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HomeMy WebLinkAbout2024-09-03 TranscriptionPage 1 Council Present: Alter, Bergus, Dunn, Harmsen, Moe, Salih, Teague Staff Present: Fruin, Dulek, Goers, Grace, Knoche, Havel, Ralston, Nagle Gamm, Rummel Others Present: Monsivais, USG, Martinez, Alternate 1. Clarification of Agenda Items Teague: All right. It is 4:00 P.M and I'm going to call the City of Iowa City work session in order for September 3rd, 2024. Welcome, everyone. We're going to start with item Number 1, Clarification of Agenda Items. There are none. This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 2 2. Information packet Discussion [August 22, August 291 Teague: We're going to move on to item Number 2. Information packet discussion, August 22nd, August 29th. Alter: I wanted to, um, sorry, pull out, um, and just comment a little bit or possibly ask for additional questions of Councilor Moe and his memo about the pop up rail. Moe: Sure. Alter: Thank you for writing it. Harmsen: Yes. Thank you. Alter: Sorry. We have an echo, that's why I'm pausing. Harmsen: Yeah. Technical difficulty for a second there, but our City Clerks all over it. Alter: So I just wondered if there- and mayor, please tell me if this is appropriate or not appropriate since but work session. I was just curious about your overall impressions. Um, what you laid out in the memo was really good as far as, you know, what are the knowns? What are some of the unknowns? Um, and surfacing those. I would love to know from you some and perhaps Councilor Bergus as well, because that she's been spearheading this about some of the things that maybe we need to be aware of as we move forward, things that we should have on our radar, if- if that's- if there are any things. Moe: Yeah, thanks for asking. It was, uh, really exciting to see this new train technology that's running off batteries and they're beautiful trains, and they are very quiet, and that we even had a chance to drive them, so it's sort of a fun field trip. But they are a new company and so I think that's just something that as the people arranging this, lots of due diligence is necessary to make sure that this company, you know, can deliver on this proposal. Um, what we saw on site on the test rail was the trains that we would potentially get. So we know that they exist, and they're operational, and I understand that there's two sets in existence. We also saw the demountable platforms that would be used, they're accessible. The last proposal that we reviewed as far as where the stops or platforms would be, um, they do engage with pretty key points with the University of Iowa, and the University of Iowa Hospitals and clinics. Specifically, the stops would be right at the art museum downtown near the College of Public Health, which would serve the hospital campus, um, and then the new hospital campus. And so I think encouraging engagement of the university because their, you know, it serves pretty important pieces of their key infrastructure. So and getting their employees and staff on board, unintended would be really important for this to be successful. Um, I think I mentioned in the memo also that maybe we have this piece of information then we need to sit on it and so we get the bus rapid transit study fully delivered as well as we can, you know, on- on pull out the old transit study to and have three really different possibilities to examine all at once. So, any other things that- I mean, you read between the lines or we curious about? Alter: Um, actually, I'm interested since this would be, I mean, this has to be a joint effort, um, you know, without much detail, but just what seem to be the impressions from the other representatives, the - the other municipalities? This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 3 Moe: Yes, so we had the City Manager from Coralville, City Manager from North Liberty, as well as a Councilor from North Liberty joined us on this trip. Um, I know in Coralville, much of the rail line goes through residential neighborhoods, and they're already talking to their constituents about what that might mean. For a rail line that's pretty dormant right now would get increased use and so I think the fact that these trains are quite a bit quieter than the big diesel engines people are used to is helpful, but that's, I think a primary concern for them. We did not talk about who's actually investing or spending money on it. I think that's where, you know, the proof is in the pudding, if they actually want to put money on it. A lot of the infrastructure improvements would be outside of Iowa City, too. So the infrastructure improvements need for safety crossings. So it's absolutely going to require multi jurisdictional coordination. I should also say that EC Cog, Johnson County and the airport was also included in this. Now, the airport would not be included in the preliminary route. Um, the first, sort of, proposed route is just from downtown, Iowa City, Burlington Street, to the, I guess, the we call it the North Liberty or Coralville new Hy-Vee right there by the new hospital. A future possible stop could go up to the airport, and the airport is very excited about that, but they really can't get engaged until that, sort of, next effort is- is possible. But the people who are there were very excited about it as a possibility. Harmsen: And Cedar Rapids Airport just for those? Moe: Yes. Cedar Rapid Eastern Iowa Airport. Thank you. Alter: And you mentioned that we need to continue to engage with the University. They are not- they did not participate in any of these. Moe: No- no. They were not present at this- this field trip. So yes. Anybody who's listening from the University? Alter: I'm just going to say, do we know as things, sorry, greater Iowa City engaged with the University Iowa? Bergus: Yeah. No, definitely, we've had at the earlier stakeholder meetings, we had the general Council of UIHC. Joe Claman was there. I know Laura McLaren from the president's office came to another stakeholder meeting. So they're certainly paying attention and keeping track of it. I think- I think Better Together is also, kind of, directly started talking about the budget with UIHC in particular. So I think they're pretty aggressively saying you need to buy into this. Alter: Thank you. I was- I know that greater Iowa City is involved to a certain extent. But yeah, it's being driven by greater Iowa City. Better Together. Bergus: Which really they're intertwined. Moe: Yeah. Bergus: Thank you so much for going Councilor Moe for your memo and for updating us, and thanks for asking about it. Councilor Alter, I think the other thing I would just highlight having been, you know, sort of trying to talk about this for a few years is that a thing that is very appealing about the pop up Metro opportunity is that it is intended to be like a rolling feasibility study, right? So it is intended to be a, sort of, program for a period of time for a set cost in which we can try to have enough, you know, seasons, like three years to really evaluate use should we wish to make some This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 4 different or additional investment. But I think that's, uh, you know, not looking at it as needing to pay 10's of millions of dollars to implement a train that's going to take 10 years to get off the ground. I think is the most appealing thing about this opportunity. Alter: A living pilot. Yeah. Bergus: Yeah. Moe: I think it's understood that for us to operate this, we absolutely have to coordinate. We would need to create an organization and that's something that, uh, I think when we have all three of these proposals in front of us is probably the time to, sort of, say, what is the shape of this multi - government body group look like. But it's- it's inescapable for something like this, that we have to do that. Alter: Actually, last question is, since I know that Crandic owns it, are they amenable? They're open to this conversation? They're really. Moe: Yeah. That's all hearsay for me, but I've been told multiple times that they are very excited to have usage of this portion of the rail. Bergus: I know that the budget that was somewhat delayed. We were waiting on the budget for a while was because of exactly what Crandic needed both on what it would cost for some of the improvements for the at grade crossings, as well as for, like, leasing the tracks, essentially. So that has all been hammered out and what we should receive for the budget. Alter: Thank you both. Moe: Thank you, right. Harmsen: Cool. This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 5 3. University of Iowa Student Government (USG) Updates Teague: And we'll wait on the budget item, this network session packet. Anything else from August 29th? Hearing nothing. We're going to move on to item Number 3, University of Iowa updates, (USG). Welcome. Monsivais: Hi everyone. Just a couple of short updates tonight. Our first student Senate session begins tonight with new senators from fall nominations joining us next week. We're excited to welcome new members of our undergraduate body to USG. The Senate is voting on legislation that establishes an ad hoc committee that addresses changes coming to the structure of student organizations. The committee will not include leaders from other student organizations and is restricted to USG senators and a few executives. The restructuring focuses around establishing new guidelines for how student organizations receive funding and their eligibility for a new system of categories. The Governmental