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FY2014 Annual Financial ReportCity of Iowa City, Iowa Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2014 On the cover In 2014, the City of Iowa City completed its $50 million Wastewater Treatment Plant expansion  project, the largest public works project ever undertaken by the City. The work involved  permanently shutting down operations at the 80‐year old North Plant, located on South Clinton  Street, and expanding the newer South Wastewater Treatment Plant on Napoleon Street, south of  Iowa City.    The plant is state‐of‐the‐art, utilizing innovative modern designs and natural bioprocesses that are  inspired by nature to treat the wastewater and return it to the Iowa River. Unlike the hazardous  chemicals that were used in the past, these eco‐friendly processes ultimately protect our  community and our environment, including the restored wetlands and prairie that surround the  facility, where grasses, wildflowers, birds and wildlife abound.  COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF IOWA CITY, IOWA FOR THE FISCAL YEAR ENDED JUNE 30, 2014 PREPARED BY: FINANCE DEPARTMENT CITY OF IOWA CITY, IOWA CITY OF IOWA CITY, IOWA TABLE OF CONTENTS June 30, 2014 Page INTRODUCTORY SECTION Table of contents ................................................................................................................................ 1 Letter of transmittal ............................................................................................................................ 3 Certificate of Achievement for Excellence in Financial Reporting ................................................... 13 City organizational chart .................................................................................................................... 14 City officials....................................................................................................................................... 15 FINANCIAL SECTION INDEPENDENT AUDITOR’S REPORT ......................................................................................... 17 MANAGEMENT’S DISCUSSION AND ANALYSIS .................................................................... 21 BASIC FINANCIAL STATEMENTS Government-wide financial statements Statement of net position ............................................................................................................. 34 Statement of activities .................................................................................................................. 36 Fund financial statements Balance sheet – governmental funds ............................................................................................ 38 Reconciliation of the balance sheet of the governmental funds to the statement of net position 40 Statement of revenues, expenditures, and changes in fund balances – governmental funds ....... 42 Reconciliation of the statement of revenues, expenditures, and changes in fund balances of governmental funds to the statement of activities ..................................................................... 44 Statement of net position – proprietary funds .............................................................................. 46 Statement of revenues, expenses, and changes in fund net position – proprietary funds ............ 48 Statement of cash flows – proprietary funds ................................................................................ 50 Statement of fiduciary assets and liabilities ................................................................................. 52 Notes to financial statements .......................................................................................................... 54 REQUIRED SUPPLEMENTARY INFORMATION Budgetary comparison schedule – budget and actual – all governmental funds and enterprise funds – budgetary basis……………………………………………………………………….... 86 Budgetary comparison schedule – budget to GAAP reconciliation …………………………….. 88 Note to required supplementary information – budgetary reporting…………………………….. 89 Required supplementary information – schedule of funding progress for health and dental plans…………………….…………………………………………………………….………….. 90 COMBINING AND INDIVIDUAL FUND STATEMENTS Combining balance sheet – nonmajor governmental funds ............................................................ 92 Combining statement of revenues, expenditures, and changes in fund balances – nonmajor governmental funds ...................................................................................................................... 93 Combining statement of net position – nonmajor enterprise funds ................................................ 96 Combining statement of revenues, expenses, and changes in fund net position – nonmajor enterprise funds ............................................................................................................................ 97 Combining statement of cash flows – nonmajor enterprise funds .................................................. 98 Combining statement of net position – internal service funds ........................................................ 100 Combining statement of revenues, expenses, and changes in fund net position – internal service funds ............................................................................................................................................. 101 1 CITY OF IOWA CITY, IOWA TABLE OF CONTENTS June 30, 2014 Page COMBINING AND INDIVIDUAL FUND STATEMENTS (continued) Combining statement of cash flows – internal service funds .......................................................... 102 Statement of changes in assets and liabilities – agency funds ......................................................... 104 STATISTICAL SECTION (UNAUDITED) Net position by component ................................................................................................................. 107 Changes in net position ...................................................................................................................... 108 Fund balances – governmental funds ................................................................................................. 110 Changes in fund balances – governmental funds ............................................................................... 111 General government tax revenues by source ...................................................................................... 112 Assessed and taxable value of property .............................................................................................. 113 Property tax rates – direct and overlapping governments .................................................................. 114 Property tax budgets and collections .................................................................................................. 115 Principal taxpayers ............................................................................................................................. 116 Principal water system customers ...................................................................................................... 118 Sales history and total water charges .................................................................................................. 119 Principal sewer system customers ...................................................................................................... 120 Sales history and total sewer charges ................................................................................................. 121 Ratios of outstanding debt by type ..................................................................................................... 122 Ratios of general obligation bonded debt to assessed value and net bonded debt per capita ............. 123 Ratio of annual debt service expenditures for general bonded debt to total general governmental expenditures ..................................................................................................................................... 124 Computation of direct and overlapping debt ...................................................................................... 125 Legal debt margin information ........................................................................................................... 126 General obligation debt annual maturity schedule ............................................................................. 127 Schedule of revenue bond coverage ................................................................................................... 128 Revenue debt annual maturity schedule ............................................................................................. 129 Revenue debt annual maturity by funding source .............................................................................. 130 Demographic and economic statistics ................................................................................................ 132 Principal employers ............................................................................................................................ 133 Full-time equivalent city government employees by function ........................................................... 134 Operating indicators by function ........................................................................................................ 136 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 ............................................................................................................................. 141 Independent auditor’s report on compliance for each major federal program and report on internal control over compliance required by OMB Circular A-133 ............................................................... 143 Schedule of expenditures of federal awards ....................................................................................... 145 Notes to the schedule of expenditures of federal awards ................................................................... 150 Schedule of findings and questioned costs ......................................................................................... 151 Summary schedule of prior federal audit findings ............................................................................. 155 2 December 11, 2014 To the Citizens, Honorable Mayor, Members of the City Council and City Manager City of Iowa City, Iowa The Comprehensive Annual Financial Report (CAFR) of the City of Iowa City, Iowa (the City) for the fiscal year ended June 30, 2014 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. This report consists of management’s representation concerning the finances of the City of Iowa City. Management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The CAFR reflects all funds of the City in accordance with standards set by the Governmental Accounting Standards Board (GASB). In 1999, GASB adopted Statement No. 34, Basic Financial Statements – Management’s Discussion and Analysis – For State and Local Governments. The final effective date for the implementation of GASB No. 34 for the City of Iowa City was June 30, 2003. This report complies with those standards. This statement significantly changes governmental financial reporting in order to bring it closer to a private sector model. The City implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions effective with the June 30, 2011 financial statements. 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 classifications include: nonspendable amounts that are not in spendable form or the City is 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; assigned amounts 3 are intended to be used for specific purposes; and the unassigned fund balance is the residual classification for the General Fund. Chapter 11 of the Code of Iowa requires an annual audit to be performed. The independent public accounting firm of Eide Bailly LLP was selected by the City. In addition to meeting the requirements set forth in Chapter 11, the audit was also designed to meet the requirements of the Single Audit Act of 1996 and related Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. While, the financial statements are the responsibility of the City, the responsibility of the auditor is to express an opinion on the City’s financial statements based on their audit. The goal of the independent audit is to provide reasonable assurance that the City’s financial statements for the fiscal year ended, June 30, 2014 are free of material misstatement. The audit is conducted in accordance with generally accepted auditing standards and involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement preparation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of Iowa City’s financial statements for the fiscal year ended, June 30, 2014, are fairly presented in conformity with GAAP. The independent auditors’ report on the basic financial statements and combining fund statements and schedules is included in the financial section of this report. As a recipient of federal financial assistance, the City is responsible for ensuring that adequate internal controls are in place to ensure compliance with applicable laws and regulations related to these federal programs. These internal accounting and administrative controls are subject to periodic evaluation by the City's management and the City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1996 and the U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State, Local Governments and Non-Profit Organizations. Information related to this single audit, including the schedules of federal financial assistance, findings and questioned costs, and independent auditors’ reports on the internal accounting and administrative controls and compliance with applicable laws and regulations are included in the compliance section of this report. GAAP require 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 4 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 Manager supervises 526 full-time and 57 part-time permanent municipal employees and 396 temporary employees, including a police force of 79 sworn personnel and a fire department of 64 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 and 2 temporary 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 March 15. 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. 5 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 30,800 employees. The University of Iowa had a record high enrollment in fall 2012 of 31,498 students, and the enrollment has held steady with a fall semester 2014 enrollment of 31,387 students. The academic and research missions of the University, along with the health care services provided at its hospitals and clinics, have a tremendously positive economic impact on the area. The City also has a significant number of national and international businesses, including Fortune 500 companies. The City continues to see sustained production in our major local industries; ACT Inc., NCS Pearson, and Proctor & Gamble. While established firms continue to prosper and expand in Iowa City, opportunities are available for growth of new businesses. Continued economic development efforts with the Iowa City and Coralville Chambers of Commerce, private interests, the University of Iowa, other surrounding communities, and participation as a member of the Iowa City Area Development Group, 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. As a whole, the City's economy continues to grow, but at a slow pace. The major employers have been able to maintain steady employment during the national recession as evidence in the unemployment rate for Iowa City, which continues to remain low at 3.5% for the month of June 2014, as compared to 4.4% for the State of Iowa, and 6.1% for the national average. The rate of new housing construction increased in comparison to the prior year based on the number of building permits issued. This consisted of 171 new single-family houses in 2013, as compared to 143 in 2012; multi-family dwelling units added to the tax rolls for the year ended December 31, 2013 was 488, compared to 144 in 2012; and mixed commercial and residential developments added in 2013 included 27 residential units. Altogether these additions totaled $131,775,074 in 2013, versus a total of $66,802,512 in 2012. Permits for commercial construction decreased from $25,758,012 in 2012 to $17,816,062 in 2013. And remodeling permits for residential and commercial increased by $6,216,424 from 2012 to 2013. According to the 2010 census, the population of Iowa City is 67,862. This is an increase of 5,672 or 9.1% as compared to the 2000 census. Iowa City population in 2014 is estimated to be 71,591 by the U.S. Census Bureau. There are many signs that the City remains healthy and vibrant with great promise for the future. The stability of the University of Iowa coupled with historically steady employment by the City’s multi-sector base of manufacturing and service industries, helped insulate the City from any significant negative economic impacts of the national recession. The City’s property valuations continue to rise and along with the low unemployment rate, this is indicative of the City's relative economic stability. 6 Major Initiatives The City of Iowa City, with the assistance of the University of Iowa’s Institute of Public Affairs, completed the City’s 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. The Strategic Plan established the prevailing organizational priorities as the following: Fostering a more INCLUSIVE and SUSTAINABLE Iowa City through a commitment to: 1. Healthy Neighborhoods 2. A Strong Urban Core 3. Strategic Economic Development Activities 4. A Solid Financial Foundation 5. Enhanced Communication and Marketing The first priority of the City’s Strategic Plan is to strengthen and enhance the City’s many neighborhoods. An effective stabilization strategy requires a review and analysis of the City’s policies, programs, communications, and capital investment decisions that directly shape and influence a neighborhood’s character and livelihood. Staff will be focusing on the central planning district neighborhoods; however many aspects of the neighborhood stabilization review will have implications throughout the community. In order to achieve the Council’s goal, staff will focus on the land use regulations, public infrastructure and open space, private building stock, nuisance mitigation, open stakeholder communication, and updating planning documents. Projects to further neighborhood stabilization include the UniverCity Neighborhood Partnership, a joint project between the City and the University of Iowa to ensure the neighborhoods around the university remain vital, safe, affordable, and attractive places to live and work for both renters and homeowners by acquiring and rehabilitating homes near the University of Iowa campus for resale as affordable owner-occupied housing. Staff will also be actively working with the Iowa City Community School district to promote increased coordination in school and neighborhood planning as neighborhood schools play a role in neighborhood stabilization efforts. The City also continues to invest in neighborhood parks, trails, and events. The second priority of the Strategic Plan is the development of the city’s core areas. Staff is focusing on two distinct geographic areas: Downtown Iowa City and Riverfront Crossings. In 2012, the Iowa City Downtown District (ICDD), a self-supported municipal improvement district, was formed presenting a unique opportunity to bring together property owners, businesses, the University of Iowa, and the City of Iowa City. Staff, in partnership with stakeholders, is working to pursue policies and projects that will more fully realize the potential of the central business district and facilitate new private investment in the area. Some of the ICDD current initiatives include a downtown community gallery for public art and science programs, free Wi-Fi in the Pedestrian Mall, holiday lighting, improved snow removal, downtown ambassadors to assist visitors and maintain public spaces, alley beautification, and a downtown beat cop. The City has also instituted a new parking rate structure, including first hour free to make visiting downtown more convenient. The Park@201 building completed construction in 2014 in downtown Iowa City. The building is adjacent to the city’s pedestrian mall and was constructed with the assistance of tax increment financing. The Park@201 is a 14 story mixed use development with 4 floors of commercial space and 10 floors of residential units. Meta Communications, a growing software company, has occupied three floors of the commercial space, and the building is completely occupied. 