Few things affect your life more than government.

City government is responsible for public safety (police and fire services), public works (building and repair of roads and other infrastructure), utilities (water treatment, electrical service, sewer and wastewater) and other management functions, such as planning and economic development.

The City Council of Webster City routinely approves the spending of hundreds of thousands of dollars each month.

Where does the money come from?

At its February 3 meeting, the Council reviewed the audit of the Annual Financial Report of the City of Webster City. The auditor from Williams & Company spent less than five minutes presenting “a few highlights of the report” to Council.

Here, we are duly “following the money.”

In Webster City, the city manager must propose a budget to the City Council before March 1 each year. The Council then holds a public hearing and adopts a final budget no later than April 30. The budget includes a five-year operating forecast, five-year capital improvements plan, schedule of expected yearly equipment replacements, and long-term debt service requirements, among other items.

The financial report referred to in this article is for the 2023-2024 fiscal year, which ran from July 1, 2023, through June 30, 2024. During that time, the city listed eight “new and major” developments:

— Construction of Reisner Substation, which will continue to be constructed in 2025;

— Opening of Tic Tac Dough cookie factory on West James Street;

— An addition to 825 Beach Street, valued at $200,000;

— An addition at 1611 Second Street — WC Custom Meats — valued at $200,000;

— An addition at 1941/1951 James Street — Pagel’s Window, Door & Siding — valued at $100,000;

— New Kwik Star convenience store valued at $2.5 million;

— New splash pad at East Twin Park;

— Four new residences — 913, 917, 1001 and 1005 Lewis Drive — total value $1,056,770.

It also lists the following 11 capital improvement projects. In Iowa, a capital improvement project is one costing more than $250,000.

— New Reisner Substation — $7 million;

— Continued undergrounding of electrical power lines — $2.8 million;

— Reconstruction of 60kV (electrical supply) line — $1.6 million;

— Upgraded equipment at water treatment plant — $5 million;

— Fair Meadow Drive reconstruction — $2.1 million;

— Installation of new water and electric meters — $3.9 million;

— Sanitary sewer rehabilitation — $610,000;

— City Hall HVAC replacement — $645,000;

— Splash pad — $453,000;

— Wastewater treatment plant assessment and design — $500,000;

— Street improvements — $1.2 million.

Management Discussion & Analysis

In this section of the report, the city manager and finance director analyze financial results. Three items were identified as financial highlights:

— $9,960,487 was spent on new construction in Webster City.

— The 2021 Second Street and Lincoln Drive reconstruction projects were completed.

— The city sold $5.135 million in water revenue bonds and $8.41 million in electric revenue bonds.

The work of city government breaks down into two categories: government activities and business-type activities.

Government activities include public safety, public works, health and social services, culture and recreation, economic development, and administration. Business-type activities include those for which the city charges a fee to users, including the electric, water and sewer utilities.

Finances of the Webster City Airport Authority and Fred Fuller Trust are not covered in the report; both are reported separately.

At the end of the fiscal year, the city government’s net position increased by $8.067 million, including $5.835 million in government activities, and $2.232 million in business-type activities.

Revenues

The city’s main sources of income are property taxes, fees for services, and grants and contributions. They largely pay for governmental activities.

In fiscal year 2023-2024, this came to $5.409 million in property taxes; $1,115 million in other taxes; $1.220 million from operating grants and contributions; and $1.440 million from capital grants and contributions.

City management plans for “revenues to exceed expenses” each fiscal year.

In 2023-24, this goal was met for the water and sewer utilities. The report notes the “electric utility is the main function for the City of Webster City’s business-type activities, making up 68% of total charges for services.” In other words, the electric utility is the city’s biggest money-maker of its business-type activities, and has been for decades.

Expenses

The report lists the following expenses:

— $2.316 million was spent for public works (utilities and the street department);

— $4.581 million was spent for public safety (police and fire protection);

— $1.569 million was paid in interest to service the city’s debts;

— $27,629 went to health and social services;

— $1.628 million went for culture and recreation (parks, Fuller Hall, cemetery, Kendall Young Library);

— $733,449 was spent for economic development;

— $594,468 was spent for general government;

— $2.105 million was spent on capital projects.

Long-term debt

At the end of the fiscal year, the City of Webster City’s total bonded debt was $42,026,293, or roughly $42 million. Of that, $10,858,600 was backed “by the full faith and credit of government.” This phrase implies, very simply, that the government can be relied on to pay its debts. The rest of the city’s bonded debt is secured by estimated annual revenues from specific sources.

During the fiscal year, the city’s long-term liabilities increased by $11,927,157, or roughly $11.9 million. This statement is from the financial report:

“State statutes limit the amount of general obligation debt, including tax-increment financing. A

Government entity may issue up to 5% of its total assessed valuation. The current debt limit for

the City of Webster City is approximately $22,433,605, with general obligation debt being

$10,565,000, the City of Webster City is at 47% of the debt limit.”

Economic factors

The report states “the city currently faces pressure on maintaining population based on the age of residents, but economic and housing efforts are underway to ensure population stabilization and growth.”

The city’s unemployment rate of 3.1% is identical to that of the State of Iowa at large, the 12th lowest among all states. A low unemployment rate is generally desirable, but Iowa’s is caused, in part, by slow population growth. This is nothing new. From 1900-2023, Iowa’s population increased every year, but slower than the national average. This trend is pronounced in rural Iowa.