FY2024 Proposed Budget

General Bonded Debt Outstanding and Percent of Total Valuation

80

1.60%

70

1.40%

60

1.20%

50

1.00%

40

0.80%

30

0.60%

Millions of Dollars ($)

20

0.40%

10

0.20%

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. 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 saved the City a significant amount in interest expenses, which means money is spent on service delivery rather than debt payments. 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. Looking Ahead In summary, although this year’s budget is built on a strong foundation of several years of prudent financial decision-making, the City has entered some of the most challenging budgetary years in recent history. State level property tax reforms, a sharp decline in taxability of multi-family properties, plateauing taxable property values, and high costs due to labor shortages, supply chain issues, and general inflation are putting significant strains on City finances. The statewide reforms have disproportionately affected growing communities with large multi-residential residential markets like Iowa City and threats of new property tax reform measures through the upcoming legislative session could worsen conditions. FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 *FY23 *FY24 *FY25 Debt (millions) 67 62 58 67 67 67 $68.2 67 66 64 68 70 % of Val 1.44% 1.28% 1.17% 1.25% 1.22% 1.14% 1.11% 0.97% 0.94% 0.89% 0.91% 0.92% 0.00% 0

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