HomeMy WebLinkAboutFY2018 Annual Financial ReportCity of Iowa City
Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2018
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
CITY OF IOWA CITY, IOWA
FOR THE FISCAL YEAR ENDED JUNE 30, 2018
PREPARED BY:
FINANCE DEPARTMENT
CITY OF IOWA CITY, IOWA
Introductory
Section
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CITY OF IOWA CITY, IOWA
TABLE OF CONTENTS
June 30, 2018
Page
INTRODUCTORY SECTION
Table of contents ................................................................................................................................ 1
Letter of transmittal ............................................................................................................................ 3
Certificate of Achievement for Excellence in Financial Reporting ................................................... 12
City organizational chart .................................................................................................................... 13
City officials....................................................................................................................................... 14
FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT ......................................................................................... 15
MANAGEMENT’S DISCUSSION AND ANALYSIS .................................................................... 19
BASIC FINANCIAL STATEMENTS
Government-wide financial statements
Statement of net position ............................................................................................................. 30
Statement of activities .................................................................................................................. 33
Fund financial statements
Balance sheet – governmental funds ............................................................................................ 34
Reconciliation of the balance sheet of the governmental funds to the statement of net position 35
Statement of revenues, expenditures, and changes in fund balances – governmental funds ....... 36
Reconciliation of the statement of revenues, expenditures, and changes in fund balances of
governmental funds to the statement of activities ..................................................................... 37
Statement of net position – proprietary funds .............................................................................. 38
Statement of revenues, expenses, and changes in fund net position – proprietary funds ............ 39
Statement of cash flows – proprietary funds ................................................................................ 40
Statement of fiduciary assets and liabilities ................................................................................. 41
Notes to financial statements .......................................................................................................... 42
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary comparison schedule – budget and actual – all governmental funds and enterprise
funds – budgetary basis………………………………………………………………………… 84
Budgetary comparison schedule – budget to GAAP reconciliation …………………………….. 86
Note to required supplementary information – budgetary reporting…………………………….. 87
Schedule of the City’s proportionate share of MFPRSI net pension liability…………………… 89
Schedule of City’s MFPRSI contributions……………………………………………………… 90
Notes to required supplementary information – MFPRSI pension liability…………………… . 92
Schedule of the City’s proportionate share of IPERS net pension liability…………………… .. 93
Schedule of City’s IPERS contributions………………………………………………………... 94
Notes to required supplementary information – IPERS pension liability……………………… 96
Required supplementary information – schedule of changes in the City’s total OPEB liability,
related ratios and notes…………………….………………………………………….……… . 98
COMBINING FUND STATEMENTS
Combining balance sheet – nonmajor governmental funds ............................................................ 100
Combining statement of revenues, expenditures, and changes in fund balances – nonmajor
governmental funds ...................................................................................................................... 101
Combining statement of net position – internal service funds ........................................................ 104
Combining statement of revenues, expenses, and changes in fund net position – internal service
funds ............................................................................................................................................. 105
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CITY OF IOWA CITY, IOWA
TABLE OF CONTENTS
June 30, 2018
Page
COMBINING FUND STATEMENTS (continued)
Combining statement of cash flows – internal service fund ............................................................ 106
Statement of changes in assets and liabilities – agency funds ......................................................... 108
STATISTICAL SECTION (UNAUDITED)
Net position by component ................................................................................................................. 111
Changes in net position ...................................................................................................................... 112
Fund balances – governmental funds ................................................................................................. 114
Changes in fund balances – governmental funds ............................................................................... 115
General government tax revenues by source ...................................................................................... 116
Assessed and taxable value of property .............................................................................................. 117
Property tax rates – direct and overlapping governments .................................................................. 118
Property tax budgets and collections .................................................................................................. 119
Principal taxpayers ............................................................................................................................. 120
Principal water system customers ...................................................................................................... 122
Sales history and total water charges .................................................................................................. 123
Principal sewer system customers ...................................................................................................... 124
Sales history and total sewer charges ................................................................................................. 125
Ratios of outstanding debt by type ..................................................................................................... 126
Ratios of general obligation bonded debt to assessed value and net bonded debt per capita ............. 127
Ratio of annual debt service expenditures for general bonded debt to total general governmental
expenditures ..................................................................................................................................... 128
Computation of direct and overlapping debt ...................................................................................... 129
Legal debt margin information ........................................................................................................... 130
General obligation debt annual maturity schedule ............................................................................. 131
Schedule of revenue bond coverage ................................................................................................... 132
Revenue debt annual maturity schedule ............................................................................................. 133
Revenue debt annual maturity by funding source .............................................................................. 134
Demographic and economic statistics ................................................................................................ 136
Principal employers ............................................................................................................................ 137
Full-time equivalent city government employees by function ........................................................... 138
Operating indicators by function ........................................................................................................ 139
Capital assets by function ................................................................................................................... 140
COMPLIANCE SECTION
Independent auditor’s report on internal control over financial reporting and on compliance and
other matters based on an audit of financial statements performed in accordance with Government
Auditing Standards ............................................................................................................................. 141
Independent auditor’s report on compliance for each major federal program and report on internal
control over compliance required by the Uniform Guidance ............................................................. 143
Schedule of expenditures of federal awards ....................................................................................... 145
Notes to the schedule of expenditures of federal awards ................................................................... 148
Schedule of findings and questioned costs ......................................................................................... 149
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December 11, 2018
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, 2018 is submitted herewith in accordance with the provisions of
Chapter 11 of the Code of Iowa. The City’s Finance Department prepared this report.
Responsibility for both the accuracy of the data presented and the completeness and fairness of
the presentation, including all disclosures, rest with the City. I believe the information, as
presented, is accurate in all material respects and presented in a manner designed to fairly present
the financial position and results of operations of the City. All disclosures necessary to enable the
reader to gain an understanding of the City's financial affairs have been included.
Management assumes full responsibility for the completeness and reliability of all of the
information presented in this report, based upon a comprehensive framework of internal control
that it has established for this purpose. Because the cost of internal controls should not exceed
anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the
financial statements will be free of any material misstatement.
Bohnsack & Frommelt, LLP, a firm of independent public accountants has issued an unmodified
(“clean”) opinion on the City’s financial statements for the year ended June 30, 2018. 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.
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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 494 full-time and 43 part-time permanent municipal employees and 404
temporary employees, including a police force of 83 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.
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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 29,700 employees. The University of Iowa had an enrollment
in fall 2018 of 32,948 students, which is a decrease of 616 students from a record high of 33,564
students in the fall of 2017. The academic and research missions of the University, along with
the health care services provided at its hospitals and clinics, have an extremely positive economic
impact on the area.
The City also has a significant number of national and international businesses, including Fortune
500 companies: ACT Inc., NCS Pearson, and Procter & Gamble. In February 2018, Procter and
Gamble announced that in approximately two years they would be shifting their beauty care
products production from Iowa City to their West Virginia plant. This will eventually reduce the
workforce down from approximately 600 to 100 employees. This may also have an impact on
nearby businesses that produce bottles and labels for this production plant in Iowa City. Procter and
Gamble has added and is expanding an electric toothbrush plant in Iowa City which is expected to
employ several hundred employees; it currently has added approximately 150 employees. The
estimated investment in this new facility is approximately $100 million. Overall, the continued
economic development efforts with the Iowa City and Coralville Chambers of Commerce, private
interests, the University of Iowa, other surrounding communities, and the Iowa City Area
Development Group, have produced positive results with the retention and expansion of businesses.
In addition, Iowa’s Creative Corridor is a seven-county alliance surrounding Iowa City and has
been identified as one of the major growth areas for new business development in the State of Iowa.
This Corridor gives employers workforce access to a region uniquely Iowan, founded with a
manufacturing heritage, but actively seeking new frontiers and opportunities in information
technology, biotechnology and bioprocessing, renewable energy, insurance and financial services,
advanced manufacturing, and educational services. Continued developments within Iowa City and
the region have a favorable impact upon the City's economy.
As a whole, the City's economy continues to grow. 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 2.2% for the month of June 2018, as compared to 2.7% for the State of
Iowa, and 4.0% 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 157 new single-family houses in 2017 as
compared to 172 in 2016; multi-family dwelling units added during fiscal year 2017 was 203,
compared to 556 in 2016; and mixed commercial/residential developments added 150 dwelling
units in 2017 versus 340 residential units in 2016. Altogether these housing additions totaled 510
units valued at $99,676,806 in 2017 versus a total of 1,068 units valued at $206,478,670 in 2016.
In addition to the decrease in residential construction in 2017, the City also had a decrease in
commercial construction. The value of permits for commercial construction decreased by
$57,651,210 to $5,005,776 from 2016 to 2017; however, the value of remodeling permits for
residential and commercial properties increased by $14,578,688 to $107,666,214 from 2016 to
2017. Although there was a decrease in building permit issuance in 2017 versus 2016, the 2016
building permit issuance was an all-time high for the City.
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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 2017 is estimated to be 75,798
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, helps to insulate the City from any
significant negative economic impacts of any recessions. 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.
Major Initiatives
The City of Iowa City, with the assistance of Kirkwood Community College, 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
• Undertake a comprehensive assessment of the current public transit system and
implement changes to assure that the service best meets the needs of the entire
community
• Effectively market and grow the local food economy
• Through cooperation with the Iowa City School District, Iowa Workforce
Development, Kirkwood Community College, Iowa Works, and others, increase
opportunities for marginalized populations and low-income individuals to obtain
access to skills training and good jobs
• Work with Procter & Gamble and impacted supply chain companies, local economic
development organizations, and labor unions to respond effectively to the company's
decision to terminate its local production of beauty care products
2. Encourage a Vibrant and Walkable Urban Core
• Collaborate with the University of Iowa on its redevelopment of University-owned
property located in the Riverfront Crossings District, and on improving the quality,
accessibility, and use of the Iowa River Corridor
• Preserve important parts of Iowa City's history by considering the designation of
additional buildings as historic landmarks, and by considering the creation of a
historic preservation district for part of the downtown after consulting with
stakeholders
• Evaluate existing strategies and consider additional actions to address the need for
reinvestment in the city’s existing private housing stock
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3. Foster Healthy Neighborhoods throughout the City
• Modify the existing Affordable Housing Action Plan to include new strategies to
improve the availability and affordability of housing in Iowa City
• Embed the "Missing Middle" concept into the City's land development practices by
adopting a Form Based Code for at least one (preferably two) of our neighborhoods
• Ensure the next two budgets contain sufficient funds to make meaningful progress
toward achieving the goals of the Bicycle Master Plan and Parks Master Plan
• Complete an analysis of traffic accident data and identify actions to improve the
safety of our roadways for motorists, bicyclists, and pedestrians
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
5. Enhance Community Engagement and Intergovernmental Relations
• Experiment with innovative ways of engaging with diverse populations in person and
on social media
• Improve collaborative problem-solving with governmental entities in the region on
topics of shared interest
• Improve relationships with the executive branch and legislature by reaching out to
legislators and other elected officials and working with City lobbyists
6. Promote Environmental Sustainability
• Adopt an effective Climate Action and Adaptation Plan and ensure the next two
budgets contain sufficient funds to facilitate achieving its goal
• Support efforts to increase the reach of the Parks and Recreation Foundation
7. Advance Social Justice and Racial Equity
• Support organizations and efforts that provide services to people experiencing and
recovering from trauma and crisis related to mental health and substance abuse
• Consider a policy to limit city business to vendors that pay all employees a wage of
$10.10 or higher
• Explore expanded use of a racial equity toolkit within City government, embedding it
within city department and Council levels
• Consider elevating hourly staff wages to $15/hour or more within two years
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.
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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 features a riverfront park
with walking and biking trails, a variety of housing options near shopping, restaurants, a state-of-
the-art recital hall and recreational facilities and is a short walk to downtown Iowa City and the
University of Iowa campus.
The Riverfront Crossings area is anchored by a 76.8 acre park that was formerly comprised of
public facilities including the City’s north wastewater treatment plant. An $8.5 million hazard
mitigation grant from the State of Iowa assisted the City in removing the public facilities in this
area and then converting the area into a riverfront park and wetland. Construction of phases 1
through 3 of the park began in 2017 and are expected to be completed during 2018. On the north
side of the Riverfront Crossing area, the University of Iowa recently constructed the Voxman
School of Music. On the adjacent corner, the redevelopment of an empty lot is under
construction which will include a 7-story, mixed-use building with 40 apartment units, retail
space on the street level, and office space on the second floor. An adjacent building will house a
7-story extended stay hotel. The estimated cost of these developments is approximately $40
million and are expected to be completed in 2019.
There have also been numerous public and private developments that have recently been
completed in this area including a 12-story, $33 million Hilton Garden Inn, an $102.5 million
mixed-use development with a 14-story tower and a 15-story tower that will include the Hyatt
Place hotel, apartments, retail space, and office space, and the $50-$60 million redevelopment of
a lumber store into a 40,000 square foot brewery, restaurant, and tap room which will be flanked
by nearly 300 dwelling units. The City also completed construction of a $15.3 million, 600 space
parking garage in April 2017 to service growth in this area, which subsequently had 28 new
townhomes constructed around it.
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 construction and are expected to be completed in 2019.
Other buildings in the downtown that are undergoing or have recently completed major re-
development include the Wilson Building and public space which 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 is currently under construction. Also under
construction is the redevelopment of the City Hall parking lot and neighboring church into 126
residential units, parking, and commercial space. The project is estimated to cost $33.4 million.
Both of these projects are expected to be completed in 2019.
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 in the area recently completed was a $7.4 million senior housing
complex with 40 units which was built on the former site of a dilapidated commercial structure.
Also, currently under construction is the consolidation and redevelopment of two older gas
stations located on the primary intersection in this district into a new gas station/marketplace.
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The Riverside Drive commercial area is an area that stretches from the University of Iowa
campus to the intersection of Highways 1 and 6 and is across the river from the Riverfront
Crossings development area. The development of a 4-story, $16.1 million multi-family/student
housing development in the Riverside Drive area was completed in late 2016, and adjacent to this
development several new retail spaces including a gas station/marketplace and additional multi-
residential housing units were also constructed or renovated. The City is developing a streetscape
plan for this area which will include lighting, trails, landscaping, and other amenities and
improvements. Construction of the streetscape improvements began in 2018 and will continue
into 2019. Near 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 beginning in 2018 and anticipated completion in 2019.
Long-term Financial Planning
It is management’s intent to support the major City Council initiatives through budget
appropriations, departmental operations, and employee development so that the organization as a
whole is moving in the same direction.
A significant influence in the preparation of the three-year financial plan (FY2018 – FY2020)
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
were 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
$17,181,000 between fiscal year 2015 to fiscal year 2024, and the maximum reimbursement from
the State during that time period would be $16,572,000 for a net loss in revenues of $609,000.
For fiscal years 2015 through 2018, the City received actual State “backfill” payments for the
commercial and industrial rollback totaling $6,257,898.
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 $21,560,000 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 $15,945,500, 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
from this provision in fiscal year 2017 was $946,740; the estimated loss in fiscal year 2018 is
$1,200,714.
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Due to the passage of SF295, the City estimates its net revenue losses to be $5,872,655 for fiscal
years 2015 through 2018. The cumulative net revenue loss from fiscal years 2015 through 2024
is estimated to be $38,115,000. 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. In fiscal year 2013, the
City’s property tax levy rate was $17.269 per $1,000 of assessed value. The property tax levy
rate has been reduced for five consecutive years to $16.183 in fiscal year 2019. This has been a
reduction of $1.086 per $1,000 of assessed value or 6.29% over that time period.
In looking at expenses for the FY18 – FY20 Financial Plan and FY19 operating budget, the City
will generally experience increased expenditures; however, at a modest pace. Bargaining unit
cost-of-living wage increases are approximately 2.00% to 2.60% each year; however, the
budgeted full time equivalents (FTE) has decreased from 607.66 in FY15 to 605.54 in FY19. In
addition, public safety pension contribution rates increased slightly in FY19 but are projected to
decrease slightly in FY20. The City has averaged an increase in its health insurance premium
rates of approximately 3.11% over the previous six years, and is not projecting any dramatic
changes to this trend in FY19 or FY20. Employee contributions, deductibles, and out-of-pocket
maximums are expected to increase in both FY19 and FY20.
In balancing the budget for the three-year period, the City attempted to mitigate the growth of
costs while continuing to provide high quality services by identifying and eliminating
redundancies within the organization, examining existing and potential new revenue sources,
strategically funding new programming and economic development to ensure strong property
values, providing for necessary improvements to existing infrastructure, and upholding fiscal
integrity by maintaining adequate cash reserves.
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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,
2017. 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-three 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, 2018. 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 seventh consecutive year the City has received this award.
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, 2018. 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
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City of Iowa City
Organization Chart
Community
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City Manager
Communications Office
Human Resources
Human Rights
Economic Development
Airport
Airport Operations
City Attorney City Clerk Library
Board
Airport
Commission
Library
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Library Foundation
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Administration
Emergency Operations
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Training
Police
Administration
Support Services
Field Operations
Parks &
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Administration
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Park Maintenance
Cemetery
Finance
Administration
Accounting
Purchasing
Revenue
Risk Management
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Senior
Center
Senior Center
Operations
Neighborhood &
Development Services
Administration
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Organization of Johnson County
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Engineering
Streets
Wastewater
Water
Resource Management
Equipment
Transportation
Services
Administration
Parking
Public Transportation
City Council
City Manager
City Clerk
City Clerk
City Attorney
City Attorney
13
CITY OF IOWA CITY, IOWA
LISTING OF CITY OFFICIALS
June 30, 2018
ELECTED OFFICIALS
Term Expires
Mayor Jim Throgmorton January 2, 2020
Council Member and Mayor Pro Tem Pauline Taylor January 2, 2020
Council Member Rockne Cole January 2, 2020
Council Member John Thomas January 2, 2020
Council Member Kingsley Botchway II January 2, 2022
Council Member Susan Mims January 2, 2022
Council Member Mazahir Salih January 2, 2022
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 Tracy Hightshoe August 27, 2001
Library Director Susan Craig July 28, 1975
Director of Public Works Ron Knoche April 28, 1999
Director of Transportation Services Darian Nagle Gamm May 21, 2008
Senior Center Coordinator LaTasha DeLoach July 31, 2018
Fire Chief 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
Independent Auditor’s Report
To the Honorable Mayor
and Members of City Council
City of Iowa City, Iowa
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,
as of and for the year ended June 30, 2018, 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.
15
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, 2018, 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
As discussed in Note 14 to the basic financial statements, the City implemented Governmental
Accounting Standards Board Statement No. 75, Accounting and Financial Reporting for Postemployment
Benefits Other Than Pensions. As a result, the City’s net positions for governmental activities and
business-type activities, and the aggregate remaining fund information has been restated. 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, budgetary comparison information, schedule of changes in the City’s total OPEB
liability and related ratios, schedules of the City’s proportionate share of the net pension liabilities for
pension retirement systems, and schedules of the City’s contributions for pension retirement systems on
pages 19-29 and 84-98, 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 inquiries of
management about the methods of 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’s basic financial statements. The combining and individual nonmajor fund financial
statements, schedule of expenditures of federal awards as required by Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards, and the other information, including the introductory and statistical sections, are
presented for purposes of additional analysis and are not a required part of the basic financial statements.
16
The combining and individual nonmajor fund financial statements and 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 supplementary information of the combining
and individual nonmajor fund financial statements and schedule of expenditures of federal awards is fairly
stated, in all material respects, in relation to the basic financial statements as a whole.
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 it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 11,
2018 on our consideration of the City'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 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 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.
Moline, Illinois
December 11, 2018
17
18
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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, 2018. 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, 2018 by $651,667,000 (net position). Of
this amount, $136,743,000 (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 $21,828,000 during the fiscal year. Governmental activities
increased by $15,620,000 and business-type activities increased by $6,208,000.
• At the close of the current fiscal year, the City’s governmental funds reported combined ending fund
balances of $101,810,000, a decrease of $4,571,000 in comparison with the prior year. Of this total amount,
approximately $28,478,000 or 28.0% is unassigned and available for spending at the City’s discretion.
• At the end of the current fiscal year, the City’s unassigned fund balance for the General Fund was
$28,516,000 or 59.2% of total General Fund expenditures.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The
City’s basic financial statements are comprised of three components: 1) government-wide financial statements,
2) fund financial statements; and 3) notes to the financial statements. This report also contains other
supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements: The government-wide financial statements are designed to provide
readers with a broad overview of the City’s finances in a manner similar to a private-sector business.
The statement of net position presents information on all of the City’s assets and deferred outflows of resources,
liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases
or decreases in net position may serve as a useful indicator of whether the financial position of the City is
improving or deteriorating.
The statement of activities presents information showing how the City’s net position changed during the most
recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the
change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this
statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and
earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are
intended to recover all or a significant portion of their costs through user fees and charges (business-type
activities). The governmental activities of the City include Public Safety, Public Works (roads and traffic
controls), Culture and Recreation, Community and Economic Development, General Government, and Interest
on long-term debt. The business-type activities of the City include Airport, Housing Authority, Parking,
Sanitation, Stormwater Collection, Transit, Wastewater Treatment, and Water.
The government-wide financial statements may be found on pages 30 – 33 of this report.
19
Fund Financial Statements: A fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. The City, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary
funds, and fiduciary funds.
Governmental Funds: Governmental funds are used to account for essentially the same function reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows of
spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such
information may be useful in evaluating a government’s near-term financing requirements and is typically the
basis that is used in developing the next annual budget.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it
is useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. Both the governmental fund balance sheet
and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison.
The City has six major governmental funds: General Fund, Other Shared Revenue and Grants Fund, Employee
Benefits Fund, Other Construction Fund, Bridge, Street and Traffic Control Construction Fund, and Debt
Service Fund. Information is presented separately in the governmental funds balance sheet and in the
governmental funds statement of revenues, expenditures, and changes in fund balances for these major funds.
Data from all other non-major governmental funds is combined into a single aggregated presentation and are
referenced under a single column as “Other Governmental Funds”. Individual fund data on each of these non-
major governmental funds is provided in the form of combining statements elsewhere in this report.
