FY27 Proposed Budget

PROPOSED BUDGET CITY OF IOWA CITY, IOWA

FY2026-2028 Financial Plan

2026-2030 Capital Improvement Plan

FY2027

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SPOTLIGHT

2025 AT A GLANCE

26 regular season markets 127 regular season vendors 26 market music acts 2 holiday markets 81 holiday market vendors 10 partner outreach groups

IOWA CITY FARMERS MARKET SATURDAYS, MAY-OCT 7:30 A.M. -12 P.M.

The Iowa City Farmers Market is a vibrant, open-air, seasonal market located in the Chauncey Swan Parking Ramp and along E. Washington Street in Downtown Iowa City. Operated by the Iowa City Parks and Recreation Department, the market runs from May through October and is committed to serving the entire community by providing a gathering space and offering convenient access to fresh, locally produced goods.

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City of Iowa City Proposed Budget for the Fiscal Year Ending June 30, 2027 & FY2026–2028 Financial Plan

Council:

Bruce Teague Mayor At-Large

Megan Alter Mayor Pro-Tem At-Large

Oliver Weilein District C

Shawn Harmsen District B

Laura Bergus District A

Joshua Moe At Large

Mazahir Salih At Large

City Manager Geoff Fruin

Deputy City Manager Chris O’Brien

Assistant City Mgr Kirk Lehman

Finance Director

Assistant Finance Director

Nicole Davies

Jacklyn Fleagle

Budget Management Analyst

Risk & Finance Assistant

Angie Ogden

Michelle Cook

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GOVERNMENT FINANCE OFFICERS ASSOCIATION Distinguished Budget Presentation Award

PRESENTED TO

City of Iowa City Iowa For the Fiscal Year Beginning July 01, 2025

Executive Director

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CITY OF IOWA CITY, IOWA

FY2027 Proposed Budget

FY2026 – 2028 Financial Plan 2026 – 2030 Capital Improvement Plan

TABLE OF CONTENTS

PAGE

Introduction City Manager Address….....................................................................................................…......................................................................................................... 10 Strategic Plan…..............................................................................................................................….............................................................................................. 32 Other Planning Processes…..............................................................................................................................….......................................................................... 34 General Information…..............................................................................................................................….................................................................................... 37 Economic Overview…..............................................................................................................................….................................................................................... 41 Organizational Chart …..............................................................................................................................….................................................................................. 45 Department Summaries…..............................................................................................................................….............................................................................. 46 Budgetary Fund Structure…..............................................................................................................................…........................................................................... 240 Departments and Divisions by Fund…..............................................................................................................................…........................................................... 243 Financial Summary Preparation of the Financial Plan…..............................................................................................................................…............................................................... 247 Financial and Fiscal Policies…..............................................................................................................................…...................................................................... 253 Long Range Financial Planning…..............................................................................................................................…................................................................. 260 All Funds: Fund Summaries…..............................................................................................................................….................................................................................. 264 Revenue Summary by Fund…..............................................................................................................................…................................................................ 269 Revenue Summary by Type…..............................................................................................................................…................................................................ 270 Expenditure Summary by Fund…..............................................................................................................................…........................................................... 272 Expenditure Summary by Department…..............................................................................................................................…................................................ 273 Inter Fund Transfer Schedules…..............................................................................................................................…............................................................ 274 Personnel Full-Time Equivalents …..............................................................................................................................…............................................................... 277 General Fund General Fund Summary…..............................................................................................................................….............................................................................. 281 Assigned, Committed & Restricted Fund Balance…..............................................................................................................................…..................................... 293 General Fund Revenues…..............................................................................................................................…............................................................................. 294 General Fund Expenditures…..............................................................................................................................…........................................................................ 295 City Council…..............................................................................................................................…................................................................................................. 296 City Clerk…..............................................................................................................................…..................................................................................................... 296 City Attorney…..............................................................................................................................…................................................................................................ 297 City Manager: City Manager’s Office…..............................................................................................................................…........................................................................... 298 Communications Office…..............................................................................................................................…........................................................................ 299 Human Resources…..............................................................................................................................…............................................................................... 300 Human Rights…..............................................................................................................................…...................................................................................... 300 Economic Development..............................................................................................................................….......................................................................... 301 Climate Action and Outreach…..............................................................................................................................…............................................................... 302 Finance Department: Finance Administration…..............................................................................................................................…........................................................................ 303 Accounting …..............................................................................................................................….......................................................................................... 304 Purchasing…..............................................................................................................................…........................................................................................... 305 Revenue…..............................................................................................................................…............................................................................................... 305 Police Department: Police Administration…..............................................................................................................................…........................................................................... 306 Support Services…..............................................................................................................................….................................................................................. 306 Field Operations…..............................................................................................................................…................................................................................... 309

