Budget and Fiscal Policy Guidelines for Fiscal Year 2021 Copyrighted
February 4, 2020
City of Dubuque Action Items # 10.
ITEM TITLE: Budgetand Fiscal Policy Guidelines for Fiscal Year2021
SUMMARY: City Manager recommending adoption of the Fiscal Year
2021 Budget Policy Guidelines.
SUGGESTED DISPOSITION: Suggested Disposition: Receiveand File;Approve
ATTACHMENTS:
Description Type
MVM Memo City Manager Memo
Staff Memo Staff Memo
FY 2021 Budget and Fiscal Policy Guidelines Supporting Documentation
Dubuque
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TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Budget and Fiscal Policy Guidelines for Fiscal Year 2021
DATE: January 30, 2020
Budget Director Jennifer Larson is recommending adoption of the Fiscal Year 2021
Budget Policy Guidelines.
The budget guidelines are developed and adopted by City Council during the budgeting
process in order 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 2019. The final budget presented by the City Manager
may not meet all of 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, 2020 must be adopted by March 31, 2020.
The Fiscal Year 2021 budget guidelines call for a 1.00% increase in the property tax
rate, which would be a 2.72% ($20.94) tax increase for the average Dubuque
homeowner and a property tax decrease for commercial (-0.53%, -$16.89) and
industrial (-0.03%, -$1.39) and an increase for multi-residential (+12.26%, +$213.06)
properties.
' � . • '� •
Pro ert Tax Rate +1.00% +$0.10
Avera e Residential Pa ment +2.72% +$20.94
Avera e Commercial Pa ment -0.53% -$16.89
Avera e Industrial Pro ert -0.03% -$1.39
Avera e Multi-Residential +12.26% +$213.06
Since 1989, the average homeowner has averaged an annual increase in costs in the
City portion of their property taxes of 1.35%, or about $8.06 a year. If the State had
been fully funding the Homestead Tax Credit, the increase would have averaged about
+$4.97 a year.
These guidelines include $411 ,686 for annually recurring and $213,109 for non-
recurring improvement packages. There are many improvement packages requested by
departments in an effort to support City Council goals and priorities. A list of the
improvement package requests is attached (attachment I) and you will see that the
recurring requests total $1,320,477 of net operating budget impact and the non-
recurring requests totals $494,865, both exceeding the resources that will be available
for Fiscal Year 2021 . You will receive the Fiscal Year 2021 City Manager's budget
recommendation on the February 17, 2020 City Council agenda.
The City property tax rate projected in these budget guidelines and impact on the
average residential property owner ($146,467 assessed value) is as follows:
. -
FY 2021 10.4346 1.00%
FY 2022 10.6819 2.37%
FY 2023 11.0507 3.45%
FY 2024 11.5693 4.69%
FY 2025 12.1076 4.65%
. . - . - . . . . . . . .
. . . - . . - . - . . -
FY 2020 $26,296,081
FY 2021 $26,952,048 +2.49% +2.72% +$20.94
FY 2022 $28,053,356 +4.09% +2.37% +$18.75
FY 2023 $29,508,044 +5.19% +3.45% +$27.96
FY2024 $31,279,095 +6.00% +4.69% +$39.31
FY 2025 $33,386,550 +6.74% +4.65% +$40.82
The recommended guideline is a 2.72% or $20.94 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 $266,485.
For the current Fiscal year 2020, Dubuque has the SECOND LOWEST property tax rate
as compared to the eleven largest cities in the state. The highest rate (Des Moines) is
76.14% higher than Dubuque's rate, and the average is 45.24% higher than Dubuque.
Dubuque's recommended FY 2021 property tax rate is $10.4346 (increase of 1.00%
from FY 2020).
Fiscal Year 2020 City Property Tax Rate Comparison for Eleven Largest lowa Cities
2
11 Des Moines $18.38
10 Council Bluffs $18.26
9 Waterloo $17.55
8 Davenport $16.78
7 Sioux City $16.07
6 lowa City $15.83
5 Cedar Rapids $15.44
4 West Des Moines $11.80
3 Ankeny $11.41
2 Dubuque (FY 2021) $10.43
1 Ames $10.03
AVERAGE w/o Dubuque $15.15
Significant issues impacting the FY 2021 budget include the following:
1 . State Funded Backfill on Commercial and Industrial Property Tax
a. Elements of the property tax reform passed by the lowa Legislature in
2013 have created a tremendous amount of uncertainty in the budget
process. While the State has committed to provide some funding for the
City revenue reductions caused by the decrease in taxable value for
commercial and industrial properties, key legislators have been quoted in
the media as casting doubt on the reimbursements continuing. It is
assumed the backfill will be fully funded in FY 2021.
2. Gaming Revenue.
a. Gaming revenues generated from lease payments from the Dubuque
Racing Association (DRA) are estimated to increase $198,633 from
$4,987,104 in FY 2020 to $5,185,737 in FY 2021 based on adding
$140,000 in FY 2021 for sports betting and revised projections from the
DRA. This follows a $85,928 increase from budget in FY 2020 and a
$1,906 increase from budget in FY 2019.
b. The lowa Legislature passed Sports Betting Legislation in June 2019.
DRA started Retail (On-Site) on August 27, 2019 with Mobile Wagering
starting on November 12, 2019. Diamond Jo Casino started Sports
Betting Retail in September 2019 and is working to start mobile wagering
in early 2020. DRA had $470,000 in Sports Book revenue during 2019.
With an amended lease, the City will begin receiving 0.5% of the
handle from Sports Betting in FY 2021, estimated at $140,000.
3
3. New multi-residential property class in Fiscal Year 2017.
a. 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 lowa will not backfill property tax loss from the rollback on multi-
residential property.
- . . . � . .
2017 86.25% $331 ,239
2018 82.50% $472,127
2019 78.75% $576,503
2020 75.00% $691 ,640
2021^ 71.25% $1,332,445
2022 67.50% $1,171 ,716
2023 63.75% $1,270,513
2024 55.07 % $1,528,219
Total $7,374,402
'55.07%= Current residential rollback
^ 17%State Equalization Order in FY 2021
This annual loss in tax revenue of$1,332,445 in FY 2021 and $1,528,219
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 $7,374,402 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.
4. Debt Reduction
a. In August 2015, the Mayor and City Council adopted a debt reduction
strategy which targeted retiring more debt each year than was issued by
the City. The FY 2020 budget achieved that target throughout the 5-year
CIP and also substantially beat overall debt reduction targets over the next
five and ten-year periods.The Fiscal Year 2021 review of Capital
Improvement Budget requests is not yet complete, so there are no
revised Fiscal Year 2021 debt projections as of yet. The FY 2020 debt
projections included some general obligation debt related to deferred
maintenance at the Five Flags Civic Center renovation.
4
5. The Municipal Fire and Police Retirement System of lowa Board of Trustees City
contribution for Police and Fire retirement increased from 24.41% percent in FY
2020 to 25.31% percent in FY 2021 (general fund cost of $148,555 for Police and
$59,933 for Fire or a total of$208,488).
6. Consistent with the already approved collective bargaining agreements for
Teamsters Local Union 120, Teamsters Local Union 120 Bus Operators,
Dubuque Professional Firefighters Association, and International Union of
Operating Engineers, in FY 2021 there is a 1 .50% employee wage increase for
represented and non-represented employees at a cost of$573,301 to the
General Fund.
7. Health Insurance
The City portion of health insurance expense is projected to increase from $921
per month per contract to $1,013 per month per contract (based on 588
contracts) in FY 2021 (general fund cost of$501,061). 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 there
has been savings resulting from the bid award. Beginning in FY 2020, actual
experience has been a 12.19% projected increase in health insurance costs.
Estimates for FY 2022 were increased 5.62%; FY 2023 were increased 10%; FY
2024 were increased 12.5%; and FY 2025 were increased 11%.
8. The increase in property tax support for Transit from FY 2020 to FY 2021 is
$180,352, which reflects increase in employee expense ($59,465); increase in
motor vehicle maintenance and diesel fuel ($143,999); increase in snow removal
($47,770); increase in machinery and equipment ($50,541); and increased
Federal and State operating revenue ($108,430).
Timeline of Public Input Opportunities
The Budget Office conducted community outreach with Balancing Act using print and
digital marketing and presentations.
• October: Point Neighborhood Association, Downtown Neighborhood, and at City
Expo. The City Manager hosted an evening public budget input meeting at the
City Council Chambers in the Historic Federal Building.
5
• November: The City Manager hosted an evening public budget input meeting at
the City Council Chambers in the Historic Federal Building. The Budget Office
conducted community outreach with the North End Neighborhood Association
and the City Life group.
• January: City staff conducted community outreach with a social studies class at
the Alternative Learning Campus as part of a documentary that the students are
working on.
A total of 195 community members attended the budget presentations. There
have been 430 page views of the Balancing Act budget simulator tool and 32
budgets have been submitted by the public as of January 20, 2020. The input
provided will be analyzed by City staff and evaluated by the City Manager for
inclusion in the Fiscal Year 2021 budget recommendation as deemed
appropriate.
Open Budget
URL: www.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.
Open Expenses
URL: http://expenses.cityofdubuque.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
URL: https://dubuque.abalancingact.com/fiscal-year-2021-budget-simulation
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
URL: https://dubuque.abalancingact.com/2020
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
6
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 six City Council special meetings prior to the adoption of the FY 2021
budget before the state mandated deadline of March 31, 2020.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
�� ��/��
Michael C. Van Milligen
MCVM:jml
Attachment
cc: Crenna Brumwell, CityAttorney
Cori Burbach, Assistant City Manager
Teri Goodmann, Assistant City Manager
Jennifer Larson, Director of Finance and Budget
7
Dubuque
THE CITY OF �
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TO: Michael C. Van Milligen, City Manager
FROM: Jennifer Larson, Director of Finance and Budget
SUBJECT: Budget and Fiscal Policy Guidelines for Fiscal Year 2021
DATE: January 30, 2020
I am recommending adoption of the Fiscal Year 2021 Budget Policy Guidelines. The
guidelines reflect City Council direction given as part of the goal setting sessions.
The budget guidelines are developed and adopted by City Council during the budgeting
process in order 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 2019. The final budget presented by the City Manager
may not meet all of 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, 2020 must be adopted by March 31, 2020.
The Fiscal Year 2021 budget guidelines call for a 1.00% increase in the property tax
rate, which would be a 2.72% ($20.94) tax increase for the average Dubuque
homeowner and a property tax decrease for commercial (-0.53%, -$16.89) and
industrial (-0.03%, -$1.39) and an increase for multi-residential (+12.26%, +$213.06)
properties.
