Budget Highlights $ 87.1 million

1. Fiscal Year 2014/15 Budget Highlights $ 87.1 million

2. Very pleased to report: Balanced Budget For FY 14/15

3. FY 2014/15 Budget in Brief: • Maintains the levy rate at $12.55 • Funds tentative agreements with all bargaining units • Within Mayor & Council’s guidelines • Reduces reliance on Gaming Revenue to supplement operating budgets. • Increases funding for one-time capital projects. • Increases available fund balance over the next 5 years. • Increases available fund balance in Sales Tax over the next 5 years • Provides funding for additional full-time positions • Funds an aggressive capital improvement program

4. FY 2014/15 Budget “Stays the course” and “follows the financial plan” we established several years ago and continues our history of: • Conservative spending • Maintaining healthy cash reserves • Strong fiscal planning and adherence to fiscal policies We continue to realize: • Stable revenue streams • Significant levy growth available under $8.10 and ability to implement benefit levies.

5. In an effort to continue offering Premier Services to our Citizens, we seek balance in Three Key Areas: First Key Area: We continue to recognize the need for human resources and operating budgets to grow as the city grows • For the first time in several years, we are recommending additional full-time positions for an Administrative Assistant in HR/Legal and Equipment Operators in Storm Water and Palmer Hills • We will continue to thoroughly review vacant positions in an effort to downsize, through restructuring and realignment of duties where possible. • Operating budgets reflect only marginal increases • Under utilized and/or outdated programs and services continue to be reviewed for future funding

6. Seeking Balance in Three Key Areas: Second Key Area: We continue to fund an aggressive CIP program to maintain/upgrade our existing infrastructure and support our growing community with quality amenities. • FY 14/15 funds $15.4 million of capital projects and maintains the debt levy at $5.00 per $1,000 of taxable value • As a growing community we have chosen to have a higher debt levy rate and corresponding debt margin ratio than many comparable cities. • The 5-year plan does however, decrease our debt margin ratio by 8% to just under 70% by the end of FY 18/19, while still allocating significant future tax dollars to support projects for our growing community. • We recognize the ongoing flexibility available to the City in reducing the debt levy and corresponding CIP projects if needed to balance future operating budgets.

7. Seeking Balance in Three Key Areas: Third Key Area: We remain committed to making the difficult decision of increasing revenues through taxes and user fees “incrementally”, if needed, to balance our budget annually as costs increase. • We do not endorse deferring or holding off on raising fees and taxes only to later “spike” the rates to balance the budget • This year we are recommending maintaining the levy rate at $12.55. However, the impact will be: • 2.87% reduction to existing commercial property • Offset by a 2.68% increase on existing residential property (Direct result of the NEW 5% rollback on commercial property) • The budget as proposed, also reflects marginal, “planned” increases in user fees for Garbage/Recycling, Storm Water, Sewer, LFC and Palmer Hills. • IMPACT: The City’s overall cost of services including property taxes, sewer and storm water fees and solid waste fees remains the 3rd lowest among our sample of 30 Iowa cities with populations of 10,000 or more.

10. Budget Highlights - FY 2014/15 Budget: 1) Maintain the City’s Levy Rate at $12.55 • Bettendorf is one of a few Iowa cities with a General Fund levy below $8.10. This allows for future growth capacity of 48%, equating to nearly $5 million of potential property taxes. • In addition, the City has the ability to levy taxes for: • IPERS & FICA ($1.54 million) • Emergency levy of $0.27 if needed. ($504,000)

11. FY 14/15 Property Tax Impact ofMaintaining the $12.55 Levy of City Taxes: • Direct result of the NEW 5% rollback on commercial property

12. Property Tax Reform Shifts Tax Burden to Residential • Anticipate the trend of shifting tax burden to residential property owners to continue over the next several years.

13. Taxes Current Year How We Compare to Other Cities? Our sample of 30 Iowa Cities with populations > 10,000 in order by Total Levy Rate

14. FY 2014/15 Budget Highlights 2) Provides funding for existing City services and several new programs:

15. 3) Union Contracts Funds first year of two year contracts with all of our bargaining units

16. 4) Personnel Requests – 4 FTEs

17. FY 2014/15 Budget Highlights: 5) Health Insurance –

18. FY 2014/15 Budget Highlights: 6) Liability Insurance – Total Liability Insurance up $70,467 or 10.37%. • Workers Compensation Fees up: $46,121 or 11.42% • Mod rate reduced to .96 due to the Bettendorf losses being lower than statewide average losses. • Striving to manage our Work Comp insurance costs although….. • Continue to have increased wages • A potential 10% State of Iowa published rate increase on various job classifications is expected. • Mod rate calculation under state review

19. FY 2014/15 Budget Highlights:7) Projects Major Revenues to remain Stable

20. Building Permit History

21. FY 2014/15 Budget Highlights: 8) Gaming Revenue - $1.5 million We are recommending a 5-year plan that reduces the annual reliance on Gaming Revenue to supplement operating budgets and instead, increases funds available for one-time capital projects. • Reduced allocation of Gaming to supplement operating budgets: • Reduce transfer to General Fund by $100,000 by utilizing property taxes generated from new growth (instead of reducing the levy rate by $0.05) • Reduce transfers to enterprise funds by $133,754 by increasing user fees • Increased allocation of Gaming to one-time capital projects: • Parks Facilities Study: $125,000 (LFC, Splash Landing, Community Center) • Increasing Gaming fund balance for future capital projects Projected ending fund balance at June 30, 2019: $1,000,000

22. FY 2014/15 Budget Highlights: 9) Annual Sales Tax Revenue - $2 million We are recommending a 5-year plan that increases sales tax fund balance to $2.2 million at June 30, 2019

23. FY 2014/15 Budget Highlights:10) Major Fund Balances remain stable

24. 11) Community Improvement Program 2014/15 Construction Season: $15.4 million

25. Community Improvement Program 2014/15 Construction Season: $15.4 million

26. Community Improvement Program continued • Enterprise Fund Projects FY 14/15: $250,000

27. Capital Equipment Requests • FY 14/15 Budget funds $1,341,659 of new/replacement vehicles • Funds $197,100 of new/replacement electronic equipment • Funds $138,801 of new/replacement capital equipment • Funds $265,000 in replacements at QC Waterfront

28. FY 2014/15 Budget Highlights:12) User Fees - Continue to adjust user fees, when appropriate, to offset increases in the cost of programs.

29. Proposed Solid Waste Fee Increase 3% • Continue 3% increases each April 1 to balance revenues and expenditures – BREAKEVEN • With the implementation of single stream recycling carts and trucks, 4% increases may be needed beginning 4/1/16.

30. Fee increases are primarily project driven. See CIP for details.

31. 5-year Storm Water Plan: $3.96 million (assumes hiring 2 FTEs):

32. Fee increases are primarily project driven. See CIP for details.

33. 5-year Sewer Utility Plan: $7.5 million

34. Annual Impact of Property Taxes & Fee Changes in FY 14/15 Budget:

48. We are pleased to recommend a balanced budget for the Council to review…Saturday’s budget work session:8:00am to 4:00 pm Questions?