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Home My WebLink AboutBudget Report HandoutsPosted online at: icgov.org/budget FY 2018 Budget Proposal January 7, 2017 January 7: Operating Budget Review January 10: Capital Improvement Plan Review February 21: Setting of a Public Hearing March 7: Public Hearing/Adoption of Budget March 15: Certification with County Auditor Iowa Cit, FY 2026 euage: Pro Uosal 2 1/10/2017 Areas to Focus: o Transmittal Letter (Executive Summary) o Fund Structure and Description o Financial and Fiscal Policies o Long Range Financial Planning o General Fund Summary o Economic Trends* *2016 numbers will be added in the final budget Iowa ell- F M8 B"get Proposa; Pages 11-28 Pages 65-70 Pages 79-85 Pages 86-91 Pages 111-121 Pages 652-658 -,:- ".7Z wnUrml 9WEu°: e:A rlut; SroMCISj �i aa:pe�e u Whin wnmea4t vE+:�+ea JxietIF lS3[O� �wrr(Td'1 m°M mtulm VW�o>ammp. wntY Major funds p" .�rno•; rb �npT lepewer¢ I NN � 2 1/10/2017 Provide resources to achieve Strategic Plan goals Continue to implement steps to respond to the property tax shortfall resulting from the 2013 legislative changes while maintaining service levels • Maintain the City's Moody's Aaa bond rating Maintain an affordable tax and fee environment for residents and businesses • Continue to follow industry best financial management practices and receive the GFOA Distinguished Budget Award and the Certification of Achievement for Excellence in Financial Reporting Iowa CityF 201E Budget FmposaI • Current: Strong Fiscal Position Robust growth building tax base and offsetting tax reform while producing strong one-time revenues Healthy reserve levels across our operation Continued ability to reduce tax rate through the debt service levy r. Strong position validated by Moody's Bond Rating Future Concern: Sustaining our Strong Fiscal Position Multi -residential base continues to erode Agriculture prices point toward a declining rollback figure Backfill from State of Iowa continues to be vulnerable o Volatile expense items (e.g. healthcare, pensions) Likely not going to sustain level of growth from past few years Iowa City 2018 Budget Proposal July 1, 2017 (FY 2018) Multi -residential property class is broken out from Commercial and is taxed at a declining rate — 82.50% of value will be taxed in FY18 Taxable percentage will decrease each year until it matches residential in FY 2024 Projected cumulative loss over ten years beginning in FY2017 is over $15 million with no backfill - Multi -residential taxable % of Pronertv FY17 86.25% FY18 82.50% FY19 78.75% FY20 75.00% FY21 71.25% FY22 67.50% FY23 63.75% Taxable % of Property "Rollback" oo� o.00H --- 0.ocq \V✓/ eoocve z�m —Resi d- + Cemm dal --tre WW—MUX4residenWl 'RBsidental after assn smentyear 2014 are r.,M.d percentages low. City F 2018 Budget Proposal T Rollback by Assessment Year 80 70 60 50 40 ---- Rollback 30 -.. 20 10 it Be 0 Nw m o`'oo CO rn M M rn rn 0 0 0 0 0 0 � m rn rn rn rn rn rn rn s, 0 s s 0 0 0 0 0 0 0 0 0 cn .