HomeMy WebLinkAboutFY25 Budget Proposal 1-22-24 _ I r
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CITY OF IOWA CITY
UNESCO CITY OF LITERATURE
CITY OF IOWA CITY
FY2025 Budget Proposal
January 22, 2024
Sept. 5,2023: Jan. 22,2024: Jan.24,2024:
Council Work Session on Operating Budget Review Capital Improvement Plan
Budget Priorities Review
Feb. 20, 2024:
Feb. 6, 2024: Establish max levy rate for March 19, 2024
Finalize CIP to begin GO new County mailing notice
Bonding Preparations requirement(March 5'n Set hearing for property tax
deadline) levy
April 2, 2024:
Property tax levy hearing, April 16,2024: April 20,2024
setting of hearings for
budget adoption and any Public Hearing and vote on Certification with County
service and rate changes budget adoption Auditor
for FY2025(must be
separate meetings)
Budget Document Areas of Focus MI
Section �Mlllllll� IM4
Transmittal Letter (Executive Summary) 10 - 27
Economic Trends 37 - 40
Fund Structure and Description of Funds 271 - 276
Financial and Fiscal Policies 285 - 291
Long Range Financial Planning 292 - 295
General Fund Summary 313 - 327
W W W.ICGOV.ORG/BUDGET
Budgetary Funds ffc; dgetary
Finds
Special Debt Service Enterprise Capital Internal
Funds
General Fund Revenue Fund Funds Projects Fund Service Funds Iowa
O •• //�� It�
-------11111111111111111116—
General(10"] CDBG(2 101)) 7eh[Service parking(710']itl Capital Projects Equipment{610'} Fund
150"5
HOME Grant(21 10) Trans&(-71 5') Risk Management
(6200)
Rnad Tax Wastewater(720') Techlno4ogy 5ervees
(22J.092DO] Structure
Otf r Shared Waav[730'} Central Serwres
Revenues(23130) (84(i0]
Metro Planning
Drgan�n of Refuse CDIIe n Heats Insurance
Johnson County (7400} {65(10}
350
Employee Benefits Landfill[750'] Dental Insurance
[2400} {6900}
Emergency Levy Airport[7900]
(2450}
Affordable Housing Stormwa� (77410) Agency Fund
(25013}
hwa City Property Housng AaHnrity
Management(25113} (79") Projec[Gteen g1C'2]
Tax Inc ent
Financing(29")
SelfS uppordrig
Municipal [r!me r�rxry r+.rm olo.gym yuarcr a:e.a>Tri..a n uc
Ilnr�l Re .hut R Vng prey dameW
Improvement Di trict rn.a Hal reamnrs.
(28213)
Major fonds
Fiscal Year 2024 Budget Review
• Second straight year of declining taxable value (-.36%)
• Multi-residential properties considered residential for taxable value purposes
• Declining commercial and industrial backfill payment from the State
• Stable tax rate (ended 11th straight years of an overall tax rate reduction)
• Inflationary utilitrate adjustments (water 4%, wastewater z%, curbside pickup $i/month,
stormwater $.5oNonth)
• Status quo department budgets with 11.5 FTE added
• 5.90 funded from General Fund
• 3.6o funded from enterprise funds
• i funded externally
• Demonstrated progression toward Strategic Plan actions
• Concerns expressed about lack of taxable valuation growth trends and ability support
operations and capital demands
• Unanticipated land acquisition of 21S. Linn draws down excess reserve levels
State commercial Four consecutive
and industrial Significant drop in years of depressed
backfill payment residential rollback taxable property
phasing out value growth
2023 State property Significant volatility
tax reform in key expense
lines
State of Iowa Commercial Commercial and Industrial Backfill
Payments from State of Iowa
& Industrial Backfill
$1,800,000
2013 tax reform reduced commercial and s1,6°°,°°°
industrial taxability from 100% to 90% $1,400,000
The State "backfilled" this loss and the $1,200,000 M
City had been receiving approximately
$1 .5 million in backfill payments annually $1,000,0°°
(equivaient to aaout 14- i :, riretignters) $800,000
State Legislation passed during the 2021 s600,000 '
Session ended backfill payments
$400,000
Iowa City's backfill payments are
phased out over 5 years, began in FY23 $200,000 I
FY25 receipts are projected to be $0
approximately $617,000, with FY26
projected at $308,000 before being fully
eliminated in FY27
*NEW* State of Iowa
Business Property Tax BPTC Backfill Budget for FY 2024:
Credit Backfill General $350,608
HF 2552 passed during 2022 legislative session Risk $12,572
converts Business Property Tax Credit to a
partial property tax exemption with the value Library $11 ,687
reimbursed by the State to local governments.
