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Home My WebLink AboutWS - FY 2025 FINAL Presentation - Truncated for FY26 preview STAFF PRESENTATION TO FOLLOW: I � I mmk 0-5L -4 IIP 7jP 7mb ib Ink CITY OF IOWA CITY UNESCO CITY OF LITERATURE CITY OF IOWA CITY FY2025 Budget Proposal January 22, 2024 Sept. 5, 2023: Jan. 22, 2024: .tan. 24, 2024: Council Work Session on Capital Improvement Plan Budget Priorities Operating Budget Review 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 5tn Set hearing for property tax deadline) levy April 2, 2024: Property tax levy hearing, setting of hearings for April 16, 2024: April 20, 2024 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 MEN" - 990 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 WWW.ICGOV.ORG/BUDGET Non-Budgetary Budgetary} FundsFunds Special Debt Service Enterprise Capital Internal General Fund Revenue Fund Funds Projects Fund Service Funds IowaFunds City General 7t7" CDBG 2;pp Ce6t Service Parkin 71D` 11) Capital Proects E ui ment 1310' { } } (80"} 9 p 1 i p k ) Fund HOME Grant(21 1(1) Transt(715') Risk Management (82(10} Road Use Tax Information Structure (22DU) Wastewater[72U'} Technakrgy Services 13 3fl'? OtherShared Wafer lfl'} Central Services Revenues(231313) (84Ufl) Metm Planning DrganLz ti n of Refuse Collodion Health Insurance Johnsan County (7401)} (86410) (235D Employee Benefrls Dental Insurace (240D) Landfill(7ra0`: n(dt3U0) E mergency Levy Airport(7600) (245D) Affordable Housing Starmwater[T7(10} Agency Funds (250D) IawaCityProperty Housing Aulhantyr Management(2510) (79") Project Green(9102} Tax Increment Financing(213") Self Supporting M unicipal (1}The Farl ng Fund dM r A qualrry an a ralor run.]r II•e Anr�al Report,but tt is teing presented as me Vr I mprovernent District maroge cal reasons. (282D) Major funds Fiscal Year 2024Budget 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 111" straight years of an overall tax rate reduction) • Inflationary utility rate adjustments (water 4%, wastewater 2%, curbside pickup $2/month, stormwater $.50/month) • Status quo department budgets with 11.5 FTE added • 5.90 funded from General Fund • 3.6o funded from enterprise funds • 2 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 21 S. Linn draws down excess reserve levels Financial Headwinds in Fiscal Year 2025 State commercial Four consecutive and industrial Significant drop in years of depressed backfill payment residential rollback taxable property phasing out value gro wth 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 EMEN IM � . LEM, $i,600,000 2013 tax reform reduced commercial and industrial taxability from 100% to 90% $1,400,000 The State "backfilled" this loss and the $1,200,000 City had been receiving approximately $1 .5 million in backfill payments annually $1'°°°'°°° (equivalent to about 1 t h t tiretighters) $soo,000 IMENE State Legislation passed during the 2021 $600,000 Session ended backfill payments �. $400,000 Iowa City's backfill payments are phased out over 5 years, began in FY23 $200,000 FY25 receipts are projected to be $o approximately $617,000, with FY26 ,� ,� o ti �ti � , e� til �o \ projected at $308,000 before being fully �y �y �� y �� eliminated in FY27 *NEW* State of Iowa Business Properiy I ax 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 Rolihn 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 byAssessmentYear 90% 81% 78% a0°r° 68% 70% ''� 56% 60% 55% 53%- 56% 54% 64% 48% 50°% -- - 44% 54% 40% 46% 30% 20% 10% 0% 00 0) O H N M �t Ln l0 r� 00 0) O H N M It Ln I.p r� 00 0) O H N M � Ln l0 r� 00 0) O H N M � Ln l0 I, 00 0) O H N M r� r� 00 00 00 00 00 00 00 00 00 00 0) 0) 0) 0) 0) 0) 0) 0) 0) 0) O O O O O O O O O O H H H H H H H H H H N N N N M M M M M M M M M M M M M M M M M M M M M M O O O O O