Charles City Council takes step for replacement local option sales tax vote

Some Charles City Council members attend the meeting in person Monday evening and others attend the meeting virtually over Zoom.

By Bob Steenson, bsteenson@charlescitypress.com

The Charles City Council took the first step Monday evening toward asking city voters to approve a local option sales tax to take effect Jan. 1, 2023, after the current tax expires.

The council approved a resolution supporting a local option sales tax (LOST) election to be held at a special election Tuesday, March 1, 2022, asking voters whether they want to approve a 1% sales tax on goods sold within or delivered to the community.

City Administrator Steve Diers said the current LOST revenue is used 100% for streets and roads, and this is at least the second time the community has had a LOST for that purpose.

The vote would not technically be a renewal, Diers said, and that term isn’t used anywhere in the resolutions.

“It would be establishing a local option sales tax, which we’ve already had, but that one’s ending so we’re establishing the same thing again, basically,” he said.

Iowa law requires that a LOST vote be petitioned for by at least 5% of the population in the county who voted in the last general election, or by governing bodies representing at least 50% of the population of the county.

Charles City and rural Floyd County taken together represent more than 50% of the county population, and the Floyd County Board of Supervisors is also expected to pass a resolution in support of the special election vote renewal.

Diers said the county and Charles City are the only entities in the county that have a sunset on their local option sales tax, expiring after 10 years. All the other communities in the county have perpetual local option sales taxes, that would only end if voters call for a repeal.

“It’s been very successful for us. We’ve been able to do a lot of road work and get a lot of things done that we otherwise couldn’t,” Diers said.

City Council member DeLaine Freeseman suggested that city staff put together a list of all the projects that have been paid for with the LOST for the past 10 years, to show how important it is to the community.

Diers called the tax a very fair tax, because it is charged to anyone who buys goods in the community, whether they live here or are visiting, and is used to build and maintain the streets that are used by everybody.

Once the city and the county have both passed resolutions supporting a new LOST vote, the next steps will be for the city and county to pass resolutions saying how each would use the funding.

Diers said if the council wants to discuss any alternate or additional uses for the tax under the upcoming renewal vote, “Now’s the time,” and suggested that it be discussed at the council workshop next Monday.

Mayor Dean Andrews noted that the tax is collected not only on goods sold in the community, but on goods ordered elsewhere that are delivered to people in the community. That provision has been very important during the pandemic, as people stayed home and online sales boomed.

Also at the regular meeting Monday evening, the council:

• Approved closing the 1100 block of Clinton Street between 2 and 6 p.m. on Sunday, Oct. 24, for a Fall Family Festival held by the Bethany Alliance Church..

• Approved a payment of $223,197 to Portzen Construction for the water resource recovery facility (WRRF). City Engineer John Fallis said this payment brings the total paid to Portzen to almost $14.82 million. Nearly 90% of the work has been completed, he said.

“This week they plan to fully convert the flows over to the new plant. Once that is completed, basically it’s starting demolition work and then next spring it will be site work, paving, landscaping, seeding to finish things up,” Fallis said. “We’re really done with the large pay requests, what I call the big ticket items.”

• Heard an update on the Gilbert Street lift station project. Fallis said a flood washed the project out and put it behind but the crews are working on it.

• Accepted an annual audit report for the Floyd Mitchell Chickasaw Solid Waste Management Agency. Council member Jerry Joerger, the city’s representative on the landfill board and the board treasurer, said the organization has enough land to last an estimated 25 to 30 years, and is in a good cash position.

He said the landfill is currently getting a lot of material from the area of the train derailment that occurred recently near New Hampton, because all the soil that was spilled on is contaminated and has to be sent to the landfill.

• In his administrator’s report, Diers noted that he had ordered the equipment for a $100,000 smart home pilot project with AARP as part of the city’s designation by AARP as an age-friendly community. He said the project anticipates having about 13 participants and 18 have already been identified, “so we have a good pool.”

He said the next project with AARP is called a home fit project, where a couple of homes would be identified for modifications to make them more livable for a range of ages.

“We hope to do a pilot project,” Diers said. “We’re still looking at ways to potentially fund that.

• Diers also noted that the potential 70-unit senior living facility proposed east of the Floyd County Medical Center by developer Mark Holtkamp has been delayed about six months and because of increasing materials costs may have to cut back on some of the planned amenities, such as stonework on the building or landscaping, and possibly 10 fewer beds.

“He’s going to have the same amount of cost going into the project, but he may be getting less for his money,” Diers said.

The project has a Dec. 31, 2022, deadline to qualify for the full tax rebate incentive for the first year.

“If he doesn’t get it done by that December he won’t get the full rebate,” Diers said. “If he gets it halfway done that first year he’ll get half back of what he anticipated.”

He said Holtkamp was aware of that and didn’t have an issue with it.

The project is eligible for a total tax rebate of up to $2 million, depending on how much value is added and the timing over the 10-year period the rebate will be in effect.