State has budgeted $125 million for Transit $41 ,121
reimbursements through FY29 and pro-ration
of reimbursements will begin in FY30 Emergency Levy $8,657
Through FY29, Iowa City's reimbursement will Employee Benefits $144,751
equate approximately $700k+ annually
Legislative Services Agency Fiscal Note Debt Service 107 280
predicts proration in FY30 will result in negative Total $676,676
impact on local government revenues
Residential Rollback Trend
The rollback will drop to 46.34% in FY 2025 (Assessment Year 2023)
A 1 % change in the rollback figure represents approximately $1 ,100,000 in tax revenue
Rollback by Assessment Year
90% 81%
78%
8o%
68%
70%
56%
60% 55% 53% 56% 54%
64% 48%
507° 44%
54%
30%
z0%
10%
0%
oo O) O H N M .Y l!1 kD n W O) O H N M .Y l!1 l0 r� W O) O H N M .¢ Vl l0 n W O) O H N M .¢ Vl l0 n W O) O H N M
a) a) a) a) Ol a) a) a) a) Ol a) a) Ol Ol Ol Ol Ol Ol paj Ol paj paj O O O O O O O O O O O O O O O O O O O O O O O O
'i 'i 'i 'i 'i 'i 'i 'i 'i 'i 'i 'i 'i 'i 'i 'i 'i 'i 'i 'i 'i 'i N N N N N N N N N N N N N N N N N N N N N N N N
2024: Multi - Residential Cliff Residential Multi-Residential)
Rollback Rollback
Prior to the 2013 State property tax reform, FY14 52.82% 100.00%
multi-residential properties were classified as FY15 54.40% 95.00%
commercial and taxed at 100% of value
In FY 2024, multi-residential properties were FYI 55.73% 90.00%
combined into the residential classification FYI 55.63% 86.25%
v
The taxability of multi-family property has FY18 56.94% 82.50% �
dropped 53.66% over the last 11 years. rq
Cumulative loss in revenue to the City over FYI 55.62% 78.75%
the 11 years is estimated to be more than $20 0
million FY20 56.92% 75.00%
Multi-residential properties previously FY21 55.07% 71 .25% kD
accounted for approximately 8% of Iowa
FY22 56.41 % 67.50%
City's total assessed valuation
Now approximately 81 % of the City's total FY23 54.13% 63.75% Ln
assessed valuation is subject to the annual FY24 54.65% 54.65%
volatility of the residential rollback rate
FY25
L 46.34% 46.34%
Building Permit Trends
Building Permit Construction Value (calendar year)
400,000,000
350,000,000 2023
actual:
300,000,000 2017-2019 $275.4M
average:
250,000,000 2012-2015 average: $213.7M
2010- $161.3M 2020-2022
200,000,000 2011 average:
150,000,000
average: $125.1 M
$88.7M
100,000,000
50,000,000
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Changes in Taxable Valuation Pattern
Total Property Tax Valuations & Percent Change over Prior
Fiscal Year
j $5,000,000,0()0 10.00%
ar $4,000,000,000 8.00%
$3,000,000,000 6.00%
$2,000,000,000 4.00%
~ $1,000,000,000 2.00%
$0 "All VW t 1 -02000%
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25
�Tax&eValue $3,182, $3,421, $3,542, $3,745, $3,923, $4,258, $4,396 $4,375 $4,360 $4,517
Val % Change 1.46% 7.50% 3.55% 5.72% 4.74% 8.54% 3.2MA -0.46% -0.36% 3.61%
it
2-yr. Val % growth: 8.96% 9.27% 13.28% 2.78%
Property in Iowa is reassessed in odd numbered years
State of Iowa Property Tax Reform
2013-2021 Legislation:
• 2013: Significant property tax reform passed and phased in through FY24
• 2020: Legislation passed to phase out Commercial/Industrial backfill payments by FY27
• 2021: Legislation creates new Business Property Tax Credit backfill which may cease by end of
the decade (approximately $675,000 in annual revenue expected to be lost)
2023 Legislation:
• New military and senior homestead exemption (reduced taxable valuation by an estimated
$13-14 million)
• Phase out of multiple levies (Library and Emergency for Iowa City)
• FY2024 these levies provided $1.96 million in revenue to Iowa City
• Fully eliminated by FY2029 but could be sooner based on annual taxable valuation growth
• FY25 approxi mately l7 cents from total 47 cent combined libraryand emergency levies will be lost
(3605o in firstyearof phaseout)
• Unless a reduction in service is desired, this loss must be absorbed in the General Fund
Volatile Variable Costs
W
Property & Liability Insurance
The City experienced significant increases in property and liability insurance premiums as well as
deductibles over the last 5 years.
Property Insurance increased 25% in FY24 and is projected to increase another 35% in FY25
Liability Insurance increased 11 .6% in FY24 and is projected to increase another 21 .4% in FY25
Total projected added expense over two years in the General Fund is over $850,000
REVENUE
FY25 All Funds Revenue Sources
All Funds Revenue Sources (FY 2025)
Misr.
71 %
C41hrer
source!
