Flood victims in newly purchased homes may not lose their down-payment assistance after all; city looks at using local-option sales tax revenue to help

City Hall is investigating the possibility of providing targeted help to flood victims who received state Jumpstart down-payment assistance on a new home and now have learned that the amount of assistance will be subtracted from any buyout payment on their old home.

The local Jumpstart office two weeks ago said 383 homeowners had received Jumpstart down-payment help to date at a cost of $8.8 million or about $23,000 per home.

Initially, it was unclear if that money would be considered a “duplication of benefits” subject to deduction from a homeowner’s buyout settlement. However, the down-payment assistance is now considered a duplication of benefits.

City Manager Jim Prosser brought up the issue at Wednesday evening’s council meeting as he and the City Council talked about how much money the city will need to buy out some 1,300 flood-damaged homes and other properties.

There seems a growing likelihood that the city will have enough money to do the job.

The Federal Emergency Management Agency will pay to buy out a first group of about 170 flood-damaged properties that sit in a proposed greenway area along the river.

Additionally, the state of Iowa has proposed setting aside $245 million of a latest round of $517 million in federal Community Development Block Grant funds for buyouts statewide. And the city has made a request for $175 million of that amount to pay help for buyouts of another 1,150 or so homes and other properties.

The city also is now collecting a 1-percent local-option sales tax, which could raise $80 million or more over five years for use in buyouts and other housing issues related to flood recovery.

It is from this last batch of money, the local-option sales tax revenue, that Prosser said the city is looking to draw to provide some relief to those who stand to essentially lose their Jumpstart down-payment assistance on a newly purchased home once the city buys out flood-damaged homes.

Prosser said such a use of sales-tax revenue was needed for those who bought a home not unlike the one they lost in the flood only to find that they do not have sufficient income to support mortgage payments on the newly purchased home.

The city has expected FEMA and CDBG money to carry much of the load on buyouts, but Prosser said the city always knew there would be funding “gaps” for which local-option sales tax revenue could be used.

Those who stand to lose their down-payment assistance may be one of those gaps, he said.

On Thursday, Prosser said his staff is still looking into how many properties might be involved and how much the city might be able to steer to help those who had gotten down-payment assistance.

Grass-roots group that engineered local-option sales tax triumph donates $24,183 in excess campaign funds to Habitat for Humanity

Vote Yes for Our Neighbors, the Cedar Rapids grass-roots effort that successfully campaigned to secure passage in early March of a 1-percent local-option sales, has donated its leftover campaign funds — $24,183 — to Cedar Valley Habitat for Humanity.

In less than a month, the Vote Yes campaign raised $85,343.46 from what Gary Ficken and Dale Todd, campaign co-chairmen, said Tuesday was a diverse group of donors.

It did not use $24,183 of the funds raised for the campaign.

Ficken said Vote Yes for Our Neighbors and those who donated to it acted with “housing, housing, housing in mind” for flood victims. It only made sense, then, he said, to use what was left of the campaign dollars on housing for flood victims. Habitat has agreed to use the money in that way, he said.

Ficken said the mix of donors supporting the five-year, local-option sales tax for flood-victim housing was tghe most diverse group of donors he’s ever seen in a campaign for anything. He said the support made the campaign “entertaining,” and he added the fact that the campaign lasted just three-and-half weeks didn’t hurt either.

From 71 applicants, nine are chosen: City Council names Local-Option Sales Tax Oversight Committee

The City Council on Monday named the nine members of the city’s Local-Option Sales Tax Oversight Committee, a group picked from 71 who had applied for the job.

The members are Markell Kuper, Elizabeth Hladky, Heather Schoonover, Charles Watkins, Jeff Palmer, Sandra Skelton, Gary Ficken, Jeffery Beer and Stephen Hammes.

The council will formerly appoint the committee members at its weekly Wednesday meeting, which falls on April 1, the day the one-percent local-option sales tax starts to be collected in the city.

The tax will be in place through June 30, 2014, and is expected to raise between $17 and $18 million a year for the city.

The oversight committee’s mission is to review how the council spends the tax revenue to make sure it is in accord with the March 3 referendum that put the tax in place.

Ninety percent of the money is to go to flood relief, and more specifically, to housing buyouts and rehabilitation. Ten percent is to be used for property-tax relief.

Ficken, a local business owner, led the citizen campaign, Vote Yes! For Our Neighbors, that promoted the local-option sales tax. Hammes, an accountant, led the city’s Twin Pines Golf Course Task Force that recommended in 2008 that the city not sell 20 acres of the 150-acre course for a commercial development.

Twenty finalists now become 24 for nine-member Local-Option Sales Tax Oversight Committee; neighborhood assn. v.p. drops out

The City Council pared the list of 71 applicants for the nine-member Local-Option Sales Tax Oversight Committee down to 20 last week, and on Monday, the council increase the list of finalists to 24.

Added to the list were Markell Kuper, Jerry Gillon, Patrick DePalma, Nick Cappussi and Joseph Michalec Sr., while Jon Galvin, vice president for the Northwest Neighbors Association, withdrew his name from the list.

Each council member reviewed the 71 applications and each ranked applicants one through 20, and then those rankings were thrown together to come up with the finalists.

Each of the 24 will have a 7-minute interview with council members on Tuesday, Wednesday or Thursday. The nine members will be in place by April 1, when the local-option sales tax is collected.

Those named previously are Jeffery Beer, Stephen Hammes; Gary Ficken; James Powers; Elizabeth Hladky; James Sattler; Patrick Courtney; Sandra Skelton; Robert Untiedt; B. Larry Johnson; Heather Schoonover; Don Boland; Richard McArtor; Jeff Palmer; Marvin Dale Hedgecoth; Oran Teat; Jon Galvin; John Gruca; W. Scott Jamieson; and Charles Watkins.

Council members picked the finalists, in part, with an eye to those who could bring expertise in accounting, finance, construction and disaster recovery.

Council members also said they were looking for representation from those affected by the flood.

The heads of neighborhood associations have pushed to get representatives from their groups on the oversight committee. Northwest Neighbors’ Galvin, though, has now dropped out of consideration.

Council members have emphasized that the Oversight Committee’s role is to check and see that the council has spent local-option sales tax revenue as the council said it would prior to the March 3 vote approving the tax.

