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December 24, 2009
Iowa City residents would pay slightly higher property taxes, but the city would not make significant cuts to its services or work force in a proposed budget for fiscal year 2011.
In a preliminary budget submitted by the interim city manager to the city council Wednesday, property tax rates would be 0.134 percent less than the current rate -- $17.83 per $1,000 compared with $17.85 this year -- beginning July 1, 2010.
Residents, however, would see an increase in the property taxes owed because the taxable portion of their property's assessed value will be higher, increasing from 45.6 percent to 46.9 percent.
For every $100,000 in property value, residents would owe $836.33 to the city -- a 2.76 percent increase from $813.89 in fiscal year 2010.
Interim City Manager Dale Helling said that while budget projections were looking grim for much of the year, the city council's adoption of a 2 percent franchise fee on gas and electric utilities, along with revenue that opened up earlier than anticipated from a TIF project that had been repaid, brought up the bottom line.
"Between the franchise fee and the unexpected TIF income we received, the situation turned out to be much better than any of us anticipated a few months ago," Helling said.
Because of that new-found revenue, the proposed budget calls for no layoffs within the city ranks and basic services would remain at current levels, Helling said in a memo to the council.
Helling said that earlier this year, he was concerned that the city would have to eliminate positions to make ends meet.
The three-year financial plan within the budget would not create any new positions beyond the public safety workers who would be added this year.
The budget includes the addition of nine new firefighters, including three lieutenants, to staff a new northeast-side fire station. It also allows hiring six new police officers.
The council approved the franchise fee earlier this month to pay for the public safety workers, though several council members indicated they would be interested in lowering the fee come budget time.
Helling expects the economy to continue to hamper the city's ability to generate revenue with property values remaining flat.
It also is becoming more difficult for the city to continue to maintain its capital improvements program, and it has begun to increase its use of debt to fund capital purchases that previously had been paid for with cash, Helling said in the memo.
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