O O O O O O O O O O O O O O O O O O O 2024: Multi - Residentia tiff 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% a� The taxability of multi-family property has - � dropped 53.66% over the last 11 years. FY18 56.94% 82.50% ri ri Cumulative loss in revenue to the City over FYI 55.62% _ 78.75% the 11 years is estimated to be more than $20 FY20 56.92% 75.00% o million Multi-residential properties previously FY21 55.07% 71 .25% accounted for approximately 8% of Iowa City's total assessed valuation FY22 56.41 % 67.50% Now approximately 81 % of the City's total FY23 54.13% 63.75% assessed valuation is subject to the annual FY24 54.65% 54.65% volatility of the residential rollback rate - - FY25 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: average: $125.1 M 150,000,000 $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 $5,000,000,000 10.00% 4,000,000,000 — 8.00% 3,000,000,000 6.00% 4.00% $2,0D0,000,000 ~ $1,000,000,000 2,00 Q.00°0 0 -2.00% FY16 FY17 FY18 FY29 FY20 FY21 FY22 FY23 FY24 FY25 Taxable Value $3,182, $3,421, $3,542, $3,745, $3,923, $4,258, $4,396 $4,375 $4,360 $4,517 Val % Charge 1.46% 7.50% 3.55% 5.72 0 4.74 a 8.54% 3.241A -0.46 -0.36% 3.61% 2-yr. Val % growth: 8.96% 9.27% 13.28% 2.78% 3.2570 Property in Iowa is reassessed in odd numbered years State of Iowa PropertyTax Reform 2013-202i 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 s675,000 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 s1.96 million in revenue to Iowa City • Fully eliminated by FY2029 but could be sooner based on annual taxable valuation growth • FY25 grnroxiately 17 cents from total 47 cent combined library and emergency levies will be lost (36% rst year of phase out) Unless a reduction in service is desired, this loss must be absorbed in the General Fund Volatile Variable Costs 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 1 1 .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 $850,000 REVENUE FY25 All Funds Revenue Sources Al I F u n d s Revenue ,you rces (FY 20 5) M i5c. 4 -Oth-er Financial Sources Int-Ergov-Ern Pral:Hy-ty Taxes 31" AA Use of Mo ne* & Prop, Licenses & Permits, 1 Oth a r City Taxes, 4 FY25 Revenue Sources - General Fund Only FY2025 Revenues & other Financing Sources excludes transfers Other Financing Miscellaneous Soy rces Charges for Fees & _ 12 1% Services 2 1 ntergovern menta Use of Money & 7 o- Pro perkg Licenses & Permits 2 4% Prope"Taxes 67 Other pity Taxes 5 FY2024 FY2025 Tax Rate Tax Rate Dollars per$'1,000 Ah Dollars per S1,000 General Fund Tax Levies: General $33.366.983 8_100 $35,792,773 8.402 IOU I Transit $3,972,054 0_950 $4, 160, 117 0.950 Tort Liability .51,214,361 0.200 $9,578,,392 0.360 Proposed ELibra7 S1,128,899 0.270 0.000 7 Levvbtotal: 4'1,018,519 9.810 42,531,282 9.712 y Leery $4,543 3.003 $3.561 3.003 Rate Genera;Fund Property Taxes $41,023,062 42,6.35,143 Special Revenue Levies: t rrr{aio ae Benefits $43.982.2b0 3 .34= $14,644,268 3.344 Subtotal: $�13,962.255 3.344 $14,644,268 3.344 Overview Debt Service $40,695.221 2.479 $1 1,636,020 2.577 Total City Levy Property Takes: $65,700,530 15.633 $68,815,431 15.633 Ya Change from prior yea -0,37 a -2.16% 4.74% 0.00% S.SM1D Leery - Downtown 5505,532 2.500 S544.91.9 2.500 S.SM1D Leery - Sou€h District .5106,673 5.000 c?1 .745 5.000 Total Prop arty Taxes $66,312,743 ---- a 69{477{S25 ---- PropertyTax Rate Tr Property Tax Rate vs. Valuations $5,000 16.8 $4,500 16.6 $4,000 16.4 o $3,500 16.2 $3,000 16 $2,500 15.8 7 $2,000 v @ 15.6 @ $1,500 $1,000 15.4 $500 15.2 $0 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25* 15 Tax Value (millions) $3,183 $3,421 $3,543 $3,74S $3,923 $4,258 $4,396 $4,376 $4,360 $4,517 Val%Change 1.46316 7.5Mo 3.55% 5.72% 4.74% 8,54% 3.24% -0.46% -0.36% 3,61% t 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% 