HomeMy WebLinkAboutOverview of Initial FY2021 Budget ProposalCity of Iowa City
FY2021 Budget Proposal
January 4, 2020
2
City Council Budget Review Schedule
July & August 2019:
Community Budget
Engagement
August 20:
Council Work Session
on Priorities
January 4:
Operating Budget
Review
January 7:
Capital Improvement
Plan Review
February 4:
Setting of Public
Hearing on Proposed
Maximum Property
Tax
February 18:
Public Hearing on
Budget / Adopts
Resolution Setting
Max Property Tax
March 6:
Setting of Public
Hearing on Budget
March 17:
Public Hearing on
Budget / Adoption of
Budget
March 31:
Certification with
County Auditor
Budget Document
Areas to Focus:
Transmittal Letter (Executive Summary)Pages 9-26
Economic Trends Pages 36-39
Fund Structure and Description Pages 68-73
Financial and Fiscal Policies Pages 83-89
Long Range Financial Planning Pages 90-93
General Fund Summary Pages 113-127
3
Iowa City
Fund
Structure
4
Non-Budgetary
Funds
General Fund
Special
Revenue
Funds
Debt Service
Fund
Enterprise
Funds
Capital
Projects Fund
Internal
Service
Funds
General (10**)CDBG (2100)Debt Service
(50**)Parking (710*)Capital Projects Equipment (810*)
HOME Grant (2110)Transit (715*)Risk Management
(8200)
Road Use Tax
(2200)Wastewater (720*)
Information
Technology
Services (830*)
Other Shared
Revenues (2300)Water (730*)Central Services
(8400)
Metro Planning
Organization of
Johnson County
(2350)
Refuse Collection
(7400)
Health Insurance
(8500)
Employee Benefits
(2400)Landfill (750*)Dental Insurance
(8600)
Emergency Levy
(2450)Airport (7600)
Affordable Housing
(2500)Storm Water (7700)Agency
Funds
Peninsula
Apartments (2510)
Housing Authority
(79**)
Project Green
(9102)
Tax Increment
Financing (26**)
Major funds
Self-Supporting
Municipal
Improvement
District (2820)
City of Iowa City
Fund Structure
Budgetary Funds
Iowa City: A Robust Era of Growth
•4th largest population
growth in the State of
Iowa (top 3 in DSM Metro)
•Estimated growth in this
decade is already greater
than the previous two
decades combined
•2014-2018 five year annual
averages:
159 new single-family and
duplex residential units
476 new multi-family
residential units 5
Population
growth has
rapidly
outpaced the
past two
decades
1990s
+2,485
2000s
+5,642
2010-2018
+8,428
residents
Takeaways:
August 20, 2019 Budget Work Session
6
Aggressively respond to
the City Council’s
climate crisis
declaration
Continue to contribute
$1 million to the City’s
Affordable Housing
Fund
Raise the minimum
wage for temporary
employees to $13.25
Invest in new
permanent staff
positions with a focus on
basic services and City
Council strategic plan
priorities
Develop strategies for
funding road and transit
needs
Achieve a moderate
reduction in the City’s
overall property tax rate
Climate Action
•100 Day Report released in November
2019 to accelerate actions
•To meet newly adopted goal of reducing
citywide emissions 45% by 2030, the report
calls for:
Creation of a Division of Climate Action
and Outreach with three staff members
Nearly $1 million in new property tax
funding to be combined with TIF and
existing operational funds to implement
climate strategies
•Areas of Concentration in FY 21 :
▪Education and Awareness Campaigns
▪Incentives to reduce energy consumption and expand renewable energy
▪Increase tree planting
▪Expand climate action grants and build new partnerships
▪Promotion of alternative transportation, waste reduction and natural area efforts 7
Social Justice
•Step 2 of the hourly wage rate increase for temporary
employees ($13.25/hr)
Step 1 to $11.50/hr, estimated to cost $261k (FY
2020)
Step 2 to $13.25/hr estimated to cost $275k (FY 2021)
Step 3 to $15.00/hr estimated to cost $400k (FY 2022)
•$75k for the Social Justice and Racial Equity
Grant program
•$25k to support the expansion of Kirkwood Community
College’s English Language Learning program
•Further expansion of translated City documents and
operational resources for continued cultural outreach
programming and training
•Funding for accessibility improvements
(parks, sidewalks and public facilities)8
Social Justice –Aid to Agencies
9
General Fund support is in addition
to approximately $100,000 from
Community Development Block
Grant funds
•The City Council made a mid -year decision in FY2020 to include a one-time budget increase to fund all requests from ‘legacy agencies’
