HomeMy WebLinkAboutFY2017 Annual Financial Report
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
CITY OF IOWA CITY, IOWA
FOR THE FISCAL YEAR ENDED JUNE 30, 2017
PREPARED BY:
FINANCE DEPARTMENT
CITY OF IOWA CITY, IOWA
Introductory
Section
Tab
CITY OF IOWA CITY, IOWA
TABLE OF CONTENTS
June 30, 2017
Page
INTRODUCTORY SECTION
Table of contents ................................................................................................................................ 1
Letter of transmittal ............................................................................................................................ 3
Certificate of Achievement for Excellence in Financial Reporting ................................................... 12
City organizational chart .................................................................................................................... 13
City officials....................................................................................................................................... 14
FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT ......................................................................................... 15
MANAGEMENT’S DISCUSSION AND ANALYSIS .................................................................... 19
BASIC FINANCIAL STATEMENTS
Government-wide financial statements
Statement of net position ............................................................................................................. 30
Statement of activities .................................................................................................................. 32
Fund financial statements
Balance sheet – governmental funds ............................................................................................ 34
Reconciliation of the balance sheet of the governmental funds to the statement of net position. 35
Statement of revenues, expenditures, and changes in fund balances – governmental funds ....... 36
Reconciliation of the statement of revenues, expenditures, and changes in fund balances of
governmental funds to the statement of activities ..................................................................... 37
Statement of net position – proprietary funds .............................................................................. 38
Statement of revenues, expenses, and changes in fund net position – proprietary funds ............ 40
Statement of cash flows – proprietary funds ................................................................................ 42
Statement of fiduciary assets and liabilities ................................................................................. 44
Notes to financial statements .......................................................................................................... 46
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary comparison schedule – budget and actual – all governmental funds and enterprise
funds – budgetary basis………………………………………………………………………… 88
Budgetary comparison schedule – budget to GAAP reconciliation …………………………….. 90
Note to required supplementary information – budgetary reporting…………………………….. 91
Schedule of the City’s proportionate share of MFPRSI net pension liability…………………… 93
Schedule of City’s MFPRSI contributions……………………………………………………… 94
Note to required supplementary information – MFPRSI pension liability……………………… 96
Schedule of the City’s proportionate share of IPERS net pension liability…………………… .. 97
Schedule of City’s IPERS contributions………………………………………………………... 98
Note to required supplementary information – IPERS pension liability……………………… .. 100
Required supplementary information – schedule of funding progress for health and dental
plans…………………….…………………………………………………………….……… .. 101
COMBINING FUND STATEMENTS
Combining balance sheet – nonmajor governmental funds ............................................................ 104
Combining statement of revenues, expenditures, and changes in fund balances – nonmajor
governmental funds ...................................................................................................................... 105
Combining statement of net position – nonmajor enterprise funds ................................................ 108
Combining statement of revenues, expenses, and changes in fund net position – nonmajor
enterprise funds ............................................................................................................................ 109
Combining statement of cash flows – nonmajor enterprise funds .................................................. 110
Combining statement of net position – internal service funds ........................................................ 112
Combining statement of revenues, expenses, and changes in fund net position – internal service
funds ............................................................................................................................................. 113 1
---
CITY OF IOWA CITY, IOWA
TABLE OF CONTENTS
June 30, 2017
Page
COMBINING FUND STATEMENTS (continued)
Combining statement of cash flows – internal service fund ............................................................ 114
Statement of changes in assets and liabilities – agency funds ......................................................... 116
STATISTICAL SECTION (UNAUDITED)
Net position by component ................................................................................................................. 119
Changes in net position ...................................................................................................................... 120
Fund balances – governmental funds ................................................................................................. 122
Changes in fund balances – governmental funds ............................................................................... 123
General government tax revenues by source ...................................................................................... 124
Assessed and taxable value of property .............................................................................................. 125
Property tax rates – direct and overlapping governments .................................................................. 126
Property tax budgets and collections .................................................................................................. 127
Principal taxpayers ............................................................................................................................. 128
Principal water system customers ...................................................................................................... 130
Sales history and total water charges .................................................................................................. 131
Principal sewer system customers ...................................................................................................... 132
Sales history and total sewer charges ................................................................................................. 133
Ratios of outstanding debt by type ..................................................................................................... 134
Ratios of general obligation bonded debt to assessed value and net bonded debt per capita ............. 135
Ratio of annual debt service expenditures for general bonded debt to total general governmental
expenditures ..................................................................................................................................... 136
Computation of direct and overlapping debt ...................................................................................... 137
Legal debt margin information ........................................................................................................... 138
General obligation debt annual maturity schedule ............................................................................. 139
Schedule of revenue bond coverage ................................................................................................... 140
Revenue debt annual maturity schedule ............................................................................................. 141
Revenue debt annual maturity by funding source .............................................................................. 142
Demographic and economic statistics ................................................................................................ 144
Principal employers ............................................................................................................................ 145
Full-time equivalent city government employees by function ........................................................... 146
Operating indicators by function ........................................................................................................ 148
Capital assets by function ................................................................................................................... 149
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 ............................................................................................................................. 151
Independent auditor’s report on compliance for each major federal program and report on internal
control over compliance required by the Uniform Guidance ............................................................. 153
Schedule of expenditures of federal awards ....................................................................................... 155
Notes to the schedule of expenditures of federal awards ................................................................... 159
Schedule of findings and questioned costs ......................................................................................... 160
2
---
December 11, 2017
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, 2017 is submitted herewith in accordance with the provisions of
Chapter 11 of the Code of Iowa. The City’s Finance Department prepared this report.
Responsibility for both the accuracy of the data presented and the completeness and fairness of
the presentation, including all disclosures, rest with the City. I believe the information, as
presented, is accurate in all material respects and presented in a manner designed to fairly present
the financial position and results of operations of the City. All disclosures necessary to enable the
reader to gain an understanding of the City's financial affairs have been included.
Management assumes full responsibility for the completeness and reliability of all of the
information presented in this report, based upon a comprehensive framework of internal control
that it has established for this purpose. Because the cost of internal controls should not exceed
anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the
financial statements will be free of any material misstatement.
Eide Bailly, LLP, a firm of independent public accountants has issued an unmodified (“clean”)
opinion on the City’s financial statements for the year ended June 30, 2017. Their opinion is
included in the Financial Section of this report.
The City is required to undergo an annual single audit in conformity with the provisions of Title 2
U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards (Uniform Guidance). Information to comply with the
Uniform Guidance and “Government Auditing Standards” is included in the Compliance Section of
this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management’s Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement the MD&A and should be read in
conjunction with it. The City’s MD&A can be found immediately following the report of the
independent auditors.
Profile of the Government
The City of Iowa City was incorporated April 6, 1853. The City is governed by a seven member
Council; each member serves a four-year term. Elections are held every two years allowing for
continuation in office of at least three members at each biennial election. The Council members are
elected at large, with three members nominated from specific districts and the remaining four
members nominated at large. The Council elects the Mayor from its own members for a two-year
term.
3
' ~ 1 -~= -~ ... ~~aj~~ ~ ,. .. ,~t: ~" CITY OF IOWA CITY
The City Council is the legislative body and makes all policy determinations for the City through
the enactment of ordinances and resolutions. It also adopts a budget to determine how the City will
obtain and spend its funds. The Council appoints members of boards, commissions and
committees.
The City Manager is the chief administrative officer for the City and is appointed by the City
Council. The City Manager implements policy decisions of the City Council and enforces City
ordinances. In addition, the City Manager appoints and directly supervises the directors of the
City’s operating departments and supervises the administration of the City’s personnel system. The
City Manager supervises 493 full-time and 44 part-time permanent municipal employees and 405
temporary employees, including a police force of 80 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 1
temporary employee.
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.
4
Information Useful in Assessing the Government’s Economic Condition
The City's economic strength is based on the educational sector, medical services, and diversified
manufacturing. The University of Iowa and the University of Iowa Hospital and Clinics are the
City’s largest employers with over 27,300 employees. The University of Iowa had a record high
enrollment in fall 2017 of 33,564 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. 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 also 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. Established firms continue to prosper and
expand in Iowa City and there are opportunities for growth of new businesses. Overall,
employment has remained steady as evidenced in the unemployment rate for Iowa City, which
continues to remain low at 2.9% for the month of June 2017, as compared to 3.2% for the State of
Iowa, and 4.4% 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 172 new single-family houses in 2016 as
compared to 137 in 2015; multi-family dwelling units added during fiscal year 2016 was 556,
compared to 499 in 2015; and mixed commercial/residential developments added 340 dwelling
units in 2016 versus 47 residential units in 2015. Altogether these housing additions totaled
1,068 units valued at $206,478,670 in 2016 versus a total of 683 units valued at $92,701,042 in
2015.
In addition to an increase in residential construction in 2016, the City also had an increase in
commercial construction. The value of permits for commercial construction increased by
$50,415,500 to $62,656,986 from 2015 to 2016, and the value of remodeling permits for
residential and commercial increased by $62,046,685 to $93,087,526 from 2015 to 2016.
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 2016 is estimated to be 74,398
by the U.S. Census Bureau.
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.
5
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 establishes the following organizational priorities, programs,
policies, and initiatives:
1. Promote a Strong and Resilient Local Economy
Identify how the City and local partners can effectively market and grow the local
foods economy
Review and consider amending the City’s Tax Increment Finance (TIF) policy
Promote neighborhood commercial districts and build stronger relations with
business owners throughout the community
Work closely with the University of Iowa and Kirkwood Community College on
future facilities and economic development opportunities, especially in the Riverfront
Crossings District
Work closely with the ICCSD, Kirkwood Community College, labor organizations,
Iowa Works and others to explore the feasibility of an industrial arts/crafts facility in
Iowa City
Proactively seek opportunities to facilitate development of our interstate entryways in
a manner consistent with this strategic plan
Develop programs aimed to enhance small business development and retention with a
focus on diverse communities
2. Encourage a Vibrant and Walkable Urban Core
Consider creating a new City Council committee with a focus on the sustainable built
environment
Support historic preservation efforts
Initiate public dialogue about the meaning and importance of a walkable
neighborhood and how to achieve it
Encourage diverse housing types and price points for a variety of income levels
3. Foster Healthy Neighborhoods throughout the City
Consider amending the City’s Annexation Policy to require the provision of
affordable housing in residential/mixed-use areas
Evaluate the implementation of a Form Based Code in one or two parts of the
community
Develop strategies to diversify the membership of neighborhood associations
Substantially improve access and use of public spaces through improvements to
sidewalks, streetscapes, parks, and schools
4. Maintain a Solid Financial Foundation
Continue to monitor the impact of the 2013 property tax reform and evaluate
alternative revenue sources as determined necessary
Continue to build the City’s Emergency Fund
Monitor potential changes to Moody’s rating criteria and maintain the City’s Aaa
bond rating
Continue to reduce the City’s property tax levy
Maintain healthy fund balances throughout the City’s diverse operations
6
5.Enhance Community Engagement and Intergovernmental Relations
Provide timely and appropriate input on the ICCSD’s planned 2017 bond referendum
Televise regular City Council work sessions
Significantly improve the Council and Staff’s ability to engage with diverse
populations on complex or controversial topics
6.Promote Environmental Sustainability
Raise Iowa City’s Bicycle Friendly Community status from Silver to Gold by 2017
and aspire toward a Platinum status in the future
Evaluate and consider implementation of a plastic bag policy
Undertake a project in FY 2017 that achieves a significant measurable carbon
emission reduction
Set a substantive and achievable goal for reducing city-wide carbon emissions by
2030, and create an ad-hoc climate change task force, potentially under an umbrella
STAR Communities committee, to devise a cost-effective strategy for achieving the
goal
Collaborate with community partners on sustainability efforts
7.Advance Social Justice and Racial Equity
Develop and implement a racial / socioeconomic equity review toolkit
Support the Housing First initiative and other local homeless efforts including the
temporary winter shelter
Consider creating a City Council committee with a focus on social justice and racial
equity
Evaluate initiatives to effectively engage the community’s youth
Identify and implement an achievable goal to reduce disproportionality in arrests
Create a racial equity grant program
Develop a partnership with the University of Iowa and other key stakeholders that
will aid efforts to recruit and retain a greater minority workforce
Identify a substantive and achievable goal for the provision of affordable housing in
Iowa City and implement strategies to achieve this goal
The City Council has also promoted private investment and re-development of other targeted
areas throughout the community. The areas that are currently being focused on include the
Riverfront Crossings area, the Downtown District, the Towncrest commercial area, and the
Riverside Drive commercial area.
The Riverfront Crossing area is an initiative to revitalize the area south of Iowa City’s downtown
district. This area was hard hit by flooding in 2008 and ideas for improving the district were
initiated as part of a combined flood mitigation plan. The new district will feature a riverfront
park with walking and biking trails, a variety of housing options near shopping, restaurants, a
state-of-the-art recital hall and recreational facilities and is a short walk to downtown Iowa City
and the University of Iowa campus.
7
The Riverfront Crossings area is anchored by a 76.8 acre area that was formerly comprised of
public facilities including the City’s north wastewater treatment plant. An $8.5 million hazard
mitigation grant from the State of Iowa assisted the City in removing the public facilities in this
area and then converting the area into a riverfront park and wetland. Construction of phases 1
and 2 of the park began in 2017 and are expected to be completed in 2018. On the north side of
the Riverfront Crossing area, the University of Iowa recently constructed the Voxman School of
Music, and there are also several public and private developments under various stages of
construction in this area including a 12-story, $33 million Hilton Garden Inn, a $102.5 million
mixed-use development with a 14-story tower and a 15-story tower that will include a hotel,
apartments, retail space, and office space. The City also completed construction of a $15.3
million, 600 space parking garage to service the growth in this area in 2017.
In the Downtown District, the City completed a streetscape plan for the Central Business District
which included lighting, landscaping, parking, utility improvements, art work, and pedestrian
amenities. Reconstruction and enhancements for the Washington Street corridor were completed
in 2017 and reconstruction of Black Hawk mini-park and the downtown pedestrian mall are
currently under design and are planned for 2018 and 2019.
Other buildings in the downtown that are undergoing or have recently completed major re-
development include the Wilson Building and public space is being developed into a 15-story
mixed-use development to be known as the Chauncey; this 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 estimated to be $49 million and will be assisted with tax increment
financing. This project is currently under construction.
In the Towncrest commercial area, City staff is working to facilitate redevelopment of key
properties 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. A major project underway is a Low Income Housing Tax Credit project to construct a
$7.4 million, 40 unit senior housing complex on the current site of a dilapidated commercial
structure. This project is under construction as of June 2017.
The Riverside Drive commercial area is an area that stretches from the University of Iowa
campus to the intersection of Highways 1 and 6 and is across the river from the Riverfront
Crossings development area. The development of a 4-story, $16.1 million multi-family/student
housing development in the Riverside Drive area was completed in late 2016, and adjacent to this
development several new retail spaces including a gas station/marketplace were also constructed.
The City is developing a streetscape plan for this area which will include lighting, trails,
landscaping, and other amenities and improvements. Construction of the streetscape
improvements are expected to begin in 2017. Adjacent to this area is the City’s aging public
works complex, which is being targeted for replacement and redevelopment. A plan for
replacement is underway with construction of a new Public Works Facility being designed during
2017 and construction to begin in 2018.
Long-term Financial Planning
It is our intent to support the major initiatives through budget appropriations, departmental
operations, and employee management so that the organization as a whole is moving in the same
direction.
8
A significant influence in the preparation of the three-year financial plan (FY2017 – FY2019)
was the passage of property tax reform (SF295) by the state legislature in 2013. The property tax
reform bill had multiple components including a property tax rollback for commercial and
industrial property, which reduced the taxable value of these property types. The bill established
a State funded “backfill” to reimburse the City for lost property tax revenues due to the
commercial and industrial rollback. The State “backfill” payments began in fiscal year 2015 but
will be capped at the fiscal year 2017 levels for years thereafter. The cumulative reduction in
commercial and industrial property tax revenues due to this rollback are estimated to be
$16,484,000 between fiscal year 2015 to fiscal year 2024, and the maximum reimbursement from
the State during that time period would be $15,789,000 for a net loss in revenues of $695,000.
For fiscal years 2015 through 2017, the City received actual State “backfill” payments for the
commercial and industrial rollback totaling $1,048,359, $2,080,228, and $1,582,567 in fiscal
years 2015, 2016, and 2017, respectively.
This bill also limited the annual taxable valuation growth of residential and agricultural property
to 3 percent, instead of the previous limit of 4 percent. The impact of this provision is that the
taxable percentage of residential property is expected grow at a slower pace. Without this
change, the estimated taxable percentage of residential property was estimated to be 60.85% in
fiscal year 2024. With this provision in place, the estimated taxable percentage in fiscal year
2024 is estimated to 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 $21,078,000 from fiscal year 2015 to
fiscal year 2024. The City will not receive any money from the State due to lost revenue from
this provision.
SF295 also established a multi-residential property classification that includes mobile home
parks, assisted living facilities, and property primarily intended for human habitation. A gradual
rollback will be applied to these properties to eventually tax them similarly to residential
property, rather than commercial, by fiscal year 2024. The estimated cumulative loss from fiscal
year 2015 to fiscal year 2024 is $15,684,000, which will not be reimbursed by the State of Iowa.
Fiscal year 2017 was the first year for this new class of property, and the estimated lost revenue
in fiscal year 2017 from this provision is $1,200,000.
Due to the passage of SF295, the City estimates its net revenue losses to be $3,033,000 from
fiscal year 2015 through fiscal year 2017. The cumulative net revenue loss from fiscal year 2015
through fiscal year 2024 is estimated to be $37,457,000. It is possible that this could affect the
City’s ability to finance services at current levels without finding other revenue sources or more
efficient ways to deliver services.
The City’s long-term financial planning strategy is to promote targeted economic development,
diversify its revenue structure, control spending and create efficiencies and to build adequate
reserves and contingencies into its financial structure. In addition, the City is annually reviewing
and adjusting its user fees, service charges, and fine structures to try to maintain all of its major
enterprise funds with a positive net income after depreciation but before capital contributions,
transfers, and extraordinary items. The City also continues to strive to reduce the City’s property
tax levy rate to be competitive for economic development purposes. For fiscal year 2013, the
levy rate was $17.269 per $1,000 of assessed value. The property tax levy rate has been reduced
for four consecutive years to $16.533 in fiscal year 2018. This has been a reduction of $.736 per
$1,000 of assessed value or 4.26% over that time period.
9
In looking at expenses for the FY17 – FY19 financial plan, the City will generally experience
increased expenditures; however at a modest pace. Bargaining unit wage increases are
approximately 2.40% to 2.60% each year; however, the budgeted full time equivalents (FTE) has
decreased from 607.66 in FY15 to 601.89 in FY18. In addition, public safety pension
contribution rates have decreased slightly in FY18 but are projected to increase slightly in FY19.
The City has averaged an increase in its health insurance premium rates of approximately 2.5%
over the previous five years, and is not projecting any dramatic changes to this trend in FY19.
Employee contributions, deductibles, and out-of-pocket maximums are expected to increase in
FY18 and FY19.
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, provide for necessary improvements to existing infrastructure, and uphold
fiscal integrity and maintain adequate cash reserves.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting (the Certificate) to the City of
Iowa City, Iowa for its Comprehensive Annual Financial Report for the fiscal year ended June 30,
2016. 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 thirty-two 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, 2017. 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 sixth consecutive year the City has received this award.
10
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, 2017. 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, TaraLynne Atkins and
Angie Ogden and Senior 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
11
12
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Iowa City
Iowa
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2016
Executive Director/CEO
City of Iowa City
Organization Chart
Community
City Manager
City Manager
Communications Office
Human Resources
Human Rights
Economic Development
Airport
Airport Operations
City Attorney City Clerk Library
Board Airport
Commission
Library
Library Operations
Library Foundation
Fire
Administration
Emergency Operations
Fire Prevention
Training
Police
Administration
Support Services
Field Operations
Parks &
Recreation
Administration
Recreation
Park Maintenance
Cemetery
Finance
Administration
Accounting
Purchasing
Revenue
Risk Management
Information Technology
Services
Senior
Center
Senior Center
Operations
Neighborhood &
Development Services
Administration
Development Services
Neighborhood Services
Metropolitan Planning
Organization of Johnson County
Public Works
Administration
Engineering
Streets
Wastewater Water
Refuse Collection
Landfill
Storm Water
Equipment
Transportation &
Resource
Management
Administration
Parking
Public Transportation
City Council
City Manager
City Clerk
City Clerk
City Attorney
City Attorney
13
/ '
'-~
]
I I I
I
I -I -I ,r '/' '\ /' /' " /' "
'-'-\.. / \.. /
-
/' / / / "
'--'--'-.)
'--
CITY OF IOWA CITY, IOWA
LISTING OF CITY OFFICIALS
June 30, 2017
ELECTED OFFICIALS
Term Expires
Mayor Jim Throgmorton January 2, 2020
Council Member and Mayor Pro Tem Kingsley Botchway II January 2, 2018
Council Member Susan Mims January 2, 2018
Council Member Terry Dickens January 2, 2018
Council Member Rockne Cole January 2, 2020
Council Member Pauline Taylor January 2, 2020
Council Member John Thomas January 2, 2020
APPOINTED OFFICIALS
Date of Hire
City Manager Geoff Fruin November 28, 2011
City Clerk Kellie Fruehling July 10, 2000
City Attorney Eleanor Dilkes March 18, 1996
DEPARTMENT DIRECTORS
Assistant City Manager Ashley Monroe December 1, 2016
Director of Neighborhood Development Services Douglas W. Boothroy September 22, 1975
Library Director Susan Craig July 28, 1975
Director of Public Works Ron Knoche April 28, 1999
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 Juli Seydell Johnson January 4, 2016
Director of Finance Dennis Bockenstedt February 15, 2013
Chief of Police Jody Matherly January 23, 2017
14
Financial
Section
Tabs
What inspires you, inspires us. Let’s talk. | eidebailly.com
1545 Associates Dr., Ste. 101 | Dubuque, IA 52002-2299 | T 563.556.1790 | F 563.557.7842 | EOE
15
Independent Auditor’s Report
To the Honorable Mayor and
Members of the City Council
City of Iowa City, Iowa
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Iowa City, Iowa,
(City) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which
collectively comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
CPAs & BUSINESS ADVISORS
16
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City of Iowa City, Iowa, as of June 30, 2017, and the
respective changes in financial position and, where applicable, cash flows thereof for the year then ended
in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
Fund Balance Restatement
As discussed in Note 14 to the financial statements, the City has elected to change its accounting method
for Notes Receivable. Accordingly, adjustments were made to restate beginning fund balances. Our
opinions are not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and the other required supplementary information listed in the table of contents be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquires of management about the methods or preparing the information
and comparing the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City of Iowa City, Iowa’s financial statements. The introductory section, combining
nonmajor fund financial statements, and statistical section are presented for purposes of additional
analysis and are not a required part of the financial statements. The accompanying Schedule of
Expenditures of Federal Awards is presented for purposes of additional analysis as required by the audit
requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), and is
not a required part of the financial statements.
The combining nonmajor fund financial statements and the schedule of expenditures of federal awards are
the responsibility of management and were derived from and relate directly to the underlying accounting
and other records used to prepare the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in
the United States of America. In our opinion, the combining nonmajor fund financial statements and the
Schedule of Expenditures of Federal Awards are fairly stated, in all material respects, in relation to the
basic financial statements as a whole.
17
The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 11,
2017, on our consideration of the City of Iowa City, Iowa’s internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements
and other matters. The purpose of that report is solely to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on the effectiveness of the City of Iowa City, Iowa’s internal control over financial reporting or
on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering the City’s internal control over financial reporting and compliance.
Dubuque, Iowa
December 11, 2017
18
(This page left blank intentionally.)
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, 2017. This narrative is intended to be used in
conjunction with additional information that is included in the letter of transmittal, which can be found on
pages 3 – 11 of this report.
Financial Highlights
The assets and deferred outflows of resources of the City of Iowa City exceeded its liabilities and deferred
inflows of resources at the close of the fiscal year ending June 30, 2017 by $631,405,000 (net position).
Of this amount, $92,928,000 (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 $36,067,000 during the fiscal year. Governmental activities
increased by $23,673,000 and business-type activities increased by $12,394,000.
At the close of the current fiscal year, the City’s governmental funds reported combined ending fund
balances of $106,381,000, an increase of $15,254,000 in comparison with the prior year. Of this total
amount, approximately $24,793,000 or 23.3% 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
$24,793,000 or 53.1% 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 and deferred outflows of
resources, liabilities and deferred inflows of resources, with the difference reported as net position. Over
time, increases or decreases in net position may serve as a useful indicator of whether the financial position of
the City is improving or deteriorating.
The statement of activities presents information showing how the City’s net position changed during the most
recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the
change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in
this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes
and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are
intended to recover all or a significant portion of their costs through user fees and charges (business-type
activities). The governmental activities of the City include Public Safety, Public Works (roads and traffic
controls), Culture and Recreation, Community and Economic Development, General Government, and
Interest on long-term debt. The business-type activities of the City include Airport, Housing Authority,
Parking, Sanitation, Stormwater Collection, Transit, Wastewater Treatment, and Water.
The government-wide financial statements may be found on pages 30 – 33 of this report.
19
Fund Financial Statements: A fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. The City, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the funds of the City can be divided into three categories: governmental funds,
proprietary funds, and fiduciary funds.
Governmental Funds: Governmental funds are used to account for essentially the same function reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows of
spendable resources, as well as on balances of spendable resources available at the end of the fiscal year.
Such information may be useful in evaluating a government’s near-term financing requirements and is
typically the basis that is used in developing the next annual budget.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it
is useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. Both the governmental fund balance
sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison.
The City has four major governmental funds: General Fund, Employee Benefits Fund, Bridge, Street and
Traffic Control Construction Fund, and Debt Service Fund. Information is presented separately in the
governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and
changes in fund balances for these major funds. Data from all other non-major governmental funds is
combined into a single aggregated presentation and are referenced under a single column as “Other
Governmental Funds”. Individual fund data on each of these non-major governmental funds is provided in
the form of combining statements elsewhere in this report.
The City adopts an annual appropriated budget for all governmental funds as required by state statute. Budget
comparisons have been provided for the Governmental funds and the Enterprise funds, to demonstrate
compliance with the adopted budget.
The basic governmental funds financial statements can be found on pages 34 – 37 of this report.
Proprietary Funds: The City maintains two different types of proprietary funds. Enterprise funds are used
to report the same functions presented as business-type activities in the government-wide financial statements.
The City uses enterprise funds to account for its Airport, Housing Authority, Parking, Sanitation, Stormwater
Collection, Transit, Wastewater Treatment, and Water activities. Internal Service funds are an accounting
device used to accumulate and allocate costs internally among the City’s various functions. The City has four
Internal Service Funds: Equipment Maintenance, Central Services, Loss Reserve, and Information
Technology. Because these services predominantly benefit governmental rather than business-type functions,
they have been included within governmental activities in the government-wide financial statements.
Proprietary funds financial statements provide the same type of information as the government-wide financial
statements, only in more detail. Parking, Wastewater Treatment, Water, Sanitation, Stormwater and Housing
Authority are considered to be major funds and are reported individually throughout the report. The other two
non-major enterprise funds are grouped together for reporting purposes and listed under a single heading
“Other Enterprise Funds”. Detailed information for each of the non-major funds is provided in the combining
statements on pages 108 – 110. Individual fund data for the Internal Service funds is provided in the form of
combining statements elsewhere in this report.
