Public invited to Iowa City budget work sessions

IOWA CITY - The public has a chance to attend two City Council work sessions on the fiscal 2018 fiscal budget, which will propose a lower property tax rate.

The work sessions are scheduled for 8 a.m. to 4 p.m. Saturday and 1 to 7 p.m. Tuesday, both at City Hall.

The first session will include departmental budget requests and a presentation on how the budget lines up with the city's strategic plan. The second meeting will go over upcoming capital improvement projects.

As proposed, the FY18 budget calls for total city spending of $172.4 million, with $55.8 million of that in the general fund and $41.2 million set earmarked for capital projects.

The city is proposing a tax rate of $16.33 per $1,000 valuation, a drop of 25 cents that the current year's tax rate.

This would be the sixth-straight year of a lower tax rate, and the lowest rate since 2002, according to a budget memo from City Manager Geoff Fruin.

Even with the lower rate, the city anticipates a 2 percent increase in property tax revenue - from $55.3 million in the current fiscal year to $56.5 million in fiscal year 2018.

The city's tax rate also remains among the highest in the area, with property tax rates at least a dollar lower in the cities of Coralville, Cedar Rapids and North Liberty.

'Iowa City's higher rate also reflects enhanced level of public services ... and other factors, such as a significant number of University of Iowa affiliated tax-exempt properties within the jurisdiction,” Fruin said. 'Continued emphasis on a competitive tax rate will help facilitate additional growth in future years through a more affordable environment for residents and businesses.”

Dennis Bockenstedt, Iowa City's finance director, said the city restructured its debt services - the money it owes on bonds - which helped it lower the tax rate.

The city will owe $67.9 million by July 2018, well below its debt limit of around $275 million.

The city's revenue is taking a hit because a 2013 state law is gradually lowering the taxable value of multifamily properties, from the 100 percent commercial rate to the residential rate of 56 percent, Bockenstedt said.

Fruin noted one-time revenues, like increased income from building permits because of a construction boom, have eased pressure on the budget.

Iowa City's roughly 700-page budget document can be found on the city's website, icgov.org.

A public hearing will be set on the proposed budget before the council adopts the FY18 budget.