Iowa mayors

May 3, 2019  | 27 min  | Ep 4634 | Podcast

Podcast

The 2019 Iowa legislative session is over. How will the latest round of policy issues impact communities across the state? We sit down with a trio of Iowa Mayors on this edition of Iowa Press.

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Funding for Iowa Press was provided by Friends, the Iowa Public Television Foundation. The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure. I'm a dad. I am a mom. I'm a kid. I'm a kid at heart. I'm a banker. I'm an Iowa banker. No matter who you are, there is an Iowa banker who is ready to help you get where you want to go. Iowa bankers, allowing you to discover the genuine difference of Iowa banks.    

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For decades Iowa Press has brought you politicians and newsmakers from across Iowa and beyond. Now celebrating more than 40 years of broadcast excellence on statewide Iowa Public Television, this is the Friday, May 3 edition of Iowa Press. Here is Kay Henderson.

Henderson: Property taxes, traffic cameras, housing needs, those were just some of the issues debated during the 2019 Iowa legislative session, issues that intersect with the work of Iowa Mayors. We have three mayors with us today to talk about those issues and others. Joining us are Mayor Matt Walsh of Council Bluffs, Brett Barker of Nevada and Terry Donahue of North Liberty. Joining us also, Caroline Cummings from the Sinclair Broadcast Group and James Q. Lynch of the Cedar Rapids Gazette.

Lynch: Good morning. Let's start with one of the marquee issues from the legislative session, property taxes. Mayor Walsh, in the end rather than cap property tax growth, lawmakers chose to require more transparency on the part of cities and counties. How is this going to impact Council Bluffs, your budgeting process there?

Walsh: Well, I think from one instance Council Bluffs is unique in property taxes. We compete directly with the community across the river from us as does Sioux City. Other communities in Iowa on the eastern side compete with Illinois who has a high tax policy and Minnesota that also taxes fairly aggressively. On the southern tier there really isn't much competition. And so property taxes through the years have really been a distinct disadvantage to the city of Council Bluffs. If you're a commercial property owner, until the 10% rollback you paid 200% of what they do in Omaha for an identical building. And so no doubt there is need for property tax reform, I don't think that the legislature accomplished what they wanted to accomplish, I don't think it added any transparency. I think the issue people had was about increased valuations and I think that is just a natural product of the market. I think after 2008 home values were depressed and I think they have rebounded and so as a percentage people's valuation has gone up.

Lynch: Mayor Donahue, the new law requires an extra public notice and an extra public hearing and if you're raising revenues by 2% or more you have to have a super majority of your city council approve that. Is that going to be a problem for North Liberty?

Donahue: I don't see that as a problem at all. As a city ourselves, I'm sure that the other gentlemen too, when we go through our budget process we have three or four public meetings where people can come in, see what the preliminary budget may be, if they wish to make a comment they're certainly welcome to do so. We have a public hearing that is mandated as far as when we do the final adoption. I don't see that as much problem at all. It's just adding maybe an extra step and we may have to just list the meeting as a little different.

Lynch: Will the super majority be a problem, getting that extra vote?

Donahue: I really don't think that will be a problem because I believe in the history of the state as far as super majority for bonding issues and like matters, if it is then it just means we have to go back and talk a little more.

Lynch: Okay. And Mayor Barker, the goal of this was more transparency so people understand what is going on. Do you think as a result of this more people will follow the budget process in Nevada, turn out at your public hearing? Or are they just going to ignore it and complain after the fact?

Barker: Possibly. Like other cities, excuse me, we do the same process. We have the public hearings. We have budget workshops that are open to the public where the council can really dive into the details of the budget and ask those good questions. So I think people do pay attention but I think hopefully it will help them understand the system more. I think that is one thing that I notice is I don't think a lot of people understand there's two factors, there's the assessment and there's the rate, and those are two separate things. And they do play together to get that final number. So I think having people understand how the property taxes come about, and also you hear people say my taxes went up $12,000. Well, their assessment went up $12,000, the taxes obviously didn't go up quite that much. And then also to look at a cumulative level I think that will help too because one house might go up, another will go down. And hopefully as communities see a rise they'll adjust that levy rate and that is I think what ultimately the legislature is getting at is don't ride on the rising assessments, bring that levy rate down as you can.

Lynch: Mayor Walsh, I want to come back to you. You said you don't think the legislature accomplished what they wanted to. So do you expect them to come back next year and tinker with this some more?

