MINUTES OF THE INFORMAL MEETING OF THE JOHNSON COUNTY BOARD OF SUPERVISORS:
AUGUST 14, 2008
TABLE OF CONTENTS
Page
Facilities Manager David Kempf and Assistant County Attorney Andy Chappell: Boundaries of Johnson County Public Health Property................................................................................................................ 1
Mental Health/Disability Services Director Kris Artley: Renewal Contract with the Department of Human Services for the Provision of the Child Mental Health Waiver services......................................................... 2
Mental Health/Disability Services Director Kris Artley: Proposed Service Rates for FY09 for the Community Mental Health Center................................................................................................................... 3
Reports and Inquiries from Executive Assistant Mike Sullivan................................................... 5
Chamber of Commerce Vice President & Director of Public Policy Rebecca Neades: Donation to Chamber of Commerce Flood Relief Effort............................................................................................................ 5
County Treasurer Tom Kriz: Requests to Allow Property Owners Impacted by the Recent Flood to Pay Property Taxes after September 1, 2008.................................................................................................... 7
Chairperson Sullivan called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 6:05 p.m. Members present were: Pat Harney, Larry Meyers, Terrence Neuzil, Sally Stutsman, and Rod Sullivan.
Facilities Manager David Kempf said the property north of the current Public Health building recently sold and one part of that sale includes a requirement by the City for a buffer zone between the two properties. Kempf said while MMS was out surveying the property, they found the property line is a foot to a foot and a half south of the chain link fence. He said it was assumed that the property line was the chain link fence to the north, but that isn't actually where the property line ends. Stutsman asked if the County loses that foot or gains land. Kempf said they will lose a foot to a foot and a half. Kempf said Chappell discovered that there is an easement for a shared drive access, and they are hoping to have that waived. He said if the buffer is put in there will not be a need for an easement. Harney asked if the fence will have to be moved. Kempf said the fence will have to be moved when the buffering is adjusted because there is a need to create an island.
Chappell said the property owner requested under the City Zoning Ordinance minor modifications of the requirements and an informal hearing process with some of the staff. He said as the adjacent property owner the County was invited to attend the meeting. Chappell said he did attend the meeting. He said there questions were about the property line issue. Chappell said he told them he did not have authorization to say that it isn't an issue, but the only way it would be an issue would be if the Board wanted to pursue legal action to protect the foot and a half. He said he told the owner he would be surprised if the Board took legal action and would most likely adjust the land use of that property. Chappell said he has seen the plans and the improvements the property owner wishes to make if he gets the modifications are vast. He said there will be islands to the front bordering the street and islands between the two properties. Chappell said the Board doesn't have to follow those site development standards. He said if the Board chooses to sell the property the new owner will have to make similar improvements to what the adjacent property owner is currently making.
Chappell said this issue does not need to be addressed unless the Board wishes to take legal action. Stutsman asked why the Board would pursue anything. Chappell said he didn't know, but there are legal rights involved, and he doesn't have the authority to waive the Boards rights. He explained it isn't something a government entity would or should end up doing, but there are certain ways to acquire property when you have been using it for a certain period of time. R. Sullivan asked Chappell if he would be looking for any official action to guide him to not take any further actions toward this issue. Chappell said no, unless the Board wants official action, then this issue will need to be placed on a formal agenda. Chappell suggested the Board send an official letter to the adjacent property owner to indicate the Board has no interest in disputing the property line and request he release the easement if he is not going to use it. Chappell said if he doesn't need the easement there is no point in having it. Chappell said he and Kempf agree it would be a good idea to have a surveyor find the last pin. Kempf said three of the four pins have been located for the property and it makes sense to have surveyors locate the forth pin. Chappell said it may affect the southern boundary. He said they have a little more to the south than was assumed.
Mental Health/Disability Services Director Kris Artley said children have been served by MH/DS in four different areas. She said in-home therapy took up 26.5% of the total time spent with children, respite took 35.3% of the time, and family and children services took up another 35.3%. Artley said there was 2.9% designated to EMAD. Artley said in 2005 Johnson County elected to have the Department of Human Services provide the Child and Mental Health waiver rather than providing the services themselves. The County entered a contract which is due on Tuesday, September 30, 2008. Artley said to date DHS has served 13 total cases, five of which were opened prior to 2007, and seven were opened in 2007 and remain open today. Artley said DHS did close one case in 2007. R. Sullivan asked if there is coordination between the State and MH/DS when someone turns 17 years old. He asked if there was coordination to assume that person would be moving to the adult system. Artley replied technically yes. She said there are, however, some children that slip through. Artley said there is a program in ISIS that each county can access to determine how many children in the system are 17. She said, hopefully, all the children in the service system are recorded that report. MH/DS accesses that information to project future needs.
Artley said two copies of the contract were sent and need to be signed and returned by Friday, August 22, 2008, which is the day after the Board meets next. Artley said she didn't know if the Board wanted her to leave the forms to sign or if she needed to bring it back. Stutsman said the Board can handle it. R. Sullivan told Artley to give the form to Executive Assistant Mike Sullivan. Stutsman asked if MH/DS contracts services out and if there was a subcontract with Four Oaks. Artley replied the department provides the services themselves. She explained some counties opted to provide it through a case management program. Artley said it is an extremely intensive and costly service. She said some of the rates are double normal case management rates. She said a lot of counties opted not to provide services themselves or local programs and contracted with the department instead.