Relations Committee will elect a chair, and we are excited to see who will lead with us and GR Director Amin. Other than that, there are no new updates at this time. Happy ISU Hate Week. Yeah and Eva, if you would like to introduce yourself again. Martinez: Yeah, and for those of you who weren't here last week, my name is Eva Martinez. I'm a second year at the University of Iowa, and I really look forward to working with you all. Alter: Thank you. Monsivais: Thanks, guys. This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 6 4. Preliminary FY2026 budget discussion Teague: All right. Thank you all. We're on to item Number 4. Preliminary fiscal 2026 Budget Discussions, and we're going to invite our city manager Geoff Fruin to lead us in this discussion. Fruin: All right. Thank you, Mayor and Council. I thought to help us with this discussion this year, we revisit some of the January work session slides that we presented. So thankfully for you, I've truncated these a little bit. We're not going to go through 73 slides, but I thought a little bit of primer focusing really on the topics that, uh, were in the memo would be most important. So again, all these slides that I'll show you tonight are the exact same slides unaltered that you saw in the January 22nd presentation. And what we talked a lot about during that presentation where some of the financial headwinds that we're facing, as I've noted in the memo, those headwinds are still with us today, and for some, maybe even more pressing than they were a year ago at this time. So I'm going to take a minute and just walk you through. I'm not going to go through all the details on the slide. We can circle back to them if needed. But just to remind you, we're still in the phase out of the commercial and industrial backfill. At its peak, the state was paying us $1.5 million to back fill loss of property tax from 2013 legislation. This year that we're in right now, fiscal year 25, we expect to get a little bit over 600,000 of that backfill. For next year's budget, which we're talking about tonight, the fiscal year 26 budget will be down to just over 300, and then by fiscal year 27, we're out. That may not seem like a big number in the grand scheme of our budget, but in every 100,000 is roughly equivalent to one staff member. So every year, that's just one more thing that we have to overcome. We talk about rollback trends a lot. Again, a rollback refers to the percentage of your assessed value that is taxable, okay? So if you're a commercial and- a commercial property owner, you pay taxes on 90% of what your property is worth. So if you have a million dollar commercial property, our tax rate is only going to be factored into 900,000 of that and that's static. The residential rollback, which now impacts both single family and multi -family residential fluctuates every year. The state sets a rate. That is statewide. It's not unique to any metropolitan area, city, county, anything like that and that's what this graph on the - on the screen indicates. So you can see there was a sharp decline in the year that we're in, that 54%, all the way down to 46%. Again, if you on, I'll just use round numbers, if you own $100,000 home, what that means is you're paying taxes on $46,000 of that home, okay? So the lower that goes, the better it is for the homeowner, right? They're going to pay fewer taxes and the formula the state uses in- in some ways offsets valuation growth. So we saw great valuation growth or across a lot of Iowa, there was great valuation growth. This was a way- this is a tool the state uses to help kind of temper the impact. But it- it does, uh, lead to some difficult budgeting times for us. So, as you can see in the green text above, every percent drop at the same -we keep the same tax rate is about $1.1 million in lost revenue that we had otherwise would have received. So this drop was very significant for us and unfortunately, we won't know what this percentage is until about November is when the state typically release- releases that late October, early November. You can see historically it doesn't move a whole lot year to year. The 8% last year was- was not very common. So I would expect that we'll stay somewhere close to that 46%. But as that goes down or up, it'll certainly impact our budget. We talked about the multi -family piece. So this shows at the top right of your screen there, that back in fiscal year 14, if you owned a multi -family building, an apartment complex, you paid as a commercial property, you paid 100% of that- of the value as your- as your taxable value and we're all the way down to where there is no distinction between the two now going forward. That's, kind of, what that blue box shows is that's, how the state merged it into one. So that was a big blow for Iowa City or any city that has a large stock of multi -family buildings. And now what it means for us, if you just focus in on this last bullet point, that 81 % of our total assessed valuation is now subject to this rollback that the This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 7 state sets every year. So, there could be, uh, very tough times if there's a large swing, particularly downward, um, in that- in that rollback. So one of the- one of the things we always look at are building permits, and we do that because it's a good leading indicator. We see a lot of building construction activity today. We know there's going to be a lot of added value to the tax base in two to three years when that comes on the tax rules. And you can see through the -the mid kind of 2010s, we had a nice peak where we were consistently, you know, right over $150,000,000 in new building permits. Uh, certainly we saw a big decrease at the peak of COVID, and we've been slowly climbing out of that. Last year was a very good year at 275 million, but there was really two projects that- that made that number happen. That was not a kind of a uniform growth across the city. We are now, uh, we have eight months behind us, and we are tracking, uh, this year to probably be maybe 125 million. It's hard to say what the last four months will produce, but, uh, probably around the same average that we had kind of during the peak COVID years. And that's - that's a little bit concerning, um, as we look out two to three years. It's actually, um, kind of mirrors- mirrors a trend that we've talked about. If you remember one slide from tonight, this is probably it. So there's a lot going on here, um, but what I'd encourage you to look at are the red bars. Okay. The red bars that's our taxable value. That's not all new value that comes into the city, right? There's a taxable component of that. So how much of that tax base, um, is actually taxable. And you can see that it's been pretty dam flat the last few years. And the valuation changes this green line. Those are the percentages on the bottom. And you can see, just looking back last year was 3.61 %. That was a pretty good year for us in recent history. But as you -as you go back to the earlier slides here, you can see we consistently performed above that 3.61. The past two years were actually negative. Um, so in the memo, I think I averaged the last three years out, and I said, we're going about I % a year in taxable value. And that appears probably where we'll be at next year, um, just based on, uh, it not being a reassessment year for property tax purposes, we're probably going to be looking at about a 1% number. Again, we're looking backwards a couple of years ago, we're really looking at this 2020-21 construction year coming online, and that's why we think it'll be pretty low because there's just not much new growth that will be added on there. So I'm going to skip through the, um, property tax reform slide, but just to remember that the 2013 legislation wasn't it. We are now in the midst of the 2023 legislation, and we still have a couple more years to phase in those lost library and lost emergency levie's that are no longer with us. Um, this fiscal year 25, um, we phased out about 36% of those levie's, and we have a couple more years to phase out the remaining, um, parts of those levie. So all in all, it's a loss of $2,000,000 once those levie are completely gone, and again, we get about two more years to fully phase those out. On top of that, you're we always have this slide in there. There's always some cost that spikes on us, whether it's chemical costs, whether it's fuel costs. This past couple of years, it's really been our insurance cost, and this is, uh, not something unique to Iowa City. It's not just because of one event. I think it's just the environment that we're in nationwide, where insurance costs are going up considerably. Um, and over the last two years, we've added about $850,000 in expenses, just related to growth in our insurance lines. So those are things that just have to be accommodated for. So as we get the squeeze on the revenue side, we always talk about the pressure on the expense side. So I focused a lot on property taxes because that's where the pressure point is. Um, this slide shows you what our general fund revenue sources look like. So 67% or roughly two thirds of our revenue are property taxes. And you can see from all these other slices, uh, even the larger slice is just miscellaneous. It's just a bunch of little slices combined there. There's not one of these categories that can jump up and make up large ground, um, compared to property taxes. So as we see property taxes becoming stagnant, that's going to tell you that our whole revenue picture is probably going to be fairly