Legislators SF 31 & HF 4 tax auCity Manager's Office
50 West 13ffi Stxeet
Dubuque, Iowa 520ffi~64
(319) 589-4110
(319) 589-4149 FAX
THE CTfY OF
February 27, 2001
VIA E-Mail &
1sT CLASS MAIL
tom_flynn~legis.state.ia.us
The Honorable Thomas Flyun
Senate Chamber
State Capitol Building
Des Moines, IA 50319
Dear Senator Flynn:
The City of Dubuque does not support new mandates regarding cities taxing authority as
proposed in Senate File 31 and House File 4.
This legislation is similar to prior year tax limitation proposals in that it again makes a negative
adjustment to cities taxing authority based on the differential or growth in General city balances
between a three year period (initially FY 1997 and FY 2000). The problem this presents the City
of Dubuque is that we receive 50% of the annual profits f~om the Dubuque Racing Association
gaming operations in January of each year. The City Council, through their budget deliberations
in February and early March, determine how these funds will be used in the capital improvement
budget for the coming July 1. In other words, the funds are in our fand balance at fiscal year end
but are committed to projects in the next fiscal year or the upcoming construction season. This is
consistent with the fiscal guidelines adopted by City Council each year which requires
programming these funds through the annual capital improvement budgeting process after the
actual amounts are received.
The City o£Dubuque has had this fiscal policy since gaming began. When Moody's bond rating
agency reviewed our financial condition for our bond rating, they wanted to make sure that
uncerta'm revenue streams were not being used in the operating budget. Our fiscal policy
regarding gaming revenues was considered a sound approach since the City and definitely
Moody's considered this funding source as uncertain and subject to considerable fluctuation due
to economic times and the competitive environment of the gaming industry.
Because this is our fiscal policy, the balance on June 30, 1997 for the General Fund contained
Service People Integrity Responsibility Tmnovation Teamwork
The Honorable Thomas Flyrm
February 27, 2001
Page 2
$2,430,000 of Dubuque Racing Association (DRA) distribution programmed for FY 1999 capital
projects. The fund balance for June 30, 2000 will contain $4,396,000 of D.R.A. distribution
programmed for FY 2001 capital improvements. The calculation proposed in the tax limitation
legislation would deduct the difference between these divided by 3, which results in a reduction
of our taxing authority by $655,333 for FY 2002. Even though these funds are committed to
support the capital budget and not the operating budget, the City's operating budget resources or
taxing authority would be reduced $655,333 per the proposed legislation.
Many cities may accumulate land sales revenue or other uncertain or non-recmring revenues in
their General Fund for support of upcoming capital improvements. To deny them this ability or
penalize them by reducing their tax'mg authority will have a significant impact on future capital
improvements. It will discourage and may even prevent some cities from doing pay-as-you-go
financing of capital improvements through non-recurring revenue sources.
The final point I would like to make is that the City of Dubuque has decreased tax askings for the
average property tax payer four of the last six years, and in the other two years we were at no
increase for the average homeowner. The Dubuque City Council lms been and will cont'mue to
be responsive to the citizens of this community in terms of holding down the cost of city
services. We see no need for State controls and regulations to make sure we are doing our jobs.
In most instances when controls are placed on local governments, the tax payers who can least
afford it are the ones who are hurt as cities are forced to make service cut backs and/or increase
user fees.
I strongly recommend against the proposed tax limitation legislation and that if you feel it is
going to pass, that the section of the bill referring to year-end fund balances be eliminated from
the tax limitation calculation.
Sincerely,
Michael C. Van Milligen
City Manager
CC
Mayor Terry Duggan
Dubuque City Council Members
Barry Lindahl, Corporation Counsel
Pauline Joyce, Administrative Services Manager
Dan Walsh, Dubuque Area Chamber of Commerce
Dubuque Legislative Delegation
The Honorable Tom Flynn
Senate Chamber
Iowa Capitol Building
Des Moines, IA 50319
email: tom_flyrm~legis.state.ia.us
The Honorable Mike Connolly
Senate Chamber
Iowa Capitol Building
Des Moines, IA 50319
email: mike_cormolly~.legis.state.ia, us
The Honorable Paul Scherrman
House Chamber
Iowa Capitol Building
Des Moines, IA 50319
email: paul scherrman~legis.state.ia.us
The Honorable Robert Osterhaus
House Chamber
Iowa Capitol Building
Des Moines, IA 50319
email: robert_osterhause~legis.state.ia.us
The Honorable Para Jochum
House Chamber
Iowa Capitol Building
Des Moines, IA 50319
email: para jochum~legis.state.ia.us
The Honorable Pat Murphy
House Chamber
Iowa Capitol Building
Des Moines, IA 50319
email: pat_murphy~legis.state.ia.us