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Fiscal Year 2015 Recommended Budget Transmittal MessageMasterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Fiscal Year 2015 Budget Transmittal Message DATE: January 28, 2014 Dubuque bitetti All- America City 1 I 2007 • 2012 • 2013 In 2006, Mayor Roy Buol and the Dubuque City Council adopted sustainability as the City's top priority and that has been continued on an annual basis. While this has put Dubuque among the international leaders for successful local governance models, the important thing is what it has meant to Dubuque citizens. For the first time in the history of this region, the Dubuque Metropolitan Statistical Area exceeded 60,000 people working. The December 2013 number is 60,800! The unemployment rate is 4.1%, about 61 % of the national unemployment rate of 6.7 %. Dubuque's economy grew 5.1% in 2012 over 2011, the fastest growing economy in Iowa, and the 27th fastest nationally, according to the U.S. Bureau of Economic Analysis. This is more than double the national rate of 2.5% Gross Domestic Product growth. With just 3% of the state's population, Dubuque has added nearly 8% (5,200) of the state's new jobs from 2010 -2013. The 5,200 jobs is a 9.35% growth in jobs for Dubuque, a higher percentage increase than any other community in Iowa, with the next fastest job growth being in Iowa City at 6.98 %. According to the U.S. Census Bureau, the average household income in Dubuque rose from $27,027 in 1990, to $40,680 in 2010, a 50% increase, exceeding the rate of inflation. The average hourly wage from 1991 to 2013 grew from $9.56 to $18.86, also exceeding the rate of inflation. )01 515 u0 516 00 14 00 51200 510 00 $8.00 1990 Average Hourly Wage in Dubuque County from 1991 -2013 1995 2000 2005 - Average Wage (Nominal) - Average Wage (Inflation - adjusted 2013 dollars) $18.86(2013) 2010 2015 Source: Iowa Economic DevelepmentAuthodty. Inflation adjustment applied using the CPI- W price index for December .2023. The Federal Housing Finance Agency recently released home appreciation statistics. The change in the Metropolitan Area House Price Index over the last five years through the third quarter of 2013 is as follows: Dubuque Up 9.71% Sioux City Up 8.83% Waterloo Up 6.28% Iowa City Up 5.32% Quad Cities Up 3.93% Metro Area Average Up 3.74% Cedar Rapids Up 1.33% Council Bluffs Up 1.02% U.S. National Average Up 0.15% Des MoinesNVest Des Moines Down 0.5% Chicago Down 18.56% 2 COMPARABLE CITIES IOWA HOME PRICE APPRECIATION Change in FHFA Metropolitan Area House Price Index Five Year Average through 2013 -Q3 Dubuque Sioux City Waterloo Iowa City Quad Cities Metro Area Average Cedar Rapids Council Bluff U.S. National Average Des Moines /W.Des Moines 1.33% 1.02% • 0.15% 3.93% 3.74% — -0.50% PERCENTAGE OF APPRECIATION 5.32% 6.28% 8.83% 9.71% Dubuque citizens are seeing more employment opportunities, rising wages and rising home values. The percentage change in assessed valuation from 2009 -2013 compared to other cities in Iowa is as follows: 4% - 2% - 0°% 9.05% 8.08% 5.40% 3.26% 10.93% 8.22% 8.41% 7.44% i 6.14% .r a c c tie c� o � g e rga -2% P y 143 ,mo •+ a m5 4ea co °c O �O -6 °% 3 Recent findings from the Equality of Opportunity Project show that children raised in Dubuque are among the most likely in the nation to be upwardly mobile. The study, conducted by researchers at Harvard University and the University of California, Berkeley, found that children who were born in Dubuque to parents in the nation's lowest income quintile had a 17.9% chance of being in the highest income quintile before reaching age 30. This is well above the national average of 10.6% and, of the 741 metropolitan commuting areas examined, places Dubuque in the top 60, or 8 %. When compared to similar -sized commuting areas with a population between 150,000 and 200,000, Dubuque ranks first out of 58, and by a sizeable margin; Dubuque's 17.9% likelihood is 2.1 % greater than the next - highest probability, and is nearly double the national average of 9 %. Dubuque ranks first among the ten largest cities in Iowa, also, with nearly a 3% higher probability than the next - highest city at 14 %. These findings are significant because they highlight the exemplary role that Dubuque plays in both creating opportunities for children and young adults, and in enabling them to attain success. MSN.com recently posted the 10 cities with the largest job decline over the last year. Any time you think Dubuque's success is similar to that of other Midwest cities, you can look at information like this. Three of the cities were Midwest cities, two in close proximity to Dubuque. Decatur, Illinois, has a population of 75,407. The Decatur metropolitan area has an 11.7% unemployment rate. There were roughly 50,800 non -farm jobs in the metro area as of October 2013, down from 53,100 one year earlier, for a 4.3% decline in employment. It is even more pronounced in manufacturing, where employment has declined 16 %. Also, agricultural processing giant Archer Daniels Midland has announced plans to move its global headquarters and top executives out of the area. The Chicago Tribune reported that "Among the reasons the company offered for moving its headquarters was its need for, 'an environment where we can attract and retain employees with diverse skills, and where family members can find ample career opportunities." Peoria, Illinois, has a population of 115,687. The Peoria metropolitan area has an 8.7% unemployment rate, 1% higher than the year before. There were 183,700 non -farm jobs in Peoria in October 2013. This is 4,100 less than the year before, a 2.2% decline. Manhattan, Kansas, with a population of 56,069, is the home of Kansas State University. The Manhattan metropolitan area has struggled to grow jobs in recent years. The unemployment rate in October 2013 was 4.7 %, up from October 2012. The number of non -farm jobs has declined 3.5% in that period to 57,100 total non -farm jobs. Dubuque had 1.35% job growth during this same period, an increase of 800 jobs. 4 Looking at just development agreements executed by the City with private companies in 2013, Dubuque will get 280 new jobs, $64 million in new capital investment and approximately 105,000 square feet of new non - residential construction, over the next year. Dubuque's resurgence from the desperate times that began in the 1970s and the 1980s are in sharp contrast to what has happened to these other nearby cities: City 1970 Population 2010 Population % Change Gary, IN South Bend, IN Flint, MI 175,415 125,580 193,317 80,294 75,065 102,434 - 54.2% - 40.2% - 47.0% Detroit, MI 1,511,482 713,777 -52.8% Akron, OH 275,425 199,110 -27.8% Cincinatti, OH 452,524 Cleveland, OH 750,903 296,943 -34.4% 396,815 - 47.2% Dayton, OH 243,601 141,527 41.9% Toledo, OH 383,818 287,208 -25.2% Youngstown, OH 139,788 66,982 -52.1% Comparing the Dubuque unemployment rate with the U.S. unemployment rate annually since 1980 would indicate that the City is weathering the economic downtown better than others and better than the City did in the past, indicating that the City is well positioned to benefit from an economic recovery. 5 Historical Chart - Unemployment Rate 1980 -2013 Annual Unemployment Rate Year Dubuque United States Difference 1980 8.6 7.1 +1.5 1981 10.7 7.6 +3.1 1982 14.2 9.7 +4.5 1983 12.1 9.6 +2.5 1984 8.5 7.5 +1.0 1985 9.6 7.2 +2.4 1986 7.8 7.0 +0.8 1987 6.1 6.2 -0.1 1988 5.5 5.5 0.0 1989 6.0 5.3 +0.7 1990 5.9 5.6 +0.3 1991 6.1 6.8 -0.7 1992 5.5 7.5 -2.0 1993 4.1 6.9 -2.8 1994 3.7 6.1 -2.4 1995 3.7 5.6 -1.9 1996 5.8 5.4 +0.4 1997 3.9 4.9 -1.0 1998 3.2 4.5 -1.3 1999 2.7 4.2 -1.5 2000 3.3 4.0 -0.7 2001 3.7 4.8 -1.1 2002 3.5 5.8 -2.3 2003 4.2 6.0 -1.8 2004 4.5 5.5 -1.0 2005 4.4 5.1 -0.7 2006 3.8 4.6 -0.8 2007 4.0 4.6 -0.6 2008 4.3 5.8 -1.5 2009 6.1 9.3 -3.2 2010 6.3 9.6 -3.3 2011 5.5 8.9 -3.4 2012 4.9 8.1 -3.2 2013 4.5 7.4 -2.9 From 1980 to 1990, the Dubuque unemployment rate was less than the national unemployment rate only once. Since 1991, the Dubuque unemployment rate has been lower than the U.S. unemployment rate 23 of those years, with only one (1996) being higher by 0.4 %. The national unemployment rate for 2013 was 7.4% and the Dubuque rate was 4.5% 6 In 2013 and 2014, Dubuque was the beneficiary of several recognitions. Considered the academy award of civic engagement, Dubuque for the third time (2013, 2012 and 2007) in six years was recognized as an All- America City by the National Civic League. This is the premier local government recognition program in the country, and in the 64 -year history of the award, I believe that this is the first time a community received the award three times in such a short period of time. The City of Dubuque was also recognized by American City and County Magazine for the Water & Resource Recovery Center project as a Crown Community for the third time (2003, 2009 and 2013). Forbes designated Dubuque 14th in the Nation for "Best Small Places for Business and Careers" and #50 among 179 small cities for "Cost of Doing Business." The Milken Institute selected Dubuque as the "10th Best Performing Small Metro." Site Selection magazine ranked Dubuque #5 for Top Metropolitan Areas among metros with a population under 200,000. Kiplinger's Personal Finance named Dubuque one of "10 Great Places to Live." The Harvard Kennedy School Ash Center for Democratic Governance and Innovation picked Smarter Sustainable Dubuque as one of the "Top 25 Innovations in Government." The Equality of Opportunity Project by Harvard University and the University of California, Berkeley ranked Dubuque in the top 60 in the nation for upward mobility. The U.S. Department of Commerce Bureau of Economic Analysis ranked Dubuque the fastest growing economy in Iowa and the 27th fastest growing nationally. Farmer's Insurance designated Dubuque the "10th Most - Secure Small City in the U.S." Movoto Real Estate proclaimed Dubuque #14 for "America's Best Small Cities to Move To." Mayor Roy D. Buol received some significant individual recognition over the last year. In the annual PA Times publication from the American Society of Public Administration, the Public Service Supplement recognized individuals who are serving as role models in public service. Of the 14 individuals recognized in 2013, Mayor Buol was the only elected official. Mayor Buol was also recognized by the U.S. Conference of Mayors and Americans for the Arts with the 2014 Public Leadership in the Arts Award for Local Arts Leadership for cities with a population of less than 100,000. 7 Mayor Buol was selected as co- chairman of the Mississippi River Cities & Towns Initiative (MRCTI) along with the Mayor of Memphis, Tennessee. The MRCTI is a mayoral -led effort to bring national attention back to the Mississippi River and spearhead a new level of regional cooperation to make it more sustainable. Dubuque was featured in several publications this year. The Sustainable Cities Institute of the National League of Cities published a piece titled, "Dubuque Gets Engaged: The Critical Role of Partnerships in Moving Sustainability Forward." The National League of Cities featured Dubuque in a Municipal Action Guide, "Reconnecting Youth through Dropout Reengagement Centers." The Sustainable Cities Collective published an article titled "Move to Dubuque, Not San Francisco." Governing magazine published an article titled "Corporate Entrepreneurs Are at the Heart of Downtown Revitalizations (The Dubuque Story)," by Alan Greenblatt. Dubuque was featured in a Huffington Post blog by Michele Hunt, titled "DreamMakers Creating Sustainable Communities. Dubuque Iowa - surprised? So was I!" Over the last year, Mayor Buol and others continued efforts to spread the word about Dubuque. They were willing to sacrifice their time, the thing that is most precious to us all, and deal with the many inconveniences of travel to continue to market Dubuque. The City has also had the following national and international exposure in 2013 and 2014: International presentations Name of participant Event Date Location Sponsor Mayor Buol Smart Cities Canada Summit* January 23 - 25, 2013 Toronto Canada Strategy Institute *Mark Seckman of GDDC also attended this at the request of the City of Dubuque International Exchange /Fellowships ICMA Delegates hosted in Dubuque Name of participant Event Date City /Country Sponsor Mr. Yigang Feng ICMA Fellowship Oct 18 • Nov 3, 2013 Changsha, Hunan, China ICMA Mr. Peter Ridge ICMA Fellowship Oct 18 • Nov 3, 2013 Palmerston North, New Zealand ICMA Irina Koleva Project ABLE (American Bulgarian Library Exchange) 2006 Sofia, Bulgaria American Bulgarian Library Exchange City staff that have traveled abroad as an ICMA Fellow: Name of participant Title City /Country visiting Date Sponsor Susan Henricks Library Director Sofia, Bulgaria 2006 &June 2013 Project ABLE Kelly larson Human Rights Director Changsha, Hunan, China Feb /March 2014 ICMA Chris Kohlmann Information Services Manager New Zealand Feb /March 2014 ICMA 8 Delegates /Delegations Delegate /Delegation City Visiting Dubuque Date Purpose Delegate representatives Dornbirn, Austria May 12. 