Saturday, February 02, 2008

Budget 101

Budget 101 Blog

FAIR is running its third annual budget teach in this snowy Saturday AM, and I seem to be the only member of the press corps in attendance.

"We weren't very budget literate as community activists," says moderator Karen Kubby, herself a former city council member. "We also noticed that we weren't as articulate and our feedback wasn't as viable because we didn't understand the process." Started a couple years back with just Iowa City, but now it's expanded to the other large local governments. It's all part of an effort to make the budget more accessible for average citizens.

"Sometimes the public hearing is so late in the process that the budget has to be turned in to the state the next week, and we want to make public feedback more viable on the front end."

We have the mayors of Iowa City and North Liberty Regenia Bailey and Tom Salm, Coralville City Manager Kelly Hayworth, Amy Correia of the Iowa City council, and Supervisor Rod Sullivan.

Iowa City goes first. City manager develops budget in fall. Council gets it in December and discussed in January. The manager makes non-binding recommendations.

Correia discusses three parts to the budget. General Fund ($47 million) includes police fire, transit, parks and rec, library, personnel, and aid to agencies. City planning to add bus routes -- expanding North Dodge route into Northgate and also expanding to Peninsula neighborhood. Increasing Broadway routes. Also working on a subsidized cab program for people working outside transit hours. City depts. have been going out and seeking additional funding. Correia would like to expand to Sunday buses.

City is programming in additional firefighters. "We've been hearing for a long time about the need for a 4th station." Hoping to add three firefighters a year to get people ready for 4th station in fiscal 2011. IC also adding 2 cops in FY 2009. "We're planning to add progressive policy direction about having those new officers work on crime prevention." Crime prevention unit was let go several years ago in a budget crunch.

Capital Projects ($33 million) includes some storm sewer upgrades. "Weatherby Splash Pad" in park in SE Iowa City. Neighbors have raised half of costs. East Side Recycling Center is a partnership with Habitat for Humanity. Will move some reccling away from landfill on far far west side. Adding lighting to City Park trails in next couple years.

Enterprise Fund ($45 million), those are funded not by taxes but by business activities. Includes water, garbage, etc. Working to decrease trash going into landfill.

Mayor Bailey talks about the revenue side. "People thing about the budget as numbers only. But everything in here, including our policies, is part of the approval process. This is predominantly decided by the community and the city," though there are some state requirements. Ending balance policy: "We've always said an optimal end balance is 30% Some of us think that is high. It's great to have as a reserve, in case of a disaster, but we came thru the tornado with very little impact on our reserves." Debt policy: "We are butting up against our debt policy which is making it difficult for us to do capital projects. A lot of our capital projects this year are not 'flashy,' they're basic infrastructure." We'll be looking at that more yet this year. "I encourage citizens to look at those policies at the beginning of the process. Those should be as reflective of city values as the numbers."

68% of revenue is property tax. "In Iowa property tax legislation is very much ties to agriculture, and it creates some problems. The entities that provide most of your services are very dependent on what the legislature does with property taxes."

Levies: General levy $8.10 per $1000 assessed valuation, and Iowa City is at max. Transit levy 95 cents per 1000. Library levy is at state max of 27 cents. That required a vote (which was in 2000) Employee benefits levy is 3.63 per 1000. Emergency levy is allowed when cities are at max. "In the last couple years that's been minimal in Iowa City, two years ago it was zero. This year because of the firefighters and police, we decided we had to use that emergency levy." 5 cents per 1000. Debt service (interest on borrowed money) $4.30 per 1000.

Total levy $17.72 per 1000. $17.28 last year. "It is higher than the cities around us, because we have a transit levy and we support our library. Our levies really do reflect the things we value as a community, but we really do try to keep those as low as possible. And we're only a portion of your tax bill." Kubby notes the tax bill includes schools and city. Sullivan says the tax bill is roughly 40% schools, 40% city, 16-17% county, and the rest is Kirkwood and other things.

Bailey: "One of the things that could have a huge impact on Iowa City would be changing the rollback on apartment building. That would be a huge revenue loss to Iowa City. But given the makeup of the state legislature, it seems the cites don't have as much voice as the rural areas. We're the economic engines of the state."

Once budget is published it can go down before the council or board votes, but can't go up.

North Liberty Mayor Tom Salm is next. NL starts talking about budget in September. They did goal setting and strategic planning in late 2007. Department heads came in to present. but "the department heads felt like whatever they discussed with the council, they were going to get." This year, city administrator and assistant are meeting with dept. heads with no council presentation.

"Out tax levy is considerably smaller than Iowa City's, we're a smaller community with fewer needs. We're anticipating a slowdown in the economy, so we tried to hold the line."

$150,000 less in revenue just on bldg permits in the fast growing city. "We've almost doubled every ten years, each census. It causes a lot of growing pains and issues." Levy is $10.97, up 77 cents from last year. Street Dept operates solely on road use tax fund. "We're spread out with a lot of needs, we may need to supplement that at some point from the general fund." They've started bus service with Coralville. 30-35 riders a day. "There's a lot of demand, but the expense is pretty high" so no addnl. $ this year.

