental Protection Agency, the Iowa Department of Natural Resources and consistent with good environmental practices; and WHEREAS, it is City's intention to maximize the diversion of clean Recyclable Materials from the Iowa City waste stream via legitimate recycling markets; minimize the residual material landfilled after processing; form a cooperative partnership with Contractor to maximize public education, community outreach and other activities; and maximize per -ton revenues derived from the sale of the Recyclable Materials and minimize transportation and overall costs. WHEREAS, the City currently utilizes a multi- stream recycling process for the collection of recyclable materials through both a curb -side and drop location program, but City may desire to utilize a single- stream process at some point during the course of performance of this agreement; and WHEREAS, Contractor is willing and able to receive recyclables from the City and provide recycling services pursuant to either a multi- stream or a single- stream process; and NOW THEREFORE, in consideration of their mutual promises, City and Contractor agree as follows: SECTION I. DELIVERY AND ACCEPTANCE OF RECYCLABLE MATERIALS 1. DELIVERY. City shall deliver all Recyclable Materials, defined below, to Contractor at its facility at 3 E. Benton Street, Iowa City, Iowa, or to another location as the parties may agree (hereinafter "Contractor's facility "). 2. SORTING PROCESS. Unless the City exercises its option to utilize a single- stream recycling process as described below, the Recyclable Materials shall be sorted according to a multi - stream process. The City reserves the right to utilize a single- stream recycling process, as it may determine appropriate in its sole discretion. In the event that the City should so choose, it will notify the contractor at least 90 days prior to making the change. 3. ACCEPTANCE: Except as stated in Paragraph 5 below, and unless otherwise agreed upon by the parties hereto, Contractor shall provide recycling services to the City of Iowa City for the following recycling commodity streams, hereinafter called "Recyclable Materials:" newspaper; magazines; brown paper bags; telephone books; catalogs; office paper; junk mail; envelopes (any type); corrugated cardboard; chipboard; wet strength carrier stock (chipboard); #1 -7 plastic bottles and containers (no Styrofoam); tin /steel cans; pie tins; aluminum foil and aluminum cans, mixed green and brown glass, clear glass, hard and soft cover books, plastic bags, aseptic and gable top cartons. Upon acceptance of a delivery load, Contractor assumes all responsibility for said Recyclable Materials. 4. LABOR. Contractor shall provide all necessary labor, equipment and materials for performing services described herein. These shall be considered an integral part of the service, and no additional compensation will be paid therefor. 5. REJECTION OF A LOAD. A delivery load containing more than de minimis hazardous or toxic materials, or a load containing more than 1.5% by weight of non - Recyclable Materials shall be 2 rejected by Contractor as follows: Contractor shall inspect each load, and if Contractor suspects the load contains more than 1.5% by weight of non - Recyclable Materials, that load shall be deposited in a temporary storage area for inspection by the City. If the City confirms that the load contains more than 1.5% by weight of non - Recyclable Materials, said load shall be transferred to the City Landfill by Contractor, and the City shall be responsible for reimbursing Contractor for all costs of hauling and disposal, and shall pay Contractor an additional $150.00 per ton for additional handling. If the City does not confirm that the load violates this paragraph, Contractor may remove the non - Recyclable Materials from the load, in the presence of a City representative, to determine the actual weight of the non - Recyclable Materials. If a violation of this provision is confirmed through this process, the load will be rejected as set forth above. If the load is found to comply with this provision, the load shall be accepted by Contractor and processed accordingly. For purposes of this provision, materials with significant food contamination and wet materials are considered non - recyclable. 6. DROP -SITE. Contractor shall provide a drop -off site suitable for the unloading of Recyclable Materials from refuse packer trucks, side loader trucks and dump trucks, as delivered by City or its agents, in order to ensure total storage of all Recyclable Materials delivered to the Contractor. 7. SCALE, RECORDS. The City's hauling vehicles shall be weighed on the Contractor's scale, which shall be certified by the State of Iowa, upon entry to the Contractor's facility, and shall be weighed again when unloaded and prior to leaving the facility to determine the net weight of the Recyclable Materials delivered. A copy of the scale ticket will be given to City's driver at that time. Records of net weight of Recyclable Materials delivered shall be forwarded to the City on a monthly basis, and shall be deemed accurate and accepted unless objected to by City within ten (10) calendar days of receiving the monthly records. The Contractor shall maintain accurate cumulative records for the duration of this Agreement, and shall provide such records to the City within a reasonable time after City's request. 8. ACCESS: Contractor will provide City with access to Contractor's facility during City's normal working hours of 7:00 AM to 3:30 PM, Monday through Friday. This provision in no way limits Contractor's ordinary hours of business or hours of operation apart from City's use. SECTION II. RECYCLING OPERATIONS The Contractor shall recycle materials following generally accepted standards in the industry, which may include a variety of processes, in a safe and good faith manner. 2. Upon acceptance of City's Recyclable Materials, Contractor agrees to carry out the delivery, packaging, crushing and /or any other preparation according to standard operations of the recycling industry. Parties acknowledge Contractor may sell said Recyclable Materials to bona fide users or sell back into the manufacturing stream for recycling purposes. 3. The Contractor's recycling operation, including storage of materials to be recycled and of recycled materials, shall be conducted on a site which meets the requirements of all applicable federal, state and local laws and regulations, including zoning ordinances. 4. Parties agree that Contractor shall be responsible for its own equipment in order to satisfactorily perform this Agreement, and that City shall in no way be responsible for the method or means by which material is recycled. 5. The Contractor shall be responsible for obtaining all permits and licenses required by city, state and federal law, and pay all related fees. Contractor shall further be responsible for the payment of any fees and expenses related to the disposal of any waste material arising from its processing of accepted Recyclable Material, and shall dispose of such waste in a manner consistent with all 3 applicable federal, state and local laws, including rules and regulations promulgated or enforced by the U.S. Environmental Protection Agency, the Iowa Department of Natural Resources, and /or local solid waste disposal facilities. This provision does not apply to those materials rejected by Contractor pursuant to Section I, Paragraph 4 above, in which case all expenses related thereto shall be attributed to the City as set forth above. 6. The City reserves the right, but not the duty, to inspect any equipment, facility or service used by Contractor in providing services pursuant to this contract and, likewise, the right to inspect, make, and keep copies of all books and records maintained by the vendor which relate to the services provided by Contractor hereunder, at any reasonable time and upon reasonable notice. Such inspections shall be conducted in a manner to minimize disruption to Contractor's business with 48 hours notice by City to Contractor. Contractor shall cooperate fully with the City during an inspection. SECTION III. CITY'S RESPONSIBILITIES The City may establish public recycling "drop off' locations in Iowa City for the public's disposal of residential and commercial Recyclable Materials, and will designate these locations for said use, with notice to the public. Nothing in this agreement prohibits Contractor from establishing a public recycling drop site at its facility, but managing and maintaining said site, and processing the materials deposited thereon are the sole responsibility of the Contractor and are not part of this agreement. 2. The City shall provide bins of sufficient capacity and quality at its drop -off locations to protect the Recyclable Materials from adverse weather. City also agrees these bins shall include instructions and notice to the public on appropriate use of the bins, and that these notices will be prepared by City in cooperation with Contractor. 3. The City shall be responsible for collecting any Recyclable Materials deposited at any and all of its drop -off locations, and may provide curbside collection of Recyclable Materials to residential and commercial properties as defined in the Iowa City Code of Ordinances, as amended. 4. The City agrees that it will not knowingly or intentionally deliver to Contractor any loads that contain solid waste or material other than Recyclable Materials, including any materials contaminated by hazardous waste. SECTION IV. GENERAL PROVISIONS 1. INITIAL CONTRACT TERM. This Agreement shall remain in effect for a period of one (1) year, beginning on July 1, 2014 and ending on June 30, 2015, unless terminated due to default, as described below, or unless the City exercises its Contract Renewal Option. 2. CONTRACT RENEWAL OPTION. The City may elect, in its sole discretion, to extend this contract for additional one (1) year terms with a maximum of four, one (1) year contract renewals. Formal contract renewal will be issued, in writing, thirty (30) calendar days prior to expiration date of the current term. Requests for proposed price changes after the initial term of the contract must be submitted in writing to the Purchasing Agent ninety (90) calendar days prior to the contract renewal start date. The City reserves the right to accept or reject price increases, to negotiate more favorable terms, or to terminate without cost, the future performance of the contract. 3. TERMINATION. The City reserves the right to terminate this Agreement upon 10 calendar days' written notice for Contractor's substantial violation of state or federal law or City ordinance, which violation is directly related to the subject matter of this Agreement. If the violation is not n cured within the said 10 -day period given, this Agreement shall terminate unless 1) Contractor has made substantial steps to cure the violation prior to expiration of the 10 -day period; and 2) City, in its sole discretion, agrees not to terminate. 4. DEFAULT. The contract may be cancelled or annulled by the City in whole or in part by written notice of default to Contractor upon non - performance, violation of contract terms, delivery failure, bankruptcy or insolvency, or the making of an assignment for the benefit of creditors. The City reserves the right to grant Contractor a specified cure period during which to cure or remedy the default, which cure period shall be included in the written notice of default. If default is not cured within the specified time, City reserves the right, but is not obligated to, extend the cure period or City may deem the Contract terminated without further notice. In either event, the defaulting Contractor (or its surety) shall be liable to the City for cost to the City in excess of the defaulted contract price. Lack of knowledge by the Contractor will in no way be a cause for relief from responsibility. 5. CONTRACT ALTERATIONS. No assignment, alteration, change, or modification of the terms of this Agreement shall be valid unless made in writing and agreed to by both the City and Contractor. Contractor shall not commence any additional work or change the scope of the Agreement until authorized in writing by the City. Contractor shall make no claim for additional compensation in the absence of a prior written approval and amendment of this Agreement executed by both the Contractor and the City. This Agreement may only be amended, supplemented or modified by a written document executed in the same manner as this Agreement. 6. ASSIGNMENT OF CONTRACT. Contractor shall not assign, transfer, convey, sublet or otherwise dispose of the contract or its right, title or interest therein, or its power to execute such contract to any other person, firm or corporation without the prior written consent of the City, but in no case shall such consent relieve the Proposer from its obligations, or change the terms of the contract. 7. ANTI - DISCRIMINATION. Contractor shall not discriminate against any person in employment or public accommodation because of race, religion, color, creed, gender identity, sex, national origin, sexual orientation, mental or physical disability, marital status or age. "Employment" shall include but not be limited to hiring, accepting, registering, classifying, promoting, or referring to employment. "Public accommodation" shall include but not be limited to providing goods, services, facilities, privileges and advantages to the public. SECTION V. COMPENSATION FOR MATERIALS SORTED MATERIALS. Contractor shall compensate the City for sorted Recyclable Materials, based upon the attached pricing formula shown in Attachment 1, incorporated herein, and the process detailed in Section I above. 2. SINGLE - STREAM MATERIALS. In the event that the City exercises its option to utilize a single - stream process, as described in Section 1, Paragraph 2 above, Contractor shall charge the City $65.00 per ton for depositing Recyclable Materials collected pursuant to a single stream process, and shall share revenues with the City according to the attached formula shown on Attachment 2, incorporated herein, subject to the process detailed in Section I above, and paragraph 5 below. 3. AUDIT. Because the exact weight of the various Recyclable Materials cannot be accurately determined at the time the City deposits said materials at Contractor's Facility, the approximate weight of the materials shall be calculated, and thus compensation determined, by utilizing a quarterly audit system, as detailed below. The parties hereto may perform a quarterly audit N" on mutually agreed -upon days, whereby the Recyclable Materials shall be sorted and weighed. To perform this audit, Contractor shall completely clean the processing line, and all bunkers and storage containers will be emptied. A random trailer load will be processed as normal and all materials will be separated by grade. Once the sorting is completed, each product will be weighed. These weights will be the basis for the percentage breakdown of the materials being received for purposes of calculating the revenue sharing due to the City pursuant to Attachments 1 and 2. 4. PAYMENT TO CITY. If payment to the City is appropriate, such payments shall be due and payable within 30 days of the last day of each calendar month, and shall be sent to the Iowa City Accounting Division, 410 East Washington St., Iowa City, Iowa 52240. Delinquent payments shall draw interest at 1.5% per month from the due date, until paid. Contractor also agrees that if the City obtains a judgment on the amount due, Contractor agrees to pay court costs and reasonable attorney fees. 5. WITHHOLDING PAYMENT. Where payment to Contractor is appropriate, the 'City may withhold payment where Contractor is in default of this agreement pursuant to Section IV, Paragraph 4 below. SECTION VI. LIABILITY, INSURANCE The Contractor is solely responsible for the means, methods, sequencing and procedures used in fulfilling its obligations under this Agreement, and is solely responsible for the safety of Contractor's personnel and its own operations. 2. INDEMNITY. Contractor shall indemnify, defend and hold harmless the City of Iowa City and its officers, employees and agents from any and all liability, loss, cost, damage, and expense (including reasonable attorney's fees and court costs) resulting from, arising out of, or incurred by reason of any claims, actions, or suits based upon or alleging bodily injury including death, license, patent, or copyright infringement, or property damage rising out of or resulting from the Contractor's operations under this Contract, whether such operations be by the Contractor or by any Subcontractor or by anyone directly or indirectly employed by either. Responsibility for Damage Claims - It is specifically agreed between the parties hereto that it is not intended by any of the provisions of any part of this Contract to create in the public or any member thereof a third party beneficiary hereunder, or to authorize anyone not a party to this contract to maintain a suit for personal injuries or property damage pursuant to the terms or provisions of this contract. It is understood that there are no intended third party beneficiaries to this contract. Contractor further agrees to save the City, its agents and employees harmless from liability of any nature or kind for the use of any copy -right or non - copyright composition, secret process, license, patented or unpatented invention, article, apparatus, or appliance, including any device or article forming a part of the apparatus or appliance of which the Proposer is not the patentee, assignee, licensee or owner, furnished or used in the performance of the contract. 3. Certificate of Insurance; Cancellation or Modification (a) Prior to commencement of the work,,the Contractor shall submit to the City, for approval, an annual Certificate of Insurance meeting all requirements specified herein, to be in effect for the full contract period. (b) The Contractor shall notify the City in writing at least thirty (30) calendar days prior to any changes or cancellation said policy, policies or coverage. (c) Cancellation or modification of said policy or policies resulting in non - compliance with these requirements shall be considered just cause for the City to immediately cancel this n. Agreement and /or to halt work under this Agreement. (d) The certificate of insurance shall show the City of Iowa City as an additional insured. (e) Minimum Coverage: Any policy or policies of insurance shall include contractual liability coverage, and shall be in the following type and minimum amounts: Type of Coverage Class I a. Comprehensive General Liability Each Occurrence Aggregate (1) Bodily Injury and Property Damage $500,000 $1,000,000 b. Motor Vehicle Liability & Combined Property Damage Insurance: Single Limit (1) Bodily Injury and Property Damage $500,000 c. Workers' Compensation Insurance as required by Chapter 85, Code of Iowa. d. The City requires that the Contractor's insurance carrier be A rated or better by A.M. Best. (f) The entire amount of Contractor's liability insurance policy coverage limits, identified in the policy and on the Certificate of Insurance, must, under the policy, be available to pay damages for which the insured Contractor becomes liable, or for which the insured assumes liability under the indemnity agreement herein contained, and such coverage amount shall not be subject to reduction or set off by virtue of investigation or defense costs incurred by Contractor's insurer. (g) The entire amount of the Contractor's liability insurance policy coverage limits shall be payable by the Contractor's insurer, with no deductible to be paid by, or self- insured retention to be attributed to, the Contractor unless this requirement is waived by the City. Contractor's Certificate of Insurance must set forth the nature and amount of any such deductible or self- insured retention. (h) If Contractor's liability insurance coverage is subject to any special exclusions or limitations not common to the type of coverage being provided, such exclusions or limitations shall be noted on the Certificate of Insurance. (i) Contractor agrees to provide City with "occurrence form" liability insurance coverages. Q) The policy shall be primary in payment, not excess or contingent, regardless of any other coverage available to the City. SECTION VII. MISCELLANEOUS Contractor agrees to have no markings on vehicles or containers that indicate or tend to indicate any official relationship between the Contractor and the City. 2. Independent Contractor: Contractor, including any of its subcontractors, are not and shall not be deemed to be an agent or employee of the City of Iowa City, Iowa, but at all times are deemed to be independent contractors. 3. This Agreement shall be governed by the laws of the State of Iowa. In the event of a change in law that frustrates the goals of the City relative to this contract, the City will be entitled to terminate the contract upon written notification to the vendor without cost or penalty to the City. 4. This Agreement represents the entire agreement between the City and the Contractor and supersedes all prior negotiations, representations or agreements, whether written or oral. This Agreement may be amended only by written instrument signed by both the City and the Contractor, and attached as an Addendum. 5. If any one or more of the provisions contained in this Agreement are held to be invalid, illegal, or unenforceable, this Agreement shall be deemed severable and the remainder of the Agreement shall remain in full force and effect. This Agreement executed this day of , 20 CITY CITY OF IOWA CITY, IOWA By: Matthew J. Hayek, Mayor ATTEST: Maria K. Karr, City Clerk Approved by City Attorney's Office CONTRACTOR Attachment 1 Multi- Stream Sorted Materials Contractor shall compensate the City of Iowa City for sorted Recyclable Materials, based upon the pricing formula described below. Grade of Material Pricing Formula Newsprint and Magazines PPW HS #8 Newsprint minus $75 per net ton. Floor price of $5 per net ton. Mixed Paper #1 PPW HS #1 Mixed Paper minus 100% Ferrous Tin Cans End Market Price minus 90% Plastic Bottles #1- #7 End Market Price minus 90% Old Corrugated Cardboard #11 PPW HS #11 OCC minus 50% Glass Charge of $20.00 per net ton Hard Back and Soft Cover Books $0.00 per ton Plastic Bags $0.00 per ton Cartons (Aseptic and Gable To) $10.00 per ton Non - Recyclable Materials Exceeding 1.5% $150.00 per net ton PPW = Pulp and Paper Publication HS = High Side of Pricing Published in the Midwest Region of the Pulp and Paper Publication for the Specific Grade OCC = Old Corrugated Cardboard The material described hereunder shall equal or exceed in quality the grade definition for the stated grade. Attachment 2 Single Stream Materials 1. City shall compensate Contractor $65.00 per ton for Recyclable Material delivered to Contractor pursuant to a Single Stream Process for Contractor's sorting and transportation services, which includes transportation of the materials to a Contractor's facility. 