HomeMy WebLinkAboutFY2022 Budget Presentation Slides_1.8.21City of Iowa City
FY2022 Budget Proposal
January 9, 2021
2
City Council Budget Review Schedule
June 16, 2020:
City Council Strategic Plan adopted.
Sept 1, 2020:
Council Work Session on Budget Priorities
Jan. 5, 2021:
Capital Improvement Plan Review
Jan. 9, 2021:
Operating Budget Review
Feb. 2, 2021:
Setting of Public Hearing on Proposed Maximum Property Tax
Feb. 16, 2021:
Public Hearing on Budget / Adopts Resolution Setting Max Property Tax
March 2, 2021:
Setting of Public Hearing on Budget
March 16, 2021:
Public Hearing on Budget / Adoption of Budget
March 31, 2021:
Certification with County Auditor
Budget Document Areas of Focus
3Read Proposed Budget at www.icgov.org/budget
Section Pages
Transmittal Letter (Executive Summary)9 –27
Economic Trends 37 –40
Fund Structure and Description of Funds 69 –71
Financial and Fiscal Policies 83 –89
Long Range Financial Planning 90 –93
General Fund Summary 113 –126
Iowa City Fund Structure
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
4
COVID-19 Budget Impact –FY21
5
•Lagging revenue levels,
notable revenue hit in Parking
•Sharp decline in local
development (taxable growth)
•Uncertainty over the pace at
which these trends will return
to normal or if they will
stagnate longer term
•Many households, businesses,
and non-profits financially
strained
City Actions
•FY 2020 Budget: $1.5 million spending cut
•FY 2021 Budget: $3.7 million spending cut
•6 positions frozen from FY 2021 budget
new staff additions
•Delayed water rate increase, suspended
water shut-offs and delinquent charges,
expanded utility assistance program
•Numerous COVID relief programs
launched for households, non-profits and
businesses
COVID-19 Budget Impact –FY22
6
•Largely ‘status quo’ budget recommendation mirroring original FY21
budget
•Modest decrease in City property tax rate & no new fee or rate
increases
•Prioritizing filling authorized, frozen and vacant positions +
recommended increase of 3.00 FTE for Fiscal Year 2022
•Continue use of federal/state/local funds to provide relief to
households, businesses, and social service agencies
•Continue investment in Strategic Plan & Master Plans
Strategic Plan:Investing in Climate Action
7
$0.24 Emergency property tax levy (approx. $1 million per year)
FY 2021 Highlights
•First annual Climate Fest
•Root for Trees program implemented
•Methane Study completed
•New energy-efficiency grant programs
•Approximately 60 acres new prairie seeded
FY 2022 Areas of Focus
•Build on past year’s momentum & projects
•Expand partnerships to reduce emissions
•City LED, HVAC, and solar improvements
•Ongoing public education efforts
•Community Climate Action Grants
Strategic Plan: Investing in Social Justice & Racial Equity
8
•FY 2021: Non-recurring $1 million for SJRE initiatives
•Future Truth and Reconciliation budget
•Expanded community partnerships and trainings
•Social Justice and Racial Equity Grant program ($75,000)
•Expansion of translated City materials
•Year-round intern position in the Human Rights Office to assist with expanded
racial equity training and awareness efforts
•New opportunities & reallocated funds to accelerate community policing:
•Expanded non-profit partnerships to implement Continuum of Responses to
Crisis Calls for service, including prevention, diversion, co-response
•New half-time civilian Immigrant and Refugee outreach position, civilian
supervisor, and civilian public safety communications position
Strategic Plan: Investing in Social Justice & Racial Equity
Hourly Wage Rate Increase
9
•Achieves City Council goal to increase hourly wage to $15/hour over a 3-year period
•Estimated $416,000 expenditure increase to achieve final step from $13.75 to$15/hour
•In total, the phased increase equates to an addition of approximately $952,000 in
recurring annual wage expenses going forward
Step 1: $11.50/hour
(+$261,000 in FY 2020)
Step 2: $13.75/hour