7 Other buildings that are undergoing major re-development downtown include the historic Midwest One bank building, the Jefferson Hotel, and the conversion of the Wilson building and public space into a 15 story mixed use development. Also known as the Chauncey, the 15 story building will have 8 floors of residential units, a 35 unit hotel, two floors of commercial space, a movie theatre and a bowling alley. The project is anticipated to be $49 million and will be assisted with tax increment financing. The Riverfront Crossing Development Plan is an initiative to revitalize the area south of Iowa City’s downtown area. This area was hard hit by the flooding in 2008 and ideas for improving the district were initiated as part of a combined flood mitigation plan. Through a grant from the Partnership for Sustainable Communities, the City created a detailed plan for developing the area. The new neighborhood will feature a waterfront park with walking and biking trails, access to the Iowa River for boating and fishing, 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. The Riverfront Crossings Development area is being anchored by a 76.8 acre area comprised of public facilities including the City’s north wastewater treatment plant that is located on the east bank of the Iowa River and the southeast corner of the development area. The City received an $8.5 million hazard mitigation grant from the State of Iowa that will allow for the removal of these public facilities and will convert the area into a riverfront park and wetland area. On the north side of the Riverfront Crossing area, the University of Iowa is currently constructing the Voxman School of Music and the University of Iowa Art Museum. Just to the south of these buildings, a mixed use development is underway that will include three components: a public parking facility consisting of approximately 600 parking spaces, the six story Midwest One mortgage center office building, and 28 residential townhome units. Also in this area, a mixed use facility is proposed to be constructed on city owned property at the streets of Court & Linn. The city issued an RFP for the development of this parcel and is in the process of reviewing proposals. Construction on this property is anticipated to begin in 2015. The City Council has also indicated a strong desire to promote private investment and re- development of other targeted areas throughout the community. The areas that are currently being focused on include the Towncrest commercial area, Sycamore Mall and First Avenue, Highway 6/Highway 1 intersection, 420th Street Industrial Park, and Moss Ridge Office Park. In the Towncrest commercial area, City staff is working to facilitate redevelopment of several key properties and a streetscape project that will improve the function and aesthetic appeal of the area. The Towncrest Urban Renewal Area was developed to revitalize the Towncrest commercial district in ways that would serve existing businesses while also drawing new retailers, service providers, and consumers to the area. The first catalyst project approved in the Towncrest Urban Renewal Area was a developer’s agreement with MDK Development LLC for the redevelopment of a gas station and a building used for storage at the corner of Muscatine Avenue and William Street. MDK Development LLC purchased both properties, demolished the buildings and has constructed two new buildings with a combined square footage of 14,500. The two buildings will be primarily medical offices – home to Eye Associates and Towncrest Dental. A third commercial condo, approximately 2,000 SF is available for lease/purchase. Total project costs for this development are estimated at $5,200,000. The departure of an anchor tenant at Sycamore Mall presented a great challenge, but also a unique opportunity to reinvent the commercial space. Mall ownership has plans for physical improvements to the property and a new marketing name of Iowa City Marketplace. The Mall 8 ownership has found a replacement anchor tenant that is expected to occupy Mall space in 2015. The City is coordinating significant capital projects in the area that are expected to last two or more construction seasons. These projects include improvements to Sycamore and Lower Muscatine Road, and a grade separation project on First Avenue including new storm sewer and a railroad underpass. These projects, which are underway in different phases, will each have a positive impact on the traffic flows and aesthetics in this commercial district. The Highway 6/Highway 1 intersection is a viable commercial corridor, in large part because of high traffic counts. Staff has focused efforts on the municipal public works and transit property in the area. The City continues to relocate its municipal operations from this area, to convert the area into prime development space. The City’s municipal airport is also adjacent to this area, and the City has successfully re-developed a portion of the airport into the North Aviation Commerce Park. The City has received purchase offers on the final four lots which completes the development of all of the lots in the business park. The City has also invested considerable money for infrastructure development in the shovel-ready 420th Street Industrial Park. This project involved annexing and rezoning 180 acres of land and building the street, water, and sewer infrastructure needed to support industrial businesses. The Iowa City Area Development Group and City staff continue to market this property and respond to inquiries from business and site location consultants. This project’s costs were $13,762,000 and were funded through bonds, state grants, road use tax, and wastewater operations. Another business park established for development is the Moss Ridge Office Park. This is a 243-acre, 18-lot office research and mixed use subdivision on the northeast edge of the city, just off Interstate 80. Significant infrastructure improvements are necessary to accommodate the planned growth and City staff is working with Moss Office Park owners and adjacent businesses on potential access arrangements to accommodate a phased development approach to this property. Construction of an access road and entrance from the adjacent highway began in 2014. Project costs to build the infrastructure are $4,900,000 and are being funded with state grants and GO bonds. Northgate Corporate Park, adjacent to Moss Ridge Office Park, continues to experience build out and only one vacant lot remains in the park. The City aims to create a strong and sustainable financial foundation that will provide needed stability and flexibility while utilizing taxpayer dollars in the most efficient and responsible manner. In order to achieve this goal, the City is focusing on two primary areas: new financial policies and strategies that will provide a greater level of financial stability and second, enhance the level of financial analysis presented to the public so elected officials will have a greater information foundation on which to base future decisions. Policies included in this analysis are economic development policies, purchasing policies and procedures, target fund balances, debt service coverage levels, general fund contingency level, and an annual review of rates, user charges and fines. The City has also examined operations where the City is providing subsidized service beyond our borders and has developed plans to ensure the City is being equitably reimbursed for such services. In May 2014, Moody’s conducted a review of the City as part of the bond rating process and reaffirmed the City’s Aaa bond rating. In their report, Moody said the rating “reflects the City’s stable tax base and economy anchored by the University of Iowa… history of favorable financial operations and expected maintenance of healthy reserves, and manageable debt profile.” The fifth and final priority of the City’s Strategic Plan is enhanced communication and marketing. The City strives to be a high-functioning, customer service orientated organization that actively supports and engages stakeholders through clear, open, and innovative communication methods. A reorganization of staff created a new communication team, which 9 has assumed the responsibilities of the front desk at City Hall and offers front line customer service assistance to visitors and those contacting City Hall via phone or email. The City is working with the University of Iowa to develop a new web site to be launched in 2015, and has introduced a City Facebook and Twitter page. These communication improvements have allowed the City to reach broader audiences and better promote activities, community news, and service information. The City also introduced ICgovXpress; a convenient way for Iowa City residents to request services, ask questions, or submit citizens reports of everything from trash and debris in unkempt yards to abandoned cars, unshoveled walks, and graffiti either online or by downloading the ICgovXpress app to their smart phone. The City has also completed the first phase of implementing enterprise resource planning software (ERP). On July 1, 2013 the financials modules of general ledger, accounts payable, purchasing, and budget went live. The human resources and payroll sections were implemented on January 1, 2014. And the utility billing and revenues portions will be implemented in the spring of 2015. The ERP system will allow for improved internal workflows and internal and external communication. Long-term Financial Planning It is our intent to support the major initiatives through budget appropriations, departmental operations, and employee direction so that the organization as a whole is moving in the same direction. A significant influence in the preparation of the three-year financial plan (FY14 – FY16) is the passage of property tax reform (SF295) by the state legislature. The property tax reform bill has multiple components including a property tax rollback for commercial and industrial property, steadily reducing the taxable value of these property types. The bill establishes a State backfill for lost property tax revenues to the City due to the commercial and industrial rollback beginning in FY15 and then caps the amount at FY17 levels. The cumulative reduction in commercial and industrial property taxes due to this rollback is estimated to be $15,418,000 over the next ten years. The maximum reimbursement from the State would be $14,732,000 for a net loss in revenues of $686,000. This bill also limits the annual taxable valuation growth of residential and agricultural property to 3 percent, instead of the current 4 percent. Initially, the financial impact will be minimal but over time the consequences of this change will be significant. The effect will be that the taxable percentage of residential property will increase at a slower pace. Without this change, the estimated taxable percentage of residential property would be 60.85% in assessment year 2022. With this provision in place, the estimated taxable percentage in year 2022 will be 55.11%, a reduction of 5.74%. Based on the assessed value of residential property in Iowa City, the cumulative loss is estimated to be $20,772,000 over the next ten years and the City will not receive any money from the State due to lost revenue from this provision. SF295 also establishes a multi-residential property classification that will include mobile home parks, assisted living facilities, and property primarily intended for human habitation. A gradual rollback will be applied to these properties that will basically treat them as residential property, rather than commercial, by the year 2022. The estimated cumulative loss over the next ten years is $15,505,000 and will not be reimbursed by the State of Iowa. With the implementation of SF295, the City estimates the tax revenue losses to be $933,500 for FY14 – FY16. Since some of the effects of these reforms are gradual, the magnitude of the losses 10 will not be felt till later years and the total cumulative ten-year loss is anticipated to be $36,963,000, which will significantly affect the City’s ability to finance services at current levels without finding other revenue sources. On a more positive note, the City is seeing a small but steady growth in assessed property valuations when compared with prior years. Based on the increase in building permits in 2013, assessed valuations should continue to increase at steady pace in the future. In looking at expenses for the FY14 – FY16 financial plan, the City will generally experience increased expenditures; however at a modest pace. Bargaining unit wage increases are approximately 2% each year, and the budgeted full time equivalents (FTE) has decreased from 623.90 in 2013 to 607.66 in 2015. In addition, public safety pension contribution rates have leveled off and are anticipated to start decreasing. The City has also seen virtually no increase in its health insurance premium rates. In balancing the budget for the three-year period, the City attempted to reduce costs where possible, while continuing to provide high quality services; identify and eliminate redundancies that may exist within the organization; examine existing and potential new revenue sources; promote and plan for economic development and redevelopment throughout the City to ensure strong property values; determine appropriate staffing levels; provide for necessary improvements to existing infrastructure and prioritize capital projects; and uphold fiscal integrity and maintain adequate cash reserves. The City also continues to strive to reduce the City’s total property tax levy. For collection year 2013, the levy was $17.269 per $1,000 of assessed value. In 2014, the levy was $16.805, a reduction of 2.7 percent, and in 2015, the levy is $16.705, a reduction of .6 percent. Overall, the City is continuing to look for ways to control operating costs, diversify revenues, and create operating efficiencies. 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 Comprehensive Annual Financial Report for the fiscal year ended June 30, 2013. 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 Comprehensive Annual Financial Report, whose contents conform to program standards. The Comprehensive Annual 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 twenty-nine 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, 2014. 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 third consecutive year the City has received this award. 11 Responsibility and Acknowledgments The Department of Finance prepared the Comprehensive Annual Financial Report of the City of Iowa City, Iowa for the fiscal year ended June 30, 2014. The City Council, as required by law, is responsible for the complete and accurate preparation of the City’s Comprehensive Annual 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 City’s Controller, Nicole Knudtson-Davies, Assistant Controller, Sara Sproule, Senior Accountants, Justin Armatis and Steven Christopher and Payroll Accountant, Chris Hurlbert. 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, Dennis Bockenstedt Director of Finance 12 13 City of Iowa City Citizens City Manager City Manager Communications Office Human Resources Human Rights Cable Television Airport Operations Iowa City Municipal Airport City Attorney City Clerk Library Board Airport Commission Library Library Operations Library Foundation Fire Administration Emergency Operations Fire Prevention Training Police Administration Administrative Services Field Operations Parks & Recreation Administration Recreation Park Maintenance Cemetery Operations Finance Administration Accounting Purchasing Revenue Risk Management Information Technology Services Housing & Inspection Services HIS Administration Building Inspections Housing Inspections Housing Authority Senior Center Planning & Community Development Administration Urban Planning Community Development Economic Development Neighborhood Services Metropolitan Planning Organization of Johnson County Human Services Public Works Administration Engineering Services Streets Operations Wastewater Treatment Water Refuse Collection Landfill Storm Water Operations Equipment Replacement Transportation Services Parking Public Transportation City Council 1 4 CITY OF IOWA CITY, IOWA LISTING OF CITY OFFICIALS June 30, 2014 ELECTED OFFICIALS Term Expires Mayor Matt Hayek January 2, 2016 Council Member and Mayor Pro Tem Susan Mims January 2, 2018 Council Member Kingsley Botchway II January 2, 2018 Council Member Terry Dickens January 2, 2018 Council Member Rick Dobyns January 2, 2016 Council Member Michelle Payne January 2, 2016 Council Member Jim Throgmorton January 2, 2016 APPOINTED OFFICIALS Date of Hire City Manager Thomas Markus December 1, 2010 City Clerk Marian K. Karr May 21, 1979 City Attorney Eleanor Dilkes March 18, 1996 DEPARTMENT DIRECTORS Assistant to City Manager Geoff Fruin November 28, 2011 Director of Neighborhood Development Services Douglas W. Boothroy September 22, 1975 Library Director Susan Craig July 28, 1975 Director of Public Works Rick Fosse February 22, 1984 Director of Transportation Services Chris O’Brien December, 29, 1997 Senior Center Coordinator Linda Kopping March 20, 1995 Fire Chief John Grier August 10, 1992 Parks and Recreation Director Mike Moran September 26, 1983 Director of Finance Dennis Bockenstedt February 15, 2013 Chief of Police Sam Hargadine August 29, 2005 15 16 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, 2014. 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 – 12 of this report. Financial Highlights • The assets of the City of Iowa City exceeded its liabilities and deferred inflows of resources at the close of the fiscal year ending June 30, 2014 by $573,905,000 (net position). Of this amount, $111,300,000 (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 $19,285,000 during the fiscal year. Governmental activities increased by $10,598,000 and business-type activities increased by $8,687,000. • At the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $79,185,000, an increase of $12,306,000 in comparison with the prior year. Of this total amount, approximately $17,898,000 or 22.6% 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 $17,907,000 or 38.1% 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, 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, Cable Television, Housing Authority, Parking, Sanitation, Stormwater Collection, Transit, Wastewater Treatment, and Water. 21 The government-wide financial statements may be found on pages 34 – 37 of this report. 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, Employee Benefits Fund, Community Development Block Grant Fund, Other Shared Revenue and Grants Fund, Other 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 38 – 44 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, Cable Television, 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. Parking, Wastewater Treatment, Water, Sanitation, Housing Authority and Transit Funds are considered to be major funds and are reported individually throughout the report. The other three 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 96 – 98. 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 46 – 51 of this report. 22 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 an agency fund. The basic fiduciary funds financial statements can be found on page 52. 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 54 – 84 of this report. Other Information: The combining statements referred to in the above paragraphs in connection with non- major governmental funds, non-major enterprise 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 exceeded liabilities and deferred inflows of resources by $573,905,000 at the close of the fiscal year ended June 30, 2014. By far, the largest portion of the City’s net position reflect its investment in capital assets (e.g., land, building, machinery and equipment, improvements other than buildings, and infrastructure), net any related debt to acquire those assets that is still outstanding. The City uses these capital assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other resources, since the capital assets themselves cannot be used to liquidate these liabilities. City of Iowa City's Net Position June 30, 2014 (amounts expressed in thousands) Governmental Business-type activities activities Total 2014 2013 2014 2013 2014 2013 Current and other assets 176,570$ 162,144$ 106,436$ 110,907$ 283,006 $ 273,051 $ Capital assets 187,654 182,263 323,181 317,564 510,835 499,827 Total assets 364,224 344,407 429,617 428,471 793,841 772,878 Long-term liabilities outstanding 71,723 65,012 67,504 72,048 139,227 137,060 Current and other liabilities 11,171 10,651 6,406 9,403 17,577 20,054 Total liabilities 82,894 75,663 73,910 81,451 156,804 157,114 Deferred inflows of resources 63,132 61,144 - - 63,132 61,144 Net position: Net investment in capital assets 138,482 133,989 264,727 253,617 403,209 387,606 Restricted 39,958 22,867 19,438 19,033 59,396 41,900 Unrestricted 39,758 50,744 71,542 74,370 111,300 125,114 Total net position 218,198$ 207,600$ 355,707$ 347,020$ 573,905 $ 554,620 $ 23 A portion of the City’s net position, $59,396,000 or 10.3%, represents resources that are subject to external restrictions on how they may be used. The remaining balance of the unrestricted net position, $111,300,000 or 19.4%, 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, 2014, 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. Governmental Activities: Governmental activities increased the City’s net position by $10,598,000. The increase in net position of governmental activities is primarily due to receiving grants to fund expenses for capital assets and community development projects. The following is a more detailed review of FY14’s operation. City of Iowa City's Changes in Net Position (amounts expressed in thousands) Governmental Business-type activities activities Total 2014 2013 2014 2013 2014 2013 Revenues: Program Revenues: Charges for services 7,570 $ 7,688 $ 39,355 $ 39,065 $ 46,925 $ 46,753 $ Operating grants and contributions 3,231 4,731 9,003 9,224 12,234 13,955 Capital grants and contributions 5,580 6,876 13,812 34,251 19,392 41,127 General Revenues: Property taxes 50,551 51,017 - - 50,551 51,017 Road use tax 6,745 6,589 - - 6,745 6,589 Local option sales tax 466 8,858 - - 466 8,858 Other taxes 2,778 2,609 - - 2,778 2,609 Earnings on investments 973 841 494 671 1,467 1,512 Gain on disposal of capital assets 1,651 1,312 725 293 2,376 1,605 Other 4,353 4,390 265 918 4,618 5,308 Total revenues 83,898 94,911 63,654 84,422 147,552 179,333 Expenses: Public safety 22,721 20,989 - - 22,721 20,989 Public works 8,258 10,240 - - 8,258 10,240 Culture and recreation 16,586 14,481 - - 16,586 14,481 Community and economic development 10,059 10,596 - - 10,059 10,596 General government 7,687 7,513 - - 7,687 7,513 Interest on long-term debt 1,797 2,237 - - 1,797 2,237 Wastewater treatment - - 21,139 10,464 21,139 10,464 Water - - 8,723 9,074 8,723 9,074 Sanitation - - 8,402 7,279 8,402 7,279 Housing authority - - 7,703 7,658 7,703 7,658 Parking - - 4,093 4,579 4,093 4,579 Airport - - 1,209 1,086 1,209 1,086 Stormwater - - 1,314 1,318 1,314 1,318 Cable television - - 781 692 781 692 Transit - - 7,795 6,998 7,795 6,998 Total expenses 67,108 66,056 61,159 49,148 128,267 115,204 Change in net position before transfers 16,790 28,855 2,495 35,274 19,285 64,129 Transfers (6,192) (10,485) 6,192 10,485 - - Change in net position 10,598 18,370 8,687 45,759 19,285 64,129 Net position beginning of year 207,600 189,230 347,020 301,261 554,620 490,491 Net position end of year 218,198 $ 207,600 $ 355,707 $ 347,020 $ 573,905 $ 554,620 $ 24 The total revenues for governmental activities for FY14 were $83,898,000. Governmental activities are primarily funded through taxes, $60,540,000 or 72.2%, and grants and contributions, $8,811,000 or 10.5%. Taxes decreased from the prior year by $8,533,000 as the local option sales tax ended June 30, 2013. Grants and contributions decreased from prior year by $2,796,000 as the City’s expenses for flood mitigation, which were covered by supplemental Community Development Block Grants, have decreased. Expenses for governmental activities totaled $67,108,000. Governmental activities are tracked by function including Public Safety, Public Works, Community and Economic Development, Culture and Recreation, and General Government. In FY14, Public Safety accounted for the highest portion of governmental expenses, $22,721,000 or 33.9%, and increased slightly over the prior year due to increased insurance claims. Culture and Recreation, $16,586,000 or 24.7%, made up another large portion of the governmental expenses and increased over the prior year due to additions of trails and improvements to parks. Community and Economic Development, $10,059,000 or 15.0%, made up the third highest portion of governmental expenses and decreased from the prior year due to fewer flood recovery and mitigation projects. Business-type Activities: Business-type activities increased the City’s total net position by $8,687,000. The increase in net position was primarily in the Airport fund and is due to an increase in capital assets funded by grants, rather than debt. The City has been able to utilize federal grants to acquire property, rather than have to issue new debt to pay for this project. For all business-type activities, revenues exceeded expenses by $2,495,000. Revenues for business-type activities totaled $63,654,000. The primary revenue source for business-type activities is charges for services, $39,355,000 or 61.8%. In addition for FY14, the City’s business type-activities had a significant portion, $22,815,000 or 35.8%, of their revenues from grants and contributions used to help fund capital and flood recovery projects for business-type activities. This is a decrease of $20,660,000 due to additional grants to cover expenses for the Wastewater flood mitigation project received in the prior year. The total expenses for business-type activities in FY14 were $61,159,000. Wastewater Treatment represented the highest portion of business-type activities, $21,139,000 or 34.6%, with Water, $8,723,000 or 14.3%, Sanitation, $8,402,000 or 13.7%, Transit, $7,795,000 or 12.7%, and Housing Authority, $7,703,000 or 12.6%, making up the remainder of the majority of business-type activities expenses. The graphs on the following pages represent a breakdown of revenue by source and expenses by program area for governmental and business-type activities. 