House File 718City of Dubuque
City Council Meeting
Consent Items # 018.
Copyrighted
May 15, 2023
ITEM TITLE: House File 718
SUMMARY: City Manager submitting information on House File 718 and the impact
on the City of Dubuque.
SUGGESTED Suggested Disposition: Receive and File
DISPOSITION:
ATTACHMENTS:
Description Type
MVM Memo City Manager Memo
Staff Memo Staff Memo
THE C
DUjIBQTE
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: House File 718
DATE: May 11, 2023
Dubuque
WAWca 914
ii
2007-2012.2013
2017*2019
Chief Financial Officer Jennifer Larson is submitting information on House File 718 and
the impact on the City of Dubuque.
v
Mic ael C. Van Milligen
MCVM:sv
Attachment
CC' Crenna Brumwell, City Attorney
Cori Burbach, Assistant City Manager
Jennifer Larson, Chief Financial Officer
THE CITY OF
DUB FE
Masterpiece on the Mississippi
TO: Michael C. Van Milligen, City Manager
FROM: Jennifer Larson, Chief Financial Officer
SUBJECT: House File 718
DATE: May 9, 2023
INTRODUCTION
Dubuque
All -America City
wux?tia o4
2007-2012.2013
2017*2019
The purpose of this memorandum is to provide a summary of House File 718 and the impact
on the City of Dubuque.
BACKGROUND
House File 718 is effective July 1, 2024. Several levies are aggregated into a new general
maximum levy and then adjusted based on valuation growth. If a city's taxable valuation
grows by more than 3%, it follows a formula (see below) to adjust levy. Once a city's new
general maximum levy goes below $8.10, it cannot go above. This bill also limits the city's
ability to appeal to the State Appeal Board for suspension of levy limitations for certain
reasons for natural disaster purposes only. This bill creates a new 65 and over Homestead
Property Tax Exemption that is not funded by the State of Iowa ($3,250 in 2024 and $6,500 in
2025). It also changes the Military Service Property Tax Credit to an Exemption which
removes all State Funding and increases it from $1,852 to $4,000. The bill requires minimum
assessment agreements on commercial abatements and eliminates residential abatement
just on the school levy for urban revitalization areas. This bill sets up a new hearing within the
budget process for information to the taxpayers. Standardized statements will have to be
mailed to each property owner that show percentages of the budget each represents. Budget
deadlines are extended to April 30t" instead of March 31 st. It includes an increase of 30% for
General Corporate Purpose bonding limits based on population -based thresholds.
DISCUSSION
Levies combined into $8.10 levy:
1. $0.135 Levy for instrumental or vocal musical groups (voted)
2. $0.81 Levy for memorial building (voted)
3. $0.135 for Symphony Orchestra (voted)
4. $0.27 for cultural and scientific facilities (voted)
5. Amount needed County bridge (voted)
6. $1.35 Mississippi or Missouri River Bridge Construction (voted)
7. $3.375 If #6 has been put in for aid of a bridge, further tax for purchasing a bridge
(voted)
8. $0.0675 levy for contract for use of bridge (non -voted)
9. $0.03375 Aid to transit company (voted)
10.Amount needed for Civic Center levy for rent, maintenance, and taxes (non -voted)
11. $0.135 levy for maintaining civic center (non -voted)
12. $0.0675 levy for planning and sanitary disposal project (non -voted)
13. $0.0675 levy for special charter city (non -voted)
14. $0.205 levy for Maintain Institution received by gift/devise (voted)
15. $1.00 levy for Emergency medical services district (voted)
16. $0.270 levy for Support of Public Library
The City of Dubuque does not utilize any of the levies that would be combined with the
$8.10 levy.
Levies that remain separate from $8.10 levy:
1. $0.95 levy for operating and maintenance publicly owned transit (non -voted)
2. $0.27 levy for aviation authority (non -voted)
3. Amount needed for Tort Liability levy for liability insurance, property insurance, and
other insurance (non -voted)
4. Support of a Local Emergency Management Commission (non -voted)
5. Debt Service levy
6. Police and Fire Retirement
7. FICA & IPERS (if at general fund levy limit)
8. $1.50 Unified law Enforcement (voted)
9. Emergency levy above $8.10 levy subject to special election
10. $3.00375 Ag land levy
11. $0.675 Capital projects
12.Appeal to State Board for Suspension of Levy limitations (natural disasters)
The City of Dubuque utilizes the transit levy, tort liability levy, debt service levy, ag
land, and FICA and IPERS levy.
