City council passes housing initiative, pushes for progress
Montezuma, March 16, 2018: Readily available housing has been a hot topic for years in Montezuma, and the city council is taking further steps to support the development of single-family homes in the community.
Montezuma Community Development presented their housing study findings and recommendations at a February 19th meeting, and the city council formally approved the Montezuma Housing Initiative on March 5th, 2018.
The initiative provides for two different incentives, both aimed at stimulating new construction inside city limits. Through the home-buyer incentive, a $5,000 cash payment will be provided to buyers of any ‘new construction’ homes. The incentive check will be delivered at the time and place of closing on the permanent financing of the home.
The second incentive is meant to encourage speculative home construction in the community. The City of Montezuma will reimburse all construction loan interest on each new qualifying speculative home for a period of up to 12 months from the time a building permit is issued and up to a maximum of $7,500. Accrued interest will be reimbursed to the builder upon completion of final appraisal, and the balance will be paid at the time the home sells or after 12 months, whichever is sooner.
To be eligible for incentives, homes (exclusive of land value) must be valued at least at $160,000 as evidenced by an appraisal or assessment. This program shall sunset when five of each type of incentive are awarded by the city.
Whitney Baethke, Director of Finance & Community Development, explains, “The city council and Montezuma Community Development have been taking a close look at current hurdles to adequate housing in town. MCD met with several other communities who have launched housing initiatives and identified some best practices. “
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DNR Requirements Prompt City to Take Action on Sanitary Sewer Rates
Montezuma, January 3, 2017: After two years of planning and reviewing options, the City Council of Montezuma is taking several steps to comprehensively address new wastewater discharge requirements imposed by the Iowa Department of Natural Resources.
IDNR issued the City a new National Pollutant Discharge Elimination System (NPDES) permit in June of 2015. The permit 
requires Montezuma’s existing aerated lagoon facility to meet stricter permit limits for ammonia nitrogen and adds new limits for E. coli, nitrogen and phosphorus. The existing plant cannot meet the new standards and will need to undergo a complete overhaul to be compliant with the Clean Water Act-inspired requirements.
Tom Atkinson of the DNR explains, “The City is required to have a permit to operate the wastewater treatment facility and to discharge the treated water to the creek. Changes in the State's water quality standards provided a higher level of protection to the creek, resulting in a higher level of treatment being required before the treated wastewater could be discharged to the creek.”
The options for improvements were dictated by the Average Wet Weather Flow (AWW) that comes into the plant. The higher the flow, the larger the needed improvements and more expensive the cost. Montezuma’s AWW flow currently exceeds 1.0 million gallons per day (mgd) about twice a year.
The City engaged civil engineering firm Veenstra & Kimm to guide the process. Over the past two years, Veenstra & Kimm have completed detailed flow studies, researched treatment options and reviewed the current delivery system.
“Veenstra & Kimm, Inc. compiled a study of five different cost-effective treatment alternatives, and presented them to City Council and Staff for review. The City reviewed all options and selected the lowest cost alternative for the required improvements,” stated Veenstra & Kimm engineer Olivia Patton, P.E.
The options presented to the Council ranged in cost from $6.3 million to $4.6 million. In August, members of city staff, Council and the mayor toured two types of treatment facilities in other communities and were able to speak to their operators about the features of each system. At the August 21 Council meeting, the Council formally moved to pursue final plans, specifications and financing for a new sewer plant equipped with OPTAER SAGR technology.
The SAGR system will utilize our current lagoons but also consists of a clean stone bed that is fully aerated. Water is treated as it flows through the substrate, and a layer of insulating mulch at the surface of the rock bed prevents ice formation. Water flows then flow through ultraviolet light treatment before being discharged into the creek.
The total cost for the new sewer treatment system is $4.6 million and will be financed with a State Revolving Fund revenue bond. Financial Planner Northland Securities conducted a rate study and provided the City Council with a recommend rate increase schedule that would meet the bond covenants and repayment requirements.
On Tuesday, January 2nd, the City Council held its final reading of Ordinance 65, An Ordinance Incrementally Increasing Sewer Rates from $13.50 to $29.25 Minimum and from $3.74 to $10.50 per Each Additional Thousand Gallons. The ordinance specifies that the rates will be increased in three increments: January 2018, July 2018 and July 2019.
“We are certainly not happy with the position that the DNR and EPA have put us in,” Stated Council member Brownell. “They passed down new permits and requirements, but aren’t overly concerned with how communities of 1500 people are going to pay for a $4.6 million project. These rates are going to be difficult for our residents and there isn’t one thing we can do about it.”
The City petitioned the DNR for a delay and was granted a 12-month extension to the original permit compliance schedule. City staff is also working on a Community Development Block Grant application that would cover $500,000 of the costs.
Several other communities in the area were issued the same type of permits by the DNR. Prairie City recently completed a $4.3 million-dollar mechanical wastewater treatment plant. The minimum charge in Prairie City is $25.45 and $14.47 per thousand beyond that. Brooklyn is currently constructing their new activated sludge sewer plant at a cost of $4.2 million. They have undergone incremental rate increases and currently have a $23.63 minimum rate and $13.49 per thousand.
In January 2018, Montezuma’s sewer rates will rise to $18.75 minimum charge for the first 1,000 gallons of usage and $6.00 for each additional 1,000. The next increase in July 2018 will bring the rates to $24.00 minimum and $8.25 per 1,000 gallons. The final increase will be effective July 2019 and increase charges to $29.25 minimum and $10.50 per 1,000.
Click here to view Ordinance No. 65 in its entirety.
As an additional benefit, builders of any new homes that qualify for the home-buyer or home-builder incentive will have all building permit and utility tap fees waived for the calendar year 2018; in the calendar year 2019, building permit and utility tap fees will be charged at fifty-percent (50%) of the fee schedule, and at one-hundred-percent (100%) of the fee schedule in the calendar year 2020.
“The mayor and city council are determined to support growth however we can. This housing initiative along with the tap fee waiver and reduced price of South Diamond lots represent the strength of the city council’s commitment to progress,” stated Councilmember Curtis Bolen. “Montezuma is an excellent place to raise a family and call home, we just want to assure our housing inventory and market is healthy and active.”
Click here for more information on the Montezuma Housing Initiative or the South Diamond Development.