IntErgovurnmen-tall
Pro party
3111
Use of Money & Prop, 19d
Licenses & Permits, 1%
-Other City Taxes, 4%
FY25 Revenue Sources - General Fund Only
FY2025 Revenues & Other Financing Sources
excludes transfers other Financing
Miscellaneous Sou rces
Charges for Fees & 12%
196
Services
296 Intergovernmental
Use of Money & _ 7%
Property
Licenses & Permits
2% �% Property Taxes
67%
Other City Taxes
5%
FY2024 FY2025
FTax Rate Tax Rate IW
Dollars Dollars
i erS7,000 $9,000
General Fund Tax Levies:
General 533.566,983 8.140 $36,79Z 773 8.402
Transit .53,972,054 0.950 $4, 160, 117 0.950
Proposed Tort Liabilify .51,214,36E 0.290 $9,578,392 0.360
Library 91,128,899 0270 0.000
Emergency $636,222 0.200 0.000
Levy Subtotal: 49,018,519 9-810 42,537,282 9.742
Su
Levy S4,5d3 3.043 $3,664 3.003
Rate General Fund Property Taxes $47,023,062 $42,535,743
Special Revenue Levies:
Employee t3enefifs $73,952:255 3.344 $14,644,26$ 3.344
Subtotal: $13,952,253 3.344 $14,644,268 3.344
Overview
Debt Service $10,696.221 2.479 $17,636,020 2.577
Total City Levy Property Taxes: $63,700,5 73.633 $68,815,431 15
% Change from prior year -0.37% -2.16% 4.74% 0.00%
SSUID Lewy- Downtown $606,632 2.500 5544,999 2.300
SSUID Levy- South District $106.673 5.000 5177,745 5.000
Total Property Taxes 566,312,743 -- 569,477,825
Property Tax Rate Trend
Property Tax Rate vs. Valuations
$5,000 16.8
$4,500 —
16.6
$4,000 - 16.4
o $3,500
16.2
E $3,000
S 16
$2,500 –
15.8
a
$2,000
a $1� 15.6
$1000 _ _ 15.4
$500 15.2
$0 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25' 15
olliIIIIIIIII Tax Value (millions) $3,183 $3,421 $3,543 $3,745 $3,923 $4,258 $4,396 $4,376 $4,360 $4,517
Val%Charge 1.46% 7.50% 3.55% 5.72% 4.74% 8.54% 3.24% -0.46% -0.36% 3.61%
+Ptax Rate 16.651 16.583 16.333 16.183 15.833 15.773 15.673 15.633 15.633 15.633
Rate%Change -0.32% -0.41% -1.51% -0.92% -2.16% -0.38% -1.01% -0.26% 0.00% 0.00%
FX 2024 Overlapping Tax Rate
Consolidated Tax Rate: Percentage of
• The City of Iowa City tax levy Levy Share of all Taxing Bodies
rate is one component of the
total property tax rate property State of
owners pay Iowa City of
o% Iowa
• The City's portion of the tax bill City
was as high as 43.5% in the last Kirkwood 39%
decade 4% Johnson
County*
16%
The City's Levy rate dropped every
year from FYI - FY23 and ICCSD
remained stable in FY24. The City 41%
rate accounts for less than half the
total rate paid by property owners The State of Iowa has aspeciallevy Of80.0033/83,000 of taxable vaIue
*Inc IudesJohnson County,City Assessor,and Agriculture Extension Levies
OVERLAPPING TAX RATE TREND
$45.00 44.50%
$40.00
43.50%
$35.00
$30.00 42.50%
$25.00
41.50%
$20.00
$15.00 40.50%
$10.00
39.50%
$5.00
$0.00 38.50%
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
Property Tax Levy Comparison
city FY2023 Tax - % Change
FY2013 Tax Rate
Waterloo $ 19.73 $18.21 8.35%
Council Bluffs $ 18.26 $17.85 2.30%
Davenport $ 16.78 $16.78 0.00%
Des Moines $ 16.61 $16.92 -1 .83%
Cedar Rapids $ 16.25 $15.22 6.74%
Sioux City $ 15.77 $15.99 -1 .41 %
Coralville $ 14.31 $13.53 5.78%
North Liberty $ 11 .45 $11 .03 3.83%
West Des Moines $ 10.90 $12.05 -9.54%
Ames $ 10.20 $10.72 -4.84%
Dubuque $ 9.90 $10.78 -8.15%
* Proposed Iowa City tax rate for FY2024 is $ 15.63.
Major Revenue Sources: Hotel / Motel
$2,000,000
$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 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Hotel Motel Taxi $1 ,078,762 $1 ,136,712 $1 ,045,686 $1 ,301 ,827 $1 ,134,864 $938,048 $1 ,708,182 $1 ,885,263
Major Revenue Sources: Utility Franchise
$1,400,000 AR Iowa City Utility Franchise Tax is currently %
$1,200,000
Davenport 0%
$1,000,000 West Des 0%
Moines
Ames 0%
$800,000 Coralville 1%
$600,000 Iowa City 1%
Council Bluffs 2%
$400,000 * North Liberty 3%
Cedar Rapids 3%
$200,000 Waterloo 4%
Dubuque 5%
$0 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Sioux City 5%
■ Utility Franchise Tax $976,060 $964,690 $883,652 $993,852 $1,148,998 $1,116,963 Des Moines 5%
*North Liberty raised their Franchise Fee Rate i°/a this past December
Cable TV Franchise Cable Franchise Fee Revenue
$773,oi8
$750,3.67
• Revenue levels have $733644
$685 6S9
been steadily declining as $662,448 $S83.,904
alternate forms of media $586,428 $S81,420 $S82,920
increase in popularity $54°,223. $540,200
• Decline has seemed to
bottom out in past few
years
• Projected to remain
stable around $580k
annually 0y� 0y5 °y� 0ti� 0y`b 0y°> °tio 0titi °ryti 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 +15.07% 16%
14%
$10,000 +9.45% 12%
N
° $8,000 .97 10%
D
0
8%
+5.13
$6,000 6%
c
w +2.3 % .50%
.89
w +2.37%
$4,000 4.23%
2%
$2,000 0%
° 1.75 -2%
$0 -4%
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY 2023
RUT Revenues RUT YoY % Chg.
