Council approves first reading of SSMID tax, looks for more detail
At her business “The Farmer’s Wife” on Newton’s downtown square on Monday, Bonnie Terpstra scrolls through an iPad, checking in new merchandise to the store. Inside, her business is tidy and orderly, but outside, Terpstra and a group of downtown business owners feel the streets and sidewalks need a little elbow grease.
Terpstra is on the Self-Supported Municipal Improvement District (SSMID) Establishment Group Committee, a union of three Newton business owners and Newton Chamber Executive Director Darrell Sarmento, aimed at getting support for a self-imposed tax to beautify the downtown square.
“Downtown is the hub of our city, and we want to keep it looking polished,” Terpstra said. “Especially when we have guests coming in from out of town, it just doesn’t look professional.”
The Newton City Council held a public hearing on the SSMID tax at its regular meeting Monday night to hear from both sides of the issue and discuss establishing geographic boundaries to the proposed tax district. Downtown Newton businesses utilized the SSMID tax from 1985-2006, taxing the district’s property owners $1.75 per every $1,000 of valuation. During the SMIDD era, the revenue raised was used for lighting, flowers and contracted an employee for duties such as sidewalk sweeping.
Since the expiration of the previous tax, the independent organization Renew Newton has been charged with funding projects in the downtown square area, but as organization chair and SSMID committee member Bruce Showalter told the council Wednesday, Renew Newton is funded through one-time Whirlpool monies and its coffer is drying up.
“There is no organized effort whatsoever,” Showalter told the council. “Everything’s kind of been volunteers. Community service tends to flowers, but nobody weeds them, nobody waters them. ... Our thoughts are we need to do something else to establish a process, so at least there is a group in charge to take care of the downtown and what it looks like. We need to put together some organized effort.”
Showalter said that just a handful of square business owners have been caring for the up-keep of the square. Flags and banners in the area were purchased by Renew Newton and given to the city.
According to information provided to the council by the establishment committee, the new SSMID would comprise an eight-block area surrounding the Jasper County Courthouse and also would include a half-block north and south of First Avenue West from West Fourth Street to West Third Street and the half-block north and south of First Avenue East from East Second Street to East Fourth Street. The tax levied would be less than the former SSMID tax, charging property owners $1 per every $1,000 of assessed value.
As of Monday night’s meeting, owners of 45 individual downtown properties have signed the committee’s petition, which represents 37 percent of the 121 properties in the district. Council member Craig Trotter voiced concern with the number, saying that he felt a higher number of businesses should be signed on before the council takes final action on creating the district. City information shows that the 45 properties represent $4,833,220 of the total $13,895,330 property value of the potential tax district.
The SSMID ordinance requires five of the six council members to approve the SSMID. A group appointed by Newton’s mayor would manage the funds and make recommendations on how they are spent.
Councilwoman Noreen Otto voiced the most concerns for the proposed tax Monday night, not satisfied with the examples of duties for the prospective employee that would be hired with the funding.
“I agree with what Darrell says. You have to do something. And I very much like that it’s a grassroots effort from those people who are most invested in the downtown area,” she said. “One of the examples of the things of the small maintenance that the contacted employee did was sidewalk sweeping. And, to me, that was kind of a bad example. I know $14,000 is not a large amount of money. It’s not going to change, physically, the face of our downtown, but it’s a start. ... I was wondering if the establishment committee had worked with the city development crew to come up with more concrete examples because, to me, that’s a disappointing use of the money.”
Newton City Planner Erin Chambers told Otto that the new duties for contracted employee have yet to be established, and any project funded by the money would not overlap services already preformed by the city.
Sarmento added that he also felt like the example given was “weak” but said that the establishment committee has time to get an initial group of businesses together and continue to develop the proposal. In an interview before the council meeting Wednesday, Terpstra cited weeding cracks in city streets and sidewalks and maintaining flower beds as possible duties for the employee.
Otto also was concerned about levying more taxes on downtown businesses and property owners. She noted that she does have a “small” financial stake in the council’s decision, as her family owns the Otto Law Office building on the square. She said she believes her stake in the ownership should not cause her to recuse herself from the discussion or ultimate vote.
Newton resident Larry Pettigrew addressed the council, reading a letter from concerned square property owners, including Ken Smith.
“The direction that commercial property needs to go is less not more tax,” the letter stated. “What is being proposed as a SSMID district solution works opposite of the attempts to keep commercial property taxes in line.”
Smith’s letter accused the former SSMID committee as being “self-perpetuating,” and hiring poorly supervised groups to do tasks that should be preformed by the city. He claims that nearly $400,000 was wasted in 20 years under the former SSMID tax.
Sarmento told the council that the chamber does not normally endorse a new tax on businesses, but he said the SSMID is a useful tool if organized properly.
“We will support the process, and if it’s not approved that’s all good and well,” Sarmento said. “But the question then before all of us is: what are we going to do about downtown?”
The council approved the first reading of the ordnance 6-0.
Mike Mendenhall can be contacted at (641) 792-3121 ext. 422 or via email at mmendenhall@newtondailynews.com.
