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FY2020 Budget At-a-GlanceFiscal Year 2020 Budget Summary The budget is one of the most important documents the City prepares because it identifies what services are provided and how they are financed. This Budget At-a- Glance document summarizes the City’s budgeting methods, highlights revenues and expenses for Fiscal Year 2020 (FY2020) and provides an outlook for future years. July 1, 2019 to June 30, 2020 City of Iowa City FY2020 Budget At-a-Glance ►Priorities determined by Strategic Plan ►Budget guided by clear financial goals ►Focused on a sustainable, multi-year financial model ►Adopted property tax levy rate, $15.83 per $1,000 of taxable value • Rate decrease of $.35 from FY2019 • Eighth consecutive rate decrease 1 2 3 Provide resources to make significant progress in implementing City Council’s Strategic Plan priorities and adopted Master Plans Balance expanding service needs and community priorities with declining taxable value of apartment buildings Consider the overall effect of changes on household budgets including taxes, fees, and School District/County needs Preparation of the City budget was guided by the City’s primary financial goals: 1 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Tax Value (millions)$2,758 $2,848 $2,960 $3,036 $3,137 $3,183 $3,421 $3,543 $3,745 $3,923 Val % Change 2.95%3.27%3.93%2.56%3.32%1.46%7.50%3.55%5.72%4.74% Ptax Rate 17.757 17.842 17.269 16.805 16.705 16.651 16.583 16.333 16.183 15.833 Rate % change -0.54%0.48%-3.21%-2.69%-0.60%-0.32%-0.41%-1.51%-0.92%-2.16% 15 15.5 16 16.5 17 17.5 18 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 Levy RateTaxable Value (in 1000's)Taxable Value and Levy RateTaxable Value and Levy Rate Taxable Value (in 1000’s)Levy Rate 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 As in prior years, the Fiscal Year 2020 budget was prepared with strategic and master plans 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. 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. Master Plan progress is regularly shared in the Strategic Plan Report. 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 Sustain- able Iowa City. The following priorities were adopted by City Council in their 2018- 2019 Strategic Plan. 1 As the taxable percentage of multifamily rental property values continues to be reduced from property tax reform, pressure on the City’s budget will increase. State property tax backfill payments, which reimburses the City for impacts attributed to tax reform, currently totals $1.54 million annually. Iowa City has taken steps to manage the impacts of tax reform, but maintaining service levels will require prudent decisions over the next several years as tax reform continues to be phased in through 2024. 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 several years of strong growth in taxable valuations. 2Continued Response to 2013 Property Tax Reforms 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 FY2020, there was a water rate fee increase of five percent and Stormwater increase of $0.50 per month. Maintaining a Moderate Tax and Fee Environment for Residents and Businesses Strategic Plan Goals Prioritized by Residents for FY2020 Budget There is a direct connection between community partici- pation and the projects, programs, and services which end up prioritized in the City’s budget and strategic plan. The City held a new event called “Chip In” at City Hall in August 2018. ‘Chip In’ engaged approximately fifty residents in priori- tizing strategic plan goals and what efforts should be placed front and center in the City budget. Participants voted on the strategic plan goals most important to them and helped identify projects and programs that should receive City funds. To facilitate alternative methods of participation, residents were also able to take a ‘Chip In’ survey closely aligned with the in-person engagement activities. Nearly 600 survey res- ponses were received during the week-long survey period. 