ON
■■■I ■■■■■■■■■■■■■■■■■■■■■■■■
" ■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■u■
.......■■■■■■■■■■■■■w■■■■■■■■■■■■C■■■■
■■■■■■■■■■■■■■■■was!■■■■■■■■■■■■■■■■■■■ • - . • - • - - • - •
■■■■■■■■■■■war+■■■■■■■■■■■■■■■■■■■■■■■■ • • . • . • - •
The current Need for pavement repairs, the total cost to Road Use Tax vs .
address every single roadway distress in the City,
bringing the network to Very Good" condition, is
approximately $189 Million. That Need is projected fo Need + Material Costs
grow to $472 Million by 2035.
S35DM Per 2021 Pavement Management Plan:
E300M • Additional $ii million needed each yearto keep
22SOM current conditions steady
s2MM • Delaying projects can increase rehab costs by
25% or more
x158M
• Iowa City's Road network value is s6-10 million.
Wom • 36.-1% of the City's road network rated Fair, Poor,
twm or Very Poor.
$OM
ryas Ory° ry�ryp �O'�"1ary�,�a�ry4���o�$ryop,�o��ryo�°ryo��n ,�a� �p • RUT Revenues have only increased $3.3
Current Need (2019) = $189 Million million over past decade
Projected Need by 2035 = $472 Million • + 54% ($922k) increase in Concrete costs for
Figure¢9: Projected "Need" FY2 over FY22.
MLgwe displays the exkiYng funding requimd to bring every pavement ip to -Very Cmc: 4
wnddior;
to-YJeed'as WON as&projected Grawdh over the next IS Years.
Local Option Sales Tax ( LOST)
FY2023 Actuals
Receipts
. .
50 % Property Tax Relief, 50% Street, Neighborhood
Des Moines 2019 None $48,456,182 and Public Safety Improvements
Cedar Rapids 2009 2034 $23,307,090 100% Street Repair
60% Property Tax Relief, 40% Capital Improvements
Davenport 1989 None $20,026,236 and Equipment
60% Property Tax Relief, 20% Infrastructure Projects,
Sioux City 1987 None $14,526,602 10% City Facilities, 10% EDX
West Des Moines 2018 None $4,073,188 50% Property Tax Relief; 50% Quality of Life Projects
Council Bluffs 1990 None $10,737,297 100% Streets and Sewers
Waterloo 1991 2025 $11 ,078,429 100% 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) LOST would generate an estimated $8 - $iz
,moo million per year and grow organically over time.
gD.o
1DD
TD.o DD
GD
8 7D
¢' $ SD.o z 6D
[3
5D
4D.o 4D
aD.o � 3D
2D
2D.o
D 1D
;2.55 Million (base) —j4.25 Million{D.5% LDS7}
—$2.5 Million (9ase) —$4.25 Million (D.5%LOST)
�;5.25 Million (0_596 LAST+Base):j$.5 Million{196 LDST}
—$15.25 Million X.5%L45T+ggse]—$8.5 Million(1% LOST)
_1%L45Twf Growth —Max Budget(Base+1%LOST) —I% LOST wf Growth —Max Budget (Base+ I%LCS-9
EXPENDITURES
All Funds Expenditures by Fund Type
Total Budgetary Expenditures = $241 ,809,952
Fiscal Year 2025 Expenditure Comparison by Fund Type
excludes transfers
$80,004,D00
$60,004,040
$40,004,004
$20,404,044
General Enterprise Special Revenue Debt Service CapRal Projects
■ FY2025 $71 ,132,890 $64551,242 $16,219,777 $13,787,744 576,118,294
General Fund Expenditures ( FY24)
Comparison with Iowa communities
Graph G - Iowa City, Iowa
• In Iowa City, 39% of General Fund Expenditure is
dedicated to Public Safety and 23% is Culture and
Recreation
• On average, cities in Iowa spend 44% of General Fund 23% 33%
Expenditures for Public Safety and 20% on Culture and
Recreation
• For similar sized cities in Iowa, Public Safety as a
percentage of General Fund Expenditures is 5o% and
Culture and Recreation is 16%
15°d
0 Total Transfers Out 0 General Government
• Iowa City provides exceptionally high public safety 0 Public Safety 0 Total Debt Service
services with lean budgets while also investing a 0 Public Works 0 Capital Projects
considerably higher percentage of General FundHealth&Socia lServices
0 Culture&Recreation
resources in culture and recreation than our peer 0 Community& Economic development
communities.