' � . • '� •
Pro ert Tax Rate +1.00% +$0.10
Avera e Residential Pa ment +2.72% +$20.94
Avera e Commercial Pa ment -0.53% -$16.89
Avera e Industrial Pro ert -0.03% -$1.39
Avera e Multi-Residential +12.26% +$213.06
Since 1989, the average homeowner has averaged an annual increase in costs in the
City portion of their property taxes of 1.35%, or about $8.06 a year. If the State had
been fully funding the Homestead Tax Credit, the increase would have averaged about
+$4.97 a year.
These guidelines include $411 ,686 for recurring and $213,109 for non-recurring
improvement packages. There are many improvement packages requested by
departments in an effort to support City Council goals and priorities (Attachment I).
Significant issues impacting the FY 2021 budget include the following:
1 . State Funded Backfill on Commercial and Industrial Property Tax
a. Elements of the property tax reform passed by the lowa Legislature in
2013 have created a tremendous amount of uncertainty in the budget
process. While the State has committed to provide some funding for the
City revenue reductions caused by the decrease in taxable value for
commercial and industrial properties, key legislators have been quoted in
the media as casting doubt on the reimbursements continuing. It is
assumed the backfill will be fully funded in FY 2021, then beginning
in FY 2022, it is assumed that the State will eliminate the backfill over
a five-year period.
The projected reduction of State backfill revenue to the general fund is as
follows:
- . .
2021 $0
2022 -$203 355
2023 -$203,355
2024 -$203 355
2025 -$203 355
2026 -$203,356
Total -$1 016 776
2. Gaming Revenue.
a. Gaming revenues generated from lease payments from the Dubuque
Racing Association (DRA) are estimated to increase $198,633 from
$4,987,104 in FY 2020 to $5,185,737 in FY 2021 based on adding
$140,000 in FY 2021 for sports betting and revised projections from the
DRA. This follows a $85,928 increase from budget in FY 2020 and a
$1,906 increase from budget in FY 2019.
b. The Fiscal Year 2021 projections are based on five months of actual
experience and gross gaming revenues are up 1.27%. In CalendarYear
2019, gross gaming revenues were down .11% for the DRA and the
Diamond Jo were up 2.27%. The DRA showed increases in hotel room
2
revenue, food and beverage sales and entertainment ticket sales. The
DRA has projected a 2% increase in gross gaming revenue for Calendar
Year2020.
c. The lowa Legislature passed Sports Betting Legislation in June 2019.
DRA started Retail (On-Site) on August 27, 2019 with Mobile Wagering
starting on November 12, 2019. Diamond Jo Casino started Sports
Betting Retail in September 2019 and is working to start mobile wagering
in early 2020. DRA had $470,000 in Sports Book revenue during 2019.
With an amended lease, the City will begin receiving 0.5% of the
handle from Sports Betting in FY 2021, estimated to be $140,000.
d. During 2019, Illinois passed legislation regarding six additional casinos,
Sports Betting and increased Video Lottery Terminals (VLT's) through the
state. The casino license issued for Rockford will be the closest. The
Rockford City Council voted on October 7, 2019 to certify the Hard Rock
Casino as the city's choice for a new casino. The Illinois Gaming
Commission has until October 28, 2020 to approve the license for the new
Rockford casino. The Hard Rock Casino plans construction of a $330M
casino and hotel. Construction will last approximately 18 to 24 months.
Illinois is allowing an increase in the number of VLT's per location from 5
to 6. Currently in the five counties in Illinois between Dubuque and
Rockford, there are approximately 400 locations with 2076 VLT's. Each
able to increase by one additional machine or a 20% increase in the
number of terminals in this area. The terminals in this five county area
had revenue of $120M in 2019, similar to the amount wagered in the
Dubuque market. The DRA gaming projections include minimal growth in
revenues over the next five years with a growth rate of 1% in FY 2021 and
FY 2022 and a growth rate of 0% in FY 2023 and beyond.
3. Residential Property.
a. Residential property was revalued by the City Assessor by neighborhood
for the January 1 , 2019 property assessments, which impacts the Fiscal
Year 2021 budget. The average residential property value increased
5%. This revaluation of residential property resulted in the taxable
value for the average homeowner calculation to increase from
$139,493 to $146,467 (+5%).
4. New multi-residential property class in Fiscal Year 2017.
a. 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.
3
Multi-residential property includes apartments with 3 or more units. Rental
properties of 2 units were already classified as residential property. The
State of lowa will not backfill property tax loss from the rollback on multi-
residential property.
- . . . � . .
2017 86.25% $331 ,239
2018 82.50% $472,127
2019 78.75% $576,503
2020 75.00% $691 ,640
2021^ 71.25% $1,332,445
2022 67.50% $1,171 ,716
2023 63.75% $1,270,513
2024 55.07 % $1,528,219
Total $7,374,402
*55.07% = Current residential rollback
^ 17% State Equalization Order in FY 2021
This annual loss in tax revenue of$1,332,445 in FY 2021 and $1,528,219
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 $7,374,402 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.
There would have been an equalization order of 17% for multi-residential
property in Fiscal Year 2021 based on values established through actual sales,
so the City Assessor adjusted multi-residential property values. There was not
an equalization order for commercial or industrial property in Fiscal Year 2021 .
The lowa Department of Revenue is responsible for "equalizing" assessments
every two years. Also, equalization occurs on an assessing jurisdiction basis,
not on a statewide basis.
5. Debt Reduction
a. Outstanding G.O. debt (including tax increment debt, remaining payments
on economic development TIF rebates, and general fund lease
agreement) on June 30, 2020 will be $118,789,842 (52.18% of the
statutory debt limit) leaving an available debt capacity of$108,871 ,632
(47.82%). In FY 2019 the City was at 56.32% of statutory debt limit, so
52.18% in FY 2020 is a 7.35% decrease in use of the statutory debt limit.
The City also has debt that is not subject to the statutory debt limit. This
debt includes revenue bonds. Outstanding revenue bonds payable by
4
water, sewer and stormwater fees on June 30, 2020 will have a balance of
$144,324,386. The total City indebtedness as of June 30, 2020, is
projected to be $263,114,228. The total City indebtedness as of June 30,
2019, was $261,617,815. In FY 2020, the City will have a projected
$1,496,413 (0.57%) less in debt.
The Fiscal Year 2021 review of Capital Improvement Budget requests
is not yet complete, so there are no revised Fiscal Year 2021 debt
projections as of yet. The FY 2020 debt projections included some
general obligation debt related to deferred maintenance at the Five Flags
Civic Center renovation.
Some highlights of the document are:
• Sales tax funds are set by resolution to be used 50 percent in the General Fund
for property tax relief in FY 2021. Sales tax receipts are projected to decrease
4.35% under FY 2020 budget ($426,400) and 2.40% over FY 2020 actual of
$4,581 ,312 based on FY 2020 revised revenue estimate which includes a
reconciliation payment from the State of lowa of$438,664 received in November
2019, increased 2.40% percent to calculate the FY 2021 budget, and then
increased at an annual rate of 2.00% percent per year beginning in FY 2022. The
estimates received from the State of lowa show a 0.54% increase in the first
payment estimated for FY 2021 as compared to the first payment budgeted for
FY 2020.
• Building fees (Building Permits, Electrical Permits, Mechanical Permits and
Plumbing Permits) are anticipated to increase $98,071 from $673,215 in FY 2020
to $771,286 in FY 2021 based on Fiscal Year 2019 actual.
• Natural Gas franchise fees have been projected to increase zero percent over FY
2019 actual of $1 ,153,753. Also, Electric franchise fees have been projected to
increase 8 percent over 2020 budget of $3,510,806. The franchise fee revenues
are projected to increase at an annual rate of 4 percent per year from FY 2022
through FY 2025.
• The split of gaming revenues from taxes and the DRA lease (not distributions) in
FY 2021 is recommended to change to 100% operating and 0% capital. This is a
change from 96% operating and 4% capital in FY 2020. When practical in future
years, additional revenues will be moved to the capital budget from the operating
budget.
• The Municipal Fire and Police Retirement System of lowa Board of Trustees City
contribution for Police and Fire retirement increased from 24.41% percent in FY
2020 to 25.31% percent in FY 2021 (general fund cost of $148,555 for Police and
$59,933 for Fire or a total of$208,488). Also, the lowa Public Employee
5
Retirement System (IPERS) City contribution is unchanged from the FY 2020
contribution rate of 9.44% (no general fund impact). The IPERS employee
contribution is unchanged from the FY 2020 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.
• Consistent with the already approved collective bargaining agreements for
Teamsters Local Union 120, Teamsters Local Union 120 Bus Operators,
Dubuque Professional Firefighters Association, and International Union of
Operating Engineers, in FY 2021 there is a 1 .50% employee wage increase for
represented and non-represented employees at a cost of$573,301 to the
General Fund.
• The City portion of health insurance expense is projected to increase from $921
per month per contract to $1,013 per month per contract (based on 588
contracts) in FY 2021 (general fund cost of$501,061). 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 there
has been savings resulting from the bid award. Beginning in FY 2020, actual
experience has been a 12.19% projected increase in health insurance costs.
Estimates for FY 2022 were increased 5.62%; FY 2023 were increased 10%; FY
2024 were increased 12.5%; and FY 2025 were increased 11%.
• 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 2020 was $112,000 as compared to
FY 2021 of $102,607, based on FY 2020 year-to-date expense.
• 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. The
parental leave expense budget in the General Fund in FY 2020 was $47,015 as
compared to FY 2021 of$0 based on departments covering parental leave with
existing employees and not incurring additional cost for temporary help.
• Electrical energy expense is estimated to have a 8% increase over FY 2019
actual expense, then 2% per year beyond.
6
• Natural gas expense is estimated to have no increase over FY 2019 actual
expense, then 2% per year beyond.
• Motor vehicle fuel is estimated to remain at the FY 2020 budget, then increase
2.0% peryearbeyond.
• The increase in property tax support for Transit from FY 2020 to FY 2021 is
$180,352, which reflects increase in employee expense ($59,465); increase in
motor vehicle maintenance and diesel fuel ($143,999); increase in snow removal
($47,770); increase in machinery and equipment ($50,541); and increased
Federal and State operating revenue ($108,430).
The following is a ten-year history of the Transit subsidy:
. . � _
2021 Pro'ection $1 726 584 10.79 %
2020 Bud et $1 558 460 6.88 %
2019Actual $1 458 109 4.99 %
2018Actual $1534726 30.85 %
2017 Actual $1 172 885 24.41 %
2016 Actual $942 752 13.20 %
2015 Actual $1 086 O80 30.33 %
2014 Actual $833 302 20.19 %
2013Actual $1 044171 45.51 %
2012 Actual $717 611 33.48 %
2011 Actual $1 078 726 7.12 %
2010Actual $1161393 -7.36%
• The Enterprise Funds have contributed to the administrative overhead of the City
operation, but the General Fund has always carried most of the financial burden.
