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Set Public Hearing for Proposed Fiscal Year 2026 Tax Rate and Dollars and Taxpayer StatementsTHE C DUUB--.*.--TE Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Set Public Hearing for Proposed Fiscal Year 2026 Tax Rate and Dollars and Taxpayer Statements DATE: February 27, 2025 Dubuque All -America City 2007.2012.2013 2017*2019 Chief Financial Officer Jennifer Larson is recommending establishment of the FY2026 maximum property tax rate and that a March 25, 2025, public hearing be set for the establishment of the Proposed Fiscal Year 2026 Tax Rate and Dollars and Taxpayer Statements. At the March 25, 2025, public hearing, the only options available to City Council are to approve the amount of the proposed Fiscal Year 2026 tax rate and dollars as established at the March 3rd special meeting or decrease it. In 2025, the City levied for $28,233,757 in property tax revenue to support the general fund and in FY 2026 the budget guidelines would levy for $29,861,901 in property tax revenue to support the general fund. The FY2026 budget guidelines call for a 1.38% increase in the property tax rate, which increases the property tax rate from $9.9264 in FY25 to $10.0637 in FY 26, which would be a 3.90% or $33.38 tax increase for the average Dubuque homeowner, increase in property tax for commercial (1.90%, $60.91) and an increase for industrial (1.73%, $81.55). Property Tax Rate ,, 1.38% $0.14 Property Tax Asking 5.77% $1,628,144 Average Residential Payment 3.90% $33.38 Average Commercial Payment 1.90% $60.91 Average Industrial Property 1.73% $81.55 1 Page 3 of 99 Since 1989, the average homeowner has averaged an annual increase in costs in the City portion of their property taxes of +1.45%, or about +$9.28 a year. If the State had been fully funding the Homestead Tax Credit, the increase would have averaged about +$6.62 a year. For the proposed Fiscal Year 2026, Dubuque would have the LOWEST property tax rate as compared to the eleven largest cities in the state of Iowa with a population greater than 50,000 population. The highest rate (Waterloo (FY25)) is 119.35% higher than Dubuque's rate, and the average is 54.31 % higher than Dubuque. Dubuque's recommended FY 2026 property tax rate is $10.06 (increase of 1.38% from FY 2025). Fiscal Year 2026 City Property Tax Rate Comparison for Eleven Largest Iowa Cities Rank 11 City Waterloo FY25 Tax Rate $22.07 10 Council Bluffs FY25 $17.85 9 Des Moines (FY25)* $17.56 8 Davenport FY25 $16.61 7 Sioux City FY25 $16.54 6 Cedar Rapids FY25 $16.47 5 Iowa City (FY25) $15.63 4 West Des Moines (FY25)* $11.77 3 Ankeny (FY25)* $10.53 2 Ames FY26 $10.25 1 Dubu ue FY26 $10.06 AVERAGE w/o Dubuque $15.53 `Includes Des Moines Area Transit Levy While the property tax levy being approved tonight relates mainly to the general fund operating budget I think it is important to mention city debt. In July 2023, Moody's Investor Service upgraded the City's outstanding general obligation bonds from Aa3 to Aa2. In January, 2025, Moody's Investor Services affirmed the Aa2 credit rating on general obligation bonds. The higher credit rating means the City can borrow money at lower costs and is outside affirmation of the fiscally responsible decision making of the Mayor and City Council. In Fiscal Year 2025 the City of Dubuque used 33.25% of the statutory debt limit. The average use of the statutory debt limit of the other ten cities in Iowa with a population greater than 50,000 is 42.48%. This average of the other cities is 27.8% higher than Dubuque and six of these ten cities use more of the statutory debt limit than Dubuque. A further demonstration of the fiscally responsible decision making of the Mayor and City Council. 2 Page 4 of 99 I concur with the recommendation to establish $10.0637 per thousand dollars as the FY2026 Property Tax Rate and respectfully request Mayor and City Council approval. k�4 6ax".- Moch6el C. Van Milligen MCVM/jml/sv Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Jennifer Larson, Chief Financial Officer Laura Bendorf, Budget Manager 3 Page 5 of 99 THE COF Dubuque DUi! B E,n AII•Marioa Cihl Masterpiece on the Mississippi YP PP 20o2.2o 13 zo1�*7*zoi9 TO: Michael C. Van Milligen, City Manager FROM: Jennifer Larson, Chief Financial Officer SUBJECT: Set Public Hearing for Proposed Fiscal Year 2026 Tax Rate and Dollars and Taxpayer Statements DATE: February 28, 2025 I am recommending approval of the resolution establishing the Fiscal Year 2026 Maximum Property Tax Dollars. At the March 25, 2025, public hearing, the only options available to City Council are to approve the amount of the proposed Fiscal Year 2026 tax rate and dollars as is or decrease it. Iowa House File 718 passed during the 2023 legislative sessions, replaces previous changes made through Iowa Senate File 634 passed during the 2019 legislative sessions, makes changes to Iowa city and county budgets and taxes for Fiscal Year 2025 and later. Additional steps have been added to the budget approval process. The City of Dubuque is specifically impacted by the following steps of this new legislation: 1. Limits the General Fund levy by constraining growth by 2% or 3% each year, depending on the trigger hit: • Non-TIF taxable growth under 3%, no reduction • Non-TIF taxable growth over 3% but less than 6%, 2% reduction factor • Non-TIF taxable growth over 6%, 3% reduction factor The City of Dubuque Non-TIF taxable growth for FY2026 is 4.39%, the General Fund levy is constrained by a growth reduction factor of 2%. The General Fund levy for FY2026 is $7.78547 instead of the maximum levy of $8.10. Page 6 of 99 Although the City is restricted to $7.78547 in the General Fund levy, the City has the flexibility to levy up to $15.6 million or a levy rate of $5.2735 in the Special Revenue Levies for employee benefits. In Fiscal Year 2025, the Special Revenue levy was $0.70307 and totaled $2.0 million. Any reduction in the General Fund levy can be shifted to the Special Revenue levies. 2. March 5: Cities must file a report with Iowa Department of Management containing information specified by new law to be contained in mailings. This date was moved up from March 15 by the State of Iowa during Fiscal Year 2024. 3. March 20: County Auditor must send each property owner or taxpayer with the county by regular mail an individual statement with the specified information broken out by political subdivision comprising the taxpayer's district. Taxpayer Statements must include: • Total Fiscal Year 2025 Tax Rate and Dollars • Combined effective property tax rate for the city calculated using the sum of Fiscal Year 2025's actual property tax certified for levy of all of city's levies • Proposed Fiscal Year 2026 Tax Rate and Dollars • If the Proposed Fiscal Year 2026 Property Tax Dollars exceed the Fiscal Year 2025 actual property tax dollars, a detailed statement of the major reasons for the increase, including the specific purposes or programs for which the city is proposing an increase. • An example comparing the amount of property taxes on a residential property with an actual value of $100,000 in the current fiscal year and $110,000 in the proposed year using the proposed property tax dollars for the budget year, including the percentage difference in such amounts. • An example comparing the amount of property taxes on a commercial property with an actual value of $300,000 in the current fiscal year and $330,000 in the proposed year using the proposed property tax dollars for the budget year, including the percentage difference in such amounts. • The city's percentage of total property taxes certified for levy in the owner's or taxpayer's taxing district in the current fiscal year amount all taxing authorities. • The date, time, and location of the city's public hearing on the information contained in the statements. • Information on how to access the city's internet site, the city's statements, and other budget documents for prior fiscal years. 2 Page 7 of 99 4. Public hearing on proposed property tax amounts for the budget year and new taxpayer statements. • In addition to a public hearing to adopt the budget. • Replaces maximum property tax dollars public hearing held in prior years. • Must be separate from any other meeting of City Council, including any other meeting or hearing related to the budget. • City Council can decrease, but not increase, the proposed property tax amount to be included in the budget. 5. Budget certification deadline to Iowa Department of Management is April 30th instead of March 31st. • If City is issuing new debt that uses the debt service levy, budget must be adopted before April 15th. The proposed Fiscal Year 2026 tax rate and dollars is developed and adopted by City Council during the budgeting process to provide targets or parameters within which the budget recommendation will be formulated within the context of the City Council Goals and Priorities established in August 2024. The recommended budget presented by the City Manager may not meet all these targets due to changing conditions and updated information during budget preparation. To the extent the recommended budget varies from the guidelines, an explanation will be provided in the printed budget document. By State law, the budget that begins July 1, 2025 must be adopted by April 30, 2025 for cities not issuing new debt using the debt service levy or before April 15, 2025 for cities issuing new debt using the debt service levy. The City of Dubuque does not plan to issue new debt that uses the debt service levy in Fiscal Year 2026. The FY2026 budget recommendation funds $840,315 for improvement packages funded by property taxes in the General Fund. This amount is subject to adjustment pending the availability of the final FY 2026 wage tables for employee expense calculation. For FY2026 there are $2,061,763 in general fund improvement package requests. In order to provide context for the basis of the recommended maximum property tax dollars recommended in FY2026, the FY2026 Budget and Fiscal Policy Guidelines and the summary of all decision packages requested are attached. In 2025, the City levied for $28,233,757 in property tax revenue to support the general fund and in FY 2026 the budget guidelines would levy for $29,861,901 in property tax revenue to support the general fund. The FY2026 budget guidelines 3 Page 8 of 99 call for a 1.38% increase in the property tax rate, which increases the property tax rate from $9.9264 in FY25 to $10.0637 in FY 26, which would be a 3.90% or $33.38 tax increase for the average Dubuque homeowner, increase in property tax for commercial (1.90%, $60.91) and a increase for industrial (1.73%, $81.55). Property Tax Rate 1,38% Property Tax Asking 5.77% $1.628.144 Average Residential Payment 3.90° Average Commercial Pavment 1.90% $60.91 Avera e Industrial Property ° Since 1989, the average homeowner has averaged an annual increase in costs in the City portion of their property taxes of +1.45%, or about +$9.28 a year. If the State had been fully funding the Homestead Tax Credit, the increase would have averaged about +$6.62 a year. The City Council is only considering the FY2026 property tax rate. The FY2027 - 2030 tax rates are only projections. The future budget projections will be updated each year so that City Council will have an opportunity in the next year to change FY2027. The City property tax rate projected in these budget guidelines and impact on the average residential property owner ($196,508 assessed value) is as follows: Fiscal Year City Tax -Rate---- % Chancie in Tax Rate FY 2026 $10.0637 3.90% FY 2027 $10.5824 5.15% FY 2028 $11.0305 4.24% FY 2029 $11.1417 1.01 % FY 2030 $11.4323 2.61 % Fiscal FY 2025 "City" Property % Changein $28,233,757 % Impact on Avg. $ Impact on Avg. FY 2026 $29,861,901 +5.77% +3.90% + 33.38 FY 2027 $32,012,535 +7.20% +5.15% + 45.82 FY 2028 $34,032,053 +6.31 % +4.24% + 39.60 FY 2029 $35,061,756 1 +3.03% +1.01 % + 9.83 FY 2030 $36,687,113 1 +4.64% +2.61 % + 25.67 4 Page 9 of 99 The recommended guideline is a 3.90% or $33.38 increase for the average residential property owner assuming the Homestead Property Tax Credit is fully funded. A one percent increase in the tax rate will generate approximately $294,092. The State's residential rollback factor will increase from 46.3428% in 2025 to 47.4316% or a 2.35% increase in FY 2026. The increase in the residential rollback factor increases the value that each residence is taxed on. This increased taxable value for the average homeowner ($91,067 taxable value in FY 2025 and $93,207 taxable value in 2026) results in more taxes to be paid per $1,000 of assessed value. For the proposed Fiscal Year 2026, Dubuque has the LOWEST property tax rate as compared to the eleven largest cities in the state. The highest rate (Waterloo (FY25)) is 119.35% higher than Dubuque's rate, and the average is 54.31 % higher than Dubuque. Dubuque's recommended FY 2026 property tax rate is $10.06 (increase of 1.38% from FY 2025). Fiscal Year 2026 City Property Tax Rate Comparison for Eleven Largest Iowa Cities L Rank 11 City Waterloo FY25 Tax Rate I $22.07 10 Council Bluffs FY25 $17.85 9 Des Moines (FY25)* $17.56 8 Davenport (FY25) $16.61 7 Sioux City FY25 $16.54 6 Cedar Rapids FY25 $16.47 5 Iowa City FY25 $15.63 4 West Des Moines (FY25)* $11.77 3 Ankeny (FY25)* $10.53 2 Ames FY26 $10.25 1 Dubuque (FY26) $10.06 AVERAGE w/o Dubuque $15.53 'Includes Des Moines Area Transit Levy 5 Page 10 of 99 Significant issues impacting the FY 2026 budget include the following: 1. State Funded Backfill on Commercial and Industrial Property Tax a. Iowa Senate File 619 was signed into law by Governor Reynolds on June 16, 2021. The Bill provides that, beginning with the FY 2023 payment, the General Fund standing appropriation for commercial and industrial property tax replacement for cities and counties will be phased out in four or seven years, depending on how the tax base of the city or county grew relative to the rest of the state since FY 2014. Cities and counties where the tax base grew at a faster rate than the statewide average from FY 2014 through FY 2021 will have the backfill phased out over a four-year period from FY 2023 to FY 2026, while those that grew at a rate less than the statewide average will have the backfill phased out over a eight -year period from FY 2023 to FY 2030. The City of Dubuque's tax base grew at a rate less than the statewide average and will have a backfill phase out over a eight year period from FY 2023 to FY 2030. The FY 2026 State backfill for property tax loss is estimated to be $646,603 for all funds (General Fund, Tort Liability Fund, Trust and Agency Fund, Debt Service Fund, and Tax Increment Financing Funds). b. House File 2552, Division 11, passed in the 2022 legislative session and signed by the Governor on May 2, 2022, repeals the Business Property Tax Credit (BPTC). In lieu of the BPTC, beginning with assessment year 2022, all commercial, industrial, and railroad properties will receive a property assessment limitation on the first $150,000 of value of the property unit equal to the assessment limitation for residential property. The value of the property unit that exceeds $150,000 receives the same ninety percent assessment limitation it has in the past. The $125 million fund will continue to be appropriated each year for reimbursements to counties. County auditors will file a claim for the first tier of the assessment limitations in September. Assessors will continue to provide the unit configuration for auditors as these definitions remained the same. Taxpayers are not required to file an application to receive the first $150,000 of assessed value at the residential assessment limitation rate. 6 Page 11 of 99 If the total for all claims is more than the appropriated amounts, the claims will be prorated and the Iowa Department of Revenue will notify the county auditors of prorated percentage by September 30th. Lawmakers believe the new standing general fund will exceed the projected level of claims for fiscal years 2024 through 2029. Then in fiscal year 2030, the local government reimbursement claims will begin being prorated. The projected backfill for Dubuque for the two-tier assessment limitation in Fiscal Year 2026 is estimated to be $387,318. 2. Gaming Revenue. a. Gaming revenues generated from lease payments from the Dubuque Racing Association (DRA) are estimated to decrease $192,217 from $7,405,579 in FY 2025 to $7,213,362 in FY 2026 based on revised projections from the DRA. This follows a $2,283,319 increase from budget in FY 2025 and a $43,621 increase from budget in FY 2024. b. February 2026 DRA distributions ($1,267,993) will be used used to fund FY2026 non -recurring improvement packages and implementation of the classification and compensation study. This is a change from past use of DRA distributions because all funds will be used for Fiscal Year 2026 operations. All of DRA distributions were used in operations in Fiscal Years 2025 and 2024. 3. Interest Revenue a. Interest revenue increased from $1,718,055 in FY 2025 to $2,300,081 in FY 2026. The FY 2026 budget is based on projected general fund cash balance, projected interest rates, and the new banking services agreement tied to a thirteen week T-bill plus five basis points. 7 Page 12 of 99 4. Local Option Sales Tax Revenue a. Sales tax receipts are projected to decrease (0.17)% ($21,580) under FY 2025 budget and 2.00% over FY 2025 actual of $12,652,878 based on FY 2025 revised revenue estimate which includes actuals through December 2024. 5. Hotel/Motel Tax Revenue a. Hotel/motel tax receipts are projected to increase 15.82% ($534,077) over FY 2025 budget and 3.00% over FY 2025 re -estimated receipts of $3,796,563. 6. Riverfront Property Lease Revenue a. Riverfront property lease revenue is projected to increase by $162,758 in FY 2026 to $4,273,045 due to the estimated consumer price index increase and inclusion of property tax reimbursement from leaseholders 7. Franchise Fee Revenue a. Natural Gas franchise fees have been projected to increase 11.7 percent over FY 2024 actual of $923,628. Also, Electric franchise fees are based on FY 2024 Actual of $4,924,839 plus rate increases of 20.0 percent. 8. Ambulance Revenue a. Ambulance Ground Emergency Medical Transport Payments increased from $2,401,917 in FY 2025 to $2,413,018 in FY 2026. GEMT is a federally -funded supplement to state Medicaid payments to EMS providers transporting Medicaid patients which began in FY 2021. FY 2026 is based on calculated projections using historical averages. This revenue is projected using the first quarter of performance in FY 2025 and the previous 11 quarters of performance. Based on that formula, the 3- year quarterly average growth of Medicaid transports is 0.8%. The projected number of transports for FY 2025 is 1,084 and for FY 2026 is 1,092. The FY 2024 actual was 1,075. Based on the unaudited FY 2024 cost report, the FY 2026 revenue per transport is estimated to be $2,209.18. This line item is offset by GEMT Pay to Other Agency expense for local match of $804,331 resulting in net revenue of $1,608,687. 8 Page 13 of 99 b. Ambulance Fees decreased from $2,074,232 in FY 2025 ($361 per call) to $1,756,870 in FY 2026 ($357 per call) based on calculated projections using historical averages. The FY 2024 actual was $1,763,339. In FY 2026, it is currently estimated that there will be 4,924 calls with $357 per call average. The FY 2026 ambulance revenue projection is based on the average transport volume growth of the past 12 quarters (which is 0.2% growth). This includes the first quarter of performance in FY 2025 and the prior 11 quarters. 9. Moody's Investors Service Change in Methodology a. In January 2025, Moody's Investor Services affirmed the Aa2 credit rating on general obligation bonds. Moody's credit analysis states, "the City of Dubuque's local economy benefits from its role as a regional economic center, with solid resident income and full value per capita. Financial operations are strong and will remain so despite declines in fund balance over the next few years, as it expends funds from the pandemic. Long-term liabilities and fixed cost ratios are moderate and will remain so despite future borrowing needs." According to Moody's, the Aa2 issuer rating for the City of Dubuque's bonds reflects the city's healthy economic base, which serves as a regional economic center. Other rationale stated for the rating include full value per capita and adjusted resident income are solid at around $109,000 and 98% respectively, though weaker than Aa peers, in part because of a large student population, available fund balance was strong at around 60% of revenue at the close of fiscal 2023 (year-end June 30), and cash was stronger at 85% of revenue. The City's available fund balance will likely remain well over 45%, despite some planned draws in fiscal 2024 and fiscal 2025 to spend down federal funds from the pandemic. Despite the state adopting new property tax restrictions, revenue raising flexibility remains strong because the City maintains significant margin in its employee benefits fund and is not utilizing its emergency levy. The long-term liabilities ratio will likely remain well under 300% inclusive of the current issuances and future borrowing plans, and fixed -costs ratio will remain well below 20%. 9 Page 14 of 99 b. In July 2023, Moody's Investor Service upgraded the City's outstanding general obligation bonds from Aa3 to Aa2, as well as the outstanding Sales Tax Increment Revenue bonds from A2 to Al. Notable credit factors include strong financial operations and ample revenue -raising flexibility, which has resulted in steadily improved available fund balance and cash. The City serves as a regional economic center and its regional economic growth rate has outpaced the nation over the past five years. c. In November of 2022, Moody's Investors Service ("Moody's") released a new rating methodology for cities and counties. Two significant changes result from the new methodology; cities are now assigned an issuer rating meant to convey the creditworthiness of the issuer as a whole without regard to a specific borrowing, and business -type enterprise funds are now being considered together with general fund revenues and balances in the determination of financial performance. Under the new methodology, there are two metrics that contribute to financial performance. Available Fund Balance Ratio ("AFBR") = (Available Fund Balance + Net Current Assets/Revenue) and Liquidity Ratio ("LR") = (Unrestricted Cash/Revenue). For Aa credits, AFBR ranges from 25-35, and LR ranges from 30-40%. The City was evaluated by Moody's under the old methodology in May of 2022 in connection to its annual issuance of bonds. At that time, Moody's calculated the City's AFBR to be 45.2%, and its LR to be 59.8%. The balances used in these calculations were likely elevated due to unspent ARPA funds. The change in methodology will now consider revenues and net assets from business -type activities in these calculations. As such, the City's general obligation rating will now be directly impacted by the financial performance of enterprise funds. Establishing rates and charges adequate to provide both debt service coverage and significant liquidity will be necessary to maintain the City's ratings. d. In May 2021, Moody's Investor Service upgraded the City's Water Enterprise's outstanding revenue bonds from Al to A2 and affirmed the Aa3 credit rating on general obligation bonds. Notable credit factors include a sizable tax base, a wealth and income profile that is slightly below similarly rated peers, and increased financial position that will 10 Page 15 of 99 decline in fiscal years 2021 and 2022 and somewhat elevated debt and pension liabilities. 10. Fiscal Year 2025 Revised Debt a. FY 2025 Debt Limit: The FY 2023 assessable value of the community for calculating the statutory debt limit is $6,438,522,409, which at 5%, indicates a total General Obligation debt capacity of $330,102,176. Based on Outstanding G.O. debt (including tax increment debt, remaining payments on economic development TIF rebates, and general fund lease agreement) on June 30, 2025 will be $109,764,274 (33.25% of the statutory debt limit) leaving an available debt capacity of $220,337,903 (66.75%). It should be noted that most of the City of Dubuque's outstanding debt is not paid for with property taxes (except TIF), but is abated from other revenues. Exceptions include one issuance for the replacement of a Fire Pumper truck in the amount of $1,410,000 with debt service of $83,700 in FY 2025 and one issuance for the franchise fee litigation settlement in the amount of $2,800,000 with debt service of $145,000 in FY 2025. Included in the debt is $2,664,171 of property tax rebates to businesses creating and retaining jobs and investing in their businesses. implementation in Fiscal Year 2016. 