Iowa City fiscal 2024 budget to see increased expenses for residents

The current proposed budget considers raising nearly all utility rates and keeping the city’s property tax rate the same.


Daniel McGregor-Huyer

The Iowa City Council is seen at a meeting at Iowa City City Hall on August 16, 2022.

Sydney Libert, News Reporter

Nationwide inflation trends are hitting close to home as the Iowa City City Council continues its consideration of a potential increase in expenses for residents.

Under the city’s current proposal of the fiscal 2024 budget, water, wastewater, recycling/refuse, and stormwater utility rates will rise when the 2024 budget goes into effect July 1.

Notably, the city’s wastewater rate will increase by 2 percent, costing residents approximately $2.85 more per month.

The last time Iowa City changed the wastewater utility rate was during the 2009 fiscal budget nearly 14 years ago.

Iowa City wastewater superintendent Tim Wilkey said the raised rates are partly because of increased costs in running the division’s services. Wilkey added that a lot of wastewater equipment is reaching the end of their useful life.

While some of the equipment replacements use money from the division’s reserve funds, the increased rates will help the division invest in new machinery that will make the treatment process more energy efficient.

“There’s been a lot of increasing costs with energy, equipment, [and] chemicals,” Wilkey said. “As one of the larger energy users in the city itself, some of that funding will be used to help offset that cost and still allow us to maintain our reserves.”

The city’s refuse and recycling rate will also cost an extra $2 per month. Unlike the fiscal 2023 budget, the organics utility rate, which accounts for compost and yard waste costs, will not increase.

Jennifer Jordan, Iowa City’s resource management superintendent, said the proposed changes match the quality of the city’s landfill and recycling services.

“[It’s] just the cost of doing business. We offer a premier weekly service that has carts available for all of our customers for three different collection streams – trash, recycling, and yard waste,” Jordan said. “Each of those takes trucks, fuel, and staff to operate, and each of those things go up in cost every day.”

Jordan also pointed out that the cost of the utility for the estimated 16,500 Iowa City households that the collection division serves – just over half of the households in the city – prevents all residents from having to pay additional charges on taxes.

“This covers the entire cost of trash, recycling, and organic services unless people have additional items to pick up,” Jordan said.

Other utility expense differences include a 4 percent increase in water utilities and an added 50 cents monthly for the city’s stormwater rate.

While utility prices may increase this upcoming fiscal year, the budget proposes to keep the city’s property tax rate the same.

For the past decade, the city’s property tax rate has decreased. City of Iowa City Finance Director Nicole Davies said the city cannot continue the trend this year because the amount of property taxes the city collects has begun to decrease.

“This year, our property taxes that we should be collecting are about 2 percent higher than last year,” Davies said. “Our costs are definitely increasing at a much faster rate than 2 percent. There’s just no way that we could continue to lower that property tax rate.”

During the city’s 2024 budget work session meeting on Jan. 7, Assistant City Manager Rachel Kilburg echoed Davies’s sentiments.

“If we don’t see an increase in our tax base in the next year or two – if we stay at the one or two percent growth in tax base – we’re not going to be able to sustain our operations as they are now,” Kilburg said.

The City Council will have a public hearing for the proposed budget and will adopt a resolution for the maximum property tax on Feb. 21. The budget is set to be adopted on March 21.

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