(+$275,000 in FY 2021)
Step 3: $15.00/hour
(+$416,000 in FY 2022)
Estimated total recurring annual cost, beginning in FY22: $952,000
10
General Fund Support for Aid to Agencies Grant Program
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Recommendation
$242,501 $250,000 $501,500 $575,000 $592,250
•Approximately $100,000 in Community Development Block Grant (CDBG) funds is dedicated to
the Aid to Agencies program, in addition to the General Fund support
•FY 2020: Council made a mid-year decision to include a one-time budget increase to fund all
requests from legacy agencies (+54% increase over FY 2019)
•FY 2021: Council again increased General Fund support over historical levels (in addition to
shifting utility fund support to the General Fund)
•FY 2022: Recommends +3.5% increase (recurring annual inflationary increase of 3% beyond FY22)
Strategic Plan: Investing in Social Justice & Racial Equity
Aid to Agencies Grant Program
Strategic Plan:Investing in Affordable Housing
11
Since FY 2016, the City has invested approximately $9.2 million in affordable housing initiatives
•Funds have assisted more than 507 affordable units (excludes public housing and workforce housing tax credits)
•City funds have leveraged $15.5 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 FY2022 budget contains $1 million in General Fund support for Affordable Housing for the third straight year
•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)
Strategic Plan:Development of New Affordable Housing Revenue Streams
12
•Riverfront Crossings fee-in-lieu option
•Tax increment Financing fee-in-lieu negotiations
•Annexation Policy fee-in-lieu negotiations
Recent examples of agreements:
•Riverfront Crossings: $750,000 collected to date
•Foster Road TIF: Estimated revenue of $2.7 million over the next ten years
•Tailwind Development: Anticipated fee-in-lieu of $1.8 million
Strategic Plan:Investments in Roads
•Annual pavement rehabilitation (resurfacing)
•Equipment replacement funds to help the Streets Division improve efficiency and effectiveness of in-house pavement management efforts
•Necessarily increasing our reliance on General Obligation bonds for other large road projects in the CIP
13
Future Road Use Tax Concerns:
•Improving fuel efficiency
•Low fuel prices
•Uncertainty with Census
$-
$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 2025
Annual Pavement Rehabilitation Capital Expenditures
Strategic Plan:Major Road Improvements
Major Upcoming CIP-Funded Road Projects
(In addition to the annual pavement rehab program)
2021: Melrose Avenue Improvements
Benton Street Rehabilitation Project
Orchard Street Reconstruction
2022: Rochester Ave Reconstruction
Gilbert Street Bridge Replacement
Fairchild Street Reconstruction
2023: Dubuque Street Reconstruction
Court Street Reconstruction
2024: Dodge Street Reconstruction
N. Gilbert Street Reconstruction
Park Road Reconstruction
2025: Taft Avenue Reconstruction 14
Strategic Plan:Investing in Critical City Facilities
15
•Facility Reserve Fund created in FY 2019 to
meet growing needs of the community,
improve workspaces for employees and
address limitations to service
enhancements
•Significant facility needs in next decade:
•New Transit and Equipment
Maintenance Facilities
•Renovations at The Center
•New Police Department Facility
•Rebuild Fire Station #3 and Build new
Fire Station #5
•Investments in recreation centers and
aquatic facilities
Fiscal Year Transfer Amount to
Facility Reserve
FY 2019 $2,000,000
FY 2020 $2,000,000
FY 2021 $4,000,000
FY 2022 $1,000,000
Estimated Balance $9,000,000
Park Master Plan Implementation
•Recently Completed:
Wetherby Park improvements
City Park adventure playground
Napoleon Park playground
Scott Park playground and shelter
Fairmeadows Park improvements
•Upcoming Playground/Shelter Improvements:
Chadek Green Park
Glendale Park
Court Hill Park
•Planned accessibility improvements:
Harlocke Hill Park
Oak Grove Park
