Supervisors question incentive for Heartland
The Jefferson County Board of Supervisors took no action Monday on an agenda item to hire financial consultant Jeff Heil of Northland Securities Inc. to work with the county on the proposed Heartland Co-op grain storage and rail shipment operation facility.
Supervisor chairman Dick Reed said he was concerned about the railroad underpass on Nutmeg Avenue that narrows to one lane as traffic goes under the railroad bridge.
Nutmeg Avenue is one of the main roads for grain trucks to access the proposed grain elevator storage facility planned for the corner of Highway 34 and Nutmeg Avenue. The county has discussed improving and upgrading Nutmeg Avenue as part of the plan for Heartland Co-op to build a facility.
“Until we hear back from the railroad what it intends to do or not do, I don’t want to move forward on this project, except to hire Jeff Heil,” said Reed. “We have a one-lane road there at the underpass and we’ve talked about adding stop lights to keep traffic safe. If the railroad comes back to us with no help … I’ll step back and look at this again.”
Supervisor Lee Dimmitt said help from Burlington Northern Santa Fe Railroad was not going to happen.
“Heartland Co-op people talked with them and Tracy [Vance, former Fairfield Economic Development Association executive director] talked with the railroad,” said Dimmitt. “There’s no point in moving forward to hire Jeff and spend more money because the railroad is not going to do anything.
“I agree with you 100 percent about the one lane underpass” said Dimmitt.
Reed said he’d driven Nutmeg Avenue Friday and noticed standing water on the road under the bridge.
“I’m all for making the underpass safer whether Heartland Co-op comes in or not,” said Scott Cline, county engineer.
Reed said county roads see a lot of driving and more revenue is needed to maintain roads.
“We need money for upgrading, but even if not upgrading, we need money for road maintenance,” said Reed. “Why are we giving Heartland a tax break?
“How do we grow without adding businesses to the county? I’m starting to have concerns about additional heavy truck traffic,” said Reed. “We don’t have to give Heartland a tax break.”
Dimmitt said it’s not a tax rebate, but since December, when Heartland Co-op principles first sat down at a regular supervisors public meeting and proposed building a 4.4 million bushel of storage capacity in Jefferson County, the deal has always been termed as handing excess revenue back to Heartland for the first 10 years.
“I don’t see any money in this for [upgrading] Osage Avenue,” said Dimmitt. “We have to have the numbers to make this work. I’m not going to throw the county under the bus.”
Reed said any new business venture would ask for incentives, but it doesn’t mean they get them.
Adam Plagge, FEDA executive director, brought an 18-month timeline and financial reports that compare using general obligation bonds or Tax Increment Financing bonds for the county to have revenue to upgrade Nutmeg Avenue in time for Heartland Co-op’s projected operational opening at 2015 harvest season.
Plagge’s timeline showed March and April as being the time to establish the urban renewal district — FEDA, French-Reneker Associates Inc. and Marsha Cory, a partner in the municipal consulting firm of Simmering - Cory Inc. and Iowa Codification Inc. are working on the urban renewal district.
Monday’s meeting also had the agenda item to hire Heil, who has worked with Jefferson County in other financial matters.
“The highest cost in hiring Jeff would be $5,000,” said Plagge. “It could be less.
“By the end of May, an agreement should be developed saying what Heartland Co-op will build and what the county will provide,” said Plagge. “By July, the county should have decided whether to use general obligation bonds or TIF bonds.”
The supervisors should set a public hearing near the end of May, and in June will need to meet with all the tax levying stakeholders affected by a TIF district for Heartland Co-op, such as the Fairfield Community School District, Jefferson County Health Center and the township.
Plagge’s financial worksheets estimated $2.8 million would be needed to pave Nutmeg Avenue, from Salina Road to old Highway 34, with 8-inch concrete, 22-feet wide, with a modified sub-base for good water drainage and some ditch improvements.
An estimated cost to pave/upgrade a portion of Osage Avenue south of Highway 34 is $435,000.
The idea is to use property tax from the new co-op buildings to pay for the road improvements and Heartland would receive any annual excess revenue above paying the bonds for road upgrades for 10 years. The original bond would be for 15 years.
“General obligation bonds are quicker to mature than TIF bonds,” said Plagge.
General obligation bonds are projected to generate $6,000 excess revenue per year, which would be enough to upgrade Osage Avenue. TIF bonds would generate about $2,000 in excess revenue, which restricts paying for upgrades to Osage Avenue.
Audience member Marcia Hansen asked about the repaving of 185th Street, and Cline said it will be repaved this summer whether Heartland Co-op builds or not.
Chris Estle asked if the shoulders on 185th Street would be improved, or the road widened because the street has a lot of traffic and bicycles and pedestrians.
“It will be no wider than it is,” said Cline.
Audience member Jack Ritz complimented Sheriff Gregg Morton, who was attending the meeting, on handling last week’s pandit campus turmoil.