By Attorney Eric Boehlert
Though HF718 extended the budget certification date to April 30 for cities, counties, and school districts, Iowa Code chapter 76 (relating to the imposition of debt service tax levies) has not been amended. This means for cities and counties, the authorizing resolution for a General Obligation issue (imposing the tax levies) must be filed with the county before April 15 (read as April 14 or prior) to be effective for the fiscal year beginning July 1 of the same year. If filed April 15 or after, the taxes will not be imposed until the next successive fiscal year. If your community intends to include a “pre-levy” in the FY25 budget for GO debt to be issued after the budget certification deadline, you must have established your financing authority (called/held hearing(s) or election, as required), adopted a pre-levy resolution, and filed the same with the appropriate county auditors by April 14, 2024. Please note the staggered April 14 (levy resolution filing) and April 30 (budget filing) deadlines.
In addition, new Iowa Code section 24.2A (created by Division X of HF718) requires the County Auditor to mail to all taxpayers by March 20 notice of proposed tax levies and revenues. The Department of Management (DOM) is requesting public bodies upload all anticipated property tax estimates to the DOM software by March 5 (though the statute requires submission by March 15). Early submission will permit timely preparation of the March 20 mailer by the County Auditor. The purpose of this mailer is to alert taxpayers of the proposed aggregate property tax amount and of the issuer’s public hearing on said proposed taxes. The amounts reflected in this mailer will serve as the “cap” for the issuer on property taxes for the coming fiscal year.
Practice pointer: If you have adopted your pre-levy resolution prior to the March 5/March 15 submission deadline for filing the report with the DOM, you will know what additional debt service levy amount will need to be included in your pending budget for the bonds anticipated to be issued after the budget deadline. If you HAVE NOT yet adopted a pre-levy resolution by March 5/March 15, it is strongly advised you include an estimate of the pre-levy amount in your DOM report for purposes of the March 20 mailer. In such case, you should still have time to complete the pre-levy resolution adoption and filing by the April 14 deadline. If you do not include an estimate of the anticipated pre-levy amount in your report filed with the DOM, and therefore the notice that is distributed to the taxpayers, you may still file the pre-levy resolution by the April 14 deadline. However, you may end up needing to reduce property taxes from another levy because after the hearing, the proposed property tax amount included in the budget may decrease, but not increase from the “cap” established in your prior hearing on the proposed aggregate property tax amount.
The DOM has created a budget process calendar: Example Budget Process Calendar - City.pdf (iowa.gov)
Please contact your bond counsel on necessary proceedings to complete your timely pre-levy approval and filing (and coordinate with your municipal advisor on calculating appropriate pre-levy estimates/amounts).
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