25 Charges for services 9% Grants and Contributions 11% Property taxes 60% Other Taxes 12% Misc. Other 8% Governmental Activities FY2014 Revenue by Source Charges for services 62% Grants and Contributions 36% Misc. Other 2% Business-Type Activities FY2014 Revenue by Source 26 Public Safety Public Works Culture and Recreation Community and Econ Dev General Govt Interest Expense 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 Do l l a r s ( $ ) Program Area Governmental Activities FY2014 Expenses by Program Area (amounts expressed in thousands) Wastewater Treatment Water Sanitation Housing Authority Parking Airport Stormwater Cable TV Transit 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 Do l l a r s ( $ ) Program Area Business-Type Activities FY2014 Expenses by Program Area (amounts expressed in thousands) 27 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. The City implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions effective with the June 30, 2011 financial statements. 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, 2014, the City’s governmental funds reported combined ending fund balances of $79,185,000, an increase of $12,306,000 in comparison with the prior year. Of this total amount, $17,898,000 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 $57,818,000 or 73% contains external restraints on its use. The assigned fund balance of $3,400,000 or 4.3% has been identified by the City to be used for specific purposes. The nonspendable fund balance is $69,000 or 0.1%, 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, 2014, the unassigned fund balance of the General Fund was $17,907,000 while General Fund’s total fund balance was $47,909,000. 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 38.1% of total General Fund expenditures of $46,964,000, while total fund balance represents 102.0% of that same amount. During the current fiscal year, the fund balance of the City’s General Fund increased by $3,294,000. This was due to a reduction in the amount of capital projects that were funded. The fund balance in the Bridge, Street, and Traffic Control Construction Fund was $11,138,000, an increase of $4,193,000. 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 $6,854,000, an increase of $2,612,000. 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. The change in these fund balances is due to timing of the sale of GO bonds. The fund balance for the Community Development Block Grant Fund was negative $9,000, representing a $1,000 decrease in FY14 and revealing that liabilities in this fund were higher than assets. In FY11, the City received program income that we were required to use prior to accessing new grant funding. This program income was fully utilized in FY13 and this fund will normally carry a minimal or zero fund balance going forward. The ending fund balance of the Other Shared Revenues and Grants fund was $4,517,000, a $1,884,000 increase. This increase is due to a refund received for overcharges for services in prior years and a reduction in expenses. 28 The ending fund balance of the Debt Service Fund was $6,872,000, an increase of $345,000, all of which is reserved for the payment of debt service (i.e. payment of general obligation principal and interest). The fund balance in the Employee Benefits Fund was stable from prior year. The ending fund balance was $1,713,000, a decrease of $78,000 or 4.4% from FY13. 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 $344,367,000, an increase in net position of $8,686,000. 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, $264,727,000 is net investment in capital assets. Unrestricted net position totaled $60,202,000, a decrease of $2,829,000 compared to the previous year. The Internal Service funds showed net position totaling $31,732,000 as of June 30, 2014, an increase of $82,000 primarily due to an operating income in the Equipment Reserve Fund to build up reserves for future capital outlay and offset by an operating loss in the Loss Reserve Fund as claims were more than anticipated. Budgetary Highlights The City presents budgetary information as allowed by GASB Statement No. 41. Budgets are based on nine functional areas as required by state statute, not by fund or fund type. The City had two budget amendments during the fiscal year. These amendments increased budgeted revenues by $22,447,000 or 15.3% to a total of $169,125,000 and the expenditure budget by $48,378,000 or 28.6% to a total of $217,391,000. 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, 2014 amounts to $510,835,000, 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, 2014 increased by $5,391,000 for governmental activities compared to the prior year and increased by $5,617,000 for business-type activities over the prior year. The following table reflects the $510,835,000 investment in capital assets, net of accumulated depreciation. 29 Major capital asset events during the current fiscal year included the following: • Work was completed on the South Wastewater Plant Expansion. This project relocated the North Wastewater Treatment Plant and consolidated operations into the South Wastewater Treatment Plant through expansion of south plant facilities and demolition of the north plant facilities. Funding for the project includes $22,003,000 in federal EDA grants, $13,610,000 in local options sales tax, $5,495,000 in I-JOBS grant monies, $5,000,000 in CDBG Public Infrastructure grants, as well as, $1,890,000 from Wastewater user fees and $7,000,000 in revenue bonds. The beginning construction in progress balance was $40,167,000 and an additional $11,088,000 of expense was incurred in FY14, for a total of $51,255,000 which was capitalized. • Current construction projects at the municipal airport include rehabbing existing runways, adding a parallel runway to improve safety, and obstruction mitigation. The construction in progress balance at the end of FY13 was $4,153,000. Additional expenses of $716,000 were incurred during FY14. $3,021,000 remains in construction in progress and $1,848,000 was capitalized. These costs are primarily funded through federal or state grants, with the remainder of funding from GO bonds. In addition the airport acquired land at a cost of $5,011,000 which was funded through a federal grant. • Current construction is being done for the West Side Levee Project, which includes the construction of an earthen levee, riverbank stabilization, and interior drainage improvements. The construction in progress balance at the beginning of the year was $292,000. Additional expenses of $2,322,000 were added in FY 14, for an ending balance in construction in progress of $2,614,000. The total cost of the project is $5,729,000 and is funded primarily through federal or state grants, with the remainder of funding from GO bonds. • Reconstruction of a landfill cell that was damaged by a fire in FY12 was completed. The beginning construction in progress balance was $3,805,000. Additional costs of $1,096,000 were incurred in FY14. Total project costs were $4,901,000 and they were funded through landfill operations. • Expenses for a variety of street and bridge construction were moved into construction in progress at the end of FY14 for a total balance of $12,485,000. This includes a project from the City’s major initiative for economic development with a balance of $7,263,000 for Lower Muscatine from Kirkwood to First Avenue. Additional construction in progress includes $3,193,000 for the Iowa City Gateway Project, which will reconstruct and elevate Dubuque Street and Park Road Bridge to provide flood protection. Additional information on the City’s capital assets can be found in Note 5 to the financial statements. City of Iowa City's Capital Assets (net of depreciation) (amounts expressed in thousands) Governmental Business-type Activities Activities Total 2014 2013 2014 2013 2014 2013 Land 23,103$ 22,782$ 33,497$ 28,496$ 56,600$ 51,278$ Buildings 39,083 35,065 67,094 80,280 106,177 115,345 Improvements other than buildings 3,884 4,120 5,369 5,686 9,253 9,806 Machinery and equipment 13,874 14,203 10,608 11,545 24,482 25,748 Infrastructure 92,601 82,815 199,175 139,960 291,776 222,775 Construction in progress 15,109 23,278 7,438 51,597 22,547 74,875 Total 187,654$ 182,263$ 323,181$ 317,564$ 510,835$ 499,827$ 30 Debt Administration: At the end of the fiscal year, the City had total bonded debt outstanding of $123,920,000. Of this amount, $64,420,000 comprises debt backed by the full faith and credit of the City. However, $890,000 or 1.4% of the general obligation bonds is debt that serves enterprise funds and is abated by their charges for services and $7,189,000 or 11.2% of these bonds is debt that will be paid with Tax Increment Financing revenues. $59,500,000 represents revenue bonds secured solely by specific revenue sources. The City issued $20,320,000 General Obligation bonds during FY14 and during the current fiscal year the City’s total bonded debt only increased by $755,000 because of retirement of debt. 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, 2014 were as follows: General obligation bonds Aaa Parking revenue bonds A Wastewater treatment revenue bonds A Water revenue bonds A 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 $233,416,000. With outstanding debt applicable to this limit of $67,075,000 we are utilizing 28.7% of this limit. More detailed information on debt administration is provided in Note 6 of the financial statements. Economic Factors and Next Year’s Budget and Rates During the 2009 session, the Iowa State Legislature passed a law allowing cities to utilize franchise fee tax as a revenue alternative to property tax. The Iowa City Council passed a local franchise fee tax of 1% on natural gas and electricity that became effective April 1, 2010. This revenue is being utilized to support additional public safety initiatives, including operating a fourth fire station. In FY14, the City collected $1,031,000 in local franchise fee. City of Iowa City's Outstanding Debt General Obligation and Revenue Bonds (amounts expressed in thousands) Governmental Business-type Activities Activities Total 2014 2013 2014 2013 2014 2013 General obligation bonds 63,530$ 57,360$ 890$ 1,190$ 64,420$ 58,550$ Revenue bonds 2,655 2,655 56,845 61,960 59,500 64,615 Total 66,185$ 60,015$ 57,735$ 63,150$ 123,920$ 123,165$ 31 The City expects continued constraints by the State’s property tax formula. During the last legislative session, 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 balanced budget in the General Fund for FY15 that strives to maintain current service delivery levels. The tax levy rate per $1,000 of assessed valuation for FY15 is provided below: Requests for Information This report is designed to provide a general overview of the City of Iowa City’s finances for all of those with an interest in the government’s finances. Questions concerning any of the information provided in this report, or requests for additional financial information should be addressed to City of Iowa City, Finance Department, 410 East Washington Street, Iowa City, IA, 52240. General Levy $ 8.100 Debt Service Levy 4.130 Employee Benefits Levy 2.963 Transit Levy 0.950 Liability Insurance Levy 0.292 Library Levy 0.270 Total City Levy $ 16.705 32 33 Governmental Business-type Activities Activities Total Assets Equity in pooled cash and investments 60,279$ 53,541$ 113,820$ Receivables: Property tax 51,828 - 51,828 Accounts and unbilled usage 530 3,190 3,720 Interest 165 149 314 Notes 17,787 823 18,610 Internal balances (11,066) 11,066 - Due from other governments 7,410 3,243 10,653 Inventories 597 646 1,243 Assets held for resale 2,108 - 2,108 Restricted assets: Equity in pooled cash and investments 46,909 33,772 80,681 Other post employment benefits asset 23 6 29 Capital assets: Land and construction in progress 38,211 40,935 79,146 Other capital assets (net of accumulated depreciation)149,443 282,246 431,689 Total assets 364,224 429,617 793,841 Liabilities Accounts payable 2,523 1,098 3,621 Contracts payable 1,418 2,808 4,226 Accrued liabilities 3,964 332 4,296 Interest payable 190 1,152 1,342 Deposits 1,068 882 1,950 Advances from grantors 29 - 29 Due to other governments 36 134 170 Notes payable 1,943 - 1,943 Noncurrent liabilities: Due within one year: Employee vested benefits 1,163 433 1,596 Bonds payable 11,780 5,592 17,372 Due in more than one year: Employee vested benefits 941 317 1,258 Other post employment benefits obligation 2,659 984 3,643 Notes payable 211 - 211 Bonds payable 54,969 52,862 107,831 Landfill closure/post-closure liability - 7,316 7,316 Total liabilities 82,894 73,910 156,804 (continued) (amounts expressed in thousands) CITY OF IOWA CITY, IOWA STATEMENT OF NET POSITION June 30, 2014 34 Governmental Business-type Activities Activities Total Deferred inflows of resources Unavailable revenues: Suceeding year property taxes 51,609$ -$ 51,609$ Notes 11,523 - 11,523 Total deferred inflows of resources 63,132 - 63,132 Net position Net investment in capital assets 138,482 264,727 403,209 Restricted for or by: Employee benefits 1,713 - 1,713 Capital projects 30,692 - 30,692 Debt service 6,718 - 6,718 Police 529 - 529 Other purposes 306 - 306 Bond ordinance - 14,533 14,533 State statute - 1,305 1,305 Future improvements - 486 486 Grant agreement - 3,114 3,114 Unrestricted 39,758 71,542 111,300 Total net position 218,198$ 355,707$ 573,905$ The notes to the financial statements are an integral part of this statement. June 30, 2014 (amounts expressed in thousands) CITY OF IOWA CITY, IOWA STATEMENT OF NET POSITION (continued) 35 Operating Capital Charges Grants and Grants and Functions/Programs:Expenses for Services Contributions Contributions Governmental activities: Public safety 22,721$ 3,626$ 486$ -$ Public works 8,258 61 69 5,227 Culture and recreation 16,586 808 87 342 Community and economic development 10,059 45 2,589 11 General government 7,687 3,030 - - Interest on long-term debt 1,797 - - - Total governmental activities 67,108 7,570 3,231 5,580 Business-type activities: Wastewater treatment 21,139 12,559 62 7,105 Water 8,723 8,443 6 539 Sanitation 8,402 8,467 27 - Housing authority 7,703 213 6,721 - Parking 4,093 5,294 - - Airport 1,209 328 56 5,214 Stormwater 1,314 1,093 13 711 Cable television 781 773 - - Transit 7,795 2,185 2,118 243 Total business-type activities 61,159 39,355 9,003 13,812 Total 128,267$ 46,925$ 12,234$ 19,392$ General revenues: Property taxes, levied for general purposes Road use tax Hotel/motel tax Gas and electric tax Local option sales tax Utility franchise tax Earnings on investments Gain on disposal of capital assets Miscellaneous Transfers Total general revenues and transfers Changes in net position Net position beginning of year Net position end of year The notes to the financial statements are an integral part of this statement. Program Revenues CITY OF IOWA CITY, IOWA STATEMENT OF ACTIVITIES For the Year Ended June 30, 2014 (amounts expressed in thousands) 36 Governmental Business-type Activities Activities Total (18,609)$ -$ (18,609)$ (2,901) - (2,901) (15,349) - (15,349) (7,414) - (7,414) (4,657) - (4,657) (1,797) - (1,797) (50,727) - (50,727) - (1,413) (1,413) - 265 265 - 92 92 - (769) (769) - 1,201 1,201 - 4,389 4,389 - 503 503 - (8) (8) - (3,249) (3,249) - 1,011 1,011 (50,727) 1,011 (49,716) 50,551 - 50,551 6,745 - 6,745 967 - 967 780 - 780 466 - 466 1,031 - 1,031 973 494 1,467 1,651 725 2,376 4,353 265 4,618 (6,192) 6,192 - 61,325 7,676 69,001 10,598 8,687 19,285 207,600 347,020 554,620 218,198$ 355,707$ 573,905$ Net (Expense) Revenue and Changes in Net Position 37 Capital ProjectsCommunityOther Development Shared Other Employee Block Revenue and Other Debt GovernmentalGeneralBenefitsGrantGrantsConstructionServiceFunds Total Assets Equity in pooled cash and investments 19,461$ 1,756$ -$ 4,217$ 227$ 6,158$ 1,026$ 32,845$ Receivables: Property tax 29,610 9,129 - - - 12,805 284 51,828 Accounts and unbilled usage 281 6 - 21 200 - - 508 Interest 100 - - - 10 1 14 125 Notes 1,281 - 15,649 - - 857 - 17,787 Advances to other funds 686 - 18 - - 163 - 867 Due from other governments 2,112 316 463 616 2,107 - 1,747 7,361 Assets held for resale 1,943 - - - - - 165 2,108 Restricted assets: Equity in pooled cash and investments 30,047 - - 5 7,157 - 9,700 46,909 Total assets 85,521$ 11,207$ 16,130$ 4,859$ 9,701$ 19,984$ 12,936$ 160,338$ (continued) Special Revenue CITY OF IOWA CITY, IOWA BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2014 (amounts expressed in thousands) 3 8 Capital ProjectsCommunityOther Development Shared Other Employee Block Revenue and Other Debt GovernmentalGeneralBenefitsGrantGrantsConstructionServiceFunds Total Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable 1,251$ 88$ 30$ 94$ 520$ 3$ 99$ 2,085$ Contracts payable - - - - 879 - 539 1,418 Accrued liabilities 823 1 3 68 4 - 20 919 Advances from other funds - - 429 164 - - - 593 Due to other governments 36 - - - - - - 36 Interest payable 36 - - - - - - 36 Notes payable 1,943 - - - - - - 1,943 Liabilities payable from restricted assets: Deposits 1,030 - - 5 32 - 1 1,068 Advances from grantors - - - - 29 - - 29 Total liabilities 5,119 89 462 331 1,464 3 659 8,127 Deferred inflows of resources : Unavailable revenues: Suceeding year property taxes 29,486 9,089 - - - 12,753 281 51,609 Notes 1,281 - 15,667 - - - - 16,948 Grants 375 - 10 11 1,276 356 531 2,559 Other 1,351 316 - - 107 - 136 1,910 Total deferred inflows of resources 32,493 9,405 15,677 11 1,383 13,109 948 73,026 Fund balances: Nonspendable 69 - - - - - - 69 Restricted 26,533 1,713 - 4,517 6,854 6,872 11,329 57,818 Assigned 3,400 - - - - - - 3,400 Unassigned 17,907 - (9) - - - - 17,898 Total fund balances (deficit)47,909 1,713 (9) 4,517 6,854 6,872 11,329 79,185 Total liabilities, deferred inflows of resources and fund balances 85,521$ 11,207$ 16,130$ 4,859$ 9,701$ 19,984$ 12,936$ 160,338$ The notes to the financial statements are an integral part of this statement. CITY OF IOWA CITY, IOWA BALANCE SHEET (continued) GOVERNMENTAL FUNDS June 30, 2014 (amounts expressed in thousands) Special Revenue 3 9 Total governmental fund balances 79,185$ 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.31,732 Other long-term assets are not available to pay for current period expenditures and therefore are unavailable in the funds: Notes, grants and other receivables - Earned but unavailable 9,894 Capital assets used in governmental activities are not current financial resources and therefore are not reported in the funds. 180,419 Accrued compensated absences are not due and payable in the current period and therefore are not reported in the funds.(1,992) Accrued post employment benefit obligations are not due and payable in the current period and therefore are not reported in the funds.(2,586) Bonds payable are not due and payable in the current period and therefore are not reported in the funds.(66,749) Notes payable are not due and payable in the current period and therefore are not reported in the funds.(211) Accrued interest on bonds (154) Internal balance due to integration of internal service funds (11,340) Total net position of governmental activities 218,198$ The notes to the financial statements are an integral part of this statement. (amounts expressed in thousands) CITY OF IOWA CITY RECONCILIATION OF THE BALANCE SHEET OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION June 30, 2014 40 41 Capital Projects Community Other Development Shared Other Employee Block Revenue and Other Debt Governmental General Benefits Grant Grants Construction Service Funds Total Revenues Taxes 31,388$ 9,517$ -$ -$ -$ 12,181$ 711$ 53,797$ Licenses and permits 1,660 - - - - - - 1,660 Intergovernmental 2,790 - 1,504 7,627 3,183 - 2,532 17,636 Charges for services 1,321 282 - 23 135 - 58 1,819 Use of money and property 677 - 26 70 34 65 37 909 Miscellaneous 4,578 11 215 642 388 133 73 6,040 Total revenues 42,414 9,810 1,745 8,362 3,740 12,379 3,411 81,861 Expenditures Current: Public safety 20,802 355 - - 213 - - 21,370 Public works 1,150 - - 5,100 371 12 1,799 8,432 Culture and recreation 12,687 - - - 400 - - 13,087 Community and economic development 2,390 - 1,748 781 2,180 - 1,097 8,196 General government 6,680 359 - - 144 1 - 7,184 Debt service: Principal - - - - - 13,560 - 13,560 Interest - - - - - 1,903 - 1,903 Capital outlay 3,255 - - 144 5,606 - 5,523 14,528 Total expenditures 46,964 714 1,748 6,025 8,914 15,476 8,419 88,260 Excess (deficiency) of revenues over (under) expenditures (4,550) 9,096 (3) 2,337 (5,174) (3,097) (5,008) (6,399) (continued) Special Revenue CITY OF IOWA CITY, IOWA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended June 30, 2014 (amounts expressed in thousands) 4 2 Capital Projects Community Other Development Shared Other Employee Block Revenue and Other Debt Governmental General Benefits Grant Grants Construction Service Funds Total Other Financing Sources (Uses) Issuance of debt 981 - - - 8,008 2,609 8,132 19,730 Sale of capital assets 1,684 - - - - - - 1,684 Premiums on issuance of bonds 19 - - - 156 51 159 385 Transfers in 9,152 - 3 407 1,046 782 1,650 13,040 Transfers out (3,992) (9,174) (1) (860) (1,424) - (683) (16,134) Total other financing sources and (uses)7,844 (9,174) 2 (453) 7,786 3,442 9,258 18,705 Net change in fund balances 3,294 (78) (1) 1,884 2,612 345 4,250 12,306 Fund Balances, Beginning 44,615 1,791 (8) 2,633 4,242 6,527 7,079 66,879 Fund Balances, Ending 47,909$ 1,713$ (9)$ 4,517$ 6,854$ 6,872$ 11,329$ 79,185$ The notes to the financial statements are an integral part of this statement. Special Revenue CITY OF IOWA CITY, IOWA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES (continued) GOVERNMENTAL FUNDS For the Year Ended June 30, 2014 (amounts expressed in thousands) 4 3 Net change in fund balances - total governmental funds 12,306 $ Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the asset. Capital outlays and contributed capital assets exceeded depreciation expense in the current year as follows: Expenditures for capital assets 13,702 $ Transfers of capital assets (to)\from enterprise funds - net (3,500) Capital assets contributed 1,312 Depreciation expense (5,625) 5,889 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 (19,730) Premium on bonds issued (385) Repayments of debt 13,560 Amortization of premium 109 (6,446) 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 (927) 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 6 Change in accrued post employment benefit obligations (275) Change in accrued interest on debt (3) 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.