Sales Tax Increment Revenue Bonds_Flood Mitigation Program_$29MMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
Dubuque
band
AI- America City
1
2007 • 2012 • 2013
SUBJECT: Proceedings for Public Hearing on the Issuance of Not to Exceed
$29,000,000 Sales Tax Increment Revenue Bonds (Flood Mitigation
Program)
DATE: February 11, 2014
Financing Director Ken TeKippe is providing the suggested proceedings for the public
hearing on the proposed issuance of Sales Tax Increment Revenue Bonds prepared by
the City's Bond Counsel and recommends the City Council adopt the "Resolution Fixing
Date of a Meeting on the Proposition of the Issuance of Not to Exceed $29,000,000
Sales Tax Increment Revenue Bonds." The proceeds of the Bonds will be used to
provide funds to pay costs of carrying out the Bee Branch flood mitigation projects.
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 Manager
Kenneth J. TeKippe, Finance Director
THE CITY OF
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Masterpiece on the Mississippi
Dubuque
trati
M- America City
�1111�
2007 • 2012 • 2013
TO: Michael C. Van Milligen, City Manager
FROM: Kenneth J. TeKippe, Finance Director
DATE: February 11, 2014
SUBJECT: Proceedings for Public Hearing on the Issuance of Not to Exceed $29 D00,000 Sales Tax Increment
Revenue Bonds (Flood Mitigation Program)
INTRODUCTION
The purpose of this memorandum is to provide the suggested proceedings for the public hearing on the proposed issuance
of Sales Tax Increment Revenue Bonds prepared by our Bond Counsel and to present a resolution for City Council to adopt
entitled "Resolution Fixing Date of a Meeting on the Proposition of the Issuance of Not to Exceed $29,000,000 Sales Tax
Increment Revenue Bonds." The proceeds of the Bonds will be used to provide funds to pay costs of carrying out the Bee
Branch flood mitigation projects as authorized by Sections 418.14 and 384.83 of the Code of Iowa. A letter from attorney
William Noth detailing information on the bond hearing is enclosed.
BACKGROUND
The State of Iowa Flood Mitigation Program was created in 2012 establishing a Flood Mitigation Sales Tax Increment Fund.
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 sales tax
general fund and used for flood mitigation projects is $30 million a year. The maximum award for any qualifying single
community is $15 million per year. To qualify for sales tax increment funding, federal financial assistance must have been
secured for the project. The state sales tax increment cannot exceed 50% of the total project cost, so a local match is
required to be pledged in the amount that federal financial assistance fell short of 50% of the total project cost.
In April of 2013 the State Flood Mitigation Program Board was established. The State of Iowa Flood Mitigation Program
Board approved $98,494,178 in state sales tax increment funding for the Bee Branch Watershed Flood Mitigation Project in
December 2013. The Sales Tax Increment Revenue Bonds will allow the City of Dubuque to continue and complete
construction on the Bee Branch Creek, replace the flood gates and construct other elements outlined in the Bee Branch
Watershed Flood Mitigation Project. The Executive Summary of the Bee Branch Flood Mitigation Project application
submitted to the State Flood Mitigation Program Board is attached for more information.
This is the first bond of its kind being sold in the Iowa market. Financing for the project was reviewed by the City's financial
advisor, Piper Jaffray. The City has also selected an underwriter, R.W. Baird. The selected underwriter will be providing
suggestions with respect to structure, timing and marketing of the bonds being sold in order to sell the bonds with the best
possible structure and at the lowest interest cost.
The bonds shall be payable from the City's flood project fund established under Iowa Code Section 418.12, into which there
shall be deposited sales tax increment revenues received from the State of Iowa as part of the award to the City under the
Flood Mitigation Program, and to the extent necessary and provided for in the resolution authorizing issuance of said Bonds,
funds collected by the City from a supplemental levy of debt service taxes.
