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2020-04-21 Resolution
Item Number: 5.b. AL CITY OF IOWA CITY =�c�- COUNCIL ACTION REPORT April 21, 2020 Resolution awarding contract and authorizing the Mayor to sign and the City Clerk to attest a contract for construction of the FY20 Wastewater Clarifier Repairs Project. Prepared By: Ben Clark, Sr. Civil Engineer Reviewed By: Jason Havel, City Engineer Ron Knoche, Public Works Director Geoff Fruin, City Manager Fiscal Impact: $476,000 available in the Wastewater Clarifier Repairs account #V3144 Recommendations: Staff: Approval Commission: N/A Attachments: Resolution Executive Summary: This agenda item awards the construction contract for the FY20 Wastewater Clarifier Repairs Project. Based on the bids received, staff recommends awarding the contract to Fab Tech Wastewater Solutions, LLC. Background /Analysis: The project manual and estimate of cost, prepared by the Engineering Division, were approved at the February 4, 2020 City Council Meeting. The project was initially awarded and the award subsequently rescinded due to a material error by the low bidder. As a result, the project was re- bid, and two addenda were issued to provide minor clarifications and to fix a new time and place for receipt of bids. The estimated cost of construction is $375,000, and three (3) bids were submitted to the City Clerk prior to the April 15, 2020 deadline: Bidder Name L-litty Total Bid Amount Fab Tech Wastewater Solutions, Warrenton, MO $476,000.00 LLC Miron Construction Company, Inc. Cedar Rapids, IA $497,009.00 Tricon Construction, Inc. Cedar Rapids, IA $628,000.00 Staff believes the estimated cost of construction was low due to the scope of work and market fluctuations in material prices. Based on the current bids received April 15, 2020 and the original bids received February 24, staff does not believe delaying the project and rebidding in the future will result in lower prices. Staff recommends awarding the contract to Fab Tech Wastewater Solutions, LLC from Warrenton, MO. The four original clarifiers that were constructed circa 1989 were drained and inspected in calendar year 2012 during the design phase of the Wastewater Treatment Facilities Consolidation Project. The inspection revealed corrosion on significant portions of the mechanisms. Two of these clarifiers were repaired in fiscal year 2017. This project will repair the remaining two that still have their original carbon steel mechanisms and which are nearing the end of their useful life. The project is expected to be completed in the Fall of 2020. ATTACHMENTS: Description Resolution Prepared by. Ben Clark, Public Works, 410 E. Washington St., Iowa City, IA 52240 (319)3565436 Resolution No. 20-96 Resolution awarding contract and authorizing the Mayor to sign and the City Clerk to attest a contract for construction of the FY2O Wastewater Clarifier Repairs Project Whereas, Fab Tech Wastewater Solutions, LLC of Warrenton, Missouri, has submitted the lowest responsible bid of $476,000 for construction of the above-named project; and Whereas, funds for this project are available in the Wastewater Clarifier Repairs account #V3144; and Whereas, the City Engineer and City Manager are authorized to execute change orders according to the City's Purchasing Policy as they may become necessary in the construction of the above- named project. Now, therefore, be it resolved by the City Council of the City of Iowa City, Iowa, that: The contract forthe construction of the above-named project is hereby awarded to Fab Tech Wastewater Solutions, LLC subject to the condition that awardee secure adequate performance and payment bond, insurance certificates, and contract compliance program statements. 2. The Mayor is hereby authorized to sign and the City Clerk to attest the contract for construction of the above-named project, subject to the condition that awardee secure adequate performance and payment bond, insurance certificates, and contract compliance program statements. Passed and approved this 21st day of Attest City lerk It was moved by trims adopted, and upon roll call there were: Ayes: X X X X X X X 2020 City Attorney's Office - 4/16/2020 and seconded by Thomas the Resolution be Nays: UNT-Vi Bergus Mims Salih Taylor Teague Thomas Weiner 6.6 Item Number: 5.c. �, CITY OF IOWA CITY -�"�'�� COUNCIL ACTION REPORT April 21, 2020 Resolution authorizing the procurement of three (3) snow plow trucks for Streets Operations. Prepared By: Dan Striegel, Equipment Superintendent Reviewed By: Ron Knoche, Public Works Director Geoff Fruin, City Manager Fiscal Impact: $564,231.00; funds for this purchase are available in the Equipment Replacement fund account Recommendations: Staff: Approval Commission: N/A Attachments: Resolution Executive Summary: At the April 21, 2020 City Council meeting, consideration will be given to a resolution authorizing the purchase, for replacement and upgrade, of three (3) snow plow trucks for Streets Operations. Request for Bid #20-246 will be utilized for the procurement of the three cab and chassis trucks from Truck Country in Cedar Rapids, IA totaling $243,693.00. Sourcewell cooperative contract #080818 -HPI will be utilized for the procurement of the three snow plow body packages from Henderson Products Inc. in Manchester, IA totaling $320,538.00. Total purchase price is $564,231.00. Funds are available in the Equipment Replacement Fund account. Background /Analysis: The Streets Division utilizes fourteen snow plow trucks for winter operations. These new trucks will be replacing three of the 2010 model year plow trucks currently in the fleet that have exceeded their life expectancy. ATTACHMENTS: Description Resolution Prepared by: Dan Striegel, Equipment Superintendent, 1200 S. Riverside Drive, Iowa City, IA 52246 (319) 356-5197 Resolution No. 20-97 Resolution authorizing the procurement of three (3) snow plow trucks for Streets Operations. Whereas, three (3) snow plow trucks are budgeted for replacement in Fiscal Year 2020; and Whereas, Request for Bid #20-246 will be utilized for the purchase of the three cab and chassis trucks totaling $243,693.00; and Whereas, Sourcewell cooperative contract # 080818 -HPI will be utilized for the purchase of the three snow plow body packages totaling $320,538.00; and Whereas, the total purchase price of the three complete snow plow trucks is $564,231.00; and Whereas, the amount exceeds the City Manager's spending authority of $150,000, thus requiring City Council approval; and Whereas, funds for this purchase are available in account # 81710520; and Whereas, approval of this procurement is in the public interest. Now, therefore, be it resolved by the City Council of the City of Iowa City, Iowa, that: 1. The proposed procurement as described above is approved. 2. The City Manager is authorized to take the steps necessary to make the purchase. Passed and approved this 21st day of April , 2020 Attest: 4CileLrkk---e It was moved by Mims and seconded by adopted, and upon roll call there were: Ayes: X X X X X X X Nays: Aro a by / City Attorney's Office - 4/21/2020 Thomas Absent: Bergus Mims Salih Taylor Teague Thomas Weiner the Resolution be S, t; Item Number: 6.a. �r P_ CITY OE IOWA CITY www.iogov.org April 21, 2020 Motion setting a public hearing for May 5, 2020 on an ordinance conditionally rezoning land near the intersection of Eastbrook Street and American Legion Road from Interim Development Single -Family (ID -RS) to Neighborhood Public (P-1) for approximately 2.14 acres, to Low Density Multi -Family Residential (RM -12) for approximately 10.64 acres, and to Low Density Single -Family Residential (RS -5) for approximately 22.51 acres. (REZ19-13) ATTACHMENTS: Description Public Hearing Notice Staff Report with Attachments NOTICE OF PUBLIC HEARING Notice is hereby given that a public hearing will be held at which the Council will consider: An ordinance conditionally rezoning land near the intersection of Eastbrook Street and American Legion Road from Interim Development Single -Family (ID -RS) to Neighborhood Public (P-1) for approximately 2.14 acres, from Interim Development Single -Family (ID -RS) to Low Density Multi -Family Residential (RM -12) for approximately 10.64 acres, and from Interim Development Single - Family (ID -RS) to Low Density Single - Family Residential (RS -5) for approximately 22.51 acres. (REZ19-13) Copies of the proposed ordinance and conditional zoning agreement are on file for public examination in the office of the City Clerk, City Hall, Iowa City, Iowa, which is currently closed to the public because of the coronavirus. Copies are available by telephoning the City Clerk at 319/356-5043 or emailing kellie-fruehling(a�iowa- city.org. The public hearing will be held at 7:00 p.m. on April 21, 2020, in Emma J. Harvat Hall of the Iowa City City Hall, 410 E. Washington Street, Iowa City. If City Hall remains closed to the public, the meeting will be an electronic meeting using the Zoom Meetings Platform. For information on how to participate in the electronic meeting, see www.icgov.org/councildocs or telephone the City Clerk at 319/356-5043. Persons wishing to make their views known for Council consideration are encouraged to participate. Kellie Fruehling, City Clerk To: Planning & Zoning Commission Item: REZ19-13 GENERAL INFORMATION: STAFF REPORT Prepared by: Ray Heitner, Associate Planner Date: April 2, 2020 Applicant: Allen Homes, Inc. PO Box 3474 Iowa City, IA 52244 319-350-8238 allenhomesinc@gmail.com Contact Person: Property Owner: Same as Applicant Allen Development, LLC PO BOX 3474 IOWA CITY IA 52244 Summit Ridge, LLC PO BOX 3474 IOWA CITY IA 52244 Requested Action: Rezoning from Interim Development - Single - Family Residential (ID -RS) to Low Density - Multi -Family Residential (RM -12), Low Density - Single -Family Residential (RS -5), and Neighborhood Public (P-1). Purpose: Development of single-family and multi -family housing, and a fire station. Location: East of Eastbrook Street and north of American Legion Road K Location Map: Size: Existing Land Use and Zoning: Surrounding Land Use and Zoning Comprehensive Plan: W 35.29 acres Farmland, Interim Development — Single -Family Residential (ID -RS) North: P-1 — Neighborhood Public (Parkland) South: R — County Residential (Farmland and Religious Space) East: RS -5 - Low Density Single -Family Residential (Residential) West: P-1 — Neighborhood Public (Parkland) RM -12 - Low Density Multi -Family Residential (Residential) Southeast District Plan District Plan: Southeast District Plan — Low/Medium Single - Family Residential and Duplex; Medium/High Density Single -Family Residential and Townhouse Neighborhood Open Space District: File Date: 45 Day Limitation Period: SE3 November 27, 2019 (Original Submission Date) March 13, 2020 (Revised Submission) The applicant has waived the 45 -day limitation period. BACKGROUND INFORMATION: An application submitted by Allen Homes, Inc. for a rezoning of approximately 35.29 acres located north of American Legion Rd and east of Eastbrook St from Interim Development - 3 Single -Family Residential (ID -RS) to 10.64 acres of Low Density Multi -Family Residential (RM -12), 22.51 acres of Low Density Single -Family Residential (RS -5), and 2.14 acres of Neighborhood Public (P-1). Earlier this year, the Council approved an annexation and rezoning of the subject property to Interim Development Single -Family Residential (ID -RS) with the following conditions: 1.The developer satisfies the Comprehensive Plan's Annexation Policy, as stated in Resolution 18-211. 2. The dedication of 17 feet of additional public right-of-way along American Legion Road to be dedicated to the City at the time of final platting. 3. Conveyance of a temporary construction easement to the City along the north side of American Legion Road. Due to concerns over COVID-19, staff asked the applicant not to hold an in-person good neighbor meeting. Instead, the applicant mailed out pertinent materials to area neighbors. ANALYSIS: Current Zoning: Earlier this year, the City Council approved the annexation and rezoning of the subject property from County Residential (R) to Interim Development Single -Family Residential (ID -RS). The Secretary of State's Office is currently reviewing the application for annexation. The Interim Development zone is intended to provide areas of managed growth in which agricultural and non -urban land uses can continue until the City is able to provide services to support development. Under this zoning, the only use that is permitted by right is agriculture. Therefore, a subsequent rezoning is necessary for the property owner to develop the property beyond an agricultural use. Proposed Zoning: The applicant is requesting a rezoning of the subject property to 10.64 acres of Low Density Multi -Family Residential zone (RM -12), 22.51 acres of Low Density Single -Family Residential zone (RS -5), and 2.14 acres of Neighborhood Public zone (P-1). The purpose of the Low Density Multi -Family Residential zone (RM -12) is to provide for the development of high density, single-family housing and low density, multi -family housing. This zone is intended to provide a diverse variety of housing options in neighborhoods throughout the city. Careful attention to site and building design is important to ensure that the various housing types in any one location are compatible with one another. The applicant has submitted the attached concept plan, dated 02/26/2020. The concept shows a total of 104 stacked -flat units and 6 townhouse units in the proposed RM -12 zone. Six 8 -10 -unit stacked -flat buildings are shown south of the proposed Eastbrook Street extension, with another four 12 -unit stacked -flat buildings shown to the north of Eastbrook Street. Densities range between 8-16 units per acre on the proposed RM -12 lots, with densities on the stacked -flat lots between 12-16 units per acre. The proposed density conforms with what is allowed under the RM -12 zone. The low density single-family residential zone (RS -5) is primarily intended to provide for single-family housing opportunities. The regulations are intended to create, maintain, and C! promote livable neighborhoods. The regulations allow for some flexibility of dwelling types to provide housing opportunities for a variety of household types. This zone also allows for some nonresidential uses that contribute to the livability of residential neighborhoods, such as parks, schools, religious institutions, and daycare facilities. Related nonresidential uses and structures should be planned and designed to be compatible with the character, scale, and pattern of the residential development. The attached concept plan shows 56 single- family residential lots on the area to be rezoned to RS -5, with an average density of 4.41 units per acre. This range in density conforms with what is allowed under the RS -5 zone. The Neighborhood Public (P-1) zone accommodates uses such as schools, parks, police and fire stations, and other civic buildings owned or otherwise controlled by the county, the city, or the Iowa City community school district. These uses are subject to certain development standards in order to create a transition between public and private uses. The attached concept plan shows the proposed P-1 zone lot as a site for a future City fire station. Rezoning Review Criteria: Staff uses the following two criteria in the review of rezonings: 1.Consistency with the comprehensive plan; 2.Compatibility with the existing neighborhood character. Consistency with the Comprehensive Plan: The Southeast District Plan shows the subject property within the City's growth area, with two different land use designations over the subject property (see Figure 1.0). The Low/Medium Density Single -Family and Duplex land use designation covers the majority of the subject property and envisions development at a density of 2-8 dwelling units per acre. The Medium/High Density Single -Family and Townhouse designation covers the western portion of the property and envisions zero lot line development, duplexes, townhouses, and narrow lot detached single-family at a density of 8-13 dwelling units per acre. Figure 1.0 — Subject Property within the Southeast District Plan Ma Legend - — Creeks and Streams •---• Growth Area Limit - 17-1 SE District Boundary Possible Elementary Sites Lt Future Alley - . - - Future Collector Street Future Local Street r Future Land Utes J C LowNedium Density SF & Duplex 1 r MediumrHigh Density 5F & Townhouse L'. 171 .I �4 r � ■ 5 Within the western portion of the property, lots 57 and 59 in the attached concept plan show a slightly higher density (just under 14 units/acre) than what is envisioned for this area in the Southeast District Plan (8-13 units/acre). On these lots, the concept plan shows stacked -flats, which is a housing type not contemplated in the Southeast District Plan. Rather, the plan generally calls for detached and attached single-family and townhouse - style housing. However, the Comprehensive Plan calls for increasing housing options within the Southeast District and encouraging a mix of housing types within new neighborhoods; which the proposed concept plan accomplishes. The Comprehensive Plan also calls for the continued development of interconnected street networks. Specifically, the Plan calls for new neighborhoods to be designed in a manner that contributes to the larger interconnected street pattern of the city and that provides for safe, efficient and orderly movement of vehicular, pedestrian, and bicycle traffic. The attached concept plan accomplishes this objective by extending Eastbrook Street to the east, thereby providing a connection between the future north -south road and the Eastbrook Flats neighborhood to the west. Despite the slightly higher planned density in the RM -12 zone areas, the housing diversity and street connectivity shown in the concept plan align with the policy direction provided in the Southeast District Plan. Therefore, staff recommends a condition that development on the subject property generally conform to the attached concept plan, dated 02/26/2020, which will include the extension of Eastbrook Street to the future north -south street. Compatibility with the Existing Neighborhood: The RS -5 zoning that is proposed along the property's east side matches the zoning and scale of housing seen to the east in the Windsor West neighborhood. The attached concept plan does show a transition in intensity from the 3 -flat multi -family housing to the west, to some townhouse housing along the southern portion of the proposed north -south street, to the detached single-family housing proposed throughout the eastern portion of the property. While the proposed extension of this style of multi -family housing to the east is more intense than what is detailed in the Southeast District Plan, the relative proximity of this housing to the Eastbrook Flats neighborhood, and to the intersection of Scott Boulevard and American Legion Road, help to justify the proposed extension of density eastward. Sanitary Sewer: The developer will be required to pay a water main extension fee of $456.75 per acre before public improvements are constructed. The subject property is located outside of the sewer tap -on fee district and will not be required to pay sanitary sewer tap -on fees. Stormwater: There is a stormwater detention easement over the northwestern portion of the property. The attached concept plan shows this detention easement decreasing in overall area but maintaining enough volume for the proposed development in the concept. Public Works staff has reviewed these preliminary estimates on the proposed changes to the detention easement area. The existing detention easement will need to be amended before any building permits can be issued for the proposed development. Staff is also recommending a condition that a permanent drainage easement from the American Legion Road improvement project, be dedicated to the City at a location to be determined by Public Works staff. In addition, staff is recommending a condition that no building permit shall be issued for any of the subject property until the City Council approves a final plat resubdividing the subject property to conform to the zoning boundaries established by the rezoning ordinance. LIS Environmentally Sensitive Areas: The subject property does not contain any environmentally sensitive features. The northern and western portions of the property are in the 100 and 500 -year flood plains. Access and Street Design: Staff is recommending carrying over conditions from the property's previous rezoning to ID -RS with respect to dedication of 17 feet of additional right-of-way to the City when the property is platted for future development, and another condition to allow for the conveyance of a temporary construction easement to the City along the north side of American Legion Road. These conditions support the public need for enhancing American Legion Road, thereby allowing it to be used as an arterial road. Staff views the extension of Eastbrook Street as a positive aspect of the concept plan. The plan also provides internal connections to the existing street network that has been established in the Windsor West and Eastbrook Flats neighborhoods. Proposed connections to the City's established trail network on the property's west side to Scott Park, and in the far northeast corner of the property also align with Southeast District Plan goals for enhancing walkability and connectivity. Staff is recommending a condition that trail connections to the City's park and trail networks are provided as shown in the concept plan. The trail connection on the property's far west side must be built to the northern property line. The trail connection between Lots 23 and 24 must be made all the way to the existing trail on City property. Staff does have some concerns related to the potential for speeding, due to the proposed block lengths shown in the attached concept plan. It appears that several proposed blocks in the concept plan are greater than the City's maximum block length recommendation of 600' for local streets. Additionally, the distance between the proposed north -south street and Buckingham Lane (to the east of the subject property) is less than the recommended 600' block length for arterial streets. Staff is recommending a condition that the applicant work with staff to implement traffic calming measures that staff deems necessary during the plat review stage of the property's development. NEXT STEPS: Upon recommendation from the Planning and Zoning Commission, a public hearing will be scheduled for consideration of the application by the City Council. Pending approval by the City Council, the applicant will be required to submit applications for preliminary and final plats to subdivide the land into lots that follow the proposed zoning boundaries. STAFF RECOMMENDATION: Staff recommends approval of REZ19-13, a rezoning from Interim Development — Single - Family Residential (ID -RS) to Low Density Multi -Family Residential (RM -12) for approximately 10.64 acres, Low Density Single -Family Residential (RS -5) for approximately 22.51 acres, and Neighborhood Public (P-1) for approximately 2.14 acres with the following conditions (Conditions 1-3 are carried over from REZ 19-09): 1. The developer satisfies the Comprehensive Plan's Annexation Policy, as stated in Resolution 18-211. VA 2. The dedication of 17 feet of additional public right-of-way to along American Legion Road, to be dedicated to the City within seven days of execution of the Conditional Zoning Agreement for REZ19-09. 3. Conveyance of a temporary construction easement along the north side of American Legion Road within seven days of execution of the Conditional Zoning Agreement for REZ19-09. 4. No building permit shall be issued for any development on the subject property until the City Council approves a final plat resubdividing the subject property to conform to the zoning boundaries established by the rezoning ordinance. 5. Any development on the subject property shall generally conform to the attached concept plan, dated 02/26/2020, which will include the extension of Eastbrook Street to the future north -south street, and the development of single-family, townhouse, and stacked -flat multi -family housing as shown in said concept plan. 6. Trail connections to the City's park and trail networks are provided as shown in the attached concept plan. The trail connection on the property's far west side must be built to the northern property line. The trail connection between Lots 23 and 24 must be made all the way to the existing trail on City property. The developer shall be responsible for installing these trails at such time as described in a subdivider's agreement to be executed at the time any portion of this land is subdivided, and in accordance with the specifications for such improvements as to be set forth therein. 7. That a permanent drainage easement from the American Legion Road improvement project be dedicated to the City in a form of agreement acceptable to the City Attorney at the time of platting at a location to be determined by Public Works staff. 8. At platting, traffic calming measures, such as traffic circles, narrower lane widths, etc., must be incorporated to the satisfaction of City staff to address concerns related to speeding. ATTACHMENTS: 1. Aerial Map 2. Zoning Exhibit 3. Applicants Statement 4. Concept Plan from 02/26/2020 Approved by: Danielle Sitzman, AICP Department of Neighborhood and Development Services UtzbUKIF' I IUN - KLLUNIN(i F'AKULL 41 (IU -K5 I U H-1) A PORTION OF THE NORTHWEST QUARTER OF SECTION 18, TOWNSHIP 79 NORTH, RANGE 5 WEST, OF THE FIFTH PRINCIPAL MERIDIAN, JOHNSON COUNTY, IOWA, DESCRIBED AS FOLLOWS: Commencing at the West Quarter Corner of Section 18, Township 79 North, Range 5 West, of the Fifth Principal Meridian, Johnson County, Iowa; Thence S89°26'40"E, along the South Line of the Northwest Quarter of said Section 18, a distance of 461.91 feet, to the Southeast Corner of Eastbrook Flats Addition, in accordance with the Plat thereof Recorded in Plat Book 58 at Page 20 of the Records of the Johnson County Recorder's Office, and the Point of Beginning; Thence N00°33'49"E, along the East Line of said Eastbrook Flats Addition, 299.19 feet; Thence Northeasterly, 138.82 feet, along an arc of a 150.00 foot radius curve, concave Southeasterly, whose 133.92 foot chord bears N64°02'03"E; Thence S89°27'12"E, 145.99 feet; Thence S00°32'48"W, 359.01 feet, to a Point on the South Line of the Northwest Quarter of said Section 18; Thence N89°26'40"W, along said South Line, 265.91 feet, to the Point of Beginning. Said Rezoning Parcel #1 contains 2.14 Acres, and is subject to easements and restrictions of record. RS8 RM12 \\ RS5 RM12 Pi UTTL E% P1 e� w RS5 G ° suix Ea.nnv RS5 cxnuviev P1 RS5 g ING PARCEL P1 DESCRIPTION - REZONING PARCEL #2 (ID -RS TO RM -12) A PORTION OF THE NORTHWEST QUARTER OF SECTION 18, TOWNSHIP 79 NORTH, RANGE 5 WEST, OF THE FIFTH PRINCIPAL MERIDIAN, JOHNSON COUNTY, IOWA, DESCRIBED AS FOLLOWS: �\v Commencing at the West Quarter Corner of Section 18, Township 79 North, <\"� Range 5 West, of the Fifth Principal Meridian, Johnson County, Iowa; Thence v S89°26'40"E, along the South Line of the Northwest Quarter of said Section 18, a distance of 461.91 feet, to the Southeast Corner of Eastbrook Flats O Addition, in accordance with the Plat thereof Recorded in Plat Book 58 at O Page 20 of the Records of the Johnson County Recorder's Office; Thence N00°33'49"E, along the East Line of said Eastbrook Flats Addition, 299.19 feet, to the Point of Beginning; Thence continuing N00°33'49"E, along said East Line, 210.61 feet, to the Northeast Corner of said Eastbrook Flats .� Addition, in accordance with the Plat thereof Recorded in Plat Book 58 at POINT OF Addition, and a Point on the South Line of Parcel 1 of "Ralston Creek South N N00°33'49"E, along the East Line of said Eastbrook Flats Addition, 509.80 N feet, to the Northeast Corner thereof, and a Point on the South Line of Parcel 1 Property Acquisition", in accordance with the Plat thereof Recorded in Plat o' D PARCEL #2 Book 19, at Page 84 of the Records of the Johnson County Recorder's Office; 40 N o � D C r Thence S89°26'59"E, along said South Line, 373.32 feet, to the Southeast 20 OF THE RECORDS OF rn w 0) Corner thereof; Thence N01°31'04"W, along the East Line of said Parcel 1, ac� _ D� -� �' o 0 �' cn � m RECORDER'S OFFICE distance of 230.90 feet; Thence S72°19'56"E, 481.11 feet; Thence = o z �rn POINT S00°48'17"E, 239.99 feet; Thence S89°27'12"E, 165.05 feet; Thence N OF 0 Z Z S00°48'17"E, 359.23 feet, to a Point on the South Line of the Northwest BEGINNING rn = v)�cnor m w Quarter of said Section 18; Thence N89°26'40"W, along said South Line, M 70 0 PARCEL 738.21 feet; Thence N00°32'48"E, 359.01 feet; Thence N89°27'12"W, 145.9970 I� rn # 1 #1 a O feet; Thence Southwesterly, 138.82 feet, along an arc of a 150.00 foot radius Southeasterly, 133.92 foot bears S64°02'03"W, 1 C C7 n� = curve, concave whose chord D o o N to the Point of Beginning. Said Rezoning Parcel #2 contains 10.64 Acres, and70 < D �_ is subject to easements and restrictions of record. rn rn � r- m� z m DESCRIPTION -REZONING PARCEL #3 ( ID -RS TO RS -5) N � m o� ���� A PORTION OF THE NORTHWEST QUARTER OF SECTION 18, a o CO TOWNSHIP 79 NORTH, RANGE 5 WEST, OF THE FIFTH PRINCIPAL ti z l�lrJ MERIDIAN, JOHNSON COUNTY, IOWA, DESCRIBED AS FOLLOWS: rnti� O C/3 Commencing at the West Quarter Corner of Section 18, Township 79 North, 9) o Range 5 West, of the Fifth Principal Meridian, Johnson County, Iowa; Thence o S89°26'40"E, along the South Line of the Northwest Quarter of said Section 18, a distance of 461.91 feet, to the Southeast Corner of Eastbrook Flats .� Addition, in accordance with the Plat thereof Recorded in Plat Book 58 at POINT OF Page 20 of the Records of the Johnson County Recorder's Office; Thence N N00°33'49"E, along the East Line of said Eastbrook Flats Addition, 509.80 N feet, to the Northeast Corner thereof, and a Point on the South Line of Parcel 1 REZONING of "Ralston Creek South Property Acquisition", in accordance with the Plat thereof Recorded in Plat Book 19, at Page 84 of the Records of the Johnson County Recorder's Office; Thence S89°26'59"E, along said South Line, 373.32 feet, to the Southeast Corner thereof; Thence N01 °31'04"W, along the East Line of said Parcel 1, a distance of 230.90 feet, to the Point of Beginning; Thence continuing N01 °31'04"W, along said East Line, 525.20 feet; Thence N20°10'51"E, along said East Line, 209.78 feet; Thence N50°29'32"E, along said East Line, 690.91 feet, to the Northeast Corner thereof; Thence N89°45'05"E, 177.85 feet, to a Point on the West Line of Windsor West - Part Three, in accordance with the Plat thereof Recorded in Plat Book 58, at Page 235 of the Records of the Johnson County Recorder's Office; Thence S00°50'20"E, along said West Line, and the West Line of Windsor West - Part One, in accordance with the Plat thereof Recorded in Plat Book 50 at Page 266 of the Records of the Johnson County Recorder's Office, 1910.78 feet, to the Southwest Corner of said Windsor West - Part One, and a Point on the South Line of the Northwest Quarter of said Section 18; Thence N89°26'40"W, along said South Line, 165.48 feet; Thence N00°48'17"W, 359.23 feet; Thence N89°27'12"W, 165.05 feet; Thence N00°48'17"W, 239.99 feet; Thence N72°19'56"W, 481.11 feet, to the Point of Beginning. Said Rezoning Parcel #3 contains 22.51 Acres, and is subject to easements and restrictions of record. PARCEL I rNALSUGH CHREEGK SOU7H pV�OPERNTY ACOUNSMOO N IN ACCORDANCE WITH THE PLAT THEREOF RECORDED IN PLAT �,OOK 19 AT PAGE 84 OF THE RECORDS OF THE JOHN601 COUNTY RECORDER"S OFFICE E,A87 o G300 K 6 o ai FLATS t 1 w POINT OF „D0OMOD m ZW;u0 =OZm�� KU'=�mp N p z BEGINNING o 0 REZONING 0) ai O z PARCEL #2 IN PLAT ;300K 55 AT PAGE E,A87 o G300 K 6 o ai FLATS Qv o DO DZ „D0OMOD m ZW;u0 =OZm�� KU'=�mp N p z W 1 fl co IN ACCORDANCE WITH THE / z o PLAT THEREOF RECORDED IN PLAT ;300K 55 AT PAGE C r z C7 O 20 OF THE RECORDS OF X w 0) THE JOHNSON COUNTY _ D� -� �' rn � �-0 r cn � m RECORDER'S OFFICE 't O POINT �0) 0 N OF 0 Z Z BEGINNING w m v)�cnor m w REZONING M W � PARCEL FL- L- I� A ,�Dj # 1 #1 a O ° Z o Z S89"26'59"E 373.32'(M) 373.47'(R) 0=53°01'30" R=150.00' L=138.82' T=74.83' C=133.92' CB=S64°02'03"W N 64°02'03"E 145.99' N89'27'12"W S89°27'12"E 145.99' 00 REZONING o rn PARCEL #1co ID -RS TO P-1 00 2.14 AC Lr) M r7 O O Z 1 POINT OF BEGINNING REZONING PARCEL li#3 PARC EL I RALSTON MEEK SOUTH [PaOCEN ry QCOUMTJON 0� Oq' �h M9 1\14 - �j] V �1\4 LI V Ll SECUPOQ _ LI 1�09_5 N 89'45' 05"E ,177.85'(M) 177.66'(R) I 1 II I I I I II I II 1 1\ I _r \ I II \ I I \ I PA ±E ` I I II I I I I ,I I ' 0 10 25 50 75 100 GRAPHIC SCALE IN FEET,'' V=100' HIE 1\4 MW 1w � connnn SC�C���O�] IJ o-LlJ-3 o i Ui O i i LF'a pAF=r 'rH`D C C N ACCORDANCE WITH THE PLAT T EREOF RECORDED IN PLAT 600 58 AT PAGE 235 OF THE RECORD, OF THE JOHNSON COUNTY RECORDER", OFFICE I I 0 0 i III I � I I I - REZONING PARCEL #3ID-RS TO RS -5 22.51 AC ! --- a I Ii I II �I II I MVV 1\4- My 1\4 SEC UDHo -7g-5 5jX09 56 E 7 t 1 V N O Cr O O 4 O 0 REZONING PARCEL #2 ID -RS TO RM -12 10.64 AC 0 I ------------ SE, 1\//4 - HVV 1\4 I SECUPON OO N 092_7g-11 I I S89'27'12"E 165.05' 16'_ N89°27'12"W rn Z C4 O Cn 0 N 0 W J WEST QUARTER CORNER 02) OF -- -- SECTION 18-T79N-R5W n n EMIL N LEMON IND A D OF THE FIFTH P.M. G�1�V� Lrl] L�1 Lrll L�--,1 n S89'26'40"E 1 265.91' - - 738.21' SOUTH LINE OF THE NORTHWEST QUARTER 1 �- 461.91' - I I � I I I I I I I I I 01 � I I 71 --- O 70 v ------- I I I �W I l ii W/7 N ACCORDANCE WITH THE PLAT THEREOF RECORDED IN PL 6OOrC 50 AT PAGE '2(,(, OF THE RECORD, OF THE JOHNSON COUNTY RECORDER", OFFICE I \ 1\ 1 \ \ 1 `- 11 1 � I o I I ' I i I I � ---------------------� ------------------ 65.48' I _ ��7 ��7 1169.60 - - - - - - N89°26'40"W - - - - �D� V ELr11CLr11ES7 -----------------�D� -MWER ----- CHU o CH OF o - ------ --- --- - --- - G3CODDC�]�OQ�- O O o Q N AGGORDAN� D �A� �E� O ED IN PLAT W LI LI �� M A N N EVA E S �� �� 3 130OrC 30 AT PAGE 280 OF THE RECORDS OF THE JOHNSON IN ACCORDANCE WITH THE PLAT THEREOF RECORDED IN PLAT IN ACCORDANCE WITH THE PLAT THEREOF REG N PLAT �OGK 43 AT PA E 160 OF GOOK' AT PA&E 174 OF THE RECORDS OF THE JOHNSON IN AGCORDANGE WITH THE PLAT THEREOF RECORDED IN PLAT p100K 51 AT COUNTY RECORDER'S OFFICE THE RECORDS OF THE JOHNSON aJNTY RECORDER'S OFFICE COUNTY RECORDER', OFFICE I I PAGE 34G OF THE RECORD, OF THE JOHNSON COUNTY RECORDER'S OFFICE x - - - -I i n 9 Lo CJ1 n M o LF D LC O r L F Q fl IF 0 0 o 0 `E Qv fn C7 DO DZ „D0OMOD m ZW;u0 =OZm�� KU'=�mp N p z W 1 fl co 0 z o D C r z C7 O mO�Z cnco-�0 TI �o X `3 r, 3 (D c1 � _ D� -� �' rn � �-0 r cn � m � z p n <_ m a $' D Z C -1 -n m = m cn w m v)�cnor m r rn z � N Z A ,�Dj Ill M c '� 0 r, w* W C7 n� = C D o N Cn < 2E 2 m �_ ��� r- m� z m _ z m ZJ m OO N CO�� ���� Cn o CO r1 N O . C/� C/3 C/3 C/3 C/� E This property is surrounded on three sides by City corporate limits, and is within the growth area of Iowa City. American Legion Road is currently being designed to be upgraded to City standards, including a wide sidewalk/trail and utility infrastructure. The Iowa City School District recently established Hoover Elementary School approximately 1/2 mile to the east. These factors make the property ripe for development. The zoning of surrounding properties include Low Density Multi -Family (RM -12) to the west, Public property to the north (Scott Park), Low Density Single Family (RS -5) to the east, and High Density Single Family (RS -12) to the south. We have strove to be consistent with the surrounding zoning, by transitioning from multi -family to single family from west to east. Another factor in the rezoning proposal is meeting the City requirement that 10% of units be designated for affordable housing. Thank you for your consideration. ----- - 1111 11( � ( ' III / ' -- '? 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AL CITY OF IOWA CITY =�c�- COUNCIL ACTION REPORT April 21, 2020 Resolution authorizing the filing of an application with the Iowa Department of Transportation for FY2021 Iowa Department of Transportation State Transit Assistance and Federal Transit Administration Funding. Prepared By: Darian Nagle-Gamm, Director of Transportation Services Reviewed By: Geoff Fruin, City Manager Fiscal Impact: Permits application for State and Federal transit operating and capital funds which may require matching funds. Recommendations: Staff: Approval Commission: N/A Attachments: Resolution Executive Summary: The consolidated transit funding application is an annual application filed with Iowa Department of Transportation (DOT) listing capital and operating expenses that we wish to see funded by DOT and the Federal Transit Administration (FTA). The projects contained in the application have been programmed by Iowa City Transit for FTA Section 5307, 5310 and/or 5339 funds in FY2021. The projects will be included in the FY2021 Iowa DOT consolidated transit funding application that the Metropolitan Planning Organization of Johnson County (MPOJC) is completing and in the FY2021-2024 MPOJC Transportation Improvement Program (TIP). Iowa City Transit may not seek funding for all of the projects; however, each project needs to be listed in order to be eligible for funding. The total amount of funds being requested in the funding application is approximately $25.4 million dollars. Background /Analysis: Due to our annual funding application for and potential receipt of federal grant funds, we are required to hold a public hearing so that the public has an opportunity to comment on the funding request. Notice was provided and the public hearing was set for April 21st, 2020 at the March 24th, 2020 City Council meeting. The specific allocations for the funds being applied for are detailed below: • State Transit Assistance Program: approximately $ 516,813— These are formula funds for operations awarded to the Metropolitan Planning Organization (MPO) and then distributed between Iowa City Transit, Coralville Transit and the University of Iowa — Cambus. • Federal operating assistance for transit (5307): $ 1,900,000— These are funds awarded from FTA to provide operational assistance to the transit agency. • From federal funds for transit in non -urbanized areas and/or for transit serving primarily elderly persons and persons with disabilities (5310): $ 233,124— These funds are awarded to Iowa City and committed to para -transit services that are contracted through a 28E Agreement with Johnson County. • State-wide federal capital assistance for transit (5339): $22,719,190 — These funds include all of the capital projects that Iowa City Transit wishes to see funded. This sum includes replacement and relocation of the transit facility, electric bus replacements and bus shelters. A local match of 15% - 20% is commonly required for the award of these funds. ATTACHMENTS: Description Resolution q. Prepared by: Brad Neumann, Assoc. Transp. Planner, 410 E. Washington St., Iowa City, IA 52240 (319) 356-5235 Resolution number 20-98 Resolution authorizing the filing of an application with the Iowa Department of Transportation for FY2O21 Iowa Department of Transportation State Transit Assistance and Federal Transit Administration Funding Whereas, the City of Iowa City, Iowa has undertaken to provide its residents with a public transportation system; and Whereas, the Iowa Department of Transportation (IDOT) offers financial assistance to local governmental units for their public transportation systems, including operations and project costs; and Whereas, the State Transit Assistance Program are funds allocated based upon a formula for operations awarded to the MPO and then distributed between Iowa City Transit, Coralville Transit and the University of Iowa — Cambus; and Whereas, Federal operating assistance for transit (5307) are funds awarded from FTA to provide operational assistance to the transit agency; and Whereas, federal funds for transit in non -urbanized areas and/or for transit serving primarily elderly persons and persons with disabilities (5310) are awarded to Iowa City and committed to para -transit services that are contracted through a 28E Agreement with Johnson County; and Whereas, state-wide federal capital assistance for transit (5339) are funds for all the capital projects that Iowa City Transit wishes to see funded, including replacement and relocation of the transit facility, buses, and bus shelters. A local match of 15% - 20% is commonly required for the award of these funds; and Whereas, the acceptance of federal transit assistance involves an agreement to comply with certain labor protection provisions; and Whereas, the City of Iowa City has sufficient non-federal funds to provide required local match for capital projects and at time of delivery, will have the funds to operate and maintain vehicles and equipment purchased under this project. Now, therefore, be it resolved by the City Council of the City of Iowa City, Iowa, that: 1. The Metropolitan Planning Organization of Johnson County and the City Manager are hereby authorized, on behalf of the City of Iowa City, to file a Consolidated Transit Funding Application for financial assistance with the Iowa Department of Transportation as noted below and to execute related contract(s) with the Iowa Department of Transportation, in a form approved by the City Attorney. a. From the State Transit Assistance Program: 3.41438696% (approximately $516,813) of Formula Funds, which the City shall request be advanced monthly as allowed by law, to improve transit system cash flow; and Resolution No. 20-98 Page 2 b. From federal operating assistance for transit: $1,900,000; previous year's funding goes in to TIP; and c. From federal funds for transit in non -urbanized areas and/or for transit serving primarily elderly persons and person with disabilities: $233,124; project estimate; and d. From state-wide federal capital assistance for transit: $22,719,190; project estimate. Passed and approved this 21st day of April, 20'20 Attest: City Clerk ' *JZ 6 It was moved by trims adopted, and upon roll call there were: and seconded by Nays : fZed by City Attorney's Office (Eric Goers - 4/14/2020) Weiner Absent: Bergus Mims Salih Taylor Teague Thomas Weiner the Resolution be Ma r Attest: City Clerk ' *JZ 6 It was moved by trims adopted, and upon roll call there were: and seconded by Nays : fZed by City Attorney's Office (Eric Goers - 4/14/2020) Weiner Absent: Bergus Mims Salih Taylor Teague Thomas Weiner the Resolution be Item Number: 10. AL CITY OF IOWA CITY =�c�- COUNCIL ACTION REPORT April 21, 2020 Resolution approving project manual and estimate of cost for the construction of the 2020 Water Pavement Patching Project, establishing amount of bid security to accompany each bid, directing City Clerk to post notice to bidders, and fixing time and place for receipt of bids. Prepared By: Marri VanDyke, Civil Engineer Reviewed By: Jason Havel, City Engineer Ron Knoche, Public Works Director Geoff Fruin, City Manager Fiscal Impact: $150,000 available in the Water Divisions Operating Budget, Account # 73730130 Recommendations: Staff: Approval Commission: N/A Attachments: Resolution Executive Summary: This project includes pavement repairs associated with water main breaks on various streets throughout Iowa City. Pavements that need repair include Portland Cement Concrete (PCC), PCC with Hot Mix Asphalt (HMA) overlay, and brick paving with composite PCC and HMA base. Some locations will also require the removal and replacement of driveway, sidewalk, and/or curb and gutter. Background /Analysis: Each year there are, on average, approximately 60 water main breaks within the City, and street and or sidewalk pavement typically needs to be removed and replaced in order to repair the water main. With limited resources and the emergency nature of the pavement repairs, the City is combining the pavement repairs at multiple main break sites into a single project to more efficiently address pavement damage resulting from water main breaks. Project Timeline: Hold Public Hearing —April 21, 2020 Bid Letting — May 12, 2020 Award Date — May 19, 2020 Construction — Summer/Fall 2020 ATTACHMENTS: Description Resolution Prepared by: Marti VanDyke, Public Works, 410 E. Washington St., Iowa City, IA 52240, (319)356-5044 Resolution No. 20-99 Resolution approving project manual and estimate of cost for the construction of the 2020 Water Pavement Patching Project, establishing amount of bid security to accompany each bid, directing City Clerk to post notice to bidders, and fixing time and place for receipt of bids. Whereas, notice of public hearing on the project manual and estimate of cost for the above-named project was published as required by law, and the hearing thereon held; and Whereas, the City Engineer or designee intends to post notice of the project on the website owned and maintained by the City of Iowa City; and Whereas, funds for this project are available in the Water Divisions Operating Budget, account # 73730130. Now, therefore, be it resolved by the City Council of the City of Iowa City, Iowa that 1. The project manual and estimate of cost for the above-named project are hereby approved. 2. The amount of bid security to accompany each bid for the construction of the above-named project shall be in the amount of 10% (ten percent) of bid payable to Treasurer, City of Iowa City, Iowa. 3. The City Clerk is hereby authorized and directed to post notice as required in Section 26.3, not less than 13 days and not more than 45 days before the date of the bid letting, which may be satisfied by timely posting notice on the Construction Update Network, operated by the Master Builder of Iowa, and the Iowa League of Cities website. 4. Sealed bids for the above-named project are to be received by the City of Iowa City, Iowa, at the Office of the City Clerk, at the City Hall, before 3:00 p.m. on the 121 day of May, 2020. At that time, the bids will be opened by the City Engineer or his designee, and thereupon referred to the City Council of the City of Iowa City, Iowa, for action upon said bids at its next regular meeting, in Iowa City, Iowa, at 7:00 p.m. on the 191 day of May, 2020, or at a special meeting called for that purpose. The City Clerk's Office is closed to the public due to the health and safety concerns from COVID-19. Sealed bids may still be delivered in person on Mondays through Fridays 8:00 am to 5:00 pm. The person delivering the sealed bid may come to the front lobby of City Hall, 410 E. Washington St., Iowa City, Iowa, and upon arrival telephone the City Clerk at 319/356-5043 Passed and approved this 21st day of April 2020. Attest:I Lo 04 - City Jerk L ov d by City Attorney's Office - 4/14/2020 Resolution No. 20-99 Page 2 It was moved by Thoma and seconded by rums the Resolution be adopted, and upon roll call there were: Ayes Nays: Absent: Bergus Mims Salih Taylor Teague Thomas Weiner Item Number: 11. 1 CITY OF IOWA CITY ��.:. -dry in � at COUNCIL ACTION REPORT April 21, 2020 Resolution approving project manual and estimate of cost for the construction of the Lower Muscatine Area Storm Sewer Improvements Project, establishing amount of bid security to accompany each bid, directing City Clerk to post notice to bidders, and fixing time and place for receipt of bids. Prepared By: Ben Clark, Sr. Civil Engineer Reviewed By: Jason Havel, City Engineer Ron Knoche, Public Works Director Geoff Fruin, City Manager Fiscal Impact: $1,210,000 available in the Lower Muscatine Area Storm Sewer Improvements account #M3632 and the Annual Pavement Rehabilitation account #S3824. Recommendations: Staff: Approval Commission: N/A Attachments: Location Map Resolution Executive Summary: This project involves the installation of storm sewer on Deforest Avenue and Ginter Avenue. Street pavement on Deforest Avenue, from Sycamore Street to Franklin Street, will also be reconstructed in accordance with the recommendations of the City's Pavement Management Plan, which is currently being finalized. Background /Analysis: Most streets in the neighborhood around Lower Muscatine Road have minimal storm sewer/intakes. During heavier rain events, storm water running down the side streets can create localized flooding issues on Lower Muscatine Road and Sycamore Street. This project aims to improve drainage by collecting and conveying storm water from the side streets prior to it collecting on Lower Muscatine Road and Sycamore Street. In addition, during the design phase of the storm sewer project, the consultant tasked with developing a pavement management plan for the City released their initial recommendations for street reconstruction areas. Those recommendations included the segment of Deforest Avenue from Sycamore Street to Franklin Street. Due to the overlapping project areas, street pavement reconstruction for the project was expanded to include this area. FAA CTa:l►vil=11 il,kI&V Description Location Map Resolution � / 2 «V D } 2AVE \ mgw0 � k�E� $CT L OD 2 G KKK r < AE 1-,e -Z � 2 n 14 \ r L� 5PRU 2 / $L �D #vo ) ImO LN PROJECT LOCATIONS 2 HIGHLAND pE Won m� ® AVE ■ 2 K§DEFO > 2 AVE § » K■ � r LD AVE D KKK r < AE 1-,e -Z � 2 n 14 \ r L� 5PRU 2 / $L �D #vo ) ImO LN PROJECT LOCATIONS fl. Prepared by: Ben Clark, Public Works, 410 E. Washington St., Iowa City, IA 52240,(319)356-5436 Resolution No. 20-100 Resolution approving project manual and estimate of cost for the construction of the Lower Muscatine Area Storm Sewer Improvements Project, establishing amount of bid security to accompany each bid, directing City Clerk to post notice to bidders, and fixing time and place for receipt of bids. Whereas, notice of public hearing on the project manual and estimate of cost for the above-named project was published as required by law, and the hearing thereon held; and Whereas, the City Engineer or designee intends to post notice of the project on the website owned and maintained by the City of Iowa City; and Whereas, funds for this project are available in the Lower Muscatine Area Storm Sewer Improvements account #M3632 and the Annual Pavement Rehabilitation account #S3824. Now, therefore, be it resolved by the City Council of the City of Iowa City, Iowa that: 1. The project manual and estimate of cost for the above-named project are hereby approved. 2. The amount of bid security to accompany each bid for the construction of the above-named project shall be in the amount of 10% (ten percent) of bid payable to Treasurer, City of Iowa City, Iowa. 3. The City Clerk is hereby authorized and directed to post notice as required in Section 26.3, not less than 13 days and not more than 45 days before the date of the bid letting, which may be satisfied by timely posting notice on the Construction Update Network, operated by the Master Builder of Iowa, and the Iowa League of Cities website. 4. Sealed bids for the above-named project are to be received by the City of Iowa City, Iowa, at the Office of the City Clerk, at the City Hall, before 3:00 p.m. on the 12th day of May, 2020. At that time, the bids will be opened by the City Engineer or his designee, and thereupon referred to the City Council of the City of Iowa City, Iowa, for action upon said bids at its next regular meeting, in Iowa City, Iowa, at 7:00 p.m. on the 191 day of May, 2020, or at a special meeting called for that purpose. The City Clerk's Office is closed to the public due to the health and safety concerns from COVID-19. Sealed bids may still be delivered in person on Mondays through Fridays 8:00 am to 5:00 pm. The person delivering the sealed bid may come to the front lobby of City Hall, 410 E. Washington St., Iowa City, Iowa, and upon arrival telephone the City Clerk at 319/356-5043. Passed and approved this 21 c t: day of April 2020. Resolution No. 20-100 Page 2 Ma ov d by Attest: City Clerk City Attorney's Office44/14/2020 It was moved by Thomas and seconded by Taylor the Resolution be adopted, and upon roll call there were: Ayes: r4' x Nays: Absent: Bergus Mims Salih Taylor Teague Thomas Weiner Item Number: 12. AL CITY OF IOWA CITY =�c�- COUNCIL ACTION REPORT April 21, 2020 Resolution authorizing conveyance of a single-family home located at 1232 Sandusky Drive. Prepared By: Erika Kubly, Neighborhood Services Coordinator Reviewed By: Tracy Hightshoe, Neighborhood & Development Services Director Fiscal Impact: City funds were budgeted at $35,000 for rehabilitation expenses, and up to $25,000 in federal HOME funds will be used for buyer down payment assistance. There will be no impact on the general funds for ongoing operational expenses. Recommendations: Staff: Approval Attachments: photos resolution Executive Summary: On April 7, 2020, City Council will set a public hearing for April 21, 2020 to consider a resolution authorizing the conveyance of 1232 Sandusky Drive as part of the South District Program. This will be the second home sold under the program. Background /Analysis: Through the South District Program, the City acquired a duplex at 1232-1234 Sandusky drive in 2019 for $124,000 ($62,000 per unit) and converted the duplex into a 2 -unit condominium to sell to eligible home buyers. The property had recently sustained substantial fire damage and was vacant at the time of purchase. City funds were used to repair and rehabilitate the the unit including new siding, a new garage door, a fenced yard, updated electrical, and a complete renovation of the interior. Sustainability improvements were also incorporated into the project including installation of solar panels, added insulation, Energy Star rated appliances, new windows and doors, long life -cycle flooring, tree planting and landscaping. The renovated home appraised at $144,000. The sales price is $115,000, which is the amount the City invested in the home including acquisition costs, rehabilitation expenses, and carrying costs (utilities, loan interest, taxes, etc.). The goal of the program is to sell the home to an income eligible buyer who is a current resident of the neighborhood. The financing structure of the purchase is similar to those sold by Habitat or past public housing units sold to eligible home buyers. Of the $115,000, there will be a conditional mortgage of $35,000 on the property that will be forgiven by $3,500 each year for 10 years. No repayment is necessary unless the owner sells the property within that time frame. I n addition, the City will provide HOME down payment assistance which is estimated at $20,000 based on preliminary underwriting. The HOME down payment assistance is also a conditional mortgage and will be forgiven after 10 years. If the owner sells the home within 10 years, the net proceeds of the sale are shared between the City and the buyer, up to the HOME amount provided. The buyer will finance the remaining amount, estimated at $60,000, through a local lender which will allow for monthly housing payments well below HOME Fair Market Rent (currently $902) for a two-bedroom unit. The home features two bathrooms and one bedroom on the main floor with additional living space in the basement. The buyer has been a resident of Taylor Drive for over six years. They have completed a homeowner education course and counseling through Horizons. In addition, the home buyer will sign a deed restriction to maintain the home as an owner -occupied unit. ATTACHMENTS: Description photos Resolution Authorizing Conveyance 1232 Sandusky Drive Rehab Photos South District Partnership w 0, . Prepared by: Susan Dulek, Ass't. City Attorney, 410 E. Washington St., Iowa City, IA 52240 (319)356-5030 RESOLUTION NO. 20-101 Resolution authorizing conveyance of a single-family home located at 1232 Sandusky Drive. Whereas, the South District Home Investment Partnership Program is an effort by the City to encourage home ownership and reinvestment in designated neighborhoods; and Whereas, the City purchases residential properties, rehabilitates them, and then sells them to income -eligible buyers; and Whereas, the City purchased a duplex at 1232-1234 Sandusky Drive, rehabilitated it, and converted it to a 2 -unit condominium; and Whereas, the City has received an offer to purchase 1232 Sandusky Drive for the principal sum of $115,000; and Whereas, this sale would.provide affordable owner -occupied housing; and Whereas, on April 7, 2020, the City Council adopted a Resolution proposing to convey its interest in 1232 Sandusky Drive, authorizing public notice of the proposed conveyance, and setting the date and time for the public hearing; and Whereas, following the public hearing on the proposed conveyance, the City Council finds that the conveyance is in the public interest. Now, therefore, be it resolved by the City Council of the City of Iowa City, Iowa, that: 1. Upon the direction of the City Attorney, the Mayor and the City Clerk are authorized to execute a warranty deed conveying the City's interest in 1232 Sandusky Drive, Iowa City, Iowa for the sum of $115,000. 