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2016-01-21 Info Packet
^r a -' `•®���� CITY COUNCIL INFORMATION PACKET CITY OF IOWA CITY January 21, 2016 www.icgov.org IN Council Tentative Meeting Schedule IP2 Agenda 1133 Agenda JANUARY 21 WORK SESSION JANUARY 25 JOINT PUBLIC ENTITIES MEETING MISCELLANEOUS IN Email from City Manager: Registration for the Planning and Zoning Workshops now open I135 Memo from Finance Director: Long-term Debt Disclosure Report IP6 Comprehensive Annual Financial Report (CAFR) DRAFT MINUTES IP7 Planning and Zoning Commission: January 7 ��.® -•L -w� CITY OF IOWA CITY Date Thursday, January 21, 2016 01-21-16 City Council Tentative Meeting Schedule IN Subject to change January 21, 2016 Time Meeting Location 5:00 PM Special Work Session Emma J. Harvat Hall (Strategic Planning & Budget) Monday, January 25, 2016 4:00 PM Reception NL Council Chambers 4:30 PM Joint Public Entities Meeting North Liberty Tuesday, February 2, 2016 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, February 16, 2016 5:00 PM Conference Board Meeting Emma J. Harvat Hall Work Session 7:00 PM Formal Meeting Tuesday, March 1, 2016 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Wednesday, March 23, 2016 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Special Formal Meeting Tuesday, April 5, 2016 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, April 19, 2016 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, May 3, 2016 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, May 17, 2016 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, June 7, 2016 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, June 21, 2016 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting M CITY OF IOWA CITY 410 East Washington Street Iowa City, Iowa 52240-1826 (3 19) 356-5000 (319) 356-5009 FAX www.icgov.org City Council Work Session Agenda January 21, 2016 Emma J. Harvat Hall - City Hall 410 E. Washington Street 5:00 PM Strategic Planning Discussion Budget Discussion z joint Meeting - REVISED Johnson County Board of Supervisors - Iowa City Community School District - City of Iowa City - City of Coralville - City of North Liberty - Other Johnson County Municipalities and School Districts Monday, January 25 North Liberty City Council Chambers 1 Quail Creek Circle Reception 4:00 p.m. Meeting 4:30 p.m. AGENDA 1. Call to order 2. Welcome and Introductions 3. Discussion/update of the following: a. Crisis Intervention Team (CIT) training including visit to the Center for Health Care Services and Haven for Hope in San Antonio, Texas (Johnson County) b. Facilities Master Plan (ICCSD) c. Attendance Zones (ICCSD) d. Transportation Renewal (ICCSD) e. Bell Schedule (ICCSD) f. Regional affordable housing work group (Johnson County) g. Regional sustainability work group (Johnson County) h. General entity updates i. Next meeting date and time j. Other 4. Public comment 5. Adjournment Entity in parenthesis requested the item be placed on the agenda. Joint Meeting Johnson County Board of Supervisors - Iowa City Community School District - City of Iowa City - City of Coralville - City of North Liberty - Other Johnson County Municipalities and School Districts Monday, January 25 North Liberty City Council Chambers 1 Quail Creek Circle Reception 4:00 p.m. Meeting 4:30 p.m. AGENDA 1. Call to order 2. Welcome and In 3. Discussion/update of tike following: a. Facilities Master Nan (ICCSD) b. Attendance Zones (ICCSD) c. Transportation Renewal (ICC; d. Bell Schedule (ICCSD) e. Regional affordable houin f. Regional sustainability w 1 g. Crisis Intervention Tea (t Health Care Services a d H2 County) h. General entity upd es i. Next meeting date nd time j. Other 4. Public comment S. Adjournment work group (Johnson County) group (Johnson County) T) training including visit to the Center for ven for Hope in San Antonio, Texas (Johnson Entity in parenthesis requested the item be placed on the agenda. Marian Karr From: Marian Karr Sent: Thursday, January 21, 2016 7:56 AM To: Marian Karr Subject: FW: [APAIowaNews] Registration for the Planning and Zoning workshopsnow open Attachments: ATT00001.txt From: Tom Markus Sent: Wednesday, January 20, 2016 1:46 PM To: Council Subject: FW: [APAIowaNews] Registration for the Planning and Zoning workshops now open Something Council members may want to consider. IN From: apaiowanews-bounces@list.planning.org [mailto:apaiowanews-bounces@list.planning.org] On Behalf Of Taylor, Gary D [C R P] Sent: Tuesday, January 19, 2016 5:22 PM To: Iowa CoZo; Iowa list; communities Subject: [APAIowaNews] Registration for the Planning and Zoning workshops now open Registration is now open for the Spring 2016 Introduction to Planning and Zoning Workshops. For more information and the link to online registration, go to http://blogs.extension.iastate.edu/plannin Bg LUZ/ and click on the "Intro to Planning and Zoning Workshops" tab at the top left of that page. Note that we have moved exclusively to an online registration system for the workshops. When you register you will have the option to pay by credit card, or to be invoiced via email. The dates and locations are: Monday, March 21 - Okoboji - Arrowwood Resort, 1405 Highway 71 Tuesday, March 22 - Clear Lake - Best Western Holiday Lodge, 2023 7th Ave North Tuesday, April 5 - Decorah - Hotel Winneshiek, 104 East Water Street Wednesday, April 6 - Cedar Rapids - Clarion Hotel & Convention Center, 525 33rd Ave. SW Monday, April 11 - Sioux City - Bev's on the River, 1110 Larsen Park Road Tuesday, April 19 - Creston - Supertel Inn & Conference Center, 800 Laurel Street The Introduction to Planning and Zoning for Local Officials workshop is a three-hour session designed to introduce the basic principles of land use planning and development management to elected officials, planning and zoning officials, and board of adjustment members without formal training in the subjects. Using case scenarios in a highly -interactive format, the workshop highlights issues frequently faced in the land use process. The workshop is offered annually in multiple locations across the state. Locations change from year-to-year so that city and county officials are able to attend a location near them at least once every two years. All workshops begin with registration and a light supper at 5:30 p.m. The program begins at 6:00 p.m. and concludes by 8:45 p.m. The registration fee is $65 per individual. This fee is reduced to $55 per individual if a city or county registers 5 or more officials to attend. The fee covers the workshop instruction, workshop materials, and supper. The workshop has been pre -approved by the Iowa Municipal Finance Officers Association and the Iowa League of Cities for credits toward certification. Gary Taylor, J.D., AICP Interim Director, Community & Economic Development Program Iowa State University Extension & Outreach Associate Professor, Community & Regional Planning 2321 North Loop Drive, Suite 121 Ames, IA 50010 gtaylor(iOastate. edu Ph: 515.294.8397 r PCITY OF IOWA CITY MEMORANDUM Date: January 20, 2016 To: Tom Markus, City Manager From: Dennis Bockenstedt, Finance Director RE: Long-term Debt Disclosure Report I �1 On October 6, 2015, the City Council adopted a new Deb Management Policy. As part of that policy, an annual debt report was to be submitted within 210 days after the fiscal year-end to the City Manager and the City Council. The City's fiscal year 2015 ended on June 30, 2015, and this report is intended to provide information in regards to that fiscal year. According to the policy, the annual debt report should include, at a minimum, the following information: • General Long-term Debt Obligations: • Total actual and taxable property valuations • The historical trend of actual and taxable property valuations • List of the City's 10 largest taxpayers • Summary of all of the City's direct, long-term debt obligations • Debt per capita (GO Debt and TIF Revenue Debt) • Debt per total assessed value (GO Debt and TIF Revenue Debt) • City's debt versus the legal debt limit • Revenue -Secured Debt Obligations: • Summary of the system • Summary of the system's rates and charges • The historical trend of system's sales and charges • Coverage ratios for system • Number of system customers, if applicable • List of system's 10 largest users, if applicable According to the policy, the annual debt report should also include a list of any potential upcoming debt issues and a summary of any material events that have occurred in the past year. The report may also include any other relevant information that is significant to the City's debt program or ability to repay its debt obligations. During fiscal year 2015, the City incurred to following significant events related to its bond obligations: • Principal and interest payment delinquencies: None • Non-payment related defaults, if material: None • Unscheduled draws on debt service reserves reflecting financial difficulties: None • Unscheduled draws on credit enhancements relating to the Bonds reflecting financial substitution of credit or liquidity providers, or their failure to perform: None • 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 January 20, 2016 Page 2 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: None • Modifications to rights of Holders of the Bonds, if material: None • Bond calls (excluding sinking fund mandatory redemptions), if material, and tender offers; a Notice of Material Event was timely filed for each of these events: i. 2005A GO bond maturities called on July 1, 2014 ii. 2006A GO bond maturities called on July 1, 2014 iii. 2006B GO bond maturities called on July 1, 2014 iv. 2006C GO bond maturities called on July 1, 2014 v. 2007A GO bond maturities called on July 1, 2014 • Defeasances of the Bonds; a Notice of Material Event was timely filed for this event: i. 2009F Parking Revenue Bonds defeased on November 12, 2014 • Release, substitution, or sale of property securing repayment of the Bonds, if material: None • Rating changes on the Bonds: i. Filed notice of Moody's rating upgrades from April 2010 that had not previously been filed for parking, water, and sewer revenue bonds • Bankruptcy, insolvency, receivership or similar event of the Issuer: None • 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: None • Appointment of a successor or additional trustee or the change of name of a trustee, if material: None In the next 180 days, we are currently anticipating the following potential bond issues: • 2016 Sewer Revenue Refunding Bonds — to refund 2008C Sewer Revenue Bonds - $10,645,000 • 2016 Water Revenue Refunding Bonds Refund — to refund 2008D Water Revenue Bonds - $4,165,000 • 2016 General Obligation Bonds — 2016 CIP Program - $9,660,000 Other potential bond issues include: • 2016 Taxable TIF Revenue Capital Loan Note — Chauncey Building grant - $12,635,000 Attached to this memo are summaries that include the additional financial and debt information mentioned above. This information along with our Fiscal Year 2015 Comprehensive Annual Financial Report (CAFR) will be provided to our bondholders and will be posted on the Electronic Municipal Market Access (EMMA) web site in accordance with Municipal Securities Rulemaking Board (MSRB) rules. This information must be posted by January 26, 2016 in order to comply with the continuing disclosure certificates on our outstanding bonded debt. We are not aware of any material or significant events that will prevent the City from meeting its current outstanding bonded debt obligations. CITY PROPERTY VALUES IOWA PROPERTY VALUATIONS In compliance with Section 441.21 of the Code of Iowa, the State Director of Revenue annually directs the county auditors to apply prescribed statutory percentages to the assessments of certain categories of real property. The 2013 final Actual Values were adjusted by the Johnson County Auditor. The reduced values, determined after the application of rollback percentages, are the Taxable Values subject to tax levy. For assessment year 2013, the Taxable Value rollback rate was 54.4002% of Actual Value for residential property; 43.3997% of Actual Value for agricultural property; 95% of Actual Value for commercial, industrial and railroad properties and 100% of Actual Value for utility property. The Legislature's intent has been to limit the growth of statewide taxable valuations for the specific classes of property to 3% annually. Utility property is limited to an 8% annual growth. Political subdivisions whose taxable valuations are thus reduced or are unusually low in growth are allowed to appeal the valuations to the State Appeal Board, in order to continue to fund present services. PROPERTY VALUATIONS (1/1/2013 Valuation Taxes payable July 1, 2014 to June 30, 2015) TIF increment (used to compute debt service levies and constitutional debt limit) $21,131,574 $21,131,574 Taxed separately Ag. Land & Buildings $3,680,920 $1,597,501 Gas & Electric Utilities $78,642,915 $47,004,994 2013 GROSS TAXABLE VALUATION BY CLASS OF PROPERTY') Residential Commercial, Industrial and Utility Gas & Electric Utilities Railroads Total Gross Taxable Valuation Taxable Valuation $1,894,079,854 1,172,284,698 47,004,994 3.636.130 $3,117,005,676 1) Excludes Taxable TIF Increment and Ag. Land & Buildings. Percent Total 60.77% 37.61% 1.51% 0.11% 100.00% Taxable Value 100% Actual Value (With Rollback) Residential $3,488,112,611 $1,894,079,854 Commercial 1,144,437,631 1,086, 556,293 Industrial 80,153,614 76,128,877 Railroads 3,827,506 3,636,130 Utilities w/o Gas & Electric 9,599,528 9,599,528 Gross valuation $4,726,130,890 $3,070,000,682 Less military exemption (2,939,122) (2,939,122) Net valuation $4,723,191,768 $3,067,061,560 TIF increment (used to compute debt service levies and constitutional debt limit) $21,131,574 $21,131,574 Taxed separately Ag. Land & Buildings $3,680,920 $1,597,501 Gas & Electric Utilities $78,642,915 $47,004,994 2013 GROSS TAXABLE VALUATION BY CLASS OF PROPERTY') Residential Commercial, Industrial and Utility Gas & Electric Utilities Railroads Total Gross Taxable Valuation Taxable Valuation $1,894,079,854 1,172,284,698 47,004,994 3.636.130 $3,117,005,676 1) Excludes Taxable TIF Increment and Ag. Land & Buildings. Percent Total 60.77% 37.61% 1.51% 0.11% 100.00% TREND OF VALUATIONS Assessment Payable Taxable Valuation Taxable TIF Year Fiscal Year 100% Actual Valuation (With Rollback) Increment 2010 2011-12 $4,520,142,100 $2,848,162,606 $25,408,838 2011 2012-13 4,615,527,744 2,960,112,178 11,712,327 2012 2013-14 4,668,318,992 3,036,012,368 14,113,908 2013 2014-15 4,826,647,177 3,136,795,629 21,131,574 2014') 2015-16 4,950,557,795 3,182,641,961 33,331,128 1) The City's 1/1/2014 valuations are now available from the State of Iowa and became effective July 1, 2015. The 100% Actual Valuations, before rollback and after the reduction of military exemption, include Ag. Land & Buildings, Taxable TIF Increment and Gas & Electric Utilities. The Taxable Valuations, with the rollback and after the reduction of military exemption, include Gas & Electric Utilities and exclude Ag. Land & Buildings and Taxable TIF Increment. Iowa cities certify operating levies against Taxable Valuation excluding Taxable TIF Increment and debt service levies are certified against Taxable Valuation including the Taxable TIF Increment. LARGER TAXPAYERS Set forth in the following table are the persons or entities which represent larger taxpayers within the boundaries of the City, as provided by the Johnson County Auditor's Office. No independent investigation has been made of and no representation is made herein as to the financial condition of any of the taxpayers listed below or that such taxpayers will continue to maintain their status as major taxpayers in the City. With the exception of the electric and natural gas provider noted below (which is subject to an excise tax in accordance with Iowa Code chapter 437A), the City's mill levy is uniformly applicable to all of the properties included in the table, and thus taxes expected to be received by the City from such taxpayers will be in proportion to the assessed valuations of the properties. The total tax bill for each of the properties is dependent upon the mill levies of the other taxing entities which overlap the properties. Taxpayer') Mid American Energy Co. ACT, Inc. Ann Gerdin Trust Dealer Properties IC LLC Procter & Gamble LLC Alpla, Inc. CCAL 100 Hawk Ridge Drive LLC National Computer Systems Inc. Wal-Mart Real Estate Kobrin Development Company Inc. 1) Source: City of Iowa City Assessor's Office — 2014 Annual Report 1/1/2013 Taxable Valuations Type of Property/Business (in thousands) Utility $44,302 Commercial 44,151 Commercial 21,233 Commercial 18,676 Industrial 15,419 Industrial 14,616 Residential 13,171 Commercial 12,428 Commercial 12,078 Commercial & Residential 11,712 1) Source: City of Iowa City Assessor's Office — 2014 Annual Report RECENT PROPERTY TAX LEGISLATION During the 2013 legislative session, the Iowa General Assembly enacted Senate File 295 (the "Act"), which the Governor signed into law on June 12, 2013. Among other things, the Act (i) reduces the maximum annual taxable value growth percent, due to revaluation of existing residential and agricultural property, from the current 4% to 3%, (ii) assigns a "rollback" (the percentage of a property's value that is subject to tax) to commercial, industrial and railroad property of 95% for the 2013 assessment year and 90% for the 2014 assessment year and all years thereafter, (iii) creates a new property tax classification for multi -residential properties (mobile home parks, manufactured home communities, land -lease communities, assisted living facilities and property primarily used or intended for human habitation containing three or more separate dwelling units) ("Multi -residential Property") that begins in the 2015 assessment year, and assigns a declining rollback percentage of 3.75 percent to such properties for each subsequent year until the 2021 assessment year (the rollback percentage for Multi -residential Properties will be equal to the residential rollback percentage in the 2022 assessment year and thereafter) and (iv) exempts 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. Prior to Fiscal Year 2017-18, the appropriation is a standing unlimited appropriation, but beginning in fiscal year 2017-18 the standing appropriation cannot exceed the actual fiscal year 2016-17 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% from 4%, the gradual transition for Multi -residential Property from the commercial rollback percentage (100% of Actual Value) to the residential rollback percentage (currently 54.4002% of Actual Valuation), 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 of Iowa's discretion in establishing the annual replacement amount that is appropriated each year commencing in fiscal year 2017-18, the impact of the Act on the City's future property tax collections is uncertain and the City is unable to estimate the financial impact of the Act's provisions on the City's future operations. In Moody's Investor Service US Public Finance Weekly Credit Outlook, dated May 30, 2013, Moody's Investor Service ("Moody's") projected that local governments in the State of Iowa are likely to experience modest reductions in property tax revenues starting in fiscal year 2014-15 as a result of the Act, with sizeable reductions possible starting in fiscal year 2017-18. According to Moody's, local governments that may experience disproportionately higher revenue losses include regions that have a substantial commercial base, a large share of Multi -residential Property (such as college towns), or significant amounts of telecommunications property. Notwithstanding any decrease in property tax revenues that may result from the Act, Iowa Code section 76.2 provides that when an Iowa political subdivision issues general obligation 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 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. CITY INDEBTEDNESS DEBT LIMIT Article XI, Section 3 of the State of Iowa Constitution limits the amount of debt