DISCUSSION
The proceedings are prepared to show as a first step the receipt of any oral or written objections from any resident or
property owner to the proposed action of the Council to issue the Bonds. A summary of objections received or made, if any,
should be attached to the proceedings. After all objections have been received and considered if the Council decides not to
abandon the proposal to issue the Bonds, a form of resolution follows that should be introduced and adopted, entitled
"Resolution Instituting Proceedings to Take Additional Action for the Issuance of not to exceed $29,000,000 Sales Tax
Increment Revenue Bonds."
The Council is required by statute to adopt the resolution instituting proceedings to issue the Bonds at the hearing — or an
adjournment thereof. If necessary to adjourn, the minutes are written to accommodate that action.
In the event of the Council decides to abandon the proposal to issue said Bonds, then the form of resolution included in said
proceedings should not be adopted. We would suggest that, in this event, a motion merely be adopted to the effect that such
bond proposal is abandoned.
ACTION TO BE TAKEN
I respectfully recommend the City Council hold the public hearing and approve instituting proceedings to take additional
action.
Prepared by:
KT/eml
Attachments
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Jennifer Larson, Budget Director
Masterpiece on the Mississippi
Bee Branch Watershed Flood Mitigation Project
Executive Summary
Imagine: you and your family are waiting out a tornado warning in the safety of your basement when suddenly
heavy rains produce flash flooding and floodwaters start pouring in around you. Your choice: do you stay in your
flooding basement or go upstairs and risk the tornado? Unfortunately, Bee Branch Watershed residents have
been faced with this dire situation repeatedly.
The Bee Branch Watershed, which includes Dubuque's most developed areas where over 50% of Dubuque's
residents either live or work, is continually hit hard with flash flooding — and it's NOT just a little water in the
basement. It's flooding that inundates water heaters, furnaces, and electrical boxes; it rushes down streets
from curb to curb -- stalling vehicles, stranding motorists, blowing sewer covers, and ripping up pavement. Six
Presidential Disasters directly impacting the watershed have been issued between 1999 and 2011 due to flash
flooding, with estimated damages of $69.8 million.
The Bee Branch Watershed encompasses historic neighborhoods offering some of the community's most
affordable workforce housing. Most residents are working families, many are elderly -- those least able to
recover from repetitive flood loss. For over a decade, businesses and homes have suffered losses from water
damage and disinvestment. From 2004 to 2009, commercial property values grew by 39% citywide — but fell by
6% in the flood prone area.
In response, the City has engaged consultants, state and federal partners, citizen advisory committees, and the
general public to help create, fund, and implement a watershed plan to address the flooding. The plan outlines
improvements throughout the Bee Branch Watershed, improvements that will benefit upstream as well as
downstream properties, a plan consistent with both the Dubuque County Multi- Jurisdictional Hazard Mitigation
Plan and the Dubuque County Comprehensive Emergency Management Plan.
The Bee Branch Watershed Flood Mitigation Project is a multi - phased, fiscally responsible investment. It reflects
a holistic approach to mitigate flooding as it will also improve water quality, stimulate investment, and enhance
the quality of life. Having secured the necessary federal and state funding approvals, permits, and funding,
Dubuque has pushed forward with planning, execution, and completion of three phases and the initiation of two
more. The phases of the Bee Branch Watershed Flood Mitigation Project are as follows:
Phase
Description
arter Road Detention Basin
West 32 "d Street Detention Basin
Historic Millwork District;
4 Lower Bee Branch Creek Restoration
Flood Mitigation Gate Replacement
Surface Reduction
Upper Bee Branch Creek Restoration
22nd Street Storm Sewer Improvements
Flood Mitigation Maintenance Facility
North End Storm Sewer Improvements
11 Water Plant Flood Protection
12 17th Street Storm Sewer Improvements
Status
Complete
Complete
Complete
Under Construction
Under Design
Under Construction
Under Design
Under Design
Under Design
Under Design
Under Design
Under Design
Bee Branch Watershed Flood Mitigation Project - Executive Summary
Individually, the 12 phases of the project may provide some benefit. But flash flooding can be expected to occur
until all of the improvements are implemented. But it is also true that with the completion of each subsequent
phase, the threat of flash flood damage is lessened and the resulting damage will be mitigated.
