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Home My WebLink AboutFY24 budget presentationtem: WS STAFF PRESENTATION TO FOLLOW: 1 r I + 'i;�ui1 h CITY OF lOVVA CITY 410 East Washington Street Iowa City, Iowa S2240-1826 (319) 356-5000 (3I9) 356-5009 FAX www.icgov.org �r I Ilif, '- aft CITY OF IOWA CITY UNESCO CITY OF LITERATURE CITY OF IOWA CITY FY2024 Budget Proposal January 7, 2023 Sept 6, 2022: December 6, 2022: Council Work Session City Council Strategic on Budget Priorities Plan adopted. Feb. 7, 2023: Feb. 21, 2023: Jan. 11, 2023: Public Hearing on Capital Improvement Setting of Public Budget / Adopts Plan Review Hearing on Proposed Resolution Setting Max Maximum Property Tax Property Tax March 7, 2023: March 31, 2023: Setting of Public Public Hearing on _ Certification with Budg/ Adoption of Hearing on Budget County Auditor Budget Document Areas of Focus Transmittal Letter (Executive Summary) Economic Trends Fund Structure and Description of Funds Financial and Fiscal Policies Long Range Financial Planning General Fund Summary W W W.ICGOV.ORG/BUDGET 10-27 36-39 275-280 289-295 296-299 318-329 Budgetary Funds ffc; dgetary Finds Special Debt Service Enterprise Capital Internal General Fund Revenue Funds Fund Funds Projects Fund Service Funds 11111111111111111116— General (1l]"] CDBG C2 101)) 7e6t Service Parking (711)') 111 CapBal Projects Equipment{B 10'j HOME Grant (21 10) Trans& (715') Risk Management (6200) Rnad J. Tax Information (22DO) Wastewater (720') Tech na" Sertices 630' Ott. Shared W aav [730'} Central Services Revenues(231)1)) (84(i0] Metro Planning Organa n of Refuse CDIIe n Heats Insurance Johnson County (7400} {65(10} 350 Employee Benefits Landfill [750'] Dental Insurance (2401)} {69D0} Emergency Levy Airport [7900] (2450} Affordable Housing Stormwa� (77410) Agency Fund (2500} kawa City Property Housng AaHnrity Management (25 1 D} (79") Projec[Green g1C'2] Tax Inc ent Financing (29") SelfS uppordng Municipal [r! me r'arxry r+.rm olo .gym yuarcr ars e.a>Tri..a n trc Mry l Repttt. but nI rs Vng prers dameW Improvernenl D'ertricL marapehal rearsonrs. (2821)) Major fords Iowa City Fund Structure FISCAL YEAR 23 BUDGET REVIEW FY23 Budget Review At the time of approval (March 2022): • Plateauing tax rate (11th straight tax rate reduction) • Minor utility rate adjustments (curbside waste/recycling/compost) • Declining taxable value (-.46%) • Status quo department budgets (General Fund increase over FY22 original= 1.25% excluding transfers) • FY 24 projected to be very similar Unexpected challenges since budget adoption: • Additional state backfill created with new legislation passed in 2022 • Inflationary pressures causing capital and operating budgets unanticipated strain • Capital reserves utilized to keep projects on schedule • Capital and operating budgets experienced diminished buying power • New service pressures emerging that will impact future property tax and utility payers • Supply chain issues causing price increases and significant delays in product deliveries (vehicles, water meters, playgrounds, traffic signal equipment, hardware, etc.) FISCAL YEAR 2024 FINANCIAL CHALLENGES Navigating Converging Financial Challenges V Multi -residential taxability dropping precipitously to match residential Two-year t• • - Significant volatility property growth in key expense lowest in decade lines (inflation) State of Iowa Commercial & Industrial Backfill • 2013 tax reform reduced commercial and industrial taxability from 100% to 90% • The State "backfilled" this loss and the City has been receiving approx. $1.5 million in backfill payments annually (equivalent to about 15 HE firefighters) • State Legislation passed during the 2021 Session ends backfill payments • Iowa City's backfill payments will phase out over 5 years, beginning in FY23 • The City will lose approximately $340K in FY 2023 and over $7 million over 5 years C&I Backfill Budget for FY 2024: General $469,231 Risk $16,825 Library $15,641 Transit $55,034 Emergency Levy $13,748 Employee Benefits $191,564 SSMID (Downtown) $0 Debt Service $142,168 Total $904,211 M State of Iowa Commercial & Industrial Backfill 2013 tax reform reduced commercial and industrial taxability from 100% to 90% The State "backfilled" this loss and the City has been receiving approx. $1.5 million in backfill payments annually (equivaient to aaout i o riretignTers) State