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City of Dubuque Fiscal Year 2019 Recommended Budget as Amended Copyrighted February 28, 2018 City of Dubuque Public Hearings # 1. ITEM TITLE: City of Dubuque Fiscal Year 2019 Recommended Budget SUMMARY: Proof of publication on notice of public hearing to consider approval of the Fiscal Year 2019 Recommended Operating Budget and Capital Improvement Program (July 1, 2018 through June 30, 2023)and the City Manager recommending approval. City Manager submitting correspondence addressing the City Council's items for reconsideration. Correspondence from the East Central Iowa Association of Realtors in support of the Landlord Guarantee Program improvement package proposed in the Housing and Community Development recommended budget. RESOLUTION Adopting the City of Dubuque Fiscal Year 2019 Annual Budget RESOLUTION Adopting the City of Dubuque Five-Year Capital Improvement Program Public input will be taken on City departmental budgets in the following order: 1 Information Services 16 Purchase of Services 2 City Attorney (Legal) 17 Park Division 3 City Manager 18 Recreation Division 4 City Council 19 Five Flags Civic Center 5 City Clerk 20 Conference Center/Grand River Ctr. 6 Cable TV 21 Emergency Management 7 Library 22 Emergency Communications 8 Planning Services 23 Police Department 9 Finance Department 24 Fire Department 10 Human Rights 25 Building Services Department 11 Airport 26 Water Department 12 Health Services 27 Water& Resource Recovery Center 13 Housing/Community 28 Public Works Devel. Department 14 Transportation 29 Engineering Services Department 15 Economic 30 Capital Improvement Development Program SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt Resolution(s), Conduct Public Hearing ATTACHMENTS: Description Type FY19 Budget Recommendation Public Hearing City Manager Memo Population by County Supporting Documentation FY19 City Manager's Budget Transmittal Message Supporting Documentation 2/5/19 East Central Association of Realtors Correspondence Supporting Documentation Fiscal Year 2019 Operating Budget Resolution Resolutions FY19 Capital Budget Adoption Resolution Resolutions Proof of Publication Supporting Documentation Dubuque THE CITY OF Itxtbri DUB E µ Aserip ' ii, Masterpiece on the Mississippi 2007.2012 2013.2017 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Fiscal Year 2019 Budget Recommendation Public Hearing DATE: February 28, 2018 The State of Iowa is underperforming in critical areas. It is very concerning that only local governments (including cities, counties, school districts, and community colleges) are taking action to address these challenges. It is ironic and troubling that we continue to hear about state legislation and rules that cut revenues available to local governments. Proposed State-level legislation and rules to reduce sales tax revenue, decrease property tax revenues, eliminate the promise to backfill past property tax reductions with state revenues, severely restrict the use of Tax Increment Financing (the only viable economic tool used by local governments to support growth in business investment and jobs), and to eliminate or reduce Historic Tax Credits for building rehabilitation all threaten the ability of local governments to respond to local issues. Information recently released by the State of Iowa Legislative Services Agency shows the change in population in counties across Iowa. It is a frightening trend that must serve as a wake-up call for all Iowans. If we want our children and grandchildren to be able to stay in Iowa and be successful, we must all work to make Iowa a place of choice, not only for businesses but also the workforce they will need to thrive. We should not be considering the elimination of economic development and community rehabilitation tools, but instead exploring how we can improve those tools to create more growth in jobs and population and to make the incentives more competitive. We should not be pursuing ways to starve cities, counties, and school districts of the funds they need. We should instead be looking to diversify sources of revenues so local governments can invest in the future for the benefit of the citizens they serve, those here today and those we hope to be here in the future. Iowa Percent Change in Population by County 2010-2016 State of Iowa +2.9% (88,338) There are 99 counties in the state of Iowa. Only 27 (27%) showed any growth at all from 2010 to 2016. If you only consider counties that had at least 1% growth and have a population of 25,000 or more, only 10 (10%) of the 99 counties met these criteria and four of them are in the Des Moines/Ames corridor. In fact, the Des Moines/Ames corridor accounted for 74,081 (84%) of the 88,338 of the state-wide population growth. Even some of the counties that include some of Iowa's larger cities did not meet this criteria. COUNTY % Population Change: 2010-2016 Woodbury (Sioux City) +0.6% Muscatine (Muscatine) +0.5% Pottawattamie (Council Bluffs) +0.5% Jasper (Newton) -0.4% Wapello (Ottumwa) -1 .8% Cerro Gordo (Mason City) -2.4% Webster (Fort Dodge) -3.3% Clinton (Clinton) -3.7% Fortunately, Dubuque County showed a growth of 3.4%, achieving a population of 97,003. The picture is just as discouraging when you look at the Estimated Population Migration from 2010 to 2016. This measurement represents the number of people who have moved to these counties vs. the number of people who have left. The State of Iowa experienced a net inflow of 24,643 people during that time. Only 20 (20%) of the state's 99 counties showed a net migration inflow. Six (30%) of those 20 counties were concentrated in the Des Moines/Ames Corridor. If you only consider counties that had a net positive change of at least 1 ,000 people, only 9 (9%) of the 99 counties met that criteria. Fortunately, Dubuque County is one of those nine with a net migration increase of 1,389. I believe the facts presented in the January 29, 2018, Fiscal Year 2019 Budget Recommendation memo make a strong case that, while local businesses are identifying the lack of available workforce as their top impediment to growth, a skilled workforce is imperative to the future of Dubuque. Recently, legislation was introduced in the Iowa Senate to eliminate the promised property tax backfill payments to cities, counties, and school districts. This would cost the City of Dubuque $344,233 in revenues in Fiscal Year 2019, $688,465 in Fiscal 2020, and $1 ,032,698 in Fiscal Year 2021 and each year beyond. The legislation would also reduce funding for the State of Iowa Historic Tax Credit Program. This is a significant source of financing for private developers across the state as they renovate old buildings and repurpose them, like the projects in the Historic Millwork District that are creating commercial and retail space and hundreds of apartments for workforce housing. 2 A 2018 report just released by the Iowa Business Council, which represents many of the state's largest employers, should be a great cause of concern for the State of Iowa. When compared with how Iowa ranks among all 50 states in key metrics comparing the year 2000 with 2017, it is clear that Iowa needs to do more, not less, to support economic development, job growth, and workforce development: 2000 Ranking 2017 Ranking Median Household Income 21 26 Gross State Product 29 30 8th Grade Reading Proficiency 11 17 8th Grade Math Proficiency 12 14 Education Attainment High School 9 11 Education Attachment Bachelor Degree 22 34 Gallup-Healthways Well-Being Index 7 19 Two bright spots in the analysis were: 2000 Ranking 2017 Ranking State Public-Pension Funded Ratio 29 13 State Business Tax Climate 46 40 Despite the desire of some state legislators to eliminate the backfill in as little as two years, I still stand by my original property tax recommendation for FY2019: % Change $ Change Property Tax Rate -2.71 % -$0.29 Average Residential Payment +2.00% +$15.11 Average Commercial Payment -3.84% -$126.04 Average Industrial Payment -3.46% -$170.38 Average Multi-Residential Payment -7.13% -$143.71 Should they reduce or eliminate the backfill in Fiscal Year 2019, I will recommend some expenditure reductions to bridge the funding issue into the Fiscal Year 2020 budget process, where it can be dealt with more strategically. Since the budget recommendation was originally submitted, the City received a higher than expected Fiscal Year 2018 (current year) distribution payment from the DRA, but we are also seeing reduced projected Dubuque Racing Association lease revenues, a recent spike in experienced health care costs, increased cost in Fire overtime and other medical, and continued pressure on the local option sales tax. None of this translates into a change in the Fiscal Year 2019 budget recommendation, with the continued intent to be able to contribute $1 ,050,000 to the general fund reserves. During the budget hearings, Council Members expressed an interest in adding $25,000 to the Airport marketing budget. Should this be funded, it would have the following impact to the property tax rate and different classes of property: 3 Original With $25,000 Recommendation Increase Property Tax Rate -2.71 %/-$0.29 -2.62%/-$0.28 Average Residential Payment +2.00%/+$15.11 +2.10%/+$15.84 Average Commercial Payment -3.84%/-$126.04 -3.75%/-$123.06 Average Industrial Payment -3.46%/-$170.38 -3.37%/-$165.90 Average Multi-Residential Payment -7.13%/-$143.71 -7.04%/-$141 .94 During the budget hearings, Council Members had expressed an interest in funding the $3,000 Library request for three regional author visits each year. Should this be funded, the recommended property tax rate would increase 0.01% ($0.001) and the average residential taxpayer would have an increase of 0.01% (+$0.09) from recommended. A majority of the City Council wanted to consider retaining the Maintenance Electrician position at the Water and Resource Recovery Center. While I still support the recommendation from Water and Resource Recovery Center Manager Willie O'Brien to eliminate the Maintenance Electrician position, and I believe this is the best way to optimize plant operations, it is clear that a majority of the City Council does not support this plan. The combination of the added cost ($83,281) of the Maintenance Electrician position and the reduction of$42,000 in the contract services request would equate to an increase in the sanitary sewer fee from 3% to 3.41%. One of the other positions eliminated in this staffing plan was a Plant Operator position. There was a person in that position and that was recommended to be eliminated as of January 1 , 2019. That person will be leaving the position next month to take a position in Public Works. Since that position is now vacant, it will be eliminated as of July 1 , 2018. This creates an extra six months of savings equal to $39,000. This $39,000 savings brings the sanitary sewer fee increase down from 3.41 % to 3.08'%. By keeping the Maintenance Electrician position, there is also an $8,000 reduction in the Supplies and Services Sanitary Sewer Maintenance budget in Engineering, which also is paid from the Sanitary Sewer Fund. Elimination of this brings the fee increase down to 3.03% BRD is the firm installing and operating the equipment at the Water and Resource Recovery Center to further clean the methane gas generated through the anaerobic digestion process at the new facility. The resulting biogas (BioCNG) can be sold to the Black Hills Energy pipeline and will generate Renewable Identification Number (RIN) revenue from the Federal Renewable Fuel Standard program. I contacted BRD and they agreed to amend their agreement to operate at the Water and Resource Recovery Center. The current agreement says that BRD will reimburse the City for any services BRD needs from City Maintenance staff. BRD will have their own 4 maintenance contract, but will need some City assistance. The City estimated $6,000 in revenue in Fiscal Year 2019. BRD has agreed to guarantee the City $3,000 a month in revenue through June 30, 2019. This would add $30,000 to the Fiscal Year 2019 revenue stream. The $30,000 of BRD revenue will help offset $25,000 of additional staff expense related to the engineering of BRD operation. In addition, the sanitary sewer rate increase must be no lower than 3% in order to fund the sanitary sewer reserve. The additional BRD revenue will not impact the Fiscal Year 2019 budget recommendation. I respectfully recommend Mayor and City Council approval of the original January 29, 2018 budget recommendation. Should the City Council choose to make any amendments related to Airport Marketing, Library Regional Author visits or the Maintenance Electrician position, I respectfully recommend they be made consistent with the information in this memorandum. ,CAilvf,41 k't/1/711/4<,-L, Mic ael C. Van Milligen MCVM:jh Attachment cc: Crenna Brumwell, City Attorney Teri Goodmann, Assistant City Manager Cori Burbach, Assistant City Manager 5 Population by County - 2016 Estimate Total Population 3,134,693 LYON OSCEOLA DICKINSON EMMET KOSSUTH I WINNEBAGO WORTH MNCHELL HOWARD WNNESHEK MLA MAKE Iowa Population 11,754 6,064 17,243 9,658 10,631 7,572 10,763 9,332 rt I 20,561 13,884 Roux II OBREN CLAY PALO ALTO 15,114 1 HANCOCK CERRO GORDO 34,898 14,020 16,333 9,047 10,835 FLOYD CHICKASAW Estimated Population 15,873 12,023 FAYETTE CLAYTON- I 13,693-10,000 PLYMOUTH CHEROKEE BUENA VISTA POCAHONTAS HUIIBOLDT WRIGHT FRANKLIN BUTLER BREMER 20,054 17591 110,001 -12,500 25200 11,508 20,332 6,886 9,487 12,779 10,170 14,791 24,798 l-1 12,501 -17,500 A R BLACK HAWK I BULHANAN DELAWARE IM 17,501 -35,000 DA 1 SAC CALHOUN I HAM ETON HARDIN URUNOY :Waterloo 17,327 Dubuque -35,001 -474,045 Sioux 20,992 6,985 9,876 9,846 15,076 17,226 12,313 I 2,904 City ® Major Cities TAMA BENTON JOKES JACKSON MONONA CRALVFORD CARROLL GREENE BOONE '''9IALL 19,472 8,898 16,940 20,437 9,011 26,532 00 40,31 17,319 25,699 I``1,6 20,439 .. ce' Top Five Counties: ,090 RatcEDAR 1. Polk: 474,045 HARRISON SHELBY AUDUBON GUTHRE - JASPER POWESHIEK IOWA SON 18,454 2. Linn: 221,661 Ankeny 46 3. Scott: 172,170 14,149 11,800 5,678 10,625 84,516 474,045 36,708 18,533 16,311 Des Moines Towa C? 4. Johnson: 146,547 West Des Moines - - ,enport ,FOTTAWArWM CASS ARAB MADISON WARREN MARION DAHASKA KEOKUK WASHINGTON 5. Black Hawk: 132,904 93,582 13,157 7,092 15,848 49,691 33,189 22,181 10.119 22,281 LOUISA , Top Five Cities: 11,14 ' 1. Des Moines: 215,472 MLLS ;MONTGOMERY'ADAMS UNION CLARKE LUCAS IJONROE WAPELLO JEFFERSON HENRY 19,773 2. Cedar Rapids: 131,127 14,972 10,225 3,693 12,420 9,309 8,647 7,870 34,982 18,090 DESMORES L 3. Davenport: 102,612 FREMONT PAGE TAYLOR RINGGOLD DECATUR WAYNE APPANOOSE DAVIS VAN BUREN 4. Sioux City: 82,872 6,950 15,391 6,216 5,068 8,141 6,452 12,462 8,860 7,271 LEE 5. Iowa City: 74,398 34,615 Percent Change in Population - 2010-2016 Statewide: LYON DICKINSON KOSSUTH WNNEBAGO WORTH MITCHELL REWARD WNNESHIEK ALLAMAKE.- +2.9% 1.5% 3.5% -2.2% -0.3% -0.1% -2.4% Percent Change -2.4% -3.1% SIOUX O'BRIEN CLAY PALOALTO -2.8% HANCOCK CERRO GORDO - FLOYD. CHICKASAW 3-3% +88,338 3.5% -2.6% -2.0% -4.0% d.5% 2.4% 2.6% 3.3% FAYETTE CLAYTON ' PLYMOUTH CHEROKEE BUENA VISTA HUMBOLDT WRIGHT FRANKLIN ` BUTLER BREMER 4-0% 3.0% Population Change 0.9% d-7% 0.4% 3.3% -3.4% .4.8% -0.5% 2.2% WEBSTER BLACK HAWK BUCHANAN DELAWARE DUBUQUE � Percent Change OODBURY DA SAC CALHOUN HAMILTON IIARDIN GRUNDY Wat0 o oz% 2.S% 3.6%'fir Dubuque --8.3%--5.0% Sioux 0.6% -1.5% -4.6% 1.8% 3-3% 3.8% -1.8% -1.1% 7.4% City -4.9%--1.0% ITAMA BENTON UNN JONES JACKSON-1.9% -0.9%-1.0% MONONA CRAWFORD CARR°LL GREENE BOON= MARSHALL 4.9% -1.0% -3.7% -0.9% -1.8% -3.5% 0.9% - -0.8% -2.5% -1.4% Cedar oN, I 11.1%-5.0% Rapid? CLINTON 5.1%-27.8% CEDAR 3.7% - SHELBY GUTHRE (JASPER POWESHEK DWA -0.2� 'at Major Cities -3.0% 3.0% y -0.4% -2.0% -0.3% SCOTT a4'o i West D Des:- nines AIUSCATINE A ienport •.: POTTOWATTARIE MADISON MARION MAHASKA KEOKUK WASMNGTON 0.5% Top Five Actual 0.5% 1.1% -,5% -0.4% -0.9% 3.7% 2.7% Change by County. LOUISA 1. Polk: 43,405 Council Bluffs -2.2% 2. Dallas: 18,381 MILLS MONTGOMERY UNION CLARKE LUCAS htONROE WAPELLO HENRY -0.6% .4.8% -0.9% 0.2% -2.8% -1.3% -1.8% DESMENES 3. Johnson: 15,665 -1.8% 4. Linn: 10,435 -1.S% Top Five Actual PAGE TAYLOR MNGGOLD DECATUR MUNE APPANOOSE SASS VAN BUREN 5. Scott: 7,250 -3.4% -1.6% -1.2% 3.7% 0.8% -3.3% 1.2% 3.9% LEE Change by City: , 1 3.5% 1. Ankeny: 13,045 Bottom Five 2. Des Moines: Actual Change by County: 12,039 99. Clinton: -1,807 3. West Des Moines: 98. Lee: -1,247 7,951 97. Webster: -1,244 4. Ames: 7,226 96. Cerro Gordo: -1,081 5. Iowa City: 6,536 95. Fayette: -826 Sources: U.S.Census Bureau, 2016 Population Estimate; LSA calculations LSA Staff Contact: Adam Broich(515.281.8223)adam.broich@legis.iowa.gov LSA LEGISLATIVE SERVICES AGENCY Serving the Iowa Legislature Estimated Population Migration - April 1 , 2010 to July 1 , 2016 LYON OSCEOLA 8308508 'EMAET KOSSUTH VAtf+EBAGO IVO RTH MfC1ELL IStWMD WNtESHEK ALL4J4(EE Dom:-168 Dont-439 Dont 747 Dom:-654 Dom:-193 Dorn 29 Irrt:14 Int:27 Int:37 Int:73 Int:0 Int;4 Dom:-14 Dom:-316 Net:-154 Nd:-412 Net:784 Net:-581 Net:-193 Net:33 Int:39 Int;211 Dorte-20433 Dont:-618 Dont-282 - Net:25 Net:-296 Int:-413 Int:97 SDUX 'O'Bt8EN CLAY PALO ALTO Int:24 HANCOCK CERRO GORDO- - Net: Net:-521 Dont-796 Dom-336 Dont-363 Dom:-306 Nd:-2W Dom:-390 Dom:-1,162 FLOTD CHICKASAW Int:381 Int:61 Int:16 Int:75 Int:17 Int:233 Dom:-403 Dom:-354 Nd:-415 Nd:-275 Nd:-347 Net:-231 Net:-373 Net:-929 Int;-5 Int:-1 FAYETTE CLAYTON Nd:-408 Net:-355 Done-683 Done-547 KPLfl4OUIH CHEROKEE BUENAVISTA POCAHOMAS WEIGHT FRNKDN SURER Int:110 lot:38 � 6 �82 Nd:-573 Net:-509 Dom:-144 Dont-378 Dorn:-1.169 Dam:-315 Int:4 Dom:-391 Done-551 Dont 8 Int:154 Int:121 Int:2 Int:445 Irrt:14 Nd:-242 Int:46 Int:8 Int:58 Net:236 Nd:-23 Net:-376 Net:-724 Net:-301 Net:-345 Net:-543 Net:66 tirtIE BSTER -ri BLACKHall,BUCHANAN DELAWARE DUBUQUE WOODBUtY DA SAC LCALHOU+ H4JLTON HARDN GRONDY DOM-2,90) Dom:-490 Done-665 Dern:780 Done-4336 Dom:-39 Dont-273 Dont-1W Dint;Zyg 1 Dorn:-738'Done-137 Dom:-166' Int 1,594 _ Int:31 Int:15 Irtt:609 Int:1,361 Int:4 Int:0 lot:9 Net:-1,152 lot:47 Int:76 Int:6 Net.-1,306 Net:-459 I Net:-650 Net:t389 Nd:-'1,975 Net:-35 Nd:-273 Net:-100 Net:-691 Net:-61 Net:-160 TAME BEtOON Ut1+ JONES JACKSON MOIP3ILA CRANFOPD CARRDLL GREEfE WOW STORY MARSHALL Dom:-249 Dom:-256 DOM-567 Dom:-792 Dom:1,714 Int:47 Int:12 ? Dont 3 Dont-763 Dont-511 Dom:-217 Dont 223 Dom:22 Dom -1598 Int:28 lot:47 lot:2,062 Net:-202 Net:-244 Int:15 Int:189 Int:21 Int:14 Int:0 Int:4,836 Int 867 Net:-539 Net:-745 Net:3,776 'al- Nd:18 Nd:-574 Net:-490 Net:-203 Nd:223 Net 4,858 Net -731 Dorn-2,171 ^_• CEDAR Int:178 HAJaltSON SIELBY ADWBON GUTHRIE DALLAS POW JASPER POIVESHEK IOWA JON+SON Dom:-92 Net:-1,993 Dont-327 Dom:-182 Done 11,526 Dorn 13,223 Done-406 Dont-376 Dorn-119 Int:35 Done 2 818 Net:-57 Dorn:-617 Dom-346 Int:5 Int:24 Int:1,579 Int:7,852 Int:43 Int:267 lot:-6 Int:��3 SCDTr Int:0 Int:122 1Net:-322 Net:-158 Net:13,105 Net:21,075 Net:-363 Nd:-109 Net:-125 Nd:8,481 Done 1,238 Nei:-617 Net:-224 Int-1244 _ MOSCNME Net ,482 POTTAW4TAt1E CASS •MAR MADISON WARREN 1U100N T MAHASKA MOKUKfOn1 DontDone-1584 Dom:-522 Dom:-357 Done 14 Dom:2,285 Done-419 Done-637 Dortt-48 :150 1 Nd:- Int:24 Int:9 Int:0 lot:35 Int:207 Int:95 lot:67 Int:6 40 Nd:-1,300 Net:-513 Net:-357 Net:49 Net:2,492 Net:-324 Net:-570 Nd:-476 190 1 LOUSA Dortt- Net Migration Int:19 MLLS MONTGOMERY MMS UNION CLA.RKE LUCAS MOtROE WAPELLO JEFHEtRy Nd:-444 Population Dom:-194 Dont-321 Dont-289 Dorn:-82 Dont-109 Dorn:-262 Dont-29 Dom:-1,182 Dont-338 Dorn:-521 DES moms Change Int:3 Int:11 Int:0 Int:54 Int:6 Int:43 Ort:13 Int:436 Int:1,661 lot:48 Net:-191 Nd:-310 Nd:-289 Net:-28 Net: Dom:-759 :-103 Net:-219 Nd:-16 Net:-746 Nd:1,323 Net:-472Int:175 ® 2,975 1,000 FREMOtNT PAGE TAYLOR PoN+GGOLD DEMUR VIAYNE APPANODSE DAVN V4+BUREN Net:-606 Dom:-368 Dont-375 Dont-175 Dom:76 Dorn-363 Dont 24 Dont-264 Dom:-244 Dont-297 -999--500 Int:11 Int:64 Int:47 Int:10 Int:48 Int:6 Int:14 Int:0 Int:1 Net:-357 Net:-311 Nd:-128 Net:86 Net:-315 Nd:30 Nd:-250 Net:-244 Nd:-296 -499-0 3 1 -500 501- 1,000 Note: Top figure represents the annual inflow of domestic population; middle figure represents the annual international inflow; and bottom figure represents the sum of the domestic and international inflow and outflow, MI 1,001 - 21,075 estimated between April 1, 2010 and July 1, 2016. Statewide Estimated Statewide Estimated Highest Domestic Net Migration Gain - 2015-2016 Five-Year Change-2010-2016: One-Year Change-2015-2016: - Domestic Change: -10,683 Domestic Change: -3,392 Illinois [ 5,407 International Change: +35,326 International Change: +6,336 - Net Migration Change: +24,643 Net Migration Change: +2,944 Minnesota AIL IMI 2,304 igwer of me end of the nor iodh:Oie net popinor On change North Carolina 1,275 1. Top States for Iowa Movers - 2015-2016 ■Moving from Iowa Nebraska 949 ■Movingto Iowa New Jersey 1 910 Illinois 5,407 miii0 5,000 10,003 15,030 20,003 Nebraska . 949 Figures at the end of the bar Highest Domestic Net Migration Loss-2015-2016 indicate net population change Florida -0,881 Missouri 111 710 ■Moving from Iowa Texas _um Awes al the end of',mbar ■Moving to Iowa M6mle nel popub Von change Texas -3,163 South Dakota -1,695 ■Moving from Iowa ■Moving to Iowa California -1,446 Florida -4,881 e r Georgia -1,257 0 5,000 10,000 15,000 20,000 0 5,000 10,000 15,000 20,000 Sources: U.S. Census Bureau,Estimates of the Components of Resident Population Change,LSA calculations .111 LSA Staff Contact: Adam Broich (515.281.8223) adam.broich@leais.iowa.gov 1-/S..