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Home My WebLink About01-08-2022 FY23 Budget PresentationBudget Work Session STAFF PRESENTATION TO FOLLOW: r 1 ulr `t rtti®gam CITY OF IOWA CITY 410 East Washington Street Iowa City. Iowa 52240-1826 (319) 356-5000 (319) 356-5009 FAX www.iegov.org i ' 1 i „I sitgovig;ikiii.,14. ftwwwww- gosaniqr 4 1111111111111111111 CITY OF IOWA CITY UNESCO CITY OF LITERATURE OF IOWA CI FY2023 Budget Proposal January 8, 2022 FY 2023 Proposed Budget 1 CITY OF IOWA CITY UNESCO CITY OF LITERATURE CITY OF IOWA CITY, IOWA FY2023 Proposed Budget FY2022 - FY2024 Financial Plan 2022 - 2026 Capital Improvement Plan New Flip Book format available at https://www.icgov.org/budget 2 City Council Budget Review Schedule 1 June 16, 2020: City Council Strategic Plan adopted. Sept 7, 2021: Council Work Session on Budget Priorities Jan. 8, 2022: Operating Budget Review y Feb. 1, 2022: 1 Setting of Public Hearing on Proposed Maximum Property Tax 4/ March 31, 2022: Certification with County Auditor i Feb. 15, 2022: Public Hearing on Budget / Adopts Resolution Setting Max Property Tax March 1, 2022: Setting of Public Hearing on Budget Jan. 12, 2022: Capital Improvement Plan Review March 15, 2022: Public Hearing on Budget / Adoption of Budget 10-27 Budget Document Areas of Focus Pages Transmittal Letter (Executive Summary) Economic Trends Fund Structure and Description of Funds Financial and Fiscal Policies Long Range Financial Planning General Fund Summary WWW.ICGOV.ORG/BUDGET 37 - 40 277 - 282 290 - 296 297-300 320 - 331 Budgetary Funds Nc.i-EuC1!}F-taiv Fun.ls General Fund General (10") Special Revenue Funds 1 CDBG 4(2100} HOME Grant (21 10) Road Use Tax (2200) Other Shared Revenues (2300) Metro Planning Organization of Johnson County (2350} Employee (Benefits (2400) Emergency Levy (2450)- Affordable 2450)- Affordable Housing (2500). lawa City Property Management (2510) Tax Increment Financing (20") Self -Supporting Municipal Improvement Distric: (2820). Debt Service Funcl Debt Service (50") Major funds Enterprise Funds Parking (710°) I'1 Transit (715') Wastewater (7201 Water (730') Refuse Collection (7400} Landfill (730) Airport (71100) Stormwater (7700) Housing Authority gg-1 Capital Projects Fund Capital Projects (1 } The Paring Fund ala rtalqualify as a r_iapr rrr a t The Annus! Report, but It Is being Tio enletl as one for mar0gertal reasons. Internal Service Funds Equipment (6 10') Risk Managerment (8200) Information Technology Services (S30') Central Services (E433) Health Insurance (8-500) Dental Insurance (81100) Agency Funds F Iowa City Fund Structure 5 RECENT BUDGET INIiIAL,i VES 6 Examples of Recent Budget Initiatives Utilizing Growth in Taxable Valuations Increased minimum wage from $11.50 to $15.00 ($950k) Converted ten temporary positions to permanent status ($275k) Increased General Fund support of Aid to Agencies Grant Program from $292k to $595k Increased Social Justice Racial Equity Grant Program from $25k to $75k Committed $1 million in annual funds for new climate action initiatives Supplemented affordable housing efforts with $1 million in annual funding from the General Fund Set aside $1 million in funding to support social justice and racial equity initiatives Created and funded a Facility Reserve Fund to support upgraded municipal work environments and public amenities ISCA YEAR 2023 CONCERNS 8 Navigating Converging Financial Challenges Commercial backfill being phased out by the State of Iowa • Multi -residential taxability to drop precipitously Stagnation in taxable property growth Residential rollback