Making cents of city spending

The Osceola City Council is no stranger to spending. During the city council meeting 7 p.m. Tuesday, Dec. 20, members approved a few weighty investments in local business and the community. Understanding these types of expenditures is the key to citizens knowing when their money is well-spent.

Investing in industry

Tuesday night, the City Council voted unanimously to approve two resolutions creating tax increment financing arrangements, one with Boyt Harnessing and the other with RTC Ventures, LLC.

“It does not increase property taxes,” said Ty Wheeler, city administrator/clerk.

The TIF involving Boyt Harness will allow the city to use up to $200,000 of collected property taxes to share in the costs of building a new facility on company property.

“The figure for Boyt is what the city will pay in total over the course of the agreement period, but nothing more,” said Wheeler. “I expect the additional tax revenues from the project will actually be higher.”

The council voted unanimously to support the creation of another TIF as well, this time to benefit a new development in Osceola, RTC Ventures. The company plans to refit a former winery into a whiskey distillery. The agreement is a bit different, according to Wheeler, because the tax rate for the property will be changing. Up to $150,000 has been earmarked for the project.

“The agreement will rebate back the difference between Ag taxes and commercial taxes for seven years, then graduate the taxes up to the full amount,” he said. “I anticipate the full incentive will only total about $90,000.”

Reaping the benefits

Boyt Harness is a mainstay in the community that has been generating profits here for as long as many residents can remember.

“The city is very excited and proud to see Boyt continue to be successful,” said Wheeler. “Boyt’s project added jobs to the community, as well as tax base.”

While RTC Ventures does not bring with it the same type of assurances, the benefits it offers are also unique.

“We hope will anchor additional development in that area,” said Wheeler. “We also hope it brings more visitors to the community.”

According to the The Iowa Alcoholic Beverages Division, alcohol sales have been on the rise for the last several years. Additionally, craft distillery tours across the U.S. are experiencing a burst of interest. The Iowa Distilling Company in Cumming is a perfect example. According to Cumming Mayor Tom Becker, it’s bringing a number of people to town.

“It’s a positive thing for the city,” Becker said.

It’s likely good for sales tax revenues as well.

Cleaning up the community

A different type of expenditure approved by the council raised a few eyebrows after Tuesday night’s meeting. Members of the Osceola City Council voted unanimously to purchase a dilapidated property, located at 301 S. Kossuth St., for $10,000.

“It’s a dangerous property,” said Wheeler.

During a fire earlier in the year, first responders encountered unusual hazards. The kitchen was a complete loss, but there were structural problems down to the foundation.

“The $10,000 house purchase was a property that we had given until 1/1/17 to remedy several structural issues,” said Wheeler. “The owner called and asked if we’d be interested in buying it, the $10,000 figure was based on the lot value.”

The city intends to demolish the home. While there are several options available, no plans have been made for the lot’s future development.