City Council votes to purchase 808 N. Main property

By Kelly Terpstra, kterpstra@charlescitypress.com

The property at 808 N. Main St. in Charles City that used to house Cal’s Auto Repair is one step closer to being sold to the city.

The City Council voted to exercise an option to purchase the property for $170,000 at Monday’s regular meeting.

The option to purchase runs out this Saturday and still needs to be signed off on by city leaders. The council in November passed a resolution to approve a $2,000 option to purchase the property, which includes two buildings.

The title holder of the property is listed as Calvin Shultz in city documents.

Initially the city was considering purchasing the property for the data center and head-end equipment for the $15 million broadband fiber-to-the-home project.

That all changed after the Charles City Telecommunications Utility Board bought the property across the street – what used to be The City Tap – for $190,000 last month.

The Charles City Telecommunications Utility Board voted to purchase the 813 N. Main property, rather than the City Council. The city will still hold the deed to the property.

“The broadband utility is actually purchasing the City Tap property across the street. The city is purchasing this property (808 N. Main),” said Mayor Dean Andrews.

The 813 N. Main location would house Charles City Telecommunications Utility employees and equipment associated with the nerve center of the broadband utility.

City Administrator Steve Diers said telecom vehicles could also be parked at the 808 N. Main location. If the telecom would use any of the premises at 808 N. Main it would be on a rental basis.

The city also may want to reroute Main Street if a business buys the Simply Essentials property. The chicken plant, which was located at 901 N. Main, ceased operation last August.

“At one time we considered rerouting Main Street because Simply Essentials was potentially going to expand that area. They’re kind of landlocked in all other directions. So with that facility now being vacant, the assumption is if someone else would come in there they may want to expand also,” said Andrews. “There’s a variety of reasons why the city is kind of considering to follow through with this option.”

The purchase of that property at 813 N. Main St. can be closed on or before April 1 after the council voted on Monday to approve a $1 million loan agreement from the city to the telecom board.

“It’s stop-gap financing until they get their bond proceeds,” said council member DeLaine Freeseman.

The interest rate on the loan is 3% and matures on September 1, 2020. A closing date on the loan has been set for today.

“The intent is that the city would be paid after they go out and obtain financing for the broadband project,” said City Attorney Brad Sloter.

There has been $490,000 expended by the city in researching the concept of creating a municipal telecom and fiber-to-the-home network. That research has included a pre-feasibility study, business plan and engineering layout.

The Legislature last year enacted new requirements on the process to approve city and county budgets that now requires two public hearings before the budget is approved.

That first hearing was held on Monday concerning the max levy rate and approved. The levies included in the max levy are the $8.10 general levy, transit, liability/property/self insurance, emergency management, emergency levy, police/fire retirement, FICA/IPERS and other employee benefits levies.

The total increase in tax collected under the max levy fund accounts is less than 1 percent from the current fiscal year to the next fiscal year beginning July 1.

The maximum tax rate is $14.04 per $1,000 of assessed taxable valuation. That rate is 2.6 cents lower than the current year because of an increase in total property valuation in the city, according to Diers.

The council also approved setting a public hearing date of Monday, March 2, for the fiscal year 2021 budget.

The proposed total city levy rate will go up from $15.90 to $16.02 per $1,000 of taxable valuation. That includes the max levy rate plus the aviation levy, library levy and debt service levy.

Reasons for the tax increase were primarily driven by funding the transit service, liability/property insurance, police/fire retirement and debt service cost.

“I think we’ve been able to accomplish quite a bit with the 12 cent increase on the levy,” said Andrews.

There was a decrease in the required funding for employee benefits – health and life insurance – that helped offset increases.

“I think everybody tries to be very mindful of all the taxpayers – we’re all taxpayers sitting up here, too – to try and keep that as reasonable as we can,” said Freeseman.