General Fund Expenditures
FY 2025 General Fund Expenditures by Category
excludes transfers
%
Services
18% Contingency
Personnel 2%
750/6 Supplies
3°.%
Capital Outlay
2%
General Fund Expenditures
WMEW FY24 (Adopted) FY25 (Proposed) Percentage Change
Personnel $ 50,716,034 $ 53,007,775 + 4.52%
Services $ 12,632,483 $ 12,901 , 130 + 2. 13%
Contingency $ 1 ,072,000 $ 1 ,400,200 + 30.62%
Supplies $ 2,095, 149 $ 2,223,069 + 6. 11 %
Capital Outlay $ 1 ,555, 1 14 $ 1 ,600,725 + 2.93%
Total 68,070,780 71 ,132,899 +4.5%
*Excludes Transfers Out
Public Safety Pension Contributions
City of Iowa City MFPRSI Contributions
3500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
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
0
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 Iowa City policy City goal is to meet
more than 5% of specifies that debt Moody's Aaa
total assessed service levy shall benchmark of net
property value. not exceed 30% of direct debt
the total City levy in outstanding of .75%
any fiscal year of the city's total
assessed value.
Debt Service
Iowa City currently
utilizes 15.5 of the The projected debt
allowed debt limit
oel aseprproc . malvto bopewo
ObfgraGona
Deb0e0
50 aajteC0c.itt7ey8d is
of
levy total valuations
Moody' s Aaa Rating : All U . S . C *"* � �
Distribution of Moody's General Obligation Ratings for All
US Cities
600
500
U
400 Iowa Cit
O 300
L
E 200
7
Z
100
0
Aaa Aal Aa2 Aa3 Al A2 A3 Baal Baal Baa3
[%eriel s 239 303 567 460 295 135 65 20 25 13
of Total 11.20% 14.20% 126.57% 21.56% 13.82% 6.33% 3.05% 0.94% 1.17% 0.61%
Moody' s Aaa Rating : Iowa
Distribution of Moody's General Obligation Bond
Ratings for Cities in Iowa
20
18
16
14
Y
12
10
8 Iowa Cit
E
z 6
4
2
O
Aaa Aa1 Aa2 Aa3 Al A2 A3 Baal Baa2 Baa3
Seriesl 3 7 13 13 18 10 7 O O O
% of Total 4.23% 9.86% 118.31%118.31%125.35%114.08%1 9.86% 1 0.00% 1 0.00% 0.00%
FUND AND FEE
ANALYSIS
Enterprise Fund Balances
Estimated Restricted Unassigned Unassigned
Fund Estimated Transfers In Budgeted Transfers Fund Committed, Fund f3alanee, Balance as % =
Revenues Expenditures Out Balance of ikv& Trans
Assigned G130l2025 In
UL
Parlor 8,98391E 1,5W.00O E,124,97� 3.24-0.20C S,a1o.o22 49.7C2 3,429,180 °3°6 A
TTanst 7.928.20C 4,997,2CO 11,95545C 2M9e OC 4,439.5=4 2.7.e 1.5M 1,$77,$68 13% A
Wastewater 13,315a,5w 5,375.X0 12,714,60C 6.732—FOC 2','25,210 3.31+.273 12,867,336 OB4i AA
''Va-er122513,20C '.472.200 10,W5,95= �3.04D.20D 14.34.372 4.905.3E3 9,2611,322 05% AAA
:f us E 5,149,390 +.COC 4.731.60C 2M,DOD 2,128.413 - 2.1St,413 429E AA
Landfil 7,964,901] 1,514,13CO 13,979,45C 1,525,000 22,600,7132 20.DC1.Oe4 2,739,708 2096 AA
Airporl 44D,500 1DO,000 4n55C 35D,DOD 42,505 - 42,505 B96 A
Stormvaw 1,9113,900 1,10'.EC, 13131,90C 2,135,001 1,716,909 B02.d31 1,0531948 35% AA
UP 12,892728 0 12,409,780 3D,7013708,425 1,378,528 55,719,73$ 4496 AA
Fund Health Status Legend (rating assigned by City):AAA = Good, AA = Adequate, A = Needs Monitoring
FY 2025 Utility Rate Changes
• +3% Water Rate
• Approximately $ 1 .09/month per home
• Support general operations
• +5% Wastewater Rate
• Approximately $ 1 .84/month per home
• Support general operations and anticipated debt issuance
• +$ 1 /month Recycling Rate
• Support general operations and increasing third-party processing
costs
• Total monthly utility fee increase for a household is approximately $3.93
FY 2025 Other User Fee Changes
These user fee changes impact only those who utilize these services:
• Landfill:
• $2.50 per ton tipping fee increase to support operations, new
equipment building and future land acquisition
• Parking:
• All parking decks increased to $2/hour (maintain first hour free)
• Meters increased to $ 1 .50 or $2/hour based on location
• Citations increasing for expired meters, handicap space, fire
hydrant/lane, and commercial loading zone violations
• Total estimated annual revenue increase is $2.9 million
• $ 1 .5 million to fare-free transit
• $ 1 million to support parking deck maintenance CIP
• $400,000 to support enhanced cleaning efforts
Estimated Property Tax Impact
FY2024 FY2025
$854 $724-$869
IMM"mmogymm 1
Assessed 1100,000 1100,000 1120,000
Valuation
Taxable $54,650 $46,343 $55,608
Valuation
City Levy $15.633 $15.633 $15.633
Property Taxes $854 $724 $869
Difference N/A -$130 +15
$100k used to allow for easy adjustment to an individual's home value.