General Fund Support
FY2018 $246,656
FY2019 $250,000
FY2020 budget $501,500
FY2021 proposed $345,850
•FY2021 proposed budget includes a 25% increase in General Fund funding over historical levels (in addition to shifting utility fund support
to the General Fund)
•The 25% increase in General Funds exceeds both a 2% inflation factor
and CPI increases since General Fund support leveled -off in FY2010
•The Housing and Community Development Commission has requested a joint meeting with the City Council to discuss a
permanent expansion of funding of this program at or above the level that Council set with the FY 2020 mid -year adjustment
Affordable Housing
10
Since FY2015 the City has invested approximately $10 million in affordable
housing initiatives
•Funds have assisted more than 450 affordable units (excludes public housing and workforce housing
tax credits)
•City funds have leveraged $6.75 million in outside Low Income Housing Tax Credit (LIHTC) funding
•The majority of funds provided to the Housing Trust Fund of Johnson County are distributed as loans
and thus will continue to bolster affordable housing resources as loans are paid off
The FY2021 budget contains $1 million in General Fund support for Affordable
Housing for the third straight year (including $350,000 in one-time funding)
•70% of funds will be distributed to the Housing Trust Fund of Johnson County (20% reserved for LIHTC)
•7.5% of funds are dedicated to an Opportunity Fund
•7.5% of funds are dedicated the City’s Healthy Homes Program
•10% is reserved for community security deposit assistance and a risk mitigation fund projects
•5% is reserved for emergent situations (e.g. sudden displacement)
Investments in Roads
•Budget continues to increase funding for pavement rehabilitation
•Provides for new equipment to help the Streets Division improve efficiency and effectiveness of in -house pavement management efforts
•Necessarily increasing our reliance on General Obligation bonds for road projects in the CIP
11
Projected Road Use Tax revenues
may not sustain the annual
pavement rehabilitation project at
the same levels in future years;
greater fuel efficiency, low fuel
prices, and State fee increases for
EV/hybrid vehicles create
uncertainty. $-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Annual Pavement Rehabilitation Capital
Expenditures
Major Road Improvements
Major Upcoming
CIP-Funded Road
Projects (outside
of the annual
pavement rehab
program)
2020: McCollister Blvd extension
First Ave and Scott Blvd intersection
American Legion Rd reconstruction
2021: Rochester Ave reconstruction
Benton Street improvements
Orchard Street reconstruction
Melrose Ave improvements
Gilbert Street Bridge replacement
2022: Court Street reconstruction
Market/Jefferson two-way conversion
2023: Kirkwood/Capitol connection
Dubuque Street reconstruction
2024: Dodge Street reconstruction
Park Rd reconstruction
N. Gilbert Street reconstruction 12
Bike and Park Master Plan Implementation
•Complete destination playgrounds and other enhancements at Lower City Park and Willow Creek Park
•Improve Wetherby, Fairmeadows, Scott, and Napoleon Parks by replacing existing playgrounds and shelters
•Accessibility improvements planned at Harlocke Hill, Ryerson, Black Spring, and Oak Grove Parks
13
•Bicycle lanes:
•Crossing Burlington St Bridge
•Benton Street
•Southgate Ave
•Governor Street
•Complete Foster Road lane striping
•Bike Boulevards:
•Sandusky / Taylor
•Prentiss and Bowery
•Keokuk 4 to 3 lane conversion
•Construction of McCollister from Gilbert to
Sycamore with bike lanes
•Reconstruction of American Legion Road
with bike lanes
Changes to Staff Support
Council directive to increase
minimum wage for hourly staff to
$13.25/hour:
FY2021 $275,000
Initiative to convert
temporary/hourly positions to
permanent resulted in a wage and
benefit increase of:
FY2021 $272,526
Projected cost for salary and
benefits of positions not
recommended: $430,036
Positions converted to
permanent status in FY2021-22
14
Not recommended
Senior Center Video Specialist .50
Library Maintenance Aide MW I 2.13
Library Maintenance Custodian 1.0
Recreation Customer Service Aide 7.0
Total 10.63
Position Title and number of persons
Number of
full-time
equivalents (FTE)
