FY2022

in the taxable percentage of residential properties. No new utility fee increases or revenue sources are being recommended. Community Fiscal Health and Outlook Iowa City benefits from a strong local economy anchored by the presence of the University of Iowa and the University of Iowa Hospitals and Clinics. The local economy consists of a diverse set of successful industries that together help sustain one of the most consistent stretches of low unemployment rates in the nation. As an organization, the City has a rich tradition of responsible budgeting policies that has created a strong financial foundation, which has helped the community weather past economic recessions while sustaining service delivery and continues to serve as a cornerstone for current pandemic impacts and the community’s future. In 2020, Moody’s Investors Service reaffirmed its highest quality bond rating (Aaa) for the City’s general obligation debt with a stable outlook, citing “the city’s very strong liquidity and fund balance that is supported by ample revenue raising flexibility … reflects our expectations that the city’s financial position will remain sound. The city’s strong liquidity and budget management will help it mitigate the impacts of slowed economic activity because of the coronavirus outbreak. ” The Moody’s report notes factors that could potentially drop the City’s bond rating include significant and sustained reduction in operating reserves or liquidity or growth in pension or debt burdens. Our bond rating is the product of prudent budgeting and long-range financial planning. Ultimately, our strong financial position lowers the cost of borrowing and ensures more of our community’s dollars are spent on service delivery, infrastructure, and Council’s Strategic Plan priorities, rather than interest payments. Despite the stable financial position of the organization, the public should be aware of the trends, pressures and opportunities that are shaping Iowa City in various fashions. Our community has many attributes that attract new residents to our city. A strong job market, good schools that are benefitting from significant capital investments, and diverse cultural amenities all contribute to the desirability of our area for families, retirees, and young professionals to make their permanent homes. New residents, including students, bring a social and economic vibrancy that helps define Iowa City. The City Council has adopted several policies and initiatives in recent years to maintain and enhance our positive attributes, considering this population growth. However, population growth has a profound effect on service delivery, land use, and housing affordability and creates additional service demands, stresses transportation and utility infrastructure, and impacts critical quality of life factors. Fortunately, growth in our tax base in recent years has allowed the City to weather state property tax reforms implemented thus far and devote significant resources to new programs and grants while maintaining top notch service delivery. However, we have seen a significant decline in development due to the pandemic and it should not be assumed that we will quickly return to our strong, historical rate of growth. Looking ahead, it is anticipated the resulting stagnation or decrease in taxable value may align with what may be a more drastic multi-residential rollback percentage in the final year of property tax reform implementation. These compounding influences will challenge the City’s budget in upcoming years. For this reason, it is imperative that Iowa City continue to move forward with cautious budgeting and strong reserves that can help soften the blow of a drawn-out recovery or sudden revenue losses or expenditure jumps. With this approach, I am confident Iowa City can not only

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