The City adopts an annual appropriated budget for all governmental funds as required by state statute. Budget
comparisons have been provided for the Governmental funds and the Enterprise funds, to demonstrate
compliance with the adopted budget.
The basic governmental funds financial statements can be found on pages 34 – 37 of this report.
Proprietary Funds: The City maintains two different types of proprietary funds. Enterprise funds are used to
report the same functions presented as business-type activities in the government-wide financial statements.
The City uses enterprise funds to account for its Airport, Housing Authority, Parking, Sanitation, Stormwater
Collection, Transit, Wastewater Treatment, and Water activities. Internal Service funds are an accounting
device used to accumulate and allocate costs internally among the City’s various functions. The City has four
Internal Service Funds: Equipment Maintenance, Central Services, Loss Reserve, and Information Technology.
Because these services predominantly benefit governmental rather than business-type functions, they have been
included within governmental activities in the government-wide financial statements.
Proprietary funds financial statements provide the same type of information as the government-wide financial
statements, only in more detail. Parking, Transit, Wastewater Treatment, Water, Sanitation, Stormwater and
Housing Authority are considered to be major funds and are reported individually throughout the report. The
only non-major enterprise fund, Airport, is listed as non-major on the basic proprietary fund financial
statements. Individual fund data for the Internal Service funds is provided in the form of combining statements
elsewhere in this report.
The basic proprietary fund financial statements can be found on pages 38 – 40 of this report.
Fiduciary Funds: Fiduciary funds are used to account for resources held for the benefit of parties outside the
government. Fiduciary funds are not available to support the City’s own programs and therefore are not
reflected in the government-wide financial statements. The City has one fiduciary fund: Project Green, which
is maintained as an agency fund. 20
The basic fiduciary funds financial statements can be found on page 41.
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 42 – 82 of this report.
Other Information: The combining statements referred to in the above paragraphs in connection with non-
major governmental funds and internal service funds are presented immediately following the notes.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In
the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of
resources by $651,667,000 at the close of the fiscal year ended June 30, 2018.
By far, the largest portion of the City’s net position reflect its investment in capital assets (e.g., land, building,
machinery and equipment, improvements other than buildings, and infrastructure), net any related debt to
acquire those assets that is still outstanding. The City uses these capital assets to provide services to its citizens;
consequently, these assets are not available for future spending. Although the City’s investment in its capital
assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be
provided from other resources, since the capital assets themselves cannot be used to liquidate these liabilities.
City of Iowa City's Net Position
June 30, 2018
(amounts expressed in thousands)
Governme ntal Business-type
activities activities Total
2017 2017 2017
2018 (not restated) 2018 (not restated) 2018 (not restated)
Current and other assets 192,519$ 190,352$ 120,389$ 119,968$ 312,908$ 310,320$
Capital assets 248,011 226,143 335,893 335,064 583,904 561,207
Total assets 440,530 416,495 456,282 455,032 896,812 871,527
Deferred outflows of resources 12,114 13,131 2,806 2,345 14,920 15,476
Long-term liabilities outstanding 114,709 112,931 62,121 68,385 176,830 181,316
Current and other liabilities 14,738 11,042 6,730 4,379 21,468 15,421
Total liabilities 129,447 123,973 68,851 72,764 198,298 196,737
Deferred inflows of resources 60,984 58,062 783 799 61,767 58,861
Net position:
Net investment in
capital assets 157,106 183,651 294,109 285,912 451,215 469,563
Restricted 41,490 47,676 22,219 21,238 63,709 68,914
Unrestricted 63,617 16,264 73,126 76,664 136,743 92,928
Total net position 262,213$ 247,591$ 389,454$ 383,814$ 651,667$ 631,405$
21
A portion of the City’s net position, $63,709,000 or 9.8%, represents resources that are subject to external
restrictions on how they may be used. The remaining balance of the unrestricted net position, $136,743,000 or
21.0%, 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, 2018, 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 FY18’s operation.
Governmental Activities: Governmental activities increased the City’s net position by $15,620,000. 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 FY18 were $88,464,000. Governmental activities are
primarily funded through taxes, $61,752,000 or 69.8%, and grants and contributions, $11,704,000 or 13.2%.
Taxes increased from the prior year by $1,301,000, mostly due to increased property taxes which was due to an
increase in the taxable value of all property. Grants and contributions decreased from prior year by $9,076,000
which is due to City’s expenses for a large flood mitigation project that were reimbursed in the prior year.
Expenses for governmental activities totaled $74,658,000. Governmental activities are tracked by function
including Public Safety, Public Works, Community and Economic Development, Culture and Recreation, and
General Government. In FY18, Public Safety accounted for the highest portion of governmental expenses,
$25,191,000 or 33.7%, and increased over the prior year due to increases in salaries and benefits. Culture and
Recreation expenses of $16,363,000 or 21.9% made up another large portion of the governmental expenses and
increased over the prior year due mainly to an increase in pension expense. Public Works expenses of
$12,813,000 or 17.2% made up the third highest portion of governmental expenses and increased due to
increases in salaries and benefits.
Business-type Activities: Business-type activities increased the City’s total net position by $6,208,000. The
increase in net position was primarily from the Parking and Transit funds. The increase in Parking is due to the
sale of land. The increase in Transit is due to grants to purchase buses. For all business-type activities, revenues
exceeded expenses by $8,022,000.
Revenues for business-type activities totaled $65,014,000. The primary revenue source for business-type
activities is charges for services, $42,208,000 or 64.9%. In addition for FY18, the City’s business type-activities
had a significant portion, $18,416,000 or 28.3%, 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 FY18 were $56,992,000. Wastewater Treatment represented
the highest portion of business-type activities, $11,392,000 or 20.0%, with Housing Authority, $9,535,000 or
16.7%, Water, $9,472,000 or 16.6%, Sanitation, $9,408,000 or 16.5%, and Transit, $8,071,000 or 14.2%,
making up the remainder of the majority of business-type activities expenses.
22
The graphs on the following pages represent a breakdown of revenue by source and expenses by program area
for governmental and business-type activities.
City of Iowa City's Changes in Net Position
(amounts expressed in thousands)
Governmental Business-type
activities activities Total
2017 2017 2017
2018 (not restated)2018 (not restated)2018 (not restated)
Revenues:
Program Revenues:
Charges for services 7,297$ 8,412$ 42,208$ 41,231$ 49,505$ 49,643$
Operating grants and contributions 10,245 10,828 11,230 10,836 21,475 21,664
Capital grants and contributions 1,459 9,952 7,186 4,799 8,645 14,751
General Revenues:
Property taxes 59,046 57,649 - - 59,046 57,649
Other taxes 2,706 2,802 - - 2,706 2,802
Grants and contributions not restricted
to specific purposes 1,547 1,583 - - 1,547 1,583
Earnings on investments 2,368 1,397 1,496 938 3,864 2,335
Gain on disposal of capital assets 140 2,151 2,438 69 2,578 2,220
Other 3,656 3,369 456 1,260 4,112 4,629
Total revenues 88,464 98,143 65,014 59,133 153,478 157,276
Expenses:
Public safety 25,191 24,002 - - 25,191 24,002
Public works 12,813 12,032 - - 12,813 12,032
Culture and recreation 16,363 15,525 - - 16,363 15,525
Community and economic development 12,019 8,253 - - 12,019 8,253
General government 6,858 6,124 - - 6,858 6,124
Interest on long-term debt 1,414 1,481 - - 1,414 1,481
Wastewater treatment - - 11,392 11,233 11,392 11,233
Water - - 9,472 8,921 9,472 8,921
Sanitation - - 9,408 9,123 9,408 9,123
Housing authority - - 9,535 8,798 9,535 8,798
Parking - - 5,590 4,620 5,590 4,620
Airport - - 1,680 1,402 1,680 1,402
Stormwater - - 1,844 2,432 1,844 2,432
Transit - - 8,071 7,263 8,071 7,263
Total expenses 74,658 67,417 56,992 53,792 131,650 121,209
Change in net position before transfers 13,806 30,726 8,022 5,341 21,828 36,067
Transfers 1,814 (7,053) (1,814) 7,053 - -
Change in net position 15,620 23,673 6,208 12,394 21,828 36,067
Net position beginning of year, as restated 246,593 223,918 383,246 371,420 629,839 595,338
Net position end of year 262,213$ 247,591$ 389,454$ 383,814$ 651,667$ 631,405$
23
Charges for
services
8%
Grants and
Contributions
15%
Property taxes
67%
Other Taxes
3%
Misc.
Other
7%
Governmental Activities
FY2018 Revenue
by Source
Charges for
services
65%
Grants and
Contributions
28%
Misc. Other
7%
Business-Type Activities
FY2018 Revenue
by Source
24
Public
Safety
Public
Works
Culture and
RecreationCommunity
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
28,000
Dollars ($)Program Area
Governmental Activities
FY2018 Expenses
by Program Area
(amounts expressed in thousands)
Wastewater
Treatment
WaterSanitationHousing
Authority
Parking
Airport
Stormwater
Transit
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
Dollars ($)Program Area
Business-Type Activities
FY2018 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, 2018, the City’s governmental funds reported combined ending fund
balances of $101,810,000, a decrease of $4,571,000 in comparison with the prior year. Of this total amount,
$28,478,000 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 $65,975,000 or 64.8% contains external restraints on its use. The committed and assigned fund
balances of $4,962,000 or 4.9% and $1,437,000 or 1.4%, respectively, have been identified by the City to be
used for specific purposes. The nonspendable fund balance is $958,000 or 0.9%, which the City is contractually
required to maintain intact or cannot be spent because it is in a nonspendable format, such as inventories.
The General Fund is the chief operating fund of the City. As of the fiscal year ended June 30, 2018, the
unassigned fund balance of the General Fund was $28,516,000 while General Fund’s total fund balance was
$37,650,000. 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 59.2% of total
General Fund expenditures of $48,191,000, while total fund balance represents 78.1% of that same amount.
During the current fiscal year, the fund balance of the City’s General Fund decreased by $4,446,000. This is
due to transfers out to other funds.
The fund balance in the Bridge, Street, and Traffic Control Construction Fund was $15,098,000, a decrease of
$439,000. 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 $26,752,000, a
decrease of $604,000. 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 transfers
out to other funds.
The ending fund balance of the Debt Service Fund was $8,609,000, an increase of $853,000, 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 $2,847,000, an increase of $326,000 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 $373,385,000, an increase in net position of $5,633,000.
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, $294,109,000 is net investment in capital assets. Unrestricted net position totaled $57,057,000, a
decrease of $4,113,000 compared to the previous year.
The Internal Service funds showed net position totaling $40,949,000 as of June 30, 2018, an increase of
$1,472,000 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 $7,592,000 or 5.2% to a total of $152,606,000 and the expenditure budget by $74,315,000 or 42.9% to a
total of $247,645,000. 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, 2018 amounts to $583,904,000, 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, 2018 increased by
$21,868,000 for governmental activities compared to the prior year and increased by $829,000 for business-
type activities from the prior year.
The following table reflects the $583,904,000 investment in capital assets, net of accumulated depreciation.
City of Iowa City's Capital Assets
(net of depreciation)
(amounts expressed in thousands)
Governmental Business-type
Activities Activities Total
2018 2017 2018 2017 2018 2017
Land 30,894$ 29,778$ 30,317$ 30,737$ 61,211$ 60,515$
Buildings 38,998 39,464 69,855 73,297 108,853 112,761
Improvements other than
buildings 3,766 3,954 4,220 4,341 7,986 8,295
Machinery and equipment 17,279 16,686 10,396 7,470 27,675 24,156
Infrastructure 114,792 113,494 205,809 209,505 320,601 322,999
Construction in progress 42,282 22,767 15,296 9,714 57,578 32,481
Total 248,011$ 226,143$ 335,893$ 335,064$ 583,904$ 561,207$
27
Major capital asset events during the current fiscal year included the following:
• Work was completed for Phase 1 of the Riverfront Crossings Park. This park was constructed on the
old wastewater plant site and it will also serve as a floodable area/wetlands area. The construction in
progress balance at the beginning of the year was $382,000. Additional expenses of $2,727,000 were
added in FY 18. The total cost of the project that was capitalized was $3,109,000 and is funded primarily
by the state. The Iowa Flood Mitigation Board approves funding for flood mitigation projects using
either sales tax increments or funds appropriated by the General Assembly.
• Expenses for a variety of street and bridge construction were moved into construction in progress at the
end of FY18 for a total balance of $48,008,000. This construction in progress includes $46,356,000 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 $94,730,000.
Of this amount, $51,880,000 comprises debt backed by the full faith and credit of the City. $4,435,000 or 8.5%
of these bonds is debt that will be paid with Tax Increment Financing revenues. $42,850,000 represents revenue
bonds secured solely by specific revenue sources.
The City issued $11,995,000 of General Obligation bonds during FY18. This increase in debt was offset by
the retirement of debt for a net decrease of City’s total bonded debt by $4,935,000.
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, 2018 were as follows:
General obligation bonds Aaa
Wastewater treatment revenue bonds Aa2
Water revenue bonds Aa2
The City continues to operate well under the State debt capacity debt limitations. State statute limits the
amount of debt outstanding to 5% of the assessed value of all taxable property in Iowa City. Debt subject to
the debt limit includes general obligation debt and revenue bonds issued pursuant to Iowa Code Chapter 403
(tax increment). The current debt limitation for the City is $274,723,000. With outstanding debt applicable
to this limit of $92,432,000 we are utilizing 33.6% of this limit.
More detailed information on debt administration is provided in Note 6 of the financial statements.
City of Iowa City's Outstanding Debt
General Obligation and Revenue Bonds
(amounts expressed in thousands)
Governmental Business-type
Activities Activities Total
2018 2017 2018 2017 2018 2017
General obligation bonds 51,880$ 51,645$ -$ -$ 51,880$ 51,645$
Revenue bonds 15,065 15,200 27,785 32,820 42,850 48,020
Total 66,945$ 66,845$ 27,785$ 32,820$ 94,730$ 99,665$
28
Economic Factors and Next Year’s Budget and Rates
The City expects continued constraints by the State’s property tax formula. The State passed property tax
reform, which will negatively affect the City’s general operating funds. Without the potential for new
revenue sources, like those mentioned above, the City’s opportunities for new initiatives are limited. The
Council has established a budget where expenditures exceed revenues by $2.3million in the General Fund
for FY19 that strives to maintain current service delivery levels. The tax levy rate per $1,000 of assessed
valuation for FY19 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 3.229
Employee Benefits Levy 3.344
Transit Levy 0.950
Liability Insurance Levy 0.290
Library Levy 0.270
Total City Levy $ 16.183
29
Governmental Business-type
Activities Activities Total
Assets
Equity in pooled cash and investments 109,860$ 63,520$ 173,380$
Receivables:
Property tax 59,538 - 59,538
Accounts and unbilled usage 817 3,660 4,477
Interest 920 647 1,567
Notes 5,304 397 5,701
Internal balances (16,069) 16,069 -
Due from other governments 4,067 1,327 5,394
Prepaid item 810 97 907
Inventories 602 733 1,335
Assets held for resale 562 - 562
Restricted assets:
Equity in pooled cash and investments 26,108 33,939 60,047
Capital assets:
Land and construction in progress 73,176 45,613 118,789
Other capital assets (net of accumulated depreciation)174,835 290,280 465,115
Total assets 440,530 456,282 896,812
Deferred Outflows of Resources
Pension related deferred outflows 11,477 2,561 14,038
OPEB related deferred outflows 637 245 882
Total deferred outflows of resources 12,114 2,806 14,920
Liabilities
Accounts payable 5,168 2,402 7,570
Contracts payable 3,663 1,407 5,070
Accrued liabilities 4,193 479 4,672
Interest payable 134 520 654
Deposits 952 1,819 2,771
Advances from grantors 124 - 124
Due to other governments 29 103 132
Notes payable 475 - 475
Noncurrent liabilities:
Due within one year:
Employee vested benefits 1,253 424 1,677
Capital lease obligation - 545 545
Bonds payable 9,612 5,269 14,881
Due in more than one year:
Employee vested benefits 987 302 1,289
Net pension liability 38,867 8,966 47,833
Other post employment benefits liability 5,472 2,117 7,589
Notes payable 211 - 211
Capital lease obligation - 11,413 11,413
Bonds payable 58,307 23,826 82,133
Landfill closure/post-closure liability - 9,259 9,259
Total liabilities 129,447$ 68,851$ 198,298$
(continued)
(amounts expressed in thousands)
CITY OF IOWA CITY, IOWA
STATEMENT OF NET POSITION
June 30, 2018
30
Governmental Business-type
Activities Activities Total
Deferred inflows of resources
Unavailable revenues:
Pension related deferred inflows 1,565$ 475$ 2,040$
OPEB related deferred inflows 246 95 341
Deferred amount on refunding - 213 213
Succeeding year property taxes 59,173 - 59,173
Total deferred inflows of resources 60,984 783 61,767
Net position
Net investment in capital assets 157,106 294,109 451,215
Restricted for or by:
Employee benefits 3,119 - 3,119
Capital projects 21,463 - 21,463
Debt service 8,423 - 8,423
Police 283 - 283
Other purposes 4,469 - 4,469
Bond ordinance - 13,111 13,111
State statute - 5,876 5,876
Future improvements - 100 100
Grant agreement 3,733 3,132 6,865
Unrestricted 63,617 73,126 136,743
Total net position 262,213$ 389,454$ 651,667$
The notes to the financial statements are an integral part of this statement.
June 30, 2018
(amounts expressed in thousands)
CITY OF IOWA CITY, IOWA
STATEMENT OF NET POSITION (continued)
31
32
Operating Capital
Charges Grants and Grants and Governmental Business-type
Functions/Programs:Expenses for Services Contributions Contributions Activities Activities Total
Governmental activities:
Public safety 25,191$ 4,438$ 272$ 15$ (20,466)$ -$ (20,466)$
Public works 12,813 62 8,572 1,095 (3,084) - (3,084)
Culture and recreation 16,363 836 16 322 (15,189) - (15,189)
Community and economic development 12,019 441 1,385 27 (10,166) - (10,166)
General government 6,858 1,520 - - (5,338) - (5,338)
Interest on long-term debt 1,414 - - - (1,414) - (1,414)
Total governmental activities 74,658 7,297 10,245 1,459 (55,657) - (55,657)
Business-type activities:
Wastewater treatment 11,392 12,626 - 1,913 - 3,147 3,147
Water 9,472 9,473 - 483 - 484 484
Sanitation 9,408 10,014 3 22 - 631 631
Housing authority 9,535 323 9,065 - - (147) (147)
Parking 5,590 5,648 - - - 58 58
Airport 1,680 348 72 49 - (1,211) (1,211)
Stormwater 1,844 1,560 2 892 - 610 610
Transit 8,071 2,216 2,088 3,827 - 60 60
Total business-type activities 56,992 42,208 11,230 7,186 - 3,632 3,632
Total 131,650$ 49,505$ 21,475$ 8,645$ (55,657) 3,632 (52,025)
General revenues:
Property taxes, levied for general purposes 59,046 - 59,046
Hotel/motel tax 1,046 - 1,046
Gas and electric tax 684 - 684
Utility franchise tax 976 - 976
Grants and contributions not restricted to specific purposes 1,547 - 1,547
Earnings on investments 2,368 1,496 3,864
Gain on disposal of capital assets 140 2,438 2,578
Miscellaneous 3,656 456 4,112
Transfers 1,814 (1,814) -
Total general revenues and transfers 71,277 2,576 73,853
Changes in net position 15,620 6,208 21,828
Net position beginning of year, as restated 246,593 383,246 629,839
Net position end of year 262,213$ 389,454$ 651,667$
The notes to the financial statements are an integral part of this statement.
Program Revenues
Net (Expense) Revenue and
Changes in Net Position
CITY OF IOWA CITY, IOWA
STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2018
(amounts expressed in thousands)
33
Bridge,
Other Street, and
Shared Traffic Other
Revenue and Employee Other Control Debt Governmental
General Grants Benefits Construction Construction Service Funds Total
Assets
Equity in pooled cash and investments 36,321$ 3,708$ 2,696$ 11,919$ 12,630$ 7,834$ 2,260$ 77,368$
Receivables:
Property tax 34,973 - 12,165 - - 12,029 371 59,538
Accounts and unbilled usage 496 21 - - 205 - - 722
Interest 276 8 - 117 103 168 6 678
Notes 1,276 - -- - 362 3,666 5,304
Advances to other funds - - - - - 111 - 111
Due from other governments 1,941 653 299 262 753 - 108 4,016
Inventories - 81 - - - - - 81
Prepaid item 726 - 84 - - - - 810
Assets held for resale 562 - - - - - - 562
Restricted assets:
Equity in pooled cash and investments 1,904 1,207 - 17,088 5,852 57 - 26,108
Total assets 78,475$ 5,678$ 15,244$ 29,386$ 19,543$ 20,561$ 6,411$ 175,298$
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable 1,492$ 223$ 1$ 1,213$ 1,316$ -$ 382$ 4,627$
Contracts payable - - - 1,311 2,352 - - 3,663
Accrued liabilities 1,391 96 2 - 19 - 23 1,531
Advances from other funds - 111 - - - - - 111
Due to other governments 29 - - - - - - 29
Interest payable 5 - - - - - - 5
Notes payable 475 - - - - - - 475
Liabilities payable from restricted assets:
Deposits 947 5 - - - - - 952
Advances from grantors 113 6 - 5 - - - 124
Total liabilities 4,452 441 3 2,529 3,687 - 405 11,517
Deferred inflows of resources :
Unavailable revenues:
Succeeding year property taxes 34,764 - 12,095 - - 11,952 362 59,173
Grants 9 1 - 13 753 - 26 802
Other 1,600 - 299 92 5 - -1,996
Total deferred inflows of resources 36,373 1 12,394 105 758 11,952 388 61,971
Fund balances:
Nonspendable 793 81 84 - - - - 958
Restricted 1,942 5,155 2,763 26,752 15,098 8,609 5,656 65,975
Committed 4,962 - - - - - - 4,962
Assigned 1,437 - - - - - - 1,437
Unassigned 28,516 - - - - - (38) 28,478
Total fund balances 37,650 5,236 2,847 26,752 15,098 8,609 5,618 101,810
Total liabilities, deferred inflows
of resources and fund balances 78,475$ 5,678$ 15,244$ 29,386$ 19,543$ 20,561$ 6,411$ 175,298$
The notes to the financial statements are an integral part of this statement.