Communications Aide (2)1.26
Creative Assistant (1).63
Animal Care Assistant (2)1.26
Senior Center Receptionist (1).63
Public Works Aide (2)1.0
Housing Authority Receptionist (2)1.0
Total Added (10 individuals)5.78
Recommended Additions to Core Staff Support
Position Title FTE Added Position Supports…
Police Officer 1.00 Continuation of Data-Driven Justice initiatives
Maintenance Worker -Forestry 2.00 Urban forestry/climate initiatives
Building Inspector 1.00 Enhanced energy code inspections
Associate Planner 0.50 Long-term planning /code revisions
Civil Engineer 1.00 Significant engineering project workload
Transportation Operations Supervisor 0.25 Transit and Parking evening operations
Data Analyst -Transportation Services 1.00 Enhanced operations and planning
Customer Service Representative
(Parking, Transit, Refuse)0.75 Improved customer service response time
Maintenance Worker I -Parking 1.00 Enhanced service and response in PM hours
Housing Program Assistant 0.63
Management of additional HUD special
population housing vouchers issued in late 2019
Senior Center Receptionist 0.13 Enhanced customer service desk coverage
Total 9.26
15
Future Concerns
16
Sustaining our Strong Fiscal Position
17
Commercial backfill
from State of Iowa
continues to be
vulnerable
Multi-residential
taxability continues
to erode
Uncertain ‘residential
rollback’
(taxable percentage
of home value)
Volatile expense
items
(e.g. fuel, pensions,
healthcare)
Not likely to sustain
level of taxable
growth from past
several years
2024 cliff –preparing
for sharp, immediate
decline in multi-
residential taxability
Multi-residential property class has been separated from
Commercial and is taxed at a declining rate –
the taxable percentage decreases annually
until it equals the residential tax rate in 2024
In FY21, multi-residential property will be taxed at 71.25%,
which equates to a loss of $157 million in taxable value
The loss of taxable value equates to approximately
$2.5 million in lost property tax revenue for FY2021
Cumulative loss through FY2021 is projected to be
over $8 million without a state backfill
Multi-Residential Property Taxability
18
Residential Rollback Trend
19
The rollback dropped to
55% in FY2021
A 1% change in the
rollback figure
represents
approximately $788k
in tax revenue
78%
64%
81%
68%
55%
48%
44%
53%
56%
55%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1978 1983 1988 1993 1998 2003 2008 2013 2018
Rollback by Assessment Year
2024:
Multi-Residential Cliff
•Prior to 2013 property tax reform, multi -
residential properties were classified as
commercial and taxed at 100% of value
•After FY 2024, multi -residential properties will
be taxed at the same percentage as
residential properties
•Residential has dipped as low as 44% in
recent years (2007 Assessment Year)
•Multi -residential is approximately 9% of Iowa
City’s taxable valuation
•The single year drop in tax revenue between
FY23 and FY24 could be a million or greater
20
Residential
Rollback
Multi-
Residential
Rollback
FY14 52.82%100.00%
FY15 54.40%95.00%
FY16 55.73%90.00%
FY17 55.63%86.25%
FY18 56.94%82.50%
FY19 55.62%78.75%
FY20 56.92%75.00%
FY21 55.07%71.25%
FY22 ?67.50%
FY23 ?63.75%
FY24 ?
State of Iowa Backfill
State backfill budget for FY2021:
General $755,128
Risk $27,076
Library $25,171
Transit $88,564
Employee Benefits $302,438
SSMID $33,989
Debt Service $280,452
Total $1,512,818
Iowa City Budget Equivalents
$.36 added to our property tax levy
13.5 police officer or fire firefighter
positions
21
Future of Backfill Remains Uncertain
State lawmakers have routinely called
for the elimination or phase out of the
backfill.
In 2018 negotiations on a phase out bill
stalled on the last day of the legislative
session
Sustaining Strong Growth
222019 permitted $63.6M in non-taxable construction value; five-year non-taxable average is $38.5M
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
350,000,000
400,000,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Building Permit Construction Value (calendar year)
2010-2011
average:
$88.7M
2012-2015 average:
$161.3M
2017-2019 average:
$213.7M
Other Variable Costs
23
Fuel
Moving to higher efficiency or
electric vehicles and lower fuel costs
are reducing costs, but buses, waste
trucks, and heavy equipment must
run.