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Fire Department: Fire Administration…..............................................................................................................................…............................................................................... 311 Emergency Operations…..............................................................................................................................…........................................................................ 311 Fire Prevention…..............................................................................................................................…..................................................................................... 312 Fire Training…..............................................................................................................................…......................................................................................... 312 Parks & Recreation: Parks & Recreation Administration…..............................................................................................................................…...................................................... 313 Government Buildings…..............................................................................................................................…......................................................................... 313 Recreation…..............................................................................................................................…............................................................................................ 314 Park Maintenance…..............................................................................................................................…................................................................................ 314 Cemetery Operations…..............................................................................................................................…........................................................................... 317 Library: Library Operations…..............................................................................................................................…............................................................................... 318 Library Development Office…..............................................................................................................................…................................................................. 320 Senior Center: Senior Center Operations…..............................................................................................................................….................................................................... 321 Neighborhood & Development Services (NDS): NDS Administration…..............................................................................................................................….............................................................................. 322 Neighborhood Services…..............................................................................................................................…....................................................................... 323 Development Services…..............................................................................................................................…......................................................................... 324 Public Works: Public Works Administration…..............................................................................................................................…................................................................ 325 Engineering…..............................................................................................................................….......................................................................................... 326 Transportation Services: Transportation Administration…..............................................................................................................................….............................................................. 327 Special Revenue Funds Community Development Block Grant (CDBG) …..............................................................................................................................…........................................ 329 HOME Grant…..............................................................................................................................…............................................................................................... 331 Road Use Tax Fund (RUT) …..............................................................................................................................…........................................................................ 333 Road Use Tax Operations…..............................................................................................................................…................................................................... 336 Local Option Sales Tax…..............................................................................................................................…............................................................................... 340 Other Shared Revenues…..............................................................................................................................…............................................................................. 345 Metropolitan Planning Organization of Johnson County (MPOJC) …..............................................................................................................................….......... 347 Metropolitan Planning Organization of Johnson County Operations…..............................................................................................................................….. 348 Employee Benefits Fund…..............................................................................................................................…............................................................................. 349 Emergency Levy Fund…..............................................................................................................................…................................................................................ 353 Affordable Housing Fund…..............................................................................................................................…............................................................................ 355 Iowa City Property Management Fund…..............................................................................................................................…....................................................... 358 Tax Increment Financing (TIF) Districts…..............................................................................................................................…..................................................... 364 Self-Supporting Municipal Improvement District (SSMID)…..............................................................................................................................…......................... 370 Debt Service Fund Debt Service Fund Summary…..............................................................................................................................…...................................................................... 373 Debt Schedules…..............................................................................................................................…........................................................................................... 378 Parking Fund Summary…......................................................................................................................................................................................................... 392 Parking Operations…..............................................................................................................................….............................................................................. 397 Transit: Transit Fund Summary…..............................................................................................................................…........................................................................ 399 Transit Operations…..............................................................................................................................…............................................................................... 404 Wastewater: Wastewater Fund Summary…..............................................................................................................................…................................................................ 406 Wastewater Treatment Operations…..............................................................................................................................…..................................................... 411 Wastewater Debt Service…..............................................................................................................................….................................................................... 414 Water: Water Fund Summary…..............................................................................................................................….......................................................................... 416 Water Operations…..............................................................................................................................…................................................................................. 420 Water Debt Service…..............................................................................................................................….............................................................................. 424 Enterprise Funds Parking:

