Nelson wants proposed arena issue to end up on ballot

Third Ward Councilman Don Nelson has written a letter to the citizens of Mason City concerning a proposed multi-purpose arena project that the city is currently looking at pursuing. It outlines cost considerations to taxpayers. Above: A potential site for a multi-purpose arena in Mason City, in a parking lot area south west of Southbridge Mall.|The following letter is from Third Ward City Council Member Don Nelson to Mason City Citizens. Nelson sent the letter to NorthIowaToday.com and he says it has been proof-read twice by City Administrator Brent Trout for accuracy:

I have been asked on numerous occasions this question:
Will Mason City citizens have the opportunity to vote on the proposed Multi-Purpose Center, if/when it continues to move forward for the City Council vote?

The main issue is how it could be financed, here is the answer:

TIF revenue bonds payable with TIF revenues are not subject to a reverse referendum (petition), just a public hearing however, they require proof of the TIF revenue stream and you cannot borrow against 100% of the anticipated revenue, they carry a higher interest rate and require a reverse fund so therefore they increase the borrowing amount needed.

GO bonds for urban renewal purpose are subject to a reverse referendum. If a petition is received the City must call for an election or abandon the issue. A 60% majority is required for approval. If no petition is received then the City can proceed forward without a vote. GO bonds are secured by a debt levy, but that levy could be abated with TIF revenue assuming sufficient TIF is available. Both types of bonds count against the City debt limit.

Ken Kline, Cerro Gordo County Auditor, provided me with the number as to how many voted in the last election. There is a deadline on that petition being filed as well. The petition would need to be filed no later than the day before the City holds the public hearing on the bonds for this project. This means the petition would have to be filed in the City Clerk’s office (Diana Black) no later than 4:30 p.m. the Monday before the City Council meeting that has the public hearing set.

Citizens will need 544 signatures on a petition: This number represents 10% of the voters who voted in the last City election. The petition would need to be signed by citizens registered to vote or eligible to vote who reside in Mason City, to call for a vote of the public if GO Bonds are used to finance the building of the proposed Multi-Purpose Center.

TIF Funds (Tax Increment Financing) is a companion program to Urban Renewal. TIF captures part or all of the new taxes generated by a project or other new valuation created in the district, and returns them to the City to be used for eligible activities within the Urban Renewal area. In many cases these activities relate to infrastructure needs in support of the project in the Urban Renewal area. In some cases, benefits are extended directly to a business in the form of a grant or loan.

TIF is taxpayer’s money.

In a memo received from Brent Trout, City Administrator, on June 8, 2011, he states and I quote: “The impact of the use of all available TIF would be a severe reduction in the amount of money available to the General Fund of the City and the County; it would likely require City budget cuts.” End of quote.

If significant TIF funds are used it could have an effect or an increase in taxes, and a decrease in City services.

TIF revenue bonds and GO Bonds, both types of bonds, count against your debt limit.