Thompson: The next item on our agenda has to do with the Coralville TIF. I noticed that we have Tom Kriz and Tom Slockett here. Perhaps you can give us some background on what effect the TIF has on the County and I know that Pat White has also had some comments that he’s shared with the Board, so you might want to say those. Who wants to be first?

Lehman: Can we just have a little information about what a TIF is?

County Auditor Tom Slockett: TIF stands for Tax Incremental Financing District. The theory is that when you’re developing a land due to urban renewal reasons or for urban blight, you set the value of the land before the improvements are made. That’s the base, and then you issue bonds in order to pay for the improvements and infrastructure and so forth. All of the increased valuation that has been built by the bonds, goes to pay the bonds off. The first significant TIF we’ve had… early on a number of job TIFs from Kirkwood that were smaller amounts where industries were reimbursed for job training. The first significant one was the Coral Ridge project by Coralville. There are minutes and documentation that Coralville stated repeatedly that these bonds would be paid off, in they hoped 6 or 7 years but not longer then 12 years. I think that’s one of the problems that I see with this new proposal. Is it extending that to pay additional 30 year bonds off. The way TIFs raise money are numerous. One is the diversion that I talked about where the new valuation instead of going to the County, school district, County Assessor, area school etc, and there are a number of others. It goes to pay off the bonds. Another way is through the mental health/developmental disabilities levy, because that levy is set by law as x number of dollars that can be raised. There is more flexibility in the other areas in that if the jurisdictions receive the money they could either lower taxes or spend it. But with the mental health/developmental disability levy, they can’t spend additional tax dollars because the tax dollars are frozen. So the impact there is to increase the levies paid by the citizens to raise the same amount of money they would otherwise be able to achieve without it. That impact in Johnson County in the current year is about $105,000. The total diversion in Coralville from local governments to the TIF in the current fiscal year, because those are the real numbers that we have, is $4,344,531. The third way that the TIF raises money is through the PPEL levy, that’s the physical plant and equipment levy schools have. If the Cities that have TIFs allow it, the school are allowed to use the money that they need and have levied for physical plant and equipment for of the schools as planned. But under the law all the City has do to take that money is to send a letter and to ask for it, which Coralville has done. That’s a total between Clear Creek Amana and the City of Iowa City that’s $136,769. That’s also included in the diversion number that I gave you, $4,344,531, but it’s just another of the mechanisms. The magnitude of this is really kind of staggering and I don’t think people are generally aware of it. I’ve got 4 different categories in Johnson County. The first is the minimum paid by any citizen of Johnson County, and that would be non-Iowa City School District and non-Clear Creek Amana School District parts of the county. The cost for those people would be $23 per tax bill in the current year if this TIF were now in effect.

Stutsman: Just for clarification, are you talking about the current TIF just on the Coral Ridge mall. Were not talking about the…

Slockett: No, I’m talking about the proposed TIF. All these discussions are on the effect of the proposed TIF if it were in place in the current year. Because we don’t know what the levies will be next year. We don’t know for sure exactly what the valuations will be, so rather than make projections that can be differing opinions about what the opinions on what the projections are, we’re talking about real tax dollars in the current year if this proposal is in effect.

Lehman: Tom is that $23 per tax bill for the year or is that for half?

Slockett: For the year. So it’s $23 per parcel or per tax bill. The next category is within the Iowa City school district or Clear Creek Amana, but not Coralville and not Iowa City. So, that would include North Liberty, Hills, Tiffin, Oxford, Cosgrove, Penn Township and so forth. Those folks would this current year pay $71 per tax bill. For the City of Iowa City, residents in Iowa City will pay $69 dollars of taxes to the TIF.

Neuzil: Is that for Iowa City schools?

Slockett: It will be Iowa City schools, Ag extension, Area schools, the State has a small levy. There are a number of ways that they pay. Then finally is Coralville. Coralville residents need to know that while they may be utilizing other jurisdictions tax dollars for this project they pay the heaviest cost far and away. The per property tax bill cost of this project for Coralville is $324 a piece. Let me give you the totals for each of the areas. For the non-Iowa City School District, non-Clear Creek Amana School District the total amount is $267,856 dollars. For the Iowa City School District or Clear Creek Amana, non-Coralville, non-Iowa City, it’s $829,504. For the City of Iowa City it’s $1,243,215 dollars. For Coralville itself it’s $2,003,956 so the total amount of property taxes diverted by this TIF proposal if adopted if it were in the current year and realizing that every as valuations increase, inflation and so forth it will be a higher number. The total amount for the proposed TIF would be $4,344,531. So by giving you the notice that Coralville did and holding this public hearing, they will be spending at a sum equal to 73.9% of the current property taxes raised in the current budget year. So this is a significant item. I’ve got two things I’d like to do. First I’d like to talk about the dollars per jurisdiction. The amount of County tax dollars by this proposal that we would loose are $863,837 dollars in the current year for this single proposal. The City of Coralville itself will loose $1,565,441 by this proposal that will go towards the bonds instead of being available for Coralville services. The Iowa City School District will loose $1,163,743 and Clear Creek Amana will loose $575,504 so the school will together have diverted $1.7 million dollars. Then I’d like to finish with 4 questions that I have that I’d just like to get the answers to, I don’t know the answers. One is all the representations made to us at the initiation of the Coral Ridge TIFs were that 6.8 million dollars in bonds were going to be let. But the letter that we received from the City Manager about this meeting indicated that 10.4 million were let. It’s the first time I was aware of it and I just wondering… I’m sure it’s legit, but I’m just wondering how that change occurred from 6.8 million to 10.4. Secondly how can this be done without exceeding Coralville’s debt limit? Again, I just don’t understand how that can happen. Third, why is Coralville asking for 50 million authorization to bond and if they are authorized 50 million what’s to authorize them to increasing it to 50 million later if they so desire? Finally, what’s to keep Coralville from doing this again when these bonds are paid off or before. Those are the points I wanted to make.

