HomeMy WebLinkAbout2014-06-30 TranscriptionJune 30, 2014 Iowa City City Council Special Work Session Page I
Council Present: Botchway, Dickens, Dobyns, Hayek, Mims, Payne, Throgmorton
Staff Present: Markus, Fruin, Long, Andrew, Dilkes, Bockenstedt, Karr
Continued Discussion of Local Option Sales Tax Recommendation UP # 5 of 6/12 Info
Packet and agenda item # 5 of 6/30 formal agendal:
Markus/ Uh, I believe Steve ... is Steve Long here? Steve, uh, is here to respond to some
questions about affordable housing. That was one of the issues that, uh, the City Council
had asked about, and so I would ask Steve to come forward and just kind of summarize
the memo, um, that he prepared regarding affordable housing. Steve!
Long/ Hello! (several responding) Um, basically I was asked to explain what the definition of
`affordable housing' is for this purpose and as you know, affordable housing is a, uh, can
...can be defined many ways, and generally it's 30% of someone's in ... you should pay
no more than 30% of your income for affor ... for housing costs. Well, that can mean, you
know, if you make $100,000 a year that's a lot different than if you make $40,000 a year.
So what we do is we look at different programs that we operate and ... most of our
programs that we have or that we use funds from are federal... federally funded, and they
have some pretty strict guidelines on what affordable housing means, and so I looked at
those figures and generally we use 80% of median income and I'll try not to use too
many acronyms so please ... ask questions. Um, no more than 80% of median income
would be the ... the persons that would benefit from any program. And then we also...
they have some guidelines on if it's an owner- occupied program, uh, HUD has these, uh,
they just changed the name. Home... homeownership value limits, if...if we assist a
homeownership home that can be valued at no more than $200,000. And then we also,
for rental properties, we look at what's called the HUD fair market rent, which is a ... a
number that's set by HUD and um, those numbers fle ... they change annually, and they
basically look at our market and ... do some surveying and come up with these maximum
rental amounts. And so for these purposes, we feel that we should be looking at, for
rental properties, below 80% of median ... median income, and using our HUD fair market
rent numbers as a maximum, and for homeownership ... a maximum of 120% and we
went ... we're suggesting that we go a little bit higher for the homeownership and these
are just some maximums. It doesn't mean ... if this program proceeds, that we can't set
parameters for different types of programs lower than that. At 120 %, because based on
our experience for homeownership ... and programs like the UniverCity Neighborhood
Partnership program, for instance, urn ... a lot of the buyers that we're assisting, if one...
there's a lot of factors that go into buying a home when a mortgage lender looks at your
application. They look at your income, for one, but they also look at your existing debt,
and a lot of the homebuyers that we're seeing have some debt, um, student loan is ... is
the biggest one, um, and then childcare costs and things like that. And even though right
now we're... we're... we have the benefit of low interest rates, uh, we don't know what...
we can't predict the future, but... realistically they're not going to continue at that level
for... for... forever. Um, so we felt comfortable with that 120% for homeownership. Um,
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the biggest... demand is rental housing. Um, and has been since I've been here, uh, but
we feel that the ... the fair market rents and the 80% of median income are the ... are the
best, urn ... best range or the best target I should call it, um, for that program.
Payne/ Can I ask a question?
Long/ Sure!
Payne/ Is that, urn ... (mumbled) net or gross?
Long/ That's gross.
Payne/ Okay, so that's gross income.
Long/ That's correct. So...
Dobyns/ Go ahead, Steve.
Long/ So ... that's kind of the ... the meat and the ... the numbers of who we ... we feel could benefit
most from these ... these funds. We also ... looked at ideas and suggested ways that ... to
allocate the funds to different projects, and these are just suggested uses. Um, I think the
key in what we found in our programs is that flexibility is important. It's hard to predict,
you know, this is a 10 -year period and it's hard to predict what ... what the needs are
going to be in the future. But some suggested uses, uh, would be downpayment
assistance for homeownership programs, land banking for future development, and if
you're not familiar with that is ... that's essentially, um, the City or an entity purchasing
land now and keeping it set aside for potential affordable housing developments. Um...
developing, or ... or continue with the UniverCity Neighborhood Partnership program, or
something similar. There ... there may be other neighborhoods that, and there are other
neighborhoods I feel, that we could be working on as well. Creation of long -term
affordable rental housing. Um, creation of shelter and transitional housing opportunities,
and additional homeownership opportunities, and then improving and rehabbing existing
owner occupied and rental. So currently we have a ... we do have a federally funded and
city - funded rental, or excuse me, housing... owner- occupied housing program, but we
could look into also expanding that to ... rental programs, as well, or rental homes.
Hayek/ Are there any questions for Steve? This is a very informative memo. I appreciate it!
Throgmorton/ Well, I ... I don't know that I have any real questions, uh ... urn ... I ... I do know that
I've seen some concerns expressed, I don't know, in emails or ... letters or conversation, I
can't re ... really remember where I've heard these, about making sure that any funds
directed towards affordable housing really gets to people who need the housing. And,
I ... I think that's what our intent is. So I ... but I'm ... I'm wondering whether, uh, the
proposed language is sufficiently clear for that to occur, for the money actually get ... to
get to people who need the housing, rather than ... kind of disappear. I mean, I'm ... I
don't want to use language other people used in ... in letters and emails and whatever.
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(mumbled) so ... what ... what I've seen is concern that money will eventually, basically,
get diverted into staff salaries, get diverted into staff programs that, you know, so I just
want to be clear that that's not what our intent is. The intent is for the ... for the funding to
get to people who need the housing.
Markus/ Clearly the intent is for it ... the funds to be used for affordable housing, and um...
ultimately the Council controls that. So, I think ... I think you as individuals and
collectively you can say that that is, uh, what the intent is and the plan is, is to use the
funds for programs that result in affordable housing for our residents. Yeah, there's no...
there's no design or even discussion on the part of staff (both talking)
Throgmorton/Yeah, I didn't think there was but (both talking)
Markus/ ...to be adding staff. In fact we think that there are both, uh, private, non - profit, and
public agency, um, organizations that are already staffed that can integrate these
programs into their existing programs, um ... without the addition of staff to accommodate
these types of, uh, programs.
Throgmorton/ Uh huh.
Botchway/ Some other questions, Steve. Um, basically is ... from the suggested uses you gave us
of LOST, will this, uh, obviously some of it will help, but you know, will this put a
serious dent into the affordable housing issues that we have currently facing Iowa City?
Long/ (laughs) I ... it's going to put a dent. Um, if you look at the funds that we have currently,
um, and they've been decreasing every year for many years, um, this is a substantial
increase over what we've been used to dealing with, and we have a ... I mean, there is a
large demand, um, but this definitely would put a ... would help to alleviate, um ... the
issue, definitely! I ... without having the exact, you know (both talking) dollar amounts,
but from what I ... what I've been hearing, um, you know it's... it's ... um ... annually we'll
be almost triple from what we're... currently receive in Home funds. So it ... I mean,
that's a significant increase!
Markus/ I ... I think the ... I think the other thing that should be noted is ... what the Council is
discussing is the, uh ... the proportionate, you know, allocation of funds for the City of
Iowa City. The other jurisdictions have to make a determination as to how they're going
to proportion their funds, as well. And I can tell you at the committee level, one of the
things that we talked about is strongly encouraging our neighboring jurisdictions, um,
that would be making these decisions to follow suit, which would substantially, uh,
increase the amount even over what, uh, what Iowa City is doing, and so you have ... you
have the potential to increase the dollar amount significantly, and we've always argued
that affordable housing is not just an Iowa City issue. It's a regional issue, and that that
would be, you know, a... a way for regional buy -in, uh, creating the revenue stream that
really hasn't existed to this level before, uh, to create more affordable housing. So, I
think it has the potential to multiply beyond, uh, what Iowa City's doing, and I think the
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other thing Steve would tell you is, these funds go a long way to leveraging other dollars,
bringing those other dollars into this operation.
Throgmorton/ I ... I'd like to observe one other thing. I noticed your list of possible uses of the
funds includes, uh ... uh, shelter and transitional housing. I ... I don't know that that was
mentioned earlier in our previous stuff, so I'm very happy to see that included in the list.
Markus/ Well there's the ... you recall that I think Chrissy Canganelli mentioned (both talking)
Throgmorton/ Yeah, Housing First...
