3 12 15 Issues Impacting City Budget BrochureTHE CITY OF
Dui
Masterpiece on the Mississippi
Fiscal Year 2016
Recommended Budget
The Dubuque City Council is currently considering the Fiscal Year (FY) 2016 operating and capital improvement budgets. The public hearing to
adopt the FY2016 budget will be held on March 12, 2015. The City's 2016 fiscal year begins July 1, 2015, which is when new utility user fees will
go into effect. For detailed information on the FY2016 recommended budget, visit www.cityofdubuque.org/FY2016budget or call 563-589-4110.
Issues Impacting the City Budget
Decreased Gaming Revenues
Gaming revenues generated from lease payments from the
Dubuque Racing Association (DRA) have been decreased
significantly (-$555,123), based on revised projections from
the DRA. This follows a $907,612 decrease in FY2014 and an
$811,431 decrease in FY2015. The addition of video gaming in
Illinois has significantly impacted the Dubuque gaming market,
which impacts City revenues.
Property Revaluation of Commercial and Industrial Properties
A property revaluation of commercial and industrial property
was conducted and the appraising firm applied size discounts to
Large office buildings, large factories and distribution buildings
due to the limited number of buyers. Most of Dubuque's large
buildings are located within urban renewal areas so this property
revaluation greatly reduced the taxable value of these properties
by $25.3 million ($762,303 in revenue). It also resulted in reduced
tax increment financing (TIF) revenue of $172,110 for payments
related to economic/community development projects, including
parking -related projects.
New Multi -residential Property Tax Classification
Beginning in FY2017, new State legislation requires a rollback, or
assessment limitations order, on multi -residential property which
will eventually equal the residential rollback. This loss in tax
revenue of $453,252 from multi -residential property when fully
implemented in FY2022 will not be backfilled by the State. This
change does not start until FY2017, but other revenue shortfalls
will require increases in rental license and inspection fees
beginning in FY2015, the current budget year, ending the subsidy
of the rental inspection program by General Fund property taxes.
2013 State Property Tax Reform Legislation
Other elements of the property tax reform passed by the Iowa
Legislature in 2013 have created a tremendous amount of
uncertainty in the budget process. While the State has committed
to provide some funding for the City revenue reductions caused
by the decrease in taxable value for commercial and industrial
properties, key legislators have been quoted in the media as
casting doubt on the reimbursements.
Water & Sanitary Sewer Utility Issues
Water usage and water department expenses vary from year
to year based on several factors, especially the weather. Winter
weather affects the number of water main breaks that must be
repaired. Above or below average rainfall in spring and summer
dramatically impact water usage. When actual usage does not
meet the usage projections, revenue projections are not met.
Although there have been water rate increases, the actual revenue
from those increases has been lower than projected and revenue is
not meeting expenses. Sanitary sewer revenue is based on water
usage so those projections and revenues are directly impacted by
water. Beginning in FY2010, auditors began reclassifying some
water fund capital expenditures as operating expenditures, which
required a $1 million shift from capital to operating expenditures.
The City's water fund also has outstanding revenue bonds with
covenants requiring debt service coverage of 1.25 times the
annual debt service payment. The sewer fund has outstanding
State Revolving Fund revenue loans that have bond covenants
that require debt service coverage of 1.10 times the annual debt
service payment. The debt service coverage for both funds must
be calculated on accrual basis rather on cash basis, making it
much more difficult to project because the City budgets and
prepares projections on a cash basis.
Need to Increase General Fund Reserve
Moody's Investors Service affirmed Dubuque's Aa2 bond rating
in November 2014 with a negative outlook noting the decline of
the City's general fund reserve. Dubuque's general fund reserve
declined from 24 percent of general fund revenues in fiscal year
2013 to 17 percent in FY2014 and is projected to decline to 12
percent in FY2015. This decline in the general fund reserve is due
to planned capital expenditures of $5 million. Moody's prefers
Aa2-rated organizations to have a general fund reserve greater
than 20% while the City's fund reserves policies require a 10%
general fund reserve and states the City may continue to add to
the balance when additional funds are available until 20 percent
is reached. It will be necessary for the City to begin increasing its
general fund reserve which will impact the capital improvement
program.
Data Entry Error
The property lease for the ABC Building was inadvertently
entered as $455,894 instead of $45,894 during the FY2015
budget process, which resulted in a revenue shortfall of $410,000.
Lower -Than -Projected Property Valuations
General fund valuations came in lower than projected and will
generate $120,000 less in property tax revenue.