Harney: One question I have for you Tom. I’m trying to clarify this in my mind. I understand that the State pays back the schools, in portion of what the dollars they loose. This thing is costing our education system big dollars and there’s a portion of that paid, but it still comes from tax dollars. What is that portion that is repaid to the schools?

Slockett: My understanding is that is about 50%. It works through the State aid formula. It replaces some of the taxes and actually I should give fair attribution to that. It’s always been a mystery to me, what proportion it was, but Peter Fisher who’s in the room and I hope he’ll make some comments later from the University of Iowa, told me that it was approximately 50%.

Harney: So that’s added tax dollars to the residency.

Slockett: That would be replacement of the, some of the property taxes lost, but for the schools. That’s something the County doesn’t gain or the other jurisdictions.

Harney: But all the state taxpayers make this up in their taxes.

Slockett: That’s right, so in fact it’s a way that this TIF raises money Statewide from income taxes and sales taxes. Also it’s interesting for example, blighted areas, Counties that have sever losses in valuation and have problems. Their taxes are going to pay for this economic development here in Johnson County as well through this mechanism. So its just really interesting all the different ways that it operates.

Harney: I can understand Coralville trying to grow and expand out there. At the same time I think their obligations to the community and the County is the State dollars was for the mall area and to me they should go back to the new area that they’re going to upgrade rather than to try extend the mall.

Lehman: There are some limitations of why they can’t create a new TIF area and why they can’t just let this other one run it’s course.

Slockett: Well they would loose all the revenues from it. To me that’s the main limitation. To me, the law just needs to be looked at. I wonder if the legislators fully understand this. There are all sorts of varying opinions. I don’t personally have a problem with what Coralville said it was going to do in creating economic development, using the bonds over the short term to pay for that new valuation. Then providing the communities that service that valuation, like the County and School Districts and so forth with the funds they wouldn’t have otherwise been available in a short and definite period of time, 7 to 10 years. I don’t personally have an objection to that. Others have very much objected to that as well. So, I think what Coralville started out doing was fine, but I feel like they became used to receiving all those tax dollars and now they can’t give it up. What they’re doing now is not something they ought to be doing in my opinion. To me the way the law should be changed is, if you want to create a new TIF, fine. But the base should go up to the total valuation at that point in time, so the communities will get the money that the law allows them to receive through those valuations and then if they create additional value, they can use that to pay off the next bonding.

Thompson: Tom, you mentioned future projects. If the enterprises in the TIF area don’t make money and need to be subsidized by taxpayers can TIF money be used for that indefinitely?

Slockett: Well the TIF is used to pay off the bonds as you are aware the bonding community is very conservative, they will make sure that they pay off the bonds.

Thompson: But do the bonds have to be for infrastructure or can they also be for operating expenses?

Slockett: I believe they only have to be for infrastructure. I’m certainly no expert on that. We’re on the receiving end of the requests to divide these taxes up and to send the money to the correct location, but Pat may know more about that, but my understanding is that is has to be infrastructure.

Stutsman: My understanding too, like for the Coral Ridge Mall there is a time limit on that and that time limit is 2017, but for the area that’s being proposed and that’s considered a blight area and so there’s no time limit on that. So although Coral Ridge would end at 2017, I think the other can go on indefinitely.

Tiffin City Council Member Karen Dils: But they’re merging those 2 districts and once those 2 are merged they have no time limit.

Stutsman: Do they? I don’t know? Is that correct Pat?

White: That’s what this proposal is.

Stutsman: Ok. So that would be indefinitely not see any tax revues from… Wow. Yet were expected to accommodate the additional growth. I agree with what you said Tom. I agree with the initial concept of the TIF and economic development, but I think why do you have economic development and that’s to add to the tax base. Well if we’re never seeing any addition to that tax base, what’s the point of this. So that’s where a lot of my concerns come in. I’m just disappointed. From the very beginning of the Coral Ridge Mall, I had been informed by the City Manager and by Council members that this was just going to be short term. That they needed those tax monies as much as the rest of the County did, the schools and the other Cities. Then to all of a sudden to have this go on indefinitely is just really been disappointing, just been disappointing to say the least. Let alone costly for the Johnson County taxpayer.

Harney: Not only that I think it’s really costly to the education system. This day and age when the tax dollars are so hard to get and education is in such a turmoil when they’re being cut funds that we really are taking a hit on that.

Slockett: The other question is the nature of this proposal is very different from the Coral Ridge Mall because the Coral Ridge Mall created taxable valuation that was later promised to be available. But this is a proposal to finance tax exempt properties. The convention center isn’t going to have valuation, at least initially and for as long as necessary, which could be a long time, as Carol pointed out if things don’t work at in a rosy scenario. The hotel is going to be owned by Coralville and run by a government. I think that if Coralville were a corporation and were using its monopoly power in this way it would be enough to make Bill Gates blush. For them to own a hotel business and compete with their taxpaying hotel industry and my understanding is they’re even going to use the hotel/motel tax earned by this hotel to put back into the TIF, so that won’t be available as well. It’s just to me, I can’t understand where the support comes for doing this.

Thompson: I’m having trouble understanding if this is going to be a non-taxable area where do the tax dollars come from for the TIF?

Stutsman: The mall.

Slockett: That’s why they’re hooking Coral Ridge in.

Neuzil: It comes from Coral Ridge mall and that area.

Slockett: That a good question. Is it an urban renewal or is it blighted area? How are you going to designate the link along I-80 as a blighted area or is that urban renewal? That’s how they’re hooking them together.

