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Archive for March, 2008|Monthly archive page

City Hall pushes its pretty face: Makes pitch to keep its top Aaa bond rating

In City Hall on March 31, 2008 at 11:03 pm

So this is how a piece of the world of big finance works:

Early Monday afternoon, many of the top City Hall faces were sitting around the big table in the City Council chambers talking via a conference call and Web cast to Jeannie Iseman, an analyst in Chicago with Moody’s Investors Service.

The city was providing Iseman with key economic details about the city of Cedar Rapids and about the city’s government as City Hall readies to sell about $24 million in general obligation bonds to obtain money to make improvements to the city’s infrastructure.

The city wants Moody’s to once again give the city its top bond rating, Aaa, which the city has enjoyed for more than 30 years and which translates into lower interest payments.

In Monday’s session, Iseman mostly listened, but she did make some comments:

She called it “very favorable” that, according to figures from the Linn County Recorder, the city has had only 39 housing foreclosures this year as of March 28.

In fact, Sue Vavroch, the city’s treasury manager, noted that foreclosures had been dropping here: there were 353 in 2005; 251 in 2006; and 116 in 2007.

Scott Labus, the city assessor, noted the market value of Cedar Rapids residential property has done up 2.5 percent and that home sales here in 2007 exceeded the numbers in 2005 and 2006.

Iseman also asked about the city’s 10-year financial plan, wondering how much the city would get done with cash on hand and how much with debt. Most of the money for the capital improvements in the plan will be paid for with federal and state dollars and local bond debt, Casey Drew, the city’s finance director, answered.

Iseman wondered if the city anticipated that its property-tax revenue would continue to come from the same mix of residential, commercial and industrial property.

City Manager Jim Prosser said Cedar Rapids had a good mix of property types, with one third of the value in the commercial-industrial sectors and two thirds in residential property.

Residential property owners, however, will pay tax on only 44 percent of the value of their property, so the city gets only 49 percent of its taxes from that sector, Drew noted.

Iseman also noted the increase of 11.4 percent in city utility rates and the significant amount of renovation and upgrading at the city water and waste-water plants. She wondered if the city was facing any federal or state environmental orders  that  would require much deeper spending in upcoming years. The city was not, Prosser and Pat Ball, the city’s utilities director, answered.

The city’s Drew noted that the city, which is self-insured, has cash on hand to cover its liability.

Iseman also asked about the city’s labor contracts. All are in the first year of three-year agreements, with wages slated to increase by 3.25 to 3.5 percent each year of the agreement, Drew said.

Prosser and Drew both noted that the tough winter has added overtime and other unexpected costs to the city’s current operating budget, but Drew noted that the city sets aside $1 million in a road-use reserve fund for just such times.

At the close of the session, Iseman said Moody’s likely would give its bond rating to the city by week’s end.

The city’s bond sale is slated for April 9.

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Boondoggle buses headed to Charles Bacon, veteran salvage yard operator in Hopkinton

In City Hall on March 31, 2008 at 8:28 pm

Bidding turned fast and furious in the final couple hours Monday morning at the online auction GovDeals.com as bidders competed to buy nine, little-used electric buses from the city of Cedar Rapids.

The buses are a testament to a $10-million experiment, which was funded in large part by the federal government and which turned into nothing less than a boondoggle.

Bidding  for the nine buses closed at noon Iowa time on Monday after 24 bids.

The winning bid: $30,000 for all nine buses.

The winner: Charles Bacon, owner of C.J. Bacon and Sons, a salvage and recycling operation with convenience store on Highway 38 at Hopkinton in Delaware County.

Bacon on Monday said he will tear the buses apart for salvage.

“I’ve got a big shear on a crane. I can whip one of those buses apart in about 30 minutes,” he said.

Bacon said he wasn’t sure how much he might make on the purchase, which averages $3,333 per bus.

He noted that the buses weigh 12 to 13 tons each, which he figures will mean that he can extract a minimum of $4,000 to $5,000 a bus in salvageable stainless steel, aluminum and steel. Five of the nine electric buses are hybrids with diesel generators, which will bring some money, too, he said.

There’s also plenty of copper, he added, and he said he might get $5,000 alone from the aluminum wheels.

