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Home My WebLink AboutBudget Overview-R FY 2014 Budget Proposa January January 5t": Operating Budget Review January 7t": Capital Improvement Plan and Public Works March 5t": March 5t": 01/05/2013 Public Hearing Formal Adoption Iowa City FY 2014 Budget Proposal 2 • Budget Overview and Highlights • General Government Public Safety Culture and Leisure Community and Economic Development Enterprise Funds Q & A and General Council Discussion 01/05/2013 Iowa City FY 2014 Budget Proposal 3 • Transmittal Letter and Document Overview • Financial and Fiscal Policies • Preparation of the Financial Plan (Process) • Economic Overview and Trend Analysis (New Section) • Summary Information • Fund Overview • General Fund • Special Revenue Funds • Grants and Dedicated Revenues (e.g. Road Use Tax) • Tax Increment Financing (TIF) • Debt Service Fund • Enterprise Funds (Business -Type) • Internal Service Funds • Capital Improvement Program (CIP) • Supplemental Information (Including Comparative Analysis) 01/05/2013 Iowa City FY 2014 Budget Proposal 4 • New Police Officer positions: o Number of new positions in the Police Department was mistakenly listed as three o The final budget will reflect two new partially grant- funded positions that Council previously authorized o Net result is an expenditure reduction of approximately $71,000 • Personnel Comparison of Full -time Equivalent Employees (pages 58 -59) o Total employment level changes were incorrect o A new table will be provided in the final budget o The corrected total numbers are as follows: 637.74 623.85 615.16 (8.69) 01/05/2013 Iowa City FY 2014 Budget Proposal 5 • Storm Water fee increase: o Transmittal letter stated that the proposed increased is the third in a four year phased plan o The final budget will correct that statement to read that the proposed increase is the third in a three year phased plan o No impact to FY 2014 budget numbers • Housing Inspections fee increase o Transmittal letter mistakenly stated there is a proposed 4% increase in housing inspection fees. o The fee increase was approved as part of last year's budget. Because properties are not inspected annually, some property owners will be impacted by the fee increase for the first time in FY 2014. o No impact to FY 2014 budget numbers 01/05/2013 Iowa City FY 2014 Budget Proposal 6 • Reduce the City's property tax levy rate for the second consecutive year • Maintain the City's Moody's Aaa bond rating • Continue to enhance the usefulness of the budget document Additional financial analysis Improved readability through expanded use of charts and graphs o Enhanced department narrative information and performance metric reporting • Continue to follow industry best practices and receive the GFOA Distinguished Budget Award and the Certification of Achievement for Excellence in Financial Reporting • Utilize Strategic Plan priorities to guide financial decisions 01/05/2013 Iowa City FY 2014 Budget Proposal 7 • Reduction in overall property tax rate (- 2.64 %) o 2.5% growth in taxable valuation due to increased rollback Tax rate reduced by 5.8% since FY12 Reduction achieved through several strategies • Debt restructuring • Favorable health insurance rates (contractual changes) • Equitable cost sharing arrangements • Department efficiencies and workforce reduction through attrition • Selective user fee increases • Strong reserve levels and contingency spending planning 01/05/2013 Iowa City FY 2014 Budget Proposal 8 • Rate increases proposed in several areas designed to reduce reliance on property taxes, address infrastructure needs and maintain healthy reserves o Housing Inspection (annual increase to cover cost of the rental program) • Parks and Recreation (Council approved in December of 2012) • Storm Water (year three of three year phased implementation) • Parking (reflects ongoing discussions with the ICDD) • Refuse (yard waste, refuse bags, bulky and specialized waste charges) • Landfill (specialty services such as compost, wood chips and electronics) • Aggressive Capital Improvement Program (CIP) • Flood mitigation • Critical infrastructure o Strategic Plan priorities • Performance metrics, economic overview /trend reporting, department narratives, and Strategic Plan concepts provide enhanced understanding of city operations 01/05/2013 Iowa City FY 2014 Budget Proposal 9 Comparative Analysis Taxes and Utility Charges (FY 2014) E4�3 10 C�3 Waterloo $18.21 1 Council Bluffs $17.85 2 Iowa City* $17.27 3 Des Moines $16.92 4 Davenport $16.78 5 Sioux City $15.99 6 Cedar Rapids $15.22 7 Coralville $13.53 8 West Des Moines $12.05 9 North Liberty $11.03 10 Dubuque $10.78 11 Ames $10.72 12 01/05/2013 Iowa City FY 2014 Budget Proposal * Projected Iowa City tax rate for FY2014 is $16.81 11 Cedar Rapids 1% 04/09 06/14 $17.4M Davenport 1% 01/89 $15.O1M Sioux City 1% 01/87 - $11.7M Waterloo 1% 04/91 12/15 $9.73M Iowa City 1% 07/09 6/13 $8.82M Dubuque Council Bluffs Ames 01/05/2013 1% 1% 1% y $8.36M 04/90 $8.1M 01/87 $6.6M Includes only those communities with LOST Iowa City FY 2014 Budget Proposal 90% Flood Recovery, 10% property tax relief 60% Property Tax Relief, 40% Capital Improvements and Equipment 60% Property Tax Relief, 20% Infrastructure Projects, 10% City Facilities, 10% EDX 100% Street Repair 100% Flood Related 50% Property Tax Relief, 20% City Facilities Maintenance, 30% Special Assessment Relief Streets and Sewers 60% Property Tax Relief, 40% Community Betterment 12 Sioux City $25.69 $34.54 $14.90 $0.83 $75.96 6 Cedar Rapids Davenport $34.69 $34.95 $13.40 $2.35 $85.39 1 North Liberty $32.77 $40.46 $9.35 $2.00 $84.58 2 Iowa City* $27.34 $36.08 $15.50 $3.00 $81.42 3 (3) (2) (4) (6) $17.24 $16.00 West Des Moines $30.30 $34.80 $11.25 $4.25 $80.60 4 Des Moines $23.82 $31.10 $13.00 $8.50 $76.42 5 Sioux City $25.69 $34.54 $14.90 $0.83 $75.96 6 Cedar Rapids $23.93 $20.86 $17.55 $4.78 $67.12 7 Dubuque $20.30 $27.37 $11.69 $5.60 $64.96 8 Coralville $17.80 $22.62 $19.00 $2.00 $61.42 9 Council Bluffs $24.13 $17.24 $16.00 $0.00 $51.92 10 Ames $25.96 $26.34 $0.00 $3.45 $55.75 11 Waterloo $13.22 $21.40 $10.50 $2.75 $47.87 12 * Projected FY 2014 Storm Water rate is $3.50 01/05/2013 Iowa City FY 2014 Budget Proposal 13 01/05/2013 Iowa City FY 2014 Budget Proposal Note: Excludes Transfers 01/05/2013 Iowa City FY 2014 Budget Proposal 15 FY2O13 FY2O14 Percent (Original Budget) (Proposed) Change Taxes $50,127,632 $ 50, 200,197 1.4% SSMID (pass through) $279,744 $275,320 -1.6% Other City Taxes $11,613,905 $5,554,566 -52.2% Licenses & Permits $1,440,389 $1,350,968 -6.2% Use of Money & Prop $1,671,893 $1,682,662 0.6% Intergovernmental $67,757,103 $42,417,564 -37.4% Charges for Services $40,927,108 $40,303,766 -1.5% Misc. $5,215,656 $5,027,790 -3.6% Debt Sales $13,800,000 $16,900,000 22.5% Sales