The basic proprietary fund financial statements can be found on pages 38 – 43 of this report.
20
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 44.
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 46 – 86 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 and deferred outflows of resources exceeded liabilities and deferred inflows of
resources by $631,405,000 at the close of the fiscal year ended June 30, 2017.
By far, the largest portion of the City’s net position reflect its investment in capital assets (e.g., land, building,
machinery and equipment, improvements other than buildings, and infrastructure), net any related debt to
acquire those assets that is still outstanding. The City uses these capital assets to provide services to its
citizens; consequently, these assets are not available for future spending. Although the City’s investment in
its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt
must be provided from other resources, since the capital assets themselves cannot be used to liquidate these
liabilities.
City of Iowa City's Net Position
June 30, 2017
(amounts expressed in thousands)
Governmental Business-type
activities activities Total
2017 2016 2017 2016 2017 2016
Current and other assets, as restated 190,352$ 176,348$ 119,968$ 116,163$ 310,320$ 292,511$
Capital assets 226,143 207,222 335,064 319,926 561,207 527,148
Total assets, as restated 416,495 383,570 455,032 436,089 871,527 819,659
Deferred outflows of resources 13,131 7,192 2,345 1,217 15,476 8,409
Long-term liabilities outstanding 112,931 94,598 68,385 57,712 181,316 152,310
Current and other liabilities 11,042 13,146 4,379 7,217 15,421 20,363
Total liabilities 123,973 107,744 72,764 64,929 196,737 172,673
Deferred inflows of resources, as restated 58,062 59,100 799 957 58,861 60,057
Net position:
Net investment in
capital assets 183,651 163,362 285,912 279,679 469,563 443,041
Restricted 47,676 42,154 21,238 22,269 68,914 64,423
Unrestricted 16,264 18,402 76,664 69,472 92,928 87,874
Total net position 247,591$ 223,918$ 383,814$ 371,420$ 631,405$ 595,338$
21
A portion of the City’s net position, $68,914,000 or 10.9%, represents resources that are subject to external
restrictions on how they may be used. The remaining balance of the unrestricted net position, $92,928,000 or
14.7%, may be used to meet the government’s ongoing obligations to its citizens and creditors. At the end of
the fiscal year ended June 30, 2017, the City is able to report positive balances in all three categories of net
position, both for the government as a whole, as well as for its separate governmental and business-type
activities.
The following is a more detailed review of FY17’s operation.
Governmental Activities: Governmental activities increased the City’s net position by $23,673,000. The
increase in net position of governmental activities is primarily due to receiving grants to fund expenses for
operations and capital assets.
The total revenues for governmental activities for FY17 were $98,143,000. Governmental activities are
primarily funded through taxes, $60,451,000 or 61.6%, and grants and contributions, $20,780,000 or 21.2%.
Taxes increased from the prior year by $4,620,000, mostly due to increased property taxes which was due to
an increase in the taxable value of all property. Grants and contributions increased from prior year by
$6,840,000 which is due to City’s expenses for a large flood mitigation project.
Expenses for governmental activities totaled $67,417,000. Governmental activities are tracked by function
including Public Safety, Public Works, Community and Economic Development, Culture and Recreation, and
General Government. In FY17, Public Safety accounted for the highest portion of governmental expenses,
$24,002,000 or 35.6%, and increased over the prior year due to an increase in pension expense. Culture and
Recreation expenses of $15,525,000 or 23.0% made up another large portion of the governmental expenses
and increased over the prior year due mainly to increases in parks and recreation operating costs. Public
Works expenses of $12,032,000 or 17.8% made up the third highest portion of governmental expenses and
increased due to an increase in depreciation and operating expenses.
Business-type Activities: Business-type activities increased the City’s total net position by $12,394,000. The
increase in net position was primarily from the Water and Wastewater Treatment funds. The increases in both
Water and Wastewater Treatment funds are due to transfers of capital assets from governmental capital
project funds. For all business-type activities, revenues exceeded expenses by $5,341,000.
Revenues for business-type activities totaled $59,133,000. The primary revenue source for business-type
activities is charges for services, $41,231,000 or 69.7%. In addition for FY17, the City’s business type-
activities had a significant portion, $15,635,000 or 26.4%, of their revenues from grants and contributions
used to help fund operation and capital projects for business-type activities.
The total expenses for business-type activities in FY17 were $53,792,000. Wastewater Treatment represented
the highest portion of business-type activities, $11,233,000 or 20.9%, with Sanitation, $9,123,000 or 17.0%,
Water, $8,921,000 or 16.6%, Housing Authority, $8,798,000 or 16.4%, and Transit, $7,263,000 or 13.5%,
making up the remainder of the majority of business-type activities expenses.
22
The graphs on the following pages represent a breakdown of revenue by source and expenses by program area
for governmental and business-type activities.
City of Iowa City's Changes in Net Position
(amounts expressed in thousands)
Governmental Business-type
activities activities Total
2017 2016 2017 2016 2017 2016
Revenues:
Program Revenues:
Charges for services 8,412$ 8,560 $ 41,231 $ 39,953$ 49,643 $ 48,513$
Operating grants and contributions 10,828 9,941 10,836 10,639 21,664 20,580
Capital grants and contributions 9,952 3,999 4,799 4,607 14,751 8,606
General Revenues:
Property taxes 57,649 53,114 - - 57,649 53,114
Other taxes 2,802 2,717 - - 2,802 2,717
Grants and contributions not restricted
to specific purposes 1,583 2,080 - - 1,583 2,080
Earnings on investments 1,397 1,045 938 715 2,335 1,760
Gain on disposal of capital assets 2,151 218 69 2,463 2,220 2,681
Other 3,369 4,464 1,260 362 4,629 4,826
Total revenues 98,143 86,138 59,133 58,739 157,276 144,877
Expenses:
Public safety 24,002 22,029 - - 24,002 22,029
Public works 12,032 10,839 - - 12,032 10,839
Culture and recreation 15,525 14,422 - - 15,525 14,422
Community and economic development 8,253 6,786 - - 8,253 6,786
General government 6,124 6,240 - - 6,124 6,240
Interest on long-term debt 1,481 1,287 - - 1,481 1,287
Wastewater treatment - - 11,233 11,866 11,233 11,866
Water - - 8,921 8,149 8,921 8,149
Sanitation - - 9,123 8,735 9,123 8,735
Housing authority - - 8,798 8,378 8,798 8,378
Parking - - 4,620 4,460 4,620 4,460
Airport - - 1,402 1,597 1,402 1,597
Stormwater - - 2,432 1,989 2,432 1,989
Transit - - 7,263 7,486 7,263 7,486
Total expenses 67,417 61,603 53,792 52,660 121,209 114,263
Change in net position before transfers
and special item 30,726 24,535 5,341 6,079 36,067 30,614
Transfers (7,053) (6,395) 7,053 6,395 - -
Reassignment of Cable Television to
governmental activities - 82 - (82) - -
Change in net position 23,673 18,222 12,394 12,392 36,067 30,614
Net position beginning of year 223,918 205,696 371,420 359,028 595,338 564,724
Net position end of year 247,591$ 223,918$ 383,814$ 371,420$ 631,405$ 595,338$
23
Charges for
services
8%
Grants and
Contributions
23%
Property taxes
59%
Other Taxes
3%
Misc.
Other
7%
Governmental Activities
FY2017 Revenue
by Source
Charges for
services
70%
Grants and
Contributions
26%
Misc. Other
4%
Business-Type Activities
FY2017 Revenue
by Source
24
i
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
26,000
Do
l
l
a
r
s
(
$
)
Program Area
Governmental Activities
FY2017 Expenses
by Program Area
(amounts expressed in thousands)
Wastewater
Treatment
WaterSanitationHousing
Authority
Parking
Airport
Stormwater
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
FY2017 Expenses
by Program Area
(amounts expressed in thousands)
25
Financial Analysis of the Government’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements.
Governmental Funds: The financial reporting focus of the City’s governmental funds is to provide
information on near-term inflows, outflows, and balances of spendable resources. Such information may
be/is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve
as a useful measure of a government’s net resources available for spending at the end of the fiscal year.
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, 2017, the City’s governmental funds reported combined ending fund
balances of $106,381,000, an increase of $15,254,000 in comparison with the prior year. Of this total
amount, $24,793,000 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 $73,915,000 or 69.5% contains external restraints on its use. The committed
and assigned fund balances of $5,199,000 or 4.9% and $1,342,000 or 1.3%, respectively, have been identified
by the City to be used for specific purposes. The nonspendable fund balance is $1,132,000 or 1.1%, 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, 2017, the
unassigned fund balance of the General Fund was $24,793,000 while General Fund’s total fund balance was
$42,096,000. 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 53.1% of
total General Fund expenditures of $46,706,000, while total fund balance represents 90.1% of that same
amount.
During the current fiscal year, the fund balance of the City’s General Fund decreased by $7,405,000. This is
due to transfers out to other funds.
The fund balance in the Bridge, Street, and Traffic Control Construction Fund was $15,537,000, an increase
of $2,366,000. 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 $27,356,000, an
increase of $18,607,000. 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 ending fund balance of the Debt Service Fund was $7,756,000, an increase of $1,183,000, all of which is
reserved for the payment of debt service (i.e. payment of general obligation principal and interest).
The ending fund balance of the Employee Benefits Fund was $2,521,000, an increase of $850,000 due to an
increase in property tax revenues.
26
Proprietary Funds: The City’s proprietary funds provide the same type of information found in the
government-wide financial statements, but in more detail.
The ending net position of the enterprise funds was $368,320,000, an increase in net position of $10,606,000.
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, $285,912,000 is net investment in capital assets. Unrestricted net position
totaled $61,170,000, an increase of $5,404,000 compared to the previous year.
The Internal Service funds showed net position totaling $39,652,000 as of June 30, 2017, an increase of
$4,188,000 primarily due to operating income in the Equipment Reserve Fund to build up reserves for future
capital outlay.
Budgetary Highlights
The City presents budgetary information as allowed by GASB Statement No. 41. Budgets are based on nine
functional areas as required by state statute, not by fund or fund type.
The City had two budget amendments during the fiscal year. These amendments increased budgeted revenues
by $9,148,000 or 6.2% to a total of $155,743,000 and the expenditure budget by $74,037,000 or 44.0% to a
total of $242,301,000. 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, 2017 amounts to $561,207,000, 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, 2017 increased by
$18,921,000 for governmental activities compared to the prior year and increased by $15,138,000 for
business-type activities from the prior year.
The following table reflects the $561,207,000 investment in capital assets, net of accumulated depreciation.
City of Iowa City's Capital Assets
(net of depreciation)
(amounts expressed in thousands)
Governmental Business-type
Activities Activities Total
2017 2016 2017 2016 2017 2016
Land 29,778$ 24,081 $ 30,737$ 35,590 $ 60,515$ 59,671$
Buildings 39,464 41,126 73,297 60,636 112,761 101,762
Improvements other than
buildings 3,954 4,092 4,341 4,703 8,295 8,795
Machinery and equipment 16,686 15,825 7,470 8,596 24,156 24,421
Infrastructure 113,494 97,904 209,505 207,756 322,999 305,660
Construction in progress 22,767 24,194 9,714 2,645 32,481 26,839
Total 226,143$ 207,222$ 335,064$ 319,926$ 561,207$ 527,148$
27
Major capital asset events during the current fiscal year included the following:
Work was completed for the 1st Avenue/IAIS Railroad Crossing Improvement which lowered 1st
Avenue under the IAIS Railroad and included a railroad bridge, retaining wall and utilities. The
construction in progress balance at the beginning of the year was $9,187,000. Additional expenses of
$3,111,000 were added in FY 17. The total cost of the project that was capitalized was $12,298,000
and is funded primarily by GO bonds with the remainder of the funding by federal or state grants.
Work was completed for the Washington Street Construction Project, which includes in addition to
reconstruct Washington Street, improvements to the sidewalk pavement and water main and
stormwater enhancement. The construction in progress balance at the beginning of the year was
$1,350,000. Additional expenses of $3,085,000 were added in FY 17. The total cost of the project
that was capitalized was $4,435,000 and is funded primarily from GO bonds.
Expenses for a variety of street and bridge construction were moved into construction in progress at
the end of FY17 for a total balance of $28,791,000. This construction in progress includes
$27,874,000 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 4 to the financial statements.
Debt Administration: At the end of the fiscal year, the City had total bonded debt outstanding of
$99,665,000. Of this amount, $51,645,000 comprises debt backed by the full faith and credit of the City.
$5,084,000 or 9.8% of these bonds is debt that will be paid with Tax Increment Financing revenues.
$48,020,000 represents revenue bonds secured solely by specific revenue sources.
The City issued $9,765,000 of General Obligation bonds and $23,265,000 of Revenue bonds during
FY17. This increase in debt was mostly offset by the retirement of debt for a net increase of City’s total
bonded debt by $3,370,000.
The City continues to have the same excellent bond rating on its General Obligation bonds that it has had
for the past several years. This rating is given to those bonds judged to be of the best quality and carrying
the smallest degree of investment risks. The City's bond ratings by Moody’s Investors Services, Inc. as of
June 30, 2017 were as follows:
General obligation bonds Aaa
Wastewater treatment revenue bonds Aa2
Water revenue bonds Aa2
City of Iowa City's Outstanding Debt
General Obligation and Revenue Bonds
(amounts expressed in thousands)
Governmental Business-type
Activities Activities Total
2017 2016 2017 2016 2017 2016
General obligation bonds 51,645 $ 55,055 $ -$ 295 $ 51,645 $ 55,350 $
Revenue bonds 15,200 2,525 32,820 38,420 48,020 40,945
Total 66,845$ 57,580$ 32,820$ 38,715$ 99,665$ 96,295$
28
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 $267,511,000. With outstanding debt applicable
to this limit of $84,864,000 we are utilizing 31.7% 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 FY17, the City
collected $939,000 in local franchise fee.
The City expects continued constraints by the State’s property tax formula. The State passed property tax
reform, which will negatively affect the City’s general operating funds. Without the potential for new
revenue sources, like those mentioned above, the City’s opportunities for new initiatives are limited. The
Council has established a balanced budget in the General Fund for FY18 that strives to maintain current
service delivery levels. The tax levy rate per $1,000 of assessed valuation for FY18 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 3.579
Employee Benefits Levy 3.144
Transit Levy 0.950
Liability Insurance Levy 0.290
Library Levy 0.270
Total City Levy $ 16.333
29
Governmental Business-type
Activities Activities Total
Assets
Equity in pooled cash and investments 111,030$ 64,719$ 175,749$
Receivables:
Property tax 56,639 - 56,639
Accounts and unbilled usage 820 3,469 4,289
Interest 428 351 779
Notes 5,524 540 6,064
Internal balances (15,494) 15,494 -
Due from other governments 4,519 2,435 6,954
Prepaid item 811 3 814
Inventories 730 763 1,493
Assets held for resale 750 - 750
Restricted assets:
Equity in pooled cash and investments 24,560 32,191 56,751
Other post employment benefits asset 35 3 38
Capital assets:
Land and construction in progress 52,545 40,451 92,996
Other capital assets (net of accumulated depreciation)173,598 294,613 468,211
Total assets 416,495 455,032 871,527
Deferred Outflows of Resources
Pension related deferred outflows 13,131 2,345 15,476
Liabilities
Accounts payable 2,127 997 3,124
Contracts payable 2,521 539 3,060
Accrued liabilities 4,182 440 4,622
Interest payable 133 718 851
Deposits 1,230 1,606 2,836
Advances from grantors 144 - 144
Due to other governments 42 79 121
Notes payable 663 - 663
Noncurrent liabilities:
Due within one year:
Employee vested benefits 1,252 403 1,655
Capital lease obligation - 524 524
Bonds payable 8,230 5,326 13,556
Due in more than one year:
Employee vested benefits 989 291 1,280
Net pension liability 39,080 8,975 48,055
Other post employment benefits obligation 3,660 1,222 4,882
Notes payable 211 - 211
Capital lease obligation - 13,958 13,958
Bonds payable 59,509 29,095 88,604
Landfill closure/post-closure liability - 8,591 8,591
Total liabilities 123,973$ 72,764$ 196,737$
(continued)
(amounts expressed in thousands)
CITY OF IOWA CITY, IOWA
STATEMENT OF NET POSITION
June 30, 2017
30
Governmental Business-type
Activities Activities Total
Deferred inflows of resources
Unavailable revenues:
Pension related deferred inflows 1,603$ 550$ 2,153$
Deferred amount on refunding - 249 249
Succeeding year property taxes 56,459 - 56,459
Total deferred inflows of resources 58,062 799 58,861
Net position
Net investment in capital assets 183,651 285,912 469,563
Restricted for or by:
Employee benefits 2,810 - 2,810
Capital projects 30,856 - 30,856
Debt service 7,221 - 7,221
Police 349 - 349
Other purposes 2,590 - 2,590
Bond ordinance - 12,112 12,112
State statute - 5,939 5,939
Future improvements - 100 100
Grant agreement 3,850 3,087 6,937
Unrestricted 16,264 76,664 92,928
Total net position 247,591$ 383,814$ 631,405$
The notes to the financial statements are an integral part of this statement.
June 30, 2017
(amounts expressed in thousands)
CITY OF IOWA CITY, IOWA
STATEMENT OF NET POSITION (continued)
31
Operating Capital
Charges Grants and Grants and
Functions/Programs:Expenses for Services Contributions Contributions
Governmental activities:
Public safety 24,002$ 5,286$ 196$ 467$
Public works 12,032 724 8,711 9,343
Culture and recreation 15,525 842 74 36
Community and economic development 8,253 36 1,847 106
General government 6,124 1,524 - -
Interest on long-term debt 1,481 - - -
Total governmental activities 67,417 8,412 10,828 9,952
Business-type activities:
Wastewater treatment 11,233 12,277 - 2,226
Water 8,921 9,275 - 869
Sanitation 9,123 9,927 - -
Housing authority 8,798 321 8,532 -
Parking 4,620 5,453 - -
Airport 1,402 345 69 58
Stormwater 2,432 1,544 - 1,251
Transit 7,263 2,089 2,235 395
Total business-type activities 53,792 41,231 10,836 4,799
Total 121,209$ 49,643$ 21,664$ 14,751$
General revenues:
Property taxes, levied for general purposes
Hotel/motel tax
Gas and electric tax
Utility franchise tax
Grants and contributions not restricted to specific purposes
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, 2017
(amounts expressed in thousands)
32
Governmental Business-type
Activities Activities Total
(18,053)$ -$ (18,053)$
6,746 - 6,746
(14,573) - (14,573)
(6,264) - (6,264)
(4,600) - (4,600)
(1,481) - (1,481)
(38,225) - (38,225)
- 3,270 3,270
- 1,223 1,223
- 804 804
- 55 55
- 833 833
- (930) (930)
- 363 363
- (2,544) (2,544)
- 3,074 3,074
(38,225) 3,074 (35,151)
57,649 - 57,649
1,137 - 1,137
726 - 726
939 - 939
1,583 - 1,583
1,397 938 2,335
2,151 69 2,220
3,369 1,260 4,629
(7,053) 7,053 -
61,898 9,320 71,218
23,673 12,394 36,067
223,918 371,420 595,338
247,591$ 383,814$ 631,405$
Net (Expense) Revenue and
Changes in Net Position
33
Capital
Special Revenue Projects
Bridge,
Street, and
Traffic Other
Employee Control Debt Governmental
General Benefits Construction Service Funds Total
Assets
Equity in pooled cash and investments 32,500 $ 2,413$ 12,151 $ 7,090 $ 25,459 $ 79,613 $
Receivables:
Property tax 32,965 10,783 - 12,564 327 56,639
Accounts and unbilled usage 410 - 252 - 1 663
Interest 161 - 43 106 29 339
Notes 1,292 - - 399 3,833 5,524
Advances to other funds - - - 125 - 125
Due from other governments 1,887 316 931 - 1,318 4,452
Inventories - - - - 264 264
Prepaid item 719 80 - - - 799
Assets held for resale 750 - - - - 750
Restricted assets:
Equity in pooled cash and investments 10,268 - 5,272 - 9,020 24,560
Total assets 80,952$ 13,592$ 18,649$ 20,284$ 40,251$ 173,728$
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable 1,191 $ 4$ 11 $ 5 $ 430 $ 1,641 $
Contracts payable - - 2,077 - 444 2,521
Accrued liabilities 1,321 2 12 - 101 1,436
Advances from other funds - - - - 125 125
Due to other governments 38 - - - 4 42
Interest payable 4 - - - - 4
Notes payable 663 - - - - 663
Liabilities payable from restricted assets:
Deposits 1,224 - - - 6 1,230
Advances from grantors 7 - - - 137 144
Total liabilities 4,448 6 2,100 5 1,247 7,806
Deferred inflows of resources :
Unavailable revenues:
Succeeding year property taxes 32,863 10,750 - 12,523 323 56,459
Grants 6 - 581 - 117 704
Other 1,539 315 431 - 93 2,378
Total deferred inflows of resources 34,408 11,065 1,012 12,523 533 59,541
Fund balances:
Nonspendable 788 80 - - 264 1,132
Restricted 9,974 2,441 15,537 7,756 38,207 73,915
Committed 5,199 - - - - 5,199
Assigned 1,342 - - - - 1,342
Unassigned 24,793 - - - - 24,793
Total fund balances 42,096 2,521 15,537 7,756 38,471 106,381
Total liabilities, deferred inflows
of resources and fund balances 80,952 $ 13,592$ 18,649 $ 20,284 $ 40,251 $ 173,728 $
The notes to the financial statements are an integral part of this statement.
CITY OF IOWA CITY, IOWA
BALANCE SHEET
GOVERNMENTAL FUNDS
June 30, 2017
(amounts expressed in thousands)
34
Total governmental fund balances 106,381$
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.39,652
Other long-term assets are not available to pay for current period
expenditures and therefore are unavailable in the funds:
Grants and other receivables - Earned but unavailable.3,082
Capital assets used in governmental activities are not current
financial resources and therefore are not reported in the funds. 214,188
Pension related deferred outflows of resources and deferred
inflows of resources are not due and payable in the current
period and therefore are not reported in the funds.
Deferred outflows of resources 12,750$
Deferred inflows of resources (1,515) 11,235
Net pension liabilities are not due and payable in the
current period and therefore are not reported in the funds.(37,683)
Accrued compensated absences are not due and payable in the
current period and therefore are not reported in the funds.(2,128)
Accrued post employment benefit obligations are not due and
payable in the current period and therefore are not reported
in the funds.(3,563)
Bonds payable are not due and payable in the current period
and therefore are not reported in the funds.(67,739)
Notes payable are not due and payable in the current period
and therefore are not reported in the funds.(211)
Accrued interest on bonds (129)
Internal balance due to integration of internal service funds (15,494)
Total net position of governmental activities 247,591$
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, 2017
35
Capital
Special Revenue Projects
Bridge,
Street, and
Traffic Other
Employee Control Debt Governmental
General Benefits Construction Service Funds Total
Revenues
Taxes 34,290$ 10,537$ -$ 13,109$ 2,516$ 60,452$
Licenses and permits 3,521 - - - - 3,521
Intergovernmental 3,574 295 8,663 359 11,249 24,140
Charges for services 1,665 302 22 - 366 2,355
Fines and forfeits 750 - - - -750
Use of money and property 839 - 69 181 146 1,235
Miscellaneous 1,692 12 1 - 396 2,101
Total revenues 46,331 11,146 8,755 13,649 14,673 94,554
Expenditures
Current:
Public safety 22,005 484 - - 24 22,513
Public works 1,803 - 2,290 - 5,093 9,186
Culture and recreation 12,890 - -- 451 13,341
Community and economic development 3,074 - -- 4,621 7,695
General government 5,471 384 - 16 11 5,882
Debt service:
Principal - - - 13,305 - 13,305
Interest - - - 1,597 - 1,597
Capital outlay 1,463 - 14,704 - 2,238 18,405
Total expenditures 46,706 868 16,994 14,918 12,438 91,924
Excess (deficiency) of revenues over
(under) expenditures (375) 10,278 (8,239) (1,269) 2,235 2,630
Other Financing Sources (Uses)
Issuance of debt - - 6,023 654 15,893 22,570
Sale of capital assets 268 - - - 2,024 2,292
Premiums on issuance of bonds - - 32 3 85 120
Transfers in 10,725 - 16,343 1,795 5,812 34,675
Transfers out (18,023) (9,428) (11,793) - (7,789) (47,033)
Total other financing sources and (uses)(7,030) (9,428) 10,605 2,452 16,025 12,624
Net change in fund balances (7,405) 850 2,366 1,183 18,260 15,254
Fund Balances, Beginning, as restated 49,501 1,671 13,171 6,573 20,211 91,127
Fund Balances, Ending 42,096$ 2,521$ 15,537$ 7,756$ 38,471$ 106,381$
The notes to the financial statements are an integral part of this statement.
CITY OF IOWA CITY, IOWA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended June 30, 2017
(amounts expressed in thousands)
36
Net change in fund balances - total governmental funds 15,254 $
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 17,060 $
Transfers of capital assets (to)\from enterprise funds - net 4,863
Capital assets contributed 2,574
Depreciation expense (6,749) 17,748
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 (22,570)
Premium on bonds issued (120)
Repayments of debt 13,305
Amortization of premium 135 (9,250)
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.(1,323)
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 (99)
Pension expense (458)
Change in accrued post employment benefit obligations (424)
Change in accrued interest on debt (19)
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.(156)
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.2,400
Change in net position of governmental activities 23,673 $
The notes to the financial statements are an integral part of this statement.