“I’ve been in the scrap business for 30 to 40 years,” he explained.

Bacon said he will be at City Hall on Tuesday with his check. He will haul the buses up to his salvage yard via flatbed semi-trailer truck.

Last Friday, the bidding on the online auction site for government property, GovDeals.com, had the price for the nine buses sitting at $18,000 after nine bids.

At 9 a.m. Monday, the bid amount had risen to $22,000, and Bacon said it went up by $1,000 increments until the deadline of noon.

He said bidders register with computer names, and as near as he could tell, he said he was bidding against an Anamosa salvage operator and a California company that might actually have wanted to use the buses.

Bacon was tickled to have prevailed at $30,000, a bid that came with a little last-minute excitement.

The last bid Bacon submitted as the bids bumped up by $1,000 a bid was $29,000. But earlier, he had submitted an automatic ceiling bid of $30,000. Apparently, someone competing against him bid $30,000 as the bidding closed, but Bacon’s automatic bid of $30,000 placed earlier was the one that won. It was in place first, said Judy Lehman, the city’s purchasing services manager.

Lehman was pleased at the bidding outcome, noting that the city was prepared to take anything above $10,000 for the nine buses.

“We did pretty well,” she said.

The nine buses, none with more than 25,000 miles on it, have been sitting in a fenced-in lot in Cedar Rapids for the last few years while the city of Cedar Rapids has lobbied the Federal Transit Administration to get permission to unload them. The city’s electric-bus experiment, launched in 1996, finally died in early 2005. Many of the buses had been parked well before that.

Recently, the FTA granted  permission for the city to sell the buses.

New, the nine buses cost $2.6 million, and the city’s electric-bus program received another $7.5 million in federal funds to operate it.

Alliant Energy seems a good guy in the birth, death and new life of the Osada building

In Alliant Energy, Brian Fagan, Chuck Wieneke, City Hall, Jerry McGrane, Justin Shields, Kris Gulick, Monica Vernon, Pat Shey, Tom Podzimek, Viewpoint on March 30, 2008 at 9:19 pm

Last week’s City Council meeting began with a talk about City Hall taking yet another stab at streamlining how it does business with developers and builders.

Making the presentation to the council was John Helbling, an Alliant Energy expert on a management efficiency process known as LEAN.

Once again, as in years passed, Alliant is loaning Helbling’s services to the city free of charge.

                                                      **********

Deeper into last week’s meeting, the subject turned to the failed low-income housing project, Osada.

Down the line on the City Council, council members – except for Chuck Wieneke — enthusiastically endorsed a rescue plan for the empty, visible, five-story building. The plan is designed to provide some local incentives that developer/builder Fred Timko says he needs to convert the 67 loft apartments in the building into 58 loft condominiums.

For Wieneke’s part, he said he didn’t like the creation of a $700,000 pool of money — which will be funded from new property taxes based on Timko’s renovation investment — so that Timko can offer breaks for those buying condominiums ranging in price from $100,000 to $200,000.

The other council members said the incentive made sense because Timko’s venture comes with no little risk to him and comes with great potential for the city if the Osada building doesn’t sit empty.

Wieneke continued on, saying that Alliant Energy should be paying to create some or all of the $700,000 pool of money, not the city. By Wieneke’s count, the city was paying too much and Alliant was making out too well.

No one on the council agreed with him.

In the two days after the council meeting, it seemed to become clear that no one is lining their pockets with profits among those who previously invested in the Osada project.

Both Mark Thompson, legal counsel for the Iowa Finance Authority, and Tom Aller, president of Interstate Light and Power Co., Alliant’s energy subsidiary in Iowa and Minnesota, both assured as much.

The road to here began back in the 1990s when Cedar Rapids community leaders wanted to create more low-income housing, and an entity existed, the MidAmerica Housing Partnership (MAHP), to manage it once it was created.

As continues to be the case today, one way to create financing for low-income housing projects is through federal tax credits. A private entity puts up money for a low-income project and recoups its money by paying less tax using tax credits.

Using that tact, what now is known as Alliant Energy Investments provided about $3 million to help pay for the renovation that turned an old empty warehouse into the Osada low-income loft apartments, explained Alliant’s Aller. Alliant then received federal tax credits to reduce its federal tax bill over time as a way to recoup what it has spent on Osada.

