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HomeMy WebLinkAbout2019-12-19 Info Packet� � 1 I iL &� Na� 40M, *W 4 4�� CITY O IOWA CITY www.icgov.org City Council Information Packet IP1. Council Tentative Meeting Schedule Miscellaneous IP2. Memo from City Clerk: KXIC Radio Show December 19, 2019 IP3. Comprehensive Annual Financial Report (CAF R) FY ending June 30, 2019 IP4. Civil Service Examination: Maintenance Worker I I - Transportation Draft Minutes IP5. Historic Preservation Commission: December 12 IP6. Park & Recreation Commission: December 11 December 19, 2019 City of Iowa City Page 1 Item Number: 1. CITY OE IOWA CITY www.icgov.org December 19, 2019 Council Tentative Meeting Schedule ATTACHMENTS: Description Council Tentative Meeting Schedule r I City Council Tentative Meeting Schedule "rr=P Subject to change CITYIOWA CITY December 19, 2019 Date Time Meeting Location Thursday, January 2, 2020 8:00 AM Special Formal (Organizational Meeting) Emma J. Harvat Hall Saturday, January 4, 2020 7:30 AM Breakfast on a Budget Reception Emma J. Harvat Hall 8:00 AM Budget Work Session Tuesday, January 7, 2020 3:00 PM Budget Work Session (CIP) Emma J. Harvat Hall 7:00 PM Formal Meeting Monday, January 13, 2020 4:00 PM Reception City of North Liberty 4:30 PM Joint Entities Meeting TBD Tuesday, January 21, 2020 5:00 PM Iowa City Conference Board Mtg. Emma J. Harvat Hall Work Session 7:00 PM Formal Meeting Tuesday, February 4, 2020 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, February 11, 2020 7:00 PM Joint Meeting with UISG 125 N. Madison Street Black Box Theater -Room #360 Tuesday, February 18, 2020 5:00 PM Iowa City Conference Board Mtg. Emma J. Harvat Hall Work Session 7:00 PM Formal Meeting Tuesday, March 3, 2020 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, March 24, 2020 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, April 7, 2020 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, April 21, 2020 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Item Number: 2. INCITY OE IOWA CITY www.icgov.org December 19, 2019 Memo from City Clerk: KXIC Radio Show ATTACHMENTS: Description Memo from City Clerk: KXI C Radio Show —"®gar CITY OF IOWA CITY kat, MEMORANDUM Date: December 18, 2019 To: Mayor and City Council From: Kellie Fruehling, City Clerk Re: KXIC Radio Show At your December 17 work session, Council Members agreed to the following schedule for the Wednesday 8:20 AM radio show. Wednesday December 18 — Throgmorton December 25 — (pre -record) City staff January 1 — (pre -record) Mims January 8 — Thomas January 15 — Mims January 22 — Taylor ** Please remember that KXIC is very flexible with taping the sessions ahead of the show. &CIk/Council KXIC Radio Schedule/radioshowasking.doc Item Number: 3. �r -4 "m ot r4" N CITY OE IOWA CITY www.icgov.org December 19, 2019 Comprehensive Annual Financial Report (CAFR) FY ending June 30, 2019 ATTACHMENTS: Description Letter from Auditor - Bohnsack & Frommelt LLP - Findings Letter from Auditor- Bohnsack & Frommelt LLP FY19 Iowa City CAF - Electronic Copy Bohnsack & Frommelt LLP Certlfled Public A.ccDuritants December 11, 2019 To the Honorable Mayor And Members of City Council City of Iowa City, Iowa 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 City of Iowa City, Iowa for the year ended June 30, 2019. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our engagement letter to you dated February 5, 2019. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by 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, 2019. 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. The most sensitive estimates affecting the City's financial statements were: Other Postemployment Benefit Liability: Management's estimate of the other postemployment benefit liability is based on an actuarial valuation computed based on employee -related factors such as turnover, retirement age, and mortality. These factors and an estimated discount rate and rate of return are based upon historical and general market data. Depreciable Useful Lives of Capital Assets: Management's estimate of the useful lives of capital assets involves judgments and assumptions based on prior experience of estimated useful lives assigned. Incurred But Not Reported (IBNR) Self -Insurance Liability: Management's estimate of the IBNR liability is based on past history of claims and lag time for payment and review of subsequent payments. Net Pension Liability and Related Deferred Inflows of Resources and Deferred Outflows of Resources for the Pension Liability: Management's estimate of the net pension liability is based on its proportionate share of the total net pension liability of the Iowa Public Employees Retirement system and Municipal Fire and Police Retirement system cost-sharing multiple - employer defined benefit pension plans administered by the state of Iowa. The liability is based on an actuarial valuation computed based on employee -related factors such as turnover, retirement age, and mortality. These factors and an estimated discount rate are based on historical and general market data. Unbilled Usage of Utilities: Management's estimate for unbilled usage of utilities is based on the prior period usage by the billing cycle or a percentage of the total usage billed subsequent to period -end. Closure and Post Closure of Landfill: Management's estimate of the closure and post closure care costs for the landfill is based on a licensed engineer specialist report based on current costs, structure, and volume. We evaluated the key factors and assumptions used to develop the above estimates in determining that the estimates are reasonable in relation to the financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were: The disclosure of commitments and contingencies in Note 12 and Note 13 to the financial statements refers to commitments made by the City that will have future financial impact. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. The attached schedule summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, 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. Management Representations We have requested certain representations from management that are included in the management representation letter dated December 11, 2019 which is attached. Management 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 governmental unit'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. Other Audit Findings or Issues 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 governmental unit's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. We have also issued a 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" and a report on "Independent Auditor's Report on Compliance For Each Major Federal Program and On Internal Control Over Compliance Required by the Uniform Guidance". Our findings are included in the City's Comprehensive Annual Financial Report. Other Matters We applied certain limited procedures to management's discussion and analysis, schedule of changes in the City's total OPEB liability and related ratios, schedule of the City's net proportionate share of the pension liability, schedule of contributions to the pension retirement system and budgetary comparison schedules, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on combining and individual nonmajor fund financial statements and schedule of expenditures of federal awards, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory or statistical sections, which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Restriction on Use This information is intended solely for the use of the City Council and management of City of Iowa City, Iowa and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, Moline, Illinois THIS PAGE INTENTIONALLY LEFT BLANK December 11, 2019 Bohnsack & Frommelt LLP 1500 River Drive, Suite 200 Moline, Illinois 61265 IL ,`S �► daaar�1L CITY OF IOWA CITY -110 Fast iVashingthn Street Iowa City, Iowa 52240- 1 826 (319) 35ti-50()0 (31 9) 356-5009 FAX tytt ty. icgov,org This representation letter is provided in connection with your audits of the financial statements of City of Iowa City, Iowa, which comprise the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information as of June 30, 2019, and the respective changes in financial position and, where applicable, cash flows for the year then ended, and the related notes to the financial statements, for the purpose of expressing opinions as to whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. An omission or misstatement that is monetarily small in amount could be considered material as a result of qualitative factors. We confirm, to the best of our knowledge and belief, as of December 11, 2019, the following representations made to you during your audit. Financial Statements 1) We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated February 5, 2019 including our responsibility for the preparation and fair presentation of the financial statements in accordance with U.S. GAAP and for preparation of the supplementary information in accordance with the applicable criteria. 2) The financial statements referred to above are fairly presented in conformity with U.S. GAAP and include all properly classified funds and other financial information of the primary government required by generally accepted accounting principles to be included in the financial reporting entity. There are no component units. 3) We acknowledge our responsibility for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 4) We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud. 5) Significant assumptions we used in making accounting estimates, including those measured at fair value, are reasonable. 6) Related party relationships and transactions, including revenues, expenditures/expenses, loans, transfers, leasing arrangements, and guarantees, and amounts receivable from or payable to related parties have been appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP. 7) All events subsequent to the date of the financial statements and for which U.S. GAAP requires adjustment or disclosure have been adjusted or disclosed. No events, including instances of noncompliance, have occurred subsequent to the balance sheet date and through the date of this letter that would require adjustment to or disclosure in the aforementioned financial statements or in the schedule of findings and questioned costs. 8) The effects of uncorrected misstatements are immaterial, both individually and in the aggregate, to the financial statements as a whole for each opinion unit. A list of the uncorrected misstatements is attached to the representation letter. 2 9) The effects of all known actual or possible litigation, claims, and assessments have been accounted for and disclosed in accordance with U.S. GAAP. 10) Guarantees, whether written or oral, under which the City is contingently liable, if any, have been properly recorded or disclosed. Information Provided 11) We have provided you with: a) Access to all information, of which we are aware, that is relevant to the preparation and fair presentation of the financial statements, such as records, documentation, and other matters and all audit or relevant monitoring reports, if any, received from funding sources. b) Additional information that you have requested from us for the purpose of the audit. c) Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence. d) Minutes of the meetings of City Council or summaries of actions of recent meetings for which minutes have not yet been prepared. 12) All material transactions have been recorded in the accounting records and are reflected in the financial statements and the schedule of expenditures of federal awards. 13) We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud. 14) We have no knowledge of any fraud or suspected fraud that affects the entity and involves: a) Management, b) Employees who have significant roles in internal control, or c) Others where the fraud could have a material effect on the financial statements. 15) We have no knowledge of any allegations of fraud or suspected fraud affecting the entity's financial statements communicated by employees, former employees, regulators, or others. 16) We have no knowledge of instances of noncompliance or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements, or abuse, whose effects should be considered when preparing financial statements. 17) We have disclosed to you all known actual or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statements. 18) We have disclosed to you the identity of the entity's related parties and all the related party relationships and transactions of which we are aware. Government—specific 19) There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices. 20) There has been no fraud, violations of laws, regulations, contracts, or grant agreements, or abuse. 21) We have a process to track the status of audit findings and recommendations. 22) We have identified to you any previous audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented. 23) We have provided our views on reported findings, conclusions, and recommendations, as well as our planned corrective actions, for the report. 24) The City has no plans or intentions that may materially affect the carrying value or classification of assets, liabilities, or equity. 25) We are responsible for compliance with the laws, regulations, and provisions of contracts and grant agreements applicable to us, including tax or debt limits and debt contracts; and legal and contractual provisions for reporting specific activities in separate funds. 26) There are no instances which have occurred or are likely to have occurred of fraud or noncompliance with provisions of law and regulations that we believe have a material effect on the financial statements or other financial data significant to the audit objectives, and there are no instances that warrant the attention of those charged with governance. 27) There are no instances which have occurred or are likely to have occurred of noncompliance with provisions of contracts and grant agreements what we believe have a material effect on the determination of financial statement amounts or other financial data significant to audit objectives. 28) There are no instances which have occurred or are likely to have occurred of abuse that could be quantitatively or qualitatively material to the financial statements or other financial data significant to the audit objectives. 29) There are no violations or possible violations of budget ordinances, laws and regulations (including those pertaining to adopting, approving, and amending budgets), provisions of contracts and grant agreements, tax or debt limits, and any related debt covenants whose effects should be considered for disclosure in the financial statements, or as a basis for recording a loss contingency, or for reporting on noncompliance. 30) As part of your audit, you assisted with the preparation of the financial statements and related notes and schedule of expenditure of federal awards and proposed adjusting journal entries. We acknowledge our responsibility as it relates to those nonaudit services, including that we assume all management responsibilities; oversee the services by designating an individual, preferably within senior management, who possesses suitable skill, knowledge, or experience; evaluate the adequacy and results of the services performed; and accept responsibility for the results of the services. We have reviewed and approved and accepted responsibility for those financial statements and related notes and schedule of expenditure of federal awards. 31) The City has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral. 32) The City has complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance. 33) There are no component units and no joint ventures with an equity interest, and no other joint ventures and other related organizations. 34) The financial statements properly classify all funds and activities in accordance with GASB Statement No.34. 35) All funds that meet the quantitative criteria in GASBS Nos. 34 and 37 for presentation as major are identified and presented as such and all other funds that are presented as major are particularly important to financial statement users. 36) Components of net position (net investment in capital assets; restricted; and unrestricted) and components of fund balance (nonspendable and restricted, committed, assigned, and unassigned) are properly classified and, if applicable, approved. 37) Investments, derivative instruments, and land and other real estate held by endowments are properly valued. 38) Provisions for uncollectible receivables have been properly identified and recorded. 39) Expenses have been appropriately classified in or allocated to functions and programs in the statement of activities, and allocations have been made on a reasonable basis. 40) Revenues are appropriately classified in the statement of activities within program revenues and general revenues. 41) Interfund, internal, and intra -entity activity and balances have been appropriately classified and reported. 42) Deposits and investment securities and derivative instruments are properly classified as to risk and are properly disclosed. 43) Capital assets, including infrastructure and intangible assets, are properly capitalized, reported, and, if applicable, depreciated. 44) We have appropriately disclosed the City's policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available and have determined that net position is properly recognized under the policy. 45) We are following our established accounting policy regarding which resources (that is, restricted, committed, assigned, or unassigned) are considered to be spent first for expenditures for which more than one resource classification is available. That policy determines the fund balance classifications for financial reporting purposes. 46) We have not completed the process of evaluating the impact that will result from adopting Governmental Accounting Standards City Council (GASB) Statements No. 84, 87, 89, 90 and 91 as discussed in the notes to the financial statements. The City is therefore unable to disclose the impact that adopting the new standard will have on its financial position and the results of its operations when adopted. 47) We believe that the newly adopted GASB Statement No. 83 and 88 are properly implemented and adopted. 48) We agree with the findings of specialists in evaluating the other post-employment benefit estimate, IPERS and MFPRSI estimates and have adequately considered the qualifications of the specialist in determining the amounts and disclosures used in the financial statements and underlying accounting records. We did not give or cause any instructions to be given to specialists with respect to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an impact on independence or objectively of the specialists. 49) We believe that the actuarial assumptions and methods used to measure pension and OPEB liabilities and costs for financial accounting purposes are appropriate in the circumstances. 50) We are unable to determine the possibility of a withdrawal liability in a multiple-employer benefit plan. 51) Receivables recorded in the financial statements represent valid claims against debtors for transactions arising on or before the balance sheet date and have been reduced to their estimated net realizable value. 52) Tax abatement agreements have been properly disclosed in the notes to the financial statements including the names of all governments involved, the gross amount and specific taxes abated, and additional commitments. Tax abatements entered into by other governments that affect our revenues have been properly disclosed in the notes to the financial statements, including the names of the governments that entered into the agreements, the specified taxes being abated, and the gross dollar amount of taxes abated during the period. 53) We acknowledge our responsibility for the required supplementary information (RSI). The RSI is measured and presented within prescribed guidelines and the methods of measurement and presentation have not changed from those used in the prior period. We have disclosed to you any significant assumptions and interpretations underlying the measurement and presentation of the RSI. 54) With respect to the combining and individual nonmajor fund financial statements and schedule of expenditures of federal awards and other supplementary information : a) We acknowledge our responsibility for presenting the combining and individual nonmajor fund financial statements and schedule of expenditures of federal awards and other supplementary information in accordance with accounting principles generally accepted in the United States of America, and we believe the supplementary information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America. The methods of measurement and presentation of the combining and individual nonmajor fund financial statements and schedule of expenditures of federal awards have not changed from those used in the prior period, and we have disclosed to you any significant assumptions or interpretations underlying the measurement and presentation of the supplementary information. b) If the supplementary information is not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the supplementary information no later than the date we issue the supplementary information and the auditor's report thereon. 55) With respect to federal award programs a) We are responsible for understanding and complying with and have complied with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), including requirements relating to preparation of the schedule of expenditures of federal awards. b) We acknowledge our responsibility for presenting the schedule of expenditures of federal awards (SEFA) and the related notes in accordance with the requirements of the Uniform Guidance, and we believe the SEFA, including its form and content, is fairly presented in accordance with the Uniform Guidance. The methods of measurement or presentation of the SEFA have not changed from those used in the prior period and we have disclosed to you any significant assumptions and interpretations underlying the measurement or presentation of the SEFA. c) If the SEFA is not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the SEFA no later than the date we issue the SEFA and the auditor's report thereon. d) We have identified and disclosed to you all of our government programs and related activities subject to the Uniform Guidance compliance audit and included in the SEFA, expenditures made during the audit period for all awards provided by federal agencies in the form of federal awards, federal cost - reimbursement contracts, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other direct assistance. e) We are responsible for understanding and complying with, and have complied with, the requirements of federal statutes, regulations, and the terms and conditions of federal awards related to each of our federal programs and have identified and disclosed to you the requirements of federal statutes, regulations, and the terms and conditions of federal awards that are considered to have a direct and material effect on each major program. f) We are responsible for establishing and maintaining, and have established and maintained, effective internal control over compliance for federal programs that provides reasonable assurance that we are managing our federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards that could have a material effect on our federal programs. We believe the internal control system is adequate and is functioning as intended. g) We have made available to you all federal awards (including amendments, if any) and any other correspondence with federal agencies or pass-through entities relevant to federal programs and related activities. h) We have received no requests from a federal agency to audit one or more specific programs as a major program. i) We have complied with the direct and material compliance requirements (except for noncompliance disclosed to you), including when applicable, those set forth in the OMB Compliance Supplement, relating to federal awards and confirm there were no amounts questioned and no known noncompliance with the direct and material compliance requirements of federal awards. j) We have disclosed any communications from federal awarding agencies and pass-through entities concerning possible noncompliance with the direct and material compliance requirements, including communications received from the end of the period covered by the compliance audit to the date of the auditor's report. k) We have disclosed to you the findings received and related corrective actions taken for previous audits, attestation engagements, and internal or external monitoring that directly relate to the objectives of the compliance audit, including findings received and corrective actions taken from the end of the period covered by the compliance audit to the date of the auditor's report. 1) Amounts claimed or used for matching were determined in accordance with relevant guidelines in OMB's Uniform Guidance (2 CFR part 200, subpart E). m) We have disclosed to you our interpretation of compliance requirements that may have varying interpretations. n) We have made available to you all documentation related to compliance with the direct material compliance requirements, including information related to federal program financial reports and claims for advances and reimbursements. o) We have disclosed to you the nature of any subsequent events that provide additional evidence about conditions that existed at the end of the reporting period affecting noncompliance during the reporting period. p) There are no such known instances of noncompliance with direct and material compliance requirements that occurred subsequent to the period covered by the auditor's report. q) No changes have been made in internal control over compliance or other factors that might significantly affect internal control, including any corrective action we have taken regarding significant deficiencies or material weaknesses in internal control over compliance, subsequent to the period covered by the auditor's report. r) Federal program financial reports and claims for advances and reimbursements are supported by the books and records from which the financial statements have been prepared. s) The copies of federal program financial reports provided you are true copies of the reports submitted, or electronically transmitted, to the respective federal agency or pass-through entity, as applicable. t) We have monitored subrecipients, as necessary, to determine that they have expended subawards in compliance with federal statutes, regulations, and the terms and conditions of the subaward and have met the other pass-through entity requirements of the Uniform Guidance. u) We have issued management decisions for audit findings that relate to federal awards made to subrecipients and such management decisions have been issued within six months of acceptance of the audit report by the Federal Audit Clearinghouse. Additionally, we have followed-up ensuring that the subrecipient has taken timely and appropriate action on all deficiencies detected through audits, on-site reviews, and other means that pertain to the federal award provided to the subrecipient. v) We have considered the results of subrecipient audits and have made any necessary adjustments to our books and records. w) We have charged costs to federal awards in accordance with applicable cost principles. x) We are responsible for and have accurately prepared the summary schedule of prior audit findings to include all findings required to be included by the Uniform Guidance and we have provided you with all information on the status of the follow-up on prior audit findings by federal awarding agencies and pass- through entities, including all management decisions. y) We are responsible for and have ensured the reporting package does not contain protected personally identifiable information. z) We are responsible for and have accurately prepared the auditee section of the Data Collection Form as required by the Uniform Guidance. aa) We are responsible for taking corrective action on each audit finding of the compliance audit and have developed a corrective action plan that meets the requirements of the Uniform Guidance. Signature: Signature: t G Title: A "ryc'C V I ,12Cc -1-0 Title:_ City of Iowa City, Iowa Summary of Uncorrected Misstatements Year Ended June 30, 2019 Fund and Account 1. General Fund / Governmental Activities Payroll expense Accrued Payroll To post General Fund Accrual for 6/30/19 payroll Debit Credit 31,461 31,461 2. General Fund / Governmental Activities Change in Fair Value of Investments 68,950 Investments 68,950 To record the fair value of investments for Bankers Trust Investments Bohnsack & Frommelt LLP Certified Public Accountants To the Honorable Mayor and Members of City Council City of Iowa City Iowa Iowa City, Iowa In connection with our audit of the financial statements of the City of Iowa City, Iowa as of and for the year ended June 30, 2019, we identified deficiencies in internal control over financial reporting (control deficiencies). 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 functions, to prevent, or detect and correct misstatements on a timely basis. A deficiency in design exists when a control necessary to meet the control objective is missing, or when an existing control is not properly designed so that even if the control operates as designed, the control objective would not be met. A deficiency in operation exists when a properly designed control does not operate as designed or when the person performing the control does not possess the necessary authority or qualifications to perform the control effectively. A material weakness is a deficiency or a combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Following is a description of identified control deficiencies that we determined did not constitute significant deficiencies or material weaknesses: Rehabilitation Proiect Inspections: There is currently no formal process to document pre -inspections and post -inspections on homeowner occupied rehabilitation projects prior to the City releasing funds to pay the contractors as reported in the City's Comprehensive Annual Financial Report. We noted an instance in which the contractor was paid in August 2018, however, the date of the inspection was missing and the statement was signed by a licensed inspector. We noted a different project file issued payment to the contractor in July 2019; however, the inspection statement was unsigned and the date of the inspection was missing. We recommend the City implement a formal checklist for a pre -inspection and post -inspection. The documentation should include deficiencies that must be corrected prior to payment and when a reinspection will occur or a conclusion that the project passes inspection. The documentation should be completed and signed prior to releasing contractor payment. This communication is intended solely for the information and use of management and the City Council and is not intended to be and should not be used by anyone other than those specified parties. &/t,O,L� r —Avm� Lzp Moline, Illinois December 11, 2019 0 A 1 0 1 11111010� Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019 07 as , is; 'a rix � � �: _ - - �� 'G [ •[ a � ..ice- �''r _ _ • Jim I:� -1 � _ ,`� = S, t. 4 v'R NfA"� Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF IOWA CITY, IOWA FOR THE FISCAL YEAR ENDED JUNE 309 2019 PREPARED BY: FINANCE DEPARTMENT CITY OF IOWA CITY, IOWA Introductory Section Tab CITY OF IOWA CITY, IOWA TABLE OF CONTENTS June 30, 2019 Page INTRODUCTORY SECTION Tableof contents................................................................................................................................ 1 Letterof transmittal............................................................................................................................ 3 Certificate of Achievement for Excellence in Financial Reporting ................................................... 12 Cityorganizational chart .................................................................................................................... 13 Cityofficials....................................................................................................................................... 14 FINANCIAL SECTION INDEPENDENT AUDITOR'S REPORT......................................................................................... 15 MANAGEMENT'S DISCUSSION AND ANALYSIS.................................................................... 19 BASIC FINANCIAL STATEMENTS Government -wide financial statements Statementof net position............................................................................................................. 30 Statementof activities.................................................................................................................. 33 Fund financial statements Balance sheet — governmental funds............................................................................................ 34 Reconciliation of the balance sheet of the governmental funds to the statement of net position 35 Statement of revenues, expenditures, and changes in fund balances — governmental funds ....... 36 Reconciliation of the statement of revenues, expenditures, and changes in fund balances of governmental funds to the statement of activities..................................................................... 37 Statement of net position — proprietary funds.............................................................................. 38 Statement of revenues, expenses, and changes in fund net position — proprietary funds ............ 39 Statement of cash flows — proprietary funds................................................................................ 40 Statement of fiduciary assets and liabilities................................................................................. 41 Notes to financial statements.......................................................................................................... 42 REQUIRED SUPPLEMENTARY INFORMATION Budgetary comparison schedule — budget and actual — all governmental funds and enterprise funds — budgetary basis.................................................................................... 82 Budgetary comparison schedule — budget to GAAP reconciliation ................................... 84 Note to required supplementary information — budgetary reporting ................................... 85 Schedule of the City's proportionate share of MFPRSI net pension liability ........................ 87 Schedule of City's MFPRSI contributions................................................................ 88 Notes to required supplementary information — MFPRSI pension liability ........................... 90 Schedule of the City's proportionate share of IPERS net pension liability .......................... 91 Schedule of City's IPERS contributions................................................................... 92 Notes to required supplementary information — IPERS pension liability ............................. 94 Required supplementary information — schedule of changes in the City's total OPEB liability, relatedratios and notes.................................................................................... 96 COMBINING FUND STATEMENTS Combining balance sheet — nonmajor governmental funds............................................................ 98 Combining statement of revenues, expenditures, and changes in fund balances — nonmajor governmentalfunds...................................................................................................................... 99 Combining statement of net position — internal service funds ........................................................ 102 Combining statement of revenues, expenses, and changes in fund net position — internal service funds............................................................................................................................................. 103 CITY OF IOWA CITY, IOWA TABLE OF CONTENTS June 30, 2019 Page COMBINING FUND STATEMENTS (continued) Combining statement of cash flows — internal service funds.......................................................... 104 Statement of changes in assets and liabilities — agency funds......................................................... 106 STATISTICAL SECTION (UNAUDITED) Netposition by component................................................................................................................. 109 Changesin net position...................................................................................................................... 110 Fund balances — governmental funds................................................................................................. 112 Changes in fund balances — governmental funds............................................................................... 113 General government tax revenues by source...................................................................................... 114 Assessed and taxable value of property .............................................................................................. 115 Property tax rates — direct and overlapping governments.................................................................. 116 Leviesand collections........................................................................................................................ 117 Principaltaxpayers............................................................................................................................. 118 Larger water system customers.......................................................................................................... 120 Sales history and water system charges.............................................................................................. 121 Larger sewer system customers.......................................................................................................... 122 Sales history and sewer system charges............................................................................................. 123 Ratiosof outstanding debt by type..................................................................................................... 124 Ratios of general obligation bonded debt to assessed value and net bonded debt per capita ............. 125 Ratio of annual debt service expenditures for general bonded debt to total general governmental expenditures..................................................................................................................................... 126 Computation of direct and overlapping debt...................................................................................... 127 Legal debt margin information........................................................................................................... 128 General obligation debt annual maturity schedule............................................................................. 129 Schedule of revenue bond coverage................................................................................................... 130 Revenue debt annual maturity schedule............................................................................................. 