Charles City considers $5.5M additional water storage facility

By Bob Steenson, bsteenson@charlescitypress.com

A new $5.5 million underground storage facility could improve the operating efficiency and longevity of Charles City’s water system, City Council members were told at a planning session Monday evening.

While no official action is taken at a planning session, the council also discussed increasing a property tax rebate to Cambrex by more than $400,000 over nine years because the assessed value of the project that prompted the development incentive turned out to be considerably more than had been proposed.

The council also discussed increasing support for several city groups.

The water storage facility — a million-gallon underground clearwell tank — would add to the existing 500,000 clearwell tank the city already has, said City Administrator Steve Diers.

“It’s basically where we pump and treat our water and lime-soften it. We pump it into this holding tank that’s below ground that eventually feeds out to the water towers, Diers said.

SEH, an engineering firm from Mason City, did a study a couple of months ago looking at the efficiency of the current water plant and the optimal amount of storage capacity to have, based on the plant design and efficiencies.

“The way it works now, the plant pumps it up, treats it and fills it and then shuts down. It’s doing it a lot more than it should,” Diers said.

“If you can have more capacity your pumps are turning on and off less, you get less wear and tear, you’re getting better use out of the lime product that you’re using to soften the water, and it just makes for a better operational system for the plant and extends the life of the plant,” he said.

The SEH study found the optimal underground storage capacity the city should have is 1.5 million gallons, so with the existing 500,000 gallons storage an additional 1 million is needed.

Possible funding sources include up to $600,000 that the city could qualify for in a Community Development Block Grant, and long-term, low-interest financing through the Iowa State Revolving Fund (SRF), the same source that was used as part of the funding for the new water resource recovery facility (WRRF) that is being built in the city.

Diers said the council may consider a services agreement with SEH at its next regular meeting for design work, and may also approve a memo of understanding with the North Iowa Area Council of Governments (NIACOG) for its services in writing the CDBG application.

Diers said there would be no impact on property taxes if the council decides to go ahead with the project.

The impact on water rates is less sure, Diers said. He expects that there will no impact or minimal impact, “but I can’t definitively say.”

“The way our current debt is structured and the way our revenues are increasing right now because we’ve got Valero and their usage is up, … as I sit here and look at it I don’t anticipate much of a change.”

Also at the council meeting Monday, the members discussed requests for new three-year development agreements with Main Street Charles City and the Charles City Area Development Corp.

Main Street Charles City — formerly called Community Revitalization — is asking that it’s contribution from the city be increased from $23,000 annually to $25,000 for the three years of the agreement; that the city funding for the downtown facade improvement program be increased from $30,000 annually to $35,000 for the three years; and that the city funding for the Culture and Entertainment District funding stay the same at $25,000 a year.

If approved, total support for all three funds would increase from the current $234,000 for all three years to $255,000, for a total increase in all three funds of $21,000.

Diers said the council members generally supported the funding requests, and wondered if the funding was enough for the facade improvement and culture and entertaining district funds to accomplish what the city was trying to do in the downtown area.

He the city hasn’t had a year yet where it didn’t use all of the facade improvement funds, and in some years even “flexed” some of the funding from the Culture and Entertainment District fund for the facade program.

Funding from these programs comes from tax increment financing revenue from the Riverside Urban Revitalization area.

The Area Development Corp. requested city funding of $46,000 annually for three years, up from the current $42,000 per year. Funding for this group has come from tax increment financing revenue from the Southwest Bypass, South Grand and Riverside TIF districts.

Diers said the council supports the work the ADC is doing, but because the Southwest Bypass TIF District is jointly managed by the city and by Floyd County, both groups would have to agree on how much revenue they will take out of the district for the years in question.

All of the new development agreements would be for the fiscal years 2022-23, 2023-24 and 2024-25.

Also Monday evening, the council discussed modifying an economic development agreement with Cambrex that had been approved in 2017 regarding a property tax rebate on the additional value caused by an expansion project, because the actual value of the expansion turned out to be much greater than the initial estimate.

Diers said the council had initially approved up to $170,000 in property tax rebates spread over nine years, but based on the actual valuation of the expansion, that rebate would have been $575,000 over nine years.

He said the project had added so much more value than expected because a new building that had been planned to be added in a later expansion phase was built during this phase.

Cambrex is in the Southwest ByPass TIF District, and the tax rebates are coming from tax increment financing revenue in the district.

The SW ByPass TIF Board approved amending the agreement, Diers said, and the council members indicated they will likely approve the change.

“Council discussion was along the line that, if that project had been presented to us as it finally turned out, we would have set up the TIF rebate to have been for that amount,” Diers said.

And also City Council members had no objection to closing Salsbury Avenue in front of the football stadium by the high school to be used as part of the Comet Rodeo that will take place on May 14 as the Charles City Community School District winds down the school year.