Bee Branch Watershed_State Flood Mitigation Board - Amendment to Agreement Copyright 2014
City of Dubuque Consent Items # 13.
ITEM TITLE: State Flood Mitigation Board - Amendment to Agreement
SUMMARY: City Manager recommending approval to seek an amendment to the State
Flood Mitigation Board Funding Agreement for the Bee Branch Watershed
Flood Mitigation Project.
RESOLUTION Authorizing an amendment to the Agreement with the State
of Iowa Flood Mitigation Board which authorizes the City's use of Sales
Tax Increment funding for the Bee Branch Watershed Flood Mitigation
Project
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt Resolution(s)
ATTACHMENTS:
Description Type
❑ Amendment to State Flood Mitigation Board Funding Agreement for Bee City Manager Memo
Branch-MVM Memo
❑ Staff Memo Staff Memo
❑ Resolution Resolutions
❑ Letterto State Flood Mitigation Supporting Documentation
❑ Attachment Supporting Documentation
THE CITY OF Dubuque
UBE I
erica .i
Masterpiece on the Mississippi 2007-2012-2013
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Amendment to State Flood Mitigation Board Funding Agreement for the
Bee Branch Watershed Flood Mitigation Project
DATE: September 1, 2015
Civil Engineer II Deron Muehring requests City Council approval to seek an amendment
to the State Flood Mitigation Board Funding Agreement for the Bee Branch Watershed
Flood Mitigation Project requesting to use an additional $1,962,080 in sales tax
increment collected in Fiscal Years 2014 and 2015 for the Bee Branch Watershed Flood
Mitigation project.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Micliael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Deron Muehring, Civil Engineering II
Gus Psihoyos, City Engineer
T'F-lE CITY OF DUB uque
DUB-
E AR. caCRY
11111"
Masterpiece oY1 the Mississippi zoo,•2012•n„;
TO: Michael C. Van Milligen, City Manager
FROM: Deron Muehring, Civil Engineer II
DATE: August 31, 2015
SUBJECT: Amendment to State Flood Mitigation Board Funding Agreement for the
Bee Branch Watershed Flood Mitigation Project
INTRODUCTION
The purpose of this memorandum is to request approval to seek an amendment to the
State Flood Mitigation Board Funding Agreement for the Bee Branch Watershed Flood
Mitigation Project.
BACKGROUND
The Bee Branch Watershed, which includes the City's most developed areas where
over 50% of city residents either live or work, has experienced repeated flooding
impacting thousands of properties and over seventy businesses. Six Presidential
Disaster Declarations have been issued since 1999 as a result of flood damage to
public and private property.
In 2012 the State of Iowa Flood Mitigation Program (Program) was created. It
established that sales tax increment collected in a City can be used to fund flood
mitigation projects. The Sales Tax Increment Fund is to consist of the increase in the
state share of the sales tax revenues from communities with qualifying applications. The
maximum state share of sales tax increment that can be diverted from the state and
used instead for flood mitigation projects is 30 million per year. The maximum award for
any qualifying single community is $ 15 million per year. In April of 2013 the State Flood
Mitigation Program Board the Board) was established. And at its third meeting in July of
2013, the Board adopted the administrative rules for the Program.
In November of 2013 the City Council adopted Resolution 336- 13 authorizing the City' s
application to the State for the use of up to $ 98,494, 178 in sales tax increment funds
for the 12-phase Bee Branch Watershed Flood Mitigation Project. The City' s application
included a Project Plan that included information about the various phases of the
project, the schedule for construction, and the financing plan utilizing sales tax
increment funds.
On December 4, 2013, the Iowa Flood Mitigation Board approved the City's application
and the City's use of$ 98,494,178.00 in state sales tax increment funds for the Bee
Branch Watershed Flood Mitigation Project. In February of 2014, the City Council
adopted Resolution 31- 14 authorizing the execution of a funding agreement with the
Iowa Flood Mitigation Board binding the City to the terms of the agreement as required
for the City's receipt of up to $98,494,178.00 in state sales tax increment funds for the
Bee Branch Watershed Flood Mitigation Project. The sales tax increment is to be
distributed to the City based on a set schedule over a twenty-year period as outlined in
the City's Project Plan and as reflected in the funding agreement.