11 Page 16 of 99 FY25 Statutory Debt Limit Used (as of June 30th) 100% 90% ° 87 /° 0 8 4 % 79% 11 810 7 % 74%70% 75% ° 66%66%62% 60 /° 53% II N 50% 25% 13% Cn 0 'd co 36%29%33%33%30%30%32% ° 28 /° 25%23° II /°21% ° 19 /° N N N N N N N W W W W W W -Pb Un O v O to CD—L W W A FY16 Adopted FY25 Revised The City also has debt that is not subject to the statutory debt limit. This debt includes revenue bonds. Outstanding revenue bonds payable by water, sewer and stormwater fees on June 30, 2025 will have a balance of $121,314,363. The total City indebtedness as of June 30, 2025, is projected to be $245,704,207. The total City indebtedness as of June 30, 2024, was $222,540,780. In FY 2025, the City will have a projected $23,163,427 or 10.41% more in debt. The City is using debt to accomplish necessary projects and to take advantage of the attractive interest rates in the current market. The following chart shows Dubuque's relative position pertaining to use of the statutory debt limit for Fiscal Year 2025 compared to the other cities in Iowa for Fiscal Year 2024 with a population over 50,000: 12 Page 17 of 99 Fiscal Year 2024 Legal Debt Limit Comparison for Eleven Largest Iowa Cities Rank City Legal Debt Limit (5%) Statutory Debt Outstanding Percentage of Legal Debt Limit Utilized 11 Des Moines FY24 $ 803.5 4 54 $ 549.760.000 68.42 ° 10 Waterloo FY24 221,546,701 138,428,824 62.48 ° 9 1 Cedar Rapids FY 24 681,383,619 1$ 396,830,000 1 58.24 ° 8 1W. Des Moines (FY24) $ 551.635.692 1 $ 307.090.000 55.67 % 7 1 Davenport FY24 $ 423,816,425 $ 200,540,000 47.32 % 6 Sioux City FY24 $ 309,734,920 $ 144,929,999 46.79 % 5 Dubu ue FY25) $ 330,102,176 $ 109,764,274 3.25 ° 4 Ames (FY24) $ 277.278.426 $ 67.035.000 24.18 % 3 lAnkeny (FY24)416,454,919 100.260.000 24.07 ° 2 Council Bluffs FY24 365,780,288 75,240,467 20.57° 1 Iowa City (FY24) $ 368.416.450 $ 62.905.000 17.07 % Average w/o Dubuque $ 441,961,179 $ 204,301,929 42.48 Percent of Legal Debt Limit Utilized 80% 62.48% 60% = 55.67% 58.24 40% 20% 0% 116MEya ova o�ti� G\O\J5 e�� P�eS J� JQve J� JQve o J�G�� Qo� �o\�e5 \a5 a�e�\oo GO O ��0O g� Oa Oe5 Geaac Oe5 seta P Dubuque ranks as the fifth lowest of the use of statutory debt limit of the 11 cities in Iowa with a population over 50,000. The average of the other cities (42.48%) is 27.8% higher than Dubuque (33.25%). 13 Page 18 of 99 FY25 Total Debt (In Millions) $324 $302.3 UHHLLL $297 E, $290.1 — $295.5' a, $282.0 $279.9 $285.7 $270 $265. �I $267.4 EE- $264.2 $274.7 2 5.9 $262.1 $264.0 1 $250.6 $244.3 $245 $243 IL"L $252.1 $249.4 31 1$241.4 1�■ 26.2 $216 $2� 1$271.3 $232. $211.6 $189 --Ir T� FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY16 Adopted — FY25 Revised By the end of the Fiscal Year 2025 5-Year Capital Improvement Program (CIP) budget the total amount of debt for the City of Dubuque would be $274.1 million (32% of the statutory debt limit) and the projection is to be at 211.6 million (19% of statutory debt limit) within 10 years. 11. 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 "AX rated cities. May 2021, Moody's Investor Services upgraded the City's Water Enterprise's outstanding revenue bonds from Al to A2 and affirmed the Aa3 credit rating on general obligation bonds. Notable credit factors include a sizable tax base, a wealth and income profile that is slightly below similarly rated peers, and increased financial position that will decline in fiscal years 2021 and 2022 and somewhat elevated debt and pension liabilities. These credit ratings are affirmation of the sound fiscal management of the mayor and city council, put Dubuque in a strong position to capitalize on favorable 14 Page 19 of 99 financial markets, borrow at low interest rate when necessary, and make critical investments in the community. Fiscal Year Reserve New (As •- changeFund Reason for from previous Fiscal Year ••• General Fund Calculation Increase due to freezing vacant positions and most capital FY 2020 31.24% romects due to the pandemic. Increase due to American Rescue Plan Act funds received ($13.2 million), frozen positions and capital projects through FY 2021 40.72% Increase due to American Rescue Plan Act funds received ($13.2 million), capital projects not expended before the end FY 2022 49.16% 45.09% Increase due to American Rescue Plan Act funds not spent ($26.4 million), capital projects not expended before the end FY 2023 55.82% 62.99 % of the FY and variant nnGitinnG Decrease due to spend down of American Rescue Plan Act FY 2024 48.54% 58.67 % funds. 50 40 0 c 2 30 a) n Fund Reserve as a Percent of General Fund Revenue 55.82% 49.16% 48. o 40.72% 41.13% 33. 33.720/33.720/33.72%1 FY FY FY FY FY FY FY FY FY FY FY FY 19 20 21 22 23 24 25 26 27 28 29 30 Fiscal Year 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 15 Page 20 of 99 Net General Fund Operating Cost is reached. During Fiscal Year 2024, the General Fund minimum balance was increased to 25 percent. After all planned expenditures in FY 2025, the City of Dubuque will have a general fund reserve of 41.13% of general fund revenues as a percent of general fund revenues computed by the accrual basis or 58.07% of general fund, debt service, and enterprise fund revenues as computed by the accrual basis methodology now used by Moody's Investors Service. The general fund reserve cash balance is projected to be $21,590,837 on June 30, 2025 as compared to the general fund reserve balance on an accrual basis of $48,403,917. The general fund reserve balance on an accrual basis exceeds 27% in FY 2025, which is the margin of error used to ensure the City always has a general fund reserve of at least 25% as computed by Moody's Investors Service. In Fiscal Year 2017, the City had projected reaching this consistent and sustainable 20% reserve level in Fiscal Year 2022. In fact, the City met the 20% reserve requirement in FY 2017, five years ahead of schedule and has sustained a greater than 20% reserve. General Fund Reserve Projections: FFiscal Year FY2019 --94 .� . $1,050,000 SpendableMoody's Fund Cash $20,945,090 Projected 29.06 MethodologyGeneral FY2020 $ $21 744 160 31.24 % FY2021 $500,000 $31,089,468 40.72 % FY2022 $ $41 259 518 49.16 % 45.09 % FY2023 $2 717 339 $48 403 917 55.82 % 62.99 % FY2024 $4,419,668 $37,988,917 48.54 % 62.21 % FY2025 $ $32 188 917 41.13 % 58.07 % FY2026 $26 388 917 33.72 % 53.94 % FY2027 $ $26,388,917 33.72 % 49.80 % FY2028 $ $26 388 917 33.72 % 45.67 % FY2029 26 388 917 33.72 % 41.53 % FY2030 $ $26 388 917 33.72 % 39.75 % 12. The Municipal Fire and Police Retirement System of Iowa Board of Trustees City contribution for Police and Fire retirement increased from 22.66% percent in FY 2025 to 22.68% percent in FY 2026 (general fund cost of $2,177 for Police and $1,881 for Fire or a total of $4,058). 13. The already approved collective bargaining agreements for Dubuque Professional Fire Fighters Association and International Union of Operating 16 Page 21 of 99 Engineers include a 3.50% wage increase. The already approved collective bargaining agreement for the Dubuque Police Protective Association includes a 5% wage increase. The Teamsters Local Union No. 120 Bus Operators and Teamsters Local Union No. 120 are in contract negotiations. Non -represented employees include a 3.00% wage increase. Fiscal Year 2026 includes the cost of the implementation of the classification and compensation study. A classification and compensation study analyzes the job positions (not individuals) in an organization. The purpose of a classification and compensation study is to ensure jobs with comparable minimum qualifications, job responsibilities, supervisory expectations, working conditions and environments are grouped closely in a compensation plan. Salary ranges are competitive within the identified market, and to equip the human resources team to consistently administer classification and compensation programs on an ongoing basis. The City's strategy through this study has been to recommend a new compensation strategy in which the City is competitive at the 50% percentile of employers. Total cost of the wage increases for collective bargaining and non -represented employees, and classification and compensation study is $2,026,133 to the General Fund. 14. Health Insurance The City portion of health insurance expense is projected to remain unchanged from $1,119 per month per contract to $1,119 per month per contract (based on 648 contracts) in FY 2026 (no general fund impact). 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. In FY 2017, The City went out for bid for third party administrator and the estimated savings has resulted from the new contract and actual claims paid with there being actual reductions in cost in FY 2018 (19.42%) and FY 2019 (0.35%). In addition, firefighters began paying an increased employee health care premium sharing from 10% to 15% and there was a 7% increase in the premium on July 1, 2018. During FY 2019, the City went out for bid for third party administrator for the prescription drug plan and Fiscal Year 2022 included additional prescription drug plan savings. There was a decrease of $639,758 in prescription drug cost in FY 2022. Based on FY 2024 actual experience, Fiscal Year 2026 is projected to have a 4.61 % increase in health insurance costs. Estimates for FY 2027 were increased 4.62%; FY 2028 were increased 4.63%; FY 2029 were increased 4.64%; and FY 2030 were increased 4.65%. 15. The decrease in property tax support for Transit from FY 2025 to FY 2026 is $13,920, which reflects an increase in Federal Transportation Administration Operating revenue ($40,167); an increase in Federal Transportation Administration Capital ($9,474), an increase in employee expense ($111,326); decrease in supplies and services ($41,013); a reduction in equipment replacements ($18,576), an increase in passenger fare revenue ($20,693). 17 Page 22 of 99 Timeline of Public Input Opportunities The Budget Office conducted community outreach with Balancing Act using print and digital marketing and presentations. • July: City staff presented on the budget process to all Neighborhood Associations at the Multicultural Family Center and attendees had the opportunity to prioritize real City projects. November: The City Manager hosted an evening hybrid public budget input meeting. Participants could attend in person at the City Council Chambers or by phone or computer using GoToMeeting. Open Budget https://dollarsandcents.cityofdubugue.org/ During Fiscal Year 2016, the City launched a web based open data platform. 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. Open Expenses URL: http://expenses.cityofdubugue.org/ During Fiscal Year 2017, an additional module was added to the open data platform which included an interactive checkbook which will allow residents to view the City's payments to vendors. The final step will be adding performance measures to the open data platform to allow residents to view outcomes of the services provided by the City. Balancing Act During Fiscal Year 2019, the City of Dubuque launched a new interactive budget simulation tool called Balancing Act. The online simulation invites community members to learn about the City's budget process and submit their own version of a balanced budget under the same constraints faced by City Council, respond to high -priority budget input questions, and leave comments. Taxpayer Receipt During Fiscal Year 2019, the City launched an online application which allows users to generate an estimate of how their tax dollars are spent. The tool uses data inputted by the user such as income, age, taxable value of home, and percentage of goods 18 Page 23 of 99 purchased within City limits. The resulting customized receipt demonstrates an estimate of how much in City taxes the user contributes to Police, Fire, Library, Parks, and other city services. This tool is in support of the City Council goal of a financially responsible and high-performance organization and addresses a Council -identified outcome of providing opportunities for residents to engage in City governance and enhance transparency of City decision -making. There will be seven City Council special meetings prior to the adoption of the FY 2026 budget before the state mandated deadline of April 30, 2025. The recommended resolution for maximum property tax dollars in FY 2026 is $29,861,901 (tax rate of $10.0637) or a 5.77%% increase over FY2025 property tax dollars. At the March 25, 2025 public hearing, the only options available to City Council are to approve the amount of proposed property tax rate and dollars as is or decrease it. The requested action step is for City Council to adopt the attached resolution setting the public hearing date for the Proposed Fiscal Year 2026 Tax Rate and Dollars and Taxpayer Statements as required by Section 384.15A of the Code of Iowa. The attached resolution authorizes the City Clerk to publish notification for a public hearing to be held on March 25, 2025. JML Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Laura Bendorf, Budget Manager 19 Page 24 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 1 CI-Y OF DUBUQUE BUDGET & FISCAL POLICY GUIDELINES FISCAL YEAR 2026 Page 25 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 2 Operating Budget Guidelines The Policy Guidelines are developed and adopted by City Council during the budgeting process to provide targets or parameters within which the budget recommendation will be formulated, in the context of the City Council Goals and Priorities established in August 2024. The final budget presented by the City Manager may not meet all these targets due to changing conditions and updated information during budget preparation. To the extent the recommended budget varies from the guidelines, an explanation will be provided in the printed budget document. By State law, the budget that begins July 1, 2025 must be adopted by April 30, 2025. A. RESIDENT PARTICIPATION GUIDELINE To encourage resident participation in the budget process, City Council will hold multiple special meetings in addition to the budget public hearing for the purpose of reviewing the budget recommendations for each City department and requesting public input following each departmental review. The budget will be prepared in such a way as to maximize its understanding by residents. Copies of the recommended budget documents will be accessed via the following: a. The City Clerk's office, located in City Hall (printed) b. The government documents section at the Carnegie Stout Public Library (printed) c. On the City's website at www.cityofdubuque.org/budget (digital) Opportunities are provided for resident input prior to formulation of the City Manager's recommended budget and will be provided again prior to final Council adoption, both at City Council budget special meetings and at the required budget public hearing. Timeline of Public Input Opportunities The Budget Office conducted community outreach with Balancing Act using print and digital marketing and presentations. • July: City staff presented on the budget process to all Neighborhood Associations at the Multicultural Family Center and attendees had the opportunity to prioritize real City projects. Page 26 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 1 November: The City Manager hosted an evening hybrid public budget input meeting. Participants could attend in person at the City Council Chambers or by phone or computer using GoToMeeting. Open Budget dollarsandcents.cityofdubuque.org During Fiscal Year 2016, the City launched a web based open data platform. 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 residents to view the City's payments to vendors. The final step will be adding performance measures to the open data platform to allow residents to view outcomes of the services provided by the City. Balancing Act During Fiscal Year 2019, the City of Dubuque launched a new interactive budget simulation tool called Balancing Act. The online simulation invites community members to learn about the City's budget process and submit their own version of a balanced budget under the same constraints faced by City Council, respond to high -priority budget input questions, and leave comments. Taxpayer Receipt During Fiscal Year 2019, the City launched an online application which allows users to generate an estimate of how their tax dollars are spent. The tool uses data inputted by the user such as income, age, taxable value of home, and percentage of goods purchased within City limits. The resulting customized receipt demonstrates an estimate of how much in City taxes the user contributes to Police, Fire, Library, Parks, and other city services. This tool is in support of the City Council goal of a financially responsible and high-performance organization and addresses a Council -identified outcome of providing opportunities for residents to engage in City governance and enhance transparency of City decision -making. B. SERVICE OBJECTIVES AND SERVICE LEVELS GUIDELIN The budget will identify specific objectives to be accomplished during the budget year, July 1 through June 30, for each activity of the City government. The objectives serve as a commitment to the citizens from the City Council and City organization and identify the level of service which the citizen can anticipate. Page 27 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 2 C. TWO TYPES OF BUDGET DOCUMENTS TO BE PREPARED UUIULLIN Two types of budget documents will be prepared for public dissemination. The recommended City operating budget for Fiscal Year 2026 will consist of a Recommended City Council Policy Budget that is a collection of information that has been prepared for department hearings and a Residents Guide to the Recommended FY 2026 Budget. These documents will be available in mid -March. 1. Recommended City Council Policy Budget The purpose of this documents is to focus attention on policy decisions involving what services the City government will provide, who will pay for them, and the implications of such decisions. The document will emphasize objectives, accomplishments and associated costs for the budget being recommended by the City Manager. The Recommended City Council Policy Budget will include the following information for each department: • Highlights of prior year's accomplishments and Future Year's Initiatives • A financial summary • A summary of improvement packages requested and recommended • significant line items • Capital improvement projects in the current year and those recommended over the next five years • Organizational chart for larger departments and major goals, objectives and performance measures for each cost center within that department • Line item expense and revenue financial summaries. 2. The Residents Guide This section of the Recommended FY 2026 Budget will be a supplementary composite of tables, financial summaries and explanations. It will include the operating and capital budget transmittal messages and the adopted City Council Budget Policy Guidelines. Through graphs, charts and tables it presents financial summaries which provide an overview of the total operating and capital budgets. Page 28 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 3 D. ADOPT A BALANCED BUDGET GUIDELINE The City will adopt a balanced budget in which expenditures will not be allowed to exceed reasonable estimated resources. The City will pay for all current expenditures with current revenues E. BALANCE BETWEEN SERVICES AND TAX BURDEN GUIDELINE The budget should reflect a balance between services provided and the burden of paying taxes and/or fees for those services. It is not possible or desirable for the City to provide all the services requested by individual residents. The City must consider the ability of residents to pay for services in setting service levels and priorities. F. MAINTENANCE EXISTING LEVEL OF SERVICE GUIDELINE To the extent possible with the financial resources available, the City should attempt to maintain the existing level of services. As often as reasonably possible, each service should be tested against the following questions: a. Is this service truly necessary? b. Should the City provide it? c. What level of service should be provided? d. Is there a better, less costly way to provide it? e. What is its priority compared to other services? f. What is the level of demand for the service? g. Should this service be supported by property tax, user fees, or a combination? G. IMPROVE PRODUCTIVITY " "nFLINE Continue efforts to stretch the value of each tax dollar and maximize the level of City services purchased with tax dollars through continual improvements in efficiency and effectiveness. Developing innovative and imaginative approaches for old tasks, reducing duplication of service effort, creative application of new technologies, and more effective organizational arrangements are approaches to this challenge. H. USE OF VOLUNTEERS DISCUSSION To respect residents who must pay taxes, the City must seek to expand resources and supplement service -delivery capacity by continuing to increase direct resident involvement with service delivery. Residents are encouraged to assume tasks previously performed or provided by City government. This may require the City to Page 29 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 4 change and expand the approach to service delivery by providing organizational skills and training and coordinating staff, office space, meeting space, equipment, supplies and materials rather than directly providing more expensive full-time City staff. Activities in which residents can continue to take an active role include: Library, Recreation, Parks, Five Flags Center, and Police. GUIDELINE Future maintenance of City service levels may depend partially or largely on volunteer resident staffs. Efforts shall continue to identify and implement areas of City government where (a) volunteers can be utilized to supplement City employees to maintain service levels (i.e., Library, Recreation, Parks, Police) or (b) service delivery can be adopted by to non -government groups and sponsors -- usually with some corresponding financial support. RESTRICTIONS ON INITIATING NEW SERVICE GUIDELINE New service shall only be considered: (a) when additional revenue or offsetting reduction in expenditures is proposed; or (b) when mandated by state or federal law. J. SALARY INCREASES OVER THE AMOUNT BUDGETED SHALL BE FINANCED FROM BUDGET REDUCTIONS IN THE DEPARTMENT(S) OF THE BENEFITING EMPLOYEES DISCUSSION The recommended budget includes salary amounts for all City employees. However, experience shows that budgeted amounts are often exceeded by fact finder and/or arbitrator awards. Such "neutrals" do not consider the overall financial capabilities and needs of the community and the fact that the budget is carefully balanced and fragile. Such awards have caused overdrawn budgets, deferral of necessary budgeted expenditures, expenditure of working balances and reserves, and have generally reduced the financial condition or health of the City government. To protect the financial integrity of the City government, it is recommended the cost of any salary adjustment over the amount financed in the budget is paid for by reductions in the budget of the department(s) of the benefiting employees. The City has five collective bargaining agreements. The current contracts expire as follows: Barqaininq Teamsters Local Union No. 120 June 30 2025 Teamsters Local Union No. 120 Bus Operators June 30 2025 Dubuque Professional Firefighters Association June 30 2027 Dubuque Police Protective Association June 30 2029 International Union of Operating Engineers June 30 2029 Page 30 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 5 GUIDELINE Salary increases over the amount budgeted for salaries shall be financed from operating budget reductions in the department(s) of the benefiting employees. K. THE AFFORDABLE CARE ACT GUIDELINE The Affordable Care Act is a health care law that aims to improve the current health care system by increasing access to health coverage for Americans and introducing new protections for people who have health insurance. The Affordable Care Act (ACA) was signed into law on March 23, 2010. Under the ACA, employers with more than 50 full- time equivalent employees must provide affordable "minimum essential coverage" to full-time equivalent employees. The definition of a full-time equivalent employee under the Affordable Care Act is any employee that works 30 hours