Walsh: Well, and I think that's the problem is they're tinkering with it. It's a broken law that has been broken since 1978 when they coupled together residential and agricultural values and in my opinion, throughout that timeframe, they tinker with it and try to make it workable and at this point it's like a piece of machinery, you can only repair it so many times and it no longer works. We would encourage them to study property tax and they're so hesitant to do something that may raise taxes to one group of people while adjusting taxes for other groups of people. Again, in Council Bluffs, 200% higher than Omaha. In a healthy community you'd expect about 50% of your property tax base to be residential, 50% to be commercial. Because of the high commercial tax rate we're about 37% in Council Bluffs. So I told you it's double the tax that it is in Omaha, you would expect at a 50/50 scenario that residential would be half the tax. It's not, it's just incrementally smaller and that is because residential property owners had had to bring up the 13% that we lost because we don't have a competitive commercial property tax rate.

Cummings: Mayor Barker, you testified against an earlier version of this bill in a subcommittee hearing. Is this version, the final version, better?

Barker: I do think so. I think one thing that was neat for me through the whole thing was just the process and I do think it worked. I think we saw some proposals came out that were very unworkable for cities. I think, I also think my colleague next to me went to the same hearing, we testified, they heard us, our council passed a resolution. I think that was something we saw across the state, there were multiple cities and counties doing that. And I think they took feedback. Our state senator was really, really good about it, asking questions, saying I don't quite understand this, can you explain it to me, I've also talked o these other mayors and supervisors, I want to understand it better and was actually texting me while the Senate was debating and voting on it. And so I think the fact that the legislators listened, they made changes, I think that was positive. I think a lot of the unintended consequences we were worried about I think were mitigated significantly in the final version of the bill.

Cummings: And Mayor Walsh, property taxes get a bad rap, is there any better way to pay for city services?

Walsh: Well, I think people would be surprised to know that less than a quarter of a percent of our total revenue comes from property taxes. There are a variety of other taxes, gaming taxes in Council Bluffs, hotel/motel tax, franchise fees, that go to operate a city. It just seems that the legislature wants to keep pushing down on the revenues for cities and that is where the growth is in Iowa and I think that if they continue to do that they'll kill the golden goose.

Cummings: Lawmakers in 2013 cut commercial property taxes by 10% and provided money to the cities to make up the difference. Mayor Donahue, if that goes away what happens?

Donahue: If it goes away then we will probably lose a department of some type. It's hard to make up that much of a difference. After one year, you have it one year and it's gone. So the thing is it has some unknown consequences, but there will be consequences.

Lynch: Mayor Walsh, I think the last time you were on Iowa Press we talked about traffic cameras. So let's talk about it again. This year, for about the past decade lawmakers have been talking about either banning traffic cameras or regulating them. You've talked about how you use them in Council Bluffs. Have they made the city safer? Or does it just help the bottom line?

Walsh: Well, we have used them and we've used them for over a decade now and we certainly feel that it has made the streets safer and the evidence of that is we've gone from about a million two in fines down to about six hundred and some thousand.

Lynch: So it's not good for the bottom line?

Walsh: Well, it doesn't hurt the bottom line. I won't say it's about the bottom line. That is their argument that it was a money grab and it was not about safety. And the irony of this legislative session is that their compromise was to say it's not about money but we'll take 60% of it and we'd be happy with that. So if you look at it, you'll have people argue that the number of accidents maybe have not declined in proportion with the fines. And some of that, frankly, is people stopping too quickly concerned about the light changing. But those accidents are less lethal than a T-bone accident and so we think they save lives. We're confident they save lives. And I'd tell you the residents of Council Bluffs support them. It's the people that come to town occasionally that haven't gotten used to them that argue about them. And I think that's true in the legislature. I think legislators who aren't from an urban area.

Lynch: Exactly, that was the argument that people from rural areas come to Cedar Rapids, come to Council Bluffs, Des Moines, wherever and they pay these fines but they get no benefit from them in terms of the revenue. By sharing that with the state that would go in a public safety fund. Does that make sense from a city standpoint?

Walsh: Well, I don't believe that it does because they then would distribute them out to the entire state and I don't know that the revenues would be substantial enough to help anybody. Again, in Council Bluffs it's a little over $600,000, so allocate that amongst 99 counties I don't think it makes a significant impact.

Lynch: Mayor Barker, does Nevada have cameras?

Barker: We do not.

Lynch: You do not. So do you care about this issue?

Barker: It really doesn't affect our community. So I follow it just from an interest perspective but don't feel strongly either way.

Lynch: Mayor Donahue or Mayor Barker, are you considering putting up cameras to generate revenue or improve safety? Is this something that has been talked about in North Liberty?

Donahue: We really haven't talked about it at all. I agree with Matt, the thing is this revenue sharing that they have talked about how fair really is that? The thing is, I think towns like Council Bluffs can prove that there's safety benefits that are involved. Yes, if the number of cash coming in declines well we're probably saving a life on the road.

Lynch: Do folks in North Liberty complain about the cameras that were in Cedar Rapids? Did you hear that complaint?

Donahue: None whatsoever.