The legislation establishing the State Flood Mitigation Program (Program) and the
subsequent amendments to the Iowa Code enacting the Program established limitations
on a city's use of sales tax increment. A city is only eligible to use state sales tax if the
sales tax collections grow. And a city can only use the portion of sales tax that
represents the actual growth. As part of its application, the City of Dubuque projected
that the state sales tax collected within the City would grow annually by 1.97% based on
the average growth from 2003 to 2013. This annual growth rate was then utilized to
predict the amount of sales tax increment that would be available for the City's use in
order to fund the Bee Branch Watershed Flood Mitigation Project. The 1.97% annual
growth rate was thought to a conservative approach which would ensure that the actual
sales tax growth would allow the City to receive the annual sales tax increment funding
outlined in the Project Plan and reflected in the City's budget.
The actual sales tax growth from Fiscal Year 2013 to Fiscal Year 2014 was 5.20%.
Therefore, In March of 2015, the City sought an amendment to the funding agreement
that would modify the 20-year distribution schedule and allow the City's use of $5 million
more in sales tax increment in Fiscal Years 2014 through 2018 and $5 million less in
sales tax increment from Fiscal Years 2031 through 2033. This request was
subsequently approved by the Board on April 13, 2015. This amendment did not modify
the total sales tax increment funding available for the City's use; the amended schedule
still reflects that the City will receive a total of$98,494,178.00 in sales tax increment
funds for the Bee Branch Watershed Flood Mitigation Project.
DISCUSSION
Because the actual sales tax growth in Fiscal Year 2014 and Fiscal Year 2015
exceeded the projected totals, the City is eligible to receive the additional sales tax
increment if the funding agreement is amended accordingly. Therefore, a letter was sent
(attached) to the State requesting an amendment to the funding agreement between the
Flood Mitigation Board and the City of Dubuque related to the City's use of state sales
tax revenues for the 12-phase Bee Branch Watershed Flood Mitigation Project.
Specifically, the City inquired about the use of the actual sales tax increment generated
in Fiscal Year 2014 in the amount of$487,080.00 and the estimated increase in sales
tax increment to be generated in Fiscal Year 2015 in the amount of$1,475,000.00 for a
total request of$1,962,080.00. If approved, the funding agreement would reflect that the
City will receive $100,456,258.00 in sales tax increment disbursed from 2014 through
2033. Attachment 1 shows a comparison between the adopted annual disbursement
schedule versus the proposed schedule.
2
RECOMMENDATION
I recommend that the City seek an amendment to the State Flood Mitigation Board
Funding Agreement in order to secure an additional $1,962,080.00 in sales tax
increment funding for the Bee Branch Watershed Flood Mitigation Project.
BUDGET IMPACT
The use of the additional $1,962,080.00 in sales tax increment funding would be
considered as part of an amendment to the Fiscal Year 2016 Storm Water Utility Fund
Budget.
REQUESTED ACTION
I respectfully request adoption of the attached resolution approving the City's request for
the use of additional sales tax increment collected in Fiscal Years 2014 and 2015 for the
Bee Branch Watershed Flood Mitigation Project.
Encl.
Cc: Barry Lindahl, City Attorney
Jennifer Larson, Budget Directot
Teri Goodmann, Assistant City Manager
Gus Psihoyos, City Engineer
Alexis Steger, Senior Budget Analyst
3
Prepared by: Deron Muehring, City Hall, 50 W 13th Street, Dubuque IA 52001 563-589-4270
RESOLUTION NO. 295-15B
A RESOLUTION AUTHORIZING AN AMENDMENT TO THE AGREEMENT WITH THE
STATE OF IOWA FLOOD MITIGATION BOARD WHICH AUTHORIZES THE CITY'S
USE OF SALES TAX INCREMENT FUNDING FOR THE BEE BRANCH
WATERSHED FLOOD MITIGATION PROJECT
WHEREAS, Six Presidential Disaster Declarations have been issued for flooding,
severe storms and tornados between 1999 and 2011 due to flash flooding; and
WHEREAS, the Bee Branch Watershed, which includes the City of Dubuque's most
developed areas where over 50% of city residents either live or work, has experienced
flooding impacting thousands of properties and over seventy businesses; and
WHEREAS, the City Council of the City of Dubuque has adopted a drainage basin
master plan authored by HDR Engineering that outlines improvements to mitigate
flooding collectively referred to as the Bee Branch Watershed Flood Mitigation Project
(the Project); and
WHEREAS, the Flood Mitigation Program was established by the Iowa Legislature
