Pregler, W. letter Main St. etcMEMORANDUM
TO:
FROM:
SUBJECT:
November 28, 2001
Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Explanation of Special Assessment Process
The purpose of this memorandum is to provide an explanation of the City's process for
ardving at street special assessments. This information is in response to a letter you
received from Walter Pregler regarding assessments for the Main Street project.
The formula for arriving at street special assessments is a multi-step process.
It begins with preparing a cost estimate for the total proposed street
improvement.
The project costs are then reviewed to determine deducts that should be taken
off of the total cost for amenities that the City wants to undertake that are not
related to replacing a normal 31 foot wide local street. These deducts include
such items as storm sewer upgrade, water line replacement, fiber optic conduit,
wider street than the 31' local street standard, and increased depth of concrete
due to anticipated traffic conditions. These are called "City costs" and are
deducted from the total project cost to estimate the total assessable share of the
project.
The next step is to run calculations on the total number of units to be assessed
based on the front footage of property and depth of property for an area up to
300 feet back from the street improvement.
The estimated assessable share is divided by the number of units to be
assessed to arrive at a unit cost. This unit cost is then applied to each separate
parcel of property to arrive at its estimated special assessment cost.
The assessable cost that is then reduced by 20% based on preview City Council
direction. This was to be reviewed at each year's public hearing on the Street
Budget Plan in relation to the general economic conditions.
The individual assessments are then reduced an additional 75% per the Local
Option Sales tax calculations.
As previously agreed with the Main Street property owners, the City is proposing
assessing the property owners 25% of the total assessable costs, which is an
exception to the normal procedure because of the specialty situation of the
Plaza. When the "City share" items are added back into the estimate, the
assessment rate is actually about 21.5%. Using two recent street project
comparisons, Algona Street property owners are being assessed 15.7% of total
project costs and College/Parkway Street property owners were assessed 12.7%
of total project costs. The Main Street property owners are paying 37% more
than the Algona Street property owners and 69% more than the College/Parkway
Street property owners, as a percentage of total project costs.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Mr. Walt Pregler
Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Pauline Joyce, Administrative Services Manager
Michael A. Koch, Public Works Director
Walter A. Pregler
2966 Shiras Ave.
Dubuque, Iowa 52001-8355
(563)583-5855
Nov. 25, 2001
Hon. Mayor and Members
Dubuque City Council
Dear Councilpersons:
On Feb. 2, 1988, the citizens of the City of Dubuque voted on a one cent sales tax to bolster the
shrinking budget of the City of Dubuque. The measure passed by a groat 82% favorable margin.
Several responsible citizens, from various walks of life, including myself, comprised a committee to
promote the measure.
We devised a plan that would not only curtail property tax increases, but allow for capitol
improvements and the reduction of street assessments by at least 75%.
The plan voted on and enacted, has worked very well over its lifespan. Property taxes have been
steady, many capitol improvements have been completed, and the street program, usually a very
emotional and controversial part of city government, has been reduced to a less volatile action.
However, I read where the plans and specifications for the opening of Main Street from 5th to 9th is
due for adoption.
If I read the financial part of the program correctly, only 15% of the cost is assessable, meaning the
City is proposing to pick up 85% of the cost. This constitutes a bold departure from the 75%/25%
formula used on residential street construction. I also interpret, that much of the monies will be
generated from TIF. If you don't use that formula on regular street programs, why then, on Main
Street? This seems to be giving favoritism to downtown property owners, compounded with TIF,
which shifts the burden on the homeowner, either constitutes special interests, or discrimination.
The homeowner will have to supplant the loss of tax dollars from TIF, to maintain the level of
services ,or suffer the loss of services. I am sure that if this were explained fully to the public, loud
and countless objections would be raised.
In the 1960's, these same property owners were given a plaza, resplendent with clock and fountain,
at no assessable cost. Why, now a free ride again?
Enclosed, please find a brochure from the 1988 referendum for your perusal.
Sincerely;
Walt Pregler
Once again we are experiencing a
proposed tax change. An opportunity to
reduce property taxes; reduce street
special assessments; provide for
the maintenance of City property,
buildings and facilities', replace lost
federal and state funds; and maintain
City services: The change is in the form
of an election to approve a one cent
local option sales and services tax. The
sales tax was unanimously endorsed
and supported by the Dubuque City
Council at its January 4, 1988 meeting.
The election will be held on Tuesday,
February 2, 1988. If approved, the tax
will be collected along with the State
sales tax beginning April 1, 1988. The
first sales tax receipts will then be
distributed by the State in October, 1988.