(33) 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.81 Change in net position of governmental activities 10,598 $ The notes to the financial statements are an integral part of this statement. (amounts expressed in thousands) For the Year Ended June 30, 2014 CITY OF IOWA CITY RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES 44 45 GovernmentalActivities - Other Internal Wastewater Housing Enterprise ServiceParkingTreatmentWaterSanitationAuthorityTransitFundsTotalFunds Assets Current assets: Equity in pooled cash and investments 5,674$ 17,417$ 8,939$ 11,726$ 2,790$ 4,373$ 2,622$ 53,541$ 27,434 Receivables: Accounts and unbilled usage 8 1,272 878 729 2 8 293 3,190 22 Interest 16 31 23 19 53 4 3 149 40 Notes - - - - 823 - - 823 - Advances to other funds - - - 765 - - - 765 - Due from other governments - 2,108 53 28 49 22 983 3,243 49 Inventories - - 389 - - 257 - 646 597 Total current assets 5,698 20,828 10,282 13,267 3,717 4,664 3,901 62,357 28,142 Noncurrent assets: Restricted assets: Equity in pooled cash and investments 1,921 9,975 4,801 13,717 3,114 17 227 33,772 - Other post employment benefits asset - - - - - - 6 6 23 Capital assets: Land 6,798 759 6,296 1,912 620 2,630 14,481 33,496 45 Buildings 26,249 36,858 24,019 5,495 5,350 15,399 5,888 119,258 821 Improvements other than buildings 328 7,119 2,418 269 9 - 409 10,552 50 Machinery and equipment 1,420 7,273 10,458 425 116 10,019 651 30,362 18,053 Infrastructure - 145,857 56,718 16,199 - 955 56,028 275,757 1,777 Accumulated depreciation (17,028) (62,553) (29,968) (11,139) (4,111) (11,967) (16,917) (153,683) (13,518) Construction in progress 557 372 1,331 23 - - 5,156 7,439 7 Total noncurrent assets 20,245 145,660 76,073 26,901 5,098 17,053 65,929 356,959 7,258 Total assets 25,943 166,488 86,355 40,168 8,815 21,717 69,830 419,316 35,400 (continued) STATEMENT OF NET POSITION CITY OF IOWA CITY, IOWA Business-type Activities - Enterprise Funds (amounts expressed in thousands) June 30, 2014 PROPRIETARY FUNDS 4 6 GovernmentalActivities - Other Internal Wastewater Housing Enterprise Service Parking Treatment Water Sanitation Authority Transit Funds Total Funds Liabilities Current liabilities: Accounts payable 108$ 180$ 278$ 126$ 29$ 156$ 221$ 1,098$ 438$ Contracts payable - 2,400 14 73 - - 321 2,808 - Accrued liabilities 38 53 56 54 18 97 16 332 3,045 Employee vested benefits 45 63 83 78 30 118 16 433 62 Due to other governments - 1 21 66 20 26 - 134 - Interest payable 150 683 319 - - - - 1,152 - Bonded debt payable (net of unamortized premium and discounts)542 3,370 1,680 - - - - 5,592 - Total current liabilities 883 6,750 2,451 397 97 397 574 11,549 3,545 Noncurrent liabilities: Liabilities payable from restricted assets: Deposits 1 - 572 6 288 6 9 882 - Advances from other funds - - - - 18 86 935 1,039 - Employee vested benefits 32 44 65 59 21 84 12 317 50 Bonded debt payable (net of unamortized premium and discounts)6,630 29,290 16,942 - - - - 52,862 - Other post employment benefits obligation 120 126 180 247 56 236 19 984 73 Landfill closure/postclosure liability - - - 7,316 - - - 7,316 - Total noncurrent liabilities 6,783 29,460 17,759 7,628 383 412 975 63,400 123 Total liabilities 7,666 36,210 20,210 8,025 480 809 1,549 74,949 3,668 Net Position Net investment in capital assets 11,152 103,025 52,650 13,184 1,984 17,036 65,696 264,727 7,235 Restricted by bond ordinance 1,384 9,292 3,857 - - - - 14,533 - Restricted by state statute - - - 1,305 - - - 1,305 - Restricted for future improvements 386 - - - - - 100 486 - Restricted by grant agreement - - - - 3,114 - - 3,114 - Unrestricted 5,355 17,961 9,638 17,654 3,237 3,872 2,485 60,202 24,497 Total net position 18,277 $ 130,278 $ 66,145$ 32,143$ 8,335$ 20,908 $ 68,281$ 344,367 31,732$ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.11,340 Net position of business-type activities 355,707$ The notes to the financial statements are an integral part of this statement. CITY OF IOWA CITY, IOWA Business-type Activities - Enterprise Funds (amounts expressed in thousands) June 30, 2014 PROPRIETARY FUNDS STATEMENT OF NET POSITION (continued) 4 7 Governmental Activities - Other Internal Wastewater Housing Enterprise Service Parking Treatment Water Sanitation Authority Transit Funds Total Funds Operating Revenues: Charges for services 5,294$ 12,559$ 8,443$ 8,467$ 213$ 2,185$ 2,194$ 39,355$ 17,008$ Miscellaneous 26 75 16 57 47 15 29 265 1 Total operating revenues 5,320 12,634 8,459 8,524 260 2,200 2,223 39,620 17,009 Operating Expenses: Personal services 1,530 2,001 2,692 2,688 987 3,793 722 14,413 2,155 Commodities 141 1,006 1,199 294 22 1,079 146 3,887 2,900 Services and charges 1,298 2,701 1,927 5,178 6,534 1,753 803 20,194 10,850 2,969 5,708 5,818 8,160 7,543 6,625 1,671 38,494 15,905 Depreciation 800 4,036 2,181 474 132 1,070 1,618 10,311 1,551 Total operating expenses 3,769 9,744 7,999 8,634 7,675 7,695 3,289 48,805 17,456 Operating income (loss)1,551 2,890 460 (110) (7,415) (5,495) (1,066) (9,185) (447) Nonoperating Revenues (Expenses): Gain (loss) on disposal of capital assets - (10,062) 11 - 30 (17) 675 (9,363) 59 Operating grants - 62 6 27 6,721 2,118 69 9,003 - Interest income 45 200 154 52 30 7 6 494 65 Interest expense (298) (1,284) (682) - - - - (2,264) - Total nonoperating revenues (expenses)(253) (11,084) (511) 79 6,781 2,108 750 (2,130) 124 (continued) Business-type Activities - Enterprise Funds (amounts expressed in thousands) PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION CITY OF IOWA CITY, IOWA For the Year Ended June 30, 2014 4 8 Governmental Activities - Other Internal Wastewater Housing Enterprise Service Parking Treatment Water Sanitation Authority Transit Funds Total Funds Income (loss) before capital contributions and transfers 1,298 (8,194) (51) (31) (634) (3,387) (316) (11,315) (323) Capital contributions - 7,422 2,049 - - 243 7,598 17,312 - Transfers in 19 26 990 - 1 2,858 446 4,340 609 Transfers out - (254) (117) (734) (214) (7) (325) (1,651) (204) Change in net position 1,317 (1,000) 2,871 (765) (847) (293) 7,403 8,686 82 Net Position, Beginning 16,960 131,278 63,274 32,908 9,182 21,201 60,878 31,650 Net Position, Ending 18,277 $ 130,278 $ 66,145 $ 32,143 $ 8,335$ 20,908 $ 68,281 $ 31,732$ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.1 Change in net position of business-type activities 8,687$ 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 (continued) PROPRIETARY FUNDS For the Year Ended June 30, 2014 (amounts expressed in thousands) 4 9 Governmental Activities - Other Internal Wastewater Housing Enterprise Service Parking Treatment Water Sanitation Authority Transit Funds Total Funds Cash Flows From Operating Activities Receipts from customers and users 5,207$ 12,712$ 8,603$ 8,843$ 257$ 1,919$ 2,212$ 39,753$ 18,228$ Payments to suppliers (1,921) (3,906) (2,971) (4,530) (6,554) (2,805) (962) (23,649) (13,883) Payments to employees (1,545) (2,010) (2,665) (2,652) (979) (3,767) (722) (14,340) (1,283) Net cash flows from (used for) operating activities 1,741 6,796 2,967 1,661 (7,276) (4,653) 528 1,764 3,062 Cash Flows From Noncapital Financing Activities Grants received - (13) 76 12 6,689 2,153 18 8,935 - Transfers from other funds 19 26 990 - 1 2,858 446 4,340 609 Transfers to other funds - (254) (117) (734) (214) (7) (325) (1,651) (204) Repayment/(payment) of notes receivable - - - - 133 - - 133 - Advances from other funds - - - - - - 75 75 - Repayment of advances from other funds - - - - - (55) - (55) - Repayment of advances to other funds - - - 236 - - - 236 - Net cash flows from (used for) noncapital financing activities 19 (241) 949 (486) 6,609 4,949 214 12,013 405 Cash Flows From Capital and Related Financing Activities Capital grants received - 11,315 409 3 - 292 5,072 17,091 - Acquisition and construction of property and equipment (68) (12,126) (467) (1,593) 1 (551) (7,797) (22,601) (1,091) Proceeds from sale of property - - 11 - 100 9 675 795 63 Proceeds from issuance of debt - - 590 - - - - 590 - Principal paid on bonded debt (531) (3,249) (2,225) - - - - (6,005) - Interest paid on bonded debt (308) (1,419) (694) - - - - (2,421) - Net cash flows from (used for) capital and related financing activities (907) (5,479) (2,376) (1,590) 101 (250) (2,050) (12,551) (1,028) Cash Flows From Investing Activities Interest on investments 42 587 159 54 22 6 6 876 48 Net increase (decrease) in cash and cash equivalents 895 1,663 1,699 (361) (544) 52 (1,302) 2,102 2,488 Cash and Cash Equivalents, Beginning 6,700 25,729 12,041 25,804 6,448 4,338 4,151 85,211 24,946 Cash and Cash Equivalents, Ending 7,595$ 27,392$ 13,740$ 25,443$ 5,904$ 4,390$ 2,849$ 87,313$ 27,434$ (continued) CITY OF IOWA CITY, IOWA Business-type Activities - Enterprise Funds (amounts expressed in thousands) For the Year Ended June 30, 2014 PROPRIETARY FUNDS STATEMENT OF CASH FLOWS 5 0 Governmental Activities - Other Internal Wastewater Housing Enterprise Service Parking Treatment Water Sanitation Authority Transit Funds Total Funds Reconciliation of operating income (loss) to net cash flows from operating activities: Operating income (loss)1,551 $ 2,890$ 460$ (110)$ (7,415) $ (5,495) $ (1,066)$ (9,185)$ (447)$ Adjustments to reconcile operating income (loss) to net cash flows from (used for) operating activities: Depreciation expense 800 4,036 2,181 474 132 1,070 1,618 10,311 1,551 Changes in: Receivables: Accounts and unbilled usage 167 78 7 330 - 2 (12) 572 1,168 Due from other governments - - (1) - 1 (6) 1 (5) 51 Inventories - - 22 - - (15) - 7 62 Accounts payable (482) (200) 125 30 4 31 (13) (505) (195) Accrued liabilities 1 9 6 6 - 10 2 34 875 Employee vested benefits (6) 2 11 (3) 3 4 (6) 5 (2) Due to other governments - 1 8 1 (2) 11 - 19 - Deferred revenue (280) - - - - (276) - (556) - Deposits - - 138 (11) (4) (1) - 122 - Other post employment benefits asset/obligation (10) (20) 10 33 5 12 4 34 (1) Landfill closure/postclosure liability - - - 911 - - - 911 - Total adjustments 190 3,906 2,507 1,771 139 842 1,594 10,949 3,509 Net cash flows from (used for) operating activities 1,741 $ 6,796$ 2,967 $ 1,661$ (7,276) $ (4,653) $ 528$ 1,764$ 3,062$ Noncash Investing, Capital, and Financing Activities: Contributions of capital assets from government and others -$ 1,033$ 2,100 $ -$ -$ -$ 2,384$ 5,517$ -$ The notes to the financial statements are an integral part of this statement. CITY OF IOWA CITY, IOWA Business-type Activities - Enterprise Funds (amounts expressed in thousands) For the Year Ended June 30, 2014 PROPRIETARY FUNDS STATEMENT OF CASH FLOWS (continued) 5 1 Agency Funds Assets Equity in pooled cash and investments 156$ Total assets 156$ Liabilities Accounts payable 5$ Due to agency 151 Total liabilities 156$ The notes to the financial statements are an integral part of this statement. June 30, 2014 (amounts expressed in thousands) CITY OF IOWA CITY STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES 52 53 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS June 30, 2014 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), cable television, 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 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. 54 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 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 City maintains its records on a modified cash basis of accounting under which only cash receipts, cash disbursements and encumbrances, investments, and bonded debt are recorded. These modified cash basis accounting records have been adjusted to the accrual or modified accrual basis, as necessary, to prepare the accompanying financial statements in accordance with GAAP. 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, 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 and proprietary funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Agency funds do not have a 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. 55 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 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 Community Development Block Grant Fund accounts for revenue from the U.S. Department of Housing and Urban Development’s Community Development Block Grant programs. The Other Shared Revenue and Grants Fund accounts for revenue from various sources, primarily road use tax monies from the State of Iowa and reimbursable programs funded by federal and state grants. The Other Construction Fund accounts for the construction or replacement of other City general fixed assets, such as administrative buildings with various funding sources, including general obligation bonds, intergovernmental revenues, and contributions. 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 Parking Fund is used to account for the operation and maintenance of the “on” and “off” street public parking facilities. 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 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 Transit Fund is used to account for the operation and maintenance of the public transportation system. 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. 56 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 The City also reports fiduciary funds which are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City has one fiduciary fund which is maintained as an agency fund, with no attempt to create an ongoing fund balance. The fund in this category is Project Green, which accounts for donations that are received to plant and develop yards and lawns, both public and private, within Iowa City. 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. 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 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. 57 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 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 15 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, the related revenue is unavailable in both the government-wide and fund financial statements and 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 Transit Fund, Water Fund, and the Equipment Maintenance Fund. Inventories of materials and supplies in the enterprise funds are determined by actual count and priced on the FIFO method. 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 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 fair 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 5 – 30 years 58 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 Bond Premiums and Discounts Debt issued at a premium or discount is recorded net of the unamortized premium or discount. In the governmental funds, premiums and discounts are recorded entirely as other financing sources or uses in the year of issuance. In the proprietary funds and the government-wide statements, they are amortized over the life of the bonds. Compensated Absences Permanent City employees accumulate vacation and sick leave hours for subsequent use or for payment upon death, resignation, or retirement. The City pays its employees (except firefighters) one-half of the accumulated sick leave at the time of termination on the basis of the employee’s then effective hourly base salary, provided that the dollar amount of the payment may be up to, but not exceed, the amount that an employee would be paid if the employee had terminated on June 28, 1985. Employees hired on or after June 29, 1985, are not eligible for payment of accumulated sick leave upon termination, death, or retirement. Pensions The provision for pension cost is recorded on the accrual basis (based on statutorily determined contribution rates), and the City’s policy is to fund pension costs as they accrue. 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 7). Deferred Inflows of Resources Although certain revenues are measureable, 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. Deferred inflows of resources consist of property tax receivable, notes receivable, 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 and notes receivable that will not be recognized as revenue until the year for which the payment is received. 59 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 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 agency funds. This is formalized in a separate budgetary report, the Financial Plan. This budget is adopted on or before March 15 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 the individual fund revenue rather than on aggregated fund totals. 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. These budgets are adopted and amended at the same time and in the same manner as the City’s annual function budget. A City budget for the current fiscal year may be amended for any of the following purposes as prescribed by Iowa statute: a. To permit the appropriation and expenditure of unexpended, unencumbered cash balances on hand at the end of the preceding fiscal year. b. To permit the appropriation and expenditure of amounts anticipated being available from sources other than property taxation. c. To permit transfers between funds. d. To permit transfers between programs. 60 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 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 $62,497,049 in revenues and other financing sources and by $75,740,061 in expenditures and other financing uses. Appropriations, as adopted or amended, lapse at the end of the fiscal year. As allowed by GASB Statement No. 41, Budgetary Comparison Schedules – Perspective Differences, the City presents budgetary comparison schedules as required supplementary information based on the program structure of nine functional areas as required by state statute for its legally adopted budget. Restricted Assets Assets within the individual funds, which can be designated by the City Council for any use within the fund’s purpose, are considered to be unrestricted assets. Assets, which are restricted for specific uses by bonded debt requirements, grant provisions, or other requirements, are classified as restricted assets. Liabilities, which are payable from restricted assets, are classified as such. Classification of Fund Balances Fund balances for the governmental funds are reported in classifications based on the nature of any limitations requiring the use of resources for specific purposes (see Note 9). 2. Compliance and Accountability At June 30, 2014 the Community Development Block Grant Fund reported a deficit balance of $9,000. The deficit is due to unavailable revenue from the Department of Housing and Urban Development (HUD). The City anticipates receiving these funds from HUD. 3. Cash and Pooled Investments The City’s deposits in banks at June 30, 2014 were entirely covered by federal depository insurance, national credit union administration, or by the State Sinking Fund in accordance with Chapter 12C of the Code of Iowa. This chapter provides for additional assessments against the depositories to insure there will be no loss of public funds. The City is authorized by statute to invest public funds in obligations of the United States government, its agencies and instrumentalities; certificates of deposit or other evidences of deposit at federally insured Iowa depository institutions approved by City Council and secured pursuant to the limitations set forth in Chapter 12C of the Code of Iowa; prime eligible bankers acceptances; certain high rated commercial paper; 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; certain joint investment trusts; and warrants or improvement certificates of a drainage district. Investments are stated at fair value. In addition, the City had investments in the Iowa Public Agency Investment Trust, which are valued at an amortized cost of $1,500,000 pursuant to Rule 2a-7 under the Investment Company Act of 1940. 61 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 At June 30, 2014 the City had the following investment: Type Fair Value Maturity U S Agencies $997,803 August 2017 Interest rate risk. The City’s investment policy limits the investment of general and operating funds to one year, unless a temporary extension of maturities is approved by the City Council. In such cases, the average maturity of each fund’s portfolio shall not exceed 397 days. Funds not identified as operating funds may be invested in instruments whose maturities do not exceed five years at the time of purchase. 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. The aforementioned 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). 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 sanitation funds. 62 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 4. Interfund Balances and Transfers Interfund balances for the year ended June 30, 2014, consisted of the following: Interfund balances at June 30, 2014, include advances due to/from other funds. Advances to/from other funds represent amounts for construction loans, land and negative cash balance funding. $640,742 of the $935,127 advances to the Nonmajor Enterprise Funds and $29,701 of the $86,039 advance to the Transit Fund are not expected to be repaid within the next year. The $429,448 of the advance to the Community Development Block Grant Fund is expected to be repaid within the next year. $150,576 of the $162,888 advance to the Other Shared Revenue and Grants Fund is not expected to be repaid within the next year. None of the $18,000 advance to Housing Authority is expected to be repaid within the next year. Community Development Debt General Block Grant Service Sanitation Total Advances to: Community Development 429,448$ -$ -$ -$ 429,448$ Block Grant Other Shared Revenue and Grants - - 162,888 - 162,888 Housing Authority - 18,000 - - 18,000 Transit - - - 86,039 86,039 Nonmajor Enterprise 255,982 - - 679,145 935,127 Total 685,430$ 18,000$ 162,888$ 765,184$ 1,631,502$ Advances from 63 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 Interfund transfers for the year ended June 30, 2014, consisted of the following: (continued) 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. In the fund financial statements, total transfers in and transfers out of $17,989,946 are less than total transfers of $21,490,220 because of the treatment of transfers of capital assets to and from the governmental activities capital assets. During the year, construction in progress related to construction along Lower Muscatine Road with a value of $317,207 was transferred from governmental activities capital asset to Wastewater Treatment. No amounts were reported in the governmental funds, as the amounts did not involve the transfer of financial resources. However, Wastewater Treatment did report capital contributions for the capital resources received. Other Capital Community Shared Projects Employee Development Revenue and Other Nonmajor Wastewater General Benefits Block Grant Grants Construction Governmental Treatment Transfer to: General -$ 8,768,255$ -$ 73,078$ 465$ 41,542$ Community Development Block Grant 2,820 - - - Debt Service 158,624 - - - 367,973 255,060 Other Shared Revenue and Grants 2,098 405,477 - - Capital Projects Other Construction 184,974 - - - 367,949 16,360 Nonmajor Governmental 703,115 - - 786,786 39,505 - Parking 18,850 Wastewater Treatment - - - - 25,931 Water - - - - 263,822 Housing Authority - - 1,158 - Transit 2,858,163 - - - Nonmajor Enterprise 72,342 - - - 374,351 Internal Service 10,108 - - - 352,179 237,655 Total Transfer to 3,992,244$ 9,173,732$ 1,158$ 859,864$ 1,424,226$ 683,401$ 254,015$ Transfer from 64 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 During the year, construction in progress related to construction along Lower Muscatine Road, Rochester Avenue Bridge and William Street with values of $978,303, $430,196 and $101,601, respectively, were transferred from governmental activities capital asset to Water. No amounts were reported in the governmental funds, as the amounts did not involve the transfer of financial resources. However, Water did report capital contributions for the capital resources received. Also during the year, construction in progress related to construction along Lower Muscatine Road, Rochester Avenue Bridge and William Street with values of $1,514,791, $93,597 and $64,579, respectively, were transferred from governmental activities capital asset to Stormwater. No