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Home My WebLink AboutFY22 budget presentationI r 4=4* � 1:4*Ariiiiimikt® -oi®ice-' CITY OF IOWA CITY UNESCO CITY OF LITERATURE City of Iowa City FY2022 Budget Proposal January 9, 2021 City Council Budget Review Schedule June 16, 2020: City Council Strategic Plan adopted. Feb. 16, 2021: Public Hearing on Budget / Adopts Resolution Setting Max Property Tax 3 March 2, 2021: Setting of Public Hearing on Budget it Sept 1, 2020: 0 Council Work Session on Budget 0 Priorities Feb. 2, 2021: 41 Setting of Public • Hearing on Proposed Maximum Property Tax March 16, 2021: 10 Public Hearing on 0 Budget / Adoption of Budget Jan. 5, 2021: Capital r provement Plan Review 3 I Jan. 9, 2021: Operating Budget Review March 31, 2021: Certification with County Auditor Budget Document Areas of Focus 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 Read Proposed Budget at www.icgov.org/budget City of Iowa City Fund Structure Budgetary Funds N on -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 (7101 Capital Projects Equipment (8101 HOME Grant (2110) Transit (7151 Risk Management (8200) Road Use Tax (2200) Wastewater (720*) Information Technology Services (8301 (7301 Central Services (8400) Other SharedWater Revenues (2300) Metro Planning Organization of Johnson County (2350) Refuse Collection (7400) Health Insurance (8500) Employee Benefits (2400) Landfill (7501 Dental Insurance (8600) Airport (7600) Emergency Levy (2450) 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) Iowa City Fund Structure COVID-19 Budget Impact - FY21 • 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 • 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-1 9 Budget Impact - FY22 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 $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 111:4,,,, Climate Action & Adaptation Plan Mirth .robust dinut..ction semis set in August 2619, the creation da CT k Ashore -Commission the adoption el ace.l.rated climpets .ethane earlier this year, and the addition of a Clt.nd. action E ngem ement tip.clett at to the stag, the City ha carried out a series d ohms t• actions in Use lass of .dueattsy Inc.nti Vass regulation, City Fel icy, and apectUc prgj.ets in Neu key area con Wanted pongee MA .emu. pl.4e at Its pope,.. 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CoeealalmkoGrd. bee m Hov.mtn 1.11 awpe nr.arwnrr aemm manna, See arnere morn. ...winner* ening Mame,: Strategic Plan: Investing in Social Justice & Racial Equity • 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 Step 1: $11.50/hour (+$261,000 in FY 2020) Step 2: $13.75/hour (+$275,000 in FY 2021) J Estimated total recurring annual cost, beginning in FY22: $952,000 Step 3: $15.00/hour (+$416,000 in FY 2022) • 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 9 Strategic Plan: Investing in Social Justice & Racial Equity Aid to Agencies Grant Program General Fund Support for Aid to Agencies Grant Program FY 2020 FY 2021 FY 2022 Recom endation $292,501 $250,000 $482,500 $528,262 $595,000 • 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% recurring annual inflationary increase 10 Strategic Plan: Investing in Affordable Housing 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 • 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 12 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 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- Future Road Use Tax Concerns: • Improving fuel efficiency • Low fuel prices • Uncertainty with Census Annual Pavement Rehabilitation Capital Expenditures 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 13 Strategic Plan: Major Road Improvements Iiiii•� oho i Major Upcoming CIP-Funded 2021: Melrose Avenue Improvements Road Projects Benton Street Rehabilitation Project (In addition to the annual Orchard Street Reconstruction pavement rehab program) 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 • Facility Reserve Fund created in FY 2019 to meet growing needs of the community, improve workspaces for employees and address limitations to service enhancements Fiscal Year Transfer Amount to Facility Reserve FY 2019 $2,000,000 • Significant facility needs in next decade: FY 2020 • New Transit and Equipment Maintenance Facilities • Renovations at The Center • New Police Department Facility FY 2022 $1,000,000 $2,000,000 FY 2021 $4,000,000 • Rebuild Fire Station #3 and Build new Fire Station #5 • Investments in recreation centers and aquatic facilities Estimated Balance $9,000,000 Park Master Plan Implementation Recently Completed: Wetherby Park improvements City Park adventure playground Napoleon Park playground Scott Park playground and shelter Fairmeadows Park improvements Upcoming Playground/Shelter Improvements: Chadek Green Park Glendale Park Court Hill Park Planned accessibility improvements: Harlocke Hill Park Oak Grove Park Ryerson Woods Thornberry Dog Park Crandic Park .11,144 tpiesber J9..ij L Nali:I, 16 Bike Master Plan Implementation • 2021 Bicycle lanes: • Muscatine Ave • Benton Street • Southgate Ave • Bike Boulevards (8 scheduled for 2021): • Bowery -Prentiss • Sandusky -Taylor -Burns • 7th Ave + route to SE Junior High • Walnut, Sheridan, Summit, S. Summit, Hollywood • Keokuk 4 to 3 lane conversion • Gilbert 4 to 3 lane conversion • Highway 6 Pedestrian Trail (Fairmeadows to Heinz) • American Legion Road reconstruction with bike lanes Near -Term Projects SIM edbrar Summeln nuringinn Y 53927 WHIST Burlington to B>wery 53934 memo 4ilbertto syezrroreJ 5382; (AIWA Marlette M_Cellilter 4.3 S385,- dIIKMNIEGNN Scan35Taft 5/. 331547 660/11 Ureerrmood to Mormon Trek lir S3S3 MaNEe®161ERSON CC/ ul WwaG r+ Bike Master Plan Projects Immediate -Term Projects S382T NNeceer OlurGileeen x„ 4.3 S4827 N11.O15,111_51 MalketlMCourt 4.3 5182T 1.fl0111EU Nealipi rg tQPdd Blkelanes 53668 MON rt x MCYosa 39117.M9 4.3 5,571 r«e,ae 4.3 seee =Mew 6rat BLVD 5ee v n tourvi CNG Inten-ecmant. ConnKeim tcl Rr 9927 %NPUROINII .2 :AYEMIeese Bevwnio9a4ea on .� S942 6EINEVSUW919N071N BLVD R4225 NIGIfWNMI Project Category Eike lane .� Ellfferedtik lace 4.3 4 lanete 3 3anecoreersion Btvo Eicydetaulevard 5 .5 Matti 84225 7NI151 C 53827 GatfCe11L 10 .....___ - 811 4_0. im .. .... [ x517 - __. _. 93677 ;3057 rexem( ;3857 LAMM 5380 _ 53827 1238152 N MEM 105254 55 C0ElitrvUt1PL1$tati6 CamplEted Plaeeed' Construction2019 • ASP 17 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) Recommended Additions to Core Staff Support Position Title FTE Position Supports... Public Safety Communications +1.00 Specialist Improving transparency, responsiveness, and proactive public safety messaging with the community Civilian Supervisor +1.00 Greater focus on Continuum of Responses Moc el Community Outreach Assistant +0.50 Focused outreach with immigrant and refugee populations Scalehouse Operator +0.25 Increases Landfill usage anc customer service levels Buyer I +0.25 Expanding equipment fleet and procurement, inventory, and disposal needs Total +3.00 Full -Time Equivalents Future Concerns . Sustaining our Strong Fiscal Position Commercial backfill from State of Iowa continues to be vulnerable Volatile expense items (e.g. pensions, healthcare) Multi -residential taxability continues to erode COVID impact on development & taxable growth Uncertain `residential rollback' (taxable percentage of home value) 2024 cliff - preparing for sharp, immediate decline in multi - residential taxability 20 Multi -Residential Property 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 Toss 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 21 Residential Rollback Trend The rollback increased to 56% in FY 2022 A 1% change in the rollback figure represents approximately $788k in tax revenue 90% 80% 78% 70% 64% 60% 50% 40% 44% 30% Rollback by Assessment Year 81% 68% 55% 48% 53% 56% 56% 20% 55% a0 O N Nr %o a0 O N d' %al a0 O N Nr %o a0 O N a0 O 1. a0 a0 a0 4)0 a0 0• o• o% o% oo O O O O O N o% o, o, o% o% o, o, o, o% o% o, O O O O O O O O O O O N N N N N N N N N N N 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 Residential Multi -Residential 23 I\VI11VM •_ 11~11IdMVIN. FY 14 52.82% 100.00% FY 15 54.40% 95.00% FY 16 55.73% 90.00% FY 17 55.63% 86.25% FY 18 56.94% 82.50% FY 19 55.62% 78.75% FY20 56.92% 75.00% FY21 55.07% 71.25% IFY22 56.41% 67.50% I FY23 ? 63.75% FY24 ? 