Ninety percent of the revenue is to go to housing-related flood relief and 10 percent to property-tax relief.

The tax is expected to bring in $17 million to $18 million a year for five years and three months.

City Hall kindness has not always been easy to find for neighboring jurisdictions that dump on sales tax

City Hall kindness is new found when it comes to jurisdictions whose voters dump on local-option tax.

On Friday, Cedar Rapids Mayor Kay Halloran was out counting noses, trying to find a majority on her nine-member council to pass a resolution, oddly, for the city of Marion.

Halloran got the votes, and as a result, the city of Marion will get a second bite at the local-option sales tax apple.

Marion city officials had lobbied Halloran and other Cedar Rapids City Council members after voters in Marion turned down the local-option sales tax on Tuesday along with the cities of Hiawatha, Robins, Center Point and the Linn County portion of Walford.

At the same time, Cedar Rapids easily passed the tax, the revenue from which it will use primarily for flood relief over the next five years and three months.

Marion stood to take in about $3 million a year during the life of the tax, which is an amount city leaders in Marion weren’t reluctant to easily turn their backs on. Particularly when the measure was defeated by 183 votes out of 4,271 cast.

The Cedar Rapids council is in the middle of the affairs of its neighboring communities because of the demands of state’s local-option sales tax law. That law, as applied to Linn County, creates only two ways to get the question of a local-option sales tax on the ballot: the Cedar Rapids City Council, which represents a majority of residents in Linn County, must do it; or proponents of the tax can amass signatures on a petition that number at least 5 percent of the total who voted in the last general election.

Halloran said the decision was an easy call for her, and she pointed to the first days after the June flood when the city of Marion stepped in and provided public-safety dispatching services for Cedar Rapids.

“So the idea is, as a matter of comity and neighborliness, they help us when we need help, and we’ll help when they need help,” the mayor said.

It was quite a different story, though, back in 2001 when Cedar Rapids and nearly every jurisdiction in the county put the local-option sales tax in place, but unincorporated Linn County rejected the matter and stood to lose about $4 million a year.

No sooner had the election office closed down on election night and the county’s Farm Bureau members and the Linn County Board of Supervisors were on the phone to Cedar Rapids City Hall, hat in hand, asking the council to put the measure up for a revote out in the county.

The Cedar Rapids City Hall has three words for the request: Get some signatures.

“Calling for a vote without a petition drive would be a departure from previous practice of the Cedar Rapids council,” the City Council said back then. The council noted that the city’s 2001 vote on the sales tax for swimming pools was supported by a petition of 5,188 signatures and that an election the previous on a minor-league baseball stadium levy was backed by 3,361 signatures before the council put the matters on the ballot.

Then-Parks Commissioner Dale Todd was the most outspoken of the City Council members back then. Who was he, Todd asked, to decide that rural residents really didn’t mean to reject the tax when they voted that way Tuesday?

Then-Mayor Lee Clancey stressed the City Council’s tradition of asking for petitions from those interested in putting an issue on the ballot.

Clearly, her preference was that any revote come from a petition drive with a sufficient number of signatures to prompt a vote without the City Council’s help.

“The citizens in rural Linn County had an opportunity to vote on this two days ago,” Clancey said. “If there is strong sentiment among the citizens of Linn County that they would like to have this revote, I think it might be an appropriate way to go to have a petition.

“Then at least we would have a feeling for what folks really would like to do. The only thing we have right now is the majority of them declined the option tax.”

Within a few days, the Farm Bureau had rounded up 10,131 county residents, more than twice the number needed to put the measure back on the ballot. Voters in unincorporated Linn, Walker and Walford then returned to the polls and passed the tax.

On Friday, Marion city officials said what was said eight years ago: Marion voters didn’t understand the complicated, quirky tax.

Lon Pluckhahn, Marion’s city manager, said on Friday that Marion council members likely would not have requested a new vote if they and he hadn’t received many calls from citizens who said they had not understood the Tuesday vote.

“I’m glad to see it,” Pluckhahn said of the Cedar Rapids council decision to clear the way for another sales-tax vote. “We’ve worked hard to improve relations between the two cities.”

He noted an e-mail from one Cedar Rapids council member who said he would not have wanted to have to get Marion’s permission if Cedar Rapids wanted a new vote.

Seventy apply for nine slots on Oversight Committee to help City Council spend $90-plus million in sales tax funds

Seventy residents have applied to sit on City Hall’s nine-member Local-Option Sales Tax Oversight Committee.

Among the 70 is Gary Ficken, a local businessman who was co-chairman of Vote Yes! For Our Neighbors, the grass-roots group that the campaign to get the 1-percent sales tax passed on Tuesday.

The residents approved the ballot measure by a 59 percent to 41 percent margin.

Also on the list are some of leaders of the city’s flood-damaged neighborhoods, including Frank King and Jon Galvin, president and vice president of the Northwest Neighbors Association; Michael Richards, president of the Oak Hill Jackson Neighborhood Association; and Gregory Stokesberry, president of the South West Area Neighbors.

In a letter to City Hall on Friday, King, Richards, Stokesberry and Dianne Yanda, president of the Cedar Valley Neighborhood Association, said they were “demanding” that the mayor and City Council make sure that their neighborhoods are represented on the oversight committee.

“We believe that this is the best way to protect the interests and ensure the confidence of those Cedar Rapidians most egregiously affected by the flood,” the four neighborhood presidents said. They have joined in what they are calling the River Neighborhood Alliance.

The mayor will make the selections to the Oversight Committee with the advice and consent of her City Council colleagues. The decision will be made before April 1, when the sales tax begins to be collected. The collections extend through June 30, 2014.

According to the city, others among the 70 applicants are:

Andy Petersen, B. Larry Johnson, Bruce Vander Sanden, Charles Menge, Charles Watkins, David Clemens, David Hogan, David Mather, David West and Debra Dooley.

Don Boland, Donald Leonhart, Erick Skogman, Gregory Pollock, Heather Schoonover, James Nelson, James Powers, Jeff Beer, Jeff Palmer, Jeremy Cobert and John Gruca.

John Malone, Joseph Michalec, Kathi Lewis, Kathy Potts, Kevin Curl, Kevin Litten, Larry Berns, Lyle Broer, Marion Patterson, Markell Kuper, Marvin Dale Hedgecoth and Mauryne Simoens.