In FY 2013, a multi-year process to more equitably distribute those costs across
all funds was implemented. The remaining overhead recharge will be increased
each year until reaching the total overhead recharge percentage. In FY 2018, the
administrative overhead calculation administrative overhead formula was
modified. The modification removed Neighborhood Development, Economic
Development and Workforce Development from all recharges to utility funds. In
addition, the Landfill calculation was modified to remove GIS and Planning. There
was a reduction in metered water usage in FY 2014 and water and sewer
revenue bond covenants calculated on the accrual basis of accounting that have
required a reduction in both the water and sewer administrative overhead
recharges in FY 2016 and 2017. The sanitary sewer administrative overhead was
partially reinstated in FY 2017 and fully reinstated in FY 2018. The Water
7
administrative overhead was partially reinstated in FY 2018 and in FY 2021 is
16.00 percent of full implementation.
Timeline of Public Input Opportunities
The Budget Office conducted community outreach with Balancing Act using print and
digital marketing and presentations.
• October: Point Neighborhood Association, Downtown Neighborhood, and at City
Expo. The City Manager hosted an evening public budget input meeting at the
City Council Chambers in the Historic Federal Building.
• November: The City Manager hosted an evening public budget input meeting at
the City Council Chambers in the Historic Federal Building. The Budget Office
conducted community outreach with the North End Neighborhood Association
and the City Life group.
• January: City staff conducted community outreach with a social studies class at
the Alternative Learning Campus as part of a documentary that the students are
working on.
A total of 195 community members attended the budget presentations. There
have been 430 page views of the Balancing Act budget simulator tool and 32
budgets have been submitted by the public as of January 20, 2020. The input
provided will be analyzed by City staff and evaluated by the City Manager for
inclusion in the Fiscal Year 2021 budget recommendation as deemed
appropriate.
Open Budget
URL: www.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.
Open Expenses
URL: http://expenses.cityofdubuque.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.
8
Balancing Act
URL: https://dubuque.abalancingact.com/fiscal-year-2021-budget-simulation
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
URL: https://dubuque.abalancingact.com/2020
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.
There will be six City Council special meetings prior to the adoption of the FY 2021
budget before the state mandated deadline of March 31 , 2020.
The action step is for City Council to adopt the Fiscal Year 2021 Budget and Fiscal
Policy Guidelines.
JML
Attachment
cc: Crenna Brumwell, CityAttorney
Cori Burbach, Assistant City Manager
Teri Goodmann, Assistant City Manager
9
FY 2021 Budget & Fiscal Policy Guidelines
Page 1
CITY OF DUBUQUE
BUDGET & FISCAL POLICY GUIDELINES
FISCAL YEAR 2021
FY 2021 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 2019. 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,
2020 must be adopted by March 31, 2020.
A. RESIDENT PARTICIPATION
.,�LINE
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)
I b. The government documents section at the Carnegie Stout Public Library
(printed)
c. On the City's website at www.cityofdubuque.org (digital)
d. CD copy of the budget on CD, available upon request (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.
• October: Point Neighborhood Association, Downtown Neighborhood, and at City
Expo. The City Manager hosted an evening public budget input meeting at the
City Council Chambers in the Historic Federal Building.
FY 2021 Budget & Fiscal Policy Guidelines
Page 1
• November: The City Manager hosted an evening public budget input meeting at
the City Council Chambers in the Historic Federal Building. The Budget Office
conducted community outreach with the North End Neighborhood Association
and the City Life group.
• January: City staff conducted community outreach with a social studies class at
the Alternative Learning Campus as part of a documentary that the students are
working on.
A total of 195 community members attended the budget presentations. There
have been 430 page views of the Balancing Act budget simulator tool and 32
budgets have been submitted by the public as of January 20, 2020. The input
provided will be analyzed by City staff and evaluated by the City Manager for
inclusion in the Fiscal Year 2021 budget recommendation as deemed
appropriate.
Open Budget
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
URL: https://dubuque.abalancingact.com/fiscal-year-2021-budget-simulation
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
I IRI � httnc�//rinhiinna ahalanrinnartrnm/9(19(1
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
FY 2021 Budget & Fiscal Policy Guidelines
Page 2
providing opportunities for residents to engage in City governance and enhance
transparency of City decision-making.
B. SERVICE OBJECTIVES AND SERVICE LEVELS
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.
C. TWO TYPES OF BUDGET DOCUMENTS TO BE PREPARED
INE
Two types of budget documents will be prepared for public dissemination. The
recommended City operating budget for Fiscal Year 2021 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 2021 Budget. These documents will be available in mid-February.
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
� Afinancial 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 2021 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.
FY 2021 Budget & Fiscal Policy Guidelines
Page 3
D. ADOPT A BALANCED BUDGET
IDELINE
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
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
DELINE
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
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
change and expand the approach to service delivery by providing organizational skills
FY 2021 Budget & Fiscal Policy Guidelines
Page 4
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.
DELINE
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.
I. RESTRICTIONS ON INITIATING NEW SERVICE
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:
. . . . .
Teamsters Local Union No. 120 June 30, 2022
Teamsters Local Union No. 120 Bus O erators June 30, 2022
Dubu ue Professional Firefi htersAssociation June 30, 2024
Dubu ue Police ProtectiveAssociation June 30, 2020
International Union of Operating Engineers June 30, 2024
FY 2021 Budget & Fiscal Policy Guidelines
Page 5
DELINE
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
The Affordable Care Act is a health care law that aims to improve the current health
care system by increasing access to health coverage forAmericans 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 January 9, 2020, there are two part-time
positions with health insurance benefits that remain which include the Golf Professional
and a Parks Maintenance Worker.
FY 2021 Budget & Fiscal Policy Guidelines
Page 6
L. HIRING FREEZE
IIDELINE
The hiring freeze ended during Fiscal Year 2019 with most of the positions funded a
partial fiscal year in FY 2019 and the remaining new costs in Fiscal Year 2020. The
positions that were filled include full-time Community Engagement Coordinator, full-
time Strategic Workforce Equity Coordinator, full-time Assistant Horticulturalist (2), full-
time maintenance worker, full-time Management Intern (ICMA), full-time Help Desk
Technical Support, full-time Traffic Engineering Assistant, and full-time Records Clerk.
M. BALANCE BETWEEN CAPITAL AND OPERATING EXPENSES
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.
N. USER CHARGES
IN
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 Department licensing.
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.
FY 2021 Budget & Fiscal Policy Guidelines
Page 7
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.
The following chart shows activities with user charges and the percentage the activity
is self-supporting:
. . . .
Activity FY 2018 Actual FY 2019 Actual FY 2020 Adopted FY 2021 Rec'd
AdultAthletics 82.6% 72.8% 74.9% 69.7%
McAleece Concessions 130.3% 155.5% 125.9% 135.0%
Youth Sports 24.1% 18.3% 12.1% 11.8%
Therapeutic&After School 6.8% 11.8% 53.1% 29.3%
RecreationClasses 81.1% 95.2% 70.3% 75.3%
Swimming 67.5% 57.9% 62.6% 60.9%
Golf 99.0% 96.3% 101.5% 102.3%
Port of Dubuque Marina 70.8% 70.5% 74.4% 73.6%
Park Division 14.0% 13.4% 17.4% 15.6%
Library 3.8% 3.5% 2.6% 1.2%
Airport 84.5% 91.6% 87.4% 90.1%
Building Inspections 94.4% 102.1% 85.6% 94.6%
Planning Services 44.4% 44.6% 46.3% 51.6%
Health Food/Environmental
Ins ections 56.7% 69.2% 70.5% 73.9%
Animal Control 66.4% 64.0% 56.0% 54.1%
Housing - General Inspection 53.7% 70.6% 84.9% 82.3%
Federal Building Maintenance 85.0% 85.7% 86.0% 83.0%
FY 2021 Budget & Fiscal Policy Guidelines
Page 8
O. 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 GIS and Planning.
In Fiscal Year 2021, the general fund is recommended to support $3,744,043 in
administrative overhead using the recharge method adopted in Fiscal Year 2013 and
revised in Fiscal Year 2018.
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:
FY 2�21 Butlge� & Fiecal Policy Guitlelinee
Page 9
AtlminiztrativeOverM1eatlSplit EngineeringAtlminiztrationd
(Noimowamge�gl�eed�g) ProleciManagement
� •�1wer � cener
�Pona �
Scmwo�e. � Wo�er
� � Rei.e .ewer
•Pohine
lAlEl � •Lontlll � � Sbmwo�er
YaYY/
•6enaolPord
P. OUTSIDE FUNDING
OISCUSSION
The puryoee of�hie guitleline le �o eetablieh �he policy�ha��he Ci�y ehoultl aggreeeively
pureue ou�eitle funtling �o aeeie� In Onancing i�e opem�ing antl capital butlge�e.
Howeveq �he long-�erm commiMeMs requiretl for such funtling mus� be carefully
ua�etl before any agreemen�s are matle. CommiMen�s �o assume an ongoing
setl level of service or level of funtling once ihe oulsitle funtling entls must be
mmim¢etl.
To minimlze �he pmpetly�ax buNeq �he Cl�y of Dubuque will make every eHoM �o
ob�ain fetleml, e�a�e antl pnre�e funtling �o aeeie� In financing i�e opem�ing antl capital
butlgets. Howeveq commiMenis to guamntee a level of service or level of funtling
atler �he oulsitle funtling entls shall be minimized Also, any ma�ching funtls requiretl
for capital grante will be Itlenti0etl.
�. GENERALFUNDOPERATINGRESERVE �WORKINGBALANCE)
OISCUSSION
An opem�ing reserve or working balance Is an amoun� of cash, which mus� be carrietl
Irilo a fiecal year�o pay opem�ing coe�e un�il tax money, or o�her arilicipa�etl revenue
n. Wi�hou� a woMing balance, �here woultl no� be eufimien� caeh In �he funtl �o
ee� I�s obllga�ions antl moneywoultl have �o be bormwed Working balances are no�
Ilable forfuntling a butlgel; �heyare requiretl forcaeh Oow Q.e., �o be able �o pay bille
before taxee are collevletl).