(amounts expressed in thousands)
For the Year Ended June 30, 2017
CITY OF IOWA CITY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
37
Governmental
Activities -
Other Internal
Wastewater Housing Enterprise Service
Parking Treatment Water Sanitation Stormwater Authority Funds Total Funds
Assets
Current assets:
Equity in pooled cash and investments 11,896 $ 18,830 $ 9,566 $ 13,965 $ 1,547 $ 3,685 $ 5,230 $ 64,719 $ 31,417$
Receivables:
Accounts and unbilled usage 10 1,525 1,043 698 154 - 39 3,469 157
Interest 31 100 42 92 5 65 16 351 89
Notes - - - - - 540 - 540 -
Advances to other funds - - - 1,901 - - - 1,901 -
Due from other governments - 1 1 63 82 106 2,182 2,435 67
Inventories - - 469 - - - 294 763 466
Prepaid item - - - - - - 3 3 12
Assets held for resale - - - - - - - - -
Total current assets 11,937 20,456 11,121 16,719 1,788 4,396 7,764 74,181 32,208
Noncurrent assets:
Restricted assets:
Equity in pooled cash and investments 1 9,136 4,640 14,547 - 3,706 161 32,191 -
Other post employment benefits asset - - - - - - 3 3 35
Capital assets:
Land 3,746 759 6,296 2,264 2,264 620 14,788 30,737 45
Buildings 41,647 36,858 24,019 5,467 - 5,350 20,776 134,117 1,531
Improvements other than buildings 328 7,119 2,616 421 - 9 396 10,889 50
Machinery and equipment 1,504 7,612 10,801 147 27 106 10,613 30,810 22,333
Infrastructure - 149,533 63,017 17,366 58,796 - 18,713 307,425 2,849
Accumulated depreciation (19,364) (76,030) (36,740) (14,845) (13,693) (4,468) (23,488) (188,628) (15,346)
Construction in progress - 5,940 1,566 129 1,537 - 542 9,714 493
Total noncurrent assets 27,862 140,927 76,215 25,496 48,931 5,323 42,504 367,258 11,990
Total assets 39,799 161,383 87,336 42,215 50,719 9,719 50,268 441,439 44,198
Deferred Outflows of Resources
Pension related deferred outflows 251 $ 355 $ 430 $ 422 $ 41 $ 146 $ 700 $ 2,345 $ 381$
(continued)
Business-type Activities - Enterprise Funds
CITY OF IOWA CITY, IOWA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
June 30, 2017
(amounts expressed in thousands)
38
GovernmentalActivities -
Other Internal
Wastewater Housing Enterprise ServiceParkingTreatmentWaterSanitationStormwaterAuthorityFundsTotalFunds
Liabilities
Current liabilities:
Accounts payable 82 $ 225 $ 237 $ 211 $ 41 $ 34 $ 167 $ 997 $ 486$
Contracts payable 144 210 34 55 45 - 51 539 -
Accrued liabilities 43 69 81 72 9 28 138 440 2,746
Employee vested benefits 39 62 69 83 1 32 117 403 63
Due to other governments - 2 25 2 - 34 16 79 -
Interest payable 48 426 244 -- - - 718 -
Capital lease obligation 524 - - -- - - 524 -
Bonded debt payable (net of unamortized
premium and discounts)- 3,841 1,485 -- - - 5,326 -
Total current liabilities 880 4,835 2,175 423 96 128 489 9,026 3,295
Noncurrent liabilities:
Liabilities payable from restricted assets:
Deposits 1 - 965 5 - 619 16 1,606 -
Advances from other funds 1,901 - --- - - 1,901 -
Employee vested benefits 27 44 52 61 1 23 83 291 50
Capital lease obligation 13,958 - --- - - 13,958 -
Bonded debt payable (net of unamortized
premium and discounts)- 17,087 12,008 -- - - 29,095 -
Net pension liability 995 1,469 1,668 1,648 110 608 2,477 8,975 1,397
Other post employment benefits obligation 162 187 201 259 1 75 337 1,222 97
Landfill closure/postclosure liability - - - 8,591 - - - 8,591 -
Total noncurrent liabilities 17,044 18,787 14,894 10,564 112 1,325 2,913 65,639 1,544
Total liabilities 17,924 23,622 17,069 10,987 208 1,453 3,402 74,665 4,839
Deferred Inflows of Resources
Pension related deferred inflows 61 88 102 100 7 36 156 550 88
Deferred amount on refunding - 148 101 -- - - 249 -
Total deferred inflow of resources 61 236 203 100 7 36 156 799 88
Net Position
Net investment in capital assets 13,379 110,715 57,981 10,949 48,931 1,617 42,340 285,912 11,955
Restricted by bond ordinance - 8,707 3,405 -- - - 12,112 -
Restricted by state statute - -- 5,939 - - - 5,939 -
Restricted for future improvements - -- -- - 100 100 -
Restricted by grant agreement - -- -- 3,087 -3,087 -
Unrestricted 8,686 18,458 9,108 14,662 1,614 3,672 4,970 61,170 27,697
Total net position 22,065 $ 137,880 $ 70,494 $ 31,550 $ 50,545 $ 8,376$ 47,410 $ 368,320 $ 39,652$
Adjustment to reflect the consolidation of internal service fund activities
related to enterprise funds.15,494
Net position of business-type activities 383,814 $
The notes to the financial statements are an integral part of this statement.
(amounts expressed in thousands)
June 30, 2017
PROPRIETARY FUNDS
STATEMENT OF NET POSITION (continued)
Business-type Activities - Enterprise Funds
CITY OF IOWA CITY, IOWA
39
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
===== ===== ===== ===== ===== = = ===== ======
Governmental
Activities -
Other Internal
Wastewater Housing Enterprise Service
Parking Treatment Water Sanitation Stormwater Authority Funds Total Funds
Operating Revenues:
Charges for services 5,453$ 12,277$ 9,275$ 9,927$ 1,544$ 321$ 2,434$ 41,231 $ 18,355$
Miscellaneous 41 754 41 77 136 147 64 1,260 -
Total operating revenues 5,494 13,031 9,316 10,004 1,680 468 2,498 42,491 18,355
Operating Expenses:
Personal services 1,767 2,899 3,288 3,165 310 913 4,042 16,384 2,175
Commodities 621 1,094 1,031 220 583 20 751 4,320 1,838
Services and charges 1,295 2,364 2,013 4,880 358 7,765 2,122 20,797 9,455
3,683 6,357 6,332 8,265 1,251 8,698 6,915 41,501 13,468
Depreciation 880 4,506 2,344 1,560 1,192 121 1,884 12,487 1,798
Total operating expenses 4,563 10,863 8,676 9,825 2,443 8,819 8,799 53,988 15,266
Operating income (loss)931 2,168 640 179 (763) (8,351) (6,301) (11,497) 3,089
Nonoperating Revenues (Expenses):
Gain (loss) on disposal of capital assets - (4,835) 1 (88) - 47 3 (4,872) 84
Operating grants - -- - - 8,532 2,304 10,836 -
Interest income 37 352 213 253 8 45 30 938 163
Interest expense (134) (558) (447) - - - - (1,139) -
Total nonoperating revenues (expenses)(97) (5,041) (233) 165 8 8,624 2,337 5,763 247
Income (loss) before capital contributions
and transfers 834 (2,873) 407 344 (755) 273 (3,964) (5,734) 3,336
Capital contributions - 2,226 869 - 1,251 - 453 4,799 35
Transfers in - 5,911 2,305 - 2,978 - 3,385 14,579 1,322
Transfers out - (2,436) (250) (191) (115) (46) - (3,038) (505)
Change in net position 834 2,828 3,331 153 3,359 227 (126) 10,606 4,188
Net Position, Beginning 21,231 135,052 67,163 31,397 47,186 8,149 47,536 35,464
Net Position, Ending 22,065 $ 137,880 $ 70,494 $ 31,550 $ 50,545 $ 8,376$ 47,410 $ 39,652$
Adjustment to reflect the consolidation of internal service fund activities
related to enterprise funds 1,788
Change in net position of business-type activities 12,394 $
The notes to the financial statements are an integral part of this statement.
Business-type Activities - Enterprise Funds
CITY OF IOWA CITY, IOWA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
For the Year Ended June 30, 2017
(amounts expressed in thousands)
40
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
----------------------------------------------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
41
~:~ ----------------
Governmental
Activities -
Other Internal
Wastewater Housing Enterprise Service
Parking Treatment Water Sanitation Stormwater Authority Funds Total Funds
Cash Flows From Operating Activities
Receipts from customers and users 5,493 $ 12,961 $ 9,277 $ 9,863 $ 1,641 $ 615 $ 2,497 $ 42,347$ 18,318 $
Payments to suppliers (1,802) (3,397) (2,834) (4,852) (1,069) (7,695) (3,216) (24,865) (11,845)
Payments to employees (1,732) (2,862) (3,269) (3,140) (309) (903) (3,975) (16,190) (2,295)
Net cash flows from (used for) operating activities 1,959 6,702 3,174 1,871 263 (7,983) (4,694) 1,292 4,178
Cash Flows From Noncapital Financing Activities
Grants received - - - 6 85 8,437 641 9,169 -
Transfers from other funds - 5,911 2,305 - 2,978 - 3,385 14,579 1,332
Transfers to other funds - (2,436) (250) (191) (115) (46) - (3,038) (505)
Repayment/(payment) of notes receivable - - - - - 48 - 48 -
Repayment of advances from other funds (229) - - - - (18) - (247) -
Repayment of advances to other funds - - - 229 - - - 229 -
Net cash flows from (used for) noncapital financing
activities (229) 3,475 2,055 44 2,948 8,421 4,026 20,740 827
Cash Flows From Capital and Related Financing
Activities
Capital grants received - 3,108 - - - - 151 3,259 -
Acquisition and construction of property and
equipment (95) (8,616) (2,701) (1,327) (2,958) (1) (947) (16,645) (3,136)
Proceeds from sale of property - 18 1 - - 47 3 69 118
Proceeds from issuance of debt - 10,123 4,032 - - - - 14,155 -
Principal paid on capital lease obligation (1,015) - - - - - - (1,015) -
Interest paid on capital lease obligation (86) - - - - - - (86) -
Principal paid on bonded debt - (13,863) (5,542) - - - - (19,405) -
Interest paid on bonded debt (984) (524) - - - - (1,508) -
Net cash flows from (used for) capital and related
financing activities (1,196) (10,214) (4,734) (1,327) (2,958) 46 (793) (21,176) (3,018)
Cash Flows From Investing Activities
Interest on investments 32 333 204 197 7 34 26 833 147
Net increase (decrease) in cash and cash equivalents 566 296 699 785 260 518 (1,435) 1,689 2,134
Cash and Cash Equivalents, Beginning 11,331 27,670 13,507 27,727 1,287 6,873 6,826 95,221 29,283
Cash and Cash Equivalents, Ending 11,897$ 27,966$ 14,206$ 28,512$ 1,547 $ 7,391 $ 5,391 $ 96,910$ 31,417 $
(continued)
Business-type Activities - Enterprise Funds
CITY OF IOWA CITY, IOWA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended June 30, 2017
(amounts expressed in thousands)
42
Governmental
Activities -
Other Internal
Wastewater Housing Enterprise Service
Parking Treatment Water Sanitation Stormwater Authority Funds Total Funds
Reconciliation of operating income (loss)
to net cash flows from (used for) operating activities:
Operating income (loss)931$ 2,168$ 640$ 179$ (763)$ (8,351)$ (6,301)$ (11,497) $ 3,089$
Adjustments to reconcile operating income
(loss) to net cash flows from (used for) operating activities:
Depreciation expense 880 4,506 2,344 1,560 1,192 121 1,884 12,487 1,798
Changes in:
Receivables:
Accounts and unbilled usage - (71) (124) (85) (25) 2 (2) (305) (13)
Due from other governments - 1 - (53) - (1) 1 (52) (24)
Inventories - -(18) - - - (14) (32) 5
Prepaid item - -- - - - (3) (3) (12)
Assets held for resale - -- - - 73 - 73 -
Accounts payable 114 59 221 (74) (128) 13 (298) (93) (545)
Accrued liabilities 1 7 11 2 1 3 9 34 (151)
Employee vested benefits 6 7 (6) 8 (1) 1 (1) 14 10
Due to other governments - 2 7 (1) - 4 (28) (16) -
Unearned revenue - -- -(14) - - (14) -
Deposits (1) - 85 (3) - 146 - 227 -
Net pension liability 175 246 283 276 25 101 451 1,557 249
Deferred outflows of resources (114) (160) (207) (204) (23) (66) (354) (1,128) (186)
Deferred inflows of resources (47) (81) (76) (77) (2) (36) (88) (407) (56)
Other post employment benefits asset/obligation 14 18 14 20 1 7 50 124 14
Landfill closure/postclosure liability - - - 323 - - - 323 -
Total adjustments 1,028 4,534 2,534 1,692 1,026 368 1,607 12,789 1,089
Net cash flows from (used for) operating activities 1,959$ 6,702$ 3,174$ 1,871$ 263$ (7,983)$ (4,694)$ 1,292$ 4,178$
Noncash Investing, Capital, and
Financing Activities:
Contributions of capital assets from
government and others -$ 1,151$ 869$ -$ 1,251$ -$ -$ 3,271$ 35$
Contributions of capital assets to
government and others -$ 4,853$ -$ -$ -$ -$ -$ 4,853$ -$
Purchase of building with capital lease 15,497 $ -$ -$ -$ -$ -$ -$ 15,497 $ -$
The notes to the financial statements are an integral part of this statement.
Business-type Activities - Enterprise Funds
CITY OF IOWA CITY, IOWA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended June 30, 2017
(amounts expressed in thousands)
43
Agency
Funds
Assets
Equity in pooled cash and investments 163$
Interest receivable 1
Total assets 164$
Liabilities
Accounts payable 4$
Due to agency 160
Total liabilities 164$
The notes to the financial statements are an integral part of this statement.
June 30, 2017
(amounts expressed in thousands)
CITY OF IOWA CITY
STATEMENT OF FIDUCIARY
ASSETS AND LIABILITIES
44
45
~:~ ----------------
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS
June 30, 2017
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.
46
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Separate financial statements are provided for governmental funds and proprietary funds. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund
financial statements.
Description of Funds
These financial statements include all funds owned or administered by the City or for which the City acts
as custodian.
The accounts of the City are organized on the basis of funds, each of which is considered to be a separate
accounting entity. The fund categories are governmental, proprietary, and fiduciary. Each fund is accounted
for by providing a separate set of self-balancing accounts that comprise its assets, deferred outflows of
resources, liabilities, deferred inflows of resources, net position, revenues, and expenditures or expenses,
as appropriate. The individual funds account for the governmental resources allocated to them for the
purpose of carrying on specific activities in accordance with laws, regulations, or other restrictions.
Basis of Accounting
The accounting and financial reporting treatment applied to a fund is determined by its “measurement
focus.” The government-wide financial statements 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.
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 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.
The Debt Service Fund accounts for the accumulation of resources for the payment of general long-
term debt principal, interest, and related costs. 47
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
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 Stormwater Fund is used to account for the operation and maintenance of the stormwater
utility system.
The Housing Authority Fund is used to account for the operations and activities of the City’s low
and moderate income housing assistance and public housing programs.
Additionally, the City reports internal service funds to account for goods and services provided by one
department to other City departments on a cost reimbursement basis. The funds in this category are the
Equipment Maintenance Fund, Central Services Fund, Loss Reserve Fund, and the Information Technology
Fund.
The City also reports 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.
48
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Uses of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue, expenditures and expenses, as appropriate, during the
reporting period. Actual results could differ from these estimates. Material estimates that are particularly
susceptible to significant change in the near-term relate to the determination of other post employment
benefit obligation, net pension liability, landfill closure and post-closure care costs, total capacity of the
landfill at closure, and calculation of the costs of claims incurred, but not reported.
Cash and Investments
The City maintains one primary demand deposit account through which the majority of its cash resources
are processed. Substantially all investment activity is carried on by the City in an investment pool, except
for those funds required to maintain their investments separately. The earnings on the pooled investments
are allocated to the funds on a systematic basis. All investments are stated at fair value except for the Iowa
Public Agency Investment Trust (IPAIT) which is valued at amortized cost pursuant to Rule 2a-7 under the
Investment Company Act of 1940.
For the purpose of the Statement of Cash Flows, restricted and non-restricted investments with a maturity
of three months or less when purchased are considered cash equivalents.
Receivables and Revenue Recognition
Property tax receivable is recognized in governmental funds on the levy or lien date, which is the date that
the tax asking is certified by the City to the County Board of Supervisors. Current year delinquent property
tax receivable represents unpaid taxes from the current year. The succeeding year property tax receivable
represents taxes certified by the City to be collected in the next fiscal year for the purposes set out in the
budget for the next fiscal year. By statute, the City is required to certify its budget to the County Auditor
by March 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, it will not be recognized as revenue until the
year for which it is levied.
Federal and state grants are recorded as receivables and the revenue is recognized during the period in
which the City fulfills the requirements for receiving the grant awards, as long as the susceptible to accrual
criteria are met.
Income from investments in all fund types and from charges for services in proprietary fund types is
recognized when earned. Licenses and permits, fines and forfeitures, fees and refunds, charges for services
(in governmental fund types), miscellaneous, and other revenues are recorded as revenue when received in
cash because they are generally not measurable until actually received.
49
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Inventories
Inventories are recognized only in those funds in which they are material to the extent of affecting
operations. For the City, these are the Other Shared Revenue and Grants Fund, Transit Fund, Water Fund,
and the Equipment Maintenance Fund. Inventories of materials and supplies are determined by actual count
and priced on the FIFO method.
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 acquisition value at the date of donation when received as donated properties.
Depreciation is computed using the straight-line method over the following estimated useful lives:
Infrastructure 3 – 100 years
Buildings and structures 20 – 50 years
Improvements other than buildings 10 – 50 years
Vehicles 2 – 20 years
Other equipment 3 – 30 years
Deferred Outflows of Resources
Deferred outflows of resources represent a consumption of net position that applies to a future period(s)
and will not be recognized as an outflow of resources (expense/expenditure) until then. Deferred outflows
of resources consist of unrecognized items not yet charged to pension expense and contributions from the
employer after the measurement date but before the end of the employer’s reporting period.
Bond Premiums and Discounts
Debt issued at a premium or discount is recorded net of the unamortized premium or discount. In the
governmental funds, premiums and discounts are recorded entirely as other financing sources or uses in the
year of issuance. In the proprietary funds and the government-wide statements, they are amortized over the
life of the bonds.
50
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Compensated Absences
Permanent City employees accumulate vacation and sick leave hours for subsequent use or for payment
upon death, resignation, or retirement. The City pays its employees (except firefighters) one-half of the
accumulated sick leave at the time of termination on the basis of the employee’s then effective hourly base
salary, provided that the dollar amount of the payment may be up to, but not exceed, the amount that an
employee would be paid if the employee had terminated on June 28, 1985. Employees hired on or after
June 29, 1985, are not eligible for payment of accumulated sick leave upon termination, death, or retirement.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows
of resources related to pensions, and pension expense, information about the fiduciary net position of the
Iowa Public Employees’ Retirement System and the Municipal Fire and Police Retirement System
(Systems’) and additions to/deductions from the Systems’ fiduciary net position have been determined on
the same basis as they are reported by the Systems. For this purpose, benefit payments (including refunds
of employee contributions) are recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value.
Landfill Closing Costs
Costs expected to be incurred in ultimately closing the present landfill site are being systematically provided
for through charges to expense over the estimated useful life of the landfill on the basis of capacity used
(see Note 8).
Deferred Inflows of Resources
Deferred inflows of resources represent an acquisition of net position that applies to a future period(s) and
will not be recognized as an inflow of resources (revenue) until that time. Although certain revenues are
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, grants receivable and other
receivables.
Deferred inflows of resources in the Statement of Net Position consist of succeeding year property tax
receivable that will not be recognized as revenue until the year for which they are levied, the difference in
the carrying value of refunded debt and it’s acquisition price and the unamortized portion of pension related
items.
51
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
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 aggregated totals by revenue source.
The City formally adopts budgets for several funds that are not required by state law to be included in the
annual function budget. Annual operating budgets are adopted for the internal service funds for
management control purposes. Such budgets, however, are not legally required to be adopted under state
statutes.
A City budget for the current fiscal year may be amended for any of the following purposes as prescribed
by Iowa statute:
a. To permit the appropriation and expenditure of unexpended, unencumbered cash balances on
hand at the end of the preceding fiscal year.
b. To permit the appropriation and expenditure of amounts anticipated being available from sources
other than property taxation.
c. To permit transfers between funds.
d. To permit transfers between functions.
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 $30,470,230 in revenues and other
financing sources and by $86,120,048 in expenditures and other financing uses. Appropriations, as adopted
or amended, lapse at the end of the fiscal year.
52
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
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 10).
2. Cash and Pooled Investments
The City’s deposits in banks at June 30, 2017 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.
At June 30, 2017 the City had the following investments:
The City uses the fair value hierarchy established by generally accepted accounting principles based on the
valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active
markets for identical assets. Level 2 inputs are significant other observable inputs. Level 3 inputs are
significant unobservable inputs.
Fair
Investment Value Maturities
Federal Home Loan Bank Notes 7,989,640$ July 2017 to June 2019
Federal Home Loan Mortgage Corporation Notes 3,990,660 June 2018 to May 2019
United States Treasury Note 498,789 May 2018
Credit Agricole Corporate and Investment Bank
NY Commercial Paper 495,237 March 2018
12,974,326$
53
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
The recurring fair value measurement for the Federal Home Loan Bank securities of $7,989,640, the Federal
Home Loan Mortgage Corporation securities of $3,990,660 and the United States Treasury securities of
$498,789 were determined using the last reported sales price at current exchange rates (Level 1 inputs).
The fair value measurement for the Credit Agricole Corporate and Investment Bank NY commercial paper
of $495,237 was determined using the last reported sales price at current exchange rates (Level 1 inputs).
The City had no other investments meeting the disclosure requirements of Governmental Accounting
Standards Board Statement No. 72.
In addition, the City had investments in the Iowa Public Agency Investment Trust (IPAIT), which are valued
at an amortized cost of $40,361,714, which approximates fair value. The Diversified Portfolio consists of
cash and short-term investments valued at amortized cost, which approximates fair value, pursuant to
Governmental Accounting Standards Board Statement No. 79.
The Iowa Public Agency Investment Trust (IPAIT) represents an investment in a pool managed by others.
IPAIT is a common trust established under Iowa law pursuant to Iowa Code Chapter 28E in 1987 to enable
eligible Iowa public agencies to safely and effectively invest their available operating and reserve funds.
IPAIT is registered under the Investment Company Act of 1940.
The IPAIT portfolios have followed established money market mutual fund investment parameters
designed to maintain a $1 per unit net asset value since inception and were registered with the Securities
and Exchange Commission (SEC).
Interest rate risk - The City’s investment policy limits the investment of 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.
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.
54
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
3. Interfund Balances and Transfers
Interfund balances for the year ended June 30, 2017, consisted of the following:
Interfund balances at June 30, 2017, include advances due to/from other funds, which represent amounts
for construction loans and a revenue bond redemption loan. $1,665,852 of the $1,901,161 advance to the
Parking Fund is not expected to be repaid within the next year. $110,893 of the $124,595 advance is not
expected to be repaid within the next year.
Debt
Service Sanitation Total
Advances to:
Parking -$ 1,901,161$ 1,901,161$
Nonmajor governmental 124,595 - 124,595
Total 124,595$ 1,901,161$ 2,025,756$
Advances from
55
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Interfund transfers for the year ended June 30, 2017, consisted of the following:
Transfers are used to move revenues and bond proceeds from the fund that State statutes or the budget
requires to collect them to the fund that the State statutes or the budget requires to expend them.
In the fund financial statements, total transfers in and transfers out of $50,576,822 are less than total
transfers of $55,439,701 because of the treatment of transfers of capital assets to the governmental activities
capital assets.
Capital Projects
Bridge, Street
and Traffic
Employee Control Nonmajor Wastewater
General Benefits Construction Governmental Treatment
Transfer to:
General -$ 9,096,921$ -$ 823,503$ 758,987 $
Debt Service 60,052 - - 1,735,400 -
Capital Projects
Bridge, Street and
Traffic Control Construction 11,305,966 - - 3,505,674 1,241,013
Nonmajor Governmental 3,239,963 330,662 - 1,359,918 381,901
Wastewater Treatment - - 5,829,861 - -
Water - - 2,304,989 - -
Stormwater - - 2,977,881 - -
Nonmajor Enterprise 3,384,842 - - - -
Internal Service 31,738 - 680,396 364,470 54,352
Total Transfer to 18,022,561$ 9,427,583$ 11,793,127 $ 7,788,965$ 2,436,253 $
Transfer from
56
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
During the year, land for the construction of the Riverfront Crossing Park with a value of $4,852,938 was
transferred to governmental activities capital assets from 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 a disposal for the capital resources given.
During the year, a capital asset related to public safety with a value of $9,941 was transferred from
Equipment to governmental activities capital assets. No amounts were reported in the governmental
funds, as the amounts did not involve the transfer of financial resources. However, Equipment did report a
disposal for the capital resources given.
Housing Internal Total
Water Sanitation Stormwater Authority Service Transfer from
-$ - $ - $ 46,087 $ -$ 10,725,498$
- - - - - 1,795,452
174,975 - 115,260 - - 16,342,888
- - 5 - 500,000 5,812,449
75,457 - - - 5,318 5,910,636
- - - - - 2,304,989
- - - - - 2,977,881
- - - - - 3,384,842
- 191,231 - - - 1,322,187
250,432$ 191,231 $ 115,265 $ 46,087 $ 505,318 $ 50,576,822
Transfers to governmental activities capital assets from an enterprise fund 4,852,938
Transfers to governmental activities capital assets from an internal service fund 9,941
55,439,701$
Transfer from
57
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
4. Capital Assets
Capital asset activity for the year ended June 30, 2017, was as follows:
Beginning
July 1, 2016
Acquisitions
and
Transfers
Disposals
and
Transfers
Balance
June 30, 2017
Governmental activities:
Capital assets, not being depreciated:
Land 24,081,394$ 5,697,487$ -$ 29,778,881$
Construction in progress 24,193,739 23,219,327 24,646,084 22,766,982
Total capital assets, not being depreciated 48,275,133 28,916,814 24,646,084 52,545,863
Capital assets, being depreciated:
Buildings 64,312,273 126,520 254,932 64,183,861
Improvements other than buildings 7,358,005 148,833 5,320 7,501,518
Machinery and equipment 41,741,748 4,208,769 1,494,278 44,456,239
Infrastructure 137,980,063 18,947,356 5,305 156,922,114
Total capital assets being depreciated 251,392,089 23,431,478 1,759,835 273,063,732
Less accumulated depreciation for:
Buildings 23,185,807 1,632,505 98,531 24,719,781
Improvements other than buildings 3,266,179 286,631 5,320 3,547,490
Machinery and equipment 25,916,289 3,271,570 1,417,535 27,770,324
Infrastructure 40,075,777 3,356,791 5,305 43,427,263
Total accumulated depreciation 92,444,052 8,547,497 1,526,691 99,464,858
Total capital assets, being depreciated, net 158,948,037 14,883,981 233,144 173,598,874
Governmental activities capital assets, net 207,223,170$ 43,800,795$ 24,879,228$ 226,144,737$
58
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Beginning
July 1, 2016
Acquisitions
and
Transfers
Disposals
and
Transfers
Balance
June 30, 2017
Business-type activities:
Capital assets, not being depreciated:
Land 35,590,298$ -$ 4,852,938$ 30,737,360$
Construction in progress 2,647,044 9,381,759 2,313,910 9,714,893
Total capital assets, not being depreciated 38,237,342 9,381,759 7,166,848 40,452,253
Capital assets, being depreciated:
Buildings 118,486,975 15,747,867 118,000 134,116,842
Improvements other than buildings 10,783,445 105,329 - 10,888,774
Machinery and equipment 31,095,957 338,098 622,986 30,811,069
Infrastructure 298,117,591 9,308,433 - 307,426,024
Total capital assets being depreciated 458,483,968 25,499,727 740,986 483,242,709
Less accumulated depreciation for:
Buildings 57,850,943 3,086,848 118,000 60,819,791
Improvements other than buildings 6,081,033 467,188 - 6,548,221
Machinery and equipment 22,500,066 1,375,916 535,330 23,340,652
Infrastructure 90,363,007 7,557,870 - 97,920,877
Total accumulated depreciation 176,795,049 12,487,822 653,330 188,629,541
Total capital assets, being depreciated, net 281,688,919 13,011,905 87,656 294,613,168
Business-type activities capital assets, net 319,926,261$ 22,393,664$ 7,254,504$ 335,065,421$
Depreciation expense was charged to functions as follows:
Governmental activities:
Public safety 1,413,945$
Public works 3,814,919
Culture and recreation 2,839,333
Community and economic development 61,853
General government 417,447
Total depreciation expense - governmental activities 8,547,497$
Business-type activities:
Parking 879,706$
Transit 887,095
Wastewater treatment 4,506,493
Water 2,343,883
Sanitation 1,560,499
Stormwater 1,192,434
Housing authority 120,681
Nonmajor enterprise 997,031
Total depreciation expense - business-type activities 12,487,822$
59
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
5. Capital Lease Obligation
This year, the government entered into a lease agreement as lessee for financing the acquisition of a parking
ramp valued at $15,497,867. The parking ramp has a 30-year estimated useful life. This year, $129,149
was included in depreciation expense. This lease agreement qualifies as a capital lease for accounting
purposes and, therefore, has been recorded at the present value of future minimum lease payments as of the
inception date.