stagnant as well. One of these, uh, the red piece of the pie here, other city taxes includes hotel motel and our utility tax, and I wanted to talk about utility franchise tax. Because that came up in our last work session. It's This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 8 something we talked about during the January budget session, too. We're currently at 1 %. State law allows cities to go up to 5%, and you can see where some of the pier cities are in the state of Iowa and locally here. Um, it is that can be increased by, uh, council action, unlike a loss which has to go to voters. You all have the ability to increase that. And every percent you increase that, um, the revenue we count on about $1,000,000. You can see that fluctuates. It's a little dependence on weather and how many what utility consumption looks like across the city. But about $1,000,000 per year. And we're forecasting that we'll be recommending to you moving this up to 2% to fund the remaining, uh, piece of the Fare Free puzzle, um, that the parking rate increases are not going to be covering. So again, parking rate increase, um, that was in this fiscal year is expected to generate about 1.5 million for Fare Free, and this is the other million that staff would be, uh, recommending to you. So you'd see Iowa City move to a 2% here. Salih: You mean like one more -more percent will generate 1 million? Fruin: Correct. Yes. Um, so we talked a little bit about, you know, why property tax matters on the revenue side. On the expense side, um, just a reminder that we're a very labor driven organization. Most of the services that we provide are very labor intensive. So on the expense side of things, three fourths of every dollar goes to personnel. And those two things are tough because we know personnel expenditures are going to increase usually 3-5% per year, depending on wage settlements, depending on insurance cost, pension increases that we may not control. So when you've got your largest revenue source at 2/3 of your revenue mix stagnant and your personnel cost going up at 3-5% per year, um, it's only a matter of time before that catches up with you from a budget standpoint. When you put actual numbers on the expenditure side, you can kind of see what I'm talking about here. This compares fiscal year 24, which was last fiscal year to fiscal year 25. You can see personnel expenses went up about 4.5%. And the total budget for expenditures went up 4.5%. These were all kind of awash. And if you think about- if you're faced in a budget situation where you have to make cuts, and you really don't want or you can't afford to cut staff because of the service delivery implications. You're really working with very small dollars to find whatever budget gap needs to be filled. So that's one of the challenges that we foresee ahead with this next year. I think we're going to have very flat property tax revenue. And, um, we all know that the demands on services continue to grow, and those personnel expenses are going to continue to grow. I'm not touching on the other the enterprise funds very much. I'm happy to cover those, but just a reminder, there was a water rate increase, a wastewater rate increase, a recycling rate increase with this last budget. We try to do these incrementally not to have a huge impact on households. If we are going to pursue a utility tax, we want to be mindful of what we're asking for all these other expenses that will also hit household budgets. And we want to be mindful of property taxes, too, and not to lean too much on those at a time when those valuations are increasing for many of our property owners. So will of course, try to, uh, balance those out. The last slide, sorry, just had the landfill and the parking increases, uh, for those user fees, too. So that's just a little bit of refresher. Um, usually what we like to do in these work sessions is just kind of let you talk. Um, we'll always try to make sure that we canfund council priorities, um, but want to make sure you fully understand the budget environment that we're entering. And as I said in the, um, memo, um, I wish I could say, I really just seeing this for fiscal year 26. But when we consider the phase out of the levie, the loss of the backfill, and some of the building activity that we're seeing, uh, this year, we might have similar challenges in fiscal year 27 in fiscal year 28. So even more of a reason to be prudent this year so that we don't put ourselves in a very difficult position for those two forthcoming fiscal years. This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 9 Moe: Um, our work session list included a conversation on revenue broadly. Um, is that a second conversation that we're going to have, or do you anticipate this conversation including that? Because I think in the conversation about revenue, I had assumed that LOST would just be one of those pieces that we would throw on the table, and I didn't see any mention of it in this? Fruin: Yeah- Yeah. We can certainly and I can- I can show you a LOST slide here that I just had taken out. Um, LOST is- is a different kind of revenue source compared to the utility tax. One, uh, you've got to get voter approval and there takes time to build that case, whereas utility tax you can act as quickly as you wish to, um, on that. Let me unhide this slide and see if I can figure this out. Yeah, so there's an example of cities that use LOST. I won't go through there if you have questions. Uh, we can certainly do that, but LOST would take some time to build that public support, and, um, you really have to think about what you want to designate those LOST funds for. Um, well, you don't, um, most LOST will come with a sunset. I know a LOST of these don't have sunsets, but most LOST, um, across the state, would have a sunset and generally easier to get the voters to approve something when they know they can hold you accountable for that sunset. Um, so you've got to be careful not to fund too much of your operations when those dollars will go away, because the last thing we want to do is say, fund 10 to 15 staff members delivering a service. And then the voters five or ten years from now to say, we no longer want to pay that sales tax, and then they're going to have a big budget crisis or you're going to be faced with cutting a major service in the community. So that's the only thing you need to be careful of with the local option sales tax. Harmsen: I'm just trying to remember. I know there was a proposal in the state legislature that would make it a state law that a certain percentage of LOST would have to go to property tax. Did that end up passing? And if so, at what level? Fruin: It did. 50%. 50% has to go to property tax relief. And, um, that can be $1 for dollar offset, or if you forecast a property tax increase, you can also factor that in. That's what the City of Des Moines did. They made it clear to their voters if a LOST wasn't going to pass, that they were going to push other levies, like their debt service levies for more road repairs. And so it wasn't $1 for dollar offset, um, but it was LOST instead of property tax increase. Dunn: Can you remind us which of these communities you think would be most analogous to what we would see in terms of income? I vaguely remember, like, 9 million. Fruin: Yeah. On our own, probably Ames would be the closest. Um, and I say on your own, because if there's still a component of the state law to say if contiguous cities have a LOST, then there's a revenue sharing model. That revenue sharing model, um, leans heavily on population. So if Coralville and North Liberty, as contiguous cities also passed a LOST, Iowa City would see its revenue share grow quite a bit. Um, so probably closer to 17 to 20 million, uh, if all three cities had a local option sales tax. But just Iowa City about that Ames would be as close as I guess. Harmsen: Kind of piggybacking off of? Councilor Moe thing and talking about revenue. Um, you know, what other kinds of things? So we've talked about utility. I don't know if this is all for today, but I mean, just sort of in general, looking at the budget. In my mind, as we look at some of these things and the impacts of the Iowa GOP's property tax deform, um, that we have to, you know, I see this as a choice between do we keep our city up to the standard that Iowa City has been? Do we let it fall down or do we look for as many different ways? And I think at this point in my mind, everything should kind of be on the table, um, so that we can then figure out what mix This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 10 provides the most equitable way to maintain the operations and services and things that we provide, facilities, and so and so on. Fruin: Yeah. Um, so again, this is just looking at general fund, but the utility tax, um, we can't increase the hotel/motel tax rate anymore, but certainly, uh, adding additional hotels in the community long term could help bolster that number. Otherwise, you're really working in these smaller fees, so you could look at, you know, you're really nibbling around the edges here, but you could look at what we charge for programming, right? Parks and Rec programming, and we could try to recapture a higher percentage of those costs right now. Um, we have a philosophy where we try as much as we can to keep all that programming as accessible as possible, uh, by keeping prices either down or free. A lot of cities will charge more for some of those programs. Um, so all those user fees that we look at could be a part of this. Um, here's really not a whole lot