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State of Iowa Legislative Priorities 2011 SessionMasterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: City of Dubuque State Legislative Issues for the 2011 Session DATE: November 30, 2010 Assistant City Manager Teri Goodmann has worked with City staff to develop a recommendation on this year's State of Iowa Legislative Priorities. The priorities, as adopted by the City Council, will be presented to our legislators at the annual Legislative Dinner on December 7, at 5:30 p.m. at the Grand River Center. I concur with the recommendation and respectfully request Mayor and City Council approval. MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Attorney Memel C. Van Milligen Dubuque All- ancricaCity 2007 City Of Dubuque State Legislative Issues For The 2011 Session State Historic Tax Credits The Iowa Historic Preservation Tax Credit was passed in May 2000 to promote investment in our historic resources in communities, codified in Section 404A.4. Rehabilitation of these resources contributes to the economic viability as well as the strength of our communities. The secondary impacts of this historic tax credit on our communities are countless. The program provides a tax credit of 25% of the qualified rehabilitation expenses for qualified projects. Thus, each credit represents an investment in our community of at least four times the amount of the credit. Additional revenues are generated through increased property taxes, income taxes, and sales taxes. The cap for the program is currently set at $50 million per year. Dubuque has benefited from 20 state historic tax credit projects, more than any other city in the State of Iowa, which has added far more to our financial system than a simple single storefront project as listed above. A sample of the impact is as follows: Project New Jobs Security Building 90 Town Clock Building 60 Heartland Building 45 Platinum Building 110 Star Brewery 170 Cooper Wagon Works /Bricktown 65 German Bank 25 Roshek Building 1,300 Total 1,865 new permanent jobs These projects have added well over 1865 permanent jobs to our economy, not including the construction jobs to complete the large projects. These 1865 people would equate to a $79.4 million annual payroll. Critical workforce housing needs in the City of Dubuque make state historic tax credits and other financial incentives a top priority as the City works to promote redevelopment and reinvestment in our urban core. Requested Action: Maintain the state historic tax credit program at the current level with a goal of removing the cap on the historic preservation tax incentives. Work to ensure that the administrative rules support private sector development and best practices. 1 Workforce Households (Dubuque) Dubuque Gross Annual Income Gross Monthly Affordable Net Affordable Net Affordable Rent Mortgage Pmt. (wlo utilities) (w /o utilities, tax & insurance) Housing Cost 80 %AMI $35,250 $881 $661 $581 120% AMI $52,836 $1,321 $991 $872 Smart Growth Workforce Housing Creation of the Smart Growth Workforce Housing grant program under the discretionary policy of the Iowa Finance Authority provides greater opportunity for the City of Dubuque and its partners to stabilize the community and will prioritize environmentally - sustainable development and will promote economic development. This grant program was established in the 2010 legislative session. The program needs funding appropriations to become available effective FY2012. Definition Smart Growth practices are settlement patterns that avert urban sprawl by encouraging more compact development, greater transit use, and enhanced environmental protection. Workforce housing is normally defined as housing affordable to households earning between 80 percent and 120 percent area median income (AMI). Affordable, in the housing industry, means a household pays no more than 30 percent of its annual income on housing. Smart Growth Workforce Housing is the combination of these concepts — the development of sustainable, transit - oriented housing that is affordable for our workforce. What can our workforce households afford to pay for housing? "The National Housing Act of 1937 created the public housing program... [wherein] a tenant's income could not exceed five to six times the rent; and by 1940 income limits gave way to the maximum rent standard in which rent could not exceed 20 percent of income — in practice, the same as the predecessor income limit standard. Over the decades, that percentage has risen, so that by 1981 the threshold was set at 30 percent of income. Households that spend over 30 percent of income on housing are considered cost burdened. Why the increase? Was it truly deemed a more appropriate benchmark? Or was it simply in response to an increase in housing costs and the government's inability to subsidize housing for an ever - growing number of struggling households? Using the current industry standard of spending up to 30 percent of gross income for gross housing costs (including tax, insurance, & utilities), workforce households could be expected to spend the maximum amounts indicated in the table below. Housing markets differ greatly, but we know that rents run much higher than these net rent levels in many areas; and conversely, these rents are simply unattainable in other areas like Dubuque due to lower local prevailing wages. The mortgage levels listed below would service a 30 -year mortgage valued between $83,000 and $125,000, whereas the current median sale price for homes in Dubuque is $121,800 — barely within reach for the upper end of our workforce. 2 Over the past decade, rising housing costs have outpaced the average salary across the United States — in some areas by two- to five -fold. Many workers in urban areas have dealt with this discrepancy by living far from their downtown jobs or by living in housing they can't afford. Unfortunately, the former solution is offset by an increase in transportation costs. And what is the price we pay for the latter solution? "Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care." In fact, a full 37% of homeowners and 50% of renters today are cost burdened. Fortunately, housing costs in smaller urban and rural areas are often within closer reach for workforce households. However, in areas where vacancy rates are low — calling for the production of new units — development of quality housing is financially impossible, as operational income on the properties is not enough to cover interest payments on the project mortgage. Low local rent levels, although beneficial for tenants, preclude developers from creating new units, despite a community's housing shortage. For this reason, many developers have turned to the LIHTC program to make their projects financially feasible, whether or not this fulfills the community's particular housing demand. Meanwhile, the recent economic downturn and housing market woes have combined to create a new class of