Rural residents worry a water buy-out could lead to a flood of new development

By Carolyn Szczepanski

On the wall in LaVon Griffieon's kitchen hangs a portrait of her past: a black-and-white photo of her family's century farm, a trio of humble structures surrounded by a horizon of open land and cloudless sky.

But just adjacent to the snapshot, the south-facing kitchen window frames the troubling future: the all-too-real advance of an army of perfectly spaced, identically fashioned, subdivision houses pushing their way up from Ankeny, stopping just short of her property line.

Before the birth of her son, Griffieon says she was just a "little old farm wife," but in the ensuing two decades, she's come to learn that governing authorities have a disturbing tendency to view agricultural land and its incumbent natural resources as nothing more than a blank slate awaiting a more profitable use. It was in her living room in 1996 that a small gathering of farm and conservation advocates created an organization that would evolve into 1,000 Friends of Iowa. And, though she says she has enough land-use issues of her own to file five lawsuits a year to protect her own property from urban encroachment, she's got armfuls of economic studies, government documents and parcel maps to keep track of land-use issues throughout the state.

From the proposed Northeast Polk County Beltway to the planting of pharmaceutical corn, she's been around the block when it comes to "lunk-headed" decisions government bodies make in the name of economic development. But earlier this year, she caught a whiff of a plan that just "wasn't passing the smell test."

It started with a bill in the state legislature that would pave the way for Polk County and Des Moines Water Works to buy out Southeast Polk Rural Water District. While the county headlined the project with the prospect of reducing water rates for rural residents, the plan had a second, unsurprising goal: economic development. But, this so-called economic development plan had a particularly troubling vehicle, critics say.
To float the necessary bonds, the county went to hundreds of farmers and a dozen cities to get the entire district declared an Urban Renewal Area. And that, sustainable growth advocates say, raises all sorts of red flags.

"Basically, the entire face of rural Polk County will change because of that 5-0 vote," Griffieon says. "The mechanism is in place."

Of course, Tom Hockensmith, chairman of the Polk County Board of Supervisors, disagrees. Don't get him wrong, he says diplomatically, he's all for balancing growth by enhancing infrastructure that will facilitate development on the east side of the county. "But this initiative has kind of spun into a huge fear of, 'Here comes Des Moines mowing down our farmland and urban sprawl taking over all the rural areas in eastern Polk County," he said at a September hearing. "That's not what this initiative was about when we started it."

What this initiative is about is water and water alone, administrators emphasize. And, to be perfectly honest, Hockensmith isn't convinced opponents' concerns aren't a bit deceptive.

"You know, sometimes I wonder if some folks, that just are flat opposed to growth, are fully aware that Southeast Polk water, over the past few years, has become a barrier to growth and they'd like to see it stay in place," Hockensmith suggested at the hearing. "I guess I would question that."

But, with supervisors openly touting the plan as a means of economic development, with a huge swath of agricultural land now designated for urban renewal under the purview of a law that just happens to hold a wealth of tax incentive authority, sustainable-growth advocates have a few questions of their own.

Glenn Waterhouse's home burned to the ground on New Year's Day 2001.
As a resident of rural Polk County north of Bondurant, Waterhouse watched the fire department scramble amongst two-inch water lines that couldn't provide the water flow to keep his home from going up in flames. Then again, as a board member of the Southeast Polk Rural Water District, Waterhouse has been fighting plenty of fires himself as rumors swirled about the fate of the allegedly troubled water district.

There's been quiet grumbling about overpaid director with eye-popping benefits and questionable travel itineraries. There's been mounting dissatisfaction about a "good ol' boy network" that had left projects woefully mismanaged. And while the rumors of bankruptcy were greatly exaggerated, and the district still has well over $1 million in the bank, the threat of legal battles with growing cities oozing into their rural territory promise a stormy financial future.

So, with the director scheduled to retire in December 2004 and all the candidates for replacement demanding a hefty salary, the board was all ears when the county came to the table with another manager in mind: Des Moines Water Works.

The Board of Supervisors, Hockensmith says, had been bothered by the fact that the 2,400 customers of Southeast Polk Rural Water District were paying twice as much as their unincorporated counterparts in nearby Saylor and Delaware townships. Even Waterhouse admits his district's rates are so high he knows people don't hook up because it's simply too expensive, and the board has had no choice but to significantly hike rates several times during his six-year tenure. The unfortunate irony, however, was that the townships and the rural district shared the same water source. The only difference was, in the townships, Des Moines Water Works was at the helm, and in the southeast district the board was going it alone, staring down decades of debt.