FY 2021 Budget & Fiscal Policy Guidelines
Page 10
Q. GENERAL FUND OPERATING RESERVE (WORKING BALANCE)
(continued)
Moody's Investor Service recommends a factor of 20 percent for "AA" rated cities. In
May 2015, Moody's Investors Service downgraded Dubuque's general obligation bond
rating from Aa2 to Aa3 and removed the negative outlook. This followed two bond rating
upgrades in 2003 and 2010, and one bond rating downgrade in 2014. In announcing the
bond rating downgrade, Moody's noted that the City's general fund balance/reserve
declined.
. -
. . . . . - . . .
. -
FY 2013 21.08%
FY 2014 14.87% Decrease due to planned capital expenditures of$4.1 m in FY14
FY 2015 14.87% Unchanged
Increase due to capital projects not expended before the end of the FY
FY 2016 17.52% and increase in general fund revenue
Increase due to capital projects not expended before the end of the FY
FY 2017 20.09% and additional contributions to general fund reserve
Increase due to capital projects not expended before the end of the FY
FY 2018 23.81% and additional contributions to general fund reserve
FY 2019 22.02% Decrease due to planned capital expenditures
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
balance of at least 10 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 CosY'). 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.
After all planned expenditures in FY 2020, the City of Dubuque will have a general fund
reserve of 18.86%of general fund expenses as computed by the methodology adopted
in the City's general fund reserve policy on a cash basis or 25.60% percent of general
fund revenues as computed by the accrual basis methodology used by Moody's
Investors Service. The general fund reserve cash balance is projected to be
$13,031,745 on June 30, 2020 as compared to the general fund reserve balance on an
accrual basis of $18,120,432 as computed by Moody's Investors Service. In Fiscal Year
2020, there are resources available for mid-year capital expenditures due to employee
FY 2021 Budget & Fiscal Policy Guidelines
Page 11
vacancy savings in several departments and additional riverfront lease, building permits,
and franchise fee revenues. The general fund reserve balance on an accrual basis
exceeds 22% in FY 2020, which is the margin of error used to ensure the City always
has a general fund reserve of at least 20% as computed by Moody's Investors Service.
The guideline of the City of Dubuque is to maintain a General Fund working balance
or operating reserve of 20% (22% to maintain a margin of error of 2%) in FY 2021
and beyond. 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, with the
FY2019 contribution, this is sustainable..
General Fund Reserve Projections:
. - . . .
. . . - - .
. . . .
.. .
FY2017 $ 600,000 $ 14,172,661 20.09 %
FY2018 $ 1,700,000 $ 16,460,491 23.81 %
FY2019 $ 1,050,000 $ 22,011,333 27.04 %
FY2020 $ - $ 18,120,432 25.60 %
FY2021 $ - $ 18,120,432 25.40 %
FY2022 $ - $ 18,120,432 25.81 %
FY2023 $ - $ 18,120,432 25.05 %
FY2024 $ - $ 18,120,432 24.77 %
FY2025 $ - $ 18,120,432 24.71 %
� 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 22% creates resources for additional capital projects or
other mid-year expenses.
R. USE OF UNANTICIPATED, UNOBLIGATED, NONRECURRING
INCOME
DISCUSSION
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.
FY 2021 Budget & Fiscal Policy Guidelines
Page 12
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.
DELINE
Nonrecurring unobligated income shall generally only be spent for nonrecurring
expenses. Capital improvement projects and major equipment purchases tend to be
nonrecurring expenditures.
S. 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 2020 General Fund budget, which went into effect July 1 , 2019, anticipated a
"carryover balance" of $200,000 or approximately 2 percent of the General Fund. For
multi-year budget planning purposes, these guidelines assume a carryover balance of
$200,000 in FY 2021 through FY 2025.
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
2021 and beyond through the budget planning period. Any amount over that shall
usually be 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 2021 and each succeeding year to support the operating budget.
b. Sales Tax Revenue. By resolution, 50% of sales tax funds must be used in the
General Fund for property tax relief in FY 2021. Sales tax receipts are projected to
decrease 4.35% under FY 2020 budget ($426,400) and 2.40% over FY 2020 actual of
FY 2021 Budget & Fiscal Policy Guidelines
Page 13
$4,581 ,312 based on FY 2020 revised revenue estimate which includes a reconciliation
payment from the State of lowa of$438,664 received in November 2019, increased
2.40% percent to calculate the FY 2021 budget, and then increased at an annual rate of
2.00% percent per year beginning in FY 2022. The estimates received from the State of
lowa show a 0.54% increase in the first payment estimated for FY 2021 as compared to
the first payment budgeted for FY 2020. The following chart shows the past four years
of actual sales tax funds and projected FY 2021 for the General Fund:
. �
PYQ4 $ 748,170 $ 748,108 $ 366,087 $ 355,027 $ 380,549
Quarter 1 $ 1,112,755 $ 1,080,294 $ 1,066,816 $ 1,124,105 $ 1,146,587
Quarter2 $ 1,146,296 $ 1,109,978 $ 1,098,596 $ 1,149,881 $ 1,172,879
Quarter3 $ 960,626 $ 939,923 $ 1,031,606 $ 971,871 $ 991,308
Quarter4 $ 374,054 $ 366,087 $ 700,312 $ 761,097 $ 776,319
Reconciliation $ 103,185 $ 77,018 $ 217,699 $ 219,332 $ 223,719
Total $ 4,445,086 $ 4,321,408 $ 4,481,116 $ 4,581,313 $ 4,691,361
% Change -4.36°/ -2.86% +3.70% +2.24°/ +2.40%
c. Hotel/Motel Tax Revenue. Hotel/motel tax receipts are projected to decrease
3.83% ($93,711) under FY 2020 budget and 2.00% over FY 2020 re-estimated receipts
of$2,307,858 , and then increase at an annual rate of 2.00% per year.
d. FTA Revenue. Federal Transportation Administration (FTA) transit operating
assistance is anticipated to increase 6% or $72,838 from FY 2020 budget based on the
revised FY 2020 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.
e. Miscellaneous Revenue. Miscellaneous revenue has been estimated at 2%growth
per year over budgeted FY 2020.
f. Building Fee Revenue. Building fees (Building Permits, Electrical Permits,
Mechanical Permits and Plumbing Permits) are anticipated to increase $98,071 from
$673,215 in FY 2020 to $771,286 in FY 2021 based on Fiscal Year 2019 actual.
g. DRA Revenue.
Gaming revenues generated from lease payments from the Dubuque Racing
Association (DRA) are estimated to increase $198,633 from $4,987,104 in FY 2020 to
$5,185,737 in FY 2021 based on adding $140,000 in FY 2021 for sports betting and
revised projections from the DRA. This follows a $85,928 increase from budget in FY
2020 and a $1,906 increase from budget in FY 2019.
FY 2021 Budget & Fiscal Policy Guidelines
Page 14
The following is a ten-year history of DRA lease payments to the City of Dubuque:
. - . - . -
FY 2021 Projected $5,185,737 $234,441 5%
FY 2020 Revised $4,951,296 -$197,892 -4%
FY 2020 Budget $4,987,104 -$162,084 -3%
FY2019Actual $5,149,188 $293,177 6%
FY 2018 Actual $4,856,011 $18,879 0%
FY 2017 Actual $4,837,132 -$195,083 -4%
FY 2016 Actual $5,032,215 -$155,297 -3%
FY2015Actual $5,187,512 -$158,104 -3%
FY 2014 Actual $5,345,616 -$655,577 -11%
FY2013Actual $6,001,193 $3,305 0%
FY 2012 Actual $5,997,888 -$345,242 -5%
FY2011Actual $6,343,130 -$477,153 -7%
FY 2010 Actual $6,820,283 -$1,586,647 -19%
The Diamond Jo payment related to the revised parking agreement increased from
$567,306 in FY 2020 to $584,325 in 2021 based on estimated Consumer Price Index
adjustment (3.00%).
h. DRA Gaming.
The split of gaming revenues from taxes and the DRA lease (not distributions) in FY
2021 is recommended to change to 100% operating and 0% capital. This is a change
from 96% operating and 4% capital in FY 2020. When practical in future years,
additional revenues will be moved to the capital budget from the operating budget.
FY 2021 Budget & Fiscal Policy Guidelines
Page 15
The following shows the annual split of gaming taxes and rents between operating and
capital budgets from FY2016 — FY2021 :
Split of Gaming Tax + Revenue Between Operating & Capital Budgets
FY 2016 100% 0%
FY 2017 99% 1%
FY 2018 97%
FY 2019 96%
FY 2020 95%
FY 2021 100% 0%
-% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110%
Operating � Capital
i. Diamond Jo Revenue. The Diamond Jo Patio lease ($25,000 in FY 2021) and
the Diamond Jo parking privileges ($584,325 in FY 2021) have not been included
in the split with gaming revenues. This revenue is allocated to the operating
budget.
2. Property Taxes
j. Residential Rollback. The residential rollback factor will decrease from 56.9180% in
2020 to 55.0743% or a 3.24% decrease in FY 2021 . The rollback has been estimated to
remain the same from Fiscal Years 2022 through 2025.
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 2021 ,
agricultural property had less growth than residential property which caused the rollback
factor to decrease.
FY 2021 Budget & Fiscal Policy Guidelines
Page 16
Residential property was revalued by the City Assessor by neighborhood for the
January 1, 2019 property assessments, which impacts the Fiscal Year 2021 budget.
The average residential property value increased 5%. This revaluation of
residential property resulted in the taxable value for the average homeowner
calculation to increase from $139,493 to $146,467 (+5%).
The decrease in the residential rollback factor decreases the value that each residence
is taxed on. This increased taxable value for the average homeowner ($79,396 taxable
value in FY 2020 and $80,666 taxable value in 2021) 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
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
55.0743% percent in Fiscal Year 2021. 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 2020, the
City's tax rate would have been $7.65 per $1 ,000 of assessed value instead of$10.33 in
FY 2020.
k. State Equalization Order/Property Tax Reform. There would have been an
equalization order of 17% for multi-residential property in Fiscal Year 2021 based on
values established through actual sales, so the City Assessor adjusted multi-residential
property values. There was not an equalization order for commercial or industrial
property in Fiscal Year 2021 . The lowa 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 lowa 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 2021 State backfill for property tax loss is estimated to be
$1,016,776.
Elements of the property tax reform passed by the lowa Legislature in 2013 have
created a tremendous amount of uncertainty in the budget process. While the State has
committed to provide some funding for the City revenue reductions caused by the
decrease in taxable value for commercial and industrial properties, key legislators have
been quoted in the media as casting doubt on the reimbursements continuing.
Beginning in FY 2022, it is assumed that the State will eliminate the backfill over a
five-year period.
FY 2021 Budget & Fiscal Policy Guidelines
Page 17
The projected reduction of State backfill revenue to the general fund is as follows:
- -. .
