State Flood Mitigation Project - Amendment to Funding Agreement for Bee Branch Creek Copyrighted
June 19, 2017
City of Dubuque Consent Items # 18.
ITEM TITLE: State Flood Mitigation Project-Amendment to Funding
Agreement
SUMMARY: City Manager recommending approval to seek an
amendment to the State Flood Mitigation Board Funding
Agreement for the Bee Branch Watershed Flood Mitigation
Project.
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Approve
ATTACHMENTS:
Description Type
Amendment to State Flood Mitigation Board Funding City Manager Memo
Agreement for Bee Branch-MVM Memo
Staff Memo Staff Memo
THE CITY OF Dubuque
fta B E I 11p y
Masterpiece 012 the Mississippi 2007.2012«2013
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Amendment to State Flood Mitigation Board Funding Agreement for the
Bee Branch Watershed Flood Mitigation Project
DATE: June 15, 2017
City Engineer Gus Psihoyos recommends City Council approval to seek an amendment
to the State Flood Mitigation Board Funding Agreement for the Bee Branch Watershed
Flood Mitigation Project.
Recently, the City of Cedar Falls reached out to the City of Dubuque seeking help.
They believe that their sales tax growth in Fiscal Year 2017 will not grow as originally
projected, preventing them from collecting approximately $700,000 in sales tax
increment funding from the state. And the State Flood Mitigation Board (Board) would
not have the ability to re-allocate the funding later on as the Board has already allocated
the maximum they can in subsequent years. This is where the City of Dubuque may be
able to help.
In contrast to Cedar Falls, sales tax collections in the City of Dubuque have exceeded
the projections outlined in the City's original application. It is possible the City will
generate enough sales tax increment in Fiscal Year 2017 to support the City's receipt of
additional funding. The proposal to the Board will be to shift up to $700,000 in Fiscal
Year 2017 sales tax increment from the City of Cedar Falls to the City of Dubuque and
in Fiscal Year 2019 to shift a corresponding amount from the City of Dubuque to the
City of Cedar Falls.
The amendment will take into consideration that the amount shifted will be limited to the
actual sales tax increment generated in the City of Dubuque above and beyond what
the City is currently programmed to receive. Hence, the "up to $700,000" language.
Essentially, the City will not lose out on sales tax increment funding as a result of the
proposed amendment.
This amendment will not modify the total sales tax increment funding available for the
City's use. It would simply accelerate the City's receipt of up to $700,000, shifting it
from Fiscal Year 2019 to Fiscal Year 2017.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
l 4(.
Mic ael C. Van MilligenW+t'
MCVM:jh
Attachment
cc: Crenna Brumwell, City Attorney
Teri Goodmann, Assistant City Manager
Gus Psihoyos, City Engineer
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THE CDubuque
All-A
DU!B9aTE ' 1111
Masterpiece on the Mississippi 2007-2012
3
TO: Michael C. Van Milligen, City Manager
FROM: Gus Psihoyos, City Engineer
DATE: June 14, 2017
SUBJECT: Amendment to State Flood Mitigation Board Funding Agreement for the
Bee Branch Watershed Flood Mitigation Project
INTRODUCTION
The purpose of this memorandum is to request approval to seek an amendment to the
State Flood Mitigation Board Funding Agreement for the Bee Branch Watershed Flood
Mitigation Project.
BACKGROUND
In 2012, the State of Iowa Flood Mitigation Program (Program) was created. It
established that sales tax increment collected in a City can be used to fund 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. In April of 2013 the State
Flood Mitigation Program Board (the Board) was established and at its third meeting in
July of 2013, the Board adopted administrative rules for the Program.
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 12-phase Bee Branch Watershed Flood Mitigation Project. The City's application
included a Project Plan that outlined information about the various phases of the project,
the schedule for construction, and the financing plan utilizing sales tax increment funds.
On December 4, 2013, the Iowa Flood Mitigation Board approved the City's application
and the City's use of $98,494,178.00 in state sales tax increment funds for the Bee
Branch Watershed Flood Mitigation Project.
In February of 2014, the City Council adopted Resolution 31-14 authorizing the
execution of a 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 Mitigation
Project. The sales tax increment is to be distributed to the City based on a set schedule
over a twenty-year period as outlined in the City's Project Plan and as reflected in the
funding agreement.
In April of 2015, the City Council adopted Resolution 138-15 authorizing an amendment
to the funding agreement with the Iowa Flood Mitigation Board that provided for the City
to receive an additional $5 million in sales tax increment in Fiscal Years 2014 through
2018 offset by a reduction of$5 million in sales tax increment in Fiscal Years 2031
through 2033.
DISCUSSION
The legislation establishing the State Flood Mitigation Program (Program) and the
subsequent amendments to the Iowa Code enacting the Program established limitations
on a city's use of sales tax increment. A city is only eligible to use state sales tax
increment funding if the sales tax collections within the city actually grow.
Recently, the City of Cedar Falls reached out to the City of Dubuque seeking help. They
believe that their sales tax growth in FY17 will not grow as originally projected,
preventing them from collecting approximately $700,000 in sales tax increment funding
from the state. And the State Flood Mitigation Board (Board) would not have the ability
to re-allocate the funding later on as the Board has already allocated the maximum they
can in subsequent years. This is where the City of Dubuque may be able to help.
In contrast to Cedar Falls, sales tax collections in the City of Dubuque have exceeded
the projections outlined in the City's original application. It is possible the City will
generate enough sales tax increment in FY17 to support the City's receipt of additional
funding. The proposal to the Board will be to shift up to $700,000 in FY17 sales tax
increment from the City of Cedar Falls to the City of Dubuque and in FY19 to shift a
corresponding amount from the City of Dubuque to the City of Cedar Falls.
The amendment will take into consideration that the amount shifted will be limited to the
actual sales tax increment generated in the City of Dubuque above and beyond what
the City is currently programmed to receive. Hence, the "up to $700,000" language.
Essentially, the City will not lose out on sales tax increment funding as a result of the
proposed amendment.
This amendment will not modify the total sales tax increment funding available for the
City's use. It would simply accelerate the City's receipt of up to $700,000, shifting it from
FY19 to FY17.
RECOMMENDATION
I recommend that the City seek an amendment to the State Flood Mitigation Board
Funding Agreement in order to secure up to $700,000.00 in additional sales tax
increment funding in FY2017 offset by a corresponding decrease in FY2019 for the Bee
Branch Watershed Flood Mitigation Project.
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BUDGETIMPACT
If realized, the use of the additional sales tax increment funding would be considered as
part of an amendment to the Fiscal Year 2018 Storm Water Utility Fund Budget and
further reflected in the upcoming FY19-FY23 Capital Improvement Program Budget.
REQUESTED ACTION
I respectfully request approval to seek an amendment to the State Flood Mitigation
Board Funding Agreement in order to secure up to $700,000.00 in additional sales tax
increment funding in FY2017 offset by a corresponding decrease in FY2019 for the Bee
Branch Watershed Flood Mitigation Project.
Prepared by Deron Muehring
cc: Crenna Brumwell, City Attorney
Jennifer Larson, Budget Director
Teri Goodmann, Assistant City Manager
Alexis Steger, Senior Budget Analyst
Deron Muehring, Civil Engineer
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