Five years ago, the City’s
aggregate fuel cost was nearly
$760k more than anticipated
fuel costs today.
Snow & Ice
Management
It’s challenging to predict a full
season of winter weather therefore
we may see periodic spikes in costs
to manage
snow and ice.
The 2018-2019 snow season
saw a salt/sand and overtime
cost increase of $100k (33%)
over an average year.
Healthcare
Health insurance costs vary
year to year. As a self-insured
organization, healthcare
claims add up to real dollars.
In the last five years, costs
have increased by 47%.
Revenue
24
All Funds Revenue Comparison
25Note: Excludes Transfers
All Funds Revenue Comparison of FY2020 versus FY2021
FY2020
Revised
FY2021
Proposed
Percent
Change
Property Taxes $ 60,296,653 $ 65,910,973 9.3%
Other City Taxes $ 6,210,156 $ 5,551,041 -10.6%
Licenses & Permits $ 2,585,810 $ 2,735,470 5.8%
Use of Money & Prop $ 3,615,275 $ 3,143,149 -13.1%
Intergovernmental $ 46,379,146 $ 35,159,064 -24.2%
Charges for Services $ 41,800,437 $ 42,579,844 1.9%
Misc.$ 6,941,014 $ 7,294,955 5.1%
Other Financial Sources $ 14,482,393 $ 13,077,981 -9.7%
Total $182,310,884 $175,452,477 -3.8%
All Funds Revenue Sources
26
Property Taxes
38%
Other City Taxes
3%
Licenses & Permits
2%
Use of Money & Prop
2%
Intergovernmental
20%
Charges for Services
24%
Miscellaneous
4%
Other Financial Sources
7%
All Funds Revenue Sources
Property Taxes
67%
Licenses & Permits
5%
Use of Money & Property
2%
General Fund Revenue Sources
27
Charges for Services (2%) include
program fees, fire inspections, housing
and building inspections, animal care,
cemetery, etc.
Intergovernmental (7%) includes state
and federal grants, 28e agreements, and
agreements with other local
governments
Miscellaneous (11%) includes chargebacks to CIP and
Enterprise funds, parking fines, library fines, and court
charges related to code enforcement
Other Financing Sources
(1%) are primarily loans or
sale of assets
Other City Taxes (5%) includes hotel/motel and
utility franchise taxes
Property Tax Rate Trend
28*FY2021 Proposed
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
Tax Val (millions)$2,848 $2,960 $3,036 $3,137 $3,183 $3,421 $3,543 $3,745 $3,923 $4,259
Val % Change 3.27%3.93%2.56%3.32%1.46%7.50%3.55%5.72%4.74%8.55%
Ptax Rate 17.842 17.269 16.805 16.705 16.651 16.583 16.333 16.183 15.833 15.773
Rate % Change 0.48%-3.21%-2.69%-0.60%-0.32%-0.41%-1.51%-0.92%-2.16%-0.38%
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
Taxable Value (in millions)Taxable Value and Levy Rate
Overlapping Tax Rate –FY2020 Levy Rates
29
•The City of Iowa City tax levy rate is
one component of the total
property tax rate residents and
businesses pay.
•The three largest components of the
overlapping property tax rate are
the City, the School District, and the
County.
*The State of Iowa has a special levy of $0.0031/$1,000 of
taxable value
The City’s Levy rate has dropped over
the last 8 years but our rate accounts for
less than half the total rate paid by
property owners
ICCSD
38%
Johnson
County
18%
Kirkwood
3%
State of
Iowa
0%City of Iowa City
41%
Percent of Overlapping Tax Rate
Overlapping Tax Rate Trend
30
38.50%
39.50%
40.50%
41.50%
42.50%
43.50%
44.50%
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
ICCSD Johnson County Kirkwood State of Iowa City of Iowa City Iowa City Percentage of Total
Property Tax Levy Comparison
City FY2019 Tax Rate FY2012 Tax Rate % Change
FY12-FY19
Council Bluffs $18.26 $17.85 2.30%
Waterloo $17.55 $18.53 (5.30%)
Davenport $16.78 $15.53 8.05%
Des Moines $16.64 $16.58 0.36%
Iowa City*$15.83 $17.84 (11.25%)
Sioux City $15.68 $16.66 (5.88%)
Cedar Rapids $15.44 $15.22 1.42%
Coralville $13.53 $13.53 0.00%
North Liberty $11.03 $11.03 0.00%
West Des Moines $10.99 $12.05 (8.80%)
Dubuque $10.33 $10.45 (1.13%)
Ames $10.03 $10.84 (7.51%)
31* Proposed Iowa City tax rate for FY2021 is $15.77.