and the Governor of Iowa to support community projects for the construction and
reconstruction of levees, embankments, impounding reservoirs, or conduits that are
necessary for the protection of property from the effects of floodwaters and may include
the deepening, widening, alteration, change, diversion, or other improvement of
watercourses if necessary for the protection of such property from the effects of
floodwaters; and
WHEREAS, the City of Dubuque submitted an application to the Iowa Flood
Mitigation Board (the Board) requesting the use of $98,494,178.00 in sales tax
increment funds for the Project; and
WHEREAS, the Board, on December 4, 2013, voted to approve the City's
application for construction of the Project, subject to the requirements set forth in Iowa
Code chapter 418 and the administrative rules promulgated under it and subject to the
terms and conditions set forth in an agreement; and
WHEREAS, the City Council, on February 3, 2014, adopted Resolution 31- 14
authorizing the execution of an agreement (Funding Agreement) with the Iowa Flood
Mitigation Board binding the City to the terms of the agreement as required for the City's
receipt of up to $98,494,178.00 in state sales tax increment funds for the Bee Branch
Watershed Flood; and
WHEREAS, the actual sales tax growth in Fiscal Year 2014 and Fiscal Year 2015
exceeded the projected totals so that the City would be eligible to receive up to an
additional $1,962,080.00 in sales tax increment if the Funding Agreement is amended
accordingly; and
WHEREAS, it is in the best interest of the City to seek the use of the additional sales
tax increment through an amendment to the Funding Agreement.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA AS FOLLOWS:
Section 1: The City's request to amend the Funding Agreement with the Iowa Flood
Mitigation Board in order for the City to receive an additional $1,962,080.00 in sales tax
increment funding for the City's flood project fund for the above purposes is hereby
authorized.
Passed, approved and adopted this 8th day of September, 2015.
Attest:
Ade r
Kevin Firnstah C ' ""lerk
4).
Roy D. By`I, Mayor
THE CDtUB
OF Dubuque City Manager's Office
City Hall
AD-MOcaCRY 50 West 13`h Street
E ' ' Dubuque,Iowa 52001-4805
I I Office(563)589-4110
Masterpiece on the Mississippi Fax(563)589-4149
2007.2012.2013 TTY(563)690-6678
ctyi-ngr@cityofdubuque.org
www.cityofdubuque.org
August 26, 2015
Carol Tomb
Hazard Mitigation Project Officer- Infrastructure
Iowa Department of Homeland Security and Emergency Management.
7900 Hickman Rd., Suite 500
Windsor Heights, IA 50324
VIA EMAIL
RE: State Flood Mitigation Program, Proposed Amendment to Agreement 2013-0
Dear Ms. Tomb,
The purpose of this letter is to seek an amendment to the funding agreement between
the Flood Mitigation Board and the City of Dubuque related to the City's use of state
sales tax revenues for the 12-phase Bee Branch Watershed Flood Mitigation Project.
Specifically, the City is requesting the use of sales tax increment generated in Fiscal
Year 2014 in the amount of $487,080 and the estimated increase in sales tax increment
generated in Fiscal Year 2015 in the amount of $1,475,000 for a total of$1,962,080.
On May 18th, 2015, two construction contracts for Phase 7, the Upper Bee Branch
Creek Restoration, were awarded at $9,532,946 over the estimate. Due to the current
bidding environment it was established that although this was a significant overage, it
was in the best interest of the City and its citizens to award the contracts in order to
avoid the risk associated with the recurring flash flooding.
The City of Dubuque updated the annual projected increase for sales tax increment in
2014 to reflect the increases that were being realized. The city continues to exceed
even the updated 2.15% annual projected increase. The City produced $316,420 more
in sales tax increment in the first two quarters of Fiscal Year 2015 than projected.
Previously, through an amendment, the City was allowed to utilize more FY14
increment than originally awarded. The City has yet to receive this increase.
In accordance with Chapter 418.4(3)d of the Iowa Code, the City of Dubuque passed a
resolution on February 07, 2014 authorizing the use of sales tax increment revenue for
the Bee Branch Creek Watershed Flood Mitigation Project and, as required, provided a
copy of the resolution to the Department of Revenue. This established that the
Department of Revenue was to begin depositing money in the dedicated sales tax
increment fund for the City of Dubuque beginning on April 1, 2014. The City was notified
in June of 2014 that the Department of Revenue was to distribute $695,828.72 in sales
tax increment collected in the 3rd quarter of FY 2014 into the sales tax increment fund.