-i rl ri ri rl c -I c -I s–I N N N (V N N N N N N N ioxe Ctty P 2018 Budget Proposal B 1/10/2017 rd 1/10/2017 State backfill buifor FY2018: General $758,037 Risk $27,351 Library $25,268 Transit $88,906 Employee Benefits $294,301 SSMID $28,823 Debt Service $358.354 Total $1,581,040 Equivalents $.46 added to our property tax levy 15 police officer or fire firefighter positions All three pools, animal shelter and forestry divisions Iowa city FY gals Budget Proposal Public Safety Pension Contributions Annual expenditure fluctuations ranging from -5.5% to over 30% in the past several years FY18 budgeted expenditures are a 109% increase over FY10 Public Safety Medical / Workers Comoensation Costs Annual costs have increased nearly $500k, or 140% since FY14 Health Insurance 13% increase from FY16 to FY17. 7.5% increase budgeted in FY18 Iowa CO H M18 Budget Prer osal iC Building Permit Construction Building Permit Revenue Value (calendar year) (fiscal year) 450,000,OCO 25w C00 40O,OW,000 2,OC' 3 ,OW,000 32,S1.A.OJ." �— I = 5u•J,O09 f - 200.WO.000-----"' --' ' 5w cac 0 2O0P 2W920002010201120122013201420162015 Imva City FY 2818 Bi,J,t 0,0,03,11 Iowa Oty Fr 2G,S ,Ll ,t Prc,ar.31 1/10/z0v M All Funds Revenue Comparison of FY2017 versus FY2018 Iowa City FY 201E 51 idgpt PRpOp el 13 Other Flnancel Sources 11% Other City Taxes a% Misc. II'wo Ispr ess . & Permit. 2% Use of laonsy 6 Charges for Prep Services 1% 26% Excludes transfers t::a cIN F+2018 Budget Proposal 14 1/10/2017 Fi Percent FY2017 FY2018 Change Property Taxes $ 55,330,224 $ 56,517,353 2.1% Other City Taxes $ 5,050,336 $ 5,054,307 0.1% Licenses & Permits $ 2,463,182 $ 2,561,660 4.0% Use of Money & Prop $ 2,297,691 $ 2,425,343 5.6% Intergovernmental $ 32,581,046 $ 29,278,352 -10.1% Charges for Services $ 40,359,768 $ 41,263,278 2.2% Misc. $ 6,422,129 $ 6,443,252 0.3% Other Financial Sources $ 18,615,427 $ 17,212,634 -7.5% Total $163,119,803 $160,756,179 -1.4% Now; &Chudes Tmpsfers Iowa City FY 201E 51 idgpt PRpOp el 13 Other Flnancel Sources 11% Other City Taxes a% Misc. II'wo Ispr ess . & Permit. 2% Use of laonsy 6 Charges for Prep Services 1% 26% Excludes transfers t::a cIN F+2018 Budget Proposal 14 1/10/2017 Fi Other City To. 5% Licenses & Permits 5% Use of Money & Propoly .7 Chergesfar Fees & SerNces 3% rl�srilano�•u 12% Excludes transfers O:oe-Flrardng Sources 2% eixo CnY I'f :=1119 Buigm Pm Oaeni _. Me 90% FY18 56.94% FM 82.50% 16 1/10/2017 F11 % of Taxable Property Values by Classification 7000% 7 -__.. _.. 6o.00% L-. -- -- 50.00% 40.011%L 30.00% i._.. _._..._... 20.00% L ------ 10.00% - -------- 100%i FY2C'4 FY20 5 ` FY2016 i FY2017 1 Res defal 596440 81.66 8468ro Comme-ca 3739% 35.37 --_ 3273/0 2 78/0 M -Res 0 C% C.D C00/ _— 10690 Commercial Rollback: FY14 none FYi595% FY169D% FY1790% Residential Rollback: FY14 52,82% HIS 54.40% FY1655.73% FYI 755.63% Muiti•Res Rollback: FY14 NIA FY1695% FY1690% FYI 786.25% I, OtT -r 2018 Rudget Proposst Me 90% FY18 56.94% FM 82.50% 16 1/10/2017 F11 1/10/2017 SIO,tlprAtl S>o.dtp,tlfO 5xo mn mo Seo gM1,RU Se �w zoo._ mt.. m1z za13 Nid zms zcle_F za1) �..- zme Roy.ryT �Ed9118101y 616S180MiL]B15_]fid $d6,fid'{b0��i50dt68tB a400315]fii5t0.93] 95i 0930�r§5539022d $5B_51]955 %CM1®npe� �j � 6yi tl16 y 559%. ]5%Y_1 t>)%___ ]3% � 2_SB% _ . tOd% _j 033% _L dt694.._ 'ROJeC1e0 rowe Crty FM 261E euuy�. smpua3. 