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FAIRBANK — The Fairbank City Council will take public comments at 6 p.m. Monday, Feb. 24, at City Hall on its proposed maximum tax intake from certain levies for the budget year starting in July.

The current year certified property tax is just under $10.73 per $1,000 assessed valuation, and a maximum tax of just over $10.77 per $1,000 assessed is proposed for certain levies.

Increases contributing to the greater tax intake requested include city liability, property and self-insurance, social security tax, employee retirement and other benefits, according to notice set for publication.

If the city froze its budget, tossing out insurance and benefit increases projected, and brought in the fiscal 2020 intake again in 2021, for $378,851, it would have to levy just over $10.56 per $1,000, which is likely lower thanks to rising valuations. The $10.77 maximum is projected to bring in $386,349, which is a 1.98% increase in total intake compared to a budget freeze and allows for the increased contributions.

Cities certify their budgets to the state in March. The maximum levy must be approved prior to setting the public hearing on the proposed budget for fiscal 2021, by recent state law.

The council approved setting the hearing unanimously.

FOOD CENTER GRANT COMING ALONG

The Council also authorized an economic development grant to Jennifer Davis for acquisition and operation of the Fairbank Food Center, and it approved a $55,000 loan at 2.99% yearly, through Northeast Security Bank in Fairbank for that purpose.

The transaction is expected to close around Feb. 25.

Principal will be paid in three annual installments on June 1 of 2021 at $18,000, 2022 at $18,000 and 2023 at $19,000. Interest will be due June 1 and Dec. 1 of each year. The city reserves the right to prepay without penalty.

The city is authorized to collect tax sufficient to pay the principal and interest each year before they come due, as spelled out in the document.

The council finds that the project: will add diversity and generate new opportunities for the Fairbank and Iowa economies, will generate public gains and benefits which are warranted in comparison to the amount of the proposed grant, and will accomplish a public purpose.

The grant is subject to terms set out in an economic development grant agreement between the city and Davis.

As proprietor, Davis agrees to maintain and operate the grocery store for the duration of the agreement.

The $50,000 grant will be paid in two installments.

The first installment of $25,000 will be within 30 days of the city’s receipt of the proceeds of the loan note.

To receive the second $25,000 installment, Davis will submit a written grant disbursement request to the city within 30 days after she has obtained title in “fee simple,” proving complete ownership status, and she must also show that it continues to operate as a grocery store.

The agreement will terminate either on the final grant disbursement or — if title as such is not acquired — by no later than the third anniversary of the agreement.

The resolution passed 4-0-1 with Councilman Andrew Williams abstaining because he works at the bank.

GAS RATE FORMULA BEING SET

The Council passed the first reading of an ordinance amending provisions on natural gas rates and associated costs.

Supplier Northern Natural is asking for a dime increase to the base average, to 49 cents.

The city adds 49 cents per CCF (hundred cubic feet) on top of the gas price, for residential use. Corn dryers are among the few that use enough gas for the next-lower pricing tier from the city, which only adds 40 cents a CCF.

The contact person at Clayton Energy proposed a formula that will make the city’s gas price fluctuate with the price of the commodity. Fairbank’s rate would be “the cost of gas” variable plus $3.50 an MCF (or thousand cubic feet, about 1 million BTUs).

“We will add 35 cents [per CCF] instead of 49 cents,” Public Works Director Dave Ryan said Monday, referring to the new versus current residential rate, which will be added to Northern Natural’s rate, which is now 49 cents barring further adjudication, and a $4 monthly city meter charge. “It’s back computed to make out to the same price. The price is being implicated onto us.”

“With that little bit of rate increase, it will raise our price. And they might very well go down, and if they do we [our rates] will go down with it,” Ryan said.

The changing cost of natural gas will be determined monthly based on what the city paid from the first to the last of the month.

The new rates will take effect immediately upon passage.

Council approved the first reading without contest. Ordinances can have two to three readings.

CHIEF SEEKS FIRE TRAINING ON HOUSE

In other news, Fire Chief Brad Gordon confirmed his interest in using an abandoned, city-owned property at 405 Grove St. for departmental training. It is near Casey’s, which Gordon will take into consideration, he said.

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