Bee Branch Watershed Flood Mitigation Project, Iowa Mitigation Board 3rd Amendment to Funding Agreement Copyrighted
October 21 , 2019
City of Dubuque Consent Items # 19.
ITEM TITLE: Bee Branch Watershed Flood Mitigation Project, lowa
Mitigation Board, 3rd Amendment to Funding Agreement
SUMMARY: City Manager recommending approval an amendmentto
the funding agreement with the State Flood Mitigation
Board in order to utilize state sale tax increment funding for
the Bee Branch Watershed Flood Mitigation Project.
RESOLUTION Authorizing an Amendment to the Funding
Agreement between the City of Dubuque and the State of
lowa Flood Mitigation Board for the City's use of Sales Tax
Incrementfunding forthe Bee Branch Watershed Flood
Mitigation Project
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt
Resolution(s)
ATTACHMENTS:
Description Type
Bee Branch Watershed Flood Mitigation Project 3rd City Manager Memo
Amendmentto Funding Agreement-MVM Memo
Staff Memo Staff Memo
Resolution Resolutions
Amendment No. 3 Supporting Documentation
MVM letter to Carol Tomb Supporting Documentation
Dubuque
THE CITY OF �
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TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Bee Branch Watershed Flood Mitigation Project, lowa Flood Mitigation
Board, 3rd Amendment to Funding Agreement
DATE: October 16, 2019
City Engineer Gus Psihoyos recommends City Council approval an amendment to the
funding agreement with the State Flood Mitigation Board in order to utilize $98,474,178
in state sale tax increment funding for the Bee Branch Watershed Flood Mitigation
P roj ect.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
�
Mic ael C. Van Milligen
MCVM:jh
Attachment
cc: Crenna Brumwell, City Attorney
Teri Goodmann, Assistant City Manager
Cori Burbach, Assistant City Manager
Gus Psihoyos, City Engineer
Dubuque
THE CITY OF �
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TO: Michael C. Van Milligen, City Manage.��. ,�.�
FROM: Gus Psihoyos, City Engineer t'
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DATE: October 14, 2019
SUBJECT: Bee Branch Watershed Flood Mitigation Project, lowa Flood Mitigation
Board, 3�d Amendment to Funding Agreement
INTRODUCTION
The purpose of this memorandum is to request approval of an amendment to the
funding agreement with the State Flood Mitigation Board (Board) in order to utilize
$98,474,178.00 in state sales tax increment funding for the Bee Branch Watershed
Flood Mitigation Project.
BACKGROUND
The Bee Branch Watershed, which includes the City's most developed areas where
over 50% of city residents either live or work, has experienced repeated flooding
impacting thousands of properties and over seventy businesses. Six Presidential
Disaster Declarations have been issued since 1999 as a result of flood damage to
public and private property.
In 2012 the State of lowa Flood Mitigation Program (Program) was created. It
established a Sales Tax Increment Fund for flood mitigation projects. The Sales Tax
Increment Fund is to consist of the increase in the state share of the sales tax revenues
from communities with qualifying applications. The maximum state share of sales tax
increment that can be diverted from the State and used instead for flood mitigation
projects is 30 million per year. The maximum award for any qualifying single community
is $15 million per year. To qualify for sales tax increment funding, federal financial
assistance must have been secured for the project. A local match is also required and
the state sales tax increment cannot exceed 50% of the total project cost.
In 2013, the City Council adopted the Drainage Basin Master Plan authored by HDR
Engineering that outlines improvements to mitigate flooding. Collectively, the 12- phase
project is referred to as the Bee Branch Watershed Flood Mitigation Project.
In November of 2013 the City Council adopted Resolution 336- 13 authorizing the City' s
application to the State for the use of up to $98,494,178 in sales tax increment funds for
the Bee Branch Watershed Flood Mitigation Project. The City's application was
approved by the lowa Flood Mitigation Board on December 4, 2013.
In February of 2014, the City Council adopted Resolution 31-14 authorizing the
execution of the Funding Agreement with the lowa Flood Mitigation Board. As outlined
in Exhibit of the Funding Agreement, the City will receive a total of$98,494,178.00 in
state sales tax increment funds distributed over the course of 20 years.
DISCUSSION
Utilizing the annual sales tax collection information provided by the lowa Department of
Revenue for Fiscal Years 2004 to 2013 (ten years prior to the City's application), the
ten-year average sales tax collection growth rate in the City of Dubuque was 1.97%.
This was this growth rate that the City relied upon to predict the sales tax increment that
would be available for the City's flood mitigation project.