workers, forced into the rental market because they do not qualify for a mortgage. Displaced workers with homes that won't sell, families who've had their homes foreclosed, young professionals with student loans, and households that might otherwise be able to afford mortgage payments if only they could come up with the higher requisite down payment demanded in a tight lending climate — all of these are moving into the rental market. This creates a rather sudden increase in the demand for rental residential units for households that are neither wealthy, nor are they eligible for low- income housing. The creation of affordable housing options for our workforce allows communities to attract and retain quality employers. If the only housing that developers can afford to produce is intended for low- income or wealthy households, we should not be surprised to see such a disparity in our communities' income levels. To have a healthy mix of incomes, we must have housing options available for all income levels. In addition to many communities' needs for affordable workforce housing, their efforts at being sustainable may inadvertently be counterproductive to their housing goal. A recent study from the Lincoln Institute of Land Policy shows that "the presence of a state smart growth program was the strongest predictor of increases in owner cost burden" and that "the housing cost burden for renters was consistently higher than for owners." The results of this study "indicate that smart growth programs that lack an affordable housing element have been associated with increases in housing cost burdens ". "These results, coupled with differences in program design and implementation among states, suggest that if smart growth programs are to have a positive impact on housing affordability or avert a negative impact from constraints on the land market, they must explicitly require the production of housing for low- and moderate - income households, rather than merely plan for it or ignore it completely. Simply stated, program design matters." Recommendation Fund the newly created IFA Smart Growth Workforce Housing grant program. 3 Iowa Highway 32 (Southwest Arterial) - Update The Dubuque City Council, the Dubuque County Board of Supervisors, the Dubuque Metropolitan Area Transportation Study (DMATS), the Dubuque Area Chamber of Commerce and the Greater Dubuque Development Corporation have all identified the completion of the Iowa Highway 32 (Southwest Arterial) project as the No. 1 surface transportation priority in the Dubuque area. The proposed Iowa Highway 32 (Southwest Arterial) project will be a 6.1 -mile four -lane divided freeway with priority one - access control between Highway 61/151 and Highway 20. The Iowa Highway 32 (Southwest Arterial) project will provide a significant national and regional economic benefit in providing a direct connection between the new Dubuque Technology Park on Highway 61/151 with the new Dubuque Industrial Center West, and the existing Dubuque Industrial Center near Highway 20. The highway then extends north to John Deere Dubuque Works via the Iowa Highway 32 (Northwest Arterial). Dubuque is the regional economic center for the Iowa, Illinois and Wisconsin tri -state area. With local international companies such as the John Deere Dubuque Works, Nordstrom Distribution Center, McGraw -Hill Publishing Company, A.Y. McDonald Manufacturing, Flexsteel Industries, Kendall /Hunt Publishing, and the Hormel Food Corporation, it is critical to construct the Iowa Highway 32 (Southwest Arterial) as an alternate, direct route for commercial traffic through southwestern Dubuque. The Iowa Highway 32 (Southwest Arterial) project will significantly improve the efficiency and safety of the regional highway transportation network which is vital for the statewide, national and global distribution of local commerce and the continued growth and sustainability of the strong regional economy. The engineering consultant, EarthTech Inc. has completed the preliminary engineering design phase. With the preliminary engineering completed and property acquisition limits identified, the City has the information needed to begin the property acquisition process. In the upcoming year, the City, with the assistance of a right -of -way acquisition agent, will start contacting impacted property owners to initiate discussions regarding the acquisition process and the property needed to construct the Iowa Highway 32 (Southwest Arterial). The property acquisition phase is anticipated to take approximately two years to complete. Also in the upcoming year, the City's intends to hire a consultant to begin the final engineering design phase of the project. The final design phase is anticipated to take two years to complete. The City will also begin the environmental and cultural resource mitigation phase of the project. As properties are acquired, mitigation work will be completed prior to the start of construction. As a result of hard work from Dubuque's congressional delegation, the Federal Transportation Bill (SAFETEA -LU) includes funding for the Iowa Highway 32 (Southwest Arterial) in the amount of $26.18 million. The City extends its sincere appreciation to Congressman Nussle, and U.S. Senators Grassley and Harkin for targeting this project with federal appropriation authorization, which will play a critical role in moving forward with this project. The Iowa Highway 32 (Southwest Arterial) project has been part of the State TIP for the past 10 years and continues to be because the local Metropolitan Planning Organization, DMATS, has committed $10 million in Surface Transportation Program (STP) funds and dedicated local Enhancement funds of approximately $550,000 through 2013 for the project. 4 Federal Appropriations Amount SAFETEA - LU Highway Project Description (Section 1702) $ 15,200,000 * Transportation Improvements (Section 1934) $ 4,180,000 * Transportation Improvements (Section 1934) $ 6,800,000 * Technical Corrections Bill (SAFETEA -LU US20 Bridge) $ 5,500,000 * Federal Funding: $ 31,680,000 Local Funding Amount DMATS STP Funds $ 6,200,000 DMATS Enhancement Funds $ 550,000 City - Capital Improvement Funding $ 3,800,000 TIME -21 Funding (City / County Allocation) $ 4,900,000 Total Local Funding: $ 15,450,000 The Technical Corrections Bill was passed which authorized $5.5 million in unused SAFETEA- LU funding for the U.S. 20 Bridge to be transferred of the Iowa Highway 32 (Southwest Arterial) project. The following table summarized the appropriated federal funding to -date for the Iowa Highway 32 (Southwest Arterial) project. * After Obligation Limitation Reduction: Total Federal Funding: The City has met with Iowa Department of Transportation staff members several times to emphasize the importance of the Iowa Highway 32 (Southwest Arterial) project to the State and to the Dubuque area; however funding for the project was not included in the Iowa DOT's Five - Year Transportation Improvement Program. The Iowa DOT wants a local financial commitment to this project that does not include federal funds. The Iowa DOT Commission has challenged both the City and County to seek local funding for this project and pursue all viable options to fund the shortfall. The Iowa Highway 32 (Southwest Arterial) continues to be a top priority, therefore, other strategies are being evaluated to ensure that this project moves forward. In meeting this challenge, the City has committed the use of local DMATS funding on eligible local street construction projects which will allow local funds to be transferred to the Iowa Highway 32 (Southwest Arterial) project and used as matching cost for the federal funds. Staff has identified approximately $3.8 million in local funds that could be shifted using DMATS funds which would allow the leveraging of approximately $15.2 million in federal dollars. The following table summarized the local funding committed to -date for the Iowa Highway 32 (Southwest Arterial) project. 