Ryerson Woods
Thornberry Dog Park
Crandic Park 16
Bike Master Plan Implementation
17
•2021 Bicycle lanes:
•Muscatine Ave
•Benton Street
•Southgate Ave
•Bike Boulevards (8 scheduled for 2021):
•Bowery-Prentiss
•Sandusky-Taylor-Burns
•7th Ave + route to SE Junior High
•Walnut, Sheridan, Summit, S. Summit, Hollywood
•Keokuk 4 to 3 lane conversion
•Gilbert 4 to 3 lane conversion
•Highway 6 Pedestrian Trail (Fairmeadows to Heinz)
•American Legion Road reconstruction with bike lanes
Recommended Staff Changes + Additions
FY 2022 priority: Fill previously authorized staff positions, frozen due to COVID-19
FY 2021 Budget: +15.90 FTE (new positions and temporary to permanent conversions)
FY 2022 Budget: +3.00 FTE
Increase minimum wage for hourly staff to $15/hour: +$416,000 in FY 2022 (approx. $950,000 recurring annually)
18
Position Title FTE Position Supports…
Public Safety Communications
Specialist +1.00 Improving transparency, responsiveness, and proactive
public safety messaging with the community
Civilian Supervisor +1.00 Greater focus on Continuum of Responses Model
Community Outreach
Assistant +0.50 Focused outreach with immigrant and refugee
populations
Scalehouse Operator +0.25 Increased Landfill usage and customer service levels
Buyer I +0.25 Expanding equipment fleet and procurement, inventory,
and disposal needs
Total +3.00 Full-Time Equivalents
Recommended Additions to Core Staff Support
Future Concerns
19
Sustaining our Strong Fiscal Position
20
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. pensions, healthcare)
COVID impact on development & taxable growth
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 FY2022, multi-residential property will be taxed at 67.50%, which equates to a loss of $179 million in taxable value
The loss of taxable value equates to approximately $2.8 million in lost property tax revenue for FY2022
Cumulative loss through FY2022 is projected to be over $11 million without a state backfill
Multi-Residential Property Taxability
21
Residential Rollback Trend
22
The rollback increased
to 56% in FY 2022
A 1% change in the
rollback figure represents
approximately $788k in
tax revenue
78%
64%
81%
68%
55%
48%
44%
53%56%
55%
56%
20%
30%
40%
50%
60%
70%
80%
90%1978198019821984198619881990199219941996199820002002200420062008201020122014201620182020Rollback 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 2023, 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
23
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 56.41%67.50%
FY23 ?63.75%
FY24 ?
State of Iowa Backfill
FY 2022 backfill amount equates to approximately…
15 full-time Firefighter positions
24
•Future of Backfill Remains Uncertain
State lawmakers have previously 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
State Backfill Budget for FY 2022:
General $778,010
Risk $27,897
Library $25,934
Transit $91,248
Emergency Levy $23,052
Employee Benefits $321,207
SSMID $33,989
Debt Service $250,283
Total $1,551,620
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 2020
Building Permit Construction Value (calendar year)
Taxable Growth Trends
25
2010-2011
average:
$88.7M
2012-2015 average:
$161.3M
2017-2019
average: $213.7M
2020
actual:
$87.3M
Other Variable Costs
26
Snow & Ice Management
Average costs for salt, sand, and
overtime for last two snow seasons
were almost $200,000 (+79%) higher
than the prior two years.
Healthcare
Health insurance costs have
increased by $3.5 million (53%)
over the past five years (FY17-FY21)
It’s challenging to predict a full season of
winter weather, therefore we may see
periodic spikes in costs to manage
snow and ice.
Health insurance costs vary year to year.
As a self-insured organization, healthcare
claims add up to real dollars.
Revenue
27
FY22 All Funds Revenue Sources
28
*excludes transfers
Property Taxes
37%
Other City Taxes
4%
Licenses & Permits
1%
Use of Money & Prop
2%
Intergovernmental
20%
Charges for Services
24%
Misc.