2. City Carton Recycling shall provide revenue sharing with the City of Iowa City based upon the following: #1 Ferrous Tin 1 4.00% 130% of Low Side of End 150% of Low Side of End Cans Market Price Market Price Commingled 11.00% 30% of Low Side of End 50% of Low Side of End Plastic Market Price Market Price Containers All Other I I $0 Per Net Ton I $0 Per Net Ton Material PPW = Pulp and Paper Publication HS = High Side of Pricing Published in the Midwest Region of the Pulp and Paper Publication for the Specific Grade OCC = Old Corrugated Cardboard r r- ^�� ,., ®,, CITY O F IOWA CITY 2a(7) , c I MEMORAND M ®��� Date: June 25, 2014 To: Tom Markus, City Manager From: Jen Jordan, Recycling Coordinator Rick Fosse, Public Works Director Re: Recycling Processing Contract Introduction: The City of Iowa City has a contract with City Carton Recycling (City Carton) to process the recyclable materials picked up at the curb and at the City's three drop -off sites. The contract expires on June 30, 2104. A request for proposals (RFP) solicited vendors earlier this year for a new contract. City Carton submitted the only proposal. Based on the proposal, City staff has negotiated a one -year contract with City Carton, valid July 1, 2014, to June 30, 2015, with up to four one -year roll -over periods. Within the negotiated contract, the City has the option to keep the existing sorted curbside system or change to a single- stream collection system. History/Background: The City has worked with City Carton to process the recycling picked up at the curb and at the City's three drop -off sites for many years. Periodically an RFP is put out to ensure that the costs and revenues align with market conditions. City Carton has been an excellent partner to the City and has been amenable to adding materials to the recycling streams as feasible. Discussion of Solutions: Within the negotiated contract, the City has the option of maintaining the current sorted system or changing to a single stream collection system. Since changes were made to the program in 2011, the curbside tonnages have been steadily increasing. In May 2014, staff completed a curbside participation study. With this data and input from the curbside recycling staff, a strategic outreach program specific to the curbside program will be implemented in FY15 to reduce contamination, increase participation and further increase tonnage collected. Financial Impact: The negotiated contract is comparable to the existing contract. Under current market conditions we can maintain the existing recycling fees if we continue the sorted collection system. Conversion to single- stream would require a rate increase. Recommendation: Staff recommends entering into the negotiated contract with City Carton Recycling and maintaining the sorted curbside recycling system. Ra-cl) AGREEMENT FOR RECYCLING SERVICES This Agreement is being made and entered into between the City of Iowa qty ( "City ") and City Carton Company, Inc. [aka City Carton Recycling] ( "Contractor ") at 3 E. Benton Stree Iowa City, Iowa for services in connection with recycling. WHEREAS, City desires to remove and recycle certain materials in a nner consistent with regulations developed by the U.S. Environment I Protection Agency, the Iowa De rtment of Natural Resources and consistent with good environmental pr ctices; and WHEREAS, it is City's intention to max ize the diversion of clea Recyclable Materials from the Iowa City waste stream via legitimate recycling arkets; minimize the r idual material landfilled after processing; form a cooperative partnership with Co tractor to maximize ublic education, community outreach and other activities; and maximize per -ton r venues derived fr m the sale of the Recyclable Materials and minimize transportation and overall costs. WHEREAS, the City currently utilizes a n materials through both a curb -side and drop process at some point during the course of p WHEREAS, Contractor is willing and able to pursuant to either a multi- stream or a single- (recycling process for the collection of recyclable )gram, but City may desire to utilize a single- stream of this agreement; and recyclables from the City and provide recycling services process; and NOW THEREFORE, in consideration of thei mutu I promises, City and Contractor agree as follows: SECTION I. DELIVERY AND ACCE ANCE O RECYCLABLE MATERIALS DELIVERY. City shall deliv r all Recyclabk Materials, defined below, to Contractor at its facility at 3 E. Benton Street, Iowa City, Iowa, or to another location as the parties may agree (hereinafter "Contractor' facility "). 2. SORTING PROCES . Unless the City exerc es its option to utilize a single- stream recycling process as des crib d below, the Recyclable aterials shall be sorted according to a multi - stream process. T e City reserves the right to utilize a single- stream recycling process, as it may determine propriate in its sole discretion. In the event that the City should so choose, it will notify the c tractor at least 90 days prior to aking the change. 3. ACCEPTAN E: Except as stated in Paragraph 4 low, and unless otherwise agreed upon by the parties ereto, Contractor shall provide recyclin services to the City of Iowa City for the following r cycling commodity streams, hereinafter Iled "Recyclable Materials:" newspaper; magazin ; brown paper bags; telephone books; cat togs; office paper; junk mail; envelopes (any ty e); corrugated cardboard; chipboard; wet s ength carrier stock (chipboard); #1 -7 plastic bottles and containers (no Styrofoam); tin /st I cans; pie tins; aluminum foil and alumi um cans, mixed green and brown glass, clear gla s, hard and soft cover books, plastic bag , aseptic and gable top cartons. Upon acceptance o a delivery load, Contractor assumes all sponsibility for said Recyclable Materials. 3. BOR. Contractor shall provide all necessary labor, equip ent and materials for performing services described herein. These shall be considered an in t ;ecyclable part of the service, and no additional compensation will be paid therefor. 4. REJECTION OF A LOAD. A delivery load containing more th minimis hazardous or toxic materials, or a load containing more than 1.5% by weight of Materials shall be 2 rejected by Contractor as follows: Contractor shall inspect each load, and if Contr ctor suspects the load contains more than 1.5% by weight of non - Recyclable Materials, th t load shall be deposited in a temporary storage area for inspection by the City. If the City con rms that the load contains more than 1.5% by weight of non - Recyclable Materials, said load sh I be transferred to the City Landfill by Contractor, an the City shall be responsible for reimbur ng Contractor for all costs of hauling and disposal, a d shall pay Contractor an additiona $150.00 per ton for additional handling. If the City doe not confirm that the load violates th' paragraph, Contractor may remove the non - Recyclable M erials from the load, in the presen of a City representative, to determine the actual weight of th non - Recyclable Materials. If a iolation of this provision is confirmed through this process, the I ad will be rejected as set fort above. If the load is found to comply with this provision, the load s all be accepted by Contra or and processed accordingly. For purposes of this provision, materi Is with significant food co amination and wet materials are considered non - recyclable. 7. DROP -SITE. Contractor shall provide a drop -off site sui ble for the unloading of Recyclable Materials from refuse packer trucks, si a loader trucks ayla dump trucks, as delivered by City or its agents, in order to ensure total stora yrecords. l Recycl le Materials delivered to the Contractor. 8. SCALE, RECORDS. The City's haulicles all be weighed on the Contractor's scale, which shall be certified by the State of po entry to the Contractor's facility, and shall be weighed again when unloaded and privi g the facility to determine the net weight of the Recyclable Materials delivered. A copy le ticket will be given to City's driver at that time. Records of net weight of Recyclable s delivered shall be forwarded to the City on a monthly basis, and shall be deemed acand accepted unless objected to by City within ten (10) calendar days of receiving the records. The Contractor shall maintain accurate cumulative recor ds for the duration of tement, and shall provide such records to the City within a reasonable time after City's req 9. ACCESS: Contractor will provide CiV with adpess to Contractor's facility during City's normal working hours of 7:00 AM to 5:00 P, Mondak through Friday. This provision in no way limits Contractor's ordinary hours of busirpss or hours f operation apart from City's use. SECTION II. RECYCLING OPERATIO 1. The Contractor shall recycle/friaterials following g nei which may include a variety f processes, in a safe a d 2. Upon acceptance of Cit s Recyclable Materials, Co packaging, crushing a /or any other preparation a recycling industry. Pa 'es acknowledge Contractor ma fide users or sell back nto the manufacturing stream for ally accepted standards in the industry, good faith manner. actor agrees to car ry ording to standard sell said Recyclable pycling purposes. out the delivery, operations of the Materials to bona 3. The Contractor's r cycling operation, including storage f materials to be recycled and of recycled materials shall be conducted on a site which me s the requirements of all applicable federal, state an ocal laws and regulations, including zoning rdinances. 4. Parties agree at Contractor shall be responsible for its own a uipment in order to satisfactorily perform this reement, and that City shall in no way be respon -ble for the method or means by which mated is recycled. 5. The Contr ctor shall be responsible for obtaining all permits and liapnses required by city, state and federal law, and pay all related fees. Contractor shall further be esponsible for the payment of any fees and expenses related to the disposal of any waste matena arising from its processing of accepted Recyclable Material, and shall dispose of such waste in a anner consistent with all 3 applicable federal, state and local laws, including rules and regulations romulgated or enforced by the U.S. Environmental Protection Agency, the Iowa Department o atural Resources, and /or local solid waste disposal facilities. This provision does not apply those materials rejected by Contractor pursuant to Section I, Paragraph 4 above, in which c e all expenses related thereto shall be attributed to the City 0 set forth above. 6. The City reserves the right, by by Contractor in providing se make, and keep copies of all k services provided by Contrac notice. Such inspections shall business. Contractor shall coo not the duty, to inspect a equipment, facility or service used ces pursuant to this con ct and, likewise, the right to inspect, Woks and records main ined by the vendor which relate to the r hereunder, at an reasonable time and upon reasonable > conducted in a m nner to minimize disruption to Contractor's ►e to fully with th ity during an inspection. SECTION III. CITY'S RESPONSIBILITIES The City may establish public recycling, residential and commercial Recyclable with notice to the public. Nothing in this recycling drop site at its facility, but r materials deposited thereon are the s� agreement. / ✓off' locations in Iowa City for the public's disposal of rials, and will designate these locations for said use, ament prohibits Contractor from establishing a public sing and maintaining said site, and processing the ;ponsibility of the Contractor and are not part of this 2. The City shall provide bins of suff' ient capa 'ty and quality at its drop -off locations to protect the Recyclable Materials from adver a weather. 'ty also agrees these bins shall include instructions and notice to the public on app prate use of t e bins, and that these notices will be prepared by City in cooperation with Contr ctor. 3. The City shall be responsi a for collecting any \a, ble Materials deposited at any and all of its drop -off locations, and may provide curbsidon of Recyclable Materials to residential and commercial properti s as defined in the Iowde of Ordinances, as amended. 4. The City agrees that t will not knowingly or ially deliver to Contractor any loads that contain solid waste or material other than ble Materials, including any materials contaminated by h ardous waste. SECTION IV. GENERAL ROVISIONS 1. INITIAL CONT CT TERM. This Agreement shall remai in effect for a period of one (1) year, beginning on July 1, 2014 and ending on June 30, 2015, unless terminated due to default, as described b ow, or unless the City exercises its Contract enewal Option. 2. CONTRACIT RENEWAL OPTION, The City may elect, in 'ts sole discretion, to extend this contract or additional one (1) year terms with a maximu of four, one (1) year contract renewal . Formal contract renewal will be issued, in writing, hirty (30) calendar days prior to expirati n date of the current term. Requests for proposed pri a changes after the initial term of the ontract must be submitted in writing to the Purchasing ent ninety (90) calendar days prior o the contract renewal start date. The City reserves the fight to accept or reject price incr ases, to negotiate more favorable terms, or to termin a without cost, the future performance of the contract. 3. TERMINATION. The City reserves the right to terminate this Agreement upon 10 calendar days' written notice for Contractor's substantial violation of state or federal law or City ordinance, which violation is directly related to the subject matter of this Agreement. If the violation is not cured within the said 10 -day period given, this Agreement shall terminate unless 1) Contractor 4 has made substantial steps to cure the violation prior to expiration f the 10 -day period; and 2) City, in its sole discretion, agrees not to terminate. 4. DEFAULT. The cont act may be cancelled or annulled by the ity in whole or in part by written notice of default to Contractor upon non - performance, vi ation of contract terms, delivery failure, bankruptcy o insolvency, or the making of an ass' nment for the benefit of creditors. The City reserves the ight to grant Contractor a specifie cure period during which to cure or remedy the default, w ich cure period shall be includ d in the written notice of default. If default is not cured wit in the specified time, City re rves the right, but is not obligated to, extend the cure period o City may deem the Con act terminated without further notice. In either event, the defaultin Contractor (or its suret shall be liable to the City for cost to the City in excess of the defaul d contract price. L k of knowledge by the Contractor will in no way be a cause for relief fro responsibility. 5. CONTRACT ALTERATIONS. o assignmen , alteration, change, or modification of the terms of this Agreement shall be valid unless m e in writing and agreed to by both the City and Contractor. Contractor shall not mmen any additional work or change the scope of the Agreement until authorized in writi by t e City. Contractor shall make no claim for additional compensation in the absence of a rio written approval and amendment of this Agreement executed by both the Contractor a the City. This Agreement may only be amended, supplemented or modified by a wri n document executed in the same manner as this Agreement. 6. ASSIGNMENT OF CONTRACT. Contr ctor shall not assign, transfer, convey, sublet or otherwise dispose of the contra t or its ri t, title or interest therein, or its power to execute such contract to any other per on, firm or rporation without the prior written consent of the City, but in no case shall suc consent reliev the Proposer from its obligations, or change the terms of the contract. 7. ANTI - DISCRIMINATI/t. ontractor shall not di criminate against any person in employment or public accommodecause of race, religio , color, creed, gender identity, sex, national origin, sexual orientmental or physical dis ility, marital status or age. "Employment" shall include but nomited to hiring, accepts g, registering, classifying, promoting, or referring to employmPublic accommodation" s all include but not be limited to providing goods, services, facirivileges and advantages t the public. SECTION V. COMPENSAT N FOR MATERIALS 1. SORTED MATE IALS. Contractor shall compensate the 'ty for sorted Recyclable Materials, based upon the attached pricing formula shown in Attachm t 1, incorporated herein, and the process detaile in Section I above. 2. SINGLE -ST AM MATERIALS. In the event that the City exerci s its option to utilize a single - stream /h5 ss, as described in Section 1, Paragraph 2 above, Co tractor shall charge the City $65.00 on for depositing Recyclable Materials collected pu )uant to a single stream process shall share revenues with the City according to the a ched formula shown on Attachm , incorporated herein, subject to the process detailed i Section I above, and paragra below. 3. AUDIT. Because the exact weight of the various Recyclable Materials cat be accurately determined at the time the City deposits said materials at Contractor's Facility, he approximate weight of the materials shall be calculated, and thus compensation determined ,,by utilizing a quarterly audit system, as detailed below. The parties hereto shall perform a quarterly audit on mutually agreed -upon days, whereby the Recyclable Materials shall be sorted and weighed. 5 To perform this audit, Contractor shall completely clean the and storage containers will be emptied. A random trailer load all materials will be separated by grade. Once the sorting is weighed. These wei hts will be the basis for the percentage received for purr ses of calculating the revenue shari Attachments 1 and . 4. PAYMENT TO CI If payment to the City is al payable within 30 day of the last day of each calei Accounting Division, 4 East Washington St., Ic shall draw interest at 1.5 per month from the due the City obtains a judgm nt on the amount dui reasonable attorney fees. / .0essing line, and all bunkers i be processed as normal and )mpleted, each product will be ;akdown of the materials being due to the City pursuant to prop ate, such payments shall be due and lar onth, and shall be sent to the Iowa City i City, Iowa 52240. Delinquent payments ate, until paid. Contractor also agrees that if Contractor agrees to pay court costs and 5. WITHHOLDING PAYMENT. here paym t to Contractor is appropriate, the City may withhold payment where Cont ctor is in efault of this agreement pursuant to Section IV, Paragraph 4 below. SECTION VI. LIABILITY, INSURANCE The Contractor is solely responsible the means, methods, sequencing and procedures used in fulfilling its obligations under t s A reement, and is solely responsible for the safety of Contractor's personnel and its owl operat ns. 2. INDEMNITY. Contractor shall ' demnify, d fend and hold harmless the City of Iowa City and its officers, employees and a ents from any and all liability, loss, cost, damage, and expense (including reasonable attorn y's fees and co . costs) resulting from, arising out of, or incurred by reason of any claims, a tions, or suits bas upon or alleging bodily injury including death, license, patent, or copyri t infringement, or p operty damage rising out of or resulting from the Contractor's operati s under this Contract, hether such operations be by the Contractor or by any Subcontracto or by anyone directly or i directly employed by either. Responsibility for Da age Claims - It is specifically treed between the parties hereto that it is not intended by any f the provisions of any part of s Contract to create in the public or any member thereof a ird party beneficiary hereunder, r to authorize anyone not a party to this contract to maint n a suit for personal injuries or pro erty damage pursuant to the terms or provisions of this ontract. It is understood that there a e no intended third party beneficiaries to this contract. Contractor furoer agrees to save the City, its agents and employees harmless from liability of any nature or kind for the use of any copy -right or non -cop right composition, secret process, license, pat nted or unpatented invention, article, appar tus, or appliance, including any device or a icle forming a part of the apparatus or appliance of which the Proposer is not the patentee, ssignee, licensee or owner, furnished or used in th4 performance of the contract. 3. Certificate/of Insurance; Cancellation or Modification (a) Prig(r to commencement of the work, the Contractor shall submit to the City, for approval, an annual Certificate of Insurance meeting all requirements specified herein, to be in effect fdr the full contract period. (b) The Contractor shall notify the City in writing at least thirty (30) calendar days prior to any changes or cancellation said policy, policies or coverage. (c) Cancellation or modification of said policy or policies resulting in non - compliance with these requirements shall be considered just cause for the City to immediately cancel this Agreement and /or to halt work under this Agreement. L (d) The certificate of insurance shall show the City of Iowa City as an additional insured and shall show the project bid number and project title. (e) Minimum Coverage: Any policy or policies of insurance shall include co actual liability coverage, and shall be in the following type and minimum amounts: Type of Coverage Class I a. Comprehensive General Liability Each Occurren Aggregate (1) Bodily Injury and Property Damage $500,000 $1,000,000 b. Mdtor Vehicle Liability & Combined Property Damage I urance: Single Limit (1) Bodily Injury and Property Damage $500,000 c. Workers' Compensation Insurance as required by apter 85, Code of Iowa. d. The City requires that the Contractor's insuranc carrier be A rated or better by A.M. Best. (f) The entire a unt of Contractor's liability insura a policy coverage limits, identified in the policy and on a Certificate of Insurance, m st, under the policy, be available to pay damages for wh h the insured Contractor ecomes liable, or for which the insured assumes liability u er the indemnity agr ment herein contained, and such coverage amount shall not be ubject to reduction r set off by virtue of investigation or defense costs incurred by Coin tor's insurer. (g) The entire amount of th Contractor' liability insurance policy coverage limits shall be payable by the Contracto insurer with no deductible to be paid by, or self- insured retention to be attributed to, a Co ractor unless this requirement is waived by the City. Contractor's Certificate of Ins an a must set forth the nature and amount of any such deductible or self- insured retentl (h) If Contractor's liability insurance verage is subject to any special exclusions or limitations not common to the type of cov ag being provided, such exclusions or limitations shall be noted on the Certificate of Ins ranc (i) Contractor agrees to provide ity wit "occurrence form" liability insurance coverages. Q) The policy shall be primary in paymen not excess or contingent, regardless of any other coverage available to the ity. SECTION VII. MISCELLANEOUS 1. Contractor agrees to have no ma ings on vehicles or c ntainers that indicate or tend to indicate any official relationship between the ontractor and the City. 2. Independent Contractor: Con actor, including any of its bcontractors, are not and shall not be deemed to be an agent or a plc of the City of Iowa City, owa, but at all times are deemed to be independent contractors. 3. This Agreement shall be overned by the laws of the State of to . In the event of a change in law that frustrates the goals of the City relative to this contract, the Cit will be entitled to terminate the contract upon written n tification to the vendor without cost or penalty o the City. 4. This Agreement repr sents the entire agreement between the City and the ontractor and supersedes all prior negotiation , representations or agreements, whether written or ora This Agreement may be amended only by ritten instrument signed by both the City and the Contra or, and attached as an Addendum. 