What is known now is that the Osada idea didn’t work out. Last fall, MAHP failed, and though some of its properties were kept alive by a new entity, the Affordable Housing Network, the Osada project did not survive. It needed to many repairs and it had too little cash flow to pay its bills.

The community’s choices for Osada were two: let it go bankrupt and let the Iowa Finance Authority get stuck with it; or figure out a way to redevelop it.

 The Timko proposal then emerged for him to buy the building for $3.1 million – it’s appraised at $3.3 million, council members said last week – and for Timko then to pay to renovate it for $3.5 million more.

But who gets the $3.1 million?

The Iowa Finance Authority’s Thompson reported last week that the authority, which holds the mortgage on the Osada building, is owed about $1.9 million on the project with another $200,000 forgivable loan also in question.

By the way, Thompson added that no deal has been inked yet to sell the Osada building to Timko, who is part of an entity called BPI -GRR LLC.

Meanwhile, Alliant’s Aller explained that the federal requirements on some of the Alliant tax credits used to pay for Osada architectural work have been satisfied. However, the strings connected to other of the tax credits involved in the low-income housing project have not been. The U.S. Internal Revenue Service will want money from Alliant now that Osada has failed, he said.

In proposed numbers used by council member Wieneke at last week’s council meeting, Wieneke said the Iowa Finance Authority will receive $1.6 million, Alliant $1.5 million and the city nothing from Timko’s $3.1-million purchase price.

The Authority’s Thompson said he hadn’t given up on getting $1.9 million and Alliant’s Aller said Alliant, at the end of the day, really doesn’t get anything.

 Aller said whatever comes Alliant’s way in the sale to Timko is headed to the IRS and elsewhere. There’s also $100,000 going to helping-service agency Four Oaks for stepping in to manage and oversee the breakup of MAHP properties; $200,000 to the city for low-income housing; and there are vendors who provided service to the property that need to be paid.

If the IRS takes less rather than more, Aller said Alliant will send the money back to the city or the community.

“And when that distribution of money is done,” he added, “there will be zero dollars left for anybody, including Alliant.”

Council member Wieneke last week focused on the investment made through City Hall in the past for the Osada project.

According to a tally rounded up by the city’s Community Development Department, the city steered just over $1 million to the Osada project. About $380,000 of that amount was federal dollars from the U.S. Department of Housing and Urban Development that passes through the city, and $225,000 was a revitalization tax exemption. A total of $350,000 was an outright grant of city tax dollars.

The Iowa Finance Authority’s Thompson noted that the authority has other outstanding debt from the former MAHP that it will have to eat along with what it won’t get in the Timko deal.

As for Aller, Alliant is a publicly-traded private company that doesn’t rush to say it might have lost money. In truth, the final tally of who lost what won’t be known for months if not a year.

Council member Pat Shey, a bank officer who recused himself from debate and voting on the Timko proposal because his bank is providing financing to Timko, said late last week he’s sure Alliant isn’t profiting. The last thing Alliant needs is a headline saying it made money off the failed Osada project, Shey said.

Council member Brian Fagan was quick to step in last week to disagree when Wieneke suggested that Alliant wasn’t doing enough.

Fagan said the city didn’t want to send any signal that might discourage the use of federal tax credits in the future to help increase the low-income housing stock in the city.

Council member Monica Vernon said it was important to leave an accurate perception about Alliant, which she said has done much good as a “major player in this community.”

The city has new projects on the horizon, she added, and private-sector support from the likes of Alliant is going to matter.

Both Vernon and Justin Shields both applauded the Timko redevelopment plan for the Osada building, both wondering who would have done it if not him.

“A lot of people had the chance to line up,” Shields said, adding the city even could have bought the property. “Mr. Timko put up his money.”

Council member Jerry McGrane called the coming Bottleworks condominiums “a great opportunity to rebuild that neighborhood.”

Council member Kris Gulick said the city incentives will allow Timko to make a reasonable return on investment for a risky venture.

Council member Tom Podzimek called the condominium project a testament to the “smart growth” that the council is promoting. City snow plows must travel more than a mile to pass 58 households in a typical city neighborhood; here those 58 households will be in one place, he said as he imagined the inexpensive cost to deliver that the plowing service.

