The Council Bluffs City Council will vote Monday night on the Fiscal Year 2022 budget.
The proposed budget includes $157,522,989 in expenditures and $144,081,027 in revenue. The tax levy will remain at $18.26, though council members and Mayor Matt Walsh said they're hopeful federal money from the COVID-19 stimulus bill, still making its way through Congress, would allow the council to reduce that number in the near future.
The levy has been at $18.26 since FY19, when it was raised to cover voter-approved bonding for the new Council Bluffs Police Department headquarters. The levy was $17.9072 in FY18 and $17.75 in the preceding years.
The tax levy includes money for the city’s general fund, transit, civic center, airport, liability and insurance, emergency services, employee benefits and debt service.
With the state's property tax rollback, the levy is assessed at 55% of a home's taxable valuation. Residents with a home valued at $100,000 would pay $1,004 for the year in city taxes. That does not include school and county taxes.
"We're hoping to get more from the new stimulus. If we do, we hope can reduce the levy and deals with revenue losses," Walsh said.
The American Rescue Plan stimulus bill in Congress, as it currently stands, would bring $24,615,234 to the City of Council Bluffs. There will be separate allotments for school districts.
The money can be used to cover costs related to the COVID-19 pandemic, replace revenue lost based on revenue projections from Jan. 27, 2020 as a result of the pandemic and in general address negative economic impacts.
Things are still in flux, with more clarity expected next week. But the federal funds would likely help the budget deficit and city elected officials hope to use it to reduce the tax levy. Walsh said, "we’re watching what’s happening in Washington" and waiting on additional clarity of how those funds can be used.
The amount and language of the bill could change before its finalized by Congress.
The House version would also bring $18,076,730 to Pottawattamie County, along with additional allotments for other cities in the county.
"The levy isn’t going to increase. But if people’s valuations increase, they will see an increase in city taxes," Walsh said. "And we know these are tough times for some residents, so we’re going to do everything we can to mitigate that. If the city gets money we’ll react quickly and try to readjust the levy."
The city has to have its budget certified by March 31. After that date a levy raise is prohibited, but the council can lower it.
Councilmen Chad Hannan and Roger Sandau echoed the mayor, noting they're hopeful they'll be able to lower the tax impact after receiving the federal dollars. Both councilors, along with Councilman Joe Disalvo, told the Nonpareil they plan to vote to approved the proposed budget.
"We don’t know what the (final) restrictions will be on it, or can it be used on anything. Once we get that it’ll make a difference on the budget. We may have to make an adjustment," Councilwoman Melissa Head said. "It would be an adjustment that would be favorable to the taxpayers."
A message to Councilman Mike Wolf wasn't immediately returned on Friday.
Walsh said additional budget adjustments would come as federal grants are awarded. The FY21 budget included $15,680,500 in such grants -- which included $10 million for levee repairs -- with just $5,746,320 budgeted for FY22.
"We’ll get stuff throughout the year," Walsh said.
The budget includes a $1,106,000 million decrease in gaming and hotel/motel tax revenue. Gaming revenue is projected at $2,024,000 million, compared to $2,730,000 in the current budget, while hotel/motel for FY22 is projected at 2,400,000, compared to $2,800,000.
Walsh said that revenue has decreased in back-to-back years because of the pandemic and Missouri River floods of 2019. He noted with traffic diverted, fewer people passed through the city that year.
"In a typical year, it wouldn’t be unusual coming from the south to plan a stop in Council Bluffs, depending on where they’re going. But because of the flood, they were pushed toward Des Moines," he said. "Our local hospitality businesses, and it also affects food and beverage, received a two-year double whammy of the flood and COVID."
The pandemic hurt the gaming industry as well, with the city looking to see how it recovers. Walsh noted some people that might otherwise have not returned to the casinos because of the pandemic.
Sports betting has brought in record money, though.
The World-Herald reported earlier this week that in September, Iowa sportsbooks busted their pre-pandemic record with a handle of $72 million. They’ve broken records each month since, reaching $104 million in December and $149 million in January.
"We’re being conservative. We’d be happy if we’re surprised (and it’s higher)," Walsh said of gaming tax revenue. "But we’d rather err on the side of caution."
The budget includes salary and wage increases for city employees of 2%, with a decrease in expenditures because a human resources position is currently vacant.
Group insurance increased by 12% in part because of the city's approaching to budgeting for health insurance. Walsh said in year's past the city would compute an average cost of health insurance and assign it to various departments based on staffing numbers.
This year the city defined the actual costs, taking into accounts department demographics. Walsh noted, for example, fire and police department personnel have higher rates of employees with children.
"Their overall insurance cost is higher because they're on a family plan," he said, noting other departments might have a demographic of employees who no longer have dependents on their insurance.
That health insurance budgeting adjustment, along with a pension cost increase of 7.5%, led to a $2,373,214 increase in public safety expenditures from FY21. The proposed budget includes $39,745,500 in public safety spending.
Walsh said Iowa law requires the city to participate in the Municipal Fire and Police Retirement System of Iowa, which dictated the increase.
The City Council will hold a public hearing ahead of voting on the budget. The meeting will start at 7 p.m. and can be watched at bit.ly/3l0yjGF.
Read the budget proposal at NonpareilOnline.com.
"I think city staff did a great job of stretching the dollars and keeping things as reasonable as they could, with the COVID impacts," Head said.