23 State of Iowa Backfill 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 FY 2022 backfill amount equates to approximately... 15 full-time Firefighter positions State Backfill Budget for FY 2022: General Risk Library Transit Emergency Levy Employee Benefits SSMID Debt Service $778,010 $27,897 $25, 934 $91,248 $23,052 $321,207 $33,989 $250,283 otal $1,551,620 25 Taxable Growth Trends 400,000,000 350,000,000 300,000,000 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 0 Building Permit Construction Value (calendar year) 2010-2011 average: $88.7M 2012-2015 average: $161.3M la ■ ■ 2017-2019 average: $213.7M 2020 actual: $87.3M 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Other Variable Costs 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. 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 vary year to year. As a self-insured organization, healthcare claims add up to real dollars. Health insurance costs have increased by $3.5 million (53%) over the past five years (FY17-FY21) J 26 Revenue FY22 All Funds Revenue Sources *excludes transfers Charges for Services 24% Intergovernmental 20% Use of Money & Prop 2% Licenses & Permits 1% Property Taxes 37% Misc. `5% Other City Taxes 4% Other Financial Sources 7% 28 FY22 General Fund Revenue Sources *excludes transfers Charges for Services (2%) include 1111 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 Use of Money & Property 2% Licenses & PermitsY 4% Other City Taxes (4%) includes hotel/motel and utility franchise taxes Miscellaneous (11%) includes chargebacks to CIP and Enterprise funds, parking fines, library fines, and court charges related to code enforcement r Financing Sources (1%) are primarily loans or sale of assets Property Taxes 69% 29 s ■ Property Tax Rate Trend Taxable Value (in millions) $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Es 1 r Taxable Value and Property Tax Rate r T 1 N 1 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% fPtax 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% *FY2022 Proposed — 17.5 17 16.5 16 15.5 15 Property Tax Levy Rate 30 FY 2021 Overlapping Tax Rate • 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 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 State of Iowa 0% Kirkwood 3% Percent of Overlapping Tax Rate City of Iowa City 41% Johnson County 17% ICCSD 39% *The State of Iowa has a special levy of $0.0031/$1,000 of taxable value 31 r Overlapping Tax Rate Trend $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 ■ a i 1 1 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 m ICCSD Johnson County m Kirkwood m State of Iowa City of Iowa City Iowa City Percentage of Total 44.50% - 43.50% 42.50% - 41.50% - 40.50% - 39.50% 38.50% 32 Property Tax Levy Comparison City FY2021 Tax Rate FY2012 Tax Rate %Change FY 12- 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 $15.66 $17.84 $15.22 -11.59% 2.87% Cedar Rapids 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% * Proposed Iowa City tax rate for FY2022 is $15.67 33 -1 -1 Major Revenue Sources: Hotel / Motel $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 FY 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 $1,057,38 $1,078,76 $1,136,71 $1,045,68 $1,301,82 $1,134,86 $650,860 $1,134,86 R ■ 1 34 Major Revenue Sources: Utility Franchise $1,000,000 $980,000 $960,000 $940,000 $920,000 $900,000 $880,000 $860,000 $840,000 $820,000 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 Iowa City Utility Franchise Tax is currently 1% r b. • �i 4 1 11. 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% 3 5 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 $815,503 Cable Franchise Fee Revenue $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 36 Major Revenue Sources: Road Use Tax $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 -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 37 1 Year Effective Local Option Sales Tax (LOST) City Des Moines Cedar Rapids Davenport Sioux City West Des Moines Council Bluffs Waterloo Dubuque Ames Sunset Year FY2021 Estimated Receipts 50 % Property Tax Relief, 50% Street, 2019 None $33,942,189 Neighborhood and Public Safety Improvements 2009 2024 $20,959,014 100% Street Repair 60% Property Tax Relief, 40% Capital 1989 None $17,826,613 Improvements and Equipment 60% Property Tax Relief, 20% Infrastructure 1987 None $13,394,621 Projects, 10% City Facilities, 10% EDX 50% Property Tax Relief; 50% Quality of Life 2018 None $2,982,793 Projects 1990 None $10,790,301 100% Streets and Sewers 1991 2025 $10,567,505 100% Street Repair 1988 None $9,718,192 50% Property Tax Relief, 20% City Facilities Maintenance, 30% Special Assessment Relief 60% Property Tax Relief, 40% Community .il 1987 None $8,826,155 Betterment *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. 