City moves ahead with wellness center funding

by Marianne Gasaway

After hearing from just one person concerning its intention to issue $700,000 in General Obligation Bonds to support construction of a community wellness center, the Clear Lake City Council moved ahead with its proposed partnership with the school district for the project.

City leaders entered into a Letter of Intent with the Clear Lake School District last month as a sign of “good faith” that they will work with the school on a proposed health, recreation and wellness center project.  The School District will hold a referendum on March 3 seeking approval to spend $18 million on several school projects, including a wellness center.  If the measure, which requires 60 percent voter approval does not pass, the city would not pursue its capital contribution to the project.

Under the terms of their agreement, the facility would be built by the school district and operated by the city.

Jana Mentzer had questions for the Council about what the operational costs for the facility would be, as well as how tax rates would be affected.  She also encouraged the city and school to discuss the project with the Mason City Family YMCA, as well as other similar size towns to determine operating costs and upkeep.

The hearing did not allow for a question and answer period, however City Administrator Scott Flory noted in his presentation that the effect of borrowing $700,000 on the city’s tax rate would be 11-cents per $1,000 of taxable valuation.  For example, for a residential property with an assessed value of $175,000, the estimated property tax increase (in the city’s portion of the tax bill) would be 88-cents per month, or $10.59 per year.

Flory added that fiscal year 2021 is the final year for debt service payment for the bonds previously issued for the city’s fire station project, which was a 10-year note.  The annual debt service on that issue is about $250,000, or 36-cents per $1,000 of taxable valuation, making the net impact of the 11-cents per $1,000 for the wellness center, a drop of 25-cents per $1,000.

The school district has stated it does not intend to raise its tax rate as a result of the proposed $18 million projects, of which about $10 million is the wellness center.