Loading...
HomeMy WebLinkAboutFY2024 Annual Financial ReportCITY OF IOWA CITY, IOWA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2024 ICGOV.ORG“High Voltage Herky,” 2024, designed by members of the IBEW Local 405 and featured in the 20th Anniversary Edition of the Herky on Parade community-wide public art installation. Annual Comprehensive Financial Report City of Iowa City, Iowa For the fiscal year ended June 30, 2024 Prepared by: Finance Department City of Iowa City, Iowa Introductory Section Tab City of Iowa City, Iowa Table of Contents June 30, 2024 Page Introductory Section Table of contents ................................................................................................................................ 1 Letter of transmittal ............................................................................................................................ 3 Certificate of Achievement for Excellence in Financial Reporting ................................................... 12 City organizational chart .................................................................................................................... 13 City officials....................................................................................................................................... 14 Financial Section Independent Auditor’s Report ............................................................................................................ 15 Management’s Discussion and Analysis ............................................................................................ 19 Basic Financial Statements Government-wide financial statements Statement of net position ............................................................................................................. 30 Statement of activities .................................................................................................................. 33 Fund financial statements Balance sheet – governmental funds ............................................................................................ 34 Reconciliation of the balance sheet of the governmental funds to the statement of net position 35 Statement of revenues, expenditures, and changes in fund balances – governmental funds ....... 36 Reconciliation of the statement of revenues, expenditures, and changes in fund balances of governmental funds to the statement of activities ..................................................................... 37 Statement of net position – proprietary funds .............................................................................. 38 Statement of revenues, expenses, and changes in fund net position – proprietary funds ............ 39 Statement of cash flows – proprietary funds ................................................................................ 40 Statement of fiduciary net position – custodial fund ................................................................... 41 Statement of changes in fiduciary net position – custodial fund ................................................. 42 Notes to financial statements .......................................................................................................... 43 Required Supplementary Information Budgetary comparison schedule – budget and actual – all governmental funds and enterprise funds – budgetary basis………………………………………………………………………… 82 Budgetary comparison schedule – budget to GAAP reconciliation …………………………….. 84 Note to required supplementary information – budgetary reporting…………………………….. 85 Schedule of the City’s proportionate share of MFPRSI net pension liability…………………… 86 Schedule of City’s MFPRSI contributions………………………………………………………. 88 Notes to required supplementary information – MFPRSI pension liability……………………... 90 Schedule of the City’s proportionate share of IPERS net pension liability…………………… .. 92 Schedule of City’s IPERS contributions……………………………………………………….... 94 Notes to required supplementary information – IPERS pension liability……………………….. 96 Required supplementary information – schedule of changes in the City’s total OPEB liability, related ratios and notes…………………….……………………………………..…….……… 97 Combining Fund Statements Combining balance sheet – nonmajor governmental funds ............................................................ 100 Combining statement of revenues, expenditures, and changes in fund balances – nonmajor governmental funds ...................................................................................................................... 101 Combining statement of net position – nonmajor enterprise funds ................................................ 104 Combining statement of revenues, expenses, and changes in fund net position – nonmajor enterprise funds ............................................................................................................................ 105 Combining statement of cash flows – nonmajor enterprise funds .................................................. 106 Combining statement of net position – internal service funds ........................................................ 108 1 City of Iowa City, Iowa Table of Contents June 30, 2024 Page Combining Fund Statements (continued) Combining statement of revenues, expenses, and changes in fund net position – internal service fund ............................................................................................................................ 109 Combining statement of cash flows – internal service funds .................................................... 110 Statistical Section (Unaudited) Net position by component ........................................................................................................... 113 Changes in net position ................................................................................................................ 114 Fund balances – governmental funds ........................................................................................... 116 Changes in fund balances – governmental funds ......................................................................... 117 General government tax revenues by source ................................................................................ 118 Assessed and taxable value of property ........................................................................................ 119 Property tax rates – direct and overlapping governments ............................................................ 120 Levies and collections .................................................................................................................. 121 Principal taxpayers ....................................................................................................................... 122 Larger water system customers .................................................................................................... 124 Sales history and water system charges ........................................................................................ 125 Larger sewer system customers .................................................................................................... 126 Sales history and sewer system charges ....................................................................................... 127 Ratios of outstanding debt by type ............................................................................................... 128 Ratios of general obligation bonded debt to assessed value and net bonded debt per capita ....... 129 Computation of direct and overlapping debt ................................................................................ 130 Legal debt margin information ..................................................................................................... 131 Schedule of revenue bond coverage ............................................................................................. 132 Schedule of TIF revenue bond coverage ...................................................................................... 133 Demographic and economic statistics .......................................................................................... 134 Principal employers ...................................................................................................................... 135 Full-time equivalent city government employees by function ..................................................... 136 Operating indicators by function .................................................................................................. 137 Capital assets by function ............................................................................................................. 138 Compliance Section Independent auditor’s report on internal control over financial reporting and on compliance and other matters based on an audit of financial statements performed in accordance with Government Auditing Standards ....................................................................................................................... 139 Independent auditor’s report on compliance for each major federal program and report on internal control over compliance required by the Uniform Guidance ....................................................... 141 Schedule of expenditures of federal awards ................................................................................. 144 Notes to the schedule of expenditures of federal awards ............................................................. 147 Summary Schedule of Prior Audit Findings ................................................................................ 148 Schedule of findings and questioned costs ................................................................................... 149 2 December 3, 2024 To the Citizens, Honorable Mayor, Members of the City Council and City Manager City of Iowa City, Iowa The Annual Comprehensive Financial Report (Annual Report) of the City of Iowa City, Iowa (the City) for the fiscal year ended June 30, 2024 is submitted herewith in accordance with the provisions of Chapter 11 of the Code of Iowa. The City’s Finance Department prepared this report. Responsibility for both the accuracy of the data presented and the completeness and fairness of the presentation, including all disclosures, rest with the City. I believe the information, as presented, is accurate in all material respects and presented in a manner designed to fairly present the financial position and results of operations of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial affairs have been included. Management assumes full responsibility for the completeness and reliability of all of the information presented in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal controls should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements will be free of any material misstatement. Bohnsack & Frommelt, LLP, a firm of independent public accountants has issued an unmodified (“clean”) opinion on the City’s financial statements for the year ended June 30, 2024. Their opinion is included in the Financial Section of this report. The City is required to undergo an annual single audit in conformity with the provisions of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Information to comply with the Uniform Guidance and “Government Auditing Standards” is included in the Compliance Section of this report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the report of the independent auditors. Profile of the Government The City of Iowa City was incorporated April 6, 1853. The City is governed by a seven member Council; each member serves a four-year term. Elections are held every two years allowing for continuation in office of at least three members at each biennial election. The Council members are elected at large, with three members nominated from specific districts and the remaining four members nominated at large. The Council elects the Mayor from its own members for a two-year term. 3 The City Council is the legislative body and makes all policy determinations for the City through the enactment of ordinances and resolutions. It also adopts a budget to determine how the City will obtain and spend its funds. The Council appoints members of boards, commissions and committees. The City Manager is the chief administrative officer for the City and is appointed by the City Council. The City Manager implements policy decisions of the City Council and enforces City ordinances. In addition, the City Manager appoints and directly supervises the directors of the City’s operating departments and supervises the administration of the City’s personnel system. The City Manager supervises 572 full-time and 62 part-time permanent municipal employees and 290 temporary employees, including a police force of 79 sworn personnel and a fire department of 66 firefighters. The City Clerk is appointed by the City Council and reports to the Council. The City Clerk's Office administers the City government's documentation, City licenses and permits, and provides information from the Municipal Code and City Ordinances to the public and other City departments. The City Clerk’s Office is also responsible for distributing and maintaining accurate records of all City Council proceedings. The Clerk supervises 3 full-time employees. The City Attorney is also appointed by the City Council and works at the direction of the City Council. The City Attorney supervises the City Attorney's Office, including 4 Assistant City Attorneys and 2 other full-time employees. In addition, the City Attorney acts as Chief Legal Counsel to the City Council, City Manager, the various City departments and staff, and most City commissions, committees and boards. The City provides a full range of services including police and fire protection, construction and maintenance of roads, streets and infrastructure, inspection and licensing functions, a municipal airport, library, recreational activities, and cultural events. The City owns and operates its water supply and distribution system and sewage collection and treatment system with secondary treatment also provided. Virtually the entire City has separate storm and sanitary sewer systems. The City operates a municipal off-street and on-street parking system in the downtown area. The City also operates a transit system. The annual budget serves as the foundation for the City’s financial planning and control. All departments of the City are required to submit requests for appropriation to the City Manager in October. The City Manager uses these requests as the starting point for developing a proposed budget. The City Manager then presents this proposed budget to the Council for review in December. The Council is required to hold a public hearing on the proposed budget and to adopt a final budget no later than April 30th. The appropriated budget is prepared by fund, function (e.g., Public Safety), and department (e.g., Police). The City adopts a three-year financial plan that includes both operations and capital improvements. This three-year plan permits a more comprehensive review of the City’s financial condition, allowing analysis of the current and future needs and requirements. During preparation of the plan, careful review is made of property tax levy rates, utility and user fee requirements, ending cash balances by fund, debt service obligations, bond financing needs, capital outlay for equipment purchases and major capital improvement projects. The state requires at least a one-year operating budget. While legal spending control is exercised at a state mandated function level, management control is set at the Department Manager level. Encumbrance accounting is utilized in all funds for budgetary control. Appropriations that are not spent lapse at the end of the year. 4 Information Useful in Assessing the Government’s Economic Condition The City's economic strength is based on the educational sector, medical services, and diversified manufacturing. The University of Iowa and the University of Iowa Hospital and Clinics are the City’s largest employers with over 25,800 employees. The University of Iowa had an enrollment in fall 2024 of 32,199 students, which is an increase of 543 students from 31,452 students in the fall of 2023. The academic and research missions of the University, along with the health care services provided at its hospitals and clinics, have an extremely positive economic impact on the area. The City also has a significant number of national and international businesses, including Fortune 500 companies: ACT Inc., NCS Pearson, and Procter & Gamble. In February 2018, Procter & Gamble announced that in approximately two years they would be shifting their beauty care products production from Iowa City to their West Virginia plant. The announced plan was to eventually reduce the workforce from approximately 600 down to 100 employees. This would also impact nearby businesses that produce bottles and labels for this production plant in Iowa City. In May 2020, Procter & Gamble announced that they were going to maintain more employees in Iowa City by maintaining its oral rinse production here and by shifting newer product lines here. In addition, Procter & Gamble has added and is expanding an electric toothbrush plant in Iowa City which is expected to employ several hundred employees; it currently has added approximately 100 employees. The estimated investment in this new facility has been nearly $100 million. Overall, the continued economic development efforts with the Iowa City and Coralville Chambers of Commerce, private interests, the University of Iowa, other surrounding communities, and Greater Iowa City, have produced positive results with the retention and expansion of businesses. In addition, Iowa’s Creative Corridor is a seven-county alliance surrounding Iowa City and has been identified as one of the major growth areas for new business development in the State of Iowa. This Corridor gives employers workforce access to a region uniquely Iowan, founded with a manufacturing heritage, but actively seeking new frontiers and opportunities in information technology, biotechnology and bioprocessing, renewable energy, insurance and financial services, advanced manufacturing, and educational services. Continued developments within Iowa City and the region have a favorable impact upon the City's economy and growth. According to the 2020 census, the population of Iowa City is 74,828. This is an increase of 6,966 or 10.3% as compared to the 2010 census of 67,862. As a whole, the City's economy continues to grow, established firms continue to prosper and expand, and there are opportunities for growth for new businesses; however, the COVID-19 pandemic had a substantial short-term impact on the City’s economy. The economy has mostly recovered from the pandemic and Iowa City’s economy has continued to improve. As of June 2024, Iowa City’s unemployment rate was 2.4% while the State of Iowa was at 3.0%, and the National rate was 4.3%. The rate of new housing construction also decreased substantially due to the COVID-19 pandemic in 2020 and the City continues to see an increase in 2023 based on the number of building permits issued. New housing building permits consisted of 56 new single-family houses and duplexes in 2023 as compared to 98 in 2022; multi-family dwelling units added during calendar year 2023 was 474, compared to 258 in 2022. Altogether new housing additions totaled 530 units valued at $155,212,855 in 2023 versus a total of 356 units valued at $97,581,126 in 2022. The City did see an increase in 2023 of value amounts over pre COVID-19 totals valued at $124,362,697 in 2019, but still had unit numbers below that of 556 units from 2019. 5 Also reflecting the impact of the COVID-19 pandemic, the City had a decrease in commercial construction permits between 2019 and 2020. The value of permits for commercial construction increased from $7,179,000 in 2022 to $17,979,780 in 2023. The value of remodeling permits for residential and commercial properties increased from $34,628,799 in 2022 to $49,991,191 in 2023. Total permits issued in 2022 for all purposes was 543 permits for $152,715,321 which was more permits but less value than the 2023 total permit issuance of 492 permits for $275,401,574. The COVID-19 pandemic has had a significant short-term economic impact on the City of Iowa City; however, the City’s unemployment rate has dropped steadily since its peak in April 2020 as the City’s economy opened back up. The stability of the University of Iowa coupled with historically steady employment by the City’s multi-sector base of manufacturing and service industries helps to insulate the City from significant negative impacts of economic recessions. The City’s property valuations continue to rise which is indicative of the City's relative economic stability. Major Initiatives The City of Iowa City developed a 5 year Strategic Plan. The strategic planning process involved multiple steps, including gathering input from the general public, front-line City staff, department directors, and the City Council. This Strategic Plan builds on the City's previous plans to foster a more inclusive, just and sustainable Iowa City by prioritizing the physical, mental and economic well-being of all residents. Values • Partnerships and Engagement • Climate Action • Racial equity, social justice, and human rights Impact Areas & Strategies Neighborhoods & Housing • Update the City Comprehensive Plan and Zoning Code to encourage compact neighborhoods with diverse housing types and land uses. • Partner in projects that serve as models for desired future development. • Create inviting and active outdoor spaces with unique and engaging recreation offerings. • Address the unique needs of vulnerable populations and low-to-moderate income neighborhoods. Mobility • Expand the access and convenience of environmentally friendly and regionally connected public transit. • Design and maintain complete streets that are comfortable and safe for all users. • Grow and prioritize bike and pedestrian accommodations. Economy • Reinforce Iowa City as a premier community to locate and grow a business. • Ensure appropriate infrastructure is in place for future business growth and development. 6 • Cultivate a strong entrepreneurial and small businesses ecosystem with a focus on creating new pathways to success for systemically marginalized populations. • Build Iowa City’s image as the Greatest Small City for the Arts. • Strengthen the Iowa River’s role as a signature community amenity and tourism generator. Safety & Well-being • Implement and expand innovative public safety models and facilities to improve outcomes and relationships within the community. • Partner with non-profits to address the most emergent and foundational community safety and well-being needs. • Build community by fostering social connections and developing safe, accessible public spaces for gathering. Resources: Facilities, Equipment & Technology • Invest in the next generation of public facilities and equipment to create immediate operational efficiencies, boost workplace safety, health, and morale, and improve cross- department collaboration. • Promote high performance governance leveraging technology, partnerships, and innovation. People • Establish the City of Iowa City as an employer of choice in the region with a pay plan, benefits package, and flexible work options that attract and retain high-quality and motivated public service employees. • Carry out a multi-dimensional staff engagement initiative to ensure every City employee feels welcome, informed, involved, and engaged at work. • Build a diverse talent pipeline. Financial • Grow the tax base, consider alternative revenue sources, and leverage outside funding to maintain core services and pursue community priorities while maintaining equitable property tax rates. • Exercise fiscal responsibility by maintaining and growing assigned and emergency reserve funds and prudent debt management. The City Council has also promoted private investment and re-development of other targeted areas throughout the community. The areas that are currently being focused on include the Riverfront Crossings area, the Downtown District, the Riverside Drive commercial area, and the Foster Road Urban Renewal Area. 7 The Riverfront Crossing area is an initiative to revitalize the area south of Iowa City’s downtown district. This area was hard hit by flooding in 2008 and ideas for improving the district were initiated as part of a combined flood mitigation plan. The district features a riverfront park with walking and biking trails, a variety of housing options near shopping, restaurants, a state-of-the-art recital hall and recreational facilities and is a short walk to downtown Iowa City and the University of Iowa campus. This area has seen significant development over the past few years. The Riverfront Crossings area is anchored by a 76.8 acre park that was formerly comprised of public facilities including the City’s north wastewater treatment plant. An $8.5 million hazard mitigation grant from the State of Iowa assisted the City in removing the public facilities in this area and then converting the area into a riverfront park and wetland. Construction of phases 1 through 3 of the park began in 2017 and were completed during the fall of 2019; phase 4 of the park started in 2019 and was completed in the fall of 2020. On the north side of the Riverfront Crossing area, the University of Iowa recently constructed the Voxman School of Music. On the opposite side of the street, the redevelopment of an empty lot was completed in the spring of 2019 which includes a 7-story, mixed-use building with 40 apartment units, retail space on the street level, and office space on the second floor. An adjacent building houses a 7-story Element Hotel by Marriott. The estimated cost of these developments is approximately $40 million. On the back side of the School of Music, a new development has been approved for two new 15 story towers with up to 820 total units and 1,575 beds. This area is approximately one city block in size, will provide right-of-way to re-connect Capitol Street, and has an estimated investment of $200 million. In the Downtown District, the City completed a streetscape plan for the Central Business District which included lighting, landscaping, parking, utility improvements, artwork, and pedestrian amenities. Reconstruction and enhancements for the Washington Street corridor were completed in 2017 and reconstruction of Black Hawk mini-park and the downtown pedestrian mall were completed in 2020. Dubuque Street reconstruction was recently completed which included updating critical infrastructure, enhanced the retail environment with streetscape components and improved the pedestrian experience. Other future downtown streetscape projects are scheduled in the five-year capital improvement program. The downtown has also seen significant private development over the past few years. Private development in the downtown area includes a new project completed in 2022, which includes the historical renovation of several commercial buildings along the pedestrian mall and the construction of an 11-story, 120,000 square foot multi-residential with 102 residential units. The total project is estimated to cost $54.4 million. Other buildings in the downtown that have undergone major re-development recently include the Wilson Building and public space which has been developed into a 15-story mixed-use development known as the Chauncey; this building has 8 floors of residential units, a 35-unit hotel, two floors of commercial space, a movie theatre and a bowling alley. The project was estimated to cost $49 million. Also completed was the redevelopment of the City Hall parking lot and neighboring church into 126 residential units, parking, and commercial space. The project was estimated to cost $33.4 million. Also new in 2020, was the addition of a 13,000+ square foot Target in a large downtown store front that had been vacant for years. This store represents a trend away from big box stores on the edges of town and a focus on University related downtown foot traffic. 8 The Riverside Drive commercial area is an area that stretches from the University of Iowa campus to the intersection of Highways 1 and 6 and is across the river from the Riverfront Crossings development area. The development of a 4-story, $16.1 million multi-family/student housing development in the Riverside Drive area was completed in late 2016, and adjacent to this development several new retail spaces including a gas station/marketplace and additional multi- residential housing units were also constructed or renovated. The City is developing a streetscape plan for this area which will include lighting, trails, landscaping, and other amenities and improvements. Construction of the streetscape and intersection improvements began in 2018 and were completed in 2020. Additional streetscape and trail improvements are planned for this area in the future. Development of the Foster Road Urban Renewal Area is underway which will convert a 53.29 acre wooded area north of the Downtown area and near Interstate 80 into a new residential/multi- residential development with a total estimated cost of approximately $33 million. A 53-unit, 55+ senior living facility was recently constructed, and an additional 52 townhomes are planned adjacent to the facility. The project also extended the Foster Road arterial from Dubuque Street to Prairie Du Chien Road, and the area will provide Low-Middle Income (LMI) funding through a tax increment district that can be used by the City anywhere to assist with the development of affordable housing. Long-term Financial Planning It is management’s intent to support the major City Council initiatives through budget appropriations, departmental operations, and employee development so that the organization as a whole is moving in the same direction. The passage of property tax reform (SF295) by the state legislature in 2013 is still impacting the preparation of the year financial plan (FY2025 – FY2027). The property tax reform bill had multiple components including a property tax rollback for commercial and industrial property, which reduced the taxable value of these property types. The bill established a State funded “backfill” to reimburse the City for lost property tax revenues due to the commercial and industrial rollback. The State “backfill” payments began in fiscal year 2015 but were capped at the fiscal year 2017 levels for years thereafter. Beginning in fiscal year 2023, the State began phasing out the “backfill” and it will be fully phased out in five years. This bill also limited the annual taxable valuation growth of residential and agricultural property to 3 percent, instead of the previous limit of 4 percent. The impact of this provision is that the taxable percentage of residential property is expected grow at a slower pace. The City will not receive any money from the State due to lost revenue from this provision. SF295 also established a multi-residential property classification that includes mobile home parks, assisted living facilities, and property primarily intended for human habitation. A gradual rollback will be applied to these properties to eventually tax them similarly to residential property, rather than commercial, by fiscal year 2024. This will also not be reimbursed by the State of Iowa. Due to the passage of SF295, the City estimates its net revenue losses to be $26,848,000 for fiscal years 2015 through 2022. The cumulative net revenue loss from fiscal years 2015 through 2024 is estimated to be $41,126,902. It is possible that this could affect the City’s ability to finance services at current levels without finding other revenue sources or more efficient ways to deliver services. 