Artley said Community Mental Health Center Director Stephen Trefz is available to answer questions. She said the explanation for proposed service rates is straightforward. Artley said recycle therapy was less than in Fiscal Year 2007 according to CRIS. She explained applying a 2.3% poll adjustment to the cost rate which was approved last year was still 12.13% above the actual anticipated cost. Artley said the Mental Health Center is not requesting any rate increase. She said the CRIS report came in for psychiatry at 307.81 which is considerably higher than what the actual approved rate was for FY08. Artley said the COLA adjustment of 2.3% was applied and MH/DS is requesting a 3.85% increase for FY09. She said that would result in a $327/hour unit rate. Artley said that number is within the ballpark of what other providers are requesting for that service. She said the clubhouse, which is a half day unit, is 3% over the FY 08 rate. Artley said based on the CRIS report, that service cost the center more than what was being received for providing it. She said MH/DS is requesting the actual rate from the CRIS report of $56. Artley said $98.25 was approved for the FY 08 rate for community-supported living. She said the actual CRIS report came in at $76.11. She said the problem is the CRIS rate is exceedingly high compared to what other providers are offering that service. Artley said the Mental Health Center is proposing dropping that rate to $65. She said MH/DS agrees with that proposal.
Artley said the miscellaneous block grants are all the same except for the information referral for the homes outreach program. Artley said MH/DS decided the flooding warranted having an increase for this program because there are anticipated future problems in this area. Stutsman said that is probably a good idea. Artley said the administrative block grant is challenging the department. She said historically block grants are used to cover non-billable expenses such as third party payer administration fees and emergency response as well as limited intake responsibility and functions. Artley said Iowa Medicaid Enterprise (IME) has not acknowledged what rates they are establishing for the Mental Health Center. She said IME should do that before the end of August 2008. She said State Senator Joe Bolkcom said the State found extra money which precipitated this legislation. She said the State Legislature had previously written legislation to provide actual cost reimbursement to mental health centers. She said out of nowhere, mental health centers got a reconciliation payment, which came within days after the Board signed the per capita agreement.
Artley said the per capita agreement drove the rate up to pay more for FY08. She said the reconciliation payment goes back to 2007, which makes it a challenge to dig out figures to find out how much of the dollars actually offset expenses the County already paid. Artley said the State is willing to reimburse that expense amount once they find out what it is. Artley said not knowing what IME will pay for a reimbursement makes it hard to calculate for the future and figure out what to apply for in the Administrative Block Grant. She said as of current budget projections the amount would be $148,647, but she does not anticipate it will be that high. She said that amount is substantially lower than 2007. Artley said they don't have enough information to make the determination of what that figure should be. She said it was determined to bring the rest of the rates to the Board. She said MH/DS will continue to meet, and hopefully by the end of the first quarter address the issues and reach a definitive figure to apply for the grant. She said there are new rates going in to place on residency and some of the things put into the Service Management Plan. Artley said she hopes to have it approved in August 2008 by the Planning Council. She said those rates will impact two of the addendums on the contract, which creates the need for rewriting two of the addendums. Artley said the language needs to be changed to reflect what is in place as of August 14, 2008. She said they can do everything in short order, but the rates were brought to the Board for consideration.
Neuzil said in the past if a provider is over the CHRIS rating the Board has frozen that or looked at ways to gradually bring it down closer to the rating. Neuzil said it does not look like that is being done for psychiatry. He asked if that was unusual or if it is past practice. Artley replied the CRIS report for psychiatry came in much higher than what was being charged in FY07. She said MH/DS applied for the COLA at 2.3%, which brought it up to $314.89, and beyond 2008 the cost asking price is 3.85%, which brings it up to $327. Neuzil said he wanted to make sure they are following protocol. Artley said MH/DS has a formula and for psychotherapy, because the rate was less in the actual report, the rate was frozen at $103.85, the same amount which the Board contracted. Neuzil said he assumed the administrative block grant will look at Artley's expertise for a recommendation. Artley said she will have a recommendation after she is told what IME will reimburse. She said MH/DS will have to continue to be reimbursed if IME is not planning to continue paying full for ongoing units of service. She said she does not know what IME will do. Neuzil said he does not blame the Community Mental Health Center for requesting funds, not knowing if the State's going to reimburse or not. He added if the State will reimburse, the County would want that back. Artley said she is requesting it because she wants it as tight as possible before something is put in writing. She said the dollars came out of nowhere in early July 2008. Artley said they now have to attribute the dollars to where they belong and plan for the future. She said Bolkcom indicated that the State will pick up the cost for the mental health portion of the MI and CMI populations. Artley said she does not know how fast the State will be able to get that job done but it appears they are making an attempt. Stutsman asked if the Board will approve next week the contract for psychotherapy, psychiatry, and club house. Artley said correct. Community Mental Health Center Director Stephen Trefz said the new environment is wonderful and Artley has been working very hard.
M. Sullivan said Wednesday, August 20, 2008 at 9:00 a.m. the Board will be having a Strategic Planning Work Session. He said the same day, August 20, 2008 there will be a joint cities meeting hosted by Iowa City at 4:30 p.m. M. Sullivan said the Linn/Johnson County Public Leadership Group meeting for next week was cancelled and has not been rescheduled.