5 $ 27,000,000 Project Costs Amount Phase I - Cost Estimate $ 80.35 Million • 2 -Lane Highway • Hwy 20 to Hwy 61/151 Federal Funding $ 27.0 Million Local Funding $ 15.45 Million Funding Gap: $ 37.9 Million The City is also seeking financial assistance through the State of Iowa Department of Transportation Revitalize Iowa's Sound Economy (RISE) Program. The Iowa DOT has presented a possible funding scenario to use the RISE grant program to loan $5 million which could be used as matching funds for the federal appropriation dollars. Due to project funding constraints, the City has been preparing cost scenarios and evaluating construction alternatives for completing components of the project with currently available federal, state and local funding. An alternate interim phase under consideration would include the acquisition of all right -of -way required for the complete four -lane project, complete the environmental and cultural resource mitigation phases, complete final engineering design which would provide for the grading of four -lanes between Highway 151/61 to Highway 20, pave two -lane highway between Highway 151/61 to Highway 20, partial interchanges at Highway 151/61 and at Highway 20, and a temporary at -grade intersection at North Cascade Road. The preliminary cost projection for the interim two -lane highway is $80,350,000. The interim two -lane highway would function until future additional funding is available to complete the remaining two -lanes and construct full interchanges which would fully complete the four -lane divided freeway and should provide a reasonable level of traffic service through the year 2015. The preliminary cost projection for the complete four -lane freeway project is $112,000,000. The following table summarized the project costs for the alternate interim construction phase for the Iowa Highway 32 (Southwest Arterial) project. Requested Action: The City requests any additional financial assistance that can be provided on the federal level, as well as any assistance that can be provided to encourage the Iowa Department of Transportation Commission to include the Iowa Highway 32 (Southwest Arterial) project in their Five -Year Transportation Improvement Program and commit funding toward this vital project. The City also requests the support of additional appropriations to reduce the current funding gap ($37.9 million) to complete the two -lane highway between Hwy 20 and Hwy 61/151 highway and help provide the match to allow the expenditure of federal funds. 6 The City requests supporting the transfer of the remaining unused Federal SAFETEA -LU appropriation funding for the US Hwy 20 Mississippi Bridge in the amount of $20 Million, and shifting the funding to the Iowa Highway 32 (Southwest Arterial) project. State Mandates Cities are often faced with implementing mandates from the state and federal governments without receiving the necessary funds for implementation Requested Action: Enact legislation that exempts local government from providing any new service or engaging in any new activities mandated by the state if the state does not provide full funding. Property Tax The current tax structure for state and local governments is a mix of tax laws, rates and policies that do not provide for a fair and consistent tax system. The Iowa League of Cities and the Iowa State Association of Counties (ISAC) have identified key areas needing revision for a comprehensive tax reform in Iowa. They include: 1) changes to assessment and valuation procedure, 2) changes to city and county budgeting processes, 3) developing an alternative to current property tax limitations, and 4) elimination of the rollback formula and homestead exemption. Requested Action: Work with the Iowa League of Cities, the Metropolitan Coalition and ISAC to approve legislation to design a tax structure that provides tax equity and policies that are consistent with an overall direction for state and local government taxation. Homestead Tax Credit Each year the City of Dubuque tries to minimize the tax asking for the average homeowner by not increasing, and in some years, decreasing the City's property tax rate. The State of Iowa has created a partially unfunded mandate through the establishment of the Homestead Tax Credit. The cost for the lack of full funding of this credit is passed on to taxpayers and diminishes the City of Dubuque's efforts to keep property tax rates low. The credit was funded by the State at 85% in 2003 -2004, 81% in 2004 -2005, 78% in 2005 -2006 and 2007 -2008, and 73% in 2007 -2008. Homestead Credit - State should fund 100% of these credits. MFPRSI - State should fund more of their obligated percentage for their share (3.79 %) MFPRSI Employee contribution - change legislation to lift the cap from 9.4% (City contribution will rise to 30% in 3 years, employees should help with this cost) Requested Action: Reinstate full funding for the Homestead Tax Credit. Tax Increment Financing (TIF) The Iowa Code provides that cities can use TIF for certain public and private economic development purposes once an urban renewal plan is approved and an urban renewal district 7 established. The ability to use TIF to assist private economic development projects in urban renewal districts has become a very useful financing and incentive for private investment. Requested Action: Support efforts to maintain Tax Increment Financing as an economic development financing tool. Funding of Major Transportation Projects The State of Iowa has used a strategy of allocating funds for completing the major transportation projects in the state as opposed to using a piecemeal approach. This strategy has been successful, with extensive work being completed on major corridors. The same strategy should be used for major projects in larger cities that require significant funding commitments for completing the projects in a reasonable amount of time. An example is the SW Arterial /Hwy 32. Requested Action: Support efforts to continue