FY26 Proposed Budget

been uncommon to see capital project budgets increase by 20% or more due to cost increases driven by labor supply, inflation, and supply chain disruptions. As such, we are buying less with our dollars and relying on reserves to keep projects moving forward without even more costly delay and disruption to the community. Each year, significant resources are committed to annual capital projects including water and sewer main improvements, vehicle replacements, roadway maintenance, facility projects, and curb ramp upgrades. Examples of recurring projects in this five-year Capital Improvement Plan include bicycle master plan implementation, annual tree plantings, bus stop improvements, and accessibility projects. Other examples of significant projects that align with Council priorities and are budgeted in the 2025-2029 Capital Improvement Program include (many span multiple years).

 City Park Pool replacement  Fire Department apparatus replacement

 Court Street reconstruction  N. Gilbert Street reconstruction  N. Dodge / ACT Circle signalization  Wastewater digester complex rehab  North Market Square Park playground  Columbarium expansion  Senior Center interior improvements  City Park shelters & restrooms  Napolean Park ball fields renovation  Taft Avenue reconstruction  Ground storage reservoir upgrade  Camp Cardinal pedestrian island  Iowa Avenue improvements  Napoleon lift station improvements  Benton Street trunk sewer  Water Plant treatment upgrades  Reno Street Park improvements  Tower Place ramp drainage repair  Collector Well upgrade  Carson Lake buildout

 Landfill compost pad expansion  Westside parkland acquisition  Equipment building replacement  Transit building replacement  Library carpet and furnishings  Animal Shelter training annex

2025

 River Street storm sewer  Highway 6 trail extension  Palisades Park buildout

2026

 Mercer Park shelter replacement  Dodge Street reconstruction

2027

 Benton Hill Park playground  Highway 1 & 6 / Riverside Trail  Market & Jefferson two-way conversion  Landfill northeast cell expansion  Landfill horizontal gas collectors  Harlocke Hill Park playground  Burlington Street bridge replacement

2028

 East elevated water storage  Wastewater plant upgrades

2029

Debt Service

Staff is projecting General Obligation (G.O.) bond issues of $14.29 million in FY 2025 and $13.83 million in FY 2026. The use of G.O. bonds is required to carry out the planned capital projects. This level of bonding projected is well below the thresholds established by the State and is consistent with Iowa City’s debt policies. 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 City Council’s Debt Management policy follows best practices for Aaa rated communities and aims to limit outstanding general obligation and tax increment revenue bonded debt to no more than 0.75% of total assessed property valuations. The budget anticipates outstanding debt of $65.7 million at FY 2026 year-end, which is approximately 0.77% of total valuations and equal to roughly 15.4% of the allowable debt level established by the State.

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