else in terms of tools in the toolbox. Cities in Iowa are pretty limited from a revenue generating.standpoint on what they can look at what they can bring in. Other cities may have unique opportunities that we don't, right? Some cities may have casinos that can bring in lots of dollars. We don't have that.. Um, so you will see some other revenue mixes in other cities, but by and large, it's property taxes, local option sales tax, utility tax, and hotel/motel are the big ones. Dunn: Can you help us understand what property tax relief actually looks like. Is that something along the lines of, you know, when it's passed, we reduce a levie? Okay. Fruin: Yep. So let's say we get 10 million from LOST. If we do $1 for dollar reduction, then we could take $5,000,000 off the property tax rolls. If you will, we would essentially downward adjust some of our levies and pay- pay cash through the local option sales tax instead of, um, some of the like could be debt service. It could be operational costs that the levies are providing for? Dunn: Will that prohibit us from then raising it back to where it was before in future years, or is it related? So it's just at the implementation itself? Fruin: It's at the implementation. Dunn: Interesting. Okay. Moe: Is any one unique feature of Iowa City is we have the University of Iowa who does get fire service, for example, from the City of Iowa City? Is that big enough sliver to be represented as intergovernmental or miscellaneous or is it? Fruin: Yeah, I probably falls in intergovernmental. And it's probably about 1.7 to 2 million. Is that roughly in that ballpark. And so there's a formula that we rely on, um, to set that. It's a formula that's been in place for several decades, but it's essentially looks at the amount of square footage that the University has compared to the entire square footage of the, um, the building stock in Iowa City. And that ratio gets factored into our budget for the fire department, and they pay the corresponding amount. So I think the formula's pretty fair in the way it's calculated, but roughly provides a couple million dollar per year for us. Teague: So with LOST, we know that you typically try to find something that the voters would be amendable to -to go to vote, um, to have it enacted. We haven't had our strategic our um, Harmsen: Strategic plan. This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 11 Teague: Yeah, our strategic plan refresh and I think, you know, at least for what are some of the things that we believe that the voters will be moved by, I think we have to wait for that. Of course, I know that housing ah is, you know, something that we have all been talking about. We are- we need all types of housings, the million -dollar homes as well as the workforce house, and then truly affordable homes for individuals. So at least for the -the what would we even consider would . be that thing we would take to the voters. I think we need to wait at least for that I'm- I'm not opposed to continuing the conversation on LOST. One of the, I think, questions that I do have is related to um, I think the overall budget when it comes down to um, our programming, are we social services and CDBG where we with and I know that's Tracy's department. Are we seeing a decrease there? And will the city have to kind of sort of plan to supplement it? Because I know that we've not really seen large humps in the, Frun: Yeah, you want to come up, Tracy? Teague: On the funds going up. I don't think we had good news about a month or two ago. Hightshoe: No, we've seen stable funding, to some extent at CDBG home took a huge hit. I think we took a 19% hit. So it was down to 345,000. But your CDBG public service the money that we provide to AID Agency comes from your CDBG budget, not home. So I'm going to say level for now. There's no guarantee. Teague: Sure. Hightshoe: It changes every year. Teague: Although we do continue to see high needs from the community, and we're not able to meet them. So, so I just wanted to at least mention that the social services funding sources, although that's just one path of how we do some things. That is also stable and, you know, with this, what we see before us, I'm not sure how we're going to bolster that up to meet increasing needs. Moe: Um, building permit, I mean, we're talking about increasing the amount of taxable value within Iowa City. That's a long term thing we should probably strive towards. It's not an immediate fix. Can you- I think I've seen this chart before? Can you maybe just help us understand where in that blue bar is just sort of your everyday residential construction permits versus the sort of big projects, the big student housing projects, the Chauncy or whatever. I mean, 2016, is that. Fruin: Yeah. Moe: The Chauncy, like is that, is that a substantial portion of this? Fruin: Yeah, so-so yeah, you're right. 2016 was a record year, you had the Chauncy and the Rise kind of come online at the same time to drive that. If you look at 2023, about 41 % of that is attributed to two projects. So the Myrtle/Riverside Project and the Hickory Hill Senior Housing, I believe it's called Featherstone. Um, you take those two projects out, and it'll be roughly 60% of that 275 million. So you know, 2022, eh, looks like we got up to about 150 million there. You had the Gilbain project at just over 50 million. So almost a third of that 2022 number is one project. And This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 12 we've seen a lot of that over the last several years with eh the large-scale student housing. 2021 you know, even these lower numbers, that's the year the Tailwinds nest project came online, and that's that was a $34,000,000 building permit. So we have been very dependent on those large projects over the last several years. This year- last year, we finished 2022 with 54 new single family home permits, and we just hit 54 in August. So we're kind of sitting year to date right where we finished 2022. So we'll be a little bit ahead from a single family home standpoint. But if you, you know, just take an average building permit value of 500,000 400,000 for a new home, you can see it's, it's not going to get you very far up the spectrum there. Alter: One of the things that just popped into my head as Geoff was talking is given the way that Iowa City is essentially. I mean, we are at a place where to invite people to come in really is about density and building up because we don't have the vast amounts. I mean, we've just annexed way in the far west side, but we don't have tons of neighborhoods to just go here, right? So I think that that's just a good thing to keep in mind. I and hopefully, when we get people coming to us to talk about things, we need to think about, you know, the -the sorry, people coming to talk to us. Developers coming to -to pitch us and to say, you know, what seems to be a good fit for Iowa City. I think that in some ways, we need to keep that in mind about our situation is different than other cities in terms of what a good bang for our buck is, how does it fit into the city, but that it may not be sprawling and say, we're going to have an instant neighborhood or an instant retail large strip mall or otherwise, we are looking at density. We are looking at building up rather than perhaps out, right? Is that a fair assessment? I mean, I'm not saying completely, but just uh.Yeah, definitively. Fruin: Not all growth is good growth and shouldn't be growth at any cost. There is a cost to growth. And as you're describing a sprawling neighborhood on the edges, could up in the short or long term costing us more when you think of the service extensions that we have to bring to those neighborhoods. So yeah, you want to make sure that you're developing with that financial model in mind, and one way you do that is through density. You try to serve as many households as you can in a short uh, in a smaller geographic area and allow those numbers to work a little bit better than they have, maybe historically for a lot of cities. Dunn: Just kind of smattering of thoughts here, and I'm going to try to make them all make sense in some sort of coherent dialogue. The first thing that I kind of think of is just the immense frustration that I have that we are forced to engage in a type of redistribution of wealth from a regressive tax back to property owners, when the largest majority of, you know, regressive tax like a LOST if that's something that we are to consider. Do not necessarily impact those communities as much as they do others. So that's very frustrating. Um, understanding that and the broader situation that we're in, I think we need to very strongly consider it. Um, at this point, for me, I somewhat seems as though again, just speaking for myself, it's not if we do it, it's a when we do it um, and a how we do it. Um, just because the numbers that you're saying, we -we just can't. It doesn't make sense. We have to make it make sense. Um, so I'm very interested in figuring out how we can, you know, if counsel chooses to pursue it, make it a palatable discussion for the public. Um, try to reduce as much as possible the regressive nature of loss, which can be, you know, using those dollars for investments in social services or, you know, something to that effect, right? Whether that's, you know, making a contribution coming from, or coming to our affordable housing dollars come from LOST and off setting funds. I don't know how the accounting will work, but that's something that would make it better in my eyes. And of course, knowing that that can't be the only