Special Revenue Capital Projects
CITY OF IOWA CITY, IOWA
BALANCE SHEET
GOVERNMENTAL FUNDS
June 30, 2018
(amounts expressed in thousands)
34
Total governmental fund balances 101,810$
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.40,949
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.2,798
Capital assets used in governmental activities are not current
financial resources and therefore are not reported in the funds. 235,805
Pension and OPEB related deferred outflows of resources and
deferred inflows of resources are not due and payable in the
current period and therefore are not reported in the funds.
Deferred outflows of resources 11,667$
Deferred inflows of resources (1,722) 9,945
Net pension liabilities are not due and payable in the
current period and therefore are not reported in the funds.(37,449)
Accrued compensated absences are not due and payable in the
current period and therefore are not reported in the funds.(2,126)
Accrued post employment benefit liabilities are not due and
payable in the current period and therefore are not reported
in the funds.(5,191)
Bonds payable are not due and payable in the current period
and therefore are not reported in the funds.(67,919)
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 (16,069)
Total net position of governmental activities 262,213$
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, 2018
35
Bridge,
Other Street, and
Shared Traffic Other
Revenue and Employee Other Control Debt Governmental
General Grants Benefits Construction Construction Service Funds Total
Revenues
Taxes 35,363$ -$ 10,908$ -$ -$ 12,700$ 2,782$ 61,753$
Licenses and permits 2,734 - - - - - - 2,734
Intergovernmental 3,786 8,656 292 371 127 332 1,380 14,944
Charges for services 1,465 422 316 43 49 - - 2,295
Fines and forfeits 695 - - - - - - 695
Use of money and property 1,164 85 - 245 184 207 52 1,937
Miscellaneous 1,878 156 153 163 477 - 48 2,875
Total revenues 47,085 9,319 11,669 822 837 13,239 4,262 87,233
Expenditures
Current:
Public safety 22,762 - 591 7 - - - 23,360
Public works 1,871 5,885 - 446 1,850 - - 10,052
Culture and recreation 13,099 - - 1,109 - - - 14,208
Community and economic development 2,785 492 - 5,352 - - 2,445 11,074
General government 5,550 - 377 29 - 61 - 6,017
Debt service:
Principal - - - - - 11,895 - 11,895
Interest - - - - - 1,570 - 1,570
Capital outlay 2,124 344 - 5,331 20,426 - - 28,225
Total expenditures 48,191 6,721 968 12,274 22,276 13,526 2,445 106,401
Excess (deficiency) of revenues over
(under) expenditures (1,106) 2,598 10,701 (11,452) (21,439) (287) 1,817 (19,168)
Other Financing Sources (Uses)
Issuance of debt 17 - - 5,258 6,665 55 - 11,995
Sale of capital assets 140 - - - - - - 140
Premiums on issuance of bonds - - - 104 131 1 - 236
Transfers in 10,138 1,092 - 6,413 15,603 1,084 336 34,666
Transfers out (13,635) (4,975) (10,375) (927) (1,399) - (1,129) (32,440)
Total other financing sources and (uses)(3,340) (3,883) (10,375) 10,848 21,000 1,140 (793) 14,597
Net change in fund balances (4,446) (1,285) 326 (604) (439) 853 1,024 (4,571)
Fund Balances, Beginning 42,096 6,521 2,521 27,356 15,537 7,756 4,594 106,381
Fund Balances, Ending 37,650$ 5,236$ 2,847$ 26,752$ 15,098$ 8,609$ 5,618$ 101,810$
The notes to the financial statements are an integral part of this statement.
Special Revenue Capital Projects
CITY OF IOWA CITY, IOWA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended June 30, 2018
(amounts expressed in thousands)
36
Net change in fund balances - total governmental funds (4,571)$
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 27,549$
Capital assets contributed 945
Depreciation expense (6,877) 21,617
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 (11,995)
Premium on bonds issued (236)
Repayments of debt 11,895
Amortization of premium 156 (180)
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.(284)
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 2
Pension expense (1,429)
Change in accrued post employment benefit liability (432)
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.897
Change in net position of governmental activities 15,620$
The notes to the financial statements are an integral part of this statement.
(amounts expressed in thousands)
For the Year Ended June 30, 2018
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
GovernmentalActivities -
Internal
Wastewater Housing Nonmajor Service
Parking Transit Treatment Water Sanitation Stormwater Authority Airport Total Funds
Assets
Current assets:
Equity in pooled cash and investments 12,971$ 6,979$ 14,856$ 8,223$ 14,762$ 1,550$ 3,929$ 250$ 63,520$ 32,492$
Receivables (net of allowance for uncollectibles):
Accounts and unbilled usage 14 81 1,569 1,112 693 164 3 24 3,660 95
Interest 82 34 132 102 226 11 58 2 647 242
Notes - - - - - - 397 - 397 -
Due from other governments - 1,169 - 58 49 - 34 17 1,327 51
Inventories - 325 - 408 - - - - 733 521
Prepaid item - 19 19 19 18 - - 22 97 -
Total current assets 13,067 8,607 16,576 9,922 15,748 1,725 4,421 315 70,381 33,401
Noncurrent assets:
Restricted assets:
Equity in pooled cash and investments 1 20 9,991 5,163 14,743 - 3,911 110 33,939 -
Advances to other funds - - - - 1,666 - -- 1,666 -
Capital assets:
Land 3,489 2,630 759 6,296 2,264 2,264 620 11,995 30,317 45
Buildings 41,647 15,399 36,858 24,019 5,467 - 5,350 5,377 134,117 1,487
Improvements other than buildings 328 - 7,261 2,742 421 - 9 396 11,157 50
Machinery and equipment 1,575 14,252 7,633 10,833 252 27 106 293 34,971 21,748
Infrastructure - 955 149,981 63,824 17,366 61,227 - 17,868 311,221 2,101
Accumulated depreciation (20,632) (15,633) (80,228) (39,112) (16,375) (14,933) (4,566) (9,707) (201,186) (13,561)
Construction in progress - 1,306 7,961 3,494 821 1,634 - 80 15,296 336
Total noncurrent assets 26,408 18,929 140,216 77,259 26,625 50,219 5,430 26,412 371,498 12,206
Total assets 39,475 27,536 156,792 87,181 42,373 51,944 9,851 26,727 441,879 45,607
Deferred Outflows of Resources
Pension related deferred outflows 251 716 408 490 471 38 172 15 2,561 415
OPEB related deferred outflows 25 77 34 44 51 1 12 1 245 32
Total deferred outflows of resources 276 793 442 534 522 39 184 16 2,806 447
Liabilities
Current liabilities:
Accounts payable 124 1,579 80 385 184 5 26 19 2,402 541
Contracts payable 31 - 426 205 705 4 - 36 1,407 -
Accrued liabilities 46 151 68 85 86 8 31 4 479 2,662
Employee vested benefits 37 127 61 80 83 1 33 2 424 64
Due to other governments - 13 1 27 1 - 61 - 103 -
Interest payable 40 - 330 150 - - - - 520 -
Capital lease obligation 545 - - - - - - - 545 -
Bonded debt payable (net of unamortized
premium and discounts)- - 3,729 1,540 - - - - 5,269 -
Total current liabilities 823 1,870 4,695 2,472 1,059 18 151 61 11,149 3,267
Noncurrent liabilities:
Liabilities payable from restricted assets:
Deposits 1 6 - 1,017 7 - 779 9 1,819 -
Advances from other funds 1,666 - - - - - -- 1,666 -
Employee vested benefits 27 87 42 58 61 1 24 2 302 50
Capital lease obligation 11,413 - - - - - -- 11,413 -
Bonded debt payable (net of unamortized
premium and discounts)- - 13,358 10,468 - - - - 23,826 -
Net pension liability 894 2,512 1,404 1,680 1,678 143 602 53 8,966 1,418
Other post employment benefits liability 214 665 293 383 439 11 101 11 2,117 281
Landfill closure/postclosure liability - - - - 9,259 - - - 9,259 -
Total noncurrent liabilities 14,215 3,270 15,097 13,606 11,444 155 1,506 75 59,368 1,749
Total liabilities 15,038 5,140 19,792 16,078 12,503 173 1,657 136 70,517 5,016
Deferred Inflows of Resources
Pension related deferred inflows 47 133 74 89 89 8 32 3 475 75
OPEB related deferred inflows 10 29 13 17 20 1 5 - 95 14
Deferred amount on refunding - - 123 90 - - - - 213 -
Total deferred inflow of resources 57 162 210 196 109 9 37 3 783 89
Net Position
Net investment in capital assets 14,449 18,909 113,015 59,480 10,216 50,219 1,519 26,302 294,109 12,206
Restricted by bond ordinance - - 9,661 3,450 - - - - 13,111 -
Restricted by state statute - - - 5,876 - - - 5,876 -
Restricted for future improvements - - - - - - - 100 100 -
Restricted by grant agreement - - - - - - 3,132 - 3,132 -
Unrestricted 10,207 4,118 14,556 8,511 14,191 1,582 3,690 202 57,057 28,743
Total net position 24,656$ 23,027$ 137,232$ 71,441$ 30,283$ 51,801$ 8,341$ 26,604$ 373,385$ 40,949$
Adjustment to reflect the consolidation of internal service fund activities
related to enterprise funds.16,069
Net position of business-type activities 389,454$
The notes to the financial statements are an integral part of this statement.
Business-type Activities - Enterprise Funds
CITY OF IOWA CITY, IOWA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
June 30, 2018
(amounts expressed in thousands)
38
Governmental
Activities -
Internal
Wastewater Housing Nonmajor Service
Parking Transit Treatment Water Sanitation Stormwater Authority Airport Total Funds
Operating Revenues:
Charges for services 5,648$ 2,216$ 12,626$ 9,473$ 10,014$ 1,560$ 323$ 348$ 42,208$ 19,284$
Miscellaneous 35 69 87 73 79 7 93 13 456 -
Total operating revenues 5,683 2,285 12,713 9,546 10,093 1,567 416 361 42,664 19,284
Operating Expenses:
Personal services 1,674 4,127 2,948 3,463 2,960 314 905 85 16,476 2,317
Commodities 502 810 1,250 1,427 403 73 85 70 4,620 2,258
Services and charges 1,614 2,235 2,424 2,059 5,301 217 8,434 393 22,677 10,832
3,790 7,172 6,622 6,949 8,664 604 9,424 548 43,773 15,407
Depreciation 1,268 906 4,436 2,372 1,526 1,240 120 1,003 12,871 1,884
Total operating expenses 5,058 8,078 11,058 9,321 10,190 1,844 9,544 1,551 56,644 17,291
Operating income (loss)625 (5,793) 1,655 225 (97) (277) (9,128) (1,190) (13,980) 1,993
Nonoperating Revenues (Expenses):
Gain (loss) on disposal of capital assets 2,423 (23) (53) 3 - - 2 (144) 2,208 (30)
Operating grants - 2,088 - - 3 2 9,065 72 11,230 -
Interest income 129 80 468 292 444 24 54 5 1,496 430
Interest expense (568) - (375) (259) - - - - (1,202) -
Total nonoperating revenues (expenses)1,984 2,145 40 36 447 26 9,121 (67) 13,732 400
Income (loss) before capital contributions
and transfers 2,609 (3,648) 1,695 261 350 (251) (7) (1,257) (248) 2,393
Capital contributions - 3,827 1,913 483 22 892 - 49 7,186 -
Transfers in - 3,376 531 1,041 1 1,623 30 110 6,712 1,202
Transfers out - -(4,727) (715) (1,528) (1,000) (47) - (8,017) (2,123)
Change in net position 2,609 3,555 (588) 1,070 (1,155) 1,264 (24) (1,098) 5,633 1,472
Net Position, Beginning, as restated 22,047 19,472 137,820 70,371 31,438 50,537 8,365 27,702 39,477
Net Position, Ending 24,656$ 23,027$ 137,232$ 71,441$ 30,283$ 51,801$ 8,341$ 26,604$ 40,949$
Adjustment to reflect the consolidation of internal service fund activities
related to enterprise funds 575
Change in net position of business-type activities 6,208$
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, 2018
(amounts expressed in thousands)
39
Governmental
Activities -
Internal
Wastewater Housing Nonmajor Service
Parking Transit Treatment Water Sanitation Stormwater Authority Airport Total Funds
Cash Flows From Operating Activities
Receipts from customers and users 5,679$ 2,219$ 12,669$ 9,472$ 10,118$ 1,557$ 717$ 360$ 42,791$ 19,362$
Payments to suppliers (2,187) (1,678) (3,839) (3,294) (5,082) (358) (8,500) (471) (25,409) (13,078)
Payments to employees (1,769) (4,005) (3,084) (3,482) (2,939) (276) (928) (78) (16,561) (2,400)
Net cash flows from (used for) operating activities 1,723 (3,464) 5,746 2,696 2,097 923 (8,711) (189) 821 3,884
Cash Flows From Noncapital Financing Activities
Grants received - 3,706 - - 1 84 8,993 140 12,924 -
Transfers from other funds - 3,376 231 - 1 - 30 110 3,748 -
Transfers to other funds - -(2,000) (715) (486) (1,000) (47) - (4,248) (1,453)
Repayment/(payment) of notes receivable - -- - - - 143 - 143 -
Repayment of advances from other funds - -- - 235 - - - 235 -
Repayment of advances to other funds (235) - - - - - - - (235) -
Net cash flows from (used for) noncapital financing
activities (235) 7,082 (1,769) (715) (249) (916) 9,119 250 12,567 (1,453)
Cash Flows From Capital and Related Financing
Activities
Capital grants received - 3,108 1,291 - 20 - - 78 4,497 -
Acquisition and construction of property and
equipment (70) (4,830) (4,522) (1,198) (1,185) (22) (22) (152) (12,001) (1,870)
Proceeds from sale of property 2,679 - 10 3 - - 2 20 2,714 237
Principal paid on capital lease obligation (2,524) - -- - - - - (2,524) -
Interest paid on capital lease obligation (576) - - - - - - - (576) -
Principal paid on bonded debt - -(3,556) (1,443) - - - - (4,999) -
Interest paid on bonded debt - -(755) (395) - - - - (1,150) -
Net cash flows used for capital and related
financing activities (491) (1,722) (7,532) (3,033) (1,165) (22) (20) (54) (14,039) (1,633)
Cash Flows From Investing Activities
Interest on investments 78 61 436 232 310 18 61 4 1,200 277
Net increase (decrease) in cash and cash equivalents 1,075 1,957 (3,119) (820) 993 3 449 11 549 1,075
Cash and Cash Equivalents, Beginning 11,897 5,042 27,966 14,206 28,512 1,547 7,391 349 96,910 31,417
Cash and Cash Equivalents, Ending 12,972$ 6,999$ 24,847$ 13,386$ 29,505$ 1,550$ 7,840$ 360$ 97,459$ 32,492$
Reconciliation of operating income (loss)
to net cash flows from (used for) operating activities:
Operating income (loss)625$ (5,793)$ 1,655$ 225$ (97)$ (277)$ (9,128)$ (1,190)$ (13,980)$ 1,993$
Adjustments to reconcile operating income
(loss) to net cash flows from (used for) operating activities:
Depreciation expense 1,268 906 4,436 2,372 1,526 1,240 120 1,003 12,871 1,884
Changes in:
Receivables:
Accounts and unbilled usage (4) (66) (44) (69) 5 (10) (3) - (191) 62
Due from other governments - -- (57) 18 - 144 - 105 16
Inventories - (31) - 61 - - - - 30 (55)
Prepaid item - (19) (19) (19) (18) - - (19) (94) 12
Accounts payable (71) 1,420 (145) 148 (27) (68) (8) 11 1,260 55
Accrued liabilities 3 15 (1) 4 14 (1) 3 2 39 (84)
Employee vested benefits (2) 17 (3) 17 - -2 1 32 1
Due to other governments - (3) (1) 2 (1) - 27 - 24 -
Deposits - -- 52 2 - 160 (1) 213 -
Net pension liability (101) 84 (65) 12 30 33 (6) 4 (9) 21
Deferred outflows of resources (25) (107) (87) (104) (100) 2 (38) (2) (461) (66)
Deferred inflows of resources (4) 9 (26) (7) 9 2 1 - (16) 1
Other post employment benefits liability 34 104 46 59 68 2 15 2 330 44
Landfill closure/postclosure liability - - - - 668 - - - 668 -
Total adjustments 1,098 2,329 4,091 2,471 2,194 1,200 417 1,001 14,801 1,891
Net cash flows from (used for) operating activities 1,723$ (3,464)$ 5,746$ 2,696$ 2,097$ 923$ (8,711)$ (189)$ 821$ 3,884$
Noncash Investing, Capital, and
Financing Activities:
Contributions of capital assets from
government and others -$ -$ 922$ 1,524$ -$ 2,515$ -$ -$ 4,961$ 1,202$
Contributions of capital assets to
government and others -$ -$ 2,727$ -$ 1,042$ -$ -$ -$ 3,769$ 670$
Capital grants not yet received -$ 1,114$ -$ -$ 2$ -$ -$ 5$ 1,121$ -$
Operating grants not yet received -$ 5$ -$ -$ 2$ -$ 34$ 12$ 53$ -$
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, 2018
(amounts expressed in thousands)
40
Agency
Funds
Assets
Equity in pooled cash and investments 150$
Interest receivable 1
Total assets 151$
Liabilities
Accounts payable 12$
Due to agency 139
Total liabilities 151$
The notes to the financial statements are an integral part of this statement.
June 30, 2018
(amounts expressed in thousands)
CITY OF IOWA CITY
STATEMENT OF FIDUCIARY
ASSETS AND LIABILITIES
41
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
1. Accounting Policies
The City of Iowa City, Iowa, (the City) was incorporated April 6, 1853, and operates under the
Council/Manager form of government. The City provides a broad range of services to its citizens including
general government, public safety, streets, parks, and cultural facilities. It also operates an airport, a mass
transportation system, parking facilities, water treatment, wastewater treatment, storm water collection,
sanitation collection and disposal (including landfill operations) and a housing authority.
The financial statements of the City have been prepared in conformity with accounting principles generally
accepted in the United States of America (GAAP) as applied to governmental units. The Governmental
Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental
accounting and financial reporting principles. The more significant accounting policies of the City are
described below.
The Reporting Entity
For financial reporting purposes, the City includes all of its funds, organizations, agencies, boards,
commissions, and authorities. The City has also considered all potential component units for which it is
financially accountable, and other organizations for which the nature and significance of their relationship
with the City are such that exclusion would cause the City’s financial statements to be misleading or
incomplete. The Governmental Accounting Standards Board has set forth criteria to be considered in
determining financial accountability. These criteria include appointing a voting majority of an
organization’s governing body, and (1) the ability of the City to impose its will on that organization or (2)
the potential for the organization to provide specific benefits to, or impose specific financial burdens on the
City. There were no component units required to be included.
Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and the Statement of
Activities) report information on all of the non-fiduciary activities of the primary government.
Governmental activities, which normally are supported by taxes and intergovernmental revenues, are
reported separately from business-type activities, which rely to a significant extent on fees and charges for
support.
The Statement of 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.
42
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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 Other Shared Revenue and Grants Fund is used to account for revenue from various sources,
primarily road use tax monies from the State of Iowa and reimbursable programs funded by
federal and state grants.
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.
43
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
The Other Construction Fund accounts for the construction or replacement of other City general fixed
assets, such as administrative buildings with various funding sources, including general obligation
bonds, intergovernmental revenues, and contributions.
The 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.
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 Transit Fund is used to account for the operation and maintenance of the public transportation
system.
The Wastewater Treatment Fund is used to account for the operation and maintenance of the
wastewater treatment facility and sanitary sewer system.
The Water Fund is used to account for the operation and maintenance of the water system.
The Sanitation Fund is used to account for the operation and maintenance of the solid waste
collection system and landfill.
The Stormwater Fund is used to account for the operation and maintenance of the stormwater
utility system.
The Housing Authority Fund is used to account for the operations and activities of the City’s low
and moderate income housing assistance and public housing programs.
The City has one nonmajor enterprise fund, the Airport Fund is used to account for the operation and
maintenance of the airport facility.
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.
44
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the
City’s enterprise funds and of the City’s internal service funds are charges to customers for sales and
services. Operating expenses for enterprise funds and internal service funds include the cost of sales and
services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting
this definition are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the government’s policy to use
restricted resources first, then unrestricted resources as they are needed.
Uses of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue, expenditures and expenses, as appropriate, during the
reporting period. Actual results could differ from these estimates. Material estimates that are particularly
susceptible to significant change in the near-term relate to the determination of 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.
45
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Income from investments in all fund types and from charges for services in proprietary fund types is
recognized when earned. Licenses and permits, fines and forfeitures, fees and refunds, charges for services
(in governmental fund types), miscellaneous, and other revenues are recorded as revenue when received in
cash because they are generally not measurable until actually received.
Inventories
Inventories are recognized only in those funds in which they are material to the extent of affecting
operations. For the City, these are the Other Shared Revenue and Grants Fund, Transit Fund, Water Fund,
and the Equipment Maintenance Fund. Inventories of materials and supplies are determined by actual count
and priced on the FIFO method.
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 and OPEB expense and contributions
from the employer after the measurement date but before the end of the employer’s reporting period.
Bond Premiums and Discounts
Debt issued at a premium or discount is recorded net of the unamortized premium or discount. In the
governmental funds, premiums and discounts are recorded entirely as other financing sources or uses in the
year of issuance. In the proprietary funds and the government-wide statements, they are amortized over the
life of the bonds.
46
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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 and
OPEB related items.
47
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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 $20,830,854 in revenues and other
financing sources and by $86,333,581 in expenditures and other financing uses. Appropriations, as adopted
or amended, lapse at the end of the fiscal year.