Markus/ ...Housing First and ... and trying to get individuals who have been reluctant service
acceptors, uh, into a role where, you know, they start to go through a process where they
can get into permanent housing on their own. So, we feel that that's a legitimate, um...
issue addressing the whole affordable housing approach to what we're trying to
accomplish here.
Hayek/ So what I think we ought to do is, if there are any more questions for Steve, certainly ask.
If there's anything else staff wants to present or talk to us about, go through that.
Markus/ Okay!
Hayek/ I know Simon's got a memo. (mumbled) anything else we want to do from a staff level,
and then I know there may be people in the audience who wish to address us, and we
would open it up for community input. Um, and then after we've had the benefit of that,
discuss among Council. That ... that's what I would propose. Thank you, Steve!
Markus/ I'd ask, uh, Simon Andrew to just come up and brief, uh, the Council on the distribution
of, um ... where the ... where the tax dollars come from, where they go.
Andrew/ Sure, um, the table in the memo is ... fairly straightforward. I think the biggest
difference between FYI and FYI is the application of the rollback percentages in the
most recent property tax reform, um, and those will continue to go down. Commercial'll
go to 90 %. Um, there will be in the future a separate class broken out for multi - family
residential, which will have a declining percentage every year until it reaches the, um,
other residential roll -back rate. Um, so ... really that rollback, uh, column is just how
much of the, uh, assessed value is taxable for each of those property classes. Um,
roughly 60% of...or 54% for the next fiscal year of our, uh, tax dollars that come from
properties that are subject to all levies will be residential, um ... rather that 62 %. 35% for
commercial, and then everything else is in the I to 2% range or ... much lower than 1.
Um, one question that did come up at the last work session is whether these property
classes can be taxed at different rates. Um, they cannot be. There is one levy rate that
applies to all of them. Um, there was some discussion of, uh, rebate or abatement
programs, which uh, you know, we can look at and, uh, I think Eleanor had a... a
response on the, uh, abatement programs, which is more at the County level, I believe,
but ... um, we'd certainly be happy to answer any more questions along those lines.
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Botchway/ Well what was your comment, Eleanor? Cause that was my question about the
rebate, um, so ... so basically, um, you wouldn't change the levy rate, you would just
leave it the same but then whatever, urn ... whatever you decided to ... however much you
decided to go down, um, you would give that rebate to the particular residential property
owners.
Dilkes/ Yeah, I ... it's not how it works. Um, the ... the way the Code reads is that a ... a person
can apply for an abatement of their taxes by filing a petition each year to do that, and they
have to show that they are "unable to contribute to the public revenue," and there's a
provision that says specifically some people are unable to contribute to the public
revenue and those are, um, recipients of federal supplementary security income or state
supplementary assistance, or a resident of a healthcare facility, which is receiving
payment from the Department of Human Services, and for that ... that class of people, the
property... or the tax shall be abated automatically, and there's a communication that goes
on between the Department of Human Services and the ... and the Board of Supervisors.
But with respect to other people who claim they're unable to contribute to the public
revenue, um, that's a discretionary decision by the Board of Supervisors. Uh, the City,
years and years ago, and I looked at the history of the statute, the ... there had to be City
approval before it went to the Board of Supervisors. That's not the case anymore. It's...
it's purely a discretionary decision of the Board. Um, there's no definition of what
`unable to contribute to the public revenue' means, although it used to say "unable to
contribute by reason of age or infirmity." So ... and that was taken out, so ... presumably it
means perhaps something more than that, but um ... that would be an indivi ... that would
be an individual -by- individual thing. The City has no authority just to say we're abating,
uh, taxes on ... you know, people who live in such -and -so places or whatever. So...
Hayek/ Okay. And... you... the utility rollback was not impacted by property tax reform, is that
right?
Andrew/ Yeah, and most of the utility valuations falls in the gas and electric... utility...
Hayek/ Okay.
Andrew/ ...uh, property class which isn't subject to property taxes, um, that's subject to an
excise tax, which is based on their output. Um ... basically so we can capture revenue
from out -of -state energy companies that are, um, selling to Iowa customers. We didn't
want to put our own companies at a disadvantage ... with neighboring states, but...
Hayek/ That's over my head anyway! Urn ... but you can see the rollbacks in commercial,
industrial, railroads.
Andrew / Right.
Hayek/ (mumbled) starting to inch back as the legislation and...
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Mims / And just to confirm, those go to 90 and then stop.
Andrew/ Yes, for the commercial. (both talking) The multi - family residential, which is
previously been in commercial, will break out as a separate class and those will continue
to decline to 50, 60s (both talking)
Markus/ So there's a burden shift occurring from commercial, industrial over to residential.
Throgmorton/ And that takes place over what, five years?
Andrew/ The, uh, multi - family...
Throgmorton/ Yeah.
Andrew/ ...I believe it hits the residential rate in 2022.
Throgmorton/ 22.
Andrew/ Uh huh.
Throgmorton/ (both talking) ....5% the first year, right?
Markus/ (both talking)
Andrew / Right. Right.
Markus/ I did ask, uh, Dennis Bockenstedt to, uh, review a few issues that have come to our
attention from the time the Council, uh, met and till this meeting, and so he's prepared a
few PowerPoints that may be of benefit, uh, to inform the Council on some other parts of
this issue. So ... Dennis, you want to ... walk through those?
Hayek/ Thank you, Simon.
Bockenstedt/ Is that on ... Marian?
Hayek/ ...take a little while to warm up actually. (several talking and laughing off mic)
Payne/ ...tornado siren! (several talking)
Bockenstedt/ Severe thunder storm (several taking) (siren in background) (several talking)
Karr/ Yeah, you'll have to ... it's a tornado. They'll announce it.
Dilkes/ They'll announce it in a second and then we ... we'll have to all go to the... basement.
(siren in background) Yes you have to! (laughter and several talking)
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Hayek/ Okay, I'm sure this is exciting for those watching this, especially, uh, in recorded sense.
They're probably ... a sunny day! This is a thunderstorm warning and ... and we're
authorized to keep on truckin' here (laughter) and our, uh, PowerPoint is up, and so,
Dennis, if you're not distracted by the wailing siren, uh, please... please give us a report.
Bockenstedt/ Tried to look at alternate revenue sources (siren in background) and how they're
used around the state, and how the sales tax might affect, um, maybe an average
taxpayer. Um, here's the property tax rate comparison from, uh, the top ten cities across
the state. You can see that Iowa City is fourth on this list (siren in background) at 16.81.
Um, so we're near the top tier. Um, how other revenues are used around the state and
where they sit, uh, this is the...
Karr/ Dennis, do you want to move the microphone a little bit closer (noise on mic) There you
go! Thank you!
Bockenstedt/ Sorry, it's kind of shifting. Um .... (siren in background) the hotel /motel tax
revenues, you can see, um, West Des Moines, Cedar Rapids are near the top, and Iowa
City is ... is pretty much at the bottom of that list as far as, uh, the revenue we derive from
hotel /motel tax. Um, utility franchise tax, this was another, uh, revenue source we looked
at potential. Um, we have a I%, uh, utility franchise tax in place now, which goes up to
5% from Des Moines. The City of Dubuque has a 3% in place, and Ames, uh, has a 0%
tax in place. Um ... the communities with the local option sales tax, uh, Iowa City and
Des Moines are the only two, uh, metros without one. Now we're on this list because we
did have one in place for the flood, uh, flood expenditures. Um, and you can see how
much revenue they generate. Cedar Rapids, uh, generated, they had a flood one as well,
but it generated 17... $17.76 million. (laughter)
Mims/ Love it when computers do that on their own! (siren in background)
Karr/ It's still on!
Bockenstedt/ I think the computer shut itself down.
Hayek/ Yeah, I saw a, uh, log, uh, `shutting down' or something symbol on your screen.
Bockenstedt/ All right.
Markus/ Do you have the sheets you can just keep going on?
Bockenstedt/ Um ... no I didn't (both talking)
Markus/ Printed copy?
Bockenstedt/ ...didn't (mumbled)
Hayek/ It's part of going paperless! (laughter)
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Karr/ (mumbled) ... shut down. (several talking)
Bockenstedt/ We might have a dead battery.
Hayek/ All right.
Bockenstedt/ (several talking away from mic) ...well I think that might be the ... that might be the
issue. I think Marian went to see if she could ... Marian went to see if she could find the
adapter. (several talking)
Dickens/ Do you know any songs? (laughter)
Mims/ Sing and dance?
Bockenstedt/ Do a little soft -shoe for you! (laughter)
Dickens/ Little Vaudeville act! (several talking)
Payne/ Is this what you were doing on Saturday while you were at work, Dennis?