Legislation passed during the 2021 Session ends backfill payments Iowa City's backfill payments will phase out over 5 years, began in FY23 • The City will lose approximately $330K in FY 2023 and over $7 million over 5 years $1,800,000 $i,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 C&I Backfill Fyy� F�y� F�ryO �y,Ly �C�ry•', F�ry� �y�� *NEW* State of Iowa Business Property Tax Credit Backfill HF 2552 passed during 2022 legislative session converts Business Property Tax Credit to a partial property tax exemption with the value reimbursed by the State to local governments. State has budgeted $125 million for reimbursements through FY29 and pro -ration of reimbursements will begin in FY30 Through FY29, Iowa City's reimbursement will equate approximately $700k+ annually Legislative Services Agency Fiscal Note predicts proration in FY30 will result in negative impact on local government revenues BPTC Backfill Budget for FY 2024: General $350,608 Risk $12,572 Library $11,687 Transit $41,121 Emergency Levy $8,657 Employee Benefits $144,751 Debt Service $107,280 Total $676,676 I 2024: Multi -Residential Cliff Prior to the 2013 State property tax reform, multi -residential properties were classified as commercial and taxed at 1007o of value In FY 2024, multi -residential properties will be collapsed into the residential classification at taxed at 56.497o of value • The taxability of multi -family property has dropped 43.51 % over the last 10 years. Multi -residential properties account for approximately 87o of Iowa City's taxable valuation M a� 0 rq a� 0 NO0 rq L9 M i Residential Multi -Residential Rollback Rollback 52.82% 100.00% FY14 FY15 54.40% 95.00% FY16 55.73% 55.63% 90.00% 86.25% FYI FY18 56.94% 82.50% FYI 55.62% 78.75% FY20 56.92% 75.00% FY21 55.07% 71.25% FY22 56.41% 67.50% FY23 54.13% 63.75% 7FY24 76.49% 56.49% M a� 0 rq a� 0 NO0 rq L9 M • Multi -residential property was previously taxed as Commercial property (100%) but has been being taxed at a declining rate since FYI In FY2024, multi -residential property will be classified as residential, which will be taxed at 56.49% of assessed value. This equates to an estimated loss of approximately $150 million in taxable value The loss of taxable value equates to an estimated $3 million in lost property tax revenue for FY2024 Cumulative loss through FY2024 is estimated to be over $17 million without a state backfill Residential Rollback Trend The rollback will increase to 56.49% in FY 2024 (Assessment Year 2023) A I% change in the rollback figure represents approximately $925,000 in tax revenue Rollback by Assessment Year 90% 81% 78% _ a0 I" °r° 70% 6o% 50% 40% 30% 20% 10% 0% 64% 44% 0 53% 56% _ 5 � 56% � 54% of O1 o H N M .t l kD n W O1 o H N M .t l l0 r� W O1 o H N M .¢ V l0 n W O1 o H N M f V l0 n W O1 o H N r� n W W W W W W W W W W Ol Ol Ol Ol Ol Ol Ol Ol m m O o o O o O O O o o H H H H H H H H H H N N N Ol Ol Ol Ol Ol Ol Ol Ol Ol Ol Ol Ol Ol Ol Ol Ol Ol Ol Ol Ol Ol O1 N N N N N N N N N N N N N N N N N N N N N N N H H H H H H H H H H H H H H H H H H H H H N Taxable Growth Trends Building Permit Construction Value (calendar year) 400,000,000 350,000,000 300,000,000 250,000,000 2012-2015 average: 200,000,000 $161.3M 2010-2011 150,000,000 average: $88.7M 100,000,000 50,000,000 0 2010 2011 2012 2013 2014 2015 2017-2019 average: $213.7M 2022 actual: $152.7M 2016 2017 2018 2019 2020 2021 2022 Changes in Taxable Valuation Pattern $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% Property in Iowa is reassessed in odd numbered years & these values hit the tax rolls approx. 18 months later. Thus, the following odd numbered year typically sees an increase in taxable value. FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Taxable Val $3,136 $3,182 $3,421 $3,542 $3,745 $3,923 $4,258 $4,39 $4,37 $4,47 -a-Val % Change 3.32% 1.46% 7.50% 3.55% 5.72% 4.74% 8.54% 3.24% -0.46% 2.28% 2 -yr. Val % growth: 4.8% 11% 10.4% 11.7% 1.8% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% Property in Iowa is reassessed in odd numbered years & these values hit the tax rolls approx. 