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FY2021 Budget At-a-Glance 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 Rate 1 City of Iowa City FY2021 Budget At-a-Glance July 1, 2020 to June 30, 2021 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 2021 (FY2021) and provides an outlook for future years. Preparation of the City budget was guided by the City’s primary financial goals: 1 Provide resources to make significant progress in implementing City Council’s Strategic Plan priorities and adopted Master Plans 2 Balance expanding service needs and community priorities with declining taxable value of apartment buildings 3 Consider the overall effect of changes on household budgets including taxes, fees, and School District/County needs Fiscal Year 2021 Budget Summary ►Priorities determined by Strategic Plan ►Budget guided by clear financial goals ►Focused on a sustainable, multi-year financial model ►Adopted property tax levy rate, $15.77 per $1,000 of taxable value • Rate decrease of $.06 from FY2020 • Ninth consecutive rate decrease Taxable Value and Levy Rate Taxable Value (in 1000’s)Levy Rate 2 1Strategic Plan and the Budget As in prior years, the Fiscal Year 2021 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. Respond to climate crisis and implement Climate Action and Adaptation Plan 2. Provide resources to make significant progress in implementing City Council’s other Strategic Plan priorities and adopted Master Plans 3. Balance expanding service needs and community priorities with declining taxable value of apartment buildings 4. Consider the overall effect of changes on household budgets including taxes, fees, and School District/County needs Strategic Plan Priorities The Council’s Strategic Plan, updated every two years, intends to foster a more Inclusive, Just and Sustainable Iowa City by prioritizing the physical, mental and economic well-being of all residents. The current Strategic Plan is available at www.icgov.org/strategicplan. 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 It is imperative to consider how the overall revenue and expenditure recommendations in this budget will impact local households and businesses. The proposed property tax rate is $15.77, the lowest Iowa City tax rate since fiscal year 2002. In fiscal year 2012, Iowa City's rate was one of the highest in the State of Iowa at $17.84; the fiscal year 2021 rate represents a 11.6% decrease over nine years.In recent years, tax levy rate reductions have been made possible predominantly through decreases in property taxes levied to repay debt. The following bar chart illustrates the estimated overall financial impact of tax and fee changes to the average household in Iowa City.With a lower property tax rate, a 5% increase in the water rate,and a $0.90 increase in curbside recycling, it is estimated that a household with $100,000 assessed home value will pay approximately the same in taxes and fees for basic City services in fiscal year 2021 as in fiscal year 2020. For this table, the $100,000 assessed value is used so that readers may easily calculate tax payments based on their own home value. Perhaps the most significant property tax reform provision for Iowa City’s budget is the reclassification of multifamily residential properties, none of which is subject to state backfill payments. Prior to assessment year 2013, multifamily properties were classified as commercial 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 Annual Financial Impact to Residential Households 18 3 2Continued Response to 2013 Property Tax Reforms 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 $1.9 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.3 Maintaining a Moderate Tax and Fee Environment for Residents and Businesses 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 FY2021, there was a water rate fee increase of five percent and a $0.90 increase in curbside recycling. Annual Financial Impact to Residential Households *Property taxes based on house value of $100,000 Strategic Plan Goals Prioritized by Residents for FY2020 Budget This year’s City “Chip In” budget engagement actions included a community-wide survey and onsite activities at Wetherby Park and a day at the Iowa City Farmer’s Market. The survey, which gathered over 850 responses, and engagement activities were intended to get residents sharing which of the City Council’s Strategic Plan goals and corresponding initiatives are most important. The survey and in-person activity mirrored the Chip In actions from the prior year and asked residents