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FY2019 Budget At-A-Glance1 2 3 Provide resources to make significant progress in implementing City Council’s Strategic Plan priorities and adopted Master Plans Respond to property tax reform changes while maintaining service levels for a rapidly growing and increasingly diverse population Maintain an affordable tax and fee environment for residents and businesses Preparation of the City budget was guided by the City’s primary financial goals: ►Priorities determined by Strategic Plan ►Budget guided by clear financial goals ►Focused on a sustainable, multi-year financial model ►Adopted property tax levy rate, $16.18 per $1,000 of taxable value • Rate decrease of $.15 from FY2018 • Seventh consecutive rate decrease Fiscal Year 2019 Budget Summary The budget is one of the most important documents the City prepares because it identifies the services to be provided and the mechanisms that finance those services. This Budget At-A-Glance document summarizes the City’s budgeting methods, highlights revenues and expenses for Fiscal Year 2019 (FY2019) and provides an outlook for future years. July 1, 2018 to June 30, 2019 City of Iowa City FY2019 Budget At-a-Glance 1 Promote a Strong and Resilient Local Economy 1 Encourage a Vibrant and Walkable Urban Core 2 Foster Healthy Neighborhoods throughout the City 3 Maintain a Solid Financial Foundation 4 Enhance Community Engagement and Intergovern- mental Relations 5 Promote Environmental Sustainability 6 Advance Social Justice and Racial Equity 7 The current Strategic Plan is available at www.icgov.org/strategicplan This Fiscal Year 2019 budget was prepared with a strategic plan serving as a guide. The City recognizes the shared relationship between funding decisions and the organization’s prioritized plan. As a result, this budget aims to provide resources that accomplish the following objectives: 1. Maintain the City’s core municipal services at levels that meet or exceed community expectations and the City Council’s strategic plan goals, and 2. Direct flexible funding to projects and initiatives that align with the stated priorities of the Strategic Plan, and 3. Continue to strengthen the City’s strong financial foundation and enhance the budget document through use of best practices in the industry. The following are the strategic plan priorities and initiatives that were adopted by the City Council along with the Fiscal Year 2019 budget. In 2017, the City adopted the Parks Master Plan and the Bicycle Master Plan. Each of these documents were developed through significant analysis and extensive community engagement. The identified Plan actions directly inform the Budget and Capital Plan priorities. icgov.org/ParksRecMasterPlan | icgov.org/Project/Iowa-City-Bicycle-Master-Plan 2 Strategic Plan and the Budget Strategic Plan Priorities The Council’s Strategic Plan, updated every two years, intends to foster a more Inclusive, Just and Sustainable Iowa City. 1 Continued Response to 2013 Property Tax Reforms As the taxable percentage of multifamily rental property values continues to be reduced, the pressure on the budget will increase. The City’s ability to fund new initiatives, maintain service levels, and decrease the tax levy rate through reductions in the debt service levy is principally due to the robust growth in taxable valuations in recent years. This growth has offset the losses associated with the first three years of property tax reform implementation but it is unlikely that the community can sustain the same level of valuation growth through the final years of the implementation period. State property tax backfill payments currently total $1.68 million annually. This budget is crafted anticipating the real eventuality that the State Legislature will end backfill payments to balance the State budget after years of missed revenue forecasts. 2 Sharp increases in property taxes or fees for services can have a significant impact on families’ monthly budgets. We pursue efficient service delivery, review fees annually, and maintain adequate reserves in order to avoid severe, immediate impacts to residents’ household finances. Maintaining a stable environment for the controllable costs of doing business in our community helps to create an atmosphere conducive to business development and expansion. In FY2019, there was a water rate fee increase of five percent. Maintaining a Moderate Tax and Fee Environment for Residents and Businesses Planning for a Solid and Sustainable Future While responding to the Council’s Strategic Plan will always remain a top priority, we must also consider the additional demands being placed on our core municipal services due to large population growth. This budget provides resources to meet some of these increased demands through additional staffing and efficiency measures. Some examples include: two new sworn police positions, a waste and recycling collection route optimization study, installation of automatic locks on park restroom facilities, and a comprehensive analysis of transit routes and hours of operation. The City’s financial health remains strong and our reserve levels provide sufficient flexibility in the event of unexpected conditions. It should not be assumed that the current level of growth will be sustained in the future years. Any softening of growth will place more pressure on the City’s budget as tax reform implementation will continue for the next several years. For this reason, it is imperative that the City continue to push forward with cautious budgeting and strong reserves that can help soften the blow of sudden revenue losses or expenditure jumps. With this approach, the City will be positioned to achieve long-term goals. 