5%
Other Financial Sources
7%
Property Taxes
69%
Licenses & Permits
4%
Use of Money & Property
2%
FY22 General Fund Revenue Sources
29
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 (4%) includes
hotel/motel and utility franchise taxes
*excludes transfers
Property Tax Rate Trend
30*FY2022 Proposed
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Tax Val (millions)$2,960 $3,036 $3,137 $3,183 $3,421 $3,543 $3,745 $3,923 $4,258 $4,396
Val % Change 3.93%2.56%3.32%1.46%7.50%3.55%5.72%4.74%8.54%3.24%
Ptax Rate 17.269 16.805 16.705 16.651 16.583 16.333 16.183 15.833 15.773 15.673
Rate % Change -3.21%-2.69%-0.60%-0.32%-0.41%-1.51%-0.92%-2.16%-0.38%-0.63%
15
15.5
16
16.5
17
17.5
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
Property Tax Levy RateTaxable Value (in millions)Taxable Value and Property Tax Rate
FY 2021 Overlapping Tax Rate
31
•The City of Iowa City tax levy rate is
one component of the total property
tax rate property owners 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
each of the last 9 years and our rate
accounts for less than half the total
rate paid by property owners
ICCSD
39%
Johnson
County
17%
Kirkwood
3%
State of Iowa
0%
City of Iowa
City
41%
Percent of Overlapping Tax Rate
Overlapping Tax Rate Trend
32
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 FY21
ICCSD Johnson County Kirkwood State of Iowa City of Iowa City Iowa City Percentage of Total
Property Tax Levy Comparison
City FY2021 Tax Rate FY2012 Tax Rate % Change
FY12-FY21
Waterloo $18.44 $18.53 -0.48%
Council Bluffs $18.26 $17.85 2.30%
Davenport $16.78 $15.53 8.05%
Des Moines $16.61 $16.58 0.19%
Iowa City*$15.77 $17.84 -11.59%
Cedar Rapids $15.66 $15.22 2.87%
Sioux City $14.90 $16.66 -10.57%
Coralville $14.31 $13.53 5.78%
North Liberty $11.04 $11.03 0.06%
West Des Moines $10.99 $12.05 -8.80%
Ames $10.15 $10.84 -6.39%
Dubuque $10.14 $10.45 -2.93%
33* Proposed Iowa City tax rate for FY2022 is $15.67.
Major Revenue Sources: Hotel / Motel
34FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021*FY2022**
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 $1,134,864 $650,860 $1,134,862
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Utility Franchise Tax $901,690 $874,235 $939,387 $976,060 $964,690 $883,652
$820,000
$840,000
$860,000
$880,000
$900,000
$920,000
$940,000
$960,000
$980,000
$1,000,000
Major Revenue Sources: Utility Franchise
City 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 4%
Dubuque 5%
Sioux City 5%
Des Moines 5%35
Iowa City Utility Franchise Tax is currently 1%
Cable TV Franchise
•Revenue levels have been
steadily declining as alternate
forms of media increase in
popularity
•Decline has seemed to bottom out in past few years
•Projected to remain stable at
FY21 level looking ahead
36
$815,503
$773,018 $750,167 $733,644
$685,659 $662,448
$586,428 $581,904
$512,750
FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
budget
Cable Franchise Fee Revenue
Major Revenue Sources: Road Use Tax
37FY2011FY2012FY2013FY2014FY2015FY2016FY2017FY2018FY2019FY2020
RUT 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 $9,163,303
$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)
38*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
FY2021 Estimated
Receipts Purpose
Des Moines 2019 None $33,942,189 50 % Property Tax Relief, 50% Street,
Neighborhood and Public Safety Improvements
Cedar Rapids 2009 2024 $20,959,014 100% Street Repair
Davenport 1989 None $17,826,613 60% Property Tax Relief, 40% Capital
Improvements and Equipment
Sioux City 1987 None $13,394,621 60% Property Tax Relief, 20% Infrastructure
Projects, 10% City Facilities, 10% EDX
West Des Moines 2018 None $2,982,793 50% Property Tax Relief; 50% Quality of Life
Projects
