In 2010, legislation was passed saying that a co-generation plant would be locally assessed. Moreland conducted that assesment, determining the facility’s value at $78 million.
In 2011, ADM lobbied for new legislation that would relieve the company of its property tax obligation. They were successful and that ruling applied retroactively to the previous year.
On Sept. 30, 2011, a partial property tax settlement was reached, lowering the stipulated value of the co-generation facility from $77 million to about $32 million.
When contacted by the Herald, Moreland pointed to the law change for the lowered assessment and declined to comment when asked what his office’s responsibility was in the tax revenue being lost to the city.
To make up for some of the lost funds, the city must now examine where to find extra funds and where to cut. The city and the Iowa Office of Management are looking into raising the debt service levy to offset the deficit for next fiscal year, which begins in less than two months.
The city has a $295,066 set aside from fiscal year 2012 for the purpose of offsetting potential losses from a settlement with ADM. A $245,617 contingency in fiscal year 2014 also is available to offset the shortfall.
At-large Councilwoman Jennifer Graf asked Kinser if the city should anticipate more lost tax revenue and future short-notice budget revisions over appealed assessments.
“This is not how things should work,” Kinser said. “It’s frustrating. We have to certify things to the state on March 15 and if we don’t know this information prior to even setting a public hearing, we’re just out of luck.”
Kinser explained the process of setting the budget based on tax revenue relies heavily on the city assessor communicating with the county auditor, who then relays the information to the city.
“It’s a process where we’re stuck. We can’t change our process. I think the only thing we could do is ask that the assessor keep in mind what all of our taxing entities’ processes are and try to be more mindful of the impact that something like this has on us,” Kinser said.