1. City of Cedar Falls
Budget Shortfall
Taskforce
Cedar Falls Library Board
May 1, 2013

2. Financial Position
O Financial solvent
O Well positioned
O Low tax rate
O Low total employment
O Competitive in terms of economic
development
O Desire to plan for the future to maintain
our financial position

3. The Political Dilemma
“Is there the political will to make
organizational and service changes
without an imminent crisis at hand?”

4. Resolution 18,475
O Develop a financial plan that matches
operating expenses with operating
revenues
O 18-24 month study period
O Plan is to be developed without
boundaries of past practices and notions
that maintain the status quo
O Everything is on the table for
consideration
O During the study period interim actions or
changes will be taken if timely

5. Schedule
O February 7, 2013: First Taskforce meeting
O February 27, 2013: Over 260 suggestions
collected
O April 2013: Employee meetings
O May 2013: Employee input collected
O March 2013 – February 2014: Subcommittee
analysis of suggestions
O February – December 2014: Alternative
solution costing & legal analysis
O January – June 2015: Final report preparation
O July 2015 (FY16): Implementation of solutions

6. General Fund
Operating Expenses vs. New Growth

7. Funding Tools Remaining
O Street lighting - $290,000 of street lighting costs are being
budgeted out of the Street Construction Fund and $115,000
of costs are still being budgeted out of the General Fund for
FY14.
O Debt Service - Debt Service out of General Fund in FY14 =
$1.6 million. If a portion of that $1.6 million in debt
service was moved to the debt service levy so that
salary increases would be covered under the $8.10 –
would only take 4 years to use it up. It would also
increase taxes by 2.07% on a residential home each
year to cover that $400,000 increase.

8. Funding Tools Remaining
O Emergency Levy – Allowed under Iowa Code to levy an
additional $.27 if at the $8.10 levy limit. This would
generate an additional $440,000, but would increase taxes
on a residential home by 2.24%.
O TIF release - If a portion of that $2.2 million TIF
increment was released each year to cover salary
increases – would only take 5.5 years to use it up.
O This all assumes the commercial rollback remains the
same.

9. WHERE ARE THE CONSUMERS OF
PROPERTY TAXES?

10. CITY OF CEDAR FALLS
Property Tax Impact
Total Levy
FY14
Department Property Percent Support Cost
Division Tax of Total Per $1,000 Per
or Fund Support Levy Value Resident
ADMIN/LEG/MISC $324,660 1.66% $0.20 $8.27
MAYOR'S OFFICE $121,920 0.62% $0.08 $3.11
ADMINISTRATIVE SERVICES: $1,092,960 5.58% $0.65 $27.84
Administration 194,055 0.99% 0.11 4.94
Financial Services 401,661 2.05% 0.24 10.23
Legal Services 311,849 1.59% 0.19 7.94
Public Records 185,395 0.95% 0.11 4.72
DEVEL. SERVICES: $1,073,774 5.48% $0.63 $27.35
Administration 208,318 1.05% 0.11 5.31
Economic Development 88,494 0.45% 0.04 2.25
Engineering 502,705 2.57% 0.31 12.80
Inspection Services 181,149 0.93% 0.11 4.61
Planning Services 93,108 0.48% 0.06 2.37
HUMAN & LEISURE SERV.: $3,805,719 19.44% $2.35 $96.94
Administration 267,806 1.37% 0.17 6.82
Cultural Services 339,684 1.74% 0.21 8.65
Library Services 1,143,756 5.84% 0.70 29.13
Cemetery Section 128,399 0.66% 0.08 3.27
Golf Section 110,313 0.56% 0.07 2.81
Park Section 1,226,304 6.26% 0.76 31.24
Print Shop Serv. 75,017 0.38% 0.05 1.91
Recreation Serv. 514,440 2.63% 0.31 13.10
FIRE DEPARTMENT * $2,885,089 14.74% $1.78 $73.49
POLICE DEPARTMENT * $4,834,567 24.70% $2.98 $123.14
PUBLIC WORKS: $627,522 3.21% $0.39 $15.98
Public Buildings 627,522 3.21% 0.39 15.98
STREET LIGHTING $102,872 0.53% $0.06 $2.62
TIF PROJECT RESERVE $2,232,510 11.40% $1.38 $56.86
DEBT SERVICE $2,474,350 12.64% $1.52 $63.02
TOTAL $19,575,940 100.00% $12.02 $498.62

