FY2023 Budget At-a-Glance

City of Iowa City FY2023 Budget At-a-Glance July 1, 2022 to June 30, 2023

Chart series n Ptax Rate Rate % Change The budget is one of the most important documents the City prepar s because it identifies what services are provided and how they are financed. This Budg t At-a-Glance document summarizes the City’s budgeting methods, highlights revenues and expenses for Fiscal Year 2023 (FY2023) and provides an outlook for future years. Tax Value (millions) Val % Change Fiscal Year Iowa City Tax Rate Percent Change Taxable Valuation Percent Change Ptax receipts -3%

Ptax Receipts (miReceipts % Change

Percent Change

FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

12.992 12.653 12.796 13.133 13.851 14.758 16.813 17.596 17.314 17.729 17.302 17.297 17.717 17.853 17.757 17.842 17.269 16.805 16.705 16.651 16.583 16.333 16.183 15.833 15.773 15.673 15.633 14.85

1.13% 2.63% 5.47% 6.55% 0.62% 13.22% 4.66% -1.60% 2.40% -2.41% -0.03% 2.43%

0.77% $2,678,958,851 -0.54% $2,757,984,801 0.48% $2,848,162,606 -3.21% $2,960,112,178 -2.69% $3,036,012,368 -0.60% $3,136,795,629 -0.32% $3,182,641,961 -0.41% $3,421,386,133 -1.51% $3,542,852,278 -0.92% $3,745,477,705 -2.16% $3,923,114,214 -0.38% $4,258,178,148 -1.01% 4,396,149,689 $ -0.26% 4,375,956,427 $ $45,318,072 $45,318 3 Support households and businesses through the pandemic’s impact with stable utility rates, fees, and continued efforts to lower the City’s tax rate 4.74% 60,296,253 $ 8.54% 65,849,136 $ Preparation of the City budget was guided by the City’s primary financial goals: 1 Dedicate resources towards advancing City Council’s Strategic Plan priorities and adopted Master Plans 2 Seek fiscal stability and maintenance of service levels through competing financial pressures of the COVID-19 pandemic, the phase out of the property tax backfill, and the final years of the phased 2013 tax reform 2.95% $47,825,754 $47,826 5.53% 3.27% $49,542,640 $49,543 3.59% 3.93% $50,419,618 $50,420 1.77% 2.56% $50,051,578 $50,052 -0.73% 3.32% $51,496,352 $51,496 2.89% 1.46% $52,020,806 $52,021 1.02% 7.50% $55,357,358 $55,357 6.41% 3.55% $56,525,799 $56,526 2.11% 5.72% $59,173,825 $59,174 4.68% $60,296 1.90% $65,849 9.21% $66,526 10.33% $66,474 -0.08% 3.24% 66,525,928 $ -0.46% 66,474,472 $ $2,679 $2,758 $2,848 $2,960 $3,036 $3,137 $3,183 $3,421 $3,543 $3,745 $3,923 $4,258 $4,396 $4,376

Fiscal Year 2023 Budget Summary

Property Tax Rate vs. Valuations

17.5

$1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 Taxable Value (in millions)

17

► Priorities determined by Strategic Plan ► Budget guided by clear financial goals ► Focused on a sustainable, multi-year financial model ► Adopted property tax levy rate, $15.63 per $1,000 of taxable value • Rate decrease of $.04 from FY2022 • Eleventh consecutive rate decrease

16.5

16

15.5

$0 $500

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Tax Value (millions) $2,960 $3,036 $3,137 $3,183 $3,421 $3,543 $3,745 $3,923 $4,258 $4,396 $4,376 Val % Change 3.93% 2.56% 3.32% 1.46% 7.50% 3.55% 5.72% 4.74% 8.54% 3.24% -0.46% Ptax Rate 17.269 16.805 16.705 16.651 16.583 16.333 16.183 15.833 15.773 15.673 15.633 Rate % Change -3.21% -2.69% -0.60% -0.32% -0.41% -1.51% -0.92% -2.16% -0.38% -1.01% -0.26% 15

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Strategic Priorities and the Budget

The Fiscal Year 2023 budget was prepared with the strategic and master plans serving as a guide. The City recognizes the shared relationship between funding decisions and the organization’s prioritized plan. The Council’s Strategic Plan, updated every two years, intends to foster a more Inclusive, Just and Sustainable Iowa City by prioritizing the physical, mental and economic well-being of all residents.