Council Bluffs 1990 None $10,790,301 100% Streets and Sewers
Waterloo 1991 2025 $10,567,505 100% Street Repair
Dubuque 1988 None $9,718,192 50% Property Tax Relief, 20% City Facilities
Maintenance, 30% Special Assessment Relief
Ames 1987 None $8,826,155 60% Property Tax Relief, 40% Community
Betterment
Expenditures
39
All Expenditures by Category
40
$-
$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
FY2022 Expenditures by State Budget Category
excludes transfers
General Fund Expenditures
41
Personnel
75%
Services
18%Contingency
1%
Supplies
3%
Capital Outlay
3%
General Fund Expenditures by Category
(excludes transfers)
General Fund Expenditures
FY21 (Revised)FY22 (Proposed)Percentage Change
Personnel $46,603,433 $47,740,997 2.44%
Services $12,553,726 $11,157,708 -11.12%
Contingency $617,000 $629,000 1.94%
Supplies $1,846,995 $1,797,379 -2.69%
Capital Outlay $2,670,650 $2,201,925 -17.55%
Total Expenditures*$64,291,804 $63,527,009 -1.19%
42
*Excludes Transfers Out
Public Safety Pension Contributions
43*Amended ** Proposed
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021*FY2022**
Fire 961,815 1,052,753 1,226,921 1,289,744 1,208,773 1,158,015 1,178,514 1,223,644 1,198,866 1,318,504 1,363,066
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 1,637,919 1,829,111 1,903,702
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 2,836,786 3,147,615 3,266,768
% Change 31.27%8.35%21.58%1.47%-5.55%-3.69%2.95%4.93%-2.41%10.96%3.79%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
City of Iowa City MFPRSI Contributions
IPERS Pension Contributions
44*Revised **Proposed
FY15 FY16 FY17 FY18 FY19 FY20 FY21*FY22**
IPERS 2,550,271 2,555,490 2,655,816 2,710,906 2,914,700 2,980,688 3,455,884 3,567,895
% Change -0.66%0.20%3.93%2.07%7.52%2.26%15.94%3.24%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
City of Iowa City IPERS Contributions
Debt Service
45
Debt Service
•Debt restructuring and elimination continues to be
a critical component of the strategy to lower the
City’s tax rate
46
State of Iowa limits debt service to no more than 5% of total assessed property value.
Iowa City currently utilizes 19.3% 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 0.96% 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 15.8% of the total levy
Aaa Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3
Series1 247 283 615 477 322 160 78 33 33 14
% 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
Number of CitiesDistribution of Moody's General Obligation Ratings for All US Cities
Moody’s Aaa Rating: All U.S. Cities
47
Iowa City
Aaa Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3
Series1 4 5 12 14 18 11 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
Moody’s Aaa Rating
48
Iowa City
Analysis and Summary
49
Enterprise Fund Balances
Fund Estimated Revenues
and Transfers In
Budgeted
Expenditures and
Transfers out
Estimated Fund
Balance 6/30/21
Restricted,
Committed,
Assigned
Unassigned
Fund
Balance,
6/30/2021
Unassigned Balance as
% of Rev & Trans In
Parking 6,867,526 5,933,876 1,213,100 0 1,213,100 18%
Transit 16,391,239 13,108,330 10,561,636 5,131,700 5,429,936 33%
Wastewater 16,311,005 16,072,949 24,830,493 10,674,758 14,155,735 87%
Water 13,996,917 13,342,158 12,675,393 6,682,875 5,992,518 43%
Refuse 3,943,170 4,033,627 980,065 0 980,065 25%
Landfill 8,690,747 7,314,401 26,312,311 24,754,149 1,558,163 18%
Airport 473,100 404,757 299,005 236,156 62,849 13%
Stormwater 3,245,860 3,638,988 1,011,187 399,000 612,187 19%50
52
FY2021 FY2022
Assessed Valuation $100,000 $100,000
Taxable Valuation $55,074 $56,409
City Levy $15.773 $15.673
Property Taxes $869 $884
Difference $15
$100k used to allow for easy adjustment to an individual’s home value.