Actions to Address Budget Issues
Position Eliminations
a e`�
;Position
Assistant Economic Development Director
FTE
1.00
Type
FT
Status
Vacant
Economic Development
Economic Development
Economic Development Coordinator
1.00
FT
Laid Off
Housing & Community Development
Lead Paint Assistant
1.00
FT
Laid Off
Housing & Community Development
Lead Paint Inspector
1.00
FT
Laid Off
Housing & Community Development
Lead Paint Program Supervisor
1.00
FT
Vacant
Housing & Community Development
Healthy Homes Supervisor
1.00
FT
Laid Off
Housing & Community Development
Healthy Homes Program Inspector
1.00
FT
Laid Off
Parking
Iowa Street Ramp Cashier
0.33
PT
Vacant
Recreation
Recreation Classes Custodian
0.32
PT
Vacant
Recreation
Recreation Supervisor
0.65
Seasonal
Vacant
Recreation
Concession Worker
0.21
Seasonal
Vacant
Recreation
Pro Shop Attendant
0.47
Seasonal
Vacant
Transit (The Jule)
Bus Operators (Route Reconfiguration)
1.50
PT
Vacant
Transit (The Jule)
Bus Operators (Summer Trolley Modification)
0.42
PT
Vacant
Water
Secretary
1.00
FT
Vacant
Water & Resource Recovery Center
Plant Operator
1.00
FT
Vacant
Water & Resource Recovery Center
Plant Operator
1.00
FT
Vacant
TOTAL
13.90
Frozen Positions
Department
Position
Management Intern
FTE
0.60
Type
PT
Vacant
City Manager's Office
City Manager's Office
Secretary
1.00
FT
Vacant
Engineering
Traffic Engineering Assistant
1.00
FT
Vacant
Information Services
Information Services Help Desk
1.00
FT
Vacant
Library
Library Aide
0.50
PT
Vacant
Library
Library Assistant
0.50
PT
Vacant
Library
Library Assistant
0.75
PT
Vacant
Library
Library Assistant
0.75
PT
Vacant
Library
Library Clerks
0.18
PT
Vacant
Park
Assistant Horticulturalist
1.00
FT
Vacant
Park
Maintenance Worker
1.00
FT
Vacant
Park
Park Ranger/Maintenance Worker
1.00
FT
Vacant
Park/Public Works
Assistant Horticulturalist
1.00
FT
Vacant
Park/Recreation
Custodian
0.20
PT
Vacant
Police
Records Clerk
1.00
FT
Vacant
Water
Secretary
0.50
PT
Vacant
TOTAL
11.98
Additional Actions & Recommendations
• Frozen employee travel, reducing opportunities for continuing
education
• Non -bargaining unit employees will not receive a pay raise
• 10% reduction in most City purchase of service contracts and grant
programs
• Delayed and canceled capital improvement projects
• Other efficiencies like eliminating contracting out for Jule Transit
management services, saving over $50,000 per year
• Current budget year amendment to reduce expenditures
• Parking fee increases
• Rental licensing and inspection fee increases
• Recreation program fee increases (swimming pool admission)
• Increasing electric and gas utility franchise fees from 3% to 5%
• Other recommended rates and fees are detailed on the next two
pages of this document.
Recommended FY2016 City Portion of Property Taxes
$4
$2
$1,000
$900
$800
$700
$600
$500
$400
$300
$200
$100
$o
PROPERTY TAX RATES
(DUBUQUE'S RECOMMENDED FY2016 RATE VS. ADOPTED FY2015 RATES)
$10.86
Arne
$17.66 $17.75 $17.95
$16.36 $16.71 $16.76
$15.22 $15.39
$12.75
1111111.10111111,1
iDavenport DesCouncl WaterlMolnes' BIUXs
Dubuque
PROPERTY TAXES PER CAPITA
(DUBUQUE'S RECOMMENDED FY2016 RATE VS. ADOPTED FY2015 RATES)
$551
$431 $450 $450
$639
$567 $567
$$$7" $720
$574
Dubuque Ames Sioux City Ankeny Des Waterloo AVERAGE Davenport Comm
Maines wyo Bluffs
Dubuque
$715
$913
Cedar Iowa City West Des
Rapids Moines
Where do your property taxes go?
Property taxes are collected by the County and distributed monthly
to the City of Dubuque and other taxing bodies. Property taxes are
distributed among the Dubuque Community School District (42.38%),
City of Dubuque (33.39%), Dubuque County (19.47%), Northeast Iowa
Community College (2.75%), and independent authorities* (2.01%).
Property taxes are certified July 1 with the first half due on or before
September 30 and the second half due on or before March 31. For more
information, contact the City Assessor at 563-589-4416.
* "Independent Authorities" includes City Assessor, County Hospital
(Sunnycrest Manor), Dubuque County Agriculture Extension, and the
Tuberculosis and Brucellosis Eradication Fund.
• Recommended Tax Rate = $11.03 per $1,000 assessed value
• No increase in property tax rate and 2.63% increase in property
tax cost for the average homeowner from FY2015
• Provides a property tax decrease for industrial properties
(-6.68%) and commercial properties (-7.49%).
• Dubuque's rate is the SECOND LOWEST of the 11 cities in Iowa
with a population over 50,000. The highest rate (Waterloo,
$17.95) is 62.7% higher than Dubuque's rate, and the average
($15.39) is 39.5% higher.
• Dubuque's tax rate in FY1987 was $14.58, 24.39% higher than
the recommended FY2016 rate of $11.03. The City is an efficient
operation and has reduced its full-time workforce by 3.8% since
the 1980s.
• Dubuque would have the LOWEST taxes per capita in the state for
the city portion of property tax rate
• The highest city (West Des Moines, $913) would be 112% higher
than Dubuque, and the average ($639) would be 48.3% higher.