Lehman: It boils down to whether or not it’s a legal business practice, which it is versus a community ethical practice. They feel they’re doing the right thing for their community apparently or their leaders are. We have no legal means to stop… Letters of endorsements we’ve done. We could do a letter the opposite way. We have no legal power to stop a TIF.

Slockett: Well, I think what the legislature has done is it has said you only have one way to influence these decisions and that’s through the power of persuasion and through the political process. So, I am here to urge you to do that to your maximum abilities. I’d like, personally I hope that you would take a serious look at your endorsement for the project and I’d like to see you take a public stand against it.

Thompson: Tom, do you have…

County Treasurer Tom Kriz: I’d just add a little twist to that where I am a strong proponent of TIFs if they’re done properly as the Coral Ridge Mall was to be to stimulate the growth and the things that happened there. But on a short-term duration. I think this pushes things way beyond the bounds of what really makes sense. I know most of us thought that the TIF would be in that 10 years or less. Now we’re looking at 2017 and we’re tying other areas to that. I think this really pushes it to extremities. I think Auditor Slockett has shown you that there is a cost to it, no matter how you look at it there is a cost. To rely on the State to pick up a certain amount of the school tax and dollars lost there. For the County to provide ambulance service, to provide many of the things that have to be done. There are no funds to do that. You have an industry and a hotel, things like that. We have a lack of affordable housing in so many ways in this community. Many of those jobs attract people that would need the use of that and other services. I think you really have to look hard at it. I don’t want it to be… I’d hate to see the County say that we just totally don’t like TIFs because I really think there is a place for them. The Coral Ridge mall was the perfect way to start something like that. But I think you need to read beyond that and see where this figures in. Although, we just collect the taxes in my office I can guarantee you that we hear from the taxpayers down there as they’re paying their taxes or notes that I get about things like that. I think those are the notes and those are the people that effected. Everybody in this room, everybody watching, everybody in Johnson County will be effected dollar wise by a decision to do something like this. You can look at the number, you can look at what Tom gave you, but there truly is a cost. I know yesterday I sent a memo out to you with the article that Peter Fisher did and it’s good. He’s done his homework, it’s well done and it really explains, I think in a precise way what is involved there. I think that’s what we’ve been talking about at a County level for a number of years, is to figure out where the TIFs fit and should be and then exercise proper decision from there.

Neuzil: If this doesn’t fly and they decide not to do this. When would this mall TIF end? What’s the prediction right now?

Slockett: Any time. I think they’re very close to paying that off. Within the next year or so.

Stutsman: Revenues from the mall far exceeded anybody’s expectations. I mean it was a good TIF and it accomplished what it was set out to be even beyond what people predicted it would do. As a matter of fact they were ahead of schedule thus far.

White: They had projected fairly conservatively and the actual valuations ended up 20 to 40% higher then what their projections were. They project conservatively on purpose to make sure that it will cash flow. But it will be paid off much sooner than the original estimate if they stick with the plan.

Neuzil: Really are our options to send a letter saying please don’t. Is that all we have here?

Thompson: That’s a good question. What are our options?

White: There’s public hearing. You can appear at the public hearing, but you have a long-standing relationship with Coralville. You can call them up, ask for a joint meeting, tell them that you have major reservations that you’d like to have a public discussion about it. Certainly going to their public hearing would be a first step, but a phone call from the chair to the Mayor saying can we get together tomorrow or Monday or next week to talk about this?

Thompson: When’s the public hearing.

Stutsman: The 8th. Can we, somebody said there was a 7 day period that we needed to respond and we didn’t do that. Does that mean that we cannot respond at the public hearing.

White: Not in my opinion, it doesn’t. There is a 7 day period after the so called consultation, which I characterize as a legislative attempt to encourage intergovernmental communication, but that doesn’t preclude other forms of communication or other attempts to talk to them or to try to get their attention. They can always change their mind. Or modify it, this is actually… I was kind of surprised to see that this is amendment number 4 to Highway 6 Urban Renewal Area. I don’t have any idea what the first 3 amendments were. Apparently it’s been changed already a few times.

Lehman: Sally and I have met with Coralville City Administrator and their Finance Director. I think some around the 1st Avenue area was some of it. But they kind of explained some of the mechanics, but the first time I don’t think we get the gist of the impact. While both Tom’s have explained here. It sounds like a good touchy feely type thing, but you don’t realize the impact of it. I know one of their arguments are if we don’t get to use the TIF, we don’t create the jobs, you don’t get the aftermath afterwards. The question is how long is it going to be before the aftermath comes, the payoff on these. Like you said, this could be on going forever if this is going to be a city owned nonprofit type operation. You can continuously keep bleeding taxes out of this original area to fund this other project.

Slockett: If the Board wishes to make the response that it missed during the 7 day time period, I would suggest that in the response you point out that you received notice of the meeting on December 17th and the meeting was the 20th. So it wasn’t really conducive, it wasn’t very helpful in terms of meeting 7 day deadlines in terms of a response.

Thompson: Is this the plan that’s discussed in the Code that says it has to be in by December 1st?

White: I don’t know the answer to that.

Thompson: If it is, it was late.

Slockett: Well this wouldn’t be the plan. Wouldn’t the plan be the thick document? Did the Board receive that?

Thompson: I never saw it.

Slockett: The office didn’t receive it? We didn’t.

Stutsman: There was some confusion on who had this information. I don’t remember seeing it either Carol.

Thompson: Did anyone see a thick document?

Lehman: Not that was circulated.

Neuzil: Nothing was circulated.

Stutsman: The Auditor’s Office didn’t have it either?

Slockett: No we didn’t receive anything.