Don’t get Alliant’s Aller wrong: He said the company’s initial role in the Osada project wasn’t an outright gift of money. The company expected to cover its upfront payment over time with tax credits.

“But this project would never have happened unless the old IES Co. (now a part of Alliant) hadn’t put up the $3 million to begin with,” Aller said. “And at the time, we were trying to be a good citizen. Everybody wanted to do the project. The vice president (Al Gore) was there as I recall.

“But the point is sometimes projects don’t work.”

Upshot of Humane Society police raid still unknown: jobless claim reveals unhappy former employee

In Humane Society, Marion on March 30, 2008 at 12:54 am

The details on last week’s evening-time police raid at the Cedar Valley Humane Society’s animal shelter at 7411 Mount Vernon Rd. east of Cedar Rapids are yet to be told.

 The Marion Police Department says it seized billing records to see if the shelter has billed its customers, which include Linn County and several cities in the county, too much.

A Linn County judge now has sealed the court-approved search warrant used in the raid, which likely spells out who and what prompted the police to turn up at a place that cares for 3,000 dogs and cats a year.

What is known is what Harry Daugherty, Marion police chief, has said: His department got a call about the shelter about six weeks ago from an unnamed person.

Among what is known, too, is that two former shelter employees, Joy Jager and Sarah Young, both have filed lawsuits against the shelter in the last couple months. Both are seeking compensation they say is due them, says Wilford Stone, a Cedar Rapids attorney and Humane Society Board member who is representing the Humane Society.

Another  little window into the goings-on at the shelter is revealed in a ruling by the Iowa Employment Appeal Board in January.

In the ruling, the employment board ruled by a vote of 2-1 that former shelter employee Joy Jager, of Ryan, Iowa, was not entitled to jobless benefits from the shelter. The board majority ruled that Jager quit her job as a full-time receptionist at the shelter on Sept. 26 after working at the shelter two years. The board majority said she had not been entitled to jobless benefits, and ordered her to return $1,676 in benefits she had received.

An administrative law judge earlier had reached the same conclusion.

In the ruling of Judge Devon Lewis last November, she states:

Jager was upset at work on Sept. 26, 2007, and announced to shelter volunteer and board member Doug Fuller that she was going to resign. Jager was upset that the shelter’s co-directors, Sandy LeBaw and Susan Manson, were away attending a conference when Jager thought one should have stayed behind at the shelter. Jager expressed other complaints about management in the few months preceding that and had twice written resignation letters.

Fuller urged Jager to wait until the two co-directors returned so she could iron out differences with them. About 15 minutes later, LaBaw called and told Fuller to accept Jager’s resignation and to escort her from the shelter. LaBaw also called Jager herself to tell her to turn in her keys.

Judge Lewis concluded that Jager voluntarily quit without good cause attributable to the employer and was not discharged.

“The issue in this case of whether claimant (Jager) quit or was fired is a matter of credibility. Since claimant had twice before submitted resignations and had never been advised her job was in jeopardy but had been asked repeatedly to stay, employer’s version of the events is more reliable,” the judge wrote.

The judge continued: “Claimant’s dissatisfaction that both supervisors were absent at one time and her dislike of various management decisions were not good cause reasons attributable to the employer for leaving. Benefits are denied.”

Jager appealed to the three-member Employment Appeal Board.

In a Jan. 14, 2008, ruling, Appeal Board members Elizabeth Seiser and Mary Ann Spicer agreed with the administrative law judge while member John Peno dissented.

Peno called the case “a close call.”

However, he said he believed Jager was only thinking of quitting, and he cites Jager’s fellow employee, Sarah Young, who testified on Jager’s behalf. Young testified that she believed Jager had been discharged.

Peno also said Jager quit for good cause if she quit. He noted that she had testified that she was concerned about shelter activities, which Jager said included sick cats being put up for adoption, incomplete medical records and short staffing.

A call to Jager was not returned.

Stamats Communications tells City Hall to stay away; build Intermodal Transit Facility elsewhere

In City Hall, Pat Shey, Paul Pate on March 29, 2008 at 10:52 pm

Some $9 million in federal funds for a new downtown Intermodal Transit Facility has been in the city wallet for half a decade now.

