FY27 Proposed Budget

The Climate Action Plan also remains a priority, despite the State’s elimination of the Emergency Property Tax Levy which previously funded climate operations. This budget continues incorporating many Climate Action activities in the General Fund, while shifting others to LOST, to help continue achieving our climate action and adaptation goals. Sustainability programs in the FY 2027 budget include over $300,000 for residential energy efficiency grants, HERS grants to homebuilders, community climate action grants, continued implementation of the resilience hub program, and additional programs, partnerships, and events. The City’s sustainability efforts are also incorporated into other various master plans and capital projects such as tree plantings, prairie management, fare-free transit, multi-modal roadway improvements, and waste reduction programs. Lastly, the FY 2027 budget includes funds to refresh the City’s Climate Action plan consistent with the direction in most recent update of the Strategic Plan. This budget was developed within the context of the significant financial impacts discussed previously, as well as the following three financial goals that seek to establish a sound fiscal strategy for the next year and beyond:  Ensure reliability of core services and infrastructure remains high while balancing cost impacts on residents and businesses.  Seek fiscal and operational stability levels despite compounding financial pressures due to state property tax reform and escalating costs of operations.  Continue to dedicate resources towards advancing City Council’s Strategic Plan priorities and adopted Master Plans. The FY 2027 budget prioritizes maintenance of core service levels in light of continued financial challenges. This is accomplished through two utility rate and fee increases that help address acute needs in core service areas, which is partially mitigated by a reduced property tax rate. This budget also responds to the State compounding property tax reforms while confronting macro economic impacts, such as tariff volatility, elevated inflation for service provision and capital projects, in addition to the heightened interest rate environment. Overall, expense in the General Fund is held to 2.0% growth, below the status quo cost of personnel and operations, made possible due to critical relief provided by LOST. However, expenditure growth since the pandemic still outpaces property tax receipt growth rates. Finally, the budget focuses resources on implementation of Council’s Strategic Plan goals and adopted Master Plans. LOST provides substantial inroads, enabling sustained funding for many programs that would otherwise terminate as federal dollars run out or are eliminated. Iowa City benefits from a strong local economy anchored by the presence of the University of Iowa and University of Iowa Health Care. The local economy consists of a diverse set of successful industries that help sustain one of the most consistent stretches of low unemployment rates in the nation. The City of Iowa City has a long tradition of responsible budgeting policies which has created a strong financial foundation that helped the community weather recent budget challenges and economic downturns while sustaining top-notch service delivery. Fiscal Health and Outlook Financial Goals

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