9 In 2023 the state legislature passed additional property tax reform (HF718), which will have a significant impact on the City’s budget starting with FY2025. In addition to eliminating two levies (Emergency Levy & Library Levy) that the City currently utilizes the bill also reduces the amount of growth that is allowed for the General Levy. The total impact of this new legislation has not been estimated yet, but it is anticipated that it will be at least a reduction of $1 million dollars annually. The City’s long-term financial planning strategy is to promote targeted economic development, diversify its revenue structure, control spending and create efficiencies, and to build adequate reserves and contingencies into its financial structure. In addition, the City is annually reviewing and adjusting its user fees, service charges, and fine structures to try to maintain all of its major enterprise funds with a positive net income after depreciation but before capital contributions, transfers, and extraordinary items. The City also continues to strive to reduce the City’s property tax levy rate to be competitive for economic development purposes. In fiscal year 2013, the City’s property tax levy rate was $17.269 per $1,000 of assessed value. The property tax levy rate was reduced for nine consecutive years to $15.633 in fiscal year 2023 and remained at $15.633 in fiscal year 2024 and 2025. This has been a reduction of $1.636 per $1,000 of assessed value or 9.47% over that time period. In looking at expenses for the FY2023 – FY2026 Financial Plan and FY2025 operating budget, the City will generally experience increased expenditures; with General Fund expenditures and total operating expenditures growing at approximately 5% or less from FY2024 to FY2025. Bargaining unit cost-of-living wage increases are approximately 2% to 4% each year. In prior years, the budgeted full-time equivalents (FTE) has generally remained flat - from 607.66 in FY2015 to 608.18 in FY2020, but in FY2021, the permanent FTE count increases to 624.08 primarily due to the conversion of temporary workers to permanent part-time or permanent full-time positions. In FY2022 & FY2023, three additional positions were added each year bringing the City’s total FTE to 630.90. In FY2024, 16.05 FTEs were added, bringing the total to 646.95.In FY2025, 3.25 FTEs were added, bringing the total to 650.20. The City has averaged a 8.44% increase in its health insurance premium rates over the previous eight years; however, is expecting a continued upward trend for health insurance rates in FY2025 and FY2026. Employee contributions, deductibles, and out-of-pocket maximums for health insurance increased in FY2024, and employee contributions for health insurance also increased in FY2024, which should help mitigate the impact to the City’s overall premium increase. In FY2025 we are expecting to see increases as all expenditures are seeing continued increases due to inflation. In balancing the budget for the three-year period, the City attempts to mitigate the growth of costs while continuing to provide high quality services by identifying ways to provide services more efficiently, reviewing and updating existing revenue sources to meet strategic goals, strategically funding new programming and economic development to ensure strong property value growth, providing for necessary improvements to existing infrastructure, and upholding fiscal integrity by maintaining adequate cash reserves. 10 Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting (the Certificate) to the City of Iowa City, Iowa for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2023. The Certificate is the highest form of recognition for excellence in state and local financial reporting. In order to be awarded the Certificate, a governmental unit must publish an easily readable and efficiently organized Annual Comprehensive Financial Report, whose contents conform to program standards. The Annual Comprehensive Financial Report must satisfy both accounting principles generally accepted in the United States of America and applicable legal requirements. The Certificate is valid for a period of one year only. The City has received the Certificate for the last thirty-seven consecutive years. I believe our current report continues to conform to the Certificate requirements and I will submit it to GFOA to determine its eligibility for another certificate. In addition, the City received the GFOA’s Award for Distinguished Budget Presentation for its annual appropriated budget beginning July 1, 2024. In order to qualify for the Distinguished Budget Presentation Award, the City’s budget document was judged to be proficient or outstanding in several categories including policy documentation, financial planning, and organization. This is the twelfth consecutive year the City has received this award. Responsibility and Acknowledgments The Department of Finance prepared the Annual Comprehensive Financial Report of the City of Iowa City, Iowa for the fiscal year ended June 30, 2024. The City Council, as required by law, is responsible for the complete and accurate preparation of the City’s Annual Comprehensive Financial Report. I believe that the information presented is accurate in all material respects and that this report fairly presents the financial position and results of operations of the various funds of the City. The preparation of this report on a timely basis could not have been accomplished without the efficient and dedicated services of the entire staff of the City's Finance Department. I would like to express my appreciation to all members of the department who assisted and contributed to its preparation. I want to especially recognize the contributions of the Assistant Finance Director, Jacklyn Fleagle, Accounting Coordinator, Mark Messer, Senior Accountants, TaraLynne Werthmann and Riley Davis and Budget Management Analyst, Angie Ogden. Also, I thank the Mayor, members of the City Council and the City Manager for their interest and support in planning and conducting the financial operations of the City in a dedicated, responsible, and progressive manner. Respectfully submitted, Nicole Davies Finance Director 11 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Iowa City Iowa For its Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2023 Executive Director/CEO 12 City of Iowa City Organization Chart CITY COUNCIL CITY ATTORNEY City Attorney • City Attorney CITY MANAGER City Manager • City Manager • Communications Office • Human Resources • Human Rights • Economic Development • Climate Action & Outreach AIRPORT COMMISSION Airport • Airport Operations LIBRARY BOARD Library • Library Operations • Library Development Office CITY CLERK City Clerk • City Clerk Fire • Administration• Emergency Operations• Fire Prevention• Training Public Works • Administration• Engineering• Streets• Wastewater• Water• Equipment • Resource Management Transportation Services • Administration• Parking• Public Transportation Police • Administration• Support Services• Field Operations Finance • Administration• Accounting• Purchasing• Revenue• Risk Management• Information Technology Services Neighborhood & Development Services • Administration• Development Services• Neighborhood Services• Metropolitan Planning Organizationof Johnson County Parks & Recreation • Administration• Recreation• Park Maintenance• Cemetery• Government Buildings Senior Center • Senior Center Operations ELECTED APPOINTED Departments & Divisions COMMUNITY 13 City of Iowa City, Iowa Listing of City Officials June 30, 2024 Elected Officials Term Expires Mayor Bruce Teague January 2, 2026 Council Member and Mayor Pro Tem Mazahir Salih January 3, 2028 Council Member Megan Alter January 2, 2026 Council Member Josh Moe January 3, 2028 Council Member Shawn Harmsen January 2, 2026 Council Member Laura Bergus January 3, 2028 Council Member Andrew Dunn January 3, 2028 Appointed Officials Date of Hire City Manager Geoff Fruin November 28, 2011 City Clerk Kellie Fruehling July 10, 2000 City Attorney Eric Goers September 7, 2005 Department Directors Deputy City Manager Chris O’Brien November 12, 2024 Assistant City Manager Kirk Lehmann February 01, 2018 Director of Neighborhood Development Services Tracy Hightshoe August 27, 2001 Library Director Elsworth Carman January 2, 2019 Director of Public Works Ron Knoche April 28, 1999 Director of Transportation Services Darian Nagle Gamm May 21, 2008 Senior Center Coordinator LaTasha DeLoach July 31, 2018 Fire Chief Scott Lyon April 4, 2022 Parks and Recreation Director Juli Seydell Johnson January 4, 2016 Director of Finance Nicole Davies August 4, 2014 Chief of Police Dustin Liston January 11, 2021 14 Financial Section Tabs 15 16 17 (This page left blank intentionally.) 18 Management’s Discussion and Analysis As management of the City of Iowa City, we present this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2024. This narrative is intended to be used in conjunction with additional information that is included in the letter of transmittal, which can be found on pages 3 – 11 of this report. Financial Highlights • The assets and deferred outflows of resources of the City of Iowa City exceeded its liabilities and deferred inflows of resources at the close of the fiscal year ending June 30, 2024 by $801,843,000 (net position). Of this amount, $181,797,000 (unrestricted net position) may be used to meet the government’s ongoing obligations to its citizens and creditors. • The City’s total net position increased by $35,520,000 during the fiscal year. Governmental activities increased by $23,377,000 and business-type activities increased by $12,143,000. • At the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $135,558,000, an increase of $12,274,000 in comparison with the prior year. Of this total amount, approximately $46,146,000 or 34.0% is unassigned and available for spending at the City’s discretion. • At the end of the current fiscal year, the City’s unassigned fund balance for the General Fund was $46,149,000 or 74.5% of total General Fund expenditures. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements; and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements: The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances in a manner similar to a private-sector business. The statement of net position presents information on all of the City’s assets and deferred outflows of resources, liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include Public Safety, Public Works (roads and traffic controls), Culture and Recreation, Community and Economic Development, General Government, and Interest on long-term debt. The business-type activities of the City include Airport, Housing Authority, Parking, Sanitation, Stormwater Collection, Transit, Wastewater Treatment, and Water. The government-wide financial statements may be found on pages 30 – 33 of this report. 19 Fund Financial Statements: A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds: Governmental funds are used to account for essentially the same function reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements and is typically the basis that is used in developing the next annual budget. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison. The City has six major governmental funds: General Fund, Other Shared Revenue and Grants Fund, Employee Benefits Fund, Other Construction Fund, Bridge, Street and Traffic Control Construction Fund, and Debt Service Fund. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for these major funds. Data from all other non-major governmental funds is combined into a single aggregated presentation and are referenced under a single column as “Other Governmental Funds”. Individual fund data on each of these non- major governmental funds is provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for all governmental funds as required by state statute. Budget comparisons have been provided for the Governmental funds and the Enterprise funds, to demonstrate compliance with the adopted budget. The basic governmental funds financial statements can be found on pages 34 – 37 of this report. Proprietary Funds: The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its Airport, Housing Authority, Parking, Sanitation, Stormwater Collection, Transit, Wastewater Treatment, and Water activities. Internal Service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City has four Internal Service Funds: Equipment Maintenance, Central Services, Loss Reserve, and Information Technology. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds financial statements provide the same type of information as the government-wide financial statements, only in more detail. Transit, Wastewater Treatment, Water, Sanitation, Stormwater and Housing Authority are considered to be major funds and are reported individually throughout the report. The other two non-major enterprise funds are grouped together for reporting purposes and listed under a single heading “Other Enterprise Funds”. Detailed information for each of the non-major funds is provided in the combining statements on pages 103 – 106. Individual fund data for the Internal Service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages 38 – 40 of this report. Fiduciary Funds: Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not available to support the City’s own programs and therefore are not reflected in the government-wide financial statements. The City has one fiduciary fund: Project Green, which is maintained as a custodial fund. 20 The basic fiduciary funds financial statements can be found on pages 41 - 42. Notes to Financial Statements: The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 43 – 80 of this report. Other Information: The combining statements referred to in the above paragraphs in connection with non- major governmental funds and internal service funds are presented immediately following the notes. Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $801,843,000 at the close of the fiscal year ended June 30, 2024. By far, the largest portion of the City’s net position reflect its investment in capital assets (e.g., land, building, machinery and equipment, improvements other than buildings, and infrastructure), net any related debt to acquire those assets that is still outstanding. The City uses these capital assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other resources, since the capital assets themselves cannot be used to liquidate these liabilities. City of Iowa City's Net Position June 30, 2024 (amounts expressed in thousands) Governmental Business-type activities activities Total 2024 2023 2024 2023 2024 2023 Current and other assets 246,367$ 238,577$ 149,469$ 141,380$ 395,836$ 379,957$ Capital assets 290,262 284,995 337,574 331,579 627,836 616,574 Total assets 536,629 523,572 487,043 472,959 1,023,672 996,531 Deferred outflows of resources 13,060 8,319 3,030 1,909 16,090 10,228 Long-term liabilities outstanding 110,977 105,954 28,691 25,319 139,668 131,273 Current and other liabilities 15,343 26,717 8,076 7,717 23,419 34,434 Total liabilities 126,320 132,671 36,767 33,036 163,087 165,707 Deferred inflows of resources 71,755 70,983 3,077 3,746 74,832 74,729 Net position: Net investment in capital assets 238,351 235,218 332,087 325,391 570,438 560,609 Restricted 44,316 40,048 5,292 7,959 49,608 48,007 Unrestricted 68,947 52,971 112,850 104,736 181,797 157,707 Total net position 351,614$ 328,237$ 450,229$ 438,086$ 801,843$ 766,323$ 21 A portion of the City’s net position, $49,608,000 or 6.2%, represents resources that are subject to external restrictions on how they may be used. The remaining balance of the unrestricted net position, $181,797,000 or 22.7%, may be used to meet the government’s ongoing obligations to its citizens and creditors. At the end of the fiscal year ended June 30, 2024, the City is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The following is a more detailed review of FY24’s operation. Governmental Activities: Governmental activities increased the City’s net position by $23,377,000. The increase in net position of governmental activities is primarily from an increase in earnings on investments and conservative budgeting. The total revenues for governmental activities for FY24 were $122,505,000. Governmental activities are primarily funded through taxes, $74,352,000 or 60.7%, and grants and contributions, $26,736,000 or 21.8%. Taxes decreased from the prior year by $258,000, which is relatively flat year over year. Grants and contributions increased from prior year by $6,829,000 due mainly to additional funding recognized from the American Rescue Plan Act in FY24. Expenses for governmental activities totaled $88,954,000. Governmental activities are tracked by function including Public Safety, Public Works, Community and Economic Development, Culture and Recreation, and General Government. In FY24, Public Safety accounted for the highest portion of governmental expenses, $29,255,000 or 32.9%, and increased over the prior year due to an increase in pension expense due to a increase in the net pension liability. Public Works expenses of $16,733,000 or 18.8% made up another large portion of the governmental expenses and had a decrease in expenses from the prior year. Culture and Recreation expenses of $18,664,000 or 21.0% made up the second highest portion of governmental expenses and had a slight increase in expenses from the prior year. Business-type Activities: Business-type activities increased the City’s total net position by $12,143,000. The increase in net position was primarily from the Water and Stormwater funds. Water generated operating income of $608,000, had transfers in of $3,467,000, and received contributions of infrastructure of $266,000 from capital projects funds. Revenues for business-type activities totaled $72,513,000. The primary revenue source for business-type activities is charges for services, $45,608,000 or 62.9%. In addition for FY24, the City’s business type-activities had a significant portion, $20,424,000 or 28.2%, of their revenues from grants and contributions used to help fund operation and capital projects for business-type activities. The total expenses for business-type activities in FY24 were $70,544,000. Housing Authority represented the highest portion of business-type activities, $13,277,000 or 18.8%, with Wastewater, $12,843,000 or 18.2%, Sanitation, $12,907,000 or 18.3% Water, $11,022,000 or 15.6%, and Transit, $10,604,000 or 15.0%, making up the remainder of the majority of business-type activities expenses. 22 The graphs on the following pages represent a breakdown of revenue by source and expenses by program area for governmental and business-type activities. City of Iowa City's Changes in Net Position (amounts expressed in thousands) Governmental Business-type activities activities Total 2024 2023 2024 2023 2024 2023 Revenues: Program Revenues: Charges for services 8,202$ 9,874$ 45,608$ 44,203$ 53,810$ 54,077$ Operating grants and contributions 23,568 15,550 19,015 16,741 42,583 32,291 Capital grants and contributions 1,493 3,113 1,409 1,632 2,902 4,745 General Revenues: Property taxes 70,578 70,824 - - 70,578 70,824 Other taxes 3,774 3,786 - - 3,774 3,786 Grants and contributions not restricted to specific purposes 1,675 1,244 - - 1,675 1,244 Earnings (loss) on investments 8,894 4,325 5,253 2,605 14,147 6,930 Gain on disposal of capital assets 418 1,205 23 1 441 1,206 Other 3,903 3,984 1,205 1,083 5,108 5,067 Total revenues 122,505 113,905 72,513 66,265 195,018 180,170 Expenses: Public safety 29,255 26,413 - - 29,255 26,413 Public works 16,733 19,051 - - 16,733 19,051 Culture and recreation 18,664 18,135 - - 18,664 18,135 Community and economic development 12,269 13,570 - - 12,269 13,570 General government 10,415 8,774 - - 10,415 8,774 Interest on long-term debt 1,618 1,622 - - 1,618 1,622 Wastewater treatment - - 12,843 12,869 12,843 12,869 Water - - 11,022 9,672 11,022 9,672 Sanitation - - 12,907 10,282 12,907 10,282 Housing authority - - 13,277 12,067 13,277 12,067 Parking - - 6,067 6,436 6,067 6,436 Airport - - 1,677 1,433 1,677 1,433 Stormwater - - 2,147 2,393 2,147 2,393 Transit - - 10,604 9,276 10,604 9,276 Total expenses 88,954 87,565 70,544 64,428 159,498 151,993 Change in net position before transfers 33,551 26,340 1,969 1,837 35,520 28,177 Transfers (10,174) (4,876) 10,174 4,876 - - Change in net position 23,377 21,464 12,143 6,713 35,520 28,177 Net position beginning of year, as restated 328,237 306,773 438,086 431,373 766,323 738,146 Net position end of year 351,614$ 328,237$ 450,229$ 438,086$ 801,843$ 766,323$ 23 24 25 Financial Analysis of the Government’s Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds: The financial reporting focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information may be/is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. Fund balances for the governmental funds are reported in classifications that comprise a hierarchy based on the extent to which the government honors constraints on the specific purposes for which amounts in those funds can be spent. As of the fiscal year ended June 30, 2024, the City’s governmental funds reported combined ending fund balances of $135,558,000, an increase of $12,274,000 in comparison with the prior year. Of this total amount, $46,146 ,000 constitutes unassigned fund balance, which is available to use as working capital for the General Fund since property tax revenues are received only twice a year and the remainder is available to meet the future needs of the City. The remainder of the fund balance is not available for new spending because of constraints imposed externally by creditors, grantors, contributors, or laws or regulations of other governments or constraints imposed internally on the specific purposes for which these amounts can be spent. The restricted fund balance of $64,297,000 or 47.4% contains external restraints on its use. The assigned fund balances of $18,437,000 or 13.6% have been identified by the City to be used for specific purposes. The nonspendable fund balance is $6,678,000 or 4.9%, which the City is contractually required to maintain intact or cannot be spent because it is in a nonspendable format, such as inventories. The General Fund is the chief operating fund of the City. As of the fiscal year ended June 30, 2024, the unassigned fund balance of the General Fund was $46,149,000 while General Fund’s total fund balance was $73,445,000. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 74.5% of total General Fund expenditures of $61,923,000, while total fund balance represents 118.6% of that same amount. During the current fiscal year, the fund balance of the City’s General Fund increased by $11,409,000. This is due to transfers in from other funds. The fund balance in the Bridge, Street, and Traffic Control Construction Fund was $16,708,000, an increase of $1,346,000. This fund accounts for transactions relating to the acquisition or construction of major streets, bridges, and traffic control facilities. The fund balance in the Other Construction Fund was $12,049,000, a decrease of $1,879,000. This fund accounts for the construction or replacement of other governmental general capital assets, such as administrative buildings, with various funding sources, including general obligation bonds, intergovernmental revenues, and contributions. This decrease is mainly due to the timing of bond sales. The ending fund balance of the Debt Service Fund was $7,608,000, an increase of $182,000, all of which is reserved for the payment of debt service (i.e. payment of general obligation principal and interest). The ending fund balance of the Employee Benefits Fund was $3,577,000, a decrease of $711,000. The ending fund balance of the Other Shared Revenue and Grants Fund was $17,356,000, an increase of $1,221,000 due to the recognition of ARPA funds. 26 Proprietary Funds: The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The ending net position of the enterprise funds was $424,000,000, an increase in net position of $10,411,000. This was primarily due to capital contributions of federal and state grants to fund capital improvement projects and transfers of business-type capital assets from governmental capital project funds. Of the enterprise funds’ net position, $332,087,000 is net investment in capital assets. Unrestricted net position totaled $86,621,000, an increase of $6,382,000 compared to the previous year. The Internal Service funds showed net position totaling $66,494,000 as of June 30, 2024, an increase of $6,898,000 primarily due to operating income in the Equipment Maintenance and Loss Reserve Funds to build up reserves for future expenses and capital outlay. Budgetary Highlights The City presents budgetary information as allowed by GASB Statement No. 41. Budgets are based on nine functional areas as required by state statute, not by fund or fund type. The City had two budget amendments during the fiscal year. These amendments increased budgeted revenues by $11,484,000 or 6.5% to a total of $188,728,000 and the expenditure budget by $91,187,000 or 41.4% to a total of $311,295,000. These increases were due primarily to capital projects in governmental and business- type funds because of timing of completion of projects. Capital Assets and Debt Administration Capital Assets: The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2024 amounts to $627,836,000, net of accumulated depreciation. This investment in capital assets, including land, buildings, improvements other than buildings, equipment, streets, bridges, trails, wastewater and water systems, and other infrastructure represents the value of resources utilized to provide services to its citizens. The City’s investment in capital assets for the fiscal year ended June 30, 2024 increased by $5,267,000 for governmental activities compared to the prior year and increased by $5,994,000 for business-type activities from the prior year. The following table reflects the $627,836,000 investment in capital assets, net of accumulated depreciation. City of Iowa City's Capital Assets (net of depreciation) (amounts expressed in thousands) Governmental Business-type Activities Activities Total 2024 2023 2024 2023 2024 2023 Land 32,614$ 32,542$ 30,957$ 30,957$ 63,571$ 63,499$ Buildings 33,680 34,397 53,155 55,970 86,835 90,367 Improvements other than buildings 2,971 3,097 3,002 3,099 5,973 6,196 Machinery and equipment 35,077 35,942 16,807 15,505 51,884 51,447 IT subsciptions 337 370 397 349.00 734 719 Infrastructure 159,472 158,841 208,749 210,647 368,221 369,488 Construction in progress 26,111 19,806 24,507 15,053 50,618 34,859 Total 290,262$ 284,995$ 337,574$ 331,580$ 627,836$ 616,575$ 27 Major capital asset events during the current fiscal year included the following: • Three large construction projects were completed during FY 24. The first is the Influent Rake & Screen Replacement. This project includes replacing an old asset with new influent rake and screen system. This project had construction in progress balance at the beginning of the year of $2,042,000 and current year expenditures of $1,000. The total cost of the project that was capitalized was $2,044,000. The project was funded through Wastewater operating funds. Another project is the Second Avenue Bridge Replacement. This project consisted of replacing a bridge on Second Avenue. It had construction in progress balance at the beginning of the year of $1,377,000, and current year expenditures of $15,000. The total cost of the project that was capitalized was $1,392,000 and it was primarily funded through federal grants and transfers in of Road Use Tax dollars. The third project, Fairchild Street Reconstruction, reconstructed several blocks along Fairchild Street. This project was capitalized at $1,790,000 with current year expenses of $1,140,000 and a beginning construction in progress balance of $656,000. Additional information on the City’s capital assets can be found in Note 5 to the financial statements. Debt Administration: At the end of the fiscal year, the City had total bonded debt outstanding of $64,785,000. Of this amount, $52,980,000 comprises debt backed by the full faith and credit of the City. $538,000 or 1.0% of the general obligation bonds is debt that will be paid with Tax Increment Financing revenues. $11,805,000 represents revenue bonds secured solely by specific revenue sources. The City issued $10,140,000 of General Obligation bonds during FY24. This increase in debt was offset by the retirement of debt for a net increase of City’s total bonded debt by $65,000. The City continues to have the same excellent bond rating on its General Obligation bonds that it has had for the past several years. This rating is given to those bonds judged to be of the best quality and carrying the smallest degree of investment risks. The City's bond ratings by Moody’s Investors Services, Inc. as of June 30, 2024 were as follows: General obligation bonds Aaa Wastewater treatment revenue bonds Aa2 Water revenue bonds Aa2 The City continues to operate well under the State debt capacity debt limitations. State statute limits the amount of debt outstanding to 5% of the assessed value of all taxable property in Iowa City. Debt subject to the debt limit includes general obligation debt and revenue bonds issued pursuant to Iowa Code Chapter 403 (tax increment). The current debt limitation for the City is $368,416,000. With outstanding debt applicable to this limit of $93,930,000 we are utilizing 25.5% of this limit. More detailed information on debt administration is provided in Note 6 of the financial statements. City of Iowa City's Outstanding Debt General Obligation and Revenue Bonds (amounts expressed in thousands) Governmental Business-type Activities Activities Total 2024 2023 2024 2023 2024 2023 Genera l obligation bonds 52,980$ 52,915$ -$ -$ 52,980$ 52,915$ Revenue bonds 9,925 10,880 1,880 3,625 11,805 14,505 Total 62,905$ 63,795$ 1,880$ 3,625$ 64,785$ 67,420$ 28 Economic Factors and Next Year’s Budget and Rates The City expects continued constraints by the State’s property tax formula. The State passed property tax reform, which will negatively affect the City’s general operating funds. Without the potential for new revenue