Thompson: The Code says on file with the County Auditor. It seems like something that we would have noticed.

Lehman: The process of this is Coralville proposes this TIF and it goes to the State is the correct? Someone there approves it or is it just handled in Coralville.

White: It will just be decided by Coralville.

Lehman: So they make the proposal and the decision.

White: Now as a practical matter there’s some market fact when they reach the point of selling bonds, but it’s essentially a Coralville City Council decision.

Lehman: So there’s no approval beyond that? OK

White: No

Thompson: There was some provision for them to share with us, rather than taking the whole amount of the taxes…

White: Going all the way back to the start of Coral Ridge, I was one of the people who was a little grumpy about what they proposed. Saying you’re going to add cost. Our office is going to have cost, the County Assessor had considerable cost, you’ve had an impact on the Jail, the Sheriff, certainly on the Coralville Police Department and you ought to open up consideration of diverting some of these revenues to acknowledged cost increases. Everybody listened politely and said well, this is short-term pain for long term gain. Now they’ve either not kept their word or changed their mind, or some combination of those. Now it’s even more, now it’s a long term pain for even longer term gain unless they change their mind again. I think they could agree, I think there is provision in the statute for them to share some of the TIF revenue. I don’t think they need to do it just within the TIF revenue. I think they could agree to make a payment to the County or to school districts in lou of taxes. I think, certainly their home rule authority would allow them to negotiate with any of the taxing bodies for some revenue sharing to minimize the impact. One of the things that I was saying even back when Coral Ridge was first being discussed, was that plan had the rural resident, a person who farms South of Lone Tree or West of Swisher subsidizing the Coral Ridge Mall. That’s continued to be the case and now they’d not only be subsidizing Coral Ridge, but they’d be subsidizing the convention center and the hotel. I just don’t thin that’s fair and I don’t think people fully understand that.

Stutsman: Yes.

Thompson: Could you also talk about the requirement for low-income housing? I didn’t understand how that was related to this.

White: I can’t I didn’t look at that.

Stutsman: Jeff has talked about that. Is he here today? His door was shut when I went by this morning I thought maybe he wasn’t here.

Sullivan: Yes. He should be downstairs.

Thompson: It seems like both of these projects produce a lot of jobs that don’t pay very high and will bring people to our community that need affordable housing.

White: Who need human services.

Thompson: Yes, of all kinds.

Slockett: One more point is that if you’re talking about payment in lou of taxes, remember this proposal isn’t the only Coralville TIF. The total County dollars lost to Coralville TIFs in the current year is from, Coralville only, is $1,093,637 dollars.

Stutsman: That’s just Coralville because other communities have TIFs in the area.

Slockett: Correct. The total diverted to TIFs Countywide in all Cities and in all locations if $7,211,468.

Stutsman: That is 7 million of tax dollars.

Slockett: Yes, everything. That includes County dollars, Ag extension, Area School dollars, County Assessor dollars, City dollars, school, both area school and schools, and State. There are some State dollars.

Lehman: That’s current not the proposed?

Slockett: That’s the current year, all area, not the proposed. Correct.

Thompson: So this would add another 4 million dollars.

Slockett: Well, some of it is the same.

Stutsman: Yes. Coral Ridge Mall.

Slockett: The majority of it is already included. This is what they call their Highway 6 project, which is really 1st Avenue, if you look at it. I don’t know why they call it Hwy 6 and the Coral Ridge being connected by a gooseneck along I-80.

Thompson: Jeff Horne is here now. Jeff we were asking between the relationship between the TIF district to low income for affordable housing.

Budget Coordinator Jeff Horne: (inaudible) for a housing TIF you have to do that.

Thompson: Apparently there is none included in the current plan.

Horne: No, that’s why they drove the area through, straight through, they’d go through some housing and that would probably make it into a housing TIF area.

Stutsman: What would that mean? That they’d be responsible for providing low income housing?

Horne: Modernize part of the TIF if you’re going to use a residential TIF. Similar to what’s going on in Tiffin, with some of theirs are built through residential sewers through residential areas. If they were big enough, they would have to provide moderate low income as part of that TIF.

Lehman: So the proposed TIF district, the maps we’ve seen. They’re running it down Interstate to stay away from housing.

Horne: Basically.

Lehman: To make the connections between the two sites. Jeff did attend the hearing I believe on December 20th. I apologize for bringing you in here in the middle…

Stutsman: I don’t think that was a hearing, I think it was just an informational meeting.

Neuzil: No, it was. That’s right Sally.

White: It was what the law calls consultation.

Horne: It was the Coralville City Administrator Finance Officer, one of their assistant City Attorneys, myself, a representative from the school district and Claire attended also.

Stutsman: Craig is from the Clear Creak County…

Horne: Clear Creek County School District. It was not very long.

White: The theory is that is an opportunity for you to say wait a minute here we don’t understand this or we don’t agree with it. An honest assessment is that Jeff went without any discussion from the Board or any policy direction or any sense of what the County thought about it.

Horne: Well I did voice some of the concerns that you all have told me about the district without saying it was our formal position.

White: You know we also talk about the Coral Ridge Mall TIF, but it’s it the case where it’s really capturing more revenue than the Coral Ridge Mall? All that Kohls, Wal-Mart. The northwest quadrant’s rolled into that isn’t it.

Harney: I think part of that problem was when Jeff attended for the Board he went as our representative was we had such a short notice, I think it was like 3 day notice. We didn’t have time to put together a letter and put all of our concerns in writing.

White: This is very complicated stuff too.

Thompson: I think we were thinking we were even less powerful than we are. I think we thought that there was nothing we could do.

Harney: It’s like the power stays with the taxpayers at this point. They need to speak up.