R. Sullivan said the Chamber has created a flood relief fund to help some of the businesses affected. He said the Board is interested in doing something with that but there was a question of what level of support to provide. R. Sullivan asked Budget Coordinator Rich Claiborne if he had looked for where the support may come from because it is not a budgeted expense. Claiborne responded he could find room for that in certain flex accounts. Neuzil said he is interested particularly if other communities would be stepping up and doing so as well. He said Chamber of Commerce Vice President and Director of Public Policy Rebecca Neades is present. Neuzil asked if other communities were contributing. R. Sullivan said absolutely. Neuzil asked if other communities have contributed. Neades said Iowa City and Coralville both have given $75,000 towards the fund, and the Chamber is in the process of raising another $75,000 to match. Neades said there are still a few grants left, but the more money brought in the better.
Stutsman asked if these were grants and not loans. Neades replied they are zero interest loans. She said if the business stays open for eighteen months from the time they reopen or from the time they get the money, it's forgivable. Stutsman asked if there was a $5,000 limit. Neades said there was a $5,000 limit to be applied towards cleanup and inspection. Neuzil asked if it was for any business, not only a Chamber business. Neades said correct. She said they are serving the community as needed.
R. Sullivan said he liked the idea of not having to take individual applications and allowing the group that already exists handle this process. He said the question is how much money to put towards the project. R Sullivan said $75,000 is more than the County puts toward economic development total. He said the question is what can the County afford.
Harney asked Neades if zero interest on the $5,000 is expected to be paid back to the Chamber for interest. Neades said if they don't stay in business, they pay it back. She said the problem is if they don't stay in business, they will probably have trouble paying the amount back. Neades said the idea is to keep people who know they are not going to be in business from taking the money and hold them accountable if they take the money just to lower their debt load. She said she delivered a couple of the checks, and it is emotional for small business owners. Neades said these funds are for small businesses only. She said small businesses run on tight margins with 25 or fewer employees. She said the influx of even $5,000 makes a huge difference on whether a business can stay open. Neades said it has been amazing the support and emotion the employees show.
Neuzil said the Board needs a formal request. Neuzil said it would be interesting to know if there is a waiting list. Stutsman said the Chamber is asking the Board to contribute to the fund. She said the Board just needs to decide how much. Neuzil said that if there is an ongoing list of people that need assistance then they should contribute. He said he didn't want the County to give up $10,000-$50,000 to sit in a fund. Neades said there is no worry. She said they have been given the amount as the grants come in, and they are turning some down. Stutsman asked Neades if they were primarily Iowa City and Coralville businesses, or businesses outside the area. Neades replied they are only Iowa City and Coralville. Harney asked if there has been any in the rural areas at all. Neades said she would have to go back and look, but that she didn't think they had received requests. R. Sullivan said there were affected businesses on 965. Neades said this grant was set up between Iowa City and Coralville and the Chamber. She said because the communities contributed to the fund so greatly, that is where the funds are focused.
Stutsman said that since the Board focuses on the unincorporated area, she didn't think it would be appropriate to match Coralville or Iowa City's amount. R. Sullivan said he doesn't think the Board could. Neuzil said the Board put significant dollars into a lot of different resources to help residents. Stutsman said they'll get a lot of that back too. Neuzil said in terms of a request, it would be a goodwill offer from the County to step up like the other communities. Stutsman said the message is good faith to the community to show that the Board supports the businesses. Meyers asked Neades if the Chamber had solicited the businesses or listed them or if the businesses had come to Chamber. Neades replied both. She said there have been people that called in to give gifts anywhere from $50 to $10,000 across the board. She said they set out to get a lot of small donations from Chamber members and it's primarily what people think they can give. Meyers asked if the grant recipients are coming to Neades and filling out an application. Neades responded absolutely, Iowa City is also involved in this process.
Stutsman said the Chamber was doing private fundraising. Neades responded they still are. Stutsman asked what was the goal for private fundraising and how much has been raised. Neades said she thinks they were at $49,000 and there are some other larger requests out that will probably come through. Meyers asked if Iowa City, Coralville, and the Chamber have agreed to put $75,000. Neades said Iowa City and Coralville have already stepped up and paid that amount, and the Chamber said they would match what they could, and $75,000 is the goal. She said the Chamber would go beyond that if they thought they could do it. Neades reminded the Board not to forget the inequity between property taxes. She said there are businesses paying almost 100% of their property taxes. Neades said it is a really good thing for the County.
Stutsman said the Board needs to consider and discuss an amount. R. Sullivan said he wanted Claiborne to figure out exactly what is available because this is an off-budget item. Neuzil said he thought they should look at ranges in the $5,000-$25,000 contributions and figure out where that line item would come from and the impact of giving that amount. Neuzil said normally the Board does not do anything out of the budget cycle and he can't remember a contribution besides a community attraction and tourism grant that was made off cycle. He said the CAT grants do not start funding until the following year. R. Sullivan said this would be put on next week's formal agenda with a set dollar amount attached. He said meanwhile in the intervening week the Board can talk with Claiborne individually to come up with a consensus amount to put on the agenda.
