Legislators Letters from Mgr.City Manager's Office
50 West 13ffi Street
Dubuque; Iowa 520014864
(319) 5894110
(319) 5894149 FAX
May 7, 2001
VIA E-MAIL AND
1sT CLASS MAIL
mike_connolly@legis.state.ia.us
The Honorable Mike Connolly
Senate Chamber
Iowa Capitol Building
Des Moines, IA 50319
Dear Senator Connolly:
I have written to you in the past regarding the City of Dubuque's opposition to proposed
property tax limitation legislation (SF 514). My understanding is that although the
original proposition was changed to eliminate cities from the language, there is a new
effort being made to reintroduce this limitation.
H-1897 that has been introduced by Representative Houser strikes the entire original
bill (SF 514) and replaces it with an ending fund balance limit on counties and
establishes a limitation on 10 cities and counties. In amendment H-189, cities may
volunteer to participate in the limitation. Under this amendment, cities maintain local
control by having the ability to determine if participation in a limitation is in the best
interest of the community.
However, there is an amendment to H-1897, also introduced by Representative Houser
that removes voluntary participation in the limitation. In amendment H-1926, the
property tax commission established in the original bill will be allowed to pick cities that
will be required to participate in a limitation. We may end up with a scenario in which
growth communities that are currently under the $8.10 levy limit could be chosen to
participate, resulting in financial harm to the community. Another concern is the
commission that will determine which cities will participate is heavily tilted toward rural
interests.
I urge you to oppose H-1926, which takes local control away from cities.
Sincerely,
Michael C. Van Milligen
City Manager
MCVM:jh
Service People Integrity Responsibility Innovation
The Honorable Mike Connolly
Senate Chamber
Iowa Capitol Building
Des Moines, IA 50319
mike_connolly@legis.state.ia.us
The Honorable Thomas Flynn
Senate Chamber
State Capitol Building
Des Moines, IA 50319
tom_flynn@legis.state.ia.us
The Honorable Pam Jochum
House Chamber
Iowa Capitol Building
Des Moines, IA 50319
pam_iochum@legis.state.ia.us
The Honorable Pat Murphy
House Chamber
Iowa Capitol Building
Des Moines, IA 50319
pat._m u rp hy@ leg is. state, ia. us
The Honorable Robert Osterhaus
House Chamber
Iowa Capitol Building
Des Moines, iA 50319
robert._osterhaus@leg is.state, ia. us
The Honorable Paul Scherrman
House Chamber
State Capitol Building
Des Moines, IA 50319
paul_scherrman@legis.state.ia.us
City Manager's Office
50 West ~[3th S~reet
Dubuqxte, Iowa 52001-4864
(319) 589413-0
(319) 58%4149 FAX
May 11, 2001
VIA E-MAIL &
IsT CLASS MAIL
rose.mary.pratt@igov.state.ia.us
The Honorable Tom Vilsack
Office of the Governor
State Capitol Building
Des Moines, IA 50319
Dear GOvernor Vilsack:
The purpose of this letter is to urge you not to sign House File 755 as amended by
H-2005, which includes an amendment added at the last moment of the session as the
result of the lobby efforts of schools, and without any opportunity for input or feedback
regarding the impact of the legislation.
This legislation is very detrimental to cities that have used Tax Increment Financing in
Urban Renewal Areas as an economic development tool. It restricts the collection of
the PPEL portion of the property tax levy to bond issue costs only (currently it includes
all legal TIF debt obligations of cities).
To give examples of the impact of this change, the City of Dubuque has a TIF District
for its Industrial Park South (Tech Park) that will generate $7.174 per year from the
school district PPEL levy to help cover the cost of revenue bonds issued to Advanced
Data and Horizon/DuCarte companies of Dubuque. However. the City has land contract
obligations of $2.082.510 and a three-year no interest loan of $800.000 from Alliant
Energy in the West End Industrial Park that would no longer be considered eligible debt
that can be reimbursed from funds generated by the PPEL levy (estimated to generate
$20,332 per year). Finally, the City has entered into minimum assessment agreements
with several individual companies that involve economic development grant agreements
for a specific length of time (usually five to ten years) as development incentives. To
the extent these commitments no longer qualify as "debt." the companies will not
recover the PPEL portion of their taxes and they will receive less than anticipated
Although the City is held harmless per our agreements, the individual companies that
have invested in new and/or expanded facilities will be hurt.
Service People Integrity Respor~sibility Innovation Tea/nwork
The Honorable Tom Vilsack
May 11, 2001
Page 2
The City has paid off its federal 108 loan that was used in our downtown TIF area but I
mention this as it is another common economic development tool that would not qualify
under the new language as it is not a bond issue of the municipality. Whoever crafted
the last minute amendment has attempted to narrow the definition of eligible costs for
PPEL levy reimbursement, and in doing so has narrowed the definition to such an
extreme that it excludes very legitimate city debt and common economic development
tools that cities have used to support existing projects based upon anticipated PPEL
levy receipts.
Again, I urge you to use your line item veto authority on amendment H-2005 to House
File 755 to insure cities can meet their outstanding debt obligations in their Tax
Increment Districts.
Sincerely,
Michael C. Van Milligen
City Manager
MCVM:jh
cc: Mr. Tom Bredeweg, Executive Director
Iowa League of Cities