per week or more on average over a twelve-month period (1,660 hours or more). There is a twelve-month monitoring period for part-time employees. If a part-time employee meets or exceeds 30 hours per week on average during that twelve-month period, the City must provide health insurance. On July 2, 2013, the Treasury Department announced that it postponed the employer shared responsibility mandate for one year. Based on the initial requirements of the Affordable Health Care Act, the Fiscal Year 2014 budget provided for insurance coverage effective February 1, 2014 for several part-time employees. In addition, the Fiscal Year 2014 budget provided for making several part- time positions full-time on June 1, 2014. Due to the delay of the employer shared responsibility mandate for the Affordable Health Care Act, the City delayed providing insurance coverage for eligible part-time employees and delayed making eligible part- time positions full-time until January 1, 2015.The Standard Measurement Period was delayed from January 1, 2013 through December 31, 2013 to December 1, 2013 through November 30, 2014 with the first provision of health insurance date being January 1, 2015. The impact of the Affordable Care Act on the City of Dubuque included changing nine part-time positions to full-time (Bus Operators (4), Police Clerk Typist (1), Building Services Custodians (3), and Finance Cashier (1) in Fiscal Year 2016. In addition, nine part-time positions were offered health insurance benefits due to working more than1,560 hours (Bus Operators (4), Golf Professional, Assistant Golf Professional, Golf Maintenance Worker, Parks Maintenance Worker, and Water Meter Service Worker). The number of these part-time positions with health insurance benefits has been reduced as employees in these positions accept other positions or leave employment with the City of Dubuque. As of February 24, 2025, there is one part-time position with health insurance benefits that remains which includes the Golf Professional. Page 31 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 6 L. BALANCE BETWEEN CAPITAL AND OPERATING EXPENSES GUIDELINE The provision of City services in the most economical and effective manner requires a balance between capital (with emphasis upon replacement of equipment and capital projects involving maintenance and reconstruction) and operating expenditures. This balance should be reflected in the budget each year. M. USER CHARGES DISCUSbiuiv User charges or fees represent a significant portion of the income generated to support the operating budget. It is the policy that user charges or fees be established when possible so those who benefit from a service or activity also help pay for it. Municipal utility funds have been established for certain activities, which are intended to be self- supporting Enterprise Funds. Examples of utility funds operating as Enterprise Funds include Water User Fund, Sewer User Fund, Stormwater User Fund, Refuse Collection Fund, and Parking Fund. In other cases, a user charge is established after the City Council determines the extent to which an activity must be self-supporting. Examples of this arrangement are fees for swimming, golf, recreation programs, and certain inspection programs such as rental inspections and building permits. The Stormwater User Fund is fully funded by stormwater use fees. The General Fund will continue to provide funding for the stormwater fee subsidies which provide a 50% subsidy for the stormwater fee charged to property tax exempt properties and low -to - moderate income residents and a 75% subsidy for residential farms. The General Fund will also continue to provide funding for the refuse, water, and sanitary sewer fee subsidies which provide a 50% subsidy for the fees charged to low -to -moderate income residents. UUIUL iNE User fees and charges should be established where possible so that those who utilize or directly benefit from a service, activity or facility also help pay for it. User fees and charges for each utility enterprise fund (Water User Fund, Sewer User Fund, Stormwater User Fund, Refuse Collection Fund, and Parking Fund) shall be set at a level that fully supports the total direct and indirect cost of the activity, including the cost of annual depreciation of capital assets, the administrative overhead to support the system and financing for future capital improvement projects. Page 32 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 7 Activity FY 2023 Actual Self-SupportingPercent FY 2024 Actual FY 2025 Adopted FY 2026 Rec'd Adult Athletics 70.7% 77.2% 61.1 % 61.8% McAleece Concessions 118.7% 114.5% 119.3% 116.8% Youth Sports 13.3% 17.4% 15.4% 12.2% Therapeutic & After School 80.2% 56.2% 18.2% 20.6% Recreation Classes 65.2% 100.2% 50.8% 69.3% Swimming 43.6% 41.6% 44.6% 39.8% Golf 108.2% 107.9% 98.4% 99.2% Port of Dubuque Marina 86.4% 75.5% 79.6% 81.7% Park Division 16.8% 17.5% 14.8% 15.7% Library 1.2% 1.2% 1.0% 1.1 % Airport 100.0% 106.7% 95.5% 99.9% Building Inspections 124.4% 106.7% 96.9% 174.8% Planning Services 50.5% 62.7% 45.2% 71.5% Health Food/Environmental Inspections 63.3% 37.5% 37.0% 38.7% Animal Control 68.3% 58.5% 53.9% 52.5% Housing - General Inspection 69.5% 95.6% 108.9% 124.2% Federal Building Maintenance 69.8% 62.2% 1 67.8% 1 86.7% N. ADMINISTRATIVE OVERHEAD RECHARGES DISCUSSION While the Enterprise Funds have contributed to administrative overhead, the majority has been provided by the General Fund. This is not reasonable and unduly impacts property taxes, which causes a subsidy to the Enterprise Funds. Prior to FY 2013, the administrative overhead was charged by computing the operating expense budget for each enterprise fund and dividing the result by the total City-wide operating expense budget which resulted in the following percentages of administrative overhead charged to each enterprise fund: Water 5.32%; Sanitary Sewer 4.84%; Stormwater 0.55%; Solid Waste 2.83%; Parking 1.71 %; and Landfill 2.71 %. The adopted Fiscal Year 2013 budget changed the administrative overhead to be more evenly split between the general fund and enterprise funds and is phased in over many years. The Fiscal Year 2018 administrative overhead formula was recommended modified. The modification removed Neighborhood Development, Economic Development and Workforce Development from all recharges to utility funds. In addition, the Landfill calculation is modified to remove Geographic Information Systems and Planning Services. In Fiscal Year 2026, the general fund is recommended to support $2,608,853 in administrative overhead using the recharge method adopted in Fiscal Year 2013 and revised in Fiscal Year 2018. Page 33 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 8 GUIDELINE Beginning in FY 2013, additional overhead recharges to the utility funds is being phased in over several years. Engineering administrative and project management expenses that are not recharged to capital projects will be split evenly between the Water, Sewer, Stormwater and General Funds. Finance accounting expenses and all other administrative departments such as Planning, City Clerk, Legal Services and City Manager's Office will be split evenly between Water, Sewer, Stormwater, Refuse Collection and General Funds, with overhead costs being shared by the Landfill and Parking. This will be fully implemented over time. Beginning in Fiscal Year 2018, Neighborhood Development, Economic Development and Workforce Development expenses will not be recharged to utility funds. In addition, the Landfill will not be recharged GIS and Planning expenses. When the overhead recharges are fully implemented, the split of the cost of administrative overhead excluding Engineering will be as follows: Administrative Overhead Split (Not including Engineering) Engineering Administration & Project Management ■ water ■ Gen efaI ■ Sewer Fund ■ Stormwater • Water ■ Refuse Sewer ■ Parking ■ Landfill ■ Stormwater ■ Gen oral Fund III Page 34 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 9 The implementation percent of the administrative overhead recharges in Fiscal Year 2025 as compared to Fiscal Year 2025 is as follows: Percent Implemented Administrative Overhead 100% 100% 97% 100% 6% 9% 75% 50% 39% 25% FY26 Sanitary Sewer Stormwater Refuse 0 Parking O. OUTSIDE FUNDING 100% 100% 93% j6%. 30°/a 6% FY25 Water Landfill DISCUSSION The purpose of this guideline is to establish the policy that the City should aggressively pursue outside funding to assist in financing its operating and capital budgets. However, the long-term commitments required for such funding must be carefully evaluated before any agreements are made. Commitments to assume an ongoing increased level of service or level of funding once the outside funding ends must be minimized. GUIDELINE To minimize the property tax burden, the City of Dubuque will make every effort to obtain federal, state and private funding to assist in financing its operating and capital budgets. However, commitments to guarantee a level of service or level of funding after the outside funding ends shall be minimized. Also, any matching funds required for capital grants will be identified. P. GENERAL FUND OPERATING RESERVE (WORKING BALANCE) DISCUSSION An operating reserve or working balance is an amount of cash, which must be carried into a fiscal year to pay operating costs until tax money, or other anticipated revenue comes in. Without a working balance, there would not be sufficient cash in the fund to meet its obligations and money would have to be borrowed. Working balances are not Page 35 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 10 available for funding a budget; they are required for cash flow (i.e., to be able to pay bills before taxes are collected). Moody's Investor Service recommends a factor of 35 percent for "AX rated cities. In January 2025, Moody's Investor Services affirmed the Aa2 credit rating on general obligation bonds. Moody's credit analysis states, "the City of Dubuque's local economy benefits from its role as a regional economic center, with solid resident income and full value per capita. Financial operations are strong and will remain so despite declines in fund balance over the next few years, as it expends funds from the pandemic. Long-term liabilities and fixed cost ratios are moderate and will remain so despite future borrowing needs." According to Moody's, the Aa2 issuer rating for the City of Dubuque's bonds reflects the city's healthy economic base, which serves as a regional economic center. Other rationale stated for the rating include full value per capita and adjusted resident income are solid at around $109,000 and 98% respectively, though weaker than Aa peers, in part because of a large student population, available fund balance was strong at around 60% of revenue at the close of fiscal 2023 (year-end June 30), and cash was stronger at 85% of revenue. The City's available fund balance will likely remain well over 45%, despite some planned draws in fiscal 2024 and fiscal 2025 to spend down federal funds from the pandemic. Despite the state adopting new property tax restrictions, revenue raising flexibility remains strong because the City maintains significant margin in its employee benefits fund and is not utilizing its emergency levy. The long-term liabilities ratio will likely remain well under 300% inclusive of the current issuances and future borrowing plans, and fixed - costs ratio will remain well below 20%. In July 2023, Moody's Investor Service upgraded the City's outstanding general obligation bonds from Aa3 to Aa2, as well as the outstanding Sales Tax Increment Revenue bonds from A2 to Al. Notable credit factors include strong financial operations and ample revenue -raising flexibility, which has resulted in steadily improved available fund balance and cash. The City serves as a regional economic center and its regional economic growth rate has outpaced the nation over the past five years. In November of 2022, Moody's Investors Service ("Moodys") released a new rating methodology for cities and counties. Two significant changes result from the new methodology; cities are now assigned an issuer rating meant to convey the creditworthiness of the issuer as a whole without regard to a specific borrowing, and business -type enterprise funds are now being considered together with general fund revenues and balances in the determination of financial performance. Under the new methodology, there are two metrics that contribute to financial performance. Available Fund Balance Ratio ("AFBR") _ (Available Fund Balance + Net Current Assets/Revenue) and Liquidity Ratio ("LR") _ (Unrestricted Cash/Revenue). For Aa credits, AFBR ranges from 25-35, and LR ranges from 30-40%. The City was evaluated by Moody's under the old methodology in May of 2022 in connection to its annual issuance of bonds. At that time, Moody's calculated the City's Page 36 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 11 AFBR to be 45.2%, and its LR to be 59.8%. The balances used in these calculations were likely elevated due to unspent ARPA funds. The change in methodology will now consider revenues and net assets from business -type activities in these calculations. As such, the City's general obligation rating will now be directly impacted by the financial performance of enterprise funds. Establishing rates and charges adequate to provide both debt service coverage and significant liquidity will be necessary to maintain the City's ratings. In May 2021, Moody's Investor Service upgraded the City's Water Enterprise's outstanding revenue bonds from Al to A2 and affirmed the Aa3 credit rating on general obligation bonds. Notable credit factors include a sizable tax base, a wealth and income profile that is slightly below similarly rated peers, and increased financial position that will decline in fiscal years 2021 and 2022 and somewhat elevated debt and pension liabilities. These credit ratings are affirmation of the sound fiscal management of the mayor and city council, put Dubuque in a strong position to capitalize on favorable financial markets, borrow at low interest rate when necessary, and make critical investments in the community. Fiscal Year Fund Reserve (As % of General ... FY 2016 Fund revenues) 17.52% Calculation Increase due to capital projects not expended before the end of the FY and additional contributions to general FY 2017 20.09% fund reserve Increase due to capital projects not expended before the end of the FY and additional contributions to general FY 2018 23.81 % fund reserve Increase due to capital projects not expended before the FY 2019 29.06% end of the FY. Increase due to freezing vacant positions and most FY 2020 31.42% capital projects due to the pandemic. Increase due to American Rescue Plan Act funds received ($13.2 million), frozen positions and capital FY 2021 40.72% projects through Feb 2021. Increase due to American Rescue Plan Act funds not FY 2022 spent ($13.2 million), capital rojects not expended 49.16% 45.09 % before the end of the FY, an vacant vacant positions. Increase due to American Rescue Plan Act funds not spent ($26.4 million), capital projects not expended FY 2023 55.82% 62.99 % before the end of the FY, and vacant positions. Decrease due to spend down of American Rescue Plan FY 2024 48.54% 58.67 % Act funds. The City of Dubuque has historically adopted a general fund reserve policy as part of the Fiscal and Budget Policy Guidelines which are adopted each year as part of the budget process. During Fiscal Year 2013, the City adopted a formal Fund Reserve Policy. Per the policy for the General Fund, the City will maintain a minimum fund Page 37 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 12 balance of at least 20 percent of the sum of (a) annual operating expenditures not including interfund transfers in the General Fund less (b) the amounts levied in the Trust and Agency fund and the Tort Liability Fund ("Net General Fund Operating Cost"). The City may increase the minimum fund balance by a portion of any operating surplus above the carryover balance of $200,000 that remains in the General Fund at the close of each fiscal year. The City continued to add to the General Fund minimum balance when additional funds were available until 20 percent of Net General Fund Operating Cost was reached in Fiscal Year 2017. During Fiscal Year 2024, the General Fund minimum balance was increased to 25 percent. After all planned expenditures in FY 2025, the City of Dubuque will have a general fund reserve of 41.13% of general fund revenues as a percent of general fund revenues computed by the accrual basis or 58.07% of general fund, debt service, and enterprise fund revenues as computed by the accrual basis methodology now used by Moody's Investors Service. The general fund reserve cash balance is projected to be $21,590,837 on June 30, 2025 as compared to the general fund reserve balance on an accrual basis of $42,603,917. The general fund reserve balance on an accrual basis exceeds 27% in FY 2025, which is the margin of error used to ensure the City always has a general fund reserve of at least 25% as computed by Moody's Investors Service. GUIDELINE The guideline of the City of Dubuque is to maintain a General Fund working balance or operating reserve of 25% (27% to maintain a margin of error of 2%) in FY 2026 and beyond. In Fiscal Year 2017, the City had projected reaching this consistent and sustainable 20% reserve level in Fiscal Year 2023. In fact, the City met the 20% reserve requirement in FY 2017, five years ahead of schedule and has sustained a greater than 20% reserve. General Fund Reserve Projections: IF Fiscal Year FY2019 IV Contribution $1,050,000 City's Spendable General Fund Cash Reserve $20,945,090 % of Projected Revenue 29.06 's New ..... FY2020 $ $21,744,160 31.24 % FY2021 $500,000 $31,089,468 40.72 % FY2022 $ $41,259,518 49.16 % 45.09 % FY2023 $2,717,339 $48,403,917 55.82 % 62.99 % FY2024 $4,419,668 $37,988,917 48.54 % 62.21 % FY2025 $ $32,188,917 41.13 % 58.07 % FY2026 $ $26,388,917 33.72 % 53.94 % FY2027 $ $26,388,917 33.72 % 49.80 % FY2028 $ $26,388,917 33.72 % 45.67 % FY2029 $ $26,388,917 33.72 % 41.53 % FY2030 $ $26,388,917 33.72 % 39.75 % Page 38 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 13 * Capital projects and large equipment purchases that are not completed in the year budgeted will temporarily increase the amount of fund balance remaining at the end of the fiscal year. After resources are allocated to the next fiscal year to complete unfinished capital projects and equipment purchases, any amount of general fund reserve balance over 27% creates resources for additional capital projects or other mid -year expenses. Q. USE OF UNANTICIPATED, UNOBLIGATED, NONRECURRING INCOME 9][.Y011=111010 Occasionally, the City receives income that was not anticipated and was not budgeted. Often, this money is non -recurring and reflects a one-time occurrence which generated the unanticipated increase in income. Non -recurring income generally will not be spent on recurring expenses. This would result in a funding shortfall in the following budget year before even starting budget preparation. However, eligible non -recurring expenditures would include capital improvements and equipment purchases. GuiuELINL Nonrecurring unobligated income shall generally only be spent for nonrecurring expenses. Capital improvement projects and major equipment purchases tend to be nonrecurring expenditures. R. USE OF "UNENCUMBERED FUND BALANCES" Historically, 100% of a budget is not spent by the end of the fiscal year and a small unencumbered balance remains on June 30th. In addition, income sometimes exceeds revenue estimates or there are cost savings resulting in some unanticipated balances at the end of the year. These amounts of unobligated, year-end balances are "carried over" into the new fiscal year to help finance it. The FY 2025 General Fund budget, which went into effect July 1, 2024, anticipated a "carryover balance" of $200,000 or approximately 0.7 percent of the City tax asking. For multi -year budget planning purposes, these guidelines assume a carryover balance of $200,000 in FY 2026 through FY 2030. GUIDELINE Carryover General Fund balance shall generally be used to help finance the next fiscal year budget and reduce the demand for increased taxation. The available carryover General Fund balance shall be anticipated not to exceed $200,000 for FY 2027 and beyond through the budget planning period. Any amount over that shall usually be Page 39 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 14 programmed in the next budget cycle as part of the capital improvement budgeting process. T. PROPERTY TAX DISCUSSION I. ASSUMPTIONS - RESOURCES 1. Local, Federal and State Resources a. Cash Balance. Unencumbered funds or cash balances of $200,000 will be available in FY 2026 and each succeeding year to support the operating budget. b. Interest Revenue. Interest revenue increased from $1,718,055 in FY 2025 to $2,300,081 in FY 2026. The FY 2026 budget is based on projected general fund cash balance, projected interest rates, and the new banking services agreement tied to a thirteen week T-bill plus five basis points. b. Sales Tax Revenue. By resolution, 50% of sales tax funds must be used in the General Fund for property tax relief in FY 2026. Sales tax receipts are projected to decrease (0.17)% ($21,580) under FY 2025 budget and 2.00% over FY 2025 actual of $12,652,878 based on FY 2025 revised revenue estimate which includes actuals through December 2024, and then increase at an annual rate of 2.00% percent per year beginning in FY 2027. The following chart shows the past four years of actual sales tax funds and projected FY 2026 for the General Fund: Sales Tax Funds PY Q4 FY 2022 $ 419,551 FY 2023 $ 475,037 FY 0- $ 451,920 $ FY 2025 574,416 FY 2026 $ 585,904 Quarter 1 $ 1,361,526 $ 1,177,196 $ 1,545,777 $ 1,592,834 $ 1,624,691 Quarter 2 $ 1,425,968 $ 1,522,885 $ 1,596,421 $ 1,605,397 $ 1,637,505 Quarter 3 $ 1,211,388 $ 1,443,097 $ 1,524,508 $ 1,554,999 $ 1,586,099 Quarter $ 950,069 $ 1,110,593 $ 979,209 $ 998,793 $ 1,018,769 Reconciliation $ 945,466 $ 371,388 $ — $ — $ — Total $ 6,313,968 $ 6,100,196 $ 6,097,835 $ 6,326,439 $ 61452,968 Change +10.91% -3.50% -0.04% +3.75% +2.00% c. Hotel/Motel Tax Revenue. Hotel/motel tax receipts are projected to increase 15.82% ($534,077) over FY 2025 budget and 3.00% over FY 2025 re -estimated receipts of $3,796,563, and then increase at an annual rate of 3.00% per year. d. FTA Revenue. Federal Transportation Administration (FTA) transit operating assistance increased from $558,000 in FY 2025 to $598,167 in FY 2026. The FY 2026 budget is based on the revised FY 2025 budget received from the FTA. Federal operating assistance is based on a comparison of larger cities. Previously the allocation was based on population and population density. Page 40 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 15 e. Ambulance Revenue. Ambulance Ground Emergency Medical Transport Payments increased from $2,401,917 in FY 2025 to $2,413,018 in FY 2026. GEMT is a federally - funded supplement to state Medicaid payments to EMS providers transporting Medicaid patients which began in FY 2021. FY 2026 is based on calculated projections using historical averages. This revenue is projected using the first quarter of performance in FY 2025 and the previous 11 quarters of performance. Based on that formula, the 3- year quarterly average growth of Medicaid transports is 0.8%. The projected number of transports for FY 2025 is 1,084 and for FY 2026 is 1,092. The FY 2024 actual was 1,075. Based on the unaudited FY 2024 cost report, the FY 2026 revenue per transport is estimated to be $2,209.18. This line item is offset by GEMT Pay to Other Agency expense for local match of $804,331 resulting in net revenue of $1,608,687. Ambulance Fees decreased from $2,074,232 in FY 2025 ($361 per call) to $1,756,870 in FY 2026 ($357 per call) based on calculated projections using historical averages. The FY 2024 actual was $1,763,339. In FY 2026, it is currently estimated that there will be 4,924 calls with $357 per call average. The FY 2026 ambulance revenue projection is based on the average transport volume growth of the past 12 quarters (which is 0.2% growth). This includes the first quarter of performance in FY 2025 and the prior 11 quarters. f. Miscellaneous Revenue. Miscellaneous revenue has been estimated at 2% growth per year over budgeted FY 2025. g. Building Fee Revenue. Building fees (Building Permits, Electrical Permits, Mechanical Permits and Plumbing Permits) are anticipated to increase $167,827 from $932,030 in FY 2025 to $1,099,857 in FY 2026. h. DRA Revenue. Gaming revenues generated from lease payments from the Dubuque Racing Association (DRA) are estimated to decrease $192,217 from $7,405,579 in FY 2025 to $7,213,362 in FY 2026 based on revised projections from the DRA. This follows a $2,283,319 increase from budget in FY 2025 and a $43,621 increase from budget in FY 2024. The following is a ten-year history of DRA lease payments to the City of Dubuque: Page 41 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 16 Fiscal Year FY 2026 Projected DRA Lease Payments $7,213,362 $ Change $601,496 % Change 9.1 % FY 2025 Revised $6,611,866 -$793,713 -10.7% FY 2025 Budget $7,405,579 $1,131,553 18.0% FY 2024 Actual $6,274,026 -$917,449 -12.8% FY 2023 Actual $7,191,475 $583,944 8.8% FY 2022 Actual $6,607,531 $2,645,535 66.8% FY2021 Actual $3,961,996 -$1,187,192 -23.1% FY 2020 Actual $5,149,188 $293,177 6.0% FY 2019 Actual $4,856,011 $18,879 0.4% FY 2018 Actual $4,837,132 -$195,083 -3.9% FY 2017 Actual $5,032,215 -$155,297 -3.0% FY2016Actual $5,187,512 -$158,104 -3.0% FY 2015 Actual $5,345,616 -$1,474,667 -10.9% The Diamond Jo payment related to the revised parking agreement increased from $624,377 in FY 2025 to $687,003 in 2026 based on estimated Consumer Price Index adjustment. i. DRA Gaming. The split of gaming revenues from taxes and the DRA lease (not distributions) in FY 2026 remains at a split of 100% operating and 0% capital. When practical in future years, additional revenues will be moved to the capital budget from the operating budget. Page 42 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 17 The following shows the annual split of gaming taxes and rents between operating and capital budgets from FY2021— FY2026: Split of Gaming Tax + Revenue Between Operating & Capital Budgets FY 2021 100% FY 2022 100% FY 2023 100% FY 2024 100% FY 2025 100% FY 2026 100% —% 10% 20% 30% 40% 50% 60% 70% 80% Operating ■ Capital 0% 0% 0% 0% 0% 0% 90% 100% 110% j. Diamond Jo Revenue. The Diamond Jo Patio lease ($25,000 in FY 2026) and the Diamond Jo parking privileges ($687,003 in FY 2026) have not been included in the split with gaming revenues. This revenue is allocated to the operating budget. 