18 months later. Thus, the following odd numbered year typically sees an increase in taxable value. Volatile Variable Costs Property & Liability Insurance The City experienced significant increases in property and liability insurance premiums as well as deductibles in FY23 and FY24. Property & Liability Insurance Premiums increased 107% (+663K) over the past five years (FY19 through FY23). The Cyber Liability Deductible increased 300% (+75K) in five years Fuel Supplies and services costs continue to be up across the board, including fuel. Despite the City's efforts to reduce fuel consumption, cost increases significantly impact the FY23 Revised and FY24 Proposed Budgets. FY24 gasoline and fuel costs are budgeted at a 54% increase over FY22. FY24 heating fuel costs budgeted at an 87% increase over FY22. 2023 Legislative Session Recent State actions: • 2013: Significant property tax reform passed and phased in through FY24 • 2o1g Legislation passed to require additional public hearing and two- thirds vote to exceed 2% in certain property tax levies • 2020: Legislation passed to phase out Commercial/Industrial Rollback Reimbursement Payments ("backfill") by FY27 • 2021: Legislation creates new backfill which may cease by end of decade Iowa lawmakers will tackle property taxes in 2023, committee leader says Republican says he'll also push to fill water quality, recreation fund • Erin Murphy Dec.2, 2022 426 pm � Key Republican in Iowa House says 'substantial' property tax relief a 2023 priority DECEMBER g, 2022 BYO. KAY HENDERSON Iowa Senate GOP to be `Laser focused' on property tax reform DECEMBER 5, 2022 BY 0_ KAY HENDERSON REVENUE FY24 All Funds Revenue Sources *excludes transfers Intergovernmental 17% Use of Money & Prop, i% Licenses & Permits, i°/' IOther City Taxes, 4% Property Tax Rate Trend Property Tax Rate vs. Valuations •�• o $4,500 $4,000 F $3,500 $3,000 $2,500 $2,000 o $1,500 Z $1,000 $500 ~ $0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24* Tax Value (millions) $3,03 $3,13 $3,18 $3,42 $3,54 $3,74 $3,92 $4,25 $4,39 $4,37 $4,47 Val % Change 2.56%3.32%1.46%7.50%3.55%5.72%4.74%8.54%3.24%F-0-46 2.28% +Ptax Rate 16.81 16.71 16.65 16.58 16.33 16.18 15.83 15.77 15.67 15.63 15.63 Rate % Change -2.69 -0.60 -0.32 -0.41 -1.51 -0.92 -2.16 -0.38 -1.01 -0.26 0.00% *FYzozq Proposed 17 16.8 iDO 16.4 16.2 >< 16 15.8 15.6 0 15.4 0_ ib'X� 15 verlapping 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 every year from FYI - FY23 and remains stable in FY24. Our rate accounts for less than half the total rate paid by property owners Consolidated Tax Rate: Percentage of Levy Share of all Taxing Bodies State of Iowa o% Kirkwood 4% Jonnsun County* ICCSD i6% 39% W The State of Iowa has a special levy of 80.0033/83,000 of taxable value *Inc IudesJohnson County, City Assessor, and Agriculture Extension Levies $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 OVERLAPPING TAX RATE TREND FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY1g FY20 FY21 FY22 FY23 MICCSD =Johnson County* Kirkwood State of Iowa m City of Iowa City Qlowa City Percentage of Total *Includes Johnson County, City Assessor, and Agriculture Extension Levies 44.50% 43.50% 42.50% 41.50% 40.50% 39.50% 38.50% Property Tax Levy Comparison city FY2023 Tax Rate . - FY2012 Tax Rate % Change FY12-FY23 Waterloo Waterloo $ 18.97 $18.53 2.38% Council Bluffs $ 17.83 $17.85 -0.14% Davenport $ 16.78 $15.53 8.05% Des Moines $ 16.61 $16.58 0.18% Cedar Rapids Iowa City* $ 16.03 $ 15.63 $15.22 :- $16.66 5.30% -7.45% Sioux Ci $ 15.42 Coralville $ 14.31 $13.53 5.78% North Liberty $ 11.32 $11.03 2.62% West Des Moines $ 10.95 $12.05 -9.13% Ames $ 9.83 $10.84 -9.32% Dubuque $ 9.72 $10.45 -7.02% * Proposed Iowa City tax rate for FY2024 is $15.63. Major Revenue Sources: Hotel /Motel $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Hotel Motel Tax $1,057,38 $1,078,76 $1,136,71 $1,045,68 $1,301,82 $1,134,86 $938,048 $1,708,18 Major Revenue Sources: Utility Franchise $1,400,000 Iowa City Utility Franchise Tax is currently I % $1,200,000 $1,000,000 $0 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 ■ Utility Franchise Tax $976,060 $964,690 $883,652 $993,852 $1,148,998 City Davenport Franchise Fees Ratel 0% West Des Moines 0% Ames 0% Coralville 1% Iowa City 170 North Liberty 2% Council Bluffs 2% Cedar Rapids 3% Waterloo 4% Dubuque 5% Sioux City 5% Des Moines 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 around $580k annually Cable Franchise Fee Revenue $773,oi8 oy� oy5 oy� oy� oti'b otic otio oyti oryti yea yea ti ti Major Revenue Sources: Road Use Tax Road Use Tax Receipts $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $o FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FYzozo