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Home My WebLink AboutFY2025 Annual Financial ReportCity of Iowa City, Iowa Annual Comprehensive Financial Report New pickleball courts and resurfacing at the Mercer Park tennis court complex I C G O V .O R G For the Fiscal Year Ended June 30, 2025 Annual Comprehensive Financial Report City of Iowa City, Iowa For the fiscal year ended June 30, 2025 Prepared by: Finance Department City of Iowa City, Iowa Introductory Section Tab City of Iowa City, Iowa Table of Contents June 30, 2025 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, 2025 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 12, 2025 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, 2025 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, 2025. 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. 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 591 full-time and 58 part-time permanent municipal employees and 276 temporary employees, including a police force of 81 sworn personnel and a fire department of 67 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 2025 of 31,563 students, which is a decrease of 636 students from 32,199 students in the fall of 2024. 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 3.1% while the State of Iowa was at 3.7%, and the National rate was 4.1%. The rate of new housing construction also decreased substantially due to the COVID-19 pandemic in 2020 and the City continues to see little growth or decreases in 2024 based on the number of building permits issued. New housing building permits consisted of 111 new single-family houses and duplexes in 2024 as compared to 56 in 2023; multi-family dwelling units added during calendar year 2024 was 0, compared to 474 in 2023. Altogether new housing additions totaled 111 units valued at $42,920,122 in 2024 versus a total of 530 units valued at $155,212,855 in 2023. These amounts are well below pre COVID-19 totals of 556 units valued at $124,362,697 in 2019. 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 $17,979,780 in 2023 to $34,187,309 in 2024. The value of remodeling permits for 5 residential and commercial properties decreased from $49,991,191 in 2023 to $40,579,749 in 2024. Total permits issued in 2024 for all purposes was 613 permits for $130,444,866 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. • 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. 6 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 Sycamore Mall commercial area, the former ACT campus, and the I-80 corridor. 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 7 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. 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: In 2022, a $54.4 million project was completed which renovated several historic commercial buildings along the pedestrian mall and constructed an 11-story, 120,000 square foot multi- residential with 102 residential units. The Chauncey is a $49 million 15-story mixed use development completed in 2019 which includes 8 floors of residential units, a 35-unit hotel, two floors of commercial space, a movie theatre and a bowling alley. Also completed in 2019 was a $35 million redevelopment of the City Hall parking lot and neighboring church into 126 residential units, parking, and commercial space. In 2022, a large downtown vacant storefront was converted into a 13,000+ square foot Target, anchoring a national retailer in the Downtown District and serving University related downtown foot traffic. Finally, in 2024 the City initiated a public-private partnership project to redevelop a vacant lot at 21 S. Linn Street and, through a competitive Request for Proposals process, selected a developer to construct a 6-8 story mixed-use building including ground-floor commercial and office and residential uses on the upper levels. The Sycamore Mall area is an older commercial area in the south east end of Iowa City which includes an outdated and underperforming former mall building. The strengths of the area include legacy homegrown businesses, low lease rates, surrounding residential neighborhoods, and the presence of social services. Challenges of the area include a need to reactive the former mall, targeted improvement of older commercial buildings, mobility improvements to improve pedestrian connectivity and traffic congestion, the need to diversify and repurpose commercial space into residential density, and the need to create more community spaces and a strong sense of place. To address this area, where market forces may not alone drive progress, the City is working in partnership with the Greater Iowa City economic development organization to create a Strategic Investment District which will seek to stimulate growth and redevelopment in the area through targeted private investment paired with public incentives and policy. Along the I-80 corridor north of Iowa City there are several key frontage areas where development and redevelopment is picking up after several years of no action. First, in the northeast area of Iowa City, redevelopment of the 400-acre former ACT, Inc. campus is underway. Development plans include affordable senior housing, market-rate housing, and commercial development along the highway frontage including restaurant and entertainment, grocery, and hotel. The first senior housing project is underway and will provide 44 units for those 55+ with limited incomes. To the north of the ACT campus, the former Pearson Campus along Dodge Street will also see a substantial revitalization to create new warehouse, Class A office, and retail space and a volleyball training facility. 8 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 (FY2026 – FY2028). 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. 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, 2025 and 2026. This has been a reduction of $1.636 per $1,000 of assessed value or 9.47% over that time period. 9 In looking at expenses for the FY2024 – FY2027 Financial Plan and FY2026 operating budget, the City will generally experience increased expenditures; with General Fund expenditures and total operating expenditures growing at approximately 5% or less from FY2025 to FY2026. Bargaining unit cost-of-living wage increases are approximately 2% to 4% each year. The City has increased 50.9 permanent FTEs since FY2019. In FY2021, 15.9FTEs of temporary workers were converted to permanent full-time or part-time positions. Not including the conversions, FTE’s have increased 5.8% over this time period. The City has averaged a 6.53% increase in its health insurance premium rates over the previous eight years; however, is expecting a continued upward trend for health insurance rates in FY2027. 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 helped mitigate the impact to the City’s overall premium increase. In FY2026 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. 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, 2024. 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-eight 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, 2025. 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. 10 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, 2025. 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, 2024 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, 2025 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 Oliver Weilein 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 Anne Mangano January 08, 2008 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, 2025. 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, 2025 by $823,743,000 (net position). Of this amount, $186,614,000 (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 $29,306,000 during the fiscal year. Governmental activities increased by $15,065,000 and business-type activities increased by $14,241,000. • At the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $141,877,000, an increase of $6,319,000 in comparison with the prior year. Of this total amount, approximately $46,855,000 or 33.0% 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 $46,855,000 or 69.8% 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 – 81 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 $823,743,000 at the close of the fiscal year ended June 30, 2025. By far, the largest portion of the City’s net position reflect its investment in capital assets (e.g., land, building, machinery and equipment, improvements other than buildings, and infrastructure), net any related debt to acquire those assets that is still outstanding. The City uses these capital assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other resources, since the capital assets themselves cannot be used to liquidate these liabilities. City of Iowa City's Net Position June 30, 2025 (amounts expressed in thousands) Gove rnmental Business-type activities activities Total Not Restated Not Restated Not Restated 2025 2024 2025 2024 2025 2024 Current and other assets 255,281$ 246,367$ 157,001$ 149,469$ 412,282$ 395,836$ Capital assets 298,041 21 A portion of the City’s net position, $48,851,000 or 5.9%, represents resources that are subject to external restrictions on how they may be used. The remaining balance of the unrestricted net position, $186,614,000 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, 2025, 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 FY25’s operation. Governmental Activities: Governmental activities increased the City’s net position by $15,605,000. 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 FY25 were $118,060,000. Governmental activities are primarily funded through taxes, $76,866,000 or 65.1%, and grants and contributions, $18,573,000 or 15.7%. Taxes increased from the prior year by $2,514,000, which reflects approximately a 3.4% increase. Grants and contributions decreased from prior year by $6,488,000 due mainly to additional funding recognized from the American Rescue Plan Act (ARPA) in FY24. Expenses for governmental activities totaled $94,461,000. Governmental activities are tracked by function including Public Safety, Public Works, Community and Economic Development, Culture and Recreation, and General Government. In FY25, Public Safety accounted for the highest portion of governmental expenses, $29,883,000 or 31.6%, and increased over the prior year due to normal cost of living increases. Public Works expenses of $16,452,000 or 17.4% made up another large portion of the governmental expenses and had a decrease in expenses from the prior year. Community and economic development expenses of $19,364,000 or 20.5% made up the second highest portion of governmental expenses and had an increase in expenses from the prior year due to the spend down of ARPA Revenue Replacement funds. Business-type Activities: Business-type activities increased the City’s total net position by $14,241,000. The increase in net position was primarily from the Wastewater and Stormwater funds. Wastewater had an operating loss of $405,000, had transfers in of $1,475,000, interest income of $1,179 and received contributions of infrastructure of $1,502,000 from capital projects funds. Revenues for business-type activities totaled $78,867,000. The primary revenue source for business-type activities is charges for services, $48,358,000 or 61.3%. In addition for FY25, the City’s business type-activities had a significant portion, $23,827,000 or 30.2%, 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 FY25 were $73,160,000. Housing Authority represented the highest portion of business-type activities, $13,904,000 or 19.0%, with Wastewater, $13,593,000 or 18.6%, Sanitation, $12,545,000 or 17.2% Water, $11,131,000 or 15.2%, and Transit, $10,438,000 or 14.3%, 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 Not Restated Not Restated Not Restated 2025 2024 2025 2024 2025 2024 - - 73,058 70,578 Other taxes 3,808 3,774 - - 3,808 3,774 Grants and contributions not restricted to specific purposes 1,373 1,675 - - 1,373 1,675 Earnings (loss) on investments 8,916 8,894 5,340 5,253 14,256 14,147 Gain on disposal of capital assets 341 418 - 23 341 441 Other 4,681 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, 2025, the City’s governmental funds reported combined ending fund balances of $141,877,000, an increase of $6,319,000 in comparison with the prior year. Of this total amount, $46,855,000 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 $69,983,000 or 49.3% contains external restraints on its use. The assigned fund balances of $18,734,000 or 13.2% have been identified by the City to be used for specific purposes. The nonspendable fund balance is 6,305,000 or 4.4%, 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, 2025, the unassigned fund balance of the General Fund was $46,855,000 while General Fund’s total fund balance was $74,001,000. 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 69.8% of total General Fund expenditures of $67,129,000, while total fund balance represents 110.2% of that same amount. During the current fiscal year, the fund balance of the City’s General Fund increased by $556,000. This is due to transfers in from other funds. The fund balance in the Bridge, Street, and Traffic Control Construction Fund was $18,063,000, an increase of $1,355,000. 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 $16,105,000, an increase of $4,056,000. 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 increase is mainly due to the timing project expenses. The ending fund balance of the Debt Service Fund was $7,670,000, an increase of $62,000, 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 $3,431,000, a decrease of $146,000. The ending fund balance of the Other Shared Revenue and Grants Fund was $17,882,000, an increase of $526,000. 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 $434,963,000, an increase in net position of $12,634,000. 