Bockenstedt/ Little bit of it.
Payne/ (laughs)
Bockenstedt/ (mumbled) ...did this this morning.
Payne/ Yeah (laughs) I thought you were more prepared than that! (loudspeaker announcement
for severe storm heard in background)
Hayek/ Dennis, could you get my car? It's up the street (laughter)
Dickens/ Well if you'd parked in the City ramps, your car (several talking and laughing)
Bockenstedt/ Okay, we're back!
Hayek/ Okay!
Bockenstedt/ Okay.
Hayek/ Okay, let's get back on track here.
Bockenstedt/ You can see that when we had our 1... a I% sales tax in place, we generated
slightly over $9 million, uh, in that last year. Uh, Dubuque generated $8.3 million with
theirs, and Ames, uh, 6.72 million. Um ... for utility rates, um, as far as the list of utility
rates is concerned, um, you can see that Iowa City is ... is near the top, uh, as far as water,
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sewer, uh, waste water rates, uh, from that... from an individual standpoint. Other, uh,
significant revenue alternatives that other cities are using, you can see as far as gambling,
casino revenues, uh, Sioux City, Davenport, Council Bluffs (mumbled) Dubuque are all
receiving, uh, gaming revenues. Um, in addition, uh, Ames has electric utility, which
generates substantial amounts of income, uh, for the city. As far as what a sales tax, uh,
would do for ... what I used here is just, would say an individual homeowner, um, the
City's total property taxable valuation is about $3.1 billion. Uh, we're estimated to
generate between 9 and $12 million of sales tax revenue. (mumbled) right here, uh, 60%
of that, we would expect to go to property tax relief, which would generate between 5.4
and $7.2 million, uh, which would impact the, uh, the property tax rate between $1.72
and $2.29,$2.30 per $1,000 of value. So how does that impact the homeowner? If they
have a house of $100,000 value, it's taxed at 54% of that value, so the house would then
have a taxable value of $54,400. Um, this is divided by 1,000 and multiplied the property
tax rate. So you'd expect a savings for $100,000, uh, assessed value house between 94
and $125 per year approximately. Um, so how does that 1 -cent compare as far as sales
go? Uh, that'd be an annual sales tax equivalent, they would have to spend between
9,000 and 12,000 a year in taxable sales, uh, to make up that ... that same dollar amount,
which would be about 780 to $1,000 a month is what they would spend in sales to
generate... add sales tax equivalent, or about $180 to $240 a week in taxable sales.
Markus/ But that's not total sales. That's only sales that are subject to the sales tax (both talking)
Bockenstedt/ That's right. That would not be groceries or any non - taxable sales. It would only
be taxable sales. So I went to the IRS and looked up a ... they had a calculator out there as
far as how much, uh, sales tax is deductible... what you'd expect a certain income level,
exemption levels to generate for sales tax. So in this case, um, I used a range of 40,000
to $50,000 per year, uh, with two exemptions. So it'd ... maybe a ... a husband, wife that
are in between 40,000 and $50,000 a year, uh, the sales tax you would expect them to
pay, a total of $750 a year in sales tax, of which $106 would be, uh, local option sales tax.
So those are ... and I don't know what formula the IRS uses to generate those calculations,
uh, but you put in your jurisdiction and your income level exemptions and it tells you
approximately how much sales tax that you would pay that's deductible. So, um... so
given that income level, two exemptions, you would expect to pay $106 per year in local
option sales tax. So compare that versus $100,000 house, would save between 97 and
$125 per year in property tax. That's ... as far as alternative revenue sources go
and ... impact on individuals. So, if anybody has any questions (both talking)
Throgmorton/ Yeah, I think it's helpful to see this, but it'd be a lot more helpful for me
personally — I can't speak for anybody else — to have it in writing beforehand, so I can
look at it, think about it, persuade myself exactly what it means in terms of what I should
be thinking with regard to this proposed action. It's hard to respond quickly on the basis
of something that's presented up on the screen. So ... I ... I'm just saying for me
personally it's more difficult... watching than it is, to have time to read and think.
Hayek/ Any other questions for Dennis? We can bring staff back up as we need to but ... I
appreciate the, uh, information. Any other staff reports, Tom?
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Markus/ No, that is it.
Hayek/ Okay. So if there are members of the audience who would like to address the Council on
this item before we take it up, I invite you to come forward and we'll follow our normal
protocol which is to please sign in and verbally give us your name and to keep your
comments to five minutes or less.
Eastham/ Thank you. My name is Charlie Eastham. Live at 37 Colwyn Court. Uh, Marian,
there's not a sign -in sheet, so are you taking names or ... okay. Uh, and I will certainly
talk less than five minutes. Um, I'm just speak... speaking for myself, personally, not
associate... I'm not speaking (mumbled) groups I'm associated with or working with.
Uh, when I, uh ... uh, discovered that the Council's proposing a, uh, a tax, in this case a
sales tax, and along with that the Council is proposing, uh, or is considering — I'm sorry —
that part of the revenue, 10% in this case, of that tax proceeds, over 10 years, would be...
would be made available for affordable, uh, housing, whatever the definition of
affordable and whatever housing is, uh, whatever programs are eventually supported, I
wanted to do a back flip, which, uh, I would try to do here but, uh (laughter) be a
disaster! Uh, this is the first instance in my 40- something years in this community that I
know of that a Iowa City Council has considered seriously devoting a substantial stream
of revenue over a significant period of time for this specific purpose, affordable housing.
Uh, I know there are a lot of considerations in trying to work this out in terms of the ... the
regressive nature of the sales taxes against property taxes, so forth, and exactly how
money would be spent in the future as revenue comes in and programs and uses are
proposed to the Council. I personally am willing to work with this Council and Councils
in the future over the use of funds, urn ... and I personally think that numbers I've done
indicated that the regressiv ... regressive nature of sales taxes and property taxes because
of the use of funds that are proposed in this instance, um, probably tend to offset each
other. Um, and certainly for families, uh, that rent or own that are paying much more
than 30% of their income on housing costs now who would have their ... their housing
costs reduced because of the use of these funds over the ... the next 10 years. For those
families, there'll be a substantial increase in their available income, uh, as opposed to
what they have now, whatever the regressive nature of sales taxes are. So I would very
much like to commend the Council for, uh, bringing the community to this point. Thank
you.
Hayek/ Thank you for the comments.
Pierce/ Put this down, cause I...
Hayek/ Sure!
Pierce/ Okay! Sorry, cause I have my own computer. So ... my printer broke and so this is the
only way I can come (laughs) uh so ... thank you all, council, for uh, a very long and
exciting meeting here. My name is Matthew Pierce, uh, 736 Michael Street, #8, uh, in
Iowa City, over on the west side. Uh, all right, I'll write it down. (laughs) Okay!
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(mumbled) Okay, so, um, today I did obviously want to talk to you about the local option
sales tax, and I, uh, I would like to thank Charlie for his ... his, uh, his, uh, thoughts. Um,
mine are kind of along the same lines. Um, but I'm actually here to vo ... voice my op...
opposition to this proposal as it is currently constructed. Um, I've read through the entire
packet. I spent all of yesterday reading all 40 pages of your packet, which was very
exciting. Um, but my largest problem lies in the distribution of the tax revenue. Um, I
am a renter, and I will realize no benefit. Zero dollars from this 5.4 to $7.2 million in
lower property taxes for property owners. This year. My landlord, however, will make a
bigger profit and likely raise my rent the next year anyways, as he has done for the last
three years. Um, and the situation's obviously linked to the affordable housing crisis that
we have in this town. So I am already rent, cost verdant. So, um, next under this
proposal I will pay the exact same sales tax as someone who realize hundreds, or
potentially thousands of dollars, in tax savings each year. I realize none of those savings!
I, uh, I do not have ... I'm a renter because I do not have the capital to buy property.
Those who rent are inherently less wealthy than those ... those who own property. So in
this way the sales tax functions as a wealth transfer, where the poor subsidize the rich.