The current Strategic Plan is available at icgov.org/StrategicPlan.

Community Input

This budget was developed based on feedback collected throughout the year from regular planning and engagement efforts, City Council listening posts, City board and commission recommendations, and direct input from stakeholders and residents to City Council and staff. This budget incorporates diverse priorities while adhering to financial best practices and planning for long-term community needs.

In 2017, the City adopted the Parks Master Plan and the Bicycle Master Plan. Each of these documents were developed through significant analysis and extensive community engagement. The identified Plan actions directly inform the Budget and Capital Plan priorities. Master Plan progress is regularly shared in the Strategic Plan Report. icgov.org/ParksRecMasterPlan | icgov.org/Project/Iowa-City-Bicycle-Master-Plan

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2

Continued Response to 2013 Property Tax Reforms

Several State property tax reform measures continue to increase pressure on the City’s budget:

Property Taxes $100,000 home ► Despite an increase in assessed value, the City anticipates zero growth in taxable valuations in the coming fiscal year, driven by the the lowest multi-family and residential rollback rates since Fiscal Year 2014. ► Ongoing financial impacts caused by COVID-19 include continued lags in revenue for some City services and higher cost of goods, services, and labor. ► Iowa City has taken steps to manage the impacts of tax reform, but maintaining service levels will require continued prudence over the next several years. 3 #VALUE! $814 $833 $866 $876 888 $ 909 $ 928 $ 922 $ $ Water-- 800 cubic feet $328 $328 $328 $328 $328 $328 $344 $362 $362 Sewer - 800 cubic feet $433 $433 $433 $433 $433 $433 $433 $433 $433 Refuse $174 $174 $186 $186 $186 $186 $191 $191 $191 Stormwater $24 $24 $24 $30 $36 $42 $42 $42 $54 Total #VALUE! Percent Change ► Reduced taxability in multi-residential property will be continue to be phased in through 2024 with an estimated $146 million loss in multi-residential taxable value in Fiscal Year 2023. The City does not receive reimbursement (backfill) from the State for this lost revenue. ► Beginning in 2023, commercial and industrial property tax backfill payments (which have historically totaled $1.5 million annually) will be phased out over a five-year period.

FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 F

930

$

900

$

$362

$380

$433

$433

$205

$229

$54

$54

$1,773 $1,804 $1,843 $1,859 $1,877 $1,919 $1,955 $1,962 $1,984 $1,996

1.7% 2.2% 0.9% 0.9% 2.3% 1.9% 0.3% 1.1% 0.6%

Maintaining a Moderate Tax and Fee Environment for Residents and Businesses Sharp increases in property taxes or fees for services can have a significant impact on families’ monthly budgets. We pursue efficient service delivery, review fees annually, and maintain adequate reserves in order to avoid severe, immediate impacts to residents’ household finances. Maintaining a stable environment for the controllable costs of doing business in our community helps to create an atmosphere conducive to business development and expansion. In FY2023, the Refuse rate includes a $3 monthly fee increase ($1.50 for Yard Waste, $0.50 for Recycling, and $1 for Refuse) to support the heightened demand and costs of these services.

$1,000 $1,500 $2,000 $2,500 Annual Financial Impact to Residential Households

-$500 $0 $500

FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 $922 $930 $900 $901 $869 $884 $846

Property Taxes

Stormwater

$54

$54

$54

$60

$60

$60

$60

Refuse $191 $205 $229 $229 $240 $240 $276 Sewer - 800 cubic feet $433 $433 $433 $433 $433 $433 $433 Water-- 800 cubic feet $362 $362 $380 $399 $399 $419 $419 Total $1,962 $1,984 $1,996 $2,022 $2,001 $2,036 $2,034 Percent Change 0.3% 1.1% 0.6% 1.3% -1.1% 1.8% -0.1%