the strategy for funding major transportation projects throughout the state, including projects that have federal earmarks. Passenger Rail: Through the Envision 2010 process, the Citizens of Dubuque have established a Passenger Rail Committee to support and promote the return of passenger rail service from Chicago to Dubuque. Governor Culver has signed a Memorandum of Understanding with the Governor of Illinois to implement passenger rail service between the States of Iowa and Illinois. Iowa Code Section 327J establishes the Passenger Rail Service Revolving Fund. Monies deposited into the fund shall be used to pay the costs associated with the initiation, operation and maintenance of passenger rail service. In FY 2010, $3 million was appropriated to the fund through I -JOBS legislation. "Expanding passenger rail service in Iowa is one of my top transportation priorities," said Governor Culver. "We are already at work to reconnect some of Iowa's largest cities — such as Dubuque, Iowa City and the Quad Cities — to Chicago. These funds will help in our work to expand passenger service across Iowa, and contribute to our state's economic strength." Requested Action Support funding and required operating subsidy to return passenger rail from Chicago to Dubuque. Border Communities Incentive Proqram In the 2006 Iowa legislative session, House File 2731 was approved to create the Targeted Jobs Withholding Tax Credit Program. The Department of Economic Development oversees this program. 8 The Targeted Jobs Withholding Tax Credit Program is a program for cities located adjacent to neighboring states to remain competitive in attracting new jobs. Receiving project city status for this program will make incentives available in the amount of up to three percent of the wages paid by the company on new eligible jobs. The program will only be available to four cities which have been chosen as pilot project cities. This program should be expanded to more communities that fit the qualifying characteristics. This program would help to keep Iowa's communities that border other states more competitive when attracting new business to the state. Requested Action: Support efforts to expand this program to allow more communities that fit the qualifying characteristics to be eligible to receive the incentive. This program would help to keep Iowa's communities that border other states more competitive when attracting new business to the state. Economic Development The role of city government in economic development is crucial. Economic activity requires roads, streets, airports, water and sanitation. New jobs necessitate more and better housing. Growing businesses seek quality of life amenities for employees and families, such as parks, recreation and libraries. Protection and safety of property and life must be assured. This can only be accomplished with the strong support of an effective city government. Successful quality of life programs need continued funding, such as Vision Iowa, REAP, CAT funds, RECAT Iowa Great Places, the Iowa Main Street program funds, and tax credits for historic preservation. Requested Action: Protect and enhance economic development tools enabling cities in Iowa to promote economic improvement throughout the state. Eminent Domain During 2006, the Legislature approved changes to the Eminent Domain Law. Included in the changes, and of particular concern, is the requirement that seventy -five percent or more of the area included in the urban renewal plan must consist of property in a slum or blighted condition at the time the plan was established in order for the entire project or acquisition plan area to be subject to condemnation by the municipality. We believe that a 51% threshold is more reasonable. Furthermore, the new language provides that the project or acquisition plan area shall only include the adjacent and contiguous parcels necessary for the completion of planned activities for a specific business or housing project. This language would be limiting for downtown development projects that may be larger in scope than just the parcels that meet the definition of slum and blight. Lastly, the burden for the use of eminent domain for airport project is increased by the requirement that the Board of Supervisors must hold a public hearing and pass a resolution unless the airport improvement is FAA- required. This creates additional layers of burden on a municipality. 9 Requested Action: Support efforts to amend sections of the Eminent Domain Law to allow for changes as proposed by the Iowa League of Cities and noted above. Fully Funding Enrich Iowa Program Enrich Iowa is a state aid program for Iowa's libraries. Until recently, Iowa was one of eight states without direct state aid to libraries. Current state funding is at $1 million statewide versus the recommended $3 million for full funding. If Enrich Iowa were fully funded, the Carnegie - Stout Public Library could realize at least $100,000 a year in state aid. Requested Action: Support efforts to increase funding for the Enrich Iowa program. Enterprise Zone Incentives The Enterprise Zone legislation was written to promote private investment in economically distressed areas of a city or county. To assist new employees of companies locating in enterprise zones, the legislation provides for employers to establish a capital fund for down payments or rental subsidies. The business funds this program through a credit from state withholding taxes, based on the wages paid to the participating employees. An amount equal to 1.5 percent of the gross wages paid by the employer is credited from the payment otherwise withheld and used to capitalize this fund. This feature of the legislation has not been utilized to date. One reason is that the credit produces so little capital for the housing assistance program. For an employee earning $10 per hour, the credit equals approximately $300. Typically, down payment assistance programs offer $5,000 to $6,000; rental subsidy programs average $2,500 to $3,000 annually. In order to make this program effective, the credit for withholding should be increased. Another option is to allow the credit to be "pooled," to be made available to all eligible employees. As the legislation currently is written, the 1.5 percent credit is made available on the basis of withholding from individual employees — for the benefit of only that employee. If the credit could be aggregated, a larger capital fund could be established, from which all employees purchasing or renting housing in the enterprise zone could access funds for their housing needs. Another reason for lack of employer participation in this program is that the legislation requires the employer to choose between use of the tax credit for job training or for providing a housing assistance program. Employers to date have chosen to use the credit to pay for training new employees. Requested Action The legislation should be amended to provide the credit for both job training and employee housing assistance and to "pool" the funds. This will increase the tax credit and increase interest in the program by employers. 