The future minimum lease obligations and the net present value of these minimum lease payments as of
June 30, 2017, were as follows:
Changes in Capital Lease Obligation
Changes in the capital lease obligation for the year ended June 30, 2017, was as follows:
Fiscal Year Ending
June 30
Business-type
Activities
2018 1,100,821$
2019 1,100,821
2020 1,100,821
2021 1,100,821
2022 1,100,821
2023-2036 15,411,500
Total minimum lease payments 20,915,605
Less: amount representing interest (6,432,891)
Present value of minimum lease payments 14,482,714$
Due Within
July 1, 2016 Issues Retirements June 30, 2017 One Year
Business-type activities:-$ 15,497,867$ 1,015,153$ 14,482,714$ 524,409$
60
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
6. Long Term Debt
Changes in Debt for Bonds
Bond debt activity for the year ended June 30, 2017, was as follows:
General Obligation Bonds
Various issues of general obligation bonds totaling $51,645,000 are outstanding as of June 30, 2017. The
bonds have interest rates ranging from 1.0% to 4.0% and mature in varying annual amounts ranging from
$345,000 to $1,330,000 per issue, with the final maturities due in the year ending June 30, 2027. Interest
and principal payments on all general obligation bonds, except tax abated portions recorded in the enterprise
funds, are accounted for through the Debt Service Fund.
Due Within
July 1, 2016 Issues Retirements June 30, 2017 One Year
Governmental activities:
General obligation bonds 55,055,000$ 9,765,000$ 13,175,000$ 51,645,000$ 7,960,000$
Plus: Unamortized
Premium 943,392 120,083 137,221 926,254 137,221
Total general obligation bonds 55,998,392 9,885,083 13,312,221 52,571,254 8,097,221
Revenue bonds 2,525,000 12,805,000 130,000 15,200,000 135,000
Less: Unamortized
Discounts 33,984 - 2,124 31,860 2,124
Total revenue bonds 2,491,016 12,805,000 127,876 15,168,140 132,876
58,489,408$ 22,690,083$ 13,440,097$ 67,739,394$ 8,230,097$
Business-type activities:
General obligation bonds 295,000$ -$ 295,000$ -$ -$
Revenue bonds 38,420,000 10,460,000 16,060,000 32,820,000 5,035,000
Plus: Unamortized
Premium 1,531,661 645,415 576,162 1,600,914 290,852
Total revenue bonds 39,951,661 11,105,415 16,636,162 34,420,914 5,325,852
40,246,661$ 11,105,415$ 16,931,162$ 34,420,914$ 5,325,852$
61
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Annual debt service requirements to maturity for general obligation bonds are as follows:
Revenue Bonds
As of June 30, 2017, the following unmatured revenue bond issues are outstanding:
Wastewater Taxable Urban
Treatment Water Renewal
Original issue amount $ 37,650,000 $ 24,260,000 $ 15,200,000
Interest rates 2.0% to 5.0% 1.5% to 5.0% 1.0% to 3.9%
Annual maturities $ 275,000 to $ 380,000 to $ 135,000 to
$ 2,085,000 $ 1,225,000 $ 965,000
Amount outstanding $ 19,590,000 $ 13,230,000 $ 15,200,000
The City of Iowa City defeased the remaining $6,605,000 of its 2009 parking revenue bonds on November
12, 2014 by prepaying all remaining outstanding bonds and interest from cash on hand. The total defeased
outstanding as of June 30, 2017 is $5,465,000. The total amount of interest that was paid was $574,186.
Liabilities for the defeased bonds are not included in the City’s financial statements.
On June 15, 2017, the City issued $4,550,000 of sewer revenue bonds for a current refunding of
$5,245,000 of sewer revenue bonds on July 1, 2017. As a result, the sewer revenue bonds from that issue
are considered to be defeased and the liability has been removed from the financial statements. The
refunding was undertaken to reduce total future debt service payments. The result of the transaction is a
reduction of $1,030,981 in future debt service payments and an economic gain of $723,184.
On June 15, 2017, the City issued $5,910,000 of water revenue bonds for a current refunding of
$5,725,000 of water revenue bonds on July 1, 2017. As a result, the water revenue bonds from that issue
are considered to be defeased and the liability has been removed from the financial statements. The
refunding was undertaken to reduce total future debt service payments. The result of the transaction is a
reduction of $1,137,664 in future debt service payments and an economic gain of $1,033,306.
Fiscal Year Ending
June 30 Principal Interest
2018 7,960,000$ 1,197,996$
2019 8,125,000 1,031,994
2020 8,330,000 835,606
2021 7,090,000 613,841
2022 5,540,000 438,663
2023-2027 14,600,000 778,963
Total 51,645,000$ 4,897,063$
Governmental Activities
62
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Revenue bond debt service requirements to maturity are as follows:
The revenue bond ordinances required that wastewater treatment, 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: 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.
In fiscal year ended June 30, 2017, the Wastewater Treatment Fund had net revenue of $7,026,000 and the
amount of principal and interest due was $4,610,000. In fiscal year ended June 30, 2017, the Water Fund
had net revenues of $3,197,000 and the amount of principal and interest due was $2,284,000.
Fiscal Year Ending
June 30 Principal Interest Principal Interest
2018 135,000$ 456,495$ 5,035,000$ 1,150,476$
2019 135,000 454,335 4,975,000 872,703
2020 140,000 451,635 5,385,000 685,365
2021 140,000 448,695 5,610,000 477,665
2022 1,110,000 445,475 4,350,000 298,690
2023-2027 5,420,000 1,735,955 7,465,000 237,420
2028-2032 4,710,000 964,955 - -
2033-2037 3,410,000 259,500 - -
Total 15,200,000$ 5,217,045$ 32,820,000$ 3,722,319$
Governmental Activities Business-type Activities
63
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Summary of Bond Issues
General obligation and revenue bonds payable at June 30, 2017, are comprised of the following issues:
Date of Amount Interest Final Outstanding
Issue Issued Rates Maturity June 30, 2017
General Obligation Bonds:
Multi-Purpose Aug. 2010 7,420,000 2.0 - 2.75 6/20 2,370,000
Multi-Purpose June 2011 7,925,000 2.0 - 3.625 6/21 3,080,000
Refunded Multi-Purpose and
Library Construction (1) June 2011 10,930,000 2.0 - 3.625 6/21 5,055,000
Multi-Purpose June 2012 9,070,000 2.0 - 2.25 6/22 4,780,000
Multi-Purpose July 2013 7,230,000 1.0 - 2.0 6/23 4,975,000
Refunded Multi-Purpose (2) June 2014 11,980,000 2.0 - 3.0 6/24 6,685,000
Multi-Purpose June 2015 7,785,000 2.0 - 2.25 6/25 6,380,000
Multi-Purpose June 2016 8,795,000 2.0 - 3.0 6/26 8,555,000
Multi-Purpose June 2017 9,765,000 2.0 - 2.5 6/27 9,765,000
Total General Obligation Bonds 51,645,000$
Date of Amount Interest Final Outstanding
Issue Issued Rates Maturity June 30, 2017
Revenue Bonds:
Refunded Wastewater
Treatment Bonds (3) May 2009 8,660,000 3.5 - 5.0 7/25 525,000
Refunded Wastewater
Treatment Bonds (4) Apr. 2010 15,080,000 3.0 - 4.0 7/20 5,155,000
Refunded Wastewater
Treatment Bonds (5) June 2016 9,360,000 3.0 - 4.0 7/21 9,360,000
Refunded Wastewater
Treatment Bonds (6) June 2017 4,550,000 2.0 - 5.0 7/22 4,550,000
Refunded Water Bonds (7) May 2009 9,750,000 4.0 - 4.5 7/25 585,000
Refunded Water Bonds (8) June 2012 4,950,000 1.5 - 2.1 7/22 3,085,000
Refunded Water Bonds (9) June 2016 3,650,000 1.5 - 5.0 7/24 3,650,000
Refunded Water Bonds (10) June 2017 5,910,000 2.0 - 2.25 7/25 5,910,000
Taxable Urban Renewal Nov. 2012 2,655,000 1.0 - 3.9 6/32 2,395,000
Taxable Urban Renewal Sept. 2016 12,805,000 3.0 6/36 12,805,000
Total Revenue Bonds 48,020,000
99,665,000$
64
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
(1) This bond issue refunded the May 2002 General Obligation Bonds.
(2) This bond issue is an advance refunding of portions of the September 2006 and May 2007 General
Obligation Bonds.
(3) This bond issue refunded the October 2000 Wastewater Revenue Bonds.
(4) This bond issue refunded the December 2001 and April 2002 Wastewater Revenue Bonds.
(5) This bond issue refunded the October 2008 Wastewater Revenue Bond.
(6) This bond issue refunded the May 2009 Wastewater Revenue Bonds.
(7) This bond issue refunded the December 2000 Water Revenue Bonds.
(8) This bond issue refunded the October 2002 Water Revenue Bonds.
(9) This bond issue refunded the October 2008 Water Revenue Bonds.
(10) This bond issued refunded the May 2009 Water Revenue Bonds.
Conduit Debt Obligations
From time to time, the City has issued Industrial Development Revenue Bonds and Midwestern Disaster
Area Revenue Bonds to provide financial assistance to private sector entities for the acquisition,
construction, and renovation of industrial and commercial facilities deemed to be in the public interest. The
bonds are collateralized by the property financed and are payable solely from payments received on the
underlying mortgage loans. All payments on the bonds are made by the private sector entities directly to a
bond trustee, who is a third party financial institution, and in turn, disburses the payment to the respective
bond holders. Neither the City, the State, nor any political subdivision thereof is obligated in any manner
for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying
financial statements.
As of June 30, 2017, there were three series of Industrial Development Revenue Bonds and Midwest
Disaster Area Revenue Bonds outstanding, with an aggregate principal amount payable of $33,867,375.
Debt Legal Compliance
Legal Debt Margin:
As of June 30, 2017, 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 $ 5,257,241
Utilities 92,987
Total valuation $ 5,350,228
Debt limit, 5% of total assessed valuation $ 267,511
Debt applicable to debt limit:
General obligation bonds 51,645
Urban renewal revenue bonds 15,200
Letters of credit 663
Other legal indebtedness (TIF rebates) 17,356
Total net debt applicable to limit 84,864
Legal debt margin $ 182,647
65
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
7. Pension and Retirement Systems
Municipal Fire and Police Retirement System of Iowa (MFPRSI)
Plan Description
MFPRSI membership is mandatory for fire fighters and police officers covered by the provisions of Chapter
411 of the Code of Iowa. Employees of the City are provided with pensions through a cost-sharing multiple
employer defined benefit pension plan administered by MFPRSI. MFPRSI issues a stand-alone financial
report which is available to the public by mail at 7155 Lake Drive, Suite #201, West Des Moines, Iowa
50266 or at www.mfprsi.org.
MFPRSI benefits are established under Chapter 411 of the Code of Iowa and the administrative rules
thereunder. Chapter 411 of the Code of Iowa and the administrative rules are the official plan documents.
The following brief description is provided for general informational purposes only. Refer to the plan
documents for more information.
Pension Benefits
Members with 4 or more years of service are entitled to pension benefits beginning at age 55. Full service
retirement benefits are granted to members with 22 years of service, while partial benefits are available to
those members with 4 to 22 years of service based on the ratio of years completed to years required (i.e.,
22 years). Members with less than 4 years of service are entitled to a refund of their contribution only, with
interest, for the period of employment.
Benefits are calculated based upon the member’s highest 3 years of compensation. The average of these 3
years becomes the member’s average final compensation. The base benefit is 66 percent of the member’s
average final compensation. Additional benefits are available to members who perform more than 22 years
of service (2 percent for each additional year of service, up to a maximum of 8 years). Survivor benefits
are available to the beneficiary of a retired member according to the provisions of the benefit option chosen
plus an additional benefit for each child. Survivor benefits are subject to a minimum benefit for those
members who chose the basic benefit with a 50 percent surviving spouse benefit.
Active members, at least 55 years of age, with 22 or more years of service have the option to participate in
the Deferred Retirement Option Program (DROP). The DROP is an arrangement whereby a member who
is otherwise eligible to retire and commence benefits opts to continue to work. A member can elect a 3, 4,
or 5 year DROP period. By electing to participate in DROP the member is signing a contract indicating the
member will retire at the end of the selected DROP period. During the DROP period the member’s
retirement benefit is frozen and a DROP benefit is credited to a DROP account established for the member.
Assuming the member completes the DROP period, the DROP benefit is equal to 52% of the member’s
retirement benefit at the member’s earliest date eligible and 100% if the member delays enrollment for 24
months. At the member’s actual date of retirement, the member’s DROP account will be distributed to the
member in the form of a lump sum or rollover to an eligible plan.
Disability and Death Benefits
Disability coverage is broken down into two types, accidental and ordinary. Accidental disability is defined
as permanent disability incurred in the line of duty, with benefits equivalent to the greater of 60 percent of
the member’s average final compensation or the member’s service retirement benefit calculation amount.
Ordinary disability occurs outside the call of duty and pays benefits equivalent to the greater of 50 percent
of the member’s average final compensation, for those with 5 or more years of service, or the member’s
service retirement benefit calculation amount, and 25 percent of average final compensation for those with
less than 5 years of service.
66
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Death benefits are similar to disability benefits. Benefits for accidental death are 50 percent of the average
final compensation of the member plus an additional amount for each child, or the provisions for ordinary
death. Ordinary death benefits consist of a pension equal to 40 percent of the average final compensation
of the member plus an additional amount for each child, or a lump-sum distribution to the designated
beneficiary equal to 50 percent of the previous year’s earnable compensation of the member or equal to the
amount of the member’s total contributions plus interest.
Benefits are increased annually in accordance with Chapter 411.6 of the Code of Iowa which states a
standard formula for the increases.
The surviving spouse or dependents of an active member who dies due to a traumatic personal injury
incurred in the line of duty receives a $100,000 lump-sum payment.
Contributions
Member contribution rates are set by state statute. In accordance with Chapter 411 of the Code of Iowa,
the contribution rate was 9.40% of earnable compensation for the year ended June 30, 2017.
Employer contribution rates are based upon an actuarially determined normal contribution rate and set by
state statute. The required actuarially determined contributions are calculated on the basis of the entry age
normal method as adopted by the Board of Trustees as permitted under Chapter 411 of the Code of Iowa.
The normal contribution rate is provided by state statute to be the actuarial liabilities of the plan less current
plan assets, with such total divided by 1 percent of the actuarially determined present value of prospective
future compensation of all members, further reduced by member contributions and state appropriations.
Under the Code of Iowa the employer’s contribution rate cannot be less than 17.00% of earnable
compensation. The contribution rate was 25.92% for the year ended June 30, 2017.
The City’s contributions to MFPRSI for the year ended June 30, 2017 was $2,681,511.
If approved by the state legislature, state appropriation may further reduce the employer’s contribution rate,
but not below the minimum statutory contribution rate of 17.00% of earnable compensation. The State of
Iowa therefore is considered to be a nonemployer contributing entity in accordance with the provisions of
the Governmental Accounting Standards Board Statement No. 67 – Financial Reporting for Pension Plans,
(GASB 67).
There were no state appropriations to MFPRSI during the fiscal year ended June 30, 2017.
Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions
At June 30, 2017, the City reported a liability of $23,116,697 for its proportionate share of the net pension
liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to
calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s
proportion of the net pension liability was based on the City’s share of contributions to the pension plan
relative to the contributions of all MFPRSI participating employers. At June 30, 2016, the City’s proportion
was 3.697128% which was a decrease of .007844% from its proportions measured as of June 30, 2015.
67
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
For the year ended June 30, 2017, the City recognized pension expense of $3,216,923. At June 30, 2017,
the City reported deferred outflows of resources and deferred inflows of resources related to pensions from
the following sources:
$2,681,511 reported as deferred outflows of resources related to pensions resulting from City contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year
ended June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized in pension expense as follows:
Total 8,678,201$ 606,829$
-
268,755
Net difference between projected and actual
earnings on pension plan investments
Changes in proportion and differences between
City contributions and proportionate share of
contributions
316,636
2,681,511 -
4,087,567
Change of assumptions
Deferred Outflows of
Resources
596,612$
976,000
Differences between expected and actual
experience
Deferred Inflows of
Resources
21,438$
City contributions subsequent to the measurement
date
336,511
Year Ended
June 30, 2018
June 30, 2019
June 30, 2020
June 30, 2021
June 30, 2022
Total
5,389,861$
1,323,484
(12,851)
879,619
2,319,990
879,619$
68
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Actuarial Assumptions
The total pension liability in the June 30, 2016, actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement:
The actuarial assumptions used in the June 30, 2016 valuation were based on the results of an actuarial
experience study for the period from July 1, 2002 to June 30, 2012.
Postretirement mortality rates were based on the RP-2000 Blue Collar Combined Healthy Mortality Table
with males set-back two year, females set-forward one year and disabled individuals set-forward one year
(male only rates), with no projection of future mortality improvement.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best-estimate ranges of expected future real rates (i.e., expected returns, net of pension
plan investment expense and inflation) are developed for each major asset class. These ranges are combined
to produce the long-term expected rate of return by weighting the expected future real rates of return by the
target asset allocation percentage and by adding expected inflation. The best estimates of arithmetic real
rates of return for each major asset class are summarized in the following table:
Rate of inflation 3.00 percent per annum
Salary increases 4.50 to 15.11 percent, including inflation
Investment rate of return 7.50 percent, net of pension plan investment
expense, including inflation
Asset Class
Core Plus Fixed Income 3.8 %
Emerging Markets 8.8
Emerging Markets Debt 6.5
Large Cap 6.0
Small Cap 5.8
Master Limited Partnerships (MLP)8.5
International Large Cap 7.0
Treasury Inflation Protected Securities 2.8
Tactical Asset Allocation 6.0
Private Equity 9.8
Private Non-Core Real Estate 9.3
Private Core Real Estate 6.8
Long-Term Expected
Real Rate of Return
69
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Discount Rate
The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows
used to determine the discount rate assumed that contributions will be made at 9.40 percent of covered
payroll and the City contributions will be made at rates equal to the difference between actuarially
determined rates and the member rate. Based on those assumptions, the pension plan’s fiduciary net
position was projected to be available to make all projected future benefit payments of current plan
members. Therefore, the long-term expected rate of return on pension plan investments was applied to all
periods of projected benefit payments to determine the total pension liability.
Sensitivity of City’s Proportionate Share of the Net Pension Liability to Changes in the Discount
Rate
The following presents the City’s proportionate share of the net pension liability calculated using the
discount rate of 7.5 percent, as well as what the city’s proportionate share of the net pension liability would
be if it were calculated using a discount rate that is 1-percent lower (6.5 percent) or 1-percent higher (8.5
percent) than the current rate.
Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the separately issued
MFPRSI financial report which is available on MFPRSI’s website at www.mfprsi.org.
Payables to the Pension Plan
At June 30, 2017, there were no amounts due to MFPRSI.
Iowa Public Employees Retirement System (IPERS)
Plan Description
IPERS membership is mandatory for employees of the City, except for those covered by another retirement
system. Employees of the City are provided with pensions through a cost-sharing multiple employer
defined benefit pension plan administered by IPERS. IPERS issues a stand-alone financial report which is
available to the public by mail at 7401 Register Drive P.O. Box 9117, Des Moines, Iowa 50306-9117 or at
www.ipers.org.
IPERS benefits are established under Iowa Code chapter 97B and the administrative rules thereunder.
Chapter 97B and the administrative rules are the official plan documents. The following brief description
is provided for general informational purposes only. Refer to the plan documents for more information.
1% Decrease
(6.5%)
Discount Rate
(7.5%)
1% Increase
(8.5%)
City's proportionate share of
the net pension liability: 36,280,488$ 23,116,701$ 12,154,074$
70
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Pension Benefits
A regular member may retire at normal retirement age and receive monthly benefits without an early-
retirement reduction. Normal retirement age is age 65, any time after reaching age 62 with 20 or more
years of covered employment, or when the member’s years of service plus the member’s age at the last
birthday equals or exceeds 88, whichever comes first. (These qualifications must be met on the member’s
first month of entitlement to benefits.) Members cannot begin receiving retirement benefits before age 55.
The formula used to calculate a Regular member’s monthly IPERS benefit includes:
A multiplier (based on years of service).
The member’s highest five-year average salary. (For members with service before June 30, 2012,
the highest three-year average salary as of that date will be used if it is greater than the highest five-
year average salary.)
If a member retires before normal retirement age, the member’s monthly retirement benefit will be
permanently reduced by an early-retirement reduction. The early-retirement reduction is calculated
differently for service earned before and after July 1, 2012. For service earned before July 1, 2012, the
reduction is 0.25 percent for each month that the member receives benefits before the member’s earliest
normal retirement age. For service earned starting July 1, 2012, the reduction is 0.50 percent for each
month that the member receives benefits before age 65.
Generally, once a member selects a benefit option, a monthly benefit is calculated and remains the same
for the rest of the member’s lifetime. However, to combat the effects of inflation, retirees who began
receiving benefits prior to July 1990 receive a guaranteed dividend with their regular November benefit
payments.
Disability and Death Benefits
A vested member who is awarded federal Social Security disability or Railroad Retirement disability
benefits is eligible to claim IPERS benefits regardless of age. Disability benefits are not reduced for early
retirement. If a member dies before retirement, the member’s beneficiary will receive a lifetime annuity or
a lump-sum payment equal to the present actuarial value of the member’s accrued benefit or calculated with
a set formula, whichever is greater. When a member dies after retirement, death benefits depend on the
benefit option the member selected at retirement.
Contributions
Effective July 1, 2012, as a result of a 2010 law change, the contribution rates are established by IPERS
following the annual actuarial valuation, which applies IPERS’ Contribution Rate Funding Policy and
Actuarial Amortization Method. Statute limits the amount rates can increase or decrease each year to 1
percentage point. IPERS Contribution Rate Funding Policy requires that the actuarial contribution rate be
determined using the “entry age normal” actuarial cost method and the actuarial assumptions and methods
approved by the IPERS Investment Board. The actuarial contribution rate covers normal cost plus the
unfunded actuarial liability payment based on a 30-year amortization period. The payment to amortize the
unfunded actuarial liability is determined as a level percentage of payroll, based on the Actuarial
Amortization Method adopted by the Investment Board.
71
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
In fiscal year 2017, pursuant to the required rate, Regular members contributed 5.95 percent of pay and the
City contributed 8.93 percent for a total rate of 14.88 percent.
The City’s total contributions to IPERS for the year ended June 30, 2017 were $2,645,105.
Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions
At June 30, 2017, the City reported a liability of $24,938,496 for its proportionate share of the net pension
liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to
calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s
proportion of the net pension liability was based on the City’s share of contributions to the pension plan
relative to the contributions of all IPERS participating employers. At June 30, 2016, the City’s proportion
was .3962696% which was a decrease of .019656% from its proportions measured as of June 30, 2015.
For the year ended June 30, 2017, the City recognized pension expense of $2,599,601. At June 30, 2017,
the City reported deferred outflows of resources and deferred inflows of resources related to pensions from
the following sources:
Total
Changes in proportion and differences between
City contributions and proportionate share of
contributions -
City contributions subsequent to the measurement
date 2,645,105
6,798,943$
Change of assumptions 380,484 -
Net difference between projected and actual
earnings on pension plan investments 3,552,947
1,548,571$
1,250,940
-
-
Deferred Inflows of
Resources
Deferred Outflows of
Resources
Differences between expected and actual
experience 220,407$ 297,631$
72
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
$2,645,105 reported as deferred outflows of resources related to pensions resulting from City contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year
ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized in pension expense as follows:
Actuarial Assumptions
The total pension liability in the June 30, 2016, actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement:
The actuarial assumptions used in the June 30, 2016 valuation were based on the results of actuarial
experience studies with dates corresponding to those listed above.
Mortality rates were based on the RP-2000 Mortality Table for Males or Females, as appropriate, with
adjustments for mortality improvements based on Scale AA.
Year Ended
June 30, 2018
June 30, 2019
June 30, 2020
June 30, 2021
June 30, 2022
1,561,079
866,632
(65,282)
Total
121,419$
121,419
2,605,267$
Rate of inflation 3.00 percent per annum
(effective June 30, 2014)
Salary increases 4.00 to 17.00 percent, average, including inflation. Rates vary by
(effective June 30, 2010)membership group.
(effective June 30, 1996)expense, including inflation
4.00 percent per annum based on 3.00 inflation and 1.00
(effective June 30, 1990)real wage inflation
Investment rate of return 7.50 percent, net of pension plan investment
Wage growth
73
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best-estimate ranges of expected future real rates (i.e., expected returns, net of pension
plan investment expense and inflation) are developed for each major asset class. These ranges are combined
to produce the long-term expected rate of return by weighting the expected future real rates of return by the
target asset allocation percentage and by adding expected inflation. The target allocation and best estimates
of arithmetic real rates of return for each major asset class are summarized in the following table:
Discount Rate
The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows
used to determine the discount rate assumed that contributions will be made at the contractually required
rate and that the contributions from the City will be made at contractually required rates, actuarially
determined. Based on those assumptions, the pension plan’s fiduciary net position was projected to be
available to make all projected future benefit payments of current plan members. Therefore, the long-term
expected rate of return on pension plan investments was applied to all periods of projected benefit payments
to determine the total pension liability.
Sensitivity of City’s Proportionate Share of the Net Pension Liability to Changes in the Discount
Rate
The following presents the City’s proportionate share of the net pension liability calculated using the
discount rate of 7.5 percent, as well as what the city’s proportionate share of the net pension liability would
be if it were calculated using a discount rate that is 1-percent lower (6.5 percent) or 1-percent higher (8.5
percent) than the current rate.
Asset Class
Core Plus Fixed Income 28 %1.9 %
Domestic Equity 24 5.85
International Equity 16 6.32
Private Equity/Debt 11 10.31
Real Estate 8 3.87
Credit Opportunities 5 4.48
U.S. TIPS 5 1.36
Other Real Assets 2 6.42
Cash 1 (0.26)
Total 100 %
Long-Term Expected
Real Rate of ReturnTarget Allocation
1% Decrease
(6.5%)
Discount Rate
(7.5%)
1% Increase
(8.5%)
City's proportionate share of
the net pension liability: 40,347,112$ 24,938,496$ 11,933,423$
74
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the separately issued
IPERS financial report which is available on IPERS’ website at www.ipers.org.
Payables to the Pension Plan
At June 30, 2017, there were no amounts due to IPERS.
8. Other Long-term Liabilities
A note payable was issued to Greater Iowa City Housing Fellowship for the purchase of an 11 unit
apartment building for low income and disabled housing in the Peninsula Neighborhood. The terms of the
loan are 1%, interest only payments for twenty years with a final balloon payment of $211,000 due on
August 1, 2025.
For the governmental activities, employee vested benefits are generally liquidated by the General Fund,
Community Development Block Grant Fund and Other Shared Revenue and Grants Fund.