131 Revenue debt annual maturity by funding source.............................................................................. 132 Demographic and economic statistics................................................................................................ 134 Principalemployers............................................................................................................................ 135 Full-time equivalent city government employees by function........................................................... 136 Operating indicators by function........................................................................................................ 137 Capital assets by function................................................................................................................... 138 COMPLIANCE SECTION Independent auditor's report on internal control over financial reporting and on compliance and other matters based on an audit of financial statements performed in accordance with Government AuditingStandards............................................................................................................................. 139 Independent auditor's report on compliance for each major federal program and report on internal control over compliance required by the Uniform Guidance............................................................. 141 Schedule of expenditures of federal awards....................................................................................... 143 Notes to the schedule of expenditures of federal awards................................................................... 146 Schedule of findings and questioned costs......................................................................................... 147 Correctiveaction plan........................................................................................................................ 150 2 December 11, 2019 To the Citizens, Honorable Mayor, Members of the City Council and City Manager City of Iowa City, Iowa +� rr�W=9%= Th 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, 2019 is submitted herewith in accordance with the provisions of Chapter 11 of the Code of Iowa. The City's Finance Department prepared this report. Responsibility for both the accuracy of the data presented and the completeness and fairness of the presentation, including all disclosures, rest with the City. I believe the information, as presented, is accurate in all material respects and presented in a manner designed to fairly present the financial position and results of operations of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial affairs have been included. Management assumes full responsibility for the completeness and reliability of all of the information presented in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal controls should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements will be free of any material misstatement. Bohnsack & Frommelt, LLP, a firm of independent public accountants has issued an unmodified ("clean") opinion on the City's financial statements for the year ended June 30, 2019. Their opinion is included in the Financial Section of this report. The City is required to undergo an annual single audit in conformity with the provisions of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Information to comply with the Uniform Guidance and "Government Auditing Standards" is included in the Compliance Section of this report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditors. Profile of the Government The City of Iowa City was incorporated April 6, 1853. The City is governed by a seven member Council; each member serves a four-year term. Elections are held every two years allowing for continuation in office of at least three members at each biennial election. The Council members are elected at large, with three members nominated from specific districts and the remaining four members nominated at large. The Council elects the Mayor from its own members for a two-year term. The City Council is the legislative body and makes all policy determinations for the City through the enactment of ordinances and resolutions. It also adopts a budget to determine how the City will obtain and spend its funds. The Council appoints members of boards, commissions and committees. The City Manager is the chief administrative officer for the City and is appointed by the City Council. The City Manager implements policy decisions of the City Council and enforces City ordinances. In addition, the City Manager appoints and directly supervises the directors of the City's operating departments and supervises the administration of the City's personnel system. The City Manager supervises 502 full-time and 46 part-time permanent municipal employees and 273 temporary employees, including a police force of 85 sworn personnel and a fire department of 64 firefighters. The City Clerk is appointed by the City Council and reports to the Council. The City Clerk's Office administers the City government's documentation, City licenses and permits, and provides information from the Municipal Code and City Ordinances to the public and other City departments. The City Clerk's Office is also responsible for distributing and maintaining accurate records of all City Council proceedings. The Clerk supervises 3 full-time employees and 1 temporary employee. The City Attorney is also appointed by the City Council and works at the direction of the City Council. The City Attorney supervises the City Attorney's Office, including 4 Assistant City Attorneys and 2 other full-time employees. In addition, the City Attorney acts as Chief Legal Counsel to the City Council, City Manager, the various City departments and staff, and most City commissions, committees and boards. The City provides a full range of services including police and fire protection, construction and maintenance of roads, streets and infrastructure, inspection and licensing functions, a municipal airport, library, recreational activities, and cultural events. The City owns and operates its water supply and distribution system and sewage collection and treatment system with secondary treatment also provided. Virtually the entire City has separate storm and sanitary sewer systems. The City operates a municipal off-street and on -street parking system in the downtown area. The City also operates a transit system. The annual budget serves as the foundation for the City's financial planning and control. All departments of the City are required to submit requests for appropriation to the City Manager in October. The City Manager uses these requests as the starting point for developing a proposed budget. The City Manager then presents this proposed budget to the Council for review in December. The Council is required to hold a public hearing on the proposed budget and to adopt a final budget no later than March 15. The appropriated budget is prepared by fund, function (e.g., Public Safety), and department (e.g., Police). The City adopts a three-year financial plan that includes both operations and capital improvements. This three-year plan permits a more comprehensive review of the City's financial condition, allowing analysis of the current and future needs and requirements. During preparation of the plan, careful review is made of property tax levy rates, utility and user fee requirements, ending cash balances by fund, debt service obligations, bond financing needs, capital outlay for equipment purchases and major capital improvement projects. The state requires at least a one-year operating budget. While legal spending control is exercised at a state mandated function level, management control is set at the Department Manager level. Encumbrance accounting is utilized in all funds for budgetary control. Appropriations that are not spent lapse at the end of the year. 4 Information Useful in Assessing the Government's Economic Condition The City's economic strength is based on the educational sector, medical services, and diversified manufacturing. The University of Iowa and the University of Iowa Hospital and Clinics are the City's largest employers with over 30,000 employees. The University of Iowa had an enrollment in fall 2019 of 32,535 students, which is a decrease of 413 students from 32,948 students in the fall of 2018. The academic and research missions of the University, along with the health care services provided at its hospitals and clinics, have an extremely positive economic impact on the area. The City also has a significant number of national and international businesses, including Fortune 500 companies: ACT Inc., NCS Pearson, and Procter & Gamble. In February 2018, Procter and Gamble announced that in approximately two years they would be shifting their beauty care products production from Iowa City to their West Virginia plant. This will eventually reduce the workforce down from approximately 600 to 100 employees. This may also have an impact on nearby businesses that produce bottles and labels for this production plant in Iowa City. Procter and Gamble has added and is expanding an electric toothbrush plant in Iowa City which is expected to employ several hundred employees; it currently has added approximately 100 employees. The estimated investment in this new facility is approximately $100 million. Overall, the continued economic development efforts with the Iowa City and Coralville Chambers of Commerce, private interests, the University of Iowa, other surrounding communities, and the Iowa City Area Development Group, have produced positive results with the retention and expansion of businesses. In addition, Iowa's Creative Corridor is a seven -county alliance surrounding Iowa City and has been identified as one of the major growth areas for new business development in the State of Iowa. This Corridor gives employers workforce access to a region uniquely Iowan, founded with a manufacturing heritage, but actively seeking new frontiers and opportunities in information technology, biotechnology and bioprocessing, renewable energy, insurance and financial services, advanced manufacturing, and educational services. Continued developments within Iowa City and the region have a favorable impact upon the City's economy. As a whole, the City's economy continues to grow. Established firms continue to prosper and expand in Iowa City and there are opportunities for growth of new businesses. Overall, employment has remained steady as evidenced in the unemployment rate for Iowa City, which continues to remain low at 2.2% for the month of June 2019, as compared to 2.5% for the State of Iowa, and 3.7% for the national average. The rate of new housing construction decreased in comparison to the prior year based on the number of building permits issued. This consisted of 114 new single-family houses and duplexes in 2018 as compared to 161 in 2017; multi -family dwelling units added during fiscal year 2018 was 163, compared to 203 in 2017; and mixed commercial/residential developments added 169 dwelling units in 2018 versus 150 residential units in 2017. Altogether these housing additions totaled 446 units valued at $95,524,761 in 2018 versus a total of 514 units valued at $101,601,806 in 2017. In contrast to the decrease in residential construction in 2018, the City had an increase in commercial construction. The value of permits for commercial construction increased by $15,075,483 to $20,081,259 from 2017 to 2018; however, the value of remodeling permits for residential and commercial properties decreased by $35,574,490 to $72,091,724 from 2017 to 2018. Total permits issued in 2018 for all purposes was 618 permits for $192,814,810 which was less than the 2017 total permit issuance of 718 permits for $216,818,013 Although there was a decrease in building permit issuance in 2018 versus 2017, the 2018 building permit issuance was close to an average year for the City. According to the 2010 census, the population of Iowa City is 67,862. This is an increase of 5,672 or 9.1% as compared to the 2000 census. Iowa City population in 2018 is estimated to be 76,290 by the U.S. Census Bureau. The stability of the University of Iowa coupled with historically steady employment by the City's multi -sector base of manufacturing and service industries, helps to insulate the City from any significant negative economic impacts of any recessions. The City's property valuations continue to rise and along with the low unemployment rate, this is indicative of the City's relative economic stability. Major Initiatives The City of Iowa City, with the assistance of Kirkwood Community College, completed the City's Strategic Plan. The strategic planning process involved multiple steps, including gathering input from the general public, front-line City staff, department directors, and the City Council. The Strategic Plan establishes the following organizational priorities, programs, policies, and initiatives: 1. Promote a Strong and Resilient Local Economy • Undertake a comprehensive assessment of the current public transit system and implement changes to assure that the service best meets the needs of the entire community • Effectively market and grow the local food economy • Through cooperation with the Iowa City School District, Iowa Workforce Development, Kirkwood Community College, Iowa Works, and others, increase opportunities for marginalized populations and low-income individuals to obtain access to skills training and good jobs • Work with Procter & Gamble and impacted supply chain companies, local economic development organizations, and labor unions to respond effectively to the company's decision to terminate its local production of beauty care products 2. Encourage a Vibrant and Walkable Urban Core • Collaborate with the University of Iowa on its redevelopment of University -owned property located in the Riverfront Crossings District, and on improving the quality, accessibility, and use of the Iowa River Corridor • Preserve important parts of Iowa City's history by considering the designation of additional buildings as historic landmarks, and by considering the creation of a historic preservation district for part of the downtown after consulting with stakeholders • Evaluate existing strategies and consider additional actions to address the need for reinvestment in the city's existing private housing stock 6 Foster Healthy Neighborhoods throughout the City • Modify the existing Affordable Housing Action Plan to include new strategies to improve the availability and affordability of housing in Iowa City • Embed the "Missing Middle" concept into the City's land development practices by adopting a Form Based Code for at least one (preferably two) of our neighborhoods • Ensure the next two budgets contain sufficient funds to make meaningful progress toward achieving the goals of the Bicycle Master Plan and Parks Master Plan • Complete an analysis of traffic accident data and identify actions to improve the safety of our roadways for motorists, bicyclists, and pedestrians 4. Maintain a Solid Financial Foundation • Continue to monitor the impact of the 2013 property tax reform and evaluate alternative revenue sources as determined necessary • Continue to build the City's Emergency Fund • Monitor potential changes to Moody's rating criteria and maintain the City's Aaa bond rating • Continue to reduce the City's property tax levy • Maintain healthy fund balances throughout the City's diverse operations Enhance Community Engagement and Intergovernmental Relations • Experiment with innovative ways of engaging with diverse populations in person and on social media • Improve collaborative problem -solving with governmental entities in the region on topics of shared interest • Improve relationships with the executive branch and legislature by reaching out to legislators and other elected officials and working with City lobbyists 6. Promote Environmental Sustainability • Adopt an effective Climate Action and Adaptation Plan and ensure the next two budgets contain sufficient funds to facilitate achieving its goal • Support efforts to increase the reach of the Parks and Recreation Foundation 7. Advance Social Justice and Racial • Support organizations and efforts that provide services to people experiencing and recovering from trauma and crisis related to mental health and substance abuse • Consider a policy to limit city business to vendors that pay all employees a wage of $10.10 or higher • Explore expanded use of a racial equity toolkit within City government, embedding it within city department and Council levels • Consider elevating hourly staff wages to $15/hour or more within two years The City Council has also promoted private investment and re -development of other targeted areas throughout the community. The areas that are currently being focused on include the Riverfront Crossings area, the Downtown District, the Towncrest commercial area, and the Riverside Drive commercial area. The Riverfront Crossing area is an initiative to revitalize the area south of Iowa City's downtown district. This area was hard hit by flooding in 2008 and ideas for improving the district were initiated as part of a combined flood mitigation plan. The new district features a riverfront park with walking and biking trails, a variety of housing options near shopping, restaurants, a state-of- the-art recital hall and recreational facilities and is a short walk to downtown Iowa City and the University of Iowa campus. The Riverfront Crossings area is anchored by a 76.8 acre park that was formerly comprised of public facilities including the City's north wastewater treatment plant. An $8.5 million hazard mitigation grant from the State of Iowa assisted the City in removing the public facilities in this area and then converting the area into a riverfront park and wetland. Construction of phases 1 through 3 of the park began in 2017 and are expected to be completed during the fall of 2019. On the north side of the Riverfront Crossing area, the University of Iowa recently constructed the Voxman School of Music. On the adjacent corner, the redevelopment of an empty lot is under construction which will include a 7 -story, mixed-use building with 40 apartment units, retail space on the street level, and office space on the second floor. An adjacent building will house a 7 -story extended stay hotel. The estimated cost of these developments is approximately $40 million and are expected to be completed in 2019. There have also been numerous public and private developments that have recently been completed in this area including a 12 -story, $33 million Hilton Garden Inn, an $102.5 million mixed-use development with a 14 -story tower and a 15 -story tower that will include the Hyatt Place hotel, apartments, retail space, and office space, and the $50-$60 million redevelopment of a lumber store into a 40,000 square foot brewery, restaurant, and tap room which will be flanked by 300+ dwelling units. The City also completed construction of a $15.3 million, 600 space parking garage in April 2017 to service growth in this area, which subsequently had 28 new townhomes constructed around it. In the Downtown District, the City completed a streetscape plan for the Central Business District which included lighting, landscaping, parking, utility improvements, art work, and pedestrian amenities. Reconstruction and enhancements for the Washington Street corridor were completed in 2017 and reconstruction of Black Hawk mini -park and the downtown pedestrian mall are currently under construction and are expected to be completed in late 2019. Other buildings in the downtown that are undergoing or have recently completed major re- development include the Wilson Building and public space which is being developed into a 15 - story mixed-use development to be known as the Chauncey; this building will have 8 floors of residential units, a 35 unit hotel, two floors of commercial space, a movie theatre and a bowling alley. The project is estimated to be $49 million and is currently under construction. Also under construction is the redevelopment of the City Hall parking lot and neighboring church into 126 residential units, parking, and commercial space. The project is estimated to cost $33.4 million. Both of these projects are expected to be completed in the fall of 2019. In the Towncrest commercial area, City staff is working to facilitate redevelopment of key properties that will improve the function and aesthetic appeal of the area. The Towncrest Urban Renewal Area was developed to revitalize the Towncrest commercial district in ways that would serve existing businesses while also drawing new retailers, service providers, and consumers to the area. A major project in the area recently completed was a $7.4 million senior housing complex with 40 units which was built on the former site of a dilapidated commercial structure. Also, recently completed was the consolidation and redevelopment of two older gas stations located on the primary intersection in this district into a new gas station/marketplace. The Riverside Drive commercial area is an area that stretches from the University of Iowa campus to the intersection of Highways 1 and 6 and is across the river from the Riverfront Crossings development area. The development of a 4 -story, $16.1 million multi-family/student housing development in the Riverside Drive area was completed in late 2016, and adjacent to this development several new retail spaces including a gas station/marketplace and additional multi - residential housing units were also constructed or renovated. The City is developing a streetscape plan for this area which will include lighting, trails, landscaping, and other amenities and improvements. Construction of the streetscape improvements began in 2018 and will continue into 2019 and 2020. Long-term Financial Planning It is management's intent to support the major City Council initiatives through budget appropriations, departmental operations, and employee development so that the organization as a whole is moving in the same direction. A significant influence in the preparation of the three-year financial plan (FY2019 — FY2021) was the passage of property tax reform (SF295) by the state legislature in 2013. The property tax reform bill had multiple components including a property tax rollback for commercial and industrial property, which reduced the taxable value of these property types. The bill established a State funded "backfill" to reimburse the City for lost property tax revenues due to the commercial and industrial rollback. The State "backfill" payments began in fiscal year 2015 but were capped at the fiscal year 2017 levels for years thereafter. The cumulative reduction in commercial and industrial property tax revenues due to this rollback are estimated to be $17,111,000 between fiscal year 2015 to fiscal year 2024, and the maximum reimbursement from the State during that time period would be $16,388,000 for a net loss in revenues of $723,000. For fiscal years 2015 through 2019, the City received actual State "backfill" payments for the commercial and industrial rollback totaling $7,809,583. This bill also limited the annual taxable valuation growth of residential and agricultural property to 3 percent, instead of the previous limit of 4 percent. The impact of this provision is that the taxable percentage of residential property is expected grow at a slower pace. Without this change, the estimated taxable percentage of residential property was estimated to be 60.85% in fiscal year 2024. With this provision in place, the estimated taxable percentage in fiscal year 2024 is estimated to be 55.11%, a reduction of 5.74%. Based on the assessed value of residential property in Iowa City, the cumulative loss is estimated to be $22,008,000 from fiscal year 2015 to fiscal year 2024. The City will not receive any money from the State due to lost revenue from this provision. SF295 also established a multi -residential property classification that includes mobile home parks, assisted living facilities, and property primarily intended for human habitation. A gradual rollback will be applied to these properties to eventually tax them similarly to residential property, rather than commercial, by fiscal year 2024. The estimated cumulative loss from fiscal year 2015 to fiscal year 2024 is $16,004,000, which will not be reimbursed by the State of Iowa. Fiscal year 2017 was the first year for this new class of property, and the estimated lost revenue from this provision in from fiscal year 2017 to fiscal year 2019 was $3,805,410. Due to the passage of SF295, the City estimates its net revenue losses to be $3,891,016 for fiscal years 2015 through 2019. The cumulative net revenue loss from fiscal years 2015 through 2024 is estimated to be $38,735,000. It is possible that this could affect the City's ability to finance services at current levels without finding other revenue sources or more efficient ways to deliver services. The City's long-term financial planning strategy is to promote targeted economic development, diversify its revenue structure, control spending and create efficiencies, and to build adequate reserves and contingencies into its financial structure. In addition, the City is annually reviewing and adjusting its user fees, service charges, and fine structures to try to maintain all of its major enterprise funds with a positive net income after depreciation but before capital contributions, transfers, and extraordinary items. The City also continues to strive to reduce the City's property tax levy rate to be competitive for economic development purposes. In fiscal year 2013, the City's property tax levy rate was $17.269 per $1,000 of assessed value. The property tax levy rate has been reduced for six consecutive years to $15.833 in fiscal year 2020. This has been a reduction of $1.436 per $1,000 of assessed value or 8.32% over that time period. In looking at expenses for the FY19 — FY21 Financial Plan and FY20 operating budget, the City will generally experience increased expenditures; however, at a modest pace. Bargaining unit cost - of -living wage increases are approximately 2.00% to 2.75% each year; however, the budgeted full- time equivalents (FTE) has generally remained flat - from 607.66 in FYI to 608.18 in FY20. In addition, public safety pension contribution rates decreased slightly in FY20 but are projected to increase slightly in FY21. The City has averaged a 4.87% increase in its health insurance premium rates over the previous seven years; however, is cautiously projecting a larger premium increase in FY21 due to a projected increase in claims. Employee contributions, deductibles, and out-of- pocket maximums are also expected to increase in both FY20 and FY21 which should help mitigate the impact to the City's overall budget. In balancing the budget for the three-year period, the City attempted to mitigate the growth of costs while continuing to provide high quality services by identifying and eliminating redundancies within the organization, examining existing and potential new revenue sources, strategically funding new programming and economic development to ensure strong property values, providing for necessary improvements to existing infrastructure, and upholding fiscal integrity by maintaining adequate cash reserves. 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, 2018. The Certificate is the highest form of recognition for excellence in state and local financial reporting. In order to be awarded the Certificate, a governmental unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, whose contents conform to program standards. The Comprehensive Annual Financial Report must satisfy both accounting principles generally accepted in the United States of America and applicable legal requirements. The Certificate is valid for a period of one year only. The City has received the Certificate for the last thirty-four consecutive years. I believe our current report continues to conform to the Certificate requirements and I will submit it to GFOA to determine its eligibility for another certificate. In addition, the City received the GFOA's Award for Distinguished Budget Presentation for its annual appropriated budget beginning July 1, 2019. In order to qualify for the Distinguished Budget Presentation Award, the City's budget document was judged to be proficient or outstanding in several categories including policy documentation, financial planning, and organization. This is the eighth consecutive year the City has received this award. 10 Responsibility and Acknowledgments The Department of Finance prepared the Comprehensive Annual Financial Report of the City of Iowa City, Iowa for the fiscal year ended June 30, 2019. The City Council, as required by law, is responsible for the complete and accurate preparation of the City's Comprehensive Annual Financial Report. I believe that the information presented is accurate in all material respects and that this report fairly presents the financial position and results of operations of the various funds of the City. The preparation of this report on a timely basis could not have been accomplished without the efficient and dedicated services of the entire staff of the City's Finance Department. I would like to express my appreciation to all members of the department who assisted and contributed to its preparation. I want to especially recognize the contributions of the City's Controller, Nicole Knudtson-Davies, Assistant Controller, Sara Sproule, Senior Accountants, TaraLynne Atkins and Angie Ogden and Senior Payroll Accountant, Chris Hurlbert. Also, I thank the Mayor, members of the City Council and the City Manager for their interest and support in planning and conducting the financial operations of the City in a dedicated, responsible, and progressive manner. Respectfully submitted, Dennis Bockenstedt Director of Finance 11 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Iowa City Iowa For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2018 Executive Director/CEO 12 Air ort Com fission Airport Airport Operations Finance City of Iowa City Organization Chart Community City Council City Attorney City lil anager City (Clerk I LDib City Attorney City Manager City Clerk Library City Attorney City Manager City Clerk Library Operations Communications Office Library Foundation Human Resources Human Rights Economic Development Fire Parks & Senior Police Recreation Center Administration Administration Emergency Operations Support Services Administration Senior Center Fire Prevention Field Operations Recreation Operations Training Park Maintenance Cemetery Administration Accounting Purchasing Revenue Risk Management Information Technology Services Neighborhood & Development Services Administration Development Services Neighborhood Services Metropolitan Planning Organization of Johnson County 13 Public Works Administration Engineering Streets Wastewater Water Resource Management Equipment Transportation Services Administration Parking Public Transportation Mayor Council Member and Mayor Pro Tem Council Member Council Member Council Member Council Member Council Member City Manager City Clerk City Attorney CITY OF IOWA CITY, IOWA LISTING OF CITY OFFICIALS June 30, 2019 ELECTED OFFICIALS Jim Throgmorton Pauline Taylor Rockne Cole John Thomas Bruce Teague Susan Mims Mazahir Salih APPOINTED OFFICIALS Geoff Fruin Kellie Fruehling Eleanor Dilkes DEPARTMENT DIRECTORS Assistant City Manager Director of Neighborhood Development Services Library Director Director of Public Works Director of Transportation Services Senior Center Coordinator Fire Chief Parks and Recreation Director Director of Finance Chief of Police 14 Ashley Monroe Tracy Hightshoe Elsworth Carman Ron Knoche Darian Nagle Gamm LaTasha DeLoach John Grier Juli Seydell Johnson Dennis Bockenstedt Jody Matherly Term Expires January 2, 2020 January 2, 2020 January 2, 2020 January 2, 2020 January 2, 2022 January 2, 2022 January 2, 2022 Date of Hire November 28, 2011 July 10, 2000 March 18, 1996 December 1, 2016 August 27, 2001 January 2, 2019 April 28, 1999 May 21, 2008 July 31, 2018 August 10, 1992 January 4, 2016 February 15, 2013 January 23, 2017 Financial Section Tabs Bohnsack & Frommelt LLP Certified Public Accountants Independent Auditor's Report To the Honorable Mayor and Members of City Council City of Iowa City, Iowa Iowa City, Iowa Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Iowa City, Iowa, as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 15 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Iowa City, Iowa, as of June 30, 2019, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, budgetary comparison information, schedule of changes in the City's total OPEB liability and related ratios, schedules of the City's proportionate share of the net pension liabilities for pension retirement systems, and schedules of the City's contributions for pension retirement systems on pages 19-29 and 82-96, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The combining and individual nonmajor fund financial statements, schedule of expenditures of federal awards as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and the other information, including the introductory and statistical sections, are presented for purposes of additional analysis and are not a required part of the basic financial statements. 16 The combining and individual nonmajor fund financial statements and schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information of the combining and individual nonmajor fund financial statements and schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 11, 2019 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. f � .►411_d= Moline, Illinois December 11, 2019 17 (This page left blank intentionally.) 18 Management's Discussion and Analysis As management of the City of Iowa City, we present this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2019. This narrative is intended to be used in conjunction with additional information that is included in the letter of transmittal, which can be found on pages 3 — 11 of this report. Financial Highlights • The assets and deferred outflows of resources of the City of Iowa City exceeded its liabilities and deferred inflows of resources at the close of the fiscal year ending June 30, 2019 by $666,361,000 (net position). Of this amount, $97,348,000 (unrestricted net position) may be used to meet the government's ongoing obligations to its citizens and creditors. • The City's total net position increased by $14,694,000 during the fiscal year. Governmental activities increased by $4,758,000 and business -type activities increased by $9,936,000. • At the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $91,749,000, a decrease of $10,061,000 in comparison with the prior year. Of this total amount, approximately $34,299,000 or 37.4% is unassigned and available for spending at the City's discretion. • At the end of the current fiscal year, the City's unassigned fund balance for the General Fund was $34,358,000 or 68.3% of total General Fund expenditures. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements; and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government -wide Financial Statements: The government -wide financial statements are designed to provide readers with a broad overview of the City's finances in a manner similar to a private -sector business. The statement of net position presents information on all of the City's assets and deferred outflows of resources, liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City include Public Safety, Public Works (roads and traffic controls), Culture and Recreation, Community and Economic Development, General Government, and Interest on long-term debt. The business -type activities of the City include Airport, Housing Authority, Parking, Sanitation, Stormwater Collection, Transit, Wastewater Treatment, and Water. The government -wide financial statements may be found on pages 30 — 33 of this report. 19 Fund Financial Statements: A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds: Governmental funds are used to account for essentially the same function reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and ou 7ows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements and is typically the basis that is used in developing the next annual budget. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison. The City has six major governmental funds: General Fund, Other Shared Revenue and Grants Fund, Employee Benefits Fund, Other Construction Fund, Bridge, Street and Traffic Control Construction Fund, and Debt Service Fund. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for these major funds. Data from all other non -major governmental funds is combined into a single aggregated presentation and are referenced under a single column as "Other Governmental Funds". Individual fund data on each of these non - major governmental funds is provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for all governmental funds as required by state statute. Budget comparisons have been provided for the Governmental funds and the Enterprise funds, to demonstrate compliance with the adopted budget. The basic governmental funds financial statements can be found on pages 34 — 37 of this report. Proprietary Funds: The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City uses enterprise funds to account for its Airport, Housing Authority, Parking, Sanitation, Stormwater Collection, Transit, Wastewater Treatment, and Water activities. Internal Service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City has four Internal Service Funds: Equipment Maintenance, Central Services, Loss Reserve, and Information Technology. Because these services predominantly benefit governmental rather than business -type functions, they have been included within governmental activities in the government -wide financial statements. Proprietary funds financial statements provide the same type of information as the government -wide financial statements, only in more detail. Parking, Transit, Wastewater Treatment, Water, Sanitation, Stormwater and Housing Authority are considered to be major funds and are reported individually throughout the report. The only non -major enterprise fund, Airport, is listed as non -major on the basic proprietary fund financial statements. Individual fund data for the Internal Service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages 38 — 40 of this report. Fiduciary Funds: Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not available to support the City's own programs and therefore are not reflected in the government -wide financial statements. The City has one fiduciary fund: Project Green, which is maintained as an agency fund. 20 The basic fiduciary funds financial statements can be found on page 41. Notes to Financial Statements: The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 42 - 81 of this report. Other Information: The combining statements referred to in the above paragraphs in connection with non - major governmental funds and internal service funds are presented immediately following the notes. Government -wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $666,361,000 at the close of the fiscal year ended June 30, 2019. By far, the largest portion of the City's net position reflect its investment in capital assets (e.g., land, building, machinery and equipment, improvements other than buildings, and infrastructure), net any related debt to acquire those assets that is still outstanding. The City uses these capital assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other resources, since the capital assets themselves cannot be used to liquidate these liabilities. City of Iowa City's Net Position June 30,2019 (amounts expressed in thousands) 21 Governmental Business -type activities activities Total 2019 2018 2019 2018 2019 2018 Current and other assets $ 187,619 $ 192,519 $ 119,256 $ 120,389 $ 306,875 $ 312,908 Capital assets 261,593 248,011 334,810 335,893 596,403 583,904 Total assets 449,212 440,530 454,066 456,282 903,278 896,812 Deferred outflows ofresources 12,722 12,114 2,843 2,806 15,565 14,920 Long-term liabilities outstanding 116,127 114,709 52,122 62,121 168,249 176,830 Current and other liabilities 16,384 14,738 4,526 6,730 20,910 21,468 Total liabilities 132,511 129,447 56,648 68,851 189,159 198,298 Deferred inflows of resources 62,452 60,984 871 783 63,323 61,767 Net position: Net investment in capital assets 208,028 203,077 304,111 294,109 512,139 497,186 Restricted 38,819 41,490 18,055 22,219 56,874 63,709 Unrestricted 20,124 17,646 77,224 73,126 97,348 90,772 Total net position $ 266,971 $ 262,213 $ 399,390 $ 389,454 $ 666,361 $ 651,667 21 A portion of the City's net position, $56,874,000 or 8.5%, represents resources that are subject to external restrictions on how they may be used. The remaining balance of the unrestricted net position, $97,348,000 or 14.6%, 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, 2019, the City is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business -type activities. The following is a more detailed review of FY19's operation. Governmental Activities: Governmental activities increased the City's net position by $4,758,000. The increase in net position of governmental activities is primarily from earnings on investments. The total revenues for governmental activities for FY19 were $97,007,000. Governmental activities are primarily funded through taxes, $64,674,000 or 66.7%, and grants and contributions, $17,282,000 or 17.8%. Taxes increased from the prior year by $2,922,000, mostly due to increased property taxes which was due to an increase in the taxable value of all property. Grants and contributions increased from prior year by $4,031,000 due mainly to state grants for street overlay projects. Expenses for governmental activities totaled $83,588,000. Governmental activities are tracked by function including Public Safety, Public Works, Community and Economic Development, Culture and Recreation, and General Government. In FY19, Public Safety accounted for the highest portion of governmental expenses, $26,265,000 or 31.4%, and increased over the prior year due to increases in salaries and benefits. Public Works expenses of $16,324,000 or 19.5% made up another large portion of the governmental expenses and increased over the prior year due mainly to expenditures related to street overlay projects. Culture and Recreation expenses of $16,009,000 or 19.2% made up the third highest portion of governmental expenses and had a slight decrease in expenses from the prior year. Business -type Activities: Business -type activities increased the City's total net position by $9,936,000. The increase in net position was primarily from the Wastewater Treatment, Water and Stormwater funds. The increase in all three funds is due primarily to transfers in of infrastructure assets constructed as part of the Iowa City Gateway Project. Wastewater also received $1,284,000 from the state for the redevelopment of the land that was the site of the former wastewater treatment plant. Revenues for business -type activities totaled $60,851,000. The primary revenue source for business -type activities is charges for services, $42,865,000 or 70.4%. In addition for FY19, the City's business type -activities had a significant portion, $14,981,000 or 24.6%, of their revenues from grants and contributions used to help fund operation and capital projects for business -type activities. The total expenses for business -type activities in FY19 were $59,576,000. Wastewater Treatment represented the highest portion of business -type activities, $11,413,000 or 19.2%, with Sanitation, $10,858,000 or 18.2%, Housing Authority, $10,170,000 or 17.1%, Water, $9,543,000 or 16.0%, and Transit, $8,833,000 or 14.8%, making up the remainder of the majority of business -type activities expenses. 22 City of Iowa City's Changes in Net Position (amounts expressed in thousands) The graphs on the following pages represent a breakdown of revenue by source and expenses by program area for governmental and business -type activities. 23 Governmental Business -type activities activities Total 2019 2018 2019 2018 2019 2018 Revenues: Program Revenues: Charges for services $ 8,279 $ 7,297 $ 42,865 $ 42,208 $ 51,144 $ 49,505 Operating grants and contributions 13,758 10,245 11,713 11,230 25,471 21,475 Capital grants and contributions 1,972 1,459 3,268 7,186 5,240 8,645 General Revenues: Property taxes 61,739 59,046 - - 61,739 59,046 Other taxes 2,935 2,706 - - 2,935 2,706 Grants and contributions not restricted to specific purposes 1,552 1,547 - - 1,552 1,547 Earnings on investments 3,257 2,368 2,166 1,496 5,423 3,864 Gain on disposal of capital assets 186 140 1 2,438 187 2,578 Other 3,329 3,656 838 456 4,167 4,112 Total revenues 97,007 88,464 60,851 65,014 157,858 153,478 Expenses: Public safety 26,265 25,191 - - 26,265 25,191 Public works 16,324 12,813 16,324 12,813 Culture and recreation 16,009 16,363 16,009 16,363 Community and economic development 16,022 12,019 16,022 12,019 General government 7,524 6,858 7,524 6,858 Interest on long-term debt 1,444 1,414 - - 1,444 1,414 Wastewater treatment - - 11,413 11,392 11,413 11,392 Water 9,543 9,472 9,543 9,472 Sanitation 10,858 9,408 10,858 9,408 Housing authority 10,170 9,535 10,170 9,535 Parking 5,461 5,590 5,461 5,590 Airport 1,466 1,680 1,466 1,680 Stormwater 1,832 1,844 1,832 1,844 Transit - - 8,833 8,071 8,833 8,071 Total expenses 83,588 74,658 59,576 56,992 143,164 131,650 Change in net position before transfers 13,419 13,806 1,275 8,022 14,694 21,828 Transfers 8,661 1,814 8,661 1,814) - - Change in net position 4,758 15,620 9,936 6,208 14,694 21,828 Net position beginning ofyear 262,213 246,593 389,454 383,246 651,667 629,839 Net position end of year $ 266,971 $ 262,213 $ 399,390 $ 389,454 $ 666,361 $ 651,667 The graphs on the following pages represent a breakdown of revenue by source and expenses by program area for governmental and business -type activities. 23 Governmental Activities FY2019 Revenue by Source Misc. Charges for Other Taxes Other 3% 7% 7% 8% Property taxes 64% Grants and Contributions 18% Business -Type Activities FY2019 Revenue by Source Grants and Misc. Other Contributions 5% 25% Charges for services 70% 24 0 Q vs c c 28,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Public Safety Governmental Activities FY2019 Expenses by Program Area (amounts expressed in thousands) Recreation Public Community and Works Econ Dev General Govt Program Area Business -Type Activities FY2019 Expenses by Program Area (amounts expressed in thousands) Interest Expense Program Area 25 Wastewater Treatment Sanitation Housing u ori Water Transit Parking Stormwater Airport Program Area 25 Financial Analysis of the Government's Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental Funds: The financial reporting focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information may be/is useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. The City implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions effective with the June 30, 2011 financial statements. Fund balances for the governmental funds are reported in classifications that comprise a hierarchy based on the extent to which the government honors constraints on the specific purposes for which amounts in those funds can be spent. As of the fiscal year ended June 30, 2019, the City's governmental funds reported combined ending fund balances of $91,749,000, a decrease of $10,061,000 in comparison with the prior year. Of this total amount, $34,299,000 constitutes unassigned fund balance, which is available to use as working capital for the General Fund since property tax revenues are received only twice a year and the remainder is available to meet the future needs of the City. The remainder of the fund balance is not available for new spending because of constraints imposed externally by creditors, grantors, contributors, or laws or regulations of other governments or constraints imposed internally on the specific purposes for which these amounts can be spent. The restricted fund balance of $52,774,000 or 57.5% contains external restraints on its use. The assigned fund balances of $3,565,000 or 3.9% has been identified by the City to be used for specific purposes. The nonspendable fund balance is $1,111,000 or 1.2%, which the City is contractually required to maintain intact or cannot be spent because it is in a nonspendable format, such as inventories. The General Fund is the chief operating fund of the City. As of the fiscal year ended June 30, 2019, the unassigned fund balance of the General Fund was $34,358,000 while General Fund's total fund balance was $40,618,000. As a measure of the General Fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 68.3% of total General Fund expenditures of $50,299,000, while total fund balance represents 80.8% of that same amount. During the current fiscal year, the fund balance of the City's General Fund increased by $2,968,000. This is due to transfers in from other funds. The fund balance in the Bridge, Street, and Traffic Control Construction Fund was $10,817,000, a decrease of $4,281,000. This fund accounts for transactions relating to the acquisition or construction of major streets, bridges, and traffic control facilities. The change in the fund balance is due to transfers out to other funds. The fund balance in the Other Construction Fund was $16,624,000, a decrease of $10,128,000. This fund accounts for the construction or replacement of other governmental general capital assets, such as administrative buildings, with various funding sources, including general obligation bonds, intergovernmental revenues, and contributions. This decrease is mainly due to $7,949,000 paid for an economic development grant. The ending fund balance of the Debt Service Fund was $9,648,000, an increase of $1,039,000, all of which is reserved for the payment of debt service (i.e. payment of general obligation principal and interest). The ending fund balance of the Employee Benefits Fund was $3,955,000, an increase of $1,108,000 due to an increase in property tax revenues. 26 Proprietary Funds: The City's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. The ending net position of the enterprise funds was $381,835,000, an increase in net position of $8,450,000. This was primarily due to capital contributions of federal and state grants to fund capital improvement projects and transfers of business -type capital assets from governmental capital project funds. Of the enterprise funds' net position, $304,111,000 is net investment in capital assets. Unrestricted net position totaled $59,669,000, an increase of $2,612,000 compared to the previous year. The Internal Service funds showed net position totaling $43,215,000 as of June 30, 2019, an increase of $2,266,000 primarily due to operating income in the Equipment Reserve Fund to build up reserves for future capital outlay. Budgetary Highlights The City presents budgetary information as allowed by GASB Statement No. 41. Budgets are based on nine functional areas as required by state statute, not by fund or fund type. The City had two budget amendments during the fiscal year. These amendments increased budgeted revenues by $11,675,000 or 7.7% to a total of $163,810,000 and the expenditure budget by $73,575,000 or 43.9% to a total of $241,145,000. These increases were due primarily to capital projects in governmental and business - type funds because of timing of completion of projects. Capital Assets and Debt Administration Capital Assets: The City's investment in capital assets for its governmental and business -type activities as of June 30, 2019 amounts to $596,403,000, 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, 2019 increased by $13,582,000 for governmental activities compared to the prior year and decreased by $1,083,000 for business - type activities from the prior year. The following table reflects the $596,403,000 investment in capital assets, net of accumulated depreciation. City of Iowa City's Capital Assets (net of depreciation) (amounts expressed in thousands) 27 Governmental Business -type Activitie s Activitie s Total 2019 2018 2019 2018 2019 2018 Land $ 30,808 $ 30,894 $ 30,316 $ 30,317 $ 61,124 $ 61,211 Buildings 38,495 38,998 66,513 69,855 105,008 108,853 Improvements other than buildings 3,501 3,766 3,906 4,220 7,407 7,986 Machinery and equipment 18,018 17,279 13,109 10,396 31,127 27,675 Infrastructure 150,288 114,792 217,222 205,809 367,510 320,601 Construction in progress 20,483 42,282 3,744 15,296 24,227 57,578 Total $ 261,593 $ 248,011 $ 334,810 $ 335,893 $ 596,403 $ 583,904 27 Major capital asset events during the current fiscal year included the following: Work was completed for the Iowa City Gateway Project, which reconstructed and elevated Dubuque Street and Park Road Bridge to provide flood protection. The construction in progress balance at the beginning of the year was $46,356,000. Additional expenses of $6,607,000 were added in FY 19. The total cost of the project that was capitalized was $52,963,000 and was funded primarily by local option sales tax. Additional funding was also received from bond sales and federal and state grants. Two large construction projects were still in progress at June 30, 2019. The first is the Public Works Facility. This project replaces the equipment storage, offices and maintenance facilities for the streets, traffic engineering, storm and sanitary sewer maintenance, refuse collection and equipment divisions. This project had current year expenditures of $6,542,000 and a construction in progress balance of $6,854,000. The other project is the Pedestrian Mall Reconstruction with current year expenditures of $5,038,000 and $6,691,000 in construction in progress. This project is part of the downtown streetscape master plan. This project updates the Black Hawk mini park and the east and west wings of the pedestrian mall. The project includes replacing brick pavers, new landscape and lighting, enhanced fountain lighting and a performance stage. Additional information on the City's capital assets can be found in Note 4 to the financial statements. Debt Administration: At the end of the fiscal year, the City had total bonded debt outstanding of $87,540,000. Of this amount, $52,470,000 comprises debt backed by the full faith and credit of the City. $3,777,000 or 7.2% of these bonds is debt that will be paid with Tax Increment Financing revenues. $35,070,000 represents revenue bonds secured solely by specific revenue sources. The City issued $12,535,000 of General Obligation bonds during FY 19. This increase in debt was offset by the retirement of debt for a net decrease of City's total bonded debt by $7,190,000. City of Iowa City's Outstanding Debt General Obligation and Revenue Bonds (amounts expressed in thousands) Governmental Business -type Activities Activities Total 2019 2018 2019 2018 2019 2018 General obligation bonds $ 52,470 $ 51,880 $ - $ - $ 52,470 $ 51,880 Revenue bonds 14,930 15,065 20,140 27,785 35,070 42,850 Total $ 67,400 $ 66,945 $ 20,140 $ 27,785 $ 87,540 $ 94,730 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, 2019 were as follows: General obligation bonds Wastewater treatment revenue bonds Water revenue bonds Aaa Aa2 Aa2 The City continues to operate well under the State debt capacity debt limitations. State statute limits the amount of debt outstanding to 5% of the assessed value of all taxable property in Iowa City. Debt subject to the debt limit includes general obligation debt and revenue bonds issued pursuant to Iowa Code Chapter 403 (tax increment). The current debt limitation for the City is $295,383,000. With outstanding debt applicable to this limit of $95,957,000 we are utilizing 32.5% of this limit. More detailed information on debt administration is provided in Note 6 of the financial statements. 28 Economic Factors and Next Year's Budget and Rates The City expects continued constraints by the State's property tax formula. The State passed property tax reform, which will negatively affect the City's general operating funds. Without the potential for new revenue sources, like those mentioned above, the City's opportunities for new initiatives are limited. The Council has established a budget where revenues exceed expenditures by $747 thousand in the General Fund for FY20 that strives to maintain current service delivery levels. The tax levy rate per $1,000 of assessed valuation for FY20 is provided below: General Levy $ 8.100 Debt Service Levy 2.979 Employee Benefits Levy 3.244 Transit Levy 0.950 Liability Insurance Levy 0.290 Library Levy 0.270 Total City Levy $ 15.833 Requests for Information This report is designed to provide a general overview of the City of Iowa City's finances for all of those with an interest in the government's finances. Questions concerning any of the information provided in this report, or requests for additional financial information should be addressed to City of Iowa City, Finance Department, 410 East Washington Street, Iowa City, IA, 52240. 29 CITY OF IOWA CITY, IOWA STATEMENT OF NET POSITION June 30, 2019 (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 item Inventories Assets held for resale Restricted assets: Equity in pooled cash and investments Capital assets: Land and construction in progress Other capital assets (net of accumulated depreciation) Total assets Deferred Outflows of Resources Pension related deferred outflows OPEB related deferred outflows Total deferred outflows of resources Liabilities Accounts payable Contracts payable Accrued liabilities Interest payable Deposits Advances from grantors Due to other governments Notes payable Noncurrent liabilities: Due within one year: Employee vested benefits Capital lease obligation Bonds payable Due in more than one year: Employee vested benefits Net pension liability Other post employment benefits liability Notes payable Capital lease obligation Bonds payable Landfill closure/post-closure liability Total liabilities Governmental Business -type Activities Activities Total $ 111,645 $ 63,383 $ 175,028 60,529 - 60,529 941 3,699 4,640 967 612 1,579 5,209 373 5,582 (20,055) 20,055 - 7,584 224 7,808 907 59 966 650 701 1,351 689 - 689 18,553 30,150 48,703 51,291 34,060 85,351 210,302 300,750 511,052 449,212 454,066 903,278 11,255 2,276 13,531 1,467 567 2,034 12,722 2,843 15,565 3,399 973 4,372 5,864 699 6,563 5,231 507 5,738 151 371 522 1,008 1,924 2,932 98 - 98 31 52 83 602 - 602 1,308 425 1,733 - 567 567 11,534 4,369 15,903 1,012 302 1,314 38,890 8,600 47,490 6,401 2,476 8,877 211 - 211 - 8,846 8,846 56,771 16,786 73,557 - 9,751 9,751 $ 132,511 $ 56,648 $ 189,159 30 (continued) CITY OF IOWA CITY, IOWA STATEMENT OF NET POSITION (continued) June 30, 2019 (amounts expressed in thousands) Net position Net investment in capital assets Governmental Business -type 512,140 Restricted for or by: Activities Activities Total Deferred inflows of resources 4,249 - 4,249 Unavailable revenues: 17,020 - 17,020 Pension related deferred inflows $ 1,940 $ 611 $ 2,551 OPEB related deferred inflows 216 82 298 Deferred amount on refunding - 178 178 Succeeding year property taxes 60,296 - 60,296 Total deferred inflows of resources 62,452 871 63,323 Net position Net investment in capital assets 208,028 304,112 512,140 Restricted for or by: Employee benefits 4,249 - 4,249 Capital projects 17,020 - 17,020 Debt service 9,514 - 9,514 Police 214 - 214 Other purposes 4,359 - 4,359 Bond ordinance - 9,541 9,541 State statute - 4,877 4,877 Future improvements - 391 391 Grant agreement 3,463 3,246 6,709 Unrestricted 20,124 77,223 97,347 Total net position $ 266,971 $ 399,390 $ 666,361 The notes to the financial statements are an integral part of this statement. 31 32 CITY OF IOWA CITY, IOWA STATEMENT OF ACTIVITIES For the Year Ended June 30, 2019 (amounts expressed in thousands) The notes to the financial statements are an integral part of this statement. 33 Net (Expense) Revenue and Program Revenues Changes in Net Position Operating Capital Charges Grants and Grants and Governmental Business -type Functions/Programs: Expenses for Services Contributions Contributions Activities Activities Total Governmental activities: Public safety $ 26,265 $ 4,870 $ 533 $ - $ (20,862) $ $ (20,862) Public works 16,324 290 11,867 1,651 (2,516) (2,516) Culture and recreation 16,009 854 - 321 (14,834) (14,834) Community and economic development 16,022 548 1,358 - (14,116) (14,116) General government 7,524 1,717 - (5,807) (5,807) Interest on long-term debt 1,444 - - - (1,444) (1,444) Total governmental activities 83,588 8,279 13,758 1,972 (59,579) (59,579) Business -type activities: Wastewater treatment 11,413 12,831 - 1,827 3,245 3,245 Water 9,543 9,640 - 488 585 585 Sanitation 10,858 10,017 104 13 (724) (724) Housing authority 10,170 295 9,443 - (432) (432) Parking 5,461 5,982 - - 521 521 Airport 1,466 361 14 38 (1,053) (1,053) Stormwater 1,832 1,568 - 902 638 638 Transit 8,833 2,171 2,152 - (4,510) (4,510) Total business -type activities 59,576 42,865 11,713 3,268 (1,730) (1,730) Total $ 143,164 $ 51,144 $ 25,471 $ 5,240 (59,579) (1,730) (61,309) General revenues: Property taxes, levied for general purposes 61,739 61,739 Hotel/motel tax 1,302 1,302 Gas and electric tax 668 668 Utility franchise tax 965 965 Grants and contributions not restricted to specific purposes 1,552 1,552 Earnings on investments 3,257 2,166 5,423 Gain on disposal of capital assets 186 1 187 Miscellaneous 3,329 838 4,167 Transfers (8,661) 8,661 - Total general revenues and transfers 64,337 11,666 76,003 Changes in net position 4,758 9,936 14,694 Net position beginning of year 262,213 389,454 651,667 Net position end of year $ 266,971 $ 399,390 $ 666,361 The notes to the financial statements are an integral part of this statement. 33 The notes to the financial statements are an integral part of this statement 34 CITY OF IOWA CITY, IOWA BALANCESHEET GOVERNMENTAL FUNDS June 30, 2019 (amounts expressed in thousands) Special Revenue Capital Projects Bridge, Other Street, and Shared Traffic Other Revenue and Employee Other Control Debt Governmental General Grants Benefits Construction Construction Service Funds Total Assets Equity in pooled cash and investments $ 38,979 $ 3,112 $ 3,831 $ 15,741 $ 4,831 $ 9,069 $ 1,299 $ 76,862 Receivables: Property tax 36,301 - 12,254 - - 11,597 377 60,529 Accounts and unbilled usage 491 8 - - 150 - - 649 Interest 360 7 130 78 119 11 705 Notes 1,329 - - - 323 3,557 5,209 Advances to other funds 56 - - - - 97 - 153 Due from other governments 2,131 714 321 412 3,846 - 131 7,555 Inventories - 135 - - - - - 135 Prepaid item 818 - 89 907 Assets held for resale 689 - - - - 689 Restricted assets: Equity in pooled cash and investments 2,028 1,784 7,256 7,485 18,553 Total assets $ 83,182 $ 5,760 $ 16,495 $ 23,539 $ 16,390 $ 21,205 $ 5,375 $ 171,946 Liabilities, Deterred Inflows of Resources and Fund Balances Liabilities: Accounts payable $ 1,497 $ 346 $ 7 $ 823 $ 44 $ 4 $ 50 $ 2,771 Contracts payable - - - 3,180 2,684 - - 5,864 Accrued liabilities 1,466 99 2 - 7 22 1,596 Advances from other funds - 97 - 2,500 - - 56 2,653 Due to other governments 31 - - - - - - 31 Interest payable 17 - - - - - - 17 Notes payable 602 - 602 Liabilities payable from restricted assets: Deposits 1,004 4 1,008 Advances from grantors 94 4 98 Total liabilities 4,711 550 9 6,503 2,735 4 128 14,640 Deferred inflows of resources Unavailable revenues: Succeeding year property taxes 36,176 - 12,210 - - 11,553 357 60,296 Grants 34 13 - 321 2,838 - - 3,206 Other 1,643 321 91 2,055 Total deferred inflows of resources 37,853 13 12,531 412 2,838 11,553 357 65,557 Fund balances: Nonspendable 887 135 89 - - - - 1,111 Restricted 1,808 5,080 3,866 16,624 10,817 9,674 4,905 52,774 Assigned 3,565 - - - - - - 3,565 Unassigned 34,358 (18) (26) (15) 34,299 Total fund balances 40,618 5,197 3,955 16,624 10,817 9,648 4,890 91,749 Total liabilities, deferred inflows of resources and fund balances $ 83,182 $ 5,760 $ 16,495 $ 23,539 $ 16,390 $ 21,205 $ 5,375 $ 171,946 The notes to the financial statements are an integral part of this statement 34 CITY OF IOWA CITY RECONCILIATION OF THE BALANCE SHEET OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION June 30, 2019 (amounts expressed in thousands) Total governmental fund balances $ 91,749 Amounts reported for governmental activities in the statement of net position are different because: Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. Other long-term assets are not available to pay for current period expenditures and therefore are unavailable in the funds: Grants and other receivables - Earned but unavailable. Capital assets used in governmental activities are not current financial resources and therefore are not reported in the funds. Pension and OPEB related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period and therefore are not reported in the funds. Deferred outflows of resources Deferred inflows of resources Net pension liabilities are not due and payable in the current period and therefore are not reported in the funds. Accrued compensated absences are not due and payable in the current period and therefore are not reported in the funds. Accrued post employment benefit liabilities are not due and payable in the current period and therefore are not reported in the funds. Bonds payable are not due and payable in the current period and therefore are not reported in the funds. Notes payable are not due and payable in the current period and therefore are not reported in the funds. Accrued interest on bonds Internal balance due to integration of internal service funds Total net position of governmental activities The notes to the financial statements are an integral part of this statement. 35 43,215 5,261 248,429 $ 12,268 (2,043) 10,225 (37,435) (2,196) (6,072) (68,305) (211) (134) (17,555) $ 266,971 CITY OF IOWA CITY, IOWA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended June 30, 2019 (amounts expressed in thousands) Special Revenue Capital Projects Bridge, Other Street, and Shared Traffic Other Revenue and Employee Other Control Debt Governmental General Grants Benefits Construction Construction Service Funds Total Revenues Current: (under) expenditures Taxes $ 37,426 $ $ 12,233 $ $ $ 12,085 $ 2,928 $ 64,672 Licenses and permits 2,981 - - - - - - 2,981 Intergovernmental 4,099 8,820 314 42 1,719 302 1,532 16,828 Charges for services 1,595 442 299 155 70 129 - 2,690 Fines and forfeits 776 - - - - - - 776 Use of money and property 1,599 89 - 350 207 242 77 2,564 Miscellaneous 1,950 108 Total expenditures 33 7 807 23,505 163 2,261 Total revenues 50,426 9,459 12,846 580 2,003 12,758 4,700 92,772 Expenditures Current: (under) expenditures 127 1,831 12,039 (22,925) Public safety 23,858 - 432 5 - 24,295 Public works 1,922 6,059 - 782 2,131 10,894 Culture and recreation 13,096 - 613 - - 13,709 Community and economic development 3,561 1,064 - 8,276 - 2,822 15,723 General government 6,144 - 375 1 59 - 6,579 Debt service: - 47 34 - - 81 Principal - 1,451 - - 12,080 12,080 Interest - - - 1,589 1,589 Capital outlay 1,718 505 13,828 6,581 22,632 Total expenditures 50,299 7,628 807 23,505 8,712 13,728 2,822 107,501 Excess (deficiency) of revenues over (under) expenditures 127 1,831 12,039 (22,925) (6,709) (970) 1,878 (14,729) Other Financing Sources (Uses) Issuance of debt - - - 7,267 5,218 50 - 12,535 Sale of capital assets 758 - - - - - - 758 Premiums on issuance of bonds - - - 47 34 - - 81 Transfers in 11,548 1,451 5,967 4,226 1,959 512 25,663 Transfers out (9,465) (3,321) (10,931) (484) (7,050) (3,118) (34,369) Total other financing sources and (uses) 2,841 (1,870) (10,931) 12,797 2,428 2,009 (2,606) 4,668 Net change in fund balances 2,968 (39) 1,108 (10,128) (4,281) 1,039 (728) (10,061) Fund Balances, Beginning 37,650 5,236 2,847 26,752 15,098 8,609 5,618 101,810 Fund Balances, Ending $ 40,618 $ 5,197 $ 3,955 $ 16,624 $ 10,817 $ 9,648 $ 4,890 $ 91,749 The notes to the financial statements are an integral part of this statement. 36 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, 2019 (amounts expressed in thousands) Net change in fund balances - total governmental funds $ (10,061) 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 $ 19,976 Capital assets contributed 892 Depreciation expense (7,593) 13,275 Bond proceeds are reported as other financing sources in governmental funds and thus contribute to the change in fund balance. In the statement of net position, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds but reduces the liability in the statement of net position. Debt issued (12,535) Premium on bonds issued (81) Repayments of debt 12,080 Amortization of premium 150 (386) Because some revenues will not be collected for several months after the City's year end, they are not considered available revenues in the governmental funds. 2,463 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 (70) Pension expense (518) Change in accrued post employment benefit liability (69) Change in accrued interest on debt (5) In the statement of activities, only the gain on the sale of the capital assets is recognized, whereas in the governmental funds, the proceeds from the sale increased financial resources. Thus, the change in net position differs from the change in fund balance by the cost of the capital asset sold. (651) 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. 780 Change in net position of governmental activities $ 4,758 The notes to the financial statements are an integral part of this statement. 37 Assets Current assets: Equity in pooled cash and investments Receivables (net of allowance for uncollectibles) Accounts and unbilled usage Interest Notes Due from other governments Inventories Prepaid item Total current assets Noncurrent assets: Restricted assets: Equity in pooled cash and investments Advances to other funds Capital assets: Land Buildings Improvements other than buildings Machinery and equipment Infrastructure Accumulated depreciation Construction in progress Total noncurrent assets Total assets Deferred Outflows of Resources Pension related deferred outflows OPEB related deferred outflows Total deferred outflows of resources Liabilities Current liabilities: Accounts payable Contracts payable Accrued liabilities Employee vested benefits Due to other governments Interest payable Capital lease obligation Bonded debt payable (net of unamortized premium and discounts) Total current liabilities Noncurrent liabilities: Liabilities payable from restricted assets: Deposits Advances from other funds Employee vested benefits Capital lease obligation Bonded debt payable (net of unamortized premium and discounts) Net pension liability Other post employment benefits liability Landfill closure/postclosure liability Total noncurrent liabilities Total liabilities Deferred Inflows of Resources Pension related deferred inflows OPEB related deferred inflows Deferred amount on refunding Total deferred inflow of resources Net Position CITY OF IOWA CITY, IOWA STATEMENT OF NET POSITION PROPRIETARY FUNDS June 30, 2019 (amounts expressed in thousands) Governmental Business -type Activities - Enterprise Funds Activities - Internal Wastewater Housing Nonmajor Service Parking Transit Treatment Water Sanitation Stormwater Authority Airport Total Funds $ 11,817 $ 7,247 $ 18,008 $ 8,886 $ 11,395 $ 1,747 $ 4,081 $ 202 $ 63,383 $ 34,783 18 33 1,576 1,045 835 167 1 24 3,699 292 73 42 165 76 177 12 65 2 612 262 - - - - - - 373 - 373 - - 56 1 2 81 - 70 14 224 29 347 - 354 - - - - 701 515 11 11 11 11 15 59 11,908 7,736 19,761 10,374 12,499 1,926 4,590 257 69,051 35,881 291 7 6,249 4,813 14,644 - 4,038 108 30,150 - - - - - 3,923 - - - 3,923 - 3,489 2,630 759 6,296 2,264 2,264 620 11,995 30,317 45 41,647 15,399 36,858 24,019 5,467 - 5,338 5,458 134,186 1,481 328 - 7,261 2,742 411 - 9 478 11,229 50 1,622 15,154 9,700 11,621 294 27 88 293 38,799 22,019 - 955 158,260 69,068 19,435 65,041 - 17,868 330,627 3,040 (21,902) (16,382) (84,715) (41,494) (17,995) (16,234) (4,654) (10,715) (214,091) (13,672) 11,368 3,267 1,679 1,074 11,864 990 1,511 75 3,743 201 25,475 17,763 136,051 78,139 28,443 52,088 5,439 25,485 368,883 13,164 37,383 25,499 155,812 88,513 40,942 54,014 10,029 25,742 437,934 49,045 217 638 359 445 422 29 152 14 2,276 378 57 178 78 103 118 3 27 3 567 76 274 816 437 548 540 32 179 17 2,843 454 108 202 182 268 160 1 25 2 543 65 - 40 48 164 66 91 96 9 37 132 54 81 85 2 - - 3 20 1 - 31 - 210 130 - - 567 - - - - _ - 2,774 1,595 - 816 500 3,832 2,250 342 52 48 4 973 628 - 24 699 - 30 3 507 3,635 31 3 425 70 28 - 52 - - 371 - 1,423 567 26 _ 4,369 59 137 34 7,963 4,333 1 6 - 1,109 8 - 792 8 1,924 - 1,423 - - - - - - - 1,423 - 26 90 39 59 61 2 23 2 302 54 8,846 - - - - - - - 8,846 - - - 7,914 8,872 - - - - 16,786 - 822 2,394 1,409 1,707 1,530 108 578 52 8,600 1,455 250 777 343 448 514 13 118 13 2,476 329 9,751 9,751 11,368 3,267 9,705 12,195 11,864 123 1,511 75 50,108 1,838 12,184 3,767 13,537 14,445 12,206 175 1,648 109 58,071 6,171 58 170 100 121 109 8 41 4 611 103 8 26 12 15 17 - 4 - 82 10 99 79 178 66 196 211 215 126 8 45 4 871 113 Net investment in capital assets 15,771 17,756 119,015 62,828 9,876 52,088 1,401 25,377 304,112 13,164 Restricted by bond ordinance - - 6,036 3,505 - - - - 9,541 - Restricted by state statute - - - 4,877 - - - 4,877 - Restricted for future improvements 291 - - - - - - 100 391 - Restricted by grant agreement - - - - - - 3,246 - 3,246 - Unrestdcted 9,345 4,596 17,450 8,068 14,397 1,775 3,868 169 59,668 30,051 Total net position $ 25,407 $ 22,352 $ 142,501 $ 74,401 $ 29,150 $ 53,863 $ 8,515 $25,646 $ 381,835 $ 43,215 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds. 17,555 Net position of business -type activities $ 399,390 The notes to the financial statements are an integral part of this statement 38 The notes to the financial statements are an integral part of this statement 39 CITY OF IOWA CITY, IOWA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS For the Year Ended June 30, 2019 (amounts expressed in thousands) Governmental Business -type Activities - Enterprise Funds Activities - Internal Wastewater Housing Nonmajor Service Parking Transit Treatment Water Sanitation Stormwater Authori Airport Total Funds Operating Revenues: Charges for services $ 5,982 $ 2,171 $ 12,831 $ 9,640 $10,017 $ 1,568 $ 295 $ 361 $42,865 $ 20,092 Miscellaneous 34 78 193 20 98 5 128 2 558 - Total operating revenues 6,016 2,249 13,024 9,660 10,115 1,573 423 363 43,423 20,092 Operating Expenses: Personal services 1,750 4,165 3,030 3,650 3,216 265 931 83 17,090 2,377 Commodities 342 923 1,537 1,251 1,258 103 265 39 5,718 2,490 Services and charges 1,632 2,471 2,273 1,987 5,428 159 8,850 350 23,150 12,413 3,724 7,559 6,840 6,888 9,902 527 10,046 472 45,958 17,280 Depreciation 1,277 1,208 4,487 2,468 1,645 1,302 119 1,008 13,514 2,018 Total operating expenses 5,001 8,767 11,327 9,356 11,547 1,829 10,165 1,480 59,472 19,298 Operating income (loss) 1,015 (6,518) 1,697 304 (1,432) (256) (9,742) (1,117) (16,049) 794 Nonoperating Revenues (Expenses): Gain (loss) on disposal of capital assets - (4) - 1 (5) - - (8) (29) Insurance recoveries - - - 280 - 280 - Operating grants - 2,152 - - 104 9,443 14 11,713 - Interest income 189 146 524 418 705 42 135 7 2,166 692 Interest expense (468) - (131) (218) - - - - (817) - Total nonoperating revenues (expenses) (279) 2,294 393 201 804 42 9,858 21 13,334 663 Income (loss) before capital contributions and transfers 736 (4,224) 2,090 505 (628) (214) 116 (1,096) (2,715) 1,457 Capital contributions - - 1,827 488 13 902 - 38 3,268 - Transfers in 15 3,564 2,145 2,638 5 2,143 106 100 10,716 1,233 Transfers out - (15) (793) (671) (523) (769) (48) - (2,819) (424) Change in net position 751 (675) 5,269 2,960 (1,133) 2,062 174 (958) 8,450 2,266 Net Position, Beginning 24,656 23,027 137,232 71,441 30,283 51,801 8,341 26,604 40,949 Net Position, Ending $ 25,407 $ 22,352 $142,501 $74,401 $29,150 $ 53,863 $ 8,515 $ 25,646 $ 43,215 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 1,486 Change in net position ofbusiness-type activities $ 9,936 The notes to the financial statements are an integral part of this statement 39 Cash Flows From Operating Activities Receipts from customers and users Payments to suppliers Payments to employees Net cash flows from (used for) 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 Repayment of advances to other funds Net cash flows from (used for) noncapital financing activities Cash Flows From Capital and Related Financing Activities CITY OF IOWA CITY, IOWA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended June 30, 2019 (amounts expressed in thousands) Governments] Business -type Activities - Enterprise Funds Activities - Intemal Wastewater Housing Nonmajor Service Parking Transit Treatment Water Sanitation Sumarwater Authority Airport Total Funds $ 6,012 $ 2,291 $ 13,016 $ 9,875 $ 9,940 $ 1,570 $ 438 $ 362 $ 43,504 $ 19,917 (1,996) (4,798) (3,698) (3,300) (6,211) (252) (9,126) (373) (29,754) (13,836) (1,774) (4,139) (2,981) (3,545) (3,278) (289) (929) (82)1( 7,017) (2,266) 2,242 (6,646) 6,337 3,030 451 1,029 (9,617) (93) (3,267) 3,815 - 2,157 - - 106 - 9,407 12 11,682 - 15 3,564 2 112 5 1 106 100 3,905 - - (15) (793) (658) (523) (769) (48) - (2,806) (424) - - - - - 24 - 24 - - - - - (2,500) - - - (2,500) - 243 - - - 243 - (243) - - - - - - - (243) (228) 5,706 (791) (546) (2,669) (768) 9,489 112 10,305 (424) Capital grants received - 1,114 1,284 - 13 - - 43 2,454 - Acquisition and construction of property and 41 128 7 2,201 equipment (54) (57) (1,261) (837) (2,015) (105) (1) (119) (4,449) (2,028) Proceeds from sale of property - - - 1 - - - - 1 256 Proceeds from insurance recoveries - - - - - - 280 - 280 - Principal paid on capital lease obligation (2,545) - - - - - - - (2,545) - Interest paid on capital lease obligation (477) - - - - - - - (477) - Principal paid on bonded debt - - (6,135) (1,510) - - - - (7,645) - Interest paid on bonded debt - - (515) (269) - - - - (784) Net cash flows used for capital and related - $ 426 $ 21 Capital grants not yet received $ - financing activities (3,076) 1,057 (6,627) (2,615) (2,002) (105) 279 (76)1( 3,165) (1,772) Cash Flows From Investing Activities Interest on investments 198 138 491 444 754 41 128 7 2,201 672 Net increase (decrease)in cash and cash equivalents (864) 255 (590) 313 (3,466) 197 279 (50) (3,926) 2,291 Cash and Cash Equivalents, Beginning 12,972 6,999 24,847 13,386 29,505 1,550 7,840 360 97,459 32,492 Cash and Cash Equivalents, Ending $ 12,108 $ 7,254 $ 24,257 $13,699 $ 26,039 $ 1,747 $ 8,119 $ 310 $ 93,533 $ 34,783 Reconciliation of operating income (loss) - $ - $ 426 $ 21 Capital grants not yet received $ - $ - $ - $ - $ 2 $ - $ - $ - $ 2 to net cash flows from (used for) operating activities: Operating grants not yet received $ - $ - $ - $ - $ - $ - $ 70 $ 14 $ 84 $ - The notes to the financial statements are an integral part of this statement. Operating income (loss) $ 1,015 $ (6,518) $ 1,697 $ 304 $ (1,432) $ (256) $ (9,742) $ (1,117) $(16,049) $ 794 Adjustments to reconcile operating income (loss) to net cash flows from (used for) operating activities: Depreciation expense 1,277 1,208 4,487 2,468 1,645 1,302 119 1,008 13,514 2,018 Changes in: Receivables: Accounts and unbilled usage (4) 48 (7) 67 (142) (3) 2 - (39) (197) Due from other governments - (6) (1) 56 (34) - - - 15 22 Inventories - (22) - 54 - - - - 32 6 Prepaid item - 8 8 8 7 - - 7 38 - Accounts payable (22) (1,377) 102 (117) (24) 10 22 9 (1,397) 87 Accrued liabilities 2 13 (2) 6 10 1 (1) (1) 28 973 Employee vested benefits (1) 8 (10) 2 2 2 (3) 1 1 10 Due to other governments - (13) 2 (7) - - (33) - (51) - Deposits - - - 92 1 - 13 (1) 105 - Net pension liability (72) (118) 5 27 (148) (35) (24) (1) (366) 37 Deferred outflows of resources 2 (23) 5 (14) (18) 7 5 (1) (37) (7) Deferred inflows ofresources 9 34 1 19 17 (1) 8 1 88 24 Other post employment benefits liability 36 112 50 65 75 2 17 2 359 48 Landfill closure/postclosure liability 492 492 Total adjustments 1,227 (128) 4,640 2,726 1,883 1,285 125 1,024 12,782 3,021 Net cash flows from (used for) operating activities $ 2,242 $(6,646) $ 6,337 $ 3,030 $ 451 $ 1,029 $ (9,617) $ (93) $ (3,267) $ 3,815 Noncash Investing, Capital, and Financing Activities: Contributions of capital assets from government and others $ - $ - $ 2,686 $ 3,014 $ - $ 3,044 $ - $ - $ 8,744 $ 1,233 Contributions of capital assets to government and others $ - $ - $ - $ 13 $ 413 $ - $ - $ - $ 426 $ 21 Capital grants not yet received $ - $ - $ - $ - $ 2 $ - $ - $ - $ 2 $ - Operating grants not yet received $ - $ - $ - $ - $ - $ - $ 70 $ 14 $ 84 $ - The notes to the financial statements are an integral part of this statement. 