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City claims the county has shorted its tax takeCounty says there may be confusion over TIF district


The City of Storm Lake alleges that Buena Vista County miscalculated valuations and revenues generated by the city’s tax increment financing districts, leaving the city with tens of millions in unpaid liabilities that could fall on city taxpayers over the next decade.

City Finance Manager Brian Oakleaf said he discovered a number of “weird” inaccuracies when he tried to estimate the city’s TIF revenues. He found a $1.16 million revenue shortfall at King’s Pointe over the last 15 years; curiously slow valuation growth in the Storm Lake industrial park; and a rash of other issues that can’t be explained by alternatives Oakleaf could contemplate.

He left the city council meeting with a stark analysis. The city owes $33.7 million in tax increment financing debt and it only generates around $830,000 in annual revenues to pay that balance off. Some of that debt will fall on taxpayers because some of the city’s tax increment financing bonds must expire. Some of it will continue being paid by TIF districts because the districts are considered blighted areas under state code. 

The balance essentially amounts to a massive debt city taxpayers must shoulder, Oakleaf reasoned.  

“What is the issue? What is happening? We’re not sure,” Oakleaf told the Storm Lake City Council on Monday. He placed blame squarely on Buena Vista County for the inaccurate estimates to which the city has allegedly suffered tens of millions in damages. “We’re working with the county. But it’s hard to determine what’s happening.”

Auditor Sue Lloyd declined comment on the city’s allegations. She said her office — which handles tax increment financing revenue divisions — would research the issue now that the elections are over. Karla Ahrendsen, a deputy in Lloyd’s office, noted some of the findings the city found could’ve stemmed from a fire that destroyed what’s now the Tyson turkey plant on Vilas Road.

Oakleaf said Ahrendsen’s argument was irrelevant to the matter.

He claimed the issue existed as far back as he could research it and persisted outside of the taxing years that could’ve been affected by the fire.

He found King’s Pointe suffered a TIF shortfall of $78,500 in 2008. It sustained consecutive losses over 15 years, Oakleaf’s analysis shows.

The industrial park area only grew by $7,000, or a tenth of one percent, since 2013. The areas in Storm Lake that aren’t bound by TIF grew by over 20% since that time, according to City Manager Keri Navratil.

Oakleaf determined TIF revenues aren’t sufficient to meet bond payments for four areas: LMI #4, the industrial park, LMI #3 and the third addition. The shortfall was calculated by actual revenues the city received compared to estimates provided years ago by the city’s bonding consultant, now Piper Sandler of Des Moines. It was curious to Oakleaf that TIF revenues generated by the four areas are significantly lower than what the bonding consultant originally estimated. If the bonding consultant would’ve estimated the revenues at levels the city has since collected, not what the bonding consultant originally estimated, the city would’ve had more problems borrowing money to improve those areas, Oakleaf claimed.

“The bonding consultant lent us the money for improvements to those areas,” Oakleaf said after the meeting. “One could argue the city wasn’t smart enough to estimate these revenues when we borrowed against the future value of all these parcels. But we had our bonding consultant do it. That’s how we got the money. We used their estimates.”

The LMI areas have a combined $480,000 in debt; they generate $40,000 per year, much lower than what the city originally anticipated. 

The third addition isn’t generating any TIF revenue for the city; the $500,000 debt on the property is beginning to come due. 

Revenues in the industrial park have decreased 12% since 2016. 

“This is untenable,” Oakleaf told the council. 

City Councilman Matt Ricklefs wondered why it took the city 15 years to figure out that it was being consistently shortchanged in TIF revenue. 

Oakleaf replied he always had suspicions. He claimed to have dispatched city staffers to the county years ago to ask why King’s Pointe’s overall TIF revenues were much lower than what the city’s bonding consultant originally estimated. But the county rebuffed the city’s queries at that time, Oakleaf noted. 

His office launched a full investigation earlier this year into the shortfalls when Tyson’s $8 million feedmill property was supposed to hit the tax rolls. The county sent the city and the company tax receipts that were required under the terms of the development agreement. 

“And it jumped off the page,” Oakleaf said when he looked at the receipt. “There was no money going to TIF. We put $2 million into the roads. And no money was coming to pay that back. That was the first red flag.”

Oakleaf deferred further explanation of the revenue shortfall to the county auditor, which divides TIF revenues between taxing entities. Only the auditor and the parcel owners in TIF districts have access to exact TIF revenue divisions via their tax bills. A comprehensive list of TIF revenue divisions for all parcels in the city isn’t available. 

“We basically don’t have an idea of how we get (TIF) revenue. We don’t get to go back and see how the sausage is made,” he continued. “The only reason we were able to put together (King’s Pointe’s losses) is because we have those receipts. And it lists where all the money is going. If we had a list of all 200 parcels of where this money is going, we would be able to figure out what the difference is. But we don’t have access to that. And the county only keeps those records for five years.”

Councilwoman Maggie Martinez then asked how patient the city needs to be with the county. 

Oakleaf said the city is working with the county. After the meeting, he expressed frustration at the auditor’s dismissiveness. 

The shortfalls pose a financial crisis to the city over the next four to 10 years. He claimed the miscalculations will prevent a renovation of King’s Pointe, a redevelopment of the dredge spoil site and future housing development. All of those items were expected to be paid by future TIF debt. 

He noted the county has already established its first ever TIF district surrounding Platinum Crush’s soybean crush plant campus; revenues from that area were supposed to pay off $13 million in new roads around the plant. Oakleaf contended the county’s track record handling the city’s TIF districts should raise concern with the board of supervisors, who are relying on the revenue TIF revenue to come in 2025. 

“This is a massive problem that isn’t going away,” Oakleaf said. “This isn’t because of the Hillshire fire. This is an issue we need to sit down and fix because there are tens of millions of dollars at stake.”

City Manager Keri Navratil said the council is weighing its options on how to correct the TIF miscalculations. 

The top priority is a meeting next year with Auditor Sue Lloyd, the Iowa Department of Management and Oakleaf. A spokesperson for the Department of Management couldn’t be reached for comment on Tuesday. 

She declined to rule out the possibility of a lawsuit given the scope of the city’s losses. But she wondered about the effectiveness of seeking a money judgment against the county even if the city’s claims have merit. 

A judgment against the county would result in higher taxes in Buena Vista County; the majority of county taxpayers are Storm Lake taxpayers. 

“We don’t know where all the money went, but we have reason to believe it was distributed among taxing entities financed by Storm Lake taxpayers,” Oakleaf said. “If we wanted to sort out who got all the money over the years, we might find they were all paid by Storm Lake taxpayers.”

Navratil said the city would entertain other methods of dispute resolution if a meeting with the county and department of management doesn’t produce fruit. State Rep. Megan Jones, R-Sioux Rapids, told The Storm Lake Times Pilot said the issue might require legislative intervention given the scope of the alleged miscalculations.  


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