dropped sharply (taxable percentage of home value) .41 Significant volatility in key expense lines 9 • State of Iowa 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 FTE 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 State Backfill Budget for FY 2023: General $619,092 Risk $22,198 Library $20,636 Transit $72,609 Emergency Levy $18,343 Employee Benefits $255,597 SSMID $29,225 Debt Service $189,557 Total $1,227,257 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 FY2023, multi -residential property will be taxed at 63.75%, which equates to a Toss of $146 million in taxable value The Toss of taxable value equates to approximately $3 million in lost property tax revenue for FY2023 Cumulative loss through FY2023 is projected to be over $13.7 million without a state backfill 11 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 8% of Iowa City's taxable valuation FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Residential Rollback 52.82% 54.40% 55.73% 55.63% 56.94% 55.62% 56.92% 55.07% 56.41% Multi -Residential Rollback 100.00% 95.00% 90.00% 86.25% 82.50% 78.75% 75.00% 71.25% 67.50% TFY23 54.13% FY24 63.75% Residential Rollback Tren The rollback will decrease to 54% in FY 2023 (Assessment Year 2021) A 1% change in the rollback figure represents approximately $825,000 in tax revenue 90% 78% 80% 70% 60% 50 40% 30% 20% 100 07D Rollback by Assessment Year 81% 64% • 8% 5 48% 44% 53% 56% 56% Arkii 54% CO O.. 0 NM Tr ..O N..00 O.. 0 . N M Tr LO .43 N. CO O.. 0 N M 'O N..00 O. 0 .-N M Tr LO 'O I. CO OT 0 N. N. CO 00 00 00 00 00 00 00 00 00 O- O� O. O. O. O. O.. O� O.. O.. O O 00000000 N O. O, O, O, O, O, Cr. Cr. Cr. Cr. Cr. Cr. Cr. Cr. Cr. Cr. O, O, O. O. O* O* 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 N N N N N N N N N N N 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 1 2012-2015 average: $161.3M 1 2017-2019 average: $213.7M i i • 1 2021 actual: $135.4M 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 14 Changes inTaxableValuation Pattern Taxable Value (Millions) Total Property Tax Valuations & Percent Change Over Prior Fiscal Year $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 so FY14 FY15 FY16 !Taxable Val $3,036, $3,136, $3,182, Val % Change 2.56% 3.32% 1.46% FY17 $3,421, 7.500 FY18 $3,542, 3.55% FY19 FY20 $3,745, $3,923, 5.72% 4.74% FY21 $4, 258, 8.54% FY22 FY23 $4,396 $4,384 3.24% I -0.26% 9.000 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% -1.00% 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. 15 Volatile Variable Costs ttr Property & Liability Insurance The City experienced significant increases in property and liability insurance premiums as well as deductibles for FY22. & Liability Insurance Premium ('Property Tincreased 1130 (+610K) over the past five years (FY18 through FY22). he Cyber Liability Deductible increasec 300% (+75() in just three 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 budget. FY23 gasoline and fuel costs are budgeted at a 57.9% increase over FY21 Actuals (due to rising costs rather than increased consumption) 16 REVENUE FY23 ABY funds Revenue Sources *excludes transfers All Funds Revenue Sources Charges for Services 23% IntergovernmentalIii 17% Use of Money & Prop, 1% Licenses & Permits, 1% Misc. 4% Property Taxe 35% Other City Taxes, 4% Other Financial Sources 15% FY23 Revenue Sources -General Fund Only *excludes transfers 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 Use of Money & Propert 1% Licenses & Permits 4% Y 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 Other Financing Sources (1 %) are primarily loans or sale of