Because of the public support for the Bee Branch Watershed Flood Mitigation Project, the stated commitment of
the City of Dubuque City Council to implement the various phases of the project, and because the City has already
started implementing some of the improvements, non - public investment in the Bee Branch Watershed has
already eclipsed $139 million since 2008 with an additional $215 million expected to follow in the next five
years for a combined total of $354 million in non - public investment.
Implementation of the complete Bee Branch Watershed Flood Mitigation Project is
possible only with the requested Sales Tax Increment funding.
The City of Dubuque has been fortunate to secure local, state, and federal financial assistance to the extent that
the Bee Branch Watershed Flood Mitigation Project is eligible for funding through the State Flood Mitigation
Program. The total commitment in the combination of local and federal funding will provide for 51% of the total
project cost. The City has secured more than the requisite $30 million in federal financial assistance, with $49
million in financial assistance through the federal Clean Water Act and $1.2 million U.S. Economic Development
Administration disaster relief grant, which is a federal program providing assistance specifically for hazard
mitigation. And yet, even with the existing outside financial assistance, the cost of implementing all phases of the
flood mitigation project is too steep for Dubuque citizens and businesses.
Of the more than 30 stormwater utilities across Iowa, Dubuque residents currently pay the second highest rate in
the state. And even with the requested Sales Tax increment, a rate increase is necessary. But to construct the Bee
Branch Watershed Flood Mitigation Project without the requested Sales Tax Increment, the rate would need to
be increased by 248% which would significantly burden Dubuque businesses.
The City of Dubuque has carefully developed a fiscally conservative funding plan for the multi - phased project. The
City is requesting less than $7 million in sales tax increment in any given year, with an average annual request
of less than $5 million. The requested $98 million in Sales Tax Increment over 20 years is less than 59% of the
City's projected 70% increment.
State Flood Mitigation Board approval of the City of Dubuque's Project by December 31, 2013 is critical. Timely
approval will benefit the lives of thousands of watershed residents, businesses and employees, as well as halt the
disinvestment occurring in the watershed. If approval is delayed until 2014, however, the projected sales tax
increment would be negatively impacted and the City may need to adjust the timing of project phases.
The Bee Branch Watershed Flood Mitigation Project will prevent an estimated $582
million in damages over the 100 -year design life of the project, with a return on
investment for the State of Iowa of $6.00 for each $1.00 spent!
ii
AHLERS COONEY, P.C.
100 COURT AVENUE, SUITE. 600
DES MOINES, IOWA 50309 -2231
PHONE: 515- 243 -7611
FAX: 515- 243 -2149
WWW.AHLERSLAW.COM
William J. Noth
wnoth @ahlerslaw.com
February 5, 2014
Mr. Ken TeKippe
Finance Director
City of Dubuque
50 West 13th Street
Dubuque, Iowa 52001 -4864
RE: Not to exceed $29,000,000 Sales Tax Increment Revenue Bonds
Dear Mr. TeKippe:
Direct Dial:
(515)246 -0332
With this letter I am enclosing suggested proceedings to be acted upon by the
Council on the date fixed for the hearing (February 17th) on the issuance of the above
mentioned Bonds, pursuant to the provisions of Code Sections 418.14 and 384.83. A
certificate to attest the proceedings is also enclosed.
The proceedings are prepared to show as a first step the receipt of any oral or
written objections from any resident or property owner to the proposed action of the
Council to issue the Bonds. A summary of objections received or made, if any, should be
attached to the proceedings. After all objections have been received and considered if the
Council decides not to abandon the proposal to issue the Bonds, a form of resolution
follows that should be introduced and adopted, entitled "Resolution Instituting
Proceedings to Take Additional Action for the Issuance of not to exceed $29,000,000
Sales Tax Increment Revenue Bonds."
