HomeMy WebLinkAbout2008-01-07 CorrespondencePage 1 ~of~2
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Marian Karr
From: Dale Helling
Sent: Monday, January 07, 2008 9:21 AM
To: Amy Correia
Cc: R Bailey; Marian Karr; Regenia Bailey; Kevin O'Malley
Subject: RE: Budget Questions
Amy,
Thanks for forwarding your questions. I think we will address many of them during the presentations this evening
and tomorrow evening. We'll try to keep your questions in mind as we go and I trust you will raise any issues that
you wish to have further explained or that you want addressed in more detail. I'll have a copy of the Police Chief's
memo for you this evening.
Best regards,
Dale
From: Amy Correia
Sent: Sunday, January 06, 2008 3:44 PM
To: Dale Helling; Kevin O'Malley
Cc: R Bailey; Marian Karr; Regenia Bailey
Subject: Budget Questions
MEMO
Date: January 6, 2007
To: Dale Helling and Kevin O'Malley
From: Amy Correia
Re: FY 2009 Budget Questions
CC: Mayor Regenia Bailey and Marian Karr
As I review and prepare to make deliberations over the proposed FY 2009 budget, I find that I have
questions. Please let me know if these questions are routine enough in nature that you can supply me with
information that is readily available to you, or if these questions should be presented to the Council as a
body for their consideration.
~ Reserve Policies (p.7): What are the existing bond ordinance provisions? Can I receive a copy of
this ordinance?
~ Fleet: What policies/procedures do we have governing the fleet? What is our fleet size and
utilization? Are there standard municipal best practices regarding maintaining a fleet?
~ Debt Services levy: I am interested in a more in-depth discussion/explanation of the significant
increase in this levy from 2008 to 2009.
~ Other financing sources (p. 18): What is the rationale for moving expenses and revenues fox Streets
and Traffic out of the General Fund and into the Road Use Tax Fund? What are the implications
for such a move out of the General Fund?
~ Supplies (p. 22): What accounts for such a large jump (12%) in supplies? In which departments are
we seeing-the large jumps and why? Have departments been asked to identify cost containment and
1/7/2008
Page 2 of 2
conservation efforts? Other municipalities might be experiencing similar challenges, are there municipal
best practices for cost containment and conservation?
~ Parkland Acquisition: What is our policy for parkland acquisition and use of the funds in the
parkland acquisition fund?
~ Interfund loans (p. 23): Do we have a formal policy on interfund loans, if so I am interested in
looking at it, if not, what is our informal practice?
~ Transit Improvement Reserve (p. 23): The figures here are dramatically different from what we
passed in the 2008-2010 budget. What accounts for this change, and what are the implications?
~ New Police Officers: I would like to receive a copy of the memo the Police Chief sent to the
council previously regarding recommended staffing levels.
~ What is "Building and Development" revenue? (Found in the following budgets: HIS Department
Administration, Building Inspection, Engineering Services, Road Use Tax, Street System
Maintenance, Urban Planning, ). Is this revenue generated by the separate departments of generated
by other departments? What policy guides the decision about where this revenue is placed? What
constitutes the work provided by the City that is paid for by building and development revenue (for
example, Building Inspectors go out and inspect new property).
~ What is code enforcement revenue? In the budget where code enforcement revenue is present, is
this code enforcement funding paid directly to that department for work performed by that
department?
~ How is the revenue balance in the Building Inspection budget handled?
~ What are our policies regarding inta city charges? I am specifically interested in infra-city charges
regarding services that General Fund departments (City Attorney, Personnel, and Finance) provide
to Enterprise Fund departments (Parking, Water, Wastewater, Landfill, Refuse, etc.).
1/7/2008
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EideBaillyM
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CPAs & BUSINESS ADVISORS
To the Honorable Mayor and Members of the City Council
City of Iowa City, Iowa
We have audited 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, for the year ended June 30,
2007, and have issued our report thereon dated December 13, 2007. Professional standards require that we
provide you with the following information related to our audit.
Our Responsibility under Auditing Standards Generally Accepted in the United
States of America and OMB Circular A-133
As stated in our engagement letter dated July 10, 2007, our responsibility, as described by professional standards,
is to plan and perform our audit to obtain reasonable, but not absolute, assurance about whether the financial
statements are free of material >nisstatement and are fairly presented in accordance with accounting principles
generally accepted in the United States of America. Because an audit is designed to provide reasonable, but not
absolute, assurance and because we did not perform a detailed examination of all transactions, there is a risk that
material misstatements may exist and not be detected by us.
In planning and performing our audit, we considered the City's internal control over financial reporting in order to
determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not
to provide assurance on the internal control over financial reporting. We also considered internal control over
compliance with requirements that could have a direct and material effect on a major federal program in order to
determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report
on internal control over compliance in accordance with OMB Circular A-133.
As part of obtaining reasonable assurance about whether the City's fmancial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and
grants, 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. Also, in accordance with OMB Circular A-133, we examined, on a test basis, evidence about the City's
compliance with the types of compliance requirements described in the U.S. Office of Management and Budget
(OMB) Circular A-133 Compliance Supplement applicable to each of its major federal programs for the purpose
of expressing an opinion on the City's compliance with those requirements. While our audit provides a reasonable
basis for our opinion, it does not provide a legal determination on the City's compliance with those requirements.
PEOPLE. PRINCIPLES. POSSIBILITIES.
www.eidebailly.com
3999 Pennsylvania Ave., Ste. 1001 Dubuque, Iowa 52002-2273 1 Phone 563.556.17901 Fax 563.557.78421 EOE
To the Honorable Mayor and Members of the City Council
City of Iowa City, Iowa
Page 2
Significant Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. In accordance with the
terms of our engagement letter, we will advise management about the appropriateness of accounting policies and
their application. The significant accounting policies used by the City of Iowa City, Iowa, are described in Note 1
to the financial statements. No new accounting policies were adopted, and the application of existing policies was
not changed during the year ended June 30, 2007. We noted no transactions entered into by the City during the
year that were both significant and unusual, and of which, under professional standards, we are required to inform
you, or transactions for which there is a lack of authoritative guidance or consensus.
Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management's knowledge and experience about past and current events and assumptions about future events.
Certain accounting estimates are particularly sensitive because of their significance to the financial statements and
because of the possibility that future events affecting them may differ significantly from those expected.
Audit Adjustments
For purposes of this letter, professional standards define an audit adjustment as a proposed correction of the
financial statements that, in our judgment, may not have been detected except through our auditing procedures.
An audit adjustment may or may not indicate matters that could have a significant effect on the City's financial
reporting process (that is, cause future financial statements to be materially misstated). In our judgment, none of
the adjustments we proposed, whether recorded or unrecorded by the City, either individually or in the aggregate,
indicate matters that could have a significant effect on the City's financial reporting process. Recorded audit
adjustments were in the areas of accounts payable and unbilled receivables. There were no unrecorded proposed
audit adjustments.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or
not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be
significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements
arose during the course of our audit.
Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters,
similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an
accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may
be expressed on those statements, our professional standards require the consulting accountant to check with us to
determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with
other accountants.
To the Honorable Mayor and Members of the City Council
City of Iowa City, Iowa
Page 3
Issues Discussed Prior to Retention of Independent Auditors
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City's auditors. However, these discussions
occurred in the normal course of our professional relationship, and our responses were not a condition to our
retention.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Other Comments
We have included additional comments regarding financial reporting. These comments are not a result of in-depth
study of any specific areas but are based on observations made during the course of our audit.
This information, a public record by law, is intended solely for the use of the officials, employees, and citizens of
the City of Iowa City, Iowa, and other parties to whom the City of Iowa City, Iowa, may report, including federal
awarding agencies and pass-through entities, and is not intended to be and should not be used by anyone other
than these specified parties.
As always, we will be happy to discuss these or any other topics at your convenience. We would like to take this
opportunity to express our appreciation to you and your staff for the fine cooperation that we received during the
course of the audit. We look forward to many years of continued service to the City of Iowa City, Iowa.
~~~~
Dubuque, Iowa
December 13, 2007
CITY OF IOWA CITY, IOWA
YEAR ENDED JUNE 30, 2007
OTHER COMMENTS
RETIREMENT GIFTS
During our audit, we became aware of two employees receiving City paid gifts at retirement. Currently, the City
has no policy regarding gifts to employees, whether at retirement or in-service. The public purpose of such gifts is
often unclear. It would be in the City's best interest to develop policies and procedures regarding gifts to
employees that would clearly define eligible employees, cost guidelines, and public purpose.
MERCER PARK LIGHTING PURCHASE
During our audit, we identified an expenditure that was not made in accordance with the City's purchasing policy.
The expenditure was for the Mercer Park lighting project. Current City policy requires the department to obtain
bids and have an approved purchase order before any purchase over $5,000 can be made. There is an exception to
the bid requirement, if there is only one source from which the purchase can be made. In the case of a sole source
purchase, written justification of the purchase is to be provided and must be approved by the purchasing
department before contract is awarded. Lights for the Mercer Park lighting project were purchased on October 1 1,
2007, for $207,593. No bids were received, and the purchase order was not completed until October 15, 2007.
Sole source justification was completed on October 17, 2007. We recommend that all departments within the City
comply with the City's written purchasing policy.
Iowa Code competitive bidding procedures are required for public improvements over $100,000. It is not clear
under Iowa Code if the lighting project is a public improvement. We recommend the City's legal department
review the purchase and future purchases to insure the City complies with Iowa Code.
NEW GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) STANDARDS
The Governmental Accounting Standards Board (GASB) has issued seven statements not yet implemented by the
City of Iowa City. The statements, which might impact the City of Iowa City, are as follows:
Statement No. 43, Financial Reporting for Posternployment Benefit Plans Other Than Pension Plans, issued April
2004, will be effective for the City for the fiscal year ending June 30, 2008. This statement establishes uniform
financial reporting standards for other postemployment benefit (OPEB) plans and supersedes the interim guidance
included in Statement No. 26. This statement affects reporting by administrators or trustees of OPEB plan assets
or by employers or sponsors that include OPEB plan assets as trust or agency funds in their financial reports-
Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Tlaan
Pensions, issued June 2004, will be effective for the City for the fiscal year ending June 30, 2009. This statement
establishes standards for the measurement, recognition, and display of OPEB expense/expenditures and related
liabilities (assets), note disclosures and, if applicable, required supplementary information in the financial reports
of state and local governmental employers.
Statement No. 47, Accounting for Termination Benefits, issued June 2005, establishes accounting standards for
termination benefits. For termination benefits provided through an existing defined benefit OPEB plan, the
provisions of this statement should be implemented simultaneously with the requirements of Statement No. 45.
For all other termination benefits, this statement is effective for the fiscal year ended June 30, 2006.
CITY OF IOWA CITY, IOWA
YEAR ENDED JUNE 30, 2007
OTHER COMMENTS
Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets
and Future Revenues, issued September 2006, will be effective for the fiscal year ending June 30, 2008. This
statement establishes standards for transactions in which a government receives, or is entitled to, resources in
exchange for future cash flows generated by collecting specific receivables or specific future revenues. It also
establishes standards that apply to all intra-entity transfers of assets and future revenues.
Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations, issued November
2006, will be effective for the fiscal year ending June 30, 2009. This statement establishes standards for
accounting and financial reporting for obligations to address the current or potential detrimental effects of existing
pollution.
Statement No. 50, Pension Disclosures, issued May 2007, will be effective for the fiscal year ending June 30,
2008. This statement more closely aligns the financial reporting requirements for pensions with those for other
postemployment benefits.
Statement No. 51, Accounting and Financial Reporting for Intangible Assets, issued June 2007, will be effective
for the fiscal year ending June 30, 2010. This statement requires that all intangible assets not specifically excluded
by its scope be classified as capital assets.
RISK ASSESSMENT AUDIT STANDARDS
The Auditing Standards Board of the American Institute of Certified Public Accountants has issued a suite of new
auditing standards (Statements of Auditing Standards Nos. 104-111) related to the consideration of audit risk.
These Statements establish standards and provide guidance concerning the auditor's assessment of the risks of
material misstatement (whether caused by error or fraud) in a financial statement audit. They also provide
guidance on designing and performing audit procedures that are responsive to those assessed risks. Additionally,
the Statements establish standards and provide guidance on planning and supervision (determining audit risk and
materiality), the nature of audit evidence, and evaluating whether the audit evidence obtained affords a reasonable
basis for an opinion on the financial statements under audit.
The primary objective of these standards is to enhance the auditor's consideration of audit risk by specifying,
among other things:
• Amore in-depth understanding of the entity and its environment, including its internal control, to identify
the risks of material misstatement in the financial statements and what the entity is doing to mitigate those
risks.
Based upon the understanding obtained, a more rigorous assessment of the risks of where and how
financial statements could be materially misstated.
• Improved linkage between the auditor's assessment of risks and the nature, timing, and extent of audit
procedures performed in response to those risks.
Auditors will be required to implement these standards for all audit engagements for periods beginning on or after
December 15, 2006. As a result, these standards will be in effect for the audit of your financial statements for the
year ending June 30, 2008. These standards may have an impact on the City's audit.
Court Street Transportation Center
CITY OF IOWA CITY, IOWA
Comprehensive Annual
Financial Report
For the Fiscal Year Ended June 30, 2007
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
CITY OF IOWA CITY, IOWA
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
PREPARED BY:
FINANCE DEPARTMENT
CITY OF IOWA CITY, IOWA
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CITY OF IOWA CITY, IOWA
TABLE OF CONTENTS
June 30, 2007
INTRODUCTORY SECTION
Page
Table of contents ................................................................................................................................ 1
Letter of transmittal ............................................................................................................................ 3
City organizational chart .................................................................................................................... 10
City officials ....................................................................................................................................... 11
Certificate of Achievement for Excellence in Financial Reporting ................................................... 12
FINANCIAL SECTION
INDEPENDENT AUDITOR' S REPORT ......................................................................................... 13
MANAGEMENT' S DISCUSSION AND ANALYSIS .................................................................... 15
BASIC FINANCIAL STATEMENTS
Government-wide financial statements
Statement of net assets ................................................................................................................. 26
Statement of activities .................................................................................................................. 28
Fund financial statements
Balance sheet -governmental funds ............................................................................................ 30
Reconciliation of the balance sheet of the governmental funds to the statement of net assets .... 32
Statement of revenues, expenditures, and changes in fund balances -governmental funds ....... 33
Reconciliation of the statement of revenues, expenditures, and changes in fund balances of
governmental funds to the statement of activities ..................................................................... 35
Statement of net assets -proprietary funds ................................................................................. 36
Statement of revenues, expenses, and changes in fund net assets -proprietary funds ................ 39
Statement of cash flows -proprietary funds ................................................................................ 40
Statement of fiduciary assets and liabilities ................................................................................. 42
Notes to financial statements .......................................................................................................... 43
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary comparison schedule -budget and actual -all governmental funds and enterprise ...
funds -budgetary basis ..................................................................................... 70
Budgetary comparison schedule -budget to GAAP reconciliation ................................... 72
Note to required supplementary information -budgetary reporting ................................... 73
COMBINING AND INDIVIDUAL FUND STATEMENTS
Combining balance sheet -nonmajor governmental funds ............................................................ 76
Combining statement of revenues, expenditures, and changes in fund balances -nonmajor
governmental funds ...................................................................................................................... 77
Combining statement of net assets -nonmajor enterprise funds .................................................... 80
Combining statement of revenues, expenses, and changes in fund net assets -nonmajor
enterprise funds ............................................................................................................................ 81
Combining statement of cash flows -nonmajor enterprise funds .................................................. 82
Combining statement of net assets -internal service funds ........................................................... 84
Combining statement of revenues, expenses, and changes in fund net assets -internal service
funds ............................................................................................................................................. 85
Combining statement of cash flows -internal service funds .......................................................... 86
Combining statement of changes in assets and liabilities -agency funds ...................................... 88
CITY OF IOWA CITY, IOWA
TABLE OF CONTENTS
June 30, 2007
STATISTICAL SECTION (UNAUDITED)
Page
Net assets by component .................................................................................................................... 93
Changes in net assets .......................................................................................................................... 94
Fund balances -governmental funds ................................................................................................. 96
Changes in fund balances -governmental funds ............................................................................... 97
General government tax revenues by source ...................................................................................... 98
Assessed and taxable value of property .............................................................................................. 99
Property tax rates -direct and overlapping governments .................................................................. 100
Property tax budgets and collections .................................................................................................. 101
Principal taxpayers ............................................................................................................................. 102
Ratios of outstanding debt by type ..................................................................................................... 103
Ratios of general obligation bonded debt to assessed value and net bonded debt per capita ............. 104
Ratio of annual debt service expenditures for general bonded debt to total general governmental
expenditures ..................................................................................................................................... 105
Computation of direct and overlapping debt ...................................................................................... 106
Legal debt margin information ........................................................................................................... 107
General obligation debt annual maturity schedule ............................................................................. 108
Schedule of revenue bond coverage ................................................................................................... 109
Revenue debt annual maturity schedule ............................................................................................. 110
Demographic and economic statistics ................................................................................................ 111
Principal employers ............................................................................................................................ 112
Full-time equivalent city government employees by function ........................................................... 114
Operating indicators by function ........................................................................................................ 116
Capital assets by function ................................................................................................................... 118
COMPLIANCE SECTION
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.. 121
Report on compliance with requirements applicable to each major program and internal
control over compliance in accordance with OMB Circular A-133 ................................................ 123
Schedule of expenditures of federal awards ....................................................................................... 125
Notes to the schedule of expenditures of federal awards ................................................................... 128
Schedule of findings and questioned costs ......................................................................................... 129
December 14, 2007
To the Citizens, Honorable Mayor, Members
of the City Council and City Manager
City of Iowa City, Iowa
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CITY OF IOWA CITY
The Comprehensive Annual Financial Report (CAFR) of the City of Iowa City, Iowa (the City)
for the fiscal year ended June 30, 2007 is submitted herewith in accordance with the provisions of
Chapter 11 of the Code of Iowa. The City's Finance Department prepared this report.
Responsibility for both the accuracy of the data presented and the completeness and fairness of
the presentation, including all disclosures, rest with the City. I believe the information, as
presented, is accurate in all material respects and presented in a manner designed to fairly present
the financial position and results of operations of the City. All disclosures necessary to enable the
reader to gain an understanding of the City's financial affairs have been included.
This report consists of management's representation concerning the finances of the City of Iowa
City. Management assumes full responsibility for the completeness and reliability of all of the
information presented in this report. To provide a reasonable basis for making these
representations, management of the City has established a comprehensive internal control
framework that is designed both to protect the government's assets from loss, theft, or misuse and
to compile sufficient reliable information for the preparation of the City's financial statements in
conformity with accounting principles generally accepted in the United States of America
(GAAP). Because the cost of internal controls should not outweigh their benefits, the City's
comprehensive framework of internal controls has been designed to provide reasonable rather
than absolute assurance that the financial statements will be free from material misstatement. As
management, we assert that, to the best of our knowledge and belief, this financial report is
complete and reliable in all material respects.
The CAFR reflects all funds of the City in accordance with standards set by the Governmental
Accounting Standards Board (GASB). In 1999, GASB adopted Statement No. 34, Basic
Financial Statements -Management's Discussion and Analysis - For State and Local
Governments. The final effective date for the implementation of GASB No. 34 for the City of
Iowa City was June 30, 2003. This report complies with those standards. This statement
significantly changes governmental financial reporting in order to bring it closer to a private
sector model.
The City is required to undergo an annual single audit in conformity with the provisions of the
Single Audit Act of 1996 and the U.S. Office of Management and Budget (OMB) Circular A-133,
Audits of State and Local Governments. Information related to this single audit, including the
schedules of federal financial assistance, findings and questioned costs, and independent auditors'
reports on the internal accounting and administrative controls and compliance with applicable
laws and regulations are included in the compliance section of this report.
GAAP require that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management's Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement the MD&A and should be read in
conjunction with it. The City's MD&A can be found immediately following the report of the
independent auditors.
The City of Iowa City's financial statements have been audited by Eide Bailly, LLP of Dubuque,
Iowa, a firm of licensed certified public accountants. The goal of the independent audit was to
provide reasonable assurance that the City's financial statements for the fiscal year ended, June 30,
2007 are free of material misstatement. The independent audit involved examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements; assessing the
accounting principles used and significant estimates made by management; and evaluating the
overall financial statement preparation. The independent auditor concluded, based upon the audit,
that there was a reasonable basis for rendering an unqualified opinion that the City of Iowa City's
financial statements for the fiscal year ended, June 30, 2007, are fairly presented in conformity with
GAAP.
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 afour-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, but three members are nominated from specific districts, and the four other
members are nominated at large. The Council elects the Mayor from its own members for atwo-
year term.
The City Council is the legislative body and makes all policy determinations for the City through
the enactment of ordinances and resolutions. It also adopts a budget to determine how the City will
obtain and spend its funds. The Council appoints members of boards, commissions and
committees.
The City Manager is the chief administrative officer for the City and is appointed by the City
Council. The City Manager implements policy decisions of the City Council and enforces City
ordinances. In addition, the City Manager appoints and directly supervises the directors of the
City's operating departments and supervises the administration of the City's personnel system. He
supervises 545 full-time and 88 permanent part-time municipal employees and 455 temporary
employees including a police force of 73 sworn personnel and a fire department of 56 firefighters.
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. Since 1971, the City has operated 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 athree-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 aone-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. Encumbrances outstanding at year-end for the governmental fund types are
reflected as reservations of the fund balances. Appropriations that are not encumbered lapse at the
end of the year.
Information useful in assessing the government's economic condition
The City's economic strength is based upon education, medical services, and diversified
manufacturing. The University of Iowa is the City's largest employer with almost 25,500
employees and the University of Iowa Hospitals and Clinics is the largest university-owned
teaching medical center in the United States. The City also has a significant number of private
employers who have a history of providing stable and increasing employment in the community.
The relative stability of the University of Iowa, coupled with the City's multi-sector base of
industrial and commercial interests, will continue to help insulate the City from the significant
negative economic impacts related to unemployment.
The City continues to see sustained production in our major local industries, such as ACT, Proctor
& Gamble, and Pearson. Continued economic development efforts involving the Iowa City and
Coralville Chambers of Commerce, local private interests, the University of Iowa and other
surrounding communities through participation as members of the Iowa City Area Development
Group, have proved positive with the retention and expansion of businesses. In addition, the
corridor between Iowa City and Cedar Rapids has been identified as one of the major growth areas
for new business development in the State of Iowa. Continued developments within Iowa City and
the region have a favorable impact upon the City's economy.
There have been improvements in the budget challenges faced by the State of Iowa, however, the
City's economy as a whole continues to grow. The major employers have been able to maintain
their workforce size. The unemployment rate for Johnson County continues to remain low at
between 2.4°10 and 2.9%. The City has consistently experienced modest increases in assessed
property valuations. New housing construction continues to be relatively strong with 137 new
single-family houses and 201 multi-family units added to the tax rolls for the year ended
December 31, 2006. This, along with the low unemployment rate, continues to be indicative of
the City's economic well being.
The 2000 census population of Iowa City was 62,220. After further review by the United Census
Bureau, the population was revised to 62,887 in 2006. This represents a 5.0°10 increase over the
1990 population of 59,738.
In preparing the financial plan for the three years ending June 30, 2010, the process of budget
balancing has again been most difficult. With the continued tax limitations imposed by the state
(specifically the residential rollback factor) and other federal and state regulations and mandates,
the municipal service needs for our growing community are becoming increasingly difficult to
satisfy.
In balancing the budget for the three-year period, the City attempted to maintain service levels,
wherever practical. In addition, our planning has been directed at maintaining our current fiscal
strength and avoiding any erosion of that fiscal position, including the City's Aaa bond rating.
A continuing major objective in the three-year financial plan is to maintain or increase the City's
cash reserve position. In addition, procedures were adopted to allocate unreserved fund balances
between the contingency and undesignated fund balances. The contingency fund is available during
the fiscal year for unanticipated and unbudgeted expenditures, while the undesignated fund balance
is intended to be maintained as working capital. The City is committed to drawing from the
undesignated fund balance only in emergency situations. This unreserved fund balance allocation
along with specific budgeting techniques has allowed the City to increase or maintain fund balances
over the past year.
The City continues to pursue cooperative efforts with other local governments. Joint funding,
purchasing, planning and other efforts allow the City to meet mandates for new and improved
services in the future at the most reasonable cost. Joint cooperation currently encompasses
regional transportation planning, human services, solid waste management planning, a hazardous
materials response program, an enhanced 911 emergency communications system, community
relations, joint operation of an animal control facility, joint operation of an indoor swimming pool
facility, and joint economic development efforts. While such cooperative efforts are not new in
concept, the City expects to enter into more agreements with neighboring governmental
subdivisions, as well as with the University of Iowa.
There are many signs that the City remains healthy and vibrant with great promise for the future.
The University of Iowa continues to add new buildings and facilities. The City continues to see
sustained production in major local industries. Industrial and commercial interests within the
community have continued to thrive.
The City will be challenged during the next couple of years to maintain its vitality through greater
economic development efforts, fiscal restraint in local government, and continued cooperation
among local government officials. We are confident that the City is positioning itself to better meet
the needs of the community in the future through more effective long-term financial planning, and
increased financial strength and stability of the City. The City Council and its staff are committed
to managing the City's destiny well into the future.
Major Initiatives
The City continues to be proactive in maintaining and building its streets, bridges, storm water
mains, and trail systems and spent approximately $7,398,000 in fiscal year 2007 on various
projects. The major projects were the widening of US Highway 6 from Lakeside Drive to the
eastern city limits, including traffic controls; completion of Camp Cardinal Boulevard, an arterial
street connecting western Iowa City to Coralville; and widening State Highway 1(North Dodge
Street) to Interstate 80.
Construction continued on Phase 2 of the Mormon Trek Boulevard Extension, a three phase project
to construct a southern arterial lining western and eastern sides of the City. Phase 1 began in FY02
with design costs, continued with land acquisition in FY03 and construction work concluding in
FY06. Cost of Phase 1 was $3.7 million. Phase 2 of the Mormon Trek Boulevard Extension is
construction of a box culvert and the closing of an airport runway. Estimated cost of Phase 2 will
be $3.6 million. Phase 3 will be the construction of McCollister Road and a bridge spanning the
Iowa River. Estimated costs of Phase 3 are $7 million. When all phases are completed, the
roadway will serve a combination of through and local traffic needs. Estimated costs for the entire
project total $14.3 million with $6 million in federal funding.