Annual Financial Household Impact
Annual Financial Impact to Residential Households
$2,500
$2,D40
$1,500
$1,000
$500
$0
-$540
FY2019 FY2020 FY2021 FY2D22 FY2023 FY2024 FY2025
■ Property Taxes $900 $941 $869 $884 $848 $854 $724
■ Storrnwater $54 $64 $60 $60 $60 $66 $66
■ Refuse $229 $229 $244 $240 $276 $300 $312
■ Sewer - 800 cubic feet $433 $433 $433 $433 $433 $442 $464
■ Water-- B00 cubic feet 1 $380 1 $399 1 $399 1 $419 1 $419 1 $436 1 S $449
Total $1,996 $2,022 $2,001 $2,036 $2,036 $2,098 $2,015
Percent Change 0.6% 1.3% -1.1% 1.8% 4.0% 3.0% -3.9%
Based on a residential customer with $ 100,000 property valuation.
INVESTMENT IN
STRATEGIC PLAN ., MASTER
PLANS & CORE SERVICES
American Program 2021 Est. Funded Expended
Emergent Needs: Range
Rescue Plan Act Direct Payments to Eligible 51 -$1.5M $1,184,071.19 $1,184,071.19
Adults
Eviction Prevention Sl -$2M $1,137,710.00 $123,791.06
Housing Repairi Relocation $
(A R PAS Funds Emergency Non-Profit $500k$$1 M $$485,000.00 $$329,667.60
Assistance
Strategic Investments:
In progress awards / programs: BIPOG Business Support $4-$6M $4M(pending) so
• Eviction prevention Framework i Infrastructure
Social Service Needs $2M(pending)
• Non-profit operating Assessment. Capital Planning & $3-$6M $1000,000 so
assistance Seed Funding
Non-profit capital capacity Affordable Housing Initiatives $2.5-$6M
• prop p y Mental Health Services $1.5-$3M $939,082.00 $565,$96.84
building Workforce Development $1.5-$3M $1285,239 $344,161.42
• Underestimated business
Climate Resiliency-and Hazard $500k-$3M
grants Assessment Planning
• Affordable housing Small Business, Arts, Culture, $1 -$2M $250,000.00 $186,803.53
• Mental health services and Tourism Investmants
Rev. Replacement
• Workforce development $676,146.49 5676,146.49
• Small business and tourism Government Services and City Lead Reduction: so
Revenue Replacement $1 -$3M $500,004 so
• Lead service line program Retention Incentive:
$1,137,770.95 $91,383.79
Ad m in Costs:Actual
STRATEGIC PLAN
VALUES
Values
Social Justice, Racial Equity & Human Rights
Continues $100,000 for Social Justice and Racial Equity Grant program (increased from $75k in FY
22)
Approximately $600,000 remaining in non-recurring Black Lives Matter line item to be invested at
the future direction of the City Council
Programming resources to support the new Equity and Human Rights Engagement Specialist
position that was added in the FY 24 budget
Continued funding for partnerships and sponsorships including NAACP Criminal Justice Summit,
Juneteenth, Indigenous Peoples Day, and MLK A 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 mental health liaisons,
support for homelessness services, fare free transit and funds to continue increasing document
translation.
Values:
Climate Action
2024-2025 Investments
• Continued investment in free home energy audits, insulation grants, public and
private tree planting, climate action grants, energy blitzes and more!
• New offerings include energy efficiency grants to homebuilders, resilience hub
investments and whole house electrification grants for landlords committing to
accept Housing Choice Vouchers
• Other major initiatives include an expanded composting operation at the landfill,
permanent fare free transit and solar installation at the Iowa City municipal airport
IOWA CITYCLIMATE
r ACTION
MATTERS
Strategic Plan
Values
Partnerships & Engagement
Public Safety Expanded Human All-ages Library,
Party in the Park National Night Rights Recreation, and
and Rec & Roll Out Programming Senior Center
programming
Climate Inclusive
Ambassadorand Neighborhood PublicArt & City Sponsored
Resilience Corps Association Placemaking Festivals and
Programs Engagement Events
Non-profit Crisis New Winter Community Violence ARPASSMID
Response Shelter Intervention Partnerships and
Program ICDD Cleaning
Services partnership collaboration collaboration
STRATEGIC PLAN
IMPACT AREAS
Impact area: • - • • •
Neighborhoods & Housing
Fiscal Year 2025 Budget Highlight:
• Affordable Housing Fund contribution increased by 3% to $1,030,000 in alignment with the
Affordable Housing Action Plan recommendations
• Winter shelter funding increased $75,000 to reflect new shelter as a service funding agreement
with Shelter House. Will be incorporated into annual Affordable Housing Fund distribution formula.