0.0Mo 0.00•/0 FY 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 a special levy of$0.0031/$1,000 of taxable value *Includes Johnson 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 FYi5 FY16 FY17 FY18 FYig FY20 FY21 FY22 FY23 =ICCSD Johnson County* Kirkwood State of Iowa City of Iowa City -0-lowa City Percentage of Total *Includes Johnson County, City Assessor, and Agriculture Extension Levies Property Tax Levy Comparison City FY2023 Tax Rate FY2013 Tax Rate % Change 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 % • • City* . ' : ' . 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 Tax $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: UtilityFranchise $1,400,000 Iowa City Utility Franchise Tax is currently 176 rw7 $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 1916 this past December Cable TV Franchise Cable Franchise Fee Revenue $773,O18 $750,167 Revenue levels have $733,644 $685,659 been steadily declining as $662,448 $58i,904 alternate forms of media $586,428 $581,420 $582,920 increase in popularity $540,221 $540,200 Decline has seemed to bottom out in past few years Projected to remain stable around $580k annually 10 o ti ti a a oti oti oti oti oti oti o`�' o`y o�' �e �� 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 $0 FY2013 FY2014 FY2015 FY2oi6 FY2017 FY2oi8 FY2019 FY2020 FY2021 FY2022 —Revenues $6,589,111 $6,744,663 $7,23o,663 $8,320,117 $8,672,279 $8,426,502 $8,820,138 sg,163,303 $10,076,97 $9,900,316 Major Revenue Sources: Road Use Tax $12,000 +15.07% 16% A14% $10,000 +9.45% 12% N $8,000 7.21 9.97% 10% 0 s 8% +5.13 4.67% $6,000 6% + 7% +2. % 3.89 4.50% 0 $4,000 +4. 3% Id2% $2,000 _ 0% - .83 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. MEN " a■■■■■■■■■■■.■■■■■■■■■■■ ■■■■■■ ■■■EMM■■■■■MM■■■■■■■■■■E■ ■■■■■ " Ciiiiiiiiiiiiiiiiii■�iiiiiiw�iifiiiiii ■■■■■■ ■■■■ . - . • • ■■■■■■■■■■■■■ ■■■■■■■►I■L'1■■■■■■■■ MEMO • • - - • . ■■■■M■■■■MEM■ ■■MM■NEEMEM■■■ME■■ MEMO I..■■. ■E■■■■�C■■■■H■.■.E..■■■■■..■■■■ ■EOM■O�■■OE■■E■■wfrJ■■■■■■■■■M■■■■■■■O■ • - . • - • - - - . - . ��■ ..��..............��...........� mmmmmmmmmmmmmmmmmm=m=Mm=MMMMmmmmmmEMMM . . - . The c urren t Nee d for pa vefnen t repairs, th e total co Is t to Road Use Tax vs . address every single roadway distress in the City, bringing the network to "Very Good" condition, is approxirnately $189 lk Oliva_ That Need is projected to Need + Material Costs gro w to $4 72 Million by 2035_ 535DM • Per 2023. Pavement Management Plan: 53DDM • Additional $11 million needed each year to keep 525DM current conditions steady S2DDM • Delaying projects can increase rehab costs by 25% or more 515DM • Iowa City's Road network value is s610 million. SUM • 36.1% of the City's road network rated Fair, Poor, s5DM o r Ve ry Poor. $DM ° T° 9° RUT Revenues have only increased $3.3 Cunt Need ( 01 ) _ $189 Million million over past decade Projected Need by 2035 = 472 Million • + 54% ($922k) increase in Concrete costs for Figure 49: Projected"Needd° U;hs II ays exm&V hffPdkjg requked b bring every pavement W to-Very Goo,- FY24 over FY22. c+ Mr&v;Le_Weed'as weN as itapropL-dedGmwth ever the next 15 Years. Local Option Sales Tax ( LOST) se - - . . Eff50 % 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 $1 1 ,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 *AII 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. 