assets Property Taxes 69% 19 Property Tax Rate Trend Taxa°le Value (in millions) $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Property Tax Rate vs. Valuations FY12'FY13'FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23' Tax Value (millions) $2,848$2,960$3,036$3,137$3,183$3,421$3,543$3,745$3,923$4,258$4,396$4,385 Val % Change 3.27% 3.93% 2.56% 3.32% 1.46% 7.50% 3.55% 5.72% 4.74%18.54% 3.24% Ptax Rate Rate % Change 17.84217.26916.80516.70516.65116.58316.33316.18315.83315.77315.67315.633 0.48%-3.21%-2.69%-0.60%-0.32%-0.41%- 1.51%-0.92%-2.16%-0.38%1.01%-0.26% *FY2o23 Proposed 18 17.5 17 16.5 16 15.5 15 Property Tax Rate • FY 2023 OverlappingTax Rate The City of Iowa City tax levyConsolidatedTaxRate: Percentageofohnson rate is one component of theLevyShareofallTaxing Bodies total property tax rate property State of owners pay Iowa 0.01%Cityof 41/oICCSD •�The three largest components of Kirkwood 1the overlapping property tax rate are the City, the School District, and the County JCounty*17% The City's Levy rate has dropped 39% each of the last 11 years and our rate accounts for less than half the total rate paid by property owners The State of Iowa has a special levy of$o.0031/$1,0000ftaxable value *IncludesJohnson County, CityAssessor, and Agriculture Extension Levies 1 r $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 OVERLAPPING TAX RATE TREND • • ■ • NI • r • . . . . • r • . • • . . . . .. • . . .•i■ • • t .--r- r • 44.50% - 43.50% 42.50% - 41.50% 40.50% - 39.50% 38.50% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 ICCSD =Johnson County* Kirkwood =State of Iowa City of Iowa City = Iowa City Percentage of Total *includes Johnson County, City Assessor, and Agriculture Extension Levies Property Tax Levy Comparison City FY2022 Tax Rate FY2012 Tax Rate %Change FY12-FY21 Waterloo $18.63 $18.53 0.54% Council Bluffs $17.53 $17.85 -1.79% Davenport $16.78 $15.53 8.05% Des Moines $16.61 $16.58 0.18% Cedar Rapids $15.87 $15.22 4.27% • City* i 1 $15.6 $14.44 $17.84 $16.66 , -12.16% -13.33% Sioux City Coralville $14.28 $13.53 5.54% North Liberty $11.51 $11.03 4.35% West Des Moines $10.95 $12.05 -9.13% Ames $9.87 $10.84 -8.95% Dubuque $9.88 $10.45 -5.45% * Proposed Iowa City tax rate for FY2023 is $15.63. 111 23 1 1 1 ki 1 I - 1 11 Major Revenue Sources: Hotel / Motel $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022* FY 2023** ■ Hotel Motel Tax $813,896 $871,706 $967,049 $1,057,38 $1,078,76 $1,136,71 $1,045,68 $1,301,82 $1,134,86 $938,048 $1,134,86 $1,134,86 24 Major Revenue Sources: Utility Franchise $1,020,000 $1,000,000 $980,000 $960,000 $940,000 $920,000 $900,000 $880,000 $860,000 $840,000 $820,000 $800,000 ■ Utility Franchise Tax Iowa City Utility Franchise Tax is currently 1% FY 2016 $874,235 FY2017 FY2018 FY2019 FY2020 $939,387 $976,060 $964,690 $883,652 FY 2021 $993,852 Franchise Fees Rate 0% Davenport West Des Moines 0% Ames 0% Coralville 1% Iowa City 1% North Liberty 2% Council Bluffs 2% Cedar Rapids 3% Waterloo 4% Dubuque 5% Sioux City 5% Des Moines 5% 1 L 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 Q) cgti o" co'\ ,, $s�• ti69 (43 • 1 4) 4, 4') 4) • Im • i OC?' ry°5» °,y' P o' "o ' "64?) ° ry°tier a°l�� °yea ck e <z"ce e 11' Q{aQ 0 0 " 26 Major Revenue Sources: Road Use Tax Road Use Tax Receipts $12,000,000 510,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 RUT Revenues $5,881,020 $6,436,785 $6,589,111 $6,744,663 $7,230,663 $8,320,117 $8,672,279 $8,426,502 58,820,138 $9,163,303 510,076,97 Waterloo 50 % Property Tax Relief, 50% Street, Neighborhood and Public Safety Improvements 60% Property