FY2021 FYzozz —Revenues $6,589,iii $6,744,663 $7,23o,663 $8,320,117 $8,672,279 $8,426,502 $8,820,138 $9,163 303 $10 ,076,97 $9,900,P6 Major Revenue Sources: Road Use Tax $12,000 $10,000 v $8,000 0 $6,000 v $4,000 v $2,000 $0 +2.37% +15.07% -2.83% +4.67% +3.89% in +9.97% FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 RUT Revenues RUT YoY%Chg. FY2022 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% Approximately $3.3 million (-5i%) increase in annual Road Use Tax receipts over the past decade (driven by State of Iowa tax increase and City's population growth) The current Need for pavement repairs, the total cost to address every single roadway distress in the City, bringing the network to Very Good" condition, is approximately $189 Million. That Need is projected fo grow to $472 Million by 2035. S3SUM E300M 22SOM S200M $1 soM Wom SWm $OM Current Need (2019) = $189 Million Projected Need by 2035 = $472 Million Figure ¢9: Projected "Need" Tb.Cs Lgwe displays the exkiYng funding requimd to bring every pavement ip to -Very Cmx: wnddior; te_ YJeed' as weN as & projected Graweh over the next IS Years. Road Use Tax vs. Need + Material Costs • Per 2021 Pavement Management Plan: • Additional $ii million needed each year to keep current conditions steady • Delaying projects can increase rehab costs by 25% or more • Iowa City's Road network value is s6-10 million. • 36.-1% of the City's road network rated Fair, Poor, or Very Poor. • RUT Revenues have only increased $3.3 million over past decade • + 54% ($922k) increase in Concrete costs for FY24 over FY22. Local Option Sales Tax (LOST) 50% Property Tax Relief, 50% Street, Neighborhood Des Moines 2019 None $48,456,183 and Public Safety Improvements Cedar Rapids 2009 2034 $23,307,090 100% Street Repair 60% Property Tax Relief, 40% Capital Improvements Davenport 1989 None $20,026,233 and Equipment 60% Property Tax Relief, 20% Infrastructure Projects, Sioux City 1987 None $14,526,603 10% City Facilities, 10% EDX West Des Moines 2018 None $4,073,190 50% Property Tax Relief; 50% Quality of Life Projects Council Bluffs 1990 None $10,737,300 100% Streets and Sewers Waterloo 1991 2025 $11,078,427 100% Street Repair 50% Property Tax Relief, 20% City Facilities Dubuque 1988 None $10,446,834 Maintenance, 30% Special Assessment Relief Ames 1987 None $9,571,197 60% Property Tax Relief, 40% Community 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. Projected Pavement Condition Effects o-''�uIementing LOST City PCI Projec#ion (LOST) 1110.0 913.0 6D.0 7D.0 $ aD.0 a' 56.0 4D.0 3D.0 2D.0 1D.10 0.0 —$2.5 Million (9ase) —$4.25 Million (D.5% LOST) —$15.25 Million [6.5% LOST+Bq )—$g,5 Million (1% LOST) _1%L45Twf Growth —Max Budget (Base+1%LOST) LOST would generate an estimated $8 - $iz million per year and grow organically overtime. 10 1D0 Do Go �70 Go 50 ao ao 20 o to D —$2.55 Million (13ase) —j4.25 Million {0.5% LDS7j + $5.25 Million (0.5% LOST+Base):j$.5 Million (1% LOST) —196 LOST wf Growth —Max Budget (Base+ I%LCS-9 EXPENDITURES All Expenditures by Category FY2024 All Funds Budgeted Expenditures (by State Budget Category) excludes transfers $30,750,428 $17,5oo,835 $12,745,769 $10,304,058 $12,359,o68 $11210,6go M a Public Safety Public Works Culture & Community & General Debt Service Recreation Economic Government Development $65, 637, 220 $561338,945 Capital Business Type Projects Activities General Fund Expenditures General Fund Expenditures by Category excludes transfers Contingency i% ---.Supplies 3% Capital Outlay i% General Fund Expenditures Personnel I Services Contingency Supplies Capital Outlay *Excludes Transfers Out $ 48,622,959 $ 11,856,425 $ 943,000 $ 1,809,677 1,750,875 $ 50,444,962 $ 12,632,833 $ 1,072,000 $ 2,102,149 $ 1,546,090 +3.75% +6.55% + 13.68% + 16.16% - 11.70% *Dec 2021 — Nov 2022 CPI Increase: +7.1% *Average year -over -year percentage increase in General Fund expenses FY19 - FY23: +3.29% Public Safety Pension Contributions 3500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 City of Iowa City MFPRSI Contributions V FY2013 FY2014 FY2015 FY2o16 FY2017 FY2o18 FY2019 FY2020 FY2021 FY 2022 FY2023* FY2024** ■ Fire 1,052,753 1,226,921 1,289,744 1,208,773 1,158,oi5 1,178,514 1223,644 1,198,866 1,263,192 1,321,941 1,250,248 1,291,66o ■ 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 1637,919 1,651,259 1,668,616 1,737,404 Total 2,212,926 2,397,707 