3 3 *Property taxes based on house value of $100,000 * General Fund Highlights 4 The General Fund is the City’s primary operating fund and represents approximately 32% of the total budget, a view of General Fund revenue sources can be viewed in the pie chart to the right. On the expense side, General Fund operations largely consist of personnel expenses. In the FY2019 budget, 72% of General Fund expenditures are personnel related. A view of General Fund expenditures by category can be viewed in the pie chart below. The General Fund FY2019 budget also incorporates new programs and initiatives intended to address the City Council’s strategic plan priorities, including those that meet sustainability, inclusivity, and social justice goals. Items of note include: ►Increases to local food initiatives ►Expands community garden program to three new locations ►Continues to provide micro-loan resources and funding for small business incentives ►Provides for a city-wide retail attraction consultant ►Continues the historic preservation grant program aimed at facilitating reinvestment in historic districts ►Provides for two $500,000 tax increment financing grants over two years to restore the Englert Theatre and elements of the FilmScene building at the 1870s Packing & Provision site. ►Gives $1,000,000 to Affordable Housing Fund ►Provides $385,000 for the form based code development project ►Provides funding for the capital contribution to the County Behavioral Access Center ►Increased funding for the racial equity grant program and disproportionate traffic stop analysis ►Provides funding for the Climate Action Plan implementation ►Funds two police officer positions allowing for expansion of community policing and code enforcement efforts General Fund activities include the following departments and activities: City Council City Clerk City Attorney City Manager Finance Police Fire Neighborhood & Development Services Parks & Recreation Library Senior Center Public Works Transportation Services Administration • Melrose Avenue Improvements • Mercer Park Pool Improvements • Wetherby Park Bathroom and Shelter 2021 • Highway 6 Trail (Sycamore to Heinz) • Chadek Green Park Improvements • Dubuque Street Reconstruction (Iowa to Washington) • Iowa River Trail (Benton to Hwy 6) 2022 • Kirkwood to Capitol Street Connector • Transit/Equipment Facility Relocation • Upper and Lower City Park Shelters and Restroom • Court Street Reconstruction 2018 • Clinton/Burlington Intersection & Road Diet • Public Works Facility (Phase 1) • Pedestrian Mall Rehabilitation • Creekside and Cardigan Park Development • Climate Action and Adaptation Plan 2019 • Willow Creek Park Redevelopment (Phases 2 and 3) • Highway 1 Trail Extension (Sunset to Mormon Trek) • McCollister Boulevard (Gilbert to Sycamore) • First Avenue Water Main (400-500 Block) • Behavioral Access Center Capital Funds 2020 • American Legion Road (Scott to Taft) Capital Improvement Plan (CIP) Highlights The capital budget for fiscal year 2019 totals $28,553,570 and the five-year Capital Improvement Plan (CIP) totals $159,796,096. Many of the CIP projects in the five-year period improve the local transportation network and municipal utility system. The five-year program continues to reflect the City Council’s priorities established in previous fiscal years, including implementation of the Parks and Bicycle Master Plans. Summaries of the Parks and Bicycle Master Plan projects are provided on pages 5 and 6. Examples of other significant projects planned for the coming calendar years include: *Although projects are planned to begin in the listed year, many will span multiple years For more information about the Iowa City budget, you can find the full budget document and historical budget documents at www.icgov.org/budget Debt Service Fund Highlights 5 The State of Iowa limits City debt to no more than 5% of the total assessed value of taxable property within the corporate limits as established by the City Assessor. The budget anticipates an outstanding debt of $64.6 million at FY2019 year end, which is 1.1% of total valuations and well below the State of Iowa threshold. Adherence to responsible debt management is attractive to rating agencies such as Moody’s, and ultimately, saves our taxpayers money. Iowa City is carrying debt equal to roughly 21.9% of the allowable level. When the City has less debt obligations, it is easier to borrow at lower rates of interest. The chart above provides a historical view of Iowa City’s debt in relation to the allowable debt level. Hickory Hill-Conklin Park RedevelopmentR4365 Glendale Park Shelter & PlaygroundR4366 Oak Grove Park R4132 Ryerson Park