• Land acquisition for significant-scale permanent affordable housing projected utilizing ARPA and
Riverfront Crossings funding streams
• Housing funds budgeted through CDBG/HOME and continued funding partnership with the
Johnson County Affordable Housing Trust Fund is anticipated
• Funding in place to initiate a multi-year effort to update the Comprehensive Plan and set the
stage for zoning code changes that will help the City meet affordable housing goals
• NDS Annual Report continues to provide details on number of housing units assisted and created \
through our affordable housing efforts.
Affordable Housing Fund '
From FY 2018 - FY 2022, - City investedThe FY2024million '
initiativesapproximately $10.7 million in affordable in General Fund support for Affordable
housing - fifth straightyear
• Funds assisted 1 ,771 units from FYI - FY22 Affordable Housing Fund Breakdown:
(excludes vouchers, public housing and • 70% Housing Trust Fund of Johnson County
workforce housing tax credits) - (20% reserved for LIHTC)
• City funds have leveraged $5.7 million in • 7.5% Opportunity Fund. 7.5% Healthy Homes Program
outside Low-Income Housing Tax Credit
(LIHTC) funding from FYI - FY22 • 10% Community security deposit
assistance and risk mitigation fund
• The majority of funds provided to the • 5% emergent situations (e.g. sudden
Housing Trust Fund of Johnson County are displacement)
distributed as loans and thus will continue
to bolster affordable housing resources as
loans are paid off
Development of New • • • • - Strategic Plan
Housing Revenue Streams
• - fee-in-lieu option
Annexation• Tax increment Financing fee-in-lieu negotiations
fee-in-lieu - . . .
Recent examples of agreements:
• Riverfront Crossings: $3.86 million collected to date
• 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
iscal Year 2025 Budget Highlights:
• Expanded electric vehicle parking in all parking ramps and
continued investment in private charging infrastructure
through Climate Action grants
• Establishment of fare free transit funding plan including
enacting the first step with increased parking rates
• Capital Improvement Program:
• Annual: bus stop improvements, sidewalk infill and curb
ramp improvements 7~
• Stronger pedestrian realms with Gilbert Street Bridge,
Dubuque Street and Iowa Avenue Pedestrian Bridge
improvements
• Initiating design for the Highway 6 Trail Extension between
Broadway and Fairmeadows (2026 construction)
2024 & 2025 Bike Master Plan
Implementation Strategic Plan
2024 2025
Bike Boulevards: Bike Boulevards:
• Arlington • Keokuk • Friendship • Broadway
• Oakcrest • E. Washington • Westminster • Highland
• Church
• Big
Ycle lone
1 4to Sunset(Benton to NWY t
3 Lp ) 2024
South GilbnVersions With�.J 2024 ert St, Stevens bl M�Ones:
- • ,( = Troils: McCollister
1 • 4e ; NW
r �� �, Br qq 4y��',se Troil (Foirrh
•y 1 eogows to
Investments in Roads
• RUT funds annual pavement rehabilitation (resurfacing) Future Road Use _
• Equipment replacement funds have helped the Streets
Division improve efficiency and effectiveness of in- nate revenue - •
house pavement management efforts •
neededinvestment - - .
• Necessarily increasing our reliance on General
Obligation bonds for other large road projects in the CIP pavement •
ble
Annual Pavement Rehabilitation Capital Expenditures Budget
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Major Road Improvements
Significant Upcoming Road 2024: Gilbert Street Bridge Replacement
Projects (multi-modal design
approach to all) Dubuque Street Reconstruction
In addition to the annual 2025: Court Street Reconstruction ($9. 1 million)
pavement rehab program and N. Gilbert Street Reconstruction ($2.3 million)
smaller improvements
Future Road Use Tax
• - 2026: Dodge Street Reconstruction ($ 19.5 million)
JR'evenue not pacing with
inflation2027: Taft Avenue Reconstruction ($ 12.2 million)
million • of annual
neededvestment to
.