14, 2013 Sister City exchange Mayor Buol, Kevin Firnstahl & Local Delegates Handan, China August 27 - 29, 2013 Sister City exchange Dignataries from Handan Local Government Handan, China October24, 2013 State of Iowa visit Dignataries from Handan Local Government Hitachi Corporation March 19, 2013 SSD site visit Mr. Hirasaw & Mr Tsuchiya Fukushima Japan October 16, 2013 SSD site visit Fukushima Prefecture Congress representatives Nigeria December 12, 2013 MCFC Nigerian Ambassador GeoffreyTeneilabe Dubuque Sister City Visit Sister City name Date Purpose Delegate representatives National presentations Name of participant Event Date Location Mayor Buol New Partners for Smart Growth February 8 -9, 2013 Kansas City, Mo Mayor Buol Mississippi River City & Towns Initiative March 2013 Washington, DC Michael Van Milligen IBM Connect 2013 Conference January 27-31, 2013 Lake Buena Vista, FL IBM Michael Van Milligen 2013 Minnesota City /County Managers Conference May 1 -3, 2013 Nisswa, MN Minnesota City/ County Management Michael Van Milligen League of Minnesota Cities Centennial Conference June 21, 2013 St. Paul, MN League of Minnesota Cities Laura Carstens New Partners for Smart Growth February 8 -9, 2013 Kansas City, Mo Laura Carstens National Main Streets Conference April 14, 2013 New Orleans, LA Laura Carstens Ground Partnership Annual Conference May 21, 2013 Gettysburg, PA John Klosterman Association North American Snow Conference April 8, 2013 Charlotte, NC Jon Dienst International Low Impact Design Symposium August 21, 2013 St. Paul, MN Dean Mattoon Mayors Innovation Project June 29, 2013 Chicago, III Affirmation of the leadership role the City of Dubuque is taking on internationally includes the previous invitations Mayor Buol received to speak around the world. He has spoken at a Brookings Institution conference in Washington, D.C.; IBM conferences in Arizona and New York; the Global Smart City Summit in Taiwan; National League of Cities events in Sweden and Germany; the Texas Municipal League Annual Conference in Grapevine, Texas; the World Cities Summit in Singapore, which had over 18,000 attendees, the Smart City Summit in Toronto, Canada, and at the New Partners for Smart Growth Conference in Kansas City, where he was invited to conduct three separate breakout sessions. These presentations are at no cost to the City as the event sponsors covered the costs. The City's successes, recognitions and ability to perform on innovative projects have also led to the City getting access to outside funding sources. In 2013, the City achieved outside funding of $246 million from partnering with others, to include: 9 Outside Funding Brought Into the City of Dubuque in 2013 Name /Grant Source Amount Linseed Oil Building /State Community Development Block Grant $2,200,000.00 Southwest Arterial /Iowa Department of Transportation $140,000,000.00 Bee Branch Watershed Project /Iowa Department of Revenue $98,500,000.00 Lead Abatement Grant/DuPont $50,000.00 Digitize City Directories /Historical Resource Development Program (HRDP) $2,970.00 Digitize City Directories /Annual Grant Program (from Dubuque Old House Enthusiasts) $1,500.00 Northwest Arterial Trail /Resource Enhancement and Protection (REAP) Grant Program $200,000.00 Update Design Guidelines /Dr. Frank Henry Landes Preservation Fund for Iowa /National Trust for Historic Preservation $5,000.00 Catfish Creek Management Plan/Watershed Management Authority Planning Grant (Phase II) /Iowa Economic Development Authority $187,330.00 Smart Transit (for Night Rider and Midtown Loop) /Iowa Department of Transportation /Federal Highway Administration $614,105.00 Shopping Circulator /Iowa Department of Transportation $187,836.00 Traffic Safety Grant/lowa Department of Transportation $478,750.00 Brownfields /Environmental Protection Agency $400,000.00 Caradco /Community Development Block Grant $1,299,000.00 Iowa Department of Natural Resources $79,374.36 Airport Terminal /Federal Aviation Administration $1,987,313.00 Airport Entry Improvements /State Iowa Department of Transportation $108,456.00 TOTAL $246,301,634.36 With all this success comes a significant need for workforce development. In 2013, the City Council decided to support Inclusive Dubuque with a $75,000 per year contribution. Inclusive Dubuque is a local initiative focused on creating a vibrant and welcoming community to ensure the region's success today and into the future. For the past two years, leaders from the business, education, nonprofit, faith, and local government sectors have been meeting to discuss diversity and inclusion in Dubuque. Together they created a broad vision for our community that includes: • A Welcoming Community — an environment in which all people feel respected, valued, and engaged • Quality of Life — everyone has access to resources and can enjoy a sense of well -being and belonging • A Strong Economy and Workforce — that attracts and retains global talent to position the community for continual economic growth • A Culturally Competent Education System — learning by honoring one's own culture and valuing other cultures through civility, compassion, and respect • Open Communication — a culture focused on respecting and understanding all perspectives while seeking common ground 10 • An Engaged Community — open exchange of ideas and opportunities that contribute to an inclusive community There are many benefits including economic development, a home -like environment, promotion of equality, and safeguarding fairness. As Dubuque grows and becomes a part of a global economy, we need to adapt and welcome the students and workforce of the future. As our community experiences continually changing demographics, embracing people of all races, religions, genders, and educational backgrounds will help us to succeed in the 21 st century marketplace. According to the Center on Education and the Workforce's forecast for 2018, 30 million new and replacement jobs in the U.S. will require some college or more. However, U.S. colleges and universities are only expected to produce 20 million graduates. There will be intense competition for a qualified workforce and we must create an environment where local college graduates, our children, and our grandchildren want to stay for the opportunities available here. In 2012, Dubuque was identified as the sixth brainiest metropolitan area in the country. There are currently over 322,000 college students living within 100 miles of Dubuque and these colleges turned out 54,000 graduates in 2012. We want to be the type of community where they will want to live after they graduate. I recently read an article entitled "Where You'll Want to Live in 2032," which summarized a Gallup analysis. It concluded that the best place to live in 20 years will have tackled unemployment, financial worry, healthcare costs, obesity, and education challenges. It will be a place where "most residents are healthy, optimistic, employed in good jobs they love, and enthusiastic about their communities." The study identified the West North Central Region (Iowa, Kansas, Minnesota, Nebraska, North Dakota, and South Dakota) as the region poised for the brightest future. As Dubuque leads the country out of the recession and beyond, Mayor Buol and the Dubuque City Council are setting the tone and creating the atmosphere to ensure Dubuque remains a community where you want to live today and in 2032. Like most communities, Dubuque has changing demographics. How we respond to those changes will determine Dubuque's future success. These changes offer the opportunity to share, learn, and grow from our individual experiences, connect with people, and strengthen our community. Initial Inclusive Dubuque partner organizations include: Alliant Energy City of Dubuque Clarke University Community Foundation of Greater Dubuque Diamond Jo Casino Dubuque Area Chamber of Commerce 11 Dubuque Area Congregations United Dubuque Area Labor Management Council Dubuque Community School District Dubuque Racing Association Greater Dubuque Development Corporation Hormel /Progressive Processing IBM John Deere Loras College Medical Associates Multicultural Family Center Mystique Casino NAACP - Dubuque Chapter Northeast Iowa Community College Prudential Retirement Tri -State Independent Physicians University of Dubuque University of Wisconsin - Platteville Inclusive Dubuque is an important part of the community's workforce development strategy. In 2013, for the first time, Dubuque employeers, through the annual interviews of over 250 CEO's by the Greater Dubuque Development Corporation, identified a shortage of qualified workers as the biggest impediment to future growth. According to the 2010 U.S. Census, the median age in Dubuque is 38 years old (compared to 37.2 years old, nationally). Dubuque is about to start experiencing this tsunami of retirements of the Baby Boom generation. Futurist Rebecca Ryan of Next Generation Consulting uses Canada as an example. If in 2020 every Canadian age 18 -99 was in the workforce, they would still be short four million employees. Without an effective strategy to have our children, grandchildren and local college graduates want to work in Dubuque, and without the ability to make Dubuque an attractive place for people to move to, the employment base will cease to grow. Without employees, local companies will expand elsewhere and new companies will cease coming to Dubuque, starting a long, slow decline. Inclusive Dubuque, Sustainable Dubuque, Opportunity Dubuque, Circles, DubuqueWorks, planning efforts and other programs, including community enhancement programs, are the keys to Dubuque's future workforce development success. The foundation of the City's success is the annual goal- setting process by the Mayor and City Council. 12 Each year, the Dubuque City Council completes its annual goal- setting sessions. Over the course of two days in August, City Council members reaffirmed the 15 -year vision statement, mission statement, and developed priorities for a 2013 -2015 policy agenda. 2028 VISION STATEMENT The City of Dubuque is a progressive, sustainable city with a strong diversified economy and expanding global connections. The Dubuque community is an inclusive community celebrating culture and heritage and has actively preserved our Masterpiece on the Mississippi. Dubuque citizens experience healthy living and retirement through quality, livable neighborhoods with an abundance of fun things to do; and are engaged in the community, achieving goals through partnerships. Dubuque City government is financially sound and is providing services with citizens getting value for their tax dollar. CITY MISSION STATEMENT The City's mission is to deliver excellent municipal services that support urban living and a sustainable city plan for the community's future and facilitate access to critical human services which result in financially sound government and citizens getting services and value for their tax dollar. FIVE -YEAR COMMUNITY GOALS FOR A SUSTAINABLE DUBUQUE • Economic Prosperity • Social /Cultural Vibrancy • Environmental Integrity FIVE -YEAR CITY GOALS • Planned and Managed Growth • Partnering for a Better Dubuque • Improved Connectivity — Transportation and Telecommunications FIVE -YEAR ORGANIZATIONAL GOAL • Financially Responsible City Government and High Performance Organization POLICY AGENDA 2013 -2015 Top Priorities On alphabetical order) • Annexation: Direction on specific actions a) study implementation, b) corridor to Airport • Arts and Culture organizations city support: Evaluation, potential projects review and priority, overall direction, funding level • Dubuque welcoming, inclusive community: Action plan • Four Mounds Foundation /HEART program city support • Management and Employee Succession Planning and Funding • Master Plan for Chaplain Schmitt Island: Development • Safe Community Initiative: Monitoring, future direction, specific actions • Washington Neighborhood Strategy: Business attraction, HEART program, update housing stock, homeownership, promotion, police substation 13 High Priorities On alphabetical order) • Bee Branch Project: Specific projects, direction, funding • Clean Air Attainment Strategy • Greater Dubuque Development Corporation support • Historic Millwork District: Development, project monitoring • Indoor Aquatic Center: Direction • Riverfront Leases: Agreement • Smarter City: Smarter health and wellness, smarter travel, smarter discards • Southwest Arterial Project: Design, land acquisition, intersecting roads MANAGEMENT AGENDA 2013 -2015 Economic Prosperity Goal • Dubuque Initiatives: Next Step • Workforce Market -Rate Housing • Marina Store: Operational • Project HOPE Environmental /Ecological Integrity Goal Sustainability Purchasing Policy and Procedures • Automatic Vehicle Location (AVL) for Transit • Grand River Center Electric Meters Project • City Operations: Sustainability Performance Measures • Sustainable Dubuque Community Grant • America's River III Task Force • Plastic Bag Reduction Strategy: Implementation • Fats /Oils /Grease: Policy, Program and Enforcement • Dubuque Metropolitan Area Solid Waste Agency (DMASWA) 28E Agreement: Evaluation • Community Climate Action & Resiliency Plan -50% Greenhouse Gas Reduction by 2030: Implementation Social /Cultural Vibrancy Goal • City Workforce Diversity: Recruitment and Selection • Territory Accountability Design: Targeted Actions • Multicultural Family Center Building Expansion • Intercultural Competency Program within City Government: Self Assessment, Training • Intercultural Competency Program for the Community: Marketing to School District, Nonprofit and Community Organizations, Businesses • Police /Race Dialog • City Life: Implementation • Local ADA Compliance Program • Leadership Enrichment After School Program (LEAP) • Firefighter Internship for Recruitment of Diverse Workforce • Racial Profiling: Problem Analysis, Action Plan • Community Engagement Strategy: City Actions 14 Planned & Managed Growth Goal • Inflow and Infiltration Program /Home Inspections: EPA Consent Decree Implementation • City Comprehensive Plan: Update • Flood Wall: Funding, Evaluation, Cell Protection • Statewide Urban Design and Specification City Engineering Standards (SUDAS) City Engineering Standards: Update • Washington Street Row House Units: Sale • Historic Preservation Program: Evaluation, Update • Downtown Loan Program: Implementation • West Third Street Reservoir Study • Housing Choice Voucher Program • Water and Sewer Service Extension to City Residents and Businesses Partnering for a Better Dubuque Goal • Parks /Schools Joint Projects and Services: City Actions • City Volunteer Program: Development • Sister City Program: Delegation to Potential City • Veterans Memorials: Direction • Handicap Accessibility for Parks: Direction • Bridges Out of Poverty Program: City Support Improved Connectivity: Transportation and Telecommunications • Smart Transportation Program • Traffic Signal Synchronization: Citywide • Amtrak Train Platform (Port of Dubuque): Funding • Roundabout: ROW Acquisition a) University /Asbury; b) Radford /Pennsylvania • Intermodal Transportation Facility in Historic Millwork District • Air Traffic Control Tower: Funding Financially Responsible City Government and High Performance Organization • Website Content Management (CivicPlus) • 900 MHz Data System: Expansion • Employee Wellness Program: Five -Year Goals, City Internet Posting • Employee Involvement Teams: Expansion • Healthcare Cost Containment • Police Officer Recruitment and Retention • Records Management and Retention • City Hall Protocol and Safety • New Computer -Aided Drafting (CAD) Software • Emergency Police Dispatch and Emergency Fire Dispatch • New Fire Pumper • Disaster Preparedness and Recovery Plan: Discussion • Environmental Sustainability Management System (ESMS): ISO 14001 Model Program • Affordable Care Act: Analysis of Impacts 15 Major Projects • State Revolving Fund (SRF) Green Alley Projects • Port of Dubuque Park: Development • City Greenhouse Project • Water & Resource Recovery Center Project • Locust and Iowa Ramps: Renovation Project • North Softening Basin Renovation Project • Comiskey Park Improvements • Northwest Arterial Trail — Bergfeld Recreation Trail Connection • Bunker Hill Golf Course Irrigation Improvements • Airport Terminal Project • Elm Street Reconstruction Project • One Way — Two Way Conversion Project • Cedar Cross Road: Design • Wacker and JFK Traffic Signalization Project • North Cascade Road: Design • White Street Traffic Signal and Improvements Reconstruction (at 14th and 20th) • US 20 /Fremont Avenue Traffic Signal: Upgrades • NW Arterial /Chavenelle Intersection Improvement Project The foundation of the community's success is Sustainable Dubuque. "Dubuque is a viable, livable, and equitable community. We embrace economic prosperity, social /cultural vibrancy and environmental integrity to create a sustainable legacy for generations to come." These 12 principles guide government, business, non - profit, and individual actions in Dubuque. Community planning documents including the Comprehensive Plan, Long - Range Transportation Plan, Comprehensive Economic Development Strategy, and many others are guided by this sustainability framework: • Community Design - The built environment of the past, present and future which contributes to its identity, heritage and sense of place. Smart Energy Use - Energy conservation and expanded use of renewable energy as a means to save money and protect the environment. Resource Management - The benefits of reducing, reusing and recycling resources. Regional Economy - A diversified regional economy with opportunities for new and green markets, jobs, products and services. • Green Buildings - A productive and healthy built environment. • Community Knowledge - Education, empowerment and engagement to achieve economic prosperity, environmental integrity and social /cultural vibrancy. Healthy Local Foods - The benefits of wholesome food from local producers, distributors, farms, gardens and hunters. Community Health and Safety - Systems, policies and engagement to ensure that all residents have access to healthy and safe lifestyle choices. 