So, and I don't know if we need any more income inequality in this town. I do think it is
a good idea to include a provision for the improvement of our roads. That is a public
good for which all people benefit. A strong urban core, one of your tenets, uh, acts best
to accommodate streets when we have a diversity of transportation modes, including
biking and walking and transit, not just the driving and parking of cars. Um, we must be
conscious of the needs for diversity of transportation types and to serve the needs and
preferences of all income groups. Finally, to Charlie's point, we do have the first time
ever a ... an acknowledgement of the situation of the affordable housing crisis. But, I
would say $900,000 to $1.2 million each year is a small dent in the need for the
housing ... the housing need in this community. Um, I would ... I would argue that the...
that the threshold is so low, that those who need ... are in need of housing, uh, sorry
(laughs) The threshold is so low that the additional sales tax paid by people in need of
affordable housing would almost certainly be more than the amount paid each year. So,
this is a net loss for this community, and I feel it makes no sense. Um, this is an unusual
position for me. I am generally not in the camp of opposing taxes. I believe taxes are an
important way for us as a society to buy the goods from which we all benefit, but we
cannot buy on our own. I think that's very important. But this tax as it is proposed to be
constructed is just un ... is unjust in its nature. And I would argue not to put it on the
ballot in November. The ... I think Jim had a really good, uh, memo in his packet about
how to, uh, redistribute, um, the 40% or 40% property and 25/25, whatever, um, I really
liked the programs that Steve Long had proposed for the 10 %. I think we can make it 20.
1 think we can make it 30. I think we can make it 40 %. Um, I think those are all good
programs. I think this is just not a big enough step, and we can raise (mumbled) the...
the tax, the franchise tax fee. I know that. Um, I lived in Des Moines. They also don't
have a LOST ... uh, LOST tax, can't say that, but ... um, and it's a great place to live too,
and Iowa City is a great place to live. (mumbled) ... our competitive advantage cause we
have the University and we have the Hospital. We are not at a competitive advantage, I
would argue, and ... and just by reducing property taxes, I don't think people are going to
move here. I mean, it's ... it's, and again, I don't see any benefit from it. I can't buy a
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house. I can't. I don't have the money. So, there you go! Thank you all for listening to
me! And I have a football game to get to! So ... I thank you much!
Hayek/ Thank you for your comments!
Throgmorton/ So, Matt, it's fascinating hearing the wind outside, right. Tom, you just stepped
out. Did you take a look? I mean, do you know...
Markus/ It's windy! (laughter) And it's raining!
Throgmorton/ We got any trees left out there?
Markus/ It's ... I didn't see many of `em coming down yet but it's ... it's harsh!
Throgmorton/ Yeah, it sounds very (both talking)
Dobyns/ We who are standing right next to a big pane of glass are ... (both talking)
Throgmorton/ Yeah, feeling the breeze! (laughter)
Dennis/ And I won't take up much time!
Mims/ (laughs) We're not going anywhere!
Dennis/ I'm Maryann Dennis. I'm the Executive Director of the Housing Fellowship. Hopefully
most of you know that we're a non - profit housing developer, and I'd like to thank the
committee for your ... their hard work and the staff for the report, and I would just like to
say on behalf of the Housing Fellowship, um, I ... very much support this LOST, uh, being
on the ballot and also the proposal on how it's going to be allocated. Thank you very
much!
Hayek/ Thank you for your comments.
Welsh/ My name is Bob Welsh. 84 Penfro, Iowa City, Iowa. Uh, I basically have come to urge
you, uh, to not put ... to defer putting the local option sales tax on the ballot until the year
2015. Two reasons. Number one, I think you need a lot more dialogue in terms of how
to allocate the funds. Uh ... uh, Councilman Throgmorton has had a proposal, the
Committee has a proposal, uh, I think you would get much better buy -in from the
community if you had more dialogue on that subject. Uh ... the second reason I would
urge you is that, uh, a report of your committee talks about the need for cooperation,
among governmental units. Uh, there is already a ballot... initiative scheduled for the
November 2014 election, which has to do with the Courthouse, which surely impacts the
welfare of the citizens of Iowa City. Uh, I think both of them on the same ballot would
potentially lead to defeat of both. Uh, so I guess I hope that when you are in session, uh,
cause I understand that in informal sessions you don't take action, uh, that uh, at least
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someone would vote to defer placing this on the ballot until 2015 for the two reasons that
I've stated. Thank you.
Hayek/ Thank you. Anyone else? Okay. Let's talk about it as a council here. It's a little
disjointed with the weather outside but...
Throgmorton/ It is! (laughter) Grace under pressure is what Hemmingway said.
Hayek/ Yeah! Now, uh, you know, we are ... we are in the work session. We would need to end
that and ... and take up the formal, uh, but I broke with standard protocol just because of
the ... the way this was structured and the fact that we had people out there that we wanted
to hear from, and I think it will help us with our work session, uh, it ... itself, but ... we're
...we are still in work session. Let's talk about what we want to do. I would remind you
that the action item, should we take it up, is ... is at, uh, Item #5, which is the resolution
prepared by City staff, which is consistent, I believe, with what we talked about on the
17' .
Throgmorton/ Well just ... to state the obvious. There... there's, uh, both policy and politics
involved inhere. Uh, we ... we have to be thinking about how the general public would
respond, not just within Iowa City, but in surrounding communities that are part of the
five contiguous cities. And we have to think about relationships with, uh, nearby
governing bodies and their boards and councils and whatever, uh, so we all know this, but
I thought it was helpful just to kind of state the obvious. Partly with that in mind, I think
it would be a mistake to act formally on this proposed resolution today. Uh, and I say
that, uh, partly because... we're meeting on a Monday afternoon. And there's been
virtually no news coverage that I know of with regard to, uh, the immediacy of our
action. I think it would be wiser, uh, in terms of...at a minimum in terms of, uh, pro...
making sure the public has sufficient notice, meaning a couple weeks at least, of the
proposed action, has a chance to ... to express whatever their views are, uh ... uh, and...
and in order to do that, I think it would be wise to defer to July 15th which is our next
scheduled... regularly scheduled meeting. Now I know, Matt, uh, based on the
conversations that you remind me in our work, previous work session, there was some
discussion about this and about the importance of giving, um ... uh, other elected bodies in
the contiguous cities sufficient time to figure out how they would allocate their funds.
But we can notify them, uh, that we're continuing to move on this and we've got it...
formal item scheduled on November, or uh, July 15th. So it wouldn't actually catch `em
by surprise. They'd have sufficient time to be ... thinking about what they want to do.
Anyhow, I think it would be a mistake to vote on it today and I ... I just want to get that
out there and ... then there are, you know, several other items of course that I would like to
bring up as well, but ... we can start with that.
Hayek/ Do you want to go into your other... items, as well?
Throgmorton/ I ... I can, but of course it depends on what other people want to say, as well, so ... I
...I want to do what's right with the group.
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Mims/ I mean, I'm comfortable with voting on this today. I don't ... my perception in talking
with various Council Members is ... that we're not ... I don't perceive us as having a big
change between now and two weeks from now. And so ... the other jurisdictions have
already been notified. I think they were notified when we ... when it first went out in our
Information Packet. So that, you know, just out of courtesy that we were going to start
discussing this, um, and I think to ... get it finalized as soon as possible, um, basically
then ... we have a ... if we're going to move forward with this, we have a big educational,
uh, push to educate, you know, constituency so they understand what it is would be on
the ballot in November, and I think the sooner, uh, that we can get that started the better,
and I don't ... I don't perceive that this Council's going to make significant changes that
makes it worth delaying two weeks. And we have no control over whether local media
covers us or not. I mean, this is ... was in an Information Packet. We talked about it at a
work session. Um ... you know.
Dickens/ There was an article in the paper about this meeting today so...
Mims/ Yeah.
Throgmorton/ Where was that, Terry?
Dickens/ It was in ... either the DI or the Press this morning.
Botchway/ Think it was the Press - Citizen.
Throgmorton/ Do you know when?
Dickens/ It was either this morning or yesterday morning, one of the two.
Botchway/ Actually thought it was ... I thought it was before that actually. I thought it was after
our last meeting (both talking)
Dickens/ ...I read it somewhere but I don't (both talking)
Throgmorton/ (mumbled)
Dickens/ I only get the Press and the DI, so...
Botchway/ So one of my issues, um, and it kind of speaks to, uh, about issue coming up was, uh,
the timing of it. Um ... it, just because I ... do I ... I don't have a conflict here, do I? With
the election part of it?
Dilkes/ (unable to hear, away from mic) (several talking and laughing) I don't know what your
comment is about.
Botchway/ Well I guess it's speaking to the fact that we're going to have it on the November
ballot. Um, there's a lot of different issues going on, from an educational standpoint.
