LEE COUNTY – A conversation about raising the rent for a local labor union in Fort Madison turned into a philosophical debate with Lee County Supervisors about renting property to any entity.
The county received a recommendation to increase the rent charged to UFCW to $1,200 per month from the current $400. The move was on the agenda for discussion which caught the attention of the union who attended the meeting. The discussion was prompted by an item in the county’s annual audit that showed the county needs to pay property taxes on property they rent or lease to private entities.
Supervisor Matt Pflug said the county should support the union and leave the rate as is.
“If we are collecting rent, which we are, we now have to start paying property taxes on that property. We’re getting $4,800 a year and I know there was a figure thrown around of $1,000 a month. Property taxes run about $2,600. I think we should support the unions of Lee County, which I think we do on this board,” he said.
“I say at $400 a month we just leave it alone.”
He said if the rent is too high for the union, they could leave, which would leave the county without a tenant. However, the county would then not have to pay property tax on the building. The first floor of the building is taken up by the Newberry Center which does not pay rent for that space.
Ron Fedler said he was a member of that union and the union doesn’t use it every day, but essentially for meetings.
“I agree with Matt, even if we have to pay property taxes, we’re still left with some extra money,” he said.
“I feel we give them a place and still not lose money on it. If we raise it too high, they will find another place and we’ll get nothing from it.”
Supervisor Tom Schulz asked if the county was supplementing the utilities.
Penny Logsdon, a union representative, said they pay just the $400 per month, but they have also done some maintenance at their own cost.
She said having someone in the space creates awareness for the county for problems that might arise and it keeps the building in use.
“We have taken good care of it and, if there’s a problem, we let you know immediately, which would not be the case if the upstairs were empty,” Logsdon said.
She said the county wouldn’t be able to get $1,000 a month for the rent without any kitchen amenities and no elevator.
Schulz said he perceived it as a “very dangerous” thing to use public facilities for private entities.
“Some would say an entity that has political connections in a building and leasing it to them at what is clearly a subsidized rate,” he said.
“There is no place you can rent that square footage for any kind of office for $400 a month. If we are doing that, are we not violating the law?”
Schulz went so far as to say it may be “corrupt” for the county to be subsidizing the rent to the labor union.
County attorney Ross Braden, who was in attendance, said he hadn’t looked closely enough to comment on the issue other than to say the county was profiting from the lease.
Schulz said with the other expenses involved, including part of the utilities and maintenance and now property taxes, the county probably isn’t making a profit. He asked for a legal opinion on the county’s leasing boundaries.
Supervisor Chuck Holmes said the county could work a compromise in the lease and come up with a rate that was favorable to both sides.
Schulz said Lee County Auditor Denise Fraise came up with an $860 figure that was more reflective of the county’s financial responsibility to the property monthly.
Chairman Garry Seyb said he would like to see the building committee look at county rentals and compare the rates of all county buildings to “going rates” for comparable properties.
“We have to be consistent in how we do business and everyone knows we are looking at our budget very tightly,” he said.
“I’m going to go back to the budget, that’s my job, looking out for the taxpayers regardless of who’s in that space.”
Fedler said there is quite a bit of open space in downtown Fort Madison and to say that the county could rent it out to someone else at $1,000 a month is a stretch.
Seyb said the county formed a building committee for this specific purpose and they should make a recommendation to the board. No supervisors serve on the building committee.
“I personally, I don’t believe we should be in the rental business. If we’ve got a space that is not being utilized and has no future county use, why are we owning it? Why are we insuring it?” he asked.
Pflug said the county isn’t losing money and is supporting the unions.
Schulz said it’s a dangerous statement to make as a supervisor.
“Should we support local newspaper, the local taxidermy shop? A union is an entity that’s not part of the government. I’m okay with the concept of supporting people and unions and I’m fine with unions, but when you say a taxpayer who may not even believe in unions is therefore somehow on the hook to support them…I’m sorry, but that’s corrupt.”
Seyb also asked for the county’s legal interpretation.
Braden said initially he didn’t think the county should be in the landlord business, but said the county can’t subsidize a private entity so they should be generating income to cover the county’s costs regardless of who’s in a space.
Braden said he would bring the county a more comprehensive legal opinion on the county renting property.
In other action, the board:
• approved an $8,000 contract with Southeast Iowa Regional Planning Commission to help draw up an ordinance around utility projects proposed for the county going forward. The board and SEIRPC have been in discussions the last few weeks about creating an ordinance setting up some regulations for private companies who want to build utility projects in the county.
• approved a financial assurance, or Local Government Guarantee, with the Great River Regional Waste Authority to cover closure and post closure costs of the landfill. The guarantee is part of the Iowa code for landfills that past a financial test outlined in Iowa Code Chapter 567 - 113.14. That cost is currently estimated at $405,000.
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