1, • The City of Iowa City tax levy rate is one component of the total property tax rate residents and businesses pay. • The three largest components of the overlapping property tax rate are the City, the School District, and the County. $45.00 540.00 $35.00 530.00 325.00 $20.00 $15.00 $10.00 $5.00 $0.00 Percent of Overlapping Tax Rate State of Iowa" 0% Kirkwood 3% hn5cn ry OW111h "The State of Iowa has a special levy of $0.0033/$1,000 of taxable value Iowa City FY 20'8 Budget Propose 45.00% 44.50% 44.09% 4's.50% 43.90% 42.50% 42.00% 4150% FY06 FY09 FIG F.'tt =Y12 1`1.3 Fytd Fv t'i F:16 FY17 wamICCSC amaJohnson County' Kirkwood aaaSaIe of Iowa avoCity of Iowa City —.- Iowa City Parcenia, of sets! loNa City �Y 2018 Bboget Pmposao 20 1/10/2017 10 $1.200,000 _..... $1000.000 k $800,000 $600.000 $400,000 $200,000 $0 FY 2012 _. I. FY 2013FY 2014 I FY 2015 FY 2016 _ GM Hotel Motel Tax $8'13 896 $871 706 $967 049 $1 057386 $1,078,762 L■ Gas/Electric Excise Tax! $857,553 $819,662 $780 458 $850 846 $764,280 Utility Franchise TaxJ�$826 450 031.187 $901 690 $874,235 Imre [ity ry 26A 8.eg O'OVml 21 1/10/2017 Rl City AMl sx Rate FY2012 Tax Rate % Change 00/x Davenport Ox/x FY12-FY17 Council Bluffs $17.75 $17.85 (0.56x/0) Waterloo $17.60 $18.53 (5.02°/x) Des Moines $16.92 $16.58 2.05% Davenport $16.78 $15.53 8.05% Iowa City* $16.58 $17.84 (7.06°/x) Sioux City $16.07 $16.66 (3.54°/x) Cedar Rapids $15.22 $15.22 0.00% Coralville $13.53 $13.53 0.00% West Des Moines $12.00 $12.05 (0.41%) Dubuque $11.17 $10.45 6.89x/° North Liberty $11.03 $11.03 0.00% Ames $10.37 $10.84 (4.34°/x) ' Pmposetl Iowa City tax rate lir FY2018 is $16.33. Iowa City's FY2012 rate was 517.84, Iowa CIG FY 20�8 BUCcet PFJposel 23 City AMl Franchise Fees Rate North Liberty 00/x Davenport Ox/x West Des Moines 00/o Ames 0x/x Coralville 10/0 Iowa City 1 % Council Bluffs 2% Cedar Rapids 3% Waterloo 3% Dubuque 5% Sioux City 5% Des Moines 5% Iowa City Fv 20,18 Bxdw QrxpxSai 24 1/10/2017 12 1/10/2017 13 FY16 Year Sunset Estimated City Rate Effective Year Receipts Purpose Cedar Rapids 1% 2009 2024$19,329,975 100% Street Repair 60%Property Tax Relief, 40% Capital Davenport 1% 1989 None $15,643,683 Improvements and Equipment 60% Property Tax Relief, 20% Sioux City 1% 1987 None $13,277,530 Infrastructure Projects, 10% City Facilities, l0%Box Council Bluffs 1% 1990 None $10,664,841 100% streets and sewers Waterloo 1% 1991 2025 $9,466,769 100% Street Repair 50% Property Tax Relief, 20% City Facilities Maintenance, 30% Special Dubuque 1% 1988 None $8,644,098 assessment Relief Ames 1% 1987 None $7,495,785 60%Property Tax Relief, 40% Community Betterment ^ Iowa City's LOSTeaplredln F 2013endgemmWdappmxlmat iy$S.emiA nennuatyforfouryeam. Iowa CSy R 2018 Bungnt Proposal 25 1/10/2017 13 lea. Cit Fv 2C -S F , j, � , , , es Contingency 1% Supplies 2% Capital Outlay 4% r Financial Uses 1% is Personnel 39,114,449 40,620,033 3.71% Services 9,720,849 10,125,386 4.00% Supplies 1,490,258 1,703,693 12.53% Capital Outlay 2,968,988 2,279,115 -30.27% Contingency 391,000 545,000 28.26% Debt Service 900,000 510,000 -76.47% Total Expenditures* 54,585,544 55,783,227 2.15% 10." cm c, 7alz M"'r 1/10/2017 14 1/10/2017 City of Iowa City MFPRSI Contributions 3,500.000 3,000.000 2,000,000 1 s00.000 - - �,000,000 500,000 1— ---. - 0 F. _.