The Council is required by statute to adopt the resolution instituting proceedings to
issue the Bonds at the hearing -- or an adjournment thereof. If necessary to adjourn, the
minutes are written to accommodate that action.
In the event the Council decides to abandon the proposal to issue said Bonds, then
the form of resolution included in said proceedings should not be adopted. We would
suggest that, in this event, a motion merely be adopted to the effect that such bond
proposal is abandoned.
WISHARU & BAILY - 1888; GUERNSEY & BAILY - 1893; BAILY & STIPP - 1901; STIPP, PERRY, BANNISTER & STAR7II4GER - 1914; BANNISTER, CARPENTER,
AHLERS & COONEY - 1950; AHLERS, COONEY. DORWEILER, ALLBEE, HAYNIE & SMITH - 1974; AHLERS, COONEY, DORWEILER, HAYNIE, SMITH & ALLBEE, P.C. - 1990
February 5, 2014
Page 2
Section 384.83 of the Code of Iowa provides that any resident or property owner
of the City may appeal the decision to take additional action to issue the Bonds, to the
District Court of a county in which any part of the City is located, within 15 days after
such additional action is taken, but that the additional action is final and conclusive
unless the court finds that the Council exceeded its authority.
In the event an appeal is filed by any resident or property owner, please see that
we are notified immediately; and, as soon as available, a copy of the notice of appeal
should be furnished our office for review. .
Also enclosed is an extra copy of the proceedings to be filled in as the original and
certified back to this office. If you have any questions pertaining to the proceedings
enclosed or this letter, please do not hesitate to either write or call.
Very truly yours,
William J. Noth
FOR THE FIRM
WJN:dc
Encl.
cc: Barry Lindahl (w /encl.)
Jenny Larson (w /encl.)
Tim Oswald (w /encl.)
00996057 -1 \10422 -148
(This Notice to be posted)
NOTICE AND CALL OF PUBLIC MEETING
Governmental Body: The City Council of Dubuque, Iowa.
Date of Meeting: February 17 , 2014.
Time of Meeting: 6:30 o'clock P .M.
Place of Meeting: Historic Federal Building, 350 West 6th Street, Dubuque,
Iowa.
PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental
body will meet at the date, time and place above set out. The tentative agenda for said
meeting is as follows
Not to exceed $29,000,000 Sales Tax Increment Revenue Bonds
Public hearing on the issuance.
Resolution instituting proceedings to take additional action.
Such additional matters as are set forth on the additional 4 page(s) attached
hereto. (number)
This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of
Iowa, and the local rules of said governmental body.
City C r c, Dubuque, Io
February 17, 2014
The City Council of Dubuque, Iowa, met in regular session, in the Historic Federal
Building, 350 West 6th Street, Dubuque, Iowa, at 6:30 o'clock P.M., on the above date.
There were present Mayor Roy D. Buol in the chair, and the following named Council
Members:
Karla Braig, Joyce Connors, Ric Jones, Kevin Lynch,
David Resnick, Lynn Sutton
Absent:
1
The Mayor announced that this was the time and place for the public hearing and
meeting on the matter of the issuance of not to exceed $29,000,000 Sales Tax Increment
Revenue Bonds in order to provide funds to pay costs of the acquisition, construction and
installation and equipping of the Bee Branch Watershed Flood Mitigation Project,
including those costs associated with the Lower Bee Branch Creek Restoration Project
(Phases 4 and 7) and the Bee Branch Flood Control Pumping Station Gates Replacement
Project, and that notice of the proposed action by the Council to institute proceedings for
the issuance of said Sales Tax Increment Revenue Bonds had been published pursuant to
the provisions of Section 384.83 of the Code of Iowa.
