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Editorial: Coralville winners must address debt

BY DI EDITORIAL BOARD | OCTOBER 31, 2013 5:00 AM

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In a city nearly $280 million in debt, eight City Council candidates and four mayoral candidates are vying for the chance to put their visions into place.

The Coralville municipal election will take place on Nov. 5, and with the mayor’s seat open as well as three council positions, the race has drawn interest from Coralville residents and surrounding communities.

And with good reason, because this election holds significance even for those inside and outside city limits. Such collaborative projects as the Iowa River Landing, a complex located in Coralville that houses a University of Iowa health-care clinic, were developed in part using tax increment financing, a controversial funding source that has been used for recent developments all around Johnson County.

Candidate debates and forums have shown the contrast in how these contenders plan to tackle issues (like tax increment financing) facing Coralville and its 20,000 residents.  At an Oct. 23 candidate forum, incumbent Bill Hoeft and first-time challenger David Petsel squared off on whether those TIF funds should be used for private developments.

Hoeft said private investment simply is not possible for a project the size of the Iowa River Landing.

“The [Iowsa River Landing] is well thought out,” Hoeft said. “It’s been decades in the planning. This wouldn’t have happened with a private developer.”

But Petsel thought public funds shouldn’t be used for such projects.

“I believe the corporate handouts have got to stop,” Petsel said. “I would love to move into [Iowa River Landing], but I am not going to, because I don’t want to take money from the city or the tax payers. This is out of control and unsustainable.”

In the mayoral election, most of the candidates see the city’s $279 million debt as a non-issue, a side effect of city growth.

“The No. 1 issue is to continue that growth, to continue that success, and doing so without increasing debt or overburdening the taxpayers. We need to show Moody’s that we have control,” Mayoral Candidate Matt Adam said.

In June, Moody’s Investors Service, which rates the financial well-being of cities across the country, downgraded Coralville’s credit rating to Baa2, citing uncertainties in the city’s urban-renewal area and its use of TIF revenues to cover shortfalls in the city-owned Coralville Marriot. The report said the “outlook remains negative” for the city.

The downgrade was the third since 2011, when Coralville held a Aaa credit rating, the highest available from Moody’s. Baa2 signifies a “lower medium grade”.

Whether the credit rating and city debt prove to be larger issues than most of the candidates expect has yet to be seen. But one way or the other, it is vital for whoever is elected to address the fiscal woes of Coralville and create a plan for the responsible use of TIF funds and the city debt, as these issues affect more than just Coralville residents. Like runners in a three-legged race, the economic fates of Coralville and Iowa City are tied to each other.

Often times it can seem like a municipal election is more of a popularity contest than a debate on the issues. But with candidates offering clear and distinct views on how to handle decisions like these, voters have a definitive choice in how they want the city to move forward.


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