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It’s budget season

NORTH LIBERTY– Much as Black Friday marks the beginning of the frenzied holiday shopping push, November is the season for cities to begin foraging the halls of municipal finance, and take inventory of what’s still on the shelves, what needs to be purchased and how much money there is to pay for it all.
The North Liberty City Council started its FY2013 budget process with a work session Tuesday, Nov. 22.
Johnson County will notify North Liberty of its total property valuations closer to the first of the year; until then, revenue figures from future property taxes are based on estimates.
But potential spending is a little easier to get a handle on at this point. To that end, City Administrator Ryan Heiar asked city department heads to submit their individual department budget proposals by Oct. 31.
Last Tuesday, he also asked all council members to list their top spending priorities for the fiscal year of July 2012 to June 2013.
“Tonight’s exercise will give us more direction on what you folks are expecting to see in the 2013 budget,” said Heiar.
It is a departure from previous budgeting procedures. In the past, Heiar would launch his annual budget presentation based on departmental requests and projects listed in the city’s on-going Capital Improvements Plan. This year, he plans to have department heads attend his first budget presentation to the council in January, so that they may be on hand answer questions on specific budgetary requests.
Before hearing from the council, Heiar updated the group on the city’s current fiscal situation.
The city’s cash position is strong, said Heiar, with an increase in Road Use Tax revenues– from $131,244 last year to $319,592 this year– and a general fund that grew from $1.66 million to $2.02 million, a jump of more than 22 percent.
The city is sitting at 69 percent of its debt capacity, with aggressive repayment plans on its bond obligations.
However, Heiar noted, there are several issues facing the council over the next few fiscal years, including state-level discussions about commercial property taxes, ever-tightening regulations from the Iowa Department of Natural Resources on water and wastewater utilities and the future capacity of those services as North Liberty continues to grow.
“We do continue to see growth, although it has not been what it was the previous two years,” Heiar noted. “But we continue to have requests for more services.”
Finally, Heiar said, the state legislature’s decisions about property tax rollback rates could also affect municipal revenues.
“That will be a biggie this year. We’re seeing residential rollback going up over two percent. Instead of residents having to pay on 48.5 percent of the value of their home, they will pay on 50.75 % of the value their homes. That’s an automatic tax increase for homeowners that is uncontrollable by us,” he said.
After Heiar’s updates, each council member listed his or her main priorities for the upcoming year. Major goals included:
• Keeping a strong cash reserve on hand– a minimum of 25 percent of the city’s total general fund expenditures. Currently, the city has a cash reserve of 27 percent, or $2,028,705.
• Support continued traffic improvements on the city’s main thoroughfares to keep traffic flowing as smoothly as possible, and at the least environmental impact. However, the consensus of the group was to halt additional improvements to Highway 965 for the next fiscal year. The city was granted $1.125 million in federal funding for the project, but that money won’t become available until October 2012, so construction on the project is expected to resume the following spring.
• Developing an economic development policy, including a plan for helping existing businesses, assisting new businesses and addressing the city’s unoccupied commercial spaces.
• Looking at infrastructure projects in the city’s older parts of town; particularly, water and sewer services.
• Continuing to plan and budget for future upgrades to the city’s wastewater treatment facility and the ability to provide water and sewer services. The current wastewater facility was designed for a population of 14,000. The 2010 Census marked North Liberty’s population at 13,374, necessitating consideration of a second phase of expansion.
• Supporting the North Liberty Community Library expansion (the city committed $2 million to the project in 2009).
• Completing the expansion of the Streets Department facility, currently estimated to cost around $2.35 million
• Maintaining the city’s current property tax rate of $11.03 per $1,000 of assessed valuation.
Other objectives expressed by individual council members were: developing park space on the west edge of town; considering efficient options for public transportation (whether with bus routes or para-transit arrangements); continuing to fund salary increases for city staff; and paying for an upgrade to the North Liberty Fire Department garage’s ventilation/exhaust system.
Heiar asked the council for general consensus or direction on their stated objectives, with the intent of refining them in upcoming budget discussions.
The council will hold two more public work sessions on the budget, scheduled for Jan. 17 and Jan. 31, with a third session planned for Feb. 21 if needed. They are expected to hold a public hearing on the budget’s final draft March 13. The final budget must be approved and certified by the Johnson County auditor no later than March 15, 2012.