48
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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, 2018 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 or other
short-term corporate debt; perfected repurchase agreements; Iowa Public Agency Investment Trust
(IPAIT); certain registered open–end management investment companies registered with the Securities &
Exchange Commission under the federal Investment Company Act of 1940; and warrants or improvement
certificates of a drainage district.
At June 30, 2018, the City had the following investments:
Fair
Investment Value Ma t urities
Federal Home Loan Bank Notes 10,385,215$ November 2018 to October 2022
Federal Home Loan Mortgage Corporation Notes 5,974,160 May 2019 to March 2023
United States Treasury Notes 8,491,315 July 2018 to April 2019
Federal National Mortgage Association 1,058,048 June 2019
Natixis NY Branch Commercial Paper 2,967,427 September 2018 to November 2018
John Deere Capital Corporation
Corporate Notes 997,690 October 2018
Toyota Motor Credit Corporation
Corporate Notes 1,989,100 February 2019
31,862,955$
49
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
The City uses the fair value hierarchy established by generally accepted accounting principles based on the
valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active
markets for identical assets. Level 2 inputs are significant other observable inputs. Level 3 inputs are
significant unobservable inputs.
The recurring fair value measurement for the Federal Home Loan Bank securities of $10,385,215, the
Federal Home Loan Mortgage Corporation securities of $5,974,160, the Federal National Mortgage
Association securities of $1,058,048 and the United States Treasury securities of $8,491,315 were
determined using the last reported sales price at current exchange rates (Level 1 inputs).
The fair value measurement for the Natixis NY Branch commercial paper of $2,967,427 was determined
using the last reported sales price at current exchange rates (Level 1 inputs).
The fair value measurements for the John Deere Capital Corporation corporate notes of $997,690 and the
Toyota Motor Credit Corporation corporate notes of $1,989,100 were 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 $14,047,707, 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.
50
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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.
3. Interfund Balances and Transfers
Interfund balances for the year ended June 30, 2018, consisted of the following:
Interfund balances at June 30, 2018, include advances due to/from other funds, which represent amounts
for construction loans and a revenue bond redemption loan. $1,423,385 of the $1,665,852 advance to the
Parking Fund is not expected to be repaid within the next year. $96,694 of the $110,893 advance to the
Other Shared Revenue and Grants Fund is not expected to be repaid within the next year.
Debt
Service Sanita t ion Total
Advances to:
Parking -$ 1,665,852$ 1,665,852$
Other Shared Revenue
and Grants 110,893 - 110,893
Total 110,893$ 1,665,852$ 1,776,745$
Advances from
51
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Interfund transfers for the year ended June 30, 2018, consisted of the following:
Transfers are used to move revenues and bond proceeds from the fund that State statutes or the budget
requires to collect them to the fund that the State statutes or the budget requires to expend them.
Capital Projects
Bridge, Street
Other Capital Projects and Traffic
Shared Revenue Employee Other Control Nonmajor
General and Grants Benefits Construction Construction Governmental
Transfer to:
General -$ 93,553$ 9,947,001$ 31,923$ -$ 18,356$
Other Shared Revenue
and Grants 650,093 - 427,642 - 13,941 -
Debt Service 20,052 - -256 - 1,064,028
Capital Projects
Other Construction 994,403 1,018,570 - - 20,986 17,082
Capital Projects
Bridge, Street and
Traffic Control Construction 8,338,836 3,212,990 - - - -
Nonmajor Governmental 133,935 202,104 - - - -
Transit 3,376,455 - - - - -
Wastewater Treatment 452 231,020 - 300,000 - -
Water 392 - - 87,810 952,848 -
Sanitation 1,324 - - - - -
Stormwater 249 - - 67,252 411,444 -
Housing Authority - - - - - 29,287
Nonmajor Enterprise 109,687 - - - - -
Internal Service 8,934 216,377 - 439,364 - -
Total Transfer to 13,634,812$ 4,974,614$ 10,374,643$ 926,605$ 1,399,219$ 1,128,753$
Transfer from
52
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Wastewater Housing Internal Total
Treatment Water Sanitation Stormwater Authority Service Transfer from
-$ -$ -$ -$ 46,779$ -$ 10,137,612$
- - - - - - 1,091,676
- - - - - - 1,084,336
1,622,867 500,000 486,141 300,000 - 1,453,180 6,413,229
2,085,761 215,467 860,954 700,000 - 188,961 15,602,969
- - - - - - 336,039
- - - - - - 3,376,455
- - - - - - 531,472
- - - - - - 1,041,050
- - - - - - 1,324
1,018,827 - 124,941 - - - 1,622,713
- - - - - 264 29,551
- - - - - - 109,687
- - 56,469 - - 480,516 1,201,660
4,727,455$ 715,467$ 1,528,505$ 1,000,000$ 46,779$ 2,122,921$ 42,579,773$
Transfer from
53
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
4. Capital Assets
Capital asset activity for the year ended June 30, 2018, was as follows:
Beginning
July 1, 2017
Acquisitions
and
Transfers
Disposals
and
Transfers
Balance
June 30, 2018
Governmental activities:
Capital assets, not being depreciated:
Land 29,778,881$ 1,115,078$ -$ 30,893,959$
Construction in progress 22,766,982 19,850,327 334,743 42,282,566
Total capital assets, not being depreciated 52,545,863 20,965,405 334,743 73,176,525
Capital assets, being depreciated:
Buildings 64,183,861 1,235,069 163,326 65,255,604
Improvements other than buildings 7,501,518 103,346 48,019 7,556,845
Machinery and equipment 44,456,239 4,745,142 5,344,321 43,857,060
Infrastructure 156,922,114 4,915,183 1,038,129 160,799,168
Total capital assets being depreciated 273,063,732 10,998,740 6,593,795 277,468,677
Less accumulated depreciation for:
Buildings 24,719,781 1,685,194 146,753 26,258,222
Improvements other than buildings 3,547,490 284,040 40,757 3,790,773
Machinery and equipment 27,770,324 3,461,091 4,653,360 26,578,055
Infrastructure 43,427,263 3,331,298 751,064 46,007,497
Total accumulated depreciation 99,464,858 8,761,623 5,591,934 102,634,547
Total capital assets, being depreciated, net 173,598,874 2,237,117 1,001,861 174,834,130
Governmental activities capital assets, net 226,144,737$ 23,202,522$ 1,336,604$ 248,010,655$
54
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Beginning
July 1, 2017
Acquisitions
and
Transfers
Disposals
and
Transfers
Balance
June 30, 2018
Business-type activities:
Capital assets, not being depreciated:
Land 30,737,360$ -$ 420,175$ 30,317,185$
Construction in progress 9,714,893 6,094,744 512,350 15,297,287
Total capital assets, not being depreciated 40,452,253 6,094,744 932,525 45,614,472
Capital assets, being depreciated:
Buildings 134,116,842 - - 134,116,842
Improvements other than buildings 10,888,774 273,123 5,395 11,156,502
Machinery and equipment 30,811,069 4,390,048 229,165 34,971,952
Infrastructure 307,426,024 3,969,414 174,260 311,221,178
Total capital assets being depreciated 483,242,709 8,632,585 408,820 491,466,474
Less accumulated depreciation for:
Buildings 60,819,791 3,441,770 - 64,261,561
Improvements other than buildings 6,548,221 392,926 4,586 6,936,561
Machinery and equipment 23,340,652 1,431,732 195,972 24,576,412
Infrastructure 97,920,877 7,602,806 112,346 105,411,337
Total accumulated depreciation 188,629,541 12,869,234 312,904 201,185,871
Total capital assets, being depreciated, net 294,613,168 (4,236,649) 95,916 290,280,603
Business-type activities capital assets, net 335,065,421$ 1,858,095$ 1,028,441$ 335,895,075$
Depreciation expense was charged to functions as follows:
Governmental activities:
Public safety 1,579,960$
Public works 3,829,983
Culture and recreation 2,890,681
Community and economic development 59,345
General government 401,654
Total depreciation expense - governmental activities 8,761,623$
Business-type activities:
Parking 1,267,743$
Transit 905,993
Wastewater treatment 4,435,712
Water 2,371,624
Sanitation 1,525,829
Stormwater 1,239,560
Housing authority 120,199
Nonmajor enterprise 1,002,574
Total depreciation expense - business-type activities 12,869,234$
55
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
5. Capital Lease Obligation
Last 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, $516,596
was included in depreciation expense. This lease agreement qualifies as a capital lease for accounting
purposes and, therefore, has been recorded at the present value of future minimum lease payments as of the
inception date.
The future minimum lease obligations and the net present value of these minimum lease payments as of
June 30, 2018, were as follows:
Fiscal Year Ending
June 30
Business-type
Activities
2019 1,021,221$
2020 1,021,221
2021 1,021,221
2022 1,021,221
2023 1,021,221
2024-2036 11,313,343
Total minimum lease payments 16,419,448
Less: amount representing interest (4,461,143)
Present value of minimum lease payments 11,958,305$
Changes in Capital Lease Obligation
Changes in the capital lease obligation for the year ended June 30, 2018, was as follows:
Due Within
July 1, 2017 Issues Retirements June 30, 2018 One Year
Business-type activities:14,482,714$ -$ 2,524,409$ 11,958,305$ 545,281$
56
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
6. Long Term Debt
Changes in Debt for Bonds
Bond debt activity for the year ended June 30, 2018, was as follows:
General Obligation Bonds
Various issues of general obligation bonds totaling $51,880,000 are outstanding as of June 30, 2018. The
bonds have interest rates ranging from 1.25% to 3.65% and mature in varying annual amounts ranging from
$740,000 to $2,100,000 per issue, with the final maturities due in the year ending June 30, 2028. Interest
and principal payments on all general obligation bonds, except tax abated portions recorded in the enterprise
funds, are accounted for through the Debt Service Fund.
Due Within
July 1, 2017 Issues Retirements June 30, 2018 One Year
Governmental activities:
General obligation bonds 51,645,000$ 11,995,000$ 11,760,000$ 51,880,000$ 9,335,000$
Plus: Unamortized
Premium 926,254 235,940 158,670 1,003,524 144,226
Total general obligation bonds 52,571,254 12,230,940 11,918,670 52,883,524 9,479,226
Revenue bonds 15,200,000 - 135,000 15,065,000 135,000
Less: Unamortized
Discounts 31,860 - 2,124 29,736 2,124
Total revenue bonds 15,168,140 - 132,876 15,035,264 132,876
67,739,394$ 12,230,940$ 12,051,546$ 67,918,788$ 9,612,102$
Business-type activities:
Revenue bonds 32,820,000 - 5,035,000 27,785,000 4,975,000
Plus: Unamortized
Premium 1,600,914 - 290,852 1,310,062 294,351
Total revenue bonds 34,420,914$ -$ 5,325,852$ 29,095,062$ 5,269,351$
57
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Annual debt service requirements to maturity for general obligation bonds are as follows:
Fiscal Year Ending
June 30 Principal Interest
2019 9,335,000$ 1,257,050$
2020 8,400,000 1,036,338
2021 7,585,000 819,135
2022 6,395,000 631,263
2023 5,520,000 492,013
2024-2028 14,645,000 882,450
Total 51,880,000$ 5,118,249$
Governmental Activities
Revenue Bonds
As of June 30, 2018, 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 $ 405,000 to $ 135,000 to
$ 2,085,000 $ 1,225,000 $ 965,000
Amount outstanding $ 16,010,000 $ 11,775,000 $ 15,065,000
58
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Revenue bond debt service requirements to maturity are as follows:
Fiscal Year Ending
June 30 Principal Interest P rincipal Interest
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 1,110,000 413,045 3,840,000 149,270
2024-2028 5,205,000 1,573,275 3,625,000 88,150
2029-2033 4,630,000 816,890 - -
2034-2038 2,595,000 157,200 - -
Total 15,065,000$ 4,760,550$ 27,785,000$ 2,571,843$
Governmental Activities Business-type Activities
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, 2018, the Wastewater Treatment Fund had net revenue of $6,559,000 and the
amount of principal and interest due was $4,336,000. In fiscal year ended June 30, 2018, the Water Fund
had net revenues of $2,889,000 and the amount of principal and interest due was $1,849,000.
59
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Summary of Bond Issues
General obligation and revenue bonds payable at June 30, 2018, are comprised of the following issues:
Date of Amount Interest Final Outstanding
Issue Issued Rates Maturity June 30, 2018
General Obligation Bonds:
Refunded Multi-Purpose and
Library Construction (1)June 2011 10,930,000 2.0 - 3.625 6/21 3,850,000
Multi-Purpose June 2012 9,070,000 2.0 - 2.25 6/22 3,865,000
Multi-Purpose July 2013 7,230,000 1.0 - 2.0 6/23 4,185,000
Refunded Multi-Purpose (2) June 2014 11,980,000 2.0 - 3.0 6/24 5,785,000
Multi-Purpose June 2015 7,785,000 2.0 - 2.25 6/25 5,655,000
Multi-Purpose June 2016 8,795,000 2.0 - 3.0 6/26 7,680,000
Multi-Purpose June 2017 9,765,000 2.0 - 2.5 6/27 8,865,000
Multi-Purpose June 2018 8,895,000 1.8 - 2.65 6/28 8,895,000
Taxable Multi-Purpose June 2018 3,100,000 2.35 - 2.6 6/20 3,100,000
Total General Obligation Bonds 51,880,000$
Date of Amount Interest Final Outstanding
Issue Issued Rates Maturity June 30, 2018
Revenue Bonds:
Refunded Wastewater
Treatment Bonds (3)Apr. 2010 15,080,000 3.0 - 4.0 7/20 3,940,000
Refunded Wastewater
Treatment Bonds (4)June 2016 9,360,000 3.0 - 4.0 7/21 7,520,000
Refunded Wastewater
Treatment Bonds (5)June 2017 4,550,000 2.0 - 5.0 7/22 4,550,000
Refunded Water Bonds (6)June 2012 4,950,000 1.5 - 2.1 7/22 2,595,000
Refunded Water Bonds (7)June 2016 3,650,000 1.5 - 5.0 7/24 3,270,000
Refunded Water Bonds (8)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 2,260,000
Taxable Urban Renewal Sept. 2016 12,805,000 3.0 6/36 12,805,000
Total Revenue Bonds 42,850,000$
94,730,000$
60
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
(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 December 2001 and April 2002 Wastewater Revenue Bonds.
(4)This bond issue refunded the October 2008 Wastewater Revenue Bond.
(5) This bond issue refunded the May 2009 Wastewater Revenue Bonds.
(6) This bond issue refunded the October 2002 Water Revenue Bonds.
(7) This bond issue refunded the October 2008 Water Revenue Bonds.
(8) 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, 2018, there were three series of Industrial Development Revenue Bonds outstanding, with
an aggregate principal amount payable of $32,063,059.
Debt Legal Compliance
Legal Debt Margin:
As of June 30, 2018, 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 $ 5,399,877
Utilities 94,582
Total valuation $ 5,494,459
Debt limit, 5% of total assessed valuation $ 274,723
Debt applicable to debt limit:
General obligation bonds 51,880
Urban renewal revenue bonds 15,065
Letters of credit 475
Other legal indebtedness (TIF rebates) 25,012
Total net debt applicable to limit 92,432
Legal debt margin $ 182,291
61
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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.
62
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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, 2018.
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 25.68% for the year ended June 30, 2018.
The City’s contributions to MFPRSI for the year ended June 30, 2018 was $2,758,801.
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, 2018.
Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions
At June 30, 2018, the City reported a liability of $21,398,334 for its proportionate share of the net pension
liability. The net pension liability was measured as of June 30, 2017, 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, 2017, the City’s proportion
was 3.648635% which was a decrease of .048493% from its proportions measured as of June 30, 2016.
63
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
For the year ended June 30, 2018, the City recognized pension expense of $3,155,702. At June 30, 2018,
the City reported deferred outflows of resources and deferred inflows of resources related to pensions from
the following sources:
$2,758,801 reported as deferred outflows of resources related to pensions resulting from City contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year
ended June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized in pension expense as follows:
Total
Change of assumptions
Deferred Outflows of
Resources
821,164$
1,818,397
Differences between expected and actual
experience
Deferred Inflows of
Resources
13,020$
243,042
-
876,772
207,083
-
385,959
Net difference between projected and actual
earnings on pension plan investments
Changes in proportion and differences between
City contributions and proportionate share of
contributions
City contributions subsequent to the measurement
date 2,758,801
6,482,217$ 642,021$
Year Ended
June 30, 2019
June 30, 2020
June 30, 2021
June 30, 2022
June 30, 2023
931,810
495,116$
1,915,916
(386,431)
124,984
Total
3,081,395$
64
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Actuarial Assumptions
The total pension liability in the June 30, 2017, 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, 2017 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 five years projection of future mortality improvement with Scale BB.
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 3.3 %
Emerging Markets 9.0
Emerging Markets Debt 6.3
Large Cap 5.5
Small Cap 5.8
Master Limited Partnerships (MLP)9.0
International Large Cap 7.3
Tactical Asset Allocation 6.4
Private Equity 9.0
Private Non-Core Real Estate 8.0
Private Core Real Estate 6.0
Long-Term Expected
Real Rate of Return
65
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Discount Rate
The discount rate used to measure the total pension liability was 7.5%. The projection of cash flows used
to determine the discount rate assumed that plan member contributions will be made at the current
contribution rate and the City contributions will be made at rates equal to the difference between actuarially
determined rates and the member rate. Based on those assumptions, the pension plan’s fiduciary net
position was projected to be available to make all projected future benefit payments of current plan
members. Therefore, the long-term expected rate of return on pension plan investments was applied to all
periods of projected benefit payments to determine the total pension liability.
Sensitivity of City’s Proportionate Share of the Net Pension Liability to Changes in the Discount
Rate
The following presents the City’s proportionate share of the net pension liability calculated using the
discount rate of 7.5%, as well as what the city’s proportionate share of the net pension liability would be if
it were calculated using a discount rate that is 1% lower (6.5%) or 1% higher (8.5%) than the current rate.
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, 2018, 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:35,166,874$ 21,398,334$ 9,946,426$
66
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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.
67
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
In fiscal year 2018, pursuant to the required rate, Regular members contributed 5.95% of pay and the City
contributed 8.93% for a total rate of 14.88%.
The City’s total contributions to IPERS for the year ended June 30, 2018 were $2,696,017.
Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions
At June 30, 2018, the City reported a liability of $26,432,957 for its proportionate share of the net pension
liability. The net pension liability was measured as of June 30, 2017, 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, 2017, the City’s proportion
was .3968158% which was an increase of .000546% from its proportions measured as of June 30, 2016.
For the year ended June 30, 2018, the City recognized pension expense of $3,283,592. At June 30, 2018,
the City reported deferred outflows of resources and deferred inflows of resources related to pensions from
the following sources:
Total
Differences between expected and actual
experience 242,681$ 229,022$
Deferred Inflows of
Resources
Deferred Outflows of
Resources
1,396,889$
891,786
-
Change of assumptions 4,592,828 -
Net difference between projected and actual
earnings on pension plan investments - 276,081
Changes in proportion and differences between
City contributions and proportionate share of
contributions 23,898
City contributions subsequent to the measurement
date 2,696,017
7,555,424$
68
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
$2,696,017 reported as deferred outflows of resources related to pensions resulting from City contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year
ended June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized in pension expense as follows:
Actuarial Assumptions
The total pension liability in the June 30, 2017, actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement:
The actuarial assumptions used in the June 30, 2017 valuation were based on the results of actuarial
experience study dated March 24, 2017.
Mortality rates were based on the RP-2000 Mortality Table for Males or Females, as appropriate, with
adjustments for mortality improvements based on Scale AA.
Year Ended
June 30, 2019
June 30, 2020
June 30, 2021
June 30, 2022
June 30, 2023
1,032,975
99,731
314,293
Total
287,057$
1,728,462
3,462,518$
Rate of inflation 2.60% per annum
(effective June 30, 2017)
Salary increases 3.25 to 16.25%, average, including inflation. Rates vary by
(effective June 30, 2017)membership group.
(effec tive June 30, 2017)expense, including inflation
3.25% per annum based on 2.60% inflation and 0.65%
(effective June 30, 2017)real wage inflation
7.00%, net of pension plan investment
Wage growth
Investment rate of return
69
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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 7.0%. The projection of cash flows used
to determine the discount rate assumed employee contributions will be made at the contractually required
rate and that the contributions from the City will be made at contractually required rates, actuarially
determined. Based on those assumptions, the pension plan’s fiduciary net position was projected to be
available to make all projected future benefit payments to current active and inactive employees. Therefore,
the long-term expected rate of return on pension plan investments was applied to all periods of projected
benefit payments to determine the total pension liability.
Sensitivity of City’s Proportionate Share of the Net Pension Liability to Changes in the Discount
Rate
The following presents the City’s proportionate share of the net pension liability calculated using the
discount rate of 7.0%, as well as what the city’s proportionate share of the net pension liability would be if
it were calculated using a discount rate that is 1% lower (6.0%) or 1% higher (8.0%) than the current rate.
Asset Class
Core Plus Fixed Income 27.0 %2.25 %
Domestic Equity 24.0 6.25
International Equity 16.0 6.71
Private Equity 11.0 11.15
Private Real Assets 7.5 4.18
Public Real Assets 7.0 3.27
Public Credit 3.5 3.46
Private Credit 3.0 4.25
Cash 1.0 (0.31)
Total 100.0 %
Long-Term Expected
Real Rate of ReturnTarget Allocation
1% Decrease
(6.0%)
Discount Rate
(7.0%)
1% Increase
(8.0%)
City's proportionate share of
the net pension liability:43,550,909$ 26,432,957$ 12,050,589$
70
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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, 2018, 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, 2018, was as follows:
Due Within
July 1, 2017 Issues Retirements June 30, 2018 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, 2018, was as follows:
Due Within
July 1, 2017 Issues Retirements June 30, 2018 One Year
Governmental activities: $ 2,240,847 1,251,119$ 1,251,482$ 2,240,484$ 1,252,770$
Business-type activities: $ 691,941 436,353$ 401,049$ 727,245$ 424,180$
71
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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, 2018, is $9,259,218,
which is based on 55.68% usage (filled) of the landfill and is included in accrued liabilities within the
Sanitation Fund. It is estimated that an additional amount of approximately $7,370,124 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, 2018, was determined by a licensed professional
engineer and approximated at $16,629,342. 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,
2018. 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, 2018, the Sanitation Fund had $13,520,704 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, 2018, was as follows:
Due Within
July 1, 2017 Issues Retirements June 30, 2018 One Year
Business-type activities: $ 8,591,189 $ 668,029 -$ $ 9,259,218 -$
72
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Changes in Long-Term Liabilities – Other Postemployment Benefits (OPEB)
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. Group insurance benefits are established
under Iowa Code Chapter 509A.13. No assets are accumulated in a trust that meets the criteria in paragraph
4 of GASB Statement No. 75.