2. The City Attorney is hereby authorized to deliver said warranty deed and to carry out any actions necessary to consummate the conveyance required by law. It was moved by Salih and seconded by trims the Resolution be adopted, and upon roll call there were: Resolution No. 20-101 Page 2 AYES: NAYS: x x x x x x x ABSENT: Bergus Mims Salih Taylor Teague Thomas Weiner Passed and approved this 21st day of April 2020. A ltby, City Attorney's Office (Sue Dulek — 4/15/2020) MAYUR ATTEST: CITY CLERK Item Number: 15. AL CITY OF IOWA CITY =�c�- COUNCIL ACTION REPORT April 21, 2020 Resolution directing the advertisement for sale of $12,145,000* (subject to adjustment per terms of offering) General Obligation Bonds, series 2020, and approving electronic bidding procedures and distribution of preliminary official statement. Prepared By: Dennis Bockenstedt, Finance Director Reviewed By: Ashley Monroe, Assistant City Manager Fiscal Impact: Adopted as part of the FY2020 Revised Budget and 2020-2024 Capital Improvement Program Recommendations: Staff: Approval Attachments: Preliminary Official Statement Resolution Executive Summary: This is a resolution to advertise for the sale, to approve the electronic bidding procedures, and to approve the distribution of the preliminary official statement for the 2020 General Obligation Bonds. This resolution establishes the sale time and date and bidding procedures for the 2020 General Obligation Bonds. It also accepts and approves the Preliminary Official Statement or sale document for the bonds. Background /Analysis: The City issues bonds every spring to fund the current year's capital improvement projects listed in the Five -Year Capital Improvement Program. The City intends to take bids for $12,145,000 in general obligation bonds on May 5 and then close on the bond sale on June 1. The FY2020 Revised Budget and FY2021 Adopted Budget have been approved with the necessary property tax levies needed for repayment of the 2020 General Obligation Bonds. The City's long-term planning has incorporated the 2020 proposed bond issue and repayment schedule. City Council approval of the resolution directing the advertisement for sale, approving electronic bidding procedures, and distribution of preliminary official statement is the next required action to facilitate the sale and issuance of the 2020 General Obligation Bonds. ATTACHMENTS: Description Preliminary Official Statement Resolution New Issue Investment Rating: Date of Sale: Tuesday, May 5, 2020 Moody's Investors Service ... Between 10:30 and 11:00 A.M., C.D.T. (Closed Speer Auction) (Rating Requested) Official Statement Assuming compliance with certain covenants, in the opinion ofAhlers & Cooney, P.C., Bond Counsel, under present law and assuming continued compliance with the requirements of the Internal Revenue Code of 1986, as amended (the "Code'), interest on the Bonds is excludable from gross income for federal income tax purposes. Interest on the Bonds is not an item of tax preference for federal alternative minimum tax purposes. Interest on the Bonds is not exempt from present Iowa incomes taxes. The Bonds will NOT be designated as "qualified tax-exempt obligations ". See "TAX MATTERS" herein for a more detailed discussion. Dated Date of Delivery $12,145,000* CITY OF IOWA CITY Johnson County, Iowa General Obligation Bonds, Series 2020 Book -Entry Due Serially June 1, 2021- 2030 The $12,145,000* General Obligation Bonds, Series 2020 (the "Bonds") are being issued by the City of Iowa City, Johnson County, Iowa (the "City"). Interest is payable semiannually on June 1 and December 1 of each year, commencing December 1, 2020. Interest is calculated based on a 360 -day year of twelve 30 -day months. The Bonds will be issued using a book -entry system. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The ownership of one fully registered Bond for each maturity will be registered in the name of Cede & Co., as nominee for DTC and no physical delivery of Bonds will be made to purchasers. The Bonds will mature on June 1 in the following years and amounts. AMOUNTS*, MATURITIES, INTEREST RATES, PRICES OR YIELDS AND CUSIP NUMBERS Principal Due Interest Price or CUSIP Principal Due Interest Price or CUSIP Amount` June 1 Rate Yield Number(1) Amount' June 1 Rate Yield Number(1) $3,600,000......... 2021 % % $790,000........... 2026 % % 1,800,000......... 2022 % % 790,000........... 2027 % % 1,200,000......... 2023 % % 790,000........... 2028 % % 805,000......... 2024 % % 790,000........... 2029 % % 790,000......... 2025 % % 790,000........... 2030 % % Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above OPTIONAL REDEMPTION Bonds due June 1, 2021 - 2026, inclusive, are not subject to optional redemption. Bonds due June 1, 2027 - 2030, inclusive, are callable in whole or in part on any date on or after June 1, 2026, at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the City and within any maturity by lot. See "OPTIONAL REDEMPTION" herein. PURPOSE, LEGALITY AND SECURITY The proceeds of the Bonds are expected to be used to: (i) finance the cost of various essential and general corporate purpose capital improvements, and (ii) pay the costs of issuing the Bonds. See "THE PROJECT" herein. In the opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, the Bonds will constitute valid and legally binding obligations of the City payable both as to principal and interest from ad valorem taxes levied against all taxable property within the corporate limits of the City without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors' rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion. This Official Statement is dated April _, 2020, and has been prepared under the authority of the City. An electronic copy of this Official Statement is available from the www.speerfinancial.com web site under "Official Statement Sales Calendar". Additional copies may be obtained from Mr. Dennis Bockenstedt, Finance Director, City of Iowa City, 410 E. Washington Street, Iowa City, Iowa, 52240, or from the Registered Municipal Advisors to the City. Speer Financial, Inc. WDEPENDENT MUNICIPAL ADVISORS • ESTABLISHED 1954 ONE NORTH LASALLE STREET, SUITE 4100 • CHICAGO, H OIS 60602 Teleph (312) 3463700; Paas®ile: (312) 3468833 531 COM ERCU L STREET, SUITE 608 • WATERLOO, IOWA 50701 TelePM (319)291-2077; Peccimile:(319) 291-8628 wives.—fi^mxia __ *Subject to principal adjustment in accordance with the Oficial Terms of Offering. (I) CUSIP numbers appearing in this Official Statement have been provided by the CUSIP Service Bureau, which is managed on behalf of the American Bankers Association by S&P Capital IQ, apart of McGraw Hill Financial Inc. The City is not responsible for the selection of CUSIP numbers and makes no representation as to their correctness on the Bonds or as set forth on the cover of this Official Statement. For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, this document, as the same may be supplemented or corrected by the City from time to time (collectively, the "Official Statement"), may be treated as an Official Statement with respect to the Bonds described herein that is deemed near final as of the date hereof (or the date of any such supplement or correction) by the City. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Bonds, together with any other information required by law or deemed appropriate by the City, shall constitute a "Final Official Statement" of the City with respect to the Bonds, as that term is defined in Rule 15c2-12. Any such addendum or addenda shall, on and after the date thereof, be fully incorporated herein and made a part hereof by reference. Alternatively, such final terms of the Bonds and other information may be included in a separate document entitled "Final Official Statement" rather than through supplementing the Official Statement by an addendum or addenda. No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any representations with respect to the Bonds other than as contained in the Official Statement or the Final Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the City. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the City and, while believed to be reliable, is not guaranteed as to completeness. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY SINCE THE RESPECTIVE DATES THEREOF. References herein to laws, rules, regulations, ordinances, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Official Statement or the Final Official Statement, they will be furnished on request. This Official Statement does not constitute an offer to sell, or solicitation of an offer to buy, any securities to any person in any jurisdiction where such offer or solicitation of such offer would be unlawful. TABLE OF CONTENTS Page BONDISSUE SUMMARY....................................................................................................................................................1 SECURITY AND SOURCE OF PAYMENT........................................................................................................................ 2 BONDHOLDERS' RISKS..................................................................................................................................................... 3 COVID-19 Pandemic.......................................................................................................................................................... 3 SecondaryMarket............................................................................................................................................................... 3 RatingsLoss........................................................................................................................................................................4 Forward -Looking Statements..............................................................................................................................................4 TaxMatters and Loss of Tax Exemption............................................................................................................................ 4 DTC -Beneficial Owners..................................................................................................................................................... 4 ContinuingDisclosure........................................................................................................................................................ 5 Cybersecurity...................................................................................................................................................................... 5 Suitabilityof Investment..................................................................................................................................................... 5 Bankruptcyand Insolvency................................................................................................................................................. 6 Legislation........................................................................................................................................................................... 6 TaxLevy Procedures.......................................................................................................................................................... 7 Federal Funds Orders and State Funds Legislation............................................................................................................. 7 OtherFactors....................................................................................................................................................................... 7 THECITY.............................................................................................................................................................................. 7 CityOrganization and Services........................................................................................................................................... 7 CommunityLife.................................................................................................................................................................. 8 Education............................................................................................................................................................................ 8 Transportation..................................................................................................................................................................... 8 SOCIOECONOMICINFORMATION.................................................................................................................................. 8 Population........................................................................................................................................................................... 9 Employment........................................................................................................................................................................ 9 Housing.............................................................................................................................................................................10 Income............................................................................................................................................................................... 11 RetailSales........................................................................................................................................................................12 THEPROJECT.....................................................................................................................................................................12 DEFAULTRECORD...........................................................................................................................................................12 SHORT-TERM BORROWING AND ADDITIONAL GENERAL OBLIGATION DEBT...............................................12 DEBT INFORMATION.......................................................................................................................................................13 DEBTLIMIT.................................................................................................................................................................... 13 DIRECTDEBT................................................................................................................................................................. 13 GENERAL OBLIGATION DEBT(1)(2).......................................................................................................................... 14 STATEMENT OF BONDED INDEBTEDNESS(])(2)................................................................................................... 15 OTHEROBLIGATIONS................................................................................................................................................. 15 PROPERTY ASSESSMENT AND TAX INFORMATION................................................................................................ 15 PropertyTax Assessment.................................................................................................................................................. 15 BUILDINGPERMITS..................................................................................................................................................... 16 PropertyTax Collection.................................................................................................................................................... 16 LevyLimits....................................................................................................................................................................... 18 TaxLevy Procedures........................................................................................................................................................ 19 UtilityProperty Tax Replacement.................................................................................................................................... 19 TaxIncrement Financing..................................................................................................................................................19 Legislation......................................................................................................................................................................... 20 FINANCIALINFORMATION............................................................................................................................................ 21 FinancialReports.............................................................................................................................................................. 21 No Consent or Updated Information Requested of the Auditor........................................................................................ 21 Summary Financial Information....................................................................................................................................... 21 EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS ................................... 25 PENSIONS....................................................................................................................................................................... 25 OTHER POST -EMPLOYMENT BENEFITS (OPEB).................................................................................................... 26 (i) REGISTRATION, TRANSFER AND EXCHANGE........................................................................................................... 28 TAXMATTERS................................................................................................................................................................... 29 TaxExemption.................................................................................................................................................................. 29 NOT Qualified Tax Exemption Obligations..................................................................................................................... 29 Discountand Premium Bonds........................................................................................................................................... 29 OtherTax Advice.............................................................................................................................................................. 30 Audits................................................................................................................................................................................ 30 Reportingand Withholding............................................................................................................................................... 30 TaxLegislation................................................................................................................................................................. 30 TheOpinion...................................................................................................................................................................... 31 Enforcement...................................................................................................................................................................... 31 CONTINUINGDISCLOSURE............................................................................................................................................ 31 OPTIONALREDEMPTION................................................................................................................................................ 32 LITIGATION........................................................................................................................................................................ 32 LEGALMATTERS.............................................................................................................................................................. 32 OFFICIAL STATEMENT AUTHORIZATION..................................................................................................................33 INVESTMENT RATING..................................................................................................................................................... 33 UNDERWRITING............................................................................................................................................................... 33 MUNICIPALADVISOR...................................................................................................................................................... 34 CERTIFICATION................................................................................................................................................................ 34 APPENDIX A -FISCAL YEAR 2019 COMPREHENSIVE ANNUAL FINANCIAL REPORT APPENDIX B -DESCRIBING BOOK -ENTRY -ONLY ISSUANCE APPENDIX C -DRAFT FORM OF LEGAL OPINION APPENDIX D -DRAFT FORM OF CONTINUING DISCLOSURE CERTIFICATE OFFICIAL BID FORM OFFICIAL TERMS OF OFFERING Exhibit A — Example Issue Price Certificate City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 BOND ISSUE SUMMARY This Bond Issue Summary is expressly qualified by the entire Official Statement, including the Official Terms of Offering and the Official Bid Form, which are provided for the convenience of potential investors and should be reviewed in their entirety by potential investors. Issuer: City of Iowa City, Johnson County, Iowa. Issue: $12,145,000* General Obligation Bonds, Series 2020. Dated Date: Date of delivery (expected to be on or about June 1, 2020). Interest Due: Each June 1 and December 1, commencing December 1, 2020. Principal Due: Serially each June 1, commencing June 1, 2021 through 2030, as detailed on the cover page of this Official Statement. Optional Redemption: Bonds maturing on or after June 1, 2027, are callable at the option of the City on any date on or after June 1, 2026, at a price of par plus accrued interest. See "OPTIONAL REDEMPTION" herein. Authorization: The Bonds are being issued pursuant to authority established in Code of Iowa, 2019 as amended, Chapter 384 (the "Act"), and all laws amendatory thereof and supplementary thereto, and in conformity with a resolution (the "Resolution" or the "Bond Resolution") of the City duly passed and approved. Security: The Bonds are valid and legally binding obligations of the City payable both as to principal and interest from ad valorem taxes levied against all taxable property therein without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors' rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion. Investment Rating: An investment rating for the Bonds has been requested from Moody's Investors Service, New York, New York. See "INVESTMENT RATING" herein. Purpose: The proceeds of the Bonds will be used to: (i) finance the cost of various essential and general corporate purpose capital improvements, and (ii) pay the costs of issuing the Bonds. See "THE PROJECT" herein. Tax Matters: Ahlers & Cooney, P.C., Des Moines, Iowa, will provide an opinion as to the tax exemption of the Bonds as discussed under "TAX MATTERS" in this Official Statement. Interest on the Bonds is not exempt from present State of Iowa income taxes. See APPENDIX C for a draft form of legal opinion for the Bonds. Bond Registrar/Paying Agent: Delivery: Book -Entry Form: Denomination: Municipal Advisor: *Subject to change. U.S. Bank, N.A., St. Paul, Minnesota (the "Registrar"). The Bonds are expected to be delivered on or about June 1, 2020. The Bonds will be registered in the name of Cede & Co. as nominee for The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository of the Bonds. See APPENDIX B herein. $5,000 or integral multiples thereof. Speer Financial, Inc., Waterloo, Iowa and Chicago, Illinois. City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Laura Bergus Pauline Taylor Geoff Fruin City Manager Dennis Bockenstedt Finance Director CITY OF IOWA CITY JOHNSON COUNTY, IOWA Bruce Teague Mayor Council Members Susan Mims John Thomas Officials SECURITY AND SOURCE OF PAYMENT Mazahir Salih Janice Weiner Kellie Fruehling City Clerk Eleanor M. Dilkes, Esq. City Attorney Pursuant to the Resolution and the Act, the Bonds and the interest thereon are general obligations of the City, and all taxable property within the corporate boundaries of the City is subject to the levy of taxes to pay the principal of and interest on the Bonds without constitutional or statutory limitation as to rate or amount. Section 76.2 of the Act provides that when an Iowa political subdivision issues general obligation bonds, the governing authority of such political subdivision shall, by resolution adopted before issuing the bonds, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds. A certified copy of this resolution shall be filed with the County Auditor in which the City is located, giving rise to a duty of the County Auditor to annually enter this levy for collection from the taxable property within the boundaries of the City, until funds are realized to pay the bonds in full. For the purpose of providing for the levy and collection of a direct annual tax sufficient to pay the principal of and interest on the Bonds as the same become due, the Resolution provides for the levy of a tax sufficient for that purpose on all the taxable property in the City in each of the years while the Bonds are outstanding. The City shall file a certified copy of the Resolution with the County Auditor, pursuant to which the County Auditor is instructed to enter for collection and assess the tax authorized. When annually entering such taxes for collection, the County Auditor shall include the same as a part of the tax levy for Debt Service Fund purposes of the City and when collected, the proceeds of the taxes shall be converted into the Debt Service Fund of the City and set aside therein as a special account to be used solely and only for the payment of the principal of and interest on the Bonds and for no other purpose whatsoever. 2 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Nothing in the Resolution authorizing the Bonds prohibits or limits the ability of the City to use legally available moneys other than the proceeds of the general ad valorem property taxes levied as described in the preceding paragraph to pay all or any portion of the principal of or interest on the Bonds. If and to the extent such other legally available moneys are used to pay the principal of or interest on the Bonds, the City may, but shall not be required to, (a) reduce the amount of taxes levied for such purpose, as described in the preceding paragraph; or (b) use proceeds of taxes levied, as described in the preceding paragraph, to reimburse the fund or account from which such other legally available moneys are withdrawn for the amount withdrawn from such fund or account to pay the principal of or interest on the Bonds. BONDHOLDERS' RISKS COVID-19 Pandemic The outbreak of COVID-19, a respiratory illness caused by a new strain of coronavirus has affected the globe, including the State of Iowa and the City. Efforts to contain the virus from spreading have shuttered businesses in a way that may negatively impact economies. Several of the cases in Iowa have been located within Johnson County and the City has actively taken efforts to stop spread of the virus including closure of City Hall, the landfill and other public facilities to the public. On March 18, 2020 the Mayor declared a Civil Emergency in Iowa City due to the dangers presented by COVID- 19. Also on March 18, 2020 the University of Iowa, located within the City, announced it will delay and extend virtual instruction for a period of time and will close most residence halls beginning Thursday, March 19 and cancel its commencement ceremonies. On March 17, 2020, Iowa Governor Kim Reynolds issued a State of Public Health Disaster Emergency. The Plan takes significant steps to require social distancing and limit community spread of the virus by implementing temporary measures including moving restaurants to drive-through, carry -out, and delivery only and closures of certain entities such as bars and recreational facilities. The proclamation also allows state agencies additional flexibility in responding to the unprecedented COVID-19 situation, and supports the critical work of public health. The City cannot predict whether continued spread of the disease will materially impact its financial condition or ability to provide essential services. The Bonds are general obligations of the City secured by an unlimited ad valorem property tax as described more fully in the "PAYMENT OF AND SECURITY FOR THE BONDS" herein. However, an additional State Public Health Emergency Declaration issued on March 20, 2020 temporarily suspends the provisions that require the imposition of penalty and interest for delay in property tax payments and directs that no such penalty or interest may be imposed for the duration of the proclamation and any future extension of the suspension. As of the date of the Preliminary Official Statement, the proclamation had been extended until April 30, 2020, at 11:59 p.m. It is impossible to predict whether the proclamation or an extension thereof would have a material effect on the City's ability to collect property taxes necessary for the payment of principal and interest on the Bonds. Secondary Market There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history of economic prospects connected with a particular issue, secondary marketing practices in connection with a particular bond or note issue are suspended or terminated. Additionally, prices of bond or note issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price of the Bonds. EACH PROSPECTIVE PURCHASER IS RESPONSIBLE FOR ASSESSING THE MERITS AND RISKS OF AN INVESTMENT IN THE BONDS AND MUST BE ABLE TO BEAR THE ECONOMIC RISK OF SUCH INVESTMENT. THE SECONDARY MARKET FOR THE BONDS, IF ANY, COULD BE LIMITED. City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Rating Loss Moody's Investors Service, Inc. ("Moody's") has assigned a rating of " " to the Bonds. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that the rating will continue for any given period of time, or that such rating will not be revised, suspended or withdrawn, if, in the judgment of Moody's, circumstances so warrant. A revision, suspension or withdrawal of a rating may have an adverse effect on the market price of the Bonds. Various factors, including additional regulation of rating agencies could materially alter the methodology, rating levels, and types of ratings available, for example, and these changes, if ever, could materially affect the market value of the Bonds. Forward -Looking Statements This Official Statement contains statements relating to future results that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. When used in this Official Statement, the words "estimate," "forecast," "intend," "expect" and similar expressions identify forward-looking statements. Any forward-looking statement is subject to uncertainty. Accordingly, such statements are subject to risks that could cause actual results to differ, possibly materially, from those contemplated in such forward-looking statements. Inevitably, some assumptions used to develop forward-looking statements will not be realized or unanticipated events and circumstances may occur. Therefore, investors should be aware that there are likely to be differences between forward-looking statements and the actual results. These differences could be material and could impact the availability of funds of the City to pay debt service when due on the Bonds. Tax Matters and Loss of Tax Exemption As discussed under the heading "TAX MATTERS" herein, the interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of delivery of the Bonds, as a result of acts or omissions of the City in violation of its covenants in the Resolution. Should such an event of taxability occur, the Bonds would not be subject to a special prepayment and would remain outstanding until maturity or until prepaid under the prepayment provisions contained in the Bonds, and there is no provision for an adjustment of the interest rate on the Bonds. It is possible that legislation will be proposed or introduced that could result in changes in the way that tax exemption is calculated, or whether interest on certain securities are exempt from taxation at all. Prospective purchasers should consult with their own tax advisors regarding any pending or proposed federal income tax legislation. The likelihood of any pending or future legislation being enacted or whether the currently proposed terms of any pending legislation will be altered or removed during the legislative process cannot be reliably predicted. It is also possible that actions of the City after the closing of the Bonds will alter the tax status of the Bonds, and, in the extreme, remove the tax exempt status from the Bonds. In that instance, the Bonds are not subject to mandatory prepayment, and the interest rate on the Bonds does not increase or otherwise reset. A determination of taxability on the Bonds, after closing of the Bonds, could materially adversely affect the value and marketability of the Bonds. DTC -Beneficial Owners Beneficial Owners of the Bonds may experience some delay in the receipt of distributions of principal of and interest on the Bonds since such distributions will be forwarded by the Paying Agent to DTC and DTC will credit such distributions to the accounts of the Participants which will thereafter credit them to the accounts of the Beneficial Owner either directly or indirectly through indirect Participants. Neither the City nor the Paying Agent will have any responsibility or obligation to assure that any such notice or payment is forwarded by DTC to any Participants or by any Participant to any Beneficial Owner. 4 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 In addition, since transactions in the Bonds can be effected only through DTC Participants, indirect participants and certain banks, the ability of a Beneficial Owner to pledge the Bonds to persons or entities that do not participate in the DTC system, or otherwise to take actions in respect of such Bonds, may be limited due to lack of a physical certificate. Beneficial Owners will be permitted to exercise the rights of registered Owners only indirectly through DTC and the Participants. See APPENDIX B — Describing Book -Entry Only Issuance. Continuing Disclosure A failure by the City to comply with continuing disclosure obligations (see "CONTINUING DISCLOSURE" herein) will not constitute an event of default on the Bonds. Any such failure must be disclosed in accordance with Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission (the "Commission") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and may adversely affect the transferability and liquidity of the Bonds and their market price. The City will covenant in a Continuing Disclosure Certificate for the benefit of the Owners and Beneficial Owners of the Bonds to provide annually certain financial information and operating data relating to the City (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events. The Annual Report is to be filed by the City no later than two hundred ten (210) days after the close of each fiscal year, commencing with the fiscal year ending June 30, 2020, with the Municipal Securities Rulemaking Board, at its internet repository named "Electronic Municipal Market Access" ("EMMA"). The notices of events, if any, are also to be filed with EMMA. See "APPENDIX D — FORM OF CONTINUING DISCLOSURE CERTIFICATE." The specific nature of the information to be contained in the Annual Report or the notices of events, and the manner in which such materials are to be filed, are summarized in "APPENDIX D — FORM OF CONTINUING DISCLOSURE CERTIFICATE." These covenants have been made in order to assist the Underwriter in complying with SEC Rule 15c2 -12(b)(5) (the "Rule"). Cybersecurity The City, like many other public and private entities, relies on a large and complex technology environment to conduct its operations. As such, it may face multiple cybersecurity threats including but not limited to, hacking, viruses, malware and other attacks on computer or other sensitive digital systems and networks. There can be no assurances that any security and operational control measures implemented by the City will be completely successful to guard against and prevent cyber threats and attacks. Failure to properly maintain functionality, control, security, and integrity of the City's information systems could impact business operations and/or digital networks and systems and the costs of remedying any such damage could be significant. Along with significant liability claims or regulatory penalties, any security breach could have a material adverse impact on the City's operations and financial condition. The City recently experienced a cyber intrusion where an outgoing vendor ACH payment was redirected to a third - party hacker by the use of social engineering. However, the City does not believe any protected personal information was accessed during the breach, and the City has implemented additional security procedures to guard against future incidents. Loss from the breach is not expected to exceed $10,000 plus expenses to investigate the matter. The City has a $1,000,000 Cyber -Liability Policy. The City cannot predict whether this policy will be sufficient in the event of a cyberattack. However, the Bonds are secured by an unlimited ad valorem property tax as described herein. Suitability of Investment The interest rate borne by the Bonds is intended to compensate the investor for assuming the risk of investing in the Bonds. Each prospective investor should carefully examine this Official Statement and its own financial condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Bonds are an appropriate investment for such investor. City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Bankruptcy and Insolvency The rights and remedies provided in the Resolution may be limited by and are subject to the provisions of federal bankruptcy laws, to other laws or equitable principles that may affect the enforcement of creditor's rights, to the exercise of judicial discretion in appropriate cases and to limitations in legal remedies against exercise of judicial discretion in appropriate cases and to limitations on legal remedies against municipal corporations in the State of Iowa. The various opinions of counsel to be delivered with respect to the Bonds and the Resolution, including the opinion of Bond Counsel, will be similarly qualified. If the City were to file a petition under chapter nine of the federal bankruptcy code, the owners of the Bonds could be prohibited from taking any steps to enforce their rights under the Resolution. In the event the City fails to comply with its covenants under the Resolution or fails to make payments on the Bonds, there can be no assurance of the availability of remedies adequate to protect the interests of the holders of the Bonds. Under sections 76.16 and 76.16A of the Act, a city, county, or other political subdivision may become a debtor under chapter nine of the federal bankruptcy code, if it is rendered insolvent, as defined in 11 U.S.C. § 101(32)(c), as a result of a debt involuntarily incurred. As used therein, "debt" means an obligation to pay money, other than pursuant to a valid and binding collective bargaining agreement or previously authorized bond issue, as to which the governing body of the city, county, or other political subdivision has made a specific finding set forth in a duly adopted resolution of each of the following: (1) that all or a portion of such obligation will not be paid from available insurance proceeds and must be paid from an increase in general tax levy; (2) that such increase in the general tax levy will result in a severe, adverse impact on the ability of the city, county, or political subdivision to exercise the powers granted to it under applicable law, including without limitation providing necessary services and promoting economic development; (3) that as a result of such obligation, the city, county, or other political subdivision is unable to pay its debts as they become due; and (4) that the debt is not an obligation to pay money to a city, county, entity organized pursuant to chapter 28E of the Code of Iowa, or other political subdivision. Legislation From time to time, there are proposals pending in Congress and in the Iowa Legislature that could, if enacted, alter or amend one or more of the matters described herein in certain respects or would adversely affect the market value of the Bonds, or otherwise prevent holders of the Bonds from realizing the full benefit of the tax exemption of interest on the Bonds. Further such proposals may impact the marketability or market value of the Bonds simply by being proposed. It cannot be predicted whether or in what forms any of such proposals, either pending or that may be introduced, may be enacted and there can be no assurance that such proposals will not apply to the Bonds. In addition regulatory actions are from time to time announced or proposed, and litigation threatened or commenced, which if implemented or concluded in a particular manner, could adversely affect the market value, marketability or tax status of the Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Bonds would be impacted thereby. During the 2019 legislative session, the Iowa General Assembly passed Senate File 634 which was later signed into law by the Governor. This bill modifies the process for hearing and approval of the total maximum property tax dollars under certain levies in the City budget, including levies for the General Fund, the Emergency Fund, Trust and Agency Funds for pensions, insurance, transit, civic centers, certain bridges, sanitary disposal, and emergency management. The bill also includes a provision that requires the affirmative vote of 2/3 of the City Council when the maximum property tax dollars under these levies exceed an amount determined under a prescribed formula. The bill does not change the process for hearing and approval of the Debt Service Levy pledged for repayment of the Bonds. It is too early to evaluate the effect this legislation will have on the overall financial position of the City or its ability to fund essential services. 0 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Tax Levy Procedures The Bonds are general obligations of the City, payable from and secured by a continuing ad valorem tax levied against all of the taxable property valuation within the City. See "PROPERTY ASSESSMENT AND TAX INFORMATION" herein for more details. As part of the budgetary process each fiscal year, the City will have an obligation to request a debt service levy to be applied against all of the taxable property within the City. A failure on the part of the City to make a timely levy request or a levy request by the City that is inaccurate or is insufficient to make full payments of the debt service of the Bonds for a particular fiscal year may cause Bondholders to experience delay in the receipt of distributions of principal of and/or interest on the Bonds. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the City and certain other public officials to perform the terms of the Resolution for the Bonds) may have to be enforced from year to year. Federal Funds Orders and State Funds Legislation Various federal executive orders, and Iowa Code Chapter 825 (collectively "ICE Enforcement Initiatives"), impose requirements intended to ensure compliance with the federal immigration detainment processes. The ICE Enforcement Initiatives impose various penalties for non-compliance, including the loss of state and/or federal funding under certain circumstances. The loss of state and/or federal funds in any significant amount could negatively impact the City's overall financial position and may affect its rating. Other Factors An investment in the Bonds involves an element of risk. The foregoing is intended only as a summary of certain risk factors attendant to an investment in the Bonds. In order for potential investors to identify risk factors and make an informed investment decision, potential investors should become thoroughly familiar with this entire Official Statement and the Appendices hereto. THE CITY The City is located in East Central Iowa and was incorporated in 1853 under the laws of the State of Iowa (the "State") and operates under the Council/Manager form of government. The 2010 Census reported population at 67,862, which is 9% increase over the 2000 Census population of 62,220. The City is the largest City in Johnson County (the "County") and serves as the County seat. City Organization and Services The City is governed by a seven member Council and each member serves a four-year term. Elections are held every two years, allowing for continuation in office of at least three members in each biennial election. The Council members are elected at large, but three members are nominated from specific districts and the remaining four members are nominated at large. The Mayor is elected by the Council from its own members for a two-year term. The City Manager, City Attorney and City Clerk are appointed by the City Council. The City Manager is the chief administrative officer for the City. Currently the City employs approximately 565 full-time, 64 permanent part-time and 319 temporary employees, including a police force of 84 sworn personnel and a fire department of 64 fire fighters. The City considers its employee relations to be good. The City currently maintains labor agreements with the American Federation of State, County, and Municipal Employees ("AFSCME") which contract expires June 30, 2021; with Police ("PLRO") which contract expires June 30, 2025; and Fire fighters ("IAFF") which contract expires June 30, 2024. 7 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 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. Community Life The City was the first North American City to be awarded the City of Literature in North America by UNESCO in 2008, which has a goal of fostering cultural diversity. The City hosts a variety of cultural events, such as the Iowa Writers' Workshop, whose graduates include John Irving, Flannery O'Connor, T.C. Boyle; the International Writing Program; the Non -Fiction Writing Program; the Iowa Playwrights' Workshop; and the Iowa Summer Writing Festival. A variety of events sponsored by the City include the Summer of the Arts program, a festival of the arts, a nationally renowned jazz festival, open-air summer movies and free concerts in the pedestrian mall. The City Book Festival, the Iowa Biennial Exhibition, and The Landlocked Film Festival are events hosted by the City. The Hancher Auditorium hosts nationally touring theater, dance and musical shows, and has commissioned more than 100 works of music, theater and dance during the last 20 years. Education Public education to the City is provided by the Iowa City Community School District (the "District"), with certified enrollment of 14,572 for Fiscal Year 2019-20. There are approximately 1,518 full and part-time employees of the District. The District owns and operates several pre-school sites, twenty-one elementary schools, three middle schools, three senior high schools, and one alternative school for ninth through twelfth graders. Education is also provided through the Clear Creek — Amana Community School District, with certified enrollment of 2,489 for Fiscal Year 2019-20. Four year college programs and vocational training are available throughout the area including the University of Iowa and Kirkwood Community College. Transportation The City is approximately 115 miles east of the City of Des Moines, 20 miles southeast of the City of Cedar Rapids and 55 miles northwest of the City of Davenport. The Eastern Iowa Airport is located 20 miles from downtown Iowa City and is served by a number of national and regional air carriers. A general aviation airport, Iowa City Municipal Airport is located on the south side of the City. The Iowa Interstate Railway, and Cedar Rapids and Iowa City Railway provide the City's rail service. Bus transportation is provided by Iowa City Transit, Coralville Transit, and the University of Iowa. There is also a system of paved bicycle paths in the City along the Iowa River and some main roads in the City have paved bicycle shoulders. SOCIOECONOMIC INFORMATION The following demographic information is for the City. Additional comparisons are made with Johnson County (the "County") and the State of Iowa (the "State"). City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Population The following table reflects population trends for the City, the County and the State. Population Comparison(]) Note: (1) Source: U.S. Bureau of the Census Employment Following are lists of large employers located in the City. Major City Employers(]) Approximate Name The Percent The Percent The Percent Year city Change County Change State Change 1970 ..................... 46,850 n/a 72,127 n/a 2,824,376 n/a 1980 ..................... 50,508 7.81% 81,717 13.30% 2,913,808 3.17% 1990 ..................... 59,735 18.27% 96,119 17.62% 2,776,755 (4.70%) 2000 ..................... 62,220 4.16% 111,006 15.49% 2,926,324 5.39% 2010 ..................... 67,862 9.07% 130,882 17.91% 3,046,355 4.10% Note: (1) Source: U.S. Bureau of the Census Employment Following are lists of large employers located in the City. Major City Employers(]) Approximate Name Product/Service Employment University of Iowa...................................................................... Education/Health Services................................................................ 30,012 Veterans Administration Medical Center .................................... Health Services................................................................................ 2,115 Iowa City Community School District ......................................... Education......................................................................................... 1,518 MercyHospital........................................................................... Health Services................................................................................ 1,299 ACT, Inc.................................................................................... Education Programs......................................................................... 1,079 HyVee....................................................................................... Grocery ............................................................................................. 1,033 Cityof Iowa City........................................................................ Government...................................................................................... 962 Proctor and Gamble.................................................................. Health and Beauty Products............................................................. 959 NCS Pearson............................................................................ Educational Testing Services............................................................ 775 JohnsonCounty........................................................................ Government...................................................................................... 554 Note: (1) Source: the City. The following tables show employment by industry and by occupation for the City, the County and the State as reported by the U.S. Census Bureau 2014 - 2018 American Community Survey 5 -year estimated values. Employment By Industry(]) Classification Agriculture, forestry, fishing and hunting, and mining ........................... Construction........................................................................................ Manufacturing...................................................................................... Wholesaletrade.................................................................................. Retailtrade.......................................................................................... Transportation and warehousing, and utilities ...................................... Information.......................................................................................... Finance and insurance, and real estate and rental and leasing............ Professional, scientific, and management, and administrative and waste management services............................................................. Educational services, and health care and social assistance ............... Arts, entertainment, and recreation, and accommodation and foodservices..................................................................................... Other services, except public administration ........................................ Public administration........................................................................... Total.................................................................................................. The Citv Number Percent 139 0.3% 1,397 3.4% 2,558 6.2% 364 0.9% 4,428 10.8% 867 2.1% 678 1.6% 1,582 3.8% The County Number Percent 853 1.0% 3,692 4.5% 6,419 7.8% 1,200 1.5% 8,920 10.8% 2,362 2.9% 1,019 1.2% 4,479 5.4% 2,965 7.2% 6,238 18,763 45.6% 34,800 5,387 13.1% 8,340 1,412 3.4% 2,678 643 1.6% 1,627 41,183 100.0% 82,627 7.5% 42.1% The State Number Percent 55,931 3.5% 99,730 6.2% 244,422 15.1% 44,363 2.7% 193,329 12.0% 83,327 5.2% 23,298 1.4% 121,852 7.5% 114,447 7.1% 396,587 24.5% 10.1% 124,491 7.7% 3.2% 65,574 4.1% 2.0% 48.648 3.0% 100.0% 1,615,999 100.0% Note: (1) Source: U. S. Bureau of the Census, American Community Survey 5 -Year Estimates from 2014 - 2018. 0 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Employment By Occupation(]) Note: (1) Source: U. S. Bureau of the Census, American Community Survey 5 -Year Estimates from 2014 - 2018 The following shows the annual average unemployment rates for the City, the County, the State and the United States Annual Average Unemployment Rates(1)(2) Calendar The City The County The State Classification Number Percent Number Percent Number Percent Management, business, science, and arts occupations ....................... 19,779 48.0% 39,074 47.3% 589,859 36.3% Service occupations............................................................................ 8,325 20.2% 14,989 18.1% 267,948 16.6% Sales and office occupations............................................................... 7,409 18.0% 15,754 19.1% 334,410 20.7% Natural resources, construction, and maintenance occupations........... 1,703 4.1% 4,533 5.5% 148,324 9.2% Production, transportation, and material moving occupations .............. 3.967 9.6% 8,277 10.0% 278.458 17.2% Total.................................................................................................. 41,183 100.0% 82,627 100.0% 1,615,999 100.0% Note: (1) Source: U. S. Bureau of the Census, American Community Survey 5 -Year Estimates from 2014 - 2018 The following shows the annual average unemployment rates for the City, the County, the State and the United States Annual Average Unemployment Rates(1)(2) Calendar Percent The The The United Year 12.9% Citv County State States 2011 ........................ 15.8% 3.7% 4.0% 5.5% 8.9% 2012 ........................ 100.0% 3.5% 3.7% 5.0% 8.1% 2013 ........................ 3.3% 3.4% 4.7% 7.4% 2014 ........................ 3.0% 3.1% 4.2% 6.2% 2015 ........................ 2.6% 2.7% 3.8% 5.3% 2016 ........................ 2.4% 2.6% 3.6% 4.9% 2017 ........................ 2.5% 2.5% 3.1% 4.4% 2018 ........................ 1.9% 1.9% 2.5% 3.9% 2019 ........................ 2.0% 2.0% 2.9% 3.7% 2020(3) .................... 2.2% 2.4% 3.6% 3.6% Notes: (1) Source: Iowa Workforce Development and U.S. Bureau of Labor Statistics. (2) Not seasonally adjusted. (3) Preliminary rates for the month of January 2020. Housing The U.S. Census Bureau 5 -year estimated values reported that the median value of the City's owner -occupied homes was $203,500. This compares to $216,900 for the County and $152,000 for the State. The following table represents the five year average market value of specified owner -occupied units for the City, the County and the State at the time of the 2014 - 2018 American Community Survey. Value Less than $50,000 ............................... $50,000 to $99,999 .............................. $100,000 to $149,999 .......................... $150,000 to $199,999 .......................... $200,000 to $299,999 .......................... $300,000 to $499,999 .......................... $500,000 to $999,999 .......................... $1,000,000 or more ............................. Total.................................................. Home Values(]) The Ci Number Percent 824 5.6% 761 5.2% 1,889 12.9% 3,630 24.8% 4,652 31.8% 2,304 15.8% 489 3.3% 61 0.4% 14,610 100.0% The Count Number Percent 2,858 8.2% 1,653 4.8% 4,194 12.1% 6,721 19.4% 9,852 28.4% 6,963 20.1% 2,122 6.1% 353 1.0% 34,716 100.0% The State Number Percent 77,434 8.6% 180,511 20.0% 186,423 20.6% 152,388 16.9% 171,170 18.9% 107,672 11.9% 23,665 2.6% 4,488 0.5% 903,751 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2014 - 2018. 10 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Mortgage Status Housing units with a mortgage ............. Housing units without a mortgage........ Total.................................................. Mortgage Status(]) The City Number Percent 9,731 66.6% 4,879 33.4% 14,610 100.0% The Count Number Percent 23,306 67.1 11,410 32.9% 34,716 100.0% The State Number Percent 543,108 -60.1% 360.643 39.9% 903,751 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2014 - 2018. Income The U.S. Census Bureau 5 -year estimated values reported that the City had a median family income of $82,519. This compares to $92,284 for the County and $76,068 for the State. The following table represents the distribution of family incomes for the City, the County and the State at the time of the 2014 - 2018 American Community Survey. Income Less than $10,000 ............................... $10,000 to $14,999 .............................. $15,000 to $24,999 .............................. $25,000 to $34,999 .............................. $35,000 to $49,999 .............................. $50,000 to $74,999 .............................. $75,000 to $99,999 .............................. $100,000 to $149,999 .......................... $150,000 to $199,999 .......................... $200,000 or more ................................ Total.................................................. Family Income(]) The Cit Number Percent 595 4.5% 343 2.6% 1,033 7.8% 651 4.9% 1,474 11.1% 1,854 14.0% 1,949 14.7% 2,790 21.0% 1,260 9.5% 1,324 10.0% 13,273 100.0% The Coun Number Percent 1,004 3.2% 557 1.8% 1,563 4.9% 1,255 3.9% 3,199 10.1% 4,691 14.8% 5,230 16.4% 7,435 23.4% 3,180 10.0% 3,682 11.6% 31,796 100.0% The State Number Percent 21,893 2.7% 15,189 1.9% 43,777 5.5% 58,349 7.3% 93,488 11.7% 160,626 20.1% 141,089 17.6% 158,447 19.8% 55,240 6.9% 52,231 6.5% 800,329 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2014 to 2018. The U.S. Census Bureau 5 -year estimated values reported that the City had a median household income of $47,275. This compares to $61,640 for the County and $59,955 for the State. The following table represents the distribution of household incomes for the City, the County and the State at the time of the 2014 - 2018 American Community Survey. Income Less than $10,000 ................................... $10,000 to $14,999 .................................. $15,000 to $24,999 .................................. $25,000 to $34,999 .................................. $35,000 to $49,999 .................................. $50,000 to $74,999 .................................. $75,000 to $99,999 .................................. $100,000 to $149,999 .............................. $150,000 to $199,999 .............................. $200,000 or more .................................... Total...................................................... Household Income(]) The Cit Number Percent 4,361 14.5% 1,896 6.3% 3,097 10.3% 2,542 8.5% 3,743 12.5% 4,371 14.6% 3,066 10.2% 3,698 12.3% 1,545 5.2% 1,656 5.5% 29.975 100.0% The Count Number Percent 5,807 10.0% 2,496 4.3% 5,074 8.7% 4,395 7.6% 6,555 11.3% 9,369 16.1% 7,256 12.5% 9,247 15.9% 3,702 6.4% 4.262 7.3% 58,163 100.0% The State Number Percent 69,432 5.5% 54,690 4.3% 114,217 9.0% 119,692 9.4% 171,801 13.6% 244,306 19.3% 181,944 14.4% 190,059 15.0% 62,459 4.9% 59,273 4.7% 1,267,843 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2014 - 2018. 11 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Retail Sales The Department of Revenue of the State of Iowa provides retail sales figures based on sales tax reports for years ending June 30. The Department of Revenue figures provide recent data to confirm trends in retail sales activity in the City. Retail Taxable Sales(]) Fiscal Year Taxable Annual Percent Ending June 30 Sales Change + (-) 2009 ............................. $905,139,461 n/a 2010 ............................. 725,329,723 (19.87%) 2011 ............................. 741,407,021 2.22% 2012 ............................. 767,122,555 3.47% 2013 ............................. 793,201,342 3.40% 2014 ............................. 811,039,164 2.25% 2015 ............................. 838,853,686 3.43% 2016 ............................. 853,258,347 1.72% 2017 ............................. 874,928,988 2.54% 2018 ............................. 854,538,416 (2.33%) Note: (1) Source: the Iowa Department of Revenue THE PROJECT Bond proceeds will be used to: (i) finance the cost of various essential and general corporate purpose capital improvements (the "Project"); and (ii) pay the costs of issuance of the Bonds. More specifically, the Project includes the financing of the costs of: (i) opening, widening, extending, grading, and drainage of the right-of-way of streets, highways, avenues, alleys and public grounds; the construction, reconstruction, and repairing of any street and streetscape improvements, with related utility work, traffic control devices, lighting, sidewalks, and the acquisition of real estate for such purposes; (ii) the rehabilitation and improvement of parks already owned, including facilities, equipment and improvements commonly found in city parks; (iii) equipping the fire department; (iv) the acquisition, development and improvement of an Infrastructure Asset Management software program suitable for automated mapping and facilities management; and (v) improvements to and equipping of the Mercer Park Pool. DEFAULT RECORD The City has no record of default and has met its debt repayment obligations promptly. SHORT-TERM BORROWING AND ADDITIONAL GENERAL OBLIGATION DEBT The City has not issued tax anticipation warrants or revenue anticipation notes during the last five years to meet its short-term current year cash flow requirements. The City does not expect to issue any additional general obligation debt in calendar year 2020. 12 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 DEBT INFORMATION DEBT LIMIT The constitutional general obligation debt limit of a political subdivision of the state of Iowa is equal to five percent (5%) of the value of taxable property within its borders. According to and based upon the January 1, 2018 property valuations, for taxes payable in September 2019 and March 2020 the general obligation debt limit of the City for the period which began July 1, 2019 and ends June 30, 2020 is: DIRECT DEBT *Subject to change. 2018 100% Actual Valuation of Property ............................... $6,133,570,208 Constitutional Debt Limit ....................................................... $ 306,678,510 Outstanding Bonds/Notes Applicable to Debt Limit: TIF Revenue Debt................................................................. $ 14,790,000 Total G.O. Debt Subject to Debt Limit .................................... 53,370,000* OtherLoans.......................................................................... 210,784 Other Legal Indebtedness (TIF Rebates) .............................. 27,578.500 Total Applicable Debt............................................................ 95,949,284* Remaining Debt Capacity...................................................... $ 210,729,226* Summary of General Obligation and Tax Increment Debt(1)(2) (Principal Only) General Obligation Series 2012A ....................................................... $ 1,980,000 Series 2013A ....................................................... 2,560,000 Series 2014 ......................................................... 3,950,000 Series 2015 ......................................................... 4,150,000 Series 2016A ....................................................... 5,875,000 Series 2017A ....................................................... 7,040,000 Series 2018A ....................................................... 7,260,000 Series 2019 ......................................................... 8,410,000 The Bonds(3)...................................................... 12.145.000 Total General Obligation(3).............................. $53,370,000 Tax Increment Financing Revenue: Series 2012D ...................................................... $ 1,985,000 Series 2016E ....................................................... 12,805.000 Total Tax Increment ......................................... $14,790,000 Notes: (1) Source: the City. (2) After the June 1, 2020 principal payments on the outstanding debt. 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Series 2017C ...................................................... 4.665.000 $3,923,114,214 $8,700,000 Revenue Debt Payable from Net Revenues of the Municipal Sewer System: Series 2016C ...................................................... Per Capita Applicable Ratio to City Ratio to City (2010 Pop. Total Percent Amount Actual Value Taxable Value 67,862) Direct Bonded Debt(3)(4) ............................... $ 53,370,000 100.00% $ 53,370,000 0.87% 1.36% $ 786.45 TIF Revenue Debt(3)(4)................................. 14,790,000 100.00% 14,790,000 0.24% 0.38% 217.94 Overlapping Debt: Iowa City Community School District ............. $120,450,000 57.24% $ 68,945,580 1.12% 1.76% 1,015.97 Clear Creek-Amana Community School Dist. 81,155,000 0.04% 32,462 0.00% 0.00% 0.48 Kirkwood Community College(5) ................... 125,091,169 14.30% 17,888,037 0.29% 0.46% 263.59 Johnson County ............................................ 9.945.000 42.25% 4,201,763 0.07% 0.11% 61.92 Total Overlapping Bonded Debt ................... $336,641,169 $ 91,067,842 1.48% 2.32% $1,341.96 Total Direct and Overlapping Bonded Debt ................................................ $159,367,842 2.60% 4.06% $2,348.41 PerCapita Actual Value................................................................................................................................................................................ $90,382.99 PerCapita Taxable Value.............................................................................................................................................................................. $57,810.18 Notes: (1) Source: the City, Audited Financial Statements and Treasurer of the State of Iowa, Outstanding Obligations Report, debt as of June 30, 2019 EMMA for the County, School Districts and Community College. (2) As of the date of issuance for the Direct Bonded Debt and June 30, 2019 for Overlapping Debt. (3) After the June 1, 2020 principal payments on the outstanding debt. (4) Subject to change. (5) Excludes $31,830,000 in Industrial New Jobs Training Certificates, which are expected to be paid by proceeds from anticipated job credits from withholding taxes. OTHER OBLIGATIONS Revenue Debt Payable from Net Revenues of the Municipal Water System Series 2012C ...................................................... $1,590,000 Series 2016D ...................................................... 2,445,000 Series 2017C ...................................................... 4.665.000 Total(1)(2)......................................................... $8,700,000 Revenue Debt Payable from Net Revenues of the Municipal Sewer System: Series 2016C ...................................................... $1,765,000 Series 2017B ....................................................... 3.775.000 Total(1)(2)......................................................... $7,365,000 Revenue Debt Payable from Net Revenues of the Municipal Parking System: Series 2017 ......................................................... $6.846.041 Total(1)(2)(3)..................................................... $6.846.041 Notes: (1) Source: the City. (2) After the June 1, 2020 principal payments on the outstanding debt. (3) After an early redemption payment of $2,000,000 on June 1, 2020. PROPERTY ASSESSMENT AND TAX INFORMATION Property Tax Assessment In compliance with Section 441.21 of the Code of Iowa, as amended, the State Director of Revenue annually directs all county auditors to apply prescribed statutory percentages to the assessments of certain categories of real property. The final values, called Actual Valuation, are then adjusted by the County Auditor. Taxable Valuation subject to tax levy is then determined by the application of State determined rollback percentages, principally to residential property. Beginning in 1978, the State required a reduction in Actual Valuation to reduce the impact of inflation on its residents. The resulting value is defined as the Taxable Valuation. Such rollback percentages may be changed in future years. Certain historical rollback percentages for residential, multi -residential, agricultural and commercial valuations are as follows: 15 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 PERCENTAGES FOR TAXABLE VALUATION AFTER ROLLBACKS(]) Property is assessed on a calendar year basis. The assessments finalized as of January 1 of each year are applied to the following tax year. For example, the assessments finalized on January 1, 2018, are used to calculate tax liability for the tax year starting July 1, 2019 through June 30, 2020. BUILDING PERMITS New construction building permits valuation have averaged $152,066,818 over the last 5 years in the City, excluding the value of land. City Building Permits(]) (Excludes the Value of Land) Calendar Year: 2016 New Construction Multi- Ag Land Valuation: .................................................. Fiscal Year Residential Residential(2) & Buildings Commercial 2011/12 ................ 48.5299% N/A 69.0152% 100.0000% 2012/13 ................ 50.7518% N/A 57.5411% 100.0000% 2013/14 ................ 52.8166% N/A 59.9334% 100.0000% 2014/15 ................ 54.4002% N/A 43.3997% 95.0000% 2015/16 ................ 55.7335% N/A 44.7021% 90.0000% 2016/17 ................ 55.6259% 86.2500% 46.1068% 90.0000% 2017/18 ................ 56.9391% 82.5000% 47.4996% 90.0000% 2018/19 ................ 55.6209% 78.7500% 54.4480% 90.0000% 2019/20 ................ 56.9180% 75.0000% 56.1324% 90.0000% 2020/21 ................ 55.0743% 71.2500% 81.4832% 90.0000% Notes: (1) Source: the Iowa Department of Revenue. (2) New category beginning with fiscal year 2017. Property is assessed on a calendar year basis. The assessments finalized as of January 1 of each year are applied to the following tax year. For example, the assessments finalized on January 1, 2018, are used to calculate tax liability for the tax year starting July 1, 2019 through June 30, 2020. BUILDING PERMITS New construction building permits valuation have averaged $152,066,818 over the last 5 years in the City, excluding the value of land. City Building Permits(]) (Excludes the Value of Land) Calendar Year: 2016 New Construction No. of New Permits .................................... 262 Valuation: .................................................. $295,339,497 Remodeling Repair and Additions: No. of New Permits: ................................... 532 Valuation: .................................................. $ 93.087.526 Total Permits ............................................. 794 Total Valuations ......................................... $388,427,023 Notes: (1) Source: the City. (2) As of March 31, 2020. Property Tax Collection 2017 2018 2019 2020 (2) 211 151 120 26 $108,285,647 $115,872,543 $134,485,833 $13,451,855 507 467 484 83 $108,532,366 $ 76,942,267 $ 97,036,048 $ 4,924,390 718 618 604 109 $216,818,013 $192,814,810 $231,521,881 $18,376,245 Each county is required by State law to collect all tax levies within its jurisdiction and remit, before the fifteenth of each month, the amount collected through the last day of the preceding month to underlying units of government, including the City. Property tax payments are made at the office of each county treasurer in full or one-half by September 30 and March 31, pursuant to the Code of Iowa, Sections 445.36 and 445.37. Where the first half of any property tax has not been paid by October 1, such installment becomes delinquent. If the second installment is not paid, it becomes delinquent on April 1. Delinquent taxes and special assessments are subject to a penalty at the rate of one and one-half percent per month, to a maximum of eighteen percent per annum. If taxes are not paid when due, the property may be offered at the regular tax sale on the third Tuesday of June following the delinquency date. Purchasers at the tax sale must pay an amount equal to the taxes, special assessments, interest and penalties due on the property, and funds so received are applied to the payment of taxes. A property owner may redeem from the regular tax sale, but failing redemption within two years, the tax sale purchaser is entitled to a deed which in general conveys the title free and clear of all liens except future installments of taxes. 16 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 PROPERTY VALUATIONS AND TREND OF VALUATIONS ACTUAL (100%) VALUATIONS FOR THE CITY(]) For the January 1, 2019 levy year, the City's Taxable Valuation was comprised of approximately 65% residential, 23% commercial, 9% multi -residential, 2% industrial, 1% utilities and less than 1% agriculture and military exemption. PROPERTY VALUATIONS AND TREND OF VALUATIONS TAXABLE ("ROLLBACK") VALUATIONS FOR THE CITY(]) Fiscal Amount Amount Percent Preliminary Fiscal Year: 2016/17 2017/18 2018/19 2019/20 2020/21 Property Class Levy Year: 2015 2016 2017 2018 2019 Residential........................................................ $3,893,541,900 $4,011,317,530 $4,279,194,820 $4,431,104,380 $4,995,816,750 Agricultural........................................................ 3,736,510 3,443,020 2,626,150 2,539,080 1,748,000 Commercial....................................................... 856,972,664 877,491,737 964,588,039 1,000,704,323 1,104,820,749 Industrial........................................................... 79,053,598 79,474,988 74,013,639 79,346,989 80,669,700 Multi -residential ................................................. 415,208,021 420,082,751 482,118,763 502,252,347 548,053,873 Railroads........................................................... 4,096,577 3,984,932 3,549,414 3,601,348 4,488,469 Utilities without Gas and Electric(2) ................... 7,375,066 6,734,894 7,099,293 7,386,408 6,152,547 Gas and Electric Utility(2).................................. 92,987,351 94,582,279 97,050,716 109,124,421 118,583,613 Less: Military Exemption ................................... (2,727,994) (2,635,396) (2,579,836) (2,489,088) (2,435,380) Total................................................................ $5,350,243,693 $5,494,476,735 $5,907,660,998 $6,133,570,208 $6,857,898,321 Percent Change +(-) ........................................ 8.07%(3) 2.70% 7.52% 3.82% 11.81% Notes: (1) Source: Iowa Department of Management. (2) See "PROPERTY TAX INFORMATION - Utility Property Tax Replacement" herein. - Utility Property Tax Replacement" herein. (3) Based on 2014 Actual Valuation of $4,950,557,795. of $3,182,641,961. For the January 1, 2019 levy year, the City's Taxable Valuation was comprised of approximately 65% residential, 23% commercial, 9% multi -residential, 2% industrial, 1% utilities and less than 1% agriculture and military exemption. PROPERTY VALUATIONS AND TREND OF VALUATIONS TAXABLE ("ROLLBACK") VALUATIONS FOR THE CITY(]) LEVIES AND TAX COLLECTIONS(1) The following shows the trend in the City's tax extensions and collections. Levy Fiscal Amount Amount Percent Preliminary Fiscal Year: 2016/17 2017/18 2018/19 2019/20 2020/21 Property Class Levy Year: 2015 2016 2017 2018 2019 Residential........................................................ $2,165,817,742 $2,284,007,603 $2,380,126,625 $2,522,095,595 $2,751,410,912 Agricultural........................................................ 1,706,955 1,618,090 1,429,547 1,425,151 1,424,328 Commercial....................................................... 771,275,414 789,742,578 868,129,247 900,633,903 994,338,692 Industrial........................................................... 71,148,238 71,527,489 66,612,275 71,412,290 72,602,730 Multi -residential ................................................. 358,117,010 346,568,385 379,668,606 376,689,677 390,488,458 Railroads........................................................... 3,686,919 3,586,439 3,194,473 3,241,213 4,039,622 Utilities without Gas and Electric(2) ................... 7,375,066 6,734,894 7,099,293 7,386,408 6,152,547 Gas and Electric Utility(2).................................. 44,986,783 41,702,196 41,797,475 42,719,065 40,156,239 Less: Military Exemption ................................... (2,727,994) (2,635,396) (2,579,836) (2,489,088) (2,435,380) Total................................................................ $3,421,386,133 $3,542,852,278 $3,745,477,705 $3,923,114,214 $4,258,178,148 Percent Change +(-) ........................................ 7.50%(3) 3.55% 5.72% 4.74% 8.54% Notes: (1) Source: Iowa Department of Management. (2) See "PROPERTY TAX INFORMATION - Utility Property Tax Replacement" herein. (3) Based on 2014 Taxable Valuation of $3,182,641,961. LEVIES AND TAX COLLECTIONS(1) The following shows the trend in the City's tax extensions and collections. Levy Fiscal Amount Amount Percent Year Year Levied Collected(2) Collected 2010 ............... 2011-12.............. $49,589,988 $49,543,860 99.91% 2011 ............... 2012-13.............. 50,407,375 50,419,618 100.02% 2012 ............... 2013-14.............. 50,307,189 50,051,577 99.49% 2013 ............... 2014-15.............. 51,608,730 51,496,353 97.70% 2014 ............... 2015-16.............. 52,033,966 52,020,805 99.97% 2015 ............... 2016-17.............. 55,330,223 55,357,357 100.05% 2016 ............... 2017-18.............. 56,458,399 56,525,799 100.12% 2017 ............... 2018-19.............. 59,173,825 59,115,402 99.90% 2018 ............... 2019-20.............. 60,296,653 - -In Collection - - Notes: (1) Source: the State of Iowa Department of Management and the City. Does not include Levies or Collections for Utility Replacement. Does not include levies and collections for the City's tax increment finance district. (2) Includes delinquent taxes. 17 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 LARGER TAXPAYERS(]) Notes: (1) Source: the County. (2) Every effort has been made to seek out and report the larger taxpayers. However, many of the taxpayers listed contain multiple parcels and it is possible that some parcels and their valuations have been overlooked. Levy Limits Normal municipal operations and maintenance costs are generally funded through the corporate property tax levy. Iowa State Code does not allow the municipal general fund to be taxed above $8.10 per thousand dollars of taxable value in any one year. In addition to the General Fund, there are several other tax funds that the City can create and use for specific purposes. TAX RATES Levy Years 2014 - 2018(1)(2) (Per $1,000 Actual Valuation) Fiscal Year: 2015/16 Levy Year 2018 Taxpayer Name Business/Service Taxable Valuation(2) American College Testing, Inc (aka ACT, Inc.) .............. Commercial................................................................. $ 45,737,963 MidAmericanEnergy ..................................................... Utility........................................................................... 39,889,100 BBCS-Hawkeye Housing LLC ....................................... Real Estate Management/Apartments.......................... 25,816,098 Tailwind Iowa City, LLC ................................................. Real Estate Development ............................................ 24,790,776 Ann S Gerdin Revocable Trust ...................................... Commercial................................................................. 22,903,407 MidWestOne Bank ......................................................... Banking....................................................................... 21,267,216 Dealer Properties IC LLC ............................................... Commercial................................................................. 19,318,887 Procter & Gamble LLC ................................................... Industrial...................................................................... 16,809,668 Rise at Riverfront Crossings, LLC..................................Apartments.................................................................. 3.92833 16,173,442 Vesper Iowa City LLC....................................................Apartments.................................................................. 3.22846 15.476.241 Total................................................................................................................................................................. 3.11277 $248,182,798 Ten Larger Taxpayers as Percent of City's 2018 Taxable Valuation ($3,923,114,214) ...................................... 6.33% Notes: (1) Source: the County. (2) Every effort has been made to seek out and report the larger taxpayers. However, many of the taxpayers listed contain multiple parcels and it is possible that some parcels and their valuations have been overlooked. Levy Limits Normal municipal operations and maintenance costs are generally funded through the corporate property tax levy. Iowa State Code does not allow the municipal general fund to be taxed above $8.10 per thousand dollars of taxable value in any one year. In addition to the General Fund, there are several other tax funds that the City can create and use for specific purposes. TAX RATES Levy Years 2014 - 2018(1)(2) (Per $1,000 Actual Valuation) Fiscal Year: 2015/16 2016/17 2017/18 2018/19 2019/20 Levy Year: 2014 2015 2016 2017 2018 City: General Fund ..................................................... $ 8.10000 $ 8.10000 $ 8.10000 $ 8.10000 $ 8.10000 Emergency Levy ................................................. 0.00000 0.00000 0.00000 0.00000 0.00000 Debt Service Fund .............................................. 3.92833 3.82846 3.57846 3.22846 2.97846 Employee Benefits ............................................. 3.11277 3.14415 3.14415 3.34415 3.24415 Capital Improvement .......................................... 0.00000 0.00000 0.00000 0.00000 0.00000 Other.................................................................. 1.50986 1.51044 1.51044 1.51044 1.51044 Total City.......................................................... $16.65096 $16.58305 $16.33305 $16.18305 $15.83305 Johnson County ................................................. $ 6.90337 $ 6.77140 $ 6.85143 $ 6.53594 $ 6.49278 Iowa City Community School District .................. 13.86773 13.98935 13.95855 14.85629 14.79097 Kirkwood............................................................ 1.06125 1.08048 1.13174 1.20354 1.21331 Other.................................................................. 0.32784 0.32450 0.33036 0.30557 0.27066 Total Tax Rate(3)............................................. $38.81115 $38.74878 $38.60513 $39.08439 $38.60077 Notes: (1) Source: Iowa Department of Management. (2) Does not include the tax rate for agriculture. (3) Taxpayers in the Iowa City Community School District area. IN City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Tax Levy Procedures The Bonds are general obligations of the City, payable from and secured by a continuing ad valorem tax levied against all of the property valuation within the City. As part of the budgetary process each fiscal year, the City will have an obligation to request a debt service levy to be applied against all of the taxable property within the City. A failure on the part of the City to make a timely levy request or a levy request by the City that is inaccurate or is insufficient to make full payments of the debt service of the Bonds for a particular fiscal year may cause Bond holders to experience delay in the receipt of distributions of principal of and/or interest on the Bonds. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the City and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year. Notwithstanding the foregoing, Iowa Code section 76.2 provides when an Iowa political subdivision issues bonds, "the governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds within a period named not exceeding twenty years. A certified copy of this resolution shall be filed with the county auditor or auditors of the counties in which the political subdivision is located; and the filing shall make it a duty of the auditor(s) to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full." Utility Property Tax Replacement Property owned by entities involved primarily in the production, delivery, service and sale of electricity and natural gas ("Utilities") pay a replacement tax based upon the delivery of energy by Utilities in lieu of property taxes. All replacement taxes are allocated among local taxing bodies by the State Department of Revenue and the Department of Management. This allocation is made in accordance with a general allocation formula developed by the Department of Management on the basis of general property tax equivalents. Utility properties paying the replacement tax are exempt from the levy of property tax by political subdivisions. In addition to the replacement tax, Utility property will continue to be valued by a special method as provided in the statute and taxed at the rate of three cents per one thousand dollars for the general fund of the State. By statute, the replacement tax collected by the State and allocated among local taxing bodies (including the City) shall be treated as property tax when received and shall be disposed of by the county treasurer as taxes on real estate. It is possible that the general obligation debt capacity of the City could be adjudicated to be proportionately reduced in future years if Utility property were determined to be other than "taxable property" for purposes of computing the City's debt limit under Article XI of the Constitution of the State of Iowa. There can be no assurance that future legislation will not (i) operate to reduce the amount of debt the City can issue or (ii) adversely affect the City's ability to levy taxes in the future for the payment of the principal of and interest on its outstanding debt obligations, including the Bonds. Approximately 1% of the City's levy year 2019 taxable valuation currently is utility property. Tax Increment Financing The Code of Iowa currently authorizes the use of two types of tax increment financing by local taxing districts in the State of Iowa. The first type allows local governments to establish TIF districts to be established for the purposes of financing designated urban renewal projects which contribute to the urban redevelopment and economic development of the immediate area. The taxable valuation used for this type of TIF district in the City for levy year 2019 was $84,077,937. 19 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 The second type of tax increment financing was authorized by state legislative action in the mid -1980's. The area community colleges can establish TIF districts by contract with specific local businesses and industries to provide jobs training programming for new employees of existing expanding businesses or employees of new businesses. The revenues from these job training TIF districts then retires the debt incurred from the issuance of jobs training certificates which finance the cost of jobs training programming over a maximum often years. Upon payment of all jobs training certificates, the district dissolves and the incremental value from the new or expanded business reverts to the general tax base. There is no current valuation for this second type of TIF district. Legislation From time to time, legislative proposals are pending in Congress and the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters described herein. It cannot be predicted whether or in what forms any of such proposals, either pending or that may be introduced, may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for taxes levied by the City or have an adverse impact on the future tax collections of the City. Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed federal or state tax legislation. The opinions expressed by Bond Counsel are based upon existing legislation as of the date of issuance and delivery of the Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending federal or state tax legislation. During the 2019 legislative session, the Iowa General Assembly enacted Senate File 634 (the "2019 Act"). This bill modifies the process for hearing and approval of the total maximum property tax dollars under certain levies in the county budget. The bill also includes a provision that will require the affirmative vote of 2/3 of the City Council when the maximum property tax dollars under these levies exceed an amount determined under a prescribed formula. The 2019 Act does not change the process for hearing and approval of the Debt Service Levy pledged for repayment of the Bonds. It is too early to evaluate the affect the 2019 Act will have on the overall financial position of the City or its ability to fund essential services. During the 2013 legislative session, the Iowa General Assembly enacted Senate File 295 (the "2013 Act"). Among other things, the Act (i) reduced the maximum annual taxable value growth percent, due to revaluation of existing residential and agricultural property to 3%, (ii) assigned a "rollback" (the percentage of a property's value that is subject to tax) to commercial, industrial and railroad property of 90%, (iii) created a new property tax classification for multi -residential properties (apartments, nursing homes, assisted living facilities and certain other rental property) and assigned a declining rollback percentage to such properties for each year until the residential rollback percentage is reached in the 2022 assessment year, after which the rollback percentage for such properties will be equal to the residential rollback percentage each assessment year, and (iv) exempted a specified portion of the assessed value of telecommunication properties. The Act includes a standing appropriation to replace some of the tax revenues lost by local governments, including tax increment districts, resulting from the new rollback for commercial and industrial property. Beginning in fiscal year 2018 the standing appropriation cannot exceed the actual 2017 appropriation amount. The appropriation does not replace losses to local governments resulting from the Act's provisions that reduce the annual revaluation growth limit for residential and agricultural properties to 3%, the gradual transition for multi -residential properties from the residential rollback percentage (currently 53% of market value), or the reduction in the percentage of telecommunications property that is subject to taxation. Given the wide scope of the statutory changes, and the State's discretion in establishing the annual replacement amount that is appropriated each year commencing in fiscal 2018, the impact of the 2013 Act on the City's future property tax collections is uncertain and the City has not attempted to quantify the financial impact of the 2013 Act's provisions on the City's future operations. 20 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Notwithstanding any decrease in property tax revenues that may result from the 2013 Act, Iowa Code section 76.2 provides that when an Iowa political subdivision issues bonds, "[t]he governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds within a period named not exceeding twenty years. A certified copy of this resolution shall be filed with the county auditor or the auditors of the counties in which the political subdivision is located; and the filing shall make it a duty of the auditors to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full." From time to time, other legislative proposals may be considered by the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters described in this Official Statement. It cannot be predicted whether or in what forms any of such proposals may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for the levy of taxes by the City. FINANCIAL INFORMATION Financial Reports The City's financial statements are audited annually by certified public accountants. The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applicable to governments. See APPENDIX A for more detail. No Consent or Updated Information Requested of the Auditor The tables and excerpts (collectively, the "Excerpted Financial Information") contained in this "FINANCIAL INFORMATION" section are from the audited financial statements of the City, including the audited financial statements for the fiscal year ended June 30, 2019 (the "2019 CAFR'). The 2019 CAFR has been audited by Bohnsack & Frommelt LLP, Certified Public Accountants, Moline, Illinois, (the "Auditor"), and received by the City Council. The City has not requested the Auditor to update information contained in the Excerpted Financial Information and the 2019 CAFR; nor has the City requested that the Auditor consent to the use of the Excerpted Financial Information and the 2019 CAFR in this Official Statement. The inclusion of the Excerpted Financial Information and the 2019 CAFR in this Official Statement in and of itself is not intended to demonstrate the fiscal condition of the City since the date of the 2019 CAFR. Questions or inquiries relating to financial information of the City since the date of the 2019 CAFR should be directed to the City. Summary Financial Information The following tables are summaries and do not purport to be the complete CAFRs, copies of which are available upon request. See APPENDIX A for the City's 2019 CAFR. The City's expects its General Fund balance for the fiscal year ending June 30, 2020 to decrease by approximately $1,812,353. The City has approved a budget for fiscal year 2021 with an anticipated decrease to the General Fund balance of approximately $2,013,693. 21 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 STATEMENT OF NET POSITION GOVERNMENTAL ACTIVITIES(]) (Amounts Expressed in Thousands) ASSETS: Equity in Pooled Cash and Investments .................................. Receivables: PropertyTax.......................................................................... Accounts and Unbilled Usage ................................................ Interest.................................................................................. Notes..................................................................................... InternalBalances..................................................................... Due from Other Governments .................................................. PrepaidItem............................................................................ Inventories............................................................................... Assets Held for Resale............................................................ Restricted Assets: Equity in Pooled Cash and Investments ................................. Other Post Employment Benefits Asset ................................... Capital Assets: Land and Construction in Progress ........................................ Other Capital Assets (Net of Accumulated Depreciation)......... TotalAssets....................................................................... DEFERRED OUTFLOWS OF RESOURCES:(2) Pension Related Deferred Outflows ......................................... $ 6,767 OPEB Related Deferred Outflows ............................................ 0 Total Deferred Outflows of Resources ................................. $ 6,767 LIABILITIES: Accounts Payable.................................................................... Contracts Payable................................................................... Accrued Liabilities................................................................... Interest Payable...................................................................... Deposits.................................................................................. Advances from Grantors.......................................................... Due to Other Governments...................................................... NotesPayable......................................................................... Noncurrent Liabilities: Due Within One Year: Employee Vested Benefits ................................................... BondsPayable.................................................................... Due in more than One Year: Employee Vested Benefits ................................................... Net Pension Liability............................................................ Other Post Employment Benefits Liability ............................ NotesPayable..................................................................... BondsPayable.................................................................... Total Liabilities................................................................... DEFERRED INFLOWS OF RESOURCES: Unavailable Revenues: $ 7,192 $ 13,131 $ 11,477 $ 11,255 0 0 637 1,467 $ 7,192 $ 13,131 $ 12,114 $ 12,722 $ 2,296 $ 3,374 Audited as of June 30 $ 5,168 $ 3,399 2015 2016 2017 2018 2019 $ 63,571 $ 84,052 $111,030 $109,860 $111,645 52,240 55,482 56,639 59,538 60,529 718 953 820 817 941 364 284 428 920 967 17,308 16,252 5,524 5,304 5,209 (12,127) (13,688) (15,494) (16,069) (20,055) 10,298 5,987 4,519 4,067 7,584 0 10 811 810 907 656 688 730 602 650 2,170 582 750 562 689 45,981 36,914 24,560 26,108 18,553 25 40 35 0 0 48,032 48,275 52,545 73,176 51,291 151,620 158,947 173,598 174,835 210,302 $380,856 $394,778 $416,495 $440,530 $449,212 DEFERRED OUTFLOWS OF RESOURCES:(2) Pension Related Deferred Outflows ......................................... $ 6,767 OPEB Related Deferred Outflows ............................................ 0 Total Deferred Outflows of Resources ................................. $ 6,767 LIABILITIES: Accounts Payable.................................................................... Contracts Payable................................................................... Accrued Liabilities................................................................... Interest Payable...................................................................... Deposits.................................................................................. Advances from Grantors.......................................................... Due to Other Governments...................................................... NotesPayable......................................................................... Noncurrent Liabilities: Due Within One Year: Employee Vested Benefits ................................................... BondsPayable.................................................................... Due in more than One Year: Employee Vested Benefits ................................................... Net Pension Liability............................................................ Other Post Employment Benefits Liability ............................ NotesPayable..................................................................... BondsPayable.................................................................... Total Liabilities................................................................... DEFERRED INFLOWS OF RESOURCES: Unavailable Revenues: $ 7,192 $ 13,131 $ 11,477 $ 11,255 0 0 637 1,467 $ 7,192 $ 13,131 $ 12,114 $ 12,722 $ 2,296 $ 3,374 $ 2,127 $ 5,168 $ 3,399 5,468 2,773 2,521 3,663 5,864 4,145 4,143 4,182 4,193 5,231 168 110 133 134 151 1,078 1,715 1,230 952 1,008 69 47 144 124 98 636 402 42 29 31 2,004 582 663 475 602 1,148 1,185 1,252 1,253 1,308 11,255 10,384 8,230 9,612 11,534 928 947 989 987 1,012 24,556 30,539 39,080 38,867 38,890 2,932 3,227 3,660 5,472 6,401 211 211 211 211 211 50.785 48,105 59,509 58.307 56,771 $107,679 $107,744 $123,973 $129,447 $132,511 Pension Related Deferred Inflows .......................................... $ 10,791 $ 3,740 $ 1,603 $ 1,565 $ 1,940 OPEB Related Deferred Inflows ............................................ 0 0 0 246 216 Succeeding Year Property Taxes .......................................... 52,035 55,330 56,459 59,173 60,296 Notes..................................................................................... 11,422 11,226 0 0 0 Grants................................................................................... 0 12 0 0 0 Total Deferred Inflows of Resources .................................. 74,248 70,308 $58,062 60,984 62,452 NET POSITION: Net Investment in Capital Assets ............................................. $153,729 $163,362 $183,651 $157,106 $208,028 Restricted for or by: Employee Benefits................................................................. 1,593 1,671 2,810 3,119 4,249 Capital Projects..................................................................... 27,014 31,456 30,856 21,463 17,020 Debt Service.......................................................................... 6,921 6,463 7,221 8,423 9,514 Police.................................................................................... 510 458 349 283 214 Other Purposes..................................................................... 409 1,657 2,590 4,469 4,359 Grant Agreement................................................................... 0 449 3,850 3,733 3,463 Unrestricted............................................................................. 15.520 18,402 16,264 63.617 20,124 Total Net Position.............................................................. $205696 5223 918 $242,5-91 $262.213 5266 971 Note: (1) Source: Audited financial statements of the City for the fiscal years ended June 30, 2015 through 2019. 22 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 STATEMENT OF ACTIVITIES GOVERNMENTAL ACTIVITIES(]) (Amounts Expressed in Thousands) FUNCTION/PROGRAMS: Governmental Activities: PublicSafety......................................................................... PublicWorks......................................................................... Culture and Recreation.......................................................... Community and Economic Development ............................... General Government............................................................. Interest on Long -Term Debt ................................................... Total Governmental Activities .............................................. General Revenues: Property Taxes, Levied for General Purposes ....................... Hotel/Motel Tax..................................................................... Gas and Electric Tax............................................................. Utility Franchise Tax.............................................................. Grants and Contributions Not Restricted to Specific Purposes................................................................. Earnings on Investments....................................................... Gain on Disposal of Capital Assets ........................................ Miscellaneous........................................................................ Transfers................................................................................. Reassignment of Cable Television to Governmental Activities................................................................................ Total General Revenues and Transfers ............................... Changes in Net Position .................................................... Net Position Beginning of Year ................................................ Net Position End of Year ......................................................... Audited for the Year Ended June 30 2015 2016 2017 2018 2019 $ (16,991) $ (15,969) $ (18,053) $ (20,466) $ (20,862) 8,350 998 6,746 (3,084) (2,516) (13,208) (13,535) (14,573) (15,189) (14,834) (6,101) (4,322) (6,264) (10,166) (14,116) (4,777) (4,988) (4,600) (5,338) (5,807) 1517 (1.287) (1,481) (1.414) 1444 $(34,244) $(39,103) $(38,225) $(55,657) $(59,579) $ 52,205 $ 53,114 $ 57,649 $ 59,046 $ 61,739 1,057 1,079 1,137 1,046 1,302 851 764 726 684 668 902 874 939 976 965 1,048 2,080 1,583 1,547 1,552 1,188 1,045 1,397 2,368 3,257 135 218 2,151 140 186 5,518 4,464 3,369 3,656 3,329 (10,057) (6,395) (7,053) 1,814 (8,661) 0 82 0 0 0 52,847 57,325 61,898 71,277 64,337 $ 18,603 $ 18,222 $ 23,673 $ 15,620 $ 4,758 187,093(2) $205696 205,696 $223 918 223,918 5247 591 246,593(2) $2622n 262,213 $266.571 Notes: (1) Source: Audited financial statements of the City for the fiscal years ended June 30, 2015 through 2019. (2) Restated. The remainder of this page was left blank intentionally. 