amounts were reported in the governmental funds, as the amounts did not involve the transfer of financial resources. However, Stormwater did report capital contributions for the capital resources received. Housing Nonmajor Internal Total Water Sanitation Authority Transit Enterprise Service Transfer from 213,989$ 55,000$ 9,152,329$ 2,820 781,657 407,575 49,370 23,830 201,000 202,003 1,045,486 67,533 53,478 1,650,417 18,850 25,931 710,000 15,805 989,627 1,158 2,858,163 446,693 7,356 1,942 609,240 116,903$ 733,830$ 213,989$ 7,356$ 325,283$ 203,945$ 17,989,946 Transfers from governmental activities capital assets to enterprise funds 3,500,274 21,490,220$ Transfer from 65 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 5. Capital Assets Capital asset activity for the year ended June 30, 2014, was as follows: Beginning July 1, 2013 Acquisitions and Transfers Disposals and Transfers Balance June 30, 2014 Governmental activities: Capital assets, not being depreciated: Land 22,781,401$ 321,340$ -$ 23,102,741$ Construction in progress 23,278,125 6,715,419 14,884,434 15,109,110 Total capital assets, not being depreciated 46,059,526 7,036,759 14,884,434 38,211,851 Capital assets, being depreciated: Buildings 53,781,790 5,367,416 21,067 59,128,139 Improvements other than buildings 6,613,274 10,000 - 6,623,274 Machinery and equipment 40,705,010 2,600,863 2,871,388 40,434,485 Infrastructure 114,341,321 12,474,087 - 126,815,408 Total capital assets being depreciated 215,441,395 20,452,366 2,892,455 233,001,306 Less accumulated depreciation for: Buildings 18,716,707 1,346,786 18,537 20,044,956 Improvements other than buildings 2,492,970 246,479 - 2,739,449 Machinery and equipment 26,502,149 2,895,099 2,836,528 26,560,720 Infrastructure 31,526,838 2,687,171 - 34,214,009 Total accumulated depreciation 79,238,664 7,175,535 2,855,065 83,559,134 Total capital assets, being depreciated, net 136,202,731 13,276,831 37,390 149,442,172 Governmental activities capital assets, net 182,262,257$ 20,313,590$ 14,921,824$ 187,654,023$ 66 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 Beginning July 1, 2013 Acquisitions and Transfers Disposals and Transfers Balance June 30, 2014 Business-type activities: Capital assets, not being depreciated: Land 28,496,004$ 5,108,468$ 107,392$ 33,497,080$ Construction in progress 51,596,844 3,687,472 47,846,037 7,438,279 Total capital assets, not being depreciated 80,092,848 8,795,940 47,953,429 40,935,359 Capital assets, being depreciated: Buildings 141,875,564 226,537 22,843,655 119,258,446 Improvements other than buildings 10,575,982 228,300 251,557 10,552,725 Machinery and equipment 33,241,933 600,134 3,479,480 30,362,587 Infrastructure 211,812,898 64,120,572 176,600 275,756,870 Total capital assets being depreciated 397,506,377 65,175,543 26,751,292 435,930,628 Less accumulated depreciation for: Buildings 61,595,134 3,606,982 13,037,605 52,164,511 Improvements other than buildings 4,890,250 444,605 151,744 5,183,111 Machinery and equipment 21,696,937 1,455,358 3,397,545 19,754,750 Infrastructure 71,852,719 4,804,855 75,884 76,581,690 Total accumulated depreciation 160,035,040 10,311,800 16,662,778 153,684,062 Total capital assets, being depreciated, net 237,471,337 54,863,743 10,088,514 282,246,566 Business-type activities capital assets, net 317,564,185$ 63,659,683$ 58,041,943$ 323,181,925$ Depreciation expense was charged to functions as follows: Governmental activities: Public safety 1,232,534$ Public works 3,290,354 Culture and recreation 2,401,728 Community and economic development 34,186 General government 216,733 Total depreciation expense - governmental activities 7,175,535$ Business-type activities: Parking 800,453$ Transit 1,069,850 Wastewater treatment 4,035,790 Water 2,180,793 Sanitation 474,374 Housing authority 132,496 Nonmajor enterprise 1,618,043 Total depreciation expense - business-type activities 10,311,800$ 67 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 6. Long Term Debt Changes in Debt for Bonds Bond debt activity for the year ended June 30, 2014, was as follows: General Obligation Bonds Various issues of general obligation bonds totaling $64,420,000 are outstanding as of June 30, 2014. The bonds have interest rates ranging from 0.5% to 5.6% and mature in varying annual amounts ranging from $105,000 to $2,185,000 per issue, with the final maturities due in the year ending June 30, 2024. Interest and principal payments on all general obligation bonds, except tax abated portions recorded in the enterprise funds, are accounted for through the Debt Service Fund. Portions of several general obligation bond issues have been used to acquire or expand the enterprise fund facilities. In some instances, revenue generated by the enterprise funds is used to pay the general long- term debt principal and interest. The liability for those bonds that are expected to be paid by enterprise funds is included in those funds. Due Within July 1, 2013 Issues Retirements June 30, 2014 One Year Governmental activities: General obligation bonds 57,360,000$ 19,730,000$ 13,560,000$ 63,530,000$ 11,670,000$ Plus: Unamortized Premium 328,803 384,973 111,266 602,510 112,550 Total general obligation bonds 57,688,803 20,114,973 13,671,266 64,132,510 11,782,550 Revenue bonds 2,655,000 - - 2,655,000 - Less: Unamortized Discounts 40,356 - 2,124 38,232 2,124 Total revenue bonds 2,614,644 - (2,124) 2,616,768 (2,124) 60,303,447$ 20,114,973$ 13,669,142$ 66,749,278$ 11,780,426$ Business-type activities: General obligation bonds 1,190,000$ 590,000$ 890,000$ 890,000$ 300,000$ Less: Unamortized Discounts 7,685 - 3,842 3,843 3,843 Total general obligation bonds 1,182,315 590,000 886,158 886,157 296,157 Revenue bonds 61,960,000 - 5,115,000 56,845,000 5,290,000 Plus: Unamortized Premium 804,738 - 81,221 723,517 6,221 Total revenue bonds 62,764,738 - 5,196,221 57,568,517 5,296,221 63,947,053$ 590,000$ 6,082,379$ 58,454,674$ 5,592,378$ 68 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 Annual debt service requirements to maturity for general obligation bonds are as follows: On June 2, 2014, the City issued $11,980,000 of general obligation refunding bonds of which $2,660,000 was to provide resources for future debt payments of $2,660,000 of general obligation bonds. As a result, the refunded general obligation bonds are considered to defeased and the liability has been removed from the governmental activities column of the statement of net position. The refunding was undertaken to reduce total future debt service payments. The result of the transaction is a reduction of $186,630 in future debt service payments and an economic gain of $181,222. The City had refunded general obligation debt totaling $2,660,000 that was still outstanding as of June 30, 2014. Revenue Bonds As of June 30, 2014, the following unmatured revenue bond issues are outstanding: Wastewater Taxable Urban Parking Treatment Water Renewal Original issue amount $ 9,110,000 $ 48,020,000 $ 21,815,000 $ 2,655,000 Interest rates 3.0% to 5.0% 3.0% to 5.0% 1.5% to 4.5% 1.0% to 3.9% Annual maturities $ 540,000 to $ 465,000 to $ 395,000 to $ 130,000 to $ 770,000 $ 2,205,000 $ 835,000 $ 200,000 Amount outstanding $ 7,145,000 $ 31,955,000 $ 18,635,000 $ 2,655,000 Fiscal Year Ending June 30 Principal Interest Principal Interest 2015 11,670,000 1,795,472 300,000 44,959 2016 11,205,000 1,382,580 295,000 11,800 2017 9,595,000 1,078,887 295,000 5,900 2018 8,810,000 836,244 - - 2019 6,350,000 584,669 - - 2020-2024 15,900,000 879,560 - - Total 63,530,000$ 6,557,412$ 890,000$ 62,659$ Governmental Activities Business-type Activities 69 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 Revenue bond debt service requirements to maturity are as follows: The revenue bond ordinances required that wastewater treatment, parking system, 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: Parking Revenue, Water Revenue and Taxable Urban Renewal Revenue bonds – maximum debt service due on the bonds in any succeeding fiscal year. Wastewater Revenue bonds – 125% of the average principal and interest payments over the life of all the Wastewater Revenue bonds. (c) Improvement Reserve $20,000 per month until the reserve balance equals or exceeds $2,000,000 for Wastewater Revenue bonds and $5,000 per month until the reserve balance equals or exceeds $450,000 for Water Revenue bonds, with no further deposits once the minimum balance is reached. If the reserve falls below the required minimum, monthly transfers in the aforementioned amounts will resume. Fiscal Year Ending June 30 Principal Interest Principal Interest 2015 - 75,335 5,290,000 2,206,665 2016 130,000 75,335 5,500,000 2,015,284 2017 130,000 74,035 5,670,000 1,807,671 2018 135,000 72,345 5,900,000 1,588,927 2019 135,000 70,185 6,105,000 1,359,765 2020-2024 725,000 305,145 23,945,000 3,258,915 2025-2029 825,000 197,425 4,435,000 181,269 2030-2034 575,000 44,495 - - Total 2,655,000$ 914,300$ 56,845,000$ 12,418,496$ Governmental Activities Business-type Activities 70 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 Summary of Bond Issues General obligation and revenue bonds payable at June 30, 2014, are comprised of the following issues: Date of Amount Interest Final Outstanding Issue Issued Rates Maturity June 30, 2014 General Obligation Bonds: Multi-Purpose Mar. 2005 7,020,000 3.0 - 4.0 6/15 820,000$ Multi-Purpose Jun. 2006 6,265,000 3.625 - 4.0 6/16 1,495,000 Multi-Purpose Jun. 2006 1,000,000 5.5 - 5.6 6/16 250,000 Refunded Water Construction (1)Sep. 2006 3,350,000 3.6 - 3.75 6/17 300,000 Multi-Purpose May 2007 8,870,000 3.75 6/17 950,000 Multi-Purpose June 2008 9,150,000 3.25 - 3.75 6/18 4,040,000 Refunded Multi-Purpose (2) Oct. 2008 17,005,000 3.0 - 3.75 6/18 5,975,000 Multi-Purpose June 2009 6,685,000 2.5 - 4.0 6/19 3,570,000 Refunded Multi-Purpose (3) June 2009 5,840,000 2.0 - 4.0 6/16 1,795,000 Multi-Purpose Aug. 2010 7,420,000 2.0 - 2.75 6/20 4,550,000 Multi-Purpose June 2011 7,925,000 2.0 - 3.625 6/21 5,610,000 Refunded Multi-Purpose and Library Construction (4)June 2011 10,930,000 2.0 - 3.625 6/21 8,520,000 Multi-Purpose June 2012 9,070,000 2.0 - 2.25 6/22 7,440,000 Multi-Purpose July 2013 7,230,000 1.0 - 2.0 6/23 6,865,000 Multi-Purpose July 2013 520,000 2.0 6/15 260,000 Refunded Multi-Purpose (5) June 2014 11,980,000 0.5 - 0.6 6/24 11,980,000 Total General Obligation Bonds 64,420,000$ Date of Amount Interest Final Outstanding Issue Issued Rates Maturity June 30, 2014 Revenue Bonds: Refunded Parking Bonds (6) Nov. 2009 9,110,000$ 3.0 - 5.0 7/24 7,145,000$ Refunded Wastewater Treatment Bonds (7)Oct. 2008 24,280,000 3.0 - 5.0 7/22 16,145,000 Refunded Wastewater Treatment Bonds (8)May 2009 8,660,000 3.5 - 5.0 7/25 7,225,000 Refunded Wastewater Treatment Bonds (9)Apr. 2010 15,080,000 3.0 - 4.0 7/20 8,585,000 Refunded Water Bonds (10) Oct. 2008 7,115,000 3.0 - 4.375 7/24 5,315,000 Refunded Water Bonds (11) May 2009 9,750,000 4.0 - 4.5 7/25 7,930,000 Refunded Water Bonds (12) June 2012 4,950,000 1.5 - 2.1 7/22 4,500,000 Taxable Urban Renewal Nov. 2012 2,655,000 1.0 - 3.9 6/32 2,655,000 Total Revenue Bonds 59,500,000$ 123,920,000$ 71 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 (1) This bond issue has the general obligation bonds payable shown as a liability on the balance sheet of the Water Fund. Also, this bond issue refunded the November 1997 Water Construction General Obligation Bonds. (2) This bond issue refunded the April 1998, March 1999, and July 2000 General Obligation Bonds. (3) This bond issue refunded the June 2001 General Obligation Bonds. (4) This bond issue refunded the May 2002 General Obligation Bonds. (5) This bond issue is an advance refunding of portions of the September 2006 and May 2007 General Obligation Bonds. (6) This bond issue refunded the December 1999 Parking Revenue Bonds. (7) This bond issue refunded the March 1996, May 1997, and January 1999 Wastewater Revenue Bonds. (8) This bond issue refunded the October 2000 Wastewater Revenue Bonds. (9) This bond issue refunded the December 2001 and April 2002 Wastewater Revenue Bonds. (10) This bond issue refunded the May 1999 Water Revenue Bonds. (11) This bond issue refunded the December 2000 Water Revenue Bonds. (12) This bond issue refunded the October 2002 Water Revenue Bonds. Conduit Debt Obligations From time to time, the City has issued Industrial Development Revenue Bonds, Facility Refunding 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. As of June 30, 2014, there were four series of Industrial Development Revenue Bonds, Facility Refunding Revenue Bonds, and Midwest Disaster Area Revenue Bonds outstanding, with an aggregate principal amount payable of $40,663,555. Debt Legal Compliance Legal Debt Margin: As of June 30, 2014, 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 $ 4,581,219 Utilities 87,100 Total valuation $ 4,668,319 Debt limit, 5% of total assessed valuation $ 233,416 Debt applicable to debt limit 67,075 Legal debt margin $ 166,341 72 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 7. Other Long-term Liabilities Notes Payable 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 $211,000 due on August 1, 2025. Employee Vested Benefits For the governmental activities, employee vested benefits are generally liquidated by the General Fund and Community Development Block Grant Fund. Note Payable activity for the year ended June 30, 2014, was as follows: Due Within July 1, 2013 Issues Retirements June 30, 2014 One Year Governmental activities: $ 211,000 -$ -$ 211,000$ -$ Changes in Long-Term Liabilities - Employee Vested benefits Employee Vested Benefits activity for the year ended June 30, 2014, was as follows: Due Within July 1, 2013 Issues Retirements June 30, 2014 One Year Governmental activities: $ 2,110,614 1,155,293$ 1,160,900$ 2,105,007$ 1,163,657$ Business-type activities: $ 742,700 433,680$ 427,285$ 749,095$ 431,645$ 73 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 Landfill Closure / Post-Closure Care Costs 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, 2014, is $7,316,291, which is based on 47.2% usage (filled) of the landfill and is included in accrued liabilities within the Sanitation Fund. It is estimated that an additional amount of approximately $8,184,325 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, 2025. The estimated total current cost of the landfill closure and post-closure care costs at June 30, 2014, was determined by a licensed professional engineer and approximated at $15,500,616. 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, 2014. 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, 2014, the Sanitation Fund had $12,405,214 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 - Landfill Closure Post-closure Care Costs Landfill Closure Post-closure care activity for the year ended June 30, 2014, was as follows: Due Within July 1, 2013 Issues Retirements June 30, 2014 One Year Business-type activities: $ 6,404,915 $ $ 911,376 $ 7,316,291 - $ 74 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 Other Post Employment Benefits Changes in Long-Term Liabilities - Other Post Employment Benefits Net OPEB Obligation July 1, 2013 Current Year June 30, 2014 Governmental activities: $ 2,362,257 $ 273,022 $ 2,635,279 Business-type activities: $ 943,369 $ 35,800 $ 979,169 The City implemented GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits other Than Pensions during the year ended June 30, 2009. Plan Description: The City operates one self-funded medical and dental plan for all employees, which is offered to current and retired employees and their dependents. 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. Funding Policy: The plan member’s contribution requirements are established and may be amended by the City. The City currently finances the benefit plans on a pay-as-you-go basis. For governmental activities, this liability is expected to be liquidated by the General Fund. 75 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 Annual OPEB Cost and Net OPEB Obligation: The City’s annual OPEB cost is calculated based on the annual required contribution (ARC) of the City, an amount actuarially determined in accordance with GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years. The following table shows the components of the City’s annual OPEB cost for the year ended June 30, 2014, the amount actually contributed to the plans, and changes in the City’s net OPEB obligation: Annual required contribution $ 643,988 Interest on net OPEB obligation 115,697 Adjustment to annual required contribution (110,188) Annual OPEB costs 649,497 Contributions made (340,674) Increase in net OPEB obligation 308,823 Net OPEB obligation beginning of year 3,305,626 Net OPEB obligation end of year $3,614,449 For calculation of the net OPEB obligation, the actuary has set the transition day as July 1, 2008. The end of year net OPEB obligation was calculated by the actuary as the cumulative difference between the actuarially determined funding requirements and the actual contributions for the year ended June 30, 2014. The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plans and the net OPEB obligation as of June 30, 2014 are summarized as follows: Percentage of Annual Annual OPEB Cost Net OPEB Year Ended OPEB Cost Contributed from City Obligation June 30, 2012 $ 600,965 28.5% $2,686,798 June 30, 2013 $ 648,466 4.6% $3,305,626 June 30, 2014 $ 649,497 52.5% $3,614,449 Funded Status and Funding Progress: As of July 1, 2012, the most recent actuarial valuation date for the period July 1, 2013 through June 30, 2014, the actuarial accrued liability was $7,163,715, with no actuarial value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $7,163,715. The covered payroll (annual payroll of active employees covered by the plans) was $34,992,423 and the ratio of the UAAL to covered payroll was 20.5%. As of June 30, 2014, there were no trust fund assets. Actuarial Methods and Assumptions: Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Examples include assumption about future employments, mortality, and the health care cost trend. Actuarially determined amounts are subject to continual review as actual results are compared with past expectations and new estimates are made about the future. Actuarial calculations of the OPEB plan reflect a long-term perspective. 76 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 The required schedule of funding progress, presented as required supplementary information in the section following the Notes to Financial Statements, will present multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. As of the July 1, 2012 actuarial valuation date, the actuarial cost method used is the entry-age normal method. The actuarial assumption includes a 3.5% discount rate and an inflation rate of 3% per annum. The projected annual medical trend rate is 8.5%. The ultimate medical trend rate is 5.0%. The medical trend rate is decreased to 8.0% for year two and then reduced by 0.5% each year until reaching the 5.0% ultimate trend rate. The projected annual dental trend rate is 5.0%. The ultimate dental trend rate is 4%. The dental trend rate is decreased to 4.75% for year two and then reduced by 0.25% each year until reaching the 4% ultimate trend rate. Mortality rates for active employees are from the RP-2000 Employee Table (Male and Female) Projected to 2013 (Projection Scall AA). For retirees, mortality rates are from the RP-2000 Healthy Annuitant Table (Male and Female) Projected to 2013 (Projection Scale AA). Annual retirement and termination probabilities were developed from the retirement probabilities from the MFPRSI and IPERS pension plan turnover tables, adjusted to be consistent with expected first fiscal year retirements. Projected claim costs of the health and dental plans are $821.13 per month. The salary increase rate was assumed to be 3.5% per year. The UAAL is being amortized as a level percentage of projected payroll expenses over 30 years on an open basis. 8. Short Term Debt During FY14, the City entered into additional multiple short term loans totaling $2,813,100 and repaid multiple short term loans totaling $1,408,000. The outstanding loans mature one year from the date of the loan and bear interest rates ranging from 2% to 3.25%. The loans were used to fund the acquisition and rehabilitation of single family homes as part of the UniverCity Neighborhood Partnership Program (UniverCity). UniverCity is a cooperative effort of the City of Iowa City and the University of Iowa dedicated to ensuring that the University of Iowa Campus and surrounding neighborhoods remain vital, safe, affordable, and attractive places to live and work for both renters and homeowners. The short term loans have been repaid and will be repaid with the proceeds from the sale of the rehabilitated homes. Changes in Short-Term Liabilities - Notes Payable Notes Payable activity for the year ended June 30, 2014, was as follows: Due Within July 1, 2013 Issues Retirements June 30, 2014 One Year Governmental activities: $ 538,000 2,813,100$ 1,408,000$ 1,943,100$ 1,943,100$ 77 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 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. • Unassigned fund balance is the residual classification for the General Fund. 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. 78 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 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, 2014 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, a $500,000 self-insured retention per occurrence on liability, and a $500,000 self-insured retention on workers’ compensation losses. The liability insurance provides coverage for claims in excess of the aforementioned self-insured retention up to a maximum of $21,000,000 annual aggregate of losses paid. Settled claims have not exceeded this commercial coverage in any of the past twenty five fiscal years. The operating funds pay annual premiums to the Loss Reserve Fund. Accumulated monies in the Loss Reserve Fund are available to cover the self-insured retention amounts and any uninsured losses. Components of Fund Balance Community Other Development Shared OtherEmployee Block Revenue and Other Debt Governmental General Benefits Grant Grants Construction Service Funds Total Nonspendable: Perpetual Care Principal 69,000$ -$ -$ -$ -$ -$ -$ 69,000$ Total Nonspendable 69,000 - - - - - - 69,000 Restricted for: Public Safety 528,507 - - - - - - 528,507 Local Option Sales Tax 25,252,557 - - - - - - 25,252,557 Debt Service - - - - - 6,872,181 - 6,872,181 GO Bond Projects 705,857 - - - 6,853,671 - 11,138,247 18,697,775 State Funding - - - 4,517,082 - - - 4,517,082 Public Safety Employee Benefits - 1,713,207 - - - - - 1,713,207 Other Restricted 46,562 - - - - - 190,633 237,195 Total Restricted 26,533,483 1,713,207 - 4,517,082 6,853,671 6,872,181 11,328,880 57,818,504 Assigned to: Library Programs 653,297 - - - - - - 653,297 Senior Center Programs 35,255 - - - - - - 35,255 Emergency Fund 1,656,058 - - - - - - 1,656,058 Replacement and Acquisition Reserves 979,431 - - - - - - 979,431 Other Assigned 75,560 - - - - - - 75,560 Total Assigned 3,399,601 - - - - - - 3,399,601 Unassigned:17,906,804 - (9,543) - - - (108) 17,897,153 Total Fund Balances 47,908,888$ 1,713,207$ (9,543)$ 4,517,082$ 6,853,671$ 6,872,181$ 11,328,772$ 79,184,258$ 79 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 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, 2014 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, 2014 and 2013 are as follows: Current-Year Beginning-of- Claims and Balance at Fiscal-Year Changes in Claim Fiscal Liability Estimates Payments Year-End 2012 – 2013 $ 1,184,000 $ 1,616,000 $ 1,177,000 $ 1,623,000 2013 – 2014 1,623,000 2,826,000 2,033,000 2,416,000 Also, the City is partially self-insured, through stop-loss insurance, for employee health care coverage, which is available to all of its permanent employees. This insurance provides stop-loss coverage for claims in excess of $125,000 per employee with an aggregate stop-loss of $8,264,321. 