Mayor: Council Bluffs missed $4.3 million from Google over utilities ordinance that didn't follow state law

COUNCIL BLUFFS, Iowa (KMTV) — Council Bluffs missed out on $4.3 million in revenue from Google in 2024 because of an old utilities ordinance that Mayor Jill Shudak says wasn't even legal. At the mayor's town hall Thursday, neighbors also expressed concerns with the city's management of a 2009 tax abatement for the tech giant.

UTILITIES FRANCHISE FEE

Everyone who buys electricity pays a franchise fee. That fee, the mayor explained, goes to the city for the use of its land for things such as power lines. Shudak says the fee is supposed to be the same for everyone, but that wasn't the case.

"Google's rate was held at 2% no matter what everyone else paid," Shudak said.

She says the city's outside counsel determined the 2011 ordinance, which created the carve-out for Google, is not allowed under Iowa law. It was recently corrected by the city council.

"Lifting that cap means one rule for everyone," Shudak said.

PROPERTY TAX EXEMPTIONS

The city is also reviewing the two 20-year property tax abatements given to Google for its Southlands development in 2009.

"So, that deal has been good for Council Bluffs, but it could have been better," Shudak said.

The mayor says that instead of just two, 20-year abatement plans for "Phase 1" and "Phase 2" of construction, a new 20-year clock was started each time there was new construction on the site — a total of 14 different 20-year clocks.

"The fix is simple. One clock per phase. Exactly as the 2009 agreement says," Shudak said.

Neighbor Steve Riso wanted to know if the city could get any of that money back.
"Those taxes, that are not being clawed back from Google or whomever, would have had an impact on our taxes, I would think," he said.

Shudak says the council recently corrected the issue, but she doesn't know if the city can recoup the money from past years.

"Our outside counsel, our financial firm that we're working with, we have to identify that dollar amount and then the next step is what are our options," she said.

The mayor says the city will put processes in place to ensure this does not happen again.

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