thing, we have a lot more needs than we -we have you know, tools to secure funds. Um, for me, I think this also really reinforces the importance of our deliberate selection for what happens This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 13 at 21 S. Linn. That tax revenue, whenever it hits, is going to be really important, um, and so I think maximizing that as much as possible. Again, I think everyone's on the same page, maximizing the tax revenue as well as we try to maximize and balance that tax revenue with community needs. So just really brings that up at least for me. And then, um, with regard to a comment that Councilor Alter made, you know, I've thought this periodically since we had the conversation, but, um, revisiting accessory dwelling units is something that keeps coming up and is not probably going to have a huge impact on taxable value, but can affect the affordability of the community and can, in small ways, you know, allow us to build in areas that we aren't already doing. So just expressing an openness to either reopening that discussion at some point or, you know, exploring other opportunities. Harmsen: Councilor Dunn, I agree, the frustration with this conversation is huge. And just to kind of - kind of the historical and broader context, we're in this, um, and you know, because Iowa Republicans have decided to give a huge windfall to landlords. My property taxes will go up. If I have to pay a loss tax, I'm going to be paying, and I'm going to be covering the profits. When you talk about rental properties in a city like Iowa City, dropping 53%, uh, over the course of 13 years. That's huge, but we still have to provide the services. We still have to fill the potholes. We still have to put out fires, literally and metaphorically. And so, yeah, so I -I very much share that frustration. And you know, that's why I think all things should be on the table, including you know, our property tax rate, um, you know, to the extent that we can look at that. And, I don't have, sitting here today know exactly which is the right one, but I think we have to look at that so that our mix is as equitable as we can make it in a bad situation and a budget crisis that was completely manufactured, by the party that controls both houses in Des Moines and the governor. And so it really frustrates me, and, you know, this really chaps me in -in multiple ways. I think that's important to no one to let the public know that we're not sitting up here doing this because we think that we shouldn't even have to be having this conversation. If they'd left things well enough alone, and income generating property was taxed at 100% or even 90% like commercial property, we would not be having this discussion right now. We'd be talking about how quickly can, you know, Well, we'd be having a permanent free bus, so we wouldn't happen to be looking at a 1 % utility tax, and yeah. No, I find myself extremely frustrated, and I think it's important for us to name the thing that is causing this. So, yeah. Dunn: I really appreciate that. And I just want to also put some numbers to that If I'm recalling correctly, Geoff, we've lost out on $20,000,000 plus in revenue because of, I believe it was the 2013 tax changes. Fruin: Yeah. I'd want to confirm that, but yeah, looking at this slide, just on the multi residential piece. Over 11 years, we had estimated that at $20,000,000. And that's actual revenue, that's not just taxable value. That's actual revenue, yeah. Harmsen: I should probably give a shout out to our state reps at that time, who fought against this, including Senator Joe Bolkcom, who were represented my district where I lived, and was a vocal opponent of this back in 2012, 2013, when it was being debated. And, you know, ultimately, he wasn't on the winning side of that vote. He and a few other Democratic senators that stood up against this, but probably should give credit where due. Salih: I guess would like to ask you about, um, you know, our tax levie increase or decrease? You know, for years, we've been really reducing the tax levie. And I see here you give us comparison for the This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 14 sale tax the utility tax and everything. Can we have also a comparison with other city when it comes to tax like levies? Fruin: Yeah. I appreciate you bringing that up because the answer is very nuanced. This is a very busy slide. But what it shows in the blue is what our tax rate was for each individual levie in fiscal year 24 versus fiscal year 25. And we point out a couple of things. You can see the library and the emergency levie. That is accounted for in the blue column, and you can see it going away in the red column, um, and then you can also see what we call the 810 levie or the general fund levie, um, went up to 8.4. When we say when we say the library and the emergency levie need to be fully phased in -in a couple of years, that means the state allowed us to add the value of those levies to the general fund, which is why we could go above 8.1, but then they make you bring it back down to 8.1 in a couple of years. So, um, if you were to add the total of these, you'd see it was $0.57, And you can see we didn't add $0.57 there. We only added about $0.40. So you'll continue to see the 8.4 go down to 8.1. And to answer your question, 8.1 is the cap. So for general fund purposes, we cannot increase this levie anymore. Same with transit. We cannot increase our transit levie anymore. The tort liability, we can only increase, and you can see we did increase that a little bit with this budget. We can only increase that with the amount of eligible expenses that fit that tort liability category. And then so these two levies are no longer, we can increase the employee benefits levie a little bit. We have some capacity there to raise that rate, but those dollars can only be used to fund employee benefits. And then the debt service, when you look back at how we decreased our tax rate from roughly 2012 to -to, 2021, 2022, um, 95 plus percent of it was the debt service piece of it. We really worked on bringing this rate down. You can see we ticked it back up this past year because we weren't we knew we couldn't pay with cash as much for some of those improvements. We're going to have to borrow more. You're probably going to see that continue to happen. As this 810 levie drops, you're probably going to see us continue to bump up the debt service levie, because we can't we won't be able to pay cash for some of those capital improvements as much as we had in the past. We're going to have to use that cash for operations and then borrow more, which is really kind of sad unintended impact of the property tax reform. So we don't have a lot of ability, um, to raise our rate. We can borrow more money if that's the will, um, and we could push a little bit more onto employee benefits, but um, outside of that, these levies are all caped. Alter: I was going to ask, what is the cap for the employee benefits? Mm-h. Fruin: It's completely, It's recalculated every year based on the amount of expenses that we have. Um, do you recall, kind of roughly how much capacity we have left from a rate standpoint? Okay. So roughly maybe about $2,000,000 left, so you can see now we're- we're moving off the rate, and we're talking about, um, basically this- this rate of 3.344 generates about 14 million. So we have maybe another two million um is our kind of on the spot estimate uh to- to drive that up a little bit. You could in- in theory, um so what we're saying is basically we're paying for some of the benefits out of the general levie. Salih: That- that's what I was wanna ask. Fruin: So you could bump up the employee levie, and then that would free up some dollars in the general fund levie. Salih: That's exactly what I wanna ask is like, now 14 a million is enough to pay the employee benefit or we are taking from the general fund to do so. This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 15 Fruin: Yes, we're- we're still taking from um the g- the general fund uh or enterprise funds. Yeah. Salih: And if we increase it to the maximum, we can free those. Fruin: You can. Yep. There's- there's other downsides, and we would give you some cautions for doing that. Um- um most notably, once you max out every levie, you really put your back against a wall to deal with unintended consequences or unanticipated situations, excuse me in the future. Um so this is a little bit of a relief valve for us going forward. Um and you'll also probably see Moody's not react well to that. Once your- once your property tax capacity is met, that's when they'll really start to- to focus on perhaps downgrading your um your- your rating. Um so they always note the capacity in that employee benefits as a positive for Iowa City? Salih: Is it a way you can give me a number of like how much the maximum we would generate and how much right now we is using from the general fund. And if we did not max out, also. Fruin: Yeah, we could- we'd have to calculate that because it's not gonna be uh uh evenly spread, but we could- we could let you know um, where that capacity would fall. We can provide that. Salih: Yeah. I really rather just like see this if we can generate some money I free some money from the general fund. Fruin: Yeah. Salih: That will be ideal. Harmsen: We've been talking a lot about the revenue side of things. I think part of this discussion, we're also supposed to kind of share with you our priorities on the spending side of things. Um and I- I could jump into that, but I don't wanna- I