Cummings: Let's shift the conversation to housing. Mayor Donahue, you're at the helm of one of the fastest growing cities in Iowa with North Liberty. How do you keep up with housing needs?

Donahue: Housing needs are basically in our community developer driven. And the thing is, I know our planning and zoning commission as well as the council take great stock to see that they're trying to establish a balance between single family residential, multi-family and trying to keep different developments balanced and offering opportunity for all income groups to participate in the ability to have a house.

Cummings: And Mayor Barker, Empower Rural Iowa was an initiative that provided housing tax credits targeting smaller communities this year. How do you plan to leverage that for Nevada?

Barker: I think housing is obviously something we're working really hard on. We had a community summit a couple of years ago and that was the number one issue that came out of it. Our economic development commission is really focused on housing. Obviously the city has been a partner in that as well. So a lot of what we're working on is helping to provide residents with the knowledge of some of those assistance programs out there to make sure that they're aware of what they can take advantage of and also to make sure that there's places to put homes and working with developers as far as that goes. So we've had some developments going on, we've also had some challenges too. And one of them has been we've had local developers that purchased property to put in homes and so there has been a development with 66 homes that has been on hold for two years because of the rural water association outside of our borders. So for us, we've run into hurdles with that rural water association and have been working with our United States Senators and USDA and things like that, which hopefully we'll get some resolution to.

Lynch: Mayor Walsh, one of the things we heard before the legislative session from cities large and small was the need for workforce housing. And I heard from a number of chamber sorts of groups that said we could fill more jobs if we had housing for people. Is that the situation in Council Bluffs?

Walsh: It certainly is the situation. As you drive around our communities and look at the, in some cases, deplorable state of streets, the cost of infrastructure has outgrown the ability of the general public to pay for it and that bleeds into the residential housing market. If you want workforce housing, which sounds a little ironic, but it's housing in the neighborhood of $175,000 to $250,000, the installation of the infrastructure to do a residential subdivision is too expensive to get a reasonably priced lot. The new lots for sale in Council Bluffs are about $75,000 a lot. So if you're looking at a $250,000 house you can't build much house after you pay for the lot. Now, the workforce development grants helped offset some of those costs. Obviously you need the income to take advantage of the credit. But those credits have been spoken for until 2023. And some of the new legislation for rural areas took $10 million away from that. We need housing in rural areas. I'm not discouraging that effort. But we need more money targeted towards housing so that we can grow the population so that we can have employees for workers.

Henderson: Mayor Walsh, you mentioned infrastructure, I want to return to that in a moment. But in North Liberty, you have a mobile home park that became an issue that legislators brought up where rent will be going up for folks who live there. The legislature in the end did not pass legislation to regulate in a new way mobile home parks. Is the city in any way trying to get involved in that situation?

Donahue: We've looked at it and have talked to one of the representatives from the association that bought it. The thing is that you take into consideration what the legislature was trying to do, basically all that came down to is we have to extend the 60 day notice to 180 day notice of rent change. That really doesn't do anything, it just defers the problem. The thing is, is that what we have found is that the company has lived within the law, they have stayed within the boundaries of that, they're going to, this mobile home or manufactured park situation is a matter across the nation that they are buying these up because it is becoming a cash cow.

Henderson: James also covered an issue whereby the legislature decided to address rent.

Lynch: Yeah, there was an issue that had to do with capping rental property, probably more of an issue in North Liberty I'm guessing since you're close to the university, maybe in Nevada too, on rental property where it prohibits cities from capping single family and duplexes. You're shaking your head, Mayor Donahue, you're familiar with this. Another win for cities?

Donahue: It depends on who you talk to. I know that in Iowa City I follow their situation just as much because what they do affects us. The thing is, what they were trying to do was cap a percentage of rental versus homeowner because in the neighborhoods that they were trying to control most of those homes are older homes, instead of having one or two cars at a particular home if you change it to a multi-family residential or a rental unit, you could have five, six, seven, eight cars in an old neighborhood where streets are narrower. The infrastructure was not as good and you always take a deep breath that something doesn't happen. And it has been very difficult for Iowa City to cope with. In fact, they have just recently passed a moratorium in as far as not establishing any rental permits until the law is signed, I think it was 447, House File 447, and it was signed yesterday. And so now they'll have to go back and say what are we going to do now?

Henderson: The American Society of Civil Engineers Iowa Section this week issued a C grade for the state's infrastructure in general and they raised some concerns about levees and dams in particular. As someone who lives along the Missouri River, Mayor Walsh, are you concerned about the finances you may have to maintain that system?