16 • Reasonable Mobility - Safe, reasonable and equitable choices to access live, work and play opportunities. • Healthy Air - Fresh, clean air, reduced greenhouse gas emissions and minimized health risks. • Clean Water - Water as the source of life, seeks to preserve and manage it in all forms. • Native Plants & Animals - Biodiversity through the preservation, restoration and connection of nature and people. The City of Dubuque continues to be a leader in creating a sustainable community and has been recognized as an International Model as a result of the Smarter Sustainable Dubuque partnership with IBM Research and a national model for the Sustainable Dubuque initiative, which includes the annual Growing Sustainable Communities Conference. September 2013 marked the sixth successful year of hosting this near zero -waste conference. The purpose of this conference, as originally envisioned by Mayor Buol, was to create a venue that would bring together policy decision makers, businesses, institutions, organizations and citizens every year to get up -to -date research on sustainability and best practices, to raise the level of awareness of issues impacting our communities and help understand issues that serve as barriers to sustainability, and provide a venue to seek solutions. What started out in 2007 as a half -day event first sponsored by the City of Dubuque and Rockefeller Brothers Fund, is now a two -day event that last year drew nearly 500 attendees who came from 111 different cities in 20 states as well as international attendees. While there are other sustainability venues, few, if any, are organized by a local government with the intent to provide a forum for peer -to -peer learning based upon real experiences and relevant best practices. Dubuque's conference provides just such an opportunity, showcasing state -of- the -art equipment from local and national providers, offering a choice among dozens of break -out sessions, mobile workshops and featuring nationally -known speakers, including this year's keynotes Michele Hunt, author of Dreammakers; Rebecca Ryan, futurist, author and founder of Next Generation Consulting; and Deb Frodl, Global Director for GE's Ecoimagination division. Family Self- Sufficiency (FSS) is a HUD program for Housing Choice Voucher Program participants. The program encourages communities to develop local strategies to help voucher families obtain employment that will lead to economic independence and self - sufficiency. The City of Dubuque is expanding its Family Self- Sufficiency Program by incorporating and including the Circles Initiative programs, which promote economic empowerment and assist families in creating their own personal paths out of poverty, expanding opportunities, making connections, and eliminating barriers within the community and their families. In 2013, three City of Dubuque FSS coordinators worked with 153 families, meeting monthly to provide support services including financial and homeownership counseling, 17 job search and retention training, and resource referral to prepare them for economic self - sufficiency, including the possibility of homeownership. The Circles Initiative is part of an innovative national movement that connects volunteers and community leaders to families wanting to make the journey out of poverty. Volunteer Allies help families break the cycle of poverty by sharing their time and friendship. There are barriers that keep even the most motivated from achieving prosperity, but Circles breaks down these barriers by expanding opportunity and support for families as they create their own paths to stability. Circles encourages growth from people of all financial classes and engages the community as a whole, so we can work together to create deep and lasting change in Dubuque. Project HOPE, a partnership with the Community Foundation of Greater Dubuque, Greater Dubuque Development Corporation, and Northeast Iowa Community College, is designed to serve as a catalyst that helps service providers, employers, and job seekers connect to create opportunity for long -term employment. Dubuque's Green Alley Program, partially funded by CDBG, uses interlocking, permeable pavers to assist in infiltration of stormwater, reducing flooding and improving quality of water entering the Mississippi River. The Housing and Community Development Department also facilitates the City's Urban Revitalization Program, which focuses on the revitalization of properties in Dubuque's older neighborhoods. Owners of residential property in Dubuque's designated urban revitalization areas are eligible to apply for a 10 -year property tax exemption for qualified new improvements. The Purchase of Service Grant Program is designed to provide support for human service programs in Dubuque that further the City's goals, objectives, and priorities. Non - profit organizations that provide year -round human services programs are eligible to apply. Community development is extremely important to Dubuque's continued economic prosperity, environmental integrity, and social and cultural vibrancy. We continue to do our best to provide quality, livable neighborhoods. The Housing and Community Development Department has an ongoing partnership with the Four Mounds Foundation HEART (Housing Education And Rehabilitation Training) Program to rehabilitate residential properties in preparation for sale to first - time homebuyers. To date, 24 properties have been renovated through this partnership. The HEART Program provides hands -on training and programming for at- risk and disengaged youth. Participants are revitalizing the community while working toward post- secondary education, developing viable careers, and becoming better leaders. 18 The Washington Neighborhood Development Corporation (WNDC) works in collaboration with the Housing & Community Development Department to build awareness and educate current and potential residents about housing programs and incentives offered in the Washington Neighborhood. Community Housing Initiatives (CHI) has committed $800,000 to partner with the City of Dubuque to continue rehabilitation efforts and promote homeownership opportunities within the Washington Neighborhood. These funds will be used for acquisition, rehabilitation and resale of approximately 18 homes. The Green and Healthy Homes Initiative (GHHI) is working collaboratively across jurisdictions and silos of funding to identify and remove barriers in order to achieve holistic, household- centric approaches to improving health, safety, livability and affordability of housing in Dubuque. The Initiative identifies citizens' needs in their homes, helps them address the needs, and assists residents learning how to maintain and sustain the improvements. Key partners are the City of Dubuque Housing and Community Development Department, Community Foundation of Greater Dubuque, City Health Services Department, Operation New View, Visiting Nurses Association, Northeast Iowa Community College, and the U.S. HUD Department, which provides funding through the Lead Hazard Control and Healthy Homes Production Grants. At the same time Dubuque is achieving economic success, Dubuque is becoming an even safer place to live. In 2011, Iowa was named the "ninth most peaceful state" based on rankings drawn up by the Institute for Economics and Peace, an international researcher that also issues a yearly Global Peace Index. The index defines peace as "the absence of violence." Crime numbers are improving for Dubuque and have been since 2007. Performance Measures "Part P" Crimes for Calendar Years 2002 -2013 Compiled by the Dubuque Police Department CY13 % CY13 % Over/Under Over/Under CY02 CY03 CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 Avg. Average Peak Year No. of Grim es Against Persons 117 109 95 118 121 149 122 118 75 124107" 208" 131 58.8% 0.00% Murder 1 1 1 1 0 1 0 2 1 1 2 0 1 - 100.0% - 200.00% Sexual Assault 65 52 41 48 61 72 54 43 38 43 43 38 50 -24.0% -47.22% Robbery 13 20 12 14 19 40 31 35 36 33 21 32 26 23.1% -20.00% Aggravated Assault 38 36 41 55 41 36 37 38 24* 47 120** 138** 54 156.0% 0.00% No. of Crim es Against Property 2137 2080 2,119 1,996 2,084 2,327 2,284 2,067 2,038 1,913' 1,992 1,791 2,069 -13.4% - 23.03% Burglary 454 422 464 437 501 669 526 519 503 455 583 431 497 -15.3% - 35.58% Burglary to Motor Vehicle 308 389 389 276 370 366 510 420 399 406 298 231 364 -36.5% - 54.71 % Theft 1264 1185 1,176 1,239 1,151 1,229 1,185 1,072 1,102 1,020 1,080 1,103 1,151 -4.2% - 10.98% Theft of Motor Vehicle 111 84 90 44 62 63 63 56 34 32 31 26 58 -55.2% - 71.11 Total 2254 2189 2,214 2,114 2,205 2,476 2,406 2,185 2,113 2,037 2,099 1,999 2,191 -8.8% - 18.98% 'Aggrmated Assaults: Calendar year CY1 0 inco porated a correction in he method for repotting Aggravate Assaults to the Uniform Crime R ports (UCR) to comply with the Fe eral UCR rules. The former reporting method would have shown 53 aggravated assaults. The 29 assault ifrerence was due to a eclassied of simple assaults. Correction of this error was not done f r the years prior to 2010, so those numbers are overstated Aggravated Assaults: Beginning in July 2012, I wa State Code Chang s and additions necessitated a reclassification of certain t pes of assn Its. 2013 marked the rst full Cale dar year with the new assifications. As a comparison, using the new methodology, CY1 2 had pretiously shown 41 Aggravated Assa Its but with the addition of additional State Codes and th law Chang s it now shows 120. U der the old methodology, CY13 wo Id have had 38 Aggravated Assaults, a drop of8 %from the previous year instead of a now reported 138. If of for the changes in reporting requirements, CY13 would have shown 108 Crimes Against P rsons, whit h would have been -11 5% of the retised average, and total Part 1 Crimes would have been 1,899, or -1 3.4% of the revised average. I � I I High Year 1--IPrevious High Year 19 900 800 700 600 500 400 300 200 100 0 770 545 537 i 438 435 430 418 354 328 308 254 1 e. 0\J �ecao �\chL�aQ,4i a�e\o° `QaQ`t' o ° +(•� ��Jo. .$• ie`' S e`' O as h` O e5 co J O O ti `e NO 10 largest cities in Iowa with a population greater than 50,000 people 2009 -2011. Above is based on the three year average of population and 3 year average of Part 1 Crimes according to the FBI's Uniform Crime Reports (UCR) for calendar years 2009 -2011 In 2013, Dubuque was ranked #10 in the Farmers Insurance "Top 20 Most - Secure Small Cities" nationally, among those with a population Tess than 150,000. While there is still much work to be done in the area of public safety, the City is moving in the right direction. As one of the City Council priorities, City staff will continue to implement the Safe Community Task Force recommendations. When I started with the City in January 1993, the first thing I did on my first day of work was walk over to the bookshelf in my office and began reading the City's Comprehensive Plan. One problem, it was dated September 1936. Fortunately for me, in 1990 the City Council had formed a Long Range Planning Advisory Commission and they were just completing the visioning process called Vision 2000. This led to a two - year process to create a Comprehensive Plan. That plan has had three updates over the years, and is scheduled for a major rewrite over the next two years. In 1995, the City Council adopted the first Comprehensive Plan for the City of Dubuque since 1936. Several studies came from that plan that launched the work plan for the City for the next 10 years, including a Riverfront Plan, a Utility Extension Plan, an Industrial Park Development Plan, a Downtown Plan and others. The Industrial Park Development Plan identified that there were almost no industrial sites left in the community, with the Dubuque Industrial Center on Chavenelle Road at the Northwest Arterial and Radford Road developed in the mid- 1980's by Dubuque In- Futuro (now known as Dubuque Initiatives) having only a few remaining sites. There were no private developers willing to invest the significant capital needed, in the tens of 20 millions of dollars, to acquire a sizeable parcel of land, extend utilities to that property, put utilities within the site, grade the site, remove any rock, build a road to the site and a road within the site, and then put in the landscaping and lighting only to wait patiently for an existing company to be ready to expand or a new company to want to come to Dubuque. The industrial park development study identified the need for 900 acres of property to serve the needs of the City for the next 20 years. The City Council directed that the City acquire the needed property. The City did acquire over 900 acres of property and began developing the land. About 200 acres of the land was donated to the City by Dubuque County, with just a promise that they would get a share of any future sales on that site. These properties have been developed into the Dubuque Technology Park, Dubuque Industrial Center West, and Dubuque Industrial Center South. Two other City - developed areas are Kerper Court, home to Eagle