All full-time employees who retire or terminate/resign and their eligible dependents are offered the
following post-employment benefit options:
Health insurance and dental insurance – The option of continuing with the City’s health insurance plan
at the individual’s expense. These benefits cease upon Medicare eligibility.
Life insurance – The option of converting the employee’s City-paid policy to an individual policy at
the individual’s expense with the City’s life insurance carrier.
Long-term disability – For employees who terminate/resign and have been on the plan for a minimum
of one year, the option of converting the employee’s City-paid group policy to a personal policy at the
individual’s expense with the City’s long-term disability insurance carrier.
The above options, while at the individual’s own expense, are included within the City’s overall insurance
package, which results in an implicit rate subsidy and an OPEB liability.
Retired participants must be age 55 or older at retirement. At June 30, 2018, the following employees were
covered by the benefit terms:
Total OPEB Liability: The City’s total OPEB liability of $7,589,740 was measured as of June 30, 2018,
and was determined by an actuarial valuation as of that date.
Inactive employees or beneficiaries currently receiving benefit payments 66
Active employees 598
Total 664
73
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Actuarial Assumptions: The total OPEB liability in the June 30, 2018 actuarial valuation was determined
using the following actuarial assumptions and the entry age normal actuarial cost method, applied to all
periods included in the measurement.
Discount Rate: The discount rate used to measure the total OPEB liability was 3.87% which reflects the
index rate for 20-year tax-exempt general obligation municipal bonds with an average rating of AA/Aa or
higher as of the measurement date.
Mortality rates are from the SOA RPH-2017 total dataset mortality table fully generational using Scale MP-
2017. Annual retirement probabilities are based on varying rates by age and turnover probabilities mirror
those used by IPERS and MFPRSI.
The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial
experience study with dates corresponding to those listed above.
Changes of assumptions reflect a change in the discount rate from 3.58% in fiscal year 2017 to 3.87% in
fiscal year 2018.
Rate of inflation 2.60% per annum
(effective June 30, 2018)
Rates of salary increases 3.25% per annum based on 2.60% inflation and 0.65%
(effective June 30, 2018)real wage inflation
Discount rate 3.87%, compounded annually, including inflation
(effective June 30, 2018)
Healthcare cost trend rate 9.00% initial rate decreasing by .5% annually to an ultimate
(effective June 30, 2018)rate of 5.00%
Total OPEB
Liability
Total OPEB liability beginning of year, as restated 6,412,170$
Changes for the year:
Service Cost 502,071
Interest 244,435
Difference between expected and actual
experience (376,818)
Changes in assumptions 982,333
Benefit payments (174,451)
Net changes 1,177,570
Total OPEB liability end of year 7,589,740$
74
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Sensitivity of the City’s Total OPEB Liability to Changes in the Discount Rate: The following presents
the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were
calculated using a discount rate that is 1% lower (2.87%) or 1% higher (4.87%) than the current discount
rate.
Sensitivity of the City’s Total OPEB Liability to Changes in the Healthcare Cost Trend Rate: The
following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would
be if it were calculated using healthcare cost trend rate that is 1% lower (8.00%) or 1% higher (10.00%)
than the current healthcare cost trend rate.
OPEB Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to
OPEB: For the year ended June 30, 2018, the City recognized OPEB expense of $632,606. At June 30,
2018, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB
from the following resources:
1% Decrease
(2.87%)
Discount Rate
(3.87%)
1% Increase
(4.87%)
Total OPEB liability 8,156,991$ 7,589,740$ 7,053,281$
1% Decrease
(8.00%)
Healthcare Cost
Trend Rate
(9.00%)
1% Increase
(10.00%)
Total OPEB liability 6,754,127$ 7,589,740$ 8,575,140$
Total 884,100$ 339,136$
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Differences between expected and actual
experience -$ 339,136$
Change of assumptions 884,100 -
75
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
The amount reported as deferred outflows of resources and deferred inflows of resources related to OPEB
will be recognized as OPEB expense as follows:
9. Short Term Debt
During FY18, the City entered into additional multiple short term loans totaling $480,000 and repaid
multiple short term loans totaling $668,000. The outstanding loans mature one year from the date of the
loan and bear interest rates ranging from 4.75% to 5.00%. The loans were used to fund the acquisition and
rehabilitation of single family homes as part of the UniverCity Neighborhood Partnership Program
(UniverCity). UniverCity is a cooperative effort of the City of Iowa City and the University of Iowa
dedicated to ensuring that the University of Iowa Campus and surrounding neighborhoods remain vital,
safe, affordable, and attractive places to live and work for both renters and homeowners. The short term
loans have been repaid and will be repaid with the proceeds from the sale of the rehabilitated homes.
10. Fund Equity
Fund balances for the governmental funds are reported in classifications that comprise a hierarchy based
on the extent to which the government honors constraints on the specific purposes for which amounts in
those funds can be spent.
• The Nonspendable classification contains amounts not in spendable form or legally or contractually
required to be maintained intact.
• Restricted amounts contain restraint on their use externally imposed by creditors, grantors,
contributors, or laws or regulations of other governments; or imposed by law through constitutional
provisions or enabling legislation.
Year Ended
June 30, 2019
June 30, 2020
June 30, 2021
June 30, 2022
June 30, 2023
Thereafter
60,551
60,551$
60,551
60,551
60,551
242,209
544,964$
Total
Changes in Short-Term Liabilities - Notes Payable
Notes Payable activity for the year ended June 30, 2018, was as follows:
Due Within
July 1, 2017 Issues Retirements June 30, 2018 One Year
Governmental activities: $ 663,000 480,000$ 668,000$ 475,000$ 475,000$
76
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
• 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.
Components of Fund Balance
Bridge,
Other Street and
Shared Traffic Other
Revenue and Employee Other Control Debt Governmental
General Grants Benefits Construction Construction Service Funds Total
Nonspendable:
Perpetual Care Principal 69,000$ -$ -$ -$ -$ -$ -$ 69,000$
Inventory - 81,070 - - - - - 81,070
Prepaid Items 724,393 - 84,162 - - - - 808,555
Total Nonspendable 793,393 81,070 84,162 - - - - 958,625
Restricted for:
Public Safety 418,408 - - - - - - 418,408
Debt Service - - - - - 8,608,613 - 8,608,613
GO Bond Projects - - - 26,752,495 15,097,510 - - 41,850,005
State Funding - 3,893,383 - - - - - 3,893,383
Grant Agreement - 3,968 - - - - 3,831,389 3,835,357
Affordable Housing - 1,208,851 - - - - - 1,208,851
Economic Development - - - - - - 1,563,211 1,563,211
Notes Receivable 1,275,601 - - - - - - 1,275,601
Property Held for Resale 86,800 - - - - - - 86,800
Public Safety Employee
Benefits - - 2,762,916 - - - - 2,762,916
Other Restricted 161,013 49,156 - - - - 262,064 472,233
Total Restricted 1,941,822 5,155,358 2,762,916 26,752,495 15,097,510 8,608,613 5,656,664 65,975,378
Committed to:
Emergency Fund 4,961,882 - - - - - - 4,961,882
Total Committed 4,961,882 - - - - - - 4,961,882
Assigned to:
Library Programs 898,683 - - - - - - 898,683
Senior Center Programs 2,876 - - - - - - 2,876
Replacement and Acquisition
Reserves 413,371 - - - - - - 413,371
Other Assigned 123,065 - - - - - - 123,065
Total Assigned 1,437,995 - - - - - - 1,437,995
Unassigned:28,516,324 - - - - - (37,619) 28,478,705
Total Fund Balances 37,651,416$ 5,236,428$ 2,847,078$ 26,752,495$ 15,097,510$ 8,608,613$ 5,619,045$ 101,812,585$
77
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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, 2018 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
thirty fiscal years. The operating funds pay annual premiums to the Loss Reserve Fund. Accumulated
monies in the Loss Reserve Fund are available to cover the self-insured retention amounts and any
uninsured losses.
The Housing Authority Fund is insured under a separate policy with the Assisted Housing Risk
Management Association. The remaining funds participate in the Loss Reserve Fund. The funds make
payments to the Loss Reserve Fund based on actuarial estimates of the amounts needed to pay prior- and
current-year claims and to establish a reserve for catastrophic losses. The Fund’s accrued liabilities balance
includes a claims liability at June 30, 2018 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, 2018
and 2017 are as follows:
Current-Year
Beginning-of- Claims and Balance at
Fiscal-Year Changes in Claim Fiscal
Liability Estimates Payments Year-End
2016 – 2017 $ 2,489,000 $ 706,000 $ 906,000 $ 2,289,000
2017 – 2018 2,289,000 1,309,000 1,425,000 2,173,000
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 $9,980,032. 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, 2018 and 2017 are as follows:
Current-Year
Beginning-of- Claims and Balance at
Fiscal-Year Changes in Claim Fiscal
Liability Estimates Payments Year-End
2016 – 2017 $ 350,000 $ 7,356,000 $ 7,321,000 $ 385,000
2017 – 2018 385,000 7,893,000 7,868,000 410,000
78
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
12. Commitments and Contingencies
Contractual Commitments
The total outstanding contractual commitments as of June 30, 2018 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 $28,331,453 exist, of which $499,747 is expected to be paid in the next fiscal year. These items
are expensed in the period in which they are paid. There were no payments made in the current fiscal year.
No liability is recognized due to the fact that the agreements are conditional and the payments are to be
funded by future property taxes receivable on the project.
Project Amount
Bridge, street and traffic Paving and Bridge Construction,
control cons truction Engineering Design and Consulting 10,616,901$
Other construction Public Works & Culture and Recreation Construction 8,310,930
Parking Parking Facility Restoration Repair 274,726
Wastewater Sewer Construction & Riverfront Crossings Park 949,396
Water Water Construction & Water Plant Computer System 612,033
Sanitation Landfill Cell Reconstruction & Road Improvements 1,041,174
Airport Viewing Area Remodel & North T-Hangar Restroom 29,198
Stormwater Stormwater System Improvements & Storm Sewer 4,681
Replacements
21,839,039$
Fund
79
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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
Governmental Accounting Standards Board Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions (OPEB), was implemented during fiscal year 2018. The
revised requirements establish new financial reporting requirements for state and local governments which
provide their employees with OPEB benefits, including additional note disclosure and required
supplementary information. In addition, GASB Statement No. 75 requires a state or local government
employer to use the entry age normal actuarial cost method, and requires deferred outflows of resources
and deferred inflows of resources which arise from other types of events related to OPEB to be recognized.
During the transition year, as permitted, beginning balances for deferred outflows of resources and deferred
inflows of resources are not reported. Beginning net position for governmental and business type activities
was restated to retroactively report the change in valuation of the beginning total OPEB liability, as follows:
Net position June 30,
2017, as previously
reported
Net OPEB obligation
measured under
previous standards
Total OPEB liability
at June 30, 2017
Net position July 1,
2017, as restated
Governmental 223,433$ 3,563$ (4,386)$ 222,610$
Internal Service 24,158 62 (237) 23,983
Total Governmental Activities 247,591$ 3,625$ (4,623)$ 246,593$
Parking 22,065$ 162$ (180)$ 22,047$
Transit 19,696 337 (561) 19,472
Wastewater Treatment 137,880 187 (247) 137,820
Water 70,494 201 (324) 70,371
Sanitation 31,550 259 (371) 31,438
Stormwater 50,545 1 (9) 50,537
Housing Authority 8,376 75 (86) 8,365
Airport 27,714 (3) (9) 27,702
Internal Service 15,494 - - 15,494
Total Business Type Activities 383,814$ 1,219$ (1,787)$ 383,246$
80
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
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.
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, 2018, $139,648 of property tax was diverted from the City under the urban
renewal and economic development projects.
Tax Abatements of Other Entities
Property tax revenues of the City were not reduced by any amount for the year ended June 30, 2018 under
agreements entered into by any entities.
16. New Governmental Accounting Standards Board (GASB) Standards
The Governmental Accounting Standards Board (GASB) has issued six statements not yet implemented by
the City. The statements, which might impact the City’s financial statements, are as follows:
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. 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.
Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct
Placements, will be effective for fiscal year ending June 30, 2019. The objective of this Statement is to
improve the information that is disclosed in notes to government financial statements related to debt,
including direct borrowings and direct placements.
81
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2018
Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, will be
effective for fiscal year ending June 30, 2020. The objectives of this Statement are to enhance the
relevance and comparability of information about capital assets and the cost of borrowing for a reporting
period and to simplify accounting for interest cost incurred before the end of a construction period.
Statement No. 90, Majority Equity Interests – an amendment of GASB Statements No. 14 and No. 61 will
be effective for fiscal year ending June 30, 2020. The objectives of this Statement are to improve the
consistency and comparability of reporting a government’s majority equity interest in a legally separate
organization and to improve the relevance of financial statement information for certain component units.
The City’s management has not yet determined the effect these statements will have on the City’s financial
statements.
82
83
Governmental
Fund Types Enterprise Fund
Actual Budgetary Types Actual Total Actual
Basis Budgetary Basis Budgetary Basis
Revenues:
Property taxes 56,524$ -$ 56,524$
Delinquent property taxes 1 - 1
Tax increment financing taxes 2,459 - 2,459
Other city taxes 2,767 - 2,767
Special assessments - - -
Licenses and permits 2,734 9 2,743
Intergovernmental 15,981 16,905 32,886
Charges for services 5,465 40,898 46,363
Use of money and property 1,887 2,377 4,264
Miscellaneous 3,952 570 4,522
Total revenues 91,770 60,759 152,529
Expenditures/Expenses:
Public safety 23,915 - 23,915
Public works 8,801 - 8,801
Health and social services 293 - 293
Culture and recreation 13,969 - 13,969
Community and economic development 7,436 - 7,436
General government 8,525 - 8,525
Debt service 13,470 - 13,470
Capital outlay 33,751 - 33,751
Business-type - 76,609 76,609
Total expenditures/expenses 110,160 76,609 186,769
Excess (deficiency) of revenues over
(under) expenditures/expenses (18,390) (15,850) (34,240)
Other financing sources and uses, net 13,774 2,512 16,286
Net change in fund balances (4,616) (13,338) (17,954)
Balances, beginning of year 101,081 110,292 211,373
Balances, end of year 96,465$ 96,954$ 193,419$
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, 2018
(dollar amounts expressed in thousands)
BUDGETARY BASIS
84
Final to Actual
Variance -
Positive
Original Final (Negative)
56,458$ 56,458$ 66$
- - 1
2,334 2,455 4
2,720 2,778 (11)
1 1 (1)
1,867 1,867 876
29,463 35,413 (2,527)
46,032 46,457 (94)
2,331 2,340 1,924
3,808 4,837 (315)
145,014 152,606 (77)
24,426 24,605 690
9,703 10,134 1,333
300 300 7
14,280 14,427 458
8,835 10,781 3,345
9,544 9,772 1,247
14,256 13,564 94
32,530 77,563 43,812
59,456 86,499 9,890
173,330 247,645 60,876
(28,316) (95,039) 60,799
17,478 18,698 (2,412)
(10,838) (76,341) 58,387$
133,730 211,373
122,892$ 135,032$
Budgeted Amounts
85
Accrual Modified Accrual
Budget Basis Adjustments Basis
Revenues 91,770$ (4,537)$ 87,233$
Expenditures 110,160 (3,759) 106,401
Net (18,390) (778) (19,168)
Other financing sources and uses, net 13,774 823 14,597
Beginning Fund Balances 101,081 5,300 106,381
Ending Fund Balances 96,465$ 5,345$ 101,810$
Accrual Accrual
Budget Basis Adjustments Basis
Revenues 60,759$ 1,817$ 62,576$
Expenditures 76,609 (18,763) 57,846
Net (15,850) 20,580 4,730
Other financing sources and uses, net 2,512 (1,609) 903
Beginning Fund Balances 110,292 257,460 367,752
Ending Fund Balances 96,954$ 276,431$ 373,385$
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, 2018
(dollar amounts expressed in thousands)
86
City of Iowa City, Iowa
Note to Required Supplementary Information - Budgetary Reporting
For the Year Ended June 30, 2018
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 $7,592,000 and expenditures by
$74,315,000. The budget amendments were primarily due to changes in the breadth and timing of capital
improvement projects, which the City budgets in full during the initial year of the projects and amends
future year budgets for carryover.
87
88
2018 2017 2016 2015
City's proportion of the net pension liability 3.648635%3.697128%3.704972%3.778137%
City's proportionate share of the net pension liability 21,398$ 23,117$ 17,406$ 13,696$
City's covered payroll 10,347 10,019 9,716 9,648
City's proportionate share of the net pension liability
as a percentage of its covered payroll 206.80%230.73%179.15%141.96%
Plan fiduciary net position as a percentage of the
total pension liability 80.60%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 Four Years*
(amounts expressed in thousands)
89
2018 2017 2016 2015
Statutorily required contributions 2,679$ 2,682$ 2,782$ 2,955$
Contributions in relation to the
statutorily required contribution (2,679) (2,682) (2,782) (2,955)
Contribution deficiency (excess)-$ -$ -$ -$
City's covered payroll 10,334$ 10,347$ 10,019$ 9,716$
Contributions as a percentage of
covered payroll 25.92%25.92%27.77%30.41%
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)
90
2014 2013 2012 2011 2010 2009
2,906$ 2,383$ 2,277$ 1,654$ 1,336$ 1,425$
(2,906) (2,383) (2,277) (1,654) (1,336) (1,425)
-$ -$ -$ -$ -$ -$
9,648$ 9,122$ 9,197$ 8,310$ 7,860$ 7,601$
30.12%26.12%24.76%19.90%17.00%18.75%
91
Changes of benefit terms:
There were no significant changes of benefit terms.
Changes of assumptions:
The 2017 valuation added five years projection of future mortality improvement with Scale BB.
The 2016 valuation changed postretirement mortality rates to the RP-2000 Blue Collar Combined
Healthy Mortality Table with males set-back two years, females set-forward one year and disabled
individuals set-forward one year (male only rates), with no projection of future mortality improvement.
The 2015 valuation phased in the 1994 Group Annuity Mortality Table for postretirement mortality. This
resulted in weighting of 1/12 of the 1971 Group Annuity Mortality Table and 11/12 of the 1994 Group
Annuity Morality Table.
The 2015 valuation phased in the 1994 Group Annuity Mortality Table for postretirement mortality. This
resulted in weighting of 2/12 of the 1971 Group Annuity Mortality Table and 10/12 of the 1994 Group
Annuity Morality Table.
City of Iowa City, Iowa
Notes to Required Supplementary Information - Pension Liability
Municipal Fire and Police Retirement System of Iowa
Year ended June 30, 2018
92
2018 2017 2016 2015
City's proportion of the net pension liability 0.3968158%0.3962696%0.4159256%0.4378904%
City's proportionate share of the net pension liability 26,433$ 24,938$ 20,549$ 17,366$
City's covered payroll 29,619 28,448 28,495 28,654
City's proportionate share of the net pension liability
as a percentage of its covered payroll 89.24%87.66%72.11%60.61%
Plan fiduciary net position as a percentage of the
total pension liability 82.21%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 Four Years*
(amounts expressed in thousands)
93
2018 2017 2016 2015
Statutorily required contributions 2,696$ 2,645$ 2,540$ 2,545$
Contributions in relation to the
statutorily required contribution (2,696) (2,645) (2,540) (2,545)
Contribution deficiency (excess)-$ -$ -$ -$
City's covered payroll 30,190$ 29,619$ 28,448$ 28,495$
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
94
2014 2013 2012 2011 2010 2009
2,559$ 2,442$ 2,327$ 1,877$ 1,780$ 1,659$
(2,559) (2,442) (2,327) (1,877) (1,780) (1,659)
-$ -$ -$ -$ -$ -$
28,654$ 28,170$ 28,833$ 27,013$ 26,764$ 26,133$
8.93%8.67%8.07%6.95%6.65%6.35%
95
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% per year measured from the member’s first
unreduced retirement age to a 6% reduction for each year of retirement before age 65.
Changes of assumptions:
The 2017 valuation implemented the following refinements as a result of an experience
study dated March 24, 2017:
• Decreased the inflation assumption from 3.00% to 2.60%.
• Decreased the assumed rate of interest on member accounts from 3.75% to 3.5%
per year.
• Decreased the discount rate from 7.50% to 7.00%.
• Decreased the wage growth assumption from 4.00% to 3.25%.
• Decreased the payroll growth assumption from 4.00% to 3.25%.
The 2014 valuation implemented the following refinements as a result of a quadrennial
experience study:
• Decreased the inflation assumption from 3.25 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.
City of Iowa City, Iowa
Notes to Required Supplementary Information - Pension Liability
Iowa Public Employees' Retirement System
Year ended June 30, 2018
96
• 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.
97
2018
Service Cost 502$
Interest 245
Difference between expected and actual experience (377)
Changes in assumptions 982
Benefit payments (174)
Net change in total OPEB liability 1,178
Total OPEB liability beginning of year, as restated 6,412
Total OPEB liability end of year 7,590$
City's covered-employee payroll 40,524$
Total OPEB liability as a percentage of
covered-employee payroll 18.73%
Note: GASB Statement No. 75 requires ten years of information to be presented in this table. However, until a full
10-year trend is compiled, the City will present information for those years for which information is available.