Harney said he talked to County Treasurer Tom Kriz about the possibility of allowing individuals to utilize funds and not pay the interest on late penalty fees. He said that would allow individuals to go until June 2009 interest free. Stutsman clarified people would still pay their taxes but this would allow them to pay them late. Harney said yes, people will still pay taxes before June 1, 2008, before the tax sale. Neuzil said this not tax abatement. Stutsman said no.
Kriz explained it is not tax abatement with those options. He said there is a section in the Iowa code 427.8 which addresses guidelines for the Board. Kriz said it addresses suspension, removing interest, and similar items. He said this is a category to talk about with the County Attorney's office to see how requests may fit in with the guidelines. Kriz said anytime taxes are moved they can impact budgets. He said a little over $160 million is taxed and the bulk of the funds go to the biggest shares on October 10, to the cities and school districts and then again on April 10 to the cities and school districts. Kriz said a delay period for taxes will affect the budgets of the cities, school district and even the County in major ways. Kriz said in Iowa City and Coralville about 15% of the tax dollars come back to the County. He said about 35-40% goes to the schools or the cities involved. Kriz said the Treasurer's Office would have to find a field or code to mark something. He said the real estate systems are the same in Iowa throughout all 99 counties. He said the Treasurer's Office would have to find a mechanism to not have the interest accrued. Neuzil said the Board has received calls from businesses and folks that have had hardships with the flood situation. He said these people can pay their taxes and are going to but this may be a mechanism to help the flood damaged areas and allow individuals delay paying taxes until June 1, 2008.
Kriz said one of the suggestions tax payers had asked for was if they could pay taxes late. He said currently the Treasurer's Office is collecting taxes for first payments, which are due on September 1, 2008. Kriz said those payments will not become delinquent until October 1, 2008. He said on October 1, 2008, a 1 1/2% monthly interest fee is added to those taxes. Kriz said that would be 1 1/2% interest through tax time and would continue to accrue interest through the March payment. He said on the half due in March, another 1 1/2% would be added. Kriz that said all unpaid taxes are sold at tax sale on the third Monday in June, as required by law. He said that cannot be changed. Neuzil commented taxes have to be paid by June 1, 2009. Kriz said this idea could prolong the inevitable but it doesn't stop it. He said if people were to delay the payment until June 1, 2009, those people would need to consider that they will have another years taxes due three months later in September.
Assistant County Attorney Andy Chappell said he hasn't had time to consider this issue. He said he received a call from Kriz indicating this was on the agenda. Chappell said, in all honesty, he didn't see the point of spending time to look at it until he hears of interest from three Supervisors. He said if there are three Supervisors interested in pursuing this option the Attorney's Office would get together with the Treasurer's Office and Kriz to see if this can be done and what the semantics are if this is implemented. Chappell said the circumstances under which interest is released are situations that compromise the total. He said the delay is a tool used during litigation to sue someone to get back taxes. Chappell said he doubts the code section was designed with the purpose of wholesale. He said it was not meant for telling everyone to pay late and interest will be taken care of. He said it can be used in that way but it needs to really be looked at. Chappell said the Board will have the same problems as abatements. He said the Board will have to determine who will get the potential benefit. He said the easiest way to say it was to say anyone can do it which avoids setting up a program for management. Chappell said letting everyone benefit will cause a cash flow problem for the cities and school districts. He said the Board will need to create criteria for eligible businesses and designate a person to manage applicants and screen out people that do not fit the decided guidelines. Chappell said there are other alternatives for getting money to people but they have not been considered yet. Chappell said he and Kriz would look at it with County Attorney Janet Lyness. He said he would like to study the semantics of this program. Chappell said if the County pursues this the Board should get a time estimate from Kriz about how much time it will take. Stutsman asked if they could get the project done in time with the current staff. Kriz said it would take some time, but anything can be done
Harney said the Board has received requests from people wanting the taxes abated, but the County cannot afford that. He said an idea is to put the request on the agenda. Harney explained that it is a legitimate request if they have a FEMA number, and a certain amount of damage on their homes or business to get cash flow going again and be able to pay their taxes. He said if people have nothing coming in they have nothing to pay out. Harney said if they go out of business they lose that. Stutsman asked Harney if he was talking about businesses or residences. Harney said both. Chappell said in honestly that is why no action has been taken toward this issue. He said he suspected when the Board decided against abatements, they would at some point hear a proposal to consider. R. Sullivan said Kriz had mentioned the County's affected properties are in Coralville or Iowa City. He said, for the most part, affected properties are served by the Iowa City Community School District. R. Sullivan said representatives of the City of Iowa City and the Iowa City School District are present.
Iowa City City Manager Michael Lombardo said if the Board decides to take action it is important for them to realize this will go to the County's portion of the tax, not the City's portion. He said Iowa City has $7 million in damages and costs some will be reimbursed by FEMA, but a great deal will not. Lombardo said Iowa City has over $100 million in infrastructure projects that will have flood abatement built into it. He said he does not know how they will restore neighborhoods in which FEMA dollars fall short of full buyout or any flood mitigation measures that will attend to those measures. He said beyond that, day to day operations will cause a significant cash flow challenge without assistance. Lombardo said they will have to call investments and have begun to look at alternatives. He said they are hopeful this is not something the Board would entertain but these are difficult times. He said they have to be in a position to respond and help people out. Lombardo said they have just begun to look at the implications of the situation. Neuzil said the Board appreciates the letter they received from Lombardo and the City in regards to the abatement issue. Stutsman asked what the amount was for infrastructure repair. Lombardo said there is over $100 million in projects Iowa City is considering but they do not have funding for those projects. He said they have approached the Federal delegation and State Representatives and asked for supplemental appropriations.