Tax Relief, 40% Capital Improvements and Equipment 50% Property Tax Relief; 50% Quality of Life Proiects Des Moines Cedar Rapids Davenport Sioux City West Des Moines Council Bluffs Dubuque Local Option Sales Tax (LOST) Year Effective Sunset Year FY2022 Estimated Receipts Purpose Ames 2019 None $49,720,467 2009 2034 $25,225,156 100% Street Repair 1989 None $20,1 17,930 60% Property Tax Relief, 20% Infrastructure Projects, 1987 None $15,169,749 10% City Facilities, 10% EDX 2018 None $3,734,323 1990 None $1 1,231,138 100% Streets and Sewers 1991 2025 $1 1,921,921 100% Street Repair 50% Property Tax Relief, 20% City Facilities 1988 None $10,848,018 Maintenance, 30% Special Assessment Relief 1987 None $9,872,126 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. 28 EXPEND URES All Expenditures by Category FY 2023 All Funds Budget Expenditures (by State Budget Category) excludes transfers $53,925,114 $4/,556,110 $29,232,714 $12,026,574 Public Safety Public Works $680,058 Health & Social Services $16,828,326 $9,349,687 $12,142,950 $12,952,813 II Culture & Community & General Debt Service Capital Business Type Recreation Economic Government Projects Activities Development General Fund Expenditures General Fund Expenditures by Category excludes transfers Contingency 1% Supplies 3% \Capital Outlay 6% 31 Personnel Services Contingency Supplies Capital Outlay General Fund Expenditures FY22 (Revised) FY23 (Proposed) Percentage Change $ 47,740,998 $ 48,622,959 $ 13,273,717 $ 11,856,425 $ 451,600 $ 943,000 $ 1,898,313 $ 1,809,677 $ 4,142,850 $ 1,748,852 1.85% -10.68% 108.81% -4.67% -57.79% ri 1 a enditures* *ExcludesTransfersOut $ 67,507,478 $ 64, 980, 91 32 J Public Safety Pension Contributions 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 FY2012 FY2013 City of Iowa City MFPRSI Contributions FY2014 FY2015 FY2016 FY2017 1 FY2018 FY2019 FY2020 FY2021 FY 2022* FY2023** ■ 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 1,263,192 1,363,066 1,250,248 ■ 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 1,651,259 1,903,702 1,737,404 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 2,914,451 3,266,768 2,987,652 %Change 31.27% 8.35% 21.58% 1.47% -5.55% -3.69% 2.95% 4.93% -2.41 % 2.74% 12.09% -8.54% *Amended ** Proposed 33 1 IPERS 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 1 City of Iowa City IPERS Contributions FY15 FY16 FY17 FY18 FY19 FY20 Amount 2,550,271 2,555,490 2,655,816 2,710,906 2,914,700 2,980,688 % Change -0.66% 0.20% 3.93% 2.07% 7.52% 2.26% • FY21 3,055,943 2.52% 1 FY22* FY23** 3,567,895 3,615,201 16.75% 1.33% `Revised „*Proposed DEBT SERVICE 35 Debt Service State of Iowa limits debt service to no more than 5% of total assessed property value. Iowa City currently utilizes 18.8% of the allowed debt limit Iowa City policy specifies that debt service levy shall not exceed 3O% of the total City levy in any fiscal year The projected debt service levy is approximately 15.8% of the total levy City goal is to meet Moody's Aaa benchmark of ne direct debt outstanding of .75% of city's total assessed value. Iowa City is projected to be at 0.94% of total valuations 36 Moody's Aaa Rating: All Number of Cities 400 350 300 250 200 150 100 50 0 S. Cities Distribution of Moody's General Obligation Ratings for All US Cities Iowa City 1 Aaa Aal Aa2 Aa3 Al A2 A3 Baal Baa2 Baa3 ■ Seriesl 174 188 377 274 195 90 44 18 14 13 % of Total 12.45% 13.45% 26.97% 19.60% 13.95% 6.44% 3.15% 1.29% 1.00% 0.93% 37 Moody's Aaa Rating: Iowa Number of Cities 20 18 16 14 12 10 8 6 4 2 0 Distribution of Moody's General Obligation Bond Ratings for Cities