The City subsequently asked for and received its first disbursement of FY14 sales tax
increment in the amount of$332,469.00 in August of 2014.
The Department of Revenue later retracted this deposit in March 2015, believing the
City was not eligible to use of the 3rd Quarter of Fiscal Year 2014 sales tax increment,
citing Chapter 418.4(3)d. This was not an issue at the time because the City's sales tax
increment for the 4th quarter of FY 2014 still exceeded the sales tax increment approved
for the City's use in FY14. For reference, Chapter 418.12(3) of the Iowa Code states:
"The Department of revenue shall deposit in the fund the moneys described in
subsection 1 beginning the first day of the quarter following receipt of a resolution
under section 418.4, subsection 2, paragraph "d". However, in no case shall a
sales tax increment be calculated under section 418.11 or such moneys be
deposited in the fund under this section prior to January 1, 2014"
Chapter 418.12(3) of the Iowa Code outlines when the Department of Revenue is
expected to begin depositing sales tax increment into the fund and make it available to
the City. The Department of Revenue complied with this provision when it deposited the
sales tax increment collected in the 3rd quarter of FY 2014 into the fund in June of 2014.
Therefore, the City is seeking the use of the $487,080 sales tax increment generated in
the 3rd quarter of FY 2014.
Because the actual sales tax increment collected in the first two quarters of FY15
exceeded the City's projections, the City is also seeking the use of an estimated
increase in sales tax increment generated in Fiscal Year 2015 in the amount of
$1 ,475,000.00.
As outlined in the Project Plan, the City purposefully limited its yearly request by
proposing to spread the construction of project phases over several years in order to
both limit borrowing and allow for the availability of more sales tax increment for other
Iowa communities that may have funding requests through the state flood mitigation
program. At this time, the additional sales tax increment the City is seeking with this
amendment would be unavailable to new applicants. Should the Board approve the City
of Dubuque amendment, the board would have several million dollars remaining to
allocate to other Cities who may approach the board for an increase in their Fiscal Year
2015 sales tax increment funding.
The City of Dubuque respectfully requests $1 ,962,080 additional sales tax increment
revenue from Fiscal Year 2014 and Fiscal Year 2015. Therefore amending Exhibit B
(Amended #1) of funding Agreement 2013-0 to reflect the increased sales tax increment
remittance schedule outlined in the attachment.
Thank you in advance for your consideration.
Sincerely,
A��
Michael C. Van Milligen
City Manager
Attachments
cc: Jennifer Larson, Budget Director
Teri Goodmann, Assistant City Manager
Gus Psihoyos, City Engineer
Deron Muehring, Civil Engineer
Alexis Steger, Senior Budget Analyst
ATTACHMENT 1
PROPOSED AMENDMENT TO CITY OF DUBUQUE'S SALES TAX INCREMENT DISBURSEMENT SCHEDULE
DUBUQUE
DUBUQUE PROPOSED DUBUQUE
YEAR APPROVED AMENDMENT INCREASE
2014 $ 395,704.00 $ 882,784.00 $ 487,080.00
2015 $ 2,655,058.00 $ 4,130,058.00 $ 1,475,000.00
2016 $ 3,476,709.00 $ 3,476,709.00 $
2017 $ 4,316,027.00 $ 4,316,027.00 $
2018 $ 5,173,389.00 $ 5,173,389.00 $
2019 $ 4,392,361.00 $ 4,392,361.00 $
2020 $ 5,175,452.00 $ 5,175,452.00 $
2021 $ 5,973,893.00 $ 5,973,893.00 $
2022 $ 6,787,982.00 $ 6,787,982.00 $
2023 $ 6,944,414.00 $ 6,944,414.00 $
2024 $ 6,968,288.00 $ 6,968,288.00 $
2025 $ 6,946,514.00 $ 6,946,514.00 $
2026 $ 6,957,577.00 $ 6,957,577.00 $
2027 $ 6,947,487.00 $ 6,947,487.00 $
2028 $ 6,947,500.00 $ 6,947,500.00 $
2029 $ 6,500,000.00 $ 6,500,000.00 $
2030 $ 6,000,000.00 $ 6,000,000.00 $
2031 $ 2,935,823.00 $ 2,935,823.00 $
2032 $ 1,500,000.00 $ 1,500,000.00 $
2033 $ 1,500,000.00 $ 1,500,000.00 $
$ 98,494,178.00 $ 100,456,258.00 $ 1,962,080.00