The Mayor then asked the Clerk whether any written objections had been filed by
any City resident or property owner to the issuance of said Sales Tax Increment Revenue
Bonds. The Clerk advised the Mayor and the Council that -0- written objections had
been filed. The Mayor then called for oral objections to the issuance of said Sales Tax
Increment Revenue Bonds and -0- were made. Whereupon, the Mayor declared the time
for receiving oral and written objections to be closed.
(Attach here a summary of objections
received or made, if any)
The Council then considered the proposed action and the extent of objections
thereto.
Whereupon, Council Member Jones introduced and delivered to the Clerk the
Resolution hereinafter set out entitled "RESOLUTION INSTITUTING PROCEEDINGS
TO TAKE ADDITIONAL ACTION FOR THE ISSUANCE OF NOT TO EXCEED
$29,000,000 SALES TAX INCREMENT REVENUE BONDS," and moved its adoption.
Council Member Connors seconded the motion to adopt. The roll was called and the vote
was,
AYES: Resnick, Sutton, Braig, Buol, Connors, Jones, Lynch
NAYS:
Whereupon, the Mayor declared said Resolution duly adopted as follows:
RESOLUTION NO. 45-14
RESOLUTION INSTITUTING PROCEEDINGS TO TAKE ADDITIONAL
ACTION FOR THE ISSUANCE OF NOT TO EXCEED $29,000,000 SALES
TAX INCREMENT REVENUE BONDS
WHEREAS, pursuant to notice published as required by law, this Council has held
a public meeting and hearing upon the proposal to institute proceedings for the issuance
of not to exceed $29,000,000 Sales Tax Increment Revenue Bonds for the purpose of pay
costs of the acquisition, construction and installation and equipping of the Bee Branch
Watershed Flood Mitigation Project, including those costs associated with the Lower Bee
Branch Creek Restoration Project (Phases 4 and 7) and the Bee Branch Flood Control
Pumping Station Gates Replacement Project, and has considered the extent of objections
received from residents or property owners as to said proposed issuance; and, accordingly
the following action is now considered to be in the best interests of the City and residents
thereof:
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF DUBUQUE, IOWA:
Section 1. That this Council does hereby institute proceedings and takes
additional action for the sale and issuance in the manner required by law of not to exceed
$29,000,000 Sales Tax Increment Revenue Bonds for the foregoing purposes.
3
Section 2. The City Manager, Budget Director and Finance Director are
authorized and directed to proceed on behalf of the City with the negotiation of the terms
of said Bonds, to select a date for the Council's approval thereof, to cause to be prepared
such notice and sale information as may appear appropriate, to publish and distribute the
same on behalf of the City and this Council and otherwise to take all action necessary to
permit the sale of said Bonds on a basis favorable to the City and acceptable to the
Council.
PASSED AND APPROVED this 17th day of February, 2014.
ATTEST:
4
STATE OF IOWA
COUNTY OF DUBUQUE
CERTIFICATE
) SS
CIG -3
I, the undersigned City Clerk of Dubuque, Iowa, do hereby certify that attached is
a true and complete copy of the portion of the corporate records of said Municipality
showing proceedings of the Council, and the same is a true and complete copy of the
action taken by said Council with respect to said matter at the meeting held on the date
indicated in the attachment, which proceedings remain in full force and effect, and have
not been amended or rescinded in any way; that meeting and all action thereat was duly
and publicly held in accordance with a notice of meeting and tentative agenda, a copy of
which was timely served on each member of the Council and posted on a bulletin board
or other prominent place easily accessible to the public and clearly designated for that
purpose at the principal office of the Council (a copy of the face sheet of said agenda
being attached hereto) pursuant to the local rules of the Council and the provisions of
Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at
least twenty-four hours prior to the commencement of the meeting as required, by said
law and with members of the public present in attendance; I further certify that the
individuals named therein were on the date thereof duly and lawfully possessed of their
respective city offices as indicated therein, that no Council vacancy existed except as may
be stated in said proceedings, and that no controversy or litigation is pending, prayed or
threatened involving the incorporation, organization, existence or boundaries of the City
or the right of the individuals named therein as officers to their respective positions.