& 2 LEGISLATIVE SERVICES AGENCY Serving the Iowa Jtgisleture Dubuque THE CITY OF Dubuque All-America City DUB E �. ' 1111.1 Masterpiece on the Mississippi 2007-2012 2013.2017 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Fiscal Year 2019 Budget Recommendation DATE: January 29, 2018 It is my goal that the Fiscal Year 2019 budget recommendation will reflect the City Vision and Mission Statements and be responsive to the goals and priorities established by the Mayor and City Council. I am pleased to report that the Fiscal Year 2019 budget recommendation is consistent with the property tax rate decrease of 2.71% approved as part of the Budget Guidelines by the City Council on December 18, 2017. This translates into the following: % Change $ Change Property Tax Rate -2.71% -$0.29 Average Residential Payment +2.00% +$15.11 Average Commercial Payment -3.84% -$126.04 Average Industrial Property -3.46% -$170.38 Average Multi-Residential Property -7.13% -$143.71 The next five years and beyond will see structural changes in the world economy the likes of which have not been seen since the early 1900s when the world faced the industrial revolution. The changes in technology, communications, energy, and health care will transform the world economy and our daily lives. There will be winners and losers in this process. It is our job to make sure Dubuque is a winner. A quick internet search will lead you to numerous experts who will make this same point about the current and upcoming pace of change. The smartphone is a perfect example. The Apple iPhone has just reached its 10th anniversary. There are now 2.32 billion smartphones being used in the world, according to Statista.com. On January 12, 2018, General Motors filed with the National Transportation Safety Board to sell the first commercially available fully self-driving car (with no driver assist instruments like a steering wheel) beginning in 2019. In June 2016, Dr. Robert M. Goldman made some predictions about what lies ahead (attachment I). He said "in 1998, Kodak had 170,000 employees and sold 85% of all photo -1- paper worldwide. Within just a few years, their business model disappeared and they went bankrupt. What happened to Kodak will happen in a lot of industries in the next 10 years - and most people don't see it coming." He said "software will disrupt most traditional industries in the next 5-10 years," making the point that "Uber is just a software tool, they don't own any cars, and are now the biggest taxi company in the world. Airbnb is now the biggest hotel company in the world, although they don't own any properties." In reference to future jobs, he said "70-80% of jobs will disappear in the next 20 years. There will be a lot of new jobs, but it is not clear if there will be enough new jobs in such a small time." That leads to the biggest challenge facing the United States and Dubuque. There is intense competition for jobs, but most importantly, a workforce with the necessary skills to do those jobs. According to the Dallas Federal Reserve Chairman Robert Kaplan, 50% of all businesses nationally say they cannot find enough skilled workers. The Federal Reserve Beige Book states, "Reports of tightness in the labor market were widespread. Most Districts reported employers were having difficulties finding qualified workers across various skill levels, and several Districts reported that an inability to find workers with the required skills was a key factor restraining hiring plans." The Beige Book for the Federal Reserve Chicago District reports, "Contacts continue to indicate that the labor market was tight and reported difficulty filling positions at all levels. A manufacturing firm reported turning down business because it was unable to find qualified workers." Locally, a January 26, 2018 article in the Telegraph Herald about Dyersville Die Cast said, "...the company has either turned down or been forced to let go of about $40 million worth of work since 2005 because of an inability to find workers." According to the Bureau of Labor Statistics, in November 2017, there were 5.9 million job openings with U.S. businesses. Not only do all those vacancies exist, but 5.5 million people were hired for jobs and 5.2 million people left a job in November 2017, meaning there is tremendous competition for those that already have a job. In November 2008, there were almost seven unemployed persons per job opening and in November 2017, there was about one unemployed person per job opening. The national unemployment rate at just over 4% is less than half what it was ten years ago. The January 10, 2018, Telegraph Herald reported that, "Economists forecast that hiring might slow this year as businesses struggle to find enough qualified workers." Fortune Magazine reports: "The war for talent that obsesses tech companies is intensifying and is about to spread economywide. After almost nine years of mostly sluggish expansion, the U.S. economy has shifted into a higher gear and is creating jobs at a record pace. Forecasters are highly confident of the coming boom because they're looking at simple economics. About 6 million jobs are open at U.S. companies, near an all-time high. Yet employers are filling jobs at the slowest rate in three years, unable to sign the employees they need as more people find work and stop looking. The Fed revised its full-employment estimate down to 4.6% last year, by far the lowest ever, but with unemployment now well below even that, relatively few people seeking a job are unable to find one. And that's in the economy overall. Among knowledge workers, managers, and other businesspeople, unemployment is far lower. For workers with a bachelor's degree or more, the rate is just 2.1 %. In management occupations it's 2%, and within that category, unemployment in "business and financial occupations" as measured by the Bureau of Labor Statistics, is a near-invisible 1 .7%, equaling the lowest unemployment rate among all job classifications economywide." -2- In November 2017, the unemployment rate in Iowa was 3.5% and in Dubuque it was 2.4%. On January 12, 2018, Iowa Lt. Governor Gregg reported that there were 58,348 job openings posted on the state job website. The five-year campaign that is just being started by the Greater Dubuque Development Corporation titled, "Greater Dubuque 2022," has the following goals: • Grow the number of jobs from the current 60,600 to 64,000 • Increase median household income from the current $56,154 to $60,000 • $800 million in commercial and residential construction • Grow the population of Dubuque County from the current 97,003 to 100,000 Much work needs to be done to make this happen. In my discussions with the Greater Dubuque Development Corporation, they have concerns that the area has hit a wall as far as the available skilled workforce. This will make it a challenge for existing companies who want to replace retiring workers or expand their operations and it will make it more difficult to recruit new businesses. As reported in the January 14, 2018, Telegraph Herald, Executive Director of the Grant County Wisconsin Economic Development Corporation Ron Brisbois reported, "I have talked to multiple companies in Grant County who are turning down contracts, they are turning down extra revenue, and they are doing so because the workforce they need is not available." As an example, the Telegraph Herald goes on further to say, "Each year, there are 245 openings for truck driver positions. However, only 34 county residents are completing the necessary training to fill such vacancies annually." A recent Julien's Journal article by Greater Dubuque Development Corporation Vice-President of Workforce Solutions Kristen Dietzel wrote: "On December 1 , 2017, Greater Dubuque Development released its 2017 Regional Skills Gap Analysis in partnership with Northeast Iowa Community College. The purpose of the Skills Gap Analysis is to provide the community with accurate information on projected workforce by occupation, as well as solutions in place to address challenges and opportunities to do more. The report was compiled through one of the most comprehensive workforce analytics tools on the market, EMSI Analyst. EMSI forecasts that in the next ten years, without intervention, the Greater Dubuque Area (Dubuque and its six contiguous counties) will experience a decline of working age population of approximately 6% and job growth of approximately 8%, resulting in a reduced surplus of available workforce. To break it down further: • Today we have roughly 54,000 more working age people than jobs in the region. • Currently about 80% of those individuals are in the labor force, leaving a labor force surplus of approximately 20,000 workers. • In 2027, however, we are projected to have a surplus of only 2,776 workers, assuming the labor force participation rate of the working age population holds steady. The report also highlights the top 75 occupations in the Dubuque Area economy based on 2017 employment levels. These top jobs include a mix of low, middle, -3- and high skill careers, with most jobs requiring some post-secondary training, but not necessarily a four-year degree. This is consistent with forecasted jobs available in our economy: by 2025, it is estimated that 68% of the jobs will require more than a high school diploma for employees to do the job. The bottom line: while we can expect approximately 15,000 openings a year in the region, most of that will be turnover. Of the approximately 900 new jobs expected annually, roughly 600 will be skilled jobs that we can address shortages of through education and training, as well as recruitment of skilled professionals. With more than 5,000 graduates a year at our regional institutions of higher education, how can we explain the skills shortage our companies face? A few factors contribute, including: • Misalignment of supply (our graduates) and demand (our jobs); • Out migration of graduates to Des Moines, Madison, Twin Cities, Chicago, and other metros; • Challenges recruiting out of area talent; • Challenges with hiring recent graduates; • The growing "gig economy," now considered to be the third largest job sector nationally and growing quickly." It is incumbent on Dubuque to make itself a community of choice where those already here want to stay (like our children, grandchildren, and those that come here for a college education) and those not yet here want to come. It is also important to create opportunities for everyone, but especially the unemployed and underemployed, to obtain the necessary job skills to be qualified for the jobs that are being created. Recognizing the increasing diversity of our workforce, Inclusive Dubuque is critical to Dubuque's future success. There are some rays of hope. 1 . In January 13, 2018, a Market Watch article reported the following, "After at least two decades in which more people were entering retirement than into the workforce, the tide is turning. For the next two decades, it will be just the reverse." 2. There are 552,059 college students (undergraduate, graduate, and continuing education) within a 100-mile radius of Dubuque and 64,000 in just the tri-state area. 3. Automation will make companies more efficient. 4. The work ethic and company loyalty reputation for people from this area are legendary and known far and near. Now, how does Dubuque succeed and make a community of choice for the workforce that is so desperately needed? One of the most important responses is to participate in partnerships in response to the Imagine Dubuque 2017 Comprehensive Plan and the 2037 Call to Action to make Dubuque a more Viable, Livable and Equitable Community. A year of community outreach produced over 12,500 ideas from over 6,000 people from all sectors of Dubuque. This is the City roadmap for the next 20 years as it replaces the 1995 Comprehensive Plan, which replaced the 1936 Comprehensive Plan. -4- I will ask again, how do we succeed and make Dubuque a community of choice for the workforce that is so desperately needed? Participate in partnerships to implement the City's Vision, Mission, Goals, and Priorities developed annually by the Mayor and City Council. 2032 VISION STATEMENT Dubuque 2032 is a sustainable and resilient city and an inclusive and equitable community. Dubuque 2032 has preserved our Masterpiece on the Mississippi, has a strong diverse economy and expanding connectivity. Our residents experience healthy living and active lifestyles; have choices of quality, livable neighborhoods; have an abundance of fun things to do; and are engaged in the community. CITY MISSION STATEMENT Dubuque city government is progressive and financially sound with residents receiving value for their tax dollars and achieving goals through partnerships. Dubuque city government's mission is to deliver excellent municipal services that support urban living; contribute to an equitable, sustainable city; plan for the community's future; and facilitate access to critical human services. CITY OF DUBUQUE GOALS 2022 • Robust Local Economy: Diverse Businesses and Jobs with Economic Prosperity • Vibrant Community: Healthy and Safe • Livable Neighborhoods and Housing: Great Place to Live • Financially Responsible, High-Performance City Organization: Sustainable, Equitable, and Effective Service Delivery • Sustainable Environment: Preserving and Enhancing Natural Resources • Partnerships for a Better Dubuque: Building Our Community that is Viable, Livable, and Equitable • Diverse Arts, Culture, Parks, and Recreation: Experiences and Activities • Connected Community: Equitable Transportation, Technology Infrastructure, and Mobility POLICY AGENDA items are issues that need direction or a policy decision by the City Council, or need a major funding decision by the City Council, or issues that need City Council leadership in the community or with other governmental bodies. The policy agenda is divided into top priorities and high priorities. -5- 2017-2019 POLICY AGENDA TOP PRIORITIES (in alphabetical order) • Central Avenue Revitalization: Streetscape and Business Development • Citywide Flower Planting Program • Communitywide Solar Strategy • Comprehensive Plan: Adoption • East-West Corridor Study Implementation • Master Plan for Chaplain Schmitt Island • South Port Redevelopment Master Plan • Splash Pad HIGH PRIORITIES (in alphabetical order) • Crime Prevention Program Expansion • Dilapidated Buildings/Structures • Five Flags Center Study • Inclusive Dubuque • Kerper Boulevard Revitalization Report • Multicultural Family Center: Colts Building Direction and Funding • River Cruise Docking Facilities • Roosevelt Road Water Tower MANAGEMENT AGENDA items are issues for which the City Council has set the overall direction and provided initial funding, may require further City Council action or funding, or are major management projects that may take multiple years to implement. The management agenda is divided into top priorities and high priorities. 2017-2019 MANAGEMENT AGENDA TOP PRIORITIES (in alphabetical order) • CHANGE Program: Implementation • Citywide Traffic Signal Synchronization • Comiskey Park Expansion and Renovation • Crescent Community Health Center: Development Agreement • Greater Dubuque Development Corporation Downtown Transformation (True North) • Residential Housing Upgrade/Flood Protection Program • Westside Water System: Implementation HIGH PRIORITIES (in alphabetical order) • Affirmatively Furthering Fair Housing Plan: Development • Cartegraph Partnership: High-Performance Government • City Performance Measures/Open Data Catalog/Data-Driven Governance • International City/County Management Association (ICMA) Fellowship International Exchange • Leisure Services Department Assessment • Parking Ramp Maintenance: Direction/Funding • Teen/Young Professionals/Seniors: Jackson Park Pilot Program • Water & Resource Recovery Center Nutrient Trading -6- Comprehensive Plan In September 2017 the Mayor and City Council adopted a new comprehensive plan, "Imagine Dubuque 2037: A Call to Action." The comprehensive plan serves as a guide for the community's physical, social, and economic development. It can only be considered successful through the input and implementation of the community at-large. Engaging the community in a conversation about the future of Dubuque was at the core of the Imagine Dubuque process. Comprehensive plans are policy guides. Unlike zoning or city codes, they are not regulatory in purpose or application. Information in the Comprehensive Plan is used in many facets of city life. Of greatest note is its role in informing City Council goal setting, which creates the annual budget priorities and land use decisions; the plan is not a substitute for the annual City Council goal setting process. As stated in the plan, "It is hoped that you will heed this call to action. It is your responsibility to develop the action steps, create the strategies for success, be inclusive in your efforts, and make your community sustainable and resilient. These are your ideas and you have the responsibility to participate and move them forward." It was imperative to city leadership that the process of developing the comprehensive plan be inclusive and representative of the community. A year of community outreach produced over 12,500 ideas from all sectors of Dubuque. This outreach took many forms, from casual conversations at pop-ups events such as the Farmers' Market to focus groups, workshops, surveys, and on-line submissions. Beginning with Dubuque's Vision 2000 process initiated in 1990, the City has developed a tradition of local community planning excellence, and the comprehensive plan integrates those past planning efforts into one consistent vision for the community's future. The comprehensive plan serves as a guide for the community's physical, social, and economic development. It is a community-wide resource that can only be considered successful through the input and implementation of the community at-large. Engaging the community in a conversation about the future of Dubuque was at the core of the Imagine Dubuque Comprehensive Planning process. That focus on listening intently to residents and tackling community-wide challenges together is one of the key reasons Dubuque was named an All- America City by the National Civic League four times in just 10 years! Communities are dynamic - economic conditions change, technology causes change, and people change. A comprehensive plan must, in turn, be dynamic. It cannot be viewed as a reflection of any one moment in time, rather it is an evolving vision based on the lessons history offers, current conditions, and anticipated issues and opportunities. The comprehensive plan is typically evaluated and updated approximately every five years or as needed to assure it is relevant to current community issues and priorities. However, the planning process - if done in a way that reaches out and responds to all areas of the community - is indispensable in creating policies that reflect the values and desires of Dubuque. The process used to create the Imagine Dubuque Comprehensive Plan, and the plan itself, is based on listening closely to the ideas and desires of the community. -7- Dubuque's planning history begins in the 1930s, when noted landscape architect and city planner John Nolen was retained to develop the first comprehensive city plan for Dubuque. Considered by many to be the "Father of City Planning," Nolen advanced the City Beautiful movement of the late 19th and early 20th Centuries to address many of the physical, economic, and social facets that shape urban life, thus giving rise to modern urban planning. While the beauty of one's environment, both physical and natural, was always central to Nolen's approach to successful communities, he also taught that purpose, function, and efficiency was equally vital. Adopted in 1936, the first plan for Dubuque established the framework for coordinated growth and development. Nolen noted prior to 1936, much of Dubuque's progress was disjointed. He noted Dubuque was blessed with many out-standing and praiseworthy qualities; however, greater coordination throughout the city would build a stronger economy and community. Unfortunately, the City did not adopt a replacement to this 1936 comprehensive plan until 1995. This almost 60-year hiatus cost the community dearly. During that period, Dubuque went from a thriving, bustling, growing community to one devastated by flooding, severe economic downturns, and being ignored in the 1960s, 1970s, and 1980s when the interstate highway system was being built. Initially, Dubuque began to stagnate and then began to drastically shrink, losing population and employment. The recession and farm crisis of the early 1980s had devastating effects on the Midwest and Dubuque. As farm families struggled with the loss of their land and livelihoods, so too did local businesses. Though farmers bore the brunt of the crisis, its impacts were far reaching. Dubuque's economy was strongly influenced by its meat-packing and construction-equipment industries which were impacted by the recession. The combined effects of the recession, the farm crisis, and a changing national economy resulted in massive layoffs and economic decline. By January of 1982, Dubuque's unemployment was the highest in the nation at 23%. Between 1980 and 1990, Dubuque lost 7.8% of its population. In 1983, the Chamber of Commerce estimated that 10% of housing stock was vacant and by 1984 the average home value dropped 9%. Dubuque needed to reinvent itself and diversify. Out of this adversity arose the realization that if Dubuque were to succeed, it must return to those fundamental tenets of Planning, Partnerships, and People working together to make a difference. Residents, business, education, philanthropy, labor, not-for-profits, and government must plan and work together to build a stronger, more resilient, and diversified economy and community. Fortunately, in 1990, the City Council split the Planning and Zoning Commission into two separate entities and directed the newly formed Long Range Planning Commission to conduct a process to create a future vision for the community. In 1992, the City Council adopted Vision 2000. This then launched a three-year process that culminated in 1995 with the adoption of the first comprehensive plan since 1936. Thousands of citizens participated in this five-year process, and the results received broad-based community support. Multiple