10 Hotel and Food Establishment License Fees In the 2006 legislative session, House Study Bill (HSB) 648 was introduced. This bill proposed increasing the hotel and food establishment license fees, bringing them in line with costs of running the program. The bill passed in 2007 increased the various food license fees by a range of 20 - 30 %. This increase will still not pay for the cost of doing risk -based inspections, as required by Iowa Code. Requested Action: Support legislation that will fully fund State mandated health inspections for Hotel and Food Establishments through increased license fees. School Food Program Inspections An amendment to Section 9(h) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1758(f)(5)) went into effect July 2005. This amendment imposes an unfunded mandate requiring at least two school food program inspections per year instead of one. Now, the City of Dubuque Health Services Department will have to inspect school food lunch programs (which actually cook food on -site vs. just serving food prepared at another site) two times per year, but will not receive any license or inspection fees for the service. The City does not believe it is necessary to inspect the school food lunch programs more than once per year based on past inspections. This unfunded mandate will add twelve inspections for a total of 50 annual uncompensated inspections for school lunch programs. Requested Action: Oppose legislation for a second School Food Program inspection, and /or create a funding mechanism to cover the costs of school lunch program inspections. In addition, both the Health Services Department and the Housing and Community Development Department would like Iowa Code Section 364.12 (h) changed. Currently, a notice of violation must be sent via certified mail to a property owner if the City performs the required mitigation of the problem and assesses the cost to the property owner. We suggest that a notice be sent via regular mail to the property owner. Oftentimes, it is difficult for people to collect or pickup certified mail, particularly if they are not home at time of delivery. Certified also adds a significant cost ($2.87) to the mail of each notice. 411 Contributions The City of Dubuque's contribution to the retirement system for police officers and firefighters went from 17% of wages in Fiscal Year 2010 to 19.9% of wages in Fiscal Year 2011. Requested Action: Any future increases in funding to support the retirement system for police officers and firefighters should be borne by the employees and not the cities. In the event there is a reduction in the funding needed to support the retirement system for police officers and firefighters, the cities' contributions to the system should be reduced. 11 411 Subrogation Currently in Chapter 411, cities are not allowed to seek reimbursement from Third Parties for costs incurred for Police and Fire injury and illness claims. As such, a Police or Fire employee may collect against the City for an injury or illness claim and collect a second time for the same incident against a Third Party. If the employee is successful in getting payment from the Third Party, the City is currently not able to obtain reimbursement (subrogate) from the Third Party payment. Requested Action: Amend Chapter 411 to allow cities to seek reimbursement from third parties for costs incurred for Police and Fire injury and illness claims. Seasonal Employees Currently, temporary employees that accept a job that starts on a specific date and ends on a specific date are eligible to collect unemployment. For example, temporary employees hired for three or four months to mow lawns during the summer are allowed at the end of the summer to collect unemployment even though they know the job is temporary when hired. This puts a costly burden on the employer. Requested Action: Amend the unemployment law so that temporary employees are not allowed to collect unemployment. Underage and Binge Drinking Current legislation provides for a penalty to be placed upon the establishment that serves minors. However, only a simple misdemeanor penalty is placed upon the underage person attempting to purchase alcoholic beverages. This does not discourage this problem, which is particularly prevalent in college -age students. In an effort to combat underage consumption and "Binge Drinking" by our college age population, we would ask legislative consideration to increase the simple misdemeanor penalty found in Iowa Code Chapter 321.216 and 123.50 to a higher penalty. Requested Action: Pass legislation to increase the simple misdemeanor penalty found in Iowa Code Chapter 321.216 and 123.50 to a higher penalty. Eliminate "Good Moral Character" language from Iowa Code One of the criteria for the issuance of a State of Iowa liquor license is determined by "Person of Good Moral Character" as defined in State of Iowa Code 123.3 (26)(d). The State takes into consideration the local municipality's interpretation of "Person of Good Moral Character" prior to issuing a liquor license. Requested Action: Urge legislators to eliminate "good moral character" language and replace it with objective standards. 12 Civil Rights Enforcement Civil rights agencies are the law enforcement tools for civil rights laws. The Iowa Civil Rights Commission works in partnership with the Dubuque Human Rights Commission and other local commissions to successfully leverage resources to enforce civil rights laws across Iowa. Apart of that partnership includes a contract arrangement in which local commissions are reimbursed for processing cases that the State Commission would have to process in the absence of a local commission. In addition, the Iowa Commission also is responsible for enforcement of civil rights in Dubuque County. The state and local agencies are leaders in efforts to educate business and industry on civil rights laws, on diversity, and on preventing discrimination. Increasing caseloads and outreach obligations with minimal staff are impeding Commissions' abilities to protect the public and sending the wrong message regarding the value we place on diversity and inclusivity, at a time when we are struggling as a state to attract economic development and build our workforce. Civil rights protection provides the mechanism to address and prevent problems in the workplace that could hamper new Iowans from locating and remaining in our state. Requested Action: Support budget increases for the Iowa Civil Rights Commission to enable the Commission to sufficiently reimburse local commissions for case processing and reduction in case backlogs and delays and to fully support statewide education and outreach efforts. Airport Issues: State Aviation Fund Beginning in FY 2008, revenues from aviation fuel taxes and aircraft registration fees will be deposited into