11. WHAT IS THE LARGEST BUDGET
EXPENSE OTHER THAN CAPITAL
PROJECTS?

12. PERSONNEL COSTS
O Total Budget
O $22.8 million personnel costs
O 36.2 million total general fund minus capital
expenses
O 63%
O General Fund
O $15.3 million personnel costs
O 21.7 million total general fund minus capital
expenses
O 70%

13. Property Tax & Salary Increases
12 Year History
Residential Commercial Weighted
Increase Increase Salary Inc.
FY02 2.43% 1.10% 4.30%
FY03 4.90% -5.35% 3.75%
FY04 2.74% 5.65% 3.90%
FY05 2.24% 13.38% 3.75%
FY06 1.89% 3.71% 4.00%
FY07 -5.54% -2.33% 4.25%
FY08 -2.59% -0.82% 4.99%
FY09 1.02% 6.07% 4.98%
FY10 1.40% -1.69% 4.50%
FY11 2.66% -0.23% 3.40%
FY12 2.42% -1.00% 3.20%
FY13 1.89% 0.47% 3.57%
Average 1.29% 1.58% 4.05%

14. Salary & Benefit Costs
O A budgeted 2% increase, costs the General Fund
approximately $400,000. If the City relied on new growth
to cover the increased costs in the $8.10 levy, the City
would need $49 million in new growth “taxable
valuation”.
O FY14 - $24 million loss in new growth taxable valuation
O FY13 - $35 million new growth in taxable valuation (FY13
had the highest new growth in past 10 years)
O FY12 - $23 million new growth in taxable valuation

15. Time & Dollars Left
O $115,000 Street Lighting
O $1,600,000 Debt Service
O $400,000 Emergency Levy
O $2,115,000 Total
O $400,000 – 2% annual salary increase
O 5.28 years

16. 411 Property Tax Support
Fiscal Year % of Coverage Property Tax
1997 17.00% $ -0-
1998 17.00% $ 142,930
1999 17.00% $ 135,010
2000 17.00% $ 186,980
2001 17.00% $ 170,130
2002 17.00% $ 167,420
2003 17.00% $ 188,140
2004 20.48% $ 333,660
2005 24.92% $ 525,830
2006 28.21% $ 664,320
2007 27.75% $ 761,040
2008 25.48% $ 704,820
2009 18.75% $ 467,270
2010 17.00% $ 413,880
2011 19.90 % $ 566,920
2012 24.76 % $ 926,310
2013 26.12 % $1,047,080
2014 30.12 % $1,362,200

17. 411 Pension Cost Increase
O 2010 – 17% ($413,880)
O 2014 – 30.12% ($1,362,300)
O 4-year growth $948,420
O 2015 – 32.26%
O 2016 – 30.73%

18. IPERS & 411 Increases
O IPERS
O FY14 – 8.67% raised to 8.93%
($18,470 increase in employer
expense)
O 411 Pension
O FY14 – 26.12% raised to 30.12%
($185,070 increase in employer
expense)

19. WHY NOT JUST RAISE
TAXES?
O Raising taxes to cover costs
O Works until the tools are gone
O Raising taxes damages economic
development opportunities
O Is CF special enough to attract business
without a low tax rate?
O Yes in the Metro (Waterloo ($12.20 vs. $18.20))
O No in the State (Ames $10.72, Ia. City
$17.26, WDM $12.05, Dub. $10.78)
O Not really a good long term solution

20. Multi-year Budget Projection
Model Assumptions
O 2% annual salary increase with associated pay plan
step increases
O Healthcare & pension increases fully levied in T&A
fund (base tax increase)
O Expend all remaining financial shortfall tools (debt
service & emergency levy tools create a base tax
increase)
O Economic development remains a priority - TIF
increment retained as an economic development tool
O Other revenues & expenditures remain stable or
constant
O One time use of cash from various trust, reserve or
escrow accounts is dismissed from plan
consideration as this is not viewed as a long-term
solution to an annual budget shortfall