The City's actual sales tax collection growth was 2.56% and 7.01 % in the first two
years, well above the projected growth of 1.97%. For this reason, the City sought an
amendment that would increase sales tax increment remittances by $5 million in the first
few years offset by an equal reduction in the last few years. The City sought
Amendment Number One for two reasons. First, utilizing the additional increment in the
first few years allowed the City to minimize the debt required to fund the flood mitigation
improvements which could result in reduced financing costs, a direct benefit to lowa
citizens. Second, it freed up increment in later years that the Board was able to
distribute to other lowa communities. Unfortunately, sales tax increment growth declined
markedly following execution of Amendment Number One. The growth declined to
0.72%, 0.72%, and -0.64% in fiscal years 16, 17, & 18 respectively. As a result, the
sales tax increment available to the City in FY17 and FY18 was less than the Board had
allocated resulting in a sales tax increment shortfall totaling $1,922,548.00.
The City sent a letter requesting the modification of the schedule of payments such that
t�re Ciiy rrvoulci receive $1,922,548.00 ii7 �aies tax increme��t in Fiscal Year 2034 to
offset the sales tax increment shortfall that occurred in Fiscal Years 2017 and 2018. The
Board approved the City's request at their September 2019 meeting and the City
received Amendment Number Three, attached hereto, for consideration.
Amendment Number Three establishes that the City will receive "the maximum amount
of $98,494,178.Q0, payable ouer the term of this AgrePment and pursuant to ths
schedule as set out in the attached Exhibit B Amended #3, as amended during the term
of this Agreement, all in accordance with and subject to the terms and conditions of this
Agreement, lowa Code chapter 418, and applicable administrative rules. All other
paragraphs in said AGREEMENT remain unchanged."
RECOMMENDATION
I recommend execution of the attached Amendment Number Three to the funding
agreement establishing that in fiscal year 2034 the City will receive $1,922,548.00 in
sales tax increment funds from the State in order to ens�are the City's receipt and �ase of
$98,494,178.00 in sales tax increment financing for the Bee Branch Watershed Flood
Mitigation Project.
2
REQUESTED ACTION
I respectfully request adoption of the attached resolution approving Amendment
Number Three to the Funding Agreement with the lowa Flood Mitigation Board
establishing that the City will receive $1 ,922,548.00 in sales tax increment funds in
fiscal year 2034 and $98,494,178.00 in total from the State for the Bee Branch
Watershed Flood Mitigation Project.
Attach.
Cc: Crenna Brumwell, City Attorney
Teri Goodmann, Assistant City Manager
Deron Muehring, Civil Engineer
Jennifer Larson, Director of Finance and Budget
3
Prepared by: Deron Muehrinq, City Hall, 50 W 13th Street Dubuque IA 52001 563-589-4270
Return to: Kevin S. Firnstahl, City Clerk, 50 W 13th Street, Dubuque IA 52001 563-589-4270
RESOLUTION NO. 377-19
AUTHORIZING AN AMENDMENT TO THE FUNDING AGREEMENT BETWEEN THE
CITY OF DUBUQUE AND THE STATE OF IOWA FLOOD MITIGATION BOARD FOR
THE CITY'S USE OF SALES TAX INCREMENT FUNDING FOR THE BEE BRANCH
WATERSHED FLOOD MITIGATION PROJECT
WHEREAS, Six Presidential Disaster Declarations have been issued for flooding,
severe storms and tornados between 1999 and 2011 due to flash flooding; and
WHEREAS, the Bee Branch Watershed, which includes the City of Dubuque's most
developed areas where over 50% of city residents either live or work, has experienced
flooding impacting thousands of properties and over seventy businesses; and
WHEREAS, the City Council of the City of Dubuque has adopted a drainage basin
master plan authored by HDR Engineering that outlines improvements to mitigate
flooding collectively referred to as the Bee Branch Watershed Flood Mitigation Project
(the Project); and
WHEREAS, the Flood Mitigation Program was established by the Iowa Legislature
and the Governor of Iowa to support community projects for the construction and
reconstruction of levees, embankments, impounding reservoirs, or conduits that are
necessary for the protection of property from the effects of floodwaters and may include
the deepening, widening, alteration, change, diversion, or other improvement of
watercourses if necessary for the protection of such property from the effects of
floodwaters; and
WHEREAS, the City of Dubuque submitted an application to the Iowa Flood
Mitigation Board (the Board) requesting the use of $98,494,178.00 in sales tax
increment funds for the Project; and
WHEREAS, the Board, on December 4, 2013, voted to approve the City's application
for construction of the Project, subject to the requirements set forth in Iowa Code
chapter 418 and the administrative rules promulgated under it and subject to the terms
and conditions set forth in an agreement; and