__.: . _._,,._ : _..__._ Iowa City R 201E Budget Proposal 29 Personnel insurance benefits will be maintained at similar levels to FY17. To supplement increases in overall insurance costs, slight incremental increases to premiums and out of pocket expenses will be paid by bargaining and non -bargaining employees. o Health Insurance • Premiums increased by 12.83% in FY 17 • Projected to increase 7.5°% in FY 18 Annual public safety medical benefit costs have increased over 140% ($498,262) since FY 14 due to 2009 State legislation section 411 added a presumption of responsibility of infectious disease and/or cancer for police and fire personnel. is Public safety medical benefit cost increased 1.03% between FY17 - FY18 ($24.842) Current reserve for this purpose is recommended at 30%. City current cash balance medical fund reserve is 21.41°% Iowa CM ry 2018 Orl aroposal Debt 2,e_? Service 31 03 • State of Iowa limitation of no more than 5% of total assessed property value o Iowa City projected to be at 1.24% of total valuations Iowa City policy specifies that debt service levy shall not exceed 30% of the total City levy in any fiscal year The projected debt service levy is approximately 21.9% of the total levy Debt restructuring and elimination continues to be a critical component of the strategy to reduce the property tax rate 10wO City FY 20n8 BW801, Proposal 32 1/10/2017 16 U / -✓I � li q�/.� lZ 91lf Pa )I� "`Hf 4,r� pp %t `IIIU»)// Rl eU111 I' l't� ra ;l ew owumu nouartee -..._ .ep:ooA.poo � 11 oaa o00 . w o w r z me rn vv s _ lvae sv ] r rov 9 �S of eebl L' t� Y2 .W 2YYA92 2EO eb ye ]BA9 i 9116 29 333 J9 39]62]06 1B 6 99 t 0 AM 3NA]p I96 W 1100.eW �C/,G200Ce10GW K9 �C1gM,f-0p 88,%1pN_ e1 W1 f01+ t0.G01{ fel 91? hY aNp GOOffiU 1feWAel �01000p'2R99p mo - �esM %NiMW Veluetlt 4 l )1% =8&2% 1 WY 1A3% �1A9% Y]B% _t�1%% —1{i iS6% J *aroiedted Ima vr,F 20]R Bimgm 33 1/10/2017 17 Distribution of Moody's General Obligation Ratings for All US Cities 71e Dnp' 0 �Ic+� C:@y i %eof Totals 730% 10 5%f 2892k _2077% 1898%_ J89%. 2._ i8' 099% 0.58%_� Iowa City H 2C1S Budget uroposal 34 1/10/2017 17 1/10/2017 I4 ro Distribution of Moody's General Obligation Bond Ratings for titles in Iowa :s _ G d � u tr ro S 2 Iowa City a A89 Ae' f�Aa 2 %3 iAl A2 A3 6881 8222 8283 •State 2? t2 .� k 13_2 0..._ t _.1 _ %oi Tda( 294Z� +0.29Y L1618Y : 1765h 27449 J19A2 �ttt 294% O.A01 �_A7% 1A74= Iowa Pty vY i p18 8uagat Prom, - 1/10/2017 I4 1/10/2017 Estimated imnebrs BudgoleJ Tmnslers EBL FUMI He6ldUnassigned 'A LIprO "w ur Fav fund Favenuva to Eapandilams out eafante Gemmirled, Baimeea fiTraus 6p0l18 Assigned glierTpl6 l" 5,922,530 1,114,695 6,941622 1E]0,005 10,178,479 3,500p00 6,676479 949D°6 ® 4.193.204 3520.075 7202.013 151000 5,583,091 917,482 4.665,609 6049% 12.589.340 4.368,762 10,601444 6.703.762 18.714.634 8.989.859 9,724,775 5735% 9,268,096 1,937940 8465,882 3,380,515 11211,680 4,157,504 7,054,176 6295% Raq,13,411,689 - 3,427,207 500,000 743762 - 743762 2180% u 6,234,063 1,123,436 4,902,903 3,488,126 24,839.439 23,133,818 1,705,621 23.18% i 359,500 109.687 369,187 179,8330 274,642 100,000 174,642 3722% G ,I 