the State Aviation Fund. Revenues from use taxes collected from aircraft sales must also be deposited into the State Aviation Fund to be reinvested into Iowa's air transportation system. Recommend that the State Aviation Fund be restructured to serve as a Trust Fund in a similar fashion to the Federal Airport and Airway Trust Fund. Vertical Infrastructure Funding At a minimum, increase funding for the highly successful Commercial Service Vertical Infrastructure program to at least $1.75M (current appropriation of $1.5M) and increase General Aviation Vertical Infrastructure program funding to at least $1.0 M (current appropriation of $750,000) for facility improvement projects at public- owned, public -use airports in Iowa. Increase funding for the highly successful Commercial Service Vertical Infrastructure program to at least $2M (current appropriation of $1.5M) and increase General Aviation Vertical Infrastructure program funding to at least $1.5M (current appropriation of $750,000) for facility improvement projects at public- owned, public -use airports in Iowa. Air Service Development and Retention Iowa's economy depends on regular, dependable and affordable commercial air service. Maintaining air service is essential to the economic recovery of all corners of the state. We support the establishment of an Air Service Retention Task Force made up of representatives from: the Department of Transportation's Office of Aviation, Department of Economic Development, A.A. representative from each of the state's commercial service airports, two representatives from commercial airlines serving the state and a member of the majority and 13 minority parties in the House and Senate. The Task Force shall develop a plan for the retention of current passenger airline services. Iowa is underserved by commercial air carriers. Recommend establishing a grant program using revenues from aviation fuel taxes already collected to assist smaller commercial service airport in developing and implementing air service programs. Taxation Aviation Tax Policy Iowa airports and aviation industry have prudently requested sales and use tax policy changes to remain competitive with our neighboring states. The repeal or capping of any aviation sales and use exemption would severely cripple the state's airports and aviation industry. Airport Property Public property is exempt from property taxes. Publicly- owned, public use airports are public facilities. Airports need legislative clarification that airport property used for agriculture and other (non- aviation uses) is not subject to property taxation. The main purpose of such property is to maintain runway protection zones and compatible land uses for the safety of aviation activities. Technical Correction of Use Tax Increase for Aircraft Sales We request a technical correction to Code section 423.5 that would tax aircraft sales at 5 percent. The 2008 session of the Iowa Legislature included SILO legislation passed in House File 2663 that was signed into law by the Governor. In the legislation, the use tax rate on the purchase of automobiles subject to registration remained at five percent, however, use tax on the purchase price of aircraft increased from five to six percent. This increase is a hindrance to the aircraft sales industry in Iowa and an unfair burden not imposed on other transport vehicles. It appears it may have been an unintended consequence of the changing legislation. The amendment to Code section 423.5, unnumbered paragraph 1 that makes this change was included in Section 11 of House File 2663: http: / /coolice.legis.state. ia. us /Cool- ICE /default. asp ?category= billinfo& service = billbook &qa= 82 &hbi11= HF2663 Airport Animal Depredation Effective Control of Wildlife Aviation Hazards Deer and other animals continue to be hazards to aviation in our state. Pilots and airport managers report an alarming increasing in the number of runway incursions by wild animals. Public airports should be allowed to engage in timely and appropriate depredation efforts for their facilities. Rebuild Iowa Provide for continuation of Rebuild Iowa Infrastructure Fund appropriations for vertical infrastructure projects at both commercial and general aviation airports. Expand Cities' Extraterritorial Jurisdiction Cities have extraterritorial jurisdiction (ETJ) for up to two miles from their corporate limits for subdivision review and approval only if the County has zoning for the rural areas. Extending the cities' ETJ to include review and approval of zoning changes would facilitate planned and managed growth. Legislation should provide incentives for governments to voluntarily plan 14 together and identify recommended land use impact to be considered during the planning process. The League supports legislation that expands land management practices such as ETJ of cities to include review and approval of zoning changes. Requested Action: Support legislation enabling cooperative planning and effective land management practices. Property Owners on Historic Preservation Commissions Section 303.34 of the Iowa Code requires that "At least one resident of each designated area of historical significance shall be appointed to the commission." This requirement is problematic for the City of Dubuque's Old Main Historic District, which is primarily commercial. It would be beneficial for the City in the recruitment and retention of commissioners to be able to appoint property owners to represent historic districts. Furthermore, since historic preservation regulations apply to the rehabilitation, renovation and restoration of property, allowing property owners to serve on the commission would be appropriate. Furthermore, some Iowa cities are experiencing burgeoning commissions as historic districts are designated and representatives of each district are appointed. To avoid "over- populating" a commission, allowing a majority of the districts to be represented on a historic preservation commission would be appropriate. Requested Action: Enact legislation allowing property owners to represent a majority of the historic districts on the Historic Preservation Commission. Appeal of Actions by Historic Preservation Commission Section 303.34 of the Iowa Code states that an aggrieved party may appeal the action of a historic preservation commission to the City Council, and then to district court. The City Council, like the court, has to consider whether the commission exercised its powers and followed the guidelines established by law and ordinance, and whether the commission's action was "patently arbitrary and capricious." This process places the City Council in the difficult and uncomfortable position of interpreting technical guidelines and determining their appointees "arbitrary and capricious." The City Council would support an alternative process. Requested Action: Consider legislation providing an alternative appeals process regarding an action of the historic preservation