The Iowa City Housing Authority provides rental assistance for 1,150 units, with an annual
contribution contract with the Federal Government of $6,400,000. Community Development Block
Grant and HOME Community Development Block Grant and Home Investment Partnership funds
totaling approximately $1,633,000 were utilized for economic development, housing, public
services and facilities, and planning activities during fiscal year 2007. Community and Economic
Development also leveraged approximately $1,128,000 million in other funds. These programs
provide for broad based financial impacts locally for builders, developers, and others.
Financial Information
Single Audit: As a recipient of federal financial assistance, the City is responsible for ensuring that
adequate internal controls are in place to ensure compliance with applicable laws and regulations
related to those programs. These internal accounting and administrative controls are subject to
periodic evaluation by the City's management.
The results of the City's single audit for the fiscal year ended June 30, 2007 provided no instances of
material weaknesses in the internal controls or significant violations of applicable laws and
regulations based upon the audit of the basic financial statements.
Retirement Plans: With the exception of police and fire employees, substantially all permanent
City employees are covered by the Iowa Public Employees Retirement System (IPERS). The state
annually sets the contribution rate for all municipal entities and covered employees. All covered
employees are required to contribute 3.7°10 of their salary, while employers contribute 5.75%. There
is no allocation or measurement of unfunded liability to any municipal entity and, upon the
retirement of employees, IPERS has the sole responsibility for their benefits. The City has no
responsibility to pay employee pension benefits of IPERS besides the required contribution.
The City's police and fire employees are covered by the Municipal Fire and Police Retirement
System of Iowa (MFPRSI). This statewide system is acost-sharing multiple-employer public
employee retirement system. The state annually sets the contribution rate for all municipal
entities and employees. The City has no responsibility to pay employee pension benefits of
MFPRSI besides the required contribution.
Cash Management: The majority of the City's investment activity is carried on by the City's
investment pool, except for those funds which are required to maintain their investments separately.
This pooled concept provides for greater investment earnings that are then allocated to the City's
funds on a systematic basis.
The intention of the cash management system is to limit the amount of funds placed in accounts
where low or no interest is paid. Idle cash is invested in various instruments with various
maturity dates of less than one year, depending on the anticipated cash requirements during the
period.
The overall strategy of holding deposits and making investments is to expose the City to a minimum
amount of credit risk and market risk. All bank balances of deposits as of the balance sheet date are
entirely insured or collateralized with securities held by the State of Iowa Sinking Fund.
For the year ended June 30, 2007, the City earned $7,651,000 from all investments, an increase of
$2,398,000 from the prior year. The following table shows how this was allocated by fund type
for the fiscal years 2007 and 2006:
2007 2006
Investment Investment
Fund Tvpe Earnings Earnings
(in thousands) (in thousands)
Governmental $ 4,045 $ 2,678
Business-type 3.606 2.575
Totals ~ 7_(51 ~ 5253
Risk Management: The City is exposed to a variety of accidental losses and has established a risk
management strategy that attempts to minimize losses and the carrying cost of insurance.
Risk control techniques have been established to reasonably ensure that the City's employees are
aware of their responsibilities regarding loss exposures related to their duties. In a similar manner,
risk control techniques have been established to reduce possible losses to property owned by or
under the control of the City. Furthermore, supervisory personnel are held responsible for
monitoring risk control techniques on an operational basis. The City completed its seventeenth year
under a property and liability insurance program that provides fora $100,000 self-insured retention
per occurrence on property losses, a $500,000 self-insured retention per occurrence on liability, and
a $400,000 self-insured retention on workers' compensation losses. The insurance provides
coverage for claims in excess of the aforementioned self-insured retention up to a maximum of
$19,000,000 annual aggregate of the losses paid. The operating funds pay annual premiums to the
Loss Reserve Fund, which is accounted for as an internal service fund. The balance in the Loss
Reserve Fund is available to cover the self-insured retention amounts and any uninsured losses.
The total assets in the Loss Reserve Fund as of June 30, 2007 were $6,419,000.
Independent Audit: Chapter 11 of the Code of Iowa requires an annual audit to be performed.
The independent public accounting firm of Eide Bailly LLP was selected by the City. In addition to
meeting the requirements set forth in Chapter 11, the audit was also designed to meet the
requirements of the Single Audit Act of 1996 and related OMB Circular A-133. The independent
auditors' report on the basic financial statements and combining and individual fund statements and
schedules is included in the financial section of this report. The independent auditors' reports
related specifically to the single audit are included in the compliance section of this report.
The financial statements are the responsibility of the City. The responsibility of the certified
public accountants is to express an opinion on the City's financial statements based on their audit.
An audit is conducted in accordance with generally accepted auditing standards. Those standards
require that the audit be planned and performed in a manner to obtain a reasonable assurance as to
whether the financial statements are free of material misstatement.
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,
2006. The Certificate is the highest form of recognition for excellence in state and local financial
reporting.
In order to be awarded the Certificate, a governmental unit must publish an easily readable and
efficiently organized Comprehensive Annual Financial Report, whose contents conform to program
standards. The Comprehensive Annual Financial Report must satisfy both accounting principles
generally accepted in the United States of America and applicable legal requirements.
The Certificate is valid for a period of one year only. The City has received the Certificate for the
last twenty-two consecutive years. I believe our current report continues to conform to the
Certificate requirements and am submitting it to GFOA to determine its eligibility for another
certificate.
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, 2007. 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, Robin
Marshall, Assistant Controller, Sara Sproule, and Internal Auditor, Nickolas Schaul.
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,
c
11~i~ ~ ~ ~~ ~C, .
Kevin O'Malley
Director of Finance
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CITY OF IOWA CITY, IOWA
LISTING OF CITY OFFICIALS
June 30, 2007
ELECTED OFFICIALS
Mayor
Council Member and Mayor Pro tem
Council Member
Council Member
Council Member
Council Member
Council Member
Ross Wilburn
Regenia Bailey
Connie Champion
Amy Correia
Bob Elliott
Mike O'Donnell
Dee Vanderhoef
APPOINTED OFFICIALS
City Manager
City Clerk
City Attorney
Stephen J. Atkins
Marian K. Karr
Eleanor Dilkes
DEPARTMENT DIRECTORS
Assistant City Manager
Director of Housing and Inspection Services
Library Director
Director of Planning & Community Development
Director of Public Works
Director of Parking and Transit
Senior Center Coordinator
Fire Chief
Parks and Recreation Director
Director of Finance
Chief of Police
Dale E. Helling
Douglas W. Boothroy
Susan Craig
Jeff Davidson
Rick Fosse
Joseph Fowler
Linda Kopping
Andrew Rocca
Terry G. Trueblood
Kevin O'Malley
Sam Hargadine
11
Term Expires
January 1, 2008
January 1, 2008
January 1, 2010
January 1, 2010
January 1, 2008
January 1, 2010
January 1, 2008
Date of Hire
July 20, 1986
May 21, 1979
March 18, 1996
August 16, 1975
September 22, 1975
July 28, 1975
January 26, 1981
February 22, 1984
January 2, 1970
March 20, 1995
July 14, 1978
February 18, 1986
August 19, 1985
August 29, 2005
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Iowa City
Iowa
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2006
12
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tia~~irii~~Jl 4rrl 411:;;.
~~~~
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, 2007. 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 - 9 of this report.
Financial Highlights
• The assets of the City of Iowa City exceeded its liabilities at the close of the fiscal year ending June
30, 2007 by $350,357,000 (net assets). Of this amount, $44,738,000 (unrestricted net assets) may be
used to meet the government's ongoing obligations to its citizens and creditors.
• The City's total net assets increased by $23,435,000 during the fiscal year. Governmental activities
increased by $7,345,000 and business-type activities increased by $16,090,000.
• At the close of the current fiscal year, the City's governmental funds reported combined ending fund
balances of $36,629,000, an increase of $4,676,000 in comparison with the prior year. Of this total
amount, approximately $29,788,000, or 81°10 was unreserved and is available for spending at the
City's discretion.
• At the end of the current fiscal year, the City's unreserved, undesignated fund balance for the General
Fund was $18,528,000, or 41°10 of total General Fund expenditures.
• The City's total debt decreased by $4,375,000, during the current fiscal year. The key factor to this
decrease was the retirement of bonds.
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 aprivate-sector
business.
The statement of net assets presents information on all of the City's assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets 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 assets changed during the
most recent fiscal year. All changes in net assets 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, traffic
controls, and transit), Culture and Recreation, Community and Economic Development, General
Government, and Interest on long-term debt. The business-type activities of the City include Airport,
Cable Television, Housing Authority, Parking, Sanitation, Stormwater Collection, Wastewater Treatment,
and Water.
15
The government-wide financial statements may be found on pages 26 - 29 of this report.
Fund Financial Statements: A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The City, like other state
and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements. All of the funds of the City can be divided into three categories: governmental funds,
proprietary funds, and fiduciary funds.
Governmental Funds: Governmental funds are used to account for essentially the same function
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government's near-term
financing requirements and is typically the basis that is used in developing the next annual budget.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. Both the
governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and
changes in fund balances provide a reconciliation to facilitate this comparison.
The City has five major governmental funds: General Fund, Employee Benefits Fund, Community
Development Block Grant Fund, Capital Projects -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 30 - 35 of this report.
Proprietary Funds: The City maintains two different types of proprietary funds. Enterprise funds are
used to report the same functions presented as business-type activities in the government-wide financial
statements. The City uses enterprise funds to account for its Airport, Cable Television, Housing
Authority, Parking, Sanitation, Stormwater Collection, 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 provide the same type of information as the government-wide financial statements, only
in more detail. Wastewater Treatment, Water, Sanitation, and Housing Authority Funds are considered to
be major funds and are reported individually throughout the report. The other 4 non-major enterprise
funds are grouped together for reporting purposes and listed under a single heading "Other Enterprise
Funds". Detailed information for each of the non-major funds is provided in the combining statements on
pages 80 - 82. Individual fund data for the Internal Service funds is provided in the form of combining
statements elsewhere in this report.
16
The basic proprietary fund financial statements can be found on pages 36 - 41 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 two fiduciary funds: Project
Green and Library Foundation, which are maintained as agency funds.
The basic fiduciary funds financial statements can be found on page 42.
Notes to Financial Statements: The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The notes to
the financial statements can be found on pages 43 - 68 of this report.
Other Information: The combining statements referred to in the above paragraphs in connection with
non-major governmental funds, non-major enterprise funds, and internal service funds are presented
immediately following the notes.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position.
In the case of the City, assets exceeded liabilities by $350,357,000 at the close of the fiscal year ended
June 30, 2007.
By far, the largest portion of the City's net assets reflect its investment in capital assets (e.g., land,
building, machinery and equipment, improvements other than buildings, and infrastructure), less 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 Assets
June 30, 2007
(amounts expressed in thousands)
Governmental Business-type
activities activities Total
2007 2006 2007 2006 2007 2006
Current and other assets $ 107,390 $ 99,035 $ 94,847 $ 87,544 $202,237 $ 186,579
Capital assets 153,380 150,644 55,577 52,130 408,957 402,774
Total Assets 260,770 249,679 350,424 339,674 611,194 589,353
Long-term liabilities outstanding 82,616 80,333 115,332 121,239 197,948 201,572
Current and other liabilities 57,903 56,440 4,986 4,419 62,889 60,859
Total Liabilities 140,519 136,773 120,318 15,658 260,837 262,431
Net assets:
Invested in capital assets, net of
related debt 101,027 95,227 172,518 155,346 273,545 50,573
Restricted 8,181 6,852 23,893 15,682 32,074 22,534
Unrestricted 11,043 10,827 33,695 42,988 44,738 53,815
Total Net Assets $ 120,51 $ 112,906 $ 230,106 $ 214,016 $350,357 $ 326,922
17
A portion of the City's net assets (9.2°10 or $32,074,000) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of the unrestricted net assets (12.8% or
$44,738,000) 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, 2007, the City is able to report positive balances in all three
categories of net assets, both for the government as a whole, as well as for its separate governmental and
business-type activities.
Governmental Activities: Governmental activities increased the City's net assets by $7,345,000. The
increase in net assets of governmental activities is primarily due to expenditures for capital assets less
depreciation expense.
The following is a more detailed review of FY07's operation.
Revenues:
Program Revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
General Revenues:
Property taxes
Road use tax
Other taxes
Earnings on investments
Gain (loss) on disposal of capital assets
Other
Total revenues
Expenses:
Public safety
Public works
Culture and recreation
Community and economic development
General government
Interest onlong-term debt
Wastewater Treatment
Water
Sanitation
Housing Authority
Parking
Airport
Stormwater
Cable Television
Total expenses
Change in net assets before transfers
Transfers
Change in net assets
Net assets beginning of year
Net assets end of year
City of Iowa City's Changes in Net Assets
(amounts expressed in thou sands)
Governmental Business-type
activities activities Total
2007 2006 2007 2006 2007 2006
$ 6,598 $ 6,296 $ 34,397 $ 33,973 $ 40,995 $ 40,269
3,215 2,937 7,172 7,417 10,387 10,354
4,283 3,849 4,866 3,018 9,149 6,867
41,492 37,770 - - 41,492 37,770
5,305 5,303 - - 5,305 5,303
1,412 1,240 - - 1,412 1,240
4,045 2,678 3,606 2,575 7,651 5,253
281 100 591 185 872 285
3,656 4,422 343 391 3,999 4,813
70,287 64,595 50,975 47,559 121,262 112,154
16,694 16,690 - - 16,694 16,690
13,560 12,723 - - 13,560 12,723
11,970 11,458 - - 11,970 11,458
4,680 6,264 - - 4,680 6,264
7,258 6,892 - - 7,258 6,892
3,459 3,404 - - 3,459 3,404
- - 11,537 11,710 11,537 11,710
- - 8,823 9,324 8,823 9,324
- - 6,684 6,101 6,684 6,101
- - 6,884 7,026 6,884 7,026
- - 4,403 3,884 4,403 3,884
- - 418 512 418 512
- - 932 817 932 817
J /,OGl J/,4J1 4V,GV0 J7,7JV 7/,OG/ 7/,JOl
12,666 23,435
(5,321)
7,345
112,906
$ 120,251
7,164
nno
10,769
~.,,
/,J /G lO,V7V
105,534 214,016
$ 112,906 $ 230,106
18
7,609
(208)
7,401
206,615
$ 214,016
14,773
GJ,4JJ 14, / /J
326,922 312,149
$ 350,357 $ 326,922
Business-type Activities: Business-type activities increased the City's total assets by $16,090,000. The
increases in net assets were primarily in the Wastewater, Water, and Sanitation funds. For all business-
type activities, revenues exceeded expenses by $10,769,000. This was primarily due to increases in
grants and contributions and earnings on investments.
The graphs on the following pages represent a breakdown of revenue by source and expenditures by
program area for governmental and business-type activities.
19
Governmental Activities
FY2007 Revenue
by Source
Other Taxes 1Vfisc.
10% Charges for
Other services
11% 9%
Property taxes
59%
Grants and
Contributions
11%
Business-Type Activities
FY2007 Revenue
by Source
1Vfis c. Other
9%
Grants and ~
Contributions
24 %
Charges for
services
67%
20
Governmental Activities
FY2007 Expenditures
by Program Area
(amounts expressed in thousands)
18,000 Public
16,000
14,000
12,000
~.
10,000
8,000
6
000
,
4,000
2,000
0
Program Area
Business-Type Activities
FY2007 Expenditures
by Program Area
(amounts expressed in thousands)
14,000
12,000
10,000
&% 8,000
A 6,000
4,000
2,000
0
Program Area
21
Safety
Public
Works
Culture and
Recreation
General
Govt
Community an
Econ Dev Interest
Expense
as tewater
reatment
~~'ater Housing
Authority
Sanitation
Parking
S tormwater
Airport Cable TV
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, unreserved fund balance may serve
as a useful measure of a government's net resources available for spending at the end of the fiscal year.
As of the fiscal year ended June 30, 2007, the City's governmental funds reported combined ending fund
balances of $36,629,000, an increase of $4,676,000 in comparison with the prior year. Of this total amount,
$29,788,000 constitutes unreserved 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 (18.7%) is reserved to indicate that it is not
available for new spending because it has already been committed. This remainder has been committed 1) to
liquidate contracts and purchase orders of the prior period ($708,000), 2) to fund various debt service
payments ($4,289,000), and 3) to fund employee retirement commitments ($1,549,000).
The General Fund is the chief operating fund of the City. As of the fiscal year ended June 30, 2007, the
unreserved fund balance of the General Fund was $18,528,000, while General Fund's total fund balance was
$19,096,000. As a measure of the General Fund's liquidity, it may be useful to compare both unreserved fund
balance and total fund balance to total fund expenditures. Unreserved fund balance represents 40.9% of total
General Fund expenditures ($45,296,000), while total fund balance represents 42.2% of that same amount.
The fund balance of the City's General Fund increased by $1,975,000 during the current fiscal year. This was
primarily due to an increase in taxes, intergovernmental revenue, and interest earned.
The Bridge, Street, and Traffic Control Construction Fund had a deficit fund balance of ($2,799,000) as
compared to a deficit balance of ($1,855,000) in the prior period. This fund accounts for transactions relating
to the acquisition or construction of major streets, bridges, and traffic control facilities. The deficit is due to
capital expenditures. The City anticipates receiving funds from the Iowa Department of Transportation. If
not, bonds will be issued in 2008 to cover the capital expenditures.
The Debt Service Fund had a fund balance of $4,289,000, an increase of $1,564,000 from the prior year, all of
which is reserved for the payment of debt service (i.e. payment of general obligation principal and interest).
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 assets of the enterprise funds were $223,654,000, a net asset increase of $15,502,000. This
was primarily due to an increase in the investment of capital assets, net of related debt. Of the enterprise
funds' net assets, $172,518,000 is invested in capital assets, net of related debt. Unrestricted net assets totaled
$27,243,000, a decrease of $9,881,000 compared to the previous year.
The Internal Service funds showed net assets totaling $17,970,000 as of June 30, 2007, an increase of
$2,324,000 from the previous year.
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, which is our common practice. These
amendments increased the expenditure budget by $24,292,000 to a total of $155,618,000. This represented a
22
18.5% increase. The major increase was due to capital projects in governmental and business-type funds due
to 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, 2007 amounts to $408,957,000 (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, 2007 increased by
$2,736,000 for governmental activities compared to the prior year and increased by $3,447,000 for business-
type activities over the prior year.
The following table reflects the $408,957,000 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
2007 2006 2007 2006 2007 2006
Land $ 14,130 $ 12,969 $ 22,586 $ 22,997 $ 36,716 $ 35,966
Buildings 43,169 44,258 80,759 84,113 123,928 128,371
Improvements other than
buildings 3,589 3,672 8,100 8,340 11,689 12,012
Machinery and equipment 10,556 11,027 11,367 12,424 21,923 23,451
Infrastructure 70,073 64,939 125,449 121,064 195,522 186,003
Construction in progress 11,863 13,779 7,316 3,192 19,179 16,971
Total $ 153,380 $ 150,644 $ 255,577 $ 252,130 $ 408,957 $ 402,774
Major capital asset events during the current fiscal year included the following:
• The transportation department purchased 6 new buses at a cost of $1,966,000, which was included in CIP.
• Airport projects included environmental assessment, runway design, grading, lighting, paving and runway
extension. CIP at fiscal year end totaled $2,695,000.
• A variety of street and bridge construction in new residential areas and replacement and expansion of
existing infrastructure amounted to $7,389,000.
• The fire department purchased a new pumper truck at a cost of $462,000.
• Construction of the fifth landfill cell as part of the landfill master plan was completed with a total cost of
$1,522,000.
• The purchase of 160 acres for the Sand Lake Recreation Area was completed for a cost of $1,000,000.
Additional information on the City's capital assets can be found in Note 5 to the financial statements.
23
Debt Administration: At the end of the fiscal year, the City had total bonded debt outstanding of
$186,600,000. Of this amount, $85,840,000 comprises debt backed by the full faith and credit of the City.
However, 6°10 of this total, $5,489,000 is debt that serves enterprise funds and is abated by their charges for
services. The remaining $100,760,000 represents revenue bonds secured solely by specific revenue sources.
City of Iowa City's Outstanding Debt
General Obligation and Revenue Bonds
(amounts expressed in thousands)
Governmental Business-type
Activities Activities Total
2007 2006 2007
General obligation bonds $ 80,351 $ 78,181 $ 5,489
Revenue bonds - - 100,760
Total $ 80,351 $ 78,181 $ 106,249
2006
$ 6,879
105,915
$ 112,794
2007
$ 85,840
100,760
$ 186,600
During the current fiscal year the City's total bonded debt decreased by $4,375,000.
2006
$ 85,060
105,915
$ 190,975
The City issued $12,220,000 in General Obligation bonds during FY07. $3,350,000 of the bonds issued
were refunding bonds and the remainder was used to finance the cost of the City's 2007 Capital
Improvements Programs.
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, 2007 were as follows:
General obligation bonds Aaa
Parking revenue bonds A
Wastewater treatment revenue bonds A
Water revenue bonds A
The City continues to operate well under the State debt capacity debt limitations. State statute limit`s the amount
of General Obligation Debt outstanding to 5°10 of the assessed value of all taxable property in Iowa City. The
current debt limitation for the City is $191,721,745. With outstanding General Obligation Debt applicable to
this limit of $85,840,000 we are utilizing 44.8% of this limit.
More detailed information on debt administration is provided in Note 6 of the financial statements.
Economic Factors and Next Year's Budget and Rates
The City's expectation is continued constraints by the State property tax formula. Therefore, the City will not
have opportunities for new initiatives and will strive to maintain current service delivery levels.
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
E. Washington Street, Iowa City, IA, 52240.
24
25
.. .v. f" .~? .~,~
. t f•:~..
CITY OF IOWA CITY, IOWA
STATEMENT OF NET ASSETS
June 30, 2007
(amounts expressed in thousands)
Assets
Equity in pooled cash and investments
Receivables:
Property tax
Accounts and unbilled usage
Interest
Notes
Internal balances
Due from other governments
Prepaid insurance
Inventories
Restricted assets:
Equity in pooled cash and investments
Capital assets:
Land and construction in progress
Other capital assets (net of accumulated depreciation)
Total assets
Liabilities
Accounts payable
Contracts payable
Accrued liabilities
Interest payable
Deposits
Due to other governments
Unearned revenue
Noncurrent liabilities:
Due within one year:
Employee vested benefits
Bonds payable
Due in more than one year:
Employee vested benefits
Notes Payable
Bonds payable
Landfill closure/post-closure liability
Total liabilities
Governmental Business-type
Activities Activities Total
$ 43,089 $ 45,359 $ 88,448
40,218 - 40,218
62 3,490 3,552
682 1,441 2,123
11,323 1,502 12,825
(7,354) 7,354 -
5,618 563 6,181
17 - 17
473 393 866
13,262 34,745 48,007
25,993 29,902 55,895
127,387 225,675 353,062
260,770 350,424 611,194
5,578 643 6,221
975 667 1,642
3,195 324 3,519
296 2,526 2,822
828 657 1,485
- 169 169
47,031 - 47,031
1,030 244 1,274
7,338 5,916 13,254
933 220 1,153
211 - 211
73,104 99,435 172,539
- 9,517 9,517
140,519 120,318 260,837
(continued)
26
CITY OF IOWA CITY, IOWA
STATEMENT OF NET ASSETS (continued)
June 30, 2007
(amounts expressed in thousands)
Net Assets
Invested in capital assets, net of related debt
Restricted for or by:
Employee benefits
Debt service
Streets
Other purposes
Bond ordinance
State statute
Future improvements
Grant agreement
Unrestricted
Total net assets
Governmental Business-type
Activities Activities Total
$ 101,027 $ 172,518 $ 273,545
1,549 - 1,549
4,289 - 4,289
2,270 - 2,270
73 - 73
- 20,459 20,459
- 561 561
- 497 497
- 2,376 2,376
11,043 33,695 44,738
$ 120,251 $ 230,106 $ 350,357
The notes to the financial statements are an integral part of this statement.
27
CITY OF IOWA CITY, IOWA
STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2007
(amounts expressed in thousands)
Program Revenues
Operating Capital
Charges Grants and Grants and
Functions/Programs: Expenses for Services Contributions Contributions
Governmental activities:
Public safety $ 16,694 $ 3,088 $ 203 $ 64
Public works 13,560 1,229 1,530 4,219
Culture and recreation 11,970 712 33 -
Community and economic development 4,680 - 1,449 -
General government 7,258 1,569 - -
Interest on long-term debt 3,459 - - -
Total governmental activities 57,621 6,598 3,215 4,283
Business-type activities:
Wastewater Treatment 11,537 12,535 1 1,539
Water 8,823 8,240 - 845
Sanitation 6,684 7,204 6 -
Housing Authority 6,884 132 7,165 -
Parking 4,403 4,704 - -
Airport 418 234 - 1,231
Stormwater 932 622 - 1,251
Cable television 525 726 - -
Total business-type activities 40,206 34,397 7,172 4,866
Total $ 97,827 $ 40,995 $ 10,387 $ 9,149
General revenues:
Property taxes, levied for general purposes
Road use tax
Hotel/motel tax
Gas and electric tax
Earnings on investments
Gain on disposal of capital assets
Miscellaneous
Transfers
Total general revenues and transfers
Changes in net assets
Net assets beginning of year
Net assets end of year
The notes to the financial statements are an integral part of this statement.