7. If any one or re of the provisions contained in this Agreement are held to b invalid, illegal, or unenforcea , this A reement shall be deemed severable and the remainder of the greement shall 9 remain in full force and effect. This Agreement executed this day of , 20 CITY CONTRACTOR Attachment 1 Multi- Stream Sorted Materials Contractor shall compensate the City of Iowa City for sorted Recyclable Materials, b sed upon the pricing formula described below. Grade of Material Pricing Formula Newsprint and Magazines PPW HS #8 Newsprint minuylo75 per net ton. Floor price of $5 perXet ton. Mixed Paper #1 PPW HS #1 Mixed Pa p& minus 100% Ferrous Tin Cans End Market Price rpKnus 90% Plastic Bottles #1- #7 End Market Priceminus 90% Old Corrugated Cardboard #11 PPW HS #1 ACC minus 50% Glass Charge o 20.00 per net ton Hard Back and Soft Cover Books $0.00 r ton Plastic Bas $0. per ton Cartons (Aseptic and Gable To) $ .00 per ton Non - Recyclable Materials Exceeding 1.5% $150.00 per net ton PPW = Pulp and Paper HS = High Side of Pricing Pu shed in the idwest Region of the Pulp and Paper Publication for the Specific rade OCC = Old Corrugated ardboard The material descri ed hereunder shall equal or exceed in quality the grade definition for the stated grade. Attachment 2 Single Stream Materials 1. City shall compensate Contractor $65. per p or Recyclable Material delivered to Contractor pursuant to a Single Strea rocess for Contractor's so ing and transportation services, which includes transporta on of the materials to Contr tor's facility in Cedar Rapids. 2. City Carton Recycling shall provide based upon the following: sharing with the City Iowa City Commodity Allocated 'ercent Reba' if Market Price is ebate if Market Price is of Total Tonnage < $1011.00 per ton >$100.00 per tan ( * *to be determined during audits) ONP #8 44.00% 10% 1 PPW 7Side 30% of PPW High Side Commodity Allocated Percent Rebat if M rket Price is Rebate if Market Price is of Total Tonnage :5$55:0 p ton >$55.00' per ton ( * *to be determined during audits Mixed Paper 41.00% 30° ° of PW High Side 50% of PPW High Side #1 Ferrous Tin 4.00% of ow Side of End 50% of Low Side of End Cans /"30% Market rice Market Price Commingled 11.00% 30% of L w Side of End 50% of Low Side of End Plastic Market P ce Market Price Containers All Other $0 Per Net on $0 Per Net Ton Material PPW = Pulp and P er Publication HS = High Side o Pricing Published in the Midwest R ion of the Pulp and Paper Publication for t e Specific Grade OCC = Old Co gated Cardboard The material d scribed hereunder shall equal or exceed in q ality the grade definition for the stated grad 2� Prepared by: Susan Dulek, Asst. City Attorney, 410 E. Washington St., Iowa City, IA 52240 (319) 356 -5030 RESOLUTION NO. 14 -204 RESOLUTION AUTHORIZING THE MAYOR TO SIGN AND THE CITY CLERK TO ATTEST TO THE RELEASE OF MORTGAGE FOR THE PROPERTY LOCATED AT 983 LONGFELLOW PLACE. WHEREAS, on October 21, 2009, the owners of 983 Longfellow Place executed a mortgage to secure a loan and a Resale and Occupancy Agreement with the City of Iowa City as part of the Affordable Dream Home Program; and WHEREAS, the owners are in nursing homes and have no assets; WHEREAS, no payments have been made on the loan since been made since 2012; WHEREAS, a buyer is willing to pay the City $16,510 if the City releases the mortgage; and WHEREAS, staff believes that the mortgage should be released because the City likely will receive no funds if it is foreclosed. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, THAT: 1. The Mayor is authorized to sign and the City Clerk to attest the attached Release of Second Mortgage for recordation, whereby the City does release the property located at 983 Longfellow Place, Iowa City, Iowa from the Second Mortgage recorded on October 23, 2009 at Book 4519, Page 35 of the Johnson County Recorder's Office. 2. The City Clerk is authorized and directed to certify a copy of this resolution for recordation in the Johnson County Recorder's Office, together with the attached Release of Second Mortgage, said recording costs to be paid by the City. Passed and approved this 30th day of June , 2014. MAYOR ATTEST: �!e' CITY 'CLERK Approved by City Attorney's Office G `d �p - f (� Resolution No. 14 -204 Page 2 It was moved by Mims and seconded by Payne the Resolution be adopted, and upon roll call there were: AYES: NAYS: ABSENT: x Botchway x Dickens x Dobyns x Hayek x Mims x Payne x Throgmorton Prepared by: Susan Dulek, Assistant City Attorney, 410 E. Washington St., Iowa City, IA 52240 (319)356 -5030 RELEASE OF SECOND MORTGAGE The City of Iowa City, Iowa does hereby release the property at 983 Longfellow Place, Iowa City, Iowa, and legally described as follows: Unit 983 Longfellow Place of Lot 10, Longfellow Manor Condominiums, according to the Declaration thereof recorded in Book 4195, Page 375, Records of the Recorder of Johnson County, Iowa. from a financial obligation of the property owners, Christopher Barclay Kuhn and Dana Kay Harr, to the City of Iowa City in the principal amount of $36,250.00 represented by a Second Mortgage recorded on October 23, 2009, Book 4519, Page 35 of the Johnson County Recorder's Office. CITY OF IOWA CITY, IOWA By: AAz:& Mathew J. Hayek, ayor By: 2 - i �y Mari k K. Karr, City Clerk STATE OF IOWA ) )ss: JOHNSON COUNTY ) On this a)A day of :: vLe-- , 2014, before me, the undersigned, a Notary Public in and for said County and State, personally appeared Mathew J. Hayek and Marian K. Karr, to me personally known, who being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of said municipal corporation executing the within and foregoing instrument; that the seal affixed thereto is the seal of said municipal corporation; that said instrument was signed and sealed on behalf of said municipal corporation by authority of City Council of said municipal corporation; and that the said Mathew J. Hayek and Marian K. Karr acknowledged the execution of said instrument to be the voluntary act and deed and said municipal corporation, by it and by them voluntarily executed. o ''& s � Commission Number 221819 KELLIE K. TUTTLE Notary Public in and for the State of Iowa my Co imiss'on Expires IOw Prepared by: Robert Miklo, Senior Planner, 410 E. Washington St., Iowa City, IA 52240 (319) 356 -5240 (SUB14- 00009) RESOLUTION NO. 14 -205 RESOLUTION APPROVING FINAL PLAT OF LINDEDMANN SUBDIVISION - PART SIX, IOWA CITY, IOWA. WHEREAS, the owner, Walden Wood Associates II LLP, filed with the City Clerk the final plat of Lindemann Subdivision - Part Six, Iowa City, Iowa, Johnson County, Iowa; and WHEREAS, said subdivision is located on the following- described real estate in Iowa City, Johnson County, Iowa, to wit: Commencing at the Northeast Corner of the Southwest Quarter of Section 7, Township 79 North, Range 5 West, of the Fifth Principal Meridian; Thence S00 °05'18 "E along the East Line of the Southwest Quarter of said Section 7, a distance of 932.06 feet, to the Point of Beginning; Thence continuing S00 °05'18 "E, along said East Line, 216.00 feet, to the Northeast Corner of Lindemann Subdivision - Part Four B, in accordance with the Recorded Plat thereof; Thence S89 °54'42 "W, along the North Line of said Lindemann Subdivision - Part Four B, 180.00 feet; Thence S00 °05'18 "E, along said North Line, 36.86 feet; Thence S89 054'42 "W, along said North Line, 690.59 feet; Thence S78 °35'02 "W, along said North Line, 127.85 feet; Thence S1 1'24'58"E, along said North Line, 23.08 feet; Thence S78 °35'02 "W, along said North Line, 120.00 feet, to the Northwest Corner thereof, and a Point on the East Line of Lindemann Subdivision - Part Four A, to Iowa City, Iowa, in accordance with the Plat thereof Recorded in Plat Book 57 at Page 277 of the Records of the Johnson County Recorder's Office; Thence NI 1'24'58"W, along said East Line, 106.89 feet; Thence N00 °05'18 "W, along said East Line and the Northerly Projection thereof, 155.19 feet; Thence N08 °51'01 "W, 66.30 feet; Thence N80 °04'01 "E, 125.00 feet; Thence N73 023'26 "E, 50.31 feet; Thence N89 °54'42 "E, 848.78 feet; Thence SOO °05'18 "E, 37.02 feet; Thence N89 054'42 "E, 120.00 feet, to the Point of Beginning. Said Tract of Land contains 7.41 Acres, and is subject to easements and restrictions of record. WHEREAS, the Department of Neighborhood and Development Services and the Public Works Department examined the proposed final plat and subdivision, and recommended approval; and WHEREAS, a dedication has been made to the public, and the subdivision has been made with the free consent and in accordance with the desires of the owners and proprietors; and WHEREAS, said final plat and subdivision are found to conform with Chapter 354, Code of Iowa (2013) and all other state and local requirements. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, THAT: 1. The said final plat and subdivision located on the above - described real estate be and the same are hereby approved. 2. The City accepts the dedication of the streets and easements as provided by law and specifically sets aside portions of the dedicated land, namely streets, as not being open for Resolution No. 14 -205 Page 2 public access at the time of recording for public safety reasons. The City shall accept dedication of the outlot upon satisfaction of the terms and conditions stated in the Subdivider's Agreement. 3. The Mayor and City Clerk of the City of Iowa City, Iowa, are hereby authorized and directed, upon approval by the City Attorney, to execute all legal documents relating to said subdivision, and to certify a copy of this resolution, which shall be affixed to the final plat after passage and approval by law. The City Clerk shall record the legal documents and the plat at the office of the County Recorder of Johnson County, Iowa at the expense of the owner /subdivider. Passed and approved this 30th day of ATTEST: 24 ,,.) W. 74(tl CITY CbERK It was moved by trims adopted, and upon roll call there were: AYES: X X X X X x pcdltemplaleslFinal Plat - Resolution (2) doc doc NAYS: MAYOR 2014. Approved by Ays 4ityttornOffice(P a7�y and seconded by Payne the Resolution be ABSENT: X Botchway Dickens _ Dobyns _ Hayek _ Mims _ Payne Throgmorton To: City Council Item: SUB14 -00009 Lindemann Subdivision — Part 6 GENERAL INFORMATION: STAFF REPORT Prepared by: Robert Miklo Date: June 27, 2014 Applicant: Southgate Development 755 Mormon Trek Blvd Iowa City, IA 52246 (319)337 -4195 gsiders @sgdev.net Property Owner: Requested Action: Purpose: Location: Size: Existing Land Use and Zoning: Surrounding Land Use and Zoning Comprehensive Plan: Neighborhood Open Space District: File Date: 60 Day Limitation Period: Walden Wood Associates LLC 755 Mormon Trek Blvd. Iowa City, IA 52244 Final plat approval Development of a 39 -lot residential subdivision Lillian Street 7.41 acres Planned Development Overlay (OPD8) North: Agricultural (OPD8) South: Residential (OPD8) East: Residential (OPD8) West: Residential (OPD5) Low density single family residential Lower West Branch (NE3) May 27, 2014 July 25, 2014 BACKGROUND INFORMATION: The applicant, Southgate Development, has submitted a final plat for a 39 -lot, 7.41 -acre subdivision located at Lillian Street. The preliminary plat for Lindemann Subdivision Parts 4B, 6 & 7 was approved on February 18, 2014. ANALYSIS: The final plat of Lindemann Subdivision Part 4B is in general compliance with the approval of the preliminary plat and subdivision regulations. The property is subject to a Conditional Zoning Agreement (CZA) that requires the developer to contribute funds to the City for the reconstruction E of Lower West Branch Road, inclusion of a greenway and trail along the stream and wetland corridor, and an interconnected street pattern including future connections to Lower West Branch Road. Construction drawings are currently being reviewed by staff. Neighborhood parkland or fees in lieu of: The applicant has dedicated the stream corridor to the west of the property as open space and will extend the Court Hill Trail. This dedication satisfies the open space requirements of the Neighborhood Open Space Ordinance and the required greenway dedication of the CZA, so there are no additional open space requirements for this subdivision. Infrastructure Fees: At the time of final plat approval the applicant will be required to pay $395 per acre for water main extension fees and a sanitary sewer tap -on fee of $1,038.26 per acre. Per the CZA, the applicant is required contribute funds toward the cost of reconstructing Lower West Branch Road, which fee is to be satisfied with Lindemann Subdivision — Part 4B. Payment of these fees should be addressed in the legal papers. STAFF RECOMMENDATION Staff recommends approval of SUB14- 00009, the final plat of Lindemann Subdivision — Part 6, a 39 -lot, 7.41 acre residential subdivision located at Lillian Drive subject to approval of construction drawings and legal papers by the City Engineer and City Attorney. ATTACHMENTS 1. Location Map 2. Final plat Approved by: Doug Boothroy, Director, Department of Neighborhood nd Development 4rvices PCD \Staff Reports \part 6 staff report.docx Prepared by: Robert Miklo, Senior Planner, 410 E. Washington St., Iowa City, IA 52240 (319) 356 -524- (SUB14- 00010) RESOLUTION NO. 14 -206 RESOLUTION APPROVING FINAL PLAT OF LINDEMANN SUBDIVISION - PART 4B, IOWA CITY, IOWA. WHEREAS, the owner, Walden Wood Associates II LLP, filed with the City Clerk the final plat of Lindemann Subdivision - Part 4B, Iowa City, Iowa, Johnson County, Iowa; and WHEREAS, said subdivision is located on the following- described real estate in Iowa City, Johnson County, Iowa, to wit: Beginning at the Northeast Corner of Lindemann Subdivision - Part Three, to Iowa City, Iowa, in accordance with the Plat thereof Recorded in Plat Book 47 at Page 77 of the Records of the Johnson County Recorder's Office; Thence S89 054'42 "W, along the North Line of said Lindemann Subdivision - Part Three, a distance of 125.00 feet; Thence N00 °05'18 "W, along said North Line, 20.00 feet; Thence S89 °54'42 "W, along said North Line, 697.57 feet; Thence S78 °35'02 "W, along said North Line, 117.97 feet; Thence S11 °24'58 "E, along said North Line, 26.48 feet; Thence S78 °35'02 "W, along said North Line, 120.00 feet, to the Southeast Corner of Lindemann Subdivision - Part Four A, to Iowa City, Iowa, in accordance with the Plat thereof Recorded in Plat Book 57 at Page 277 of the Records of the Johnson County Recorder's Office; Thence N11 °24'58 "W, along the East Line of said Lindemann Subdivision - Part Four A, a distance of 297.18 feet; Thence N78 035'02 "E, 120.00 feet; Thence N11 °24'58 "W, 23.08 feet; Thence N78 °35'02 "E, 127.85 feet; Thence N89 °54'42 "E, 690.59 feet; Thence N00 °05'18 "W, 36.86 feet; Thence N89 054'42 "E, 180.00 feet to a Point on the East Line of Lindemann Subdivision - Part Four, to Iowa City, Iowa, in accordance with the Plat thereof Recorded in Plat Book 47 at Page 78 of the Records of the Johnson County Recorder's Office; Thence S00 005'18 "E, along said East Line, 346.86 feet, to the Point of Beginning. Said Tract of Land contains 7.49 Acres, and is subject to easements and restrictions of record. WHEREAS, the Department of Neighborhood and Development Services and the Public Works Department examined the proposed final plat and subdivision, and recommended approval; and WHEREAS, a dedication has been made to the public, and the subdivision has been made with the free consent and in accordance with the desires of the owners and proprietors; and WHEREAS, said final plat and subdivision are found to conform with Chapter 354, Code of Iowa (2013) and all other state and local requirements. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, THAT: The said final plat and subdivision located on the above - described real estate be and the same are hereby approved. 2. The City accepts the dedication of the streets and easements as provided by law and Resolution No. 14 -206 Page 2 specifically sets aside portions of the dedicated land, namely streets, as not being open for public access at the time of recording for public safety reasons. 3. The Mayor and City Clerk of the City of Iowa City, Iowa, are hereby authorized and directed, upon approval by the City Attorney, to execute all legal documents relating to said subdivision, and to certify a copy of this resolution, which shall be affixed to the final plat after passage and approval by law. The City Clerk shall record the legal documents and the plat at the office of the County Recorder of Johnson County, Iowa at the expense of the owner /subdivider. Passed and approved this 30th day of ,tune , 2014. MAYOR Approved by ATTEST: CITY CLERK City Attorney's Office (p/9- y�yy It was moved by trims and seconded by Payne the Resolution be adopted, and upon roll call there were: AYES: NAYS: ABSENT: _ X Botchway X Dickens X Dobyns X Hayek X Mims X Payne x Throgmorton padllemplateslFinal Plat - Resolution (4).doc. doc To: City Council Item: SUB14 -00010 Lindemann Subdivision Part 4B GENERAL INFORMATION STAFF REPORT Prepared by: Robert Miklo Date: June 27, 2014 Applicant: Southgate Development 755 Mormon Trek Blvd Iowa City, IA 52246 (319)337 -4195 gsiders @sgdev.net Property Owner Requested Action: Purpose: Location: Size: Existing Land Use and Zoning: Surrounding Land Use and Zoning: Comprehensive Plan: Neighborhood Open Space District: File Date: 60 Day Limitation Period: Walden Wood Associates LLC 755 Mormon Trek Blvd. Iowa City, IA 52244 Final plat approval Development of a 28 -lot residential subdivision Camden Road 7.49 acres Planned Development Overlay (OPD5) North: Agricultural (OPD8) South: Residential (OPD8) East: Residential (OPD8) West: Residential (OPD5) Low density single family residential Lower West Branch (NE3) May 27, 2014 July 25, 2014 BACKGROUND INFORMATION: The applicant, Southgate Development, has submitted a final plat for a 39 -lot, 7.41 -acre subdivision located at Lillian Street. The preliminary plat for Lindemann Subdivision Parts 4B, 6 & 7 was approved on February 18, 2014. ANALYSIS: The final plat of Lindemann Subdivision Part 4B is in general compliance with the approval of the preliminary plat and subdivision regulations. The property is subject to a Conditional Zoning Agreement (CZA) that requires the developer to contribute funds to the City for the reconstruction 2 of Lower West Branch Road, inclusion of a greenway and trail along the stream and wetland corridor, and an interconnected street pattern including future connections to Lower West Branch Road. Construction drawings are currently being reviewed by staff. Neighborhood parkland or fees in lieu of: The applicant has dedicated the stream corridor to the west of the property as open space and will extend the Court Hill Trail. This dedication satisfies the open space requirements of the Neighborhood Open Space Ordinance and the required greenway dedication of the CZA, therefore there are no additional open space requirements for this subdivision. Infrastructure Fees: At the time of final plat approval the applicant will be required to pay $395 per acre for water main extension fees and a sanitary sewer tap -on fee of $1,038.26 per acre. Per the CZA, the applicant is required to pay $123,456.21 for the reconstruction of Lower West Branch Road. This fee satisfies the obligation for Lindemann Subdivision, Parts 4A, 413, 5, 6 and 7. Payment of these fees should be addressed in the legal papers. STAFF RECOMMENDATION Staff recommends approval of SUB14- 00009, the final plat of Lindemann Subdivision Part 4B, a 28 -lot, 7.49 acre residential subdivision located at Lillian Drive subject to approval of construction drawings and legal papers by the City Engineer and City Attorney. ATTACHMENTS: 1. Location 2. Final plat Approved by: Doug Boothroy, Director Department of Neighborhoo and Development PCD%Staff Reports%subl4 -00010 staff report.dou REVISED Prepared by: Eleanor Dilkes, City Attorney, 410 E. Washington St., Iowa City, IA 52240 (319) 356 -5030 RESOLUTION NO. 14 -207 RESOLUTION REQUESTING SUBMISSION OF THE QUESTION OF THE IMPOSITION OF A LOCAL SALES AND SERVICES TAX TO THE QUALIFIED ELECTORS OF THE INCORPORATED AND UNINCORPORATED AREAS OF JOHNSON COUNTY. WHEREAS, Chapter 4238 of the Iowa Code provides for the imposition of certain local option taxes, including a local sales and services tax; and WHEREAS, the Code provides that the question of the imposition of a local sales and services tax shall be submitted to the registered voters of the incorporated and unincorporated areas of the county upon receipt by the county commissioner of elections of the motion or motions, requesting such submission, adopted by the governing body or bodies of the city or cities within the county representing at least one -half the population of the county; and WHEREAS, the City Council of the City of Iowa City, Iowa is the governing body of a city whose population constitutes in excess of one -half of the population of Johnson County; and WHEREAS, it is estimated that the State property tax reform legislation passed in 2013 will result in lost property tax revenue of $37 million over the next 10 years to the City of Iowa City and the potential for an additional $14.7 million in lost revenue if the State fails to honor its backfill commitments; and WHEREAS, in addition to other strategies such as controlled spending and the creation of operating efficiencies, it is essential for the City to diversify its revenues if it is to have funds available to implement the Council's strategic plan to foster a more inclusive and sustainable Iowa City through a commitment to healthy neighborhoods, a strong urban core, strategic economic development activities, a solid financial foundation and enhanced communication and marketing; and, WHEREAS, with the exception of the Iowa City and Des Moines areas, all metropolitan areas in the State of Iowa have a local option sales tax which allows them to diversify their revenue structure, reduce their property tax rates and invest in community priorities; and WHEREAS, while Iowa City has lowered its property tax rate in each of the last three years through reduced staffing and restructuring, it still has the fourth highest property tax rate of the ten largest cities in the State and a rate that is significantly higher than its neighboring communities, putting it at a competitive disadvantage both in the region and the State; and WHEREAS, significant additional reductions in Iowa City's property tax rate will require an alternative revenue stream; and, WHEREAS, adequate funding for the construction and maintenance of public street infrastructure is essential to creating and maintaining a strong urban core and healthy neighborhoods; and, WHEREAS, maintenance of City streets has been deferred due to inadequate revenues in the Road Use Tax Fund; and, WHEREAS, adequate funding of street and trail infrastructure to serve pedestrians, bicycles and elderly and disabled persons is essential to fostering a sustainable and inclusive community; and, WHEREAS, in recognition of the need for additional affordable housing in the Iowa City metropolitan area, and in furtherance of the City's commitment to Healthy Neighborhoods, the City's 2014 -2015 strategic plan includes a new initiative to evaluate programs and methods to promote affordable housing; and, WHEREAS, the Iowa City area is home to a network of entities that are dedicated to increasing the availability of affordable housing and able to effectively and efficiently implement affordable housing projects in the event that additional revenue is made available to them; and, WHEREAS, when compared to other available sources of revenue the local option sales tax provides the greatest amount of revenue with the least financial impact on city residents because a substantial portion of the revenue would come from visitors to the Iowa City metropolitan area; and, WHEREAS, the City Council finds it to be in the best interests of the City for the voters to be asked whether a 1 cent local sales and services tax should be imposed for a period of ten (10) years and used by the City of Iowa City for property tax relief, public street and trail infrastructure and affordable housing as set forth in the ballot proposition stated below. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, as follows: 1. The following ballot proposition language for the proposed imposition of a local sales and services tax is approved: SHALL THE FOLLOWING PUBLIC MEASURE BE ADOPTED? Yes lZro, Summary: To authorize imposition of a local sales and services tax in the cities of Iowa City, and the unincorporated area of Johnson County at the rate of one percent (1 %) to be effective from July 1, 2015 until June 30, 2025. A local sales and services tax shall be imposed in the cities of Iowa City, , and in the unincorporated area of Johnson County at the rate of one percent (1 %) to be effective from July 1, 2015 until June 30, 2025. Revenues from the sales and services tax are to be allocated as follows: FOR THE CITY OF IOWA CITY: 50% for property tax relief. 40% for maintenance, repair, construction and reconstruction of public streets, trails and associated infrastructure. 10% for programs and initiatives that increase affordable housing. 2. The Johnson County Commissioner of Elections is hereby requested and authorized to place said ballot proposition language on the ballot for a special election to be held on the date of the general election on November 4, 2014. 3. The Board of Supervisors is hereby requested to consider the Iowa City City Council's request to direct that the ballot contain a provision for the repeal, without election, of the local sales and service tax on June 30, 2025. 3. The City Clerk is hereby authorized and directed to promptly provide a certified copy of this resolution to the Johnson County Commissioner of Elections and to notify the Johnson County Board of Supervisors of the adoption of this resolution. Passed and approved this 30th day of June , 2014. proved 7 City Attorney's Office MAYOR ATTEST: t% CLERK Resolution No. Page 4 14 -207 It was moved by Mims and seconded by Botchway the Resolution be adopted, and upon roll call there were: AYES: x x x x x DAYS: ABSENT: Botchway Dickens Dobyns Hayek Mims x Payne x Throgmorton Prepared by: Eleanor Dilkes, City Attorney, 410 E. Washington St., Iowa City, IA 52240 (319) 356 -5030 RESOLUTION NO. 14 -207 RES LOTION REQUESTING SUBMISSION OF THE QUESTION THE IMPO TION OF A LOCAL SALES AND SERVICES TAX TO TH QUALIFIED ELECT S OF THE INCORPORATED AND UNINCORPORAT I AREAS OF JOHNSO OUNTY. WHEREAS, Chapter 3B of the Iowa Code provides for the imp ition of certain local option taxes, including a local s les and services tax; and WHEREAS, the Code provi s that the question of the imp ition of a local sales and services tax shall be submitted to the re istered voters of the inco orated and unincorporated areas of the county upon receipt by the c my commissioner of lections of the motion or motions, requesting such submission, adop d by the governi body or bodies of the city or cities within the county representing at least one alf the popul on of the county; and WHEREAS, the City Council of the City f Iowa Zity, Iowa is the governing body of a city whose population constitutes in excess of one-h of )fie population of Johnson County; and WHEREAS, it is estimated that the State pr rty tax reform legislation passed in 2013 will result in lost property tax revenue of $37 illio over the next 10 years to the City of Iowa City and the potential for an additional $14.7 illion i lost revenue if the State fails to honor its backfill commitments; and WHEREAS, in addition to other str egies such as co trolled spending and the creation of operating efficiencies, it is essential for the City to dive ify its revenues if it is to have funds available to implement the Coun I's strategic plan to fo er a more inclusive and sustainable Iowa City through a commitme to healthy neighborhood a strong urban core, strategic economic development activit s, a solid financial foundatio and enhanced communication and marketing; and, WHEREAS, with the exce tion of the Iowa City and Des Moines reas, all metropolitan areas in the State of Iowa have a ocal option sales tax which allows them \o diversify their revenue structure, reduce their prYoperty tax rates and invest in community iorities; and WHEREAS, while to a City has lowered its property tax rate in each f the last three years through reduced st ing and restructuring, it still has the fourth highe property tax rate of the ten largest cities i the State and a rate that is significantly higher than s neighboring communities, put ng it at a competitive disadvantage both in the region knd the State; and WHEREAS, sigfiificant additional reductions in Iowa City's property tax rat will require an alternative rev nue stream; and, WHEREAS adequate funding for the construction and maintenance of public Xtreet infrastructure is essential to creating and maintaining a strong urban core and h althy neighborhoods; and, WHEREAS, maintenance of City streets has been deferred due to inadequate reve es in the Road Use Tax Fund; and, WHEREAS, adequate funding of street and trail infrastructure to serve pedestrians, bicycles and elderly and disabled persons is essential to fostering a sustainable and inclusive community; and, WHEREAS, in recognition of the need for additional affordable housing in the Iowa City metropolitan area, and in furtherance of the City's commitment to Healthy Neighborhoods, the City's 201 015 strategic plan includes a new initiative to evaluate programs and methods to promote affor ble housing; and, WHEREAS, the to a City area is home to a network of entities that are dedicated to increasing the availability of affXdable housing and able to effectively and fficiently implement affordable housing projects in the vent that additional revenue is made av�y ilable to them; and, WHEREAS, when compar to other available sources of rev ue the local option sales tax provides the greatest amoun f revenue with the least finan al impact on city residents because a substantial portion o he revenue would come m visitors to the Iowa City metropolitan area; and, WHEREAS, the City Council finds it t e in the bes nterests of the City for the voters to be asked whether a 1 cent local sales and ervices to should be imposed for a period of ten (10) years and used by the City of Iowa City fo prope tax relief, public street and trail infrastructure and affordable housing as serlortVin the ballot proposition stated below. NOW, THEREFORE, BE IT RESOLVED BY CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, as follows: 1. The following ballot proposition lang ge for the roposed imposition of a local sales and services tax is approved: SHALL THE FOLLOWING P/UBL EASURE BE ADO TED? Yes No Summary: To authorize imp a local sales and services x in the cities of Iowa City, and the unincorpor ed area of Johnson County at the rate of one percent %) to be effective from July 1, 2015 unti une 30, 2025. A local sales and servic s tax shall be imposed in the cities of Iowa Cit at the rate of one perc t (1 %) to be effective from July 1, 2015 until Jun 30, 2025. Revenues fro/the ales and services tax are to be allocated as follows: FOR THE CITOWA CITY: 50% perty tax relief. 40 °/d for maintenance, repair, construction and reconstruction of public stree%, trails and associated infrastructure. 10% for programs and initiatives that increase affordable housing. 2. The Johnson County Commissioner of Elections is hereby requested and authorized to place said ballot proposition language on the ballot for a special election to be held on the date of the general election on November 4, 2014. 3. The Board of Supervisors is hereby requested to consider the Iowa City City Council's request to direct that the ballot contain a provision for the repeal, without election, of the local sales and service tax on June 30, 2025. 3. The City Clerk is hereby authorized and directed to promptly provide a certified co y of this resolution to the Johnson County Commissioner of Elections and to notify the John n County Board of,,Supervisors of the adoption of this resolution. Passed aitq approved this 30th day of June ,/ 2014. M'6 7 rove ATTEST: C IT CLERK & - aL/ City Attorney's Office Resolution No. 14 -207 WA WHEREAS, adequate funding of street and trail infrastructure to serve pedestrians, bicycles and elderly and disabled persons is essential to fostering a sustainable and inclusive community; and, WHEREAS, in recognition of the need for additional affordable housing in the Iowa City metropolitan area, and in furtherance of the City's commitment to Healthy Neighborhoods, the City's 2014 -2015 strategic plan includes a new initiative to evaluate programs and methods to promote affordable hl� using; and, WHEREAS, the Iowa CN area is home to a network of entities that are de icated to increasing the availability of affordabX housing and able to effectively and efficiently ' plement affordable housing projects in the eve that additional revenue is made available to hem; and, WHEREAS, when compared t other available sources of revenue the ocal option sales tax provides the greatest amount of Vvenue with the least financial impap on city residents because a substantial portion of t revenue would come from visit s to the Iowa City metropolitan area; and, WHEREAS, the City Council finds it to a in the best interests the City for the voters to be asked whether a 1 cent local sales and ervices tax should b imposed for a period of ten (10) years and used by the City of Iowa City f property tax reliof, public street and trail infrastructure and affordable housing ass forth in the b@Aot proposition stated below. NOW, THEREFORE, BE IT RESOLVED BY CITY, IOWA, as follows: 1. The following ballot proposition language for services tax is approved: , CITYCOUNCIL OF THE CITY OF IOWA proposed imposition of a local sales and SHALL THE FOLLOWING PUBLIC MEASU E BE A \se ED? Yes No Summary: To authorize imposition of local sales aices ta x in the cities of Iowa City, and the unin orporated area of Johnson County at the rate of one percent (1 %) to b effective from July 1, 20 5 until June 30, 2025. A local sales and services tax sh II be imposed in the cities of I a City, at the rate of one percent (1 %) be effective from July 1, 2015 u til June 30, 2025. Revenues from the sales and'services tax are to be allocated as fol FOR THE CITY OF IOWA ,CITY: 60% for property tax relief. 30% for maintenance, repair, construction and reconstruction of plic streets and associated infrastructure. \\ 10% for programs and initiatives that increase affordable housing. CITY OF IOWA CITY � MEMORANDUM Date: June 26, 2014 To: Tom Markus, City Manager From: Steve Long, Neighborhood Services Coordinator Re: Affordable Housing for the Local Option Sales Tax This memo is to clarify the definition of affordable housing for a portion of the proceeds from the proposed Local Option Sales Tax (LOST) and also to recommend uses of the LOST funds. The generally accepted definition of affordability is for a household to pay no more than 30% of its annual income on housing, including utility costs. The definition of affordable housing often depends on the source of funding for a particular project. For instance, City staff administers a variety of federal programs that require housing to be affordable for those households under 80% of area median income as annually defined by the U.S. Department of Housing and Urban Development (HUD). For rental projects, rent is capped at the HUD Fair Market Rent (FMR) for Community Development Block Grant (CDBG) and HOME Investment Partnerships Program (HOME) funded projects. Under the HOME program, the purchase price or after - rehabilitation value of owner - occupied homes may not exceed the HUD Homeownership Value Limit which is currently $200,000. Staff recommends that the City define affordable housing as housing that is affordable for households under 80% of area median income (AMI) for rental homes and under 120% AMI for owner - occupied homes. In addition, maximum rents should be at or below the HUD Fair Market Rent levels and purchase prices should be capped at the HUD Homeownership Value Limit of $200,000. That would equate to income levels as follows: For rental units, using the HUD determined Fair Market Rent (FMR) monthly rent limits for Iowa City is appropriate. Those monthly rent limits are as follows: Studio $ 558.00 One - bedroom $ 668.00 Two - bedroom $ 851.00 Three - bedroom $1,254.00 The annual income limits, monthly rent limits and maximum sales price figures may be adjusted as HUD makes amendments. 80% AMI 120% AMI One person household annual income $44,550 $66,840 Two person household annual income $50,900 $76,320 Three person household annual income $57,250 $85,920 Four person household annual income $63,600 $95,400 For rental units, using the HUD determined Fair Market Rent (FMR) monthly rent limits for Iowa City is appropriate. Those monthly rent limits are as follows: Studio $ 558.00 One - bedroom $ 668.00 Two - bedroom $ 851.00 Three - bedroom $1,254.00 The annual income limits, monthly rent limits and maximum sales price figures may be adjusted as HUD makes amendments. June 26, 2014 Page 2 Some suggested uses of the LOST funds are as follows: • Downpayment assistance programs for homeownership • Land banking for future affordable housing development • UniverCity Neighborhood Partnership or similar neighborhood stabilization programs • Creation of long -term affordable rental housing • Creation of shelter and transitional housing opportunities • Creation of homeownership opportunities • Improving and rehabilitating existing affordable owner - occupied and rental homes Please feel free to contact me at 356 -5250 or at steve - long @iowa - city.org if you have any questions. Cc: Doug Boothroy, Director of Neighborhood and Development Services smt 4:1 F: �4 ON Date: June 26, 2014 CITY OF IOWA CITY MEMORANDUM To: Tom Markus, City Manager From: Simon Andrew, Administrative Analyst Re: Property Tax Revenue by Property Class Introduction: At the June 17 work session discussion of Local Option Sales Tax options, the questions were raised as to what percentage of City property tax dollars come from each of the property classifications, e.g. residential, commercial, etc. and whether these property classes can be taxed at different rates. Please find attached a summary of property valuations and property tax dollars by property class for fiscal years 2013 -2014 and 2014 -2015. Property classes cannot be taxed at different rates. History/Background: It is important to note some caveats with this analysis. Iowa Department of Management property valuation reports by class do not include property tax dollars. Conversely, state budget forms distinguish property tax dollars by levy type, not property class. Property valuation reports note that they should not be used to calculate property tax dollars, as after exemptions, appeals, delinquent payments, etc. property tax dollars may not exactly match the calculation using valuation, rollback percentage, and tax rate. However, any discrepancy in the exact number of property tax dollars collected is not material enough to affect the percentages of property tax dollars by property class. Further, not all levies apply to all property valuation; for example the debt service levy applies to TIF valuations with certified TIF debt, whereas other levies do not. The percentages presented use property subject to all City levies. The multi - family residential property classification created with 2013 state property tax reform is as of yet not represented on state valuation reports. This new property class will be taxed at a lower percentage each year until it reaches the residential rollback percentage in the year 2022. With additional research, actual property tax dollars can be communicated more exactly, however, this will not affect the rounded percentages presented. Property subject to all Iowa City levies: Property Class FY14 Valuation ova FY14 Rollback % FY14 Tax Dollar % FYI Valuation ova FYI Rollback % FYI Tax Dollar % Residential 74% 53% 60% 74% 54% 62% Commercial 24% 100% 37% 24% 95% 35% Industrial 2% 100% 2% 2% 95% 2% Railroads <1% 100% <1% <1% 95% <1% Utilities* <1% 100% <1% <1% 100% <1% *Does not include gas & electric utilities, as they are subject to an excise tax and not property taxes. FY13 -14 Non- TIF..... Percentage of 100% Rollback Taxable Percentage of Tax Revenue to 100 %Valuation valuation•••• Percentage Valuation- Taxable valuation Levy Rate the City Residential $3,367,051,717 73.77% 52.8166% $1,776,096,066 59.73% $16.805 $29,847,685 Commercial $1,113,600,025 24.40% 100.00000A $1,113,600,025 37.45% $16.805 $18,714,293 Industrial $72,834,630 1.60% 100.0000% $72,834,630 2.45% $16.805 $1,224,002 Railroads $3,205,453 0.07% 100.0000°.5 $3,205,451 0.11% $16.805 $53,868 Utilities" $10,816,940 0.24% 100.0000% $10,816,940 0.36% $16.805 $181,781 Military Exemption - $3,059,502 -0.07% - $3,059,502 -0.10% $16.805 - $51,416 subtotal - all levies $4,564,449,261 $2,973,493,610 $16.805 $49,970,214 Ag Land••" $2,617,340 59.9334% $1,568,661 $3.004 $4,712 Ag Buildings*** $38,300 59.9334% $22,954 $3.004 $69 Homestead - $10,616 subtotal Ag $2,645,024 $1,591,615 $3.004 $4,781 TIF - Debt Service only Residential $4,802,843 100.0000% $4,802,843 $4.030 $19,354 Commercial $4,853,885 100.0000% $4,853,885 $4.030 $19,559 Industrial $4,457,180 100.0000% $4,457,180 $4.030 $17,961 subtotal - w /Debt Service $50,031,869 SSMID - pass through $137,659,815 100.0000% $137,659,815 $2.000 $275,320 Total without Gas & Electric $50,307,189 G &E Utilities" $87,100,183 $46,813,214 -Figures won't match 100% valuation multiplied by rollback, due to rounding, exemptions, etc. ' "Gas and Electric utilities are in a separate class, as they are not subject to property taxes. They are subject to the G & E excise tax which roughly mirrors the property tax rate but captures revenue from out of state utility companies selling energy in Iowa. ... Ag property taxed at a different rate. ....Percentage of valuation subject to all levies. Excludes G & E utilities but Includes military exemptions. • "••'TIF Revenue is not considered property tax- it is represented in Special Revenue on State forms. The TIF valuation above is only subject to the Debt Service levy. FY14 -15 $3,638,120 43.3997% Non - TIF •' "• $3.004 $4,743 Ag Buildings*** $42,800 43.3997% Percentage of $3.004 $56 Percentage of - $10,603 100% Rollback Taxable Taxable $1,597,501 Tax Revenue to $4,798 100 %Valuation valuation "" Percentage Valuation• valuation Levy Rate the City Residential $3,488,112,611 73.85% 54.4002% $1,894,079,854 61.76% $16.705 $31,640,983 Commercial $1,144,437,631 24.23% 95.0000% $1,086,556,293 35.43% $16.705 $18,151,140 Industrial $80,153,614 1.70% 95.0000% $76,128,877 2.48% $16.705 $1,271,748 Railroads $3,827,506 0.08% 95.0000% $3,636,130 0.12% $16.705 $60,742 Utilities *' $9,599,528 0.20% 100.0000% $9,599,528 0.31% $16.705 $160,362 Military Exemption - $2,939,122 -0.06% - $2,939,122 -0.10% $16.705 - $49,393 subtotal -all levies $4,723,191,768 3,067,061,560 $16.705 $51,235,877 Ag Land•'" $3,638,120 43.3997% $1,578,926 $3.004 $4,743 Ag Buildings*** $42,800 43.3997% $18,575 $3.004 $56 Homestead - $10,603 subtotal All $3,670,317 $1,597,501 $3.004 $4,798 TIF - Debt Service only Residential $7,587,849 100.0000% $7,587,849 $4.130 $31,335 Commercial $13,202,459 100.0000% $13,202,459 $4.130 $54,521 Industrial $341,266 100.0000% $341,266 $4.130 $1,409 subtotal - w /Debt Service $51,327,941 SSMID - pass through $140,394,837 100.0000% $140,394,837 $2.000 $280,790 Total without Gas & Electric $51,608,731 G &E Utilities-- $78,642,915 $47,004,994 -Figures won't match 100%valuation multiplied by rollback, due to rounding, exemptions, etc. --Gas and Electric utilities are in a separate class, as they are not subject to property taxes. They are subject to the G & E excise tax which roughly mirrors the property tax rate but captures revenue from out of state utility companies selling energy In Iowa. ...Ag property taxed at a different rate. ****Percentage of valuation subject to all levies. Excludes G & E utilities but includes military exemptions. •••' "TIF Revenue is not considered property tax- it is represented in Special Revenue on State forms. The TIF valuation above is only subject to the Debt Service levy. 5 Marian Karr From: John Thomas <johnfredericthomas @gmail.com> Sent: Sunday, June 29, 2014 8:34 AM To: Council Subject: Local Option Sales Tax Dear Members of City Council, While I strongly support exploring effective ways of reducing our reliance on property taxes for revenue, I urge you to defer placing the Local Option Sales Tax on the ballot until 2015. Jim Throgmorton's memo of June 26 raises a number of valid concerns, and proposes an alternative distribution heading in a direction that I believe will receive voter support. I would like to add the following comments. • Before passing judgement on Iowa City's current property tax rate, I need to better understand the reasons why it is higher than the rates in surrounding cities. How do the goods and services we receive compare with theirs, and do they justify higher rates? In addition to the poor condition of our street infrastructure, I would say Iowa City's public realm has an overall feeling of being tired and neglected. This quality affects residents and visitors alike and undermines our appeal when compared with other towns and cities. To improve Iowa City's quality of life and image, we need to match the Iowa City Community School District's reinvestment in our schools with a similar reinvestment in our public realm. • Iowa City desperately needs more diverse, affordable housing of a quality that will be embraced by the community. As noted in the 2013 survey of citizen satisfaction, the quality of new development received poor ratings. Thus, in addition to increasing our housing investment, our design standards must ensure that it generates fiscal wealth and community prosperity. John Thomas Iowa City Marian Karr From: Figdor, Carrie <carrie -fgdor @uiowa.edu> Sent: Sunday, June 29, 2014 12:25 PM To: Council Subject: support for jim throgmorton's amendments I am writing to express my support for Jim Throgmorton's amendments regarding the proposed LOST tax, as detailed in his letter to the council. Thank you. Dr. Carrie Figdor Associate Professor, Department of Philosophy and Interdisciplinary Graduate Program in Neuroscience University of Iowa 260 EPB Iowa City, IA 52242 (319) 335 -0093 carrie -fi dor , uiowa.edu 0 Marian Karr From: Christina Welu- Reynolds <chriswelu @gmail.com> Sent: Sunday, June 29, 2014 11:57 PM To: Council Subject: LOST Dear City of Iowa City Council Members, On Monday, June 30th members of the Council will be holding a special work session to discuss the Local Option Sales Tax (LOST). Part of the discussion will be how Iowa City's portion of the sales tax will be spent if voters of Iowa City and other related cities approve the tax. The draft resolution shows 60% of the sales tax revenue would be allocated to "property tax relief', 30% to "maintenance, repair, construction and reconstruction of public streets and associated infrastructure ", and 10% to "programs and initiatives that increase affordable housing." Allocating 60% of the LOST revenue toward property tax relief is too high. Iowa City attracts people because of the unique features of the city, including walkable neighborhoods, mixed neighborhoods, the schools, parks and the aesthetic nature of the central district. My husband and I are both public school employees and would consider ourselves somewhere in the middle class. We have purchased three different homes in Iowa City and never was the property tax mill rate a factor when making a purchase. Instead, we considered what assets Iowa City has to offer. A higher percentage of the LOST revenue would be better spent on investing in our neighborhoods and quality housing. I would also ask that a process be developed where the general public can give input regarding how Iowa City's share of the LOST revenue would be spent. Please consider decreasing the percentage of LOST revenue for property tax relief and increasing revenue that continues to enhance the unique character of Iowa City which is why people choose to live here. Thank you for taking the time to read this email and for serving on our City Council. Christina Welu- Reynolds 06/18/2014 01:06 48970 RADIOLOGY PAGE 01/01 June 18, 2014 Iowa. City Council RE: Local Option. Sales Tax (LOST) .I. will vote against any increase in taxes (as will, my spouse). 