During last week’s regular meeting, council approved a resolution Ordering Specifications, Form of Contract, Notice to Bidders, Setting Date for Public Hearing, and Authorizing the Taking of bids and Authorizing Bid Opening in Connection with the 2013 Distribution Conversion Project. This resolution sets the date for the public hearing for October 1, 2013 and authorizes seeking bids for the project.
Approximately 70% of the City’s electric distribution system is underground. Additional conversion areas for overhead electric system to underground have been a priority of Council in the past and were included as part of the local option sales and services tax ballot approved by voters in March 2011. On April 16, 2013, Council approved the engineering contract for the design and bid phase as well as the construction and final phase for the 2013 Distribution Conversion Project.
The project consists of installation of approximately 20 city blocks of underground conduit and secondary cable including bases for devices such as pedestals, transformers, switches and related equipment.
The boundaries for this phase are:
-East University Street (north), 500 feet south of East Oskaloosa (south)
-East Eight Street (west), and Eagle Lane (east).
The proposed timeline for the project is:
Bid Opening – September 17, 2013
Contract Award – October 1, 2013
Est. Construction Start – October 8, 2013*
Completion-Part A – December 15 ,2013*
Completion-Part B – June 15, 2014*
Final Payment – July 1, 2014*
The Engineers’ total estimated project cost including engineering is $1,300,000. It should be noted, there is also a homeowner expense associated with this project. The City’s responsibility replaces overhead electric distribution lines with new underground lines to the structure. The homeowner is responsible for hooking up to the new lines. Depending on the customer’s existing service, this cost could vary from a nominal cost up to $1,000.
Council also approved a resolution in Support of the Proposed Terms to be Included in an Agreement for Private Development By and Between the City and Castle Metal, Inc.
At the Policy and Planning meeting on August 6, 2013, a request from Castle Metal was discussed concerning a community local match to secure financial assistance from the Iowa Economic Development Authority (IEDA). After discussion, staff was directed to prepare a resolution of conditional support for Council’s consideration.
This resolution is in support of a proposal to provide incentives included in a private development agreement between the City of Pella and Castle Metal, Inc.
Castle Metal, Inc. is a subsidiary of Kasteel Metaal B.V., which is a leading Dutch worker of steel and aluminum. Castle Metal plans to lease a 40,000 square foot existing facility in order to conduct its specialty steel working operations. Specialties will be laser cutting, automatic bending and robot welding in combination with after-treatment such as pickling and powder coating. Stainless steel parts for milking robots will be the company’s main focus. These products will be sold only to Lely USA with the possibility of additional customers being added once the company is established in Pella.
Castle’s renovation to the existing leased space will include the construction of new walls, improvements to the foundation, and installation of heating, cooling, and ventilation systems. The machinery and equipment will be installed by the end of 2013, with full-scale production being reached by mid-2014.
Based on estimates from Castle Metal, Inc., the company estimates its investment in machinery and equipment for the proposed operations is approximately $3,285,000. In addition, within three years twenty-six new jobs would be created. Castle Metal believes twenty-five of these new positions would have a wage of $17.54 per hour or greater.
In order to encourage Castle Metal to locate its facilities in Pella, the Iowa Economic Development Authority has approved a preliminary financial incentive package of $384,200, which is subject to the local match requirements for direct financial assistance and tax credit assistance.
Proposed Terms to be Included in Development Agreement
In order to secure the financial incentives from the Iowa Economic Development Authority, Castle Metal, Inc. must secure a local match equivalent to 20% of the direct financial assistance provided by the IEDA and the required match for the tax credits provided by IEDA, which is based on the value of increased local taxes.
computed under the five year sliding scale used for tax abatement under Chapter 427 of the Iowa Code.
The key terms of the resolution of support for this project are as follows:
1) A $20,000 forgivable loan subject to Council approved terms and conditions in the City’s development agreement.
2) A sixty month no interest $20,000 loan subject to Council approved terms and conditions in the City’s development agreement.
3) Tax Increment Financing grant awards in the amount of $21,100 which would be subject to Council approved terms and conditions in the City’s development agreement.
4) Castle Metal, Inc. would be required to meet all employment requirements as mandated by IEDA.
5) The developer must fulfill the City’s applicable legislative requirements, including state agency approvals, and negotiation of an acceptable development agreement.
6) Castle Metal, Inc. would be required to maintain a facility within the corporate limits as outlined and in accordance with the economic incentives approved by IEDA.
7) The resolution of support is conditional upon the project receiving economic incentives from IEDA in the amount of $384,200.