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home : news : news Saturday, June 25, 2016

2/22/2014 Email this articlePrint this article 
LincolnWay foundation still ineligible for CCDA grants despite waiving fee

By Jeremy Huss
Staff writer

The LincolnWay Community Foundation has eliminated one roadblock preventing its affiliates from applying for grant funds through the Clinton County Development Association (CCDA) by agreeing to waive its administrative fee for those grants, but CCDA officials say those organizations still aren't eligible for funding.

CCDA previously ruled the LincolnWay Community Foundation affiliates are ineligible for funding because the parent organization, Great River Bend Foundation, collects an administrative fee of one-tenth of 1 percent of LincolnWay revenues.

That decision prevents groups such as the Central Community Schools Music Boosters, the DeWitt Police Foundation and any of the other 14 organizations under LincolnWay's umbrella from applying for gaming grants through CCDA.

In a discussion with foundation representatives in November, CCDA board members said they were uncomfortable with the idea of a "middleman" taking a cut of the money awarded to foundation affiliates.

At a Feb. 19 meeting, CCDA president Tom Fullerton said he received a letter from LincolnWay Community Foundation president John Peavey stating the foundation's board of directors has agreed to waive its fee for CCDA grant applications.

"The issue now is they'd like their affiliates to be able to apply, and under the new guidelines, their affiliates don't have the right IRS designation . . . They don't have a status that fits into our guidelines," Fullerton said.

Fullerton said CCDA member Les Shields is researching the matter but is out of the area until March. He said the problem is LincolnWay affiliates don't have an employer identification number the IRS requires to track nonprofit funding.

"As I understand it, the issue is something with a tracking number, and if these organizations were stand-alone they wouldn't qualify," said board member Matt Stammeyer.

Fullerton said foundation affiliates have an Iowa nonprofit designation but not a federal nonprofit designation.

"It's more of a policy issue than a tax issue," he said.

However, board member Jim McGraw said CCDA needs to be careful to award funds only to organizations that meet IRS nonprofit guidelines to avoid tax implications.

Fullerton indicated one solution to the issue could be a written agreement between CCDA and the LincolnWay Community Foundation.

McGraw asked if that agreement would also allow the foundation to endow money to CCDA.

"I'm against this two-party funding," he added.

Board member Alice Schnepel said she wants an apology from the author of a letter to the editor that was critical of CCDA's decision to reject grant applications from foundation members.

The letter in the Nov. 30 issue of The Observer from former DeWitt resident and LincolnWay Community Foundation board member Gaylon Heetland criticized CCDA for "trash(ing) our local foundation for having a tiny percentage that is needed for overhead."

CRDC courting railport prospect

The Clinton Regional Development Corp. (CRDC) is courting a third prospective company to locate in the Lincolnway Railport, CRDC director Mike Kirchhoff said during the organization's annual report to the association.

CCDA has committed $2 million to the railport project and has paid out half that amount to date.

Kirchoff highlighted three successful projects in 2013: the expansion of Data Dimensions at the Lyons Business and Technology Park and the addition of Rail.One and Nevada Rail Materials to the railport.

The companies estimate the projects will invest $38.7 million in the community and create more than 200 jobs.

Clinton County Bio Energy is planning a plant expansion at the railport that will create five jobs, and CRDC is working to recruit a New Jersey chemical firm that blends chemicals for the cosmetics industry, Kirchoff said.

If the recruitment is successful, the company will build a 50,000-100,000 square-foot plant on 10-20 acres and create an estimated 50 jobs, Kirchhoff said. The chemical firm would use up to 3 million gallons of water per month.

Kirchoff said water supply is the last major piece the CRDC needs to become a state-certified development site, which officials believe will help the region attract additional business investment.

The least-expensive water option is an on-site well for approximately $1.5 million, Kirchoff said, compared with a $3 million cost for extending city water service to the railport.

CRDC also is lobbying for a change to state law that prevents Iowa American Water and other private utilities from extending water prospectively.

In 2014, CRDC plans to continue national and international marketing efforts, including a trip to Germany with Rail.One officials to try to recruit more German companies. German firms like to "cluster" when they locate in the United States, Kirchoff said.

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