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, 2014 and 2013 are as follows: Current-Year Beginning-of- Claims and Balance at Fiscal-Year Changes in Claim Fiscal Liability Estimates Payments Year-End 2012 – 2013 $ 716,000 $ 5,480,000 $ 5,687,000 $ 509,000 2013 – 2014 509,000 7,292,000 7,220,000 581,000 80 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 11. Commitments and Contingencies The total outstanding contractual commitments as of June 30, 2014 are as follows: The total significant encumbrances as of June 30, 2014 are as follows: Project Amount Bridge, street and traffic Paving and bridge construction, control construction engineering design and consulting 2,992,475$ Other construction Public works, culture & recreation, Economic Dev, Fire & Police, construction 6,726,463 Wastewater Sewer construction and south plant expansion 486,117 Water Water main construction 23,024 Airport Runway grading and paving 183,222 10,411,301$ Fund Project Amount Other Construction Financial System, fire equipment and public works radio system 568,775 $ 568,775 $ Fund 81 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 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. Pension and Retirement Systems Municipal Fire and Police Retirement System of Iowa The City is a participating employer in the Municipal Fire and Police Retirement System of Iowa (MFPRSI or the Plan), which is a cost-sharing multiple-employer defined benefit public police and fire employees retirement system. All fire fighters and police officers appointed under civil service participate in the Plan. The Plan provides retirement, disability, and death benefits that are established under state statute. The Plan issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to Municipal Fire and Police Retirement System of Iowa, 7155 Lake Drive Suite 201, West Des Moines, Iowa 50266 or the report may be obtained from website www.mfprsi.org under the publications link. A member may retire at age 55 with 22 years of employment, and receive full benefits that are equal to 66% of the member’s average final compensation. Additionally, members retiring with more than 22 years of service will receive an additional 2% of the member’s average final compensation for up to 8 years of additional service. Other benefits are also calculated at varying percentages of the average final compensation. Benefits vest after four years of service. Member contribution rates are established by state statute. For the fiscal year ended June 30, 2014, members contributed 9.40%. The City’s contribution rate is based upon an actuarially determined normal contribution rate. The normal contribution rate is provided by state statute to be the actuarial liabilities of the plan less current plan assets, the total then being divided by 1% of the actuarially determined present value of prospective future compensation of all members, further reduced by member contributions. Legislatively appropriated contributions from the state to the plan may further reduce the City’s contribution rate. However, the City’s contribution rate may not be less than 17% of earnable compensation. The City was required to contribute 30.12% of earnable compensation of each member in FY 2014, 26.12% of earnable compensation in FY 2013, and 24.76% of earnable compensation in FY 2012. The contributions paid by the City for the years ended June 30, 2012, 2013, and 2014, were $2,232,637, $2,428,631, and $2,920,967 respectively, and was equal to the required contributions for each year. 82 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 Iowa Public Employees Retirement System The City contributes to the Iowa Public Employees Retirement System (IPERS), which is a cost-sharing multiple-employer defined benefit pension plan administered by the State of Iowa. IPERS provides retirement and death benefits, which are established by State statute to plan members and beneficiaries. IPERS issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to IPERS, P.O. Box 9117, Des Moines, Iowa 50306-9117. All employees eighteen or older, except temporary employees of six months or less of employment duration, who do not participate in any other public retirement system in the state are eligible and must participate in IPERS. The pension plan provides retirement and death benefits that are established by state statute. Generally, a member may retire at the age of 65, or any time after age 62 and 20 years or more of service, or when age plus years of service equals or exceeds 88, and receive unreduced (for age) benefits. Members may also retire at the age of 55 or more at reduced benefits. Benefits vest after seven years of service or after attaining the age of 55. Full benefits are equal to 60% of the average of the highest five years of covered wages times years of service divided by 30. Plan members are required to contribute 5.95% of their annual covered salary and the City is required to contribute 8.93% of annual covered payroll. Contribution requirements are established by state statute. The City’s contributions to IPERS for the years ended June 30, 2012, 2013, and 2014, were $2,245,326, $2,423,438, and $2,552,602 respectively, and were equal to the required contributions for each year. 14. Subsequent events On November 12, 2014, the City of Iowa City placed funds in escrow to defease whole maturities of Parking System Revenue Refunding Capital Loan Notes, Series 2009F, dated November 23, 2009. These Capital Loan Notes have stated maturity dates of July 1, 2015 through July 1, 2024 totaling $6,605,000 in principal amount. 15. New Governmental Accounting Standards Board (GASB) Standards The Governmental Accounting Standards Board (GASB) has issued three statements not yet implemented by the City. The statements, which might impact the City’s financial statements, are as follows: Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, issued June 2012, will be effective for the fiscal year ending June 30, 2015. The objective of this Statement is to improve information provided by state and local governmental employers about financial support for pensions that is provided by other entities. Statement No. 69, Government Combinations and Disposals of Government Operations, issued January 2013, will be effective for the fiscal year ending June 30, 2015. The objective of this statement is to improve financial reporting by addressing accounting and financial reporting for government combinations and disposals of government operations. The term government combinations is used in this Statement to refer to a variety of arrangements including mergers and acquisitions. 83 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2014 Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68, issued November 2013, will be effective for the fiscal year ending June 30, 2015. The objective of this statement is to address an issue regarding application of the transition provisions of Statement No. 68, Accounting and Financial Reporting for Pensions. The City’s management has not yet determined the effect these statements will have on the City’s financial statements. 84 85 Governmental Fund Types Enterprise Fund Actual Budgetary Types Actual Total Actual Basis Budgetary Basis Budgetary Basis Revenues: Property taxes 50,046$ -$ 50,046$ Delinquent property taxes 5 - 5 Tax increment financing taxes 435 - 435 Other city taxes 3,309 - 3,309 Licenses and permits 1,660 7 1,667 Intergovernmental 18,043 25,253 43,296 Charges for services 4,292 38,223 42,515 Use of money and property 851 1,167 2,018 Miscellaneous 2,938 522 3,460 Total revenues 81,579 65,172 146,751 Expenditures/Expenses: Public safety 21,555 - 21,555 Public works 6,349 - 6,349 Health and social services 264 - 264 Culture and recreation 12,665 - 12,665 Community and economic development 10,979 - 10,979 General government 7,039 - 7,039 Debt service 13,160 - 13,160 Capital outlay 17,103 - 17,103 Business-type - 65,444 65,444 Total expenditures/expenses 89,114 65,444 154,558 Excess (deficiency) of revenues over (under) expenditures/expenses (7,535) (272) (7,807) Other financing sources and uses, net 22,538 3,092 25,630 Net change in fund balances 15,003 2,820 17,823 Balances, beginning of year 66,349 86,134 152,483 Balances, end of year 81,352 88,954 170,306 See Note to Required Supplementary Information. CITY OF IOWA CITY BUDGETARY COMPARISON SCHEDULE BUDGET AND ACTUAL - ALL GOVERNMENTAL FUNDS AND ENTERPRISE FUNDS REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2014 (dollar amounts expressed in thousands) BUDGETARY BASIS 86 Final to Actual Variance - Positive Original Final (Negative) 50,307$ 50,307$ (261)$ - - 5 454 454 (19) 5,007 4,744 (1,435) 1,351 1,352 315 42,419 64,823 (21,527) 40,304 45,331 (2,816) 1,661 (3,061) 5,079 5,175 5,175 (1,715) 146,678 169,125 (22,374) 21,784 22,400 845 7,484 7,561 1,212 265 265 1 13,128 13,495 830 10,700 13,351 2,372 7,790 7,758 719 13,497 13,497 337 18,864 48,272 31,169 75,501 90,792 25,348 169,013 217,391 62,833 (22,335) (48,266) 40,459 20,262 32,951 (7,321) (2,073) (15,315) 33,138 98,087 152,483 96,014 137,168 Budgeted Amounts 87 Accrual Modified Accrual Budget Basis Adjustments Basis Revenues 81,579$ 282$ 81,861$ Expenditures 89,114 (854) 88,260 Net (7,535) 1,136 (6,399) Other financing sources (uses)22,538 (3,833) 18,705 Beginning Fund Balances 66,349 530 66,879 Ending Fund Balances 81,352$ (2,167)$ 79,185$ Accrual Accrual Budget Basis Adjustments Basis Revenues 65,172$ 1,257$ 66,429$ Expenditures 65,444 (14,375) 51,069 Net (272) 15,632 15,360 Other financing sources (uses)3,092 (9,766) (6,674) Beginning Fund Balances 86,134 249,547 335,681 Ending Fund Balances 88,954$ 255,413$ 344,367$ See Note to Required Supplementary Information. CITY OF IOWA CITY Governmental Fund Types Enterprise Fund Types BUDGETARY COMPARISON SCHEDULE BUDGET TO GAAP RECONCILIATION REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2014 (dollar amounts expressed in thousands) 88 City of Iowa City, Iowa Note to Required Supplementary Information - Budgetary Reporting For the Year Ended June 30, 2014 In accordance with 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 agency funds. The budget basis of accounting is cash basis. The annual budget may be amended during the year utilizing similar statutorily prescribed procedures. Formal and legal budgetary control is based upon nine major classes of expenditures known as functions, not by fund or fund type. These nine functions are: public safety, public works, health and social services, culture and recreation, community and economic development, general government, debt service, capital outlay and business-type. The legal level control is at the aggregated function level, not at the fund or fund type level. During the year, budget amendments increased budgeted revenues by $22,447,000 and expenditures by $48,378,000. 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. 89 City of Iowa City, Iowa Required Supplementary Information – Schedule of Funding Progress for Health and Dental Plans For the Year Ended June 30, 2014 Actuarial Valuation Date Fiscal Year Actuarial Value of Assets Actuarial Accrued Liability (AAL) Unfunded AAL (UAAL) Funded Ratio Covered Payroll UAAL As a Percentage of Covered Payroll July 1, 2008 June 30, 2009 $ - $ 15,235,196 $ 15,235,196 0.00% $ 29,842,842 51.1% July 1, 2010 June 30, 2011 $ - $ 6,893,438 $ 6,893,438 0.00% $ 31,505,702 21.9% July 1, 2012 June 30, 2013 $ - $ 7,163,715 $ 7,163,715 0.00% $ 34,992,423 20.5% 90 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. Metropolitan Planning Organization of Johnson County (formerly Johnson County Council of Governments) Fund – accounts for the financial activities of the metropolitan/rural cooperative planning organization. CAPITAL PROJECT FUND Capital Projects Funds are utilized to account for all resources used in the acquisition and construction of capital facilities and other major fixed assets, with the exception of those that are financed by proprietary fund monies. The fund in this category is as follows: Bridge, Street, and Traffic Control Construction Fund – accounts for the construction or replacement of infrastructure fixed assets, such as streets, bridges, dams, sidewalks, and lighting systems. 91 Capital Projects Metropolitan Bridge, Planning Street, and Organization Traffic Economic of Johnson Control Development County Construction TotalAssets Equity in pooled cash and investments 19$ 116$ 891$ 1,026$ Receivables: Property tax 284 - - 284 Interest - - 14 14 Due from other governments - 64 1,683 1,747 Assets held for resale - - 165 165 Restricted assets: Equity in pooled cash and investments - - 9,700 9,700 Total assets 303$ 180$ 12,453$ 12,936$ Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable 2$ -$ 97$ 99$ Contracts payable - - 539 539 Accrued liabilities - 9 11 20 Liabilities payable from restricted assets: Deposits - - 1 1 Total liabilities 2 9 648 659 Deferred inflows of resources: Unavailable revenues: Suceeding year property taxes 281 - - 281 Grants - - 531 531 Other - - 136 136 Total deferred inflows of resources 281 - 667 948 Fund balances: Restricted 20 171 11,138 11,329 Total fund balances 20 171 11,138 11,329 Total liabilities, deferred inflows of resources and fund balances 303$ 180$ 12,453$ 12,936$ Special Revenue CITY OF IOWA CITY COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS June 30, 2014 (amounts expressed in thousands) 92 Capital Projects Metropolitan Bridge, Planning Street, and Organization Traffic Economic of Johnson Control Development County Construction Total Revenues Property taxes 711$ -$ -$ 711$ Intergovernmental - 355 2,177 2,532 Charges for services - - 58 58 Use of money and property - - 37 37 Miscellaneous - 17 56 73 Total revenues 711 372 2,328 3,411 Expenditures Current: Public works - - 1,799 1,799 Community and economic development 423 674 - 1,097 Capital outlay - - 5,523 5,523 Total expenditures 423 674 7,322 8,419 Excess (deficiency) of revenues over (under) expenditures 288 (302) (4,994) (5,008) Other Financing Sources (Uses) Issuance of debt - - 8,132 8,132 Discount on issuance of bonds - - 159 159 Transfers in - 343 1,307 1,650 Transfers out (272) - (411) (683) Total other financing sources and (uses)(272) 343 9,187 9,258 Net change in fund balances 16 41 4,193 4,250 Fund Balances, Beginning 4 130 6,945 7,079 Fund Balances, Ending 20$ 171$ 11,138$ 11,329$ 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, 2014 (amounts expressed in thousands) 93 94 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. Stormwater Fund – accounts for the operation and maintenance of the stormwater operation. Cable Television Fund – accounts for the operation and maintenance of the Broadband Telecommunications Commission that oversees the franchise agreement with the cable television company, including production and broadcasting on the government television channels. 95 Cable Airport Stormwater Television Total Assets Current assets: Equity in pooled cash and investments -$ 1,225$ 1,397$ 2,622$ Receivables: Accounts and unbilled usage - 123 170 293 Interest - 1 2 3 Due from other governments 964 19 - 983 Total current assets 964 1,368 1,569 3,901 Noncurrent assets: Restricted assets: Equity in pooled cash and investments 109 - 118 227 Other post employment benefits asset 6 - - 6 Capital assets: Land 12,217 2,264 - 14,481 Buildings 5,157 - 731 5,888 Improvements other than buildings 409 - - 409 Machinery and equipment 281 260 110 651 Infrastructure 14,029 41,999 - 56,028 Accumulated depreciation (5,798) (10,700) (419) (16,917) Construction in progress 3,201 1,955 - 5,156 Total noncurrent assets 29,611 35,778 540 65,929 Total assets 30,575 37,146 2,109 69,830 Liabilities Current liabilities: Accounts payable 79 23 119 221 Contracts payable 261 60 - 321 Accrued liabilities 2 5 9 16 Employee vested benefits 3 - 13 16 Total current liabilities 345 88 141 574 Noncurrent liabilities: Liabilities payable from restricted assets: Deposits 9 - - 9 Advances from other funds 935 - - 935 Employee vested benefits 2 - 10 12 Other post employment benefits obligation - 7 12 19 Total noncurrent liabilities 946 7 22 975 Total liabilities 1,291 95 163 1,549 Net Position Net investment in capital assets 29,496 35,778 422 65,696 Restricted for future improvements 100 - - 100 Unrestricted (312) 1,273 1,524 2,485 Total net position 29,284$ 37,051$ 1,946$ 68,281$ CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF NET POSITION NONMAJOR ENTERPRISE FUNDS June 30, 2014 (amounts expressed in thousands) 96 Cable Airport Stormwater Television Total Operating Revenues: Charges for services 328$ 1,093$ 773$ 2,194$ Miscellaneous 28 1 - 29 Total operating revenues 356 1,094 773 2,223 Operating Expenses: Personal services 72 153 497 722 Commodities 40 100 6 146 Services and charges 319 245 239 803 431 498 742 1,671 Depreciation 780 805 33 1,618 Total operating expenses 1,211 1,303 775 3,289 Operating loss (855) (209) (2) (1,066) Nonoperating Revenues (Expenses): Gain (loss) on disposal of capital assets 675 - - 675 Operating grants 56 13 - 69 Interest income - 3 3 6 Total nonoperating revenues (expenses)731 16 3 750 Income (loss) before capital contributions and transfers (124) (193) 1 (316) Capital contributions 5,214 2,384 - 7,598 Transfers in 72 374 - 446 Transfers out - (90) (235) (325) . Change in net position 5,162 2,475 (234) 7,403 Net Position, Beginning 24,122 34,576 2,180 60,878 Net Position, Ending 29,284$ 37,051$ 1,946$ 68,281$ (amounts expressed in thousands) NONMAJOR ENTERPRISE FUNDS AND CHANGES IN FUND NET POSITION COMBINING STATEMENT OF REVENUES, EXPENSES, CITY OF IOWA CITY, IOWA For the Year Ended June 30, 2014 97 Cable Airport Stormwater Television Total Cash Flows From Operating Activities Receipts from customers and users 356$ 1,072$ 784$ 2,212$ Payments to suppliers (376) (343) (243) (962) Payments to employees (69) (150) (503) (722) Net cash flows from (used for) operating activities (89) 579 38 528 Cash Flows From Noncapital Financing Activities Operating grants received 11 7 - 18 Transfers from other funds 72 374 - 446 Transfers to other funds - (90) (235) (325) Net cash flows from (used for) noncapital financing activities 158 291 (235) 214 Cash Flows From Capital and Related Financing Activities Capital grants received 5,072 - - 5,072 Acquisition and construction of property and equipment (6,386) (1,411) - (7,797) Proceeds from sale of property 675 - - 675 Net cash flows used for capital and related financing activities (639) (1,411) - (2,050) Cash Flows From Investing Activities Interest on investments - 3 3 6 Net decrease in cash and cash equivalents (570) (538) (194) (1,302) Cash and Cash Equivalents, Beginning 679 1,763 1,709 4,151 Cash and Cash Equivalents, Ending 109$ 1,225$ 1,515$ 2,849$ Reconciliation of operating loss to net cash flows from (used for) operating activities: Operating loss (855)$ (209)$ (2)$ (1,066)$ Adjustments to reconcile operating loss to net cash flows from operating activities: Depreciation expense 780 805 33 1,618 Changes in: Receivables: Accounts and unbilled usage - (23) 11 (12) Accounts payable (17) 2 2 (13) Accrued liabilities 1 2 (1) 2 Employee vested benefits 1 - (7) (6) Other post employment benefits asset/obligation 1 1 2 4 Total adjustments 766 788 40 1,594 Net cash flows from (used for) operating activities (89)$ 579$ 38$ 528$ Noncash Investing, Capital, and Financing Activities: Contributions of capital assets from government and others -$ 2,384$ -$ 2,384$ CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS For the Year Ended June 30, 2014 (amounts expressed in thousands) 98 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 and equipment and vehicle rental to other City departments from a central vehicle pool. Central Services Fund – accounts for the support services of photocopying, paper supplies, mail, overnight shipping, and two-way radios 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. 