Window and Door, and the Port of Dubuque, home to Flexsteel, McGraw -Hill, and others. The study's prediction that this was a 20 -year supply of property is proving to be very accurate. While there might be a few sites remaining, in 2019, when the first of the Urban Renewal Economic Development District Tax Increment Financing areas (which have a 20 -year life by state law) expires the City does need to begin acquiring and developing new industrial sites. The most important reason to develop industrial parks is to provide a place for existing businesses to expand. The following are the results of this industrial park development: Over 1,000 Acres of Industrial Parks/Technology Parks • Port of Dubuque (1,290 employees) • Dubuque Industrial Center West (1x285 employees) • Dubuque Industrial Center. (1,244 employees) • Dubuque Technology Park (1;028 employees) • Kerper Court Industrial Area (710 employees) • Dubuque Industrial Center North (116 employees) 21 The Companies include: Adams Company Alliant Energy Arts -Way Vessel Systems Automated Pre -Sort Boyd Gaming Cartegraph DDI, Inc. Dubuque County Historical Society Dubuque Screw Products Eagle Window & Door (Anderson Window) Flexsteel Giese Manufacturing Hartig /Med One Hodge Companies Hormel ITC Info Safe Kendall Hunt Kunkel & Associates McGraw -Hill Higher Education McKesson Corporation Medline P & L Ventures Sedgwick CMS Spiegel Family Realty Straka Johnson Architects Theisen Supply TM Logistics Tri -State Industries Universal Tank Vanguard Windstream These industrial and technology parks are designated as Urban Renewal Areas, allowing for the use of Tax Increment Financing to assist in development costs and to provide business incentives. The impact of the use of Tax Increment Financing (TIF) in Dubuque is as follows: New Investment Retained Jobs New Jobs Total Jobs $556,901,732 6,287 3,341 9,628 These almost 10,000 employees live in our communities, spend their paychecks, buy homes, rent apartments, shop at stores, eat in restaurants, buy gasoline and groceries, attend events, donate time and money to not - for - profits, pay taxes and send their children to school. The businesses paid to construct their facilities, put construction workers to work, and on a continuing basis they buy goods and services in the community. Thousands of more jobs and millions of dollars of capital investment are the result of all of these business and employee expenditures. This is a tremendous immediate return on investment of TIF dollars. But that immediate return is not all there is. The first of the major TIF areas begins to expire in 2019, (other smaller ones have expired in the past, providing approximately $450,000 in annual property tax revenue to taxing bodies). Should these industrial and technology parks achieve full build out by 2019, which there is reason to believe they will, the taxing bodies will start to receive an annual property tax payment (that will grow every year) of approximately $4 million (should there not be another business built or lot sold, the return would be $2 million per year) divided as follows: 22 R e s u l t s City of Dubuque New Schools, County, City Tax $ - Full Build -Out of Retiring TIF Districts, In First Year of Expiration 53,000,000 52,700,000 52,400,000 52,100,000 51,800,000 51,500,000 51,200,000 5900,000 5600,000 5300,000 S $1,090,499 • Other, $24,346 • NICC, 529255 • County, 5708,002 • City, 5356,604 • DCSD, 5472,292 1 $2,857,976 • Other, 563,805 • NICC, 576,673 • County, 5545,132 • City, $934,587 • DCSD, $1,237,780 5529,994 $9,610 4111110 111 $1,948,766 • Other, 543,506 • NICC, 552,281 • County, 5371,709 • City, 5637,206 • DCSD, 5844,004 $1,489,027 • Other, 533,243 • NICC, 539,947 • County, 5284,018 • City, 5486,927 • DCSD, 5644,893 Tech Park South - DtCW - Subarea B - Quebecor -2025 Kerper - 2032 DICW - Subarea C - DICW - Subarea 0 - Updated Dec. 2013 2019 2019 2031 2031 Total Annual Return to Schools, County, and City = $7,925,873 The projections are based on assessed valued increasing 3% each year and full build -out, with sale of all property. The use of Tax Increment Financing as a redevelopment and economic development tool is having transformational results in Dubuque. In 1983, there were 37,600 people working in Dubuque's Metropolitan Statistical Area (MSA) and as of December 2013, there were 60,800 people working in the Dubuque MSA. Another major use of Tax Increment Financing is the Downtown Urban Renewal District. The amount of private and public investment in the revitalization of Downtown Dubuque is nothing short of extraordinary: Improvement 1985 -2012 % since 2000 New Construction $242 million 92% Building Rehabilitation $260 million 87% Real Estate Sales $145 million 69% Public Improvements $97 million 93% Facade Renovation $16 million 81% Net New Jobs +4,294 70% Total Improvements $650 million 90% Nearly 300 new downtown housing units constructed or under construction in the last 3 years 23 The City economic development strategy is being carried out in close partnership with many organizations, with the key ones being the federal government, the State of Iowa, East Central Intergovernmental Association, ECIA Business Growth, Dubuque County, Northeast Iowa Community College, the Greater Dubuque Development Corporation, Dubuque Initiatives, Dubuque Main Street, Washington Neighborhood Development Corporation, Dubuque Area Chamber of Commerce, Community Foundation of Greater Dubuque, Dubuque Area Convention and Visitors Bureau, and Inclusive Dubuque. This is all a part of the City's Sustainability Strategy and Sustainable Dubuque working to create a viable, livable and equitable community through Environmental /Ecological Integrity, Economic Prosperity and Social /Cultural Vibrancy. One of the City Council's priorities is Four Mounds. This budget recommends significant enhancements to the partnership with Four Mounds, but nowhere near as significant as that requested by Four Mounds. This budget includes two items that are designed to help Four Mounds enhance their site planning efforts and then to help develop the partnerships needed to develop those plans. First is $5,000 of a requested $10,000 to help pay for contracting services to develop a short- and long -term strategic plan for the entire facility. Second is $5,000 to provide a challenge grant for site improvements for the Four Mounds Estate. Four Mounds Estate Historic District is a unique historic Dubuque landmark. It is part of the City's park system, and it is an inn and conference center. Through the lodging of the historic site, Four Mounds Estate generates hotel /motel tax. In calendar year 2012, $10,069 was collected. The improvements will enhance the visitor experience. The City's $5,000 match would only be paid to Four Mounds as a match to a site improvement grant from another organization. Through the Capital Improvement Program (CIP) budget item (page #406), "Homeownership Grants in Targeted Neighborhoods and Purchase /Rehab /Resale ", the City is proposing a major expansion of the HEART Program in two ways. One, the City would be acquiring more properties for rehab and resale, so HEART would have more opportunity to rehab structures. The City will be discussing with Four Mounds improvements to their business model to potentially make this activity more profitable to Four Mounds and to their students. A major HEART Program expansion being proposed for discussion with Four Mounds is creation of an additional crew to perform not whole -house rehabs, but to provide major maintenance projects to low- income owner - occupied housing. This will help to fill a need in the community, improving neighborhood appearance, making homes safe and attractive, and making the improvements affordable to low- income home owners, while offering more educational opportunities for students and additional income to Four Mounds. The new maintenance program for the HEART Program would be intended to be a partnership with the Green and Healthy Homes Initiative (GHHI), a current partnership the City has with Operation New View and the Community Foundation of Greater 24 Dubuque through the Housing and Community Development Department and the Health Services Department. In fact, this CIP, in general, will be a way to significantly enhance GHHI. The Fiscal Year 2015 budget also recommends $3,558 in Community Development Block Grant (CDBG) funds for the Four Mounds Adventure Day Camp Program. The budget recommendation also includes $6,560 for services related to changes in the AmeriCorps Partners in Learning Grant. The grant has been rewritten and submitted focusing only on education components to make the grant more competitive. This means City and Four Mounds activities are being impacted with the loss of AmeriCorps members. These funds pay Four Mounds for staffing of four counselors at the summer day camp. The CIP budget includes in the Water Main Extensions (page #120), $155,000 to provide a water main extension to Four Mounds. Four Mounds had requested approximately $1,120,000 in additional funding over the next five years that is not included in this budget recommendation. I assume that will be included in their fundraising goals. No doubt the crown jewel of this year's five -year capital improvement program budget is the impact on flooding problems in the Bee Branch Watershed. A watershed is an area of land that drains to the same place. The Bee Branch Watershed drains to the Bee Branch Creek. The Bee Branch Watershed is located entirely within the City limits of Dubuque and covers approximately 6.5 square miles of Dubuque's total area of 29 square miles. This watershed area includes the City's most developed areas, where over 50% of Dubuque residents either live or work. The City of Dubuque was recently awarded $98.5 million from the Iowa Flood Mitigation Board in the form of state sales tax increment financing spread over the next 20 years. When combined with other state and federal grants and local donations, the City has received over $127 million to help fund this $179 million ($201 million including interest on debt) project to save 1,373 homes and businesses from flooding. These 70 businesses employ over 1,400 people and have over $500 million in annual sales. Authorized under the Flood Mitigation Bill in 2012, the Flood Mitigation Program is administered by the Iowa Department of Homeland Security on a competitive basis by a citizen board that began accepting applications in November 2013. It is funded by a portion of state sales tax revenues. The program provides funding to cities and counties to implement long -term flood mitigation projects. Specifically, the funds are an annual sales tax increment, or a percentage of the increase in state sales tax revenue generated within the city or county. 25 The Bee Branch Watershed Flood Mitigation project is a multi - phased, fiscally responsible investment to mitigate flooding, improve water quality, stimulate investment, and enhance quality of life within the Bee Branch Watershed and thereby improve the quality of life throughout the community. The Bee Branch Watershed area encompasses historic neighborhoods offering some of the community's most affordable workforce housing. This area is also hit hardest by flash flooding during significant rain events with much more than "just a little water in the basement." Too frequently, it is flooding that inundates water heaters, furnaces, and electrical boxes, and can cause fires. It rushes down streets from curb to curb — stalling vehicles, stranding motorists, displacing manhole covers, and damaging pavement, water mains, and stormwater and sanitary sewers. Flood disasters have repeatedly impacted residents and employees of the businesses within the watershed. Between 1999 and 2011, six presidential disasters were issued, with total damage estimates of almost $70 million. The flooding in the Bee Branch Watershed also has had a major impact on public infrastructure and City services both within and outside the flood - impacted area. Direct public sector costs include emergency response activities, street and utility infrastructure repairs, and debris clean -up and removal. The disruption of essential City services and street closures due to flooding and damage also has a negative economic impact on the entire community. The Bee Branch Watershed Flood Mitigation Construction Project will prevent an estimated $582 million in damages over the 100 -year design life of the project and create an incentive for individuals and businesses to reinvest in this vital area of our community. The Dubuque City Council has made infrastructure projects a high priority and the City of Dubuque is committed to the Bee Branch Watershed Flood Mitigation Project, a multi- faceted approach to addressing the severe and frequent flash flooding experienced in the watershed. $98.5 million is the largest amount ever awarded to the City of Dubuque and will enable the City to implement its comprehensive flood mitigation plan much sooner than previously anticipated at a lower cost to Dubuque citizens and businesses. The 12 project phases will reduce the volume of stormwater, slow the rate of stormwater through the upper watershed, increase the safe conveyance of stormwater through the flood -prone area, and provide floodwater protection to the City's water treatment plant on Hawthorne Street. 