Walnut Community School

“A Small School with a Big Future”

415 Antique City Drive PO Box 528
Walnut, Iowa 51577
PH: (712) 784-3615 FAX: (712) 784-2177

Jim Hammrich, Superintendent

October 26, 2010

Kay Mocha
Representative for the Pottawattamie County Board of Supervisors
th
223 South 6 St
Council Bluffs IA 51501

Dear Kay:

Subject: Written Recommendations Regarding Proposed Division of Revenue

As the designated representative of the Walnut Community School District, I am submitting this letter as our written
recommendations for modification to the proposed division of revenue potentially authorized by the proposed Urban
Renewal Plan: Pottawattamie Wind Farm Urban Renewal Area. I would also like to note that as of the date of this
letter, the Walnut Community School District has not received a written notification of the consultation between the
County and the affected taxing entities.

The Urban Renewal Plan proposes to establish an Urban Renewal Area around the individual wind turbines
comprising the Walnut Wind Farm in order to authorize a Tax Increment Financing (TIF) district on an existing facility.
The Walnut Wind Farm became operational in 2008. Its first assessment date for property tax purposes was Jan 01,
2009.

The Plan has been designed to include only certain public roads and the wind energy conversion property including
easements for access from public roads to the wind energy conversion property while attempting to avoid the
surrounding land zoned for agricultural use. Wind energy conversion property does not benefit from the same TIF-
exempt status as does any other form of electricity generating facility.

The primary goal of our recommendations is to limit the financial impact of this plan to the school district and our
residents and thus protect our ability to meet our obligations to our current and future students. Any steps taken to
lessen the financial impact on our school district will also lessen the impact on the other taxing authorities affected by
this plan, including but not limited to, A-H-S-T School District, Layton and Knox Townships, and Iowa Western
Community College.

To ensure clarity regarding our recommendations, I feel it necessary to reiterate some facts pertaining to the Urban
Renewal Plan as proposed:

1. The plan is clearly designed to capture future property tax revenue generated from the wind farm that resides
primarily within the boundaries of the Walnut Community School district, to finance necessary county road
projects that exist primarily outside the boundaries of the Walnut Community School district.

2. The only property in the Urban Renewal Area that generates property tax revenue is the Wind Farm, which is
a special classification of property for taxing purposes subject to Iowa Code 427B.26, which mandates the

Officers: Directors:
President: Shannon Griffith Todd Ehlers
Vice President: Troy Schaben Ron Hamilton
Secretary: Karli North Bryan Simonsen

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 Walnut Community School
“A Small School with a Big Future”
415 Antique City Drive PO Box 528
Walnut, Iowa 51577
PH: (712) 784-3615 FAX: (712) 784-2177

Jim Hammrich, Superintendent

property’s increased valuation over a period of six years. This property will not appreciate in value beyond
what is laid out by statute. No amount of economic development will increase the taxable value of the
proposed Urban Renewal Area. There will be zero dollars of increased property valuation created as a result
of the Urban Renewal Plan.

3. If implemented, the negative financial impact to our district and its residents will be significant. By utilizing Tax
Increment Financing this plan would seize over $15 million dollars in tax revenue that would have remained
local.

4. This plan will prevent or lessen automatic property tax relief to Walnut Community School district residents
who live in Pottawattamie, Shelby and Cass counties.

5. This plan will make the Walnut Community School district one of the most heavily TIF-burdened school
districts in Iowa.

6. This plan adds uncertainty and unnecessary risk to our school district’s finances. Delaying property tax
revenue for up to 20 years on property with an estimated 20-year lifespan would be unwise.

7. This plan would make the school district more reliant on state funding rather than more self-sufficient. Given
the unreliable nature of state funding in the recent past, the school district would not willingly put itself in that
position.

It is for these reasons stated above that we make the following recommendations:

Recommendation #1:
That the County abandon any plan involving Tax Increment Financing and fully investigate its ability to
finance these projects by leveraging its tax revenue from the Wind Farm property without TIF.

Even without utilizing Tax Increment Financing, the County, at its current levy rate, would realize approximately
$16,000,000 in property tax revenue from the Wind Farm over the 20 year proposed lifespan of the Urban Renewal
Area.

Recommendation #2:
If Tax Increment Financing is to be utilized, the division of revenue should be based upon the effect of the
economic development activity upon the properties’ valuation.

Any incremental valuation to real property as a direct result of the economic development activities and improvements
carried out by authority of this Urban Renewal Plan should be subject to the Tax Increment Financing provisions
pursuant to Iowa Code 403.19. Conversely, any incremental valuation to a property that has its taxable value
mandated by state and/or county ordinance, e.g., property taxed under Iowa Code 427B.26, should be shared among
the various taxing authorities at their respective levy rates.

Officers: Directors:
President: Shannon Griffith Todd Ehlers
Vice President: Troy Schaben Ron Hamilton
Secretary: Karli North Bryan Simonsen

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 Walnut Community School
“A Small School with a Big Future”
415 Antique City Drive PO Box 528
Walnut, Iowa 51577
PH: (712) 784-3615 FAX: (712) 784-2177

Jim Hammrich, Superintendent

Recommendation #3:
If Tax Increment Financing is to be utilized, the projects undertaken should be limited to the projects laid out
in the Urban Renewal Plan.

In order to limit the financial impact to all affected taxing authorities, the County should commit to performing only the
repairs listed as “Project Roads” in the Urban Renewal Plan Exhibit A. After completion of these projects and
regardless of any possible excess funds available, the plan should be considered completed and all taxes collected in
the Urban Renewal Area should be divided in the same manner as taxes on all other property.

Recommendation #4
If Tax Increment Financing is to be utilized, the County should commit a portion of the revenue to study the
effectiveness of the Urban Renewal Plan with respect to its objectives.

Project Area Objectives are explained in Section G of the Urban Renewal plan. It states, in part:

“Renewal activities are designed to provide opportunities, incentives, and sites for commercial and industrial
development”

As “private investment in new commercial and industrial development” is a stated objective of the Urban Renewal Plan,
an annual report to the public of the extent to which this and other objectives are met would be a valuable tool in
assessing similar renewal projects in the future. Useful metrics would include: expansion of the property tax base,
private investment in commercial enterprises, and number of jobs created in the area.

Sincerely,

Shannon Griffith
President, Walnut Community Schools Board of Education

Respectfully submitted on behalf of the Walnut Community School District, its students and residents.

CC: Melvyn Houser

Lynn Leaders
Loren Knauss
Lynn Grobe
Roger Williams

Officers: Directors:
President: Shannon Griffith Todd Ehlers
Vice President: Troy Schaben Ron Hamilton
Secretary: Karli North Bryan Simonsen

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