28
Net (Expense) Revenue and
Changes in Net Assets
Governmental Business-type
$ (13,339) $
(6,582)
(11,225)
~~,~1)
(5,689)
0,459)
(4,525)
- $ (13,339)
- (6,582)
- (11,225)
- (~,2~1)
- (5,689)
- 0,459)
- (4,525)
- 2,538 2,538
- 262 262
- 526 526
- 413 413
- 301 301
- 1,047 1,047
- 941 941
- 201 201
- 6,229 6,229
(43,525) 6,229 (37,296)
41,492 - 41,492
5,305 - 5,305
683 - 683
729 - 729
4,045 3,606 7,651
281 591 872
3,656 343 3,999
(5,321) 5,321 -
50,870 9,861 60,731
7,345 16,090 23,435
112,906 214,016 326,922
$ 120,251 $ 230,106 $ 350,357
29
CITY OF IOWA CITY, IOWA
BALANCE SHEET
GOVERNMENTAL FUNDS
June 30, 2007
(amounts expressed in thousands)
Capital
Special Revenue Projects
Bridge,
Community Street, and
Development Traffic Other
Employee Block Control Debt Governmental
General Benefits Grant Construction Service Funds Total
Assets
Equity in pooled cash and investments $ 20,043 $ 1,481 $ - $ 3 $ 3,626 $ 3,459 $ 28,612
Receivables:
Property tax 22,434 8,703 - - 9,080 1 40,218
Accounts and unbilled usage 51 - - ll - - 62
Interest 371 28 - - - 63 462
Notes 117 - 10,385 - 374 447 11,323
Advances to other funds 4 - 18 - 238 - 260
Due from other governments 1,833 205 74 1,366 - 2,072 5,550
Inventories 194 - - - - - 194
Restricted assets: -
Equity in pooled cash and investments 1,686 - - - - 11,576 13,262
Total assets $ 46,733 $ 10,417 $ 10,477 $ 1,380 $ 13,318 $ 17,618 $ 99,943
(continued)
30
CITY OF IOWA CITY, IOWA
BALANCE SHEET (continued)
GOVERNMENTAL FUNDS
June 30, 2007
(amounts expressed in thousands)
Capital
Special Revenue Projects
Bridge,
Community Street, and
Development Traffic Other
Employee Block Control Debt Governmental
General Benefits Grant Construction Service Funds Total
Liabilities and Fund Balances
Liabilities:
Accounts payable $ 1,043 $ 9 $ 60 $ 1,960 $ - $ 2,161 $ 5,233
Contracts payable - - - 842 - 133 975
Accrued liabilities 1,180 1 10 18 - 95 1,304
Advances from other funds 920 - 4 - - 238 1,162
Deferred revenue 23,671 8,858 10,434 1,359 9,029 461 53,812
Liabilities payable from restricted assets:
Deposits 823 - - - - 5 828
Total liabilities 27,637 8,868 10,508 4,179 9,029 3,093 63,314
Fund balances:
Reserved for:
Inventories 194 - - - - - 194
Encumbrances 273 - - - - 435 708
Debt service - - - - 4,289 - 4,289
Employee retirement commitments - 1,549 - - - - 1,549
Perpetual care 101 - - - - - 101
Unreserved
Undesignated:
General fund 18,528 - - - - - 18,528
Special revenue funds - - (31) - - 3,397 3,366
Capital projects funds - - - (2,799) - 10,693 7,894
Total fund balances 19,096 1,549 (31) (2,799) 4,289 14,525 36,629
Total liabilities and fund balances $ 46,733 $ 10,417 $ 10,477 $ 1,380 $ 13,318 $ 17,618 $ 99,943
The notes to the financial statements are an integral part of this statement.
31
CITY OF IOWA CITY
RECONCILIATION OF THE BALANCE SHEET OF THE
GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS
June 30, 2007
(amounts expressed in thousands)
Total governmental fund balances $ 36,629
Amounts reported for governmental activities in the statement
of net assets 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 assets. 17,970
Prepaid insurance benefits future periods and is included in
governmental activities in the statement of net assets. 17
Other long-term assets are not available to pay for current period
expenditures and therefore are deferred in the funds:
Notes receivable -Earned but unavailable 6,781
Capital assets used in governmental activities are not current
financial resources and therefore are not reported in the funds. 148,124
Accrued compensated absences are not due and payable in the
current period and therefore are not reported in the funds. (1,869)
Bonds payable are not due and payable in the current period
and therefore are not reported in the funds. (80,442)
Notes payable are not due and payable in the current period
and therefore are not reported in the funds. (211)
Accrued interest on bonds (296)
Internal balance due to integration of internal service funds (6,452)
Total net assets of governmental activities $ 120,251
The notes to the financial statements are an integral part of this statement.
32
CITY OF IOWA CITY, IOWA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended June 30, 2007
(amounts expressed in thousands)
Revenues
'faxes
Licenses and permits
Intergovernmental
Charges for services
Use of money and property
Miscellaneous
Total revenues
Expenditures
Current:
Public safety
Public works
Culture and recreation
Community and economic development
General government
Debt service:
Principal
Interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues over
(under) expenditures
Other Financing Sources (Uses)
Issuance of debt
Sale of capital assets
Transfers in
Transfers out
Total other financing sources and (uses)
Net change in fund balances
Fund Balances, Beginning
Fund Balances, Ending
Capital
Special Revenue Projects
Bridge,
Community Street, and
Development Traffic Other
Employee Block Control Debt Governmental
General Benefits Grant Construction Service Funds Total
$ 22,792 $ 8,528 $ - $ - $ 9,152 $ 2,433 $ 42,905
1,404 - - - - - 1,404
3,835 - 1,299 744 - 7,577 13,455
2,063 219 - 141 - - 2,423
2,430 44 - 40 255 609 3,378
3,388 - 276 28 100 66 3,858
35,912 8,791 1,575 953 9,507 10,685 67,423
16,116 111 - - - 185 16,412
9,623 - - 2,688 - 141 12,452
9,947 - - - - 314 10,261
1,050 - 563 - - 1,832 3,445
6,650 405 - - 25 114 7,194
- - - - 6,700 - 6,700
- - - - 3,464 - 3,464
(9,384) 8,275 (58) (6,445) (682) 2,789 (5,505)
- - - - - 8,870 8,870
505 (35) - - - - 470
12,527 - - 5,501 2,246 1,278 21,552
(1,673) (7,990) - - - (11,048) (20,711)
11,359 (8,025) - 5,501 2,246 (900) 10,181
1,975 250 (58) (944) 1,564 1,889 4,676
17,121 1,299 27 (1,855) 2,725 12,636 31,953
$ 19,096 $ 1,549 $ (31) $ (2,799) $ 4,289 $ 14,525 $ 36,629
33
34
.. .v. f" .~? .~,~
. t f•:~..
CITY OF IOWA CITY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2007
(amounts expressed in thousands)
Net change in fund balances -total governmental funds $ 4,676
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 $ 12,995
Transfers of capital assets to enterprise funds (6,193)
Capital assets contributed 1,916
Depreciation expense (5,178) 3,540
Bond proceeds are reported as financing sources in governmental funds and thus
contribute to the change in fund balance. In the statement of net assets,
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 assets.
Debt issued (8,870)
Repayments of debt 6,700
Amortization of premium 15 (2,155)
Because some revenues will not be collected for several months after the
City's year end, they are not considered available revenues and are deferred
in the governmental funds. (133)
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 (137)
Change in accrued interest on debt (10)
In the statement of activities, only the gain on the sale of the capital assets is
recognized, whereas in the governmental funds, the proceeds from the sale
increased financial resources. Thus, the change in net assets differs from the
change in fund balance by the cost of the capital asset sold. (189)
Prepaid items in the governmental funds have been recorded
as expenditures when paid. However, the statement of activities will report
these items as expenses in the period that the corresponding net asset is
exhausted. 17
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. 1,736
Change in net assets of governmental activities $ 7,345
The notes to the financial statements are an integral part of this statement.
35
CITY OF IOWA CITY, IOWA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
June 30, 2007
(amounts expressed in thousands)
Governmental
Business-type Activities -Enterprise Funds Activities -
Other Internal
Wastewater Housing Enterprise Service
Treatment Water Sanitation Authority Funds Total Funds
Assets
Current assets:
Equity in pooled cash and investments $ 7,676 $ 13,551 $ 16,319 $ 3,477 $ 4,336 $ 45,359 $ 14,477
Receivables:
Accounts and unbilled usage 1,383 956 816 1 334 3,490 -
Interest 507 308 412 92 122 1,441 220
Notes - - 14 1,318 170 1,502 -
Advances to other funds - - 2,100 - - 2,100 -
Due from other governments 1 1 158 46 357 563 68
Inventories - 393 - - - 393 279
Total current assets 9,567 15,209 19,819 4,934 5,319 54,848 15,044
Noncurrent assets:
Restricted assets:
Equity in pooled cash and investments 14,260 4,707 10,956 2,376 2,446 34,745 -
Capital assets:
Land 695 6,296 1,055 790 13,750 22,586 45
Buildings 59,486 23,461 999 5,319 29,274 118,539 831
Improvements other than buildings 7,365 2,331 121 9 587 10,413 50
Machinery and equipment 9,849 10,420 179 115 846 21,409 12,227
Infrastructure 85,196 42,372 10,837 - 33,919 172,324 940
Accumulated depreciation (50,327) (14,840) (7,823) (3,243) (20,777) (97,010) (8,837;
Construction in progress 807 2,733 64 270 3,442 7,316 -
Total noncurrent assets 127,331 77,480 16,388 5,636 63,487 290,322 5,256
Total assets 136,898 92,689 36,207 10,570 68,806 345,170 20,300
(continued)
36
CITY OF IOWA CITY, IOWA
STATEMENT OF NET ASSETS (continued)
PROPRIETARY FUNDS
June 30, 2007
(amounts expressed in thousands)
Liabilities
Current liabilities:
Accounts payable
Contracts payable
Accrued liabilities
Advances from other funds
Due to other governments
Bonded debt payable (net of unamortized discounts)
Total current liabilities
Noncurrent liabilities:
Liabilities payable from restricted assets:
Interest payable
Deposits
Advances from other funds
Bonded debt payable (net of unamortized discounts)
Landfill closure/postclosure liability
Total noncurrent liabilities
Total liabilities
Net Assets
Invested in capital assets, net of related debt
Restricted by bond ordinance
Restricted by state statute
Restricted for future improvements
Restricted by grant agreement
Unrestricted
Total net assets
Governmental
Business-t ype Activities -Enterprise Funds Activities -
Other Internal
Wastewater Housing Enterprise Service
Treatment Water Sanitation Authority Funds Total Funds
$ 101 $ 149 $ 91 $ 161 $ 141 $ 643 $ 345
20 253 67 - 327 667 -
128 201 194 63 202 788 1,985
- - - - 1,180 1,180 -
- 46 107 16 - 169 -
4,051 1,514 - - 351 5,916 -
4,300 2,163 459 240 2,201 9,363 2,330
1,577 641 - - 308 2,526 -
- 377 1 261 18 657 -
- - - 18 - 18 -
59,969 29,504 - - 9,962 99,435 -
- - 9,517 - - 9,517 -
61,546 30,522 9,518 279 10,288 112,153 -
65,846 32,685 9,977 519 12,489 121,516 2,330
62,751 48,490 5,432 3,260 52,585 172,518 5,256
14,260 4,265 - - 1,934 20,459 -
- - 561 - - 561 -
- - - - 497 497 -
- - - 2,376 - 2,376 -
(5,959) 7,249 20,237 4,415 1,301 27,243 12,714
$ 71,052 $ 60,004 $ 26,230 $ 10,051 $ 56,317 223,654 $ 17,970
Adjustment to reflect the consolidation of internal service fund activities
related to enterprise funds.
Net assets of business-type activities
The notes to the financial statements are an integral part of this statement.
6,452
$ 230,106
37
38
.. .v. f" .~? .~,~
. t f•:~..
CITY OF IOWA CITY, IOWA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
Operating Revenues:
Charges for services
Miscellaneous
Total operating revenues
Operating Expenses:
Personal services
Commodities
Services and charges
Depreciation
Total operating expenses
Operating income (loss)
Nonoperating Revenues (Expenses):
Gain on disposal of capital assets
Operating grants
Interest income
Interest expense
Total nonoperating revenues (expenses)
Income before capital contributions
and transfers
Capital contributions
Transfers in
Transfers out
For the Year Ended June 30, 2007
(amounts expressed in t housands)
Governmental
Business-typ e Activities -Enterprise Funds Activities -
Other Internal
Wastewater Housing Enterprise Service
Treatment Water Sanitation Authority Funds Total Funds
$ 12,535 $ 8,240 $ 7,204 $ 132 $ 6,286 $ 34,397 $ 15,163
53 51 34 98 107 343 -
12,588 8,291 7,238 230 6,393 34,740 15,163
1,497 2,091 2,109 838 2,213 8,748 1,825
554 1,463 300 11 184 2,512 1,901
2,185 1,802 3,527 5,877 1,600 14,991 8,668
4,236 5,356 5,936 6,726 3,997 26,251 12,394
4,209 2,024 935 198 1,753 9,119 1,237
8,445 7,380 6,871 6,924 5,750 35,370 13,631
4,143 911 367 (6,694) 643 (630) 1,532
- - - 113 478 591 61
1 - 6 7,165 - 7,172 -
1,119 929 909 316 333 3,606 666
(3,213) (1,549) - - (628) (5,390) -
(2,093) (620) 915 7,594 183 5,979 727
2,050 291 1,282 900 826 5,349 2,259
1,539 845 - - 2,482 4,866 -
928 3,045 - - 2,670 6,643 65
(97) (237) (43) - (979) (1,356) -
Change in net assets 4,420 3,944 1,239 900 4,999 15,502
Net Assets, Beginning 66,632 56,060 24,991 9,151 51,318
Net Assets, Ending $ 71,052 $ 60,004 $ 26,230 $ 10,051 $ 56,317
Adjustment to reflect the consolidation of internal service fund activities
related to enterprise funds. 588
Change in net assets of business-type activities $ 16,090
The notes to the financial statements are an integral part of this statement.
2,324
15,646
$ 17,970
39
CITY OF IOWA CITY, IOWA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended June 30, 2007
(amounts expressed in thousands)
Governmental
Cash Flows From Operating Activities
Receipts from customers and users
Payments to suppliers
Payments to employees
Net cash flows from operating activities
Cash Flows From Noncapital Financing Activities
Grants received
Transfers from other funds
Transfers to other funds
Repayment/(payment) of notes receivable
Advances to other funds
Repayment of advances from other funds
Net cash flows from noncapital financing activities
Cash Flows From Capital and Related Financing
Activities
Capital grants received
Acquisition and construction of property and
equipment
Proceeds from sale of property
Proceeds from issuance of refunding debt (principal
less discount)
Principal paid on bonded debt
Interest paid on bonded debt
Net cash flows from capital and related financing
activities
Cash Flows From Investing Activities
Interest on investments
Net increase (decrease) in cash and cash equivalents
Cash and Cash Equivalents, Beginning
Cash and Cash Equivalents, Ending
Business-type Activities -Enterprise Funds Activities -
Other Internal
Wastewater Housing Enterprise Service
Treatment Water Sanitation Authority Funds Total Funds
$ 12,803 $ 8,477 $ 6,748 $ 485 $ 6,176 $ 34,689 $ 15,133
(2,710) (3,279) (3,251) (5,803) $ (1,698) (16,741) $ (10,909)
(1,498) (2,080) (2,100) (833) $ (2,203) (8,714) $ (1,889)
8,595 3,118 1,397 (6,151) 2,275 9,234 2,335
1 - 6 7,165 - 7,172 -
121 97 - - 232 450 65
(97) (237) (43) - (979) (1,356) -
- - (14) (66) 55 (25) -
- - (26) - - (26) -
- - - - (44) (44) -
25 (140) (77) 7,099 (736) 6,171 65
- - - - 1,231 1,231 -
(163) (715) (586) (326) (1,406) (3,196) (702)
- - - 533 835 1,368 141
- 3,335 - - - 3,335 -
(4,074) (5,176) - - (645) (9,895) -
(3,239) (1,511) - - (634) (5,384) -
(7,476) (4,067) (586) 207 (619) (12,541) (561)
915 945 900 298 317 3,375 638
2,059 (144) 1,634 1,453 1,237 6,239 2,477
19,877 18,402 25,641 4,400 5,545 73,865 12,000
$ 21,936 $ 18,258 $ 27,275 $ 5,853 $ 6,782 $ 80,104 $ 14,477
(continued)
40
CITY OF IOWA CITY, IOWA
STATEMENT OF CASH FLOWS (continued)
PROPRIETARY FUNDS
Reconciliation of operating income (loss)
to net cash flows from operating activities:
Operating income (loss)
Adjustments to reconcile operating income
(loss) to net cash flows from operating activities
Depreciation expense
Changes in:
Receivables:
Accounts and unbilled usage
Due from other governments
Inventories
Accounts payable
Accrued liabilities
Due to other governments
Deposits
Landfill closure/postclosure liability
Total adjustments
Net cash flows from operating activities
Noncash Investing, Capital, and
hY'nancing Activities:
Contributions of capital assets from government
and others
For the Year Ended June 30, 2007
(amounts expressed in thousands)
Governmental
Business-type Activities -Enterprise Funds Activities -
Other Internal
Wastewater Housing Enterprise Service
Treatment Water Sanitation Authority Funds Total Funds
$ 4,143 $ 911 $ 367 $ (6,694) $ 643 $ (630) $ 1,532
4,209 2,024 935 198 1,753 9,119 $ 1,237
216 108 (383) 186 47 174 -
(1) 67 (107) 18 (269) (292) (30)
- (32) - - - (32) (16)
29 (18) (3) 82 86 176 (324)
(1) 11 9 5 10 34 (64)
- 36 50 3 - 89 -
- 11 - 51 5 67 -
- - 529 - - 529 -
4,452 2,207 1,030 543 1,632 9,864 803
$ 8,595 $ 3,118 $ 1,397 $ (6,151) $ 2,275 $ 9,234 $ 2,335
$ 2,346 $ 3,793 $ - $ - $ 4,920 $ 11,059 -
The notes to the financial statements are an integral part of this statement.
41
CITY OF IOWA CITY
STATEMENT OF FIDUCIARY
ASSETS AND LIABILITIES
June 30, 2007
(amounts expressed in thousands)
Agency
Funds
Assets
Equity in pooled cash and investments $ 198
Accounts receivable 5
Interest receivable 3
Total assets $ 206
Liabilities
Accounts payable $ 2
Accrued liabilities 6
Due to agency 198
Total liabilities ~ 206
The notes to the financial statements are an integral part of this statement.
42
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS
June 30, 2007
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, a mass transportation system, public safety, streets, parks, and cultural
facilities. It also operates an airport, parking facilities, water treatment, wastewater treatment, stormwater
collection, sanitation collection and disposal (including landfill operations), cable television, and a
housing authority.
The financial statements of the City have been prepared in conformity with accounting principles
generally accepted in the United States of America (GAAP) as applied to governmental units. The
Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for
establishing governmental accounting and financial reporting principles. The more significant accounting
policies of the City are described below.
The Reporting Entity
For financial reporting purposes, the City includes all of its funds, organizations, agencies, boards,
commissions, and authorities. The City has also considered all potential component units for which it is
financially accountable, and other organizations for which the nature and significance of their relationship
with the City are such that exclusion would cause the City's financial statements to be misleading or
incomplete. The Governmental Accounting Standards Board has set forth criteria to be considered in
determining financial accountability. These criteria include appointing a voting majority of an
organization's governing body, and (1) the ability of the City to impose its will on that organization or (2)
the potential for the organization to provide specific benefits to, or impose specific financial burdens on
the City. There were no component units required to be included.
Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of
Activities) report information on all of the nonfiduciary 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 interfund 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.
43
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
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, for which the City acts as
custodian.
The City maintains its records on a modified cash basis of accounting under which only cash receipts,
cash disbursements and encumbrances, investments, and bonded debt are recorded. These modified cash
basis accounting records have been adjusted to the accrual or modified accrual basis, as necessary, to
prepare the accompanying financial statements in accordance with GAAP.
The accounts of the City are organized on the basis of funds, each of which is considered to be a separate
accounting entity. The fund categories are governmental, proprietary, and fiduciary. Each fund is
accounted for by providing a separate set of self-balancing accounts that comprise its assets, liabilities,
net assets, 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. The City applies
all applicable Financial Accounting Standards Board pronouncements issued on or before November 30,
1989, except those that conflict with GASB pronouncements, in accounting and reporting for these funds.
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.
44
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
The Employee Benefits Fund is used to account for the employee benefits related to those
employees who are paid through governmental fund types, which are funded by a separate
property tax levy.
The Community Development Block Grant Pund accounts for revenue from the U.S. Department
of Housing and Urban Development's Community Development Block Grant programs.
The Bridge, Street, and Traffic Control Construction Pund accounts for the construction or
replacement of infrastructure fixed assets, such as streets, bridges, dams, sidewalks, and lighting
systems.
The Debt Service Pund accounts for the accumulation of resources for and the payment of general
long-term debt principal, interest, and related costs.
The City reports the following major proprietary funds:
The Wastewater Treatment Pund is used to account for the operation and maintenance of the
wastewater treatment facility and sanitary sewer system.
The Water Pund is used to account for the operation and maintenance of the water system.
The Sanitation Pund is used to account for the operation and maintenance of the solid waste
collection system and landfill.
The Housing Authority Pund is used to account for the operations and activities of the City's low
and moderate income housing assistance and public housing programs.
Additionally, the City reports internal service funds to account for goods and services provided by one
department to other City departments on a cost reimbursement basis. The funds in this category are the
Equipment Maintenance Pund, Central Services Pund, Loss Reserve Pund, and the Information
Technology Pund.
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
statement 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 four
fiduciary funds which are maintained as agency funds, with no attempt to create an ongoing fund balance.
Proprietary funds distinguish operating revenues and expenses from nonoperating 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 nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the government's policy to use
restricted resources first, then unrestricted resources as they are needed.
45
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
Uses of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue, expenditures and expenses, as appropriate,
during the reporting period. Actual results could differ from these estimates. Material estimates that are
particularly susceptible to significant change in the near-term relate to the determination of landfill
closure and post-closure care costs, total capacity of the landfill at closure, and calculation of the costs of
claims incurred, but not reported.
Cash and Investments
The City maintains one primary demand deposit account through which the majority of its cash resources
are processed. Substantially all investment activity is carried on by the City in an investment pool, except
for those funds required to maintain their investments separately. The earnings on the pooled investments
are allocated to the funds on a systematic basis. All investments are stated at fair value except for the
Iowa Public Agency Investment Trust (IPATT) 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 nonrestricted 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, the related revenue is deferred in both the
government-wide and fund financial statements and will not be recognized as revenue until the year for
which it is levied.
Federal and state grants, primarily capital grants, are recorded as receivables and the revenue is
recognized during the period in which the City fulfills the requirements for receiving the grant awards, as
long as the susceptible to accrual criteria are met.
Income from investments in all fund types and from charges for services in proprietary fund types is
recognized when earned. Licenses and permits, fines and forfeitures, fees and refunds, charges for
services (in governmental fund types), miscellaneous and other revenues are recorded as revenue when
received in cash because they are generally not measurable until actually received.
46
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
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 General Fund, Water Fund, and the Equipment Maintenance Fund.
Inventories are reported at the lower of cost (first-in, first-out) or market. The costs of governmental fund
type inventories are recorded as expenditures when purchased.
Capital Assets
Capital assets, which include property, buildings, equipment, and infrastructure assets (e.g., roads,
bridges, sidewalks, 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
capitalizing an asset with an initial, individual cost of less than $50,000 for infrastructure assets and
$5,000 for remaining assets. Such assets are recorded at original purchase cost or at fair value at the date
of donation when received as donated properties.
Depreciation is computed using the straight-line method over the following estimated useful lives:
Infrastructure 3 - 100 years
Buildings and structures 20 - 50 years
Improvements other than buildings 15 - 50 years
Vehicles 2 - 20 years
Other equipment 5 - 30 years
Bond Premiums and Discounts
Debt issued at a premium or discount is recorded net of the unamortized premium or discount. In the
governmental funds, premiums and discounts are recorded entirely as other financing sources or uses in
the year of issuance. In the proprietary funds and the government-wide statements, they are amortized
over the life of the bonds.
Compensated Absences
Permanent City employees accumulate vacation and sick leave hours for subsequent use or for payment
upon death, resignation, or retirement. The City pays its employees (except firefighters) one-half of the
accumulated sick leave at the time of termination on the basis of the employee's then effective hourly
base salary, provided that the dollar amount of the payment may be up to, but not exceed, the amount that
an employee would be paid if the employee had terminated on June 28, 1985. Employees hired on or after
June 29, 1985, are not eligible for payment of accumulated sick leave upon termination, death, or
retirement.
Pensions
The provision for pension cost is recorded on the accrual basis (based on statutorily determined
contribution rates), and the City's policy is to fund pension costs as they accrue.
47
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
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 13).
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 outlay
Business-type
b. The amount to be raised by property taxation
c. Income from sources other than property taxation
d. Transfers in and transfers out
The legal level of control (the level at which expenditures may not legally exceed appropriations) is the
function level for all funds combined, rather than at the individual fund level. Management can transfer
appropriations within a function, within a fund type, and between fund types, without the approval of the
governing body so long as the total budget by function area will not be exceeded. It is necessary,
therefore, to aggregate the expenditures of the budgeted activities within the governmental fund types
with the expenditures of the budgeted activities within the enterprise funds on a function basis, and to
compare such function totals to function budgeted totals in order to demonstrate legal compliance with
the budget. The City's budget for revenue focuses on the individual fund revenue rather than on
aggregated fund totals.
The City formally adopts budgets for several funds that are not required by state law to be included in the
annual function budget. Annual operating budgets are adopted for the internal service funds for
management control purposes. Such budgets, however, are not legally required to be adopted under state
statutes. These budgets are adopted and amended at the same time and in the same manner as the City's
annual function budget.
48
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
A City budget for the current fiscal year may be amended for any of the following purposes as prescribed
by Iowa statute:
a. To permit the appropriation and expenditure of unexpended, unencumbered cash balances on hand at
the end of the preceding fiscal year.
b. To permit the appropriation and expenditure of amounts anticipated being available from sources
other than property taxation.
c. To permit transfers between funds.
d. To permit transfers between programs.
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 $27,670,000 in revenues and other
financing sources and by $39,535,000 in expenditures and other financing uses. Appropriations as
adopted or amended, and not encumbered, lapse at the end of the fiscal year.
As allowed by GASB Statement No. 41, Budgetary Comparison Schedules -Perspective Differences, the
City presents budgetary comparison schedules as required supplementary information based on the
program structure of nine functional areas as required by state statute for its legally adopted budget.
Restricted Assets
Assets within the individual funds, which can be designated by the City Council for any use within the
fund's purpose, are considered to be unrestricted assets. Assets, which are restricted for specific uses by
bonded debt requirements, grant provisions, or other requirements, are classified as restricted assets.
Liabilities which are payable from restricted assets, are classified as such.
2. Compliance and Accountability
At June 30, 2007 the Capital Project Fund for bridge, street, and traffic control construction reported a
deficit fund balance of $2,799,000. The deficit is due to capital expenditures. The City anticipates
receiving funds from the Iowa Department of Transportation. If not, bonds will be issued in 2008 to
cover the capital expenditures. At June 30, 2007 the Community Development Block Grant Fund
reported a deficit balance of $31,000. The deficit is due to deferred revenue from the Department of
Housing and Urban Development (HUD). The City anticipates receiving these funds from HUD.
3. Cash and Pooled Investments
The City's deposits in banks at June 30, 2007 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.