Changes in Long-Term Liabilities - Notes Payable
Note Payable activity for the year ended June 30, 2017, was as follows:
Due Within
July 1, 2016 Issues Retirements June 30, 2017 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, 2017, was as follows:
Due Within
July 1, 2016 Issues Retirements June 30, 2017 One Year
Governmental activities: $ 2,133,179 1,292,682$ 1,185,014 $ 2,240,847$ 1,251,482$
Business-type activities: $ 678,973 405,439 $ 392,471 $ 691,941$ 401,049$
75
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
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, 2017, is $8,591,189,
which is based on 52.16% usage (filled) of the landfill and is included in accrued liabilities within the
Sanitation Fund. It is estimated that an additional amount of approximately $7,879,648 will be recognized
as closure and post-closure care expenses between the date of the balance sheet and the date the landfill is
expected to be filled to capacity by the year ended June 30, 2039. The estimated total current cost of the
landfill closure and post-closure care costs at June 30, 2017, was determined by a licensed professional
engineer and approximated at $16,470,837. 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,
2017. 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, 2017, the Sanitation Fund had $13,227,106 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, 2017, was as follows:
Due Within
July 1, 2016 Issues Retirements June 30, 2017 One Year
Business-type activities: $ 8,268,394 $ 322,795 -$ $ 8,591,189 -$
76
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
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.
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.
Changes in Long-Term Liabilities - Other Postemployment Benefits
Net OPEB Obligation
July 1, 2016 Current Year June 30, 2017
Governmental activities: $ 3,187,337 $ 438,375 $ 3,625,712
Business-type activities: $ 1,095,202 $ 123,398 $ 1,218,600
77
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
The following table shows the components of the City’s annual OPEB cost for the year ended June 30,
2017, the amount actually contributed to the plans, and changes in the City’s net OPEB obligation:
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, 2017.
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plans and the net
OPEB obligation are summarized as follows:
Percentage of Annual
Annual OPEB Cost Net OPEB
Year Ended OPEB Cost Contributed from City Obligation
June 30, 2015 $ 573,338 38.0% $3,969,641
June 30, 2016 $ 672,867 53.5% $4,282,539
June 30, 2017 $ 738,121 23.9% $4,844,312
Funded Status and Funding Progress: As of July 1, 2016, the most recent actuarial valuation date for the
period July 1, 2016 through June 30, 2017, the actuarial accrued liability was $6,560,682, with no actuarial
value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $6,560,682. The
covered payroll (annual payroll of active employees covered by the plans) was $37,814,968 and the ratio
of the UAAL to covered payroll was 17.3%. As of June 30, 2016, there were no trust fund assets.
Actuarial Methods and Assumptions: Actuarial valuations of an ongoing plan involve estimates of the
value of reported amounts and assumptions about the probability of events far into the future. Examples
include assumption about future employments, mortality, and the health care cost trend. Actuarially
determined amounts are subject to continual review as actual results are compared with past expectations
and new estimates are made about the future. Actuarial calculations of the OPEB plan reflect a long-term
perspective.
The required schedule of funding progress, presented as required supplementary information in the section
following the Notes to Financial Statements, will present multi-year trend information about whether the
actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities
for benefits.
Annual required contribution 735,979$
Interest on net OPEB obligation 149,889
Adjustment to annual required contribution (147,747)
Annual OPEB costs 738,121
Contributions made (176,348)
Increase in net OPEB obligation 561,773
Net OPEB obligation beginning of year 4,282,539
Net OPEB obligation end of year 4,844,312 $
78
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
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, 2016 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 9.0%. The ultimate medical trend rate is 5.0%. The medical
trend rate is decreased to 8.5% for year two and then reduced by 0.5% each year until reaching the 5.0%
ultimate trend rate.
Mortality rates for active employees and retirees are from the SOA RPH-2014 Total Dataset Mortality table
fully generational using Scale MP-2015. 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 plan is $933.33 per month for retirees and $816.67 for their spouses.
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.
9. Short Term Debt
During FY17, the City entered into additional multiple short term loans totaling $669,000 and repaid
multiple short term loans totaling $588,000. The outstanding loans mature one year from the date of the
loan and bear interest rates ranging from 2% to 4.25%. 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, 2017, was as follows:
Due Within
July 1, 2016 Issues Retirements June 30, 2017 One Year
Governmental activities: $ 582,000 669,000$ 588,000 $ 663,000$ 663,000$
79
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
10. 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 General Fund is
the only fund that would report a positive amount in unassigned fund balance. Residual deficit
amounts of other governmental funds would also be reported as unassigned.
The City would use Restricted fund balances first, followed by Committed resources, and then Assigned
resources, as appropriate opportunities arise, but reserves the right to selectively spend Unassigned
resources first to defer the use of these other classified funds.
80
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
11. 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, 2017 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 $21,000,000 annual
aggregate of losses paid. Settled claims have not exceeded this commercial coverage in any of the past
twenty nine fiscal years. The operating funds pay annual premiums to the Loss Reserve Fund. Accumulated
monies in the Loss Reserve Fund are available to cover the self-insured retention amounts and any
uninsured losses.
Components of Fund Balance
Bridge,
Street and
Traffic Other
Employee Control Debt Governmental
General Benefits Construction Service Funds Total
Nonspendable:
Perpetual Care Principal 69,000$ -$ -$ -$ -$ 69,000$
Inventory - - - - 263,610 263,610
Prepaid Items 718,919 79,591 - - - 798,510
Total Nonspendable 787,919 79,591 - - 263,610 1,131,120
Restricted for:
Public Safety 348,934 - - - - 348,934
Local Option Sales Tax 8,021,582 - - - - 8,021,582
Debt Service - - - 7,756,146 - 7,756,146
GO Bond Projects - - 15,537,011 - 27,356,404 42,893,415
State Funding - - - - 5,714,241 5,714,241
Grant Agreement - - - - 3,911,201 3,911,201
Affordable Housing - - - - 468,102 468,102
Notes Receivable 1,291,801 - - - - 1,291,801
Property Held for Resale 86,800 - - - - 86,800
Public Safety Employee
Benefits - 2,441,357 - - - 2,441,357
Other Restricted 224,712 - - - 757,771 982,483
Total Restricted 9,973,829 2,441,357 15,537,011 7,756,146 38,207,719 73,916,062
Committed to:
Emergency Fund 5,198,779 - - - - 5,198,779
Total Committed 5,198,779 - - - - 5,198,779
Assigned to:
Library Programs 814,236 - - - - 814,236
Senior Center Programs 13,882 - - - - 13,882
Replacement and Acquisition Reserves 378,811 - - - - 378,811
Other Assigned 135,390 - - - - 135,390
Total Assigned 1,342,319 - - - - 1,342,319
Unassigned:24,793,417 - - - - 24,793,417
Total Fund Balances 42,096,263$ 2,520,948$ 15,537,011$ 7,756,146$ 38,471,329$ 106,381,697$
81
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
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, 2017 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, 2017
and 2016 are as follows:
Current-Year
Beginning-of- Claims and Balance at
Fiscal-Year Changes in Claim Fiscal
Liability Estimates Payments Year-End
2015 – 2016 $ 2,536,000 $ 827,000 $ 874,000 $ 2,489,000
2016 – 2017 2,489,000 706,000 906,000 2,289,000
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 $9,716,893. 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, 2017 and 2016 are as follows:
Current-Year
Beginning-of- Claims and Balance at
Fiscal-Year Changes in Claim Fiscal
Liability Estimates Payments Year-End
2015 – 2016 $ 568,000 $ 7,035,000 $ 7,253,000 $ 350,000
2016 – 2017 350,000 7,356,000 7,321,000 385,000
82
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
12. Commitments and Contingencies
Contractual Commitments
The total outstanding contractual commitments as of June 30, 2017 are as follows:
Developer Commitments
In order to encourage development within designated TIF districts, the City Council has approved developer
grants to 7 different projects. The grants are to be paid only after certain conditions have been met by each
project developer, and are to be paid over many years in the form of a rebate of a predetermined percentage
of future property taxes generated by the property. Currently, it is estimated that outstanding commitments
totaling $25,526,444 exist, of which $330,157 is expected to be paid in the next fiscal year. These items
are expensed in the period in which they are paid. There were no payments made in the current fiscal year.
No liability is recognized due to the fact that the agreements are conditional and the payments are to be
funded by future property taxes receivable on the project.
Project Amount
Bridge, street and traffic Paving and Bridge Construction,
control construction Engineering Design and Consulting 22,051,540$
Parking Parking Facility Restoration Repair 529,689
Wastewater Sewer Construction & Riverfront Crossings Park 3,563,486
Water Ground Storage Resevoir & Water Plant Computer 45,341
Sanitation Landfill Cell Reconstruction & Road Improvements 552,749
Airport Runway, S. Taxiway Extension, N T-Hangar Restroom 71,888
Stormwater Stormwater system improvements & Storm Sewer 26,317
Replacements
26,841,010$
Fund
83
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
13. 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.
14. Accounting Change/Restatement
Beginning fund balances for the General Fund and the Community Development Block Grant Fund (a
nonmajor governmental fund) were restated to reflect the reclassification of deferred inflow of resources to
restricted fund balance for notes receivable. Long-term notes receivable were previously recorded as a
deferred inflow of resources, as their revenue was not considered available. However, in evaluating the
balances during the current year, it was determined that the presentation would be more representative to
reflect the long-term note receivable balances as part of restricted fund balance.
15. Tax Abatements
Governmental Accounting Standards Board Statement No. 77 defines tax abatements as a reduction in tax
revenues that results from an agreement between one or more governments and an individual or entity in
which (a) one or more governments promise to forgo tax revenues to which they are otherwise entitled and
(b) the individual or entity promises to take a specific action after the agreement has been entered into that
contributes to economic development or otherwise benefits the governments or the citizens of those
governments.
Restatements of fund balances previously reported are as follows:
(Amounts in thousands)
Fund
Fund Balances
Ending June 30, 2016
as Previously
Reported
Effect of
Reclassification of
Deferred Inflow of
Resources to
Restricted Fund
Balance
Fund Balances
Ending June 30, 2016
as Restated
General 48,252$ 1,249$ 49,501$
Other Governmental Funds 16,851$ 3,360$ 20,211$
84
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
City Tax Abatements
The City provides tax abatements for urban renewal and economic development projects with tax increment
financing as provided for in Chapters 15A and 403 of the Code of Iowa. For these types of projects, the
City enters into agreements with developers which require the City, after developers meet the terms of the
agreements, to rebate a portion of the property tax paid by the developers, to pay the developers an economic
development grant or to pay the developers a predetermined dollar amount. No other commitments were
made by the City as part of these agreements.
For the year ended June 30, 2017, the City did not abate any property tax under the urban renewal and
economic development projects.
Tax Abatements of Other Entities
Property tax revenues of the City were not reduced by any amount for the year ended June 30, 2017 under
agreements entered into by any entities.
16. New Governmental Accounting Standards Board (GASB) Standards
The Governmental Accounting Standards Board (GASB) has issued seven statements not yet implemented
by the City. The statements, which might impact the City’s financial statements, are as follows:
Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions,
will be effective for fiscal year ending June 30, 2018. The primary objective of this Statement is to improve
accounting and financial reporting by state and local governments for postemployment benefits other than
pensions (other postemployment benefits or OPEB). It also improves information provided by state and
local governmental employers about financial support for OPEB that is provided by other entities.
Statement No. 81, Irrevocable Split-Interest Agreements, will be effective for fiscal year ending June 30,
2018. The objective of this Statement is to improve accounting and financial reporting for irrevocable split
interest agreements by providing recognition and measurement guidance for situations in which a
government is a beneficiary of the agreement.
Statement No. 83, Certain Asset Retirement Obligations, will be effective for fiscal year ending June 30,
2019. The objective of this Statement is to address legally enforceable liabilities associated with tangible
capital assets.
Statement No. 84, Fiduciary Activities, will be effective for fiscal year ending June 30, 2020. The
objective of this Statement is to improve guidance regarding the identification of fiduciary activities for
accounting and financial reporting purposes and how those activities should be reported.
Statement No. 85, Omnibus 2017, will be effective for fiscal year ending June 30, 2018. The objective of
this Statement is to address practice issues that have been identified during implementation and
application of certain GASB Statements.
85
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2017
Statement No. 86, Certain Debt Extinguishment Issues, will be effective for fiscal year ending June 30,
2018. The primary objective of this Statement is to improve consistency in accounting and financial
reporting for in-substance defeasance of debt by providing guidance for transactions in which cash and
other monetary assets acquired with only existing resources—resources other than the proceeds of
refunding debt—are placed in an irrevocable trust for the sole purpose of extinguishing debt. This
Statement also improves accounting and financial reporting for prepaid insurance on debt that is
extinguished and notes to financial statements for debt that is defeased in substance.
Statement No. 87, Leases, will be effective for fiscal year ending June 30, 2021. The objective of this
Statement is to better meet the information needs of financial statement users by improving accounting
and financial reporting for leases by governments.
The City’s management has not yet determined the effect these statements will have on the City’s financial
statements.
86
87
~:~ ----------------
Governmental
Fund Types Enterprise Fund
Actual Budgetary Types Actual Total Actual
Basis Budgetary Basis Budgetary Basis
Revenues:
Property taxes 55,357$ -$ 55,357$
Delinquent property taxes 1 - 1
Tax increment financing taxes 2,226 - 2,226
Other city taxes 2,868 - 2,868
Special assessments - - -
Licenses and permits 3,521 10 3,531
Intergovernmental 24,573 14,592 39,165
Charges for services 5,718 39,954 45,672
Use of money and property 1,168 1,754 2,922
Miscellaneous 3,560 1,488 5,048
Total revenues 98,992 57,798 156,790
Expenditures/Expenses:
Public safety 22,963 - 22,963
Public works 7,948 - 7,948
Health and social services 301 - 301
Culture and recreation 13,782 - 13,782
Community and economic development 8,105 - 8,105
General government 8,166 - 8,166
Debt service 15,218 - 15,218
Capital outlay 32,903 - 32,903
Business-type - 66,545 66,545
Total expenditures/expenses 109,386 66,545 175,931
Excess (deficiency) of revenues over
(under) expenditures/expenses (10,394) (8,747) (19,141)
Other financing sources and uses, net 25,551 11,995 37,546
Net change in fund balances 15,157 3,248 18,405
Balances, beginning of year 85,925 107,044 192,969
Balances, end of year 101,082$ 110,292$ 211,374$
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, 2017
(dollar amounts expressed in thousands)
BUDGETARY BASIS
88
Final to Actual
Variance -
Positive
Original Final (Negative)
55,330$ 55,330$ 27$
- - 1
2,277 2,277 (51)
2,773 2,773 95
1 1 (1)
1,739 1,739 1,792
32,760 41,140 (1,975)
44,894 45,045 627
2,184 2,285 637
4,637 5,153 (105)
146,595 155,743 1,047
23,533 23,995 1,032
9,309 9,328 1,380
350 350 49
14,042 14,141 359
7,510 11,170 3,065
9,209 9,085 919
15,146 15,390 172
35,452 79,145 46,242
53,713 79,697 13,152
168,264 242,301 66,370
(21,669) (86,558) 67,417
18,080 27,319 10,227
(3,589) (59,239) 77,644$
128,702 192,969
125,113$ 133,730$
Budgeted Amounts
89
Accrual Modified Accrual
Budget Basis Adjustments Basis
Revenues 98,992$ (4,438)$ 94,554$
Expenditures 109,386 (17,462) 91,924
Net (10,394) 13,024 2,630
Other financing sources and uses, net 25,551 (12,927) 12,624
Beginning Fund Balances 85,925 5,202 91,127
Ending Fund Balances 101,082$ 5,299$ 106,381$
Accrual Accrual
Budget Basis Adjustments Basis
Revenues 57,798$ 1,266$ 59,064$
Expenditures 66,545 (11,418) 55,127
Net (8,747) 12,684 3,937
Other financing sources and uses, net 11,995 (5,326) 6,669
Beginning Fund Balances 107,044 250,670 357,714
Ending Fund Balances 110,292$ 258,028$ 368,320$
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, 2017
(dollar amounts expressed in thousands)
90
City of Iowa City, Iowa
Note to Required Supplementary Information - Budgetary Reporting
For the Year Ended June 30, 2017
In accordance with the Code of Iowa, the City Council annually adopts a budget following required public
notice and hearing which includes all funds, except internal service funds and agency funds. The budget
basis of accounting is a modified accrual basis. The annual budget may be amended during the year
utilizing similar statutorily prescribed procedures.
Formal and legal budgetary control is based upon nine major classes of expenditures known as functions,
not by fund or fund type. These nine functions are: public safety, public works, health and social services,
culture and recreation, community and economic development, general government, debt service, capital
outlay and business-type. The legal level control is at the aggregated function level, not at the fund or fund
type level.
During the year, budget amendments increased budgeted revenues by $9,148,000 and expenditures by
$74,037,000. The budget amendments were primarily due to changes in the breadth and timing of capital
improvement projects, which the City budgets in full during the initial year of the projects and amends
future year budgets for carryover.
91
92
~:~ ----------------
2017 2016 2015
City's proportion of the net pension liability 3.697128%3.704972%3.778137%
City's proportionate share of the net pension liability 23,117$ 17,406$ 13,696$
City's covered payroll 10,019 9,716 9,648
City's proportionate share of the net pension liability
as a percentage of its covered payroll 230.73%179.15%141.96%
Plan fiduciary net position as a percentage of the
total pension liability 78.20%83.04%86.27%
* In accordance with GASB Statement No. 68, the amounts presented for each fiscal year were determined as of
June 30 of the preceding fiscal year.
Note: GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full
10-year trend is compiled, the City will present information for those years for which information is available.
City of Iowa City, Iowa
Required Supplementary Information - Schedule of the City's Proportionate Share of the Net Pension Liability
Municipal Fire and Police Retirement System of Iowa
For the Last Three Years*
(amounts expressed in thousands)
93
2017 2016 2015 2014
Statutorily required contributions 2,682 $ 2,782 $ 2,955 $ 2,906 $
Contributions in relation to the
statutorily required contribution (2,682) (2,782) (2,955) (2,906)
Contribution deficiency (excess)- $ - $ -$ -$
City's covered payroll 10,347 $ 10,019 $ 9,716 $ 9,648 $
Contributions as a percentage of
covered payroll 25.92%27.77%30.41%30.12%
City of Iowa City, Iowa
Required Supplementary Information - Schedule of the City's Contributions
Municipal Fire and Police Retirement System of Iowa
For the Last Ten Years
(amounts expressed in thousands)
94
2013 2012 2011 2010 2009 2008
2,383 $ 2,277 $ 1,654 $ 1,336 $ 1,425 $ 1,893 $
(2,383) (2,277) (1,654) (1,336) (1,425) (1,893)
- $ - $ - $ - $ - $ - $
9,122 $ 9,197 $ 8,310 $ 7,860 $ 7,601 $ 7,430 $
26.12% 24.76% 19.90% 17.00% 18.75% 25.48%
95
Changes of benefit terms:
There were no significant changes of benefit terms.
Changes of assumptions:
Postretirement mortality changed to the RP-2000 Blue Collar Combined Healthy Mortality
Table with males set-back two years, females set-forward one year and disableds set-forward
one year (male only rates), with no projection of future mortality improvement.
City of Iowa City, Iowa
Notes to Required Supplementary Information - Pension Liability
Municipal Fire and Police Retirement System of Iowa
Year ended June 30, 2017
96
2017 2016 2015
City's proportion of the net pension liability 0.3962696%0.4159256%0.4378904%
City's proportionate share of the net pension liability 24,938$ 20,549$ 17,366$
City's covered payroll 28,448 28,495 28,654
City's proportionate share of the net pension liability
as a percentage of its covered payroll 87.66%72.11%60.61%
Plan fiduciary net position as a percentage of the
total pension liability 81.82%85.19%87.61%
* In accordance with GASB Statement No. 68, the amounts presented for each fiscal year were determined as of
June 30 of the preceding fiscal year.
Note: GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full
10-year trend is compiled, the City will present information for those years for which information is available.
City of Iowa City, Iowa
Required Supplementary Information - Schedule of the City's Proportionate Share of the Net Pension Liability
Iowa Public Employees' Retirement System
For the Last Three Years*
(amounts expressed in thousands)
97
2017 2016 2015 2014
Statutorily required contributions 2,645 $ 2,540 $ 2,545 $ 2,559 $
Contributions in relation to the
statutorily required contribution (2,645) (2,540) (2,545) (2,559)
Contribution deficiency (excess)- $ - $ -$ -$
City's covered payroll 29,619 $ 28,448 $ 28,495 $ 28,654 $
Contributions as a percentage of
covered payroll 8.93%8.93%8.93%8.93%
(amounts expressed in thousands)
City of Iowa City, Iowa
Required Supplementary Information - Schedule of the City's Contributions
Iowa Public Employees' Retirement System
For the Last Ten Years
98
2013 2012 2011 2010 2009 2008
2,442 $ 2,327 $ 1,877 $ 1,780 $ 1,659 $ 1,522 $
(2,442) (2,327) (1,877) (1,780) (1,659) (1,522)
- $ - $ - $ - $ - $ - $
28,170 $ 28,833 $ 27,013 $ 26,764 $ 26,133 $ 25,151 $
8.67% 8.07% 6.95% 6.65% 6.35% 6.05%
99
Changes of benefit terms:
Legislation passed in 2010 modified benefit terms for current Regular members. The definition
of final average salary changed from the highest three to the highest five years of covered
wages. The vesting requirement changed from four years of service to seven years. The
early retirement reduction increased from 3 percent per year measured from the member’s
first unreduced retirement age to a 6 percent reduction for each year of retirement before
age 65.
Changes of assumptions:
The 2014 valuation implemented the following refinements as a result of a quadrennial
experience study:
• Decreased the inflation assumption from 3.25 percent to 3.00 percent
• Decreased the assumed rate of interest on member accounts from 4.00 percent to
3.75 percent per year.
• Adjusted male mortality rates for retirees in the Regular membership group.
• Moved from an open 30 year amortization period to a closed 30 year amortization
period for the UAL beginning June 30, 2014. Each year thereafter, changes in the
UAL from plan experience will be amortized on a separate closed 20 year period.
The 2010 valuation implemented the following refinements as a result of a quadrennial
experience study:
• Adjusted retiree mortality assumptions.
• Modified retirement rates to reflect fewer retirements.
• Lowered disability rates at most ages.
• Lowered employment termination rates
• Generally increased the probability of terminating members receiving a deferred
retirement benefit.
• Modified salary increase assumptions based on various service duration.
City of Iowa City, Iowa
Notes to Required Supplementary Information - Pension Liability
Iowa Public Employees' Retirement System
Year ended June 30, 2017
100
City of Iowa City, Iowa
Required Supplementary Information – Schedule of Funding Progress for Health and Dental Plans
For the Year Ended June 30, 2017
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, 2012 June 30, 2013 $ - $ 7,163,715 $ 7,163,715 0.00% $ 34,992,423 20.5%
July 1, 2014 June 30, 2015 $ - $ 5,150,697 $ 5,150,697 0.00% $ 35,972,242 14.3%
July 1, 2016 June 30, 2017 $ - $ 6,560,682 $ 6,560,682 0.00% $ 37,814,968 17.3%
101
102
~:~ ----------------
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Special Revenue Funds account for revenues derived from specific sources that are required to be accounted
for as separate funds. The funds in this category and their purpose are as follows:
Economic Development Fund – accounts for revenue and expenditures of economic development
activities.
Community Development Block Grant Fund – accounts for revenue from the U.S. Department of
Housing and Urban Development’s Community Development Block Grant programs.
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.
Metropolitan Planning Organization of Johnson County 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:
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.
103
Capital
Projects
Metropolitan
Community Other Planning
Development Shared Organization
Economic Block Revenue and of Johnson Other
Development Grant Grants County Construction Total
Assets
Equity in pooled cash and investments 476$ 24$ 5,029$ 227$ 19,703$ 25,459$
Receivables:
Property tax 327 - - - - 327
Accounts and unbilled usage - - 1 - - 1
Interest 2 - 2 1 24 29
Notes - 3,833 - - - 3,833
Due from other governments - 113 1,039 49 117 1,318
Inventories - -264 - - 264
Restricted assets:
Equity in pooled cash and investments - - 476 - 8,544 9,020
Total assets 805$ 3,970$ 6,811$ 277$ 28,388$ 40,251$
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable -$ 23$ 42$ 5$ 360$ 430$
Contracts payable - - - - 444 444
Accrued liabilities - 1 85 15 - 101
Advances from other funds - -125 - - 125
Due to other governments - -4 - - 4
Liabilities payable from restricted assets:
Deposits - - 6 - - 6
Advances from grantors - - 27 - 110 137
Total liabilities - 24 289 20 914 1,247
Deferred inflows of resources:
Unavailable revenues:
Succeeding year property taxes 323 - - - - 323
Grants - 91 1 - 25 117
Other - - - - 93 93
Total deferred inflows of resources 323 91 1 - 118 533
Fund balances:
Nonspendable - - 264 - - 264
Restricted 482 3,855 6,257 257 27,356 38,207
Total fund balances 482 3,855 6,521 257 27,356 38,471
Total liabilities, deferred inflows
of resources and fund balances 805$ 3,970$ 6,811$ 277$ 28,388$ 40,251$
Special Revenue
CITY OF IOWA CITY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2017
(amounts expressed in thousands)
104
Capital
Projects
Metropolitan
Community Other Planning
Development Shared Organization
Economic Block Revenue and of Johnson Other
Development Grant Grants County Construction Total
Revenues
Property taxes 2,516$ -$ -$ - $ - $ 2,516 $
Intergovernmental 29 1,110 9,205 291 614 11,249
Charges for services - - 67 - 299 366
Use of money and property 4 20 81 1 40 146
Miscellaneous - 50 94 4 248 396
Total revenues 2,549 1,180 9,447 296 1,201 14,673
Expenditures
Current:
Public safety - - - - 24 24
Public works - - 5,052 - 41 5,093
Culture and recreation - - - - 451 451
Community and economic
development 318 963 711 609 2,020 4,621
General government - - - - 11 11
Capital outlay - - 597 - 1,641 2,238
Total expenditures 318 963 6,360 609 4,188 12,438
Excess (deficiency) of revenues over
(under) expenditures 2,231 217 3,087 (313) (2,987) 2,235
Other Financing Sources (Uses)
Issuance of debt - - - - 15,893 15,893
Sale of capital assets - - - - 2,024 2,024
Premium on issuance of bonds - - - - 85 85
Transfers in - 4 336 268 5,204 5,812
Transfers out (1,988) (175) (4,014) - (1,612) (7,789)
Total other financing sources
and (uses)(1,988) (171) (3,678) 268 21,594 16,025
Net change in fund balances 243 46 (591) (45) 18,607 18,260
Fund Balances, Beginning, as restated 239 3,809 7,112 302 8,749 20,211
Fund Balances, Ending 482$ 3,855$ 6,521$ 257 $ 27,356 $ 38,471 $
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, 2017
(amounts expressed in thousands)
105
106
~:~ ----------------
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.
Transit Fund – accounts for the operation and maintenance of the public transportation system.