But, with a purchasing plan, in which Des Moines Water Works would shell out $7 million and Polk County would toss in another $5 million, the rural district could save their customers a whole lot of money by selling out. With the changeover, economies of scale and consolidated workforce would make the whole system more seamless, Hockensmith points out, and restructuring the debt would save another sizable chunk of change. If all goes as planned, city and county administrators pledge, customers will see their water rates plummet by 50 percent.

To Waterhouse, that sounded like "the best benefit for the buck." No more hassle over mismanagement or difficult finances. Not to mention, with new developments springing up on both sides of his property, Waterhouse knows firsthand that the rural landscape the district was intended to serve isn't what it used to be. In fact, he's had his yard dug up twice in the past year to accommodate new developments hooking up to the system. And the real "kick in the teeth"? Because the housing developments can buy in bulk, the newcomers end up paying less than he does.

"I'm not wanting to see a whole bunch of houses around me, but it's happening already," he says. "The bottom line is, you can't stop development. It's going to happen. Polk County is just going to keep growing and we're kind of caught in the middle with our costs. So it's best to go ahead and get this accomplished."

Problem is, getting it accomplished involves measures even Waterhouse says were unforeseen, a measure critics say could wash away the remaining rural character with a flood of urban development.

Jim Elza can summarize the bid to buy the water district in two words: "excruciating process."

For the past two years, Polk County has been swimming against the current of traditional procedure, the county's land-use manager says, charting a new course as they went along.

First, Elza says, there was the little problem of the Iowa Code. Since it had never been done before, there was no mention of how a rural district could sell itself off to another entity. So, with Geri Huser at the helm, such a measure, allowing rural water boards to sell or dissolve themselves, was passed this session.

But reworking state law was only the first step. Next, the county needed a mechanism to issue the $5 million they'd committed. Generally speaking, general obligation (GO) bonds would spring to mind in such situations. But once again, Elza says the board members found themselves up a creek without a paddle: water, apparently, isn't important enough to meet the GO standards.

"For some weird, strange reason I can not even begin to imagine, water is not an essential county purpose," Elza explains. "So we had to do this excruciating process of creating an Urban Renewal Area."

Despite the eyebrow-raising fact that Urban Renewal was created to address "urban slum and blight," Hockensmith says the only option the supervisors had was the issuance of urban renewal bonds. For folks with fewer than 10 acres, the URA would be a done deal upon a simple vote of the board of supervisors, but for larger landowners, the onus was on the county to get the green space to opt-in. So letters went out to nearly 900 farmers enticing their cooperation with the promise of slashing their water bills. There were public meetings at two different high schools to address any concerns. "We even hired a guy to talk one-on-one with farmers," Elza says. "He must have answered questions on telephone calls for two months."

Hockensmith estimates "more than 400 landowners signed on." Elza says 300. Either way, with 2,400 properties served by the rural water district, even with landowners holding the title of multiple properties, to say the county got a majority of customers to consent is a stretch.

And, even as they reaped sufficient agreement from landowners to front the $5 million investment, the county had to sow support among the city councils of a dozen different municipalities, as well. Of course, with a history of legal battles with the rural water district as their city limits pushed outward, it took little convincing to get all 12 city councils to sign on.

Finally, after two years of legwork moving conception to creation, the Polk County Board of Supervisors voted 5-0 to turn the swath of agricultural and estate land into an urban renewal district last month. And with that, Elza emphasizes, the deal is sealed on the county's end.

"It's all done," he says staunchly. "This is like, the cow is out of the barn, or whatever. Everyone had their opportunity to say their piece. Heavenly days, we had meetings and meetings and meetings."

But critics say county officials keep repeating and repeating and repeating the same rhetoric that worries rural residents. After all, why go to all that trouble - lobbying legislators, changing the law, going hat-in-hand to hundreds of rural landowners and a dozen city councils - just to save a couple thousand residents some money on their utility bills? The answer, supervisors acknowledge, is the holy grail of government: economic development. But, some worry that, thanks to the URA designation, that could become a devil's contract.

Ask ISU economic scientist David Swenson to describe the evolution of Urban Renewal Areas and he'll tell the unfortunate tale of an innovative tool to revive city slums that has been twisted into a cynical system exploited by greedy governments.