WHEREAS, the City Council, on February 3, 2014, adopted Resolution 31-14
authorizing the execution of an agreement (Funding Agreement) with the Iowa Flood
Mitigation Board binding the City to the terms of the agreement as required for the City's
receipt of up to $98,494,178.00 in state sales tax increment funds for the Bee Branch
Watershed Flood; and
WHEREAS, the Funding Agreement established the sales tax increment that the City
can receive by fiscal year; and
WHEREAS, the sales tax increment growth was estimated to be 1.97% based on the
average growth over the ten years prior to the Funding Agreement; and
WHEREAS, the City actual sales tax increment growth was only 0.72%, 0.72%, and -
0.64% in Fiscal Years in fiscal years 16, 17, & 18 respectively resulting in the City
receiving $1,922,548.00 less sale tax increment than scheduled in fiscal years 17 and
18, and
WHEREAS, Whereas, the City of Dubuque submitted a request to amend the
Funding Agreement to the Board that would modify the schedule of payments such that
it would provide an additional $1,922,548.00 in sales tax increment in Fiscal Year 2034
to offset the sales tax increment shortfall that occurred in Fiscal Years 2017 and 2018;
and
WHEREAS, the Board, on September 16, 2019, voted to approve Amendment
Number Three (Amendment) modifying the Funding Agreement and the schedule of
payments; and
WHEREAS, it is in the best interest of the City to seek the use of the additional sales
tax increment in FY 2034 through an amendment to the Funding Agreement.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA THAT:
Section 1. The Amendment be approved.
Section 2. The Mayor is hereby authorized to execute and deliver the Amended and
execute such other documents as the Iowa Flood Mitigation Board may reasonably
require that are necessary to bind the City to the terms of the Amended Agreement as
required for the City's receipt of $ 98,494,178 in sales tax increment funds for the Bee
Branch Watershed Flood Mitigation Project through the State Flood Mitigation Program.
Passed, approved, and adopted this 21St day of October 2019.
Attest:
in S. Firnsta I, `City Clerk
CC
y D. Buol, Mayor
Amendment Number Three
AGREEMENT
3ehveen
THE FLOOD MITIGATIOI\) BOARD
And
THE CITY OF DUBUQUE, IOWA
AGREEMENT NUMBER: 2013-0
PROJECT TITLE: Bee Branch Watershed Flood Mitigation Project
This is Amendment Number Three to the above -referenced Agreement (AGREEMENT) between the Flood
Mitigation Board and the City of .Dubuque. The original AGREEMENT was executed on 2/10/14, Amendment
Number One on 4129/15, and Amendment Number Two on 6/29/17.
The Flood Mitigation Board, on September 16, 2019, voted to approve the Amendment Number Three to the
Agreement between the Flood Mitigation Board and the City of Dubuque,, .Iowa.
Article 5, APPROVAL OF USE SALES TAX REVENUES, of the said AGREEMENT is amended to read:
The Board hereby approves the use of sales tax increment revenues under Iowa Code chapter 418 to the
maximum amount of $98,494,178.00, payable over the term of this Agreement and pursuant to the schedule as
set out in the attached Exhibit B Amended #3., as amended during the term of this Agreement, all in accordance
with and subject to the terns and conditions of this Agreement, Iowa Code chapter 418, and applicable
administrative rules.
All other paragraphs in said AGREEMENT retrain unchanged.
IN WITNESS WHEREOF, in consideration of the mutual covenants set forth above and for other good and
valuable consideration, the receipt, adequacy and legal sufficiency of which are hereby acknowledged, the
parties have entered into the above Agreement and have caused their duly authorized representatives to execute
this Agreement.
CITY OF DUE UE
Date:
J
Roy Dtuoi, Mayor
Date:
esr n S. Firnstahl, City Clerk
FLOOD MITIGATION BOARD
r
By: a..�/'
V.. Io, e F n, Chair
EXHIBIT B (Amended #3)
SCHEDULE OF REMITTANCES OF THE CITY OF DUBUQUE
FOR THE USE OF SALES TAX REVENUES
FOR THE STATE OF IOWA FLOOD MITIGATION PROGRAM
FOR THE BEE BRANCH WATERSHED FLOOD MITIGATION PROJECT
CITY OF DUBUQUE
Flood Mitigation Program
SALES TAX USE PROJECTIONS
YEAR AMOUNT
2014 $ 395,704.00
2015 $ 2,655,058.00
2016 $ 3,476,709.00
2017 $ 3,906,383.00
2018 $ 3,660,485.00
2019 $ 4,392,361.00
2020 $ 5,175,452.00
2021 $ 5,973,893.00
2022 $ 6,787,982.00
2023 $ 6,944,414.00
2024 $ 6,968,288.00
2025 $ 6,946,514.00
2026 $ 6,957,577.00
2027 $ 6,947,487.00
2028 $ 6,947,500.00
2029 $ 6,500,000.00
2030 $ 6,000,000.00
2031 $ 2,935,823.00
2032 $ 1,500,000.00
2033 $ 1,500,000.00
2034 $ 1,922,548.00
2035 $ -
TOTAL $ 98,494,178.00
Dubuque City Manager's Office
TI-IE CITY OF � City Hall
All-AmeNc�City 50 West 13th Street
DT T� � 1'I I I I Dubuque, [A 52001-4845
U Oftice(563)589-41 10
zoo�•zoiz•zoi3 Fax(563)589-4149
Masterpiece on the Mississippi 2017*2019 TTY(563)690-6678
ctymgr acityofdubuc�ue.org
www.cityofdubuqUe.org
August 29, 2019
Carol Tomb
Hazard Mitigation Project Officer- Infrastructure
lowa Department of Homeland Security and Emergency Management.