Michael Brunelli, Nancy Bruner, Nick Capussi, Richard McArtor, Richard Shoemaker, Robert Untiedt, Ruth Hart, Stephanie Feuss, Tamara Koolbeck, Thomas Haugen and W. Scott Jamieson.

James Sattler, James Young Sr., G. Richard Dirk Johnson, Leland Freie, Stephen Hammes, Terry Chostner, Linda Meanor, Susan Blome, Sandra Skelton, Jean Bell, Elizabeth Hladky, Patrick Courtney, William Overland, Charles Varnum, Jerry Gillon, Jody Lippmann and Thomas Zuber.

The last names of four others were not readable on the city’s list.

City of Cedar Rapids apt to see more than $1 million more a year in revenue from local-option sales tax

The city of Cedar Rapids could see more than $1 million more a year from the local-option sales tax than the $18 million it had expected before five cities in Linn County on Tuesday turned the tax down.

The estimate is based on a look at sales tax revenue for Linn County and for the five cities that rejected the tax on Tuesday, Marion, Hiawatha, Robins, Center Point and Walford.

In fiscal year 2008, sales for all of Linn County totaled $3.1 billion with the five cities and $2.68 billion when sales for the five cities are subtracted.

Without the five cities in the mix, Cedar Rapids will now get 72.94 percent of the local-option sales-tax revenue collected in Linn County, according to the Iowa Department of Revenue.

Using that new percentage and the revised sales figures, Cedar Rapids would take in about $19.3 million, up from the estimated $18 million that the city had expected to see if all the Linn jurisdictions had the tax in place.

Both Sue Vavroch, the city’s treasury operations manager, and Victoria Daniels, of the Iowa Department of Revenue on Wednesday urged caution with any revenue estimates because of the state of the economy.

In fact, the state agency, which collects the sales tax and then distributes it to the jurisdictions, bases its distributions on 95 percent of what it expects to collect in case fewer sales occur than expected.

Daniels said the agency would have new estimates for what the sales tax is apt to pay out in Linn County in about two weeks.

Each jurisdiction will get a larger share of the Linn County sales-tax pot, but the pot also will shrink some because the tax will not be collected or the revenue from it distributed to the five cities that voted against the tax on Tuesday.

For instance, the city of Cedar Rapids would have gotten 59.9 percent of the local-option sales tax revenue if all the jurisdictions in the county had the tax in place.

With the five cities turning the measure down, Cedar Rapids now will get 72.94. Unincorporated Linn County was to have gotten 16.33 percent of the total, and now will get 19.38 percent.

The tax was expected to have brought in about $30 million countywide. It will be less than that now that the five cities won’t collect the tax.

The Iowa Department of Revenue acknowledges that the collection system comes with a level of imprecision because some retailers mistakenly charge the extra 1-percent tax thinking it is in place throughout the county when, in fact, some places in the county do not have the tax in place.

Mayor and five possible mayoral candidates have one thing in common: All support the local-option sales tax

There have been local-option sales tax elections in years past in which elected officials and would-be elected officials have deferred to the voters and not expressed an opinion one way or another of the matter.

Not this time. At least not with Mayor Kay Halloran and the five people whose names to date are afloat as possible candidates for mayor in the November election.

Halloran is a strong supporter of the local-option sales tax, as are council members Monica Vernon and Brian Fagan, both who considered possible mayor candidates.

In favor, too, of the sales tax are three other possible mayor candidates: Ron Corbett, Gary Hinzman and Scott Olson.

In recent weeks, backers of Corbett conducted a private phone survey to check out what voters might be thinking about in this year’s upcoming mayoral race.

The Corbett backers asked those surveyed to pick from five possible candidates: Corbett, Fagan, Hinzman, Olson or Vernon.

Olson, a commercial Realtor who was narrowly defeated in his run for mayor in 2005, said last week that additional taxes like a local-option sales tax do have a “negative connotation.” But he said the unique circumstance of the flood recovery “overrides” that concern. “We have many people in need,” he said.

Olson said the local revenue raised by the sales tax will help those who own flood-damaged housing but, for one reason or another, don’t qualify for federal funds. He noted, too, that a citizen oversight committee will be in place to help direct how the sales tax money is spent.

Hinzman, director of the Sixth Judicial District Department of Correctional Services and former Cedar Rapids police chief, said last week that he normally doesn’t jump at a tax increase.

“But it makes better sense than having no concept as to how Cedar Rapids bails itself out of this disaster,” Hinzman said. He said the sales tax will help the city “recover and heal as a community.”

“Without the local-option sales tax, it will be extremely difficult to get beyond the past,” he said.

Corbett, vice president at trucking firm CRST International Inc., said passing the local-option sales tax will “definitely improve” the city’s chances to secure increased federal and state funding.

“Given the scale of our disaster, we can’t pretend that we can recover and redevelop without these funding sources,” said Corbett, past president of the Cedar Rapids Area Chamber of Commerce and former speaker of the Iowa House of Representatives.

He said the local-option sales tax will provide a temporary “window of opportunity” that will give the city time to work hard to recruit companies to the city to add jobs and rebuild the city’s tax base.

Halloran and Fagan bring Condition of the City speech downtown; city needs sales tax, they say; Alliant exec has few hopes for downtown steam

Mayor Kay Halloran and Brian Fagan, mayor pro tem, told an audience of about 300 at Friday’s Condition of the City speech that a 1-percent local sales tax will help the flood-damaged city rebuild.

“We need it,” Fagan said bluntly, when asked about Tuesday’s upcoming sales-tax vote during the noontime event in the Ballroom of the Crowne Plaza Five Seasons Hotel.

The annual event is sponsored by the League of Women Voters of Cedar Rapids/Marion.

To a question about the viability of a low-cost steam system in the downtown, Fagan turned to Eliot Protsch, Alliant Energy’s chief operating officer, in the crowd.

Protsch came to the microphone to say that there “may be” a solution to the steam issue for large users of the steam system, including the Quaker and Cargill plants. But he said it was “difficult” to see how steam, which had been provided by Alliant’s flood-damaged Sixth Street Generating Station, could be provided to the downtown “absent” a very large subsidy.