Levy breakdown and Emergency Levy usage
Levy Applied
Rate
FY2020
Rate
FY2021 Change
Combined General
Fund Tax Levies 9.610 9.610 0.00
Employee Benefits 3.244 3.344 +0.10
Emergency 0.00 0.000 +0.24
Debt Service 2.978 2.578 -0.40
Total 15.833 15.773 -0.06
32
Emergency Levy
Use of the Emergency Levy is
permitted after the $8.10 General
Tax Levy is fully utilized.
The emergency levy is used by
45% of cities in Iowa.
As of November 2018, 50% of Iowa
cities with populations over 50,000
were using the emergency levy,
all of them at the max of $0.27.
Major Revenue Sources –Hotel Motel
33
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Hotel Motel Tax $776,501 $813,896 $871,706 $967,049 $1,057,386 $1,078,762 $1,136,712 $1,045,686 $1,301,827
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
Major Revenue Sources -Utility
City
FY2017
Franchise
Fees Rate
North Liberty 0%
Davenport 0%
West Des
Moines 0%
Ames 0%
Coralville 1%
Iowa City 1%
Council Bluffs 2%
Cedar Rapids 3%
Waterloo 3%
Dubuque 5%
Sioux City 5%
Des Moines 5%34
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Utility Franchise Tax $1,031,187 $901,690 $874,235 $939,387 $976,060 $964,690
$750,000
$800,000
$850,000
$900,000
$950,000
$1,000,000
$1,050,000
Utility
Franchise
Tax is
currently
1%
Cable TV Franchise
•Revenue declining as alternate
forms of media increase in
popularity
•City franchise agreement expired
August 1, 2018 and will result in
additional loss of funds
•Pass through funding for PATV
(~$242k) and PEG funding (~89k)
have ceased –PATV merged
with PS1 in 2019
•Future of franchise fee revenue is
uncertain at best
35
$815,503
$773,018 $750,167 $733,644
$685,659 $662,448
$586,428
$512,750
FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
budget
Cable Franchise Fee Revenue
Major Revenue Sources –Road Use Tax
36
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
Road Use Tax Receipts $5,881,020 $6,436,785 $6,589,111 $6,744,663 $7,230,663 $8,320,117 $8,672,279 $8,426,502 8,820,138.0
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
Local Option Sales Tax (LOST)