1.. work at the UI and have not received any increase in wages over the past two years (not even a cost of living raise). As a result, as costs keep rising I have had to tighten. any belt. I suggest the council do the same. Michael Briggs 2832 Brookside Drive Iowa City 52245 r* n Marian Karr From: Matthew J. Hayek <mhayek @hhbmlaw.com> Sent: Monday, June 23, 2014 10:08 AM To: Marian Karr Subject: FW: mrap From: Ed Mary Flaherty fmailto:flahe[yemft.com] Sent: Monday, June 23, 2014 9:41 AM To: pulkrab@co.Johnson.ia.us Cc: rod sullivan; janelle Rettiig; pat harney; mikecarberry; tneuzil; Terry Dickens; Jim Throgmorton; Kingsley Botchway; Matt Hayek; Susan Mims Subject: mrap Free? We the taxpayers paid nearly a million dollars for it in the first place to help mount a war effort that was based on lies. So now it's "given" to us locals so the militarization of the domestic scene can advance, with the added benefit that the war contractors can build more, charging us even more. No justification for elected public officials to be blind -sided on this imho Ed Flaherty, Veteran for Peace Marian Karr From: Carol deProsse <lonetreefox @mac.com> Sent: Wednesday, June 25, 2014 7:14 AM To: Council Subject: Sales Tax Councilors, I write to urge you not to place the matter of a penny increase in the sales tax on the ballot this fall. I can't imagine voters voting to increase their taxes twice by voting for both the sales tax increase and voting 'yes' on the proposed Courthouse expansion. Please wait until spring, 2015, or another time to place the LOST matter to voters. We need the Courthouse upgrade so desperately; I would hate to have it fail. Thank you. Carol DeProsse 1401 Burry Drive IC Marian Karr From: Jim Throgmorton Sent: Thursday, June 26, 2014 9:40 AM To: Council Subject: Local Option Sales Tax Attachments: LOST memo Colleagues, At our special work session on the 30th we will be discussing whether or not to call for a referendum on a Local Option Sales Tax. We will also be discussing possible ways of allocating Iowa City's share of the LOST funds, should a majority of voters favor the proposed sales tax. I wanted to share my own thoughts with you prior to the meeting, so that you would have an opportunity to consider them. My recommendations are contained in the attached memo. I look forward to hearing your own views, and to making a decision that is in the best interest of all the people and businesses of the city. Jim Throgmorton District C, Iowa City City Council Please Note: No correspondence (including emails) to City Council is confidential. All correspondence (including emails) to me as a City Council member about City issues is a public record. To: City Council and City Manager Tom Markus From: Jim Throgmorton Subject: Possible Local Option Sales Tax Date: June 26, 2014 Our June 12 information packet contained a report from the Local Option Sales Tax (LOST) Exploratory Committee. The committee recommended that voters be asked to approve a I% LOST on the November 2014 ballot, that the tax remain in effect for 10 years, and that 60% of Iowa City's sales tax revenues be dedicated to property tax relief, 30% to street improvements, and 10% to affordable housing. I have read and considered the report carefully, have had very fruitful conversations with Susan Mims and Tom Markus, and have spoken with a range of people about it, including a variety of locally - elected officials. This process has led me to the following conclusions, all of which I would be happy to elaborate upon during our June 30 work session. First, I agree with the committee that we need to find a way to replace revenues lost due to the State's property tax reforms, etc. A local sales tax appears to be our best available option. Second, I am not persuaded that we need to place the proposed tax on this coming November's ballot. Third, I don't believe Iowa City voters will support a LOST unless they have sufficient opportunity to propose and consider various ideas about how the revenues should be spent. Fourth, acting precipitously now risks worsening our existing relationships with both Johnson County and Coralville. This moment provides us with an opportunity to improve relationships, not worsen them. Fifth, we should defer placing the proposed LOST before the voters until November 2015, or perhaps in a special election. In the months between now and then, we should invite city councilors from contiguous cities to engage in negotiations about how the LOST revenues should be distributed among the five cities. And we should initiate a process by which the general public of Iowa City can propose and consider alternative ways of distributing Iowa City's share of the LOST revenues. Sixth, I cannot support the committee's proposed allocation. It allocates too much money to property tax relief and is likely to be perceived by a large percentage of voters as a transfer of income /wealth from ordinary people to wealthier property owners. Furthermore, I am not persuaded by the "increased competitiveness" rationale underlying the property tax reduction. People are attracted to Iowa City by its distinctive character, not by its property tax mill rate. Seventh, if the full Council chooses to place the LOST referendum on this November's ballot, I propose that we adopt the following distribution: • 40% to property tax relief, • 35% to "Investing for Healthier Neighborhoods," • 25% to "Investing in Housing, People, and a Solar Future." Investing for the Long -Term Prosperity and Health of Existing Neighborhoods. This category would include: • repairing, repaving, and remarking older streets, • installing new ADA ramps, • dramatically improving markings for bicycle lanes and pedestrian crosswalks, • planting and replanting trees in the public right -of -way, • improving walking routes to neighborhood schools, • improving existing neighborhood parks and creating small pocket parks. Investing in Quality Housing, in People, and in a Solar Future. This category would include: • ensuring that more affordable housing is available for the elderly, the disabled, and ordinary working people, • extending the highly - successful UniverCity program, • creating a "Housing First" shelter, • providing storage services for homeless people, • restoring half fares for users of SEATS, • significantly increasing funding for social services through Aid -to- Agencies, • initiating a substantial solar (PV) panel installation program at city -owned facilities (such as Trueblood Park). I recognize that each of you have your own ideas about how to allocate LOST revenues. I look forward to hearing your ideas and to negotiating an allocation that is in the best interest of all the people and businesses of our city. I will not, however, be willing to allocate more than 50% of the LOST revenues to property tax relief. r} � C C (D pr Prepared by: Karin Franklin, PCD Director, 410 E. Washington St., Iowa City, IA 52240 (319) 356 -5232 RESOLUTION NO. 98 -372 RESOLUTION REQUESTING SUBMISSION OF THE QUESTION OF THE IMPOSITION OF A LOCAL SALES AND SERVICES TAX TO THE QUALIFIED ELECTORS OF THE INCORPORATED AND UNINCORPORATED AREAS OF JOHNSON COUNTY. WHEREAS, Section 42213.1 of the Iowa Code provides for the imposition of certain local option taxes, including a local sales and services tax; and WHEREAS, subsection 4 of said Section 4226.1 of the Code provides that the question of the imposition of a local sales and services tax shall be submitted to the registered voters of the incorporated and unincorporated areas of the county upon receipt by the county commissioner of election of the motion or motions, requesting such submission, adopted by the governing body or bodies of the city or cities within the county representing at least one -half the population of the county; and WHEREAS, the City Council of the City of Iowa City, Iowa, is the governing body of a city whose population constitutes in excess of one -half of the population of Johnson County; and WHEREAS, this City Council believes that there are certain projects, services, and initiatives that are essential to the welfare and quality of life of the citizens of Iowa City; and WHEREAS, the State - imposed rollback of residential property taxes and other State limitations on municipal funding have impeded the City's ability to meet the needs of the community; and WHEREAS, the local option sales and services tax will provide needed revenue to meet local needs; and WHEREAS, this City Council desires that the question of the imposition of a local sales and services tax be submitted to the registered voters of the incorporated and unincorporated areas of Johnson County; and WHEREAS, this City Council has determined that, in the event of the approval of the imposition of a local sales and services tax in Iowa City, the City Council will devote said revenues to the projects, services, and initiatives enumerated on the ballot proposition stated below; and WHEREAS, the cities of Iowa City, Hills, University Heights, Coralville, Tiffin, and North Liberty are "contiguous cities," and therefore, pursuant to Section 42213.1, subsection 6(a) of the Iowa Code, said cities are treated as part of one incorporated area and the local sales and services tax will be imposed in all of said cities if a majority of the combined vote of those voting in said cities vote in favor of its imposition; and Resolution No. 98 -372 Page 2 D U---" WHEREAS, it will therefore be necessary to utilize the "contiguous cities" form of ballot proposition, as promulgated by the Iowa Secretary of State pursuant to the Secretary's rule making power; and WHEREAS, said form of ballot proposition allows each of the six said contiguous cities to designate the percent or amount of local option tax revenues that would be devoted to property tax relief, and the proposed uses that the remainder of said revenues would be used for; and WHEREAS, Johnson County and the other non - contiguous cities in the county are also allowed to similarly designate the percent or amount of local option tax revenues that would be devoted to property tax relief, and the proposed uses that the remainder of said revenues would be used for in their respective jurisdictions. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, that this City Council does hereby request the Johnson County Commissioner of Elections to submit the question of the imposition of a 1% local sales and services tax to the registered voters of the incorporated and unincorporated areas of Johnson County, Iowa, at a special election to be held on March 30, 1999, said tax to be imposed effective July 1, 1999. AND BE IT FURTHER RESOLVED that the ballot proposition state that the proceeds of the local sales and services tax will be used and expended as follows, subject to such variation in the form of the ballot proposition regarding application and use of local sales and services tax revenue as may be instructed by the Johnson County Board of Supervisors or by the governing bodies of the other cities in Johnson County provided such requests are filed with the Commissioner of Elections on or before January 25, 1999. Iowa City Ballot Proposition 0% for property tax relief. 25% for water rate stabilization and /or water rate relief. 40% for renovating and expanding the public library; for constructing a community events center; and for other capital improvements such as streets, bridges, parks, sewers, trails, public buildings, and collaborative projects with other area jurisdictions. 10% to support the operating expenses of the public library and the community events center, and to support community activities and events. 10% to support the operating and capital improvement expenses of public transit and paratransit, to include fare relief and enhanced service. 10% to support the hiring and equipping of police officers, firefighters, and/or other public safety personnel, and for construction of related public safety improvements. 5% to maintain and enhance funding of Johnson County area human service agencies and activities. Resolution No. 98 -372 (C(a 1�5) Page 3 AND BE IT FURTHER RESOLVED: That the City of Iowa City invites Johnson County and the other cities in Johnson County to determine and designate by motion or written resolution the percent or amount of local sales and services tax revenues that each would devote to property tax relief, in the event the tax is imposed in their respective jurisdictions, and the proposed use of the remainder of said revenues, provided such designation is made on or before January 25, 1999, thus affording the County Commissioner of Elections adequate time for publication of notice of the ballot proposition. AND BE IT FURTHER RESOLVED: That the Johnson County Commissioner of Elections is hereby urged to accept such motions or written resolutions, designating the application and use of local option sales and services tax revenues, up to and including January 25, 1999, and to include such individual designations on the ballot proposition form for those jurisdictions. AND BE IT FURTHER RESOLVED: That the City Clerk be and is hereby authorized and directed to notify the Johnson County Board of Supervisors of the adoption of this resolution. Passed and approved this 17th day of November J1998. i - - A roved by ATTEST: L 0,),�— //' a CI LERK City Attorney's Office It was moved by Thornberry and seconded by Vanderhoef the Resolution be adopted, and upon roll call there were: AYES: NAYS: ABSENT: X Champion X Kubby X Lehman X Norton X O'Donnell _ X Thornberry X Vanderhoef WMir/r srsalwU4400 Previously distributed as IP5 in 6/12/14 COPY Information Packet Local Option Sales Tax Exploratory Committee Report on Findings and Recommendations June 10, 2014 The Local Option Sales Tax Exploratory Committee members include: Susan Mims, Tom Markus, Eleanor Dilkes, Marian Karr, Dennis Bockenstedt, Simon Andrew, and Cyndi Ambrose. The Local Option Sales Tax Exploratory committee respectfully'submits the following report for the Iowa City City Council's review and consideration. Introduction As part of the fiscal year 2015 budget process, the City Council and the City's management Identified the City's short term and long term financial risks and determined the City's financial priorities. In addition, the City Council determined the community's service priorities and allocated the City's scarce resources. As part of the fiscal year 2015 budget process, there was also discussion of the financial risks that the City Is facing and potential ways for the City to have a diverse and sustainable financial structure for the future. These risks and priorities were derived from various sources. The major sources for discussion Included the property tax reform legislation that passed the State legislature In May 2013 and the bi- annual update of the City's strategic plan. These two major elements created the backdrop for this assessment of a potential I,bcal option sales tax (LOST) referendum. In May 2013, the State of Iowa passed property tax reform legislation. As a result of that reform legislation, there will be a significant impact on the City's financial ability to provide services to Its citizens. Fiscal year 2015 was the first year the bill began to take effect; however, the true impact will materialize over the next ten years as the bill's provisions are phased in. The estimated Impact to Iowa City Is reduced property tax revenue of $37 million over the next ten years and an additional $14.7 million of revenues to be replaced by State funding. Due to the sizable Impact of this legislation, and the State's history of not meeting Its backfill commitments, it is important that the City seek ways to diversify Its revenue structure, create contingencies in the event of revenue shortfalls, and look for sources of revenues to replace those lost through this legislation. Attached to this report is a copy of a memorandum sent from the City's Finance Director to the City Manager last May following passage of the property tax reform legislation. The City Council also considered this legislation when it met last fall to update the City's strategic plan. The City Council issued the latest update to Its strategic plan during the fiscal year 2015 budget process. The major priorities of the strategic plan were Instrumental in the development of the 2015 budget. The Council's major priorities are fostering a more inclusive and sustainable Iowa City through a commitment to: 1) healthy neighborhoods, 2) a strong urban core, 3) strategic economic development activities, 4) a solid financial foundation, and 5) enhanced communication and marketing. These priorities not only helped develop the current operating budget but also are helping shape the long term vision of the City and the direction the City is going to go over the next decade. Given the City Council's strategic priorities, the City's finance department is looking at various ways to develop a long term sustainable financial structure that will support the City Council's strategic plan. In light of the property tax reform legislation, the City Manager's office and the City's finance department have developed the following strategies: 1) Revenue diversification —to reduce the City's reliance on property tax 2) Contingency /emergency funding —to provide flexibility to react to financial uncertainty 3) Controlled spending and operating efficiency —to reduce overall growth of the City's expenditures that will coincide with the expected slower growth of property tax revenue due to the recently passed legislation The local option sales tax has the potential to help create financial stability and revenue diversification while creating a revenue source to help fund the City Council's strategic priorities. The first determination forthe adoption of a local option sales tax is the feasibility of implementing or renewing this revenue source. Feasibility When looking at the potential feasibility of a local option sales tax, there are many statewide, regional, and local considerations. From a statewide perspective, Iowa City should contemplate the impact that the tax has had on other jurisdictions that have approved a local option sales tax. In addition, although the local option sales tax is considered a 'local' tax, it is in reality a metropolitan tax that impacts the surrounding cities and the county. How these other jurisdictions fit into the sales tax's feasibility is important for the city to understand. Finally, the City should analyze its own experience in using a sales tax and other local factors that will apply to its implementation. Across the state, use of the local option sales tax is not unique anymore. With the passage of the local option sales tax in Cedar Rapids, of the metropolitan areas in Iowa, only the Iowa City and the Des Moines areas do not have a local option sales tax in place. The communities that currently collect a local option sales tax are able to diversify their revenue structures and have been able to reduce their property tax rates and invest in community amenities and infrastructure. Iowa City has lowered its property tax rate in each of the last three years through reduced staffing and restructuring, but it still has the fourth highest property tax rate amongst the ten largest cities in the state. From a comparative stand point, this leaves Iowa City at a disadvantage with the other metro areas in the state. In addition, Iowa City's property tax rate is also significantly higher than its neighboring communities of Coralville and North Liberty. Despite efforts by City management to create operating efficiencies, consolidate operations, and continually review service charges, the only feasible way for the city to make a significant impact in the property tax rate that will compete with these other jurisdictions is to have an alternative revenue stream as a means to offset and lower the city's property tax rate. The local option sales tax versus other potential revenues sources would provide the biggest impact as it provides the largest alternate revenue source. Coralville and North Liberty are also significant considerations for the passage and implementation of a local option sales tax. In order for Iowa City to adopt a local option sales tax, the referendum must be adopted by all jurisdictions that are contiguous. Iowa City, Coralville, North Liberty, University Heights, and Tiffin are all contiguous which means that more than fifty percent (50 %) of the total votes cast in Iowa City and these four communities must be in favor of the sales tax for it to be adopted. This is an important fad to note as the passage of the sales tax is not entirely in the hands of Iowa City residents. In addition, whether the tax passes in the non - contiguous cities and the unincorporated area, also impacts the division and distribution of the sales tax revenues amongst the other communities that are participating. These nuances in how the local option sales taxis adopted and divided create cooperative as well as competitive issues with the neighboring jurisdictions due to differences in taxable sales and population. In the 2014 legislative session, legislation was proposed to alter how the local option sales tax is adopted and split. This legislation did not pass, but it proposed de- coupling the contiguous jurisdictions from each other to pass the sales tax. It also proposed altering the formula for splitting the taxes collected amongst the participating jurisdictions. When this legislation was reviewed, we determined that it was not favorable to Iowa City's interests as many of our residents utilize the commercial areas in the surrounding communities, and it could possibly lessen the cooperation between the jurisdictions in regards to commercial /retail development and passage of a local option sales tax. Due to the potential for this type of legislation to resurface in future years and the issues that surround it, we have determined that it would be more favorable for Iowa City to act on a local option sales tax sooner. Locally, the City has a recent history with a local option sales tax. Pursuant to special disaster relief legislation, a 1% local option sales tax was adopted by a small margin in 2009 by Iowa City residents and was collected from 2010 through 2013 on sales within the Iowa City limits. The local option sales tax was for flood protection projects and was earmarked for the Dubuque Street reconstruction project (Gateway Project) and the expansion of the South Wastewater Treatment Facility. During the four year period, the City collected slightly over $35 million, and the sales tax was allowed to expire on June 30, 2013. Overall, we determined that the passage, the subsequent use, and the expiration of the local option sales tax developed goodwill and trust of the general public in the City as stewards of a local options sales tax. The citizen survey conducted in the summer of 2013 asked the poll respondents about their support for reinstatement of the local option sales tax. 54% of the respondents supported reinstatement of the local option sales tax and 18% were neutral to the idea with only 28% opposed. This would seem to indicate a strong level of support without identification of uses, marketing, or informational activities. For nearly all of the Iowa cities with a local option sales tax, the initial passage of the tax was the most difficult with the subsequent renewals being adopted by much wider margins. In addition, the local option sales tax seems to provide the best overall fit with the City's strategic plan versus the other available revenue options. The City's other options include: 1) The Emergency property tax levy ($0.27 levy available). —This would generate approximately $840,798 annually. Given the City's goal to reduce property tax rates for economic development competitiveness, this revenue option would be inconsistent with that strategic plan priority. 