On the sales-tax question, Fagan said the estimated $18 million a year that the sales tax will bring to the city for five years and three months will allow the city to rebuild properly. Passing the sales tax also will show federal and state lawmakers, from whom the city is asking disaster help, that Cedar Rapids is doing its share to “support ourselves locally,” he said.

Mayor Halloran noted that the City Council will use the sales-tax revenue to buy out, repair and replace flood-damaged housing vital to the city’s work force.

“I don’t want residents of Cedar Rapids leaving (town),” Halloran said.

City Manager Jim Prosser, who joined the mayor and Fagan during the  question-answer period, said the city’s share of flood-related costs could come to $500 million even if the city and community secure substantial federal and state funds. “That’s the number,” he said.

In prepared remarks that reprised ones made at the City Council meeting Wednesday evening, Halloran said the city remains “open for business” despite the 2008 flood and its aftermath. She said the council promises to be “vigilant” with its budget and to work hard and deliver efficient government.

Halloran noted, too, that the she and the council continue to push the Iowa Legislature to stop its “draconian” ways and give Cedar Rapids and other cities the freedom to raise revenue from diverse sources. That will mean the city won’t need to be so heavily on property taxes, she said.

Halloran had Fagan focus his comments on the city’s flood-recovery effort, the costs of which are “staggering,” Fagan told the audience. He said the needs and costs don’t get better if they are ignored.

As he did on Wednesday evening, Fagan defended the City Council’s use of outside experts, who he said are helping guide the city through a community recovery that could cost $5 billion. The $5-million cost for the help, he said, is small in relation to the damage.

“Yes, we needed outside experts. Yes they are ‘consultants,’” said Fagan in acknowledging that it was issue for which the council has taken criticism.

Those in Friday’s audience also asked if the city can get too much public input before it acts and if lobbying efforts to obtain disaster relief have failed.

On the question of public input, Fagan said other communities that have gone through disasters have told Cedar Rapids that their ability to get projects started and finished had been hampered by not taking time up front to listen to the public.

Prosser said cities easily can make decisions about rebuilding, but he said the key is to make decisions that actually get implemented. Without adequate public input, they don’t, he said. He pointed to Tulsa, Okla., which he said we still trying to put a flood-protection system in place 25 years after its devastating flood.

Halloran, Fagan and Prosser all noted that much has been done and is being done to lobby the federal and state governments for disaster relief. But Prosser said the truth was that “this terrible disaster doesn’t have a simple solution.”

The League of Women Voters put Friday’s attendance at about 300, which is down from 359 people who attended a year ago.

From the podium, Halloran said the audience she was addressing looked “very intent.”

“I think they care what happens to the city, and as long as we continue to tell them what we are doing, they will recognize that we’re doing a very big job,” the mayor said.

Davenport’s Gluba says what Cedar Rapids City Hall says: city leaders are at least as smart as state legislators and cities need more financial freedom

Davenport Mayor Bill Gluba served in the Iowa Statehouse back in the 1970s, and this week he was recalling how back then was the time when Iowa cities secured “home rule.” Back then, Gluba, a Democrat, was among state lawmakers who also pushed to give Iowa cities what he called “financial home rule.”

At the time, though, state lawmakers wanted to keep a tight hold on the freedom local jurisdictions had to decide how to raise money to pay for local government, Gluba said. That’s still the case, he added.

“The people on the Cedar Rapids City Council, the mayor, the council members, they’re all as intelligent as anybody in Des Moines. I know them all in Des Moines.

“The elected officials in Cedar Rapids are responsible, caring, concerned citizens who all have the best interest at heart of the people of Cedar Rapids. And so we should have financial home rule across the board and let them make their own decisions.”

Don’t be misled: Gluba was really talking about himself and his own colleagues on the Davenport City Council as much as he was anybody at Cedar Rapids’ City Hall.

He was simply making the point that Cedar Rapids’ city leaders are in the same pickle as he thinks Davenport’s city leaders and many other city leaders are across Iowa.

He was making the point that the Cedar Rapids City Council and City Manager Jim Prosser have been trying to make for more than a year. That is, cities in Iowa are too dependent on property taxes to pay their bills, and that the Iowa Legislature needs to give cities freedom to raise revenue in other ways.

Cedar Rapids City Council members call it “revenue diversification.”

One of simplest ways to accomplish that might be to let cities charge an income-tax surcharge just like school districts in Iowa now can do.

But one thing state law now allows cities to do to diversify revenue is to pass a local-option sales tax.

Only six county-seat cities in all of Iowa – Iowa has 99 counties – do not have a local-option sales tax in place. Those are Cedar Rapids, Iowa City, Des Moines, Adel, Indianola and Ida Grove. Ida Grove puts it in place this summer.’

“I really can’t believe Cedar Rapids doesn’t have it,” Gluba says of the sales tax.

Cedar Rapids and other Linn County jurisdictions vote on the tax on March 3; Iowa City and other Johnson County jurisdictions on May 5.

Davenport’s mayor: Tuesday votes on local-option sales tax in Cedar Rapids and Davenport could help both cities’ work forces and help keep both from becoming second rate

Davenport Mayor Bill Gluba is a proponent of the 1-percent local-option sales tax that his city has had in place since 1988.

Sixty percent of the revenue goes there has gone for property-tax relief and 40 percent for infrastructure and capital improvement projects. It’s bringing in $15 million for Davenport a year.

Why Cedar Rapids, Iowa’s second largest city, hasn’t embraced the tax is a mystery to him, Gluba says. For Davenport, Iowa’s third largest city, the tax has been little short of a Godsend, he says.

In Gluba’s view, Cedar Rapids surely needs all the extra revenue it can get as it works to recover from the June 2008 flood.

“I really can’t believe Cedar Rapids doesn’t have it,” says Gluba of the local sales tax. “It’s one of the most progressive communities in the state. I hope they will listen to the leadership of your mayor and others who know the need to do this.

“You were devastated in the flood. … Do you want to become a second-rate city?”

At the same time, not all is well in Davenport even with the local-option sales tax.

Gluba is candid: Davenport’s population is stagnant and it’s getting older and poorer. Those are the facts, he says.

With that in mind, Davenport is sending its voters to the polls on Tuesday, too. Only Davenport is seeking to change the way the city distributes the $15 million in revenue the tax provides each year.