Changes of benefit terms:
There were no significant changes of benefit terms.
Changes of assumptions:
Changes in assumptions and other inputs reflect the effects of changes in the discount rate each period. The
following are the discount rates used in each period.
Year ended June 30, 2018 3.87%
Year ended June 30, 2017 3.58%
The payroll growth rate, turnover rate and retirement rate assumptions were updated for IPERS employees based
on the Iowa Public Employees' Retirement System July 1, 2017 Acturial Valuation Report. The same rates for
MFPRSI employees were updated based on the Municipal Fire and Police Retirement System of Iowa July 1, 2017
Actuarial Valuation Report.
The mortaility table has been updated from SOA RPH-2015 Total Dataset Mortality Table fully generational using
Scale MP-2015 to SOA RPH-2017 Total Dataset Mortality Table fully generational using Scale MP-2017.
City of Iowa City, Iowa
Required Supplementary Information - Schedule of Changes in the City's Total OPEB Liability, Related Ratios and Notes
For the Current Year
(amounts expressed in thousands)
98
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Special Revenue Funds account for revenues derived from specific sources that are required to be accounted
for as separate funds. The funds in this category and their purpose are as follows:
Economic Development Fund – accounts for revenue and expenditures of economic development
activities.
Community Development Block Grant Fund – accounts for revenue from the U.S. Department of
Housing and Urban Development’s Community Development Block Grant programs.
Metropolitan Planning Organization of Johnson County Fund – accounts for the financial activities of
the metropolitan/rural cooperative planning organization.
99
Metropolitan
Community Planning
Development Organization
Economic Block of Johnson
Development Grant County Total
Assets
Equity in pooled cash and investments 1,845$ 181$ 234$ 2,260$
Receivables:
Property tax 371 - - 371
Interest 5 - 1 6
Notes - 3,666 - 3,666
Due from other governments - 56 52 108
Total assets 2,221$ 3,903$ 287$ 6,411$
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable 334$ 36$ 12$ 382$
Accrued liabilities - 10 13 23
Total liabilities 334 46 25 405
Deferred inflows of resources:
Unavailable revenues:
Succeeding year property taxes 362 - - 362
Grants - 26 - 26
Total deferred inflows of resources 362 26 - 388
Fund balances:
Restricted 1,563 3,831 262 5,656
Unassigned (38) - - (38)
Total fund balances 1,525 3,831 262 5,618
Total liabilities, deferred inflows
of resources and fund balances 2,221$ 3,903$ 287$ 6,411$
Special Revenue
CITY OF IOWA CITY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2018
(amounts expressed in thousands)
100
Metropolitan
Community Planning
Development Organization
Economic Block of Johnson
Development Grant County Total
Revenues
Property taxes 2,782$ -$ -$ 2,782$
Intergovernmental 31 1,038 311 1,380
Use of money and property 15 34 3 52
Miscellaneous - 42 6 48
Total revenues 2,828 1,114 320 4,262
Expenditures
Current:
Community and economic development 747 1,107 591 2,445
Excess (deficiency) of revenues over
(under) expenditures 2,081 7 (271) 1,817
Other Financing Sources (Uses)
Transfers in 60 - 276 336
Transfers out (1,098) (31) - (1,129)
Total other financing sources
and (uses)(1,038) (31) 276 (793)
Net change in fund balances 1,043 (24) 5 1,024
Fund Balances, Beginning 482 3,855 257 4,594
Fund Balances, Ending 1,525$ 3,831$ 262$ 5,618$
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, 2018
(amounts expressed in thousands)
101
102
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.
103
Equipment Central Loss Information
Maintenance Services Reserve Technology Total
Assets
Current assets:
Equity in pooled cash and investments 13,700$ 729$ 15,147$ 2,916$ 32,492$
Receivables:
Accounts and unbilled usage - - 95 - 95
Interest 112 4 109 17 242
Due from other governments 51 - - - 51
Inventories 521 - - - 521
Total current assets 14,384 733 15,351 2,933 33,401
Noncurrent assets:
Capital assets:
Land 45 - - - 45
Buildings 1,298 - - 189 1,487
Improvements other than buildings 50 - - 50
Machinery and equipment 19,941 133 19 1,655 21,748
Infrastructure - - - 2,101 2,101
Accumulated depreciation (12,191) (73) (19) (1,278) (13,561)
Construction in progress 83 - -253 336
Total noncurrent assets 9,226 60 - 2,920 12,206
Total assets 23,610 793 15,351 5,853 45,607
Deferred Outflows of Resources
Pension related deferred outflows 185 6 38 186 415
OPEB related deferred outflows 17 1 1 13 32
Total deferred outflows of resources 202 7 39 199 447
Liabilities
Current liabilities:
Accounts payable 223 6 215 97 541
Accrued liabilities 36 1 2,589 36 2,662
Employee vested benefits 43 2 2 17 64
Total current liabilities 302 9 2,806 150 3,267
Noncurrent liabilities:
Employee vested benefits 33 1 2 14 50
Net pension liability 643 21 134 620 1,418
Other post employment benefits liability 146 11 11 113 281
Total noncurrent liabilities 822 33 147 747 1,749
Total liabilities 1,124 42 2,953 897 5,016
Deferred Inflows of Resources
Pension related deferred inflows 34 1 7 33 75
OPEB related deferred inflows 7 1 1 5 14
41 2 8 38 89
Net Position
Net investment in capital assets 9,226 60 - 2,920 12,206
Unrestricted 13,421 696 12,429 2,197 28,743
Total net position 22,647$ 756$ 12,429$ 5,117$ 40,949$
(amounts expressed in thousands)
CITY OF IOWA CITY
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
June 30, 2018
104
Equipment Central Loss Information
Maintenance Services Reserve Technology Total
Operating Revenues:
Charges for services 6,495$ 219$ 10,313$ 2,257$ 19,284$
Total operating revenues 6,495 219 10,313 2,257 19,284
Operating Expenses:
Personal services 1,054 39 222 1,002 2,317
Commodities 1,707 3 58 490 2,258
Services and charges 559 116 9,805 352 10,832
3,320 158 10,085 1,844 15,407
Depreciation 1,619 21 - 244 1,884
Total operating expenses 4,939 179 10,085 2,088 17,291
Operating income (loss)1,556 40 228 169 1,993
Nonoperating Revenues:
Gain on disposal of capital assets 232 - - (262) (30)
Interest income 179 10 204 37 430
Total nonoperating revenues 411 10 204 (225) 400
Income (loss) before transfers 1,967 50 432 (56) 2,393
Transfers in 706 - - 496 1,202
Transfers out (1,430) (504) - (189) (2,123)
Change in net position 1,243 (454) 432 251 1,472
Net Position, Beginning, as restated 21,404 1,210 11,997 4,866 39,477
Net Position, Ending 22,647$ 756$ 12,429$ 5,117$ 40,949$
(amounts expressed in thousands)
CITY OF IOWA CITY, IOWA
COMBINING STATEMENT OF REVENUES, EXPENSES,
INTERNAL SERVICE FUNDS
For the Year Ended June 30, 2018
AND CHANGES IN FUND NET POSITION
105
Equipment Central Loss Information
Maintenance Services Reserve Technology Total
Cash Flows From Operating Activities
Receipts from customers and users 6,511$ 219$ 10,375$ 2,257$ 19,362$
Payments to suppliers (2,220) (121) (9,906) (831) (13,078)
Payments to employees (1,008) (35) (296) (1,061) (2,400)
Net cash flows from operating activities 3,283 63 173 365 3,884
Cash Flows From Noncapital Financing
Activities
Transfers to other funds (1,430) (23) - - (1,453)
Net cash flows from noncapital financing
activities (1,430) (23) - - (1,453)
Cash Flows From Capital and Related
Financing Activities
Acquisition and construction of property
and equipment (1,708) (34) - (128) (1,870)
Proceeds from sale of property 237 - -- 237
Net cash flows used for capital and related
financing activities (1,471) (34) - (128) (1,633)
Cash Flows From Investing Activities
Interest on investments 109 8 132 28 277
Net increase in cash
and cash equivalents 491 14 305 265 1,075
Cash and Cash Equivalents, Beginning 13,209 715 14,842 2,651 31,417
Cash and Cash Equivalents, Ending 13,700$ 729$ 15,147$ 2,916$ 32,492$
Reconciliation of operating income (loss)
to net cash flows from operating activities:
Operating income 1,556$ 40$ 228$ 169$ 1,993$
Adjustments to reconcile operating income
to net cash flows from operating activities:
Depreciation expense 1,619 21 - 244 1,884
Changes in:
Receivables:
Accounts and unbilled usage -- 62 - 62
Due from other governments 16 - - - 16
Inventories (55)- - - (55)
Prepaid item --- 12 12
Accounts payable 101 (2) (43) (1) 55
Accrued liabilities 5 - (92) 3 (84)
Employee vested benefits 8 1 1 (9) 1
Net pension liability 43 1 16 (39) 21
Deferred outflows of resources (35)(1) (1) (29) (66)
Deferred inflows of resources 3 1 - (3) 1
Other post employment benefits liability 22 2 2 18 44
Total adjustments 1,727 23 (55) 196 1,891
Net cash flows from operating activities 3,283$ 63$ 173$ 365$ 3,884$
Noncash Investing, Capital, and Financing
Activities:
Contributions of capital assets from
government and others 706$ -$ -$ 496$ 1,202$
Contributions of capital assets to
government and others -$481$ -$ 189$ 670$
(amounts expressed in thousands)
CITY OF IOWA CITY, IOWA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For the Year Ended June 30, 2018
106
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.
107
Balance Balance
July 1, 2017 Increases Decreases June 30, 2018
Project Green
Assets
Equity in pooled cash and investments 163$ 72$ 85$ 150$
Interest receivable 1 1 1 1
Total assets 164$ 73$ 86$ 151$
Liabilities
Accounts payable 4$ 12$ 4$ 12$
Due to agency 160 61 82 139
Total liabilities 164$ 73$ 86$ 151$
(amounts expressed in thousands)
CITY OF IOWA CITY
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
For the Year Ended June 30, 2018
AGENCY FUNDS
108
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
Financial Trends 111
These schedules contain trend information to help the reader understand how
the government’s financial performance and well-being have changed over
time.
Revenue Capacity 116
These schedules contain information to help the reader assess the
government’s most significant local revenue source, the property tax.
Debt Capacity 126
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 136
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the government’s financial activities
take place.
Operating Information 138
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.
109
110
2009 2010 2011 2012 20131 2014 2015 20162 2017 2018
Governmental activities
Net investment in capital assets 100,741$ 111,703$ 123,935$ 135,998$ 133,989$ 138,482$ 153,729$ 163,362$ 183,651$ 157,106$
Restricted 26,586 25,588 31,179 35,021 22,867 39,958 36,447 42,154 47,676 41,490
Unrestricted 17,938 32,478 36,862 38,906 50,744 39,758 15,520 18,402 16,264 63,617
Total governmental activities net position 145,265$ 169,769$ 191,976$ 209,925$ 207,600$ 218,198$ 205,696$ 223,918$ 247,591$ 262,213$
Business-type activities
Net investment in capital assets 162,211$ 172,601$ 186,177$ 195,073$ 253,617$ 264,727$ 279,272$ 279,679$ 285,912$ 294,109$
Restricted 19,159 17,588 20,658 20,176 19,033 19,438 22,389 22,269 21,238 22,219
Unrestricted 63,842 65,725 61,032 58,850 74,370 71,542 57,367 69,472 76,664 73,126
Total business-type activities net position 245,212$ 255,914$ 267,867$ 274,099$ 347,020$ 355,707$ 359,028$ 371,420$ 383,814$ 389,454$
Primary government
Net investment in capital assets 262,952$ 284,304$ 310,112$ 331,071$ 387,606$ 403,209$ 433,001$ 443,041$ 469,563$ 451,215$
Restricted 45,025 43,176 51,837 55,197 41,900 59,396 58,836 64,423 68,914 63,709
Unrestricted 82,500 98,203 97,894 97,756 125,114 111,300 72,887 87,874 92,928 136,743
Total primary government net position 390,477$ 425,683$ 459,843$ 484,024$ 554,620$ 573,905$ 564,724$ 595,338$ 631,405$ 651,667$
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)
111
2009 2010 2011 2012 20131 2014 2015 20162 2017 2018
Expenses
Governmental activities:
Public safety 20,730$ 19,955$ 18,867$ 21,186$ 20,989$ 22,721$ 21,193$ 22,029$ 24,002$ 25,191$
Public works 15,177 16,806 19,145 17,556 10,240 8,258 11,037 10,839 12,032 12,813
Culture and recreation 9,574 12,238 10,811 13,107 14,481 16,586 14,049 14,422 15,525 16,363
Community and economic development 8,726 16,913 16,501 16,305 10,596 10,059 7,093 6,786 8,253 12,019
General government 7,600 7,549 7,356 7,591 7,513 7,687 7,752 6,240 6,124 6,858
Debt service 3,264 2,970 2,841 2,400 2,237 1,797 1,517 1,287 1,481 1,414
Total governmental activities expenses 65,071 76,431 75,521 78,145 66,056 67,108 62,641 61,603 67,417 74,658
Business-type activities:
Wastewater 11,925 11,274 10,971 11,069 10,464 21,139 12,131 11,866 11,233 11,392
Water 9,185 8,309 8,523 8,781 9,074 8,723 8,403 8,149 8,921 9,472
Sanitation 7,296 7,705 7,461 8,315 7,279 8,402 8,114 8,735 9,123 9,408
Housing authority 7,238 7,838 7,448 7,911 7,658 7,703 7,873 8,378 8,798 9,535
Parking 4,489 4,536 4,135 4,167 4,579 4,093 4,678 4,460 4,620 5,590
Airport 693 724 1,049 1,127 1,086 1,209 1,612 1,597 1,402 1,680
Stormwater 1,223 1,187 1,418 1,304 1,318 1,314 2,091 1,989 2,432 1,844
Cable television 633 645 638 689 692 781 704 - - -
Transit - - - - 6,998 7,795 7,379 7,486 7,263 8,071
Total business-type activities expenses 42,682 42,218 41,643 43,363 49,148 61,159 52,985 52,660 53,792 56,992
Total primary government expenses 107,753$ 118,649$ 117,164$ 121,508$ 115,204$ 128,267$ 115,626$ 114,263$ 121,209$ 131,650$
Program Revenues Governmental activities: Charges for services Public safety 2,968$ 2,980$ 3,279$ 3,401$ 4,098$ 3,626$ 3,926$ 4,813$ 5,286$ 4,438$ Public works 1,392 1,061 1,117 1,112 52 61 388 628 724 62 Culture and recreation 715 773 872 825 775 808 801 823 842 836 Community and economic development - - - - - 45 50 1,044 36 441 General government 1,626 2,574 2,931 2,817 2,763 3,030 2,975 1,252 1,524 1,520 Operating grants and contributions 8,185 15,554 13,517 8,682 4,731 3,231 8,701 9,941 10,828 10,245 Capital grants and contributions 3,773 8,291 6,048 6,078 6,876 5,580 11,556 3,999 9,952 1,459
Total governmental activities program revenues 18,659 31,233 27,764 22,915 19,295 16,381 28,397 22,500 29,192 19,001
Business-type activities:
Charges for services:
Wastewater 12,557 12,637 12,836 12,670 12,832 12,559 12,189 12,266 12,277 12,626
Water 8,107 7,957 8,054 8,419 8,583 8,443 8,527 9,134 9,275 9,473
Sanitation 8,286 8,096 8,259 8,115 8,181 8,467 9,015 9,215 9,927 10,014
Housing authority 181 180 208 207 205 213 237 300 321 323
Parking 5,438 5,377 5,234 4,743 5,043 5,294 5,502 5,438 5,453 5,648
Airport 248 289 293 306 314 328 349 333 345 348
Stormwater 622 617 641 811 974 1,093 1,147 1,168 1,544 1,560
Cable Television 788 790 809 824 816 773 750 - - -
Transit1 - - - - 2,117 2,185 2,289 2,099 2,089 2,216
(continued)
CITY OF IOWA CITY, IOWA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual basis of accounting)
(amounts expressed in thousands)
112
2009 2010 2011 2012 20131 2014 2015 20162 2017 2018
Capital grants and contributions: Wastewater 266 2,115 2,394 3,223 30,181 7,105 1,370 3,415 2,226 1,913
Capital grants and contributions: Water 132 572 973 977 494 539 581 254 869 483
Capital grants and contributions: Sanitation - 6 - 2 - - - - - 22
Capital grants and contributions: Airport 3,239 3,311 358 1,576 2,452 5,214 137 260 58 49
Capital grants and contributions: Stormwater 68 541 140 436 226 711 792 370 1,251 892
Capital grants and contributions: Housing authority - 25 11 - - - - - - -
Capital grants and contributions: Parking - - 269 4 - - - - - -
Capital grants and contributions: Transit - - - - 898 243 - 308 395 3,827
Operating grants and contributions: Housing authority 6,668 7,765 7,438 6,782 6,968 6,721 7,628 8,318 8,532 9,065
Operating grants and contributions: Water 15 6 - - 442 6 2 - - -
Operating grants and contributions: Airport 2 - - - 11 56 232 128 69 72
Operating grants and contributions: Sanitation 607 6 10 - 23 27 25 3 - 3
Operating grants and contributions: Wastewater 1 - - - - 62 21 - - -
Operating grants and contributions: Stormwater - - - - 13 13 279 95 - 2
Operating grants and contributions: Transit - - - - 1,767 2,118 2,082 2,095 2,235 2,088
Total business-type activities program revenues 47,225 50,290 47,927 49,095 82,540 62,170 53,154 55,199 56,866 60,624
Total primary government revenues 65,884$ 81,523$ 75,691$ 72,010$ 101,835$ 78,551$ 81,551$ 77,699$ 86,058$ 79,625$
Net (Expense) / Revenues
Governmental activities (46,412)$ (45,198)$ (47,757)$ (55,230)$ (46,761)$ (50,727)$ (34,244)$ (39,103)$ (38,225)$ (55,657)$
Business-type activities 4,543 8,072 6,284 5,732 33,392 1,011 169 2,539 3,074 3,632 Total primary government net expense (41,869)$ (37,126)$ (41,473)$ (49,498)$ (13,369)$ (49,716)$ (34,075)$ (36,564)$ (35,151)$ (52,025)$
General Revenues and Other Changes in Net Position
Governmental activities:
General revenues:
Property taxes 47,085$ 49,467$ 48,011$ 50,516$ 51,017$ 50,551$ 52,205$ 53,114$ 57,649$ 59,046$
Road use tax3 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 1,489 1,535 2,464 2,491 2,609 2,778 2,810 2,717 2,802 2,706
Grants and contributions not restricted to specific purposes - - - - - - 1,048 2,080 1,583 1,547
Earnings on investments 3,057 1,766 1,539 1,823 841 973 1,188 1,045 1,397 2,368
Miscellaneous 4,894 3,893 6,230 4,228 4,390 4,353 5,518 4,464 3,369 3,656
Gain on sale of assets - - 761 2,950 1,312 1,651 135 218 2,151 140
Transfers 205 (625) (4,020) (3,867) (10,485) (6,192) (10,057) (6,395) (7,053) 1,814
Reassignments - - - - - - - 82 - -
Total governmental activities 61,984 69,702 69,964 73,179 65,131 61,325 52,847 57,325 61,898 71,277
Business-type activities:
General revenues:
Earnings on investments 2,577 1,311 954 813 671 494 707 715 938 1,496
Gain on sale of assets 360 230 314 336 293 725 856 2,463 69 2,438
Miscellaneous 317 464 381 484 918 265 374 362 1,260 456
Transfers (205) 625 4,020 3,867 10,485 6,192 10,057 6,395 7,053 (1,814)
Reassignments - - - - - - - (82) - -
Special items - - - - - - (574) - - -
Extraordinary items - - - (5,000) - - - - - -
Total business-type activities 3,049 2,630 5,669 500 12,367 7,676 11,420 9,853 9,320 2,576
Total primary government 65,033$ 72,332$ 75,633$ 73,679$ 77,498$ 69,001$ 64,267$ 67,178$ 71,218$ 73,853$
Change in Net Position
Governmental activities 15,572$ 24,504$ 22,207$ 17,949$ 18,370$ 10,598$ 18,603$ 18,222$ 23,673$ 15,620$
Business-type activities 7,592 10,702 11,953 6,232 45,759 8,687 11,589 12,392 12,394 6,208 Total primary government 23,164$ 35,206$ 34,160$ 24,181$ 64,129$ 19,285$ 30,192$ 30,614$ 36,067$ 21,828$
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)
113
2009 2010 20111 2012 20132 2014 2015 20163 2017 2018