specific action plans were then developed as the community worked to achieve the new vision, including riverfront development, downtown, and industrial park master plans. The 1995 comprehensive plan, entitled Creating the Future, was built on the grassroots visioning effort and around the physical, economic, and social environments of the community. A balanced approach to community development was once again prioritized. At this same time, the Dubuque community also began to reinvent the riverfront. People, Planning and Partnerships -8- were put in place and the America's River Project was underway. The formerly disconnected, declining industrial Port of Dubuque was transformed into a destination for tourists and residents alike. Community planning continued in earnest. The new comprehensive plan was updated in 2002, 2008, and 2012. The formation of the Dubuque Racing Association, Dubuque Main Street, the Convention and Visitors Bureau, Sustainable Dubuque, the Greater Dubuque Development Corporation, the Dubuque Area Labor-Management Council, and the Community Foundation of Greater Dubuque have been critical to the success Dubuque has been experiencing. In 2005, something very special happened. The Community Foundation of Greater Dubuque and the Dubuque Area Chamber of Commerce led the Envision 2010 process. The community was asked what ten projects they would like to see adopted by 2010. Over a 12-month period, thousands of citizens became engaged in the community conversation; with thousands of ideas submitted, the list eventually was reduced to ten projects. In addition, individual organizations, like the Greater Dubuque Development Corporation, began to create strategic plans. The Greater Dubuque Development Corporation began a series of five- year economic development plans. These plans were strongly anchored in specific action steps and measurable outcomes that led to tremendous progress with the number of people working in Dubuque County growing from 37,000 in the 1980s to over 60,000 in 2017. During this time, the average wage and median household income growth exceeded the rate of inflation, and millions of square feet of commercial, industrial, and residential construction occurred. Sustainable Dubuque is a City Council adopted, community-created, and citizen-led initiative whose story officially begins in 2006. A City Council priority each year since, the community is continually working to expand awareness, create partnerships, and encourage initiatives involving all sectors of the community to make Dubuque a more viable, livable, and equitable community. By 2012, Sustainable Dubuque had fully developed and made significant contributions in the community. The framework and principles of Sustainable Dubuque were incorporated in 2012 into the City of Dubuque Comprehensive Plan, further reinforcing the relationship between sustainability and comprehensive planning efforts. In 2012, community leaders from business, nonprofits, education, government, philanthropy, and the faith community came together and developed a vision for Inclusive Dubuque. Inclusive Dubuque is a peer-learning network of partners committed to supporting an equitable and inclusive culture to meet the economic and cultural needs of a diverse community. The network works collaboratively to eliminate bias in Dubuque. With the collective impact model led by the Community Foundation of Greater Dubuque, Inclusive Dubuque is a large network dedicated to advancing justice and racial equity. The 2017 Imagine Dubuque Comprehensive Plan is a new plan that reflects the Sustainable Dubuque model for a more viable, livable, and equitable community, and embraces the Inclusive Dubuque vision: to have an informed, equitable, and inclusive community where all people feel respected, valued, and engaged. Imagine Dubuque builds on these past planning efforts, but takes this comprehensive plan direction directly from the community with the most extensive public engagement process ever undertaken in Dubuque. -9- It will take significant time, effort, and in many cases funding, to achieve the vision outlined in this Imagine Dubuque Comprehensive Plan. It is the community's responsibility to develop the action steps, create the strategies for success, be inclusive in their efforts, and make the community sustainable and resilient. As the City approaches implementation of the plan, it needs to be remembered that this is a community plan and the city should not take the lead on items best implemented by others. The City does need to identify ways to encourage and support others and to partner where appropriate to make the plan a reality. It is an important thing to remember is that this is a 20-year plan and all the public and private resources to implement the plan components will not be available all at one time. One of the challenges that will be presented to the Mayor and City Council will be requests that come from organizations for funding assistance to help with the implementation of comprehensive plan components.A recent example is the request for$20,000 per year as a line item in the annual City budget that would be provided to the Dubuque Eats Well Coalition "to 1) support the start-up and first year's work of the Council, and 2) establish a community food systems development tool." One challenge to this request is this issue does not appear in the City Council list of priorities for this budget cycle. The City of Dubuque currently has grant programs designed for requests similar to this,though the idea of continuous annual funding poses a special challenge and potential burden on the property taxpayers in the community. Grants to Community Organizations & Residents The City of Dubuque utilizes four grant programs to financially support organizations and residents in the community that are partnering with the City to achieve the City Council's Goals and Priorities. The funds are strategically invested to empower non-profits, businesses, faith organizations, schools, and residents to implement projects that address problems they see in their neighborhoods or organize events that build community. This investment is key to implementing projects that meet Council priorities like creating a more equitable and sustainable community, or the recommendations from the Imagine Dubuque Comprehensive Plan, as examples. They often provide financial support to accomplish initiatives that the City cannot or should not accomplish on its own. In 2016, the City staff responsible for administering the grant programs described below began meeting to identify ways in which the programs could be better coordinated. Efforts are currently underway to align reporting requirements for each program, so that staff can more accurately reflect the impact of grantees' work in the community, and to intentionally integrate an equity lens into all program requirements. Purchase of Services The Purchase of Services grant program is designed to provide support for human service programs in the City of Dubuque that further the City's goals, objectives and priorities. Historically,the Council has allocated approximately$100,000 annually for non-profits to start or expand an existing service. -10- Not-for-profit organizations within the City of Dubuque that provide year-round human services programs and whose mission is consistent with furthering the City's goals, objectives and priorities are eligible. The City may award up to $25,000, provided it is no more than 75% of the project budget. An applicant is eligible to receive funds for no more than four years in the competitive program. The FY 2019 budget recommends an allocation of$80,784 in General Fund and $39,681 in Community Development Block Funds for a total of $120,465 to the Purchase of Services program. Recommendations for funding will be made by the Community Development Advisory Commission after the FY 2019 budget is adopted. Sustainable Dubuque Community Grants The goal of the Sustainable Dubuque Community Grant Program is to provide small amounts of funding to assist non-profits, businesses, clubs, organizations, and groups of passionate residents in implementing their ideas to make Dubuque a more sustainable place and to encourage all residents and businesses to be part of the Sustainable Dubuque initiative. Grants of up to $2,500 may be awarded to any group of individuals to implement a project that helps to achieve the Sustainable Dubuque vision and includes a component of community education and/or engagement. $25,000 in General Funds is recommended in the FY2019 budget for this grant program. Neighborhood Grants This line item represents grants for neighborhood clean-up and beautification, communications, neighborhood improvement projects, and community-building initiatives. In the previous year, 22 separate grantswere awarded to neighborhood groups and non-profits operating in ourcommunity's low/moderate income neighborhoods. Sixteen smaller community-building grants were awarded to groups for activities such as neighborhood block parties, family fun day at Comiskey, Music in Jackson Park, movies in the park, neighborhood holiday celebrations,and a Juneteenth celebration. $24,560 is recommended in the FY2019 budget for this grant program. Arts & Culture Grants Since 2005,the City of Dubuque has awarded over$2.8 million to area arts and culture organizations and other non-profits for programs that reach thousands of Dubuque adults and children each year. $245,000 is recommended in the FY2019 budget for these grant programs. The grants are divided into two categories. The Operating Support program ($210,000) provides operating support funding to established 501c3 arts and culture organizations located in the city of Dubuque that primarily serve Dubuque residents with year-round arts and culture events, programs, and services and can demonstrate a record of programmatic and administrative stability. The Special Projects program ($35,000) is designed to encourage arts and cultural programs that are inclusive and remarkable for their social and cultural vibrancy. The Special Projects program seeks to fund artistic, creative projects that utilize community engagement at their core. Eligible applicants are Dubuque not-for- profits with 501c3 and incorporated status, organizations who are affiliated with an umbrella organization, or other organized groups acting as a non-profit. While I do not make a recommendation in the Fiscal Year 2019 budget to increase the funding for any of these City grant programs, I think that would be a better option than providing annual line item funding authority from the City's general fund for these types of requests, except on a very limited basis. There are over 400 not-for-profit organizations in the Dubuque area, many -11- that would like to receive City funding. Should the City Council want to boost the funding in any of these grant programs, there are these choices: 1 . Increase the Fiscal Year 2019 recommended property tax levy. A 0.25% increase in the impact on the average homeowner (going from 2% to 2.25%) would change the dollar impact on the average homeowner from a $15.11 increase in costs to a $18.89 increase in costs. The property tax impact on commercial, industrial, and multi-residential properties would still show a decrease. This 0.25% increase would generate $129,817 per year in new revenues that could be placed in some of these grant programs. 2. Reduce some of the recommended expenditures in the Fiscal Year 2019 budget and place those savings in the City grant programs. If the funding to the organization is to be recurring each year, the eliminated expenditure should be recurring. 3. Delay a decision until Fiscal Year 2020 which would create an opportunity for this issue to be considered through the August 2018 City Council goal setting session where there will be decisions made on the Fiscal Year 2020 budget priorities. I support option #3. I believe in what the Eat Well Coalition wants to do but how does it compare with and how does it compete with (since funds are limited the allocation is a competition) things like those programs dealing with the opioid crisis, those supporting educational attainment outside of school for youth in poverty, those helping convicted criminals productively return to society, job training for unemployed and underemployed, the mental health crisis, and so many other good causes. A competitive grant process allows a citizen panel to make recommendations on how to allocate these limited resources taking into account City Council priorities and comparing requests against each other. That does not mean no community effort ever gets general fund line-item funding, but it does mean there should be strong reasons to ask the taxpayer to put a request on the same funding source as the Police and Fire Departments. As stated in the comprehensive plan, a strong economy is key to Dubuque's present and future success. While the City of Dubuque certainly has a role in promoting economic prosperity, partners like the Greater Dubuque Development Corporation, Dubuque Main Street, Northeast Iowa Community College, the Community Foundation of Greater Dubuque, the Dubuque Area Chamber of Commerce, East Central Intergovernmental Association, and others are key drivers in this area, all dependent on businesses creating jobs. 2017 marked the conclusion of the Greater Dubuque Development Corporation Next Campaign, a very successful effort to promote economic growth focused on job creation, increased wages, construction investment, and population growth. Targets established by the Greater Dubuque Development Corporation in each of these categories in 2012 were exceeded by the end of the campaign in 2017. Greater Dubuque Development Corporation recently launched their new Greater Dubuque 2022 campaign to continue that success over the next five-year period. -12- Goals for this new campaign include: • 64,000 jobs, an increase of over 5% from current levels • $800 million dollars in new residential and commercial construction • $60,000 median household income ($47,450 in 2015) • 100,000 population in the Greater Dubuque Area (97,000 in 2017) The five pillars for progress of the Greater Dubuque Development Corporation include: • Business Retention and Expansion • Workforce Solutions • National Marketing • Sustainable Innovations • Start-Up Dubuque The results of the GDDC Business Retention and Expansion interviews (341) of regional corporate chief executive officers for July 1 , 2016, show 55% with increased sales, 52% reporting increased market share, and 40% reporting plans to expand. -13- ti Prepared by City Manager's Office; Address: City Hall, 50 W. 13th Street;Telephone: 589-4110 RESOLUTION NO. 43-18 ADOPTING THE CITY OF DUBUQUE FISCAL YEAR 2019 ANNUAL BUDGET it NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the annual budget for the fiscal year ending June 30, 2019, as set forth in the Adoption of Budget and Certification of Taxes and supporting state budget forms showing the revenue estimates and appropriation expenditures and allocations to programs and activities for said fiscal year, is adopted. Section 2. The City Clerk is directed to make the filings required by law. Passed, approved and adopted this 28th day of Febr ary 2018. c /41 Roy D. ol, Mayor Attest:--- ------ a--e. V-v Trish L. Gleason, Assistant City Clerk Prepared by City Manager's Office; Address: City Hall, 50 W. 13th Street;Telephone: 589-4110 RESOLUTION NO. 44-18 ADOPTING THE CITY OF DUBUQUE FIVE YEAR CAPITAL IMPROVEMENT PROGRAM WHEREAS, a recommended five-year Capital Improvement Program for the period beginning July 1, 2018, and ending June 30, 2023, for the City of Dubuque has been prepared and submitted to the City Council; and WHEREAS, the five-year Capital Improvement Program describes specific capital improvement projects, provides estimated costs for those projects, proposes sources of funds for each of them, and schedules the year during which each project will be undertaken; and WHEREAS, the capital improvement projects for the first year are included in the Fiscal Year 2019 budget for the City of Dubuque; and WHEREAS, the five-year Capital Improvement Program will be reconsidered annually by the City Council and appropriately revised; and WHEREAS, the adoption of the five-year Capital Improvement Program is a prudent measure to provide continuity of programs and is in the best interest of the City of Dubuque. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the five-year Capital Improvement Program for the period beginning July 1, 2018, set out in the Fiscal Year 2019-2023 Recommended Capital Improvement Budget as amended, is hereby approved and adopted as the proposed allocation of City resources for capital improvements as scheduled in the years shown, subject to annual review and revision. Passed, approved and adopted this 28th day of Februa 2018. tifri Roy D. Buo ayor Attest: C-� Trish L. Gleason, Assistant City Clerk STATE OF IOWA {SS: . DUBUQUE COUNTY ERTIFICAT-ION OF-PUBLICATION— --- I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation,publisher of the Telegraph Herald,a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa;hereby certify that the attached notice was published in said newspaper on the following dates: February 17, 2018, and for which the charge is $191.65. ,---- --4-ae,,,,--24 Subscribed to before me, a Notary Public in and for Dubuque County, Iowa, this e,foeo day of .. 0?----',.viet-'2-ee—re--1,- , 20 /eS' . I Notary Public in and for Dubuque County, Iowa. 1 7, TARN/K WESTERMEYER C.,ommsson• - N r b.r 154885 • 7,--,,,i,• In . u 0 ,., `..)mriiission En.Feb 1,2020 . .• ...... , :1 ;,, 2 '-• . . . PUBLICNOTICE OF HEARING . ,,•.;•••'-,..'". .,' -r•'..„ .• .,„,,,..., Form 631.1 , . • FISCALYERBEGINMNGThQ'LY1 2018 ENIDINGJUNE3O 2019 ' ::. 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Pp,,; 31,976 , g. 345 Total Revenues and Other Sources 6I5v20; :269 ,:::,36 ;31123;64;413 Ol4 i‘1& Expenditures&Other Fiaaina Uses Ji1 IV „ vg 0blicSafety ,161 5 , 9,7'25.4n, 29e078t Public Works 11 12701671 . 11547440 - h and Sociej-Cpigs0 . .t , 46,43r132 _ :44i,595t943286 Culture and Recreatin IAd •,174z491 17 *0 2 4f14569009 I and QaaVS!9*709 ' S2v • 14 5s1E47'815 0: 44745 . _,8926106 Debt Service : , , 22 10662063 10;073'974 ' 2 31960 Caital Projects' ' ' '- 23, --27,868,715 74,872,648. .27904170 Total at-A6tiilti§s ?Peidittres0666,066 167 310 45i1. ; 12241 179 Business P"PEnterpriq§ 0 , . E24,666 ; 71; 50i4g64269;682 Total ALL Exp0:1ii7!7l' 4 , W78"13§ 451 tiabfet*pyfw1A :9;;' I:* r36t92., t. rntirE, ietJtuFp , ai0141 ,P ,,* - . ' :,0:7‘;,:c:!t ;7; 1! 8:i ;;i;. :5 !0 Sources Over ihdr)gxPei!ti;eiillr1tlit a . 532,771 ,5 2 4 „ 1 I1207 Beginning FundBelanoe'4O Y 1 30 397693. 772540 864 71419,657 Ending- tliie166400ei0'; z , ,31 3502-t :89 769 337e72!540'064 , - .:C' ''' AT ,, ..... ,. •'..,..,;,',•';:: •,,', •'....' •. .!,...,. r.,. . . . . ... - . . r FY II Greatere I N FOACTION Action DASHBOARD 16-17 Dubuqu Company Visits July 01, 2016 TO June 30, 2017 Company Plans International 3% TOTAL 40 0/0 341V s r s Local National HAVE PLANS TO 28% 26% EXPAND 36,943 Regional 43% Pendir Yes 20% 12% TOTAL EMPLOYEES PRIMARY MARKET No 68% Sales&Market Share MANAGEMENT Decreasing Decreasing CHANGES 12%r5% Pending 6% / Yes 9% Stable \ Stable Increasing55% 43% Increasing 33% 52% 3 No 85% SALES MARKET SHARE OWNERSHIP CHANGES Community Strengths&Weaknesses TOP 5 STRENGTHS TOP 5 WEAKNESSES 220/ Qualityoflife/ 290/ Workforce 0 Amenities 0 Challenges 18 Q0 Community Leadership/ Crime/ /0 Support/Partnerships 200/ Social Tension 18Q/Q Location/ 0 Ci Cost/Fees/ Q Customer-Supplier Access 1 6 /Q R es 1 0 Market Size/ Connections/Loyalty 1 2 /Q 0 Population/Market /0 Size/Capacity 130/ Employee Work Ethic/ 1 20/ Transportation 0 Longevity Q Road/Air -14- Barriers to Growth Community Services Index Scale:1 is poor, lis excellent Fire 148 341 Ambulance Police 0 F Col leges&Universities COMPANIES Community College HAVE A BARRIER TO Education Health arae GROWTH Air REE Community Services Trucking Ilit worChallenkforgeces Community Planning 36 C�0 Highways iiii 25% Population/Market size/capacity Zoning/Building Public Transportation 4.669 1 �� Land/Building/ Availability-Cost i d Care 4.86 city costs/ Workforce Services 4 84 Is��0 Fees/Rates Regulatory Transportation Streets 5 �O Road/Air Traffic Flow/Control 4.44 Pro perry Taxes 4.09 Air Passenger Service 0 1 3 a i 6 7 Utility Services Index Reasons to Gas 5.76 Expand Elsewhere Water 5.76 Sewer 5.70 i 86 E Cellular 5.54 1 OF3 41 Teleclecomom 5.27 I COMPANIES COULD EXPAND Internet Access OUTSIDEOF Internet Speed 5.06 DUBUQUE TO:E 310/0 WorkforceChallenges Workforce Assessment ® Population/Market 26% Size/Capacity 1 QO Corporate Community /O Decision o Problem Yes 60% 36% / Industry Costs/ ProblemU7Q Fees/Rates / 64% ' Land/Building/ /� Availability-Cost RECRUITMENT IF YES, IT IS COMMUNITY CHALLENGES? OR INDUSTRY? -15- In the new 5-year campaign, GDDC has added a sixth pillar focused on reinvestment in the area of Dubuque east of the bluffs and north of 10th Street: • "Finding Dubuque's True North" Greater Dubuque Development Corporation 2017 Community Perception Survey One of the many benefits that will result from this expanded partnership with the community is the "Greater Dubuque Development Corporation 2017 Community Perception Survey" conducted in September 2017, with the results just recently available. While I believe this poll indicates there is much work to be done, I also believe the results are notable: • Only 11 % disagreed with the statement, "Dubuque is a Safe Place to Live." • Only 5% disagreed with the statement, "Dubuque is a Good Place to Live." • Only 7% disagreed with the statement, "Dubuque is a Good Place to Work." • Only 18% disagreed with the statement, "Dubuque is on the Right Track." • 94% feel Safe or Very Safe in "Their Own Neighborhood." • From across the city, a disappointing 27% disagreed with the statement, "I Feel Safe in the North End." • From across the city, a disappointing 38% disagreed with the statement, "I Feel Safe in the Downtown." • Only 10% disagreed with the statement, "Diversity is Beneficial in Our Community." -16- 1 . General Impressions of Dubuque and Quality of Life Measures Note: due to rounding, percentages might not add up to 100% • 73% Say Dubuque is heading on the Right Track ° 18% say Dubuque is heading in the Wrong Direction ° 9% say they are Unsure 80.090 6O.O%- c m V y 40.0%- 0- 72.7% 0.I0%- a72.7%a 20.0%- p/ 18.0% 9.3% 0.0% Right track Wrong direction Unsure Thinking about the direction of the Dubuque community, would you say you believe the community is on the right track or headed in the wrong direction? Figure 1.1 Direction of Community -17- On a scale of 1 to 4, with 1 being strongly disagree and 5 strongly agree, respondents were asked to state their level of agreement with several statements about Dubuque. A response of 3 is reflective of a neutral position to the statement. Figure 1 .2 provides a summary of the affirmative responses. ▪ 84%Agree/Strongly Agree that Dubuque is a good place to live o 11% Neutral o 5% Disagree/Strongly Disagree ▪ 72% Agree/Strongly Agree Dubuque is a good place to work o 18% Neutral o 7% Disagree/Strongly Disagree ▪ 82% Agree/Strongly Agree that Dubuque is a good place to raise a family o 11% Neutral o 7% DisagreelStrongly Disagree ▪ 62% Agree/Strongly Agree with statement that Dubuque is a safe place to live o 11% Disagree/Strongly Disagree o 27% Neutral 100 80 ICACA 0 0 (0 GO w 0 a40 83-h 82.5 20 0 Dubuque is a safe Dubuque is a good Dubuque is a good Dubuque is a good place. place to live. place to work. place to raise a family. Figure 1.2 Agreement with Statements on Community Conditions -18- 2. Area/Neighborhood Findings Residents were asked about their frequency of going to different parts of the community for shopping and other opportunities, their perceptions of safety in their own neighborhoods, as well as that across Dubuque. • In terms of frequency of going to parts of the community for "shopping, services, restaurants, entertainment, or to use parks, bike trails, or other recreation facilities," 43% indicated that in an average month they went to the Westend 10+ times for such things, 23% indicated going to the Northend 10+ times, and 19% to Downtown 10+ times. 