99 Equipment Central Loss Information Maintenance Services Reserve Technology Total Assets Current assets: Equity in pooled cash and investments 9,986$ 736$ 13,841$ 2,871$ 27,434$ Receivables: Accounts and unbilled usage - - 22 - 22 Interest 15 1 20 4 40 Due from other governments 49 - - - 49 Inventories 597 - - - 597 Total current assets 10,647 737 13,883 2,875 28,142 Noncurrent assets: Other post employment benefits asset - - 23 - 23 Capital assets: Land 45 - - - 45 Buildings 578 - - 243 821 Improvements other than buildings 50 - - - 50 Machinery and equipment 15,204 812 24 2,013 18,053 Infrastructure - 31 - 1,746 1,777 Accumulated depreciation (10,948) (222) (18) (2,330) (13,518) Construction in progress - - - 7 7 Total noncurrent assets 4,929 621 29 1,679 7,258 Total assets 15,576 1,358 13,912 4,554 35,400 Liabilities Current liabilities: Accounts payable 159 21 195 63 438 Accrued liabilities 21 1 3,001 22 3,045 Employee vested benefits 36 1 3 22 62 Total current liabilities 216 23 3,199 107 3,545 Noncurrent liabilities: Employee vested benefits 28 1 3 18 50 Other post employment benefits obligation - 5 - 68 73 Total noncurrent liabilities 28 6 3 86 123 Total liabilities 244 29 3,202 193 3,668 Net Position Net investment in capital assets 4,929 621 6 1,679 7,235 Unrestricted 10,403 708 10,704 2,682 24,497 Total net position 15,332$ 1,329$ 10,710$ 4,361$ 31,732$ (amounts expressed in thousands) CITY OF IOWA CITY COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS June 30, 2014 100 Equipment Central Loss Information Maintenance Services Reserve Technology Total Operating Revenues: Charges for services 6,024$ 235$ 9,022$ 1,727$ 17,008$ Miscellaneous - - 1 - 1 Total operating revenues 6,024 235 9,023 1,727 17,009 Operating Expenses: Personal services 935 29 181 1,010 2,155 Commodities 2,514 66 10 310 2,900 Services and charges 600 175 9,592 483 10,850 4,049 270 9,783 1,803 15,905 Depreciation 1,288 23 4 236 1,551 Total operating expenses 5,337 293 9,787 2,039 17,456 Operating income (loss)687 (58) (764) (312) (447) Nonoperating Revenues: Gain on disposal of capital assets 50 - - 9 59 Interest income 24 2 32 7 65 Total nonoperating revenues 74 2 32 16 124 Income (loss) before transfers 761 (56) (732) (296) (323) Transfers in 10 164 - 435 609 Transfers out (202) - - (2) (204) Change in net position 569 108 (732) 137 82 Net Position, Beginning 14,763 1,221 11,442 4,224 31,650 Net Position, Ending 15,332$ 1,329$ 10,710$ 4,361$ 31,732$ (amounts expressed in thousands) CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF REVENUES, EXPENSES, INTERNAL SERVICE FUNDS For the Year Ended June 30, 2014 AND CHANGES IN FUND NET POSITION 101 Equipment Central Loss Information Maintenance Services Reserve Technology Total Cash Flows From Operating Activities Receipts from customers and users 6,075$ 235$ 10,191$ 1,727$ 18,228$ Payments to suppliers (3,344) (221) (9,562) (756) (13,883) Payments to employees (926) (28) 686 (1,015) (1,283) Net cash flows from (used for) operating activities 1,805 (14) 1,315 (44) 3,062 Cash Flows From Noncapital Financing Activities Transfers from other funds 10 164 - 435 609 Operating transfers to other funds (202) - - (2) (204) Net cash flows from (used for) noncapital financing activities (192) 164 - 434 406 Cash Flows From Capital and Related Financing Activities Acquisition and construction of property and equipment (537) (178) - (376) (1,091) Proceeds from sale of property 54 - - 9 63 Net cash flows from (used for) capital and related financing activities (483) (178) - (367) (1,028) Cash Flows From Investing Activities Interest on investments 17 2 23 6 48 Net increase in cash and cash equivalents 1,147 (26) 1,338 29 2,488 Cash and Cash Equivalents, Beginning 8,839 762 12,503 2,842 24,946 Cash and Cash Equivalents, Ending 9,986$ 736$ 13,841$ 2,871$ 27,434$ Reconciliation of operating income (loss) to net cash flows from (used for) operating activities: Operating income (loss)687$ (58)$ (764)$ (312)$ (447)$ Adjustments to reconcile operating income (loss) to net cash flows from (used for) operating activities: Depreciation expense 1,288 23 4 236 1,551 Changes in: Receivables: Accounts and unbilled usage - - 1,168 - 1,168 Due from other governments 51 - - - 51 Inventories 62 - - - 62 Accounts payable (292) 20 40 37 (195) Accrued liabilities 6 - 866 3 875 Employee vested benefits 9 - - (11) (2) Other post employment benefits asset/obligation (6) 1 1 3 (1) Total adjustments 1,118 44 2,079 268 3,509 Net cash flows from (used for) operating activities 1,805$ (14)$ 1,315$ (44)$ 3,062$ (amounts expressed in thousands) CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended June 30, 2014 102 AGENCY FUND The Agency Fund accounts for assets held by the City in a trustee or custodial capacity for other entities, such as individuals, private organizations, or other governmental units. The fund in this category is: Project Green Fund – accounts for donations that are received to plant and develop yards and lawns, both public and private, within Iowa City. 103 Balance Balance July 1, 2013 Increases Decreases June 30, 2014 Project Green Assets Equity in pooled cash and investments 145$ 80$ 69$ 156$ Total assets 145$ 80$ 69$ 156$ Liabilities Accounts payable 6$ 5$ 6$ 5$ Due to agency 139 75 63 151 Total liabilities 145$ 80$ 69$ 156$ (amounts expressed in thousands) CITY OF IOWA CITY STATEMENT OF CHANGES IN ASSETS AND LIABILITIES For the Year Ended June 30, 2014 AGENCY FUNDS 104 Statistical Section This part of the City of Iowa City’s comprehensive annual 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 107 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 112 These schedules contain information to help the reader assess the government’s most significant local revenue source, the property tax. Debt Capacity 122 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 132 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 134 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 comprehensive annual financial report for the relevant year. The city implemented GASB 34 in FY03; schedules presenting government-wide information include information beginning in that year. 105 106 2005 2006 2007 2008 2009 2010 2011 2012 20131 2014 Governmental activities Net investment in capital assets 84,768 $ 95,227 $ 101,027 $ 104,833 $ 100,741 $ 111,703 $ 123,935 $ 135,998 $ 133,989 $ 138,482 $ Restricted 16,973 6,852 8,181 23,741 26,586 25,588 31,179 35,021 22,867 39,958 Unrestricted 3,793 10,827 11,043 1,119 17,938 32,478 36,862 38,906 50,744 39,758 Total governmental activities net position 105,534 $ 112,906 $ 120,251 $ 129,693 $ 145,265 $ 169,769 $ 191,976 $ 209,925 $ 207,600 $ 218,198 $ Business-type activities Net investment in capital assets 150,797 $ 155,346 $ 172,518 $ 156,075 $ 162,211 $ 172,601 $ 186,177 $ 195,073 $ 253,617 $ 264,727 $ Restricted 15,038 15,682 23,893 21,320 19,159 17,588 20,658 20,176 19,033 19,438 Unrestricted 40,780 42,988 33,695 60,225 63,842 65,725 61,032 58,850 74,370 71,542 Total business-type activites net position 206,615 $ 214,016 $ 230,106 $ 237,620 $ 245,212 $ 255,914$ 267,867 $ 274,099 $ 347,020 $ 355,707 $ Primary government Net investment in capital assets 235,565 $ 250,573 $ 273,545 $ 260,908 $ 262,952 $ 284,304 $ 310,112 $ 331,071 $ 387,606 $ 403,209 $ Restricted 32,011 22,534 32,074 45,061 45,025 43,176 51,837 55,197 41,900 59,396 Unrestricted 44,573 53,815 44,738 61,344 82,500 98,203 97,894 97,756 125,114 111,300 Total primary government net position 312,149 $ 326,922 $ 350,357 $ 367,313 $ 390,477 $ 425,683 $ 459,843 $ 484,024 $ 554,620 $ 573,905 $ 1 The City of Iowa City reclassified the Mass Transportation Fund from the General fund to an Enterprise Fund effective the fiscal year ending June 30, 2013. CITY OF IOWA CITY, IOWA NET POSITION BY COMPONENT Last Ten Fiscal Years (Accrual basis of accounting) (amounts expressed in thousands) 1 0 7 2005 2006 2007 2008 2009 2010 2011 2012 20131 2014 Expenses Governmental activities: Public safety 15,286$ 16,690$ 16,694$ 20,504$ 20,730$ 19,955$ 18,867$ 21,186$ 20,989$ 22,721$ Public works 11,521 12,723 13,560 13,727 15,177 16,806 19,145 17,556 10,240 8,258 Culture and recreation 11,341 11,458 11,970 13,460 9,574 12,238 10,811 13,107 14,481 16,586 Community and economic development 6,960 6,264 4,680 1,850 8,726 16,913 16,501 16,305 10,596 10,059 General government 6,500 6,892 7,258 7,433 7,600 7,549 7,356 7,591 7,513 7,687 Debt service 3,602 3,404 3,459 3,517 3,264 2,970 2,841 2,400 2,237 1,797 Total governmental activities expenses 55,210 57,431 57,621 60,491 65,071 76,431 75,521 78,145 66,056 67,108 Business-type activities: Wastewater 12,214 11,710 11,537 11,757 11,925 11,274 10,971 11,069 10,464 21,139 Water 8,313 9,324 8,823 8,804 9,185 8,309 8,523 8,781 9,074 8,723 Sanitation 6,031 6,101 6,684 6,868 7,296 7,705 7,461 8,315 7,279 8,402 Housing authority 7,466 7,026 6,884 7,374 7,238 7,838 7,448 7,911 7,658 7,703 Parking 3,989 3,884 4,403 3,913 4,489 4,536 4,135 4,167 4,579 4,093 Airport 520 512 418 560 693 724 1,049 1,127 1,086 1,209 Stormwater 1,452 817 932 1,072 1,223 1,187 1,418 1,304 1,318 1,314 Cable television 607 576 525 598 633 645 638 689 692 781 Transit - - - - - - - - 6,998 7,795 Total business-type activities expenses 40,592 39,950 40,206 40,946 42,682 42,218 41,643 43,363 49,148 61,159 Total primary government expenses 95,802$ 97,381$ 97,827$ 101,437$ 107,753$ 118,649$ 117,164$ 121,508$ 115,204$ 128,267$ Program Revenues Governmental activities: Charges for services Public safety 2,928$ 2,971$ 3,088$ 3,019$ 2,968$ 2,980$ 3,279$ 3,401$ 4,098$ 3,626$ Public works 1,076 1,062 1,229 1,047 1,392 1,061 1,117 1,112 52 61 Culture and recreation 653 707 712 680 715 773 872 825 775 808 Community and economic development - - - - - - - - - 45 General government 1,482 1,556 1,569 1,633 1,626 2,574 2,931 2,817 2,763 3,030 Operating grants and contributions 2,592 2,937 3,215 3,611 8,185 15,554 13,517 8,682 4,731 3,231 Capital grants and contributions 7,679 3,849 4,283 1,747 3,773 8,291 6,048 6,078 6,876 5,580 Total governmental activities program revenues 16,410 13,082 14,096 11,737 18,659 31,233 27,764 22,915 19,295 16,381 Business-type activities: Charges for services: Wastewater 12,145 12,145 12,535 12,318 12,557 12,637 12,836 12,670 12,832 12,559 Water 8,602 9,012 8,240 8,195 8,107 7,957 8,054 8,419 8,583 8,443 Sanitation 7,154 7,133 7,204 7,853 8,286 8,096 8,259 8,115 8,181 8,467 Housing authority 181 168 132 149 181 180 208 207 205 213 Parking 4,045 3,936 4,704 4,673 5,438 5,377 5,234 4,743 5,043 5,294 Airport 220 264 234 258 248 289 293 306 314 328 Stormwater 592 597 622 616 622 617 641 811 974 1,093 Cable Television 708 718 726 814 788 790 809 824 816 773 Transit1 - - - - - - - - 2,117 2,185 (continued) CITY OF IOWA CITY, IOWA CHANGES IN NET POSITION Last Ten Fiscal Years (Accrual basis of accounting) (amounts expressed in thousands) 1 0 8 2005 2006 2007 2008 2009 2010 2011 2012 20131 2014 Capital grants and contributions: Wastewater 761 773 1,539 577 266 2,115 2,394 3,223 30,181 7,105 Capital grants and contributions: Water 588 606 845 314 132 572 973 977 494 539 Capital grants and contributions: Sanitation - 46 - - - 6 - 2 - - Capital grants and contributions: Airport 283 1,125 1,231 1,580 3,239 3,311 358 1,576 2,452 5,214 Capital grants and contributions: Stormwater 755 468 1,251 302 68 541 140 436 226 711 Capital grants and contributions: Housing authority - - - 17 - 25 11 - - - Capital grants and contributions: Parking - - - 8 - - 269 4 - - Capital grants and contributions: Transit - - - - - - - - 898 243 Operating grants and contributions: Housing authority 7,012 7,414 7,165 6,281 6,668 7,765 7,438 6,782 6,968 6,721 Operating grants and contributions: Water - - - - 15 6 - - 442 6 Operating grants and contributions: Airport - - - - 2 - - - 11 56 Operating grants and contributions: Sanitation - 3 6 - 607 6 10 - 23 27 Operating grants and contributions: Wastewater - - 1 - 1 - - - - 62 Operating grants and contributions: Stormwater - - - - - - - - 13 13 Operating grants and contributions: Transit - - - - - - - - 1,767 2,118 Total business-type activities program revenues 43,046 44,408 46,435 43,955 47,225 50,290 47,927 49,095 82,540 62,170 Total primary government revenues 59,456$ 57,490$ 60,531$ 55,692$ 65,884$ 81,523$ 75,691$ 72,010$ 101,835$ 78,551$ Net (Expense) / Revenues Governmental activities (38,800)$ (44,349)$ (43,525)$ (48,754)$ (46,412)$ (45,198)$ (47,757)$ (55,230)$ (46,761)$ (50,727)$ Business-type activities 2,454 4,458 6,229 3,009 4,543 8,072 6,284 5,732 33,392 1,011 Total primary government net expense (36,346)$ (39,891)$ (37,296)$ (45,745)$ (41,869)$ (37,126)$ (41,473)$ (49,498)$ (13,369)$ (49,716)$ General Revenues and Other Changes in Net Position Governmental activities: General revenues: Property taxes 35,327$ 37,770$ 41,492$ 43,400$ 47,085$ 49,467$ 48,011$ 50,516$ 51,017$ 50,551$ Road use tax 5,269 5,303 5,305 5,432 5,254 5,525 6,068 6,394 6,589 6,745 Local Sales Option tax - - - - - 8,141 8,911 8,644 8,858 466 Other taxes 1,351 1,240 1,412 1,435 1,489 1,535 2,464 2,491 2,609 2,778 Earnings on investments 1,576 2,678 4,045 3,932 3,057 1,766 1,539 1,823 841 973 Miscellaneous 3,994 4,422 3,656 3,516 4,894 3,893 6,230 4,228 4,390 4,353 Gain on sale of assets 95 100 281 (7) - - 761 2,950 1,312 1,651 Transfers 645 208 (5,321) 488 205 (625) (4,020) (3,867) (10,485) (6,192) Total governmental activities 48,257 51,721 50,870 58,196 61,984 69,702 69,964 73,179 65,131 61,325 Business-type activities: General revenues: Earnings on investments 1,771 2,575 3,606 3,279 2,577 1,311 954 813 671 494 Gain on sale of assets 304 185 591 1,260 360 230 314 336 293 725 Miscellaneous 418 391 343 454 317 464 381 484 918 265 Transfers (645) (208) 5,321 (488) (205) 625 4,020 3,867 10,485 6,192 Extraordinary items - - - - - - - (5,000) - - Total business-type activities 1,848 2,943 9,861 4,505 3,049 2,630 5,669 500 12,367 7,676 Total primary government 50,105$ 54,664$ 60,731$ 62,701$ 65,033$ 72,332$ 75,633$ 73,679$ 77,498$ 69,001$ Change in Net Position Governmental activites 9,457$ 7,372$ 7,345$ 9,442$ 15,572$ 24,504$ 22,207$ 17,949$ 18,370$ 10,598$ Business-type activites 4,302 7,401 16,090 7,514 7,592 10,702 11,953 6,232 45,759 8,687 Total primary government 13,759$ 14,773$ 23,435$ 16,956$ 23,164$ 35,206$ 34,160$ 24,181$ 64,129$ 19,285$ 1 The City of Iowa City reclassified the Mass Transportation Fund from the General Fund to an Enterprise Fund effective the fiscal year ending June 30, 2013. CITY OF IOWA CITY, IOWA CHANGES IN NET POSITION (continued) Last Ten Fiscal Years (Accrual basis of accounting) (amounts expressed in thousands) 1 0 9 2005 2006 2007 2008 2009 2010 20111 2012 20132 2014 General Fund Nonspendable -$ -$ -$ -$ -$ -$ 331$ 314$ 69$ 69$ Restricted - - - - - - 16,268 23,779 25,689 26,533 Assigned - - - - - - 3,542 5,191 1,744 3,400 Reserved 362 570 568 446 555 406 - - - - Unassigned - - - - - - 15,931 14,273 17,113 17,907 Unreserved 15,525 16,551 18,528 14,488 15,362 26,101 - - - - Total general fund 15,887$ 17,121$ 19,096$ 14,934$ 15,917$ 26,507$ 36,072$ 43,557$ 44,615$ 47,909$ All other Governmental Funds Restricted -$ -$ -$ -$ -$ -$ 34,889$ 34,853$ 28,108$ 31,285$ Reserved 2,198 1,592 1,984 3,107 5,339 3,903 - - - - Designated for long-term debt 3,067 2,725 4,289 8,691 11,759 13,952 - - - - Unassigned - - - - - - (1,741) (366) (5,844) (9) Unreserved, reported in: Special revenue funds 6,222 3,422 3,366 2,571 (1,852) (1,674) - - - - Capital projects funds 6,143 7,093 7,894 11,118 10,960 8,043 - - - - Total all other governmental funds 17,630$ 14,832$ 17,533$ 25,487$ 26,206$ 24,224$ 33,148$ 34,487$ 22,264$ 31,276$ 1 The City of Iowa City implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions , issued March 2009, effective the fiscal year ending June 30, 2011. This Statement establishes new standards for fund balance classifications based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. 2 The City of Iowa City reclassified the Mass Transportation Fund from the General fund to an Enterprise Fund effective the fiscal year ending June 30, 2013. CITY OF IOWA CITY, IOWA FUND BALANCES, GOVERNMENTAL FUNDS Last Ten Fiscal Years (Modified accrual basis of accounting) (amounts expressed in thousands) 1 1 0 2005 2006 2007 2008 2009 2010 2011 2012 20131 2014 Revenues: Property taxes and assessments 36,677$ 39,011$ 42,905$ 44,835$ 48,572$ 59,143$ 59,387$ 61,649$ 62,483$ 53,797$ Licenses and permits 1,255 1,279 1,404 1,270 1,284 1,211 1,412 1,307 1,784 1,660 Intergovernmental 15,546 14,260 13,455 12,764 19,521 31,404 29,870 21,952 19,941 17,636 Charges for services 3,301 2,227 2,423 2,228 2,498 2,433 2,515 2,614 1,800 1,819 Use of money and property 1,354 2,203 3,378 3,206 2,645 1,599 1,479 1,768 782 909 Miscellaneous 4,121 4,176 3,858 3,977 5,302 4,784 7,749 5,750 6,325 6,040 Total governmental activities revenues 62,254$ 63,156$ 67,423$ 68,280$ 79,822$ 100,574$ 102,412$ 95,040$ 93,115$ 81,861$ Expenditures Current Public safety 14,601$ 15,819$ 16,412$ 18,705$ 18,752$ 19,108$ 18,717$ 20,091$ 20,648$ 21,370$ Public works 9,698 10,351 12,452 12,108 12,405 13,311 14,766 15,462 8,503 8,432 Culture and recreation 9,183 10,122 10,261 10,703 10,849 11,266 12,498 13,075 13,000 13,087 Community and economic development 6,375 4,698 3,445 4,437 8,037 10,520 8,878 8,037 8,219 8,196 General government 6,282 6,510 7,194 7,207 7,300 7,191 7,695 7,553 7,286 7,184 Debt service Principal 9,349 6,099 6,700 7,323 8,418 9,354 10,386 13,294 16,465 13,560 Interest 3,676 3,458 3,464 3,556 3,364 3,064 2,889 2,543 2,339 1,903 Capital projects 13,939 15,153 13,000 11,811 17,096 17,690 21,873 16,006 17,861 14,528 Total expenditures 73,103$ 72,210$ 72,928$ 75,850$ 86,221$ 91,504$ 97,702$ 96,061$ 94,321$ 88,260$ Excess (deficiency) of revenues over (under) expenditures (10,849)$ (9,054)$ (5,505)$ (7,570)$ (6,399)$ 9,070$ 4,710$ (1,021)$ (1,206)$ (6,399)$ Other financing sources (uses): Issuance of long-term debt 7,020$ 7,265$ 8,870$ 9,150$ 30,035$ -$ 16,165$ 9,690$ 2,655$ 19,730$ Issuance of refunding debt ------10,930 - - - Sale of capital assets 406 109 470 111 554 222 845 3,619 1,369 1,684 Insurance Recoveries - - - - - 20 594 53 - - Issuance of note payable 211 - - - - - - - - - Premium (discount) on issuance of bonds 43 29 - 16 552 -394 165 (42) 385 Payment of refunded bonds 0 - - - (23,140) - (11,085) - - - Transfers in 15,776 21,627 21,552 25,413 16,486 16,742 18,658 19,499 25,198 13,040 Transfers out (15,237)(21,540) (20,711) (23,328) (16,386) (17,446) (22,722) (23,181) (35,493) (16,134) Total other financing sources (uses)8,219$ 7,490$ 10,181$ 11,362$ 8,101$ (462)$ 13,779$ 9,845$ (6,313)$ 18,705$ Net change in fund balances (2,630)$ (1,564)$ 4,676$ 3,792$ 1,702$ 8,608$ 18,489$ 8,824$ (7,519)$ 12,306$ Debt service as a percentage of noncapital expenditures 21.5%16.6%17.0%16.6%17.0%15.3%16.2%18.6%24.0%20.7% 1 The City of Iowa City reclassified the Mass Transportation Fund from the General fund to an Enterprise Fund effective the fiscal year ending June 30, 2013. CITY OF IOWA CITY, IOWA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) 1 1 1 Fiscal Local Option Utility Year Property Tax Road Use Tax Hotel/Motel Tax Sales Tax1 Franchise Fee2 Total 2005 36,076$ 5,269$ 611$ -$ -$ 41,956$ 2006 38,336 5,303 674 - - 44,313 2007 42,221 5,305 683 - - 48,209 2008 44,101 5,432 734 - - 50,267 2009 47,861 5,254 713 - - 53,828 2010 50,256 5,525 699 8,141 47 64,668 2011 48,831 6,068 776 8,912 868 65,455 2012 51,374 6,394 811 8,644 822 68,045 2013 51,836 6,589 872 8,858 918 69,073 2014 51,331 6,745 967 466 1,031 60,540 1 1% Local Option Sales Tax went into effect 7/1/09 and will be effective through 6/30/13. 2 1% Utility Franchise Fee went into effect 4/1/10. CITY OF IOWA CITY, IOWA GENERAL GOVERNMENT TAX REVENUES BY SOURCE Last Ten Fiscal Years (Modified accrual basis of accounting) (amounts expressed in thousands) 1 1 2 CITY OF IOWA CITY, IOWA ASSESSED AND TAXABLE VALUE OF PROPERTY Last Ten Fiscal Years (amounts expressed in thousands) Collection Commercial, Industial Incremental Value Gas &Residential Taxable Value Total Year Ended Agricultural & Utilities (excluding Military Net (Debt Service Electric Utilities Total Rollback as a Percentage Direct June 30 Residential (Taxed at Ag Rate)Gas & Electric)Exemptions Valuation Levy Only)(excise tax)Value Percentage of Assessed Value Rate 2005 Assessed 2,154,179$ 1,968$ 970,343$ 3,627$ 3,122,863$ 23,957$ 44,723$ 3,191,543$ Taxable 1,044,016 1,968 963,482 3,627 2,005,839$ 23,439 45,612 2,074,890$ 48.456%65.012%17.314$ 2006 Assessed 2,236,070 1,802 980,167 3,484 3,214,555$ 31,028 46,919 3,292,502$ Taxable 1,072,233 1,802 980,167 3,484 2,050,718$ 31,028 42,834 2,124,580$ 47.962 64.528 17.729 2007 Assessed 2,636,228 1,582 1,044,739 3,463 3,679,086$ 77,785 50,311 3,807,182$ Taxable 1,208,405 1,582 1,035,929 3,463 2,242,453$ 77,785 42,641 2,362,879$ 45.996 62.064 17.302 2008 Assessed 2,722,754 1,534 1,058,580 3,424 3,779,444$ 94,864 54,053 3,928,361$ Taxable 1,234,872 1,534 1,058,580 3,424 2,291,562$ 94,864 41,542 2,427,968$ 45.560 61.806 17.297 2009 Assessed 2,991,702 1,565 1,108,123 3,396 4,097,994$ 111,540 54,081 4,263,615$ Taxable 1,307,511 1,410 1,105,109 3,396 2,410,634$ 111,540 44,597 2,566,771$ 44.080 60.202 17.717 2010 Assessed 3,065,279 1,499 1,133,818 3,324 4,197,272$ 117,813 61,066 4,376,151$ Taxable 1,384,088 1,407 1,133,818 3,324 2,515,989$ 117,813 45,157 2,678,959$ 45.589 61.217 17.853 2011 Assessed 3,122,875 2,315 1,223,304 3,239 4,345,255$ 25,409 79,196 4,449,860$ Taxable 1,464,644 1,534 1,223,304 3,239 2,686,243$ 25,409 46,333 2,757,985$ 46.909 61.979 17.757 2012 Assessed 3,182,636 2,264 1,231,756 3,163 4,413,493$ 25,409 81,240 4,520,142$ Taxable 1,544,261 1,562 1,231,756 3,163 2,774,416$ 25,409 48,338 2,848,163$ 48.530 63.010 17.842 2013 Assessed 3,284,249 2,516 1,236,609 3,097 4,520,277$ 11,712 83,538 4,615,527$ Taxable 1,666,036 1,448 1,236,609 3,097 2,900,996$ 11,712 47,404 2,960,112$ 50.752 64.134 17.269 2014 Assessed 3,367,052 2,656 1,200,457 3,060 4,567,105$ 14,114 87,100 4,668,319$ Taxable 1,776,096 1,592 1,200,457 3,060 2,975,085$ 14,114 46,813 3,036,012$ 52.817 65.034 16.805 Sources: Iowa Department of Management Notes:Property is reassessed in the odd numbered years to make adjustments to all property values, according to current market values. As per the Code of Iowa, all real property subject to taxation shall be valued at its actual value and, except as otherwise provided, shall be reassessed at 100% of its actual value. 1 1 3 (per $1,000 assessed valuation) Total Iowa City Kirkwood Direct & Collection Operating Debt Service Total City Johnson School Community State of Overlapping Year Millage Millage Millage County1 District College Iowa Rates 2005 13.360$ 3.954$ 17.314$ 6.166$ 12.875$ 0.668$ 0.004$ 37.027$ 2006 13.580 4.149 17.729 6.391 13.582 0.649 0.004 38.355 2007 13.423 3.879 17.302 6.415 13.632 0.872 0.004 38.225 2008 13.511 3.786 17.297 6.823 13.852 0.855 0.004 38.831 2009 13.414 4.303 17.717 7.803 14.192 0.852 0.004 40.568 2010 13.634 4.219 17.853 7.708 14.191 0.840 0.003 40.595 2011 13.319 4.438 17.757 7.540 14.690 0.926 0.003 40.916 2012 13.193 4.649 17.842 7.320 14.591 0.999 0.003 40.755 2013 12.826 4.443 17.269 7.075 14.073 1.079 0.003 39.499 2014 12.775 4.030 16.805 7.077 13.688 1.065 0.003 38.638 Source: "Tax Levies for Johnson County, Iowa," compiled by the Johnson County Auditor. Note: 1Includes Johnson County, City of Iowa City Assessor, and Agricultural Extension levies. Tax rates are per $1,000 of assessed value. Overlapping Rates City of Iowa City CITY OF IOWA CITY, IOWA PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Fiscal Years 1 1 4 Collection Total Tax Current Tax Delinquent Tax Total Tax Year Levied Collections Collections1 Collections 2005 34,403$ 34,814$ 101.2 %15$ 34,829$ 101.2 % 2006 36,460 36,654 100.5 44 36,698 100.7 2007 39,094 38,947 99.6 13 38,960 99.7 2008 39,973 39,768 99.5 70 39,838 99.7 2009 43,168 43,118 99.9 18 43,136 99.9 2010 45,393 45,318 99.8 17 45,335 99.9 2011 47,789 47,826 100.1 8 47,834 100.1 2012 49,595 49,543 99.9 1 49,544 99.9 2013 50,407 50,139 99.5 3 50,142 99.5 2014 50,307 49,835 99.1 1 49,836 99.1 Source: Certificate of City Taxes and Johnson County Treasurer's Office Note: This schedule is presented on a cash basis of accounting. Taxes are collected by the Johnson County Treasurer and submitted to the City in the following month. Because of the month delay, some years will show Current Tax Collections in excess of the Total Tax Levied. 