The stage was set in the 1950s and '60s as investment fled to the newly conceived suburbs, and abandoned inner cities began to crumble. Perceived as a huge market failure, Swenson says, legislators attacked the problem by creating a means to recover city slums through "a declaration of emergency, a declaration of blight," that would trigger a whole host of tax incentives and municipal authorities that would entice economic revitalization.

But what started as a dramatic decree that had to be preceded by a quantifiable need, was essentially dumbed down in the 1980s to give development-hungry administrators the right to use urban renewal to woo housing developments and business recruitment. Swenson says the previously harsh criteria has been watered down drastically, allowing entities like Polk County to now look out over a rural expanse of eastern Polk County and invoke urban slum.

"They lowered the criteria to literally saying, 'Eh, we need Urban Renewal because we need economic development,'" he says. "If you read the code, it's quite dramatic, but what they did was say, just economic development is good enough."
County administrators don't deny the purchase of the rural water district is a concerted attempt to prime the pump for development. In fact, the very first line of the Urban Renewal Plan doesn't so much as mention the word "water."

"This Urban Renewal Plan has been developed to help local officials promote economic development in Polk County," the document reads. And while "the primary objective" is to facilitate the purchase of the rural water district by Des Moines Water Works, it continues, "the project will also significantly increase the overall development potential of the area and allow for new growth."

And to hear supervisors assess the situation, you'd think Polk County were sitting on a see-saw with the lopsided development out west ready to catapult the still-rural eastern region clear off the map. God bless Dallas County, Hockensmith says, but if the tax base keeps hemorrhaging west and the core of the metro area continues to bleed past Windsor Heights instead of settling in the heart of Des Moines, Polk County is going to have serious problems providing services in the long term.

"If we as elected officials continue to sit idly by and watch that, I would consider that to be irresponsible," Hockensmith explains. "I'm not talking about, 'we have to be like the West Side,' but I'm talking about where we have the opportunity to grow, whether it be job growth, retail growth, residential growth in the areas adjacent to those communities, we have to have the proper infrastructure in place."

So when the county first floated the idea of Des Moines Water Works buying out Southeast Polk last year, L.D. McMullen, general manager of Des Moines Water Works, says rural water rates weren't the first topic of discussion.

"The county had talked to us about how we could end up with more balanced growth in the metro," he says, "with not all the growth going west, but going east, as well."

Why go to an engineer for advice about economic development? Well, ask any city planner what they need for growth, McMullen says, and they'll tell you three things: roads, sewers and water. In that southeast area, he says, "water was the only thing left."

"Rural water systems are designed primarily for farmers and scattered development rather than concentrated urban development," he explains. "Different systems operate differently, and some people's thoughts were that needed to be more of an urban area and, as a result, they need urban water standards."

Such standards would certainly make life easier for Chad Quick, planner for the Altoona community development department. Several years ago, his city was mired in a lawsuit with the rural water district that ended up costing the city $450,000. And even with that case closed, Elza says such legal wrangling has become an increasing concern for cities growing into the rural district territory, and that certainly figured into the county's buy-out intentions.

The thing is, development is already happening, Quick emphasizes, with the eastern section of the county littered with one-acre lots - something most experts agree is poor planning. Hockensmith had a similar reality check for the attendees at the September hearing, telling the crowd with a hint of frustration in his voice: "Take a drive around out there, folks. Outside of the communities up and down the beltway - Pleasant Hill, Bondurant, Altoona - the areas east of those communities are not rural." In fact, according to the county's public works department, a total of 641 permits for residential buildings collectively valued at $96.6 million, were issued for the unincorporated areas of Polk County just between September 2002 and the end of last month.

"So, yes, some farm ground will be eaten up and used as residential and commercial development," Quick says. "But growth is going to happen, and we see this as a better use of the land than development as one-acre lots."

And to be perfectly honest, Hockensmith isn't convinced opposition to the URA isn't just an anti-growth minority grasping at straws to suit an unrealistic agenda.
"I'll tell you this," he adds. "I know that some folks out there are wise enough to know that the rural water district has been a barrier to growth. And if you're anti-growth period, if you don't want any growth, don't want any communities to grow at all, wouldn't you want to see that barrier to stay in place?"

On the other hand, critics counter, county officials are likely wise enough to know that an urban renewal area holds the authority to lavish developers with a host of tax incentives. And if you're pro-growth period, if you've worked for two years to pass legislation and collect signatures and lobby city councils, wouldn't you be tempted to see that measure used to its fullest potential?