in Iowa Iowa City Aaa Aal Aa2 Aa3 Al A2 A3 Baal Baa2 Baa3 ■ Seriesl 4 5 12 14 19 10 6 0 0 0 % of Total 5.71% 7.14% 17.14% 20.00% 27.14% 14.29% 8.57% 0.00% 0.00% 0.00% 38 'UND AND FEE ANALYSIS 39 Budgeted Expenditures and Transfers ou Unassigned Balance as % of Rev & Trans In Enterprise Fund Balances Estimated Revenues and Transfers In Estimated Fund Balance 6/30/23 Restricted, Committed, Assigned Unassigned Fund Balance, 6/30/2023 Parking Wastewater 6,867,389 17,202,422 14,053,362 6,170,623 17,894,339 13,574,969 3,086,434 603,702 24,695,909 10,1 12, 236 13,436,342 6,675,888 2,482, 732 36% 14,583,673 85% 6,760,474 48% Airport Stormwater 485,410 417,560 351,170 286,258 2,816,790 2,472,768 1,303,882 674,000 64,912 13% 629,882 40 22% Impact of COVID-19 Water Shut-off Policy • In March of 2020 the City suspended the practice of collecting late fees and shutting off water service for non-payment. • At staff's recommendation, Council has since twice considered reinstating the practice but has not taken such action • We currently have over $book in uncollected revenue related to this policy. • Relief programs have provided over $14o1< in support to our customers but have not kept pace with delinquent account growth trends. • Without reconsideration of this policy, uncollected revenues will go and place pressure on water, sewer, refuse and stormwater rates for all customers. 41 FY 2022 User Fee Changes No new utility, transit, or parking rate or fee increases recommended for the FY22 budget Estimated increase to average residential customer due to delayed water increase is $35 per year, or less than $3 per month. Estimated Annual Financial Impact to Residential Household ($100,000) FY 2021 FY 2022 Water* $399 $419 (800 cu ft) Sewer (800 cu ft) Refuse Stormwater Total $433 $433 $240 $240 $60 $60 II $2,001 $2,036 Delayed 5% water rate increase from July 1, 2020 goes in effect July 1, 2021 Estimated Property Tax Impact Assessed Valuation $100,000 $100,000 Taxable Valuation $56,409 $54,130 City Levy $15.673 $15.633 Property Taxes $884 $846 Difference - $38 $100k used to allow for easy adjustment to an individual's home value. Annual Financial Household Impact $2,500 $2,000 $1,500 $1,000 $500 $0 _'PJvv FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 Property Taxes $922 $930 $900 $901 $869 $884 $846 • Stormwater $54 $54 $54 $60 $60 $60 $60 Refuse $191 $205 $229 $229 $240 $240 $276 • Sewer - 800 cubic feet $433 $433 $433 $433 $433 $433 $433 • Water-- 800 cubic feet $362 $362 $380 $399 $399 $419 $419 Total $1,962 $1,984 1.1% $1,996 0.6% $2,022 1.3% $2,001 -1.10 $2,036 1.8% $2,034 -0.1% Percent Change 0.3% iJ used on a residential cusi'viner with . 100,000 property valuutIIon. 44 AREAS OF FOCUS 45 Strategic Plan: Investing in Climate Action $0.20 Emergency property tax levy (approx. $850K per year) FY 2022 Highlights • Held first annual Neighborhood Energy Blitz • Held weeklong Climate Action Festival • 333 Root for Trees vouchers redeemed • Awarded $60K in Climate Action Grants • Launched commercial/industrial TIF Energy Efficiency Matching Grant Program FY 2023 Areas of Focus • Partnerships to increase resilience • Expand residential energy efficiency programs • City LED, HVAC, and solar improvements • Ongoing public education efforts • Implement EV readiness strategies Climate Action & Adaptation Plan LULL ANNUAL UI'UAI Community-1de Carbon Dioxide Egeiraknt (CO2e) Emissions by Sector. youo,aoo MOM 11 ¢00400 403400 200400 UNESCO O IOWA C r Iowa City's45% reduction hy2030 goa was achieved in 2020! 