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Refuse Collection: Refuse Collection Fund Summary…..............................................................................................................................…....................................................... 427 Refuse Collection Operations…..............................................................................................................................….............................................................. 432 Landfill: Landfill Fund Summary…..............................................................................................................................…........................................................................ 434 Landfill Operations…..............................................................................................................................…............................................................................... 439 Airport: Airport Fund Summary…..............................................................................................................................…......................................................................... 441 Airport Operations…..............................................................................................................................…................................................................................ 444 Stormwater: Stormwater Fund Summary…..............................................................................................................................…................................................................. 445 Stormwater Operations…..............................................................................................................................…........................................................................ 449 Housing Authority: Housing Authority Fund Summary…..............................................................................................................................…....................................................... 450 Housing Authority Operations…..............................................................................................................................….............................................................. 452 Capital Projects Fund Fund Summary…..............................................................................................................................…............................................................................................ 456 Summary by Category (Division)…..............................................................................................................................…................................................................ 459 Summary by Funding Source…..............................................................................................................................…..................................................................... 465 Project Listing…..............................................................................................................................….............................................................................................. 477 Project Summary by Name…..............................................................................................................................…......................................................................... 481 Unfunded Projects…..............................................................................................................................…...................................................................................... 608 Equipment Fund Summary…..............................................................................................................................….................................................................. 624 Equipment Operations…..............................................................................................................................…......................................................................... 626 Risk Management: Risk Management Fund Summary…..............................................................................................................................…...................................................... 629 Risk Management Operations:…..............................................................................................................................…............................................................ 630 Information Technology Services (ITS): ITS Fund Summary…..............................................................................................................................….............................................................................. 631 ITS Operations…..............................................................................................................................…..................................................................................... 632 Central Services: Central Services Fund Summary…..............................................................................................................................…......................................................... 635 Central Services Operations…..............................................................................................................................…................................................................ 636 Health Insurance Reserve….............................................................................................................................. 637 Dental Insurance Reserve….............................................................................................................................. 639 Statistics U.S. Census Data…..............................................................................................................................…....................................................................................... 642 Revenue Comparisons: Property Tax …..............................................................................................................................…........................................................................................ 643 General Fund…..............................................................................................................................…....................................................................................... 643 Hotel/Motel Tax …..............................................................................................................................…................................................................................... 644 Utility Franchise Tax Rates…..............................................................................................................................….................................................................. 644 Utility Rates…..............................................................................................................................….......................................................................................... 644 Property Tax Levies…..............................................................................................................................….................................................................................... 645 Property Tax Valuations…..............................................................................................................................….............................................................................. 646 Principal: Taxpayers…..............................................................................................................................…............................................................................................. 648 Employers…..............................................................................................................................…............................................................................................ 649 Sewer Customers…..............................................................................................................................…................................................................................ 650 Water Customers…..............................................................................................................................…................................................................................. 651 Internal Service Funds Equipment:

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Operating Indicators…..............................................................................................................................….................................................................................... 652 Department Statistics: Police…..............................................................................................................................….................................................................................................... 653 Fire…..............................................................................................................................…....................................................................................................... 656 Library…..............................................................................................................................….................................................................................................. 658 Senior Center…..............................................................................................................................…....................................................................................... 663 Transportation Services…..............................................................................................................................…....................................................................... 666 Neighborhood & Development Services…..............................................................................................................................…............................................. 668 Appendix Department Expenditure Comparison to State Forms…..............................................................................................................................…........................ x Budget Resolutions…..............................................................................................................................….............................................................................. x State Forms…...................................................................................................................................…..................................................................................... x Changes from Proposed to Final Budget…...........................................................................................…............................................................................... x Transfer Resolution…............................................................................................................................................................................................................... x State Property Tax Reform Impact Summary…..............................................................................................................................…...................................... x Glossary…..............................................................................................................................…............................................................................................... 671