*Property taxes based on house value of $100,000 **FY18 r fuse does not reflect new yard waste fee structure

*FY18 refuse does not reflect new yard waste fee structure

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Sources 1%

Charges for Fees & Services 2%

ental

Miscellaneous 11%

General Fund Revenues & Other Financing Sources excludes transfers FY2023 Rev nues & Other Fi a cing Sources excludes transfers

General Fund Highlights

oney & rty

Other Financing Sources 1%

Property Taxes 69% The General Fund is the City’s primary operating fund and represents approximately one-third of the total budget. A breakdown of revenue sources is provided in the chart to the right. On the expense side, General Fund operations largely consist of personnel expenses. In the FY2023 budget, 75% of General Fund expenditures are personnel related. A breakdown of expenditures by category is provided in the chart below.

ermits

Charges for Fees & Services 2%

er City Taxes 4%

Miscellaneous 11%

Intergovernmental 7%

Use of Money & Property 1%

Licenses & Permits 4%

Property Taxes 69%

Other City Taxes 5%

neral Fund Expenditures by Category

General Fund Expenditures by Category excludes transfers

General Fund Expenditures by Category excludes transfers

General Fund activities include the following departments and activities:

Services 18%

Neighborhood & Development Services Parks & Recreation Library

City Council City Clerk City Attorney City Manager Finance Police Fire

Contingency 1% Supplies 3% Capital Outlay 3%

Senior Center Public Works Transportation Services Administration

Personnel 75%

The General Fund FY2023 budget also incorporates new programs and initiatives intended to address the City Council’s strategic plan priorities, including those that meet sustainability, inclusivity, and social justice goals. Items of note include:

► $1 million for the Affordable Housing Fund ► Use of Emergency Levy to fund Climate Action Plan implementation including energy efficiency facility improvements, business incentives, and $60,000 in community grants ► Continued micro-loan resources and funding for small businesses and a new committment of $25,000 set aside for BIPOC business growth and entrepreneurship ► Increase of the Racial Equity Grant Program to $100,000 ► Accessibility improvements including sidewalk and curb ramp improvements, City park and facility improvements, closed captioning technology, and sponsorship for the annual ADA Celebration

► Additional $35,000 to expand the community’s crisis response efforts ► 3% increase to annual Aid to Agencies program (bringing the total to $100,000 for FY2023) ► 5% increase to the Aid to Agencies Grant Program ► Funding to provide fair housing testing and training in compliance with federal, state, and local discrimination laws ► Diverse arts, culture, and recreation opportunities including sponsorship funding for community events such as Juneteenth and MLK Day celebrations ► Addition of an outreach budget for the Community Police Review Board

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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 FY2023, the City’s outstanding debt is projected to be $65 million. This equates to 0.90% 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’s debt service levy remains unchanged from the prior fiscal year.

► Total outstanding debt is trending downward - FY2023 anticipates a decrease of $1.4 million from FY2021 in total outstanding debt by year end. ► Future general obligation bond issues, including 2% for bond issuance costs, are estimated at $10.3 million for both FY2023 and FY2024.

General Bonded Debt Outstanding and Percent of Total Valuation

$80.00

1.60%

$70.00

1.40%

$60.00

1.20%

$50.00

1.00%

$40.00

0.80%

$30.00

0.60%

Millions of Dollars ($)

$20.00

0.40%

$10.00

0.20%

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 *FY22 *FY23 *FY24 GO Bonds Outstanding $61.21 $67.08 $62.00 $57.88 $66.85 $66.95 $67.40 $68.2 $66.7 $65.8 $65.3 $67.1 Percent of Total Valuation 1.33% 1.44% 1.28% 1.17% 1.25% 1.22% 1.14% 1.11% 0.97% 0.94% 0.90% 0.91% 0.00% $-

*Budgeted and projected amounts

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Capital Improvement Plan (CIP) Highlights