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, $339,943,000 is net investment in capital assets. Unrestricted net position totaled $90,817,000, an increase of $4,196,000 compared to the previous year. The Internal Service funds showed net position totaling $72,975,000 as of June 30, 2025, an increase of $6,728,000 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 decreased budgeted revenues by $15,049,000 or 7.0% to a total of $199,533,000 and increased the expenditure budget by $95,438,000 or 39.5% to a total of $337,145,000. 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, 2025 amounts to $642,909,000, 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, 2025 increased by $7,779,000 for governmental activities compared to the prior year and increased by $7,294,000 for business-type activities from the prior year. The following table reflects the $642,909,000 investment in capital assets, net of accumulated depreciation. City of Iowa City's Capital Assets (net of depreciation) (amounts expressed in thousands) Governmental Business-type Activities Activities Total 2025 2024 2025 2024 2025 2024 Land 33,035$ 32,614$ 30,957$ 30,957$ 63,992$ 63,571$ Buildings 35,091 33,680 51,070 53,155 86,161 86,835 Improvements other than buildings 3,935 2,971 2,751 3,002 6,686 5,973 Machinery and equipment 34,947 35,077 21,805 16,807 56,752 51,884 IT subsciptions 1,159 337 223 397 1,382 734 Infrastructure 178,377 159,472 222,077 208,749 400,454 368,221 Construction in progress 11,497 Total 298,041$ 27 Major capital asset events during the current fiscal year included the following: • Three large construction projects were completed during FY 25. The first is the Rohret South Sewer. This project includes extending the sewer system to the west of Highway 218. This project had construction in progress balance at the beginning of the year of $4,475,000 and current year expenditures of $15,000. The total cost of the project that was capitalized was $4,490,000. The project was funded through Wastewater operating funds. Another project is the new Landfill Cell. This project consisted of designing and constructing a new landfill cell. It had construction in progress balance at the beginning of the year of $4,623,000, and current year expenditures of $11,000. The total cost of the project that was capitalized was $4,634,000 and it was funded through landfill replacement dollars. The third project, American Legion Road project, reconstructed part of the road to be paved. This project was capitalized at $9,747,000 with no current year expenses. The project was funded through federal grant funds and bond issuance. 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 $66,500,000. Of this amount, $56,970,000 comprises debt backed by the full faith and credit of the City. $314,000 or 0.5% of the general obligation bonds is debt that will be paid with Tax Increment Financing revenues. $9,530,000 represents revenue bonds secured solely by specific revenue sources. The City issued $14,535,000 of General Obligation bonds during FY25. This increase in debt was offset by the retirement of debt for a net increase of City’s total bonded debt by $1,715,000. 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, 2025 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 $435,368,000. With outstanding debt applicable to this limit of $96,593,000 we are utilizing 22.19% of this limit. More detailed information on debt administration is provided in Note 6 of the financial statements. (amounts expressed in thousands) Governmental Business-type Activities Activities Total 2025 2024 2025 2024 2025 2024 General obligation bonds 56,970$ 52,980$ -$ -$ 56,970$ 52,980$ Revenue bonds 8,975 9,925 555 1,880 9,530 11,805 Total 65,945$ 62,905$ 555$ 1,880$ 66,500$ 64,785$ 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 $2,911,000 in the General Fund for FY26 that strives to maintain current service delivery levels. The tax levy rate per $1,000 of assessed valuation for FY26 is provided below: Requests for Information This report is designed to provide a general overview of the City of Iowa City’s finances for all of those with an interest in the government’s finances. Questions concerning any of the information provided in this report, or requests for additional financial information should be addressed to City of Iowa City, Finance Department, 410 East Washington Street, Iowa City, IA, 52240. 29 Governmental Business-type Activities Activities Total Assets Equity in pooled cash and investments 156,694$ 93,076$ 249,770$ Receivables: Property tax 70,980 - 70,980 Accounts and unbilled usage 838 4,404 5,242 Interest 2,686 1,605 4,291 Notes 4,664 297 4,961 Internal balances (30,260) 30,260 - Lease receivable 144 2,074 2,218 Due from other governments 4,942 2,661 7,603 Inventories 938 1,104 2,042 Assets held for resale 5,974 - 5,974 Restricted assets: Equity in pooled cash and investments 37,681 21,520 59,201 Capital assets: Land and construction in progress 44,532 46,942 91,474 Other capital assets (net of accum. depreciation/amortization)253,509 297,926 551,435 Total assets 553,322 501,869 1,055,191 Deferred Outflows of Resources Pension related deferred outflows 11,064 1,833 12,897 OPEB related deferred outflows 1,238 512 1,750 Total deferred outflows of resources 12,302 2,345 14,647 Liabilities Accounts payable 2,932 1,959 4,891 Contracts payable 3,125 1,729 4,854 Accrued liabilities 4,128 390 4,518 Interest payable 213 6 219 Deposits 1,251 3,107 4,358 Advances from grantors 455 212 667 Due to other governments 39 64 103 Unearned revenue 12 174 186 Noncurrent liabilities: Due within one year: Compensated absences 2,938 955 3,893 Subscription liability 282 62 344 Notes payable 211 - 211 Bonds payable 12,441 562 13,003 Other post employment benefits liability 6,181 2,673 8,854 Due in more than one year: Compensated absences 5,215 1,444 6,659 Subscription liability 715 33 748 Capital loan notes payable - 2,527 2,527 Net pension liability 32,394 4,911 37,305 Other post employment benefits liability 778 207 985 Bonds payable 57,466 - 57,466 Landfill closure/post-closure liability - 17,497 17,497 Total liabilities 130,776$ 38,512$ 169,288$ (continued) City of Iowa City, Iowa Statement of Net Position 30 Governmental Business-type Activities Activities Total Deferred Inflows of Resources Pension related deferred inflows 1,306$ 194$ 1,500$ OPEB related deferred inflows 1,875 776 2,651 Lease related deferred inflows 143 1,922 2,065 Deferred amount on refunding - 11 11 Succeeding year property taxes 70,580 - 70,580 Total deferred inflows of resources 73,904 2,903 76,807 Net Position Net investment in capital assets 248,335 339,943 588,278 Restricted for or by: Employee benefits 3,901 - 3,901 Capital projects: Expendable 17,186 - 17,186 Nonexpendable 262 - 262 Debt service 7,457 - 7,457 Police 541 - 541 Other purposes Expendable 11,523 - 11,523 Nonexpendable 69 - 69 Bond ordinance - 1,566 1,566 State statute - 768 768 Future improvements - 404 404 Grant agreement 3,709 1,465 5,174 Unrestricted 67,961 118,653 186,614 Total net position 360,944$ 462,799$ 823,743$ The notes to the financial statements are an integral part of this statement. 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 29,883$ 5,037$ 271$ 9$ (24,566)$ -$ (24,566)$ Public works 16,452 60 10,808 1,905 (3,679) - (3,679) Culture and recreation 19,115 677 211 - (18,227) - (18,227) Community and economic development 19,364 15 5,369 - (13,980) - (13,980) General government 7,951 1,521 - - (6,430) - (6,430) Interest on long-term debt 1,696 - - - (1,696) - (1,696) Total governmental activities 94,461 7,310 16,659 1,914 (68,578) - (68,578) Business-type activities: Wastewater treatment 13,593 13,175 - 1,502 - 1,084 1,084 Water 11,131 11,160 - 782 - 811 811 Sanitation 12,545 12,826 - 300 - 581 581 Housing authority 13,904 366 13,453 - - (85) (85) Parking 7,246 7,251 - - - 5 5 Airport 1,407 479 (2) 933 - 3 3 Stormwater 2,896 1,922 - 1,491 - 517 517 Transit 10,438 1,179 5,026 342 - (3,891) (3,891) Total business-type activities 73,160 48,358 18,477 5,350 - (975) (975) Total 167,621$ 55,668$ 35,136$ 7,264$ (68,578) (975) (69,553) General revenues: Property taxes, levied for general purposes 73,058 - 73,058 Hotel/motel tax 2,070 - 2,070 Gas and electric tax 735 - 735 Utility franchise tax 1,003 - 1,003 Grants and contributions not restricted to specific purposes 1,373 - 1,373 Earnings (loss) on investments 8,916 5,340 14,256 Gain on disposal of capital assets 341 - 341 Miscellaneous 4,681 1,342 6,023 Transfers (8,534) 8,534 - Total general revenues and transfers 83,643 15,216 98,859 Changes in net position 15,065 14,241 29,306 Net position beginning of year, as restated 345,879 448,558 794,437 Net position end of year 360,944$ 462,799$ 823,743$ 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, 2025 (amounts expressed in thousands) 33 Bridge, Assets Liabilities, Deferred Inflows of Resources and Fund Balances of resources and fund balances 123,604$ 18,515$ 18,509$ 20,435$ 20,453$ 19,840$ 5,687$ 227,043$ The notes to the financial statements are an integral part of this statement. City of Iowa City, Iowa Balance Sheet Governmental Funds 34 Total governmental fund balances 141,877$ 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.72,975 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.3,381 Capital assets used in governmental activities are not current financial resources and therefore are not reported in the funds. 278,984 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 11,951$ Deferred inflows of resources (3,058) 8,893 Net pension liabilities are not due and payable in the current period and therefore are not reported in the funds.(31,592) Accrued compensated absences are not due and payable in the current period and therefore are not reported in the funds.(7,789) Accrued post employment benefit liabilities are not due and payable in the current period and therefore are not reported in the funds.(6,621) Subscription liabilities are not due and payable in the current period and therefore are not reported in the funds.(997) Bonds payable are not due and payable in the current period and therefore are not reported in the funds.(69,907) Notes payable are not due and payable in the current period and therefore are not reported in the funds.(211) Accrued interest on bonds (213) Internal balance due to integration of internal service funds (27,836) Total net position of governmental activities 360,944$ 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, 2025 35 Bridge, General Revenues Expenditures Other Financing Sources (Uses) Fund Balances, Beginning 73,445 17,356 3,577 12,049 16,708 7,608 4,815 135,558 Fund Balances, Ending 74,001$ 17,882$ 3,431$ 16,105$ 18,063$ 7,670$ 4,725$ 141,877$ The notes to the financial statements are an integral part of this statement. City of Iowa City, Iowa Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds 36 Net change in fund balances - total governmental funds 6,319$ 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 14,633$ New IT subscription asset, financed 1,124 Transfers of capital assets (to)\from enterprise funds - net (21) Capital assets contributed 1,279 Depreciation/amortization expense (9,725) 7,290 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 (14,534) Premium on bonds issued (1,097) Subscription issued (1,124) Repayments of subscription liability 323 Repayments of debt 11,495 Amortization of premium 611 (4,326) 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.(45) 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 186 Pension expense 1,333 Change in accrued post employment benefit liability (448) Change in accrued interest on debt (24) 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.(341) 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.5,121 Change in net position of governmental activities 15,065$ The notes to the financial statements are an integral part of this statement. (amounts expressed in thousands) For the Year Ended June 30, 2025 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 GovernmentalActivities - Other Internal Wastewater Housing Enterprise ServiceTransitTreatmentWaterSanitationStormwaterAuthorityFundsTotalFunds Assets Current assets: Equity in pooled cash and investments 15,339$ 29,095$ 16,991$ 15,974$ 4,156$ 5,881$ 5,640$ 93,076$ 56,832$ Receivables (net of allowance for uncollectibles): Accounts and unbilled usage 21 1,425 1,417 1,111 211 60 159 4,404 256 Interest 242 418 268 381 59 155 82 1,605 830 Notes - - - - - 297 - 297 - Lease 139 - - 17 - - 72 228 - Due from other governments 1,828 - - 307 - 296 230 2,661 1 Inventories 651 - 453 - - - - 1,104 676 Total current assets 18,220 30,938 19,129 17,790 4,426 6,689 6,183 103,375 58,595 Noncurrent assets: Restricted assets: Equity in pooled cash and investments 6 3 2,894 15,052 - 3,243 322 21,520 - Advances to other funds - - - 3,140 - - - 3,140 - Lease receivable 1,084 - - 217 - - 545 1,846 - Capital assets: Land 2,630 1,399 6,296 2,264 2,264 620 15,484 30,957 685 Buildings 15,383 36,801 24,019 6,441 - 7,463 47,432 137,539 1,553 Improvements other than buildings - 7,802 2,721 587 - 34 811 11,955 50 Machinery and equipment 15,857 20,667 11,907 1,098 27 72 998 50,626 31,587 Infrastructure 431 167,026 83,166 24,757 84,490 - 19,440 379,310 3,635 Accumulated depreciation (18,088) (111,068) (54,581) (22,873) (24,984) (5,973) (44,160) (281,727) (19,745) IT subscriptions 128 - 78 - - - 349 555 592 Accumulated amortization (48) - (52) - - - (232) (332) (536) Construction in progress 351 6,747 2,420 4,672 703 - 1,092 15,985 1,236 Total noncurrent assets 17,734 129,377 78,868 35,355 62,500 5,459 42,081 371,374 19,057 Total assets 35,954 160,315 97,997 53,145 66,926 12,148 48,264 474,749 77,652 Deferred Outflows of Resources Pension related deferred outflows 514 262 326 369 28 130 204 1,833 289 OPEB related deferred outflows 150 65 93 98 5 40 61 512 62 Total deferred outflows of resources 664 327 419 467 33 170 265 2,345 351 Liabilities Current liabilities: Accounts payable 426 167 184 