116 3rd St SE
Cedar Rapids, Iowa 52401
When a 51,000 square-foot casino opened in Riverside, surging tax revenue created a windfall for the small southeast Iowa town, about a dozen miles south of Iowa City.
The Riverside Casino and Golf Resort, which opened in 2006, quickly became a game changer for the community of 1,040 with little beyond a couple of gas stations and a bar and grill. Riverside built a new fire station, renovated the old station into a new city hall, constructed a waste water plant and lowered property taxes, among other uses of the new money.
But as the budget soared five times larger than pre-casino, the stakes grew and so did distrust and tension within the city, which has led to turnover among city staff.
"That's where some of it starts," said Chris Kirkwood, a city council member. "If you don't have anything to fight over, you don't fight. All of a sudden, you get some money and everyone fights."
Over the years, the political strife has mounted.
Residents and officials have clashed over a community splash pad, which was approved and a week later vetoed by Mayor Bill Poch, in 2012. The City Council voted to install panic buttons in city hall after a former city clerk said she was threatened by a resident calling for information about an audit.
City officials and residents spar over issues at packed City Council meetings, which get recorded by the city and members of the audience.
"I've worked with a lot of communities, and I've never seen a city as divided as Riverside," said Jeffrey Schott, director of the University of Iowa Institute of Public Affairs and the former city manager of Marion who consults for municipalities.
A year-long special investigation by the state auditor released in December, which said there was $64,000 in improper spending and $274,000 in unauthorized disbursements from 2006 to 2012, captures some of the turmoil. Some defend the city staff members named in the audit, most of whom are now gone, citing increased workload and complexity due to growth, while others suggest staff were running the city without permission.
No criminal charges have been filed.
Budget 5 times bigger
There's no question the city has grown substantially in recent years.
The general fund budget jumped from $267,292 in 2005 to $1.55 million in 2013. When factoring in construction projects, the city budget topped out at about $12 million in 2007.
At the beginning of this time frame, day-to-day operations were run by a city clerk and one person to deal with outside the office issues, such as parks and streets. Now there's a city administrator, a city clerk, a part-time utilities billing clerk, and three total employees for streets and parks, water and wastewater.
Tom McLaughlin has become a thorn in the side of the mayor and city administration with his blog, "Your Riverside Forum," and radio program, "Talk of Town," which he broadcasts on AM 1690 with his neighbor, Jeff Showalter, the day after city council meetings from Showalter's home.
McLaughlin, who is skeptical about city spending, has said city hall hours aren't always honored, and he has a difficult time getting information, such as fund balances in city coffers. At the most recent City Council meeting, McLaughlin was voted off the planning and zoning commission at the request of Poch, who cited the blog as one of the reasons.
McLaughlin traces discord to new money from the casino and deciding what projects the city should pursue, such as the splash pad - which he supported - or save.
City Council grudge match
At City Council meetings, small matters quickly escalate, and many decisions are decided by the same 3-2 split.
Council members Kirkwood, Nate Kasdorf and Kevin Kiene, who was voted out in the November election, generally sided together. They supported the previous city staff, and have been critical of the current city administrator.
Council members Ralph Schnoebelen, Bob Schneider and newly elected Tom Sexton typically vote together, which has swung the balance of power to council members who are more supportive of the current leadership, lead by Rusty Rogerson, the city administrator and economic development director.
Mayor Poch, who does not vote, is supportive of Rogerson.
"It's been going on for quite some time," Nick Smith, a former Highland school board member who lives in Riverside, said of the tensions. "To be honest, I don't understand it. They all seem like nice people, good citizens.
"I don't understand why it's grown into this faction ... . They are all here in town. They all like Riverside, and yet there's this friction, and the public has been divided in half."
Rogerson, who was hired in 2012 and requested the special investigation at the urging of Poch, has been a target of criticism.
At a Jan. 6 meeting attended by The Gazette, he was hammered on decisions, such as giving a staff member a $3 an hour raise, paying for staff training and giving a vacation package that resulted into having to payout 84 hours of unused vacation time. During the meeting, Rogerson, a former Iowa prison warden, told the council he needed to "cover his (expletive)" to protect himself, and after one series of questions threatened to resign.
And this was a fairly tame meeting, several residents and city officials said.
"People are more active politically," Rogerson told The Gazette. "We have a generation now that wants transparency, and they want answers. I don't think Riverside is very different."
Change in government
Rogerson said the city is actually in pretty good shape and has more than $600,000 in reserves. The city annual budget shows the general fund had a positive balance of about $1.9 million at the end of fiscal 2013, about $100,000 more than the end of fiscal 2012.
Now the general fund balance is at $2.7 million, he said.
While times are pretty good financially, the potential new casino in Cedar Rapids, as well as an expiring $1.75 million annual gaming tax provided by Riverside casino as part of an annexation agreement, weigh on budgeting decisions, Rogerson said.
The change in form of government when Riverside created the city administrator position in 2008 factors into the tensions.
In many cities, a city administrator makes decisions for the day-to-day operations of a city guided by overall priorities set by the council.
The UI's Schott said while the tensions may be high right now in Riverside, cities such as North Liberty and Washington have also gone through challenging transitions when inserting a city administrator into its government. It may take a while to spell out who has authority for which decisions, he said.
No end in sight
Poch said he brought in a consultant two separate times, including Schott, to help city council members learn to work better together. But the council quickly reverted to old habits, he said.
Poch said he believes the city council members need stop "micromanaging" and trust how the city is being run on a day-to-day basis. Their focus should be on the overall direction of the city, he said.
"It comes down to communication," he said "The city administrator communicating with council. You have to make the city council in any community feel like they are in charge, which they are, which will make your job easier."
At the end of the day, Poch said the tension has driven out city staff and creates a negative stain on the community, which is hurtful to residents.
Councilman Nate Kasdorf admits he doesn't believe Rogerson is earning his paycheck, which was recently increased to $58,808 annually. He disagreed that problems in city hall are due to growth. He points out that the city's population hasn't really changed - 943 in 2005 and 1,040 as of 2012.
Kasdorf said the frustrating part is there is no end in sight to the tensions because there's fundamental disagreements and neither side is ready to back down.
"It's like the Hatfields and McCoys," he said.