At the heart of the change is an issue that is one that Cedar Rapids leaders have been talking about and worrying about for a few years. That is, how does a city keep and attract talented workers and employers for the future? Cedar Rapids council members and community groups supporting the local-option tax talk about the need keep and attract a quality work force as part of the reason to rebuild the city better than ever.

In Davenport, community leaders think “Davenport Promise” is the answer and they are asking voters to steer up to 30 percent of the city’s annual local-option sales tax revenue to fund the program.

Davenport Promise’s promise is to pay the tuition of every Davenport student when they go to college or a vocational school. For students who enter the military, the program will provide $7,500 in mortgage assistance should the veteran return to live in Davenport.

The program is based on a privately funded one in Kalamazoo, Mich., which Gluba says has accomplished what Davenport is looking to do. It has attracted residents, increased the number of public school children, spurred home sales, increased home prices and helped the commercial and industrial sector.

Gluba calls the Davenport Promise an economic development tool. He says it is designed to attract talented workers to live in Davenport, have them raise their children in Davenport and help prepare their children for an education after high school.

Gluba says cities in Iowa provide incentives to businesses all the time to attract or keep them. He says Davenport Promise goes a step farther and looks to use incentives to attract the workers and the families. The goal is for everyone to know that Davenport is “The Education Community,” he says.

Davenport Promise, he adds, isn’t without organized opponents.

What is surprising, perhaps, is that a vote on such a fascinating idea is coming on Tuesday in a city as close as Davenport with little or no mention in Cedar Rapids. It’s an indication that Cedar Rapids is focused on its flood and recovering from it.

Pass the tax and get on with that job, Davenport’s Gluba encourages Cedar Rapids.

Whether you do or don’t, he adds, just know Davenport has Cedar Rapids in mind.

“Davenport, we’re trying to surpass Cedar Rapids,” Gluba says. “… If you don’t get on about it, you’re going to be the third largest city in the state rather than the second.”

Council ready to take yet another step to assure the distrustful

It looks like the City Council is sufficiently eager for voters to pass a local-option sales tax to help with flood recovery that the council will bite its collective tongue and again try to assure people who think the council can’t be trusted to spend the tax money correctly.

At its meeting this evening, the City Council will approve a resolution that specifies that 90 percent of the revenue from a local-option sales tax will be used “for the buyout, rehabilitation and relocation of flood-damaged housing.”

The tax is expected to generate about $18 million a year for the city in each of five years and three months that the tax will be in place should voters approve it on March 3.

Earlier, the council voted to use 90 percent of the tax revenue for flood relief and 10 percent for property-tax relief. The council-approve language on next Tuesday’s ballot reflects that earlier vote. Of the 90-percent of the tax revenue to be used for flood relief, the ballot language says the revenue will be used “for the acquisition and rehabilitation of flood damaged housing caused by the flooding of 2008, and matching funds for federal dollars to assist with flood recovery or flood protection.”

The language was designed to give the council some flexibility to use the money in the unlikely event that federal dollars, for instance, take care of more of the housing relief than the council now anticipates it will.

However, council critics were sure that meant the council would use the money in ways other than flood relief.

At last week’s council meeting, council member Justin Shields fumed about public distrust in the council and its intentions for the sales-tax revenue. At Shields’ insistence, the council, from member to member, assured that the money would be used to address the city’s couple-hundred million dollars in flood-damaged housing relief.

City Hall, then, issued a press release on Friday.

Earlier, the council voted to create a nine-member citizen oversight committee to oversee how sales-tax revenue would be spent.

Still people were questioning the council.

So tonight the council will pass a new resolution.

At last check, no one is calling for oversight committees and new resolutions to be passed by the Linn County Board of Supervisors or the city of Marion, for instance, both of which will also bring in plenty of tax-revenue should the ballot measure pass in those cities on Tuesday.

An unusual event: Recent state legislator Staed and even Downtown District’s Dusek stand up in public and praise City Council

Recent state legislator Art Staed of Cedar Rapids stood out in a crowd the other night for saying a seldom heard thing: That the mayor and City Council have been doing a great job.

It seems worth noting, because at events where the public gets a chance to speak –- week in, week out at City Council meetings, for instance -– the sentiment often is that the council and mayor are a bunch of bums.

“I don’t know where you’ve been,” Staed told a crowd of about 100 who had turned out Monday evening at a forum sponsored by The Gazette on the local-option sales tax.

He said the mayor and council had been “working their tails off for this city” ever since the flood eight months ago.

Staed had sat on his hands for a time, listening to others in the crowd beat up on City Hall and say they didn’t trust the City Council to spend the $18 million or so in the city’s share of annual sales-tax revenue responsibly.

Then he popped up to speak.

Staed said he couldn’t understand how people could show up at a public forum and essentially call elected city leaders a bunch of “liars.”

He said it was vital for the city to pass the sales tax to show the federal and state governments that the city is “doing something for ourselves.”

One suggestion had been that getting the Iowa Legislature to pass an income-tax surcharge for cities like school district can do would make for a less-regressive tax than a sales tax.

“That’s crazy, sitting around waiting for the Iowa Legislature to pass an income tax (surcharge),” Staed said.

Earlier at the forum, Peter Fisher, a University of Iowa professor or urban and regional planning and a researcher for the liberal Iowa Public Policy Project, said the regressive feature of the sales tax is really erased in the Cedar Rapids instance because so much of the tax is targeted for flood-damaged homes, nearly all of which had been owned by those with modest incomes. The tax also will go directly to creating jobs to renovate and replace the housing, Fisher said.

Fisher said he didn’t think the Iowa Legislature was likely to pass the income tax surcharge.

After Staed sat down the other night, Jon Dusek, president of Armstrong Development Co. and board member of the Downtown District, got up and agreed that the City Council had been working hard. At the same time, Dusek noted that he had sent the council a recent letter urging them not to raise property taxes by 14 percent as the city manager’s preliminary budget had proposed. The council has since sent the budget back for fixing.

Jeff Schott, former long-time Marion city manager and now program director at the University of Iowa’s Institute of Public Affairs, joined Fisher and others on the Monday evening panel. Schott noted that many Iowa cities have turned to a local-option sales tax because of a lack of ways to raise revenue other than property taxes.

The Gazette’s forum on the local-option sales tax issue brought out a nice crowd of 100 or so on a cold Monday night.