of Assets $2,031,586 $2,081,450 2.5% Total $194,865,016 $165,794,283 -14.9% Note: Excludes Transfers 01/05/2013 Iowa City FY 2014 Budget Proposal 15 Debt Sales, Misc., It 4% Charges for Services, 25% ier City Taxes, 3% ses & Permits, 1% of Money& Prop, 1% 01/05/2013 Iowa City FY 2014 Budget Proposal 16 FY 2013 -14 GENERAL FUND REVENUE SOURCES Misc. 3% Other Financing Sources 9% �hargesfor Services Intergovernmental 7% 4% Use of Money & Prop 1% Licenses & Permits 2% pr Other City 8% 01/05/2013 Iowa City FY 2014 Budget Proposal 17 $5,000 $4,500 $4,000 $3,500 n $3,000 c 2 $2,500 c - $2,000 $1,500 $1,000 $500 100% Assessed vs. Taxable Valuations �V FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 f100 %Assessed $2.907 $3.139 $3.242 $3.751 $3.891 $4.215 $4.320 $4.380 $4.437 $4.531 $4.571 % Change. Assessed 1.9% 8.0% 3.3% 15.7% 3.7% 8.3% 2.5% 1.4% 1.3% 2.1% 0.9% -9k—Taxable $1,933 $2.004 $2.049 $2.241 $2.290 $2.409 $2.515 $2.685 $2.773 $2.900 $2.973 % Change. Taxable 1.7% 3.7% 22% 9.4% 22% 52% 4.4% 6.8% 3.3% 4.6% 2.6% Taxable %of Total 66.49% 63.83% 6320% 59.75% 58.85% 57.15% 5820% 6129% 62.50% 64.00% 65.06% 01/05/2013 Iowa City FY 2014 Budget Proposal 18 Ag Land 0% Inrl mt.ai o^ —A- Utilities w/o 01/05/2013 Full Valuation Commerc 37% Ag Ad % 0 Iowa City FY 2014 Budget Proposal Taxable Valuation tial 19 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 Total Tax Receipts $43,163,503 $45,388,973 $47,783,939 $49,589,989 $50,127,632 $50,200,197 Percent Change 7.99% 5.16% 5.28% 3.78% 1.08% 0.14% 01/05/2013 Iowa City FY 2014 Budget Proposal 20 Iowa City Property Tax Rate Trend 01/05/2013 Iowa City FY 2014 Budget Proposal 21 $10,000,000 $9,000,000 0. M�Mpl $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 01/05/2013 Iowa City FY 2014 Budget Proposal 22 $1,200,000 $1,000,000 $600,000 $400,000 $200,000 M FY 2012 FY 2013 FY 2014 • Hotel Motel Tax $813,896 $739,587 $1,000,278 • Gas /Electric Excise Tax $857,553 $773,712 $787,106 • Utility Franchise Tax $826,450 $853,000 $831,201 01/05/2013 Iowa City FY 2014 Budget Proposal 23 01/05/2013 Iowa City FY 2014 Budget Proposal Total Expenditures less Transfers $259,402,658 $168,930,989 -34.9% 01/05/2013 Iowa City FY 2014 Budget Proposal 25 FY2013 FY2014 Amended Proposed Budget Budget Percent Change Public Safety $21,554,839 $21,914,651 1.7% Public Works $7,729,372 $7,483,926 -3.2% Health & Social Services $290,707 $265,175 -8.8% Culture & Recreation $12,770,999 $13,203,612 3.4% Community & Economic Development $8,306,974 $10,374,482 24.9% General Government $7,672,254 $7,789,941 1.5% Debt Service $20,326,046 $13,496,700 -33.6% Capital Projects $128,315,810 $48,199,872 -62.4% Proprietary/ Business -Type Funds $52,435,657 $46,202,630 -11.9% Total Expenditures less Transfers $259,402,658 $168,930,989 -34.9% 01/05/2013 Iowa City FY 2014 Budget Proposal 25 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 FY2014 All Funds Expenditures by Classification 24.89% 1.67% 39% -3.18% 1.53% 8.78% -11.89 33.60% 62.44% Public Safety Public Works Health& Culture& Community& General Debt Service Capital Business Type Social Services Recreation Economic Government Projects Activities 01/05/2013 Development Iowa City FY 2014 Budget Proposal 30.00% 20.000% 10.00% `m v 0.000 °% o a E 0 - 10.00% v 00 c m - 20.00% �U c v - 30.00% m a - 40.00% - 50.00% - 60.00% - 70.00% 26 FY2013 FY2014 Percent (Amended) (Proposed) Change Personnel $34,147,891 $35,247,069 3.2% Services $8,620,724 $8,370,090 -2.9% Supplies $1,523,432 $1,457,877 -4.3% Capital Outlay $2,511,667 $3,754,870 49.4% Total Expenditures *: $46,803,714 $48,829,906 4.3% *Excludes Contingency and Transfers Out 01/05/2013 Iowa City FY 2014 Budget Proposal 27 01/05/2013 Iowa City FY 2014 Budget Proposal 28 City of Iowa City MFPRSI Contributions $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $ FY 2011 FY 2012 FY 2013* FY 2014* FY 2015* FY 2016* ■ City of Iowa City MFPRSIContributions $1,653,589 $2,277,292 $2,462,514 $2,677,851 $3,140,553 $3,404,373 ■ Percent Increase 38% 8% 9% 17% 8% 01/05/2013 Iowa City FY 2014 Budget Proposal 29 01/05/2013 Iowa City FY 2014 Budget Proposal • State of Iowa limitation of no more than 5% of total assessed property value Iowa City projected to be at 1.6% of total valuations • Iowa City policy that debt service levy shall not exceed 30% of the total City levy in any fiscal year The projected debt service levy is approximately 24% of the total levy • Debt restructuring and elimination is a critical component of the strategy to red uce the property tax rate 01/05/2013 Iowa City FY 2014 Budget Proposal 31 300 250 200 150 100 50 7 General Obligation Debt by Fiscal Year 01/05/2013 Iowa City FY 2014 Budget Proposal • State of Iowa Allowable Debt Margin • Iowa City General Obligation Debt Figures in millions of dollars * Estimated 1000 900 800 700 m 600 v F C!1!1 Distribution of Moody's General Obligation Ratings for US Cities a E Z 400 300 200 100 0 Aaa Aal Aa2 Aa3 Al A2 A3 Baal Baal Baa3 ■ National 196 283 939 648 710 211 59 57 15 11 01/05/2013 Iowa City FY 2014 Budget Proposal 33 Distribution of Moody's General Obligation Ratings for Cities in Iowa ,C 01/05/2013 Iowa City FY 2014 Budget Proposal 34 20 N 15 Iowa City a d a E 10 Z 5 0 Aaa Aal Aa2 Aa3 Al A2 A3 Baal Baal Baa3 ■ Iowa 4 8 11 11 21 6 3 1 0 0 01/05/2013 Iowa City FY 2014 Budget Proposal 34 01/05/2013 Iowa City FY 2014 Budget Proposal ampo • Reserves: o General Fund contingency at 3/4% of expenditures and transfers out o General Fund operating cash balance target of 15 -25% o Excess General Fund reserves should be used for property tax relief measures (debt retirement, pay -as- you -go capital, internal loan retirement, etc.) o Other funds reserve levels vary based on the nature of business and bond covenants • Debt Financing: o Debt Service levy not to exceed 30% of total property tax levy o Use of "pay -as- you -go" whenever feasible and practical 01/05/2012 Iowa City FY 2014 Budget Proposal 36 General $57,141,252 $57,182,807 $17,734,611 31% Water $8,386,021 $9,023,937 $5,004,717 55.5% Wastewater $12,995,201 $14,485,548 $10,101,774 69.7% Storm Water $1,201,860 $799,200 $1,041,837 130.4% Refuse $2,984,915 $2,959,828 $301,909 10.2% Landfill $6,108,031 $5,792,684 $21,929,210 378.6% Transit $6,626,613 $6,602,057 $2,580,129 39.1% Broadband $866,569 $894,020 $1,614,672 180.6% Airport $391,661 $374,584 $280,314 74.8% Parking $4,721,734 $4,908,800 $3,720,096 75.8% 01/05/2013 Iowa City FY 2014 Budget Proposal 37 01/05/2013 Estimated Property Tax on $100.000 Residential Valuation (Iowa City portion) FY 2013 $876 Assessed Valuation Taxable Valuation City Levy Property Taxes Difference FY20134ir FY201M $100,000 $50,752 $17.269 $ 876 Iowa City FY 2014 Budget Proposal $100,000 $52,816 $16.813 $888 $12 3S $9,000 $8,900 $8,800 $8,700 $8,600 $8,500 $8,400 $8,300 $8,200 