967 63 64 88 1,959 472 Contracts payable 1 458 427 343 51 - 449 1,729 - Accrued liabilities 104 56 69 79 7 29 46 390 2,923 Compensated absences 262 112 139 243 15 41 143 955 135 Subscription liability 31 - 31 - - - - 62 - Due to other governments - 1 59 3 - 1 - 64 - Unearned revenue 95 - - - - 79 - 174 - Interest payable - - 6 - - - - 6 - Other post employment benefits liability 790 361 473 543 28 182 296 2,673 332 Bonded debt payable (net of unamortized premium and discounts)- - 562 - - - - 562 - Total current liabilities 1,709 1,155 1,950 2,178 164 396 1,022 8,574 3,862 Noncurrent liabilities: Liabilities payable from restricted assets: Deposits 5 - 1,309 12 - 1,772 9 3,107 - Advances from grantors - - - - - - 212 212 - Advances from other funds - - - - - - 716 716 - Compensated absences 310 131 219 460 33 54 237 1,444 229 Subscription liability 33 - - - - - - 33 - Capital loan notes payable - 2,527 - - - - - 2,527 - Net pension liability 1,368 708 873 1,009 76 337 540 4,911 802 Other post employment benefits liability 57 6 49 8 - 44 43 207 6 Landfill closure/postclosure liability - - - 17,497 - - - 17,497 - Total noncurrent liabilities 1,773 3,372 2,450 18,986 109 2,207 1,757 30,654 1,037 Total liabilities 3,482 4,527 4,400 21,164 273 2,603 2,779 39,228 4,899 Deferred Inflows of Resources Lease related deferred inflows 1,136 - - 221 - - 565 1,922 6 Pension related deferred inflows 54 28 35 40 3 13 21 194 31 OPEB related deferred inflows 228 99 141 148 8 61 91 776 92 Deferred amount on refunding - - 11 - - - - 11 - Total deferred inflow of resources 1,418 127 187 409 11 74 677 2,903 129 Net Position Net investment in capital assets 16,579 126,389 74,943 16,603 62,449 2,216 40,764 339,943 19,057 Restricted by bond ordinance - - 1,566 - - - - 1,566 - Restricted by state statute - - - 768 - - - 768 - Restricted for future improvements - - - - - - 404 404 - Restricted by grant agreement - - - - - 1,465 - 1,465 - Unrestricted 15,139 29,599 17,320 14,668 4,226 5,960 3,905 90,817 53,918 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.27,836 The notes to the financial statements are an integral part of this statement. City of Iowa City, Iowa Statement of Net Position Proprietary Funds 38 Governmental Activities - Other Internal Housing Enterprise Service Transit Treatment Water Authority Funds Total Funds Operating Revenues: Charges for services 960$ 13,175$ 11,160$ 12,797$ 1,922$ 366$ 7,551$ 47,931$ 26,228$ Miscellaneous 88 122 950 93 19 47 23 1,342 - Total operating revenues 1,048 13,297 12,110 12,890 1,941 413 7,574 49,273 26,228 Operating Expenses: Personal services 4,951 3,646 4,218 4,361 382 1,371 2,645 21,574 2,710 Commodities 840 1,807 2,261 376 65 25 820 6,194 2,608 Services and charges 3,732 3,737 2,421 7,414 835 12,321 2,802 33,262 14,211 9,523 9,190 8,900 12,151 1,282 13,717 6,267 61,030 19,529 Depreciation & Amortization 1,093 4,512 2,421 1,237 1,614 223 2,246 13,346 2,881 Total operating expenses 10,616 13,702 11,321 13,388 2,896 13,940 8,513 74,376 22,410 Operating income (loss)(9,568) (405) 789 (498) (955) (13,527) (939) (25,103) 3,818 Nonoperating Revenues (Expenses): Gain (loss) on disposal of capital assets (1) (55) - - - - (222) (278) 161 Operating grants 5,026 - - - - 13,453 (2) 18,477 - Lease revenue 219 - - 29 - - 179 427 14 Interest income 735 1,179 1,060 1,666 152 332 216 5,340 2,449 Interest expense - - - - - - - - (2) Total nonoperating revenues (expenses)5,979 1,124 1,060 1,695 152 13,785 171 23,966 2,622 Income (loss) before capital contributions and transfers (3,589) 719 1,849 1,197 (803) 258 (768) (1,137) 6,440 Capital contributions 342 1,502 782 300 1,512 - 933 5,371 - Transfers in 4,247 1,475 1,013 56 2,701 10 100 9,602 596 Transfers out - - (998) (75) (11) (66) (52) (1,202) (308) Change in net position 1,000 3,696 2,646 1,478 3,399 202 213 12,634 6,728 Net Position, Beginning, as restated 30,718 152,292 91,183 30,561 63,276 9,439 44,860 66,247 Net Position, Ending 31,718$ 155,988$ 93,829$ 32,039$ 66,675$ 9,641$ 45,073$ 72,975$ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 1,607 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, 2025 (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 1,161$ 13,486$ 12,151$ 12,999$ 1,939$ 598$ 7,706$ 50,040$ -$ Receipts from users - - - - - - - - 26,167 Payments to suppliers (5,420) (5,615) (4,865) (5,390) (952) (12,341) (3,532) (38,115) (16,371) Payments to employees (5,275) (3,760) (4,270) (4,465) (385) (1,352) (2,604) (22,111) (2,802) Net cash flows from (used for) operating activities (9,534) 4,111 3,016 3,144 602 (13,095) 1,570 (10,186) 6,994 Cash Flows From Noncapital Financing Activities Grants received 8,189 - - - - 13,257 74 21,520 - Transfers from other funds 4,247 30 30 56 (8) 10 100 4,465 596 Transfers to other funds - - (998) (75) (11) (66) (52) (1,202) (308) Repayment/(payment) of notes receivable - - - - - 10 - 10 - Repayment/(payment) of advances from other funds - - - 489 - - (420) 69 - Net cash flows from (used for) noncapital financing activities 12,436 30 (968) 470 (19) 13,211 (298) 24,862 288 Cash Flows From Capital and Related Financing Activities Capital grants received 95 - - - - - 1,399 1,494 - Lease revenues received 219 - - 29 - - 179 427 14 Lease related deferred inflows of resources (219) - - (29) - - (97) (345) Lease receivable 131 - - 17 - - 45 193 Acquisition and construction of property and equipment (109) (5,245) (992) (5,099) (220) (2) (1,341) (13,008) (3,721) Proceeds from sale of property - - - - - - - - 171 Proceeds from issuance of capital loan note - 1,739 - - - - - 1,739 - Principal paid on subscription liability (31) - (26) - - - - (57) (59) Interest paid on subscription liability - - - - - - - - (2) Principal paid on bonded debt - - (1,323) - - - - (1,323) - Interest paid on bonded debt - - (49) - - - - (49) - Net cash flows from (used for) capital and related financing activities 86 (3,506) (2,390) (5,082) (220) (2) 185 (10,929) (3,597) Cash Flows From Investing Activities Interest on investments 585 967 917 1,493 118 259 167 4,506 1,934 Net increase (decrease) in cash and cash equivalents 3,573 1,602 575 25 481 373 1,624 8,253 5,625 Cash and Cash Equivalents, Beginning 11,772 27,496 19,310 31,001 3,675 8,751 4,338 106,343 51,207 Cash and Cash Equivalents, Ending 15,345$ 29,098$ 19,885$ 31,026$ 4,156$ 9,124$ 5,962$ 114,596$ 56,832$ Reconciliation of operating income (loss) to net cash flows from (used for) operating activities: Operating income (loss)(9,568)$ (405)$ 789$ (498)$ (955)$ (13,527)$ (939)$ (25,103)$ 3,818$ Adjustments to reconcile operating income (loss) to net cash flows from (used for) operating activities: Depreciation/amortization expense 1,093 4,512 2,421 1,237 1,614 223 2,246 13,346 2,881 Changes in: Receivables: Accounts and unbilled usage 17 189 (111) 89 (2) (8) (84) 90 (77) Due from other governments - - - 18 - (1) 4 21 16 Inventories (92) - (91) - - - - (183) (6) Advances from grantors - - - - - - 212 212 - Accounts payable (756) (71) (85) 764 (52) 5 90 (105) (13) Accrued liabilities 17 9 9 11 2 4 9 61 474 Compensated absences (182) (33) (13) (21) 5 8 82 (154) (22) Due to other governments - - (7) (3) - - - (10) - Unearned revenue 95 - - - - (1) - 94 - Deposits 1 - 152 2 - 195 - 350 - Net pension liability (435) (236) (197) (299) (25) (46) (154) (1,392) (237) Deferred outflows of resources 198 108 111 151 11 33 73 685 122 Deferred inflows of resources 51 26 22 36 3 13 20 171 28 Other post employment benefits liability 27 12 16 18 1 7 11 92 10 Landfill closure/postclosure liability - - - 1,639 - - - 1,639 - Total adjustments 34 4,516 2,227 3,642 1,557 432 2,509 14,917 3,176 Net cash flows from (used for) operating activities (9,534)$ 4,111$ 3,016$ 3,144$ 602$ (13,095)$ 1,570$ (10,186)$ 6,994$ Noncash Investing, Capital, and Financing Activities: Contributions of capital assets from government and others -$ 2,947$ 1,765$ -$ 4,221$ -$ -$ 8,933$ -$ Capital grants not yet received 247$ -$ -$ 300$ -$ -$ 183$ 730$ -$ Operating grants not yet received 1,577$ -$ -$ -$ -$ 294$ 47$ 1,918$ -$ The notes to the financial statements are an integral part of this statement. City of Iowa City, Iowa Statement of Cash Flows Proprietary Funds 40 Project Green Assets Equity in pooled cash and investments 96$ Interest receivable 2 Total assets 98 Liabilities Accounts payable 1 Total liabilities 1 Net Position Restricted for an organization 97$ The notes to the financial statements are an integral part of this statement. June 30, 2025 (amounts expressed in thousands) City of Iowa City, Iowa Statement of Fiduciary Net Position Custodial Fund 41 Project Green Additions: Contributions 36$ Interest 4 Total additions 40 Deductions: Services and charges 23 Total deductions 23 Change in net position 17 Net Position, Beginning 80 Net Position, Ending 97$ 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, 2025 (amounts expressed in thousands) 42 City of Iowa City, Iowa Notes to Financial Statements June 30, 2025 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, compensatory, and sick leave hours for subsequent use or for payment upon death, resignation, or retirement. A liability is recorded when each of the following have occurred: the leave is attributable to services already rendered, the leave accumulates and carries forward from one reporting period to the next and the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. The City estimates the compensated absences liability for leave benefits that are more likely than not to be used or otherwise paid or settled based on historical information on employees use or payment of the benefits provided. The liability is measured using the pay rates in effect at year-end, the measurement date, and includes salary-related payments that are directly and incrementally associated with the leave liability measurement. 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). 48 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 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 49 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. 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 $26,179,192 in revenues and other financing sources and by $103,512,925 in expenditures and other financing uses. During the year ended June 30, 2025, the City over expended the Debt Service Function by $57,000. 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, 2025, there were unspent bond proceeds totaling $24,530,774 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 $3,901,000 for employee benefits, $17,448,000 for capital projects, $7,457,000 debt service, $541,000 for police, $5,174,000 for grant agreements, $11,592,000 for other purposes, $1,566,000 for bond ordinance, $768,000 for State statute, and $404,000 for future improvements. 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, 2025 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 50 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. 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 Farm Credit Bank Note securities of $1,295,580, the Federal National Mortgage Association securities of $3,652,340, the Federal Home Loan Bank securities of $23,699,100, and the United States Treasury securities of $20,553,634 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 $2,298,785, 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 $1 per unit net asset value since inception and were registered with the Securities and Exchange Commission (SEC). Interest rate risk - The City’s investment policy limits the investment of operating funds to investments that mature within 397 days. The portion of operating funds in excess of 33% of operating funds may be invested in certificates of deposit which mature within 63 months or less. Funds not identified as operating funds may be invested in instruments with maturities longer than 397 days. Credit risk. State law limits investments to commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations. It is the City’s policy to comply with rating restrictions. The investment in Iowa Public Agency Investment Trust is not rated by Moody’s Investors service as it is a state security that is backed by the full faith and credit of the issuing government and is not subject to credit risk. Concentration of credit risk. The City investment policy limits the amount that may be invested in any one issuer to a maximum amount approved by the City Council. Due to legal and budgetary reasons, the General Fund is assigned a portion of the investment earnings associated with other funds. These funds are the Employee Benefits, Other Shared Revenue and Grants, and Sanitation funds. Fair Investment Value Maturities Federal Farm Credit Bank Notes 1,295,580$ September 2040 Federal National Mortgage Association 3,652,340 December 2027 to June 2029 Federal Home Loan Bank 23,699,100 September 2025 to January 2027 United States Treasury 20,553,634 November 2025 49,200,654$ 51 3. Interfund Balances and Transfers Interfund transfers for the year ended June 30, 2025, 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. 