Impact of General Maximum Levy and Valuation Growth Reduction
1. Calculating a new general maximum levy by combining levies with current
general levy:
1. Calculate new maximum general fund levy:
a. FY24 levies being merged $0 plus $8.10 general levy = $8.10
2. Set taxable value growth triggers to adjust the property tax rate down:
• If taxable valuation grows 6% or more: growth rate is reduced by 3% and levy
recalculated.
• If taxable valuation grows 3 to 5.99%: growth rate is reduced by 2% and levy is
recalculated.
• If taxable valuation grows less than 3%: no recalculation.
2
The following chart shows the history of City of Dubuque taxable valuation growth since 2015
(past ten years):
Fiscal
Year
Non-TIF
Taxable
Valuation
(Excludes Ag)
%
Change
Actual
General
Levy
Actual
Property
Taxes
HF 718
General
Levy
HF 718
Property
Taxes
$
Difference
2015
$2,250,099,910
3.64%
$8.10
$18,225,809
$7.94
$17,865,793
-$360,016
2016
$2,255,562,993
0.24%
$8.10
$18,270,060
$8.10
$18,270,060
$0
2017
$2,358,056,508
0.57%
$8.10
$19,100,258
$8.10
$19,100,258
$0
2018
$2,371,609,335
5.37%
$8.10
$19,210,036
$7.94
$18,830,578
-$379,458
2019
$2,499,017,299
5.37%
$8.10
$20,242,040
$7.78
$19,442,354
-$799,686
2020
$2,542,043,245
1.72%
$8.10
$20,590,550
$8.10
$20,590,550
$0
2021
$2,579,355,511
1.47%
$8.10
$20,892,780
$8.10
$20,892,780
$0
2022
$2,646,230,849
2.59%
$8.10
$21,434,470
$8.10
$21,434,470
$0
2023
$2,695,861,021
1.88%
$8.10
$21,836,474
$8.10
$21,836,474
$0
2024
$2,684,506,784
-0.421 %
$8.10
$21,744,505
$8.10
$21,744,505
$0
Three out of the ten years, non-TIF taxable valuation grew more than 3% but less than
5.99%. If HF 718 had been in effect since FY2015, the City's general levy would have
been reduced in FY2015, FY 2018, and FY2019 for a total property tax revenue
decrease of $1,539,160.
Homestead Exemption for Households 65 and Older
The bill creates a new 65 and over Exemption for the Homestead Property Tax Credit
effective retroactively to assessment years beginning on or after January 1, 2023 (Fiscal Year
2025). It is not income restricted and is in addition to the regular homestead credit. In 2024 it
is an additional $3,250 and in 2025 it is an additional $6,500. The additional amount is not
funded by the State.
The State will need to create a new application for those 65 and older to apply for the new
credit. There is no data on file with the City Assessor that determines the number of
homestead credits that are for households 65 and over.
Using 2020 Census Bureau data, 18.9% of people in Dubuque are 65 years and over. The
2020 population is 59,667. The estimated number of those 65 years and over is 11,277. It is
assumed of this number; some would live together, and some would live in apartments.
Estimating that 50% of the 11,277 own homes and would qualify for the new Homestead
Exemption for 65 and over would result in 5,638 new exemptions.
3
The average assessed value of a residential home is $159,503. When the Homestead
Exemption for Households over 65 is fully implemented, the additional exemption would be
$64.36.
Based on an estimated 5,368 households receiving the exemption, the estimated cost
to the City would be $345,484 when fully implemented.
Military Service Property Tax Credit Changed to Exemption and Increased
The bill increases the Military Service Property Tax Credit from $1,852 to $4,000 and
changes it to an exemption effective retroactively to assessment years beginning on or after
January 1, 2023 (Fiscal Year 2025). The bill also eliminates state funding for the Military
Service Property Tax Credit.