2,915,167 2,958,o16 2,793,915 2,69o,880 2,770,276 2,906,837 2,836,786 2,914,451 2,990,557 2,987,652 %Change 31.27% 8.35% 21.58% 1.47% -5.55% -3.69% 2.95% 4.93% -2.41% 2.74% 2.61% -0.10% *Amended ** Proposed I PERS Pension Contributions City of Iowa City (PERS Contributions 4,000,000 3500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 o — FY16 FY17 FY18 FY1g FY20 FY21 FY22 FY23* FY24** 0Amount 2,555490 2,655,816 2,710,go6 21914,700 2,98o,688 3,055943 3,199,142 3,615,201 3,705,836 ■%Change 0.20% 3.93% 2.07% 7.52% 2.26% 2.52% 4.69% 13.01% 2.51% *Revised **Proposed DEBT SERVICE State of Iowa limits debt service to no more than 5% of total assessed property value. Iowa City currently utilizes 18.357o of the allowed debt limit for General Obligation bonds 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 15.87o of the total levy 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 0.92% of total valuations Moody's Aaa Rating: All U.S. Cities Distribution of Moody's General Obligation Ratings for All US Cities 900 800 v 700 U 0 600 500 Iowa City 400 300 Z 200 100 0 Aaa Aal Aa2 Aaa Al A2 A3 Baal Baal B003 ■ # US Cities 309 405 763 604 378 178 82 40 36 24 of Total 12.45% 1 13.45% 126.97% 1 19.60% 113.95% 1 6.44% 1 3.15% 1 1.29% 1 1.00% 1 0.93% Moody's Aaa Rating: Iowa Distribution of Moody's General Obligation Bond Ratings for Cities in Iowa Aaa Aa1 Aa2 Aaa Az Az A3 Baa1 Baaz Baa3 ■ # IA Cities 4 6 11 16 18 10 5 0 0 0 %of Total 5.71% 7.14% 17.14% 20.00% 27.14% 14.29% 8.57% 0.00% 0.00% o.00% FUND AND FEE ANALYSIS Enterprise Fund Balances Pr Budgeted MOEsti mated Restricted, Unassigned Unassigned Estimate evenues and Transfers In Expenditures Fund Balance Committed, Fund Balance, Balance as% of Asigned 6/30/2023 RjeTransln ® 6,61 1,532 6,737,804 2,301,704 463,702 1,838,002 28% ®11,783,780 11,469,009 12,781,235 11,065,245 1,715,990 15% ® 18,626,176 16,713,257 22,510,530 10,621,201 11,889,329 64% ® 14,835,535 17,194,158 11,364,221 3,985,762 7,378,459 50% ® 4,976,560 4,877,383 1,355,425 0 1,355,425 27% ® 8,737,652 1 1,01 1,361 20,908,872 19,097,743 1,81 1,129 21 913,594 453,307 383,477 291,649 91,829 10% 3,004,538 2,828,481 1,632,877 834,000 798,877 27% Fund Health Status Legend (rating assigned by City): AAA = Good, AA = Adequate, A = Needs Monitoring A A AA AA AA AA AA AA FY 2024 Utility Rate Changes • +4% Water Rate • (approx. $1.50/mo. per home) • +2% Wastewater Rate • (approx. $2.85/mo. per home) • +$2/month Refuse/Recycling Rate • +$0.50/month Stormwater Rate FY 2023 FY 2024 Water (800 cu ft) $419 $436 Sewer (800 cu ft) $433 $442 Refuse $276 $300 Stormwater $60 $66 Total $2,036 $2,127 FY 2024 Other User Fee Changes These user fee changes impact only those who take advantage of these services: • Parking: $5/month Monthly Parking Permit fee increase • Refuse: • Special, bulky item pick-up: $7.50 increase for first item • 24-hour tag rate increases: $13.50 increase for minimum charge • Landfill: • Minimum waste disposal tipping fee increase of +$7 for Iowa City residents and +$7.50 for non-residents. • East Side Recycle Center hourly rental fees: • $10 increase for non -profits, $17.50 increase for all others. • $20 increase for events with alcohol. Potential Revenue Bonds in FY 24 • Landfill • Equipment Building replacement in planning phase • Current estimate is $3.5 million • Budget anticipates utilizing cell replacement reserves ($5.7 million) • May consider a revenue bond / tipping fee increase proposal as building plans progress • Wastewater • Budget projects two $14 million revenue bonds in 2024 ($28 million) • Digester complex rehabilitation • Digester gas capture and reuse • Both projects in planning phase to determine appropriate scope and timing • Evaluating federal grant opportunities for the gas project • Moving forward will require consideration of a supporting rate increase in FY 25 Estimated Property Tax Impact Assessed Valuation Taxable Valuation City Levy Property Taxes Difference =3 W $100,000 $54,130 $15.633 $848 $100,000 $56,492 $15.633 $883 +$35 024 $100k used to allow for easy adjustment to an individual's home value. Annual Financial Household Impact $2,500 $21000 $1,500 $1,000 $500 $0 -$Soo ■ Property Taxes ■ Stormwater ■ Refuse ■ Sewer - 800 cubic feet ■ Water-- 800 cubic feet Total Percent Change Annual Financial Impact to Residential Households FY2oi8 FY2019 FY2020 FY2021 FY2022 FY2023 $930 $goo $901 $869 $884 $848 $54 $54 $6o $6o $6o $6o $205 $229 $229 $240 $240 $276 $433 $433 $433 $433 $433 $433 $362 $38o $399 $399 $419 $419 $1,984 $1,996 $2,022 $2,001 $2,036 $21036 1.1% o.6% 1.3% -1.1% 1.8% 0.0% Based on a residential customer with $100,000 property valuation. FY2024 $883 $66 $300 $442 $436 $2,127 4.4% INVESTMENT IN STRATEGIC PLAN., MASTER PLANS &CORE SERVICES American Rescue Plan Act (ARPA) Funds Project Direct Payment Program Forest View Relocation Emergency Non -Profit Grants Wage Theft Organizer Mobile Crisis Support Childcare Navigator Pre -Apprenticeship Program Tourism Recovery UtiIityAssistance Program Subtotal: Amount $1.18 million $1.20 million $400K $85K $939K $1ooK $435K $25oK $676K - $5.25 million ARPA award = $18.3 million Project Eviction Prevention Inclusive Economic Development Business Support Social Services Capital Funding Program Affordable Housing Initiative Childcare Waae Suoolement Proaram Subtotal: Amount $i.00 million $4.00 million $3.00 million $2.5 million $7SoK - $11.25 million STRATEGIC PLAN VALUES Values Social Justice, Racial Equity & Human Rights FY23 Carryover: Non-recurring $1 million for Black Lives Matter initiatives Continues $100,000 for Social Justice and Racial Equity Grant program (increased from $75k in FY 22) Continued funding for partnerships and sponsorships including NAACP Criminal Justice Summit, Juneteenth, and MLK Jr Day. Funding for City sidewalk and parks ADA/accessibility improvements and sponsorship of annual ADA celebration Many other budgetary investments reflect the City's values: support for crisis response, support for homelessness services, transit ride voucher programs in the Library and Parks & Rec, and funds to continue increasing document translation. Values: Climate Action emergency properly tax levy (approx. $850K per year) Climate Action & Adaptation Plan 2022 ANNUAL UPDATE =v=u CgnmmHF-Mae E". Bimd. FY.m6M(MO )E.M... k, ,. �ew [ I f11 f1 i r _77, o 9f o5099PW WWq RPWOP A11.1% A 0.2% A 2.5% i.roaai..W.oa im,,,:['i.o-eti- i"e�ammeWna,i ino„:em�.axnoa y:nar o[.uWW.emissia,r :.:�sy �E. :,.�•,:tee. YW.nMunYW.e.W"Y zkro (rpwwiye.Prtlill uln): r ronem�WmF.weFAe.Y.y S.urta(YM[M1Y.s LOPeI: Wnle 9°/ T2niVorU4m]9T BuNingi183 Party in the Park and Rec & Roll All -ages Library, Recreation, and Senior Center programming Public Safety National Night Out Climate Ambassadorand Resilience Corps Programs City Sponsored Festivals and Events Proactive Vehicle Repair Programs Revitalized Neighborhood Association Strategy Crisis Response Services Strategic Plan Human Rights Community Trainings and Programs Public Art & Placemaking STRATEGIC PLAN IMPACT AREAS Impact area: Neighborhoods & Housing Fiscal Year 2024 Budge" 'lighlights: • $1 million to Affordable Housing Fund • $30k Winter Homeless Shelter + $30k for cost share of Street Outreach position • ARPA: $3.5 million set aside for affordable housing + eviction prevention • Housing funds budgeted through CDBG/HOME, TIF, and Fee -in -Lieu • $150k to fund first year of consultant for multi-year Comprehensive Plan overhaul 0 $5,000 increase (25%) to Neighborhood PIN Grant Program (total $25,000) Affordable Housing Fund • Funds assisted 1,771 units from FYI - FY22 (excludes vouchers, public housing and workforce housing tax credits) • City funds have leveraged $5.7 million in outside Low -Income Housing Tax Credit (LIHTC) funding from FYI 8- FY22 • 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 Affordable Housing Fund Breakdown: • 70% Housing Trust Fund of Johnson County - (20% reserved for LIHTC) • 7.5% Opportunity Fund • 7.5% Healthy Homes Program • 10% Community security deposit assistance and risk mitigation fund • 5% emergent situations (e.g. sudden displacement) 0 • • 7 Recent examples of agreements: F' • i•i • 00 • Riverfront Crossings: $3.86 million collected to date Strategic Plan • Foster Road TIF: Estimated revenue of $2.7 million over ten years • Tailwind Development: Paid fee -in -lieu of $1.8 million (facilitated eight South District duplex purchases) Impact area: Mobility ' _ .scal Year 2024 Budget Highlights: • EV Charger Installation Rebate Program • Fare free transit analysis and decision 9 • Capital Improvement Program: • Annual: $75K - bus stop improvements • Annual: $100K - ADA curb ramps • 2023: Sidewalk Infill - Scott Blvd, High St, Southgate Ave. • 2025: N Gilbert St Reconstruction with