to again choose up to ten issues that were most vital for the City to support. The top five issues for participants included (ranked order) streets and infrastructure, public transportation improvements, affordable housing, building a livable community for all, and support for climate action initiatives. The City’s budget team analyzed this survey data and ensured the City’s FY2021 budget incorporated significant supports for these and other priorities. A visual of Chip In survey replies to the prompt: “use a single word to describe what will make Iowa City a more inclusive, just, and sustainable community in the next five years.” Personnel 74% Services 18%Contingency 1% Supplies 3% Capital Outlay 4% Other Financial Uses 0% General Fund Expenditures by Category excludes transfers Property Taxes 67%Other City Taxes 4% Licenses & Permits 5% Use of Money & Property 2% Intergovernmental 7% Charges for Fees & Services 2% Miscellaneous 11% Other Financing Sources 2% FY2020 Revenues & Other Financing Sources excludes transfers 4 General Fund Highlights The General Fund is the City’s primary operating fund and represents approximately 32% of the total budget. A breakdown of revenue sources is provided in the chart to the right. General Fund Revenues & Other Financing Sources excludes transfers On the expense side, General Fund operations largely consist of personnel expenses. In the FY2021 budget, 74% of General Fund expenditures are personnel related. A breakdown of expenditures by category is provided in the chart below. General Fund Expenditures by Category excludes transfers 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 FY2021 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 tree management and tree plantings including staffing, equipment and contracted plantings ►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 funding to support the expansion of Kirkwood Community College’s English Language Learning Program ►Gives $1,000,000 to Affordable Housing Fund ►Provides funding to complete fair housing testing to ensure compliance with federal, state, and local discrimination laws ►Increases the City’s minimum wage to $13.25/hour effective July 1, 2020 for hourly staff with a goal of reaching $15/hour by July 1, 2021 ►Funds Climate Action Plan Implementation with a new Division, staff position, use of the Emergency Levy, and $50,000 in community grants FY13 FY14 FY15 FY16 FY17 FY18 FY19 *FY20 *FY21 *FY22 Debt (millions)61 67 62 58 67 67 67 68 68 69 % of Val 1.33% 1.44% 1.28% 1.17% 1.25% 1.22% 1.14% 1.11% 0.99% 0.97% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 52 54 56 58 60 62 64 66 68 70 Millions of Dollars ($)General Bonded Debt Outstanding and Percent of Total Valuation 5 Debt Service Fund Highlights 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. FY2021 budget anticipates outstanding debt of $67.8 million at FY2021 year end. This equates to 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 FY2021 by $0.40 from the FY2020 levy. ►Total outstanding debt is trending downward - FY2021 anticipates a decrease of $0.5 million from FY2020 in total outstanding debt by year end. ►Future general obligation bond issues, including 2% for bond issuance costs, are estimated at $12.24 million in both 2020 and 2021. General Bonded Debt Outstanding and Percent of Total Valuation *Budgeted and projected amounts 6 Capital Improvement Plan (CIP) Highlights $29,540,120 Capital Budget FY2021 $168,095,552 Five-year Capital Improvement Plan (CIP) 2020-2024 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: 2020 ►Bike Master Plan implementation (every year of the CIP) ►McCollister Boulevard extension ►Wetherby, Fairmeadows, Scott and Napoleon Park improvements ►Enhanced annual street resurfacing ►American Legion Road reconstruction ►First Avenue/Scott Blvd improvements ►Lower Muscatine Stormwater Improvements ►Mercer Pool improvements 2021 ►Benton Street rehabilitation ►Rochester Avenue reconstruction ►Melrose Avenue improvements ►Curbside collections automated truck ►Smart parking meter replacements ►Highway 6 Trail extension ►Glendale Park improvements ►Gilbert Street Bridge replacement 2022 ►Chadek Green, Court Hill, Kiwanis Park improvements ►Library furnishings replacement ►Landfill building replacement ►Mercer Ball Diamond improvements ►Court Street reconstruction ►Transit facility relocation ►Market/Jefferson two-way conversion 2023 ►Palisades and Stone Bridge Park development ►Lower City Park restrooms and shelters ►Hickory Hill Park shelters and restroom ►Happy Hollow and Ped Mall playground ►Dubuque Street reconstruction ►Rohret South Sewer ►Wastewater Digester Complex rehabilitation ►Kirkwood to Capitol Street connection 2024 ►Dodge Street reconstruction ►Park Road reconstruction ►North Gilbert Street reconstruction ►South Side recycling site ►Terrell Mill Park redevelopment ►Whispering Meadows and Upper City Park shelters and playgrounds ►Highway 6 water main replacement *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 Hickory Hill-Conklin Park RedevelopmentR4365 Palisades/Stone Bridge Park DevelopmentR4346 Lower City Park SheltersR4358 Hunter's Run Park DevelopmentR4375 Happy Hollow PlaygroundR4371 Ped Mall PlaygroundR4383 Whispering Meadows Shelter & PlaygroundR4357 Upper City Park SheltersR4363 N. Market Square PlaygroundR4378 Terrell Mill Park RedevelopmentR4372 Glendale Park Shelter & PlaygroundR4366 Ryerson Park R4132 Harlocke Hill R4132 Napoleon PlaygroundR4367 Oak Grove Park R4132 Fair Meadows PlaygroundR4348 Wetherby Shelter & PlaygroundR4349 Scott Park Shelter & PlaygroundR4364 Brookland Park R4132 Hunter's Run Park R4132 Black Spring Park R4132 Mercer Park Ball Diamond ImprovementR4374 Chadek Green Park DevelopmentR4350 Kiwanis Playground & ShelterR4359 Napoleon Park Softball Fields RenovationR4362 Court Hill Shelter & PlaygroundR4368 Crandic Park R4132 Reno Street Park RenovationR4379 Thornberry Park R4132 Under Construction Completed Projects IC Kickers Park Soccer Field AdditionR4355 Lower City Park Adventure PlaygroundR4356 Willow Creek Park Redevelopment R4322 Highland Park R4132 Pheasant Hill R4132 Mercer Park R4132 Creekside Park RedevelopmentR4341 Riverfront Crossings Park Phase 3R4185 Riverfront Crossings Park Phases 1 & 2R4185 Cardigan Park DevelopmentR4345 Happy Hollow Park R4132 R4361 Villa Park Playground & Path Tower Court R4132 College Green Park R4132 2020 2021 2022 2023 2024 CIP Plan Year Park ImprovementProjects Accessibility Improvements 2018 2020 20212019 2022 20242023 Master Plan Year Last updated March 2020 Bike lane Buered bike lane 4 lane to 3 lane conversion Bicycle boulevard Sidepath Project Category Planned Construction 2020 Completed Construction Status GILBERT ST Market to McCollisterS3827 MARKET & JEFFERSONS3953 DODGE ST N. Summit to BurlingtonS3827 DODGE ST Burlington to KirkwoodS3827 MCCOLLISTER Gilbert to SycamoreS3934 S3854 AMERICAN LEGION Scott to Taft R4376 HIGHWAY 6 Fairmeadows to Heinz BENTON Greenwood to Mormon TrekS3947 SUNSET Benton to Hwy 1S3827 KEOKUK Kirkwood to Hwy 6 KIRKWOOD Clinton to Lower Muscatine LOWER MUSCATINE S3827 S3827 S3827 WETHERBY LAKESIDE MADISON ST Market to Court S3827 S3827 S3827 MYRTLE & RIVERSIDE Intersection & Connection to IRT S. SYCAMORE Restriping to Add Bike Lanes FIRST AVE MORMON TREK Melrose to Westside CLINTON ST Church to Benton S3933 S3827 S3871 S3868 S3827 DEWEY/SUMMIT/BROWN CAMP CARDINAL GOVERNOR ST Brown to Burlington S3942 S3827 S3942 S3933 S3827 S3827 R4225 R4225 GREENWOOD & MYRTLE PRENTISS & BOWERY GOVERNOR ST Burlington to Bowery HIGHWAY 1 Sidepath Trail WILLOW CREEK RD Neighborhood Connector FOSTER RD N. Dubuque to Prairie Du Chien SANDUSKY/TAYLOR Burns to Keokuk KEOKUK Hwy 6 to Sandusky SOUTHGATE Keokuk to Gilbert S3827 S3827 S3827 2020201920182017 2021 2022 2023 2024 CIP Plan Year Near-Term Projects Immediate-Term Projects Bike Master PlanProjects Last updated March 2020 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. August ►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 September ►Capital Improvement Program (CIP) needs, such as road, park, and water system improvements, are assessed and submitted by all City Departments October ►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 November ►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 December ►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 January ►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 February ►City budget is made available for public review online and in-person at City Hall and the Iowa City Public Library ►A public hearing is held on the proposed maximum property tax levy for certain levies. Following public hearings, City Council approves Maximum Property Tax Levy Resolution for certain levies. March ►A public hearing is held on the proposed budget and the prior fiscal year’s revised budget ►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 31 ►City Council sets hearings for service fee and rate changes for the upcoming fiscal year, if any are proposed in the approved budget July ►New fiscal year begins annually on July 1 /CityofIowaCity Sign up for email updates at icgov.org/E-subscriptions