Atlantic City Council Approves Purchase and Demolition of Hazardous Hazel Street Property

(Atlantic) The Atlantic City Council has approved the purchase of a home at 910 Hazel Street, which was designated a dangerous building, during its regular meeting on Wednesday. Mayor Rob Clausen announced that the city will acquire the property for $7,500 and plans to demolish it, with the current residents scheduled to relocate.

Atlantic City Administrator John Lund says 910 Hazel was in disrepair when he arrived in Atlantic City in 2011. Lund says that at that time, City Attorney David Wiederstein and Lund both dealt with this property when the former owner refused to remove the collapsing front porch. Since that time, the property’s decline has accelerated to the point that the structure is a serious threat to the safety of anyone inside or near it and is far beyond repair. Animals are coming and going freely. The structure needs to be sealed and then promptly demolished, according to Kaliegh Koch and Kris Erickson.

Atlantic City Councilman Jeremy Butler stated that purchasing a property like this is more economical for the city than going through the condemnation process. He says it also gives the current occupants some money to help in the relocation.

Additionally, the City Council approved an order to designate Kris Erickson as the City of Atlantic Building Official. According to City Administrator John Lund, this agenda item has been forwarded to them by the Assistant City Attorney, Kaliegh Koch. Atlantic Code Chapter 145 is the Dangerous Building section. Under it, a “Building Official” is referenced, and it states that to enforce Dangerous Buildings designations, the Council must formally appoint the official. Lund says Kris Erickson serves as the City’s Code Enforcement and Animal Control Manager, and is the natural choice for this title.

In other business:

*The City Council approved Dan Vargason, one of the area’s local fireworks specialists, to conduct a small and brief fireworks display on July 14, 2026. This display would take place if the Atlantic Softball team hosts the regional softball final and wins, qualifying them for the state tournament.

*The Atlantic City Council approved Resolution #34-26 “Reclassifying Funds, Establishing New Funds, and Authorizing Transfer of Fund Balances In Accordance with GASB 54.” Lund says an internal review identified several long-standing funds currently classified under the General Fund that should be reclassified as Special Revenue, Capital Projects, or Fiduciary Funds in accordance with GASB Statement #54. The assessment was reviewed and agreed upon by our principal auditor, Dustin Veenstra of Gronewold, Bell, Kyhnn & Co. PC.

Special Revenue Funds

Special Revenue Funds account for resources restricted or committed to specific purposes. Examples include:

• Hotel/Motel Tax (Iowa Code §423A.7) – restricted to tourism-related purposes.
• Local Option Sales Tax (LOST) (Iowa Code §423B.10) – restricted to referendum-approved uses.
• Gift Funds – segregated donations overseen by the relevant Department Head, ensuring transparency and public trust (e.g., Police Gifts, Fire Gifts, Animal Shelter Gifts).

Reclassified Special Revenue Funds

Capital Projects Funds

These funds are tied to capital expenditures rather than operating costs.

Fiduciary Funds

Fiduciary Funds account for resources held in trust for others and cannot support City operations.

• South Lawn Cemetery – jointly managed by Cass County, the City of Atlantic, and Grove Township for perpetual care.

Conclusion:
Lund says these reclassifications ensure that our financial reporting aligns with substance-over-form accounting and accurately reflects the use and management of City resources.

* The Atlantic City Council approved the City to establish the FEMA Disaster Recovery Capital projects Fund, and provided for its purpose, funding, and use. Disaster response and recovery are increasingly important responsibilities for local governments. Major disasters across the country—including Hurricane Katrina, Hurricane Sandy, Hurricane Harvey, Hurricane Laura and Delta, and the Paradise wildfire—have demonstrated the significant financial challenges communities face after catastrophic events.

Iowa communities have also experienced major disasters, including the 2024 Greenfield tornado and Spencer flooding; the 2020 derecho; the 2019 Missouri River flooding; the 2018 Marshalltown tornado; the 2008 Parkersburg tornado; and widespread flooding across eastern Iowa in 2008.

Following a federal disaster declaration, FEMA Public Assistance typically covers 75% of eligible recovery costs, with the remaining 25% shared between state and local governments. However, FEMA operates as a reimbursement system, requiring cities to pay 100% of costs upfront and wait months or even years for reimbursement. This creates significant liquidity pressure, particularly for smaller communities.

FEMA also imposes strict compliance requirements for procurement, timekeeping, and documentation, with repayment required if reimbursements are later found to be improper.

To address these challenges, the City is creating a dedicated FEMA Fund to provide a clear audit trail and establish a disaster liquidity buffer. The final funding target will be determined through a new asset management inventory and actuarial analysis of potential disaster risks. For now, the fund will be seeded with $875,000.

*The City Council approved June 17, 2026, at 5:30 p.m. as the date to amend the 2026 budget.