outstanding at any time of any county, municipality or other political subdivision to no more than 5% of the actual value of all taxable property within the corporate limits, as taken from the last state and county tax list. The debt limit for the City, based on its 2013 valuation currently applicable to the fiscal year 2014-15 is as follows: 2013 Actual Valuation of Property $4,829,586,299 Less: Military Exemption (2,939,122) Net Actual Valuation of Property $4,826,647,177 Legal Debt Limit of 5% 0.05 Legal Debt Limit $241,332,359 Less: Total G.O. Debt (59,340,000) Less: TIF Revenue Debt (2,655,000) Less: Letter of Credit (UniverCity) (2,005,000) Less: Other legal indebtedness (TIF rebates) (13,506,000) Net Debt Limit $163,826,359 DIRECT DEBT General Obligation Debt Supported by Property Taxes and Tax Increment Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 6/30/15 6/08A $9,150,000 City Improvements 6/18 $3,085,000') 10/088 17,005,000 Refunding 6/18 4,530,000 6/09C 6,685,000 City Improvements 6/19 2,900,000 6/09E 5,840,000 Refunding 6/16 915,000 8/106 7,420,000 City Improvements 6/20 3,840,000 6/11A 7,925,000 City Improvements 6/21 4,785,000 6/11 C 10,930,000 Refunding 6/21 7,385,000 6/12A 9,070,000 City Improvements 6/22 6,565,000 7/13A 7,230,000 City Improvements 6/23 6,505,000 6/14 11,390,000 City Improvements 6/24 10,455,000 6/15 7,785,000 City Improvements 6/25 7,785,000 Subtotal $58,750,000 1) City intends to call Series 2008A with cash on July 1, 2015. General Obligation Debt Supported by Enterprise Funds Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 6/30/15 6/14 $590,000 City Improvements 6/17 $590,000 Total General Obligation Debt Subject to Debt Limit: $59,340,000 Annual Fiscal Year General Obligation Debt Service Payments Total Outstandin Total $59,340,000 $64,981,085 OTHER DEBT The City has revenue debt payable solely from the net revenues of the City's Urban Renewal Areas as follows: Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 6/30/15 11/12D $2,655,000 Developer Grant 6/32 $2,655,000 The City has revenue debt payable solely from the net revenues of the Municipal Parking System as follows: Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 6/30/15 11/09F $9,110,000 Parking 7/17 $01) 1) The City has advance funded $6,605,000 of the Series 2009F Bonds maturing 2015 through 2024. Funds are being held in escrow until the July 1, 2017 call date. The City has revenue debt payable solely from the net revenues of the Municipal Water System as follows: Date Original Principal & Fiscal Year Principal Interest 2015-16 $11,300,000 $12,813,675 2016-17 10,600,000 11,828,500 2017-18 9,535,000 10,500,756 2018-19 7,090,000 7,789,681 2019-20 6,500,000 7,008,694 2020-21 5,220,000 5,552,629 2021-22 3,635,000 3,829,850 2022-23 2,700,000 2,819,350 2023-24 1,880,000 1,940,350 2024-25 880,000 897,600 Total $59,340,000 $64,981,085 OTHER DEBT The City has revenue debt payable solely from the net revenues of the City's Urban Renewal Areas as follows: Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 6/30/15 11/12D $2,655,000 Developer Grant 6/32 $2,655,000 The City has revenue debt payable solely from the net revenues of the Municipal Parking System as follows: Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 6/30/15 11/09F $9,110,000 Parking 7/17 $01) 1) The City has advance funded $6,605,000 of the Series 2009F Bonds maturing 2015 through 2024. Funds are being held in escrow until the July 1, 2017 call date. The City has revenue debt payable solely from the net revenues of the Municipal Water System as follows: Date Original Final of Issue Amount Purpose 10/08D $7,115,000 Water Refunding 5/098 9,750,000 Water Refunding 6/12C 4,950,000 Water Refunding Total 7 $16,365,000 Principal Final Outstanding Maturity As of 6/30/15 7/24 $4,920,000 7/25 7,410,000 7/22 4,035,000 $16,365,000 The City has revenue debt payable solely from the net revenues of the Municipal Sewer System as follows: INDIRECT GENERAL OBLIGATION DEBT 1/1/2014 Percent Less G.O. Debt Service Paid by Enterprise Funds3) Principal Date Original In City Final Outstanding of Issue Amount Purpose Maturity As of 6/30/15 10/08C $24,280,000 Sewer Refunding 7/22 $14,345,000 5/09A 8,660,000 Sewer Refunding 7/25 6,760,000 4/10A 15,080,000 Sewer Refunding 7/20 7,480,000 Total $28,585,000 INDIRECT GENERAL OBLIGATION DEBT City's share of total overlapping debt $28,603,271 1) Taxable Valuation excludes military exemption and includes Ag. Land & Buildings, Taxable TIF Increment and all Utilities. 2) Includes general obligation bonds, PPEL notes, certificates of participation and new jobs training certificates. 3) Valuations for all counties, from Dept. of Mgmt. website. DEBT RATIOS Debt/Actual Market Value Debt/67,862 G.O. Debt ($4,826,647,177)1) Population2) Total General Obligation Debt 1/1/2014 Percent Less G.O. Debt Service Paid by Enterprise Funds3) City's Taxing District Taxable Valuation') In City G.O. Debt2) Proportionate Share $2,655,000 0.06% Johnson County $7,537,032,197 42.23% $12,830,000 $5,418,109 Iowa City CSD 5,600,477,037 56.83% 17,975,000 10,215,193 Clear Creek-Amana CSD3) 1,063,288,907 0.01% 48,540,000 4,854 Kirkwood Comm. College 3) 23,254,278,303 13.69% 94,705,000 12,965,115 City's share of total overlapping debt $28,603,271 1) Taxable Valuation excludes military exemption and includes Ag. Land & Buildings, Taxable TIF Increment and all Utilities. 2) Includes general obligation bonds, PPEL notes, certificates of participation and new jobs training certificates. 3) Valuations for all counties, from Dept. of Mgmt. website. DEBT RATIOS Debt/Actual Market Value Debt/67,862 G.O. Debt ($4,826,647,177)1) Population2) Total General Obligation Debt $59,340,000 1.23% $874.42 Less G.O. Debt Service Paid by Enterprise Funds3) (590.000) Net G.O. Debt Paid by Taxes and Tax Increment $58,750,000 1.21% $865.73 TIF Revenue Debt $2,655,000 0.06% $39.12 City's share of total overlapping debt $28,603,271 0.50% $421.49 1) Based on the City's 1/1/2013 100% Actual Valuation; includes Ag Land, Ag Buildings, all Utilities and TIF Increment. 2) Population based on the City's 2010 U.S. Census. 3) G.O. debt abated by Water Revenues. 8 TAX RATES FY2010-11 FY2011-12 FY2012-13 FY2013-14FY2014-15 $/$1.000 / 1 000 $/$1.000 $/$1.000 $/$1.000 Johnson County 7.22207 6.98984 6.74909 6.73712 6.74168 City of Iowa City 17.75655 17.84150 17.26864 16.80522 16.70520 Iowa City CSD 14.68972 14.59055 14.07327 13.68792 13.69999 Clear Creek-Amana CSD (Clear Creek) 15.71002 15.54876 15.31063 15.31055 15.06516 Kirkwood Comm. College 0.92566 0.99870 1.07888 1.06473 1.05754 City Assessor 0.23472 0.24632 0.24453 0.25873 0.23866 County Ag. Extension 0.08307 0.08358 0.08146 0.08160 0.08119 State of Iowa 0.00340 0.00320 0.00320 0.00330 0.00330 Total Tax Rate - City Resident: Iowa City CSD 40.91519 40.75369 39.49917 38.63862 38.52756 Clear Creek-Amana CSD (Clear Creek) 41.93549 41.71190 40.73653 40.26125 39.89273 LEVY LIMITS A city's general fund tax levy is limited to $8.10 per $1,000 of taxable value, with provision for an additional $0.27 per $1,000 levy for an emergency fund which can be used for general fund purposes (Code of Iowa, Chapter 384, Division 1). Cities may exceed the $8.10 limitation upon authorization by a special levy election. Further, there are limited special purpose levies which may be certified outside of the above described levy limits (Code of Iowa, Section 384.12). The amount of the City general fund levy subject to the $8.10 limitation is $8.10 for fiscal year 2014-15. The City does levy costs for operation and maintenance of publicly owned Transit, tort liability and other insurance, support of the public library, police and fire retirement, FICA and (PERS and other employee benefits expenses in addition to the $8.10 general fund limit as authorized by law. In addition, the City has not established an emergency fund levy for fiscal year 2014-15. Debt service levies are not limited. CITY FUNDS ON HAND (Cash and Investments as of June 30, 2015, in thousands) City Operating Funds $118,315 City Restricted Funds 76,790 Total $195,105 CITY OF IOWA CITY, IOWA PROPERTY TAX BUDGETS 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. 10 Percent of Total as Collection Total Tax Current Tax Levy Delinquent Tax Total Tax a Percent of Year Levied Collections Collected Collections Collections Lev 2006 36,460 36,654 100.5 44 36,698 100.7 2007 39,094 38,947 99.6 13 38,960 99.7 2008 39,973 39,768 99.5 70 39,838 99.7 2009 43,168 43,118 99.9 18 43,136 99.9 2010 45,393 45,318 99.8 17 45,335 99.9 2011 47,789 47,826 100.1 8 47,834 100.1 2012 49,595 49,543 99.9 1 49,544 99.9 2013 50,407 50,139 99.5 3 50,142 99.5 2014 50,307 49,835 99.1 1 49,836 99.1 2015 51,609 51,292 99.4 8 51,300 99.4 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. 10 January 22, 2016 Finance and Operating Report For the City of Iowa City, Iowa Pursuant to Securities and Exchange Commission Rule 15c2-12 Through the Fiscal Year Ended June 30, 2015 Financial and Operating Data Water System Revenue Sewer System Revenue and Parking System Revenue To the extent not included in the City's Financial Statements, all information the City of Iowa City has agreed to provide in its annual reports, as it relates to its outstanding Water System Revenue, Sewer System Revenue, and Parking System Revenue debt, is included in this report. Attached is additional Water System, Sewer System, and Parking System information as required to be submitted under previous disclosure undertakings of the City. The City's June 30, 2015 Independent Auditor's Reports has been filed with the MSRB as of the date of this report and are incorporated herein by reference.. is Water System The Water Division is comprised of five parts: Administration, Treatment Plant, Customer Service, Distribution, and Public Information/Education. There are a total of 32.0 (FTE) employees who work in the Water Division. This division serves about 73,400 people and has over 24,600 customer water accounts. The average daily use for fiscal year 2015 was approximately 5.33 million gallons per day (MGD). A peak flow of over 8.6 MGD was experienced during the summer of 2012. Water Sources: The primary source of water for the City is the alluvial aquifer collector wells along the Iowa River. Four collector wells can provide approximately 10.5 MGD. Additional sources include two Jordan aquifer wells which can provide 2.0 MGD; three Siluran aquifer wells which can provide 1.0 MGD; a sand pit that can provide 1.0 MGD; a river intake that can provide 3.0 MGD; for a total of approximately 16.7 MGD maximum capacity. Water Treatment Processes: The facilities include one treatment plant (constructed in 2003) located at 80 Stephen Atkins Drive. The plant is a surface water plant design that includes aeration, lime softening (coagulation/flocculation/sedimentation), and granular activated carbon filtration processes with fluoridation and free chlorination. The grade four water facility employs operators that perform over 230 water quality tests per day in-house and collect samples for testing at the University Hygienic Laboratory. This testing ensures that the water meets all of the Safe Drinking Water Act Standards. Distribution System: The water flows through approximately 273 miles of water mains and includes over 22,000 service connections. The distribution piping consists of cast iron, ductile iron and plastic main that ranges in size from 2" to 30". The treatment plant site has effective water storage capacity of 1.75 million gallons of water; in addition there are four remote ground storage reservoirs (with pumping stations) that add up to remote effective storage capacity of 6.0 million gallons of water. The water system also provides for fire protection with approximately 3,442 public and private hydrants located throughout the community. Billina and Collections: Customers are billed monthly on a combined utility statement which includes charges for sewer, water, solid waste, and curbside recycling. Under present City policy and City ordinances, utility bills are due when received but contain a delinquency date which provides 15 days for payment. If payment is not made in full within 22 days, a notice is mailed which allows 25 calendar days before service is disconnected. The City's bad debt write-offs have been less than 0.2% of gross revenues for the past three years. 12 Rates: The following rates and charges were effective July 1, 2014. Water Service Charge Minimums (includes up to the first 100 cubic feet (c.f.)) Meter Size 0% Meter Size -5% Inches Charge(Inches) 2009 Charge 5/8" $6.73 2" $23.25 3/4" 7.35 3" 42.96 1 " 8.67 4" 74.94 1 1/2" 17.29 6" 150.79 Monthly Usage in excess of 100 cubic feet (c.f.) 101-3,000 $3.14 per 100 c.f. 3,001 and over $2.26 per 100 c.f. Single Purpose Meter Charges First 100 (c.f) Minimum Monthly Charge Usage in excess of 100 cubic feet (c.f.) $3.14 per 100 c.f. Changes in water rates over the last ten fiscal years: 2006 0% 2007 -5% 2008 0% 2009 0% 2010 0% 2011 0% 2012 0% 2013 0% 2014 0% 2015 5% 13 Financial Information: The following table summarizes the results of operations for the Water System for the fiscal years ended June 30, 2015, 2014, and 2013. WATER SYSTEM STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS Last Three Fiscal Years (amounts expressed in thousands) 2015 2014 2013 Operating Revenues: Charges for services $ 8,527 $ 8,443 $ 8,583 M iscellaneous 13 16 174 Total operating revenues 8,540 8,459 8,757 Operating Expenses: Personal services 2,495 2,692 2,633 Commodities 1,121 1,199 1,609 Services and charges 2,016 1,927 2,106 5,632 5,818 6,348 Depreciation 2,250 2,181 2,169 Total operating expenses 7,882 7,999 8,517 Operating income 658 460 240 Nonoperating Revenues (Expenses): Gain (Loss) on disposal of capital assets (17) 11 - Operating Grants 2 6 442 Interest income 175 154 143 Interest expense (608) (682) (731) Total nonoperating revenues (expenses) (448) (511) (146) Income before capital contributions and transfers 210 (51) 94 Capital contributions 581 2,049 494 Transfers in 348 990 893 Transfers out (691) (117) (1,481) Change in net assets 448 2,871 - Net Position, Beginning* 64,655 63,274 63,274 Net Position, Ending $ 65,103 $ 66,145 $ 63,274 *The 2015 beginning balance was restated from implementation of GASB 68. 14 The following table summarizes the budget and actual figures for the Water System for the fiscal year ended June 30, 2015 and the budget for the fiscal year ended June 30, 2016 on a modified accrual basis. WATER SYSTEM BUDGET AND ACTUALS (MODIFIED ACCRUAL BASIS) For the Year Faded June 30, 2015 (amounts expressed in thousands) The following table summarizes the Water System funds on hand for the fiscal years ended June 30, 2015, 2014, and 2013. WATER SYSTEM FUNDS ON HAND (CASH AND INVESTMENTS) Last Three Fiscal Years (amounts expressed in thousands) 2015 2014 2013 Operating Funds $ 8,670 $ 8,939 $ 7,410 Restricted and Designated Funds 4,964 4,801 4,631 Total Funds on Hand $ 13,634 $ 13,740 $ 12,041 15 FY16 Actual Budget Percentage Budget Charges for services $ 8,526 $ 9,082 93.88% $ 9,265 Interest income 175 144 121.53% 130 M iscellaneous 14 17 82.35% 17 Grants 43 - 4300.00% - Total Receipts $ 8,758 $ 9,243 94.75% $ 9,412 Personal services $ 2,618 $ 2,816 92.97% $ 2,752 Commodities 524 627 83.57% 508 Services and charges 2,074 2,236 92.75% 2,428 Capital outlay 1,365 3,215 42.46% 2,094 Transfer to capital project funds - 100 0.00% - Transfers to other funds 691 - 69100.00% - Debt service payments 2,304 2,323 99.18% 2,294 Total Disbursements $ 9,576 $ 11,317 84.62% $ 10,076 The following table summarizes the Water System funds on hand for the fiscal years ended June 30, 2015, 2014, and 2013. WATER SYSTEM FUNDS ON HAND (CASH AND INVESTMENTS) Last Three Fiscal Years (amounts expressed in thousands) 2015 2014 2013 Operating Funds $ 8,670 $ 8,939 $ 7,410 Restricted and Designated Funds 4,964 4,801 4,631 Total Funds on Hand $ 13,634 $ 13,740 $ 12,041 15 Sewer System The City of Iowa City operates a municipal Sewer Utility System consisting of approximately 300 miles of sanitary sewers, 18 sanitary sewer lift stations, and a wastewater treatment plant. There are a total of 24.65 (FTE) employees who work in the Wastewater Division. This division serves about 73,400 people and has over 24,500 customers. The system has 3 significant industrial users, 2 non -categorical and 1 categorical. The average daily combined treatment flow for fiscal year 2015 was 9.76 million gallons per day (MGD). The North Plant was constructed in 1935 and the South Plant was completed in 1990. Both were upgraded in 2002, and the South Plant expanded in 2014. The connecting of the North and South Plants was completed in 1998 and after 79 years of being in service the North Plant was decommissioned in 2014. The City utilized federal and state grants to fund a flood recovery and mitigation project to decommission the North Wastewater Plant through expansion of the South Wastewater Plant. The City has diverted all wastewater treatment to the Wastewater Treatment Plant and control operations remotely through supervisory control and data acquisition (SCADA) computer systems. The wastewater treatment system design has a maximum daily treatment capacity of 43.30 MGD. The Wastewater Treatment Plant is currently in compliance with federal clean water standards. Billing and Collections: Customers are billed monthly on a combined utility statement which includes charges for sewer, water, solid waste, and curbside recycling. Under present City policy and City ordinances, utility bills are due when received but contain a delinquency date which provides 15 days for payment. If payment is not made in full within 22 days, a notice is mailed which allows 25 calendar days before service is disconnected. The City's bad debt write-offs have been less than 0.2% of gross revenues for the past three years. Rates: The following rates and charges were effective July 1, 2014. Sewer Service Charge Minimum (includes up to the first 100 cubic feet (c.f.)) $8.15 Monthly Usage in excess of 100 cubic feet (c.f.) $3.99 Changes in sewer rates over the last ten fiscal years: 2006 0% 2007 8% 2008 0% 2009 5% 2010 0% 2011 0% 2012 0% 2013 0% 2014 0% 2015 0% 16 Financial Information: The following table summarizes the results of operations for the Sewer System for the fiscal years ended June 30, 2015, 2014, and 2013. SEWER SYSTEM STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS Last Three Fiscal Years (amounts expressed in thousands) 2015 2014 2013 Operating Revenues: Charges for services $ 12,189 $ 12,559 $ 12,832 Miscellaneous 126 75 102 Total operating revenues 12,315 12,634 12,934 Operating Expenses: Personal services 2,136 2,001 1,938 Commodities 1,473 1,006 854 Services and charges 2,965 2,701 2,548 6,574 5,708 5,340 Depreciation 4,497 4,036 3,912 Total operating expenses 11,071 9,744 9,252 Operatingincome 1,244 2,890 3,682 Nonoperating Revenues (Expenses): Gain (loss) on disposal of capital assets 1 (10,062) - Operating grants 21 62 - Interest income 305 200 367 Interest expense (1,161) (1,284) (1,400) Total nonoperating revenues (expenses) (834) (11,084) (1,033) Income before capital contributions and transfers 410 (8,194) 2,649 Capital contributions 1,370 7,422 30,841 Transfers in 239 26 7,322 Transfers out (190) (254) (1,566) Change in net assets 1,829 (1,000) 39,246 Net Position, Beginning* 128,954 131,278 92,032 Net Position, Ending $ 130,783 $ 130,278 $ 131,278 *The 2015 beginning balance was restated from implementation of GASB 68. 