commission. Ambient Air Quality Rules In July 2004 the Environmental Protection Commission set H2S limits at 30 parts per billion (ppb) with a 60 minute average. Due to the fact that this is an air quality rule, it has to affect everyone, farmers, industries and municipalities alike. This rule could have disastrous effects on wastewater plants causing cities to provide for major H2S, ammonia and other mercapton control system that are very expensive and costly to operate. Requested Action: Enact legislation that exempts local government from the 30 ppb rule. 15 Increase REAP Funding in the Environment First Fund REAP stands for Resource Enhancement and Protection. It is a program in the State of Iowa that invests in, as its name implies, the enhancement and protection of the state's natural and cultural resources. The following four state agencies administer REAP programs: Department of Natural Resources Department of Agriculture and Land Stewardship, Division of Soil Conservation Department of Cultural Affairs, State Historical Society Department of Transportation REAP funds go into eight different programs based on percentages that are specified in state law. REAP Fund Allocation: First $350,000 each year goes to Conservation Education and 1% of balance goes for DNR Administration. The remaining balance is then divided as follows: 1) DNR Open Space 28% 2) City Parks and Open Space 15% 3) Soil and Water Enhancement 20% 4) County Conservation 20% 5) DNR Land Management 9% 6) Historical Resources 5% 7) Roadside Vegetation 3% REAP is funded from the state's Environment First Fund (Iowa gaming receipts) and from the sale of the natural resource license plate. The state legislature sets the amount of REAP funding every year, and in the recent past that level has been $10 million from the general fund. Interest from the REAP account and receipts from the sale of natural resource license plates add about $1.0 million to this appropriation for a total of $11 million a year. In the last two years, REAP has been appropriated $18 million, compared to the 20 -year average of $11 million. Requested Action: Request that the Iowa Legislature work to increase REAP to full funding of $20 million, Assessor's Bill Property tax experts or representatives are now part of the tax appeal process. A tax representative can file an appeal for a large commercial property under a contingency basis, receiving their pay based on a percentage of the property tax savings they can achieve for their client. In many of these cases little or no money is expended by the taxpayer. The representative files a protest with the Board of Review and supplies little or no information to the Board. The Board may deny the protest but the tax representative will file a protest to either District Court or the Property Assessment Appeal Board. At this point the tax representative may produce more information or they may try to negotiate a settlement. On the assessor's side it may be very costly to hire appraisals and fight this out in Court. A single appraisal for a large Commercial or Industrial property will easily exceed $5000. Also, many appeals to the Board of Review are filed at the last minute with a statement such as information to be presented at hearing. Many appellants never provide the information or 16 provide it very late in the Board of Review session so the Board is unable to reach a well founded conclusion. Requested Action: Request the Iowa Legislature to limit appeals to District Court and the Property Assessment Appeal Board to matters and information that were presented before the local Board of Review. Ask the Iowa Legislature to review appeal dates and Board of Review sessions to allow sufficient time for appellants to present all their information. CAP Act of 2009 (H.R. 3745). The CAP (Community Access Preservation) Act of 2009 introduced by Wisconsin Rep Tammy Baldwin recognizes the important role that Public, Educational, and Governmental (PEG) access channels play in local communities and addresses some of the concerns facing these channels. Legislation that establishes national standards for interoperable public safety standards for first responders. Legislation that preserves and extends municipal government authority to provide communications services to their constituents. Legislation that overturns the FCC cable franchise order and returns to the local franchising scheme set out in the 1984 Cable Act. Property Taxes on Local Governments Iowa Code section 427.1(2) is the controlling determination of eligibility for a property tax exemption for property owned by a city that is being leased to federal and county entities. A Supreme Court case involving the City of Oskaloosa filed October 21, 1992 addressed the issue of city owned property being leased by the United States Postal Service. The court's decision was that property leased to another governmental entity is not exempt from property taxes because the use must before a use that comes within the duty of the governmental unit that owns the property. Cities and Counties have different duties and responsibilities. In my cases, joint use of buildings or property by governmental agencies provides a benefit to local tax payers. However, this Supreme Court decision actually penalizes local governments that share building space. A prime example of this is the lease of extra space in the Historic Federal Building (owned by the City of Dubuque) to Dubuque County for Juvenile Services, and the Drug Task Force. Some space is also leased to the U.S. Post Office. Based on the Supreme Court decision, these governmental units are required to pay property taxes on space leased from the City. Requested Action: Amend Iowa Code section 427.1 to exempt property from property taxes if it is owned by one governmental unit and is leased to another governmental unit. Arts and Culture Background Arts and culture is a strong component of tourism, economic development and quality of life for all Iowans. Great livable communities in Iowa must support culture, arts, history, and focused community development. Investment in cultural programs improves the quality of life in Iowa 17 and helps to attract and retain a vibrant workforce which assists in developing and promoting Iowa's economic vitality. Iowa ranks 42 of all states in per capita spending of $0.34 for arts and culture. The national average is $.90. States with similar populations out rank Iowa. Utah spends $1.01 (14 Arkansas spends $.74 (25 and Mississippi spends $.65 (27 In 2004, the Dubuque City Council approved an Arts and Cultural Affairs Advisory Committee, $35,000 in annual project grants and established a Downtown Cultural Corridor. A $200,000 annual operating and special project support funding was established in 2005 and $300,000 in capital funds was allocated for the Art on the River public art program for ten years. Dubuque created a part time staff position of Arts and Cultural Affairs Coordinator in FY2009 with partial