UPDATE: Lake Delhi bond issue passes by vast majority - KWWL - Eastern Iowa Breaking News, Weather, Closings

UPDATE: Lake Delhi bond issue passes by vast majority

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DELHI (KWWL) -

The Lake Delhi bond issue passed, with 95 percent of voters saying, "yes." 836 people voted yes and 43 people voted no.

Tuesday, eligible voters in the Lake Delhi taxing district of about 830 homes voted on a measure crucial to the future of the lake.

Taxing district board of trustees president Steve Leonard attended a "watch party" for the results Tuesday night.

"Oh, I'm ecstatic, just in terms of the lake community coming together," he said, soon after calling out the victory to the rest of the several dozen supporters. "You know, it's hard to raise your own taxes, but we have 95 percent of the people eager to get this lake restored."

In July of 2010, heavy rains caused the dam to break, sending the water of Lake Delhi and its many docks, boat lifts and watercraft crashing down the Maquoketa River.

The bond issue on the table required a super majority, 60 percent, to pass. The district's board of trustees will be able to bond up to about $6 million on assessed property values toward the restoration of the dam and lake.

Proponents say this is key in showing state legislators the local effort to raise money is strong, which may help in securing state funds later on.

Early estimates put the cost of rebuilding the dam at about $10 million. That doesn't include the costs of continuing to clean up the lake bed and putting other restorative measures into place, though a large volunteer effort has already done much work in those areas.

A local fundraising effort, called the Community Fund to Rebuild Lake Delhi, has managed to raise $1.5 million so far, with a goal of $3.5 million.

In July, Gov. Branstad vetoed a $5 million package that would go toward rebuilding the dam. Leaders of local groups advocating for the rebuilding of the dam, however, have said Branstad and state legislators haven't written off the idea of putting $5 million toward the rebuild in the near future.

Larry Murphy is a lobbyist working for the lake taxing district, which is called the Combined Lake Delhi Recreational Facility and Water Quality District. Sunday in Delhi, at an informational meeting about the vote, Murphy said state legislators want to see three key signs of strong local efforts to raise dollars.

He said state lawmakers are looking for local donations, which the Community Fund to Rebuild Lake Delhi fulfills. He said the passage of the bond issue is a crucial second sign. Finally, he said, lawmakers should also see Delaware County dollars put toward the rebuild and restoration of the dam and lake.

"Our next step is to work with the state and the county to get their commitment in terms of getting their financial commitment to get the restoration of this lake in place so we can get the process started as early as next spring," Leonard said Tuesday night.

The taxing district board of trustees will be able to bond up to precisely $6,091,104, which is five percent of the district's total assessed property value: the maximum amount of debt allowed such a public entity by the Iowa Constitution.

Leonard said a passage of the bonding ability does not necessarily mean the trustees will bond the full amount. If a donor steps forward or some other, unexpected funding stream makes itself available, the amount could be less. However, if the full amount is bonded, he said, it would be a 20-year bond, with property owners paying it off over the course of 20 years, based on their assessed property values.

For example, according to Speer Financial, Inc., the financial institution the board of trustees chose to handle the bonding process, a person whose property value was assessed at $25,000 after the dam break would pay about $150 per year over 20 years for their share of the $6 million bond. Someone with a $50,000 post-breach assessed value would pay nearly $300 per year. $100,000 in value would shake out to nearly $600 a year, and $200,000; about $1,170, annually.

There is a rush, however. With the loss of the lake, assessed property values within the taxing district dropped an average of 38 percent. If the taxing district doesn't bond the money this fiscal year, the amount trustees will legally be able to bond once the post-breach assessed values are in place FY2013 will be only about $3.8 million.

Maggie Burger is the LDRA executive director and a public finance advisor with Speer Financial.

"If we don't have authorization on $6 million, there's major potential that the whole dam will not get rebuilt, with the money that we have available to us," Burger said at Sunday's meeting.

The approximate $3.8 million available in FY2013, Burger said, would not be enough to entice a state "match" of $5 million or elicit county funds for the rebuild of the dam.

Leaders and residents at Sunday's meeting said they have not seen or heard of any organized opposition to the bond issue. Some said they'd heard of neighbors not wanting to pay higher taxes for this. Proponents of the ability to bond, however, said the bond is the cheapest option, considering the permanent loss of property value if the dam is not rebuilt and the lake not restored.

"If we do not put the water back, property values will become so low that it will become very hard to sell your home for anywhere close to what you paid for," longtime lake resident Marcheta Cooey said Tuesday night.

A group of neighbors called the "Bring Back Lake Delhi - Vote YES Team" wrote in a letter to neighbors, "A No Vote is a vote to shoulder 100% of the entire cost of rebuilding the dam on the local property owners vs. share the cost with the State and County."

On Sunday, immediately before the informational meeting, many members of the private non-profit Lake Delhi Recreation Association voted in an overwhelming majority of 420 for, 16 against and one abstaining, to transfer the title of the dam to the taxing district, which is a public entity.

This was a crucial vote, since one roadblock to securing public funds for the rebuild has been the private ownership of the dam itself, though the lake was public.

LDRA leaders will now negotiate with the taxing district board of trustees to transfer ownership of the dam. Board president Steve Leonard said he'd like for that to be complete by the first day of the Iowa Legislature 2012 session, Jan. 9.

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