107
Airport Transit Total
Assets
Current assets:
Equity in pooled cash and investments 238$ 4,992$ 5,230$
Receivables:
Accounts and unbilled usage 24 15 39
Interest 1 15 16
Due from other governments 114 2,068 2,182
Inventories -294 294
Prepaid item 3 - 3
Total current assets 380 7,384 7,764
Noncurrent assets:
Restricted assets:
Equity in pooled cash and investments 111 50 161
Other post employment benefits asset 3 - 3
Capital assets:
Land 12,158 2,630 14,788
Buildings 5,377 15,399 20,776
Improvements other than buildings 396 - 396
Machinery and equipment 281 10,332 10,613
Infrastructure 17,758 955 18,713
Accumulated depreciation (8,704) (14,784) (23,488)
Construction in progress 66 476 542
Total noncurrent assets 27,446 15,058 42,504
Total assets 27,826 22,442 50,268
Deferred Outflows of Resources
Pension related deferred outflows 14 686 700
Liabilities
Current liabilities:
Accounts payable 8 159 167
Contracts payable 51 -51
Accrued liabilities 2 136 138
Employee vested benefits 2 115 117
Due to other governments -16 16
Total current liabilities 63 426 489
Noncurrent liabilities:
Liabilities payable from restricted assets:
Deposits 10 6 16
Employee vested benefits 1 82 83
Net pension liability 49 2,428 2,477
Other post employment benefits obligation -337 337
Total noncurrent liabilities 60 2,853 2,913
Total liabilities 123 3,279 3,402
Deferred Inflows of Resources
Pension related deferred inflows 3 153 156
Net Position
Net investment in capital assets 27,332 15,008 42,340
Restricted for future improvements 100 - 100
Unrestricted 282 4,688 4,970
Total net position 27,714$ 19,696$ 47,410$
CITY OF IOWA CITY, IOWA
COMBINING STATEMENT OF NET POSITION
NONMAJOR ENTERPRISE FUNDS
June 30, 2017
(amounts expressed in thousands)
108
Airport Transit Total
Operating Revenues:
Charges for services 345$ 2,089$ 2,434$
Miscellaneous 2 62 64
Total operating revenues 347 2,151 2,498
Operating Expenses:
Personal services 76 3,966 4,042
Commodities 105 646 751
Services and charges 239 1,883 2,122
420 6,495 6,915
Depreciation 997 887 1,884
Total operating expenses 1,417 7,382 8,799
Operating loss (1,070) (5,231) (6,301)
Nonoperating Revenues:
Gain on disposal of capital assets - 3 3
Operating grants 69 2,235 2,304
Interest income 1 29 30
Total nonoperating revenues 70 2,267 2,337
Loss before capital contributions
and transfers (1,000) (2,964) (3,964)
Capital contributions 58 395 453
Transfers in 113 3,272 3,385
Change in net position (829) 703 (126)
Net Position, Beginning 28,543 18,993 47,536
Net Position, Ending 27,714$ 19,696$ 47,410$
NONMAJOR ENTERPRISE FUNDS
AND CHANGES IN FUND NET POSITION
COMBINING STATEMENT OF REVENUES, EXPENSES,
CITY OF IOWA CITY, IOWA
(amounts expressed in thousands)
For the Year Ended June 30, 2017
109
Airport Transit Total
Cash Flows From Operating Activities
Receipts from customers and users 350$ 2,147$ 2,497$
Payments to suppliers (344) (2,872) (3,216)
Payments to employees (75) (3,900) (3,975)
Net cash flows used for operating activities (69) (4,625) (4,694)
Cash Flows From Noncapital Financing Activities
Operating grants received 29 612 641
Transfers from other funds 113 3,272 3,385
Net cash flows from noncapital financing activities 142 3,884 4,026
Cash Flows From Capital and Related Financing
Activities
Capital grants received 151 - 151
Acquisition and construction of property and equipment (472) (475) (947)
Proceeds from sale of property - 3 3
Net cash flows used for capital and related financing
activities (321) (472) (793)
Cash Flows From Investing Activities
Interest on investments - 26 26
Net decrease in cash and cash equivalents (248) (1,187) (1,435)
Cash and Cash Equivalents, Beginning 597 6,229 6,826
Cash and Cash Equivalents, Ending 349$ 5,042$ 5,391$
Reconciliation of operating loss to net cash
flows used for operating activities:
Operating loss (1,070)$ (5,231)$ (6,301)$
Adjustments to reconcile operating loss to
net cash flows used for operating activities:
Depreciation expense 997 887 1,884
Changes in:
Receivables:
Accounts and unbilled usage 3 (5) (2)
Due from other governments - 1 1
Inventories - (14) (14)
Prepaid item (3) - (3)
Accounts payable 3 (301) (298)
Accrued liabilities - 9 9
Employee vested benefits - (1) (1)
Due to other governments - (28) (28)
Net pension liability 9 442 451
Deferred outflows of resources (7) (347) (354)
Deferred inflows of resources (2) (86) (88)
Other post employment benefits asset/obligation 1 49 50
Total adjustments 1,001 606 1,607
Net cash flows used for operating activities (69)$ (4,625)$ (4,694)$
CITY OF IOWA CITY, IOWA
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR ENTERPRISE FUNDS
For the Year Ended June 30, 2017
(amounts expressed in thousands)
110
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, 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.
111
Equipment Central Loss Information
Maintenance Services Reserve Technology Total
Assets
Current assets:
Equity in pooled cash and investments 13,209$ 715$ 14,842$ 2,651$ 31,417$
Receivables:
Accounts and unbilled usage - - 157 - 157
Interest 42 2 37 8 89
Due from other governments 67 - - - 67
Inventories 466 - - - 466
Prepaid item - - - 12 12
Total current assets 13,784 717 15,036 2,671 32,208
Noncurrent assets:
Restricted assets:
Other post employment benefits asset 15 - 20 - 35
Capital assets:
Land 45 - - - 45
Buildings 1,298 - - 233 1,531
Improvements other than buildings 50 - - - 50
Machinery and equipment 19,271 804 24 2,234 22,333
Infrastructure - 31 - 2,818 2,849
Accumulated depreciation (12,228) (307) (24) (2,787) (15,346)
Construction in progress - - - 493 493
Total noncurrent assets 8,451 528 20 2,991 11,990
Total assets 22,235 1,245 15,056 5,662 44,198
Deferred Outflows of Resources
Pension related deferred outflows 167 6 38 170 381
Liabilities
Current liabilities:
Accounts payable 122 8 258 98 486
Accrued liabilities 31 1 2,681 33 2,746
Employee vested benefits 38 1 2 22 63
Total current liabilities 191 10 2,941 153 3,295
Noncurrent liabilities:
Employee vested benefits 30 1 1 18 50
Net pension liability 600 20 118 659 1,397
Other post employment benefits obligation - 7 - 90 97
Total noncurrent liabilities 630 28 119 767 1,544
Total liabilities 821 38 3,060 920 4,839
Deferred Inflows of Resources
Pension related deferred inflows 38 1 8 41 88
Net Position
Net investment in capital assets 8,436 528 - 2,991 11,955
Unrestricted 13,107 684 12,026 1,880 27,697
Total net position 21,543$ 1,212$ 12,026$ 4,871$ 39,652$
(amounts expressed in thousands)
CITY OF IOWA CITY
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
June 30, 2017
112
Equipment Central Loss Information
Maintenance Services Reserve Technology Total
Operating Revenues:
Charges for services 5,913$ 238$ 10,072$ 2,132$ 18,355$
Total operating revenues 5,913 238 10,072 2,132 18,355
Operating Expenses:
Personal services 978 36 205 956 2,175
Commodities 1,474 10 12 342 1,838
Services and charges 545 150 8,446 314 9,455
2,997 196 8,663 1,612 13,468
Depreciation 1,494 60 1 243 1,798
Total operating expenses 4,491 256 8,664 1,855 15,266
Operating income (loss)1,422 (18) 1,408 277 3,089
Nonoperating Revenues:
Gain on disposal of capital assets 84 - - - 84
Interest income 69 4 74 16 163
Total nonoperating revenues 153 4 74 16 247
Income (loss) before transfers 1,575 (14) 1,482 293 3,336
Capital contributions - - - 35 35
Transfers in 559 - - 763 1,322
Transfers out - - - (505) (505)
Change in net position 2,134 (14) 1,482 586 4,188
Net Position, Beginning 19,409 1,226 10,544 4,285 35,464
Net Position, Ending 21,543$ 1,212$ 12,026$ 4,871$ 39,652$
(amounts expressed in thousands)
CITY OF IOWA CITY, IOWA
COMBINING STATEMENT OF REVENUES, EXPENSES,
INTERNAL SERVICE FUNDS
For the Year Ended June 30, 2017
AND CHANGES IN FUND NET POSITION
113
Equipment Central Loss Information
Maintenance Services Reserve Technology Total
Cash Flows From Operating Activities
Receipts from customers and users 5,889$ 238$ 10,059$ 2,132$ 18,318$
Payments to suppliers (2,702) (159) (8,365) (619) (11,845)
Payments to employees (965) (36) (370) (924) (2,295)
Net cash flows from operating activities 2,222 43 1,324 589 4,178
Cash Flows From Noncapital Financing
Activities
Transfers from other funds 559 - - 763 1,322
Transfers to other funds - - - (505) (505)
Net cash flows from noncapital financing
activities 559 - - 258 817
Cash Flows From Capital and Related
Financing Activities
Acquisition and construction of property
and equipment (2,270) (5) - (861) (3,136)
Proceeds from sale of property 128 - -- 128
Net cash flows used for capital and related
financing activities (2,142) (5) - (861) (3,008)
Cash Flows From Investing Activities
Interest on investments 57 4 71 15 147
Net increase in cash
and cash equivalents 696 42 1,395 1 2,134
Cash and Cash Equivalents, Beginning 12,513 673 13,447 2,650 29,283
Cash and Cash Equivalents, Ending 13,209$ 715$ 14,842$ 2,651$ 31,417$
Reconciliation of operating income (loss)
to net cash flows from operating activities:
Operating income (loss)1,422$ (18)$ 1,408$ 277$ 3,089$
Adjustments to reconcile operating income
(loss) to net cash flows from operating
activities:
Depreciation expense 1,494 60 1 243 1,798
Changes in:
Receivables:
Accounts and unbilled usage - - (13) - (13)
Due from other governments (24) - - - (24)
Inventories 5 - - - 5
Prepaid item - -- (12) (12)
Accounts payable (688) 1 93 49 (545)
Accrued liabilities 4 - (164) 9 (151)
Employee vested benefits 6 - (3) 7 10
Net pension liability 106 3 23 117 249
Deferred outflows of resources (84) (3) (20) (79) (186)
Deferred inflows of resources (23) (1) (2) (30) (56)
Other post employment benefits
asset/obligation 4 1 1 8 14
Total adjustments 800 61 (84) 312 1,089
Net cash flows from operating activities 2,222$ 43$ 1,324$ 589$ 4,178$
Noncash Investing, Capital, and Financing
Activities:
Contributions of capital assets from
government and others -$ -$ -$ 35$ 35$
(amounts expressed in thousands)
CITY OF IOWA CITY, IOWA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For the Year Ended June 30, 2017
114
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.
115
Balance Balance
July 1, 2016 Increases Decreases June 30, 2017
Project Green
Assets
Equity in pooled cash and investments 175$ 72$ 84$ 163$
Interest receivable - 1 - 1
Total assets 175$ 73$ 84$ 164$
Liabilities
Accounts payable 10$ 4$ 10$ 4$
Due to agency 165 69 74 160
Total liabilities 175$ 73$ 84$ 164$
(amounts expressed in thousands)
CITY OF IOWA CITY
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
For the Year Ended June 30, 2017
AGENCY FUNDS
116
Statistical
Section
Tabs
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
F i n a n c i a l T r e n d s 1 1 9
These schedules contain trend information to help the reader understand how
the government’s financial performance and well-being have changed over
time.
R e v e n u e C a p a c i t y 1 2 4
These schedules contain information to help the reader assess the
government’s most significant local revenue source, the property tax.
D e b t C a p a c i t y 1 3 4
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 144
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the government’s financial activities
take place.
O p e r a t i n g I n f o r m a t i o n 1 4 6
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.
117
118
~:~ ----------------
2008 2009 2010 2011 2012 20131 2014 2015 20162 2017
Governmental activities
Net investment in capital assets 104,833 $ 100,741 $ 111,703 $ 123,935 $ 135,998 $ 133,989 $ 138,482 $ 153,729 $ 163,362 $ 183,651 $
Restricted 23,741 26,586 25,588 31,179 35,021 22,867 39,958 36,447 42,154 47,676
Unrestricted 1,119 17,938 32,478 36,862 38,906 50,744 39,758 15,520 18,402 16,264
Total governmental activities net position 129,693 $ 145,265 $ 169,769 $ 191,976 $ 209,925 $ 207,600 $ 218,198 $ 205,696 $ 223,918 $ 247,591 $
Business-type activities
Net investment in capital assets 156,075 $ 162,211 $ 172,601 $ 186,177 $ 195,073 $ 253,617 $ 264,727 $ 279,272 $ 279,679 $ 285,912 $
Restricted 21,320 19,159 17,588 20,658 20,176 19,033 19,438 22,389 22,269 21,238
Unrestricted 60,225 63,842 65,725 61,032 58,850 74,370 71,542 57,367 69,472 76,664
Total business-type activities net position 237,620 $ 245,212 $ 255,914 $ 267,867 $ 274,099 $ 347,020 $ 355,707 $ 359,028 $ 371,420 $ 383,814 $
Primary government
Net investment in capital assets 260,908 $ 262,952 $ 284,304 $ 310,112 $ 331,071 $ 387,606 $ 403,209 $ 433,001 $ 443,041 $ 469,563 $
Restricted 45,061 45,025 43,176 51,837 55,197 41,900 59,396 58,836 64,423 68,914
Unrestricted 61,344 82,500 98,203 97,894 97,756 125,114 111,300 72,887 87,874 92,928
Total primary government net position 367,313 $ 390,477 $ 425,683 $ 459,843 $ 484,024 $ 554,620 $ 573,905 $ 564,724 $ 595,338 $ 631,405 $
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.
2 The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015.
CITY OF IOWA CITY, IOWA
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(Accrual basis of accounting)
(amounts expressed in thousands)
119
2008 2009 2010 2011 2012 20131 2014 2015 20162 2017
Expenses
Governmental activities:
Public safety 20,504 $ 20,730 $ 19,955 $ 18,867 $ 21,186$ 20,989 $ 22,721 $ 21,193 $ 22,029 $ 24,002$
Public works 13,727 15,177 16,806 19,145 17,556 10,240 8,258 11,037 10,839 12,032
Culture and recreation 13,460 9,574 12,238 10,811 13,107 14,481 16,586 14,049 14,422 15,525
Community and economic development 1,850 8,726 16,913 16,501 16,305 10,596 10,059 7,093 6,786 8,253
General government 7,433 7,600 7,549 7,356 7,591 7,513 7,687 7,752 6,240 6,124
Debt service 3,517 3,264 2,970 2,841 2,400 2,237 1,797 1,517 1,287 1,481
Total governmental activities expenses 60,491 65,071 76,431 75,521 78,145 66,056 67,108 62,641 61,603 67,417
Business-type activities:
Wastewater 11,757 11,925 11,274 10,971 11,069 10,464 21,139 12,131 11,866 11,233
Water 8,804 9,185 8,309 8,523 8,781 9,074 8,723 8,403 8,149 8,921
Sanitation 6,868 7,296 7,705 7,461 8,315 7,279 8,402 8,114 8,735 9,123
Housing authority 7,374 7,238 7,838 7,448 7,911 7,658 7,703 7,873 8,378 8,798
Parking 3,913 4,489 4,536 4,135 4,167 4,579 4,093 4,678 4,460 4,620
Airport 560 693 724 1,049 1,127 1,086 1,209 1,612 1,597 1,402
Stormwater 1,072 1,223 1,187 1,418 1,304 1,318 1,314 2,091 1,989 2,432
Cable television 598 633 645 638 689 692 781 704 - -
Transit -- - - - 6,998 7,795 7,379 7,486 7,263
Total business-type activities expenses 40,946 42,682 42,218 41,643 43,363 49,148 61,159 52,985 52,660 53,792
Total primary government expenses 101,437 $ 107,753 $ 118,649 $ 117,164 $ 121,508$ 115,204 $ 128,267 $ 115,626 $ 114,263$ 121,209 $
Program Revenues Governmental activities: Charges for services
Public safety 3,019 $ 2,968 $ 2,980 $ 3,279 $ 3,401 $ 4,098$ 3,626 $ 3,926 $ 4,813$ 5,286 $ Public works 1,047 1,392 1,061 1,117 1,112 52 61 388 628 724 Culture and recreation 680 715 773 872 825 775 808 801 823 842 Community and economic development -- - - - - 45 50 1,044 36 General government 1,633 1,626 2,574 2,931 2,817 2,763 3,030 2,975 1,252 1,524
Operating grants and contributions 3,611 8,185 15,554 13,517 8,682 4,731 3,231 8,701 9,941 10,828 Capital grants and contributions 1,747 3,773 8,291 6,048 6,078 6,876 5,580 11,556 3,999 9,952
Total governmental activities program revenues 11,737 18,659 31,233 27,764 22,915 19,295 16,381 28,397 22,500 29,192
Business-type activities:
Charges for services:
Wastewater 12,318 12,557 12,637 12,836 12,670 12,832 12,559 12,189 12,266 12,277
Water 8,195 8,107 7,957 8,054 8,419 8,583 8,443 8,527 9,134 9,275
Sanitation 7,853 8,286 8,096 8,259 8,115 8,181 8,467 9,015 9,215 9,927
Housing authority 149 181 180 208 207 205 213 237 300 321
Parking 4,673 5,438 5,377 5,234 4,743 5,043 5,294 5,502 5,438 5,453
Airport 258 248 289 293 306 314 328 349 333 345
Stormwater 616 622 617 641 811 974 1,093 1,147 1,168 1,544
Cable Television 814 788 790 809 824 816 773 750 - -
Transit1 -- - - - 2,117 2,185 2,289 2,099 2,089
(continued)
CITY OF IOWA CITY, IOWA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual basis of accounting)
(amounts expressed in thousands)
120
2008 2009 2010 2011 2012 20131 2014 2015 20162 2017
Capital grants and contributions: Wastewater 577 266 2,115 2,394 3,223 30,181 7,105 1,370 3,415 2,226
Capital grants and contributions: Water 314 132 572 973 977 494 539 581 254 869
Capital grants and contributions: Sanitation -- 6 - 2 - - - - -
Capital grants and contributions: Airport 1,580 3,239 3,311 358 1,576 2,452 5,214 137 260 58
Capital grants and contributions: Stormwater 302 68 541 140 436 226 711 792 370 1,251
Capital grants and contributions: Housing authority 17 - 25 11 - - - - - -
Capital grants and contributions: Parking 8 - -269 4 - - - - -
Capital grants and contributions: Transit -- - - - 898 243 - 308 395
Operating grants and contributions: Housing authority 6,281 6,668 7,765 7,438 6,782 6,968 6,721 7,628 8,318 8,532
Operating grants and contributions: Water -15 6 - - 442 6 2 - -
Operating grants and contributions: Airport -2 - - - 11 56 232 128 69
Operating grants and contributions: Sanitation -607 6 10 - 23 27 25 3 -
Operating grants and contributions: Wastewater -1 - - - -62 21 - -
Operating grants and contributions: Stormwater --- - - 13 13 279 95 -
Operating grants and contributions: Transit --- - - 1,767 2,118 2,082 2,095 2,235
Total business-type activities program revenues 43,955 47,225 50,290 47,927 49,095 82,540 62,170 53,154 55,199 56,866
Total primary government revenues 55,692 $ 65,884 $ 81,523 $ 75,691$ 72,010 $ 101,835$ 78,551 $ 81,551 $ 77,699 $ 86,058$
Net (Expense) / Revenues
Governmental activities (48,754)$ (46,412)$ (45,198)$ (47,757)$ (55,230)$ (46,761)$ (50,727)$ (34,244)$ (39,103)$ (38,225)$
Business-type activities 3,009 4,543 8,072 6,284 5,732 33,392 1,011 169 2,539 3,074 Total primary government net expense (45,745)$ (41,869)$ (37,126)$ (41,473)$ (49,498)$ (13,369)$ (49,716)$ (34,075)$ (36,564)$ (35,151)$
General Revenues and Other Changes in Net Position
Governmental activities:
General revenues:
Property taxes 43,400 $ 47,085 $ 49,467 $ 48,011$ 50,516 $ 51,017$ 50,551 $ 52,205 $ 53,114 $ 57,649 $
Road use tax3 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 1,435 1,489 1,535 2,464 2,491 2,609 2,778 2,810 2,717 2,802
Grants and contributions not restricted to specific purposes -- - - - - - 1,048 2,080 1,583
Earnings on investments 3,932 3,057 1,766 1,539 1,823 841 973 1,188 1,045 1,397
Miscellaneous 3,516 4,894 3,893 6,230 4,228 4,390 4,353 5,518 4,464 3,369
Gain on sale of assets (7)- - 761 2,950 1,312 1,651 135 218 2,151
Transfers 488 205 (625) (4,020) (3,867) (10,485) (6,192) (10,057) (6,395) (7,053)
Reassignments -- - -- - - - 82 -
Total governmental activities 58,196 61,984 69,702 69,964 73,179 65,131 61,325 52,847 57,325 61,898
Business-type activities:
General revenues:
Earnings on investments 3,279 2,577 1,311 954 813 671 494 707 715 938
Gain on sale of assets 1,260 360 230 314 336 293 725 856 2,463 69
Miscellaneous 454 317 464 381 484 918 265 374 362 1,260
Transfers (488)(205) 625 4,020 3,867 10,485 6,192 10,057 6,395 7,053
Reassignments --- - - - - - (82) -
Special items --- - - - - (574) - -
Extraordinary items --- - (5,000) - - - --
Total business-type activities 4,505 3,049 2,630 5,669 500 12,367 7,676 11,420 9,853 9,320
Total primary government 62,701 $ 65,033 $ 72,332 $ 75,633 $ 73,679$ 77,498 $ 69,001 $ 64,267 $ 67,178 $ 71,218 $
Change in Net Position
Governmental activities 9,442 $ 15,572 $ 24,504 $ 22,207$ 17,949 $ 18,370 $ 10,598$ 18,603 $ 18,222 $ 23,673 $
Business-type activities 7,514 7,592 10,702 11,953 6,232 45,759 8,687 11,589 12,392 12,394 Total primary government 16,956 $ 23,164 $ 35,206 $ 34,160$ 24,181 $ 64,129 $ 19,285$ 30,192 $ 30,614 $ 36,067$
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.
2 The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015.
3 The City of Iowa City reclassified Road Use Tax from General Revenues to Operating Grants effective for the fiscal year ending June 30, 2015.
CITY OF IOWA CITY, IOWA
CHANGES IN NET POSITION (continued)
Last Ten Fiscal Years
(Accrual basis of accounting)
(amounts expressed in thousands)
121
2008 2009 2010 20111 2012 20132 2014 2015 20163 2017
General Fund
Nonspendable -$ -$ -$ 331$ 314$ 69$ 69$ 69$ 69$ 788$
Restricted - - - 16,268 23,779 25,689 26,533 25,291 18,975 9,974
Committed - - - - - - - - 4,699 5,199
Assigned - - - 3,542 5,191 1,744 3,400 - 1,143 1,342
Reserved 446 555 406 - - - - 4,483 - -
Unassigned - - - 15,931 14,273 17,113 17,907 19,286 23,366 24,793
Unreserved 14,488 15,362 26,101 - - - - - - -
Total general fund 14,934$ 15,917$ 26,507$ 36,072$ 43,557$ 44,615$ 47,909$ 49,129$ 48,252$ 42,096$
All other Governmental Funds
Nonspendable -$ -$ -$ -$ -$ -$ -$ -$ -$ 344$
Restricted - - - 34,889 34,853 28,108 31,285 27,897 38,266 63,941
Reserved 3,107 5,339 3,903 - - - - - - -
Designated for long-term debt 8,691 11,759 13,952 - - - - - - -
Unassigned - - - (1,741) (366) (5,844) (9) - - -
Unreserved, reported in:
Special revenue funds 2,571 (1,852) (1,674) - - - - - - -
Capital projects funds 11,118 10,960 8,043 - - - - - - -
Total all other governmental funds 25,487$ 26,206$ 24,224$ 33,148$ 34,487$ 22,264$ 31,276$ 27,897$ 38,266$ 64,285$
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.
3 The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015.
CITY OF IOWA CITY, IOWA
FUND BALANCES, GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(Modified accrual basis of accounting)
(amounts expressed in thousands)
122
2008 2009 2010 2011 2012 20131 2014 2015 20162 2017
Revenues:
Property taxes and assessments 44,835$ 48,572$ 59,143$ 59,387$ 61,649$ 62,483$ 53,797$ 55,014$ 55,831$ 60,452$
Licenses and permits 1,270 1,284 1,211 1,412 1,307 1,784 1,660 1,806 3,056 3,521
Intergovernmental 12,764 19,521 31,404 29,870 21,952 19,941 17,636 21,086 20,230 24,140
Charges for services 2,228 2,498 2,433 2,515 2,614 1,800 1,819 2,204 3,357 2,355
Fines and forfeits - - - - - - - - 760 750
Use of money and property 3,206 2,645 1,599 1,479 1,768 782 909 1,080 946 1,235
Miscellaneous 3,977 5,302 4,784 7,749 5,750 6,325 6,040 7,045 2,913 2,101
Total governmental activities revenues 68,280$ 79,822$ 100,574$ 102,412$ 95,040$ 93,115$ 81,861$ 88,235$ 87,093$ 94,554$
Expenditures
Current
Public safety 18,705$ 18,752$ 19,108$ 18,717$ 20,091$ 20,648$ 21,370$ 21,996$ 21,701$ 22,513$
Public works 12,108 12,405 13,311 14,766 15,462 8,503 8,432 12,071 9,466 9,186
Culture and recreation 10,703 10,849 11,266 12,498 13,075 13,000 13,087 11,821 12,257 13,341
Community and economic development 4,437 8,037 10,520 8,878 8,037 8,219 8,196 5,711 5,346 7,695
General government 7,207 7,300 7,191 7,695 7,553 7,286 7,184 7,608 6,007 5,882
Debt service
Principal 7,323 8,418 9,354 10,386 13,294 16,465 13,560 12,564 13,230 13,305
Interest 3,556 3,364 3,064 2,889 2,543 2,339 1,903 1,669 1,475 1,597
Capital projects 11,811 17,096 17,690 21,873 16,006 17,861 14,528 14,762 14,848 18,405
Total expenditures 75,850$ 86,221$ 91,504$ 97,702$ 96,061$ 94,321$ 88,260$ 88,202$ 84,330$ 91,924$
Excess (deficiency) of revenues over
(under) expenditures (7,570)$ (6,399)$ 9,070$ 4,710$ (1,021)$ (1,206)$ (6,399)$ 33$ 2,763$ 2,630$
Other financing sources (uses):
Issuance of long-term debt 9,150$ 30,035$ -$ 16,165$ 9,690$ 2,655$ 19,730$ 7,785$ 9,405$ 22,570$
Issuance of refunding debt ---10,930 - - - - - -
Sale of capital assets 111 554 222 845 3,619 1,369 1,684 165 252 2,292
Insurance Recoveries - - 20 594 53 - - - - -
Premium (discount) on issuance of bonds 16 552 -394 165 (42) 385 199 441 120
Payment of refunded bonds -(23,140) -(11,085) - - - - - -
Transfers in 25,413 16,486 16,742 18,658 19,499 25,198 13,040 13,089 25,133 34,675
Transfers out (23,328) (16,386) (17,446) (22,722) (23,181) (35,493) (16,134) (23,430) (28,502) (47,033)
Total other financing sources (uses)11,362$ 8,101$ (462)$ 13,779$ 9,845$ (6,313)$ 18,705$ (2,192)$ 6,729$ 12,624$
Net change in fund balances 3,792$ 1,702$ 8,608$ 18,489$ 8,824$ (7,519)$ 12,306$ (2,159)$ 9,492$ 15,254$
Debt service as a percentage of
noncapital expenditures 16.6%17.0%15.3%16.2%18.6%24.0%20.7%19.8%21.2%19.9%
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.