Those in attendance included people who see the tax as vital to help in the city of Cedar Rapids’ flood recovery and those who hate the tax.

Every jurisdiction in the county is voting on the tax on March 3 except four of them that already have the tax in place: Bertram, Central City, Coggon and Prairieburg.

Monday’s event actually was held over the Cedar Rapids border in Marion, though all the questions were about Cedar Rapids.

The crowd was sufficiently diverse that it drew healthy applause at some points from the tax haters and from the tax supporters.

A few words in new law on local-option sales tax hurt unincorporated Linn, help Marion, change little for Cedar Rapids

There is a small, little-noticed line in a special piece of state legislation, legislation that has permitted a fast track to the March 3 vote on a 1-percent local-option sales tax.

Should the sales tax pass throughout the county, that line in the new law will have a notable, negative dollar impact on the Linn County Board of Supervisors and the unincorporated area of Linn County for which it is responsible. And at the same time, the law change will have a nice positive impact for the city of Marion.

Other jurisdictions in the county will notice little difference.

The reason for the notable change in expected sales-tax revenue for the Linn supervisors and the city of Marion is a change in the data used in the formula dictating how the tax is dispensed within a county.

The formula is based on two things: each jurisdiction’s percentage of total property-tax revenue in the county and each jurisdiction’s percentage of total population in the county. One quarter of the weight of the formula is given to the former, three quarters to the latter.

State law has based the property-tax revenue on taxes collected in the years from 1983-1985. Every local-option sales tax in the state – only six county seat cities don’t have the tax — has its distribution formula based on that three-year period in the 1980s.

However, that three-year period of property-tax revenue was changed to 2005-2007 in the recent special legislation, steered through the Statehouse by Sen. Rob Hogg, D-Cedar Rapids.

Hogg on Monday said the intent of changing the years in the formula was to accurately reflect how communities have developed in the last 25 years.

In Linn County, what changed between 1983-85 and 2005-07 is that the metro-area cities have grown into parts of what had been unincorporated Linn County, and as a result, the relative property-tax revenue has shifted a bit to the city from the country.

This is why unincorporated Linn County fares less well in the new computation of the distribution formula and why fast-growing Marion has fared better.

The 1-percent local-option sales tax is expected to bring in about $30 million a year in all of Linn County if every jurisdiction in the county passes the tax on March 3.

If that happens, the Linn County Board of Supervisors and unincorporated Linn County will receive an estimated $4,899,000 a year. However, that is an amount $483,000 a year less than it would have been under the formula’s old computation. In total, that’s $2,535,750 less over the course of five years and three months. In that time, the tax will raise $25,719,750 for the unincorporated area of the county.

For Marion, the change will be in the other direction. Over five years and three months, the tax is expected to bring in $19,719,000 for Marion, an amount that is $306,000 a year more or $1,606,500 more over the life of the tax than it would have been using the earlier property-tax years in the distribution formula.

The city of Cedar Rapids now will receive 59.9 percent of the tax revenue – about $18 million — in the new formula and it would have received 59.79 percent if the 1980s property-tax revenue had been used.

With the new formula, unincorporated Linn County will receive 16.33 percent of the tax revenue, but it would have received 17.94 percent using the 1980s property-tax revenue figures, according to the Iowa Department of Revenue.

Marion now will obtain 12.52 percent of the revenue, up from 11.5 percent under the old formula while Hiawatha will get 3.04 percent up from 2.74 percent.

SEE this chart to see how each Linn jurisdiction will fare now and each would have fared under the old arrangement. http://gazetteonline.com/assets/pdf/LOST_1.pdf

Sen. Hogg said the city of Coralville, in particular, pushed for the change of the years used in the formula as a way to take into account the changes in development in the last 25 years. Johnson County jurisdictions vote on a sales tax in May.

Distrust of City Hall seems part of the subtext of approaching local-option sales tax vote

It’s probably fair to say it couldn’t be otherwise. That is, a distrust of the City Council and City Hall in general.

After all, the city is trying to come back from a multibillion-dollar disaster in the middle of a near national depression in a nation that has seen dozens of other natural disasters in the last year. Everybody and his or her brother is competing for vital federal disaster money.

Making it all better yesterday just is an impossible task.

Even so, a level of distrust of City Hall has become quite apparent as residents in the city prepare for a March 3 vote on a 1-percent local option sales tax.

All the major players in the city are on board behind the tax, the Cedar Rapids Area Chamber of Commerce, Hawkeye Labor Council, Downtown District, Next Generation Commission, the chairman of the Economic Planning and Redevelopment Corp. and on and on.

There’s also a well-represented coalition of people and groups out campaigning for passage of the tax as something called Vote YES! For Our Neighbors.

The supporters see the tax as vital local help for the city’s flood recovery, and they passage as sending a vital signal to state and federal lawmakers that the city is doing all it can itself to contribute to flood recovery.

Nonetheless, the Chamber of Commerce’s endorsement of the sales tax came with a caveat: The Chamber insisted on the creation of a community oversight committee to guide how City Hall would spend the tax revenue. Vote YES! For Our Neighbors did, too.

The suggestion had the feel that, without such oversight, City Hall might not do the right thing and, without it, City Hall might actually louse up the tax’s chances for passage.

The City Council enthusiastically created such an oversight committee, which will be in place by April 1, when the tax begins to be collected if it is passed March 3.

But the distrust doesn’t end there.

Just this past week, representatives of Vote YES? For Our Neighbors spoke to The Gazette’s editorial board as they, no doubt, have been speaking to other groups around the community. The representatives said they still wanted more from the City Council. They wanted the council to pass a binding resolution that specifically promised that all the sales-tax revenue intended for flood relief would be spent for flood relief, and specifically for the purchase and rehabilitation of flood-damaged housing.

No matter, that the City Council’s voice was featured in a front-page story in The Gazette on Monday in which members promised to spend the revenue intended for flood relief on flood-damaged housing. No matter, that the council, member after member, declared the same thing at its meeting on Wednesday evening. No matter that the council-approved language on the March ballot pretty explicitly says as much.

A distrust expressed during the public comment period of the Wednesday council meeting prompted council member Justin Shields to anger. He said he couldn’t understand how the council could make its message any clearer.