50.0%- 40.0%- 30.0%— C %-40.0%-30.0%— _ w a 44.4% 20.0%- 10.0%- 21 2% 9 1J % 15.2% 0.0% 0 times 1-4 times 5.10 times 10+times In an average month, how often do you go to Dubuque's DOWNTOWN for shopping, services, restaurants, entertainment, or to use parks, bike trails, or other recreation facilities? Figure 2.1 Monthly Frequency of Downtown shopping, services, etc. -19- 40 0 on QV V d n_ [43.2% 123.1% 10 0%1 17 8%1 1 S.7%1 1 1 C' liar.,, 1-4 times 5-30 tinges 10+times In an average month, how often do you go to Dubuque's NORTHEND for shopping, services, restaurants, entertainment, or to use parks, bike trails, or other recreation facilities? Figure 2.2 Monthly Frequency of Northend shopping, services, etc. 50.0%- 40 0%— t 300% 0 a 0 -1_Wit•-a 20.0%— 27.7% 24.6% 10.0%— D.0% 0.0%-0.0% , 0 times 1-4 times 5-10 times 10-0-times In an average month, how often do you go to Dubuque's WESTEND for shopping, services, restaurants, entertainment, or to use parks, bike trails, or other recreation facilities? Figure 2.3 Monthly Frequency of Westend shopping, services, etc. -20- People overwhelmingly tend to feel safe in their own neighborhood, with 94% saying they feel very safe or safe in their neighborhood (56% feel very safe, 38% feel safe). 5% indicated they feel unsafe, and 1% feel very unsafe. Figure 2.4 provides a summary of this across the parts of the community. 100.O%_ ■Downtown ■Northend ❑Westend 80.0%- •Another part 600%- up- — c a_ 40.O% 20 a.0 r 1 11111L .i Very Safe Safe Unsafe 'v'ery Unsafe In general, how safe do you feel in your own neighborhood? Figure 2A Perception of Safety in Own Neighborhood by Location of Respondent. • When asked to agree or disagree with the statement "I feel safe in the [Downtown/ Northend/Westend]," respondents reported feeling the safest in the Westend. o 92% agreed with the statement that they feel safe in the Westend • 4% disagreed, and 4% were unsure (see figure 2.5) o 57% agreed with the statement that they feel safe in the Northend • 27% disagreed, and 15% were unsure (see figure 2.6) o 46% agreed with the statement that they feel safe in the Downtown • 38% disagreed, and 17% were unsure (see figure 2.7) -21- 100D%- 1.1 Downtown •Northend 111Westend 80 0%- =Another part: 000%- w .10 C 0, 400%- 20 0%- 00% Agree Disagree Unsure I feel safe in the Westend area. Figure 2.5 Perception of Safety in the Westend by Area of Residence 1 00 0%- =Downtown %- =Downtown •Northend CWestend aoo%- c •Another part: 60 0%- w - sa d 40 0%- 20 0%- 0.096 Agree Disagree Unsure I feel safe in the Northend area. Figure 2.6 Perception of Safety in the Northend by Area of Residence _22_ 100.0%- ■D owntovwn ■rJorthend ❑1 +'estend ■Another part Go 0%— Z a- a- 0.0. 40.0%— i 20.0%- 0.0% Agree 0.0%0.0% Agree Disagree Unsure I feel safe in the Downtown area. Figure 2.7 Perception of Safety in the Northend by Area of Residence -23- 3. Diversity and Dubuque On a scale of 1 to 5, with 1 being strongly disagree and 5 strongly agree, respondents were asked to state their level of agreement with several statements about Dubuque and the issues of diversity and inclusion. A response of a 3 is reflective of a neutral position to the statement. • 68%Agreed/Strongly Agreed with the statement "Diversity is beneficial to our community." ° 10% Disagreed/Strongly Disagreed 19% Neutral 3% Unsure 50.0%- 40.0%- 30.0' c a, u a) 1 20.0%- 21 i°: 10.0%- 1 .. pay 14.111115 4% f c}`1 I 4 1 STRONGLY 3 4 5 STRONGLY DISAGREE AGREE Diversity is beneficial to our community. Figure 3.1 Agreement with "Diversity is beneficial to our community" -24- • 55%Agreed/Strongly Agreed with the statement "Dubuque is a welcoming community to people of different background." O 16% DisagreedlStrongly Disagreed o 29% Neutral o 1% Unsure 50 0%- 40 0%— aa 30-0%— C dl d. 20,0%- °0 10.0%- 4.6% 0 0% 1 - I I I 1 STRONGLY 3 4 `}TR,: 1GLY DISAGREE AGREE Dubuque is a welcoming community to people of different backgrounds. Figure 3.2 Agreement with "Dubuque is a welcoming community to people of different backgrounds" -25- • 46%Agreed/Strongly Agreed with the statement "Dubuque is an inclusive community." o 13% Disagreed/Strongly Disagreed o 36% Neutral o 5% Unsure 50.0%- 40.0%- e. 30 0%- c V L 4u a 20.0%- 36 4% 27.2% mob- ma 0.0% 1 STRONGLY 2 3 4 5 STRONGLY DISAGREE AGREE Dubuque is an inclusive community. Figure 3.3 Agreement with "Dubuque is an inclusive community" -26- 4. Diversity and Dubuque When asked to choose from a list of issues what is "the biggest challenge facing the community as a whole," 39% said race relations, 21% limited employment options, and 17% said poverty. 40.0%— .30 ai s- QF 20.0%— 39.0% a 10.0%— 20.6% 10.46 1.196 None Substandard Unsure_Dont Poverty Limited Race issues housing Know employment options Of the following issues,which do you think represents the biggest challenge for the Dubuque community as a whole: Figure 4.1 Biggest Challenge Facing Dubuquc -27- When asked to choose from a list of issues "what is the biggest challenge in their neighborhood," limited employment options, race relations, and substandard housing were the top 3 issues selected. However, the most popular response to the question was unsure/don't know. Cw CI 24.3%j 1r_ io , IIIM14.7 111"1 NM ED poverty Substandard Bone Pace issues Limited Unsure Dont housing employment lii:no Options Of the following issues,which do you think represents the biggest challenge for your neighborhood in particular: Figure 4.2 Biggest Challenge Facing Neighborhood -28- Notably, race relations and substandard housing were the most notable issues for those living in the downtown area. Figure 4.3 shows responses regarding biggest challenges by area of residence of respondents. Which part of the community do you live n? ■Downtown 40.0%— •Northend D Westend •Another part :1 c L w 0_ 1I 0.0% , Li Po;eity Substandard Race issues Limited None Unsure Dont housing employment Know options Of the following issues, which do you think represents the biggest challenge for your neighborhood in particular: Figure 4.3 Biggest Challenge to Neighborhoods by Area of residence -29- 5. Race Relations in Dubuque Respondents were asked their level of agreement with the statement "the community has been responsive to race relations issues." 40% said they Agreed/Strongly Agreed, 17% Disagreed/Strongly Disagreed, 38% Neutral, and 4% Unsure. 40.0%-1 36 0%-1 1-• C a 41L 200%" a 38•Sae, 10 0%-i 22.1% 2% v 10.3�b NEI 1110 0.0% 1 - - 1STRONGLY 2 3 4 5STRONGLY DISAGREE AGREE The community has been responsive to race relations issues. -30- Respondents were asked their level of agreement with the statement"race relations in Dubuque are improving." 33% said they Agreed/Strongly Agreed, 28% Disagreed/ Strongly Disagreed, 36% Neutral, and 3% Unsure. 40.0%- 30.0%- 3+ C _ v a► 20.0%- 0 36 2% 10:0%- 16 9% % 16.9% 10.8% 0.0% 1 STRONGLY 2 3 4 5STRONGI DISAGREE AGREE Race relations in Dubuque are improving. -31- Respondents were asked their level of agreement with the statement "race relations in Dubuque are getting worse." 38% said they disagreed/strongly disagreed, 30% say they agreed/strongly agreed, 30% Neutral, and 3% Unsure. G) 29.7% 10 i,,%- 19.5% 18.2% 14.5% 15.4% 0 008 1 STRONGLY 2 3 4 5 STRONGLY DISAGREE AGREE Race relations in Dubuque are getting worse. -32- Respondents were asked their level of agreement with the statement "race relations in Dubuque are good." 23% said they Agreed/Strongly Agreed, 32% Disagreed/Strongly Disagreed, 42% Neutral, and 2% Unsure. 50.0% 40.0° 7i .0% C CI �l�1 y 42.2f4 20.0% 10.0% 18.6% 16.8% 13.7% Q II°ia - 1 `<:TPCd 1GL e 3 4 5 STRONGLY DISAGREE AGREE Race relations in Dubuque are good. -33- Fiscal Year 2019 Budget Recommendation The goal of the Fiscal Year 2019 budget recommendation is to maintain the momentum of our community. The budget has been built around the vision, mission, goals, priorities and direction provided by the Mayor and City Council at the August 2017 goal setting session, with input from the community. A series of six public hearings will now be held by the Mayor and City Council before adopting a final budget on February 28, 2018. The Fiscal Year 2019 budget year begins on July 1 , 2018. The strategic investments that have been made by the Mayor and City Council in infrastructure and economic development initiatives are creating the intended results. As quoted previously several years ago, an independent source addressing public policies, Stephen Goldsmith, who is a professor of government at the Harvard Kennedy School stated, "If there is one place where public officials should consider taking on more debt, it is in an area crucial to the country's economic health, addressing deteriorating infrastructure -- roads, bridges, water systems and the like." "Now," he said, "is the time public officials should look at repairing their infrastructure. Historically low interest rates provide an opportunity to inject necessary capital much more affordably. Much of our infrastructure that is most in need of repair is deteriorating at a rate that far exceeds current interest rates." Not repairing or replacing a water plant for another four years would likely incur an annual cost three times higher than borrowing would, taking into account the rate of deterioration as well as the increasing cost of materials. He concluded that, "Officials who starve their capital budgets to help get past the bad times are really engaging in another form of accumulating deficits. Importantly, the strategic use of alternate financing structures, revenue sources, and public-private partnerships amount to a prudent investment." While in August 2015 the Mayor and City Council directed staff to start reducing the amount of City debt, previous investments are still paying dividends. With the current City strategy of more pay as you go investments and the acceptance that some debt will be issued each year, with a goal to retire more debt each year than is issued, the City will continue to be able to leverage past investment and create new opportunities to improve quality of life for residents, create jobs and maintain infrastructure. -34- Again in Fiscal year 2019 City staff has been able to meet that goal of retiring more debt than is being issued. Retired Debt Versus New Debt (In Millions) u, $25 0 $20 $18.9 $19.2 $19.4 $19.3 $19.6 $17.8 $18.5 $18.2 $17.4 $17.2 $17.0 316.4 $15 MI 11 Is $10 $10.0 $5 11$- $2.0 $2.0 $1.0 '.1.0 $1.0 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 25 FY 26 FY 27 FY28 Retired Debt •New Debt While accomplishing the Mayor and City Council priorities, the goal is to minimize the costs for the residents and businesses. Fiscal Year 2016 Budget Significant Actions Important historical context is provided by reflecting on the Fiscal Year 2016 budget and the significant actions the Mayor and City Council took to successfully deal with challenges at that time: • Eleven full-time positions were eliminated. Six were eliminated through lay-offs (with two of these employees able to be placed in other vacant positions). Five of the eleven positions were eliminated due to the City not receiving the Federal Lead Paint Hazard Mitigation grant. Fortunately, the City applied for another Federal Lead Paint Hazard Mitigation Grant and was successful, so four of those positions were restored in the Fiscal Year 2017 budget. • A select hiring freeze the City Council had implemented in Fiscal Year 2015 of 11.98 full-time equivalent positions was modified after a contribution from the Library Board reinstated 2.68 FTE in May 2015, with the remaining frozen positions extended for Fiscal Year 2016. 7.60 remained frozen in Fiscal Year 2017. -35- • Non-bargaining unit employees did not receive a pay raise in Fiscal Year 2016. • The Fiscal Year 2016 - Fiscal year 2020 Capital Improvement Program budget underwent significant modifications eliminating and delaying many projects and reducing future debt issuances. • The organizations with which the City partners with through grants and purchase of service agreements were also asked to sacrifice in Fiscal Year 2016. Generally, they received a 10% funding reduction and that reduction was recommended to continue in Fiscal Year 2017. • In Fiscal Year 2016, the City continued a freeze on certain training and travel for City Employees that began in Fiscal Year 2015. Recognizing the value of continuing education to create an effective, efficient, and innovative organization, that freeze was discontinued in Fiscal Year 2017. • In Fiscal Year 2016, the Utility Franchise Free on electricity and natural gas was increased from 3% to 5%. • In Fiscal Year 2016, rental property owners were asked to pay more of the cost of the Rental Licensing Inspection Program. Along with enterprise fund fee increases, these actions of the Mayor and City Council through the Fiscal Year 2016 budget process took the appropriate corrective action to compensate for the funding issues facing the City at that time. Fiscal Year 2019 Recommended Budget Property Taxes The Fiscal Year 2019 recommended City property tax rate of 10.5972 per thousand is a 2.71% decrease from Fiscal Year 2018, which follows a 2.47% decrease in Fiscal Year 2017. The average homeowner would see a 2% ($15.11) increase in their property tax payment for the City portion of their property tax bill. The average commercial property would see a 3.84% ($126.04) decrease, the average industrial property a 3.46% ($170.38) decrease, and the average multi-residential property a 7.13% ($143.71) decrease. Fiscal Year 2019 follows Fiscal Year 2018 where the average homeowner saw no change in their property tax payment for the city portion of their property tax bill, the average commercial property saw a 2.50% ($84.16) decrease, the average industrial property saw a 2.49% ($125.58) decrease, and the average multi-residential property saw a 7.13% ($143.71) decrease. While the City property tax rate did increase slightly in Fiscal Year 2017 (1 .29%) and residential property saw a 1 .08% increase, the average commercial property saw a 7.18% increase, the average industrial property saw a 4.05% decrease, and multi-residential property saw a 2.93% -36- decrease. Fiscal Year 2017 saw the elimination of two full-time positions, including a Park Ranger Position and a Parking Meter Service Worker. Residential property was revalued by neighborhood by the City Assessor for the January 1 , 2017, property assessments, which impacts the Fiscal Year 2019 budget. The average residential property value increased 7%. This revaluation of residential property resulted in the taxable value for the average homeowner calculation to increase from $130,357 to $139,493 (7%). City Property Tax Rate Comparison for Eleven Largest Iowa Cities Rank City Tax Rate 11 Council Bluffs $17.9072 10 Des Moines* $17.8600 9 Waterloo $17.6000 8 Davenport $16.7800 7 _Iowa City _ $16.3331 6 Sioux City $15.7708 5 Cedar Rapids $15.2162 4 West Des Moines* $12.7800 3 Ankeny* $12.2900 2 Dubuque (FY19) $10.5972 1 Ames $10.3759 AVERAGE w/o Dubuque $15.29 *Includes the transit tax levy adopted by the Des Moines Area Regional Transit Authority for comparability. Dubuque has the SECOND LOWEST property tax rate as compared to the eleven largest cities in the state. The highest rate (Council Bluffs) is 68.98% higher than Dubuque's rate, and the average is 44.30% higher than Dubuque. -37- Property Taxes per Capita Comparison for Eleven Largest Iowa Cities Rank City Taxes Per Capita 11 West Des Moines $1 ,080.48 10 Iowa City $880.57 1 9 Cedar Rapids $803.92 8 Ankeny $785.97 7 Council Bluffs $783.10 6 Davenport $728.35 5 Des Moines _ $657.24 4 Waterloo $583.82 3 Sioux City $524.31 2 Ames $513.91 1 Dubuque (FY19) $459.08 AVERAGE $734.17 Dubuque has the LOWEST taxes per capita as compared to the eleven largest cities in the state. The highest (West Des Moines) is 135.36% higher than Dubuque's taxes per capita, and the average is 59.92% higher than Dubuque. The projected Fiscal Year 2019 property tax asking of$26,516,204 is a $653,155 (2.53%) increase from Fiscal Year 2018. The total Fiscal Year 2019 budget recommendation ($174,823,105) is 3.01% more than the current budget year (Fiscal Year 2018). The Fiscal Year 2019 operating budget recommendation is $131 ,238,119 and the Fiscal Year 2019 Capital Improvement Program budget recommendation is $43,584,986. After the local option sales tax was passed by referendum in 1988 with 50% of revenue going to property tax relief, the average property tax classification over that 30 years has seen the following results: Prior to Sales Tax $ °lo FY 1988 FY 2019 Difference Difference Property Tax Rate $ 14.5819 $ 10.5972 -$3.9847 _ -27.33% Average Residential Payment $ 512.38 $ 770.81 +$258.43 +50.44% Average Commercial Payment $ 2,490.61 $3,154.39 +$663.78 +26.65% Average Industrial Property $ 6,975.00 $4,747.38 -$2,227.62 -31 .94% Average Multi-Residential Property (FY15) $ 2,472.99 $1 ,871 .76 -$601 .23 -24.31 % -38- As another gauge of operational efficiency, the City compared staffing levels with the other largest Cities in Iowa in February 2016: OVERALL COMPARISON OF FULL TIME EQUIVALENT EMPLOYEES #of FTEs Adjusted based City Population #of FTEs on Services Offered Des Moines 208,250 1524.00 1596.87 Cedar Rapids 128,901 1451.43 1449.43 Davenport 102,715 967.46 1027.52 Sioux City 82,372 788.77 795.37 West Des Moines 62,359 513.00 716.57 Dubuque 58,421 70197 703.97 Council Bluffs 61,864 499.00 689.28 Waterloo 68,358 557.17 687.80 Iowa City 75,522 598.48 649.42 Ames 62,514 572.00 594.76 Ankeny 53,099 234.22 455.56 Average Population 87,670 Average FTEs w/o Dubuque 866.26 _ Dubuque Compared to Average (162.29) Dubuque Compared to Highest (892.90) *The average FTE's without Dubuque is 866.26. Dubuque has 162.29 FTE's less than the average and 892.90 less than the highest (Des Moines). #of FTEs Adjusted based City Population #of FTEs on Services Offered Cedar Rapids 128,901 1451.43 1449.43 Davenport 102,715 967.46 1027.52 Sioux City 82,372 788.77 795.37 West Des Moines 62,359 513.00 716.57 Dubuque 58,421 703.97 703.97 Council Bluffs 61,864 499.00 689.28 Waterloo 68,358 557.17 687.80 Iowa City 75,522 598.48 649.42 Ames 62,514 572.00 594.76 Average Population 78,114 Average FTEs w/o Dubuque 826.27 Dubuque Compared to Average (12.2,30) Dubuque Compared to Highest ('45.46) **If you eliminate the cities that are least comparable to Dubuque (Des Moines due to size and Ankeny due to catching up on their rapid growth),the average FTE's without Dubuque is 826.27. In this scenario, Dubuque is 122.30 FTE below the average and 745.46 FTE below the highest (Cedar Rapids). -39- Position Eliminations, New Positions and Unfrozen Positions The Fiscal Year 2019 budget recommendation includes the elimination of 19.23 full-time equivalent (FTE) positions: FY 2019 Savings (Includes Department Position Type Benefits) FTE Building Building Inspector II Full-Time $ 86,938 1.00 Engineering Engineering Technician -Temp Full-Time $ 4,900 0.06 Housing Lead Paint Supervisor Full-Time $ 59,464 0.62 Housing Lead Paint Inspector Full-Time $ 99,050 1.24 Housing Lead Paint Assistant Full-Time $ 45,191 0.62 Parking Parking Supervisor Full-Time $ 95,113 1.00 Parking Laborer Full-Time $ 75,140 1 .00 Parking Confidential Account Clerk Full-Time $ 59,170 1.00 Parking Parking System Technician Full-Time_$ 78,903 _ 1.00 Parking Customer Service Representative Part-Time-$ 23,602 0.55 Parks Laborer Seasonal $ _ 14,019 0.52 Police Corporal Full-Time $ 112,511 1.00 Public Works Laborer Seasonal $ 36,105 1 .31 Transit Bus Operator Part-Time $ 6,639 0.12 Transit Assistant Operations Supervisor Part-Time $ 54,368 0.75 Transit Customer Service Representative Part-Time $ 23,603 0.55_ Transit Dispatcher Part-Time $ 48,966 0.89 