pedestrian _ improvements 0 2026: HWY 6 Trail Extension 2023 & 2024 Bike Master Plan Implementation • Bike Boulevards: • Keokuk • Wetherby • Emerald • E Washington • Hollywood • Arlington • Friendship • Lakeside • Oakcrest • Westminster • Bicycle lanes: • Southgate (Gilbert to Keokuk) • Sunset (Benton to HWY 1) • 4 to 3 Lane Conversions with bike lanes: • Keokuk (HWY 6 to Sandusky) • Highway 6 Pedestrian Trail (Heinz to Fairmeadows) • Road Projects with bike improvements: • W Benton (Mormon Trek to Greenwood) - bike lanes • Rochester (1st to Montrose) -bike lanes • Jefferson & Market - upgrade bike lanes to buffered Investments in Roads • RUT funds annual pavement rehabilitation (resurfacing) • Equipment replacement funds have helped 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 Annual Pavement Rehabilitation Capital Expenditures Budget 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Major Road Improvements ' Examples of Significant 2023: Gilbert Street Bridge Replacement ($4.2 million) Upcoming CIP-Funded Road Projects 2024: Court Street Reconstruction ($8 million) (In addition to the annual Dubuque Street Reconstruction ($3.5 million) pavement rehab program and smaller improvements) 2025: Dodge Street Reconstruction ($18.2 million) North Gilbert Street Reconstruction ($2 million) 2026: Taft Avenue Reconstruction ($12.2 million) 2027: Market & Jefferson Two -Way Conversion ($5 million) Burlington Street Bridge Replacement Impact area: Economy Fiscal Year 2024 Budget Highlights: • $50K - BIPOC Business Accelerator Program and ESL supplemental funding for Kirkwood • $100K -Opportunity fund for small business grants, technical assistance programs and Better Together initiatives • $569K - community development funding to support local ai culture, tourism, small businesses, and entrepreneurs • Funds to support placemaking in partnership with SSMIDs • ARPA: Inclusive Economic Development Plan, pre - apprenticeship program, Childcare Wage Supplement Program, and tourism Impact area: Safety & Well -Being ' ..scal Year 2024 Budget Highlights: • Additional $5,000 to market 988 -lifeline ?- i • Funds to cost share a second Mental Health Liaison position with CommUnity Mobile Crisis Services • $9,000 for proactive vehicle repair activities (i.e. taillights) • 3% increase in local funds to annual Aid to Agencies program, bringing the total (local + federal) to $751,500 for FY24 • ARPA: Social Services Capital Project Funding Program 0 Funds to carry out Senior Center Master Plan Park Master Plan Implementation I f GATHER HERE. CITY OF IOWA CITY -• E .•7�, AdapMrd SeiVtahbe L4, 2DLT RW, r11, Recently Completed: • Pedestrian Mall and Whispering Meadows Playground • Glendale Park Improvements • Court Hill Park improvements • Chadek Green Park Additions • Ryerson Woods Ecological Restoration Upcoming Parks Improvements: • Hunters Run and Kiwanis Playgrounds • Happy Hollow Playground and Ballfield • North Hickory Hill Restroom and Shelter • Mercer Ballfield, Tennis, & Pickleball Improvements • Hickory Hill Phase II Ecological Improvements • Terrell Mill Skate Park Renovation • Willow Creek Trail Replacement • City Park Tennis Court Overlay Impact Area: Safety & Well -Being Aid to Agencies Grant Program • Approx. $100,000 in Community Development Block Agencies , , ra Grant (CDBG) funds is dedicated to the Aid to Agencies program, in addition to the General Fund support FY 2018 $242,501 • FY 2020: Council made a mid -year decision to include a FY 2019 $250,000 one-time budget increase to fund all requests from legacy agencies (+54% increase over FY 2019) FY 2020 $501,500 • FY 2021: Council again increased General Fund support over historical levels (in addition to shifting utility fund FY 2021 $575,000 support to the General Fund) • FY 2022: Approved budget included +3.5% increase with FY 2022 $595,250 expectation of a recurring 3% annual inflationary increase going forward: FY 2023 $615,059 • FY23: +$19,809 • FY24: +16,441 FY 2024 Rec'd $631,500 STRATEGIC PLAN RESOURCES Resources: Facilities, Equipment and Tech • Facility Reserve Fund created in FY 2019 to meet growing needs of the community, improve workplace health and safety for employees and address limitations to service enhancements • Planned uses of funds in CIP*: • Senior Center exterior (2023) • $2 million loan • $750k contribution • Equipment Maintenance Facility (2024) • $1 