Legislative Ltr Harkin - BudgetCity Manager's Office
City Hall
50 West 13th Street
Dubuque, Iowa 52001-4864
(563) 5894110 office
(563) 5894149 fax
ctymgr@cityofdubuque.org
May 12, 2003
VIA E-Mail and
1st Class Mail
tom_harkin@harkin.senate.gov
Senator Tom Harkin
United States Senate
731 Hart Building
Washington, DC 20510
Dear Senator Harkin:
Please support the $20 billion that Senator Grassley included in his legislation to assist
states with the current economic downturn.
It is our hope that this assistance will allow the State of Iowa to reduce the $70 million in
budget cuts they have forced on the cities beginning July 1, 2003. This reduction in
state revenues to cities is catastrophic.
This comes at a particularly bad time for the City of Dubuque. The Dubuque City
Council balanced and certified a FY 2004 budget by March 15, as required by law. To
avoid a property tax increase, the adopted budget included a hiring freeze, rate
increases for all the city's utilities, a new storm-water utility fee, elimination of all
professional conference travel and a reduction in all training budgets, and increases in
building, zoning, and ambulance fees.
These actions were necessary to address a 35% increase in health costs ($1,200,000),
a 20% increase in Police and Fire retirement rates ($312,000), property, boiler, and
general liability insurance increases of 15%, reduced state funding of $62,800, and
reduced utility replacement taxes of $156,000.
As if all of this was not bad enough, we recently were informed that our health care
costs for this upcoming fiscal year are not rising $1.2 million, but $1.8 million. This will
mean an additional $600,000 shortfall in ithe operating budget that was not anticipated.
How will we deal with that problem? I don't know yet, but it could mean 12 more
positions will be at risk. That would mean the elimination of over 30 positions, with the
reduction of state revenues by $1.2 million. As you can see, the city's operating budget
is being devastated.
Service People Integzity Responsibility Innovation Teamwork
Senator Tom Harkin
May 12, 2003
Page 2
All of this is particularly frustrating because Dubuque was just turning the corner from
the economic devastation that plagued our state and the City of Dubuque in the 1980's.
In the 1980's, Dubuque averaged 8.9% unemployment. In 1982, the Dubuque
unemployment rate was 14.2%. It takes years of planning and investment to recover
from those economic conditions, but it may take only one year to set Dubuque back 15
years.
The Dubuque City Council has been fiscally responsible over the years, making
reductions in employment of 65 positions since 1981, an 11% reduction in workforce.
The City of Dubuque has avoided a property tax increase for the average homeowner
for the last nine years, with five of those years seeing a property tax decrease. The
average homeowner in Dubuque has seen a tax decrease of 7% over the last nine
years on the city portion of their property taxes. This takes some of the pressure off of
the schools and the county as they consider their budgets.
The City of Dubuque has been fiscally responsible in all areas. If you combine the city
portion of property taxes, the sewer fee, the water fee, the refuse fee and the
stormwater fee, the average homeowner in Dubuque pays only 34¢ more in Fiscal Year
2004 than they paid in Fiscal Year 1995 for their city services.
Thank you for your past support. We would appreciate any assistance the states can
receive to survive this difficult economy, exacerbated by terrorist threats and the war in
Iraq.
Sincerely,
Michael C. Van Milligen
City Manager
MCVM:jh
cc: Governor Tom Vilsack
Mayor Terry Duggan
Dubuque City Council
Susan Judkins, Director of Governmental Affairs, Iowa League of Cities
Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Bill Baum, Economic Development Director
Pauline Joyce, Administrative Services Manager
Randy Peck, Personnel Manager!
Ken TeKippe, Finance Director