40 CITY OF IOWA CITY STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES June 30, 2019 (amounts expressed in thousands) Agency Funds Assets Equity in pooled cash and investments $ 121 Interest receivable 1 Total assets $ 122 Liabilities Accounts payable $ 30 Due to agency 92 Total liabilities $ 122 The notes to the financial statements are an integral part of this statement. 41 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS June 30, 2019 1. Accounting Policies The City of Iowa City, Iowa, (the City) was incorporated April 6, 1853, and operates under the Council/Manager form of government. The City provides a broad range of services to its citizens including general government, public safety, streets, parks, and cultural facilities. It also operates an airport, a mass transportation system, parking facilities, water treatment, wastewater treatment, storm water collection, sanitation collection and disposal (including landfill operations) and a housing authority. The financial statements of the City have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant accounting policies of the City are described below. The Reporting Entity For financial reporting purposes, the City includes all of its funds, organizations, agencies, boards, commissions, and authorities. The City has also considered all potential component units for which it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete. The Governmental Accounting Standards Board has set forth criteria to be considered in determining financial accountability. These criteria include appointing a voting majority of an organization's governing body, and (1) the ability of the City to impose its will on that organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial burdens on the City. There were no component units required to be included. Government -Wide and Fund Financial Statements The government -wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the non -fiduciary activities of the primary government. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported as general revenues. As a general rule, the effect of inter -fund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between the City's water and sewer function and various other functions of the government. Eliminations of these charges would distort the direct costs and program revenues reported for the various functions concerned. 42 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Description of Funds These financial statements include all funds owned or administered by the City or for which the City acts as custodian. The accounts of the City are organized on the basis of funds, each of which is considered to be a separate accounting entity. The fund categories are governmental, proprietary, and fiduciary. Each fund is accounted for by providing a separate set of self -balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position, revenues, and expenditures or expenses, as appropriate. The individual funds account for the governmental resources allocated to them for the purpose of carrying on specific activities in accordance with laws, regulations, or other restrictions. Basis of Accounting The accounting and financial reporting treatment applied to a fund is determined by its "measurement focus." The government -wide financial statements and proprietary funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Agency funds do not have a measurement focus and use the accrual basis of accounting. Under the accrual method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. All governmental funds are accounted for using a current financial resources measurement focus, which generally includes only current assets and current liabilities on the balance sheet. The modified accrual basis of accounting is used for these funds. Under the modified accrual basis, revenue is recognized when susceptible to accrual, which is in the period in which it becomes both available (collectible within the current period or soon thereafter to be used to pay liabilities of the current period) and measurable (the amount of the transaction can be determined). Revenue accrued includes property taxes, intergovernmental revenue, and interest earned on investments (if they are collected within 60 days after the year-end). Expenditures are recorded when the related fund liability is incurred. Principal and interest on long-term debt, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. The City reports the following major governmental funds: The General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Other Shared Revenue and Grants Fund is used to account for revenue from various sources, primarily road use tax monies from the State of Iowa and reimbursable programs funded by federal and state grants. The Employee Benefits Fund is used to account for the employee benefits related to those employees who are paid through governmental fund types, which are funded by a separate property tax levy. 43 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 The Other Construction Fund accounts for the construction or replacement of other City general fixed assets, such as administrative buildings with various funding sources, including general obligation bonds, intergovernmental revenues, and contributions. The Bridge, Street, and Traffic Control Construction Fund accounts for the construction or replacement of infrastructure fixed assets, such as streets, bridges, dams, sidewalks, and lighting systems. The Debt Service Fund accounts for the accumulation of resources for the payment of general long- term debt principal, interest, and related costs. The City reports the following major proprietary funds: The Parking Fund is used to account for the operation and maintenance of the "on" and "off' street public parking facilities. The Transit Fund is used to account for the operation and maintenance of the public transportation system. The Wastewater Treatment Fund is used to account for the operation and maintenance of the wastewater treatment facility and sanitary sewer system. The Water Fund is used to account for the operation and maintenance of the water system. The Sanitation Fund is used to account for the operation and maintenance of the solid waste collection system and landfill. The Stormwater Fund is used to account for the operation and maintenance of the stormwater utility system. The Housing Authority Fund is used to account for the operations and activities of the City's low and moderate income housing assistance and public housing programs. The City has one nonmajor enterprise fund, the Airport Fund is used to account for the operation and maintenance of the airport facility. Additionally, the City reports internal service funds to account for goods and services provided by one department to other City departments on a cost reimbursement basis. The funds in this category are the Equipment Maintenance Fund, Central Services Fund, Loss Reserve Fund, and the Information Technology Fund. The City also reports fiduciary funds which are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City has one fiduciary fund which is maintained as an agency fund, with no attempt to create an ongoing fund balance. The fund in this category is Project Green, which accounts for donations that are received to plant and develop yards and lawns, both public and private, within Iowa City. 44 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise funds and of the City's internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. Uses of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue, expenditures and expenses, as appropriate, during the reporting period. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of other post employment benefit obligation, net pension liability, landfill closure and post -closure care costs, total capacity of the landfill at closure, and calculation of the costs of claims incurred, but not reported. Cash and Investments The City maintains one primary demand deposit account through which the majority of its cash resources are processed. Substantially all investment activity is carried on by the City in an investment pool, except for those funds required to maintain their investments separately. The earnings on the pooled investments are allocated to the funds on a systematic basis. All investments are stated at fair value except for the Iowa Public Agency Investment Trust (IPAIT) which is valued at amortized cost pursuant to Rule 2a-7 under the Investment Company Act of 1940. For the purpose of the Statement of Cash Flows, restricted and non -restricted investments with a maturity of three months or less when purchased are considered cash equivalents. Receivables and Revenue Recognition Property tax receivable is recognized in governmental funds on the levy or lien date, which is the date that the tax asking is certified by the City to the County Board of Supervisors. Current year delinquent property tax receivable represents unpaid taxes from the current year. The succeeding year property tax receivable represents taxes certified by the City to be collected in the next fiscal year for the purposes set out in the budget for the next fiscal year. By statute, the City is required to certify its budget to the County Auditor by March 15 of each year for the subsequent fiscal year. However, by statute, the tax asking and budget certification for the following fiscal year becomes effective on the first day of that year. Although the succeeding year property tax receivable has been recorded, it will not be recognized as revenue until the year for which it is levied. Federal and state grants are recorded as receivables and the revenue is recognized during the period in which the City fulfills the requirements for receiving the grant awards, as long as the susceptible to accrual criteria are met. 45 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Income from investments in all fund types and from charges for services in proprietary fund types is recognized when earned. Licenses and permits, fines and forfeitures, fees and refunds, charges for services (in governmental fund types), miscellaneous, and other revenues are recorded as revenue when received in cash because they are generally not measurable until actually received. Inventories Inventories are recognized only in those funds in which they are material to the extent of affecting operations. For the City, these are the Other Shared Revenue and Grants Fund, Transit Fund, Water Fund, and the Equipment Maintenance Fund. Inventories of materials and supplies are determined by actual count and priced on the FIFO method. Capital Assets Capital assets, which include property, buildings, equipment, and infrastructure assets (e.g., roads, bridges, water mains, and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. The City follows the policy of not requiring capitalization of an asset with an initial, individual cost of less than $50,000 for infrastructure, $25,000 for buildings and improvements, and $5,000 for equipment assets. Such assets are recorded at original purchase cost or at acquisition value at the date of donation when received as donated properties. Depreciation is computed using the straight-line method over the following estimated useful lives: Infrastructure 3 — 100 years Buildings and structures 20 — 50 years Improvements other than buildings 10 — 50 years Vehicles 2 — 20 years Other equipment 3 — 30 years Deferred Outflows of Resources Deferred outflows of resources represent a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (expense/expenditure) until then. Deferred outflows of resources consist of unrecognized items not yet charged to pension and OPEB expense and contributions from the employer after the measurement date but before the end of the employer's reporting period. Bond Premiums and Discounts Debt issued at a premium or discount is recorded net of the unamortized premium or discount. In the governmental funds, premiums and discounts are recorded entirely as other financing sources or uses in the year of issuance. In the proprietary funds and the government -wide statements, they are amortized over the life of the bonds. 46 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Compensated Absences Permanent City employees accumulate vacation and sick leave hours for subsequent use or for payment upon death, resignation, or retirement. The City pays its employees (except firefighters) one-half of the accumulated sick leave at the time of termination on the basis of the employee's then effective hourly base salary, provided that the dollar amount of the payment may be up to, but not exceed, the amount that an employee would be paid if the employee had terminated on June 28, 1985. Employees hired on or after June 29, 1985, are not eligible for payment of accumulated sick leave upon termination, death, or retirement. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Iowa Public Employees' Retirement System and the Municipal Fire and Police Retirement System (Systems') and additions to/deductions from the Systems' fiduciary net position have been determined on the same basis as they are reported by the Systems. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Landfill Closing Costs Costs expected to be incurred in ultimately closing the present landfill site are being systematically provided for through charges to expense over the estimated useful life of the landfill on the basis of capacity used (see Note 8). Deferred Inflows of Resources Deferred inflows of resources represent an acquisition of net position that applies to a fixture period(s) and will not be recognized as an inflow of resources (revenue) until that time. Although certain revenues are measurable, they are not available. Available means collected within the current year or expected to be collected soon enough thereafter to be used to pay liabilities of the current year. Deferred inflows of resources in the governmental fund financial statements represent the amount of assets that have been recognized, but the related revenue has not been recognized since the assets are not collected within the current year or expected to be collected soon enough thereafter to be used to pay liabilities of the current year. Deferred inflows of resources consist of property tax receivable, grants receivable and other receivables. Deferred inflows of resources in the Statement of Net Position consist of succeeding year property tax receivable that will not be recognized as revenue until the year for which they are levied, the difference in the carrying value of refunded debt and it's acquisition price and the unamortized portion of pension and OPEB related items. 47 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Budgetary and Legal Appropriation and Amendment Policies The City prepares and adopts an annual function budget, as prescribed by Iowa statutes, for all funds except internal service and agency funds. This is formalized in a separate budgetary report, the Financial Plan. This budget is adopted on or before March 15 of each year to become effective July 1, and constitutes the City's appropriation for each program and purpose specified therein until amended. The adopted budget must include the following: a. Expenditures for each function: Public safety Public works Health and social services Culture and recreation Community and economic development General government Debt service Capital projects Business-type/enterprise b. The amount to be raised by property taxation c. Income from sources other than property taxation d. Transfers in and transfers out The legal level of control (the level at which expenditures may not legally exceed appropriations) is the function level for all funds combined, rather than at the individual fund level. Management can transfer appropriations within a function, within a fund type, and between fund types, without the approval of the governing body so long as the total budget by function area will not be exceeded. It is necessary, therefore, to aggregate the expenditures of the budgeted activities within the governmental fund types with the expenditures of the budgeted activities within the enterprise funds on a function basis, and to compare such function totals to function budgeted totals in order to demonstrate legal compliance with the budget. The City's budget for revenue focuses on aggregated totals by revenue source. The City formally adopts budgets for several funds that are not required by state law to be included in the annual function budget. Annual operating budgets are adopted for the internal service funds for management control purposes. Such budgets, however, are not legally required to be adopted under state statutes. A City budget for the current fiscal year may be amended for any of the following purposes as prescribed by Iowa statute: a. To permit the appropriation and expenditure of unexpended, unencumbered cash balances on hand at the end of the preceding fiscal year. b. To permit the appropriation and expenditure of amounts anticipated being available from sources other than property taxation. c. To permit transfers between funds. d. To permit transfers between functions. A budget amendment must be prepared and adopted in the same manner as the original budget. The City's budget was amended as prescribed, and the effects of those amendments are shown in the accompanying budgetary comparison schedule. The original budget was increased by $27,054,994 in revenues and other financing sources and by $83,011,721 in expenditures and other financing uses. Appropriations, as adopted or amended, lapse at the end of the fiscal year. 48 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 As allowed by GASB Statement No. 41, Budgetary Comparison Schedules — Perspective Differences, the City presents budgetary comparison schedules as required supplementary information based on the program structure of nine functional areas as required by state statute for its legally adopted budget. Restricted Assets Assets within the individual funds, which can be designated by the City Council for any use within the fund's purpose, are considered to be unrestricted assets. Assets, which are restricted for specific uses by bonded debt requirements, grant provisions, or other requirements, are classified as restricted assets. Liabilities, which are payable from restricted assets, are classified as such. Classification of Fund Balances Fund balances for the governmental funds are reported in classifications based on the nature of any limitations requiring the use of resources for specific purposes (see Note 10). 2. Cash and Pooled Investments The City's deposits in banks at June 30, 2019 were entirely covered by federal depository insurance, national credit union administration, or by the State Sinking Fund in accordance with Chapter 12C of the Code of Iowa. This chapter provides for additional assessments against the depositories to insure there will be no loss of public funds. The City is authorized by statute to invest public funds in obligations of the United States government, its agencies and instrumentalities; certificates of deposit or other evidences of deposit at federally insured Iowa depository institutions approved by City Council and secured pursuant to the limitations set forth in Chapter 12C of the Code of Iowa; prime eligible bankers acceptances; certain high rated commercial paper or other short-term corporate debt; perfected repurchase agreements; Iowa Public Agency Investment Trust (IPAIT); certain registered open—end management investment companies registered with the Securities & Exchange Commission under the federal Investment Company Act of 1940; and warrants or improvement certificates of a drainage district. At June 30, 2019 the City of Iowa City had the following investments: Fair Investment Value Maturities Federal Home Loan Bank Notes $ 10,501,455 September 2019 to October 2022 Federal Home Loan Mortgage Corporation Notes 6,034,180 November 2020 to April 2024 Federal Farm Credit Bank Notes 6,003,840 June 2021 to June 2022 Natixis NY Branch Commercial Paper 4,987,500 August 2019 United States Treasury Notes 1,970,820 March 2020 $ 29,497,795 49 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 The City uses the fair value hierarchy established by generally accepted accounting principles based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets. Level 2 inputs are significant other observable inputs. Level 3 inputs are significant unobservable inputs. The recurring fair value measurement for the Federal Home Loan Bank securities of $10,501,455, the Federal Home Loan Mortgage Corporation securities of $6,034,180, the Federal Farm Credit Bank securities of $6,003,840 and the United States Treasury securities of $1,970,820 were determined using the last reported sales price at current exchange rates (Level 1 inputs). The fair value measurement for the Natixis NY Branch commercial paper of $4,987,500 was determined using the last reported sales price at current exchange rates (Level 1 inputs). The City had no other investments meeting the disclosure requirements of Governmental Accounting Standards Board Statement No. 72. In addition, the City had investments in the Iowa Public Agency Investment Trust (IPAIT), which are valued at an amortized cost of $13,464,888, which approximates fair value. The Diversified Portfolio consists of cash and short-term investments valued at amortized cost, which approximates fair value, pursuant to Governmental Accounting Standards Board Statement No. 79. The Iowa Public Agency Investment Trust (IPAIT) represents an investment in a pool managed by others. IPAIT is a common trust established under Iowa law pursuant to Iowa Code Chapter 28E in 1987 to enable eligible Iowa public agencies to safely and effectively invest their available operating and reserve funds. IPAIT is registered under the Investment Company Act of 1940. The IPAIT portfolios have followed established money market mutual fund investment parameters designed to maintain a $1 per unit net asset value since inception and were registered with the Securities and Exchange Commission (SEC). Interest rate risk - The City's investment policy limits the investment of operating funds to investments that mature within 397 days. The portion of operating funds in excess of 33% of operating funds maybe invested in certificates of deposit which mature within 63 months or less. Funds not identified as operating funds may be invested in instruments with maturities longer than 397 days. Credit risk. State law limits investments to commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations. It is the City's policy to comply with rating restrictions. The investment in Iowa Public Agency Investment Trust is not rated by Moody's Investors service as it is a state security that is backed by the full faith and credit of the issuing government and is not subject to credit risk. Concentration of credit risk. The City investment policy limits the amount that may be invested in any one issuer to a maximum amount approved by the City Council. 50 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Due to legal and budgetary reasons, the General Fund is assigned a portion of the investment earnings associated with other funds. These funds are the employee benefits, other shared revenue, and sanitation funds. 3. Interfund Balances and Transfers Interfund balances for the year ended June 30, 2019, consisted of the following: Advances from Debt General Service Sanitation Total Advances to: Other Shared Revenue and Grants $ - $ 96,694 $ - $ 96,694 Other Construction - - 2,500,000 2,500,000 Nonmajor Governmental 56,012 - - 56,012 Parking - - 1,423,385 1,423,385 Total $ 56,012 $ 96,694 $ 3,923,385 $ 4,076,091 Interfund balances at June 30, 2019, include advances due to/from other funds, which represent amounts for construction loans, a revenue bond redemption loan and negative cash balance funding. The $56,012 advance to the Nonmajor Governmental Funds is expected to be repaid within the next year. $81,980 of the $96,694 advance to the Other Shared Revenue and Grants Fund is not expected to be repaid within the next year. $2,407,355 of the $2,500,000 advance to the Other Construction Fund is not expected to be repaid within the next year. $1,173,649 of the $1,423,385 advance to the Parking Fund is not expected to be repaid within the next year. 51 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Interfund transfers for the year ended June 30, 2019, consisted of the following: Transfers are used to move revenues and bond proceeds from the fund that State statutes or the budget requires to collect them to the fund that the State statutes or the budget requires to expend them. 52 Transfer from Capital Projects Bridge, Street Other Capital Projects and Traffic Shared Revenue Employee Other Control Nonmajor General and Grants Benefits Construction Construction Governmental Transfer to: General $ - $ 79,864 $ 10,480,205 $ $ - $ 939,926 Other Shared Revenue and Grants 1,000,000 - 451,026 - - Debt Service 20,052 - - - 1,938,721 Capital Projects Other Construction 4,411,321 368,720 - - 132,806 Capital Projects Bridge, Street and Traffic Control Construction 70,781 2,586,153 - - - Nonmajor Governmental 263,031 248,476 - - - Parking - - - - - Transit 3,563,749 - - - Wastewater Treatment 1,877 - - - 2,143,583 - Water 1,628 - - 50,795 2,475,969 - Sanitation 5,499 - - - - - Stormwater 1,036 - - 328,422 1,813,399 - Housing Authority - - - - - 106,470 Nonmajor Enterprise 100,000 - - - - - Internal Service 25,885 38,229 - 104,520 617,179 - Total Transfer to S 9,464,859 $ 3,321,442 $ 10,931,231 $ 483,737 $ 7,050,130 $ 3,117,923 Transfers are used to move revenues and bond proceeds from the fund that State statutes or the budget requires to collect them to the fund that the State statutes or the budget requires to expend them. 52 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Wastewater Transit Treatment Water 24,000 258,662 Transfer from Housing Internal Total Sanitation Stormwater Authority Service Transfer from - $ $ 47,949 $ - $ 11,547,944 - - - 1,451,026 - 1,958,773 369,000 - 402,941 5,967,450 769,425 400,000 400,000 - - 4226,359 - - - - - - 511,507 15,000 - - 15,000 - - - 3,563,749 - - - 2,145,460 - 110,000 - - 2,638,392 - - - 5,499 - - - - 2,142,857 - - - 106,470 - - - - 100,000 12,500 413,458 - 21,350 1,233,121 $ 15,000 $ 793,425 $ 671,162 $ 523,458 $ 769,000 $ 47,949 $ 424,291 $ 37,613,607 53 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 4. Capital Assets Capital asset activity for the year ended June 30, 2019, was as follows: Acquisitions Disposals Beginning and and Balance July 1, 2018 Transfers Transfers June 30, 2019 Governmental activities: Capital assets, not being depreciated: Land $ 30,893,959 $ 474,285 $ 560,500 $ 30,807,744 Construction in progress 42,282,566 32,936 21,831,532 20,483,970 Total capital assets, not being depreciated 73,176,525 507,221 22,392,032 51,291,714 Capital assets, being depreciated: Buildings 65,255,604 1,204,473 95,545 66,364,532 Improvements other than buildings 7,556,845 18,458 49,897 7,525,406 Machinery and equipment 43,857,060 4,755,201 3,240,972 45,371289 Infrastructure 160,799,168 39,475,577 - 200,274,745 Total capital assets being depreciated 277,468,677 45,453,709 3,386,414 319,535,972 Less accumulated depreciation for: Buildings 26,258,222 1,669,439 57,318 27,870,343 Improvements other than buildings 3,790,773 268,200 34,686 4,024,287 Machinery and equipment 26,578,055 3,692,558 2,917,597 27,353,016 Infrastructure 46,007,497 3,980,665 - 49,988,162 Total accumulated depreciation 102,634,547 9,610,862 3,009,601 109,235,808 Total capital assets, being depreciated, net 174,834,130 35,842,847 376,813 210,300,164 Governmental activities capital assets, net $ 248,010,655 $ 36,350,068 $ 22,768,845 $ 261,591,878 54 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Acquisitions Disposals Beginning and and Balance July 1, 2018 Transfers Transfers June 30, 2019 Business -type activities: Capital assets, not being depreciated: Land $ 30,317,185 $ - $ - $ 30,317,185 Construction in progress 15,297,287 - 11,553,403 3,743,884 Total capital assets, not being depreciated 45,614,472 - 11,553,403 34,061,069 Capital assets, being depreciated: 25,692,122 Infrastructure 105,411,337 Buildings 134,116,842 80,890 12,738 134,184,994 Improvements other than buildings 11,156,502 82,305 9,440 11,229,367 Machinery and equipment 34,971,952 4,420,793 592,872 38,799,873 Infrastructure 311,221,178 19,406,379 - 330,627,557 Total capital assets being depreciated 491,466,474 23,990,367 615,050 514,841,791 Less accumulated depreciation for Buildings 64,261,561 3,423,766 12,738 67,672,589 Improvements other than buildings 6,936,561 394,160 6,844 7,323,877 Machinery and equipment 24,576,412 1,702,154 586,444 25,692,122 Infrastructure 105,411,337 7,994,077 - 113,405,414 Total accumulated depreciation 201,185,871 13,514,157 606,026 214,094,002 Total capital assets, being depreciated, net 290,280,603 10,476,210 9,024 300,747,789 Business -type activities capital assets, net $ 335,895,075 $ 10,476210 $ 11,562,427 $ 334,808,858 Depreciation expense was charged to functions as follows: Governmental activities: Public safety $ 1,582,503 Public works 4,567,853 Culture and recreation 3,049,099 Community and economic development 59,486 General government 351,921 Total depreciation expense - governmental activities $ 9,610,862 Business -type activities: Parking $ 1,276,760 Transit 1,208,434 Wastewater treatment 4,487,298 Water 2,467,789 Sanitation 1,644,858 Stormwater 1,301,537 Housing authority 119,128 Nonmajor enterprise 1,008,353 Total depreciation expense - business -type activities $ 13,514,157 FS7 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 5. Capital Lease Obligation In 2017, the government entered into a lease agreement as lessee for financing the acquisition of a parking ramp valued at $15,497,867. The parking ramp has a 30 -year estimated useful life. This year, $516,596 was included in depreciation expense. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of future minimum lease payments as of the inception date. The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2019, were as follows: Fiscal Year Ending Business -type June 30 Activities 2020 $ 941,621 2021 941,621 2022 941,621 2023 941,621 2024 941,621 2025-2029 4,708,107 2030-2032 2,822,615 Total minimum lease payments 12,238,827 Less: amount representing interest (2,825,803) Present value of minimum lease payments $ 9,413,024 Changes in Capital Lease Obligation Changes in the capital lease obligation for the year ended June 30, 2019, was as follows: Due Within July 1, 2018 Issues Retirements June 30, 2019 One Year Business -type activities: $ 11,958,305 $ - $ 2,545281 $ 9,413,024 $ 566,983 56 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 6. Long Term Debt Changes in Debt for Bonds Bond debt activity for the year ended June 30, 2019, was as follows: July 1, 2018 Issues Retirements June 30, 2019 Due Within Governmental activities: General obligation bonds $ 51,880,000 $ 12,535,000 $ 11,945,000 $ 52,470,000 $ 11,245,000 Plus: Unamortized Premium 1,003,524 80,675 151,560 932,638 151,560 Total general obligation bonds 52,883,524 12,615,675 12,096,560 53,402,638 11,396,560 Revenue bonds 15,065,000 - 135,000 14,930,000 140,000 Less: Unamortized Discounts 29,736 - 2,124 27,612 2,124 Total revenue bonds 15,035,264 132,876 14,902,388 137,876 $ 67,918,788 $ 12,615,675 $ 12,229,436 $ 68,305,026 $ 11,534,436 Business -type activities: Revenue bonds Plus: Unamortized Premium Total revenue bonds General Obligation Bonds 27,785,000 7,645,000 20,140,000 4,075,000 1,310,062 294,352 1,015,710 294,352 $ 29,095,062 $ $ 7,939,352 $ 21,155,710 $ 4,369,352 Various issues of general obligation bonds totaling $52,470,000 are outstanding as of June 30, 2019. The bonds have interest rates ranging from 1.00% to 3.00% and mature in varying annual amounts ranging from $765,000 to $4,125,000 per issue, with the final maturities due in the year ending June 30, 2029. 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. 6711 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Annual debt service requirements to maturity for general obligation bonds are as follows: Fiscal Year Ending June 30 Governmental Activities Principal Interest 2020 $ 11,245,000 $ 1,196,696 2021 7,160,000 943,923 2022 7,320,000 786,163 2023 6,475,000 628,413 2024 5,745,000 475,513 2025-2029 14,525,000 828,738 Total $ 52,470,000 $ 4,859,446 Revenue Bonds As of June 30, 2019, the following unmatured revenue bond issues are outstanding: 58 Wastewater Taxable Urban Treatment Water Renewal Original issue amount $ 13,910,000 $ 14,510,000 $ 15,460,000 Interest rates 2.0% to 5.0% 1.5% to 5.0% 1.0% to 3.9% Annual maturities $ 500,000 to $ 420,000 to $ 140,000 to $ 2,085,000 $ 1,225,000 $ 965,000 Amount outstanding $ 9,875,000 $ 10,265,000 $ 14,930,000 58 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Revenue bond debt service requirements to maturity are as follows: Fiscal Year Ending June 30 2020 2021 2022 2023 2024 2025-2029 2030-2034 2035-2036 Total Governmental Activities Principal $ 140,000 140,000 1,110,000 1,110,000 1,105,000 5,015,000 4,555,000 1,755,000 Interest $ 451,635 448,695 445,475 413,045 380,345 1,415,425 672,245 79,350 $ 14,930,000 $ 4,306,215 Business -type Activities Principal Interest $ 4,075,000 4,250,000 4,350,000 3,840,000 1,745,000 1,880,000 $ 685,365 477,665 298,690 149,270 55,825 32,325 $ 20,140,000 $ 1,699,140 The revenue bond ordinances required that wastewater treatment, water revenues, and urban renewal tax revenues be set aside into separate and special accounts as they are received. The use and the amounts to be included in the accounts are as follows: Account Amount (a) Revenue Bond and Interest Amount sufficient to pay current bond and interest maturities. Sinking Reserve (b) Revenue Debt Service Reserve Amount required to be deposited in the Revenue Bond and Interest Reserve until the reserve fund equals: Taxable Urban Renewal Revenue bonds — maximum debt service due on the bonds in any succeeding fiscal year. Wastewater Revenue and Water Revenue bonds — 10% of the original principal amounts of all related bond issues. (c) Improvement Reserve $20,000 per month until the reserve balance equals or exceeds $2,000,000 for Wastewater Revenue bonds and $5,000 per month until the reserve balance equals or exceeds $450,000 for Water Revenue bonds, with no further deposits once the minimum balance is reached. If the reserve falls below the required minimum, monthly transfers in the aforementioned amounts will resume. In fiscal year ended June 30, 2019, the Wastewater Treatment Fund had net revenue of $6,708,000 and the amount of principal and interest due was $6,674,000. In fiscal year ended June 30, 2019, the Water Fund had net revenues of $3,190,000 and the amount of principal and interest due was $1,790,000. 59 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Summary of Bond Issues General obligation and revenue bonds payable at June 30, 2019, are comprised of the following issues: Amount Date of Final Issue General Obligation Bonds: Rates Multi -Purpose June 2012 Multi -Purpose July 2013 Refunded Multi -Purpose (1) June 2014 Multi -Purpose June 2015 Multi -Purpose June 2016 Multi -Purpose June 2017 Multi -Purpose June 2018 Taxable Multi -Purpose June 2018 Multi -Purpose June 2019 Total General Obligation Bonds 8,795,000 Amount Interest Final Outstanding Issued Rates Maturity June 30, 2019 Rates 9,070,000 2.0-2.25 6/22 2,935,000 7,230,000 1.0-2.0 6/23 3,380,000 11,980,000 2.0-3.0 6/24 4,875,000 7,785,000 2.0-2.25 6/25 4,915,000 8,795,000 2.0-3.0 6/26 6,785,000 9,765,000 2.0-2.5 6/27 7,960,000 8,895,000 1.8-2.65 6/28 8,085,000 3,100,000 2.35-2.6 6/20 1,000,000 12,535,000 2.0-2.25 6/29 12,535,000 60 $ 52,470,000 Outstanding June 30. 2019 5,600,000 4,275,000 2,100,000 2,865,000 5,300,000 2,125,000 12,805,000 $ 35,070,000 $ 87,540,000 Date of Amount Interest Final Issue Issued Rates Maftuity Revenue Bonds: Refunded Wastewater Treatment Bonds (2) June 2016 9,360,000 3.0-4.0 7/21 Refinded Wastewater Treatment Bonds (3) June 2017 4,550,000 2.0-5.0 7/22 Refunded Water Bonds (4) June 2012 4,950,000 1.5 - 2.1 7/22 Refunded Water Bonds (5) June 2016 3,650,000 1.5 - 5.0 7/24 Refimded Water Bonds (6) June 2017 5,910,000 2.0-2.25 7/25 Taxable Urban Renewal Nov. 2012 2,655,000 1.0 - 3.9 6/32 Taxable Urban Renewal Sept. 2016 12,805,000 3.0 6/36 Total Revenue Bonds 60 $ 52,470,000 Outstanding June 30. 2019 5,600,000 4,275,000 2,100,000 2,865,000 5,300,000 2,125,000 12,805,000 $ 35,070,000 $ 87,540,000 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 (1) This bond issue is an advance refunding of portions of the September 2006 and May 2007 General Obligation Bonds. (2) This bond issue refunded the October 2008 Wastewater Revenue Bond. (3) This bond issue refunded the May 2009 Wastewater Revenue Bonds. (4) This bond issue refunded the October 2002 Water Revenue Bonds. (5) This bond issue refunded the October 2008 Water Revenue Bonds. (6) This bond issued refunded the May 2009 Water Revenue Bonds. Conduit Debt Obligations From time to time, the City has issued Industrial Development Revenue Bonds and Midwestern Disaster Area Revenue Bonds to provide financial assistance to private sector entities for the acquisition, construction, and renovation of industrial and commercial facilities deemed to be in the public interest. The bonds are collateralized by the property financed and are payable solely from payments received on the underlying mortgage loans. All payments on the bonds are made by the private sector entities directly to a bond trustee, who is a third party financial institution, and in turn, disburses the payment to the respective bond holders. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of June 30, 2019, there were three series of Industrial Development Revenue Bonds outstanding, with an aggregate principal amount payable of $30,180,439. Debt Legal Compliance Legal Debt Margin: As of June 30, 2019, the general obligation debt issued by the computed as follows (amounts expressed in thousands): Assessed valuation: Real property Utilities Total valuation Debt limit, 5% of total assessed valuation Debt applicable to debt limit: General obligation bonds Urban renewal revenue bonds Letters of credit Other legal indebtedness (TIF rebates) Total net debt applicable to limit Legal debt margin 61 City did not exceed its legal debt limit $ 5,810,610 97,051 5.907.661 295,383 52,470 14,930 603 27,704 95,707 $ 199,676 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 7. Pension and Retirement Systems The City contributes to two employee retirement systems, the Municipal Fire and Police Retirement System of Iowa (MFPRSI) and the Iowa Public Employees Retirement System (IPERS). MFPRSI is governed by a nine -member Board of Trustees. Though separate and apart from state government, the Board is authorized by the state legislature, which also establishes by statute the pension and disability benefits and the System's funding mechanism. IPERS is administered by the State of Iowa. All full-time employees must participate in either MFPRSI or IPERS. As of June 30, 2019, the City had the following balances related to its pension accounts: Net Pension Liability Deferred Inflows Deferred Outflows Pension Expense IPERS $ 25,419,730 $ 1,805,612 6,757,724 3,105,633 MFPRSI Total 22,071,429 $ 47,491,159 745,549 2,551,161 6,773,622 13,531,346 3,387,651 6,493,284 Municipal Fire and Police Retirement System of Iowa (MFPRSI) Plan Description MFPRSI membership is mandatory for fire fighters and police officers covered by the provisions of Chapter 411 of the Code of Iowa. Employees of the City are provided with pensions through a cost-sharing multiple employer defined benefit pension plan administered by MFPRSI. MFPRSI issues a stand-alone financial report which is available to the public by mail at 7155 Lake Drive, Suite #201, West Des Moines, Iowa 50266 or at www.mfprsi.org. MFPRSI benefits are established under Chapter 411 of the Code of Iowa and the administrative rules thereunder. Chapter 411 of the Code of Iowa and the administrative rules are the official plan documents. The following brief description is provided for general informational purposes only. Refer to the plan documents for more information. Pension Benefits Members with 4 or more years of service are entitled to pension benefits beginning at age 55. Full service retirement benefits are granted to members with 22 years of service, while partial benefits are available to those members with 4 to 22 years of service based on the ratio of years completed to years required (i.e., 22 years). Members with less than 4 years of service are entitled to a refund of their contribution only, with interest, for the period of employment. Benefits are calculated based upon the member's highest 3 years of compensation. The average of these 3 years becomes the member's average final compensation. The base benefit is 66 percent of the member's average final compensation. Additional benefits are available to members who perform more than 22 years of service (2 percent for each additional year of service, up to a maximum of 8 years). Survivor benefits are available to the beneficiary of a retired member according to the provisions of the benefit option chosen plus an additional benefit for each child. Survivor benefits are subject to a minimum benefit for those members who chose the basic benefit with a 50 percent surviving spouse benefit. 62 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Active members, at least 55 years of age, with 22 or more years of service have the option to participate in the Deferred Retirement Option Program (DROP). The DROP is an arrangement whereby a member who is otherwise eligible to retire and commence benefits opts to continue to work. A member can elect a 3, 4, or 5 year DROP period. By electing to participate in DROP the member is signing a contract indicating the member will retire at the end of the selected DROP period. During the DROP period the member's retirement benefit is frozen and a DROP benefit is credited to a DROP account established for the member. Assuming the member completes the DROP period, the DROP benefit is equal to 52% of the member's retirement benefit at the member's earliest date eligible and 100% if the member delays enrollment for 24 months. At the member's actual date of retirement, the member's DROP account will be distributed to the member in the form of a lump sum or rollover to an eligible plan. Disability and Death Benefits Disability coverage is broken down into two types, accidental and ordinary. Accidental disability is defined as permanent disability incurred in the line of duty, with benefits equivalent to the greater of 60 percent of the member's average final compensation or the member's service retirement benefit calculation amount. Ordinary disability occurs outside the call of duty and pays benefits equivalent to the greater of 50 percent of the member's average final compensation, for those with 5 or more years of service, or the member's service retirement benefit calculation amount, and 25 percent of average final compensation for those with less than 5 years of service. Death benefits are similar to disability benefits. Benefits for accidental death are 50 percent of the average final compensation of the member plus an additional amount for each child, or the provisions for ordinary death. Ordinary death benefits consist of a pension equal to 40 percent of the average final compensation of the member plus an additional amount for each child, or a lump -sum distribution to the designated beneficiary equal to 50 percent of the previous year's eamable compensation of the member or equal to the amount of the member's total contributions plus interest. Benefits are increased annually in accordance with Chapter 411.6 of the Code of Iowa which states a standard formula for the increases. The surviving spouse or dependents of an active member who dies due to a traumatic personal injury incurred in the line of duty receives a $100,000 lump -sum payment. Contributions Member contribution rates are set by state statute. In accordance with Chapter 411 of the Code of Iowa, the contribution rate was 9.40% of earnable compensation for the year ended June 30, 2019. Employer contribution rates are based upon an actuarially determined normal contribution rate and set by state statute. The required actuarially determined contributions are calculated on the basis of the entry age normal method as adopted by the Board of Trustees as permitted under Chapter 411 of the Code of Iowa. The normal contribution rate is provided by state statute to be the actuarial liabilities of the plan less current plan assets, with such total divided by 1 percent of the actuarially determined present value of prospective fixture compensation of all members, further reduced by member contributions and state appropriations. Under the Code of Iowa the employer's contribution rate cannot be less than 17.00% of earnable compensation. The contribution rate was 26.02% for the year ended June 30, 2019. The City's contributions to MFPRSI for the year ended June 30, 2019 was $2,902,433. 63 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 If approved by the state legislature, state appropriation may further reduce the employer's contribution rate, but not below the minimum statutory contribution rate of 17.00% of earnable compensation. The State of Iowa therefore is considered to be a nonemployer contributing entity in accordance with the provisions of the Governmental Accounting Standards Board Statement No. 67 — Financial Reporting for Pension Plans, (GASB 67). There were no state appropriations to MFPRSI during the fiscal year ended June 30, 2019. Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2019, the City reported a liability of $22,071,429 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's share of contributions to the pension plan relative to the contributions of all MFPRSI participating employers. At June 30, 2018, the City's proportion was 3.706970% which was an increase of .058335% from its proportions measured as of June 30, 2017. For the year ended June 30, 2019, the City recognized pension expense of $3,387,651. At June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual experience Change of assumptions Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between City contributions and proportionate share of contributions City contributions subsequent to the measurement date Total 64 Deferred Outflows of Deferred Inflows of Resources Resources 592,510 $ 299,410 1,885,125 176,377 1,079,607 313,947 269,762 2,902,433 $ 6,773,622 $ 745,549 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 $2,902,433 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended Total June 30, 2020 $ 2,057,622 June 30, 2021 1,058,600 June 30, 2022 (281,407) June 30, 2023 237,718 June 30, 2024 53,107 $ 3,125,640 Actuarial Assumptions The total pension liability in the June 30, 2018, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Rate of inflation Salary increases 3.00 percent per annum 4.50 to 15.00 percent, including inflation Investment rate of return 7.50 percent, net of pension plan investment expense, including inflation The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period from July 1, 2007 to June 30, 2017. Postretirement mortality rates were based on the RP -2014 Blue Collar Combined Healthy Annuitant Table with males set -forward zero years, females set -forward two years and disabled individuals set -forward three years (male only rates), with generational projection of fixture mortality improvement with 50 percent of Scale BB beginning in 2017. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates (i.e., expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: 65 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Long -Term Expected Asset Class Real Rate of Return Core Plus Fixed Income 3.3 % Emerging Markets 9.0 Emerging Markets Debt 6.3 Large Cap 5.5 Small Cap 5.8 Master Limited Partnerships (MLP) 9.0 International Large Cap 7.3 Tactical Asset Allocation 6.4 Private Equity 9.0 Private Non -Core Real Estate 8.0 Private Core Real Estate 6.0 Discount Rate The discount rate used to measure the total pension liability was 7.5%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and the City contributions will be made at rates equal to the difference between actuarially determined rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of City's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.5%, as well as what the city's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1% lower (6.5%) or 1% higher (8.5%) than the current rate. 1% Decrease Discount Rate 1% Increase (6.5%) (7.5%) (8.5%) City's proportionate share of the net pension liability: $ 36,825,425 $ 22,071,429 $ 9,855,615 Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the separately issued MFPRSI financial report which is available on MFPRSI's website at www.mfprsi.org. Payables to the Pension Plan At June 30, 2019, there were no amounts due to MFPRSI. 66 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Iowa Public Employees Retirement System (IPERS) Plan Description IPERS membership is mandatory for employees of the City, except for those covered by another retirement system. Employees of the City are provided with pensions through a cost-sharing multiple employer defined benefit pension plan administered by IPERS. IPERS issues a stand-alone financial report which is available to the public by mail at 7401 Register Drive P.O. Box 9117, Des Moines, Iowa 50306-9117 or at www.ipers.org. IPERS benefits are established under Iowa Code chapter 97B and the administrative rules thereunder. Chapter 97B and the administrative rules are the official plan documents. The following brief description is provided for general informational purposes only. Refer to the plan documents for more information. Pension Benefits A regular member may retire at normal retirement age and receive monthly benefits without an early- retirement reduction. Normal retirement age is age 65, any time after reaching age 62 with 20 or more years of covered employment, or when the member's years of service plus the member's age at the last birthday equals or exceeds 88, whichever comes first. (These qualifications must be met on the member's first month of entitlement to benefits.) Members cannot begin receiving retirement benefits before age 55. The formula used to calculate a Regular member's monthly IPERS benefit includes: • A multiplier (based on years of service). • The member's highest five-year average salary. (For members with service before June 30, 2012, the highest three-year average salary as of that date will be used if it is greater than the highest five- year average salary.) If a member retires before normal retirement age, the member's monthly retirement benefit will be permanently reduced by an early-retirement reduction. The early-retirement reduction is calculated differently for service earned before and after July 1, 2012. For service earned before July 1, 2012, the reduction is 0.25 percent for each month that the member receives benefits before the member's earliest normal retirement age. For service earned starting July 1, 2012, the reduction is 0.50 percent for each month that the member receives benefits before age 65. Generally, once a member selects a benefit option, a monthly benefit is calculated and remains the same for the rest of the member's lifetime. However, to combat the effects of inflation, retirees who began receiving benefits prior to July 1990 receive a guaranteed dividend with their regular November benefit payments. Disability and Death Benefits A vested member who is awarded federal Social Security disability or Railroad Retirement disability benefits is eligible to claim IPERS benefits regardless of age. Disability benefits are not reduced for early retirement. If a member dies before retirement, the member's beneficiary will receive a lifetime annuity or a lump -sum payment equal to the present actuarial value of the member's accrued benefit or calculated with a set formula, whichever is greater. When a member dies after retirement, death benefits depend on the benefit option the member selected at retirement. 67 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Contributions Contribution rates are established by IPERS following the annual actuarial valuation, which applies IPERS' Contribution Rate Funding Policy and Actuarial Amortization Method. Statute limits the amount rates can increase or decrease each year to 1 percentage point. IPERS Contribution Rate Funding Policy requires that the actuarial contribution rate be determined using the "entry age normal" actuarial cost method and the actuarial assumptions and methods approved by the IPERS Investment Board. The actuarial contribution rate covers normal cost plus the unfunded actuarial liability payment based on a 30 -year amortization period. The payment to amortize the unfunded actuarial liability is determined as a level percentage of payroll, based on the Actuarial Amortization Method adopted by the Investment Board. In fiscal year 2019, pursuant to the required rate, Regular members contributed 6.29% of pay and the City contributed 9.44% for a total rate of 15.73%. The City's total contributions to IPERS for the year ended June 30, 2019 were $2,912,438. Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2019, the City reported a liability of $25,419,730 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's share of contributions to the pension plan relative to the contributions of all IPERS participating employers. At June 30, 2018, the City's proportion was .4016869% which was an increase of .004871% from its proportions measured as of June 30, 2017. For the year ended June 30, 2019, the City recognized pension expense of $3,105,633. At June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual experience Change of assumptions Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between City contributions and proportionate share of contributions City contributions subsequent to the measurement date Total 68 Deferred Outflows of Deferred Inflows of Resources Resources 139,373 $ 574,527 3,626,282 698,452 79,631 532,633 2,912,438 $ 6,757,724 $ 1,805,612 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 $2,912,438 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended Total June 30, 2020 $ 1,450,835 June 30, 2021 752,407 June 30, 2022 (184,610) June 30, 2023 30,575 June 30, 2024 (9,533) $ 2,039,674 Actuarial Assumptions The total pension liability in the June 30, 2018, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Rate of inflation 2.60% per annum (effective June 30, 2017) Salary increases 3.25 to 16.25%, average, including inflation. Rates vary by (effective June 30, 2017) membership group. Investment rate of return 7.00% compounded annually, net of pension plan investment (effective June 30, 2017) expense, including inflation Wage growth 3.25% per annum based on 2.60% inflation and 0.65% (effective June 30, 2017) real wage inflation The actuarial assumptions used in the June 30, 2018 valuation were based on the results of actuarial experience study dated March 24, 2017 and a demographic assumption study dated June 28, 2018. Mortality rates were based on the RP -2014 Employee and Healthy Annuitant Tables with MP -2017 generational adjustments. 69 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected fixture real rates (i.e., expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset Class Core Plus Fixed Income Domestic Equity International Equity Private Equity Private Real Assets Public Real Assets Public Credit Private Credit Global smart beta equity Cash Target Allocation 27.0% 22.0 15.0 11.0 7.5 7.0 3.5 3.0 3.0 1.0 Total 100.0% Long -Term Expected Real Rate of Return 1.97% 6.01 6.48 10.81 4.14 2.91 3.93 3.11 6.23 (0.25) Discount Rate The discount rate used to measure the total pension liability was 7.0%. The projection of cash flows used to determine the discount rate assumed employee contributions will be made at the contractually required rate and that the contributions from the City will be made at contractually required rates, actuarially determined. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments to current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of City's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.0%, as well as what the city's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1% lower (6.0%) or 1% higher (8.0%) than the current rate. 1% Decrease Discount Rate 1% Increase (6.0%) (7.0%) (8.0%) City's proportionate share of the net pension liability: $ 43,142,390 $ 25,419,730 $ 10,553,053 70 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the separately issued IPERS financial report which is available on IPERS' website at www.ipers.org. Payables to the Pension Plan At June 30, 2019, there were no amounts due to IPERS. 8. Other Long-term Liabilities Changes in Long -Term Liabilities - Notes Payable Note Payable activity for the year ended June 30, 2019, was as follows: Due Within July 1, 2018 Issues Retirements June 30, 2019 One Year Governmental activities: $ 210,784 $ - $ - $ 210,784 $ - A note payable was issued to Greater Iowa City Housing Fellowship for the purchase of an 11 unit apartment building for low income and disabled housing in the Peninsula Neighborhood. The terms of the loan are 1%, interest only payments for twenty years with a final balloon payment of $210,784 due on August 1, 2025. Changes in Long -Term Liabilities - Employee Vested Benefits Employee Vested Benefits activity for the year ended June 30, 2019, was as follows: Due Within July 1, 2018 Issues Retirements June 30, 2019 One Year Governmental activities: $ 2,240,484 $ 1,331,738 $ 1,252,770 $ 2,319,452 $ 1,307,338 Business -type activities: $ 727,245 $ 424,905 $ 424,180 $ 727,970 $ 424,616 For the governmental activities, employee vested benefits are generally liquidated by the General Fund, Community Development Block Grant Fund and Other Shared Revenue and Grants Fund. 71 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Changes in Long -Term Liabilities - Landfill Closure Post -closure Care Costs Landfill Closure Post -closure care activity for the year ended June 30, 2019, was as follows: July 1, 2018 Issues Retirements Due Within June 30, 2019 One Year Business -type activities: $ 9259,218 $ 491,861 $ - $ 9,751,079 $ - 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, 2019, is $9,751,079, which is based on 57.85% usage (filled) of the landfill and is included in accrued liabilities within the Sanitation Fund. It is estimated that an additional amount of approximately $7,104,719 will be recognized as closure and post -closure care expenses between the date of the balance sheet and the date the landfill is expected to be filled to capacity by the year ended June 30, 2039. The estimated total current cost of the landfill closure and post -closure care costs at June 30, 2019, was determined by a licensed professional engineer and approximated at $16,855,798. 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, 2019. These amounts are based on an estimated post -closure care and monitoring period of 30 years, consistent with current State Department of Natural Resources regulations. However, the actual cost of closure and post -closure care may be higher due to inflation, changes in technology, or changes in landfill laws and regulations. The City is required by federal and state laws and regulations to provide some form of financial assurance to finance closure and post -closure care. The City will meet its financial assurance obligations through the issuance of general obligation bonds. As of June 30, 2019, the Sanitation Fund had $14,319,333 in related equity in pooled cash and investments, at fair value designated for satisfaction of closure and post -closure costs. The City estimates that these cash reserves will only provide a fraction of the dollars needed to close and monitor the landfill. The remaining portion of post -closure care costs, anticipated future inflation costs and additional costs that might arise from changes in post -closure requirements (due to changes in technology or more rigorous environmental regulations, for example) may need to be covered by charges to future landfill users as well as City taxpayers. 72 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Changes in Long -Term Liabilities — Other Postemployment Benefits (OPEB) Plan Description: The City operates one self-funded medical and dental plan for all employees, which is offered to current and retired employees and their dependents. Group insurance benefits are established under Iowa Code Chapter 509A.13. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75. All full-time employees who retire or terminate/resign and their eligible dependents are offered the following post -employment benefit options: Health insurance and dental insurance — The option of continuing with the City's health insurance plan at the individual's expense. These benefits cease upon Medicare eligibility. Life insurance — The option of converting the employee's City -paid policy to an individual policy at the individual's expense with the City's life insurance carrier. Long-term disability — For employees who terminate/resign and have been on the plan for a minimum of one year, the option of converting the employee's City -paid group policy to a personal policy at the individual's expense with the City's long-term disability insurance carrier. The above options, while at the individual's own expense, are included within the City's overall insurance package, which results in an implicit rate subsidy and an OPEB liability. Retired participants must be age 55 or older at retirement. At June 30, 2019, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefit payments 65 Active employees 573 Total 638 Total OPEB Liability: The City's total OPEB liability of $8,877,831 was measured as of June 30, 2019 and was determined by an actuarial valuation as of that date. 73 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Actuarial Assumptions: The total OPEB liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions and the entry age normal actuarial cost method, applied to all periods included in the measurement. Rate of inflation 2.60% per annum (effective June 30, 2019) Rates of salary increases 3.25% per annum based on 2.60% inflation and 0.65% (effective June 30, 2019) real wage inflation Discount rate 3.51%, compounded annually, including inflation (effective June 30, 2019) Healthcare cost trend rate 8.50% initial rate decreasing by .5% annually to an ultimate (effective June 30, 2019) rate of 5.00% Discount Rate: The discount rate used to measure the total OPEB liability was 3.51 % which reflects the index rate for 20 -year tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher as of the measurement date. Mortality rates are from the SOA RPH-2017 total dataset mortality table fully generational using Scale MP - 2017. Annual retirement probabilities are based on varying rates by age and turnover probabilities mirror those used by IPERS and MFPRSI. The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study with dates corresponding to those listed above. Total OPEB Liability Total OPEB liability beginning of year $ 7,589,740 Changes for the year: Service Cost 552,791 Interest 296,944 Difference between expected and actual experience 1,160,860 Changes in assumptions 225,633 Benefit payments (948,137) Net changes 1,288,091 Total OPEB liability end of year $ 8,877,831 Changes of assumptions reflect a change in the discount rate from 3.87% in fiscal year 2018 to 3.51% in fiscal year 2019. 74 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 Sensitivity of the City's Total OPEB Liability to Changes in the Discount Rate: The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is 1% lower (2.51%) or 1% higher (4.51%) than the current discount rate. 1% Decrease Discount Rate 1% Increase (2.51%) (3.51%) (4.51%) Total OPEB liability $ 9,526,999 $ 8,877,831 $ 8,262,262 Sensitivity of the City's Total OPEB Liability to Changes in the Healthcare Cost Trend Rate: The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using healthcare cost trend rate that is 1% lower (7.50%) or 1% higher (9.50%) than the current healthcare cost trend rate. Healthcare Cost 1% Decrease Trend Rate 1% Increase (7.50%) (8.50%) (9.50%) Total OPEB liability $ 7,839,926 $ 8,877,831 $ 10,108,808 OPEB Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB: For the year ended June 30, 2019, the City recognized OPEB expense of $1,048,935. At June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following resources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $ 1,044,774 Change of assumptions 988,937 Total $ 2,033,711 VAI $ 301,454 $ 301,454 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 The amount reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows: Year Ended Total June 30, 2020 $ 199,200 June 30, 2021 199,200 June 30, 2022 199,200 June 30, 2023 199,200 June 30, 2024 199,200 Thereafter 736,257 $ 1,732,257 9. Short Term Debt Changes in Short -Term Liabilities -Notes Payable Notes Payable activity for the year ended June 30, 2019, was as follows: Due Within July 1, 2018 Issues Retirements June 30, 2019 One Year Governmental activities: $ 475,000 $ 810,000 $ 682,500 $ 602,500 $ 602,500 During FY19, the City entered into additional multiple short-term loans totaling $810,000 and repaid multiple short-term loans totaling $682,500. The outstanding loans mature one year from the date of the loan and bear interest rates ranging from 2.00% to 5.50%. The loans were used to fund the acquisition and rehabilitation of single family homes as part of the UniverCity Neighborhood Partnership Program (UniverCity). UniverCity is a cooperative effort of the City of Iowa City and the University of Iowa dedicated to ensuring that the University of Iowa Campus and surrounding neighborhoods remain vital, safe, affordable, and attractive places to live and work for both renters and homeowners. The short-term loans have been repaid and will be repaid with the proceeds from the sale of the rehabilitated homes. The total available lines of credit total $3,000,000 of which $602,500 is outstanding as of June 30, 2019. 10. Fund Equity Fund balances for the governmental funds are reported in classifications that comprise a hierarchy based on the extent to which the government honors constraints on the specific purposes for which amounts in those funds can be spent. • The Nonspendable classification contains amounts not in spendable form or legally or contractually required to be maintained intact. • Restricted amounts contain restraint on their use externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. 76 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 0 Committed amounts can only be used for specific purposes imposed by formal action of the government's highest level of decision-making authority. The highest level of decision-making authority is the City Council and it takes a resolution to establish, modify or rescind a fund balance commitment. • Amounts intended to be used for specific purposes are Assigned. Assignments should not cause deficits in the Unassigned fund balance. The Finance Director has been delegated authority by the City Council through a resolution to assign amounts to be used for specific purposes. • Unassigned fund balance is the residual classification for the General Fund. The General Fund is the only fund that would report a positive amount in unassigned fund balance. Residual deficit amounts of other governmental funds would also be reported as unassigned. The City would use Restricted fund balances first, followed by Committed resources, and then Assigned resources, as appropriate opportunities arise, but reserves the right to selectively spend Unassigned resources first to defer the use of these other classified funds. Components of Fund Balance Nonspendable: Perpetual Care Principal Inventory Prepaid Items Total Nonspendable Restricted for: Public Safety Debt Service GO Bond Projects State Funding Grant Agreement Affordable Housing Economic Development Notes Receivable Property Held for Resale Public Safety Employee Benefits Other Restricted Total Restricted Assigned to: Library Programs Replacement and Acquisition Reserves Other Assigned Total Assigned Unassigned: Total Fund Balances Bridge, Other Street and Shared Traffic Other Revenue and Employee Other Control Debt Governmental General Grants Benefits Construction Construction Service Funds Total $ 69,000 $ - $ - $ - $ - $ - $ - $ 69,000 - 135,255 - - - - - 135,255 818,159 88,704 906,863 887,159 135,255 88,704 1,111,118 362,021 - - - - - - 362,021 - - - 9,673,871 9,673,871 - - 16,624,377 10,816,804 - - 27,441,181 3,363,436 - - - - - 3,363,436 - - - - - 3,556,869 3,556,869 1,635,738 - 1,635,738 - - - - - 993,418 993,418 1,329,209 - - - - - - 1,329,209 86,800 - - - - - - 86,800 - - 3,865,784 - - - - 3,865,784 29,660 80,557 354,968 465,185 1,807,690 5,079,731 3,865,784 16,624,377 10,816,804 9,673,871 4,905,255 52,773,512 986,872 - - - - - - 986,872 2,446,819 - - - - - - 2,446,819 131,520 131,520 3,565,211 3,565,211 34,357,800 (17,585) (25,641) (15,470) 34,299,104 $ 40,617,860 $ 5,197,401 $ 3,954,488 $ 16,624,377 $ 10,816,804 $ 9,648,230 $ 4,889,785 $ 91,748,945 V&A CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 11. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; workplace accidents, errors and omissions; and natural disasters. During fiscal year 1988 the City established the Loss Reserve Fund, an internal service fund, to account for and finance its uninsured risks of loss. During the year ended June 30, 2019 the City purchased property, liability, and workers' compensation insurance under the program that provides for a $100,000 self-insured retention per occurrence on property losses, a $500,000 self-insured retention per occurrence on liability, and a $500,000 self-insured retention on workers' compensation losses. The liability insurance provides coverage for claims in excess of the aforementioned self-insured retention up to a maximum of $21,000,000 annual aggregate of losses paid. Settled claims have not exceeded this commercial coverage in any of the past thirty-one fiscal years. The operating funds pay annual premiums to the Loss Reserve Fund. Accumulated monies in the Loss Reserve Fund are available to cover the self-insured retention amounts and any uninsured losses. The Housing Authority Fund is insured under a separate policy with the Assisted Housing Risk Management Association. The remaining funds participate in the Loss Reserve Fund. The funds make payments to the Loss Reserve Fund based on actuarial estimates of the amounts needed to pay prior- and current -year claims and to establish a reserve for catastrophic losses. The Fund's accrued liabilities balance includes a claims liability at June 30, 2019 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, 2019 and 2018 are as follows: 2017-2018 2018-2019 Beginning -of - Fiscal -Year Liability 2,289,000 2,173,000 Current -Year Claims and Changes in Estimates $ 1,309,000 1,510,000 Claim Payments $ 1,425,000 $ 976,000 Balance at Fiscal Year -End 2,173,000 2,707,000 Also, the City is partially self-insured, through stop -loss insurance, for employee health care coverage, which is available to all of its permanent employees. This insurance provides stop -loss coverage for claims in excess of $125,000 per employee with an aggregate stop -loss of $11,791,187. The operating funds are charged premiums by the Loss Reserve Fund. The City reimburses a health insurance provider for actual medical costs incurred, plus a claims processing\administrative fee. Changes in the Loss Reserve Fund's claims liability amount for health care coverage for the years ended June 30, 2019 and 2018 are as follows: 2017-2018 2018-2019 Beginning -of - Fiscal -Year Liability Current -Year Claims and Balance at Changes in Claim Fiscal Estimates Payments Year -End $ 385,000 $ 7,893,000 410,000 9,735,000 78 $ 7,868,000 $ 410,000 9,295,000 850,000 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 12. Commitments and Contingencies Contractual Commitments The total outstanding contractual commitments as of June 30, 2019 are as follows: Fund Proje ct Bridge, street and traffic Paving and Bridge Construction, control construction Engineering Design and Consulting Other construction Public Works & Culture and Recreation Construction Parking Parking Facility Restoration Repair Wastewater Sewer Construction & Riverfront Crossings Park & Generator Relocation Water Water Construction & Water Plant Roof Replacement, Water Pressure Zone Improvement Transit Pedestrian/Transit Amenities Airport Runway Obstruction Mitigation Stormwater Stormwater System Improvements & Storm Sewer Replacements Developer Commitments Amount $ 3,666,250 11,436,844 22,720 1,483,539 162,471 15,850 35,439 66,529 $ 16,889,642 In order to encourage development within designated TIF districts, the City Council has approved developer grants to 7 different projects. The grants are to be paid only after certain conditions have been met by each project developer, and are to be paid over many years in the form of a rebate of a predetermined percentage of future property taxes generated by the property. Currently, it is estimated that outstanding commitments totaling $27,703,850 exist, of which $1,418,774 is expected to be paid in the next fiscal year. These items are expensed in the period in which they are paid. There were payments made in the current fiscal year in the amount of $769,594. No liability is recognized due to the fact that the agreements are conditional and the payments are to be funded by future property taxes receivable on the project. 79 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 13. Contingent Liabilities Litigation The City is a defendant in a number of lawsuits arising principally from claims against the City for alleged improper actions by City employees, with such lawsuits typically involving claims of improper police action, unlawful taking of property by zoning, negligence, appeals of condemnations, and discrimination. Total damages claimed are substantial; however, it has been the City's experience that such actions are settled for amounts substantially less than claimed amounts. The City's management estimates that the potential claims against the City, not covered by various insurance policies, would not materially affect the financial condition of the City. The City has the authority to levy additional taxes (outside the regular limit) to cover uninsured judgments against the City. 14. Tax Abatements Governmental Accounting Standards Board Statement No. 77 defines tax abatements as a reduction in tax revenues that results from an agreement between one or more governments and an individual or entity in which (a) one or more governments promise to forgo tax revenues to which they are otherwise entitled and (b) the individual or entity promises to take a specific action after the agreement has been entered into that contributes to economic development or otherwise benefits the governments or the citizens of those governments. City Tax Abatements The City provides tax abatements for urban renewal and economic development projects with tax increment financing as provided for in Chapters 15A and 403 of the Code of Iowa. For these types of projects, the City enters into agreements with developers which require the City, after developers meet the terms of the agreements, to rebate a portion of the property tax paid by the developers, to pay the developers an economic development grant or to pay the developers a predetermined dollar amount. No other commitments were made by the City as part of these agreements. For the year ended June 30, 2019, $108,978 of property tax was diverted from the City under the urban renewal and economic development projects. Tax Abatements of Other Entities Property tax revenues of the City were not reduced by any amount for the year ended June 30, 2019 under agreements entered into by any entities. 80 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2019 15. New Governmental Accounting Standards Board (GASB) Standards The Governmental Accounting Standards Board (GASB) has issued five statements not yet implemented by the City. The statements, which might impact the City's financial statements, are as follows: Statement No. 84, Fiduciary Activities, will be effective for fiscal year ending June 30, 2020. The objective of this Statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. Statement No. 87, Leases, will be effective for fiscal year ending June 30, 2021. The objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, will be effective for fiscal year ending June 30, 2020. The objectives of this Statement are to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and to simplify accounting for interest cost incurred before the end of a construction period. Statement No. 90, Majority Equity Interests — an amendment of GASB Statements No. 14 and No. 61 will be effective for fiscal year ending June 30, 2020. The objectives of this Statement are to improve the consistency and comparability of reporting a government's majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. Statement No. 91, Conduit Debt Obligations will be effective for fiscal year ending June 30, 2022. The objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The City's management has not yet determined the effect these statements will have on the City's financial statements. 