49
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
The City is authorized by statute to invest public funds in obligations of the United States government, its
agencies and instrumentalities; certificates of deposit or other evidences of deposit at federally insured
Iowa depository institutions approved by City Council and secured pursuant to the limitations set forth in
Chapter 12C of the Code of Iowa; prime eligible bankers acceptances; certain high rated commercial
paper; perfected repurchase agreements; Iowa Public Agency Investment Trust (IPAIT); certain
registered open-end management investment companies registered with the Securities & Exchange
Commission under the federal Investment Company Act of 1940; certain joint investment trusts; and
warrants or improvement certificates of a drainage district.
Investments are stated at fair value. In addition, the City had investments in the Iowa Public Agency
Investment Trust which are valued at an amortized cost of $3,000,000 pursuant to Rule 2a-7 under the
Investment Company Act of 1940.
Interest rate risk, The City's investment policy limits the investment of general and operating funds to
one year, unless a temporary extension of maturities is approved by the City Council. In such cases, the
average maturity of each fund's portfolio shall not exceed 397 days. Funds not identified as operating
funds may be invested in instruments whose maturities do not exceed five years at the time of purchase.
Credit risk. State law limits investments to commercial paper and corporate bonds to the top two ratings
issued by nationally recognized statistical rating organizations. It is the City's policy to comply with
rating restrictions. The investment in Iowa Public Agency Investment Trust is not rated by Moody's
Investors service as it is a state security that is backed by the full faith and credit of the issuing
government and is not subject to credit risk.
Concentration of credit risk. The City investment policy limits the amount that may be invested in any
one issuer to a maximum amount approved by the City Council.
The aforementioned Iowa Public Agency Investment Trust (IPAIT) represents an investment in a pool
managed by others. IPAIT is a common trust established under Iowa law pursuant to Iowa Code Chapter
28E in 1987 to enable eligible Iowa public agencies to safely and effectively invest their available
operating and reserve funds. IPAIT is registered under the Investment Company Act of 1940.
The IPAIT portfolios have followed established money market mutual fund investment parameters
designed to maintain a $1 per unit net asset value since inception and were registered with the Securities
and Exchange Commission (SEC).
Due to legal and budgetary reasons, the general fund is assigned a portion of the investment earnings
associated with other funds. These funds are the employee benefits, other shared revenue and sanitation
funds.
50
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
4. Interfund Balances and Transfers
Interfund balances for the year ended June 30, 2007, consisted of the following:
Advances to
Camrrnmity Develolanent
Black Grant
Nonmajor govetn~ntal
Housing Authority
Nonmajor enterlxise
Total
Advances from
Corrffnunity
Developrr~nt Debt
$ - $ - $ - $ 920,070 $ 920,070
4,210 - - - 4,210
- - 237,810 - 237,810
- 18,000 - - 18,000
- - - 1,180,029 1,180,029
$ 4,210 $ 18,000 $ 237,810 $ 2,100,099 $ 2,360,119
Interfund balances at June 30, 2007, include advances due to/from other funds. Advances to/from other
funds represent amounts for construction loans, land and negative cash funding. $1,157,839 of the
$1,180,029 advances to the Non-Major Enterprise Funds and $760,572 of the $920,070 advances to the
General Fund are not expected to be repaid within the next year. $228,216 of the $237,810 advance to the
Non-Major Governmental Funds is not expected to be repaid within the next year. None of the $18,000
advance to Housing Authority is expected to be repaid within the next year. The $4,210 advance to the
Community Development Block Grant Fund is expected to be repaid within the next year.
51
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
Interfund transfers for the year ended June 30, 2007, consisted of the following:
Transfer from
Transfer to_
General
Debt service
Bridge, street and traffic
control construction
Nonmaj or governmental
Wastewater treatment
Water
Nonmajor enterprise
Internal Service
Total Transfer to
Employee Nonmajor Governmental
General Benefits Governmental Activities
$ - $ 7,989,735 $ 4,184,159
688,200 - 1,144,648
- - 5,275,058
760,133 - 371,201
159,121 - 72,830
65,153 - -
807, 380
2, 947,681
2,438,326
$ 1,672,607 $ 7,989,735 $ 11,047,896 $ 6,193,387
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. Also
included are capital assets that were transferred from governmental activities to enterprise funds.
52
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
Transfer from
Wastewater Nonmajor Internal Total
Treatment Water Sanitation Enterprise Service Transfer from
$ - $ - $ - $ 352,821 $ 42 $ 12,526,757
- 24,764 - 388,635 - 2,246,247
- 92,095 - 134,394 - 5,501,547
- - 43,363 103,726 - 1,278,423
- 120,267 - - - 927,647
97,167 - - - - 3,044,848
- - - - - 2, 670,277
- - - - - 65,153
$ 97,167 $ 237,126 $ 43,363 $ 979,576 $ 42 $ 28,260,899
53
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
5. Capital Assets
Capital asset activity for the year ended June 30, 2007, was as follows:
Governmental activities:
Acquisitions Disposals
Beginning and and Balance
July 1, 2006 Transfers Transfers June 30, 2007
Capital assets, not being depreciated:
Land $ 12,969,398 $ 1,161,190 $ - $ 14,130,588
Construction in progress 13,779,020 9,367,464 11,283,797 11,862,687
Total capital assets, not being depreciated 26,748,418 10,528,654 11,283,797 25,993,275
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total accumulated depreciation
56,809,554 407,763 286,380 56,930,937
4,778,334 95,137 - 4,873,471
32,409,606 2,602,933 1,814,626 33,197,913
81,649,256 7,171,976 30,572 88,790,660
Inc ini ncn ~n nnn onn n ~ ~~ cno ~ o~ nnn nog
12,551,401 1,382,281
1,106,275 177,799
21,382,178 2,846,224
i r ~i n ccn ~ nno ~~~
172116 13,761,566
- 1,284,074
1,585,910 22,642,492
i nn~ i o ~i~ ccn
J 1, / JV,Jl`T V,`T 1`T,JLV 1, / J7, L`T7 JV,`TVJ, / 7 1
Total capital assets, being depreciated, net 123,896,236 3,863,283 372329 127,387,190
Governmental activities capital assets, net $ 150,644,654 $14,391,937 $11,656,126 $153,380,465
54
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
Acquisitions Disposals
Beginning and and Balance
July 1, 2006 Transfers Transfer June 30, 2007
Business-type activities:
Capital assets, not being depreciated:
Land $ 22,997,038 $ - $ 410,060 $ 22,586,978
Construction in progress 3,191,665 7,686,845 3,562,089 7,316,421
Total capital assets, not being depreciated 26,188,703 7,686,845 3,972,149 29,903,399
Capital assets, being depreciated:
Buildings 118,641,072 53,763 154,734 118,540,101
Improvements other than buildings 10,220,955 191,380 - 10,412,335
Machinery and equipment 21,270,202 168,485 28,791 21,409,896
Infrastructure 163,782,876 8,541,522 - 172,324,398
Total capital assets being depreciated 313,915,105 8,955,150 183,525 322,686,730
Less accumulated depreciation for:
Buildings 34,528,228 3,312,812 59,585 37,781,455
Improvements other than buildings 1,880,639 431,533 - 2,312,172
Machinery and equipment 8,845,986 1,220,257 23,445 10,042,798
Infrastructure 42,719,676 4,155,793 - 46,875,469
Total accumulated depreciation 87,974,529 9,120,395 83,030 97,011,894
Total capital assets, being depreciated, net 225,940,576 (165,245) 100,495 225,674,836
Business-type activities capital assets, net $ 52,129,279 $ 7,521,600 $ 4,072,644 $255,578,235
Depreciation expense was charged to functions as follows:
Governmental activities:
Public safety $ 586,387
Public works 2,575,657
Culture and recreation 1,706,626
Community and economic development 38,119
General government 271,075
Internal service funds 1,236,662
Total depreciation expense -governmental activities $ 6,414,526
Business-type activities
Wastewater treatment $ 4,209,456
Water 2,023,883
Sanitation 935,242
Housing authority 198,448
Nonmajor enterprise 1,753,366
Total depreciation expense -business-type activities $ 9,120,395
55
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
6. Bonded and Other Long-Term Debt
Changes in Long-term Liabilities
Long-term liability activity for the year ended June 30, 2007, was as follows:
Due Within
July 1, 2006 Issues Retirements June 30, 2007 One Year
Governmental activities:
General obligation bonds $ 78,181,155 $ 8,870,000 $ 6,700,525 $ 80,350,630 $ 7,323,235
Plus: Unamortized
Premium (discount) 105,646 - 14,382 91,264 14,382
Total general obligation bonds 78,286,801 8,870,000 6,714,907 80,441,894 7,337,617
Note payable 211,000 - - 211,000 -
Employee vested benefits 1,834,833 1,084,224 954,715 1,964,342 1,029,990
$ 80,332,634 $ 9,954,224 $ 7,669,622 $ 82,617,236 $ 8,367,607
Business-type activities:
General obligation bonds $ 6,878,845 $ 3,350,000 $ 4,739,475 $ 5,489,370 $ 576,765
Less: Unamortized
discounts 65,017 _ 34,280 30,737 3,842
Total general obligation bonds 6,813,828 3,350,000 4,705,195 5,458,633 572,923
Revenue bonds 105,915,000 - 5,155,000 100,760,000 5,415,000
Less: Unamortized
Discounts 939,712 _ 72,049 867,663 72,049
Total revenue bonds 104,975,288 _ 5,082,951 99,892,337 5,342,951
Landfill closure/post-closure 8,987,677 528,934 - 9,516,611 -
Employee vested benefits 462,590 242,798 241,358 464,030 243,810
$121,239,383 $ 4,121,732 $ 10,029,504 $115,331,611 $ 6,159,684
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.
56
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
For the governmental activities, employee vested benefits are generally liquidated by the General Fund
and Community Development Block Grant Fund
The City issued $3,350,000 of general obligation bonds for a current refunding of $3,300,000 of general
obligation bonds. The refunding was undertaken to reduce total future debt service payments. The result
of the transaction is a reduction of $191,000 in future debt service payments.
General Obligation Bonds
Various issues of general obligation bonds totaling $85,840,000 are outstanding as of June 30, 2007. The
bonds have interest rates ranging from 2.5°10 to 5.6°10 and mature in varying annual amounts ranging from
$80,000 to $2,195,000 per issue, with the final maturities due in the year ending June 30, 2023. Interest
and principal payments on all general obligation bonds, except tax abated portions recorded in the
enterprise funds, are accounted for through the Debt Service Fund.
Portions of several general obligation bond issues have been used to acquire or expand the enterprise fund
facilities. In some instances, revenue generated by the enterprise funds is used to pay the general long-
term debt principal and interest. The liability for those bonds that are expected to be paid by enterprise
funds is included in those funds.
Annual debt service requirements to maturity for general obligation bonds are as follows:
Fiscal Year Ending Governmental Activities Business-tX pe Activities
June 30 Principal Interest Principal Interest
2008 7,323,235 3,555,825 576,765 200,686
2009 7,538,235 3,260,829 571,765 181,493
2010 7,694,538 2,956,124 590,462 161,826
2011 7,965,840 2,638,170 604,160 140,850
2012 8,257,143 2,303,586 622,857 119,247
2013-2017 31,171,639 6,658,716 2,523,361 249,212
2018-2022 9,740,000 1,392,919 - -
2023 660,000 35,640 - -
Total
Revenue Bonds
~ 80,350,630 ~ 22,801,809 ~ 5,489,370 ~ 1,053,314
As of June 30, 2007, the following unmatured revenue bond issues are outstanding:
Wastewater
Parking Treatment Water
Original issue amount $ 11,350,000 $ 83,935,000 $ 30,700,000
Interest rates 5.9°10 to 6.0°10 3.3°10 to 5.8°10 2.0°10 to 5.6°10
Annual maturities $ 355,000 to $ 305,000 to $ 280,000 to
$ 895,000 $ 3,010,000 $ 910,000
Amount outstanding $ 10,390,000 $ 64,580,000 $ 25,790,000
57
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
Revenue bond debt service requirements to maturity are as follows:
Fiscal Year Ending
June 30
2008
2009
2010
2011
2012
2013-2017
2018-2022
2023-2026
Business-type Activities
Principal Interest
5,415,000
5,625,000
5,875,000
6,195,000
6,505,000
27,965,000
31,035,000
12,145,000
4,905,893
4,668,765
4,413,216
4,139,939
3,851,052
15,042,664
7,434,768
1,149, 844
$ 100,760,000 $ 45,606,141
The revenue bond ordinances required that wastewater treatment, parking system, and water 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
(a) Revenue Bond and Interest
Sinking Reserve
(b) Revenue Debt Service Reserve
Amount sufficient to pay current bond and interest maturities.
Amount required to be deposited in the Revenue Bond and
Interest Reserve until the reserve fund equals: Parking Revenue
and Water 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, $5,000 per month
until the reserve balance equals or exceeds $300,000 for Parking
Revenue bonds and $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.
58
CITY OF IOWA CITY, IOWA
Summary of Bond Issues
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
General obligation and revenue bonds payable at June 30, 2007, are comprised of the following issues:
Date of Amount Interest Final Outstanding
Issue Issued Rates Maturit,~ June 30, 2007
General Obligation Bonds:
Multi-Purpose Apr. 1998 8,500,000 4.35 - 4.75 6/13 3,325,000
Multi-Purpose Mar. 1999 9,000,000 4.125 - 4.7 6/18 5,225,000
Multi-Purpose Jul. 2000 14,310,000 5.0 - 5.5 6/18 10,290,000
Multi-Purpose Jun. 2001 11,500,000 4.0 - 4.9 6/16 7,480,000
Multi-Purpose and Library
Construction May 2002 29,100,000 3.5 - 5.0 6/21 20,700,000
Refunded Multi-Purpose (1 ) Oct. 2002 10,600,000 2.5 - 4.0 6/15 3,185,000
Multi-Purpose Nov. 2003 5,570,000 2.5 - 3.6 6/14 3,880,000
Taxable -Urban Renewal Mar. 2004 7,305,000 4.0 - 5.4 6/23 7,305,000
Multi-Purpose Mar. 2005 7,020,000 3.0 - 4.0 6/15 5,820,000
Multi-Purpose Jun. 2006 6,265,000 3.625 - 4.0 6/16 5,790,000
Multi-Purpose Jun. 2006 1,000,000 5.5 - 5.6 6/16 930,000
Refunded Water
Construction (2) Sep. 2006 3,350,000 3.6 - 3.75 6/17 3,040,000
Multi-Purpose May 2007 8,870,000 3.75 6/17 8,870,000
Total General Obligation Bonds 85,840,000
Date of
Issue
Revenue Bonds:
Parking Bonds
Wastewater Treatment
Bonds
Wastewater Treatment
Bonds
Wastewater Treatment
Bonds
Wastewater Treatment
Bonds
Wastewater Treatment
Bonds
Refunded Wastewater
Treatment Bonds (3)
Water Bonds
Water Bonds
Water Bonds
Total Revenue Bonds
Amount
Issued
Interest Final Outstanding
Rates Maturit,~ June 30, 2007
Dec. 1999 $ 11,350,000 5.875 - 6.0 7/24
Mar. 1996 18,300,000 5.0 - 5.75
May 1997 10,600,000 5.15 - 5.5
Jan. 1999 7,000,000 4.25 - 4.87
Oct. 2000 12,000,000 5.125 - 5.5
Dec. 2001 10,250,000 4.5 - 5.0
May 2002 25,785,000 3.25 - 4.1
May 1999 9,200,000 4.75 - 5.0
Dec. 2000 13,000,000 5.0 - 5.625
Oct. 2002 8,500,000 2.0 - 4.65
7/21
7/22
7/19
7/25
7/20
$10,390,000
13,925,000
8,275,000
5,180,000
10,240,000
10,250,000
7/12 16,710,000
7/24 7,615,000
7/25 10,995,000
7/22 7,180,000
100,760,000
X186,600,000
59
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
(1) This bond issue has a portion of the general obligation bonds payable shown as a liability on the
balance sheet of the Water Fund.
(2) This bond issue has the general obligation bonds payable shown as a liability on the balance sheet of
the Water Fund. Also, this bond issue refunds the November 1997 Water Construction General
Obligation Bonds.
(3) This bond issue refunds the January 1993 Wastewater Revenue Bonds.
Conduit Debt Obligations
From time to time, the City has issued Industrial Development Revenue Bonds and Facility Refunding
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, 2007, there were two series of Industrial Development Revenue Bonds and Facility
Refunding Revenue Bonds outstanding, with an aggregate principal amount payable of $43,640,166.
Debt Legal Compliance
Legal Debt Margin:
As of June 30, 2007, the general obligation debt issued by the City did not exceed its legal debt margin
computed as follows:
Assessed valuation:
Real property $ 3,771,634,528
Utilities 62,800,379
Total valuation ~ 3,834,434,907
Debt limit, 5°10 of total assessed valuation $ 191,721,745
Debt applicable to debt limit:
General obligation bonds 85,840,000
Legal debt margin ~ 105,881,745
60
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
7. Segment Information
The City issued revenue bonds to finance construction of its parking facilities. Summary financial
information for the parking department is presented below:
Condensed Statement of Net Assets
Assets:
Current assets
Restricted assets
Capital assets
Total assets
Liabilities:
Current liabilities
Noncurrent liabilities payable from restricted assets
Other noncurrent liabilities
Total liabilities
Net assets:
Invested in capital assets, net of related debt
Restricted
Unrestricted
$ 2,757
2,048
17,837
22,642
593
316
9,962
10,871
9,381
2,040
350
~ 11,771
61
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
Condensed Statement of Revenues, Expenses, and Changes in Net Assets
Operating revenue $ 4,808
Depreciation expense (873)
Other operating expenses (2,973)
Operating income 962
Nonoperating revenues (expenses):
Interest income 227
Interest expense (628)
Transfers -net (156)
Change in net assets 405
Beginning net assets 11,366
Ending net assets $ 11,771
Condensed Statement of Cash Flows
Net cash flows from:
Operating activities $ 1,903
Noncapital financing activities (101)
Capital and related financing activities (1,400)
Investing activities 225
Net increase 627
Cash and cash equivalents, beginning 3,831
Cash and cash equivalents, ending $ 4.458
8. 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, 2007 the City purchased property, liability, and workers'
compensation insurance under the program that provides fora $100,000 self-insured retention per
occurrence on property losses, a $500,000 self-insured retention per occurrence on liability, and a
$400,000 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
$19,000,000 annual aggregate of losses paid. 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. Settled claims have not exceeded this commercial coverage
in any of the past nine fiscal years.
62
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
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, 2007 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, 2007 and 2006 are as follows:
Current-Year
Beginning-of- Claims and Balance at
Fiscal-Year Changes in Claim Fiscal
Liability Estimates Payments Year-End
2005 - 2006 $ 1,114,000 $ 1,204,000 $ 879,000 $ 1,439,000
2006 - 2007 1,439,000 233,000 435,000 1,237,000
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 $100,000 per employee with an aggregate stop-loss of $6,393,248. 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 fee. Changes in the Loss Reserve Fund's
claims liability amount for health care coverage for the years ended June 30, 2007 and 2006 are as
follows:
Current-Year
Beginning-of- Claims and Balance at
Fiscal-Year Changes in Claim Fiscal
Liabilit
~ Estimates Payments Year-End
.
2005 - 2006 $ 389,000 $ 5,317,000 $ 5,261,000 $ 445,000
2006 - 2007 445,000 6,484,000 6,340,000 589,000
63
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
9. Contractual Commitments and Contingencies
The total outstanding contractual commitments as of June 30, 2007 are as follows:
Fund Project Amount
Bridge, Street and Traffic Paving and bridge construction, $ 2,331,820
Control Construction engineering design and consulting
Other Construction Recreationcenter construction, park amphitheater,
and fire station construction 130,308
Water Water mai n c onstruction 330,426
Parking Garage Repair & Maintance 81,501
Sanitation Landfill consulting 230,877
Airport Runway extension consulting, grading andpaving 342,203
Cable TV Refranchising consulting 44,290
$ 3,491,425
10. 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.
64
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
11. Pension and Retirement Systems
Municipal Fire and Police Retirement System of Iowa
The City is a participating employer in the Municipal Fire and Police Retirement System of Iowa
(MFPRSI or the Plan), which is acost-sharing multiple-employer defined benefit public police and fire
employees retirement system. All fire fighters and police officers appointed under civil service participate
in the Plan. The Plan provides retirement, disability, and death benefits that are established under state
statute. The Plan issues a publicly available financial report that includes financial statements and
required supplementary information. The report may be obtained by writing to Municipal Fire and Police
Retirement System of Iowa, 2836 104' Street, Des Moines, Iowa 50322 or the report may be obtained
from website www.mfprsi.org under the publications link. A member may retire at age 55 with 22 years
of employment, and receive full benefits that are equal to 66°10 of the member's average final
compensation. Additionally, members retiring with more than 22 years of service will receive an
additional 2°10 of the member's average final compensation for up to 8 years of additional service. Other
benefits are also calculated at varying percentages of the average final compensation. Benefits vest after
four years of service.
Member contribution rates are established by state statute. For the fiscal year ended June 30, 2007,
members contributed 9.35%. The City's contribution rate is based upon an actuarially determined normal
contribution rate. The normal contribution rate is provided by state statute to be the actuarial liabilities of
the plan less current plan assets, the total then being divided by 1°10 of the actuarially determined present
value of prospective future compensation of all members, further reduced by member contributions.
Legislatively appropriated contributions from the state to the plan may further reduce the City's
contribution rate. However, the City's contribution rate may not be less than 17°10 of earnable
compensation.
The City was required to contribute 27.75% of earnable compensation of each member in 2007, 28.21%
of earnable compensation in 2006, and 24.92% of earnable compensation in 2005. The contributions paid
by the City for the years ended June 30, 2005, 2006, and 2007, were $1,750,377, $1,925,332, and
$1,954,182 respectively, and was equal to the required contributions for each year.
Iowa Public Employees Retirement System
The City contributes to the Iowa Public Employees Retirement System (IPERS), which is acost-sharing
multiple-employer defined benefit pension plan administered by the State of Iowa. IPERS provides
retirement and death benefits, which are established by State statute to plan members and beneficiaries.
IPERS issues a publicly available financial report that includes financial statements and required
supplementary information. The report may be obtained by writing to IPERS, P.O. Box 9117, Des
Moines, Iowa 50306-9117.
All employees, except temporary employees of six months or less of employment duration, who do not
participate in any other public retirement system in the state are eligible and must participate in IPERS.
The pension plan provides retirement and death benefits that are established by state statute. Generally, a
member may retire at the age of 65, or any time after age 62 and 20 years or more of service, or when age
plus years of service equals or exceeds 88, and receive unreduced (for age) benefits. Members may also
retire at the age of 55 or more at reduced benefits. Benefits vest after four years of service or after
attaining the age of 55. Full benefits are equal to 60°10 of the average of the highest three years of covered
wages times years of service divided by 30.
65
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
Plan members are required to contribute 3.70% of their annual covered salary and the City is required to
contribute 5.75% of annual covered payroll. Contribution requirements are established by state statute.
The City's contributions to IPERS for the years ended June 30, 2005, 2006, and 2007, were $1,247,065,
$1,329,784, and $1,384,110 respectively, and were equal to the required contributions for each year.
12. Post-Employment Benefits
All full-time employees who retire or terminate/resign 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.
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. Therefore, a portion of the above coverage is being subsidized by the City and its current
employees. However, the City cannot reasonably estimate the amount of this subsidy and it is being
expensed as incurred by the City.
13. Landfill Closure and Post-closure Care Costs
In August 1993, the GASB issued Statement No. 18, Accounting for Municipal Solid Waste Landfill
Closure and Post-closure Care Costs (the Statement). Under these rules, in addition to operating
expenses related to current activities of the landfill, an expense provision and related liability are being
recognized based on the future closure and post-closure care costs that will be incurred near or after the
date the landfill no longer accepts waste. The recognition of these landfill closure and post-closure care
costs is based on the amount of the landfill used during the year.
The estimated liability for landfill closure and post-closure care costs as of June 30, 2007, is
approximately $9,517,000, which is based on 75°10 usage (filled) of the landfill and is included in accrued
liabilities within the Sanitation Fund. It is estimated that an additional amount of approximately
$4,596,500 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, 2019. The
estimated total current cost of the landfill closure and post-closure care costs at June 30, 2007, was
determined by engineers from Howard R. Green Company and approximated $12,621,500. 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, 2007. 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.
66
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
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, 2007, the Sanitation Fund had $10,393,313 in related
equity in pooled cash and investments, at fair value designated for satisfaction of 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.
14. New Governmental Accounting Standards Board (GASB) Standards
The Governmental Accounting Standards Board (GASB) has issued seven statements not yet
implemented by the City. The statements, which might impact the City are as follows:
Statement No. 43, Financial Reporting for Postemployment Benefit Plans Other than Pension Plans,
issued Apri12004, will be effective for the City for the fiscal year ending June 30, 2008. This statement
establishes uniform financial reporting standards for other postemployment benefit (OPEB) plans and
supersedes the interim guidance included in Statement No. 26. This statement affects reporting by
administrators or trustees of OPEB plan assets or by employers or sponsors that include OPEB plan assets
as trust or agency funds in their financial reports.
Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other
than Pensions issued June 2004, will be effective for the City for the fiscal year ending June 30, 2009.
This statement establishes standards for the measurement, recognition, and display of (OPEB)
expense/expenditures and related liabilities (assets), note disclosures and, if applicable, required
supplementary information (RSI) in the financial reports of state and local governmental employers.
Statement No. 47, Accounting for Termination Benefits issued June 2005, establishes accounting
standards for termination benefits. For termination benefits provided through an existing defined benefit
OPEB plan, the provisions of this Statement should be implemented simultaneously with the
requirements of Statement 45.
Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Infra-Entity Transfers of
Assets and Future Revenues issued September 2006, will be effective for the fiscal year ending June 30,
2008. This statement establishes standards for transactions in which a government receives, or is entitled
to, resources in exchange for future cash flows generated by collecting specific receivables or specific
future revenues. It also establishes standards that apply to all infra-entity transfers of assets and future
revenues.
Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations issued
November 2006, will be effective for the fiscal year ending June 30, 2009. This statement establishes
standards for accounting and financial reporting for obligations to address the current or potential
detrimental effects of existing pollution.
Statement No. 50, Pension Disclosures, issued May 2007, will be effective for the fiscal year ending June
30, 2008. This statement more closely aligns the financial reporting requirements for pensions with those
for other postemployment benefits.
67
CITY OF IOWA CITY, IOWA
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007
Statement No. 51, Accounting and Financial Reporting for Intangible Assets, issued June 2007 will be
effective for the fiscal year ending June 30, 2010. This statement requires that all intangible assets not
specifically excluded by its scope be classified as capital assets.