2. Property Taxes k. Residential Rollback. The residential rollback factor will increase from 46.3428% in 2025 to 47.4316% or a 2.35% increase in FY 2026. The rollback has been estimated to remain the same from Fiscal Years 2027 through 2030. The percent of growth from revaluation is to be the same for agricultural and residential property; therefore, if one of these classes has less than 3% growth for a year, the other class is limited to the same percent of growth. A balance is maintained between the two classes by ensuring that they increase from revaluation at the same rate. In FY 2026, agricultural property had more growth than residential property which caused the rollback factor to increase. The increase in the residential rollback factor increases the value that each residence is taxed on. This increased taxable value for the average homeowner ($91,067 taxable value in FY 2025 and $93,207 taxable value in 2026) results in more taxes to be paid per $1,000 of assessed value. In an effort to keep property taxes low to the average homeowner, the City calculates the property tax impact to the average residential Page 43 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 18 property based on the residential rollback factor and property tax rate. In a year that the residential rollback factor increases, the City recommends a lower property tax rate than what would be recommended had the rollback factor remained the same. The residential rollback in Fiscal Year 1987 was 75.6481 percent as compared to 47.4316 percent in Fiscal Year 2026. The rollback percent had steadily decreased since FY 1987, which has resulted in less taxable value and an increase in the City's tax rate. However, that trend began reversing in FY 2009 when the rollback reached a low of 44.0803 percent. If the rollback had remained at 75.6481 percent in FY 2025, the City's tax rate would have been $5.95 per $1,000 of assessed value instead of $9.93 in FY 2025. I. State Equalization Order/Property Tax Reform. There was not an equalization order for commercial, industrial or multi -residential property in Fiscal Year 2026. The Iowa Department of Revenue is responsible for "equalizing" assessments every two years. Also, equalization occurs on an assessing jurisdiction basis, not on a statewide basis. Commercial and Industrial taxpayers previously were taxed at 100 percent of assessed value; however due to legislative changes in FY 2013, a 95% rollback factor was applied in FY 2015 and a 90% rollback factor will be applied in FY 2016 and beyond. The State of Iowa backfilled the loss in property tax revenue from the rollback 100% in FY 2015 through FY 2017 and the backfill was capped at the FY 2017 level in FY 2018 and beyond. The FY 2026 State backfill for property tax loss is estimated to be $646,603 for all funds (General Fund, Tort Liability Fund, Trust and Agency Fund, Debt Service Fund, and Tax Increment Financing Funds). Senate File 619 was signed into law by Governor Reynolds on June 16, 2021. The Bill provides that beginning with the FY 2023 payment, the General Fund standing appropriation for commercial and industrial property tax replacement for cities and counties will be phased out in four or seven years, depending on how the tax base of the city or county grew relative to the rest of the state since FY 2014. Cities and counties where the tax base grew at a faster rate than the statewide average from FY 2014 through FY 2021 will have the backfill phased out over a four-year period from FY 2023 to FY 2026, while those that grew at a rate less than the statewide average will have the backfill phased out over a seven-year period from FY 2023 to FY 2029. The City of Dubuque's tax base grew at a rate less than the statewide average and will have a backfill phase out over a seven year period from FY 2023 to FY 2029. Beginning in FY 2023, the backfill will be eliminated over a eight year period. Page 44 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 19 The projected reduction of State backfill revenue to only the general fund is as follows: Fiscal Y= 2026 State Backfill Reduction -$97,981 2027 -$97,981 2028 -$97,981 2029 -$97,981 2030 -$97,981 Total -$489,905 Business Property Tax Credit Law Changes and Implementation of Two -Tier Assessment Limitations From FY 2015 through FY 2023, commercial, industrial and railroad properties were eligible for a Business Property Tax Credit. The Business Property Tax Credit was deducted from the property taxes owed and the credit was funded by the State of Iowa. The average commercial and industrial properties ($432,475 Commercial / $599,500 Industrial) received a Business Property Tax Credit from the State of Iowa for the City share of their property taxes of $148 in FY 2015, $693 in FY 2016, $982 in FY 2017, $959 in FY 2018, $843 in FY 2019, $861 in FY 2020, $779 in FY 2021, $780 in FY 2022, and $722 in FY 2023. House File 2552, Division 11 passed in the 2022 legislative session and signed by the Governor on May 2, 2022 repeals the Business Property Tax Credit (BPTC). In lieu of the BPTC, beginning with assessment year 2022, all commercial, industrial, and railroad properties will receive a property assessment limitation on the first $150,000 of value of the property unit equal to the assessment limitation for residential property. The value of the property unit that exceeds $150,000 receives the same ninety percent assessment limitation it has in the past. The $125 million fund will continue to be appropriated each year for reimbursements to counties. County auditors will file a claim for the first tier of the assessment limitations in September. Assessors will continue to provide the unit configuration for auditors as these definitions remained the same. Taxpayers are not required to file an application to receive the first $150,000 of assessed value at the residential assessment limitation rate. If the total for all claims is more than the appropriated amounts, the claims will be prorated and the Iowa Department of Revenue will notify the county auditors of prorated percentage by September 30th. Lawmakers believe the new standing general fund will exceed the projected level of claims for fiscal years 2024 through 2029. Then in fiscal year 2030, the local government reimbursement claims will begin being prorated. The projected backfill for Dubuque for the two-tier assessment limitation in Fiscal Year 2026 is estimated to be $387,318. Page 45 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 20 m. Multi -Residential Property Class/Eliminated State Shared Revenue. Beginning in FY 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 3 or more units. Rental properties of 2 units were already classified as residential property. The State of Iowa did not backfill property tax loss from the rollback on multi -residential property. The rollback occurred as follows: Fiscal Year FY 2017 Rollback % 86.25% Annual Loss of Tax Revenue $331,239 FY 2018 82.50% $472,127 FY 2019 78.75% $576,503 FY 2020 75.00% $691,640 FY 2021 71.25% $952,888 FY 2022 67.50% $752,366 FY 2023 63.75% $662,821 FY 2024 54.65% $1,186,077 Total $5,625,661 This annual loss in tax revenue of $1,186,077 from multi -residential property was not backfilled by the State. From Fiscal Year 2017 through Fiscal Year 2024 the City lost $5,625,661 in total, meaning landlords paid that much less in property taxes. The state did not require landlords to charge lower rents or to make additional investment in their property. In Fiscal Year 2024, the multi -residential property class was eliminated and is reported with the residential property class. State Shared Revenue Eliminations In addition, the State of Iowa eliminated the: a. Machinery and Equipment Tax Replacement in FY 2003 (-$200,000) b. Personal Property Tax Replacement in FY 2004 (-$350,000) c. Municipal Assistance in FY 2004 (-$300,000) d. Liquor Sales Revenue in FY 2004 (-$250,000) e. Bank Franchise Tax in FY 2005 (-$145,000) f. Alcohol License Revenue in FY 2023 (-$85,000) The combination of the decreased residential rollback, State funding cuts and increased expenses has forced the City's tax rate to increase since 1987 when the residents Page 46 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 21 passed a referendum to establish a one percent local option sales tax with 50% of the revenue going to property tax relief. n. Taxable Value. FY 2026 will reflect the following impacts of taxable values of various property types: Property Type Residential Includes Multi -Residential Percent Change in Taxable Value +2.77 % Commercial +1.84 % Industrial +2.41 % Overall +4.39 % *Overall taxable value increased 4.39% percent after deducting Tax Increment Financing values Assessed valuations were increased 2 percent per year beyond FY 2026. o. Riverfront Property Lease Revenue. Riverfront property lease revenue is projected to increase by $162,758 in FY 2026 to $4,273,045 due to the estimated consumer price index increase and inclusion of property tax reimbursement from leaseholders. 3. Fees, Tax Rates & Services p. Franchise Fees. Natural Gas franchise fees have been projected to increase 11.7 percent over FY 2024 actual of $923,628. Also, Electric franchise fees are based on FY 2024 Actual of $4,924,839 plus rate increases of 20.0 percent. The franchise fee revenues are projected to increase at an annual rate of 4 percent per year from FY 2027 through FY 2030. The City provides franchise fee rebates to gas and electric customers who are exempt from State of Iowa sales tax. Franchise fee rebates are provided at the same exemption percent as the State of Iowa sales tax exemption indicated on the individual gas and or electric bill. To receive a franchise fee rebate, a rebate request form must be completed by the customer, the gas and/or electric bill must be attached, and requests for rebates for franchise fees must be submitted during the fiscal year in which the franchise fees were paid except for June. Natural Gas franchise fee rebates have been projected to decrease 46 percent under 2025 budget of $101,399 and Electric franchise fee rebates have been projected to decrease 3 percent under 2025 budget of $845,095. The franchise fee charged on gas and electric bills increased from 3% to 5%, the legal maximum, on June 1, 2015. q. Property Tax Rate. For purposes of budget projections only, it is assumed that City property taxes will continue to increase at a rate necessary to meet additional requirements over resources beyond FY 2026. Page 47 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 22 r. Police & Fire Protection. FY 2026 reflects the fourteenth year that payment in lieu of taxes is charged to the Water and Sanitary Sewer funds for Police and Fire Protection. In FY 2026, the Sanitary Sewer fund is charged 0.43% of building value and the Water fund is charged 0.62% of building value, for payment in lieu of taxes for Police and Fire Protection. This revenue is reflected in the General Fund and is used for general property tax relief. ii. HSSUivir i 1UNS — REQUIREMENTS a. Pension Systems. • The Municipal Fire and Police Retirement System of Iowa (MFPRSI) Board of Trustees City contribution for Police and Fire retirement increased from 22.66% percent in FY 2025 to 22.68% percent in FY 2026 (general fund cost of $2,177 for Police and $1,881 for Fire or a total of $4,058). • The Iowa Public Employee Retirement System (IPERS) City contribution is unchanged from the FY 2025 contribution rate of 9.44% (no general fund impact). The IPERS employee contribution is unchanged from the FY 2025 contribution rate of 6.29% (which does not affect the City's portion of the budget). The IPERS rate is anticipated to increase 1 percent each succeeding year. b. Collective Bargaining and Non -Represented. The already approved collective bargaining agreements for Dubuque Professional Fire Fighters Association and International Union of Operating Engineers include a 3.50% wage increase. The already approved collective bargaining agreement for the Dubuque Police Protective Association includes a 5% wage increase. The Teamsters Local Union No. 120 Bus Operators and Teamsters Local Union No. 120 are in contract negotiations. Non - represented employees include a 3.00% wage increase. Fiscal Year 2026 includes the cost of the implementation of the classification and compensation study. A classification and compensation study analyzes the job positions (not individuals) in an organization. The purpose of a classification and compensation study is to ensure jobs with comparable minimum qualifications, job responsibilities, supervisory expectations, working conditions and environments are grouped closely in a compensation plan. Salary ranges are competitive within the identified market, and to equip the human resources team to consistently administer classification and compensation programs on an ongoing basis. The City's strategy through this study has been to recommend a new compensation strategy in which the City is competitive at the 50% percentile of employers. Total cost of the wage increases for collective bargaining and non - represented employees, and classification and compensation study is $2,026,133 to the General Fund. c. Health Insurance. The City portion of health insurance expense is projected to remain unchanged from $1,119 per month per contract to $1,119 per month per contract (based on 648 contracts) in FY 2026 (no general fund impact). 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. In FY 2017, The City went out for bid for third party Page 48 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 23 administrator and the estimated savings has resulted from the new contract and actual claims paid with there being actual reductions in cost in FY 2018 (19.42%) and FY 2019 (0.35%). In addition, firefighters began paying an increased employee health care premium sharing from 10% to 15% and there was a 7% increase in the premium on July 1, 2018. During FY 2019, the City went out for bid for third party administrator for the prescription drug plan and Fiscal Year 2022 included additional prescription drug plan savings.There was a decrease of $639,758 in prescription drug cost in FY 2022. Based on FY 2024 actual experience, Fiscal Year 2026 is projected to have a 4.61 % increase in health insurance costs. Estimates for FY 2027 were increased 4.62%; FY 2028 were increased 4.63%; FY 2029 were increased 4.64%; and FY 2030 were increased 4.65%. d. Five -Year Retiree Sick Leave Payout. FY 2013 was the first year that eligible retirees with at least twenty years of continuous service in a full-time position or employees who retired as a result of a disability and are eligible for pension payments from the pension system can receive payment of their sick leave balance with a maximum payment of 120 sick days, payable bi-weekly over a five-year period. The sick leave payout expense budget in the General Fund in FY 2025 was $283,061 as compared to FY 2026 of $288,742, based on qualifying employees officially giving notice of retirement. e. 50% Sick Leave Payout. Effective July 1, 2019, employees over the sick leave cap can convert 50% of the sick leave over the cap to vacation or be paid out. The 50% sick leave payout expense budget in the General Fund in FY 2025 was $124,908 as compared to FY 2026 of $126,210, based on FY 2025 year-to-date expense. f. Parental Leave. Effective March 8, 2019, employees may use Parental leave to take paid time away from work for the birth or the adoption of a child under 18 years old. Eligible employees receive their regular base pay (plus longevity) and benefits for twelve weeks following the date of birth, adoption event or foster -to -adopt placement. If both parents are eligible employees, each receive the leave benefit. There is no parental leave expense budgeted in the General Fund based on departments covering parental leave with existing employees and not incurring additional cost for temporary help. f. Supplies & Services. General operating supplies and services are estimated to increase 2% over actual in FY 2024. A 2% increase is estimated in succeeding years. g. Electricity. Electrical energy expense is estimated to increase 16% over FY 2024 actual expense, then 2% per year beyond. h. Natural Gas. Natural gas expense is estimated to increase 36% over FY 2024 actual then 2% per year beyond. i. Travel Dubuque. The Dubuque Area Convention and Visitors Bureau contract will continue at 50% of actual hotel/motel tax receipts. Page 49 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 24 j. Equipment & Machinery. Equipment costs for FY 2026 are estimated to decrease 22.53% under FY 2025 budget, then remain constant per year beyond. k. Debt Service. Debt service is estimated based on the tax -supported, unabated General Obligation bond sale for fire truck and franchise fee litigation settlement. I. Unemployment. Unemployment expense in the General Fund decreased from $33,922 in FY 2025 to $23,824 in FY 2026 based on estimated premium for FY2025. m. Motor Vehicle Fuel. Motor vehicle fuel is estimated to decrease 9% under the FY 2025 budget, then increase 2.0% per year beyond. n. Motor Vehicle Maintenance. Motor vehicle maintenance is estimated to increase 1 % from the FY 2025 budget based on FY 2024 actual, then increase 2.0% per year and beyond. o. Public Transit. The decrease in property tax support for Transit from FY 2025 to FY 2026 is $13,920, which reflects an increase in Federal Transportation Administration Operating revenue ($40,167); an increase in Federal Transportation Administration Capital ($9,474), an increase in employee expense ($111,326); decrease in supplies and services ($41,013); a reduction in equipment replacements ($18,576), an increase in passenger fare revenue ($20,693). p. Public Transit (continued): The following is a ten-year history of the Transit subsidy: Fiscal Year 2026 Projection Amount $1,947,568 % Change 0.71 % 2025 Budget $1,961,488 26.70 % 2024 Actual $1,548,127 1.52 % 2023 Actual $1,571,981 1.83 % 2022 Actual $1,601,290 2.09 % 2021 Actual $1,635,441 4.94 % 2020 Actual $1,558,460 0.82 % 2019 Actual $1,571,307 0.10 % 2018 Actual $1,572,825 34.10 % 2017 Actual $1,172,885 24.41 % 2016 Actual $942,752 13.20 % 2015 Actual $1,086,0801 45.51 % q. Shipping & Postage. Postage rates for FY 2026 are estimated to increase 3% over FY 2024 actual expense and proposed cost increases by United States Postal Service. A 3.0 percent increase is estimated in succeeding years. Page 50 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 25 r. Insurance. Insurance costs are estimated to change as follows: • Workers Compensation is increasing 6.58% based on rate change. • General Liability is increasing 1.25% based on FY 2025 actual plus 1.25%. • Damage claims is increasing 35.26% based on a three year average. • Property insurance is decreasing based on FY 2025 actual less 1 %. s. Housing. The Housing Choice Voucher subsidy payment from the General Fund is estimated to increase $78,583 in FY 2026. The budgeted administrative cost of the Housing Choice Voucher Program increased from $875,932 in FY 2025 to $906,171 in FY 2026. Administrative revenue of the Housing Choice Voucher Program decreased from $759,336 in FY 2025 to $713,338 in FY 2026. The resulting Housing Choice Voucher Program deficit increased from $116,596 in FY 2025 to $192,833 in FY 2026. This deficit is funded by property taxes. t. Media Services Fund. The Media Services Fund no longer funds Police and Fire public education, Information Services, Health Services, Building Services, Legal Services, and City Manager's Office due to reduced revenues from the cable franchise. This is due to Mediacom's conversion from a Dubuque franchise to a state franchise in October 2009 which changed the timing and calculation of the franchise fee payments. Effective June 2020, Mediacom will no longer contribute to the Public, Educational, and Governmental Access Cable Grant (PEG) Fund, and after the balance in that fund is expended, the City will be responsible for all City Media Service equipment replacement costs. Other jurisdictions will need to plan accordingly. u. Greater Dubuque Development Corporation. Greater Dubuque Development Corporation support of $836,135 is budgeted to be paid mostly from Dubuque Industrial Center Land Sales in FY 2026, with $26,500 for True North strategy paid from the Greater Downtown TIF. In FY 2027 and beyond Greater Dubuque Development Corporation will be paid from the Greater Downtown TIF and Dubuque Industrial Center West land sales. Page 51 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 26 PROPERTY TAX IMPACT The recommended Fiscal Year 2026 property tax rate increased 1.38% and will have the following impact: Historical Impact on Tax Askings and Average Residential Property Tax Rates The following is a historical City tax rate comparison. The average percent change in tax rate from 1987-2026 is-0.88%. The average annual change over the last five years is -0.14%. The following pages show historical and projected property tax impacts. Page 52 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 27 FY 1987 FY 1988 FY 1989 FY 1990 FY 1991 FY 1992 FY 1993 FY 1994 FY 1995 FY 1996 FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY2025 FY2026 Historical Impact on Tax Askings & Average Residential Property Tax Rates f % Change in Tax Rate City Tax Rate $— $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 17.50)% (15.00)% (12.50)% (10.00)% (7.50)% (5.00)% (2.50)% —% $14.00 $16.0( 2.50% 5.00% Page 53 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 28 Historical City tax rates and % change in tax rate: Fiscal Year FY 1987 City Tax Rate 14.5819 % Change in Tax Rate FY 1988 13.9500 -4.33% FY 1989 11.8007 -15.41 % FY 1990 11.6891 -0.95% FY 1991 12.2660 +4.94% FY 1992 12.7741 +4.14% FY 1993 12.4989 -2.15% FY 1994 12.6059 +0.86% FY 1995 11.7821 -6.54% FY 1996 11.7821 0.00% FY 1997 11.3815 -3.40% FY 1998 11.4011 +0.17% FY 1999 11.0734 -2.87% FY 2000 10.7160 -3.23% FY 2001 11.0671 +3.28% FY 2002 10.7608 -2.77% FY 2003 10.2120 -5.10% FY 2004 10.2730 +0.60% FY 2005 10.0720 -1.96% FY 2006 9.6991 -3.70% FY 2007 9.9803 +2.90% FY 2008 10.3169 +3.37% FY 2009 9.9690 -3.37% FY 2010 9.8577 -1.12% FY 2011 10.0274 +1.72% FY 2012 10.4511 +4.23% FY 2013 10.7848 +3.19% FY 2014 11.0259 +2.24% FY 2015 11.0259 0.00% FY 2016 11.0259 0.00% FY 2017 11.1674 +1.28% FY 2018 10.8922 -2.46% FY 2019 10.5884 -2.79% FY 2020 10.3314 -2.43% FY 2021 10.1440 -1.81 % FY 2022 9.8890 -2.51 % FY 2023 9.7169 -1.74% FY 2024 9.9014 +1.90% FY 2025 9.9264 +0.25% FY 2026 10.0637 +1.38% Page 54 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 29 Fiscal Year City Tax Rate % Change in Tax Rati 1987 - 2026 Average Change -0.88% 2022-2026 Average Change -0.14% From Fiscal Year 1987 through Fiscal Year 2026, the average annual change in the property tax rate is a decrease of 0.88%. Over the last five years, the average annual change in the property tax rate is a decrease of 0.14%. Projected Impacts on Tax Askings and Average Residential Property Tax Rates Project Impacts on Tax Askings & Average Residential Property Tax Rates 9.60% $16.00 7.20% 4.80% 2.40% FY 2026 FY 2027 FY 2028 % Change in Tax Rate Projected City tax rates and % change in tax rate*: FY 2029 FY 2030 City Tax Rate Fiscal Year FY 2026 City Tax Rate 10.0637 % Change in Tax Rate 1.38% FY 2027 10.5824 5.15% FY 2028 11.0305 4.23% FY 2029 11.1417 1.01 % FY 2030 11.4323 2.61 % $12.00 $8.00 $4.00 Page 55 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 30 IMPACT ON AVERAGE RESIDENTIAL PROPERTY - EXAMPLE AnHistoricall FY 1989 "City" Property Tax Calculation $453.99 Actual .