38 Expenditures All Expenditures by Category $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 510,000,000 $- FY2022 Expenditures by State Budget Category excludes transfers Public Safety Public Works Culture & Community & General Debt Service Capital Business Type Recreation Economic Government Projects Activities Development General Fund Expenditures General Fund Expenditures by Category (excludes transfers) Services 18% Personnel 75% Contingency 1% ,Supplies 3% Capital Outlay 3% General Fund Expenditures 1 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% 5* $64,291,804 $63,527,009 -1.19% *Excludes Transfers Out 42 1 i 1 Public Safety Pension Contributions 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1 City of Iowa City MFPRSI Contributions 500,000 0 JIM 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 1,251,1 1 1 1,344,954 1,688,246 1,668,273 1,585,142 1,532,865 1,591,762 1,683,193 1,637,919 1,829,1 1 1 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% *Amended ** Proposed 43 PERS Pension Contributions 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 City of Iowa City (PERS Contributions r 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% *Revised **Proposed 44 Debt Service Debt Service Debt restructuring and elimination continues to be a critical component of the strategy to lower the City's tax rate 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 46 Moody's Aaa Rating: All U.S. Cities Distribution of Moody's General Obligation Ratings for All US Cities I VV 600 500 v j 400 `o v 2 300 D Z 200 100 0 Iowa City 1 Aaa Aal Aa2 Aa3 Al A2 A3 Baal Baa2 Baa3 Seriesl 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% 47 Moody's Aaa Rating 20 18 Distribution of Moody's General Obligation Bond Ratings for Cities in Iowa 1V 14 m t2,--'�12 10 8 4 6 4 2 0 Iowa City Aaa Aal Aa2 Aaa Al A2 A3 Baal Baa2 Baa3 ■ Series l 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% 48 Analysis and Summary Unassigned Balance as % of Rev & Trans In Enterprise Fund Balances 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 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 13,996,917 13,342,158 24,830,493 10,674,758 12,675,393 6,682,875 14,155,735 5,992,518 87% 43% 8,690,747 7,314,401 26,312,311 24, 754,149 1,558,163 18% 473,100 3,245,860 404,757 3,638,988 299,005 236,156 1,01 1,187 399,000 62,849 13% 612,187 19% 50 Property Tax Impact 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. 52 Annual Financial Household Impact $2,500 $2,000 $1,500 $1,000 $500 $0 !Li 3 '1:i -�Jvmo 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% Based on a residential customer with $100,000 property valuation. 53 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 • Rebuild Fire Station #3 and Build new Fire Station #5 Investments in recreation centers and aquatic facilities Major Considerations for the City Council: COVID-1 9 Recovery *Relief • 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 55 Major Considerations for the City Council: Transit ServiLe 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 Major Considerations for the City Council Roadway Maintenante 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 CITY OF IOWA CITY Pavement Management Program FY 2020-2024 I4Ra HRGreen. ,r e (.I IY 5 7 Major Considerations for the Council Prior to FY23 Local Option, Sales Tax (LOSS) 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) 58 Next Year's Budget (FY 2023) Plan for... 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 Im lementation 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 Thank You