That it needed to make it clearer became apparent on Friday when City Hall’s communications operation issued a press release based on the council’s Wednesday meeting with the headline “City Council Confirms Housing Buyouts & Rehab Priority.”

The news release pointed out the precise language the council on Feb. 3 approved for the March 3 ballot. It states that the tax revenue will be spent this way:

– 10 percent for property tax relief.
– 90 percent for the acquisition and rehabilitation of flood damaged housing caused by the flood of 2008, and matching funds for federal flood dollars to assist with flood recovery or flood protection.

Nonetheless, look for the council to create a council resolution next week that it can vote on anyway.

Interestingly, no one fought harder than council members to get a change in Iowa law so that the council could set a local-option sales tax vote in expedited fashion on March 3 and so that the tax could begin to be collected in expedited fashion on April 1. The special state legislation also does not tie Cedar Rapids’ vote to the block of metro cities, which is usually the case in local-option votes.

Shields fumes over what he says are sales-tax vote distortions; Shey quotes Mark Twain

Council meetings begin with comments from the public, and last night a couple of citizens suggested that the council would use the $18 million in annual revenue from a local-option sales tax to balance its budget, not for flood relief.

Council member Justin Shields, of late, has had a short fuse for such misinformation because he says the city needs the sales-tax revenue to get back on its feet after the flood.

Shields tried to set the record straight, saying it would be a “crying shame” if the March 3 vote on a 1-percent local-option sales tax went down to defeat at the hands of statements from people who weren’t telling the truth.

Shields then went around the council table and asked each of his council colleagues to state what the council intended to do with 90 percent of the sales-tax revenue. Ten percent goes to property-tax relief.

To a person, each council member said the 90-percent of the money would go for flood-damaged housing, to buy it out or repair what can be fixed or to pay local matches for federal dollars used for buyouts or repair.

“All for housing, all the time,” council member Monica Vernon said.

When council member Pat Shey’s turn came to talk, Shey took particular offense to a citizen’s suggestion that the council spent only 25 minutes at a meeting deciding on the ballot language for the March 3 local-option tax vote. The meeting in question might have lasted 25 minutes, but Shey said he and his council colleagues have been thinking about flood recovery since June 17.

Shey, too, was concerned about misinformation and he paraphrased a piece of Mark Twain wisdom to make the point: “A rumor can be halfway around the world before the truth gets its shoes on.”

No to local-option sales tax vote March 3, says group called Cedar Rapids Tea Party

There has been quite an outpouring of organized support as the March 3 vote approaches on a 1-percent local-option sales tax.

The City Council supports it. There’s a local grass-roots group, Vote YES! For Our Neighbors. The Chamber of Commerce, Downtown District, Hawkeye Labor Council, the Next Generation Commission, the Convention and Visitors Bureau and on and on.

That surely doesn’t mean there aren’t opponents.

Tim Pugh, who identifies himself as a 32-year-old small business owner, is leading a group that calls itself Cedar Rapids Tea Party.

Pugh says he has about 75 people who have signed for the cause to date.

He handed out a flier at the Wednesday evening council meeting: “Now is NOT the time to get LOST,” the flier reads. LOST, of course, is local-option sales tax.

The 1-percent tax is expected to raise between $18 million and $24 million a year for five years and three months, with 90 percent going for flood relief and 10 percent for property tax relief. Cedar Rapids Tea Party says the portion going to property-tax relief is “pennies for Homeowners.”

The group wants the city to cut waste in its budget, not raise taxes. The group says the city already has “squandered” flood relief funds.

Carol Martin, the well-known critic of City Hall spending, also is organizing a network of sales-tax opponents separate from Tim Pugh’s group.

Two efforts focused on the same message is a good thing, Martin said Thursday.

Council not using L-word or F-word, but it seems to sense: big hike in property taxes might louse up sales tax

At last Thursday evening’s budget meeting, City Council member Pat Shey put it this way: “We’re going to ask a lot from citizens this year.”

Shey mentioned higher fees: The proposed new budget includes a 14-percent hike in the city utility bill — for water, waste water, storm sewer and garbage services; and the proposed budget includes a brand-new 2-percent fee on electric and natural gas bills.

And then Shey mentioned the 1-percent local-option sales tax, which the council is asking voters to approve on March 3.

With the fees and the sales tax, he didn’t think the public would take kindly to a 14-percent boost in property taxes at the same time.

That level of property-tax increase was what the city manager had proposed for the fiscal year beginning July 1.

But Shey said, maybe the question was this: “What can we do to trim services.”

He wasn’t alone among council members, who sent Casey Drew, the city’s finance director, City Manager Jim Prosser and the city government’s department heads back to the drawing board. In short, the message was this: go find some place to cut.

One inference from what Shey had said is the council has the ability to louse up passage of the local-option sales tax if it doesn’t take it easy on property taxes, which is the principal revenue source for local governments in Iowa.

And the council – and a host of local groups from the Cedar Rapids Area Chamber of Commerce to Hawkeye Labor Council – doesn’t want to louse up the prospects for the sales tax, the revenue from which they say the city needs as it works to recover from the 2008 flood.

The sales tax will raise between $18 million and $23 million a year for Cedar Rapids for five years and three months.

However, it’s still unclear what the City Council is going to cut out of its proposed budget.

No council member has mentioned the L word – layoffs – or the F word – furloughs.

Two-thirds of the city’s 1,400 employees are in bargaining units, and the council pretty much agreed that those bargaining units wouldn’t have any interest in opening up contract agreements that are set to pay those employees raises of 3.25 to 3.5 percent.

So council members Kris Gulick and Monica Vernon said the council may have to lower wages for the other third of employees outside of bargaining units. The part-time council’s annual salary is tied to the cost of living index, which went up 1.1 percent in the last year, and maybe that is where wage increases should be for others, Gulick and Vernon said.

The City Council has been at its budget-making business for a good month now. That’s where council members have been Thursday evenings, and a Tuesday evening or two.

In the process, the city government’s department heads have trooped in, stating needs, making their cases for how to better deliver services.

Until last Thursday, it had been an odd few weeks. Everyone was asking for more. No one, including council members, was talking about less.

But then, after all, it was a time of recovery from a natural disaster.

Last Thursday evening, all those department heads were back, sitting, shoulder to shoulder, and listening to what the council had to say.