17 The following table summarizes the budget and actual figures for the Sewer System for the fiscal year ended June 30, 2015 and the budget for the fiscal year ended June 30, 2016 on a modified accrual basis. SEWER SYSTEM BUDGET AND ACTUALS (MODIFIED ACCRUAL BASIS) For the Year Fnded June 30, 2015 (amounts expressed in thousands) The following table summarizes the Sewer System funds on hand for the fiscal years ended June 30, 2015, 2014, and 2013. SEWER SYSTEM FUNDS ON HAND (CASH AND INVESTMENTS) Last Three Fiscal Years (amounts expressed in thousands) 2015 2014 2013 Operating Funds $ 16,643 $ 17,417 $ 15,655 Restricted and Designated Funds 9,861 9,975 10,074 Total Funds on Hand $ 26,504 $ 27,392 $ 25,729 18 FY16 Actual Budget Percentage Budget Charges for services $ 12,189 $ 12,891 94.55% $ 12,559 Interest income 305 458 66.59% 331 Miscellaneous 128 102 125.49% 75 Grants 2,469 367 672.75% 366 Total Receipts $ 15,091 $ 13,818 109.21% $ 13,331 Personal services $ 2,236 $ 2,076 107.71% $ 2,131 Commodities 733 557 131.60% 625 Services and charges 5,527 2,870 192.58% 2,785 Capital outlay 1,877 11,649 16.11% 975 Transfer to capital project funds 190 190 100.000/0 2,400 Debt service payments 4,675 4,675 100.00% 4,695 Total Disbursements $ 15,238 $ 22,017 69.21% $ 13,611 The following table summarizes the Sewer System funds on hand for the fiscal years ended June 30, 2015, 2014, and 2013. SEWER SYSTEM FUNDS ON HAND (CASH AND INVESTMENTS) Last Three Fiscal Years (amounts expressed in thousands) 2015 2014 2013 Operating Funds $ 16,643 $ 17,417 $ 15,655 Restricted and Designated Funds 9,861 9,975 10,074 Total Funds on Hand $ 26,504 $ 27,392 $ 25,729 18 Parking System The Parking System currently consists of approximately 4,120 parking spaces located at various parking facilities in the central business district of the City. The Parking Division of the Transportation Services Department oversees the operation of parking garages, parking lots, and on -street (metered) parking. Parking Division enforces parking regulation in the central business district, while the Police Department enforces parking regulations in residential areas. Recognizing that there is a high demand for parking in downtown Iowa City, Parking Services promotes turnover of on -street metered parking spaces in the core of the downtown. Customers with longer-term needs are encouraged to use the garages or on streets in outlying areas. There are a total of 26.25 (FTE) employees who work in the Parking Division. Parking System Utilization, Demand and Other Considerations: The City tracks Parking System utilization by the hour in each of the cashiered facilities. During peak hours, the occupancy rate regularly runs between 85% to 98% depending on the time of year and the time of day. Peak hours for the Parking System are 10:00 am through 3:00 pm with high occupancy rates regularly maintained through 5:30 pm daily. In addition to hourly parking, the Parking System offers monthly permit parking. The Parking System currently has 1,360 permit holders. The largest customer for the monthly permit parking is the University of Iowa with 615 permits. There are currently over 1,100 people on the Parking System's waiting lists for monthly permit parking. In addition to monthly and permit parking, the Parking System has parking space contracts with the Sheraton Hotel in the amount of $8,000.00 per month and with the Hotel Vetro in the amount of $2,000.00 per month. The City regularly evaluates parking demand. As development has continued to move south of Burlington Street and the central business district, the need for additional spaces in this area has increased. The Applied Real Estate Analysis ("AREA"), in conjunction with Desman Associates, estimates that there is demand for 600 additional parking spaces in downtown Iowa City. A recent update of demand based on upcoming developments shows a need of 650 additional spaces, an increase of 50 from the previous study. The underlying economic growth and employment base of the City continues to contribute to increased demand. Parking System Rates and Charges: Rates for the Parking System are set by the City Council. Parking System rates are reviewed annually. The rates vary by facility and the hourly and monthly rates and charges as approved by the City Council are listed below by facility. These rates include the most recent hourly rate adjustments that were approved by the City Council on June 4, 2013 and became effective July 1, 2013 and the proposed monthly permit rate adjustments that were approved by the City Council on June 2, 2009 and became effective July 1, 2009. 19 Parking Facilities: The Parking System consists of 2 cashiered garages and 2 unattended garages, as well as, various parking lots and on -street metered parking in the Central Business District. The City completes regular visual inspections of the parking garages to evaluate their current appearance and general condition. The garages are visually inspected for the condition of the main structural elements (columns, girders, beams), parking decks, expansion and control joints, and their coating systems. Based on the most recent inspections, all of the Parking System's facilities are in excellent condition. All garages will continue to receive routine inspections and maintenance. A description of each parking facility, their locations, access, the number of spaces, monthly permits, and current rates are as follows: Capitol Street Garage Constructed 1980 Address 220 S. Capitol Street Description Located on a parcel confined by Burlington Street to the south, Capitol 2007 Street to the west, Clinton Street to the east and the Old Capitol Town 7% Center to the north. Access This is a cashiered facility with two entry lanes off of Clinton Street; two 2009 entry lanes off of Capitol Street; and four exit lanes onto Capitol Street. Spaces 875 Monthly Permits 220 Rates Hourly $1.00 per hour, with first hour free 0% Monthly $80.00 per month Changes in Capitol Street Garage rates over the last ten fiscal years: 20 Hourly Monthly 2006 0% 0% 2007 25% 7% 2008 0% 0% 2009 0% 0% 2010 0% 7% 2011 0% 0% 2012 0% 0% 2013 0% 0% 2014* 33% 0% 2015 0% 0% *2014 Hourly Rate increase from $0.75 to $1.00 but the first hour free also started in 2014 20 Dubuque Street Garage Constructed 1980 Address 220 S. Dubuque Street Description Located on a parcel confined by Burlington Street to the south, Dubuque 2007 Street to the west, Linn Street to the east and the Sheraton Hotel to the 8% north. Access This is a cashiered facility with two entry lanes off of Dubuque Street; one 2009 entry lanes off of Linn Street; and two exit lanes onto Dubuque Street. Spaces 625 Monthly Permits 310 Rates Hourly $1.00 per hour, with first hour free 0% Monthly $80.00 per month Changes in Dubuque Street Garage rates over the last ten fiscal years: Chauncey Swan Garage Constructed 1993 Address 415 E. Washington Street Description Located on a parcel confined by College Street to the south, Van Buren Street to the east, Gilbert Street to the west and Washington Street to the north. Access This is an automated facility with one entry/exit lane off of College Street; one entry/ exit lane off of Washington Street; and one entry/exit lane through the Recreation Center parking lot onto Burlington Street. Spaces 475 Monthly Permits 380 Rates Hourly $0.75 per hour Monthly $80.00 per month Changes in Chauncey Swan Garage rates over the last ten fiscal years: Hourly Monthly 2006 0% 0% 2007 25% 8% 2008 0% 0% 2009 0% 0% 2010 0% 23% 2011 0% 0% 2012 0% 0% 2013 0% 0% 2014* 33% 0% 2015 0% 0% *2014 Hourly Rate increase from $0.75 to $1.00 but the first hour free also started in 2014 Chauncey Swan Garage Constructed 1993 Address 415 E. Washington Street Description Located on a parcel confined by College Street to the south, Van Buren Street to the east, Gilbert Street to the west and Washington Street to the north. Access This is an automated facility with one entry/exit lane off of College Street; one entry/ exit lane off of Washington Street; and one entry/exit lane through the Recreation Center parking lot onto Burlington Street. Spaces 475 Monthly Permits 380 Rates Hourly $0.75 per hour Monthly $80.00 per month Changes in Chauncey Swan Garage rates over the last ten fiscal years: 21 Hourly Monthly 2006 0% 0% 2007 20% 9% 2008 0% 0% 2009 0% 0% 2010 0% 17% 2011 0% 14% 2012 0% 0% 2013 0% 0% 2014 25% 0% 2015 0% 0% 21 Tower Place Garage Constructed 2001 Address 335 E. Iowa Avenue Description Located on a parcel confined by Iowa City Senior Center to the south, 2007 Gilbert Street to the east, Linn Street to the west and Iowa Avenue to the 7% north. Access This is a cashiered facility with two entry lanes off of Iowa Avenue; three 2009 exit lanes onto Iowa Avenue; and secured permit -only entry and exit off of 0% Gilbert Street. Spaces 510 Monthly Permits 210 Rates Hourly $1.00 per hour, with first hour free 0% Monthly $80.00 per month Changes in Tower Place Garage rates over the last ten fiscal years: On -Street Parking Meters: The City operates short-term meters (1-2 hours) concentrated in the core of the downtown. These meters are intended for shopper's use. Each parking meter dial states the maximum time. Longer term meters become more common away from the core downtown area. Meters 1,174 Rates Hourly $0.75 - $1.50 per hour based on proximity to the central business district and usage. Parking Lots: The City operates seven parking lots in the Central Business District. They consist of a mix of permit spaces and metered spaces. Spaces 460 Monthly Permits 150 Rates Hourly $0.75 - $1.50 per hour based on proximity to the central business district and usage. Monthly $60.00 per month Moped Parking: FY12 saw the implementation of a parking permit program for mopeds, scooters, and motorcycles. Spaces were designated throughout the Central Business District to accommodate the use of mopeds and scooters while also removing them from parking in bicycle racks. Spaces 150 Total Annual Permits 683 Rates Annual $90.00 per year 22 Hourly Monthly 2006 0% 0% 2007 25% 7% 2008 0% 0% 2009 0% 0% 2010 0% 7% 2011 0% 0% 2012 0% 0% 2013 0% 0% 2014* 33% 0% 2015 0% 0% *2014 Hourly Rate increase from $0.75 to $1.00 but the first hour free also started in 2014 On -Street Parking Meters: The City operates short-term meters (1-2 hours) concentrated in the core of the downtown. These meters are intended for shopper's use. Each parking meter dial states the maximum time. Longer term meters become more common away from the core downtown area. Meters 1,174 Rates Hourly $0.75 - $1.50 per hour based on proximity to the central business district and usage. Parking Lots: The City operates seven parking lots in the Central Business District. They consist of a mix of permit spaces and metered spaces. Spaces 460 Monthly Permits 150 Rates Hourly $0.75 - $1.50 per hour based on proximity to the central business district and usage. Monthly $60.00 per month Moped Parking: FY12 saw the implementation of a parking permit program for mopeds, scooters, and motorcycles. Spaces were designated throughout the Central Business District to accommodate the use of mopeds and scooters while also removing them from parking in bicycle racks. Spaces 150 Total Annual Permits 683 Rates Annual $90.00 per year 22 Financial Information: The following table summarizes the results of operations for the Parking System for the fiscal years ended June 30, 2015, 2014, and 2013. PARKING SYSTEM STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS Last Three Fiscal Years (amounts expressed in thousands) 2015 2014 2013 Operating Revenues: Charges for services $ 5,502 $ 5,294 $ 5,043 M iscellaneous 82 26 37 Total operating revenues 5,584 5,320 5,080 Operating Expenses: Personal services 1,465 1,530 1,718 Commodities 106 141 630 Services and charges 2,257 1,298 1,201 3,828 2,969 3,549 Depreciation 798 800 787 Total operating expenses 4,626 3,769 4,336 Operating income 958 1,551 744 Nonoperating Revenues (Expenses): Interest income 36 45 42 Interest expanse (77) (298) (324) Total nonop erating revenues (expenses) (41) (253) (282) Income before capital contributions and transfers 917 1,298 462 Transfers in - Transfers out - Income before special item 917 Special item: 19 - - (224) 766 (144) Payment to refunded bond escrow (574) - - Change in net assets 343 1,317 238 Net Position, Beginning* 17,394 16,960 16,722 Net Position, Ending $ 17,737 $ 18,277 $ 16,960 *The 2015 beginning balance was restated from implementation of GASB 68. 23 The following table summarizes the budget and actual figures for the Parking System for the fiscal year ended June 30, 2015 and the budget for the fiscal year ended June 30, 2016 on a modified accrual basis. PARKING SYSTEM BUDGET AND ACTUALS (MODIFIED ACCRUAL BASIS) For the Year Faded June 30, 2015 (amounts expressed in thousands) The following table summarizes the Parking System funds on hand for the fiscal years ended June 30, 2015, 2014, and 2013. PARKING SYSTEM FUNDS ON HAND (CASH AND INVESTMENTS) Last Three Fiscal Years (amounts expressed in thousands) 2015 2014 2013 Operating Funds $ 4,238 $ 5,674 $ 5,032 Restricted and Designated Funds 386 1,921 1,668 Total Funds on Hand $ 4,624 $ 7,595 $ 6,700 24 FY16 Actual Budget Percentage Budget Charges for services $ 5,502 $ 5,083 108.24% $ 5,274 Interest income 36 47 76.60% 28 Miscellaneous 83 37 224.32% 27 Transfers from other funds 2,495 2,495 100.00% - Total Receipts $ 8,116 $ 7,662 105.93% $ 5,329 Personal services $ 1,495 $ 1,804 82.87% $ 1,709 Commodities 41 56 73.21% 37 Services and charges 1,740 1,530 113.73% 1,525 Capital outlay 64 587 10.90% 670 Interfund Loan Repayment 144 144 100.00% 221 Debt service payments 7,974 7,974 100.00% —T--4,162 - Total Disbursements $ 11,458 $ 12,095 94.73% The following table summarizes the Parking System funds on hand for the fiscal years ended June 30, 2015, 2014, and 2013. PARKING SYSTEM FUNDS ON HAND (CASH AND INVESTMENTS) Last Three Fiscal Years (amounts expressed in thousands) 2015 2014 2013 Operating Funds $ 4,238 $ 5,674 $ 5,032 Restricted and Designated Funds 386 1,921 1,668 Total Funds on Hand $ 4,624 $ 7,595 $ 6,700 24 Revenue Bond Activity Bond debt activity for business -type activities for the year ended June 30, 2015, was as follows: July 1, 2014 Issues Business -type activities: General obligation bonds $ 890,000 $ Less: Unamortized Discounts 3,843 Total general obligation bonds 886,157 Revenue bonds 56,845,000 Plus: Unamortized Due Within Retirements June 30, 2015 One Year - $ 300,000 $ 590,000 $ 295,000 3,843 - - 296,157 590,000 295,000 11,895,000 44,950,000 4,940,000 Premium 723,517 - 106,614 616,903 79,135 Total revenue bonds 57,568,517 - 12,001,614 45,566,903 5,019,135 Original issue amount $ 48,020,000 $ 58,454,674 $ - $ 12,297,771 $ 46,156,903 $ 5,314,135 As of June 30, 2015, the following unmatured revenue bond issues are outstanding: The City of Iowa City defeased the remaining $6,605,000 its 2009 Parking Revenue Bonds on November 12, 2014 by prepaying all remaining outstanding bonds and interest from cash on hand. The total defeased outstanding as of June 30, 2015 is $6,605,000. The total amount of interest that was paid was $574,186. Liabilities for the defeased bonds are not included in the City's financial statements. 25 Wastewater Taxable Urban Treatment Water Renewal Original issue amount $ 48,020,000 $ 21,815,000 $ 2,655,000 Interest rates 3.0% to 5.0% 1.5% to 4.5% 1.0% to 3.9% Annual maturities $ 485,000 to $ 410,000 to $ 130,000 to $ 2,205,000 $ 835,000 $ 200,000 Amount outstanding $ 28,585,000 $16,365,000 $ 2,655,000 The City of Iowa City defeased the remaining $6,605,000 its 2009 Parking Revenue Bonds on November 12, 2014 by prepaying all remaining outstanding bonds and interest from cash on hand. The total defeased outstanding as of June 30, 2015 is $6,605,000. The total amount of interest that was paid was $574,186. Liabilities for the defeased bonds are not included in the City's financial statements. 25 Revenue bond debt service requirements to maturity are as follows: Fiscal Year Ending June 30 Governmental Activities Principal Interest Business -type Activities Principal Interest 2016 $ 130,000 $ 75,335 $ 4,940,000 $ 1,742,334 2017 130,000 74,035 5,090,000 1,557,521 2018 135,000 72,345 5,295,000 1,362,478 2019 135,000 70,185 5,480,000 1,157,915 2020 140,000 67,485 5,710,000 931,565 2021-2025 740,000 287,405 16,825,000 1,865,494 2026-2030 855,000 169,450 1,610,000 38,162 2031-2035 390,000 22,725 - - Total $ 2,655,000 $ 838,965 $ 44,950,000 $ 8,655,469 The revenue bond ordinances required that wastewater treatment, water revenues, and urban renewal tax revenues be set aside into separate and special accounts as they are received. The use and the amounts to be included in the accounts are as follows: Account Amount (a) Revenue Bond and Interest Amount sufficient to pay current bond and interest maturities. Sinking Reserve (b) Revenue Debt Service Reserve Amount required to be deposited in the Revenue Bond and Interest Reserve until the reserve fund equals: Water Revenue and Taxable Urban Renewal Revenue bonds — maximum debt service due on the bonds in any succeeding fiscal year. Wastewater Revenue bonds — 125% of the average principal and interest payments over the life of all the Wastewater Revenue bonds. (c) Improvement Reserve $20,000 per month until the reserve balance equals or exceeds $2,000,000 for Wastewater Revenue bonds and $5,000 per month until the reserve balance equals or exceeds $450,000 for Water Revenue bonds, with no further deposits once the minimum balance is reached. If the reserve falls below the required minimum, monthly transfers in the aforementioned amounts will resume. 26 Summary of Bond Issues General obligation and revenue bonds payable at June 30, 2015, are comprised of the following issues: Date of Amount Interest Final Outstanding Issue Issued Rates Maturity June 30, 2015 General Obligation Bonds: Multi -Purpose June 2008 9,150,000 3.25-3.75 6/18 $ 3,085,000 Refunded Multi -Purpose (1) Oct. 2008 17,005,000 3.0-3.75 6/18 4,530,000 Multi -Purpose June 2009 6,685,000 2.5-4.0 6/19 2,900,000 Refunded Multi -Purpose (2) June 2009 5,840,000 2.0-4.0 6/16 915,000 Multi -Purpose Aug. 2010 7,420,000 2.0-2.75 6/20 3,840,000 Multi -Purpose June 2011 7,925,000 2.0-3.625 6/21 4,785,000 Refunded Multi -Purpose and Library Construction (3) June 2011 10,930,000 2.0-3.625 6/21 7,385,000 Multi -Purpose June 2012 9,070,000 2.0-2.25 6/22 6,565,000 Multi -Purpose July 2013 7,230,000 1.0-2.0 6/23 6,505,000 Refimded Multi -Purpose (4) June 2014 11,980,000 2.0-3.0 6/24 11,045,000 Multi -Purpose June 2015 7,785,000 2.0-2.25 6/25 7,785,000 Total General Obligation Bonds $ 59,340,000 Date of Amount Interest Final Outstanding Issue Issued Rates Maturity June 30, 2015 Revenue Bonds: Refinded Wastewater Treatment Bonds (5) Oct. 2008 24,280,000 3.0-5.0 7/22 $ 14,345,000 Refinded Wastewater Treatment Bonds (6) May 2009 8,660,000 3.5-5.0 7/25 6,760,000 Refunded Wastewater Treatment Bonds (7) Apr. 2010 15,080,000 3.0-4.0 7/20 7,480,000 Refunded Water Bonds (8) Oct. 2008 7,115,000 3.0-4.375 7/24 4,920,000 Refinded Water Bonds (9) May 2009 9,750,000 4.0-4.5 7/25 7,410,000 Refinded Water Bonds (10) June 2012 4,950,000 1.5-2.1 7/22 4,035,000 Taxable Urban Renewal Nov. 2012 2,655,000 1.0-3.9 6/32 2,655,000 Total Revenue Bonds 47,605,000 $ 106,945,000 (1) This bond issue refunded the April 1998, March 1999, and July 2000 General Obligation Bonds. (2) This bond issue refunded the June 2001 General Obligation Bonds. (3) This bond issue refunded the May 2002 General Obligation Bonds. (4) This bond issue is an advance refunding of portions of the September 2006 and May 2007 General Obligation Bonds. (5) This bond issue refunded the March 1996, May 1997, and January 1999 Wastewater Revenue Bonds. (6) This bond issue refunded the October 2000 Wastewater Revenue Bonds. (7) This bond issue refunded the December 2001 and April 2002 Wastewater Revenue Bonds. (8) This bond issue refunded the May 1999 Water Revenue Bonds. (9) This bond issue refunded the December 2000 Water Revenue Bonds. (10) This bond issue refunded the October 2002 Water Revenue Bonds. 