Thompson: There is a power in public comment.

White: You bet there is. Well, you know that. You listen.

Stutsman: Oh yes. I was just going to say, and I agree with Tom, I think we certainly have a responsibility to go to the Public Hearing and air our concerns, but I think we also need to start talking to the legislators. There are some real changes that need to be made in this law. If nothing else for me, it’s taxation without representation. When I think of the farmer South of Lone Tree that has absolutely no say in this and yet he is expected to pay a portion of it. That simply is not right. There needs to be a County-wide referendum when these things are being considered. I don’t think the legislature, when they first put this law into effect ever envisioned, that happens with some many laws. You have to have it put in place to understand what the consequence are going to be and I think this is one of those cases and I think we have a responsibility to inform the legislature and say look we just have to make this equitable.

Thompson: I noticed there are a number of people who’ve obviously come to speak about this issue. With the Board’s permission I think we could allow public comment now. If you choose to speak, come forward and use the microphone and give your name. I’m also going to ask you to limit the time that you speak and subsequent speakers, please try not to repeat things that have already been said.

Peter Fisher: I’m Peter Fisher. The way I see TIFs working and the way at least part of the law is at least clearly written is that public money spent within a well defined area stimulates private development that generates taxes that then pays off the bonds for those original improvements. I guess the thing I find objectionable about this TIF, there are no more public improvements needed in the Coral Ridge Mall TIF area. So in order to finance this other project 2 miles away in a completely different area. They have to go through this rather dubious device of identifying Interstate 80 as a TIF district. What that allows them to do is to pretend that it’s all one area for purposes of sharing revenue. When in fact they’re obviously 2 distinct areas. They remain distinct areas for other purposes. You start with the original year for defining the base for purposes of what’s the increment in the Coral Ridge Mall. We don’t have to start over again even though we’ve created a combined area. I asked Kelly Hayworth. This combined area doesn’t exist today. It will exist in a few months. Doesn’t that mean it’s a new area and you have to start over and the answer was no. We can pretend that it’s all one area for sharing the revenue, but we don’t have to start over though. We can pretend that it’s still 2 old areas for purposes of defining the TIF. The law also says that you have to declare any TIF area, either a slum area, a blighted area or an economic development area. If is it an economic development area you have to define what kind of economic development you think is appropriate. Obviously this new area they’ve added Interstate 80 is not a slum area or a blighted area or an economic development area. If that’s and it seems dubious at best and if it’s legal, then clearly it’s another area of the law that needs to be straightened out but that they can do that. One other thing that I thought should be clarified, when I asked Kelly Hayworth about these2 areas, would they have to be redefined as one area somehow, the advice he was getting from his bond attorneys was that no they didn’t and the Coral Ridge Mall area would remain an economic development area with the 20 year expiration date of 2017. So they can’t perpetuate the TIF revenue from Coral Ridge, but the other part of it will remain, even though it’s all one area now, will remain a blighted area with no time limit. A blighted area TIF. If they wanted to use Coral Ridge Mall area revenues after 2017 they would have to reconstitute the TIF area and start the base all over again, which isn’t going to do them much good because at that time it’s going to be pretty fully developed. I was frankly astounded that the law would allow this, both in terms of combining a TIF in this fashion and in terms of using revenues from one area that’s mostly developed to finance a separate project in another area. Clear Creek Amana is probably the biggest loser because the new area where the development is supposedly occurring is not in Clear Creek. The old area of Coral Ridge Mall is part of their school district. So they’re loosing tax base from Coral Ridge to pay for perhaps some private development around the hotel that will generate no revenue for their school district because it’s not even in their boundaries. That’s another area that I think should be fixed in the law. Thank you.

Neuzil: Thanks. I agree that trying to follow that up Interstate 80 is some pretty wicked Gerrymandering.

Carol DeProsse: I’m Carol DeProsse. Can ask Pat a question. That’s what I’m really here for. Listening to what Peter Fisher had to say; this seems to be a rather dubious TIF district. Then giving the definitions of what can constitute a TIF district. An economic development area, a urban renewal area or a slum area, does the County have any way to pursue if Coralville should go ahead and try to call that right-of-way portion along I-80 one of those 3 when it appears as it is none of those 3. A way to call that into question that might stop the TIF district, at least until further investigation.

White: I don’t think so. I think ultimately litigation is always an option, if someone, whether it’s the Board or the citizens, conclude that the law is being misapplied. I don’t see any statutory remedy other than that.

DeProsse: Well then that obviously becomes kind of difficult, but I’d say that as a County resident it appears to me that the loss of tax dollars is so significant to the County. I certainly appreciate Pat Harney’s comments on the impact on the School District, because I think we’re all more then aware of the really debilitating state that the finances for the education system is all across the State. To perhaps if worse came to worse to consider if Pat White look at the possibility of trying to act on behalf of County residents in this matter, because it seems to me that the dollar figures that we’re talking about are staggering. So, I encourage you to please go to the public hearing to see what you can do at that level and through all of the powers of political persuasion that Tom Slockett encouraged you to exercise and try to stir up the citizenry on it. Thanks.