4ktd*MsMna: Matnvpby2050 ^ tr C tl D t3 tl 0 yi 7 tl tl tl 00 IndtetMl uamreW a.swarth) el row«Hart Mwpandonwarm nom,rsn 2060 Target a.duabn Tram! un. A 10.9% Increase in residential energy usage' 12.4% Decrease in ccmmercial PIIFrgy usage' MidAmerican Renewable Energy (as percentage a3 retail sales): 83.6 61.30 2018 Actual 2019Actual 2020 Actual X4.5% Decrease it industrial energy usage' 6.2% Decrease in municipal facility energy usage' 2020 Community -Wide Emissions by Source (Netric Tonnes CO2c): Waste 3% Transportation 22% Buildings 75% Strategic Plan: Investing in Social Justice & Racial Equity FY22 Carryover: Non-recurring $1 million for SJ RE Initiatives +25K increase for Social Justice and Racial Equity Grant program (totaling $100,000 for FY23) Elimination of library fines for all patrons New annual commitment of $25,000 set-aside to support BIPOC business growth and entrepreneurship Additional funding to support / expand the community's crisis response efforts Continued funding for partnerships and sponsorships including NAACP Criminal Justice Summit, Juneteenth, and MLK Day. Funding for City sidewalk and parks ADA/accessibility improvements and sponsorship of annual ADA event Strategic Plan: Investing in Social Justice & Racial Equity Aid to Agencies Grant Program • Approx. $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: Approved budget included +3.5% increase with expectation of a recurring 3% annual inflationary increase going forward • FY 2023: Recommend 3% increase (+$17,858) General Fund Support for Aid to Agencies Grant Program FY 2018 $242,501 FY 2019 $250,000 FY 2020 $501,500 FY 2021 $575,000 FY 2022 $595,250 FY 2023 Rec'd $613,108 Strategic Plan: Investing in Social Justice & Racial Equity Hourly Wage Rate Increase 1111. tep 1: $11.50/hou (+$261,000 in FY 202 M Step 2: $13.75/hou (+$275,000 in FY 2021) 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 1 Strategic Plan: Investing in Affordable Housing Since FY 2017, the City has invested approximately $9.6 million in affordable housing initiatives • Funds have assisted more than 1,286 affordable units (excludes vouchers, ouolic housing and workforce housing tax credits) • City funds have leveraged $9.9 million in outside Low Income Housing Tax Credit (LI HTC) 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 fifth straight year • 70% of funds will be distributed to the Housing Trust Fund of Johnson County (20% reservec for LI HTC) • 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) 50 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: $982,000 collected to date • Foster Road TIF: Estimated revenue of $2.7 million over the next ten years • Tailwind Development: Paid fee -in -lieu of $1.8 million (facilitated eight South District duplex purchases) 51 Strategic Plan: Investments in Roads 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 5- Future Road Use Tax Concerns: Improving fuel efficiency Low fuel prices Undercount of 2020 Census to suppress revenues ANNUAL PAVEMENT REHABILITATION CAPITAL EXPENDITURES 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 52 Strategic Plan: Major Road Improvements Examples of Significant Upcoming CIP-Funded Road Projects (In addition to the annual pavement rehab program and smaller improvements) 2022: 2023: 2024: 2025: • - oho Rochester Avenue Reconstruction Fairchild Street Reconstruction Dubuque Street Reconstruction Gilbert Street Bridge Replacement Iowa Avenue Bridge Rehabilitation Riverside Drive Pedestrian Bridge Rehabilitation Court Street Reconstruction Dodge Street Reconstruction Park Road Reconstruction North Gilbert Street Reconstruction 2026: Taft