million contribution • City Park Pool (2024-2025) • $9 million contribution (Likely short) • Senior Center Interior (2025-2026) • $2.25 million contribution • Fire Stations #3 and #5 (2026-2027) • $10 million outlay FY 2019 $210001000 FY 2020 $210001000 FY 2021 $4,000,000 FY 2022 $5,000,000 FY 2023 $4,742,000 - Less $2.75m for Senior Center improvements - Less $zm for Equipment Building replacement - Less $5ook for City Park Pool design Estimated Balance x Not representative of total project costs and dependent of future additional transfers to the reserve $13,4921000 Resources: Facilities, Equipment and Tech • Other planned facility projects of note, not utilizing Facility Reserve funds: • City Hall, Police and Fire Station 1 Space Needs Study • Transit building replacement • Landfill equipment building • Wastewater Digester Complex rehab • Airport terminal rehab • Parks Division storage building addition • Misc. repairs / improvements at recreation centers • $4.8 million in Fire Apparatus replacements (2023-2026) • Continuation of asset management system implementation • Procurement of Pedestrian Mall cameras- replacing the ICDD managed network Resources: People (FY24 Additions) Position Title FTE Fund Position Supports... +0.50 General Enhanced accountability through centralized IA approach and Civilian Police Accreditation Manager reduces IA workload on Watch Supervisors Police Sexual Assault Investigations +1.00 General Significant rise in sexual assault investigations (642 hours of OT in 2021 Officer and 588 OT hours in 2022) Firefighters +2.00 General Increasing OT demands and record CFS; builds capacity anticipating construction of Station #5 Asset Management Tech (Public +1.00 Various Data entry and upkeep for new asset management system Works/Engineering) Parking Enforcement Attendant +1.00 Parking Increased meter, bike lane and loading zone enforcement Water Maintenance Worker I +1.00 Water Increased demand: meter reads, exchanges, taps Landfill Maintenance Worker I +1.00 Landfill Responds to nearly 2,000 hours OT in FY22 Family Self -Sufficiency (FSS) +1.00 Federal Anticipated increase in FSS participants by 25 - 40 Coordinator (Housing Authority) (HUD) Volunteer Program Assistant (Animal +1.00 Private Increased need for volunteers to support operations Center) Total +9.50 FTE (3.90 General Fund, 3.60 Enterprise Fund, 2.00 External) Resources: Financial • Stabilizes several utility enterprise funds that continue to be impacted by inflation and supply chain challenges • Bolsters Emergency Reserve by $258,000 in FY23 • Emergency Reserve 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 • Bolsters Facilities Reserve by $4,742,000 in FY23 • Additional support for Emergency and Facilities Reserves to be reevaluated in FY24 LOOKING AHEAD Next Year's Budget (FY 2025) Plan for... • Managing the unknown • Residential rollback drop could be significant with statewide assessments increases • Additional property tax reform targeted at Statehouse • Unsure of inflationary trend and further impacts to operations • Without valuation growth... • Capital projects will continue to need to be scaled back • General Fund operations will be further stressed while tackling increased service demands • Utility rates may need further adjustment to keep pace with inflationary impacts • Continued effort to fund the Facility Reserve and move to implement key projects • Aim to continue to address critical service staffing needs to maintain service levels • Move toward completion of ARPA allocations and consider alternative revenue sources to supplement infrastructure, facilities and City Council strategic objectives FINAL THOUGHTS The FY2024 budget: (1) Navigates a steep decline in multi -residential taxable valuation, continued backfill phaseout, and inflationary pressures while preserving a flat property tax rate (2) Allocates funding from a variety of sources for key investments in strategic plan actions (3) Invests in critical frontline positions to maintain core service levels while more aggressively investing in the next generation of public facilities needed to serve a growing community �r I Ilif, '- aft CITY OF IOWA CITY UNESCO CITY OF LITERATURE WWW.1CG0V.0RG/BUDGET STAFF PRESENTATION CONCLUDED � r rrM as � h CITY OF IOWA CITY 410 East Washington Strect Iowa City, Iowa 52240-1826 (3 19) 356-5000 (3 19) 356-5009 FAX www. icgov. o rg