Newspaper Article Archive of
The Kalona News
Kalona, Iowa

Newspaper Article Archive of
The Kalona News

September 17, 2018 Letter: Riverside development puts taxpayers at risk
Article Pages -- as published on the The Kalona News website.

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The Riverside City Council plans to approve paying out substantial city tax revenues to support the proposed Northern Development of single-family lots. There is no doubt a majority of the council is going to approve this agreement at the Sept. 17 meeting.

The council believes that we are paying for the street, sewer, water and stormwater costs for this new area with tax increment financing revenues, but they can’t even find out from the developer how much we are going to be charged for getting the site work done.

If houses don’t sell as expected, then we face a situation where increased tax revenues don’t come in to cover the cost of the initial phase – if we could find out what that cost was going to be.

Since the beginning of the year two other developers have requested tax increment financing agreements to help fund their projects based on increased property values. Their requests spelled out how much was requested and how many years it would be paid out.

There was no guesswork on the final benefit to the city, and there were safeguards in the agreements to nullify city payout if the projects weren’t completed as planned. We have also entered into agreements with the county (Riverside-Washington road bridge) and with the state (paving Highway 22) where the agreement with amounts and conditions were spelled out in advance and where contracts were put out for bid.

The developer and his agent for the housing project north of town have never given us good figures for what site work will cost, engineering costs or any process for negotiating disagreements the city might have with what they are being billed for.

The city doesn’t own the land, so it has no collateral to bargain with; however, if we object to any of this, they can take us to court and force us to pay their attorney fees and court costs as well as a judgment if they win. The only real figure we have is for the upgrade to Tupelo Avenue, which is more than $450,000, and the council has agreed to do that at taxpayer expense anyway.

This agreement has no limits. The city’s bonding attorney in Des Moines has advised against this co-development. It bypasses the bidding process and accepts whatever bill the developer hands us.

What incentive is there to keep the costs down if the city is footing the total bill? None. In view of the many change orders we had on the downtown project, who thinks we can stay within budget, even if we can find out how much that might be?

The council voted last Monday to fill a council vacancy with a former council member who has publicly said that if we approve this deal, the city “will have to give him the same deal” if he decides to develop his property.

It is a conflict of interest to vote on a measure that you may profit from in the future. What we see is a council majority that hasn’t insisted on hard data and answers, a council who only wants unanimous agreement on all issues, and a council who isn’t willing to investigate other options for achieving this goal that won’t put our tax dollars at risk.

Residential development that increases the property tax base for the city and brings new families to town and the school district is a good thing. We all agree on that – unless maybe you live in the older part of town that has so long been neglected.

The nature of this agreement is not a good thing – it lopsidedly favors the developer and gives the taxpayers of this city an open-ended bill. If you want the city council to formulate a balanced plan of new development and continued improvements to older neighborhoods, you need to make your views known to the council before the next meeting on Sept. 17.

Christine Kirkwood


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