FY2021
$869
Property Tax Impact
FY2022
$884
Annual Financial Household Impact
53Based on a residential customer with $100,000 property valuation.
FY2017 FY2018 FY2019 FY2020 FY2021 FY2022
Property Taxes $922 $930 $900 $901 $869 $884
Stormwater $54 $54 $54 $60 $60 $60
Refuse $191 $205 $229 $229 $240 $240
Sewer - 800 cubic feet $433 $433 $433 $433 $433 $433
Water-- 800 cubic feet $362 $362 $380 $399 $399 $419
Total $1,962 $1,984 $1,996 $2,022 $2,001 $2,036
Percent Change 0.3%1.1%0.6%1.3%-1.1%1.8%
-$500
$0
$500
$1,000
$1,500
$2,000
$2,500
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 = $9 million)
Limitations on bonded debt for facilities
Modernize facilities to enhance working conditions and expand services in the future
Significant ten year facility needs:
•New Transit and Equipment Maintenance facilities
•Renovations at The Center
•New Police Department facility
•Relocate Fire Station #3 and build new Fire Station #5
•Investments in recreation centers and aquatic facilities 54
Major Considerations for the City Council:COVID-19 Recovery + Relief
55
•Continued Federal and State funding for relief is uncertain
•In the past year, the City supplemented federal and state relief with local funds for additional household, non-profit and business assistance
•The City has the financial capacity to fund local recovery and relief programs:
Households (rent and utility)
Non-profits
Arts and culture
Business
•Needs may become more apparent in spring and summer after additional federal and state relief packages are considered
Major Considerations for the City Council:Transit Service Expansion
•Route change planning is underway with goal of launching new service in summer of 2021
•Council requested additional information on service enhancements:
Sunday service,
Expanded late night hours
•The City will need to look to new revenue sources to implement the recommendations
Property taxes
Utility taxes
Local Option Sales Tax
Parking fees
•Otherwise, consideration should be given to a one to two-year pilot program using unrestricted fund balance in the Transit Fund 56
Major Considerations for the City CouncilRoadway Maintenance Funding
•Final study complete, presentation to Council pending
•Iowa City’s road condition stacks up very well against other large cities in Iowa
•Maintaining the overall road conditions at current levels will require significant investment beyond our current funding levels
•Council will need to consider supplemental funding or understand likelihood of deterioration of overall pavement ratings
57
Major Considerations for the Council Prior to FY23Local Option Sales Tax (LOST)
58
•Adopted Strategic Plan calls for analysis and decision on this funding source
•LOST generated over $8 million per year for the City after the 2008 flood and
facilitated the completion of the two largest projects in our community’s
history (Gateway Project and Wastewater Plant / Riverfront Crossings Park
Enhancements)
•Iowa City is the only large community in Iowa not utilizing a LOST
•Discussed opportunities include:
Non-profit support
Infrastructure / public facilities
Transit expansion
Property tax relief (50% required by state law)
Next Year’s Budget (FY 2023)
•Slowing growth in our taxable base (COVID impact and normalizing development activity)
•Stable tax and utility rates with potential refuse / recycling rate increase
•Continued effort to expand the Facility Reserve and fund related projects
•Continued expansion of social justice and racial equity efforts
•Implementation of the 2021 Affordable Housing Plan
•Accommodation for transit service expansion decisions
•Implementation of the Recreation and Aquatic Facilities Master Plan
•Implementation of the Pavement Management Program plan
•Continued response to the climate crisis
59
Plan for…
Thank You
62