CEDAR RAPIDS — The city will begin setting aside more money for permanent flood control under a fiscal 2019 budget proposal released Tuesday.
The capital outlay is part of a budget proposal that includes a slightly larger operating fund — fueled mostly by property taxes — that holds the tax rate steady.
“It’s a balanced, hold-the-line budget,” said City Manager Jeff Pomeranz. “It’s a positive for the city. It doesn’t raise property taxes and allows us to continue and enhance programs in the city.”
The $124.9 million operating portion of the more than $500 million overall city budget is 3.6 percent larger than the $120.6 million operating budget in fiscal 2018.
City staff presented the proposed budget Tuesday to the City Council in the first of two two-hour meetings. The budget review continues at 5:30 p.m. Wednesday on the third floor of City Hall, 101 First St. SE.
The council is not expected to finalize the budget until March. It takes effect July 1.
A combination of increased property valuation assessments, new development and properties cycling out of the tax increment finance exemption fueled a 14.5 percent jump in the commercial property base from about $1.8 billion last year to about $2 billion now, Finance Director Casey Drew said. By comparison, commercial values increased only 4.9 percent last year.
The residential property base saw a minuscule increase from $3.69 to $3.71 billion, which was much less than the 7.78 percent increase the previous year. Overall taxable value in the city increased 4.6 percent from $6.4 to $6.7 billion.
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State changes to how apartment complexes are taxed — from the more expensive commercial rate to the less expensive multiresidential rate — means the city is getting less revenue from these properties. But $3.4 million in backfill money from the state — allocated after the Legislature in 2013 adopted historic property tax relief — would cover most of it.
With ongoing budget woes at the state level, though, the backfill payments are in jeopardy, Pomeranz said — at least in the future.
Under the proposed city budget, the residential property tax levy would remain $15.22 per $1,000 in taxable valuation. Utility fees would increase 3.7 percent, or about $40.92 annually for a typical home customer.
Mayor Brad Hart praised the proposal.
“Thank you for having a budget that does not cut a lot of things,” he said.
Pomeranz introduced a new downtown lighting plan — a two- or three-year project estimated to cost $10 million — and expenses related to a Highway 100 offramp as “a couple of large projects ahead of us.” The city on Wednesday clarified those are not part of the fiscal 2019 budget.
The city also would begin setting aside money for flood control to the tune of $4 million next year, which is up from $1 million this year.
Pomeranz noted the city could need to set aside $7 to $28 million in future years to meet the 2015 flood control master plan. This could translate into tax increases ahead, he advised. He said $10 million a year for flood protection could translate to an annual 10.5 cent increase per $1,000 property value.
Other key items in the proposal are a $578,000 increase to police, fire and other public employee retirement accounts; $100,000 for neighborhood planning efforts; $500,000 for an employee wage review and possible adjustments; and $1 million for a new housing rehabilitation initiative.
The golf department projects a deficit of $235,000 in the fiscal 2019 budget, which is an improvement, thanks to cuts and initiatives to raise more revenue.
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The city plans to allocate $878,000 to begin paying off an accumulated golf operating deficit and debt payments.
The city will continue paying for a few other money losers, including $137,000 for convention center and U.S. Cellular Center operating losses; $55,000 for budgeted losses at the McGrath Amphitheatre; and a $123,000 deficit at the Ice Arena.
The jump in property value has expanded the city’s debt capacity, allowing an extra $20 million for some new items including $850,000 for a fire pumper truck; $5.74 million for Americans with Disabilities Act improvements; $500,000 for library circulation materials; and $2 million for improvements to sidewalks, trails, traffic flow and the downtown. Still, the city would use only about half its $558 million debt capacity.