sources, like those mentioned above, the City’s opportunities for new initiatives are limited. The Council has established a budget where expenditures exceed revenues by $11,739,000 in the General Fund for FY25 that strives to maintain current service delivery levels. The tax levy rate per $1,000 of assessed valuation for FY25 is provided below: Requests for Information This report is designed to provide a general overview of the City of Iowa City’s finances for all of those with an interest in the government’s finances. Questions concerning any of the information provided in this report, or requests for additional financial information should be addressed to City of Iowa City, Finance Department, 410 East Washington Street, Iowa City, IA, 52240. General Levy $ 8.402 Debt Service Levy 2.577 Employee Benefits Levy 3.344 Transit Levy 0.950 Liability Insurance Levy 0.360 Total City Levy $ 15.633 29 Governmental Business-type Activities Activities Total Assets Equity in pooled cash and investments 155,713$ 84,484$ 240,197$ Receivables: Property tax 69,847 - 69,847 Accounts and unbilled usage 595 4,494 5,089 Interest 1,148 771 1,919 Notes 5,237 307 5,544 Internal balances (28,722) 28,722 - Lease receivable 184 2,267 2,451 Due from other governments 5,380 5,644 11,024 Inventories 944 921 1,865 Assets held for resale 6,335 - 6,335 Restricted assets: Equity in pooled cash and investments 29,706 21,859 51,565 Capital assets: Land and construction in progress 58,725 55,463 114,188 Other capital assets (net of accum. depreciation/amortization) 231,537 282,111 513,648 Total assets 536,629 487,043 1,023,672 Deferred Outflows of Resources Pension related deferred outflows 11,734 2,483 14,217 OPEB related deferred outflows 1,326 547 1,873 Total deferred outflows of resources 13,060 3,030 16,090 Liabilities Accounts payable 3,081 2,212 5,293 Contracts payable 3,998 2,604 6,602 Accrued liabilities 3,521 329 3,850 Interest payable 189 20 209 Deposits 1,421 2,757 4,178 Advances from grantors 3,091 - 3,091 Due to other governments 42 74 116 Unearned revenue - 80 80 Noncurrent liabilities: Due within one year: Employee vested benefits 1,487 551 2,038 Subscription liability 145 57 202 Bonds payable 12,007 1,360 13,367 Due in more than one year: Employee vested benefits 1,139 331 1,470 Subscription liability 110 95 205 Capital loan notes payable - 788 788 Net pension liability 34,767 6,303 41,070 Other post employment benefits liability 6,736 2,788 9,524 Notes payable 211 - 211 Bonds payable 54,375 560 54,935 Landfill closure/post-closure liability - 15,858 15,858 Total liabilities 126,320$ 36,767$ 163,087$ (continued) (amounts expressed in thousands) City of Iowa City, Iowa Statement of Net Position June 30, 2024 30 Governmental Business-type Activities Activities Total Deferred Inflows of Resources Pension related deferred inflows 1,036$ 77$ 1,113$ OPEB related deferred inflows 1,715 710 2,425 Lease related deferred inflows 184 2,267 2,451 Deferred amount on refunding - 23 23 Succeeding year property taxes 68,820 - 68,820 Total deferred inflows of resources 71,755 3,077 74,832 Net Position Net investment in capital assets 238,351 332,087 570,438 Restricted for or by: Employee benefits 3,953 - 3,953 Capital projects: Expendable 18,750 - 18,750 Nonexpendable 274 - 274 Debt service 7,419 - 7,419 Police 237 - 237 Other purposes Expendable 10,363 - 10,363 Nonexpendable 69 - 69 Bond ordinance - 2,769 2,769 State statute - 710 710 Future improvements - 404 404 Grant agreement 3,251 1,409 4,660 Unrestricted 68,947 112,850 181,797 Total net position 351,614$ 450,229$ 801,843$ The notes to the financial statements are an integral part of this statement. June 30, 2024 (amounts expressed in thousands) City of Iowa City, Iowa Statement of Net Position (continued) 31 32 Operating Capital Charges Grants and Grants and Governmental Business-type Functions/Programs:Expenses for Services Contributions Contributions Activities Activities Total Governmental activities: Public safety 29,252$ 5,331$ 301$ -$ (23,620)$ -$ (23,620)$ Public works 16,733 349 10,581 1,473 (4,330) - (4,330) Culture and recreation 18,664 701 67 - (17,896) - (17,896) Community and economic development 12,269 20 12,649 20 420 - 420 General government 10,442 1,801 - - (8,641) - (8,641) Interest on long-term debt 1,624 - - - (1,624) - (1,624) Total governmental activities 88,984 8,202 23,598 1,493 (55,691) - (55,691) Business-type activities: Wastewater treatment 12,843 12,795 - 360 - 312 312 Water 11,022 10,997 - 266 - 241 241 Sanitation 12,907 12,767 - - - (140) (140) Housing authority 13,277 350 13,297 - - 370 370 Parking 6,067 5,459 - 18 - (590) (590) Airport 1,677 396 117 632 - (532) (532) Stormwater 2,147 1,886 - 186 - (75) (75) Transit 10,604 958 5,548 - - (4,098) (4,098) Total business-type activities 70,544 45,608 18,962 1,462 - (4,512) (4,512) Total 159,528$ 53,810$ 42,560$ 2,955$ (55,691) (4,512) (60,203) General revenues: Property taxes, levied for general purposes 70,578 - 70,578 Hotel/motel tax 2,043 - 2,043 Gas and electric tax 748 - 748 Utility franchise tax 983 - 983 Grants and contributions not restricted to specific purposes 1,675 - 1,675 Earnings (loss) on investments 8,894 5,253 14,147 Gain on disposal of capital assets 418 23 441 Miscellaneous 3,903 1,205 5,108 Transfers (10,174) 10,174 - Total general revenues and transfers 79,068 16,655 95,723 Changes in net position 23,377 12,143 35,520 Net position beginning of year 328,237 438,086 766,323 Net position end of year 351,614$ 450,229$ 801,843$ The notes to the financial statements are an integral part of this statement. Program Revenues Net (Expense) Revenue and Changes in Net Position City of Iowa City, Iowa Statement of Activities For the Year Ended June 30, 2024 (amounts expressed in thousands) 33 Bridge, Other Street, and Shared Traffic Other Revenue and Employee Other Control Debt Governmental General Grants Benefits Construction Construction Service Funds Total Assets Equity in pooled cash and investments 64,686$ 11,377$ 3,380$ 6,754$ 9,596$ 7,269$ 1,444$ 104,506$ Receivables: Property tax 42,704 12 14,704 - - 11,682 745 69,847 Accounts and unbilled usage 154 10 - 81 171 - - 416 Interest 408 89 - 127 130 53 26 833 Notes 1,330 481 - - - 113 3,313 5,237 Due from other funds 211 - - - - - - 211 Lease receivable 164 - - - - - - 164 Advances to other funds - - - - - 18 - 18 Due from other governments 2,618 874 390 136 1,182 - 163 5,363 Inventories - 274 - - - - - 274 Assets held for resale 6,335 - - - - - - 6,335 Restricted assets: Equity in pooled cash and investments 3,433 7,339 - 9,304 9,630 - - 29,706 Total assets 122,043$ 20,456$ 18,474$ 16,402$ 20,709$ 19,135$ 5,691$ 222,910$ Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities Accounts payable 1,774$ 349$ 2$ 87$ 267$ -$ 117$ 2,596$ Contracts payable - - - 997 3,001 - - 3,998 Accrued liabilities 997 62 1 - - - 12 1,072 Due to other funds - - - - - - 85 85 Advances from other funds - 18 - 2,619 - - - 2,637 Due to other governments 42 - - - - - - 42 Liabilities payable from restricted assets: Deposits 1,411 10 - - - - - 1,421 Advances from grantors 19 2,639 - 433 - - - 3,091 Total liabilities 4,243 3,078 3 4,136 3,268 - 214 14,942 Deferred Inflows of Resources Unavailable revenues: Succeeding year property taxes 42,127 - 14,504 - - 11,527 662 68,820 Lease related deferred inflows 164 - - - - - - 164 Grants 1 22 - 22 712 - - 757 Other 2,063 - 390 195 21 - - 2,669 Total deferred inflows of resources 44,355 22 14,894 217 733 11,527 662 72,410 Fund Balances Nonspendable 6,404 274 - - - - - 6,678 Restricted 2,455 17,082 3,577 12,049 16,708 7,608 4,818 64,297 Assigned 18,437 - - - - - - 18,437 Unassigned 46,149 - - - - - (3) 46,146 Total fund balances 73,445 17,356 3,577 12,049 16,708 7,608 4,815 135,558 Total liabilities, deferred inflows of resources and fund balances 122,043$ 20,456$ 18,474$ 16,402$ 20,709$ 19,135$ 5,691$ 222,910$ The notes to the financial statements are an integral part of this statement. Special Revenue Capital Projects City of Iowa City, Iowa Balance Sheet Governmental Funds June 30, 2024 (amounts expressed in thousands) 34 Total governmental fund balances 135,558$ Amounts reported for governmental activities in the statement of net position are different because: Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position.66,494 Other long-term assets are not available to pay for current period expenditures and therefore are unavailable in the funds: Grants and other receivables - Earned but unavailable.3,426 Capital assets used in governmental activities are not current financial resources and therefore are not reported in the funds. 272,035 Pension and OPEB related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period and therefore are not reported in the funds. Deferred outflows of resources 12,587$ Deferred inflows of resources (2,656) 9,931 Net pension liabilities are not due and payable in the current period and therefore are not reported in the funds.(33,728) Accrued compensated absences are not due and payable in the current period and therefore are not reported in the funds.(2,487) Accrued post employment benefit liabilities are not due and payable in the current period and therefore are not reported in the funds.(6,408) Subscription liabilities are not due and payable in the current period and therefore are not reported in the funds.(196) Bonds payable are not due and payable in the current period and therefore are not reported in the funds.(66,382) Notes payable are not due and payable in the current period and therefore are not reported in the funds.(211) Accrued interest on bonds (189) Internal balance due to integration of internal service funds (26,229) Total net position of governmental activities 351,614$ The notes to the financial statements are an integral part of this statement. (amounts expressed in thousands) City of Iowa City, Iowa Reconciliation of the Balance Sheet of the Governmental Funds to the Statement of Net Position June 30, 2024 35 Bridge, Other Street, and Shared Traffic Other Revenue and Employee Other Control Debt Governmental General Grants Benefits Construction Construction Service Funds Total Revenues Taxes 43,649$ 845$ 14,134$ -$ -$ 10,808$ 4,917$ 74,353$ Licenses and permits 3,036 - - - - - - 3,036 Intergovernmental 4,750 22,210 346 97 908 261 1,555 30,127 Charges for services 1,201 76 384 85 219 - - 1,965 Fines and forfeits 392 - - - - - - 392 Use of money and property 2,997 1,283 - 854 634 594 171 6,533 Miscellaneous 2,260 114 1 122 292 - 270 3,059 Total revenues 58,285 24,528 14,865 1,158 2,053 11,663 6,913 119,465 Expenditures Current: Public safety 27,819 - 1,136 78 - - - 29,033 Public works 2,844 7,012 - 172 2,103 - - 12,131 Culture and recreation 15,888 - - 1,104 - - - 16,992 Community and economic development 4,605 2,473 - 79 - - 5,056 12,213 General government 8,921 485 604 62 - 36 - 10,108 Debt service: Principal 95 - - - - 11,030 - 11,125 Interest 6 - - - - 2,156 - 2,162 Capital outlay 1,835 295 - 4,335 7,650 - - 14,115 Total expenditures 62,013 10,265 1,740 5,830 9,753 13,222 5,056 107,879 Excess (deficiency) of revenues over (under) expenditures (3,728) 14,263 13,125 (4,672) (7,700) (1,559) 1,857 11,586 Other Financing Sources (Uses) Issuance of debt 90 - - 424 9,686 30 - 10,230 Sale of capital assets 211 - - - - - - 211 Premiums on issuance of bonds - - - 30 688 2 - 720 Transfers in 23,252 1,664 1 2,339 3,664 1,709 583 33,212 Transfers out (8,416) (14,706) (13,837) - (4,992) - (1,734) (43,685) Total other financing sources and (uses)15,137 (13,042) (13,836) 2,793 9,046 1,741 (1,151) 688 Net change in fund balances 11,409 1,221 (711) (1,879) 1,346 182 706 12,274 Fund Balances, Beginning 62,036 16,135 4,288 13,928 15,362 7,426 4,109 123,284 Fund Balances, Ending 73,445$ 17,356$ 3,577$ 12,049$ 16,708$ 7,608$ 4,815$ 135,558$ The notes to the financial statements are an integral part of this statement. Special Revenue Capital Projects City of Iowa City, Iowa Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2024 (amounts expressed in thousands) 36 Net change in fund balances - total governmental funds 12,274$ Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the asset. Capital outlays and contributed capital assets exceeded depreciation expense in the current year as follows: Expenditures for capital assets 13,305$ New IT subscription asset, financed 90 Capital assets contributed 371 Depreciation/amortization expense (8,861) 4,905 Bond proceeds are reported as other financing sources in governmental funds and thus contribute to the change in fund balance. In the statement of net position, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds but reduces the liability in the statement of net position. Debt issued (10,230) Premium on bonds issued (720) Subscription issued (90) Repayments of subscription liability 95 Repayments of debt 11,030 Amortization of premium 547 632 Because some revenues will not be collected for several months after the City's year end, they are not considered available revenues in the governmental funds.(111) Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds: Change in accrued compensated absences 23 Pension expense 1,064 Change in accrued post employment benefit liability (405) Change in accrued interest on debt (9) In the statement of activities, only the gain on the sale of the capital assets is recognized, whereas in the governmental funds, the proceeds from the sale increased financial resources. Thus, the change in net position differs from the change in fund balance by the cost of the capital asset sold.(162) Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities.5,166 Change in net position of governmental activities 23,377$ The notes to the financial statements are an integral part of this statement. (amounts expressed in thousands) For the Year Ended June 30, 2024 City of Iowa City, Iowa Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 37 Governmental Activities - Other Internal Wastewater Housing Enterprise Service Transit Treatment Water Sanitation Stormwater Authority Funds Total Funds Assets Current assets: Equity in pooled cash and investments 11,766$ 27,494$ 15,350$ 16,415$ 3,675$ 5,759$ 4,025$ 84,484$ 51,207$ Receivables (net of allowance for uncollectibles): Accounts and unbilled usage 38 1,614 1,306 1,200 209 52 75 4,494 179 Interest 92 206 125 208 25 82 33 771 315 Notes - - - - - 307 - 307 - Lease 132 - - 17 - - 127 276 20 Due from other governments 4,744 - - 25 - 99 776 5,644 17 Inventories 559 - 362 - - - - 921 670 Total current assets 17,331 29,314 17,143 17,865 3,909 6,299 5,036 96,897 52,408 Noncurrent assets: Restricted assets: Equity in pooled cash and investments 6 2 3,960 14,586 - 2,992 313 21,859 - Advances to other funds - - - 3,629 - - - 3,629 - Lease receivable 1,222 - - 234 - - 535 1,991 - Capital assets: Land 2,630 1,399 6,296 2,264 2,264 620 15,484 30,957 685 Buildings 15,399 36,801 24,019 5,402 - 7,427 48,122 137,170 1,553 Improvements other than buildings - 7,802 2,721 587 - 34 811 11,955 50 Machinery and equipment 15,647 15,056 11,844 302 27 72 998 43,946 28,728 Infrastructure 431 165,300 76,922 20,123 76,420 - 18,687 357,883 3,634 Accumulated depreciation (17,042) (106,768) (52,186) (21,625) (23,370) (5,750) (42,499) (269,240) (17,870) IT subscriptions 128 - 78 - - - 349 555 651 Accumulated amortization (16) - (26) - - - (116) (158) (534) Construction in progress 452 6,788 5,865 6,066 4,427 34 874 24,506 1,330 Total noncurrent assets 18,857 126,380 79,493 31,568 59,768 5,429 43,558 365,053 18,227 Total assets 36,188 155,694 96,636 49,433 63,677 11,728 48,594 461,950 70,635 Deferred Outflows of Resources Pension related deferred outflows 701 365 431 513 39 160 274 2,483 407 OPEB related deferred outflows 161 70 99 105 5 43 64 547 66 Total deferred outflows of resources 862 435 530 618 44 203 338 3,030 473 Liabilities Current liabilities: Accounts payable 1,182 238 269 203 115 59 146 2,212 485 Contracts payable 1 1,087 322 378 146 - 670 2,604 - Accrued liabilities 87 47 60 68 5 25 37 329 2,449 Employee vested benefits 181 73 78 111 6 21 81 551 79 Subscription liability 31 - 26 - - - - 57 59 Due to other funds - - - - - - 126 126 - Due to other governments - 1 66 6 - 1 - 74 - Unearned revenue - - - - - 80 - 80 - Interest payable - - 20 - - - - 20 - Bonded debt payable (net of unamortized premium and discounts)- - 1,360 - - - - 1,360 - Total current liabilities 1,482 1,446 2,201 766 272 186 1,060 7,413 3,072 Noncurrent liabilities: Liabilities payable from restricted assets: Deposits 4 - 1,157 10 - 1,577 9 2,757 - Advances from other funds - - - - - - 1,010 1,010 - Employee vested benefits 89 46 47 81 4 16 48 331 60 Subscription liability 64 - 31 - - - - 95 - Capital loan notes payable - 788 - - - - - 788 - Bonded debt payable (net of unamortized premium and discounts)- - 560 - - - - 560 - Net pension liability 1,803 944 1,070 1,308 101 383 694 6,303 1,039 Other post employment benefits liability 820 355 506 533 27 219 328 2,788 328 Landfill closure/postclosure liability - - - 15,858 - - - 15,858 - Total noncurrent liabilities 2,780 2,133 3,371 17,790 132 2,195 2,089 30,490 1,427 Total liabilities 4,262 3,579 5,572 18,556 404 2,381 3,149 37,903 4,499 Deferred Inflows of Resources Lease related deferred inflows 1,355 - - 250 - - 662 2,267 20 Pension related deferred inflows 22 11 13 16 1 5 9 77 12 OPEB related deferred inflows 209 90 129 136 7 56 83 710 83 Deferred amount on refunding - - 23 - - - - 23 - Total deferred inflow of resources 1,586 101 165 402 8 61 754 3,077 115 Net Position Net investment in capital assets 17,533 124,503 73,211 12,741 59,622 2,437 42,040 332,087 18,168 Restricted by bond ordinance - - 2,769 - - - - 2,769 - Restricted by state statute - - - 710 - - - 710 - Restricted for future improvements - - - - - - 404 404 - Restricted by grant agreement - - - - - 1,409 - 1,409 - Unrestricted 13,669 27,946 15,449 17,642 3,687 5,643 2,585 86,621 48,326 Total net position 31,202$ 152,449$ 91,429$ 31,093$ 63,309$ 9,489$ 45,029$ 424,000$ 66,494$ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.26,229 Net position of business-type activities 450,229$ The notes to the financial statements are an integral part of this statement. Business-type Activities - Enterprise Funds City of Iowa City, Iowa Statement of Net Position Proprietary Funds June 30, 2024 (amounts expressed in thousands) 38 Governmental Activities - Other Internal Wastewater Housing Enterprise Service Transit Treatment Water Sanitation Stormwater Authority Funds Total Funds Operating Revenues: Charges for services 832$ 12,795$ 10,997$ 12,751$ 1,886$ 350$ 5,740$ 45,351$ 25,880$ Miscellaneous 67 112 834 83 17 47 45 1,205 - Total operating revenues 899 12,907 11,831 12,834 1,903 397 5,785 46,556 25,880 Operating Expenses: Personal services 5,125 3,558 4,031 4,330 349 1,245 2,546 21,184 2,872 Commodities 1,521 1,768 2,159 303 29 101 600 6,481 3,008 Services and charges 2,971 3,368 2,706 8,546 251 11,737 2,308 31,887 13,537 9,617 8,694 8,896 13,179 629 13,083 5,454 59,552 19,417 Depreciation & Amortization 1,165 4,324 2,327 592 1,519 233 2,364 12,524 2,650 Total operating expenses 10,782 13,018 11,223 13,771 2,148 13,316 7,818 72,076 22,067 Operating income (loss)(9,883) (111) 608 (937) (245) (12,919) (2,033) (25,520) 3,813 Nonoperating Revenues (Expenses): Gain (loss) on disposal of capital assets - 2 21 - - - - 23 207 Operating grants 5,548 - - - - 13,297 117 18,962 - Lease revenue 126 - - 16 - - 115 257 20 Interest income 718 1,246 997 1,574 138 351 229 5,253 2,362 Interest expense - - - - - - - - (3) Total nonoperating revenues (expenses)6,392 1,248 1,018 1,590 138 13,648 461 24,495 2,586 Income (loss) before capital contributions and transfers (3,491) 1,137 1,626 653 (107) 729 (1,572) (1,025) 6,399 Capital contributions - 360 266 - 186 - 650 1,462 - Transfers in 4,253 328 3,467 93 1,745 30 278 10,194 499 Transfers out - (47) - (28) (32) (38) (75) (220) - Change in net position 762 1,778 5,359 718 1,792 721 (719) 10,411 6,898 Net Position, Beginning 30,440 150,671 86,070 30,375 61,517 8,768 45,748 59,596 Net Position, Ending 31,202$ 152,449$ 91,429$ 31,093$ 63,309$ 9,489$ 45,029$ 66,494$ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 1,732 Change in net position of business-type activities 12,143$ The notes to the financial statements are an integral part of this statement. Business-type Activities - Enterprise Funds City of Iowa City, Iowa Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds For the Year Ended June 30, 2024 (amounts expressed in thousands) 39 Governmental Activities - Other Internal Wastewater Housing Enterprise Service Transit Treatment Water Sanitation Stormwater Authority Funds Total Funds Cash Flows From Operating Activities Receipts from customers and users 973$ 12,822$ 11,835$ 12,657$ 1,881$ 681$ 5,779$ 46,628$ -$ Receipts from users - - - - - - - - 25,893 Payments to suppliers (4,655) (5,214) (4,918) (5,979) (176) (11,834) (3,583) (36,359) (17,355) Payments to employees (5,152) (3,633) (4,189) (4,424) (363) (1,249) (2,496) (21,506) (2,979) Net cash flows from (used for) operating activities (8,834) 3,975 2,728 2,254 1,342 (12,402) (300) (11,237) 5,559 Cash Flows From Noncapital Financing Activities Grants received 5,189 61 13 81 - 13,403 120 18,867 - Transfers from other funds 4,253 58 577 93 6 30 278 5,295 499 Transfers to other funds - (47) - (28) (32) (38) (75) (220) - Repayment/(payment) of notes receivable - - - - - 10 - 10 - Repayment/(payment) of advances from other funds - - - 570 - - (464) 106 - Net cash flows from (used for) noncapital financing activities 9,442 72 590 716 (26) 13,405 (141) 24,058 499 Cash Flows From Capital and Related Financing Activities Capital grants received - - - - - - 315 315 - Lease revenues received 126 - - 16 - - 115 257 20 Acquisition and construction of property and equipment (166) (5,662) (559) (4,443) (302) (35) (573) (11,740) (3,291) Proceeds from sale of property - 2 21 - - - - 23 234 Proceeds from issuance of capital loan note - 788 - - - - - 788 - Principal paid on subscription liability (33) - (21) - - - - (54) (57) Interest paid on subscription liability - - - - - - - - (3) Principal paid on bonded debt - - (1,747) - - - - (1,747) - Interest paid on bonded debt - - (51) - - - - (51) - Net cash flows from (used for) capital and related financing activities (73) (4,872) (2,357) (4,427) (302) (35) (143) (12,209) (3,097) Cash Flows From Investing Activities Interest on investments 667 1,132 917 1,467 122 312 212 4,829 2,187 Net increase (decrease) in cash and cash equivalents 1,202 307 1,878 10 1,136 1,280 (372) 5,441 5,148 Cash and Cash Equivalents, Beginning 10,570 27,189 17,432 30,991 2,539 7,471 4,710 100,902 46,059 Cash and Cash Equivalents, Ending 11,772$ 27,496$ 19,310$ 31,001$ 3,675$ 8,751$ 4,338$ #######51,207$ Reconciliation of operating income (loss) to net cash flows from (used for) operating activities: Operating income (loss)(9,883)$ (111)$ 608$ (937)$ (245)$ (12,919)$ (2,033)$ (25,520)$ 3,813$ Adjustments to reconcile operating income (loss) to net cash flows from (used for) operating activities: Depreciation/amortization expense 1,165 4,324 2,327 592 1,519 233 2,364 12,524 2,650 Changes in: Receivables: Accounts and unbilled usage 36 (85) (5) (210) (22) (4) (4) (294) (51) Due from other governments 37 - - 30 - - (3) 64 64 Inventories (36) - 46 - - - - 10 (39) Accounts payable (127) (79) (96) (13) 104 4 (675) (882) (100) Accrued liabilities 23 12 19 18 1 9 10 92 (657) Employee vested benefits 48 6 1 1 (3) (5) 16 64 20 Due to other governments - 1 (3) 3 - - - 1 - Unearned revenue - - - - - 26 - 26 - Deposits 1 - 9 3 - 262 1 276 - Net pension liability 290 155 127 202 14 29 167 984 182 Deferred outflows of resources (315) (154) (191) (227) (16) (88) (130) (1,121) (170) Deferred inflows of resources (171) (101) (130) (131) (11) (26) (57) (627) (120) Other post employment benefits liability 98 7 16 43 1 77 44 286 (33) Landfill closure/postclosure liability - - - 2,880 - - - 2,880 - Total adjustments 1,049 4,086 2,120 3,191 1,587 517 1,733 14,283 1,746 Net cash flows from (used for) operating activities (8,834)$ 3,975$ 2,728$ 2,254$ 1,342$ (12,402)$ (300)$ (11,237)$ 5,559$ Noncash Investing, Capital, and Financing Activities: Contributions of capital assets from government and others -$ 630$ 3,156$ -$ 1,925$ -$ -$ 5,711$ -$ Capital grants not yet received -$ -$ -$ -$ -$ -$ 649$ 649$ -$ Operating grants not yet received 4,740$ -$ -$ -$ -$ 99$ 120$ 4,959$ -$ Subscription asset financed 128$ -$ 78$ -$ -$ -$ -$ 206$ -$ The notes to the financial statements are an integral part of this statement. Business-type Activities - Enterprise Funds City of Iowa City, Iowa Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2024 (amounts expressed in thousands) 40 Project Green Assets Equity in pooled cash and investments 80$ Interest receivable 1 Total assets 81 Liabilities Accounts payable 1 Total liabilities 1 Net Position Restricted for an organization 80$ The notes to the financial statements are an integral part of this statement. June 30, 2024 (amounts expressed in thousands) City of Iowa City, Iowa Statement of Fiduciary Net Position Custodial Fund 41 Project Green Additions: Contributions 37$ Interest 4 Total additions 41 Deductions: Services and charges 26 Total deductions 26 Change in net position 15 Net Position, Beginning 65 Net Position, Ending 80$ The notes to the financial statements are an integral part of this statement. City of Iowa City, Iowa Statement of Changes in Fiduciary Net Position Custodial Fund For the Year Ended June 30, 2024 (amounts expressed in thousands) 42 City of Iowa City, Iowa Notes to Financial Statements June 30, 2024 1. Accounting Policies The City of Iowa City, Iowa, (the City) was incorporated April 6, 1853, and operates under the Council/Manager form of government. The City provides a broad range of services to its citizens including general government, public safety, streets, parks, and cultural facilities. It also operates an airport, a mass transportation system, parking facilities, water treatment, wastewater treatment, storm water collection, sanitation collection and disposal (including landfill operations) and a housing authority. The financial statements of the City have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant accounting policies of the City are described below. The Reporting Entity For financial reporting purposes, the City includes all of its funds, organizations, agencies, boards, commissions, and authorities. The City has also considered all potential component units for which it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City’s financial statements to be misleading or incomplete. The Governmental Accounting Standards Board has set forth criteria to be considered in determining financial accountability. These criteria include appointing a voting majority of an organization’s governing body, and (1) the ability of the City to impose its will on that organization or (2) the potential for the organization to provide specific benefits to or impose specific financial burdens on the City. There were no component units required to be included. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the non-fiduciary activities of the primary government. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The Statement of Net Position presents the City’s nonfiduciary assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference reported as net position. Net position is reported in the following categories: Net investment in capital assets consists of capital assets, net of accumulated depreciation/amortization and reduced by outstanding balances for bonds, notes and other debt attributable to the acquisition, construction, or improvement of those assets. Restricted net position results when constraints placed on net position use are either externally imposed or are imposed by law through constitutional provisions or enabling legislation. Unrestricted net position consists of net position not meeting the definition of the preceding categories. Unrestricted net position is often subject to constraints imposed by management which can be removed or modified. 43 The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported as general revenues. As a general rule, the effect of inter-fund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the City’s water and sewer function and various other functions of the government. Eliminations of these charges would distort the direct costs and program revenues reported for the various functions concerned. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Description of Funds These financial statements include all funds owned or administered by the City or for which the City acts as custodian. The accounts of the City are organized on the basis of funds, each of which is considered to be a separate accounting entity. The fund categories are governmental, proprietary, and fiduciary. Each fund is accounted for by providing a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position, revenues, and expenditures or expenses, as appropriate. The individual funds account for the governmental resources allocated to them for the purpose of carrying on specific activities in accordance with laws, regulations, or other restrictions. Basis of Accounting The accounting and financial reporting treatment applied to a fund is determined by its “measurement focus.” The government-wide financial statements, proprietary funds, and custodial funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under the accrual method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. All governmental funds are accounted for using a current financial resources measurement focus, which generally includes only current assets and current liabilities on the balance sheet. The modified accrual basis of accounting is used for these funds. Under the modified accrual basis, revenue is recognized when susceptible to accrual, which is in the period in which it becomes both available (collectible within the current period or soon thereafter to be used to pay liabilities of the current period) and measurable (the amount of the transaction can be determined). Revenue accrued includes property taxes, intergovernmental revenue, and interest earned on investments (if they are collected within 60 days after the year-end). Expenditures are recorded when the related fund liability is incurred. Principal and interest on long-term debt, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. The City reports the following major governmental funds: The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Other Shared Revenue and Grants Fund is used to account for revenue from various sources, primarily road use tax monies from the State of Iowa and reimbursable programs funded by federal and state grants. 