27 CITY OF IOWA CITY, IOWA SALES HISTORY AND TOTAL WATER CHARGES Last Ten Fiscal Years Fiscal Water Sales Water System Year Cubic Feet Sold Charees 2006 267,107,998 $ 8,844,993 2007 261,072,632 8,414,310 2008 249,361,929 7,976,536 2009 234,804,167 7,497,903 2010 234,342,825 7,568,378 2011 236,838,370 7,661,898 2012 246,618,257 7,953,738 2013 254,616,773 8,194,467 2014 239,790,719 7,778,364 2015 240,423,612 8,136,670 Sources: City of Iowa City Revenue Department 28 CITY OF IOWA CITY, IOWA SALES HISTORY AND TOTAL SEWER CHARGES Last Ten Fiscal Years Fiscal Sewer Sales Sewer System Year Cubic Feet Sold Charees 2006 302,925,357 $ 12,373,762 2007 315,199,203 11,084,369 2008 285,492,596 12,221,769 2009 276,455,246 12,499,949 2010 265,375,857 12,541,905 2011 280,303,237 12,748,695 2012 282,134,840 12,784,321 2013 285,472,392 12,883,641 2014 269,494,125 12,382,031 2015 266,341,794 12,248,082 Sources: City of Iowa City Revenue Department 29 CITY OF IOWA CITY, IOWA SCHEDULE OF REVENUE BOND COVERAGE Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year Ended June 30 Revenue Expenses' Net Revenue Available for Debt Service Principal Parkin¢ Revenue3 Annual Debt Service Interest Total Ratio of Coverase 2006 4,161 2,380 1,781 320 645 965 1.85 2007 5,035 2,973 2,062 335 626 961 2.15 2008 4,995 2,454 2,541 355 606 961 2.64 2009 5,630 3,024 2,606 370 584 954 2.73 20106 5,509 3,149 2,360 390 504 894 2.64 2011 5,389 2,920 2,469 420 391 811 3.04 2012 4,945 3,034 1,911 500 339 839 2.28 2013 5,122 3,549 1,573 515 324 839 1.87 2014 5,365 2,969 2,396 530 308 838 2.86 2015' 5,620 3,828 1,792 540 254 794 2.26 Wastewater Treatment Revenue 2006 12,798 4,260 8,538 3,815 3,390 7,205 1.19 2007 13,708 4,236 9,472 3,905 3,234 7,139 1.33 20086 13,332 4,581 8,751 4,105 3,071 7,176 1.22 20096 13,462 5,202 8,260 4,260 2,813 7,073 1.17 20106 13,174 5,050 8,124 4,205 2,307 6,512 1.25 20116 13,281 5,477 7,804 1,840 2,054 3,894 2.00 2012 13,175 5,663 7,512 4,615 1,693 6,308 1.19 2013 13,301 5,340 7,961 4,865 1,547 6,412 1.24 2014 12,835 5,708 7,127 3,250 1,428 4,678 1.52 2015 12,620 6,574 6,046 3,370 1,305 4,675 1.29 Water Revenues 2006 9,918 5,722 4,196 880 1,305 2,185 1.92 2007 9,220 5,356 3,864 915 1,268 2,183 1.77 20086 9,258 5,348 3,910 955 1,229 2,184 1.79 20096 8,833 5,726 3,107 995 1,171 2,166 1.43 20106 8,336 5,153 3,183 680 1,055 1,735 1.83 2011 8,354 5,464 2,890 1,110 902 2,012 1.44 20126 8,649 5,653 2,996 1,200 861 2,061 1.45 20136 9,342 6,348 2,994 845 758 1,603 1.87 20146 8,613 5,818 2,795 1,335 650 1,985 1.41 2015 8,715 5,632 3,083 1,380 610 1,990 1.55 Notes: I Excludes depreciation and interest. Z includes principal and interest of revenue bonds only. 3 Parking Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service" is required to be at least 1.25. 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. s 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. ' Parking Revenue Bonds defeased are excluded from the principal and interest of Annual Debt Service. 30 CITY OF IOWA CITY, IOWA PRINCIPAL WATER SYSTEM CUSTOMERS Current Year and Nine Years Ago Total Water System Charges Sources: City of Iowa City Revenue Division $ 8,844,993 $ 8,136,670 31 2006 2015 Customer Name Charges Rank Percentage Charges Rank Percentage Proctor & Gamble $ 585,169 1 6.62% $ 611,186 1 7.51 % Veterans Administration Medical Center 155,991 2 1.76 102,194 2 1.26 Dolphin Lake Point (Rus Properties Mngmt) 73,814 5 0.83 76,188 3 0.94 Mercy Hospital 78,602 3 0.89 66,050 4 0.81 Mark IV Apts 51,417 9 0.58 60,058 5 0.74 Campus Apartments 74,281 4 0.84 59,240 6 0.73 University of Iowa (Mayflower Apartments) - - N/A 41,017 7 0.50 RBD Iowa City LLC (Sheraton Hotel) - - N/A 35,860 8 0.44 CCAL 100 Hawk Ridge Drive - - N/A 32,187 9 0.40 Seville Apartments - - N/A 31,979 10 0.39 Lear Corp 68,372 6 0.77 - - N/A Roberts Dairy 56,567 7 0.64 - - N/A ACT 56,419 8 0.64 - - N/A Holiday Inn/MPI LESSE 50,391 10 0.57 - - N/A $ 1,251,023 14.14% $ 1,115,959 13.72 % Total Water System Charges Sources: City of Iowa City Revenue Division $ 8,844,993 $ 8,136,670 31 CITY OF IOWA CITY, IOWA PRINCIPAL SEWER SYSTEM CUSTOMERS Customer Name University of Iowa Proctor & Gamble Iowa City Landfill Division Veterans Administration Medical Center Dolphin Lake Point (Rus Properties Mngmt) Mercy Hospital Mark IV Apartments Campus Apartments University of Iowa/Mayflower Apartments RBD Iowa City LLC (Sheraton Hotel) Roberts Dairy Lear Corp Holiday Inn/ MPI LESSEE Total Sewer System Charges Sources: City of Iowa City Revenue Department Current Year and Nine Years Ago 2006 2015 Charges Rank Percentage Charees Rank Percentage $ 2,191,365 1 17.71 % $ 1,831,543 1 14.95 % 1,480,104 2 11.96 1,111,847 2 9.08 - - N/A 137,895 3 1.13 193,439 1 3 0.86 126,782 4 1.04 106,545 4 0.86 123,920 5 1.01 88,870 6 0.72 105,044 6 0.86 58,316 10 0.47 80,811 7 0.66 86,260 7 0.70 73,486 8 0.60 - - N/A 68,369 9 0.56 - - N/A 59,569 10 0.49 134,502 5 1.09 - - N/A 62,855 9 0.51 - - N/A 76,863 8 0.62 - - N/A $ 4,479,119 35.50 % $ 3,719,266 30.37% $ 12,373,762 $ 12,248,082 32 TOP TAXPAYERS LOCATED WITHIN URBAN RENEWAL AREA Taxpayer RBD IOWA CITY LLC PLAZA TOWERS LLC OC GROUP LC MIDWESTONE BANK MOEN, MARC B ICF LLC FIRST NATIONAL BANK IOWA CITY 1600-1700 LLC CENTER CITY LLC COURT STREET APARTMENTS LLC Total Classification Sheraton Hotel Residential & Comm. Condo Rentals Old Capital Mall Financial Institution Residential & Comm. Condo Rentals Residential & Comm. Condo Rentals Financial Institution Residential Condo Rentals Residential & Comm. Condo Rentals Residential & Comm. Condo Rentals (1) The Total Taxable Valuation in the Urban Renewal Area for 1/1/2014 for fiscal year 2015-16 is $315,822,726. 33 FY2015/16 Taxable %of Total Valuation Taxable Valuations (1) $ 10,393,668 3.29% 7,785,178 2.47% 7,617,780 2.41% 6,943,392 2.20% 6,691,425 2.12% 6,196,311 1.96% 6,000,138 1.90% 5,919,678 1.87% 5,914,407 1.87% 5,500,336 1.74% $ 68,962,313 21.84% (1) The Total Taxable Valuation in the Urban Renewal Area for 1/1/2014 for fiscal year 2015-16 is $315,822,726. 33 TAX INCREMENT TAX RATES Total City Tax Rate City Debt Service Iowa City CSD Debt Service Iowa City CSD PPEL Iowa City CSD ISPL Kirkwood Debt Service Johnson County Debt Service Tax Increment Tax Rate Iowa City Downtown SSMID (2) Tax Increment Tax Rate in SSMID FY2009-10 FY2010-11 FY2011-12 $ 40.59569 $ 40.91519 $ 40.75369 (4.21934) (4.43847) (4.64901) (0.78674) (0.72701) (0.74900) (1.67000) (1.67000) (1.67000) (0.15908) (0.18561) (0.20000) (0.69680) (0.59533) (0.47402) $ 33.06373 $ 33.29877 $ 33.01166 FY2012-13 FY2013-14(1) FY2014-15(1) FY2015-16(1) $ 39.49917 $ 38.63862 $ 38.52756 $ 38.81115 (4.44287) (4.02965) (4.12963) (3.92833) (0.69729) (0.63500) (0.59831) (0.58612) (1.67000) (1.67000) (1.67000) (1.67000) (0.12405) (0.08550) (0.08991) (0.20000) (0.20000) (0.20000) (0.27005) (0.62813) (1.61074) (2.05908) (1.77673) $ 31.86088 $ 30.36918 $ 29.78504 $ 30.49001 2.00000 2.00000 2.00000 2.00000 $ 33.86088 $ 32.36918 $ 31.78504 $ 32.49001 (1) Any urban renewal area created after April 24, 2012, will not be eligible to receive the benefits of the local school district's instruction support levy (ISPL) tax revenues, unless the ISPL is necessary to pay principal and interest on the urban renewal debt and the school passes a special resolution approving such use of the revenues. Urban renewal debt incurred on or before April 24, 2012, may receive the benefit of ISPL tax revenues for fiscal year 2013-14 and following only if the ISPL is necessary to pay principal and interest on the urban renewal area debt and the city certifies to the school district by July 1 of each fiscal year, beginning July 1, 2013. The school district must then pay those amounts during that fiscal year (Nov. 1 and Mayl) back to the City's urban renewal fund. For the FY2015-16 tax rates, the Iowa City CSD rates and the Kirkwood Debt Service rates are preliminary and have not been finalized due to legislation that is still subject to the final authorization. (2) In fiscal year 2012-13, the City created a Self Supporting Municipal Improvement District (SSMID) within a portion of the Urban Renewal Area. The tax levy for the SSMID increases the tax increment rate but is only applied to certain properties when the County is apportioning the tax increment revenue request. 34 HISTORICAL AND PROJECTED TAXABLE VALUATIONS WITHIN THE URBAN RENEWAL AREA (1) Total taxable valuation available for certification will decrease in fiscal year 2024-25 due to the retirement of the tax increment of the 2001 Amended portion of the Urban Renewal Area. Total taxable value increased in fiscal year 2013-14 due to 2012 Amended Area of the Urban Renewal Area. 35 Taxable Total Taxable Taxable New Taxable Valuation Taxable Assessment Fiscal Taxable Value Valuation Valuation Available for Valuation Date Year Value 1 Frozen Base Available from Project Certification Certified 1/1/2010 FY 2012 195,540,284 89,677,074 105,863,210 0 105,863,210 0 1/1/2011 FY 2013 199,993,156 97,625,120 102,368,036 0 102,368,036 3,925,401 1/1/2012 FY 2014 306,901,127 198,107,149 108,793,978 0 108,793,978 9,358,858 1/1/2013 FY 2015 316,944,408 191,268,575 125,675,833 2,880,000 128,555,833 17,165,967 1/1/2014 FY 2016 309,780,992 171,989,869 137,791,123 6,041,734 143,832,857 17,054,100 1/1/2015 FY 2017 309,780,992 171,989,869 137,791,123 6,041,734 143,832,857 6,691,864 1/1/2016 FY 2018 309,780,992 171,989,869 137,791,123 6,041,734 143,832,857 6,800,424 1/1/2017 FY 2019 309,780,992 171,989,869 137,791,123 6,041,734 143,832,857 6,729,581 1/1/2018 FY 2020 309,780,992 171,989,869 137,791,123 6,041,734 143,832,857 6,805,016 1/1/2019 FY 2021 309,780,992 171,989,869 137,791,123 6,041,734 143,832,857 6,708,591 1/1/2020 FY 2022 309,780,992 171,989,869 137,791,123 6,041,734 143,832,857 6,766,971 1/1/2021 FY 2023 309,780,992 171,989,869 137,791,123 6,041,734 143,832,857 6,816,823 1/1/2022 FY 2024 309,780,992 171,989,869 137,791,123 6,041,734 143,832,857 6,688,912 1/1/2023 FY 2025 224,453,761 129,966,321 94,487,440 6,041,734 100,529,174 6,715,150 1/1/2024 FY 2026 224,453,761 129,966,321 94,487,440 6,041,734 100,529,174 6,726,629 1/1/2025 FY 2027 224,453,761 129,966,321 94,487,440 6,041,734 100,529,174 6,722,694 1/1/2026 FY 2028 224,453,761 129,966,321 94,487,440 6,041,734 100,529,174 6,702,687 1/1/2027 FY 2029 224,453,761 129,966,321 94,487,440 6,041,734 100,529,174 6,665,954 1/1/2028 FY 2030 224,453,761 129,966,321 94,487,440 6,041,734 100,529,174 6,781,566 1/1/2029 FY 2031 224,453,761 129,966,321 94,487,440 6,041,734 100,529,174 6,721,054 1/1/2030 FY 2032 224,453,761 129,966,321 94,487,440 6,041,734 100,529,174 0 (1) Total taxable valuation available for certification will decrease in fiscal year 2024-25 due to the retirement of the tax increment of the 2001 Amended portion of the Urban Renewal Area. Total taxable value increased in fiscal year 2013-14 due to 2012 Amended Area of the Urban Renewal Area. 35 HISTORICAL AND PROJECTED TAXABLE VALUATIONS WITHIN THE URBAN RENEWAL AREA (1) Total taxable valuation available for certification will decrease in fiscal year 2024-25 due to the retirement of the tax increment of the 2001 Amended portion of the Urban Renewal Area. (2) The tax increment rate in fiscal year 2013-14 reflects the loss of the local school district's instruction support levy (ISPL) of $.12405 due to recent legislative changes. TIF tax rate does not include the SSMID levy rate of $2.00 per $1,000 of value. Starting in fiscal year 2012-13, a portion of the taxable valuation certified will beat the higher rate due to Its location in the SSMID. For the FY2015-16 tax rates, the Iowa City CSD rates and the Kirkwood Debt Service rates are preliminary and have not been finalized due to legislation that is still subject to the final authorization. (3) The available tax increment revenues do not reflect an estimate for the portion of the available valuation that would be taxed at the higher SSMID rate. 36 Taxable Valuation Taxable Available Certified Reserve TIF Existing Annual Ending Available Requested Assessment Fiscal Available for Valuation TIF Tax Increment Tax Increment Fund Revenue Certified Surplus/ Cash Debt Debt Date Year Certification (1) Certified Tax Rate (2) Revenues (3) Revenues Release Bonds Debt Deficit Balance Coverage Coverage 1/1/2010 FY 2012 105,863,210 0 33.01166 3,494,720 0 0 0 n.a. n.a. 1/1/2011 FY 2013 102,368,036 3,925,401 31.86088 3,261,536 125,067 125,067 0 0 n.a. n.a. 1/1/2012 FY 2014 108,793,978 9,358,858 30.36918 3,303,984 284,221 75,335 208,886 0 0 43.86 1.55 1/1/2013 FY 2015 128,555,833 17,165,967 29.78504 3,829,041 511,289 75,335 435,954 0 0 50.83 1.05 1/1/2014 FY 2016 143,832,857 17,054,100 30.49001 4,385,465 519,980 205,335 142,318 172,326 172,326 21.36 1.00 1/1/2015 FY 2017 143,832,857 6,691,864 30.49001 4,385,465 204,035 204,035 0 0 172,326 21.49 1.00 1/1/2016 FY 2018 143,832,857 6,800,424 30.49001 4,385,465 207,345 207,345 0 0 172,326 21.15 1.00 1/1/2017 FY 2019 143,832,857 6,729,581 30.49001 4,385,465 205,185 205,185 0 0 172,326 21.37 1.00 1/1/2018 FY 2020 143,832,857 6,805,016 30.49001 4,385,465 207,485 207,485 0 0 172,326 21.14 1.00 1/1/2019 FY 2021 143,832,857 6,708,591 30.49001 4,385,465 204,545 204,545 0 0 172,326 21.44 1.00 1/1/2020 FY 2022 143,832,857 6,766,971 30.49001 4,385,465 206,325 206,325 0 0 172,326 21.26 1.00 1/1/2021 FY 2023 143,832,857 6,816,823 30A9001 4,385,465 207,845 207,845 0 0 172,326 21.10 1.00 1/1/2022 FY 2024 143,832,857 6,688,912 30A9001 4,385,465 203,945 203,945 0 0 172,326 21.50 1.00 1/1/2023 FY 2025 100,529,174 6,715,150 30.49001 3,065,136 204,745 204,745 0 0 172,326 14.97 1.00 1/1/2024 FY 2026 100,529,174 6,726,629 30.49001 3,065,136 205,095 205,095 0 0 172,326 14.94 1.00 1/1/2025 FY 2027 100,529,174 6,722,694 30.49001 3,065,136 204,975 204,975 0 0 172,326 14.95 1.00 1/1/2026 FY 2028 100,529,174 6,702,687 30.49001 3,065,136 204,365 204,365 0 0 172,326 15.00 1.00 1/1/2027 FY 2029 100,529,174 6,665,954 30.49001 3,065,136 203,245 203,245 0 0 172,326 15.08 1.00 1/1/2028 FY 2030 100,529,174 6,781,566 30.49001 3,065,136 206,770 206,770 0 0 172,326 14.82 1.00 1/1/2029 FY 2031 100,529,174 6,721,054 30.49001 3,065,136 204,925 204,925 0 0 172,326 14.96 1.00 1/1/2030 FY 2032 100,529,174 0 30.49001 3,065,136 0 207,845 207,800 0 45 172,371 n.a. n.a. (1) Total taxable valuation available for certification will decrease in fiscal year 2024-25 due to the retirement of the tax increment of the 2001 Amended portion of the Urban Renewal Area. (2) The tax increment rate in fiscal year 2013-14 reflects the loss of the local school district's instruction support levy (ISPL) of $.12405 due to recent legislative changes. TIF tax rate does not include the SSMID levy rate of $2.00 per $1,000 of value. Starting in fiscal year 2012-13, a portion of the taxable valuation certified will beat the higher rate due to Its location in the SSMID. For the FY2015-16 tax rates, the Iowa City CSD rates and the Kirkwood Debt Service rates are preliminary and have not been finalized due to legislation that is still subject to the final authorization. (3) The available tax increment revenues do not reflect an estimate for the portion of the available valuation that would be taxed at the higher SSMID rate. 36 �aI IOWA CITY ANIMAL CARE AND ADOPTION CENTER Ribbon -cutting ceremony and grand opening celebration: Sept. 25-26, 2015 CITY OF IOWA CITY, IOWA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF IOWA CITY, IOWA FOR THE FISCAL YEAR ENDED JUNE 30, 2015 PREPARED BY: FINANCE DEPARTMENT CITY OF IOWA CITY, IOWA 4w "J Or Introductory Section Tab CITY OF IOWA CITY, IOWA TABLE OF CONTENTS June 30, 2015 Page INTRODUCTORY SECTION Tableof contents................................................................................................................................ 1 Letterof transmittal............................................................................................................................ 3 Certificate of Achievement for Excellence in Financial Reporting ................................................... 13 Cityorganizational chart.................................................................................................................... 14 Cityofficials....................................................................................................................................... 15 FINANCIAL SECTION INDEPENDENT AUDITOR'S REPORT......................................................................................... 17 MANAGEMENT'S DISCUSSION AND ANALYSIS.................................................................... 21 BASIC FINANCIAL STATEMENTS Government -wide financial statements Statementof net position............................................................................................................. 32 Statementof activities.................................................................................................................. 34 Fund financial statements Balance sheet — governmental funds............................................................................................ 36 Reconciliation of the balance sheet of the governmental funds to the statement of net position. 37 Statement of revenues, expenditures, and changes in fund balances — governmental funds ....... 38 Reconciliation of the statement of revenues, expenditures, and changes in fund balances of governmental funds to the statement of activities..................................................................... 39 Statement of net position proprietary funds.............................................................................. 40 Statement of revenues, expenses, and changes in fund net position — proprietary funds ............ 42 Statement of cash flows — proprietary funds................................................................................ 44 Statement of fiduciary assets and liabilities................................................................................. 46 Notes to financial statements.......................................................................................................... 47 REQUIRED SUPPLEMENTARY INFORMATION Budgetary comparison schedule — budget and actual — all governmental funds and enterprise fundsbudgetary basis.................................................................................... 86 Budgetary comparison schedule — budget to GAAP reconciliation ................................... 88 Note to required supplementary information — budgetary reporting ................................... 89 Schedule of the City's proportionate share of MFPRSI net pension liability ........................ 91 Schedule of City's MFPRSI contributions............................................................... 92 Note to required supplementary information — MFPRSI pension liability ........................... 94 Schedule of the City's proportionate share of IPERS net pension liability .......................... 95 Schedule of City's IPERS contributions.................................................................. 96 Note to required supplementary information — IPERS pension liability ............................. 98 Required supplementary information — schedule of funding progress for health and dental plans.......................................................................................................... 100 COMBINING AND INDIVIDUAL FUND STATEMENTS Combining balance sheet — nonmajor governmental funds............................................................ 102 Combining statement of revenues, expenditures, and changes in fund balances nonmajor governmentalfunds...................................................................................................................... 103 Combining statement of net position — nonmajor enterprise funds ................................................ 106 Combining statement of revenues, expenses, and changes in fund net position — nonmajor enterprisefunds............................................................................................................................ 107 Combining statement of cash flows — nonmajor enterprise funds .................................................. 108 Combining statement of net position internal service funds ........................................................ 110 Combining statement of revenues, expenses, and changes in fund net position — internal service funds............................................................................................................................................. I 111 CITY OF IOWA CITY, IOWA TABLE OF CONTENTS June 30, 2015 Page COMBINING AND INDIVIDUAL FUND STATEMENTS (continued) Combining statement of cash flows — internal service funds.......................................................... 