81 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, 2019 (dollar amounts expressed in thousands) Governmental Fund Types Enterprise Fund Actual Budgetary Types Actual Total Actual Basis Budgetary Basis Budgetary Basis Revenues: Public safety Property taxes $ 59,113 $ - $ 59,113 Delinquent property taxes 2 - 2 Tax increment financing taxes 2,565 - 2,565 Other city taxes 2,993 - 2,993 Special assessments - - - Licenses and permits 2,981 25 3,006 Intergovernmental 18,088 13,181 31,269 Charges for services 6,018 41,556 47,574 Use of money and property 2,510 2,979 5,489 Miscellaneous 2,559 805 3,364 Total revenues 96.829 58.546 155.375 Expenditures/Expenses: Public safety 24,590 - 24,590 Public works 9,929 - 9,929 Health and social services 300 - 300 Culture and recreation 13,911 - 13,911 Community and economic development 9,163 - 9,163 General government 9,005 - 9,005 Debt service 13,678 - 13,678 Capital outlay 39,753 - 39,753 Business -type - 60,937 60,937 Total expenditures/expenses 120,329 60,937 181,266 Excess (deficiency) of revenues over (under) expenditures/expenses (23,500) (2,391) (25,891) Other financing sources and uses, net 15,950 (708) 15,242 Net change in fund balances (7,550) (3,099) (10,649) Balances, beginning of year 96,465 96,954 193,419 Balances, end of year $ 88,915 $ 93,855 $ 182,770 See Note to Required Supplementary Information. 82 Budgeted Amounts Final to Actual Variance - Positive Original Final (Negative) $ 59,174 $ 59,174 $ (61) 9,757 - 2 2,622 2,622 (57) 2,933 2,933 60 1 1 (1) 2,041 2,041 965 32,315 42,111 (10,842) 47,372 47,919 (345) 2,439 2,742 2,747 3,238 4,267 (903) 152,135 163,810 (8,435) 25,483 26,060 1,470 9,757 10,178 249 300 310 10 15,021 15,044 1,133 9,086 11,422 2,259 9,528 10,015 1,010 13,722 13,806 128 23,581 81,248 41,495 61,092 73,062 12,125 167,570 241,145 59,879 (15,435) (77,335) 51,444 11,926 17,869 (2,627) (3,509) (59,466) $ 48,817 134,883 193,419 $ 131,374 $ 133,953 83 CITY OF IOWA CITY BUDGETARY COMPARISON SCHEDULE BUDGET TO GAAP RECONCILIATION REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2019 (dollar amounts expressed in thousands) Governmental Fund Types Accrual Modified Accrual Budget Basis Adjustments Basis Revenues $ 96,829 $ (4,057) $ 92,772 Expenditures 120,329 (12,828) 107,501 Net (23,500) 8,771 (14,729) Other financing sources and uses, net 15,950 (11,282) 4,668 Beginning Fund Balances 96,465 5,345 101,810 Ending Fund Balances $ 88,915 $ 2,834 $ 91,749 Enterprise Fund Types Accrual Accrual Budget Basis Adjustments Basis Revenues $ 58,546 $ 2,304 $ 60,850 Expenditures 60,937 (648) 60,289 Net (2,391) 2,952 561 Other financing sources and uses, net (708) 8,597 7,889 Beginning Fund Balances 96,954 276,431 373,385 Ending Fund Balances $ 93,855 $ 287,980 $ 381,835 See Note to Required Supplementary Information. 84 City of Iowa City, Iowa Note to Required Supplementary Information - Budgetary Reporting For the Year Ended June 30, 2019 In accordance with the Code of Iowa, the City Council annually adopts a budget following required public notice and hearing which includes all funds, except internal service funds and agency funds. The budget basis of accounting is a modified accrual basis. The annual budget may be amended during the year utilizing similar statutorily prescribed procedures. Formal and legal budgetary control is based upon nine major classes of expenditures known as functions, not by fund or fund type. These nine functions are: public safety, public works, health and social services, culture and recreation, community and economic development, general government, debt service, capital outlay and business -type. The legal level control is at the aggregated function level, not at the fund or fund type level. During the year, budget amendments increased budgeted revenues by $11,675,000 and expenditures by $73,575,000. The budget amendments were primarily due to changes in the breadth and timing of capital improvement projects, which the City budgets in full during the initial year of the projects and amends future year budgets for carryover. 85 86 June 30 of the preceding fiscal year. Note: GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10 -year trend is compiled, the City will present information for those years for which information is available. 87 City of Iowa City, Iowa Required Supplementary Information - Schedule of the City's Proportionate Share of the Net Pension Liability Municipal Fire and Police Retirement System of Iowa For the Last Five Years* (amounts expressed in thousands) 2019 2018 2017 2016 2015 City's proportion of the net pension liability 3.706970% 3.648635% 3.697128% 3.704972% 3.778137% City's proportionate share of the net pension liability $ 22,071 $ 21,398 $ 23,117 $ 17,406 $ 13,696 City's covered payroll 10,743 10,347 10,019 9,716 9,648 City's proportionate share of the net pension liability as a percentage of its covered payroll 205.45% 206.80% 230.73% 179.15% 141.96% Plan fiduciary net position as a percentage of the total pension liability 81.07% 80.60% 78.20% 83.04% 86.27% * In accordance with GASB Statement No. 68, the amounts presented for each fiscal year were determined as of June 30 of the preceding fiscal year. Note: GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10 -year trend is compiled, the City will present information for those years for which information is available. 87 City of Iowa City, Iowa Required Supplementary Information - Schedule of the City's Contributions Municipal Fire and Police Retirement System of Iowa For the Last Ten Years (amounts expressed in thousands) Statutorily required contributions Contributions in relation to the statutorily required contribution Contribution deficiency (excess) City's covered payroll Contributions as a percentage of covered payroll 2019 $ 2,902 2018 $ 2,759 2017 $ 2,682 2016 $ 2,782 (2,902) (2,759) (2,682) (2,782) $ 11,155 $ 10,743 $ 10,347 $ 10,019 26.02% 88 25.68% 25.92% 27.77% 2015 2014 2013 2012 2011 2010 $ 2,955 $ 2,906 $ 2,383 $ 2,277 $ 1,654 $ 1,336 (2,955) (2,906) (2,383) (2,277) (1,654) (1,336) $ 9,716 $ 9,648 $ 9,122 $ 9,197 $ 8,310 $ 7,860 30.41% 30.12% 26.12% 24.76% 19.90% 17.00% 89 City of Iowa City, Iowa Notes to Required Supplementary Information - Pension Liability Municipal Fire and Police Retirement System of Iowa Year ended June 30, 2019 Changes of benefit terms: There were no significant changes of benefit terms. Changes of assumptions: The 2018 valuation changed postretirement mortality rates on the RP -2014 Blue Collar Healthy Annuitant Table with males set -forward zero years, females set -forward two years and disabled individuals set -forward three years (male only rates), with generational projection of future mortality improvements with 50% of Scale BB beginning in 2017. The 2017 valuation added five years projection of future mortality improvement with Scale BB. The 2016 valuation changed postretirement mortality rates to the RP -2000 Blue Collar Combined Healthy Mortality Table with males set -back two years, females set -forward one year and disabled individuals set -forward one year (male only rates), with no projection of future mortality improvement. The 2015 valuation phased in the 1994 Group Annuity Mortality Table for postretirement mortality. This resulted in weighting of 1/12 of the 1971 Group Annuity Mortality Table and 11/12 of the 1994 Group Annuity Morality Table. June 30 of the preceding fiscal year. Note: GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10 -year trend is compiled, the City will present information for those years for which information is available. City of Iowa City, Iowa Required Supplementary Information -Schedule of the City's Proportionate Share of the Net Pension Liability Iowa Public Employees' Retirement System For the Last Five Years* (amounts expressed in thousands) 2019 2018 2017 2016 2015 City's proportion of the net pension liability 0.4016869% 0.3968158% 0.3962696% 0.4159256% 0.4378904% City's proportionate share of the net pension liability $ 25,420 $ 26,433 $ 24,938 $ 20,549 $ 17,366 City's covered payroll 30,190 29,619 28,448 28,495 28,654 City's proportionate share of the net pension liability as a percentage of its covered payroll 84.20% 89.24% 87.66% 72.11% 60.61% Plan fiduciary net position as a percentage of the total pension liability 83.62% 82.21% 81.82% 85.19% 87.61% * In accordance with GASB Statement No. 68, the amounts presented for each fiscal year were determined as of June 30 of the preceding fiscal year. Note: GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10 -year trend is compiled, the City will present information for those years for which information is available. City of Iowa City, Iowa Required Supplementary Information - Schedule of the City's Contributions Iowa Public Employees' Retirement System For the Last Ten Years (amounts expressed in thousands) Statutorily required contributions Contributions in relation to the statutorily required contribution Contribution deficiency (excess) City's covered payroll Contributions as a percentage of covered payroll 2019 $ 2,912 2018 $ 2,696 2017 $ 2,645 2016 $ 2,540 (2,912) (2,696) (2,645) (2,540) $ 30,852 $ 30,190 $ 29,619 $ 28,448 9.44% 8.93% 8.93% 8.93% 2015 2014 2013 2012 2011 2010 $ 2,545 $ 2,559 $ 2,442 $ 2,327 $ 1,877 $ 1,780 (2,545) (2,559) (2,442) (2,327) (1,877) (1,780) $ 28,495 $ 28,654 $ 28,170 $ 28,833 $ 27,013 $ 26,764 8.93% 8.93% 8.67% 8.07% 6.95% 6.65% W City of Iowa City, Iowa Notes to Required Supplementary Information - Pension Liability Iowa Public Employees' Retirement System Year ended June 30, 2019 Changes of benefit terms: Legislation passed in 2010 modified benefit terms for current Regular members. The definition of final average salary changed from the highest three to the highest five years of covered wages. The vesting requirement changed from four years of service to seven years. The early retirement reduction increased from 3% per year measured from the member's first unreduced retirement age to a 6% reduction for each year of retirement before age 65. Changes of assumptions: The 2018 valuation implemented the following refinements as a result of an experience study dated June 28, 2018: • Changed mortality assumptions to the RP -2014 mortality tables with mortality improvements modeled using Scale MP -2017. • Adjusted retirement rates. • Lowered disability rates • Adjusted the probability of a vested Regular member electing to receive a deferred benefit. • Adjusted the merit component of the salary increase assumption. The 2017 valuation implemented the following refinements as a result of an experience study dated March 24, 2017: • Decreased the inflation assumption from 3.00% to 2.60%. • Decreased the assumed rate of interest on member accounts from 3.75% to 3.5% per year. • Decreased the discount rate from 7.50% to 7.00%. • Decreased the wage growth assumption from 4.00% to 3.25%. • Decreased the payroll growth assumption from 4.00% to 3.25%. The 2014 valuation implemented the following refinements as a result of a quadrennial experience study: • Decreased the inflation assumption from 3.25% to 3.00% • Decreased the assumed rate of interest on member accounts from 4.00% to 3.75% per year. r•' • Adjusted male mortality rates for retirees in the Regular membership group. • Moved from an open 30 year amortization period to a closed 30 year amortization period for the UAL beginning June 30, 2014. Each year thereafter, changes in the UAL from plan experience will be amortized on a separate closed 20 year period. The 2010 valuation implemented the following refinements as a result of a quadrennial experience study: • Adjusted retiree mortality assumptions. • Modified retirement rates to reflect fewer retirements. • Lowered disability rates at most ages. • Lowered employment termination rates • Generally increased the probability of terminating members receiving a deferred retirement benefit. • Modified salary increase assumptions based on various service duration. M City of Iowa City, Iowa Required Supplementary Information - Schedule of Changes in the City's Total OPEB Liability, Related Ratios and Notes For the Last Two Years (amounts expressed in thousands) Service Cost Interest Difference between expected and actual experience Changes in assumptions Benefit payments Net change in total OPEB liability Total OPEB liability beginning of year Total OPEB liability end of year City's covered -employee payroll Total OPEB liability as a percentage of covered -employee payroll 2019 $ 553 297 1,161 225 (948) 1,288 2018 $ 502 245 (377) 982 (174) 1,178 $ 42,007 $ 40,933 21.13% 18.54% Note: GASB Statement No. 75 requires ten years of information to be presented in this table. However, until a full 10 -year trend is compiled, the City will present information for those years for which information is available. Changes ofbenefit terms: There were no significant changes of benefit terms. Chances ofassumntions Changes in assumptions and other inputs reflect the effects of changes in the discount rate each period. The following are the discount rates used in each period. Year ended June 30, 2019 3.51% Year ended June 30, 2018 3.87% r� NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special Revenue Funds account for revenues derived from specific sources that are required to be accounted for as separate funds. The funds in this category and their purpose are as follows: Economic Development Fund — accounts for revenue and expenditures of economic development activities. Community Development Block Grant Fund — accounts for revenue from the U.S. Department of Housing and Urban Development's Community Development Block Grant programs. Metropolitan Planning Organization of Johnson County Fund — accounts for the financial activities of the metropolitan/rural cooperative planning organization. �r7 rE CITY OF IOWA CITY COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS June 30, 2019 (amounts expressed in thousands) Special Revenue Metropolitan Community Planning Development Organization Economic Block of Johnson Development Grant County Total Assets Equity in pooled cash and investments $ 994 $ - $ 305 $ 1,299 Receivables: Property tax 377 - - 377 Interest 9 - 2 11 Notes - 3,557 - 3,557 Due from other governments - 66 65 131 Total assets $ 1,380 $ 3,623 $ 372 $ 5,375 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable $ 45 $ 5 $ - $ 50 Accrued liabilities - 5 17 22 Advances from other funds - 56 - 56 Total liabilities 45 66 17 128 Deferred inflows of resources: Unavailable revenues: Succeeding year property taxes 357 - - 357 Total deferred inflows of resources 357 - - 357 Fund balances: Restricted 993 3,557 355 4,905 Unassigned (15) - - (15) Total fund balances 978 3,557 355 4,890 Total liabilities, deferred inflows of resources and fund balances $ 1,380 $ 3,623 $ 372 $ 5,375 rE CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended June 30, 2019 (amounts expressed in thousands) Revenues Property taxes Intergovernmental Use of money and property Miscellaneous Total revenues Expenditures Current: Community and economic development Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (Uses) Transfers in Transfers out Total other financing sources and (uses) Net change in fund balances Fund Balances, Beginning Fund Balances, Ending 816 1,387 619 2,822 2,181 (63) (240) 1,878 176 3 333 512 (2,904) (214) - (3,118) (2,728) (211) 333 (2,606) (547) (274) 93 (728) 1,525 3,831 262 5,618 $ 978 $ 3,557 $ 355 $ 4,890 Me Special Revenue Metropolitan Community Planning Development Organization Economic Block of Johnson Development Grant County Total $ 2,928 $ - $ - $ 2,928 35 1,132 365 1,532 34 36 7 77 - 156 7 163 2,997 1,324 379 4,700 816 1,387 619 2,822 2,181 (63) (240) 1,878 176 3 333 512 (2,904) (214) - (3,118) (2,728) (211) 333 (2,606) (547) (274) 93 (728) 1,525 3,831 262 5,618 $ 978 $ 3,557 $ 355 $ 4,890 Me 100 INTERNAL SERVICE FUNDS Internal Service Funds account for goods and services provided by one department to other City departments on a cost -reimbursement basis. The funds in this category are: Equipment Maintenance Fund — accounts for the provision of maintenance for City vehicles, equipment and vehicle rental from a central vehicle pool, and two-way radios provided to other City departments. Central Services Fund — accounts for the support services of photocopying, mail and overnight shipping provided to other City departments. Loss Reserve Fund — accounts for the property, liability, Workers' Compensation and health insurance premiums and claims activity for City departments, including the self-insured retention portion. Information Technology Fund — accounts for the accumulation and allocation of costs associated with telecommunications and data processing, including the operation and replacement of equipment. 101 102 CITY OF IOWA CITY COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS June 30, 2019 (amounts expressed in thousands) Equipment Central Loss Information Maintenance Services Reserve Technology Total Assets Current assets: Equity in pooled cash and investments $ 15,766 $ 710 $ 15,075 $ 3,232 $ 34,783 Receivables: Accounts and unbilled usage - - 292 - 292 Interest 77 5 158 22 262 Due from other governments 29 - - - 29 Inventories 515 - - - 515 Total current assets 16,387 715 15,525 3,254 35,881 Noncurrent assets: Capital assets: Land 45 - - - 45 Buildings 1,298 - 183 1,481 Improvements other than buildings 50 - - 50 Machinery and equipment 20,386 145 19 1,469 22,019 Infrastructure - - - 3,040 3,040 Accumulated depreciation (12,208) (93) (19) (1,352) (13,672) Construction in progress 116 - - 85 201 Total noncurrent assets 9,687 52 - 3,425 13,164 Total assets 26,074 767 15,525 6,679 49,045 Deferred Outflows of Resources Pension related deferred outflows 169 5 33 171 378 OPEB related deferred outflows 40 3 3 30 76 Total deferred outflows of resources 209 8 36 201 454 Liabilities Current liabilities: Accounts payable 170 12 219 227 628 Accrued liabilities 34 1 3,564 36 3,635 Employee vested benefits 46 2 3 19 70 Total current liabilities 250 15 3,786 282 4,333 Noncurrent liabilities: Employee vested benefits 35 1 2 16 54 Net pension liability 632 21 126 676 1,455 Other post employment benefits liability 171 13 13 132 329 Total noncurrent liabilities 838 35 141 824 1,838 Total liabilities 1,088 50 3,927 1,106 6,171 Deferred Inflows of Resources Pension related deferred inflows 45 1 9 48 103 OPEB related deferred inflows 6 - 4 10 51 1 9 52 113 Net Position Net investment in capital assets 9,687 52 - 3,425 13,164 Unrestricted 15,457 672 11,625 2,297 30,051 Total net position $ 25,144 $ 724 S 11,625 $ 5,722 $ 43,215 102 CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS For the Year Ended June 30, 2019 (amounts expressed in thousands) 103 Equipment Central Loss Information Maintenance Services Reserve Technology Total Operating Revenues: Charges for services $ 6,806 $ 236 $ 10,681 $ 2,369 $ 20,092 Total operating revenues 6,806 236 10,681 2,369 20,092 Operating Expenses: Personal services 1,073 38 207 1,059 2,377 Commodities 1,878 10 81 521 2,490 Services and charges 529 112 11,466 306 12,413 3,480 160 11,754 1,886 17,280 Depreciation 1,739 25 - 254 2,018 Total operating expenses 5,219 185 11,754 2,140 19,298 Operating income (loss) 1,587 51 (1,073) 229 794 Nonoperating Revenues: Gain (loss) on disposal of capital assets 207 - - (236) (29) Interest income 315 17 290 70 692 Total nonoperating revenues 522 17 290 (166) 663 Income (loss) before transfers 2,109 68 (783) 63 1,457 Transfers in 511 - - 722 1,233 Transfers out (123) (100) (21) (180) (424) Change in net position 2,497 (32) (804) 605 2,266 Net Position, Beginning 22,647 756 12,429 5,117 40,949 Net Position, Ending $ 25,144 $ 724 $ 11,625 $ 5,722 $ 43,215 103 CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended June 30, 2019 (amounts expressed in thousands) Equipment Central Loss Information Maintenance Services Reserve Technology Total Cash Flows From Operating Activities (19) (72) 316 2,291 13,700 Receipts from customers and users $ 6,828 $ 236 $ 10,484 $ 2,369 $ 19,917 Payments to suppliers (2,454) (116) (10,569) (697) (13,836) Payments to employees (1,053) (38) (207) (968) (2,266) Net cash flows from (used for) operating activities 3,321 82 (292) 704 3,815 Cash Flows From Noncapital Financing Activities Transfers to other funds Net cash flows used for 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 used for 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 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 Employee vested benefits Net pension liability Deferred outflows of resources Deferred inflows of resources Other post employment benefits liability Total adjustments Net cash flows from (used for) operating activities Noncash Investing, Capital, and Financing Activities: Contributions of capital assets from government and others Contributions of capital assets to government and others (123) (100) (21) (180) (424) (123) (100) (21) (180) (424) (1,733) (17) (278) (2,028) 251 - 5 256 (1,482) (17) (273) (1,772) 350 16 241 65 672 2,066 (19) (72) 316 2,291 13,700 729 15,147 2,916 32,492 6 6 $ 15,766 $ 710 $ 15,075 $ 3,232 $ 34,783 $ 1,587 $ 51 $ (1,073) $ 229 $ 794 1,739 25 254 2,018 - (197) (197) 22 - 22 6 6 (53) 6 4 130 87 (2) - 975 - 973 5 1 4 10 (11) - (8) 56 37 (7) (1) 3 (2) (7) 10 (1) 1 14 24 25 2 2 19 48 1,734 31 781 475 3,021 $ 3,321 $ 82 $ (292) $ 704 $ 3,815 $ 511 $ - $ - $ 722 $ 1,233 $ $ $ 21 $ - $ 21 104 AGENCY FUND The Agency Fund accounts for assets held by the City in a trustee or custodial capacity for other entities, such as individuals, private organizations, or other governmental units. The fund in this category is: Project Green Fund — accounts for donations that are received to plant and develop yards and lawns, both public and private, within Iowa City. 105 CITY OF IOWA CITY STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended June 30, 2019 (amounts expressed in thousands) Balance Balance July 1, 2018 Increases Decreases June 30, 2019 Project Green Assets Equity in pooled cash and investments Interest receivable Total assets Liabilities Accounts payable Due to agency Total liabilities $ 150 $ 63 $ 92 $ 121 1 1 1 1 $ 151 $ 64 $ 93 $ 122 $ 12 $ 30 $ 12 $ 30 139 34 81 92 $ 151 $ 64 $ 93 $ 122 106 Statistical S ection Tabs Statistical Section This part of the City of Iowa City's comprehensive annual financial report represents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Contents Page Financial Trends 109 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 114 These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity 124 These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. Demographic and Economic Information 134 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. Operating Information 136 These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial report for the relevant year. 107 108 Governmental activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position Business -type activities Net investment in capital assets Restricted Unrestricted Total business -type activities net position Primary government Net investment in capital assets Restricted Unrestricted Total primary government net position CITY OF IOWA CITY, IOWA NET POSITION BY COMPONENT Last Ten Fiscal Years (Accrual basis of accounting) (amounts expressed in thousands) 2010 2011 2012 2013' 2014 2015 2016' 2017 2018 2019 $ 111,703 $ 123,935 $ 135,998 $ 133,989 $ 138,482 $ 153,729 $ 163,362 $ 183,651 $ 203,077 $ 208,028 25,588 31,179 35,021 22,867 39,958 36,447 42,154 47,676 41,490 38,819 32,478 36,862 38,906 50,744 39,758 15,520 18,402 16,264 17,646 20,124 $ 169,769 $ 191,976 $ 209,925 $ 207,600 $ 218,198 $ 205,696 $ 223,918 $ 247,591 $ 262,213 $ 266,971 $ 172,601 $ 186,177 $ 195,073 $ 253,617 $ 264,727 $ 279,272 $ 279,679 $ 285,912 $ 294,109 $ 304,111 17,588 20,658 20,176 19,033 19,438 22,389 22,269 21,238 22,219 18,055 65,725 61,032 58,850 74,370 71,542 57,367 69,472 76,664 73,126 77,224 $ 255,914 -$-2:67 ,867 -$-2:74 ,099 -$-3:47 ,020 _$_3 55,707 _$_3 59,028 -$-3:71 ,420 _$_3 83,814 _$_3 89,454 $ 399,390 $ 284,304 $ 310,112 $ 331,071 $ 387,606 $ 403,209 $ 433,001 $ 443,041 $ 469,563 $ 497,186 $ 512,139 43,176 51,837 55,197 41,900 59,396 58,836 64,423 68,914 63,709 56,874 98,203 97,894 97,756 125,114 111,300 72,887 87,874 92,928 90,772 97,348 $ 425,683 $ 459,843 $ 484,024 $ 554,620 $ 573,905 $ 564,724 $ 595,338 _L631,405 $ 651,667 $ 666,361 I The City of Iowa City reclassified the Mass Transportation Fund from the General fund to an Enterprise Fund effective the fiscal year ending June 30, 2013. ' The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015. 109 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 Transit 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 giants 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 Transit' 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 Capital grants and contributions: Housing authority Capital grants and contributions: Parking Capital grants and contributions: Transit 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 Operating grants and contributions: Stormwater Operating grants and contributions: Transit Total business -type activities program revenues Total primary government revenues Net (Expense)/ Revenues Governmental activities Business -type activities Total primary government net expense General Revenues and Other Changes in Net Position Governmental activities: General revenues: Property taxes Road use tax Local Sales Option tax Other taxes Grants and contributions not restricted to specific purposes Earnings on investments Miscellaneous Gain on sale ofassets Transfers Reassignments Total governmental activities CITY OF IOWA CITY, IOWA CHANGES IN NET POSITION Last Ten Fiscal Years (Accrual basis of accounting) (amounts expressed in thousands) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 $ 19,955 $ 18,867 $ 21,186 $ 20,989 $ 22,721 $ 21,193 $ 22,029 $ 24,002 $ 25,191 $ 26,265 16,806 19,145 17,556 10,240 8,258 11,037 10,839 12,032 12,813 16,324 12,238 10,811 13,107 14,481 16,586 14,049 14,422 15,525 16,363 16,009 16,913 16,501 16,305 10,596 10,059 7,093 6,786 8,253 12,019 16,022 7,549 7,356 7,591 7,513 7,687 7,752 6,240 6,124 6,858 7,524 2,970 2,841 2,400 2,237 1,797 1,517 1,287 1,481 1,414 1,444 76,431 75,521 78,145 66,056 67,108 62,641 61,603 67,417 74,658 83,588 11,274 10,971 11,069 10,464 21,139 12,131 11,866 11,233 11,392 11,413 8,309 8,523 8,781 9,074 8,723 8,403 8,149 8,921 9,472 9,543 7,705 7,461 8,315 7,279 8,402 8,114 8,735 9,123 9,408 10,858 7,838 7,448 7,911 7,658 7,703 7,873 8,378 8,798 9,535 10,170 4,536 4,135 4,167 4,579 4,093 4,678 4,460 4,620 5,590 5,461 724 1,049 1,127 1,086 1,209 1,612 1,597 1,402 1,680 1,466 1,187 1,418 1,304 1,318 1,314 2,091 1,989 2,432 1,844 1,832 645 638 689 692 781 704 - - - - 6,998 7,795 7,379 7,486 7,263 8,071 8,833 42,218 41,643 43,363 49,148 61,159 52,985 52,660 53,792 56,992 59,576 $ 118,649 $ 117,164 $ 121,508 $ 115,204 $ 128,267 $ 115,626 $ 114,263 $ 121,209 $ 131,650 $ 143,164 $ 2,980 $ 3,279 $ 3,401 $ 4,098 $ 3,626 $ 3,926 $ 4,813 $ 5,286 $ 4,438 $ 4,870 1,061 1,117 1,112 52 61 388 628 724 62 290 773 872 825 775 808 801 823 842 836 854 - - - - 45 50 1,044 36 441 548 2,574 2,931 2,817 2,763 3,030 2,975 1,252 1,524 1,520 1,717 15,554 13,517 8,682 4,731 3,231 8,701 9,941 10,828 10,245 13,758 8,291 6,048 6,078 6,876 5,580 11,556 3,999 9,952 1,459 1,972 31,233 27,764 22,915 19,295 16,381 28,397 22,500 29,192 19,001 24,009 12,637 12,836 12,670 12,832 12,559 12,189 12,266 12,277 12,626 12,831 7,957 8,054 8,419 8,583 8,443 8,527 9,134 9,275 9,473 9,640 8,096 8,259 8,115 8,181 8,467 9,015 9,215 9,927 10,014 10,017 180 208 207 205 213 237 300 321 323 295 5,377 5,234 4,743 5,043 5,294 5,502 5,438 5,453 5,648 5,982 289 293 306 314 328 349 333 345 348 361 617 641 811 974 1,093 1,147 1,168 1,544 1,560 1,568 790 809 824 816 773 750 - - - - - - - 2,117 2,185 2,289 2,099 2,089 2,216 2,171 2,115 2,394 3,223 30,181 7,105 1,370 3,415 2,226 1,913 1,827 572 973 977 494 539 581 254 869 483 488 6 - 2 - - - - - 22 13 3,311 358 1,576 2,452 5,214 137 260 58 49 38 541 140 436 226 711 792 370 1,251 892 902 25 11 - - - - - - - - - 269 4 - - - - - - - - - - 898 243 - 308 395 3,827 - 7,765 7,438 6,782 6,968 6,721 7,628 8,318 8,532 9,065 9,443 6 - - 442 6 2 - - - - - - - 11 56 232 128 69 72 14 6 10 - 23 27 25 3 - 3 104 - - - - 62 21 - - - - - - - 13 13 279 95 - 2 - 1,767 2,118 2,082 2,095 2,235 2,088 2,152 50,290 47,927 49,095 82,540 62,170 53,154 55,199 56,866 60,624 57,846 $ 81,523 $ 75,691 $ 72,010 $ 101,835 $ 78,551 $ 81,551 $ 77,699 $ 86,058 $ 79,625 $ 81,855 $ (45,198) $ (47,757) $ (55,230) $ (46,761) $ (50,727) $ (34,244) $ (39,103) $ (38,225) $ (55,657) $ (59,579) 8,072 6,284 5,732 33,392 1,011 169 2,539 3,074 3,632 (1,730) $ 49,467 $ 48,011 $ 50,516 $ 51,017 $ 50,551 $ 52,205 $ 53,114 $ 57,649 $ 59,046 $ 61,739 5,525 6,068 6,394 6,589 6,745 - - - - - 8,141 8,911 8,644 8,858 466 - - - - - 1,535 2,464 2,491 2,609 2,778 2,810 2,717 2,802 2,706 2,935 - - - - - 1,048 2,080 1,583 1,547 1,552 1,766 1,539 1,823 841 973 1,188 1,045 1,397 2,368 3,257 3,893 6,230 4,228 4,390 4,353 5,518 4,464 3,369 3,656 3,329 - 761 2,950 1,312 1,651 135 218 2,151 140 186 (625) (4,020) (3,867) (10,485) (6,192) (10,057) (6,395) (7,053) 1,814 (8,661) 82 69,702 69,964 73,179 65,131 61,325 52,847 57,325 61,898 71,277 64,337 110 (continued) CITY OF IOWA CITY, IOWA CHANGES IN NET POSITION (continued) Last Ten Fiscal Years (Accrual basis of accounting) (amounts expressed in thousands) 2 The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015. a The City of Iowa City reclassified Road Use Tax from General Revenues to Operating Grants effective for the fiscal year ending June 30, 2015. 111 2010 2011 2012 2013 2014 2015 2� 2017 2018 2019 Business -type activities: General revenues: Earnings on investments 1,311 954 813 671 494 707 715 938 1,496 2,166 Gain on sale of assets 230 314 336 293 725 856 2,463 69 2,438 1 Miscellaneous 464 381 484 918 265 374 362 1,260 456 838 Transfers 625 4,020 3,867 10,485 6,192 10,057 6,395 7,053 (1,814) 8,661 Reassignments - - - - - - (82) - - - Special items - - - - - (574) - - - - Extraordinary items (5,000) Total business -type activities 2,630 5,669 500 12,367 7,676 11,420 9,853 9,320 2,576 11,666 Total primary government $ 72,332 $ 75,633 $ 73,679 $ 77,498 $ 69,001 $ 64,267 $ 67,178 $ 71,218 $ 73,853 $ 76,003 Change in Net Position Governmental activities $ 24,504 $ 22,207 $ 17,949 $ 18,370 $ 10,598 $ 18,603 $ 18,222 $ 23,673 $ 15,620 $ 4,758 Business -type activities 10,702 11,953 6,232 45,759 8,687 11,589 12,392 12,394 6,208 9,936 Total primary government $ 5 b� -77F $fid i$F - 1= -_T I �367T� $moi The City of Iowa City reclassified the Mass Transportation Fund from the General Fund to an Enterprise Fund effective the fiscal year ending June 30, 2013. 2 The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015. a The City of Iowa City reclassified Road Use Tax from General Revenues to Operating Grants effective for the fiscal year ending June 30, 2015. 111 General Fund Nonspendable Restricted Committed Assigned Reserved Unassigned Unreserved Total general fund All other Governmental Funds Nonspendable Restricted Reserved Designated for long-term debt Unassigned Unreserved, reported in: Special revenue funds Capital projects funds Total all other governmental funds CITY OF IOWA CITY, IOWA FUND BALANCES, GOVERNMENTAL FUNDS Last Ten Fiscal Years (Modified accrual basis of accounting) (amounts expressed in thousands) 2010 2011 2012 2013' 2014 2015 20163 2017 2018 2019 $ - $ 331 $ 314 $ 69 $ 69 $ 69 $ 69 $ 788 $ 793 $ 887 16,268 23,779 25,689 26,533 25,291 18,975 9,974 1,942 1,808 - - - - - 4,699 5,199 4,962 - 3,542 5,191 1,744 3,400 - 1,143 1,342 1,437 3,565 406 - - - - 4,483 - - - - - 15,931 14,273 17,113 17,907 19,286 23,366 24,793 28,516 34,358 26,101 - - - - - - - - - $ 26,507 $ 36,072 $ 43,557 $ 44,615 $ 47,909 $ 49,129 $ 48,252 $ 42,096 $ 37,650 $ 40,618 $ - $ - $ - $ - $ - $ - $ - $ 344 $ 165 $ 224 34,889 34,853 28,108 31,285 27,897 38,266 63,941 64,033 50,966 3,903 - - - - - - - - - 13,952 - - - - - (1,741) (366) (5,844) (9) - - - (38) (59) (1,674) - - - - - - - - - 8,043 - $ 24,224 $ 33,148 $ 34,487 $ 22,264 $ 31,276 $ 27,897 $ 38,266 $ 64,285 $ 64,160 $ 51,131 1 The City of Iowa City implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, issued March 2009, effective the fiscal year ending June 30, 2011. This Statement establishes new standards for fund balance classifications based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. 1 The City of Iowa City reclassified the Mass Transportation Fund from the General fund to an Enterprise Fund effective the fiscal year ending June 30, 2013. 3 The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015. 112 Revenues: Property taxes and assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Use of money and property Miscellaneous Total governmental activities revenues 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 Issuance of refunding debt Sale of capital assets Insurance Recoveries 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 CITY OF IOWA CITY, IOWA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) 2010 2011 2012 2013' 2014 2015 2016' 2017 2018 2019 $ 59,143 $ 59,387 $ 61,649 $ 62,483 $ 53,797 $ 55,014 $ 55,831 $ 60,452 $ 61,753 $ 64,672 1,211 1,412 1,307 1,784 1,660 1,806 3,056 3,521 2,734 2,981 31,404 29,870 21,952 19,941 17,636 21,086 20,230 24,140 14,944 16,828 2,433 2,515 2,614 1,800 1,819 2,204 3,357 2,355 2,295 2,690 - - - - - - 760 750 695 776 1,599 1,479 1,768 782 909 1,080 946 1,235 1,937 2,564 4,784 7,749 5,750 6,325 6,040 7,045 2,913 2,101 2,875 2,261 $ 100,574 $ 102,412 $ 95,040 $ 93,115 $ 81,861 $ 88,235 $ 87,093 $ 94,554 $ 87,233 $ 92,772 $ 19,108 $ 18,717 $ 20,091 $ 20,648 $ 21,370 $ 21,996 $ 21,701 $ 22,513 $ 23,360 $ 24,295 13,311 14,766 15,462 8,503 8,432 12,071 9,466 9,186 10,052 10,894 11,266 12,498 13,075 13,000 13,087 11,821 12,257 13,341 14,208 13,709 10,520 8,878 8,037 8,219 8,196 5,711 5,346 7,695 11,074 15,723 7,191 7,695 7,553 7,286 7,184 7,608 6,007 5,882 6,017 6,579 9,354 10,386 13,294 16,465 13,560 12,564 13,230 13,305 11,895 12,080 3,064 2,889 2,543 2,339 1,903 1,669 1,475 1,597 1,570 1,589 17,690 21,873 16,006 17,861 14,528 14,762 14,848 18,405 28,225 22,632 $ 91,504 $ 97,702 -T--96,061 $ 94,321 $ 88,260 $ 88,202 $ 84,330 $ 91,924 $ 106,401 $ 107,501 $ 9,070 $ 4,710 $ (1,021) $ (1,206) $ (6,399) $ 33 $ 2,763 $ 2,630 $ (19,168) $ (14,729) $ - $ 16,165 $ 9,690 $ 2,655 $ 19,730 $ 7,785 $ 9,405 $ 22,570 $ 11,995 $ 12,535 $ 10,930 - - - - - - - - 222 845 3,619 1,369 1,684 165 252 2,292 140 758 20 594 53 - - - - - - - 394 165 (42) 385 199 441 120 236 81 (11,085) - - - - - - - - 16,742 18,658 19,499 25,198 13,040 13,089 25,133 34,675 34,666 25,663 (17,446) (22,722) (23,181) (35,493) (16,134) (23,430) (28,502) (47,033) (32,440) (34,369) $ (462) $ 13,779 $ 9,845 $ (6,313) $ 18,705 $ (2,192) $ 6,729 $ 12,624 $ 14,597 $ 4,668 $ 8,608 $ 18,489 $ 8,824 _L__L7,5191 $ 12,306 $ (2,159) $ 9,492 $ 15,254 $ (4,571) $ (10,061) 15.3% 16.2% 18.6% 24.0% 20.7% 19.8% 21.2% 19.9% 17.1% 15.6% I The Cityof Iowa City reclassified the Mass Transportation Fund from the General fund to an Enterprise Fund effective the fiscal year ending June 30, 2013. ' The City of Iowa City reclassified the Cable Fund from an Enterprise Fund to the General Fund effective July 1, 2015. 113 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 Local Option Utility Year Property Tax Road Use Tax Hotel/Motel Tax Sales Tax' Franchise Feel Total 2010 50,256 5,525 699 8,141 47 64,668 2011 48,831 6,068 776 8,912 868 65,455 2012 51,374 6,394 811 8,644 822 68,045 2013 51,836 6,589 872 8,858 918 69,073 2014 51,331 6,745 967 466 1,031 60,540 2015 53,056 7,231 1,057 - 902 62,246 2016 53,878 8,320 1,079 874 64,151 2017 58,375 8,672 1,137 939 69,123 2018 59,730 8,427 1,046 976 70,179 2019 62,407 8,820 1,302 965 73,494 ' 1% Local Option Sales Tax went into effect 7/1/09 and was effective through 6/30/13 Z 1% Utility Franchise Fee went into effect 4/1/10. 114 CITY OF IOWA CITY, IOWA ASSESSED AND TAXABLE VALUE OF PROPERTY Last Ten Fiscal Years Assessed Valuation Tax Collection Year: FY2019 FY2018 FY2017 FY2016 FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 Residential $ 4,255,597,838 $ 4,001,761,478 $ 3,882,757,454 $ 3,603,743,609 $ 3,488,112,611 $ 3,367,051,717 $ 3,284,249,136 $ 3,182,636,485 $ 3,122,874,615 $ 3,065,278,624 Agricultural (taxed at Ag rate) 2,625,810 3,425,692 3,720,671 3,553,520 3,680,920 2,655,640 2,516,440 2,263,884 2,314,823 1,499,347 Multi -Residential 471,420,082 411,460,472 410,426,868 - - - - - - - Commercial 915,964,068 821,949,555 805,734,128 1,129,397,979 1,144,437,631 1,113,600,025 1,149,535,927 1,146,182,052 1,139,935,432 1,055,126,085 Industrial 71,553,904 72,635,554 73,206,895 74,399,739 80,153,614 72,834,630 73,400,730 73,044,725 72,283,702 67,288,971 Railroads 3,549,414 3,984,932 4,096,577 4,015,580 3,827,506 3,205,451 2,619,932 1,799,383 1,593,188 2,098,465 Utilities w'out Gas & Electric 7,099,293 6,734,894 7,375,066 8,239,789 9,599,528 10,816,940 11,051,685 10,729,898 9,491,730 9,304,801 Gross valuation 5,727,810,409 5,321,952,577 5,187,317,659 4,823,350,216 4,729,811,810 4,570,164,403 4,523,373,850 4,416,656,427 4,348,493,490 4,200,596,293 Less: Military exemption 2,579,836 2,635,396 2,727,994 2,828,002 2,939,122 3,059,502 3,096,542 3,163,216 3,239,146 3,324,338 Net valuation 5,725,230,573 5,319,317,181 5,184,589,665 4,820,522,214 4,726,872,688 4,567,104,901 4,520,277,308 4,413,493,211 4,345,254,344 4,197,271,955 Incremental value 85,379,709 80,577,275 72,666,677 42,307,287 21,131,574 14,113,908 11,712,327 25,408,838 25,408,841 117,812,738 Gas and Electric Utilities 97,050,716 94,582,279 92,987,351 87,728,294 78,642,915 87,100,183 83,538,109 81,240,051 79,196,417 61,065,832 Total Assessed valuation $ 5,907,660,998 $ 5,494,476,735 $ 5,350,243,693 $ 4,950,557,795 $ 4,826,647,177 $ 4,668,318,992 $ 4,615,527,744 $ 4,520,142,100 $ 4,449,859,602 $ 4,376,150,525 Percent change 7.520% 2.696% 8.074% 2.567% 3.392% 1.144% 2.110% 1.579% 1.684% 2.639% Taxable Valuation Tax Collection Year: FY2019 FY2018 FY2017 FY2016 FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 Assessment Limitation: Residential rollback 55.6209% 56.9391% 55.6259% 55.7335% 54.4002% 52.8166% 50.7518% 48.5299% 46.9094% 45.5893% Agricultural rollback 54.4480% 47.4996% 46.1068% 44.7021% 43.3997% 59.9334% 57.5411% 69.0152% 66.2715% 93.8568% Multi -Residential rollback 78.75% 82.50% 86.25% NA NA NA NA NA NA NA Commercial and Railroad rollback 90.0% 90.0% 90.0% 90.0% 95.0% NA NA NA NA NA Industrial rollback 90.0% 90.0% 90.0% 90.0% 95.0% NA NA NA NA NA Residential $ 2,356,529,643 $ 2,274,451,551 $ 2,155,033,296 $ 2,008,493,138 $ 1,894,079,854 $ 1,776,096,066 $ 1,666,036,081 $ 1,544,260,536 $ 1,464,643,790 $ 1,384,088,145 Agricultural (taxed at Ag rate) 1,429,547 1,618,090 1,706,955 1,588,496 1,597,501 1,591,636 1,447,988 1,562,422 1,534,056 1,407,234 Multi -Residential 368,969,925 337,946,106 353,335,857 - - - - - - - Commercial 819,505,276 734,200,396 720,036,878 1,016,458,199 1,086,556,293 1,113,600,025 1,149,535,927 1,146,182,052 1,139,935,432 1,055,126,085 Industrial 64,152,540 64,688,055 65,301,535 66,959,765 76,128,877 72,834,630 73,400,730 73,044,725 72,283,702 67,288,971 Railroads 3,194,473 3,586,439 3,686,919 3,614,022 3,636,130 3,205,451 2,619,932 1,799,383 1,593,188 2,098,465 Utilities w'out Gas & Electric 7,099,293 6,734,894 7,375,066 8,239,789 9,599,528 10,816,940 11,051,685 10,729,898 9,491,730 9,304,801 Gross valuation 3,620,880,697 3,423,225,531 3,306,476,506 3,105,353,409 3,071,598,183 2,978,144,748 2,904,092,343 2,777,579,016 2,689,481,898 2,519,313,701 Less: Military exemption 2,579,836 2,635,396 2,727,994 2,828,002 2,939,122 3,059,502 3,096,542 3,163,216 3,239,146 3,324,338 Net valuation 3,618,300,861 3,420,590,135 3,303,748,512 3,102,525,407 3,068,659,061 2,975,085,246 2,900,995,801 2,774,415,800 2,686,242,752 2,515,989,363 Incremental value 85,379,369 80,559,947 72,650,838 33,331,128 21,131,574 14,113,908 11,712,327 25,408,838 25,408,841 117,812,738 Gas and Electric Utilities 41,797,475 41,702,196 44,986,783 46,785,426 47,004,994 46,813,214 47,404,050 48,337,968 46,333,208 45,156,750 Total Taxable Valuation $ 3,745,477,705 $ 3,542,852,278 $ 3,421,386,133 $ 3,182,641,961 $ 3,136,795,629 $ 3,036,012,368 $ 2,960,112,178 $ 2,848,162,606 $ 2,757,984,801 $ 2,678,958,851 Percent change 5.719% 3.550% 7.501% 1.462% 3.320% 2.564% 3.931% 3.270% 2.950% 4.371% Total Direct Tax Rate City of Iowa City $ 16.183 $ 16.333 $ 16.583 $ 16.651 $ 16.705 $ 16.805 $ 17.269 $ 17.842 $ 17.757 $ 17.853 Sources: Iowa Department of Management Notes: Property is reassessed in the odd numbered years to make adjustments to all property values, according to current market values. As per the Code of Iowa, all real property subject to taxation shall be valued at its actual value and, except as otherwise provided, shall be reassessed at 100% of its actual value. 