44 The Employee Benefits Fund is used to account for the employee benefits related to those employees who are paid through governmental fund types, which are funded by a separate property tax levy. The Other Construction Fund accounts for the construction or replacement of other City general capital assets, such as administrative buildings with various funding sources, including general obligation bonds, intergovernmental revenues, and contributions. The Bridge, Street, and Traffic Control Construction Fund accounts for the construction or replacement of infrastructure capital assets, such as streets, bridges, dams, sidewalks, and lighting system. The Debt Service Fund accounts for the accumulation of resources for the payment of general long- term debt principal, interest, and related costs. The City reports the following major proprietary funds: The Transit Fund is used to account for the operation and maintenance of the public transportation system. The Wastewater Treatment Fund is used to account for the operation and maintenance of the wastewater treatment facility and sanitary sewer system. The Water Fund is used to account for the operation and maintenance of the water system. The Sanitation Fund is used to account for the operation and maintenance of the solid waste collection system and landfill. The Stormwater Fund is used to account for the operation and maintenance of the stormwater utility system. The Housing Authority Fund is used to account for the operations and activities of the City’s low and moderate income housing assistance and public housing programs. The City has two nonmajor enterprise funds, the Airport Fund is used to account for the operation and maintenance of the airport facility and the Parking Fund is used to account for the operation and maintenance of the “on” and “off” street public parking facilities. Additionally, the City reports internal service funds to account for goods and services provided by one department to other City departments on a cost reimbursement basis. The funds in this category are the Equipment Maintenance Fund, Central Services Fund, Loss Reserve Fund, and the Information Technology Fund. The City also reports a custodial fund account for monies held for Project Green, a local 501(c)(3) not-for- profit agency. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds and of the City’s internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed. 45 Uses of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue, expenditures and expenses, as appropriate, during the reporting period. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of other postemployment benefit obligation, net pension liability, landfill closure and post-closure care costs, total capacity of the landfill at closure, and calculation of the costs of claims incurred, but not reported. Cash and Investments The City maintains one primary demand deposit account through which the majority of its cash resources are processed. Substantially all investment activity is carried on by the City in an investment pool, except for those funds required to maintain their investments separately. The earnings on the pooled investments are allocated to the funds on a systematic basis. All investments are stated at fair value except for the Iowa Public Agency Investment Trust (IPAIT) which is valued at amortized cost pursuant to Rule 2a-7 under the Investment Company Act of 1940. For the purpose of the Statement of Cash Flows, restricted and non-restricted investments with a maturity of three months or less when purchased are considered cash equivalents. Receivables and Revenue Recognition Property tax receivable is recognized in governmental funds on the levy or lien date, which is the date that the tax asking is certified by the City to the County Board of Supervisors. Current year delinquent property tax receivable represents unpaid taxes from the current year. The succeeding year property tax receivable represents taxes certified by the City to be collected in the next fiscal year for the purposes set out in the budget for the next fiscal year. By statute, the City is required to certify its budget to the County Auditor by March 31 of each year for the subsequent fiscal year. However, by statute, the tax asking and budget certification for the following fiscal year becomes effective on the first day of that year. Although the succeeding year property tax receivable has been recorded, it will not be recognized as revenue until the year for which it is levied. Federal and state grants are recorded as receivables and the revenue is recognized during the period in which the City fulfills the requirements for receiving the grant awards, as long as the susceptible to accrual criteria are met. Income from investments in all fund types and from charges for services in proprietary fund types is recognized when earned. Licenses and permits, fines and forfeitures, fees and refunds, charges for services (in governmental fund types), miscellaneous, and other revenues are recorded as revenue when received in cash because they are generally not measurable until actually received. Inventories Inventories are recognized only in those funds in which they are material to the extent of affecting operations. For the City, these are the Other Shared Revenue and Grants Fund, Transit Fund, Water Fund, and the Equipment Maintenance Fund. Inventories of materials and supplies are determined by actual count and priced on the FIFO method in the Other Shared Revenue and Grants Fund and the average cost method for the Transit, Water and Equipment Maintenance Fund. Leases The City is a lessor for several noncancellable leases of City property. The City recognizes lease receivables and deferred inflows of resources at the commencement of the lease term in the governmental 46 activities, the business type activities, governmental, business type, and internal service fund financial statements. As lessor, the assets underlying the lease are not derecognized. At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term. Key estimates and judgments include how the City determines the discount rate it uses to discount the expected lease receipts to present value, lease term and lease receipts. The City uses its most recent borrowing rate as the discount rate for leases. The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee. The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable. Subscription-Based Information Technology Arrangements (SBITA) The City has entered into contracts that convey control of the right to use information technology software. The City has recognized subscription liabilities and intangible right-to-use IT subscription assets in the government-wide financial statements, and in the proprietary fund financial statements. At the commencement of the IT subscription term, the City initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the IT subscription liability is reduced by the principal portion of payments made. The right-to-use IT subscription asset is initially measured as the sum of the initial IT subscription liability, adjusted for payments made at or before the commencement date, plus capitalization implementation costs less any incentives received from the SBITA vendor at or before the commencement of the subscription term. Subsequently, the right-to-use IT subscription asset is amortized on a straight-line basis over its useful life. Key estimates and judgments related to IT subscription arrangements include how the City determines the discount rate it uses to discount the expected payments to present value, term and payments. The City uses its most recent borrowing rate as the discount rate. The IT subscription term includes the noncancellable period of the subscription. Payments included in the measurement of the liability are composed of fixed payments. The City monitors changes in circumstances that would require a remeasurement of its IT subscription and will remeasure the right-to-use IT subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability. Right-to-use IT subscription assets are reported with other capital assets and IT subscription liabilities are reported with long-term debt on the statement of net position. Capital Assets Capital assets, which include property, buildings, equipment, and infrastructure assets (e.g., roads, bridges, water mains, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. The City follows the policy of not requiring 47 capitalization of an asset with an initial, individual cost of less than $50,000 for infrastructure, $25,000 for buildings and improvements, and $5,000 for equipment assets. Such assets are recorded at original purchase cost or at acquisition value at the date of donation when received as donated properties. Depreciation is computed using the straight-line method over the following estimated useful lives: Infrastructure 3 – 100 years Buildings and structures 20 – 50 years Improvements other than buildings 10 – 50 years Vehicles 2 – 20 years Other equipment 3 – 30 years Deferred Outflows of Resources Deferred outflows of resources represent a consumption of net assets that applies to a future period(s) and will not be recognized as an outflow of resources (expense/expenditure) until then. Deferred outflows of resources consist of unrecognized items not yet charged to pension and OPEB expense and contributions from the employer after the measurement date but before the end of the employer’s reporting period. Bond Premiums and Discounts Debt issued at a premium or discount is recorded net of the unamortized premium or discount. In the governmental funds, premiums and discounts are recorded entirely as other financing sources or uses in the year of issuance. In the proprietary funds and the government-wide statements, they are amortized over the life of the bonds. Compensated Absences Permanent City employees accumulate vacation and sick leave hours for subsequent use or for payment upon death, resignation, or retirement. The City pays its employees (except firefighters) one-half of the accumulated sick leave at the time of termination on the basis of the employee’s then effective hourly base salary, provided that the dollar amount of the payment may be up to, but not exceed, the amount that an employee would be paid if the employee had terminated on June 28, 1985. Employees hired on or after June 29, 1985, are not eligible for payment of accumulated sick leave upon termination, death, or retirement. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Iowa Public Employees’ Retirement System and the Municipal Fire and Police Retirement System (Systems’) and additions to/deductions from the Systems’ fiduciary net position have been determined on the same basis as they are reported by the Systems. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Landfill Closing Costs Costs expected to be incurred in ultimately closing the present landfill site are being systematically provided for through charges to expense over the estimated useful life of the landfill on the basis of capacity used (see Note 8). Deferred Inflows of Resources Deferred inflows of resources represent an acquisition of net assets that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. Although certain revenues are measurable, they are not available. Available means collected within the current year or expected to be collected soon enough thereafter to be used to pay liabilities of the current year. Deferred inflows of 48 resources in the governmental fund financial statements represent the amount of assets that have been recognized, but the related revenue has not been recognized since the assets are not collected within the current year or expected to be collected soon enough thereafter to be used to pay liabilities of the current year. The lease related deferred inflows is the unamortized portion of the lease receivable. Deferred inflows of resources consist of property tax receivable, lease related deferred inflows, grants receivable and other receivables. Deferred inflows of resources in the Statement of Net Position consist of succeeding year property tax receivable that will not be recognized as revenue until the year for which they are levied, the difference in the carrying value of refunded debt and it’s acquisition price, lease related deferred inflows, and the unamortized portion of pension and OPEB related items. Budgetary and Legal Appropriation and Amendment Policies The City prepares and adopts an annual function budget, as prescribed by Iowa statutes, for all funds except internal service and custodial funds. This is formalized in a separate budgetary report, the Financial Plan. This budget is adopted on or before April 30 of each year to become effective July 1 and constitutes the City’s appropriation for each program and purpose specified therein until amended. The adopted budget must include the following: a. Expenditures for each function: Public safety Public works Health and social services Culture and recreation Community and economic development General government Debt service Capital projects Business-type/enterprise b. The amount to be raised by property taxation c. Income from sources other than property taxation d. Transfers in and transfers out The legal level of control (the level at which expenditures may not legally exceed appropriations) is the function level for all funds combined, rather than at the individual fund level. Management can transfer appropriations within a function, within a fund type, and between fund types, without the approval of the governing body so long as the total budget by function area will not be exceeded. It is necessary, therefore, to aggregate the expenditures of the budgeted activities within the governmental fund types with the expenditures of the budgeted activities within the enterprise funds on a function basis, and to compare such function totals to function budgeted totals in order to demonstrate legal compliance with the budget. The City’s budget for revenue focuses on aggregated totals by revenue source. The City formally adopts budgets for several funds that are not required by state law to be included in the annual function budget. Annual operating budgets are adopted for the internal service funds for management control purposes. Such budgets, however, are not legally required to be adopted under state statutes. A City budget for the current fiscal year may be amended for any of the following purposes as prescribed by Iowa statute: a. To permit the appropriation and expenditure of unexpended, unencumbered cash balances on hand at the end of the preceding fiscal year. b. To permit the appropriation and expenditure of amounts anticipated being available from sources other than property taxation. c. To permit transfers between funds. d. To permit transfers between functions. 49 A budget amendment must be prepared and adopted in the same manner as the original budget. The City’s budget was amended as prescribed, and the effects of those amendments are shown in the accompanying budgetary comparison schedule. The original budget was increased by $35,049,504 in revenues and other financing sources and by $112,860,046 in expenditures and other financing uses. Appropriations, as adopted or amended, lapse at the end of the fiscal year. As allowed by GASB Statement No. 41, Budgetary Comparison Schedules – Perspective Differences, the City presents budgetary comparison schedules as required supplementary information based on the program structure of nine functional areas as required by state statute for its legally adopted budget. Restricted Assets Assets within the individual funds, which can be designated by the City Council for any use within the fund’s purpose, are considered to be unrestricted assets. Assets, which are restricted for specific uses by bonded debt requirements, grant provisions, or other requirements, are classified as restricted assets. Liabilities, which are payable from restricted assets, are classified as such. Classification of Fund Balances Fund balances for the governmental funds are reported in classifications based on the nature of any limitations requiring the use of resources for specific purposes (see Note 9). Net Position Net position represents the difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources. Net investment in capital assets consists of capital assets, net of accumulated depreciation and amortization, reduced by the outstanding balances of any borrowings used for the acquisition, construction, or improvement of those assets. Net investment in capital assets excludes unspent bond proceeds. As of June 30, 2024, there were unspent bond proceeds totaling $18,934,567 in governmental activities. Net position is reported as restricted when there are limitations imposed on its use through enabling legislation or through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. Net position restricted through enabling legislation consists of $3,953,000 for employee benefits, $19,024,000 for capital projects, $7,419,000 debt service, $237,000 for police, $3,251,000 for grant agreements, and $10,432,000 for other purposes. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then unrestricted resources as they are needed. 2. Cash and Pooled Investments The City’s deposits in banks at June 30, 2024 were entirely covered or collateralized by federal depository insurance, national credit union administration, letters of credit held by the City or by the State Sinking Fund in accordance with Chapter 12C of the Code of Iowa. This chapter provides for additional assessments against the depositories to insure there will be no loss of public funds. The City is authorized by statute to invest public funds in obligations of the United States government, its agencies and instrumentalities; certificates of deposit or other evidences of deposit at federally insured Iowa depository institutions approved by City Council and secured pursuant to the limitations set forth in Chapter 12C of the Code of Iowa; prime eligible bankers acceptances; certain high rated commercial paper or other short-term corporate debt; perfected repurchase agreements; Iowa Public Agency Investment Trust (IPAIT); certain registered open–end management investment companies registered with the Securities & Exchange Commission under the federal Investment Company Act of 1940; and warrants or improvement certificates of a drainage district. 50 The City uses the fair value hierarchy established by generally accepted accounting principles based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets. Level 2 inputs are significant other observable inputs. Level 3 inputs are significant unobservable inputs. The recurring fair value measurement for the Federal Home Loan Mortgage Corporation securities of $1,940,740, the Federal Farm Credit Bank Note securities of $3,222,580, the Federal National Mortgage Association securities of $3,441,160 and the Federal Home Loan Bank securities of $16,996,400 determined using the last reported sales price at current exchange rates (Level 1 inputs). The City had no other investments meeting the disclosure requirements of Governmental Accounting Standards Board Statement No. 72. In addition, the City had investments in the Iowa Public Agency Investment Trust (IPAIT), which are valued at an amortized cost of $21,843,943, which approximates fair value. The Diversified Portfolio consists of cash and short-term investments valued at amortized cost, which approximates fair value, pursuant to Governmental Accounting Standards Board Statement No. 79. The Iowa Public Agency Investment Trust (IPAIT) represents an investment in a pool managed by others. IPAIT is a common trust established under Iowa law pursuant to Iowa Code Chapter 28E in 1987 to enable eligible Iowa public agencies to safely and effectively invest their available operating and reserve funds. IPAIT is registered under the Investment Company Act of 1940. The IPAIT portfolios have followed established money market mutual fund investment parameters designed to maintain a $1 per unit net asset value since inception and were registered with the Securities and Exchange Commission (SEC). Interest rate risk - The City’s investment policy limits the investment of operating funds to investments that mature within 397 days. The portion of operating funds in excess of 33% of operating funds may be invested in certificates of deposit which mature within 63 months or less. Funds not identified as operating funds may be invested in instruments with maturities longer than 397 days. Credit risk. State law limits investments to commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations. It is the City’s policy to comply with rating restrictions. The investment in Iowa Public Agency Investment Trust is not rated by Moody’s Investors service as it is a state security that is backed by the full faith and credit of the issuing government and is not subject to credit risk. Concentration of credit risk. The City investment policy limits the amount that may be invested in any one issuer to a maximum amount approved by the City Council. Due to legal and budgetary reasons, the General Fund is assigned a portion of the investment earnings associated with other funds. These funds are the Employee Benefits, Other Shared Revenue and Grants, and Sanitation funds. At June 30, 2024 the City of Iowa City had the following investments: Fair Investment Value Maturities Federal Home Loan Mortgage Corporation Notes 1,940,740$ February 2025 Federal Farm Credit Bank Notes 3,222,580 December 2024 to September 2040 Federal National Mortgage Association 3,441,160 December 2027 to June 2029 Federal Home Loan Bank 16,996,400 August 2024 to January 2027 25,600,880$ 51 3. Interfund Balances and Transfers Interfund transfers for the year ended June 30, 2024, consisted of the following: Transfers are used to move revenues and bond proceeds from the fund that State statutes or the budget requires to collect them to the fund that the State statutes or the budget requires to expend them. Capital Projects Bridge, Street Other and Traffic Shared Revenue Employee Control Nonmajor General and Grants Benefits Construction Governmental Transfer to: General -$ 9,996,846$ 13,172,408$ -$ 44,682$ Other Shared Revenue and Grants 1,000,000 - 664,334 - - Employee Benefits - 1,274 - - - Debt Service 20,468 - - - 1,688,092 Capital Projects Other Construction 2,028,489 309,344 - - 1,046 Capital Projects Bridge, Street and Traffic Control Construction 418,753 3,245,000 - - - Nonma jor Governmental 231,623 351,698 - - - Transit 4,058,874 119,540 - - - Wastewater Treatment 2,263 55,573 - 269,886 - Water 502,103 74,677 - 2,890,401 - Sanitation/Landfill 5,966 86,833 - - - Stormwater 1,195 4,631 - 1,738,807 - Housing Authority - 30,102 - - - Nonmajor Enterprise 106,500 171,029 - - - Internal Service 40,176 259,249 - 93,219 - Total Transfer to 8,416,410$ 14,705,796$ 13,836,742$ 4,992,313$ 1,733,820$ Transfer from 52 Wastewater Housing Nonmajor Total Treatment Sanitation Stormwater Authority Enterprise Transfer from -$ -$ -$ 38,193$ -$ 23,252,129$ - - - - - 1,664,334 - - - - - 1,274 - - - - - 1,708,560 - - - - - 2,338,879 - - - - - 3,663,753 - - - - - 583,321 - - - - 75,000 4,253,414 - - - - - 327,722 - - - - - 3,467,181 - - - - - 92,799 - - - - - 1,744,633 - - - - - 30,102 - - - - - 277,529 46,530 27,750 31,830 - - 498,754 46,530$ 27,750$ 31,830$ 38,193$ 75,000$ 43,904,384$ Transfer from 53 Interfund balances for the year ended June 30, 2024, consisted of the following: Due from General Due to: Nonmajor Governmental $ 84,558 Nonmajor Enterprise 126,390 Total $ 210,948 Interfund balances at June 30, 2024, include due to/from other funds, which represent amounts for negative cash balance funding. The $84,558 advance to Nonmajor Governmental Funds and the $126,390 advance to the Nonmajor Enterprise Funds are expected to be repaid within the next year. Advances from Debt Service Sanitation Total Advances to: Other Shared Revenue and Grants $ 17,585 $ - $ 17,585 Other Construction - 2,619,085 2,619,085 Nonmajor Enterprise - 1,010,419 1,010,419 Total $ 17,585 $ 3,629,504 $ 3,647,089 Interfund balances at June 30, 2024, include advances to/from other funds, which represent amounts for construction loans and a revenue bond redemption loan. All of the $17,585 advance to the Other Shared Revenue and Grants Fund is expected to be repaid within the next year. $2,424,110 of the $2,619,085 advance to the Other Construction Fund is not expected to be repaid within the next year. $715,579 of the $1,010,419 advance to the Nonmajor Enterprise Funds is not expected to be repaid within the next year. 54 4. Lease Receivable During the year ended June 30, 2024, the City recognized the following related to its non-regulated leases in which the maximum possible lease term is noncancelable by both the lessee and the lessor and is more than 12 months. The leases are not considered principal ongoing operations of the City. Governmental Activities: On October 6, 2015, the City entered into an agreement to lease building space in the Library building. The initial term of the lease was for a four-year term with an extension of an additional four-year term. The lease was amended in fiscal year 2024 to add another four-year term with another extension of an additional four years. The City believes it is more likely than not that the term will be for sixteen years. The monthly rent is $2,000. The City recognized $18,645 in lease revenue and $5,355 in interest revenue during the current fiscal year related to this lease. As of June 30, 2024, the City’s receivable for lease payments was $163,704. The City has a deferred inflow of resources associated with this lease of $163,704 that will be recognized as revenue over the lease term. On November 10, 2015, the City entered into an agreement to lease space for fiber. The initial term of the lease was for a ten-year term with no option of extension. The City believes it is more likely than not that the term will be for ten years. The annual rent is $20,793. The City recognized $19,569 in lease revenue and $1,224 in interest revenue during the current fiscal year related to this lease. As of June 30, 2024, the City’s receivable for lease payments was $20,171. The City has a deferred inflow of resources associated with this lease of $20,171 that will be recognized as revenue over the lease term. Business-type Activities: On August 16, 2012, the City entered into an agreement to lease building space in the Court Street Transportation Center. The initial term of the lease was for a three-year term with an extension of up to five additional three-year terms. The City believes it is more likely than not that the term will be for eighteen years. The monthly rent is $1,450. The City recognized $14,193 in lease revenue and $3,207 in interest revenue during the current fiscal year related to this lease. As of June 30, 2024, the City’s receivable for lease payments was $96,413. The City has a deferred inflow of resources associated with this lease of $96,413 that will be recognized as revenue over the lease term. On July 1, 2015, the City entered into an agreement to lease building space in the Court Street Transportation Center. The initial term of the lease was for a five-year term with an extension of an two additional five-year terms. The City believes it is more likely than not that the term will be for fifteen years. The monthly rent is $9,259. The City recognized $89,562 in lease revenue and $21,546 in interest revenue during the current fiscal year related to this lease. As of June 30, 2024, the City’s receivable for lease payments was $650,812. The City has a deferred inflow of resources associated with this lease of $650,812 that will be recognized as revenue over the lease term. On February 11, 2021, the City entered into an agreement to lease building space in the Court Street Transportation Center. The initial term of the lease was for a three-year term with an extension of up to four additional five-year terms. The City believes it is more likely than not that the term will be for fifteen years. The monthly rent is $3,445. The City recognized $22,261 in lease revenue and $19,079 in interest revenue during the current fiscal year related to this lease. As of June 30, 2024, the City’s receivable for lease payments was $607,350. The City has a deferred inflow of resources associated with this lease of $607,350 that will be recognized as revenue over the lease term. 55 On February 21, 2012, the City entered into an agreement to lease building at the East Side Recycling Center. The initial term of the lease was for a ten-year term with an extension of up to three additional five-year terms. The City believes it is more likely than not that the term will be for twenty-five years. The monthly rent is $1,677.58. The City recognized $13,444 in lease revenue and $6,687 in interest revenue during the current fiscal year related to this lease. As of June 30, 2024, the City’s receivable for lease payments was $209,778. The City has a deferred inflow of resources associated with this lease of $209,778 that will be recognized as revenue over the lease term. On February 21, 2012, the City entered into an agreement to lease building at the East Side Recycling Center. The initial term of the lease was for a ten-year term with an extension of up to three additional five-year terms. The City believes it is more likely than not that the term will be for twenty-five years. The monthly rent is $322.50. The City recognized $2,585 in lease revenue and $1,285 in interest revenue during the current fiscal year related to this lease. As of June 30, 2024, the City’s receivable for lease payments was $40,328. The City has a deferred inflow of resources associated with this lease of $40,328 that will be recognized as revenue over the lease term. The City has four leases for land use at and around the Airport that were entered into agreement between February 12, 1991 and November 1, 2018. The initial terms of the leases range between five and eighty years with two of the agreements having options to extend between five and ten years. The City believes it is more likely than not that the terms will be between ten and eighty years. The annual rent for all four of these leases is $17,284. The City recognized $11,407 in lease revenue and $5,877 in interest revenue during the current fiscal year related to these leases. As of June 30, 2024, the City’s receivable for lease payments was $202,567. The City has a deferred inflow of resources associated with these leases of $202,567 that will be recognized as revenue over the lease terms. The City has eight leases for hangar use at the Airport that were entered into agreement between April 12, 2012 and October 1, 2023. The initial terms of these leases range between one and thirty years with two of the leases having the option to renew up to another ten years. The City believes it is more likely than not that the terms will be between one and thirty years. The monthly rent for these leases total $11,915. The City recognized $103,602 in lease revenue and $14,309 in interest revenue during the current fiscal year related to these leases. As of June 30, 2024, the City’s receivable for lease payments was $459,133. The City has a deferred inflow of resources associated with these leases of $459,133 that will be recognized as revenue over the lease terms. 