112 Statement of changes in assets and liabilities — agency funds......................................................... 114 STATISTICAL SECTION (UNAUDITED) Netposition by component................................................................................................................. 117 Changesin net position...................................................................................................................... 118 Fund balances — governmental funds................................................................................................. 120 Changes in fund balances — governmental funds............................................................................... 121 General government tax revenues by source...................................................................................... 122 Assessed and taxable value of property.............................................................................................. 123 Property tax rates — direct and overlapping governments.................................................................. 124 Property tax budgets and collections.................................................................................................. 125 Principaltaxpayers............................................................................................................................. 126 Principal water system customers...................................................................................................... 128 Sales history and total water charges.................................................................................................. 129 Principal sewer system customers...................................................................................................... 130 Sales history and total sewer charges................................................................................................. 131 Ratios of outstanding debt by type..................................................................................................... 132 Ratios of general obligation bonded debt to assessed value and net bonded debt per capita ............. 133 Ratio of annual debt service expenditures for general bonded debt to total general governmental expenditures..................................................................................................................................... 134 Computation of direct and overlapping debt...................................................................................... 135 Legal debt margin information........................................................................................................... 136 General obligation debt annual maturity schedule............................................................................. 137 Schedule of revenue bond coverage................................................................................................... 138 Revenue debt annual maturity schedule............................................................................................. 139 Revenue debt annual maturity by funding source.............................................................................. 140 Demographic and economic statistics................................................................................................ 142 Principalemployers............................................................................................................................ 143 Full-time equivalent city government employees by function........................................................... 144 Operating indicators by function........................................................................................................ 146 Capitalassets by function................................................................................................................... 148 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............................................................................................................................. 151 Independent auditor's report on compliance for each major federal program and report on internal control over compliance required by OMB Circular A-133............................................................... 153 Schedule of expenditures of federal awards....................................................................................... 155 Notes to the schedule of expenditures of federal awards................................................................... 160 Schedule of findings and questioned costs......................................................................................... 161 Correctiveaction plan........................................................................................................................ 163 Summary schedule of prior federal audit findings............................................................................. 164 2 December 11, 2015 To the Citizens, Honorable Mayor, Members of the City Council and City Manager City of Iowa City, Iowa 1 � 1 iw -"m AdEPw4nd r 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, 2015 is submitted herewith in accordance with the provisions of Chapter 11 of the Code of Iowa. The City's Finance Department prepared this report. Responsibility for both the accuracy of the data presented and the completeness and fairness of the presentation, including all disclosures, rest with the City. I believe the information, as presented, is accurate in all material respects and presented in a manner designed to fairly present the financial position and results of operations of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial affairs have been included. This report consists of management's representation concerning the finances of the City of Iowa City. Management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The CAFR reflects all funds of the City in accordance with standards set by the Governmental Accounting Standards Board (GASB). In 1999, GASB adopted Statement No. 34, Basic Financial Statements — Management's Discussion and Analysis — For State and Local Governments. The final effective date for the implementation of GASB No. 34 for the City of Iowa City was June 30, 2003. This report complies with those standards. This statement significantly changes governmental financial reporting in order to bring it closer to a private sector model. The City 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. The classifications include: nonspendable amounts that are not in spendable form or the City is legally or contractually required to be maintained intact; restricted amounts contain restraint on their use externally imposed by creditors, grantors, contributors, or laws or regulations of other governments, or imposed by law through constitutional provisions or enabling legislation; committed amounts can only be used for specific purposes imposed by formal action of the government's highest level of decision-making authority; assigned amounts are intended to be used for specific purposes; and the unassigned fund balance is the residual classification for the General Fund. Chapter 11 of the Code of Iowa requires an annual audit to be performed. The independent public accounting firm of Eide Bailly LLP was selected by the City. In addition to meeting the requirements set forth in Chapter 11, the audit was also designed to meet the requirements of the Single Audit Act of 1996 and related Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments and Non -Profit Organizations. While, the financial statements are the responsibility of the City, the responsibility of the auditor is to express an opinion on the City's financial statements based on their audit. The goal of the independent audit is to provide reasonable assurance that the City's financial statements for the fiscal year ended, June 30, 2015 are free of material misstatement. The audit is conducted in accordance with generally accepted auditing standards and involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement preparation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of Iowa City's financial statements for the fiscal year ended, June 30, 2015, are fairly presented in conformity with GAAP. The independent auditors' report on the basic financial statements and combining fund statements and schedules is included in the financial section of this report. As a recipient of federal financial assistance, the City is responsible for ensuring that adequate internal controls are in place to ensure compliance with applicable laws and regulations related to these federal programs. These internal accounting and administrative controls are subject to periodic evaluation by the City's management and the City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1996 and the U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State, Local Governments and Non - Profit Organizations. Information related to this single audit, including the schedules of federal financial assistance, findings and questioned costs, and independent auditors' reports on the internal accounting and administrative controls and compliance with applicable laws and regulations are included in the compliance section of this report. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditors. 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 Manager supervises 490 full-time and 44 part-time permanent municipal employees and 352 temporary employees, including a police force of 80 sworn personnel and a fire department of 64 firefighters. 'File City Clerk is aappoimed by the City C'ou116l arid reports to the t:oaancil, The City Clerk's Office administers thc, City goverrnraerat°s c;to€:-unicni ation, City licenses arid pb,rnutsm a rid leaovides ira_forraaaati€>rr froilr the Mr aricaCraal Code a iii City Cyrdinaaarcc S [0 the Prablic arrad artlaer C;i_tI delraartrraents. 'flay; City C: erl,'s Offi€.e is also responsible liar clistribUtiaat.-I aarrci nl airataainiaag <aCeaaaarte records of all Pity Council I`arocce(frags, The Clerk supervises 3 full-time employees and 1 temporary employee. J'he City Atioraaey is also appointed by t:1€€ City t;€aa.;arrc;il and vvorhs at the direc;tiora of the City C"€rrancil. 'file City .F"a,ttoriley saaper6ses t;la, City Altornc:y's Office, iaaclaadhig 4 Assista::rrat City ALtonieys and 2 oilier ta.rl(rtiraar; earaplc,�yees. Ira aa.dditi€rra, il,e City Atulryaey acts ars Chief Legarl C caraarscl to flAC City C`oaancil, City M n agcrm the various Cty clepaartrrie ats arratl staff" <aracl most City coararaaissionso c oinraainces aaracl 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. 5 Information Useful in Assessing the Government's Economic Condition The City's economic strength is based on the educational sector, medical services, and diversified manufacturing. The University of Iowa and the University of Iowa Hospital and Clinics are the City's largest employers with over 27,300 employees. The University of Iowa had a record high enrollment in fall 2015 of 32,150 students. The academic and research missions of the University, along with the health care services provided at its hospitals and clinics, have a tremendously positive economic impact on the area. The City also has a significant number of national and international businesses, including Fortune 500 companies. The City continues to see sustained production in our major local industries; ACT Inc., NCS Pearson, and Proctor & Gamble. While established firms continue to prosper and expand in Iowa City, opportunities are available for growth of new businesses. Continued economic development efforts with the Iowa City and Coralville Chambers of Commerce, private interests, the University of Iowa, other surrounding communities, and participation as a member of the Iowa City Area Development Group, have 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, but at a slow pace. The major employers have been able to maintain steady employment as evidenced in the unemployment rate for Iowa City, which continues to remain low at 2.9% for the month of June 2015, as compared to 3.7% for the State of Iowa, and 5.3% for the national average. The rate of new housing construction increased in comparison to the prior year based on the number of building permits issued. This consisted of 176 new single-family houses in 2014, as compared to 171 in 2013; multi -family dwelling units added to the tax rolls for the year ended December 31, 2014 was 218, compared to 488 in 2013; and mixed commercial and residential developments added in 2014 included 37 residential units. Altogether these additions totaled $78,784,970 in 2014, versus a total of $131,775,074 in 2013. The value of permits for commercial construction increased by $13,147,283 to $30,963,345 from 2013 to 2014. The value of remodeling permits for residential and commercial decreased by $6,265,002 from 2013 to 2014 to $27,179,330. 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 2015 is estimated to be 73,415 by the U.S. Census Bureau. There are many signs that the City remains healthy and vibrant with great promise for the future. The stability of the University of Iowa coupled with historically steady employment by the City's multi -sector base of manufacturing and service industries, helped insulate the City from any significant negative economic impacts of the national recession. The City's property valuations continue to rise and along with the low unemployment rate, this is indicative of the City's relative economic stability. Major Initiatives The City of Iowa City, with the assistance of the University of Iowa's Institute of Public Affairs, completed the City's Strategic Plan. The strategic planning process involved multiple steps, including gathering input from the general public, front-line City staff, department directors, and the City Council. The Strategic Plan established the prevailing organizational priorities as the following: Fostering a more INCLUSIVE and SUSTAINABLE Iowa City through a commitment to: 1. Healthy Neighborhoods 2. A Strong Urban Core 3. Strategic Economic Development Activities 4. A Solid Financial Foundation 5. Enhanced Communication and Marketing The first priority of the City's Strategic Plan is to strengthen and enhance the City's many neighborhoods. An effective stabilization strategy requires a review and analysis of the City's policies, programs, communications, and capital investment decisions that directly shape and influence a neighborhood's character and livelihood. Staff will be focusing on the central planning district neighborhoods; however many aspects of the neighborhood stabilization review will have implications throughout the community. In order to achieve the Council's goal, staff will focus on the land use regulations, public infrastructure and open space, private building stock, nuisance mitigation, open stakeholder communication, and updating planning documents. Projects to further neighborhood stabilization include the UniverCity Neighborhood Partnership, a joint project between the City and the University of Iowa to ensure the neighborhoods around the university remain vital, safe, affordable, and attractive places to live and work for both renters and homeowners by acquiring and rehabilitating homes near the University of Iowa campus for resale as affordable owner -occupied housing. Staff will also be actively working with the Iowa City Community School district to promote increased coordination in school and neighborhood planning as neighborhood schools play a role in neighborhood stabilization efforts. The City has current plans to help fund expanded recreation space at the two proposed new elementary schools in Iowa City. The City also continues to invest in neighborhood parks, trails, and events. The second priority of the Strategic Plan is the development of the City's core areas. The City is focusing on two distinct geographic areas: Downtown Iowa City and Riverfront Crossings. In 2012, the Iowa City Downtown District (ICDD), a self -supported municipal improvement district, was formed presenting a unique opportunity to bring together property owners, businesses, the University of Iowa, and the City of Iowa City. Staff, in partnership with stakeholders, is working to pursue policies and projects that will more fully realize the potential of the central business district and facilitate new private investment in the area. Some of the ICDD current initiatives include a downtown community gallery for public art and science programs, free Wi-Fi in the Pedestrian Mall, holiday lighting, improved snow removal, downtown ambassadors to assist visitors and maintain public spaces, alley beautification and a downtown beat cop. The City also instituted a new parking rate structure, including first hour free to make visiting downtown more convenient. The Park@201 building completed construction in 2014 in downtown Iowa City. The building is adjacent to the city's pedestrian mall and was constructed with the assistance of tax increment financing. The Park@201 is a 14 story mixed use development with 4 floors of commercial space and 10 floors of residential units. Meta Communications, a growing software company, has occupied three floors of the commercial space, and the building is completely occupied. Other buildings that are undergoing major re -development downtown include the historic Midwest One bank building, the Jefferson Hotel, and the conversion of the Wilson building and public space into a 15 story mixed use development. Also known as the Chauncey, the 15 story 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 anticipated to be $49 million and will be assisted with tax increment financing. In 2015, the City completed a streetscape plan for the Central Business District which included lighting, landscaping, parking, utility improvements, art work, and pedestrian amenities. Planned reconstruction and enhancement is proposed over the next five years for the Washington Street corridor, the Black Hawk mini park and the downtown pedestrian mall. A nationally renowned artist has been commissioned to create a major art piece that will be located in the downtown pedestrian mall near the Washington Street entrance. The Riverfront Crossing Development Plan is an initiative to revitalize the area south of Iowa City's downtown area. This area was hard hit by the flooding in 2008 and ideas for improving the district were initiated as part of a combined flood mitigation plan. Through a grant from the Partnership for Sustainable Communities, the City created a detailed plan for developing the area. The new neighborhood will feature a riverfront park with walking and biking trails, access to the Iowa River for boating and fishing, 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 development area is anchored by a 76.8 acre area that was formerly comprised of public facilities including the City's north wastewater treatment plant. The City received an $8.5 million hazard mitigation grant from the State of Iowa that allowed the City to remove these public facilities, and then convert the area into a riverfront park and wetland. This work is expected to be completed in 2016. On the north side of the Riverfront Crossing area, the University of Iowa is currently constructing the Voxman School of Music and the University of Iowa Art Museum. There are several private developments that have been proposed in the area near the Voxman School of Music and Art Museum buildings. The City has entered into a development agreement for the construction of a $33 million, 12 story hotel adjacent to the Voxman School of Music. The hotel will be located on a currently vacant lot and will also be connected to a City parking facility. Work on this development is expected to begin in 2016. Just to the south of these buildings, a mixed use development is underway that will include three components: a public parking facility consisting of approximately 600 parking spaces, the five story Midwest One mortgage center office building, and 28 residential townhome units. The estimated completion date for this development is 2017. Also in this area, a mixed use facility is proposed to be constructed on City owned property at the streets of Court & Linn. The City issued an RFP for the development of this parcel and has entered into a development agreement for the construction of a $74 million mixed-use development that will include a 15 story residential tower and a 13 story commercial tower with a hotel and 25,000 square feet of office space. Construction on this property is anticipated to begin in 2016. The City Council has also indicated a strong desire to promote private investment and re- development of other targeted areas throughout the community. The areas that are currently being focused on include the Towncrest commercial area, Sycamore Mall and First Avenue, Riverside Drive commercial area, 4201h Street Industrial Park, and Moss Ridge Office Park. In the Towncrest commercial area, City staff is working to facilitate redevelopment of several key properties and a streetscape project 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. The first catalyst project approved in the Towncrest Urban Renewal Area was a developer's agreement with MDK Development LLC for the redevelopment of a gas station and a building used for storage at the corner of Muscatine Avenue and William Street. MDK Development LLC purchased both properties, demolished the buildings and has constructed two new buildings with a combined square footage of 14,500. The two buildings will be primarily medical offices home to Eye Associates and Towncrest Dental. A third commercial condo, approximately 2,000 SF is available for lease/purchase. Total project costs for this development are estimated at $5,200,000. The departure of an anchor tenant at Sycamore Mall presented a great challenge, but also a unique opportunity to reinvent the commercial space. Mall ownership has commenced plans for physical improvements to the property and a new marketing name of Iowa City Marketplace. The Mall ownership has found a replacement anchor tenant that remodeled the former space and moved in during 2015. The City is coordinating significant capital projects in the area that are expected to last two or more construction seasons. These projects include improvements to Sycamore and Lower Muscatine Road, and a grade separation project on First Avenue including new storm sewer and a railroad underpass. These projects, which are underway in different phases, will each have a positive impact on the traffic flows and aesthetics in this commercial district. 