General Fund
Nonspendable -$ -$ 331$ 314$ 69$ 69$ 69$ 69$ 788$ 793$
Restricted - - 16,268 23,779 25,689 26,533 25,291 18,975 9,974 1,942
Committed - - - - - - - 4,699 5,199 4,962
Assigned - - 3,542 5,191 1,744 3,400 - 1,143 1,342 1,437
Reserved 555 406 - - - - 4,483 - - -
Unassigned - - 15,931 14,273 17,113 17,907 19,286 23,366 24,793 28,516
Unreserved 15,362 26,101 - - - - - - - -
Total general fund 15,917$ 26,507$ 36,072$ 43,557$ 44,615$ 47,909$ 49,129$ 48,252$ 42,096$ 37,650$
All other Governmental Funds
Nonspendable -$ -$ -$ -$ -$ -$ -$ -$ 344$ 165$
Restricted - - 34,889 34,853 28,108 31,285 27,897 38,266 63,941 64,033
Reserved 5,339 3,903 - - - - - - - -
Designated for long-term debt 11,759 13,952 - - - - - - - -
Unassigned - - (1,741) (366) (5,844) (9) - - - (38)
Unreserved, reported in:
Special revenue funds (1,852) (1,674) - - - - - - - -
Capital projects funds 10,960 8,043 - - - - - - - -
Total all other governmental funds 26,206$ 24,224$ 33,148$ 34,487$ 22,264$ 31,276$ 27,897$ 38,266$ 64,285$ 64,160$
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)
114
2009 2010 2011 2012 20131 2014 2015 20162 2017 2018
Revenues:
Property taxes and assessments 48,572$ 59,143$ 59,387$ 61,649$ 62,483$ 53,797$ 55,014$ 55,831$ 60,452$ 61,753$
Licenses and permits 1,284 1,211 1,412 1,307 1,784 1,660 1,806 3,056 3,521 2,734
Intergovernmental 19,521 31,404 29,870 21,952 19,941 17,636 21,086 20,230 24,140 14,944
Charges for services 2,498 2,433 2,515 2,614 1,800 1,819 2,204 3,357 2,355 2,295
Fines and forfeits - - - - - - - 760 750 695
Use of money and property 2,645 1,599 1,479 1,768 782 909 1,080 946 1,235 1,937
Miscellaneous 5,302 4,784 7,749 5,750 6,325 6,040 7,045 2,913 2,101 2,875
Total governmental activities revenues 79,822$ 100,574$ 102,412$ 95,040$ 93,115$ 81,861$ 88,235$ 87,093$ 94,554$ 87,233$
Expenditures
Current
Public safety 18,752$ 19,108$ 18,717$ 20,091$ 20,648$ 21,370$ 21,996$ 21,701$ 22,513$ 23,360$
Public works 12,405 13,311 14,766 15,462 8,503 8,432 12,071 9,466 9,186 10,052
Culture and recreation 10,849 11,266 12,498 13,075 13,000 13,087 11,821 12,257 13,341 14,208
Community and economic development 8,037 10,520 8,878 8,037 8,219 8,196 5,711 5,346 7,695 11,074
General government 7,300 7,191 7,695 7,553 7,286 7,184 7,608 6,007 5,882 6,017
Debt service
Principal 8,418 9,354 10,386 13,294 16,465 13,560 12,564 13,230 13,305 11,895
Interest 3,364 3,064 2,889 2,543 2,339 1,903 1,669 1,475 1,597 1,570
Capital projects 17,096 17,690 21,873 16,006 17,861 14,528 14,762 14,848 18,405 28,225
Total expenditures 86,221$ 91,504$ 97,702$ 96,061$ 94,321$ 88,260$ 88,202$ 84,330$ 91,924$ 106,401$
Excess (deficiency) of revenues over
(under) expenditures (6,399)$ 9,070$ 4,710$ (1,021)$ (1,206)$ (6,399)$ 33$ 2,763$ 2,630$ (19,168)$
Other financing sources (uses):
Issuance of long-term debt 30,035$ -$ 16,165$ 9,690$ 2,655$ 19,730$ 7,785$ 9,405$ 22,570$ 11,995$
Issuance of refunding debt --10,930$ - - - - - - -
Sale of capital assets 554 222 845 3,619 1,369 1,684 165 252 2,292 140
Insurance Recoveries - 20 594 53 - - - - - -
Premium (discount) on issuance of bonds 552 -394 165 (42) 385 199 441 120 236
Payment of refunded bonds (23,140) - (11,085) - - - - - - -
Transfers in 16,486 16,742 18,658 19,499 25,198 13,040 13,089 25,133 34,675 34,666
Transfers out (16,386) (17,446) (22,722) (23,181) (35,493) (16,134) (23,430) (28,502) (47,033) (32,440)
Total other financing sources (uses)8,101$ (462)$ 13,779$ 9,845$ (6,313)$ 18,705$ (2,192)$ 6,729$ 12,624$ 14,597$
Net change in fund balances 1,702$ 8,608$ 18,489$ 8,824$ (7,519)$ 12,306$ (2,159)$ 9,492$ 15,254$ (4,571)$
Debt service as a percentage of
noncapital expenditures 17.0%15.3%16.2%18.6%24.0%20.7%19.8%21.2%19.9%17.1%
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)
115
Fiscal Local Option Utility
Year Property Tax Road Use Tax Hotel/Motel Tax Sales Tax1 Franchise Fee2 Total
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
2018 59,730 8,427 1,046 - 976 70,179
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)
116
Collection Commercial, Industrial Incremental Value Gas &Residential Taxable Value Total
Year Ended Agricultural & Utilities (excluding Military Net (Debt Service Electric Utilities Total Rollback as a Percentage Direct
June 30 Residential (Taxed at Ag Rate)Gas & Electric)Exemptions Valuation Levy Only)(excise tax)Value Percentage of Assessed Value Rate
2009 Assessed 2,991,702 1,565 1,108,123 3,396 4,097,994$ 111,540 54,081 4,263,615$
Taxable 1,307,511 1,410 1,105,109 3,396 2,410,634$ 111,540 44,597 2,566,771$ 44.080 60.202 17.717
2010 Assessed 3,065,279 1,499 1,133,818 3,324 4,197,272$ 117,813 61,066 4,376,151$
Taxable 1,384,088 1,407 1,133,818 3,324 2,515,989$ 117,813 45,157 2,678,959$ 45.589 61.217 17.853
2011 Assessed 3,122,875 2,315 1,223,304 3,239 4,345,255$ 25,409 79,196 4,449,860$
Taxable 1,464,644 1,534 1,223,304 3,239 2,686,243$ 25,409 46,333 2,757,985$ 46.909 61.979 17.757
2012 Assessed 3,182,636 2,264 1,231,756 3,163 4,413,493$ 25,409 81,240 4,520,142$
Taxable 1,544,261 1,562 1,231,756 3,163 2,774,416$ 25,409 48,338 2,848,163$ 48.530 63.010 17.842
2013 Assessed 3,284,249 2,516 1,236,609 3,097 4,520,277$ 11,712 83,538 4,615,527$
Taxable 1,666,036 1,448 1,236,609 3,097 2,900,996$ 11,712 47,404 2,960,112$ 50.752 64.134 17.269
2014 Assessed 3,367,052 2,656 1,200,457 3,060 4,567,105$ 14,114 87,100 4,668,319$
Taxable 1,776,096 1,592 1,200,457 3,060 2,975,085$ 14,114 46,813 3,036,012$ 52.817 65.034 16.805
2015 Assessed 3,488,113 3,681 1,238,018 2,939 4,726,873$ 21,132 78,643 4,826,648$
Taxable 1,894,080 1,598 1,175,921 2,939 3,068,660$ 21,132 47,005 3,136,797$ 54.400 64.989 16.705
2016 Assessed 3,603,744 3,554 1,216,054 2,828 4,820,524$ 42,307 87,728 4,950,559$
Taxable 2,008,493 1,588 1,095,272 2,828 3,102,525$ 33,331 46,785 3,182,641$ 55.734 64.289 16.651
2017 Assessed 3,882,757 3,721 1,300,840 2,728 5,184,590$ 72,651 92,987 5,350,228$
Taxable 2,155,033 1,707 1,149,736 2,728 3,303,748$ 72,651 44,987 3,421,386$ 55.626 63.948 16.583
2018 Assessed 4,001,761 3,426 1,316,765 2,635 5,319,317$ 80,560 94,582 5,494,459$
Taxable 2,274,452 1,618 1,147,155 2,635 3,420,590$ 80,560 41,702 3,542,852$ 56.939 64.480 16.333
Sources:
Iowa Department of Management
Notes:
Property is reassessed in the odd numbered years to make adjustments to all property values, according to current market values. As per the Code of Iowa, all real property subject to taxation
shall be valued at its actual value and, except as otherwise provided, shall be reassessed at 100% of its actual value.
CITY OF IOWA CITY, IOWA
ASSESSED AND TAXABLE VALUE OF PROPERTY
Last Ten Fiscal Years
(amounts expressed in thousands)
117
(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
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
2018 12.755 3.578 16.333 7.180 13.959 1.132 0.003 38.607
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 $1,000 of assessed value.
Overlapping Rates
City of Iowa City
CITY OF IOWA CITY, IOWA
PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
118
Collection Total Tax Current Tax Delinquent Tax Total Tax
Year Levied Collections Collections1 Collections
2009 43,168 43,118 99.9 18 43,136 99.9
2010 45,393 45,318 99.8 17 45,335 99.9
2011 47,789 47,826 100.1 8 47,834 100.1
2012 49,595 49,543 99.9 1 49,544 99.9
2013 50,407 50,139 99.5 3 50,142 99.5
2014 50,307 49,835 99.1 1 49,836 99.1
2015 51,609 51,292 99.4 3 51,295 99.4
2016 52,034 52,074 100.1 0 52,074 100.1
2017 55,330 55,331 100.0 0 55,331 100.0
2018 56,458 56,434 100.0 0 56,434 100.0
Source: Certificate of City Taxes and Johnson County Treasurer's Office
Note: This schedule is presented on a cash basis of accounting. Taxes are collected by the Johnson County Treasurer and
submitted to the City in the following month. Because of the month delay, some years will show Current Tax Collections in
excess of the Total Tax Levied.
1 Delinquent tax collection is presented by collection year, rather than levy year, because information is not available from
Johnson County Treasurer by levy year.
CITY OF IOWA CITY, IOWA
PROPERTY TAX BUDGETS AND COLLECTIONS
Last Ten Fiscal Years
(Cash basis of accounting)
(amounts expressed in thousands)
Percent of
Levy
Collected
Total as
a Percent of
Levy
119
% of Total % of Total
Taxable Taxable Taxable Taxable
Ten largest taxpayers1 Type of Business Valuation Rank Valuation Valuation Rank Valuation
ACT Inc (Am College Testing Prgrm)Educational Testing Service 44,435$ 2 1.03 %56,145$ 1 1.64 %
BBCS Hawkeye Housing LLC Real Estate Mangment --N/A 45,357 2 1.33
Mid-American Energy Company Public Gas and Electric Utility 45,048 1 1.02 29,806 3 0.87
Vesper Iowa City LLC Real Estate Developer - -N/A 27,191 4 0.79
Midwestone Bank Finanacial - -N/A 26,245 5 0.77
Ann Gerdin Trust (formerly Russell Gerdin)Warehousing 16,939 4 0.39 25,448 6 0.74
Dealer Properties IC LLC (Billion Auto)Car Dealerships - -N/A 21,465 7 0.63
Michael T McLaughlin Property Management - -N/A 18,740 8 0.55
Proctor & Gamble LLC Manufacturing Company 12,688 9 0.29 18,673 9 0.55
Christian Retirement Services (Oaknoll)Retirement Community - -N/A 18,335 10 0.54
SouthGate Development CO RealEstate Developer 20,265 3 0.46 - -N/A
National Computer Systems (Pearson)Information Services 16,430 5 0.38 - -N/A
MEHSM LC (Sycamore Mall)Shopping Mall 14,954 6 0.34 - -N/A
Plaza Towers LLC Condo/Hotel/Commercial space 14,168 7 0.32 - -N/A
United Natural Foods Wholesale Distribution Company 13,095 8 0.30 - -N/A
Alpha Inc. Industrial 11,715 10 0.27 - -N/A
Total 209,737$ 4.80 %287,405$ 8.41 %
Sources:
1City of Iowa City Assessor's Office
CITY OF IOWA CITY, IOWA
PRINCIPAL TAXPAYERS
Current Year and Nine Years Ago
(amounts expressed in thousands)
20182009
120
121
Customer Name Charges Rank Percentage Charges Rank Percentage
Proctor & Gamble 624,483$ 1 8.33 %787,275$ 1 7.91 %
Veterans Administration Medical Center 91,529 2 1.22 120,538 2 1.21
Mercy Hospital 71,622 4 0.96 67,081 3 0.67
Campus Apartments 66,600 5 0.89 66,835 4 0.67
Tailwind Iowa City LLC formerly Dolphin Lake 37,843 9 0.50 55,022 5 0.55
Dominium JIT Srv formerly Mark IV Apts 53,273 7 0.71 55,000 6 0.55
Iowa City School District --N/A 47,194 7 0.47
Seville Apts 31,885 10 0.43 38,527 8 0.39
Oaknoll --N/A 37,130 9 0.37
U of I Mayflower 90,330 3 1.20 34,763 10 0.35
Robert's Dairy 63,517 6 0.85 --N/A
Lear Corp --N/A --N/A
Sheraton Inn/Holiday Inn 35,806 8 0.48 --N/A
1,166,888$ 15.57 %1,309,365$ 13.14 %
Total Water System Charges 7,497,903$ 9,953,510$
Sources:
City of Iowa City Revenue Division
20182009
CITY OF IOWA CITY, IOWA
PRINCIPAL WATER SYSTEM CUSTOMERS
Current Year and Nine Years Ago
122
Fiscal Water Sales Water System
Year Cubic Feet Sold Charges
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
2018 293,046,636 9,953,510
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
123
Customer Name Charges Rank Percentage Charges Rank Percentage
University of Iowa 1,953,325$ 1 15.63 %1,938,618$ 1 15.48 %
Proctor & Gamble 1,443,652 2 11.55 1,355,077 2 10.82
Veterans Administration Medical Center 88,204 8 0.71 162,111 3 1.29
Mercy Hospital 122,737 5 0.98 106,938 4 0.85
Campus Apartments 91,889 7 0.74 78,918 5 0.63
Dominium JIT Srv formerly Mark IV Apts 73,987 9 0.59 68,736 6 0.55
University of Iowa Mayflower 163,776 3 1.31 54,414 7 0.43
Seville Apts - -N/A 52,407 8 0.42
Oaknoll Retirement Residence - -N/A 52,205 9 0.42
Tailwind Iowa City LLC formerly Dolphin Lake - -N/A 52,142 10 0.42
Robert's Dairy 155,192 4 1.24 --N/A
Iowa City Landfill 92,318 6 0.74 - -N/A
Sheraton Iowa City Hotel 62,698 10 0.50 - -N/A
4,247,778$ 33.99 %3,921,566$ 31.31 %
Total Sewer System Charges 12,499,949$ 12,524,540$
Sources:
City of Iowa City Revenue Department
CITY OF IOWA CITY, IOWA
PRINCIPAL SEWER SYSTEM CUSTOMERS
Current Year and Nine Years Ago
20182009
124
Fiscal Sewer Sales Sewer System
Year Cubic Feet Sold Charges
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
2018 283,246,320 12,524,540
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
125
General Capital General Total Percentage
Fiscal Obligation Revenue Loan Obligation Revenue Primary of Personal Per
Year Bonds1 Bonds1 Note Bonds1 Bonds1 Government Income2 Capita2
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 - 34,420,914 102,371,308 1.25 1,351
2018 52,883,524 15,035,264 211,000 - 29,095,062 97,224,850 1.16 1,256
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 136.
Governmental Activities Business-Type Activities
CITY OF IOWA CITY, IOWA
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
126
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
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 591
2018 5,494,459 52,884 - 52,884 8,609 44,275 8.06 : 1000 572
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 136.
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)
127
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
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
2018 11,895 1,570 13,465 138,841 .10 : 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.
128
CITY OF IOWA CITY, IOWA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
June 30, 2018
(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 68,130$ 100.00 %68,130$ 1.24 %879.8145$
Iowa City Community
School District1 58,955 56.87 33,528 0.63 442.3336
Johnson County1 10,640 42.09 4,478 0.08 59.0781
Clear Creek- Amana
Community School District1 76,045 0.04 30 0.00 0.3958
Kirkwood Comm. College1 90,422 14.11 12,759 0.24 168.3290
Total Overlapping Debt 236,062 50,795 670.1365
Total Direct & Overlapping Debt 304,192$ 118,925$ 1,549.9510
Per capita assessed value 70,954$
1 Long term debt outstanding includes only GO debt.
2City Property Assessed Value of 5,494,459 came from the Iowa Department of Management
3 Population for FY18 of 77,437 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.
129
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Total Assessed
Valuation 4,263,615$ 4,376,151$ 4,449,860$ 4,520,142$ 4,615,527$ 4,668,319$ 4,826,648$ 4,950,559$ 5,350,228$ 5,494,459$
Debt Limit 213,181 218,808 222,493 226,007 230,776 233,416 241,332 247,528 267,511 274,723
G.O. Bonds 84,995 75,050 80,575 75,320 58,550 64,420 59,340 55,350 51,645 51,880
TIF Rev. Bonds ----2,655 2,655 2,655 2,525 15,200 15,065
Letters of credit -498 1,616 805 538 1,943 2,005 582 663 475
TIF rebates 2,180 1,223 867 574 307 170 18,206 13,506 17,356 25,012
Total net debt
applicable to limit 87,175 76,771 83,058 76,699 62,050 69,188 82,206 71,963 84,864 92,432
Legal debt margin 126,006$ 142,037$ 139,435$ 149,308$ 168,726$ 164,228$ 159,126$ 175,565$ 182,647$ 182,291$
Total net debt
applicable to
the limit as a
percentage of
debt limit 40.89%35.09%37.33%33.94%26.89%29.64%34.06%29.07%31.72%33.65%
Note: Under Iowa code, the city's outstanding general obligation debt should not exceed 5 percent of total assessed property value.
CITY OF IOWA CITY, IOWA
LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
(amounts expressed in thousands)
Fiscal Year
130
Fiscal
Year Principal Interest Total
Property Tax
Revenue
Tax Increment
Financing
Principal
Outstanding at
Beginning of Fiscal
Year
2018 11,760,000 1,113,386 12,873,386 12,275,274 598,112 51,645,000
2019 9,335,000 1,257,050 10,592,050 9,833,950 758,100 51,880,000
2020 8,400,000 1,036,338 9,436,338 8,680,208 756,130 42,545,000
2021 7,585,000 819,135 8,404,135 7,647,747 756,388 34,145,000
2022 6,395,000 631,263 7,026,263 6,270,783 755,480 26,560,000
2023 5,520,000 492,013 6,012,013 5,313,697 698,316 20,165,000
2024 4,760,000 358,213 5,118,213 4,573,351 544,862 14,645,000
2025 3,830,000 248,913 4,078,913 3,842,203 236,710 9,885,000
2026 3,030,000 160,600 3,190,600 3,027,816 162,784 6,055,000
2027 2,045,000 85,325 2,130,325 1,967,008 163,317 3,025,000
2028 980,000 29,400 1,009,400 1,009,400 - 980,000
Total 63,640,000$ 6,231,636$ 69,871,636$ 64,441,437$ 5,430,199$
Payments Funding Source(s)
CITY OF IOWA CITY, IOWA
GENERAL OBLIGATION DEBT ANNUAL MATURITY SCHEDULE
131
Fiscal
Year Net Revenue Annual Debt Service2
Ended Available for Ratio of
June 30 Revenue Expenses1 Debt Service Principal Interest Total Coverage
Parking Revenue3
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 - - - - - - -
2018 - - - - - - -
Wastewater Treatment Revenue4
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
2018 13,181 6,622 6,559 3,580 756 4,336 1.51
Water Revenue5
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
2018 9,838 6,949 2,889 1,455 394 1,849 1.56
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)
132
Fiscal
Year Principal Interest Total Sewer Revenue Water Revenue
Tax Increment
Financing
Principal
Outstanding at
Beginning of Fiscal
Year
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 48,020,000$ 8,939,367$ 56,959,367$ 21,875,832$ 14,666,490$ 20,417,045$
Payments
CITY OF IOWA CITY, IOWA
REVENUE DEBT ANNUAL MATURITY SCHEDULE
Funding Source(s)
133
Fiscal Year Principal Interest Total
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 19,590,000$ 2,285,832$ 21,875,832$
Fiscal Year Principal Interest Total
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 13,230,000$ 1,436,490$ 14,666,490$
CITY OF IOWA CITY, IOWA
Outstanding
REVENUE DEBT ANNUAL MATURITY BY FUNDING SOURCE
Sewer
Water
134
Fiscal Year Principal Interest Total
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 15,200,000$ 5,217,045$ 20,417,045$
Taxable Urban Renewal
Outstanding
CITY OF IOWA CITY, IOWA
REVENUE DEBT ANNUAL MATURITY BY FUNDING SOURCE (continued)
135
Per Capita
Calendar Personal Personal Average School Retail
Year Population6 Income1 Income1 Increase Enrollment2 Sales4
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
2017 75,798 8,217,043 48,672 2.31 15,299 3.0 874,928,988
20185 77,437 8,396,022 49,732 2.18 14,285 2.2 854,538,416
Sources and Notes:
1 Personal Income and Per Capita Personal Income based on metropolitan Iowa City / Coralville and based on figures from Bureau of
Economic Analysis. Personal Income expressed in thousands.
2 Iowa City Community School District and local private schools
3 Iowa Workforce Development Center
4 Iowa Retail Sales & Use Report, Iowa Department of Revenue and Finance. Fiscal year ending June 30.
5 Personal Income and Per Capita Personal Income for 2017 or 2018 are not available. Amounts projected based on average increase over previous 9 years.