funding from Iowa Community Cultural Grants in 2009 and 2010. The coordinator works closely with the Commission to promote and increase awareness and market the arts and activities and allocate budgeted funding for the arts and cultural activities. The position has enabled the Commission to develop goals and priorities, to enhance the public art program by creating standards of excellence using regional, state and national models and refining the grant process to ensure the taxpayer's money is used in the best possible manner. Although much has been accomplished, many opportunities remain to strengthen and expand Dubuque's cultural vitality. The recent designation of the Historic Millwork District plan brings integrated strategies that include design guidelines, historic preservation, community gardens, central gathering spaces, arts venues and artistic streetscapes. The City markets itself as a major tourist destination featuring world class museums, cultural opportunities, and historic architecture. Over $1.7 million visitors come to Dubuque each year, many of them Iowans who are vacationing closer to home. The Dubuque Chamber of Commerce estimates that at least two thirds of the 98,000 people in Dubuque County visit the Port of Dubuque, where the City's temporary art exhibit is held, one or more times in the course of a year. The City of Dubuque has provided more than $1.5 million dollars in funding for the arts since the establishment of the City's Arts and Cultural Affairs Advisory Commission in 2004. The Commission has managed the City's investment, allocated among three programs: $1.2 million has been awarded through the Operating Support Grant Program; $240,000 has been awarded through the Special Projects Grant Program that has leveraged a total of $550,000 in arts projects in our community, and; $120,000 has funded the Art on the River annual temporary public art exhibit at the Port of Dubuque. Not only is the City of Dubuque reliant upon Department of Cultural Affairs funding for the arts, most of the art and cultural organizations and schools in Dubuque regularly receive funding from the various grant programs offered through the Department of Cultural Affairs, The latest information from 2006 shows an economic impact of arts and cultural organizations in Dubuque of $22 million. A new economic impact study from Americans for the Arts will be conducted in 2011. Requested Action: Support programs in the Department of Cultural Affairs (Iowa Arts Council, State Historical Society of Iowa) to continue to recognize and promote Iowa's cultural heritage as key in recovery and strengthening of all Iowa communities. State funding of these programs leverages local support for arts and cultural organizations, historical organizations, educational programs, rehabilitation of historic buildings, and projects involving a variety of historic resources. These cultural activities also employ accountants, designers, contractors, union workers, etc. Specific programs to support include: 18 • Provide specific funding for the Cultural Leadership Partners program at $250,000 and for the "Major and Mini Grants" program at $500,000 to ensure continuation of these programs without dependence on budget appropriations for the Iowa Arts Council. • Support funding for Iowa Community Cultural Grants at $300,000. • Match the federal funding of $40,000 for Big Yellow School Bus Grants with $80,000 by the state to double the required state level funding and expand program language to include all historical and cultural destinations. • Maintain funding for the Historic Site Preservation Grants in the Department of Cultural Affairs at $1 million. • Provide appropriate staff support within the Department of Cultural Affairs to provide previous levels of services to communities and citizens of Iowa through all programs and departments. Energy Efficiency & Alternative Energy: Recently, the American Council for an Energy- Efficient Economy ranked Iowa 12 in the nation for its efforts to promote energy efficiency. Iowa scored highly in the category of building energy codes as one of only 17 states with a statewide code that meets or exceeds the latest International Energy Conservation Code standards for both residential and commercial buildings. Businesses, residents and local governments have taken advantage of existing incentive programs, but still have much work to do in order to make their new and existing buildings more energy efficient. As energy efficiency is achieved, private and public organizations as well as individuals have begun to explore a variety of alternative energy options to increase their energy independence, reduce dependence on coal and oil, reduce greenhouse gas emissions, and improve public health. The City of Dubuque and local non - profits and businesses have established a strong working relationship with the Office of Energy Independence and have relied on their staff and programs for both technical support and grant funding to achieve the sustainability goals of our community. Requested Action: Continue to support the Office of Energy Independence and its programs. Continue successful energy efficiency incentive programs and explore opportunities to remain competitive with other states offering incentives for the installation and utilization of alternative energy. Food Residual Composting Iowa Administrative Code 567 — Chapter 105 regulates the composting of various materials, including yard waste, agricultural byproducts, garbage, dead animals, and food residuals. At the present time, the noted regulations require costly infrastructure improvements before a permit is granted by the Iowa Department of Natural Resources to allow the composting of food residuals from homes, grocery stores, restaurants, and cafeterias. As a result, all but three (3) of Iowa's forty -five (45) landfills continue to bury their service area's food residuals instead of composting them. 19 Requested Action: Amend Iowa Administrative Code 567 — Chapter 105 to encourage Iowa's other forty -two (42) landfills to compost, rather than landfill, food scrap residuals. Healthy Local Foods During the 2010 Legislative Session, the Legislature charged the Leopold Center for Sustainable Agriculture with preparing a local food and farm plan containing policy and funding recommendations for supporting and expanding local food systems and for assessing and overcoming obstacles necessary to increase locally grown food production. The Healthy Local Foods principle of Dubuque's Sustainability Model aims to provide benefits of wholesome food from local producers, distributors, farms, gardens and hunters to all. The City and its partners engaged in the Healthy Local Foods initiative have participated in the forming of the Local Food & Farm Plan. Requested Action: Provide policy direction, funding and other resources to implement the recommendations of the Local Food & Farm Plan to be delivered to the Legislature in January 2011. 20