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We're going to be hard- pressed to change the minds of people when you have (can't
hear) on the ballot. When you have the Governor's race on the ballot. I mean, it's almost
like the LOST from an election standpoint, isn't going to matter much, and this is
something that I think is very important for the community to ... to pay attention to,
especially if it is to pass. Um, I know that I've talked to Tom briefly about the potential
costs of doing it for a special election. Um, but that's ... one, that's a cost that's going to
be incurred by all the cities when they do it separately because that's a cost that we ... I
don't necessarily say contract out but we ... respective cities pay for, um, but with having
it separately, um, in 2015, we have the ability to focus all our attention on that particular,
um ... tax or that particular election. I'm just worried that we're going to get lost in the
shuffle and um... with ... with that, you know, the other races, uh, I mean, we just not
going to give as much due diligence, or at least the community or at least the public at
large is not going to give as much due diligence to this as I think it should have if it was
on a separate ballot, just because I think it's ... I just ... I just don't think it's going to pass!
Just have a feeling that it's not going to pass. That's the first part of it. The second part
of it is, the particular language, and I know we're not to that point yet, but the particular
language on the ballot, um, itself in regards to affordable housing, I think we should take
affordable housing out and ... and put a different ... I wouldn't say spin but a different
language associated with that. I just feel like immediately because we've had these
discussions for, um, for numerous years, but at least, you know, it's been in the media a
lot recently that nexus that Michelle brought up about affordable housing being linked to
Section 8 housing I think is a very, uh ... uh ... pared nexus that people just automatically
think about, and I think we're going to be hard- pressed to have that education, um, be out
there that's going to change people's, um, point of view when it comes to that, and so
either we need more time to do that or ... we need to change the... construction of how
we're going to discuss, you know, particular affordable housing opportunities.
Hayek/ Wh ... what would you, I mean, you'd have ... we'd have to have some language,
obviously, for the ballot itself. Do you have an idea as to what language you would use
in lieu of affordable housing?
Botchway/ I mean, not off the top of my head. I was going to ask Steve if he would come up
and, off the top of his head (laughter) come up with something, but ... you know ... to me
this speaks about, you know, neighborhood stabilization. It speaks to, um, a lot of
different things, so I don't necessarily ... I'm ... right now, no.
Hayek/ Okay.
Botchway/ ...off the top of my head, I'm just worried about that particular phrase or this
particular, um, number of, uh, uses of words and what it could possibly mean, when
people are looking at it from a ballot language standpoint.
Hayek/ Yeah.
Botchway/ But my bigger point is the November ballot, compared to a special election, in
possibly the spring.
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Hayek/ See I think others ... I think the flash flood warning (several talking)
Botchway/ Yeah, that's what I was ... yeah.
Hayek/ Um ... I mean, I'd like to hear from others, but you know my sense, uh, from the
Committee was that ... that they view the tying it to the November election, even though
there's a lot going on, as ... as better for ... in terms of promoting the chance of success,
because it is tied to a general, um, it's everything short of a presidential and uh, you're
going to have more people out there and that... on a single, you know, if you put it up as a
single issue, uh, ballot item, you know, putting aside the cost which would cause
criticism, um, because it's a special election, um, might not give this the same chance of
passage, but ... that was my sense. (several talking)
Payne/ I would agree if you're getting a better representation ... the more people that vote, the
better represent... you know, the more you're seeing what ... the majority of the people
want. You have a ... it's hard to get people to vote in a special election.
Throgmorton/ Right. So the next choice is November 19 ... or 2015.
Mims / And I would not tie it to (several talking) Council election. I think Kingsley said that
earlier (both talking)
Botchway/ Yeah, I would dis ... I would totally disagree with that. Just because the issues, um,
because of the Council Members could get cornered and locked into a situation that they
might not know ... the entire perspective about. I just ... and that's just from a council or
candidate standpoint. That's not necessarily from a ballot standpoint.
Payne/ And ... and from that perspective, putting it a whole year out, and... regardless of I guess
you're going to have it effective at some point in time. If you wait 18 months, you're
losing out on that revenue that you could have had if it would have passed. You're never
going to get that back. I mean, people aren't going to spend that money again. So
(laughs) I mean, if.. if really what you're wanting is that revenue to ... for these ... for
these items, you don't want ... you don't want to wait very long, plus, I mean, 18 months —
for very long, plus on top of that, people get tired of hearing about it. Just get over with
this! Let's just vote on it and be done with it. You know, people start tuning out what
you're trying to do for education, at... at some point in time.
Dickens/ I look at it as a ... as the bigger the election in November, if the senatorial race is going
to be as big and as nasty as it sounds like it may be, it actually I think will help power the
number of people that'll vote, and I think that'll get a larger representation. (person
speaking from audience) (noise on mic) And I think it'll... improve the amount of
representation on, uh, who will come vote. So I really look at it as a ... as a positive in
getting more people out. I ... I know, uh, when Susan and I ran the first time that, uh, it
was an off ...off year, and it was the lowest vote in City history. Cause there wasn't any
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major issues. Well, if you have some issues, it's going ... it's gonna drive all the ... all the
voting. So I think it's very important that we ... we do it this fall.
Throgmorton/ Yeah, so I ... I ... I'm ... inter... intrigued by the points you've made, but I want to
give you some counter - arguments. So I ... briefly identified them in my memo. I need to
restate them and maybe elaborate a little bit on some of `em. Uh, and there're like four
so ... let me start with just one of `em. Uh, and this is a judgment. Uh, as many of these
things are. More than 50% of the voters in the contiguous cities would have to vote in
favor of this proposed tax, correct? 50.1 % or whatever. I think it is extremely unlikely
that voters in Coralville would support this referendum. And the answer, the reason for
that I think is pretty obvious and it has to do with the ... with the amount of money that
would come here instead of...possib ... potentially in some other world go ... stay there, or
go there. The only way, and if a large percentage of the vote in Coralville goes against it,
I think it's extremely unlikely that voters in Iowa City would vote so overwhelmingly in
favor of it, as to compensate for that. I think there's, you know, a pretty substantial
fraction of the voting public in Iowa City that would oppose this tax for, you know, just
from the get -go because they perc ... they will perceive it as a regressive tax, despite, uh,
the information Dennis gave us. They will perceive it as a regressive tax, and like
Matthew told us, uh, about his own view, they will vote against it because they don't
think it's going to benefit them. It'll benefit wealthy people. And so ... I don't know how
many people that is, but I think there are enough of them ... that they ... will, um ... along
with what I see as a... a small fraction of voters in Coralville who would support it,
they ... they would constitute less ... we'd end up with less than 50 %. So I ... I'm sorry
I'm ... a very convoluted way of saying this, I think putting it on the ballot in November
dramatically reduces the probability that it will pass.
Mims/ I don't see how any of those arguments have anything to do with this November.
Payne/ And ... to me, it doesn't matter when the election is, you have those same issues. Whether
it's now or whether it's (both talking)
Throgmorton/ No, well, that gets to another point. I'm sorry, that gets to another point I want to
make, if you don't mind. I mean, I don't ... don't mean to cut anybody off! I ... I
understand the rationale about using the existing formula that's, uh, specified in State law
about how the revenues should be allocated. I think in the short term, self - interest of...in
Iowa City, that would be a very good thing. I think politically it would be wiser to
initiate negotiations with Coralville and the other three contiguous cities to offer, uh, to...
enter into negotiations with them about how the revenues, how the formula could be
modified, and the revenues allocated differently. And simply by offering to do that, we
would greatly increase the likelihood that we'd actually be able to get the support from
voters in Coralville and elsewhere. Imagine this scenario: representatives of Coralville,
Iowa City, North Liberty, Tiffin, and U Heights come before this Council and say to us,
"We want you to adopt this proposed ... we want you to call for this proposed referendum
on this, uh, sales tax," and to ... to go to each of the other city councils and say exactly the
same thing. If that in fact happened, we would dramatically increase the likelihood that
we would be able to, uh, that we would see that, uh, referendum adopted by voters. And,
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you know, I ... I'm getting this idea from one of our State legislative representatives. You
know, who (several talking) No! Who's very close to the situation and understands how
the legislation is made in Des Moines and ... uh ... what would have to be done in order to
...uh, to make what I just described possible. Said differently, the legislation... the
existing legislation, I think, would have to be amended, but if... if we, Coralville, North
Liberty, etc., went to our five or six local, uh, our local delegation and said, "We want
you to adopt this legislation at a State level."
Hayek/ So you're suggesting that we push a ... a mutual legislative agenda item in Des Moines...
