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City plans for expansion amidst mild deficit

NORTH LIBERTY– As the City of North Liberty expands services and hires new employees, the upcoming fiscal year appears to hold steady. The city budget will climb ever so slightly from last year’s approximately $48 million, to a total of $51,552,360. North Liberty’s taxable valuation will grow by about 6.74 percent from FY18’s 8.68 percent, every spending category in the general budget will see an increase and for the eighth consecutive year, the tax rate will remain $11.03, thanks in large part to a steady growth in property values.
But it was no easy feat.
“In total, the initial general fund budget requests were $1.1 million over projected revenues,” City Administrator Ryan Heiar said in a Jan. 12 memo. “Generally, after a review of the initial requests, there is always a deficit; however, this year was the largest I’ve seen in my tenure in North Liberty.”
The reasons behind the large initial deficit, which the city was able to shrink significantly, include more services being required, such as additional staffing for police and fire departments, aging facilities and equipment at the recreation and aquatic center and a slight decrease in the residential rollback. The property tax reform approved a few years ago is also starting to have more of a negative impact on revenues.
Perhaps in anticipation of the contention, Brian Wayson, a former city council member of eight years, addressed the council during Feb. 27 public hearing on the FY19 budget. He assured the staff that a $143,000 deficit is “fine,” describing the growing general reserve, which at 35 percent far exceeds the city’s goal of 25 percent.
“I still am not in favor of proceeding with a deficit,” Councilor Jim Sayre remarked. “I still think that we should be setting aside for some of these projects versus instantly going to raising taxes or financing, so I won’t be in support of it tonight.”
Councilor Annie Pollock concurred, citing a lack of allocation for the top five priorities.
“I think we should look at reallocating funds to align with the priorities that all six of us up here said were the priorities,” she said. “So with that, I’m not currently in support of what’s currently on here.”
“Where does the money come from short of raising taxes?,” Councilor Sarah Madsen questioned Pollock. “I’m trusting the true experts on the budget here. They’ve lived it.”
Sayre concluded based on the ambitious budget that the practice of goal setting had been rendered irrelevant.
“I’d push back on that,” Heiar responded. “There’s four goals that all tied for number one, and I think in this budget year, we could get two of those done,” he continued, citing a two-budget cycle plan.
Views remained steady among councilors on March 27 when the FY19 budget passed, 3-2.
“I think this year’s budget was a little bit harder because we did have some new services coming on, new employees coming on and we’re budgeting for less of that backfill revenue from the state, so that’s going to continue to impact us,” Heiar said following the budget’s approval.
To play it safe, the city only budgeted for 50 percent of the backfill. Heiar said if the city gets full funding in FY19, most of that deficit will vanish thanks to backfill.
“When the property tax reform went into play a few years ago, and the state provided they were going to continue to fund that backfill, the cities really rely on that. We know that ultimately the state’s going to pull the rug out from under us, so we’re starting to plan for that now,” he added.
City growth remains ambitious for FY19. Approximately $5 million will be set aside for a new police station, the first phase of an administrative campus project expected to start construction in late 2018. Reconstruction of East Penn Street and West Forevergreen Road make up some of the major roadway infrastructure to begin in FY19, at $2 million and $2.5 million, respectively. The city also plans to upgrade and expand various city parks as well as identify space for a dog park with grant funding a possibility to offset costs.
Heiar also cited the need for maintenance and repairs to the 21-year-old community center, as well as to staff a new police officer, library employees and more part-time positions at the fire department to keep it attended at all times.
Moving into the next fiscal year, Heiar summarized, “We’re as aggressive as we have been.”