115 CITY OF IOWA CITY, IOWA PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Fiscal Years (per $1,000 assessed valuation) Fiscal Year: 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 Levy Year: 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 City: General Fund $ 8.10000 $ 8.10000 $ 8.10000 $ 8.10000 $ 8.10000 $ 8.10000 $ 8.10000 $ 8.10000 $ 8.10000 $ 8.10000 Emergency Levy 0.25607 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 Debt Service Fund 4.21934 4.43847 4.64901 4.44287 4.02965 4.12963 3.92833 3.82846 3.57846 3.22846 Employee Benefits 3.63680 3.58146 3.52580 3.19286 3.16331 2.96331 3.11277 3.14415 3.14415 3.34415 Capital Improvement 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 Other 1.64041 1.63662 1.56669 1.53291 1.51226 1.51226 1.50986 1.51044 1.51044 1.51044 Total City $ 17.85262 $ 17.75655 $ 17.84150 $ 17.26864 $ 16.80522 $ 16.70520 $ 16.65096 $ 16.58305 $ 16.33305 $ 16.18305 Johnson County $ 7.38568 $ 7.22207 $ 6.98984 $ 6.74909 $ 6.73712 $ 6.74168 $ 6.90337 $ 6.77140 $ 6.85143 $ 6.53594 Iowa City Community School District 14.19136 14.68972 14.59055 14.07327 13.68792 13.69999 13.86773 13.98935 13.95855 14.85629 Kirkwood 0.84042 0.92566 0.99870 1.07888 1.06473 1.05754 1.06125 1.08048 1.13174 1.20354 Other 0.32561 0.32119 0.33310 0.32919 0.37333 0.32315 0.32784 0.32450 0.33036 0.30557 Total Tax Rate $ 40.59569 $ 40.91519 $ 40.75369 $ 39.49907 $ 38.66832 $ 38.52756 $ 38.81115 $ 38.74878 $ 38.60513 $ 39.08439 Source: "Tax Levies for Johnson County, Iowa," compiled by the Johnson County Auditor. Note: Does not include the tax rate for agriculture. Taxpayers in the Iowa City Community School District Area 116 CITY OF IOWA CITY, IOWA LEVIES AND COLLECTIONS Last Ten Fiscal Years (Cash basis of accounting) (amounts expressed in thousands) Source: Certificate of City Taxes and Johnson County Treasurer's Office Note: This schedule is presented on a cash basis of accounting. Taxes are collected by the Johnson County Treasurer and submitted to the City in the following month. Because of the month delay, some years will show Current Tax Collections in excess of the Total Tax Levied. ' Delinquent tax collection is presented by collection year, rather than levy year, because information is not available from Johnson County Treasurer by levy year. 117 Percent of Total as Collection Total Tax Current Tax Levy Delinquent Tax Total Tax a Percent of Year Levied Collections Collected Collections' Collections Levy 2010 45,393 45,318 99.8 17 45,335 99.9 2011 47,789 47,826 100.1 8 47,834 100.1 2012 49,595 49,543 99.9 1 49,544 99.9 2013 50,407 50,139 99.5 3 50,142 99.5 2014 50,307 49,835 99.1 1 49,836 99.1 2015 51,609 51,292 99.4 3 51,295 99.4 2016 52,034 52,074 100.1 0 52,074 100.1 2017 55,330 55,331 100.0 0 55,331 100.0 2018 56,458 56,434 100.0 0 56,434 100.0 2019 59,174 59,252 100.1 2 59,254 100.1 Source: Certificate of City Taxes and Johnson County Treasurer's Office Note: This schedule is presented on a cash basis of accounting. Taxes are collected by the Johnson County Treasurer and submitted to the City in the following month. Because of the month delay, some years will show Current Tax Collections in excess of the Total Tax Levied. ' Delinquent tax collection is presented by collection year, rather than levy year, because information is not available from Johnson County Treasurer by levy year. 117 Sources: 'City of Iowa City Assessor's Office 118 CITY OF IOWA CITY, IOWA PRINCIPAL TAXPAYERS Current Year and Nine Years Ago (amounts expressed in thousands) 2010 2019 % of Total % of Total Taxable Taxable Taxable Taxable Ten largest taxpayers Type ofBusiness Valuation Rank Valuation Valuation Rank Valuation ACT Inc (Am College Testing Prgrm) Educational Testing Service $ 45,553 1 1.03 % $ 51,020 1 1.49 % BBCS Hawkeye Housing LLC Real Estate Mangment - - N/A 45,357 2 1.33 Tailwind Iowa City LLC Real Estate Mangment - - N/A 33,054 3 0.97 Mid -American Energy Company Public Gas and Electric Utility 40,242 2 1.02 29,924 4 0.87 Rise at Riverfront Crossing Owner LLC Real Estate Developer - - N/A 28,415 5 0.83 Vesper Iowa City LLC Real Estate Developer - - N/A 27,191 6 0.79 Ann Gerdin Trust (formerly Russell Gerdin) Warehousing 19,003 3 0.39 25,448 7 0.74 Midwestone Bank Finanacial - - N/A 23,630 8 0.69 Dealer Properties IC LLC (Billion Auto) Car Dealerships - - N/A 21,465 9 0.63 Proctor & Gamble LLC Manufacturing Company 13,752 9 0.29 18,677 10 0.55 Christian Retirement Services (Oaknoll) Retirement Community - - N/A - - N/A SouthGate Development Company RealEstate Developer 18,532 4 0.46 N/A National Computer Systems (Pearson) Information Services 14,317 8 0.38 - - N/A MEHSM LC (Sycamore Mall) Shopping Mall 16,411 5 0.34 N/A Plaza Towers LLC Condo/Hotel/Commercial space 14,575 7 0.32 N/A United Natural Foods Wholesale Distribution Company 13,095 10 0.30 N/A Alpha Inc. Industrial 15,426 6 0.27 - - N/A Total $ 210,906 4.80 % $ 304,181 8.89 % Sources: 'City of Iowa City Assessor's Office 118 119 CITY OF IOWA CITY, IOWA LARGER WATER SYSTEM CUSTOMERS Current Year and Nine Years Ago Sources: City of Iowa City Revenue Division 120 2010 2019 Customer Name Charges Rank Percentage Charges Rank Percentage Proctor & Gamble $ 599,272 1 7.92 % $ 884,980 1 8.73 % Veterans Administration Medical Center 72,671 2 0.96 108,501 2 1.07 Campus Apartments 69,206 3 0.91 69,523 3 0.69 Mercy Hospital 68,177 4 0.90 62,721 4 0.62 Tailwind Iowa City LLC formerly Dolphin Lake 50,696 7 0.67 62,045 5 0.61 Dominium JIT Sry formerly Mark IV Apts 55,672 6 0.74 52,530 6 0.52 Graduate Hotel - - N/A 48,311 7 0.48 Seville Apts 33,442 10 0.44 38,770 8 0.38 Iowa City School District - - N/A 37,848 9 0.37 Emerald Court Apts - - N/A 32,840 10 0.32 Robert's Dairy 59,055 5 0.78 - - N/A Penningroth Apts 49,431 8 0.65 N/A University of Iowa Mayflower 43,246 9 0.57 N/A $ 1,100,868 14.54 % $ 1,398,069 13.79 % Total Water System Charges $ 7,568,378 $ 10,139,587 Sources: City of Iowa City Revenue Division 120 CITY OF IOWA CITY, IOWA SALES HISTORY AND WATER SYSTEM CHARGES Last Ten Fiscal Years Fiscal Water Sales Water System Year Cubic Feet Sold Charp-es 2010 234,342,825 7,568,378 2011 236,838,370 7,661,898 2012 246,618,257 7,953,738 2013 254,616,773 8,194,467 2014 239,790,719 7,778,364 20151 240,423,612 8,161,522 2016 255,524,943 8,758,683 2017 267,511,531 9,156,005 2018 293,046,636 9,953,510 2019 289,055,329 10,139,587 Sources: City of Iowa City Revenue Department Notes: 1Beginning in March 2015, Water Sales by Cubic Feet Sold also includes unbilled usage. 121 Customer Name University of Iowa Proctor & Gamble Iowa City Landfill Veterans Administration Medical Center Mercy Hospital Campus Apartments Dominium JIT Sry formerly Mark IV Apts Tailwind Iowa City LLC formerly Dolphin Lake Seville Apts Graduate Hotel Robert's Dairy Penningroth Apts Total Sewer System Charges Sources: City of Iowa City Revenue Department CITY OF IOWA CITY, IOWA LARGER SEWER SYSTEM CUSTOMERS Current Year and Nine Years Ago 2010 Charges Rank $ 2,010,239 1 1,195,084 2 102,083 5 96,082 7 117,571 4 96,613 6 78,338 10 83,082 9 199,968 3 88,289 8 $ 4,067,349 $ 12,541,905 122 2019 Percentage Charges Rank Percentage 16.03 % $ 2,145,648 1 16.73 % 9.53 1,317,634 2 10.28 0.81 249,780 3 1.95 0.77 133,486 4 1.04 0.94 100,293 5 0.78 0.77 77,874 6 0.61 0.62 60,449 7 0.47 0.66 57,910 8 0.45 N/A 53,432 9 0.42 N/A 50,597 10 0.39 1.59 - - N/A 0.70 - - N/A 32.42 % $ 4,247,103 33.12 % $ 12,822,250 CITY OF IOWA CITY, IOWA SALES HISTORY AND SEWER SYSTEM CHARGES Last Ten Fiscal Years Fiscal Sewer Sales Sewer System Year Cubic Feet Sold Charges 2010 265,375,857 12,541,905 2011 280,303,237 12,748,695 2012 282,134,840 12,784,321 2013 285,472,392 12,883,641 2014 269,494,125 12,3 82,031 20151 266,830,947 12,278,153 2016 270,547,701 12,022,203 2017 277,712,785 12,404,360 2018 283,246,320 12,524,540 2019 288,537,266 12,822,250 Sources: City of Iowa City Revenue Department Notes: 113eginning in March 2015, Sewer Sales by Cubic Feet Sold also includes unbilled usage. 123 Governmental Activities CITY OF IOWA CITY, IOWA RATIOS OF OUTSTANDING DEBT BY TYPE Last Ten Fiscal Years Business -Type Activities 124 General Available Capital General Total Percentage Fiscal Obligation Revenue Line of Loan Obligation Revenue Primary of Personal Per Year Bonds' Bonds' Credit Note Bonds' Bonds' Government Income Capitan 2010 71,791,737 - 2,200,000 210,784 3,731,167 79,281,888 157,215,576 2.56 2,317 2011 77,743,957 - 2,550,000 210,784 3,130,849 75,857,306 159,492,896 2.38 2,313 2012 74,225,654 - 2,318,225 210,784 1,483,473 69,059,307 147,297,443 2.08 2,136 2013 57,688,803 2,614,644 2,550,000 210,784 1,182,315 62,764,738 127,011,284 1.73 1,811 2014 64,132,510 2,616,768 3,000,000 210,784 886,157 57,568,517 128,414,736 1.66 1,794 2015 59,421,203 2,618,892 3,350,000 210,784 590,000 45,566,903 111,757,782 1.44 1,522 2016 55,998,392 2,491,016 3,000,000 210,784 295,000 39,951,661 101,946,853 1.27 1,374 2017 52,571,254 15,168,140 3,000,000 210,784 - 34,420,914 105,371,092 1.22 1,390 2018 52,883,524 15,035,264 3,000,000 210,784 - 29,095,062 100,224,634 1.14 1,314 2019 53,402,638 14,902,388 3,000,000 210,784 21,155,710 92,671,520 1.02 1,178 Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements. ' Bonds reported net of related premiums and discounts. 2 Population and personal income information can be found on page 134. 124 Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Notes: Property Assessed Value2 4,376,151 4,449,860 4,520,142 4,615,527 4,668,319 4,826,648 4,950,559 5,350,228 5,494,459 5,907,661 CITY OF IOWA CITY, IOWA RATIOS OF GENERAL OBLIGATION BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA Last Ten Fiscal Years (amounts expressed in thousands, except per capita) Debt Debt Payable from Payable from Governmental Proprietary 71,792 3,731 77,744 3,131 74,226 1,483 57,689 1,182 64,133 886 59,421 590 55,998 295 52,571 - 52,884 53,403 1 General Obligation bonds, net of related premiums and discounts. 2City of Iowa City Budget Book. 3 Population data can be found on page 134. Gross Debt Service Bonded Debt Fund Balance 12.46: 1000 75,523 13,952 80,875 13,151 75,709 11,009 58,871 6,527 65,019 6,872 60,011 7,052 56,293 6,573 52,571 7,756 52,884 8,609 53,403 9,648 125 Net General Obligation Bonded Debt 61,571 67,724 64,700 52,344 58,147 52,959 49,720 44,815 44,275 43,755 Ratio of Net Bonded Debt to Assessed Value 14.07: 1000 15.22: 1000 Net Bonded Debt Per Capita 907 982 14.31 :1000 938 11.34:1000 746 12.46: 1000 812 10.97 : 1000 721 10.04:1000 670 8.38 : 1000 591 8.06:1000 580 7.41 : 1000 556 CITY OF IOWA CITY, IOWA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES) Fiscal Year Ended June 30 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Notes: Principal2 9,354 10,386 13,294 16,465 13,560 12,564 13,230 13,305 11,895 12,080 Last Ten Fiscal Years (amounts expressed in thousands) Interest 3,064 2,889 2,543 2,339 1,903 1,669 1,475 1,597 1,570 1,589 Total Debt Service 12,418 13,275 15,837 18,804 15,463 14,233 14,705 14,902 13,465 13,669 Total General Governmental Expenditures and Transfers 108,950 120,424 119,242 129,814 104,394 111,632 112,832 138,957 138,841 141,870 1 General Fund, Special Revenue Funds, Debt Service Fund and Capital Projects Funds. 2 Beginning in FYI 3, Taxable Urban Renewal Revenue Bonds are also included. 126 Ratio of Debt Service to General Expenditures .11 : 1.00 .11 : 1.00 .13 : 1.00 .14 : 1.00 .15 : 1.00 .13 : 1.00 .13 : 1.00 .11 : 1.00 .10 : 1.00 .10 : 1.00 Name of Governmental Unit City of Iowa City Iowa City Community School District' Johnson County' Clear Creek- Amana Community School District' Kirkwood Comm. College' Total Overlapping Debt Total Direct & Overlapping Debt Per capita assessed value CITY OF IOWA CITY, IOWA COMPUTATION OF DIRECT AND OVERLAPPING DEBT June 30, 2019 (amounts expressed in thousands, except per capita) Total General Percent Amount Long -Term Applicable Applicable Direct Debt to the City of to the City of Debt/Actual Outstanding Iowa City Iowa City Market Value 2 Per Capita3 $ 68,130 100.00% $ 68,130 1.24% $ 865.8370 115,095 57.24 65,880 1.23 837.2427 51145 42.22 2,172 0.04 27.6031 81,155 0.04 32 0.00 0.4067 80,231 14.19 11,385 0.21 144.6874 281,626 79,469 1,009.9399 $ 349,756 $ 147,599 1,875.7769 $ 75,078 ' Long term debt outstanding includes only GO debt. 2City Property Assessed Value of 5,907,661 came from the Iowa Department of Management 3 Population for FY19 of 78,687 came from the US Census Bureau 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. 127 Note: Under Iowa code, the city's outstanding general obligation debt should not exceed 5 percent of total assessed property value. 128 CITY OF IOWA CITY, IOWA LEGAL DEBT MARGIN INFORMATION Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total Assessed Valuation $ 4,376,151 $ 4,449,860 $ 4,520,142 $ 4,615,527 $ 4,668,319 $ 4,826,648 $ 4,950,559 $ 5,350,228 $ 5,494,459 $ 5,907,661 Debt Limit 218,808 222,493 226,007 230,776 233,416 241,332 247,528 267,511 274,723 295,383 G.O. Bonds 75,050 80,575 75,320 58,550 64,420 59,340 55,350 51,645 51,880 52,470 TIF Rev. Bonds - - - 2,655 2,655 2,655 2,525 15,200 15,065 14,930 Letters of credit 498 1,616 805 538 1,943 2,005 582 663 475 603 TIF rebates 1,223 867 574 307 170 18,206 13,506 17,356 25,012 27,954 Total net debt applicable to limit 76,771 83,058 76,699 62,050 69,188 82,206 71,963 84,864 92,432 95,957 Legal debt margin $ 142,037 $ 139,435 $ 149,308 $ 168,726 $ 164,228 $ 159,126 $ 175,565 $ 182,647 $ 182,291 $ 199,426 Total net debt applicable to the limit as a percentage of debt limit 35.09% 37.33% 33.94% 26.89% 29.64% 34.06% 29.07% 31.72% 33.65% 32.49% Note: Under Iowa code, the city's outstanding general obligation debt should not exceed 5 percent of total assessed property value. 128 CITY OF IOWA CITY, IOWA GENERAL OBLIGATION DEBT ANNUAL MATURITY SCHEDULE Payments Funding Source(s) 129 Principal Outstanding at Fiscal Property Tax Tax Increment Beginning of Fiscal Year Principal Interest Total Revenue Financing Year 2019 11,945,000 1,589,182 13,534,182 12,776,082 758,100 51,880,000 2020 11,245,000 1,196,696 12,441,696 11,685,567 756,129 52,470,000 2021 7,160,000 943,923 8,103,923 7,347,535 756,388 41,225,000 2022 7,320,000 786,163 8,106,163 7,350,684 755,479 34,065,000 2023 6,475,000 628,413 7,103,413 6,405,098 698,315 26,745,000 2024 5,745,000 475,513 6,220,513 5,978,063 242,450 20,270,000 2025 4,705,000 346,513 5,051,513 4,814,803 236,710 14,525,000 2026 3,935,000 240,700 4,175,700 4,012,916 162,784 9,820,000 2027 2,985,000 147,325 3,132,325 2,969,008 163,317 5,885,000 2028 1,940,000 72,600 2,012,600 2,012,600 - 2,900,000 2029 960,000 21,600 981,600 981,600 - 960,000 Total 70,863,628 $ 64,415,000 $ 6,448,628 $ $ 66,333,956 $ 4,529,672 129 CITY OF IOWA CITY, IOWA SCHEDULE OF REVENUE BOND COVERAGE Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year Net Revenue Annual Debt Service2 Ended Available for Ratio of June 30 Revenue Expenses' Debt Service Principal Interest Total Coverage Parking Revenue 20106 5,509 3,149 2,360 390 504 894 2.64 2011 5,389 2,920 2,469 420 391 811 3.04 2012 4,945 3,034 1,911 500 339 839 2.28 2013 5,122 3,549 1,573 515 324 839 1.87 2014 5,365 2,969 2,396 530 308 838 2.86 20157 5,620 3,828 1,792 540 254 794 2.26 2016 - - - - - - - 2017 2018 2019 - - - - - Wastewater Treatment Revenue 20106 13,174 5,050 8,124 4,205 2,307 6,512 1.25 20116 13,281 5,477 7,804 1,840 2,054 3,894 2.00 2012 13,175 5,663 7,512 4,615 1,693 6,308 1.19 2013 13,301 5,340 7,961 4,865 1,547 6,412 1.24 2014 12,835 5,708 7,127 3,250 1,428 4,678 1.52 2015 12,620 6,574 6,046 3,370 1,305 4,675 1.29 2016 12,681 6,513 6,168 3,520 1,175 4,695 1.31 2017 13,383 6,357 7,026 3,625 985 4,610 1.52 2018 13,181 6,622 6,559 3,580 756 4,336 1.51 20198 13,548 6,840 6,708 6,135 539 6,674 1.68 Water Revenues 20106 8,336 5,153 3,183 680 1,055 1,735 1.83 2011 8,354 5,464 2,890 1,110 902 2,012 1.44 20126 8,649 5,653 2,996 1,200 861 2,061 1.45 20136 9,342 6,348 2,994 845 758 1,603 1.87 20146 8,613 5,818 2,795 1,335 650 1,985 1.41 2015 8,715 5,632 3,083 1,380 610 1,990 1.55 2016 9,323 5,387 3,936 1,715 579 2,294 1.72 2017 9,529 6,332 3,197 1,760 524 2,284 1.40 2018 9,838 6,949 2,889 1,455 394 1,849 1.56 2019 10,078 6,888 3,190 1,510 280 1,790 1.78 Notes: ' Excludes depreciation and interest. 2Includes principal and interest of revenue bonds only. 3 Parking Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service" is required to be at least 1.25. Wastewater Treatment Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service" is required to be at least 1.10. 5 Water Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service" is required to be at least 1.10. 6 Refunded Revenue Bonds paid are excluded from the principal of Annual Debt Service. 7 Parking Revenue Bonds defeased are excluded from the principal and interest of Annual Debt Service. 8 Ratio of Coverage excludes the amount called early of $2,670,000. 130 Fiscal Year 2019 2020 2021 2021 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Total Principal CITY OF IOWA CITY, IOWA REVENUE DEBT ANNUAL MATURITY SCHEDULE Payments Funding Source(s) Interest Total Sewer Revenue Water Revenue Tax Increment Financing 7,780,000 1,273,639 9,053,639 6,674,450 1,789,854 589,335 4,215,000 1,056,400 5,271,400 2,876,800 1,802,965 591,635 4,390,000 899,161 5,289,161 2,877,425 1,823,041 588,695 5,460,000 744,165 6,204,165 2,812,500 1,836,190 1,555,475 4,950,000 562,315 5,512,315 2,137,125 1,852,145 1,523,045 2,850,000 436,171 3,286,171 - 1,800,826 1,485,345 2,430,000 373,577 2,803,577 - 1,351,082 1,452,495 1,665,000 320,589 1,985,589 - 561,244 1,424,345 990,000 280,725 1,270,725 - - 1,270,725 895,000 250,365 1,145,365 - - 1,145,365 915,000 222,495 1,137,495 - - 1,137,495 940,000 193,820 1,133,820 - - 1,133,820 965,000 164,325 1,129,325 - - 1,129,325 995,000 133,950 1,128,950 - - 1,128,950 815,000 102,300 917,300 - - 917,300 840,000 77,850 917,850 - - 917,850 865,000 52,650 917,650 - - 917,650 890,000 26,700 916,700 - - 916,700 7,171,197 $ 12,817,347 $ 42,850,000 $ $ 50,021,197 $ 17,378,300 $ 19,825,550 131 Principal Outstanding at Beginning of Fiscal Year 42,850,000 35,070,000 30,855,000 26,465,000 21,005,000 16,055,000 13,205,000 10,775,000 9,110,000 8,120,000 7,225,000 6,310,000 5,370,000 4,405,000 3,410,000 2,595,000 1,755,000 890,000 Fiscal Year ZVIY 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Total 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Total CITY OF IOWA CITY, IOWA REVENUE DEBT ANNUAL MATURITY BY FUNDING SOURCE Principal 6,135,000 2,510,000 2,620,000 2,660,000 2,085,000 Sewer Interest Total 539,450 366,800 257,425 152,500 52,125 6,674,450 2,876,800 2,877,425 2,812,500 2,137,125 $ 16,010,000 $ 1,368,300 $ 17,378,300 Principal 1,510,000 1,565,000 1,630,000 1,690,000 1,755,000 1,745,000 1,325,000 555,000 Water Outstanding Interest 279,854 237,965 193,041 146,190 97,145 55,826 26,082 6,244 Total 1,789,854 1,802,965 1,823,041 1,836,190 1,852,145 1,800,826 1,351,082 561,244 $ 11,775,000 $ 1,042,347 $ 12,817,347 132 CITY OF IOWA CITY, IOWA REVENUE DEBT ANNUAL MATURITY BY FUNDING SOURCE (continued) 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Total Taxable Urban Renewal Principal 135,000 140,000 140,000 1,110,000 1,110,000 1,105,000 1,105,000 1,110,000 990,000 895,000 915,000 940,000 965,000 995,000 815,000 840,000 865,000 890,000 $ 15,065,000 Outstanding Interest 454,335 451,635 448,695 445,475 413,045 380,345 347,495 314,345 280,725 250,365 222,495 193,820 164,325 133,950 102,300 77,850 52,650 26,700 $ 4,760,550 133 Total 589,335 591,635 588,695 1,555,475 1,523,045 1,485,345 1,452,495 1,424,345 1,270,725 1,145,365 1,137,495 1,133,820 1,129,325 1,128,950 917,300 917,850 917,650 916,700 $ 19,825,550 CITY OF IOWA CITY, IOWA DEMOGRAPHIC AND ECONOMIC STATISTICS Last Ten Calendar Years 134 Per Capita Calendar Personal Personal Average School Unemployment Retail Year Population Income' Income' Increase Enrollment' Rate' Sales' 2010 67,862 6,133,100 40,090 2.23 13,319 5.0 725,329,723 2011 68,947 6,695,500 43,060 7.41 13,638 4.8 741,407,021 2012 68,947 7,068,900 44,546 3.45 13,862 4.1 767,122,555 2013 70,133 7,323,900 45,323 1.74 14,057 3.8 793,201,342 2014 71,591 7,754,000 47,247 4.25 14,162 3.5 649,794,164 2015 73,415 8,026,300 48,161 1.93 14,495 2.9 838,853,686 2016 74,220 8,275,200 49,040 1.83 15,186 3.2 853,258,347 2017 75,798 8,602,600 50,164 2.29 15,299 3.0 874,928,988 20185 76,290 8,819,377 51,428 2.52 15,334 2.2 854,538,416 20195 78,687 9,090,368 53,008 3.07 15,619 2.4 865,628,890 Sources and Notes: 'Personal Income and Per Capita Personal Income based on metropolitan Iowa City / Coralville and based on figures from Bureau of Economic Analysis. Personal Income expressed in thousands. ' Iowa City Community School District and local private schools 3Iowa Workforce Development Center Iowa Retail Sales & Use Report, Iowa Department of Revenue and Finance. Fiscal year ending June 30. 5 Personal Income and Per Capita Personal Income for 2018 or 2019 are not available. Amounts projected based on average increase over previous 9 years. 6 U Census Bureau Population number is not avaible for 2018 or 2019. Amounts projected based on an average over previous 9 years 134 Employers University of Iowa Veterans Administration Medical Center Iowa City Community School District Mercy Hospital ACT Inc. (formerly American College Testing Program) Hy Vee City of Iowa City Proctor and Gamble NCS Pearson Johnson County Internaltion Automotive Components formerly Lear Corp Gillette Canada (Oral B Laboratories) Total Employees Sources: Iowa City Area Development Group Various Employers CITY OF IOWA CITY, IOWA PRINCIPAL EMPLOYERS Current Year and Nine Years Ago 2010 2019 Employees Rank Percentaee Employees Rank Percentaee 35,069 1 36.9 % 30,012 1 29.0 1,351 4 1.4 2,115 2 2.0 1,676 2 1.8 1,518 3 1.5 1,266 5 1.3 1,299 4 1.3 1,221 6 1.3 1,079 5 1.0 1,166 7 1.2 1,033 6 1.0 957 8 1.0 962 7 0.9 - - N/A 959 8 0.9 1,400 3 1.5 775 9 0.7 - - N/A 554 10 0.5 838 9 0.9 - - N/A 720 10 0.8 - - N/A i ro o ro 95,000 103,400 135 136 CITY OF IOWA CITY, IOWA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION Last Ten Fiscal Years Full -Time Equivalent Employees as of June 30 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Public Safety Police 103.25 98 97 103 105 105 105 105 105 107 Animal Shelter' 6 6 6 - - - - - - - Fire 57 66 65 65 65 64 64 64 64 64 Inspection Services 15.55 15.55 15.55 15.55 13.55 13.55 12.85 13.5 13.5 15.6 Public Works Public Works Admin 2 2 2 2 2 2 2 2 2 2 Engineerings 11.35 12.1 12.1 12.1 12.1 12.1 12 16 16 16 Flood Recovery - 0.4 0.4 0.4 0.38 - - - - - Culture and Recreation Parks and Rec Admin 2 2 2 2 2 2 2 2 2 2 Recreation 15.42 15.42 15.42 15.42 15.42 15.42 14.42 15.42 14.75 14 Parks 13 13 13 13 13 13 13 16 16 16 Forestry 3 3 3 3 3 3 3 3 3 5 Cemetery 3 3 3 3 3 3 3 3 3 3 CBD Maintenance 3 3 3 3 3 3 3 - - - Library 43.14 43.14 43.64 43.63 45.13 45.13 44.77 46.17 46.17 46.17 Senior Center 6.31 6.31 6.5 6.5 6.5 6.5 6.5 7 7 7 Community and Economic Development 9.05 9.1 9.1 8.4 8.95 8.95 10.8 12.63 13.13 13.13 General Government City Council 7 7 7 7 7 7 7 7 7 7 City Clerk 4 4 4 4 4 4 4 4 4 4 City Attorney 6 5.6 5.6 5.6 5.6 5.6 5.5 5.5 5.5 5.5 City Manager' 3 3 3 5 6 6 10.5 10.5 9 9 Personnel 4 4 4 4 3 3 3 3 3 3 Human Rights 2.5 2.5 2.5 2 2 2 2 2 2 2 Finance 26.3 26.24 27.53 23.47 23.97 22.47 23.07 23.13 22.13 22.28 Government Buildings 4.96 4.96 4.83 4.83 4.83 4.83 5.33 4.33 5 4 Energy Conservation 0.25 - - - - - - - - - Transit3 58.5 56.25 56.25 - - - - - - - Special Revenue Employee Benefits 0.29 0.26 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55 CIP / Roads 2 - - - - - - - - - Flood Mitigation Grants - 1.6 1.6 - - - - Community Development 3.88 3.83 3.83 3.33 2.98 2.98 2.83 UniverCity Program - - - 0.2 - - - - - - Traffic Engineering 4.15 4.15 4.15 4.15 4.15 4.15 3.9 4.5 3 3 Streets 25.5 25.5 25.5 25.5 25.5 25.5 25.25 25.5 29 29 MPOJC (formerly JCCOG) 6.6 6.6 6.6 5.6 5.6 5.6 4.7 4.7 4.7 5.2 Other Shared Revenues - - - 1.6 1.62 - - - - - Library Development 1 1 1 1 - - - Capital Projects Administrations - 3 5 6 6 5 4 - - - Internal Service Funds Information Technology 12.3 11.3 11.8 10.86 9.86 9.86 9.86 9.8 10.8 9.8 Equipment 11.26 11.26 11.26 10.75 10.75 10.75 10.75 10.75 10.75 10.75 Central Services 0.75 0.75 0.75 0.76 0.5 0.5 0.5 0.5 0.5 0.5 Risk Management 1.93 2.01 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 Business -Type Activities Parking 33.25 32.75 32.75 29.25 26.25 26.25 23.13 21.63 21.63 21.38 Mass Transit3 - - - 51.75 51.25 51.25 51.13 53.63 54.63 53.38 Wastewater Treatment 25.6 25.6 25.4 25.4 24.4 24.65 24.65 25.4 26 26 Water 32.75 32.75 32.75 32.75 31.75 32 32 31.75 31.75 31.75 Sanitation 35.85 35.85 37.85 37.85 35.85 35.85 33.35 31.5 31.5 32.76 Airport 1.75 1.75 1.75 1 1 1 1 1 1 1 Cable Television' 6.44 6.69 6.63 6.63 6.63 5.63 - - - - Stormwater 1.9 1.9 2.1 2.1 2.1 2.6 2.6 2.1 1.5 1.5 Housing Authority 13.25 13.25 13.25 13.18 12.19 10.19 10.19 9.6 9.6 9.5 Total 630.03 633.37 637.74 623.91 615.16 607.66 598.93 599.89 601.89 605.55 Source: City's Financial Plan ' Beginning in FYI 3, Animal Services is reported under Police ' Beginning in FYI 3, Communications Division has been moved from Finance to City Manager 3 Beginning in FYI 3, Transit was moved from the General Fund to an Enterprise Fund Beginning in FYI 6, Cable was moved from an Enterprise Fund to the General Fund s Beginning in FYI 7, Capital Project Administration was moved to Engineering 136 CITY OF IOWA CITY, IOWA OPERATING INDICATORS BY FUNCTION Last Ten Fiscal Years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Public Safety Police' Physical arrests 5,983 6,590 5,911 4,468 6,192 5,595 5,465 4,482 4,488 4,418 Traffic Violations 4,446 3,403 3,761 2,499 3,718 3,356 2,989 2,246 3,103 2,463 Fire' Number of calls answered 4,472 4,635 5,173 4,713 5,828 6,016 6,974 6,749 7,122 5,568 Inspections conducted 2,145 1,806 1,970 1,431 2,032 1,903 2,459 874 1,031 801 Parking Parking Violations 118,717 109,553 96,117 88,909 60,680 65,196 57,549 62,930 50,346 61,330 Wastewater Treatment Daily average treatment in million gallons 12.86 10.37 8.28 9.84 10.02 9.76 10.48 8.32 7.77 10.97 Maximum daily capacity of plant in million gallons 41.1 41.1 41.1 41.1 41.1 43.3 43.3 43.3 43.3 43.3 Number of sewer system customers 23,344 23,527 23,529 24,059 24,389 24,533 25,085 25,485 26,069 26,270 Water Daily average consumption in million gallons 5.48 5.51 5.49 5.54 5.64 5.33 5.32 5.50 5.84 5.69 Maximum daily capacity of plant in million gallons 16.7 16.7 16.7 16.7 16.7 16.7 16.7 16.7 16.7 16.7 Customers by Classification Residential 23,657 23,875 24,086 24,442 24,790 23,089 23,638 24,025 24,595 24,818 Commercial 1,481 1,498 1,489 1,491 1,491 1,409 1,415 1,425 1,436 1,431 Industrial 15 15 15 15 15 14 14 14 15 15 Other 153 156 200 204 202 135 131 134 136 139 Total Customers 25,306 25,544 25,790 26,152 26,498 24,647 25,198 25,598 26,182 26,403 Sanitation Number of Customers 14,831 14,926 15,030 15,177 15,331 14,811 15,620 15,917 15,960 16,112 Tonnage 8,869 8,969 8,935 8,956 9,160 9,210 9,476 9,623 9,694 8,989 Landfill Tonnage 150,369 147,265 148,953 111,445 115,624 123,692 126,875 137,025 140,658 127,587 Sources: Various city divisions. Notes: ' Numbers are based on a calendar year and 2019 figures are compiled through 9/30/19 for FIRE and 10/14/19 for Police. 137 138 CITY OF IOWA CITY, IOWA CAPITAL ASSETS BY FUNCTION Last Ten Fiscal Years 2013 2014 2010 2011 2012 2015 2016 2017 2018 2019 Public Safety Police Stations 1 1 1 1 1 1 1 1 1 1 Patrol units 18 18 18 18 20 20 20 24 23 23 Fire Stations 3 3 4 4 4 4 4 4 4 4 Fire apparatus 9 9 11 11 11 11 10 10 10 10 Public Works Streets Miles 272 272 275 276 279 281 283 286 288 292 Streetlights 3,410 3,412 3,412 3,412 3,412 3,412 3,412 3,412 3,307 3,166 Culture and Recreation Library I I 1 I 1 1 1 I I I Cemetery 1 1 1 1 I I I I I I Acreage 40 40 40 40 40 40 40 40 40 40 Parks 40 41 41 42 43 46 46 49 50 51 Acreage 1,335 1,354 1,441 1,506 1,897 1,897 1,902 1,932 1,942 1,947 Recreation Recreation centers 2 2 2 2 2 2 2 2 2 2 Swimming pools 3 3 3 3 3 3 3 3 3 3 Ball diamonds 30 30 30 27 27 27 27 27 27 27 Tennis courts 12 12 12 12 12 12 12 9 9 9 Soccer fields 20 20 20 20 20 20 20 20 20 20 Pickle Ball Courts - - - - - - - 8 8 8 Futscal Courts - - - - - - - 2 2 2 Full Basketball Courts 3 3 3 Gaga Pits - - - - - - - - 2 2 Parking Facilities 5 5 5 5 5 5 5 6 6 6 Spaces 3,086 3,086 3,086 3,086 3,086 3,086 3,086 3,686 3,686 3,686 Wastewater Treatment Miles of sanitary sewer 291 292 294 295 298 300 301 304 306 307 Miles of storm sewer 122 124 127 128 131 133 136 139 140 142 Number of treatment plants 2 2 2 2 1 1 1 1 1 1 Number of service connectors 23,093 23,308 23,529 23,851 24,175 24,533 25,085 25,485 26,069 26,270 Water Miles of water mains 264 264 266 268 271 273 275 277 279 281 Number of city owned fire hydrants 2,662 2,680 2,735 3,330 3,385 3,415 3,447 3,503 3,529 3,564 Sanitation Landfills 1 I 1 I I I I I I 1 Acreage 395 395 411 411 411 418 418 418 418 418 Sources: Various city divisions. 138 Compliance Section Tab Boh nsack & From molt LLP Certified Public Accountants Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards To the Honorable Mayor and Members of City Council City of Iowa City, Iowa Iowa City, Iowa We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Iowa City, Iowa, as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the City's basic financial statements and have issued our report thereon dated December 11, 2019. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered City of Iowa City, Iowa's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City of Iowa City, Iowa's internal control. Accordingly, we do not express an opinion on the effectiveness of City of Iowa City, Iowa's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 139 Compliance and Other Matters As part of obtaining reasonable assurance about whether City of Iowa City, Iowa's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Comments involving statutory and other legal matters about the City's operations for the year ended June 30, 2019 are based exclusively on knowledge obtained from procedures performed during our audit of the financial statements of the City. Since our audit was based on tests and samples, not all transactions that might have had an impact on the comments were necessarily audited. The comments involving statutory and other legal matters are not intended to constitute legal interpretations of those statutes. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of Iowa City, Iowa's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Iowa City, Iowa's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Moline, Illinois December 11, 2019 140 Boh nsack & From molt LLP Certified Public Accountants Independent Auditor's Report on Compliance For Each Major Federal Program and On Internal Control Over Compliance Required By the Uniform Guidance To the Honorable Mayor and Members of City Council City of Iowa City, Iowa Iowa City, Iowa Report on Compliance for Each Major Federal Program We have audited City of Iowa City, Iowa's compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of City of Iowa City, Iowa's major federal programs for the year ended June 30, 2019. City of Iowa City, Iowa's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of City of Iowa City, Iowa's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about City of Iowa City, Iowa's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of City of Iowa City, Iowa's compliance. Opinion on Each Major Federal Program In our opinion, City of Iowa City, Iowa complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2019. 141 Report on Internal Control Over Compliance Management of City of Iowa City, Iowa is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered City of Iowa City, Iowa's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of City of Iowa City, Iowa's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we did identify a certain deficiency in internal control over compliance, described in the accompanying schedule of findings and questioned costs as item 2019-001, that we consider to be a significant deficiency. The City of Iowa City, Iowa's response to the internal control over compliance findings identified in our audit is described in the accompanying schedule of findings and questioned costs. City of Iowa City, Iowa's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Moline, Illinois December 11, 2019 142 City of Iowa City, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2019 Public and Indian Housing Public and Indian Housing Public and Indian Housing Housing Voucher Program Cluster: Section 8 Housing Choice Vouchers Public Housing Capital Fund Public Housing Capital Fund Total U.S. Department of Housing and Urban Development U.S. Department of the Interior Direct: Historic Preservation Fund Grants -In -Aid Indirect: Pass-through State Historical Society of Iowa Historic Preservation Fund Grants -In -Aid Historic Preservation Fund Grants -In -Aid Historic Preservation Fund Grants -In -Aid Total U.S. Department of the Interior U.S. Department of Justice Direct: Bulletproof Vest Partnership Program Edward Byrne Memorial Justice Assistance Grant (Continued) Federal Pass -Through Passed Total Federal Grantor/Pass-Through Grantor/ CFDA Entity Identifying Through to Federal Program Title or Cluster Title Number Number Subrecipients Expenditures 14.871 IA022VO 9,172,148 14.872 IA05P022501-17 U.S. Department of Housing 14.872 IA05P022501-18 80,009 and Urban Development 84,321 1,112,400 11,081,200 Direct: P17AP00060 - 8,026 15.904 2018-05 Community Development Block Grants (CDBG)/ 15.904 2018-06 3,500 15.904 Entitlement Grants Cluster: 6,000 12,500 CDBG/Entitlement Grants 14.218 B -16 -MC -19-0009 $ 21,582 $ 21,582 CDBG/Entitlement Grants 14.218 B -17 -MC -19-0009 137,275 355,012 CDBG/Entitlement Grants 14.218 B -18 -MC -19-0009 146,716 351,700 CDBG/Entitlement Grants 14.218 B -19 -MC -19-0009 - 4,256 Subtotal CDBG/Entitlement Grants Cluster 305,573 732,550 Home Investment Partnerships Program 14.239 M -14 -MC -190205 715 715 Home Investment Partnerships Program 14.239 M -15 -MC -190205 128,438 128,438 Home Investment Partnerships Program 14.239 M -16 -MC -190205 192,548 199,854 Home Investment Partnerships Program 14.239 M -17 -MC -190205 267,911 306,632 Home Investment Partnerships Program 14.239 M -18 -MC -190205 216,632 269,700 Home Investment Partnerships Program 14.239 M -19 -MC -190205 583 583 Public and Indian Housing Public and Indian Housing Public and Indian Housing Housing Voucher Program Cluster: Section 8 Housing Choice Vouchers Public Housing Capital Fund Public Housing Capital Fund Total U.S. Department of Housing and Urban Development U.S. Department of the Interior Direct: Historic Preservation Fund Grants -In -Aid Indirect: Pass-through State Historical Society of Iowa Historic Preservation Fund Grants -In -Aid Historic Preservation Fund Grants -In -Aid Historic Preservation Fund Grants -In -Aid Total U.S. Department of the Interior U.S. Department of Justice Direct: Bulletproof Vest Partnership Program Edward Byrne Memorial Justice Assistance Grant (Continued) 143 806,827 905,922 14.850 IA022-00000117D - 254 14.850 IA022-00000118D 98,291 14.850 IA022-00000119D 87,714 186,259 14.871 IA022VO 9,172,148 14.872 IA05P022501-17 4,312 14.872 IA05P022501-18 80,009 - 84,321 1,112,400 11,081,200 15.904 P17AP00060 - 8,026 15.904 2018-05 3,000 15.904 2018-06 3,500 15.904 2018-07 6,000 12,500 20,526 16.607 2017-BUBX17089255 8,077 16.738 2015 -DJ -BX -0661 5,026 (1) 143 City of Iowa City, Iowa Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2019 Federal Grantor/Pass-Through Grantor/ Program Title or Cluster Title Federal CFDA Number Pass -Through Entity Identifying Number Passed Through to Subrecipients Total Federal Expenditures U.S. Department of Justice (Continued) Indirect: Pass-through International Association of Chiefs of Police, Inc. Crime Victim Assistance -Discretionary Grants 16.582 IACP-2018-7586-04 $ 39,732 $ 298,067 Pass-through Iowa Department of Justice Violence Against Women Formula Grants 16.588 VW -19 -04 -CJ - 65,916 Pass-through Iowa Governor's Office of Drug Control Policy Public Safety Partnership and Community Policing Grants 16.710 17 -CAMP -05 10,195 13,634 Public Safety Partnership and Community Policing Grants 16.710 18 -COPS Heroin -03 2,078 3,880 12,273 17,514 Edward Byrne Memorial Justice Assistance Grant 16.738 16 -JAG -249496 63,634 99,690 (1) Total U.S. Department of Justice 115,639 494,290 U.S. Department of Transportation Direct: Airport Improvement Program 20.106 3-19-0047-024-2017 - 160 Federal Transit Cluster: Federal Transit -Formula Grants 20.507 IA -2019-014-01-00 - 1,582,896 Indirect: Pass-through Iowa Department of Transportation Highway Planning and Construction Program Cluster: Highway Planning and Construction Program 20.205 BROS-3715(663)--8J-52 - 58,644 Highway Planning and Construction Program 20.205 TAP -U-3715(665)- -81-52 - 249,218 - 307,862 Pass-through Iowa Department of Transportation and Metropolitan Planning Organization of Johnson County Highway Planning and Construction Program Cluster: Highway Planning and Construction Program 20.205 19MP0-MPOJC - 184,912 Subtotal Highway Planning and Construction Program Cluster - 492,774 Metropolitan Transportation Planning and State and Non - Metropolitan Planning and Research 20.505 19MP0-MPOJC - 45,088 Pass-through Iowa Department of Transportation Formula Grants for Rural Areas 20.509 IA -2016-027-371-16 - 2,663 Transit Services Program Cluster: Enhanced Mobility of Seniors and Individuals with Disabilities 20.513 IA-2016-026-02-371-SFY19 - 110,056 (Continued) 144 City of Iowa City, Iowa Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2019 Federal Pass -Through Passed Total Federal Grantor/Pass-Through Grantor/ CFDA Entity Identifying Through to Federal Program Title or Cluster Title Number Number Subrecipients Expenditures U.S. Department of Transportation (Continued) Indirect: Pass-through Iowa Department of Public Safety/ Governor's Traffice Safety Bureau Highway Safety Cluster: National Priority Safety Programs National Priority Safety Programs Subtotal Highway Safety Cluster Total U.S. Department of Transportation Total Expenditures of Federal Awards 20.600 PAP 19 -402 -MDPT, Task 11 $ $ 28,306 20.616 PAP 18-405d-M6OT, Task 18 4,657 32,963 (1) Total CFDA 16.738 $104,716 See Notes to the Schedule of Expenditures of Federal Awards. 