41dmSa War"1 1,493,550 - 518,983 1,040,000 918.984 918,984 6194% apsirgA 8,769,397 - 8,201 363 46779 7,667,451 2,945,146 4,722,305 53.85% Iowa CityR 2018 Budget Frupus' 37 City,.,,, Water Sewer Waste Storm Total Rank North Liberty" $4473 $5430 $1035 $2.00 $11138 1 Davenport $44.12 $45.21 $15.91 $2.57 $107.81 2 Des Moines $2721 $43.94 $11 00 $11,50 $9365 3 Dubuque $2764 $38.00 $14.77 $6.81 $87.22 4 Iowa City $30.17 $36.08 $15.60 $4.50 $86.65'" 5 West Des Maines $32,44 $37.50 $10.55 $4.25 $84.74 6 Ames" $28.18 $32.63 $1922 $3,45 $83.48 7 Sioux City $31 45 $34.55 $15.30 $0.63 $82.13 8 Cedar Rapids $27..11 $24.25 $2102 $5.18 $7256 9 Coralvllle $19.60 $28.93 $20.00 $3.00 $71.53 10 Council Bluffs $28.75 $22,88 $18400 $000 $69.63 11 Waterloo $1715 $25,75 $10.50 $2,75 $56,15 12 *Ames and North Llbertytrash collection provided by private contractors I •Average rate Is $84.33/difference of $2.32 iwra City FY 2018 Budget Proposal a No fee changes for water, sewer, storm water, or transit Refuse & Recycling - effective July 1, 2017 $0.20 increase to monthly rate for solid waste $1.00 increase to monthly rate for recycling $1.25 increase to $2.50 per bag for heavy -use solid waste Proposed $2.00/monthly fee to replace annual $25 yard waste & $1.25/yard waste bag fees - effective Jan 1, 2018 :> Minor adjustments ($1-2) in per item fees for electronics recycling Parking - $5.00 increase to monthly permit fee. (No change to meter or violation rate structure) Parks and Recreation - effective Spring 2017 ., All programs, lessons, room and field rentals, dog park passes and cemetery fees increased by 3% o Increase of 3% or less to various local food initiatives (garden plots, farmer's market stalls) rcxa Cry FY 2018 Bcigat P.•oposa; 39 hubmwte0 Property Tax On 6100,000 nes,0enlul VWUebOO Vpe -%ey pe ien) FY 2017 FY 2018 $922 f =J Li _. Assessed Valuation $100,000 $100,000 Taxable Valuation $557626 $56,939 City Levy $16.583 $16.333 Property Taxes $922 $930 Difference $8 Iowa City -2018 Bi,dg t Proposal 40 1/10/2017 20 -------------------------- Iowa City Property Taxes Paid on a $500,000 Commercial Property $9,000 A projected reduction of $1,571 since 2012 $e 500 $8,000 $7,500 $ oo0 $6,500 FY202 FY2013 FY20u FY2tl15 FY201& FY2017 r 2918 •Cpy RWory Tpes 58,92[ 55,634 $6,603 $7.935 57.4A3 $7,462 57.35-0 lo'wa Gty FY 2018 Budget Proposal 41 ,vr, fdvF� CV, E,iU i Fior, rEar »� 1/10/2017 21 • Significant development and reduction in personnel expenses resulted in unpredicted FY16 surplus. Places City in strong position to start FY 18 and allows us to complete significant capital project that has not been attainable in recent years. o Allow for a $2.5 million transfer to Public Works Phase I o $500k to Emergency Reserve Fund o Remainder of surplus remains in unreserved fund balance, projected to be about 34% of FY 18 revenues and transfers in. Preparation for impact of property tax reform c Continue transfer ($500.000 in FY 18) to the Emergency Fund which was established in FY2015 to provide additional stability, protect against a sudden loss of revenue or increase in unfunded mandates, and make the community more resilient through disaster relief and mitigation