FY2022 Budget At-a-Glance

Debt Service Fund Highlights

A reduction in the debt service levy means Iowa City spends less on interest payments and more on providing services to the community. Communities who adhere to responsible debt policy and have limited debt are attractive to ratings agencies like Moody’s. A good bond rating, like Iowa City’s Aaa rating, makes it easier to borrow at lower rates of interest, ultimately saving thousands or millions of taxpayer dollars over the life of a bond. At the end of FY2022, the City’s outstanding debt is projected to be $68 million. This equates to 1% of total valuations, well below the State of Iowa threshold. ► The State of Iowa gives cities the authority to establish a debt service fund and levy taxes to pay for principal and interest on general obligation bonds issued by their city. ► Iowa City reduced its debt service levy for FY2022 by $0.10 from the FY2021 levy.

► Total outstanding debt is trending downward - FY2022 anticipates a decrease of $1.1 million from FY2020 in total outstanding debt by year end. ► Future general obligation bond issues, including 2% for bond issuance costs, are estimated at $11.4 million for FY2021 and $12.4 million for FY2022.

General Bonded Debt Outstanding and Percent of Total Valuation

70

1.60%

68

1.40%

66

1.20%

64

1.00%

62

0.80%

60

0.60%

58

Millions of Dollars ($)

0.40%

56

0.20%

54

0.00%

52

FY13 FY14 FY15 FY16 FY17 FY18 FY19 *FY20 *FY21 *FY22

Debt (millions)

61

67

62

58

67

67

67

68

68

69

% of Val

1.33% 1.44% 1.28% 1.17% 1.25% 1.22% 1.14% 1.11% 0.99% 0.97%

*Budgeted and projected amounts

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