23 City oflowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 BALANCESHEET GENERAL FUND(1) (Amounts Expressed in Thousands) ASSETS: Equity in Pooled Cash and Investments ................................... Receivables: PropertyTaxes....................................................................... Accounts and Unbilled Usage ................................................. Interest................................................................................... Notes...................................................................................... Advances to Other Funds......................................................... Due from Other Governments................................................... PrepaidItem............................................................................. Assets Held for Resale............................................................. Restricted Assets: Equity in Pooled Cash and Investments .................................. TotalAssets...................................................................... LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES: Liabilities: AccountsPayable................................................................... Accrued Liabilities................................................................... Due to Other Governments..................................................... InterestPayable..................................................................... NotesPayable........................................................................ Liabilities Payable from Restricted Assets: Deposits.............................................................................. Advances from Grantors...................................................... Total Liabilities.................................................................. 30.141 21,277 10,268 1,904 2,028 87.416 $87,583 $80,952 $Z -4Z5 $-1$2 $ 1,328 $ 1,376 Audited as of June 30 $ 1,492 $ 1,497 2015 2016 2017 2018 2019 $19,001 $30,214 $32,500 $36,321 $38,979 29,922 31,825 32,965 34,973 36,301 250 449 410 496 491 217 163 161 276 360 1,340 1,305 1,292 1,276 1,329 2,681 0 0 0 56 1,859 1,758 1,887 1,941 2,131 0 10 719 726 818 2,005 582 750 562 689 30.141 21,277 10,268 1,904 2,028 87.416 $87,583 $80,952 $Z -4Z5 $-1$2 $ 1,328 $ 1,376 $ 1,191 $ 1,492 $ 1,497 887 1,141 1,321 1,391 1,466 312 29 38 29 31 37 0 4 5 17 2,004 582 663 475 602 1,072 1,710 1,224 947 1,004 27 0 7 113 94 5,667 4,838 $4,448 4,452 4,711 DEFERRED INFLOWS OF RESOURCES: Unavailable Revenues: Succeeding Year Property Taxes .......................................... $29,805 $31,739 $32,863 $34,764 $36,176 Notes..................................................................................... 1,340 1,305 0 0 0 Grants................................................................................... 82 15 6 9 34 Other..................................................................................... 1.393 1.434 1.539 1.600 1.643 Total Deferred Inflows of Resources .................................... $32,620 $34,493 $34,408 $36,373 $37,853 FUND BALANCES: Nonspendable......................................................................... $ 69 $ 69 $ 788 $ 793 $ 887 Restricted................................................................................ 25,291 18,975 9,974 1,942 1,808 Committed............................................................................... 0 4,699 5,199 4,962 0 Assigned................................................................................. 4,483 1,143 1,342 1,437 3,565 Unassigned............................................................................. 19,286 23,366 24,793 28,516 34,358 Total Fund Balances.......................................................... $49,129 $48,252 $42,096 $37,650 $40,618 Total Liabilities, Deferred Inflows of Resources and Fund Balances.......................................................... $87.416 $87.583 $80.952 $78,475 $83.182 Note: (1) Source: Audited financial statements of the City for the fiscal years ended June 30, 2015 through 2019 The remainder of this page was left blank intentionally. 24 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GENERAL FUND(1) (Amounts Expressed in Thousands) EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS PENSIONS The City participates in two public pension systems, Iowa Public Employee's Retirement System (IPERS) and Municipal Fire and Police Retirement System of Iowa (MFPRSI). Summary descriptions of each Plan follows, for more detail as to each available plan see APPENDIX A - Note 7. In fiscal year 2019, pursuant to the IPERS' required rate, the City's Regular employees (members) contributed 6.29% of covered payroll and the City contributed 9.44% of covered payroll, for a total rate of 15.73%. The City's contributions to IPERS for the year ended June 30, 2019 were $2,912,438. The City's share of the contributions, payable from the applicable funds of the City, is provided by a statutorily authorized annual levy of taxes without limit or restriction as to rate or amount. The City has always made its full required contributions to IPERS. At June 30, 2019, the City reported a liability of $25,419,730 for its proportionate share of the IPERS 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 discount rate used to measure the total pension liability was 7%. 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. 25 Audited Fiscal Year Ended June 30 2015 2016 2017 2018 2019 REVENUES: Taxes........................................................................................ $ 31,909 $ 32,229 $ 34,290 $ 35,363 $ 37,426 Licenses and Permits................................................................ 1,806 3,056 3,521 2,734 2,981 Intergovernmental..................................................................... 3,487 3,830 3,574 3,786 4,099 Charges for Service................................................................... 1,460 1,543 1,665 1,465 1,595 Fines and Forfeits...................................................................... 0 760 750 695 776 Use of Money and Property....................................................... 845 749 839 1,164 1,599 Miscellaneous............................................................................ 5,835 1,430 1,692 1,878 1,950 Total Revenues....................................................................... $45,342 $43,597 $46,331 $47,085 $50,426 EXPENDITURES: Current: Public Safety........................................................................... $ 21,087 $ 20,967 $ 22,005 $ 22,762 $ 23,858 Public Works........................................................................... 1,624 1,312 1,803 1,871 1,922 Cultural and Recreation........................................................... 11,698 12,038 12,890 13,099 13,096 Community and Economic Development ................................. 3,187 2,842 3,074 2,785 3,561 General Government............................................................... 7,093 5,479 5,471 5,550 6,144 Capital Outlay............................................................................ 3.333 1,651 1,463 2,124 1,718 Total Expenditures................................................................... $48,022 $44,289 $46,706 $48,191 $50,299 Excess (Deficiency) of Revenues Over (Under) Expenditures........................................................................... (2,680) 692 375 (1,106) 127 Other Financing Sources (Uses): Issuance of Debt....................................................................... $ 0 $ 0 $ 0 $ 17 $ 0 Sale of Capital Assets............................................................... 164 252 268 140 758 Transfers In............................................................................... 8,780 10,692 10,725 10,138 11,548 Transfers Out............................................................................ (5,044) 11 1291( 8,023) (13,635) (9,465) Total Other Financing Sources and (Uses) .............................. 3,900 185 (7,030 (3,340) 2,841 Net Change in Fund Balances ................................................... $ 1,220 $ (877) $ (7,405) $ (4,446) $ 2,968 Fund Balances, Beginning........................................................ $47,909 $49,129 $49,501(2) $42,096 $37,650 Fund Balances, Ending............................................................. $ 49,129 $ 48,252 $ 42,096 $3_7_.650 $ 40,618 Notes: (1) Source: Audited financial statements of the City for the fiscal years ended June 30, 2015 through 2019. (2) Restated. EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS PENSIONS The City participates in two public pension systems, Iowa Public Employee's Retirement System (IPERS) and Municipal Fire and Police Retirement System of Iowa (MFPRSI). Summary descriptions of each Plan follows, for more detail as to each available plan see APPENDIX A - Note 7. In fiscal year 2019, pursuant to the IPERS' required rate, the City's Regular employees (members) contributed 6.29% of covered payroll and the City contributed 9.44% of covered payroll, for a total rate of 15.73%. The City's contributions to IPERS for the year ended June 30, 2019 were $2,912,438. The City's share of the contributions, payable from the applicable funds of the City, is provided by a statutorily authorized annual levy of taxes without limit or restriction as to rate or amount. The City has always made its full required contributions to IPERS. At June 30, 2019, the City reported a liability of $25,419,730 for its proportionate share of the IPERS 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 discount rate used to measure the total pension liability was 7%. 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. 25 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 In fiscal year 2019, pursuant to the MFPRSI's required rate, the City's employees (members) contributed 9.40% of covered payroll and the City contributed 26.02% of covered payroll, for a total rate of 35.42%. The City's contribution to MFPRSI for year ended June 30, 2019 was $2,902,433. The City's share of the contributions, payable from the applicable funds of the City, is provided by a statutorily authorized annual levy of taxes without limit or restriction as to rate or amount. The City has always made its full required contributions to MFPRSI. At June 30, 2019, the City reported a liability of $22,071,429 for its proportionate share of the MFPRSI 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. OTHER POST -EMPLOYMENT BENEFITS (OPEB) 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. The following table shows the City's total OPEB liability: Total OPEB Liability Beginning of Year ................................................. $7,589,740 Changes for the year ServiceCost.......................................................................... 552,791 Interest.................................................................................. 296,944 Difference Between Expected and Actual Experience........... 1,160,860 Changes in Assumptions....................................................... 225,633 Benefit Payments.................................................................. (948.137) NetChanges......................................................................................... 1.288.091 Total OPEB Liability End of Year........................................................... $8,877,831 See APPENDIX A — Notes (7) and (8) herein for further discussion of the City's employee retirement benefit obligations. Defined Benefit Pension Plan — Municipal Fire and Police Retirement System of Iowa The City contributes to the Municipal Fire and Police Retirement System of Iowa Plan ("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. Defined Benefit Pension Plan — Iowa Public Employee's Retirement System The City also contributes to the Iowa Public Employees' Retirement System ("IPERS"). The City's employees are provided with pensions through a cost-sharing multiple employer defined pension plan administered by IPERS. IPERS benefits are established under Iowa Code, Chapter 97B and the administrative rules thereunder. The City's employee who completed seven years of covered service or has reached the age of 65 while in IPERS covered employment becomes vested. If the City's employee retires before normal retirement age, the employee's monthly retirement benefit will be permanently reduced by an early retirement reduction. IPERS provides pension benefits as well as disability benefits to City employees and benefits to the employees' beneficiaries upon the death of the eligible employee. Additionally, copies of IPERS annual financial report may be obtained from www.ipers.org. However, the information presented in such financial reports or on such websites is not incorporated into this Official Statement by any reference. 26 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Although the actuarial contribution rates are calculated each year, the contribution rates were set by state law through June 30, 2012 and did not necessarily coincide with the actuarially calculated contribution rate. As a result, from June 30, 2002 through June 30, 2013, the rate allowed by statute was less than the actuarially required rate. Effective July 1, 2012, as a result of a 2010 law change, IPERS contribution rates for the City and its employees are established by IPERS following the annual actuarial valuation (which applies IPERS' Contribution Rate Funding Policy and Actuarial Amortization method.) State statute, however, limits the amount rates can increase or decrease each year to one (1) percentage point. Therefore, any difference between the actuarial contribution rates and the contributions paid is due entirely to statutorily set contributions that may differ from the actual contribution rates. As a result, while the contribution rate in the fiscal year ended June 30, 2017 equaled the actuarially required rate, there is no guarantee, due to this statutory limitation on rate increases, that the contribution rate will meet or exceed the actuarially required rate in the futures. The following table sets forth the contributions made by the City and employees to IPERS for the period indicated. The City cannot predict the levels of funding that will be required in the future as any IPERS unfunded pension benefit obligation could be reflected in future years in higher contribution rates. The investment of moneys, assumptions underlying the same and the administration of IPERS is not subject to the direction of the City. Thus, it is not possible to predict, control or prepare for future unfunded accrued actuarial liabilities of IPERS ("UAALs"). The UAAL is the difference between total actuarially accrued liabilities and actuarially calculated assets available for the payment of such benefits. The UAAL is based on assumptions as to retirement age, mortality, projected salary increases attributed to inflation, across-the-board raises and merit raises, adjustments, cost -of -living adjustments, valuation of current assets, investment return and other matters. Such UAAL could be substantial in the future, requiring significantly increased contributions from the City which could affect other budgetary matters. The following table sets forth certain information about the funding status of IPERS that has been extracted from the comprehensive annual financial reports of IPERS for fiscal years ended June 30, 2015 through, and including, 2019 (collectively, the "IPERS CAFRs (2015-2019)"), and the actuarial valuation reports provided to IPERS by Cavanaugh MacDonald Consulting, LLC (collectively, the "IPERS Actuarial Reports (2015-2019)"). Additional information regarding IPERS and its latest actuarial valuations can be obtained by contacting IPERS administrative staff. Funded Unfunded Actuarial Ratio Accrued Liability (Actuarial Valuation Actuarial Value Market Value Actuarial Accrued (Actuarial Value) Value) Date of Assets ral of Assets rbl Liability rcl rcl-ral a / c 2015..... $27,915,379,103 $28,429,834,829 $33,370,318,731 $5,454,939,628 83.65% 2016..... 29,033,696,587 28,326,433,656 34,619,749,147 5,586,052,560 83.86% 2017..... 30,472,423,914 30,779,116,326 37,440,382,029 6,967,958,115 81.39% 2018..... 31,827,755,864 32,314,588,595 38,642,833,653 6,815,077,789 82.36% 2019..... 33,324,327,606 34,010,680,731 39,801,338,797 6,477,011,191 83.73% Source: IPERS Reports. Unfunded % of Payroll % of Payroll Fiscal Year Paid by the City Paid by Employee 2016 ........................... 8.93% 5.95% 2017 ........................... 8.93% 5.95% 2018 ........................... 8.93% 5.95% 2019 ........................... 9.44% 6.29% 2020 ........................... 9.44% 6.29% The City cannot predict the levels of funding that will be required in the future as any IPERS unfunded pension benefit obligation could be reflected in future years in higher contribution rates. The investment of moneys, assumptions underlying the same and the administration of IPERS is not subject to the direction of the City. Thus, it is not possible to predict, control or prepare for future unfunded accrued actuarial liabilities of IPERS ("UAALs"). The UAAL is the difference between total actuarially accrued liabilities and actuarially calculated assets available for the payment of such benefits. The UAAL is based on assumptions as to retirement age, mortality, projected salary increases attributed to inflation, across-the-board raises and merit raises, adjustments, cost -of -living adjustments, valuation of current assets, investment return and other matters. Such UAAL could be substantial in the future, requiring significantly increased contributions from the City which could affect other budgetary matters. The following table sets forth certain information about the funding status of IPERS that has been extracted from the comprehensive annual financial reports of IPERS for fiscal years ended June 30, 2015 through, and including, 2019 (collectively, the "IPERS CAFRs (2015-2019)"), and the actuarial valuation reports provided to IPERS by Cavanaugh MacDonald Consulting, LLC (collectively, the "IPERS Actuarial Reports (2015-2019)"). Additional information regarding IPERS and its latest actuarial valuations can be obtained by contacting IPERS administrative staff. Funded Unfunded Actuarial Ratio Accrued Liability (Actuarial Valuation Actuarial Value Market Value Actuarial Accrued (Actuarial Value) Value) Date of Assets ral of Assets rbl Liability rcl rcl-ral a / c 2015..... $27,915,379,103 $28,429,834,829 $33,370,318,731 $5,454,939,628 83.65% 2016..... 29,033,696,587 28,326,433,656 34,619,749,147 5,586,052,560 83.86% 2017..... 30,472,423,914 30,779,116,326 37,440,382,029 6,967,958,115 81.39% 2018..... 31,827,755,864 32,314,588,595 38,642,833,653 6,815,077,789 82.36% 2019..... 33,324,327,606 34,010,680,731 39,801,338,797 6,477,011,191 83.73% Source: IPERS Reports. Unfunded Funded UAAL as a Actuarial Ratio Percentage of Accrued Liability (Market 3.96% Covered (Market Value) Value) Covered (Actuarial Value) rcl-rblbr l/rcl Payroll rd] f [b-al/[c $4,940,483,902 85.19% $7,326,348,141 74.46% 6,293,315,491 81.82% 7,556,515,720 73.92% 6,661,265,703 82.21% 7,863,160,443 88.62% 6,328,245,058 83.62% 7,983,219,527 85.37% 5,790,658,066 85.45% 8,151,043,468 79.46% According to IPERS, the market value investment return on program assets is as follows: Fiscal Year Ended Investment June 30 Return % 2015............................................................ 3.96% 2016............................................................ 2.15% 2017............................................................ 11.70% 2018............................................................ 7.97% 2019............................................................ 8.35% Source: IPERS Reports 27 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Detailed information about the pension plan's fiduciary net position is available in the separately issue IPERS financial report which is available on IPERS' website at www.ipers.org. Bond Counsel, the City and the Municipal Advisor undertake no responsibility for and make no representations as to the accuracy or completeness of the information available from the IPERS discussed above or included on the IPERS website, including, but not limited to, updates of such information on the Auditor of State's website or links to other website site or links to other websites through the IPERS website. REGISTRATION, TRANSFER AND EXCHANGE See also APPENDIX B - BOOK -ENTRY SYSTEM for information on registration, transfer and exchange of book -entry bonds. The Bonds will be initially issued as book -entry bonds. The City shall cause books (the "Bond Register") for the registration and for the transfer of the Bonds to be kept at the principal office maintained for the purpose by the Bond Registrar in St. Paul, Minnesota. The City will authorize to be prepared, and the Bond Registrar shall keep custody of, multiple bond blanks executed by the City for use in the transfer and exchange of Bonds. Any Bond may be transferred or exchanged, but only in the manner, subject to the limitations, and upon payment of the charges as set forth in the Bond Resolution. Upon surrender for transfer or exchange of any Bond at the principal office maintained for the purpose by the Bond Registrar, duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Bond Registrar and duly executed by the registered owner or such owner's attorney duly authorized in writing, the City shall execute and the Bond Registrar shall authenticate, date and deliver in the name of the registered owner, transferee or transferees (as the case may be) a new fully registered Bond or Bonds of the same maturity and interest rate of authorized denominations, for a like aggregate principal amount. The execution by the City of any fully registered Bond shall constitute full and due authorization of such Bond, and the Bond Registrar shall thereby be authorized to authenticate, date and deliver such Bond, provided, however, the principal amount of outstanding Bonds of each maturity authenticated by the Bond Registrar shall not exceed the authorized principal amount of Bonds for such maturity less Bonds previously paid. The Bond Registrar shall not be required to transfer or exchange any Bond following the close of business on the fifteenth day of the month next preceding an interest payment date on such bond (known as the record date), nor to transfer or exchange any Bond after notice calling such Bond for redemption has been mailed, nor during a period of fifteen days next preceding mailing of a notice of redemption of any Bonds. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of or interest on any Bonds shall be made only to or upon the order of the registered owner thereof or such owner's legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. No service charge shall be made for any transfer or exchange of Bonds, but the City or the Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds except in the case of the issuance of a Bond or Bonds for the unredeemed portion of a bond surrendered for redemption. WV City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 TAX MATTERS Tax Exemption Federal tax law contains a number of requirements and restrictions that apply to the Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of Bond proceeds and facilities financed with Bond proceeds, and certain other matters. The City has covenanted to comply with all requirements that must be satisfied in order for the interest on the Bonds to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the Bonds to become includable in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. Subject to the City's compliance with the above -referenced covenants, under present law, in the opinion of Bond Counsel, the interest on the Bonds is excludable from gross income for federal income tax purposes and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax. Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Bond Counsel will not express any opinion as to such collateral tax consequences. Prospective purchasers of the Bonds should consult their tax advisors as to collateral federal income tax consequences The interest on the Bonds is not exempt from present Iowa income taxes. Ownership of the Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Bonds. Prospective purchasers of the Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. NOT Qualified Tax Exemption Obligations The City will NOT designate the Bonds as "qualified tax-exempt obligations". Discount and Premium Bonds The initial public offering price of certain Bonds may be less than the amount payable on such Bonds at maturity ("Discount Bonds"). Owners of Discount Bonds should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount Bonds for income tax purposes and with respect to the state and local tax consequences of owning and disposing of Discount Bonds. It is possible that, under applicable provisions governing determination of state and local income taxes, accrued interest on Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment. The initial public offering price of certain Bonds may be greater than the amount of such Bonds at maturity ("Premium Bonds"). Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable premium on Premium Bonds for income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds. 29 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Other Tax Advice In addition to the income tax consequences described above, potential investors should consider the additional tax consequences of the acquisition, ownership, and disposition of the Bonds. For instance, state income tax law may differ substantially from state to state, and the foregoing is not intended to describe any aspect of the income tax laws of any state. Therefore, potential investors should consult their own tax advisors with respect to federal tax issues and with respect to the various state tax consequences of an investment in Bonds. Audits The Internal Revenue Service (the "Service") has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. To the best of the City's knowledge, no obligations of the City are currently under examination by the Service. It cannot be predicted whether or not the Service will commence an audit of the Bonds. If an audit is commenced, under current procedures the Service may treat the City as a taxpayer and the Bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Bonds until the audit is concluded, regardless of the ultimate outcome. Reporting and Withholding Payments of interest on, and proceeds of the sale, redemption or maturity of, tax-exempt obligations, including the Bonds, are in certain cases required to be reported to the Service. Additionally, backup withholding may apply to any such payments to any Bond owner who fails to provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or a substantially identical form, or to any Bond owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes. Tax Legislation Legislation affecting tax-exempt obligations is regularly considered by the United States Congress and may be considered by the Iowa legislature. Court proceedings may also be filed, the outcome of which could modify the tax treatment. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Bonds will not have an adverse effect on the tax status of interest or other income on the Bonds or the market value or marketability of the Bonds. These adverse effects could result, for example, from changes to federal or state income tax rates, changes in the structure of federal or state income taxes (including replacement with another type of tax), or repeal (or reduction in the benefit) of the exclusion of interest on the Bonds from gross income for federal or state income tax purposes for all or certain taxpayers. From time to time, proposals have been are made that could significantly reduce the benefit of, or otherwise affect, the exclusion from gross income of interest on obligations like the Bonds. The introduction or enactment of any such legislative proposals or clarification of the Code may also affect, perhaps significantly, the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed tax legislation, as to which Bond Counsel expresses no opinion. 30 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 The Opinion The FORM OF LEGAL OPINION, in substantially the form set out in APPENDIX B to this Preliminary Official Statement, will be delivered at closing. Bond Counsel's opinion is not a guarantee of a result, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the City described in this section. No ruling has been sought from the Service with respect to the matters addressed in the opinion of Bond Counsel and Bond Counsel's opinion is not binding on the Service, nor does the rendering of the opinion guarantee the outcome of any legal dispute that may arise out of the transaction. Bond Counsel assumes no obligation to update its opinion after the issue date to reflect any further action, fact or circumstance, or change in law or interpretation, or otherwise. Enforcement There is no trustee or similar person to monitor or enforce the terms of the resolution for issuance of the Bonds. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the City and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year. The owners of the Bonds cannot foreclose on property within the boundaries of the City or sell such property in order to pay the debt service on the Bonds. In addition, the enforceability of the rights and remedies of owners of the Bonds may be subject to limitation as set forth in Bond Counsel's opinion. The opinion will state, in part, that the obligations of the City with respect to the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable, to the exercise of judicial discretion in appropriate cases and to the exercise by the State and its governmental bodies of the police power inherent in the sovereignty of the State and to the exercise by the United States of America of the powers delegated to it by the Constitution of the United States of America. ALL POTENTIAL PURCHASERS OF THE BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS WITH RESPECT TO FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF OWNERSHIP OF THE BONDS (INCLUDING BUT NOT LIMITED TO THOSE LISTED ABOVE). CONTINUING DISCLOSURE For the purpose of complying with Rule 15c2-12 of the Securities Exchange Commission, as amended and interpreted from time to time (the "Rule"), the City will covenant and agree, for the benefit of the registered holders or beneficial owners from time to time of the outstanding Bonds to provide reports of specified information and notice of the occurrence of certain events, as hereinafter described (the "Disclosure Covenants"). The information to be provided on an annual basis, and the events as to which notice is to be given, is set forth in "APPENDIX D — Form of Continuing Disclosure Certificate". This covenant is being made by the City to assist the Underwriter(s) in complying with the Rule. Breach of the Disclosure Covenants will not constitute a default or an "Event of Default" under the Bonds or Resolution, respectively. A broker or dealer is to consider a known breach of the Disclosure Covenants, however, before recommending the purchase or sale of the Bonds in the secondary market. Thus, a failure on the part of the City to observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Bonds and their market price. 31 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Within the last five years, for the fiscal year ending June 30, 2015, certain financial information and operating data, while contained in the timely filed CAFR, was not presented in the same format and indexed in the "Annual Financial Information and Operating Data" portion of the EMMA system. In addition, the City did not timely file a material event notice for a financial obligation entered into on August 1, 2019. The City has taken steps to ensure fixture filing of this information in compliance with the applicable undertakings. Bond Counsel expresses no opinion as to whether the Undertaking complies with the requirements of Section (b)(5) of the Rule. OPTIONAL REDEMPTION Bonds due June 1, 2021 - 2026 inclusive, are not subject to optional redemption. Bonds due June 1, 2027 - 2030, inclusive, are callable in whole or in part on any date on or after June 1, 2026, at a price of par and accrued interest. If selection by lot within a maturity is required, the Registrar shall designate the Bonds to be redeemed by random selection of the names of the registered owners of the entire annual maturity until the total amount of Bonds to be called has been reached. If less than all of the maturity is called for redemption, the City will notify DTC of the particular amount of such maturity to be redeemed prior to maturity. DTC will determine by lot the amount of each Participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Thirty days' written notice of redemption shall be given to the registered owner of the Bond. Failure to give written notice to any registered owner of the Bonds or any defect therein shall not affect the validity of any proceedings for the redemption of the Bonds. All Bonds or portions thereof called for redemption will cease to bear interest after the specified redemption date, provided funds for their redemption are on deposit at the place of payment. Written notice will be deemed completed upon transmission to the owner of record. LITIGATION There is no litigation of any nature now pending or threatened restraining or enjoining the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the validity of the Bonds or any proceedings of the City taken with respect to the issuance or sale thereof. There is no litigation now pending, or to the knowledge of the City, threatened against the City that is expected to materially impact the financial condition of the City. LEGAL MATTERS The Bonds are subject to approval as to certain legal matters by Ahlers & Cooney, P.C., Des Moines, Iowa, as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement except for guidance concerning the sections regarding "TAX MATTERS", and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify any of the financial or statistical statements, or data contained in this Official Statement, and will express no opinion with respect thereto. A legal opinion in substantially the form set forth in APPENDIX C to this Official Statement will be delivered at closing. The legal opinion to be delivered concurrently with the delivery of the Bonds expresses the professional judgment of the attorneys rendering the opinion as to legal issues expressly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of the result indicated by that expression of professional judgment, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. 32 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 In addition, the enforceability of the rights and remedies of owners of the Bonds may be subject to limitation as set forth in the Bond Counsel's opinion. The opinion will state, in part, that the obligation of the City with respect to the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable, and to the exercise of judicial discretion in appropriate cases. OFFICIAL STATEMENT AUTHORIZATION This Official Statement has been authorized for distribution to prospective purchasers of the Bonds. All statements, information, and statistics herein are believed to be correct but are not guaranteed by the consultants or by the City, and all expressions of opinion, whether or not so stated, are intended only as such. This Official Statement is not to be construed as a contract or agreement amongst the City, the Underwriter, or the holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinions and not as representations of fact. The information and expressions of opinions contained herein are subject to change without notice and neither the delivery of this Official Statement or the sale of the Bonds made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. The information contained in this Official Statement is not guaranteed. INVESTMENT RATING The City has supplied certain information and material concerning the Bonds and the City to the rating service shown on the cover page, including certain information and materials which may not have been included in this Official Statement, as part of its application for an investment rating on the Bonds. A rating reflects only the views of the rating agency assigning such rating and an explanation of the significance of such rating may be obtained from such rating agency. Generally, such rating service bases its rating on such information and material, and also on such investigations, studies and assumptions that it may undertake independently. There is no assurance that such rating will continue for any given period of time or that it may not be lowered or withdrawn entirely by such rating service if, in its judgment, circumstances so warrant. Any such downward change in or withdrawal of such rating may have an adverse effect on the secondary market price of the Bonds. An explanation of the significance of the investment rating may be obtained from the rating agency: Moody's Investors Service, 7 World Trade Center at 250 Greenwich Street, New York, New York 10007, telephone 212- 553-1658. UNDERWRITING The Bonds were offered for sale by the City at a public, competitive sale on May 5, 2020. The best bid submitted at the sale was submitted by (the "Underwriter"). The City awarded the contract for sale of the Bonds to the Underwriter at a price of $ (reflecting the par amount of $ , plus a reoffering premium of $ , and less an Underwriter's discount of $). The Underwriter has represented to the City that the Bonds have been subsequently re -offered to the public initially at the yields or prices set forth in the Final Official Statement. 33 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 MUNICIPAL ADVISOR The City has engaged Speer Financial, Inc. as municipal advisor (the "Municipal Advisor") in connection with the issuance and sale of the Bonds. The Municipal Advisor is a Registered Municipal Advisor in accordance with the rules of the MSRB. The Municipal Advisor will not participate in the underwriting of the Bonds. The financial information included in the Official Statement has been compiled by the Municipal Advisor. Such information does not purport to be a review, audit or certified forecast of future events and may not conform with accounting principles applicable to compilations of financial information. The Municipal Advisor is not a firm of certified public accountants and does not serve in that capacity or provide accounting services in connection with the Bonds. The Municipal Advisor is not obligated to undertake any independent verification of or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement, nor is the Municipal Advisor obligated by the City's continuing disclosure undertaking. CERTIFICATION I have examined this Official Statement dated April _, 2020, for the $12,145,000* General Obligation Bonds, Series 2020, believe it to be true and correct and will provide to the purchaser of the Bonds at the time of delivery a certificate confirming to the purchaser that to the best of our knowledge, information and belief, information in the Official Statement was at the time of acceptance of the bid for the Bonds and, including any addenda thereto, was at the time of delivery of the Bonds true and correct in all material respects and does not include any untrue statement of a material fact, nor does it omit the statement of any material fact required to be stated therein, or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. *Subject to change. 34 /s/ DENNIS BOCKENSTEDT Finance Director CITY OF IOWA CITY Johnson County, Iowa City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 APPENDIX A CITY OF IOWA CITY JOHNSON COUNTY, IOWA FISCAL YEAR 2019 COMPREHENSIVE ANNUAL FINANCIAL REPORT LOL fPG L12C 1 AG9L Eug6q Inu6 30' Soja •]III .1gwnI[: •i7 *Is Ll L L1 /'mss r. y L L1 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 I 1 1 e ql �T CITY OF IOWA CITY UNESCO CITY OF LITERATURE 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 Ratios of 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 Capitalassets 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 December 11, 2019 To the Citizens, Honorable Mayor, Members of the City Council and City Manager City of Iowa City, Iowa � r ®� q7 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. 9 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 Reports ng Presented to City of Iowa City Iowa For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 20 18 Executive Director/CED 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. 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 Activities 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 FY19. 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, Deferred 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 of business -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) Governmental 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 ofresources 2 (23) 5 (14) (18) 7 5 (1) (37) (7) Deferred inflows ofresources 9 34 l 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 Natbds 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 to: Other Shared Revenue and Grants Other Construction Nonmajor Governmental Parking Total Advances from Debt General Service Sanitation Total $ - $ 96,694 $ - $ 96,694 - 2,500,000 2,500,000 56,012 - - 56,012 - - 1,423,385 1,423,385 $ 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 $ 10,476,210 $ 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 6SI 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. 57 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 Governmental Activities Principal Interest Business -type Activities Principal Interest 2020 $ 140,000 $ 451,635 $ 4,075,000 $ 685,365 2021 140,000 448,695 4,250,000 477,665 2022 1,110,000 445,475 4,350,000 298,690 2023 1,110,000 413,045 3,840,000 149,270 2024 1,105,000 380,345 1,745,000 55,825 2025-2029 5,015,000 1,415,425 1,880,000 32,325 2030-2034 4,555,000 672,245 - - 2035-2036 1,755,000 79,350 - - Total $ 14,930,000 $ 4,306,215 $ 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 Muhi-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 Amount Interest Final Outstanding Issued Rates Maturity June 30, 2019 Rates Maturity 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 Maturity Revenue Bonds: Refimded Wastewater Treatment Bonds (2) June 2016 9,360,000 3.0-4.0 7/21 Refimded Wastewater Treatment Bonds (3) June 2017 4,550,000 2.0-5.0 7/22 Refimded Water Bonds (4) June 2012 4,950,000 1.5 - 2.1 7/22 Refimded Water Bonds (5) June 2016 3,650,000 1.5 - 5.0 7/24 Refunded 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 earnable compensation of the member or equal to the amount of the member's total contributions plus interest. Benefits are increased annually in accordance with Chapter 411.6 of the Code of Iowa which states a standard formula for the increases. The surviving spouse or dependents of an active member who dies due to a traumatic personal injury incurred in the line of duty receives a $100,000 lump -sum payment. Contributions Member contribution rates are set by state statute. In accordance with Chapter 411 of the Code of Iowa, the contribution rate was 9.40% of earnable compensation for the year ended June 30, 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 future compensation of all members, further reduced by member contributions and state appropriations. Under the Code of Iowa the employer's contribution rate cannot be less than 17.00% of earnable compensation. The contribution rate was 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 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 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 $ 70 25,419,730 $ 10,553,053 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: $ 9,259,218 $ 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 75 $ 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 • 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 77 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 Project 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. Changes 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. 7r7 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 (l 1) - (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 Section Tabs Statistical Section This part of the City of Iowa City's comprehensive annual financial report represents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Contents Page Financial Trends 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 $ 631,405 $ 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 _i� 6,284 T3j ]� 5,732 33,392 ]� 1,011 169 ]� 2,539 ]� $73313ij 3,074 3,632 SS (1,730) $�i�6i . j $ 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 ZT� $�7 r 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. ' 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 $ (7,519) $ 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 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. 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 1% Local Option Sales Tax went into effect 7/1/09 and was effective through 6/30/13 2 1% Utility Franchise Fee went into effect 4/1/10. 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 S 3,182,636,485 $ 3,122,874,615 $ 3,065,278,624 Agdc.ltuml(taxed at Ag care) 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 Residendel 471,420,082 411,460,472 410,426,868 - - - - - - - Commcrcial 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 9599,528 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: Militaryexempd- 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 El -x 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 $ 5,350,743,693 $ 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 mhback 55.6209% 56.9391% 55.6259% 55.7335% 54.4002% 52.8166% 50.7518% 48.5299% 46.9094% 45.5893% Agriculturalrollback 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 Agrimlhttal(taxed et Ag,,t,) 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 IndusMal 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 Rail-& 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 9599,528 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 Utihties 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 D.- 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 Sou . lows Department of Management Notes: Propmy E reassessed in the odd numbered years to make adjustments to ell property values, according m current market values. As per the Code of 1-, all real property subjeo to taxation shall be valued at its actual value and, except m otherwise provided, shall be reassessed a[ 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. 1 Delinquent tax collection is presented by collection year, rather than levy year, because information is not available from Johnson County Treasurer by levy year. 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. 1 Delinquent tax collection is presented by collection year, rather than levy year, because information is not available from Johnson County Treasurer by levy year. 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 of Business 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 (Oalmoll) 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 General Available CITY OF IOWA CITY, IOWA RATIOS OF OUTSTANDING DEBT BY TYPE Last Ten Fiscal Years Business -Type Activities Capital General Fiscal Obligation Revenue Line of Loan Obligation Revenue Year Bonds' Bonds' Credit Note Bonds' Bonds' 2010 71,791,737 2,200,000 210,784 3,731,167 79,281,888 2011 77,743,957 2,550,000 210,784 3,130,849 75,857,306 2012 74,225,654 2,318,225 210,784 1,483,473 69,059,307 2013 57,688,803 2,614,644 2,550,000 210,784 1,182,315 62,764,738 2014 64,132,510 2,616,768 3,000,000 210,784 886,157 57,568,517 2015 59,421,203 2,618,892 3,350,000 210,784 590,000 45,566,903 2016 55,998,392 2,491,016 3,000,000 210,784 295,000 39,951,661 2017 52,571,254 15,168,140 3,000,000 210,784 - 34,420,914 2018 52,883,524 15,035,264 3,000,000 210,784 29,095,062 2019 53,402,638 14,902,388 3,000,000 210,784 21,155,710 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. a Population and personal income information can be found on page 134 124 Total Primary Government 157,215,576 159,492,896 147,297,443 127,011,284 128,414,736 111,757,782 101,946,853 105,371,092 100,224,634 92,671,520 Percentage of Personal Income 2.56 2.38 2.08 1.73 1.66 1.44 1.27 1.22 1.14 1.02 Per Capitan 2,317 2,313 2,136 1,811 1,794 1,522 1,374 1,390 1,314 1,178 CITY OF IOWA CITY, IOWA RATIOS OF GENERAL OBLIGATION BONDED DEBT1 TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA Last Ten Fiscal Years (amounts expressed in thousands, except per capita) Property Debt Debt Net General Ratio of Net Net Bonded Fiscal Assessed Payable from Payable from Gross Debt Service Obligation Bonded Debt to Debt Year Value Governmental Proprietary Bonded Debt Fund Balance Bonded Debt Assessed Value Per Cauita3 2010 4,376,151 71,792 3,731 75,523 13,952 61,571 14.07:1000 907 2011 4,449,860 77,744 3,131 80,875 13,151 67,724 15.22:1000 982 2012 4,520,142 74,226 1,483 75,709 11,009 64,700 14.31:1000 938 2013 4,615,527 57,689 1,182 58,871 6,527 52,344 11.34:1000 746 2014 4,668,319 64,133 886 65,019 6,872 58,147 12.46:1000 812 2015 4,826,648 59,421 590 60,011 7,052 52,959 10.97:1000 721 2016 4,950,559 55,998 295 56,293 6,573 49,720 10.04:1000 670 2017 5,350,228 52,571 - 52,571 7,756 44,815 8.38:1000 591 2018 5,494,459 52,884 52,884 8,609 44,275 8.06:1000 580 2019 5,907,661 53,403 53,403 9,648 43,755 7.41:1000 556 Notes: 1 General Obligation bonds, net of related premiums and discounts. 2City of Iowa City Budget Book. 3 Population data can be found on page 134. 125 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 FYI 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 CITY OF IOWA CITY, IOWA LEGAL DEBT MARGIN INFORMATION Last Ten Fiscal Years (amounts expressed in thousands) 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 $ 64,415,000 $ 6,448,628 $ $ 4,529,672 70,863,628 $ 66,333,956 129 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 CITY OF IOWA CITY, IOWA REVENUE DEBT ANNUAL MATURITY SCHEDULE 131 Payments Funding Source(s) Principal Outstanding at Fiscal Tax Increment Beginning of Fiscal Year Principal Interest Total Sewer Revenue Water Revenue Financing Year 2019 7,780,000 1,273,639 9,053,639 6,674,450 1,789,854 589,335 42,850,000 2020 4,215,000 1,056,400 5,271,400 2,876,800 1,802,965 591,635 35,070,000 2021 4,390,000 899,161 5,289,161 2,877,425 1,823,041 588,695 30,855,000 2021 5,460,000 744,165 6,204,165 2,812,500 1,836,190 1,555,475 26,465,000 2023 4,950,000 562,315 5,512,315 2,137,125 1,852,145 1,523,045 21,005,000 2024 2,850,000 436,171 3,286,171 - 1,800,826 1,485,345 16,055,000 2025 2,430,000 373,577 2,803,577 1,351,082 1,452,495 13,205,000 2026 1,665,000 320,589 1,985,589 561,244 1,424,345 10,775,000 2027 990,000 280,725 1,270,725 - 1,270,725 9,110,000 2028 895,000 250,365 1,145,365 1,145,365 8,120,000 2029 915,000 222,495 1,137,495 1,137,495 7,225,000 2030 940,000 193,820 1,133,820 1,133,820 6,310,000 2031 965,000 164,325 1,129,325 1,129,325 5,370,000 2032 995,000 133,950 1,128,950 1,128,950 4,405,000 2033 815,000 102,300 917,300 917,300 3,410,000 2034 840,000 77,850 917,850 917,850 2,595,000 2035 865,000 52,650 917,650 917,650 1,755,000 2036 890,000 26,700 916,700 - - 916,700 890,000 Total $ 42,850,000 $ 7,171,197 $ 50,0219197 $ 17,378,300 $ 12,817,347 $ 19,825,550 131 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 $ 19,825,550 134 CITY OF IOWA CITY, IOWA DEMOGRAPHIC AND ECONOMIC STATISTICS Last Ten Calendar Years 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 Emolovees Rank Percentage Employees Rank Percentage 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 1 I 1 I I I I 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 1 1 1 1 1 1 1 1 1 Acreage 395 395 411 411 411 418 418 418 418 418 Sources: Various city divisions. 138 Compliance Section Tab Bohnsack & Frommelt 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 Bohnsack & Frommelt 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. &An4att, ., -XVm� zt p 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 � � 1 7A III CITY OF IOWA CITY 4I0 East Washington Street Iowa City, Iowa 52240-1826 (3 19) 356-5000 (319) 356-5009 FAX www.icg,ov.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 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 APPENDIX B DESCRIBING BOOK -ENTRY -ONLY ISSUANCE 1. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds (the "Securities"). The Securities will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully - registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. 2. DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a S&P Global Ratings rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security (`Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book -entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Its City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to any Tender/Remarketing Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to any Tender/Remarketing Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book - entry credit of tendered Securities to any Tender/Remarketing Agent's DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 11. The City may decide to discontinue use of the system of book -entry -only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. IM City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 APPENDIX C DRAFT FORM OF OPINION OF BOND COUNSEL C-1 Ahlers & Cooney, P.C. A H L E R S C O O N E Y Attorneys at Law 100 Court Avenue, Suite 600 A T T O R N E Y S Des Moines, Iowa 50309-2231 Phone: 515-243-7611 Fax: 515-243-2149 www.ahlerslaw.com DRAFT We hereby certify that we have examined a certified transcript of the proceedings of the City Council and acts of administrative officers of the City of Iowa City, State of Iowa (the "Issuer"), relating to the issuance of General Obligation Bonds, Series 2020, by said City, dated , 2020, in the denomination of $5,000 or multiples thereof, in the aggregate amount of $ (the 'Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion as bond counsel. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the resolution authorizing issuance of the Bonds (the "Resolution") and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we are of the opinion, under existing law, as follows: 1. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the Bonds. 2. The Bonds are valid and binding general obligations of the Issuer. 3. All taxable property in the territory of the Issuer is subject to ad valorem taxation without limitation as to rate or amount to pay the Bonds. Taxes have been levied by the Resolution for the payment of the Bonds and the Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Bonds to the extent the necessary funds are not provided from other sources. 4. Interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. The opinion set forth in the preceding sentence is subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such Wishard & Baily — 1888, Guernsey & Baily —1893, Baily & Stipp — 1901, Stipp, Perry, Bannister & Starzinger— 1914, Bannister, Carpenter, Ahlers & Cooney — 1950, Ahlers, Cooney, Dorweiler, Allbee, Haynie & Smith — 1974, Ahlers, Cooney, Dorweiler, Haynie, Smith & Allbee, P.C. — 1990 City of Iowa City, State of Iowa $ General Obligation Bonds, Series 2020 Page 2 requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. We express no opinion regarding the accuracy, adequacy, or completeness of the Official Statement or other offering material relating to the Bonds. Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. The rights of the owners of the Bonds and the enforceability of the Bonds are limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally, and by equitable principles, whether considered at law or in equity. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Respectfully submitted, 01702676-1\10714-135 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 APPENDIX D DRAFT CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Iowa City, State of Iowa (the "Issuer"), in connection with the issuance of $ General Obligation Bonds, Series 2020 (the "Bonds") dated June 1, 2020. The Bonds are being issued pursuant to a Resolution of the Issuer approved on May 19, 2020 (the "Resolution"). The Issuer covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate; Interpretation. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2 -12(b)(5). This Disclosure Certificate shall be governed by, construed and interpreted in accordance with the Rule, and, to the extent not in conflict with the Rule, the laws of the State. Nothing herein shall be interpreted to require more than required by the Rule. Section 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Financial Information" shall mean financial information or operating data of the type included in the final Official Statement, provided at least annually by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Business Day" shall mean a day other than a Saturday or a Sunday or a day on which banks in Iowa are authorized or required by law to close. "Dissemination Agent" shall mean the Issuer or any Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Financial Obligation" shall mean a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with S.E.C. Rule 15c2-12. "Holders" shall mean the registered holders of the Bonds, as recorded in the registration books of the Registrar. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "Municipal Securities Rulemaking Board" or "MSRB" shall mean the Municipal Securities Rulemaking Board, 13001 Street NW, Suite 1000, Washington, DC 20005. "National Repository" shall mean the MSRB's Electronic Municipal Market Access website, a/k/a "EMMA" (emma.msrb.org). "Official Statement" shall mean the Issuer's Official Statement for the Bonds, dated 52020. "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. D-1 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 "Rule" shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission (S.E.C.) under the Securities Exchange Act of 1934, and any guidance and procedures thereunder published by the S.E.C., as the same may be amended from time to time. "State" shall mean the State of Iowa. Section 3. Provision of Annual Financial Information. a) The Issuer shall, or shall cause the Dissemination Agent to, not later than two hundred tend (2 10) days after the end of the Issuer's fiscal year (presently June 30th), commencing with information for the 2019/2020 fiscal year, provide to the National Repository an Annual Financial Information filing consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Financial Information filing must be submitted in such format as is required by the MSRB (currently in "searchable PDF" format). The Annual Financial Information filing may be submitted as a single document or as separate documents comprising a package. The Annual Financial Information filing may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Financial Information filing and later than the date required above for the filing of the Annual Financial Information if they are not available by that date. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). b) If the Issuer is unable to provide to the National Repository the Annual Financial Information by the date required in subsection (a), the Issuer shall send a notice to the Municipal Securities Rulemaking Board, if any, in substantially the form attached as Exhibit A. c) The Dissemination Agent shall: i. each year file Annual Financial Information with the National Repository; and ii. (if the Dissemination Agent is other than the Issuer), file a report with the Issuer certifying that the Annual Financial Information has been filed pursuant to this Disclosure Certificate, stating the date it was filed. Section 4. Content of Annual Financial Information. The Issuer's Annual Financial Information filing shall contain or incorporate by reference the following: a) The last available audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under State law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with generally accepted accounting principles, noting the discrepancies therefrom and the effect thereof. If the Issuer's audited financial statements for the preceding years are not available by the time Annual Financial Information is required to be filed pursuant to Section 3(a), the Annual Financial Information filing shall contain unaudited financial statements of the type included in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Financial Information when they become available. b) A table, schedule or other information prepared as of the end of the preceding fiscal year, of the type contained in the final Official Statement under the captions: ■ Debt Limit. ■ Direct Debt. ■ General Obligation Debt. ■ Statement of Bonded Indebtedness. ■ Other Obligations. ■ Percentages for Taxable Valuation After Rollbacks. D-2 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 ■ Building Permits. ■ Property Valuations and Trend of Valuations -Actual (100%) Valuations for the City. ■ Property Valuations and Trend of Valuations -Taxable ("Rollback") Valuations for the City. ■ Levies and Tax Collections. ■ Larger Taxpayers. ■ Tax Rates. ■ Statement of Net Position -Governmental Activities. ■ Statement of Activities -Governmental Activities. ■ Balance Sheet -General Fund. ■ Statement of Revenues, Expenditures and Changes in Fund Balance -General Fund. ■ Pensions. ■ Other Post -Employment Benefits (OPEB). Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been filed with the National Repository. The Issuer shall clearly identify each such other document so included by reference. Section 5. Reporting of SiSignificant Events. a) Pursuant to the provisions of this Section, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not later than 10 Business Days after the day of the occurrence of the event: i. Principal and interest payment delinquencies; ii. Non-payment related defaults, if material; iii. Unscheduled draws on debt service reserves reflecting financial difficulties; iv. Unscheduled draws on credit enhancements relating to the Bonds reflecting financial difficulties; v. Substitution of credit or liquidity providers, or their failure to perform; vi. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the Series Bonds, or material events affecting the tax-exempt status of the Bonds; vii. Modifications to rights of Holders of the Bonds, if material; viii. Bond calls (excluding sinking fund mandatory redemptions), if material, and tender offers; ix. Defeasances of the Bonds; x. Release, substitution, or sale of property securing repayment of the Bonds, if material; xi. Rating changes on the Bonds; xii. Bankruptcy, insolvency, receivership or similar event of the Issuer; D-3 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 xiii. The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; xiv. Appointment of a successor or additional trustee or the change of name of a trustee, if material; xv. Incurrence of a Financial Obligation of the Issuer, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the Issuer, any of which affect security holders, if material; and xvi. Default, event of acceleration, termination event, modification of terms or other similar events under the terms of a Financial Obligation of the Issuer, any of which reflect financial difficulties. b) Whenever the Issuer obtains the knowledge of the occurrence of a Listed Event, the Issuer shall determine if the occurrence is subject to notice only if material, and if so shall as soon as possible determine if such event would be material under applicable federal securities laws. c) If the Issuer determines that knowledge of the occurrence of a Listed Event is not subject to materiality, or determines such occurrence is subject to materiality and would be material under applicable federal securities laws, the Issuer shall promptly, but not later than 10 Business Days after the occurrence of the event, file a notice of such occurrence with the Municipal Securities Rulemaking Board through the filing with the National Repository. Section 6. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure Certificate with respect to each Series of Bonds shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds of that Series or upon the Issuer's receipt of an opinion of nationally recognized bond counsel to the effect that, because of legislative action or final judicial action or administrative actions or proceedings, the failure of the Issuer to comply with the terms hereof will not cause Participating Underwriters to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended. Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Issuer. Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: a) If the amendment or waiver relates to the provisions of Section 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. D-4 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the next Annual Financial Information filing, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Financial Information filing or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Financial Information filing or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any fixture Annual Financial Information filing or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Certificate. Direct, indirect, consequential and punitive damages shall not be recoverable by any person for any default hereunder and are hereby waived to the extent permitted by law. A default under this Disclosure Certificate shall not be deemed an event of default under the Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Section 13. Rescission Rights. The Issuer hereby reserves the right to rescind this Disclosure Certificate without the consent of the Holders in the event the Rule is repealed by the S.E.C. or is ruled invalid by a federal court and the time to appeal from such decision has expired. In the event of a partial repeal or invalidation of the Rule, the Issuer hereby reserves the right to rescind those provisions of this Disclosure Certificate that were required by those parts of the Rule that are so repealed or invalidated. Date: day of 92020. ATTEST: LIN City Clerk CITY OF IOWA CITY, STATE OF IOWA Mayor D-5 City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 EXHIBIT A NOTICE TO NATIONAL REPOSITORY OF FAILURE TO FILE ANNUAL FINANCIAL INFORMATION Name of Issuer: City of Iowa City, Iowa. Name of Bond Issue: $ General Obligation Bonds, Series 2020 Dated Date of Issue: June 1, 2020 NOTICE IS HEREBY GIVEN that the Issuer has not provided Annual Financial Information with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certificate delivered by the Issuer in connection with the Bonds. The Issuer anticipates that the Annual Financial Information will be filed by Dated: day of , 20 CITY OF IOWA CITY, STATE OF IOWA By: Its: 01702802-1\10714-135 D-6 OFFICIAL BID FORM City of Iowa City 410 E. Washington Street Iowa City, Iowa 52240 City Council Members: May 5, 2020 Speer Financial, Inc. Facsimile: (319) 291-8628 For the $12,145,000* General Obligation Bonds, Series 2020 (the "Bonds"), of the City of Iowa City, Johnson County, Iowa (the "City"), as described in the annexed Official Terms of Offering, which is expressly made a part of this bid, we will pay you $ (no less than $12,047,840). The Bonds are to bear interest at the following respective rates (each a multiple of 1/8 or 1/100 of 1%) for the Bonds of each designated maturity. AMOUNTS* AND MATURITIES — JUNE 1 $3,600,000.........2021 % $805,000............2024 % $790,000............2028 % 1,800,000 ......... 2022 % 790,000 ............ 2025 % 790,000 ............ 2029 % 1,200,000 ......... 2023 % 790,000 ............ 2026 % 790,000 ............ 2030 % 790,000 ............ 2027 % Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. Maturities: Term Maturity Maturities: Term Maturity Maturities: Term Maturity Maturities: Term Maturity *Subject to principal adjustment in accordance with the Official Terms of Offering. In submitting this bid, we represent that (i) this bid constitutes a firm offer to purchase the Bonds, and (ii) we have an established industry reputation for underwriting new issuances of municipal bonds and notes. The Bonds are to be executed and delivered to us in accordance with the terms of this bid accompanied by the approving legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa. The City will pay for the legal opinion. The Purchaser agrees to pay the fee charged by the CUSIP Service Bureau and will accept the Bonds with the CUSIP numbers as entered on the Bonds. As evidence of our good faith, if we are the winning bidder, we will wire transfer the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time to the City's good faith bank and under the terms provided in the Official Terms of Offering for the Bonds. Alternatively, we have wire transferred or enclosed herewith a check payable to the City in the amount of the Deposit under the terms provided in the Official Terms of Offering for the Bonds. Attached hereto is a list of members of our account on whose behalf this bid is made. Form of Deposit (Check One) Account Manager Information Bidders Option Insurance Prior to Bid Opening: Certified/Cashier's Check Wire Transfer Underwriter/Bank [] [ ] Address Within TWO Hours of Bid Opening: Wire Transfer [ ] Amount: $242,900 Authorized Rep City State/Zip Direct Phone ( 1 FAX Number E -Mail Address We have purchased insurance from: Name of Insurer (Please fill in) Premium: Maturities: (Check One) Ll Years Ll All The foregoing bid was accepted and the Bonds sold by resolution of the City on May 5, 2020, and receipt is hereby acknowledged of the good faith Deposit which is being held in accordance with the terms of the annexed Official Terms of Offering. ATTEST: CITY OF IOWA CITY JOHNSON COUNTY, IOWA City Clerk Mayor -------------NOT PART OF THE BID----------- - Calculation of true interest cost) Gross Interest $ Less Premium/Plus Discount $ True Interest Cost $ True Interest Rate TOTAL BOND YEARS 49,570.00 AVERAGE LIFE 4.082 Years City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 OFFICIAL TERMS OF OFFERING $12,145,000* CITY OF IOWA CITY Johnson County, Iowa General Obligation Bonds, Series 2020 The City of Iowa City, Johnson County, Iowa, (the "City"), will receive electronic bids on the SpeerAuction ("SpeerAuction") website address "www.SpeerAuction.com" for its $12,145,000* General Obligation Bonds, Series 2020 (the "Bonds"), on an all or none basis between 10:30 A.M. and 11:00 A.M., C.D.T., Tuesday, May 5, 2020. To bid electronically, bidders must have: (1) completed the registration form on the SpeerAuction website, and (2) requested and received admission to the City's sale (as described below). Award will be made or all bids rejected at a meeting of the City on that date. The City reserves the right to reject all bids, to reject any bid proposal not conforming to this Official Terms of Offering, and to waive any irregularity or informality with respect to any bid. Additionally, the City reserves the right to modify or amend this Official Terms of Offering; however, any such modification or amendment shall not be made less than twenty-four (24) hours prior to the date and time for receipt of bids on the Bonds and any such modification or amendment will be announced on the Amendments Page of the SpeerAuction webpage and through Thomson Municipal News. The Bonds will constitute valid and legally binding obligations of the City payable both as to principal and interest from ad valorem taxes levied against all taxable property within the corporate limits of the City without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors' rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion. *ADJUSTMENTS TO PRINCIPAL AMOUNT AFTER DETERMINATION OF BEST BID. The aggregate principal amount of the Bonds, and each scheduled maturity thereof, are subject to increase or reduction by the City or its designee after the determination of the Winning Bidder. The City may increase or decrease each maturity in increments of $5, 000, but the total amount to be issued will not exceed $12,145, 000. Interest rates specified by the Winning Bidder for each maturity will not change. Final adjustments shall be in the sole discretion of the City. The dollar amount of the purchase price proposed by the Winning Bidder will be changed if the aggregate principal amount of the Bonds is adjusted as described above. Any change in the principal amount of any maturity of the Bonds will be made while maintaining, as closely as possible, the Winning Bidder's net compensation, calculated as a percentage of bond principal. The Winning Bidder may not withdraw or modify its bid as a result of any post -bid adjustment. Any adjustment shall be conclusive, and shall be binding upon the Winning Bidder. Establishment of Issue Price (10% Test May Apply if Competitive Sale Requirements are Not Satisfied) (a) The winning bidder shall assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at closing an "issue price" or similar certificate setting forth the reasonably expected initial offering price to the Public or the sales price or prices of the Bonds, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit A to this Notice of Sale, with such modifications as may be appropriate or necessary, in the reasonable judgment of the winning bidder, the City and Ahlers & Cooney, P.C. ("Bond Counsel"). All actions to be taken by the City under this Notice of Sale to establish the issue price of the Bonds may be taken on behalf of the City by the City's municipal advisor and any notice or report to be provided to the City may be provided to Speer Financial, Inc., Chicago, Illinois ("Speer'). City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 (b) The City intends that the provisions of Treasury Regulation Section 1.148-1(f)(3)(i) (defining "competitive sale" for purposes of establishing the issue price of the Bonds) will apply to the initial sale of the Bonds (the "competitive sale requirements") because: (i) the City shall disseminate this Notice of Sale to potential Underwriters in a manner that is reasonably designed to reach potential Underwriters; (ii) all bidders shall have an equal opportunity to bid; (iii) the City may receive bids from at least three Underwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds; and (iv) the City anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to purchase the Bonds at the lowest true interest cost, as set forth in this Notice of Sale. Any bid submitted pursuant to this Notice of Sale shall be considered a firm offer for the purchase of the Bonds, as specified in the bid. (c) In the event that the competitive sale requirements are not satisfied, the City shall so advise the winning bidder. The City will not require bidders to comply with the "hold -the -offering -price rule" and therefore does not intend to use the initial offering price to the Public as of the Sale Date of any maturity of the Bonds as the issue price of that maturity, though the winning bidder may elect to apply the "hold the offering price rule" (as described below). Bids will not be subject to cancellation in the event that the competitive sale requirements are not satisfied. Unless a bidder intends to apply the "hold -the -offering -price rule" as described below, bidders should prepare their bids on the assumption that all of the maturities of the Bonds will be subject to the 10% test (as described below) in order to establish the issue price of the Bonds. If the competitive sale requirements are not satisfied, the 10% test shall apply to determine the issue price of each maturity of the Bonds unless the winning bidder shall request that the "hold -the -offering -price rule" (as described below) shall apply. The winning bidder must notify Speer of its intention to apply the "hold -the -offering -price rule" at or prior to the time the Bonds are awarded. (i) If the winning bidder does not request that the "hold -the -offering -price rule" apply to determine the issue price of the Bonds, the following two paragraphs shall apply: The City shall treat the first price at which 10% of a maturity of the Bonds (the "10% test") is sold to the Public as the issue price of that maturity, applied on a maturity -by -maturity basis. The winning bidder shall advise the City if any maturity of the Bonds satisfies the 10% test as of the date and time of the award of the Bonds. Until the 10% test has been satisfied as to each maturity of the Bonds, the winning bidder agrees to promptly report to the City the prices at which the unsold Bonds of that maturity have been sold to the Public. That reporting obligation shall continue, whether or not the closing date has occurred, until the 10% test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold to the Public. In addition, if the 10% test has not been satisfied with respect to any maturity of the Bonds prior to closing, then the purchaser shall provide the City with a representation as to the price of prices, as of the date of closing, at which the purchaser reasonably expects to sell the remaining Bonds of such maturity. City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 (ii) If the winning bidder does request that the "hold -the -offering -price rule" apply to determine the issue price of the Bonds, the following three paragraphs shall apply: The City may determine to treat (i) pursuant to the 10% test, the first price at which 10% of a maturity of the Bonds is sold to the Public as the issue price of that maturity and/or (ii) the initial offering price to the Public as of the Sale Date of any maturity of the Bonds as the issue price of that maturity (the "hold -the -offering - price rule"), in each case applied on a maturity -by -maturity basis. The winning bidder shall advise the City if any maturity of the Bonds satisfies the 10% test as of the date and time of the award of the Bonds. The City shall promptly advise the winning bidder, at or before the time of award of the Bonds, which maturities of the Bonds shall be subject to the 10% test or shall be subject to the hold -the - offering -price rule or both. Bids will not be subject to cancellation in the event that the City determines to apply the hold -the -offering -price rule to any maturity of the Bonds. By submitting a bid, the winning bidder shall (i) confirm that the Underwriters have offered or will offer the Bonds to the Public on or before the date of award at the offering price or prices (the "initial offering price"), and (ii) agree, on behalf of the Underwriters participating in the purchase of the Bonds, that the Underwriters will neither offer nor sell unsold Bonds of any maturity to which the hold -the -offering -price rule shall apply to any person at a price that is higher than the initial offering price to the Public during the period starting on the Sale Date and ending on the earlier of the following: (1) the close of the fifth business day after the Sale Date; or (2) the date on which the Underwriters have sold at least 10% of that maturity of the Bonds to the Public at a price that is no higher than the initial offering price to the Public. The City acknowledges that, in making the representation set forth above, the winning bidder will rely on (i) the agreement of each Underwriter to comply with the hold -the -offering -price rule, as set forth in an agreement among Underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of the Bonds to the Public, the agreement of each dealer who is a member of the selling group to comply with the hold -the -offering - price rule, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an Underwriter is a party to a retail distribution agreement that was employed in connection with the initial sale of the Bonds to the Public, the agreement of each broker-dealer that is a party to such agreement to comply with the hold -the -offering -price rule, as set forth in the retail distribution agreement and the related pricing wires. The City further acknowledges that each Underwriter shall be solely liable for its failure to comply with its agreement regarding the hold -the -offering -price rule and that no Underwriter shall be liable for the failure of any other Underwriter, or of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement to comply with its corresponding agreement regarding the hold -the - offering -price applicable to the Bonds. City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 (d) By submitting a bid, each bidder confirms that: (i) any agreement among Underwriters, any selling group agreement and each retail distribution agreement (to which the bidder is a party) relating to the initial sale of the Bonds to the Public, together with the related pricing wires, contains or will contain language obligating each Underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such retail distribution agreement, as applicable, to (a) report the prices at which it sells to the Public the unsold Bonds of each maturity allotted to it until it is notified by the winning bidder that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the Public and (b) comply with the hold -the -offering -price rule, if applicable, in each case if and for so long as directed by the winning bidder and as set forth in the related pricing wires which shall be at least until the 10% test has been satisfied as to the Bonds of that maturity or until the close of the fifth business day following the date of the award, and (ii) any agreement among Underwriters relating to the initial sale of the Bonds to the Public, together with the related pricing wires, contains or will contain language obligating each Underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Bonds to the Public to require each broker-dealer that is a party to such retail distribution agreement to (a) report the prices at which it sells to the Public the unsold Bonds of each maturity allotted to it until it is notified by the winning bidder or such Underwriter that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the Public and (b) comply with the hold -the -offering -price rule, if applicable, in each case if and for so long as directed by the winning bidder or such Underwriter and as set forth in the related pricing wires, which shall be at least until the 10% test has been satisfied as to the Bonds of that maturity or until the close of the fifth business day following the date of the award. (e) Sales of any Bonds to any person that is a Related Party to an Underwriter shall not constitute sales to the Public for purposes of this Notice of Sale. Further, for purposes of this Notice of Sale: (i) "Public" means any person other than an Underwriter or a Related Party, (ii) "Underwriter" means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public including, specifically, the purchaser, and (b) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public), (iii) a purchaser of any of the Bonds is a "Related Party" to an Underwriter if the Underwriter and the purchaser are subject, directly or indirectly, to (i) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and (iv) "Sale Date" means the date that the Bonds are awarded by the City to the winning bidder. City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Bond Details The Bonds will be in fully registered form in the denominations of $5,000 and integral multiples thereof in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, to which principal and interest payments on the Bonds will be paid. Individual purchases will be in book -entry form only. Interest on each Bond shall be paid by check or draft of the Bond Registrar to the person in whose name such Bond is registered at the close of business on the fifteenth day of the month next preceding an interest payment date on such bond. The principal of the Bonds shall be payable in lawful money of the United States of America at the principal office maintained for the purpose by the Bond Registrar in St. Paul, Minnesota. Semiannual interest is due June 1 and December 1 of each year, commencing December 1. 2020 and is payable by U.A. Bank, N.A., St. Paul, Minnesota (the "Bond Registrar"). The Bonds are dated the date of delivery (expected to be on or about June 1, 2020). AMOUNTS* AND MATURITIES — JUNE 1 $3,600,000 .....................2021 $805,000 ........................2024 $790,000 ....................... 2028 1,800,000 .....................2022 790,000 ........................2025 790,000 ....................... 2029 1,200,000 .....................2023 790,000 ........................2026 790,000 ....................... 2030 790,000 ........................2027 Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. The Bonds due June 1, 2021 - 2026, inclusive, are non -callable. The Bonds due June 1, 2027 - 2030, inclusive, are callable in whole or in part and on any date on or after June 1, 2026, at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in any order of maturity as determined by the City and within any maturity by lot. Method of Bidding Electronically Notwithstanding the fact that the City permits receiving bids electronically using SpeerAuction, all bidders must have a signed, but uncompleted, Official Bid Form delivered to Speer Financial, Inc., Suite 608, 531 Commercial Street, Waterloo, Iowa, (319) 291-8628 facsimile, prior to the close of bidding to which a printout of the electronic bid will be attached and delivered to the City. If bidding electronically, all -or -none bids must be submitted via the internet address www.SpeerAuction.com. The use of SpeerAuction shall be at the bidder's risk and expense and the City shall have no liability with respect thereto, including (without limitation) liability with respect to incomplete, late arriving and non -arriving bids. To bid via the SpeerAuction webpage, bidders must first visit the SpeerAuction webpage where, if they have not previously registered with either SpeerAuction, Grant Street Group (the "Auction Administrator") or any other website administered by the Auction Administrator, they may register and then request admission to bid on the Bonds. Bidders will be notified prior to the scheduled bidding time of their eligibility to bid. Only registered broker-dealers and dealer banks with DTC clearing arrangements will be eligible to bid electronically. The "Rules" of the SpeerAuction bidding process may be viewed on the SpeerAuction webpage and are incorporated herein by reference. Bidders must comply with the Rules of SpeerAuction in addition to the requirements of the City's Official Terms of Offering. In the event the Rules of SpeerAuction and this Official Terms of Offering conflict, this Official Terms of Offering shall be controlling. All electronic bids must be submitted on the SpeerAuction webpage. Electronic bidders may change and submit bids as many times as they choose during the sale period but may not delete a submitted bid. The last bid submitted by an electronic bidder before the deadline for receipt of bids will be compared to all other final bids to determine the winning bidder. During the bidding, no bidder will see any other bidder's bid nor the status of their bid relative to other bids (e.g., whether their bid is a leading bid). The electronic bidder bears all risk of transmission failure. Any questions regarding bidding on the SpeerAuction website should be directed to Grant Street Group at (412) 391-5555 x 370. City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 Each bidder shall be solely responsible for making necessary arrangements to access SpeerAuction for purposes of submitting its internet bid in a timely manner and in compliance with the requirements of the Terms of Offering. The City is permitting bidders to use the services of the SpeerAuction solely as a communication mechanism to conduct the internet bidding and the SpeerAuction is not an agent of the City. Provisions of the Terms of Offering and Official Bid Form shall control in the event of conflict with information provided by the Internet Bid System. Bidding Parameters and Award of the Bonds All interest rates must be in multiples of one-eighth or one one-hundredth of one percent (1/8 or 1/100 of 1%), and not more than one rate for a single maturity shall be specified. The differential between the highest rate bid and the lowest rate bid shall not exceed three percent (3%). All bids must be for all of the Bonds and must be for not less than $12,047,840. Award of the Bonds: The Bonds will be awarded on the basis of true interest cost, determined in the following manner. True interest cost shall be computed by determining the annual interest rate (compounded semi-annually) necessary to discount the debt service payments on the Bonds from the payment dates thereof to the dated date and to the bid price. For the purpose of calculating true interest cost, the Bonds shall be deemed to become due in the principal amounts and at the times set forth in the table of maturities set forth above. In the event two or more qualifying bids produce the identical lowest true interest cost, the winning bid shall be the bid that was submitted first in time on the SpeerAuction webpage or if all such bids are not submitted electronically, the winning bid shall be determined by lot. The Bonds will be awarded to the bidder complying with the terms of this Official Terms of Offering whose bid produces the lowest true interest cost rate to the City as determined by the City's Registered Municipal Advisor, which determination shall be conclusive and binding on all bidders; provided, that the City reserves the right to reject all bids or any non -conforming bid and reserves the right to waive any informality in any bid. Electronic bidders should verify the accuracy of their final bids and compare them to the winning bids reported on the SpeerAuction Observation Page immediately after the bidding. The premium or discount, if any, is subject to pro rata adjustment if the maturity amounts of the Bonds are changed, maintaining, as close as possible, the same dollar amount of profit per $1,000 bond as bid. The true interest cost of each electronic bid will be computed by SpeerAuction and reported on the Observation Page of the SpeerAuction webpage immediately following the date and time for receipt of bids. These true interest costs are subject to verification by the City's Municipal Advisor, will be posted for information purposes only and will not signify an actual award of any bid or an official declaration of the winning bid. The City or its Municipal Advisor will notify the bidder to whom the Bonds will be awarded, if and when such award is made. The winning bidder will be required to make the standard filings and maintain the appropriate records routinely required pursuant to MSRB Rules G-8, G-11 and G-36. The winning bidder will be required to pay the standard MSRB charge for Bonds purchased. In addition, the winning bidder who is a member of the Securities Industry and Financial Markets Association ("SIFMA") will be required to pay SIFMA's standard charge per Bond. Good Faith Deposit and Other Matters The winning bidder is required to a wire transfer from a solvent bank or trust company to the City's good faith bank the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time as evidence of the good faith of the bidder. Alternatively, a bidder may submit its Deposit upon or prior to the submission of its bid in the form of a certified or cashier's check on, or a wire transfer from, a solvent bank or trust company for TWO PERCENT OF PAR payable to the Treasurer of the City. The City reserves the right to award the Bonds to a winning bidder whose wire transfer is initiated but not received within such two hour time period provided that such winning bidder's federal wire reference number has been received. In the event the Deposit is not received as provided above, the City may award the Bonds to the bidder submitting the next best bid provided such bidder agrees to such award. City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 If a wire transfer is used for the Deposit, it must be sent according to the following wire instructions: Amalgamated Bank of Chicago Corporate Trust 30 North LaSalle Street 38t' Floor Chicago, IL 60602 ABA # 071003405 Credit To: 3281 Speer Bidding Escrow RE: City of Iowa City, Johnson County, Iowa bid for $12,145,000* General Obligation Bonds, Series 2020 If the wire shall arrive in such account prior to the date and time of the sale of the Bonds. Contemporaneously with such wire transfer, the prospective purchaser shall send an email to biddingescrow@aboc.com with the following information: (1) indication that a wire transfer has been made, (2) the amount of the wire transfer, (3) the issue to which it applies, and (4) the return wire instructions if such prospective purchaser is not awarded the Bonds. The City and any prospective purchaser who chooses to wire the Deposit hereby agree irrevocably that Speer Financial, Inc. ("Speer") shall be the escrow holder of the Deposit wired to such account subject only to these conditions and duties: (i) if the bid is not accepted, Speer shall, at its expense, promptly return the Deposit amount to the unsuccessful prospective purchaser; (ii) if the bid is accepted, the Deposit shall be forwarded to the City, (iii) Speer shall bear all costs of maintaining the escrow account and returning the funds to the prospective purchaser; (iv) Speer shall not be an insurer of the Deposit amount and shall have no liability except if it willfully fails to perform, or recklessly disregards, its duties specified herein; and (v) income earned on the Deposit, if any, shall be retained by Speer. The City covenants and agrees to enter into a written agreement, certificate or contract, constituting an undertaking (the "Disclosure Covenants") to provide ongoing disclosure about the City for the benefit of the beneficial owners of the Bonds on or before the date of delivery of the Bonds as required under Section (b)(5) of Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The Disclosure Covenants shall be as described in the Official Statement, with such changes as may be agreed in writing by the Underwriter. The Underwriter's obligation to purchase the Bonds shall be conditioned upon the City delivering the Disclosure Covenants on or before the date of delivery of the Bonds. The Bonds will be delivered to the successful purchaser against full payment in immediately available funds as soon as they can be prepared and executed, which is expected to be on or about June 1, 2020. Should delivery be delayed beyond sixty (60) days from the date of sale for any reason beyond the control of the City except failure of performance by the purchaser, the City may cancel the award or the purchaser may withdraw the good faith deposit and thereafter the purchaser's interest in and liability for the Bonds will cease. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts, and interest rates of the Bonds, and any other information required by law or deemed appropriate by the City, shall constitute a "Final Official Statement" of the City with respect to the Bonds, as that term is defined in the Rule. By awarding the Bonds to any underwriter or underwriting syndicate, the City agrees that, no more than seven (7) business days after the date of such award, it shall provide, without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded, up to 50 copies of the Final Official Statement to permit each "Participating Underwriter" (as that term is defined in the Rule) to comply with the provisions of such Rule. The City shall treat the senior managing underwriter of the syndicate to which the Bonds are awarded as its designated agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter executing and delivering an Official Bid Form with respect to the Bonds agrees thereby that if its bid is accepted by the City it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 By submission of its bid, the senior managing underwriter of the successful purchaser agrees to supply all necessary pricing information and any Participating Underwriter identification necessary to complete the Official Statement within 24 hours after award of the Bonds. Additional copies of the Final Official Statement may be obtained by Participating Underwriters from the printer at cost. Electronic Transcripts: Purchaser consents to the receipt of electronic transcripts and acknowledges the City's intended use of electronically executed documents. Iowa Code chapter 554D establishes electronic signatures have the full wight and legal authority as manual signatures. The City will, at its expense, deliver the Bonds to the purchaser in New York, New York (or arrange for "FAST" delivery) through the facilities of DTC and will pay for the bond attorney's opinion. At the time of closing, the City will also furnish to the purchaser the following documents, each dated as of the date of delivery of the Bonds: (1) the legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa, that the Bonds are lawful and enforceable obligations of the City in accordance with their terms; (2) the opinion of said attorneys that the interest on the Bonds is exempt from federal income taxes as and to the extent set forth in the Official Statement for the Bonds; and (3) a no litigation certificate by the City. The City has authorized the printing and distribution of an Official Statement containing pertinent information relative to the City and the Bonds. Copies of such Official Statement or additional information may be obtained from Mr. Dennis Bockenstedt, Finance Director, City of Iowa City, 410 E. Washington Street, Iowa City, Iowa 52240 or an electronic copy of this Official Statement is available from the www.speerfinancial.com website under "Official Statement Sales/Competitive Calendar" or from the Registered Municipal Advisor to the City, Speer Financial, Inc., 531 Commercial Street, Suite 608, Waterloo, Iowa 50701 (telephone (319) 291-2077), and One North LaSalle Street, Suite 4100, Chicago, Illinois 60602 (telephone (312) 346-3700). Iffy 7 01►1►I K11 1.11101 114 01►Gy1101711 Finance Director CITY OF IOWA CITY Johnson County, Iowa City of Iowa City, Johnson County, Iowa $12,145,000* General Obligation Bonds, Series 2020 EXHIBIT A EXAMPLE ISSUE PRICE CERTIFICATE [from bond counsel] USE FOR COMPETITIVE SALES — 3 BIDS RECEIVED EXHIBIT A $ General Obligation Bonds, Series 2020 of Iowa City, Iowa ISSUE PRICE CERTIFICATE The undersigned, on behalf of [NAME OF UNDERWRITER] ("Purchaser"), hereby certifies as set forth below with respect to the sale of the above -captioned obligations (the "Bonds"). 1. Reasonably Expected Initial Offering Price. (a) As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the Public by Purchaser are the prices listed in Schedule A (the "Expected Offering Prices"). The Expected Offering Prices are the prices for the Maturities of the Bonds used by Purchaser in formulating its bid to purchase the Bonds. Attached as Schedule B is a true and correct copy of the bid provided by Purchaser to purchase the Bonds. (b) Purchaser was not given the opportunity to review other bids prior to submitting its bid. (c) The bid submitted by Purchaser constituted a firm offer to purchase the Bonds. 2. Defined Terms. (a) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (b) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (c) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is May 5, 2020. (d) Underwriter means (i) the Purchaser or any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Purchaser's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer and its agents with respect to certain of the representations set forth in the Tax Exemption Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Ahlers & Cooney, P.C. in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. [UNDERWRITER] In Name: Dated: [ISSUE DATE] SCHEDULE A EXPECTED OFFERING PRICES (Attached) SCHEDULE B COPY OF UNDERWRITER'S BID (Attached) USE FOR GENERAL RULE 10%- PUBLIC SALE EXHIBIT A $ General Obligation Bonds, Series 2020 of Iowa City, Iowa ISSUE PRICE CERTIFICATE The undersigned, on behalf of [NAME OF UNDERWRITER] ("Purchaser"), on behalf of itself, hereby certifies as set forth below with respect to the sale and issuance of the above -captioned obligations (the "Bonds"). 1. Sale of the Bonds. As of the date of this certificate, for each Maturity of the Bonds, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A. Defined Terms. (a) Issuer means the Iowa City, Iowa, a municipal corporation in the State of Iowa. (b) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (c) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) Underwriter means (i) the Purchaser or any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Purchaser's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer and its agents with respect to certain of the representations set forth in the Tax Exemption Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Ahlers & Cooney, P.C., as Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. [Signature Page Follows] [UNDERWRITER] By: Name: Dated: [ISSUE DATE] SCHEDULE A SALE PRICES (Attached) [USE IF SOME MATURITIES SUBJECT TO HOLD THE PRICE, OTHERS 10% RULE] EXHIBIT A $ General Obligation Bonds, Series 2020 of Iowa City, Iowa ISSUE PRICE CERTIFICATE The undersigned, on behalf of [NAME OF UNDERWRITER] ("Purchaser"), on behalf of itself, hereby certifies as set forth below with respect to the sale and issuance of the above -captioned obligations (the "Bonds"). 