2022 -$203,355
2023 -$203,355
2024 -$203,355
2025 -$203,355
2026 -$203,356
Total -$1,016,77
FY 2015 was the first year that commercial, industrial and railroad properties were
eligible for a Business Property Tax Credit. The Business Property Tax Credit will be
deducted from the property taxes owed and the credit is funded by the State of lowa.
Eligible businesses must file an application with the Assessor's office to receive the
credit with a deadline of January 15, 2020 for applications to be considered for FY 2021.
The calculation of the credit is dependent on the number of applications that were
received and approved statewide versus the amount that was appropriated for the fiscal
year, the levy rates for each parcel, and the difference in the commercial/industrial
rollback compared to residential rollback. In FY 2015, the lowa Legislature appropriated
$50 million for FY15; $100 million for FY16; and $125 million for FY17 and thereafter.
The estimated amount of value that will be used to compute the credit in FY 2015 is
$33,000, FY 2016 is $183,220, FY 2017 is $255,857, FY 2018 is $266,340, FY 2019 is
$231,603, and FY 2020 is $251,788.
The basic formula is the value multiplied by the difference in rollbacks of commercial
and residential property then divided by one thousand and then multiplied by the
corresponding levy rate:
_ (VALUE X (Commercial Rollback - Residential Rollback) = 1 ,000)) X Levy Rate
The average commercial and industrial properties ($432,475 Commercial / $599,500
Industrial) will receive a Business Property Tax Credit from the State of lowa 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, and $835 in FY 2020. FY 2021 is project to be $846.
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.
FY 2021 Budget & Fiscal Policy Guidelines
Page 18
I. Multi-Residential Property Class/Eliminated State Shared Revenue.
The State of lowa will not backfill property tax loss from the rollback on multi-residential
property. The rollback will occur as follows:
- . . . � . .
FY 2017 86.25% $331 239
FY 2018 82.50% $472,127
FY 2019 78.75% $576 503
FY 2020 75.00% $691 640
FY 2021 71.25% $1,332,445
FY2022 67.50% $1171716
FY 2023 63.75% $1 270 513
FY2024 55.07% $1,528,219
Total $7 374 402
�55.07% = Current residential rollback
This annual loss in tax revenue of$1,332,445 in FY 2021 and $1,528,219 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
$7,374,402 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 addition, the State of lowa 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)
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
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 2021 will reflect the following impacts of taxable values of
various property types:
FY 2021 Budget & Fiscal Policy Guidelines
Page 19
. . - . - . - . .
Residential +1 .99 %
Commercial +3.94 %
Industrial +0.83 %
Multi-Residential +11 .63 %
Overall +1 .47 %
�Overall taxable value increased 1.47% percent after deducting Tax Increment
Financing values
Assessed valuations were increased 2 percent per year beyond FY 2021 .
o. Riverfront Property Lease Revenue. Riverfront property lease revenue is projected
to increase by $424,621 in FY 2021 due to anticipated additional industrial riverfront
leases.
3. Fees, Tax Rates & Services
p. Franchise Fees. Natural Gas franchise fees have been projected to increase zero
percent over FY 2019 actual of$1,153,753. Also, Electric franchise fees have been
projected to increase 8 percent over 2020 budget of$3,510,806. The franchise fee
revenues are projected to increase at an annual rate of 4 percent per year from FY 2022
through FY 2025.
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 2021.
r. Police & Fire Protection. FY 2021 reflects the twelfth year that payment in lieu of
taxes is charged to the Water and Sanitary Sewer funds for Police and Fire Protection.
In FY 2021, 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. ASSUMPTIONS — REQUIREMENTS
a. Pension Systems.
• The Municipal Fire and Police Retirement System of lowa (MFPRSI)
Board of Trustees City contribution for Police and Fire retirement
increased from 24.41% percent in FY 2020 to 25.31% percent in FY 2021
(general fund cost of$148,555 for Police and $59,933 for Fire or a total of
$208,488).
FY 2021 Budget & Fiscal Policy Guidelines
Page 20
• The lowa Public Employee Retirement System (IPERS) City
contribution is unchanged from the FY 2020 contribution rate of 9.44% (no
general fund impact). The IPERS employee contribution is unchanged
from the FY 2020 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. Consistent with the already approved collective bargaining
agreements for Teamsters Local Union 120, Teamsters Local Union 120 Bus Operators,
Dubuque Professional Firefighters Association, and International Union of Operating
Engineers, in FY 2021 there is a 1.50% employee wage increase for represented and
non-represented employees at a cost of$573,301 to the General Fund.
c. Health Insurance. The City portion of health insurance expense is projected to
increase from $921 per month per contract to $1 ,013 per month per contract (based on
588 contracts) in FY 2021 (general fund cost of$501,061). 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 there has been savings resulting from the bid award. Beginning in
FY 2020, actual experience has been a 12.19% projected increase in health insurance
costs. Estimates for FY 2022 were increased 5.62%; FY 2023 were increased 10%; FY
2024 were increased 12.5%; and FY 2025 were increased 11%.
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 2020 was $194,628 as
compared to FY 2021 of$201,556, 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 2020 was $112,000 as
compared to FY 2021 of$102,607, based on FY 2020 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
FY 2021 Budget & Fiscal Policy Guidelines
Page 21
both parents are eligible employees, each receive the leave benefit. The parental leave
expense budget in the General Fund in FY 2020 was $47,015 as compared to FY 2021
of$0 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 2019. A 2% increase is estimated in succeeding years.
g. Electricity. Electrical energy expense is estimated to have a 8% increase over FY
2019 actual expense, then 2% per year beyond.
h. Natural Gas. Natural gas expense is estimated to have no increase over FY 2019
actual expense, 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.
j. Equipment & Machinery. Equipment costs for FY 2021 are estimated to decrease
11 .36% under FY 2020 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 increased from
$54,286 in FY 2020 to $65,574 in FY 2021 based on last three prior years.
m. Motor Vehicle Fuel. Motor vehicle fuel is estimated to remain at the FY 2020
budget, then increase 2.0% per year beyond.
n. Motor Vehicle Maintenance. Motor vehicle maintenance is estimated remain at the
FY 2020 budget based on FY 2019 actual, then increase 2.0% per year and beyond.
o. Public Transit. The increase in property tax support for Transit from FY 2020 to FY
2021 is $180,352, which reflects increase in employee expense ($59,465); increase in
motor vehicle maintenance and diesel fuel ($143,999); increase in snow removal
($47,770); increase in machinery and equipment ($50,541); and increased Federal and
State operating revenue ($108,430).
FY 2021 Budget & Fiscal Policy Guidelines
Page 22
p. Public Transit (continued):
The following is a ten-year history of the Transit subsidy:
Transit Subsidy History:
. . � _
2021 Pro'ection $1 726 584 10.79 %
2020 Bud et $1 558 460 6.88 %
2019 Actual $1 458 109 4.99 %
2018 Actual $1 534 726 30.85 %
2017 Actual $1 172 885 24.41 %
2016 Actual $942 752 13.20 %
2015 Actual $1 086 O80 30.33 %
2014 Actual $833 302 20.19 %
2013 Actual $1 044 171 45.51 %
2012 Actual $717 611 33.48 %
2011 Actual $1 078 726 7.12 %
2010 Actual $1 161 393 -7.36%
q. Shipping & Postage. Postage rates for FY 2021 are estimated to increase 15% over
FY 2019 actual expense and proposed cost increases by USPS. A 2.0 percent increase
is estimated in succeeding years.
r. Insurance. Insurance costs are estimated to change as follows:
• Workers Compensation is increasing 8% based on FY 2019 actual expense.
• General Liability is increasing 1% based on FY 2019 actual plus 5%.
• Damage claims is increasing 10% based on a three year average.
• Property insurance is decreasing 5% based on FY 2019 actual plus 6%.
s. Housing. The Housing Choice Voucher subsidy payment from the General Fund is
estimated to increase $247,711 in FY 2021. In FY 2011 , the City approved reducing the
number of allowed Housing Choice Vouchers from 1 ,060 to 900 vouchers. This
reduction in vouchers was estimated to reduce Section 8 administrative fees from HUD
by $100,000 per year. However, in the transition, the number of vouchers dropped to
803 vouchers. HUD has based the Section 8 administrative fees for FY 2021 on the
lower number of vouchers held in FY 2020 which has decreased the amount of revenue
received by the Section 8 program in FY 2021. The City is in the process of increasing
the Section 8 Housing Vouchers back to 1 ,072. The City of Dubuque will not be
receiving the HUD grant to fund two positions for the Family Self-Sufficiency Program in
calendar year 2020 due to a late submission of grant application. The current grant
period ends on December 31 , 2019. Although the funding for the positions to maintain
the Family Self-Sufficiency (FSS) program will not be grant funded, the City is obligated
to finish the current contract with participants. There are 69 participants under contract
currently. The City anticipates receiving the grant in calendar year 2021.
FY 2021 Budget & Fiscal Policy Guidelines
Page 23
t. CATV Fund. The Cable N 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 Cable TV equipment replacement
costs. Other jurisdictions will need to plan accordingly.
u. Greater Dubuque Development Corporation. Greater Dubuque Development
Corporation support of $713,748 is budgeted to be paid mostly from Dubuque Industrial
Center Land Sales in FY 2021 , with $25,000 for True North strategy paid from the
Greater powntown TIF. In FY 2022 and beyond Greater Dubuque Development
Corporation will be paid from the Greater powntown TIF and Dubuque Industrial Center
West land sales.
:OPERTY �CT
The recommended Fiscal Year 2021 property tax rate (increased, 1 .00%) will have the
following impact:
� � � . . - . . -
Pro ert Tax Rate $10.43456 $10.33144 0.97% $0.10
Avera e Residential Pa ment $791 .11 $770.17 2.72% $20.94
Avera e Commercial Pa ment $3 143.82 $3 160.71 -0.53% -$16.89
Avera e Industrial Pro ert $4 712.37 $4 713.76 -0.03% -$1.39
Average Multi-Residential $1 ,950.98 $1 ,737.92 12.26% $213.06
Property
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 — 2021 is -0.90%. The average annual change over the last five years is
-1 .08%.
The following pages show historical and projected property tax impacts.