don't wanna cut anybody else off on revenue. Dunn: Good pivot. Salih: Be not. Harmsen: Just a couple of general thoughts. I mean, I think obviously um you know, the uh Fare Free bus service is on my list. Things related to housing and affordable housing from the development of new housing to taking care of shelter for the unhoused, all that whole- whole gamit. Um, you know, all of the services, you know keeping the lights on, so to speak, in the city, um and also looking at, you know, I know you had mentioned too that we've got bargaining sessions coming up. So um making sure that we are maintaining to the best of our ability, the kinds of pay and benefits, that keep the best staff, that provide the best services for the best city in Iowa. Um and so those kinds of things are- are in my mind. I think if we have to talk about juggling on the spending side of things, to me, it's going to be important that nobody carries the burden. If there's a burden to be carried, that it be as shared and diffuse as possible in these different places um so that there's not one group or one thing that- that takes a crippling hit. Uh I don't know if it's a little vague, but I think at this point. Fruin: That's helpful. This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 16 Harmsen: But I mean, that's kind of so as you take a look at stuff and as staff is looking at these things, um, those are the things that are in my mind, as I've been reflecting on this the last several days. So okay. Salih: Yeah. I second that, really. And also, I would like us to emphasize the importance of like really taking a bold approach of affordable housing. Right now, everybody talk about housing. The states trying to figure out solution for homelessness. And our waiting list has been closed for Section 8. That's telling us like how many people now in the waiting list. That's why they close it. So it become really a huge problem in the city and we need to have a bold solution to it. I- I really feel like you know, like for example, program like revitory housing is a solution for this homelessness, and we need really to figure out what we can do about it. We want a bond for that. Why not? I know that we don't have moue because this need a lot of money to start doing affordable housing. But we need to start right now to do something about this solution as soon as possible. I agree with everything else but that would be my priority. Teague: I'm just going to tack on to that since it's affordable housing. Um so we have conquered, you know transit with the free fa- free fare. Although there's more things, I'm sure, related to transit that we'll be talking about in the future. Climate action is something that we continue to be dedicated as a city. Um great work from our staff, as well as the commission. That is working on that. Um mental health is something that I still think that we are, you know talking about. But affordable housing, as we know, as Mayor Pro Tern just noted, we've closed our, um, you know, yeah, the um the housing applications. Um and we hear from people all the time of the challenges that they have to afford the rents in Iowa City. We also see the unhoused on the streets in our city in tents. And I personally believe that if we're going to be bold, we have to make a bold statement in writing through a commitment. Um and I would even go as far as to saying that we can make affordable housing a part of our CIP, where we would have a number that we would always have going towards affordable housing. Um we're grateful for the HUD funds that we got um for the pro housing. But we're gonna- it's gonna take a lot of more money to get us to where we need to be. And there are individuals that are living very- spending way more than 30% of their income in this community. Salih: Yes definitely. If I may. I know I as a council that, but if I may, just I don't want to forget my thought. Can I? Yes, I- I just wanna say that. We talk about, uh, like mental health. We talk about everything. But housing people is the start. If we did not house people, we cannot treat their mental health. We cannot do that thing. That's why I think we should become really bold. We should just talk about connected affordable housing, the any topic that the city is big about every day. We need a reminder in each City Council meeting, somebody to remind us, oh, we have this number of homelessness. People like who doesn't have home. We have this much of people in the waiting list. If we start really just working aggressive, if we're gonna find a solution, I think- I doubted if somebody in this council doesn't like affordable housing, all of us wanted to do it. And I know that the fund is challenging. But we can start somewhere. And as the mayor said, we can have a goal, and we just start small and just build on that one. Thank you. Bergus: Um so I think we in the spring, talked about coming back to revisit a larger conversation about community safety. So I hope we can have a little bit of that this evening, um a couple of things that I would just highlight from our strategic plan and conversations that we've had around the budget, particularly relating to the Iowa City Police Department, um and where we came to those - some of those really hard conversations starting in 2020 and since then. So we know that we're um staffing up and filling the positions that had been open a few years ago. So in the This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 17 conversations that I'd sort of pushed us on two years ago, it was about using the money that was unspent on- on staff that um now that money is being spent, and so that's pretty locked in. And I think we need to be looking at what are our opportunities for ensuring that we're continuing to go upstream? I completely agree with you, Mayor Pro Tem that housing is a key component to preventing harm in the community, right? Um and mental health assistance, whether that's, you know preventing traumas that lead to worst mental health outcomes, whether that is ensuring that interventions when people are in crisis are the most supported and appropriate for their needs, and then even, you know, whatever we can do as far as supporting all the different sort of schemes of ongoing treatment for people who are um suffering with mental illness. And I think, you know, I really don't want to lose sight as we're going into this strategic plan refresh, that one of our primary lenses is racial uh justice, social justice, racial equity, and human rights. And that, you know, what kind of got us to that as a primary value in the most recent history was looking at racial disparities in law enforcement and how that has played out in other communities in particular and how we see it playing out here. So I just really don't wanna lose sight of that. I know since 2020, lots of people haven't been talking about it in the ways in which we did then. But um and I know our study that we had every year isn't happening anymore. Do we have new data that we'll have as far as policing? Fruin: Yeah, we um is we changed vendors, University of Iowa Public Policy Center is doing that work force. And I think they're almost done. Bergus: Great. So we'll be able to look and see if- if some of the things that we've been talking about over the last four years have actually improved the situation as far as disparities that we see and how we can track that against the demographic data in our community. But I- I think it's really, really important that we continue to invest in prevention, to invest upstream. I- I don't know um where we are at in terms of our investment in mobile crisis intervention, for example, I know we added the second liaison. I understand that Johnson County Sheriffs Department just terminated their liaison. So there's certainly uh there's certainly some things happening around that that I think we need to be really cognizant of and make sure that we're renewing our commitments. The other thing relating to that, as it may influence this- this coming year is Johnson County just announced their uh um revitalization of a commission that is, I think it's called the Criminal Justice something Commission had been active in the early 2000s, I think resulted in a lot of the um jail diversion interventions that were implemented in the early 2010s. And we know from the Johnson County Jail needs assessment that those interventions around, like if you look starting in 2011, really have actually resulted in incarceration as far as at the local level in our- in our county jail. And so making sure that we are involved in those conversations and those activities, so we can be actively learning from other communities that have effectively uh reduced their jail census and- and done that by um implementing programs and supporting things again, upstream before - before things happen so that people don't end up in jail and diverting out of the system. So you know mobile crisis response is something I've talked about a lot getting someone in the dispatch center who can more effectively triage is something that we've talked about. Um and I know there was some support and at least renewing those conversations at this time when folks weren't real interested in the uh um budget amendments of the last couple of years. So those are the- the items that I want to focus on. Moe: I- I wanted to say one boring thing and one interesting thing. The boring thing being, you know, the- the recent listening posts that we did at the farmer's market. Did people a lot of the questions were my roads bad signals and it probably doesn't need