26 Bee Branch Watershed Flood Mitigation Project Phases Phase Status Phase 1: Carter Road Detention Basin Phase 2: West 32nd Street Detention Basin Phase 3: Historic Millwork District Complete Streets Phase 4: Lower Bee Branch Creek Restoration Phase 5: Flood Mitigation Gate Replacement Phase 6: Impervious Surface Reduction (Alley Reconstruction) Phase 7: Upper Bee Branch Creek Restoration Phase 8: 22nd St. Storm Sewer Capacity Improvements Phase 9: Flood Mitigation Maintenance Facility Phase 10: North End Storm Sewer Capacity Improvements Phase 11: Water Plant Flood Protection Phase 12: 17th St. Storm Sewer Capacity Improvements Completed in 2003 Completed in 2009 Completed in 2012 Est. Completion - 2014 Est. Completion - 2015 Est. Completion - 2033 Est. Completion - 2016 Est. Completion - 2020 Est. Completion - 2020 Est. Completion - 2019 Est. Completion - 2020 Est. Completion - 2020 Total cost, excluding interest on debt: Cost $1,076,315 $4,158,589 $7,977,311 $21,274,685 $2,099,000 $57,420,000 $64,823,636 $3,380,000 $4,360,000 $1,160,000 $3,800,000 $7,520,000 $179,049,536 Dubuque's current stormwater utility rate is $5.60 per month for the average single - family home in Dubuque. (Properties that are exempt from property taxes, such as non- profits, only pay 50% of the stormwater fee, as do low- income individuals. Farms within the city receive a 75% discount.) Due to the costs associated with maintaining the current stormwater management system and implementing the Bee Branch Watershed Project over the next 20 years, the City is projecting annual increases to the stormwater utility rate to reach $9.00 per month on July 1, 2021. Prior to the state grant program, the rate was projected to rise to $9.00 per month on July 1, 2016, and the improvements would have taken 50 years or more. With the state grant, they will be completed in 20 years, with most completed over the next six years. The protection will be provided sooner at a lower cost to Dubuque residents and businesses. The Fiscal Year 2015 budget recommendation is for an increase in the fee from $5.60 to $5.98, or 6.79 %. The Bee Branch Watershed Project is a 12- phase, 20 -year construction project to address stormwater management issues throughout the entire Bee Branch Watershed area, which stretches approximately from the Mississippi River west past John F. Kennedy Road, north to the Northwest Arterial, and south to West Fifth Street. The Bee Branch Creek Restoration is two of the phases of the watershed project and is scheduled to be completed in 2016. Phase 6, "Impervious Surface Reduction," will involve the reconstruction of 240 alleys within the watershed. These alleys will be converted to pervious surfaces (pavers) to allow stormwater to filter back into the ground instead of creating run -off to surrounding properties and downstream in the watershed. Approximately 70 alleys will be completed in the first three years of the project, with the remainder completed over the next 17 years. Abutting property owners will be assessed for a portion of these costs. The average paving assessment portion is estimated to be $800 per residential 27 property. These assessments can be paid over 15 years at an estimated 3% interest. Financial assistance is available for income - qualified, owner - occupied properties. This project will impact the debt structure of the City, as most of the project will be accomplished through the issuance of debt, through a combination of State Revolving Loan Funds (SRF) and general obligation debt issuances, with payments abated by the State Sales Tax Increment awarded to the City by the State of Iowa Flood Mitigation Board and the City's Stormwater Utility Fee. The Iowa Constitution limits the General Obligation debt of any city to 5 percent of the actual value of the taxable property within the city. The Iowa legislature has determined that the value for calculating the debt limit shall be the actual value of the taxable property prior to any "rollback" mandated by state statute. On October, 15, 2012, the City Council adopted a formal Debt Management Policy for the City of Dubuque. While this debt management policy just put into writing what the City of Dubuque was already doing in practice, there were some changes to those policies. 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; 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. 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 does not exceed $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. Total annual debt service payments on all outstanding debt of the City shall not exceed 25% of total annual receipts across all of the City's funds. As of June 30, 2013, it is projected the City will be at 17 %; and 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 starting 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 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. The City has been increasing the use of debt to accomplish the projects that need to be done. However, beginning in Fiscal Year 2016 the amount of outstanding debt will begin 28 to decrease. The debt principle outstanding as of June 30, 2014, will be $290,182,909. The breakdown of the debt principle outstanding as of June 30, 2014, is as follows: Debt Obligation Principle Outstanding 6/30/14 General Obligation Essential Corporate Purpose $100,351,853 Tax Increment Notes and Bonds $ 22,792,464 Economic Development TIF Rebate Agreements $ 20,188,981 General Fund Leases $ 135,000 Other Revenue-Backed Loans $ 4,594,285 Total Indebtedness Subject to Statutory Debt Limit $183,621,403 $148,062,583 Percent of Statutory Debt Limit Used as of June 30, 2014 80.63% Revenue Bonds $142,120,326 Total City Indebtedness as of June 30, 2014 $290,182,909 It should be noted that most of the City of Dubuque's outstanding debt is not paid with property taxes (except TIF), but is abated from other revenues, except for one issuance for the replacement of a Fire Pumper truck in the amount of $1,410,000 with debt service of $117,280 in Fiscal Year 2014. Included in the debt is $20,188,981 of property tax rebates to businesses creating and retaining jobs and investing in their businesses. Statutory Debt Limit Fiscal Year Statutory Debt Limit Amount of Debt Subject to Statutory Debt Limit % Debt Limit Used 2014 $183,621,403 $148,062,583 80.63% 2015 $193,113,721 $157,793,297 81.71% 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, 2014 will have a balance of $142,120,326. The total City indebtedness as of June 30, 2014 will be $290,182,909. The total City indebtedness as of June 30, 2013 was $244,405,656. The City is using debt to accomplish the projects that need to be done and to take advantage of the attractiveness of interest rates in the current market. Part of the City's Fiscal Year 2014 debt was in the form of a grant from the Iowa Flood Mitigation Program. Through a new state program, the City is able to issue $28.25 million in revenue bonds payable from the 5 percent State Sales Tax increment for projects in the Bee Branch Watershed allowing the City to complete the Bee Branch Creek Restoration, construct permeable alleys, replace the Bee Branch flood gates, complete North End Storm Sewers, construct a Flood Control Maintenance Facility, install Water Plant Flood Control and complete 17th Street Storm Sewer over the next twenty years. 29 In Fiscal Year 2015, there is anticipated to be an additional $21,432,697 in debt issued and $14,116,040 in principal of existing debt reduced. Of the $21,432,697 in new debt, all would apply against the statutory debt limit and the principal retired $909,771 applied against the statutory debt limit. There was a 5.17% increase in assessed value effective January 1, 2013, which is the assessment the Fiscal Year 2015 statutory debt limit is based on. The statutory debt limit effective June 30, 2015, is $193,113,721. The City will be at 81.71 % of statutory debt limit by June 30, 2015. During the Fiscal Year 2014 budget process, a projection of the statutory debt limit usage was presented at the public hearing to adopt the Fiscal Year 2014 budget. The following was the projection that was previously shown: FY13 FY14 FY15 FY16 FY17 FY18 FY19 78.93% 75.39% 75.44% 63.88% 53.09% 46.15% 43.60% These s atutory debt limit usage projections have changed slightly due to: the actual amount of debt recommended in the Fiscal Year 2015 CIP budget; being advised that the $10 million dollar guarantee balance on the Roshek Building is subject to the City's statutory debt limit due; utility extensions were not requested by property owners for previously annexed areas and therefore the debt was not issued; and the Bee Branch Watershed project has secured funding through the State of Iowa Flood Mitigation Program which now includes general obligation borrowings for part of the local match. The revised projection of the statutory debt limit usage is as follows: FY13 FY14 FY15 FY16 FY17 FY18 FY19 84.31 % 80.63% 81.71% 80.56% 73.33% 68.77% 70.56% As you review the Fiscal Year 2015 -2019 Capital Improvement Program (CIP) the problem 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. The following table and line charts illustrate the amount of the statutory debt limit and total debt used by the City pre- and post -flood mitigation project -state sales tax increment grant, allowing the Bee Branch Watershed project that was going to take over 50 years, to be reduced to 20 years, with most of the flood protection provided over the next six years. 30 Statutory Debt with Flood Mitigation Debt: 613012014 613012015 613012016 613012017 613012018 613012019 Total General Obligation Debt $ 100,351,853 $ 114,024,618 $ 118,736,619 $ 111,184,427 $ 108,632,135 $ 118,346,693 Total Tax Increment Debt $ 22,792,464 $ 22,173,996 $ 21,577,106 $ 20,962,726 $ 20,300,881 $ 19,711,055 Economic Development TIF Rebate Agreements $ 20,188,981 $ 16,912,541 $ 13,731,647 $ 10,544,764 $ 7,499,698 $ 5,067,201 Total Other Revenue - Backed Loans $ 4,594,285 $ 4,547,142 $ 4,500,000 $ 4,500,000 $ 4,370,000 $ 4,235,000 Total Lease Obligations Paid From General Fund $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 Total City Indebtedness for Statutory Debt Calculation $ 148,062,583 $ 157,793,297 $ 158,680,372 $ 147,326,917 $ 140,937,714 $ 147,494,949 Total Revenue Bonds (Exerrpt from Statutory Debt Total) $ 142,120,326 $ 141,086,650 $ 139,833,804 $ 135,277,373 $ 130,615,826 $ 125,847,289 Total City Indebtedness $ 290,182,909 $ 298,879,947 $ 298,514,176 $ 282,604,290 $ 271,553,540 $ 273,342,238 STATUTORY DEBT CAPACITY Total assessed value of taxable property $4,098,676,508 $4,180,650,039 $209,032,502 $3,672,428,057 $3,862,274,416 $3, 939,519,904 $4,018,310,302 Statutory Debt (5% of Debt Levy) $183,621,403 $193,113,721 $196,975,995 $200,915,515 Less Outstanding Debt Subject to Limit $ (148,062,583) $ (157,793,297) $ (158,680,372) $ (147,326,917) _$204,933,825 $ (140,937,714) $ (147,494,949) Statutory Debt Capacity $35,558,820 $35,320,424 $38,295,623 $53,588,598 $63,996,111 $61,537,553 Percent of Legal Debt Margin Utilized 80.63% 81.71% 80.56% 73.33% 68.77% 70.56% 90% Statutory Debt Limit Used (as of June 30th) 81.71% 40% 30% 47.67% 14 15 16 17 18 19 20 21 22 23 24 25 --Without Flood Mitigation --Flood Mitigation Projection Prior FY15 Budget 31 $320 $300 $280 $260 $240 $220 $200 $180 $160 $140 Total Debt (In Millions) $298.5 289.6 $261.9 $251. $240.5 $2E $214.9 $239.8 $222.7 205.4 $208.7 $178.8 14 15 16 17 18 19 20 21 22 23 -,-Without Flood Mitigation -M- Flood Mitigation - *-Projection Prior FY15 Budget 24 25 Proposed borrowing by year during this 5 year CIP budget is as follows: Funding Source Sales Tax 20% (10 Year) Sales Tax 20% (15 Year) 160,989 Sales Tax 20% (20 Year) 1,580,411 Sales Tax 30% (7 Year) 328,778 Sales Tax 30% (8 Year) - Sales Tax 30% (10 Year) - Sales Tax 30% (20 Year) 1,338,480 Water 3,223,935 Stormwater - Sewer 3,125,100 GDTI F 7,593,638 DI C W 3,118,500 Parking 209,000 $ 21,432,697 $ Principal Paid (909,771) Net Debt $ 20,522,926 $ FY15 FY16 FY17 FY18 FY19 Total $ 753,866 $ 235,950 $ 550,000 $ 66,000 $ 666,840 $ 2,272,656 593,781 - 60,106 607,314 750,495 2, 399,461 216,700 440,000 911,012 1,427,305 3,000,000 539,000 1,046,972 5,200,326 2,200,000 1,003,200 129,586 133,100 660,000 3,738,322 711,150 1,133,000 160,989 55,000 2,289,298 328,778 148,279 1,284,640 183,765 533,565 660,000 3,848,975 10,344,565 21,645,139 3,000,000 6,073,540 11,495,762 1,040,050 15,970,214 5,318,500 110,000 549,357 143,000 154,000 1,165,357 13,147,878 $ 8,632,995 $ 6,774,264 $ 19,326,039 F$ 69,313,873 (555,946) (395,515) (276,569) (786,485) (2,924,286) 12,591,932 $ 8,237,480 $ 6,497,695 $ 18,539,554 $ 66,389,587 There is always risk involved with debt. That is one of the factors that determines what the interest rate will be when the debt is issued. Of course, there is just not risk for the lender, but there is risk for the borrower. That risk is a little more pronounced in the case of the State Sales Tax Increment being used by the City for flood debt, because this methodology has not been used before. That is why the City took the unusual step 32 of hiring Robert W. Baird & Co. to help market the bonds. The City will be guaranteeing payment of the bonds with the City's Stormwater Fee and general revenues. The City has worked closely with the bond advisory firm Piper Jaffray and the City's bond counsel, Bill Noth of Ahlers & Cooney, P.C., and there is a high confidence level that projections made are accurate. An operating reserve or working balance is an amount of cash, which must be carried into a fiscal year to pay operating costs until tax money, or other anticipated revenue comes in. Without a working balance there would not be sufficient cash in the fund to meet its obligations and money would have to be borrowed. Working balances are not available for funding a budget; they are required for cash flow (i.e., to be able to pay bills before taxes are collected). The rule of thumb the state recognizes for determining a reasonable amount for a working balance is (a) anticipated revenues for the first three months of the fiscal year less anticipated expenditures or (b) 5 percent of the total General Fund operating budget (excluding fringes and tort liability expense). However, in discussions with Moody's Investor Service, a factor of 10 percent was recommended for "A" rated cities. This is due to the fact that a large portion of revenue sources are beyond the City's control and therefore uncertain. In the case of Dubuque, 10% represents approximately $4,376,926. The City of Dubuque has historically adopted a general fund reserve policy as part of the Fiscal and Budget Policy Guidelines which is adopted each year as part of the budget process. During Fiscal Year 2013, the City adopted a formal Fund Reserve Policy. According to 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 Cost "). The City may increase the minimum fund balance by a portion of any operating surplus above the carryover balance of $200,000 that remains in the General Fund at the close of each fiscal year. The City may continue to add to the General Fund minimum balance when additional funds are available until 20 percent of Net General Fund Operating Cost is reached. The City of Dubuque is to maintain a General Fund working balance or operating reserve of 10% of the total General Fund Operating budget requirements or approximately $4,376,926 for Fiscal Year 2015. Moody's Investor Services has advised they have placed under review 256 U.S. local governments as a result of the publication of their new U.S. Local Government General Obligation Bond Methodology. Dubuque's general obligation debt has been placed under review for possible downgrade. 