' pavement 2028: Market & Jefferson Two-Way Conversion ($5 million)
stable
Burlington Street Bridge Replacement ($30 million)
Impact area: • - • •
Economy
Fiscal Year 2025 Budget Highlights:
• Continued support of the MDC Iowa BIPOC Business Accelerator
Program ($25k)
• Opportunity fund for small business grants, technical assistance
programs and Better Together 2030 initiatives ($115k)
• Anticipated ARPA funding agreements to support placemaking in
partnership with SSMIDs ($500k) .,,
• Execution of $4 million ARPA grants for underestimated businesses and
continued investment in childcare and tourism
• Flat funding for Greater Iowa City, Inc. and arts and culture partners- �ip
City of Literature, Englert, FilmScene, Riverside Theatre, Summer of the
Arts (organizations continue to request increases in annual support) .i_
Impact area: • - • •
Safety & Well - Being
Fiscal Year 2025 Budget Hid
• Continue to increase annual Aid to Agencies grant program by 3% per past City Council direction (total
grant program now at $770k with $650k in General Funds) L`
• Continued investment in Fire Department contingency to increase future budget capacity for staffing a 2
new Station 5
• Begin shifting mental health liaisons to co-responder model in alignment with Preliminary Police Plan
• New Civilian Crime/Data Analyst position to support Community Violence Intervention program, non-profit
capacity building and public transparency efforts
• Expansion of local (UI) and growing statewide license plate reader technology for investigative support,
crime prevention and location of missing and endangered persons
• Non-profit capacity building grant executions with Neighborhood Centers of Johnson County and Free
Medical Clinic
• Continued investment in Senior Center building and expanded night and week programming
Park Master Plan Implementation • - • •
-
CITY OFIOWA CITY - Underway and Upcoming in 2024-2025
• Mercer Ballfield Improvements
• Mercerand City Park Tennis, & Pickleball Improvements
• Terrell Mill Skate Park Renovation and Bike Pump Track
• Terrell Mill Single Track Course
• College Hill Park Playground Replacement
• Shannon Drive Park Buildout
• Carson Lake and Recreation Planning
f • City Park Pool Replacement
• Multiple Trail Renovations (Bridges and Overlays)
• Calder Park to Monument Hills Subdivision Trail
Connection
Aeoi.a sep,aohhe.L4.2DL7
• Highway 6 Trail Infill Design
Rag hbk Ecological Restorations and Ned Ashton Grounds
Improvements
Impact Area: Safety & Well- Being
Aid to Agencies Grant Program
General Fund Support for Aid to
• Approx. $100,000 in Community Development Block Agencies , ,
ram
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
EMPPF-
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 rehabilitation (2023)
• Equipment Maintenance Facility (2024-25)
• City Park Pool (2024-2025)
• Senior Center interior rehabilitation (2026-2027)
• Fire Stations #3 and #5 (2026-2027) currently insufficient funding in the Facility Reserve for the
$10 million estimated cost
1 • City Hall, Fire and Police headquarters space needs study under contract. High level direction to
be sought from City Council in 2024
• Secured nearly $30 million in federal funding to support Transit and Landfill compost projects
• Landfill and Wastewater enterprise funds supporting major facility enhancement projects
• Budget supports data-informed decision-making goals through continued buildout of the asset
management system and funding for a new statistically valid community survey with benchmarks
I
Resources:
People
Fiscal Year zoic, Accomplishments
• ARPA funded retention bonuses for AFSCME and Administrative, Confidential and Executive staff
• Completion of phase i on the classification and compensation study and implementation of reclassification
recommendations
• Continued growth of the internal leadership exchange program for supervisors
Fiscal Year 2025 Additions
• Senior Facilities Design and Construction Manager in Public Works
• Council approved and authorized during FY24
• Will work extensively on major public facility projects including the new Transit and Equipment buildings
• Civilian Crime / Data Analyst
• Position was previously filled by a sworn officer, however vacant since the pandemic
• Bolster support of the County Community Violence Intervention program
• Support non-profit capacity building similar to how the position assisted Cross-Park Place and Guidelink
planning
• Strengthen public transparency efforts with enhanced reporting
• Additional $300,000 dedicated in contingency funding for future Fire Station 5 staffing.
Resources: . - . • .
Financial
• Stabilizes several utility enterprise funds that continue to be impacted by macroeconomic pressures
• FY24 addition of a Grants Management Specialist will bolster our long-term ability to secure and manage
external funding
• Emergency Reserve remains flat at $5.4 million
• 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
• Facilities Reserve balance being drawn down without additional contributions planned in FY24 (due to
unanticipated land purchase) or FY25 (no budgeted transfer)
• General Fund Unassigned Balance as a percentage of Revenues and Transfers In is projected to decrease in
FY24 and FY25 due to unplanned land purchase and draw down of Facility Reserve. Remains in policy range
for FY25 at 31°7o but needs careful monitoring
Looking Ahead: Next Year' s Budget ( FY 2026)
Plan for. . .
• Continued State property tax reform impacts
• Final year of the reduced Commercial and Industrial Backfill payment from the State
• Continued forced General Fund levy reduction
• Constrained General Fund will result in minimal operational investments (through FY29)
• Larger than usual G.O. Bond issuance in 2025 driven by Court Street reconstruction
(increased debt service levy rate likely)
• Projected 1 % utility tax proposal to support continued fare free transit
• Modest public utility rate increases to keep pace with continued inflationary pressures
• Monitoring of General Fund reserve levels to ensure compliance with fiscal policies.
• Facility reserve balance will be drawn down significantly, if not completely, for public
facility project investments (Senior Center, Equipment Building, and City Park Pool)
Needed: Intentional efforts to expand the tax base through support of
smart growth and economic development opportunities
Final Thoughts : The FY2025 Budget
( 1 ) Continues to move our community forward through investments that align with
our Strategic Plan and a robust capital plan despite new property tax reform
other financial headwinds
(2) Recognizes increasing red flags and prudently limits recurring operational
investments that could significantly strain the organization in the coming years
(3) Sets the stage for a sustainable revenue stream to support fare-free transit, one
of the largest local public service enhancements in decades
(4) Ushers in a period of significant investment in public facilities with no associated
tax increases and limited utility fee increases that will serve Iowa City for
generations (Senior Center, Equipment, Transit, Landfill, Wastewater, and more)
_ I r
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CITY OF IOWA CITY
UNESCO CITY OF LITERATURE
WWW . ICGOV . ORG/ BUDGET