The Clinton Herald, Clinton, Iowa

April 22, 2013

Railport agreement, staff cuts on agendas

By Katie Dahlstrom Herald Staff Writer
The Clinton Herald

---- — CLINTON — More details of the property sale at the Lincolnway Railport and the effects of the Clinton City Council’s decision not to enact a 9.5 percent sewer rate increase will emerge during the council’s meetings Tuesday night.

The council will hold a public hearing concerning the sale of nearly 25 acres of land to German rail tie manufacturer RAIL.ONE. The sale agreement stipulates the purchase price will be $42,000 an acre, which will be put into an escrow account with Frey, Haufe & Current, PLC. The city will then be paid once certain events in development take place.

The sale agreement also details the economic development incentives the city will offer RAIL.ONE. The city plans to establish a new urban renewal area for the property and provide a rebate of 100 percent of the incremental taxes. The agreement the council will consider Tuesday calls for the maximum amount of the rebate not to exceed $6 million over the course of a 10-year period.

Council members will also consider a resolution approving the early issuance of a building permit to RAIL.ONE.

The agreement between the city and the Clinton Humane Society for animal impoundment services is also on the council agenda for consideration.

Immediately following the council meeting, the Committee of the Whole will convene to discuss a number of items, including those related to the rejected sewer rate increase.

The first will be the 25th Avenue North pump station project, which was supposed to be paid for using a $6.5 million state revolving fund loan. In a memo to council members, Interim City Administrator Jessica Kinser explained that without the 9.5 percent sewer rate increase, the city will not be able to pursue this loan and therefore, the project.

Because this project is part of the city’s long-term control plan and the consent decree between the city and the Attorney General’s Office states this project is to begin by June 1, the city could face fines ranging from $300,000 to $1 million for delaying this project. The city would also face up to $150,000 in costs for terminating the agreement with the contractor.

In order to make the sewer fund more stable, Kinser will also propose cutting five positions and reducing other expenditures that will have a $679,000 impact. These cuts are needed to close a $760,000 operational expenditures gap the city faces without the rate increase.

Even with the operational cuts, Kinser wrote, the city would still need to implement the 9.5 percent rate increase in order to pursue the SRF loan and the 25th Avenue North pump station project.

The City Council meeting will begin at 7 p.m. Tuesday at Clinton City Hall.