What Does the 1¢ local option
tax mean?
This local option sales tax means that a
penny will be added to the current 4%
State sales tax for every dollar spent with
some IMPORTANT EXEMPTIONS:
Food items
Prescription drugs
New and used
automobiles
Farm equipment
Lottery tickets
Gasoline and special
fuels
Certain industrial
equipment used
directly in the
manufacturing
process and taxed
as real property,
such as computers
And, in Dubuque, charges for hotel and
motel rooms since they are already subject
to a tax.
Collection of the local sales tax will not
create extra bookkeeping for local retailers
because it is collected and disbursed with
the State sales tax.
How Will the Money Benefit
Dubuque?
The 1¢ sales tax will generate about $4.9
million county-wide. The City's share will be
about $3.1 million with the balance going to
the County and other Cities. Only those
municipalities passing the tax will share in
the money generated so if it passes in the
City and not in the County the City will get
a larger share.
The City's share will be used as follows:
· 50% or $1,550,000 will be used for direct
property tax reduction beginning on
July 1, 1988
· 300/0 or $930,000 will be used for (a) the
reduction by at least 75% of street
special assessments and (b) the mainte-
nance and repair of streets
· 20% or $620,000 will be used for (a) the
upkeep of City-owned property such as
sidewalks, steps, storm sewers, walls,
curbs, traffic signals and signs, bridges
and buildings and facilities (e.g., Airport,
parks, swimming pools, Five Flags Center,
Library, fire stations, Law Enforcement
Center, City Hall); (b) Transit equipment
such as buses; (c) riverfront and wettand
development; and (d) economic develop-
ment projects.
Note: These figure est/mates are based on a
full year's receipts. During the first year only
3 of the 4 quarterly payments will be received
in time to be used for the budget.
What Does the Tax Mean for
an Average Dubuque Family?
A family of four with an income of $25,000
spends an average of $7,450 on taxable
retail goods and services. The local option
tax would cost $74 per year.
For a homeowner paying property taxes, if
the one cent local option sales and services
tax had been in effect for preparing the
City's FY 1987-88 budget, property taxes
would have been 13.5% less. On a house
with a taxable value of $41,580 this repre-
sents a savings of $69.00 or over 15%. To
this must be added the savings resulting
from having street assessments reduced by
at least 75 percent.
Why the Local Option Sales
and Services Tax?
The one cent local option sales and services
tax is the fairest and most appropriate
alternative available or likely to be available
to the City. It will generate a worthwhile
amount of money and, unlike other taxes,
will be paid not only by City residents, but
by out of town shoppers, tourists and other
visitors as well.
Can the Percentages and
Purposes be Changed by Future
City Councils?
No, the percentages and purposes for
which the revenue from the local option
sales and services tax can be spent are set
by the election and can be changed only by
another election.
To reducing property taxes beginning
July 1, 1988;
To reducing by at least 75% street
special assessments;
To maintaining and repairing City
streets, sidewalks, Walls, storm
sewers, buildings and facilities;
To replacing lost federal and state
funds;
To maintaining City services, facilities
and jobs including transit, parks,
library, etc;
To preserving Dubuque's sound
fiscal condition and credit rating; and
To sharing the City's financial burden
with non-residents who work, shop
or visit in Dubuque.
What are the alternatives to
enacting the 1% local sales tax?
Should the February 2nd referendum
fail the City Council will again be faced with
the issues of cutting services, delaying
maintenance and increasing fees and
property taxes.
Has the City Government done
anything to solve its own
budget problems?
Yes, the City Government has reduced the
number of full time City employees over the
past 8 years by 96 positions or over 16
percent from 597.50 full time positions in
FY 1979-80 to 500.80 full time positions in
FY 1987-88. The personnel cuts were in all
areas; including police and fire, management
and supervisory personnel. The significant
reduction in City employees is an indicator
that the City Government has taken .action
to reduce its costs and respond to its
budget problems; not just raise property
taxes and fees or wait for someone else to
solve its budget problems.
Can the Local Option Sales
and Services Tax be Blocked by
County Voters?
NO, the local option sales and services tax
does not have to pass County-wide. This is
different than the requirement for the
vehicle tax. If the voters in Dubuque,
Asbury and Sageville, voting as a unit
because they are contiguous cities, approve
the sales tax, it will be implemented in the
three cities regardless of how the vote turns
out in the rest of the County. However, only
those communities that approve their own
local option sales tax will share in the
money generated.
Brochure paid for by Citizens for Dubuque
Walt Pregler, Treasurer