3 3 * FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 Property Taxes $909 $928 $922 $930 $900 $901 Stormwater $42 $42 $54 $54 $54 $60 Refuse $191 $191 $191 $205 $229 $229 Sewer - 800 cubic feet $433 $433 $433 $433 $433 $433 Water-- 800 cubic feet $344 $362 $362 $362 $380 $399 Total $1,919 $1,955 $1,962 $1,984 $1,996 $2,022 Percent Change 2.3%1.9%0.3%1.1%0.6%1.3% $0 $500 $1,000 $1,500 $2,000 $2,500 Annual Financial Impact to Residential Households *Property taxes based on house value of $100,000 Annual Financial Impact to Residential Households Support organizations helping those withtrauma and crisis Support reduction in consumption of goodsand minimize solid waste Historic preservation Support small business and entrepreneurs Build and promote a livable community forall people Support education and workforce programs Affordable housing needs Encourage equitable and sustainableeconomic growth Public transportation improvements (bike,bus, pedestrian, other) Streets and infrastructure Top Ten areas of focus selected by online and in-person Chip In Participants Top Ten areas of focus selected by online and in-person Chip In Participants General Fund Highlights 4 The General Fund FY2020 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 funding for roadway repairs and enhances equipment for Streets crews ►Gives $75,000 for racial equity grant program ►Funds accessibility improvements, including updates to sidewalks, City parks, and facilities, installation of hearing augmentation systems, and funding for the annual community ADA Celebration ►Continues to provide micro-loan resources and funding for small business incentives ►Continues the historic preservation grant program aimed at facilitating reinvestment in historic districts ►Provides for the second installment of a $500,000 tax increment financing grant 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 funding for the capital contribution to the County Behavioral Access Center ►Allows for waiving child and teen library material fines ►Increases the City’s minimum wage to $11.50 effective July 1, 2019 for hourly staff with a goal of reaching $15/ hour by July 1, 2021 ►Funds Climate Action Plan implementation, including staff positions in Government Buildings, Stormwater, and Resource Management, funding for multiple solar installation projects, and $25,000 in community grants 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 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 chart to the right. On the expense side, General Fund operations largely consist of personnel expenses. In the FY2020 budget, 74% of General Fund expenditures are personnel related. A view of General Fund expenditures by category can be viewed in the chart below. Property Taxes67%Other City Taxes5% Licenses & Permits5% Use of Money & Property2% Intergovernmental7% Charges for Fees & Services2%Miscellaneous11% Other Financing Sources1% FY2019 Revenues & Other Financing Sources excludes transfersFY2020 Revenues & Other Financing Sources excludes transfers Personnel74% Services19% Contingency1% Supplies3% Capital Outlay3% Other Financial Uses0% General Fund Expenditures by Category excludes transfersGeneral Fund Expenditures by Categoryexcludes transfers Capital Improvement Plan (CIP) Highlights Many of the CIP projects planned are in response to feedback from residents desiring more funding for road improvements and transportation needs. The five-year program continues to reflect the City Council’s priorities established in previous fiscal years, including implementation of master plans. Summaries of the Parks and Bicycle Master Plan projects are provided on the following pages. Examples of other significant projects planned for the coming calendar years include: 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 Reduction in the debt service levy means that Iowa City spends less money on paying interest on borrowed funds. The City has been in a position to reduce the debt levy over the last decade because it has less debt obligations than it did years ago. Communities who adhere to responsible debt policy and have limited debt are attractive to ratings agencies like Moody’s. A good bond rating, like Iowa City’s Aaa rating, makes it easier to borrow at lower rates of interest, ultimately saving thousands or millions of taxpayer dollars over the life of a bond. The