Fiscal Year 2019 Budget

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residential properties. If property values grew by more than 4 percent, the taxable value was rolled back to comply with the assessment limitation system. (Iowa League of Cities, Budget Special Report FY 2018-19) Commercial and industrial property were given their own rollback, which began at 95 percent for valuations established during the 2013 assessment year and 90 percent for the 2014 assessment year and thereafter. The rollback percentage for these properties will remain fixed at 90 percent regardless of how fast or slow the valuations grow. (Iowa League of Cities, Budget Special Report FY 2018-19) The legislature created a standing appropriation, beginning in FY 2015, to reimburse local governments for the property tax reductions resulting from the new rollback for commercial and industrial property. This “Backfill” was funded at 100 percent by the legislature for fiscal years 2015-2018 and cities receive these funds in a similar manner as property tax revenue. Future backfill appropriations are capped at the FY 2017 level. (Iowa League of Cities, Budget Special Report FY 2018-19) The following chart displays the history of the rollback in Iowa since its inception in 1978.

History of the Rollback

120.00%

100.00%

80.00%

60.00%

40.00%

20.00%

0.00%

Agricultural

Residential

Commercial

Industrial

Multi-Residential

As the state faces budgetary uncertainty, there is concern the state will not make good on its promise to backfill the lost property tax revenue. These funds are utilized by the city to maintain vital city services and programs. Without the continuation of these funds, the city may be faced with the decision to increase the levy rate, cut services or both. Staff will continue to monitor actions being taken by the legislature with regards to funding of the backfill. The budget, as presented, maintains the current staffing levels within each department. City staff believes these levels represent the best balance between the need to provide the best service to the residents of Spencer and the Council’s desire to maintain an affordable tax bill As a reminder, staff does not have a crystal ball to fully determine what will be needed in all cases for all situations. Snowfall greater than average is a perfect example of this. If greater than average snowfall is experienced, or the timing of events requires greater amount of overtime, the snow removal budget will be impacted. It should also be noted, that money allocated for other routine street maintenance will be