Suddenly, the tone shifted.

Grass roots on sales tax is calling itself VOTE YES! For Our Neighbors

A grass-roots group – VOTE YES! For Our Neighbors — will stand in the flood-hit Time Check Neighborhood at 2 this afternoon to rally support for the 1-percent local-option sales tax. The tax measure is on a March 3 ballot.

Gary Ficken, a business owner and president of the Small Business Recovery Group, and Dale Todd, former City Council member and a former neighborhood president, are co-chairmen of the effort.

Friday morning, Ficken said VOTE YES! has broad support from the Cedar Rapids Area Chamber of Commerce, local labor unions, Access Iowa, the Next Generation Commission, an assortment of flood victims and others.

“It looks to be a pretty good cross section of folks,” Ficken says.

The central focus of the VOTE YES! campaign, he says, is getting flood victims back into permanent residences.

“We need to help get them back with their lives. We’ve got people hurting that we’ve got to take care of,” Ficken says.

No time is a good time for a new tax, but he said the sales tax is needed. It’s a proof that the local community is doing all it can for itself, which will help secure more federal and state dollars, he says.

Like Thursday’s endorsement of the sales tax from the Cedar Rapids Area Chamber of Commerce, VOTE YES! recommends that an oversight committee be created to help City Hall decide how to spend the revenue that comes from the tax. It is expected to generate $18 million to $23 million a year, city officials have estimated.

Ficken says the oversight committee would bring some consistency to the distribution of the sales tax revenue because the committee would be in place for the 5-year life of the tax, if the tax is passed. In that 5-year period, City Council members might change as city elections come and go.

Cedar Rapids Area Chamber of Commerce backs option sales tax; calls for oversight to help City Hall spend the money

The Cedar Rapids Area Chamber of Commerce’s board of directors on Thursday unanimously endorsed the 1-percent local-option sales tax on the March 3 ballot.

Allen Witt, chairman of the Chamber’s board, said about 30 board members participated in the vote. He also said the board had polled some of the 1,600 business members of the Chamber, and that the poll showed “strong” support for the tax.

In Cedar Rapids, the City Council will use 90 percent of the revenue from a local-option sales tax for flood recovery, 10 percent for property-tax relief if the measure passes..

“The Chamber understands this is part of our effort of neighbor helping neighbor and it is a critical time in our history,” Witt said last night.

He said the sales tax will provide revenue for the city’s acquisition of flood-damaged homes and for future flood protection. The tax also will help the city make the case for federal and state funds because it will show the city is doing what it can to help itself, he said.

The endorsement comes with a caveat: The Chamber board also calls for the creation of a community oversight committee to monitor the distribution of the sales tax revenue in Cedar Rapids if the tax passes.

Witt called that oversight committee a “strong recommendation,” though he noted that the state of Iowa collects the tax and distributes to the governing jurisdiction. In this instance, the city of Cedar Rapids would have to agree to such a community oversight arrangement.

Witt said the Chamber board also supports Vote Yes for Our Neighbors, a grass-roots group that has formed to promote the local-option sales tax in Cedar Rapids. Gary Ficken, a businessman who is president of the Small Business Recovery group, and Dale Todd, a former City Council member, are leading the grass-roots group.

Option sales tax: This time metro area not in it together

The new state legislation that has permitted an expedited referendum on a local-option sales tax in counties declared disaster areas also changes another thing.

In a typical local-option sales tax election, state law requires that cities whose borders touch vote as a bloc. The tax does not pass anywhere in the bloc if the total vote in the bloc is against it. One city might pass it in the bloc, but they don’t collect the tax if the bloc as a whole rejects the tax. However, if the bloc passes the tax but one city in the bloc rejects it, the city rejecting the tax doesn’t collect it and doesn’t get any of the revenue that the tax generates.

As a case in point, the cities of Marion and Robins passed a local-option sales tax in 2003 but the voting block of Cedar Rapids, Marion, Hiawatha and Robins as whole voted the tax down. The 2003 vote was the one in which the city of Cedar Rapids was trying to obtain local revenue for its Vision Iowa project, River Run. Some voters didn’t like the white-water kayak course that was part of the project.

This time – the March 3 vote – is different, reports Joel Gabrielson, of the Iowa Department of Revenue.

Gabrielson notes that the new, one-time piece of legislation eliminates voting blocs of contiguous cities.

The idea behind the legislation is to help disaster areas, and in particular, Cedar Rapids. Marion, Hiawatha and Robins, who are in the voting bloc, don’t need the money for disaster recovery.

Gabrielson notes that consumers might get a little confused if they pay the tax in Cedar Rapids and drive a block and don’t pay it in Marion, which has been one reason to have metro cities vote together.

City Hall critic Carol Martin admits opposing local-option tax is “tricky”

Carol Martin, the best-known critic of City Council spending over many years now, is no longer a constant presence at City Council meetings. But she did show up at the noon on Tuesday to hear for herself the council case for a local-option sales tax.

Without pause, the council said the city needed the extra tax revenue to help meet hundreds of millions of dollars in unmet needs associated with flood recovery. Property taxes, the city’s principal revenue source, can’t carry a bigger load, and federal and state funds aren’t going to be enough, council members said.

Council members, too, asked residents to consider the 1-percent sales tax, not as a new imposition, but rather as another way for residents to give as they already have for flood recovery and for the good of the whole community.

“As a city, I do believe there is an obligation that we have to work with the community and to help our neighbors as we did during the flood — with dignity, determination and discipline,” council member Brian Fagan said.

It is an argument that Martin appreciates.

“It’s kind of a tricky situation because no one wants to have flood victims suffer any more,” Martin said a few hours after Tuesday’s noon meeting.

Nonetheless, by late Tuesday afternoon, she was already mobilizing her network of City Hall skeptics to oppose the March 3 vote on the 1-percent sales tax.

Martin said she feared that the sales tax revenue – between $18 million and $23 million a year, city officials estimate – would not get to flood victims, and in any event, she said the length of the taxing period – 5 years and 3 months – was too long.

Martin also noted layoffs in the city and she said it was a particularly tough time to impose a new tax. She said she might feel differently if she thought the city was watching its spending.

“But they keep spending money like it’s going out of style,” Martin said. “Show me how you’re being frugal with our money, especially now.”