2 The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015.
CITY OF IOWA CITY, IOWA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
123
Fiscal Local Option Utility
Year Property Tax Road Use Tax Hotel/Motel Tax Sales Tax1 Franchise Fee 2 Total
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
2015 53,056 7,231 1,057 - 902 62,246
2016 53,878 8,320 1,079 - 874 64,151
2017 58,375 8,672 1,137 - 939 69,123
1 1% Local Option Sales Tax went into effect 7/1/09 and was 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)
124
Co
l
l
e
c
t
i
o
n
Co
m
m
e
r
c
i
a
l
,
I
n
d
u
s
t
r
i
a
l
In
c
r
e
m
e
n
t
a
l
V
a
l
u
e
G
a
s
&
Residential Taxable Value Total
Ye
a
r
E
n
d
e
d
Ag
r
i
c
u
l
t
u
r
a
l
&
U
t
i
l
i
t
i
e
s
(
e
x
c
l
u
d
i
n
g
M
i
l
i
t
a
r
y
Ne
t
(D
e
b
t
S
e
r
v
i
c
e
E
l
e
c
t
r
i
c
U
t
i
l
i
t
i
e
s
To
t
a
l
R
o
l
l
b
a
c
k
a
s
a
P
e
r
c
e
n
t
a
g
e
Direct
Ju
n
e
3
0
Re
s
i
d
e
n
t
i
a
l
(T
a
x
e
d
a
t
A
g
R
a
t
e
)
Ga
s
&
E
l
e
c
t
r
i
c
)
Ex
e
m
p
t
i
o
n
s
Va
l
u
a
t
i
o
n
Le
v
y
O
n
l
y
)
(e
x
c
i
s
e
t
a
x
)
Va
l
u
e
Percentage of Assessed Value Rate
20
0
8
A
s
s
e
s
s
e
d
2
,
7
2
2
,
7
5
4
1
,
5
3
4
1
,
0
5
8
,
5
8
0
3
,
4
2
4
3
,
7
7
9
,
4
4
4
$
9
4
,
8
6
4
5
4
,
0
5
3
3
,
9
2
8
,
3
6
1
$
Ta
x
a
b
l
e
1
,
2
3
4
,
8
7
2
1
,
5
3
4
1
,
0
5
8
,
5
8
0
3
,
4
2
4
2
,
2
9
1
,
5
6
2
$
9
4
,
8
6
4
4
1
,
5
4
2
2
,
4
2
7
,
9
6
8
$
4
5
.
5
6
0
61.806 17.297
20
0
9
A
s
s
e
s
s
e
d
2
,
9
9
1
,
7
0
2
1
,
5
6
5
1
,
1
0
8
,
1
2
3
3
,
3
9
6
4
,
0
9
7
,
9
9
4
$
1
1
1
,
5
4
0
5
4
,
0
8
1
4
,
2
6
3
,
6
1
5
$
Ta
x
a
b
l
e
1
,
3
0
7
,
5
1
1
1
,
4
1
0
1
,
1
0
5
,
1
0
9
3
,
3
9
6
2
,
4
1
0
,
6
3
4
$
1
1
1
,
5
4
0
4
4
,
5
9
7
2
,
5
6
6
,
7
7
1
$
4
4
.
0
8
0
60.202 17.717
20
1
0
A
s
s
e
s
s
e
d
3
,
0
6
5
,
2
7
9
1
,
4
9
9
1
,
1
3
3
,
8
1
8
3
,
3
2
4
4
,
1
9
7
,
2
7
2
$
1
1
7
,
8
1
3
6
1
,
0
6
6
4
,
3
7
6
,
1
5
1
$
Ta
x
a
b
l
e
1
,
3
8
4
,
0
8
8
1
,
4
0
7
1
,
1
3
3
,
8
1
8
3
,
3
2
4
2
,
5
1
5
,
9
8
9
$
1
1
7
,
8
1
3
4
5
,
1
5
7
2
,
6
7
8
,
9
5
9
$
4
5
.
5
8
9
61.217 17.853
20
1
1
A
s
s
e
s
s
e
d
3
,
1
2
2
,
8
7
5
2
,
3
1
5
1
,
2
2
3
,
3
0
4
3
,
2
3
9
4
,
3
4
5
,
2
5
5
$
2
5
,
4
0
9
7
9
,
1
9
6
4
,
4
4
9
,
8
6
0
$
Ta
x
a
b
l
e
1
,
4
6
4
,
6
4
4
1
,
5
3
4
1
,
2
2
3
,
3
0
4
3
,
2
3
9
2
,
6
8
6
,
2
4
3
$
2
5
,
4
0
9
4
6
,
3
3
3
2
,
7
5
7
,
9
8
5
$
4
6
.
9
0
9
61.979 17.757
20
1
2
A
s
s
e
s
s
e
d
3
,
1
8
2
,
6
3
6
2
,
2
6
4
1
,
2
3
1
,
7
5
6
3
,
1
6
3
4
,
4
1
3
,
4
9
3
$
2
5
,
4
0
9
8
1
,
2
4
0
4
,
5
2
0
,
1
4
2
$
Ta
x
a
b
l
e
1
,
5
4
4
,
2
6
1
1
,
5
6
2
1
,
2
3
1
,
7
5
6
3
,
1
6
3
2
,
7
7
4
,
4
1
6
$
2
5
,
4
0
9
4
8
,
3
3
8
2
,
8
4
8
,
1
6
3
$
4
8
.
5
3
0
63.010 17.842
20
1
3
A
s
s
e
s
s
e
d
3
,
2
8
4
,
2
4
9
2,
5
1
6
1,
2
3
6
,
6
0
9
3,0
9
7
4,
5
2
0
,
2
7
7
$
11
,
7
1
2
83
,
5
3
8
4,
6
1
5
,
5
2
7
$
Ta
x
a
b
l
e
1
,
6
6
6
,
0
3
6
1,
4
4
8
1,
2
3
6
,
6
0
9
3,0
9
7
2,
9
0
0
,
9
9
6
$
11
,
7
1
2
47
,
4
0
4
2,
9
6
0
,
1
1
2
$
50.752 64.134 17.269
20
1
4
A ss
e
s
s
e
d
3
,
3
6
7
,
0
5
2
2,
6
5
6
1,
2
0
0
,
4
5
7
3,0
6
0
4,
5
6
7
,
1
0
5
$
14
,
1
1
4
87
,
1
0
0
4,
6
6
8
,
3
1
9
$
Ta
x
a
b
l
e
1
,
7
7
6
,
0
9
6
1,
5
9
2
1,
2
0
0
,
4
5
7
3,0
6
0
2,
9
7
5
,
0
8
5
$
14
,
1
1
4
46
,
8
1
3
3,
0
3
6
,
0
1
2
$
52.817 65.034 16.805
20
1
5
A
s
s
e
s
s
e
d
3
,
4
8
8
,
1
1
3
3,
6
8
1
1,
2
3
8
,
0
1
8
2,9
3
9
4,
7
2
6
,
8
7
3
$
21
,
1
3
2
78
,
6
4
3
4,
8
2
6
,
6
4
8
$
Ta
x
a
b
l
e
1
,
8
9
4
,
0
8
0
1,
5
9
8
1,
1
7
5
,
9
2
1
2,9
3
9
3,
0
6
8
,
6
6
0
$
21
,
1
3
2
47
,
0
0
5
3,
1
3
6
,
7
9
7
$
54.400 64.989 16.705
20
1
6
A
s
s
e
s
s
e
d
3
,
6
0
3
,
7
4
4
3,
5
5
4
1,
2
1
6
,
0
5
4
2,8
2
8
4,
8
2
0
,
5
2
4
$
42
,
3
0
7
87
,
7
2
8
4,
9
5
0
,
5
5
9
$
Ta
x
a
b
l
e
2
,
0
0
8
,
4
9
3
1,
5
8
8
1,
0
9
5
,
2
7
2
2,8
2
8
3,
1
0
2
,
5
2
5
$
33
,
3
3
1
46
,
7
8
5
3,
1
8
2
,
6
4
1
$
55.734 64.289 16.651
20
1
7
A
s
s
e
s
s
e
d
3
,
8
8
2
,
7
5
7
3,
7
2
1
1,
3
0
0
,
8
4
0
2,7
2
8
5,
1
8
4
,
5
9
0
$
72
,
6
5
1
92
,
9
8
7
5,
3
5
0
,
2
2
8
$
Ta
x
a
b
l
e
2
,
1
5
5
,
0
3
3
1,
7
0
7
1,
1
4
9
,
7
3
6
2,7
2
8
3,
3
0
3
,
7
4
8
$
72
,
6
5
1
44
,
9
8
7
3,
4
2
1
,
3
8
6
$
55.626 63.948 16.583
So
u
r
c
e
s
:
Io
w
a
D
e
p
a
r
t
m
e
n
t
o
f
M
a
n
a
g
e
m
e
n
t
No
t
e
s
:
Pr
o
p
e
r
t
y
i
s
r
e
a
s
s
e
s
s
e
d
i
n
t
he
o
d
d
n
u
m
b
e
r
e
d
y
e
a
r
s
t
o
m
a
k
e
a
d
j
u
s
t
me
n
t
s
t
o
a
l
l
p
r
o
p
e
r
t
y
v
a
l
u
e
s
,
a
c
c
o
r
d
i
n
g
t
o
c
u
r
r
e
n
t
m
a
r
k
e
t
v
a
l
u
e
s
.
A
s
p
e
r
t
h
e
C
o
d
e
o
f
I
o
w
a
,
a
l
l
r
e
a
l
p
r
o
p
e
r
t
y
s
u
b
j
e
c
t
t
o
t
a
x
a
t
i
o
n
sh
a
l
l
b
e
v
a
l
u
e
d
a
t
i
t
s
a
c
t
u
a
l
v
a
l
u
e
a
n
d
,
e
x
c
e
p
t
a
s
o
t
h
e
r
w
i
s
e
p
r
o
v
i
d
e
d
,
s
h
a
l
l
b
e
r
e
a
s
s
e
s
s
e
d
a
t
1
0
0
%
o
f
i
t
s
a
c
t
u
a
l
v
a
l
u
e
.
CI
T
Y
O
F
I
O
W
A
C
I
T
Y
,
I
O
W
A
AS
S
E
S
S
E
D
A
N
D
T
A
X
A
B
L
E
V
A
L
U
E
O
F
P
R
O
P
E
R
T
Y
La
s
t
T
e
n
F
i
s
c
a
l
Y
e
a
r
s
(a
m
o
u
n
t
s
e
x
p
r
e
s
s
e
d
i
n
t
h
o
u
s
a
n
d
s
)
12
5
(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
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
2015 12.575 4.130 16.705 7.062 13.700 1.058 0.003 38.528
2016 12.822 3.829 16.651 7.228 13.868 1.061 0.003 38.811
2017 13.005 3.578 16.583 7.093 13.989 1.080 0.003 38.748
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
126
Collection Total Tax Current Tax Delinquent Tax Total Tax
Year Levied Collections Collections1 Collections
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
2015 51,609 51,292 99.4 3 51,295 99.4
2016 52,034 52,074 100.1 0 52,074 100.1
2017 55,330 55,331 100.0 0 55,331 100.0
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)
127
% of Total % of Total
Taxable Taxable Taxable Taxable
Ten largest taxpayers 1 Type of Business Valuation Rank Valuation Valuation Rank Valuation
ACT Inc (Am College Testing Prgrm)Educational Testing Service 34,535 $ 2 1.42 % 47,791 $ 1 1.40 %
Mid-American Energy Company Public Gas and Electric Utility 44,496 1 1.83 31,555 2 0.92
Ann Gerdin Trust (formerly Russell Gerdin) Warehousing - -N/A 22,836 3 0.67
Midwestone Bank Finanacial - -N/A 21,066 4 0.62
Dealer Properties IC LLC (Billion Auto) Car Dealerships - -N/A 18,889 5 0.55
Proctor & Gamble LLC Manufacturing Company 11,985 10 0.49 16,459 6 0.48
BBCS Hawkeye Housing LLC Real Estate Mangment - -N/A 15,328 7 0.45
Vesper Iowa City LLC Real Estate Developer - -N/A 14,358 8 0.42
Alpha Inc. Industrial - -N/A 13,949 9 0.41
National Computer Systems (Pearson)Information Services 16,227 5 0.67 12,815 10 0.37
Jame A and Lorretta Clark Apartments 28,506 3 1.17 - -N/A
Kobrin Deve Co Inc (Southgate Dev Co) Real Estate Developer 19,267 4 0.79 - -N/A
Plaza Towers LLC Condo/Hotel/Commercial space 15,300 6 0.63 - -N/A
MEHSM LC (Sycamore Mall)Shopping Mall 15,011 7 0.62 - -N/A
Russell Gerdin Trucking Company 14,611 8 0.60 - -N/A
United Natural Foods Wholesale Distribution Company 13,059 9 0.54 - - N/A
Total 212,997 $ 8.76 % 215,046 $ 6.29 %
Sources:
1City of Iowa City Assessor's Office - 2016 Annual Report
CITY OF IOWA CITY, IOWA
PRINCIPAL TAXPAYERS
Current Year and Nine Years Ago
(amounts expressed in thousands)
20172008
128
129
~:~ ----------------
Customer Name Charges Rank Percentage Charges Rank Percentage
Proctor & Gamble 630,949$ 1 7.91 %768,168$ 1 8.39 %
Veterans Administration Medical Center 98,229 2 1.23 115,589 2 1.26
Mark IV Apts - -N/A 69,603 3 0.76
Campus Apartments 65,318 5 0.82 65,672 4 0.72
Mercy Hospital 72,710 3 0.91 65,422 5 0.71
University of Iowa (Mayflower Apartments)42,709 8 0.54 43,148 6 0.47
Oaknoll Retirement Residence - -N/A 39,154 7 0.43
Seville Apts - -N/A 37,563 8 0.41
Iowa City School District - -N/A 35,999 9 0.39
RBD Iowa City LLC DBA Sheraton - -N/A 33,165 10 0.36
Dolphin Lake Point (Rus Properties Mngmt)67,054 4 0.84 - -N/A
Robert's Dairy 63,503 6 0.80 - -N/A
ACT 50,923 7 0.64 - -N/A
Lear Corp 38,531 9 0.48 - -N/A
Sheraton Inn/Holiday Inn 34,970 10 0.44 - -N/A
1,164,896$ 14.61 %1,273,483$ 13.90 %
Total Water System Charges 7,976,536$ 9,156,005$
Sources:
City of Iowa City Revenue Division
20172008
CITY OF IOWA CITY, IOWA
PRINCIPAL WATER SYSTEM CUSTOMERS
Current Year and Nine Years Ago
130
Fiscal Water Sales Water System
Year Cubic Feet Sold Charges
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
20151 240,423,612 8,161,522
2016 255,524,943 8,758,683
2017 267,511,531 9,156,005
Sources:
City of Iowa City Revenue Department
Notes:
1Beginning in March 2015, Water Sales by Cubic Feet Sold also includes unbilled usage.
CITY OF IOWA CITY, IOWA
SALES HISTORY AND TOTAL WATER CHARGES
Last Ten Fiscal Years
131
Customer Name Charges Rank Percentage Charges Rank Percentage
University of Iowa 2,017,440$ 1 16.51 %1,860,993$ 1 15.00 %
Proctor & Gamble 1,131,315 2 9.26 1,086,165 2 8.76
Iowa City Landfill 106,445 7 0.87 159,650 3 1.29
Veterans Administration Medical Center 110,306 5 0.90 135,049 4 1.09
Mercy Hospital 118,333 4 0.97 104,653 5 0.84
Mark IV Apts 66,229 10 0.54 91,500 6 0.74
Campus Apartments 85,198 8 0.70 76,669 7 0.62
University of Iowa Mayflower 71,611 9 0.59 68,568 8 0.55
Oaknoll Retirement Residence - -N/A 55,788 9 0.45
RBD Iowa City LLC DBA Sheraton - -N/A 53,955 10 0.43
Dolphin Lake Point (Rus Properties Mngmt)110,129 6 0.90 - -N/A
Robert's Dairy 160,445 3 1.31 - -N/A
3,977,451$ 32.55 %3,692,990$ 29.77 %
Total Sewer System Charges 12,221,769$ 12,404,360$
Sources:
City of Iowa City Revenue Department
CITY OF IOWA CITY, IOWA
PRINCIPAL SEWER SYSTEM CUSTOMERS
Current Year and Nine Years Ago
20172008
132
Fiscal Sewer Sales Sewer System
Year Cubic Feet Sold Charges
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 269,494,125 12,382,031
20151 266,830,947 12,278,153
2016 270,547,701 12,022,203
2017 277,712,785 12,404,360
Sources:
City of Iowa City Revenue Department
Notes:
1Beginning in March 2015, Sewer Sales by Cubic Feet Sold also includes unbilled usage.
CITY OF IOWA CITY, IOWA
SALES HISTORY AND TOTAL SEWER CHARGES
Last Ten Fiscal Years
133
General Capital General Total Percentage
Fiscal Obligation Revenue Loan Obligation Revenue Primary of Personal Per
Year Bonds1 Bonds1 Note Bonds1 Bonds1 Government Income2 Capita2
2008 82,268,532 - 211,000 4,885,710 94,549,386 181,914,628 3.04 2,682
2009 81,222,533 - 211,000 4,317,787 87,875,855 173,627,175 2.92 2,513
2010 71,791,737 - 211,000 3,731,167 79,281,888 155,015,792 2.57 2,284
2011 77,743,957 - 211,000 3,130,849 75,857,306 156,943,112 2.38 2,276
2012 74,225,654 - 211,000 1,483,473 69,059,307 144,979,434 2.08 2,103
2013 57,688,803 2,614,644 211,000 1,182,315 62,764,738 124,461,500 1.72 1,775
2014 64,132,510 2,616,768 211,000 886,157 57,568,517 125,414,952 1.65 1,752
2015 59,421,203 2,618,892 211,000 590,000 45,566,903 108,407,998 1.43 1,477
2016 55,998,392 2,491,016 211,000 295,000 39,951,661 98,947,069 1.26 1,333
2017 52,571,254 15,168,140 211,000 - 34,670,297 102,620,691 1.25 1,379
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 144.
Governmental Activities Business-Type Activities
CITY OF IOWA CITY, IOWA
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
134
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
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 6,872 58,147 12.46 : 1000 812
2015 4,826,648 59,421 590 60,011 7,052 52,959 10.97 : 1000 721
2016 4,950,559 55,998 295 56,293 6,573 49,720 10.04 : 1000 670
2017 5,350,228 52,571 - 52,571 7,756 44,815 8.38 : 1000 602
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 144.
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)
135
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
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 13,560 1,903 15,463 104,394 .15 : 1.00
2015 12,564 1,669 14,233 111,632 .13 : 1.00
2016 13,230 1,475 14,705 112,832 .13 : 1.00
2017 13,305 1,597 14,902 138,957 .11 : 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.
136
CITY OF IOWA CITY, IOWA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
June 30, 2017
(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 Debt/Actual
Governmental Unit Outstanding Iowa City Iowa City Market Value 2 Per Capita3
City of Iowa City 67,950$ 100.00 %67,950$ 1.27 %913.3310$
Iowa City Community
School District1 3,205 57.23 1,834 0.03 24.6512
Johnson County1 10,970 42.54 4,667 0.09 62.7302
Clear Creek- Amana -
Community School District1 58,795 0.04 26 0.00 0.3495
Kirkwood Comm. College1 79,468 14.17 11,261 0.21 151.3616
Total Overlapping Debt 152,438 17,788 239.0925
Total Direct & Overlapping Debt 220,388$ 85,738$ 1,152.4235
Per capita assessed value 71,914$
1 Long term debt outstanding includes only GO debt.
2City Property Assessed Value of 5,350,228 came from the Iowa Department of Management
3 Population for FY17 of 74,398 came from the US Census Bureau
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.
137
20
0
8
20
0
9
20
1
0
20
1
1
20
1
2
20
1
3
20
1
4
20
1
5
2016 2017
De
b
t
L
i
m
i
t
19
6
,
4
1
8
$
21
3
,
1
8
1
$
21
8
,
8
0
8
$
22
2
,
4
9
3
$
22
6
,
0
0
7
$
23
0
,
7
7
6
$
23
3
,
4
1
6
$
24
1
,
3
3
2
$
247,528 $ 267,511 $
To
t
a
l
n
e
t
d
e
b
t
a
p
p
l
i
c
a
b
l
e
t
o
l
i
m
i
t
8
7
,
0
9
0
84
,
9
9
5
75
,
0
5
0
80
,
5
7
5
75
,
3
2
0
61
,
2
0
5
67
,
0
7
5
77
,
5
0
6
71,963 84,864
Le
g
a
l
d
e
b
t
m
a
r
g
i
n
1
0
9
,
3
2
8
$
12
8
,
1
8
6
$
14
3
,
7
5
8
$
14
1
,
9
1
8
$
15
0
,
6
8
7
$
16
9
,
5
7
1
$
16
6
,
3
4
1
$
16
3
,
8
2
6
$
175,565 $ 182,647 $
To
t
a
l
n
e
t
d
e
b
t
a
p
p
l
i
c
a
b
l
e
t
o
t
h
e
l
i
m
i
t
a
s
a
p
e
r
c
e
n
t
a
g
e
o
f
d
e
b
t
l
i
m
i
t
44
.
3
4
%
3
9
.
8
7
%
3
4
.
3
0
%
3
6
.
2
1
%
3
3
.
3
3
%
2
6
.
5
2
%
2
8
.
7
4
%
3
2
.
1
2
%
2
9
.
0
7
%
3
1
.
7
2
%
To
t
a
l
A
s
s
e
s
s
e
d
V
a
l
u
a
t
i
o
n
De
b
t
L
i
m
i
t
-
5
%
o
f
T
o
t
a
l
A
s
s
e
s
s
e
d
V
a
l
u
a
t
i
o
n
267,511
Le
s
s
:
A
m
o
u
n
t
o
f
D
e
b
t
A
p
p
l
i
c
a
b
l
e
t
o
D
e
b
t
L
i
m
i
t
84,864
Le
g
a
l
D
e
b
t
M
a
r
g
i
n
No
t
e
:
U
n
d
e
r
I
o
w
a
c
o
d
e
,
t
h
e
c
i
t
y
'
s
o
u
t
s
t
a
n
d
i
n
g
g
e
n
e
r
a
l
o
b
l
i
g
a
t
i
o
n
d
e
b
t
s
h
o
u
l
d
n
o
t
e
x
c
e
e
d
5
p
e
r
c
e
n
t
o
f
t
o
t
a
l
a
s
s
e
s
s
e
d
p
r
o
p
e
r
t
y
v
a
l
u
e
.
CI
T
Y
O
F
I
O
W
A
C
I
T
Y
,
I
O
W
A
LE
G
A
L
D
E
B
T
M
A
R
G
I
N
I
N
F
O
R
M
A
T
I
O
N
La
s
t
T
e
n
F
i
s
c
a
l
Y
e
a
r
s
(a
m
o
u
n
t
s
e
x
p
r
e
s
s
e
d
i
n
t
h
o
u
s
a
n
d
s
)
182,647 $ 5,350,228 $
Fi
s
c
a
l
Y
e
a
r
Le
g
a
l
D
e
b
t
M
a
r
g
i
n
C
a
l
c
u
l
a
t
i
o
n
f
o
r
F
i
s
c
a
l
Y
e
a
r
2
0
1
7
13
8
Fiscal
Year Principal Interest Total
Property Tax
Revenue
Tax Increment
Financing Water Revenue
Principal
Outstanding at
Beginning of Fiscal
Year
2017 13,470,000 1,255,554 14,725,554 13,826,542 598,112 300,900 55,350,000
2018 7,960,000 1,197,996 9,157,996 8,397,916 760,080 - 51,645,000
2019 8,125,000 1,031,994 9,156,994 8,398,894 758,100 - 43,685,000
2020 8,330,000 835,606 9,165,606 8,409,476 756,130 - 35,560,000
2021 7,090,000 613,841 7,703,841 6,947,453 756,388 - 27,230,000
2022 5,540,000 438,663 5,978,663 5,278,182 700,481 - 20,140,000
2023 4,645,000 325,063 4,970,063 4,271,748 698,315 - 14,600,000
2024 3,865,000 217,512 4,082,512 3,537,650 544,862 - 9,955,000
2025 2,915,000 135,063 3,050,063 2,813,353 236,710 - 6,090,000
2026 2,090,000 74,200 2,164,200 2,001,416 162,784 - 3,175,000
2027 1,085,000 27,125 1,112,125 948,808 163,317 - 1,085,000
Total 65,115,000$ 6,152,617$ 71,267,617$ 64,831,438$ 6,135,279$ 300,900$
Payments Funding Source(s)
CITY OF IOWA CITY, IOWA
GENERAL OBLIGATION DEBT ANNUAL MATURITY SCHEDULE
139
Fiscal
Year Net Revenue Annual Debt Service2
Ended Available for Ratio of
June 30 Revenue Expenses1 Debt Service Principal Interest Total Coverage
Parking Revenue3
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
20157 5,620 3,828 1,792 540 254 794 2.26
2016 - - - - - - -
2017 - - - - - - -
Wastewater Treatment Revenue4
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
2015 12,620 6,574 6,046 3,370 1,305 4,675 1.29
2016 12,681 6,513 6,168 3,520 1,175 4,695 1.31
2017 13,383 6,357 7,026 3,625 985 4,610 1.52
Water Revenue5
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
2015 8,715 5,632 3,083 1,380 610 1,990 1.55
2016 9,323 5,387 3,936 1,715 579 2,294 1.72
2017 9,529 6,332 3,197 1,760 524 2,284 1.40
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.