Iowa City Community School District Superintendent Lane Plugge said Iowa City Community School District Executive Director of Administrative Services Paul Bobek is also present to provide facts and figures if needed. Plugge said there would be a cash flow problem but not knowing what the impact is makes it difficult to decide on a reaction. He said the Iowa City School District budgets are set, and the budgets were primarily labor. Plugge said making payroll is the main concern. He said they will have to look at a tax anticipation note program. He said he didn't know how large, but it would be used to bridge until their draw is received. He said the Iowa City School District expects to receive tax monies on October 1, 2008. Plugge said the total property taxes are about $55 million district wide. He said he didn't know what portion of that tax would be impacted. Meyers said one of the proposals is for businesses to continue to make partial payments up until June 1, 2008. Neuzil said the Board must anticipate there are likely some homeowners or businesses that won't be able to pay their taxes because of hardship. He said he hoped everyone realizes there will likely be a cash flow issue anyway. Neuzil said if the Board doesn't do anything to address this issue those people are not going to pay their taxes and will get the 1 1/2% fine. Plugge said Iowa City is anticipating a possible cash-flow problem from the State. He said the Iowa City School District didn't have any property damage. He said the will not know the impact for certain until after Labor Day.
Stutsman asked Plugge about a tax anticipation notice. Plugge responded the School would borrow money. Stutsman asked if interest would be paid on that borrowed money. Plugge said yes. Stutsman said this seems like an administrative nightmare. Meyers said Lombardo made a comment about excluding the City and the School District to only address the County’s portion. He said something like that would be a bookkeeping nightmare. Lombardo said it would be the same bookkeeping procedures however the amount would be much less. Neuzil asked if that would significantly help a business or not considering it is 16-17% of the total tax bill. Neuzil said on $10,000 taxes would be $1,700. He said it would help a little, but factoring in the administrative issues it seems like the Board should do it for all or do nothing. Stutsman agreed. R. Sullivan asked Bobek about payroll procedures and if teachers are paid monthly. Neuzil said the Iowa City Community School District pays monthly. Bobek explained the whole staff is paid on a monthly basis. He said teachers and administrators get paid once a month and some staff are paid twice monthly. He said the average payroll grosses about $7 million a month. Bobek said that the total District budget for next year is approximately $130 million for all funds. He said a $100 million is for the general fund only which pays for salaries, benefits, utilities and other administrative costs.
Jim Kerr said he represents the owners of property in the Stevens Drive area which was under approximately four feet of water. He said it is important for the Board to realize what property owners are not asking for. He said he is not requesting for the ability to not pay his property taxes. He said he would like the Board to consider allowing some of the property owners that were hit hard to pay their taxes late without penalty. He said his initial thought was a delay of six months. Kerr said June 1, 2009 would be an extra gift, but he was hoping for the March 31, 2009, which is the date that second half of taxes are due. He said he was hoping to postpone payment without having to incur the interest penalty. Kerr said what that allows him to take the money he owes the County in taxes in 30 days and pay contractors and suppliers around town for the thousands of dollars he's obligated to pay. Kerr said the time would allow the people who use the buildings he owns to get back to business and get people back to work. Kerr said starting business again allows him and property owners to generate income and create the cash flow that is needed to pay property taxes. He said they have been without cash flows since May of 2008. Kerr said June, July, and August of 2008 has been lost and September isn't looking well either. Kerr said he realized Kriz has criteria to meet. He said he didn't want to ask the Board to do things that are incredibly difficult or unreasonable. Kerr said it seemed to him that to waive the interest penalty for six months or ten months would enhance the property owner’s cash flows tremendously and allow everyone to go back to square one earlier. Kerr thanked the Chamber of Commerce for putting together the program. He said he received a check for $5,000 which was exceedingly nice. He said he had spent much more than that amount on the first day to get back into the property. Kerr said cleanup was very costly. He said if the Board can waive the interest penalty for the first six months he would be very appreciative, and he thinks everyone else in the Stevens Drive area feels the same way.
Meyers asked if a graduated program where portions of the tax payment are made within a three month period would help. Kerr said absolutely, anything would help. Meyers said he understands that an absence of cash flow will create a ripple effect and believes a graduated payment program may help. Kerr said anything that could be orchestrated by the County would be great. He said he is not in a position to tell the Board what to do but is present to ask for their consideration of his thoughts. He said the interest holiday for the amount of taxes due for six months would free up, for him, $10,000. He said if he doesn't have to pay that amount in 30 days he can then pay contractors and suppliers. Kerr said it will also get his tenants back in place to allow the tenants to bring back their employees and get them back on the payroll. He said it would also allow his tenants to start paying him rent again, which will provide the tax money to pay the County in March 2009. He said he isn't asking for any money, he is just asking not to be penalized.