2) The Trust and Agency property tax levy (all employee benefits not levied). —This would generate $1,791,756 or more annually. This is also a property tax levy increase and therefor has the same drawbacks as the Emergency property tax levy. Raising property tax rates is not consistent with the City's strategic plan priorities. 3) The Utility Franchise Fee (1% enacted, 5 %allowed). —A4 %increase in the fee would generate approximately $3,672,916 annually. This user fee is a potential option that can be passed by the City Council without requiring an election of the people; however, a citizen petition could require that it be submitted to the voters. The franchise fee was originally adopted in 2009 at 2% and then subsequently lowered to 1% in 2010 in order to maintain the City's economic development competitiveness. This is anotherviable option for the City. A. The Local Option Sales Tax (1% sales tax available through referendum). This could generate anywhere from $9,000,000 to $12,000,000 annually depending on which cities are participating. Although this requires a referendum to implement, the potential revenue generation is significantly higher than the other options. With all of the various options available to the City and the City's overall strategic plan priorities, the local option sales tax appears to provide the greatest potential revenue generation with the least negative financial impact on city residents. Given the structure of the sales tax, a substantial portion of the revenue would be derived from non -Iowa City residents and visitors from outside of Johnson County. In addition, its passage would put Iowa City on equal footing with the other largest metropolitan areas in the State of Iowa. Use recommendations Much like the other cities in the State of Iowa that have adopted a local option sales tax, Iowa City must determine what the best use of the local option sales tax funds would be. The City's updated strategic plan provides excellent guidance on how any potential funds would be allocated. This plan outlines the City Council's vision and priorities for the City's development and future growth and has been the underlying structure for the development of the annual operating budget. The City Council's strategic plan priorities include fostering a more inclusive and sustainable city through: 4 1) Healthy Neighborhoods 2) A Strong Urban Core 3) Strategic Economic Development Activities 4) A Solid Financial Foundation 5) Enhanced Communication and Marketing In addition to the strategic plan priorities, we used the results from the City's citizen survey to assist in identifying the potential uses of a local option sales tax. During the summer of 2013, the City conducted a survey through the International City /County Managers Association that is used by cities around the country to gauge citizen satisfaction with City services. Through that survey, several areas were identified as below the national benchmark for citizen satisfaction. The first identified service at this level was street repair which was considered excellent by 6% of the respondents and good by 31% of the respondents. These scores were "much below' the national benchmark of other communities. Another area identified as below the national benchmark was the availability of affordable quality housing. The City was only rated by 7% as excellent and 29% as good in this area. These rating levels placed the City "below" the national benchmark for available affordable quality housing. Other areas receiving poor ratings by the City were snow removal, quality of new development, land use /planning and zoning, safety in the downtown, cable television services, and the overall direction of the City. In the majority of the categories of the survey, however, the City was rated above or much above the national benchmarks. Based on the above priorities and feedback, the committee determined the following uses for a local option sales tax: 1) 60 %- property tax relief, 2) 30 %- street improvements, and 3) 10% - affordable housing. The reasoning for each of these categories is as follows: 1) Property tax relief (60 %) — this use is consistent with the City's strategic plan priorities of building a solid financial foundation and strategic economic development activities. This use of the sales tax funds could diversify the City's revenue structure and lower its reliance upon property taxes. This would help mitigate the loss of revenue from the State property tax reform legislation and would strengthen the City's financial position. The annual revenue could be $5.4 to $7.2 million and could potentially lower the City's property tax rate by $1.75 to $2.35 per $1,000 of value. This would place Iowa City's property tax rate lower than Cedar Rapids and more competitive with Coralville's. 2) Street improvements (30 %) —the use of the local option sales tax funds for street improvements would be consistent with the City's strategic plan priorities for a strong urban core and healthy neighborhoods. This is also an area that has suffered deferred maintenance due to the struggling Road Use Tax fund. Although the City has seen an uptick in revenues since the 2010 census, it will not be enough to substantially change the annual overlay program to recover from the years where the program stagnated and could not keep up with inflation. These funds could also be used for the City's ADA curb /ramp replacement program which would benefit elderly and handicapped individuals as well as bicycles and similar forms of transportation. The local option sales tax could generate approximately $2.7 to $3.6 million annually for street maintenance activities and projects. 3) Affordable housing (10 %) —the use of funds for affordable housing would be consistent with the City's inclusive values and would directly correlate with the strategic plan's healthy neighborhoods priority. In addition, this is an area identified by the citizen survey as an area that is substandard. The allocation of funds could be anywhere from $.9 to $1.2 million annually which could be dispersed to housing agencies, used for affordable housing projects, or be used by the Iowa City Housing Authority. Overall, it was felt that this mix would meet the needs of the City Council's strategic plan, the needs of the general public, and address the financial issues facing the City due to the property tax reform legislation. In addition to determining the use of the local option sales tax, there were other miscellaneous issues the committee had to consider. Other Issues One additional consideration for the committee was whether or not the local option sales tax should have a sunset clause. Sunset options considered included a five year clause, a ten year clause, and no clause at all. Of those three options, it was determined that a five year clause would be too short and not give a sufficient time period for the sales tax's impact to be dispersed throughout the community before the sales tax would expire. On the other hand, it was felt that the sales tax should have some future expiration date. It was generally felt that a sunset clause would provide the general public a greater comfort level with supporting the local option sales tax. A sunset clause would also provide the voters a chance to not renew or vote down the sales tax in the future if they felt that it was not being used properly by the City or if they felt it was not a good fit with the City tax structure. Due to these considerations, a 10 -year sunset clause is recommended for the local option sales tax referendum. In addition to the sunset clause, the sales tax referendum timeline was taken into consideration. Other items that were reviewed for a potential local options sales tax referendum included the timeline for City Council and voter consideration. The committee's recommended timeline is to have a local option sales tax ballot ready for voter consideration on the general election on the first Tuesday in November 2014. This date is being recommended for several reasons. The first reason is that this would be less expensive to the City and the other jurisdictions since there is already an election scheduled. The City and other jurisdictions would not have to pay for staffing and holding a special election, which would not create additional taxpayer expense. The second reason is that the general election would maximize voter participation. Special elections tend to have a lower turnout, and it was felt that the general election would have a 0 larger turnout and thus achieve a greater level of participation and achieve a better representation of the voter's wishes. In order for a ballot to be placed on the general election in November, City Council would need to approve a resolution calling for the referendum by August 27, 2014. This report is being prepared and presented in a time frame consistent with this schedule. Conclusion The conclusion of the local option sales tax exploratory committee is as follows: 1) Adoption of a local option sales tax fits within the priorities of the City's strategic plan, the community's service level needs, and the City's financial uncertainties, and the sales tax would have a substantial impact on the City's ability to achieve its initiatives and goals in these areas; 2) The local option sales tax generally has support amongst the residents due to the prior successful passage and use by the City; 3) The local option sales tax provides the greatest potential for an alternative revenue source with the least direct impact on residents due to much of the sales tax being collected from non -city residents; 4) A local option sales tax should be split 60% for property tax reduction, 30% for street improvements, and 10% for affordable housing; 5) The local option sales tax referendum should be held on the November general election. 7 DRAFT — 5/30/14 Prepared by: Eleanor Dilkes, City Attorney, 410 E. Washington St., Iowa City, IA 52240 (319) 356 -5030 RESOLUTION NO. RESOLUTION REQUESTING SUBMISSION OF THE QUESTION OF THE IMPOSITION OF A LOCAL SALES AND SERVICES TAX TO THE QUALIFIED ELECTORS OF THE INCORPORATED AND UNINCORPORATED AREAS OF JOHNSON COUNTY. WHEREAS, Chapter 4236 of the Iowa Code provides for the imposition of certain local option taxes, including a local sales and services tax; and WHEREAS, the Code provides that the question of the imposition of a local sales and services tax shall be submitted to the registered voters of the incorporated and unincorporated areas of the county upon receipt by the county commissioner of elections of the motion or motions, requesting such submission, adopted by the governing body or bodies of the city or cities within the county representing at least one -half the population of the county; and WHEREAS, the City Council of the City of Iowa City, Iowa is the governing body of a city whose population constitutes in excess of one -half of the population of Johnson County; and WHEREAS, it is estimated that the State property tax reform legislation passed in 2013 will result in lost property tax revenue of $37 million over the next 10 years to the City of Iowa City and the potential for an additional $14.7 million in lost revenue if the State fails to honor its backfill commitments; and WHEREAS, in addition to other strategies such as controlled spending and the creation of operating efficiencies, it is essential for the City to diversify its revenues if it is to have funds available to implement the Council's strategic plan to foster a more inclusive and sustainable Iowa City through a commitment to healthy neighborhoods, a strong urban core, strategic economic development activities, a solid financial foundation and enhanced communication and marketing; and, WHEREAS, with the exception of the Iowa City and Des Moines areas, all metropolitan areas in the State of Iowa have a local option sales tax which allows them to diversify their revenue structure, reduce their property tax rates and invest in community priorities; and WHEREAS, while Iowa City has lowered its property tax rate in each of the last three years through reduced staffing and restructuring, it still has the fourth highest property tax rate of the ten largest cities in the State and a rate that is significantly higher than its neighboring communities, putting it at a competitive disadvantage both in the region and the State; and WHEREAS, significant additional reductions in Iowa City's property tax rate will require an alternative revenue stream; and, WHEREAS, adequate funding for the construction and maintenance of public street infrastructure is essential to creating and maintaining a strong urban core and healthy neighborhoods; and, WHEREAS, maintenance of City streets has been deferred due to inadequate revenues in the Road Use Tax Fund; and, WHEREAS, adequate funding of street and trail infrastructure to serve pedestrians, bicycles and elderly and disabled persons is essential to fostering a sustainable and inclusive community; and, WHEREAS, in recognition of the need for additional affordable housing in the Iowa City metropolitan area, and in furtherance of the City's commitment to Healthy Neighborhoods, the City's 2014 -2015 strategic plan includes a new initiative to evaluate programs and methods to promote affordable housing; and, WHEREAS, the Iowa City area is home to a network of entities that are dedicated to increasing the availability of affordable housing and able to effectively and efficiently implement affordable housing projects in the event that additional revenue is made available to them; and, WHEREAS, when compared to other available sources of revenue the local option sales tax provides the greatest amount of revenue with the least financial impact on city residents because a substantial portion of the revenue would come from visitors to the Iowa City metropolitan area; and, WHEREAS, the City Council finds it to be in the best interests of the City for the voters to be asked whether a 1 cent local sales and services tax should be imposed for a period of ten (10) years and used by the City of Iowa City for property tax relief, public street and trail infrastructure and affordable housing as set forth in the ballot proposition stated below. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, as follows: 1. The following ballot proposition language for the proposed imposition of a local sales and services tax is approved: SHALL THE FOLLOWING PUBLIC MEASURE BE ADOPTED? Yes in Summary: To authorize imposition of a local sales and services tax in the cities of Iowa City, and the unincorporated area of Johnson County at the rate of one percent (1 %) to be effective from July 1, 2015 until June 30, 2025. A local sales and services tax shall be imposed in the cities of Iowa City, , at the rate of one percent (1 %) to be effective from July 1, 2015 until June 30, 2025. Revenues from the sales and services tax are to be allocated as follows: FOR THE CITY OF IOWA CITY: 60% for property tax relief. 30% for maintenance, repair, construction and reconstruction of public streets and associated infrastructure. 10% for programs and initiatives that increase affordable housing. 2. The Johnson County Commissioner of Elections is hereby requested and authorized to place said ballot proposition language on the ballot for a special election to be held on the date of the general election on November 4, 2014. 3. The Board of Supervisors is hereby requested to consider the Iowa City City Council's request to direct that the ballot contain a provision for the repeal, without election, of the local sales and service tax on June 30. 2025. 3. The City Clerk is hereby authorized and directed to promptly provide a certified copy of this resolution to the Johnson County Commissioner of Elections and to notify the Johnson County Board of Supervisors of the adoption of this resolution. Passed and approved this day of 2014. ZIEVIO7 Approved by ATTEST: CITY CLERK City Attorney's Office CITY O F IOWA C 1 TY MEMORANDUM Date: May 29, 2013 COPY To: Tom Markus, City Manager From: Dennis Bockenstedt, Director of Finance Re: State Property Tax Reform On May 22, 2013, the State of Iowa legislature passed a property tax reform bill (SF295) that will have a significant impact on the City's ability to finance services in the future. The property tax reform bill has multiple components; the specific provisions of bill SF295 that affect the City's ability to finance services are briefly explained below along with an estimate of the future financial impact to the City's operations. Exhibit 'A' is attached to provide a summary of the financial impact of the provisions of SF295 overthe next ten years. Residential Assessment Limitation Summary: For each assessment year beginning January 2013 and thereafter, SF295 reduces the limit of taxable valuation growth from 4 percent to 3 percent or whichever is lowest of the agricultural and residential classes. The City will not receive any money from the State due to lost revenue from this provision. Financial Impact: The overall financial impact of this change will be significant overtime, however, less noticeable initially. The effect will be that the taxable percentage of residential property will increase at a slower pace. Without the change, the estimated taxable percentage of residential property would be 60.85% in assessment year 2022. With the provision in place, the estimated taxable percentage in year 2022 will be 55.11 %, a reduction of 5.74 %. With approximately $3.4 billion of assessed residential property, the impact on the City in fiscal year 2015 will be $306,121 in lost revenue which will grow to $4,177,423 in fiscal year 2024. The cumulative loss will be $20,772,185 over the next ten years. Commercial & Industrial Rollback Summary: Forvaluations at January 1, 2013, commercial and industrial propertywill be rolled backto 95 percent. For valuations at January 1, 2014, commercial and industrial property will be rolled backto 90 percent. Thereafter, the two classes will be taxed at 90 percent of their assessed value. The bill establishes a standing appropriation for the State to backfill losses to the City due to the commercial and industrial rollback beginning in Fiscal Year 2015 and then caps the amount at Fiscal Year 2017 levels. Financial Impact: The initial year's impact to the City will be negligible due the State's backfill of lost revenue. In 2003, however, the State of Iowa eliminated reimbursements to cities for backfills of personal property tax and industrial machinery and equipment property tax after similar promises. If the State was to do the same, the loss in property tax revenue is estimated to be $1,460,203 in fiscal year 2017. The cumulative reduction in commercial and industrial property taxes due to the percentage rollback is estimated to be $15,417,536 over the next ten years. The maximum reimbursement from the State would be $14,732,059. Multi- residential Property Summary: This provision establishes a multi - residential property classification that includes mobile home parks, manufactured home communities, land- leased communities, assisted living facilities and property primarily intended for human habitation containing three or more separate living quarters. Additionally, for buildings that are not otherwise classified as residential property, that portion of a building that is intended for human habitation can be classified as a multi - residential property, even if May 29, 2013 Page 2 human habitation is not the primary use of the building and regardless of the number of dwelling units. The following rollback percentages will be phased in over eight years, beginning in assessment year 2015 (fiscal year 2017). The projected loss will not be backfilled: • January 1, 2015 — 86.25% • January 1,2016- 82.50% • January 1,2017- 78.75% • January 1,2018- 75.00% • January 1,2019- 71.25% • January 1,2020- 67.50% • January 1, 2021 - 63.75% • January 1, 2022 and thereafter —same as residential property Financial Impact: The loss to the City in fiscal year 2017 is estimated to be $851,745. This will grow until reaching an estimated annual loss of $3,428,308 in fiscal year 2024. The total estimated cumulative loss will be $15,504,902 over the next ten years. None of this loss will be reimbursed by the State of Iowa. Telecommunications Property Taxation Summary: This provision provides partial exemption of property used by companies in the transaction of telegraph and telephone business that is on a graduated percentage scale based upon the value of the property. This is phased in, with half in assessment year 2013 (Fiscal Year 2015) and the remainder being added in assessment year 2014 (Fiscal Year 2016). The projected loss will not be backfilled. 40 percent of the actual value of the property that exceeds $0 but does not exceed $20 million. 35 percent of the actual value of the property that exceeds $20 million but does not exceed $55 million. 25 percent of the actual value of the property that exceeds $55 million but does not exceed $500 million. 