FY 2021 Budget & Fiscal Policy Guidelines
Page 24
Historical Impacts on Tax Askings & Average Residential Property Tax Rates:
Historical Impact on Tax Askings & Average Residential Property Tax Rates
� % Change in Tax Rate City Tax Rate
6.00% $16.00
3.00% $14.00
—% $12.00
(3.00)% $10.00
(6.00)% $8.00
(9.00)% $6.00
(12.00)% $4.00
(15.00)% $2.00
(18.00)% $—
I� oJ T O N M � LC1 CO I� oJ T O N M � LC1 CO I� oJ T O � N M � LC1 CO I� oJ T O
T T T T T T T T T T T T T O O O O O O O O O O O O O O O O O O O O O O
� � � � N N N N N N N N N N N N N N N N N N N N N N
} } } } } } } } } } } } } } } } } } } } } } } } } } } } } } } } } } }
LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL LL
FY 2021 Budget & Fiscal Policy Guidelines
Page 25
Historical City tax rates and % change in tax rate:
. . -
FY 1987 14.5819
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 10.4346 +1.00%
1987 -2021 Average Change -0.90%
2017-2021 Average Change -1.08%
From Fiscal Year 1987 through Fiscal Year 2021, the average annual change in the
property tax rate is a decrease of 0.90%. Over the last five years, the average annual
change in the property tax rate is a decrease of 1 .08%.
FY 2021 Budget & Fiscal Policy Guidelines
Page 26
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% $12.00
4.80% $8.00
2.40% $4.00
-% $-
FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
% Change in Tax Rate City Tax Rate
Projected City tax rates and % change in tax rate�:
. -
FY 2021 10.4346 1.00%
FY 2022 10.6819 2.37%
FY 2023 11.0507 3.45%
FY 2024 11.5693 4.69%
FY 2025 12.1076 4.65%
�Significantly impacted by the budget projection that the State of lowa will begin
eliminating the property tax backfill payments beginning in FY 2022.
FY 2021 Budget & Fiscal Policy Guidelines
Page 27
IMPACT ON AVERAGE RESIDENTIAL PROPERTY - EXAMPLE
. . -
� � � � .
� . . . - . - . . -
FY 1989 "Cit " Pro ert Tax $453.99 -11.40% -$58.39
FY 1990 "Cit " Pro ert Tax $449.94 -0.89% -$4.04
FY 1991" "Cit " Pro ert Tax" $466.92 +3.77% $16.98
FY 1992 "Cit " Pro ert Tax $483.63 +3.58% $16.71
FY 1993" "Cit " Pro ert Tax" $508.73 +5.19% $25.10
FY 1994 "Cit " Pro ert Tax $510.40 +0.33% $1.51
FY 1995" "Cit " Pro ert Tax" $522.65 +2.40% $12.41
FY 1996 "Cit " Pro ert Tax $518.10 -0.87% -$4.54
FY 1997" "Cit " Pro ert Tax" $515.91 -0.42% -$2.19
FY 1998 "Cit " Pro ert Tax $512.25 -0.71% -$3.66
FY 1999 "Cit " Pro ert Tax" $512.25 0.00% $0.00
FY 2000 "Cit " Pro ert Tax $511.38 -0.17% -$0.87
FY 2001 "Cit " Pro ert Tax $511.38 0.00% $0.00
FY 2002 "Cit " Pro ert Tax $511.38 0.00% $0.00
FY 2003 "Cit " Pro ert Tax" $485.79 -5.00% -$25.58
FY 2004 "Cit " Pro ert Tax $485.79 0.00% $0.00
With Homestead Ad'. $493.26 +1.54% $7.46
FY 2005 "Cit " Pro ert Tax" $485.93 +0.03% $0.14
With Homestead Ad'." $495.21 +0.40% $1.95
FY 2006 "Cit " Pro ert Tax 1 $494.27 +1.72% $8.34
With Homestead Ad'. 1 $504.62 +1.90% $9.41
FY 2007 "Cit " Pro ert Tax" 2 $485.79 -1.72% -$8.48
With Homestead Ad'." $496.93 -1.52% -$7.69
FY 2008 "Cit " Pro ert Tax $496.93 0.00% $0.00
With Homestead Ad'. $510.45 +2.72% $13.52
FY 2009 "Cit " Pro ert Tax $524.53 +2.76% $14.08
With Homestead Ad'. $538.07 +5.41% $27.62
FY 2010 "Cit " Pro ert Tax $538.07 0.00% $0.00
With Homestead Ad'. $550.97 +2.40% $12.90
FY 2011 "Cit " Pro ert Tax $564.59 +2.47% $13.62
With Homestead Ad'. 3 $582.10 +5.65% $31.13
FY 2012 "Cit " Pro ert Tax $611.19 +5.00% $29.09
With Homestead Ad'. 3 $629.78 +8.19% $47.68
FY 2013 "Cit " Propert Tax $661.25 +5.00% $31.47
With Homestead Adj. (3) $672.76 +6.82% $42.98
FY 2014 "Cit " Propert Tax $705.71 +4.90% $32.95
FY 2021 Budget & Fiscal Policy Guidelines
Page 28
. . -
ii � . .
� . . . - . - . . -
FY 2015 "Cit " Propert Tax $728.48 +3.23% $22.77
FY 2016 "Cit " Propert Tax $747.65 +2.63% +$19.17
FY 2017 "Cit " Propert Tax $755.70 +1.08% $8.05
FY 2018 "Cit " Propert Tax $755.70 0.00% $0.00
FY 2019 "Cit " Propert Tax $770.17 +1.91% $14.47
FY 2020 "Cit " Propert Tax $770.17 0.00% $0.00
Avera e FY1989-FY2020 with Homestead Ad'. +1.35% +$8.06
Avera e FY2016-FY2020 with Homestead Ad'. +1.12% +$8.34
Avera e FY1989-FY2020 without Homestead Ad'. +0.78% +$4.97
The average annual dollar change in residential property tax from 1989-2020 is an
increase of$8.06. The average annual dollar change over the last five years is an
increase of$8.34.
Projected impact on average residential property:
- • • . •
•
FY 2021 "Cit " Propert Tax $791.11 +2.72% +$20.94
FY 2022 "Cit " Propert Tax $809.86 +2.37% +$18.75
FY 2023 "Cit " Propert Tax $837.82 +3.45% +$27.96
FY 2024 "Cit " Propert Tax $877.13 +4.69% +$39.31
FY 2025 "Cit " Propert Tax $917.95 +4.65% +$40.82
" 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 lowa 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.
FY 2021 Budget & Fiscal Policy Guidelines
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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 lowa 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 lowa Homestead Property Tax Credit Funded by the State
of lowa
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%
—% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110%
� Percent Funded
FY 2021 Budget & Fiscal Policy Guidelines
Page 30
IMPACT ON COMMERCIAL PROPERTY - EXAMPLE
• - � • � •
. . • - � �
FY 1989 "City" Property Tax $2,106.42 -$384.19 -15.43%
FY 1990 "Cit " Propert Tax $2,086.50 -$19.92 -0.95%
FY 1991 "Cit " Propert Tax $2,189.48 +$102.98 +4.94%
FY 1992 "City" Property Tax $2,280.18 +$90.70 +4.14%
FY 1993 "Cit " Propert Tax $2,231.05 -$49.13 -2.15%
FY 1994 "Cit " Propert Tax $2,250.15 +$19.10 +0.86%
FY 1995 "City" Property Tax $2,439.60 +$189.45 +8.42%
FY 1996 "Cit " Propert Tax $2,439.60 $0.00 0.00%
FY 1997 "Cit " Propert Tax $2,659.36 +$219.76 +9.01%
FY 1998 "City" Property Tax $2,738.43 +$79.07 +2.97%
FY 1999 "Cit " Propert Tax $2,952.03 +$213.60 +7.80%
FY 2000 "Cit " Propert Tax $2,934.21 -$17.82 -0.60%
FY 2001 "City" Property Tax $2,993.00 +$58.86 +2.00%
FY 2002 "Cit " Propert Tax $2,910.25 -$82.84 -2.76%
FY 2003 "Cit " Propert Tax $3,186.27 +$276.03 +9.48%
FY 2004 "City" Property Tax $3,278.41 +$92.15 +2.89%
FY 2005 "Cit " Propert Tax $3,349.90 +$71.48 +2.18%
FY 2006 "Cit " Propert Tax 1 $3,152.52 -$197.38 -5.89%
FY 2007 "City" Property Tax $3,538.03 +$385.50 +12.23%
FY 2008 "Cit " Propert Tax $3,688.64 +$150.62 +4.26%
FY 2009 "Cit " Propert Tax $3,554.71 -$133.94 -3.63%
FY 2010 "City" Property Tax $3,524.48 -$30.23 -0.85%
FY 2011 "Cit " Propert Tax $3,585.16 +$60.68 +1.72%
FY 2012 "Cit " Propert Tax $3,736.64 +$151.48 +4.23%
FY 2013 "City" Property Tax $3,855.96 +$119.32 +3.19%
FY 2014 "Cit " Propert Tax $3,942.14 +$86.20 +2.23%
FY 2015 "Cit " Propert 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 "Cit " Propert Tax 4 $3,364.61 $982.19 +$225.45 +7.18%
FY 2018 "Cit " Propert 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 "Cit " Propert Tax 7 $3,160.71 $860.57 -$117.52 -3.58%
FY 1989-2020 Average Change +$20.94 +0.96%
2016-2020 Average Change -$147.24 -3.68%
e o usiness rope y ax re i
The average annual dollar change in commercial property taxes from 1989-2020 is a
increase of$20.94. The average annual dollar change over the last five years is a
decrease of-$147.24.
FY 2021 Budget & Fiscal Policy Guidelines
Page 31
- • � . •
• - � -
FY 2021 "Cit " Propert Tax 8 $3,143.82 $917.60 -$16.89 -0.53%
FY 2022 "Cit " Propert Tax $3,218.34 $939.35 +$74.52 +0.35%
FY 2023 "Cit " Propert Tax $3,329.45 $971.78 +$111.11 +3.63%
FY2024 "Cit " Propert Tax $3,485.69 $1,017.39 +$156.24 +3.91%
FY 2025 "Cit " Propert Tax $3,647.89 $1,064.73 +$162.20 +4.65%
(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 is estimated to be $918 and rollback to 90% in FY 2021.
