FY2024 Proposed Budget

by 20% per year until it is fully phased out in fiscal year 2027. The backfill revenue estimated for fiscal year 2023 is $1,242,733. The backfill revenue budgeted for fiscal year 2024 is $1,602,806, which includes $676,676 of a new backfill due to legislation passed in 2022. This legislation changes the rollback for all commercial, industrial and railroad properties so that the first $150,000 of assessed value is taxable at the residential rollback percentage and then the rest is at 90%.

The total projected impact of the property tax reform over ten years for the City is estimated to be a loss of $51,694,623 not including the additional lost revenue from the 2021 phase out legislation.

The strategy that the City has undertaken in response to the property tax reform is to 1) seek revenue diversification, 2) build contingency funding to provide for unexpected events, and 3) work to build a more efficient organization and to control spending. As part of this strategy, the City has created an Emergency Reserve fund that is an assigned portion of the General Fund. The targeted balance for this reserve is the amount of the State reimbursement for the commercial/industrial property tax replacement plus the City’s pension and OPEB liabilities. The Appendix contains a State Property Tax Reform Impact Summary with further details of the bill and a description of the estimated financial impact of the provisions of SF295 to the City over its first ten years. Landfill Replacement & Closure Reserves The Landfill Fund maintains a number of reserves that serve various purposes. Some of these reserves are required by law and some are created by management to financially prepare for future occurrences. Legally, the City is required to maintain and fund a closure and a post-closure reserve to ensure that sufficient funds are retained to close and monitor landfill cells as they become full. In order to comply with these funding requirements, the City hires a certified landfill engineering firm to calculate the future cost requirements and to provide us with a certified report. The City is required to have a pro-rated share of this funding placed into the proper closure and post-closure funds based upon the amount of tonnage that the landfill can accept versus how much has actually been deposited. The City maintains these accounting records and files a funding report with the State of Iowa annually. The estimated balance for fiscal year 2024 in the closure and post-closure funds totals $15,386,139. The City also maintains a reserve to set funds aside for the construction of new landfill cells as current ones are closed. A cost-per-ton for landfill cell replacement has been calculated based on the actual costs to replace the last landfill cell. Each quarter, as trash is deposited into the landfill, a cost-per-ton transfer is made from the landfill operations to the replacement reserve. These funds are intended to eliminate future borrowing or significant rate adjustments in order to open new cells. The budgeted balance for the landfill cell replacement reserve for fiscal year 2024 is $2,974,237.

At June 30, 2022, it is estimated that the landfill had deposited 4,884,177 tons versus its permitted capacity of 5,452,000 or 89.6%.

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