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University Heights to phase in higher transit payment to Iowa City under three-year deal
Summary
The University Heights City Council approved a three-year agreement with Iowa City to shift to a population-based cost-share for transit service, phasing in a roughly 30% increase over three years to reduce future large adjustments.
The University Heights City Council on May 13 approved a three-year agreement with Iowa City to change how the two cities share the cost of transit service, shifting from a decades-old CPI-based approach to a population-based formula and phasing in about a 30% increase for University Heights over three years.
Council approval means University Heights will raise its annual contribution in three roughly equal steps rather than taking the full increase in one budget year. City Administrator Troy said the change reduces the risk of large, sudden increases in future years because University Heights’ population is not expected to grow as quickly as Iowa City’s.
Troy told the council that the city examined several cost-sharing methodologies used in other regional communities, including Madison, Cedar Falls and Waterloo, and that a population-based formula produced a moderate near-term increase while aligning long-term shares with relative population changes. He said the adjustment will be implemented over three years: about a 10% increase in the coming budget year, another 10% the following year and a final step the year after that.
Under the new formula, Troy said, the city’s contribution will move from roughly $47,000 in the most recent year to almost $53,000 next fiscal year, then just under $59,000 the next year, and about $64,500 in fiscal year 2028. He said the three-year agreement replaces the prior one-year renewals and that after the phase-in the city expects to return to annual agreements using the new formula.
Councilmembers asked procedural questions about approvals by both councils; Troy said University Heights would approve the agreement and then send it to Iowa City for its council to consider. He also said a separate agreement involving paratransit (the "seats" agreement) remains to be scheduled for a future meeting.
A motion to adopt the agreement passed on a roll-call vote. The council did not identify changes to service levels in the transcript and did not attach any conditions to the agreement in the meeting.
The phased agreement aims to limit immediate budget shocks while aligning long-term costs to population. The council scheduled no further public action on the item at the meeting.
