County board, UFCW working through new lease

LEE COUNTY – Supervisors and UFCW Local 617 are getting closer to working out a deal on the office space the county leases to the union in Fort Madison.
At a workshop Monday morning in Fort Madison, supervisors again talked with county building committee members about recommendations for property in downtown Fort Madison that houses the Newberry Center and the union upstairs.
County officials had originally heard a recommendation to sell the building as part of the county’s effort to divest itself of property and the accompanying utility, maintenance, and insurance costs.
However, following a town hall in July hosted by Supervisor Tom Schulz, the county decided to rethink selling the building to help keep the senior center operational. Lee County Auditor Denise Fraise reached out to Milestones Area Agency on Aging, to see if they would be interested in assuming ownership of the building, but no response has been received as of Monday, according to building committee chairman Nancy Booten.
“We didn’t suggest that you close that building, but we don’t think the county should be in the rental business,” Booten said.
Lee County’s regular audit noted that the county must pay property tax on property they own and collect lease or rent payments on, which adds about $2,600 per year to costs of ownership, according to rough estimates tossed around at the meeting.
The county would recover about 30% of that, but the other 70% would go to taxing governmental agencies currently in the county’s levy structure. If no one paid rent there would be no property tax requirement. Lee County Attorney Ross Braden added another determination Monday saying it was his opinion that the county had to generate a profit on the property otherwise they could be seen as subsidizing a private entity, in this case the food worker’s union.
Penny Logsdon, a representative for the union pushed back on the rental increase, but asked supervisors for specific figures on what an increase in rental would look like. She said union people also do all the cleaning of the upstairs. Booten said the county’s cleaning company is cleaning once a week upstairs.
The group currently pays $400 per month. Schulz said he figures the upstairs space costs the county about $300 a month in electric and gas, $78 for water, and $55 for trash for a total of $433.
“What if we look at those direct costs and add 10% profit so now we’re profitable on that, and they're responsible for all their own interior maintenance and the tax bill, so it’s a net-net lease,” Schulz said.
With the 10% profit, the rent would be $477 a month, or a $77 increase in rent, but the tenant would have to pay the property tax semi-annually and would be required to take care of any needed maintenance. Those utility figures are estimates because there is not separate metering in the building.
Logsdon said the union has been doing the maintenance anyway at their cost. However, Schulz pointed to some recent HVAC work and plumbing repairs that the county absorbed. Logsdon said she contacted the county about the issues and were told county maintenance staff would handle the work.
Supervisor Matt Pflug said the county needs to remain sensitive to the needs of county seniors, specifically about programming at the senior center and Keokuk’s Heritage Center.
Board Chairman Garry Seyb said because the county is renting the space and they are now required to pay a property tax and generate a profit on the building, a new lease contract needs to be drawn up and presented to the union and board for approval.
Logsdon asked the board for a specific list of costs the county incurs having a tenant upstairs in the building.
She said she appreciated the county’s continuing discussions with the union and negotiating keeping the agreement in place.
The current contract with the union ends at the end of the month.