Budget Recommend. FY 2007
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MEMORANDUM
March 1, 2006
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Fiscal Year 2007 Revised Budget Recommendation
The U.S. Department of Housing and Urban Development (HUD) notified the City of Dubuque
that the Community Development Block Grant (CDBG) allocation in FY 2007 will be reduced
from $1,398,731 to $1,256,479 ($142,252 reduction).
CDBG requirements separate dollars under three categories of spending: Administration,
Public Service and Uncapped. The only category that affects the general fund is spending for
administration, which is now over its cap by $28,450, because of reduced Federal funding
level. This amount of Economic Development administrative expenses over the limit must be
shifted to General Fund. Decisions regarding the remaining CDBG shortfall of $113,792 will
be made on the March 14, 2006 Public Hearing and will only affect CDBG funds.
Budget Director Dawn Lang has informed me that the City of Dubuque has received revised
January 1, 2005 valuation totals from Denise Dolan, Dubuque County Auditor which affect
the Fiscal Year 2007 budget. The valuations were revised due to:
1) Removal of the rollback on Dubuque railroad bridge value. This results in increased
taxable value of $5,987, which translates to $60 in additional property tax.
2) The Iowa Supreme Court granted a stay of a District Court contempt ruling regarding
the City of Dubuque for extending services to the 700 acre Westside annexation. This
resulted in a shift of the valuation of the west end annexation from Dubuque townships
to the City of Dubuque.
The values increased for Residential by $765,871, Commercial by $267,278 and
Agricultural by $196,338. This translates into additional property taxes of $10,901.
The original valuations received from the Dubuque County Auditor's office excluded
the 700 acre west end annexation; therefore this shift positively impacted property tax
revenues.
I recommend the $28,450 of general fund dollars needed to cover the administrative
expenses in the Economic Development Department over the maximum CDBG cap be
covered in the FY 2007 budget as follows:
· Additional property tax revenue ($10,961) from adding taxable valuation of
$1,039,136;
· Canceling/Changing previously recommended decision packages ($17,489):
1) Finance Department Decision Package #5. Cancel pay rate table software
modification. This was requested by Human Resources to modify the pay
rate table out 4 decimal places. Finance was able to find a manual
workaround to closely meet the requirements of Human Resources (savings
of $2,160 recurring and $7,200 non-recurring). The non-recurring portion is
considered immaterial and will be funded with a recurring source in FY
2008.
2) Park Division Decision Package #1: Changing recommended permanent,
part-time Maintenance Worker position from 1,664 hours to 1,250 hours
(savings of $8,129).
Attached is a summary of action items and their impact on the tax rate and average home,
I respectfully request Mayor and City Council approval of the revised FY 2007 budget
recommendations. This preserves the goal of no property tax increase for the average
homeowner.
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Michael C. Van Milligen
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Attachment
cc: Barry Lindahl, Corporation Council
Cindy Steinhauser, Assistant City Manager
Dawn Lang, Budget Director
CITY COUNCIL ACTION ITEMS FROM FISCAL YEAR 2007 BUDGET HEARINGS - AS RECOMMENDED
DEPARTMENT
City Wide
CDBG-Econ Devi.
DESCRIPTION OF ITEM
Impact of valuation change since budget recommendation R
(taxable valuation increased $5,987 -railroad rollback
removed)
Impact of reduction of Community Development Block R
Grant (CDBG) funds. This overstates the Administrative
Cap max by $28,450 in expense. Economic Development
Administrative costs must be shifted to General Fund.
Changes to Previously Recommended Decision Packages
DOLLAR
AMOUNT
IMPACT ON
GENERAL
FUND
($10,961)
$28,450
Finance Department Decision Package #5: Pay Rate Table Software Modification N ($7,200)
no longer needed. Non recurring expense is recommended R ($2,160)
to be used to cover a recurring expense, but is considered
immaterial and will be funded with a recurring source in
in FY 2008.
Park Division
Decision Package #1: Reduced Permanent, Part -Time R ($8,129)
Maintenance Worker from 1,664 hours to 1,250 hours)
TOTAL IMPACT $0
!Assessable Value 1,721,391,034'
TAX RATE
IMPACT
($0.00637)
$0.01653
($0.00418)
($0.00125)
($0.00472)
$0.00000
IMPACT ON
AVERAGE
HOME
($0.34)
$0.88
($0.22)
($0.07)
($0.25)
$0.00
Impact on Average Residential Homeowner
FY 06 Adopted l -Y 07
(+6.2% with new Values)
55,810 53,525
9.6991 9.9803
541.31 534.20
(47.04) (48.40)
10.35 0.00
504.62 485.79
Taxable Value
Tax Rate
Tax Credit
Homestead Adj
Taxes
Dollar Change
Percent Change
($18.83)
-3.73%