37*All cities have a LOST rate of 1%
**Iowa City’s LOST expired in FY 2013 and generated approximately $8.8 million annually for four years.
City
Year
Effective
Sunset
Year
FY2020 Estimated
Receipts Purpose
Des Moines 2019 None $45,268,074
50 % Property Tax Relief, 50% Street,
Neighborhood and Public Safety Improvements
Cedar Rapids 2009 2024 $19,368,587 100% Street Repair
Davenport 1989 None $16,522,128 60% Property Tax Relief, 40% Capital
Improvements and Equipment
Sioux City 1987 None $12,317,912
60% Property Tax Relief, 20% Infrastructure
Projects, 10% City Facilities, 10% EDX
West Des Moines 2018 None $11,051,230
50% Property Tax Relief; 50% Quality of Life
Projects
Council Bluffs 1990 None $9,848,279 100% Streets and Sewers
Waterloo 1991 2025 $9,702,458 100% Street Repair
Dubuque 1988 None $8,775,003 50% Property Tax Relief, 20% City Facilities
Maintenance, 30% Special Assessment Relief
Ames 1987 None $7,849,222 60% Property Tax Relief, 40% Community
Betterment
Expenditures
38
All Expenditures by Category
39
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
Public Safety Public Works Culture &
Recreation
Community &
Economic
Development
General
Government
Debt Service Capital Projects Business Type
Activities
FY2021 Expenditures by State Budget Category
Excludes transfers
General Fund Expenditures
40Excludes transfers
Personnel
74%
Services
17%
Contingency
1%
Supplies
3%
Capital Outlay
4%
Other Financial Uses
1%
General Fund Expenditures
FY20 (Revised)FY21 (Proposed)Percentage Change
Personnel $43,813,771 $46,581,470 6.32%
Services $12,414,445 $11,026,756 -11.18%
Supplies $1,814,362 $1,752,995 -3.38%
Capital Outlay $3,122,110 $2,445,585 -21.67%
Other Financial Uses $861,000 $400,000 -53.54%
Contingency $530,596 $617,000 16.28%
Total Expenditures*$62,556,284 $62,823,806 0.43%
41*Excludes Transfers Out
Public Safety Pension Contributions
42*Amended
** Proposed
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020*FY2021**
Fire 961,815 1,052,753 1,226,921 1,289,744 1,208,773 1,158,015 1,178,514 1,223,644 1,258,262 1,318,504
Police 1,251,111 1,344,954 1,688,246 1,668,273 1,585,142 1,532,865 1,591,762 1,683,193 1,778,122 1,812,778
Total 2,212,926 2,397,707 2,915,167 2,958,016 2,793,915 2,690,880 2,770,276 2,906,837 3,036,384 3,131,282
% Change 31.27%8.35%21.58%1.47%-5.55%-3.69%2.95%4.93%4.46%3.13%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
IPERS Pension Contributions
43*Revised
**Proposed
FY15 FY16 FY17 FY18 FY19 FY20*FY21**
IPERS 2,550,271 2,555,490 2,655,816 2,710,906 2,914,700 3,270,393 3,455,884
% Change -0.66%0.20%3.93%2.07%7.52%12.20%5.67%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
Debt Service
44
Debt Service
•Debt restructuring and elimination continues to be
a critical component of the strategy to respond to
property tax reform
45
State of Iowa limits
debt service to no
more than 5% of
total assessed
property value.
Iowa City currently utilizes
19.8% of the allowed
debt limit
City goal is to meet
Moody’s Aaa
benchmark of net
direct debt
outstanding of .75%
of city’s total
assessed value.
Iowa City is projected
to be at 0.99% of
total valuations
Iowa City policy
specifies that debt
service levy shall
not exceed 30% of
the total City levy
in any fiscal year
The projected debt
service levy is
approximately 16.3%
of the total levy
Moody’s
Aaa
Rating
46
Aaa Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3
National 238 306 709 531 405 205 96 36 31 20
% of Total 9.15%11.77%27.27%20.42%15.58%7.88%3.69%1.38%1.19%0.77%
0
100
200
300
400
500
600
700
800
Number of CitiesDistribution of Moody's General Obligation Ratings
for All US Cities
Iowa City
Moody’s
Aaa
Rating
47
Aaa Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3
State 3 6 12 13 19 10 6 0 0 0
% of Total 4.35%8.70%17.39%18.84%27.54%14.49%8.70%0.00%0.00%0.00%
0
2
4
6
8
10
12
14
16
18
20
Number of CitiesDistribution of Moody's General Obligation Bond Ratings for
Cities in Iowa
Iowa City
Analysis and
Summary
48
Enterprise Fund Balances
49
Fund Estimated Revenues
and Transfers In
Budgeted
Expenditures and
Transfers out
Estimated Fund
Balance 6/30/20
Restricted,
Committed,
Assigned
Unassigned
Fund
Balance,
6/30/2020
Unassigned Balance as
% of Rev & Trans In
Parking 8,377,522 11,206,312 5,863,145 1,955,000 3,908,144 47%
Transit 8,676,189 8,298,973 6,844,611 5,114,750 1,729,862 20%
Wastewater 18,134,586 16,516,914 23,281,413 12,105,693 11,175,720 62%
Water 12,749,425 12,925,405 11,513,227 5,814,249 5,698,978 45%
Refuse 3,891,720 4,470,390 827,253 0 827,253 21%
Landfill 8,486,496 7,449,953 25,566,262 24,281,421 1,284,841 15%
Airport 464,820 432,933 244,833 117,550 127,283 27%
Stormwater 2,715,700 2,610,879 959,016 79,000 880,016 32%
FY2021 User Fee Changes
50
No fee increases recommended for sewer,stormwater,
parking,or transit
5%water rate increase previously approved for FY2021
to fund system upgrades and maintenance
$0.90 monthly refuse fee increase is recommended to
support operations due to growth in recycling
program use
$2.50 Landfill trash disposal tipping fee increase
recommended,along with a $3.00 increase for
recycling TV monitors over 18”
51
FY2020 FY2021
FY2021 w/ average
Assessment increase
Assessed Valuation $100,000 $100,000 $109,100
Taxable Valuation $56,918 $55,074 $60,086
City Levy $15.833 $15.773 $15.773
Property Taxes $901 $869 $948
Difference ($32)$47
$100k used to allow for easy adjustment to an individual’s home value. The average
valuation increase for residential properties this year is 9.1%.