6 US Census Bureau Population number is not avaible for 2018. Amounts projected based on an average over previous 9 years
DEMOGRAPHIC AND ECONOMIC STATISTICS
CITY OF IOWA CITY, IOWA
Last Ten Calendar Years
Unemployment
Rate3
136
Employers Employees Rank Percentage Employees Rank Percentage
University of Iowa 28,781 1 30.7 %29,705 1 28.7 %
Veterans Administration Medical Center 1,351 5 1.4 2,150 2 2.1
Iowa City Community School District 1,700 2 1.8 1,575 3 1.5
Mercy Hospital 1,305 4 1.4 1,325 4 1.3
ACT Inc. (formerly American College Testing Program)1,427 3 1.5 1,187 5 1.1
Proctor and Gamble - -N/A 1,084 6 1.0
Hy Vee 1,166 6 1.2 1,012 7 1.0
City of Iowa City 982 8 1.0 931 8 0.9
NCS Pearson 1,152 7 1.2 775 9 0.7
Johnson County - -N/A 609 10 0.6
Internaltion Automotive Components formerly Lear Corp 805 9 0.9 - -N/A
Systems Unlimited 700 10 0.7 - -N/A
39,369 41.8 %40,353 38.9 %
Total Employees 93,700 103,400
Sources:
Iowa City Area Development Group
Various Employers
CITY OF IOWA CITY, IOWA
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
2009 2018
137
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Public Safety
Police 103.25 103.25 98 97 103 105 105 105 105 105
Animal Shelter1 6 6 6 6 - - - - - -
Fire 57 57 66 65 65 65 64 64 64 64
Inspection Services 15.55 15.55 15.55 15.55 15.55 13.55 13.55 12.85 13.5 13.5
Public Works
Public Works Admin 2 2 2 2 2 2 2 2 2 2
Engineering5 11.35 11.35 12.1 12.1 12.1 12.1 12.1 12 16 16
Flood Recovery - - 0.4 0.4 0.4 0.38 - - - -
Culture and Recreation
Parks and Rec Admin 2 2 2 2 2 2 2 2 2 2
Recreation 15.42 15.42 15.42 15.42 15.42 15.42 15.42 14.42 15.42 14.75
Parks 13 13 13 13 13 13 13 13 16 16
Forestry 3 3 3 3 3 3 3 3 3 3
Cemetery 3 3 3 3 3 3 3 3 3 3
CBD Maintenance 3 3 3 3 3 3 3 3 - -
Library 43.14 43.14 43.14 43.64 43.63 45.13 45.13 44.77 46.17 46.17
Senior Center 6.31 6.31 6.31 6.5 6.5 6.5 6.5 6.5 7 7
Community and Economic Development 9.05 9.05 9.1 9.1 8.4 8.95 8.95 10.8 12.63 13.13
General Government
City Council 7 7 7 7 7 7 7 7 7 7
City Clerk 4 4 4 4 4 4 4 4 4 4
City Attorney 6 6 5.6 5.6 5.6 5.6 5.6 5.5 5.5 5.5
City Manager2 3 3 3 3 5 6 6 10.5 10.5 9
Personnel 4 4 4 4 4 3 3 3 3 3
Human Rights 2.5 2.5 2.5 2.5 2 2 2 2 2 2
Finance 26.3 26.3 26.24 27.53 23.47 23.97 22.47 23.07 23.13 22.13
Government Buildings 4.96 4.96 4.96 4.83 4.83 4.83 4.83 5.33 4.33 5
Energy Conservation 0.25 0.25 - - - - - - - -
Transit3 58.5 58.5 56.25 56.25 - - - - - -
Special Revenue
Employee Benefits 0.29 0.29 0.26 0.55 0.55 0.55 0.55 0.55 0.55 0.55
CIP / Roads 2 2 - - - - - - - -
Flood Mitigation Grants - - 1.6 1.6 - - - - - -
Community Development 3.88 3.88 3.83 3.83 3.33 2.98 2.98 2.83 - -
UniverCity Program - - - - 0.2 - - - - -
Traffic Engineering 4.15 4.15 4.15 4.15 4.15 4.15 4.15 3.9 4.5 3
Streets 25.5 25.5 25.5 25.5 25.5 25.5 25.5 25.25 25.5 29
MPOJC (formerly JCCOG)6.6 6.6 6.6 6.6 5.6 5.6 5.6 4.7 4.7 4.7
Other Shared Revenues - - - - 1.6 1.62 - - - -
Library Development 1 1 1 1 1 - - - - -
Capital Projects Administration5 - - 3 5 6 6 5 4 - -
Internal Service Funds
Information Technology 12.3 12.3 11.3 11.8 10.86 9.86 9.86 9.86 9.8 10.8
Equipment 11.26 11.26 11.26 11.26 10.75 10.75 10.75 10.75 10.75 10.75
Central Services 0.75 0.75 0.75 0.75 0.76 0.5 0.5 0.5 0.5 0.5
Risk Management 1.93 1.93 2.01 1.8 1.8 1.8 1.8 1.8 1.8 1.8
Business-Type Activities
Parking 33.25 33.25 32.75 32.75 29.25 26.25 26.25 23.13 21.63 21.63
Mass Transit3 - - - - 51.75 51.25 51.25 51.13 53.63 54.63
Wastewater Treatment 25.6 25.6 25.6 25.4 25.4 24.4 24.65 24.65 25.4 26
Water 32.75 32.75 32.75 32.75 32.75 31.75 32 32 31.75 31.75
Sanitation 34.85 35.85 35.85 37.85 37.85 35.85 35.85 33.35 31.5 31.5
Airport 1.75 1.75 1.75 1.75 1 1 1 1 1 1
Cable Television4 6.44 6.44 6.69 6.63 6.63 6.63 5.63 - - -
Stormwater 1.9 1.9 1.9 2.1 2.1 2.1 2.6 2.6 2.1 1.5
Housing Authority 13.25 13.25 13.25 13.25 13.18 12.19 10.19 10.19 9.6 9.6
Total 629.03 630.03 633.37 637.74 623.91 615.16 607.66 598.93 599.89 601.89
Source: City's Financial Plan 1 Beginning in FY13, Animal Services is reported under Police
2 Beginning in FY13, Communications Division has been moved from Finance to City Manager
3 Beginning in FY13, Transit was moved from the General Fund to an Enterprise Fund
4 Beginning in FY16, Cable was moved from an Enterprise Fund to the General Fund
5 Beginning in FY17, Capital Project Administration was moved to Engineering
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
138
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Public Safety
Police1
Physical arrests 6,486 5,983 6,590 5,911 4,468 6,192 5,595 5,465 4,482 3,373
Traffic Violations 4,460 4,446 3,403 3,761 2,499 3,718 3,356 2,989 2,246 2,061
Fire1
Number of calls answered 4,152 4,472 4,635 5,173 4,713 5,828 6,016 6,974 6,749 5,258
Inspections conducted 1,959 2,145 1,806 1,970 1,431 2,032 1,903 2,459 874 864
Parking
Parking Violations 126,050 118,717 109,553 96,117 88,909 60,680 65,196 57,549 62,930 50,346
Wastewater Treatment
Daily average treatment
in million gallons 12.34 12.86 10.37 8.28 9.84 10.02 9.76 10.48 8.32 7.77
Maximum daily capacity
of plant in million gallons 41.0 41.1 41.1 41.1 41.1 41.1 43.3 43.3 43.3 43.3
Number of sewer system
customers 23,161 23,344 23,527 23,529 24,059 24,389 24,533 25,085 25,485 26,069
Water
Daily average consumption
in million gallons 5.51 5.48 5.51 5.49 5.54 5.64 5.33 5.32 5.50 5.84
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 23,391 23,657 23,875 24,086 24,442 24,790 23,089 23,638 24,025 24,595
Commercial 1,494 1,481 1,498 1,489 1,491 1,491 1,409 1,415 1,425 1,436
Industrial 15 15 15 15 15 15 14 14 14 15
Other 144 153 156 200 204 202 135 131 134 136
Total Customers 25,044 25,306 25,544 25,790 26,152 26,498 24,647 25,198 25,598 26,182
Sanitation
Number of Customers 14,700 14,831 14,926 15,030 15,177 15,331 14,811 15,620 15,917 15,960
Tonnage 8,747 8,869 8,969 8,935 8,956 9,160 9,210 9,476 9,623 9,694
Landfill
Tonnage 140,810 150,369 147,265 148,953 111,445 115,624 123,692 126,875 137,025 140,658
Sources: Various city divisions.
Notes:
1 Numbers are based on a calendar year and 2018 figures are compiled through 10/03/18.
CITY OF IOWA CITY, IOWA
OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
139
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Public Safety
Police
Stations 1 1 1 1 1 1 1 1 1 1
Patrol units 17 18 18 18 18 20 20 20 24 23
Fire
Stations 3 3 3 4 4 4 4 4 4 4
Fire apparatus 9 9 9 11 11 11 11 10 10 10
Public Works
Streets
Miles 270 272 272 275 276 279 281 283 286 288
Street lights 3,408 3,410 3,412 3,412 3,412 3,412 3,412 3,412 3,412 3,307
Culture and Recreation
Library 1 1 1 1 1 1 1 1 1 1
Cemetery 1 1 1 1 1 1 1 1 1 1
Acreage 40 40 40 40 40 40 40 40 40 40
Parks 61 40 41 41 42 43 46 46 49 50
Acreage 1,603 1,335 1,354 1,441 1,506 1,897 1,897 1,902 1,932 1,942
Recreation
Recreation centers 2 2 2 2 2 2 2 2 2 2
Swimming pools 3 3 3 3 3 3 3 3 3 3
Ball diamonds 30 30 30 30 27 27 27 27 27 27
Tennis courts 12 12 12 12 12 12 12 12 9 9
Soccer fields 20 20 20 20 20 20 20 20 20 20
Pickle Ball Courts - - - - - - - - 8 8
Futscal Courts - - - - - - - - 2 2
Full Basketball Courts - - - - - - - - 3 3
Gaga Pits - - - - - - - - - 2
Parking
Facilities 5 5 5 5 5 5 5 5 6 6
Spaces 3,086 3,086 3,086 3,086 3,086 3,086 3,086 3,086 3,686 3,686
Wastewater Treatment
Miles of sanitary sewer 289 291 292 294 295 298 300 301 304 306
Miles of storm sewer 120 122 124 127 128 131 133 136 139 140
Number of treatment plants 2 2 2 2 2 1 1 1 1 1
Number of service connectors 22,875 23,093 23,308 23,529 23,851 24,175 24,533 25,085 25,485 26,069
Water
Miles of water mains 263 264 264 266 268 271 273 275 277 279
Number of city owned fire hydrants 2,635 2,662 2,680 2,735 3,330 3,385 3,415 3,447 3,503 3,529
Sanitation
Landfills 1 1 1 1 1 1 1 1 1 1
Acreage 395 395 395 411 411 411 418 418 418 418
Sources: Various city divisions.
CITY OF IOWA CITY, IOWA
Last Ten Fiscal Years
CAPITAL ASSETS BY FUNCTION
140
Compliance
Section
Tab
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 City Council
City of Iowa City, Iowa
Iowa City, Iowa
We have audited, in accordance with the 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, as of and for the year ended June 30, 2018, 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, 2018.
Our report included an emphasis of matter paragraph for the implementation of Governmental Accounting
Standards Board Statement No. 75.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered City of Iowa City, Iowa’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 City of Iowa City, Iowa’s internal
control. Accordingly, we do not express an opinion on the effectiveness of City of Iowa City, Iowa’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 entity’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.
141
Our consideration of internal control 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. 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.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Iowa City, Iowa’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, 2018 are based exclusively on knowledge obtained from procedures performed during our
audit of the financial statements of the City. 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 City of Iowa City,
Iowa’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 of Iowa City, Iowa’s internal
control and compliance. Accordingly, this communication is not suitable for any other purpose.
Moline, Illinois
December 11, 2018
142
Independent Auditor’s Report on Compliance For
Each Major Federal Program and On Internal Control
Over Compliance Required By the Uniform Guidance
To the Honorable Mayor and
Members of City Council
City of Iowa City, Iowa
Iowa City, Iowa
Report on Compliance for Each Major Federal Program
We have audited City of Iowa City, Iowa’s compliance with the types of compliance requirements
described in the OMB Compliance Supplement that could have a direct and material effect on each of
City of Iowa City, Iowa’s major federal programs for the year ended June 30, 2018. City of Iowa City,
Iowa’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 compliance for each of City of Iowa City, Iowa’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 Uniform Guidance
require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance
with the types of 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 City of
Iowa City, Iowa’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.
143
Opinion on Each Major Federal Program
In our opinion, 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, 2018.
Report on Internal Control Over Compliance
Management of City of Iowa City, Iowa is responsible for establishing and maintaining effective internal
control over compliance with the types of compliance requirements referred to above. In planning and
performing our audit of compliance, we considered City of Iowa City, Iowa’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 City of Iowa City, Iowa’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 combination of deficiencies, in internal control over compliance, such that there is
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program 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 over
compliance 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.
Moline, Illinois
December 11, 2018
144
City of Iowa City, Iowa
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2018
Federal Pass-Through Passed Total
Federal Grantor/Pass-Through Grantor/CFDA Entity Identifying Through to Federal
Program Title or Cluster Title Number Number Subrecipients Expenditures
U.S. Department of Agriculture
Indirect:
Pass-through Iowa Department of Agriculture
Specialty Crop Block Grant Program-Farm Bill 10.170 15SCBGPIA0001 2,553$ 2,553$
U.S. Department of Housing
and Urban Development
Direct:
Community Development Block Grants (CDBG)/
Entitlement Grants Cluster:
CDBG/Entitlement Grants 14.218 B-14-MC-19-0009 971 971
CDBG/Entitlement Grants 14.218 B-15-MC-19-0009 14,486 35,444
CDBG/Entitlement Grants 14.218 B-16-MC-19-0009 49,366 245,834
CDBG/Entitlement Grants 14.218 B-17-MC-19-0009 201,856 310,845
Subtotal CDBG/Entitlement Grants Cluster 266,679 593,094
Home Investment Partnerships Program 14.239 M-14-MC-190205 180,107 181,202
Home Investment Partnerships Program 14.239 M-15-MC-190205 67,521 70,134
Home Investment Partnerships Program 14.239 M-16-MC-190205 206,857 252,396
Home Investment Partnerships Program 14.239 M-17-MC-190205 49,918 84,380
504,403 588,112
Public and Indian Housing 14.850 IA022-00000116D - 370
Public and Indian Housing 14.850 IA022-00000117D - 125,905
Public and Indian Housing 14.850 IA022-00000118D - 95,287
- 221,562
Housing Voucher Program Cluster:
Section 8 Housing Choice Vouchers 14.871 IA022VO - 8,689,021
Public Housing Capital Fund 14.872 IA05P022501-16 - 51,790
Public Housing Capital Fund 14.872 IA05P022501-17 - 102,589
- 154,379
Total U.S. Department of Housing
and Urban Development 771,082 10,246,168
U.S. Department of the Interior
Direct:
Historic Preservation Fund Grants-In-Aid 15.904 P17AP00060 - 8,026
U.S. Department of Justice
Direct:
Bulletproof Vest Partnership Program 16.607 2016-BUBX16082008 - 4,279
Edward Byrne Memorial Justice Assistance Grant 16.738 2015-DJ-BX-0661 - 1,249
Edward Byrne Memorial Justice Assistance Grant 16.738 2016-DJ-BX-0589 - 14,796
- 16,045 (1)
(Continued)
145
City of Iowa City, Iowa
Schedule of Expenditures of Federal Awards (Continued)
Year Ended June 30, 2018
Federal Pass-Through Passed Total
Federal Grantor/Pass-Through Grantor/CFDA Entity Identifying Through to Federal
Program Title or Cluster Title Number Number Subrecipients Expenditures
U.S. Department of Justice (Continued)
Indirect:
Pass-through International Association of
Chiefs of Police, Inc.
Crime Victim Assistance-Discretionary Grants 16.582 IACP-2018-7586-04 5,363$ 54,867$
Pass-through Iowa Department of Justice
Violence Against Women Formula Grants 16.588 VW-18-04-CJ - 63,583
Pass-through Iowa Governor's Office of Drug
Control Policy
Public Safety Partnership and
Community Policing Grants 16.710 16-CAMP-05 16,038 18,266
Edward Byrne Memorial Justice Assistance Grant 16.738 15-JAG-197460 56,736 88,868 (1)
Total U.S. Department of Justice 78,137 245,908
U.S. Department of Transportation
Direct:
Airport Improvement Program 20.106 3-19-0047-024-2017 - 71,837
Indirect:
Pass-through Iowa Department of Transportation
Highway Planning and Construction Program Cluster:
Highway Planning and Construction Program 20.205 HDP-3715(652)--71-52
- 117,860
Highway Planning and Construction Program 20.205 BROS-3715(663)--8J-52 - 35,195
Highway Planning and Construction Program 20.205 IA-95-X018-371-14
- 1,696,000
- 1,849,055
Pass-through Iowa Department of Transportation
and Metropolitan Planning Organization of
Johnson County
Highway Planning and Construction Program Cluster:
Highway Planning and Construction Program 20.205 18MPO-MPOJC
- 157,785
Subtotal Highway Planning and Construction
Program Cluster - 2,006,840
Direct:
Federal Transit Cluster:
Federal Transit-Formula Grants 20.507 IA-2018-008-01-00
- 1,497,897
Indirect:
Federal Transit Cluster:
Pass-through Iowa Department of Transportation
Federal Transit- Capital Investment Grants 20.500 IA-04-0117-371-12
- 325,360
Federal Transit- Capital Investment Grants 20.500 IA-34-0002-371-14 - 206,559
Federal Transit- Capital Investment Grants 20.500 IA-1812-2016-10-371-15
- 740,064
- 1,271,983
Bus and Bus Facilities Formula Program 20.526 IA-34-0002-371-14
- 509,264
Bus and Bus Facilities Formula Program 20.526 IA-2016-019-371-16
- 4,714
- 513,978
Subtotal Federal Transit Cluster - 3,283,858
(Continued)
146
City of Iowa City, Iowa
Schedule of Expenditures of Federal Awards (Continued)
Year Ended June 30, 2018
Federal Pass-Through Passed Total
Federal Grantor/Pass-Through Grantor/CFDA Entity Identifying Through to Federal
Program Title or Cluster Title Number Number Subrecipients Expenditures
U.S. Department of Transportation (Continued)
Indirect:
Pass-through Iowa Department of Transportation
and Metrpolitan Planning Organization of
Johnson County
Metropolitan Transportation Planning and State
and Non-Metropolitan Planning and Research 20.505 18MPO-MPOJC
-$ 42,215$
Pass-through Iowa Department of Transportation
Formula Grants for Rural Areas 20.509 IA-2016-027-371-16 - 349,744
Transit Services Program Cluster:
Enhanced Mobility of Seniors and Individuals
with Disabilities 20.513 IA-2016-026-01-371-18
- 108,764
Pass-through Iowa Department of Public Safety/
Governor's Traffice Safety Bureau
Highway Safety Cluster:
National Priority Safety Programs 20.616 PAP 17-405d-M6OT, Task 24 - 10,582
National Priority Safety Programs 20.616 PAP 18-405d-M6OT, Task 18 - 31,140
Subtotal Highway Safety Cluster - 41,722
Total U.S. Department of Transportation - 5,904,980
U.S. Department of Homeland Security
Indirect:
Pass-through Iowa Department of Homeland Security
and Emergency Management Division
Hazard Mitigation Grant 97.039 DR-4187-0003-01
- 201,484
Total Expenditures of Federal Awards 851,772$ 16,609,119$
(1) Total CFDA 16.738 $104,913
See Notes to the Schedule of Expenditures of Federal Awards.
147
City of Iowa City, Iowa
Notes to the Schedule of Expenditures of Federal Awards
Year Ended June 30, 2018
Note 1. Basis of Presentation
The accompanying schedule of expenditures of federal awards (schedule) includes the federal grant
activity of the City under programs of the federal government for the year ended June 30, 2018. The
information in this schedule is presented in accordance with the 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). Because the schedule presents only a selected
portion of the operations of the City, it is not intended to and does not present the financial position,
changes in net position or cash flows of the entity.
Note 2. Summary of Significant Accounting Policies
Expenditures reported on the schedule are reported on the modified accrual basis of accounting for
governmental funds and accrual basis of accounting for proprietary funds. Such expenditures are
recognized following the cost principles contained in the Uniform Guidance, wherein certain types of
expenditures are not allowable or are limited as to reimbursement. Expenditures of federal awards are
recognized in the accounting period when the liability is incurred and has met the eligibility criteria of the
federal grant.
Revenue from federal awards is recognized when the City has done everything necessary to establish its
right to the revenue. In the governmental funds, revenue from federal grants is recognized when the
revenue is both measureable and available. In proprietary funds, revenue from federal grants is
recognized when it is earned.
Pass-through entity identifying numbers are presented where available.
Note 3. Indirect Cost Rate
The City has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform
Guidance.
148
City of Iowa City, Iowa
Schedule of Findings and Questioned Costs
Year Ended June 30, 2018
I. Summary of the Independent Auditor's Results
Financial Statements
Type of auditor's report issued: Unmodified
Internal control over financial reporting:
● Material weakness(es) identified? Yes No
● Significant deficiency identified? Yes None Reported
● Noncompliance material to financial statements noted? Yes No
Federal Awards
Internal control over major programs:
● Material weakness(es) identified? Yes No
● Significant deficiency identified? Yes 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 2 CFR 200.516(a)? Yes No
Identification of major programs:
CFDA Number Name of Federal Program or Cluster
14.871 Housing Choice Voucher Cluster:
Section 8 Housing Choice Vouchers
Dollar threshold used to distinguish between type A and type B programs: $750,000
Auditee qualified as low-risk auditee? Yes No
(Continued)
149
City of Iowa City, Iowa
Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2018
II. Findings Relating to the Basic Financial Statements as Required to be Reported in
Accordance with Generally Accepted Government Auditing Standards
A. Internal Control
No matters reported.
B. Instances of Noncompliance
No matters reported.
III. Findings and Questioned Costs for Federal Awards
A. Internal Control for Federal Awards
No matters reported.
B. Instances of Noncompliance
No matters reported.
IV. Other Findings Related to Required Statutory Reporting
IV-A-18 Certified Budget – Expenditures for the year ended June 30, 2018 did not exceed the amounts budgeted.
IV-B-18 Questionable Expenditures – No expenditures were noted that we believe may not meet the
requirements of public purpose as defined in an Attorney General’s opinion dated April 25, 1979.
IV-C-18 Travel Expenses – No expenditures of City money for travel expenses of spouses of City
officials or employees were noted.
IV-D-18 Business Transactions – No business transactions between the City and City officials or
employees were noted.
IV-E-18 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 insure that the coverage
is adequate for current operations.
IV-F-18 Council Minutes – No transactions requiring Council approval which had not been approved by
the Council were noted.
IV-G-18 Deposits and Investments – No instances of noncompliance with the deposit and investment
provisions of Chapter 12B and Chapter 12C of the Code of Iowa and the City’s investment policy were
noted.
IV-H-18 Revenue Notes – There were no instances of noncompliance with revenue note provisions.
IV-I-18 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.
IV-J-18 Payment of General Obligation Bonds – The City appears to be in compliance with Chapter
384.4 of the Code of Iowa.
150