T-R PHOTO BY ROBERT MAHARRY Marshalltown Area Chamber of Commerce President/CEO John Hall addressed the city council regarding the funding agreements for his organization and the Marshalltown Central Business District during Monday night’s meeting.

During back-to-back items on Monday night’s agenda, the Marshalltown city council considered a change in the funding source for the Marshalltown Central Business District and discussed extending the contract between the city and the Marshalltown Area Chamber of Commerce, which is currently set to expire in after fiscal year 2024.

According to City Finance Director Diana Steiner, who addressed the MCBD matter first, the city currently has an agreement with the MCBD to maintain a Main Street program, including business development and retention, in the downtown area. For fiscal years 2021 through 2023, tax-increment financing (TIF) was used to pay $32,000, $35,000 and then $40,000, respectively, but for FY24, the funding source was switched to Local Option Sales Tax (LOST) due to uncertainty with regard to the TIF certification deadline and the contribution was upped to $95,000.

Now that the TIF certification time is once again approaching, Steiner said she wanted to bring the issue forward to see if the council would like to move the funding back to that source. City Administrator Joe Gaa recommended moving the funding back to TIF, citing “legislative challenges” in regard to municipal finance.

“Staff would want to get this back into the TIF funding. It really is where it belongs, and then the amount doesn’t necessarily have to be settled tonight but it will be fairly quickly,” he said. “It is my recommendation to get that back into the TIF funding source.”

During the public comment period, Mark Eaton described the MCBD’s efforts as “duplicative” of the Chamber, especially now that the two organizations are sharing the same office space at 34 W. Main St. and the MCBD is paying rent to the Chamber.

“TIF is getting modified, as the city administrator mentioned, and no longer will any of the TIF programs be able to reach into the school district’s money, so how are we splitting this TIF with the county? At what percentages? That comes directly out of our general fund, and we have a hole in our general fund of $132,000,” Eaton said. “I don’t think we need to fund this group anymore. I think the Chamber is capable of doing the work that the Central Business District is currently doing.”

Councilor Gabe Isom, who was attending the meeting by teleconference, responded to Eaton’s comment and opined that the MCBD’s focus is strictly on the downtown while the Chamber covers a broader swath of Marshalltown and the surrounding communities and rural areas.

“(They’re) obviously different in their purpose and the goals they set out to do, so I disagree with everything that Mark stated and if the motion that Jeff (Schneider) stated earlier is still in place, I would second that motion,” Isom said.

MCBD Board President Cindy Parks also stepped forward and echoed Isom’s statement that the two organizations are separate entities with separate purposes, specifically citing the relationship with Main Street Iowa.

“We thank you for your investment because we went through a market study strategies meeting. We have strategies planned, we have pre-strategies planned, a community gathering space thriving during downtown revitalization. That’s a big (to) do coming up, and (MCBD Executive Director) Deb (Millizer) will be one of the main players in helping with that,” Parks said.

Chamber President/CEO John Hall also sought to draw distinctions between the two organizations and their functions.

“While I appreciate the admiration that Mr. Eaton has for our organization and our ability to do our work, we would not be able to take advantage of the same resources, tools, etc. from both the state program as well as the national Main Street program,” Hall said. “We have appreciated having the Central Business District locate into our office space, though, to better align our resources (and) reduce duplication in things like printer leases and internet service. While the space costs a little more, we know that the space is upgraded from where they were at. We love being able to have their board meet right on Main Street. That keeps their eye on the prize, and we’ve been able to provide some additional services through our admin staff to better support their organization and their mission as well. Because while our primary focus is not directed at downtown, we certainly believe and see the value of investing (in) and improving our downtown.”

A motion from Schneider to direct staff to bring forward a resolution to fund the full amount from TIF carried by a 6-1 vote, with Al Hoop opposed. Mayor Joel Greer then gave a positive appraisal of the new office space and said it gave “way more life” than either organization had when they were housed separately.

The next item for discussion was somewhat similar as Steiner reported that the city has a $50,000 annual agreement with the Chamber for economic development services, and the current five-year contract will expire at the end of June — she added, however, that it will automatically renew on a year-to-year basis unless either party terminates it.

She once again asked if the council would prefer to continue using TIF funds to cover the cost of the agreement and if they would like to continue at the $50,000 level or modify that number in any way. Gaa recommended keeping the funding in TIF with the possibility of renegotiating and discussing the numbers at a later date.

Eaton again stepped forward to the podium during the public comment period and wondered why money from the downtown TIF district was being given to the Chamber to do economic development work outside of the downtown area.

“Again, the Chamber is a lobby group whose job is to lobby the government for its business members. Its meetings are not open to the public, and I have tried FOIA requesting information from them and that has been a difficult process to get done,” he said. “And according to Iowa law and the open meetings laws, which I’ve researched and had numerous discussions with the county attorney about, anything that binds the taxpayers’ money has to be open records and open to the public. And the Chamber has not been following that in the past years, so I suggest that if we’re gonna do this, we put a Chamber thingy on the agenda center and they post when there’s agenda information for binding the taxpayers’ money that they’re going to use and discuss.”

Hall then responded to Eaton’s comments, clarifying that the money for the Chamber agreement was actually coming from a separate TIF district.

“With research, you can find (that) our 990 is very public online. Less than five percent of our efforts, time and energy go towards lobbying efforts. We are very public and transparent on where our resources go, and ultimately those resources are all from private sources,” he said. “We appreciate being able to be here tonight on this item. As the city administrator alluded to, we knew that this five-year agreement was coming up. Our intention was always to work through updating this agreement. Economic development has changed a lot in the last five years. We’ve gone through a global pandemic. Workforce is the number one issue for our businesses, very different than five years ago when this agreement was last put into place.”

Councilor Gary Thompson sought additional clarification on which TIF district the money was coming from, and Steiner said it was actually for the south side of Marshalltown, though she wasn’t sure of the history on how that came to be originally. Fellow Councilor Barry Kell motioned to direct staff to prepare a resolution continuing the five-year agreement and utilizing TIF as the funding source. It passed by a 5-2 vote, with Thompson and Hoop opposed.