7 Parking Revenue Bonds defeased are excluded from the principal and interest of Annual Debt Service.
CITY OF IOWA CITY, IOWA
SCHEDULE OF REVENUE BOND COVERAGE
Last Ten Fiscal Years
(amounts expressed in thousands)
140
Fiscal
Year Principal Interest Total Sewer Revenue Water Revenue
Tax Increment
Financing
Principal
Outstanding at
Beginning of Fiscal
Year
2017 16,190,000 1 1,577,137 17,767,137 9,855,265 7,707,837 204,035 40,945,000
2018 5,170,000 1,606,970 6,776,970 4,336,332 1,849,143 591,495 48,020,000
2019 5,110,000 1,327,039 6,437,039 4,057,850 1,789,854 589,335 42,850,000
2020 5,525,000 1,137,000 6,662,000 4,267,400 1,802,965 591,635 37,740,000
2021 5,750,000 926,361 6,676,361 4,264,625 1,823,041 588,695 32,215,000
2022 5,460,000 744,165 6,204,165 2,812,500 1,836,190 1,555,475 26,465,000
2023 4,950,000 562,315 5,512,315 2,137,125 1,852,145 1,523,045 21,005,000
2024 2,850,000 436,171 3,286,171 - 1,800,826 1,485,345 16,055,000
2025 2,430,000 373,577 2,803,577 - 1,351,082 1,452,495 13,205,000
2026 1,665,000 320,589 1,985,589 - 561,244 1,424,345 10,775,000
2027 990,000 280,725 1,270,725 - -1,270,725 9,110,000
2028 895,000 250,365 1,145,365 - -1,145,365 8,120,000
2029 915,000 222,495 1,137,495 - -1,137,495 7,225,000
2030 940,000 193,820 1,133,820 - -1,133,820 6,310,000
2031 965,000 164,325 1,129,325 - -1,129,325 5,370,000
2032 995,000 133,950 1,128,950 - -1,128,950 4,405,000
2033 815,000 102,300 917,300 - -917,300 3,410,000
2034 840,000 77,850 917,850 - -917,850 2,595,000
2035 865,000 52,650 917,650 - -917,650 1,755,000
2036 890,000 26,700 916,700 - -916,700 890,000
Total 64,210,000$ 10,516,504$ 74,726,504$ 31,731,097$ 22,374,327$ 20,621,080$
Notes:
1 Additional principal payments above the funding sources for 2017 were funded through the refunding of bonds issued June 2017.
Payments
CITY OF IOWA CITY, IOWA
REVENUE DEBT ANNUAL MATURITY SCHEDULE
Funding Source(s)
141
Fiscal Year Principal Interest Total
2017 8,870,000$ 985,265$ 9,855,265$
2018 3,580,000 756,332 4,336,332
2019 3,465,000 592,850 4,057,850
2020 3,820,000 447,400 4,267,400
2021 3,980,000 284,625 4,264,625
2022 2,660,000 152,500 2,812,500
2023 2,085,000 52,125 2,137,125
2024 - - -
2025 - - -
2026 - - -
2027 - - -
2028 - - -
Total 28,460,000$ 3,271,097$ 31,731,097$
(continued)
Fiscal Year Principal Interest Total
2017 7,190,000$ 517,837$ 7,707,837$
2018 1,455,000 394,143 1,849,143
2019 1,510,000 279,854 1,789,854
2020 1,565,000 237,965 1,802,965
2021 1,630,000 193,041 1,823,041
2022 1,690,000 146,190 1,836,190
2023 1,755,000 97,145 1,852,145
2024 1,745,000 55,826 1,800,826
2025 1,325,000 26,082 1,351,082
2026 555,000 6,244 561,244
2027 - - -
2028 - - -
Total 20,420,000$ 1,954,327$ 22,374,327$
CITY OF IOWA CITY, IOWA
Outstanding
REVENUE DEBT ANNUAL MATURITY BY FUNDING SOURCE
Sewer
Water
142
Fiscal Year Principal Interest Total
2017 130,000$ 74,035$ 204,035$
2018 135,000 456,495 591,495
2019 135,000 454,335 589,335
2020 140,000 451,635 591,635
2021 140,000 448,695 588,695
2022 1,110,000 445,475 1,555,475
2023 1,110,000 413,045 1,523,045
2024 1,105,000 380,345 1,485,345
2025 1,105,000 347,495 1,452,495
2026 1,110,000 314,345 1,424,345
2027 990,000 280,725 1,270,725
2028 895,000 250,365 1,145,365
2029 915,000 222,495 1,137,495
2030 940,000 193,820 1,133,820
2031 965,000 164,325 1,129,325
2032 995,000 133,950 1,128,950
2033 815,000 102,300 917,300
2034 840,000 77,850 917,850
2035 865,000 52,650 917,650
2036 890,000 26,700 916,700
Total 15,330,000$ 5,291,080$ 20,621,080$
Taxable Urban Renewal
Outstanding
CITY OF IOWA CITY, IOWA
REVENUE DEBT ANNUAL MATURITY BY FUNDING SOURCE (continued)
143
Per Capita
Calendar Personal Personal Average School Retail
Year Population6 Income1 Income1 Increase Enrollment2 Sales4
2008 67,831 5,981,912 40,201 3.47 12,911 3.1 958,509,729
2009 69,086 5,943,049 39,214 -2.46 13,049 4.3 905,139,461
2010 67,862 6,039,549 39,477 0.67 13,319 5.0 725,329,723
2011 68,947 6,606,394 42,471 7.58 13,638 4.8 741,407,021
2012 68,947 6,956,611 43,809 3.15 13,862 4.1 767,122,555
2013 70,133 7,217,188 44,608 1.82 14,057 3.8 793,201,342
2014 71,591 7,594,813 46,204 3.58 14,162 3.5 649,794,164
2015 73,415 7,846,426 47,036 1.80 14,495 2.9 838,853,686
2016 74,220 8,031,750 47,574 1.14 15,186 3.2 853,258,347
20175 74,398 8,217,043 48,672 2.31 15,299 3 874,928,988
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 June 30.
5 Personal Income and Per Capita Personal Income for 2017 are not available. 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
144
Employers Employees Rank Percentage Employees Rank Percentage
University of Iowa 28,236 1 31.3 %30,110 1 29.1 %
Veterans Administration Medical Center 1,351 5 1.5 2,300 2 2.2
Iowa City Community School District 1,700 2 1.9 1,844 3 1.8
Mercy Hospital 1,383 4 1.5 1,347 4 1.3
ACT Inc. (formerly American College Testing Program)1,646 3 1.8 1,244 5 1.2
Hy-Vee 1,166 6 1.3 1,222 6 1.2
NCS Pearson 982 7 1.1 1,150 7 1.1
Proctor & Gamble 664 10 0.7 1,130 8 1.1
City of Iowa City --N/A 942 9 0.9
Johnson County --N/A 544 10 0.5
Systems Unlimited 681 9 0.8 - -N/A
International Automotive Components (formerly Lear Corp)750 8 0.8 - -N/A
38,559 42.8 %41,833 40.5 %
Total Employees 90,300 103,400
Sources:
Iowa City Area Development Group
Various Employers
2017
CITY OF IOWA CITY, IOWA
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
2008
145
2008 2009 2010 2011 2012 2013 2014
Public Safety
Police 96.25 103.25 103.25 98 97 103 105
Animal Shelter1 66666- -
Fire 57 57 57 66 65 65 65
Inspection Services 15.38 15.55 15.55 15.55 15.55 15.55 13.55
Public Works
Public Works Admin 2222222
Engineering 5 11.35 11.35 11.35 12.1 12.1 12.1 12.1
Flood Recovery - - - 0.4 0.4 0.4 0.38
Culture and Recreation
Parks and Rec Admin 2222222
Recreation 15.42 15.42 15.42 15.42 15.42 15.42 15.42
Parks 13 13 13 13 13 13 13
Forestry 3333333
Cemetery 3333333
CBD Maintenance 3333333
Library 43.14 43.14 43.14 43.14 43.64 43.63 45.13
Senior Center 6.31 6.31 6.31 6.31 6.5 6.5 6.5
Community and Economic Development 8.95 9.05 9.05 9.1 9.1 8.4 8.95
General Government
City Council 7777777
City Clerk 4444444
City Attorney 6.6 6 6 5.6 5.6 5.6 5.6
City Manager2 3333356
Personnel 4444443
Human Rights 2.5 2.5 2.5 2.5 2.5 2 2
Finance 26.5 26.3 26.3 26.24 27.53 23.47 23.97
Government Buildings 4.96 4.96 4.96 4.96 4.83 4.83 4.83
Energy Conservation 0.25 0.25 0.25 - - - -
Transit3 54.75 58.5 58.5 56.25 56.25 - -
Special Revenue
Employee Benefits 0.29 0.29 0.29 0.26 0.55 0.55 0.55
CIP / Roads 1 2 2 - - - -
Flood Mitigation Grants - - - 1.6 1.6 - -
Community Development 3.98 3.88 3.88 3.83 3.83 3.33 2.98
UniverCity Program - - - - - 0.2 -
Traffic Engineering 4.15 4.15 4.15 4.15 4.15 4.15 4.15
Streets 23.5 25.5 25.5 25.5 25.5 25.5 25.5
MPOJC (formerly JCCOG) 6.6 6.6 6.6 6.6 6.6 5.6 5.6
Other Shared Revenues - - - - - 1.6 1.62
Library Development 111111-
Capital Projects Administration5 - - - 3566
Internal Service Funds
Information Technology 12.3 12.3 12.3 11.3 11.8 10.86 9.86
Equipment 11.26 11.26 11.26 11.26 11.26 10.75 10.75
Central Services 0.75 0.75 0.75 0.75 0.75 0.76 0.5
Risk Management 1.73 1.93 1.93 2.01 1.8 1.8 1.8
Business-Type Activities
Parking 32.75 33.25 33.25 32.75 32.75 29.25 26.25
Mass Transit3 - - - - - 51.75 51.25
Wastewater Treatment 25.5 25.6 25.6 25.6 25.4 25.4 24.4
Water 32.75 32.75 32.75 32.75 32.75 32.75 31.75
Sanitation 34.85 34.85 35.85 35.85 37.85 37.85 35.85
Airport 1.6 1.75 1.75 1.75 1.75 1 1
Cable Television4 6.19 6.44 6.44 6.69 6.63 6.63 6.63
Stormwater 2 1.9 1.9 1.9 2.1 2.1 2.1
Housing Authority 13.25 13.25 13.25 13.25 13.25 13.18 12.19
Total 614.81 629.03 630.03 633.37 637.74 623.91 615.16
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
146
---- ---- ------------ ---- ----
2015 2016 2017
105 105 105
- - -
64 64 64
13.55 12.85 13.5
222
12.1 12 16
- - -
222
15.42 14.42 15.42
13 13 16
333
333
33-
45.13 44.77 46.17
6.5 6.5 7
8.95 10.8 12.63
777
444
5.6 5.5 5.5
6 10.5 10.5
333
222
22.47 23.07 23.13
4.83 5.33 4.33
- - -
- - -
0.55 0.55 0.55
- - -
- - -
2.98 2.83 -
- - -
4.15 3.9 4.5
25.5 25.25 25.5
5.6 4.7 4.7
- - -
- - -
54-
9.86 9.86 9.8
10.75 10.75 10.75
0.5 0.5 0.5
1.8 1.8 1.8
26.25 23.13 21.63
51.25 51.13 53.63
24.65 24.65 25.4
32 32 31.75
35.85 33.35 31.5 1 Beginning in FY13, Animal Services is reported under Police
1112 Beginning in FY13, Communications Division has been moved from Finance to City Manager
5.63 - - 3 Beginning in FY13, Transit was moved from the General Fund to an Enterprise Fund
2.6 2.6 2.1 4 Beginning in FY16, Cable was moved from an Enterprise Fund to the General Fund
10.19 10.19 9.6 5 Beginning in FY17, Capital Project Administration was moved to Engineering
607.66 598.93 599.89
147
---- ---- ----
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Public Safety
Police 1
Physical arrests 6,434 6,486 5,983 6,590 5,911 4,468 6,192 5,595 5,465 4,000
Traffic Violations 5,827 4,460 4,446 3,403 3,761 2,499 3,718 3,356 2,989 2,387
Fire 1
Number of calls answered 4,257 4,152 4,472 4,635 5,173 4,713 5,828 6,016 6,974 5,354
Inspections conducted 1,712 1,959 2,145 1,806 1,970 1,431 2,032 1,903 2,459 817
Parking
Parking Violations 147,673 126,050 118,717 109,553 96,117 88,909 60,680 65,196 57,549 62,930
Wastewater Treatment
Daily average treatment
in million gallons 12.81 12.34 12.86 10.37 8.28 9.84 10.02 9.76 10.48 8.32
Maximum daily capacity
of plant in million gallons 41.0 41.0 41.1 41.1 41.1 41.1 41.1 43.3 43.3 43.3
Number of sewer system
customers 22,909 23,161 23,344 23,527 23,529 24,059 24,389 24,533 25,085 25,485
Water
Daily average consumption
in million gallons 5.48 5.51 5.48 5.51 5.49 5.54 5.64 5.33 5.32 5.50
Maximum daily capacity of
plant in million gallons 16.7 16.7 16.7 16.7 16.7 16.7 16.7 16.7 16.7 16.7
Customers by Classification
Residential 23,097 23,391 23,657 23,875 24,086 24,442 24,790 23,089 23,638 24,025
Commercial 1,465 1,494 1,481 1,498 1,489 1,491 1,491 1,409 1,415 1,425
Industrial 14 15 15 15 15 15 15 14 14 14
Other 138 144 153 156 200 204 202 135 131 134
Total Customers 24,714 25,044 25,306 25,544 25,790 26,152 26,498 24,647 25,198 25,598
Sanitation
Number of Customers 14,574 14,700 14,831 14,926 15,030 15,177 15,331 14,811 15,620 15,917
Tonnage 8,834 8,747 8,869 8,969 8,935 8,956 9,160 9,210 9,476 9,623
Landfill
Tonnage 132,760 140,810 150,369 147,265 148,953 111,445 115,624 123,692 126,875 137,025
Sources: Various city divisions.
Notes:
1 Numbers are based on a calendar year and 2017 figures are compiled through 10/15/17.
CITY OF IOWA CITY, IOWA
OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
148
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Public Safety
Police
Stations 1111111111
Patrol units 17 17 18 18 18 18 20 20 20 24
Fire
Stations 3333444444
Fire apparatus 9999 1 1 1 1 1 1 1 1 1 0 1 0
Public Works
Streets
Miles 269 270 272 272 275 276 279 281 283 286
Street lights 3,403 3,408 3,410 3,412 3,412 3,412 3,412 3,412 3,412 3,612
Culture and Recreation
Library 1111111111
Cemetery 1111111111
Acreage 40 40 40 40 40 40 40 40 40 40
Parks 61 61 40 41 41 42 43 46 46 49
Acreage 1,603 1,603 1,335 1,354 1,441 1,506 1,897 1,897 1,902 1,932
Recreation
Recreation centers 2222222222
Swimming pools 3333333333
Ball diamonds 31 30 30 30 30 27 27 27 27 27
Tennis courts 12 12 12 12 12 12 12 12 12 9
Soccer fields 25 20 20 20 20 20 20 20 20 20
Pickle Ball Courts 8
Futscal Courts 2
Full Basketball Courts 3
Parking
Facilities 5555555556
Spaces 3,085 3,086 3,086 3,086 3,086 3,086 3,086 3,086 3,086 3,686
Wastewater Treatment
Miles of sanitary sewer 288 289 291 292 294 295 298 300 301 304
Miles of storm sewer 118 120 122 124 127 128 131 133 136 139
Number of treatment plants 2222221111
Number of service connectors 22,576 22,875 23,093 23,308 23,529 23,851 24,175 24,533 25,085 25,485
Water
Miles of water mains 262 263 264 264 266 268 271 273 275 277
Number of city owned fire hydrants 2,575 2,635 2,662 2,680 2,735 3,330 3,385 3,415 3,447 3,503
Sanitation
Landfills 1111111111
Acreage 395 395 395 395 411 411 411 418 418 418
Sources: Various city divisions.
CITY OF IOWA CITY, IOWA
Last Ten Fiscal Years
CAPITAL ASSETS BY FUNCTION
149
150
~:~ ----------------
Compliance
Section
Tab
What inspires you, inspires us. Let’s talk. | eidebailly.com
1545 Associates Dr., Ste. 101 | Dubuque, IA 52002-2299 | T 563.556.1790 | F 563.557.7842 | EOE
151
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
To the Honorable Mayor and
Members of the City Council
City of Iowa City, Iowa
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
the City of Iowa City, Iowa (City) as of and for the year ended June 30, 2017, and the related notes to the
financial statements, which collectively comprise the City’s basic financial statements, and have issued
our report thereon dated December 11, 2017.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do
not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the City’s financial statements will not be prevented, or detected and corrected on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting that might be material weaknesses or significant deficiencies. Given these limitations,
during our audit we did not identify any deficiencies in internal control that we consider to be material
weaknesses. However, material weaknesses may exist that have not been identified.
CPAs & BUSINESS ADVISORS
152
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Comments involving statutory and other legal matters about the City’s operations for the year ended
June 30, 2017, are based exclusively on knowledge obtained from procedures performed during our audit
of the financial statements of the City and are reported in Part IV of the accompanying Schedule of
Findings and Questioned Costs. Since our audit was based on tests and samples, not all transactions that
might have had an impact on the comments were necessarily audited. The comments involving statutory
and other legal matters are not intended to constitute legal interpretations of those statutes.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Dubuque, Iowa
December 11, 2017
What inspires you, inspires us. Let’s talk. | eidebailly.com
1545 Associates Dr., Ste. 101 | Dubuque, IA 52002-2299 | T 563.556.1790 | F 563.557.7842 | EOE
153
Independent Auditor’s Report on Compliance for Each Major Federal Program and
Report on Internal Control over Compliance Required by the Uniform Guidance
To the Honorable Mayor and
Members of the City Council
City of Iowa City, Iowa
Report on Compliance for Each Major Federal Program
We have audited the City of Iowa City, Iowa’s (City) compliance with the types of compliance
requirements described in the OMB Compliance Supplement that could have a direct and material effect
on each of the City’s major federal programs for the year ended June 30, 2017. The City’s major federal
programs are identified in the summary of auditor’s results section of the accompanying schedule of
findings and questioned costs.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions
of its federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on the compliance for each of the City’s major federal
programs based on our audit of the types of compliance requirements referred to above. We conducted
our audit of compliance in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of
Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance
require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance
with the compliance requirements referred to above that could have a direct and material effect on a major
federal program occurred. An audit includes examining, on a test basis, evidence about the City’s
compliance with those requirements and performing such other procedures as we considered necessary in
the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major
federal program. However, our audit does not provide a legal determination of City of Iowa City, Iowa’s
compliance.
Opinion on Each Major Federal Program
In our opinion, the City of Iowa City, Iowa, complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on each of its
major Federal programs for the year ended June 30, 2017.
CPAs & BUSINESS ADVISORS
154
Report on Internal Control over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over
compliance with the compliance requirements referred to above. In planning and performing our audit of
compliance, we considered the City’s internal control over compliance with the types of requirements that
could have a direct and material effect on each major federal program to determine the auditing
procedures that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance for each major federal program and to test and report on internal control over compliance in
accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the
effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the
effectiveness of the City’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a compliance requirement will not be prevented,
or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance
is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of
compliance requirement of a federal program that is less severe than a material weakness in internal
control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control
over compliance that we consider to be material weaknesses. However, material weaknesses may exist
that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of the
Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Dubuque, Iowa
December 11, 2017
155
City of Iowa City, Iowa
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2017
Federal Pass-Through Amounts Passed-
Federal Grantor/Pass-Through CFDA Entity Identifying Federal Through to
Grantor/Program or Cluster Title Number Number Expenditures Subrecipients
U.S. Department of Agriculture:
Pass-through program from:
Iowa Department of Agriculture:
Specialty Crop Block Grant
Program - Farm Bill 10.170 15SCBGPIA0001 13,236$ 13,236$
U.S. Department of Housing and Urban Development:
Direct program:
CDBG - Entitlement Grants Cluster:
Community Development Block Grants/
Entitlement Grants 14.218 886,190 669,355
Community Development Block Grants/
Entitlement Grants 14.218 364,183 227,273
Community Development Block Grants/
Entitlement Grants 14.218 309,144 142,213
Cluster total 1,559,517 1,038,841
Home Investment Partnerships Program 14.239 82,554 12,971
Home Investment Partnerships Program 14.239 62,823 39,521
Home Investment Partnerships Program 14.239 36,300 -
Home Investment Partnerships Program 14.239 10,405 3,000
192,082 55,492
Public and Indian Housing 14.850 135,284 -
Public and Indian Housing 14.850 125,354 -
260,638 -
Housing Voucher Cluster:
Section 8 Housing Choice Vouchers 14.871 8,154,473 -
Public Housing Capital Fund 14.872 61,572 -
Public Housing Capital Fund 14.872 54,951 -
116,523 -
Total U.S. Department of Housing and Urban Development 10,283,233 1,094,333
156
City of Iowa City, Iowa
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2017
Federal Pass-Through Amounts Passed-
Federal Grantor/Pass-Through CFDA Entity Identifying Federal Through to
Grantor/Program or Cluster Title Number Number Expenditures Subrecipients
U.S. Department of Justice:
Pass-through program from:
Iowa Department of Justice:
Violence Against Women
Formula Grants 16.588 VW-17-04-CJ 63,583$ -$
Direct program:
Bulletproof Vest Partnership Program 16.607 389 -
Pass-through program from:
Governor's Office of Drug Control Policy:
Public Safety Partnership and Community
Policing Grants 16.710 15-CAMP-03 3,906 3,020
Direct program:
Edward Byrne Memorial Justice
Assistance Grant Program 16.738 13,657 13,657
Edward Byrne Memorial Justice
Assistance Grant Program 16.738 605 -
Pass-through program from:
Governor’s Office of Drug Control Policy:
Edward Byrne Memorial Justice
Assistance Grant Program 16.738 14-JAG-158322 94,041 61,041
108,303 74,698
Total U.S. Department of Justice 176,181 77,718
U.S. Department of Transportation:
Direct program:
Airport Improvement Program 20.106 68,382 -
Pass-through program from:
Highway Planning and Construction Cluster:
Iowa Department of Transportation:
Highway Planning and Construction 20.205 HDP-3715(652)
--71-52 6,713,789 -
Highway Planning and Construction 20.205 IA-95-X018-371-15 76,114 -
Iowa Department of Transportation and
Metropolitan Planning Organization
of Johnson County:
Highway Planning and
Construction 20.205 17MPO-MPOJC 147,608 -
Cluster total 6,937,511 -
157
City of Iowa City, Iowa
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2017
Federal Pass-Through Amounts Passed-
Federal Grantor/Pass-Through CFDA Entity Identifying Federal Through to
Grantor/Program or Cluster Title Number Number Expenditures Subrecipients
U.S. Department of Transportation: (continued)
Pass-through program from: (continued)
Metropolitan Transportation
Planning and State and Non-
Metropolitan Planning and
Research 20.505 17MPO-MPOJC 42,392$ -$
Federal Transit Cluster:
Direct program:
Federal Transit – Formula Grants 20.507 1,622,763 -
Pass-through program from:
Iowa Department of Transportation:
Bus and Bus Facilities Formula Program 20.526 IA-2016-019-371-
16 #18520 242,614 -
Cluster total 1,865,377 -
Pass-through program from:
Iowa Department of Transportation:
Public Transportation for Nonurbanized
Areas 20.509 IA-2016-027-371-
16 #18518 76,114 -
Transit Services Program Cluster:
Enhanced Mobility of Seniors and
Individuals with Disabilities 20.513 IA-2016-026-371-17
#18404 112,960 -
Highway Safety Cluster:
Iowa Department of Public Safety:
Governor's Traffic Safety Bureau:
National Priority Safety Programs 20.616 PAP 17-405d-
M6OT, Task 24 21,451 -
National Priority Safety Programs 20.616 PAP 16-405d-
M6OT, Task 21 7,743 -
Cluster total 29,194 -
Total U.S. Department of Transportation 9,131,930 -
158
City of Iowa City, Iowa
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2017
Federal Pass-Through Amounts Passed-
Federal Grantor/Pass-Through CFDA Entity Identifying Federal Through to
Grantor/Program or Cluster Title Number Number Expenditures Subrecipients
U.S. Department of Homeland Security:
Pass-through program from:
Iowa Homeland Security and Emergency
Management Division:
Disaster Grants – Public Assistance
(Presidentially Declared Disasters) 97.036 FEMA DR-4187-IA 28,513$ -$
Hazard Mitigation Grant 97.039 DR-4187-0003-01 467,242 -
Total U.S. Department of Homeland Security 495,755 -
Total 20,100,335$ 1,185,287$
159
City of Iowa City, Iowa
Notes to the Schedule of Expenditures of Federal Awards
Year Ended June 30, 2017
Note 1 - Basis of Presentation
The accompanying schedule of expenditures of federal awards includes the federal grant activity of the City of
Iowa City, Iowa, and is presented on the modified accrual basis of accounting for governmental funds and the full
accrual basis of accounting for proprietary funds. The information in this schedule is presented in accordance with
the requirements of Uniform Guidance. The City received federal awards both directly from federal agencies and
indirectly through pass-through entities. Federal financial assistance provided to a subrecipient is treated as an
expenditure when it is paid to the subrecipient.
Note 2 - Significant Accounting Policies
Governmental and proprietary fund types account for the City’s federal grant activity. Therefore, expenditures in
the schedule of expenditures of federal awards are recognized on the modified accrual basis – when they become
a demand on current available financial resources in the governmental fund types and on the full accrual basis –
when expenditures are incurred in the proprietary fund types. The City’s summary of significant accounting
policies is presented in Note 1 in the City’s basic financial statements.
The City has not elected to use the 10% de minimis cost rate.
160
City of Iowa City, Iowa
Schedule of Findings and Questioned Costs
Year Ended June 30, 2017
Part I: Summary of the Independent Auditor's Results:
Financial Statements
Type of auditor's report issued Unmodified
Internal control over financial reporting:
Material weaknesses identified No
Significant deficiencies identified not
considered to be material weaknesses None reported
Noncompliance material to financial statements noted?No
Federal Awards
Internal control over major programs:
Material weaknesses identified No
Significant deficiencies identified not
considered to be material weaknesses None reported
Type of auditor's report issued on compliance for major programs: Unmodified
Any audit findings disclosed that are required to be reported in
accordance with Uniform Guidance 2 CFR 200.516:No
Identification of major programs:
Name of Federal Program CFDA Number
CDBG - Entitlement Grants Cluster:14.218
Community Development Block Grants/
Entitlement Grants
Highway Planning and Construction Cluster:20.205
Highway Planning and Construction
Dollar threshold used to distinguish between type A
and type B programs:750,000$
Auditee qualified as low-risk auditee?Yes
Part II: Findings Related to the Financial Statements:
There were no findings to report.
161
City of Iowa City, Iowa
Schedule of Findings and Questioned Costs
Year Ended June 30, 2017
Part III: Findings and Questioned Costs for Federal Awards:
There were no findings and questioned costs to report.
Part IV: Other Findings Related to Required Statutory Reporting:
2017-IA-A Certified Budget – Disbursements during the year ended June 30, 2017, did not exceed the amount
budgeted.
2017-IA-B Questionable Expenditures – We noted no expenditures that we believe may fail to meet the
requirements of public purpose as defined in an Attorney General’s opinion dated April 25, 1979.
2017-IA-C Travel Expense – No expenditures of City money for travel expenses of spouses of City officials
or employees were noted.
2017-IA-D Business Transactions – No business transactions between the City and City officials or
employees were noted.
2017-IA-E Bond Coverage – Surety bond coverage of City officials and employees is in accordance with statutory
provisions. The amount of coverage should be reviewed annually to ensure the coverage is adequate for
current operations.
2017-IA-F Council Minutes – No transactions were found that we believe should have been approved in the
City Council minutes but were not.
2017-IA-G Deposits and Investments – No instances of non-compliance with the deposit and investment
provisions of Chapters 12B and 12C of the Code of Iowa and the City’s investment policy were
noted.
2017-IA-H Revenue Bonds – No instances of non-compliance with the provisions of the City’s revenue bond
resolutions were noted.
2017-IA-I Annual Urban Renewal Report - - The annual urban renewal report was properly approved and
certified to the Iowa Department of Management on or before December 1.