1 Delinquent tax collection is presented by collection year, rather than levy year, because information is not available from Johnson County Treasurer by levy year. Percent of Levy Collected Total as a Percent of Levy CITY OF IOWA CITY, IOWA PROPERTY TAX BUDGETS AND COLLECTIONS Last Ten Fiscal Years (Cash basis of accounting) (amounts expressed in thousands) 115 % of Total % of Total Taxable Taxable Taxable Taxable Ten largest taxpayers1 Type of Business Valuation Rank Valuation Valuation Rank Valuation ACT Inc. (formerly American College Testing Program)Educational Testing Service 26,902$ 2 1.30 %46,590$ 1 1.53 % Mid-American Energy Company2 Public Gas and Electric Utility 46,919 1 2.26 44,174 2 1.46 Ann Gerdin Truse (formerly Russell Gerdin)Warehousing - -0.00 22,321 3 0.74 Dealer Properties IC LLC (Billion Auto)Car Dealerships - -0.00 19,343 4 0.64 Proctor & Gamble LLC Manufacturing Company 10,523 8 0.51 16,227 5 0.53 Alpha Inc Industrial -0.00 15,528 6 0.51 National Computer Systems (Pearson)Information Services 16,159 5 0.78 13,800 7 0.45 CCAL 100 Hawk Ridge Drice LLC The Lodge Housing Complex - -0.00 12,856 8 0.42 Wal-Mart Real Estate Retail 0.00 12,749 9 0.42 Southgate Development Company Real Estate Developer 18,475 4 0.89 12,542 10 0.41 Jame A and Lorretta Clark Apartments 26,252 3 1.27 - -0.00 MIP Iowa City LLC Sheraton Hotel Hotel 10,200 9 0.49 - -0.00 OC Group LC Old Capital Mall Shaooping Mall 9,262 10 0.45 - -0.00 M G D LC (Sycamore Mall)Shopping Mall 11,457 7 0.55 - -0.00 Moen Group Real Estate Developer 11,824 6 0.57 - -0.00 Total 187,973$ 9.06 %216,130$ 7.12 % Sources:1City of Iowa City Assessor's Office - 2012 Annual Report CITY OF IOWA CITY, IOWA PRINCIPAL TAXPAYERS Current Year and Nine Years Ago (amounts expressed in thousands) 20142005 1 1 6 117 Customer Name Charges Rank Percentage Charges Rank Percentage Proctor & Gamble 537,724$ 1 6.54 %597,724$ 1 7.68 % Veterans Administration Medical Center 146,106 2 1.78 102,726 2 1.32 Dolphin Lake Point (Lakeside Manor)76,748 3 0.93 77,900 3 1.00 Mark IV Apts 49,165 8 0.60 61,811 4 0.79 Mercy Hospital 73,312 4 0.89 61,346 5 0.79 Campus Apartments 72,288 5 0.88 56,351 6 0.72 University of Iowa (Mayflower Apartments)46,237 9 N/A 40,466 7 0.52 RBD Iowa City LLC (Sheraton Hotel)--N/A 34,109 8 0.44 Oaknoll Retirement --N/A 30,561 9 0.39 Seville Apartments --N/A 30,381 10 0.39 Lear Corp 49,714 6 0.60 -N/A Roberts Dairy 49,559 7 0.60 --N/A Holiday Inn/MPI LESSE 43,612 10 0.53 --N/A 1,144,465$ 13.36 %1,093,375$ 14.06 % Total Water System Charges 8,217,941$ 7,778,364$ Sources: City of Iowa City Revenue Division CITY OF IOWA CITY, IOWA PRINCIPAL WATER SYSTEM CUSTOMERS Current Year and Nine Years Ago 20142005 1 1 8 Fiscal Water Sales Water System Year Cubic Feet Sold Charges 2005 254,560,239 8,315,719$ 2006 267,107,998 8,844,993 2007 261,072,632 8,414,310 2008 249,361,929 7,976,536 2009 234,804,167 7,497,903 2010 234,342,825 7,568,378 2011 236,838,370 7,661,898 2012 246,618,257 7,953,738 2013 254,616,773 8,194,467 2014 239,790,719 7,778,364 Sources: City of Iowa City Revenue Department CITY OF IOWA CITY, IOWA SALES HISTORY AND TOTAL WATER CHARGES Last Ten Fiscal Years 119 Customer Name Charges Rank Percentage Charges Rank Percentage University of Iowa 1,993,643$ 1 16.43 %2,033,586$ 1 16.42 % Proctor & Gamble 1,655,028 2 13.64 1,139,625 2 9.20 Veterans Administration Medical Center 187,230 3 1.54 135,545 3 1.09 Dolphin Lake Point (Lakeside Apts)111,441 4 0.92 133,843 4 1.08 Iowa City Landfill Division --N/A 127,451 5 1.03 Mercy Hospital 79,497 7 0.66 103,838 6 0.84 Mark IV Apartments 55,012 10 0.45 89,261 7 0.72 Campus Apartments 83,039 6 0.68 74,248 8 0.60 University of Iowa/Mayflower Apartments 68,896 8 0.57 71,122 9 0.57 RBD Iowa City LLC (Sheraton Hotel)--N/A 59,549 10 0.48 Roberts Dairy 100,437 5 0.83 --N/A Holiday Inn/ MPI LESSEE 66,264 9 0.55 --N/A 4,400,487$ 36.27 %3,968,068$ 32.05 % Total Sewer System Charges 12,131,294$ 12,382,031$ Sources: City of Iowa City Revenue Department CITY OF IOWA CITY, IOWA PRINCIPAL SEWER SYSTEM CUSTOMERS Current Year and Nine Years Ago 20142005 1 2 0 Fiscal Sewer Sales Sewer System Year Cubic Feet Sold Charges 2005 297,714,953 12,557,646$ 2006 302,925,357 12,373,762 2007 315,199,203 11,084,369 2008 285,492,596 12,221,769 2009 276,455,246 12,499,949 2010 265,375,857 12,541,905 2011 280,303,237 12,748,695 2012 282,134,840 12,784,321 2013 285,472,392 12,883,641 2014 269,505,370 12,382,031 Sources: City of Iowa City Revenue Department CITY OF IOWA CITY, IOWA SALES HISTORY AND TOTAL SEWER CHARGES Last Ten Fiscal Years 121 General Capital General Total Percentage Fiscal Obligation Revenue Loan Obligation Revenue Primary of Personal Per Year Bonds1 Bonds1 Note Bonds1 Bonds1 Government Income2 Capita2 2005 77,105,405$ - $ 211,000$ 8,202,996$ 109,918,239$ 195,437,640$ 3.97 %3,133 $ 2006 78,286,801 - 211,000 6,813,828 104,975,288 190,286,917 3.62 3,026 2007 80,441,894 - 211,000 5,458,633 99,892,337 186,003,864 3.28 2,774 2008 82,268,532 - 211,000 4,885,710 94,549,386 181,914,628 3.00 2,682 2009 81,222,533 - 211,000 4,317,787 87,875,855 173,627,175 2.81 2,513 2010 71,791,737 - 211,000 3,731,167 79,281,888 155,015,792 2.47 2,284 2011 77,743,957 - 211,000 3,130,849 75,857,306 156,943,112 2.32 2,276 2012 74,225,654 - 211,000 1,483,473 69,059,307 144,979,434 2.03 2,103 2013 57,688,803 2,614,644 211,000 1,182,315 62,764,738 124,461,500 1.66 1,775 2014 64,132,510 2,616,768 211,000 886,157 57,568,517 125,414,952 1.60 1,752 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 132. Governmental Activities Business-Type Activities CITY OF IOWA CITY, IOWA RATIOS OF OUTSTANDING DEBT BY TYPE Last Ten Fiscal Years 1 2 2 CITY OF IOWA CITY, IOWA RATIOS OF GENERAL OBLIGATION BONDED DEBT1 TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA Last Ten Fiscal Years (amounts expressed in thousands, except per capita) Property Debt Debt Net General Ratio of Net Net Bonded Fiscal Assessed Payable from Payable from Gross Debt Service Obligation Bonded Debt to Debt Year Value2 Governmental Proprietary Bonded Debt Fund Balance Bonded Debt Assessed Value Per Capita3 2005 3,191,543$ 77,105$ 8,203$ 85,308$ 3,067$ 82,241$ 25.77 : 1000 1,318$ 2006 3,292,502 78,287 6,814 85,101 2,725 82,376 25.02 : 1000 1,310 2007 3,807,182 80,442 5,459 85,901 4,289 81,612 21.44 : 1000 1,217 2008 3,928,361 82,268 4,886 87,154 8,691 78,463 19.97 : 1000 1,157 2009 4,263,615 81,222 4,318 85,540 11,759 73,781 17.30 : 1000 1,068 2010 4,376,151 71,792 3,731 75,523 13,952 61,571 14.07 : 1000 907 2011 4,449,860 77,744 3,131 80,875 13,151 67,724 15.22 : 1000 982 2012 4,520,142 74,226 1,483 75,709 11,009 64,700 14.31 : 1000 938 2013 4,615,527 57,689 1,182 58,871 6,527 52,344 11.34 : 1000 746 2014 4,668,319 64,133 886 65,019 9,532 55,487 12.15 : 1000 775 Notes: 1 General Obligation bonds, net of related premiums and discounts. 2City of Iowa City Budget Book. 3 Population data can be found on page 132. 1 2 3 CITY OF IOWA CITY, IOWA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES1 Last Ten Fiscal Years (amounts expressed in thousands) Total General Fiscal Year Governmental Ratio of Debt Ended Total Expenditures Service to General June 30 Principal2 Interest2 Debt Service and Transfers Expenditures 2005 9,349$ 3,676$ 13,025$ 88,342$ .15 : 1.00 2006 6,099 3,458 9,557 93,360 .10 : 1.00 2007 6,700 3,464 10,164 93,639 .11 : 1.00 2008 7,323 3,556 10,879 99,178 .11 : 1.00 2009 8,418 3,364 11,782 102,607 .11 : 1.00 2010 9,354 3,064 12,418 108,950 .11 : 1.00 2011 10,386 2,889 13,275 120,424 .11 : 1.00 2012 13,294 2,543 15,837 119,242 .13 : 1.00 2013 16,465 2,339 18,804 129,814 .14 : 1.00 2014 10,900 1,903 12,803 101,734 .13 : 1.00 Notes: 1 General Fund, Special Revenue Funds, Debt Service Fund and Capital Projects Funds. 2 Beginning in FY13, Taxable Urban Renewal Revenue Bonds are also included. 124 CITY OF IOWA CITY, IOWA COMPUTATION OF DIRECT AND OVERLAPPING DEBT June 30, 2014 (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 Per Capita City of Iowa City 66,960$ 100.00 %66,960$ 935.3170$ Iowa City Community School District 12,280 57.33 7,041 98.3448 Total 79,240$ 74,001$ 1,033.6618$ Per capita assessed value 65,208$ Source: Johnson County Auditor's Office. each overlapping government. However,this does not imply that every taxpayer is a resident,and therefore responsible for repaying the debt, of Note:Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of Iowa City.This process recognizes that,when considering the City's ability to issue and repay long-term debt,the entire burden borne by the residents and businesses should be taken into account. 125 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Debt Limit 159,577$ 164,625$ 190,359$ 196,418$ 213,181$ 218,808$ 222,493$ 226,007$ 230,776$ 233,416$ Total net debt applicable to limit 85,290 85,060 85,840 87,090 84,995 75,050 80,575 75,320 61,205 67,075 Legal debt margin 74,287$ 79,565$ 104,519$ 109,328$ 128,186$ 143,758$ 141,918$ 150,687$ 169,571$ 166,341$ Total net debt applicable to the limit as a percentage of debt limit 53.45%51.67%45.09%44.34%39.87%34.30%36.21%33.33%26.52%28.74% Total Assessed Valuation Debt Limit - 5% of Total Assessed Valuation 233,416 Less: Amount of Debt Applicable to Debt Limit 67,075 Legal Debt Margin 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 INFORMATION Last Ten Fiscal Years (amounts expressed in thousands) 166,341$ 4,668,319$ Fiscal Year Legal Debt Margin Calculation for Fiscal Year 2014 1 2 6 Fiscal Year Principal Interest Total Property Tax Revenue Tax Increment Financing Water Revenue Principal Outstanding at Beginning of Fiscal Year 2014 11,790,000$ 1,872,314$ 13,662,314$ 12,875,766$ 442,223$ 344,325$ 58,550,000$ 2015 11,970,000 1,840,432 13,810,432 12,985,067 480,340 345,025 64,420,000 2016 11,500,000 1,394,380 12,894,380 12,041,109 546,471 306,800 52,450,000 2017 9,890,000 1,084,787 10,974,787 10,129,305 544,582 300,900 40,950,000 2018 8,810,000 836,244 9,646,244 9,101,410 544,834 - 31,060,000 2019 6,350,000 584,669 6,934,669 6,391,270 543,399 - 22,250,000 2020 5,735,000 408,481 6,143,481 5,602,651 540,830 - 15,900,000 2021 4,435,000 249,629 4,684,629 4,144,054 540,575 - 10,165,000 2022 2,830,000 127,550 2,957,550 2,417,824 539,726 - 5,730,000 2023 1,870,000 68,150 1,938,150 1,457,063 481,087 - 2,900,000 2024 1,030,000 25,750 1,055,750 728,377 327,373 - 1,030,000 Total 76,210,000$ 8,492,386$ 84,702,386$ 77,873,896$ 5,531,440$ 1,297,050$ Payments Funding Source(s) CITY OF IOWA CITY, IOWA GENERAL OBLIGATION DEBT ANNUAL MATURITY SCHEDULE 1 2 7 Fiscal Year Net Revenue Annual Debt Service2 Ended Available for Ratio of June 30 Revenue Expenses1 Debt Service Principal Interest Total Coverage Parking Revenue3 2005 4,360 $ 2,377$ 1,983$ 305$ 663 $ 968 $ 2.05 2006 4,161 2,380 1,781 320 645 965 1.85 2007 5,035 2,973 2,062 335 626 961 2.15 2008 4,995 2,454 2,541 355 606 961 2.64 2009 5,630 3,024 2,606 370 584 954 2.73 20106 5,509 3,149 2,360 390 504 894 2.64 2011 5,389 2,920 2,469 420 391 811 3.04 2012 4,945 3,034 1,911 500 339 839 2.28 2013 5,122 3,549 1,573 515 324 839 1.87 2014 5,365 2,969 2,396 530 308 838 2.86 Wastewater Treatment Revenue4 2005 12,600 $ 4,432$ 8,168$ 3,630$ 3,537 $ 7,167 $ 1.14 2006 12,798 4,260 8,538 3,815 3,390 7,205 1.19 2007 13,708 4,236 9,472 3,905 3,234 7,139 1.33 20086 13,332 4,581 8,751 4,105 3,071 7,176 1.22 20096 13,462 5,202 8,260 4,260 2,813 7,073 1.17 20106 13,174 5,050 8,124 4,205 2,307 6,512 1.25 20116 13,281 5,477 7,804 1,840 2,054 3,894 2.00 2012 13,175 5,663 7,512 4,615 1,693 6,308 1.19 2013 13,301 5,340 7,961 4,865 1,547 6,412 1.24 2014 12,835 5,708 7,127 3,250 1,428 4,678 1.52 Water Revenue5 2005 9,287 $ 4,783$ 4,504$ 845$ 1,340 $ 2,185 $ 2.06 2006 9,918 5,722 4,196 880 1,305 2,185 1.92 2007 9,220 5,356 3,864 915 1,268 2,183 1.77 20086 9,258 5,348 3,910 955 1,229 2,184 1.79 20096 8,833 5,726 3,107 995 1,171 2,166 1.43 20106 8,336 5,153 3,183 680 1,055 1,735 1.83 2011 8,354 5,464 2,890 1,110 902 2,012 1.44 20126 8,649 5,653 2,996 1,200 861 2,061 1.45 20136 9,342 6,348 2,994 845 758 1,603 1.87 20146 8,613 5,818 2,795 1,335 650 1,985 1.41 Notes: 1 Excludes depreciation and interest. 2 Includes principal and interest of revenue bonds only. 3 Parking Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service" is required to be at least 1.25. 4 Wastewater Treatment Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service" is required to be at least 1.10. 5 Water Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service" is required to be at least 1.10. 6 Refunded Revenue Bonds paid are excluded from the principal of Annual Debt Service. CITY OF IOWA CITY, IOWA SCHEDULE OF REVENUE BOND COVERAGE Last Ten Fiscal Years (amounts expressed in thousands) 128 Fiscal Year Principal Interest Total Sewer Revenue Parking Revenue Water Revenue Tax Increment Financing Principal Outstanding at Beginning of Fiscal Year 2014 5,115,000$ 2,452,262$ 7,567,262$ 4,668,681$ 838,300$ 1,984,946$ 75,335$ 64,615,000$ 2015 5,290,000 2,282,000 7,572,000 4,674,900 832,250 1,989,515 75,335 59,500,000 2016 5,630,000 2,090,619 7,720,619 4,695,119 832,950 1,987,215 205,335 54,210,000 2017 5,800,000 1,881,706 7,681,706 4,659,575 830,150 1,987,946 204,035 48,580,000 2018 6,035,000 1,661,273 7,696,273 4,661,575 831,450 1,995,903 207,345 42,780,000 2019 6,240,000 1,429,950 7,669,950 4,646,400 826,850 1,991,515 205,185 36,745,000 2020 6,500,000 1,175,401 7,675,401 4,647,463 826,350 1,994,103 207,485 30,505,000 2021 6,240,000 909,029 7,149,029 4,118,013 828,900 1,997,571 204,545 24,005,000 2022 5,075,000 669,863 5,744,863 2,717,288 824,469 1,996,781 206,325 17,765,000 2023 3,910,000 479,728 4,389,728 1,361,250 823,869 1,996,764 207,845 12,690,000 2024 2,945,000 330,042 3,275,042 793,250 824,000 1,453,847 203,945 8,780,000 2025 2,980,000 192,851 3,172,851 797,250 712,375 1,458,481 204,745 5,835,000 2026 1,770,000 83,258 1,853,258 794,375 - 853,788 205,095 2,855,000 2027 165,000 39,975 204,975 - - - 204,975 1,085,000 2028 170,000 34,365 204,365 - - - 204,365 920,000 2029 175,000 28,245 203,245 - - - 203,245 750,000 2030 185,000 21,770 206,770 - - - 206,770 575,000 2031 190,000 14,925 204,925 - - - 204,925 390,000 2032 200,000 7,800 207,800 - - - 207,800 200,000 Total 64,615,000$ 15,785,062$ 80,400,062$ 43,235,139$ 9,831,913$ 23,688,375$ 3,644,635$ Payments CITY OF IOWA CITY, IOWA REVENUE DEBT ANNUAL MATURITY SCHEDULE Funding Source(s) 1 2 9 Fiscal Year Principal Interest Total 2014 530,000$ 308,300$ 838,300$ 2015 540,000 292,250 832,250 2016 560,000 272,950 832,950 2017 580,000 250,150 830,150 2018 605,000 226,450 831,450 2019 625,000 201,850 826,850 2020 650,000 176,350 826,350 2021 680,000 148,900 828,900 2022 705,000 119,469 824,469 2023 735,000 88,869 823,869 2024 770,000 54,000 824,000 2025 695,000 17,375 712,375 Total 7,675,000$ 2,156,913$ 9,831,913$ Fiscal Year Principal Interest Total 2014 3,250,000$ 1,418,681$ 4,668,681$ 2015 3,370,000 1,304,900 4,674,900 2016 3,520,000 1,175,119 4,695,119 2017 3,625,000 1,034,575 4,659,575 2018 3,775,000 886,575 4,661,575 2019 3,915,000 731,400 4,646,400 2020 4,090,000 557,463 4,647,463 2021 3,740,000 378,013 4,118,013 2022 2,485,000 232,288 2,717,288 2023 1,220,000 141,250 1,361,250 2024 700,000 93,250 793,250 2025 740,000 57,250 797,250 2026 775,000 19,375 794,375 Total 35,205,000$ 8,030,139$ 43,235,139$ (continued) CITY OF IOWA CITY, IOWA REVENUE DEBT ANNUAL MATURITY BY FUNDING SOURCE Parking Outstanding Sewer Outstanding 130 Fiscal Year Principal Interest Total 2014 1,335,000$ 649,946$ 1,984,946$ 2015 1,380,000 609,515 1,989,515 2016 1,420,000 567,215 1,987,215 2017 1,465,000 522,946 1,987,946 2018 1,520,000 475,903 1,995,903 2019 1,565,000 426,515 1,991,515 2020 1,620,000 374,103 1,994,103 2021 1,680,000 317,571 1,997,571 2022 1,740,000 256,781 1,996,781 2023 1,805,000 191,764 1,996,764 2024 1,325,000 128,847 1,453,847 2025 1,390,000 68,481 1,458,481 2026 835,000 18,788 853,788 Total 19,080,000$ 4,608,375$ 23,688,375$ Fiscal Year Principal Interest Total 2014 -$ 75,335$ 75,335$ 2015 - 75,335 75,335 2016 130,000 75,335 205,335 2017 130,000 74,035 204,035 2018 135,000 72,345 207,345 2019 135,000 70,185 205,185 2020 140,000 67,485 207,485 2021 140,000 64,545 204,545 2022 145,000 61,325 206,325 2023 150,000 57,845 207,845 2024 150,000 53,945 203,945 2025 155,000 49,745 204,745 2026 160,000 45,095 205,095 2027 165,000 39,975 204,975 2028 170,000 34,365 204,365 2029 175,000 28,245 203,245 2030 185,000 21,770 206,770 2031 190,000 14,925 204,925 2032 200,000 7,800 207,800 Total 2,655,000$ 989,635$ 3,644,635$ Taxable Urban Renewal Outstanding Outstanding CITY OF IOWA CITY, IOWA REVENUE DEBT ANNUAL MATURITY BY FUNDING SOURCE (continued) Water 131 Per Capita Calendar Personal Personal Average School Retail Year Population6 Income1 Income1 Increase Enrollment2 Sales4 2005 62,380 4,920,872$ 34,740$ 8.75 %11,866 2.9 %878,009,171$ 2006 62,887 5,260,852 36,610 5.38 11,988 2.4 901,481,066 2007 67,062 5,677,628 38,854 6.13 12,824 2.9 934,971,428 2008 67,831 6,062,777 40,745 4.87 12,911 3.1 958,509,729 2009 69,086 6,180,244 40,779 0.08 13,049 4.3 905,139,461 2010 67,862 6,280,167 41,048 0.66 13,319 5.0 725,329,723 2011 68,947 6,779,334 43,631 6.29 13,638 4.8 741,407,021 2012 68,947 7,155,456 45,222 3.65 13,862 4.1 767,122,555 20135 70,133 7,491,372 47,345 4.69 14,057 3.8 793,201,342 20145 71,591 7,828,529 49,476 4.50 14,162 3.5 649,794,164 Sources and Notes:1 Personal Income and Per Capita Personal Income based on metropolitan Iowa City / Coralville and based on figures from Bureau of Economic Analysis. Personal Income expressed in thousands.2 Iowa City Community School District and local private schools3 Iowa Workforce Development Center4 Iowa Retail Sales & Use Report, Iowa Department of Revenue and Finance. Fiscal year ending March 31.5 Personal Income and Per Capita Personal Income for 2014 and 2013 not availabe. Amounts projected based on average increase over previous 9 years.6 US Census Bureau DEMOGRAPHIC AND ECONOMIC STATISTICS CITY OF IOWA CITY, IOWA Last Ten Calendar Years Unemployment Rate3 1 3 2 Employers Employees Rank Employees Rank Percentage University of Iowa and University of Iowa Hospital and Clinics 24,627 1 30,804 1 31.1 % Iowa City Community School District 1,600 2 1,700 2 1.7 Veterans Administration Medical Center 1,241 4 1,562 3 1.6 NCS Pearson 1,050 7 1,200 4 1.2 Mercy Hospital 1,250 3 1,187 5 1.2 ACT Inc. (formerly American College Testing Program)1,200 5 1,181 6 1.2 Hy-Vee 1,153 6 1,166 7 1.2 City of Iowa City 986 8 1,087 8 1.1 System Unlimited --890 9 0.9 International Automotive Components formerly Lear Corp 930 9 785 10 0.8 Gillette Canada (Oral B Laboratories)500 10 --N/A 34,537 41,562 42.0 % Total Employees 98,900 Sources: Iowa City Area Development Group Note: Total number of employees is not available for 2005; percentage of total city employment by employer is not presented. 2014 Principal Employer total numbers are not avaiable, the only employer number avaible is the City of Iowa City CITY OF IOWA CITY, IOWA PRINCIPAL EMPLOYERS Current Year and Nine Years Ago 2005 2014 1 3 3 2005 2006 2007 2008 2009 2010 2011 Public Safety Police 94.25 94.25 96.25 96.25 103.25 103.25 98 Fire 56 57 57 57 57 57 66 Inspection Services 13.88 14.88 14.88 15.38 15.55 15.55 15.55 Public Works Public Works Admin 2 2 2 2 2 2 2 Engineering 11.6 11.6 11.6 11.35 11.35 11.35 12.1 Flood Recovery - - - - - - 0.4 Culture and Recreation Parks and Rec Admin 2 2 2 2 2 2 2 Recreation 15.17 15.17 15.42 15.42 15.42 15.42 15.42 Parks 12 13 13 13 13 13 13 Forestry 3 3 3 3 3 3 3 Cemetery 3 3 3 3 3 3 3 CBD Maintenance 3 3 3 3 3 3 3 Library 42.63 42.63 42.89 43.14 43.14 43.14 43.14 Senior Center 6.31 6.31 6.31 6.31 6.31 6.31 6.31 Community and Economic Development 8.45 8.45 8.45 8.95 9.05 9.05 9.1 General Government City Council 7 7 7 7 7 7 7 City Clerk 4 4 4 4 4 4 4 City Attorney 6.6 6.6 6.6 6.6 6 6 5.6 City Manager2 3 3 3 3 3 3 3 Personnel 4 4 4 4 4 4 4 Human Rights 2.5 2.5 2.5 2.5 2.5 2.5 2.5 Finance 26.61 26.75 26.75 26.5 26.3 26.3 26.24 Government Buildings 4.96 4.96 4.96 4.96 4.96 4.96 4.96 Energy Conservation 0.5 0.5 0.5 0.25 0.25 0.25 - Transit3 50.5 50.5 50.5 54.75 58.5 58.5 56.25 Special Revenue Employee Benefits 0.34 0.39 0.39 0.29 0.29 0.29 0.26 CIP / Roads 3 2 2 1 2 2 - Flood Mitigation Grants - - - - - - 1.6 Community Development 4.35 4.35 4.35 3.98 3.88 3.88 3.83 UniverCity Program Traffic Engineering 5.65 4.15 4.15 4.15 4.15 4.15 4.15 Streets 22 23.5 23.5 23.5 25.5 25.5 25.5 MPOJC (formerly JCCOG)6.1 6.6 6.6 6.6 6.6 6.6 6.6 Other Shared Revenues Library Development 0.8 1 1 1 1 1 1 Capital Project Administration - - - - - - 3 Internal Service Funds Information Technology 8 11.75 12 12.3 12.3 12.3 11.3 Equipment 11.25 11.26 11.26 11.26 11.26 11.26 11.26 Central Services 0.75 0.75 0.75 0.75 0.75 0.75 0.75 Risk Management 1.32 1.38 1.38 1.73 1.93 1.93 2.01 Business-Type Activities Parking 32.75 32.75 32.75 32.75 33.25 33.25 32.75 Mass Transit3 Wastewater Treatment 27.3 25.5 25.5 25.5 25.6 25.6 25.6 Water 31.7 32.5 32 32.75 32.75 32.75 32.75 Sanitation 34.35 33.85 33.85 34.85 34.85 35.85 35.85 Airport 2 1.6 1.6 1.6 1.75 1.75 1.75 Cable Television 6.19 6.19 6.19 6.19 6.44 6.44 6.69 Stormwater - 0.5 1 2 1.9 1.9 1.9 Housing Authority 12.75 13.25 13.25 13.25 13.25 13.25 13.25 Total 599.56 605.37 608.13 614.81 629.03 630.03 633.37 Source: City's Financial Plan CITY OF IOWA CITY, IOWA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION Last Ten Fiscal Years Full-Time Equivalent Employees as of June 30 134 2012 2013 2014 97 103 105 65 65 65 15.55 15.55 13.55 2 2 2 12.1 12.1 12.1 0.4 0.4 0.38 2 2 2 15.42 15.42 15.42 13 13 13 3 3 3 3 3 3 3 3 3 43.64 43.63 45.13 6.5 6.5 6.5 9.1 8.4 8.95 7 7 7 4 4 4 5.6 5.6 5.6 3 5 6 4 4 3 2.5 2 2 27.53 23.47 23.97 4.83 4.83 4.83 - 56.25 0 0 0.55 0.55 0.55 - 1.6 3.83 3.33 2.98 0.2 4.15 4.15 4.15 25.5 25.5 25.5 6.6 5.6 5.6 1.6 1.62 1 1 5 6 6 11.8 10.86 9.86 11.26 10.75 10.75 0.75 0.76 0.5 1.8 1.8 1.8 32.75 29.25 26.25 51.75 51.25 25.4 25.4 24.4 32.75 32.75 31.75 37.85 37.85 35.85 1.75 1 1 6.63 6.63 6.63 2.1 2.1 2.1 13.25 13.18 12.19 637.74 623.91 615.16 135 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Public Safety Police1 Physical arrests 7,528 6,895 6,505 6,434 6,486 5,983 6,590 5,911 4,468 5,126 Traffic Violations 7,428 8,198 6,684 5,827 4,460 4,446 3,403 3,761 2,499 3,015 Fire2 Number of calls answered 3,596 3,679 4,136 4,257 4,152 4,472 4,635 5,173 4,713 4,770 Inspections conducted 1,083 1,232 1,495 1,712 1,959 2,145 1,806 1,970 1,431 1,581 Parking Parking Violations 145,033 139,338 166,187 147,673 126,050 118,717 109,553 96,117 88,909 60,680 Wastewater Treatment Daily average treatment in gallons3 4,870,000 4,580,000 9,430,000 12,810,000 12,340,000 12,860,000 10,370,000 8,280,000 9,840,000 10,020,000 Maximum daily capacity of plant in gallons 40,000,000 40,000,000 40,000,000 41,000,000 41,000,000 41,100,000 41,100,000 41,100,000 41,100,000 41,100,000 Number of sewer system customers 21,552 22,046 22,481 22,909 23,161 23,344 23,527 23,529 24,059 24,389 Water Daily average consumption in gallons 5,448,500 5,680,600 5,516,238 5,475,122 5,508,077 5,483,255 5,508,800 5,486,800 5,535,000 5,640,219 Maximum daily capacity of plant in gallons 16,700,000 16,700,000 16,700,000 16,700,000 16,700,000 16,700,000 16,700,000 16,700,000 16,700,000 16,700,000 Water System Customers by Classification Residential 21,972 22,529 22,973 23,097 23,391 23,657 23,875 24,086 24,442 24,790 Commercial 1,400 1,408 1,448 1,465 1,494 1,481 1,498 1,489 1,491 1,491 Industrial 13 13 13 14 15 15 15 15 15 15 Other 129 134 137 138 144 153 156 200 204 202 Total Customers 23,514 24,084 24,571 24,714 25,044 25,306 25,544 25,790 26,152 26,498 Sanitation Number of Customers 14,158 14,371 14,556 14,574 14,700 14,831 14,926 15,030 15,177 15,331 Tonnage 8,667 8,463 8,722 8834 8,747 8,869 8,969 8,935 8,956 9,160 Landfill Tonnage 113,356 111,124 135,315 132,760 140,810 150,369 147,265 148,953 111,445 115,624 Sources: Various city divisions. Notes: 1 Numbers are based on a calendar year and 2014 figures are compiled through 10/28/14. 2 Numbers are based on a calendar year and 2014 figures are compiled through 10/23/14. 3 Numbers for FY07 and after are based on both the North and South Wastewater Plants. CITY OF IOWA CITY, IOWA OPERATING INDICATORS BY FUNCTION Last Ten Fiscal Years 1 3 6 137 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Public Safety Police Stations 1 1 1 1 1 1 1 1 1 1 Patrol units 17 17 17 17 17 18 18 18 18 20 Fire Stations 3 3 3 3 3 3 3 4 4 4 Fire apparatus 8 8 8 9 9 9 9 11 11 11 Public Works Streets Miles 262 262 268 269 270 272 272 275 276 279 Street lights 3,357 3,378 3,395 3,403 3,408 3,410 3,412 3,412 3,412 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 61 61 61 61 61 40 41 41 42 43 Acreage 1,400 1,400 1,600 1,603 1603 1335 1354 1441 1506 1897 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 29 29 29 31 30 30 30 30 27 27 Tennis courts 12 12 12 12 12 12 12 12 12 12 Soccer fields 25 25 25 25 20 20 20 20 20 20 (continued) CITY OF IOWA CITY, IOWA Last Ten Fiscal Years CAPITAL ASSETS BY FUNCTION 1 3 8 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Parking Facilities 4 5 5 5 5 5 5 5 5 5 Spaces 2,537 3,137 3,100 3,085 3,086 3,086 3,086 3,086 3,086 3086 Wastewater Treatment Miles of sanitary sewer 277 280 286 288 289 291 292 294 295 298 Miles of storm sewer 105 110 117 118 120 122 124 127 128 131 Number of treatment plants 2 2 2 2 2 2 2 2 2 1 Number of service connectors 21,552 22,046 22,481 22,576 22,875 23,093 23,308 23,529 23,851 26498 Water Miles of water mains 252 257 260 262 263 264 264 266 268 271 Number of city owned fire hydrants 2,448 2,474 2,569 2,575 2,635 2,662 2,680 2,735 3,330 3385 Sanitation Landfills 1 1 1 1 1 1 1 1 1 1 Acreage 200 200 200 395 395 395 395 411 411 41 Sources: Various city divisions. CITY OF IOWA CITY, IOWA CAPITAL ASSETS BY FUNCTION (continued) Last Ten Fiscal Years 1 3 9 140