1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A. 2. Initial Offering Price of the Hold -the -Offering -Price Maturities. (a) Purchaser offered the Hold -the -Offering -Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the "Initial Offering Prices") on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B. (b) As set forth in the Notice of Sale and bid award, Purchaser has agreed in writing that, (i) for each Maturity of the Hold -the -Offering -Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the "hold -the -offering -price rule"), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold -the -offering -price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold -the -Offering -Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period. Defined Terms. (a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the "General Rule Maturities." (b) Hold -the -Offering -Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the "Hold -the -Offering -Price Maturities." (c) Holding Period means, with respect to a Hold -the -Offering -Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date ([DATE]), or (ii) the date on which Purchaser has sold at least 10% of such Hold -the -Offering -Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold -the -Offering - Price Maturity. (d) Issuer means the Iowa City, Iowa, a municipal corporation in the State of Iowa. (e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. (f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is May 5, 2020. (h) Underwriter means (i) the Purchaser or any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Purchaser's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer and its agents with respect to certain of the representations set forth in the Tax Exemption Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Ahlers & Cooney, P.C., Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. [UNDERWRITER] By: Name: Dated: [ISSUE DATE] SCHEDULE A SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING PRICES OF THE HOLD -THE -OFFERING -PRICE MATURITIES (Attached) SCHEDULE B PRICING WIRE OR EQUIVALENT COMMUNICATION 01628184-1\11310-132 ITEMS TO INCLUDE ON AGENDA CITY OF IOWA CITY, IOWA ICS April 21, 2020 The City Council of the City of Iowa City, State of Iowa, met via electronic means, an in- person meeting have been deemed to be impossible or impractical in accordance with Iowa law, in session, at M., on the above date. There were present Mayor , in the chair, and the following named Council Members: -1- Council Member introduced the following Resolution entitled "RESOLUTION DIRECTING THE ADVERTISEMENT FOR SALE OF $12,145,000* (SUBJECT TO ADJUSTMENT PER TERMS OF OFFERING) GENERAL OBLIGATION BO S, SERIES 2020, AND APPROVING ELECTRONIC BIDDING PROCEDURES ND DISTR UTION OF PRELIMINARY OFFICIAL STATEMENT" and moved its ado on. Council ember seconded the Resolution to adopt. The was called and the vot was, 0 NAYS: Whereupon, the Mayor declared he resolution duV adopted as follows: RESOLUTION DIRECTIN TH SALE OF $12,145,000* (SUB TERMS OF OFFERING) GENE SERIES 2020, AND APPROVIN PROCEDURES AND DISTRIBh OFFICIAL STATEMENT / WHEREAS, the Issuer is in need AD ERTISEMENT FOR F ADJUSTMENT PER OBLIGATION BONDS, ECTRONIC BIDDING 'IO OF PRELIMINARY to pay cost\of the opening, widening, extending, grading and drainage of the ri t -of --way of streets, ' hways, avenues, alleys, and public grounds; the construction, recons uction, and repairing of y street and streetscape improvements, with related utility wor , traffic control devices, lig 'ng, sidewalks, and the acquisition of real estate for such pur oses; the rehabilitation and imp vement of parks already owned, including facilities, equipm nt and improvements commonly fo din city parks; equipping the fire department, an the acquisition, development and impr vement of an Infrastructure Asset Manageme software program suitable for automatedapping and facilities management, essenti corporate purpose(s), and it is deemed necess ry and advisable that General Obligation Bon , to the amount of Not to Exceed $11,600,000 be authorized for said purpose(s); and WHEREAS, pur ant to notice published as required by Section 384.25 of the Code of Iowa, this Council has eld a public meeting and hearing upon the proposal to institute proceedings for the isace ance of the Bonds, and the Council is therefore now authorized to proceed with the iss of said Bonds for such purpose(s); and WHEREAS, the City is in need of funds to pay costs of improvements to and equipping of the Mercer Park Pool, general corporate purpose(s), and it is deemed necessary and advisable -2- that General Obligation Bonds, to the amount of Not to Exceed $700,000 be authorized for said purpose(s); and WHEREAS, the Issuer has a population of more than 5,000 but not more than 75,000, and the Bonds for these purposes do not exceed $700,000; and WHEREAS, pursuant to notice published as required by Sectio 384.26 of the Code of Iowa, the Council of the City has held public meeting and hearing up n the proposal to institute proceedings for the issuance of Bonds for general corporate purpos s) in the amounts as above set forth, and, no petition for referendum having been received, t Council is therefore now authorized to proceed with the issuance of said Bonds for such rpose(s); and WHEREAS, pu uant to Section 384.28 of the Code f Iowa, it is hereby found and determined that the vario general obligation bonds autho zed as hereinabove described shall be combined for the purpose f issuance in a single issue f $12,145,000* (Subject to Adjustment per Terms of Offer' g) General Obligation onds as hereinafter set forth; and WHEREAS, in conjunction 'th its Munici 1 Advisor, Speer Financial, the City has caused a Preliminary Official Statemen to be pre red outlining the details of the proposed sale of the Bonds; and WHEREAS, the Council has receive i ormation from its Municipal Advisor evaluating and recommending the procedure hereina r des c 'bed for electronic bidding to maintain the integrity and security of the competitive dding pro ss and to facilitate the delivery of bids by interested parties; and WHEREAS, the Council de s it in the best intere s of the City and the residents thereof to receive bids to purchase uch Bonds by means of ectronic internet communication. NOW, THEREFORE, IT RESOLVED BY THE CI COUNCIL OF THE CITY OF IOWA CITY, STATE OF OWA: Section 1. That the eceipt of electronic bids through the Speer uction Competitive Bidding System describe in the Notice of Sale and Official Statement i ereby found and determined to provider sonable security and to maintain the integrity otIW competitive bidding process, and to facilitate the delivery of bids by interested parties in�nnection with the offering at public sale. Section 2. That General Obligation Bonds, Series 2020, of City of Iowa City, State of Iowa, in the amount of $12,145,000* (Subject to Adjustment per Terms of Offering), to be issued as referred to in the preamble of this Resolution, to be dated June 1, 2020, be offered for sale pursuant to the published advertisement. Section 3. That the preliminary Official Statement in the form presented to this meeting be and the same hereby is approved as to form and deemed final for purposes of Rule 15c2-12 of the Securities and Exchange Commission, subject to such revisions, corrections or modifications as the Mayor and City Clerk, upon the advice of bond counsel, disclosure counsel, and the City's -3- Municipal Advisor, shall determine to be appropriate, and is authorized to be distributed in connection with the offering of the Bonds for sale. Section 4. That the Cleric is hereby directed to publish notice of sale of the Bonds at least once, the last one of which shall be not less than four clear days nor more than twenty days before the date of the sale. Publication shall be made in the Iowa City Press -Citizen, a legal newspaper, printeolly in the English language, published within the county in which the Bonds are to be offe d for sale or an adjacent county. The notice is given pursuant to Chapter 75 of the Code of Iow\oned hall state that this Council, on the Sty' day of May, 2020, at 7:00 P.M., will hold a meeteceive and act upon bids for said Bonds, whit ids were previously received anby City Officials at 11:00 A.M. on said te. The notice shall be in substantially the folform: 4- (To be published on April 23, 2020) NOTICE OF BOND SALE Time and Method of Bids: Bids for the sale of Bonds of the City of Iowa City, State of Iowa (the "Issuer"), as hereafter described, must be received in the manner set forth below in accordance tth the official Terms of Offering on the 5th day of May, 2020 before 11:00 A.M. The bids wihen be reviewed and referred for action to the meeting of the City Council in conformity withghe Terms of Offering. The Bonds: Ne Bonds to be offered are the following: GENERAL BLIGATION BONDS, SERIES 2020 m the amount of $12,145,00 *, to be dated June 1, 2020 (the " nds") *Subject to principal adjustment p suant to official Terms f Offering. Manner of Bidding: Open bids will noXCita ds will be received in the following method: • Electronic Internet Biddnternet bids will be received at the office of the Finance Director E.Washington, Iowa City, Iowa 52440. The bidsmust be submiPEERAUCTION competitive bidding system. Consideration of Bids: After e time for receiptdbids has passed, electronic Internet bids will be accessed and annot. Sale and Award: The s e and award of the Bonds will e at a meeting of the City Council on the above date at :00 P.M. City Hall is currently clos d to the public because of the coronavirus. If City Hall r ains closed to the public, the meeting ill be an electronic meeting using the Zoom Meeting latform. For information on how to parti 'pate in the electronic meeting, see www.ic o .or /councildocs or telephone the City Clerk 319/356-5043. The Issuer has issued an Official Statement pertaining to the Bonds to b offered, including a statement of the Terms of Offering aN an Official Bid Form, which is ' -rporated by reference as a part of this notice. The Official Statement may be obtained by r quest addressed to the City Clerk, City Hall, 410 E. Washington, Iowa City, Iowa 52440 or t Issuer's Municipal Advisor, Speer Financial, 531 Commercial Street, Waterloo, Iowa, 5 03, Telephone (319) 291-2077. Terms of Offering: All bids shall be in conformity with and the sale shall be in accordance with the Terms of Offering as set forth in the Official Statement. Legal Opinion: The Bonds will be sold subject to the opinion of Ahlers & Cooney, P.C., Attorneys of Des Moines, Iowa, as to the legality and their opinion will be furnished together -5- with the printed Bonds without cost to the purchaser and all bids will be so conditioned. Except to the extent necessary to issue their opinion as to the legality of the Bonds, the attorneys will not examine or review or express any opinion with respect to the accuracy or completeness of document aterials or statements made or furnished in connection with the sale, issuance or marketing of t Bonds. Rights Reserved: The right is reserved to reject any or all bids, and to waive any irregularities as deemed to be in the best interests of the public. By order of the Citi Council of the City of Iowa Cid, State of Iowa. City,�Clerk, City of Iowa City, State of Iowa (End of/Notice) CERTIFICATE STATE OF IOWA ) ) SS COUNTY OF JOHNSON ) I, the undersigned City Clerk of the City of Iowa City, S to of Iowa, do hereby certify that attac d is a true and complete copy of the portion of the cords of the City showing proceedings f the Council, and the same is a true and comp ete copy of the action taken by the Council with Spec'to the matter at the meeting held on t e date indicated in the attachment, which proceedi s remain in full force and effect, and h e not been amended or rescinded in any way; that mee 'ng and all action thereat was duly d publicly held in accordance with a notice of meeting an tentative agenda, a copy of wh' h was timely served on each member of the Council and poste n a bulletin board or other rominent place easily accessible to the public and clearly designa d for that purpose at t e principal office of the Council pursuant to the local rules of the Counci nd the provisions f Chapter 21 Code of Iowa upon reasonable advance notice to the public an edia at the meeting as required by law an%thtn certify that the individuals namedtheir respective City offices as ind be stated in the proceedings, and that no threatened involving the incorporation or right of the individuals named therei as c f Y wenty-four hours prior to the commencement of ers of the public present in attendance; I further on the date thereof duly and lawfully possessed of in, that no Council vacancy existed except as may oversy or litigation is pending, prayed or Yation, existence or boundaries of the City or the their respective positions. WITNESS my hand and7 seal of the Counc' hereto affixed this day of 52020. City Clerk, CINX of Iowa City, State of Iowa (SEAL) CERTIFICATE STATE OF IOWA ) ) SS COUNTY OF JOHNSON ) I, the undersigned, do hereby certify that I am now and was at e times hereinafter e m mentioned, thy qualified and acting Clerk of the City of Iowa ty, in the County of Johnson, State of wa, and that as such Clerk and by full authori from the Council of the City, I have caused a ($12,145,00 NOTICE OF BOND eject to Adjustment per Obligation Bonds, Serj of which the clipping annexed to th ublisher's a correct and complete copy, to be pu fished as legal newspaper published at least once eekly, published regularly and mailed through the ost and which has had for more than two years a laws of the United States, and has a general rc published in all of the issues thereof publis ed a WITNESS my official signat>�fe this (SEAL) 01706530-1110714-135 E .rms of Offering) General 2020) fficjAvit hereto attached is in words and figures fired by law in the Iowa City Press -Citizen, a inted wholly in the English language, ffice of current entry for more than two years i fide paid circulation recognized by the postal ation in the City, and that the Notice was Nrculated on the following date: 2020. City Clerk, City 2020. Iowa City, State of Iowa ITEMS TO INCLUDE ON AGENDA CITY OF IOWA CITY, IOWA Late Handouts Distributed t{-- 2-1 -2-0 (Date) $12,145,000* (Subject to Adjustment per Terms of Offering) General Obligation Bonds, Series 2020 Resolution directing the advertisement for sale and approving electronic bidding procedures and Distribution of Preliminary Official Statement_ April 21, 2020 The City Council of the City of Iowa City, State of Iowa, met via electronic means, an in- person meeting have been deemed to be impossible or impractical in accordance with Iowa law, in session, at .M., on the above date. There were present Mayor. , in the chair, and the following named Council Members: -I- Council Member _ introduced the following Resolution entitled "RESOLUTION DIRECTING THE ADVERTISEMENT FOR SALE OF $12,145,000* (SUBJECT TO ADJUSTMENT PER TERMS OF OFFERING) GENERAL OBLIGATION BONDS, SERIES 2020, AND APPROVING ELECTRONIC BIDDING PROCEDURES AND DISTRIBUTION OF PRELIMINARY OFFICIAL STATEMENT" and moved its adoption. Council Member seconded the Resolution to adopt. The roll was called and the vote was, AYES: NAYS: Whereupon, the Mayor RESOLUTION D SALE OF $12,145,000* TERMS OF OFFERIN SERIES 2020, AND PP PROCEDURES DIS OFFICIAL STAT�MENT ion duly adopted as follows: THE ADVERTISEMENT FOR 1JECT TO ADJUSTMENT PER RAL OBLIGATION BONDS, G ELECTRONIC BIDDING IBUTJON OF PRELIMINARY WHEREAS, the Issuepas in need of funds to pay osts of the opening, widening, extending, grading and drai ge of the right-of-way of str , highways, avenues, alleys, and public grounds; the cons tion, reconstruction, and repairin of any street and streetscape improvements, with relate utility work, traffic control devices, ' ting, sidewalks, and the acquisition of real estate,lor such purposes; the rehabilitation and' rovement of parks already owned, including facilities, equipment and improvements commonly and in city parks; equipping the fire department; and the acquisition, development and im rovement of an Infrastructure Asset Management software program suitable for automat mapping and facilities management, essential corporate purpose(s), and it is deemed ne essary and advisable that General Obligion Bonds, to the amount of Not to Exceed $11,600,060 be authorized for said purpose(s); an WHEREA , pursuant to notice published as required by Section 384.25 of the Code of Iowa, this Council he held a public meeting and hearing upon the proposal to institute proceedings for the issuance of the Bonds, and the Council is therefore now authorized to proceed with the issuance of said Bonds for such purpose(s); and WHEREAS, the City is in need of funds to pay costs of improvements to and equipping of the Mercer Park Pool, general corporate purpose(s), and it is deemed necessary and advisable -2- that General Obligation Bonds, to the amount of Not to Exceed $700,000 be authorized for said purpose(s); and WHEREAS, the Issuer has a population of more than 5,000 but not more than 75,000, and the Bonds for these purposes do not exceed $700,000; and WHEREAS, pursuant to notice published as required by Section 384.26 of the Code of Iowa, the Council of the City has held public meeting and hearing upon the proposal to institute proceedings for %Zun ce of Bonds for general corporate purpose(s) in the amounts as above set forth, and, noor referendum having been received, the Cq�incil is therefore now authorized to prothe issuance of said Bonds for such purp se(s); and WHEREAS, pursuaht to Section 3 84.28 of the Code of I a, it is hereby found and determined that the various geral obligation bonds authorize as hereinabove described shall be combined for the purpose of r uance in a single issue of y 2,145,000* (Subject to Adjustment per Terms of Offerineneral Obligation Bogds as hereinafter set forth; and WHEREAS, in conjunction wit 'ts Municipal visor, Speer Financial, the City has caused a Preliminary Official Statement t be prepare outlining the details of the proposed sale of the Bonds; and WHEREAS, the Council has received in ation from its Municipal Advisor evaluating and recommending the procedure hereinafter d c ed for electronic bidding to maintain the integrity and security of the competitive biddi g proc s and to facilitate the delivery of bids by interested parties; and WHEREAS, the Council deems it n the best interest of the City and the residents thereof to receive bids to purchase such onds by means of el tronic internet communication. NOW, THEREFORE, BE ITESOLVED BY THE CITY\OUNCIL OF THE CITY OF IOWA CITY, STATE OF IOW \\ Section 1. That the receipt of electronic bids through the SpeerAu 'on Competitive Bidding System described in the otice of Sale and Official Statement is h by found and determined to provide reasonab a security and to maintain the integrity of the repetitive bidding process, and to facilite the delivery of bids by interested parties in co tion with the offering at public sale. Section 2. That Genial Obligation Bonds, Series 2020, of City of Iowa City, State of Iowa, in the amount of $12,145,000* (Subject to Adjustment per Terms of Offering), to be issued as referred to in the preamble of this Resolution, to be dated June 1, 2020, be offered for sale pursuant to the published advertisement. Section 3. That the preliminary Official Statement in the form presented to this meeting be and the same hereby is approved as to form and deemed final for purposes of Rule 15c2-12 of the Securities and Exchange Commission, subject to such revisions, corrections or modifications as the Mayor and City Clerk, upon the advice of bond counsel, disclosure counsel, and the City's -3- Municipal Advisor, shall determine to be appropriate, and is authorized to be distributed in connection with the offering of the Bonds for sale. Section 4. That the Clerk is hereby directed to publish notice of sale of the Bonds at least once, the last one of which shall be not less thanYI:OO r da nor more than twenty days before the date of the sale. Publication shall be e owa City Press -Citizen, a legal newspaper, printed wholly in the English languaed within the county in which the Bonds are be offered for sale or an adjacent ca notice is given pursuant to Chapter 75 of the Co of Iowa, and shall state that this n the 5a' day of May, 2020, at 7:00 P.M., will hold a eeting to receive and act uposaid Bonds, which bids were previously received d opened by City OfficialA.M. on said date. The notice shall be in substantially the folling form: -4- (To be published on April 24, 2020) NOTICE OF BOND SALE Time and Method of Bids: Bids for the sale of Bonds of he City of Iowa City, State of Iowa (the "Iss re"), as hereafter described, must be received i the manner set forth below in accordance with he official Terms of Offering on the 5th/dao�May, 2020 before 11:00 A.M. The bids will then be, reviewed and referred for action to eeting of the City Council in conformity with the Terms of Offering. The Bonds: The Bonds to be offered are the GENERAL OBLIGATION BON S, SERIES 2020, in the amount of $12,145,000*, to be dated J 1, 2020 (the "Bonds") *Subject to principal adjustment "IR uant to/4fficial Terms of Offering. Manner of Bidding: Open bids will method: of the Finance Di The bids must be system. received. Bids will be received in the following ling. Electronic internet bids will be received at the office at Ci Hall, 410 E. Washington, Iowa City, Iowa 52440. tted t gh the SPEERAUCTION competitive bidding Consideration of Bids: After the time for reipt of bids has passed, electronic internet bids will be accessed and a unced. Sale and Award: e sale and award of the Bond will be at a meeting of the City Council on the above date t 7:00 P.M. City Hall is current closed to the public because of the coronavirus. If City Hall emains closed to the public, them ting will be an electronic meeting using the Zoom Meetings Platform. For information on how to articipate in the electronic meeting, see www.icgov. rlcouncildocs or telephone the City erk at 319/356-5043. Official Statement: The Issuer has issued an Official Statem nt of information pertaining to the Bonds to be offered, including a statement of the Terms of Offering and an Official Bid Form, which is incorporated by reference as a part of this notice. The Official Statement may be obtained by request addressed to the City Clerk, City Hall, 410 E. Washington, Iowa City, Iowa 52440 or the Issuer's Municipal Advisor, Speer Financial, 531 Commercial Street, Waterloo, Iowa, 50703, Telephone (319) 291-2077. Terms of Offering: All bids shall be in conformity with and the sale shall be in accordance with the Terms of Offering as set forth in the Official Statement. LeMl 1 Opinion: The Bonds will be sold subject to the opinion of Ahlers & Cooney, P.C., Attorneys of Des Moines, Iowa, as to the legality and their opinion will be furnished together -5- with the printed Bonds without cost to the purchaser and all bids will be so conditioned. Except to the extent necessary to issue their opinion as to the legality of the Bonds, the attorneys will not examine or review or express any opinion with respect to the accuracy or completeness of docume aterials or statements made or furnished in connection with the sale, issuance or marketing of e Bonds. Rights Res ed: The right is reserved to reject y or all bids, and to waive any irregularities as de ed to be in the best interests of tO public. By order of the ckty Council of the City o/Iowa City, State of Iowa. City Clerk, City of Iowa City, State of Iowa (End of Notice) M PASSED AND APPROVED this 21St day of April, 2020. AT -1 EST. City Clerk -7- CERTIFICATE STATE OF IOWA ) COUNTY OF JOHNSON SS ) I'th ndersigned City Clerk of the City of Iowa City, St of Iowa, do hereby certify that attached is true and complete copy of the portion of the r cords of the City showing proceedings of th Council, and the same is a true and comp to copy of the action taken by the Council with respec o the matter at the meeting held on a date indicated in the attachment, which proceedings re in in full force and effect, and h e not been amended or rescinded in any way; that meeting all action thereat was duly d publicly held in accordance with a notice of meeting and tent 've agenda, a copy of w ch was timely served on each member of the Council and posted on a ulletin board or othe prominent place easily accessible to the public and clearly designated r that purpose at a principal office of the Council pursuant to the local rules of the Council an the provisio of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and is at lea twenty-four hours prior to the commencement of the meeting as required by law and ith m bers of the public present in attendance; I further certify that the individuals named th in ere on the date thereof duly and lawfully possessed of their respective City offices as indicat erein, that no Council vacancy existed except as may be stated in the proceedings, and that ntroversy or litigation is pending, prayed or threatened involving the incorporati , org ization, existence or boundaries of the City or the right of the individuals named ther as offi ers to their respective positions. WITNESS my hand and a seal of the until hereto affixed this day of .2020. City`Vlerk, City of Iowa City, State of Iowa (SEAL) CERTIFICATE STATE OF IOWA ) ) SS COUNTY OF JOHNSON ) I, the under 'gned, do hereby certify that I am now d was at the times hereinafter mentioned, the duly alified and acting Clerk of the Cit f Iowa City, in the County of Johnson, State of Iowa, d that as such Clerk and by authority from the Council of the City, I have caused a NOTICE OF POND SALE ($12,145,000* (Su bje to Adjus ent per Terms of Offering) General Obli tion onds, Series 2020) of which the clipping annexed to the pubs is affidavit hereto attached is in words and figures a correct and complete copy, to be publ' hed a required by law in the Iowa City Press -Citizen, a legal newspaper published at least on weekly, nted wholly in the English language, published regularly and mailed thro gh the post o ce of current entry for more than two years and which has had for more than o years a bona fi paid circulation recognized by the postal laws of the United States, and ha a general circulatio the City, and that the Notice was published in all of the issues th eof published and circu ted on the following date: WITNESS my offipal signature this day (SEAL) 01706530-1110714-135 2020. City Clerk, City df Iowa City, State of Iowa. IS. ITEMS TO INCLUDE ON AGENDA CITY OF IOWA CITY, IOWA $12,145,000* (Subject to Adjustment per Terms of Offering) General Obligation Bonds, Series 2020 Resolution directing the advertisement for sale and approving electronic bidding procedures and Distribution of Preliminary Official Statement. NOTICE MUST BE GIVEN PURSUANT TO IOWA CODE CHAPTER 21 AND THE LOCAL RULES OF THE CITY. April 21, 2020 The City Council of the City of Iowa City, State of Iowa, met via electronic means, an in- person meeting have been deemed to be impossible or impractical in accordance with Iowa law, in regular session, at 7:00 P.M., on the above date. There were present Mayor Teague, in the chair, and the following named Council Members: Bergus, Mims, Salih, Taylor, Teague, Thomas, Weiner Absent: None Vacant: None -1- Council Member Mims introduced the following Resolution entitled "RESOLUTION DIRECTING THE ADVERTISEMENT FOR SALE OF $12,145,000* (SUBJECT TO ADJUSTMENT PER TERMS OF OFFERING) GENERAL OBLIGATION BONDS, SERIES 2020, AND APPROVING ELECTRONIC BIDDING PROCEDURES AND DISTRIBUTION OF PRELIMINARY OFFICIAL STATEMENT" and moved its adoption. Council Member Thomas seconded the Resolution to adopt. The roll was called and the vote was, AYES: Bergus, Mims, Salih, Taylor, Teague, Thomas, Weiner NAYS: None Whereupon, the Mayor declared the resolution duly adopted as follows: RESOLUTION NO. 20-102 RESOLUTION DIRECTING THE ADVERTISEMENT FOR SALE OF $12,145,000* (SUBJECT TO ADJUSTMENT PER TERMS OF OFFERING) GENERAL OBLIGATION BONDS, SERIES 2020, AND APPROVING ELECTRONIC BIDDING PROCEDURES AND DISTRIBUTION OF PRELIMINARY OFFICIAL STATEMENT WHEREAS, the Issuer is in need of funds to pay costs of the opening, widening, extending, grading and drainage of the right-of-way of streets, highways, avenues, alleys, and public grounds; the construction, reconstruction, and repairing of any street and streetscape improvements, with related utility work, traffic control devices, lighting, sidewalks, and the acquisition of real estate for such purposes; the rehabilitation and improvement of parks already owned, including facilities, equipment and improvements commonly found in city parks; equipping the fire department; and the acquisition, development and improvement of an Infrastructure Asset Management software program suitable for automated mapping and facilities management, essential corporate purpose(s), and it is deemed necessary and advisable that General Obligation Bonds, to the amount of Not to Exceed $11,600,000 be authorized for said purpose(s); and WHEREAS, pursuant to notice published as required by Section 384.25 of the Code of Iowa, this Council has held a public meeting and hearing upon the proposal to institute proceedings for the issuance of the Bonds, and the Council is therefore now authorized to proceed with the issuance of said Bonds for such purpose(s); and WHEREAS, the City is in need of funds to pay costs of improvements to and equipping of the Mercer Park Pool, general corporate purpose(s), and it is deemed necessary and advisable -2- that General Obligation Bonds, to the amount of Not to Exceed $700,000 be authorized for said purpose(s); and WHEREAS, the Issuer has a population of more than 5,000 but not more than 75,000, and the Bonds for these purposes do not exceed $700,000; and WHEREAS, pursuant to notice published as required by Section 384.26 of the Code of Iowa, the Council of the City has held public meeting and hearing upon the proposal to institute proceedings for the issuance of Bonds for general corporate purpose(s) in the amounts as above set forth, and, no petition for referendum having been received, the Council is therefore now authorized to proceed with the issuance of said Bonds for such purpose(s); and WHEREAS, pursuant to Section 384.28 of the Code of Iowa, it is hereby found and determined that the various general obligation bonds authorized as hereinabove described shall be combined for the purpose of issuance in a single issue of $12,145,000* (Subject to Adjustment per Terms of Offering) General Obligation Bonds as hereinafter set forth; and WHEREAS, in conjunction with its Municipal Advisor, Speer Financial, the City has caused a Preliminary Official Statement to be prepared outlining the details of the proposed sale of the Bonds; and WHEREAS, the Council has received information from its Municipal Advisor evaluating and recommending the procedure hereinafter described for electronic bidding to maintain the integrity and security of the competitive bidding process and to facilitate the delivery of bids by interested parties; and WHEREAS, the Council deems it in the best interests of the City and the residents thereof to receive bids to purchase such Bonds by means of electronic internet communication. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, STATE OF IOWA: Section 1. That the receipt of electronic bids through the SpeerAuction Competitive Bidding System described in the Notice of Sale and Official Statement is hereby found and determined to provide reasonable security and to maintain the integrity of the competitive bidding process, and to facilitate the delivery of bids by interested parties in connection with the offering at public sale. Section 2. That General Obligation Bonds, Series 2020, of City of Iowa City, State of Iowa, in the amount of $12,145,000* (Subject to Adjustment per Terms of Offering), to be issued as referred to in the preamble of this Resolution, to be dated June 1, 2020, be offered for sale pursuant to the published advertisement. Section 3. That the preliminary Official Statement in the form presented to this meeting be and the same hereby is approved as to form and deemed final for purposes of Rule 15c2-12 of the Securities and Exchange Commission, subject to such revisions, corrections or modifications as the Mayor and City Clerk, upon the advice of bond counsel, disclosure counsel, and the City's -3- Municipal Advisor, shall determine to be appropriate, and is authorized to be distributed in connection with the offering of the Bonds for sale. Section 4. That the Clerk is hereby directed to publish notice of sale of the Bonds at least once, the last one of which shall be not less than four clear days nor more than twenty days before the date of the sale. Publication shall be made in the Iowa City Press -Citizen, a legal newspaper, printed wholly in the English language, published within the county in which the Bonds are to be offered for sale or an adjacent county. The notice is given pursuant to Chapter 75 of the Code of Iowa, and shall state that this Council, on the 5a' day of May, 2020, at 7:00 P.M., will hold a meeting to receive and act upon bids for said Bonds, which bids were previously received and opened by City Officials at 11:00 A.M. on said date. The notice shall be in substantially the following form: (To be published on April 24, 2020) NOTICE OF BOND SALE Time and Method of Bids: Bids for the sale of Bonds of the City of Iowa City, State of Iowa (the "Issuer"), as hereafter described, must be received in the manner set forth below in accordance with the official Terms of Offering on the 5h day of May, 2020 before 11:00 A.M. The bids will then be reviewed and referred for action to the meeting of the City Council in conformity with the Terms of Offering. The Bonds: The Bonds to be offered are the following: GENERAL OBLIGATION BONDS, SERIES 2020, in the amount of $12,145,000*, to be dated June 1, 2020 (the "Bonds") *Subject to principal adjustment pursuant to official Terms of Offering. Manner of Bidding: Open bids will not be received. Bids will be received in the following method: Electronic Internet Bidding: Electronic internet bids will be received at the office of the Finance Director at City Hall, 410 E. Washington, Iowa City, Iowa 52440. The bids must be submitted through the SPEERAUCTION competitive bidding system. Consideration of Bids: After the time for receipt of bids has passed, electronic internet bids will be accessed and announced. Sale and Award: The sale and award of the Bonds will be at a meeting of the City Council on the above date at 7:00 P.M. City Hall is currently closed to the public because of the coronavirus. If City Hall remains closed to the public, the meeting will be an electronic meeting using the Zoom Meetings Platform. For information on how to participate in the electronic meeting, see www.icgov.org/councildocs or telephone the City Clerk at 319/356-5043. Official Statement: The Issuer has issued an Official Statement of information pertaining to the Bonds to be offered, including a statement of the Terms of Offering and an Official Bid Form, which is incorporated by reference as a part of this notice. The Official Statement may be obtained by request addressed to the City Clerk, City Hall, 410 E. Washington, Iowa City, Iowa 52440 or the Issuer's Municipal Advisor, Speer Financial, 531 Commercial Street, Waterloo, Iowa, 50703, Telephone (319) 291-2077. Terms of Offering: All bids shall be in conformity with and the sale shall be in accordance with the Terms of Offering as set forth in the Official Statement. Legal Opinion: The Bonds will be sold subject to the opinion of Ahlers & Cooney, P.C., Attorneys of Des Moines, Iowa, as to the legality and their opinion will be furnished together -5- with the printed Bonds without cost to the purchaser and all bids will be so conditioned. Except to the extent necessary to issue their opinion as to the legality of the Bonds, the attorneys will not examine or review or express any opinion with respect to the accuracy or completeness of documents, materials or statements made or furnished in connection with the sale, issuance or marketing of the Bonds. Rights Reserved: The right is reserved to reject any or all bids, and to waive any irregularities as deemed to be in the best interests of the public. By order of the City Council of the City of Iowa City, State of Iowa. City Clerk, City of Iowa City, State of Iowa (End of Notice) MR'M PASSED AND APPROVED this 211 day of April, 2020. ATTEST: City Clerk Ma or -7- CERTIFICATE STATE OF IOWA ) ) SS COUNTY OF JOHNSON ) I, the undersigned City Clerk of the City of Iowa City, State of Iowa, do hereby certify that attached is a true and complete copy of the portion of the records of the City showing proceedings of the Council, and the same is a true and complete copy of the action taken by the Council with respect to the matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty-four hours prior to the commencement of the meeting as required by law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective City offices as indicated therein, that no Council vacancy existed except as may be stated in the proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of the Council hereto affixed this 21st day of April, 2020. City Clerk, City of low City, State of Io (SEAL) CERTIFICATE STATE OF IOWA ) ) SS COUNTY OF JOHNSON ) I, the undersigned, do hereby certify that I am now and was at the times hereinafter mentioned, the duly qualified and acting Clerk of the City of Iowa City, in the County of Johnson, State of Iowa, and that as such Clerk and by full authority from the Council of the City, I have caused a I►[f711I[��]�:Z� ►]�i1T7.Y�iII ($12,145,000* (Subject to Adjustment per Terms of Offering) General Obligation Bonds, Series 2020) of which the clipping annexed to the publisher's affidavit hereto attached is in words and figures a correct and complete copy, to be published as required by law in the Iowa City Press -Citizen, a legal newspaper published at least once weekly, printed wholly in the English language, published regularly and mailed through the post office of current entry for more than two years and which has had for more than two years a bona fide paid circulation recognized by the postal laws of the United States, and has a general circulation in the City, and that the Notice was published in all of the issues thereof published and circulated on the following date: April 24, 2020. WITNESS my official signature this day of 1'1 AO.0A� 2020. (SEAL) 01706530-1\10914-135 City berk, City of Io 7 City, State of Io CITY CLERK CITY OF IOWA CITY ICPD 410 E WASHINGTON ST IOWA CITY IA 522401825 State of Wisconsin County of Brown, ss.: Pcif5➢�d@ PRESS -CITIZEN MEDIA PART OF THE USA TODAY NETWORK This is not an invoice # of Affidavits 1 AFFIDAVIT OF PUBLICATION The undersigned, being first duly sworn on oath, states that the Iowa City Press Citizen, a corporation duly organized and existing under the laws of the State of Iowa, with its principal place of business in Iowa City, Iowa, the publisher of Iowa City Press Citizen newspaper of general circulation printed and published in the City of Iowa City, Johnson County, Iowa, and tha an advertisement, a printed copy of which is attached as Exhibit "A" and made part of this affidavit, was printed and published in Iowa City Press Citizen on the following dates: Ad No. Start Date: Run Dates: Cost: 0004161480 4124120 0412412020 $61.77 Copy of Advertisement Exhibit "A" � �&t _'ZAC__ Subscr' ed and sworn to before me by said affiant this 24 day of AjjdL 2020 NANCY HEYRMAN Notary Public State of Wisconsin [tis Nota blic 5'15jc2j Commission expires Item Number: 16. �, CITY OF IOWA CITY -�"�'�� COUNCIL ACTION REPORT April 21, 2020 Resolution authorizing the redemption of Harrison Street Parking Ramp Master Lease Purchase Agreement and directing notice to be given. Prepared By: Dennis Bockenstedt, Finance Director Reviewed By: Geoff Fruin, City Manager Fiscal Impact: Interest expense savings from $902,578 up to $2,451,165 on the 2017 Parking System Lease Purchase Agreement Recommendations: Staff: Approval 1 •uu .1111111►/_1 Attachments: Resolution Executive Summary: This is a resolution for an early redemption of the 2017 Harrison Street Parking Ramp System Master Lease Purchase Agreement of $2,000,000. The resolution also allows the Finance Director to negotiate with Capital One Public Funding for an additional early call amount up to a full redemption. This lease purchase agreement was issued in April 2017 for $15,497,867 to purchase the Harrison Street Parking Garage and has a current outstanding balance of $9,413,024. Background /Analysis: In April 2017, the City entered into a Parking System Master Lease Purchase Agreement for $15,497,867 for the purchase of the Harrison Street Parking Ramp. As part of the agreement, the City has the option to prepay up to $2,000,000 of principal on June 1 of each year beginning in 2018. The City will exercise its option on June 1, 2020 to redeem the maximum amount allowable using part of the proceeds from the sale of the parking lot that was located at Court and Linn streets. The total interest expense savings on the $2,000,000 partial early redemption of the 2017 Parking System Master Lease Purchase Agreement is $902,578. In addition, the resolution allows the City's Finance Director to negotiate with Capital One for the ability to call additional principal on the lease early up to a full redemption of the outstanding balance. If redeemed in full, the interest expense savings would be $2,451,165 less any potential termination or prepayment fee that may be incurred. The purpose for an early call would be to allow the Parking Fund greater financial flexibility to manage the system's financial operations ATTACHMENTS: Description Resolution M ITEMS TO INCLUDE ON AGENDA CITY OF IOWA CITY, IOWA Resolution Authorizing the Redemption of Master Lease Purchase Agreement. NOTICE MUST BE GIVEN PURSUANT TO IOWA CODE CHAPTER 21 AND THE LOCAL RULES OF THE CITY. April 21, 2020 The City Council of the City of Iowa City, State of Iowa, met via electronic means, an in- person meeting have been deemed to be impossible or impractical in accordance with Iowa law due to the COVID-19 pandemic, in regular session, on the above date. There were present Mayor Teague, in the chair, and the following named Council Members: Bergus, Mims, Salih, Taylor, Teague, Thomas, Weiner Absent: None Vacant: None -1- Council Member Salih introduced the following Resolution entitled "RESOLUTION AUTHORIZING THE REDEMPTION OF MASTER LEASE PURCHASE AGREEMENT AND DIRECTING NOTICE BE GIVEN" and moved its adoption. Council Member Thomas seconded the motion to adopt. The roll was called and the vote was, AYES: Bergus, Mims, Salih, Taylor, Teague, Thomas, Weiner NAYS: None Whereupon, the Mayor declared the resolution duly adopted as follows: RESOLUTION NO 20-103 RESOLUTION AUTHORIZING THE REDEMPTION OF MASTER LEASE PURCHASE AGREEMENT AND DIRECTING NOTICE BE GIVEN WHEREAS, the City did by resolution dated June 16, 2015, authorize the issuance of a $15,497,867 Master Lease Purchase Agreement, as amended, modified and supplemented for the purpose of financing by the terms of the Agreement Regarding Assignment and Assumption of Lease Purchase Agreement dated as of July 6, 2015 (the "Lease"). WHEREAS, under Article 9 Subsection (a), Clause (vi) of the "Agreement Regarding Assignment and Assumption of Lease Purchase Agreement", the terms of which were incorporated into the Master Lease Purchase Agreement by Section 2 of the Joint Memorandum, dated April 11, 2017, the City may pay up to $2,000,000 of principal annually in addition to the regularly scheduled payment of the Lease; and WHEREAS, it is deemed necessary and advisable that $2,000,000 in principal be paid on June 1, 2020 in addition to the scheduled payment under the Lease and notice of partial redemption be given according to the terms of the resolution authorizing issuance of the Lease; and WHEREAS, in addition, the Council wishes to authorize the City Finance Director to negotiate redeeming up to the full amount of the Lease with the holder of the Lease. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, STATE OF IOWA: Section 1. That, in addition to the regularly scheduled payment on June 1, 2020, an additional payment in the principal amount of $2,000,000, be made on June 1, 2020. -2- Section 2. That, in addition, the City Finance Director or his delegates are hereby authorized to negotiate with the holder of the Lease to call and redeem an additional principal amount up to the full outstanding balance of the Lease, such amount to be determined by the City Finance Director, including any prepayment or termination fee or penalty as may be required in order to accomplish such redemption, in the discretion of the City Finance Director; and Section 3. The City Finance Director is hereby authorized and directed to cause notice of such additional $2,000,000 payment, along with a revised Exhibit "B" reflecting the additional principal payment, be given not less than thirty (30) days prior to June 1, 2020 and to cause notice of partial redemption to be mailed to the registered owner of the Lease by ordinary mail, the form of such notice to be substantially as set forth in this Resolution; and to provide notice of the redemption of any additional principal as negotiated with the holder of the Lease. Section 4. The City Finance Director is hereby authorized and directed to cause payment of the $2,000,000 additional principal payment, in the same manner, and at the same time, as the regular June 1, 2020 payment, under the Master Lease Purchase Agreement and related financing documents, and to make such additional principal payment and termination or prepayment fee as negotiated with the holder of the Lease. Section 5. That the form of such notice for the $2,000,000 redemption to be substantially as follows: -3- NOTICE OF $2,000,000 ADDITIONAL PRINCIPAL PAYMENT TO ASSIGNEE OF THE FOLLOWING DESCRIBED LEASE: Please take notice that $2,000,000 of principal, in addition to the regularly scheduled lease payment, will be made on June 1, 2020 as provided under Article X of the Master Lease Purchase Agreement, as amended by the Joint Memorandum dated April 11, 2017, to incorporate Article 4, Subsection (a), Clauses (iv), (v) and (vi) of the Agreement Regarding Assignment and Assumption of Lease Purchase Agreement. Issuer: City of Iowa City, State of Iowa Original Issue Amount: $15,497,$67 Lease Issue: Master Lease Purchase Agreement Payment Date: June 1, 2020 Additional Principal Payment Amount: $2,000,000 This represents a partial, $2,000,000, redemption of the outstanding principal amount under the Master Lease Purchase Agrecment. An amended. Exhibit "B" is hereby attached to reflect this additional payment. Finance Director Iowa C* , Iowa, (End of Notice) 10 Speer Financial, Inc. MEPEND MUNICIPAL ADWSOR8 City of Iowa City, Johnson County, Iowa $6,846,041.33 Parking System Lease Purchase Agreement 3.98% 20-Year- Capital One (April 9, 2020) Assuming $2m Early Redemption On 6-1-20 ♦4: FINAL +s Bond Balance Report Principal Tenminatlon Date Principal Coupon Interest Total P+I Balance Value 06/012020 - - - - 6,846,041.33 12/012020 - - 136,23622 136,236.22 6,846,04133 N/A 06/012021 589,548.90 3.980% 136,236.22 725,785.12 6,256,492.43 N/A 12/012021 - - 124,50420 124,504.20 6,256,492.43 N/A 06/012022 613,012.94 3.980% 124,50470 737,517.14 5,643,479.49 N/A 12/012022 - - 112,30524 112,30524 5,643,479.49 N/A 06/01/2023 637,410.86 3.980% 112,30524 749,716.10 5,006,068.63 N/A 12/012023 - - 99,620.77 99,620.77 5,006,068.63 N/A 061012024 662,779.81 3.980% 99,620.77 762,400.58 4,343,288.82 4,430,154.60 12/012024 - 86,431.45 86 431.45 4343 288 82 4,430,154.60 06/012025 689,158.45 3.980% 86,431.45 775,589.90 3,654,130.37 3,727,212.96 12/012025 - - 72,717.19 72,717.19 3,654,130.37 3,727,212.98 06/012026 716,586.95 3.980% 72,717.19 789,304.14 2,937,543.42 2,937,543.42 12/012026 - - 58,457.11 58,457.11 2,937,543.42 2,937,543.42 06/01/2027 745,107.11 3.980^A 58,457.11 803 56422 2,192,436.31 2192 436 31 12/012027 - - 43,629.48 43,629.48 2,192,436.31 2,192,436.31 06/012028 774,762.38 3.980% 43,629.48 818,391.86 1,417,673.93 1,417,673.93 12/012028 - - 28,211.71 26,211.71 1,417,673.93 1,417,673.93 06/012029 805,597.92 3.980% 28,211.71 833,809.63 612,076.01 612,076.01 12/012029 - 12,180.31 12,180.31 612,076.01 612,076.01 06/012030 612,076.01 3.980% 12,180.31 624,256.32 - TOW 56,846,041.33 51,548,58736 W94,62SA9 17KCIry Pk9RempReH s I SNO PUNPOSE I a9rzam 19;59AM Speer Financial, Inc. Independent Public Financial Advisors since 1954 PASSED AND APPROVED this 21" day of April, 2020 ATTEST: Ma r -5- CERTIFICATE STATE OF IOWA ) ) SS COUNTY OF JOHNSON ) I, the undersigned City Clerk of the City of Iowa City, State of Iowa, do hereby certify that attached is a true and complete copy of the portion of the records of the City showing proceedings of the Council, and the same is a true and complete copy of the action taken by the Council with respect to the matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effdct, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty-four hours prior to the commencement of the meeting as required by law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective City offices as indicated therein, that no Council vacancy existed except as may be stated in the proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of the Council hereto affixed this 21st day of April, 2020. City Clerk, City of IowkCity, State of (SEAL) oi7a7aos-1\1o71a-us Item Number: 17. AL CITY OF IOWA CITY =�c�- COUNCIL ACTION REPORT April 21, 2020 Resolution to procure professional services for prairie restoration Prepared By: Juli Seydell Johnson, Director of Parks & Recreation Reviewed By: Sarah Betlach, Purchasing Agent Sue Dulek, Assistant City Attorney Geoff Fruin, City Manager Fiscal Impact: This contract is for $244,019.00 and will be paid from the General Fund Natural Areas Maintenance budget, 10530225-432080. Recommendations: Staff: Approval Commission: None Attachments: Applied Ecological Services, Inc. Quote Location Maps Resolution Executive Summary: This resolution authorizes the Purchasing Division to procure professional services for prairie restoration at eighteen sites in Iowa City for a total establishment of 85.9 additional acres of prairie on City of Iowa City land. The project will be paid from from the Natural Areas budget of the Parks & Recreation Department. Background /Analysis: The 2017 Iowa City Natural Areas plan was a study and assess the functional, economic, recreational, and aesthetic value of the Iowa City Parks and Recreation system's natural areas. The plan identified several areas of park and other City -owned property that would benefit from prairie restorations. Replacing turf grass areas with prairie plantings follows recommendations made in the 2017 Iowa City Natural Areas Plan and supports the City of Iowa City Climate Action Plan by reducing mowing, preventing erosion, providing animal and pollinator habitat, and allowing for better infiltration of storm water. Areas chosen are not active use recreation areas but rather, target, low use areas that are difficult to maintain as turf grass. The City's Accelerating Climate Actions Report identifies several actions within the Adaptation section of the Climate Action and Adaptation Plan, including enhanced natural areas public education campaigns, continued efforts to mitigate floods and manage stormwater, and to continue implementation of the Natural Areas Master Plan. Furthermore, the Plan calls for equitable education and engagement with all populations in Iowa City. Expanding natural prairie access geographically throughout the community will increase opportunities to reach new populations. This contract is an extension of services provided through an RFP in 2019. AES, inc was chosen based on the merit of its proposal by an evaluation committee comprised of staff from the Parks & Recreation and Public Works departments. Locations and acres of prairie to be established at each (see attached maps for details): Benton Hill Park .2 acres Bloomington Prairie 2.7 acres Crandic Park 1.9 acres Happy Hollow Park .2 acres (Includes hillside but will not impact winter use.) Hunter's Run Park 5.8 acres Kiwanis Park 1.0 acre McCollister Prairie 1.8 acres Oakland Cemetery .5 acres Park Road Prairie 13.0 acres Scott Park 20.1 acres (includes hillside but will not impact winter use) Sturgis Ferry Park 6.7 acres Taft Speedway Prairie 8.0 acres Terrell Mill Park 4.2 acres Villa Park 3.5 acres (walking paths to be mowed) Walden Prairie 1.0 acre Waterworks Prairie 3.0 acres Willow Creek Park 9.7 acres (walking paths to be mowed) Wolfbrook Prairie 2.6 acres ATTACHMENTS: Description AES quote Map 1 Map 2 Map 3 Map 4 Map 5 Map 6 Map 7 Map 8 Map 9 Map 10 Map 11 Map 12 Map 13 Map 14 Map 15 Map 16 Map 17 Map 18 Resolution ■■■AI7�!■ ■^n, 1► 1 APPLIED i 1 W ECOLOGICAL OL". ' If, 02L.ImIN SERVICES Project Information Quote Iowa City Prairie Establishment (City Contract # PUR20-11) AES # 19-0466 March 31, 2020 Tyler Baird City of Iowa City 410 E. Washinton Street Iowa City, IA 52240-1826 Dear Mr. Baird, Thank you so much for the opportunity to submit a quote for seeding additional prairie areas around Iowa City. Sites would be billed on a lump sum basis as the first five sites were on the existing purchase order. We can provide a more detailed breakdown if needed. We will be happy to answer any questions that you may have about our proposal. Sincerely, Cody Johnson, Project Manager Applied Ecological Services, Inc. (815) 979-8092 cody.johnson@appliedeco.com Scope of Work and Estimate Chuck Campbell, Project Estimator Applied Ecological Services, Inc. (608) 897-8641 cacampbell@appliedeco.com Site Acres Total Amount Benton Hill Prairie 0.2 $1,342.00 Bloomington Prairie 2.7 $7,890.00 Crandic Prairie 1.9 $5,563.00 Happy Hollow Prairie 0.2 $1,120.00 Hunter's Run Prairie 5.8 $16,418.00 Kiwanis Prairie 1 $3,380.00 McCollister Prairie 1.8 $5,100.00 Oakland Cemetery Prairie 0.5 $2,020.00 Park Rd Prairie 13 $36,800.00 Scott Prairie 20.1 $55,260.00 Applied Ecological Services, Inc. Page 1 3/31/2020 Sturgis Ferry Prairie 6.7 $18,950.00 Taft Speedway Prairie 8 $21,440.00 Terrell Mill Prairie 4.2 $11,880.00 Villa Prairie 3.5 $9,907.00 Walden Prairie 1 $3,389.00 Waterworks Prairie 3 $8,760.00 Willow Creek Prairie 9.7 $27,440.00 Wolfbrook Prairie 2.6 $7,360.00 TOTAL PROJECT COST 85.9 $244,019.00 Anticipated Schedule: 151 Treatment — Early May 2020 2nd Treatment — August 2020 Seeding — September 2020 Note: Schedule is subject to change and is weather dependent. Notes: 1. This quote is governed by the terms and conditions of the City of Iowa City and proposal requirements of Request for Proposal 20-11, Prairie Establishment for the City of Iowa City Parks Division. 2. This quote represents phase 2: the addition of sites as permitted by RFP 20-11 and the same scope of work as phase 1. 3. This quote is valid for 60 days. 4. Quote is exclusive of sales tax. Client/Owner shall pay all applicable sales or use taxes, or provide AES with a sales tax exemption certificate to support any exemption. 5. The Owner/Client is required to pay for any required permits not included in this quote. 6. In an emergency, AES shall act in a reasonable manner to prevent personal injury or property damage. Any change in the Agreement price and/or time resulting from the actions of AES in an emergency situation shall be equitably adjusted. 7. Applied Ecological Services provides a one year guarantee on materials and workmanship. AES warrants that the work shall be free from material defects not intrinsic in the design or materials required in the Contract Documents, if any. Applied Ecological Service's warranty does not include remedies for defects or damages caused by normal wear and tear during normal usage, use for a purpose for which the project was not intended, improper or insufficient maintenance, modifications performed by the owner or others, or abuse. Applied Ecological Services warrants that all materials shall be new unless otherwise specified, of good quality, in conformance with the Contract Documents, if any, and free from defective workmanship. If within one year the owner does not promptly notify AES of defective work, the owner waives AES's obligation to correct any defective work as well as the owner's right to claim a breach of warranty with respect to that defective work. 8. Unless specifically covered in the Contract or in the warranty of another Applied Ecological Services Contract for site design on this project, Applied Ecological Services is not responsible for hydrology on the project site. Damage to seeding or planting installation, or other defective work, that is due to improper hydrology is excluded from any warranty under this Contract. Applied Ecological Services can remedy such damage, subject to additional cost, pursuant to a written modification of the Contract signed by both parties. 9. Payments to AES shall be made via Automated Clearing House (ACH) to AES' bank account using the information below. Please include invoice number(s) in remittance correspondence. If unable to make payments via ACH, checks made payable to "Applied Ecological Service, Inc." can be mailed to P.O. Box 256, Brodhead, WI 53520. Please indicate the AES invoice number(s) in check memo. Enclosures: n/a Bank Name: The Bank of New Glarus/Sugar River Bank Branch Bank Address: 2006 1St Center Ave, Brodhead, WI 53520 Routing Number: 075903912 Checking Account Number: 101753861 Applied Ecological Services, Inc. Page 2 3/31/2020 STAFF PRESENTATION TO FOLLOW: 1 r I C04;qui h CITY OF lOVVA CITY 410 East Washington Street Iowa City, Iowa S2240-1826 (319) 356-5000 (3I9) 356-5009 FAX www.icgov.org \ I` i� 1 l r N�1 sj ✓ , Y 14 1 STAFF PRESENTATION CONCLUDED � r rrM as � h CITY OF IOWA CITY 410 East Washington Strect Iowa City, Iowa 52240-1826 (3 19) 356-5000 (3 19) 356-5009 FAX www. icgov. o rg I. e © © 4 +: f�� Happy Hollow Prairie Total: 0.2 acres �GE Ion B �- �GE Ion ,a :� . Oakland Cemetery Prairie Total: 0.5 acres i 4 S'en T A it 9 we, _ Park Rd Prairie Total: 13.0 acres F PARK RD - Scott Prairie Total: 20.1 acres Sturgis Ferry Prairie Total: 6.7 acres fr IL D 2 A 41' 4 1 Taft Speedway Prairie Total:8 acres Villa Prairie Total: 3.5 acres For W- Willow Creek Prairie Total: 9.7 acres Ol 1 .Lis 1 1 1 _ a ' L Kellie Fruehling From: Paula Swygard <pswygard@gmail.com> Sent: Monday, April 20, 2020 11:50 AM To: Council; Pauline Taylor, Susan Mims; Bruce Teague; Mazahir Salih; Laura Bergus; Janice Weiner; John Thomas Subject: Proposal to seed Benton Hill Park Late Handouts Distributed ARIK L4 - Do �p (Date) I am writing to say that I am opposed to the proposal to seed the section of Benton Hill Park north of the shelter house to Benton Street as part of the prairie restoration project. This area of the park is used by park goers to picnic and play. To seed it as prairie would severely limit use of the park, which is not a big park to start with. Changes already made to Benton Hill Park without consultation with residents of the Miller Orchard Neighborhood or those who use the park have totally changed the character of the park designated as Reflect and Play in the Parks Master Plan. This will further erode use of the park. Paula Swygard 426 Douglass Street Iowa City, IA Kellie Fruehling From: Mary Knudson <mary_knudson@msn.com> Sent: Monday, April 20, 2020 12:41 PM Late Handouts Distributed To: Council Cc: PaulaS Subject: Benton Hill Park (Date) RISK Hi, I am writing as a resident of the Miller -Orchard neighborhood. I live at 725 West Benton Street, which sites just east of the park. We were just notified that the council will vote tomorrow night to take a great portion of the green space on that park and convert to prairie. I am frankly stunned that we were not contacted until the day before this. This neighborhood, one that has been considered vulnerable for years, worked for decades to acquire this park and then worked with the city under Terry Trueblood to design the park. We worked very hard to make it fit our needs. That green space to be take away is used by people for playing and picnicking. We already are below green space for our neighborhood, and with the loss of Roosevelt School, we feel that even more. I am upset also because in the past two years, the park people have made decisions regarding our park without talking with anyone. For example, the fence was taken away because the mowers felt it was a hazard. Yet, we wanted it to prevent people from running across Benton St. to the park. I was told by a city official (who I will not name but know) that the fence wasn't needed anymore because we don't have a neighborhood school anymore. But we still have people and families here. We have always felt overlooked here, and again, we see evidence why we feel that way. I ask you to vote against turning this green area in to prairie. At the very least, wait until you meet with us to change this. My phone number is 319 400-1151 in case you want to discuss this with me prior to tomorrow night. Thank you for your consideration, Mary Knudson Sent from Mail for Windows 10 I� Kellie Fruehling From: Joiner, Mei-ling A <mei-ling joiner@uiowa.edu> Sent: Monday, April 20, 2020 1:03 PM Late Handouts Distributed To: Council Subject: destruction of PIN garden on Benton St ! 