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FY2022 Budget At-a-GlanceChart #1 – Taxable Value and Levy Rate Chart #2 – Annual Financial Impact to Residential Households 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 Taxable Value (in millions)Taxable Value and Levy Rate 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 Annual Financial Impact to Residential Households 1 City of Iowa City FY2022 Budget At-a-Glance July 1, 2021 to June 30, 2022 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 2022 (FY2022) and provides an outlook for future years. Preparation of the City budget was guided by the City’s primary financial goals: 1 Dedicate resources towards advancing City Council’s Strategic Plan priorities and adopted Master Plans 2 Seek fiscal stability through competing financial pressures of the COVID-19 pandemic and the final years of the phased 2013 tax reform 3 Support households and businesses through the pandemic’s impact with fixed rates, fees, and continued efforts to lower the City’s tax rate Fiscal Year 2022 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, $15.67 per $1,000 of taxable value • Rate decrease of $.10 from FY2021 • Tenth consecutive rate decrease 2 1Strategic Priorities and the Budget The Fiscal Year 2022 budget was prepared with the strategic and master plans serving as a guide. The City recognizes the shared relationship between funding decisions and the organization’s prioritized plan. 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. Community Input This budget was developed based on feedback collected throughout the year from regular planning and engagement efforts, City Council listening posts, City board and commission recommendations, and direct input from stakeholders and residents to City Council and staff. This budget incorporates diverse priorities while adhering to financial best practices and planning for long-term community needs. 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 Chart #1 – Taxable Value and Levy Rate Chart #2 – Annual Financial Impact to Residential Households 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 Taxable Value (in millions)Taxable Value and Levy Rate 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 Annual Financial Impact to Residential Households 3 2 Continued Response to 2013 Property Tax Reforms Several state property tax reform measures continue to increase pressure on the City’s budget: ►Declines in the taxable percentage of multi-residential property will continue to be phased in through 2024. The City does not receive property tax replacement payments (backfill) from the state for the this lost tax revenue. ►The taxable percentage of commercial and industrial properties has also been rolled back. The City receives a state backfill payment of $1.5 million annually for this lost revenue. However, this budget considers the State Legislature’s ongoing efforts to end backfill payments to cities. ►The City’s ability to weather the tax reform thus far has been due to robust growth in taxable valuations in recent years. However, the City’s ability to sustain such strong growth is uncertain. ►Iowa City has taken steps to manage the impacts of tax reform, but maintaining service levels will require continued prudent decision-making over the next several years.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 FY2022, there are not rate or fee increases. A 5% water rate increase approved in 2019 was delayed until FY2022 due to the pandemic.*Property taxes based on house value of $100,000 Chart #3 – General Fund Revenues & Other Financing Sources Chart #4 – General Fund Expenditures by Category Property Taxes 69%Other City Taxes 4% Licenses & Permits 4% Use of Money & Property 2% Intergovernmental 7% Charges for Fees & Services 2%Miscellaneous 11% Other Financing Sources1%FY2020 Revenues & Other Financing Sources excludes transfers Personnel 75% Services 18% Contingency 1% Supplies 3% Capital Outlay 3% General Fund Expenditures by Category excludes transfers Chart #3 – General Fund Revenues & Other Financing Sources Chart #4 – General Fund Expenditures by Category Property Taxes 69%Other City Taxes 4% Licenses & Permits 4% Use of Money & Property 2% Intergovernmental 7% Charges for Fees & Services 2%Miscellaneous 11% Other Financing Sources 1% FY2020 Revenues & Other Financing Sources excludes transfers Personnel 75% Services 18% Contingency 1% Supplies 3% Capital Outlay 3% General Fund Expenditures by Category excludes transfers 4 General Fund Highlights The General Fund is the City’s primary operating fund and represents approximately one-third of the total budget. A breakdown of revenue sources is provided in the chart