20 percent of the actual value of the property that exceeds $500 million. Financial Impact: There are not any good estimates on the financial impact of this provision due to the lack of information of the valuation being affected. In fiscal year 2013, the City's apportioned share of the telecommunication property taxes was $187,463. Due to the lack of a good estimate, this provision was not included in the attached exhibit. Summary The property tax reform bill, SF295, has been passed by the State legislature and will be applied to valuations as of January 1, 2013. The first budget year impacted will be fiscal year 2015. Property tax revenue will be reduced by an estimated $1,321,240 in fiscal year 2015 and by $2,662,737 in fiscal year 2016. The State of Iowa will back fill $1,015,119 in fiscal year 2015 and $2,035,314 in fiscal year 2016, however, the City should consider future contingency plans in the event the State discontinues funding for this backfill. Preparations for the fiscal year 2015 budget process will begin this summer. May 29, 2013 Page 3 Exhibit A (1) 3% annual value growth (2) At current property tax rate Not Subject to State Backfill Subject to State Backfill Multi- Residential 3% Growth Corn/Ind Corn/Ind Corn/Ind Total Property Properties (1) Limit Rollback Total Rollback - Year 1 Rollback - Year 2 Total Tax Reduction FY15 $ - $ 306,121 $ - $ 306,121 $ 1,015,119 $ - $ 1,015,119 $ 1,321,240 FY16 - 627,423 - 627,423 1,017,657 1,017,657 2,035,314 2,662,737 FY17 851,745 982,915 - 1,834,660 730,102 730,102 1,460,203 3,294,863 FY18 1,116,560 1,350,772 3,651 2,470,982 730,102 730,102 1,460,203 3,931,186 FY19 1,396,497 1,757,911 50,443 3,204,852 730,102 730,102 1,460,203 4,665,055 FY20 1,692,226 2,177,375 54,219 3,923,821 730,102 730,102 1,460,203 5,384,024 FY21 2,004,442 2,638,952 109,644 4,753,038 730,102 730,102 1,460,203 6,213,242 FY22 2,333,868 3,115,578 113,569 5,563,014 730,102 730,102 1,460,203 7,023,218 FY23 2,681,255 3,637,715 174,931 6,493,902 730,102 730,102 1,460,203 7,954,105 FY24 3,428,308 4,177,423 179,019 7,784,750 730,102 730,102 1,460,203 9,244,954 Total $ 15,504,902 $20,772,185 $685,477 $36,962,564 $ 7,873,589 $ 6,858,470 $14,732,059 $ 51,694,623 (1) 3% annual value growth (2) At current property tax rate Iowa League of Cities - Local Option Sales Tax Finance Local Option Sales Tax Web Exclusive March 2013 In order for a city to have a local option sales tax (LOST), a majority of Downloads /Links the eligible electors in that city must approve it in a county-wide election to Secretary of State impose the local option sales tax. The local option sales tax is placed on the ballot through a petition of 5 percent of the county electors having Iowa Department of Revenue voted in the last state general election or by a motion (or motions) of governing bodies within the county that represents at least half of the population of the county. The election for a local option sales tax can be held during any regular election or one of the special election dates allowed by state code (go to the Secretary of State's Web site to review those dates). The election cannot be held sooner than 60 days following publication of notice of the ballot proposition in the newspaper. The election is county wide, but the local option sales tax will only apply in those incorporated or unincorporated areas of the county where the majority of the eligible electors approve the tax. The ballot must specify: The type of tax. (in this case Local Option Sales Tax) The tax rate. (not more than 1 percent) The date it will be imposed. The approximate amount of local option tax revenue that will be used for property tax relief, if any. The specific purpose(s) for which local option tax revenues will be spent if for purposes other than property tax relief. A sunset clause for termination of the tax. (optional) Cities are considered contiguous if their borders are adjacent or touching. For the purposes of the local option sales tax, the contiguous cities are considered as one taxing jurisdiction. The local option sales tax can only be imposed if a majority of voters in the total jurisdiction approves the tax. For the imposition, repeal or change of the LOST, within 10 days after a successful referendum, the county auditor must give written notice of the results and abstract of votes to the Director of the Iowa Department of Revenue. This must be done 90 days before the effective date which is on the ballot (plan out this timing with the county auditor before the ballot language is drafted). The LOST is imposed on the same items as state sales and excise tax except on Room rentals, in a hotel, motel or other similar facility. Sales of equipment by the State Department of Transportation. Sales of natural gas or electric energy subject to a city or county imposed franchise fee or users fee. The sale of direct -to -home satellite pay television service. Self- propelled building equipment, pile drivers, motorized scaffolding or attachment customarily drawn or attached to them including auxiliary attachments which improve their performance, safety, operation or efficiency and including replacement parts used by contractors, subcontractors and builders for new construction, reconstruction, alterations expansion or remodeling of real property or structures. Vehicles subject to a 5 percent one -time registration fee. By August 15 of each fiscal year, a written estimate will be sent to each city stating how much money the city will receive for each month of the following year. Ninety-five percent of the money will be distributed to the city by the end of the month following the month in which the money was collected. Any remaining amount due to the city at the end of the fiscal year will be sent to the city before November 10 of the next fiscal year. If an overpayment has been made, htips:llw .iowaleague.mglmemberslPagesI Local% 200ption% 20Sales %20Tax.aspx[5/28/2014128:24 PM] Iowa League of Cities - Local Option Sales Tax a reduced monthly distribution will begin with the November distribution until all overages are reconciled Not all local option sales tax collected in a jurisdiction will be returned to the jurisdiction. The amount distributed is calculated based on a formula that takes into account the percentage of population and the property tax collected in the jurisdiction out of the total for the county. For a more thorough explanation of the formula and any other possible adjustments, visit the Iowa Department of Revenue (IDR) Web site. Distributions of the taxes collected by the IDR are paid to the city in the subsequent month by direct deposit to the city designated account based upon the IDR estimates. To see the history of funds previously distributed, see the IDR Web site listed above. Also on that web site is a listing of all jurisdictions that have LOST and the history of sales generated. To repeal the tax or change the designations for the money to be used, an election may be called and held in the same manner and under the same conditions and restrictions as the election which approved the tax. This information relates to the "regular' local option sales tax and not the "school" local option sales tax which was abolished in 2008 when the state rate for Iowa sales tax increased from 5 percent to 6 percent. The School Local Option Sales Tax (SILO) no longer exists as a separate tax. htipsJhN' Nc v.iowaleague.orglmembersIPagesI Lora t %20OpROn %20Sates %20Tax.aspx[5 /28/2014 128:24 PM] Iowa Department of Revenue - Iowa Taxes Department of IM REVENUE Search... Individuals For information about: Tax Professionals . Elections to adopt or change local option taxes: Contact the Iowa Secretary of State at (515) 281 - Local Government 0145 or 1- 888 - SOS -Vote. . Collecting the tax: Contact the Iowa Department of Revenue at (515) 281 -3114 or 1- 800 - 367 -3388 (Iowa, Omaha, Rock Island, Moline). Q. How is a local option sales tax imposed? A majority of voters at an election must approve the local option sales tax. Q. How does the issue of local option sales tax get on the ballot? There are two ways: • A petition is presented to the county board of supervisors. The number of signatures must be equal to 5 percent of the persons in the county who voted in the preceding state general election. Eligible voters of the county must sign the petition. • A motion or motions of governing bodies within the county that represent at least half of the population of the county. Q. When can a vote on local option tax be held? The special election may only be held on one of the special election dates allowed by law for the jurisdiction. See Special Election Dates Calendar on the Secretary of State's Web site. Local option sales tax elections cannot be held sooner than 84 days after the notice of the election is given to the county auditor by the county board of supervisors, and no sooner than 60 days after the notice of the ballot proposition is published by the auditor. The question of repeal of the tax or of a rate change can also be voted upon at a general or special election as outlined above. Q. Is the election countywide? The election is countywide, but the tax only applies in the incorporated areas (city) and the unincorporated area of the county where a majority vote in favor of the local option tax. Q. What happens when cities are contiguous to each other? All cities contiguous to each other are treated as one large incorporated area, even if located in different counties, subject to a joint county agreement. The tax can only be imposed if the majority of those voting in the total contiguous area approve the tax. Q. When are two geographical areas contiguous? They are contiguous when their boundaries are in actual contact or touching. Burd v. Board of Education of Audubon County, 167 N.W. 2nd 174 (IA 1969), City of Walker, et al v. Oxley, et al. Q. If there is a question whether two geographic areas are contiguous, who will resolve the issue? The issue must be resolved by the county board of supervisors. Q. What must the ballot proposition specify? The ballot must specify: http: //w .iowa.gov/ tax /educate /78601.html[5/28/2014 1:25:52 PM] Iowa Department of Revenue - Iowa Taxes • the type of tax • the tax rate (not more than 1 percent) • the date it will be imposed • the approximate amount of local option tax revenue that will be used for property tax relief, if any • the specific purpose(s) for which local option tax revenues will be spent if for purposes other than property tax relief • a sunset clause for termination of the tax (optional) Questions about elections and ballot language should be addressed to the Secretary of State at (515) 281- 0145 or 1- 888 - SOS -Vote. A ballot language sample is available from the Iowa Secretary of State. Q. Who needs to be notified of election results? Imposition, repeal, or change: Within 10 days after the election, the county auditor must give written notice of the results and send an abstract of votes to the Director of the Iowa Department of Revenue. This must be 90 days before the effective date. Q. If local option is approved by the voters, but a county does not pass the local ordinance as required by law, what happens? The tax will still be imposed. Passing the ordinance is mandatory. The Linn County District Court in City of Walker, et al vs. Oxley, et al, EQ 93 1 0, June 4, 1986. Q. How long does a local option sales tax remain in effect once it is imposed? If a sunset clause is part of the ordinance, the tax remains in effect until that date. If no sunset clause, it stays in effect for an unlimited period. It may also be repealed by election. Q. For what can the revenue from this tax be used? Local option tax revenues can be expended for any lawful purpose, but they may not be used for the benefit of a school district. Q. Can a local option sales tax be repealed? Yes. To repeal the tax, an election may be called and held in the same manner and under the same conditions as the election which approved the tax. However, only qualified voters of the areas of the county where the tax has been imposed can vote. The tax cannot be repealed before it has been in effect for one year. The county board of supervisors can, upon its own motion, repeal the local option tax in any unincorporated area of the county where the tax is imposed. For any municipality, the county board of supervisors must, upon receipt of a motion of the governing body of the municipality, repeal the local option tax within that municipality. The tax can be repealed within a municipality which is contiguous to other municipalities. Q. Can the rate of tax be increased or decreased or a change be made to the designated use of the local option tax revenue? Yes. The criteria for placing the proposition on the ballot are the same as previously explained. However, only qualified voters of the area of the county where the tax has been imposed can vote. The rate cannot exceed 1 percent. As of July 1, 2008, a change in the use of local option tax revenues for the purpose of funding an urban renewal project no longer requires an election but can now be done by ordinance of the city council of an eligible municipality. Q. What are the dates that the tax can be imposed, changed, or repealed? This tax can be imposed on either January 1 or July 1 only. Repeals can only occur on June 30 or December 31. Any jurisdiction with a repeal date specified in the ballot prior to April 1, 1999, may repeal on the date specified. Imposition or change in rate or use can occur no sooner than 90 days following the election. The local option tax cannot be repealed or reduced in rate if bond obligations are outstanding unless sufficient funds to pay the principal, interest, and premium, if any, on the outstanding obligation at and prior to maturity have been properly set aside and pledged for that purpose. Q. What if a tax has been imposed in a portion of a county and now another incorporated or unincorporated area of the county wants to vote on the tax? http: //w .iowa.gov/ tax /educate /78601.html[5/28/2014 1:25:52 PM] Iowa Department of Revenue - Iowa Taxes The criteria for placing the proposition on the ballot are the same as previously explained. However, only qualified voters of the area of the county where the tax has not been imposed can vote. Revenue Estimates Q. How can a locality estimate what amount of local option sales tax it might receive? The Department of Revenue is able to provide an estimate based on general state sales tax data. This estimate would represent the potential collections that would be generated in a county by the retailers collecting local option sales tax for that county. By August 15 of each fiscal year, a written notice of the monthly estimated local option payments for the fiscal year will be sent to localities. Since the local option sales tax and the state sales tax are imposed differently based on each transaction, the data is adjusted. For example, the local option sales tax is imposed on goods delivered into a locality. State sales tax statistics are kept on the basis of sales made by merchants within a locality. Local option sales tax is not imposed on room rental or on the sale of natural gas or electric energy in a city where these receipts are subject to a users fee or a franchise fee, to mention just a few differences. Q. If a locality has made its own estimates, will the Department of Revenue review them? Yes. Often, local officials are better economic predictors, because they are familiar with the occupation, purchasing, and spending patterns in a locality. The Department will review the logic and the variables considered in compiling the estimate. Q. Can a locality obtain information about sales tax payments made by specific retail establishments? Yes. The Department may enter into a written information exchange agreement for tax administration purposes with a county entitled to receive local option sales tax funds. The agreement allows no more than two paid county employees to have access to actual return information. This information cannot be shared with anyone else due to confidentiality requirements. Note: There are severe penalties in place for any illegal disclosure of this information to any unauthorized individuals. [IA Code "Information Confidential penalty" 422.20,72, IRS Code 6103(b)] Distribution of Funds Q. How soon after a local option sales tax is imposed will a locality get its money? By August 15 of each fiscal year, a written notice of the monthly estimated local option payments for the fiscal year will be sent to localities. Ninety -five percent of estimated tax receipts are paid monthly. For example, localities' estimated monthly tax distributions will be issued for July by August 31. A final payment of any remaining tax due to a locality for the fiscal year will be made before November 10 of the next fiscal year. If an overpayment to a locality exists for the fiscal year, a reduction of monthly distributions to reflect the overpayment will begin with the November payment. Q. Will a jurisdiction receive the actual amount of tax collected by merchants in the locality? No. The local option tax collected within a county is placed in a special distribution fund. The fund is distributed on the basis of population and property tax levies. Q. How does the distribution formula work? Each county's account is distributed on the basis of population (75 percent) and property tax levies (25 percent). The population factor is based on the most recent certified federal census. The property tax factor is the sum of property tax dollars levied by boards of supervisors or city councils for the three years from July 1, 1982 , through June 30, 1985 . The property tax data is compiled from city and county tax reports available in the State Department of Management. Only population and property tax levies of the jurisdiction imposing the tax are used in figuring percentages. The actual distribution is computed as follows: http: //w .iowa.gov/ tax /educate /78601.htm1[5/28/2014 1:25:52 PM] Iowa Department of Revenue - Iowa Taxes D= (.75xPxZ) +(25xVxZ) D = distribution for the taxing jurisdiction P = jurisdiction percentage of the population V = jurisdiction percentage of the property tax levied Z = the total collections for the county in which the jurisdiction is located. Examples of an actual distribution are in 701 Iowa Administrative Code § 107.10. Q. Who will receive the distribution check? Checks will be made out to each city and each unincorporated area (county) that imposed the tax. Q. Is it possible for a jurisdiction without the tax to receive a distribution of local option tax money? No. Only the jurisdictions in which the tax is imposed can participate in the distribution. Q. Are any adjustments made to the monthly remittance of local option tax prior to distribution? Adjustments are possible. For example, local option taxes can be refunded to governmental units if imposed on materials associated with construction projects. Erroneous collections can occur which are also subject to refund. Amended sales tax returns will also be filed. Refunds will most likely be identified after distributions for a given tax period have been made, therefore, account adjustments will be necessary. When a local option tax is repealed, the local option tax monies, penalties, or interest received or refunded within 180 days after the repeal date are distributed, more than 180 days after repeal, funds are deposited into or withdrawn from the state general fund. Q. What happens to local option taxes which are collected, but it cannot be determined which county is the origin of the money? The funds will be allocated to active counties based on special rules filed by the Department. The rules specify distribution be made based on individual county population to total active county population. Notification Q. Once local option sales tax is imposed, how are businesses informed? The Department regularly a -mails newsletters and notices to anyone who has signed up on the Department's Web site to receive free information by e-mail. A current jurisdiction list is also maintained on the Department's Web site. Related Costs Q. Who pays for reprogramming computers and cash registers for businesses in a jurisdiction imposing a local option tax? Businesses are responsible for all programming changes and costs. Noncompliance Q. What happens if a business fails to collect or refuses to collect local option tax? Anyone aware of a problem may contact our Taxpayer Service Section by e-mail or by calling 1- 800 -367- 3388. In most cases, the problems are the result of misunderstandings and not intentional noncompliance Whenever the Department audits for state sales tax, it will also audit for local option taxes. The penalties associated with the nonpayment of local option sales tax are the same as those for state sales tax. Applying the Local Option Sales Tax Q. Is the local option sales tax imposed on the same items as state sales /excise tax? Yes, except on: • room rentals, in a hotel, motel, or other similar facility • sales of equipment by the State Department of Transportation • sales of natural gas or electric energy subject to a city- or county- imposed franchise fee or users fee • the sale of direct -to -home satellite pay television service • self - propelled building equipment, pile drivers, motorized scaffolding, or attachments customarily drawn or attached to them, including auxiliary attachments which improve their performance, safety, operation, or efficiency and including replacement parts used by contractors, subcontractors and http: //w .iowa.gov/ tax /educate /78601.ht"[5/28/2014 1:25:52 PM] Iowa Department of Revenue - Iowa Taxes builders for new construction, reconstruction, alterations, expansion or remodeling of real property or structures Q. Are local option sales taxes imposed on cars and trucks? No. Vehicles subject to registration are subject to a 5 percent one -time registration fee rather than a state sales tax. However, the receipts from the rental of cars and trucks can be subject to local option tax. Also, sales of parts and repair services are subject to tax. Q. Can a county with a local option sales tax impose the tax on items and services not subject to state sales tax? No. A local option sales tax cannot be imposed on any property or service not subject to state sales tax, with the exception of residential energy on which the state tax has been phased out, but on which local option tax still applies. Q. When local option sales tax is figured, is it imposed -on top" of the state sales tax? No. It is imposed in addition to, but not on top of, the state sales tax. A taxable sale will be subject to the state sales tax and the local option tax. However, the amount of the sale for purposes of determining the amount of local option sales tax does not include any amount of state sales tax or other local option taxes R a jurisdiction imposes more than one local option tax. Q. Do retailers have to obtain a special sales tax permit in order to collect local option sales taxes? No tax permit other than the state sales tax permit is required or available. Local option tax is remitted to the State of Iowa along with the state sales tax, retailers make no payment directly to a locality. Q. How and when is local option sales tax remitted to the Department? Local option taxes are remitted whenever state sales tax is remitted. Retailers show a breakdown of local option taxable sales and tax by county on quarterly and annual returns. Paper deposits and returns are not mailed, filing is through eFile & Pa v. (Note that the amount of local option tax collected is not used to determine how frequently a retailer should file.) Q. When does the tax apply to a sale? As with the state sales tax, the local option sales tax is remitted for the tax period in which the tangible personal property is delivered to the customer. Even if the customer has not paid for the merchandise, the tax is due when delivery occurred. For taxable services, the retailer remits the local option tax for the tax period in which the first use of the service occurs, or potentially could occur. Q. What does delivery have to do with the taxability of a sale? Where tangible personal property is delivered determines whether or not a sale is taxable. If delivery occurs within a local option jurisdiction, the local option sales tax may be due. If delivery does not occur in a local option jurisdiction, local option tax is not due. Delivery usually occurs when the sellertransfers physical possession of the property to the buyer. In most instances, this transfer takes place at the seller's place of business. If the seller transfers the property to the buyer from the seller's own vehicle, then delivery is considered to take place at the place of transfer. Finally, R the seller transfers the property to a common carrier or the U.S. Postal Service for subsequent transport to the buyer, the "delivery" of the property occurs at the customer's location. Q. How is the delivery or sale of tangible personal property affected by the use of FOB or a similar term when it is moved by a common carrier? It does not affect the sourcing of a transaction, but an FOB designation will determine whether it is a sales tax or a use tax, and whether local option applies. Q. If residents in a local option tax jurisdiction shop in a city that does not have a local option sales tax, does that mean that they avoid paying the local option tax? Maybe. If a resident of a taxing jurisdiction takes physical possession of the Rem in a non - taxing