FY2024 Proposed Budget

delivery, land use, and housing affordability; and creates additional service demands, stresses transportation and utility infrastructure, and impacts critical quality of life factors. Prior to the pandemic, strong growth in our tax base allowed the City to absorb the necessary expenditure increases that accompany population growth and devote significant resources to new programs while weathering the implementation of the State of Iowa’s 2013 property tax reform. However, Fiscal Year 2023 represented the first year the City’s tax base actually shrunk due to both a plateau in development activity and larger tax rollbacks that reduced the taxable percentage of residential and multi-residential properties. Although Fiscal Year 2024 shows a slight increase in taxable values over Fiscal Year 2023 (+2.28%), this growth is much lower than the increases the City has experienced in recent two-year tax valuation cycles. In short, rising costs tied to inflation and service demands are outpacing the tax revenue collected. As previously mentioned, this stagnation in taxable value is compounded by the final year of the phased property tax reform. The taxability of multi-residential properties dropped by 7.26% from Fiscal Year 2023 to Fiscal Year 2024 and will now be taxed at the same rate as residential properties going forward. This represents millions in lost revenue annually that is not backfilled by the State. Additionally, about $1.5 million in annual backfill payments the State previously made to the City to compensate for lost commercial and industrial property tax revenue is now being phased out and will decrease by $308K annually until it is eliminated in Fiscal Year 2027. These factors make moving forward with cautious budgeting and strong reserves critical. Although the City benefits from a strong financial foundation, any additional financial stressors such as worsening inflation, new property tax reform legislation, natural disasters, or public health crises could tip the scales towards higher expenditure cuts, service level reductions, or rate increases. Fiscal Year 2024 Budget Overview The proposed Fiscal Year 2024 budget includes budgeted expenditures totaling $219,560,475. Of the total budget, $67,798,034 is for the General Fund, $65,637,220 is directed to Capital Projects and $56,338,944 is related to the operations of enterprise funds. A breakdown of the budget by fund type follows:

Fiscal Year 2024 Expenditure Comparison by Fund Type excludes transfers

$- $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $70,000,000 $80,000,000

Special Revenue

Debt Service Capital Projects

General

Enterprise

FY2024 $67,798,034

$56,338,944

$16,575,587

$13,210,690

$65,637,220

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