- -11.40% Change if �i'� .-. �.ar .- -$58.39 FY 1990 "City" Property Tax $449.94 -0.89% -$4.04 FY 1991* "City" Property Tax* $466.92 +3.77% $16.98 FY 1992 "City" Property Tax $483.63 +3.58% $16.71 FY 1993* "City" Property Tax* $508.73 +5.19% $25.10 FY 1994 "City" Property Tax $510.40 +0.33% $1.51 FY 1995* "City" Property Tax* $522.65 +2.40% $12.41 FY 1996 "City" Property Tax $518.10 -0.87% -$4.54 FY 1997* "City" Property Tax* $515.91 -0.42% -$2.19 FY 1998 "City" Property Tax $512.25 -0.71 % -$3.66 FY 1999 "City" Property Tax* $512.25 0.00% $0.00 FY 2000 "City" Property Tax $511.38 -0.17% -$0.87 FY 2001 "City" Property Tax $511.38 0.00% $0.00 FY 2002 "City" Property Tax $511.38 0.00% $0.00 FY 2003 "City" Property Tax* $485.79 -5.00% -$25.58 FY 2004 "City" Property Tax $485.79 0.00% $0.00 With Homestead Adj. $493.26 +1.54% $7.46 FY 2005 "City" Property Tax* $485.93 +0.03% $0.14 With Homestead Adj.* $495.21 +0.40% $1.95 FY 2006 "City" Property Tax 1 $494.27 +1.72% $8.34 With Homestead Ad'. 1 $504.62 +1.90% $9.41 FY 2007 "City" Property Tax* 2 $485.79 -1.72% -$8.48 With Homestead Adj.* $496.93 -1.52% -$7.69 FY 2008 "City" Property Tax $496.93 0.00% $0.00 With Homestead Adj. $510.45 +2.72% $13.52 FY 2009 "City" Property Tax $524.53 +2.76% $14.08 With Homestead Adj. $538.07 +5.41 % $27.62 FY 2010 "City" Property Tax $538.07 0.00% $0.00 With Homestead Ad'. $550.97 +2.40% $12.90 FY 2011 "City" Property Tax $564.59 +2.47% $13.62 With Homestead Adj. 3 $582.10 +5.65% $31.13 FY 2012 "City" Property Tax $611.19 +5.00% $29.09 With Homestead Adj. (3) $629.78 +8.19% $47.68 FY 2013 "City" Property Tax $661.25 +5.00%1 $31.47 With Homestead Adj. (3) $672.76 +6.82% $42.98 FY 2014 "City" Property Tax $705.71 +4.90% $32.95 Page 56 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 31 - Historical FY 2015 "City" Property Tax City Tax Calculation $728.48 Actual Percent ChangeActual +3.23% Change if HTC 100% Funded Dollar Change $22.77 FY 2016 "City" Property Tax $747.65 +2.63% +$19.17 FY 2017 "City" Property Tax $755.70 +1.08% $8.05 FY 2018 "City" Property Tax $755.70 0.00% $0.00 FY 2019 1 "City" Property Tax $770.17 +1.91 % $14.47 FY 2020 "City" Property Tax $770.17 0.00% $0.00 FY 2021 "City" Property Tax $769.08 -0.14% -$1.09 FY 2022 "City" Property Tax $769.08 0.00% $0.00 FY 2023 "City" Property Tax $791.82 +2.96% +$22.74 FY 2024 "City" Property Tax $815.07 +2.94% +$23.25 FY 2025 "City" Property Tax $855.82 +5.00% Average FY1989-FY2025 with Homestead Adj. +1.45% Average FY2021-FY2025 with Homestead Adj. +2.15% Average FY1989-FY2025 without Homestead Adj. +0.96% +$40.75 +$9.28 +$17.13 +$6.62 The average annual dollar change in residential property tax from 1989-2025 is an increase of $9.28. The average annual dollar change over the last five years is an increase of $17.13. Projected impact on average residential property: FY 2026 PROJECTION CITY CALCULATIO "City" Property Tax TAX $889.20 PERCENT +3.90% DOLLAR +$33.38 FY 2027 "City" Property Tax $935.02 +5.15% +$45.82 FY 2028 "City" Property Tax $974.62 +4.24% +$39.60 FY 2029 "City" Property Tax $984.45 +1.01 % +$9.83 FY 2030 "City" Property Tax $1,010.12 +2.61 % +$25.67 * Denotes year of State -issued equalization orders. ^ Impact to average homeowner if the State funds the Homestead Property Tax Credit at 62%. (1) The FY 2006 property tax calculation considers the 6.2% valuation increase for the average residential homeowner as determined by the reappraisal. (2) Offsets the impact of the State reduced Homestead Property Tax Credit in FY 2005 & 2006. (3) The City adopted a budget in FY 2011 and 2012 that provided no increase to the average homeowner. The State of Iowa underfunded the Homestead Property Tax Credit in both years costing the average homeowner an additional $18.59 in FY 2012 and $11.51 in FY 2013. This provided no additional revenues to the City, as this money would have come to the City from the State if they appropriated the proper amount of funds. Page 57 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 32 Homestead Property Tax Credit The Homestead Property Tax Credit was established by the state legislature to reduce the amount of property tax collected. The intent of the credit was to be a form of tax relief and provide an incentive for home ownership. The State Homestead Property Tax Credit works by discounting the tax collected on the first $4,850 of a property's taxable value. This has no impact on what the City receives from property tax collections, but provides tax relief for the average homeowner. Beginning FY 2004, the State of Iowa did not fully fund the State Homestead Property Tax Credit resulting in the average homeowner paying the unfunded portion. Again, this has no impact on what the City receives, however as a result has caused the average homeowner to pay more taxes. Historical Percent of Iowa Homestead Property Tax Credit Funded by the State of Iowa 2003 100% 2004 85% 2005 81% 2006 78% 2007 77% 2008 73% 2009 72% 2010 72% 2011 64% 2012 62% 2013 78% 2014 100% 2015 100% 2016 100% 2017 100% 2018 100% 2019 100% 2020 100% 2021 100% 2022 100% 2023 100% 2024 100% 2025 100% 2026 100% % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent Funded Page 58 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 33 IMPACT ON COMMERCIAL PROPERTY - EXAMPLE •- • $2,106.42 -•- D• 1- -$384.19 -15.43% FY 9989 -4 "City" Property Tax FY 1990 "City" Property Tax $2,086.50 -$19.92 -0.95% FY 1991 "City" Property Tax $2,189.48 +$102.98 +4.94% FY 1992 "City" Property Tax $2,280.18 +$90.70 +4.14% FY 1993 "City" Property Tax $2,231.05 -$49.13 -2.15% FY 1994 "City" Property Tax $2,250.15 +$19.10 +0.86% FY 1995 "City" Property Tax $2,439.60 +$189.45 +8.42% FY 1996 "City" Property Tax $2,439.60 $0.00 0.00% FY 1997 "City" Property Tax $2,659.36 +$219.76 +9.01 % FY 1998 "City" Property Tax $2,738.43 +$79.07 +2.97% FY 1999 "City" Property Tax $2,952.03 +$213.60 +7.80% FY 2000 "City" Property Tax $2,934.21 -$17.82 -0.60% FY 2001 "City" Property Tax $2,993.00 +$58.86 +2.00% FY 2002 "City" Property Tax $2,910.25 -$82.84 -2.76% FY 2003 "City" Property Tax $3,186.27 +$276.03 +9.48% FY 2004 "City" Property Tax $3,278.41 +$92.15 +2.89% FY 2005 "City" Property Tax $3,349.90 +$71.48 +2.18% FY 2006 "City" Property Tax (1) $3,152.52 -$197.38 -5.89% FY 2007 "City" Property Tax $3,538.03 +$385.50 +12.23% FY 2008 "City" Property Tax $3,688.64 +$150.62 +4.26% FY 2009 "City" Property Tax $3,554.71 -$133.94 -3.63% FY 2010 "City" Property Tax $3,524.48 -$30.23 -0.85% FY 2011 "City" Property Tax $3,585.16 +$60.68 +1.72% FY 2012 "City" Property Tax $3,736.64 +$151.48 +4.23% FY 2013 "City" Property Tax $3,855.96 +$119.32 +3.19% FY 2014 "City" Property Tax $3,942.14 +$86.20 +2.23% FY 2015 "City" Property Tax (2) $3,896.93 $147.72 -$45.21 -1.15% FY 2016 "City" Property Tax (3) $3,139.16 $692.62 -$757.77 -19.45% FY 2017 "City" Property Tax (4) $3,364.61 $982.19 +$225.45 +7.18% FY 2018 "City" Property Tax (5) $3,280.44 $959.11 -$84.16 -2.50% FY 2019 "City" Property Tax (6) $3,278.23 $843.08 -$2.21 -0.07% FY 2020 "City" Property Tax (7) $3,160.71 $860.57 -$117.52 -3.58% FY 2021 "City" Property Tax (8) $3,169.30 $779.03 +$8.59 +0.27% FY 2022 "City" Property Tax (9) $3,069.57 $779.50 -$99.73 -3.15% FY 2023 "City" Property Tax (10) $3,060.34 $721.73 -$9.23 -0.30% FY 2024 "City" Property Tax (11) $3,328.86 +$268.52 +8.77% FY 2025 "City" Property Tax (11) $3,213.58 -$115.28 -3.46% FY 1989-2025 Average Change +$19.54 +0.89% 2021-2025 Average Change 1 1 +$10.57 +0.43% Page 59 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 34 *Net of Business Property Tax Credit The average annual dollar change in commercial property taxes from 1989-2025 is a increase of $19.54. The average annual dollar change over the last five years is a increase of +$10.57. Projected impact on average commercial property: PROJECTEDDOLLAR FY 2026 "City" Property Tax CALCULATION $3,274.49 PERCENT CHANGE +$60.91 CHANGE +1.90% FY 2027 "City" Property Tax $3,443.24 +$168.75 +5.15% FY 2028 "City" Property Tax $3,589.04 +$145.80 +4.23% FY 2029 "City" Property Tax $3,625.24 +$36.20 +1.01 % FY 2030 1 "City" Property Tax 1 $3,719.78 +$94.54 +2.61 (1) The FY 2006 property tax calculation considers the 19.9% valuation increase for industrial property as determined by the reappraisal. (2) The Business Property Tax Credit was $148 and rollback to 95% in FY 2015. (3) The Business Property Tax Credit was $693 and rollback to 90% in FY 2016. (4) The Business Property Tax Credit was $982 and rollback to 90% in FY 2017. (5) The Business Property Tax Credit was $959 and rollback to 90% in FY 2018. (6) The Business Property Tax Credit was $843 and rollback to 90% in FY 2019. (7) The Business Property Tax Credit was $861 and rollback to 90% in FY 2020. (8) The Business Property Tax Credit was $779 and rollback to 90% in FY 2021. (9) The Business Property Tax Credit was $780 and rollback to 90% in FY 2022. (10) The Business Property Tax Credit was $722 and rollback to 90% in FY 2023. (11)From FY 2015 through FY 2023, commercial, industrial and railroad properties were eligible for a Business Property Tax Credit. The Business Property Tax Credit was deducted from the property taxes owed and the credit was funded by the State of Iowa. Beginning in FY 2024, all commercial, industrial, and railroad properties will receive a property assessment limitation on the first $150,000 of value of the property unit equal to the assessment limitation for residential property. The value of the property unit that exceeds $150,000 receives the same ninety percent assessment limitation it has in the past.The $125 million fund will continue to be appropriated each year for reimbursements to counties. County auditors will file a claim for the first tier of the assessment limitations in September. Assessors will continue to provide the unit configuration for auditors as these definitions remained the same. Taxpayers are not required to file an application to receive the first $150,000 of assessed value at the residential assessment limitation rate. Lawmakers believe the new standing general fund will exceed the projected level of claims for fiscal years 2024 through 2029. Then in fiscal year 2030, the local government reimbursement claims will begin being prorated. The projected backfill for Dubuque for the two-tier assessment limitation in Fiscal Year 2024 is estimated to be $587,446. Page 60 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 35 IMPACT ON INDUSTRIAL PROPERTY - EXAMPLE ACTUALrISTORICA�01 FY 1989 "City" Property Tax CALCULATIONCITY TAX $5,900.35 BUSINESS -•- CREDIT DOLLAR CHANGE -$1,074.65 PERCENT CHANGE -15.40% FY 1990 "City" Property Tax $5,844.55 -$55.80 -0.95% FY 1991 "City" Property Tax $6,133.00 +$288.45 +4.94% FY 1992 "City" Property Tax $6,387.05 +$254.05 +4.14% FY 1993 "City" Property Tax $6,249.45 -$137.60 -2.15% FY 1994 1 "City" Property Tax $6,302.95 +$53.50 +0.86% FY 1995 "City" Property Tax $5,891.05 -$411.90 -6.54% FY 1996 "City" Property Tax $5,891.05 $0.00 0.00% FY 1997 "City" Property Tax $5,690.75 -$200.30 -3.40% FY 1998 "City" Property Tax $5,700.56 +$9.81 +0.17% FY 1999 "City" Property Tax $5,536.70 -$163.86 -2.87% FY 2000 "City" Property Tax $5,358.00 -$178.70 -3.23% FY 2001 "City" Property Tax $5,533.00 +$175.00 +3.27% FY 2002 "City" Property Tax $5,380.42 -$152.58 -2.76% FY 2003 "City" Property Tax $5,106.00 -$274.42 -5.10% FY 2004 "City" Property Tax $5,136.50 +$30.50 +0.60% FY 2005 "City" Property Tax $5,036.00 -$100.50 -1.96% FY 2006 "City" Property Tax (1) $5,814.61 +$778.61 +15.46% FY 2007 "City" Property Tax $5,983.21 +$168.60 +2.90% FY 2008 "City" Property Tax $6,184.95 +$201.74 +3.37% FY 2009 "City" Property Tax $5,976.44 -$208.51 -3.37% FY 2010 "City" Property Tax $5,909.69 -$66.75 -1.12% FY 2011 "City" Property Tax $6,011.44 +$101.75 +1.72% FY 2012 "City" Property Tax $6,265.43 +$253.99 +4.23% FY 2013 "City" Property Tax $6,465.48 +$200.05 +3.19% FY 2014 "City" Property Tax $6,610.00 +$144.52 +2.24% FY 2015 "City" Property Tax (2) $6,131.80 $147.72 -$478.20 -7.23% FY 2016 "City" Property Tax (3) $5,256.41 $692.62 -$875.39 -14.28% FY 2017 "City" Property Tax (4) $5,043.36 $982.19 -$213.05 -4.05% FY 2018 "City" Property Tax (5) $4,917.78 $959.11 -$125.58 -2.49% FY 2019 "City" Property Tax (6) $4,869.91 $843.08 -$47.87 -0.97% FY 2020 "City" Property Tax (7) $4,713.76 $860.57 -$156.15 -3.21 % FY 2021 "City" Property Tax (8) $4,694.17 $779.03 -$19.59 -0.42% FY 2022 "City" Property Tax (9) $4,556.11 $779.50 -$138.06 -2.94% FY 2023 "City" Property Tax (10) $4,521.00 $721.73 -$35.11 -0.77% FY 2024 "City" Property Tax (11) $4,817.26 +$296.26 +6.55% FY 2025 "City" Property Tax (11) $4,705.74 -$111.52 -2.32% FY 1989-2025 Average Change -$61.33 -0.92% 2021-2025 Average Change -$1.60 +0.02% Page 61 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 36 *Net of Business Property Tax Credit The average annual dollar change in industrial property taxes from 1989-2025 is a decrease of $61.33. The average annual dollar change over the last five years is a decrease of $1.60. Projected impact on average industrial property: PROJECTEDW'WOL FY 2026 "City" Property Tax . • $4,787.29 LARPERCENT +$81.55 +1.73% FY 2027 "City" Property Tax $5,034.01 +$246.72 +5.15% FY 2028 "City" Property Tax $5,247.17 +$213.16 +4.23% FY 2029 "City" Property Tax $5,300.09 +$52.92 +1.01 % FY 2030 "City" Property Tax $5,438.30 +$138.21 +2.61 % (1) The FY 2006 property tax calculation considers the 19.9% valuation increase for industrial property as determined by the reappraisal. (2) The Business Property Tax Credit was $148 and rollback to 95% in FY 2015. (3) The Business Property Tax Credit was $693 and rollback to 90% in FY 2016. (4) The Business Property Tax Credit was $982 and rollback to 90% in FY 2017. (5) The Business Property Tax Credit was $959 and rollback to 90% in FY 2018. (6) The Business Property Tax Credit was $843 and rollback to 90% in FY 2019. (7) The Business Property Tax Credit was $861 and rollback to 90% in FY 2020. (8) The Business Property Tax Credit was $779 and rollback to 90% in FY 2021. (9) The Business Property Tax Credit was $780 and rollback to 90% in FY 2022. (10) The Business Property Tax Credit was $722 and rollback to 90% in FY 2023. (11) From FY 2015 through FY 2023, commercial, industrial and railroad properties were eligible for a Business Property Tax Credit. The Business Property Tax Credit was deducted from the property taxes owed and the credit was funded by the State of Iowa. Beginning in FY 2024, all commercial, industrial, and railroad properties will receive a property assessment limitation on the first $150,000 of value of the property unit equal to the assessment limitation for residential property. The value of the property unit that exceeds $150,000 receives the same ninety percent assessment limitation it has in the past.The $125 million fund will continue to be appropriated each year for reimbursements to counties. County auditors will file a claim for the first tier of the assessment limitations in September. Assessors will continue to provide the unit configuration for auditors as these definitions remained the same. Taxpayers are not required to file an application to receive the first $150,000 of assessed value at the residential assessment limitation rate. Lawmakers believe the new standing general fund will exceed the projected level of claims for fiscal years 2024 through 2029. Then in fiscal year 2030, the local government reimbursement claims will begin being prorated. The projected backfill for Dubuque for the two-tier assessment limitation in Fiscal Year 2024 is estimated to be $587,446. Page 62 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 37 IMPACT ON MULTI -RESIDENTIAL PROPERTY - EXAMPLE ACTUAL — HISTORICAIW CITY TAX DOLLAR PERCENT CALCULATION $2,349.34 CHANGE CHANGE FY 2015 "City" Property Tax FY 2016 "City" Property Tax $2,225.69 -$123.65 -5.26% FY 2017 "City" Property Tax $2,160.39 -$65.30 -2.93% FY 2018 "City" Property Tax $2,015.48 -$144.91 -6.71 % FY 2019 "City" Property Tax $1,870.21 -$145.27 -7.21 % FY 2020 "City" Property Tax $1,737.92 -$132.29 -7.07% FY 2021 "City" Property Tax $1,896.65 +$158.73 +9.13% FY 2022 "City" Property Tax $1,751.66 -$144.99 -7.64% FY 2023 "City" Property Tax $1,625.55 -$126.11 -7.20% FY 2024 "City" Property Tax $1,419.97 Average FY 2016-FY 2024 -$205.58 -12.65% -$103.26 -5.28% Beginning in FY 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 3 or more units. Rental properties of 2 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 occur as follows: Fiscal Year FY 2017 Rollback % 86.25% Annual Revenue $331,239 FY 2018 82.50% $472,127 FY 2019 78.75% $576,503 FY 2020 75.00% $691,640 FY 2021 71.25% $952,888 FY 2022 67.50% $752,366 FY 2023 63.75% $662,821 FY 2024 54.65% $1,186,077 Total $5,625,661 This annual loss in tax revenue of $1,186,077 from multi -residential property when fully implemented in FY 2024 will not be backfilled by the State. From Fiscal Year 2017 through Fiscal Year 2024 the City will lose $5,625,661 in total, meaning landlords will have paid that much less in property taxes. The state did not require landlords to charge lower rents or to make additional investment in their property. In Fiscal Year 2024, the multi -residential property class was eliminated and is reported with the residential property class. Page 63 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 38 HISTORY OF INCREASES IN PROPERTY TAX ASKINGS ChangeYear Tax Askings % Impact in Tax Askings Homeowner" FY 1989 1 $10,918,759-12.00%-11.407/o Sales Tax Initiated FY 1990 $10,895,321 -0.21 % -0.89% FY 1991 $11,553,468 +6.04% +3.77% FY 1992 $12,249,056 +6.02% +3.58% FY 1993 $12,846,296 +4.88% +5.19% FY 1994 $13,300,756 +3.54% +0.33% FY 1995 $13,715,850 +3.12% +2.40% FY 1996 $14,076,320 +2.63% -0.87% FY 1997 $14,418,735 +2.43% -0.42% FY 1998 $14,837,670 +2.91 % -0.71 % FY 1999 $15,332,806 +3.34% 0.00% FY 2000 $15,285,754 -0.31 % -0.17% FY 2001 $15,574,467 +1.89% 0.00% FY 2002 $15,686,579 +0.72% 0.00% FY 2003 $15,771,203 +0.54% -5.00% FY 2004 $16,171,540 +2.54% 0.00% FY 2005 $16,372,735 +1.24% +0.03% FY 2006 $16,192,215 -1.10% +1.72% FY 2007 $17,179,994 +6.10% -1.72% FY 2008 $18,184,037 +5.84% 0.00% FY 2009 $18,736,759 +3.04% +2.76% FY 2010 $19,095,444 +1.91 % 0.00% FY 2011 $19,878,962 +4.10% +2.47% FY 2012 $21,284,751 +7.07% +5.00% FY 2013 $22,758,753 +6.93% +5.00% FY 2014 $23,197,623 +1.93% +4.90% FY 2015 $24,825,015 +7.02% +3.23% FY 2016 $24,906,544 +0.33% +2.63% FY 2017 $26,375,291 +5.90% +1.08% FY 2018 $25,863,049 -1.94% 0.00% FY 2019 $26,494,205 +2.44% +1.91 % FY 2020 $26,296,081 -0.75% 0.00% FY 2021 $26,202,568 -0.36% -0.14% FY 2022 $26,215,401 +0.05% 0.00% FY 2023 $26,215,887 0.00% +2.96% FY 2024 $26,633,490 +1.59% +2.94% FY 2025 $28,233,757 +6.01 % +5.00% Average FY 1989-2025 +2.71 % +0.96% ""Does not reflect State unfunded portion of Homestead Credit. Page 64 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 39 IMPACT ON TAX ASKINGS AND AVERAGE RESIDENTIAL PROPERTY To maintain the current level of service based on the previous assumptions would require the following property tax asking increases: Fiscal lYear FY 2025 "City" Property Tax Askings $28,233,757 % Changein Tax Askings Residential % Impact on Avg. Property Residential $ Impact on Avg. Property FY 2026 $29,861,901 +5.77% +3.90% +$33.38 FY 2027 $32,012,535 +7.20% +5.15% +$45.82 FY 2028 $34,032,053 +6.31 % +4.24% +$39.60 FY 2029 $35,061,756 1 +3.03% +1.01 % +$9.83 FY 2030 $36,687,113 1 +4.64% +2.61 % +$25.67 11 IMM iNE The recommended guideline is a 3.90% or $33.38 increase for the average residential property owner assuming the Homestead Property Tax Credit is fully funded. A one percent increase in the tax rate will generate approximately $294,092. These guidelines include an estimated $840,315 for improvement packages funded by property taxes . This amount is subject to change due to not having the final FY 2026 wage tables to calculate employee expense. Iowa House File 718 passed during the 2023 legislative sessions, replaces previous changes made through Iowa Senate File 634 passed during the 2019 legislative sessions, makes changes to Iowa city and county budgets and taxes for Fiscal Year 2025 and later. Additional steps have been added to the budget approval process. The City of Dubuque is specifically impacted by the following steps of this new legislation: 1. Limits the General Fund levy by constraining growth by 2% or 3% each year, depending on the trigger hit: Non-TIF taxable growth under 3%, no reduction Non-TIF taxable growth over 3% but less than 6%, 2% reduction factor applied Non-TIF taxable growth over 6%, 3% reduction factor is applied The City of Dubuque Non-TIF taxable growth for FY2026 is 4.39%, the General Fund levy is constrained by a growth reduction factor of 2%. The General Fund levy for FY2026 is $7.78547 instead of the maximum levy of $8.10. Although the City is restricted to $7.78547 in the General Fund levy, the City has the flexibility to levy up to $15.6 million or a levy rate of $5.2648 in the Special Revenue Levies for employee benefits. In Fiscal Year 2025, the Page 65 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 40 Special Revenue levy was $0.70307 and totaled $2.0 million. Any reduction in the General Fund levy can be shifted to the Special Revenue levies. 2. March 5: Cities must file a report with Iowa Department of Management containing information specified by new law to be contained in mailings. 3. March 20: County Auditor must send each property owner or taxpayer with the county by regular mail an individual statement with the specified information broken out by political subdivision comprising the taxpayer's district. 4. Taxpayer Statements must include: • Total Current Year Tax Rate and Dollars • Combined effective property tax rate for the city calculated using the sum of the current fiscal year's actual property tax certified for levy of all of city's levies • Proposed Budget Year Tax Rate and Dollars • If the Proposed Budget Property Tax Dollars exceed the current fiscal year's actual property tax dollars, a detailed statement of the major reasons for the increase, including the specific purposes or programs for which the city is proposing an increase • An example comparing the amount of property taxes on a residential property with an actual value of $100,000 in the current fiscal year and such amount on the residential property using the proposed property tax dollars for the budget year, including the percentage difference in such amounts. • An example comparing the amount of property taxes on a commercial property with an actual value of $100,000 in the current fiscal year and such amount on the commercial property using the proposed property tax dollars for the budget year, including the percentage difference in such amounts. • The city's percentage of total property taxes certified for levy in the owner's or taxpayer's taxing district in the current fiscal year amount all taxing authorities. • The date, time, and location of the city's public hearing on the information contained in the statements. • Information on how to access the city's internet site, the city's statements, and other budget documents for prior fiscal years. 5. Public hearing on proposed property tax amounts for the budget year and new taxpayer statements. • In addition to public hearing to adopt the budget. • Replaces maximum property tax dollars public hearing held in prior years. • Must be separate from any other meeting of City Council, including any other meeting or hearing related to the budget. Page 66 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 41 City Council can decrease, but not increase, the proposed property tax amount to be included in the budget. 