OTTUMWA — The Ottumwa City Council had to take its medicine when it came to settling an old reimbursement.
The council unanimously approved reimbursing $342,913 through future road use tax revenue to the Iowa Department of Transportation as part of a grant for the RISE Immediate Opportunity program eight years ago.
The road use tax option appeared to be the "least bad" way to pay back the money, but other options for repayment allowed the city to pay out a lump sum, or make installment payments with interest.
Under the program through the DOT in 2013, Cargill Meat Solutions was to create 120 jobs within two years after the completion of an Iowa Avenue reconstruction project, and the DOT advanced the city $1,172,195 toward the construction of the project, with the city committing almost $800,000 to the project. However, it became complicated once Cargill sold the property to JBS in 2015.
The amount of money the city has to return was tied to that job creation. Jobs were eventually created, but not during that time frame.
"The city, I guess, isn't particularly being penalized. We were given extra funds at the time, but because we didn't meet the obligations under the grant, we have to reimburse," city administrator Philip Rath said. "Grants are great when you can meet all the criteria, etc. But if you can't meet it, you might be better to not take the grant and look at other options."
Councilman Bob Meyers was on the council at the time of the grant, but no current city staff were involved. He said the grant was needed at the time, and appreciated Rath's efforts to find any other way to pay the reimbursement.
"When a company sells out to another company, sometimes those transitions create problems of whether you could add the staff or employees you thought you could," Meyers said. "The economy is a part of it when it comes to what happens within that period of time."
Rath said it was a matter of old city leadership not having an agreement in writing when the transition between Cargill and JBS occurred that would have continued the obligations of the grant.
"Unfortunately, as much as I hate to say this, the city didn't get that agreement with Cargill that would say if they didn't create those jobs, they would reimburse the money," he said. "And that was on us as a city to not have that in place. This isn't on either of the employers. We didn't have any kind of agreement that would have transferred. Ultimately, we are responsible for that."
In other business:
• Rath gave a quarterly update on the city's discussions with Bridge View Sanitation, per the new 10-year contact the two entities entered over the summer.
"It was a positive meeting. One of the positive things that was realized by both is that the number of calls had declined," Rath said.
Rath reminded the public to leave garbage and recycling totes at the residence, even if they are moving because "there is a little bit of lag time getting those to customers. If they don't have anything in stock, it may be several weeks before we can get that to them."
He said the city would be adding an email address to its website for the public to request pickup of bulky items.
"We'll continue to have updates, and continue to improve upon the service," he said.