BY CHUCK VANDENBERG
FORT MADISON – A subdivision being constructed north of Bluff Road will get a new water booster station from the city pending a development agreement with the developer.
At Tuesday’s regular meeting of the Fort Madison City Council, the council approved a recommendation from City Manager David Varley to spend $300,000 to build the booster station that is needed to provide adequate water pressure to the Woodlands Heights subdivision.
Varley said typically this cost is born out by the developer, in this case Mike Mohrfeld. However, Mohrfeld is looking for city to pay for the station as part of an incentive package, according to Varley’s recommendation.
Typical developments of this type have a tax increment financing component included in the development agreements with the governmental bodies, in this case the city of Fort Madison. Chapter 403 of the Iowa code gives cities and counties the authority to create TIF districts.
In a nutshell, TIF is a method of reallocating property tax revenues which are produced as a result of an increase in taxable valuation above a base valuation figure within in the TIF district, which would be the subdivision.
Until the tax increment debt within an area has been repaid, tax revenues produced off the increased valuation of the development are allocated back to the city or county which has established the TIF district.
The city hasn’t created a TIF district for the subdivision yet, but according to Varley that may become part of a development agreement with Mohrfeld and the city may be able to recoup the cost of the booster station through those means.
Mark Lair asked if the booster would be large enough to handle further development in the area and Public Works Director Larry Driscoll said it would be.
“In a project like this, generally the contractor is responsible for the infrastructure in the subdivision, which in this case would include the booster station,” Varley said.
“We’re working on a development agreement for this subdivision which we will bring back to the city council. In that agreement, we hope to have a TIF set up to help pay for the infrastructure and provide some incentives like we did in the previous subdivision. We’re hoping in that agreement to have TIF set up so hopefully we can recoup 100% of the cost.”
Varley said a normal upgrade of this type that benefits the whole city would come from the water fund, but when the city does something as an incentive, this may allow them to to get reimbursed from the TIF revenue that would come back to the city.
“$300K should not come out of water fund, it’s really being done to help the developer with subdivision so that will be worked into the TIF that we will bring back to you for your approval,” he said.
In other action,
•the city heard from Nancy Snaadt of Alliant Energy about grants the energy company has paid to city organizations, consumer rebate programs and a 10% rate increase that is being proposed on city utility rates. Alliant is currently in an interim rate increase mode until the Iowa Utility Board rules on Alliant’s rate increase.
• the council approved a bid from Your Heat & Air Guy to put a new HVAC unit on the library.
• the council heard from Driscoll that the 15th Street project up is coming along well and next week if all goes well the contractor could be laying concrete.
• the council approved the sale of 1301 Avenue I to James R. Andrews after a public hearing was held on the matter.
• approved a construction contract and bond execution to begin work on the Blackhawk Heights Sanitary Sewer to Meyers Driveway and Septic Service in the amount of $2.44 million.