Clara Oleson: My name is Clara Oleson. I’m on vacation and I don’t always write the newspaper. Sometime I like to talk to people face to face. I’d like to address the question of options. First of all you can do nothing. I sense that you don’t want to do that. That you want to do something. I’d like to talk about if you do nothing in another area. As of September 27th you have written a letter to the Vision Iowa Board, saying that the Johnson County Board of Supervisors are pleased to endorse the City of Coralville’s application to the Vision of Iowa for support of their CAT program. This is that application. Under the Vision Iowa regulations this letter of support is an endorsement of this application and this application was not forwarded to year in it’s entirety in a timely manner. It was not vetted through your Budget Director. It has in here all about the TIF. It basically ties this application in a phased project to the rain forest, so I think that in order to be square with the Vision Iowa Board, I would suggest that you need to write to them and indicate that you want to correct your letter of September 27. That you are or have expressed your concern, that you do not want TIFs to be supported for this project as presently outlined. If you need a copy of this, because it’s presently outlined as Peter Fisher indicated, this TIF is not going to be used to generate the creation of a property tax generating entity. It’s going to create a convention center, which is deemed in this application to loose $900,000 a year to build a hotel which will be owned by the City, so not property taxable. Then that revenue will be used to supposedly supplement the convention center and the intervening entity is kind of the equivalent of a library board. So this TIF, Peter is exactly right, it is not used like the general growth TIF, which was going to develop an income producing, a property tax producing property. To the extent that this Board has addressed the issue about your commitment to the rain forest, I think that if you look at the application, your letter of support presently endorses this application. This application is for a phased redevelopment, supposedly one phase has already occurred, and the phases include the rain forest, so you might want to clarify. If you still want to go on record with Vision Iowa as endorsing their convention center it seems to me that what you want to say is that we don’t endorse the financing because the County is going to loose money and we don’t endorse the rain forest. Even going that far, you have to remember that Iowa City is negotiating the building of a convention center as we speak by the Holiday Inn. So what you might want to do reasonably is say to the Vision Iowa Board, we’re reconsidering this. We know we don’t like the TIF section of this. We have concerns whether this is a precursor to Iowa Child’s rainforest so we would like at this point to withdraw our letter of support and we will get back to you as more information becomes available. Become it seems to me you are the County, so your looking both at Coralville and Iowa City and perhaps getting the Johnson County regional area of governments involved. My concern is that you do something with the Vision Iowa Board. OK, because I think that the way you have presently represented yourself to them is inaccurate. I’d just like to pick up on two other things. When talking to the legislature Sally, I think is a very good idea, but you should be aware that there’s been quite a bit done in the legislation on TIFs. This is heavily supported by the Iowa Association of Realtors, by developers, the legislature has gotten lots of feedback from people in your situation that are even more negatively impacted because the diversion of tax money then you folks are. That is one of the reasons that the big amendment to the statute recently was that TIFs had to have an end point. Until I think it was 5 years ago. TIFs didn’t have to have an end point. So that’s one thing that the legislature has come in and said. OK. So that when you talk to you legislatures some of them, their eyes are going to glaze over, so I think it’s something that you might want to have Pat maybe, one of his wonderfully researchers do a little research on and get some input on, so that you can hone down your 2 or 3 objections rather than just hey this is creating kind of general problems. The last thing is just clarification about the housing TIF. Carol you had some questions about this. There’s a different part of the Iowa Code that allows the equivalent of a housing TIF through the designation of an enterprise zone for affordable housing. So that not all TIFs, we’re kind of creating the impression here that… The TIF statute that you’re looking at is the only part of the Iowa Code that addresses TIFs. That’s not exactly true. We have the Iowa Industrial and New Jobs Training Act, which diverts pay roll taxes to pay off bonds to generate infrastructure improvements run through community colleges. That TIF has generated about a 40 million dollar per year transfer of tax monies to corporations and about a 7 million dollar transfer to community colleges absent the legislative process. I don’t want you to think that the statute you’re looking at, which I think is 430 is not the only kind of TIFs. I think there might be times at which I agree with you, you might want to look at a TIF and for example using a housing TIF, which is under a completely different part of the Code, might be a way to generate affordable housing. Last year the Iowa legislature passed an enterprise zone statute allowing housing TIFs, there have now be 53 projects, that TIF does have to go through the State, because again the legislature is beginning to say, tell us about TIFs. We need to go a little slower. So now with this new TIF available for housing TIFs that does require that it goes to the Iowa Department of Economic Development and 53 of those projects have been okayed. They haven’t been in large communities I’ve noticed, but they could certainly provide that information so you might want to contact some of those communities and say hey, how did you, did you folks really find this a viable tool? Because it seems to me for 53 projects to be okayed in the first 12 months of this something is going on using that TIF. That’s it. Do you need a copy of the letter that you wrote to Vision Iowa?

Lehman: It would be a good reminder I think.

Stutsman: I’d like to have a copy of that at some point.

Harney: I was going to ask Pat, how can Interstate 80 be construed as part of, its State owned, it passes through Coralville. How can that be construed as part of Coralville for this purpose?

White: It’s certainly part of Coralville. It’s an interesting question.

Oleson: It the right-of-way only that they’re TIFing and actually…

White: This is reminiscent of the Hills annexation.

Oleson: One of the things that County could do is to go in for a declaratory judgement. You never want to go into litigation, but that’s kind of the least offensive way and I think it might be appropriate here. What you’re basically saying is, the Court defines, the Statue defines a TIF either as an urban blight or as an economic development TIF. Now we need to know what that means. Can that include, for example, the right-of-way of an interstate? So what you’re doing, you basically just saying to the Court does the… Help us determine what this statute means. So that’s a possibility.

Thompson: I’m still unclear about the taxation. Is there anything in this new TIF area that’s going to pay taxes.

Oleson: The mall, Wal-Mart, Kohl’s.

Thompson: I’m sorry. In the new part. The additional part. Is Iowa Child taxpaying and the convention center doesn’t pay taxes.