PROPERTY TAX SPLIT (FY2014—FY2015)
Dubuque's Rankings among Iowa's 10 Largest Cities
NCC Independent
2.75% 2.01%
School
District
42.38%;
County
19.47%
Assistance Available to Low -Income Residents
A 50% discount in refuse and stormwater
fees is available for qualified residents.
Eligibility guidelines include:
Age & Annual Income: Head of the
household is 65 years of age or older, and
annual gross household income is $24,300
or less for a one-person household or
$27,800 or less for a two person household.
Family Size & Annual Income: Family
households of 5 or more people that meet
current Section VIII Housing guidelines.
Extreme Financial Hardship: Under the
discretion of the City Manager or designee.
For more information, or to apply, visit
www.cityofdubuque.org/utilitybilling or call
563.589.4144.
Dubuque's Ran
Lowest
Property Tax Rate Per Capita
City Portion of Property Tax Rate
Second Lowest
Water Rate
Third Lowest
Curbside Collection Rate
Fifth Lowest
Sanitary Sewer Rate
Fourth Highest
Stormwater Rate
Second Highest
NCC Independent
2.75% 2.01%
School
District
42.38%;
County
19.47%
Assistance Available to Low -Income Residents
A 50% discount in refuse and stormwater
fees is available for qualified residents.
Eligibility guidelines include:
Age & Annual Income: Head of the
household is 65 years of age or older, and
annual gross household income is $24,300
or less for a one-person household or
$27,800 or less for a two person household.
Family Size & Annual Income: Family
households of 5 or more people that meet
current Section VIII Housing guidelines.
Extreme Financial Hardship: Under the
discretion of the City Manager or designee.
For more information, or to apply, visit
www.cityofdubuque.org/utilitybilling or call
563.589.4144.
Recommended FY2016 Rates & Fees
Curbside Collection
Basic Rate = $13.90/month
530
525
o$20
i $15
510
E
' 55
0
511.92 512.00
$10.55
513.00
520.31
$18.00
515.30 515.90 $15.93 916.111
$13.90
$26.25
West Des Davenport Waterloo Des Dubuque Sioux City Iowa City Average Ankeny Council Cedar Ames
Moines w/o Bluffs Rapids
Dubuque
Moines
• 5% increase from FY2015 (was $13.24)
• Average monthly impact = $0.66
Dubuque would have the fifth -lowest refuse collection rate when ranked
among similar communities. The highest -ranked city (Ames, $26.25)
would be 89% higher than Dubuque's rate, and the average ($15.93)
would be 14.6% higher than Dubuque.
Sanitary Sewer
Avg. Household Rate* _ $36.96/month
570
$60
$50
0
E 540
8-
$30
$20
510
50
$32.57
Council Waterloo
Bluffs
Cedar
Rapids
534.30 534.55 936.08
557.65
Ames Average Sioux City Iowa City West Des Dubuque Davenport Des Ankeny
w/o Moines Moines
Dubuque
• 10% increase from FY2015 (was $33.58)
• Average monthly impact = $3.38
Dubuque would have the fourth -highest sanitary sewer rate among
these communities. The highest -ranked city (Ankeny, $57.65) is 56%
higher than Dubuque's rate, and the average ($34.30) is 7.2% lower
than Dubuque.
*Average household rate based on 6,000 gallons per month at $0.0061633 per
gallon
Stormwater
Avg. Household Rate* _ $6.38/month
512
510
g $8
f
i. 56
s4
e 52
51.84
$2.49
$3.45 $3.50
54.25 54.67
$5.39 55.50
$6.38
• 6.79% increase from FY2015 (was $5.98)
$16.95 • Average monthly impact = $0.40
• Not-for-profit businesses automatically receive 50% discount
50
Sioux City Davenport Ames Iowa City West Des Average Waterloo Ankeny Dubuque Des
Moines wlo Moines
Dubuque
Dubuque is in the midst of a $180 million project to protect 1,373
properties from stormwater flooding. The Bee Branch Watershed
Flood Mitigation Project will prevent an estimated $582 million
in damages over the 100 -year design life of the project, with a
return on investment of $6 for each $1 spent. The highest rate (Des
Moines, $10.95) would be 71.6% higher than Dubuque's rate,
and the average ($4.67) would be 26.8% lower than Dubuque.
*Monthly rate for majority of Dubuque households based on usage of 1 SFU
[single family unit]
Water Avg. Household Rate* = $26.80/month
535
531.82 532.32
530.22
y 530 $28.22 028.71
$26.80 527.18
525.48 525.71
0 825 -
0
520
015
E $10
ce 55
80
Wpids De, Moines Dubuque CourC Ames Du erage ye. Iowa City West Des Ankeny
Blunsl Molnas
• 10% increase from FY2015 (was $24.36)
• Average monthly impact = $2.44
Dubuque would have the third -lowest water rate among these
communities. The highest rate (Ankeny, $32.32) would be 20.6% higher
than Dubuque's rate, and the average ($28.71) would be 7.1% higher.
*Average household rate based on 6,000 gallons per month at $0.0045 per gallon