FY2020 budget anticipates outstanding debt of $47.6 million at FY2020 year end. This equates to 1.1% of total valuations, well below the State of Iowa threshold. ►The State of Iowa gives cities the authority to establish a debt service fund and levy taxes to pay for principal and interest on general obligation bonds issued by their city. ►Iowa City reduced its debt service levy for FY2020 by $0.25 from the FY2019 levy. ►Total outstanding debt is trending downward - FY2020 anticipates a decrease of $7.3 million from FY2019 in total outstanding debt by year end. ►Future general obligation bond issues, including 2% for bond issuance costs, are estimated at $13.323 million in 2019 and $10.819 million in 2020. • Chadek Green Park Improvements • Iowa River Trail (Benton to Hwy 6) • Rochester Avenue Reconstruction • Bradford Drive Water Main • Dubuque Street Reconstruction (Iowa to Washington) • Transit/Equipment Facility Relocation • Lower City Park Shelters and Restroom • Court Street Reconstruction • Kirkwood to Capitol Street Connector • Dodge Street Reconstruction • Hunter’s Run Park Playground and Shelter • Public Works Facility (Phase 1) • Pedestrian Mall Rehabilitation (Phase 2) • Creekside Park Development • Climate Action and Adaptation Plan • Lower City Park Adventure Playground • Willow Creek Park Redevelopment (Phases 2 & 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 • American Legion Road (Scott to Taft) • Melrose Avenue Improvements • Mercer Park Pool Improvements • Wetherby Park Restroom and Shelter • Eastside Recycling Center Improvements *Although projects are planned to begin in the listed year, many will span multiple years ◄2021 ◄2022 ◄2023 ◄2019 ◄2020 $31,363,282Capital Budget FY2020 Five-year Capital Improvement Plan (CIP) 2019-2023 $163,357,501 Hickory Hill-Conklin Park RedevelopmentR4365 Glendale Park Shelter & PlaygroundR4366 Oak Grove Park R4132 Ryerson Park R4132 Lower City Park Adventure PlaygroundR4356 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 Napoleon Park Softball Fields RenovationR4362 Lower City Park SheltersR4358 Upper City Park SheltersR4363 Court Hill Shelter & PlaygroundR4368 Willow Creek Park Redevelopment R4322 College Green Park R4132 Brookland Park R4132 Reno Street Park R4132 Hunter's Run Park R4132 Hunter's Run Park DevelopmentR4375 Happy Hollow PlaygroundR4371 Terrell Mill Park RedevelopmentR4372 Harlocke Hill R4132 Black Spring Park R4132 Crandic Park R4132 Thornberry Park R4132 Under Construction Highland Park R4132 Pheasant Hill R4132 Mercer Park R4132IC Kickers Park Soccer Field AdditionR4355 Creekside Park RedevelopmentR4341 Riverfront Crossings Park Phase 3R4185 Riverfront Crossings Park Phases 1 & 2R4185 Completed Projects Cardigan Park DevelopmentR4345 Happy Hollow Park R4132 R4361 Villa Park Playground & Path Tower Court R4132 20202019 2021 2022 2023 CIP Plan Year Park ImprovementProjects Accessibility Improvements 2018 2019 2022 2020 2021 2023 Master Plan Year Bike lane Buered bike lane 4 lane to 3 lane conversion Bicycle boulevard Sidepath Project Category Completed Planned Construction 2019 Construction Status MYRTLE & RIVERSIDEIntersection & Connection to IRTS3933 S. SYCAMORE Restriping to Add Bike LanesS3827 GREENWOOD & MYRTLE S3933 WETHERBY S3827 LAKESIDE S3827 FIRST AVE S3871 MORMON TREK Melrose to WestsideS3868 MADISON ST Market to CourtS3827 CLINTON ST Church to BentonS3827 SUNSET Benton to Hwy 1S3827 DODGE ST Summit to BurlingtonS3827 GILBERT ST Market to McCollisterS3827 AMERICAN LEGION Scott to TaftS3854 BENTON Greenwood to Mormon TrekS3947 MARKET & JEFFERSONS3953 DODGE ST Burlington to BoweryS3827 MCCOLLISTER Gilbert to SycamoreS3934 WILLOW CREEK RD Neighborhood ConnectorR4225 PRENTISS & BOWERY S3827 GOVERNOR ST Burlington to BoweryS3827 HIGHWAY 1 Sidepath TrailR4225 FOSTER RD SANDUSKY/TAYLOR Burns to KeokukS3827 SOUTHGATE Keokuk to GilbertS3827 KEOKUK Hwy 6 to SanduskyS3827 DEWEY/SUMMIT/BROWN S3942 GOVERNOR ST Brown to BurlingtonS3942 CAMP CARDINAL S3827 20182017 2019 2020 2021 2022 2023 CIP Plan Year Near-Term Projects Immediate-Term Projects 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 community 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