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. A development in the Riverside Drive area is currently underway for a 15 story, $40 million multi-family/student housing development. The City is also developing a streetscape plan for this area which will include lighting, trails, landscaping, and other amenities and improvements. The City's municipal airport is adjacent to this area, and the City has successfully re -developed a portion of the airport into the North Aviation Commerce Park; all of the remaining lots in this business park were sold for development during 2015. The City has also invested considerable money for infrastructure development in the shovel -ready 420th Street Industrial Park. This project involved annexing and rezoning 180 acres of land and building the street, water, and sewer infrastructure needed to support industrial businesses. The Iowa City Area Development Group and City staff continues to market this property and respond to inquiries from business and site location consultants. This project's costs were $13,762,000 and were funded through bonds, state grants, road use tax, and wastewater operations. Another business park established for development is the Moss Ridge Office Park. This is a 243 - acre, 18 -lot office research and mixed use subdivision on the northeast edge of the city, just off Interstate 80. Significant infrastructure improvements are necessary to accommodate the planned growth and City staff is working with Moss Office Park owners and adjacent businesses on potential access arrangements to accommodate a phased development approach to this property. Construction of an access road and entrance from the adjacent highway were completed during 2015. Project costs to build the infrastructure were $4,900,000 and were funded with state grants and general obligation bonds. Northgate Corporate Park, adjacent to Moss Ridge Office Park, continues to experience build out and only one vacant lot remains in the park. A state grant was awarded to expand this business park to the north with a 40 acre addition that will add ten new commercial office lots with the capability to add eight more lots in the future. The City aims to create a strong and sustainable financial foundation that will provide needed stability and flexibility while utilizing taxpayer dollars in the most efficient and responsible manner. In order to achieve this goal, the City is focusing on two primary areas: new financial policies and strategies that will provide a greater level of financial stability and second, enhance the level of financial analysis presented to the public so elected officials will have a greater information foundation on which to base future decisions. Policies included in this analysis are economic development policies, purchasing policies and procedures, fund balance policies, debt management practices, general fund contingencies and an annual review of rates, user charges and fines. In May 2015, Moody's conducted a review of the City as part of the bond rating process and reaffirmed the City's Aaa bond rating. In their report, Moody said the rating "reflects the City's growing tax base that benefits from the institutional presence of the State University of Iowa" and a "healthy financial profile characterized by ample reserves and prudent management; moderate debt burden with rapid principal amortization; and moderate exposure to unfunded pension liabilities." The fifth and final priority of the City's Strategic Plan is enhanced communication and marketing. The City strives to be a high -functioning, customer service orientated organization that actively supports and engages stakeholders through clear, open, and innovative communication methods. The City worked with the University of Iowa to develop a new web site that was launched in 2015, and also introduced a City Facebook and Twitter page. These communication improvements have allowed the City to reach broader audiences and better promote activities, community news, and service information. The City also introduced ICgovXpress; a convenient way for Iowa City residents to request services, ask questions, or submit citizens reports of everything from trash and debris in unkempt yards to abandoned cars, un -shoveled walks, and graffiti either online or by downloading the ICgovXpress app to their smart phone. The City has also completed the implementation of enterprise resource planning software (ERP). On July 1, 2013 the financial modules of general ledger, accounts payable, purchasing and budget went live. The human resources and payroll sections were implemented on January 1, 2014, and the utility billing and revenue implementation was completed in the spring of 2015. The ERP system has allowed for improved internal workflows and more responsive internal and external communications. Long-term Financial Planning It is our intent to support the major initiatives through budget appropriations, departmental operations, and employee direction 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 (FY 15 — FY 17) is the passage of property tax reform (SF295) by the state legislature. The property tax reform bill has multiple components including a property tax rollback for commercial and industrial property, steadily reducing the taxable value of these property types. The bill establishes a State backfill for lost property tax revenues to the City due to the commercial and industrial rollback beginning in FY 15 and then caps the amount at FY 17 levels. The cumulative reduction in commercial and industrial property taxes due to this rollback is estimated to be $15,418,000 over the next ten years. The maximum reimbursement from the State would be $14,732,000 for a net loss in revenues of $686,000. The City received $1,048,359 in State reimbursement for the commercial and industrial rollback in fiscal year 2015. 10 This bill also limits the annual taxable valuation growth of residential and agricultural property to 3 percent, instead of the current 4 percent. Initially, the financial impact will be minimal but over time the consequences of this change will be significant. The effect will be that the taxable percentage of residential property will increase at a slower pace. Without this change, the estimated taxable percentage of residential property would be 60.85% in assessment year 2022. With this provision in place, the estimated taxable percentage in year 2022 will 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 $20,772,000 over the next ten years and the City will not receive any money from the State due to lost revenue from this provision. SF295 also establishes a multi -residential property classification that will include mobile home parks, assisted living facilities, and property primarily intended for human habitation. A gradual rollback will be applied to these properties that will basically treat them as residential property, rather than commercial, by the year 2022. The estimated cumulative loss over the next ten years is $15,505,000 and will not be reimbursed by the State of Iowa. The first fiscal year for this new class of property will be fiscal year 2017. With the implementation of SF295, the City estimates the tax revenue losses to be $2,768,000 for FY 15 FY 17. Since some of the effects of these reforms are gradual, the magnitude of the losses will not be felt till later years and the total cumulative ten-year loss is anticipated to be $36,963,000, which will affect the City's ability to finance services at current levels without finding other revenue sources or more efficient ways to deliver services. The City's long-term financial planning strategy is to promote targeted economic development, diversify its revenue structure, control spending and create efficiencies and to build adequate reserves and contingencies into its financial structure. As part of the change to the City's financial policies, the City raised its operating reserve requirements from 25% of annual expenditures and transfers out to 30% of annual expenditures and transfers out. In addition, the City is annually reviewing and adjusting its user fees, service charges, and fine structures to try to maintain all of its major enterprise funds with a positive net income after depreciation but before capital contributions, transfers, and extraordinary items. The City also continues to strive to reduce the City's property tax levy rate to be competitive for economic development purposes. For fiscal year 2013, the levy rate was $17.269 per $1,000 of assessed value. The property tax levy rate has been reduced for four consecutive years to $16.651 in fiscal year 2016. This has been a reduction of $.618 per $1,000 of assessed value or 3.6% over that time period. In looking at expenses for the FY15 — FY17 financial plan, the City will generally experience increased expenditures; however at a modest pace. Bargaining unit wage increases are approximately 2.00% to 2.75% each year, and the budgeted full time equivalents (FTE) has decreased from 623.90 in FY13 to 598.93 in FY16. In addition, public safety pension contribution rates have decreased in FY 16 and are projected to continue to decrease in FY 17 and future years. The City has also seen virtually no increase in its health insurance premium rates in the last three years. In balancing the budget for the three-year period, the City attempted to reduce costs where possible while continuing to provide high quality services, identify and eliminate redundancies that may exist within the organization, examine existing and potential new revenue sources, promote and plan for economic development and redevelopment throughout the City to ensure strong property values, provide for necessary improvements to existing infrastructure, and uphold fiscal integrity and maintain adequate cash reserves. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting (the Certificate) to the City of Iowa City, Iowa for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2014. 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 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, 2015. 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 fourth consecutive year the City has received this award. Responsibility and Acknowledgments The Department of Finance prepared the Comprehensive Annual Financial Report of the City of Iowa City, Iowa for the fiscal year ended June 30, 2015. 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, Justin Armatis and Katie Downing and 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, p Dennis Bockenstedt Director of Finance 12 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Iowa City Iowa For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2014 *0040W, 4 A., Pi G 4: - V Executive Director/CEO 13 U 0 4- 0 _> U C O N A AI O N � 0 ° E N a) 0 U - oU) m� N fn QCo L iv �Q C O L a O O C L•°m 0��0 O Q� �C O m c �0 � i N C O L 7@ - a0 7tL ' O ca U) .s O 0 LL O U CL E 0 E Q �3 � E � m E Q�a0 Q Q 0 QQLL O N � 0 ° E `O U N E � = 2 0 U - oU) m� N fn QCo m c co �Q C L a 06.2 U @ c C (1) U a OC d ca O O Q� �C O m c �0 � N C O 7tL ' ..->'. L.L U) .s O O O U U > IL C > E 0 E Q �3 � E � m E Q�a0 Q Q 0 L O 0 U C O N O N 0 _ a) @ N L U g E @ @ O 7 7 UU22 Y N � 0 ° E `O U N E � = 2 U na U - oU) m� 0� mo m c co �Q U � "EO m av @ @ O 76 Q W (n (n W L O l^� vJ � N C O @ C 0 O 0 00.0 Q U > IL C > a N @ a) O) U' � E � m E QWI7� 14 C O_ - co o Co U 00- O N Q L (O`0 O U lO^ C) C vJ C U N - ca Y 'z L F- d d � N � 0 ° E `O U N E � = 2 U na U - oU) m� 0� mo m c co �Q �ScOO "EO m av @ @ O 76 Q W (n (n W U w U 0 06 � U 0 -p o O OU) Q.O .E0 iC O Z a) > c > _0 0 0 E o c 0 :E- 0 L Q'��00=3 O E L Q— N w E O. O 0) O c C OO I.S z >E o@) o >.m7: wO0QoZZ: 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, 2015 ELECTED OFFICIALS Matt Hayek Susan Mims Kingsley Botchway II Terry Dickens Rick Dobyns Michelle Payne Jim Throgmorton APPOINTED OFFICIALS Thomas Markus Marian K. Karr Eleanor Dilkes DEPARTMENT DIRECTORS Assistant to 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 Geoff Fruin Douglas W. Boothroy Susan Craig Ron Knoche Chris O'Brien Linda Kopping John Grier Mike Moran Dennis Bockenstedt Sam Hargadine 15 Term Expires January 2, 2016 January 2, 2018 January 2, 2018 January 2, 2018 January 2, 2016 January 2, 2016 January 2, 2016 Date of Hire December 1, 2010 May 21, 1979 March 18, 1996 November 28, 2011 September 22, 1975 July 28, 1975 April 28, 1999 December, 29, 1997 March 20, 1995 August 10, 1992 September 26, 1983 February 15, 2013 August 29, 2005 16 Financial Section Tabs EideBailly. CPAs & WsCNM Aovtso>ss Independent Auditor's Report To the Honorable Mayor and. Members of the City Council City of Iowa City, Iowa report on the Fimncial Statements .1-L, ,:ccompanyin finan-W:a! so.i.e governmental activities, the business -type : a '. , r ``end. and the . }:,;: i', nd information of the City of Iowa. City, Iowa, City) as ofan:: 2015.....: the re:ated notes to the financial statements, which .;collectively comprise the City's bas: f`:--Lnoial s'c---ments as !fisted in the table of contents. Management's Responsibility for the Financial Statements ManaLlc -nent is responsible for the preparation and fair prese-, :, °,ion of :7nancial statements in x ith accounting principles generally accepted in thL� -1 n itec? of America; this includes and maintenance of internal control rciovant :c. --i:paration and fair presentatlo:- t :''�::.: iai statements that are free from material misstatement, ,Ai,etiler due to fraud or error. Auditor's lac. �a�nsillilir�' .: :Vspo:.s: :.i.) i, t,� r_A-c ss opinions on these financial statements based on our audit. We conducted in accordar_ce °,\ ith auditing standards generally accepted in the United Stn :s of America and standards applicabi :.,) financial audits contained in GovernmeniAuclir hgS14na ,u;:'b. issued by the Comptroller Gcneral of tie United States. Those standards require that we plan and. :°. µ:fit the audit to obtain reasonable assurance about whether the financial statements are free from rnateriai misstatement. An au(":, involves perfor"ing procedures to obtain audit evidence ab{ ._t {: ; amounts and disclosures in °.s. --he: procedures selected depend on the all �7" -`s � udgment, including the SN of material misstatement of the financial state, -, whether due to fraud or error. ,-.ai:those -'s:, asscssmentsy the auditor considers intern L: L,, -,m7 ;: -,'want to the entity's preparation an: ;-air presentation of t;.c financial statements in order to 'cs: ::.:.,c'.:t n:4 cedures that are appropriate in 4 k�rcumstances, but n: t ' : w purpos:� ,:,,,; on Jl ,: veness of the entity's control. Accordi;,�':•� . �� LN-)ress no such opinlo ,.."t.". ,_edit also i:icludes evaluating the <.ppropriateness of accounting poii4::: :Isod and T',c -4msonr': ; ::.s .` s:,;:iticant aceounting estimates 7 -dc > v management, as well as evaluatinthe c�ticr ll statements. %Q .hat the audit evidence we have obtainec.' nn' appropriate to pre.}d ide a basis for it opinions. 17 www.eidebciily.com 1545 Associates Dr., Sid, 101 1 Dubuque, IA 52002-2299 T 563.556.1790 F 563,557,7842 ECCE Opinions In our opinion, the financial statements referred to above present fair!-. in all rr<°.:c-i resne:.ts. the respective financial position Of the governmental activities, Tl1t ",uSStictiti-t1pe :Cili t.. eact, 17'"" 07 ;;. '.d, and the aggregate remaining fund inform<i�.',,° :�fthe Citti iO',� a Citi.:. .:_ aS of 7L:rie 30, ZV 15. ant; the respective changcc in financial positit?: ?cre applicable. ::ash floNN s -:r'�,.-cof fc.- the near then ended in accordance s.c,=nting fir' �', �nerally aeceptec' t.; 4 `nited S . o' ...._ Emphasis of Matter As discussed in Notes 1, 6, and 14 w tltc 1nancial statements, the Citti )i' iowa City, Iowa, has adopted the prop isions of GASB Staten? _-: t No. 68, Accounting anti Financial Reporting for Pensions and GASB Statcl? ,�i:t No. 71 Pensrc,,. ; ..;; kr�ionfor Contributions :Slade Subsequent to the Measurement .Gate, sic :a rw>u;!c.: i.-, a restates nt of the net position as of July 1.2014.Our opinions are not modified to th7s oth4r Viatters '?equired Supplementary Information Accounting principles generally accepted in the United States cYf America require that the management's J :fission and analysis and other required supplenicr:tc:r% : ,:'o-.Tnation listed in the table of contents be , o supplement � rile financial staten:cil s. S:;v i s information although not apart of the basic statements, is rt cuired by the Governmental Aces,,-.r.i;r4_> Standards Board, who considers it to be part oft �rting for placing '.' °tasic fi.na icia tits tcments in an appropriate cr.:t:c ,.:1. cti)rlonli ::gal context. We , ,.•. ` ripplied ited procedures , ' me required accordance wrtl] accepted in t11.: t._nited Stites ofAmcrrc,Y. "~ic'. ..~::s , i of inquiriw ofmanage.:,� ::4: of preparing tir` and comparis t:.c ;I1i0 ...t 1 ion for 4:°•.5:`t nCV with manaswge111c,r. a _ v ,.ti?:: t . ,,ur inau;rlL;s. the financial �:<rGInnents, anc other h,iC,\ C obtained during our aud:: of the ,::til t.,: S.a.:cn],!:r.s. We do not =ress an f p;pion or pnr.1: ?y assurance on the information do ::rpt provi&�.is with s.:r 'c:eraTC1. d: n t Lo express an opinion or prm icc ^ssuran,: c. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of ?ovm City, Iowa's financial statements. The introductory section. c �:t:t�ining nonmajor fund frnaiic;a:l tatements, and statistical section are presented for purposes o: {,-c'.itional analysis and ars; no' %quired part of the financial statements. The accompanying sche' ,LA of expenditures t t c: i awards is presented for purposes of additional analysis as requircc: ,,7,. U.S. Office of Management and Budget Circular A-133, Audits ofSrares. Local Governments. and V, i OrganL-ations, and is also not a required part of the financial statements. The combining nonmajor fund financial statements and the schedule of expenditures of eeeral awards are the responsibility of management and were derived from and relate directly to the unde7:% :!' accour ,i Icx and other records used to prepare the basic financial statements. Such information has roti, 4;.:- c u to the auditing procedures applied in the audit of the basic financial statements and certain ad':::.i a procedures, including comparing and reconciling such information directly to the underly i:r4 acco!_irating, 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 accc',cd in the [united States of America. In our opinion, the combining nonmajor fund financial statements an?` ,izs schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the 7asic financial statements as a whole. is The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by GovernmentAudkin; Standards In accordance with Government Auditing Standards, we have also issued a report dated December 11, 2015. on our consideration of the City of Iowa City, Iowa's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, anC' ,�thcr matters. The purpose of that report is to describe the scope ol' our testing of interna! :ontrol over reporting and compliance and the results of that testing, and .o o pro\ .::.:. oi-:-, a;; t,:; he Vontrol over financial reporting or on compliance. That report is integral part of an Lcrfor;-cd 'n accordance with Government auditing Standards in considering the City's internal Control over : sporting and compliance. 4f-,Y-� 4 Z- 7'�' Dubuque, Iowa December 11, 2015 (This pale left blank intentionally.) 20 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, 2015. 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 — 12 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, 2015 by $564,724,000 (net position). Of this amount, $72,887,000 (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 $30,192,000 during the fiscal year. Governmental activities increased by $18,603,000 and business -type activities increased by $11,589,000. • At the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $77,026,000, a decrease of $2,159,000 in comparison with the prior year. Of this total amount, approximately $19,286,000 or 25.0% is unassigned and available for spending at the City's discretion. • At the end of the current fiscal year, the City's unassigned fund balance for the General Fund was $19,286,000 or 40.2% of total General Fund expenditures. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements; and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government -wide Financial Statements: The government -wide financial statements are designed to provide readers with a broad overview of the City's finances in a manner similar to a private -sector business. The statement of net position presents information on all of the City's assets and deferred outflows of resources, liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City include Public Safety, Public Works (roads and traffic controls), Culture and Recreation, Community and Economic Development, General Government, and Interest on long-term debt. The business -type activities of the City include Airport, Cable Television, Housing Authority, Parking, Sanitation, Stormwater Collection, Transit, Wastewater Treatment, and Water. The government -wide financial statements may be found on pages 32 35 of this report. 21 Fund Financial Statements: A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds: Governmental funds are used to account for essentially the same function reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements and is typically the basis that is used in developing the next annual budget. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison. The City has five major governmental funds: General Fund, Employee Benefits Fund, Community Development Block Grant Fund, Bridges, 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 36 39 of this report. Proprietary Funds: The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City uses enterprise funds to account for its Airport, Cable Television, Housing Authority, Parking, Sanitation, Stormwater Collection, Transit, Wastewater Treatment, and Water activities. Internal Service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City has four Internal Service Funds: Equipment Maintenance, Central Services, Loss Reserve, and Information Technology. Because these services predominantly benefit governmental rather than business -type functions, they have been included within governmental activities in the government -wide financial statements. Proprietary funds financial statements provide the same type of information as the government -wide financial statements, only in more detail. Parking, Wastewater Treatment, Water, Sanitation, Stormwater, Housing Authority and Transit Funds are considered to be major funds and are reported individually throughout the report. The other two non -major enterprise funds are grouped together for reporting purposes and listed under a single heading "Other Enterprise Funds". Detailed information for each of the non -major funds is provided in the combining statements on pages 106 108. 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 40 45 of this report. 22 Fiduciary Funds: Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not available to support the City's own programs and therefore are not reflected in the government -wide financial statements. The City has one fiduciary fund: Project Green, which is maintained as an agency fund. The basic fiduciary funds financial statements can be found on page 46. 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 47 - 85 of this report. Other Information: The combining statements referred to in the above paragraphs in connection with non - major governmental funds, non -major enterprise funds, and internal service funds are presented immediately following the notes. Government -wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $564,724,000 at the close of the fiscal year ended June 30, 2015. 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, 2015 (amounts expressed in thousands) 23 Governmental Business -type activities activities Total 2014 2014 2014 2015 (not restated) 2015 (not restated) 2015 (not restated) Current and other assets $ 181,204 S 176,570 S 104,844 $ 106,436 S 286,048 $ 283,006 Capital assets 199,652 187,654 325,429 323,181 525,081 510,835 Total assets 380,856 364,224 430,273 429,617 811,129 793,841 Deferred outflows of resources 6,767 - 1,296 - 8,063 - Long-term liabilities outstanding 91,815 71,723 62,026 67,504 153,841 139,227 Current and other liabilities 15,864 11,171 7,931 6,406 23,795 17,577 Total liabilities 107,679 82,894 69,957 73,910 177,636 156,804 Deferred inflows ofresources 74,248 63,132 2,584 - 76,832 63,132 Net position: Net investment in capital assets 153,729 138,482 279,272 264,727 433,001 403,209 Restricted 36,447 39,958 22,389 19,438 58,836 59,396 Unrestricted 15,520 39,758 57,367 71,542 72,887 111,300 Total net position $ 205,696 S 218,198 S 359,028 $ 355,707 S 564,724 $ 573,905 23 A portion of the City's net position, $58,836,000 or 10.4%, represents resources that are subject to external restrictions on how they may be used. The remaining balance of the unrestricted net position, $72,887,000 or 12.9%, 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, 2015, 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 Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reporting for Pensions — an Amendment of GASB No. 27 was implemented during fiscal year 2015. The beginning net position for governmental activities and business -type activities were restated $31,105,000 and $8,268,000, respectively, to retroactively report the net pension liability as of June 30, 2014 and deferred outflows of resources related to contributions made after June 30, 2013 but prior to July 1, 2014. The financial statement amounts for fiscal year 2014 net pension liabilities, pension expense, deferred outflows of resources and deferred inflows of resources were not restated because the information was not available. In the past pension expense was the amount of the employer contribution. Current reporting provides a more comprehensive measure of pension expense which is more reflective of the amounts employees earned during the year. The following is a more detailed review of FYI 5's operation. Governmental Activities: Governmental activities increased the City's net position by $18,603,000. The increase in net position of governmental activities is primarily due to receiving grants to fund expenses for capital assets and community development projects. The total revenues for governmental activities for FY15 were $91,301,000. Governmental activities are primarily funded through taxes, $55,015,000 or 60.3%, and grants and contributions, $20,257,000 or 22.2%. Taxes increased from the prior year by $1,220,000, 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 $4,701,000 as the City's expenses for flood mitigation, which were covered by supplemental Community Development Block Grants, have increased. Expenses for governmental activities totaled $62,641,000. Governmental activities are tracked by function including Public Safety, Public Works, Community and Economic Development, Culture and Recreation, and General Government. In FY15, Public Safety accounted for the highest portion of governmental expenses, $21,193,000 or 33.8%, and decreased slightly over the prior year due to a decrease in pension expense. Culture and Recreation, $14,049,000 or 22.4%, made up another large portion of the governmental expenses and decreased over the prior year due to a decrease of trails and improvements to parks. Public Works, $11,037,000 or 17.6%, made up the third highest portion of governmental expenses and increased from the prior year due to more flood recovery and mitigation projects. Business -type Activities: Business -type activities increased the City's total net position by $11,589,000. The increase in net position was primarily in the Stormwater fund and is due to transfers from governmental capital project funds. For all business -type activities, revenues exceeded expenses by $2,106,000. Revenues for business -type activities totaled $55,091,000. The primary revenue source for business -type activities is charges for services, $40,005,000 or 72.6%. In addition for FY15, the City's business type - activities had a significant portion, $13,149,000 or 23.9%, of their revenues from grants and contributions used to help fund capital and flood recovery projects for business -type activities. This is a decrease of $9,666,000 due to additional grants to cover expenses for the Wastewater flood mitigation project received in the prior year. The total expenses for business -type activities in FY15 were $52,985,000. Wastewater Treatment represented the highest portion of business -type activities, $12,131,000 or 22.9%, with Water, $8,403,000 or 15.9%, Sanitation, $8,114,000 or 15.3%, Housing Authority, $7,873,000 or 14.9%, and Transit, $7,379,000 or 13.9%, making up the remainder of the majority of business -type activities expenses. 24 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. 25 Governmental Business -type activities activities Total 2014 2014 2014 2015 (not restated) 2015 (not restated) 2015 (not restated) Revenues: Program Revenues: Charges for services S 8,140 S 7,570 S 40,005 S 39,355 $ 48,145 S 46,925 Operating grants and contributions 8,701 9,976 10,269 9,003 18,970 18,979 Capital grants and contributions 11,556 5,580 2,880 13,812 14,436 19,392 General Revenues: Property taxes 52,205 50,551 - - 52,205 50,551 Local option sales tax - 466 - - 466 Other taxes 2,810 2,778 - 2,810 2,778 Grants and contributions not restrcieted to specific p urp oses 1,048 - - - 1,048 - Earnings on investments 1,188 973 707 494 1,895 1,467 Gain on disposal of capital assets 135 1,651 856 725 991 2,376 Other 5,518 4,353 374 265 5,892 4,618 Total revenues 91,301 83,898 55,091 63,654 146,392 147,552 Expenses: Public safety 21,193 22,721 - - 21,193 22,721 Public works 11,037 8,755 11,037 8,755 Culture and recreation 14,049 15,578 14,049 15,578 Community and economic development 7,093 10,570 7,093 10,570 General government 7,752 7,687 7,752 7,687 Interest on long-term debt 1,517 1,797 - - 1,517 1,797 Wastewater treatment - - 12,131 21,139 12,131 21,139 Water 8,403 8,723 8,403 8,723 Sanitation 8,114 8,402 8,114 8,402 Housing authority 7,873 7,703 7,873 7,703 Parking 4,678 4,093 4,678 4,093 Airport 1,612 1,209 1,612 1,209 Stormwater 2,091 1,314 2,091 1,314 Cable television 704 781 704 781 Transit - - 7,379 7,795 7,379 7,795 Total expenses 62,641 67,108 52,985 61,159 115,626 128,267 Change in net position before transfers and special item 28,660 16,790 2,106 2,495 30,766 19,285 Transfers (10,057) (6,192) 10,057 6,192 - - Special item - - (574) - (574) - Change in net position 18,603 10,598 11,589 8,687 30,192 19,285 Net position beginning of year, as restated 187,093 207,600 347,439 347,020 534,532 554,620 Net position end ofycar S 205,696 S 218,198 S 359,028 S 355,707 $ 564,724 S 573,905 The graphs on the following pages represent a breakdown of revenue by source and expenses by program area for governmental and business -type activities. 25 Governmental Activities FY2015 Revenue by Source Misc. Charges for Other Taxes Other 3% god services qo/ Business -Type Activities FY2015 Revenue by Source Grants and Misc. Other Contributions 3% 1 -ants and Contributions 23% 26 27 Governmental Activities FY2015 Expenses by Program Area astewater (amounts expressed in thousands) 22,000 Public 24,000 Safety 22,000 20,000 Authority Transit 14,000 Culture and 18,000 Re-creation 16,000 Parking .��. Public 14,000 ors General 12,000 ov Ca 10,000 8,000 6,000 2,000 4,000 2,000 Program Area 0 Program Area 27 Business -Type Activities FY2015 Expenses by Program Area astewater (amounts expressed in thousands) 22,000 20,000 Sanitation Community an con ev Authority Transit 14,000 Interest xpense 27 Business -Type Activities FY2015 Expenses by Program Area astewater (amounts expressed in thousands) 22,000 20,000 Sanitation 18,000 16,000 Authority Transit 14,000 12,000 Parking .��. c 10,000 A 8,000 6,000 4,000 2,000 0 Program Area 27 astewater Treatment Sanitation Housing Water Authority Transit Parking Stormwater Airport Cable TV 27 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, 2015, the City's governmental funds reported combined ending fund balances of $77,026,000, a decrease of $2,159,000 in comparison with the prior year. Of this total amount, $19,286,000 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 $53,188,000 or 69.1% contains external restraints on its use. The assigned fund balance of $4,483,000 or 5.8% has been identified by the City to be used for specific purposes. The nonspendable fund balance is $69,000 or 0.1 %, which the City is contractually required to maintain intact or cannot be spent because it is in a nonspendable format, such as inventories. The General Fund is the chief operating fund of the City. As of the fiscal year ended June 30, 2015, the unassigned fund balance of the General Fund was $19,286,000 while General Fund's total fund balance was $49,129,000. 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 40.2% of total General Fund expenditures of $48,022,000, while total fund balance represents 102.0% of that same amount. During the current fiscal year, the fund balance of the City's General Fund increased by $1,220,000. This is due to the sale of homes as part of the UniverCity Neighborhood Partnership Project. The fund balance in the Bridge, Street, and Traffic Control Construction Fund was $8,515,000, a decrease of $2,623,000. This fund accounts for transactions relating to the acquisition or construction of major streets, bridges, and traffic control facilities. The fund balance in the Other Construction Fund was $4,500,000, a decrease of $2,354,000. This fund accounts for the construction or replacement of other governmental general capital assets, such as administrative buildings, with various funding sources, including general obligation bonds, intergovernmental revenues, and contributions. The change in these fund balances is due to timing of the sale of GO bonds. The fund balance for the Community Development Block Grant Fund was $277,000, representing a $286,000 increase in FY15. In FYI 5, the City received program income that we were required to use prior to accessing new grant funding. This program income was not fully utilized in FYI and this fund will normally carry a minimal or zero fund balance going forward. The ending fund balance of the Debt Service Fund was $7,052,000, an increase of $180,000, all of which is reserved for the payment of debt service (i.e. payment of general obligation principal and interest). The fund balance in the Employee Benefits Fund was stable from prior year. The ending fund balance was $1,593,000, a decrease of $120,000 or 7.0% from FY14. 28 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 $346,421,000, an increase in net position of $10,322,000. 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, $279,272,000 is net investment in capital assets. Unrestricted net position totaled $44,760,000, a decrease of $15,442,000 compared to the previous year. The Internal Service funds showed net position totaling $33,797,000 as of June 30, 2015, an increase of $2,065,000 primarily due to an 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 $2,785,000 or 1.9% to a total of $150,137,000 and the expenditure budget by $22,851,000 or 13.1% to a total of $197,383,000. 