Avenue Reconstruction S. Dubuque Street Reconstruction Market & Jefferson Streets Two -Way Conversion Park Master Plan Implementation - CITY OF IOWA CITY a ppg.. hi Recently Completed: • Rita's Ranch and Thornberry Dog Parks - Accessibility and Drainage Improvements • Ecological Restoration at Hickory Hill Park, Terry Trueblood Recreation Area, and Whispering Meadows Wetland • Shaded bench swings and public art installed at Riverfront Crossings Park Upcoming hayground/Shelter Improvements: • Glendale Park (in progress) • Pedestrian Mall Playground (in progress) • Chadek Green Park • Court Hill Park Planned accessibility improvements: • Harlocke Hill Park • Oak Grove Park • Ryerson Woods (along with ecological improvements Bike Master Plan Implementation - 2022 • Bicycle lanes: • Southgate Ave • W. Benton Street • Rochester Avenue • Bike Boulevards: • Wetherby • Hollywood • Lakeside • 4 to 3 Lane Conversions: • Madison (with bike lanes) • Keokuk (with bike lanes) • Highway 6 Pedestrian Trail (Fairmeadows to Heinz) • American Legion Road reconstruction with sidepath Near -Terri Projects 53827 0006855 SummittoBurlington 4r 51827 000RIS5 Burl! ngtonto Bowery 4 53434 MCCOLLISTER Gilbento Sycamore 54 53827 GI:BERTST Market° Ne.Collister 4,3 53954 AMERICAN ICON ScontoTaft 54 53;47 BENTON Greenwood to Mormon Trek 4 53953 MRRRE13165011SON Immediate -Term Projects 53827 COMM DiurdSmBemm 4 41.3 (3927 MKOI5831 Madrett.Court 4>3 53827 851CAMO>3 Re9riping toMd Bike lanes 53P60 M9RMINTREN MelrosonW653do 4.3 53871 BRSTAYI 45-3 53933 GlaalliffiNmm. BLVD 53933 53 53942 53942 BEWET fl n 84225 WILLOW(IHKRB Neighb,rhmd Connec+ 53927 831151910R5T Burlingmn(o Bowery 4j. 53827 PRENSISS4BOWERM BLVD ra4EERU. Construftion Status Completed Planned Construction 2019 83827 5382 8302 MSYMI BLVD 53E27 13*590E BLVD �? 53827 SUNSET Benton to Mary 1 l A lir or lower the B ike Master Plan Projects Project Category Bike lane «§' Buffered bikelane 4.3 4Iane to 3 Ian e(g mersion BLVD Bicycle boulevard • Sidepalh 55 Strategic Plan: Investing in Substandard 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 • Significant facility needs in next decade: • Replacement Transit Facility • Replacement Equipment Maintenance Facility • Renovations at The Center • Rebuild Fire Station #3 and build new Fire Station #5 • Investments in both recreation centers and City Park Pool • Replacement Police Department Facility / City Hall and Fire Station# 1 expansion Fiscal Year Transfer Amount to Facility Reserve FY 2019 $2,000,000 FY 2020 FY 2021 $2,000,000 $4,000,000 FY 2022 $5,000,000 Estimated Balance $13,000,000 56 Building Critical Emergency Reserves Emergency Reserve (balance =$5.1 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 Recommended Staff Changes + Additions • FY 2021: +15.90 FTE (new positions and temporary -to -permanent conversions) • FY 2022: +3.00 FTE and Completed phased increase of minimum wage for hourly staff to $15/hour (approx. $950,000 recurring annual impact) • FY 2023 Rec'd: +3.74 FTE Recommended FY 2023 Additions to Core Staff Support Position Title FTE Fund Position Supports... Electrician (Traffic Engineering) +1 .00 Road Use Increased signalization Transportation Services Program Assistant +1 .00 .5 Parking / .5 Transit Service expansion and grant management Maintenance Worker I (Refuse) +1.00 Refuse Heightened curbside service demand and costs Creative Assistant +0.37 General Increased graphic design and ADA -compliance needs Program Assistant (Community Development) +0.37 General Additional housing compliance & reporting requirements Total +3.74 Full -Time Equivalents 58 LOOKING AHEAD 59 COVID-19 Recovery + Relief Existing staff have dedicated many hours to implementing new COVID relief programs to support households, businesses and non -profits It is expected this time commitment will grow in 2022 and 2023 as we move to implementation of ARPA grant initiatives Staff will soon be requesting temporary, grant funded staff in NDS to aid in program implementation and grant compliance On the immediate horizon is expanded eviction prevention, Forest View relocation, direct payment partnership with the County, Mobile Crisis expansion and BIPOC / underserved business support Transit Service Expansion Planning for Sunday service is underway, but implementation has been delayed to staffing shortages. Aiming for summer of 2022. After Sunday service launch, staff will begin focusing on late night, after hours and gap service options Ridership is still roughly 40-50% down from pre-COVID levels. (Up over 100% from 2020 numbers) Sustained reduced ridership will strain our long-term ability to pay for these expanded service options and may require an increase in property taxes, utility taxes, parking fees or a local option sales tax. Current plans are to use COVID relief funds to conduct a two-year pilot program for the Sunday service expansion Roadway Maintenance Funding Council received the report and presentation in early 2021 Iowa City's road condition currently 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 1 CITY OF IOWA CITY Pavement Management Program FY 2020-2024 HRGreen• fnAnin'Gmmunifir, Invm' s Llm. 62 Public Facility Planning and Implementation Many of Iowa City's public facilities are undersized for today's population / workforce and do not meet modern standards Significant facility needs in next decade: Replacement Transit Facility Replacement Equipment Maintenance Facility Renovations at The Center Rebuild Fire Station #3 and build new Fire Station #5 Investments in both recreation centers and City Park Pool Replacement Police Department Facility / City Hall and Fire Station#1 expansion Progress will require continued focus on funding the facility reserve fund, as well prioritizing staff time for planning, engineering and oversight Major Considerations for the Council Prior to FY23 Local Option Sales Tax (LOST) 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 2024) Plan for... Stagnant or possibly declining property tax valuation: Elimination of Multi -Residential Classification Continued phaseout of commercial backfill Non -assessment year will provide little bump valuation Stable tax and utility rates with minor utility rate adjustments to keep up with inflation Continued effort to fund the Facility Reserve and begin implementation of key projects Stable Capital Improvement Plan funding levels Status quo operations and local investments in strategic plan objectives Continued implementation of ARPA initiatives NAL THOUGHTS 66 The FY2023 budget: (1) Navigates the first decline in taxable valuation in over a decade while achieving a nominal decrease in the property tax rate (2) Maintains or grows key investments in council strategic objectives and basic municipal services (3) Begins to more aggressively set the table for investment in the next generation of public facilities needed to serve a growing community b/ r 1 ti ..1;pinalliiiv.tti -okras ag Air CITY OF IOWA CITY UNESCO CITY OF LITERATURE WWW.ICGOV.ORG/BU DGET STAFF PRESENTATION CONCLUDED 1 1 imospaqr CITY OF IOWA CITY 4 1 0 East Washington Strect Iowa City, Iowa 52240-1826 (319) 356-5000 (319) 356-5009 FAX www.icgov.org