Throgmorton/ With the cooperation of the ... with the cooperation of the other contiguous cities,
at ... or at least to ... to be a little ... try to be clear about this. At least open ... open up the
conversation with those city councils of the contiguous cities about negotiating, uh ... um,
a new formula, basically, that would be in our mutual self - interest. Not in ... not in, just in
Iowa City's self - interest, but our mutual self - interest.
Mims/ See what I have a problem with that is you have given me no ... rationale for why the
current distribution formula is unreasonable or unfair. And so not seeing that, with it
based 70 for ... 75 %, I believe, on population and 25% on taxable valuation...
Throgmorton/ Uh huh.
Mims/ ...um, and the fact that people pay taxes. You know, as Tom always says, companies
don't, and the large amount of the sales tax that's paid in this county is coming from out -
of- county residents, and an awful lot of the sales tax that is paid, you know, in Coralville
is paid also by Iowa City residents, I don't see anything inherently unfair or unreasonable
about the current distribution formula. So I see no benefit to Iowa City residents to
basically, I'm assuming, give away some of that tax revenue, uh, because you seem
convinced that Coralville won't accept ... won't pass this. I ... I think you're making an
incredible judgment that I, one, do not agree with. Um ... and so I ... I just ... I'm not
hearing any argument that says trying to enter into negotiation or a legislative change has
to do anything with fairness or reasonableness, but is entirely, in your opinion, based on a
political move to try and get more people to vote for this, while Iowa City residents just
give up more revenue over the long haul.
Throgmorton/ Well I think it's ... it's, I would say just as one quick response to that ... other
people surely would interpret the current formula differently than you just did. I mean,
other people in other jurisdictions. They can speak for themselves. I'm not going to
speak for them. I'm thinking that we ... we can improve our existing relationships with
Coralville and North Liberty, but especially Coralville. We can increase the probability
that we could get the tax adopted, which I agree we need to do (laughs) uh, and ... and that
both of those would be, uh, very good things (laughs) and I ... I believe — it's a judgment —
if we don't do that, I believe the proposed referendum will lose in November for the
reasons I ar... articulated.
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Dobyns/ Well I think any time you have a sales tax, any time of tax, uh, it's difficult. I mean, I
didn't understand taxes well until I came onto Council. I'm not sure I do, but my sense is
that, um, as someone who's a representative of Iowa City, I think the voters will come to
understand that this proposal on the ballot is excellent. Um, it's a win -win for so many
different parties, and enough! It doesn't have to be 100 %, doesn't have to be 70. Has to
be one vote over 50 %. I think what this brings in terms of a win and a win and a win for
so many jurisdictions in the community, um, makes it so important that even if it doesn't
pass, I think the time is now. I think the fact that more people would vote in this general
election makes it more representative. Whatever, the electorate will decide. It will be a
large and as representative of an electorate as we can get, and as someone who loves
democracy, I think that's fantastic! Um, but I just think this is, uh ... and I'm not going to
go into the various, uh, whys of why I think this is an excellent proposition, but I'm
proud of bringing this, uh, for ... to the voters. For those who vote `no' and for those who
vote `yes.'
Botchway/ Let me make a quick point. I get ... I don't want to sound like I'm not in favor of
putting this out to the majority of the population. My point is, is that when people vote,
they usually ... they usually get ... circle around the big races and then everything else falls
out, and so when you look at the ballot, you just see tax, and then you immediately will
vote no. And the ... and the reason why I'm saying this as well is ... just lost my train of
thought! Daggone it! Um ... is the ... is the, I guess I'll use the School Board example.
Any time the School Board puts a referendum on the ballot for $30 million or $40
million, normally it is a low turnout election. They can get their people out in order to
vote for a particular, um, passage on, um, some type of referendum. A bigger election,
more voters involved, it probably wouldn't go that way, and so I just ... if we're ... so
either we do it or we don't. I would recommend us not doing it on this ballot, but if we
do do it, then we have a tall task as far as a campaign, and as far as getting the education,
um, out to a lot of different people. I mean, we have to campaign just like almost
everybody else is going to be campaigning for their respective, you know, uh, political
candidates. I just want to make sure that, you know, if we decide to do this, we are clear
in what type of initiative we're going to have to have in order for this to pass. So, that's
why I ... I just wanted to make sure from my perspective, I mean, we were...
understanding kind of, you know, the issues that come up when you're talking about a
large representative, uh, amount of voters.
Hayek/ Well, no one has a crystal ball...
Botchway/ Right!
Hayek/ ... and ... and um ... you could be right, that it could get sort of squeezed out of the
conversation, um, if it's placed on November. You know, it could also be the case that if
it's put on a special, standalone election, you know, sometime in 15 or whenever it would
occur, um, you know, that ... that it would be hard to get the people out, who might be
voting anyway in a general, and it could fail for those reasons. I mean, there's... there are
risks whenever you do it, and I ... my sense is that the committee, um, gauged to the
extent it was able to do so what ... what stood the best chance of passage and ... and that's
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its recommendation. On balance, I personally think it's better to ... to tee it up, uh, with...
with as large an election as possible. Um, could be wrong, but either way — whether it's
on ... in November or ... or, uh, at some other time, you know, an education campaign, an
advocacy campaign, is inevitable! It won't go anywhere without that. That's... that's
clear. And, I think we'll have the support of, uh, certain groups in the community and I
would certainly hope that others would ... would get on board. Um, and that remains to be
seen! I mean, that ... it's going to be an election, and ... and so you have that piece, but I,
you know, I think it's clear to this Council, and we may disagree on some of the
specifics, but it's clear to this Council that we need alternative revenue sources to operate
our city functions. Property tax, a change in Des Moines, um, has ... is impacting Iowa
City, um, in a very serious way. We look at, uh, potentially a $50 million hit to our, uh...
uh, coffers over the coming decade as a result of that one change, um, and we have very
few other tools at our disposal, uh, because of the limitations placed on local
municipalities, um, with respect to revenue generation. Uh, very few options, other than
something like this, um, and the committee looked at those other options and... and, uh,
concluded, I think, correctly that this is the best thing we can do to divers... diversify our
revenue sources, um, and ... and come up with a way to better balance our budgets and
rely less on ... on the property tax system, which is changing over the coming decade to
the detriment of Iowa City. Um, so ... I ... I think, Susan, you ... earlier on you mentioned
that, you know, you don't think the Council is likely to change much between now and...
and the 15th. I tend to agree with you. I think we're ... I think the ... the, based on our, uh,
conversation on the 17th and the conversations I've had with people since then, my sense
is that what's on the table is about as good as we can get in terms of the buy -in of as
many possible Councilors as possible. I would love to see this be a 7 -0. We may not be
able to get there, but ... um, I think if we start changing what's on ... what's before us, uh,
we may go from a, you know, a 6 -1, you know... you... you might end up with a 6 -1 or a
5 -2; it's just that the ... the nays might change, and what ... what does that accomplish.
We ... we want to be as ... as, uh, you know, have as much consensus as possible on this
issue. I think the ... my, personally I feel like these numbers are ... are, these allocations
are thoughtful. Um, I'm ... I'm excited about what we can do, um ... and uh ... uh, and they
appear to be, uh, they appear to represent something that, um, the people up here, for the
most part, and ... and maybe entirely, can ... can ... can support, and I think it's...it...it will
involve compromise from basically all seven of us, um, cause I don't ... I ... I think each
person individually might come up with a slightly different approach to it, um, but what's
before us appears to be something that almost all of us can get around, can ... can support,
so ... those are my thoughts.
Throgmorton/ Well, so, I ... I can count. It's clear that there's, uh, a clear majority support for
moving ahead with this today. I mean, tell me if I'm wrong, but that's what I ... that's
what I'm hearing. Um...
Hayek/ Looks like it.
