Infrastructure projects, budget management policies raise tension at Marquette meeting
By Audrey Posten | Times-Register
Tension rose at Marquette’s Sept. 10 city council meeting, as officials debated how to proceed with two infrastructure projects. After months of frustration, the public works director and a committee chair also cited a lack of trust from city staff in allowing them to manage their budgets.
In a surprising turn of events, mayor Brittany Hemmer announced the city is considering “pushing the pause button” on a more than $1 million plan to construct infrastructure for the new Twin Bluffs Subdivision. The city planned to equip the site it owns off Pleasant Drive, next to the city shop/Mar-Mac police station, with infrastructure to entice a developer to build senior housing. Extensive engineering, as well as a plat and plans, have already been developed.
Now, said Hemmer, the city has learned it cannot use TIF to pay for the infrastructure because there would be “no increase in valuation on the property when the infrastructure is put in.”
City manager Mildred Stewart further explained that, since the subdivision is city property, it’s not on the tax rolls.
“With no house, there’s nothing to increase the taxes on, the valuation,” she added. “If you want to continue, we’ll have to go out and borrow and levy a debt service, which will then go on property taxes for everybody in town.”
Council member Tracy Melver asked why the city did not realize this before getting so far into the process.
“And after we’ve put so much money and time into it already,” noted council member Chawna Loper.
Hemmer told the council she was angry too.
“I feel like we weren’t made aware of the situation,” she said.
The council still hopes it can find a way forward, however.
Dave Schneider said, once complete, a development would grow the tax base and fill a need for senior housing.
The council tabled the topic for a special meeting later this month, at which time members will also discuss how to finance replacement of a water reservoir—a topic that’s already been addressed at multiple meetings with little headway.
Public works director Jason Sullivan informed the council in April that, while still safe, the reservoir is nearing the end of its 40-year life expectancy. He put replacement at $250,000 for the new tank and installation as well as deconstruction of the old.
He and some council members advocated using city funds on hand to pay for the project, but Stewart said funds haven’t been banked and are allocated toward specific uses. Marquette’s water and sewer funds are operating at a deficit and couldn’t cover the work either.
Instead, she proposed Marquette utilize the State Revolving Loan Fund or a Community Development Block Grant to finance the project. An item on the agenda called for approving a financial services agreement for a municipal advisor, who would explain the best options to the city.
Stewart said an advisor would cost $5,000—$4,000 of which could be reimbursed through a grant.
“The financial advisor would address the deficit balances as well as construction of a new water tank/reservoir. We do not have internal funding to do that. It needs to be paid for out of water and sewer, and water and sewer are at large deficits right now,” she said.
As of Aug. 31, the water fund was negative $91,156 and the sewer fund negative $272,563, she added.
According to Schneider, this has been an ongoing issue for Marquette.
“The city was using money from casino revenue to keep water and sewer low and that stream has gotten smaller and smaller every year. The last rate increase was three or four years ago, and we started coming back into the black. But the reason we get into the hole, especially on the sewer system, is if you have a repair that comes up. We were never preparing for the future,” he stated. “Nobody wants to pay more, period, but we’re going to have to raise our rates to get up to where it’s covering expenses.”
The council was still unsure whether a financial advisor was the route to go. Sullivan presented a study from 2017, conducted at no cost by Iowa Rural Water, that suggested rate increases.
“Why spend $5,000 when we can get pretty much the same study done for nothing?” Melver asked, although Stewart warned the studies differ.
“And we don’t need an advisor to know [the rates] need to be addressed. We know they need to go up,” added Loper.
Sullivan was still hung up on the need for outside funding at all.
“I’ve been here 30 years and we’ve always done big projects and pretty much always taken them out of the general fund. The city’s always been audited every year and we’ve never gotten in trouble for spending our money,” he said.
“But it’s noted on the audit every year that those deficit funds are supposed to be getting addressed,” Stewart replied.
Sullivan also warned that outside financing could balloon the project from an estimated $250,000 to $500,000 or more due to engineering. He believes the project does not require re-engineering, and the company that would replace the reservoir has its own engineers, if needed.
“I’ve done this before with water softeners. If you’re replacing something that’s been there before, been engineered already, you don’t have to go through it again,” he said. “Other than that, it’s filling out the permit.”
The council’s financial interest was further piqued by the announcement that the city recently cashed a $500,000 CD to cover the cost of road projects on Thornton Lane and Brown Street.
Melver wondered why the power was there to use funds for that work, but not the water reservoir.
“When we’re cashing a $500,000 CD, I feel the council should be aware of it before it happens,” he said.
Stewart said the CD was mature and that it was previously agreed not to reinvest it because the city needed cash for liquidity. She further added the check depository resolution answers who has authority to make those decisions.
Loper mentioned a double standard, though, referring to a later agenda item where resident Don Smalley was seeking council approval to order benches to place along the new shared use recreational trail.
“We approved for him to buy benches, and then he still has to come back to the council to get them approved again, which doesn’t make sense to me,” Loper said.
Smalley voiced his concern too.
“One thing that’s killing this project is the hoops that have to be jumped through to get anything done. If purchases can’t be made until the council approves them, that means there are 12 times a year. This money was budgeted and approved, and I would like to see a change in policy or procedure where a person who is leading a project and has a budget that was approved by the council can go ahead and make purchases within that budget so the project can proceed on a reasonable schedule,” he said. “If we order those benches tonight and they come in five weeks from now, that’s one week after the next council meeting, and then I’ll need to buy concrete. Then I missed the October meeting and I’ll have to wait until November. This is killing projects like this.”
Smalley cited similar issues as chair of the tree board.
Stewart said it’s policy to go through the council. Employees of the city with authority for purchasing can do so, but not private residents.
“Part of that process means, when you’re booking a hotel room, you get the governmental rate and not just the residential rate. When you’re purchasing something, you’re making sure there’s not sales tax charged on it. That someone doesn’t use the city credit card to purchase female clothing.”
But even Sullivan said he was having difficulty. He also took credit for the female clothing purchase, stating, in his pursuit to get a sweat band to keep sweat out of his eyes while working, he accidentally purchased a woman’s version, but returned it when he realized the mistake.
“I’m going to need [my purchasing authority] increased. $500 or $1,500 a month is not enough to get anything done. You have to be able to trust me how to do things smartly,” he said.
Smalley agreed. “Jason has worked for 30 years. I’ve run the tree program for 33 years. It’s time to return trust to the people who are putting the effort into making this city better,” he stressed.