Neuzil said Kerr's approach is better than not getting any taxes. Kriz said there is so much that factors into the approach. He said there are those owners with mortgages, and lenders will not let owners not pay taxes on time. Kriz said there are also those people who have bought or sold property on contract, and failure to pay property taxes in a specified amount of time can be cause for forfeiture of a contract. Stutsman asked if that would affect businesses as well in terms of mortgages. Kriz said the stipulation in any loan agreement that he was ever involved with at the banks is if one failed to pay their taxes, they could have their loans called at any time. R. Sullivan said if there was a mortgage on the building taxes are probably being paid in the mortgage. Kriz said some are, some are not, but it depends. He said on homes it is more common than commercial property, but it is still possible. Kriz said it is hard to know the actual dollar amount needed to fix anything. Meyers said they need to get the mortgage lenders and the banks involved in this process. Kriz said lenders usually will not let taxes not be paid, regardless of any circumstance. Neuzil said this tax holiday wouldn't be a requirement; this would be available if people needed it. Kriz said there are a lot of situations in which people are not escrowed. Meyers asked if individuals making a monthly mortgage payment could also, as part of the agreement, make a portion of their tax payment. Kriz explained the money would already be there because the individual had been paying for it ahead of time. Kriz said when September and March roll around, they take taxes from what is operating and those taxes are from a period when there wasn't much flooding.
Russell Karkowski said he has a business at 1805 Stevens Drive with partner David Naso. Karkowski said he can understand the administrative consequences of trying to change things, but the Board has to walk a mile in another person's shoes to understand the situation. Karkowski said people's income was taken away then additional expenses of $10-$100,000 were acquired without any income to address those expenses. He said, on top of that, the property is no longer of any use for a period of time until those expenses are paid to get it up and running again. Karkowski said in addition, the property owners are asked to pay taxes on the property that is not usable. He said this is the situation many business owners are currently faced with. Karkowski said he understands there are administrative consequences and the problems in dealing with this request.. He said when the Board approaches the issue he suggests they seriously consider a much greater contribution to the Chamber of Commerce program. Karkowski said business owners who are in need, when notified of the possibility of funding, will seek it. He said he was able to get a grant. He said the consequences of the flood don't stop when the water recedes. Karkowski said the consequences of the flood start several months after the flood when all the bills start coming. He said he put a tremendous amount of money and effort into improving his building. Karkowski said he took a building that was very low on the tax rolls and increased the taxes by 50%, due to the improvements. Karkowski said he will have to redo all of the improvements over again. He said the County is asking people to pay the same taxes on a property that doesn't have the same value. Karkowski said his property was recently reassessed. He asked letting people pay fewer taxes by decreasing the value of the flood damaged properties was an option. He suggested the Board make a strong response to the Chamber's request for funding. Karkowski said it would be an easy way to address people's need for relief. He said they should remember the properties that were flooded during the next assessment.
Harney said reassessment is a process where one will not see the results for a year or more. He said people are paying taxes a year behind. Meyers said it is a good idea to pay attention to the damaged properties during the next assessment. Harney said the Chamber program is a good idea but it doesn't change the amount of money people need. Harney said it will help people get back on their feet but it's not enough to cover the total expenses.
R. Sullivan said his understanding is if a property is in a state of repair at a given point it is assessed differently and the property owner will go through the appeal process after repairs are completed. Chappell said in April of 2008 owners should have received an assessment notice which shows the value of property declared by the City or County assessors as of January 1, 2008. Chappell said that is the valuation for the tax year beginning July 1, 2008 and ending June 30, 2009. He said the taxes are payable September 2009 and March 2010. Chappell said usually properties are assessed every other year and there is a window to challenge assessments, usually in May. He said that is when the Board of Review meets, and they have the authority to make changes to the value of properties. Chappell said if that window to challenge is missed, there is no authority to change the value. He said usually a valuation lasts two years. Chappell said in an interim year the assessor has the ability to go out and reassess the property. Chappell said in the interim year the only reason to challenge the property tax is to argue the value of the property has decreased in value from the prior year. Chappell said in April one would file an appeal with the Board of Review arguing that as of January 1, 2009, the property was less valuable than the year before. He said the Board of Review would be allowed then to decrease the valuation of the property. Chappell said it is an interim year appeal.
Meyers asked if a property owner could make the argument that there was a four or five month period in which the value of the property was less than the previous year. Chappell said he represents the County Board of Review, he said if he has an expert valuate the properties they will be assessed at the value as of January 1, 2008. He said the reason for that is to decrease fluctuation in value because there would be no way to determine the fair market value. Chappell said this process is required by the state code. He said the property has to be assessed as it exists on January 1. Meyers asked if it would be irrelevant as compared to what it was on, for example, September 12. Chappell said yes. Meyers asked if the same rules applied for house fires or tornados. Chappell said yes.
Stutsman asked if the Board would have to take into consideration flood insurance like abatements. Chappell said that is all part of the investigation. Stutsman said she wanted to know what kind of impact the Chamber program would have. She asked how many properties and, what kind of taxes. Kriz said that information would need to come from the Auditor's Office. M. Sullivan said the Auditor's Office told the Board that they didn't want to get involved with the situation and they weren't going to dedicate the resources he needs to look at the valuations. M. Sullivan said that would be one of the many things he would need to look at things.