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City Manager Address

Strategic Plan

Other Planning Processes General Information Economic Overview Organizational Chart Department Summaries Budgetary Fund Structure Departments & Divisions by Fund

F Y 2 0 2 7

I ntroduction

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To the Honorable Mayor and City Council Members,

It is my pleasure to submit Iowa City's operating and capital budget for the fiscal year ending in 2027 (i.e. FY 2027). Although Iowa Code only requires formal adoption of an annual budget, we have included a three-year financial plan (FY 2026-2028) and five-year Capital Improvement Program (2026-2030) for planning purposes. Any future modifications to this budget will be fully disclosed through formal City Council action at public meetings, in accordance with State law. This budget aims to provide resources to deliver reliable and efficient municipal services, invest in critical infrastructure, further strategic plan priorities, and implement adopted master plans rooted in public input. The budget also contains prudent contingency line items and reserves which aid the City in weathering both unanticipated expenditures and revenue shortfalls. The FY 2027 budget was developed in a challenging economic environment driven by several compounding factors. Voter approval of a 1% Local Option Sales Tax, effective July 1, 2026, provides important flexibility in managing fiscal pressures, but careful financial decisions remain essential to ensuring the reliability of high-quality core municipal service delivery into the future. The City must exercise caution when considering any discretionary expenditure growth, particularly in recognition of strong state-level commitments to enact further property tax reform. The fiscal environment facing Iowa City remains challenging, though positive valuation growth and the new voter-approved Local Option Sales Tax (LOST) provide an improved outlook compared to FY 2026. Past State property tax reform legislation has stressed the City’s ability to deliver core services to a growing community while investing in value-add activities and external partnerships. At the same time, the City’s taxable valuation has failed to keep pace with inflationary costs of service delivery and infrastructure in recent years. Fortunately, the City has been able to navigate these challenges thanks to past financial decisions. The LOST will also allow both an expansion of efforts to address key City Council priorities, as well as bolster investment in infrastructure and public facilities and provide critical relief to the General Fund. However, the future remains uncertain. Additional property tax reforms are a clear priority for the Governor and State Legislature and federal funding support is increasingly unpredictable. As such, the FY 2027 budget responds to short-term needs while positioning for long-term stability. Iowa City’s current financial position is constrained by years of property tax reforms enacted by the State that significantly reduced taxable valuation, eliminated property tax levies, and increased exposure to volatile rollback rates. Beginning in 2013, State law reduced multi-family taxability from 100% of assessed value to the historically low residential rollback rate of 44.5% in FY 2027 which is the second lowest since it was established in 1978. The impact is particularly significant for Iowa City as multi-family properties are a significant portion of our tax base, resulting in a loss of tens of millions of dollars of City revenue while subjecting more than 80% of the City’s total valuation to the annual fluctuations of the residential rollback rate. Property tax reforms also lowered commercial and industrial taxability to 90% of assessed value, and state backfill payments that initially reimbursed the City for $1.5 million in losses have been fully eliminated. Subsequent legislation in 2022 converted the State Business Property Tax Credit to a partial Fiscal Environment