33 Of the 256 local governments under review, 52% are being considered for an upgrade and 48% for a downgrade. The methodology increases the weight in Moody's overall assessment on debt and pensions to 20% from 10 %, decreases the weight on economic factors to 30% from 40 %, and introduces a scorecard for U.S. local governments to enhance the transparency of key rating considerations. Moody's advises that they expect most rating changes resulting from the current reviews to be one or two notch movements and, depending on mitigating factors, some ratings could be confirmed at their current rating level. The increase in the weight attached to debt and pensions recognizes the potential for large pension liabilities to constrict a local government's financial flexibility, says Moody's. Because pension liabilities and debt each represent enforceable claims on the resources of local governments, Moody's has weighted the debt portion of its current methodology more heavily to capture the combined financial impact of both debt and pensions. Moody's states that the reduction in weight attached to economic factors acknowledges that some local governments are either unwilling or unable to convert the strength of their local economies into revenues, says Moody's. Tax caps, anti -tax sentiment, the natural lag between economic activity and its conversion into government revenues often place obstacles between municipal governments and the income generated by their local economies, as do a variety of other factors. It is interesting to note that the last change in rules by Moody's in 2010 resulted in an upgrade in the City of Dubuque's general obligation bond rating from the third highest (Aa2) to the second highest (Aa1). Now this rule change may result in a downgrade. In either case, it is not dependent on any action by the City of Dubuque. In fact, the City of Dubuque went through a thorough review by Moody's in September 2012 when the City of Dubuque's general obligation bond rating was confirmed at Aa1. The City was asked to undertake some activities, like adopt a written debt policy, which the City Council adopted. The Moody's analysis said assignment of the Aa1 rating reflects the city's role as a regional service and retail provider in northeastern Iowa (issuer rating Aaa /stable outlook) and neighboring states; satisfactory reserves despite recent cash funding of capital projects; and an above average debt burden supported by alternate non -levy revenue sources. The City's strengths include a growing economy bolstered by role as a regional economic and service center for northeast Iowa and surrounding states; revenue - raising flexibility through access to multiple property tax levies and franchise fees. The City's challenges include plans to continue to spend down financial reserves through fiscal 2013 for capital projects; reliance on volatile gaming revenues for a significant percentage of general operations; and General Fund supported unbudgeted mid -year transfers to Worker's Compensation Fund and Health Insurance Fund in fiscals 2011 and 2012. 34 One of the major new factors that Moody's is introducing is a communities pension liabilities. In the case of Dubuque, all the pensions are state -wide pension systems where Dubuque has no control over the composition of the pension benefits, the amount the City or the employee pays into the pension system or the investment practices of the pension system. The State of Iowa legislators determine the benefit levels and the allowed contribution levels and the Pension Board determines the investment practices. Now, in the City of Dubuque bond rating, Moody's will hold individual communities liable for any underfunding, which I am not disputing, but I believe the State of Iowa needs to contribute to fully funding these pensions, since the State legislators set the benefit levels. In strong contention with the Bee Branch project for the crown jewel of this year's five - year capital improvement program budget is a project that will make less of an impact on the budget than previously thought. In the past, the City had assumed that all the costs of the Southwest Arterial project needed to be in the City budget, because the State of Iowa had designated it as a local road. However, in 2013, the State and the City executed a Memorandum of Understanding that when the City completes design, property acquisition and work on some of the intersecting roads, the Southwest Arterial project will become a State project as a state highway. This will culminate in a future Transfer of Jurisdiction Agreement where the City will take over jurisdiction from the State of the Northwest Arterial (Highway 32) and the part of the current Highway 52 that runs through Dubuque as Central Avenue and White streets. Now the City will not only get Iowa Department of Transportation to finance and construct the $135 million Southwest Arterial project, but hundreds of trucks per day will be rerouted from downtown Dubuque. One major frustration with this year's budget is the impact of new Federal American's with Disabilities Act (ADA) implementation rules and their impact on the City of Dubuque annual asphalt overlay program. Beginning January 1, 2014, any alterations to an existing street's crosswalk, including asphalt resurfacing, will require that existing curb ramps be brought up to the latest ADA standards. This unfunded federal mandate has severe financial ramifications for the City's annual asphalt overlay program. The City would have to increase funding for the curb ramp portion of its annual asphalt overlay program by $1.1 million in Fiscal Year 2015 to stay on the current ten centerline miles per year program. For Fiscal Year 2015, the program will be reduced from ten miles of streets resurfaced to five miles of streets resurfaced. Even with the overlay program cut in half, from ten to five miles in Fiscal Year 2015, the monies needed for curb ramps is more than triple from the past years. To accomplish this, the City will do a general obligation debt borrowing. A future increase in the state gas tax with corresponding increases in Road Use Tax Funds to cities would allow an expansion of the program in the future. The City will also examine the possibility of using Tax Increment Financing revenues to improve streets. Street maintenance crews will stay busy. As always, they will plow snow and spread salt in the winter. During the time they would have been doing asphalt overlays, they 35 will expand the City's street crack sealing program, replace more defective concrete street panels, replace more deteriorated curbs and gutters, and replace sidewalks near City parks, allowing Leisure Services to save money be avoiding hiring private contractors. The City of Dubuque's annual asphalt overlay program began in the summer of 1993, with the purchase of the City's first paving machine. That first machine was relatively small, as was the City's program in its early years, with an initial objective of paving five centerline miles per year. With the purchase of a much larger paver in 1999, along with an increased budget for hot mix asphalt, the City's paving program was doubled from five to ten centerline miles per year. Since the beginning of the program in 1993, 190.55 centerline miles of Dubuque streets have been paved by City crews - well more than half of the City's 309.87 total street miles. In recent years, the City's asphalt overlay program was further enhanced by adding concurrent ancillary infrastructure improvements, including curb and gutter replacement, sewer manhole cover and water valve cover replacement, and, larger street signs that are also much more visible at night. It should also be noted that the program in recent years also includes grinding and removal of old asphalt in the gutters and crosswalks of the streets, providing for full - depth paving at those potential weak spots. Also, the program provides for recycling that old asphalt by blending it into the mix used to pave those same streets. While this budget recommendation does not include additional funding for the arts, there has been an organizational change to recognize the impact the arts has on the local economy. Mayor and City Council made the arts a priority and created the Arts and Cultural Affairs Advisory Commission. Upon creation of that commission, I assigned Neighborhood Development Specialist Jerelyn O'Connor the role as the liaison to the Commission. Subsequently, the Mayor and City Council funded a part -time position titled Arts and Cultural Affairs Coordinator. Jerelyn has worked with the Arts and Cultural Affairs Advisory Commission to raise the prominence of the Arts in Dubuque and to analyze the impact of the Arts. In June 2012, Americans for the Arts provided the City of Dubuque the results of a study of the "Economic Impact of the Nonprofit Arts and Culture Industry" in the City of Dubuque. The study said: "Arts & Economic Prosperity IV provides compelling new evidence that the nonprofit arts and culture area are a significant industry in the City of Dubuque —one that generates $47.2 million in total economic activity. This spending —$17.6 million by nonprofit arts and culture organizations and an additional $29.6 million in event - related spending by their audiences — supports 1,530 full -time equivalent jobs, generates $36.7 million in household income to local residents, and delivers $5.0 million in 36 local and state government revenue. This economic impact study sends a strong signal that when we support the arts, we not only enhance our quality of life, but we also invest in the City of Dubuque's economic well- being." Jerelyn has performed in an outstanding manner in her role related to Arts and Cultural Affairs. In reaction to the results of this economic impact study, I want to create greater focus on the relationship of the Arts to economic development. Therefore, I transferred the responsibility of supervising the Arts and Cultural Affairs Coordinator to Economic Development Director Maurice Jones. The Fiscal Year 2015 budget recommends a $11.0259 per thousand dollars of assessed valuation property tax rate which is unchanged from the current Fiscal Year 2014 property tax rate. While there have been fluctuations along the way, the $11.0259 Fiscal Year 2015 recommended rate is a 10.60% increase over the Fiscal Year 2010 property tax rate, or a 1.71% average annual increase over that five -year period. The Fiscal Year 1987 (just prior to implementation of the 1% local option sales tax where 5O% was dedicated to property tax relief) property tax rate of $14.58 per thousand dollars of assessed valuation was 24.39% higher than the Fiscal Year 2015 recommended property tax rate of $11.0259. $14 $12 $10 $8 $B $4 s- City Tax Rate • City Tax Rate m n o O N r fA N 03 r N W CO ^ OD O r r P h CO CO O N O l0 W O O W N r�STh C M nO�f9 F V [!Y ii fek � N � N O N P O O O P O O M 0 00 O 4R O 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Fiscal Year 37 While gaming revenues have stabilized, the City is still feeling the effects of the reduction in lease revenues from the Dubuque Racing Association. When the Diamond Jo expanded, it was projected that Dubuque Racing Association lease revenues would decrease 21 %, but the actual decrease has been 38 %. In fact, if you compare the highest lease year revenue from the DRA of Fiscal Year 2007 at $9,757,458 with the Fiscal Year 2015 projection of $6,023,925, the City will receive $3,733,533 less in lease revenue. The split of gaming revenues from taxes and the DRA lease (not distributions) in Fiscal Year 2015 is split between operating and capital budgets at 97.0% / 3.0% which is a change from 90.0% operating and 10.0% capital in Fiscal Year 2014. This is not as severe of a change that was recommended and adopted in the Fiscal Year 2015 Budget Guidelines where it was anticipated that 100% of the lease revenues would need to go into the operating budget to maintain the property tax rate at the Fiscal Year 2014 level. This 10% margin was to cushion the City operating fund when there was a downturn in gaming revenue. That downturn has arrived with the lease payments decreasing from a high of $9,757,458 in Fiscal Year 2007 down to the current projection of $6,023,925 in Fiscal Year 2015. It is appropriate to make the adjustment now because the five year projection of the City property tax rate is as follows: FY 2015 +0.00% increase FY 2016 +0.97% increase FY 2017 +0.31 % increase FY 2018 +1.58% increase FY 2019 +1.30% increase A significant impact of the change is the reduction of funds that now go to the City's five - year capital improvement program. Over the next five years there will be $2,480,013 less available for capital improvement program projects because most of the money now goes to the general fund operating budget. Health insurance cost will have a significant impact on the Fiscal Year 2015 property tax. The City portion of health insurance expense will increase from $1,015 per month per contract to $1,190 per month per contract (based on 553 contracts) which is a 17.24% increase in health insurance cost for an additional cost of $825,122 to the General Fund in Fiscal Year 2015, which would be a 3.24% property tax increase for the average homeowner without other mitigating factors unrelated to health insurance. In the last few years, the City Council has boosted the general fund reserves and in Fiscal Year 2011, Fiscal Year 2012, Fiscal Year 2013 and Fiscal Year 2014, some of the General Fund reserves went to bolster the Health Insurance Reserve since the City of Dubuque is self- insured actual expenses are paid each year with the City only having stop -loss coverage for major claims. Industrial and riverfront property lease revenue is projected to increase by $839,550 in Fiscal Year 2015 due to lease negotiations of old expiring leases and leases to new tenants on sites that are vacant. 