WITNESS my hand and the seal of said Municipality hereto affixed this 18th day
of February, 2014.
City Cler ubuque,
ROLL CALL ORDER FOR MEETING OF 2/17/2014
Resnick, Sutton, Braig, Buol, Connors, Jones, Lynch
CITY OF DUBUQUE, IOWA
CITY COUNCIL MEETING
Historic Federal Building
350 W. 6th Street
February 17, 2014
Council meetings are video streamed live and archived at
www.citvofdubuque.ora/media and on Dubuque's CityChannel on the
Mediacom cable system at Channel 8 (analog) and 85.2 (digital).
WORK SESSION
5:00 PM
Environmental Stewardship Advisory Commission - Hydraulic Fracturing Report
ESAC Hydraulic Fracturing Report, Appendix 1- Public Comments, Appendix 2- EPA Progress Report, Appendix 3- List of Articles &
Websites Petition from the Sisters of the Presentation 2/14114
REGULAR SESSION
6:30 PM
PLEDGE OF ALLEGIANCE
PROCLAMATION(S)
1. Problem Gambling Awareness Month (March 2014)
Problem Gambling Awareness Proclamation
PRESENTATION(S)
1. Environmental Protection Agency (EPA) Smart Growth Award
Assistant City Manager Teri Goodmann to present the EPA Smart Growth Achievement Award - Corridor or
Neighborhood Revitalization category for the Historic Millwork District and Washington Neighborhood
EPA Congratulatory Letter IEDA Congratulatory Letter
Changed
CONSENT ITEMS
The consent agenda items are considered to be routine and non -controversial and all consent items will be normally voted upon in a single
motion without any separate discussion on a particular item. If you would like to discuss one of the Consent Items, please go to the microphone
and be recognized by the Mayor and state the item you would like removed from the Consent Agenda for separate discussion and
consideration.
1. Minutes and Reports Submitted
Arts and Cultural Affairs Advisory Commission of 12/17/13; City Council proceedings of 2/3, 2/10; Civic Center
Advisory Commission of 1/27; Historic Preservation Commission of 1/16; Historic Preservation Education Task Force
of 2/6; Investment Oversight Advisory Commission of 1/22; Library Board of Trustees of 12/19/13; Long Range
Planning Advisory Commission of 1/15; Zoning Advisory Commission of 2/5; Proof of Publication for City Council
proceedings of 1/21; Proof of Publication for List of Claims/Summary of Revenues for month ended 12/31/13
Suggested Disposition: Receive and File
Arts Commission 12/17/13 Council Proceedings 2/3 Council Proceedings 2/10 Council Proceedings 2/12 Civic Center 1/27
Historic Preservation 1/16 Historic Preservation ETF 2/6 Investment Oversight 1/22 Library Board 12/19/13 Lona Range
Planning 1/15 Zoning Advisory 2/5 Proof - Council Proceedings 2/3 Proof - List of Claims/Revenues 12/31/13
2. Notice of Claims and Suits
Scott Duehr for vehicle damage, Zachary Gries for property damage, Jerry Grutz for property damage, Kischel Harris
for personal injury and property damage (2), Jeffrey Herbst for vehicle damage, Mary Heister/State Farm Mutual for
vehicle damage, Mark Matel for vehicle damage, Jason McCann for vehicle damage, James Pancratz for vehicle
damage, Michael Pancratz for vehicle damage, Ann Powell for vehicle damage, James Thill for vehicle damage; Jeff
Tracy for vehicle damage
Suggested Disposition: Receive and File; Refer to City Attorney
Pg. 1