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property tax exemption shifting the expense to cities, and while backfill support of $700,000 was committed through FY 2029, State projections indicate that funding may fall short. In 2023, new property tax reforms consolidated several levies and phase them out by FY 2029 if not sooner based on forced reductions that penalize taxable growth. In Iowa City, this means the former Library and Emergency property tax levies which totaled $0.47 per $1,000 of taxable property valuation and generated nearly $2 million in FY 2024 have been absorbed into the General Fund, creating more demand on limited financial resources. New and expanded tax exemptions for seniors and veterans from the 2023 legislation remove another $27.7 million in taxable valuation for FY 2027. The cumulative effect of these reforms is substantial and will not be fully realized until FY 2029. Despite this, another round of property tax reform appears certain, which means the City must be careful not to overcommit resources in FY 2027. The financial strain to City revenue is apparent and is exacerbated by macroeconomic forces. The City’s taxable valuation declined consecutively in FY 2023 and 2024 despite an overall growth in assessed valuations, and while this flipped to modest growth in FY 2025 and 2026, it has not been robust enough to sustain current service levels into the future. Similar trends are present in FY 2027. Because property taxes make up two thirds of General Fund revenue, it will be critical to monitor its health and maintain fiscal discipline to protect service delivery. Meanwhile, inflationary pressures and tariff volatility increase operating and capital costs and diminish purchasing power. Further budgetary pressures such as an economic recession or reductions in federal funding may impact service levels in the coming years. The City is grateful and encouraged by the voter approval of a 1% LOST that is expected to generate $14 million annually in new revenue. Not only will this allow an expansion of the City’s efforts to address key City Council priorities, but it also provides a sustained funding source for select proven programs piloted using American Rescue Plan Act (ARPA) dollars, and it allows critical relief to the strained General Fund which protects the City’s ability to continue providing core services. With this budget, LOST also facilitates a $0.20 reduction to the City’s overall property tax levy rate, which helps to offset the cost of two proposed utility rate increases that are necessary to ensure the health and stability of our water and wastewater enterprises. More details about the LOST allocation are provided in a subsequent section. The “Fiscal Year 2027 Budget Overview” section of this letter details the City’s tax and fee rates and debt strategy. For FY 2027, this includes a need to build capacity in the debt service fund with the assistance of LOST dollars to help the City maintain and expand critical investment in infrastructure in the face of diminishing purchasing power resulting from inflation affecting capital projects. However, the financial strategies in this budget are not adequate to meet strategic plan goals to increase the Emergency Fund balance by 5% annually, nor do they bolster the Facility Reserve, another strategic plan goal. While an unanticipated surplus in FY 2025 allows for contributions of $162,400 to the Emergency Fund and $5 million to the Facility Reserve fund, they are not systemic and should not be anticipated in the future. The Emergency Reserve Fund balance is projected to be nearly $5.6 million, and the Facility Reserve Fund will remain mostly depleted in FY 2027 after planned expenditures. The FY 2027 budget projects a $1.5 million decrease to the General Fund unassigned fund balance, about half the amount of the FY 2026

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original budget. While I am hopeful these deficits can be turned around through careful operational management, a General Fund that is continually under-resourced stymies the investment we need to deliver core services.

Prioritizing Core Services

Because ongoing financial pressure on the General Fund and the State’s continued commitment to property tax reform creates uncertainty, the City is taking a measured approach to personnel growth in FY 2027, despite strong justification for need in many of our operations. This proposal includes three positions that support core service delivery in alignment with the City’s Strategic Plan. An Administrative Coordinator in the Fire Department is the only new position presented in the General Fund. A Treatment Plant Operator in the Water division and a Maintenance Worker in the Resource Management division are included in enterprise funds. While these positions help address a few critical operational needs, other service areas continue to experience increasing strain from demands driven by community growth. The City must continue to monitor pressures and prioritize resources for core services as finances allow, or risk service level reductions and employee retention challenges. Of particular note, this budget continues to acknowledge that the City cannot financially support the service expansion required for the previously planned Fire Station #5 in this fiscal environment. Thus, a shift in strategy is needed to bolster our four-station foundation to better serve a growing population and tax base. The $300,000 in fire-specific contingency funds from FY 2026 is eliminated in FY 2027, which helps minimize the overall projected decrease of $1.5 million to the General Fund unassigned fund balance. However, this budget also maintains the FY 2025 over-hiring of two firefighter positions and adds an Administrative Coordinator, which will help support strained staffing. Fortunately, LOST does allow for conceptual studies in FY 2027 for a new Fire Station #1 and a modernization of Fire Station #3 which are critical investments for our four-station model going forward. The Capital Improvement Program (CIP) outlines planned infrastructure investment over the next several years. More than $4 million is planned in 2026 for ongoing transportation system investments, including pavement rehabilitation, bridge repair, bicycle accommodations, bus stop improvements, traffic signals, parking ramp restoration, and accessibility enhancements. Another million in annual funding is planned for utility system improvements, including undergrounding utilities, sewer main replacement, and stormwater projects. The budget also includes several major projects for 2026-27 to maintain critical infrastructure, including the completion of Court Street reconstruction, signalization of N. Dodge Street at ACT Circle, Carson Farms stormwater detention basin, and Collector Well #1 reconstruction. Other water, sewer, stormwater, landfill, park, and public facilities projects are also scheduled in accordance with replacement and maintenance needs. However, project budgets are still impacted by continued inflation, due in part to volatile tariffs and elevated borrowing costs. Consequently, carefully managing projects will remain important to addressing capital needs despite additional dollars from LOST.