52 53 Interfund balances for the year ended June 30, 2025, consisted of the following: Interfund balances at June 30, 2025, include due to/from other funds, which represent amounts for negative cash balance funding. The $97,403 advance to Nonmajor Governmental Funds is expected to be repaid within the next year. Interfund balances at June 30, 2025, include advances to/from other funds, which represent amounts for construction loans and a revenue bond redemption loan. $2,226,190 of the $2,424,110 advance to the Other Construction Fund is not expected to be repaid within the next year. $617,896 of the $715,579 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, 2025, 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 $20,451 in lease revenue and $4,772 in interest revenue during the current fiscal year related to this lease. As of June 30, 2025, the City’s receivable for lease payments was $144,475. The City has a deferred inflow of resources associated with this lease of $136,624 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 $17,289 in lease revenue and $621 in interest revenue during the current fiscal year related to this lease. As of June 30, 2025, the City’s receivable for lease payments was $0. The City has a deferred inflow of resources associated with this lease of $6,195 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 $15,111 in lease revenue and $2,764 in interest revenue during the current fiscal year related to this lease. As of June 30, 2025, the City’s receivable for lease payments was $81,777. The City has a deferred inflow of resources associated with this lease of $77,445 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 $9,444. The City recognized $100,826 in lease revenue and $18,717 in interest revenue during the current fiscal year related to this lease. As of June 30, 2025, the City’s receivable for lease payments was $556,201. The City has a deferred inflow of resources associated with this lease of $504,129 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 $29,776 in lease revenue and $18,384 in interest revenue during the current fiscal year related to this lease. As of June 30, 2025, the City’s receivable for lease payments was $584,394. The City has a deferred inflow of resources associated with this lease of $554,172 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 $15,929 in lease revenue and $6,267 in interest revenue during the current fiscal year related to this lease. As of June 30, 2025, the City’s receivable for lease payments was $195,914. The City has a deferred inflow of resources associated with this lease of $185,398 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 $3,062 in lease revenue and $1,205 in interest revenue during the current fiscal year related to this lease. As of June 30, 2025, the City’s receivable for lease payments was $37,666. The City has a deferred inflow of resources associated with this lease of $35,641 that will be recognized as revenue over the lease term. The City has five leases for land use at and around the Airport that were entered into agreement between February 12, 1991 and May 1, 2025. 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 $18,138. The City recognized $15,260 in lease revenue and $6,149 in interest revenue during the current fiscal year related to these leases. As of June 30, 2025, the City’s receivable for lease payments was $245,529. The City has a deferred inflow of resources associated with these leases of $234,529 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, 2024. 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 $11,982. The City recognized $140,157 in lease revenue and $13,147 in interest revenue during the current fiscal year related to these leases. As of June 30, 2025, the City’s receivable for lease payments was $371,905. The City has a deferred inflow of resources associated with these leases of $330,013 that will be recognized as revenue over the lease terms. 56 5. Capital Assets Capital asset activity for the year ended June 30, 2025, was as follows: 57 6. Long Term Debt Changes in Debt for Bonds Bond debt activity for the year ended June 30, 2025, was as follows: 58 General Obligation Bonds Various issues of general obligation bonds totaling $56,970,000 are outstanding as of June 30, 2025. The bonds have interest rates ranging from 2.00% to 6.00% and mature in varying annual amounts ranging from $340,000 to $2,200,000 per issue, with the final maturities due in the year ending June 30, 2035. 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, 2025, 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 $ 555,000 $ 950,000 Amount outstanding $ 555,000 $ 8,975,000 Revenue bond debt service requirements to maturity are as follows: 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 – maximum amount of principal and interest coming due in any succeeding year on a combination of all 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, 2025, the Water Fund had net revenues of $4,270,000 and the amount of principal and interest due was $1,351,000. 60 Summary of Bond Issues General obligation and revenue bonds payable at June 30, 2025, are comprised of the following issues: (1) 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, 2025, the City drew $1,738,761 on the note, and as of June 30, 2025, $2,527,187 is owed in relationship to this note. This note is due April 26, 2027. This note was issued pursuant to Chapters 76.13 and 384.24A of the Code of Iowa in anticipation of the receipt of and are payable from the proceeds of an authorized loan agreement and the corresponding issuance of water revenue bonds. The capital loan note payable has a term of three years. Date of Amount Interest Final Outstanding Issue Issued Rates Maturity June 30, 2025 General Obligation Bonds: Multi-Purpose June 2016 8,795,000 2.0 -3.0 6/26 1,035,000 Multi-Purpose June 2017 9,765,000 2.0 -2.5 6/27 2,140,000 Multi-Purpose June 2018 8,895,000 3.0 6/28 2,880,000 Multi-Purpose June 2019 12,535,000 2.0 - 2.25 6/29 3,765,000 Multi-Purpose June 2020 12,145,000 2.0 - 5.0 6/30 3,950,000 Multi-Purpose June 2021 11,325,000 2.0 - 5.0 6/31 6,785,000 Multi-Purpose June 2022 10,255,000 3.3 - 5.0 6/32 6,950,000 Multi-Purpose June 2023 9,105,000 3.0 - 5.0 6/33 6,790,000 Multi-Purpose June 2024 10,140,000 4.0 - 6.0 6/34 8,140,000 Multi-Purpose June 2025 14,535,000 5.0 6/35 14,535,000 Total General Obligation Bonds 56,970,000$ Date of Amount Interest Final Outstanding Issue Issued Rates Maturity June 30, 2025 Revenue Bonds: Refunded Water Bonds (1)June 2017 5,910,000 2.0 - 2.25 7/25 555,000 Taxable Urban Renewal Sept. 2016 12,805,000 3.0 6/36 8,975,000 Total Revenue Bonds 9,530,000$ 66,500,000$ 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, 2025, there were two series of Industrial Development Revenue Bonds outstanding, with an aggregate principal amount payable of $4,448,871. Debt Legal Compliance Legal Debt Margin: As of June 30, 2025, 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 $ 8,533,650 Utilities 173,706 Total valuation $ 8,707,356 Debt limit, 5% of total assessed valuation $ 435,368 Debt applicable to debt limit: General obligation bonds 56,970 Urban renewal revenue bonds 8,975 Capital loan note payable 2,527 Notes payable (Note 8) 211 Subscription liabilities (Note 8) 1,092 Other legal indebtedness (TIF rebates)(Note 11) 26,818 Total net debt applicable to limit 96,593 Legal debt margin $ 338,775 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, 2025, the City had the following balances related to its pension accounts: 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 9.55% of earnable compensation for the year ended June 30, 2025. 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 22.66% for the year ended June 30, 2025. The City’s contributions to MFPRSI for the year ended June 30, 2025, was $3,012,568. 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, 2025. Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2025, the City reported a liability of $22,692,657 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2024, 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, 2024, the City’s proportion was 3.434210% which was an decrease of 0.089301% from its proportions measured as of June 30, 2023. 64 For the year ended June 30, 2025, the City recognized pension expense of $2,986,414. At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: $3,012,568 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, 2026. 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, 2024, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: 65 The actuarial assumptions used in the June 30, 2024 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. 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, 2025, 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 2025, 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, 2025 were $3,644,609. Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2025, the City reported a liability of $14,613,786 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2024, 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, 2024, the City’s proportion was 0.401313% which was an decrease of 0.019745% from its proportions measured as of June 30, 2023. For the year ended June 30, 2025, the City recognized pension expense of $1,619,760. At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: 68 $3,644,609 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, 2026. 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, 2024, 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, 2024, 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. 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, 2025, there were no amounts due to IPERS. 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, compensated absences 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 $0 to $91,080 over 3 to 10 years with an interest rates of 2.321% or 3.23% and final payments due December 2029. During the year ended June 30, 2025, principal and interest paid were $438,471 and $12,530 respectively. Future principal and interest payments as of June 30, 2025, are as follows: Changes in Long-Term Liabilities - Notes Payable Changes in Long-Term Liabilities - Compensated Absences Compensated absences activity for the year ended June 30, 2025, was as follows: Restated Due Within July 1, 2024 Issues Retirements June 30, 2025 One Year Changes in Long-Term Liabilities - Subscription Based Information Technology Liability Subscription liability activity for the year ended June 30, 2025, was as follows: Due Within July 1, 2024 Issues Retirements June 30, 2025 One Year 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, 2025, is $17,497,517, which is based on 63.8% usage (filled) of the landfill and is included in accrued liabilities within the Sanitation Fund. It is estimated that an additional amount of approximately $9,928,058 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, 2045. The estimated total current cost of the landfill closure and post-closure care costs at June 30, 2025, was determined by a licensed professional engineer and approximated at $27,425,575. 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, 2025. 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, 2025, the Sanitation Fund had $16,458,985 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. Changes in Long-Term Liabilities - Landfill Closure Post-closure Care Costs 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, 2025, the following employees were covered by the benefit terms: Total OPEB Liability: The City’s total OPEB liability of $9,839,853 was measured as of June 30, 2025 and was determined by an actuarial valuation as of that date. Actuarial Assumptions: The total OPEB liability in the June 30, 2025 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 5.20% 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. 73 The actuarial assumptions used in the June 30, 2025 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 4.21% in fiscal year 2024 to 5.20% in fiscal year 2025. 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 (4.20%) or 1% higher (6.20%) 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 9,523,167$ Changes for the year: Service Cost 707,608 Interest 421,720 Difference between expected and actual experience (659,268) Changes in assumptions 278,440 Benefit payments (431,814) Net changes 316,686 Total OPEB liability end of year 9,839,853$ 1% Decrease (4.20%) Discount Rate (5.20%) 1% Increase (6.20%) Total OPEB liability 10,601,802$ 9,839,853$ 9,127,104$ 1% Decrease (7.0%) Healthcare Cost Trend Rate (8.0%) 1% Increase (9.00%) Total OPEB liability 8,709,561$ 9,839,853$ 11,175,248$ 74 OPEB Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB: For the year ended June 30, 2025, the City recognized OPEB expense of $1,098,752. At June 30, 2025, 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. • 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. 75 • 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. 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 - 262,440 - - - - - 262,440 Property Held for Resale 5,974,000 - - - - - - 5,974,000 Total Nonspendable 6,043,000 262,440 - - - - - 6,305,440 Restricted for: Public Safety 541,484 - - - - - - 541,484 Debt Service - - - - - 7,670,102 - 7,670,102 GO Bond Projects - - - 16,105,303 18,063,416 - - 34,168,719 State Funding - 6,677,118 - - - - - 6,677,118 Grant Agreement - - - - - - 2,958,588 2,958,588 Affordable Housing - 8,011,060 - - - - - 8,011,060 Economic Development - - 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, 2025 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 $500,000 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, 2025 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, 2025 and 2024 are as follows: Current-Year Beginning-of- Claims and Balance at Fiscal-Year Changes in Claim Fiscal Liability Estimates Payments Year-End 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 $15,203,458. 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, 2025 and 2024 are as follows: Current-Year Beginning-of- Claims and Balance at Fiscal-Year Changes in Claim Fiscal Liability Estimates Payments Year-End 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 9 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 $26,818,415 exist, of which $2,520,032 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 $2,802,032. 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, 2025, the City has an unused letter of credit totaling $675,000. 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, 2026, 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. Project AmountFund 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, 2025, $1,026,199 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, 2025 under agreements entered into by any entities. 