Throgmorton/ ... so set that aside, that topic aside for a minute. Uh, I ... I cannot support the
committee's proposed allocation. And I think I was clear about that in the memo I
distributed. In my view it allocates ... uh, too much money to property tax relief. Uh, and
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is, I think, very likely to be perceived by a substantial number of Iowa City, at least,
voters, uh, as a transfer of income, wealth, from ordinary people to wealthier proper...
property owners. So ... (laughs) I ... I can't support that! I can't support 60 %, that is. I do
not oppose ... uh, providing some property tax relief, right, but not 60 %. Uh, and part of
the rationale for ... for providing such a large, uh, percent of funds to property tax relief is
to enhance our economic competitiveness with regard to nearby cities. I understand the
rationale. Tom's articulated it very clearly to us, uh, many times over the past. I do not
believe the property tax mill rate explains why people are attracted to Iowa City. People
don't come here because the property tax mill rate is one or two ... uh, dollars per
thousand lower ... than, uh, than it was years ago or ... or whatever. They come here
because they're... they're attracted to the distinctive character of the city. For me, that
means I think we need to be investing less in property tax relief and more in enhancing
the quality of our existing neighborhoods. So, you know, the second category is
described as `street improvements.' (laughs) I think we need to be talking about, uh,
enhancing the quality of... of existing neighborhoods. And that surely means putting
money into repaving roads, remarking roads ... etc., but it involves the whole right -of-
way, it seems to me, and I've laid out several particular elements, uh, with regard to that
in the memo that I shared with you. Uhhhh... so why don't I stop there for a second. I...
I can't agree with the 60/30/10 allocation. I would need to see less money going to
property tax relief. I need to ... I would want to see more money going into something
like enhancing the quality of existing neighborhoods. And then ... and then there's the last
category, which 1, you know, we can talk about in a minute.
Hayek/ So ... so, Jim, I ... I'm going to make a run at you (laughs) um, at the very end of your
memo...
Throgmorton/ Yeah.
Hayek/ ... you indicated that you would... you would not be willing to allocate more than 50% of
the revenues (both talking)
Throgmorton/ Right!
Hayek/ ... for property tax relief. If we were to go in a direction of dropping the property tax
relief from 60 to 50, and increasing roads from 30 to 40. And in conjunction with that,
taking into, uh, or noting that, uh, for example the ... the `whereas' line that indicates, you
know, `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 suggesting that maybe that goes to what you're talking
about. Not just brand new roads out in the hin ... you know, on the edge of community,
but a lot of other things, including the neighborhood where you live! Uh, and ... and our
older neighborhoods, which have plenty of infrastructure needs. Not to mention
sidewalks and ... and curb cuts and all those ADA things. You know, could you get to a
place if we did 50 property, 40 roads, and ... and ... and 10 on housing? To ... to support
this.
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Throgmorton/ Yeah, I ... as you know, I'm not excited by that. I'm excited, I mean, I like the
50 %. I mean, that's ... for me much better than 60. Uh, but 40% going into street
improvements ... uh, you know, let me just for the sake of whoever's watching this thing,
let me read what I proposed in my memo. Repairing, repaving, and remarking older
streets — okay, we're onboard with that! Installing new ADA ramps — that was something
that was in the original proposal. Dramatically improving markings for bicycle lanes and
pedestrian crosswalks — I ... I think that's ... you know, embedded in the original proposal.
Planting and replanting trees in the public right -of -way — we're going to lose a lot of ash
trees, you know, so ... there's work that could be done there. Improving walking routes to
neighborhood schools, and... improving existing neighborhood parks and creating small
pocket parks. So those are the things I had in mind, and they're all about en ... en...
enhancing the quality of the public realm... in our existing neighborhoods, and one thing I
really don't want to see is money going ... the sales tax revenue going into building new
roads! I want to see it going into enhancing the quality of our existing neighborhoods,
and that in... obviously includes the streets. They def... definitely need attention.
Hayek/ Yeah, I guess ... I'd say in response two ... two things. First of all, there's only so much
room on the ballot. So we have to have concise language (both talking)
Throgmorton/ ...all of this can't be on there.
Hayek/ ...and we also need to make ... we ... we need the flexibility going forward. That's what
staff consistently tells us, and ... and on housing, on all of it, and ... and it makes sense to
me, but the last thing I would add is, you know, what's proposed on the agenda item is...
is maintenance, repair, construction, reconstruction of public streets and associated
infrastructure. I would read that as giving us the flexibility to do a number of things ... the
things that you advocate for, and which I would support, by the way!
Payne/ What if it ... what if it said including the right -of -way, would that help, I mean, that gets
kind of your trees in there. Maintenance of the right -of -way. As they're doing
improvements.
Dilkes/ I ... I think that was the intent of the associated infrastructure.
Payne/ (both talking)
Dilkes/ ...take it the width of the right -of -way.
Payne/ Yeah, to me when it says associated infrastructure, the first thing I think of is sewer and
water. If you're going to do something with the street, you think of sewer and water. So
if you put including the right -of -way, does it just make it clearer? Is my ... question.
Throgmorton/ For me, personally, it makes it clearer. It, cause when I hear public infrastructure
...water, sewers, roads.
Markus/ Well the intention is (several talking) not to go water and sewer at all.
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Throgmorton/ Okay, well ... you know, clarity helps. So having the conversation helps.
Dilkes/ We put a street in almost every time we do a, I mean, a sidewalk in almost every time we
do a street improvement.
Markus/ Yeah. Yeah. The only thing in your list that I would say has some... consternation is
(mumbled) pocket parks and things of that sort, but I would say to you... freeing up or
adding the dollars that would come from property tax potentially to serve the roads would
free up money to do that sort of an improvement, as well.
Payne/ From a different source.
Throgmorton/ Okay (both talking)
Markus/ From property taxes!
Throgmorton/ ... so L ..I think ... I think we can be pretty close with regard to the second
category. All right, the third one maybe not. So let me try to be clear about that. In the
memo I distributed I suggested... instead of 60, 30 ... (clears throat) excuse me. Instead of
60/30/10, I proposed 40/35/25, right? So the 25 being for what I called, I don't know,
quality, investing in quality housing and people, and in a solar future, which is not...
whereas the original proposal was for ... what was the language for affordable housing?
Yeah, okay. So ... I ... I guess I really want to be clear about this. I think it's absolutely
crucial that a clear... fraction of the funding... and a larger, well, a clearer fraction of the
funding, greater than 10 %, should go ... should clearly be going to people in the, I don't
know, below 80% of median income. You know, toward the lower ... um ... 40% of...of
the population. Because, uh, we're using sales tax funds. So for that reason, that's the
reason, uh, that I included in my list not just the affordable housing stuff that we are all in
favor of, uh, and not just the UniverCity Program, uh, not just the Shelter, which I'm very
happy to see, uh, in the list that, uh, that Steve Long gave us, but also restoring half fares
for SEATS users. Significantly increasing soc ... social services for Aid to Agencies, like
Elder Services, which we were forced to cut a little while ago. And then lastly, uh ... um,
doing a solar installation program, photovoltaic panels, uh, for a.-..at least one significant
project in the city, but the key thing.for me is ... is investing some funds in people in the
lower say 40 %, more than just the affordable housing part. I ... that's, I think that's
crucial.
Hayek/ Well, so ... I can tell you, Jim, I think we're ... on the ... on the housing, I think we're lucky
to get to 10 %, and I don't think ... I think if we go above that, we're going to lose votes on
this Council for that. I think the providers recognize that. Um, many... some of whom
spoke today, and I think the providers are also, um, quick to point out that that 10% is a
lot of money. It triples what we've done in the past, and it allows them to leverage a ton
of outside funding to do a lot of good in the community. I... so I think, you know, this
may start and end with your position on ... on the 10 %, because if you can't live with the
10% on housing, then I don't ... I don't know that there's a middle ground on ... on the
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other issues. So you have to decide that, but on the other, you know, the sales tax move
that was made 15 years ago, uh, failed in my estimation in part because it had
a... Christmas list, laundry list of... of items. I mean there might have been 6 or 10 things
on there, and when... when... when you talk about ... I mean, there's no way to put before
the people that ... that "X" percent for investing in quality housing people and solar future
because it's vague. And ... and um, you ... if that's your label, then you have to get into
these more descriptive sub - categories, and you can't do that on a ballot! And I ... so ... I
just don't see that working. Um, I ... I think these ... this proposal is specific enough for
people to know what they're voting on. It's ... it's, um, flexible enough to allow councils
to determine within those parameters how to spend those dollars. Urn ... and the ... and the
rest falls to the education campaign, to show people that, uh, for roads, this is what it
could include. It could include ADA curb cuts. It could include pedestrian trails and
bike trails and all these other things. That's my (both talking)
Throgmorton/ I hear ya!
Hayek/ That's my ... I'm talking a lot.
Throgmorton/ Michelle, in... in our last work session you said quite clearly you could not
support, uh, allocating more than 10% to affordable housing, and what I'm proposing,
even if we'd reduce my number from 25 to 15 ... I ... I'm not proposing that all of that go
to affordable housing. Right? So ... perhaps ... if others could agree, we could allocate
15% to give it a label ... I don't... affordable housing and, um ... uh ... you know, I don't
have the words, but investing in people, and there I'm thinking about SEATS users and
Aid to Agencies.