145 2,266,600 $ 1,228,039 $ 13,862,616 City of Iowa City, Iowa Notes to the Schedule of Expenditures of Federal Awards Year Ended June 30, 2019 Note 1. Basis of Presentation The accompanying schedule of expenditures of federal awards (schedule) includes the federal grant activity of the City under programs of the federal government for the year ended June 30, 2019. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or cash flows of the entity. Note 2. Summary of Significant Accounting Policies Expenditures reported on the schedule are reported on the modified accrual basis of accounting for governmental funds and accrual basis of accounting for proprietary funds. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures of federal awards are recognized in the accounting period when the liability is incurred and has met the eligibility criteria of the federal grant. Revenue from federal awards is recognized when the City has done everything necessary to establish its right to the revenue. In the governmental funds, revenue from federal grants is recognized when the revenue is both measurable and available. In proprietary funds, revenue from federal grants is recognized when it is earned. Pass-through entity identifying numbers are presented where available. Note 3. Indirect Cost Rate The City has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. 146 City of Iowa City, Iowa Schedule of Findings and Questioned Costs Year Ended June 30. 2019 I. Summary of the Independent Auditor's Results Financial Statements Type of auditor's report issued: Internal control over financial reporting: • Material weakness(es) identified? • Significant deficiency identified? • Noncompliance material to financial statements noted? Federal Awards Internal control over major programs: • Material weakness(es) identified? • Significant deficiency identified? Type of auditor's report issued on compliance for major programs • Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? Identification of major programs: CFDA Number Name of Federal Program or Cluster Unmodified ❑ Yes 0 No ❑ Yes 0 None Reported ❑ Yes p No ❑ Yes 0 No 0 Yes ❑ None Reported Unmodified 0 Yes ❑ No 14.218 Community Development Block Grants/Entitlement Grants 14.239 Home Investment Partnerships Program Federal Transit Cluster: 20.507 Federal Transit -Formula Grants Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee? 0 Yes ❑ No (Continued) 147 City of Iowa City, Iowa Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2019 II. Findings Relating to the Basic Financial Statements as Required to be Reported in Accordance with Generally Accepted Government Auditing Standards A. Internal Control No matters reported. B. Instances of Noncompliance No matters reported. III. Findings and Questioned Costs for Federal Awards A. Internal Control for Federal Awards 2019-001 U.S. Department of Housing and Urban Development Community Development Block Grants (CDBG)/ Entitlement Grants Cluster: Community Development Block Grants/ Entitlement Grants CFDA 14.218 (Direct) Federal Award Numbers: B -16 -MC -19-0009 B -17 -MC -19-0009 B -18 -MC -19-0009 B -19 -MC -19-0009 Federal Award Year: 2019 Finding: The City of Iowa City, Iowa has inadequate documentation of pre -inspections and post - inspections performed on homeowner occupied rehabilitation projects. Criteria: The Office of Management and Budget (OMB), in the Compliance Supplement, requires the City to ensure the work is properly completed when using CDBG funds for rehabilitation. The City is to document pre -inspections and post -inspections performed. Per 24 CFR section 570.506, ....(9) For each residential rehabilitation activity determined to aid in the prevention or elimination of slums or blight in a slum or blighted area: ... (ii) A pre -rehabilitation inspection report describing the deficiencies in each structure to be rehabilitated; and (iii) Details and scope of CDBG assisted rehabilitation, by structure.... The OMB's Compliance Supplement specifies the City is to maintain documentation that the City inspects the rehabilitation work upon completion. Condition: The City does not document pre -inspections performed. For post -inspections, the City relies on a form to be signed by a licensed inspector and to list the date the inspection was performed. This form is not required to be signed prior to the City payment of CDBG funds to contractors and the date section is not required to be completed. Questioned Costs: $0 Context: The City has allocated $235,000 of the CDBG award to housing rehabilitation in the FY19 Annual Action Plan. Effect: Noncompliance with program requirements could occur and not be timely identified. 148 City of Iowa City, Iowa Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2019 Cause: The City has not required inspections employees to document pre -inspections and post - inspections. Identification of as a Repeat Finding: This is not repeat finding. Recommendation: We recommend the City require each rehabilitation file to include a formal pre - inspection document that clearly lists the issues and what to incorporate within the rehabilitation project. We recommend the City require formal documentation of the post -rehabilitation inspection prior to issuance of payments. Response and Corrective Action Plan: Housing rehabilitation staff will begin completing formal documentation of the pre- and post -rehabilitation inspections starting immediately. Staff will use an ongoing file checklist to ensure that proper documentation is maintained throughout each rehabilitation project. The Neighborhood Services Coordinator will review inspection documentation prior to approval of payments. B. Instances of Noncompliance No matters reported. IV. Other Findings Related to Required Statutory Reporting IV -A-19 Certified Budget — Expenditures for the year ended June 30, 2019 did not exceed the amounts budgeted. IV -13-19 Questionable Expenditures — No expenditures were noted that we believe may not meet the requirements of public purpose as defined in an Attorney General's opinion dated April 25, 1979. W -C-19 Travel Expenses — No expenditures of City money for travel expenses of spouses of City officials or employees were noted. IV -D-19 Business Transactions — No business transactions between the City and City officials or employees were noted. IV -E-19 Bond Coverage — Surety bond coverage of City officials and employees is in accordance with statutory provisions. The amount of coverage should be reviewed annually to insure that the coverage is adequate for current operations. IV -F-19 Council Minutes — No transactions requiring Council approval which had not been approved by the Council were noted. IV -G-19 Deposits and Investments — No instances of noncompliance with the deposit and investment provisions of Chapter 12B and Chapter 12C of the Code of Iowa and the City's investment policy were noted. IV -H-19 Revenue Notes — There were no instances of noncompliance with revenue note provisions. IV -1-19 Annual Urban Renewal Report — The annual urban renewal report was properly approved and certified to the Iowa Department of Management on or before December 1. IV -J-19 Payment of General Obligation Bonds — The City appears to be in compliance with Chapter 384.4 of the Code of Iowa. 149 AI 111 .0 U7P CITY ❑F IOWA CITY 410 East Washington Street Iowa City. Iowa 52240-1826 (3 19) 356-5000 (319) 356-5009 FAX www.icgov.org City of Iowa City, Iowa Corrective Action Plan Year Ended June 30, 2019 Anticipated Findings Findings Relating to Federal Awards: 2019-001 The City has inadequate documentation of pre - inspections and post -inspections performed on homeowner occupied rehabilitation projects. 150 Date of Completion and Responsible Corrective Action Contact Person Plan See response and Tracy Hightshoe corrective action plan at 2019-001 June 30, 2020 Item Number: 4. �r -4 "m ot r4" N CITY OE IOWA CITY www.icgov.org December 19, 2019 Civil Service Examination: Maintenance Worker II - Transportation ATTACHMENTS: Description Civil Service Examination: Maintenance Worker I I - Transportation l i CITY OF IOWA CITY 410 East Washington Street Iowa City, Iowa 52240- 1 826 (3 19) 356-5000 (319) 356-5009 FAX www.icgov.org December 5, 2019 TO: The Honorable Mayor and the City Council RE: Civil Service Entrance Examination — Maintenance Worker II — Transportation Services Under the authority of the Civil Service Commission of Iowa City, Iowa, I do hereby certify the following named person(s) as eligible for the position of Maintenance Worker I I —Transportation Services. Joshua Bartruff IOWA CITY CIVIL SERVICE COMMISSION R ck Wys Chair Item Number: 5. CITY OE IOWA CITY www.icgov.org December 19, 2019 Historic Preservation Commission: December 12 ATTACHMENTS: Description Historic Preservation Commission: December 12 MINUTES HISTORIC PRESERVATION COMMISSION EMMA J. HARVAT HALL December 12, 2019 MEMBERS PRESENT: MEMBERS ABSENT STAFF PRESENT OTHERS PRESENT PRELIMINARY Thomas Agran, Helen Burford, Cecile Kuenzli, Lyndi Kiple, Quentin Pitzen, and Jordan Sellergren Kevin Boyd, Gosia Clore, Sharon DeGraw Jessica Bristow Greg A Sims, Austin Wu RECOMMENDATIONS TO COUNCIL: (become effective only after separate Council action) CALL TO ORDER: Vice -Chairperson Agran called the meeting to order at 5:40 p.m. PUBLIC DISCUSSION OF ANYTHING NOT ON THE AGENDA: There was none. CERTIFICATE OF APPROPRIATENESS: 330 North Gilbert Street — Northside Historic District (rear porch opening relocations). The first agenda item concerned the property located at 330 North Gilbert Street where the applicant is requesting a second curb cut and driveway with a parking pad. Bristow stated that staff received an emailed letter from the applicant's lawyer this afternoon which was emailed to Commissioners and provided for them in hardcopy at the meeting. She said that since staff did not have time to read the letter or respond, staff would like to change the recommendation for the project. Bristow said that staff would recommend that the Commission defer the discussion and decision of the project until the January meeting at which time staff will have had the ability to respond to the letter. She said that the applicant had been emailed that the recommendation would change. Bristow said the project will be published with the letter and the response in the agenda packet. Agran asked the members of the public in attendance if they would be able to attend the January meeting instead. Bristow said that if they could not attend in January, they could email any comments to her to be shared at the meeting also. MOTION: Kuenzli moved to defer the project at 330 North Gilbert Street to the January 2020 meeting so that staff can respond to the additional information. Burford seconded the motion. The motion carried on a vote of 6-0. REPORT ON CERTIFICATES ISSUED BY CHAIR AND STAFF Certificate of No Material Effect — Chair and Staff Review. 1203 Sheridan Avenue— Longfellow Historic District (storm window replacement). HISTORIC PRESERVATION COMMISSION December 12, 2019 Page 2 of 6 Bristow said that while storm window replacement does not require review, several recent projects funded by the Historic Preservation Fund involved the replacement of storm windows, and sometimes the repair of the original windows so that the original windows are saved from demolition. Minor Review —Staff Review. 811 1/2 East College Street — College Green Historic District (exterior metal stair railing replacement). Bristow said that the stair replaced is the main access to the second -floor apartments on the rear building. Bristow showed an image of the front building and a photo of the fire escape stair on the back. She said that since the two stairs had matched before, the new one will also be similar. 123 North Linn Street — Local Historic Landmark (Brewery Square entrance door and arched transom replacement). Bristow this entrance is a non -historic addition between the Economy Advertising Building and the Union Brewery. She said the project is the replacement of the entry doors and windows and the arched transom window under the steel tube arch. Bristow said the steel tube will be repaired and painted and a storefront system will be installed in the entrance. CONSIDERATION OF MINUTES FOR NOVEMBER 14, 2019 MOTION: Kuenzli moved to approve the minutes of the Historic Preservation Commission's November 14, 2019 meeting. Pitzen seconded the motion. The motion carried on a vote of 6-0. COMMISSION INFORMATION AND DISCUSSION: Receipt of statement of eligibility for listing in the National Register of Historic Places for the Clinton Street and Railroad Depot Historic District. Bristow said that the attached letter was the official notification that the propose District was found to be eligible for listing in the National Register but was not listed because of owner objection. Bristow said that if the owners changed their mind at any time they could notify the National Park Service and the district would be immediately listed. Kuenzli asked if there might be a possibility that they would change their minds on this. Bristow said it seemed unlikely at this time. Unscheduled item from the floor: Greg A Sims asked permission to address the Commission on an item near and dear to his heart. Sims informed the Commission that there were historical documents, specifically, bank certificates issued by the Bank of New York that if located could be redeemed for as much as $250,000. The description of the certificate included a gold seal and several different ribbon attachments. Sims stated that he had grown up in Des Moines where preservation happened and they had done good work. He said that he appreciated history and this type of work. His information was being presented as a public service. Sims requested a copy of the Commission minutes as record of his participation in the meeting. HISTORIC PRESERVATION COMMISSION December 12, 2019 Page 3 of 6 Preliminary discussion of Dotential work plan activities Bristow said that the purpose of this discussion was to provide the Commission with information about on-going work and potential work. She said that since the creation of a work plan is required as a part of our Certified Local Government agreement, staff wished to have a preliminary discussion so that Commissioner interest in specific projects could be included in the work plan draft that will be presented next month. Bristow began with the list of regular tasks that happen on an annual basis, most of which are the daily tasks that occupy staff. Bristow continued with the high-priority projects. She said that the Downtown National Register Nomination is in process and will likely proceed to review by the State Nominating Review Committee in June which means it will be reviewed by the Commission in May. She said that since this is preservation month, we may have a public presentation. Bristow said that the University of Iowa planning project that is ongoing involves other staff and they will present to the Commission in January. Bristow said the Summit Street Monument was reviewed by a consultant as part of one of the grants that the Commission had last year. The consultant issued recommendations on how to preserve the monument. Because the deterioration is ongoing, this a high-priority project which will involve Commission review and a recommendation to City Council on how to move forward in regard to the monument. Bristow said that an update of the National Register listing of the College Green Historic District to include the house relocated to 623 College as a contributing resource is necessary for the current and future property owners. She said this is a good time to review the entire district to confirm the status of the other properties, especially since this is a small district. Bristow said that the Iowa City Preservation Handbook needs to be updated to correct inconsistencies and include recent code amendments. She said that given the scope of this project, it would be helpful to have a sub -committee of the Commission help with this process. Bristow continued with the low -priority or future projects list stating that the Sanxay-Gilmore House is on the list only to keep the Commission aware of the future project. She said that the budget for the project was removed and there may still be discussions on allowing it to remain. She showed a picture of the house so that new Commissioners would know which house was discussed. She said that the University letter from last year said that they do not have plans to use the space and that it may be three years before the house would need to be relocated or demolished. Bristow said that this project would likely begin with some programming discussions similar to those that happened with the recent landmarks on Gilbert Street. The process to move the house would be involved and likely take most of a year. Bristow said that the Montgomery -Butler House is a similar situation. She showed a photos and aerial images so the Commission would know where this house is located. She said that many years ago the City got a grant to study the house and another grant to mothball it. The mothballing is now failing. HISTORIC PRESERVATION COMMISSION December 12, 2019 Page 4 of 6 Bristow said in 2015 a stakeholder meeting about the project was inconclusive. Kuenzli asked if it could be sold off and become a single-family home. Bristow said that because it is on City property that is unlikely and better options will probably result in a use by Parks and Rec or something similar. Bristow said the next item is the update of the Brown Street National Register District. After the Commission reviewed the status of the house at 724 Ronalds and changed its status from contributing to noncontributing to the district, the State Historic Preservation Office wanted the district updated. Bristow said that while there is no rush, there are several other properties in the district whose status has changed and they could all be updated at the same time. Bristow said that evaluation of the Kirkwood Avenue area and Lucas Farms could begin at any time because the first step is a reconnaissance survey which can be done by volunteers with limited training. She said that given the strength of the neighborhood involvement in the area, they may be interested in helping. Bristow said that the evaluation of the Mid -Century housing stock was something that began as an interest in the 2015 work plan but it was not a priority once the Commission began moving forward with a list of individual landmarks. This could also begin as a reconnaissance survey or mapping project. Agran asked if these latter were all supposed to be completed in the coming year or whether they were just suggestions of topics from which the Commission might make a selection. Bristow replied that the list is more of an aspirational list of targeted projects but that constraints on staff time and commissioners' availability suggested that the Commission should target the high priority projects and further, that if any commissioner had a particular interest in a project in another category, he or she would be welcome to pursue that as a goal for the year. Kiple indicated her interest in the Summit Street Monument project. Sellergren said she would be happy to help gather information to designate Kirkwood Ave as a historic neighborhood. She said she could take down info about house exteriors and cross check background info on the assessor site. Burford said that she could assist in the review of her College Green District and that update. Kiple asked for more information on the digital online presence project. Bristow said that in 2015 when she performed a study of Historic Preservation Staffing in other communities it was noticed that other communities had a much stronger digital presence. She said that this helped increase the availability of information and has been on the work plan ever since. She said it would likely take involvement with the City IT department which currently doesn't have time budgeted for the project. Kuenzli said she would be interested to be on the committee to consider replacement of the Summit Street historic monument marker. Bristow said she felt she had enough information from the discussion to create the draft work plan for review at the next Commission meeting. HISTORIC PRESERVATION COMMISSION December 12, 2019 Page 5 of 6 Bristow introduced and welcomed the new at -large Commissioner, Austin Wu, who was attending the meeting for observation prior to completing training and joining the Commission for the January meeting. ADJOURNMENT: Kiple moved to adjourn the meeting. Seconded by Pitzen. The meeting was adjourned at 6:15 p.m. Minutes submitted by Judy Jones HISTORIC PRESERVATION COMMISSION December 12, 2019 Page 6 of 6 ATTENDANCE RECORD 2018-2019 TERM NAME EXP. 1/10 2/14 3/14 4/11 5/09 5/23 6/13 8/08 8/19 9/12 10/10 11/14 12/12 AGRAN, 6/30/20 O/E O/E X O/E O/E X X X X X X X X THOMAS BOYD, KEVIN 6/30/20 X X X X X O/E X X X X O/E X O/E BUILTA, ZACH 6/30/19 X X X X X X X -- -- -- -- BURFORD, 6/30/21 X X X O/E X X X X X X X X X HELEN CLORE, 6/30/20 O/E X X X O/E X O/E O/E X X X X O/E GOSIA DEGRAW, 6/30/19 X O/E X X X X O/E X X O/E O/E X O/E SHARON KARR, G. T. 6/30/20 X X X X X X X X X X -- -- -- KUENZLI, 6/30/19 X O/E X X X X O/E X X O/E O/E X X CECILE KIPLE, LYNDI 6/30/22 __ __ __ __ __ __ __ X X X X X X PITZEN, 6/30/21 X X X X X X X X X X X X X QUENTIN SELLERGREN, 6/30/22 -- -- -- -- -- -- -- X X X X X X JORDAN SHOPE, LEE 6/30/21 O/E X X X X X O/E Item Number: 6. �r -4 "m ot r4" N CITY OE IOWA CITY www.icgov.org December 19, 2019 Park & Recreation Commission: December 11 ATTACHMENTS: Description Park & Recreaiion Commission: December 11 IOWA CITY PARKS & RECREATION COMMISSION PRELIMINARY MINUTES DECEMBER 11, 2019 ROBERT A. LEE RECREATION CENTER — MTG ROOM B Members Present: Stephen Bird, Cara. Hamann, Ben Russell, Angie Smith, Jamie Venzon, Brianna Wills, Blake Winter, Joe Younker Members Absent: None Staff Present: Brad Barker, Zac Hall, Juli Seydell Johnson Others Present: Don Marner & Nick Strang, Snyder & Associates CALL TO ORDER Chairman Younker called the meeting to order at 5 pm. RECOMMENDATIONS TO COUNCIL: (to become effective only after separate Council action): None OTHER FORMAL ACTION: Moved by SmhL seconded by Wills to approve the November 20 2019 meeting minutes Its written. Passed 8-0. PUBLIC DISCUSSION None FAREWELL TO OUTGOING COMMISSION MEMBERS: Seydell Johnson announced that Suzanne Bentler submitted her resignation from the Parks & Recreation Commission on December 2, effective immediately. Younker and Hamann also conclude their terms on the board January 31, 2019. Two new board members have been appointed and the third vacancy is open for applications through the City Clerk's Office. Both Hamann and Younker have been on the board for eight years. Seydell Johnson thanked them for their service and praised them for their input and serving as Chair and Vice Chair. Hamann said that she has learned a lot while on the Commission, including a lot about operations of the City. She said she had no idea before becoming a member that the Parks & Recreation Department had such a large budget and praised the staff for all the work they've done in the community and is excited about all the projects that have been completed and those coming. Younker shared that he is impressed with the scope and the breadth of work that the Parks and Recreation staff does, working with multi -million -dollar projects to creating programs for children. He has enjoyed getting to know staff and other commission members through the years. He thanked both the staff and commission for their support. PARK PROJECT UPDATE PRESENTATION: Nick Strang and Don Marner from Snyder & Associates were at tonight's meeting to present an update of upcoming projects slated for 2020. Strang noted that he and Marner, along with staff, held public input PARKS AND RECREATION COMMISSION December 11, 2019 Page 2 of 6 meetings at Scott, Fairmeadows and Wetherby Parks. Two of these were held during Party in the Park events. Attendees were invited to vote on the various playground options and could ask questions about the projects and give their input. For those that were unable to attend, an on-line option was also made available for public input. Both options provided good feedback. Strang and Marner were able to consolidate the information collected and then shared that information with staff. Maurer noted that Snyder & Associates staff are nearing completion of creating the construction documents. These projects will go to bid in January/February, contractors will be selected in the spring and construction of the shelters and playgrounds will begin in the Slimmer of 2020. Marner presented updates on the upcoming park projects. Scott Park: Marner explained that the existing shelter will be demolished and a new shelter constructed and placed in a new location within the park The new shelter will have access to a sidewalk that will then form a loop around a new playground. Seydell Johnson shared that this playground will be similar in size to those in Cardigan and Frauenholtz Miller Parks. Marner further noted that since the new shelter and play equipment are going into new spaces in the park, the existing shelter and playground will not be demolished until after completion of the new features. This will allow for continued use during construction. Napoleon Park; Marner stated that the existing playground will be removed and the new one will be placed outside of the ball field area near the concession building. Canopies are proposed for the play areas, however, the two smaller canopies over the smaller play areas will depend on the bids that come in and what the budget will allow for. Seydell Johnson shared that the users of this playground are usually those attending ball tournaments. She also said that the existing playground has presented a lot of drainage issues. The new playground will have a poured -in-place surface. Hall explained that when the original playground was put in, that drainage the was installed, however, that was 20 years ago and it has likely deteriorated. It has been much worse during the last two years and, in fact, was closed most of the summer. Wells said that she loves the roped/webbing piece of equipment proposed for the new play area. Venzon said she really appreciates the idea of having canopies for shading over the structures. Bird asked if there is a way to solicit donations for the two smaller canopies if necessary. Seydell Johnson said that there is that possibility and will consider this idea. Smith expressed her concern of the playground being closer to the road. Hall noted that in a separate project, and as part of the natural areas plan that began in 2016, the entire hillside along South Gilbert St. and the concession area has been filled in with prairie plantings which provides a buffer between the playground/concessions and the road. Seydell Johnson said that parents have voiced their concerns about the current playground location being close the river. Hamann asked if there were any plans for bike parking. Seydell Johnson said it is not in the current plan but will make note of it. Fairmeadows Park: Marner noted that the current playground is somewhat secluded behind other buildings. The existing shelter will be demolished and the new one will be relocated to a more central area of the park. The shelter and new play area will tie in to the existing sidewalk and parking lot, as well as the splashpad. Seydell Johnson explained that this playground will serve the younger child since there is a playground at Grant Wood Elementary available for the older children and is next to this park. Marner noted that there will be swings at the park as well. Hamann noted that the parking lot at Fairmeadows is quite difficult to see and that several, including herself until recently, didn't know that it existed. Seydell Johnson said that the planned layout will make the parking area more obvious with the amenities connecting to the path and parking lot. Younker asked if there are signs m place directing to the parking lot. Seydell Johnson said there are not as there are some property limitations that make this difficult. PARKS AND RECREATION COMMISSION December 11, 2019 Page 3 of B Wetherby Park: Marner shared that the splashpad will remain in the park in its current location, however, the rest of the park will be updated. A shelter, like the one that is. at Willow Creek Park, will be built and placed closer to the parking lot. There will also be new restrooms installed with the front of that building facing the parking lot. The play area will consist of two pods; one containing the swings and the other will contain the rest of the play equipment. Manner shared two images of potential play structures with the commission. The first image is more of an obstacle course layout and is a little more spread out; second image is more compact and like other playgrounds in other parks. Bird asked what age this park is expected to serve the most. Wills expressed that she likes the first image as it is different than. most. Bird noted that he too prefers this option in that it offers more options for kids to play together on the various structures. The commission unanimously agreed that the first option is preferred. Younker reminded commission that during the annual parks tour they spoke with a young man that was playing basketball at Wetherby Park. He said that the basketball court gets very hot. Younker asked if there is a plan for moving or shading the existing court. Seydell Johnson said it is not included in this plan. She shared that a Community Development Block Grant will help to fund the paving of the trail that was asked for by the neighborhood. If the department were to receive more grant funds in the future, they would talk about some type of shade at that point. Wills asked how to shade a whole basketball court. Seydell Johnson explained that there would be shaded areas over seating around the court, not over the court itself. Hamann noted that there is also a basketball hoop near the parking lot and asked if that was going to be removed. Seydell Johnson said it will remain in place as it is used a lot. TREE UPDATE: Seydell Johnson asked Hall to present a tree update to Commission. Hall referred to the Iowa Statewide Urban Design and Specifications manual (SUDAS). Hall reviewed that a large project in 2019 was the treating of 395 ash trees that have been infected with BAB. These were all street trees. Staff is looking to treat another 200 or more ash trees within the park system. While those treated in 2019 were spread throughout the community, the majority are in the older east side neighborhoods as that is where the more mature trees are located. He noted that TruGreen has been great to work with and the City will continue working with them in the future. He explained that we are in the thick of the EAB infestation and, therefore, expects there to be more tree removal necessary in 2020. Hall shared that the staff and school district worked together to create a very successful Arbor Day Celebration in April of 2019. Staff shared in a tree planting activity with Hoover Elementary and City High. This activity also involved DNR and Trees Forever stag. The group planted over 200 trees at Terry Trueblood Recreation Area. United Way also planted trees at the park in celebration of their 100 -year anniversary. Four hundred saplings were distributed to the community. The highlight of 2019 was that the department received its 391 annual award as a Tree City USA winner. The Department also received the Trees Forever Outstanding Project award for the Arbor Day activity. Fall noted that a Tree Advisory Board was formed in 2018. Two of the members of that included Hamann and Younker so will look at replacing them on this board as well. Also created in 2019 was a group from the school district, North Liberty, Coralville and the University creating a corridor canopy committee. This has been very helpful and allowed all to see what everyone else is dealing with and their challenges. Hall said that staff pruned over 2000 trees, removed 130 non- ash and 200 ash trees; treated 395 ash trees as mentioned and planted over 500. He stated that the goal is a 2:1 ratio. Staff was not quite able to meet that goal due to the removal of the ash trees. PARKS AND RECREATION COMMISSION December 11, 2019 Page 4 of 6 Hall shared his outlook for 2020. He said that they hope to receive the Tree City USA Award making it 40 consecutive years that they have done so. Staff is looking to plant 800 trees and give away 800 saplings, doubling their numbers from 2019. Venzon asked Hall to remind the commission how staff determined whether to remove or treat an ash tree infected with EAB. Hall explained that the City contracted with arborists to assess and catalogue within the database which trees could benefit from treatment. Part of the assessment included evaluating the health of the tree and assessing it for damage. Staff and the DNR District Forester completed a walkthrough as well assessing over 200 trees. Smith said that she has been approached by a couple of people who said that Iowa City needs to plant more trees. She asked how the number of trees planted compare to what is expected. Hall reported that most communities try to hit a 40% canopy coverage. In the 2016 assessment, it was found that Iowa City has a 36% canopy. He further stated that there is always a need to plant more trees and will continue doing so while being thoughtful about where they are planted. Considerations include below ground and overhead utilities. Also, intersections, driveways etc. which can narrow available planting space. Six feet of planting space is the minimum area necessary. Seydell Johnson explained that the process requires a lot of give and take. Planting a tree is only the first step as staff must pay close attention for the first few years of growth. The department is looking at some homeowner programs to encourage residents to plant on their own property. She noted that some neighborhoods have more trees than others and the staff would like to see a more equitable distribution. Seydell Johnson said that the draft budget includes the addition of two full-time forestry employees. If approved, this will help with some of these issues. Wills asked about the possibility of planting trees and landscaping in the median on Highway 6. Hall said that there are a lot of limitations with the IDOT. Wills stated that there is a lot of litter on these medians and they are not well maintained, Hall said that they are drainage ways which make them difficult to mow. Smith asked how the 800 saplings will be distributed. Hall said it will be linked to the next Arbor Day Celebration. She asked if they will be distributed to private homeowners. Hall said they will be distributed to the students. REPORT ON ITEMS FROM CITY STAFF: Parks & Recreation Director — Juh Seydell Johnson: Seydell Johnson reported that the deer management program continues and that they are hitting the numbers they had hoped for. She continues to get calls about the parks being closed. A few of the sites may open sooner than planned due to low deer population in those locations. Seydell Johnson noted that new TV monitors have been placed in the Recreation Center Meeting Rooms A & B. She said that three monitors will be placed at the Terry Trueblood Recreation Area Lodge as well replacing the current projector/screen set-up. Park projects are currently stalled due to winter weather. Recreation Division Su erintendent — Brad Barker. Barker distributed the new activity guide to commission members and announced that registration will begin Thursday, December 12. Staff is looking to move ahead with the swim lesson scholarship program and will be sharing information about this option with the local before and after school programs. Transportation remains the biggest obstacle so PARKS AND RECREATION COMMISSION December 11, 2019 Page 5 of B will be working on ways to get the kids to these lessons. Staff is busy with hiring for the winter/spring programs. Barker announced that the Communications and Special Events Program Supervisor position has been filled. This person will begin her employment on January 6. She currently works in Colorado in a very similar position. Staff is very excited to bring her on board. Neumann reminded Commission of the Holiday Market being held this Saturday, December 14 in the Recreation Center, Over 80 vendors are participating in the second of two Holiday Markets. Parks Division Superintendent — Zac Hall: Hall reported that staff is transitioning into winter. Hall again noted that staff is working towards prairie establishment in turf grass areas that are not all that active such as hillsides and drainage ways. Staff planted 25 acres this last year on the hillside along Gilbert St. near Napoleon Park. Staffs goal is to convert 100 acres over the next 4 years from turf to prairie. Hall will be posting seasonal positions beginning in January. CHAIRS REPORT Younker again thanked everyone for their support during his eight years on the commission. COMMISSION TIME: No comments ADJOURNMENT: Moved by Hamann. seconded by Venzon, to adjourn the meeting at 5.45 P m Motion Passed 8-0. PARKS AND RECREATION COMMISSION December 11. 2019 Page 6 of 6 PARKS AND RECREATION COMMISSION ATTENDANCE RECORD NAME TERM EXPIRES a t n o, a Suzanne 12/31/20 X NM X O/E X LQ X XLQ X X O/E Steve Bird 12/31/21 X NM X X X LQ O/E X X X LQ O/E Lucas Foelsch 12/31/22 x NM X X O/E LQ X Cara Hamann 12/31/19 X NM X X X LQ X X LQ X O/E X Ben Russell 12/31/21 X NM X X X LQ X X X X LQ X Angie Smith 12/31/21 X NM X X X LQ X O/E LQ X X X Jamie Venzon 12/31/20 X NM X O/E O/E LQ X O/E LQ X X X Brianna Wills 12/31/22 O/E NM X X X LQ X O/E LQ X X X Blake Winter 12/31/22 * * * * * * * * * X X X Joe Younker 12/31/19 X NM X X X LQ X X LQ X X X KEY: X = Present O = Absent O/E = Absent/Excused NM = No meeting LQ = No meeting due to lack of quorum f = Not a member now SNYDER &ASSOCIATES DECEMBER 11, 2019 SCOTT, NAPOLEON, FAIRMEADOWS AND WETHERBY PARK IMPROVEMENTS CITY OF IOWA CITY Dvp.rqll Q Scott Park IL r ar/arr 7-4 .. 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M ' 4JAJ4 t IL 1 ) - y `lxC i Scott Park - Existing SNYDER A ASSOCIATES Scott Park -proposed Layout SNYDER &ASSOCIATES i 11111111 r.7 uJ a fOWA CRY - Scott Park Color selection Napoleon Park a Aerial G%NYDER ASSOCIATES Napoleon Park - Existing S�NYDER ASSOCIATES Napoleon Park - Proposed Layout �SNYDER &ASSOCIATES I •6�s7�I�, 1 � l� �; � �•'«7. t. � * _ � � i �' �y� �. i � �S ` � `� -• - - � ; �, �, ... � �� � -' #� �lCr _ '�i �i ;; 7 � r. -. _ � � � C� 'V 1 - � ] i - i4 - i � �'�t x Ole alms Fairmeadows Park -Proposed Layout SNYDER &ASSOCIATES Fairmeadows dark -- Play Equipment a SNYDER &ASSOCIATES Wetherby Park -Aerial SNYDER S ASSOCIATES 15 i Wetherby Park - Proposed Layout SNYDER &ASSOCIATES 17 rp A, em -14 AM ddra IL Wetherby Park - PJav Equipment Option 2WMEMEMMEMMEN � MMM� MRSNYDER A ASSOCIATES T_. _ � Wetherby Park - � ,• + {�� . _,.., .._- _ - r36708Kr-0a-�74 • iz.��.arna �:vir.n..��.uar 19 SNYDER & ASSOCIATES DECEMBER 11, 2019 SCOTT, NAPOLEON, FAIRMEADOWS AND WETHERBY PARK IMPROVEMENTS CITY OF IOWA CITY