79 14. Restatement The City implemented GASB Statement No. 101, Compensated Absences, which required the City to restate net position as of June 30, 2024, as follows: 15. New Governmental Accounting Standards Board (GASB) Standards The City adopted the following statements during the year ended June 30, 2025: GASB Statement No. 101, Compensated Absences, issued June 2022. 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. This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A liability should be recognized for leave that has not been used if (a) the leave is attributable to services already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. With respect to financial statements prepared using the current financial resources measurement focus, this Statement requires that expenditures be recognized for the amount that normally would be liquidated with expendable available financial resources. This Statement amends the existing requirements to disclose the gross increases and decreases in a liability for compensated absences to allow governments to disclose only the net change in the liability (As long as they identify it as a net change). In addition, governments are no longer required to disclose which governmental funds typically have been used to liquidate the liability for compensated absences. GASB Statement No. 102, Certain Risk Disclosures, issued December 2024. The objective of this Statement is to provide users of government financial statements with information about risks related to a government’s vulnerabilities due to certain concentrations or constraints that is essential to their analyses for making decisions or assessing accountability. A government should provide information in sufficient detail to enable users of financial statements to understand the nature of the circumstances disclosed and the government’s vulnerability to the risk of a substantial impact associated with the concentration or constraint. The disclosures should include descriptions of the following: (a) The concentration or constraint (b) Each event associated with the concentration or constraint that could cause a substantial impact if the Total Governmental Activites 351,614$ 5,735$ 345,879$ Transit Fund 31,202$ 484$ 30,718$ Wastewater Treatment Fund 152,449 157 152,292 Water Fund 91,429 246 91,183 Sanitation Fund 31,093 532 30,561 Stormwater Fund 63,309 33 63,276 Housing Authority Fund 9,489 50 9,439 Nonmajor Fund 45,029 169 44,860 Internal Service 26,229 - 26,229 Total Business Type Activites 450,229$ 1,671$ 448,558$ 80 event had occurred or had begun to occur prior to the issuance of the financial statements (c) Actions taken by the government prior to the issuance of the financial statements to mitigate the risk. The above statements did not have a significant impact to the City except for GASB Statement No. 101 required the City to restate beginning net position as disclosed in Note 14 to the financial statements. The Governmental Accounting Standards Board (GASB) has issued two statements not yet implemented by the City. The statements, which might impact the City’s financial statements, are as follows: GASB Statement No. 103, Financial Reporting Model Improvements, issued April 2024, will be effective for the City beginning with its fiscal year ending June 30, 2026. 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 addresses certain application issues. GASB Statement No. 104, Disclosure of Certain Capital Assets, issued September 2024, will be effective for the City beginning with its 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. This Statement requires certain types of capital assets to be disclosed separately in the capital assets note disclosures required by Statement 34. Lease assets recognized in accordance with Statement No. 87, Leases, and intangible right-to-use assets recognized in accordance with Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, should be disclosed separately by major class of underlying asset in the capital as-sets note disclosures. Subscription assets recognized in accordance with Statement No. 96, Subscription-Based Information Technology Arrangements, also should be separately disclosed. In addition, this Statement requires intangible assets other than those three types to be disclosed separately by major class. This Statement also requires additional disclosures for capital assets held for sale The City’s management has not yet determined the effect these statements will have on the City’s financial statements. 81 Governmental Fund Types Enterprise Fund Actual Budgetary Types Actual Total Actual Basis Budgetary Basis Budgetary Basis Revenues: Property taxes 68,441$ -$ 68,441$ Delinquent property taxes (1) - (1) Tax increment financing taxes 4,568 - 4,568 Other city taxes 3,859 - 3,859 Special assessments - - - Licenses and permits 2,426 17 2,443 Intergovernmental 20,382 19,899 40,281 Charges for services 6,991 47,219 54,210 Use of money and property 6,106 5,798 11,904 Miscellaneous 4,135 1,174 5,309 Total revenues 116,907 74,107 191,014 Expenditures/Expenses: Public safety 29,975 - 29,975 Public works 12,499 - 12,499 Health and social services 684 - 684 Culture and recreation 17,027 - 17,027 Community and economic development 18,602 - 18,602 General government 11,915 - 11,915 Debt service 13,845 - 13,845 Capital outlay 19,991 - 19,991 Business-type - 74,178 74,178 Total expenditures/expenses 124,538 74,178 198,716 Excess (deficiency) of revenues over (under) expenditures/expenses (7,631) (71) (7,702) Other financing sources and uses, net 11,713 5,828 17,541 Net change in fund balances 4,082 5,757 9,839 Balances, beginning of year 129,887 109,569 239,456 Balances, end of year 133,969$ 115,326$ 249,295$ 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, 2025 (dollar amounts expressed in thousands) Budgetary Basis 82 Final to Actual Variance - Positive Original Final (Negative) 68,821$ 68,821$ (380)$ - - (1) 4,388 4,388 180 3,576 3,576 283 2 2 (2) 2,123 2,123 320 65,769 57,211 (16,930) 56,580 54,476 (266) 3,171 3,171 8,733 10,152 5,765 (456) 214,582 199,533 (8,519) 31,911 32,281 2,306 13,161 13,253 754 688 688 4 17,695 17,751 724 10,230 25,779 7,177 13,627 14,517 2,602 13,788 13,788 (57) 41,048 74,006 54,015 99,559 145,082 70,904 241,707 337,145 138,429 (27,125) (137,612) 129,910 16,771 49,923 (32,382) (10,354) (87,689) 97,528$ 158,684 239,457 148,330$ 151,768$ Budgeted Amounts 83 Accrual Modified Accrual Budget Basis Adjustments Basis Revenues 116,907$ (2,890)$ 114,017$ Expenditures 124,538 (8,593) 115,945 Net (7,631) 5,703 (1,928) Other financing sources and uses, net 11,713 (3,466) 8,247 Beginning Fund Balances 129,887 5,671 135,558 Ending Fund Balances 133,969$ 7,908$ 141,877$ Accrual Accrual Budget Basis Adjustments Basis Revenues 74,107$ 4,781$ 78,888$ Expenditures 74,178 476 74,654 Net (71) 4,305 4,234 Other financing sources and uses, net 5,828 2,572 8,400 Beginning Fund Balances, as restated 109,569 312,760 422,329 Ending Fund Balances 115,326$ 319,637$ 434,963$ 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, 2025 (dollar amounts expressed in thousands) 84 City of Iowa City, Iowa Note to Required Supplementary Information - Budgetary Reporting For the Year Ended June 30, 2025 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 decreased budgeted revenues by $15,049,000 and increased expenditures by $95,438,000. The budget amendments were primarily due to changes in the breadth and timing of capital improvement projects, which the City budgets in full during the initial year of the projects and amends future year budgets for carryover. 85 2025 2024 2023 2022 City's proportion of the net pension liability 3.434210%3.523511%3.379080%3.529220% City's proportionate share of the net pension liability 22,693$ 22,064$ 18,976$ 7,926$ City's covered payroll 12,873 12,590 11,413 11,468 City's proportionate share of the net pension liability as a percentage of its covered payroll 176.28%175.25%166.27%69.11% Plan fiduciary net position as a percentage of the 83.37%83.53%84.62%93.62% * 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 2021 2020 2019 2018 2017 2016 3.621079%3.684880%3.706970%3.648635%3.697128%3.704972% 28,882$ 24,170$ 22,071$ 21,398$ 23,117$ 17,406$ 11,503 11,155 10,743 10,347 10,019 9,716 251.08%216.67%205.45%206.80%230.73%179.15% 76.47%79.94%81.07%80.60%78.20%83.04% 87 2025 2024 2023 2022 Statutorily required contributions 3,013$ 2,958$ 3,009$ 2,988$ Contributions in relation to the statutorily required contribution (3,013) (2,958) (3,009) (2,988) City's covered payroll 13,295$ 12,873$ 12,590$ 11,413$ Contributions as a percentage of covered payroll 22.66%22.98%23.90%26.18% 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 2021 2020 2019 2018 2017 2016 2,903$ 2,808$ 2,902$ 2,759$ 2,682$ 2,782$ (2,903) (2,808) (2,902) (2,759) (2,682) (2,782) 11,468$ 11,503$ 11,155$ 10,743$ 10,347$ 10,019$ 25.31%24.41%26.02%25.68%25.92%27.77% 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 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. City of Iowa City, Iowa Notes to Required Supplementary Information - Pension Liability Municipal Fire and Police Retirement System of Iowa Year ended June 30, 2025 90 91 2025 2024 2023 2022 City's proportion of the net pension liability 0.4013130%0.4210580%0.4185650%-0.1604936% City's proportionate share of the net pension liability 14,614$ 19,005$ 15,814$ 554$ City's covered payroll 37,048 37,000 33,752 32,047 City's proportionate share of the net pension liability as a percentage of its covered payroll 39.45%51.36%46.85%1.73% Plan fiduciary net position as a percentage of the total pension liability 92.30%90.13%90.34%100.81% * 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 2021 2020 2019 2018 2017 2016 0.3947745%0.4053890%0.4016869%0.3968158%0.3962696%0.4159256% 27,732$ 23,475$ 25,420$ 26,433$ 24,938$ 20,549$ 31,345 30,852 30,190 29,619 28,448 28,495 88.47%76.09%84.20%89.24%87.66%72.11% 82.90%85.45%83.62%82.21%81.82%85.19% 93 2025 2024 2023 2022 Statutorily required contributions 3,645$ 3,497$ 3,493$ 3,186$ Contributions in relation to the statutorily required contribution (3,645) (3,497) (3,493) (3,186) Contribution deficiency (excess)-$ -$ -$ -$ City's covered payroll 38,608 37,048 37,000 33,752$ 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 2021 2020 2019 2018 2017 2016 3,025$ 2,959$ 2,912$ 2,696$ 2,645$ 2,540$ (3,025) (2,959) (2,912) (2,696) (2,645) (2,540) -$ -$ -$ -$ -$ -$ 32,047$ 31,345$ 30,852$ 30,190$ 29,619$ 28,448$ 9.44%9.44%9.44%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 • 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 wage growth assumption from 4.00% to 3.25%. • Decreased the payroll growth assumption from 4.00% to 3.25%. City of Iowa City, Iowa Notes to Required Supplementary Information - Pension Liability Iowa Public Employees' Retirement System Year ended June 30, 2025 96 2025 2024 2023 2022 2021 2020 2019 2018 Service Cost 708$ 636$ 617$ 823$ 734$ 633$ 553$ 502$ Interest 422 378 353 226 240 323 297 245 Difference between expected and actual experience (659) (418) (118) (254) 459 (483) 1,161 (377) Changes in assumptions 278 628 (25) (1,942) 305 (83) 225 982 Benefit payments (432) (431) (221) (427) (667) (641) (948) (174) Net change in total OPEB liability 317 793 606 (1,574) 1,071 (251) 1,288 1,178 Total OPEB liability beginning of year 9,523 8,730 8,124 9,698 8,627 8,878 7,590 6,412 Total OPEB liability end of year 9,840$ 9,523$ 8,730$ 8,124$ 9,698$ 8,627$ 8,878$ 7,590$ City's covered-employee payroll 51,903$ 49,921$ 49,590$ 44,134$ 43,515$ 42,848$ 42,007$ 40,933$ Total OPEB liability as a percentage of covered-employee payroll 18.96% 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, 2025 5.20% 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 Eight 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 1,195$ -$ 520$ 1,715$ Receivables: Property tax 695 - - 695 Interest 18 - 8 26 Notes - 2,914 - 2,914 Due from other governments - 206 131 337 Total assets 1,908$ 3,120$ 659$ 5,687$ Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities Accounts payable 59$ 63$ 18$ 140$ Accrued liabilities - 1 14 15 Due to other funds - 97 - 97 Deferred revenue - - 12 12 Total liabilities 59 161 44 264 Deferred Inflows of Resources Unavailable revenues: Succeeding year property taxes 661 - - 661 Grants - - 14 14 Other - - 23 23 Total deferred inflows of resources 661 - 37 698 City of Iowa City, Iowa Combining Balance Sheet Nonmajor Governmental Funds 100 Metropolitan Community Planning Development Organization Economic Block of Johnson Development Grant County Total Revenues Property taxes 5,230$ -$ -$ 5,230$ Intergovernmental 43 1,658 460 2,161 Use of money and property 80 20 24 124 Miscellaneous - 195 14 209 Total revenues 5,353 1,873 498 7,724 Expenditures Current: Community and economic development 3,631 2,096 949 6,676 Total expenditures 3,631 2,096 949 6,676 Excess (deficiency) of revenues over (under) expenditures 1,722 (223) (451) 1,048 Other Financing Sources (Uses) Transfers in 183 - 395 578 Transfers out (1,585) (131) - (1,716) Total other financing sources and (uses)(1,402) (131) 395 (1,138) Net change in fund balances 320 (354) (56) (90) Fund Balances, Beginning 868 3,313 634 4,815 Fund Balances, Ending 1,188$ 2,959$ 578$ 4,725$ 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, 2025 (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 188$ 5,452$ 5,640$ Receivables: Accounts and unbilled usage 29 130 159 Interest 1 81 82 ease - Due from other governments 230 - 230 Total current assets 520 5,663 6,183 Noncurrent assets: Restricted assets: Equity in pooled cash and investments 20 302 322 Lease receivable 545 - 545 Capital assets: Land 11,995 3,489 15,484 Buildings 5,458 41,974 47,432 Improvements other than buildings 483 328 811 Machinery and equipment 531 467 998 Infrastructure 19,440 - 19,440 Accumulated depreciation (16,483) (27,677) (44,160) IT subscriptions - 349 349 Accumulated amortization - (232) (232) Construction