FY 2021 Budget & Fiscal Policy Guidelines
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IMPACT ON INDUSTRIAL PROPERTY - EXAMPLE
• - � • � •
. . • - � �
FY 1989 "City" Property Tax $5,900.35 -$1,074.65 -15.40%
FY 1990 "Cit " Propert Tax $5,844.55 -$55.80 -0.95%
FY 1991 "Cit " Propert Tax $6,133.00 +$288.45 +4.94%
FY 1992 "City" Property Tax $6,387.05 +$254.05 +4.14%
FY 1993 "Cit " Propert Tax $6,249.45 -$137.60 -2.15%
FY 1994 "Cit " Propert Tax $6,302.95 +$53.50 +0.86%
FY 1995 "City" Property Tax $5,891.05 -$411.90 -6.54%
FY 1996 "Cit " Propert Tax $5,891.05 $0.00 0.00%
FY 1997 "Cit " Propert Tax $5,690.75 -$200.30 -3.40%
FY 1998 "City" Property Tax $5,700.56 +$9.81 +0.17%
FY 1999 "Cit " Propert Tax $5,536.70 -$163.86 -2.87%
FY 2000 "Cit " Propert Tax $5,358.00 -$178.70 -3.23%
FY 2001 "City" Property Tax $5,533.00 +$175.00 +3.27%
FY 2002 "Cit " Propert Tax $5,380.42 -$152.58 -2.76%
FY 2003 "Cit " Propert Tax $5,106.00 -$274.42 -5.10%
FY 2004 "City" Property Tax $5,136.50 +$30.50 +0.60%
FY 2005 "Cit " Propert Tax $5,036.00 -$100.50 -1.96%
FY 2006 "Cit " Propert Tax 1 $5,814.61 +$778.61 +15.46%
FY 2007 "City" Property Tax $5,983.21 +$168.60 +2.90%
FY 2008 "Cit " Propert Tax $6,184.95 +$201.74 +3.37%
FY 2009 "Cit " Propert Tax $5,976.44 -$208.51 -3.37%
FY 2010 "City" Property Tax $5,909.69 -$66.75 -1.12%
FY 2011 "Cit " Propert Tax $6,011.44 +$101.75 +1.72%
FY 2012 "Cit " Propert Tax $6,265.43 +$253.99 +4.23%
FY 2013 "City" Property Tax $6,465.48 +$200.05 +3.19%
FY 2014 "Cit " Propert Tax $6,610.00 +$144.52 +2.24%
FY 2015 "Cit " Propert 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 "Cit " Propert Tax 4 $5,043.36 $982.19 -$213.05 -4.05%
FY 2018 "Cit " Propert 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 "Cit " Propert Tax 7 $4,713.76 $860.57 -$156.15 -3.21%
FY 1989-2020 Average Change -$70.66 -1.06%
2016-2020 Average Change -$283.61 -5.00%
e o usiness rope y ax re i
The average annual dollar change in industrial property taxes from 1989-2020 is a
decrease of$70.66. The average annual dollar change over the last five years is a
decrease of$283.61 .
FY 2021 Budget & Fiscal Policy Guidelines
Page 33
- • � . •
• - � -
FY 2021 "Cit " Propert Tax 8 $4,712.37 $917.60 -$1.39 -0.03%
FY 2022 "Cit " Propert Tax $4,824.06 $939.35 +$111.69 +2.37%
FY 2023 "Cit " Propert Tax $4,990.62 $971.78 +$166.56 +3.45%
FY 2024 "Cit " Propert Tax $5,224.81 $1,017.39 +$234.19 +4.69%
FY 2025 "Cit " Propert Tax $5,467.93 $1,064.73 +$243.12 +4.65%
(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 is estimated to be $918 and rollback to 90% in FY 2021.
IMPACT ON MULTI-RESIDENTIAL PROPERTY - EXAMPLE
• - � •
•
FY 2015 "Cit " Propert Tax $2,349.34
FY 2016 "Cit " Propert Tax $2,225.69 -$123.65 -5.26%
FY 2017 "Cit " Propert Tax $2,160.39 -$65.30 -2.93%
FY 2018 "Cit " Propert Tax $2,015.48 -$144.91 -6.71%
FY2019 "Cit " Propert Tax $1,870.21 -$145.27 -7.21%
FY 2020 "Cit " Propert Tax $1,737.92 -$132.29 -7.07%
Avera e FY 2016-FY 2020 -$122.28 -5.84%
The average annual dollar change for Multi-Residential property from FY 2015-FY 2020
is a decrease of$122.28 for a total savings of$611.42.
- • • . •
•
FY 2021 "Cit " Propert Tax" $1,950.98 +$213.06 +12.26%
FY 2022 "Cit " Propert Tax $1,892.11 -$58.87 -4.93%
FY 2023 "City" Property Tax $1,848.69 -$43.42 -2.13%
FY 2024 "Cit " Propert Tax $1,672.05 -$176.64 -10.23%
FY 2025 "Cit " Propert Tax $1,749.85 +$77.80 +4.12%
eno es year o a e-issue equa iza ion or ers.
The lowa Department of Revenue is responsible for "equalizing" assessments every two
years. Based on the past two years of sales data, the lowa Department of Revenue has
increased multi-residential property values by 17%. This is similar to what the lowa
Department of Revenue did for multi-residential properties outside City limits. The
FY 2021 Budget & Fiscal Policy Guidelines
Page 34
average multi-residential property owner in Dubuque is seeing a significant increase in
the resale value of this key investment asset. Even with this increase in value, the
average multi-residential property owner is paying $398.36 less in City property taxes
with the FY 2021 budget proposal than they paid in FY 2015.
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 lowa will not backfill property tax loss from the rollback on multi-residential
property.
The rollback will occur as follows:
- . . . . .
2017 86.25% $331239
2018 82.50% $472127
2019 78.75% $576 503
2020 75.00% $691640
2021^ 71.25% $1 332 445
2022 67.50% $1171716
2023 63.75% $1 270 513
2024 55.07% $1 528 219
Total $7 374 402
*55.07% = Current residential rollback
^ 17% State Equalization Order in FY 2021
This annual loss in tax revenue of$1 ,332,445 in FY 2021 and $1,528,219 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 $7,374,402 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.
There were reappraisals done in Fiscal Year 2016 that may have increased the taxable
value for the properties considered multi-residential; however, the overall assessments
for multi-residential property has remained relatively flat except for twelve large
properties that increased significantly. The assessed value for multi-residential
properties in Fiscal Year 2017 did not increase and landlords began receiving tax breaks
with their September 2016 tax payments.
FY 2021 Budget & Fiscal Policy Guidelines
Page 35
HISTORY OF INCREASES IN PROPERTY TAX ASKINGS
� . . - . . .
� . . - .
FY 1989 $10 918 759 -12.00% -11 .40%
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.g1% -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%
FY2004 $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%
FY2007 $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%
Avera e FY 1989-2020 +2.g1% +0.78%
""Does not reflect State unfunded portion of Homestead Credit.
FY 2021 Budget & Fiscal Policy Guidelines
Page 36
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:
. . - . - . . . . . . . .
. . . - . . - . - . . -
FY 2020 $26,296,081
FY 2021 $26,952,048 +2.49% +2.72% +$20.94
FY 2022 $28,053,356 +4.09% +2.37% +$18.75
FY 2023 $29,508,044 +5.19% +3.45% +$27.96
FY2024 $31,279,095 +6.00% +4.69% +$39.31
FY 2025 $33,386,550 +6.74% +4.65% +$40.82
IDELINE
The recommended guideline is a 2.72% or $20.94 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
$266,485.
These guidelines include $411 ,686 for recurring and $213,109 for non-recurring
improvement packages.
Senate File 634 passed during the 2019 legislative sessions, makes changes to lowa
city and county budgets and taxes for Fiscal Year 2021 and later. Additional steps have
been added to the budget approval process:
1 . Determine a maximum amount of taxes that the municipality will certify to
be levied as property taxes from certain levies in the next fiscal year
(called the "total maximum property tax dollars"), and prepare a resolution
that establishes that amount of"total maximum property tax dollars" for the
next fiscal year.
The "total maximum property tax dollars" includes taxes for city
government purposes under section 384.1 (general fund levy), for the
city's trust and agency fund for pensions under section 384.6, subsection
1 , for the city's emergency fund under section 384.8, and for the levies
authorized under certain subsections of section 384.12: subsection 8
(certain bridges), subsection 10 (maintenance of a municipal transit
system or regional transit district), subsection 11 (leases of buildings to be
operated as civic centers), subsection 12 (operating and maintaining a
civic center), subsection 13 (planning a sanitary disposal project),
subsection 17 (premiums for various insurance types), and subsection 21
FY 2021 Budget & Fiscal Policy Guidelines
Page 37
(support of a local emergency management commission), but excludes
additional approved at election under section 384.12, subsection 19.
The maximum property tax dollars calculated and approved by resolution
includes those amounts received by the municipality as replacement taxes
under chapter 437A or 437B.
2. Set a time and place for a public hearing on the resolution.
3. Publish notice of the public hearing on the resolution in the newspaper(s)
for official notices between 10 and 20 days prior to the public hearing.
Additionally, if the municipality has a website, then notice must be posted
on the website, and if the municipality maintains social media accounts,
then the notice (or a link to the notice) must be posted on each social
media account by the day of publication in the newspaper(s).
Notice of the public hearing on the resolution must include:
a. The sum of the current fiscal year's actual property taxes certified
for levy under identified levies.
b. The "effective tax rate" as defined in the code for those levies.
c. The proposed maximum property tax dollars that may be certified
for levy for the budget year under the identified levies.
d. If the proposed maximum property tax dollars exceeds the current
fiscal year's actual property tax dollars certified, a statement of the
major reasons for the increase.
4. Hold a public hearing on the resolution, at which residents and property
owners may present oral or written objections.
5. Following the public hearing, the governing body may decrease the
proposed "maximum property tax dollars" amount but may not increase
the amount.
6. Adopt the resolution. If the "total maximum property tax dollars" amount is
greater than 102% of the current fiscal year's actual property taxes from
the identified levies, then the resolution must pass the governing body by
a two-thirds majority of the full City Council.
FY 2021 Budget & Fiscal Policy Guidelines
Page 38
CAPITAL IMPROVEMENT BUDGET GUIDELINES
U. INTEGRATION OF CAPITAL RESOURCES
'"DELINE
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
'�DELINE
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
'�DELINE
Capital improvement expenditures should concentrate on renovating and
maintaining existing facilities to preserve prior community investment.
X. NEW CAPITAL FACILITIES
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
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.
FY 2021 Budget & Fiscal Policy Guidelines
Page 39
Z. USE OF GENERAL OBLIGATION BONDS
DISCUSSION
The lowa Constitution limits the General Obligation debt of any city to 5% of the actual
value of the taxable property within the city. The lowa 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, 2020 the City will be at 65.29%.
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, 2020, it is
projected the City will be at 15.33%.
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
FY 2021 Budget & Fiscal Policy Guidelines
Page 40
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.
General Obligation Debt
FY 2020 Debt Limit: The FY 2018 assessable value of the community for calculating the
statutory debt limit is $4,553,229,486, which at 5%, indicates a total General Obligation
debt capacity of $227,661 ,474.
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, 2020 will be $118,789,842 (52.18% of the statutory debt
limit) leaving an available debt capacity of$108,871,632 (47.82%). In FY 2019 the
City was at 56.32% of statutory debt limit, so 52.18% in FY 2020 is a 7.35%
decrease in use of the statutory debt limit.
