The City of Adel has been facing backlash from residents regarding its current tax abatement program, which abates 100 percent of property taxes on new homes in the city for seven years. They have recently been considering scaling it back.
Mark Arentsen, retired city administrator from the City of Bondurant was on hand at the meeting and gave a presentation with some ideas for the council, based on what they have done over the years in Bondurant with their tax abatement, which has gone through many changes since the program first came about in the 1990s.
He said that one change they made at one point was to increase the building fees.
“We didn’t really get much push back from the developers when we increased the fees,” Arentsen said.
When Bondurant’s abatement program first began, Arentsen said that they had two options, either three years at 100 percent, or five years on a sliding scale. After several years of the program, Arentsen suggested that they reduce the program and that it didn’t have a negative impact on the growth.
“No studies were done to document my opinion, but in each case residential activity actually increased after the abatement schedule was reduced,” Arentsen said. “I believe that these new construction increases were the result of a number of positive factors that were making Bondurant a more attractive community and those changes made abatement less important.
“If you make your town into some place people want to be, abatement isn’t as important in my opinion.”
He said each time there was a change, the first of which came in 2008, there was about 6-months notice sent out to developers.
He said that they developed a committee, made up of developers, community members, school district officials and more to help decide on changes. He said that in 2015 they decided not to end the abatement, but to scale it back once again.
“We decided that an abrupt end to the abatement could bring a reduction to new residential construction, which would not be in the city or the school district’s interest,” Arentsen said, citing the future growth projections by the city and the school district that helped them with valuation and population projections.
He said that the last time they reduced the abatement, they reduced it from five years to three years and have planned to end it entirely by 2021, giving everyone plenty of notice.
He said that, in his “admittedly uninformed” opinion, he believes Adel could scale back their program and still see positive growth.