Payne/ If ... if we were going that route, I would want that to be a separate line item. That said...
5% for that. I wouldn't want it to be included with the affordable housing.
Mims / And a big discussion that the committee had was that we really felt that three bullets was
(both talking)
Payne/ ...was about it.
Mims/ ...the max. In terms of getting people to buy in.
Dobyns/ Matt, are we still in the work session?
Hayek/ We are!
Dobyns/ Um ... I think we just need to get the motion on the table. I ... um ... I'm not comfortable
with raising it above 10 %. Um ... in a perfect world, sure, but this is the reality of our
community. I think that ... I'm thinking of myself going out and selling this to the voters.
I think the optimal way of getting most people to vote for this, um, is not by, uh, raising it
above 10% at this time. I'm willing to consider the 50/40 switch to the roads, but um, I
would not vote for it. Um, and I just think we just need to ... move on with the discussion.
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Um, I think, uh, most of the discussion, Jim has been from you and I think the rest of us,
uh, just need to move on at this point.
Botchway/ Well, he ... I mean, he did bring up some salient points about the restoring the half
fares for SEATS, I mean ... we hadn't had the discussion previously and that's the first
time I've heard of it. I mean ... there's... a couple of social services' things here that we
could potentially use the money for. Tom, if you're telling me that the money that would
be freed up from having LOST would then possibly, if Council decided, not obviously
arbitrarily by one person, go towards those efforts, I'd feel a lot more comfortable
moving forward, but I mean ... we have, I mean, we haven't really talked about that
particular point.
Markus/ Yeah, the ... let's be clear. The funds that would be going to property tax relief are
reducing the property tax relief, so there's no ... there's no net, you know, that you can use
for other things at that point. I think to be perfectly honest to your public, if you're going
to use it for property tax relief, you know, you ... you reduce in kind that ... that rate.
Um... when you get to the issue of roads, that tends to be able to reduce the amount that
would have to come from other sources to do these things. Now granted, this is going to
step up the level of investment in roads, and Eleanor's comment about other items in the
infrastructure ... um ... let me just suggest something. It seems to me that, um, at least in
the Transit issue, um, I ... I wouldn't create another category. I think that's kind of risky
to do. But ... in, with the indulgence of the other members of the committee, it seems to
me under the roads and in the right -of -way, potentially we could add something that says
`and not less than 5% would be used, uh, for ... senior transportation issues.' And that
would deal with that SEATS issue that you're talking about. So you could get back to
that kind of an issue with ... if you're ... if you're seriously contemplating 50/40/10.
Hayek/ Are you suggesting add that somehow onto the ballot?
Markus/ I'm saying that that would be your commitment to doing that, and including that in
educational and campaign -types of issues.
Dobyns/ Because, Kingsley, I would agree, as far as it was my intention with this going forward,
one of the reasons I like this is that I think there's a whole laundry list of things that each
of us, um, would like to, um, help, you know, our community with. Paratransit
assistance, obviously, is something that, um, I would like to talk about, but by using this
tax to, um, free up the, you know, our obligation to our road infrastructure gives us the
opportunity then to use that money elsewhere, and it was my intention, but I didn't want
to sit there and have, you know, start a free - for -all where we talked about all those things
that we love.
Botchway/ Uh huh.
Dobyns/ But one of the sells here is that I would go ... one of the reasons for voting for this sales
tax is that it creates us an opportunity to keep within our fiscal responsibility and still use
money elsewhere, and paratransit is one thing that I was interested in. I guess I don't
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want to make any, you know, commitments. Uh, it'd be an understanding. I just don't
think it's appropriate at this table to sit there and talk about all those things that we love.
Um, because I mean there are... and I think that is more appropriate in later discussions
that would ensue from a successful voting from the electorate of this sales tax.
Hayek/ Yeah, I ... I agree. I think ... I don't want to ... I think it would be premature to commit to
restoring funding here or doing something there in connection with this vote. There are a
variety of needs. SEATS among them, but without a, you know, a ... a separate
consideration by the Council of that and a discussion with staff and the normal process, I
just don't think we can do that in connection with this, cause otherwise we're basically
holding this hostage to, you know, one or two or three issues, and I just don't think that's
a good route for us to go.
Botchway/ No, and I... and I'm okay with it. I just wanted to make sure that in the particular
language that we have, that we're not ... lack of a better word, shackling ourselves to
where we couldn't extend it to those different things. That's ... that was why I was glad
that Tom spoke to the fact of... our associated infrastructure, that could be somewhere in
Transit, however that kind of comes out. I just wanted to make sure that we weren't
(both talking)
Markus/ That's not what I said!
Botchway/ Okay. (several talking)
Markus/ To be clear.
Dobyns/ And in going forward, I don't want to micro -manage this and overly constrain future
discussions that we might have. I mean, that's why I'm excited about this! Is that, um,
we reduce our obligations, urn ... on the road infrastructure. That's a ... that's a large pot
of money, that was freed up to discuss other things. Um, and I look forward to all those
discussions.
Hayek/ Tom! Sorry!
Markus/ Well ... the way the ... the roads and right -of -way is currently drafted would not provide
for the use of the Transit. You'd have to suggest that that allocation language be
modified to some degree to say that `up to' or `at least 5' or however you wanted, could
be used for 5 %. My ... my only point in saying that is, it gets it under, I think, a more
appropriate category in terms of road, transportation, uh, ADA -types of, uh, ramps and
facilities of that sort, so that you could put that under there, but I think we'd have
to ... we'd have to craft a different statement under that. What I heard Rick talking about
was my comment about using ... what heretofore would have come out of property tax to
build roads and then potentially use that for Transit -types of issues. So, there's kind of
two options there, but the one I was just speaking to would require a change in the
language, in my opinion, and I'm hearing some reluctance to do that. From your fellow
Councilors.
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Mims/ But I think we all have to remember that every year the staff and the Council are going to
come back and develop a new budget. I mean, every year! And we have all the
remainder of our property tax revenue and any other fees and everything else to allocate
and make, you know, and prioritize as we look at spending, and you know, we each have
issues and causes for which we would like to have more money, and I think one of the
things, one of the big things that this is going to do, as it is currently written, is give us
some flexibility with some money, um ... you know ... this will be delegated... this will be
restricted how it's going based on the language, but it will certainly in some cases free up
some other money, and the other thing, you know, this doesn't mean that property taxes
will not go up in the next 10 years either. Um ... so ... you know, people have to keep that
in mind! This isn't freezing property taxes at today's level and giving a reduction, you
know, in that. We ... we still will probably (several talking) Yeah, it's going to slow it
down and ... and maybe some years we'll be able to decrease, like we have the last couple
years, hopefully, um, but I think it does get to some of the key issues, um, affordable
housing being one that I think people have recognized is one we've never been able to get
at at this level, and ... yet we've got flexibility to do other things in the future without, uh,
tying our hands too tight, not knowing what the future holds. So I'm ... I'm comfortable
with the current language that's been proposed.
Hayek/ So here is what I suggest. Um, we need ... we need to transition from work session to...
to the formal. Jim, I think the most the majority of Council would entertain is a switch
from 60/30 to 50/40. Urn ... and I think what I'm hearing is that people want to keep the
language of those three categories the same. Um, and I think there's open- mindedness to
discussing a lot of these other issues at...at future meetings, not connected with the sales
tax vote per se, um ... but that, you know, people, uh, do have opinions about SEATS and
about some of these other things that ... that we've discussed, but for today's purpose, I
think the decision we need you to make is ... if we switch from 60/30 to 50/40, could you
support that?
Payne/ Are you going to answer it?
Throgmorton/ I don't know!
Hayek/ Okay. So then why don't we do this.
Throgmorton/ Sorry, I don't mean to be, uh (both talking)
Hayek/ ...not suggesting you are! Yeah! Why ... why don't we do this, why don't we, uh, end
the work session. We'll go back into the formal. We'll put a motion, we'll put an agenda
item on the floor. And see...
Dobyns/ I would move we reconvene to the...
Hayek/ Well we don't have to. I think we can just end it and take up the formal (several talking)
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Hayek: Now we are officially back in formal meeting land.
Throgmorton: Can we take a short break so I can go to, you know... one of our nearby
restrooms?
Hayek: Oh yes! All right, so we are going to end the work session. Let's just take a
several minute break and then we will start up our formal.
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