The City's management has not yet determined the effect these statements will have on the City's
financial statements.
68
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CITY OF IOWA CITY
BUDGETARY COMPARISON SCHEDULE
BUDGET AND ACTUAL -ALL GOVERNMENTAL FUNDS AND ENTERPRISE FUNDS
BUDGETARY BASIS
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended June 30, 2007
(dollar amounts expressed in thousands)
Governmental
Fund Types Enterprise Fund
Actual Budgetary Types Actual Total Actual
Basis Budgetary Basis Budgetary Basis
Revenues:
Property Tax $ 38,960 $ - $ 38,960
Tax increment financing taxes 2,433 - 2,433
Other city taxes 1,495 - 1,495
Licenses and permits 1,400 - 1,400
Intergovernmental 11,891 8,390 20,281
Charges for services 4,428 32,317 36,745
Use of money and property 2,609 3,678 6,287
Miscellaneous 2,494 1,942 4,436
Total revenues 65,710 46,327 112,037
Expenditures/Expenses:
Public safety 16,734 - 16,734
Public works 10,438 - 10,438
Culture and recreation 10,505 - 10,505
Community and economic development 5,002 - 5,002
General government 7,010 - 7,010
Debt service 15,202 - 15,202
Capital outlay 12,097 - 12,097
Business-type - 39,640 39,640
Total expenditures/expenses 76,988 39,640 116,628
Excess (deficiency) of revenues over
(ender) expenditures/expenses
Other financing sources and uses, net
Net change in fund balances
Balances, beginning of year
Balances, end of year
See Note to Required Supplementary Information.
(11,278) 6,687 (4,591)
15,356 (931) 14,425
4,078 5,756 9,834
37,552 73,648 111,200
41,630 79,404 121,034
70
Budgeted Amounts
Final to Actual
Variance -
Positive
Original Final (Negative)
$ 39,094 $ 39,094 $ (134)
1,496 2,467 (34)
1,382 1,502 (7)
1,220 1,220 180
35,321 38,812 (18,531)
38,463 37,757 (1,012)
2,440 5,813 474
4,385 4,806 (370)
123,801 131,471 (19,434)
16,763 17,430 696
10,683 11,042 604
10,331 11,271 766
5,091 6,368 1,366
7,502 7,399 389
12,018 15,202 -
23,6ll 37,712 25,615
45,327 49,194 9,554
131,326 155,618 38,990
(7,525) (24,147) 19,556
8,760 13,519 906
1,235 (10,628) 20,462
94,728 111,200
95,963 100,572
71
CITY OF IOWA CITY
BUDGETARY COMPARISON SCHEDULE
BUDGET TO GAAP RECONCILIATION
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended June 30, 2007
(dollar amounts expressed in thousands)
Revenues
Expenditures
Net
Other financing sources (uses)
Beginning Fund Balances
Ending Fund Balances
Revenues
Expenditures
Net
Other financing sources (uses)
Beginning Fund Balances
Ending Fund Balances
Governmental Fund Types
Accrual Modified Accrual
Budget Basis Adjustments Basis
$ 65,710 $ 1,713 $ 67,423
76,988 (4,060) 72,928
(11,278) 5,773 (5,505)
15,356 (5,175) 10,181
$ 37,552 $ (5,599) $ 31,953
$ 41,630 $ (5,001) $ 36,629
Enterprise Fund Types
Accrual Accrual
Budget Basis Adjustments Basis
$ 46,327 $ (5,608) $ 40,719
39,640 (4,270) 35,370
6,687 (1,338) 5,349
(931) 11,084 10,153
73,648 $ 134,504 208,152
$ 79,404 $ 144,250 $ 223,654
See Note to Required Supplementary Information.
72
City of Iowa City, Iowa
Note to Required Supplementary Information -Budgetary Reporting
For the Year Ended June 30, 2007
In accordance with Code of Iowa, the City Council annually adopts a budget following required public
notice and hearing which includes all funds, except internal service funds and agency funds. The budget
basis of accounting is cash basis. The annual budget may be amended during the year utilizing similar
statutorily prescribed procedures.
Formal and legal budgetary control is based upon nine major classes of expenditures known as functions,
not by fund or fund type. These nine functions are: public safety, public works, health and social
services, culture and recreation, community and economic development, general government, debt
service, capital outlay and business-type. The legal level control is at the aggregated function level, not at
the fund or fund type level.
During the year, budget amendments increased budgeted expenditures by $24,292,000. The budget
amendments were primarily due to changes in breadth and timing of capital improvement projects.
73
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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:
Other Shared Revenue and Grants Fund -accounts for revenue from various sources, primarily road
use tax monies from the State of Iowa and reimbursable programs funded by federal and state grants.
Economic Development Fund -accounts for revenue and expenditures of economic development
activities.
Johnson County Council of Governments Fund -accounts for the financial activities of the
metropolitan/rural cooperative planning organization.
CAPITAL PROJECTS FUNDS
Capital Projects Funds are utilized to account for all resources used in the acquisition and construction of
capital facilities and other major fixed assets, with the exception of those that are financed by proprietary
fund monies. The fund in this category is as follows:
Other Construction Fund -accounts for the construction or replacement of other City general fixed
assets, such as administrative buildings with various funding sources, including general obligation bonds,
intergovernmental revenues and contributions.
75
CITY OF IOWA CITY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2007
(amounts expressed in thousands)
Assets
Equity in pooled cash and investments
Receivables:
Property tax
lnterest
Notes
Due from other governments
Restricted assets:
Equity in pooled cash and investments
Total assets
Liabilities and Fund Balances
Liabilities:
Accounts payable
Contracts payable
Accrued liabilities
Advances from other funds
Deferred revenue
Liabilities payable from restricted assets:
Deposits
Total liabilities
Fund balances:
Reserved for:
Encumbrances
Unreserved
Undesignated
Total fund balances
Total liabilities and fund balances
Capital
Special Revenue Projects
Other Johnson
Shared County
Revenue and Economic Council of Other
Grants Development Governments Construction Total
$ 2,204 $ 1,025 $ 51 $ 179 $ 3,459
- 1 - - 1
- 28 - 35 63
447 - - - 447
488 - 40 1,544 2,072
5 - - 11,571 11,576
$ 3,144 $ 1,054 $ 91 $ 13,329 $ 17,618
$ 103 $ - $ - $ 2,058 $ 2,161
- - - 133 133
75 - 18 2 95
238 - - - 238
453 - - 8 461
5 - - - 5
874 - 18 2,201 3,093
- - - 435 435
2,270 1,054 73 10,693 14,090
2,270 1,054 73 11,128 14,525
$ 3,144 $ 1,054 $ 91 $ 13,329 $ 17,618
76
CITY OF IOWA CITY, IOWA
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended June 30, 2007
(amounts expressed in thousands)
Capital
Special Revenue Projects
Other Johnson
Shared County
Revenue and Economic Council of Other
Grants Development Governments Construction Total
Revenues
Property taxes $ - $ 2,433 $ - $ - $ 2,433
Intergovernmental 5,347 200 274 1,756 7,577
Use of money and property 10 89 - 510 609
Miscellaneous 45 - 1 20 66
Total revenues 5,402 2,722 275 2,286 10,685
Expenditures
Current:
Public safety - - - 185 185
Public works 138 - - 3 141
Culture and recreation 314 314
Community and economic
development 68 1,128 603 33 1,832
General government 114 114
Debt service
Capital outlay 90 - 5 5,215 5,310
Total expenditures 296 1,128 608 5,864 7,896
Excess (deficiency) of revenues over
(under) expenditures 5,106 1,594 (333) (3,578) 2,789
Other Financing Sources (Uses)
Issuance of bonds - - - 8,870 8,870
Transfers in 87 - 360 831 1,278
Transfers out (5,705) (1,107) - (4,236) (11,048)
Total other financing sources
and (uses) (5,618) (1,107) 360 5,465 (900)
Net change in fund balances (512) 487 27 1,887 1,889
Fund Balances, Beginning 2,782 567 46 9,241 12,636
Fund Balances, Ending $ 2,270 $ 1,054 $ 73 $ 11,128 $ 14,525
77
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NONMAJOR ENTERPRISE FUNDS
Enterprise Funds account for operations and activities of the City that are financed and operated in a manner
similar to a private business enterprise, and where the costs of providing services to the general public on a
continuing basis are expected to be financed or recovered primarily through user charges, or where the City has
decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for
capital maintenance, public policy, management control, accountability, or other purposes. The funds in this
category are as follows:
Parking Fund -accounts for the operation and maintenance of the "on" and "ofp' street public parking facilities.
Airport Fund -accounts for the operation and maintenance of the airport facility.
Stormwater Fund -accounts for the operation and maintenance of the stormwater operation.
Cable Television Fund -accounts for the operation and maintenance of the Broadband Telecommunications
Commission that oversees the franchise agreement with the cable television company, including production and
broadcasting on the government television channels.
79
CITY OF IOWA CITY, IOWA
COMBINING STATEMENT OF NET ASSETS
NONMAJOR ENTERPRISE FUNDS
June 30, 2007
(amounts expressed in thousands)
Assets
Current assets:
Equity in pooled cash and investments
Receivables:
Accounts and unbilled usage
Interest
Notes
Due from other governments
Total current assets
Noncurrent assets:
Restricted assets:
Equity in pooled cash and investments
Capital assets:
Land
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Accumulated depreciation
Construction in progress
Total noncurrent assets
Total assets
Liabilities
Current liabilities:
Accounts payable
Contracts payable
Accrued liabilities
Advances from other funds
Bonded debt payable (net of unamortized discounts)
Total current liabilities
Noncurrent liabilities:
Liabilities payable from restricted assets:
Interest payable
Deposits
Bonded debt payable (net of unamortized discounts)
Total noncurrent liabilities
Total liabilities
Net Assets
Invested in capital assets, net of related debt
Restricted by bond ordinance
Restricted for future improvements
Unrestricted
Total net assets
Cable
Parking Airport Stormwater Television Total
$ 2,410 $ - $ 969 $ 957 $ 4,336
94 - 67 173 334
83 12 14 13 122
170 - - - 170
- 357 - - 357
2,757 369 1,050 1,143 5,319
2,048 398 - - 2,446
3,938 7,682 2,130 - 13,750
25,039 3,494 - 741 29,274
166 421 - - 587
397 184 168 97 846
- 2,073 31,846 - 33,919
(11,723) (3,174) (5,654) (226) (20,777)
20 2,695 727 - 3,442
19,885 13,773 29,217 612 63,487
22,642 14,142 30,267 1,755 68,806
33 96 4 8 141
67 260 - - 327
142 10 6 44 202
- 1,180 - - 1,180
351 - - - 351
593 1,546 10 52 2,201
308 - - - 308
8 10 - - 18
9,962 - - - 9,962
10,278 10 - - 10,288
10,871 1,556 10 52 12,489
9,381 13,375 29,217 612 52,585
1,934 - - - 1,934
106 391 - - 497
350 (1,180) 1,040 1,091 1,301
$ 11,771 $ 12,586 $ 30,257 $ 1,703 $ 56,317
80
CITY OF IOWA CITY, IOWA
COMBINING STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN FUND NET ASSETS
NONMAJOR ENTERPRISE FUNDS
For the Year Ended June 30, 2007
(amounts expressed in thousands)
Operating Revenues:
Charges for services
Miscellaneous
Total operating revenues
Operating Expenses:
Personal services
Commodities
Services and charges
Depreciation
Total operating expenses
Operating income (loss)
Nonoperating Revenues (Expenses):
Gain (loss) on disposal of capital assets
Interest income
Interest expense
Total nonoperating revenues (expenses)
Parking Airport Stormwater
$ 4,704 $ 234 $ 622 $
104 - 3 _
4,808 234 625
1,584 88 127
143 12 18
1,246 140 137 _
2,973 240 282
873 193 650
3,846 433 932
962 (199) (307)
- 483 -
227 17 47
(628) - -
(401) 500 47
Cable
726 $ 6,286
- 107
726 6,393
414 2,213
11 184
77 1,600
502 3,997
37 1,753
539 5,750
187 643
Income (loss) before transfers
Capital contributions
Transfers in
Transfers out
Change in net assets
Net Assets, Beginning
Net Assets, Ending
(5) 478
42 333
- (628)
561 301 (260) 224 826
- 1,231 1,251 - 2,482
44 188 2,438 - 2,670
(200) (492) (134) (153) (979)
405 1,228 3,295 71 4,999
11,366 11,358 26,962 1,632 51,318
$ 11,771 $ 12,586 $ 30,257 $ 1,703 $ 56,317
81
CITY OF IOWA CITY, IOWA
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR ENTERPRISE FUNDS
For the Year Ended June 30, 2007
(amounts expressed in thousands)
Cash Flows From Operating Activities
Receipts from customers and users
Payments to suppliers
Payments to employees
Net cash flows from operating activities
Cash Flows From Noncapital Financing Activities
Transfers from other funds
Transfers to other funds
Repayment of advances from other funds
Repayment of notes receivable
Net cash flows from noncapital financing activities
Cash Flows From Capital and Related Financing
Activities
Capital grants received
Acquisition and construction of property and equipment
Proceeds from sale of property
Principal paid on bonded debt
Interest paid on bonded debt
Net cash flows from capital and related financing
activities
Cash Flows From Investing Activities
Interest on investments
Net increase (decrease) in cash and cash equivalents
Cash and Cash Equivalents, Beginning
Cash and Cash Equivalents, Ending
Reconciliation of operating income (loss) to net
cash flows from operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss) to
net cash flows from operating activities:
Depreciation expense
Changes in:
Receivables:
Accounts and unbilled usage
Due from other governments
Accounts payable
Accrued liabilities
Deposits
Total adjustments
Net cash flows from operating activities
Noncash Investing, Capital, and Financing Activities:
Contributions of capital assets from government and others
Cable
Parking Airport Stormwater Television Total
$ 4,870 $ (34) $ 623 $ 717 $ 6,176
(1,393) (71) (153) (81) (1,698)
(1,574) (86) (127) (416) (2,203)
1,903 (191) 343 220 2,275
44 188 - - 232
(200) (492) (134) (153) (979)
- (44) - - (44)
- 1,231 - - 1,231
(121) (1,221) (51) (13) (1,406)
- 835 - - 835
(645) - - - (645)
(634) - - - (634)
(1,400) 845 (51) (13) (619)
225 7 44 41 317
627 313 202 95 1,237
3,831 85 767 862 5,545
$ 4,458 $ 398 $ 969 $ 957 $ 6,782
$ 962 $ (199) $ (307) $ 187 $ 643
873 193 650 37 1,753
58 - (2) (9) 47
- (269) - - (269)
(4) 81 2 7 86
10 2 - (2) 10
4 1 - - 5
941 8 650 33 1,632
$ 1,903 $ (191) $ 343 $ 220 $ 2,275
$ - $ 1,231 $ 3,689 $ - $ 4,920
82
INTERNAL SERVICE FUNDS
Internal Service Funds account for goods and services provided by one department to other City departments on a
cost-reimbursement basis. The funds in this category are:
Equipment Maintenance Fund -accounts for the provision of maintenance for City vehicles and equipment and
vehicle rental to other City departments from a central vehicle pool.
Central Services Fund -accounts for the support services of photocopying, paper supplies, mail, overnight
shipping, and two-way radios provided to other City departments.
Loss Reserve Fund -accounts for the property, liability, Workers' Compensation and health insurance premiums
and claims activity for City departments, including the self-insured retention portion.
Information Technology Fund -accounts for the accumulation and allocation of costs associated with
telecommunications and data processing, including the operation and replacement of equipment.
83
CITY OF IOWA CITY
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
June 30, 2007
(amounts expressed in thousands)
Equipment Central Loss Information
Maintenance Services Reserve Technology
Assets
Current assets:
Equity in pooled cash and investments
Receivables:
Interest
Due from other governments
Inventories
Total current assets
Noncurrent assets:
Capital assets:
Land
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Accumulated depreciation
Total noncurrent assets
Total assets
Liabilities
Accounts payable
Accrued liabilities
Total liabilities
Net Assets
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Total
$ 5,103 $ 482 $ 6,321 $ 2,571 $ 14,477
75 7 98 40 220
68 - - - 68
279 - - - 279
5,525 489 6,419 2,611 15,044
45 -
578 -
50 -
10,644 240
(7,398) (155)
3,919 85
119
195
3,919
5,330
$ 9,249 $
- - 45
- 253 831
- - 50
- 1,343 12,227
- 940 940
- (1,284) (8,837)
- 1,252 5,256
13 207 6 345
2 1,833 74 1,985
15 2,040 80 2,330
85 - 1,252 5,256
474 4,379 2,531 12,714
559 $ 4,379 $ 3,783 $ 17,970
84
CITY OF IOWA CITY, IOWA
COMBINING STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS
For the Year Ended June 30, 2007
(amounts expressed in thousands)
Equipment Central Loss Information
Maintenance Services Reserve Technology Total
Operating Revenues:
Charges for services $ 3,916 $ 306 $ 9,209 $ 1,732 $ 15,163
Total operating revenues 3,916 306 9,209 1,732 15,163
Operating Expenses:
Personal services 785 35 135 870 1,825
Commodities 1,626 15 6 254 1,901
Services and charges 375 153 7,687 453 8,668
2,786 203 7,828 1,577 12,394
Depreciation 1,025 26 - 186 1,237
Total operating expenses 3,811 229 7,828 1,763 13,631
Operating income (loss) 105 77 1,381 (31) 1,532
Nonoperating Revenues (Expenses):
Gain (loss) on disposal of capital assets 33 (2) - 30 61
Interest income 239 23 264 140 666
Total nonoperating revenues 272 21 264 170 727
Income before capital contributions
Income before transfers 377 98 1,645 139 2,259
Transfers in 61 - - 4 65
Change in net assets 438 98 1,645 143 2,324
Net Assets, Beginning 8,811 461 2,734 3,640 15,646
Net Assets, Ending $ 9,249 $ 559 $ 4,379 $ 3,783 $ 17,970
85
CITY OF IOWA CITY, IOWA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For the Year Ended June 30, 2007
(amounts expressed in thousands)
Equipment Central Loss Information
Maintenance Services Reserve Technology Total
Cash Flows From Operating Activities
Receipts from customers and users $ 3,886 $ 306 $ 9,209 $ 1,732 $ 15,133
Payments to suppliers (2,021) (161) (8,007) (720) (10,909)
Payments to employees (797) (35) (197) (860) (1,889)
Net cash flows from operating activities 1,068 110 1,005 152 2,335
Cash Flows From Noncapital Financing
Activities
Transfers from other funds
Net cash flows from noncapital financing
activities
Cash Flows From Capital and Related
Financing Activities
Acquisition and construction of property
and equipment
Proceeds from sale of property
Net cash flows from capital and related
financing activities
Cash Flows From Investing Activities
Interest on investments
Net increase in cash and cash
equivalents
Cash and Cash Equivalents, Beginning
Cash and Cash Equivalents, Ending
Reconciliation of operating income (loss)
to net cash flows from operating activities:
Operating income (loss)
Adjustments to reconcile operating income
(loss) to net cash flows from operating
activities:
Depreciation expense
Changes in:
Receivables:
Due from other governments
Inventories
Accounts payable
Accrued liabilities
Total adjustments
Net cash flows from operating activities
61 - - 4
61 - - 4
65
65
(677) (20) - (5) (702)
110 1 - 30 141
(567) (19) - 25 (561)
230 22 249 137 638
792 113 1,254 318 2,477
4,311 369 5,067 2,253 12,000
$ 5,103 $ 482 $ 6,321 $ 2,571 $ 14,477
$ 105 $ 77 $ 1,381 $
1,025 26 -
(30) - -
(16) - -
(4) 7 (314)
(12) - (62) _
963 33 (376)
$ 1,068 $ 110 $ 1,005 $
(31) $ 1,532
186 1,237
- (30)
- (16)
(13) (324)
10 (64)
86
AGENCY FUNDS
The Agency Funds account 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 funds in this category are:
Project Green Fund -accounts for donations that are received to plant and develop yards and lawns, both public
and private, within Iowa City.
Library Foundation -accounts for donations that are made to support the library development office.
Parks and Recreation Foundation -accounts for donations that are received for park improvements.
PATV -accounts for investments made on behalf of Public Access Television.
s~
CITY OF IOWA CITY
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUNDS
For the Year Ended June 30, 2007
(amounts expressed in thousands)
Balance Balance
July 1, 2006 lncreases llecreases June 30, 2007
Project Green
Assets
Equity in pooled cash and investments $ 241 $ 66 $ 110 $ 197
Interest receivable 4 3 4 3
Total assets $ 245 $ 69 $ 114 $ 200
Liabilities
Accounts payable $ 54 $ 2 $ 54 $ 2
Due to agency 191 67 60 198
Total liabilities $ 245 $ 69 $ 114 $ 200
Library Foundation
Assets
Equity in pooled cash and investments $ 2 $ 5 $ 6 $ 1
Accounts receivable 4 1 - 5
$ 6 $ 6 $ 6 $ 6
Liabilities
Accounts payable $ 1 $ - $ 1 $ -
Accrued liabilities 4 6 4 6
Due to agency 1 - 1 -
Totalliabilities $ 6 $ 6 $ 6 $ 6
Parks and Recreation Foundation
Assets
Equity in pooled cash and investments $ 52 $ 1 $ 53 $ -
Interestreceivable $ 1 $ - $ 1 $ -
Total assets $ 53 $ 1 $ 54 $ -
Liabilities
Accounts payable $ 53 $ 1 $ 54 $ -
(continued)
88
CITY OF IOWA CITY
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES (continued)
AGENCY FUNDS
For the Year Ended June 30, 2007
(amounts expressed in thousands)
PATV
Assets
Equity in pooled cash and investments
Interest receivable
Liabilities
llue to agency
Total Agency Funds
Assets
Balance Balance
July 1, 2006 lncreases llecreases June 30, 2007
$ 116 $ 205 $ 321 $ -
2 - 2 -
$ 118 $ 205 $ 323 $ -
$ 118 $ 205 $ 323 $ -
Equity in pooled cash and investments $ 411 $ 277 $ 490 $ 198
Accounts receivable 4 1 - 5
Interest receivable 7 3 7 3
Total assets $ 422 $ 281 $ 497 $ 206
Liabilities
Accounts payable $ 108 $ 3 $ 109 $ 2
Accrued liabilities 4 6 4 6
Due to agency 310 272 384 198
Total liabilities $ 422 $ 281 $ 497 $ 206
89
90
.. .v. f" .~? .~,~
. t f•:~..
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 93
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 98
These schedules contain information to help the reader assess the
government's most significant local revenue source, the property tax.
Debt Capacity 103
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 111
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 114
These schedules contain service and infrastructure data to help the reader
understand how the information in the government's financial report relates
to the services the government provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial report for the relevant year. The city implemented GASB 34 in PY03; schedules
presenting government-wide information include information beginning in that year.
91
92
.. .v. f" .~? .~,~
. t f•:~..