1 Projected Pavement Condition Effects of Implementing LOST ityP I Projection (LOST) LOST would generate an estimated $8 - $3.2 1N a million per year and grow organically over time. an.a IN 713.0 0L 5a n.a 41) 313.0 ° 3a 21) 21}.0 � 1a 0.0 -$2.5 Mill ion (Base) -1i4.25 Million (a.5% LOST) �$2.5 Nillion(Base) �TK25 Million (1}.6%LOST) �$13.25 M illian (0_596 LOST+Base)�".5 Mi Ilion f 19ru LOST) �$15.25 Million(0.5%LOST+Base) ".5 Million(I%LOST) —19b LGGTwFGrowth Max Budget(Base+I%LOST) —1% LOST W Growth —Max Budget (Base+ IDALOST) EXPENDITURES All Funds Expenditures by Fund Type Total Budgetary Expenditures = $241 ,809,952 Fiscal Year 2025 Expenditure Comparison by Fund Type excludes transfers 0,900,009 20 rODO,000 _ general Enterprise Special Revenue Debt Service Capital Projects ■ FY O 5 $71 ,132,899 64r551, 42 16r219r777 13r787r749 S76rl18r 94 General Fund Expenditures ( FY24 Comparison with Iowa communities Graph G - Iowa CKy_ Iowa • In Iowa City, 39% of General Fund Expenditure is 7 dedicated to Public Safety and 23% is Culture and X% Recreation • On average, cities in Iowa spend 44% of General Fund : 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 3.6% 1596 inaz Total Transfers Out 0 General Government • Iowa City provides exceptionally high public safety 0 Public Safety ■ Total Debt Service services with lean budgets while also investing a ■ Public Works 0 Capital Projects considerably higher percentage of General Fund Health&Social Services ■ Culture& Recreat1on 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 lwl*** Services 18° Contingency Personnel ° 75° Supplies 3° Capital Outlay General Fund Expenditures 4m 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. 1 1 % Capital Outlay $ 1 ,555, 1 14 $ 1 ,600,725 + 2.93% Total Expenditures* $ 68..070..780 $ 71 ,132,899 +4.5 C77MI *Excludes Transfers Out Public Safety Pension r'ontributions City of Iowa City MFPRSI Contributions 3,500,000 3,000,000 -Ut 2,500,000 2,000,000 1H 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 1,158,015 1,178,514 1,223,644 1,198,866 1,263,192 1,321,941 1,250,248 1,291,66o ■ Police 11251,111 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 1,668,616 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 IPERS Pension Contributions ml City of Iowa City IPERS 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 FY16 FY17 FY18 FY19 FY20 FYz1 FY22 FY23* FY24** ■Amount 2,555,490 2,655,816 2,710,go6 2,914,700 2,98o,688 3,055,943 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 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�0 of direct debt the total City levy in outstanding of .75� any fiscal year of the city's total assessed value. Iowa City currently ui 5� The ro .ced 0 t0w50 0 de bt ow0 Geee avom oCyd Obgaon p e7 * Deb oeo5a obaaaua8oi s n osf Moody ' s A R tin A iti es as a Distribution of Moody's General obligation Ratings for All US Cities 600 500 H 400 Iowa City V 300 m .o E 200 Z 100 0 Aaa Aal Aa2 Aa3 Al A2 A3 Baal Baal Baa3 ■ Seriesl 239 303 567 460 295 135 65 20 25 13 % of Total 11.20% 14.20% 26.57% 21.56% 13.82% 6.33% 3.05% 0.94% 1.17% 0.61 Moody ' s A R tin I as a ow a Distribution of Moody's General Obligation Bond Ratings for Cities in Iowa 20 18 16 14 12 10 8 Iowa City z 6 4 2 O Aaa Aal 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% 18.31% 18.31% 25.35% 14.08% 9.86% 0.00% 0.00% 0.00% FUND AND FEE ANALYSIS 1 Enterprise Fund Balances Es tin ate d fLestridfe d Llhars s ign ed Unas s ig ned Fund Estimated Transfer In Budgeted Transfers Fund Committed. Fund Galan �a Balance as % Raven ues Expenditures out Balance of %v& Trans L As s igne d 613 025U3012 In c LL �a k -3 B�Bl53�d1F .5CC 3C0 5,124,974 3,24.4,aOQ 3,P18,8d2 49S.1?C2 3.423.1-3 33% A Tram 7,026�301] 4,3g7,2CC. 11,965,E 2,055,50a 4.439,524 2,7131,556 1,6-,363 13% A Wastewatier '3,.353,.5CO 5,M,OM 12-714,600 6,732-5Oa 21.195,210 .8,317,373 12,867,336 Ca% AA Vexc- 12-2513, 1,B72.2CO 1C.350.,95= P,W.20a 14.234.372 4,9W.UK a.2r30.322 M¢ AAA Rif.js 5,149 23C _ COC 4 1-31 �3C 2M CO 2.136.413 - 2,1E5,413 _2 S AA Landf11 7,964, 1.514.3CO C.C-g 5C 1,525,0O 22,800,702 20,001.054 2,739.708 29% AA Airpor. 