6. Budget Certification deadline to Iowa Department of Management is April 30th instead of March 31st. • If City is issuing new debt that uses the debt service levy, budget must be adopted by April 15th. Page 67 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 42 CAPITAL IMPROVEMENT BUDGET GUIDELINES U. INTEGRATION OF CAPITAL RESOURCES GUIDELINE I To obtain maximum utilization, coordination and impact of all capital improvement resources available to the City, state and federal block and categorical capital grants and funds shall be integrated into a comprehensive five-year Capital Improvement Program (CIP) for the City of Dubuque. V. INTEGRITY OF CIP PROCESS GUIDELINE The City shall make all capital improvements in accordance with an adopted Capital Improvement Program (CIP). If conditions change and projects must be added and/or removed from the CIP, the changes require approval by the City Council. W. RENOVATION AND MAINTENANCE GUIDELINE Capital improvement expenditures should concentrate on renovating and maintaining existing facilities to preserve prior community investment. X. NEW CAPITAL FACILITIES GUIDELINE Construction of new or expanded facilities which would result in new or substantially increased operating costs will be considered only if: 1) their necessity has been clearly demonstrated 2) their operating cost estimates and plans for providing those operating costs have been developed 3) they can be financed in the long term; and 4) they can be coordinated and supported within the entire system. Y. COOPERATIVE PROJECTS GUIDELINE Increased efforts should be undertaken to enter mutually beneficial cooperative capital improvement projects with the county, school district and private groups. Examples include cost -sharing to develop joint -use facilities and cost -sharing to improve roads and bridges are examples. Page 68 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 43 Z. USE OF GENERAL OBLIGATION BONDS DISCUSSION The Iowa Constitution limits the General Obligation debt of any city to 5% of the actual value of the taxable property within the city. The Iowa legislature has determined that the value for calculating the debt limit shall be the actual value of the taxable property prior to any "rollback" mandated by state statute. On October 15, 2012, the City Council adopted a formal Debt Management Policy for the City of Dubuque. Prior to adoption of the formal policy, the City had already been practicing much of the policy, although the formal policy included some new additions. The most significant components of the Debt Management Policy include an internal policy of maintaining the City's general obligation outstanding debt at no more than 95% (except as a result of disasters) of the limit prescribed by the State constitution as of June 30th of each year. It is projected as of June 30, 2025 the City will be at 33.25%. City will not use short-term borrowing to finance operating needs except in the case of an extreme financial emergency which is beyond its control or reasonable ability to forecast. Currently there is no such debt, and none will be recommended in this process. Bond Financing Stipulations • Recognizing that bond issuance costs (bond counsel, bond rating, and financial management fees) add to the total interest costs of financing: • Bond financing should not be used if the aggregate cost of projects to be financed by the bond issue is less than $500,000 • City will consider long-term financing for the construction, acquisition, maintenance, replacement, or expansion of physical assets (including land) only if they have a useful life of at least six years • City shall strive to repay 20 percent of the principal amount of its general obligation debt within five years and at least 40 percent within ten years. • The City shall strive to repay 40 percent of the principal amount of its revenue debt within ten years. Debt Service Payments Total annual debt service payments on all outstanding debt of the City shall not exceed 25% of total annual receipts across all the City's funds. As of June 30, 2025, it is projected the City will be at 15%. Internal Reserve It shall be the goal of the City to establish an internal reserve equal to maximum annual debt service on future general obligation bonds issued that are to be abated by revenues and not paid from ad -valorem property taxes in the debt service fund. This shall begin with debt issued after July 1, 2013. This reserve shall be established by the fund or revenue source that expects to abate the levy, and shall be carried in said fund or revenue source on the balance sheet as a restricted reserve. This reserve does not Page 69 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 44 exist now, except where required by bond covenants. This internal reserve would be implemented by adding the cost of the reserve to each debt issuance. In January 2025, Moody's Investor Services affirmed the Aa2 credit rating on general obligation bonds. Moody's credit analysis states, "the City of Dubuque's local economy benefits from its role as a regional economic center, with solid resident income and full value per capita. Financial operations are strong and will remain so despite declines in fund balance over the next few years, as it expends funds from the pandemic. Long-term liabilities and fixed cost ratios are moderate and will remain so despite future borrowing needs." According to Moody's, the Aa2 issuer rating for the City of Dubuque's bonds reflects the city's healthy economic base, which serves as a regional economic center. Other rationale stated for the rating include full value per capita and adjusted resident income are solid at around $109,000 and 98% respectively, though weaker than Aa peers, in part because of a large student population, available fund balance was strong at around 60% of revenue at the close of fiscal 2023 (year-end June 30), and cash was stronger at 85% of revenue. The City's available fund balance will likely remain well over 45%, despite some planned draws in fiscal 2024 and fiscal 2025 to spend down federal funds from the pandemic. Despite the state adopting new property tax restrictions, revenue raising flexibility remains strong because the City maintains significant margin in its employee benefits fund and is not utilizing its emergency levy. The long-term liabilities ratio will likely remain well under 300% inclusive of the current issuances and future borrowing plans, and fixed - costs ratio will remain well below 20%. In July 2023, Moody's Investor Service upgraded the City's outstanding general obligation bonds from Aa3 to Aa2, as well as the outstanding Sales Tax Increment Revenue bonds from A2 to Al. Notable credit factors include strong financial operations and ample revenue -raising flexibility, which has resulted in steadily improved available fund balance and cash. The City serves as a regional economic center and its regional economic growth rate has outpaced the nation over the past five years. In November of 2022, Moody's Investors Service ("Moodys") released a new rating methodology for cities and counties. Two significant changes result from the new methodology; cities are now assigned an issuer rating meant to convey the creditworthiness of the issuer as a whole without regard to a specific borrowing, and business -type enterprise funds are now being considered together with general fund revenues and balances in the determination of financial performance. Under the new methodology, there are two metrics that contribute to financial performance. Available Fund Balance Ratio ("AFBR") _ (Available Fund Balance + Net Current Assets/Revenue) and Liquidity Ratio ("LR") _ (Unrestricted Cash/Revenue). For Aa credits, AFBR ranges from 25-35, and LR ranges from 30-40%. The City was evaluated by Moody's under the old methodology in May of 2022 in connection to its annual issuance of bonds. At that time, Moody's calculated the City's AFBR to be 45.2%, and its LR to be 59.8%. The balances used in these calculations Page 70 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 45 were likely elevated due to unspent ARPA funds. The change in methodology will now consider revenues and net assets from business -type activities in these calculations. As such, the City's general obligation rating will now be directly impacted by the financial performance of enterprise funds. Establishing rates and charges adequate to provide both debt service coverage and significant liquidity will be necessary to maintain the City's ratings. In May 2021, Moody's Investor Service upgraded the City's Water Enterprise's outstanding revenue bonds from Al to A2 and affirmed the Aa3 credit rating on general obligation bonds. Notable credit factors include a sizable tax base, a wealth and income profile that is slightly below similarly rated peers, and increased financial position that will decline in fiscal years 2021 and 2022 and somewhat elevated debt and pension liabilities. General Obligation Debt Fiscal Year 2025 Debt FY 2025 Debt Limit: The FY 2023 assessable value of the community for calculating the statutory debt limit is $6,438,522,409, which at 5%, indicates a total General Obligation debt capacity of $330,102,176. Based on Outstanding G.O. debt (including tax increment debt, remaining payments on economic development TIF rebates, and general fund lease agreement) on June 30, 2025 will be $109,764,274 (33.25% of the statutory debt limit) leaving an available debt capacity of $220,337,903 (66.75%). It should be noted that most of the City of Dubuque's outstanding debt is not paid for with property taxes (except TIF), but is abated from other revenues. Exceptions include one issuance for the replacement of a Fire Pumper truck in the amount of $1,410,000 with debt service of $83,700 in FY 2025 and one issuance for the franchise fee litigation settlement in the amount of $2,800,000 with debt service of $145,000 in FY 2025. Included in the debt is $2,664,171 of property tax rebates to businesses creating and retaining jobs and investing in their businesses. Statutory Debt Limit Page 71 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 46 FY25 Statutory Debt Limit Used (as of June 30th) 100%90% o 87 /o 0 82 °79% 79% 870 72% 74%70% 75% 6% ° 66%66%62% 60 /o 53% 50/o 0 47%44%43% ° /o 36 /029%33%33%30%30%32 0 0 28 /0 250/(023o 0 /021%19% 25 /o TI TI TI T TI TI TI TI TI T TI TI TI TI TI TI TI TI TI TI N N N N N N N N N N W W W W W Cll M V 00 to co j N W 4�6 G7 0) V 00 W O N W FY16 Adopted f FY25 Revised The City also has debt that is not subject to the statutory debt limit. This debt includes revenue bonds. Outstanding revenue bonds payable by water, sewer and stormwater fees on June 30, 2025 will have a balance of $121,314,363. The total City indebtedness as of June 30, 2025, is projected to be $245,704,207. The total City indebtedness as of June 30, 2024, was $222,540,780. In FY 2025, the City will have a projected $23,163,427 or 10.41% more in debt. The City is using debt to accomplish necessary projects and to take advantage of the attractive interest rates in the current market. The following chart shows Dubuque's relative position pertaining to use of the statutory debt limit for Fiscal Year 2025 compared to the other cities in Iowa for Fiscal Year 2024 with a population over 50,000: Page 72 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 47 Fiscal Year 2024 Legal Debt Limit Comparison for Eleven Largest Iowa Cities Rank City Legal Debt Limit (5%) Statutory Debt Outstanding Percentage of Legal Debt Limit Utilized 11 Des Moines (FY24) $ 803,564,354 $ 549,760,000 68.42 % 10 Waterloo (FY24) $ 221,546,701 $ 138,428,824 62.48 % 9 Cedar Rapids (FY 24) $ 681,383,619 $ 396,830,000 58.24 % 8 W. Des Moines (FY24) $ 551,635,692 $ 307,090,000 55.67 % 7 Davenport (FY24) $ 423,816,425 $ 200,540,000 47.32 % 6 Sioux City (FY24) $ 309,734,920 $ 144,929,999 46.79 % 5 Dubuque (FY25) $ 330,102,176 $ 109,764,274 33.25 % 4 j Ames (FY24) $ 277,278,426 $ 67,035,000 24.18 % 3 Ankeny (FY24) $ 416,454,919 $ 100,260,000 24.07 % 2 Council Bluffs (FY24) $ 365,780,288 $ 75,240,467 20.57 % 1 Iowa City (FY24) $ 368,416,450 $ 62,905,000 17.07 Average w/o Dubuque $ 441,961,179 $ 204,301,929 42.48 Percent of Legal Debt Limit Utilized 80% 68.42 62.48% 60% 55.67% 58.24 46.79% 47.32 42.48% 0 ° 33.25% 24.07% 24.18% 20.57% 20% 17.07% 11 N 0% \o�a�� G\0\�5 P��e�� P�eS �Q�e ��e o��G�� ,e�Qo �o\�e5 �a�`d� �oo e5 G°�� O p 5\ 01' �e5 Gedac lea De5 set0 P Dubuque ranks as the fifth lowest of the use of statutory debt limit of the 11 cities in Iowa with a population over 50,000. The average of the other cities (42.48%) is 27.8% higher than Dubuque (33.25%). Page 73 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 48 $324 $297 $270 0 $243 $216 $189 FY25 Total Debt (In Millions) �302.3 FYI FYI FYI FYI FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY16 Adopted --W— FY25 Revised By the end of the Fiscal Year 2025 5-Year Capital Improvement Program (CIP) budget the total amount of debt for the City of Dubuque would be $274.1 million (32% of the statutory debt limit) and the projection is to be at 211.6 million (19% of statutory debt limit) within 10 years. Part of the City's FY 2014 debt was in the form of a grant from the Iowa Flood Mitigation Program. Through a new state program, the City is able to issue $28.25 million in revenue bonds payable from the 5 percent State Sales Tax increment for projects in the Bee Branch Watershed allowing the City to complete the Bee Branch Creek Restoration, construct permeable alleys, replace the Bee Branch flood gates, complete North End Storm Sewers, construct a Flood Control Maintenance Facility, install Water Plant Flood Control and complete 17`h Street Storm Sewer over the next twenty years. The FY 2026-2030 Capital Improvement Program is currently being reviewed and balanced, so the FY25 debt projections have been revised based on actual and planned debt in FY25. As we approach the preparation of the FY 2026-2030 Capital Improvement Program (CIP) the challenge is not the City's capacity to borrow money but (a) how to identify, limit, and prioritize projects which justify the interest payments and; (b) how to balance high -priority projects against their impact on the property tax rate. Page 74 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 49 UuiucLINE There are many high priority capital improvement projects which must be constructed during the FY 2026 - FY 2030 period. The potential of partially forgivable State Revolving Fund Loans and an increase in grant funding may impact the need to borrow for projects. As in the past, debt will be required on several major capital projects, including the Bee Branch Watershed Project, Airport Improvements, Park Improvements, Sidewalk and Street Improvements, Sanitary Sewer Fund, Parking Fund, and Water Fund. Borrowings will also include smaller projects and equipment replacements such as Park developments and Public Works equipment. These smaller borrowings will be for a term not exceeding the life of the asset and not less than six years in accordance to the Debt Management Policy. Alternative sources of funds will always be evaluated (i.e. State Revolving Loan Funds) to maintain the lowest debt service cost. AA. ROAD USE TAX FUND DISCUSSION Actual Road Use Tax Fund receipts are as follows: Road Use Tax (In Millions) FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 $6.0 $7.1 1$7.2 $7.3 $7.5 $7.4 $8.2 $8.2 FY 2024 $8.4 $1.0 $2. $3.0 $4.t $5.0 $6.0 $8.0 $9.r' The FY 2025 budget was based on receiving $8,400,000 in Road Use Tax funds. In FY 2025, 100% of the Road Use Tax income is in the operating budget. The State of Iowa increased the gas tax 10 cents per gallon in FY 2016. With increases in City DMATS and State Road Use Tax funds, the City will be able to substantially add to the number of street lights and continue with major road improvements. Page 75 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 50 GUIDELINE It is preferable to shift Road Use Tax funds to the capital budget for street maintenance and repair to reduce the need to borrow funds for routine street maintenance and improvements. This shift cannot occur until there are increased revenues or reduced expense that would allow this shift without a property tax impact. 136. COMMERCIAL AND INDUSTRIAL DEVELOPMENT GUIDELINE Current City, commercial and industrial development efforts should be continued to (a) preserve current jobs and create new job opportunities and (b) enlarge and diversify the economic base. Financing these efforts and programs should continue to be a high priority. CC. HOUSING GUIDELINE To maintain an adequate supply of safe and decent housing, the City should strive to preserve existing single family and rental housing that is not substandard and provide opportunities for development of new housing, including owner occupied, within the City's corporate limits for all residents, particularly for people of low and moderate income. Workforce rental housing is becoming increasingly important and the City provides incentives for building rehabilitations. In 2023, the City Council adopted housing incentive programs through the use of Tax Abatement and Tax Increment Financing. DD. SALES TAX GUIDELINE Sales Tax revenue shall be used according to the following split: Sales Tax 50%: Property Tax Relief Sales Tax 30%: (a) The reduction by at least 75% of street special assessments. 3M (b) The maintenance and repair of streets. Sales Tax 20%: (a) The upkeep of City -owned property such as sidewalks, steps, storm 20% sewers, walls, curbs, traffic signals and signs, bridges, buildings, and facilities (e.g. Airport, Five Flags Center, Library, Law Enforcement Center, City Hall, Fire Stations, Parks, and Swimming Pools). (b) Transit equipment, such as buses (c) Riverfront and wetland development (d) Economic Development Projects Page 76 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 51 EE. NET CASH PROCEEDS (SURPLUS DISTRIBUTION) FROM THE DUBUQUE RACING ASSOCIATION DISCUSSION The contract with the Dubuque Racing Association calls for distribution at the end of its fiscal year, December 31St, of 50 percent of its net cash operating funds to the City of Dubuque. In early -February, the City receives payment of proceeds to be distributed. These proceeds are then allocated for capital improvements, with the highest priority given to reducing the City's annual borrowing. The Dubuque Racing Association provides the City with projections of future distributions. Since gaming is a highly volatile industry, the estimates are discounted prior to including them in the City's Five -Year CIP. The February 2026 DRA distributions will be used in Fiscal Year 2026 to fund the implementation of the classification and compensation study and non -recurring improvement packages. This is a change from past use of DRA distributions because all funds will be used for Fiscal Year 2026 operations. A change from past use of DRA distributions, 0% of the February 2026 projections of operating surplus have been anticipated as resources to support the Fiscal Year 2026 capital improvement projects. The estimates received from the DRA will be reduced by 5 percent for FY 2028 resources, 10 percent for FY 2029, and 15 percent for FY 2030 resources, to provide a margin of error in case the estimates are not realized. uLJIDELINE $1,258,831 of February 2026 DRA distributions will be used for FY2026 non -recurring improvement packages and implementation of the classification and compensation study. This is a change from past use of DRA distributions because all funds will be used for Fiscal Year 2026 operations.ln Fiscal Year 2026 and beyond, the City anticipates distribution of a significant amount of net cash proceeds for use in the Capital Improvement Program. These amounts will be budgeted in the Five -Year CIP in the year they are received and will be used to reduce required General Obligation borrowing. The three out -years will be discounted by 5 percent, 10 percent, and 15 percent respectively. Page 77 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 52 FF. EMPHASIS ON INITIATIVES THAT REDUCE FUTURE OPERATING BUDGET EXPENSE GUIULLINt Capital improvement expenditures that will reduce future maintenance and operating expense will receive priority funding and these types of initiatives will be encouraged in all departments and funding sources as a means of maximizing the use of available resources. This emphasis reflects fiscally responsible long-range planning efforts. GG. USE OF GAMING -RELATED RECEIPTS DISCUSSION On December 14, 2021, an amended lease took effect with the Dubuque Racing Association for lease of the Q Casino. This lease amendment raised the lease payment from 1 % of coin -in to 1.5% of coin-in.The amendment increased the amount retained by the DRA for the operating budget reserve from 5% to 10%. The lease amendment eliminates the $10,000 per month DRA payment to the Depreciation and Improvement Fund for facility maintenance. In addition, In addition, the distribution of net profit is now split three ways between the City, charities, and the Schmitt Island Master Plan Implementation from a two-way split between the City and charities. The amended lease has an expiration date of December 31, 2055. The following shows the historical split of DRA gaming taxes and rents between the City's operating and capital budgets: Split of DRA Gaming Taxes & Rents Between Operating & Capital Budgets 100% 50%25%24%15%14%10% 3% —% 1% 3% 4% 4%—% —% —% —% —% —% —% —% —% —% 75% - A ' N E ° 50 /o - O o O o o 0 O O O O O O O O O O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0) 0: o —0) M - cc �: co 0 0 0 0 0 0 0 0 0 0 r r T r r r T r r r OC LO Lo O �A ^ ^� MM M MGM * * T�F �� T ,� A T V �� Operating Capital Page 78 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 53 Notable Changes: FY 2004 A new lease took effect with the Dubuque Racing Association for lease of the Dubuque Greyhound Park and Casino. This new lease was negotiated after the FY 2005 budget was approved and raised the lease payment from '/2% of coin -in to 1 % of coin -in. This new lease and the expansion of gaming at Dubuque Greyhound Park and Casino, from 600 gaming positions to 1,000 gaming positions, effective August 1, 2005, provided additional revenues to the City of Dubuque. FY 2009 The Diamond Jo expanded to a land -based barge casino facility and increased to 1,100 slots on December 1, 2008. This expansion was projected to decrease the Q gaming market and correspondingly the coin -in by just over 21 percent. Based on the projected market share loss, the City did not receive a distribution of cash flows from the Dubuque Racing Association (DRA) in Fiscal Years 2009 and 2010. FY 2010 The operating portion of the split now includes the debt service required on the 2002 general obligation bonds for the America's River Project that was previously considered as part of the capital portion of the DRA lease. Debt obligations are considered a continuing annual expense and are more accurately reflected as part of the operating portion of the DRA lease. FY 2011 DRA distributions restarted in FY 2011 instead of the projected year of FY 2012. FY 2016 A reduction in revenue in the Greater Downtown TIF urban renewal area resulted in reduced revenues to make debt payments and it was necessary for the general fund to support $84,104 in FY 2015 and $78,242 in FY 2016 of debt service payments, which were funded by reducing the amount of gaming revenues from taxes and DRA lease that goes to capital recommended in FY 2016. FY 2021 A lease amendment took effect with the Dubuque Racing Association for the lease of the Q Casino. This lease amendment added a payment equal to'/2% of monthly sports wagering conducted on Q Sportsbook retail or Q advance deposit sports wagering internet site. FY 2022 A lease amendment took effect with the Dubuque Racing Association for lease of the Q Casino. This lease amendment raised the lease payment from 1 % of coin -in to 1.5% of coin-in.The amendment increased the amount retained by the DRA for the operating budget reserve from 5% to 10%. The lease amendment eliminates the $10,000 per month DRA payment to the Depreciation and Improvement Fund for facility maintenance. In addition, the amended lease has an expiration date of December 31, 2036. FY 2023 A lease amendment took effect with the Dubuque Racing Association for lease of the Q Casino. This lease amendment extended the termination date from 2036 to 2055. The amendment allows $1.5 million of cash reserve fund