It’s become a long story.

In the latest chapter, a City Hall task force is working to find a new site for the facility, which as now planned will become the new home to the city’s bus depot, now at the Ground Transportation Center, and also home to the Neighborhood Transit Service vans, LIFTs buses and the occasional intercity bus.

In early February, the task force and then the City Council identified four downtown sites that seemed best bets for housing the new Intermodal.

Three of the four are privately owned: the 400 block of Fourth Avenue SE, which houses TrueNorth Companies; the 500 block of Sixth Avenue SE across from the U.S. Post Office; and the 300 block of Ninth Avenue SE, occupied by Loftus Distributing Co.

The fourth location, the most distant from downtown, is the site of the former Iowa Iron Works, now owned by the city, in the 400 block of 12th Avenue SE.

Part of the option in the 500 block of Sixth Avenue SE is owned by Stamats Communications Inc., 615 Fifth St. SE.

And in a pointed letter to City Hall on March 26, Guy Wendler, president/CEO of Stamats, said the city should shop elsewhere.

“In sum, we are not interested in considering the sale of the subject property and are quite concerned that it is even being considered given the expected adverse impact on our business,” Wendler writes.

In the letter, he spells out five specific reasons why Stamats would not want to sell and why it would harm the firm if such a thing happened. Among his points:

–Stamats recently demolished an old building to create a landscaped parking area for employees. Giving the lot up would make it harder to retain and recruit employees

— Stamats has made a substantial investment in its headquarters building, 615 Fifth St. SE, and also has improved the third and fourth floors of the Theatre Cedar Rapids Building in downtown where the company leases space.

— Stamats, which provides marketing products for colleges and universities,  has created a “campus-wide” design at its headquarters to help make clients feel comfortable when they visit.

“For them to come here and enter a building across the street from a busy bus station would not leave them with the type of impression we feel is important for keeping their business,” Wendler says.

Prompting the letter from Stamats’ Wendler was a recent visit from Sam Shea, the city’s long-range planning coordinator and the head of the downtown task force on the Intermodal.

Shea is scheduled to speak to the City Council at its work session on Wednesday evening to update them on the Intermodal.

In truth, Shea is in the midst of a complicated assignment, which he has said means that the construction of the Intermodal is still a couple years away.

Firstly, City Hall must find a site. Then it must win the backing of the Federal Transit Administration to move the site of the Intermodal from where it had been slated to be built. And it also must win the federal agency’s blessing to move the existing bus depot, which the agency help fund 25 years ago.

A quick little history:

The Intermodal first was slated to be built across First Avenue East from the U.S. Cellular Center. The city has design plans.

But the plans changed, and City Hall during Mayor Paul Pate’s administration opted to put the facility in 600 block of Second Street SE. The federal transit agency ultimately agreed. The city bought the land and paid for the design drawings.

Last fall, though, the new City Council pulled the plug on a second idea after council member Pat Shey said it didn’t make sense to build it so near the existing bus depot and after a Twin Cities consultant said the building’s 500-space parking ramp as well as its transit component would both be obsolete the day the facility opened.

That changed everything. The idea now is to incorporate the existing Ground Transportation Center bus depot in the new facility, convert the bus depot to something else and to forego the parking-ramp component of what is built.

The City Council also would love to identify a private partner who might be willing to incorporate some kind of mixed use – offices, residential units, for instance – into the new facility.

Final chapter in city’s electric-bus boondoggle coming to an end on GovDeals.com

In City Hall on March 28, 2008 at 5:24 pm

 The city’s grand experiment with electric-powered buses went bust several years ago, and a line of nine mothballed buses has been sitting in a fenced-in lot along railroad tracks for a few years now.

At the same time, the city has worried that it might have to pay the Federal Transit Administration back about $2 million, which was the amount the federal government contributed to the $2.65-million cost of the buses.

As Brad DeBrower, the city’s transit manager since last summer has said, the FTA expects that buses it helps to purchase to run at least 12 years and log 500,000 miles.