Oleson: Iowa Child is a nonprofit. That’s correct. Well, we’re talking about property taxes. There are other kinds of taxes that this will generate. OK, it will generate sales tax. OK. Also if you remember, when Iowa Child was first proposed in its old location off I-65 on Oakdale Boulevard. It had as part of it a convention center and a motel complex. Now in that original proposal that motel complex, was supposed to be reasonably rated, because we were going to bring all these teachers and children in to go look at the fake rain forest and have them stay over night. That component, the meeting center, it was not called a convention center, the meeting center and the hotel has now been dropped from Iowa City and put in here as the community area tourism thing. Again you have another way of looking at it that is you have something, which is a cash cow, which is that Coral Ridge Mall. You’re really reluctant to give that up. The other thing that’s in here, which I think is very interesting I think is the Coralville debt limit. You know when this round of Iowa Child, first started, Coralville wrote a letter to the Vision Iowa Board saying that they would commit 30 million dollars to build Iowa Child. You know, Carol and I and Peter looked over that material and I thought there’s not 30 million bucks here. The State Auditor’s office under the statute we learned will do an audit, which our request is still pending, of the City to say where are you in your constitutional debt limit. Well at first they represented that they were 30-34 million dollars away from their constitutional debt limit, which is 5% of the property tax valuation. In this they represent they’re 900,000 dollars away from their tax limit. Now you can say that’s Coralville’s problem, but if Coralville has another flood or if Coralville has some kind of major fire it becomes your problem. This is a community without many of the infrastructure components, whether that’s a significant food bank or professional fire department that other areas in your County have. So, the generation… You know what this is kind of like Carol, you’ve got 3 credit cards and they’re maxed out and the economy goes down so the credit card rate goes down. So you say these are running 9 and 10% interest or I get 6 months free here, let’s put them all together. So the convention center and the hotel are the old credit card debt. Your not going to generate revenue, but because the Coral Ridge Mall, because the retail complex because it includes other things besides the Coral Ridge Mall, is generating so much money.

Thompson: So if these 2 projects were connected there would be no part in putting on the new part because it’s not going to generate income taxes.

Oleson: That correct. You got it.

Lehman: That brings up another subject. You mentioned Iowa Child. Over a year ago we heard a presentation on that, which I don’t think Terrence and Pat were members of the Board at the time, were asked to give a letter of recommendation. We declined. We didn’t. When we gave this letter of endorsement on September 11th on the community area tourism, I don’t think it was fully explained that this was going to be tied into it. I guess I’d be a little bit objectionable that now it is showing up as a letter of endorsement to the Iowa Child. The other Board members may feel different, but I object to the fact that it’s going to be associated with the Iowa Child.

Oleson: I think at that consultation meeting most recently, I think Jeff I remember was there. I won’t go into the facts, the public weren’t allowed to ask questions, we wont’ go there. But one of the things that Kelly Hayworth said and Jeff correct me if I’m wrong, was that the issue, the letter of support and endorsement in Vision Iowa program was the first thing that the Vision Iowa Board looks at. They want to look at the support of the local community is because the Vision Iowa says we don’t see you coming to us and getting our money and then using our money to go out to leverage. The Vision Iowa Board is the bank of last resort. We want to see public monies, we want to see private loans, we want to see foundation monies, we want to see contributions; then you come to us. It was real clear looking at this application that there is no such thing here. Vision Iowa has even, I mean Iowa Child hasn’t even monetarily contributed, so at the consultation meeting Kelly said we have some concerns about the level of support that the County will give to this application. I don’t know if they said Vision Iowa asked, or somebody asked, and we will be coming back to you, but we are presently using the level of your foregone revenues from the TIF as an indication to the Vision Iowa Board of your support.

Lehman: We had no choice.

Oleson: Right. I think that should… The other thing you might ask when, assuming you want to write to the Vision Iowa Board to clarify where you are… The Vision Iowa Board, at least I think 19 folk. They break up into subcommittees and they have announced that they were going to do a site visit to Coralville. So either through jawbone in Coralville or writing to Vision Iowa, I think it’s appropriate to say, we would like to speak to you folks. Because one of the things that the Vision Iowa Board will do, will do an economic analysis of this application. That has not yet been done. That is available under the examination of public records, so I think that something that you eventually, you know, want to get your hands on. The other thing is you’d just be in interest to see how tourist kinds of places are analyzed.

Thompson: Thank you. Is there anyone else who wishes to speak about this? Please say your name for the Auditor.

Dils: My name is Karen Dils. I’m here today as a Johnson County resident. One of the concerns that I would like to bring forth that nobody else has mentioned yet is that the City of Coralville has taken out… I don’t know if that’s the right word, maybe Pat can help me here. They’ve already taken out 9 million in bonds on the Hwy 6 TIF project in the last 2 or 3 months. So this means that there’s already a debt there that needs to be paid. They’re using that money to purchase property in that area to build the Iowa Child project. Every time they purchase one of those building or one of those properties, they’re taking away from the tax base to help pay back the bonds. So, I guess that they’re already assuming that this is going to happen and that they’re going to have the extra revenue from the mall to help pay for these things that they’ve already taken out. I guess, what I want to know, are we obligated to help pay for a bond that was issued prier to the merger of the 2 TIFs? I don’t know if Pat maybe can say anything about that?

White: When you say we?

Dils: I mean we as Johnson County, as Clear Creek Amana, as Iowa City School Districts. Are we obligated to help pay for a bond that has been issued prier to the merging of the 2 TIF districts?

White: Well those jurisdictions aren’t obligated to pay, I assume your talking about in terms of lost revenue.

Dils: I guess I don’t see how the City of Coralville plans on paying back 9 million dollars in revenue bonds from an area that they own and doesn’t generate any tax money, so until they have help of the Coral Ridge Mall, how are they to pay off the debt that they’ve already incurred?

Stutsman: That’s exactly why they need the Coral Ridge mall isn’t it?

Dils: But they’ve already issued those bonds.

Stutsman: I see.

