‘Holding the line’

Cedar Rapids City Manager Jeff Pomeranz last night presented his budget recommendations to the City Council for fiscal 2013, which begins July 1. He called it a “hold-the-line” proposal.

The council now will sort through it before a public hearing on March 13.

Highlights

- The city is holding its tax rate of $15.22 per $1,000 of taxable value in place. Other sources of revenue include $3 million in fines from traffic enforcement cameras, $600,000 worth of fees for impounded vehicles and $1.2 million from a new franchise fee on MidAmerican Energy natural gas sales.

- The budget calls for $38.5 million in new bond debt, including $10 million for streets, $11 million for the convention complex and $12 million for a parking ramp near the new federal courthouse.

- The size of the city work force - about 1,200 employees - will remain nearly the same. There will be 1.5 additional positions plus some more seasonal workers in parks and recreation.

- Pay raises for union workers will be 3 percent, plus “step” increases of 2.5 percent for eligible employees. Raises will be 1 percent plus step increases for non-bargaining employees, who have more pay steps.

- Cedar Rapids, like other large Iowa cities, will pay an amount equal to 26.12 percent of police and fire salaries, up from 24.76 percent, into the state police and fire pension system. That's $6 million in total, up $600,000 from the current year. Much of the revenue from traffic enforcement cameras will go to cover the expense.

By the numbers

$15.22 Property tax rate per $1,000 of taxable value, same as this year

50.75 State “rollback,” or percentage of residential properties' assessed value subject to taxation, up from 48.53 percent

100 Percentage of commercial and industrial properties' assessed value subject to taxation, same as this year

4.5 Percentage increase in residents' city tax bills because of the rollback change despite the levy staying the same (the city's portion of the total tax bill is about 40 percent)

$104 Size of city general fund, in millions, up from $99 million this year

 Significance

- A change in the state “rollback” formula will require residential property owners to pay tax on 50.75 percent of their property value, up from 48.53 percent. That will result in a 4.5 percent tax increase for residential property owners even though the levy rate itself is staying the same. For example, the owner of a home assessed at $100,000 will pay about $772 in city property taxes, up from $739 this year.

- Commercial and industrial property owners, meanwhile, continue to pay tax on 100 percent of the value of their property, so they will not see an increase in taxes with the levy rate the same.

- Several unknowns are playing a role in the city's spending plan. The Iowa Legislature is discussing the outlawing of traffic enforcement cameras, which would cost the city $3 million in revenue a year. In addition, the Legislature and the governor are looking to reduce property taxes on commercial and industrial property owners, which could hurt Cedar Rapids, an industrial center, particularly hard. Also, the city has fronted the $19.2 million cost for work on the flood-damaged incinerator at the Water Pollution Control facility and for the demolition of the flood-damaged former Sinclair plant, expecting reimbursement from the Federal Emergency Management Agency. FEMA has denied payment, and the city continues to appeal that decision.

 Reactions

“It is by no means a budget that meets the needs of every department. It's a balancing act. It's an effort to present a plan that allows us to live within our means but also move the city forward progressively in all the areas that we operate.” - City Manager Jeff Pomeranz

“The budget that Jeff is recommending is a pretty tight one. It holds the line on spending. We're not growing the size of government, adding more employees. And it includes healthy reserve funds to protect our top Aaa bond rating.” - Mayor Ron Corbett