FY2020
$901
FY2021
$869
Property Tax Impact
Annual Financial Household Impact
52
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
Property Taxes $928 $922 $930 $900 $901 $869
Stormwater $42 $54 $54 $54 $60 $60
Refuse $191 $191 $205 $229 $229 $240
Sewer - 800 cubic feet $433 $433 $433 $433 $433 $433
Water-- 800 cubic feet $362 $362 $362 $380 $399 $419
Total $1,955 $1,962 $1,984 $1,996 $2,022 $2,021
Percent Change 1.9%0.3%1.1%0.6%1.3%-0.1%
-$500
$0
$500
$1,000
$1,500
$2,000
$2,500
Based on a
residential
customer with
$100,000 property
valuation.
Building Critical Reserves
•Emergency Reserve (Balance =$5.2 million)
Disaster response and mitigation (including land acquisition)
Cover unexpected shortfalls in revenues or loss in State funding
Mitigate sharp spikes in volatile line items (pensions, insurance, etc.)
Avoid any defaults in bonded debts
Rehabilitation / replacement of depreciated / outdated municipal buildings
Other financial emergencies declared by the Council
•Facility Reserve (Balance = $4 million)
Reduce need for bonded debt
Avoid referendum requirement
Significant ten year facility needs:
Police Station
Transit
Equipment Maintenance
Senior Center (Rehabilitation)
Fire Station (Two new and one rehabilitation)
Pools and Rec Centers 53
Next Year’s Budget
•Slowing growth in our taxable
base (development activity
normalizing + non-assessment
year)
•Fairly stable utility fund rates
•A comparatively small
reduction in the debt service
levy
•Continued effort to expand the
Facility Reserve fund
•More specificity on financial
resources needed to execute the
City’s climate actions
•Adequate resources for
continued strategic and master
plan initiatives
•Continued pressure for
enhanced staffing in key service
areas
54
Plan for…
Major Considerations for the City
Council Prior to FY 2022
Transit Service Expansion
•Study and recommendations expected to be complete in summer 2020
•Service enhancements such as Sunday service, expanded hours/frequencies and fare free operations will be costly
•The City will need to look to new revenue sources to implement the recommendations
Property taxes
Utility taxes
Parking fees
Roadway Maintenance Funding
•Road condition study nearly complete
•Iowa City’s road condition stacks up well against other large cities in Iowa
•Maintaining our overall road conditions will require significant investment beyond our current efforts
•Local Option Sales Tax (LOST) should be considered as Road Use Tax monies will stagnate and more pressure will be placed on general obligation bonding
55
Over the
last three
years the
City
Council’s
budgets
have:
Continues a significant commitment to Affordable Housing
with a $1 million General Fund contribution and increases
non-profit support with a 25% General Fund increase to the
Aid to Agency grant program
Aggressively funds Climate Action and Adaptation efforts
setting the table for Iowa City to be a national leader
Makes the biggest investment in staff in well over a decade
with a minimum wage increase, temporary to permanent
conversions, new staff positions and investments to improve
working conditions
Continues implementation of recently adopted bicycle,
parks and natural areas master plans
With this
Budget
the City
of Iowa
City:
Final Thoughts
56
57
At the same time, the FY2021 budget:
(1)Builds stronger reserves for the future
(2) Avoids significant spikes in utility and user fees
by making incremental changes in
water, recycling and landfill rates
(3) Continues to reduce the tax levy rate, bringing our
rate more in line with other large Iowa cities despite not
accessing alternative revenues such as LOST
Thank You
58