FY2022

Internal Service Fund Highlights Internal Service Funds serve needs that are internal to the City as an organization. These are non-budgetary funds and are an internal financing mechanism for operations such as vehicle replacement and information technology services. Expenditures made from these funds are charged back to departments. All funds are in good condition with healthy balances. Strong balances create reserves that can provide flexibility to deal with unexpected costs or opportunities. Looking Ahead In summary, this year’s budget was developed based on a conservative optimism that revenue levels impacted by the pandemic will begin to stabilize but also a recognition that the revenue sources will continue to be affected by 2013 reforms at the state level concerning commercial property taxes, the tax classification of multi-residential buildings, and the allowable growth percentage. The statewide changes will disproportionately affect growing communities with large multi-residential residential markets like Iowa City. Additionally, we are aware that the recent pace of development is not likely to be sustainable over the next few years. Although we must remain cognizant of these revenue trends, the City is currently in a secure financial position. While the permanent resources and positions added through the previous budget was a bold reflection of the economic climate during that time, this budget assumes a more status quo approach in order to maintain these previously established, excellent service levels. The Fiscal Year 2022 operating budget continues to prioritize funding for Strategic Plan initiatives and projects that support our community’s values. Capital investments continue to focus on addressing deferred maintenance and preparing to respond to new capital opportunities. It cannot be understated how rare the flexibility to invest millions of dollars in climate action initiatives, social justice and racial equity, affordable housing, historic preservation, and public health and crisis services is for a municipal government. These audacious undertakings are being accomplished as we continue to address deferred road, facility, and park maintenance, fill staff positions to serve a rapidly growing community, invest in healthy reserve funds, and tackle the challenge of aggressive multi-residential residential rollback rates. The ability to accomplish these goals simultaneously is an exceptional financial feat and our community should be very proud. The capacity to fund these initiatives is the direct result of decades of prudent financial planning by City Councils and staff. Conclusion and Acknowledgements This budget document reflects Iowa City’s focus on providing high quality municipal services in a fiscally responsible manner. It was crafted with guidance provided by the City Council through the Strategic Plan and adopted Master Plans. The City’s financial condition remains strong despite recent, unexpected challenges and our reserve levels provide sufficient flexibility in the event of such unexpected conditions. While property tax reform and unknown, long-term economic impacts from the pandemic will create funding challenges in the upcoming years, with proper planning and realistic priority setting, the City will be able to achieve our long-term goals.

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