New construction fuels surge in Cedar Rapids property values, stabilizing 2018 budget

CEDAR RAPIDS - New construction is fueling a surge in property value in Cedar Rapids, which has stabilized what is shaping up as a flat city budget in the year ahead, according to a draft of the fiscal 2018 budget released Thursday.

Property values climbed $386.6 million, or 3.88 percent, in the past year, thanks to $150 million worth of new construction, according to city figures. It brings the total assessed property value in Cedar Rapids to more than $10.3 billion.

'The growth in new construction happened organically because we have become more competitive,” Cedar Rapids Mayor Ron Corbett said during a Thursday budget workshop, referring to the city's commitment to hold the property tax levy flat at $15.22 per $1,000 for nine years running.

A boost in property tax revenue, cuts to the city's golf department and a drop in debt payments will help offset losses in traffic camera revenue, state property tax rollbacks and increases in personnel costs. The City Council will be asked to approve the budget in March, and it takes effect July 1.

Only about two-thirds of property value is taxed, or $6.38 billion in the city's case, a 3.6 percent increase from the previous year. By comparison, the taxable property value increased by half of 1 percent the previous year.

'We are maintaining our tax rate, we are balancing our budget, we are controlling our expenditures, and even with the loss of $3 million, we are still continuing to move forward without a request for any impact to our tax rate,” Cedar Rapids City Manager Jeff Pomeranz said.

The city has removed $3 million in anticipated revenue from traffic cameras due to threats of state lawmakers banning the cameras during this legislative session.

'It is certainly our hope the traffic cameras will remain,” Pomeranz said. 'Our police chief, our police department is doing a phenomenal job to keep the traffic cameras in Cedar Rapids because we believe those cameras are critical to the safety of the public and our staff, our firefighters, our medics and to our police department personnel.”

The city's ability to take out the camera revenue better positions the case the cameras aren't about dollars but rather about safety, he said.

The general fund budget, which comes mainly from property taxes, is forecast to grow by less than 1 percent - from $119.5 million to $120.1 million.

Overall spending, when considering all funding streams, is down 2 percent, or $9.3 million, from $525.4 million to $516 million.

The utility rate made up of a suite of services - water, water pollution control/sanitary sewer, stormwater, solid waste, recycling, and yard waste - is proposed to increase by 5.14 percent, which is an annual increase of $53.88 for a typical residential customer. The increase, which will help pay for improvements to the systems, is similar to the 5.1 percent increase the previous year.

City Council members generally spoke favorably about the budget outlook on Thursday, calling the city well positioned financially, with reserves of $35.7 million, or 29.6 percent of the general fund budget, and declining debt payments.

Some flagged specific aspects of concern, including council member Justin Shields, who said he has 'reservations” about plans to close the Jones Golf Course as part of a plan to balance the city's golf department budget. That matter will get further discussion when city staff present a slate of golf department recommendations, possibly at a March meeting.

Council member Susie Weinacht questioned losses for quality-of-life amenities, including a $123,000 deficit, with plans for $100,000 in improvements, at the Cedar Rapids Ice Arena and a $55,000 deficit for the McGrath Amphitheatre.

Casey Drew, the city finance director, said McGrath was always projected to lose money, given expenses such as storage units and operational costs of the venue that doubles as part of a flood protection system.

'It will always be a struggle to break even,” he said. 'Everything has to break right.”

Other highlights of the budget include:

-- Reduction of six full time positions, which were already vacant.

-- $47,000 for public safety overtime due to collective bargaining adjustments

-- $988,000 operating deficit for the DoubleTree Hotel, convention center and U.S. Cellular Center, $807,000 of which is due to a set-aside program created to pay for future facility maintenance.

-- Non-union public employees receiving a 2 percent raise; some also receive a 2.5 percent step increase based on years of service.

-- $750,000 for a fire pumper truck

-- $250,000 for Dwight Hughes Park, new on the west side of the city.

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