Transit Marketing Intern Seasonal $ 15,537 0.50 W&RRC Assistant Manager Full-Time $ 86,873 1.00 W&RRC Maintenance Electrician Full-Time $ 83,281 1.00 W&RRC Plant Operator Grade II Full-Time $ 39,660 0.50 W&RRC Plant Operator Grade IV Full-Time $ 85,473 1.00 Water Plant Manager Full-Time $ 125,708 1.00 Water Plant Operator Full-Time $ 74,959 1.00 Total FY 2019 Recurring Savings $ 1,435,173 19.23 With the addition of the following staff, the net change in number of employees in Fiscal Year 2019 is -5.99 FTE. FY 2019 Cost (Including Department Position Type Benefits) FTE City Clerk Clerical Intern Seasonal $ 8,268 0.31 E911 Records Clerk Part-Time $ 31 ,429 0.73 Engineering I&I Inspector Part-Time $ 34,491 0.75 Engineering Floodwall Interns Seasonal $ 9,761 0.25 Public Information GIS Applications Specialist Full-Time $ 36,441 0.50 - Housing Inspector I Full-Time $ 82,631 1 .00 -40- FY 2019 Cost (Including Department Position Type Benefits) FTE Housing Inspector I Seasonal $ 5,709 0.30 - Police Captain Full-Time $ 142,710 1 .00 Police Police Officer Full-Time $ 93,028 1 .00 Public Works Clerical Assistant Part-Time $ 5,473 0.18 Public Works Utility Worker Apprenticeship Full-Time $ 58,295 1 .00 Recreation Field Supervisor Seasonal $ 6,682 0.23 Transportation Services Parking Revenue Collector Part-Time $ 19,507 0.73 Transportation Services Confidential Account Clerk Part-Time $ 40,509 0.73 Transportation Services Dispatcher Full-Time $ 69,376 1 .00 Transportation Services Field Supervisor Full-Time $ 86,848 1 .00 Transportation Services Bus Operators Part-Time $ 1 ,505 0.03 Transportation Services Transportation Analyst Full-Time $ 76,158 1 .00 W&RRC Operations Field Supervisor Full-Time $ 91 ,893 1 .00 Water Interns Seasonal $ 19,520 0.50 Total FY 2019 Recurring Cost $ 920,234 13.24 This follows the current budget year (Fiscal Year 2018) and previous budget year (Fiscal Year 2017) recommendation that eliminated 9.60 FTE positions: FY 2017 FY 2018 Savings Savings (Includes (Includes Department Position Type Benefits) Benefits) FTE Building Building Inspector ll Part-Time $ 66,112 0.75 Engineering Limited Term E_ Igineering Tech Full-Time $ _ 75,126 0.94_ Engineering Environmental Engineer Full-Time $ 125,359 1.00 Engineering I&I Inspectors Full-Time $ 146,953 2.00 Engineering Engineering Aide NA Seasonal $ 58,584 1.50 Engineering Engineering Assistant Seasonal $ 25,808 0.50 W&RRC Lab Intern Seasonal $ 4,974 0.16 Parks Park Ranger Full-Time $ 76,249 $ 77,774 1.00 Parks Custodian Part-Time $ 4,696 $ 4,790 0.10 Recreation Custodian Part-Time $ 4,696 $ 4,790 0.10 Parking Parking Meter Service Worker Full-Time $ 71 ,104 $ 72,526 1 .00 Parking Laborer Part-Time $ 37,331 $ 38,078 0.50 Parking Ramp Cashier Part-Time $ 1 ,844 $ 1 ,881 0.05 Total Recurring Savings $ 195,920 $ 702,755 9.60 -41- Over a three-year period (Fiscal Year 2017, Fiscal Year 2018 and Fiscal Year 2019) the City will have eliminated 28.83 full-time equivalent positions. Since 1981 , the City has minimized the number of positions added. If the Fiscal Year 2019 staffing changes are approved, the City will have reduced its full-time workforce by 4.5% since 1981 . This was achieved in spite of all the new services that have been added in that time period including staff-intense activities like recycling and combined county-wide public safety dispatching. Also, the number of sworn Police Office positions has increased by 34 over that time period. The three year hiring freeze will end during Fiscal Year 2019. The positions to be unfrozen will be further evaluated to determine if they should be reinstated as part-time positions, full-time positions, or supplemented with contracted services. While these are the target dates, changes in revenues and expenses during Fiscal Year 2019 could either expedite or delay some of these dates. The positions being recommended to be unfrozen and the planned dates in Fiscal Year 2019 are as follows: FY 2019 Cost Date (Includes Department Position Type Unfrozen Benefits) FTE City Manager's Office Management Intern Part-Time 5/1/2019 $ 6,289 0.60 City Manager's Office Secretary Full-Time 5/1/2019 $ 9,852 1 .00 Engineering Traffic Engineering Assistant Full-Time 3/1/2019 $ 30,136 1 .00 Human Rights Community Engagement Full-Time 3/1/2019 $ 27,535 1 .00 Human Rights Training/Workforce Full-Time 3/1/2019 $ 27,535 1 .00 Information Services Help Desk Technical Support Full-Time 5/1/2019 $ 10,677 1 .00 Park Assistant Horticulturalist Full-Time 3/1/2019 $ 23,241 1 .00 Park Maintenance Worker Full-Time 3/1/2019 $ 23,708 1 .00 Park/Public Works Assistant Horticulturalist Full-Time 3/1/2019 $ 23,241 1 .00 Police Records Clerk Full-Time 1/1/2019 $ 29,885 1 .00 Total Fiscal Year 2019 Cost $ 212,099 9.60 The cost of the unfrozen positions in Fiscal Year 2020 is $690,644. -42- Debt The City will issue $8,188,000 in new debt in the recommended 5-year CIP, mostly for fire truck and pumper replacements, sanitary sewer improvements, and renovation of the former Colts Building. FY FY FY FY FY Project 2019 2020 2021 2022 2023 Total Structural Repairs Fire Station 5&6 $ 215,000 $ 215,000 Fire Station Expansion Relocation $ 700,000 $ 700,000 Fire Ladder and Pumper Replacement $ 292,000 $170,000 $ 462,000 Fire Quick Response Pumper $ 225,000 $ 225,000 Colts Building Renovation - M FC $1,564,000 $1,564,000 Arena - Replace Chair Platform Section 3 $ 58,000 $ 58,000 GRC Energy Efficiency Improvements $ 183,000 $ 183,000 Jule Midtown Transfer Relocation $ 212,000 $ 212,000 East/West Corridor Study Implementation $ 400,000 $ 400,000 Outfall Manhole Reconstruction $ 400,000 $ 400,000 W&RRC High Strength Waste Storage $ 532,000 $ 532,000 Twin Ridge Lagoon Abandonment $ 465,000 $ 465,000 Wood St Sanitary Sewer $ 78,000 $ 78,000 Harlan & Euclid St Sanitary Sewer $ 75,000 $ 75,000 Cedar and Terminal Mains and Lift Station $ 903,000 $1,416,000 $2,319,000 Center Place Alley Sewer Rehab $300,000 $ 300,000 Total New Debt $2,932,000 $2,138,000 $1,416,000 $470,000 $1,232,000 $8,188,000 -43- In addition, the City will access $34,742,470 of previously issued state revolving fund loans as the related capital improvement projects progress. The draw down on these previously issued loans is as follows: FY FY FY FY FY Project 2019 2020 2021 2022 2023 Total Sanitary Kerper Boulevard SRF $ 2,050,000 $ 2,050,000 $ — $ — $ — $ 4,100,000 Stormwater Upper Bee Branch & Sponsor SRF $ 1,337,170 $ 247,668 $ 247,668 $ 247,664 $ — $ 2,080,170 Stormwater Flood Mitigation Project SRF $ — $ 4,479,042 $ 9,000,000 $2,840,958 $ — $16,320,000 Water Roosevelt Water Tower SRF $ 43,383 $ 431,617 $ 1,875,000 $ — $ — $ 2,350,000 Water CIWR Purchase & Improvements $ 5,664,990 $ 1,047,310 $ 1,090,000 $1,060,000 $1,030,000 $ 9,892,300 Total Draw Downs $ 9,095,543 $ 8,255,637 $12,212,668 $4,148,622 $ 1,030,000 $34,742,470 The City will retire $88,604,745 of existing debt over the next five-years (FY19-FY23). The following chart shows the net reduction of debt from Fiscal Year 2019 - Fiscal Year 2023: FY FY FY FY FY Project 2019 2020 2021 2022 2023 Total New Debt $ 2,932,000 $ 2,138,000 $ 1,416,000 $ 470,000 $ 1,232,000 $ 8,188,000 Previously Issued SRF Draw Downs $ 9,095,543 $ 8,255,6371$ 12,212,668 $ 4,148,622 $ 1,030,000 $ 34,742,470 Retired Debt -$17,162,687 -$17,787,317 -$18,470,987 -$17,028,712 -$18,155,042 -$88,604,745 Net Debt Reduction -$5,135,144 -$7,393,680 -$4,842,319 -$12,410,090 -$15,893,042 -$45,674,275 Outstanding General Obligation (G.O.) debt on June 30, 2019 is projected to be $124,894,475 (56.38% of the statutory debt limit), leaving an available debt capacity of$96,618,281 (43.62%). In Fiscal Year 2016, the City was at 86.13% of statutory debt limit, so 56.38% in Fiscal Year 2019 is a 29.75% decrease in use of the statutory debt limit. The City also has debt that is not subject to the statutory debt limit, such as revenue bonds. Outstanding revenue bonds payable by water, sewer, parking and stormwater fees, will have a balance of$144,088,397 on June 30, 2019 . -44- The total City indebtedness as of June 30, 2019, is projected to be $268,982,872 (56.38% of statutory debt limit). The total City indebtedness as of June 30, 2016, was $295,477,641 (86.13% of statutory debt limit). The City is projected to have $26,494,769 less in debt as of June 30, 2019. The combination of reduced debt and increased utility rates partially reflects the movement to a more "pay as you go" strategy, which could lead to larger tax and fee increases than with the use of debt. The following chart shows the amount of retired debt as compared to new debt. The new debt includes new debt issuances as well as draw downs on existing state revolving fund loans: Retired Debt Versus New Debt (In Millions) u, $25 0 $20 $18.9 $19.2 $19.4 $19.3 $19.6 $17.8 $18.5 $18.2 $17.4 $17.2 $17.0 $16.4 ILL1 ' I I $15 $10 111 $10.0 $5 $2.0 $2a0 111119 $- FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 25 FY 26 FY 27 FY28 •Retired Debt •New Debt -45- In August 2015, the Mayor and City Council adopted a debt reduction strategy which targeted retiring more debt each year than was issued by the City. This recommendation achieves that target throughout the 5-year CIP. I am pleased to report the recommendation will substantially beat overall debt reduction targets over the next five-and ten-year periods. You can see that the Mayor and City Council have significantly impacted the City's use of the statutory debt limit established by the State of Iowa. In Fiscal Year 2015, the City of Dubuque used 90% of the statutory debt limit. In this budget recommendation, the Mayor and City Council are currently reviewing for Fiscal Year 2019, the use of the statutory debt limit would be 56%, and by the end of the recommended 5-Year Capital Improvement Program (CIP) budget in Fiscal Year 2023, the City of Dubuque would be at 37% of the statutory debt limit. Projections out 10 years to Fiscal Year 2028 show the City of Dubuque at 19% of the statutory debt limit. This is an improvement on the debt reduction plan adopted in August 2015, that first began implementation in Fiscal Year 2016. Statutory Debt Limit Used (as of June 30th) 100% - 90% 90.49% 89.89% :7.49%82.03% 86.13% 80% 78.53% 9.42% 4.47% 70% 1.74% 1.20% 69.47% 65.91% 60% 63.39' 66.04% 11."""""y62.23% 56.38% 50% - 50.95% 45.57% 40% - 41.10% 37.03% 30% 33,40% 29.89%26.08% 20% 18.99% 10% - FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 25 FY 26 FY 27 FY 28 FY19 Recommended FY16 Adopted -46- The following chart shows Dubuque's relative position pertaining to use of the statutory debt limit for Fiscal Year 2019 compared to the other cities in Iowa for Fiscal Year 2017 with a population over 50,000: Fiscal Year 2017 Legal Debt Limit Comparison for Eleven Largest Iowa Cities Rank City Legal Debt Limit Statutory Debt Percentage of Legal (5%) Outstanding Debt Limit Utilized 11 Des Moines $ 542,887,856 $ 386,535,000 71.20% 10 Davenport $ 323,975,819 $ 220,310,280 68.00% 9 Sioux City $ 212,162,397 $ 132,145,000 62.28% 8 Dubuque (FY19) $ 221,512,756 $ 124,894,475 56.38% 7 Ankeny $ 231,095,971 $ 129,162,000 55.89% 6 Waterloo $ 189,916,898 $ 106,013,702 55.82% 5 Cedar Rapids $ 498,689,692 $ 276,385,000 55.42% Dubuque (FY23) $ 239,772,530 $ 88,792,943 37.03% 4 Ames $ 202,799,687 $ 68,230,000 33.64% 3 W. Des Moines $ 348,080,444 $ 114,130,000 32.79% 2 Iowa City $ 267,511,393 $ 66,845,000 24.99% 1 Council Bluffs $ 232,945,409 $ 48,723,175 20.92% Dubuque (FY28) $ 264,728,248 $ 50,283,589 18.99% By the end of the recommended 5-Year Capital Improvement Program (CI P) budget the total amount of debt for the City of Dubuque would be $222.7 million (37% of the statutory debt limit) and the projection is to be at $136 million (19% of statutory debt limit) within 10 years. Total Debt 309.1 (In Millions) o $310 $302.3 2 $290.1 $290 '295.6 $295.5 82.0 $279.9 $281.3 $265.6 $267.4 $270 $273.8 $269.0 $266.2 $255.9 $250 „ . . $230 $239.0 $226.2 $210 $222.7 $206.4 $190 $189.8 $170 $171.9 $150 $154.0 $130 $135.8 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 f FY19 Recommended FY16 Adopted -47- General Fund Reserve The City maintains a general fund reserve, or working balance, to allow for unforeseen expenses that may occur. Moody's Investor Service recommends a 20% General Fund Operating Reserve for "AA" rated cities. In May 2015, Moody's Investors Service downgraded Dubuque's general obligation bond rating from Aa2 to Aa3, but removed the negative future outlook. This followed two bond rating upgrades in 2003 and 2010, and one bond rating downgrade in 2014. In announcing the bond rating downgrade, Moody's noted the City's general fund balance/reserve declines. Dubuque's general fund reserve declined from 21 percent of general fund revenues in Fiscal Year 2013 to 14.9 percent in Fiscal Year 2014 due to planned capital expenditures of$4.1 million in Fiscal Year 2014. Dubuque's general fund reserve increased from 14.9 percent of general fund revenues in FY 2015 to 17.5 percent in FY 2016 due to capital projects not expended by the end of the fiscal year and an increase in general fund revenue in FY 2016. It increased from 17.5 percent in FY 2016 to 19.75 percent in FY 2017 due to capital projects not expended by the end of the fiscal year and additional contributions made to the general fund reserve. The general fund reserve is projected to decrease to 18.23 percent of general fund revenues in FY 2018 due to spending some of the balance for planned capital projects that were not completed in FY 2017. The City of Dubuque has historically adopted a general fund reserve policy as part of the Fiscal and Budget Policy Guidelines which is adopted each year as part of the budget process. During Fiscal Year 2013, the City adopted a formal Fund Reserve Policy which states the City may continue to add to the General Fund minimum balance of 10% when additional funds are available until 20% of Net General Fund Operating Cost is reached. The planned contribution to reserves in Fiscal Year 2016 was $600,000, but the City was able to contribute $1 million. The City contributed $600,000 to the general fund reserve in FY 2017. After all planned expenditures and an additional $1 ,050,000 was added to fund balance in FY 2018, the City will have a general fund reserve of 18.03% ($8,805,048) of general fund expenses as computed by the methodology adopted in the City's general fund reserve policy (cash basis) or 17.91% ($12,832,730) of general fund revenues as computed by the methodology used by Moody's Investors Service (accrual). The actual general fund reserve fund cash balance is projected to be $8,805,048 on June 30, 2018, which does not include the accruals used by Moody's. The intent is to increase the General Fund working balance or operating reserve by $1 ,050,000 in Fiscal Year 2019. In subsequent years, the City will add to the operating reserve until 20% is maintained consistently. In Fiscal Year 2017, the City had projected reaching this consistent and sustainable 20% reserve level in Fiscal Year 2022. Now it is projected this 20% level will be reached in Fiscal Year 2020, two years ahead of schedule. The reserve will increase by $3,400,000 (28.86%) from Fiscal Year 2018 - Fiscal Year 2020. FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Contribution $ 1,050,000 $ 1,050,000 $ 1,000,000 $ 100,000 $ 100,000 $ 100,000 General Fund Reserve $12,832,730 $ 13,882,730 $14,882,730 $14,982,730 $15,082,730 $15,182,730 % of Projected Revenue (Moody's) 17.91% 19.42% 20.73% 20.80% 21.29% 21.37% -48- In October 2016, Moody's Investors Service upgraded the rating on $18 million in City of Dubuque bonds issued to support the Bee Branch Watershed Flood Mitigation Project from A3 to A2. State Revolving Fund Sponsorship Projects and Green Project Loans The City uses State Revolving Fund (SRF) loans for water and sanitary sewer projects whenever possible because of the very low annual interest rate of 1.75% with an annual servicing fee of 0.25%. In 2009, legislation was passed in Iowa that allows water utilities that issue debt through the Clean Water State Revolving Fund Program to sponsor and help finance other water quality improvement (CWSRF) projects within or outside its service limits. This new funding mechanism, called Water Resource Restoration Sponsored Projects, will provide cities, counties, local watershed organizations, watershed management authorities, county conservation boards, and soil and water conservation districts a funding source to construct improvements throughout a watershed that keep sediment, nutrients, chemicals and other pollutants out of streams and lakes. Repayment of a standard Clean Water SRF (CWSRF) loan includes the repayment of the original loan amount, the principal, and the cost to finance the loan, interest and fees. On a CWSRF loan with a sponsored project, the financing costs are reduced by the amount of the cost of the sponsored project improvements. Figure 1 shows a comparison between a standard CWSRF loan and a CWSRF loan with a sponsorship project. As shown, the total cost to the utility (the total of loan repayments) remains unchanged as the cost of funding for the sponsorship project is offset by a reduction in loan financing costs. In essence, two water quality projects are completed for the price of one. Funding for Sponsorship Project N , o Loan Financing Costs (Interest&Fees) c I , m 0 J , CWSRF Project Loan Principal ,11 43�� soar aL� •S��Sotrsecti (ao�o�oa'c LS o� Qtol �Q Figure 1. Loan repayment comparison between a standard CWSRF loan and a CWSRF loan with a sponsorship project. -49- After three years of the State of Iowa being unsuccessful in completing one of these modified loans, the City of Dubuque had the first successful application for the state when, in April 2013, the City was awarded $9.4 million of the interest paid on the Water and Resource Recovery Center to be used to reconstruct over 70 Green Alleys in the Bee Branch Watershed. The principal for the Water & Resource Recovery Center Upgrade was increased from $64,885,000 to $75,145,579 and the interest rate plus annual servicing fee was decreased from 3.25% to 2.00% to add the Green Alley sponsorship project. This reduction allowed for increased proceeds and resulted in a true interest cost of 1.96% and gross borrowing savings of $11.4 million. The Fiscal Years 2010, 2011 , and 2012 State Revolving Fund capitalization grants included requirements for certain percentages of the funds to be allocated for green projects. Each green infrastructure project receives a portion of loan forgiveness not to exceed 30%. In June 2015, the City of Dubuque Upper Bee Branch Creek Restoration Project (Upper Bee Branch Project) qualified for a Green Project Loan from the CWSRF Program in the amount of$29,541 ,000. The loan includes a "principal forgiveness" provision. The amount of the loan to be forgiven is 20% of the total loan disbursements made under the loan agreement. The amount of the loan to be forgiven when the project is completed is estimated to be $5,908,200. The actual true interest cost for total funds received was not the 2.00% borrowing rate (1.75% interest and 0.25% administrative fee), but just 0.07% after reflecting the receipt of interest free funds (forgiven portion). Then, in August 2017, the City was awarded $1 .4 million in funding for improvements with the Catfish Creek Watershed through the State of Iowa Water Resource Restoration Sponsored Project program as part of the City's State Revolving Fund loan for the Upper Bee Branch Creek Restoration Project. The funding for the $1 .4 million in improvements will come from the interest payments on the City's Upper Bee Branch SRF loan. The Upper Bee Branch Creek SRF loan principal was increased to $30,941 ,000 and the interest rate plus the annual servicing fee was reduced from 2.00% to 1.43%. On a gross basis, the borrowing costs for the new loan were $1.38 million less than the original loan. -50- City Utilities The water rate increase recommendation is 3%, the sanitary sewer rate increase recommendation is 3%, and the solid waste collection rate increase recommendation is 2.3%. The City Council previously approved a 6.75% stormwater rate increase for Fiscal Year 2018 and this recommendation does not change that amount. The following are the utility rate comparisons for other cities in the State of Iowa: RATES AND COMPARISONS Water Rate Comparison for Largest Iowa Cities with Water Softening Rank City Water Rate(6,000 Gallons/residence avg.) 7 West Des Moines $33.34 6 Des Moines $30.74 5 Iowa City $30.24 4 Dubuque $29.28 3 Ames $29.02 2 Cedar Rapids $28.20 1 Council Bluffs $28.16 Average w/o Dubuque $29.95 Dubuque's water is some of the best in the world! The highest rate (West Des Moines) is 13.85% higher than Dubuque's rate, and the average is 2.28% higher than Dubuque. One important point worth mentioning related to water rate increases involves the 2016 purchase of the Central Iowa Water Association (CIWA) assets and the subsequent capital project to extend City of Dubuque water service to these newly acquired 316 customers, opening up thousands of acres for future development. In December 2016, the impact on water rates, including the purchase of CIWA and capital improvements and operating costs were estimated as follows: FY18 FY19 FY20 FY21 FY22 Total December 2016 Proposed Rate Increase 4% 4% 4% 0% 0% 12% -51- Through the Fiscal Year 2018 budget process, the impact on water rates were reduced in FY 2018 by having the Water Department Manager perform the duties of the Plant Manager, eliminating the position in the FY 2019 budget recommendation: FY18 FY19 FY20 FY21 FY22 Total FY 2018 Proposed Rate I1 /1 Increase 3% 4% 4% 0% 0% I I I 1% Between the time that the CIWA systems were purchased and the Fiscal Year 2018 budget was adopted, additional water improvements have become necessary. These additional water improvements include Roosevelt Water Tower ($3.7 million), Cottingham Road Water Main Extension and Highway Boring ($1 .1 million), and Chesterfield Drive water main extension ($100,000). Through the Fiscal Year 2019 budget process, the impact on water rates is proposed as follows: FY18 FY19 FY20 FY21 FY22 Total FY 2019 Proposed Rate Increase 3% 3% 3% 4% 3% 16% Sanitary Sewer Rate Comparison for Eleven Largest Iowa Cities Rank City Sanitary Sewer Rate (Based on 6,000 Gallons/month) 11 Ankeny $61 .66 10 Des Moines $48.02 9 Davenport $43.88 8 Dubuque $40.43 7 West Des Moines $38.90 6 Iowa City $36.17 5 Ames $33.61 4 Sioux City _ $31 .88 3 Cedar Rapids $27.27 2 Waterloo $25.75 1 Council Bluffs $22.88 Average w/o Dubuque $37.00 The highest rate (Ankeny) is 52.52% higher than Dubuque's rate, and the average is 8.47% lower than Dubuque. -52- Solid Waste Collection Rate Comparison for Eleven Largest Iowa Cities Solid Waste Monthly Rank City Rate 11 Ames $26.25 10 Cedar Rapids $21 .55 9 Council Bluffs $18.00 8 Iowa City $17.10 7 Sioux City $16.30 6 Ankeny $16.25 5 Dubuque $15.37 4 Davenport $12.27 3 Des Moines $11.00 2 West Des Moines $10.55 1 Waterloo $9.00 Average w/o Dubuque $15.83 The highest rate (Ames) is 70.79% higher than Dubuque's rate, and the average is 2.97% higher than Dubuque. Stormwater Rate Comparison for the Largest Iowa Cities with Stormwater Fees Rank City Stormwater Rate 10 _Des Moines $12.67 9 Dubuque $7.76 8 Cedar Rapids $6.12 7 Ankeny $5.50 6 Ames $4.95 5 Iowa City $4.72 4 _West Des Moines $4.85 3 Sioux City $2.80 2 _Waterloo $2.75 1 Davenport $2.64 Average w/o Dubuque $5.22 The highest rate (Des Moines) is 63.27% higher than Dubuque's rate, and the average is 32.70% lower than Dubuque. -53- Improvement Packages There were 131 improvement level decision packages requested in Fiscal Year 2019, of which 105 are being recommended for funding. The recurring general fund expenditures total $132,653 and will also impact future budget years. The non-recurring general fund expenditures total $515,141. The remaining improvement packages recommended for funding from non- property tax support total $122,755. Tax Increment Financing (TIF) Subareas Expired On June 30, 2018, three subareas of tax increment financing districts will retire: Subarea B of Dubuque Industrial Center West and Subareas A and B of the Dubuque Technology Park. This is consistent with major amendments to Chapter 403 of the Code of Iowa enacted in 1994 which changed economic development tax increment requirements for areas established after January 1, 1995, and limited those districts to a 20-year life. There is $76,526,204 of incremental value created by these subareas that will be redistributed to all taxing bodies in FY 2019. In FY 2019, the City of Dubuque will receive approximately$579,000 in general fund tax revenue from Subarea B of Dubuque Industrial Center West and $171,000 in general fund tax revenue from Subareas A and B of Technology Park. The following is a chart that shows the amount of tax revenue to be distributed to each taxing body due to the subareas retiring: Retiring TIF - New Tax Money to Taxing Bodies in Fiscal Year 2019 $900,000 $795,174 $800,000 $700,000 $600,000 $579,086 $500,000 $400,000 $337,144 $300,000 $234,752 $200,000 $170,958 $99,532 $100,000 $58,478 $17,264 $9,854 =,377 $- Tech Park South -2019 DICW -Subarea B -2019 ■DCSD •City •County ■NICC •Other -54- State-Funded Backfill on Commercial and Industrial Property Tax Commercial and Industrial property taxpayers previously were taxed at 100% of assessed value; however, due to property tax reform legislation in Fiscal Year 2013, a 95% rollback factor was applied in Fiscal Year 2015 and a 90% rollback factor will be applied in Fiscal Year 2016 and each year beyond. The State of Iowa committed to backfill the loss in property tax revenue from the rollback and the backfill 100% in Fiscal Year 2015 through Fiscal Year 2017 and then the backfill will be capped at the Fiscal Year 2017 level in Fiscal Year 2018 and beyond. The Fiscal Year 2019 State backfill for property tax is estimated to be $1,032,698. Elements of the property tax reform passed by the Iowa Legislature in 2013 have created a tremendous amount of uncertainty in the City's budget process. While the State has committed to provide some funding for the City revenue reductions caused by the decrease in taxable value for commercial and industrial properties, key State legislators have been quoted in the media as casting doubt on the reimbursements continuing. In addition, the State's previous budget shortfall and need to replenish general fund reserves could cause legislators to reduce or eliminate the backfill in a special legislative session. Governor Reynolds proposed Fiscal Year 2019 State of Iowa budget was submitted in January 2018 with full funding for the backfill, so the Fiscal Year 2019 City budget recommendation does not meet the Fiscal Year 2019 Budget Guidelines assumption of a $206,540 reduction in the State backfill payments as the approximately $1 million in annual payments is eliminated after five years. However, the projected City budgets beginning in FY 2020 do show a $206,540 reduction in the State Backfill payments each year over a five-year period. The projected reduction of State backfill revenue to the general fund is as follows: State Backfill Fiscal Year Reduction 2020 $ 206,540 2021 $ 206,540 2022 $ 206,540 2023 $ 206,540 2024 $ 206,540 Total $ 1 ,032,700 In the Tax Increment Financing (TIF) Economic Development and Slum and Blight Urban Renewal Districts in each of the five fiscal years in this budget recommendation, there is some built-in protection against the possibility that, at some point in time, the State of Iowa might stop funding the property tax reform backfill payments. In these TIF areas, the City is not allocating all of the available resources. Each year the State funds the backfill will give the City greater resources to accomplish the intended goals of the TIF district that can be carried into the next budget year. There are numerous unfunded needs. -55- Gas & Electric Utility Property Tax Replacement The stated purposes of the Gas & Electric Utility Property Tax Replacement program are to: 1) Replace property taxes imposed on electricity and natural gas providers with a taxation system which removes tax costs as a factor in a competitive environment by imposing like generation, transmission, and delivery taxes on similarly situated competitors. 2) Preserve revenue neutrality and debt capacity for local governments and taxpayers. 3) Preserve neutrality in the allocation and cost impact of any replacement tax among and upon consumers of electricity and natural gas in this state. 4) Provide a system of taxation which reduces existing administrative burdens on state government. The Iowa Legislature found that, with the advent of restructuring of the electric and natural gas utility industry, a competitive environment would most likely replace the regulated monopoly environment. Previously, utility companies were subject to property taxes levied on their production and transmission facilities. If those property tax levies would have continued in a restructured environment, the property tax costs would have put Iowa-based utility companies at a competitive disadvantage because out-of-state suppliers of energy would not have paid the Iowa property tax. Simply removing local property taxation on gas & electric utilities would have put energy deliverers on a level playing field, but that would not have been fair to local governments. So it was decided to put a property tax replacement system in place, in advance of the impending restructuring, to ensure that the new system of taxation performed as intended. Excise taxes, unique to geographic service areas, were calculated using methodologies that equated the new excise tax to amounts previously paid as property tax. These excise taxes are imposed on the generation and transmission of electricity and on the delivery of electricity and natural gas to consumers. The City's tax levy per $1 ,000 of taxable value is first calculated on a valuation which includes utilities, then those calculated rates are used against a valuation figure with utilities removed. The excise tax makes up the difference in each levy. The Gas and Electric Utility Valuation for the City of Dubuque decreased from $80,710,443 in FY 2018 to $76,350,084 in FY 2019, which resulted in a revenue loss of -$47,494. -56- Local Option Sales Tax The City is beginning to see stagnation in local option sales tax revenues. Fiscal Year 2019 Sales tax receipts are projected to decrease 2.3% under FY 2018 budget (-$207,932). The estimates received from the State of Iowa show a 2.13% decrease in the first two payments estimated for FY 2019 as compared to the first two payments budgeted for FY 2018. The following chart shows the past four years of actual sales tax funds and projected FY 2019: Sales Tax Funds FY15 FY16 FY17 FY18 FY19 PY Quarter 4 (Half) 1,317,830 $ 1,636,036 $ 1,496,339 $ 1,496,216 $ 1,464,348 Quarter 1 2,028,138 $ 2,205,844 $ 2,225,509 $ 2,160,588 $ 2,192,997 Quarter 2 2,060,081 $ 2,272,334_$ 2,292,593 $ 2,219,956_$ 2,253,255 Quarter 3 _ 1,852,473 $ 1,921,410 $ 1,921,252 $ 1,879,845 $ 1,908,043 Quarter 4 (Half) 681,369 $ 748,169 $ 748,108 $ 732,174 $ 743,157 Reconciliation 502,152 $ 511,314 $ 206,370 $ 154,036 $ 163,278 Total 8,442,043 9,295,107 8,890,171 8,642,815 8,725,078 Change +1.6% +10.1% -4.4% -2.8% +1.0% While it is easy to blame this on e-commerce (ex: Amazon.com), and that certainly is having an impact, it cannot be forgotten that in March 2016 the State of Iowa amended the sales and use tax exemption provided by Iowa Code Sec. 423.3(47) for items used by manufacturers to specifically exempt qualifying "replacement parts" and "supplies." While we cannot quantify this because the State does not provide sales information, the impact has probably been substantial. Gaming Revenue Reduction Gaming revenues generated from lease payments from the Dubuque Racing Association (DRA) have barely stayed the same (+$1 ,906) based on revised projections from the DRA. This follows a $159,046 decrease from the FY 2018 budget and a $405,767 decrease from FY 2017 budget. The Fiscal Year 2019 budget projections are based on six months of actual experience and, in that period, gross gaming revenues are down 1%. The Dubuque gaming market was significantly impacted beginning in May 2016 when Rhythm City Casino opened off Interstate 80 near Davenport. The DRA has projected a 0.50% increase in gross gaming revenue for Calendar Year 2018. The State of Illinois passed a Video Gaming Act in 2009 which legalized the use of Video Gaming Terminals in liquor licensed establishments including bars, restaurants, truck stops, and certain fraternal and veterans' organizations. In the part of Illinois that impacts the Dubuque market, the first year of operation of video gaming terminals generated $1 million in revenue monthly in Illinois. The use of video gaming terminals has now grown to $7.5 million monthly for the five counties closest to Dubuque and in a direct line with Rockford, IL, which has caused a reduction to the gaming market in Dubuque. The Q Casino and Diamond Jo Casino average monthly revenue is$9.5 million. This is a similar impact as if approximately one and a half more casinos combined were built half-way between Dubuque and Rockford. -57- Multi-Residential Property Tax Classification Beginning in Fiscal Year 2017 (July 1, 2016), new State legislation created a new property tax classification for rental properties called multi-residential, which requires a rollback, or assessment limitations order, on multi-residential property which will eventually equal the residential rollback. Multi-residential property includes apartments with three or more units. Rental properties of two units were already classified as residential property. The State of Iowa will not backfill property tax loss from the rollback on multi-residential property. The rollback will be 86.25% ($331,239) in Fiscal Year 2017, 82.50% ($472,127) in Fiscal Year 2018, 78.75% ($564,914) in Fiscal Year 2019, 75.00% ($677,719) in Fiscal Year 2020, 71.25% ($780,504) in Fiscal Year 2021, 67.50% ($966,246) in Fiscal Year 2022, 63.75% ($1,054,773) in Fiscal Year 2023 and will equal the residential rollback in Fiscal Year 2024 which is currently 56.62% ($1,241,216). This annual loss in tax revenue of $564,914 in Fiscal Year 2019 and $1,241,216 from multi-residential property when fully implemented in Fiscal Year 2024 will not be backfilled by the State. From Fiscal Year 2017 through Fiscal Year 2024 the City will lose $6,088,737 in total, meaning multi-residential rental property owners will have paid that much less in property taxes. Multi-Residential Property Tax Based on Average Assessed Value$224,289 $2 473 $2,500 $2 349 $2 226 $2 160 $2,000 ' $1 872 $1 849 I $1 758 $1 689 $1 663 $1,500 $1,451 $1,000 $500 $0 r/ FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 •Multi-Residential Property Tax Paid-City Portion Only -58- Health Insurance The City portion of city employee health insurance expense is projected to decrease from $1 ,325 per month per contract to $1 ,192 per month per contract or a 10% reduction (based on 562 contracts) in Fiscal Year 2019 (General Fund savings of$634,875). This does not meet the Budget Guidelines which projected a decrease to $1 ,108 per month per contract ora 16.38% reduction (general fund savings of$986,278). November 2017 medical claims were substantially higher than the previous months which caused the per month per contract amount to increase for FY 2019. The City of Dubuque is self-insured and actual expenses are paid each year with the City only having stop-loss coverage for major claims. Estimates for Fiscal Years 2019-2022 have been increased by 6.32% per year. The City went out for bid for a third-party administrator in FY 2017 and the estimated savings have been realized from the new contract and actual claims paid. In addition, police officers and firefighters begin paying an increased employee health care premium sharing from 10% to 15% on July 1 , 2018. During FY 2018, the City went out for bid for benefit provider for the prescription drug plan and there is an estimated $243,808 in savings resulting from the bid award. The following chart demonstrates the health plan cost savings due to a new third party administrator (TPA) for the health plan and a new pharmacy coalition: With Wellmark and New Without TPA RFP With Wellmark Pharmacy Coalition Fiscal Year Amount % Change Amount % Change Amount 2016 Actual $ 9,622,297 2017 Actual $ 11,080,429 15.15% 2018 Projected $ 11,780,712 6.32% $10,182,986 -8.10% 2019 Projected $ 12,525,253 6.32% $ 10,499,899 $12,525,253 $10,499,899 -$2,025,354 FY19 Savings due to new TPA and Pharmacy Coalition With Wellmark as the new third party administrator, FY 2018 showed a projected (through December 2017 experience) $897,443 (8.1 %) in savings from FY17 actual. If the City had not done a Request for Proposal for a new third party administrator, the projected experience in FY 2018 was $11 ,780,712, where the actual experience with Wellmark as the new third party administrator in FY 2018 is $10,182,986, a $1 ,597,726 (8.10%) decrease. Continuing with Wellmark as the third party administrator in FY 2019 and contracting with a new Pharmacy Coalition (RXB) in FY 2019, the City anticipates a reduction in costs of$580,530 (5.2%) from FY 2017 actual, a reduction of$1 ,280,813 (10.9%) from FY 2018 projected without Wellmark as the new third party administrator, a reduction of$2,025,354 (16.2%) from FY 2019 projected if there had not been an RFP to select Wellmark as the new third party administrator or an RFP to select RXB as the new Pharmacy Coalition. The number actually impacting the FY 2019 budget for health care, including pharmacy benefits, is a reduction from the FY 2018 budget of$10,599,276 to a projected cost in FY 2019 of$10,499,899, which is a 1 .0% reduction. -59- The Jule The decrease in property tax support for Transit from FY 2018 to FY 2019 is $13,210, which reflects the consolidation of the Transit and Parking Divisions into the Transportation Services Department following co-location at the Intermodal Facility in February 2017. Transit staff have conducted an ongoing review of opportunities for jointly contracted services; technology improvements to reduce manual processes; and areas requiring additional management review and oversight. The goal of this improvement request is to realize cost savings, but also to transform the way that transportation options and assets are evaluated, communicated and managed. The creation of the Transportation Services Department will ensure a unified approach to providing equitable transportation options in the City of Dubuque. While the management will operate as one entity, the accounting for federally funded assets and operations of public transit must remain separate. The cost of existing Transit administrative positions will be split with Parking. There is additional planned savings in the Transit Fund in FY 2020 of$20,884 to complete the transition. There is additional planned savings in the Parking Fund in FY 2020 of$42,632 to complete the transition. The impact to the positions in the Transit and Parking Divisions is summarized as follows: FTE FTE Eliminated/ Transit Cost Parking Cost Total Position Transit Parking New (Savings) (Savings) (Savings) Transportation Services Manager (was Transit Manager) -0.50 +0.50 Existing -$72,579 $72,579 $- Operations Supervisor -0.50 +0.50 Existing -$52,112 $52,112 $- Field Supervisor FT +0.50 +0.50 New $43,424 $43,424 $86,848 Assistant Operations Supervisor PT -0.75 0.00 Eliminated -$54,368 $- -$54,368 Transportation Analyst FT +0.50 +0.50 New $38,079 $38,079 $76,158 Intern Seasonal -0.50 0.00 Eliminated -$15,537 $- -$15,537 Customer Service PT -0.55 -0.55 Eliminated -$23,603 -$23,602 -$47,205 Confidential Account Clerk PT +0.51 +0.22 New $28,294 $12,215 $40,509 Dispatcher FT -0.20 +0.20 Existing -$13,931 $13,931 $- Dispatcher FT +0.90 +0.10 New $62,438 $6,938 $69,376 Dispatcher PT -0.99 +0.10 Existing -$54,468 $5,502 -$48,966 Laborer FT 0.00 -1.00 Eliminated $- -$75,140 -$75,140 Confidential Account Clerk FT 0.00 -1.00 Eliminated $- -$59,170 -$59,170 Parking Supervisor FT 0.00 -1.00 Eliminated $- -$95,113 -$95,113 Parking System Technician FT 0.00 -1.00 Eliminated $- -$78,903 -$78,903 Parking Revenue Collector PT 0.00 +0.73 New $- $19,507 $19,507 Contracted Services New $- $60,000 $60,000 Software License Expense New $- $8,000 $8,000 Total -1.58 -1.20 -$114,363 $359 -$114,004 -60- The following is a 10-year history of the Transit property tax subsidy: Fiscal Year Amount 2019 Budget $ 1,571 ,307 2018 Budget $ 1,572,825 2017 Actual $ 1,172,885 2016 Actual $ 942,752 2015 Actual $ 1,086,080 2014 Actual $ 833,302 2013 _ Actual $ 1 ,044,171 2012 Actual $ 717,611 2011 _ Actual $ 1 ,078,726 2010 Actual $ 1,161 ,393 2009 Actual $ 1 ,253,638 Water & Resource Recovery Center This budget recommendation includes a staffing transition for the Water& Resource Recovery Center which includes transitioning to one-shift operations with on-call status. The staffing transition includes the elimination of the Assistant Plant Manager position (-1.0 FTE or 2,080 hours annually), the elimination of the Maintenance Electrician position (-1.0 FTE or 2,080 hours annually), the elimination of one Plant Operator position beginning July 1, 2018 (-0.50 FTE or 1,040 hours annually), the elimination of a second Plant Operator Position beginning January 1, 2019 (-1.00 FTE or 2,080 hours annually), and the creation of an Operations Supervisor position at GE-33D (+1.0 FTE or 2,080 hours annually). The Assistant Plant Manager position is vacant and has been frozen since Fiscal Year 2018. The Maintenance Electrician and both Plant Operator positions are currently filled and funded positions in Fiscal Year 2018. Recurring funding also includes contracted electrician services ($42,000). Non-recurring funding is included for staff training and the development of Standard Operating Procedures needed for one-shift operations ($50,000). A summary of the cost impact of the staffing transition plan is as follows: Cost Position Type FTE Change (Savings) Assistant Plant Manager Full-Time -1.00 Eliminated 7/1/18 ($86,873) Maintenance Electrician Full-Time -1.00 Eliminated 7/1/18 ($83,281) Plant Operator Grade IV Full-Time -1.00 Eliminated 7/1/18 ($85,473) Plant Operator Grade II Full-Time -0.50 Eliminated 1/1/19 ($39,660) Operations Supervisor Full-Time +1.00 New 711118 +$91,893 Total Change -2.50 ($203,394) -61- Housing Tax Increment Financing Dubuque's four Housing Tax Increment Financing (TIF) Districts (Timber-Hyrst, English Ridge, South Pointe, and Rustic Point) will generate an estimated $12.2 million from Fiscal Year 2018 - 2023, with at least 38.1% ($4.9 million) going to affordable housing needs, mainly through the CHANGE program in partnership with groups like Community Housing Initiative, True North Development Corporation, and the HEART Program. The successful use of Housing TI Fs to create incentives for more residential development is important to encourage population growth in the city limits and increase assessed values. It is also important as the Dubuque Community School District is experiencing the fourth consecutive year of declining enrollment and, at 10,507 students, is 227 (2.1 %) less than the near term peak year of 10,734 in school year 2006/2007. Council Priorities and Individual Projects Dubuque city government is progressive and financially sound with residents receiving value for their tax dollars and achieving goals through partnerships. The City of Dubuque government's mission isto deliver excellent municipal servicesthat support urban living; contribute to an equitable, sustainable city; plan for the community's future; and facilitate access to critical human infrastructure. Central Avenue Corridor Revitalization: Streetscape and Business Development The Central Avenue Corridor Initiative is focused on the Central Avenue Corridor from 14th to 22nd Street. The corridor