1 (Date) Please do not seed the area north of the shelter house down towards Benton Street as part of their prairie restoration project. It is currently a successful and useful community garden project. Thank you, Mei-ling Joiner Talwrn Ct Iowa City 319-887-3597 Kellie Fruehling From: Sent: To: Subject: To: John Thomas Dear Mr. Thomas Eberl, Daniel F <daniel-eberl@uiowa.edu> Monday, April 20, 2020 1:11 PM Council Benton Street green area -±L- I-7 Late Handouts Distributed (Date) Please do not seed the green area north of the shelter house down towards Benton Street as part of their prairie restoration project. It is currently a successful and useful community garden project. Thank you, Daniel Eberl Talwrn Ct Iowa City 319-887-3597 1 Kellie Fruehling From: hdonta@mchsi.com Late Handouts Distributed Sent: Monday, April 20, 2020 1:27 PM To: Council Subject: Benton Hill Park - 20 - 2-D (Date) I was informed today that yet another change to Benton Hill Park has been proposed to convert the north section to prairie. There seems to have been no due process performed with the neighborhood before making this recommendation: i) Benton Hill Park was created using grant money and through the hard work of the neighborhood association. 2) No member of the neighborhood association was consulted about the park current usage or desire for prairie. g) The area of interest is way too small to house a true prairie nor is it a suitable location for one. 4) A portion of the park has already been repurposed without the neighborhood's input or consent Please stop marginalizing this neighborhood and provide some dialog with them and consider their long history of having to protect this park from intrusion. Before any decision is made, you should be talking with the neighborhood to see what they want and need. Best Regards, Helene Donta This email is from an external source. Ashley Platz From: Stiles, Jared L <jared -stiles@uiowa.edu> Sent: Monday, April 20, 2020 3:11 PM To: Council; Pauline Taylor; Susan Mims; Bruce Teague; Mazahir Salih; Laura Bergus; Janice Weiner; John Thomas Subject: Proposal to seed Benton Hill Park Late Handouts Distributed LA- ZC_� - ZD ARIK Hello. (Date) I am writing to say that I am opposed to the proposal to seed the section of Benton Hill Park north of the shelter house to Benton Street as part of the prairie restoration project. This area of the park is used by park goers to picnic and play. To seed it as prairie would severely limit use of the park, which is not a big park to start with. Changes already made to Benton Hill Park without consultation with residents of the Miller Orchard Neighborhood or those who use the park have totally changed the character of the park designated as Reflect and Play in the Parks Master Plan. This will further erode use of the park. I did not have much notice to write the above email, but am in agreeance with my neighbor, Paula. Thank you. Jared Stiles, MSL, RT(R)(T) 706 Miller Ave. Notice: This UI Health Care e-mail (including attachments) is covered by the Electronic Communications Privacy Act, 18 U.S.C. 2510-2521 and is intended only for the use of the individual or entity to which it is addressed, and may contain information that is privileged, confidential, and exempt from disclosure under applicable law. If you are not the intended recipient, any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please notify the sender immediately and delete or destroy all copies of the original message and attachments thereto. Email sent to or from UI Health Care may be retained as required by law or regulation. Thank you. Ashley Platz From: mmockaitis <mmockaitis@mchsi.com> Sent: Monday, April 20, 2020 3:15 PM To: council Late Handouts Distributed Subject: Benton Hill Park LA- Zo- 2ca (Date) Dear Members, The proposed changes to Benton Hill Park seen to be proceeding very rapidly. The area that would be returned to prairie, is used by children and families as a play area. I would suggest working with the neighborhood association to decide what is best for the people who use the park. Mary Mockaitis Sent from my Verizon, Samsung Galaxy smartphone Ashley Platz I� From: Sent: To: Cc: Subject: Hans Hoerschelman <hoerschelman@gmail.com> Monday, April 20, 2020 3:38 PM Council; Pauline Taylor, Susan Mims; Bruce Teague; Mazahir Salih; Laura Bergus; Janice Weiner, John Thomas Alicia Hoerschelman Benton Hill Park - Prairie Seeding Proposal r �isr� Greetings City Councilors and Staff, Late Handouts Distributed -q-2- Z� (Date) We write to oppose the proposed seeding of the majority of green space in Benton Hill Park to prairie plantings. While we understand this may lead to less need for mowing and likely hits some sort of sustainability or restorative benchmark, it severely limits the use of the already small park even further. As well, it is concerning to me that no community feedback was solicited prior to it appearing on the council docket for approval. Having read the initial documentation around the creation of the park, and having been a frequent (multiple times a week) user of the park with my family, we believe this proposal to be a detraction rather than an attraction. We are sure there is a more appropriate middle ground, as we are not opposed to a plot of prairie in the park, just not of the size that is currently proposed. Thank you and stay healthy. Hans and Alicia Hoerschelman 710 Miller Ave Ashley Platz Ar - From: letsknf@netscape.net Sent: Monday, April 20, 2020 3:45 PM To: council Late Handouts Distributee Subject: Please shelve or vote against the Benton Hill Park proposal A RISS -1-1 - (Date) I have just been informed --- one hour before the 4pm email deadline -- of this plan to fill in a large swath of the main usage area of our tiny neighborhood park with prairie plantings. This proposal has bypassed our neighborhood association and comes at a time we are still reeling from the aggressive deforestation and increased concretization of the park (including a huge sidewalk with an outside edge and excessive 14 feet from the curb, much of which caused the need for the wall). Prairie grass sounds a good idea for somewhere else, but not here. We who live here have been discussing planting trees to help make up for what we have lost since the to cohousing construction began. A a prairie plot sounds like something that would fit better on the big hill south of their gardens. It is crucial that our small working class neighborhood retain a true center (something we lost when Roosevelt school was closed) so we can be something other than a bunch of houses and apartments. If you care about our consent and support for the uses of our park, and not just exercising power over us, delay this vote and give us time to collectively respond to our park's local needs instead of what seems in effect a value imposed upon us from outside. Thank you. Lindsay Park 401 Douglass St. Iowa City IA 52246 Ashley Platz From: tyler luebke <tylerluebke@gmail.com> Sent: Monday, April 20, 2020 3:47 PM To: Council; Pauline Taylor; Susan Mims; Bruce Teague; Mazahir Salih; Laura Bergus; Janice Weiner; John Thomas Late Handouts Distrlt)UIWL Subject: Benton Hill Prairie planting objection City Councilors and Staff, -� -Z(D-2-D (Date) I am writing to show opposition to the proposed seeding of the majority of green space in Benton Hill Park to prairie plantings. It would take away too much useable space in such a small park. Thanks, Tyler Luebke This email is from an external source. Kellie Fruehling From: Craig Mosher <craig.r.mosher@gmail.com> Sent: Tuesday, April 21, 2020 12:21 PM To: Council; Pauline Taylor; Susan Mims; Bruce Teague; Mazahir Salih; Laura Bergus; Janice Weiner, John Thomas Cc: Nextdoor - Miller Orchard; Mary Knudson; Marcia Shaffer; Nan Fawcett; Marcia Bollinger Subject: Proposed prairie grass in Benton Hill Park Late Handouts Distributed ARIK (Date) Thank you for your Struggling with placing the large PV array in Waterfront Park. I would like to see you go ahead with the plan to put it there. I think there are many other areas for wildlife viewing. The other options for the PV site do not seem to work as well, would take much longer to complete, and would delay the project. Re: Benton Hill Park. I live at Prairie Hill where we are working with the Miller -Orchard Neighborhood Association to submit a PIN grant proposal to replace some of the trees the City removed during construction of the sidewalk along Miller Ave. 1 was distressed to learn the City is proposing planting prairie grass in the park north of the shelter. While I usually support prairie restoration (we are planting a lot of prairie here) in this case that location is an area that is used for play and picnicking -- activities that would not work in prairie. Benton HIII is a very small park as it is and this would greatly reduce the opportunities for neighbors to use the park as described. Please reconsider and leave it in turf grass. We who live in this area would dearly love to be consulted by City staff through the Neighborhood Association when changes like this are being considered. This seems like a good use of neighborhood associations. Take Care, Craig Mosher Craig R. Mosher, Ph.D., LMSW Resilient Sustainable Community Developer 115 Prairie Hill Lane, Iowa City CoHousing Iowa City IA 52246 Mobile: 563-380-5854 Prepared by: Susan Dulek, Asst. City Atty., 410 E. Washington St., Iowa City, IA 319-356-5030 Resolution No. 20-104 Resolution to procure professional services for prairie restoration Whereas, the City of Iowa City desires to establish 18 sites, with a total of 85.9 acres as prairie areas; Whereas, replacing turf grass areas with prairie plantings follows recommendations made in the 2017 Iowa City Natural Areas Plan and supports the City of Iowa City Climate Action Plan by reducing mowing, preventing erosion, providing animal and pollinator habitat, and allowing for better infiltration of storm water; Whereas, given the necessary skills required to complete this work, the City procured professional and technical services from a qualified ecological restoration firm by issuing a Request for Proposals for professional and technical services, and; Whereas, one proposal was received for these services; and Whereas, the evaluation committee has selected Applied Ecological Services, Inc. for $244,019, an amount that exceeds the City Manager's purchasing authority; Whereas, funds for this purchase are available in the General Fund Maintenance budget account number 10530225-432080; and Whereas, it is in the interest of the City to procure said services. Whereas, it is in the interest of the City of Iowa City to enter into said agreement. Now, therefore, be it resolved by the City Council of the City of Iowa City, Iowa, that: The City Manager or designee is authorized to procure prairie restoration services from Applied Ecological Services, Inc. for $244,019, and the City Manager or designee is authorized to approve change orders. Passed and approved this 2 t sr day of April 2020. p oved by %� l City Attorney's Office (Sue Dulek — 4/15/2020) IT Resolution No. 20-104 Page 2 It was moved by Thomas and seconded by Weiner the Resolution be adopted, and upon roll call there were: AYES: NAYS: ABSENT: Bergus Mims Salih Taylor Teague Thomas Weiner Item Number: 18. AL CITY OF IOWA CITY =�c�- COUNCIL ACTION REPORT April 21, 2020 Resolution adopting the Iowa City Accelerating Climate Actions Report as amended by the Climate Action Commission. Prepared By: Ashley Monroe, Assistant City Manager Reviewed By: Geoff Fruin, City Manager Eleanor Dilkes, City Attorney Fiscal Impact: No Impact Recommendations: Staff: Approval Commission: Climate Action Commission recommends approval Attachments: Resolution Accelerating Iowa City Climate Actions Amended Report Executive Summary: City Council requested a staff report that will specify actions to accelerate and focus implementation of the City's 2018 Climate Action and Adaptation Plan. The Accelerating Iowa City Climate Actions Report was delivered to City Council in November 2019 and reviewed by the Climate Action Commission in early 2020. The Commission's recommended changes have been incorporated into the document. This resolution approves the final version of the Report and following adoption, staff will continue to pursue objectives defined in the report. Background /Analysis: The Accelerating Climate Action Report was developed by City Staff in fall 2019, and presented to City Council in November 2019. The Council asked the Climate Action Commission to review the document and provide technical commentary and recommendations. The 65 action report will be used to develop and enact engagement and educational measures, incentive programs, policies and regulations, and City projects. Each action within the report has a description and identifies the initial participants and resources needed for each action. This report gives the City and Climate Action Commission a useful framework and recognizes that as we progress in Plan implementation, the actions will individually require continued development and evaluation, as well as stakeholder and equity review. Approval of the resolution will formally adopt the Report as an addendum to the Climate Action and Adaptation Plan and move the City closer to achieving its community carbon emissions reduction goals. Climate Action and Outreach staff is liaison to the Climate Action Commission and will be regularly reporting progress on Report objectives and engaging this group in execution of Plan actions. Commission working groups are significant contributors to the review and implementation of each action item. As we work on the Plan initiatives, action strategies and successes will be defined by staff, Commission members, and the public. Progress will be reported in a variety of platforms inviting the public's review. ATTACHMENTS: Description Resolution Accelerating Iowa City Climate Actions Report Prepared by: Ashley Monroe, Assistant City Manager, 410 E. Washington St. Iowa City, IA 52240 (319) 356-5012 ' RESOLUTION NO. ?n -ins Resolution adopting the Iowa City Accelerating Climate Actions Report as amended by the Climate Action Commission Whereas, the Iowa City City Council revised community greenhouse gas emissions targets to 45% reduction from 2010 levels by 2030 and reaching net -zero by 2050, and requested a report to accelerate implementation of the 2018 Climate Action and Adaptation Plan; and Whereas, the Accelerating Climate Actions Report, with 65 new specific actions, builds directly upon the five strategic areas included in the Climate Action and Adaptation Plan, including energy efficiency, transportation, waste, adaptation, and sustainable lifestyle; and Whereas, after staff presented the Report, City Council requested that the Climate Action Commission undertake a technical review and provide recommendations on the Report; and Whereas, the Climate Action Commission completed review of the Report, presented recommendations to Council on April 7, 2020, and their recommended changes have been incorporated; and Whereas, implementation of the climate actions contained within the Report and agreed upon by City staff and the Climate Action Commissioners will continue to advance the City of Iowa City closer to achieving its climate action goals. Now, therefore, be it resolved, that the Iowa City City Council hereby adopts the attached Accelerating Climate Actions Report as amended by the Climate Action Commission in order to implement the Climate Action and Adaptation Plan and meet or exceed the City's emissions targets by 2030 and 2050. and approved this 21st day of April 2020. ATTEST: rved by ` y Attorney's Office - 4/16/2020 Resolution No. 20-105 Page 2 It was moved by Mims and seconded by Weiner Resolution be adopted, and upon roll call there were: AYES: NAYS: x x x x x x ABSENT: Bergus Mims Salih Taylor Teague Thomas Weiner the IDWACM CLIMATE ACTION F P—.0 TODAY - Achieving 45% Reduction in Carbon Emmissions by 2030 and Reaching Net -Zero by 2450 CITY OF IOWA CITY LINESCO CITY Oi LITERAMRE Table of Contents Introduction 2 August 6, 2019 Climate Crisis Resolution 3 Iowa City Community -wide Greenhouse Gas Emissions 2018 5 Key Stakeholder Initiatives 7 Climate Action and Adaptation Plan: Summary of Actions 9 Accelerating Iowa City's Actions 10 Buildings 11 Transportation 16 Waste 19 Adaptation 21 Sustainable Lifestyle 24 Ensuring Equity in our Climate Action Response 27 City Government Roles and Responsibilities 28 Public Funding 31 Getting to 2030: Greenhouse Gas Emissions Scenarios 34 Closing Summary and Acknowledgements 38 Appendix 39 1 Introduction In December 2016, the Iowa City City Council established goals aligning with the Paris Climate Agreement, to reduce citywide carbon emissions by approximately 25% by 2025 and 80% by 2050. In partnership with the community and with the guidance of an appointed Climate Action Steering Committee, the City of Iowa City developed its first comprehensive Climate Action and Adaptation Plan. The Plan's development allowed for significant community and stakeholder input that was solicited in ten public meetings. In addition to those public meetings, hundreds of individuals responded to a survey to aid in the Plan's development. The Plan was finalized by the Climate Action Steering Committee and adopted by the City Council on September 18, 2018. As additional climate science research and reports were since issued by agencies such as the Intergovernmental Panel on Climate Change (IPCC), the City Council committed on August 6, 2019, to update carbon emissions targets. As the resolution on the following pages declares, Iowa City's latest goals are to reduce citywide carbon emissions 40% by 2030 and reach net -zero emissions by the year 2050. The City Council also called for this report, issued within 100 days of the resolution, to provide specific methods by which the City can accelerate progress on the initiatives described in the 2018 Climate Action Plan. This report was presented on November 14, 2019, to the City Council and the Iowa City community for review and comment. The Iowa City Climate Action Commission and their working groups reviewed the document and provided comment on the contents of this report and presented their recommendations to City Council on April 7, 2020. City Council accepted the review and staff brought the report to Council on April 21, 2020 for final adoption. Iowa City's Climate Action and Adaptation Plan along with other climate action resources can be accessed at www. icgov. orq/climateaction. August 6, 2019 Climate Crisis Resolution ti� Preporad by: Agrotey Monro&. Assistant City Manager, 414 E Waahingtpry St. Iowa City, [A 52240 (319) 355.9G10 Resolution 19-218 Rosoludon declaring a climate crisis and requesting immediate and accelerated action to address the climate crisis and limit global warming to 1.5 degrees Celsius. Whereas, Climate change is an urgent unfolding crisis that presents a serious threat to global stability and human existence; and Whereas, The City of Iowa City developed a Climate Action and Adaptation Plan, approved in September 2018, to achieva the Council -set targets matching the Paris Agreement for a citywide carbon emissions reduction of 25-2896 from 2005 levels by 2025 and 80% by 2050; and Whereas, The Clirn ate Action and Adaptation Plan notes that the majority of Iowa City's carbon emissions are sourced from fossil -fueled energy production by utillties and the University of Iowa; and Whereas, In October 2018, the Intergovernmental Panel on Climate Change (IPCC) issued a spacial report on the Impacts of global warming and the need to raduoe global greenhouse gas emissions well before 2030 to hold warming 60 1.5 degrees Celsius; and Whereas. To stay within 1.5 degrees Celsius, the IPCC report indicates that global net human - caused emdssions 1vatdd need to fall 45% from 2010 levels by 2430 and reach `net zero', offsetting carbon emissions with carbon removal. by 2050; and Whereas. In 2098, the United Stales' Fourth National Climate Assessment made clear that climate change will wreak havoc across the United States, and the current pace and scale of national climate action is not Sufficient to avert substantial damage to the economy, environment, and human health over the cam ing decades; and Whereas. According to the Urban Sustainai3iloly Directors Network #;Berate in the Heartland Report, Iowa City, like the Iowa City metropolitan area and the state of Iowa, is already suffering impacts of dimate change and the expectotion that damaging weather events, including average annual temperatures excaading the hottest years of histvdcaI temperature ranges, increased spring and summer rainfall, excessive daily rainfall frequency, growing season length, and temperature of heat waves, cold waves, and summertime nights will continue and grow more severe r global greenhouse gas emissions are not significantly reduped; and Whereas. Climate change will conllnue to impact the affordability of basic human neoessitles such as food, housing, healthcare, transportation, and energy, adding additional prt3ssureon persons and families of Icw=Income and challenging Iowa City's goal of fostering an inclusive, Just, and sustainable rommunityfor all; now, theral" be it Resolved, That the City Counal hereby declares a state of climate crisis, given that the crisis poses a serious and urgent thngat to the well-being of Iowa Glty, its inhalatants, and its environmonl; 2nd, be it Further Resolved, Iowa City adopts the IPCC targets of a 45`lo fed uctlon in o2rban emissions by 2030 and each Ing "net -zero" by 2050; and, be it Resolution No. 19-Z18 Page 2 Further Resolved. Iowa City will continue to coordinate its efforts witft local municipalities, energy utilities. education institutions, as well as other loll, regional, end state governments to accelerate actions to rapidly reduce greenhouse gas emissions fmrn fossil fuels, such as gasoline, diesel and natural gas, refrigerants, and other sources; and, be it Further Resolved, That the City Oounoil dir'eots the City Manager's Office to develop and deliver a report within 100 days, recornmeriding ways to ac lerate Iowa City's clirnrate actions consistent with new reduction targets; and, be it Further Resolved, That City Council intends to schedule a presentation of and opportunity for public romment on these strategies to achieve 9oala for emission red u0iens; and. be it Further Resolved, That Iowa City's climate mitigation and adaptation planning, policy, and program delivery shall ensure a Just transition for all its people; and, be it Further Resalvad, That as Iowa City works on climate mitigation~ it shall continue to advance climate adaptation efforts to address unavoibeble current and future climate charoge impacts; and, belt Finally Resolved. That City Council will work with the City Manager's Office tedevelop a budget that ana bias urgent cllrnate action in the near term, while ensuring a dIrnalis resilient future for Iowa City in the long term. Passed and approved this 6th day of August, zo 19 Attest: City Clerk It "s moved by Cole adopted. and upon roll call ttrere were; AWES; A by City Athrne}{s Office and seconded by salth MAYS: the Resolution be ABSENT-. Cole Mims Sa lih Taylor Teague Thomas Throgmorton Iowa City Community -wide Greenhouse Gas Emissions 2018 Iowa City has conducted annual greenhouse gas (GHG) inventories since 2008. As of 2018, eleven consecutive years of data have been analyzed. Initially, the software (CACP 2009) and methodology was provided by ICLEI (International Council for Local Environmental Initiatives), the national standard for that time. After the Cityjoined the Compact of Mayors (now the Global Covenant of Mayors for Climate & Energy), the Global Protocol for Community -Scale Greenhouse Gas was used to report community -wide emissions. All previous years were re- calculated using this new standard. The protocol now used is the most up-to-date global protocol and Iowa City's annual emissions have been reported using this method platform since 2015. With the August 2019 adoption of the Climate Crisis Resolution, emissions reduction targets in Iowa City's Climate Action and Adaption Plan have been raised and the baseline year changed from 2005 to 2010. The new targets include 45% reduction in emissions by 2030 and approaching net -zero emissions by 2050. Both the new targets and change in the baseline year align with the October 2018 Intergovernmental Panel on Climate Change (IPCC) report and recommended targets. The City factors in community growth when completing annual GHG inventories. From 2010 to 2018, Iowa City has experienced a steady decline in emissions per capita from 20.3 to 13.4 metric tonnes. Iowa City expects to continue to grow over the next several decades and will need to be mindful of growth strategies in order to achieve our goals. The chart on the following page shows Iowa City carbon emissions trends, baseline level (red dash), and 2030 and 2050 targets (gold and silver dashes). Since 2010, Iowa City has seen a downward trend in community carbon emissions, in part by a two-thirds reduction in coal usage at the University of Iowa's power plant since that date. The large drop between 2014 and 2015 is primarily a result of MidAmerican Energy's decision to invest heavily in wind energy. This action retained renewable energy credits in the MidAmerican service territory instead of selling it to users outside the state. Despite the reduction of community -wide emissions, much work lies ahead to meet both the 2030 and 2050 emission targets. An average annual emissions reduction between 2-2.5% annually should enable us to reach our 2030 target and stay on track to become carbon neutral in 2050. It is staff's hope and expectation that Iowa City will not simply meet, but exceed, the 2030 target and put ourselves in position to be a national leader in the effort to achieve net -zero status. The majority of metric tonnes of COze are generated by industrial (27%), residential (22%), and commercial (20%) users. In order to reach our 2030 goals, the City will need to partner extensively with these sectors over the next ten years. The balance of emissions are generated by the University of Iowa Power Plant (14%), all community transportation (15%) and waste (2%). While these sectors account for a smaller portion of the carbon emissions, all sectors must be engaged to achieve long-term emission reduction targets. 0 111 800,000 ...... • ..0.0 ..... Iowa City Community CO2e Totals by Sector �D r• M M O - N M �D 1�N OpN O AQ NG� M O O O O O O O O O O O O O O OO O O O O O N N N N N N N N N N N N N N N N N N N N N Industrial Commercial Residential UI Power Plant Transportation Waste — — — 2010 Baseline 2030 Target 2050 Target Reduction Trend line *Data for the inventory is carbon dioxide equivalent (CO2e) produced from multiple sources used within Iowa City limits including electricity and natural gas used from MidAmerican Energy, electricity provided by Eastern Iowa Light and Power, and coal used by the University of Iowa Power Plant. Transportation contribution is calculated using vehicle miles travelled (VMT), provided annually by the Department of Transportation. Waste is calculated using the Iowa City portion of the waste collected at the Iowa City Landfill and Recycling Center. Another way to dissect the community's greenhouse gas emission data is to view it by source of production. Electricity, natural gas, and coal from the University of Iowa power plant all supply energy for heating, cooling, lighting, appliances and related functions making buildings the largest opportunity for meaningful progress to our goals. With the robust growth of MiclAmerican's renewable electricity, it will be important for the community to start looking for ways to offset natural gas using methods such as air -source heat pumps (that work for both heating and cooling), especially as technology improves and market demand increases. Transportation is another sector that will need transformation, especially in the use of personal vehicles. Replacing personal vehicle use by biking, walking, and public transit is critical to our future success. Increasing public transit ridership will take significant investment in our current system. Electric vehicle adoption and technologies that will improve the efficiencies of larger vehicles will also be important for the community to embrace. 2018 Community -wide Emissions by Source (metric tonnes CO2e) 20,682 2% ■ Electricity ■ Natural Gas ■ Coal ■ Transportation ■ Waste 0 Key Stakeholder Initiatives As the GHG Inventory shows, the community is jointly responsible fore missions and all have a role to play. Indeed, individuals can collectively make a huge difference and are critical to our success. However, a few major stakeholders will necessarily be essential partners in reducing community -wide emissions. The City will actively partner and coordinate with all interested parties, but several entities will be especially important to work with, in order to reach our community's new emissions reduction targets. Almost all electricity in Iowa City is provided by MidAmerican Energy, which has made a strong commitment to increase their renewable energy generation. In 2018, 51.4% of electricity delivered by MidAmerican came from renewable resources, primarily wind. With the completion of their Wind XII project, MidAmerican has announced that they will be positioned to deliver 100 percent renewable energy to their Iowa customers by 2021, based on annual electric usage. MidAmerican Energy will continue to use its natural gas, nuclear and coal -fueled plants to ensure reliable electric service even in times of low wind. With this strong commitment in place, Iowa City must focus efforts to not only reduce overall energy consumption, but also support as much electrification as possible. MidAmerican will be a strong partner going forward and will play a critical role in expanding renewable energy sources, electrification of our buildings, and enabling a more robust electric transportation network. Eastern Iowa Light and Power provides a small percentage (0.5%) of electricity in the southern part of Iowa City. Eastern Iowa Light and Power reports that almost 60% of their sources of energy are carbon free. While they have a relatively small footprint in Iowa City, they do supply electricity to the City's Wastewater Treatment Facility, one of our largest municipal energy consuming facilities. Thus, an expanded partnership, particularly as we explore productive uses for the methane production at the plant, will have a meaningful impact on our success. In 2017, the University of Iowa made a public commitment to eliminate the use of coal at its power plant by 2025. Over the last several years the University has been making noteworthy progress by increasing biofuels to replace coal. The University has an ongoing goal of achieving 40% renewable energy on campus by 2020. They have taken significant steps to increase energy efficiency in older buildings on campus and to ensure new buildings are built beyond state code standards. The University is currently exploring a public private partnership that would involve a long-term operating agreement of their utilities with a private entity. If this plan moves forward, they have indicated to City leadership that Iowa City will be a continued partner in ensuring community climate objectives are met. The Iowa City Community School District passed a resolution in September 2019 to develop recommendations for taking more deliberate action on climate change. The District has begun by engaging the University of Northern Iowa to develop a baseline of current energy use. The District plans to develop their own Climate Action Plan with specific targets for educational programing, GHG emissions reduction, and renewable energy use within the upcoming months. Finally, large industrial and commercial energy consumers in our community can potentially make excellent partners and exemplary models for environmental stewardship. Incremental movement towards electrification of buildings and equipment paired with renewable and efficient energy sourcing could substantially reduce current and future emissions. Our businesses are an appreciated, vital part of our community and their participation will keep Iowa City moving towards a sustainable future. To that end, the City looks forward to developing meaningful 7 partnerships with individual businesses, as well as organizations such as the Chamber of Commerce and the Iowa City Area Development Group to further our climate action efforts. 0 Climate Action and Adaptation Plan: Summary of Actions The Climate Action and Adaptation Plan was created with the community to help chart a path toward previously established GHG emissions reduction goals. The strategies identified in the Plan provide the foundation for future actions that can be taken by the City, as well our residents and businesses to accelerate progress and achieve the newly adopted community goals. A summary of the actions contained in the 2018 Climate Action and Adaptation Plan are listed below: Buildings 1.1 Increase energy efficiency in residences 1.2 Increase energy efficiency in businesses 1.3 Increase energy efficiency in new buildings 1.4 Increase on-site renewable energy systems and electrification 1.5 Initiate community solar projects 1.6 Support energy benchmarking tools 1.7 Continue to increase energy efficiency in City -owned buildings Transportation 2.1 Increase use of public transit systems 2.2 Embrace electric vehicles, alternative fuel vehicles, and other emerging technologies 2.3 Increase bicycle and pedestrian transportation 2.4 Increase compact and contiguous development 2.5 Increase employee commuter options 2.6 Manage parking options 2.7 Reduce the City's vehicle emissions footprint Waste 3.1 Increase recycling at multi -family properties 3.2 Increase composting of organics 3.3 Reduce consumption of material goods 3.4 Establish partnerships to divert construction waste from the Landfill 3.5 Reduce waste at City facilities 3.6 Create a comprehensive waste management plan 3.7 Take action on a study to efficiently capture and use methane from wastewater operations 3.8 Take action on a feasibility study on energy generation from Landfill methane 4.1 Conduct a vulnerable populations asset mapping exercise 4.2 Develop communications and outreach plan to connect with vulnerable populations 4.3 Analyze climate -related public health impacts in Iowa City 4.4 Coordinate extreme weather preparedness planning with local agencies 4.5 Assess Citywide and neighborhood stormwater management 4.6 Expand Iowa City's tree canopy Sustainable Lifestyle 5.1 Encourage a plant -rich diet 5.2 Expand community gardens and access to healthy, local foods 5.3 Encourage the purchase of local products and responsible purchasing 5.4 Create funding mechanisms to support community -wide climate action 5.5 Incorporate this Climate Plan into the City's sustainability communications 5.6 Initiate a green recognition program 5.7 Develop internal City sustainability operations guide 0 Accelerating Iowa City's Actions City staff has developed a list of specific actions that can be further explored and implemented in the near-term, which collectively would accelerate our progress toward our carbon emissions reduction goals. The actions are broken up into the Climate Action and Adaption Plan categories of Buildings, Transportation, Waste, Adaptation and Sustainable Lifestyle. Within each of these five key areas, staff has developed recommendations that encompass Education, Incentives, Regulation, City Policy, and Public Projects. Financial and human resources will be necessary to carry out the vast majority of the proposed actions. Those elements will be discussed in subsequent sections of this report. Report actions have been assigned to a "Phase" in order to provide a general sense of timeline: Phase 1: Action can be initiated by end of 2020 but may be ongoing through 2030 Phase 2: Action can be initiated between 2021-2023 but may be ongoing through 2030 Phase 3: Action can be initiated between 2024-2025 but may be ongoing through 2030 10 Buildings The Climate Action and Adaptation Plan states that existing buildings account for approximately 82% of community -wide emissions, making them the largest source of emissions. Thus, improving the performance of our existing building stock and ensuring new construction has the smallest carbon footprint possible is absolutely critical. These objectives are hindered by the fact that municipalities cannot regulate construction beyond what is permitted by the State of Iowa Energy Code. The community must be as creative and resourceful as possible when crafting our strategies. While reducing overall energy consumption and expanding renewables is important, we must recognize that our electric supply is becoming increasingly renewable (51.4% renewable in 2018 from MidAmerican Energy) requiring a large part of our strategy to focus on electrification and reduced dependency on natural gas for heating and other uses. This can be challenging with certain types of buildings, given cost and technological options that may be available. 11 Plan Required Action Description Alignment Resources 1 Promote Energy Efficiency Through advertisements, social media, special event 1.1-1.2, Financial, and Performance Tips to the and everyday engagement, a Climate Ambassador 1.6 City Staff Public Program, and the AmeriCorps program, provide the *(CMO, *(Next Step) public with practical tips and strategies they can COM, EHR, Phase 1 implement in their home or business. Commission 0TH), suggests work with ICCSD to promote student and Community family engagement and leverage educational tie-ins. Action Recommends a website to showcase home energy efficiency success stories and working with MidAmerican and the University of Iowa to establish resident -friendly data and reporting tools. 2 Partner with Stakeholders to Work with existing community organizations such as 1.1-1.4 Financial, Promote Green Building and the Home Builders Association, Iowa City Area City Staff Rehabilitation Association of Realtors, The Greater Iowa City *(NDS, *(New) Landlord Association, the Johnson Clean Energy CMO, EHR, Phase 1 District and the Chamber of Commerce to promote 0TH), green building practices. Commission recommends Community inclusion of staff from other jurisdictions whose work Action intersects with green buildings and from explicit attention to equity, including adding equity stakeholders and applying practices to affordable housing. 3 Encourage the Local Realtor Homebuyers utilize MLS data to influence purchasing 1.1 & 1.6 Financial Community to Include decisions. Energy performance is not currently a part *(CMO, Energy Performance in the of local MLS inventories but could help homebuyers 0TH), Multiple Listing Services make educated decisions and encourage sellers to Community (MLS) Property Inventory proactively improve efficiency. Action to encourage a Action *(New) "home energy score" has been successful in Phase 1 communities across the country and may drive public 11 demand for greater energy efficiency in local building stock. Examples should be collected and shared with the ICAAR. 4 Educate the community on Assessing energy usage required to treat and deliver 1.7 City Staff energy usage for water water services will be beneficial to efficiently deliver *(CMO, PW, treatment and delivery services and operate the Water Treatment facility. EHR, 0TH), *(New) Water customers should be educated about energy Community Phase 3 needed to heat and pump water and encouraged to Action use less water. Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others Buildings: Action Description Plan Required Alignment Resources 1 Offer Free Home Energy Expand previously commenced efforts to offer free 1.1 Financial Assessments through Green home energy testing and weatherization through *(CMO, Iowa AmeriCorps AmeriCorps, including stronger education and follow EHR), *(Next Step) up components. Explore the possibility of scaling up Community Phase 1 the quantity of assessments and escalating outreach Action to households that most need assistance. Education on safe use of cleaning products in better -sealed homes may also be necessary. 2 Enhance Energy Standards Ensure that City housing rehabilitation programs 1.1 Financial for City Rehabilitation sufficiently incorporate energy efficiency measures, *(CMO, PR, Projects electrification, renewable energy, trees and PW, NDS) *(Next Step) stormwater quality improvements as budgets allow, Phase 1 ensuring that programs include performance protocols, property owner education, and an opportunity for energy data tracking, for single and multi -family properties. 3 Coordinate Neighborhood Plan multi -day neighborhood blitzes that provide 1.1 Financial, Energy Blitz Events education to residents as well as practical home City Staff *(New) solutions including LED lights, weatherization *(CMO, Phase 1 improvements, trees and other climate action COM, PR, solutions. EHR, NDS), Community Action 4 Launch a TIF -funded climate Using district -wide TIF funding, create and launch an 1.2 & 5.4 Financial, action incentive program incentive program that emphasizes energy reduction, City Staff aimed at reducing industrial renewables, electrification and site improvements *(CMO), energy consumption *(New) that will help reduce emissions in our industrial Community Phase 1 sector. Action 12 5 Develop or Partner with Local Stakeholders on a Comprehensive Climate Action Rehabilitation Program *(New) Phase 1 6 Consider a Building Permit Fee Rebate Program for Enhanced Energy Standards *(New) Phase 2 7 Initiate a Net -Zero House Design Competition *(New) Phase 2 8 Complete a Net -Zero Demonstration Rehabilitation Project *(New) Phase 2 Iowa City currently offers housing rehabilitation funds 1.1-1.4 that can be used for energy efficiency measures. This combination grant/loan program would bolster that effort and expand it more broadly to include all building types. External partners could include local financial institutions (attractive lending terms) and organizations like the Johnson Clean Energy District that offer expertise. Commission cites a need for ample resources and building capacity for a larger program. Consider rebating a portion of building permit fees in 1.3 exchange for enhanced energy measures on construction projects. Engage the local architect and building community to develop a series of net -zero house designs that can be accessed and utilized by local contractors and the public. Commission recommends setting a cap on square footage and garage spaces to reduce embodied carbon and generated transportation emissions. Through our existing rehabilitation programs such as the UniverCity and South District Homeownership programs, complete a demonstration net -zero rehabilitation project. Financial, City Staff *(CMO, NDS, EHR), Community Action Financial *(NDS), Community Action 1.3 Financial *(CMO, NDS), Community Action 1.1 & 1.4 Financial *(CMO, N DS) 9 Launch an Electrification This program would provide financial incentives that 1.1-1.2 & Financial Incentive Program offset the cost to convert appliances and heating 1.4 *(CMO, *(New) equipment from natural gas to electric. Commission NDS), Phase 2 recommends working with MidAmerican Energy. Community Action 10 Incentivize Energy To complement a proposed energy benchmarking 1.6 Financial, Enhancements and Building program, this program would look to target specific City Staff Re- and Retro improvements for those large properties that are *(CMO), Commissioning for significant contributors to our carbon footprint. Community Participants in the Energy Commission recommends more strict energy Action Bench -marking Program standards as benchmarks for the program. *(New) Phase 3 Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others 13 Buildings: Regulation Action 1 Create a More Robust Energy Code Inspection Program *(New) Phase 1 2 Incorporate Stricter Energy Standards into Tax Increment Financing Policies *(New) Phase 1 3 Incorporate Strict Energy Standards into Height and Density Bonuses *(New) Phase 2 4 Initiate Energy Benchmarking Requirements *(New) Phase 2 Description Staff currently relies on contractor verification for compliance with the adopted energy code. Through staffing increases and training, all Building Inspectors can take a more proactive role enforcing the energy code. Commission recommends attention to the role of equity in compliance, especially in performance from reduced energy bills and continued housing affordability. Revise our Tax Increment Financing policy to include stricter energy standards. This effort will convene local jurisdictions to explore coordinated efforts, permit incentives, and opportunities for residential and commercial properties, modifying some inspection or submittal activities. Revise our density and height bonus Policies to include stricter energy standards. Plan Alignment 1.1 -1.2 1.3-1.4 1.3-1.4 Require owners of a predetermined building size 1.6 (example: 100,000 sq ft) to annually report energy performance metrics to the City. Commission recommends exploring what other communities have used as parameters for this type of program. Required Resources City Staff *(NDS) Financial *(CMO, N DS) No Additional *(CMO, NDS, 0TH) City staff *(CMO), Community Action 5 Develop Climate Action Adopt energy efficiency and tree planting 1.1 & 1.7 No Requirements for all Existing requirements to ensure rental housing is contributing Additional and Future Rental Permits to public health concerns associated with climate *(CMO, *(New) change. NDS, EHR) Phase 2 _ Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others Plan Alignment 1.1-1.4 Required Resources No Additional *(CMO, N DS) 14 Action Description 1 Advocate for State Adoption Encourage the State of Iowa to adopt the most of Advanced Energy Codes current energy code, including exploration of other *(New) energy -based code opportunities such as the Phase 1 International Code Council's Zero Code for incentive programs. Commission recommends consultation and coordination with neighboring agencies if proposed interim building code requirements could differ from other agencies, to reduce confusion. Plan Alignment 1.1-1.4 Required Resources No Additional *(CMO, N DS) 14 2 Advocate for Aggressive Require staff to actively participate in the 1.1-1.4 Financial Energy Code Development development of future international energy codes *(NDS) and Adoption *(New) including advocating of the 'glide path to net -zero' Phase 1 and other similar nationwide and global efforts. Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others Buildings: Public Projects Plan Required Action Description Alignment Resources 1 Solar Partnership with Execute a land lease agreement with MidAmerican 1.5 City MidAmerican Energy for a utility -scale solar installation of 2 MW property *(New) or greater. *(CMO, Phase 1 PW) 2 Net -Zero Public Housing Initiate a program to rehabilitate Iowa City owned 1.1 & 1.7 Financial, *(New) public housing units into net -zero properties. City Staff Phase 2 *(NDS) 3 Municipal Building Efficiency Accelerate energy efficiency efforts in city facilities 1.4 & 1.7 Financial, and Electrification and develop a plan for systematic electrification and City Staff *(New) implementation. *(PR, CMO, Phase 3 1 PW) Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others 15 Transportation Along with significant change in our built environment, mobility and land -use planning will play a very large role in meeting emission reduction targets. The Climate Action Plan calls for replacement of over fifty-five percent of vehicle trips with sustainable transit, bike, and pedestrian options by 2050. City Council has established a goal to double transit ridership by 2028 which will jumpstart our community effort to reduce emissions generated by fossil - fueled transportation. Overarching targets in this area include conversion of the City's municipal fleet to cleaner fuel vehicles and to increase community -wide adoption of electric and alternative -fuel vehicle technology. The City's immediate strategy focuses upon enhanced education and incentive campaigns for public transportation and preparing for transition to a future with more electric vehicles. Transportation: Education Action D - Plan Required Alignment Resources 1 Significant Transportation Education and outreach campaigns on use of non- 2.3 Financial, Education and Outreach fossil fuel vehicles, walkable neighborhoods, City Staff Campaigns bicycling, car -sharing, and transit for a broad base of *(COM, TS, *(New) residents, workers, and employers, engaging EHR, 0TH), Phase 1 underserved and hard to reach communities. Community Commission recommends assistance from the Action Climate Ambassador program. 2 Launch an Eco -Driving Promote Ride -Sharing, Transit, Alternative Work 2.5 Financial, Campaign Alongside Schedules and Other Actions to Help Reduce City Staff Employers Emissions from Single -Occupancy Vehicles. *(CMO, *(New) Commission recommends inclusion of underserved COM, EHR), Phase 2 and special populations and including a marketing Community component to drive awareness for eco -driving Action partners. Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others Action Description 1 Incentivize Public Transit Based on recommendations in the forthcoming Options *(New) transit study, incentivize use of public transit with Phase 2 fare free service and/or discounted passes/rides. Commission recommends consideration of a partnership with the ICCSD to extent practical, for student busing or supporting before/after school activities. Plan Alignment 2.2 Required Resources Financial, City Staff *(TS, CMO), Community Action 16 2 Explore Electric Vehicle (EV) Plan suggestions are expected to include incentive 2.5 Financial Incentives Based on the options for the City to consider. Commission *(CMO, TS, Readiness Plan *(New) recommends that populations in lower socio- EHR) Phase 3 economic positions are empowered to take advantage of this and other transit options. Resource Key: CMO — City Manager's Office; NDS— Neighborhood & Development Services; COM — Communications; PW— Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others Action Description Plan Required Alignment Resources 1 Review Parking Regulations This review may include amenity prioritization for 2.6 City Staff and Consider Innovative EV and efficient vehicle parking, maximum parking *(NDS, TS, Ways to Encourage standards, and opportunities for private CMO, EHR) Alternative Modes of Travel properties, ride sharing, and development of *(New) employer programs. Commission recommends Phase 2 developing actions that include persons in lower socio-economic status, as they may spend a disproportionate amount of their income on transportation and may experience the most impact from incentives. 2 Require Climate Change This extra layer of in-house review would 2.4 City staff Analysis for New accompany rezoning applications received by the *(NDS, CMIO) Subdivisions and Rezonings City. Commission recommends incorporation of *(New) complete streets policies and directly linking Phase 3 emission reductions with development and design choices. Resource Key: CMO— City Manager's Office; NDS— Neighborhood & Development Services; COM—Communications; PW— Public Works; EHR— Equity & Human Rights; TS—Transportation Services; PR —Parks and Recreation; FIN —Finance; OTH —Others Transportation: City Policy • 1 R- • 1 Establish an Electric and Fuel -Efficient Vehicle Purchasing Policy *(New) Phase 1 2 Track Adherence to City Idling Policy *(Next Step) Phase 1 Establish a City policy to mandate electric and alternative fuel and fuel-efficient vehicle purchases if viable options exists. Commission recommends goals, metrics, and reporting on this action. An idling reduction policy was implemented in spring 2019. Data tracking and analysis will be required to ensure its effectiveness. Commission recommends investigation of hybrid battery idle reduction technologies where practical. Plan Required Alignment Resources 2.2 Financial *(CMO, PW) 2.7 No Additional *(CMO, PW) 17 3 Review Transportation Ensure City transportation subsidies and work 2.1 City Staff *(CMO) Subsidies, Work Schedules schedules for employees are crafted with and Tele -Work Policies for climate action goals in mind. Commission City Employees *(New) recommends goals, metrics, and reporting on Phase 3 this action. Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EH — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others; PUB — Public/Community Action 1 Complete the Transit Study and Implement Recommendations to Bolster Service and Increase Ridership *(Next Step) Phase 1 2 Complete Electric Vehicle (EV) Readiness Plan and Implement Recommendations *(Next Step) Phase 2 L Description The study will result in recommendations for optimizing the transit system including, days and hours of operation, fares, transfers, routes, stops, and other attributes that will increase ridership. Guidance from the completed plan will become new climate actions. Commission recommends attention to equity components and linking to realized benefits. Also recommends future incorporation of light rail or community rail project potential. A grant was awarded for the development of an Eastern Iowa Regional EV Plan. It will develop practical and specific guidance to prepare for increased electric vehicle use. The project, led by Iowa City, will begin in early 2020. Commission recommends attention to equity, ensuring outcomes and planning activities include underserved populations. Plan Required Alignment Resources 2.1 City Staff *(TS, CMO), Financial, Community Action 2.2 City Staff *(CMO, TS) 3 Achieve Gold Friendly Continue to implement the Bicycle Master Plan 2.3 Financial *(NDS, Bicycle Friendly Community and meet the requirements to achieve the gold TS, PW, COM) Status and Begin Work friendly status upon recertification in 2020-21. Toward Platinum Status *(Next Step) Phase 2 Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Eauitv & Human Rights: TS —Transportation Services: PR — Parks and Recreation: FIN — Finance: OTH — Others: PUB — Public/Community 18 Waste Although waste makes up only 2% of community emissions, shrinking the waste stream and managing methane emissions from the waste stream, are critical. Approximately 70% of the materials in the Iowa City Landfill have recyclable or reusable properties and about 35% of materials are compostable organics, the Landfill's primary source of methane production. The City's solid waste operations have taken regulatory steps and made program changes over the last few years resulting in increased recycling and composting rates; however, the Climate Action Plan calls for reducing the waste reaching our Landfill by 50% by 2025 and 80% by 2050. To hit this target, the City must increase public awareness, meaningfully engage community partners, and devise policies or regulations that encourage a culture of conservative consumption. Furthermore, methane generated at the City's Landfill and Wastewater Treatment Plant contributes over 50% to the City's own municipal GHG emissions. A consultant contract analyzing potential methane use will soon be recommended to the City Council. Description 1 Engage the Public to Compost Through advertisements, social media, special Organic Waste event engagement, and the AmeriCorps and Neighborhoods to Reduce *(Next Step) Climate Ambassadors programs, provide the Phase 1 public with practical tips and strategies they Waste/Consumption at the opportunities for neighborhood organizations, can implement in their home or business. Plan Required Alignment Resources 1 3.2 City Staff *(CMO, PW, COM, PR, OTH), Community Action 2 Education Campaigns for Using City staff and the Climate Ambassador 3.3 City Staff Neighborhoods to Reduce program, work with and provide education *(CMO, PW, Waste/Consumption at the opportunities for neighborhood organizations, COM, EHR, PR, Source *(Next Step) tenant associations, and landlords. OTH), Phase 1 Community Action Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Eauitv & Human Riehts: TS —Transportation Services: PR — Parks and Recreation: FIN — Finance: OTH — Others Description Plan Required Alignment Resources 1 Incentivize Construction Expand in -progress efforts to engage the local 3.4 Financial, City Waste Diversion development and construction community, Staff *(PW, *(Next Step) along with local commercial industry to divert CMO, OTH), Phase 3 materials from landfill by reuse or recycling. Community Action Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others 19 Action Description Plan Required Require All Park/Public Space Approval for events requiring an assembly or Projects above a certain threshold must submit Alignment Resources Financial, City 1 Develop a Policy/Ordinance 3.4 Requiring Specific Demolition a waste management plan before beginning EHR, OTH), Staff *(NDS, *(New) consumption. or Deconstruction Recycling construction. CMo, PW) Standards/Procedures *(New) Phase 2 2 Mandating Signage to Assist Require basic standard signage posted at waste 3.1 Financial, City Waste Collection *(New) collection sites on multi -family properties to Staff *(PW, Phase 2 reduce recycling contamination. NDS) Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equitv & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works,- EHR orks;EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others Waste: Projects J Action Description Plan Required Alignment Resources 1 Initiate a Methane Feasibility The selected consultant will study the GHG 3.7-3.8 Financial, Study *(Next Step) impacts, financial impacts, and opportunity for City Staff Phase 1 energy generation at the Landfill and *(PW) Wastewater Treatment Facility. Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others 20 escript i Plan Required LJ Alignment Resources 1 Require All Park/Public Space Approval for events requiring an assembly or 3.5 City Staff Rentals to Recycle and Use shelter rental permit will include adherence to *(PW, PR, "Green" Event Best Practices future guidelines that reduce waste and energy EHR, OTH), *(New) consumption. Community Phase 1 Action Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works,- EHR orks;EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others Waste: Projects J Action Description Plan Required Alignment Resources 1 Initiate a Methane Feasibility The selected consultant will study the GHG 3.7-3.8 Financial, Study *(Next Step) impacts, financial impacts, and opportunity for City Staff Phase 1 energy generation at the Landfill and *(PW) Wastewater Treatment Facility. Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others 20 Adaptation As Midwestern weather is expected to become more volatile and extreme, daily life in Iowa City will change. Air quality, along with severe hot and cold temperatures and high rainfall can impact work commutes, business operations, and daily outdoor activity. Therefore, the Climate Action Plan's section on Adaptation focuses upon environmental impacts that affect quality of life for our residents. Components of this work include education campaigns, care and nurturing of natural areas and urban tree canopy, as well as engagement with community members most susceptible to incidents of climate -induced extreme weather and public health hazards. It is extremely challenging to see immediate carbon emissions reductions from qualitative projects and programs, but establishing increased tree shade, healthy soils and root systems, and sound water management practices throughout the community will provide significant long-term benefits. The Climate Action Commission Equity Working Group recognized during their review of this report, that applying an equity lens is critical in implementing actions in each of the Plan areas but is especially vital in addressing how people will be impacted by adaptation. Each of the following actions require significant equity review, via stakeholder inclusion of representative populations, applying an equity toolkit, and assessing special population needs. Adaptation: Education Action Description Plan Required Alignment Resources 1 Develop a Climate Work with Climate Action Commission to 4.2 Financial, City Ambassador Team define and develop a team of trained and Staff *(CMO, *(New) passionate community members to assist with COM, EHR, 0TH), Phase 1 climate action outreach. Commission Community recommends a formal application, duration of Action service, and expectations for Ambassadors. 2 Educate and Coordinate with Continue initiatives to improve indoor air 4.3 City staff Local Agencies on Health quality, enhance outdoor gathering spaces and *(CMO, NDS, PR, Impacts *(Next Step) routes for pedestrian mobility, as well as 0TH), Phase 1 vector-borne disease prevention. Commission Community recommends goals for cooperative efforts with Action local public health and policy centers to include identifying and compiling resources, understanding impacts and associated metrics with climate change and health, and identifying issues to address in future Climate Action Plan updates. 3 Establish "Resilience Hubs" Identify public community spaces that can 4.2 Financial, City *(New) become a trusted resource for community Staff *(CMO, Phase 2 engagement. Begin engagement activities that PR, PW, COM, connect sense of safety and inclusion to places NDS, EHR, 0TH) suited to gathering or providing resources in extreme weather emergencies. 21 4 Concentrated Education Work with and provide education opportunities 4.5 Financial, City Campaign for Private for individuals, neighborhood organizations, Staff *(CIVIO, Properties about Native and business community. Commission COM, EHR, PW, Plantings, Permeable recommends coordinating education and PR, NDS, OTH) Pavement, Rain Gardens, Soil existing stormwater management incentive Health, Rain Barrels and efforts with other local agencies as well as Cisterns *(Next Step) supplementing this work with aid from Climate Phase 2 Ambassadors. 5 Coordinated Efforts with Local Maximize public health and safety outcomes 4.3-4.4 City staff Emergency Agencies and for inclement weather events by enhancing *(CIV10, PW, PR, Utility Agencies Providing regular communication with emergency COM, OTH) Critical Infrastructure *(Next agencies. Step) Phase 2 Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others Adaptation: Incentives ActionINE&., Description 1 Partner with ProjectGreen on Partner with ProjectGreen to incentivize higher a Tree Planting Partnership; levels of community tree planting on private Incentives for Private Tree property through rebates and/or a community Planting *(New) purchase program. Phase 1 Plan Alignment 4.6 Required Resources Financial, City Staff *(CMO, PR, COM, OTH), Community Action Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others Adaptation: Regulation Action Description Plan Required Alignmiont —Resources 1 Street Tree Ordinance Enact a new street tree ordinance that will 4.6 City Staff *(Next Step) expand the City's neighborhood tree canopies *(NDS, PR) Phase 1 with development proposals. 2 Increase Tree Planting Review and heighten development 4.6 Financial, City Requirements in Landscaping requirements for tree planting on private Staff *(NDS, PR) Standards, Parking Lot property including in parking lots and along with Standards and Upon Renewal rental permits. of Rental Permits *(New) _ Phase 2 Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others 22 Ada on Description 1 Develop Review Standards for In addition to energy efficiency and New City Facility Construction transportation, considerations may also include and Major Rehabilitation that review of material usage, resilience against Accounts for Climate weather and pests, water efficiency and Adaptation Principles *(New) management, and resilience to power and Phase 2 1 resource disruptions. Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others Plan Alignment 5.7 Require 2 Resourc Financial, City Staff *(NDS, PW, PR, TS, OTH) Adaptation: Projects Action 1 Flood Mitigation and Stormwater Management Programs/Projects; Buyouts *(Next Step) Phase 1 2 Continue Implementation of the Natural Areas Management Plan *(Next Step) Phase 1 3 Expand Public Tree Planting *(Next Step) Phase 1 Description Continue City's residential stormwater management programs and flood residential buyout programs through federal, state and local funds. Further support non-residential flood control efforts with an added stormwater technician position in Engineering. Commission recommends parallel actions applied to public and private development projects, encouraging or requiring increased application of stormwater best management practices. Work on Natural Areas Management has been undertaken by Parks Maintenance staff and community volunteers. Commission recommends focused education on non- traditional maintenance of natural areas and informing the public of benefits of natural areas, in order to encourage wider adoption of these practices. Increase public tree planting through expansion of Forestry staff and dedicated funding for more trees. Plan Alignment Required Resources 4.5 Financial, City Staff *(CMO, PW), Community Action 4.5-4.6 Financial, City Staff *(PR) 4.6 Financial, City Staff *(CMO, FIN, PR, OTH) 4 Equity Review of Complete the in -progress equity review and 4.1-4.2 Financial, City Neighborhood and Population initiate plan development with newly created Staff *(CMO, Outreach; Develop Outreach Climate Action position and the Climate Action COM, EHR, OTH), Plan for Populations Highly Commission. Commission recommends Community Impacted by Climate Change intensive use and skill in GIS mapping applied Action *(Next Step) to equity review. Phase 1 Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others 23 Sustainable Lifestyle The City's sustainable lifestyle initiatives are focused upon enhancing connections between existing partners, producing new partnerships, developing marketing, and generating entrepreneurial or new project opportunities. Quite a few objectives have already been started since the Plan's adoption, but this report aims to amplify programs and projects. These recommendations focus on local food and product sourcing, significant media and communication campaigns, and building upon human and financial capital in Iowa City. Like Adaptation initiatives, individual behavioral changes are nearly impossible to regulate or quantify immediate carbon emissions reduction. The success of measures in this area rely upon individual or organizational buy -in and acceptance, and then upon willingness to make environmental and personal changes. City staff, the Climate Action Commission, and community partners will need to focus heavily upon fostering relationships that benefit from climate action initiatives, and varying messaging to connect with a wide range of people. Sustainable Lifestyle: Education 1 Host Sustainability Forum and Assisted by Climate Ambassadors, expand Events opportunities for the public to engage on *(Next Step) climate action through unique programs and Phase 1 festivals. Plan Alignment 5.5 2 Launch a Green Business Create a recognition program that highlights 5.6 Program: "Climate Action at and reinforces the actions currently being Work" taken by local businesses to combat climate *(New) change. Commission recommends beginning Phase 1 this program with voluntary tracking through an energy tracking platform to encourage facility managers to regularly review energy usage and building efficiency. Further, prioritize incentives for participating organizations tracking energy data. Required Resources Financial, City Staff *(CMO, COM, PR, OTH), Community Action Financial, City Staff *(CMO, OTH), Community Action 3 Local Procurement Campaign - Assisted by Climate Ambassadors, initiate a 5.3 Financial, City Buy -in from Local Commercial campaign and projects to promote locally Staff *(CMO, Groups sourced and procured products, services, and FIN, COM, *(New) food at organization and community scale. OTH), Phase 2 Community Action Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others 24 N escription 1 Expand Community Climate Grants issued through this program highlight Action Grants and reinforce current actions taken by local *(Next Step) organizations to effectively manage resources Phase 1 and energy usage or educate and engage the public in climate action initiatives. Plan Required Alignment Resources 5.4 Financial, City Staff *(CMO, NDS, COM, EHR, OTH), Community Action 2 Incentives for the Public to Create opportunities through incentives, 5.4 Financial, Create and Maintain Local partnerships, and education to encourage City Staff Food Production and businesses, organizations, and individuals to *(CMO, NDS, Community Gardens establish areas of food and flora production to PR, EHR, OTH), *(Next Step) be tended by community members and shared Phase 3 1 locally. Resource Key: CMO — City Manager's Office; NDS— Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others • '•licy Plan Required Action escription Alignment Resources 1 Develop a Green Procurement City -developed procurement policy to guide 5.3 City Staff Policy *(New) climate -conscious purchases. *(CMO, FIN) Phase 2 Develop a City Sustainability Development of an operations guide used by City Staff 2 5.7 Operations Guide and Make the City will also assist community climate *(CMO, FIN, Available to Organizations partners in focusing efforts to reduce energy NDS, PW, PR, Throughout Iowa City *(New) use, consumption of resources, and waste. TS, EHR, COM, Phase 2 1 1 1 OTH) Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others 25 WITR .91 Fa Ri Un Action 1 Community Garden Expansions/Additions *(Next Step) Phase 1 2 Develop a Climate Action Strategic Communications Plan *(Next Step) Phase 1 Description Plan Required Alignment Resources Continue City expansion of garden plots, 5.1-5.2 Financial, community orchards. City Staff *(CMO, PR) Hire a consultant to develop a comprehensive 5.5 Financial, strategy, including advertising opportunities, City Staff media content, video, innovative technology *(CMO, Com, use, in-person engagement and utilization of EHR, 0TH) Climate Ambassadors Program Commission recommends including local imagery and information in communications to show direct connection to the residents of Iowa City. Resource Key: CMO — City Manager's Office; NDS — Neighborhood & Development Services; COM — Communications; PW — Public Works; EHR — Equity & Human Rights; TS —Transportation Services; PR — Parks and Recreation; FIN — Finance; OTH — Others 26 Ensuring Equity in our Climate Action Response Based upon the City Council's continuing Strategic Plan goal to "Promote Social Justice and Racial Equity" and understanding that equity plays a comprehensive role in environmental justice and community sustainability, the City's Climate Plan was developed with the goal of addressing equity throughout each action category. Using a "lens" of equity to frame issues, identify strategies, actions, and measures of success, and to evaluate impact is a key aspect of ensuring that our climate action work will be inclusive and support positive and neutral outcomes for all residents and visitors in Iowa City. The City plans to address intersecting issues of equity and climate with an assortment of approaches. First, the Plan provides general descriptions of climate actions, allowing our stakeholders to develop specific actions. Ultimately, our community is responsible for helping develop and express preference for the options most beneficial and equitable to the people of Iowa City. Second, the Climate Action Commission has been charged with evaluating proposed actions and recommending ways to equitably distribute benefits and impacts. Finally, the City has initiated foundational analysis of who must be invited to participate in this equity work. The Plan's "Call to Action" section provides guidance for focused equity review of proposed climate actions. The Equity Sub -Committee, active during the Climate Action Plan's development, identified the need to establish a standing group of individuals with the task of reviewing proposed climate actions to determine how each would impact a variety of populations. This means that as new ideas — such as the ones in this report — are proposed, an evaluation should be conducted to identify and if possible, address concerns of equity, should the idea move forward. The new Climate Action Commission has been given the responsibility to, "research, analyze, and promote climate actions, with particular attention to equity." The Commission can enlist a team of community members and establish rules for equity review. The Climate Action Plan calls for representative groups and individual community members to be involved in this effort, possibly encompassing veterans, persons who rent, senior adults, secondary and collegiate students, youth, persons with disabilities, immigrants, refugees, English -Language -Learners, persons who are homeless, households with low -incomes, and others characterized as a protected class. As we further develop the concepts in this report, evaluation is needed to determine potential outcomes of equity for various groups or locations within the community. From geographic application, cost, accessibility of information or resources, and other matters, the development of projects and programs identified within this report will be guided by data, available information, and stakeholder feedback. In order to help further equitable representation and impacts as they relate to climate change, the City has already initiated Actions 4.1 and 4.2. To begin to understand this work and the particular needs of Iowa City, we sought and received one of seven equity fellowship grants through the Urban Sustainability Director's Network. In summer 2019, the full-time Equity Fellow undertook a variety of exercises to begin analysis of equity and climate in our community. They completed an initial investigation of the populations and needs within Iowa City through many hours of in-person meetings with the public, organizations, and staff. A report with these findings will be completed in early 2020. This foundational work will be beneficial to our future equity efforts that actively engage and incorporate many more groups in our community in making decisions about climate action. 27 City Government Roles and Responsibilities City government will necessarily play a critical leadership role in the effort to achieve the City Council's carbon emission reduction targets. Success will depend on sustained leadership from elected officials, advocacy and oversight on progress from the Council -appointed Climate Action Commission, and a strong commitment from City staff. Clarity of roles and responsibilities will help ensure that the City can effectively lead a coordinated effort to significantly reduce our carbon emissions in line with adopted goals. City Council In August of 2019, the City Council took the bold step to declare a climate crisis and further requested immediate actions to begin to meet newly adopted emission reduction targets. Those accelerated actions are detailed in this plan. However, many of the actions will not be achievable without further political support from the City Council. The Council will need to make difficult decisions on regulatory and policy matters. Additionally, they will have to provide financial resources needed to support additional staff, incentive programs, public projects and service enhancements, and general community education. This may include raising taxes and/or other revenues and prioritizing such action over competing needs in the community. In the months and years ahead, the City Council will play a critical role in advancing climate action conversations and raising awareness both in the City organization itself and in the broader community. Similarly, climate action conversations will need elected champions at a regional and statewide level. With the Council's leadership on this topic, the Climate Action Commission and City staff will be empowered to engage and carry out the actions detailed in this report. Climate Action Commission On October 1, 2019, the City Council created the Iowa City Climate Action Commission (CAC). This eleven -member board will play a critical advisory role to the City Council, while simultaneously advocating for climate change activities in the community. The specific charges of the CAC include: I. advise the City Council on climate issues II. research, analyze, and promote climate actions, with particular attention to equity III. educate and engage with the public on climate action and the City's climate and sustainability goals IV. assist City staff, City Council, and members of the community with implementing approved initiatives that support the City's climate and sustainability goals, including the Climate Action and Adaptation Plan and any related or updated plan hereafter V. recommend to City Council updates to the Climate Action and Adaptation One of the first key duties of the CAC was to review the accelerated actions contained in this report and make recommendations to the City Council on any modifications needed to achieve the City Council's GHG emissions reduction goals. Now that this work plan is determined, the CAC will be asked to help shape these actions, promote our programs and messaging to the community, and track our progress toward our stated goals. The Commission has already began meeting and all of its members were appointed by the end of 2019. The Commission is supported by the newly created Division of Climate Action and Outreach in the City Manager's Office as described in the following section. ME City Staff For Iowa City to meet the expectations that were established in the climate crisis declaration, climate action must become part of the culture of the entire organization. Building this culture is a long-term effort and work to accelerate climate awareness within the organization has already commenced. As this awareness builds and expectations are established, the City Council and public will notice shifts in project design, service delivery, procurement and other aspects of the operation. While all employees will share a responsibility in this effort, it is important to build a dedicated team that can champion climate action both inside the organization and throughout the community. Thus, it is desired to create a formal Division of Climate Action and Outreach within the City Manager's Office. This office would join Equity/Human Rights, Human Resources, Communications, and Economic Development as standalone divisions in the City Manager's Office. Representatives of these offices will be empowered to work across City Departments and Divisions and will be also be represented in Department Head meetings and other strategic work groups in the city organization. The Division of Climate Action and Outreach is intended to be fully staffed with three positions no later than July 1, 2020. Official titles and job descriptions will be developed in the coming months; however, a brief description of the expected duties is outlined below: • Climate Action Coordinator (existing position): o Action plan implementation coordination o Climate Action Commission support o Strategic external / internal stakeholder relationships o Leading practice and policy research o Incentive program management o Grant writing o Outreach assistance • Climate Action Engagement Specialist (re -imagined duties of a position to soon be vacated by retirement): o Community awareness, education and marketing o Neighborhood outreach o Volunteer event coordination o Climate festival planning o Oversight of the Green AmeriCorps program • Climate Action Analyst (new position funded by previously allocated energy manager position): o Data collection and analysis o Reporting o Equity Analysis o Incentive program management o Grant writing o Outreach assistance 29 All three positions will report directly to the Assistant City Manager, who will be responsible for leading Climate Action efforts across the entire City organization. Other interns, work study students or seasonal hourly positions may supplement staffing throughout the year. One challenge in creating a new division is that City Hall is currently at full occupancy. Thus, there are some space needs constraints that need to be considered. In the short-term, staff is confident we can find a temporary solution within the walls of City Hall. However, a more permanent solution will likely need to be pursued in the coming years. To that end, staff has initiated preliminary discussions with the University of Iowa about co -locating the Division of Climate Action and Outreach with the University of Iowa's Office of Sustainability and the Environment. Both the City and University recognize the potential benefits of co -locating these teams in office space that is easily accessible to both the campus and general community and we have agreed to continue those discussions and explore possibilities. As existing staff capacity and future budgets allow, the City's climate action efforts can be greatly supplemented by redefining duties of existing staff and by making strategic additions throughout the organization. One example of shifting duties will take place immediately with our Economic Development Coordinator position. That position will assume responsibility for specific climate action related activities, including the building emission reduction incentive program in our industrial sector, as well as our soon to be proposed green business program. An example of new staff additions that can play an important role in accelerating our progress is in our Forestry operation. In order to increase community tree planting on public and private properties, new Forestry staff will be required. Other similar staff additions will be considered as we expand our efforts in the coming years and build off the momentum that the community and Council have created in the last several months. Since last fall, City staff from nearly all departments and divisions have been meeting regularly to explore opportunities to implement Climate Action Plan objectives within City operations and facilities. The staff, led by the Sustainability Coordinator, agreed upon Climate Plan -inspired projects to initiate at a staff level. Some of these ideas, like an idling reduction policy and expansion of composting at City buildings, have been started. The staff committee is about to begin development of a sustainable operations guide and assist with creating a green procurement policy (Actions 5.3 and 5.7). 30 Public Funding As indicated in the City Council August 2019 declaration of Climate Crisis, additional dollars will need to be dedicated to our climate efforts if we are to meet our goals. Local government funds will be needed to support public education/advocacy efforts, incentive programs, public projects and community -led carbon reduction efforts. In addition to funds that can support new efforts, the City Council should expect to see additional funding requests to support the climate enhancement efforts of existing city efforts. For example, housing rehabilitation projects will require additional funds to further energy efficiency and electrification goals. Similarly, public facility projects will require larger upfront dollar commitments if we are to push toward net -zero standards. Below is a review of available funding sources and a recommendation for the upcoming FY 2021 budget. Local Option Sales Tax (LOST) Iowa City is the Ione metropolitan area in the State of Iowa without a Local Option Sales Tax (LOST). The community passed a four-year LOST after the 2008 flood that aided the City in completing the Gateway Project and expanding our South Wastewater Treatment Plant to allow for the creation of the new Riverfront Crossings Park. A LOST requires 50% voter approval and could generate upwards of $8-$10 million per year. State law requires that 50% of proceeds be dedicated to property tax relief. The remaining balance can be spent in accordance with the approved ballot language. Utility Tax State law allows City Council's to adopt up to a 5% tax on gas and electric utilities. Iowa City currently has a 1% utility tax that generates approximately $900,000 per year. The City Council may designate these funds for any purpose. Iowa City uses current proceeds to support our Fire Department operations, as well as improvements to our roadways and rights -of -ways. G.O. Bonds The City can bond for climate action activities within parameters set by state law. Generally speaking, such bonds geared toward investment in private property (incentive programs) would be limited to $750,000 before triggering the need for a referendum. Depending on specific uses, those bonds would likely be taxable and subject to higher interest rates. Given bond limitations and costs of borrowing, staff does not believe General Obligation (G.O.) bonds are the best path forward for these types of uses. Instead, G.O. bonds should be used to enhance future capital projects by supplementing project budgets so that appropriate climate action aspects can be incorporated. Examples may include additional tree planting and water quality measures, building improvements, enhanced bicycle, pedestrian and transit accommodations, etc. Emergency Property Tax Levy Cities in Iowa have the ability to raise property taxes through an Emergency Levy. The cap on the Emergency Levy is $.27/per $1,000 in property value. Iowa City has historically not used the Emergency Levy, but could do so and raise upwards of $1 million in revenue annually for climate change initiatives. 31 Tax Increment Financing (TIF) Tax Increment Financing (TIF) can support climate change activities in limited circumstances. In most instances, TIF is only a viable tool if the investment made increases property values and creates the 'increment' between the old property value and the new property value. However, in some cases natural growth in property taxes across an entire district can create increment. This increment could be used to create incentives programs that leverage private dollars and ultimately help reduce the city's overall emissions. Other (Grants and Enterprise Funds) The City operates a number of enterprise funds and has access to state and federal grants that could also contribute to our climate action initiatives. For example, stormwater, refuse/landfill and parking funds could be used to expand water quality, waste and transportation initiatives. Similarly, state and federal grants can be accessed for specific projects that improve neighborhoods and transportation networks. While none of these funding sources are likely to be significant in the overall revenue mix, they can play a key role in advancing some objectives. Staff will evaluate these in the upcoming and future budgets and make recommendations that will help support key initiatives in this report. Recommendations for the upcoming FY 2021 Budget (July 1, 2020 through June 30, 2021) City staff began the FY 2021 budget process back in August with a City Council work session discussion on priorities. Our final budget recommendations to the City Council will be published and made available to the Council and general public in mid to late December. While it is too early in the process to provide specific details on our recommendations, we have developed a general framework for funding our climate action activities in the coming fiscal year. The staff in the Division of Climate Action and Outreach will be funded through the General Fund, thus ensuring stability in funding from year to year. However, staff will be recommending that the bulk of climate action activities (education, incentives, etc.) be funded through the use of the Emergency Levy. This property tax source will raise approximately $1 million dollars annually to support the actions in this report. The majority, if not all of these actions, will be scalable in nature and could be supplemented in the future if proven successful or similarly, could be scaled back should future Councils determine the Emergency Levy is needed to address other pressing matters facing the community. Staff also is hopeful that the increase in the Emergency Levy can be offset by a continued reduction in our Debt Service Levy. Thus, the community's overall tax rate should decline slightly or at minimum remain status quo. While the Emergency Levy will serve as the foundation for climate action funding, there are several other funding sources that will contribute directly to actions that need financial support. Specifically, staff will be recommending the use of stormwater utility funds for supplemental tree planting. Likewise, our recommendation will be to convert the Community Development Block Grant (CDBG) neighborhood set-aside to a low -to -moderate income neighborhood -based climate action set-aside ($75,000). The FY 2021 budget will also supplement certain capital projects (G.O. Bonds) with extra resources to incorporate more climate conscious designs. Staff will be recommending the use of TIF dollars for a new/existing building incentive program targeting some of our industrial properties that account for a significant portion of our community emissions. If successful, this program can be 32 expanded to other building types. Finally, staff will outline how parking funds could be used to pay for enhancements in our public transit system that will help us reach our goal of doubling our ridership by 2028. Specifics on all of these funding strategies were outlined in the budget recommendation approved by Council in March 2020. 33 Getting to 2030: Greenhouse Gas Emissions Scenarios In the simplest terms, Iowa City must reduce community carbon emissions from 1,020,073 metric tonnes of CO2e to 756,091 metric tonnes of CO2e by the end of 2030. Annual emissions are calculated for the prior year, so the most current and complete information is from 2018, leaving us with just over a decade to continually and methodically reduce carbon emissions. This calculated reduction of 263,982 metric tonnes will require a minimum annual decrease of approximately 22,000 metric tonnes (2-2.5% of total emissions). This report highlights the necessity of a comprehensive and immediate strategy to reduce emissions. All major sectors of buildings — residential, commercial, and industrial — must act to reduce CO2e by approximately 20% over the next decade. Transportation options will need to expand and improve, in order for our residents to feel comfortable replacing 25% of their personal vehicle car miles with bus transit, bicycling, walking, or private adoption of electric vehicles. The City of Iowa City will also target a 20% reduction in municipal operation emissions over the next decade. Advancing public and private tree plantings will play a small, but important role in continued reduction of emissions. The University of Iowa continues to aim to reduce use of coal at its power plant. Even if they implement no other solution but replacing coal with natural gas, this action brings our community closer to our goals. We note that although MiclAmerican Energy's continued investment in renewable energy sources will help us make tremendous progress, our calculations below focus upon reductions proposed outside of their investment that will help us reach our goal. As illustrated in the chart on the next page, emissions are generated throughout the community and calculations show that without action from each of these areas, carbon emissions targets cannot be reached by 2030. A few points of emphasis include: • Our primary focus needs to be on individual actions by community members, improvements to existing buildings, and in our transportation sector. • Further, over time our community focus must zero in on the most impactful actions (replacing natural gas, improving alternative transportation options) and target the highest emitters (industry and commercial). While actions of all sizes will continue to be helpful, our community must now move beyond accomplishing only "low hanging fruit" such as lighting retrofits to significantly reduce carbon levels. • Although we need a rapid transformation in this crisis, reduction targets are currently achievable at 2% increments. Over time, the City has seen reductions at these levels, and with a concentration upon accelerating these initiatives, increasing market demand for improved energy technology, and reducing overall energy usage, we should strive to exceed our 45% community -wide reduction target by the end of 2030. 34 A summary of how Iowa City could reach the targets for carbon emissions reduction is shown below. 1: •ns: 1,020,073 21 1 Target Emissions:19 Total Reduction Needed: 263,982 21,999 (Annual) Includes an annual population growth of 1.5% through 2030 12 Year Projection: 2018 GHG Reduction Reduced GHG Approximate number of energy accounts in Iowa City Average Per Unit Metric Tonnes Reduction Needed by 2030 Buildings 697,955 20-22% 145,043 Industrial Buildings 272,582 22% 59,968 20 2,998.4 Commercial Buildings 200,816 20% 40,163 2,000 20.1 Residential Buildings 224,557 20% 44,911 30,000 1.5 Transportation 158,746 25% 39,687 Replace 25% of personal vehicle miles Bus ridership doubled Electric vehicle adoption Increased walking Increased biking Increase in fuel-efficient vehicles U of I Power Plant Coal and Natural Gas 142,691 50% 71,346 Municipal Operations 44,194 20% 8'839 Plant trees residential, businesses, etc. Plant 10,000 (1-2") trees 150 (Resource cited CUFR Tree Carbon Calculator— US Department of Agriculture Forest Service) *All CO2e shown in Metric Tonnes Total 265,063 Note that energy usage slightly fluctuates each year, typically because of weather patterns but the goal is to continually demonstrate meaningful decreases in average carbon emissions over the next decade. The scenario above is intended to show the level of emissions generated by each major sector. If our community sees significant emissions reduction in one area, we can adjust the percentage reduction targets based on that success and refocus community efforts on decreasing carbon emissions in other areas. 35 Reductions Needed to Keep Pace with 2030 Target 1200000 1000000 800000 600000 400000 200000 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Buildings � Transportation � Power Plant Trees — — Emissions Reduction Trend Line Analysis and assumptions have been made for each of the major categories identified in the charts above. This report and suggested initiatives support this analysis: Industrial and Commercial Buildings • Iowa City buildings identified as Industrial have more than seven times more emissions from electricity than from natural gas and buildings identified as Commercial have more than 2.5 times emissions from electricity, than natural gas. Significant gains toward community goals can be made by incentivizing increased efficiency and pursuing electrification projects. • Encouraging Iowa City Industrial and Commercial buildings to track or benchmark energy usage would also be a positive step towards emissions reduction. Residential Buildings • Residential buildings generate 1.5 more emissions from electricity usage than from natural gas, however reduction in natural gas use will be critical, in accelerating emissions reduction by 2030 and in reducing carbon emissions to net -zero by 2050. • An emphasis on improved insulation and switching gas appliances to electric could improve energy efficiency by nearly 50% in many homes. Technology furthering these goals continues to improve over time. • Rental and multi -family properties are the most challenging to track and reduce energy consumption, therefore establishing partnerships and creating programs to assist with these efforts will be needed. 36 Transportation • The community (as a whole) must replace 1 out of every 4 personal vehicle miles with an alternative method (bus, walk, bike, EV); although the City's role will be to make it easier to access and provide transportation infrastructure, community partners can lead by encouraging their employees and customers to increasingly adopt alternative transportation options. • If just 30 new electric cars replace aging or existing vehicles in Iowa City, or 30 people begin to ride the bus, bike, or walk for all trips, it would mean a reduction in 150 metric tonnes of emissions, equivalent to planting about 10,000 trees. • National level data shows significant greenhouse gas emission savings by use of public transportation as an alternative to driving. Municipal Operations • Iowa City Landfill emissions are projected to be 65% of municipal operations in 2025, therefore finding a way to capture and/or reuse methane could be the City's most impactful project. • Recycling and composting activities will also help reduce City -generated emissions but as the Landfill takes in materials from all over Johnson County, impacts may be limited. • The City can lead the way by making our buildings and vehicles more efficient, but the City acting alone will not be enough to get us to our goal; the total of all City -generated emissions (buildings, transportation, landfill, and other sources) is about 6% of all emissions generated by residential, commercial, and industrial buildings combined. Planting Trees • Trees have many benefits, like establishing shade canopies and wind breaks, and are critical for our adaption goals, but sources vary greatly regarding the true GHG reductions from carbon sequestration. For example, if 10,000 trees were planted, the City's annual estimate of emissions reduction from carbon sequestration would start from approximately 150 metric tonnes or more, depending on the species planted. 37 Closing Summary and Acknowledgements Through its August 6, 2019 declaration of a climate crisis and simultaneous establishment of goals to reduce citywide carbon emissions 45% by 2030 and approach net -zero by 2050, the City Council indicated a clear desire for Iowa City to be a nationwide leader in local climate action. This report briefly summarizes the City's climate action planning in recent years and sets forth 65 actions that accelerate our path to meet the City's carbon emissions reduction targets. Of these 65 actions, approximately half will be dedicated actions beginning in 2020. The table below summarizes the number and type of proposed actions: Initiative Type Buildings Transportation Waste Adaptation Sustainable Lifestyle Total Initiatives Phase 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 Education 3 1 1 1 2 2 3 2 1 16 Incentives 5 4 1 1 1 1 1 1 1 16 Regulations 2 3 1 1 2 1 1 11 City Policy 2 2 1 1 1 2 9 Projects 1 1 1 1 2 1 4 2 13 Key: Phase 1 - 20201 Phase 2 - 2021 - 2023 /Phase 3 — 2024-2025 65 Number Proposed in Each Start Year: 2020-34 / 2021-23 / 2024-8 In order to carryout these actions, the City will need strong political leadership, an engaged Climate Action Commission and dedicated staff that can work across all departments and create strong relationships with external stakeholders and the general public. In order to jump-start this effort, this report recommends the creation of an Office of Climate Action and Outreach that will reside in the City Manager's Office. A core team of three staff members will be assembled to help focus on the implementation of the 65 actions in this report. Prior to moving to implementation, it is important that the residents and businesses of Iowa City, the Climate Action Commission and the City Council all have ample opportunity to weigh in with their thoughts and ideas on how best to move forward. This report is intended to serve as a starting place for accelerated action, but community engagement is critical to our success. The public must feel that they have ownership in these actions if we expect to reach our long-term targets. It is recommended that the Climate Action Commission consider this report and that they initiate opportunities for public comment before sending their recommendations related to the report to the City Council. In closing, staff would like to acknowledge the efforts of many in the community, including those on the Climate Action Commission, that have shared their ideas throughout the Climate Action and Adaptation Plan process, and in recent months as the City Council considered revised emission targets and accelerated actions. Your involvement has provided a strong foundation for our future work and will be critical in sustaining that effort in the years ahead. In Appendix Actions by Type Type Description Plan Area Education Promote Energy Efficiency and Performance Tips to the Public *(Next Step) Buildings Education Partner with Stakeholders to Promote Green Building and Rehabilitation *(New) Buildings Education Encourage the Local Realtor Community to Include Energy Performance in the Multiple Listing Services (MLS) Property Inventory *(New) Buildings Education Educate the community on energy usage for water treatment and delivery *(New) Buildings Education Significant Transportation Education and Outreach Campaigns *(New) Transportation Education Launch an Eco -Driving Campaign Alongside Employers *(New) Transportation Education Engage the Public to Compost Organic Waste *(Next Step) Waste Education Education Campaigns for Neighborhoods to Reduce Waste/Consumption at the Source *(Next Step) Waste Education Develop a Climate Ambassador Team *(New) Adaptation Education Educate and Coordinate with Local Agencies on Health Impacts *(Next Step) Adaptation Education Establish "Resilience Hubs" *(New) Adaptation Education Concentrated Education Campaign for Private Properties about Native Plantings, Permeable Pavement, Rain Gardens, Soil Health, Rain Barrels and Cisterns *(Next Step) Adaptation Education Coordinated Efforts with Local Emergency Agencies and Utilities *(Next Step) Adaptation Education Host Sustainability Forum and Events *(Next Step) Sustainable Lifestyle Education Launch a Green Business Program: "Climate Action at Work" *(New) Sustainable Lifestyle Education Local procurement campaign - buy -in from local commercial groups *(New) Sustainable Lifestyle Incentives Offer Free Home Energy Tests through Green Iowa AmeriCorps *(Next Step) Buildings Incentives Enhance Energy Standards for City Rehabilitation Projects *(Next Step) Buildings Incentives Coordinate Neighborhood Energy Blitz Events *(New) Buildings Incentives Launch a TIF -funded climate action incentive program aimed at reducing industrial energy consumption *(New) Buildings Incentives Develop or Partner with Local Stakeholders on a Comprehensive Climate Action Rehabilitation Program *(New) Buildings Incentives Consider a Building Permit Fee Rebate Program for Enhanced Energy Standards *(New) Buildings Incentives Initiate a Net -Zero House Design Competition *(New) Buildings Incentives Complete a Net -Zero Demonstration Rehabilitation Project *(New) Buildings Incentives Launch an Electrification Incentive Program *(New) Buildings Incentives Incentivize Energy Enhancements and Building Re- and Retro -Commissioning for Participants in the Energy Benchmarking Program *(New) Buildings Incentives Incentivize Public Transit Options *(New) Transportation Incentives Explore Electric Vehicle (EV) Incentives Based on the Readiness Plan *(New) Transportation Incentives Incentivize Construction Waste Diversion *(Next Step) Waste Incentives Partner with ProjectGreen on a Tree Planting Partnership; Incentives for Private Tree Planting *(New) Adaptation Incentives Expand Community Climate Action Grants *(Next Step) Sustainable Lifestyle Incentives Incentives for the Public to Create and Maintain Local Food Production and Community Gardens *(Next Step) Sustainable Lifestyle 39 Regulation I Create a More Robust Energy Code Inspection Program *(New) Buildings Regulation Incorporate Stricter Energy Standards into Tax Increment Financing Policies *(New) Buildings Regulation Incorporate Strict Energy Standards into Height and Density Bonuses *(New) Buildings Regulation Initiate Energy Benchmarking Requirements *(New) Buildings Regulation Develop Climate Action Requirements for all Existing and Future Rental Permits *(New) Buildings Regulation Review Parking Regulations and Consider Innovative Ways to Encourage Alternative Modes of Travel *(New) Transportation Regulation Require Climate Change Analysis for New Subdivisions and Rezonings *(New) Transportation Regulation Develop a Policy/Ordinance Requiring Specific Demolition or Deconstruction Recycling Standards/Procedures *(New) Waste Regulation I Mandating signage to assist waste collection *(New) Waste Regulation Street Tree Ordinance *(Next Step) Adaptation Regulation Increase Tree Planting Requirements in Landscaping Standards, Parking Lot Standards and Upon Renewal of Rental Permits *(New) Adaptation Policy Advocate for State Adoption of Advanced Energy Codes *(New) Buildings Policy Advocate for Aggressive Energy Code Development and Adoption *(New) Buildings Policy Establish an Electric and Fuel -Efficient Vehicle Purchasing Policy *(New) Transportation Policy Track Adherence to City Idling Policy *(Next Step) Transportation Policy Review Transportation Subsidies, Work Schedules and Tele -Work Policies for City Employees *(New) Transportation Policy Require All Park/Public Space Rentals to Recycle and Use "Green" Event Best Practices *(New) Waste Policy Develop Review Standards for New City Facility Construction and Major Rehabilitation that Accounts for Climate Adaptation Principles *(New) Adaptation Policy Develop a Green Procurement Policy *(New) Sustainable Lifestyle Policy Develop a City Sustainability Operations Guide and Make Available to Organizations Throughout Iowa City *(New) Sustainable Lifestyle Projects I Solar Partnership with MiclAmerican *(New) Buildings Projects Net -Zero Public Housing *(New) Buildings Projects Municipal Building Efficiency and Electrification *(New) Buildings Projects Complete the Transit Study and Implement Recommendations to Bolster Service and Increase Ridership *(Next Step) Transportation Projects Complete Electric Vehicle (EV) Readiness Plan and Implement Recommendations *(Next Step) Transportation Projects Achieve Gold Friendly Bicycle Friendly Community Status and Begin Work Toward Platinum Status *(Next Step) Transportation Projects Initiate a Methane Feasibility Study *(Next Step) Waste Projects Flood Mitigation and Stormwater Management Programs/Projects; Buyouts *(Next Step) Adaptation Projects Continue Implementation of the Natural Areas Management Plan *(Next Step) Adaptation Projects I Expand Public Tree Planting *(Next Step) Adaptation Projects Equity Review of Neighborhood and Population Outreach; Develop Outreach Plan for Populations Highly Impacted by Climate Change *(Next Step) Adaptation Projects Develop a Climate Action Strategic Communications Plan *(Next Step) Sustainable Lifestyle Projects Community Garden Expansions/Additions *(Next Step) Sustainable Lifestyle 40