56 5. Capital Assets Capital asset activity for the year ended June 30, 2024, was as follows: Beginning July 1, 2023 Acquisitions and Transfers Disposals and Transfers Balance June 30, 2024 Governmental activities: Capital assets, not being depreciated: Land 32,542,100$ 72,382$ -$ 32,614,482$ Construction in progress 19,805,180 11,269,158 4,963,531 26,110,807 Total capital assets, not being depreciated 52,347,280 11,341,540 4,963,531 58,725,290 Capital assets, being depreciated: Buildings 68,730,625 1,035,194 9,600 69,756,219 Improvements other than buildings 8,193,976 253,989 480,805 7,967,160 Machinery and equipment 66,718,874 3,956,905 2,893,108 67,782,670 IT subscriptions 1,077,152 132,758 - 1,209,910 Infrastructure 226,537,977 5,207,414 123,243 231,622,149 Total capital assets being depreciated 371,258,605 10,586,261 3,506,756 378,338,108 Less accumulated depreciation/amortization for: Buildings 34,333,229 1,752,313 9,600 36,075,941 Improvements other than buildings 5,097,302 246,754 348,214 4,995,842 Machinery and equipment 30,776,557 4,798,691 2,868,995 32,706,252 IT Subscriptions 707,119 165,606 - 872,725 Infrastructure 67,696,718 4,547,783 93,665 72,150,837 Total accumulated depreciation/amortization 138,610,925 11,511,147 3,320,474 146,801,598 Total capital assets, being depreciated, net 232,647,679 (924,886) 186,282 231,536,511 Governmental activities capital assets, net 284,994,959$ 10,416,654$ 5,149,813$ 290,261,801$ Business-type activities: Capital assets, not being depreciated: Land 30,957,185$ -$ -$ 30,957,185$ Construction in progress 15,053,020 15,770,663 6,316,860 24,506,822 Total capital assets, not being depreciated 46,010,205 15,770,663 6,316,860 55,464,007 Capital assets, being depreciated: Buildings 137,225,718 312,005 368,300 137,169,423 Improvements other than buildings 11,799,598 155,531 - 11,955,129 Machinery and equipment 41,460,101 2,837,327 351,528 43,945,900 IT subscriptions 348,686 206,809 - 555,495 Infrastructure 352,852,392 5,554,847 524,116 357,883,123 Total capital assets being depreciated 543,686,495 9,066,518 1,243,943 551,509,070 Less accumulated depreciation/amortization for: Buildings 81,255,608 3,126,661 368,300 84,013,970 Improvements other than buildings 8,702,059 251,090 - 8,953,149 Machinery and equipment 25,955,029 1,535,200 351,528 27,138,701 IT Subscriptions - 158,407 - 158,407 Infrastructure 142,204,814 7,453,150 524,116 149,133,848 Total accumulated depreciation/amortization 258,117,510 12,524,508 1,243,943 269,398,075 Total capital assets, being depreciated, net 285,568,985 (3,457,990) - 282,110,995 Business-type activities capital assets, net 331,579,190$ 12,312,672$ 6,316,860$ 337,575,002$ 57 6. Long Term Debt Changes in Debt for Bonds Bond debt activity for the year ended June 30, 2024, was as follows: Depreciation/Amortization expense was charged to functions as follows: Governmental activities: Public safety 1,736,164$ Public works 5,653,442 Culture and recreation 3,572,589 Community and economic development 66,290 General government 482,664 Total depreciation/amortization expense - governmental activities 11,511,147$ Business-type activities: Transit 1,164,825$ Wastewater treatment 4,324,326 Water 2,327,164 Sanitation 591,789 Stormwater 1,518,751 Housing authority 233,377 Nonmajor enterprise 2,364,277 Total depreciation expense - business-type activities 12,524,508$ Due Within July 1, 2023 Issues Retirements June 30, 2024 One Year Governmental activities: General obligation bonds 52,915,000$ 10,140,000$ 10,075,000$ 52,980,000$ 10,545,000$ Plus: Unamortized Premium 3,304,091 719,865 547,035 3,476,920 511,548 Total general obligation bonds 56,219,091 10,859,865 10,622,035 56,456,920 11,056,548 Revenue bonds 10,880,000 - 955,000 9,925,000 950,000 Total revenue bonds 10,880,000 - 955,000 9,925,000 950,000 67,099,091$ 10,859,865$ 11,577,035$ 66,381,920$ 12,006,548$ Business-type activities: Revenue bonds 3,625,000$ -$ 1,745,000$ 1,880,000$ 1,325,000$ Plus: Unamortized Premium 76,946 - 35,234 41,712 35,234 Total revenue bonds 3,701,946$ -$ 1,780,234$ 1,921,712$ 1,360,234$ 58 General Obligation Bonds Various issues of general obligation bonds totaling $52,980,000 are outstanding as of June 30, 2024. The bonds have interest rates ranging from 1.80% to 6.00% and mature in varying annual amounts ranging from $340,000 to $2,000,000 per issue, with the final maturities due in the year ending June 30, 2034. Interest and principal payments on all general obligation bonds, except tax abated portions recorded in the enterprise funds, are accounted for through the Debt Service Fund. Annual debt service requirements to maturity for general obligation bonds are as follows: Revenue Bonds As of June 30, 2024, the following unmatured revenue bond issues are outstanding: Taxable Urban Water Renewal Original issue amount $ 9,560,000 $ 12,805,000 Interest rates 1.5% to 5.0% 3.0% Annual maturities $ 555,000 to $ 725,000 to $ 1,325,000 $ 950,000 Amount outstanding $ 1,880,000 $ 9,925,000 Revenue bond debt service requirements to maturity are as follows: Fiscal Year Ending June 30 Princ ip al Interest 2025 10,545,000$ 1,979,724$ 2026 8,680,000 1,566,078 2027 7,730,000 1,235,453 2028 6,685,000 947,178 2029 5,705,000 705,328 2030-2034 13,635,000 1,161,645 Total 52,980,000$ 7,595,406$ Governmental Activities Fiscal Year Ending June 30 Principal Interest Principal Interest 2025 950,000$ 297,750$ 1,325,000$ 26,081$ 2026 950,000 269,250 555,000 6,244 2027 825,000 240,750 - - 2028 725,000 216,000 - - 2029 740,000 194,250 - - 2030-2034 3,980,000 627,750 - - 2035-2036 1,755,000 79,350 - - Total 9,925,000$ 1,925,100$ 1,880,000$ 32,325$ Governmental Activities Business-type Activities 59 The revenue bond ordinances required that water revenues and urban renewal tax revenues be set aside into separate and special accounts as they are received. The use and the amounts to be included in the accounts are as follows: Account Amount (a) Revenue Bond and Interest Amount sufficient to pay current bond and interest maturities. Sinking Reserve (b) Revenue Debt Service Reserve Amount required to be deposited in the Revenue Bond and Interest Reserve until the reserve fund equals: Taxable Urban Renewal Revenue bonds – maximum debt service due on the bonds in any succeeding fiscal year. Water Revenue bonds – 10% of the original principal amounts of all related bond issues. (c) Improvement Reserve $5,000 per month until the reserve balance equals or exceeds $450,000 for Water Revenue bonds, with no further deposits once the minimum balance is reached. If the reserve falls below the required minimum, monthly transfers in the aforementioned amounts will resume. In fiscal year ended June 30, 2024, the Water Fund had net revenues of $3,932,000 and the amount of principal and interest due was $1,801,000. 60 Summary of Bond Issues General obligation and revenue bonds payable at June 30, 2024, are comprised of the following issues: (1) This bond issue refunded the October 2008 Water Revenue Bonds. (2) This bond issued refunded the May 2009 Water Revenue Bonds. Capital Loan Note Payable On April 26, 2024 the City entered into an agreement with the Iowa Finance Authority for up to $3,322,000 to be used for the purpose of paying for the planning and design costs for the Wastewater Gas Digester Improvements project. During the year ended June 30, 2024, the City drew $788,425 on the note, and as of June 30, 2024, $788,425 is owed in relationship to this note. This note is due April 26, 2027. This note was issued pursuant to Chapters 76.13 and 384.24A of the Code of Iowa in anticipation of the receipt of and are payable from the proceeds of an authorized loan agreement and the corresponding issuance of water revenue bonds. The capital loan note payable has a term of three years. Date of Amount Interest Final Outstanding Issue Issued Rates Maturity June 30, 2024 General Obligation Bonds: Multi-Purpose June 2015 7,785,000 2.0 - 2.25 6/25 880,000 Multi-Purpose June 2016 8,795,000 2.0 - 3.0 6/26 2,045,000 Multi-Purpose June 2017 9,765,000 2.0 - 2.5 6/27 3,165,000 Multi-Purpose June 2018 8,895,000 1.8 -2.65 6/28 3,795,000 Multi-Purpose June 2019 12,535,000 2.0 - 2.25 6/29 4,640,000 Multi-Purpose June 2020 12,145,000 2.0 - 5.0 6/30 4,740,000 Multi-Purpose June 2021 11,325,000 2.0 - 5.0 6/31 7,920,000 Multi-Purpose June 2022 10,255,000 3.3 - 5.0 6/32 7,945,000 Multi-Purpose June 2023 9,105,000 3.0 - 5.0 6/33 7,710,000 Multi-Purpose June 2024 10,140,000 4.0 - 6.0 6/34 10,140,000 Total General Obligation Bonds 52,980,000$ Date of Amount Interest Final Outstanding Issue Issued Rates Maturity June 30, 2024 Revenue Bonds: Refunded Water Bonds (1)June 2016 3,650,000 1.5 - 5.0 7/24 525,000 Refunded Water Bonds (2)June 2017 5,910,000 2.0 - 2.25 7/25 1,355,000 Taxable Urban Renewal Sept. 2016 12,805,000 3.0 6/36 9,925,000 Total Revenue Bonds 11,805,000$ 64,785,000$ 61 Conduit Debt Obligations From time to time, the City has issued Industrial Development Revenue Bonds and Midwestern Disaster Area Revenue Bonds to provide financial assistance to private sector entities for the acquisition, construction, and renovation of industrial and commercial facilities deemed to be in the public interest. The bonds are collateralized by the property financed and are payable solely from payments received on the underlying mortgage loans. All payments on the bonds are made by the private sector entities directly to a bond trustee, who is a third-party financial institution, and in turn, disburses the payment to the respective bond holders. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. The City has not extended any additional commitments beyond the collateral, the payments from the private sector entities on the underlying mortgage loans, and maintenance of the tax- exempt status of the conduit debt obligation were extended by the City for and of the bonds. As of June 30, 2024, there were two series of Industrial Development Revenue Bonds outstanding, with an aggregate principal amount payable of $4,711,298. Debt Legal Compliance Legal Debt Margin: As of June 30, 2024, the general obligation debt issued by the City did not exceed its legal debt limit computed as follows (amounts expressed in thousands): Assessed valuation: Real property $ 7,206,677 Utilities 161,652 Total valuation $ 7,368,329 Debt limit, 5% of total assessed valuation $ 368,416 Debt applicable to debt limit: General obligation bonds 52,980 Urban renewal revenue bonds 9,925 Capital loan note payable 788 Notes payable (Note 8) 211 Subscription liabilities (Note 8) 406 Other legal indebtedness (TIF rebates)(Note 11) 29,620 Total net debt applicable to limit 93,930 Legal debt margin $ 274,486 7. Pension and Retirement Systems The City contributes to two employee retirement systems, the Municipal Fire and Police Retirement System of Iowa (MFPRSI) and the Iowa Public Employees Retirement System (IPERS). MFPRSI is governed by a nine-member Board of Trustees. Though separate and apart from state government, the Board is authorized by the state legislature, which also establishes by statute the pension and disability benefits and the System’s funding mechanism. IPERS is administered by the State of Iowa. All full-time employees must participate in either MFPRSI or IPERS. As of June 30, 2024, the City had the following balances related to its pension accounts: IPERS MFPRSI Total Net Pension Liability 19,005,162$ 22,064,192$ 41,069,354$ Deferred Inflows 229,246 883,593 1,112,839 Deferred Outflows 7,439,034 6,778,287 14,217,321 Pension Expense 1,679,808 2,962,813 4,642,621 62 For the governmental activities, net pension liability is generally liquidated by the General Fund, Community Development Block Grant Fund and Other Shared Revenue and Grants Fund. Municipal Fire and Police Retirement System of Iowa (MFPRSI) Plan Description MFPRSI membership is mandatory for fire fighters and police officers covered by the provisions of Chapter 411 of the Code of Iowa. Employees of the City are provided with pensions through a cost-sharing multiple employer defined benefit pension plan administered by MFPRSI. MFPRSI issues a stand-alone financial report which is available to the public by mail at 7155 Lake Drive, Suite #201, West Des Moines, Iowa 50266 or at www.mfprsi.org. MFPRSI benefits are established under Chapter 411 of the Code of Iowa and the administrative rules thereunder. Chapter 411 of the Code of Iowa and the administrative rules are the official plan documents. The following brief description is provided for general informational purposes only. Refer to the plan documents for more information. Pension Benefits Members with 4 or more years of service are entitled to pension benefits beginning at age 55. Full service retirement benefits are granted to members with 22 years of service, while partial benefits are available to those members with 4 to 22 years of service based on the ratio of years completed to years required (i.e., 22 years). Members with less than 4 years of service are entitled to a refund of their contribution only, with interest, for the period of employment. Benefits are calculated based upon the member’s highest 3 years of compensation. The average of these 3 years becomes the member’s average final compensation. The base benefit is 66 percent of the member’s average final compensation. Additional benefits are available to members who perform more than 22 years of service (2 percent for each additional year of service, up to a maximum of 8 years). Survivor benefits are available to the beneficiary of a retired member according to the provisions of the benefit option chosen plus an additional benefit for each child. Survivor benefits are subject to a minimum benefit for those members who chose the basic benefit with a 50 percent surviving spouse benefit. Active members, at least 55 years of age, with 22 or more years of service have the option to participate in the Deferred Retirement Option Program (DROP). The DROP is an arrangement whereby a member who is otherwise eligible to retire and commence benefits opts to continue to work. A member can elect a 3-, 4-, or 5-year DROP period. By electing to participate in DROP the member is signing a contract indicating the member will retire at the end of the selected DROP period. During the DROP period the member’s retirement benefit is frozen and a DROP benefit is credited to a DROP account established for the member. Assuming the member completes the DROP period, the DROP benefit is equal to 52% of the member’s retirement benefit at the member’s earliest date eligible and 100% if the member delays enrollment for 24 months. At the member’s actual date of retirement, the member’s DROP account will be distributed to the member in the form of a lump sum or rollover to an eligible plan. Disability and Death Benefits Disability coverage is broken down into two types, accidental and ordinary. Accidental disability is defined as permanent disability incurred in the line of duty, with benefits equivalent to the greater of 60 percent of the member’s average final compensation or the member’s service retirement benefit calculation amount. Ordinary disability occurs outside the call of duty and pays benefits equivalent to the greater of 50 percent of the member’s average final compensation, for those with 5 or more years of service, or the member’s service retirement benefit calculation amount, and 25 percent of average final compensation for those with less than 5 years of service. Death benefits are similar to disability benefits. Benefits for accidental death are 50 percent of the average final compensation of the member plus an additional amount for each child, or the provisions for ordinary death. Ordinary death benefits consist of a pension equal to 40 percent of the average final compensation of the member plus an additional amount for each child, or a lump-sum distribution to the designated 63 beneficiary equal to 50 percent of the previous year’s earnable compensation of the member or equal to the amount of the member’s total contributions plus interest. Benefits are increased annually in accordance with Chapter 411.6 of the Code of Iowa which states a standard formula for the increases. The surviving spouse or dependents of an active member who dies due to a traumatic personal injury incurred in the line of duty receives a $100,000 lump-sum payment. Contributions Member contribution rates are set by state statute. In accordance with Chapter 411 of the Code of Iowa, the contribution rate was 9.40% of earnable compensation for the year ended June 30, 2024. Employer contribution rates are based upon an actuarially determined normal contribution rate and set by state statute. The required actuarially determined contributions are calculated on the basis of the entry age normal method as adopted by the Board of Trustees as permitted under Chapter 411 of the Code of Iowa. The normal contribution rate is provided by state statute to be the actuarial liabilities of the plan less current plan assets, with such total divided by 1 percent of the actuarially determined present value of prospective future compensation of all members, further reduced by member contributions and state appropriations. Under the Code of Iowa the employer’s contribution rate cannot be less than 17.00% of earnable compensation. The contribution rate was 22.98% for the year ended June 30, 2024. The City’s contributions to MFPRSI for the year ended June 30, 2024, was $2,958,187. If approved by the state legislature, state appropriation may further reduce the employer’s contribution rate, but not below the minimum statutory contribution rate of 17.00% of earnable compensation. The State of Iowa therefore is considered to be a nonemployer contributing entity in accordance with the provisions of the Governmental Accounting Standards Board Statement No. 67 – Financial Reporting for Pension Plans, (GASB 67). There were no state appropriations to MFPRSI during the fiscal year ended June 30, 2024. Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2024, the City reported a liability of $22,064,192 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2023, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’s share of contributions to the pension plan relative to the contributions of all MFPRSI participating employers. At June 30, 2023, the City’s proportion was 3.523511% which was an increase of 0.144427% from its proportions measured as of June 30, 2022. 64 For the year ended June 30, 2024, the City recognized pension expense of $2,962,813. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: $2,958,187 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Actuarial Assumptions The total pension liability in the June 30, 2023, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Total Change of assumptions Deferred Outflows of Resources 1,685,736$ 111,153 Differences between expected and actual experience Deferred Inflows of Resources -$ - Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between City contributions and proportionate share of contributions City contributions subsequent to the measurement date 2,958,187 6,778,287$ 883,593$ 1,404,937 618,274 - 883,593 - Year Ended June 30, 2025 June 30, 2026 J une 30, 2027 June 30, 2028 June 30, 2029 704,075 39,028 Total 2,936,507$ (986,519) 3,208,429 (28,506)$ Rate of inflation 3.00 percent per annum Salary increases 3.75 to 15.11 percent, including inflation Investment rate of return 7.50 percent, net of pension plan investment expense, including inflation 65 The actuarial assumptions used in the June 30, 2023 valuation were based on the results of an actuarial experience study for the 10-year period ending June 30, 2022. Postretirement mortality rates were based on the RP-2014 Blue Collar Combined Healthy Annuitant Table with males set-forward zero years, females set-forward two years and disabled individuals set-forward three years (male only rates), with generational projection of future mortality improvement with 50 percent of Scale BB beginning in 2017. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates (i.e., expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The best estimates of geometric real rates of return for each major asset class are summarized in the following table: Discount Rate The discount rate used to measure the total pension liability was 7.5%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and the City contributions will be made at rates equal to the difference between actuarially determined rates and the member rate. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of City’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability calculated using the discount rate of 7.5%, as well as what the city’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1% lower (6.5%) or 1% higher (8.5%) than the current rate. Asset Class Broad Fixed Income 4.9 % Broad U.S. Equity 7.1 Global Equity 7.2 Broad Non-US Equity 7.4 Managed Futures 5.2 Core Real Estate 6.8 Opportunistic Real Estate 11.1 Global Infrastructure 6.9 Private Credit 10.1 Private Equity 12.1 Long-Term Expected Real Rate of Return 1% Decrease (6.5%) Discount Rate (7.5%)1% Increase (8.5%) City's proportionate share of the net pension liability:38,641,662$ 22,064,192$ 8,341,300$ 66 Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued MFPRSI financial report which is available on MFPRSI’s website at www.mfprsi.org. Payables to the Pension Plan At June 30, 2024, there were no amounts due to MFPRSI. Iowa Public Employees Retirement System (IPERS) Plan Description IPERS membership is mandatory for employees of the City, except for those covered by another retirement system. Employees of the City are provided with pensions through a cost-sharing multiple employer defined benefit pension plan administered by IPERS. IPERS issues a stand-alone financial report which is available to the public by mail at 7401 Register Drive P.O. Box 9117, Des Moines, Iowa 50306-9117 or at www.ipers.org. IPERS benefits are established under Iowa Code chapter 97B and the administrative rules thereunder. Chapter 97B and the administrative rules are the official plan documents. The following brief description is provided for general informational purposes only. Refer to the plan documents for more information. Pension Benefits A regular member may retire at normal retirement age and receive monthly benefits without an early- retirement reduction. Normal retirement age is age 65, any time after reaching age 62 with 20 or more years of covered employment, or when the member’s years of service plus the member’s age at the last birthday equals or exceeds 88, whichever comes first. These qualifications must be met on the member’s first month of entitlement to benefits. Members cannot begin receiving retirement benefits before age 55. The formula used to calculate a Regular member’s monthly IPERS benefit includes: • A multiplier based on years of service. • The member’s highest five-year average salary. For members with service before June 30, 2012, the highest three-year average salary as of that date will be used if it is greater than the highest five- year average salary. If a member retires before normal retirement age, the member’s monthly retirement benefit will be permanently reduced by an early-retirement reduction. The early-retirement reduction is calculated differently for service earned before and after July 1, 2012. For service earned before July 1, 2012, the reduction is 0.25 percent for each month that the member receives benefits before the member’s earliest normal retirement age. For service earned starting July 1, 2012, the reduction is 0.50 percent for each month that the member receives benefits before age 65. Generally, once a member selects a benefit option, a monthly benefit is calculated and remains the same for the rest of the member’s lifetime. However, to combat the effects of inflation, retirees who began receiving benefits prior to July 1990 receive a guaranteed dividend with their regular November benefit payments. Disability and Death Benefits A vested member who is awarded federal Social Security disability or Railroad Retirement disability benefits is eligible to claim IPERS benefits regardless of age. Disability benefits are not reduced for early retirement. If a member dies before retirement, the member’s beneficiary will receive a lifetime annuity or a lump-sum payment equal to the present actuarial value of the member’s accrued benefit or calculated with a set formula, whichever is greater. When a member dies after retirement, death benefits depend on the benefit option the member selected at retirement. 67 Contributions Contribution rates are established by IPERS following the annual actuarial valuation, which applies IPERS’ Contribution Rate Funding Policy and Actuarial Amortization Method. Statute limits the amount rates can increase or decrease each year to 1 percentage point. IPERS Contribution Rate Funding Policy requires that the actuarial contribution rate be determined using the “entry age normal” actuarial cost method and the actuarial assumptions and methods approved by the IPERS Investment Board. The actuarial contribution rate covers normal cost plus the unfunded actuarial liability payment based on a 30-year amortization period. The payment to amortize the unfunded actuarial liability is determined as a level percentage of payroll, based on the Actuarial Amortization Method adopted by the Investment Board. In fiscal year 2024, pursuant to the required rate, Regular members contributed 6.29% of pay and the City contributed 9.44% for a total rate of 15.73%. The City’s total contributions to IPERS for the year ended June 30, 2024 were $3,497,329. Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2024, the City reported a liability of $19,005,162 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2023, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’s share of contributions to the pension plan relative to the contributions of all IPERS participating employers. At June 30, 2023, the City’s proportion was 0.421058% which was an increase of 0.002493% from its proportions measured as of June 30, 2022. For the year ended June 30, 2024, the City recognized pension expense of $1,679,808. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Total Change of assumptions - 301 Net difference between projected and actual earnings on pension plan investments 1,760,108 - Changes in proportion and differences between City contributions and proportionate share of contributions 573,735 City contributions subsequent to the measurement date 3,497,329 7,439,034$ 150,827 - Deferred Inflows of Resources Deferred Outflows of Resources Differences between expected and actual experience 1,607,862$ 78,118$ 229,246$ 68 $3,497,329 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: There were no non-employer contributing entities to IPERS. Actuarial Assumptions The total pension liability in the June 30, 2023, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: The actuarial assumptions used in the June 30, 2023, valuation was based on the results of a quadrennial experience study covering the period July 1, 2017 through June 30, 2021. Mortality rates were based on the PubG-2010 Mortality tables with future mortality improvements modeled using MP-2021 generational adjustments. Year Ended June 30, 2025 June 30, 2026 June 30, 2027 June 30, 2028 June 30, 2029 (408,372)$ (1,319,854) 3,712,459$ 140,446 Total 4,428,433 871,806 Rate of inflation 2.60% per annum (effective June 30, 2017) Salary increases 3.25 to 16.25%, average, including inflation. Rates vary by (effective June 30, 2017)membership group. 7.00% compounde d annually, net of pension plan investment (effective June 30, 2017)expense, including inflation 3.25% per annum based on 2.60% inflation and 0.65% (effective June 30, 2017)real wage inflation Wage growth Investment rate of return 69 The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates (i.e., expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: Discount Rate The discount rate used to measure the total pension liability was 7.0%. The projection of cash flows used to determine the discount rate assumed employee contributions will be made at the contractually required rate and that the contributions from the City will be made at contractually required rates, actuarially determined. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments to current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of City’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability calculated using the discount rate of 7.0%, as well as what the city’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1% lower (6.0%) or 1% higher (8.0%) than the current rate. Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued IPERS financial report which is available on IPERS’ website at www.ipers.org. Payables to the Pension Plan At June 30, 2024, there were no amounts due to IPERS. Asset Class Domestic Equity 21.0 %4.56 % Inte rnational Equity 16.5 6.22 Global Smart Beta Equity 5.0 5.22 Core Plus Fixed Income 23.0 2.69 Public Credit 3.0 4.38 Cash 1.0 1.59 Private Equity 17.0 10.44 Private Real Assets 9.0 3.88 Private Credit 4.5 4.60 Total 100.0 % Target Allocation Long-Term Expected Real Rate of Return 1% Decrease (6.0%) Discount Rate (7.0%)1% Increase (8.0%) City's proportionate share of the net pension liability:40,409,209$ 19,005,162$ 1,068,217$ 70 8. Other Long-term Liabilities A note payable was issued to Greater Iowa City Housing Fellowship for the purchase of an 11 unit apartment building for low income and disabled housing in the Peninsula Neighborhood. The terms of the loan are 1%, interest only payments for twenty years with a final balloon payment of $210,784 due on August 1, 2025. For the governmental activities, employee vested benefits are generally liquidated by the General Fund, Community Development Block Grant Fund and Other Shared Revenue and Grants Fund. The City has entered into various subscription-based information technology agreements for software programs. The agreements require annual payments varying from $5,000 to $65,000 over 3 to 12 years with an interest rates of 2.99% or 3.23% and final payments due August 2027. During the year ended June 30, 2024, principal and interest paid were $207,992 and $9,288 respectively. Future principal and interest payments as of June 30, 2024, are as follows: Changes in Long-Term Liabilities - Notes Payable Note Payable activity for the year ended June 30, 2024, was as follows: Due Within July 1, 2023 Issues Retirements June 30, 2024 One Year Governmental activities: $ 210,784 -$ -$ 210,784$ -$ Changes in Long-Term Liabilities - Employee Vested Benefits Employee Vested Benefits activity for the year ended June 30, 2024, was as follows: Due Within July 1, 2023 Issues Retirements June 30, 2024 One Year Governmental activities: $ 2,628,969 1,479,883$ 1,483,149$ 2,625,703$ 1,486,998$ Business-type activities: $ 819,575 543,327$ 480,794$ 882,108$ 550,177$ Changes in Long-Term Liabilities - Subscription Based Information Technology Liability Subscription liability activity for the year ended June 30, 2024, was as follows: Due Within July 1, 2023 Issues Retirements June 30, 2024 One Year Governmental activities: $ 316,763 90,121$ 152,586$ 254,298$ 144,715$ Business-type activities: $ - 206,809$ 55,406$ 151,403$ 56,316$ 71 In August 1993, the GASB issued Statement No. 18, Accounting for Municipal Solid Waste Landfill Closure and Post-closure Care Costs (the Statement). Under these rules, in addition to operating expenses related to current activities of the landfill, an expense provision and related liability are being recognized based on the future closure and post-closure care costs that will be incurred near or after the date the landfill no longer accepts waste. The recognition of these landfill closure and post-closure care costs is based on the amount of the landfill used during the year. The estimated liability for landfill closure and post-closure care costs as of June 30, 2024, is $15,857,709, which is based on 60.7% usage (filled) of the landfill and is included in accrued liabilities within the Sanitation Fund. It is estimated that an additional amount of approximately $10,267,018 will be recognized as closure and post-closure care expenses between the date of the balance sheet and the date the landfill is expected to be filled to capacity by the year ended June 30, 2039. The estimated total current cost of the landfill closure and post-closure care costs at June 30, 2024, was determined by a licensed professional engineer and approximated at $26,124,727. It is based on the amount that would be paid if all equipment, facilities, and services required to close, monitor, and maintain the landfill were acquired as of June 30, 2024. These amounts are based on an estimated post-closure care and monitoring period of 30 years, consistent with current State Department of Natural Resources regulations. However, the actual cost of closure and post-closure care may be higher due to inflation, changes in technology, or changes in landfill laws and regulations. The City is required by federal and state laws and regulations to provide some form of financial assurance to finance closure and post-closure care. The City will meet its financial assurance obligations through the issuance of general obligation bonds. As of June 30, 2024, the Sanitation Fund had $15,954,155 in related equity in pooled cash and investments, at fair value designated for satisfaction of closure and post-closure costs. The City estimates that these cash reserves will only provide a fraction of the dollars needed to close and monitor the landfill. The remaining portion of post-closure care costs, anticipated future inflation costs and additional costs that might arise from changes in post-closure requirements (due to changes in technology or more rigorous environmental regulations, for example) may need to be covered by charges to future landfill users as well as City taxpayers. Changes in Long-Term Liabilities – Other Postemployment Benefits (OPEB) Plan Description: The City operates a single-employer self-funded medical and dental plan for all employees, which is offered to current and retired employees and their dependents. Group insurance benefits are established under Iowa Code Chapter 509A.13. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75. Principal Interest 201,031$ 12,470$ 118,408 6,271 66,254 2,750 20,008 646 405,701$ 22,137$ 2025 2026 2027 2028 Total Fiscal Year Ending June 30 Total SBITA Changes in Long-Term Liabilities - Landfill Closure Post-closure Care Costs Landfill Closure Post-closure care activity for the year ended June 30, 2024, was as follows: Due Within July 1, 2023 Issues Retirements June 30, 2024 One Year Business-type activities: $ 12,978,256 $ 2,879,453 -$ $ 15,857,709 -$ 72 All full-time employees who retire or terminate/resign and their eligible dependents are offered the following post-employment benefit options: Health insurance and dental insurance – The option of continuing with the City’s health insurance plan at the individual’s expense. These benefits cease upon Medicare eligibility. Life insurance – The option of converting the employee’s City-paid policy to an individual policy at the individual’s expense with the City’s life insurance carrier. Long-term disability – For employees who terminate/resign and have been on the plan for a minimum of one year, the option of converting the employee’s City-paid group policy to a personal policy at the individual’s expense with the City’s long-term disability insurance carrier. The above options, while at the individual’s own expense, are included within the City’s overall insurance package, which results in an implicit rate subsidy and an OPEB liability. Retired participants must be age 55 or older at retirement. At June 30, 2024, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefit payments 57 Active employees 583 Total 640 Total OPEB Liability: The City’s total OPEB liability of $9,523,167 was measured as of June 30, 2024 and was determined by an actuarial valuation as of that date. Actuarial Assumptions: The total OPEB liability in the June 30, 2024 actuarial valuation was determined using the following actuarial assumptions and the entry age normal actuarial cost method, applied to all periods included in the measurement. Discount Rate: The discount rate used to measure the total OPEB liability was 4.21% which reflects the index rate for 20-year tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher as of the measurement date. Mortality rates for general participants are from the SOA Pub-2010 General Headcount Weighted Mortality Table fully generational using Scale MP-2021. Mortality rates for public safety participants are from the SOA Pub-2010 Public Safety Headcount Weighted Mortality Table fully generational using Scale MP- 2021. Mortality rates for surviving spouses are from the SOA Pub-2010 Continuing Survivor Headcount Weighted Mortality Table fully generational using Scale MP-2021. Annual retirement probabilities are based on varying rates by age and turnover probabilities mirror those used by IPERS and MFPRSI. Rate of inflation 2.60% per annum (effective June 30, 2024) Rates of salary increases 3.25% per annum based on 2.60% inflation and 0.65% (effective June 30, 2024)real wage inflation Discount rate 4.21%, compounded annually, including inflation (effective June 30, 2024) Healthcare cost trend rate 8.00% initial rate decreasing by .5% annually to an ultimate (effective June 30, 2024)rate of 4.50% 73 The actuarial assumptions used in the June 30, 2024 valuation were based on the results of an actuarial experience study with dates corresponding to those listed above. Changes of assumptions reflect a change in the discount rate from 4.13% in fiscal year 2023 to 4.21% in fiscal year 2024. Sensitivity of the City’s Total OPEB Liability to Changes in the Discount Rate: The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1% lower (3.21%) or 1% higher (5.21%) than the current discount rate. Sensitivity of the City’s Total OPEB Liability to Changes in the Healthcare Cost Trend Rate: The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rate that is 1% lower (7.00%) or 1% higher (9.00%) than the current healthcare cost trend rate. Total OPEB Liability Total OPEB liability beginning of year 8,730,093$ Changes for the year: Service Cost 636,191 Interest 378,025 Difference between expected and actual experience (418,135) Changes in assumptions 627,644 Benefit payments (430,651) Net changes 793,074 Total OPEB liability end of year 9,523,167$ 1% Decrease (3.21%) Discount Rate (4.21%) 1% Increase (5.21%) Total OPEB liability 10,230,100$ 9,523,167$ 8,855,433$ 1% Decrease (7.0%) Healthcare Cost Trend Rate (8.0%) 1% Increase (9.00%) Total OPEB liability 8,492,330$ 9,523,167$ 10,738,232$ 74 OPEB Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB: For the year ended June 30, 2024, the City recognized OPEB expense of $1,021,723. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following resources: The amount reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows: For the governmental activities, OPEB liability is generally liquidated by the General Fund, Community Development Block Grant Fund and Other Shared Revenue and Grants Fund 9. Fund Equity Fund balances for the governmental funds are reported in classifications that comprise a hierarchy based on the extent to which the government honors constraints on the specific purposes for which amounts in those funds can be spent. • The Nonspendable classification contains amounts not in spendable form or legally or contractually required to be maintained intact. • Restricted amounts contain restraint on their use externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. • Committed amounts can only be used for specific purposes imposed by formal action of the government’s highest level of decision-making authority. The highest level of decision-making authority is the City Council and it takes a resolution to establish, modify or rescind a fund balance commitment. Total Differences between expected and actual experience 739,773$ (1,005,001)$ Change of assumptions 1,132,804 (1,420,541) 1,872,577$ (2,425,542)$ Deferred Outflows of Resources Deferred Inflows of Resources Year Ended June 30, 2025 June 30, 2026 June 30, 2027 June 30, 2028 June 30, 2029 Thereafter Total 7,507$ 7,507 7,512 (53,041) (330,764) (191,686) (552,965)$ 75 • Amounts intended to be used for specific purposes are Assigned. Assignments should not cause deficits in the Unassigned fund balance. The Finance Director has been delegated authority by the City Council through a resolution to assign amounts to be used for specific purposes. • Unassigned fund balance is the residual classification for the General Fund. The General Fund is the only fund that would report a positive amount in unassigned fund balance. Residual deficit amounts of other governmental funds would also be reported as unassigned. The City would use Restricted fund balances first, followed by Committed resources, and then Assigned resources, as appropriate opportunities arise, but reserves the right to selectively spend Unassigned resources first to defer the use of these other classified funds. The nonmajor governmental fund, Economic Development Fund, has a deficit unassigned fund balance of $3,480. The deficit will be resolved with future property taxes. Components of Fund Balance Bridge, Other Street and Shared Traffic Other Revenue and Employee Other Control Debt Governmental Round to nearest $General Grants Benefits Construction Construction Service Funds Total Nonspendable: Perpetual Care Principal 69,000$ -$ -$ -$ -$ -$ -$ 69,000$ Inventory - 273,990 - - - - - 273,990 Property Held for Resale 6,335,000 - - - - - - 6,335,000 Total Nonspendable 6,404,000 273,990 - - - - - 6,677,990 Restricted for: Public Safety 511,756 - - - - - - 511,756 Debt Service - - - - - 7,607,584 - 7,607,584 GO Bond Projects - - - 12,049,390 16,708,258 - - 28,757,648 State Funding - 6,740,530 - - - - - 6,740,530 Grant Agreement - - - - - - 3,312,736 3,312,736 Affordable Housing - 7,372,091 - - - - - 7,372,091 Economic Development - - - - - - 870,721 870,721 Notes Receivable 1,329,650 - - - - - - 1,329,650 Public Safety Employee Benefits - - 3,577,051 - - - - 3,577,051 Other Restricted 613,696 2,969,655 - - - - 633,511 4,216,862 Total Restricted 2,455,102 17,082,276 3,577,051 12,049,390 16,708,258 7,607,584 4,816,968 64,296,629 Assigned to: Library Programs 1,399,656 - - - - - - 1,399,656 Replacement and Acquisition Reserves 17,036,863 - - - - - - 17,036,863 Other Assigned 888 - - - - - - 888 Total Assigned 18,437,407 - - - - - - 18,437,407 Unassigned:46,148,462 - - - - - (3,480) 46,144,982 Total Fund Balances 73,444,971$ 17,356,266$ 3,577,051$ 12,049,390$ 16,708,258$ 7,607,584$ 4,813,488$ 135,557,008$ 76 10. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; workplace accidents, errors and omissions; and natural disasters. During fiscal year 1988 the City established the Loss Reserve Fund, an internal service fund, to account for and finance its uninsured risks of loss. During the year ended June 30, 2024 the City purchased property, liability, and workers’ compensation insurance under the program that provides for a $100,000 self-insured retention per occurrence on property losses except for wind damage losses. The wind damage deductible is the greater of $250,000 or 2% of the building value. A $500,000 self-insured retention per occurrence on liability, and a zero self-insured retention on workers’ compensation losses for all employees except Fire Department employees. Workers’ compensation losses for Fire Department employees are fully self-funded. The liability insurance provides coverage for claims in excess of the aforementioned self-insured retention up to a maximum of $21,000,000 annual aggregate of losses paid. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years. The operating funds pay annual premiums to the Loss Reserve Fund. Accumulated monies in the Loss Reserve Fund are available to cover the self-insured retention amounts and any uninsured losses. The Housing Authority Fund is insured under a separate policy with the Assisted Housing Risk Management Association. The remaining funds participate in the Loss Reserve Fund. The funds make payments to the Loss Reserve Fund based on actuarial estimates of the amounts needed to pay prior- and current-year claims and to establish a reserve for catastrophic losses. The Fund’s accrued liabilities balance includes a claims liability at June 30, 2024 based on the requirements of GASB Statement No. 10, as amended, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Changes in the Loss Reserve Fund’s claims liability amount for property, liability, and workers’ compensation for the years ended June 30, 2024 and 2023 are as follows: Current-Year Beginning-of- Claims and Balance at Fiscal-Year Changes in Claim Fiscal Liability Estimates Payments Year-End 2022 - 2023 $ 2,741,000 $ 255,000 $ 553,000 $ 2,443,000 2023 - 2024 2,443,000 258,000 960,000 1,741,000 Also, the City is partially self-insured, through stop-loss insurance, for employee health care coverage, which is available to all of its permanent employees. This insurance provides stop-loss coverage for claims in excess of $125,000 per employee with an aggregate stop-loss of $15,344,182. The operating funds are charged premiums by the Loss Reserve Fund. The City reimburses a health insurance provider for actual medical costs incurred, plus a claims processing\administrative fee. Changes in the Loss Reserve Fund’s claims liability amount for health care coverage for the years ended June 30, 2024 and 2023 are as follows: Current-Year Beginning-of- Claims and Balance at Fiscal-Year Changes in Claim Fiscal Liability Estimates Payments Year-End 2022 – 2023 $ 583,000 $ 10,532,000 $ 10,490,000 $ 625,000 2023 - 2024 625,000 10,796,000 10,766,000 655,000 77 11. Commitments and Contingencies Contractual Commitments Developer Commitments In order to encourage development within designated TIF districts, the City Council has approved developer grants to 8 different projects. The grants are to be paid only after certain conditions have been met by each project developer, and are to be paid over many years in the form of a rebate of a predetermined percentage of future property taxes generated by the property. Currently, it is estimated that outstanding commitments totaling $29,620,446 exist, of which $2,986,590 is expected to be paid in the next fiscal year. These items are expensed in the period in which they are paid. There were payments made in the current fiscal year in the amount of $2,163,842. No liability is recognized due to the fact that the agreements are conditional and the payments are to be funded by future property taxes receivable on the project. Letter of Credit As of June 30, 2024, the City has an unused letter of credit totaling $575,000. This letter of credit, issued by MidWestOne Bank, serves as a financial guarantee for self-funded worker’s compensation claims. This letter of credit is to expire on June 27, 2025, and there are no fees associated with its maintenance. The City does not anticipate any financial obligations arising from this letter of credit, as it remains unused as of the reporting date. Management will monitor this letter of credit and ensure compliance with terms set forth by MidWestOne Bank. The total outstanding contractual commitments as of June 30, 2024 are as follows: Project Amount Bridge, street and traffic Paving and Bridge Construction, control construction Engineering Design and Consulting 11,598,623$ Other construction Public Works & Culture and Recreation Construction 3,249,430 Parking Parking Facility Restoration Repair 448,158 Wastewater Sewer Construction & Influent Rake Replacement 5,124,267 Water Water Construction & Peninsula Well Field Power Redundancy Project 642,962 Transit Transit Bus Sign Replacements/Transit Amenities 212,723 Airport Runway Obstruction Mitigation & Runway Relocation 577,151 Landfill Lanfill Facility Replacement and Landfill Gas Infrastructure 120,153 Stormwater Stormwater System Improvements & Storm Sewer 806,785 Replacements 22,780,252$ Fund 78 12. Contingent Liabilities Litigation The City is a defendant in a number of lawsuits arising principally from claims against the City for alleged improper actions by City employees, with such lawsuits typically involving claims of improper police action, unlawful taking of property by zoning, negligence, appeals of condemnations, and discrimination. Total damages claimed are substantial; however, it has been the City’s experience that such actions are settled for amounts substantially less than claimed amounts. The City’s management estimates that the potential claims against the City, not covered by various insurance policies, would not materially affect the financial condition of the City. The City has the authority to levy additional taxes (outside the regular limit) to cover uninsured judgments against the City. 13. Tax Abatements Governmental Accounting Standards Board Statement No. 77 defines tax abatements as a reduction in tax revenues that results from an agreement between one or more governments and an individual or entity in which (a) one or more governments promise to forgo tax revenues to which they are otherwise entitled and (b) the individual or entity promises to take a specific action after the agreement has been entered into that contributes to economic development or otherwise benefits the governments or the citizens of those governments. City Tax Abatements The City provides tax abatements for urban renewal and economic development projects with tax increment financing as provided for in Chapters 15A and 403 of the Code of Iowa. For these types of projects, the City enters into agreements with developers which require the City, after developers meet the terms of the agreements, to rebate a portion of the property tax paid by the developers, to pay the developers an economic development grant or to pay the developers a predetermined dollar amount. No other commitments were made by the City as part of these agreements. For the year ended June 30, 2024, $821,419.73 of property tax was diverted from the City under the urban renewal and economic development projects. Tax Abatements of Other Entities Property tax revenues of the City were not reduced by any amount for the year ended June 30, 2024 under agreements entered into by any entities. 14. New Governmental Accounting Standards Board (GASB) Standards The City adopted the following statements during the year ended June 30, 2024: Statement No. 100, Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62. The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. The implementation of the above statement did not have a material impact on the City’s Financial Statements. The Governmental Accounting Standards Board (GASB) has issued four statements not yet implemented by the City. The statements, which might impact the City’s financial statements, are as follows: 79 Statement No. 101, Compensated Absences, will be effective for fiscal year ending June 30, 2025. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. Statement No. 102, Certain Risk Disclosures, will be effective for fiscal year ending June 30, 2025. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. Statement No. 103, Financial Reporting Model Improvements, will be effective for the fiscal year ending June 30, 2025. The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. This Statement also address certain application issues. Statement No. 104, Disclosure of Certain Capital Assets, will be effective for the fiscal year ending June 30, 2026. The objective of this Statement is to provide users of government financial statements with essential information about certain types of capital assets. The City’s management has not yet determined the effect these statements will have on the City’s financial statements. 80 81 Governmental Fund Types Enterprise Fund Actual Budgetary Types Actual Total Actual Basis Budgetary Basis Budgetary Basis Revenues: Property taxes 66,212$ -$ 66,212$ Delinquent property taxes 13 - 13 Tax increment financing taxes 4,305 - 4,305 Other city taxes 3,822 - 3,822 Special assessments - - - Licenses and permits 3,036 8 3,044 Intergovernmental 19,407 19,934 39,341 Charges for services 6,898 44,800 51,698 Use of money and property 5,946 5,787 11,733 Miscellaneous 2,567 887 3,454 Total revenues 112,206 71,416 183,622 Expenditures/Expenses: Public safety 29,663 - 29,663 Public works 12,255 - 12,255 Health and social services 697 - 697 Culture and recreation 16,899 - 16,899 Community and economic development 16,723 - 16,723 General government 12,627 - 12,627 Debt service 13,190 - 13,190 Capital outlay 20,533 - 20,533 Business-type - 71,617 71,617 Total expenditures/expenses 122,587 71,617 194,204 Excess (deficiency) of revenues over (under) expenditures/expenses (10,381) (201) (10,582) Other financing sources and uses, net 6,495 6,164 12,659 Net change in fund balances (3,886) 5,963 2,077 Balances, beginning of year 133,773 103,606 237,379 Balances, end of year 129,887$ 109,569$ 239,456$ See Note to Required Supplementary Information. City of Iowa City, Iowa Budgetary Comparison Schedule Budget and Actual - All Governmental Funds and Enterprise Funds Required Supplementary Information For the Year Ended June 30, 2024 (dollar amounts expressed in thousands) Budgetary Basis 82 Final to Actual Variance - Positive Original Final (Negative) 66,313$ 66,313$ (101)$ - - 13 4,083 4,060 245 3,596 3,597 225 1 1 (1) 2,034 2,034 1,010 36,116 54,055 (14,714) 51,348 50,485 1,213 3,172 3,172 8,561 10,581 5,011 (1,557) 177,244 188,728 (5,106) 30,750 31,501 1,838 12,746 13,089 834 697 697 - 17,501 17,789 890 10,406 31,083 14,360 12,632 14,312 1,685 13,211 13,246 56 31,178 51,922 31,389 90,987 137,656 66,039 220,108 311,295 117,091 (42,864) (122,567) 111,985 42,980 43,872 (31,213) 116 (78,695) 80,772$ 157,640 237,379 157,756$ 158,684$ Budgeted Amounts 83 Accrual Modified Accrual Budget Basis Adjustments Basis Revenues 112,206$ 7,259$ 119,465$ Expenditures 122,587 (14,708) 107,879 Net (10,381) 21,967 11,586 Other financing sources and uses, net 6,495 (5,807) 688 Beginning Fund Balances 133,773 (10,489) 123,284 Ending Fund Balances 129,887$ 5,671$ 135,558$ Accrual Accrual Budget Basis Adjustments Basis Revenues 71,416$ 1,097$ 72,513$ Expenditures 71,617 459 72,076 Net (201) 638 437 Other financing sources and uses, net 6,164 3,810 9,974 Beginning Fund Balances 103,606 309,983 413,589 Ending Fund Balances 109,569$ 314,431$ 424,000$ See Note to Required Supplementary Information. City of Iowa City, Iowa Governmental Fund Types Enterprise Fund Types Budgetary Comparison Schedule Budget to GAAP Reconciliation Required Supplementary Information For the Year Ended June 30, 2024 (dollar amounts expressed in thousands) 84 City of Iowa City, Iowa Note to Required Supplementary Information - Budgetary Reporting For the Year Ended June 30, 2024 In accordance with the Code of Iowa, the City Council annually adopts a budget following required public notice and hearing which includes all funds, except internal service funds and custodial funds. The budget basis of accounting is a modified accrual basis. The annual budget may be amended during the year utilizing similar statutorily prescribed procedures. Formal and legal budgetary control is based upon nine major classes of expenditures known as functions, not by fund or fund type. These nine functions are: public safety, public works, health and social services, culture and recreation, community and economic development, general government, debt service, capital outlay and business-type. The legal level control is at the aggregated function level, not at the fund or fund type level. During the year, budget amendments increased budgeted revenues by $11,484,000 and expenditures by $91,187,000. The budget amendments were primarily due to changes in the breadth and timing of capital improvement projects, which the City budgets in full during the initial year of the projects and amends future year budgets for carryover. 85 2024 2023 2022 2021 City's proportion of the net pension liability 3.523511% 3.379080% 3.529220% 3.621079% City's proportionate share of the net pension liability 22,064$ 18,976$ 7,926$ 28,882$ City's covered payroll 12,590 11,413 11,468 11,503 City's proportionate share of the net pension liability as a percentage of its covered payroll 175.25% 166.27% 69.11% 251.08% Plan fiduciary net position as a percentage of the total pension liability 83.53% 84.62% 93.62% 76.47% * In accordance with GASB Statement No. 68, the amounts presented for each fiscal year were determined as of June 30 of the preceding fiscal year. See Notes to Required Supplementary Information - Pension Liability. (amounts expressed in thousands) Share of the Net Pension Liability City of Iowa City, Iowa Required Supplementary Information - Schedule of the City's Proportionate Municipal Fire and Police Retirement System of Iowa For the Last Ten Years 86 2020 2019 2018 2017 2016 2015 3.684880% 3.706970% 3.648635% 3.697128% 3.704972% 3.778137% 24,170$ 22,071$ 21,398$ 23,117$ 17,406$ 13,696$ 11,155 10,743 10,347 10,019 9,716 9,648 216.67% 205.45% 206.80% 230.73% 179.15% 141.96% 79.94% 81.07% 80.60% 78.20% 83.04% 86.27% 87 2024 2023 2022 2021 Statutorily required contributions 2,958$ 3,009$ 2,988$ 2,903$ Contributions in relation to the statutorily required contribution (2,958) (3,009) (2,988) (2,903) Contribution deficiency (excess)-$ -$ -$ -$ City's covered payroll 12,873$ 12,590$ 11,413$ 11,468$ Contributions as a percentage of covered payroll 22.98% 23.90% 26.18% 25.31% See Notes to Required Supplementary Information - Pension Liability. City of Iowa City, Iowa Required Supplementary Information - Schedule of the City's Contributions Municipal Fire and Police Retirement System of Iowa For the Last Ten Years (amounts expressed in thousands) 88 2020 2019 2018 2017 2016 2015 2,808$ 2,902$ 2,759$ 2,682$ 2,782$ 2,955$ (2,808) (2,902) (2,759) (2,682) (2,782) (2,955) -$ -$ -$ -$ -$ -$ 11,503$ 11,155$ 10,743$ 10,347$ 10,019$ 9,716$ 24.41% 26.02% 25.68% 25.92% 27.77% 30.41% 89 Changes of benefit terms: There were no significant changes of benefit terms. Changes of assumptions: The 2018 valuation changed postretirement mortality rates on the RP-2014 Blue Collar Healthy Annuitant Table with males set-forward zero years, females set-forward two years and disabled individuals set-forward three years (male only rates), with generational projection of future mortality improvements with 50% of Scale BB beginning in 2017. The 2017 valuation added five years projection of future mortality improvement with Scale BB. The 2016 valuation changed postretirement mortality rates to the RP-2000 Blue Collar Combined Healthy Mortality Table with males set-back two years, females set-forward one year and disabled individuals set-forward one year (male only rates), with no projection of future mortality improvement. The 2015 valuation phased in the 1994 Group Annuity Mortality Table for postretirement mortality. This resulted in weighting of 1/12 of the 1971 Group Annuity Mortality Table and 11/12 of the 1994 Group Annuity Morality Table. The 2014 valuation phased in the 1994 Group Annuity Mortality Table for postretirement mortality. This resulted in weighting of 2/12 of the 1971 Group Annuity Mortality Table and 10/12 of the 1994 Group Annuity Morality Table. City of Iowa City, Iowa Notes to Required Supplementary Information - Pension Liability Municipal Fire and Police Retirement System of Iowa Year ended June 30, 2024 90 91 2024 2023 2022 2021 City's proportion of the net pension liability 0.4210580% 0.4185650% -0.1604936% 0.3947745% City's proportionate share of the net pension liability 19,005$ 15,814$ 554$ 27,732$ City's covered payroll 37,000 33,752 32,047 31,345 City's proportionate share of the net pension liability as a percentage of its covered payroll 51.36% 46.85% 1.73% 88.47% Plan fiduciary net position as a percentage of the total pension liability 90.13% 90.34% 100.81% 82.90% * In accordance with GASB Statement No. 68, the amounts presented for each fiscal year were determined as of June 30 of the preceding fiscal year. See Notes to Required Supplementary Information - Pension Liability. City of Iowa City, Iowa Required Supplementary Information - Schedule of the City's Proportionate Share of the Net Pension Liability Iowa Public Employees' Retirement System For the Last Ten Years (amounts expressed in thousands) 92 2020 2019 2018 2017 2016 2015 0.4053890% 0.4016869% 0.3968158% 0.3962696% 0.4159256% 0.4378904% 23,475$ 25,420$ 26,433$ 24,938$ 20,549$ 17,366$ 30,852 30,190 29,619 28,448 28,495 28,654 76.09% 84.20% 89.24% 87.66% 72.11% 60.61% 85.45% 83.62% 82.21% 81.82% 85.19% 87.61% 93 2024 2023 2022 2021 Statutorily required contributions 3,497$ 3,493$ 3,186$ 3,025$ Contributions in relation to the statutorily required contribution (3,497) (3,493) (3,186) (3,025) Contribution deficiency (excess)-$ -$ -$ -$ City's covered payroll 37,048 37,000 33,752$ 32,047$ Contributions as a percentage of covered payroll 9.44%9.44%9.44%9.44% See Notes to Required Supplementary Information - Pension Liability. City of Iowa City, Iowa Required Supplementary Information - Schedule of the City's Contributions Iowa Public Employees' Retirement System For the Last Ten Years (amounts expressed in thousands) 94 2020 2019 2018 2017 2016 2015 2,959$ 2,912$ 2,696$ 2,645$ 2,540$ 2,545$ (2,959) (2,912) (2,696) (2,645) (2,540) (2,545) -$ -$ -$ -$ -$ -$ 31,345$ 30,852$ 30,190$ 29,619$ 28,448$ 28,495$ 9.44%9.44%8.93%8.93%8.93%8.93% 95 Changes of benefit terms: There are no significant changes in benefit terms. Changes of assumptions: The 2022 valuation incorporated the following refinements after a quadrennial experience study: • Changed mortality assumptions to the PubG-2010 mortality tables with mortality improvements modeled using Scale MP-2021. • Adjusted retirement rates. • Lowered disability rates. • Adjusted termination rates. The 2018 valuation implemented the following refinements as a result of an experience study dated June 28, 2018: • Changed mortality assumptions to the RP-2014 mortality tables with mortality improvements modeled using Scale MP-2017. • Adjusted retirement rates. • Lowered disability rates • Adjusted the probability of a vested Regular member electing to receive a deferred benefit. • Adjusted the merit component of the salary increase assumption. The 2017 valuation implemented the following refinements as a result of an experience study dated March 24, 2017: • Decreased the inflation assumption from 3.00% to 2.60%. • Decreased the assumed rate of interest on member accounts from 3.75% to 3.5% per year. • Decreased the discount rate from 7.50% to 7.00%. • Decreased the wage growth assumption from 4.00% to 3.25%. • Decreased the payroll growth assumption from 4.00% to 3.25%. The 2014 valuation implemented the following refinements as a result of a quadrennial experience study: • Decreased the inflation assumption from 3.25% to 3.00% • Decreased the assumed rate of interest on member accounts from 4.00% to 3.75% per year. • Adjusted male mortality rates for retirees in the Regular membership group. • Moved from an open 30 year amortization period to a closed 30 year amortization period for the UAL beginning June 30, 2014. Each year thereafter, changes in the UAL from plan experience will be amortized on a separate closed 20 year period. City of Iowa City, Iowa Notes to Required Supplementary Information - Pension Liability Iowa Public Employees' Retirement System Year ended June 30, 2024 96 2024 2023 2022 2021 2020 2019 2018 Service Cost 636$ 617$ 823$ 734$ 633$ 553$ 502$ Interest 378 353 226 240 323 297 245 Difference between expected and actual experience (418) (118) (254) 459 (483) 1,161 (377) Changes in assumptions 628 (25) (1,942) 305 (83) 225 982 Benefit payments (431) (221) (427) (667) (641) (948) (174) Net change in total OPEB liability 793 606 (1,574) 1,071 (251) 1,288 1,178 Total OPEB liability beginning of year 8,730 8,124 9,698 8,627 8,878 7,590 6,412 Total OPEB liability end of year 9,523$ 8,730$ 8,124$ 9,698$ 8,627$ 8,878$ 7,590$ City's covered-employee payroll 49,921$ 49,590$ 44,134$ 43,515$ 42,848$ 42,007$ 40,933$ Total OPEB liability as a percentage of covered-employee payroll 19.08%17.60%18.41%22.29%20.13%21.13%18.54% Note: GASB Statement No. 75 requires ten years of information to be presented in this table. However, until a full 10-year trend is compiled, the City will present information for those years for which information is available. Note: No assets are accumulated in a trust that meets the criteria in paragraph 4 of GAS Statement No. 75. Changes of benefit terms: There were no significant changes of benefit terms. Changes of assumptions: Changes in assumptions and other inputs reflect the effects of changes in the discount rate each period. The following are the discount rates used in each period. Year ended June 30, 2024 4.21% Year ended June 30, 2023 4.13% Year ended June 30, 2022 4.09% Year ended June 30, 2021 2.19% Year ended June 30, 2020 2.66% Year ended June 30, 2019 3.51% Year ended June 30, 2018 3.87% Health care trend rates have been updated to an initial trend rate of 8.0% decreasing by 0.5% annually to an ultimate rate of 4.5%. City of Iowa City, Iowa Required Supplementary Information - Schedule of Changes in the City's Total OPEB Liability, Related Ratios and Notes For the Last Seven Years (amounts expressed in thousands) 97 98 Nonmajor Governmental Funds Special Revenue Funds Special Revenue Funds account for revenues derived from specific sources that are required to be accounted for as separate funds. The funds in this category and their purpose are as follows: Economic Development Fund – accounts for revenue and expenditures of economic development activities. Community Development Block Grant Fund – accounts for revenue from the U.S. Department of Housing and Urban Development’s Community Development Block Grant programs. Metropolitan Planning Organization of Johnson County Fund – accounts for the financial activities of the metropolitan/rural cooperative planning organization. 