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Opportunities with a Local Option Sales Tax

On November 4, 2025, Iowa City voters approved a 1% Local Option Sales Tax (LOST), which will increase the sales tax effective July 1, 2026 on taxable consumer purchases from 6% to 7% . LOST is expected to generate up to $14 million annually, which must be used in accordance with ballot language for the following purposes:  25% to preserve existing affordable housing, support shelter, transitional, and permanent housing, and increase access to and the supply of affordable housing for low income households.  15% for community partnerships that support intergovernmental, economic development, arts and culture, and social service priorities.  10% for maintaining and constructing public streets, sidewalks, trails, parks, and facilities. It is important to note that pursuit of alternative revenue sources, such as LOST, is an identified Strategic Plan action. Specifically, the plan calls for the City to “ Consider alternative revenue sources such as a Local Option Sales Tax or Franchise Fees that can help achieve strategic plan goals, fund infrastructure and facility needs, and reduce reliance on property tax.” This new funding source is essential because it can help reduce reliance on the General Fund which is stressed by past property tax reforms, ongoing inflation, and muted taxable property valuation growth. However, it also allows for a notable expansion or continuation of value-add initiatives in our Strategic Plan and adopted master plans. As such, this budget focuses LOST on three goals while staying within the parameters of the voter-approved ballot language: 1. Fund Strategic Plan objectives that are currently in a precarious funding position due to reliance on property taxes or that have not been previously funded; and 2. Sustain select successful programs launched with the American Rescue Plan Act or other federal dollars that do not have alternative funding sources identified; and 3. Provide critical relief to the General Fund to help solidify service levels and free up resources that help reduce existing strain on City employees serving a growing population. While staff has provided an estimate of LOST revenue, it is a new funding source. As such this budget does not allocate all anticipated revenue in the event receipts come in below expectations. It is also important to be mindful that funding will be received on a monthly basis, so the timing of funding commitments must reflect cashflow realities.  50% for property tax relief.

Property Tax Relief

State law requires that 50% of LOST revenues, which staff estimates at $7 million in FY 2027, must be dedicated to property tax relief. The most straight-forward way to accomplish this is through a property tax levy reduction, whereby LOST dollars replace funding previously levied through property taxes. The alternative to accomplish property tax relief is through tax avoidance, whereby LOST prevents an increase in property tax asking that would otherwise be required to

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meet a public need. While both are acceptable pathways, relief through levy reduction should be part of the City’s strategy.

This budget allocates $1 million of LOST for a property tax reduction to decrease the property tax levy by 20 cents, reducing the City’s levy rate from $15.63 to $15.43 per $1,000 of taxable value. The remaining funds are allocated to invest in capital projects and prevent an increase of the debt service levy. Without these funds, the debt service levy would need to increase by an estimated $0.49 by FY 2030. Projects funded through LOST in lieu of debt financing include:  $2.0 million to expand the City’s pavement rehabilitation program, which repairs streets and improves curb ramp for improved accessibility.  $1.5 million for the extension of the trail along Highway 6.  $1.2 million to replace original flooring and furnishings at the public library.  $1.0 million for conceptual designs of a new Fire Station #1 and modernized Station #3.  $300,000 for seating replacements at the Riverside Festival Stage in Lower City Park.