21. General Fund - Budget
10 Year Projection
Assumption: No Growth in Revenues
FY14 FY15 FY16 FY17 FY18 FY19 FY20
Rev - Exp Difference -$ (558,083)$ (1,132,756)$ (1,724,563)$ (2,334,068)$ (2,961,855)$ (3,608,530)$
Use of Financial Tools:
Street Lighting 290,000$ 290,000$ 290,000$ 290,000$ 290,000$ 290,000$
Debt Service 268,083$ 842,756$ 1,434,563$ 1,519,000$ 1,519,000$ 1,519,000$
Emergency Levy $.27 -$ -$ -$ 438,173$ 438,173$ 438,173$
Total Use of Tools -$ 558,083$ 1,132,756$ 1,724,563$ 2,247,173$ 2,247,173$ 2,247,173$
Balanced Budget -$ -$ -$ -$ (86,895)$ (714,682)$ (1,361,357)$
Property Tax Rate 12.02$ 12.19$ 12.54$ 12.90$ 13.23$ 13.23$ 13.23$
Increase on Residential 2.53% 3.94% 6.96% 10.07% 12.82% 12.82% 12.82%

22. General Fund - Budget
10 Year Projection
Assumption: AvgNew Growth of $14 M
FY14 FY15 FY16 FY17 FY18 FY19 FY20
Rev - Exp Difference -$ (400,096)$ (816,782)$ (1,250,602)$ (1,702,119)$ (2,171,919)$ (2,660,607)$
Use of Financial Tools:
Street Lighting 290,000$ 290,000$ 290,000$ 290,000$ 290,000$ 290,000$
Debt Service 110,096$ 526,782$ 960,602$ 973,946$ 1,443,746$ 1,519,000$
Emergency Levy $.27 -$ -$ -$ 438,173$ 438,173$ 438,173$
Total Use of Tools -$ 400,096$ 816,782$ 1,250,602$ 1,702,119$ 2,171,919$ 2,247,173$
Balanced Budget -$ -$ -$ -$ -$ -$ (413,435)$
Property Tax Rate 12.02$ 12.09$ 12.34$ 12.61$ 12.89$ 13.18$ 13.23$
Increase on Residential 2.53% 3.11% 5.30% 7.58% 9.96% 12.43% 12.82%

23. General Fund - Budget
10 Year Projection
Assumption: AvgNew Growth of $14 M Less Loss of 20% CommercialValue by FY18
FY14 FY15 FY16 FY17 FY18 FY19 FY20
Rev - Exp Difference -$ (708,009)$ (1,432,608)$ (2,174,340)$ (2,933,770)$ (3,403,570)$ (3,892,258)$
Use of Financial Tools:
Street Lighting 290,000$ 290,000$ 290,000$ 290,000$ 290,000$ 290,000$
Debt Service 418,009$ 1,142,608$ 1,446,167$ 1,519,000$ 1,519,000$ 1,519,000$
Emergency Levy $.27 -$ -$ 438,173$ 438,173$ 438,173$ 438,173$
Total Use of Tools -$ 708,009$ 1,432,608$ 2,174,340$ 2,247,173$ 2,247,173$ 2,247,173$
Balanced Budget -$ -$ -$ -$ (686,598)$ (1,156,397)$ (1,645,086)$
Property Tax Rate 12.02$ 12.28$ 12.72$ 13.18$ 13.23$ 13.23$ 13.23$
Increase on Residential 2.53% 4.73% 8.54% 12.44% 12.82% 12.82% 12.82%

24. Taskforce Mission

25. Productivity & Efficiency
O Increase productivity
O Convert non-revenue producing jobs into
jobs supported by revenues other than PT
O Downsize or outsource
O Merger or consolidate
O Eliminate duplicate or redundant services
O No new services

26. Interim Reports & Actions
Prior to Study Completion
O Interim recommendation prior to FY16 will be
forthcoming
O Staffing recommendations
O Take advantage of attrition vs. lay-off or
furloughs “when possible”
O Some lay-offs will occur (FY14 Budget
contemplated some and outsourcing of a
service will require staffing reduction)
O Attrition may open the door for a timely
reorganization
O Legislative solutions
O Revenue enhancements

27. Role of Library Board
O Plan ahead … future budgets will not likely cover
increasing costs of operations as they exist today
O The window of opportunity for changes needs to
occur during the next 3-5 years
O Every attrition has value
O Convention methods of providing library services
need to be reevaluated
O Finding ways to generate more revenue
O Evaluate ways of providing library services at a
lower cost
O Evaluate the positive and negative aspects of
privatization or outsourcing of select services
O Prioritize library services
O Communicate with the general public with regard
to the financial problems and possible solutions

28. Suggestions
O City website: CedarFalls.com
O Richard McAlister
O 268-5117
O Richard.McAlister@CedarFalls.com
O City Hall, 220 Clay Street
Cedar Falls, Iowa 50613

29. QUESTIONS