jurisdiction, no local option tax can be imposed. However, if the Iowa seller delivers R by the seller's vehicle or through a common carrier to the purchaser who lives in a local option tax jurisdiction, then the seller must collect the local option tax applicable in the buyer's location. http: //w .iowa.gov/ tax /educate /78601.htm1[5/28/2014 1:25:52 PM] Iowa Department of Revenue - Iowa Taxes Q. If Iowa sellers send items through the mail or by common carrier to the purchaser and the sellers do not have "nexus" in the purchaser's location, must they charge the local option tax? Yes. The seller will charge the local option tax applicable where the customer receives the item. Q. What happens if the seller is located in a taxing jurisdiction and delivery of an item is made into a jurisdiction where no local option tax has been imposed? Local option tax cannot be charged on a transaction where delivery occurs in a non - taxing jurisdiction. Q. What happens when an item is purchased outside Iowa? Would local option sales tax be due? • If the item is brought into Iowa by the purchaser: No. These transactions are subject to the state consumer's use tax. Local option sales tax can only be imposed when state sales tax is applicable. Iowa does not impose a local option use tax. • If the item is brought into Iowa by the seller in the seller's own vehicle: Yes, if delivery occurs in a local option jurisdiction. • If the item is sent into Iowa by a common carrier with an FOB Shipping Point designation or without an FOB designation, orthrough the U.S. Postal Service: If the out -of -state retailer is registered to collect Iowa tax, the state rate is charged. If the retailer is not registered, the customer owes consumer's use tax. No local option tax is due in either case. • If the item is sent into Iowa by a common carrier with an FOB Destination designation: If the out -of -state retailer is registered to collect Iowa tax, the state rate is charged as well as any local option tax imposed by the destination jurisdiction. Q. What about vending machines? The location of each individual vending machine determines whether or not the local option sales tax applies. If it is in a local option jurisdiction, the tax applies. Q. What happens when a business uses its own inventory? If a retailer located in a taxing jurisdiction purchases items for resale or processing and later withdraws them from inventory for other purposes, the local option tax is imposed. It does not matter where or when the items were first purchased. Owners, contractors, subcontractors, or builders purchasing building materials, supplies, and equipment for use in a construction project must pay local option sales tax on these items if they take delivery in a taxing jurisdiction. Contractors, subcontractors, or builders who are also retailers located in a taxing jurisdiction must pay local option tax when they withdraw building materials, supplies and equipment from their resale inventory for construction projects in Iowa, even if the construction project is outside the taxing jurisdiction. Manufacturers of building materials located in a taxing jurisdiction who are principally engaged in manufacturing and selling building materials and who withdraw them from inventory for use in a construction contract must pay local option tax tithe construction contract is within Iowa. The tax is computed on fabricated cost. They must pay local option tax when they withdraw building materials, supplies and equipment from inventory for construction purposes even tithe construction project is outside the taxing jurisdiction. Q. What if a construction contract is entered into prior to the imposition of local option tax? It makes no difference when the contract is signed or where it is signed. "Delivery' is the taxing event. If tangible personal property subject to state sales tax is delivered into a jurisdiction after the date local option sales tax has been imposed, local option sales tax is due. If a taxable service is rendered, furnished, or performed after the date local option sales tax has been imposed, local option sales tax is due. If a local option tax is imposed or increased after a construction contractor enters into a written contract, the contractor may apply for a refund of additional local option sales tax paid as a result of the imposition or increase if all the following circumstances exist: http: //w .iowa.gov/ tax /educate /78601.ht"[5/28/2014 1:25:52 PM] Iowa Department of Revenue - Iowa Taxes 1. The additional tax was paid on tangible personal property incorporated into an improvement to real estate in fulfillment of a written construction contract entered into prior to the date local option sales tax is imposed or its rate increased, and 2. The contractor has paid the full amount of both state and local option sales tax due to the Department or to a retailer, and 3. The claim is filed with the Department within one year of the date the tax was paid. The IA843 (pdf) Claim for Refund is used for this purpose. This local option tax right of refund is not applicable to equipment transferred under a mixed construction contract. Q. What about motor fuel and special fuel? Motor fuel and special fuel are subject to local option tax when sales tax applies if delivery occurs in a taxing jurisdiction. Fuel subject to motor fuel tax is not subject to sales tax at the time of purchase. Services Q. How is local option sales tax imposed on services? Local option sales tax is imposed on any service subject to state sales tax when the first use of the service occurs, or potentially could occur, within a taxing jurisdiction. Q. Does it matter when a contract for services is signed? No. Sometimes services are contracted before the local option sales tax becomes effective. The tax still applies when the first use of the service occurs or potentially could occur. Q. Does it make any difference if the service contract is signed outside the taxing jurisdiction? No. Local option tax is due on all taxable services when the first use of the service occurs, or potentially could occur, in the taxing jurisdiction regardless of where the contract was entered into. Q. What if there is a single contract and services are performed both within and outside a taxing jurisdiction? The local option tax is imposed tithe the first use of the service occurs, or potentially could occur, in the taxing jurisdiction.. Lease and Rental Q. How is local option sales tax computed on rented or leased property? The general rule is that payments associated with periods when the property is used within a taxing jurisdiction are subject to local option tax. Motor vehicle, recreational vehicle and recreational boat rentals where state sales tax is imposed are subject to local option sales tax only if pursuant to the rental contract, possession of the vehicle or boat is transferred to the customer within the taxing jurisdiction and payment is made within the same taxing jurisdiction. Utilities Q. How are utility payments taxed? Delivery of gas and water occurs and the services of electricity, heat, communication, and pay television are rendered, furnished, or performed at the address of the subscriber who is billed for the purchase of this property or services. If that billing address is located in a local option taxing jurisdiction, the tax will apply. Q. What about telephone credit card calls made outside a taxing jurisdiction and billed to an address within a taxing jurisdiction? Assuming that it is an intrastate call (within Iowa) local option tax applies if the call is billed to an address within a taxing jurisdiction. Q. What date controls whether local option tax applies? Local option taxes, and state sales tax, on utility payments are imposed based on the "billing date." Q. Do pay television franchise fees imposed by a local jurisdiction exempt cable television charges from local option taxes? No. Only franchise fees and users fees for natural gas and electric energy trigger the exemption. Updated 02104/10 http: //w .iowa.gov/ tax /educate /78601.htm1[5/28/2014 1:25:52 PM] Revenue Comparisons Property Tax Rate Comparison (Levy Rate per $1,000 Valuation) City FY14 Tax Rate Rank FY14 /FY13 % Change Council Bluffs $17.75 1 -0.56% Waterloo $17.49 2 -3.95% Des Moines $16.92 3 0.00% Iowa City $16.81 4 - 2.66% Davenport $16.78 5 0.00% Sioux City $16.25 6 1.63% Cedar Rapids $15.22 7 0.00% Coralville $13.53 8 0.00% West Des Moines $12.05 9 0.00% North Liberty $11.03 10 0.00% Dubuque $11.02 11 2.23% Ames $10.86 12 1.31% FY2014 Estimated General Fund Revenue FY2014 Adopted Budget City Revenues Transfers In Debt Proceeds/ Asset Sales Total Revenues Per Capita Revenue* Per Cap. Rank Council Bluffs $60,359,635 $11,000,000 $0 $71,359,635 $1,146.71 1 Dubuque $51,524,631 $12,216,658 $52,750 $63,794,039 $1,106.82 2 West Des Moines $45,059,223 $11,976,112 $6,000 $57,041,335 $1,007.64 3 Coralville $14,724,609 $3,431,171 $7,500 $18,163,280 $960.66 4 Cedar Rapids $83,322,843 $31,851,323 $120,000 $115,294,166 $912.67 5 Iowa City $43,733,068 $9,610,582 $4,081,450 $57,425,100 $846.20 6 Sioux City $41,092,112 $19,835,312 $59,232 $60,986,656 $737.59 7 Des Moines $116,770,284 $32,666,194 $19,000 $149,455,478 $734.67 8 Waterloo $42,746,668 $7,388,704 $88,000 $50,223,372 $734.20 9 Davenport $50,348,501 $20,424,567 $10,000 $70,783,068 $710.07 10 North Liberty $7,247,029 $2,053,495 $50,000 $9,350,524 $699.16 11 Ames $23,324,640 $8,487,818 $0 $31,812,458 $539.51 12 *Per Capita calculations used 2010 US Census data Hotel /Motel Tax Revenues FY2013 Receipts City" Effective Date Receipts Des Moines 4/1/1979 $4,758,396 West Des Moines 4/1/1979 $3,287,208 Cedar Rapids 4/1/1979 $2,862,393 Council Bluffs 4/1/1979 $2,539,232 Coralville 7/1/1983 $2,424,856 Davenport 4/1/1981 $2,170,593 Dubuque 4/1/1979 $1,953,763 Ames 4/1/1988 $1,784,274 Sioux City 4/1/1979 $1,424,670 Waterloo 4/1/1981 $1,227,556 Iowa City 4/1/1983 $871,706 North Liberty 7/1/2008 $65,149 *All cities listed impose the state allowed maximum rate of 7% Source: Iowa Department of Revenue Utility Franchise Tax Rates City Franchise Fee Rate North Liberty 0% Davenport 0% West Des Moines 0% Ames 0% Coralville 1% Iowa City 1% Sioux City 2% Cedar Rapids 2% Council Bluffs 2% Waterloo 2% Dubuque 3% Des Moines 5% Local Option Sales Tax (LOST) Revenues FY2013 Receipts *The chart only includes those communities with a LOST. Iowa City's LOST expired in FY 2013 Source: Iowa Department of Revenue Utility Rates (Residential Monthly Billing) City Water Effective Sunset Storm Total City" Rate Date Date Receipts Purpose $92.78 1 Davenport $34.94 $36.16 90% Flood Recovery, 10% Property Cedar Rapids 1% 4/1/2009 6/30/2014 $17.76 M $36.08(3) $15.50(4) $3.50(5) $83.79 3 West Des Moines Tax Relief $34.80 $11.25 $4.25 $80.60 4 60% Property Tax Relief, 40% Capital Davenport 1% 1/1/1989 N/A $15.43 M 5 Des Moines $23.15 $33.50 $13.00 $9.74 Improvements and Equipment 6 Dubuque $22.99 $31.91 $12.74 60% Property Tax Relief, 20% Sioux City 1% 1/1/1987 N/A $12.05 M Infrastructure Projects, 10% City $4.78 $71.73 8 Council Bluffs $32.56 Facilities, 10% EDX Waterloo 1% 4/1/1991 12/31/2015 $9.94 M 100% Street Repair Iowa City - 7/1/2009 6/30/2013 $9.08 M 100% Flood Related Council Bluffs 1% 4/1/1990 N/A $8.47 M Streets and Sewers Waterloo $16.06 $24.38 $15.50 $2.75 50% Property Tax Relief, 20% City Dubuque 1% 1/1/1989 N/A $8.31 M Facilities Maintenance, 30% Special Assessment Relief 60% Property Tax Relief, 40% Ames 1% 1/1/1987 N/A $6.72 M Community Betterment *The chart only includes those communities with a LOST. Iowa City's LOST expired in FY 2013 Source: Iowa Department of Revenue Utility Rates (Residential Monthly Billing) City Water Sewer Waste Storm Total Rank North Liberty $37.66 $43.77 $9.35 $2.00 $92.78 1 Davenport $34.94 $36.16 $13.90 $2.35 $87.35 2 Iowa City* $28.71(7) $36.08(3) $15.50(4) $3.50(5) $83.79 3 West Des Moines $30.30 $34.80 $11.25 $4.25 $80.60 4 Sioux City $29.32 $34.54 $14.90 $0.83 $79.59 5 Des Moines $23.15 $33.50 $13.00 $9.74 $79.39 6 Dubuque $22.99 $31.91 $12.74 $5.60 $73.24 7 Cedar Rapids $26.95 $21.49 $18.51 $4.78 $71.73 8 Council Bluffs $32.56 $17.21 $16.00 $0.00 $65.77 9 Ames $31.26 $28.72 $0.00 $3.45 $63.43 10 Coralville $17.80 $22.62 $19.00 $2.00 $61.42 11 Waterloo $16.06 $24.38 $15.50 $2.75 $58.69 12 *Projected FY 2015 Water Rate is $30.14 and Refuse Rate is $15.90 You're going to know about Cedar Rapids' Paving for Progress City to start on fixing some streets By Rick Smith, The Gazette Published: June 12014 12:01 am in Government, LinnCo, NJ 000200 <style TYPE = "text /css "5 #tabs -2 { display: block! important }ff art _photo_1 {display: block! important} < /style> Photos The intersection of 8th Ave and 17th St SW is marked in preparation for repaving in Cedar Rapids on Thursday, May 29, 2014. 17th St SW is one of the roads that will be repaved with LOST funds, with work set to begin this week. (Adam Wesley/The Gazette -KCRG) ❑ 4 Cedar Rapids taxpayers don't pass the local- option sales tax (LOST) gladly. After all, less than nine months after the city's historic 2008 flood disaster, only 59 percent of local voters agreed to the 1 percent sales tax for 63 months to fill gaps left by hundreds of millions of dollars of federal and state flood- recovery help. In May 2011 and again in March 2012, voters rejected plans to extend the tax for 20 years and then 10 years for flood protection and street repairs — and then just for flood protection. "I still think people want to protect both sides of the river," City Council member Monica Vernon said after the 2012 defeat for flood protection funds. "Perhaps the message is they don't want to pay for it. ... But cities are forever. You never give up on Cedar Rapids. You never give up on each other." By November 2013, 62 percent of voters finally agreed that the condition of city streets had become sufficiently jaw - rattling that it made sense to approve the local sales tax for 10 years to fix streets. City officials now are vowing to make sure that residents know when and how the revenue from the tax renewal — estimated at $180 million over 10 years in today's dollars — is spent. They've given the program a name — Paving for Progress — worthy of government initiatives with tall ambition and big promises. And city crews also have created 50 large, eye- catching signs, which will promote streets repaired, resurfaced or rebuilt with LOST money in the Paving for Progress program. Emily Muhlbach, communications coordinator for the city's Development Services Department who has spearheaded the effort to design the signs, said the city doesn't want residents to wonder if and when the street transformation is going to happen and where. "We want then to see action right away, and we want to make it as easy as possible for people to see what is going on, to see the progress," Muhlbach said. "We want to be as transparent and as visible as possible so people can feel really good about how they have invested with their vote." Rob Davis, the city's engineering operations manager, said city engineers typically are lousy self - promoters when it comes to infrastructure projects. However, Davis said he is reminded every time he takes his children swimming in Cedar Rapids pools how local taxpayers put the LOST in place for one year in July 2001 to build and fix pools. "I still remember what we got for that $16 million to $18 million all these years later," Davis said. "You now know what you can get with that 1 cent tax. You can get a heck of a lot. "We would not have a Cherry Hill Pool and a Noelridge Pool without that. Those are fantastic. And I'm hoping we can say the same thing 10 years later about the streets." 'Once and for all' Late last week, George Heeren didn't realize that his quiet tree -lined street off First Avenue SW next to Cleveland Park suddenly had become the poster child for the city's new Paving for Progress program. Over the years, Heeren said city crews have patched and fussed a little with 17th Street SW, and then they did it again and again. "It's nice for them to come through and fix it once and for all," said Heeren, president of the Cleveland Neighborhood Association. This week, a city street crew will be on Heeren's street to put down an asphalt overlay — the first of many to come on city residential streets during the 10 -year life of the city's fix - the - streets sales tax. Davis estimated that 500 city streets will see work in one form or another with LOST money. The city is launching the Paving for Progress program on 17th Street SW between First and 10th avenues SW — about three city blocks long — because, Davis said, 17th Street SW is exactly the type of residential street of subpar quality that long has missed out on good care and long would have — but for voter approval of the LOST funds. By itself, this isn't that exciting a project," Davis said. "What is exciting is that we're doing it at all." The overall city strategy, he said, is to replace the worst streets, which is the highest -cost option, and at the same time to resurface or otherwise improve needy streets so that they don't get to the status of the city's worst streets. Davis said there is something like a continuum of care for streets in need of help. The life on some can be extended by sealing cracks or replacing joints or panels in the street. Some will get asphalt overlays, but some need a total street replacement. "This is a tricky thing where some streets are so bad we have to work on the worst," he said. "But you want to work on streets that are in fair condition as well." The city's 10 -year tax for streets doesn't begin to be collected until July 1, and the first revenue from it won't be here until September. The city, though, can't lose most of a street construction season waiting, so it is using street funds on hand to begin Paving for Progress work now with the idea that revenue from LOST will replace short-term funds used now. Davis said the city expects to do 30 projects and $8 million of Paving for Progress work this construction season, with city crews doing some projects and larger projects ones sent out for bids and handled by local contractors. At the same time, the city will be working on an expanded curb - and - gutter repair program throughout the city and will be doing other street maintenance work in some instances in preparation for asphalt overlays in 2015. The city also has hired a consultant to determine the construction priority in upcoming years. Other large street projects will be underway as well that are not funded by Paving For Progress dollars, but are paid for largely with federal grants, property assessments and /or property -tax revenue within special tax increment financing districts. Mike Duffy, the city's streets superintendent, said the Public Works Department worked overthe winter and during the early spring to identify "quick- start" projects so it could get as much done as possible this construction season. Street crews, for instance, already are busy replacing concrete panels on Northbrook Drive NE off Council Street NE as the city asphalt program gets ready to go. "We're excited to be making lasting improvements instead of temporary ones," Duffy said. Davis said 17th Street SW rose to the top of residential asphalt projects, in part, because many street candidates were set aside for this year because they need in- street utility work first or at the time of the street work. Initially, Davis said Duffy had identified six miles of residential streets as first ones to target this year. However, only one of the six miles is ready for work this year, he said. One case in point, 42nd Street NE between Interstate 380 and Wenig Road NE, fell off this year's resurfacing list when the city discovered its subsurface had crumbled. The street needs replaced, not resurfaced, Davis said. He said the city expects to use its existing street crew members this summer as Paving for Progress takes off. In the end, city workers will need to do less street maintenance as more permanent street improvements take hold. Davis pointed to the street project on 76th Avenue SW near The Eastern Iowa Airport, which is being paid for with funds other than LOST money. Every other year, city crews spent considerable time on 76th Avenue SW put a new layer of seal coating on it. With the new street, they can use that time and effort on Paving for Progress projects, he said. On Thursday, city workers were marking up spots on 17th Street SW in preparation for the asphalt paving work to come in upcoming days. "Really," said Sheryl Ochs, who has lived on the street for years, "I don't see a lot of potholes." The street isn't the worst, she said, but it could use the help if the city is fixing more than just the worst, she said. A new layer of asphalt will make the neighborhood look better than ever, which can't hurt property values, Ochs said. Mayor Corbett picked himself off the carpet after he had made himself the pitchman to renew the city's local- option sales tax in May 2011 to fix streets and help with flood protection. By last fall, Corbett put on his running shoes, and ran 130 miles of city streets as he ran for mayor to get close -up look at bad streets. He ran the 17th Street SW neighborhood along the way. "Over the years, the condition of the streets has been one of the top issues that citizens have really complained about," the mayor said last week. "They've complained to every mayor and every City Council member. Finally, we have the resources in place to make a significant difference." Corbett said he had hoped that the Iowa Legislature and the governor would have steered more state gas -tax money to Iowa's cities, but they did not. "We just couldn't wait for them," the mayor said. This time, the sales -tax push worked. "The people of Cedar Rapids supported this overwhelmingly," he said. `They know that our city has challenges, our state and country have challenges. I think they appreciate elected officials being straightforward with them: Here's the problem and here's the solution." * * ** Projected 2014 Paving for Progress projects Asterisked projects will be done by the city; others will be put up for bid NW Quadrant Ellis Blvd. from K Avenue to O Avenue B Avenue NW Improvements from Highland Drive to Eighth Street 13th Street NW from A Avenue to B Avenue * E Avenue from Stoney Point Road to Rock Valley Ellis Lane NW, Ellis Blvd to Eighth Street NW SW Quadrant Third Avenue SW Improvements from Sixth Street to 10th Street Eighth Avenue SW Improvements from 10th Street to Seventh Street Diagonal Drive SW Improvements from Interstate 380 to West Eighth Avenue Bridge Approach Edgewood Road SW from Williams Boulevard to 16th Avenue Wiley Blvd SW from Williams Boulevard to 16th Avenue 17th Street SW from First Avenue to 10th Avenue * West Post Road SW from Ruhd Street to 16th Avenue* Wilson Avenue SW from West Post Road to Troy Street * Hawkeye Downs Road from Sixth Street to J Street * NE Quadrant Boyson Road NE Improvements from C Avenue to East Corporate Limits Coe Road NE Improvements from Center Point Road to A Avenue Glass Road NE Improvements from Edgewood Road to Wenig Road Kiowa Trace NE, 6821 to 7015 Residences * Oakland Rd NE from E Ave to H Ave Seminole Valley Rd NE from Fords Crossing Road to 42nd St Blairs Ferry Rd NE from W. of Miller Ave to W to Wayside Circle Dr 74th Street from White Ivy Place to C Ave 42nd Street from 1 -380 to Wenig Rd Northbrook Drive NE from Boxwood Lane to Laurel Lane NE * SE Quadrant Fourth Avenue Improvements from Sixth Street to 19th Street 19th Street from Fifth Avenue to Bever Avenue ever Avenue from 19th Street to 14th Street Bever Avenue from 22nd Street to Memorial Drive Garden Drive from Grande Avenue to Washington Avenue 11th Avenue Improvements from Third Street to Fourth Street