Claiborne said if there were $500 million in assessed valuation, from the General Basic fund, the County would be taking a $1,750,000 hit. Stutsman asked if that would just be the County or more. Claiborne responded it would be the County and wouldn't include rural, MH/DD, Secondary Roads, or any other funds. Stutsman asked if basically it would impact cash flow. Meyers replied the money would be there in the end, just not when it is expected. Kriz said it's true to say it just impacts cash flow, but cash flow isn't some amorphous term. He said cash flow means salaries, cash for projects, paying for the work already done or committed to in assisting with the flood. Kriz said he dislikes the analogy that governments should be run like businesses. He said they provide services not to make a profit, but to the extent that they are going to be getting monthly bills that are going to be due regardless of what actions are taken.
Harney said the true picture of how everything will be impacted is still an unknown. Kriz said it is hard to know, any money collected in one month is distributed to the cities, townships, school districts, to the tenth of the following month. He said Harney was right in that it will come in some large sums on October 10, 2008 and April 10, 2009. Kriz said that money is used over that period of time to run government. He said the money will come whether the money is paid by the property owner or it is sold at a tax sale June 15, 2009. Kriz said that money eventually comes to taxing entities; it just matters when it comes in proportion to what is expected. He said he was sure the cities and school districts have a general idea of what they will be receiving each period and budget accordingly, to spread out funds until the next chunk of money comes in.
Harney asked if they the number of businesses and homes affected that may qualify is known. Lombardo said he looked briefly at the statute. He said there are limiting factors to how they should apply. Lombardo said that in terms of the number of businesses and buildings affected, in Iowa City alone they have been using 100 as a broad estimate. He added he didn't know the exact number, as they are still focused on flood recovery efforts. Lombardo added that he hasn't specifically counted businesses, but it is around 100 in the City. Chappell said every year in the budget there is a line item to account for interest that the County earns on investments. He said the County's investments are tax dollars, and that money is spoken for. Chappell said that is something to take into consideration, because if the Board produced the money they were going to invest, they would decrease the amount of interest received. He added it would be money budgeted for, and obviously they have smaller amounts with 15-16%, which he doesn't have any ideas in terms of what those figures are.
R. Sullivan said the Board needs to do the things they are charged with doing and not do anything to harm their ability to serve the public. R. Sullivan said the Board is there to serve the public. He said he is afraid that monkeying around with stuff could create bigger problems in the future. He said he knows people in the community are struggling. R. Sullivan said it is important for the Board to do what they can to help address that, but the only way they have to do so is within the current system. R. Sullivan said he would prefer to ask folks to pay their taxes as they always have, and look at ways to help the affected people. He said he is in favor of doing what he can to help.
Meyers said he agreed with R. Sullivan. He said people paying mortgages and part of the payment being taxes going into escrow is a complicated mess. Meyers said Karkowski's suggestion of working through the Chamber by making a donation is less complicated. He said the only problem is that the Chamber of Commerce is only dealing with businesses, and there are a number of homeowners asking for similar type considerations. R. Sullivan said the County did put $75,000 for flood relief through United Way. Meyers said he had a conversation with Social Services Coordinator Amy Correia and that money was given to different people for temporary housing. Stutsman said the bottom line is the Board is charged with making a decision, but they are the ones least impacted by the decision. She said it is the cities and schools that will have the biggest impact. Stutsman said it is difficult when it is in those terms.
Neuzil said there was a charge after the discussion about abatements to look for other opportunities. Neuzil said he was looking forward to having the current discussion and he would like to keep the conversation going. He said he wanted to know if it can be done or not, and that he hadn't heard a no yet. Neuzil said abatements were a clear no. He said if it is an impact on a large scale, then the City of Iowa City and School District needs to pay close attention to their budgets. Neuzil said looking at the project on a smaller scale with criteria could be discussed. He said if they can come to a level of criteria that could have a number of things a part of it, which could be just businesses or those who suffer the most severe of damages. Neuzil added it could be putting a cap or ceiling on eligible businesses they would allow to apply. He said it could be a first come, first serve type of eligibility. Neuzil said it could be a time limit of eligibility. He said these are different things that all could be brought about in the conversation the Board could actually do and wouldn't have a huge impact on everyone's budget. Neuzil said there is still a possibility. He said he would like to see the conversation continue without saying no.
R. Sullivan said they could do all those things and still collect taxes. Neuzil said sure. Harney said he agrees with Neuzil, the criteria they set forth to be qualified for an exemption would have an impact on what could be done. He said he doesn't want this to affect the cities or school boards. Harney said a member of the public made a good point that he has the apartments and can't get the income back from those. He said he can't to go back into business if he can't have some way of funding the repairs needed. He said he does not want to put the Board in a bind. Harney said the reason he asked to put the topic back on the agenda was because they have had the request and everyone needs to be heard. He said the Board needs to make due consideration of their request. Harney said he believed they could come up with some form of criteria to help people move forward. He said those that are insured and don't qualify for FEMA perhaps shouldn't qualify for assistance from the County as well. Harney said he knows assistance is needed in many ways, and perhaps they can provide that in other Human Service ways, rather than tax abatements.