funding Limit the growth in operational costs with minimal or no service level impacts Ipv a COO F- 2018 Budget Propcsal 43 -Continued reduction in the overal! propertytax rate c 3.57% growth In taxable valuation primarily due to new development o Tax rate reduced by 8.5% since FY12 ($17.842 to $16.333) FY18 rate will be the lowest Iowa City rate since FY2002 o Valuation growth was strong in a non-revaluaton year Taxable Valuation History an 000 --- $a5oe - sa,eoe fr$1 de. I s, e0. { c F150a — - $1 ere w _ m ao -Y4]0 nY „3 Y Y 1 Ati FY'aG A =YAt 5 FYN9 YE31 M9n io„ sass 7-si F ss—_,za«s y: cso—mss �4 F®WI Rk � f9'W� M.� M 1� m56 i bP�992K tABYa,�i50A �3M � lova Cy FY 2018 Budget P-evasal A6 1/10/2017 22 Communications Eliminate Communications Assistant (1.0) & 7.50 6.00 Clerical Assistant - Cable Tv (0.50) Finance Eliminate Budget Management Analyst (1.0) 4.15 3.15 Information Technology Solutions Architect 9.80 10.80 Services Neighborhood Reclassify hourly Historic Preservation 10,80 11.30 Development Services Planner to permanent 0.50 FTE Transportation & Fund Associate Director of Resource 3.00 400 Resource Management Management (1.0) Publlc Works -Streets Fund Maintenance Worker 1(2.0) 30.00 3200 TOTAL ALL Department FTE 599.59 60189 Strong Local Economy Increased funding for local food programs ($30,000) EBT/SNAP program at the Farmer's Market New community gardens and beginning gardener program Micro -loan resources and discretionary funding for small business incentives ($50,000) Urban Core New historic preservation grant program will facilitate residential properties located in historic districts ($40,000) Two TIF grants aimed at restoration of Englert Theatre and preserve historic elements of Film Scene operation ($1 million) • Contribution of $650,000 of General Fund dollars to City's affordable housing fund Sustainability • Increased funding for carbon emission reduction projects ($150,000) Gold bike -friendly certification, complete streets fund ($150,000) and bike master plan implementation Curbside composting and single -stream recycling loam City FY 2018 Budget Proposal 4e 1/10/2017 23 Healthy Neighborhoods Traffic calming initiatives in Northside neighborhood ($50,000) Form -based code project phase two ($150,000) PIN grants and Public Art program • Natural area management capabilities, street tree planting and ADA improvements Social Justice • Temporary winter homeless shelter Racial equity grant program and police traffic stop analysis Summer Fun pilot program included in standard Parks and Recreation operations • Recreation Supervisor role will expand support to underserved populations lora Oij-2018 audgot Pto,su1 3 If f 1 CTI a Mww • Utilities: Expect to see water rate increase in FY19 to assist with continued capital investments in the distribution syste in • One-time building permit revenue will drop off and reduce annual operating surplus • Backfill may come into play and tighten budgets considerably in future years • Uncertainty at the federal level may impact infrastructure funding and CBBG, HOME, Housing Authority, Airport, and/or Transit operations iMagry1.318aud as ;"' I 4, 1/10/2017 IL': 1/10/2017 Questions 49 03 � �