in progress 1,092 - 1,092 Total noncurrent assets 23,081 19,000 42,081 Total assets 23,601 24,663 48,264 Deferred Outflows of Resources Pension related deferred outflows 12 192 204 OPEB related deferred outflows 3 58 61 Total deferred outflows of resources 15 250 265 Liabilities Current liabilities: Accounts payable 11 77 88 Contracts payable 50 399 449 Accrued liabilities 2 44 46 Compensated absences 12 131 143 Other post employment benefits obligation 14 282 296 Total current liabilities 89 933 1,022 Noncurrent liabilities: Liabilities payable from restricted assets: Deposits 8 1 9 Advances from grantors 10 202 212 Advances from other funds - 716 716 Compensated absences 25 212 237 Net pension liability 32 508 540 Other post employment benefits obligation - 43 43 Total noncurrent liabilities 75 1,682 1,757 Total liabilities 164 2,615 2,779 Deferred Inflows of Resources Lease related deferred inflows 565 - 565 Pension related deferred inflows 1 20 21 OPEB related deferred inflows 4 87 91 Total deferred inflows of resources 570 107 677 Net Position Net investment in capital assets 22,465 18,299 40,764 Restricted for future improvements 100 304 404 Unrestricted 317 3,588 3,905 Total net position 22,882$ 22,191$ 45,073$ City of Iowa City, Iowa Combining Statement of Net Position Nonmajor Enterprise Funds June 30, 2025 (amounts expressed in thousands) 104 Airport Parking Total Operating Revenues: Charges for services 300$ 7,251$ 7,551$ Miscellaneous - 23 23 Total operating revenues 300 7,274 7,574 Operating Expenses: Personal services 110 2,535 2,645 Commodities - 820 820 Services and charges 291 2,511 2,802 401 5,866 6,267 Depreciation & amortization 1,017 1,229 2,246 Total operating expenses 1,418 7,095 8,513 Operating loss (1,118) 179 (939) Nonoperating Revenues (Expenses): Loss on disposal of capital assets - (222) (222) Operating grants (2) - (2) Lease revenue 179 - 179 Interest income 10 206 216 Total nonoperating revenues 187 (16) 171 Loss before capital contributions and transfers (931) 163 (768) Capital contributions 933 - 933 Transfers in 100 - 100 Transfers out (23) (29) (52) Change in net position 79 134 213 Net Position, Beginning, as restated 22,803 22,057 44,860 Net Position, Ending 22,882$ 22,191$ 45,073$ Nonmajor Enterprise Funds and Changes in Fund Net Position Combining Statement of Revenues, Expenses City of Iowa City, Iowa 105 Airport Parking Total Cash Flows From Operating Activities Receipts from customers and users 313$ 7,393$ 7,706$ Payments to suppliers (271) (3,261) (3,532) Payments to employees (111) (2,493) (2,604) Net cash flows used for operating activities (69) 1,639 1,570 Cash Flows From Noncapital Financing Activities Operating grants received 71 3 74 Transfers from other funds 100 - 100 Transfers to other funds (23) (29) (52) Repayment of advances from other funds (126) (294) (420) Net cash flows from (used for) noncapital financing activities 22 (320) (298) Cash Flows From Capital and Related Financing Activities Capital grants received 1,381 18 1,399 Lease revenues received 179 - 179 Lease related deferred inflows of resources (97) - (97) Lease recievable 45 - 45 Acquisition and construction of property and equipment (1,370) 29 (1,341) Net cash flows used for capital and related financing activities 138 47 185 Cash Flows From Investing Activities Interest on investments 9 158 167 Net increase (decrease) in cash and cash equivalents 100 1,524 1,624 Cash and Cash Equivalents, Beginning 108 4,230 4,338 Cash and Cash Equivalents, Ending 208$ 5,754$ 5,962$ Reconciliation of operating loss to net cash flows from (used for) operating activities: Operating loss (1,118)$ 179$ (939)$ Adjustments to reconcile operating loss to net cash flows used for operating activities: Depreciation expense 1,017 1,229 2,246 Changes in: Receivables: Accounts and unbilled usage - (84) (84) Due from other governments 3 1 4 Advances from grantors 10 202 212 Accounts payable 20 70 90 Accrued liabilities - 9 9 Compensated absences 1 81 82 Net pension liability (7) (147) (154) Deferred outflows of resources 4 69 73 Deferred inflows of resources 1 19 20 Other post employment benefits asset/obligation - 11 11 Total adjustments 1,049 1,460 2,509 Net cash flows used for operating activities (69)$ 1,639$ 1,570$ Noncash Investing, Capital, and Financing Activities: Capital grants not yet received 183$ -$ 183$ CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS 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 25,235$ 734$ 27,120$ 3,743$ 56,832$ Receivables: Accounts and unbilled usage 30 - 226 - 256 Interest 361 12 399 58 830 Due from other governments 1 - - - 1 Inventories 676 - - - 676 Total current assets 26,303 746 27,745 3,801 58,595 Noncurrent assets: Capital assets: Land 685 - - - 685 Buildings 1,370 - - 183 1,553 Improvements other than buildings 50 - - - 50 Machinery and equipment 29,379 140 19 2,049 31,587 Infrastructure - - - 3,635 3,635 Accumulated depreciation (17,021) (73) (19) (2,632) (19,745) IT subscriptions - - - 592 592 Accumulated amortization - - - (536) (536) Construction in progress 686 - - 550 1,236 Total noncurrent assets 15,149 67 - 3,841 19,057 Total assets 41,452 813 27,745 7,642 77,652 Deferred Outflows of Resources Pension related deferred outflows 118 3 25 143 289 OPEB related deferred outflows 28 3 3 28 62 Total deferred outflows of resources 146 6 28 171 351 Liabilities Current liabilities: Accounts payable 252 8 198 14 472 Accrued liabilities 22 1 2,869 31 2,923 Compensated Absences 58 1 20 56 135 Other post employment benefits liability 149 14 14 155 332 Total current liabilities 481 24 3,101 256 3,862 Noncurrent liabilities: Compensated Absences 91 - 45 93 229 Net pension liability 338 9 68 387 802 Other post employment benefits liability 6 - - - 6 Total noncurrent liabilities 435 9 113 480 1,037 Total liabilities 916 33 3,214 736 4,899 Deferred Inflows of Resources Lease related deferred inflows - - - 6 6 Pension related deferred inflows 13 - 3 15 31 OPEB related deferred inflows 42 4 4 42 92 55 4 7 63 129 Net Position Net investment in capital assets 15,149 67 - 3,841 19,057 Unrestricted 25,478 715 24,552 3,173 53,918 Total net position 40,627$ 782$ 24,552$ 7,014$ 72,975$ (amounts expressed in thousands) City of Iowa City, Iowa Combining Statement of Net Position Internal Service Funds June 30, 2025 108 Equipment Central Loss Information Maintenance Services Reserve Technology Total Operating Revenues: Charges for services 7,823$ 152$ 15,398$ 2,855$ 26,228$ Total operating revenues 7,823 152 15,398 2,855 26,228 Operating Expenses: Personal services 1,066 30 250 1,364 2,710 Commodities 1,825 12 1 770 2,608 Services and charges 874 111 12,440 786 14,211 3,765 153 12,691 2,920 19,529 Depreciation & amortization 2,450 30 - 401 2,881 Total operating expenses 6,215 183 12,691 3,321 22,410 Operating income (loss)1,608 (31) 2,707 (466) 3,818 Nonoperating Revenues: Gain (loss) on disposal of capital assets 164 (6) - 3 161 Lease Revenue - - - 14 14 Interest income 1,102 39 1,145 163 2,449 Interest expense - - - (2) (2) Total nonoperating revenues 1,266 33 1,145 178 2,622 Income before transfers 2,874 2 3,852 (288) 6,440 Transfers in 532 - - 64 596 Transfers out - (200) - (108) (308) Change in net position 3,406 (198) 3,852 (332) 6,728 Net Position, Beginning, as restated 37,221 980 20,700 7,346 66,247 Net Position, Ending 40,627$ 782$ 24,552$ 7,014$ 72,975$ (amounts expressed in thousands) City of Iowa City, Iowa Combining Statement of Revenues, Expenses Internal Service Funds For the Year Ended June 30, 2025 and Changes in Fund Net Position 109 Equipment Central Loss Information Maintenance Services Reserve Technology Total Cash Flows From Operating Activities Receipts from users 7,931$ 152$ 15,225$ 2,859$ 26,167$ Payments to suppliers (2,721) (122) (11,835) (1,693) (16,371) Payments to employees (1,115) (33) (253) (1,401) (2,802) Net cash flows from operating activities 4,095 (3) 3,137 (235) 6,994 Cash Flows From Noncapital Financing Activities Transfers from other funds 532 - - 64 596 Net cash flows from (used for) noncapital financing activities 532 (200) - (44) 288 Cash Flows From Capital and Related Financing Activities Acquisition and construction of property and equipment (3,401) (32) - (288) (3,721) Lease revenues received - - - 14 14 Lease related deferred inflows of resources - - - (14) (14) Lease recievable - - - 20 20 Interest paid on subsciption liability - - - (2) (2) Principal paid on subsciption liability - - - (59) (59) Proceeds from sale of property 168 - - 3 171 Net cash flows used for capital and related financing activities (3,233) (32) - (326) (3,591) Cash Flows From Investing Activities Interest on investments 850 35 912 137 1,934 Net increase in cash and cash equivalents 2,244 (200) 4,049 (468) 5,625 Cash and Cash Equivalents, Beginning 22,991 934 23,071 4,211 51,207 Cash and Cash Equivalents, Ending 25,235$ 734$ 27,120$ 3,743$ 56,832$ Reconciliation of operating income to net cash flows from operating activities: Operating income 1,608$ (31)$ 2,707$ (466)$ 3,818$ Adjustments to reconcile operating income to net cash flows from operating activities: Depreciation/amortization expense 2,450 30 - 401 2,881 Changes in: Receivables: Accounts and unbilled usage 92 - (173) 4 (77) Due from other governments 16 - - - 16 Inventories (6) - - - (6) Accounts payable (16) 1 139 (137) (13) Accrued liabilities 1 1 468 4 474 Compensated absences (28) (1) 3 4 (22) Net pension liability (93) (5) (19) (120) (237) Deferred outflows of resources 54 2 9 57 122 Deferred inflows of resources 12 - 3 13 28 Other post employment benefits liability 5 - - 5 10 Total adjustments 2,487 28 430 231 3,176 Net cash flows from operating activities 4,095$ (3)$ 3,137$ (235)$ 6,994$ (amounts expressed in thousands) City of Iowa City, Iowa Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2025 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 20161 2017 2018 2019 2020 2021 2022 2023 2024 2025 Governmental activities Net investment in capital assets 163,362$ 183,651$ 203,077$ 208,028$ 220,004$ 228,418$ 230,285$ 235,218$ 238,351$ 248,335$ Restricted 42,154 47,676 41,490 38,819 33,578 33,664 36,900 40,048 44,316 44,648 Unrestricted 18,402 16,264 17,646 20,124 21,819 25,528 39,505 52,971 68,947 67,961 Total governmental activities net position 223,918$ 247,591$ 262,213$ 266,971$ 275,401$ 287,610$ 306,690$ 328,237$ 351,614$ 360,944$ Business-type activities Net investment in capital assets 279,679$ 285,912$ 294,109$ 304,111$ 314,523$ 315,915$ 325,787$ 325,391$ 332,087$ 339,943$ Restricted 22,269 21,238 22,219 18,055 17,558 14,859 13,216 7,959 5,292 4,203 Unrestricted 69,472 76,664 73,126 77,224 76,661 84,097 92,370 104,736 112,850 118,653 Total business-type activities net position 371,420$ 383,814$ 389,454$ 399,390$ 408,742$ 414,871$ 431,373$ 438,086$ 450,229$ 462,799$ Primary government Net investment in capital assets 443,041$ 469,563$ 497,186$ 512,139$ 534,527$ 544,333$ 556,072$ 560,609$ 570,438$ 588,278$ Restricted 64,423 68,914 63,709 56,874 51,136 48,523 50,116 48,007 49,608 48,851 Unrestricted 87,874 92,928 90,772 97,348 98,480 109,625 131,875 157,707 181,797 186,614 Total primary government net position 595,338$ 631,405$ 651,667$ 666,361$ 684,143$ 702,481$ 738,063$ 766,323$ 801,843$ 823,743$ 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 20161 2017 2018 2019 2020 2021 2022 2023 2024 2025 Expenses Governmental activities: Public safety 22,029$ 24,002$ 25,191$ 26,265$ 29,252$ 30,411$ 23,609$ 26,450$ 29,252$ 29,883$ Public works 10,839 12,032 12,813 16,324 16,071 16,363 17,746 19,051 16,733 16,452 Culture and recreation 14,422 15,525 16,363 16,009 16,233 15,774 16,923 18,135 18,664 19,115 Community and economic development 6,786 8,253 12,019 16,022 9,383 8,549 11,074 13,570 12,269 19,364 General government 6,240 6,124 6,858 7,524 7,693 10,529 7,439 8,774 10,442 7,951 Debt service 1,287 1,481 1,414 1,444 1,452 1,561 1,553 1,622 1,624 1,696 Total governmental activities expenses 61,603 67,417 74,658 83,588 80,084 83,187 78,344 87,602 88,984 94,461 Business-type activities: Wastewater 11,866 11,233 11,392 11,413 10,807 12,520 12,105 12,869 12,843 13,593 Water 8,149 8,921 9,472 9,543 9,302 10,177 9,477 9,672 11,022 11,131 Sanitation 8,735 9,123 9,408 10,858 10,145 10,045 10,113 10,282 12,907 12,545 Housing authority 8,378 8,798 9,535 10,170 10,021 10,141 11,832 12,067 13,277 13,904 Parking 4,460 4,620 5,590 5,461 5,014 4,613 5,381 6,436 6,067 7,246 Airport 1,597 1,402 1,680 1,466 2,511 1,835 1,509 1,433 1,677 1,407 Stormwater 1,989 2,432 1,844 1,832 2,198 2,105 2,190 2,393 2,147 2,896 Transit 7,486 7,263 8,071 8,833 9,041 8,107 8,573 9,276 10,604 10,438 Total business-type activities expenses 52,660 53,792 56,992 59,576 59,039 59,543 61,180 64,428 70,544 73,160 Total primary government expenses 114,263$ 121,209$ 131,650$ 143,164$ 139,123$ 142,730$ 139,524$ 152,030$ 159,528$ 167,621$ Program Revenues Governmental activities: Charges for services Public safety 4,813$ 5,286$ 4,438$ 4,870$ 4,430$ 4,277$ 4,625$ 5,129$ 5,331$ 5,037$ Public works 628 724 62 290 243 482 149 112 349 60 Culture and recreation 823 842 836 854 508 322 627 696 701 677 Community and economic development 1,044 36 441 548 59 1,837 3,625 2,066 20 15 General government 1,252 1,524 1,520 1,717 1,551 1,582 1,728 1,871 1,801 1,521 Operating grants and contributions 9,941 10,828 10,245 13,758 13,113 12,479 14,491 15,550 23,598 16,659 Capital grants and contributions 3,999 9,952 1,459 1,972 1,915 2,845 4,316 3,113 1,493 1,914 Total governmental activities program revenues 22,500 29,192 19,001 24,009 21,819 23,824 29,561 28,537 33,293 25,883 Business-type activities: Charges for services: Wastewater 12,266 12,277 12,626 12,831 12,357 12,155 12,121 12,333 12,795 13,175 Water 9,134 9,275 9,473 9,640 10,048 9,934 10,127 10,473 10,997 11,160 Sanitation 9,215 9,927 10,014 10,017 10,193 11,944 11,289 11,853 12,767 12,826 Housing authority 300 321 323 295 280 296 282 307 350 366 