The nine electric buses, which were purchased between 1995 and 1998, have mileage totals ranging from 6,601, 8,794 and 9,013 miles on the low end and 24,730 miles on the high end, DeBrower has said.

“Scary low” is the way he has put it.

This week, though, DeBrower was happy to report that the FTA has concluded that the city cannot be faulted for its electric bus experiment and that technology had passed the effort by.

The FTA also now has given the city permission to unload the nine buses, which the city is in the process of doing.

Specifically, the city uses an ebay-like, online auction system for government property called GovDeals.com.

And by noon Friday, that city had received nine bids, the high of which was $18,000 for all nine buses.

If you want the latest, go to the city’s Web page, hit departments, then purchasing services, and see the GovDeals item there.

Judy Lehman, the city’s purchasing services manager, reports that the city started the bidding at $10,000 and will take anything above that for the buses.

“They have to pick them up,” she emphasizes.

The genesis for the city’s experiment with electric buses came back in 1993. It was launched in 1996 as the Cedar Rapids Electric Transportation Consortium, with the city, IES Industries Inc., Westinghouse Electric Corp. and Blue Bird Corp, all signed on.

Two federal grants totaling $7.5 million helped finance the project to see if electric batteries could fuel a fleet of buses in a place with cold winters.

The technology, it turned out, failed.

In a Gazette story last summer, Fred Rossow, a senior electrical engineer at Rockwell Collins who worked for the city and managed the city’s electric bus program from 1998 to early 2005, said  the chief problem with the buses was with an electronic drive system that never worked correctly. The batteries were a problem, too, as was the battery pack, which weighed two tons and could not be easily changed out, Rossow said.

News on troubled $6 million investment may come in early May; another $2 million problem murkier

In Cedar Rapids/Linn County Solid Waste Agency, City Hall on March 28, 2008 at 2:41 pm

The finance committee of the Cedar Rapids/Linn County Solid Waste Agency Board of Directors huddled in closed session again this week as it did last week to discuss the agency’s $6 million investment in Rhinebridge LLC, a short-term investment type called “commercial paper.”

The committee took no action.

Rhinebridge LLC, a European investment product created just last summer, signaled it was having difficulty in September before it went into default in October. It had too few assets, many backed by problem mortgages,  to pay off those who had invested in it.

The city of Cedar Rapids, which handles investments of solid waste agency funds, invested $5.921 million of agency funds in Rhinebridge LLC in July through a Wells Fargo brokerage. The expectation was that the fund would pay out $6 million to the agency 90 days later, on Oct. 24. But the fund couldn’t.

The investment’s rate of return of 5.4 percent was slightly better than the 5 to 5.3 percent that could have been earned with certificates of deposit, Sue Vavroch, the city’s treasury operations manager, has reported earlier.

The solid waste agency’s finance committee has met twice now in two weeks and has gone into closed session because the subject matter included possible litigation involving the investment, the committee said.

Subsequent to this week’s meeting, Vavroch said the current schedule calls for an auction of Rhinebridge assets in early May. She noted that Deloitte & Touche and Goldman Sachs were involved in the oversight of the assets and the auction.

As now planned, Vavroch said the solid waste agency’s finance committee and board will pick from two options prior to the auction of the Rhinebridge LLC assets. In one option, the agency would receive cash and would invest it in a Goldman Sachs fund. In a second option, the agency would accept a cash settlement and invest it as it chooses.

Vavroch said it’s too soon to know which option is better.

She got an update on the Rhinebridge LLC investment via an international conference call involving investors from around the world, she said.

Vavroch has noted that the solid waste agency’s investment is included among a “secured credit group,” which she has said is “most senior” status among the fund’s investors.

She noted, too, this week that more than $1 billion in investments are involved in that secured credit group.

In a second matter, Vavroch said the city has far less information about a second investment in commercial paper, a $2 million investment of city funds in something called Golden Key Ltd. That investment defaulted without paying what it owed the city in December.

Vavroch has noted that state law allows cities to invest in commercial paper, a form of short-term debt, and that other cities in Iowa have done so. Des Moines’ finance director has noted recently that the city of Des Moines has about 4 percent of its $186-million investment portfolio tied up in commercial paper. He has said, too, that he’s not apt to invest more in those investment products once the city’s current investment matures this spring.

