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Nov. 4 referendums: The money side of parks votes
by Rick DeClue · News · October 31, 2014
The two Nov. 4 ballot initiatives in support of park improvements in West Branch are based on pretty simple math.
A proposed $4 million bond will be repaid by roughly half — or $1.8 million — coming from a 10-year extension of the one-cent Local Option Sales Tax, and the other half — about $2.25 million — by Tax Increment Financing.
And most importantly, according to City Administrator Matt Muckler, there will be no increase in property taxes to fund the park improvements.
Muckler said he considers two other main points in this vote.
• The nature and design of the proposed improvements have been led by citizens in a “ground-up” process, not a “top-down” one, and
• Many factors point to this being a good time for West Branch to pursue this quality-of-life issue.
There are other numbers, such as a 50-percent yes-vote required to pass the LOST and a 60 percent yes-vote to pass the bonds.
The bond funds will be used for park improvements in every city park except the newly completed dog park.
The city’s proposed park in Pedersen Valley requires approximately $2 million in infrastructure costs such as grading, utilities, drives and parking.
These improvements will be paid for from TIF funds. The specific use of the TIF funds does not require voter approval. The city’s TIF District was previously modified to include the Pedersen Valley property and the park improvements were included in the city’s June 2014 certification of proposed uses for TIF, as required by the State of Iowa.
The city is not currently using any of its TIF capacity. With the uses for the park improvements, 75 percent of that capacity would remain for other projects.
As to the rationale that TIF reduces taxes for the city’s schools, Muckler said that was previously decided when the TIF process was approved. He also noted that these city park improvements will result in less reliance on school ball fields and gymnasiums for city recreation uses.
Extending the LOST funds will cover the construction of three ball fields and related improvements in Pedersen Valley, improvements in Lion’s, Wapsi Creek and Beranek parks, and include engineering and contingency costs.
The city’s current LOST funding, used for expansion and improvements to the fire station, expires on June 30. If extended, LOST is conservatively estimated to produce at least $180,000 per year to pay back roughly half of the bonds. The LOST funds, if approved, cannot be directed to other uses.
Muckler said that if the voters choose not to renew the LOST, West Branch would be the only city in Cedar County not collecting it.
More important, distribution of LOST is based on a statewide formula using a combination of census and tax data. As a result, West Branch typically receives three to four times what it pays into the statewide collection.
“I tell people it is more than just getting one cent on every dollar someone spends in Casey’s,” said Muckler. “We benefit from the state formula.”
The proposed bond funding would leave the city with approximately 30 percent of its bonding capacity.
Muckler pointed out that the city’s bonding capacity is growing with both residential and commercial development, plus increasing property values.
Part of the property value growth comes from improvements in quality-of-life issues like parks. Muckler said he lived in a community in Arizona that marketed itself by pointing to its 52 parks.
“If the voters decide they only want us to focus on infrastructure, that’s what we’ll do,” he added, “but people look at a community for its quality of life.”
Muckler pointed to various processes that have tried to maximize citizen input in these park initiatives.
• The most recent update of the city’s long-range plan included a recommendation for a regional-sized park.
• A Parks and Recreational Department survey related to its new Capital Improvements Plan showed 60 percent support for park improvements covered by either LOST or bond financing or both, versus under 20 percent support for using neither of these funding sources.
• A steering committee for the park plans, plus various informational meetings and design charettes that resulted in substantial public input and direction.
“Parts of this discussion go back to when Sandy Hatfield was mayor before 2010, before I started with the city. We looked at other sites like the Cookson property or improving Town Center,” he said.
He also pointed out that the development of a community center or other uses for the Pedersen Valley ground will have to be approved by future votes.
“This is just Phase 1,” he said.
As for timing, both Muckler and the city’s financial advisor, Maggie Berger of Speer Financial, Inc., said that the city’s current growth, combined with low interest rates, makes this a good time for West Branch to be considering these park improvements.
Berger said she has worked with a number of cities financing working on park improvements this year.
“West Branch has steadily growing LOST revenues. It can lock in low interest rates on the bonds and can lock in its construction costs,” she said. “You know construction costs will be higher later. And a year ago, I would not have predicted rates would still be this low. They will go up.”
At the Oct. 20 meeting of the West Branch City Council, Mayor Mark Worrell asked for everyone to vote.
“Some past elections have had over 600 votes,” he said. “That’s pretty good for a city our size. I’d love to see that 600 number.”
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