44a,50D 10O,ODD 43G,55a 35O,OOa 42,505 - 42,505 9S A wr Swwa-er 1,010�d0D 1,101 GB1,90D 2,135,0O 1.716,909 ,961 1,(153,946 35% AA 11 A 1 d 0 1 4 0 0, 7,090,425 1,378,6d� 5,719,739 440A 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 202C7 Other User F^a 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 PropertyTax Impact FY2024 FY2025 $854 $724-$869 Assessed $100,000 $100,000 $120,000 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 $2,000 � $1,500 $1,000 $500 $O -$500 FY2019 FY2020 FY2021 FY2022 FY2-023 FY2024 FY2025 ■ Property Taxes $900 $901 $869 $8&4 $948 $854 $724 05tormwa#@r $54 $60 $60 $60 $60 $66 $66 0 Refu52 $229 $229 $240 $240 $276 $3-00 $312 ■ Sewer - SOOCu mCf @t $433 $433 $433 $433 $433 $442 $464 ■ Wai@ r-- 8.00 rub|Cf@@t $380 $399 $399 $419 $419 $436 $449 Total $1,996 g2,022 $2,001 $2,036 $2,036 $2,099 $2.O13 Percent Change 0.6% 1.3% -1.1% 1.8% D.0% 3.0% -3.9% Based On G residential customer with $100,000 property valuation. INVESTMENT IN STRATEGIC PLAN , MASTER PLANS & CORE SERVICES Program 2021 Est. Funded Expended American Range Emergent h1ee&: dults r�ayrnents[ Eligible Rescue Plan Act Ault 1 - $15M $1 184.071 19 $, 184:071.19 Ad Eviction Prevention $1 - $21`J $1,137,710.00 $123.791.06 Enerncy � �fcaton $500k - $1.5M $1;071,500.00 $1,071;500.00CARPA, Funds g Nn�Prt Assistance $i500k- $1 I'd $485,000.00 $329.667.60 Strategic Investments: In progress awards / programs: BIPOC Business Support $4 $6M , M(pending) $0 • Eviction prevention Framework Y Infrastructure Social Service Needs ,g2M(pending) • Non-profit operating Assessment, Capital Planning & $3-$6M $0 assistance Seed Funding Affordable Housing Initiative: 52_5- M • Non-profit capital capacity Mental Health Services $1.5-$r3M $939,062.0C $665,890_84 building Workforce Development $1_5-$3M S1,285,239 $344,16fi_d� • Underestimated business Climate Resiliencyand Hazard Ilk grants Assessment Planning500k-$3M • Affordable housing Small Business: Arts: CUItLlre. $1 -$2M $25000004 $lD6.80353 ' Mental health services and Tourism Investments Rev. Replacement: • Workforce development $676,146.49 W6,146A9 • Small business and tourism Government Services and Cit-, Dead Reduction: $0 Revenue Replacement $1 -$3M $500,000 $0 • Lead service line program Retention Incentive: $1,137,T T0.95 $ ,383.79 Ad min Costs:Actual STRATEGIC PLAN VALUES • • • Values Social Justice, Racial Equity & Human Rights • 2Continues $100,000 for Social Justice and Racial Equity Grant program (increased from $75k in FY • Approximately 5600,000 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 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 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 CITY CLIMATE *1 ACTION MATTERS �� 10 Strategic Plan Values A Partnerships Engagement Public Safety Expanded Human All-ages Library, Party in the Park Recreation, and and Rec & Roll National Night Rights Senior Center Out Programming programming Climate Inclusive City Sponsored Ambassador and Neighborhood Public Art & Resilience Corps Association Placemaking Festivals and Programs Engagement Events Non-profit Crisis New Winter Community Violence ARPA SSMID Response Shelter Intervention Partnerships and Program ICDD Cleaning Services partnership collaboration collaboration STRATEGIC PLAN I M PACT AREAS Impact area: • - • • Neighborhoods & Housing Fiscal Tear 201,o) BudgeT rlighlighrs: • Affordable Housing Fund contribution increased by 3% to $1,030,000 in alignment with th 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 HousingFund - City investedThe FY2024million ' initiativesapproximately $10.7 million in affordable in General Fund support for Affordable housing - fift h 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�o 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 - Affordable Strategic Plan Housing Revenue Streams • - fee-in-lieu option • Tax increment Financing fee-in-lieu - . . . Annexation• 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: Strategic Mobility FF Fiscal 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 b~ • 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 2024 2025 Bike Boulevards: Bike Boulevards: • Arlington • Keokuk • Friendship • Broadway • Oakcrest • E. Washington • Westminster • Highland • Church aicycle lanes. Sunset(Benton t 4t° ° HwY � 3 Lqn 2024 e COnv ' `► 'S Sons Outh Gilbert St, Ste with bike Stevens t lanes. ,! ` Trgils; ° McCgllister :tom o b Multi Tr . jrJ Br 4CJWgy, z,,5 ail (Fgirnl t egd0ws to f 0 Investments in Roads ' - ' RUT funds annual pavement rehabilitation (resurfacing) ture Road _ Tax Concerns:q9 Equipment replacement funds have helped the Streets Stagnate revenue _ _ dO Division improve efficiency and effectiveness of in- house pavement management effortsannual investment needed to keep Necessarily increasing our reliance on General pavement stable Obligation bonds for other large road projects in the CIP Annual Pavement Rehabilitation Capital Expenditures Budget $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $11000,000 $500,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 m7aJor Road Improvements rj�tr-,_ 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 R. . . Use Concerns: 2026: Dodge Street Reconstruction ($19.5 million) 0 Revenue not pacing with inflation 2027: Taft Avenue Reconstruction ($12.2 million) million • of annual neededinvestment to keep pavement 2028: Market & Jefferson Two-Way Conversion ($5 million) conditions s • • - Burlington Street Bridge Replacement ($30 million) Impact area: • - • • Economy Jscal 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 fundingfor Greater Iowa City, Inc. and arts and culture partners- City Y. p - City of Literature, Englert, FilmScene, Riverside Theatre, Summer of the Arts (organizations continue to request increases in annual support) .� Impact area: • - • • Safety & Well - Being .r. Fiscal Year 2025 Budget highlights: r • 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) 4A,4 • Continued investment in Fire Department contingency to increase future budget capacity for staffing a new Station 5 t 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 Pla n Implementation • - • • CITY OF K)W"C'TY Underway and Upcoming in 2024-2025 • Mercer Ballfield Improvements • Mercer and City Park Tennis, & Pickleball Improvements • Terrell Mill Skate Park Renovation and Bike Pump Track • Terrell Mill Single Track Course � f j F I • College Hill Park Playground Replacement x • Shannon Drive Park Buildout • Carson Lake and Recreation Planning • City Park Pool Replacement Multiple Trail Renovations (Bridges and Overlays) • Calder Park to Monument Hills Subdivision Trail Connection .Wupi&d ikVeM&tF L9,2D17 • Highway 6 Trail Infill Design R.M.. 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 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 one-time budget increase to fund all requests from FY 2019 $250,000 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 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 • 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 Resources: People igiqFiscal Year 2024 Accomplishments • ARPA funded retention bonuses for AFSCME and Administrative, Confidential and Executive staff • Completion of phase 1 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: F inancial • 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% but needs careful monitoring Looking Ahead : Next Year' s Budget ( FY 2026) M1 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 � I -5L -4 IIP 7jp 7mb ib Ink CITY OF IOWA CITY UNESCO CITY OF LITERATURE WWW . ICGOV . ORG/ BUDGET STAFF PRESENTATION CONCLUDED