R4132 Riverfront Crossings Park Phases 1, 2 & 3R4185 Creekside Park RedevelopmentR4341 Cardigan Park DevelopmentR4345 IC Kickers Park Soccer Field AdditionR4355 Villa Park Playground & Path R4361 Lower City Park Adventure PlaygroundR4356 West District New Park DevelopmentR4346 Fair Meadows PlaygroundR4348 Wetherby Shelter & PlaygroundR4349 Scott Park Shelter & PlaygroundR4364 Napoleon PlaygroundR4367 Chadek Green Park DevelopmentR4350 Kiwanis Playground & ShelterR4359 Whispering Meadows Shelter & PlaygroundR4357 Lower City Park SheltersR4358 Napoleon Park Softball Fields RenovationR4362 Upper City Park SheltersR4363 Court Hill Shelter & PlaygroundR4368 Mercer Park R4132 Willow Creek Park Redevelopment R4322 Happy Hollow Park R4132 College Green Park R4132 Brooklyn Park R4132 Reno Street Park R4132 Pheasant Hill R4132 Hunter's Run Park R4132 Harlocke Hill R4132 Black Spring Park R4132 Crandic Park R4132 Thornberry Park R4132 Tower Court R4132 Highland Park R4132 20192018 2020 2021 2022 CIP Plan Year Park ImprovementProjects Accessibility Improvements 2018 2019 2022 2020 2021 Master Plan Year Bike lane Buered bike lane 4 lane to 3 lane conversion Bicycle boulevard Sidepath Project Category Completed Planned Construction 2018 Planned Construction 2019 Project Status MYRTLE & RIVERSIDE Intersection & Connection to IRTS3933 WILLOW CREEK RD Neighborhood ConnectorR4225 S. SYCAMORE Restriping to Add Bike LanesS3827 PRENTISS & BOWERY S3827 DEWEY/SUMMIT/BROWN S3942 GREENWOOD & MYRTLE S3933 SANDUSKY/TAYLOR Burns to KeokukS3827 COLLEGE ST S3827 WETHERBY S3827 LAKESIDE S3827 GOVERNOR ST Brown to BurlingtonS3942 MARKET & JEFFERSONS3827 DODGE ST Summit to BurlingtonS3827 CAMP CARDINAL S3827 AMERICAN LEGION Scott to TaftS3854 MCCOLLISTER Gilbert to SycamoreS3934 DODGE ST Burlington to BoweryS3827 GOVERNOR ST Burlington to BoweryS3827 SOUTHGATE Keokuk to GilbertS3827 FIRST AVE S3871 MORMON TREK Melrose to WestsideS3868 MADISON ST Market to CourtS3827 CLINTON ST Church to BentonS3827 GILBERT STS3827 KEOKUK Road Diet - Hwy 6 to SanduskyS3827 HIGHWAY 6 Heinz to SycamoreR4227 AMERICAN LEGION Scott to TaftS3854 MCCOLLISTER Gilbert to SycamoreS3934 HIGHWAY 1 Sidepath TrailR4225 20182017 2019 2020 2021 2022 CIP Plan Year 2019-2022 Master Plan 2017-2018 Master Plan Bike Master PlanProjects How is the Annual City Budget Developed? Iowa City’s financial planning and budget cycle takes nearly a full year to complete. Although the activities below focus specifically on the budget development, the com- munity has a continued role in this process through their involvement in City programs and plan creation. Feedback and comments received from our community throughout the year directly shape the budget requests submitted by departments and elected officials. See below for a summary of how the City budget is created and adopted. ►City Council holds an initial work session to discuss budget goals and identify major initiatives, projects, or programs that they would like to see in the next year’s budget ►All City divisions review performance measures and goals as well as their alignment with the City Council’s Strategic Plan ►Capital Improvement Program (CIP) needs, such as road, park, and water system improvements, are assessed and submitted by all City Departments ►A Capital Improvement Program review committee evaluates and amends the CIP projects submitted in September and produces a preliminary and final Five-Year CIP proposal ►Departments review fiscal policies and priorities, instruct staff on budget prep, and begin submitting amendments for the present fiscal year along with budget requests for the next fiscal year ►City budget team meets with each department to discuss their fiscal year requests, prior year revised budgets, performance measures, and goals ►Finance Department reviews and updates long range City financial plans, identifies significant budget issues and prepares summaries ►Budget team finalizes department fiscal year budget requests, current fiscal year revised budgets, Five-Year CIP, division goals and performance measures, and long range financial plans ►A preliminary City budget document including the Three-Year Financial Plan, Five-Year CIP, and division goals and performance measures is distributed to City Council and the public for review ►City Manager and all departments present City Council and the public an overview on budget process, the fiscal environment, and the proposed budget and Capital Improvement Program ►A public hearing is held on the proposed budget and the prior fiscal year’s revised budget ►City budget is made available for public review online and in-person at City Hall and the Iowa City Public Library ►Following public hearings, City Council approves financial documents ►By Iowa State law, the adopted budget and prior fiscal year revised budget must be certified with the Johnson County Auditor by March 15 ►City Council sets hearings for service fee and rate changes for the upcoming fiscal year, if any are proposed in the approved budget ►New fiscal year begins annually on July 1 August September October November December January February March July /CityofIowaCity Sign up for email updates at icgov.org/E-subscriptions