to the right. On the expense side, General Fund operations largely consist of personnel expenses. In the FY2022 budget, 75% of General Fund expenditures are personnel related. A breakdown of expenditures by category is provided in the chart below. General Fund Revenues & Other Financing Sources excludes transfers 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 FY2022 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: ►$1 million for the Affordable Housing Fund ►Use of Emergency Levy to fund Climate Action Plan implementation including energy efficiency facility improvements, business incentives, and $50,000 in community grants ►Continued micro-loan resources and funding for small businesses ►$75,000 for the Racial Equity Grant program ►Accessibility improvements including sidewalk and curb ramp improvements, City park and facility improvements, closed captioning technology, and sponsorship for the annual ADA Celebration ►Completes phased increase of City’s minimum wage for temporary employees to $15/hour ►3% increase to annual Aid to Agencies program (bringing total to $725,250 for FY2022) ►Investment in accelerating the City’s community policing efforts, including a co-response model and prevention, diversion, and outreach initiatives and partnerships ►Funding to provide fair housing testing and training in compliance with federal, state, and local discrimination laws ►Continued expansion of translated City documents and implicit bias training for City staff, boards and commissions, and the community ►Expanded arts, culture, and recreation opportunities including a pilot recreation transportation program and global multi-cultural celebration FY13 FY14 FY15 FY16 FY17 FY18 FY19 *FY20 *FY21 *FY22 Debt (millions)61 67 62 58 67 67 67 68 68 69 % of Val 1.33%1.44%1.28%1.17%1.25%1.22%1.14%1.11%0.99%0.97% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 52 54 56 58 60 62 64 66 68 70 Millions of Dollars ($)General Bonded Debt Outstanding and Percent of Total Valuation 5 Debt Service Fund Highlights A reduction in the debt service levy means Iowa City spends less on interest payments and more on providing services to the community. 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. At the end of FY2022, the City’s outstanding debt is projected to be $68 million. 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 FY2022 by $0.10 from the FY2021 levy. ►Total outstanding debt is trending downward - FY2022 anticipates a decrease of $1.1 million from FY2020 in total outstanding debt by year end. ►Future general obligation bond issues, including 2% for bond issuance costs, are estimated at $11.4 million for FY2021 and $12.4 million for FY2022. *Budgeted and projected amounts 6 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: 2021 ►Bike Master Plan implementation (each year of the CIP) ►Benton Street rehabilitation ►Melrose Avenue improvements ►Curbside collections automated truck ►Smart parking meter replacements ►Highway 6 Trail extension ►Glendale Park and City Park ball field improvements ►Pedestrian Mall playground replacement 2022 ►Rochester Avenue reconstruction ►Chadek Green, Court Hill, and Whispering Meadows park improvements ►Gilbert Street Bridge replacement ►Off road bike trail development ►Fairchild Street reconstruction ►Parking ramp automated equipment 2023 ►Willow Creek Trail replacement ►Kiwanis and Happy Hollow Park improvements ►Dubuque Street reconstruction ►Mercer ball diamond improvements ►Court Street reconstruction ►Rohret South Sewer ►Wastewater Digester Complex rehabilitation ►Future Landfill cell and Landfill building replacement ►Kirkwood to Capitol Street connection ►Transit facility relocation ►Rec Center ADA improvements 2024 ►Dodge Street reconstruction ►Park Road reconstruction ►North Gilbert Street reconstruction ►Hunter’s Run and Upper City Park improvements ►Landfill Dual Extraction System expansion ►Airport apron expansion ►Palisades or Stone Bridge Park development ►Library furnishings replacement 2025 ►Highway 6 Trail extension ►Lower City Park and Hickory Hill Park improvements ►City Park pool replacement ►Taft Avenue reconstruction ►Burlington Street bridge replacement ►Napoleon Park softball field renovation ►ADA elevator improvements ►Happy Hollow, Benton Hill, and College Green Park playground replacements *Although projects are planned to begin in the listed year, many will span multiple years $24,803,470 Capital Budget FY2022 $184,333,930 Five-year Capital Improvement Plan (CIP) 2021-2025 For more information about the Iowa City budget, you can find the full budget document and historical budget documents at www.icgov.org/budget 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