CITY OF IOWA CITY, IOWA
NET ASSETS BY COMPONENT
Last Five Fiscal Years
(Accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year
2003 2004 2005 2006 2007
Governmental activities
Invested in capital assets, net of related debt $ 73,447 $ 67,090 $ 84,768 $ 95,227 $ 101,027
Restricted 22,499 17,705 16,973 6,852 8,181
Unrestricted 16,926 11,700 3,793 10,827 11,043
Total governmental activities net assets $ 112,872 $ 96,495 $ 105,534 $ 112,906 $ 120,251
Business-type activities
Invested in capital assets, net of related debt $ 111,487 $ 150,817 $ 150,797 $ 155,346 $ 172,518
Restricted 24,420 14,932 15,038 15,682 23,893
Unrestricted 33,339 36,246 40,780 42,988 33,695
Total business-type activites net assets $ 169,246 $ 201,995 $ 206,615 $ 214,016 $ 230,106
Primary government
Invested in capital assets, net of related debt $ 184,934 $ 217,907 $ 235,565 $ 250,573 $ 273,545
Restricted 46,919 32,637 32,011 22,534 32,074
Unrestricted 50,265 47,946 44,573 53,815 44,738
Total primary government net assets $ 282,118 $ 298,490 $ 312,149 $ 326,922 $ 350,357
93
CITY OF IOWA CITY, IOWA
CHANGES IN NET ASSETS
Last Five Fiscal Years
(Accrual basis of accounting)
(amounts expressed in thousands)
Expenses
Governmental activities:
Public Safety
Public Works
Culture and recreation
Community and economic development
General government
Debt Service
Total governmental activities expenses
Business-type activities:
Wastewater
Water
Sanitation
Housing Authority
Parking
Airport
Stormwater
Cable Television
Total business-type activities expenses
Total primary government expenses
Program Revenues
Governmental activities:
Charges for services
Public Safety
Public Works
Culture and recreation
Community and economic development
General government
Operating grants and contributions
Capital grants and contributions
Total governmental activities program revenues
Business-type activities:
Charges for services:
Wastewater
Water
Sanitation
Housing Authority
Parking
Airport
Stormwater
Cable Television
Capital grants and contributions: Wastewater
Capital grants and contributions: Water
Capital grants and contributions: Sanitation
Capital grants and contributions: Airport
Capital grants and contributions: Stormwater
Operating grants and contributions: Housing Authority
Operating grants and contributions: Water
Operating grants and contributions: Airport
Operating grants and contributions: Sanitation
Operating grants and contributions: Wastewater
Total business-type activities program revenues
Total primary government revenues
Fiscal Year
2003 2004 2005 2006 2007
$ 13,844 $ 15,015 $ 15,286 $ 16,690 $ 16,694
11,539 10,423 11,521 12,723 13,560
10,131 12,051 11,341 11,458 11,970
3,133 2,580 6,960 6,264 4,680
6,251 6,527 6,500 6,892 7,258
3,662 3,440 3,602 3,404 3,459
48,560 50,036 55,210 57,431 57,621
12,086 12,344 12,214 11,710 11,537
7,861 8,011 8,313 9,324 8,823
4,082 6,103 6,031 6,101 6,684
6,519 7,219 7,466 7,026 6,884
3,554 3,898 3,989 3,884 4,403
431 515 520 512 418
652 1,452 817 932
687 549 607 576 525
35,220 39,291 40,592 39,950 40,206
$ 83,780 $ 89,327 $ 95,802 $ 97,381 $ 97,827
$ 2,507 $ 3,038 $ 2,928 $ 2,971 $ 3,088
1,118 1,006 1,076 1,062 1,229
1,145 630 653 707 712
192 - - - -
1,416 1,428 1,482 1,556 1,569
2,965 2,150 2,592 2,937 3,215
2,205 6,198 7,679 3,849 4,283
11, 548 14,450 16,410 13,082 14,096
12,445 12,580 12,145 12,145 12,535
9,677 9,164 8,602 9,012 8,240
6,531 7,111 7,154 7,133 7,204
221 219 181 168 132
3,636 4,011 4,045 3,936 4,704
180 213 220 264 234
- 104 592 597 622
298 673 708 718 726
1,077 968 761 773 1,539
640 452 588 606 845
- - - 46 -
- 116 283 1,125 1,231
- 717 755 468 1,251
6,291 6,950 7,012 7,414 7,165
131 - - - -
36 - - - -
201 9 - 3 6
- - - - 1
41,364 43,287 43,046 44,408 46,435
$ 52,912 $ 57,737 $ 59,456 $ 57,490 $ 60,531
(continued)
94
CITY OF IOWA CITY, IOWA
CHANGES IN NET ASSETS (continued)
Last Five Fiscal Years
(Accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year
2003 2004 2005 2006 2007
Net (Expense) /Revenues
Governmental activities $ (37,012) $ (35,586) $ (38,800) $ (44,349) $ (43,525)
Business-type activities 6,144 3,996 2,454 4,458 6,229
Total primary government net expense (30,868) (31,590) (36,346) (39,891) (37,296)
General Revenues and Other Changes in Net Assets
Governmental activities:
General revenues:
Property taxes $ 32,257 $ 34,173 $ 35,327 $ 37,770 $ 41,492
Road use tax 5,144 5,311 5,269 5,303 5,305
Other taxes 1,399 1,609 1,351 1,240 1,412
Earnings on investments 1,207 1,056 1,576 2,678 4,045
Miscellaneous 3,174 3,746 3,994 4,422 3,656
Gain on sale of assets (1,726) 65 95 100 281
Transfers 1,444 (1,840) 645 208 (5,321)
Total governmental activities 42,899 44,120 48,257 51,721 50,870
Business-type activities:
General revenues:
Earnings on investments 1,305 991 1,771 2,575 3,606
Gain on sale of assets 315 1,009 304 185 591
Miscellaneous 994 335 418 391 343
Transfers (1,444) 1,840 (645) (208) 5,321
Total business-type activities 1,170 4,175 1,848 2,943 9,861
Total primary government $ 44,069 $ 48,295 $ 50,105 $ 54,664 $ 60,731
Change in Net Assets
Governmental activates $ 5,887 $ 8,534 $ 9,457 $ 7,372 $ 7,345
Business-type activates 7,314 8,171 4,302 7,401 16,090
Total primary government 13,201 16,705 13,759 14,773 23,435
95
CITY OF IOWA CITY, IOWA
FUND BALANCES, GOVERNMENTAL FUNDS
Last Five Fiscal Years
(Modified accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year
2003 2004 2005 2006 2007
General Fund
Reserved $ 1,094 $ 396 $ 362 $ 570 $ 568
Unreserved 13,012 14,301 15,525 16,551 18,528
Total general fund $ 14,106 $ 14,697 $ 15,887 $ 17,121 $ 19,096
All other Governmental Funds
Reserved $ 11,536 $ 1,677 $ 2,198 $ 1,592 $ 1,984
Reserved for long-term debt 4,448 6,930 3,067 2,725 4,289
Unreserved, reported in:
Special revenue funds 3,819 9,379 6,222 3,422 3,366
Captalprojectsfunds 1,047 3,882 6,143 7,093 7,894
Total all other governmental funds $ 20,850 $ 21,868 $ 17,630 $ 14,832 $ 17,533
96
CITY OF IOWA CITY, IOWA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
Last Five Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
llevenues:
Property taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Use of money and property
Miscellaneous
Total governmental activities expenses
Expenditures
Current
Public safety
Public works
Culture and recreation
Community and economic development
General government
Debt service
Principal
Interest
Capital projects
Total expenditures
Excess (deficiency) of revenues over
(under) expenditures
Other financing sources (uses):
Issuance of long-term debt
Sale of capital assets
Issuance of note payable
Premium (discount) on issuance of bonds
Payment of refunded bonds
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Debt service as a percentage of
noncapital expenditures
Fiscal Year
2003 2004 2005 2006 2007
$ 31,966 $ 35,538 $ 36,677 $ 39,011 $ 42,905
961 1,361 1, 255 1, 279 1,404
12,193 12,058 15,546 14,260 13,455
4,674 3,240 3,301 2,227 2,423
997 1,002 1,354 2,203 3,378
2,558 4,377 4,121 4,176 3,858
$ 53,349 $ 57,576 $ 62,254 $ 63,156 $ 67,423
$ 13,115 $ 14,025 $ 14,601 $ 15,819 $ 16,412
8,149 9,156 9,698 10,351 12,452
8,061 9,392 9,183 10,122 10,261
3,715 3,486 6,375 4,698 3,445
5,887 6,080 6,282 6,510 7,194
4,742 5,172 9,349 6,099 6,700
3,683 3,336 3,676 3,458 3,464
20,095 16,065 13,939 15,153 13,000
$ 67,447 $ 66,712 $ 73,103 $ 72,210 $ 72,928
$ (14,098) $ (9,136) $ (10,849) $ (9,054) $ (5,505)
$ 10,600 $ 12,875 $ 7,020 $ 7,265 $ 8,870
- 384 406 109 470
- - 211 - -
93 (19) 43 29 -
(6,415) - - - -
15,172 14,614 15,776 21,627 21,552
(14,554) (16,733) (15,237) (21,540) (20,711)
$ 4,896 $ 11,121 $ 8,219 $ 7,490 $ 10,181
$ (9,202) $ 1,985 $ (2,630) $ (1,564) $ 4,676
17.8% 16.8% 22.0% 16.7% 17.0%
97
CITY OF IOWA CITY, IOWA
GENERAL GOVERNMENT TAX REVENUES BY SOURCE
Last Ten Fiscal Years
(Modified accrual basis of accounting)
(amounts expressed in thousands)
Fiscal
Year Property Tax Road Use Tax HoteUMotel Tax Total
1998 $ 20,635 $ 4,087 $ 501 $ 25,223
1999 22,153 4,575 570 27,298
2000 24,271 4,928 554 29,753
2001 27,071 4,852 497 32,420
2002 28,623 5,077 646 34,346
2003 31,966 5,103 559 37,628
2004 34,958 5,311 580 40,849
2005 36,076 5,269 611 41,956
2006 38,336 5,303 674 44,313
2007 42,221 5,305 683 48,209
98
CITY OF IOWA CITY, IOWA
ASSESSED AND TAXABLE VALUE OF PROPERTY
Last Ten Fiscal Years
(amounts expressed in thousands)
Taxable Property
Fiscal Assessed Value/ Total Taxable Total
Year Ended Estimated Exempt Assessed Direct
une 30 Actual Value Property Value Value Tax Rate
1998 2,423,557 123,068 2,300,489 13.050
1999 2,597,827 128,115 2,469,712 13.133
2000 2,699,944 136,493 2,563,451 13.851
2001 2,920,580 137,713 2,782,867 14.757
2002 2,975,254 152,991 2,822,263 14.850
2003 3,214,973 155,407 3,059,566 16.813
2004 3,322,001 176,188 3,145,813 17.596
2005 3,834,435 181,186 3,653,249 17.314
2006 3,953,781 183,799 3,769,982 17.729
2007 4,280,119 212,203 4,067,916 17.302
Source: City of Iowa City Assessor's Office
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 and tangible personal 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, and the value so assessed shall be taken and
considered as the assessed value and taxable value of the property upon which the levy shall be made.
Taxable property includes real property, buildings and structures, industrial plant and fixtures, commercial equipment
assessed as real property and utilities distribution property.
Exempt property includes all property that is owned by religious and educational institutions, charitable and benevolent
societies, low-rent housing and associations for war veterans. Each must apply for property tax exempt status with the City
Assessor, who determines if the property qualifies under state guidelines. Exempt property is assessed each year like other
taxable property. Property owned by governmental entities is not taxable and is not included in "Exempt Property."
99
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CITY OF IOWA CITY, IOWA
PROPERTY TAX BUDGETS AND COLLECTIONS
Last Ten Fiscal Years
(Cash basis of accounting)
(amounts expressed in thousands)
Percent of Total as
Collection Total Tax Current Tax Levy Delinquent Tax Total Tax a Percent of
Year Levied Collections Collected Collections Collections Levv
1998 $ 20,807 $ 20,521 98.6 % $ 8 $ 20,529 98.7 %
1999 21,735 21,842 100.5 22 21,864 100.6
2000 23,945 23,989 100.2 5 23,994 100.2
2001 26,089 25,684 98.4 31 25,715 98.6
2002 27,920 28,423 101.8 5 28,428 101.8
2003 31,975 31,863 99.6 16 31,879 99.7
2004 34,073 34,009 99.8 23 34,032 99.9
2005 34,403 34,814 101.2 15 34,829 101.2
2006 36,460 36,654 100.5 44 36,698 100.7
2007 39,094 38,947 99.6 13 38,960 99.7
Source: Certificate of city taxes and Johnson County Treasurer's Office
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104
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)
Fiscal Year
Ended Total
une 30 Principal Interest Debt Service
1998 $ 1,988 $ 739 $ 2,727 $
1999 2,452 1,038 3,490
2000 2,918 1,360 4,278
2001 3,541 1,763 5,304
2002 3,599 2,136 5,735
2003 4,742 3,683 8,425
2004 5,172 3,336 8,508
2005 9,349 3,676 13,025
2006 6,099 3,458 9,557
2007 6,700 3,464 10,164
Notes:
iGeneral Fund, Special Revenue Funds and Debt Service Fund.
~ Beginning in FY03, Capital Projects Funds are also included.
Total
General
Governmental
Expenditures
and Transfers
47,311
45,851
52,727
53,898
53,462
82,001
83,445
88,342
93,750
93,639
Ratio of Debt
Service to General
Expenditures
.06:1.00
.08:1.00
.08:1.00
.10:1.00
.11:1.00
.10:1.00
.10:1.00
.15:1.00
.10:1.00
.11:1.00
105
CITY OF IOWA CITY, IOWA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
June 30, 2007
Name of
Governmental Unit
City of Iowa City
Iowa City Community
School District
Total
Per capita assessed value
(amounts expressed in thousands, except per capita)
Total General
Long-Term
Bonded Debt
Outstanding
$ 85,840
% Applicable
to the
City of
Iowa City
100.00% $
Amount
Applicable
to the
City of
Iowa City Per Capita
85,840 $ 1,365
31,700 61.20% 19,400 308
$ 117,540 $ 105,240 $ 1,673
$ 68,060
Source: Johnson County Auditor's Office
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.
However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of
each overlapping government.
106
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108
CITY OF IOWA CITY, IOWA
SCHEDULE OF REVENUE BOND COVERAGE
Last Ten Fiscal Years
(amounts expressed in thousands)
Fiscal
Year Net Revenue Annual Deb t Service
Ended Available for Ratio of
une 30 Revenue Expensed Debt Service Principal Interest Total Coverage
Parking Revenue3
1998 $ 3,822 $ 1,770 $ 2,052 $ 390 $ 195 $ 585 3.51
1999 3,653 1,713 1,940 415 168 583 3.33
2000 3,716 1,861 1,855 455 139 594 3.12
2001 4,309 2,176 2,133 485 836 1,321 1.61
2002 4,272 1,960 2,312 510 746 1,256 1.84
2003 4,198 1,953 2,245 375 715 1,090 2.06
2004 4,164 2,319 1,845 395 687 1,082 1.71
2005 4,360 2,377 1,983 305 663 968 2.05
2006 4,161 2,380 1,781 320 645 965 1.85
2007 5,035 2,973 2,062 335 626 961 2.15
Treatment Revenue4
1998 $ 11,066 $ 2,809 $ 8,257 $ 1,490 $ 3,382 $ 4,872 1.69
1999 11,362 2,987 8,375 2,065 3,519 5,584 1.50
2000 11,872 3,259 8,613 2,160 3,691 5,851 1.47
2001 12,824 3,248 9,576 2,505 3,589 6,094 1.57
2002 12,501 3,389 9,112 3,005 4,236 7,241 1.26
2003 13,000 4,463 8,537 3,060 4,385 7,445 1.15
2004 12,947 4,523 8,424 3,280 3,672 6,952 1.21
2005 12,600 4,432 8,168 3,630 3,537 7,167 1.14
2006 12,798 4,260 8,538 3,815 3,390 7,205 1.19
2007 13,708 4,236 9,472 3,905 3,234 7,139 1.33
Water Revenues
1999 $ 8,571 $ 3,295 $ 5,276 $ - $ - $ - 0.00
2000 9,626 3,384 6,242 - 299 299 20.88
2001 10,629 3,410 7,219 140 445 585 12.34
2002 10,179 3,428 6,751 705 1,175 1,880 3.59
2003 10,241 4,361 5,880 500 1,088 1,588 3.70
2004 10,627 4,360 6,267 925 1,427 2,352 2.66
2005 9,287 4,783 4,504 845 1,340 2,185 2.06
2006 9,918 5,722 4,196 880 1,305 2,185 1.92
2007 9,220 5,356 3,864 915 1,268 2,183 1.77
Note:
iExcludes depreciation and interest.
Includes principal and interest of revenue bonds only.
3Parking Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service"
is required to be at least 1.25.
4Wastewater Treatment Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total
Annual Debt Service" is required to be at least 1.10.
WWater Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service"
is required to be at least 1.10.
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CITY OF IOWA CITY, IOWA
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION
Last Ten Fiscal Years
Full-Time Equivalent Emolovees as of June 30
1998 1999 2000 2001 2002 2003
Public Safety
Police 88.25 90.75 96.25 96.25 97.25 97.25
Fire 52 52 52 52 58 58
Animal Shelter 5 5.44 5.5 5.5 5.5 6
Inspection Services 14.13 14.13 14.13 14.13 14.13 14.13
Public Works
Public Works Admin 2 2 2 3 2 2
Engineering 11 ll 10.6 11.6 13.6 13.6
Traffic Engineering 3.75 3.75 4.15 4.15 4.15 5.65
Streets 23 23 23.5 23.5 23.5 22
Culture and Recreation
Parks and Rec Admin 2 2 2 2 2 2
Recreation 12.67 13.17 14.67 15.17 15.17 15.17
Parks 11.5 12 13 13 13 13
Forestry 3 3 3 3 3 3
Cemetery 3 3 3 3 3 3
CBD Maintenance 2.5 3 3 3 3 3
Library 38 38 40.25 40.25 41.25 41.25
Senior Center 5.5 5.5 6 6 6 5.81
Community and Economic Developmern 8.45 8.45 8.55 8.55 9.05 8.35
General Government
City Council 7 7 7 7 7 7
City Manager 3 3 3 3 3 3
City Clerk 4.5 4.5 5 4.5 4.5 4
City Attorney 6 6 6 6 6.6 6.6
Personnel 3 4 4 4 4 4
Finance 28.22 28.62 27.71 27.36 28.61 28.61
Government Buildings 4.08 4.08 4.08 4.97 4.96 4.96
Energy Conservation 0.5 0.5 0.5 0.5 0.5 0.5
Human Rights 2 2 2 2 2 2.5
Transit 49.5 48.75 48.25 48.25 48.5 48.5
Special Revenue
Employee Benefits 0.38 0.38 0.45 0.45 0.4 0.34
CIP /Roads 7 6 7 7
Community Development 4.75 4.75 4.75 4.75 4.75 5.45
JCCOG 5.8 5.8 6.1 6.1 6.1 6.1
Library Development 1.5 1.5 1.5 1.5 1.5 1.5
Internal Service Funds
Information Technology 5.5 5.5 7.95 7.5 7.5 7.5
Equipment 9.5 9.5 9.5 9.5 10.25 11.25
Central Services 1.7 1.7 2.1 2.25 0.75 0.75
Risk Management 1.59 1.59 1.56 1.46 1.26 1.33
Business-Type Activities
Parking 27.5 30.5 30.5 37 37 31.5
Wastewater Treatment 28.3 30.3 25.3 25.3 26.3 26.3
Water 25.95 25.95 26.2 26.2 28.2 30.7
Sanitation 31 31 31.85 32.35 32.35 32.35
Airport 1.5 1.5 1.75 2 2 2
Cable television 4.6 4.75 5.25 5.25 5.25 6.19
Stormwater
Housing Authority 10.75 11.75 10.75 12.5 12.5 12.5
Total 553.87 565.11 581.65 591.79 606.38 605.64
Source: City's Financial Plans. 114
Full-Time Equivalent Employees as of June 30
2004 2005 2006 2007
97.25 94.25 94.25 96.25
58 56 57 57
6 6 6 6
14.13 13.88 14.88 14.88
2 2 2 2
13.6 11.6 11.6 11.6
5.65 5.65 4.15 4.15
22 22 23.5 23.5
2 2 2 2
15.17 15.17 15.17 15.42
13 12 13 13
3 3 3 3
3 3 3 3
3 3 3 3
43.25 42.63 42.63 42.89
5.81 6.31 6.31 6.31
9.45 8.45 8.45 8.45
7 7 7 7
3 3 3 3
4 4 4 4
6.6 6.6 6.6 6.6
4 4 4 4
28.61 26.61 26.75 26.75
4.96 4.96 4.96 4.96
0.5 0.5 0.5 0.5
2.5 2.5 2.5 2.5
48.5 50.5 50.5 50.5
0.34 0.34 0.39 0.39
7 3 2 2
5.35 4.35 4.35 4.35
6.1 6.1 6.6 6.6
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7.5 8 11.75 12
11.26 11.25 11.26 11.26
0.75 0.75 0.75 0.75
1.33 1.32 1.38 1.38
31.5 32.75 32.75 32.75
27.3 27.3 25.5 25.5
31.7 31.7 32.5 32
32.35 34.35 33.85 33.85
2 2 1.6 1.6
6.19 6.19 6.19 6.19
0.5 1
12.5 12.75 13.25 13.25
610.65 599.56 605.37 608.13
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CPAs 6i BUSINESS ADVISORS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENTAUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
City of Iowa City, Iowa
We have audited 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, 2007, which collectively comprise the City's basic financial statements and have issued our
report thereon dated December 13, 2007. We conducted our audit in accordance with auditing standards
generally accepted in the United States of America and the standards applicable to fmancial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial reporting as a
basis for designing our auditing procedures for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control
over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City's internal
control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned fiznctions, to prevent or detect nusstatements on a
timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that
adversely affects the City's ability to initiate, authorize, record, process, or report financial data reliably in
accordance with generally accepted accounting principles such that there is more than a remote likelihood that
a misstatement of the City's financial statements that is more than inconsequential will not be prevented or
detected by the City's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more
than a remote likelihood that a material misstatement of the fmancial statements will not be prevented or
detected by the City's internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over
financial reporting that we consider to be material weaknesses, as defined above.
121
PEOPLE. PRINCIPLES. POSSIBILITIES.
www.eidebailly.com
3999 Pennsylvania Ave., Sre. 1001 Dubuque, Iowa 52002-2273 1 Phone 563.556.17901 Fax 563.557.7842 1 EOE
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of 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
fmancial statement amounts. However, providing an opinion on compliance with those provisions was not an
obj ective 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,
2007, are based exclusively on knowledge obtained from procedures performed during our audit of the
financial statements of the City of Iowa City, Iowa, and are reported in Part II of the accompanying Schedule of
Findings and Questioned Costs. Since our audit was based on tests and samples, not all transactions that might
have had an impact on the comments were necessarily audited. The comments involving statutory and other
legal matters are not intended to constitute legal interpretations of those statutes.
We noted certain matters that we reported to management of the City in a separate letter dated December 13,
2007.
This report, a public record by law, is intended solely for the information and use of the officials, employees,
and citizens of the City of Iowa City, Iowa, and other parties to whom the City of Iowa City, Iowa, may report,
including federal awarding agencies and pass-through entities. This report is not intended to be and should not
be used by anyone other than these specified parties.
We would like to acknowledge the many courtesies and assistance extended to us by personnel of the City of
Iowa City, Iowa, during the course of our audit. Should you have any questions concerning any of the above
matters, we shall be pleased to discuss them with you at your convenience.
~~~~
Dubuque, Iowa
December 13, 2007
122
~~'1
EideBaillyM
~~
CPAs & BUSINESS ADVISORS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO
EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER
COMPLIANCE IN ACCORDANCE WITH OMB CHtCULAR A-133
To the Honorable Mayor and Members of the City Council
City of Iowa City, Iowa
Compliance
We have audited the compliance of the City of Iowa City, Iowa, with the types of compliance requirements
described in the U. S. Office of Management and Budget (OMB) CircularA-133 Compliance Supplement that
are applicable to each of its major federal programs for the year ended June 30, 2007. The City's major federal
programs are identified in the summary of the independent auditor's results section of the accompanying
Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts,
and grant agreements applicable to each of its major federal programs is the responsibility of the City's
management. Our responsibility is to express an opinion on the City's compliance based on our audit.
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 OMB Circular A-133, Audits of States, Local
Governments, and Non Profit Organizations. Those standards and OMB Circular A-133 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 the City's compliance with
those requirements and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal
determination on the City's compliance with those requirements.
In our opinion, the City of Iowa City, Iowa, complied, in all material respects, with the requirements referred to
above that are applicable to each of its major federal programs for the year ended June 30, 2007.
Internal Control Over Compliance
The management of the City of Iowa City, Iowa, is responsible for establishing and maintaining effective
internal control over compliance with requirements of laws, regulations, contracts, and grant agreements
applicable to federal programs. In planning and performing our audit, we considered the City's internal control
over compliance with requirements that could have a direct and material effect on a major federal program in
order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not
for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly,
we do not express an opinion on the effectiveness of the City's internal control over compliance.
123
PEOPLE. PRINCIPLES. POSSIBILITIES.
www.eidebailly.com
3999 Pennsylvania Ave., Ste. 1001 Dubuque, Iowa 52002-2273 1 Phone 563.556.17901 Fax 563.557.7842 1 EOE
A control deficiency in the City's internal control over compliance 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 non-compliance with a type of compliance requirement of a federal program on a timely
basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely
affects the City's ability to administer a federal program such that there is more than a remote likelihood non-
compliancewith atype ofcompliance requirement of a federal program that is more than inconsequential will
not be prevented or detected by the City's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more
than a remote likelihood material non-compliance with a type of compliance requirement of a federal program
will not be prevented or detected by the City's internal control.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses, as defined above.
This report, a public record by law, is intended solely for the information and use of the officials, employees,
and citizens of the City of Iowa City, Iowa, and other parties to whom the City of Iowa City, Iowa, may report,
including federal awarding agencies and pass-through entities. This report is not intended to be and should not
be used by anyone other than these specified parties.
Dubuque, Iowa
December 13, 2007
124
CITY OF IOWA CITY, IOWA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2007
Grantor/Proax'am CFDA Number
Direct:
Department of Housing and Urban Development:
Community Development Block Grants/
Entitlement Grants
Community Development Block Grants/
Entitlement Grants
Agency or
Pass-through Program
Number Expenditures
14.218 B-OS-MC-19-0009 $ 649,554
14.218 B-06-MC-19-0009 184,160
833,714
HOME Investment Partnerships Program 14.239 M-03-MC-19-0205 202,404
HOME Investment Partnerships Program 14.239 M-04-MC-19-0205 441,256
HOME Investment Partnerships Program 14.239 M-OS-MC-19-0205 36,598
HOME Investment Partnerships Program 14.239 M-06-MC-19-0205 118,635
798,893
Public and Indian Housing 14.850 IA-022-003-06D 76,588
Public and Indian Housing 14.850 IA-022-003-07D 105,452
182,040
Resident Opportunity and Supportive Services 14.870 IA022REFOl0A003 106,661
Section 8 Housing Choice Vouchers 14.871 KC9033 6,556,058
Public Housing Capital Fund 14.872 IAOSP02250106 155,093
Public Housing Capital Fund 14.872 IAOSP02250105 104,943
Public Housing Capital Fund 14.872 IAOSP02250103 885
Public Housing Capital Fund 14.872 IAOSP02250104 15,178
276,099
Department of Justice:
Bulletproof Vest Partnership Program 16.607 BUBX06131926 683
Edward Byrne Memorial Justice Assistance
Grant Program 16.738 2006-DJ-BX-0484 48,772
Department of Transportation:
Airport Improvement Program 20.106 3-19-0047-10 74,677
Airport Improvement Program 20.106 3-19-0047-11 2,430
Airport Improvement Program 20.106 3-19-0047-12 12,388
Airport Improvement Program 20.106 3-19-0047-13 801,933
Airport Improvement Program 20.106 3-19-0047-14 92,954
984,382
(continued)
125
CITY OF IOWA CITY, IOWA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (continued)
YEAR ENDED JUNE 30, 2007
Agency or
Pass-through Program
Grantor/Program CFDA Number Number Expenditures
Direct: (continued)
Department of Transportation: (continued)
Federal Transit -Formula Grants 20.507 IA-90-X265 $ 23,663
Federal Transit -Formula Grants 20.507 IA-90-X289 25,291
Federal Transit -Formula Grants 20.507 IA-90-X293 80,000
Federal Transit -Formula Grants 20.507 IA-90-X309 184,418
Federal Transit -Formula Grants 20.507 IA-90-X322 737,291
1.050,663
Department of Homeland Security:
Assistance to Firefighters Grant 97.044 EMW-2006-FG-07967 63,800
KDHAP Rental Assistance and
Administrative Expenditures 97.NA IA022KC9033 15,298
Total direct 10,917,063
Indirect:
Department of Justice:
Iowa Department of Justice: _ _
Violence Against Women Formula Grants 16.588 VW-07-36 46.000
Governor's. Office of Drug Control Policy:
Public Safety Partnership and Corrnnunity
Policing Grants 16.710 06JAG/HS-A34 62,831
Edward Byrne Memorial Justice Assistance
Grant Program 16.738 06JAG/HS-A34 31,450
Department of Transportation:
Iowa Department of Transportation:
Highway Planning and Construction 20.205 STP-1-5(69)- -2C-52 4,766
Highway Planning and Construction 20.205 STP-U-3715(625)- -70-52 4,679
Highway Planning and Construction 20.205 STP-A-3715(631)- -86-52 159,013
Highway Planning and Construction 20.205 BROS-3715(626)- -8J-52 243
168,701
Federal Transit -Capital Investment Grants 20.500 IA-03-0104-371-OS 1,049,269
Federal Transit -Capital Investment Grants 20.500 IA-04-0105-371-06 514,600
1,563,869
Formula Grants for Other Than Urbanized Areas 20.509 IA-18-702X-371-07 7,456
Capital Assistance Program for Elderly Persons
and Persons with Disabilities 20.513 IA-16-X001-371-07 66,757
New Freedom Program
20.521 IA-57-X001-371-06 35,126
(continued)
NA =Not Applicable
126
CITY OF IOWA CITY, IOWA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (continued)
YEAR ENDED JUNE 30, 2007
Agency or
Pass-through Program
Grantor/ProQram CFDA Number Number Expenditures
Indirect: (continued)
Department of Transportation: (continued)
Iowa Department of Transportation and
Johnson County Council of Governments:
State Planning and Research 20.515 07MP0-J000G $ 150,519
Iowa Department of Public Safety:
Governor's Traffic Safety Bureau:
State and Community Highway Safety 20.600
State and Community Highway Safety 20.600
Safety Incentives to Prevent Operation of
Motor Vehicles by Intoxicated Persons 20.605
Safety Incentives to Prevent Operation of
Motor Vehicles by Intoxicated Persons 20.605
Department of Homeland Security:
Iowa Department of Homeland Security:
Disaster Grants -Public Assistance
(Presidentially Declared Disasters) 97.036
Total indirect
Total
See notes to the Schedule of Expenditures of Federal Awards.