Iowa City Property Taxes Paid on a $500,000 Commercial Property F- A projected reduction of $514 in City taxes over the three year period $8,100 FY 2012 FY 2013 FY 2014 ■City Property Taxes 01/05/2013 Iowa City FY 2014 Budget Proposal 39 Proposed Rate Increases: o Recreation Programs • Various adjustments in several programs and activities • Goal is for fees to recover 50% of department program costs Storm Water: 01/05/2013 • $0.50 proposed monthly increase • Final year of three year schedule adopted in FY 2012 for capital improvement projects Iowa City FY 2014 Budget Proposal .e Proposed Rate Increases: Refuse Fund • Refuse and yard waste bags to $1.25 from $1.00 • Yard waste stickers to $25 from $20 Landfill Fund • Compost product to $20 per ton from $10 • Wood chip mulch product to $10 per ton from $0 • Television and computer monitor recycling increases • Tires, bulky waste and electronics pick up fee increases Parking • Reflects `first hour free' program in decks with $1 per hour after the free hour • Includes raising meter fees, moped permits, contractor hoods and elimination of park and shop 01/05/2013 Iowa City FY 2014 Budget Proposal 41 • Reasons for Fee Increases Maintaining a relationship between fees and program costs to avoid over - reliance on property taxes Anticipated infrastructure improvements o Strong fund balances intended to maintain AAA bond rating and provide flexibility in emergencies or for unforeseen opportunities • Annual Review of Fees /User Charges o Reviewing fee structures annually allows for more gradual increases; avoids sudden, drastic hikes o Fees can adjust in response to changing costs Improves compliance with City revenue policies for self- supporting funds and programs 01/05/2013 Iowa City FY 2014 Budget Proposal 42 Financial Impact to a Typical Household $2,000.00 $1,800.00 $1,600.00 $1,400.00 $1,200.00 $1,000.00 $800.00 $600.00 $400.00 $200.00 $ FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 r_ Property Taxes $781 $814 $833 $866 $876 $888 �Stormwater $24.00 $24.00 $24.00 $30.00 $36.00 $42.00 Refuse $174.00 $174.00 $186.00 $186.00 $186.00 $186.00 r_ Sewer- 800 cubic feet $432.96 $432.96 $432.96 $432.96 $432.96 $432.96 r_ Water- 800 cubic feet $328.08 $328.08 $328.08 $328.08 $328.08 $328.08 - Percent of annual change -0.1% 1.9% 1.8% 2.2% 0.9% 0.9% Based on residential customer with $100,000 taxable property valuation. Total estimated financial impact is $1,876 or $18 more in FY 2014 compared to FY 2013 01/05/2013 Iowa City FY 2014 Budget Proposal 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% 43 • Reduced property tax rate aimed at making the community more economically competitive • Status quo service levels with no new positions, except two partially grant funded Police Officers • Building fiscal integrity to ensure maintenance of Moody's Aaa bond rating • Continued emphasis on flood recovery, critical infrastructure, and Strategic Plan initiatives • Anticipation of the end of the LOST revenue • Improved narrative and analysis including new economic overview and trend analysis section 01/05/2013 Iowa City FY 2014 Budget Proposal 44 • Foreseeable Future 2013 National /Global Economic Forecast • Fiscal Cliff Potential Impact • National • Loca • State of Iowa • Commercial Property Tax Relief • Public Safety Pension 01/05/2013 Iowa City FY 2014 Budget Proposal 45 01/07/2012 .JLW Iowa City FY 2013 Budget Proposal