The levels of government are interconnected, Salm notes. "Every time we get a new school, there's expenses with streets and utilities. There's three new schools in our city in the last two years." (just realized: no one from the school district here)

NL adding police, they also have a contract for additional service with the sheriff. "And everyone has the same problem with increased fuel costs."

Just filled a new water tower, drilling a new well, $8.5 million expansion in waste water plant. "Part of the growing pains again. Our new plant will be open in August, it's state of the art, we're trying to be leaders." Had to raise sewer rates to cover cost. "Our tax levy is low, but some of our service fees will be a little bit higher."

Coralville's net with manager Kelly Hayworth and council member Tom Gill. Hayworth: "I'm going to talk about the boring part, the numbers, and council member Gill will have the exciting part, the projects." Coralville starts goal setting as far back as March. Departments start working on budgets in October. Hayworth and staff present a recommended budget in early January. Public hearing is March 11. "Don't wait till the public hearing, that's way too late in the process. Get your voice heard as early in the porcess as you can."

Coralville had rollback impact of several hundred thousand, and also predicting $150,000 drop in bldg permits. Statewide franchising bill cost $120,000 drop in revenue. "Mediacom will no longer be paying us teh passthrough fees we received before." Also, statewide building trade permits had an impact.

Hayworth says total budget goes up from $13,080,000 last year to $13,792,000. 5.5% increase. Biggest item is opening the new library which increases library budget by 18%. Notes that the library passed a referendum with 97% yes vote.

Coralville also adding a new parks person focused on wetlands and also has some fire truck replacement costs. Making some solid waste changes, going to fully automated pickup in next two years and that'll mean some new equipment. Hayworth: "Our sticker system is a major reason people increase their recycling, since people have to pay more for more garbage. We want to make sure those incentives are not lost."

Coralville levy rate goes up from $13.28 last year to $13.41 (1% increase). For the hypothetical $100,000 home (not very many of those in Coralville!), the rate actually goes down because of the rollback. Bot for a business, it would go up since commercial property taxed at 100% of valuation.

Gill says new fire station set to open in 2009. New library 200% larger than old. New youth sports complex opening on 12th Avenue, near North Central Junior High (which is over the line into N Liberty). Seeking a grant to expand transit in the Oakdale area.

Hayworth said Highway 6 corridor is in last phase of a reconstruction that's been underway since 1994 (!) and connecting Clear Creek trail system to Coralville with underpasses.

This whole thing is going to be on cable TV, by the way, so you can catch all the stuff I missed while I was scratching my nose or something. Gill: "The reason we can do things like build a new fire station is that we have a volunteer fire department. We do have A fireman (a chief ) that may expand, but I don't see us going to a fulltime fire department." Hayworth: "We have facilities a lot of fulltime departments don't have."

Time for the county with Rod Sullivan. He's got a PowerPoint. Some county services manded, others not. "Eight or nine counties have 60% of the state's population. 75 counties don't have a city as big as North Liberty." County brings in department heads to present to the Board, and has a budget coordinator.

TIF districts are a big issue. "The increment above is captured by the cities but doesn't come back of the county." A lot of Johnson County's budget is intergovernmental. Health and human services are about 40% of the county budget.

"You do pay less taxes to live residentially in the unincorporated areas. There's not the level of services that there is in the cities." Tax rate varies dramatically depending on where in the county you live (which school district etc.)

Big county projects: new Health and Human Services building, just north of the Admin Building. Consolidating several scattered departments; Health, MH/DD, Veterans, Juvenile Court, etc. "There should be some efficienciess by having everybody there, and it should be great for the customers. It'll be a one stop shopping type of place." Also a new SEATS/Secondary Roads facility, and soon a Conservation building.

Big question is still the National Guard armory. Deal was made with Guard in 2002 to trade land, so Guard can move to County Farm area, but Bush has not signed the bill. "Chances are we won't see that till there's a new president in office."

The Joint Communications Center is likely to be big: "We've had some fairly spirited meetings about it." Levy would be $77 per $100,000. "That's a pretty significant jump." Some of the difficulty is timing: "The City and County need to operate separate centers" until up and running, so there will be overlap. "For a couple years, we'll basically have to pay twice till we get that infrastructure in place."

Total county budget about $76 million. The majority of the tax jump is the joint communications levy. "That shows up on your tax bill as part of the county tax, even though it's really a joint effort."

"Traditionally, counties are more fiscally conservative than cities. Johnson County had never borrowed anything until recently -- we didn't even have a credit rating."

"You can be penny wise and pound foolish. Sometimes you have to spend a little bit of money to have savings in the long run. It's unfortunate that so many of these things are happening at the same time." There are expenses with growth: more people in courts, jails, ambulances, it costs more to have an election. "As the county grows, expenses go up, that's just the way it is."

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