features a wide variety of historic buildings offering commercial and retail opportunities on the ground floor and residential spaces on upper floors. The goal of the initiative isthe economic revitalization of the corridorthrough community engagement, educational outreach, and community-informed streetscape and design. In 2017, the City entered into a collaborative relationship with Iowa State University Extension and Outreach (ISUEO)to assist with the initiative. ISUEO is assisting with outreach and community engagement efforts, asset mapping of buildings and businesses in the corridor, and identification of additional partnership opportunities. In spring 2017, a design studio explored methods for using art and design to increase social capital in the neighborhood. The FY 2019 CIP includes funding for streetscape design and implementation forthe Central Avenue Corridor($40,000); design will include intentional resident and business engagement and additional assistance for building rehabilitation. In FY19, Community Development Block Grant(CDBG)funds will be used to offer low- or no-interest loans to "microenterprise businesses" in the corridor. To qualify, the business owner(s) must be low-to-moderate income. The Central Avenue Corridor Initiative is funded for $40,000 in FY 2019 through FY 2022. A secondary capital improvement project for the Central Avenue Corridor is the Central Avenue Streetscape Master Plan Implementation and is funded in FY 2021 and 2022 ($20,000/yr). -62- Citywide Flower Planting Program In September 2017, an RFP for the Highway 20 corridor landscaping was let in order to provide an assessment of the current landscaping and the creation of a new landscape plan for the corridor. Estimates from the plan will give a baseline for future funds needed. An additional traffic study, which included analysis ofviewshedscreated by plantings,was completed for Grandview Boulevard by the Engineering Department in the summer of 2017. Staff will meet with the citizen group that funded the perennial plantings along the boulevard to determine next steps. Two Assistant Horticulturalist positions will be unfrozen during FY 2019. In 2017-18, the Leisure Services Department will review major planting areas, newly-added landscape areas, and upcoming new landscape projects, and develop recommendations for maintenance, staffing, and contract needs. $53,000 is currently proposed for implementation of Hwy 20 corridor plantings in FY2023, with additional funding in FY2024. Community-Wide Solar Strategy A community-wide strategy that seeks to advance solar installations at residential, commercial, and utility scales was undertaken in 2017. The work builds on recommendations implemented through the Iowa Economic Development Authority's Rooftop Solar technical assistance in 2016, which aimed to reduce the soft costs of solar installations. Solar arrays were installed on the rooftops of five of Dubuque's six fire stations. Combined, the stations will avoid emitting approximately 3,740 tons of carbon dioxide over the life of the panels, or the equivalent of the annual electric use of 425 homes. The project is expected to reduce the City's cost of each kWh of electricity used by more than 30 percent. Alliant Energy funded and completed construction of "solar gardens" at two sites in Dubuque to form the largest solar development in the state of Iowa. This project was conducted in collaboration with the City of Dubuque and Greater Dubuque Development Corporation. Over 15,000 solar panels were installed on 21 acres of City-owned property north of Humke Road in Dubuque Industrial Center West. Over 3,500 solar panels were installed on six acres owned by A.Y. McDonald Mfg. Co. along U.S. 61/151 , near the 16th Street detention basin. In 2018, a Communitywide Energy Strategy will expand this work in efforts to diversify the community's energy profile while reducing greenhouse gas emissions from all sectors. An Energy Strategy will provide supporting detail to the energy and building recommendations found in the 50% by 2030 Community Climate Action & Resiliency Plan. Municipal buildings will be assessed and prioritized for energy efficiency and solar potential. Policies and existing funding sources will be examined in order to identify opportunities to incent and/or require energy efficiency and renewable energy improvements in existing buildings and new construction. Comprehensive Plan: Adoption After 13 months, over 12,500 ideas, and more than 6,000 residents and stakeholders engaged in the Imagine Dubuque campaign, the Long Range Planning Advisory Commission reviewed and recommended in August 2017, and the City Council adopted Imagine Dubuque 2037: A Call to Action -2017 Comprehensive Plan in September 2017. Imagine Dubuque is the result of extensive, -63- informed, inclusive, and tailored community engagement. Imagine Dubuque is the community's plan. It reflects the values and goals of Dubuque residents and stakeholders. The City Council will be asked to approve an improvement level budget request ($15,199)to retain consultant services to serve as project manager, data manager, and facilitator, acting as the independent backbone organization for a collective impact model to implement the 2017 Imagine Dubuque Comprehensive Plan. East-West Corridor Study: Implementation The US Highway 20 corridor is the primary east-west route in the City of Dubuque and future traffic volume projections indicate US Highway 20 alone will not provide sufficient capacity for east-west travel in the City. Capacity along alternate east-west corridors will need to be improved to provide connectivity between the western growth areas and the downtown urban core. In February 2012, the City Council formally adopted the East-West Corridor Connectivity Study and directed City staff to begin implementation plans. The study included recommended improvements supporting complete streets concepts, multi-modal transportation, vehicle, pedestrian, bicycle, and recreational improvements. In 2016, the Grandview Ave. and Delhi Street intersection was converted to a roundabout. After an intensive community engagement and education process, the conversion has decreased delay times and has been met with overwhelmingly positive support. In August 2017, the City Council listed the East-West Corridor Capacity Improvement Implementation as a "Top-Priority" in its 2017-2019 Goals and Priorities. In an effort to advance this top priority, the City has already completed or will be completing the following improvements: Project Year Cost Property Acquisition 2016 $ 853,300 Grandview- Delhi Roundabout 2016 $ 827,000 Loras - Grandview Traffic Signals 2017 $ 370,300 University -Grandview Roundabout 2018 $ 1,200,000 Total Improvements To-Date $ 3,250,300 An additional $9,328,000 is programmed from FY 2019 through FY 2022 for the East-West Corridor Study Implementation to fund improvements in the "Overlap Section" as described below. -64- The section of University Avenue, from Pennsylvania Avenue to Loras Boulevard, referred to as the "Overlap Section" was recommended for converting the three intersections along University Avenue to roundabouts. With funds programmed in FY2018-2019, the next steps in the design development process are to complete the preliminary engineering and environmental (NEPA) study phase for intersection capacity improvements along University Avenue at Loras Boulevard, Asbury Road, and at Pennsylvania Avenue. ' "1: 5,0i°c( - litt \ �AsauR� I UNIVERSITY • ►,istat VERLAP SECTION 6.\10.r.' r '}_,fit:. ''. S `/ Qorwalb ` y ;:5 'S�.'�..- ' \ .fit'- ,'. d:. , - , '‘'' I., 1 *'-'7'-)\-----:1 I.., F / 711°- i 1 1 LORAS 1 114:;: ,1001.°'°411\ 4 . "k. ;,,.‘e " ' # / .','- / ' r- - - --44--,:--..; - - - ::— ,,,_____ ,_..., -:- — PENNSYLVANIA �`, `C ' /`//� ..t f. -; p x. , 11y ,ICyd i Enhanced R- i .let ( - �i.'II . .. ,z i' ,'T"`_ • ,,\�� .,.,, .....:...1,.1. i., ,,,00.,,,,,4,,,,,,.._,\-\,„ 11'4' ,..,,,: ... / "" - .,. .'' '4' I -. ,1 r". ----- , ,�. ,.. /,, a; "\ ...,,/,,,,,,, e'er j r ,,, ^ ;UNIVERSRY OF a .. . 1 b, " "j ``:. :' A DUBUQUE j kii --- Once the preliminary engineering and environmental(NEPA)study are completed, corridor impacts will be identified, and property acquisition could begin in approximately FY2020/2021 and would take approximately two years to complete.Once property acquisition is completed within the Overlap Section, construction to convert the three intersections along University Avenue to roundabouts could begin in FY2022 and would take approximately 2-3 years to complete. The City is in talks with the Iowa Department of Transportation and the Federal Highway Administration attempting to positively impact the time line. Master Plan for Chaplain Schmitt Island The Chaplain Schmitt Island Task Force, convened by the Dubuque Racing Association (DRA)and chaired by former DRA Board Member Kevin Lynch, will make a presentation on the Chaplain Schmitt Island Placemaking and Implementation Plan (RDG) to the City of Dubuque Park & Recreation Commission and present to City Council for review and approval in the first and second quarter of 2018 respectively. City staff will work with the task force to develop necessary agreements to advance implementation of the plan. $45,000 has been recommended in FY 2022, to fund any improvements that are identified in the final report to City Council. Splash Pad Many residents identified the need for more family-friendly recreation opportunities, like a splash pad,during the Imagine Dubuque Comprehensive Planning process. In 2018, City staff will research options, locations, and best practices, and engage the community. A final report will be prepared -65- for the City Council, at which time direction will be sought on a project and budget proposal. No funding is allocated for such a project at this time. South Port Redevelopment Master Plan Plans are being developed to continue Dubuque's riverfront development through the adaptive reuse of a brownfield in the South Port. In July 2017, the City Council received an update from consultants hired to identify development opportunities for the area. The conceptual plan was designed to build on the success of the Port of Dubuque and developed based on the feedback of Dubuque residents, South Port property owners and a local real estate firm. The plan includes a waterfront hotel, boardwalk, playground, mixed-use condo, and retail building attached to a parking garage, and a series of smaller residential buildings. No action has been taken on the plan, which is just a concept. City staff submitted the concept to the EPA for review in the fall 2017. Recommended South Port improvements have been submitted to the Army Corps of Engineers and are included in the Corps's draft master plan of the 6.5 miles of Dubuque Mississippi River Front. Identified improvements are recreational and navigational in nature. Also included in pending Corps Critical Acquisition Position (CAP) request are funds to bury the flood wall and install a hike/ bike trail atop it. The request is pending Corps approval in 2018. Crime Prevention Program Expansion Key issues for this new City Council High Priority include early intervention, identification of best practices and diversion options, identification and expansion of partnerships, data analysis to analyze crime statistics and identify locations of high impact crimes, the CHANGE program, restorative justice programs, and public information efforts to identify desired outcomes of existing programs. Efforts underway and under development that support this priority include: • Police Calls/Crime Reports: The department is finalizing the 2017 crime statistics, and they will be reported to City Council in the next quarter. • President Obama's 21st Century Policing Task Force has not seen updates and is assumed to be a defunct project. However, the Dubuque Police Department recognizes the positive recommendations and continues to use it as a guide. Mental health and policing were topics throughout the report, and the Dubuque Police Department will host a Crisis Intervention Team training in 2018. • The police department is exploring options in the juvenile justice system beyond traditional court actions. • The City is a member of the Government Alliance on Race and Equity (GARE), and the Police Department actively participates. • An additional command position is recommended in the Fiscal Year 2019 budget process, increasing the authorized strength of the Police Department from 109 to 110 sworn positions. -66- Chief of Police Mark Dalsing provides the following table comparing annual crime statistics: "Part I" Crimes for Calendar Years 2012-2017 Compiled by the Dubuque Police Department CY17% CY17% CY17% Over/Under Over/Under Over/Under Performance Measures CY12 CY13 CY14* CY15 CY16 CY17 Avg. CY16 Average Peak Year No.of Crimes Against Persons 186 208 220 265 243 203 221 -16.5% -8.1% -23.40% Murder 2 0 0 5 1 2 2 100.0% 0.0% -60.0% Sexual Assault 43 38 61 80 98 90 68 -8.2% 32.4% -8.2% Robbery 21 32 20 27 26 16 24 -38.5% -33.3% -50.0% Aggravated Assault 120 138 139 153 118 95 127 -19.5% -25.2% -37.9% No.of Crimes Against Property 1,992 1,791 1,662 1,953 1,875 1,667 1,823 -11.1% -8.6% -16.3% Burglary 583 431 416 548 420 331 455 -21.2% -27.3% -43.2% Burglary to Motor Vehicle 298 231 168 106 144 157 184 9.0% -14.7% -47.3% Theft 1,080 1,103 1,035 1,245 1,235 1,116 1,136 -9.6% -1.8% -10.4% Theft of Motor Vehicle 31 26 43 54 76 63 49 -17.1% 28.6% -17.1% Total 2,178 1,999 1,882 2,218 2,118 1,870 2,044 -11.7% -8.5% -15.7% *Switch to Sungard software August 2014 High Year For Crimes Against Persons, the calendar year 2016 national average clearance rule is 45.6%, while the Dubuque Police Department's calendar year 2017 clearance rate is 88.8%. The City's network of security and traffic cameras grew to nearly 1,085 in 2017. As part of the City's efforts to enhance street lighting, 11 new mid-block poles and LED lights were added to the Washington Neighborhood in summer 2017 and 665 City-owned lights have been converted to LED since May 2015. To improve the safety of Dubuque's housing stock, the International Property Maintenance Code was adopted in July 2016 and applies to all property types and provides a standard for property maintenance and minimum requirements. The budget proposal requests an additional Housing Inspector position and a recommendation to City Council will ask for a tiered rental inspection system. The number of confirmed "shots fired" calls were down from 33 in 2015 to 26 in 2016 to 20 in 2017 (a 43% decrease from 2015). That number is still not acceptable, but a reduction is an improvement. Joe Noll, President of the Downtown Neighborhood Association wrote in December 2017: "Our family has lived at 315 W, Locust for 45 years, raised five children and refused to leave when there were major problems facing our neighborhood in the early 1990's. Seeing flashing lights from multiple police cars were at least a weekly and sometimes a daily occurrence. Many residents and property owners left because of a perceived safety concerns. The neighborhood was seen as a "bad neighborhood" by those outside of it but not by those who lived actually lived there. The Downtown Neighborhood Council, now the Downtown Neighborhood Association, was formed at that time to first tackle the problem of piles of trash from irresponsible property owners and tenants where rodents took up residence. After that Community -67- Oriented Police officers, first on foot then with bikes, put a lid on criminal activities, disturbances and other matters, basically saving the neighborhood. Today, 25 years later after hundreds of meetings, the involvement of neighbors, business owners, responsible property owners and hundreds of hours of commitment by all City Departments,. I can say that 2017 is the best year we have had since before the 1990's. Room does not permit to list all those who deserve to be thanked. SO THANK YOU ALL!!! While our journey has improved challenges still remain." Traffic/Security Camera System In 2017, the City has installed 105 new cameras, along with 12.5 miles of conduit and 10.9 miles of fiber that will allow for future camera installation. The following is a list of areas where cameras have been added in FY17. Bee Branch - 75 Cameras US 61/151 at Locust Connector Washington Street Parking Lot US 61/151/Iowa Street NW Arterial at Pennsylvania (Updated) HWY 20 at Century (Updated) NW Arterial at Asbury (Updated) Jackson at 20th (Updated) US 61 at Twin Valley (Updated) Central at 32nd (Updated) US 61 at Maquoketa (Updated) Grandview at Delhi NW Arterial at Chavenelle (Updated) HVVY 20 at NWA(Updated) Jackson at 14th HVVY 20 at Devon (Updated) Elm at 16th HVVY 20 at University (Updated) Jackson Park - 13 Cameras JFK at Pennsylvania (Updated) NW Arterial at JFK(Updated) HVVY 20 at VVacker (Updated) NW Arterial at Plaza (Updated) University at Walnut JFK at Pennsylvania (Updated) Loras at Grandview JFK at Asbury (Updated) Loras at Montrose US 61/151 at 9th Loras at Walnut Elm at 14th Hill at 5th Loras at Alta Vista In addition to the new cameras, another 55 cameras where replaced because of newer technology or camera failure. These newer cameras have a higher resolution and Wide Dynamic Range feature which allows them to see better in all light conditions . Today, there are 572 Traffic/Security cameras recorded through the Traffic Operations Center in City Hall. The remaining 513 cameras are recorded at various servers throughout the City. The recommended budget has funding for additional cameras in the amount of$515,558 from FY 2019 through FY 2023. Additional funding is also allocated to the network of fiber optics that supports the camera system; Traffic Signal Fiber Optics ($355,000). -68- Dilapidated Buildings/Structures A dilapidated building/structure identification and assessment program is recommended for funding in the FY 2019 CIP. The total project cost is $123,900 split over three years. The project will result in a complete inventory and evaluation of all buildings in the Greater Downtown Urban Renewal District (GDURD). Essential to this project will also be the development of a revitalization plan for buildings and areas identified in the assessment. The project will be implemented in three phases: identification, evaluation, and planning. Phase one will include the identification of all buildings and structures in the GDURD deemed to be substandard and/or where an illegal activity or use is evident. The current property maintenance code will be used as the principle standard by which conditions are assessed. In phase two, the exterior of buildings and structures will be evaluated for their feasibility of rehabilitation. The third and final phase ofthe project will be development ofthe revitalization plan.The plan will be organized by building concentrations and neighborhood impact. The plan will involve inclusive community engagement opportunities to help inform the community revitalization strategies, responsibilities, and resources necessary to address dilapidated conditions and revitalization on a neighborhood level. Five Flags Center Study CSL International was hired to complete the Five Flags Center study. The survey developed received input from over 1000 people. An analysis of the existing operations was completed and a review of industry trends and competitive/comparable facility analysis was completed. This completed Phase I of the study which was the current assessment phase. The Phase II work has been in process which includes event use levels analysis, market supportable program analysis and design charrette ($50,000). Once completed, the study will be presented to the Mayor and City Council in order to inform direction regarding next steps. Inclusive Dubuque: Continue Support & Participation In 2017, network partners continued their growth in depth and breadth. The Peer Learning Council has developed various toolkits and recently launched a nine-month series of peer learning workshops, which bring together human resources and other professionals to learn about best practices. The "I'm a Dubuquer" campaign featured 45 community members (and growing) of various identities, telling their stories. The network also hosted community conversations, a conference at the Growing Sustainable Communities Conference facilitated by the Government Alliance on Race and Equity, and other opportunities to raise awareness and dialogue on equity and inclusion. As an Inclusive Dubuque member, the City's Equity Teams continued their work. The Core Team worked with pilot departments to develop departmental equity plans; the Recruitment & Retention Team disaggregated demographic data for employee recruitment and hiring practices, and the Cash Out Team began working with FY18 Contracted and Purchase of Service partners to integrate -69- equity into reporting requirements. Other equity work included the development of multi-lingual resources for the public and introductory equity and inclusion training for all new City hires. In the coming year, over 60 network partners will continue to work to address inclusion, equity, and workforce priorities in the community. Sector working groups will work on advancing equity in Housing/Neighborhoods, Education, Economic Opportunity, and Arts and Culture. An "Annual Equity Report" will document outcomes in the community. Internally, City staff will integrate equity into the organization's performance measures, focusing on equitable community engagement, integration of equity into recruitment and retention efforts, use of an equity lens to evaluate Purchase of Services and Contracted Services, and equitable service delivery. Kerper Boulevard Revitalization Kerper Boulevard connects the new Intermodal Transportation Center, Bee Branch Creek Greenway, Sutton Pool, and 229-acre Kerper Boulevard Industrial Park. There are large vacant and under-utilized buildings in the industrial park. The street design is a four-lane divided roadway that lacks accommodations