Lehman: It maybe indirect, but your saying that the City of Coralville, those residents are paying for it, but you’re making up for it by the loss of income through Johnson County taxes and school taxes.

Dils: This has happened in just the last few months that they’ve issued 9 million dollars in bonds, in preparation maybe, but it hasn’t happened yet. So I guess, if they have no revenue to help pay for those bonds, how can they come back later and say well we need this mall area to help pay off those bonds.

Lehman: I know the meeting that Sally and I had with some of their officials, they had discussed possibly releasing some of the Coral Ridge TIF off a portion of that, because they needed money to operate in their general fund. The windfall would be that some of it would come back to the schools and the County, but I think it was more of a necessity for them, needed for their operations.

Dils: But each time that they purchase one of those places down there, there’s a time period where there’s no tax coming in from that property and there’s already a bond that’s been issued for it. So, that’s just something that I wanted to bring forth.

Thompson: Thank you. Bob?

Welsh: Carol, just very briefly, Bob Welsh, the Board of Supervisors, I think Mike hit on this, your letter of support to the Vision Iowa for the convention center as I gather from your discussion was an act of cooperation with the municipality in the County in saying that you would back the State in providing funds for this, for the convention center, period. If you were told that that was not related to Iowa Child…

Lehman: It was going to be a stand alone project.

Welsh: At least from my recollection, you can check your minutes, I think that’s what my understanding of what you all decided and you sure didn’t get into the discussion about the TIF or anything else at that point. It was merely the fact that you were seeking to be cooperative with one of the Cities in Johnson County.

Stutsman: Your exactly right Bob, that’s why I voted for the letter. I thought it was just for the convention center.

Lehman: There was a boilerplate letter sent out to us. I did some editing and took out some of the Vision Iowa wording because I didn’t feel that was the intent of the letter, so what we did send did not mention Vision Iowa what so ever.

Welsh: One other thing. Pat’s suggestion of meeting with Coralville seems to be a valid next step in your concern. They’re going to be reading those (inaudible). Have the chair call them and seek to set up a time and I think the other suggestion that you might want to contact the Vision Iowa fund to say, declare what we were endorsing, if there is some confusion with that point. It seems to me like these are appropriate steps at that point.

Tiffin City Clerk Margaret Reihman: My name is Margaret Reihman and I’m a Johnson County resident. I would just like to let you know that Tim Oswald and the bonding company did come out to Clear Creek Amana and did say that the odds of a convention center making money are just about minimal. There are only 2 or 3 he said in the nation that make money. So I guess I’m here to say that I don’t feel, I’m happy your investigating this, I’m glad to hear that your probably going to look further into it and see what you can do. Because I don’t personally feel that I want my tax money to underwrite something we know will be a failing venture when my school and my County need that money for other productive things.

Lehman: You said there are convention centers… Are they owned by municipalities?

Reihman: He didn’t comment on that. He had just said that in general it’s a well known fact that across the nation very few convention centers are profitable and Coralville’s aware of that and that’s why they’re looking to this means, to this money, because they know it will need money.

Lehman: I can say if its municipality owned convention center it would be off their properties rolls, but if it was privately owned they would at least pay property taxes. That’s where we generate our revenue.

Reihman: If we know it’s going to loose 900,000 dollars a year, I don’t see why the County would knowingly walk into that kind of situation. Thank you for all your work.

Thompson: Thank you. Anyone else?

Oleson: Do you want a copy of the application? The application has the figures in it of convention centers around the United States for example. It doesn’t look at the Iowa City proposed convention center, but she’s exactly right this is not a money making deal. 50% of them are built with public monies. Many times they’re associated with an arena, a much bigger income generating project.

Thompson: Mike do you know what the status of getting one of these applications? We were going to ask for one last week.

Oleson: You can call the Vision Iowa Board and get a copy. They’ll send you a copy…

Sullivan: (inaudible) request it.

Oleson: Maybe Coralville would send you a copy. They should have one on file.

Lehman: They might have an extra one laying around.

Stutsman: So what do we do now?

Thompson: Should we ask Mike to draft a letter for next week’s meeting and appoint someone to go to the hearing on the 8th.

Lehman: Possibly set up a meeting with Coralville representatives.

Oleson: Do you think that more then one of you could go.

Stutsman: Yes. I was wondering if Auditor Tom Slockett and Treasurer Tom Kriz were planning to attend too.

Sullivan: You have a meeting coming up with Coralville and Iowa City next week too.

Stutsman: That is on the agenda, is my understanding.

Neuzil: I have that put on the agenda, Yes. I did.

Lehman: Are joint cities and Iowa City schools.

Stutsman: Well, I can certainly plan to go to that public hearing on the 8th. I think, I certainly encourage other Board members to go too.

Thompson: I’ll go too.

Lehman: We can have more then 2 as long as more then 2 didn’t speak.

Thompson: It’s at 7:00?

Stutsman: I think it is at 7. Yes, 7:00 on January the 8th.

Sullivan: Your joint meeting is not until the 9th.

Thompson: But it’s on the agenda for the joint meeting.

Stutsman: I wonder if maybe the chair should present the Board’s comments. Maybe we could write a statement and then present those. Just like what we say…

Thompson: Yes, I’ll do it.

Stutsman: I too would like to follow up with doing some work with the legislators. I think you made some good comments, Clara, about other people have had some concerns too. Will you ask Pat’s office to do some research? We are schedule to meet with, to go with ISAC’s County-a-Day February 27th. I think that would be an appropriate time to bring that up.

Lehman: Where’s that meeting on the 8th at? Coralville City hall?

Stutsman: Yes.

Thompson: We’ll have a letter on for discussion next week. Any further discussion?

(Continued in Part 3)