When Gerald LaBlanc says "Mr. Hockensmith," it almost sounds like a four-letter word.
To think his neighborhood has been effectively labeled an urban slum in the name of economic development, is enough to make his blood boil. In fact, he felt so hoodwinked after the supervisors' unanimous vote last month that he picked up the phone and filed a complaint with the state ombudsman.

"There have been no problems at all," he says of his water service. "The thing is, is that Mr. Hockensmith and the Des Moines Water Works want to take over the water in order to have commercialization over here in eastern Polk County. And my neighbors, we're all opposed to it. Now, he has a carrot here. He has bait and that is the lower water rate. But with that little, tiny, lower rate, they're going to have much larger water pipes for commercial development, and we do not want commercial development over here."

When he moved to his home midway between Altoona and Mitchellville 35 years ago, he could look all around and the only other building was a farmhouse across the street. And, no matter how many times administrators promise "orderly development," no matter how many times they say their plans are constrained to the water buy-out, the Urban Renewal Plan makes many rural residents uncomfortable.

Rebecca Holdridge is also among those holding their breath. When she and her husband moved to their home east of Ankeny 32 years ago, they were seeking the "peace and quiet of living out where we had space." In the ensuing years, their neighborhood has become a close-knit community, and Holdridge not only has the keys to her neighbors' homes, but also speaks for their association at public meetings. And while she's on the wrong side of the street to be part of the rural water district, plenty of her neighbors are, and a reduction in their monthly bill, she says, pales in comparison with even the risk of a reduction in their quality of life.

"I can't speak for everyone," she says, "but these people could care less about water rates. They don't want this turning into something further and eating up more land."

And both Holdridge and Waterhouse say that, while the law will remain the same, the county has been billing the management change to surrounding cities as a means of easing their growing pains.

"The county representatives had to go to each town, to the cities' council meetings," Holdridge says. "And it's been said out loud that, 'This would make your annexations go smoother.'"

And for some, like Holdridge and her neighbors, who collectively have spent thousands of dollars on legal representation in the past two years alone to remain free of the Ankeny annexation, that's a cloudy forecast. With adequate water lines no longer a complicating factor, LaBlanc is worried developers will be more inclined to turn their attention to his neck of the woods and then look to Altoona or Mitchellville for annexation. Having moved to his property to be free from the constraints of the city, he doesn't want to get swept up in that.

And it's not just residents who are worried. Already a victim of urban encroachment, the Dragoon Trail Chapter of the Izaak Walton League was recently forced to move their facility south of Elkhart when urban encroachment turned their trapping range into a shrinking conservation island in the middle of Ankeny's burgeoning development. And now, with the designation of the urban renewal area and a concerted emphasis on economic development, board members are concerned that conservation efforts - like the $5,000 grant they recently received for wetlands construction - will be at a further disadvantage.

Of course, with growth already on the march, Hockensmith professes, "We have a chance to do something different in eastern Polk County." He emphasizes that he doesn't have visions of West Des Moines springing up on Polk County's east coast. But, if that's the case, critics ask, where's the plan to keep the eastern corridor from turning into another incarnation of West Des Moines?

Swenson, for one, asserts that, while cities have the infrastructure and services to support their development desires, when even good-intentioned counties get in the game, it's often a losing proposition for sustainable development.

"Most of the economic development county governments are engaged in is not conducive to organized growth," Swenson asserts. "It's sprawl. It's sporadic. It's spotty. And it's often highly subsidized for rural businesses that otherwise would not be developed."

And absent a roadmap, Jonna Higgins-Freese, director of 1,000 Friends of Iowa points out, there's no assurance this new round of development won't detour into the model of the western suburbs.

"I applaud their concern for orderly development," she says. "But I haven't seen any evidence that they intend to do this development in a way that would be fair and healthy for the whole community. There aren't any details as to what would make this development different, and, in absence of that, I'm not convinced that this won't be different."

And, the Urban Renewal designation only further heightens her concerns.
"Urban Renewal legislation was not designed nor intended to be used to subsidize new development on the fringe," she says. "And from our perspective, it's always a concern to us when urban renewal is a designation given to an area that's currently a green field."

Some legal experts agree that the urban renewal designation for such a project is certainly unusual. Current counsel for the district couldn't be reached before publication, however Louis Rosenburg, a San Antonio, Texas, attorney who represented the rural water district in the Altoona litigation and has handled similar issues in a number of states, says he's "fascinated that it's even involved."