R. Sullivan said they heard Lombardo ask not to consider the City's portion of the tax. He said no one from Coralville was able to make it to the meeting. R. Sullivan said the School District was less clear. He asked if they were simply talking about the County portion or the whole thing. Neuzil said he assumed they were talking about the whole thing and not looking at splitting apart this issue. Stutsman said she wanted to know what kind of dollars they are talking about and what kind of impact it is going to make. Stutsman said it may be only a couple of businesses interested in doing so. She said two or three have come forward, and hopefully many more after they hear about what the Board is considering. Stutsman said if it won't amount to much then there wouldn't be a problem. She said if they are talking millions of dollars, she and the other Board members will have to take a close look at it. Neuzil said part of the eligibility could be only half a million dollars of taxes. He said there are those possibilities out there and the Board can set limits. Kriz said if the Board peruses this, the first thing to do would be to get together with the County Attorney's Office and find out if they can. Kriz said the Attorney can see if this is possible within the code and give the Board an idea on whether this is a realistic possibility.
Harney said the only consideration is the tax issue, and maybe there are other ways to set money aside. He said giving people like Kerr an extra $5,000 temporarily. R. Sullivan said messing with taxes is a voodoo way to help. He said they should collect and if people can't pay there is already a process. R. Sullivan he thinks they need to look into what they have coming in and what they can do to help given the system that is established by the State of Iowa to follow in terms of taxes. M. Sullivan said if the Board chooses that route then a work session would be suitable for discussion. R. Sullivan said he is extremely uncomfortable with considering the City's portion when the representative from the City has asked the Board not to. Neuzil asked if there were three members in the Board that want to look into the proposal further. Stutsman added to see if they could even do it, and ask Lyness to spend time investigating and report back. Neuzil said he would like this to be investigated. Meyers said having some numbers would be helpful. Neuzil said they are just trying to see if it is legal.
Neuzil said they keep going back to the abatement problem, where they are trying to run on the same system. He said they just had the worst disaster in County history. He said if they can find a way to help some people they should. Stutsman said they have helped a lot of people. Neuzil said they could do more. Meyers said he doesn't think people are arguing that point, but it is how they help people that are the problem. He said he thinks the tax process is too complicated. He said everyone would like to figure out a way to help, but that it would be a bureaucratic nightmare by trying to do the tax thing. Neuzil said they may or may not, but that they won't know until they try.
Stutsman said there are at least three Board members, Neuzil, Stutsman, and Harney, who would like the County Attorney to do some evaluation. Harney said along the same line he would like to know the impact it will have, because if it is a huge number they won't be able to do it. M. Sullivan said it will be difficult to put a target on it. R. Sullivan asked if they could answer the legality question first. M. Sullivan said it wasn't that they couldn't come up with something, however he didn't know if they could come up with something in a week in terms of numbers. Kriz said they could come up with numbers, but it will be work for the Auditor's Office, and they will need to be directed to look at those. Neuzil said they wouldn't need those numbers if they put a cap on the eligibility. Kriz said they would need to determine a lottery system or another due process. Harney said he was hoping the State and Rebuild Iowa club would offer some suggestions. R. Sullivan said that is part of the issue when there is a disaster of this magnitude. He said the Federal Government can address this issue. R. Sullivan said they print money, and the State of Iowa is constitutionally limited to 99% of their budget that they can spend. He said that the County is limited in the availability of their funds and exceeding those. R. Sullivan said the City and School District are in similar situations. He said there is very little extra money. He said the County is not meant to deal with disasters, that is why FEMA was created. Harney said he doesn't like telling people to sink or swim, and if they can't make it they go out of business. Neuzil said they aren't asking people not to pay their taxes. He said they are talking about having people not pay their taxes until March 2009.
Kriz said the issue is not to have the interest accrue. He said he thought people would like to pay their taxes, but the added 1 1/2% a month that accrues is a real issue. R. Sullivan said it is completely appropriate for the Board to have some kind of work session to talk about what they can do to help impacted individuals and businesses. Chappell said there were three Board members that were interested in having his office look into the prospect. He said he would be in contact with County Auditor Tom Slockett to look into that. Chappell said the Board may want to get some indication to other taxing authorities to come up with any ideas of what kind of impact it would make given flood affected properties in their various governmental subdivisions. He said he thought the City would know best what its affected properties are, and the school district will have to take it on faith as to how many properties will be affected in its taxing purview. Chappell said he also recommended asking Slockett to think about what administration will have to happen. He said they may literally be talking about a staff person, and they need to think about whether it is worth it to pay another staff person to administer a program. He suggested asking Claiborne and M. Sullivan to see if there is money from the County's budget to help.
Stutsman asked Kerr and Karkowski if they had flood insurance. Kerr said they were in the 500 year flood plain, and it was his understanding that 2% of the people affected by the flood had flood insurance. He said they carefully checked when they originally purchased the building. Kerr thought they were in the 500 year flood plain, and since they were doing financial planning themselves, they didn't have to have flood insurance. Stutsman asked Karkowski if he had flood insurance. Karkwoski said he didn’t. He said the FEMA program doesn't apply. He said the Small Business Administration handles small business. He said FEMA doesn't do anything for commercial properties. R. Sullivan said the SBA program is still Federal. Karkwoski said there is a big difference between FEMA and SBA. He said their functions and ground rules are different. Karkowski said he isn't asking for any money, he's just asking not to be penalized for six months. R. Sullivan said Lyness will pursue the legality of the situation. He asked what if the Board would like to take other measures or wait until a response from Lyness is received. Stutsman said she would like to wait. Harney said he would like to wait as well.
Adjourned at 7:47 p.m.
Attest: Tom Slockett, Auditor
By John Deeth, Recording Secretary