to be said, but, like, we have that's a basic surface. Do I have a sidewalk? Do I have a street? Do I have um I just want to say that. Like, This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 18 that's something we have to provide, and I don't think that we should step backwards on basic services and basic infrastructure at all. Um in the vein of um prevention um and the kinds of things that we could be investing in that um that- that Councilor Bergus was just speaking about the piece that I'm always interested in is which prevention pieces do we get the most bang for our buck? And I remember at the same time we were having that conversation. There was also conversations about data analysts. And to me, I think that if that could become part of this conversation, is how do we have all these things we want to do? There's so much desire for us to do good for the community. But if we have to pick and choose, we should pick the things where we know we can make meaningful change, and there's, you know, data to support that the investments are actually yielding um success. And we, you know, have metrics for success before we start doing the thing. So I would like to sort of with any new investment, I think we need to be thinking about all of that data we're hungry for to help us make decisions on future investments. So maybe not exciting to get a new service today or tomorrow, but to have a better set of data to make informed decisions and to make hard decisions in the future about maybe things that we're supporting that are not giving us what we want. Like, maybe there are investments we're making that are not returning, you know, not getting a good ROI, and we need if we have the data to say, you know, what, you aren't delivering this service at the level or quantity that we want, we need to look elsewhere. Teague: Okay, if I can just make one statement related to that. So, I agree, we do need data. We need to become a data informed city, but I also believe since this has been a topic of conversation, you know has been really highlighted since 2020, that we should have a little carve out of something that will- of some funds that we will have at the moment, we feel like we need to, you know, make a jump. So, you know, to be a little, I guess, to be a little progressive on this, you know, anywhere between 250 to 500,000 as what I would say, we just have, like, a reserve for when we do get that data, because we could be knee deep into um you know, a current budget, done with the future budget decisions, and I don't want us to be in a position where we just can't move because we don't have the number, and we are just getting the data. So that's one thing I would say. Harmsen: I think, actually um thank you, Councilor Bergus I had one of my notes that I had in there was about the crime not the crime be um the? Moe: Criminal Justice. Harmsen: That the criminal justice um not that but the um ride along, the L liaison. And I think I saw that the Ride Along Liaison program is getting launched, so that's great. Fruin: This week. Harmsen: Do you know has there been a hiring? I know we were up to two, and then we were down to one again. Are we back up to two? Fruin: Am back up to two? B. Harmsen: Excellent. One of the things I had in a note to myself was just to make sure that and once we have I saw two that something in our packet about the uh civil service that looks like we're getting closer to the analyst position being filled? This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 19 Fruin: Yes. Harmsen: Which is exciting news. But that we don't let our liaison stuff, I'm glad to see these steps. I just wanna make sure we keep that in mind too, so we don't let it stagnate because I think that has great potential. Um I'm really excited to see where this goes with the Ride Along component. Um but if we need to also be looking at, you know um subsidizing another position at some point down the road, which again, now we're having the other half of our conversation from earlier. Um but as we take a look at where those valuable places are that we can do some things, I think that's just something that I actually had written down in my notes and had forgotten, so I'm glad you brought that out. Alter: One of the things that occurs to me, and this is maybe less about budget and more to the- I think now is exactly the right time for us to be talking about this because it's not in the middle of, like, and here are the numbers, right? So thank you for bringing that up. Um, and I'm reminded also of the way that we began in talking about LOST and other forms of revenue that it was like, we need to have everything on the table. And so I think that we need to enter into the conversation in that way. And it was, I think, you know, you and others had suggested, like, let's- let's bring everything. Let's talk about, let's open it all up. And I think that that's the best way that we're going to come as a community to looking at where the synergies, where the connections that we can make so that it's not all- I'm just thinking of it more at a 30,000 level. Vista, right? To be able to say what is going on perhaps with the- the county, what is happening with the university, what is happening with our police force, what is happening with our mobile crisis? And how- are there ways that we can leverage what's already in place and to put pieces together so that it isn't a whole bunch of disparate atomized solutions, but rather we can come together. And I know that there are conversations that have been ongoing, but I think that if we enter into this conversation in that way and say, everything is on the table. And how does public safety, i.e, the police force, help with preventative, knowing also that they are there in- in- in another stead times two, and - and not to say we're going to- in the same way that mental health can, um, enter into, you know, triaging and crisis moments to help. They're not there for all situations. Um, so I'm getting myself further in the weeds than I meant to. The point being, just, I think in the same way that we were talking about, how do we look at the situation of having, like, we need to figure out revenue. Let's put everything on the table before we start cutting away. I think we need to do the very same thing in talking about, um, how do we make our communities safer with the entities that we have, and how can we put them in conversation and collaboration together? So. Dunn: Going into some separate comments, I suppose. Much appreciated conversation. I do agree with, um, a need for continued conversation, especially as it relates to reactionary policing versus, um, preventative policing. Um, the first and foremost thing that I want to prioritize is the maintenance of our ability to deliver the things that we are trying to deliver in the status quo. Um. Bergus: Essential service. Dunn: Essential services, the grant opportunities that we have, the programs that we create, um, that we have created and maintain in the status quo. I want to make sure that we can continue to do those things. Um, inclusive of that is- is things like Fare Free, um, is a lot of our different climate actions. Um, knowing that we had nearly or over a million dollar deficit in the last fiscal year. Um, that is something that is concerning. So I- I do agree with, um, the conversation that we've had more broadly about, you know, looking at all of the tools, um, to address those problems, because I- understanding the deficit understanding our available funds in the future and the- the This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 20 really challenging environment that we continue to be in. Um, I think it would be great if we didn't have to deficit spend for anything aside from, you know, capital improvements or other major really transformative projects. I think- I think there are- there are great things that we can do that for, but, um, in terms of our general operations, I'd like to stray away from that. Um, that really, for me, means understanding, first of all, you know, if- if we are going to increase our revenue, uh, or if our revenue increases, how much is it going to increase, and where are we going to prioritize those dollars? I think of a few different places. Um, I completely agree with the comments about, uh, you know, affordable housing. I would like to see us, um, think big and bold and creatively, uh, with, you know, people from all over the country or all over the world about ways that we can try to fix the problem that we have in our community, which is not is super unique to our community if- if we're being honest. It's- it's pretty bad here in the grand scheme of Iowa, but there's plenty of places that are dealing with these problems that are trying to address them. Um, and we have an opportunity, I think, to continue to try to network and try to understand and try to figure out efficient ways for us to be bold to be creative and to, uh, you know, address the problem in a- in a meaningful way. Um, so I'm open to a lot of different things in that regard. One of the things that hasn't been talked about as much in this conversation that I really want to prioritize is transit infrastructure. Um, I mentioned in our last meeting as well, you know, areas of refuge, benches for people, you know, like, physical spaces that aren't just a patch of grass for people to, you know, be at when, ah, they're waiting for a bus. That's- that stuff really makes a difference to the quality of life and the accessibility of our public transit across, uh, the community. Those are things