Based on information from the City Assessor, 2,011 households receive the Military Service
Property Tax Credit. The average assessed value of a residential home is $159,503. The
Military service Property Tax Credit/Exemption would increase from $18.34 to $39.61 in City
Tax.
Based on 2,011 households receiving the Military Service Property Tax Exemption, the
estimated cost to the City would be $79,656.
Urban Revitalization Areas — Commercial Property
Effective July 1, 2024, the bill requires minimum assessment agreements on commercial
abatements in urban revitalization areas. In addition, for revitalization areas established after
July 1, 2024, for property that is residential property, the exemption will not apply to property
tax levies imposed by a school district.
County Valuation Reports
Beginning January 1, 2024 (FY2026), valuation reports shall distinguish values as revaluation
or other type of addition to value when submitted to the Iowa Department of Revenue.
Local Government Budgets and Taxpayer Statements
Taxpayer Statements
On or before March 15t" of each year, the city must file with the Iowa Department of
Management a report containing:
1. Current fiscal year's property taxes certified.
2. Current fiscal year's property tax rate.
3. New budget year proposed property taxes to be certified.
4. If proposed property taxes exceed the current fiscal year's property taxes certified,
detailed statement of the major reasons for the increase, including the specific
purpose or programs the increase is proposed for.
5. Example of $100,000 home comparing property taxes in current fiscal year to
proposed property taxes.
12
6. Example of $100,000 commercial property comparing property taxes in current
fiscal year to proposed property taxes.
7. The city's percentage of total property taxes certified in taxpayer's taxing district in
current fiscal year as compared to all taxing authorities.
8. Date, time, and location of the public hearing to adopt the budget.
9. City website and webpage of taxpayer statements and budget documents.
The Department of Management will have a required form for the city to report all required
information, the statements required to be mailed, and the public hearing notice required.
Maximum Property Tax Dollars and Taxpayer Statements Public Hearing
The city must set a public hearing on the proposed property tax amount for the budget year
and the information included in the taxpayer statements. The public hearing must be separate
from any other meeting of the city council, including any other meeting or public hearing
relating to the city's budget, and other business of the city that is not related to the proposed
property tax amounts. The City Council may decrease, but not increase, the proposed
property tax amount to be included in the proposed budget. Notice of the hearing must be
published not less than ten nor more than twenty days prior to the hearing. Notice of the
hearing must also be posted on the city's website and social media accounts.
The city cannot certify the budget until the individual taxpayer statements have been mailed
and public hearings held.
The city must certify the budget to the County Auditor and to the Iowa Department of
Management no later than April 30 of each year (previously March 15).
No later than May 10, the number of persons in the city equal to one-fourth of one percent of
those voting for the office of governor, at the last general election, but the number shall not
be less than ten, can submit written protest of the budget (previously March 25).
Budget amendments exclude the requirement for the mailing of individual taxpayer
statements.
Bond Elections
All elections on the question of issuing general obligation bonds are moved to the general
election date (every November).
City Financing
Annual Financial Report — Additional Debt Reporting
Increases the level of reporting on debt in the annual financial report filed to the State of Iowa
each December 1. The information reported will include a list of bonds, notes, other debt
issued by the city during the most recently completed fiscal year, and the applicable lists for
other fiscal years beginning on or after July 1, 2024, detailing obligations that remain unpaid,
payable from any source, including the amount of the issuance, the project or purpose of the
issuance, whether the issuance was approved at election, eligible to be subject to a petition
for an election, or was exempt from approval at election as the result of statutory exclusions
461
based on population of the city or amount of the issuance, and identification of issuances
from the fiscal year or prior fiscal years related to the same project or purpose.
General Corporate Purpose Bond Limit Threshold
Increases the general corporate purpose bond threshold by 30%, which allows cities to issue
debt without a special election. In cities with a population of more than five thousand and not
more than seventy-five thousand, the threshold increases from $700,000 to $910,000. In
addition, this general corporate purpose bond threshold is adjusted annually going forward
based on the January consumer price index for all urban consumers.