FY2022

The State of Iowa limits city debt to no more than 5% of the total assessed value of taxable property within the corporate limits as established by the City Assessor. The budget anticipates an outstanding debt of $68 million at Fiscal Year 2022 year-end, which is less than 1% of total valuations and well below the State of Iowa threshold. Considering these figures, Iowa City is carrying debt equal to roughly 19% of the allowable level. Iowa City's internal fiscal policy specifies that the debt service levy shall not exceed 30% of the total property tax levy. The Fiscal Year 2022 budget includes a debt service levy that is approximately 16% of the total levy. The proposed budget recommends a reduction in the debt service levy of $0.10. The chart below tracks outstanding general obligation and TIF revenue debt and outstanding debt as a percentage of total valuations.

General Bonded Debt Outstanding and Percent of Total Valuation

1.60%

$80.0

1.40%

$70.0

1.20%

$60.0

1.00%

$50.0

0.80%

$40.0

0.60%

$30.0

Millions of Dollars ($)

0.40%

$20.0

0.20%

$10.0

The budget continues to reflect prudent borrowing practices, which help preserve financial flexibility and ultimately lower the cost of borrowing. Over the last several years, Iowa City has worked to reduce its debt load, which in turn has allowed the City to devote more financial resources to service delivery and fewer resources to interest payments. Recent early general obligation bond redemptions include $2.1 million in Fiscal Year 2016, $2.2 million in Fiscal Year 2017, $5.5 million in Fiscal Year 2018, and $3.9 million in Fiscal Year 2019. These early redemptions save the City a significant amount in interest expense, allowing these funds to be used to support public services rather than servicing debt payments. FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 *FY21 *FY22 *FY23 Debt (millions) $61.2 $67.1 $62.0 $57.9 $66.8 $66.9 $67.4 $68.2 $66.8 $68.0 $69.1 % of Val 1.33% 1.44% 1.28% 1.17% 1.25% 1.22% 1.14% 1.11% 0.97% 0.96% 0.95% 0.00% $0.0

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