Many of the CIP projects planned are in response to feedback from residents desiring more funding for road improvements and transportation needs. The five-year program continues to reflect the City Council’s priorities established in previous fiscal years, including implementation of master plans. Summaries of the Parks and Bicycle Master Plan projects are provided on the following pages. Examples of other significant projects planned for the coming calendar years include: 2022 ► Chadek Green Park improvements ► Court Hill Park improvements ► North Westminster Storm Sewer ► Parking ramp automated equipment ► Senior Center exterior improvements ► Whispering Meadows Ecological Restoration ► Rochester Avenue reconstruction (First Ave to Ralston Creek) ► Fairchild Street Reconstruction

$47,356,220 $205,848,950

Capital Budget FY2023

Five-year Capital Improvement Plan (CIP) 2022-2026

► College Green Playground Replacement ► River Street Storm Sewer improvements

► Court Street Reconstruction ► Fire Apparatus Replacement

2025 ► City Park pool replacement ► Senior Center interior improvements ► Dodge Street reconstruction ► Park Road reconstruction ► North Gilbert Street reconstruction ► Airport Apron Expansion ► Upper City Park improvements ► Hickory Hill Park shelters and restrooms 2026 ► Library furnishings replacement ► Highway 6 trail extension ► Taft Avenue reconstruction ► Napoleon Park softball field renovation ► Melrose Water Main ► N. Market Square playground ► S. Dubuque St. reconstruction ► Market & Jefferson two-way conversion

2023 ► Kiwanis Park improvements ► Gilbert Street Bridge replacement ► Hunter’s Run Park improvements ► Willow Creek Trail replacement ► Landfill Cell development ► Dubuque Street reconstruction ► Iowa Avenue Bridge rehabilitation ► Riverside Dr. pedestrian bridge rehab ► Wastewater Digester Complex rehab ► Rohret South Sewer expansion

2024 ► Equipment Maintenance building replacement ► Palisades or Stone Bridge Park

► Lower City Park shelters & restroom ► Terrell Mill Skate Park redevelopment

*Although projects are planned to begin in the listed year, many will span multiple years

For more information about the Iowa City budget, including full budget and historical budget documents, visit icgov.org/Budget

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How is the Annual City Budget Developed? Iowa City’s financial planning and budget cycle takes nearly a full year to complete. Although the activities below focus specifically on the budget development, the community has a continued role in this process through their involvement in City programs and plan creation. Feedback and comments received from our community throughout the year directly shape the budget requests submitted by departments and elected officials. See below for a summary of how the City budget is created and adopted. ► City Council holds an initial work session to discuss budget goals and identify major initiatives, projects, or programs that they would like to see in the next year’s budget ► All City divisions review performance measures and goals as well as their alignment with the City Council’s Strategic Plan September ► Capital Improvement Program (CIP) needs, such as road, park, and water system improvements, are assessed and submitted by all City Departments October ► A Capital Improvement Program review committee evaluates and amends the CIP projects submitted in September and produces a preliminary and final Five-Year CIP proposal ► Departments review fiscal policies and priorities, instruct staff on budget prep, and begin submitting amendments for the present fiscal year along with budget requests for the next fiscal year November ► City budget team meets with each department to discuss their fiscal year requests, prior year revised budgets, performance measures, and goals ► Finance Department reviews and updates long range City financial plans, identifies significant budget issues and prepares summaries December ► Budget team finalizes department fiscal year budget requests, current fiscal year revised budgets, Five Year CIP, division goals and performance measures, and long range financial plans ► A preliminary City budget document including the Three-Year Financial Plan, Five-Year CIP, and division goals and performance measures is distributed to City Council and the public for review January ► City Manager and all departments present City Council and the public an overview on budget process, the fiscal environment, and the proposed budget and Capital Improvement Program February ► City budget is made available for public review online and in-person at City Hall and the Iowa City Public Library ► A public hearing is held on the proposed maximum property tax levy for certain levies. Following public hearings, City Council approves Maximum Property Tax Levy Resolution for certain levies. Month Activity August

March

► A public hearing is held on the proposed budget and the prior fiscal year’s revised budget ► Following public hearings, City Council approves financial documents ► By Iowa State law, the adopted budget and prior fiscal year revised budget must be certified with the Johnson County Auditor by March 31 ► City Council sets hearings for service fee and rate changes for the upcoming fiscal year, if any are proposed in the approved budget

July

► New fiscal year begins annually on July 1

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