City Notes: City projects continue to move forward

B y Steven Diers, Charles City Administrator

Here are the latest updates on some ongoing city projects:

Fiber to Home Project/Local high-speed internet – We are nearing the completion of the business plan from our project consultant on the fiber to the home project. Based on that document we’ll be able to give it to our financing placement people to see where financing could be placed to fund the project.

We are anticipating about a $12 million cost to get this up and running, which would create a city utility/telecom that would offer high speed internet, phone and cable television options.

Your choice if you want all, some or none, but the plan is to make connection available to everyone in town within 18 months of the project starting.

Financing this project would be done with revenue bonds, where the revenue from sales of service is what will fund the cost of offering the service. We do not anticipate using the taxing authority of the city to support back-up of the revenue bonds.

Initial reports from two different underwriting financial firms indicate that there is a market out there for this type of investment, so we will see.

The reason this project is coming about is that there is a need for fast, reliable and affordable internet service, with great customer service in Charles City.

To keep the community viable, you need things such as quality broadband. This is the next “highway” or “railroad” into town and there is more and more bandwidth demand all the time.

When you hear what rural communities need across the state you consistently hear three things: broadband, housing and child care.

500 N. Grand/Apartment project – Over the last few months we’ve been working with developer Shawn Foutch to consider a request for tax abatement along with allowance to address parking needs at the 500 N. Grand location, aka the old middle school.

Mr. Foutch is planning a redevelopment of the 1930’s portion to turn that into up to 40 market-rate apartments. Foutch has done these projects before, recently completing a school remodel project about twice this size in Fort Dodge and a multiple school building remodel in Algona.

At the recent City Council workshop on July 22, Mr. Foutch met with the City Council and worked through the aspects of the development agreement. The biggest part of this agreement that the council and staff have had to wrap our arms around is the request for 100% tax abatement over 10 years.

No doubt this is a big ask, but this is also a big project that is rather unique and helps address our housing shortage needs. Various entities have researched reuse of this structure, including the city, and the costs to redevelop that space is just too cost-prohibitive.

So, to have a developer who is willing to take that redevelopment risk and find a new and needed purpose for the building is a big plus.

100% over 10 years is also a bit of a misnomer. By state law you can only abate the newly generated tax revenues from a development. Even though this has been a publicly owned building that paid zero property tax, it still has value.

That value equates to just over $5,000 a year in taxes that will be paid by Foutch now that he owns the building. Once the redevelopment project is completed it is estimated that it will generate an additional $59,000 a year in property taxes. That is the portion that will be abated for 10 years, in essence a 91% abatement.

In researching this project and speaking to the communities of Fort Dodge and Algona, both were very pleased with their respective projects and in working with Shawn Foutch.

In the case of Algona, the city ended up agreeing to a 100% abatement over 15 years. Fort Dodge ultimately agreed to 100% abatement over 10 years, and then additionally rebated the base tax amount to make it a true 100% tax relief project.

I’m glad we are coming to an agreement that will benefit the community and reuse the 1930’s portion of the iconic structure while keeping it historically correct and allow public use of the auditorium.

Final details include working out performance provisions for project start and completion timelines.

Water Resource Recovery Facility (W.R.R.F)/ Sewer Plant – We are currently out for bid on the new WRRF plant project. Sealed bids are due Aug. 8 and will be reviewed by City Council at our Aug. 14 council workshop, and then considered for approval at the Aug. 19 regular council meeting.

Estimated cost of this project is to be around $18 million. It will replace a plant that is more than 52 years old and that no longer meets the Iowa DNR standards for wastewater treatment and has limited ability to handle heavy water flows or treatment of various loadings.

The new plant will be an oxidation ditch-style treatment and will include construction of an equalization basin that will handle heavy storm events where in the past we’ve had plant failure (2016).

The design will also include the use of reed beds which will dewater the end sludge product into a dry compost material every few years, which will save us from having to process and haul liquid sludge on a bi-annual basis.

Assuming we have a workable bid on the project, the notice to proceed would be given this September and work could start as early as this fall. Substantial completion of the project would be due Spring 2021 where the new plant would come on line.
Demolition of outdated structures and full completion will be completed by November 2021.

Charles City Facebook Page – Search for Charlescity50616 to find the city Facebook Page. We regularly update here for various happenings and city news.

If you have any questions, comments or concerns please let us know at City Hall. My email is steven.diers@cityofcharlescity.org, or you can give me a call at: 641-257-6300. Have a great day!