99 Metropolitan Community Planning Development Organization Economic Block of Johnson Development Grant County Total Assets Equity in pooled cash and investments 839$ -$ 605$ 1,444$ Receivables: Property tax 745 - - 745 Interest 21 - 5 26 Notes - 3,313 - 3,313 Due from other governments - 92 71 163 Total assets 1,605$ 3,405$ 681$ 5,691$ Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities Accounts payable 75$ 7$ 35$ 117$ Accrued liabilities - - 12 12 Due to other funds - 85$ - 85 Total liabilities 75 92 47 214 Deferred Inflows of Resources Unavailable revenues: Succeeding year property taxes 662 - - 662 Total deferred inflows of resources 662 - - 662 Fund Balances Restricted 871 3,313 634 4,818 Unassigned (3) - - (3) Total fund balances 868 3,313 634 4,815 Total liabilities, deferred inflows of resources and fund balances 1,605$ 3,405$ 681$ 5,691$ Special Revenue City of Iowa City, Iowa Combining Balance Sheet Nonmajor Governmental Funds June 30, 2024 (amounts expressed in thousands) 100 Metropolitan Community Planning Development Organization Economic Block of Johnson Development Grant County Total Revenues Property taxes 4,917$ -$ -$ 4,917$ Intergovernmental 51 1,103 401 1,555 Use of money and property 114 26 31 171 Miscellaneous - 126 144 270 Total revenues 5,082 1,255 576 6,913 Expenditures Current: Community and economic development 2,822 1,331 903 5,056 Total expenditures 2,822 1,331 903 5,056 Excess (deficiency) of revenues over (under) expenditures 2,260 (76) (327) 1,857 Other Financing Sources (Uses) Transfers in 159 - 424 583 Transfers out (1,734) - - (1,734) Total other financing sources and (uses)(1,575) - 424 (1,151) Net change in fund balances 685 (76) 97 706 Fund Balances, Beginning 183 3,389 537 4,109 Fund Balances, Ending 868$ 3,313$ 634$ 4,815$ Special Revenue City of Iowa City, Iowa Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2024 (amounts expressed in thousands) 101 102 Nonmajor Enterprise Funds Enterprise Funds account for operations and activities of the City that are financed and operated in a manner similar to a private business enterprise, and where the costs of providing services to the general public on a continuing basis are expected to be financed or recovered primarily through user charges, or where the City has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The funds in this category are as follows: Airport Fund – accounts for the operation and maintenance of the airport facility. Parking Fund – accounts for the operation and maintenance of the “on” and “off” street public parking facilities. 103 Airport Parking Total Assets Current assets: Equity in pooled cash and investments 99$ 3,926$ 4,025$ Receivables: Accounts and unbilled usage 29 46 75 Interest - 33 33 Lease 127 - 127 Due from other governments 754 22 776 Total current assets 1,009 4,027 5,036 Noncurrent assets: Restricted assets: Equity in pooled cash and investments 9 304 313 Lease receivable 535 - 535 Capital assets: Land 11,995 3,489 15,484 Buildings 5,458 42,664 48,122 Improvements other than buildings 483 328 811 Machinery and equipment 531 467 998 Infrastructure 18,687 - 18,687 Accumulated depreciation (15,467) (27,032) (42,499) IT subscriptions - 349 349 Accumulated amortization - (116) (116) Construction in progress 845 29 874 Total noncurrent assets 23,076 20,482 43,558 Total assets 24,085 24,509 48,594 Deferred Outflows of Resources Pension related deferred outflows 16 258 274 OPEB related deferred outflows 3 61 64 Total deferred outflows of resources 19 319 338 Liabilities Current liabilities: Accounts payable 10 136 146 Contracts payable 400 270 670 Accrued liabilities 2 35 37 Employee vested benefits 5 76 81 Due to other funds 126 - 126 Total current liabilities 543 517 1,060 Noncurrent liabilities: Liabilities payable from restricted assets: Deposits 8 1 9 Advances from other funds - 1,010 1,010 Employee vested benefits 4 44 48 Net pension liability 39 655 694 Other post employment benefits obligation 14 314 328 Total noncurrent liabilities 65 2,024 2,089 Total liabilities 608 2,541 3,149 Deferred Inflows of Resources Lease related deferred inflows 662 - 662 Pension related deferred inflows 1 8 9 OPEB related deferred inflows 3 80 83 Total deferred inflows of resources 666 88 754 Net Position Net investment in capital assets 22,132 19,908 42,040 Restricted for future improvements 100 304 404 Unrestricted 598 1,987 2,585 Total net position 22,830$ 22,199$ 45,029$ City of Iowa City, Iowa Combining Statement of Net Position Nonmajor Enterprise Funds June 30, 2024 (amounts expressed in thousands) 104 Airport Parking Total Operating Revenues: Charges for services 281$ 5,459$ 5,740$ Miscellaneous 31 14 45 Total operating revenues 312 5,473 5,785 Operating Expenses: Personal services 107 2,439 2,546 Commodities 22 578 600 Services and charges 537 1,771 2,308 666 4,788 5,454 Depreciation & amortization 1,022 1,342 2,364 Total operating expenses 1,688 6,130 7,818 Operating loss (1,376) (657) (2,033) Nonoperating Revenues (Expenses): Operating grants 117 - 117 Lease revenue 115 - 115 Interest income 16 213 229 Total nonoperating revenues 248 213 461 Loss before capital contributions and transfers (1,128) (444) (1,572) Capital contributions 632 18 650 Transfers in 218 60 278 Transfers out - (75) (75) Change in net position (278) (441) (719) Net Position, Beginning 23,108 22,640 45,748 Net Position, Ending 22,830$ 22,199$ 45,029$ Nonmajor Enterprise Funds and Changes in Fund Net Position Combining Statement of Revenues, Expenses City of Iowa City, Iowa (amounts expressed in thousands) For the Year Ended June 30, 2024 105 Airport Parking Total Cash Flows From Operating Activities Receipts from customers and users 302$ 5,477$ 5,779$ Payments to suppliers (567) (3,016) (3,583) Payments to employees (109) (2,387) (2,496) Net cash flows used for operating activities (374) 74 (300) Cash Flows From Noncapital Financing Activities Operating grants received 118 2 120 Transfers from other funds 218 60 278 Transfers to other funds - (75) (75) Advances from other funds - - - Repayment of advances from other funds (85) (379) (464) Net cash flows from (used for) noncapital financing activities 251 (392) (141) Cash Flows From Capital and Related Financing Activities Capital grants received 315 - 315 Lease revenues received 115 - 115 Acquisition and construction of property and equipment (335) (238) (573) Net cash flows used for capital and related financing activities 95 (238) (143) Cash Flows From Investing Activities Interest on investments 16 196 212 Net increase (decrease) in cash and cash equivalents (12) (360) (372) Cash and Cash Equivalents, Beginning 120 4,590 4,710 Cash and Cash Equivalents, Ending 108$ 4,230$ 4,338$ Reconciliation of operating loss to net cash flows from (used for) operating activities: Operating loss (1,376)$ (657)$ (2,033)$ Adjustments to reconcile operating loss to net cash flows used for operating activities: Depreciation expense 1,022 1,342 2,364 Changes in: Receivables: Accounts and unbilled usage (7) 3 (4) Due from other governments (3) - (3) Accounts payable (8) (667) (675) Accrued liabilities - 10 10 Net pension liability 8 159 167 Deferred outflows of resources (8) (122) (130) Deferred inflows of resources (4) (53) (57) Other post employment benefits asset/obligation 1 43 44 Total adjustments 1,002 731 1,733 Net cash flows used for operating activities (374)$ 74$ (300)$ Noncash Investing, Capital, and Financing Activities: Capital grants not yet received 631$ 18$ 649$ Operating grants not yet received 120$ -$ 120$ CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS For the Year Ended June 30, 2024 (amounts expressed in thousands) 106 Internal Service Funds Internal Service Funds account for goods and services provided by one department to other City departments on a cost-reimbursement basis. The funds in this category are: Equipment Maintenance Fund – accounts for the provision of maintenance for City vehicles, equipment and vehicle rental from a central vehicle pool, and two-way radios provided to other City departments. Central Services Fund – accounts for the support services of photocopying, mail and overnight shipping provided to other City departments. Loss Reserve Fund – accounts for the property, liability, Workers’ Compensation and health insurance premiums and claims activity for City departments, including the self-insured retention portion. Information Technology Fund – accounts for the accumulation and allocation of costs associated with telecommunications and data processing, including the operation and replacement of equipment. 107 Equipment Central Loss Information Maintenance Services Reserve Technology Total Assets Current assets: Equity in pooled cash and investments 22,991$ 934$ 23,071$ 4,211$ 51,207$ Receivables: Accounts and unbilled usage 122 - 53 4 179 Interest 109 8 166 32 315 Lease - - - 20 20 Due from other governments 17 - - - 17 Inventories 670 - - - 670 Total current assets 23,909 942 23,290 4,267 52,408 Noncurrent assets: Capital assets: Land 685 - - - 685 Buildings 1,370 - - 183 1,553 Improvements other than buildings 50 - - - 50 Machinery and equipment 26,704 147 19 1,858 28,728 Infrastructure - - - 3,634 3,634 Accumulated depreciation (15,439) (76) (19) (2,336) (17,870) IT subscriptions - - - 651 651 Accumulated amortization - - - (534) (534) Construction in progress 832 - - 498 1,330 Total noncurrent assets 14,202 71 - 3,954 18,227 Total assets 38,111 1,013 23,290 8,221 70,635 Deferred Outflows of Resources Pension related deferred outflows 170 5 34 198 407 OPEB related deferred outflows 30 3 3 30 66 Total deferred outflows of resources 200 8 37 228 473 Liabilities Current liabilities: Accounts payable 268 7 59 151 485 Accrued liabilities 21 - 2,401 27 2,449 Employee vested benefits 40 1 9 29 79 Subscription liability - - - 59 59 Total current liabilities 329 8 2,469 266 3,072 Noncurrent liabilities: Employee vested benefits 29 - 7 24 60 Net pension liability 431 14 87 507 1,039 Other post employment benefits liability 150 14 14 150 328 Total noncurrent liabilities 610 28 108 681 1,427 Total liabilities 939 36 2,577 947 4,499 Deferred Inflows of Resources Lease related deferred inflows - - - 20 20 Pension related deferred inflows 5 - 1 6 12 OPEB related deferred inflows 38 4 3 38 83 43 4 4 64 115 Net Position Net investment in capital assets 14,202 71 - 3,895 18,168 Unrestricted 23,127 910 20,746 3,543 48,326 Total net position 37,329$ 981$ 20,746$ 7,438$ 66,494$ (amounts expressed in thousands) City of Iowa City, Iowa Combining Statement of Net Position Internal Service Funds June 30, 2024 108 Equipment Central Loss Information Maintenance Services Reserve Technology Total Operating Revenues: Charges for services 7,931$ 181$ 14,977$ 2,791$ 25,880$ Total operating revenues 7,931 181 14,977 2,791 25,880 Operating Expenses: Personal services 1,067 36 352 1,417 2,872 Commodities 2,169 5 1 833 3,008 Services and charges 812 114 12,014 597 13,537 4,048 155 12,367 2,847 19,417 Depreciation & amortization 2,259 28 - 363 2,650 Total operating expenses 6,307 183 12,367 3,210 22,067 Operating income (loss)1,624 (2) 2,610 (419) 3,813 Nonoperating Revenues: Gain (loss) on disposal of capital assets 204 - - 3 207 Lease Revenue - - - 20 20 Interest income 1,008 47 1,095 212 2,362 Interest expense - - - (3) (3) Total nonoperating revenues 1,212 47 1,095 232 2,586 Income before transfers 2,836 45 3,705 (187) 6,399 Transfers in 378 1 4 116 499 Change in net position 3,214 46 3,709 (71) 6,898 Net Position, Beginning 34,115 935 17,037 7,509 59,596 Net Position, Ending 37,329$ 981$ 20,746$ 7,438$ 66,494$ (amounts expressed in thousands) City of Iowa City, Iowa Combining Statement of Revenues, Expenses Internal Service Funds For the Year Ended June 30, 2024 and Changes in Fund Net Position 109 Equipment Central Loss Information Maintenance Services Reserve Technology Total Cash Flows From Operating Activities Receipts from users 7,905$ 181$ 15,018$ 2,789$ 25,893$ Payments to suppliers (2,945) (123) (12,892) (1,395) (17,355) Payments to employees (1,188) (39) (359) (1,393) (2,979) Net cash flows from operating activities 3,772 19 1,767 1 5,559 Cash Flows From Noncapital Financing Activities Transfers from other funds 378 1 4 116 499 Net cash flows from (used for) noncapital financing activities 378 1 4 116 499 Cash Flows From Capital and Related Financing Activities Acquisition and construction of property and equipment (2,843) (13) - (435) (3,291) Lease revenues received - - - 20 20 Interest paid on subsciption liability - - - (3) (3) Principal paid on subsciption liability - - - (57) (57) Proceeds from sale of property 231 - - 3 234 Net cash flows used for capital and related financing activities (2,612) (13) - (472) (3,097) Cash Flows From Investing Activities Interest on investments 949 43 999 196 2,187 Net increase in cash and cash equivalents 2,487 50 2,770 (159) 5,148 Cash and Cash Equivalents, Beginning 20,504 884 20,301 4,370 46,059 Cash and Cash Equivalents, Ending 22,991$ 934$ 23,071$ 4,211$ 51,207$ Reconciliation of operating income to net cash flows from operating activities: Operating income 1,624$ (2)$ 2,610$ (419)$ 3,813$ Adjustments to reconcile operating income to net cash flows from operating activities: Depreciation/amortization expense 2,259 28 - 363 2,650 Changes in: Receivables: Accounts and unbilled usage (88) - 41 (4) (51) Due from other governments 62 - - 2 64 Inventories (39) - - - (39) Accounts payable 75 (4) (206) 35 (100) Accrued liabilities 5 - (670) 8 (657) Employee vested benefits 3 (2) 8 11 20 Net pension liability 53 3 9 117 182 Deferred outflows of resources (62) (3) (15) (90) (170) Deferred inflows of resources (64) (2) (11) (43) (120) Other post employment benefits liability (56) 1 1 21 (33) Total adjustments 2,148 21 (843) 420 1,746 Net cash flows from operating activities 3,772$ 19$ 1,767$ 1$ 5,559$ Noncash Investing, Capital, and Financing Activities: Contributions of capital assets from government and others -$ -$ -$ -$ -$ (amounts expressed in thousands) City of Iowa City, Iowa Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2024 110 Statistical Section Tabs Statistical Section This part of the City of Iowa City’s annual comprehensive financial report represents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health. Contents Page Financial Trends 113 These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time. Revenue Capacity 118 These schedules contain information to help the reader assess the government’s most significant local revenue source, the property tax. Debt Capacity 128 These schedules present information to help the reader assess the affordability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future. Demographic and Economic Information 134 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place. Operating Information 136 These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the government provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial report for the relevant year. 111 112 2015 20161 2017 2018 2019 2020 2021 2022 2023 2024 Governmental activities Net investment in capital assets 153,729$ 163,362$ 183,651$ 203,077$ 208,028$ 220,004$ 228,418$ 230,285$ 235,218$ 238,351$ Restricted 36,447 42,154 47,676 41,490 38,819 33,578 33,664 36,900 40,048 44,316 Unrestricted 15,520 18,402 16,264 17,646 20,124 21,819 25,528 39,505 52,971 68,947 Total governmental activities net position 205,696$ 223,918$ 247,591$ 262,213$ 266,971$ 275,401$ 287,610$ 306,690$ 328,237$ 351,614$ Business-type activities Net investment in capital assets 279,272$ 279,679$ 285,912$ 294,109$ 304,111$ 314,523$ 315,915$ 325,787$ 325,391$ 332,087$ Restricted 22,389 22,269 21,238 22,219 18,055 17,558 14,859 13,216 7,959 5,292 Unrestricted 57,367 69,472 76,664 73,126 77,224 76,661 84,097 92,370 104,736 112,850 Total business-type activities net position 359,028$ 371,420$ 383,814$ 389,454$ 399,390$ 408,742$ 414,871$ 431,373$ 438,086$ 450,229$ Primary government Net investment in capital assets 433,001$ 443,041$ 469,563$ 497,186$ 512,139$ 534,527$ 544,333$ 556,072$ 560,609$ 570,438$ Restricted 58,836 64,423 68,914 63,709 56,874 51,136 48,523 50,116 48,007 49,608 Unrestricted 72,887 87,874 92,928 90,772 97,348 98,480 109,625 131,875 157,707 181,797 Total primary government net position 564,724$ 595,338$ 631,405$ 651,667$ 666,361$ 684,143$ 702,481$ 738,063$ 766,323$ 801,843$ 1 The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015. City of Iowa City, Iowa Net Position by Component Last Ten Fiscal Years (Accrual basis of accounting) (amounts expressed in thousands) 113 2015 20161 2017 2018 2019 2020 2021 2022 2023 2024 Expenses Governmental activities: Public safety 21,193$ 22,029$ 24,002$ 25,191$ 26,265$ 29,252$ 30,411$ 23,609$ 26,450$ 29,252$ Public works 11,037 10,839 12,032 12,813 16,324 16,071 16,363 17,746 19,051 16,733 Culture and recreation 14,049 14,422 15,525 16,363 16,009 16,233 15,774 16,923 18,135 18,664 Community and economic development 7,093 6,786 8,253 12,019 16,022 9,383 8,549 11,074 13,570 12,269 General government 7,752 6,240 6,124 6,858 7,524 7,693 10,529 7,439 8,774 10,442 Debt service 1,517 1,287 1,481 1,414 1,444 1,452 1,561 1,553 1,622 1,624 Total governmental activities expenses 62,641 61,603 67,417 74,658 83,588 80,084 83,187 78,344 87,602 88,984 Business-type activities: Wastewater 12,131 11,866 11,233 11,392 11,413 10,807 12,520 12,105 12,869 12,843 Water 8,403 8,149 8,921 9,472 9,543 9,302 10,177 9,477 9,672 11,022 Sanitation 8,114 8,735 9,123 9,408 10,858 10,145 10,045 10,113 10,282 12,907 Housing authority 7,873 8,378 8,798 9,535 10,170 10,021 10,141 11,832 12,067 13,277 Parking 4,678 4,460 4,620 5,590 5,461 5,014 4,613 5,381 6,436 6,067 Airport 1,612 1,597 1,402 1,680 1,466 2,511 1,835 1,509 1,433 1,677 Stormwater 2,091 1,989 2,432 1,844 1,832 2,198 2,105 2,190 2,393 2,147 Cable television 704 - - - - - - - - - Transit 7,379 7,486 7,263 8,071 8,833 9,041 8,107 8,573 9,276 10,604 Total business-type activities expenses 52,985 52,660 53,792 56,992 59,576 59,039 59,543 61,180 64,428 70,544 Total primary government expenses 115,626$ 114,263$ 121,209$ 131,650$ 143,164$ 139,123$ 142,730$ 139,524$ 152,030$ 159,528$ Program Revenues Governmental activities: Charges for services Public safety 3,926$ 4,813$ 5,286$ 4,438$ 4,870$ 4,430$ 4,277$ 4,625$ 5,129$ 5,331$ Public works 388 628 724 62 290 243 482 149 112 349 Culture and recreation 801 823 842 836 854 508 322 627 696 701 Community and economic development 50 1,044 36 441 548 59 1,837 3,625 2,066 20 General government 2,975 1,252 1,524 1,520 1,717 1,551 1,582 1,728 1,871 1,801 Operating grants and contributions 8,701 9,941 10,828 10,245 13,758 13,113 12,479 14,491 15,550 23,598 Capital grants and contributions 11,556 3,999 9,952 1,459 1,972 1,915 2,845 4,316 3,113 1,493 Total governmental activities program revenues 28,397 22,500 29,192 19,001 24,009 21,819 23,824 29,561 28,537 33,293 Business-type activities: Charges for services: Wastewater 12,189 12,266 12,277 12,626 12,831 12,357 12,155 12,121 12,333 12,795 Water 8,527 9,134 9,275 9,473 9,640 10,048 9,934 10,127 10,473 10,997 Sanitation 9,015 9,215 9,927 10,014 10,017 10,193 11,944 11,289 11,853 12,767 Housing authority 237 300 321 323 295 280 296 282 307 350 Parking 5,502 5,438 5,453 5,648 5,982 4,354 3,758 5,054 5,296 5,459 Airport 349 333 345 348 361 371 376 372 389 396 Stormwater 1,147 1,168 1,544 1,560 1,568 1,730 1,701 1,704 1,730 1,886 Cable Television 750 - - - - - - - - - Transit 2,289 2,099 2,089 2,216 2,171 1,802 1,385 1,745 1,822 958 Capital grants and contributions: Wastewater 1,370 3,415 2,226 1,913 1,827 2,550 1,580 964 167 360 Capital grants and contributions: Water 581 254 869 483 488 965 834 481 235 266 Capital grants and contributions: Sanitation - - - 22 13 - - - - - Capital grants and contributions: Airport 137 260 58 49 38 134 267 154 690 632 Capital grants and contributions: Stormwater 792 370 1,251 892 902 876 1,230 696 540 186 Capital grants and contributions: Parking - - - - - - - - - 18 Capital grants and contributions: Transit - 308 395 3,827 - - 77 3,416 - - Operating grants and contributions: Housing authority 7,628 8,318 8,532 9,065 9,443 9,875 9,691 11,481 11,529 13,297 Operating grants and contributions: Water 2 - - - - 2 45 42 6 - Operating grants and contributions: Airport 232 128 69 72 14 896 332 259 147 117 Operating grants and contributions: Sanitation 25 3 - 3 104 20 18 105 - - Operating grants and contributions: Wastewater 21 - - - - 8 - 77 - - Operating grants and contributions: Stormwater 279 95 - 2 - - - - - - Operating grants and contributions: Parking - - - - - 3 - 3 - - Operating grants and contributions: Transit 2,082 2,095 2,235 2,088 2,152 3,107 3,016 5,096 5,059 5,548 Total business-type activities program revenues 53,154 55,199 56,866 60,624 57,846 59,571 58,639 65,468 62,576 66,032 Total primary government revenues 81,551$ 77,699$ 86,058$ 79,625$ 81,855$ 81,390$ 82,463$ 95,029$ 91,113$ 99,325$ Net (Expense) / Revenues Governmental activities (34,244)$ (39,103)$ (38,225)$ (55,657)$ (59,579)$ (58,265)$ (59,363)$ (48,783)$ (59,065)$ (55,691)$ Business-type activities 169 2,539 3,074 3,632 (1,730) 532 (904) 4,288 (1,852) (4,512) Total primary government net expense (34,075)$ (36,564)$ (35,151)$ (52,025)$ (61,309)$ (57,733)$ (60,267)$ (44,495)$ (60,917)$ (60,203)$ General Revenues and Other Changes in Net Position Governmental activities: General revenues: Property taxes 52,205$ 53,114$ 57,649$ 59,046$ 61,739$ 62,846$ 69,482$ 70,678$ 70,824$ 70,578$ Other taxes 2,810 2,717 2,802 2,706 2,935 2,696 2,576 3,541 3,786 3,774 Grants and contributions not restricted to specific purposes 1,048 2,080 1,583 1,547 1,552 1,513 1,587 1,555 1,244 1,675 Earnings (loss) on investments 1,188 1,045 1,397 2,368 3,257 2,585 841 (544) 4,325 8,894 Miscellaneous 5,518 4,464 3,369 3,656 3,329 3,331 3,030 3,524 3,984 3,903 Gain on sale of assets 135 218 2,151 140 186 111 213 257 1,242 418 Transfers (10,057) (6,395) (7,053) 1,814 (8,661) (6,387) (6,157) (11,148) (4,876) (10,174) Reassignments - 82 - - - - - - - - Total governmental activities 52,847 57,325 61,898 71,277 64,337 66,695 71,572 67,863 80,529 79,068 (continued) City of Iowa City, Iowa Changes in Net Position Last Ten Fiscal Years (Accrual basis of accounting) (amounts expressed in thousands) 114 2015 20161 2017 2018 2019 2020 2021 2022 2023 2024 Business-type activities: General revenues: Earnings (loss) on investments 707 715 938 1,496 2,166 1,794 426 (190) 2,605 5,253 Gain on sale of assets 856 2,463 69 2,438 1 74 22 23 1 23 Miscellaneous 374 362 1,260 456 838 565 428 1,233 1,083 1,205 Transfers 10,057 6,395 7,053 (1,814) 8,661 6,387 6,157 11,148 4,876 10,174 Reassignments - (82) - - - - - - - - Special items (574) - - - - - - - - - Total business-type activities 11,420 9,853 9,320 2,576 11,666 8,820 7,033 12,214 8,565 16,655 Total primary government 64,267$ 67,178$ 71,218$ 73,853$ 76,003$ 75,515$ 78,605$ 80,077$ 89,094$ 95,723$ Change in Net Position Governmental activities 18,603$ 18,222$ 23,673$ 15,620$ 4,758$ 8,430$ 12,209$ 19,080$ 21,464$ 23,377$ Business-type activities 11,589 12,392 12,394 6,208 9,936 9,352 6,129 16,502 6,713 12,143 Total primary government 30,192$ 30,614$ 36,067$ 21,828$ 14,694$ 17,782$ 18,338$ 35,582$ 28,177$ 35,520$ 1 The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015. City of Iowa City, Iowa Changes in Net Position (continued) Last Ten Fiscal Years (Accrual basis of accounting) (amounts expressed in thousands) 115 2015 20161 2017 2018 2019 2020 2021 2022 2023 2024 General Fund Nonspendable 69$ 69$ 788$ 793$ 887$ 549$ 469$ 1,889$ 2,127$ 6,404$ Restricted 25,291 18,975 9,974 1,942 1,808 1,747 1,455 2,015 2,310 2,455 Committed - 4,699 5,199 4,962 - - - - - - Assigned - 1,143 1,342 1,437 3,565 5,708 9,883 14,852 19,622 18,437 Reserved 4,483 - - - - - - - - - Unassigned 19,286 23,366 24,793 28,516 34,358 35,369 40,414 40,074 37,977 46,149 Total general fund 49,129$ 48,252$ 42,096$ 37,650$ 40,618$ 43,373$ 52,221$ 58,830$ 62,036$ 73,445$ All other Governmental Funds Nonspendable -$ -$ 344$ 165$ 224$ 278$ 218$ 243$ 269$ 274$ Restricted 27,897 38,266 63,941 64,033 50,966 48,728 51,931 57,346 61,230 61,842 Unassigned - - - (38) (59) (611) (27) (417) (251) (3) Total all other governmental funds 27,897$ 38,266$ 64,285$ 64,160$ 51,131$ 48,395$ 52,122$ 57,172$ 61,248$ 62,113$ 1 The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015. City of Iowa City, Iowa Fund Balances, Governmental Funds Last Ten Fiscal Years (Modified accrual basis of accounting) (amounts expressed in thousands) 116 2015 20161 2017 2018 2019 2020 2021 2022 2023 2024 Revenues: Property taxes and assessments 55,014$ 55,831$ 60,452$ 61,753$ 64,672$ 65,542$ 72,058$ 74,220$ 74,611$ 74,353$ Licenses and permits 1,806 3,056 3,521 2,734 2,981 2,352 2,541 2,786 2,854 3,036 Intergovernmental 21,086 20,230 24,140 14,944 16,828 18,603 20,127 22,756 23,443 30,127 Charges for services 2,204 3,357 2,355 2,295 2,690 1,715 3,446 5,314 3,890 1,965 Fines and forfeits - 760 750 695 776 609 375 434 372 392 Use of money and property 1,080 946 1,235 1,937 2,564 1,872 773 506 3,547 6,533 Miscellaneous 7,045 2,913 2,101 2,875 2,261 2,440 2,112 2,591 3,477 3,059 Total governmental activities revenues 88,235$ 87,093$ 94,554$ 87,233$ 92,772$ 93,133$ 101,432$ 108,607$ 112,194$ 119,465$ Expenditures Current Public safety 21,996$ 21,701$ 22,513$ 23,360$ 24,295$ 25,637$ 26,167$ 26,821$ 27,649$ 29,033$ Public works 12,071 9,466 9,186 10,052 10,894 10,586 11,447 10,883 11,440 12,131 Culture and recreation 11,821 12,257 13,341 14,208 13,709 13,653 12,979 15,090 16,009 16,992 Community and economic development 5,711 5,346 7,695 11,074 15,723 8,627 8,305 11,076 13,629 12,213 General government 7,608 6,007 5,882 6,017 6,579 6,789 9,788 7,907 8,748 10,108 Debt service Principal 12,564 13,230 13,305 11,895 12,080 11,385 12,745 11,220 11,085 11,125 Interest 1,669 1,475 1,597 1,570 1,589 1,648 1,905 1,956 2,072 2,162 Capital projects 14,762 14,848 18,405 28,225 22,632 21,211 12,173 12,073 20,824 14,115 Total expenditures 88,202$ 84,330$ 91,924$ 106,401$ 107,501$ 99,536$ 95,509$ 97,026$ 111,456$ 107,879$ Excess (deficiency) of revenues over (under) expenditures 33$ 2,763$ 2,630$ (19,168)$ (14,729)$ (6,403)$ 5,923$ 11,581$ 738$ 11,586$ Other financing sources (uses): Issuance of long-term debt 7,785$ 9,405$ 22,570$ 11,995$ 12,535$ 12,145$ 11,325$ 10,255$ 9,105$ 10,230$ Sale of capital assets 165 252 2,292 140 758 111 233 256 1,538 211 Premium (discount) on issuance of bonds 199 441 120 236 81 927 1,464 553 894 720 Transfers in 13,089 25,133 34,675 34,666 25,663 21,236 21,223 24,229 24,631 33,212 Transfers out (23,430) (28,502) (47,033) (32,440) (34,369) (27,997) (27,593) (35,215) (29,624) (43,685) Total other financing sources (uses)(2,192)$ 6,729$ 12,624$ 14,597$ 4,668$ 6,422$ 6,652$ 78$ 6,544$ 688$ Net change in fund balances (2,159)$ 9,492$ 15,254$ (4,571)$ (10,061)$ 19$ 12,575$ 11,659$ 7,282$ 12,274$ Debt service as a percentage of noncapital expenditures 