Parking 5,438 5,453 5,648 5,982 4,354 3,758 5,054 5,296 5,459 7,251 Airport 333 345 348 361 371 376 372 389 396 479 Stormwater 1,168 1,544 1,560 1,568 1,730 1,701 1,704 1,730 1,886 1,922 Transit 2,099 2,089 2,216 2,171 1,802 1,385 1,745 1,822 958 1,179 Capital grants and contributions: Wastewater 3,415 2,226 1,913 1,827 2,550 1,580 964 167 360 1,502 Capital grants and contributions: Water 254 869 483 488 965 834 481 235 266 782 Capital grants and contributions: Sanitation - - 22 13 - - - - - 300 Capital grants and contributions: Airport 260 58 49 38 134 267 154 690 632 933 Capital grants and contributions: Stormwater 370 1,251 892 902 876 1,230 696 540 186 1,491 Capital grants and contributions: Parking - - - - - - - - 18 - Capital grants and contributions: Transit 308 395 3,827 - - 77 3,416 - - 342 Operating grants and contributions: Housing authority 8,318 8,532 9,065 9,443 9,875 9,691 11,481 11,529 13,297 13,453 Operating grants and contributions: Water - - - - 2 45 42 6 - - Operating grants and contributions: Airport 128 69 72 14 896 332 259 147 117 (2) Operating grants and contributions: Sanitation 3 - 3 104 20 18 105 - - - Operating grants and contributions: Wastewater - - - - 8 - 77 - - - Operating grants and contributions: Stormwater 95 - 2 - - - - - - - Operating grants and contributions: Parking - - - - 3 - 3 - - - Operating grants and contributions: Transit 2,095 2,235 2,088 2,152 3,107 3,016 5,096 5,059 5,548 5,026 Total business-type activities program revenues 55,199 56,866 60,624 57,846 59,571 58,639 65,468 62,576 66,032 72,185 Total primary government revenues 77,699$ 86,058$ 79,625$ 81,855$ 81,390$ 82,463$ 95,029$ 91,113$ 99,325$ 98,068$ Net (Expense) / Revenues Governmental activities (39,103)$ (38,225)$ (55,657)$ (59,579)$ (58,265)$ (59,363)$ (48,783)$ (59,065)$ (55,691)$ (68,578)$ Business-type activities 2,539 3,074 3,632 (1,730) 532 (904) 4,288 (1,852) (4,512) (975) Total primary government net expense (36,564)$ (35,151)$ (52,025)$ (61,309)$ (57,733)$ (60,267)$ (44,495)$ (60,917)$ (60,203)$ (69,553)$ General Revenues and Other Changes in Net Position Governmental activities: General revenues: Property taxes 53,114$ 57,649$ 59,046$ 61,739$ 62,846$ 69,482$ 70,678$ 70,824$ 70,578$ 73,058$ Other taxes 2,717 2,802 2,706 2,935 2,696 2,576 3,541 3,786 3,774 3,808 Grants and contributions not restricted to specific purposes 2,080 1,583 1,547 1,552 1,513 1,587 1,555 1,244 1,675 1,373 Earnings (loss) on investments 1,045 1,397 2,368 3,257 2,585 841 (544) 4,325 8,894 8,916 Miscellaneous 4,464 3,369 3,656 3,329 3,331 3,030 3,524 3,984 3,903 4,681 Gain on sale of assets 218 2,151 140 186 111 213 257 1,242 418 341 Transfers (6,395) (7,053) 1,814 (8,661) (6,387) (6,157) (11,148) (4,876) (10,174) (8,534) Reassignments 82 - - - - - - - - - Total governmental activities 57,325 61,898 71,277 64,337 66,695 71,572 67,863 80,529 79,068 83,643 1 The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015. (continued) City of Iowa City, Iowa Changes in Net Position Last Ten Fiscal Years (Accrual basis of accounting) (amounts expressed in thousands) 114 20161 2017 2018 2019 2020 2021 2022 2023 2024 2025Business-type activities: General revenues: Earnings (loss) on investments 715 938 1,496 2,166 1,794 426 (190) 2,605 5,253 5,340 Gain on sale of assets 2,463 69 2,438 1 74 22 23 1 23 - Miscellaneous 362 1,260 456 838 565 428 1,233 1,083 1,205 1,342 Transfers 6,395 7,053 (1,814) 8,661 6,387 6,157 11,148 4,876 10,174 8,534 Reassignments (82) - - - - - - - - - Total business-type activities 9,853 9,320 2,576 11,666 8,820 7,033 12,214 8,565 16,655 15,216 Total primary government 67,178$ 71,218$ 73,853$ 76,003$ 75,515$ 78,605$ 80,077$ 89,094$ 95,723$ 98,859$ Change in Net Position Governmental activities 18,222$ 23,673$ 15,620$ 4,758$ 8,430$ 12,209$ 19,080$ 21,464$ 23,377$ 15,065$ Business-type activities 12,392 12,394 6,208 9,936 9,352 6,129 16,502 6,713 12,143 14,241 Total primary government 30,614$ 36,067$ 21,828$ 14,694$ 17,782$ 18,338$ 35,582$ 28,177$ 35,520$ 29,306$ 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 20161 2017 2018 2019 2020 2021 2022 2023 2024 2025 General Fund Nonspendable 69$ 788$ 793$ 887$ 549$ 469$ 1,889$ 2,127$ 6,404$ 6,043$ Restricted 18,975 9,974 1,942 1,808 1,747 1,455 2,015 2,310 2,455 2,369 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 18,734 Unassigned 23,366 24,793 28,516 34,358 35,369 40,414 40,074 37,977 46,149 46,855 Total general fund 48,252$ 42,096$ 37,650$ 40,618$ 43,373$ 52,221$ 58,830$ 62,036$ 73,445$ 74,001$ All other Governmental Funds Nonspendable -$ 344$ 165$ 224$ 278$ 218$ 243$ 269$ 274$ 262$ Restricted 38,266 63,941 64,033 50,966 48,728 51,931 57,346 61,230 61,842 67,614 Unassigned - - (38) (59) (611) (27) (417) (251) (3) - Total all other governmental funds 38,266$ 64,285$ 64,160$ 51,131$ 48,395$ 52,122$ 57,172$ 61,248$ 62,113$ 67,876$ 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 20161 2017 2018 2019 2020 2021 2022 2023 2024 2025 Revenues: Property taxes and assessments 55,831$ 60,452$ 61,753$ 64,672$ 65,542$ 72,058$ 74,220$ 74,611$ 74,353$ 76,866$ Licenses and permits 3,056 3,521 2,734 2,981 2,352 2,541 2,786 2,854 3,036 2,426 Intergovernmental 20,230 24,140 14,944 16,828 18,603 20,127 22,756 23,443 30,127 22,499 Charges for services 3,357 2,355 2,295 2,690 1,715 3,446 5,314 3,890 1,965 1,682 Fines and forfeits 760 750 695 776 609 375 434 372 392 646 Use of money and property 946 1,235 1,937 2,564 1,872 773 506 3,547 6,533 6,467 Miscellaneous 2,913 2,101 2,875 2,261 2,440 2,112 2,591 3,477 3,059 3,431 Total governmental activities revenues 87,093$ 94,554$ 87,233$ 92,772$ 93,133$ 101,432$ 108,607$ 112,194$ 119,465$ 114,017$ Expenditures Current Public safety 21,701$ 22,513$ 23,360$ 24,295$ 25,637$ 26,167$ 26,821$ 27,649$ 29,033$ 29,375$ Public works 9,466 9,186 10,052 10,894 10,586 11,447 10,883 11,440 12,131 12,798 Culture and recreation 12,257 13,341 14,208 13,709 13,653 12,979 15,090 16,009 16,992 17,871 Community and economic development 5,346 7,695 11,074 15,723 8,627 8,305 11,076 13,629 12,213 17,444 General government 6,007 5,882 6,017 6,579 6,789 9,788 7,907 8,748 10,108 9,065 Debt service Principal 13,230 13,305 11,895 12,080 11,385 12,745 11,220 11,085 11,125 11,818 Interest 1,475 1,597 1,570 1,589 1,648 1,905 1,956 2,072 2,162 2,283 Capital projects 14,848 18,405 28,225 22,632 21,211 12,173 12,073 20,824 14,115 15,291 Total expenditures 84,330$ 91,924$ 106,401$ 107,501$ 99,536$ 95,509$ 97,026$ 111,456$ 107,879$ 115,945$ Excess (deficiency) of revenues over (under) expenditures 2,763$ 2,630$ (19,168)$ (14,729)$ (6,403)$ 5,923$ 11,581$ 738$ 11,586$ (1,928)$ Other financing sources (uses): Issuance of long-term debt 9,405$ 22,570$ 11,995$ 12,535$ 12,145$ 11,325$ 10,255$ 9,105$ 10,230$ 15,658$ Sale of capital assets 252 2,292 140 758 111 233 256 1,538 211 180 Premium (discount) on issuance of bonds 441 120 236 81 927 1,464 553 894 720 1,097 Transfers in 25,133 34,675 34,666 25,663 21,236 21,223 24,229 24,631 33,212 23,637 Transfers out (28,502) (47,033) (32,440) (34,369) (27,997) (27,593) (35,215) (29,624) (43,685) (32,325) Total other financing sources (uses)6,729$ 12,624$ 14,597$ 4,668$ 6,422$ 6,652$ 78$ 6,544$ 688$ 8,247$ Net change in fund balances 9,492$ 15,254$ (4,571)$ (10,061)$ 19$ 12,575$ 11,659$ 7,282$ 12,274$ 6,319$ Debt service as a percentage of noncapital expenditures 21.2%19.9%17.1%15.6%15.9%17.1%14.6%13.8%14.0%13.9% Debt services as a percentage of expenditures and transfers 13.0%10.7%9.7%9.6%10.2%11.9%10.0%9.3%8.8%9.5% 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 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 118 Assessed Valuation Tax Collection Year FY2025 FY2024 FY2023 FY2022 FY2021 FY2020 FY2019 FY2018 FY2017 FY2016 7,078,353,727$ 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$ 1,789,188 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 - 544,717,108 539,398,739 539,636,381 489,176,499 471,420,082 411,460,472 410,426,868 - 1,187,202,405 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 87,930,360 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 5,041,874 4,628,817 4,380,355 4,072,190 4,488,469 3,601,348 3,549,414 3,984,932 4,096,577 4,015,580 276,868 269,478 2,779,716 4,339,508 6,152,547 7,386,408 7,099,293 6,734,894 7,375,066 8,239,789 8,360,594,422 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 15,527,428 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 8,345,066,994 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 4,820,522,214 188,582,994 134,159,857 133,492,758 142,496,667 89,469,635 115,175,495 85,379,709 80,577,275 72,666,677 42,307,287 173,705,884 161,652,144 134,787,151 126,171,274 118,583,613 109,124,421 97,050,716 94,582,279 92,987,351 87,728,294 8,707,355,872$ 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$ 18.173%1.655%3.263%2.354%11.809%3.824%7.520%2.696%8.074%2.567% Tax Collection Year: FY2025 FY2024 FY2023 FY2022 FY2021 FY2020 FY2019 FY2018 FY2017 FY2016 Residential rollback 46.3428%54.6501%54.1302%56.4094%55.0743%56.9180%55.6209%56.9391%55.6259%55.7335% Agricultural rollback 71.8370%91.6430%89.0412%84.0305%81.4832%56.1324%54.4480%47.4996%46.1068%44.7021% N/A 63.75%67.50%71.25%75.00%78.75%82.50%86.25%NA Commercial and Railroad rollback 90.0%90.0%90.0%90.0%90.0%90.0%90.0%90.0%90.0%90.0% Industrial rollback 90.0%90.0%90.0%90.0%90.0%90.0%90.0%90.0%90.0%90.0% Uilities rollback 100.0%100.0%100.0%98.5%100.0%100.0%100.0%100.0%100.0%100.0% 3,260,915,759$ 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$ 1,285,294 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 - 343,613,885 360,829,356 382,070,966 363,613,829 368,969,925 337,946,106 353,335,857 - 1,008,744,853 901,891,655 937,999,668 944,990,382 950,525,463 832,628,954 819,505,276 734,200,396 720,036,878 1,016,458,199 78,155,039 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 4,518,715 4,150,574 3,942,320 3,664,971 4,039,622 3,241,213 3,194,473 3,586,439 3,686,919 3,614,022 276,868 269,478 2,779,716 4,276,538 6,152,547 7,386,408 7,099,293 6,734,894 7,375,066 8,239,789 4,353,896,528 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 15,527,428 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 4,338,369,100 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 3,102,525,407 137,141,542 134,159,857 133,492,758 131,180,258 84,077,937 115,175,495 85,379,369 80,559,947 72,650,838 33,331,128 41,986,461 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 4,517,497,103$ 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$ 3.606%-0.358%-0.410%3.189%8.541%4.743%5.719%3.550%7.501%1.462% 15.633$ 15.633$ 15.633$ 15.673$ 15.773$ 15.833$ 16.183$ 16.333$ 16.583$ 16.651$ 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. City of Iowa City, Iowa Assessed and Taxable Value of Property 119 Fiscal Year:2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 Levy Year:2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 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 0.24000 0.24000 0.20000 0.20000 0.20000 Debt Service Fund 3.92833 3.82846 3.57846 3.22846 2.97846 2.57846 2.47846 2.47846 2.47846 2.47846 Employee Benefits 3.11277 3.14415 3.14415 3.34415 3.24415 3.34415 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 1.50986 1.51044 1.51044 1.51044 1.51044 1.51044 1.51044 1.51044 1.51044 1.51044 Total City 16.65096$ 16.58305$ 16.33305$ 16.18305$ 15.83305$ 15.77305$ 15.67305$ 15.63305$ 15.63305$ 15.63305$ Johnson County 6.90337$ 6.77140$ 6.85143$ 6.53594$ 6.49278$ 6.34581$ 6.16774$ 6.04075$ 6.06180$ 6.43080$ Iowa City Community School District 13.86773 13.98935 13.95855 14.85629 14.79097 14.83935 14.85066 14.93382 16.27411 16.81865 Kirkwood 1.06125 1.08048 1.13174 1.20354 1.21331 1.25730 1.31195 1.34462 1.39550 1.39550 Other 0.32784 0.32450 0.33036 0.30557 0.27066 0.33110 0.32744 0.30673 0.29613 0.31388 Total Tax Rate 38.81115$ 38.74878$ 38.60513$ 39.08439$ 38.60077$ 38.54661$ 38.33084$ 38.25897$ 39.66059$ 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 City of Iowa City, Iowa Property Tax Rates - Direct and Overlapping Governments 120 Collection Total Tax Current Tax Delinquent Tax Total Tax Year Levied Collections 2016 52,034 52,021 100.0 0 52,074 100.1 2017 55,330 55,357 100.0 1 55,331 100.0 2018 56,458 56,524 100.1 1 56,347 99.8 2019 59,174 59,113 99.9 2 59,115 99.9 2020 60,297 59,257 98.3 103 59,360 98.4 2021 65,849 65,796 99.9 985 66,781 101.4 2022 66,912 66,604 99.5 0 66,604 99.5 2023 66,474 66,682 100.3 3 66,685 100.3 2024 66,313 66,212 99.8 13 66,225 99.9 2025 68,821 68,441 99.4 0 67,942 98.7 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 Percent of Levy Collected Total as a Percent of Levy City of Iowa City, Iowa Levies and Collections 121 % of Total % of Total Taxable Taxable Taxable Taxable Mid-American Energy Company Public Gas and Electric Utility 42,664$ 2 1.34 %39,179$ 1 0.87 % Rise at Riverfront Crossing Owner LLC Real Estate Developer -$ -N/A 31,835 2 0.70 Hollingsworth Capital Partners Iowa LLC Real Estate Developer - -N/A 28,659 3 0.63 Midwestone Bank Financial 15,014 7 0.47 27,281 4 0.60 BBCS Hawkeye Housing LLC Real Estate Mangment - -N/A 26,696 5 0.59 Tailwind Iowa City LLC Real Estate Mangment - -N/A 23,190 6 0.51 Dealer Properties IC LLC (Billion Auto)Car Dealerships 18,889 4 0.59 22,716 7 0.50 Tailwind College Street, LLC Real Estate Mangment & Dev --N/A 22,065 8 0.49 1201 Gilbert LLC Real Estate Mangment - -N/A 22,029 9 0.49 Proctor & Gamble LLC Manufacturing Company 16,414 5 0.52 18,893 10 0.42 Vesper Iowa City LLC Real Estate Mangment 14,027 8 0.44 - -N/A ACT Inc (Am College Testing Prgrm)Educational Testing Service 47,639 1 1.50 - -N/A Ann Gerdin Trust (formerly Russell Gerdin)Warehousing 22,803 3 0.72 - -N/A Christian Retirement Community Retirement Community 15,667 6 0.49 - -N/A Alpha Inc. Industrial 13,860 9 0.44 - -N/A National Computer Systems (Pearson)Information Services 12,815 10 0.40 - -N/A Sources: City of Iowa City Assessor's Office, Johnson County Auditors Office Current Year and Nine Years Ago (amounts expressed in thousands) 122 123 Customer Name Charges Rank Percentage Charges Rank Percentage Proctor & Gamble 673,690$ 1 7.69 %663,684$ 1 6.09 % Veterans Administration Medical Center 104,250 2 1.19 133,102 2 1.22 Tailwind Iowa City LLC formerly Dolphin Lake/Lakeside Manor 50,139 6 0.57 110,763 3 1.02 UIHC Downtown Hospital Campus formerly Mercy Hospital 64,349 3 0.73 97,208 4 0.89 Campus Apartments 61,112 4 0.70 71,044 5 0.65 Oral B --N/A 70,141 6 0.64 Dominium JIT Srv formerly Mark IV Apts 53,473 5 0.61 67,028 7 0.62 Seville Apts --N/A 60,392 8 0.55 Oaknoll Retirement Residence 37,955 10 0.43 49,446 9 0.45 Club Carwash --N/A 48,728 10 0.45 University of Iowa, Mayflower Apt.46,061 7 0.53 --N/A Iowa City Community School District 43,465 8 0.50 --N/A CCAL 100 Hawk Ridge Drive 39,301 9 0.45 --N/A Total Water System Charges 8,758,683$ 10,898,257$ Sources: City of Iowa City Revenue Division City of Iowa City, Iowa Larger Water System Customers 20252016 124 Fiscal Water Sales Water System Year Cubic Feet Sold Charges 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 2025 241,672,265 10,898,257 Sources: City of Iowa City Revenue Department City of Iowa City Sales History and Water System Charges 125 Customer Name Charges Rank Percentage Charges Rank Percentage University of Iowa Fac Svcs 1,900,317$ 1 15.81 %2,032,826$ 1 15.33 % Proctor & Gamble 893,069 2 7.43 743,611 2 5.61 Iowa City Landfill 219,432 3 1.83 176,564 3 1.33 Veterans Administration Medical Center 119,193 4 0.99 129,634 4 0.98 UHIC Downtown Hospital Campus formerly Mercy Hospital 102,693 5 0.85 123,785 5 0.93 Tailwind Iowa City (fornerly Dolphin Lake)76,609 6 0.64 93,383 6 0.70 Seville Apts --N/A 75,483 7 0.57 Campus Apts 72,228 8 0.60 73,250 8 0.55 Dominium-Jet Services (formerly Mark IV Apts 58,512 10 0.49 71,168 9 0.54 University of Iowa Mayflower HSG 73,827 7 0.61 64,656 10 0.49 CCAL 100 Hawk Ridge Drive 68,909 9 0.57 --N/A Total Sewer System Charges 12,022,203$ 13,260,750$ Sources: City of Iowa City Revenue Department 2025 City of Iowa City, Iowa Larger Sewer System Charges 2016 126 Fiscal Sewer Sales Sewer System Year Cubic Feet Sold Charges 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 2025 300,744,191 13,260,754 Sources: City of Iowa City Revenue Department City of Iowa City, Iowa Sales History and Sewer System Charges 127 General Capital General Capital Total Percentage Fiscal Obligation Revenue Loan Subscription Obligation Revenue Subscription Loan Primary of Personal Per Year 2016 55,998,392 2,491,016 210,784 - 295,000 39,951,661 - - - 98,946,853 1.19 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 0.57 909 2025 60,931,571 8,975,000 210,784 996,399 - 561,478 - 95,087 2,527,186 74,297,505 0.59 964 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 Governmental Activities Business-Type Activities 128 Property Gross General Less: Debt Net General Net Bonded Debt Net Bonded Fiscal Assessed Obligation Service Obligation per $1,000 of Debt Year 2016 4,950,558 56,293 6,463 49,830 10.04 : 1000 671 2017 5,350,244 52,571 7,221 45,350 8.38 : 1000 599 2018 5,494,477 52,884 8,423 44,461 8.09 : 1000 587 2019 5,907,661 53,403 9,514 43,889 7.43 : 1000 584 2020 6,133,570 55,008 9,590 45,418 7.40 : 1000 606 2021 6,857,898 56,685 7,388 49,297 7.19 : 1000 661 2022 7,019,346 56,824 7,190 49,634 7.07 : 1000 654 2023 7,248,396 56,219 7,246 48,973 6.76 : 1000 647 2024 7,368,329 56,457 7,608 48,849 6.63 : 1000 637 2025 8,707,356 60,932 7,670 53,262 6.12 : 1000 691 Notes: 1 General Obligation bonds, net of related premiums and discounts. 2 Population data can be found on page 134. City of Iowa City Iowa Ratios of General Obligation Bonded Debt1 Last Ten Fiscal Years (amounts expressed in thousands, except per capita) 129 City of Iowa City, Iowa Computation of Direct and Overlapping Debt June 30, 2025 (amounts expressed in thousands, except per capita) Total General Percent Amount Long-Term Applicable Applicable Name of Direct Debt to the City of to the City of Governmental Unit Outstanding Iowa City Iowa City City of Iowa City Iowa City Community School District1 141,250 57.56 81,304 Johnson County1 27,451 41.48 11,387 Clear Creek- Amana Community School District1 97,224 0.03 29 Kirkwood Comm. College1 85,285 13.98 11,923 Total Overlapping Debt 351,210 104,643 1 Long term debt outstanding includes only GO debt. 2Net direct debt includes premiums & discounts Source: Johnson County Auditor's Office. each overlapping government. Note:Overlapping governments are those that coincide,at least in part, with the geographic boundaries of the City. 130 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total Assessed Valuation 4,950,559$ 5,350,228$ 5,494,459$ 5,907,661$ 6,133,570$ 6,857,898$ 7,019,346$ 7,248,396$ 7,368,329$ 8,707,356$ Debt Limit 247,528 267,511 274,723 295,383 306,679 342,895 350,967 362,420 368,416 435,368 G.O. Bonds 55,350 51,645 51,880 52,470 53,370 53,935 53,935 52,915 52,980 56,970 TIF Rev. Bonds 2,525 15,200 15,065 14,930 14,790 12,805 11,840 10,880 9,925 8,975 Capital loan note payable - - - - - - - - 788 2,527 Letters of credit 582 663 475 603 - - - - - - Notes payable 211 211 211 211 211 211 211 211 211 211 Subscription Liability - - - - - - 443 317 406 1,092 TIF rebates 13,506 17,356 25,012 27,954 25,877 36,944 33,765 31,784 29,620 26,818 Total net debt applicable to limit 72,174 85,075 92,643 96,168 94,248 103,895 100,194 96,107 93,930 96,593 Legal debt margin 175,354$ 182,436$ 182,080$ 199,215$ 212,431$ 239,000$ 250,773$ 266,313$ 274,486$ 338,775$ Total net debt applicable to the limit as a percentage of debt limit 29.16%31.80%33.72%32.56%30.73%30.30%28.55%26.52%25.50%22.19% 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 Fiscal Year 131 Fiscal Year Net Revenue Ended Available for Ratio of June 30 Revenue 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 2021 - - - - - - - 2022 - - - - - - - 2023 - - - - - - - 2024 - - - - - - - 2025 - - - - - - - Wastewater Treatment Revenue4 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 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 - - - - - - - 2025 - - - - - - - Water Revenue5 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 2025 13,170 8,900 4,270 1,325 26 1,351 3.16 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" 4 Wastewater Treatment Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total 5 Water Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service" 6 Debt Service excludes the amount called early of $2,670,000. 7 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 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 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 2025 661,932 32.59 21,572 - 1,248 1,248 17.29 (3) The available tax increment revenues do not reflect an estimate for the portion of the available valuation that would be taxed at City of Iowa City, Iowa Schedule of TIF Revenue Bond Coverage (1) Total taxable valuation available for certification will decrease in fiscal year 2024-25 due to the retirement of the tax increment (2) TIF tax rate does not include the SSMID levy rate of $2.50 per $1,000 of value. Starting in fiscal year 2012-13, a portion of the 133 Per Capita Calendar Personal Personal Average School Retail Year 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 Sources and Notes: 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. (Look up each quarter County/City Tab) 5 Personal Income for 2024 & 2025 and Per Capita Personal Income for 2025 is not available. Amounts projected based on average increase over previous 5 years. 6 US Census Bureau Population number is not available for 2025. 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 Unemployment Rate3 134 Employers Employees Rank Percentage Employees Rank Percentage University of Iowa 27,354 1 26.9 %22,000 1 21.7 % Iowa City Community School District 2,346 2 2.3 2,208 2 2.2 Veterans Administration Medical Center 1,562 3 1.5 2,000 3 2.0 Procter & Gamble - -N/A 1,300 4 1.3 City of Iowa City 1,108 8 1.1 952 5 0.9 Johnson County - 0 N/A 700 6 0.7 ACT Inc. (formerly American College Testing Program)1,350 5 1.3 335 7 0.3 Hills Bank - -N/A 335 8 0.3 MidWestOne Bank - -N/A 270 9 0.3 Alpla - -N/A 226 10 0.2 NCS Pearson 1,200 6 1.2 - -N/A Hy-Vee 1,166 7 1.1 - -N/A Internaltion Automotive Components formerly Lear Corp 750 10 0.7 - -N/A Total Employees 101,500 101,500 Sources: Iowa City Area Development Group Various Employers and documents 2025 City of Iowa City, Iowa Principal Employers 2016 135 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Public Safety Police 105 105 105 107 107 109.26 110.76 110.76 113.26 114.26 Fire 64 64 64 64 64 64 64 64 66 66 Inspection Services 12.85 13.5 13.5 15.6 15.6 17.6 17.6 16.6 16.6 16.6 Public Works Public Works Admin 2 2 2 2 2 2 2 2 2 2 1 12 16 16 16 16 18 18 18 19.4 20.4 Culture and Recreation Parks and Rec Admin 2 2 2 2 2 2 2 2 2 2 Recreation 14.42 15.42 14.75 14 14.5 14.5 14.5 14.5 14.5 14.5 Parks 13 16 16 16 16 16 16 16 16 16 Forestry 3 3 3 5 5 7 7 7 7 7 Cemetery 3 3 3 3 3 3 3 3 3 3 CBD Maintenance 3 - - - - - - - - - Library 44.77 46.17 46.17 46.17 46.05 45.92 45.92 45.92 45.92 45.92 Senior Center 6.5 7 7 7 7 7.76 7.76 7.76 7.76 7.76 Community and Economic Development 10.8 12.63 13.13 13.13 13.13 12.13 12.13 13.5 13.5 13.5 Economic Development 2 1 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 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 City Manager 10.5 10.5 9 9 9 13.89 14.89 15.26 17.26 17.26 Personnel 3 3 3 3 3 3 3 3 3 3 Human Rights 2 2 2 2 2 2 2 2 3 3 Finance 23.07 23.13 22.13 22.28 22.28 22.28 22.28 22.28 22.28 22.28 Government Buildings 5.33 4.33 5 4 5 4 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 2.83 - - - - - - - - Traffic Engineering 3.9 4.5 3 3 3 3 3 3 3 3 Streets 25.25 25.5 29 29 29 29 29 30 30.25 30.25 Other Shared Revenue - - - - - - - - - 2 MPOJC (formerly JCCOG)4.7 4.7 4.7 5.2 5.2 5.2 5.2 5.2 5.2 5.2 1 4 - - - - - - - - - Internal Service Funds Information Technology 9.86 9.8 10.8 9.8 9.8 9.8 9.8 10.5 10.8 10.8 Equipment 10.75 10.75 10.75 10.75 10.75 11.75 12 11 11 11 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 23.13 21.63 21.63 21.38 19.63 21.38 21.38 21.88 23.13 24.13 Mass Transit 51.13 53.63 54.63 53.38 53.38 54.13 54.13 54.63 53.88 54.63 Wastewater Treatment 24.65 25.4 26 26 26 26 26 26 26.25 26.25 Water 32 31.75 31.75 31.75 31.75 31.25 31.25 31.25 32.25 32.25 Sanitation 33.35 31.5 31.5 32.76 34.76 35.26 35.51 36.51 37.51 37.51 Airport 1 1 1 1 1 1 1 1 1 1 Stormwater 2.6 2.1 1.5 1.5 2.5 2 2 2 2.1 2.1 Housing Authority 10.19 9.6 9.6 9.5 9.5 10.62 10.62 11 12 13 Total 598.10 600.89 602.89 606.55 609.18 625.08 628.08 631.90 645.20 651.95 Source: City's Financial Plan 1 Beginning in FY17, Capital Project Administration was moved to Engineering City of Iowa City, Iowa Full-time Equivalent City Government Employees by Function 136 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Public Safety 1 Physical arrests 5,465 4,482 4,488 5,212 2,891 2,525 2,998 2,619 2,255 1,964 Traffic Violations 2,989 2,246 3,103 3,422 1,052 1,627 2,708 2,468 3,298 4,255 Fire Number of calls answered 6,974 6,749 7,122 7,532 6,979 8,106 9,039 9,212 8,574 10,634 Inspections conducted 2,459 874 1,031 1,300 181 1,194 1,194 1,250 1,806 1,033 Parking Parking Violations 57,549 62,930 50,346 61,330 48,042 45,727 69,502 72,491 97,412 90,455 Wastewater Treatment Daily average treatment in million gallons 10.48 8.32 7.77 10.97 8.58 7.93 7.38 7.80 7.58 9.11 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 25,085 25,485 26,069 26,270 26,576 26,892 27,021 27,105 27,172 27,172 Water Daily average consumption in million gallons 5.32 5.50 5.84 5.69 5.33 5.57 5.52 5.60 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 23,638 24,025 24,595 24,818 25,133 25,452 25,588 25,555 25,612 25,802 Commercial 1,415 1,425 1,436 1,431 1,448 1,448 1,442 1,449 1,463 1,505 Industrial 14 14 15 15 15 15 15 15 15 15 Other 131 134 136 139 138 137 137 133 130 133 Total Customers 25,198 25,598 26,182 26,403 26,734 27,052 27,182 27,152 27,220 27,455 Sanitation Number of Customers 15,620 15,917 15,960 16,112 16,180 16,330 16,481 16,606 16,681 16,807 Tonnage 9,476 9,623 9,694 8,989 9,682 10,339 10,247 9,747 9,742 9,888 Landfill Tonnage 126,875 137,025 140,658 127,587 128,210 151,823 135,557 132,672 142,874 130,686 Sources: Various city divisions. Notes: Numbers are based on a calendar year and 2025 year-to-date figures are compiled through 11/30/25 for Police. Last Ten Fiscal Years 137 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Public Safety Police Stations 1 1 1 1 1 1 1 1 1 1 Patrol units 20 24 23 23 23 23 23 23 23 23 Fire Stations 4 4 4 4 4 4 4 4 4 4 Fire apparatus 10 10 10 10 10 10 10 10 10 10 Public Works Streets Miles 283 286 288 292 293 295 298 299 300 300 Street lights 3,412 3,412 3,307 3,166 3,202 3,246 3,227 3,287 3,270 3,260 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 49 50 51 56 56 58 58 58 58 Acreage 1,902 1,932 1,942 1,947 1,950 1,980 1,987 1,987 2,008 2,047 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 9 9 9 9 9 9 9 8 8 Soccer fields 20 20 20 20 20 20 20 21 21 21 Pickle Ball Courts - 8 8 8 8 8 8 8 9 9 Futsal Courts - 2 2 2 2 2 2 2 2 2 Full Basketball Courts - 3 3 3 6 6 6 6 6 6 Gaga Pits - - 2 2 2 2 2 2 2 1 Bocce Court - - - - - 1 1 1 1 1 Parking Facilities 5 6 6 6 6 6 6 6 6 6 Spaces 3,086 3,686 3,686 3,686 3,686 3,686 3,686 3,686 3,686 3,695 Wastewater Treatment Miles of sanitary sewer 301 304 306 307 308 310 312 313 314 329 Miles of storm sewer 136 139 140 142 144 146 147 148 150 148 Number of treatment plants 1 1 1 1 1 1 1 1 1 1 Number of service connectors 25,085 25,485 26,069 26,270 26,576 26,892 27,021 26,995 27,062 27,091 Water Miles of water mains 275 277 279 281 283 286 288 289 291 286 Number of city owned fire hydrants 3,447 3,503 3,529 3,564 3,611 3,647 3,687 3,717 3,749 3,097 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 138 Compliance Section Tab 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153