PAP 07-02, Task 13 15,970
PAP 06-02, Task 13 5,752
21,722
PAP 07-163, Task 37 8,156
PAP 06-163, Task 29 11,826
19,982
FEMA-1688DR-IA 83,419
2,257,832
$ 13,174,895
127
CITY OF IOWA CITY, IOWA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2007
NOTE 1. BASIS OF PRESENTATION
The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City
of Iowa City, Iowa, and is presented on the accrual basis of accounting. The information on this schedule is
presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments,
and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts
presented in, or used in the preparation of, the basic financial statements.
NOTE 2. SUBRECIPIENTS
Of the federal expenditures presented in the schedule, the City of Iowa City, Iowa, provided federal awards to
subrecipients as follows:
Federal Amount Provided
Program Title CFDA Number to Subrecipients
Community Development Block Grants/
Entitlement Grants
HOME Investment Partnerships Program
Edward Byrne Memorial Justice Assistance
Grant Program
14.218 $ 432,234
14.239 622,969
16.738 74,319
128
CITY OF IOWA CITY, IOWA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007
Part I: Summary of the Independent Auditor's Results:
(a) Unqualified opinions were issued on the financial statements.
(b) No material weaknesses in internal control over financial reporting were noted.
(c) The audit did not disclose any noncompliance which is material to the financial statements.
(d) No material weaknesses in internal control over the major programs were noted.
(e) An unqualified opinion was issued on compliance with requirements applicable to the major programs.
(f) The audit disclosed no audit findings which were required to be reported in accordance with Oftice of
Management and Budget Circular A-133, Section .510(a).
(g) The major programs were:
• CFDA 14.218 -Community Development Block Grants/Entitlement Grants
Cluster:
• CFDA 20.500 -Federal Transit -Capital Investment Grants
• CFDA 20.507 -Federal Transit -Formula Grants
(hJ The dollar threshold used to distinguish between Type A and Type B programs was $395,247.
(i) The City of Iowa City, Iowa, qualified as a low-risk auditee.
Part II: Other Findings Related to Required Statutory Reporting:
II-A-07 Certified Budget -Disbursements at June 30, 2007, did not exceed the amount budgeted.
II-B-07 puestionable Expenditures - We noted no expenditures that we believe may fail to meet the
requirements of public purpose as defined in an Attorney General's opinion dated Apri125, 1979.
II-C-07 Travel Expense - No expenditures of City money for travel expenses of spouses of City officials or
employees were noted.
II-D-07 Business Transactions -Business transactions between the City and City officials or employees are
detailed as follows:
Name, Title, and Transaction
Business Connection Description Amount
Dee Vanderhoef, City Council Member, Supplies
owner of Iowa Book and Supply
4,168
The above transaction does not appear to represent a conflict of interest since $3,842 of the total was
entered into through competitive bidding in accordance with Chapter 362.5(4) of the Code of Iowa
and the remainder is less than $1,500 in accordance with Chapter 362.5(10).
129
CITY OF IOWA CITY, IOWA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
Part II: Other Findings Related to Required Statutory Reporting: (continued)
II-E-07 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 the coverage is
adequate for current operations.
II-F-07 Council Minutes - No transactions were found that we believe should have been approved in the
Council minutes but were not.
II-G-07 Deposits and Investments - No instances of noncompliance with the deposit and investment
provisions of Chapters 12B and 12C of the Code of Iowa and the City's investment policy were
noted.
II-H-07 Revenue Bonds - We noted no instances of noncompliance with the provisions of the City's
revenue bond resolutions.
130
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DISCRETIONARY SPENDING/REVENUE
GENERAL FUND - $8.10 LEVY
DEER CONTROL $80,000/Yr
ECONOMIC DEVELOPMENT $250,000/ 2 Yrs
AID TO AGENCIES $324,000/Yr
EVENTS FUNDING $95,000/Yr
GENERAL FUND -OTHER
EMERGENCY LEVY
Additional 17-cents per $1000 taxable valuation $418,000/Yr
HOTEL/MOTEL TAX
Parks & Rec Facilities $200,000/Yr
Convention & Visitors Bureau $181,000/Yr
Police Patrol ($345,000 currently allocated to police)
New $$s if raised to 9% $200,000/Yr (est.)
PARKING FINES SUBSIDY
Add $1 to each parking fine and transfer to
general fund for public safety $180,000/Yr (est.)
GENERAL FUND -DEBT
PUBLIC ART $50,000/Yr
ROAD USE TAX FUND
TRAFFIC CALMING $30,000/Yr
LEAF PICKUP $50,000/Yr
EMPLOYEE BENEFITS
5% of RUT revenue is currently allocated to pay
a portion of the benefits for employees funded
with RUT revenue. All or a portion of the 5%
($269,000) could be levied under the employee
benefits levy, making additional funds available
for RUT funded operations $269,000 (maximum)
OTHER CONCEPTS FOR INCREASING REVENUE
Increase chargebacks to enterprise funds for administrative support from
operations funded from the General Fund. [May result in fee increases.]
Local Option Sales Tax
Special Assessments (Ex: Sidewalk Infill in C.I.P. is $100,000/year from G.O.
Debt.)
®v~~-jS eQ~s
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Ir~~~4\
CITY OF IOWA CITY
~aeamber 17, 2007 a I o ease waseinglon slrecl
Iowa cny, Iowa szzao-laze
1319) 3s6-5000
Honorable Mayor and City Council 13191 3 se-soo9 rnx
City of Iowa City www.lcgov.org
Wa have continued to experience growth in local property values and 2007 will ba another year
with over $100 million in new construction permit activity in Iowa City. This translates to a
moderate growth of our tax base and our ability to generate tax revenue. However, the off-
setting residential rollba cK and the impact of the earlier losses in State aid continua to have a
profound affect on our ability to provide public services within our General Fund. The ability 20
expand and sustain any of these General Fund financed services is severely limited.
apartment ~iractors have proposed expanded service levels in selected areas as wall as the
addition of staff aimed at reestablishing the previous loss of parson nel fhat followed the States
financial aid reduction in Fiscal Yaar 04. Further, Council has directed that the highest priority
be placed on adding new police off cans and fire fig Mans over the next [brae years.
Tha proposed budg at for FY09 includes the addition of three fire fighters and two police officers
funded from general tax raven ue. The three-year financial plan projects similar additions in
FY10 and FY11. However, given current projections, there will not be sufficient revenue to
sustain the addition of these positions on a permanent basis unless additional sources of
revenue are idantTed. This budge[ and the three-year plan, as submitted, would result in a
reduction of the Ganerai Fund balan ca to a level significantly below that which Council has
traditionally reg ardad as fiscally prudent. This represents a major issue that Council will Head to
reconcile in finalizing the budget and three year financial plan.
Tha Capital Improvements Program continues to reflect projects that address economic growth
and viability through anhancemants to transportation systems, public safety, local utilities and
citizen services. and quality of life issues. While this program, as presented, is consistent with
prior years in terms the scope of projects and the amount [o ba financed through debt, it will
n onatheless result in the debt levy exceeding Council's policy that no more than 25 % of the total
tax levy be used to retire debt. As we have become increasingly constrained in our ability to
raise general tax revenue due to State imposed limitations and the ra sidantial rollbacK, wa have
increased our use of debt to fund capital purchases th ai ware pravlously funded with current
cash. Thus, while the general tax levy has bean decreasing, the amount levied to retire debt has
increased. Council's budget discussions will include an examination of this policy in light of
current fiscal projections and limitations on our ability to raise 9a neral tax raven ue.
Sincerely. O
~~ 9~ _
Interim City Manager
_ l
^ Parking, Refuse, Wastewater Treatment, Stormwater, Landfill, Broadband
Telecommunications and Water funds will be self-supporting through user fees.
- Rate adjustments will be submitted to the City Council by ordinance if state or locally
legislated, or by resolution (ff not state or locally legislated).
^ The City will use up to 5°~ of the annual Road Use Tax allocation to fund employee benefits
for the Sin3ets and Traffic Engineering personnel.
CAPITAL IMPROVEMENT PROGRAM BUDGET POLICIES
^ The City will develop a multi-year Capital Improvement Program (CIP), which will be
reviewed and updated annually, comply with Clty Council goals and be compatible with the
Comprehensive Plan whenever possible.
^ The complete multi-year CIP funding plan must be balanced each year by matching
projected expenditures with proposed revenue sources by fund.
^ Funding for projects should be obtained through borrowing from:
- bond market, general obligation or revenue bonds
-enterprise fund operations and reserves
- internal loans
^ The City may utilize General Fund cash balances to fund capital projects whenever
available and feasible.
^ The City shall utilize available funding sources for capital improvements whenever practical
and feasible such as but not limited to:
- federal and state grant funds
-special assessments
-developer contributions
^ The City will maintain its physical assets at a level adequate to protect the City's capital
investment and to minimize future maintenance and replacement costs. The budget will
provide for the adequate maintenance and the orderly replacement of the capital plant and
equipment from current revenues when possible.
RESERVE POLICIES
^ The City will establish a contingency line-item in the annual General Fund operating budget
to provide for unanticipated expenditures or to meet unexpected small increases in service
delivery costs, budgeted at'/. of one percent of expenditures and transfers out.
^ Operating cash balances at fiscal year-end will be maintained at a level to ensure sufficient
cash flow throughout the fiscal year. General Fund cash balances will not go below 15%~
with an optimum level of 30%.
^ Reserves will be maintained in the Water, Wastewater and Parking Funds in accordance
with existing bond ordinance provisions.
-7-
2
^ Reserves will be maintained for equipment replacement and for unexpected major repairs in
the following areas: Parking, Wastewater, Water, Landfill, Transit, Broadband
Telecommunication, Equipment Replacement, Information Technology Services, and
Central Services as well as Library Computer Equipment and Parkland Acquisition and
Replacement.
^ Reserves, based on actuaries, will be maintained for the Risk Management Loss Reserve,
Medical and Dental Insurance Funds.
^ All City trucks, cars and necessary accessories will be maintained on a replacement cost
basis each year. A separate reserve fund has been set up to fund these replacements.
Additions to the fleet are made through alloptions in the annual budget. Fire Department
vehicles and Transit buses will be purohased through the issuance of debt.
^ All general obligation debt will be paid from the Debt Service Fund. General Obligation debt
applicable to Enterprise Fund projects will be paid out of the Debt Service Fund, but will be
abated from revenues from the respective Enterprise Fund(s).
INVESTMENT POLICIES
^ Disbursement, collection, and deposit of all funds will be managed to insure maximum
investment opportunity for City funds.
^ The City will strive to maximize the return on its investment portfolio, with the primary
objective of preserving capital in accordance with the City's investment policy and prudent
investment practices.
^ All City funds not restricted by bond issue covenants will be pooled for investments, with
interest allocations made monthly.
DEBT POLICIES
^ The City will confine bng-term borrowing to capital improvements and Community and
Economic Development initiatives. Short term borrowing will be applicable for large dollar
rolling stock (buses, fire apparatus) purchases and computer systems.
(1 Total general obligation debt will not exceed 5% of total taxable assessed value of real
property.
^ The debt service property tax levy shall not exceed 25% of the total property tax levy.
^ The City will follow a policy of full disclosure on every financial report and bond prospectus.
^ The City will use "pay as you go" financing to fund general capital improvement projects,
whenever feasible and practical.
-8-
3
Assumptions within FY09-11
Proposed Financial Plan
Health Insurance: Approximately S% annual increase
Police & Fire Pension Rates Decline in FY09: Unchanged
in FY10 & FY11
New Firefighters and Police Officers will offset somewhat
IPERS Contributions Increase: Employer rate up .3% per year
through FY11
Joint Emergency Communications Center:
~ Operations Begin July 1, 2009
y No ICPD Emergency Communications Staff budgeted after FY09
Budget is understated for FY10 if July 1, 2009 schedule not met
Federal and State Funding: Nothing new for General Fund
supported activities
~ Residential Rollback: Will continue to decline
Property Valuations: Growth at 3% annual average
4
Assumptions within FY09-11
Proposed Financial Plan-
Continued
Road Use Tax Revenue: Increase in FY09; slight decrease in
FY10 & 11
Emergency Levy: Maintained at $0.10 levy through FY11
Fuel Costs: Will continue to increase
Tax Base Erosion:
v No significant increase in commercial rollback
v Apartments /Mobile Homes continue to be taxed as commercial
property
Fiscal Impact Note:
~ FY12 will have 27 paycheck issuance days. We pay every two
weeks or 26 times every 364 days.
y The extra days (one each year, two in leap years) accumulate in
such a way that the progression of paydays eventually means 27
paydays will occur approximately once in every 12 years. This
occurs in FY12.
v The extra cost is projected to be $1.05 million in salaries /wages
(from the general fund balance) and $200,000 in benefits (from
the employee benefits levy).
s
Police & Fire Pension
(MFPRSI) -Contribution Rates
Employee Employer Combined Employer
Rate Rate Rate Expense
FY00 9.35% 17.00% 26.35% $ 964,095
FY01 9.35% 17.00% 26.35% $ 972,042
FY02 9.35% 17.00% 26.35% $ 1,022,400
FY03 9.35% 17.00% 26.35% $ 1,059,538
FY04 9.35% 20.48% 29.83% $ 1,316,072
FY05 9.35% 24.92% 34.27% $ 1,703,621
FY06 9.35% 28.21 % 37.56% $ 1,925,331
FY07 9.35% 27.75% 37.10% $ 1,952,337
FY08 9.35% 25.48% 34.83% * $ 1,915,587
FY09 9.35% 18.75% 28.10% * $ 1,497,112
* Estimated
IPERS Contribution Rate
Projections
Employee Employer Combined Employer
Rate Rate Rate expense
FY07 3.70% 5.75% 9.45% $ 868,937
FY08 3.90% 6.05% 9.95% * $ 1,011,131
FY09 4.10% 6.35% 10.45% * $ 1,158,647
FY10 4.30% 6.65% 10.95% * $ 1,216,970
FY11 4.50% 6.95% 11.45% * $ 1,304,933
*Estimated
Rollback-Recent History
FY99 0.549090
FY00 0.564789 up 2.85%
FY01 0.548525 down 2.96%
FY02 0.562651 up 2.57%
FY03 0.516676 down 8.89%
FY04 0.513874 down .5%
FY05 0.484558 down 6.05%
FY06 0.479642 down 1.03%
FY07 0.459960 down 4.28
FY08 0.455596 down .09%
FY09 0.440803 down 3.25%
average decline 2.9%
s
Residential Property &
Rollback History
Fiscal
Year
Payable
100%
Assessed
Valuation ercent
Change
from Prior
Years
Valuations
State of
Iowa
Rollback
Taxable
Assessed
Valuation ercent
Change
from Prior
Years
Valuations
1990 759,325,530 1.72% 80.6384% 612,307,958 1.8%
1991 809,684,130 6.63% 79.8471 % 646,509,187 5.6%
1992 832,042,231 2.76% 79.4636% 661,170,710 2.3%
1993 925,388,170 11.22% 73.0608% 676,096,043 2.3%
1994 949,139,460 2.57% 72.6985% 690,010,202 2.1
1995 1,089,889,230 14.83% 68.0404% 741,564,958 7.5%
1996 1,136,350,300 4.26% 67.5074% 767,120,599 3.4%
1997 1,343,692,710 18.25% 59.3180% 797,051,680 3.9%
1998 1,381,920,090 2.84% 58.8284% 812,961,592 2.0%
1999 1,500,669,280 8.59% 54.9090% 824,002,432 1.4%
2000 1,542,400,050 2.78% 56.4789% 871,130,656 5.7%
2001 1,668,069,820 8.15% 54.8525% 914,978,054 5.0%
2002 1,719,115,220 3.06% 56.2651 % 967,261,848 5.7%
2003 1,932,822,466 12.43% 51.6676% 998,643,120 3.2%
2004 1,985,685,748 2.74% 51.3874% 1,020,392,299 2.2%
2005 2,154,800,557 8.52% 48.4558% 1,044,125,682 2.3%
2006 2,236,610,259 3.80% 47.9624% 1,072,773,878 2.7%
2007 2,644,769,911 18.25% 45.9960% 1,216,097,484 13.4%
2008 2,733,046,488 3.34% 45.5596% 1,245,164,986 2.4%
2009 3,010,941,771 10.17% 44.0803% 1,327,232,167 6.6%
Road Use Tax - I
Projections
Current IDOT per
Fiscal Year capita forecast
2011
2010
2009
$85.00
$85.10
$85.20
2008
2007
$84.30
Source:lowa League of Cities
December 2007
DOT
November 2006
IDOT per capita
forecast
$85.60
$85.50
$85.40
$84.40
$82.20
10
Road Ll s e '-I"ax Receipts
Rate per % change in % change
capita rate Receipts in revenue
FY00 $73.1 5 $ 4, 878, 961
FYO'1 $79.12 8.2% $ 4,866,043 -0.3%
FY02 $82.58 4.4% $ 5, 01 8, 575 3. 1
FY03 $76.78 -7.0% $ 5, 144, 346 2. 5%
FY04 $80.50 4.8% $ 5, 278, 324 2.6%
FYOS $83.50 3.7% $ 5, 271 , 744 -O. 1
FY06 $85.50 2.4% $ 5, 307, 149 0.7%
FY07 $83.80 -2.0% $ 5, 284, 538 -0.4%
" FY08 $84.30 0.6% $ 5, 341 , 085 1 . 1
" FY09 $85.20 1 . 1 % $ 5, 391 , 71 2 0.9%
" FY1 O $85. 1 O -O. 1 % $ 5, 385, 383 -O. 1
" FY'1 1 $85.00 -O. 1 % $ 5, 379, 055 -O. 1
" Estimate per I~OT
tt
I Equipment Fuel Costs
Average Rack Price
for Gasohol and Diesel
FY2001- 2008
$3.00
$2.50
N $2.00
N
A
o $1.50
0
~ $1.00
$0.50
$0.00
Fiscal Year (FY)
'Average bas ed on six months' data,
Fiscal Price er Gallon
Year Gasohol Diesel
2000" 0.9796 0.8818
2001 1.0282 0.9481
2002 0.8107 0.7704
2003 0.9611 0.8870
2004 1.1383 0.9796
2005 1.4157 1.4577
2006 1.9587 2.0304
2007 2.0268 2.1161
2008* 2.3411 2.5392
-FY09 Projected 15% above FY07
-FY10 & 11 Projected 7% annual
increase
12
boo'. ~o~ti ~oo'~ ~ooa ~o~h ~~p`o ~op1 QQ0
ti
CITY OF IOWA CITY, IOWA
ADDITIONAL POSITIONS
APPROVED FOR 2009
Department Position
Maas Transit Oper MASS TRANSIT OPERATOR
Patrol COMMUNITY SERVICE OFFICER
Patrol POLICE OFFICER
Fire Emergency Oper FIREFIGHTER
Building Inspection HOUSING INSPECTOR ASST
Housing Inspections HOUSING INSPECTOR ASST
TOTAL GENERAL 1~Of1iD
Solid Waste Recycle LANDFILL OPERATOR
TOTAL ENTERPRISE 1QND8
Streets Repair Progr M.W. II - STREETS
TOTAL OTEEA lONDS
2009 TOTAL - ADDITIONAL P08ITIONB RECON~IDED
* FTE gull Time Equivalent
Salary /
FTS• Wages Benefits
3.50 121,684 63,564
5.00 40,190 22,765
2.00 78,762 42,448
3.00 127,539 70,605
.30 13,606 6,228
-.13 -5,896 -2,725
13.67 375,885 202,905
1.00 38,247 18,685
1.00 38,247 18,685
2.00 74,462 37,064
2.00 74,462 37,064
Total
185,248
62,975
121,210
198,144
19,834
-8,621
578,790
56, 932
56,932
111,526
111,526
16.67 488,594 258,654 747,248
CITY OF IOWA CITY, IOWA
ADDITIONAL POSITIONS
APPROVED FOR 2010
Salary /
Department Position FTE• Wages Benefits Total
Patrol COMMUNITY SERVICE OFFICER 5.00 180,095 95,885 275,980
Patrol POLICE OPFICSR 2.00 78,532 43,742 122,274
Emergency Comm EMERGENCY COMM DISPATCHER -10.25 -481,911 -166,918 -648,829
8mergency Comm EMERGENCY COMMUNICATIONS SUPER -1.00 -63,799 -16,229 -80,028
Fire Emergency Opcr FIREFIGHTER 3.00 131,364 73,401 204,765
emu, GAL !O1® -1.25 -155,719 29,681 -125,838
2010 TOTAL - ADDITIONAL P08ITIONB RECODS~iDED -1.25 -155,719 29,881 -125,838
* FTE Full Time Equivalent
CITY OF IOWA CITY, IOWA
ADDITIONAL POSITIONS
APPROVED FOR 2011
Department
Position
FireyBmergency Oper FIRE LIEUTENANT
TOTAL G~iERAI. lOND
2011 TOTAL - ADDITIONAL POSITIONS RECOI~IDED
• FTS = Full Time Equivalent
-39-
salary /
FTS* Wages Benefits Total
3.00 120,311 68,237 188,548
3.00 172,455 87,747 260,202
6.00 292,766 155,984 448,750
6.00 292,766 155,984 448,750
13
expanded Service Level
I~ersonriel ~ Equipment
Name ESL Description FY09 AMT FY'10 AMT FY'1 '1 AMT
City Clerk Temporary Employee 5,'130 5,'144 5,'157
City Clerk Total 5.'130 5,'144 5,'157
Transit Expanded Routes 3.5 FTE
Mass Transit Operations Personnel '190,250 200,663 211,492
Mass Transit Operations Total '190 250 200,663 211,492
Transit Expanded Routes -Bus Fuel
Transit Fleet Maintenance 8. Maintenance 98,000 98,000 98,000
Transit Fleet Maintenance Total 98,000 98,000 98,000
Patrol 5 CSO's Starting Last Qtr FV09 69,8'15 275,979 293,353
Patrol 2 Police Officers FY09 '13'1.060 '146,528 '157,249
2 Police Officers FY10, 2 More in
Patrol FY11 '19,700 '122,274 27'1,269
Patrol 7th Police Officer in FY11 - - 64,868
Patrol Total 220,575 544,78'1 786,739
Elim Dispatch Personnel from City
Budget -11 .25 FTE, will be in Joint
Emergency Communications Communications Entity - (728,855) (747,157)
Emergency Communications Total - (728,855) (747,157)
Fire Emergency Operations Station 4 - (3) Firefighters 207,444 215,822 229,241
Fire Emergency Operations Station 4 - (3) Firefighters - 204,764 223,012
Fire Emergency Operations Station 4 - (3) Lieutenants - - 260,201
Fire Emergency Operations Total 207,444 420,586 712,454
Building Inspection .25 Inspector Asst 19,836 20,301 20,800
Building Inspection Inspector Truck 21,030 - -
Building Inspection Total 40,866 20,301 20.800
Housing Inspections -.13 Housing Inspector (8.621) (8,823) (9,040)
Housing Inspections Total (8,621) (8,823) (9,040)
Senior Center Operations Program Asst 5,695 5,349 5.363
Senior Center Operations Program Asst 5,695 5,349 5,363
Senior Center Operations Total 11,390 10,698 10,726
Streets Repair Programs (2) MW II 111 526 121,060 127,490
Streets Repair Programs Total 111,526 121,060 127,490
Solid Waste Recycling Operation Landfill Operator 56 932 61,670 64.956_
Solid Waste Recycling Operation Total 56,932 61,670 64,956
File Servers 8. System Support Disaster Recovery Equipment 55,000 5,000 -
File Servers 8. System Support Total 55,000 5,000 -
" Included In FY09 Proposed " 988,492 750,225 1,281,617
74
FINANCIAL PLAN ANALYSIS
GOVERNMENTAL ACTIVITIES
I
` Governmental Activities consist of the General Fund, Debt Service Fund, the Trust and Agency Funds,
Special Revenue Funds and Internal Service Funds.
A. PROPERTY TAX
Property tax is the single largest revenue source for the City of Iowa City General Fund, accounting
for almost 69% of FY2009 General Fund revenues. Taxable property in Iowa is categorized into
distinct classes, namely residential, commercial, industrial, utilities, or agricultural with each class
having different procedures for assessing value for taxing purposes. To reduce the opportunity for
dramatic tax shifts between the classes from year to year, a statutory limit of 4% a year has been
imposed, commonly called the growth limitation. For example, if statewide growth in any one class
of property in any year exceeds 4%, the taxable value is reduced by a percentage so that growth of
taxable valuation is at the 4% ceiling. This percentage is called the "rollback". Furthermore,
residential property is subject to an additional restriction in which the statewide growth in residential
property cannot exceed the growth in agricultural property. In other words, the taxable growth of
urban residential property is either 4% or equal to the growth in agricultural property, whichever is
lower.
The following graph illustrates the impact of the rollback on taxable valuation. In FY2000 the
residential rollback exempted $.7 billion of Iowa City's residential assessed valuation. In FY2009
the residential rollback will exempt $1.8 billion of the residential assessed valuation. The rollback
for FY2009 is 44.0803% compared to FY2008 residential rollback of 45.5596%.