as a down payment of a construction loan in FY23. Page 79 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 54 The change in market share and changes in the lease agreement impacts the City's lease payment from the DRA. The new lease effective 1/1/22 requires the DRA to pay the City 1.5 percent of coin in from slot machines, 4.8 percent of gross revenue from table games, and 0.5 percent of sports wagering. In calendar year 2024, the DRA saw a decline of -4.85% in gross gaming revenues, while Diamond Jo experienced a slight increase of +1.61 % compared to 2023. The Dubuque market in 2024 was approximately $122.6 million annually, showing a decrease of -0.8% from the $123.6 million market in 2023. This decline was expected due to construction disruptions throughout the year. The DRA's gross gaming revenue was significantly impacted by redevelopment work on the property, which continued throughout the year. Additionally, the main highway leading to our facility was closed for extended repairs. An exit ramp that was initially scheduled for a brief closure ended up being closed for several months, further affecting traffic and access. Despite these challenges, the DRA saw growth in other areas in 2023, including food and beverage sales, as well as new revenue from the opening of the Island Social (Family Entertainment Center) and the new banquet event space. However, total gross revenue for the DRA in 2024 was down -4.2% compared to 2023. Looking ahead, the DRA has projected an increase of +11 % in gross gaming revenue and +12% in total gross revenue for calendar year 2025. This growth is primarily attributed to the ongoing redevelopment efforts. Over the next five years, the DRA expects gaming revenue growth rates of +3.4% in FY 2026, +3.3% in FY 2027, a decline of -2.0% in FY 2028, and +2.1 % in FY 2029. Total gross revenue projections include a +13% increase in FY 2026, +4% in FY 2027, a decline of -0.4% in FY 2028, and +2.5% in FY 2029. The expected growth in FY 2026 will be supported by the opening of the Key Hotel and rooftop restaurant. In February 2025, the IRGC granted a casino license to Linn County (Cedar Rapids). Our five-year budget forecast indicates that the Linn County casino will become operational in calendar year 2027/2028. Illinois passed legislation in 2019 allowing six additional casinos, sports betting, and increased Video Lottery Terminals (VLTs) throughout the state. The closest casino to our market is in Rockford. The Rockford City Council voted on October 7, 2019, to approve the Hard Rock Casino as the city's choice. On November 10, 2021, Hard Rock opened its temporary casino with 635 slot machines and Electronic Table Games. The permanent Hard Rock Casino in Rockford opened on August 29, 2024, featuring 1,300 slots and live table games. The 250-room hotel is projected to open in late 2025. Additionally, the Ho -Chunk Nation plans to construct a $405 million casino and hotel resort in Beloit, Wisconsin, in two stages. The casino is scheduled for completion by June 2026, with the 18-story, 312-room hotel and 75,000-square-foot conference center slated for completion in 2027. Page 80 of 99 FY 2026 Budget & Fiscal Policy Guidelines Page 55 The 500 per patron tax previously received from the Diamond Jo was replaced by a $500,000 fixed payment based on their revised parking agreement which expires June 16, 2029. Page 81 of 99 SUMMARY OF ALL IMPROVEMENT PACKAGES FISCAL YEAR 2026 Department Description Recurring/Non- ADDL ADDL Net Tax Recurrina ExDense Revenue Impact RECURRING DECISION PACKAGE COSTS - General Fund Airport Convert two Part-time 1.5 FTE NA-44 Customer Service Representative positions to one full- R $ (458) $ (458) time FTE 1.0 G-25C Administrative Support Professional position Airport Additional costs for general advertising; currently entire advertising budget is for the State of R $ 10,000 $ 10,000 Iowa Service Grant Airport Purchase of an airfield deice brining system. This portion is costs savings. Also includes a non- R $ (6,500) $ (6,500) recurring portion City Attorney Creating Assistant Attorney I position (1.00 FTE, GE-37). Also includes a non -recurring portion R $ 131,484 $101,322 $ 30,162 of technology City Manager's Office Professional development for Employee Resource Groups, including speakers or conferences, R $ 15,000 $ 11,559 $ 3,441 City Manager's Office Professional development for the City Manager's Office Administrative Assistants (two R $ 6,000 $ 4,624 $ 1,376 positions). If approved, this package would allow each Administrative Assistant to travel to one annual training event City Manager's Office Upgrade Director of Strategic Partnerships from 0.75 FTE (GE-44) to 1.00 FTE (GE-44), This R $ — $ — $ — would be an increase of 0.25 FTE Combine two current positions --the Grant Analyst position (1.00 FTE, GE-27) and the ICMA Management Fellow position (1.00 FTE, GE-29)--into one new position, which would be the Management/Grant Analyst (1.00 FTE, GE-29). This would be a decrease of 1.00 FTE In total, this would be a net decrease of 0.75 FTE. In addition, the net cost is $0 Cost of new position structure: $300,524 Less cost of old position structure: $285,353 Less other CMO funding identified to fill the gap (education and travel/conferences): $15,171 Communications Office ArcGIS Indoor Maps software to model indoor spaces. Software needed to begin projects, R $ 18,500 $ 12,715 $ 5,785 including an existing CIP Communications Office Addition of 1.00 FTE (GE-33) GIS Developer to the GIS (Geographic Information System) R $ 103,188 $ 70,920 $ 32,268 Office. Also has a non -recurring component for technology (computer, etc.) Communications Office Addition of 1.00 FTE (GE-30) GIS Applications Specialist to the GIS (Geographic Information R $ 89,993 $ 61,851 $ 28,142 System) Office. Also has a non -recurring component for technology (computer, etc.) Communications Office Subscription to ArcGIS Hub Premium software R $ 8,000 $ 5,498 $ 2,502 Communications Office Addition of a 1.00 FTE (GE-30) GIS Data Analyst to the GIS (Geographic Information System) R $ 89,993 $ 61,851 $ 28,142 Office Page 1 of 13 Page 82 of 99 SUMMARY OF ALL IMPROVEMENT PACKAGES FISCAL YEAR 2026 :Net Department Description Recurring/Non- ADDL ADDL TaxRecurrin Ex ense Revenue act Communications Office This improvement package request is for a online form solution to accept electronic form R $ 15,000 $ 15,000 submittals for grant and assistance applications, some licenses and permits, resident feedback, and more through the City website. Also includes a non recurring portion of $5,000 for one time implementation fees Communications Office This improvement package request is integrate an artificial intelligence (AI) -based chat solution R $ 16,650 $ 16,650 into the City website to offer the option of automated customer service. This service would provide smart text messaging, web chat, and interactive text alerts for residents and stakeholders. Also includes a non -recurring portion of $7990 for implementation Communications Office This improvement package request is integrate an artificial intelligence (AI) -based chat solution R $ 16,650 $ 16,650 into the City website to offer the option of automated customer service. This service would provide smart text messaging, web chat, and interactive text alerts for residents and stakeholders. Also contains a non -recurring portion for implementation costs Community Impact Establishes the first program in the Equitable Fine and Fee initiative by providing the resources R $ 30,000 $ 30,000 to launch the Community Impact Service Program, will focus on utility billing fines and fees, allow customers to preform service in lieu of financial payment for utility bills Community Impact Increasing the City's funding for salary and benefits for the Community Impact Full -Time R $ 26,497 $ 26,497 Administrative Assistant position (increase of 0.37 FTE). The position currently exists as a full time position (1.00 FTE, GE-25). This position was partially funded by a grant that is no longer available due to no fault of the City Community Impact Create a new part time AmeriCorps Program Supervisor position (0.75 FTE, GE-25). This R $ 39,166 $ 39,166 position will work directly with other host site supervisors to help strengthen relationships with community partners to ensure proper compliance and support is provided to our members in relation to the AmeriCorps Grant. Economic Development Addition of an Economic Development Financial and Project Specialist 1.00 FTE GE-31. R $ 86,215 $ 64,661 $ 21,554 Includes a non -recurring portion for technology Economic Development Addition of an Economic Development Project Coordinator 1.00 FTE GE-30. Includes a non- R $ 82,486 $ 82,486 recurring portion for technology Economic Development An increase in the stipend paid to artists who are chosen to display sculptures on the riverfront. R $ 2,200 $ 2,200 Raising the stipend will directly affect the ability of artists to secure materials, resulting in an increased number of diverse and minority artist participants. Economic Development Purchase of additional printing costs for the Art on the River brochures and translation services. R $ 1,454 $ 1,454 This includes translation from English to Spanish and Marshallese for both the brochures as well as the Otocast recordings with the intent to be more inclusive of Dubuque's diverse population Emergency Remove two vacant part-time Dispatcher positions (0.47 FTE each for a total of 0.94 FTE, OE- R $ 16,142 $ 8,071 $ 8,071 Communications 15) and replace them with a full-time Dispatcher position 1.00 FTE, OE-15 . Page 2 of 13 Page 83 of 99 SUMMARY OF ALL IMPROVEMENT PACKAGES 2026 Description Recurring/Non- ADDL ADDL Net Tax FISCAL YEAR Department Recurrina Ex ense Revenue Impact Emergency Purchase a paid version of a program called Prepared Assist - Unlimited, which would include R $ 25,350 $ 25,350 Communications features like two way text for dispatchers, the ability to received live video and pictures, and live auditor translation in 19 languages and texting translation in 140 languages. Includes recurring cost of $25,350 and non -recurring cost of $5,000 for one time implementation Engineering Creation of a 0.73 FTE sidewalk inspector position R $ 52,575 Engineering Funding to allow the Engineering Department to serve as a host site for an AmeriCorps member R $ 15,000 $ 15,000 through the AmeriCorps program administered by the City of Dubuque. The Engineering department has hosted an AmeriCorps member in the past, but a dedicated budget has not existed for it Engineering Fund request from East Central Intergovernmental Association (ECIA) for an additional $20,000 R $ 20,000 $ 20,000 in local match funding for STREETS project. These matching planning funds are utilized to aid the engineering department with special projects and grants. Finance A bilingual, self-service payment kiosk providing residents with an around the clock bill payment R $ 8,000 $ 8,000 $ - solution. The kiosk can be installed indoors or outdoors. Also includes a non -recurring portion of $40,000 Fire Software for property preplanning to use for fire responses. R $ 5,250 $ 5,250 Fire Data analytics software solution to analyze risk data to support risk reduction and risk R $ 20,000 $ 20,000 management plans Fire Add a Firefighter position, 1.00 FTE, F-01 to reach appropriate staff levels for frontline fire R $ 100,646 $ 100,646 suppression vehicles (two positions requested in FY26, this is request 1 of 2) Fire Add a Firefighter position, 1.00 FTE, F-01 to reach appropriate staff levels for frontline fire R $ 100,646 $ 100,646 suppression vehicles (two positions requested in FY26, this is request 2 of 2) Health Services Microchip implantation program for animals brought to the Humane Society R $ 5,000 $ 5,000 Health Services Low cost rabies vaccinations for low income pet owners R $ 5,000 $ 5,000 Health Services 2 staff to attend NEHA Conference R $ 2,063 $ 2,063 Health Services 1 employee to attend the Emergency Preparedness Summit R $ 4,810 $ 4,810 Health Services 1 employee to attend the IAEM (Intl Assoc of Emergency Managers) Conference R $ 2,100 $ 2,100 Housing & Community Increase financial assistance to ensure Community Solutions of Eastern Iowa (CSEI) is able to R $ 35,000 $ 35,000 Development continue to staff and manage the Housing Hotline Housing & Community 1 employee to attend the AACE Conference. R $ 2,000 $ 2,000 Development Human Resources Establish a Leadership Institute for City of Dubuque employees. A series of courses designed to R $ 20,000 $ 15,412 $ 4,588 build and strengthen skills necessary to perform at the highest levels of the City of Dubuque Universal Competencies and behave consistently with the City's values as set forth in the SPIRIT statement. Human Resources Increase the amount of annual funding available through the City's Tuition Reimbursement R $ 25,000 $ 19,265 $ 5,735 Program. This will allow for accepting new applicants into the program in FY 2026. Page 3 of 13 Page 84 of 99 SUMMARY OF ALL IMPROVEMENT PACKAGES FISCAL YEAR 2026 ADDL ADDL ENe:tTa]xRecurrin Department Description Recurring/Non- Ex ense Revenue act Human Resources Additional branding supplies and outreach giveaways for the City of Dubuque at recruitment R $ 1,000 $ 771 $ 229 fairs, job fairs, and other city-wide events to help promote career opportunities and the overall City of Dubuque brand. Human Resources Establish a conferences budget (enough for two conferences) for the Employee Relations R $ 5,000 $ 3,853 $ 1,147 Manager Positions. Currently no conference budget for that position. Human Resources Employment Specialist position from 0.75 FTE to 1.0 FTE R $ 31,481 $ 24,259 $ 7,222 Human Resources Funding to allow the Administrative Assistant position to attend the Office Dynamics R $ 2,000 $ 1,541 $ 459 International conference each year Information Technology Purchase of 100 licenses of Microsoft Copilot to enhance productivity R $ 36,000 $ 36,000 Information Technology Hire an additional User Technology Specialist 1.0 FTE. Also includes a non-recuring portion for R $ 85,494 $ 85,494 technology Information Technology To provide ongoing training annually for help desk and user technology specialist staff at the R $ 13,000 $ 13,000 Tyler Conference, Neogov HRIS conference and local training conferences. Information Technology To provide ongoing training for two Senior Network/System Administrators and Chief Information R $ 21,000 $ 21,000 Technology Security Officer Information Technology Purchase compact rapid deployable system (CRD system), which delivers cellular and high R $ 3,000 $ 3,000 speed internet anywhere communications are needed. Also includes a non -recurring portion for initial purchase Library Replace the 1.0 FTE GE-30 Relations Supervisor with a 1.0 FTE GE-31 Community Outreach R $ 4,302 $ 4,302 and Communications Coordinator. Library Replace the 0.5 FTE NA-38 intern position with a 0.5 FTE G-25 Library Assistant to be added to R $ 5,587 $ 5,587 the Information Technology activity to support increased usage of the Maker Space Library Replace 1.0 FTE G-30 Library Aide -Adult Services to 1.0 FTE G-32 Librarian I R $ 10,416 $ 10,416 Library Replace 1.0 FTE G-30 Library Aide -Youth Services to 1.0 FTE G-32 Librarian I R $ 10,416 $ 10,416 Library Replace 1.0 FTE G-30 Library Aide -Teen Services to 1.0 FTE G-32 Librarian I R $ 10,416 $ 10,416 Multicultural Family Center Create a new part-time Teen Night Specialist position at the Multicultural Family Center (0.75 R $ 40,197 $ 40,197 FTE, NA-25). This position will provide support to the teen program and is critical to ensuring a structured, engaging, and secure environment for the growing number of teens participating in these popular evening programs. Parks Addition of 1.00 FTE Full Time Maintenance Technician (GD-06) for the Bee Branch Greenway, R $ (20,490) $ (20,490) which would be partially offset by the elimination of 0.11 FTE Temporary Groundskeeper position (NA-12) and elimination of 0.50 FTE Temporary Landscape Crew position (NA-12). Contains parts in the Stormwater Fund as well Parks Addition of 1.00 FTE Full Time Forestry Technician (GD-06), which is offset by eliminating a R $ 43,638 $ 43,638 0.50 FTE Temporary Forestry Laborer Position (GD-06) Parks Addition of 1.0 FTE GD-06 Parks Maintenance position, which would be partially offset by the R $ 42,791 $ 42,791 elimination of 0.96 FTE Temporary Parks Groundkeeper position Parks Addition of 1510 hours 0.72 FTE for Temporary Park Rangers during the park season R $ 38,233 $ 38,233 Page 4 of 13 Page 85 of 99 SUMMARY OF ALL IMPROVEMENT PACKAGES FISCAL YEAR 2026 Department Description Recurring/Non- ADDL ADDL Net Tax Recurrina ExDense Revenue Impact Parks Funding to send Park Division Forestry staff to an out of town conference R $ 1,731 $ 1,731 Parks Costs to send 1/3 of each ERG to conferences annually. Recurring subscription cost of virtual driving training software Upgrade of 7 gas only cars to hybrid cars Zoning Enforcement Officer to attend the Iowa Association of Code Enforcement Officials R $ 20,000 $ 20,000 Parks R $ 5,400 $ 5,400 Parks R $ 52,668 $ 52,668 Planning R $ 800 $ 550 $ 250 (lowACE) Conference Annually. Planning Funds for an additional planner position to attend the National American Planning Association R $ 3,000 $ 2,062 $ 938 Conference (APA). Planning This improvement package request is to increase fees for multiple Planning and Zoning R $ — $ 1,533 $ (1,533) Applications by 2% to accurately reflect the cost of service after deep analysis of current costs. These changes will create an additional $1,533 in revenue each year. This improvement package furthers the City Council goal of Financially Responsible, High -Performance City Organization: Sustainable, Equitable, and Effective Service Delivery. Public Works Centralize and expand camera/Automatic Vehicle Location (AVL) capabilities to the entire city- R $ (4,080) $ (4,080) wide fleet. AVL systems allow for real-time GPS tracking of all fleet vehicles, providing complete visibility over vehicle locations, routes, and status. This enables fleet managers to optimize route planning, reduce fuel consumption, and improve delivery times. The cost of this package is in the garage fund, with cost savings in the general fund, road use tax fund, sanitary sewer fund, and stormwater fund Public Works Purchase single point operation point monitoring. These devices can be utilized on construction R $ (2,250) $ (2,250) sites, snow and ice operations, flood monitoring, and more. This allows for notifications to be sent if an unexpected operational concern arise and also allows for remote monitoring resulting in a decrease in overtime costs for certain operations as it relates to security of job sites and other operations Public Works This improvement package would provide funding to recognize Public Works employees, such R $ 1,249 $ 1,249 as City SWAG, additional leave time, etc. Public Works Increase the number of uniform shirts (short sleeve and long sleeve) from three (3) to six (6) R $ 961 $ 961 annually and add funding for two (2) stocking caps per employee. Public Works Centralize and expand camera/Automatic Vehicle Location (AVL) capabilities to the entire city- R $ (23,160) $ (23,160) wide fleet. AVL systems allow for real-time GPS tracking of all fleet vehicles, providing complete visibility over vehicle locations, routes, and status. This enables fleet managers to optimize route planning, reduce fuel consumption, and improve delivery times. The cost of this package is in the garage fund, with cost savings in the general fund, road use tax fund, sanitary sewer fund, and stormwater fund Public Works Purchase single point operation point monitoring. These devices can be utilized on construction R $ 7,605 $ 7,605 sites, snow and ice operations, flood monitoring, and more. This allows for notifications to be sent if an unexpected operational concern arise and also allows for remote monitoring resulting in a decrease in overtime costs for certain operations as it relates to security of job sites and other operations Page 5 of 13 Page 86 of 99 SUMMARY OF ALL IMPROVEMENT PACKAGES FISCAL YEAR 2026 Department Description Recurring/Non- ADDL ADDL Net Tax Recurrina ExDense Revenue Impact Public Works Increase the number of uniform shirts (short sleeve and long sleeve) from three (3) to six (6) R $ 3,512 $ 3,512 annually and add funding for two (2) stocking caps per employee. Public Works Add two full-time Utility Worker Positions (2.00 FTE, GD-05). These positions would provide R $ 113,630 $ 113,630 flagger safety to street and sewer maintenance operations. y hiring 2.00 FTEs, this would allow the city to take on more hauling, and the Port of Dubuque parking lots internally, instead of outsourcing. Public Works This improvement package would purchase vehicle safety kits (first aid, thermal blankets, N $ 6,600 $ 6,600 sunscreen, etc.) for each vehicle in the Public Works fleet. Public Works Centralize and expand camera/Automatic Vehicle Location (AVL) capabilities to the entire city- R $ 125,000 $ 125,000 wide fleet. AVL systems allow for real-time GPS tracking of all fleet vehicles, providing complete visibility over vehicle locations, routes, and status. This enables fleet managers to optimize route planning, reduce fuel consumption, and improve delivery times. The cost of this package is in the garage fund, with cost savings in the general fund, road use tax fund, sanitary sewer fund, and stormwater fund Public Works Increase the tool allowance for each Fleet Maintenance Technician. The fleet operations R $ 4,500 $ 4,500 assessment recommends the best practice is to provide a $750 annual tool allowance for mechanics required to provide and keep their own tools at work. Public Works Funding for the purchase of steel toe boots for Fleet Maintenance staff, increasing safety. The R $ 880 $ 880 fleet operations assessment recommends providing an annual boot allowance for mechanics' safety. With this shoe allowance, a policy on shoe specifications will be developed utilizing partnerships with private and other public entities' requirements. Public Works Increase the number of uniform shirts (short sleeve and long sleeve) from three (3) to six (6) R $ 287 $ 287 annually and add funding for two (2) stocking caps per employee. Public Works Extend the asphalt overlay program from 8 miles to 10 miles. R $ 256,170 $ 20,000 $ 236,170 Recreation $700 increase in education funding for two supervisor level positions and the addition of $2,200 R $ 3,600 $ 3,600 in education funding for the new Business Development Manager position Recreation As hiring is still expected to be a challenge in future years, this request seeks to increase the R $ 25,000 $ 25,000 Recreation advertising line item by $25,000 on a recurring basis. Recreation Option 1 of 2 for Four Mounds Summer Camp: Permanent funding to continue to support the R $ 57,000 $ 57,000 Four Mounds Adventure Day Camp--CDBG funding is no longer available. Option 2 of 2 is in the non -recurring section. Recreation Increase of $1 in golf fees and cart rentals R $ 48,000 $ (48,000) Recreation Increase the Golf Pro Position from 0.94 FTE to 1.00 FTE. The current Part Time position R $ 4,278 $ 4,278 already has Health Care and Life Insurance as the position was contracted. This requests changes the position to be a normal City Employee Page 6 of 13 Page 87 of 99 SUMMARY OF ALL IMPROVEMENT PACKAGES FISCAL YEAR 2026 Department Description Recurring/Non- Recurrina ADDL ExDense ADDL Revenue Net Tax Impact Transportation Services Funding to create a new part-time Bus Attendant Position (0.50 FTE, GE-23A). This position is needed due to safety concerns with student on the afternoon buses. Student ridership continues to increase, which also results in increases in safety concerns and distractions for driver. R $ 25,484 $ 25,484 TOTAL GENERAL FUND RECURRING PACKAGES $2 319 446 $548 318 $1 718 553 NON -RECURRING DECISION PACKAGE COSTS Airport Purchase of 4 column lifts to provide a safe lifting environment when repairing large snow removal equipment/vehicles. N $ 59,950 $ 59,950 Airport Purchase of an airfield deice brining system. This portion is for initial purchase of system N $ 11,330 $ 11,330 Airport Purchase of a second terminal belt loader. N $ 28,000 $ 28,000 City Attorney Creating Assistant Attorney 1 position. 