that I really think are important as well as, uh, you know, bike and pedestrian infrastructure. Um, I think that we can always make improvements to those types of, uh, of things in the community. And I think in some ways, like, especially with a challenging budgetary environment, incremental changes, uh, and improvements can be- can be wise. Um, I'd love to see dedicated bike lanes, but, you know, maybe we can only get some more dollars, that's cool. We'll have that conversation, right? Um, additional, I'm not going to forget this because I said it last year, too. Uh, I would love to see, um, the additional firefighter that we had that conversation about to equalize the, um, number of staff in each of our firehouses. Um, I would say that, in addition to continuing and or expanding, um, our- our climate efforts, uh, water efforts, air efforts, um, and, you know, broader energy efficiency efforts. Those are- those are my real big- big priorities, in addition, of course, to the conversations that I've had before, I- there wasn't anything really said that I strongly disagreed with. Alter: So, I have two, one- one sort of want list thing, and then a question. Um, I- I know that our ARPA dollars are going to be spent up, but, um, we were able to do wage enhancement for childcare. And that, too, that problem is not going to 'go away. So, um, I would love to be able to continue to look for opportunities to fund that. Um, you know, certainly in combination with the community foundation, but then also perhaps, you know, just looking for grant opportunities. I think that would be, um, a way for us to- to be able to maintain and- and - and hopefully at some point, have that as a sustainable program. My question is, and I think I'm not really hearing anything massively different from what we have in our budget right now, other than, and I completely concur that we need to look at housing as the crisis that it is. And I would say, in addition to, um, just to make it more fun, so to speak, um, we need housing of all kinds. We are not at pace for our growth. So I- I want that to be part of the conversation, too. My question is, are we at a point where we need to start looking at cutting? Because we just keep putting- we're piling more and more on. And yet, I do recognize that we're saying nothing that is outrageous to ask for better bus stops and whatnot. That's part of what a good city council and a good city government wants and provides for their citizens, right? But I guess I'm wondering within the parameters of the budget, This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 21 as you're seeing it right now, are we in a position where we can start doing? I'd love this, or are we really sort of looking at what's our status quo? Or do we need to start looking at cutting? Teague: I want to add something, um, before that, um. Alter: Sure. Teague: Before that's answered, because I heard us say we need to look at all the tools in the toolbox. So when I heard Councilor Dunn talking about the- the benches and, you know, the covered bus stops, well, we get emails every now and then from people that say - Alter: We have those. Teague: We'll- we'll come pay and put these there, you know, they want to put advertisement on it. So that would become the question that us as councilors, you know, or the city need to consider. Do we want that opportunity, um, at no cost to the city? They go and they do it. When I think about the, um, affordable housing and the bold step that we have to make, I mentioned, you know, the CIP, you know, making this a part of the CIP. Well, there is an opportunity that if we make this a part of the CIP is a- you know, they'll be public, uh, private partnerships where there will be folks coming to get some money to build. On the flip side of that, they'll be adding to our tax rolls. So there are ways to, you know, meet the demands of our community without adding fully. Alter: To the- to the budget. Teague: Yes. And at the end of the rainbow, if we're talking about a CIP, where, you know, affordable housing is there, we're investing to get money back on the back end. So I will leave it at that. You know, there can be a lot said about that opportunity, but I just wanted to mention that there are other tools in the toolbox to get some of the things that council mentioned. Fruin: Yeah, to- to answer your question, I don't think- at least at this point, I don't anticipate fiscal year 26 necessitating cuts. Now, the rollback could change all of that, right? If you have another 8% drop in a rollback, which we don't anticipate, then, um, we- we may be- it may be a different story, but I don't anticipate that there would be cuts, but if asked to prioritize some of the things I've- I've heard at the table, if you really want to uplift a few of these things, there might need to be offsetting cuts, and that's just a re -prioritization of resources. But again, to kind of summarize the memo and- and the presentation, we might get a 1 % bump in our valuation for- on average the fourth straight year. Expenses are going up 4.5, 5% a year with collective bargaining coming up, we don't know where that will land with any certainty. Um, and we won't probably when we present the budget to you. A lot of those contracts probably will not be resolved. So, um, yes, we are- we are- we are going to have to re -prioritize, uh, which could include cutting if you really want to push a lot of new initiatives forward. And one of the tough things that we all have to realize is, you know, I think someone brought it up earlier, a lot of our partners that we fund, whether it's consistently through aid agencies or if it's been a one time support like mobile crisis through ARPA, those dollars those ARPA dollars, especially are running out. There's no ARPA 2.0 coming. So you're- you should expect you're going to get a lot more requests from some of those partners that we fund as those- as they exhaust what they've been given. Um, so my focus right now is- is those essential services and- and keeping all those things, um, moving forward, and also making sure that we're investing in the infrastructure pieces that if we don't invest in, are This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 22 going to come back to- to- to bite a council and staff down the road. I'd love to tackle a lot of these. A lot of it will probably be dependent on your appetite for additional revenue sources. Dunn: I would just like to express appreciation for that and taking that mindset. I mean, that's definitely, um, I think as much as I can say that I prioritize, that's the top priority for me is maintaining, you know, what we're able to offer. And I think, um, Geoff, the fact that you have that mindset, you do that mindset. That is one of the reasons why I think this council is very happy with you. So thank you for that. Bergus: I think, also, as we're looking at the budget challenges, I know in the last couple of years, we've done a few of those partnerships through contracts for services. And I think that is a model that I hope we lean into because then the entity providing the service knows exactly what they will receive and can be efficient in their administration of that, you know, not having to go ask a lot of different places for money. Um, but also then we know exactly what we're going to spend, and it's easier for us to- to plan and know what to expect. And, particularly, if and when any of those contracts for services can offset any of our own costs. I really hope we're looking critically at that. Moe: To tie, I guess maybe I didn't articulate my thoughts clearly enough the first time, but Councilor Alter and Bergus did a better job of I think tying these things together when I was talking about sort of data and that desire is, okay, we don't need to cut today, and maybe some day in the future, we have to. I don't know that I'm prepared to make a decision on what needs to fall away and sort of having that information at hand to sort of say, what- who's providing services wonderfully? And I like the model that you talked about, Councilor Bergus is sort of establishing the requirements ahead of time, exactly what we're getting, and if it's not provided, well, okay. Um I think that that's- we might need to set up some guard rails so that in the future, when we have to make tough decisions, um, it's clearer for us, because right now, I don't know that I'm prepared to point to any one thing and say, now, we'll skip that. So. Teague: All right. You- Fruin: Thank you. This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024 Page 23 5. Council updates on assigned boards, commissions, and committees Teague: All right. So it sounds like everyone is good. You got your thoughts acrossed. All right. We're going to move on to item Number 5, which is council updates on assigned boards, commissions, and committees. Moe: Paratransit Advisory Committee met last week. Don is the new director of that. Tom is out. He's retired. Not anything bad. He's happy retirement. They did have some challenges with their electric bus, unfortunately, but it's back and running again now, I think. Um, just want to say that their challenges, I think, mirror the Iowa City transit challenges of just keeping and retaining drivers. So if you see a driver, say thank you and be really polite to them, please. Teague: Okay. Any others? Hearing none, we are going to adjourn, and we'll be back for our formal meeting at 6:00 PM. This represents only a reasonably accurate transcription of the Iowa City City Council work ses- sion of September 3, 2024