Legislative Priorities for City
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MEMORANDUM
June 16, 2004
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: City of Dubuque Legislative Policy Suggestions to Iowa League of Cities -
2005 Legislative Session
Assistant City Manager Cindy Steinhauser has worked with City staff to develop a
recommended set of State legislative priorities.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Michael C. Van Milligen j (]'f))
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Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
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City Of Dubuque
Legislative Policy Suggestions to
Iowa League of Cities
2005 Legislative Session
State Budget
In response to a revenue shortfall in 2003 the State of Iowa implemented across-
the-board cuts in expenses. Some of these cuts reduced revenues to cities, with
no relief to cities for state-mandated programs. Concerns remain over the
impacted of the reduced revenue to cities and that similar action will be taken in
the 2005 session.
Requested Action: The state should restore revenues to cities that were cut in
an effort to make cities whole.
Property Tax
The current tax structure for state and local governments is an antiquated mix of
tax laws, rates and policies that do not provide for a fair and consistent tax
system.
Requested action: Establish a committee to review and recommend a
comprehensive and equitable approach to reform of the property tax system.
Grow Iowa Fund
With the recent Supreme Court decision ending the Grow Iowa program, fewer
economic development tools exist for cities to retain, expand and recruit business
and industry to Iowa.
Requested action: Support legislation that would restore funding to that
important economic development tool.
Bed and Breakfast classification
The Iowa Court of Appeals recently held that bed and breakfast inns should be
classified as "single-family dwellings" for purposes of property tax under the rules
of the Iowa Department of Revenue and Finance. The Iowa Supreme Court had
denied the application for further review. The Court of Appeals decision opens
the door too much wider implications because it implies that any property built as
a single family home that still has a residential component should be classified as
residential.
Requested action: Implement legislation to change the definition of commercial
property in the State Code to include any former residential structure now
partially or fully used for a commercial purpose.
Right of Way
Section 480.a.3 of the State Code allows cities to manage public right of way and
to charge a management cost back to users of the right of way. However, no
fees are charged to telephone companies, which were grandfathered in under
State law. While the State Code allows cities to charge a management fee, there
is no definition in the Code to define management fee. In addition, the State
Code should be amended to prohibit other telecommunications operators, such
as cable and Internet providers, from falling under the definition of telephone.
Requested action: Implement legislation to provide for a definition of
management fee and to prohibit other telecommunications operators, such as
cable and Internet providers, from falling under the definition of telephone.
Bank Franchise
In the 2004 session, the State removed bank franchise payments to cities. Bank
Franchise fess are still collected by the State, however they are no longer
distributed back to the cities from which they are collected but are retained by the
State in an effort to deal with State shortfalls.
Requested action: Restore bank franchise payments to cities.
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, which require significant funding commitments for
completing the projects in a reasonable amount of time. Examples include the
Southwest Arterial, the Julien Dubuque Bridge and U.S. 20/Dodge Street.
Requested Action: Support efforts to continue the strategy for funding major
transportation projects throughout the state.
Tax Increment Financing
Tax Increment Financing (TIF) is an important economic development tool that
has been used by cities to revitalized downtowns and older parts of the city. The
ability to use TIF to assist private economic development projects in urban
renewal districts has become a very useful financing tool and incentive for private
investment in urban renewal districts. TIF projects generate new value and new
taxes, as well as create new jobs. TIF provides a source of funding for significant
public improvement projects and provides the impetus to revitalize older areas of
a city. Over the twenty years that Dubuque has approved private TIF projects,
the 21 private projects directly assisted with TIF invested over $105,400,000 in
our community. The TIF assistance accounted for 15%, or $15,756,000 of the
total investment, a 1:1 private to public dollar match.
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Requested action: Oppose efforts to modify TIF, as proposed in HF 686 during
the 2004 legislative session.
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 $3,000 to $5,000; 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 employee 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.
411 Subrogation
Currently the State prohibits cities from seeking subrogation against Third Party
Claims involving medical and temporary disability payments. This allows the
injured party to collect twice for the same injury once from the city and once from
the Third Party who caused the injury.
Requested action: Enact legislation to allow cities to seek subrogation for Third
party claims for medical and temporary disability payments.
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Military Tax Credit
The State of Iowa provides for veterans to receive a military tax credit on their
property taxes. The credit reduces their City property tax by the levy rate of the
City, which is $10.76 per $1,000 of valuation. The State, however, reimburses
the City at a much lower rate, which potentially will be reduced again. This
leaves a substantial deficit for other property owners to pay.
Requested action: Enact legislation to fully reimburse cities for the State of
Iowa's military tax credits.
Military Leave
The State of Iowa provides for 30 days of Military leave from a city without loss of
benefit. Currently this legislation does not define if it is 30 calendar days or 30
working days. Furthermore, there is no definition if this is a one-time benefit or a
benefit provided for each incident when an employee is called to active duty.
Requested action: Enact legislation to define the 30 day benefit as calendar
days or work days and to define as a one-time benefit or each incident benefit.
Expand Cities' Extraterritorial Jurisdiction
Cities have extraterritorial jurisdiction (ET J) 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' ET J to include review and approval of
zoning changes would facilitate planned and managed growth. Legislation
should provide incentives for governments to voluntarily plan together, and
identify recommended land use impact to be considered during the planning
process. The City supports legislation that expands land management practices
such as ET J of cities to include review and approval of zoning changes.
Requested action: Support legislation enabling cooperative planning and
effective land management practices.
Eliminate the "20% Objection Rule" for Rezonings
Section 414.5 of the Iowa Code requires a favorable vote by three-fourths of the
City Council members - a 6 to 1 vote - to approve a rezoning request over the
written objections of 20 percent or more of the owners of the property being
rezoned, or 20 percent or more of the property owners within 200 feet of the
subject property. The concepts that nearby property owners have a say in
rezoning cases is valid; however, this must be balanced against the needs of the
entire community. At 20 percent, a minority of property owners can dictate the
outcome of community development, especially when one property owner with a
large tract of land can constitute the entire 20 percent.
Requested action: Raise the "objection percentage" of owners of property
within 200 feet from 20 percent to a simple majority (51 %); or require a favorable
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vote by two-thirds of the City Council members, or a 5 to 2 vote, when the
objection threshold is reached.
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 öwners
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
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.
IPERS deductions
The State of Iowa requires that IPERS deductions must be taken from all city
employee wages. This includes seasonal employees who are hired on a
temporary or on-call basis and meet the earnings or time period for employment
tests.
Requested action: Enact legislation to lift the requirement to deduct IPERS
from all employees hired on a temporary or on-call basis.
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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.
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