1.0 FTE. This is the technology portion N $ 5,590 $ 4,308 $ 1,282 City Manager's Office Funding to update the 2011 Urban Foresti Evaluation N $ 37,500 $ 28,898 $ 8,603 City Manager's Office Establishing bike infrastructure policies, executing a cross -departmental implementation agenda, and creating and executing an alternative transportation education and communication campaign. If improvement package for permanent Climate Action Coordinator Position is not funded, then this package is not needed as there will not be capacity to implement N $ 26,450 $ 20,382 $ 6,068 City Manager's Office Make the Climate Action Coordinator position permanent, which is currently limited term and set to expire at the end of FY25. This reflected non -recurring funding to help offset the cost in FY26 ($12,000 through a grant, and $48,911 in FY25 carryovers related to vacancy savings from the time period that the position was not filled). N $ 46,148 $ 38,315 $ 7,833 Communications Office Addition of 1.00 FTE (GE-33) GIS Developer to the GIS (Geographic Information System) Office. This is non -recurring technology (computer, etc.) N $ 5,308 $ 3,648 $ 1,660 Communications Office Addition of 1.00 FTE (GE-30) GIS Applications Specialist to the GIS (Geographic Information System) Office. This is non -recurring technology (computer, etc.) N $ 5,308 $ 3,648 $ 1,660 Communications Office Addition of a 1.00 FTE (GE-30) GIS Data Analyst to the GIS (Geographic Information System) Office. This is non -recurring technology (computer, etc.) N $ 5,308 $ 3,648 $ 1,660 Communications Office Office space remodeling to accommodate new GIS (Geographic Information System) Office positions requested N $ 25,000 $ 17,183 $ 7,818 Communications Office Online form solution to accept electronic form submittals for grant and assistance applications, some licenses and permits, resident feedback, and more through the City website. This is non- recurring implementation fees N $ 5,000 $ 5,000 Communications Office This improvement package request is integrate an artificial intelligence (AI) -based chat solution into the City website to offer the option of automated customer service. This service would provide smart text messaging, web chat, and interactive text alerts for residents and stakeholders. This is non -recurring portion for implementation N $ 7,990 $ 7,990 Page 7 of 13 Page 88 of 99 SUMMARY OF ALL IMPROVEMENT PACKAGES FISCAL YEAR 2026 ADDL :NetTax]Recurrin Department Description Recurring/Non- ADDL Ex ense Revenue act Communications Office This improvement package request is integrate an artificial intelligence (AI) -based chat solution N $ 7,990 $ 7,990 into the City website to offer the option of automated customer service. This service would provide smart text messaging, web chat, and interactive text alerts for residents and stakeholders. This is one time implementation costs Community Impact Four public computers to enhance the Office of Community Impact's ability to connect residents N $ 10,600 $ 10,600 with critical resources. Conference Center The addition of 10 cameras in the public areas of the Grand River Center. No security cameras N $ 50,000 $ 50,000 are in the public space, entrances or exits. This project includes cameras, cabling and installation. Economic Development Addition of an Economic Development Financial and Project Specialist 1.00 FTE GE-31. This is N $ 4,590 3442.5 $ 1,148 non -recurring portion for technology Economic Development Addition of an Economic Development Project Coordinator 1.00 FTE GE-30. This is non- N $ 4,590 $ 4,590 recurring portion for technology Emergency Purchase a paid version of a program called Prepared Assist - Unlimited, which would include N $ 5,000 $ 5,000 Communications features like two way text for dispatchers, the ability to received live video and pictures, and live auditor translation in 19 languages and texting translation in 140 languages. This portion is non- recurring cost of $5,000 for one time implementation Emergency Purchas a laptop, mouse, and backpack for Public Safety dispatchers to use for required N $ 2,500 $ 2,500 Communications courses/certifications that are now offered online and require a quiet space/location Engineering Upgrade an existing smaller 2 Wheel Drive truck (unit 911) to a full size 4 Wheel Drive pickup N $ 19,000 $ 19,000 truck. The current smaller truck struggles to get around with poor or wet project site conditions and not safe when trying to navigate snow -packed roads for sidewalk inspections in the winter on Dubuque's hills and side streets. Finance A bilingual, self-service payment kiosk providing residents with an around the clock bill payment N $ 40,000 $ 40,000 $ — solution. The kiosk can be installed indoors or outdoors. This is the one time portion for implementation cost Fire Funding to accommodate the Center for Public Safety Excellence (CPSE) site visit. Includes N $ 9,800 $ 9,800 lodging/accommodations, flight, per diem, transportation, and other minor costs associated with the site visit. Health Services Hire a company to wrap the Animal Control truck with graphics/design to make the truck more N $ 2,500 $ 2,500 vibrant and welcoming. Housing & Community Purchase of a computer kiosk and scanner at the Federal Building for Inspection & Construction N $ 5,400 $ 5,400 Development Services for residents to submit permit applications online Housing & Community Switch to laptop computers with docking stations as opposed to desktop computers for N $ 2,000 $ 2,000 Development inspectors. Human Resources The purchase of City of Dubuque shirts. The shirts consist of polos and long sleeve shirts with N $ 875 $ 674 $ 201 an embroidered "City of Dubuque Masterpiece on the Mississippi" logo and the text "Human Resources Department." Page 8 of 13 Page 89 of 99 SUMMARY OF ALL IMPROVEMENT PACKAGES FISCAL YEAR 2026 ADDL :Net TaxRecurrin Department Description Recurring/Non- ADDL Ex ense Revenue act Human Resources Provide Crucial Conversations training (including lunch) to all City Staff. This would train 108 N $ 25,488 $ 19,641 $ 5,847 employees a year for five years. There would be four four-hour classes and includes course materials as well. Information Technology Hire an additional User Technology Specialist 1.0 FTE. Technology for the position. This is the N $ 2,900 $ 2,900 technology portion Information Technology Purchase of a fluke optical time domain reflectometer (ODTR) tester. An OTDR tester is N $ 29,000 $ 29,000 necessary for analyzing fiber optic cable performance from end to end by testing components along the cable, including connection points, bends, and splices. The device would also indicate strength of the signal to distance intended. Information Technology Provide for secure storage for the new offices at the Chavenelle site. The existing site has little N $ 10,000 $ 10,000 to no storage included. Information Technology Purchase compact rapid deployable system (CRD system), which delivers cellular and high N $ 34,997 $ 34,997 speed internet anywhere communications are needed. This is the portion for initial purchase Office of Equity & Human Purchase a bus wrap and implement a social media campaign to advertise the existence of this N $ 5,875 $ 5,875 Rights department. Office of Equity & Human Implement a new program called "Bridge Building for a New Dubuque" N $ 8,750 $ 8,750 Rights Parks Installation of network switches and additional equipment at Veterans Memorial Park and the N $ 25,000 $ 25,000 Eagle Point Park tollbooth. Parks Equipment trailer for the Park Division. This trailer will be used to transport the Park Division's N 24000 $ 24,000 mini excavator. Currently the Park Division has to borrow a trailer from the Public Works Department when it is available to transport the mini excavator. Planning The purchase of bike gear to be distributed to youth through the Dubuque Safe Routes to N $ 563 $ 387 $ 176 School committee. This is a partnership between the City of Dubuque, Dubuque Community School District, Dubuque Metropolitan Area Transportation Study (DMATS), the Bike Coop, and the Iowa Safe Routes to School program Planning Sending the Assistant Planner to Leadership Dubuque. N $ 1,525 $ 1,048 $ 477 Planning Sending the Planning Technician to Dale Carnegie training. N $ 2,350 $ 1,615 $ 735 Planning Purchase of City of Dubuque shirts N $ 480 $ 330 $ 150 Police Purchase of car cameras for patrol vehicles N $ 16,148 $ 16,148 Police Keep two squad cars for driver training instead of trading in N $ (22,000) $ 22,000 Public Works Replace the current asphalt roller, powered by diesel, with an electric roller. N $ 40,000 $ 40,000 Public Works Funding to support and build reliability and trust within the Public Works Team utilizing Dale N $ 26,000 $ 26,000 Carnegie team building consultant and resources. Page 9 of 13 Page 90 of 99 SUMMARY OF ALL IMPROVEMENT PACKAGES 2026 Description Recurring/Non- ADDL ADDL Net Tax FISCAL YEAR Department Recurrina Ex ense Revenue Impact Public Works Funding to support and team building within the Public Works Team utilizing Dale Carnegie N $ 26,000 $ 26,000 team building consultant and resources. Recreation Option 2 of 2 for Four Mounds Summer Camp: One time funding to continue to support the Four N $ 47,745 $ 47,745 Mounds Adventure Day Camp through the summer 2025 season--CDBG funding is no longer available TOTAL GENERAL FUND NON -RECURRING PACKAGES 760,548 165,168 595,380 ENTERPRISE FUNDS Stormwater Fund Increase the available operating stormwater repair funds due to increased construction costs, increase backlog of deferred maintenance, additional identification of high -risk stormwater management infrastructure requiring immediate repairs, and the observed increase in more Engineering intense wet weather events that have further deteriorated existing stormwater infrastructure R $ 50,000 $ 50,000 Upgrade the scheduled FY26 replacement of a current Engineering staff computer from a desktop to a laptop. The City does not allow the use of personal computers and personal mobile Engineering phones to remotely access resources directly on the City's network. N $ 1,200 $ 1,200 Delay the scheduled FY 2025 replacement of a current Engineering staff desktop computer and upgrade it to a laptop in FY 2026. To offset the cost of the increase, the staff member has elected to forego their assigned tablet (and tablet data plan) that was also scheduled for Engineering replacement in FY 2025. N $ 260 $ 260 Delay the scheduled FY 2025 replacement of a current Engineering staff desktop computer and upgrade it to a laptop in FY 2026. To offset the cost of the increase, the staff member has elected to forego their assigned tablet (and tablet data plan) that was also scheduled for Engineering replacement in FY 2025. R $ (480) $ (480) Engineering Combine 2 0.73 FTE Inflow & Infiltration part-time positions into a 1.0 FTE Inflow & Infiltration R $ (2,695) full-time position. $ (2,695) Addition of 1.00 FTE Full Time Maintenance Technician (GD-06) for the Bee Branch Greenway, R $ 77,628 $ 77,628 which would be partially offset by the elimination of 0.11 FTE Temporary Groundskeeper position (NA-12) and elimination of 0.50 FTE Temporary Landscape Crew position (NA-12). This is the portion in the Stormwater Fund, other portion is in the general fund Parks Page 10 of 13 Page 91 of 99 SUMMARY OF ALL IMPROVEMENT PACKAGES FISCAL YEAR 2026 :NetaxRecurrin Department Description Recurring/Non- ADDL Ex ense ADDL Revenue t Public Works Centralize and expand camera/Automatic Vehicle Location (AVL) capabilities to the entire city- wide fleet. AVL systems allow for real-time GPS tracking of all fleet vehicles, providing complete visibility over vehicle locations, routes, and status. This enables fleet managers to optimize route planning, reduce fuel consumption, and improve delivery times. The cost of this package is in the garage fund, with cost savings in the general fund, road use tax fund, sanitary sewer fund, and stormwater fund R $ (960) $ (960) Public Works Increase the number of uniform shirts (short sleeve and long sleeve) from three (3) to six (6) annually and add funding for two (2) stocking caps per employee. R $ 611 $ 611 Subtotal Stormwater Fund $ 125,564 $ — $ 125,564 Water Fund Water Secure funding for valve maintenance needs that arise due to long periods of time between valve exercising R $ 80,000 $ 80,000 Subtotal Water Fund $ 80,000 $ — Sanitary Sewer Fund Engineering Add an additional $128,000 to the available operating sanitary sewer repair funds due to increased construction costs, increase backlog of deferred maintenance, and additional identification of high -risk sewer main requiring immediate repairs through the Asset Management Program R $ 128,000 $ 128,000 Public Works Centralize and expand camera/Automatic Vehicle Location (AVL) capabilities to the entire city- wide fleet. AVL systems allow for real-time GPS tracking of all fleet vehicles, providing complete visibility over vehicle locations, routes, and status. This enables fleet managers to optimize route planning, reduce fuel consumption, and improve delivery times. The cost of this package is in the garage fund, with cost savings in the general fund, road use tax fund, sanitary sewer fund, and stormwater fund R $ (1,440) $ (1,440) Public Works Increase the number of uniform shirts (short sleeve and long sleeve) from three (3) to six (6) annually and add funding for two (2) stocking caps per employee. R $ 790 $ 790 WRRC Ongoing training for the Industrial Pretreatment Coordinator position within the WRRC Department. R $ 300 $ 300 WRRC The addition of an intern position at the WRRC (0.40 FTE, . This intern position would assist the WRRC director with managing large Capital Improvement Plan (CIP) projects. This internship will charge their time to CIP projects R $ 19,767 $ 19,767 Page 11 of 13 Page 92 of 99 SUMMARY OF ALL IMPROVEMENT PACKAGES FISCAL YEAR 2026 Department Description Recurring/Non- Recurrina ADDL ExDense ADDL Revenue Net Tax Impact WRRC funding for the City to join the National Association of Clean Water Agencies. NACWA offers strong advocacy and representation at the federal level, ensuring that the city's interests are considered in the development of national regulatory and legislative policies, especially on emerging issues such as PFAS (per- and polyfluoroalkyl substances) and microplastics. R $ 1,100 $ 1,100 WRRC Funding for the WRRC Director, WRRC Plant Manager, Industrial Pretreatment Coordinator, and Administrative Support Professional to attend the annual Growing Sustainability Conference held annually in Dubuque. R $ 1,220 $ 1,220 WRRC Allows for the WRRC Industrial Pretreatment Coordinator to attend the National Association of Clean Water Agencies' annual National Pretreatment Workshop & Training event. R $ 2,850 $ 2,850 WRRC The purchase and implementation of SwiftComply, a cloud -based compliance management platform designed to enhance the efficiency and effectiveness of the City of Dubuque's Industrial Pretreatment Program. R $ 18,500 $ 18,500 WRRC The purchase and implementation of SwiftComply, a cloud -based compliance management platform designed to enhance the efficiency and effectiveness of the City of Dubuque's Industrial Pretreatment Program. N $ 5,000 $ 5,000 Subtotal Sanitary Sewer Fund $ 176,087 $ — $ 176,087 olid Waste Fund Public Works Purchase additional 96-Gallon Recycling Carts to support customer requests, and expansion of the Commingled Recycling Diversion Program N $ 31,515 $ 31,515 Public Works Purchase additional 65-Gallon Yard Waste and 13-Gallon Food Scraps carts to support expansion of the Organics Diversion Activity N $ 11,600 $ 11,600 Public Works Purchase spill cleanup kits for each of the vehicles in the Resource Management fleet. As operations moves toward Automated Curbside Collection, the vehicles require more hydraulic lines which leak. To prevent these leaks from entering the storm water system, we are recommending spill kits be added to all vehicles for drivers to apply to hydraulic leaks, in the field, as they occur. N $ 5,100 $ 5,100 Public Works Increase the number of uniform shirts (short sleeve and long sleeve) from three (3) to six (6) annually and add funding for two (2) stocking caps per employee. R $ 3,243 $ 3,243 Subtotal Solid Waste Fund 51,458 51,458 Page 12 of 13 Page 93 of 99 SUMMARY OF ALL IMPROVEMENT PACKAGES FISCAL YEAR 2026 ADDL ExDense ADDL Revenue Net Tax Impact Department and Description Recurring/Non- Recurrina Public Works Increase the number of uniform shirts (short sleeve and long sleeve) from three (3) to six (6) R annually and add funding for two (2) stocking caps per employee. $ 748 $ 748 Subtotal Landfill Fund 748 748 TOTAL NON -PROPERTY TAX FUND PACKAGES $433,857 TOTAL IMPROVEMENT PACKAGES ALL FUNDS $433 857 $— $433 857 Page 13 of 13 Page 94 of 99 Prepared by: Jennifer Larson, City of Dubuque 50 W. 13th St. Dubuque IA 52001 563.589-4322 Return to: Jennifer Larson, City of Dubuque, 50 W. 1311 St. Dubuque, IA 52001, 563.589-4100 RESOLUTION NO. 70-25-A SETTING A PUBLIC HEARING ON THE PROPOSED FISCAL YEAR 2026 TAX RATE AND DOLLARS AND TAXPAYER STATEMENTS Whereas, pursuant to State of Iowa Section 24.2A (4)(a) as adopted by Iowa HF718, the City of Dubuque is required to hold a public hearing to consider the proposed Fiscal Year 2026 city tax rate and dollars and taxpayer statements; and Whereas, the notice of hearing must be published not less than 10 days and not more than 20 days prior to the date of the hearing; and Whereas, at said hearing, the City Council is required to review the proposed tax notice for the Fiscal Year 2026 Tax Rate and Dollars and Taxpayer Statements. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA THAT: Section 1. The Dubuque City Council will conduct a public hearing on March 25, 2025, at 6:30 p.m. at City Council Chambers, 350 W 6th St. and virtually. Section 2. The Chief Financial Officer is hereby directed to prepare a Notice of Public Hearing on the proposed Fiscal Year City Property Tax Levy with the required information pursuant to Section 24.2A (4)(a) as adopted by Iowa HF718. Section 3. The City Clerk is hereby directed to publish the notice of public hearing pursuant to Section 24.2A (4)(a) as adopted by Iowa HF718. Passed, adopted and approved this 3rd day of March 2024. Brad M. Cavanagh, Mayor Attest: Adrienne N. Breitfelder, City Clerk 2/28/25. 10:13 AM Local Government Property Valuation System CITY NAME: NOTICE OF PUBLIC HEARING - CITY OF DUBUQUE - PROPOSED PROPERTY TAX LEVY CITY #: 31-288 DUBUQUE Fiscal Year July 1, 2025 - June 30, 2026 The City Council will conduct a public hearing on the proposed Fiscal Year City property tax levy as follows: Meeting Date: 3/25/2025 Meeting Time: 06:30 PM Meeting Location: City Council Chambers, 350 W 6th St. At the public hearing any resident or taxpayer may present objections to, or arguments in favor of the proposed tax levy. After the hearing of the proposed tax levy, the City Council will publish notice and hold a hearing on the proposed city budget. City Website (if available) City Telephone Number www.cityofdubuque.org (563) 589-4398 Iowa Department of Management Current Year Certified Property Tax 2024 - 2025 Budget Year Effective Property Tax 2025 - 2026 Budget Year Proposed Property Tax 2025 - 2026 Taxable Valuations for Non -Debt Service 2,768,051,830 2,893,074,400 2,893,074,400 Consolidated General Fund 21,981,598 21,981,598 22,523,944 Operation & Maintenance of Public Transit 1,913,222 1,913,222 1,901,878 Aviation Authority 0 0 0 Liability, Property & Self Insurance 1,405,063 1,405,063 1,513,396 Support of Local Emergency Mgmt. Comm. 0 0 0 Unified Law Enforcement 0 0 0 Police & Fire Retirement 0 0 0 FICA & IPERS (If at General Fund Limit) 1,946,134 1,946,134 2,943,009 Other Employee Benefits 0 0 0 Capital Projects (Capital Improv. Reserve) 0 0 0 Taxable Value for Debt Service 3,410,562,613 3,480,914,961 3,480,914,961 Debt Service 284,236 284,236 280,179 CITY REGULAR TOTAL PROPERTY TAX 27,530,253 27,530,253 29,162,406 CITY REGULAR TAX RATE 9.92637 9.49932 10.06372 Taxable Value for City Ag Land 3,420,763 3,458,250 3,458,250 Ag Land 10,275 10,275 10,388 CITY AG LAND TAX RATE 3.00375 2.97116 3.00375 Tax Rate Comparison -Current VS. Proposed Residential property with an Actual/Assessed Valuation of $100,000/$110,000 Current Year Certified 2024/2025 Budget Year Proposed 2025/2026 Percent Change City Regular Residential 460 525 14.13 Commercial property with an Actual/Assessed Valuation of $300,000330,000 Current Year Certified 2024/2025 Budget Year Proposed 2025/2026 Percent Change City Regular Commercial 2,0301 2,3461 15.57 Note: Actual/Assessed Valuation is multiplied by a Rollback Percentage to get to the'1'axable Valuation to calculate Property'1'axes. Residential and commercial properties have the same rollback percentage through $150,000 of actual/assessed valuation. Reasons for tax increase if proposed exceeds the current: Essential wage adjustments for current agreements, upcoming negotiations, and non -represented staff. Also implementation of a classification and compensation study to ensure fair pay and strengthen our workforce, ultimately enhancing the quality of services we provide to the community. hfps:Hdom-localgov.iowa.gov/budget-renderer?id=21089 Page 96 0l/69 2/28/25. 10:13 AM Local Government Property Valuation System https://dom-localgov.iowa.gov/budget-renderer?id=21089 Page 97 d/99 School, County and City Budget Year Statement to Owners and Taxpayers - As Required by Iowa Code 24.2A Taxing District: (county's number) — (county's name) Optional Return Name Optional Return Address Optional Return Address Name Address Address Bar Code Date: Telephone Proposed property taxation for July 1, 2025 —June 30, 2026 will be presented at your respective School, County and City public hearings detailed below. Oral or written comments from residents or taxpayers will be received — but hearing attendance is optional. THIS IS NOT A TAX BILL. The referenced 'Effective Tax Rate' would be a rate produced by holding current taxation constant using next fiscal year's taxable values. See reverse side for distribution examples and notes. (School LA Name From Download) Public Hearing on Proposed Property Taxation Time: Location: Website: Current Property Tax Current Tax Rate Effective Tax Rate Proposed Prop Tax Proposed Tax Rate All School Funds Reasons Proposed Property Tax exceeds the Current Property Tax: wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww (County LA Name From Download) Public Hearing on Proposed Property Taxation Date: Time: Location: Telephone: Website: Current Property Tax Current Tax Rate Effective Tax Rate Proposed Prop Tax Proposed Tax Rate Urban Resident Rural Resident Reasons Proposed Property Tax exceeds the Current Property Tax: wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww (City LA Name From Download) Public Hearing on Proposed Property Taxation Date: Time: Location: Telephone: Website: Current Property Tax Current Tax Rate Effective Tax Rate Proposed Prop Tax Proposed Tax Rate General Non-Ag Ag Only Reasons Proposed Property Tax exceeds the Current Property Tax: wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Page 98 of 99 Taxing District: (county's number) — (county's name) The table below shows how current taxes levied within this taxing district are distributed. TIF tax included where applicable. If all fields below are blank, this is a new taxing district, with nothing currently to report. Rural taxing districts do not show any city taxes, except for any TIF tax levied by the city on rural property. Taxing Authority Non-TIF Property Tax TIF Property Tax Total Property Tax Authority % of Tax School County City All Others The hypothetical example below compares the amount of property taxes on a Residential property with a value of 100,000 in the current year and 110,000 in the proposed year: Taxing Authority Tax Using Current Tax Rate Tax Using Proposed Tax Rate % Change School County City The hypothetical example below compares the amount of property taxes on a Commercial property with a value of 300,000 in the current year and 330,000 in the proposed year: Taxing Authority Tax Using Current Tax Rate Tax Using Proposed Tax Rate % Change School County City 1) Final tax rates will change due to final adopted amounts, legislative changes, and other levy authorities not included on this mailing. 2) The proposed property tax levies on the front of this notice do not include any Self -Supported Municipal Improvement District (SSMID) tax within cities. 3) The examples of change in estimated taxes to be paid shown above are calculated using the full city rate, even for city ag land tax districts. 4) Rural taxing districts do not show any city rate information. 5) FOR POLK COUNTY ONLY —the proposed tax levy on the front of this notice does not include fire/EMS levies included in the County budget for certain townships. For assistance interpreting this document visit: https://dom.iowa.gov/local-government/citizen-property-tax-guide Page 99 of 99