State auditor: Chickasaw County should not have given Nashua $50,000 for dam

Report says city didn’t own dam when the county made ARPA funds available

By Bob Fenske, editor@nhtrib.com

Chickasaw County “improperly awarded” $50,000 of its American Rescue Plan Act (ARPA) funds to the city of Nashua, State Auditor Rob Sand said in a report that was released Monday afternoon.

What happens next, though, remains up in the air when it comes to the money the Board of Supervisors gave Nashua to help with engineering costs on the dam that is located in the city.

Sand, in the cover letter to the report of a reaudit completed by Chief Deputy James S. Cunningham, wrote that “because the city did not own the dam at the time the funds were awarded, the County improperly awarded the ARPA funds to the City.”

But Sand also pointed out that “City and County officials believed the City owned the dam at the time the funds were awarded.”

Nashua City Clerk John Ott said on Tuesday, “Our city attorney is meeting with the Chickasaw County attorney to see how we proceed.”

Ott said that the ownership of the dam was a technicality and that the city now has legal proof that it owns the dam that created Cedar Lake.

The state auditor’s report agreed, stating that a quit claim deed that was prepared by the MidAmerican Energy Corp. and grants ownership of the dam to the city was filed with the Chickasaw County Recorder’s Office on Dec. 3, 2024.

The issue, according to the report, is that the Chickasaw County Board of Supervisors approved Nashua’s request for $50,000 to help with engineering costs for the dam during a meeting on July 31, 2023 – 16 months before the controversy over who owned the dam was finally cleared up with the filing of the quit claim deed.

The question of dam ownership had festered since 1988 when the State Auditor’s report said that city “was to acquire the dam as a gift” from the Iowa Public Services Co. (IPSC), a forerunner to MidAmerican Energy.

But the report noted that in an April 1991 filing of a quit claim deed, “ISPC did not quit claim deed the hydro-electric plant or the dam to the City of Nashua.”

The report noted that despite not having ownership of the dam, “the City continued to repair and maintain it” and “believed it owned the dam during this period.”

The report, though, found no fault with the city for making repairs to the dam because it had “entered into a lease agreement which stated ‘during the lease term the City would repair, maintain and keep the Hydro Plant and Dam structure in good repair and keep the dam and floodgates in good repair and operation condition,’ (thus) the City would be responsible for the repairs and maintenance.”

When it came to the ARPA funds, the State Auditor’s recommendation was that county officials “should work with legal counsel to determine the propriety of the $50,000” awarded to Nashua.