Key Strategic Plan Actions: Property Tax Relief

 2.4 Identify additional opportunities for road diets, sidewalk infill, curb cut and accessibility enhancement, and bike lane installation with a goal of at least two such projects each construction season.  2.8 Consider adding or retrofitting bike pathways that are separated from streets or protected utilizing flexible bollards.  5.2 Complete a City Hall and Public Safety Headquarters space needs study and develop a plan for next steps toward implementation.  5.6 Design replacement and renovated facilities for operational efficiency, capacity for growth, employee safety and health, resilience, alignment with Climate Action goals, and civic pride.  7.5 Significantly bolster the Facility Reserve Fund and develop an implementation plan for use of funds that minimizes large debt issuances.

Affordable Housing

The ballot language requires that 25% of LOST funding be directed to affordable housing that benefits residents with lower incomes, estimated to be $3.5 million in FY 2027. This budget proposes allocating 90% of this funding ($3,150,000) to the following purposes:  $1.25 million to support development of new publicly owned affordable housing. Staff anticipates this amount is needed for at least two years to achieve the maximum number of affordable units as part of the multi-family project planned for Summit Street.  $700,000 to support programs benefitting the unhoused. This includes $200,000 for the winter shelter and street outreach. This would relieve $40,000 in the General Fund and free up over $100,000 in the Affordable Housing Fund for reallocation to other initiatives. The remaining LOST dollars ($500,000) would provide operational support for permanent supportive housing in light of changing federal priorities. Exact use of the permanent supportive housing dollars will be determined after further input from service providers.

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 $400,000 to bolster non-profit housing provider capacity. Further engagement with our non-profit housing providers is needed to determine expenditure plans.  $400,000 to support affordable homeownership opportunities. This includes $300,000 targeted for the Neighborhood Homeownership Program, in which the City buys rental property, renovates it, and resells it for affordable homeownership. The remaining $100,000 would supplement the City’s existing downpayment assistance program.  $250,000 to support preservation of affordable housing and aging-in-place initiatives. $100,000 is targeted to be contracted out as emergency rehabilitation assistance which is currently constrained by federal funding rules. The remainder would move the $150,000 General Rehabilitation Improvement Program out of the General Fund, providing needed relief and setting up future expansion of the program which is unlikely in the General Fund.  $150,000 to support the 2027 Student Build Project. This provides dedicated funding to give more certainty and permanence to the partnership with the Iowa City School District, Home Builders Association, and local non-profits to train high school students in the trades while creating new affordable housing opportunities.

Key Strategic Plan Actions: Affordable Housing

 1.4 Advance prioritized recommendations in the 2022 Affordable Housing Action Plan. Work with partners to undertake significant scale affordable housing efforts.  1.7 Explore innovative housing projects leveraging partnerships with public, private, and nonprofit agencies. Develop a business and financial strategy for bolstering the number of publicly owned housing units across all geographic regions of the community, especially in areas of high opportunity.  1.8 Respond to the growing homelessness challenges in collaboration with nonprofit partners through enhanced street outreach partnerships, data-informed strategies to reduce chronic homelessness, and continued exploration of shelter as service model.  1.9 Expand the South District Homeownership Program to other targeted neighborhoods and consider allowing relocation assistance to expedite completion.  3.3 Partner with Kirkwood Community College, Iowa City Community School District, Iowa Labor Center, local trades, businesses, and other stakeholders to provide meaningful career development opportunities, pre-apprenticeship, and apprentice programs.

The 10% not planned for expenditure protects from overcommitting funds if estimated revenues do not materialize. If revenue estimates are realized, the City can allocate these funds towards additional affordable housing projects in future years. Staff believes that feedback from affordable housing providers will help shape these recommendations both in the short- and long-term horizon.

Community Partnerships

The budget provides 15% of LOST funding to community partnerships that support intergovernmental, economic development, arts and culture, and social service priorities, estimated to be $2.1 million for FY 2027. Because many of these funds will be awarded externally,

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