The reason for the trepidation is the traditional use of the URA has generally been as a vehicle for a slew of tax incentives, including increasingly controversial tax increment financing (TIF). In a TIF district, the majority of the tax revenue is plowed back into that specific area, effectively depriving the wider region of funding that amounts to tens of millions of dollars each year across the state. While the idea makes sense in a slum area desperate for an economic jumpstart, TIFs have also been extended in recent years to arguably less-deserving entities, like the up-scale Glen Oaks gated community in West Des Moines and the Jordan Creek Town Center mall.

"It's a very cynical system now," Swenson says. "In rural areas it's the sort of guys who want to put out a designer golf course and build houses next to it. The county sees it as an upscale luxury development opportunity, and declare that area an Urban Renewal Area. So you convert beautiful farmland into a beautiful golf course with quarter-million-dollar houses around it and use TIF to jumpstart the development of those great big houses."

But such talk frustrates Elza to no end. "There is no TIF," he repeats three times for emphasis. "There's this idea that, 'Well, they're going to do more than just water.' Well, not exactly. There's a large gamut of activities you can do [with an Urban Renewal Area], but we just needed it to do water. We agreed to do just that in the statement of every farmer who signed up. It just said water. We just had to use this law to get there."

If they want to change the terms - which currently say "tax increment financing will not be used" - they'll have to go through the whole "excruciating process" all over again, Elza says. But when critics read the plan they see something different. They see the clause that states "this Urban Renewal Plan may be amended from time to time to add or change land-use controls or regulations, to modify types of renewal activities or to amend property acquisition and disposition provisions." They read, with concern, the line that states "the board of supervisors may amend this plan by resolution after holding a public hearing," and wonder what might come next. Maybe this board will keep to the current plan, but what of the next round of elected representatives, who might be looking out over a far more built-out landscape, rife for such tax incentives?

"One slam of the gavel and the whole plan can change," Griffieon worries. "One slam of the gavel and we'll be reading it in microscopic print in the legals [section of the newspaper]."

And while the area has been designated specifically to complete the water project, residents say they haven't been able to get a straight answer from supervisors about the duration of the urban renewal designation. Elza says the area will "probably" be dissolved when the bonds are retired, but the plan itself states the urban renewal area will remain on the books until "it is repealed by the board."

"So if you're slated as an urban renewal area, I've got a feeling it's like a Chinese finger trap; the harder you pull, the tighter it gets," Griffieon says. "I don't think there's any going backwards."

And, even if future supervisors don't take advantage of the tax incentive opportunities, even if the sole result is to promote orderly development around the edges of already burgeoning communities and reduce water rates for burdened rural residents, rural advocates like Griffieon, see the issue as just another example of the widening gulf between rural folk and representatives who are their only voice in local government, but prioritize development over agriculture nine times out of 10.

"These are the only elected representative that farm folk have," she says. "But when they drive by my farm they don't see that our cattle, hogs and chickens are my factory. They see the fields and think it is land sitting and waiting for a higher use to bring in more dollars. [Polk County Supervisor E.J.] Giovannetti once told me that I would have to prove to him that farmland paid its way. I keep trying to tell him, but he isn't listening."

That disturbing disconnect, critics point out, was painfully evident in the evolution of this plan. There was a fight during the legislative session to include language that would even alert rural district customers that their district was being sold, and even at the public hearing in September some citizens felt they were getting the cold shoulder.

"It was somewhat disappointing," Holdridge says. "I felt that some members acted defiant in turning their heads away when members of the public stood up and spoke."

And speaking of public input, some suggest supervisors might have been well served by waiting for the completion of the new Comprehensive Plan that citizens are working so diligently to wrap up by the end of the year. But Elza counters, "Why wait?"

"If you don't know if you can extend water into rural water area for higher density city development, how does that help you do your plan?" he says. "I would rather know that I could do that when doing the plan, that there will be the ability to do all the infrastructure."

But to comprehensive plan committee members like Griffieon and advocates like Higgins-Freese, that knowledge doesn't sound like a helping hand; it sounds like stacking the deck.

"To use somewhat strong language," Higgins-Freese told the supervisors at the September hearing, "this makes a mockery of the time and effort citizens have put in to that."

As Waterhouse points out, however, citizens might still have some say in the final decision, as the board still has to hold a public hearing for its customers and take a final vote, likely before the end of the year.

"I'm hoping that we're all working in good faith here," he says. "We have to have a public hearing and make sure we iron everything out so we know this isn't something we're going to look back on and think, 'Why did we do that?'" CV

Comment on this story | Return to top