Vavroch said this week that the city first began investing in commercial paper about 18 months ago.

Bike racks coming to city buses by summer

In City Hall on March 27, 2008 at 10:05 pm

Imagine peddling your bicycle to work in the downtown from a distant neighborhood and not wanting to peddle back at night.

Or having to get several blocks to the city bus line, and not wanting to walk it.

This could be for you: Bike racks are coming to city buses.

Brad DeBrower, the city’s transit manager, on Thursday said he is in the process of buying the bike racks and that they should be in place on buses this summer.

The racks, which are placed on the front of buses, will go on 16 of the city’s low-floor buses and five of the larger city buses, DeBrower said.

Council member Tom Podzimek, an advocate of bicycling as a means of transportation as well as a means of recreation, on Thursday said people have been asking him about bike racks on buses for a couple years. In fact, the city has been considering the matter for that long, he said.

“Sometimes government travels like a bulldozer,” Podzimek said.

He imagined someone living in the Bowman Woods or Cedar Hills who would jump on a city bus with their bike to get downtown to the city’s trail system. Some people, too, might have an interest in biking one way to or from the downtown, but not both ways. The bus bike rack, he said, will take care of the problem.

“It just kind of facilitates public transportation if you’re able to take the bicycle with you,” he said.

City’s Board of Ethics achieves pioneering victory: Shey recuses himself on Osada vote

In City Hall, Pat Shey on March 27, 2008 at 6:46 pm

An advisory opinion last November from the state’s only city Board of Ethics played a role in the City Council vote Wednesday evening that awarded incentives  to a local developer who plans to convert the failed, low-income Osada loft apartments into condominiums.In the Wednesday discussion and vote on the Osada property, council member Pat Shey, without comment, did not participate.

It was a pioneering moment for the city’s 1-year-old Board of Ethics.

The ethics panel was ordered into creation by the city’s Home Rule Charter Commission in 2005 when the commission came up with the charter for the city’s new council/manager form of government.

In truth, the new City Council in 2006 didn’t consider the local ethics board a priority. But the council finally did create the body in the early spring of 2007. It has not had much work.

Last fall, though, when the Osada building turned up in front of the City Council, council member Shey sought out the ethics board to ask it if he had a conflict and should recuse himself from debate and voting.

Shey asked because he is a bank officer at Cedar Rapids Bank & Trust Co. where Fred Timko, president of Point Builders Inc., sits on the bank board.

Timko also is the developer whose proposal was approved Wednesday evening by the council to turn the 67 low-income loft apartments in the Osada building into 58 condominiums, each priced from $100,000 to $200,000.

Interestingly, the ethics board last November concluded that Shey did not have a conflict with Timko just because Timko was on the board of the bank where Shey is employed.

What was crucial, Gary Streit, ethics board chairman, said was whether the bank actually participates in the financing of Timko’s project. Last November, Timko wasn’t sure which bank ultimately would finance renovation plans.

Even so, in the November opinion, Streit wrote  that the “the general feeling of the board,” is that Timko’s position on the bank board would make it “reasonably likely” that the bank would provide financing for the project if the council resolution doesn’t specifically say the bank won’t be involved.

Shey said in November he would recuse himself from the Timko proposal, and that’s what Shey did on Wednesday evening.

On Thursday, he revealed that his bank is financing the Timko project so it was appropriate for him to recuse himself. At the same time, though, he said he was eager to enter the debate to talk about the positive parts of the project.

“It just killed me,” he said about having to stay quiet.

The proposal by Timko, in which he is working as part of an entity called BPI-GRR LLC, was approved by a council vote of 6-1.

The council vote approved a development agreement with the city which will allow $700,000 in property taxes that will be created because of the renovation to be used by Timko for incentives to help him sell the 58 condominium units. The council majority decided the project deserved the incentive because of the risk Timko is taking in trying to add housing to the downtown.

Incentives also are being provided to help in the development of NewBo Park on the property and streetscaping. Timko is contributing $100,000 to the park and $200,000 to low-income housing.

The new condominiums will be called Bottleworks because the building once was a Hires Root Beer bottling works, Timko says.

He says expects to begin construction on four of the condominiums in April and hopes to have residents in the building this summer.