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$63,300 in FY 2020 and one issuance for the franchise fee litigation
settlement in the amount of$2,800,000 with debt service of$135,000 in FY 2020.
Included in the debt is $7,653,959 of property tax rebates to businesses creating and
retaining jobs and investing in their businesses.
Statutory Debt Limit
. � - . � . . � - . . - . , � - .
. � - . - .
2019 $221 512 756 $124 756 646 56.32%
2020 $227 661 474 $118 789 842 52.18%
FY 2021 Budget & Fiscal Policy Guidelines
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Statutory Debt Limit Used
(as of June 30th)
�00%
so�io a��io
az�io �s�io �s�io
ao�io as�o �z�io �a�io
s°io �o�io
63% 66% 66% o
62/o
60% 56%
51% 50%
47% 46%
43% 43% 41%
37%
40% 32%
28%
20%
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29
FY16 Adopted FY20 Adopted
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, 2020 will have a balance of $144,324,386. The total City
indebtedness as of June 30, 2020, is projected to be $263,114,228. The total City
indebtedness as of June 30, 2019, was $261,617,815. In FY 2020, the City will have a
projected $1,496,413 (0.57%) less in debt. The City is using debt to accomplish
necessary projects and to take advantage of the attractive interest rates in the current
market.
FY 2021 Budget & Fiscal Policy Guidelines
Page 42
Total Debt
(In Millions)
$320.0
309.1
$302.3
$300.0 z95.6
�' $290.1
$295. $282.0 $279.9
$280.0
$281. $265.6 ��.5
$260.0 $268.6 $266.9 �.9
$261.6 $260.4$247.5
$242.2
N $240.0 $244.3 $z41.4
o $241.4
� $220.0 $226.2 $221.8
$200.0 $201.8
$180.0 $181.3
$160.0
$160.7
$140.0
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29
FY16 Adopted FY20 Adopted
Part of the City's FY 2014 debt was in the form of a grant from the lowa 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 17t" Street Storm Sewer over the next twenty years.
The FY 2021-2025 Capital Improvement Program is currently being reviewed and
balanced, so there are no revised Fiscal Year 2021 debt projections yet. The FY
2020 debt projections included some general obligation debt related to deferred
maintenance at the Five Flags Civic Center renovation.
FY 2021 Budget & Fiscal Policy Guidelines
Page 43
As we approach the preparation of the FY 2021-2025 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.
There are many high priority capital improvement projects which must be constructed
during the FY 2021 - FY 2025 period. The reductions in DRA rent and distribution over
the years 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. In FY 2021 - FY
2025, 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 2010 $5.1
FY 2011 $5.2
FY 2012 $5.5
FY 2013 $5.5
FY 2014 $5.7
FY 2015 $6.0
FY 2016 $7.1
FY 2017 $7.2
FY 2018 $7.3
FY 2019 $7.5
$1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0
The FY 2020 budget was based on receiving $7,353,913 in Road Use Tax funds. In FY
2020, 90% of the Road Use Tax income is in the operating budget. The State of lowa
increased the gas tax 10 cents per gallon in FY 2016.
FY 2�21 Butlge� & Fiecal Policy Guitlelinee
Page 44
Wi�hlncreaeeeln Ci�y DMATS antl S�a�e Roatl Uee Tac funtle, �he Cl�y will be able �o
eubetan�iallyatltl �o �he number of etree� IIgMe, eneure �he Sou�hwee�Atlenal pmjevl
ontinues to move forwartl antl continue with major matl Impmvemenis such as Notlh
Cascatle Roaq Cen�ml Avenue, antl Whi�e Stree�.
I� le preferable �o ehi% Roatl Uee Tax funtle �o �he capital butlge� for etree� main�enance
antl repairto retluce ihe neetl to bormw funtle for mutine etreet maintemance antl
Impmvemenis. This shi% cannot occur until ihere are Increasetl revenues or retlucetl
aepenee ihat woultl allow ihie ehift without a pmpeMy tax Impavl.
BB. COMMERCIALANDINDUSTRIALDEVELOPMENT
ELINE
Cumer�t City, commemial antl Intluetnal tlevelopmer�t eHotle ehoultl be cor�tinuetl to (a)
preeerve cumen�jobe antl creale newjob oppoMuni�iee antl (b) enlarge antl tlivereify
�he economic base. Financing �hese e(fotls antl pmgmms shoultl con�inue �o be a high
priori�y.
CC. HOUSING
To maintain an atlequa�e supply of safe antl tlecen� housing, �he Cl�y shoultl s�rive �o
preeerve exie�ing eingle famlly antl rental houeing �ha� le no� eubetantlaN antl pmvitle
oppotlunities for tlevelopment of new housing, Indutling owner occupieq within ihe
City'e corpomte limite for all reeitlente, patliculatly for people of low antl motlemte
e. WOMforce ren�al houeing le becoming Increaeingly Importan� antl �he Cl�y
�pmvltleelncentiveeforbuiltling rehabilitatione.
DD. SALES TAX
GUIO'• •••'
Salee Tax revenue ehall be ueetl accordmg �o �he following epliL
saie:ra. soie vrowrry vx aauar
� sai r aoia . .
l )rn ea � � ny u nei r o-a � p � i am .
30% (n�m � � n a pa rnee�
sai r zoi.
OTM1 pk pofC�y edp pe�ys M1 N Ik , s�ep , s�o�m
�ro � rc y i �a sy n ay , n �mi g , �a
���° h I� � ( g.ArpotF Rg c �er, Ln yLa Ef � cen�er.
Clry Hall. Rre S�a�ions. ParR.s. and Swlmming Pools?
(b)Tanstl equlpmen�, sucM1 as buses
(c) RNe�hon�and we�land developmen�
�a) eoo�omm oe�aiopmam vrqacs
FY 2021 Budget & Fiscal Policy Guidelines
Page 45
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 31 St, 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.
Consistent with past use of DRA distributions, 100% of the February 2021 projections of
operating surplus have been anticipated as resources to support the Fiscal Year 2021
capital improvement projects. The estimates received from the DRA will be reduced by 5
percent for FY 2023 resources, 10 percent for FY 2024, and 15 percent for FY 2025
resources, to provide a margin of error in case the estimates are not realized.
In Fiscal Year 2021 , 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.
FF. EMPHASIS ON INITIATIVES THAT REDUCE FUTURE OPERATING
BUDGET EXPENSE
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 April 1, 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 2021 Budget & Fiscal Policy Guidelines
Page 46
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, effectiveAugust 1 ,
2005, provided additional revenues to the City of Dubuque.
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
125% —
100% —
50% 25% 24% 15% 14% 10% 3% -% 1% 3% 4% 4% -% 1% 2% 3% 4%
75% -
50% — 85% 87% 90% 97% 100% 99% 97% 96% 96% 100% 99% 98% 97% 96%
75% 76%
25% —50%
-% -
F�°� F�°y F�°� �-��� F�^^ F�^� F�^y�-��6* F�^� F�^� F�^� F��"� F�`�^ F��"ry F�`�� F��"� �`�y
Operating Capital
Notable Changes:
"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 2016 A reduction in revenue in the Greater powntown 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.
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
FY 2021 Budget & Fiscal Policy Guidelines
Page 47
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.
DRA distributions restarted in FY 2011 instead of the projected year of FY 2012.
The reduction in the DRA's market impacts the City's lease payment from the DRA. The
current lease requires the DRA to pay the City 1 percent of coin in from slot machines
and 4.8 percent of gross revenue from table games. The following chart shows the
impact of the reduction of lease payments on the City's five-year projections based on
revised projections from the DRA each year:
. . . - .
� - � . .
2009-2013 -$7 000 000
2010-2014 -$4 800 000
2011-2015 -$1 000 000
2012-2016 -$3 200 000
2013-2017 -$2 900 000
2014-2018 No Chan e
2015-2019 -$3 200 000
2016-2020 -$3 100 000
2017-2021 -$1 300 000
2018-2022 -$1 400 000
2019-2023 +$308 076
2020-2024 +$131 141
2021-2025 +$675 306
Total Im act -$27.2 Million
From FY 2009 thru FY 2025, the City's lease payments have been reduced -$27.2
Million.
In Calendar Year 2019, gross gaming revenues were down .11% for the DRA and the
Diamond Jo is up 2.27%. Overall, the Dubuque gaming market is up 1 .27%. The DRA
showed increases in hotel room revenue, food and beverage sales and entertainment
ticket sales.
The lowa Legislature passed Sports Betting Legislation in June 2019. DRA started
Retail (On-Site) on August 27, 2019 with Mobile Wagering starting on November 12,
2019. Diamond Jo Casino started Sports Betting Retail in September 2019 and is
working to start mobile wagering in early 2020. DRA had $470,000 in Sports Book
revenue during 2019. With an amended lease, the City will begin receiving 0.5% of
the handle from Sports Betting in FY 2021.
The current Dubuque market is approximately $120 million annually. DRA share of the
market was 41.2% in 2019 and 41.8% in 2018. The DRA has projected a 2% increase
FY 2021 Budget & Fiscal Policy Guidelines
Page 48
in gross gaming revenue for Calendar Year 2020. The DRA projects Sports Betting
revenue in 2020 of $750,000. The DRA gaming projections include minimal growth in
revenues over the next five years with a growth rate of 1% in FY 2021 and FY 2022 and
a growth rate of 0% in FY 2023 and beyond.
During 2019, Illinois passed legislation regarding six additional casinos, Sports Betting
and increased Video Lottery Terminals (VLT) through the state. The casino license
issued for Rockford will be the closest. The Rockford City Council voted on October 7,
2019 to certify the Hard Rock Casino as the city's choice for a new casino. The Illinois
Gaming Commission has until October 28, 2020 to approve the license for the new
Rockford casino. The Hard Rock Casino plans construction of a $330M casino and
hotel. Construction will last approximately 18 to 24 months.
Sport Betting is waiting for rules to be developed before issuing licenses. Sports
Betting authorized betting at the state's casinos, racetracks and venues such as Wrigley
Field and Soldier Field.
Illinois is allowing an increase in the number of VLT's per location from 5 to 6. Currently
in the five counties in Illinois between Dubuque and Rockford, there are approximately
400 locations with 2076 VLT's. Each able to increase by one additional machine or a
20% increase in the number of terminals in this area. The terminals in this five county
area had revenue of $120M in 2019, similar to the amount wagered in the Dubuque
market.
The 50¢ 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. The riverboat related tax on bets increased from $341,750 in FY 2020 to
$344,400 in FY 2021 .