Taxable vs. 100°/a Assessed Valuations
4.60
4.10
~ 3.60
N
C
0
3.10
c
. 2.60
~
2.10 -
--
~ Taxable
j 1.60 Arse sse d
Valuation
1.10
f 100%
- _ Assessed
0.60 -- -
Valuation
0.10
~~ pOrO
~~~
~~
~~h
~~~
~~^
~~~ ~~
~~$
'L ry
ti
ti
ti
ti
ti
ti ti
ti
Fiscal Year (FY)
Iowa City's assessed valuation has steadily increased due to new construction and revaluation. However,
assessed residential valuation reduced by the rollback factor has been increasing at a greater percentage.
This trend can impair the ability of local governments to provide necessary services.
15
~.~
Residential Property Growth
Total % change
Residential from prior
Fiscal Year Revaluation New Construction Valuation year
2000 8,250,627 29,322,360 1,542,647,920 2.79%
2001 89,327,308 34,563,180 1,668,300,540 8.15%
2002 7,401,184 45,031,450 1,719,544,600 3.07%
2003 179,797,776 34,002,340 1,932,715,150 12.40%
2004 7,795,321 39,217,590 1,986,809,060 2.80%
2005 117,939,844 49,152,027 2,156,326,000 8.53%
2006 (455,265) 79,346,724 2,237,603,740 3.77%
2007 359,306,980 39,031,842 2,644,533,750 18.19%
2008 25,266,295 68,730,102 2,737,907,360 3.53%
2009 205,684,115 61,572,790 3,011,319,563 9.99%
Source: City Assessors Abstract Reconciliation reports
Residential Growth
400,000,000
350,000,000
N 300,000,000
cv
250,000,000
~ 200,000,000
0
150,000,000
~ 100,000,000
50,000,000
0
~o ~~ ~~ ~~ ~~ ~~ ~~
ti~ ~~ ti~ ti~ ti~ ~~ ti~
Fiscal Year
16
0~~~ ~~~~ ti~~~
Commercial Property
Growth
"/° change
Total Commercial from prior
Fiscal Year Revaluation New Construction Valuation year
2000 949,271 17,618,305 723,017,343 1.95%
2001 60,671,937 9,542,280 788,437,890 9.05%
2002 43,031,397 8,753,580 838,701,140 6.38%
2003 2,224,017 29,328,870 866,583,720 3.32%
2004 (6,216,982) 21,094,490 871,328,950 0.55%
2005 39,412,349 31,394,840 937,455,670 7.59%
2006 (3,201,390) 30,866,457 960,088,790 2.41%
2007 95,303,570 11,512,050 1,056,931,990 10.09%
2008 6,965,285 23,681,960 1,083,407,140 2.50%
2009 55,193,300 11,501,990 1,131,561,840 4.44%
Source: City Assessor's Abstract Reconciliation reports
100,000,000
80,000,000
m
~ 60,000,000
m
c
~ 40,000,000
0
:.
R
3
Ta 20,000,000
0
(20,000,000)
~~OO ~~0~
Commercial Growth
~~' ~~ ~D` ~~ ~~ ~~ ~~ ~~
ti~ ~~ ~~ ~~ ~~ ~~ ~~ ~~
Fiscal Year
17
The City's property tax requests for FY2009 through FY2011 including the FY2008
certified tax request, are as follows:
FY2008 Certified FY2009 B udget
LEVIES Tax Rate Tax R ate
Dollars per $1,000 Dollars per $1,000
General Fund
Tax Levies:
General
$ 18,885,713
8.100
$ 19,926,296
8.100
Transit
Tort Liability
Library 2,214,991
961,808
629,524 0.950
0.413
0.270 2,337,035
1 ,027,025
664,210 0.950
0.417
0.270
Subtotal: 22,692,036 9.733 23,954,566 9.737
Special Revenue Levies:
Emergency
Employee Benefits
-
8,809,494
0.000
3.778
246,004
8,896,271
0.100
3.616
Subtotal: 8,809,494 3.778 9,142,275 3.716
Debt Service 9,185,859 3.786 11 ,244,576 4.385
Total City Levy Property
Taxes: $ 40,687,389 17.297 $ 44,341,417 17.839
Change from 7.19% -2.41% 8.98% 3.13%
rior ear:
Agland Levy $ 4,607 3.004 $ 4,235 3.004
Total Property Taxes $ 40,691,996 ---- $ 44,345,652 ----
FY2010 Pro'ected FY2011 Pro'ected
LEVIES Tax Rate Tax Rate
Dollars per $1,000 Dollars per $1,000
General Fund
Tax Levies:
General $ 20,507,180 8.100 $ 21,104,645 8.100
Transit 2,405,163 0.950 2,475,236 0.950
Tort Liability 1 ,052,060 0.416 1 ,078,338 0.414
Library 683,573 0.270 703,488 0.270
Subtotal: 24,647,976 9.736 25,361,707 9.734
Special Revenue Levies:
Emergency 253, 175 0 .100 260, 551 0 .100
Employee Benefits 9,310,081 3.677 9,892,827 3.797
Subtotal: 9,563,256 3.778 10,153,378 3.897
Debt Service 12,367,293 4.682 13,545,817 4.979
Total City Levy Property
Taxes: $ 46,578,525 18.196 $ 49,060,902 18.610
Change from 5.05% 2.00% 5.33% 2.28%
rior ear:
Agland Levy $ 4,235 3.004 $ 4,235 3.004
Total Property Taxes $ 46,582,760 ---- $ 49,065,137 ----
18
Property Tax Levies
The FY2009 proposed property tax rate increases 3.13% from $17.297 per $1,000 of taxable assessed
valuation in FY2008, to $17.839 in FY2009.
Estimated Property Tax Levy on $100,000 Residential Valuation
(Iowa City portion)
FY08 ~~ ~~ $786.35 ~~ ~~ $845 32
$809.09
* Revaluation
FY08 FY09 FY09*
Assessed Valuation $ 100,000 $ 100,000 $ 107,500
Taxable Valuation $ 45,559 $ 44,080 $ 47,386
City Levy $ 17.297 $ 17.839 $ 17.839
* Reflects average revaluation of 1/1/07 Residential Assessments
The general property tax levy of $8.10 is used to support General Fund services such as those provided by
the Police and Fire Departments, Library, Senior Center, Parks and Recreation. This levy cannot exceed
$8.10 per $1000 of taxable assessed valuation per State law.
The Library tax levy of $.27 was voted in by a majority of the residents in 1991. The initial levy was used to
expand Library services and continues to maintain that level of service.
The Transit levy of $.95 is a "general" levy for transit operations which cannot exceed $.95 per $1,000 of
taxable assessed valuation.
The Tort Liability levy has no maximum and is based on estimated insurance premiums and claim losses
within the self-insured retention. The levy rate for FY2009 is estimated at $0.417, compared to $0.413 for
FY2008. The City's self-insured retention amount is $400,000 per occurrence for worker's compensation,
$500,000 for liability claims and $100,000 for city property claims.
The Emergency levy is proposed at $0.10 for FY2009. The general levy must be at $8.10 before this levy
can be used. The levy cannot exceed $0.27.
19
City of Iowa City
Ten Year History
Certified Tax Levy Rates
General Fund Tax Levies
General
Transit
Tort Liability
Library
subtota/
Special Revenue Levies
Emergency
Employee Benefits
FY00 FY01 FY02 FY03 FY04
8.100 8.100 8.100 8.100 8.100
0.950 0.950 0.950 0.950 0.950
0.222 0.222 0.215 0.216 0.244
0.270 0.270 0.270 0.270 0.270
9.542 9.542 9.535 9.536 9.564
0.000 0.270 0.270 0.270 0.270
2.009 1.955 2.113 2.847 3.192
subtota/ 2.009 2.225 2.383 3.117 3.462
Debt Service Levy 2.300 2.990 2.945 4.161 4.570
Total City Levy 13.851 14.757 14.863 16.814 17.596
General Fund Tax Levies
General
Transit
Tort Liability
Library
subtotal
Special Revenue Levies
Emergency
Employee Benefits
subtotal
Debt Service Levy
FY05 FY06 FY07 FY08 FY09*
8.100 8.100 8.100 8.100 8.100
0.950 0.950 0.950 0.950 0.950
0.347 0.309 0.366 0.413 0.417
0.270 0.270 0.270 0.270 0.270
9.667 9.629 9.686 9.733 9.737
0.270 0.270 0.038 0.000 0.100
3.423 3.681 3.696 3.778 3.616
3.693 3.951 3.734 3.778 3.716
3.954 4.149 3.876 3.786 4.385
Total City Levy 17.314 17.729 17.296 17.297 17.838
*Proposed
20
General Fund Revenue
B. GENERAL FUND REVENUE
FY2009 revenues total $46.5 million which is a small decrease over the FY2008 budget of $46.7 million.
Revenue is projected to increase 1.9% in FY2010 ($47.5 million), and 3.8% in FY2011 ($49.3 million).
FY07 actual includes $4.07 million for Streets and Traffic operations which is now directly reflected in the
Road Use Tax Fund.
FY07 FY08 FY09 FY10 FY11
Act~.~al Amended Budget Estimated Estimated
1. PropertyTa~s 29,631,066 30,477,673 32,034,294 33,115,422 34,388,892
2. Other City Taxes 1,141,470 1,116,846 1,184y880 1,205,553 1,226,639
3. Lic~ses & Permits 1,399,747 1,260,526 1,308,040 1,308,040 1,308,040
4. Other Finandng Sources 5,354,791 2,870,596 762,595 767,281 748,302
5. Use Of M~r~ey& R-operty 1,629,374 1,719,811 1,418,544 1,331,872 1,230,464
6. Intergaverr~rr~ental 3,444,962 3,174,015 3,727,314 3,614,026 4,228,564
~. Charges ForSenrices 4,292,323 4,254,204 4,437,132 4,437,132 4,437,132
s. Miscellaneous 1,834,034 1,801,721 1,685,686 1,685,686 1,685,686
Total Revenue: $48,727,767 $46,675,392 $46y558,485 $47,465,012 $49,253,719
%c~rangefrt~mprioryear 7.82% -4.2% -0.3% 1.9% 3.8%
21
FY 2009 Budget
General Fund Revenue
X46,558,485
other City Taxes
3
22
General Fund
Intergovernmental Revenues
FY07 FY08 FY09 FY10 FY11
Intergovernmental Funding Actual Budget Budget ~ Estimated Estimated
Local Governmental: 28E Agreements*
Coralville, Johnson County & Other
Governments -Animal Services 118,885 50,000 131,000 136,250 141,868
IC Comm. Schools -Mercer Pool 104,015 85,964 86,766 88,000 88,000
County, Univ Heights, Hills -Library 339,387 322,136 322,136 322,136 322,136
Johnson County -Senior Center 75,000 75,000 75,000 75,000 75,000
University of Iowa -Fire Protection 1,167,124 1,207,614 1,442,700 1,485,923 1,530,443
University Heights -Transit Services 29,723 30,850 29,804 29,804 29,804
University Heights -Emergency Radio 21,138 42,275 42,275 - -
Local Governmental Revenue: 1,855,272 1,813,839 2,129,681 2,137,113 2,187,251
State-distributed Revenue:
Monies & Credits 28,902 13,000 13,000 13,000 13,000
Transit Assistance 439,355 398,954 544,490 544,490 544,490
Public Safety Grants 176,117 98,502 46,417 46,417 46,417
Total State Revenue: 644,374 510,456 603,907 603,907 603,907
Federal Revenue:
Transit FTA Operating Grants 816,248 785,000 873,006 873,006 873,006
Transit Federal Capital Outlay Grants
(2 buses in FY11) 39,906 64,000 120,000 - 564,400
Public Safety Grants 88,502 - - - -
Total Federal Revenue: 944,656 849,000 993,006 873,006 1,437,406
Misc. Other Intergovernmental Revenue 660 720 720 - -
Total - Intergovernmental Funding: 3,444,962 3,174,015 3,727,314 3,614,026 4,228,564
23
CITY OF IOWA CITY, IOWA
FINANCIAL PLAN FOR 2009 - 2011
Fund: 1000 General 2007 * 2007 2008 2009 2010 2011
Actual Restated Estimate Buduet Proiection Proiection
Beginning Balance $19,889,562 $19,889,562 $ 21,312,890 $17,288,297 $16,670,237 $15,945,796
Current Taxes 21,634,046 21,634,046 22,292,342 23,542,137 24,229,399 24,936,859
Delq Prop Taxes 7,283 7,283 - - - -
Other City Taxes 1,141,470 1,141, 470 1,116,846 1,184,880 1,205,553 1,226,639
General Use Permits 42,622 42,622 42,629 42,622 42,622 42,622
Food & Liquor Licenses 89,204 89,204 97,680 89,059 89,059 89,059
Professional Licenses 65,025 65,025 50,330 34,460 34,460 34,460
Misc Permits 8 Licences 2,010 2,010 2,675 2,010 2,010 2,010
Construction Permit & Inspect Fees 1,171,386 1,171,386 1,036,762 1,104,949 1,104,949 1,104,949
Misc. Lic. & Permits 30,071 30,071 31,325 35,415 35,415 35,415
Fed. Intergov. Rev. 944,656 944,656 849,000 993,006 873,006 1,437,406
Property Tax Credits 39,754 39,754 24,739 24,739 24,739 24,739
State 28e Agreements 1,165,204 1,165,204 1,206,986 1,440,780 1,484,003 1,528,523
Other State Grants 615,472 615,472 497,456 590,907 590,907 590,907
Local Govt 28e Agreements 688,808 688,808 606,945 687,701 651,190 656,808
Bldg 8 Development 351,147 326,717 334,093 312,354 312,354 312,354
Police Services 89,988 89,988 61,110 71,065 71,065 71,065
Animal Care Servs 10,260 10,260 8,000 10,260 10,260 10,260
Fire Services 13,942 13,942 11,528 19,085 19,085 19,085
Transit Fees 904,801 904,801 855,379 904,802 904,802 904,802
Culture And Recreation 641,713 641,713 652,940 781,256 781,256 781,256
Misc. Chg. For Ser. 60,115 60,115 64,683 35,337 35,337 35,337
Code Enforcement Fines 361,586 361,586 452,392 362,511 362,511 362,511
Parking Fines 549,502 549,502 550,000 549,502 549,502 549,502
Library Fines ~ Fees 193,449 193,449 203,926 193,449 193,449 193,449
Contributions & Donations 159,056 159,056 235,384 234,528 234,528 234,528
Animal Adoption 11,740 11,740 15,000 11,740 11,740 11,740
Misc Merchandise 27,227 24,137 24,998 23,564 23,564 23,564
I ntra-city Charges 1,605,711 1, 605, 586 1,643,531 1,606,163 1,606,163 1,606,163
Other Misc Revenue 420,651 385,235 226,016 200,100 200,100 200,100
Interest Revenues 1,611,026 1,611,026 1,700,000 1,400,719 1,314,047 1,212,639
Rents 333,209 332,409 352,393 413,868 413,868 413,868
Transit-Court St Ramp Revenue 369,396 369,396 345,000 369,396 369,396 369,396
Royalties & Commissions 30,284 30,284 27,377 31,369 31,369 31,369
Sale Of Assets 505,552 505,552 101,330 109,808 109,808 109,808
Empl Benefits Levy 7,899,784 7,618,067 8,185,331 8,246,153 8,632,848 9,191,482
Emergency Levy 89,953 89,953 - 246,004 253,175 260,551
Road Use Tax 3,783,145 55,880 58,304 59,986 61,435 62,993
Misc Other Operating Transfers 466,272 466,272 1,001,339 171,850 196,945 171,748
From Water Operations - - 14,699 16,718 17,875 19,086
From Wastewater Operations - - 14,699 16,718 17,875 19,086
From Parking Operations 200,000 200,000 200,000 200,000 200,000 200,000
From Airport Operations - - 7,350 8,359 8,938 9,543
From Broadband 152,821 152,821 152,821 152,821 154,405 156,038
Transfers From GO Bonds - - 320,000 - - -
Interfund Loans 248,426 248,426 1,000,054 26,335 - -
Total Receipts $ 48,727,767 $ 44,654,924 $ 46,675,392 $ 46,558,485 $ 47,465,012 $ 49,253,719
Personnel 32,025,733 29,916,905 31,568,518 33,188,605 34,121,389 35,724,809
Services 9,389,741 8,081,290 8,844,508 8,802,594 8,948,119 9,108,244
Supplies 2,217,231 1,763,393 1,939,291 2,172,454 2,241,904 2,354,250
Capital Outlay 1,843,840 1,642,114 2,015,315 1,831,587 1,448,166 1,720,127
Transfers Out 1,827,894 1,827,894 6,046,169 829,305 1,070,875 708,942
Contingency - - 286,184 352,000 359,000 370,000
Total Expenditures $ 47,304,439 $ 43,231,596 $ 50,699,985 $ 47,176,545 $ 48,189,453 $ 49,986,372
Ending Balance 21,312,890 21,312,890 17,288,297 16,670,237 15,945,796 15,213,143
Reserved /Designated 2,147,084 2,147,084 2,677,068 2,752,774 2,846,806 3,048,958
Unreserved Balance $19,165,806 $19,165,806 $14,611,229 $13,917,463 $13,098,990 $12,164,185
of Expenditures 40.5% 44.3% 28.8% 29.5% 27.2% 24.3%
* Restated FY 2007 Excluding Streets and Traffic Operations which moved to RUT in FY 2008
24
____ ___
C_ GENERAL FUND - EXPEN~ITU RES
The General Fund expenditure budget in FY2009 is $47,176,545 compared to the amended FY2008 budget
of $50,699,985. Personnel includes City Council's request to include staffing for Fire Station 4: 3
Firefighters in FY09, 3 Firefighters in FY10 and 3 Fire Lieutenants in FY11. Also included is City Council's
request to include 7 additional Police Officers: 2 in FY09, 2 in FY10 and 3 in FY11. Assumptions within this
Financial Plan are that the Joint Emergency Communication Center will open in FY10 and that the City
Emergency Communications Officers and Supervisor are not included in FY10 expenditures - presuming
that the equivalent of these positions will be hired within the Joint Emergency Communications Center.
FY09 includes salaries for 5 additional Community Service Officer positions, with the presumption that they
will be training for Police Front office worK in anticipation of the Joint Emergency Communications center
opening in FY10. FY08 Transfers out includes $934.947 of General Fund monies being used as one-time
funding to pay a portion of the debt service as directed by City Council. Refer to page 23 for detail of
Transfers.
A comparison of dollars by major expenditure classification is provided below:
FY07 FY08 FY 09 FY1 O FY11
Actual Amended Budget Estimated Estimated
Person n¢I 32,025,733 31,568,518 33,188,605 34,121,389 35,724,809
Services 9,389,741 8,844,508 8,802,594 8,948,119 9,108,244
Su PPIi¢s 2,217,231 1,939,291 2,172,454 2,241,904 2,354,250
Capital Outlay 1.843,840 2,015,315 1,831,587 1,448,166 1,720,127
Other Financial Us¢s -Transfers 1,827,894 6,332,353 1,181,305 1,429,875 1,078,942
TOTAL EXP EN ~ITUI3ES 47,304,439 50,699,985 47,176,545 48,189,453 49,986,372
Chan9¢ 8.9 % 7.2 % -8.9 % 2.1 % 3.7
F Y2009 Budget
General Fund Expenditures by Category
60
50
~v
N 40
~o
0
~ 30
`o
c
0
20
10
D T ra n sf¢ rs
~ Capital Outlay
O Supplies
m Services
~ Person n¢1
25
`coo-~ `cyo$ <c~~ ~~,~o ~',~~
Fiscal Year (FY)
General Fund -Other Financing Uses
Other Financial Uses -This category budgeted at $1.2 million for FY 2009 includes transfers out of the
General Fund totaling $0.8 million and $352,000 budgeted for contingency at 0.75% of expenditures per
City Council policy. Following is an itemized listing of budgeted transfers out of the General Fund and
contingency from FY 2008 - FY2011.
General Fund FY2008 FY2009 FY2010 FY 2011
Transfer To Budget Budget Estimated Estimated
Operating Subsidy:
Airport Operations 196,000 130,000 130,000 130,000
JC COG 159, 500 156,338 161,165 165, 985
CIP Funding:
CIP -City Attorney Area Remodel 225,450 - - -
CIP -Fire Station 2 Expansion 1,950,000 - - -
CIP -Parks Sand Lake Recreation Area 350,000 - - -
CIP -Senior Center Projects 462,750 - - -
CIP -Transit Bus Acquisition 462,580 - - -
CIP -Transit Bus Cameras 18,000 - - -
CIP -Transit Wheelchair Lifts Rehab 4,550 - - -
CIP -Parks Land Acquisition 50,000 50,000 39,400 -
InterFund Loan Repayments:
Landfill -Fire Loan Repay 14,909 96,617 100,751 87,670
Landfill -Mercer/Scanlon Loan Repay 45,637 - - -
Landfill -Senior Center Loan Repay 49,903 52,209 46,140 6,545
Landfill -Transit Daycare Facility Loan 49,050 50,063 51,074 52,105
Parkland Acquisition~canlon Loan Repay 25,054 26,335 - -
Reserve Funding:
Library Computer Repl. Reserve 42,968 42,968 42,968 42,968
Library Equipment Repl . Reserve 19,454 19,454 19,4 54 19, 454
Transit Improvement Reserve 935,417 106,428 131,523 106,326
Misc. Other:
2002 G.O. Bond -Debt Abatement
from Library Commercial Space 50,000 98,893 98,400 97,889
Debt Service -Levy Reduction 934,947 - - -
EconomicDevelopment - - 250,000 -
TotalTransferfrom General Fund 6,046,169 829,305 1,070,875 708,942
Contingency 286,184 352,000 359,000 370,000
Total Other Financial Uses 6,332,353 1,181,305 1,429,875 1,078,942
26
General Fund
Year End Cash Balance
The City Council General nd balance policy was revi~d in FY2007 to establish an
optimum fund balance of 30 of expenditures. Thep icy ensures that operating cash
balances will be maintained at level to ensure suff~ lent cash flow throughout the fiscal
year. The following table depict the General Fu Operating cash position for fiscal
years 2007 through 2011.
FY07 Y08 FY09 FY10 FY11
Actual -Es 'mated Budget Estimated Estimated
Beginning Balance
Receipts
19,889,5 21,312;90 17,288,297 16,670,237 15,945,796
48,7'1,767 46,675,392 46,558,485 47,465,012 49,253,719
Expenditures ( ,304,439) (50,699,985) 47,176,545) (48,189,453) (49,986,372)
Ending Balance 21,312,890 17,288,297 1 670,237 15,945,796 15,213,143
*Reserved /Restricted 2,147,084 2,677,068 2, 2,774 2,846,806 3,048,958
Unreserved 23,459,974 19,965,365 19,42 011 18,792,602 18,262,101
Unreserved Balance % of 49 6°~ 39.4% 41.2%
Expenditures
*Reserved / R stricted includes: Library Computer and Equipment rese
Development, ransit Equipment reserve, Fire Equipment Replacement re
Deposits.
39.0% 36.5%
Park Land Acquisition &
and restricted Escrow /
27
General Fund -First Quarter Net Activity
before Property Taxes Received
The cash fund balance is used to provide cash flow during the first quarter
of the fiscal year because the majority of property taxes are received in
October/November, causing the cash balance to be drawn down. The
following chart shows cash flow needs or how expenditures have exceeded
receipts in the first three months for the past seven years.
3 Months C~ Receipts Expenditures
Sept. 30
Shortfall in
Receipts
FY08 $ 7,041,379 $ 12,484,773 (5,443,394)
FY07 $ 7,881,225 $ 13,014,632 (5,133,407)
FY06 6,315,525 12,105,987 (5,790,462)
FY05 6,040,943 10,889,278 (4,848,334)
FY04 4,595,488 11,049,590 (6,454,102)
FY03 4,806,797 9,410,440 (4,603,643)
FY02 4,387,107 8,818,510 (4,431,403)
Zs
E. DEBT SERVICE FUND
This fund accounts for annual principal and interest payments due on general obligation debt of the
City. Funding is provided by the debt service property tax levy, transfers from Water Operations
and TIF district tax revenue. FY2008 through 2011 G.O. bond issues are estimated at $9.7 million,
$9.2 million, $10.1 million and $10.9 million, respectively.
As stated in the City's Fiscal Policy, "Debt incurred as a general obligation of the City of lows City
shall not exceed statutory limits: presently 5% of the total assessed value of property within the
corporate limits as established by the City Assessor. The following schedule and graph depict
current and estimated future debt margins for the City. Property valuations for FY2009 - 2011
have been estimated with the assumption of three percent (3%) growth, annually.
Fiscal
Year
otal Pro Valuation alowable Debt
Margin
(5%ofTotal
Prope Val.
Outstanding
Debt
at Jul 1
Debt as %of
alowable
Debt Mar in
FY00 2,416,782,699 120,839,135 46,165,000 38%
FY01 2,591,030,038 129,551,502 41,190,000 32%
FY02 2,692,448,464 134y622,423 61,565,000 46%
FY03 2,909,644,383 145,482,219 85,260,000 99%
FY04 2,962,505,107 148,125,255 79,100,000 5:i%
FY05 3,195,170,779 159,758,539 85,085,000 53%
FY06 3,214,973,037 160,748,652 85,290,000 53%
FY07 3,732,590,506 186,629,525 85,060,000 46%
FY08 3,931,783,525 196,589,176 85,840,000 44%
*FY09 4y267,203,058 213,360,153 87,340,000 41%
*FY10 4,395,219,150 219,760,958 87,257,000 40%
*FY11 4y527,075,725 226,353,786 87,071,000 38%
* Estimate
29
i_~
zso
200
w
_R Aso ~
~ ~
'S ~
-100
50
O
Fscal Yaar (FY)
G_O_ Debt Outstanding
- by Fiscal Year -
Allowable Oe bt Margin)
~ Outstanding Oe bt
at July 1
" Estimated
Iowa City's Fiscal Policy also includes the guideline that "the debt service levy shall not exceed 25 % of the
city levy in any one fiscal year." The following chart shows the debt service levy as a percentage of the city
levy for FY2002 through FY20'1 '1 . Levies are certified through FY2008. Fiscal years 2009. 2010, and 20'11
are estimated based on capital project financing, projected operational costs and changes in property
valuations. Fiscal years 2007 and 2008 had one-time reductions in the debt levy of $638,200 and $934,947
which resulted in foregone debt levies of $0.27 and $0.385 respectively. General Fund funded these
reductions as part of the General Fund 30 % policy-
Oebt Service Levy
AS a Pe rce restage of
Total Property Tax Levy
30
(25 % Reco mrT~e rlded Maximum) 2~
25 % 25 % 2 0 26 % 26
23 % 22 % 22
20
20
1 5
1 O
5 % - -
O % ~ ~ T
Fiscal Yaar (FY) Estimated
3t)