7900 Hickman Rd., Suite 500
Windsor Heights, IA 50324
VIA EMAIL
RE: State Flood Mitigation Program, Proposed Amendment to Agreement 2013-0
Dear Ms. Tomb,
The purpose of this letter is to seek an amendment to the funding agreement between
the Flood Mitigation Board (Board) and the City of Dubuque related to the City's use of
state sales tax revenues for the Bee Branch Watershed Flood Mitigation Project.
Specifically, the City is requesting changes to Exhibit B, the schedule of remittances for
the use of sales tax revenues.
Utilizing the annual sales tax collection information provided by the lowa Department of
Revenue for Fiscal Years 2004 to 2013 (ten years prior to the City's application), the
ten-year average sales tax collection growth rate in the City of Dubuque was 1.97%.
This is reflected in Table C-2 of the Bee Branch Watershed Flood Mitigation Project
Plan (Project Plan). And it was this growth rate that the City relied upon to predict the
sales tax increment that would be available for the City's flood mitigation project.
The City's actual sales tax collection growth was 2.56% and 7.01% in the first two years,
well above the projected growth of 1.97%. For this reason, the City sought an
amendment that would increase sales tax increment remittances in the first few years
offset by a reduction in the last few years. Enclosed Attachment 1 shows the changes to
the schedule of sales tax increment remittances established with Amendment Number
One to the agreement between the Flood Mitigation Board and the City.
Unfortunately, sales tax increment growth declined markedly following execution of
Amendment Number One. The growth declined to 0.72%, 0.72%, and -0.64% in fiscal
years 16, 17, & 18 respectively. As a result, the sales tax increment available to the City
in FY17 and FY18 was less than the Board had allocated resulting in a sales tax
increment shortfall totaling $1,922,548.00.
Service People Integrity Responsibility lnnovation Teamwork
The City sought Amendment Number One for two reasons. First, utilizing the additional
increment in the first few years allowed the City to minimize the debt required to fund
the flood mitigation improvements which could result in reduced financing costs, a direct
benefit to lowa citizens. Second, it freed up increment in later years that the Board was
able to distribute to other lowa communities.
The Bee Branch Watershed Flood Mitigation Project is a multi-phased investment to
mitigate flooding, improve water quality, stimulate investment, and enhance quality of
life within the Bee Branch Watershed. The Bee Branch Watershed has repeatedly
experienced flash flooding during significant rain events resulting in six Presidential
Disaster Declarations since 1999. Too frequently, it has been flooding that inundates
water heaters, furnaces, and electrical boxes, and can cause fires. Floodwaters have
rushed down streets from curb to curb -- stalling vehicles, stranding motorists,
displacing manhole covers, and damaging pavement, water mains, and stormwater and
sanitary sewers.
The City has continued to make steady progress since its application was approved by
the Board. Work has begun on ten of the twelve phases with four already complete. And
since the City's application was approved by the Board, the total cost of the project has
increased from an estimated $205.6 million to $248.0 million. The Board's initial $98.5
million investment is now leveraging $149.7 million in flood mitigation improvements. At
this time, the City of Dubuque is seeking an amendment to the funding agreement with
the Board so that the City receives the Board's initial investment in its entirety.
The City of Dubuque respectfully requests amending Exhibit B of funding Agreement
2013-0 to reflect the revised sales tax increment remittance schedule outlined in
Attachment 2.
Thank you in advance for your assistance.
Sincerely,
`�,,� . �� '
��
�
Michael C. Van Milligen
City Manager
Enclosures
cc: Jennifer Larson, Director of Finance and Budget
Teri Goodmann, Assistant City Manager
Gus Psihoyos, City Engineer
Deron Muehring, Civil Engineer
Service Pzople Integriry Responsibiliry Innovation Teamwork