for multiple modes of transportation, and could benefit from a Compete Streets re-design. In FY 2020, $50,000 is recommended in the CIP budget to fund a multidisciplinary consultant team to work with City departments to create a comprehensive master plan that incorporates community engagement and stakeholder input to identify strategies, catalytic actions, and resources for revitalization. In 2017, fiber optics were extended along this corridor and in 2018 the $4 million replacement of most of the sanitary sewer will be conducted. A U.S. DOT Tiger grant was submitted that would include a roundabout at Kerper and 16th Street to improve access. Multicultural Family Center: Colts Building Direction & Funding, In 2016,the City purchased the former Colts Building to allow for future expansion of the Mulitcultural Family Center, which has quickly outgrown its space in the Ruby Sutton Building. Design for the expansion was completed in 2017. The design includes a program/event/gathering space with two openings to the current Center. It would add two multipurpose rooms with technology upgrades, two smaller meeting rooms, a demonstration kitchen that could service larger events throughout the building, as well as a supervisory area for the addition. Exterior improvements include replacement of all the windows and improvement of the entry at Central and 10th. The project would include new, fully accessible restrooms and facade maintenance. Additional phases could include renovation of the 2nd floor of the original building and renovation of the office suite to include another department. A $1 ,564,000 CIP exists in FY2019 to begin construction on the phased project. River Cruise Docking Facilities There has been a significant delay in any plans for Viking River Cruises to begin operation on the Mississippi River. It is now not clear when or if that service will begin, and no ship construction has begun. Nonetheless, the City saw a significant increase in riverboat traffic to the Port with the arrival of two new riverboats, America and Louisiane. Due to limited docking space in the Port and docking scheduling conflicts, it is sometimes necessary for riverboats to dock at the Hawthorne -70- Street landing located at AY McDonald Park. However, this site only works as a docking area for some of the boats. The 5-year CIP includes $150,000 for the City to design a new docking facility in Fiscal Year 2023. Construction would begin in FY2024, if additional funding is identified. Roosevelt Road Water Tower The Roosevelt Street Water Tower project was identified as a solution to low operating water pressures in Zone 2 of the distribution system. Zone 2 encompasses the area in and around Roosevelt Street and Peru Road, including the Sky Blue Estates subdivision currently under development and the existing Alpine Park development and Eagle Valley Subdivision. The City has worked with Clapsaddle - Garber Associates, Strand Associates, Inc, and IIW, P.C., to identify efficient and economic solutions to manage the low-pressure issues experienced in Zone 2, along with a need to provide improved flows during fire flow conditions. The new water tower would replace the existing Eagle Point Water Tower and other ancillary water infrastructure ($2,700,000). Completion of a preliminary report is expected in March 2018 ($465,000) with the bid for construction being issued in the summer of 2018. A final contract for construction could be approved by the City Council in the third quarter of 2018. Cities at Risk Other than Des Moines (state capitol), Iowa City (University of Iowa), Ames (Iowa State University), and possibly Cedar Falls/Waterloo (University of Northern Iowa), all cities in Iowa are facing great risks, especially the smaller ones (and Dubuque is the smallest of the cities in Iowa with a population over 50,000). The local private colleges might help to get Dubuque into the category of the above named cities. In the March 30, 2017, Des Moines Register article, "How Iowa's Midsize Cities Have Been Left Behind," some current realities were detailed: "Since the 1990s, midsize cities like Clinton, with a population of 26,000, have borne the brunt of economic changes wrenching the nation and Iowa, including declines in manufacturing and increased overseas competition, said David Peters, an associate professor of sociology at Iowa State University who specializes in regional and rural development. Since the recession, metropolitan areas in Iowa have grown, gathering political influence and government funding. But micropolitan areas, with 10,000 to 50,000 population, such as Clinton, Keokuk, Fort Madison and Mason City, have collectively suffered population and job loss and have not recovered as well as their larger counterparts, he said. -71- A recent ISU report shows that, when grouped together and compared to rural and metropolitan areas, Iowa's 17 micropolitan areas in 19 Iowa counties had: • The lowest median household income in 2015 ($50,770). • The highest poverty rates (13.8 percent). • The lowest labor force participation (64.8 percent). • The highest unemployment rate (4.2 percent). Eleven of Iowa's micropolitan areas have lost jobs since 2008, and nine of them have lost population. At the bottom of both categories is the Clinton micropolitan area, losing 7 percent of its jobs and 2.7 percent of its population. From 2010 to 2016, Iowa's metropolitan areas grew 5.8 percent, while micropolitan areas lost 1 .2 percent of their population." Dubuque has been having tremendous success in the area of economic development. The use of Tax Increment Financing as a tool to finance industrial land acquisition and development and to create incentives for business to create jobs is working well. Since the late 1990s, the City has acquired 1,257 acres of land for industrial park development and over 4,500 jobs exist in the technology and industrial parks. These employees rent apartments, buy homes, shop at stores, and patronize restaurants. All of the taxing bodies have benefited. Total Personal Income is income earned by an area's workforce. A growing workforce and growing wages are reasons for a rise in Total Personal Income for an area. Total Personal Income rose by 4.3% in 2014 in the Dubuque area. That is not true everywhere. In fact, Dubuque is surrounded by communities significantly underperforming the 2014 national growth rate of 2.9%, including: Janesville-Beloit, WI 0.5% Mankato, MN 0.4% Sioux City, IA 0.5% Kankakee, IL -0.9% Springfield, IL 0.3% Carbondale-Marion, IL 0.4% Peoria, IL -1 .1% Danville, IL -3.9% Bloomington, IL -3.2% Grand Forks, ND -1 .4% Grand Island, NE -0.5% Terre Haute, IN 0.2% Topeka, KS 0.5% In 2017, Dubuque reached a record level of hotel occupancy, achieving 61 .5% following the 2016 report of 60.3%, as reported by the Dubuque Area Convention and Visitors Bureau. This bodes well for the economy and for the possibility of future hotel development. -72- The East Central Iowa Association of REALTORS® reports increases in residential home sales each of the last four years as the number of homes sold in 2017 increased 7% over those sold in 2016, with1,483 homes sold in the Tri State area in 2017, up from 1,384 in 2016. The 2017 average sale price of homes increased 6%. The average sale price of homes sold in 2017 was $189,676, compared to $178,376 in 2016. East Central Iowa Multiple Listing Service's 2017 Residential Housing Report # Of Sales in Avg. Sales Price 2017 1,483 $ 189,676 2016 1,384 $ 178,736 Dubuque Main Street provided the following information on progress in downtown Dubuque: SUSTAINA. L DUBUQUE Downtown Revitalization viable • livable • equ+Eable Improvement 1985 through % since 2000 December 2017 New Construction $246 million 92% ;� BuildingRehabilitation yl � $379 million 90% Real Estate Sales $177 million 74% DUBUQUE MAIN Public Improvements $128 million 94% STREET Net New Jobs +4,222 69% 1 1 Total Improvements: $754 million 92% -73- While Dubuque is experiencing success in economic development, there are communities across the country and in the Midwest that are having the opposite experience. According to 24/7 Wall Street the following is the top 25 cities for losing jobs in 2016, of the 75 communities that experienced job loss: Rank City Employment Change 25 Lynchburg, VA -1.41% 24 Bloomington, IL -1.41% 23 Elmira, NY -1.45% 22 Joplin, MO -1.54% 21 Vineland-Bridgeton, NJ -1 57% 20 Duluth, MN-WI -1.67% 19 Alexandria, LA -1.67% 18 Decatur, IL -1.68% 17 Williamsport, PA -1.82% 16 Fairbanks, AK -1.86% 15 Topeka, KS -1.96% 14 Binghamton, NY -1.98% 13 Mankato, MN -2.01% 12 Staunton-Waynesboro, VA -2.02% 11 Tulsa, OK -2.03% 10 Manhattan, KS -2.03% 9 Cheyenne, WY -2.07% 8 Lawton, OK -2.07% 7 Carbondale-Marion, IL -2.15% 6 Oklahoma City, OK -2.20% 5 Mansfield, OH -2.33% 4 Shreveport-Bossier, LA -2.35% 3 Houma-Thibodaux, LA -3.74% 2 Casper, WY -3.77% 1 Lafayette, LA -4.46% 24/7 Wall Street reports that "Half of the 20 fastest shrinking cities are in the so-called Rust Belt of the United States...encompassed parts of the Northeastern and Midwestern United States.." Government Transparency In November 2017, City staff hosted an evening public budget input meeting at the City Council Chambers in the Historic Federal Building. During November 2017, an online survey was made available to the public to submit budget input. By December 1 , 2017, a total of 43 community members shared their budget input. Out of the 30 community participants, staff reached 17 individuals through the in-person meetings and 26 participants took the online survey. The input provided has been analyzed by City staff and evaluated by the City Manager for inclusion in the Fiscal Year 2019 budget recommendation as deemed appropriate, consistent with City Council priorities. -74- During Fiscal Year 2016, the City launched a web-based open data platform which can be found at http://dollarsandcents.cityofdubuque.orq. The City of Dubuque's Open Budget application provides an opportunity for the public to explore and visually interact with Dubuque's operating and capital budgets. This application is in support of the five-year organizational goal of a financially responsible city government and high-performance organization and allows users with and without budget data experience, to better understand expenditures in these categories. During Fiscal Year 2017, an additional module was added to the open data platform which included an interactive checkbook which will allow citizens to view the City's payments to vendors. The final step will be adding performance measures to the open data platform to allow citizens to view outcomes of the services provided by the City. Conclusion There will be six City Council special meetings prior to the adoption of the Fiscal Year 2018 budget before the state mandated deadline of March 15, 2018. I want to thank Budget Director Jennifer Larson, Assistant City Manager Cori Burbach, Senior Budget Analyst Alexis Steger, Public Information Officer Randy Gehl, Office Manager Juanita Hilkin, Secretary Stephanie Valentine and Communications Assistant Natalie Riniker, for all their hard work and dedication in preparation of this budget recommendation. /7,titik kt:ii 7kat;A-L.., Michael C. Van Milligen MCVM:jh -75- This page intentionally left blank. -76- ATTACHMENT I https://www.worldhealth.net/news/predictions-technology-health/ INDUSTRY NEWS ARTIFICIAL INTELLIGENCE BIOTECHNOLOGY LONGEVITY Predictions in Technology and Health 1 year, 7 months ago Posted on Jun 06,2016,6 a.m. Did you think in 1998 that 3 years later you would never take pictures on paper film again? What happened to Kodak will happen in a lot of industries in the next 10 years - and most people don't see it coming. INTRODUCTION:by Dr.Ronald Klatz MD,DO: We live in a miraculous time, due to the rapid growth of new technology. For those following the anti-aging lifestyle, life expectancy is increasing by three months per year. People utilizing the anti-aging tenets for health are seeing a life expectancy of 94, and that rate is also growing.Just as we predicted 25 years ago, medicine is now at last finally transforming from the treatment of illness and disease into preventative measures and the extension of the human lifespan. Here are Dr. Robert Goldman's predictions of what we can expect in the future and the impact that it will have on our lives. FUTURE PREDICTIONS: In 1998, Kodak had 170,000 employees and sold 85% of all photo paper worldwide. Within just a few years, their business model disappeared and they went bankrupt. What happened to Kodak will happen in a lot of industries in the next 10 years - and most people don't see it coming. Did you think in 1998 that 3 years later you would never take pictures on paper film again? Yet digital cameras were invented in 1975. The first ones only had 10,000 pixels, but followed Moore's law. So as with all exponential technologies, it was a disappointment for a long time, before it became way superior and got mainstream in only a few short years. It will now happen with Artificial Intelligence, health, autonomous and electric cars, education, 3D printing, agriculture and jobs. Welcome to the 4th Industrial Revolution. Welcome to the Exponential Age. Software will disrupt most traditional industries in the next 5-10 years. Uber is just a software tool, they don't own any cars, and are now the biggest taxi company in the -77- world. Airbnb is now the biggest hotel company in the world, although they don't own any properties. Artificial Intelligence: Computers become exponentially better in understanding the world. This year, a computer beat the best Go player in the world, 10 years earlier than expected. In the US,young lawyers already don't get jobs. Because of IBM Watson,you can get legal advice (so far for more or less basic stuff)within seconds,with 90% accuracy compared with 70%accuracy when done by humans. So if you study law, stop immediately. There will be 90% fewer lawyers in the future, only specialists will remain. Watson already helps nurses diagnosing cancer,4 time more accurate than human nurses. Facebook now has a pattern recognition software that can recognize faces better than humans. By 2030, computers will become more intelligent than humans. Autonomous Cars: In 2018 the first self-driving cars will appear for the public. Around 2020, the complete industry will start to be disrupted. You don't want to own a car anymore. You will call a car with your phone, it will show up at your location and drive you to your destination. You will not need to park it, you only pay for the driven distance and can be productive while driving. Our kids will never get a driver's license and will never own a car. It will change the cities, because we will need 90-95% fewer cars for that. We can transform former parking space into parks. 1.2 million people die each year in car accidents worldwide. We now have one accident every 100,000 km,with autonomous driving that will drop to one accident in 10 million km. That will save a million lives each year. Most car companies may become bankrupt. Traditional car companies try the evolutionary approach and just build a better car, while tech companies (Tesla, Apple, Google)will do the revolutionary approach and build a computer on wheels. I spoke to a lot of engineers from Volkswagen and Audi; they are completely terrified of Tesla. Insurance Companies will have massive trouble because without accidents, the insurance will become 100x cheaper. Their car insurance business model will disappear. Real Estate will change. Because if you can work while you commute, people will move further away to live in a more beautiful neighborhood. Electric Cars won't become mainstream until 2020. Cities will be less noisy because all cars will run on electric. Electricity will become incredibly cheap and clean: Solar production has been on an exponential curve for 30 years, but you can only now see the impact. Last year, more solar energy was installed worldwide than fossil. The price for solar will drop so much that all coal companies will be out of business by 2025. -78- With cheap electricity comes cheap and abundant water. Desalination now only needs 2kWh per cubic meter. We don't have scarce water in most places,we only have scarce drinking water. Imagine what will be possible if anyone can have as much clean water as he wants, for nearly no cost. Health:There will be companies that will build a medical device (called the "Tricorder" from Star Trek) that works with your phone,which takes your retina scan,your blood sample and you breathe into it. It then analyses 54 biomarkers that will identify nearly any disease. It will be cheap, so in a few years everyone on this planet will have access to world class medicine, nearly for free. 3D printing:The price of the cheapest 3D printer came down from $18,000 to $400 within 10 years. In the same time, it became 100 times faster. All major shoe companies started 3D printing shoes. Spare airplane parts are already 3D printed in remote airports. The space station now has a printer that eliminates the need for the large number of spare parts they used to have in the past. At the end of this year, new smart phones will have 3D scanning possibilities. You can then 3D scan your feet and print your perfect shoe at home. In China, they already 3D printed a complete 6-storey office building. By 2027, 10% of everything that's being produced will be 3D printed. Business Opportunities: If you think of a niche you want to go in, ask yourself: "in the future, do you think we will have that?" and if the answer is yes, how can you make that happen sooner? If it doesn't work with your phone, forget the idea. And any idea designed for success in the 20th century is doomed in to failure in the 21st century. Work: 70-80% of jobs will disappear in the next 20 years. There will be a lot of new jobs, but it is not clear if there will be enough new jobs in such a small time. Agriculture: There will be a $100 agricultural robot in the future. Farmers in 3rd world countries can then become managers of their field instead of working all days on their fields. Agroponics will need much less water. The first Petri dish produced veal is now available and will be cheaper than cow-produced veal in 2018. Right now, 30% of all agricultural surfaces is used for cows. Imagine if we don't need that space anymore. There are several startups that will bring insect protein to the market shortly. It contains more protein than meat. It will be labeled as "alternative protein source" (because most people still reject the idea of eating insects). -79- There is an app called "moodies"which can already tell in which mood you are. Until 2020 there will be apps that can tell by your facial expressions if you are lying. Imagine a political debate where it's being displayed when they are telling the truth and when not. Bitcoin will become mainstream this year and might even become the default reserve currency. Longevity: Right now, the average life span increases by 3 months per year. Four years ago, the life span used to be 79 years, now it's 80 years. The increase itself is increasing and by 2036, there will be more than one year increase per year. So we all might live for a long long time, probably way more than 100. Education: The cheapest smart phones are already at $10 in Africa and Asia. Until 2020, 70% of all humans will own a smart phone. That means, everyone has the same access to world class education. Robert M.Goldman MD, PhD, DO, FAASP Co-Founder & Chairman-World Academy of Anti-Aging Medicine World Chairman-International Medical Commission Co-Founder & Chairman of the Board-A4M Founder& Chairman-International Sports Hall of Fame President Emeritus-National Academy of Sports Medicine (NASM) Chairman-U.S. Sports Academy's Board of Visitors -80- IN„ IEast Central Iowa Association of REALTORS' February 22, 2018 City Manager Mike Van Milligan 50 West 13th St. Second Floor Dubuque, IA 52001 Dear City Manager Van Milligan, The Board of Directors of the East Central Iowa Association of REALTORS® (ECIAR) is supportive of the proposed City Housing and Community Development budget that would set aside city funds to reimburse landlords for damage caused by tenants who receive rent subsidies. ECIAR is deeply aware that fifty years after the passage of the Fair Housing Act our area still remains much too segregated by race and national origin. REALTORS®have endeavored to change business practices and implement training to address discrimination at the transaction. However, many factors contribute to continued segregation in housing and limit many area residents housing choices. Last year Dubuque City Council members were asked to consider requiring landlords to accept Section 8 housing vouchers by making Source of Income a protected housing class. We disagreed then and still do not believe this has any sustained impact on segregation. We believe that City Housing, the Dubuque Area Landlord Association and other interested parties should continue to work together to address continued segregation and should measure progress being made,but should not dictate specific solutions or policies. We believe the establishment of a city supported damage reimbursement fund is a good first step that would help provide incentive for landlords to accept Section 8 housing vouchers as well as bring to light th extent of property damage by section 8 housing voucher recipients to determine if it is a real problem or just perception. We applaud the City of Dubuque for its efforts to address housing needs for low income individuals and families through the many programs and services currently available and welcome the opportunity to work with the City of Dubuque, Inclusive Dubuque, City Housing and other interested partners to explore additional options and opportunities to meet the housing needs of Dubuque residents. Respectfully, Members of the East Central Iowa Association of REALTORS®Board of Directors 1828 Carter Road, Dubuque, IA 52001