38 The Municipal Fire and Police Retirement System of Iowa Board of Trustees have increased the City contribution for Police and Fire retirement from 30.12 percent to 30.41 percent ( +0.96% or an increase of $39,406 in General Fund). The Municipal Fire and Police Retirement City contribution is expected to decrease 8.71 % in Fiscal Year 2016; 8.03% in Fiscal Year 2017; 2.35% in Fiscal Year 2018 and 4.69% in Fiscal Year 2019. Also, the Iowa Public Employee Retirement System (IPERS City contribution remains at 8.93 percent and the employee contribution remains at 5.95% in Fiscal Year 2015. The IPERS rate is anticipated to increase 1 percent each succeeding year according to IPERS. Transit motor vehicle fuel, and low and high sulfur diesel fuel expense is estimated to increase 16.25 percent ( +$49,613) over Fiscal Year 2014 budget based on two additional routes running for four quarters, then 2.0 percent per year beyond. Transit motor vehicle maintenance is estimated to increase 173.39 percent ( +$262,764) over Fiscal Year 2014 budget based on the actual maintenance schedule for the buses as the warranties expire on the new buses, then 2.0 percent per year and beyond. The increase in property tax support for Transit from Fiscal Year 2014 to Fiscal Year 2015 is $223,359. The following is a ten -year history of the Transit subsidy: FY 2015 $1,056,661 estimate FY 2014 $ 833,302 budget FY 2013 $1,044,171 FY 2012 $ 717,611 FY 2011 $1,078,726 FY 2010 $1,161,393 FY 2009 $1,253,638 FY 2008 $1,070,053 FY 2007 $ 923,384 FY 2006 $ 710,453 FY 2005 $ 617,048 Fiscal Year 2013 was the first year that eligible retirees with at least twenty years of continuous service in a full -time position or 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 one - hundred twenty sick days payable bi- weekly over a five year period. The sick leave payout expense budget in the General Fund in Fiscal Year 2014 was $116,728 as compared to Fiscal Year 2015 of $174,925 based on qualifying employees officially giving notice of retirement. The Section 8 Housing subsidy payment from the General Fund increased from $210,820 in Fiscal Year 2014 to $354,845 in Fiscal Year 2015. In Fiscal Year 2011, the City approved reducing the number of allowed Section 8 Housing Vouchers from 1,060 to 900 vouchers. This reduction in vouchers was estimated to reduce Section 8 39 administrative fees from HUD by $100,000 per year. However, in the transition, the number of vouchers dropped to approximately 800 vouchers. HUD has based the Section 8 administrative fees for Fiscal Year 2015 on the lower number of vouchers held in Fiscal Year 2014 which has decreased the amount of revenue received by the Section 8 program in Fiscal Year 2015. The City is in the process of increasing the Section 8 Housing Vouchers back to 1,060, as ordered by HUD, however the Federal sequestration has delayed that increase. 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 Fiscal Year 2013, a multi -year process to more equitably distribute those costs across all funds was implemented. The remaining overhead recharge will be increased ten percent each year for ten years until reaching the total overhead recharge percentage. In Fiscal Year 2015 the administrative overhead was increased ten percent or an increase of $431,951. The Affordable Care Act was signed into law on March 23, 2010 and aims to improve the current health care system by increasing access to health coverage for Americans and introducing new protections for people who have health insurance. 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 will postpone 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 will delay providing insurance coverage for eligible part -time employees and delay making eligible part -time positions full -time until January 1, 2015. The Standard Measurement Period will be 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 Affordable Care Act is expected to increase employee expense in Fiscal Year 2015 by $200,332 and in Fiscal Year 2016 by $487,239, with incremental increases each year thereafter. 40 The Fiscal Year 2015 recommended property tax rate of $11.0259 includes $129,906 for recurring improvement package requests and $100,831 funds for non - recurring improvement package requests in the Fiscal Year 2015 budget recommendation. Elimination of the $129,906 in funds for recurring improvement packages would reduce the property tax rate from $11.0259 to $10.9682. The recommended property tax rate of $11.0259, while being no increase in the property tax rate over Fiscal Year 2013, will be a 3.23% increase to the "City" share of property taxes for the average homeowner, assuming the Homestead Property Tax Credit is fully funded by the State of Iowa. It is important to remember that the impact of the property tax rate on revenue to the City and cost to the average homeowner is impacted by the increase in the City's taxable valuation, (increasing it from $2,171,073,899 in Fiscal Year 2014 to $2,250,099,910 in Fiscal Year 2015, a 3.34% increase), excluding TIF District Revenues, and the change in the State rollback factor, which is going from 52.817% to 54.400 %, as determined by the State of Iowa. The recommended property tax rate of $11.0259 provides a property tax decrease for industrial properties (- 7.23 %) and commercial properties (- 1.15 %) and a 3.23% property tax increase for the average Dubuque homeowner. There was an equalization order from the Iowa Department of Revenue of 8% for commercial property and 10% for agricultural property in Fiscal Year 2015. The Iowa Department of Revenue is responsible for "equalizing" assessments every two years. Commercial and Industrial taxpayers previously were taxed at 100 percent of assessed value; however due to legislative changes in Fiscal Year 2013 a 95 percent rollback factor will be applied in Fiscal Year 2015 and a 90 percent rollback factor will be applied in Fiscal Year 2016 and beyond. The State of Iowa will backfill the loss in property tax revenue from the rollback and the backfill 100 percent in Fiscal Year 2015 through Fiscal Year 2017 and then the backfill will be capped at the Fiscal Year 2017 level in Fiscal Year 2018 and beyond. The Fiscal Year 2015 State backfill for property tax loss is estimated to be $701,570. Fiscal Year 2015 is the first year that commercial, industrial and railroad properties are 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 Iowa. Eligible businesses must file an application with the Assessor's office to receive the credit with a deadline of January 15, 2014 for applications to be considered for Fiscal Year 2015. The average commercial and industrial properties ($386,139 Commercial / $599,500 Industrial) will receive a Business Property Tax Credit for the City share of their property taxes of $148 in Fiscal Year 2015. 41 I am recommending the following increases and reduction for the Fiscal Year 2015 budget for the Parking Division: • Increase 10 -hour parking meter rates from $.25 per hour to $.35 per hour. Anticipated revenue increase of $35,000. • Increase fine amounts. All fines that are currently $7.00 would increase to $10.00 and fines that are currently $15.00 would increase to $20.00. This increase affects all violations except Disabled Parking, Snow Route and Fire Lane. Anticipated revenue increase of $131,310. • Increase ramp hourly rates. Increase the first hour of parking from $1.00 to $2.00. Subsequent hours will remain at $.50 per hour. Anticipated revenue increase of $142,308. • REDUCE number of hours of operation in the Iowa Street Ramp cashier office from 52.5 hours per week to 15 hours per week. Operating only during peak hours potentially 3:00 P.M. until 6:00 P.M. Anticipated savings of $40,000 annually. These adjustments combined have a projected budget impact of $348,618. With approval of all of the above recommendations, the Fiscal Year 2015 budget would go from a deficit of $296,714, to a projected surplus of $51,904, which provides a cushion if higher fines create greater compliance. The Fiscal Year 2015 budget and changes that have occurred during Fiscal Year 2014 increase the full -time personnel complement by 6.45 FTE, decrease the part -time equivalents by 5.82 FTE, and increase the seasonal by 2.92 FTE. The City's request to HUD to fund the three Family Self Sufficiency workers through December 31, 2014, was only approved for one worker. This budget funds the other two through December 31, 2014, when the City will have a choice to compete for another year of federal funding for all three positions. 42 The changes in FTEs can be summarized as follows: Total Amended FTE's FY14 702.39 PT Clerk Typist to FT (Affordable Health Care Act) +0.11 PT Building Services Custodian I to FT (Affordable Health Care Act) +0.28 PT Animal Control Officers (Reduced to 29 Hours Per Week) -0.06 FT Facilities Supervisor (Approved FY13 - Port of Dubuque Marina) +1.00 Seasonal Marina Cashier /Clerk (Approved FY13 - Port of Dubuque Marina) +0.97 Seasonal Marina Dock Worker (Approved FY13 - Port of Dubuque Marina) +0.67 PT Recreation Maintenance Worker (Reduced to 29 Hours Per Week) -0.03 PT Multicultural Family Center Assist. Director (Reduced to 29 Hrs. Per Week) -0.03 PT Recreation Field Supervisor (Reduced to 29 Hours Per Week) -0.03 Seasonal Assistant Golf Pro (Weekend Tournaments /Cover Concessions) +0.78 Seasonal Golf Pro Shop Attendant (Reduced to 29 Hours Per Week) -0.03 Seasonal Recreation Concession Worker (Hours Shifted to Asst. Golf Pro) -0.44 FT Library Aide (Reclassified to Library Assistant) -1.00 FT Library Assistant (Reclassified from Library Aide) +1.00 PT Librarian I (Reflects Hours Worked) +0.01 FT Transit Bus Operator (Affordable Health Care Act) +1.68 PT Transit Bus Operator (8 Hours Saturday Paratransit Service) +0.20 PT Transit Dispatcher (Reflect Hours Worked) -0.02 FT Public Works Sanitation Driver (Reflect Hours Worked) -0.25 Seasonal Public Works Sanitation Driver (Reflect Hours Worked) +0.08 Seasonal Public Works Laborer (Reflect Hours Worked) +0.64 PT Parking Laborer (Delay of Intermodal Facility) -0.50 PT Parking Ramp Cashier (Reduced Cashier Hours Iowa Street Ramp) -1.12 FT Housing Section 8 Inspector (Reduced Vouchers /Reduced Units) -1.00 PT Housing Section 8 Receptionist (Direct Lines /Reduced Calls) -0.72 FT PIO Communications Specialist (Bee Branch Watershed Project) +1.00 Seasonal Architectural Interns (ADA Compliance) +0.25 PT Finance Cashier to FT (Affordable Health Care Act) +0.11 Total Recommended FTE's FY 2015 705.94 In Fiscal Year 1981, the City of Dubuque had 588.25 full -time employees. Despite the addition of many new services, like recycling, inspections, etc., the City today has 568.42 full -time employees (assuming this budget recommendation is approved), 3.4% fewer than in 1981. Since we do not yet know the Fiscal Year 2015 levies of the other cities, the following compares Dubuque's proposed Fiscal Year 2054 rate with the actual Fiscal Year 2014 rates of the other nine large cities in the State of Iowa. 43 520 518 N 516 N 514 S 512 0510- 0 58 - 54 52 - 50 FY 2014 Property Tax Rates vs. Dubuque FY 2015 512.68 0.86 $11.03 515.71 $16.20 515.22 $17.49 $17.59 517.75 16.78 $16.81 0 West Des Moi 0 Average w/o Dubuque T r a U > 3 0J3 0 Des Moines 0 0 Dubuque's recommended City property tax rate ($11.03) is the second lowest in the State, as compared to the Fiscal Year 2014 rate for the other cities in the State of Iowa with a population over 50,000. The highest- ranked city (Council Bluffs - $17.75) is 61% higher than Dubuque's rate, and the average of the other 9 cities ($15.71) would be 42% higher than Dubuque. It is unlikely that the other cities will not increase their property tax rate in Fiscal Year 2015. 44 How does the City of Dubuque compare with property tax revenue per capita? $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 Property Taxes Per Capita $565 $572 $430 $433 $445 $639 $673 $687 $771 707 $899 Dubuque Arne Sioux City Des Moines Waterloo Avera e Davenport Council Cede Iowa C ty West Des w/o Bluffs Rapids Moines Dubuque Dubuque has lowest property taxes per capita for the City portion of the property tax bill in the State for the comparison cities. The highest- ranked city (West Des Moines - $899) is 109% higher than Dubuque's rate, and the average ($639) is 49% higher than Dubuque. The taxable value of residential realty will be 54.400% of assessed value in Fiscal Year 2015, compared to 52.817% in Fiscal Year 2014. This percentage is also applied to farm dwellings. No adjustments were ordered for commercial, industrial, railroad, and utility property because there were not sufficient increases in values to qualify for reductions. These properties are assessed on the basis of their market value. Agricultural property will be limited to 43.400% of the assessed value in Fiscal Year 2014, compared to 59.933% in Fiscal Year 2014. Agricultural property, excluding agricultural dwellings, is assessed according to its productivity rate. Overall, taxable property values in the City of Dubuque grew 3.34% in Fiscal Year 2015. 45 WATER RATE I am recommending a 5% increase in the water rates. Water Department Manager Bob Green has contacted other cities in Iowa with a population over 50,000 that use a water softening process, to determine the recommended water rates for these communities for Fiscal Year 2015. In spite of the recommended water rate increase, Dubuque would remain second- lowest water rate in the State of these seven communities. $35 - $30 - $25 m $20 - $5 $0 Proposed Water Rates (FY 15) $23.18 $23.23 $25.64 $24.93 $28.77 $30.30 $26.85 $27.13 Des Moines Dubuque Council BluffsCedar Rapids Average wlo Ames Iowa City West Des Moines For Fiscal Year 2015, the highest- ranked city (West Des Moines - $30.30) is Dubuque approximately 24.23% higher than Dubuque, and the average ($26.85) is approximately 10.32% higher than Dubuque. 46 1 SANITARY SEWER I am recommending a 5% increase in the Sanitary Sewer Rate. Water & Resource Recovery Center Manager Jonathan Brown has contacted other cities in Iowa with a population over 50,000 to determine the recommended sewer rates for these communities for Fiscal Year 2015. Dubuque would be the sixth - lowest sewer rate in Fiscal Year 2014 (the same as in Fiscal Year 2013). $45 - $40 $35 $30 $15 - $10- $5 $0 Proposed Sewer Rates (FY 15) $21.93 $22.40 $17.21 • V $30.45 $31.02 1 $27.34 $38.79 $34.55 $36.00 $36.08 $36.10 1 EP Council Cedar Waterloo Average Ames Dubuque Sioux City Davenport Iowa Cry West Des Des Moines Snuffs Rapids w/o Dubuque Moines For Fiscal Year 2015, the highest - ranked city (Des Moines - $38.79) is approximately 15.76% higher than Dubuque, and the average ($30.45) is approximately 5% lower than Dubuque. 47 The solid waste collection fees in Fiscal Year 2013 are recommended to increase 5 %. $25 - $20 a°'i $15 u- $10.55 $11.69 $11.23 0$10 - Proposed Solid Waste Collection Rates (FY 15) $5 $a $14.85 $15.30 $15.90 $12.50 $138 $19.55 $19.63 $18.00 West Des Oes Moines Davenport Waterloo Dubuque Average Sioux City Iowa City Council Ames Cedar Moines w/o Dubuque Bluffs Rapids For Fiscal Year 2015, the highest - ranked city (Cedar Rapids - $19.63) is approximately 57% higher than Dubuque, and the average ($14.85) is approximately 19% higher than Dubuque. In Fiscal Year 2015, Dubuque will have the fifth - lowest refuse collection rate, assuming other cities do not increase rates. In Fiscal Year 2014, Dubuque had the third - lowest refuse collection rate. In Fiscal Year 2015, the average homeowner will pay $68.09 more for City services, including property taxes, sanitary sewer, water, refuse and stormwater, than in 2014 — an average increase of just $37.86 per year since 1996. Dubuque's Rankings among Iowa's 10 Largest Cities ISSUE RANK Property Tax Rate per Capita LOWEST City Property Tax Rate 2nd LOWEST Water Rate 2nd LOWEST Refuse Collection Rate 5th LOWEST Sanitary Sewer Rate 5th LOWEST Stormwater Rate 2nd HIGHEST 48 IMPACT ON AVERAGE RESIDENTIAL PROPERTY - EXAMPLE ACTUAL CHANGE CITY TAX PERCENT IF HTC DOLLAR ACTUAL - PAST HISTORY CALCULATION CHANGE 100% CHANGE FUNDED FY 1989 FY 1990 FY 1991 FY 1992 FY 1993 FY 1994 FY 1995 FY 1996 FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2004 FY 2005 FY 2005 FY 2006 FY 2006 FY 2007 FY 2007 FY 2008 FY 2008 FY 2009 FY 2009 FY 2010 FY 2010 FY 2011 FY 2011 FY 2012 FY 2012 FY 2013 FY 2013 FY 2014 FY 2015 "City" Property Tax "City" Property Tax "City" Property Tax* "City" Property Tax "City" Property Tax* "City" Property Tax "City" Property Tax* "City" Property Tax "City" Property Tax* "City" Property Tax "City" Property Tax* "City" Property Tax "City" Property Tax "City" Property Tax "City" Property Tax* "City" Property Tax With Homestead Adj. "City" Property Tax* With Homestead Adj.