19.8%21.2%19.9%17.1%15.6%15.9%17.1%14.6%13.8%14.0% Debt services as a percentage of expenditures and transfers 12.7%13.0%10.7%9.7%9.6%10.2%11.9%10.0%9.3%8.8% 1 The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015. City of Iowa City, Iowa Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) 117 Fiscal Utility Year Property Tax Road Use Tax Hotel/Motel Tax Franchise Fee Total 2015 53,056 7,231 1,057 902 62,246 2016 53,878 8,320 1,079 874 64,151 2017 58,375 8,672 1,137 939 69,123 2018 59,730 8,427 1,046 976 70,179 2019 62,407 8,820 1,302 965 73,494 2020 63,523 9,163 1,135 884 74,705 2021 70,126 10,077 938 994 82,135 2022 71,362 9,900 1,708 1,149 84,119 2023 71,608 10,346 1,885 1,117 84,956 2024 71,326 10,580 2,043 983 84,932 City of Iowa City, Iowa General Government Tax Revenues by Source Last Ten Fiscal Years (Modified accrual basis of accounting) (amounts expressed in thousands) 118 Assessed Valuation Tax Collection Year: FY2024 FY2023 FY2022 FY2021 FY2020 FY2019 FY2018 FY2017 FY2016 FY2015 Residential 5,932,542,314$ 5,302,710,934$ 5,067,120,030$ 4,958,648,218$ 4,399,451,083$ 4,255,597,838$ 4,001,761,478$ 3,882,757,454$ 3,603,743,609$ 3,488,112,611$ Agricultural (taxed at Ag rate)1,650,370 1,574,220 1,727,980 1,748,000 2,539,080 2,625,810 3,425,692 3,720,671 3,553,520 3,680,920 Multi-Residential 1 - 544,717,108 539,398,739 539,636,381 489,176,499 471,420,082 411,460,472 410,426,868 - - Commercial 1,058,466,499 1,048,701,445 1,056,414,063 1,060,943,044 932,699,374 915,964,068 821,949,555 805,734,128 1,129,397,979 1,144,437,631 Industrial 77,109,703 77,491,638 79,998,654 80,663,794 76,905,588 71,553,904 72,635,554 73,206,895 74,399,739 80,153,614 Railroads 4,628,817 4,380,355 4,072,190 4,488,469 3,601,348 3,549,414 3,984,932 4,096,577 4,015,580 3,827,506 Utilities w'out Gas & Electric 269,478 2,779,716 4,339,508 6,152,547 7,386,408 7,099,293 6,734,894 7,375,066 8,239,789 9,599,528 Gross valuation 7,074,667,181 6,982,355,416 6,753,071,164 6,652,280,453 5,911,759,380 5,727,810,409 5,321,952,577 5,187,317,659 4,823,350,216 4,729,811,810 Less: Military exemption 2,150,172 2,239,068 2,392,784 2,435,380 2,489,088 2,579,836 2,635,396 2,727,994 2,828,002 2,939,122 Net valuation 7,072,517,009 6,980,116,348 6,750,678,380 6,649,845,073 5,909,270,292 5,725,230,573 5,319,317,181 5,184,589,665 4,820,522,214 4,726,872,688 Incremental value 134,159,857 133,492,758 142,496,667 89,469,635 115,175,495 85,379,709 80,577,275 72,666,677 42,307,287 21,131,574 Gas and Electric Utilities 161,652,144 134,787,151 126,171,274 118,583,613 109,124,421 97,050,716 94,582,279 92,987,351 87,728,294 78,642,915 Total Assessed valuation 7,368,329,010$ 7,248,396,257$ 7,019,346,321$ 6,857,898,321$ 6,133,570,208$ 5,907,660,998$ 5,494,476,735$ 5,350,243,693$ 4,950,557,795$ 4,826,647,177$ Percent change 1.655%3.263%2.354%11.809%3.824%7.520%2.696%8.074%2.567%3.392% Taxable Valuation Tax Collection Year: FY2024 FY2023 FY2022 FY2021 FY2020 FY2019 FY2018 FY2017 FY2016 FY2015 Assessment Limitation: Residential rollback 54.6501%54.1302%56.4094%55.0743%56.9180%55.6209%56.9391%55.6259%55.7335%54.4002% Agricultural rollback 91.6430%89.0412%84.0305%81.4832%56.1324%54.4480%47.4996%46.1068%44.7021%43.3997% Multi-Residential rollback1 N/A 63.75%67.50%71.25%75.00%78.75%82.50%86.25%NA NA Commercial and Railroad rollback 90.0%90.0%90.0%90.0%90.0%90.0%90.0%90.0%90.0%95.0% Industrial rollback 90.0%90.0%90.0%90.0%90.0%90.0%90.0%90.0%90.0%95.0% Uilities rollback 100.0%100.0%98.5%100.0%100.0%100.0%100.0%100.0%100.0%100.0% Residential 3,208,598,660$ 2,841,405,824$ 2,837,384,852$ 2,719,569,602$ 2,490,442,298$ 2,356,529,643$ 2,274,451,551$ 2,155,033,296$ 2,008,493,138$ 1,894,079,854$ Agricultural (taxed at Ag rate)1,512,444 1,401,705 1,452,029 1,424,328 1,425,151 1,429,547 1,618,090 1,706,955 1,588,496 1,597,501 Multi-Residential 1 - 343,613,885 360,829,356 382,070,966 363,613,829 368,969,925 337,946,106 353,335,857 - - Commercial 901,891,655 937,999,668 944,990,382 950,525,463 832,628,954 819,505,276 734,200,396 720,036,878 1,016,458,199 1,086,556,293 Industrial 68,348,823 69,541,657 71,998,513 72,596,824 68,970,889 64,152,540 64,688,055 65,301,535 66,959,765 76,128,877 Railroads 4,150,574 3,942,320 3,664,971 4,039,622 3,241,213 3,194,473 3,586,439 3,686,919 3,614,022 3,636,130 Utilities w'out Gas & Electric 269,478 2,779,716 4,276,538 6,152,547 7,386,408 7,099,293 6,734,894 7,375,066 8,239,789 9,599,528 Gross valuation 4,184,771,634 4,200,684,775 4,224,596,641 4,136,379,352 3,767,708,742 3,620,880,697 3,423,225,531 3,306,476,506 3,105,353,409 3,071,598,183 Less: Military exemption 2,150,172 2,239,068 2,392,784 2,435,380 2,489,088 2,579,836 2,635,396 2,727,994 2,828,002 2,939,122 Net valuation 4,182,621,462 4,198,445,707 4,222,203,857 4,133,943,972 3,765,219,654 3,618,300,861 3,420,590,135 3,303,748,512 3,102,525,407 3,068,659,061 Incremental value 134,159,857 133,492,758 131,180,258 84,077,937 115,175,495 85,379,369 80,559,947 72,650,838 33,331,128 21,131,574 Gas and Electric Utilities 43,501,718 44,017,962 40,595,608 40,156,239 42,719,065 41,797,475 41,702,196 44,986,783 46,785,426 47,004,994 Total Taxable Valuation 4,360,283,037$ 4,375,956,427$ 4,393,979,723$ 4,258,178,148$ 3,923,114,214$ 3,745,477,705$ 3,542,852,278$ 3,421,386,133$ 3,182,641,961$ 3,136,795,629$ Percent change -0.358%-0.410%3.189%8.541%4.743%5.719%3.550%7.501%1.462%3.320% Total Direct Tax Rate City of Iowa City 15.633$ 15.633$ 15.673$ 15.773$ 15.833$ 16.183$ 16.333$ 16.583$ 16.651$ 16.705$ Sources: Iowa Department of Management, IC Budget Notes: Property is reassessed in the odd numbered years to make adjustments to all property values, according to current market values. As per the Code of Iowa, all real property subject to taxation shall be valued at its actual value and, except as otherwise provided, shall be reassessed at 100% of its actual value. 1 Beginning in FY2024 Multi-Residential is inclued with Residential. City of Iowa City, Iowa Assessed and Taxable Value of Property Last Ten Fiscal Years 119 Fiscal Year:2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Levy Year:2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 City: General Fund 8.10000$ 8.10000$ 8.10000$ 8.10000$ 8.10000$ 8.10000$ 8.10000$ 8.10000$ 8.10000$ 8.10000$ Emergency Levy 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.24000 0.24000 0.20000 0.20000 Debt Service Fund 4.12963 3.92833 3.82846 3.57846 3.22846 2.97846 2.57846 2.47846 2.47846 2.47846 Employee Benefits 2.96331 3.11277 3.14415 3.14415 3.34415 3.24415 3.34415 3.34415 3.34415 3.34415 Capital Improvement 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 Other 1.51226 1.50986 1.51044 1.51044 1.51044 1.51044 1.51044 1.51044 1.51044 1.51044 Total City 16.70520$ 16.65096$ 16.58305$ 16.33305$ 16.18305$ 15.83305$ 15.77305$ 15.67305$ 15.63305$ 15.63305$ Johnson County 6.74168$ 6.90337$ 6.77140$ 6.85143$ 6.53594$ 6.49278$ 6.34581$ 6.16774$ 6.04075$ 6.43080$ Iowa City Community School District 13.69999 13.86773 13.98935 13.95855 14.85629 14.79097 14.83935 14.85066 14.93382 16.81865 Kirkwood 1.05754 1.06125 1.08048 1.13174 1.20354 1.21331 1.25730 1.31195 1.34462 1.39550 Other 0.32315 0.32784 0.32450 0.33036 0.30557 0.27066 0.33110 0.32744 0.30673 0.31388 Total Tax Rate 38.52756$ 38.81115$ 38.74878$ 38.60513$ 39.08439$ 38.60077$ 38.54661$ 38.33084$ 38.25897$ 40.59188$ Source: "Tax Levies for Johnson County, Iowa," compiled by the Johnson County Auditor. Note: Does not include the tax rate for agriculture. Taxpayers in the Iowa City Community School District Area On county web excel sheet ICI is the row that you use. For Total City Millage column N, ICSD column K, KCC column G. State of Iowa column H, Operating Millage and Total Direct and overlapping are calculated fields (per $1,000 assessed valuation) City of Iowa City, Iowa Property Tax Rates - Direct and Overlapping Governments Last Ten Fiscal Years 120 Collection Total Tax Current Tax Delinquent Tax Total Tax Year Levied Collections Collections1 Collections 2015 51,609 51,292 99.4 3 51,295 99.4 2016 52,034 52,074 100.1 0 52,074 100.1 2017 55,330 55,331 100.0 0 55,331 100.0 2018 56,458 56,346 99.8 1 56,347 99.8 2019 59,174 59,252 100.1 2 59,254 100.1 2020 60,297 58,971 97.8 1 58,972 97.8 2021 65,849 65,656 99.7 1058 66,714 101.3 2022 66,912 67,075 100.2 29 67,104 100.3 2023 66,474 66,259 99.7 3 66,262 99.7 2024 66,313 66,083 99.7 0 66,083 99.7 Source: Certificate of City Taxes and Johnson County Treasurer's Office Note: This schedule is presented on a cash basis of accounting. Taxes are collected by the Johnson County Treasurer and submitted to the City in the following month. Because of the month delay, some years will show Current Tax Collections in excess of the Total Tax Levied. 1 Delinquent tax collection is presented by collection year, rather than levy year, because information is not available from Johnson County Treasurer by levy year. City of Iowa City, Iowa Levies and Collections Last Ten Fiscal Years (Cash basis of accounting) (amounts expressed in thousands) Percent of Levy Collected Total as a Percent of Levy 121 % of Total % of Total Taxable Taxable Taxable Taxable Ten largest taxpayers1 Type of Business Valuation Rank Valuation Valuation Rank Valuation Rise at Riverfront Crossing Owner LLC Real Estate Developer -$ -N/A 68,695$ 1 1.58 % Tailwind Iowa City LLC Real Estate Mangment - -N/A 57,607 2 1.32 BBCS Hawkeye Housing LLC Real Estate Mangment - -N/A 50,041 3 1.15 1201 Gilbert LLC Real Estate Mangment - -N/A 45,412 4 1.04 Mid-American Energy Company Public Gas and Electric Utility 44,302 1 1.41 %32,055 5 0.74 Hollingsworth Capital Partners Iowa LLC Real Estate Developer - -N/A 31,989 6 0.73 Webber - Iowa LLC Domestic Limited Liability Company --N/A 31,810 7 0.73 Augusta Place LLC Real Estate Mangment --N/A 29,355 8 0.67 Vesper Iowa City LLC Real Estate Mangment --N/A 28,000 9 0.64 McLaughlin, Michael T Real Estate Mangment & Dev --N/A 25,787 10 0.59 ACT Inc (Am College Testing Prgrm)Educational Testing Service 44,151 2 1.41 - -N/A Ann Gerdin Trust (formerly Russell Gerdin)Warehousing 21,233 3 0.68 - -N/A Dealer Properties IC LLC (Billion Auto)Car Dealerships 18,676 4 0.60 - -N/A Proctor & Gamble LLC Manufacturing Company 15,419 5 0.49 - -N/A Alpha Inc. Industrial 14,616 6 0.47 - -N/A CCAL 100 Hawk Ridge Drive LLC The Lodge Housing Complex 13,171 7 0.42 - -N/A National Computer Systems (Pearson)Information Services 12,428 8 0.40 - -N/A Wal-Mart Real Estate Retail 12,078 9 0.39 - -N/A Kobrin Deve Co Inc (Southgate Dev Co)Real Estate Developer 11,712 10 0.37 - -N/A 207,786$ 6.62 %400,751$ 9.19 % Sources: 1City of Iowa City Assessor's Office, Johnson County Auditors Office City of Iowa City, Iowa Principal Taxpayers Current Year and Nine Years Ago (amounts expressed in thousands) 2015 2024 122 123 Customer Name Charges Rank Percentage Charges Rank Percentage Proctor & Gamble 611,186$ 1 7.51 %697,783$ 1 6.50 % Veterans Administration Medical Center 102,194 2 1.26 189,497 2 1.76 Tailwind Iowa City LLC formerly Dolphin Lake/Lakeside Manor 76,188 3 0.94 88,513 3 0.82 Graduate Hotel (formerly RBD Iowa City LLC &Sheraton Hotel)35,860 8 0.44 82,527 4 0.77 Mercy Hospital 66,050 4 0.81 79,859 5 0.74 Campus Apartments 59,240 6 0.73 78,756 6 0.73 Dominium JIT Srv formerly Mark IV Apts 60,058 5 0.74 62,832 7 0.59 Rise at Riverfront Crossing - -N/A 50,735 8 0.47 Seville Apts 31,979 10 0.39 46,396 9 0.43 Oaknoll Retirement Residence - -N/A 45,679 10 0.43 University of Iowa, Mayflower Apt.41,017 7 0.50 --N/A CCAL 100 Hawk Ridge Drive 32,187 9 0.40 --N/A 1,115,959$ 13.72 %1,422,577$ 13.24 % Total Water System Charges 8,136,670$ 10,739,382$ Sources: City of Iowa City Revenue Division City of Iowa City, Iowa Larger Water System Customers Current Year and Nine Years Ago 20242015 124 Fiscal Water Sales Water System Year Cubic Feet Sold Charges 20151 240,423,612 8,161,522 2016 255,524,943 8,758,683 2017 267,511,531 9,156,005 2018 293,046,636 9,953,510 2019 289,055,329 10,139,587 2020 285,102,926 10,705,168 2021 237,035,139 9,459,987 2022 237,722,261 10,209,841 2023 249,812,176 11,172,513 2024 246,654,877 10,739,382 Sources: City of Iowa City Revenue Department Notes: 1Beginning in March 2015, Water Sales by Cubic Feet Sold also includes unbilled usage. City of Iowa City Sales History and Water System Charges Last Ten Fiscal Years 125 Customer Name Charges Rank Percentage Charges Rank Percentage University of Iowa 1,831,543$ 1 14.95 %1,972,383$ 1 14.64 % Proctor & Gamble 1,111,847 2 9.08 802,484 2 5.96 Iowa City Landfill 137,895 3 1.13 196,737 3 1.46 Veterans Administration Medical Center 126,782 4 1.04 185,096 4 1.37 Graduate Hotel (formerly RBD Iowa City LLC)59,569 10 0.49 115,118 5 0.85 Mercy Hospital 105,044 6 0.86 106,480 6 0.79 Tailwind Iowa City LLC formerly Dolphin Lake 123,920 5 1.01 91,060 7 0.68 Campus Apartments 73,486 8 0.60 83,052 8 0.62 Rise at Riverfront Crossing - -N/A 66,416 9 0.49 Dominium JIT Srv formerly Mark IV Apts 80,811 7 0.66 64,954 10 0.48 University of Iowa/Mayflower Apartments 68,369 9 0.56 --N/A 3,719,266$ 30.37 %3,683,780$ 27.34 % Total Sewer System Charges 12,248,082$ 13,474,832$ Sources: City of Iowa City Revenue Department 2024 City of Iowa City, Iowa Larger Sewer System Charges Current Year and Nine Years Ago 2015 126 Fiscal Sewer Sales Sewer System Year Cubic Feet Sold Charges 20151 266,830,947 12,278,153 2016 270,547,701 12,022,203 2017 277,712,785 12,404,360 2018 283,246,320 12,524,540 2019 288,537,266 12,822,250 2020 279,106,456 12,503,764 2021 265,605,446 11,819,500 2022 265,503,359 12,407,521 2023 304,100,257 12,605,172 2024 308,883,017 13,474,832 Sources: City of Iowa City Revenue Department Notes: 1Beginning in March 2015, Sewer Sales by Cubic Feet Sold also includes unbilled usage. City of Iowa City, Iowa Sales History and Sewer System Charges Last Ten Fiscal Years 127 General Capital General Capital Total Percentage Fiscal Obligation Revenue Loan Subscription Obligation Revenue Subscription Loan Primary of Personal Per Year Bonds1 Bonds1 Note Liability Bonds1 Bonds1 Lease Liability Note Government Income2 Capita2 2015 59,421,203 2,618,892 210,784 - 590,000 45,566,903 - - - 108,407,782 1.40 1,475 2016 55,998,392 2,491,016 210,784 - 295,000 39,951,661 - - - 98,946,853 1.23 1,327 2017 52,571,254 15,168,140 210,784 - - 34,420,914 14,482,714 - - 116,853,806 1.34 1,544 2018 52,883,524 15,035,264 210,784 - - 29,095,062 11,958,305 - - 109,182,939 1.18 1,442 2019 53,402,638 14,902,388 210,784 - - 21,155,710 9,413,024 - - 99,084,544 1.02 1,319 2020 55,007,945 14,764,512 210,784 - - 16,786,358 - - - 86,769,599 0.86 1,158 2021 56,685,493 12,781,636 210,784 - - 12,242,006 - - - 81,919,919 0.77 1,098 2022 56,823,948 11,818,760 210,784 443,158 - 7,645,204 - - - 76,498,696 0.66 1,009 2023 56,219,091 10,880,000 210,784 316,763 - 3,701,946 - - - 71,328,584 0.60 943 2024 56,456,920 9,925,000 210,784 254,298 - 1,921,712 - 151,403 788,425 69,708,542 0.57 917 Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements. 1 Bonds reported net of related premiums and discounts. 2 Population and personal income information can be found on page 134. City of Iowa City, Iowa Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-Type Activities 128 Gross General Less: Debt Net General Net Bonded Debt Net Bonded Fiscal Obligation Service Obligation per $1,000 of Debt Year Bonded Debt 1 Fund Balance Bonded Debt Assessed Value Per Capita2 2015 60,011 3,921 56,090 10.97 : 1000 764 2016 56,293 6,463 49,830 10.04 : 1000 671 2017 52,571 7,221 45,350 8.38 : 1000 599 2018 52,884 8,423 44,461 8.09 : 1000 587 2019 53,403 9,514 43,889 7.43 : 1000 584 2020 55,008 9,590 45,418 7.40 : 1000 606 2021 56,685 7,388 49,297 7.19 : 1000 661 2022 56,824 7,190 49,634 7.07 : 1000 654 2023 56,219 7,246 48,973 6.76 : 1000 647 2024 56,457 7,608 48,849 6.63 : 1000 643 Notes: 1 General Obligation bonds, net of related premiums and discounts. 2 Population data can be found on page 134. City of Iowa City Iowa Ratios of General Obligation Bonded Debt1 to Assessed Value and Net Bonded Debt per Capita Last Ten Fiscal Years (amounts expressed in thousands, except per capita) 129 City of Iowa City, Iowa Computation of Direct and Overlapping Debt June 30, 2024 (amounts expressed in thousands, except per capita) Total General Percent Amount Long-Term Applicable Applicable Name of Direct Debt to the City of to the City of Governmental Unit Outstanding Iowa City Iowa City City of Iowa City2 66,847$ 100.00 %66,847$ Iowa City Community School District1 156,815 57.65 90,404 Johnson County1 25,502 41.87 10,678 Clear Creek- Amana Community School District1 89,794 0.03 27 Kirkwood Comm. College1 124,495 14.12 17,579 Total Overlapping Debt 396,606 118,688 Total Direct & Overlapping Debt 463,453$ 185,535$ 1 Long term debt outstanding includes only GO debt. 2Net direct debt includes premiums & discounts Source: Johnson County Auditor's Office. each overlapping government. However,this does not imply that every taxpayer is a resident,and therefore responsible for repaying the debt,of Note:Overlapping governments are those that coincide,at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of Iowa City.This process recognizes that,when considering the City's ability to issue and repay long-term debt,the entire burden borne by the residents and businesses should be taken into account. 130 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total Assessed Valuation 4,826,648$ 4,950,559$ 5,350,228$ 5,494,459$ 5,907,661$ 6,133,570$ 6,857,898$ 7,019,346$ 7,248,396$ 7,368,329$ Debt Limit 241,332 247,528 267,511 274,723 295,383 306,679 342,895 350,967 362,420 368,416 G.O. Bonds 59,340 55,350 51,645 51,880 52,470 53,370 53,935 53,935 52,915 52,980 TIF Rev. Bonds 2,655 2,525 15,200 15,065 14,930 14,790 12,805 11,840 10,880 9,925 Capital loan note payable - - - - - - - - - 788 Letters of credit 2,005 582 663 475 603 - - - - - Notes payable 211 211 211 211 211 211 211 211 211 211 Subscription Liability - - - - - - - 443 317 406 TIF rebates 18,206 13,506 17,356 25,012 27,954 25,877 36,944 33,765 31,784 29,620 Total net debt applicable to limit 82,417 72,174 85,075 92,643 96,168 94,248 103,895 100,194 96,107 93,930 Legal debt margin 158,915$ 175,354$ 182,436$ 182,080$ 199,215$ 212,431$ 239,000$ 250,773$ 266,313$ 274,486$ Total net debt applicable to the limit as a percentage of debt limit 34.15%29.16%31.80%33.72%32.56%30.73%30.30%28.55%26.52%25.50% 1As reported in the Annual Financial Report to the State Note: Under Iowa code, the city's outstanding general obligation debt should not exceed 5 percent of total assessed property value. City of Iowa City, Iowa Legal Debt Margin Information1 Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 131 Fiscal Year Net Revenue Annual Debt Service2 Ended Available for Ratio of June 30 Revenue Expenses1 Debt Service Principal Interest Total Coverage Parking Revenue3 20156 5,620 3,828 1,792 540 254 794 2.26 2016 - - - - - - - 2017 5,531 3,683 1,848 1,015 86 1,101 1.68 2018 5,812 3,790 2,022 524 576 1,100 1.84 2019 6,205 3,724 2,481 545 476 1,021 2.43 20208 4,577 3,476 1,101 567 375 942 1.17 2021 - - - - - - - 2022 - - - - - - - 2023 - - - - - - - 2024 - - - - - - - Wastewater Treatment Revenue4 2015 12,620 6,574 6,046 3,370 1,305 4,675 1.29 2016 12,681 6,513 6,168 3,520 1,175 4,695 1.31 2017 13,383 6,357 7,026 3,625 985 4,610 1.52 2018 13,181 6,622 6,559 3,580 756 4,336 1.51 20197 13,548 6,840 6,708 3,465 539 4,004 1.68 2020 12,917 6,366 6,551 2,510 367 2,877 2.28 2021 12,449 7,874 4,575 2,620 257 2,877 1.59 2022 12,473 7,525 4,948 2,660 153 2,813 1.76 2023 13,069 8,742 4,327 2,085 52 2,137 2.02 2024 - - - - - - - Water Revenue5 2015 8,715 5,632 3,083 1,380 610 1,990 1.55 2016 9,323 5,387 3,936 1,715 579 2,294 1.72 2017 9,529 6,332 3,197 1,760 524 2,284 1.40 2018 9,838 6,949 2,889 1,455 394 1,849 1.56 2019 10,078 6,888 3,190 1,510 280 1,790 1.78 2020 10,399 6,752 3,647 1,565 238 1,803 2.02 2021 10,048 7,471 2,577 1,630 193 1,823 1.41 2022 10,748 7,006 3,742 1,690 146 1,836 2.04 2023 11,811 7,535 4,276 1,755 97 1,852 2.31 2024 12,828 8,896 3,932 1,747 56 1,803 2.18 Notes: 1 Excludes depreciation and interest. 2 Includes principal and interest of revenue bonds only. 3 Parking Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service" is required to be at least 1.25. 4 Wastewater Treatment Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service" is required to be at least 1.10. 5 Water Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service" is required to be at least 1.10. 6 Parking Revenue Bonds defeased are excluded from the principal and interest of Annual Debt Service. 7 Debt Service excludes the amount called early of $2,670,000. 8 Parking Capital Lease called early is excluded from the principal and interest of Annual Debt Service. City of Iowa City, Iowa Schedule of Revenue Bond Coverage Last Ten Fiscal Years (amounts expressed in thousands) 132 Fiscal Taxable Year Valuation Available 2012D TIF 2016E TIF Available Ended Available for TIF Tax Increment Revenue Revenue Debt June 30 Certification (1)Tax Rate (2)Revenues (3)Bonds Bonds Total Coverage 2015 141,518 29.79 4,215 75 - 75 55.95 2016 156,898 30.49 4,784 205 - 205 23.30 2017 195,411 30.41 5,943 204 273 477 12.45 2018 226,439 30.34 6,870 207 384 591 11.61 2019 297,479 29.66 8,822 205 384 589 14.97 2020 341,736 29.93 10,228 207 384 591 17.31 2021 539,721 30.03 16,208 205 384 589 27.52 2022 620,560 29.99 18,611 - 1,349 1,349 13.80 2023 643,237 30.08 19,349 - 1,315 1,315 14.71 2024 625,949 31.38 19,642 - 1,281 1,281 15.33 (3) The available tax increment revenues do not reflect an estimate for the portion of the available valuation that would be taxed at the higher SSMID rate. City of Iowa City, Iowa Schedule of TIF Revenue Bond Coverage Last Ten Fiscal Years (amounts expressed in thousands) (1) Total taxable valuation available for certification will decrease in fiscal year 2024-25 due to the retirement of the tax increment of the 2001 Amended portion of the Urban Renewal Area. (2) The tax increment rate in fiscal year 2013-14 reflects the loss of the local school district's instruction support levy (ISPL) of $.12405 due to recent legislative changes. TIF tax rate does not include the SSMID levy rate of $2.00 per $1,000 of value. Starting in fiscal year 2012-13, a portion of the taxable valuation certified will be at the higher rate due to its location in the SSMID. 133 Per Capita Calendar Personal Personal Average School Retail Year Population6 Income1 Income1 Increase Enrollment2 Sales4 2015 73,497 8,035,139 48,343 2.11 14,495 2.9 838,853,686 2016 74,587 8,296,973 49,461 2.31 15,186 3.2 853,258,347 2017 75,690 8,713,868 51,198 3.51 15,299 3.0 874,928,988 2018 75,696 9,238,484 54,803 7.04 15,334 2.2 854,538,416 2019 75,130 9,681,989 55,518 1.30 15,619 2.4 865,628,890 2020 74,916 10,063,781 57,345 3.29 15,363 8.4 832,475,900 2021 74,596 10,690,422 60,316 5.18 15,636 4.0 858,860,019 2022 75,835 11,526,759 64,399 6.77 15,828 2.5 893,575,646 2023 75,671 11,807,120 65,563 1.81 15,438 2.6 987,817,621 20245,7 75,996 12,240,518 67,970 3.67 16,083 2.4 1,024,076,948 Sources and Notes: 1 Personal Income and Per Capita Personal Income based on metropolitan Iowa City / Coralville and based on figures from Bureau of Economic Analysis. Personal Income expressed in thousands. 2 Iowa City Community School District and local private schools 3 Iowa Workforce Development Center 4 Iowa Retail Sales & Use Report, Iowa Department of Revenue and Finance. Fiscal year ending June 30. 5 Personal Income for 2024 and Per Capita Personal Income for 2024 is not available. Amounts projected based on average increase over previous 5 years. 6 US Census Bureau Population number is not available for 2024. Amounts projected based on an average over previous 9 years. 7 Quarter reports were not yet available so amount projected based on average increase over previous 5 years. Demographic and Economic Statistics City of Iowa City, Iowa Last Ten Calendar Years Unemployment Rate3 134 Employers Employees Rank Percentage Employees Rank Percentage University of Iowa Hospitals & Clinics - -N/A %15,500 1 16.4 % University of Iowa *27,354 1 27.8 10,300 2 10.9 Iowa City Community School District 2,346 2 2.4 2,000 3 2.1 Veterans Administration Medical Center 1,562 3 1.6 2,000 4 2.1 Procter & Gamble - -N/A 1,300 5 1.4 City of Iowa City 990 8 1.0 988 6 1.0 ACT Inc. (formerly American College Testing Program)1,089 7 1.1 985 7 1.0 NCS Pearson 1,200 5 1.2 800 8 0.8 Goodwill of the Heartland - -N/A 638 9 0.7 System Unlimited 890 9 0.9 500 10 0.5 Mercy Hospital 1,559 4 1.6 - -N/A Hy-Vee 1,166 6 1.2 - -N/A Internaltion Automotive Components formerly Lear Corp 785 10 0.8 - -N/A 38,941 39.6 %35,011 36.9 % Total Employees 98,500 94,400 Sources: Iowa City Area Development Group Various Employers and documents * Starting 2025 University of Iowa and University of Iowa Hospitals & Clinics are broken out separately. City of Iowa City, Iowa Principal Employers Current Year and Nine Years Ago 2015 2024 135 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Public Safety Police 105 105 105 105 107 107 109.26 110.76 110.76 113.26 Fire 64 64 64 64 64 64 64 64 64 66 Inspection Services 13.55 12.85 13.5 13.5 15.6 15.6 17.6 17.6 16.6 16.6 Public Works Public Works Admin 2 2 2 2 2 2 2 2 2 2 Engineering2 12.1 12 16 16 16 16 18 18 18 19.4 Culture and Recreation Parks and Rec Admin 2 2 2 2 2 2 2 2 2 2 Recreation 15.42 14.42 15.42 14.75 14 14.5 14.5 14.5 14.5 14.5 Parks 13 13 16 16 16 16 16 16 16 16 Forestry 3 3 3 3 5 5 7 7 7 7 Cemetery 3 3 3 3 3 3 3 3 3 3 CBD Maintenance 3 3 - - - - - - - - Library 45.13 44.77 46.17 46.17 46.17 46.05 45.92 45.92 45.92 45.92 Senior Center 6.5 6.5 7 7 7 7 7.76 7.76 7.76 7.76 Community and Economic Development 8.95 10.8 12.63 13.13 13.13 13.13 12.13 12.13 13.5 13.5 Economic Development 1 2 1 1 1 1 1 1 1 1 General Government City Council 7 7 7 7 7 7 7 7 7 7 City Clerk 4 4 4 4 4 4 4 4 4 4 City Attorney 5.6 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 City Manager 6 10.5 10.5 9 9 9 13.89 14.89 15.26 17.26 Finance 22.47 23.07 23.13 22.13 22.28 22.28 22.28 22.28 22.28 22.28 Government Buildings 4.83 5.33 4.33 5 4 5 4 4 4 4 Special Revenue Employee Benefits 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55 Community Development 2.98 2.83 - - - - - - - - Traffic Engineering 4.15 3.9 4.5 3 3 3 3 3 4 4 Streets 25.5 25.25 25.5 29 29 29 29 29 29 29 MPOJC (formerly JCCOG)5.6 4.7 4.7 4.7 5.2 5.2 5.2 5.2 5.2 5.2 Capital Projects Administration2 5 4 - - - - - - - - Internal Service Funds Information Technology 9.86 9.86 9.8 10.8 9.8 9.8 9.8 9.8 10.5 11 Equipment 10.75 10.75 10.75 10.75 10.75 10.75 11.75 12 11 11 Central Services 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 Risk Management 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 Business-Type Activities Parking 26.25 23.13 21.63 21.63 21.38 19.63 21.38 21.38 21.88 22.88 Mass Transit 51.25 51.13 53.63 54.63 53.38 53.38 54.13 54.13 54.63 56.88 Wastewater Treatment 24.65 24.65 25.4 26 26 26 26 26 26 26.25 Water 32 32 31.75 31.75 31.75 31.75 31.25 31.25 31.25 32.25 Sanitation 35.85 33.35 31.5 31.5 32.76 34.76 35.26 35.51 36.51 37.51 Airport 1 1 1 1 1 1 1 1 1 1 Cable Television1 5.63 - - - - - - - - - Stormwater 2.6 2.6 2.1 1.5 1.5 2.5 2 2 2 2.1 Housing Authority 10.19 10.19 9.6 9.6 9.5 9.5 10.62 10.62 11 12 Total 607.66 598.93 599.89 601.89 605.55 608.18 624.08 627.08 630.90 646.95 Source: City's Financial Plan City of Iowa City, Iowa Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years Full-Time Equivalent Employees as of June 30 136 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Public Safety Police1 Physical arrests 5,595 5,465 4,482 4,488 5,212 2,891 2,525 2,998 2,619 2,255 Traffic Violations 3,356 2,989 2,246 3,103 3,422 1,052 1,627 2,708 2,468 3,298 Fire1 Number of calls answered 6,016 6,974 6,749 7,122 7,532 6,979 8,106 9,039 9,212 8,574 Inspections conducted 1,903 2,459 874 1,031 1,300 181 1,194 1,194 1,250 1,806 Parking Parking Violations 65,196 57,549 62,930 50,346 61,330 48,042 45,727 69,502 72,491 97,412 Wastewater Treatment Daily average treatment in million gallons 9.76 10.48 8.32 7.77 10.97 8.58 7.93 7.38 7.80 7.58 Maximum daily capacity of plant in million gallons 43.3 43.3 43.3 43.3 43.3 43.3 43.3 43.3 43.3 43.3 Number of sewer system customers 24,533 25,085 25,485 26,069 26,270 26,576 26,892 27,021 27,105 27,172 Water Daily average consumption in million gallons 5.33 5.32 5.50 5.84 5.69 5.33 5.57 5.52 5.60 5.60 Maximum daily capacity of plant in million gallons 16.7 16.7 16.7 16.7 16.7 16.7 16.7 16.7 16.7 16.7 Customers by Classification Residential 23,089 23,638 24,025 24,595 24,818 25,133 25,452 25,588 25,555 25,612 Commercial 1,409 1,415 1,425 1,436 1,431 1,448 1,448 1,442 1,449 1,463 Industrial 14 14 14 15 15 15 15 15 15 15 Other 135 131 134 136 139 138 137 137 133 130 Total Customers 24,647 25,198 25,598 26,182 26,403 26,734 27,052 27,182 27,152 27,220 Sanitation Number of Customers 14,811 15,620 15,917 15,960 16,112 16,180 16,330 16,481 16,606 16,681 Tonnage 9,210 9,476 9,623 9,694 8,989 9,682 10,339 10,247 9,747 9,742 Landfill Tonnage 123,692 126,875 137,025 140,658 127,587 128,210 151,823 135,557 132,672 142,874 Sources: Various city divisions. Notes: 1 Numbers are based on a calendar year and 2024 year-to-date figures are compiled through 11/11/24 for FIRE and 11/04/24 for Police. City of Iowa City, Iowa Operating Indicators by Function Last Ten Fiscal Years 137 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Public Safety Police Stations 1 1 1 1 1 1 1 1 1 1 Patrol units 20 20 24 23 23 23 23 23 23 23 Fire Stations 4 4 4 4 4 4 4 4 4 4 Fire apparatus 11 10 10 10 10 10 10 10 10 10 Public Works Streets Miles 281 283 286 288 292 293 295 298 299 300 Street lights 3,412 3,412 3,412 3,307 3,166 3,202 3,246 3,227 3,287 3,270 Culture and Recreation Library 1 1 1 1 1 1 1 1 1 1 Cemetery 1 1 1 1 1 1 1 1 1 1 Acreage 40 40 40 40 40 40 40 40 40 40 Parks 46 46 49 50 51 56 56 58 58 58 Acreage 1,897 1,902 1,932 1,942 1,947 1,950 1,980 1,987 1,987 2,008 Recreation Recreation centers 2 2 2 2 2 2 2 2 2 2 Swimming pools 3 3 3 3 3 3 3 3 3 3 Ball diamonds 27 27 27 27 27 27 27 27 27 27 Tennis courts 12 12 9 9 9 9 9 9 9 8 Soccer fields 20 20 20 20 20 20 20 20 21 21 Pickle Ball Courts - - 8 8 8 8 8 8 8 9 Futsal Courts - - 2 2 2 2 2 2 2 2 Full Basketball Courts - - 3 3 3 6 6 6 6 6 Gaga Pits - - - 2 2 2 2 2 2 2 Bocce Court - - - - - - 1 1 1 1 Parking Facilities 5 5 6 6 6 6 6 6 6 6 Spaces 3,086 3,086 3,686 3,686 3,686 3,686 3,686 3,686 3,686 3,686 Wastewater Treatment Miles of sanitary sewer 300 301 304 306 307 308 310 312 313 314 Miles of storm sewer 133 136 139 140 142 144 146 147 148 150 Number of treatment plants 1 1 1 1 1 1 1 1 1 1 Number of service connectors 24,533 25,085 25,485 26,069 26,270 26,576 26,892 27,021 26,995 27,062 Water Miles of water mains 273 275 277 279 281 283 286 288 289 291 Number of city owned fire hydrants 3,415 3,447 3,503 3,529 3,564 3,611 3,647 3,687 3,717 3,749 Sanitation Landfills 1 1 1 1 1 1 1 1 1 1 Acreage 418 418 418 418 418 418 418 418 418 418 Sources: Various city divisions. City of Iowa City, Iowa Capital Assets by Function Last Ten Fiscal Years 138 Compliance Section Tab 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153