Walsh: Well, we are fortunate in that we applied for the state flood mitigation program, which any incremental increase in state sales tax, the 5% that the state gets, the city would get 60% of that and it has been working fairly well for us. We are protected by a 28-mile levee that needs to be recertified by the Corps of Engineers before FEMA remaps our area. And if we don't get the recertification it could throw about 55% of the city into a flood zone. And because FEMA has had so many disasters nationwide they used to highly subsidize flood insurance, they no longer do that, if you're a new applicant you pay the full actuarial cost of flood insurance, if you're a longtime purchaser you pay a graduated increase. In many cases in that area that would go into the flood plain your flood insurance premium would exceed your mortgage payment, virtually rendering all those homes valueless. Why would you buy a house on one end of town where you'd have double the payment when you could buy one on a higher elevation that you wouldn't have to purchase flood insurance. So it's very important to us and we are with the flood mitigation program we estimated about 57 million in our application, the cost of construction has gone up since we have been approved. It's going to be somewhere between 60 and 70 million by the time it's done we believe. But it's essential and it's important to our citizens.

Henderson: Mayor Barker, Nevada sits just north of Highway 30 and fairly close to the intersection of Highway 30 and Interstate 35. This report that civil engineers issued raised some concerns about the road and bridge infrastructure. As a city, how do you deal with that in the context of getting a portion of state gas tax money?

Barker: Sure. And that's something that obviously we rely on, we're right on Highway 30 like you mentioned. We know we need a new interchange. The community has been working on that since the 1990s and we're still not there yet. But we'll get there. But yeah, we definitely rely on the state gas tax money and the region transportation dollars for those large type of projects like that. So definitely is important to us. A big part of the draw for the city of Nevada is the fact that we have Highway 30 and 35 interchange and then we also have north-south and east-west railroads. So infrastructure is critical to our continued growth.

Lynch: One of the common themes of this conversation today has been local control and perhaps from your vantage point the loss of local control. And in recent years we've seen the legislature legalize fireworks, ban plastic bags, ban local governments from setting their own minimum wage, the traffic camera legislation we talked about, all over the opposition of cities, or for the most part over the opposition of cities. Is there an imbalance, and let's start with you Mayor Barker, is there an imbalance between, is state government becoming sort of a heavy-handed big brother?

Barker: There have been some concerns and I think whether it's property taxes, rental caps, traffic cameras, minimum wages, all the things you mentioned, a lot of them don't affect us in the city of Nevada, but we do watch them because we do feel strongly on local control. I think that's one of the great things about Iowa is we have 50 years of local control in the constitution. So I think it's important to maintain that. And there are times that yeah, the state's position on those things I might agree with, but I don't necessarily agree with overriding the local citizens who should retain control over how their communities operate.

Lynch: And Mayor Donahue, when you talk to legislators and say you're limiting or restricting what we can do and what we can decide are they receptive?

Donahue: I have to admit that our local legislators have been quite good about things. They take the time to listen to us and other people and then make the decision from there. I am disappointed in the overall result because whether who's in control, democrats or republicans, the thing is, is that it's the people's choice. The legislature can get, well like I said, maybe a little heavy-handed. And I agree with my associate here is that many of these issues should be local control, remain local control. The issue of wages, well why did that come up as hard as it did? Well, the state hasn't risen the minimum wage for years, well neither has the federal government, and because of the living costs in our area someone felt something needed to be done, Johnson County moved toward it, and though some of us didn't like it, it was probably an appropriate step to take.

Lynch: Mayor Walsh, real quickly, is this sort of a symptom of the rural-urban divide in the legislature that they don’t understand what you need?

Walsh: I think there is certainly a component of that. In many cases a rural legislator will encompass a small portion of an urban area but the majority of their district is rural and so I think that is a factor. I think the heavy hand of state government maybe has gotten a little heavier because the republican House, Senate and Governor's Office, and so some of the checks and balances that used to be in place aren't in place anymore. I think there's been some aggressive efforts to try and redesign government. But I'd tell you that those legislators are in Des Moines, they are not as visible to our local people. I shop at the grocery store, I eat at the restaurant, I take the phone calls. I'm elected by the people of my community to do a job and when somebody who doesn't have that perspective starts to tell me how to do the job and I don't know that they've got the expertise that I do, it bothers me greatly. The state of Iowa has a constitutional amendment for home rule that has been just disregarded by the Iowa legislature over the last two years.

Henderson: Mayor Walsh, my job here is to keep track of the time and we are out of it. Thank you, Mayors, for joining us today. Thanks for watching. For everyone here at Iowa Public Television, thanks for joining us.

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Funding for Iowa Press was provided by Friends, the Iowa Public Television Foundation. The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure. I'm a dad. I am a mom. I'm a kid. I'm a kid at heart. I'm a banker. I'm an Iowa banker. No matter who you are, there is an Iowa banker who is ready to help you get where you want to go. Iowa bankers, allowing you to discover the genuine difference of Iowa banks.    

 

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