* "City" Property Tax(1) With Homestead Adj. (1) "City" Property Tax *(2) With Homestead Adj.* "City" Property Tax With Homestead Adj. "City" Property Tax With Homestead Adj. "City" Property Tax With Homestead Adj. "City" Property Tax With Homestead Adj. (3) "City" Property With Homestead Adj. (3) "City" Property With Homestead Adj. (3) "City" Property "City" Property $ 453.99 $ 449.94 $ 466.92 $ 483.63 $ 508.73 $ 510.40 $ 522.65 $ 518.10 $ 515.91 $ 512.25 $ 512.25 $ 511.38 $ 511.38 $ 511.38 $ 485.79 $ 485.79 $ 493.26 $ 485.93 $ 495.21 $ 494.27 $ 504.62 $ 485.79 $ 496.93 $ 496.93 $ 510.45 $ 524.53 $ 538.07 $ 538.07 $ 550.97 $ 564.59 $ 582.10 $ 611.19 $ 629.78 $ 661.25 $ 672.76 $ 705.71 $ 728.48 - 11.40% - 0.89% + 3.77% + 3.58% + 5.19% + 0.30% + 2.43% 0.87% 0.42% 0.71% 0.00% 0.17% 0.00% 0.00% 5.00% + 1.54% + 0.40% + 1.90% - 1.52% + 2.72% + 5.41% + 2.40% + 5.65% + 8.19% + 6.82% + 4.90% + 3.23% 0.00% + 0.03% + 1.72% 1.72% 0.00% + 2.76% + 0.00% + 2.47% + 5.00% + 5.00% - $ 58.39 - $ 4.04 +$ 16.98 +$ 16.71 +$ 25.10 +$ 1.51 +$ 12.41 - $ 4.54 - $ 2.19 -$ 3.66 $ 0.00 - $ 0.87 $ 0.00 $ 0.00 -$ 25.58 $ 0.00 +$ 7.46 +$ 0.14 +$ 1.95 +$ 8.34 +$ 9.41 -$ 8.48 -$ 7.69 $ 0.00 +$13.52 +$14.08 +$27.62 +$ 0.00 +$12.90 +$13.62 +$31.13 +$29.09 +$47.68 +$31.47 +$42.98 +$32.95 +$22.77 Average FY 1989 -FY 2015 with Homestead Adj. + 1.39% + $ 8.00 Average FY 1989 -FY 2015 without Homestead Adj. + 0.71 % + $ 4.35 49 PROJECTION ** FY 2016 "City" Property Tax* FY 2017 "City" Property Tax FY 2018 "City" Property Tax* FY 2019 "City" Property Tax CITY TAX CALCULATION $ 755.31 $ 777.96 $ 811.42 $ 843.89 PERCENT CHANGE + 3.68% +3.00% +4.30% +4.00% DOLLAR CHANGE +$ 26.83 +$ 22.65 +$ 33.46 +$ 32.47 * Denotes year of State - issued equalization orders. ^ Impact to the average homeowner if the State funds the Homestead Property Tax Credit at 62 %. (1) The Fiscal Year 2006 property tax calculation takes into account 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 Fiscal Year 2005 & 2006. (3) The City adopted a budget in Fiscal Year 2011 and 2012 that provided no increase to the average homeowner. The State of Iowa under funded the Homestead Property Tax Credit in both years costing the average homeowner an additional $18.59 in Fiscal Year 2012 and $11.51 in Fiscal Year 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. * 2002 -2003 * 2003 -2004 * 2004 -2005 * 2005 -2006 * 2006 -2007 * 2007 -2008 * 2008 -2009 * 2009 -2010 * 2010 -2011 * 2011 -2012 * 2012 -2013 2013 -2014 State of Iowa Homestead Property Tax Credit History Funded 100% of the Homestead Property Tax Credit Funded 85% of the Homestead Property Tax Credit Funded 81 % of the Homestead Property Tax Credit Funded 78% of the Homestead Property Tax Credit Funded 77% of the Homestead Property Tax Credit Funded 73% of the Homestead Property Tax Credit Funded 72% of the Homestead Property Tax Credit Funded 72% of the Homestead Property Tax Credit Funded 64% of the Homestead Property Tax Credit Funded 62% of the Homestead Property Tax Credit Funded 78% of the Homestead Property Tax Credit Funded 100% of the 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 Fiscal Year 2004, the State of Iowa did not fully fund the State Homestead Property Tax Credit resulting in the average homeowner paying the unfunded portion. Again this has no impact on what the City receives, however as a result has caused the average homeowner to pay more taxes. 50 IMPACT ON COMMERCIAL PROPERTY - EXAMPLE CITY TAX PERCENT DOLLAR ACTUAL - PAST HISTORY CALCULATION CHANGE CHANGE FY 1989 "City" Property Tax $2,106.42 - 15.43% -$ 384.19 FY 1990 "City" Property Tax $2,086.50 - .95% - $ 19.92 FY 1991 "City" Property Tax* $2,189.48 + 4.94% +$ 102.98 FY 1992 "City" Property Tax $2,280.18 + 4.14% +$ 90.70 FY 1993 "City" Property Tax* $2,231.05 - 2.15% -$ 49.13 FY 1994 "City" Property Tax $2,250.15 + 0.86% +$ 19.10 FY 1995 "City" Property Tax* $2,439.60 + 8.42% +$ 189.45 FY 1996 "City" Property Tax $2,439.60 + 0.00% +$ 0.00 FY 1997 "City" Property Tax* $2,659.36 + 9.01 % +$ 219.76 FY 1998 "City" Property Tax $2,738.43 + 2.97% +$ 79.07 FY 1999 "City" Property Tax* $2,952.03 + 7.80% +$ 213.60 FY 2000 "City" Property Tax $2,934.21 - 0.60% -$ 17.82 FY 2001 "City" Property Tax $2,993.00 + 2.01 % +$ 58.86 FY 2002 "City" Property Tax $2,910.25 - 2.77% -$ 82.84 FY 2003 "City" Property Tax* $3,186.27 + 9.48% +$ 276.03 FY 2004 "City" Property Tax $3,278.41 + 2.89% +$ 92.15 FY 2005 "City" Property Tax* $3,349.90 + 2.18% +$ 71.48 FY 2006 "City" Property Tax (1) $3,152.52 - 5.89% -$ 197.38 FY 2007 "City" Property Tax* $3,538.03 +12.23% +$ 385.50 FY 2008 "City" Property Tax $3,668.64 + 4.26% +$ 150.62 FY 2009 "City" Property Tax* $3,524.48 - 3.63% -$ 133.94 FY 2010 "City" Property Tax $3,524.48 - 0.85% -$ 30.23 FY 2011 "City" Property Tax $3,585.16 + 1.72% +$ 60.68 FY 2012 "City" Property Tax $3,736.64 + 4.23% +$ 151.48 FY 2013 "City" Property Tax $3,855.96 + 3.19% +$ 119.32 FY 2014 "City" Property Tax $3,942.14 + 2.24% +$ 86.20 FY 2015 "City" Property Tax* $3,896.93 - 1.15% -$ 45.21 Average FY 1989 -2015 + 1.82% +$ 52.09 PROJECTION ** FY 2016 "City" Property Tax* FY 2017 "City" Property Tax FY 2018 "City" Property Tax* FY 2019 "City" Property Tax $3,640.37 $3,624.38 $3,693.15 $3,752.84 - 6.58% -$ 256.56 - 0.44% - $ 15.99 + 1.90% + $ 68.77 + 1.62% + $ 59.69 * Denotes year of State - issued equalization orders (1) The Fiscal Year 2006 property tax calculation takes into account the 3% valuation decrease for commercial property as determined by the reappraisal. (2) Fiscal Year 2015 is the first year of the Business Property Tax Credit estimated at $148 and rollback to 95 %. Fiscal Year 2016 the rollback is 90 %. 51 IMPACT ON INDUSTRIAL PROPERTY - EXAMPLE CITY TAX PERCENT ACTUAL - PAST HISTORY CALCULATION CHANGE FY 1989 "City" Property Tax $5,900.35 - 15.40% FY 1990 "City" Property Tax $5,844.55 - .90% FY 1991 "City" Property Tax $6,133.00 + 4.90% FY 1992 "City" Property Tax $6,387.05 + 4.10% FY 1993 "City" Property Tax $6,249.45 - 2.20% FY 1994 "City" Property Tax $6,302.95 + 0.90% FY 1995 "City" Property Tax $5,891.05 - 6.50% FY 1996 "City" Property Tax $5,891.05 + 0.00% FY 1997 "City" Property Tax $5,690.75 - 3.40% FY 1998 "City" Property Tax $5,700.56 + .17% FY 1999 "City" Property Tax $5,536.70 - 2.87% FY 2000 "City" Property Tax $5,358.00 - 3.23% FY 2001 "City" Property Tax $5,533.00 + 3.28% FY 2002 "City" Property Tax $5,380.42 - 2.77% FY 2003 "City" Property Tax $5,106.00 - 5.10% FY 2004 "City" Property Tax $5,136.50 + .60% FY 2005 "City" Property Tax $5,036.00 - 1.96% FY 2006 "City" Property Tax(1) $5,814.61 +15.46% FY 2007 "City" Property Tax $5,983.21 + 2.90% FY 2008 "City" Property Tax $6,184.95 + 3.37% FY 2009 "City" Property Tax $5,976.44 - 3.37% FY 2010 "City" Property Tax $5,909.69 - 1.12% FY 2011 "City" Property Tax $6,011.44 - 1.72% FY 2012 "City" Property Tax $6,265.43 + 4.23% FY 2013 "City" Property Tax $6,465.48 + 3.19% FY 2014 "City" Property Tax $6,610.00 + 2.24% FY 2015 "City" Property Tax $6,131.80 - 7.23% Average FY 1989 -FY 2015 - 0.46% PROJECTION ** ACTUAL - PAST HISTORY FY 2016 "City" Property Tax FY 2017 "City" Property Tax FY 2018 "City" Property Tax FY 2019 "City" Property Tax CITY TAX PERCENT CALCULATION CHANGE $5,778.23 -5.77% $5,768.91 -0.16% $5,871.66 +1.78% $5,959.62 +1.50% (1)The Fiscal Year 2006 property tax calculation takes into account the 19.9% industrial property as determined by the reappraisal. 2) Fiscal Year 2015 is the first year of the Business Property Tax Credit $148 and rollback to 95 %. Fiscal Year 2016 the rollback is 90 %. 52 DOLLAR CHANGE - $1,074.65 - $ 55.80 288.45 254.05 137.60 53.50 411.90 0.00 200.30 9.81 163.86 178.70 175.55 153.13 274.40 30.50 100.50 778.61 168.60 201.74 208.51 66.75 101.75 254.00 200.04 144.53 478.20 31.23 DOLLAR CHANGE -$ 353.57 -$ 9.32 +$ 102.75 +$ 87.96 valuation increase for estimated at History of Increases in Property Tax Askings % Change Fiscal "City" Property in Tax Present Impact on Year Tax Askings Askings Homeowner* FY 1989 $10,918,759 -12.0% Sales Tax -11.4% initiated FY 1990 $10,895,321 - 0.2% - 0.9% FY 1991 $11,553,468 + 6.0% + 3.8% FY 1992 $12,249,056 + 6.0% + 3.6% FY 1993 $12,846,296 + 4.9% + 5.0% FY 1994 $13,300,756 + 3.5% + 0.3% FY 1995 $13,715,850 + 3.1 % + 2.4% FY 1996 $14,076,320 + 2.6% - 0.9% FY 1997 $14,418,735 + 2.4% - 0.4% FY 1998 $14,837,670* + 2.9% - 0.7% FY 1999 $15,332,806* + 3.3% 0.0% FY 2000 $15,285,754 - 0.3% - 0.2% FY 2001 $15,574,467 + 1.9% 0.0% FY 2002 $15,686,579 + 0.7% 0.0% FY 2003 $15,771,203 + 0.5% - 5.0% FY 2004 $16,171,540 + 2.5% 0.0% FY 2005 $16,372,735 + 1.2% 0.0% FY 2006 $16,192,215 - 1.1% + 1.7% FY 2007 $17,179,994 + 6.1 % - 1.7% FY 2008 $18,184,037 + 5.8% 0.0% FY 2009 $18,736,759 + 3.0% +2.8% FY 2010 $19,095,444 + 1.9% 0.0% FY 2011 $19,878,962 + 4.1 % +2.5% FY 2012 $21,284,751 + 7.1% +5.0% FY 2013 $22,758,753 + 6.9% +5.0% FY 2014 $23,197,623 + 1.9% +4.9% FY 2015 $25,527,366 +10.0% +3.2% Average FY 1989 -2015 + 2.77% +0.70% *Without TIF Accounting change. **Does not reflect State unfunded portion of Homestead Credit. The Diamond Jo expansion opened on December 2, 2008 tracking fairly closely to the need to increase property tax revenues with the corresponding decreases in the Dubuque Racing Association lease payments. 53 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: "City" Property Year Tax Askings (000) FY 2014 $23,198 FY 2015 $25,527 + 10.04% FY 2016 $26,393 + 3.39% FY 2017 $26,940 + 2.07% FY 2018 $27,825 + 3.28% FY 2019 $28,828 + 3.60% % Increase % / $ Impact on Avg. Residential Property* Impact on Tax Askings and Average Residential Property The following is a historical City tax rate comparison: Fiscal Year FY 1987 FY 1988 FY 1989 FY 1990 FY 1991 FY 1992 FY 1993 FY 1994 FY 1995 FY 1996 FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 "City" Tax Rate 14.5819 13.9500 11.8007 11.6891 12.2660 12.7741 12.4989 12.6059 11.7821 11.7821 11.3815 11.4011 11.0734 10.7160 11.0671 10.7608 10.2120 10.2730 10.0720 9.6991 9.9803 10.3169 9.9690 9.8577 10.0274 10.4511 10.7848 11.0259 FY 2015 11.2059 Average FY 1987 -2015 54 +3.23% / +$22.77 +3.68% / +$ 26.83 +3.00% / +$ 22.65 +4.30% / +$ 33.46 +4.00% / +$ 32.47 % Change in Tax Rate -4.33% -15.41% -0.95% 4.94% 4.14% -2.15% 0.86% -6.54% 0.00% -3.40% 0.17% -2.87% -3.23% 3.28% -2.77% -5.10% 0.60% -1.96% -3.70% 2.90% 3.37% -3.37% -1.12% 1.72% 4.22% 3.19% 2.23% 0% -0.90% PROJECTIONS Fiscal "City" % Change Year Tax Rate in Tax Rate FY 2016 11.1333 +0.97% FY 2017 11.1680 +0.31% FY 2018 11.3449 +1.58% FY 2019 11.4921 +1.30% The Keys to Dubuque's Financial Success are: • a continued growth in assessed property valuation (3.64% in Fiscal Year 2015); • efficient operation with a 3.4% (19.83 full -time equivalent) full -time reduction in the City's workforce since the 1980s; • increased use of grants, mostly federal (Over $385 million in the last five years); • diversified revenue streams including local option sales tax, utility franchise fee, cable franchise fee, stormwater utility fee, gaming, land leases, etc.; • reduction in debt supported by the property tax debt service levy, now only 0.44% of debt; • increased public /private partnerships; • entrepreneurial City Council policy decisions; • planning, partnerships and people (engagement, leadership and execution); and • caring citizens, significant business investments, committed elected officials, hard - working not - for - profits, and talented city employees. An article in the National Civic Review about the National Civic League Civic Index written by Editor Michael McGrath says, "Civic pride is the glue that makes communities capable of overcoming challenges and divisions and working together toward common solutions and the common good. Community vision is what gives them the road map they need to get where they want to go." In the same article he says, "A community must have strong leaders from all sectors who can work together with citizens to reach consensus on strategic issues that face the community and its region. Committed individuals help develop a community's capacity to solve problems, and communities must resolve to increase their problem - solving capacity." The article goes on to say, "The seven components of the Civic Index are used to identify and measure those capacities and qualities that explain why some communities seem more able than others to address tough challenges." 55 "The seven capacities we have identified as most important for communities to focus on are: 1. Participation and civic engagement 2. Diversity and inclusiveness 3. Networking, information and communications 4. Decision making and consensus building 5. Partnerships and collaboration 6. Leadership 7. Community vision and pride The National Civic League has provided a road map that Dubuque closely follows. As you review this budget recommendation, you will note that it is supportive of the Sustainable Dubuque initiative. Through this lens, we strive to meet the environmental, economic, and social equity needs of today without reducing the ability of future generations to meet their needs. Each activity supports at least one, and in most cases several, of the Sustainable Dubuque principles. I want to thank the citizens and businesses of Dubuque for deciding that they prefer the price of progress over the higher price of stagnation and decline. None of the progress this community is experiencing would be possible without the citizens' determination, the business investment, the leadership of Mayor Roy BuoI and the City Council, the tremendously talented City employees, and the robust partnerships with local not -for- profits and different levels of government. I want to thank Budget Director Jennifer Larson, Assistant City Manager Cindy Steinhauser, Senior Budget Analyst Mary Brooks, Public Information Officer Randy Gehl, Office Manager Juanita Hilkin, Secretary Deb Searles, Secretary Stephanie Valentine, and Communications Assistant Natalie Riniker, for all their hard work and dedication in preparation of this budget recommendation. I look forward to City Council questions and input as you review this budget recommendation and then this will be implemented according to your final decisions and direction. MCVM:jh 56 Michael C. Van Milligen