Recently, the A-D-M School Board put their signatures to a letter to the Adel City Council, expressing concern about the rate of growth and the tax abatement’s impact on the school district. On Monday, the two elected government bodies got together for a joint meeting at the Adel Public Library to discuss the current tax abatement program.
It was clear by the end of the joint discussion, that the Mayor and the City Council agree that a change needs to be made to the current tax abatement program, which currently is seven years, no property taxes for seven years, through the year 2025. The ideas ranged from cutting it off immediately at the start of next year, to other plans with shorter time periods and graduated payment scales.
School Board President, Tim Canney, said that it was a welcomed opportunity to be able to meet with the City Council in an open meeting, saying that they don’t have expertise in the area of tax abatement like the City Council does and often times, the school board has to react to things that happen in the local and state government.
“This is kind of one of those times,” Canney said. “We represent three different towns. DeSoto is also talking about this, so we’d have to deal with that as it comes and depending on what they decide.”
Canney said that they are looking for a win-win situation and a partnership with the city because the tax abatement and the growth has been mostly good for the school so far.
“I’ve been on the board for a long time and there were some years where we didn’t have money and we didn’t have any growth for year after year after year, no growth,” Canney said. “And that’s hard to put a budget together with no growth, so the growth up to this point has really been good for us.”
A-D-M Superintendent Greg Dufoe went on to summarize the letter that was sent to the City Council which stressed that they are not anti-growth, but did not give any specific suggestions or direction on what they think the City should do regarding the tax abatement or the proposed 1,000-acre annexation.
Dufoe said that due to the growth, they have had to close open enrollment for all grade levels for next year. According to recent enrollment projections that were done for the district, they would have a total enrollment of about 2,385 by the 2021-22 school year and 2,873 by the 2026-27 school year.
Councilman Bob Ockerman asked Dufoe what would be done if students came in midyear, because he had heard a rumor that the School District wouldn’t be able to take them. Dufoe was quick to dispute that rumor.
“If you’re a resident student, we educate you,” Dufoe said. “There’s no telling a student or parent that they can’t bring their kids to our school.”
If growth is to keep up the way it has been and the way it has been projected, they would need to build a new building, with a best-case scenario being to begin construction in 2020-21 to occupy in 2022-23. Due to the lack of general obligation bonding capacity, they would need to use a large portion of their SAVE revenue, an estimated $2.4 million.
Their current bonding capacity for the spring of 2018 is $7.4 million, which Dufoe said is about enough to build half a school. Without the abatement, their capacity would about $9.5 million and their tax levy rate would be about 66 cents per $1,000 of valuation lower for the next school year.
Dufoe addressed the idea of using the “old middle school” which currently serves as the District Administration Center, to hold students. He said it is not an option since the building is not currently set up to hold students.
“It’s serving a great purpose for us, but it’s not adequate to put kids in,” Dufoe said.
Dufoe said it would have cost millions of dollars to renovate the building to include things like a kitchen and cafeteria and music and band spaces. He said that the district does still own the Minburn building and it would be a part of master planning, but it is pretty small and they would be lucky to be able to fit one grade level in the building.
After hearing the presentation from Dufoe and the School Board, Adel Mayor Jim Peters said that the Council is looking at making amendments to the current tax abatement plan to slow the growth down for the City and the School District.
“That’s why we’re here is because we want to talk about making adjustments to it so we don’t grow as fast,” Peters said. “That’s what the school’s looking for and I think that’s what the City would like to see.”
One thing that Peters mentioned before allowing the council members to present their ideas for change, was that if they reach a population of 5,000 or more, they get to participate in the Central Iowa Regional Transportation Planning Alliance (CIRTPA) and receive funds, something they don’t get now.
The City Councilors included their recommendations in the packet for Monday’s meeting.
“As you’re going to go around the table and find out, all five of use are in agreement that we need to change abatement, slow it down, do whatever is necessary, but we all have five different ideas,” said Councilwoman Rebecca Hillmer.
Jon McAvoy had three options, with the first being to maintain the current plan to 2025, but modify it to a 7-year plan on a sliding scale with the first two years at 100 percent and the next five at a sliding scale, effective Jan. 2018, or option two was to modify it to a 5-year program, all at 100 percent, effective Jan. 2019. His third option was to do a 5-year program at a sliding scale, effective Jan. 1, 2020.
Ockerman has made his desire to end the tax abatement, effective Jan. 1, 2018, very clear, but he mentioned that he would be willing to modify the program to a 5-year sliding scale, but cut it off on Jan. 1 of 2020.
“Abatement is put together to spur development. It isn’t to continue development,” Ockerman said.
Hillmer suggested that they could end the current program Jan. 1, 2020, saying that she thinks they are at a point where they will see growth, even without an abatement.
Councilman Mike Haynes, much like Ockerman, prefers to end the program completely, but is willing to modify the program to seven years, with the first year being 100 percent, followed by a decrease of approximately 16.7 percent each year, starting Jan. 1, 2018. He also said that any development that is not shovel ready at that time should not receive the abatement.
Councilwoman Shirley McAdon suggested that they could modify it to a 5-year or 7-year plan with a sliding scale.
Before concluding, Peters mentioned that there is still time this year to agree on a plan, have three readings and put it into law before 2018.