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, 2015 amounts to $525,081,000, 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, 2015 increased by $11,998,000 for governmental activities compared to the prior year and increased by $2,248,000 for business - type activities over the prior year. The following table reflects the $525,081,000 investment in capital assets, net of accumulated depreciation. Land Buildings Improvements other than buildings Machinery and equipment Infrastructure Construction in progress Total City of Iowa City's Capital Assets (net of depreciation) (amounts expressed in thousands) Governmental Activities 2015 2014 S 23,470 S 23,103 38,238 39,083 Business -type Activities 2015 2014 S 33,789 $ 33,497 64,051 67,094 Total 2015 2014 $ 57,259 $ 56,600 102,289 106,177 3,737 3,884 4,925 5,369 8,662 9,253 14,853 13,874 9,578 10,608 24,431 24,482 94,792 92,601 201,698 199,175 296,490 291,776 24,562 15,109 11,388 7,438 35,950 22,547 S 199,652 S 187,654 S 325,429 $ 323,181 $ 525,081 $ 510,835 29 Major capital asset events during the current fiscal year included the following: • Work was completed on the South Wastewater Plant Expansion in FY14. This project relocated the North Wastewater Treatment Plant and consolidated operations into the South Wastewater Treatment Plant through expansion of south plant facilities and demolition of the north plant facilities. Demolition of the north plant was started in FY15. Funding for the project will be provided by the State of Iowa through sales tax increment funding. Expenses of $3,733,000 were incurred in FY15. • Current construction projects at the municipal airport include rehabbing existing runways, adding a parallel runway to improve safety, and obstruction mitigation. The construction in progress balance at the end of FY14 was $3,201,000. Additional expenses of $716,000 were incurred during FY15. $65,000 remains in construction in progress and $3,426,000 was capitalized. These costs are primarily funded through federal or state grants, with the remainder of funding from GO bonds. • Current construction is being done for the West Side Levee Project, which includes the construction of an earthen levee, riverbank stabilization, and interior drainage improvements. The construction in progress balance at the beginning of the year was $2,614,000. Additional expenses of $2,325,000 were added in FY 15, for an ending balance in construction in progress of $4,939,000. The total cost of the project is $5,729,000 and is funded primarily through federal or state grants, with the remainder of funding from GO bonds. • Expenses for a variety of street and bridge construction were moved into construction in progress at the end of FY15 for a total balance of $15,394,000. This includes a project from the City's major initiative for economic development with a capitalized balance of $7,819,000 for Lower Muscatine from Kirkwood to First Avenue. Additional construction in progress includes $6,017,000 for the Iowa City Gateway Project, which will reconstruct and elevate Dubuque Street and Park Road Bridge to provide flood protection. Additional information on the City's capital assets can be found in Note 4 to the financial statements. Debt Administration: At the end of the fiscal year, the City had total bonded debt outstanding of $106,945,000. Of this amount, $59,340,000 comprises debt backed by the full faith and credit of the City. However, $590,000 or 1.0% of the general obligation bonds is debt that serves enterprise funds and is abated by their charges for services and $4,799,000 or 8.1% of these bonds is debt that will be paid with Tax Increment Financing revenues. $47,605,000 represents revenue bonds secured solely by specific revenue sources. City of Iowa City's Outstanding Debt General Obligation and Revenue Bonds (amounts expressed in thousands) Governmental Business -type Activities Activities 2015 2014 2015 2014 General obligation bonds $ 58,750 $ 63,530 S 590 $ 890 Revenue bonds 2,655 2,655 44,950 56,845 Total S 61,405 $ 66,185 S 45,540 $ 57,735 2015 $ 59,340 47,605 $ 106,945 Total 2014 $ 64,420 59,500 $ 123,920 The City issued $7,785,000 General Obligation bonds during FY15 and during the current fiscal year the City's total bonded debt decreased by $16,975,000 because of retirement of debt. 30 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, 2015 were as follows: General obligation bonds Aaa Wastewater treatment revenue bonds A Water revenue bonds A 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 $241,332,000. With outstanding debt applicable to this limit of $77,506,000 we are utilizing 32.1% of this limit. More detailed information on debt administration is provided in Note 5 of the financial statements. Economic Factors and Next Year's Budget and Rates During the 2009 session, the Iowa State Legislature passed a law allowing cities to utilize franchise fee tax as a revenue alternative to property tax. The Iowa City Council passed a local franchise fee tax of I% on natural gas and electricity that became effective April 1, 2010. This revenue is being utilized to support additional public safety initiatives, including operating a fourth fire station. In FY15, the City collected $902,000 in local franchise fee. The City expects continued constraints by the State's property tax formula. The State passed property tax reform, which will negatively affect the City's general operating funds. Without the potential for new revenue sources, like those mentioned above, the City's opportunities for new initiatives are limited. The Council has established a balanced budget in the General Fund for FYI that strives to maintain current service delivery levels. The tax levy rate per $1,000 of assessed valuation for FY 16 is provided below: General Levy $ 8.100 Debt Service Levy 3.929 Employee Benefits Levy 3.114 Transit Levy 0.950 Liability Insurance Levy 0.292 Library Levy 0.270 Total City Levy $ 16.655 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. 31 CITY OF IOWA CITY, IOWA STATEMENT OF NET POSITION June 30, 2015 (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 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) Total assets Deferred Outflows of Resources Pension related deferred outflows Liabilities Accounts payable Contracts payable Accrued liabilities Interest payable Deposits Advances from grantors Due to other governments Notes payable Unearned revenue Noncurrent liabilities: Due within one year: Employee vested benefits Bonds payable Due in more than one year: Employee vested benefits Net pension liability Other post employment benefits obligation Notes payable Bonds payable Landfill closure/post-closure liability Total liabilities Governmental Business -type A......... .... A $ 63,571 $ 54,744 $ 118,315 52,240 - 52,240 718 3,374 4,092 364 245 609 17,308 675 17,983 (12,127) 12,127 - 10,298 2,235 12,533 656 630 1,286 2,170 - 2,170 45,981 30,809 76,790 25 5 30 48,032 45,177 93,209 I5I,620 280,252 431,872 380,856 430,273 811,129 6,767 1,296 8,063 2,296 1,264 3,560 5,468 3,57I 9,039 4,145 370 4,515 168 918 1,086 1,078 1,146 2,224 69 - 69 636 95 731 2,004 - 2,004 - 567 567 1,148 414 1,562 11,255 5,314 16,569 928 308 1,236 24,556 6,506 31,062 2,932 1,068 4,000 211 - 211 50,785 40,843 91,628 - 7,573 7,573 $ 107,679 $ 69,957 $ 177,636 (continued) 32 CITY OF IOWA CITY, IOWA STATEMENT OF NET POSITION (continued) Deferred inflows of resources Pension related deferred inflows Succeeding year property taxes Notes Total deferred inflows of resources Net position Net investment in capital assets Restricted for or by: Employee benefits Capital projects Debt service Police Other purposes Bond ordinance State statute Future improvements Grant agreement Unrestricted Total net position June 30, 2015 (amounts expressed in thousands) Governmental Business -type $ 10,791 $ 2,584 $ 13,375 52,035 - 52,035 11,422 - 11,422 153,729 279,272 433,001 1,593 - 1,593 27,014 - 27,014 6,921 - 6,921 510 - 510 409 - 409 - 13,138 13,138 - 5,820 5,820 - 486 486 - 2,945 2,945 15,520 57,367 72,887 $ 205,696 $ 359,028 $ 564,724 The notes to the financial statements are an integral part of 'this statement. 33 CITY OF IOWA CITY, IOWA STATEMENT OF ACTIVITIES For the Year Ended June 30, 2015 (amounts expressed in thousands) Business -type activities: Program Revenues Wastewater treatment 12,131 12,189 Operating Capital Water 8,403 Charges Grants and Grants and Functions/Programs: Expenses for Services Contributions Contributions Governmental activities: 7,873 237 7,628 - Public safety $ 21,193 $ 3,926 $ 276 $ - Public works 11,037 388 7,443 11,556 Culture and recreation 14,049 801 40 - Community and economic development 7,093 50 942 - General government 7,752 2,975 - - Interest on long-term debt 1,517 - - - Total governmental activities 62,641 8,140 8,701 11,556 Business -type activities: Wastewater treatment 12,131 12,189 21 1,370 Water 8,403 8,527 2 581 Sanitation 8,114 9,015 25 - Housing authority 7,873 237 7,628 - Parking 4,678 5,502 - - Airport 1,612 349 232 137 Stormwater 2,091 1,147 279 792 Cable television 704 750 - - Transit 7,379 2,289 2,082 - Total business -type activities 52,985 40,005 10,269 2,880 Total $ 115,626 $ 48,145 $ 18,970 $ 14,436 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 Special item Total general revenues and transfers Changes in net position Net position beginning of year, as restated Net position end of year The notes to the financial statements are an integral part of this statement. 34 Net (Expense) Revenue and Changes in Net Position Governmental Business -type Activities Activities Total $ (16,991) $ - $ (16,991) 8,350 - 8,350 (13,208) - (13,208) (6,101) - (6,101) (4,777) - (4,777) (1,517) - (1,517) (34,244) - (34,244) - 1,449 1,449 - 707 707 - 926 926 - (8) (8) - 824 824 - (894) (894) - 127 127 - 46 46 - (3,008) (3,008) - 169 169 (34,244) 169 (34,075) 52,205 - 52,205 1,057 - 1,057 851 - 851 902 - 902 1,048 - 1,048 1,188 707 1,895 135 856 991 5,518 374 5,892 (10,057) 10,057 - - (574) (574) 52,847 11,420 64,267 18,603 11,589 30,192 187,093 347,439 534,532 $ 205,696 $ 359,028 $ 564,724 35 CITY OF IOWA CITY, IOWA BALANCESHEET GOVERNMENTAL FUNDS June 30, 2015 (amounts expressed in thousands) Assets Equity in pooled cash and investments $ Capital Special Revenue Projects 2,099 $ Bridge, Community Street, and Development Traffic Other Employee Block Control Debt Governmental General Benefits Grant Construction Service Funds Total Assets Equity in pooled cash and investments $ 19,001 $ 1,553 $ 283 $ 2,099 $ 6,366 $ 5,336 $ 34,638 Receivables: 1,328 S 11 $ 1 $ 30 $ S 429 S 1,799 Property tax 29,922 9,689 - - 12,363 266 52,240 Accounts and unbilled usage 250 15 7 150 - 204 619 Interest 217 - - 30 16 14 277 Notes 1,340 15,266 - 702 - 17,308 Advances to other funds 2,681 - 18 - 151 - 2,850 Due from other governments 1,859 327 2 2,069 - 5,951 10,208 Inventories - - - - - 148 148 Assets held for resale 2,005 165 - 2,170 Restricted assets: 27 - - - 42 69 Equity in pooled cash and investments 30,141 - - 9,103 - 6,663 45,907 Deferred inflows of resources Total assets S 87,416 S 11,584 S 15,569 S 13,616 S 19,598 S 18,582 S 166,365 Succeeding year property taxes 29,805 9,652 - - 12,313 Liabilities, Deferred Inflows of Resources 52,035 Notes 1,340 - 15,284 - 233 and Fund Balances 16,857 Grants 82 - - 1,242 - Liabilities: Accounts payable S 1,328 S 11 $ 1 $ 30 $ S 429 S 1,799 Contracts payable - - - 3,622 1,846 5,468 Accrued liabilities 887 1 7 15 78 988 Advances from other funds - - - - 2,370 2,370 Due to other governments 312 1 323 636 Interest payable 37 - - - 37 Notes payable 2,004 - 2,004 Liabilities payable from restricted assets: Deposits 1,072 1 5 1,078 Advances from grantors 27 - - - 42 69 Total liabilities 5,667 12 8 3,669 5,093 14,449 Deferred inflows of resources Unavailable revenues: Succeeding year property taxes 29,805 9,652 - - 12,313 265 52,035 Notes 1,340 - 15,284 - 233 - 16,857 Grants 82 - - 1,242 - 2,617 3,941 Other 1,393 327 - 190 - 147 2,057 Total deferred inflows ofresources 32,620 9,979 15,284 1,432 12,546 3,029 74,890 Fund balances: Nonspendable 69 - - - - - 69 Restricted 25,291 1,593 277 8,515 7,052 10,460 53,188 Assigned 4,483 - - - - - 4,483 Unassigned 19,286 - - - - - 19,286 Total fund balances 49,129 1,593 277 8,515 7,052 10,460 77,026 Total liabilities, deferred inflows of resources and fund balances S 87,416 S 11,584 S 15,569 S 13,616 S 19,598 S 18,582 S 166,365 The notes to the financial statements are an integral part of this statement 36 CITY OF IOWA CITY RECONCILIATION OF THE BALANCE SHEET OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION June 30, 2015 (amounts expressed in thousands) Total governmental fund balances $ 77,026 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: Notes, 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 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 obligations 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. 37 33,797 11,433 190,682 $ 6,571 (10,406) (3,835) (23,588) (1,976) (2,854) (62,040) (211) (131) (12,607) $ 205,696 CITY OF IOWA CITY, IOWA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended June 30, 2015 (amounts expressed in thousands) 38 Capital Special Revenue Projects Bridge, Community Street, and Development Traffic Other Employee Block Control Debt Governmental General Benefits Grant Construction Service Funds Total Revenues Taxes S 31,909 S 9,232 S S S 12,952 S 921 S 55,014 Licenses and permits 1,806 - - - 1,806 Intergovernmental 3,487 183 551 2,144 255 14,466 21,086 Charges for services 1,460 315 - 50 191 188 2,204 Use of money and property 845 - 27 47 73 88 1,080 Miscellaneous 5,835 52 641 139 122 256 7,045 Total revenues 45,342 9,782 1,219 2,380 13,593 15,919 88,235 Expenditures Current: Public safety 21,087 598 - - - 311 21,996 Public works 1,624 - 4,505 5,942 12,071 Culture and recreation 11,698 - - 123 11,821 Community and economic development 3,187 - 924 - 1,600 5,711 General government 7,093 378 - 18 119 7,608 Debt service: Principal - - 12,564 - 12,564 Interest - - 1,669 - 1,669 Capital outlay 3,333 - - 6,480 - 4,949 14,762 Total expenditures 48,022 976 924 10,985 14,251 13,044 88,202 Excess (deficiency) of revenues over (under) expenditures (2,680) 8,806 295 (8,605) (658) 2,875 33 Other Financing Sources (Uses) Issuance of debt - - - 4,646 18 3,121 7,785 Sale of capital assets 164 - - I 165 Premiums on issuance of bonds - 119 - 80 199 Transfers in 8,780 - 2,345 820 1,144 13,089 Transfers out (5,044) (8,926) (9) (1,128) - (8,323) (23,430) Total other financing sources and (uses) 3,900 (8,926) (9) 5,982 838 (3,977) (2,192) Net change in fund balances 1,220 (120) 286 (2,623) 180 (1,102) (2,159) Fund Balances, Beginning 47,909 1,713 (9) 11,138 6,872 11,562 79,185 Fund Balances, Ending S 49,129 S 1,593 S 277 S 8,515 S 7,052 S 10,460 S 77,026 The notes to the financial statements are an integral part of this statement. 38 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, 2015 (amounts expressed in thousands) Net change in fund balances - total governmental funds $ (2,159) 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 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 (7,785) Premium on bonds issued (199) Repayments of debt 12,564 Amortization of premium 129 4,709 Because some revenues will not be collected for several months after the City's year end, they are not considered available revenues in the governmental funds. 1,539 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 16 Pension expense 2,450 Change in accrued post employment benefit obligations (268) Change in accrued interest on debt 23 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. (30) Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities. 2,030 Change in net position of governmental activities $ 18,603 The notes to the financial statements are an integral part of this statement. 39 C CA 40 E'.� M N N o0 l� N V1 r N 7 cn N vt N � EA EA ti 7 ' ' M O O O vt —' C vt ,-. M O vt o0 vt N r u 7 s, E-� EA EA C'F.. C Vt � N Vt N N Vt M oo M o0 UJ G � �- 3 zx d d o o G x N M C N O V z � 71� :d o0 O C) 7 �° 7 N O m W W —' N N b s, pq o0 M C M ,M. Vt 00 u. V N Vt N u. V M C CA 40 c7 ¢ Y 3 V O V W V M E� r. V '• ' 00 E� S2 7 r M lzi. Co, � !l!� O - ,p ,O M O, N N ,O N C C ,o v - ' ' N N a` 00 vt ,O N C M N N oo O o, N �/1 EP N O ,O C ,O 00 O M N � ti b CA ,o O N o n E p 0 o w^ d o E N M M V CN C, C) V1 V1 M l� D1 O M N � ti b CA E b E p 0 o w^ d o E 7 C 7 7 7 W 00 O U _ :El b:d ^, 'D T b F �f-•' G Qj E b ty �. 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N 00 d`. f� 7 �O M M 00 d`. h � n� lw C- EP 69 OA G C � w 'U :d lw 'n C tl0 .� y •� c c ❑ n .a °c .b � b " ° a b � � � � � �, b � 0 0 0 �, o �� � c❑ ° b b� ca � A R N A R u Z L r 44 G _ vi M 00 a, N cel t� m 00 • -o vNi oo vi oa o0 00 0 0000 U d s9 s9 s9 c� N a o, 00 0, a 00 10 00 •� �O M N M �O N M 00 00 Vl 00 01 M �O 01 •--' �"� �"� h N r0 M h N 00 M V V N N N rr cq 69 69 69 U w o v o N M N rn N o o 0 h � N M C H -i d 69 69 69 W U m C v o0 01 v cq Cd o N �� 00 r o M N Nc0 o N xx �a N NN w o a N 00 o r c o ci 0 bb 00 v a � o Y tD Q sJ. rUj U U per' � W w O •--• ,� U � O N T O W F � � v' V O O C O ❑ � � b N V � O T Or �� � .. Y U c 3 7o o U o a_ 0 3 � o � ❑ v a .� > � � o o .a v o � ,� � o � v °�cGdQ�dd W Q�QZQQOa� o QU 4,5 zw� z 45 CITY OF IOWA CITY STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES June 30, 2015 (amounts expressed in thousands) Assets Equity in pooled cash and investments Total assets Liabilities Accounts payable Due to agency Total liabilities Agency Funds 151 151 146 $ 151 The notes to the financial statements are an integral part of this statement. 46 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS June 30, 2015 1. Accounting Policies The City of Iowa City, Iowa, (the City) was incorporated April 6, 1853, and operates under the Council/Manager form of government. The City provides a broad range of services to its citizens including general government, public safety, streets, parks, and cultural facilities. It also operates an airport, a mass transportation system, parking facilities, water treatment, wastewater treatment, storm water collection, sanitation collection and disposal (including landfill operations), cable television, and a housing authority. The financial statements of the City have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant accounting policies of the City are described below. The Reporting Entity For financial reporting purposes, the City includes all of its funds, organizations, agencies, boards, commissions, and authorities. The City has also considered all potential component units for which it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete. The Governmental Accounting Standards Board has set forth criteria to be considered in determining financial accountability. These criteria include appointing a voting majority of an organization's governing body, and (1) the ability of the City to impose its will on that organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial burdens on the City. There were no component units required to be included. Government -Wide and Fund Financial Statements The government -wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the non -fiduciary activities of the primary government. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported as general revenues. As a general rule, the effect of inter -fund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between the City's water and sewer function and various other functions of the government. Eliminations of these charges would distort the direct costs and program revenues reported for the various functions concerned. 47 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Description of Funds These financial statements include all funds owned or administered by the City or for which the City acts as custodian. The accounts of the City are organized on the basis of funds, each of which is considered to be a separate accounting entity. The fund categories are governmental, proprietary, and fiduciary. Each fund is accounted for by providing a separate set of self -balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position, revenues, and expenditures or expenses, as appropriate. The individual funds account for the governmental resources allocated to them for the purpose of carrying on specific activities in accordance with laws, regulations, or other restrictions. Basis of Accounting The accounting and financial reporting treatment applied to a fund is determined by its "measurement focus." The government -wide financial statements and proprietary funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Agency funds do not have a measurement focus and use the accrual basis of accounting. Under the accrual method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. All governmental funds are accounted for using a current financial resources measurement focus, which generally includes only current assets and current liabilities on the balance sheet. The modified accrual basis of accounting is used for these funds. Under the modified accrual basis, revenue is recognized when susceptible to accrual, which is in the period in which it becomes both available (collectible within the current period or soon thereafter to be used to pay liabilities of the current period) and measurable (the amount of the transaction can be determined). Revenue accrued includes property taxes, intergovernmental revenue, and interest earned on investments (if they are collected within 60 days after the year-end). Expenditures are recorded when the related fund liability is incurred. Principal and interest on long-term debt, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. The City reports the following major governmental funds: The General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Employee Benefits Fund is used to account for the employee benefits related to those employees who are paid through governmental fund types, which are funded by a separate property tax levy. The Community Development Block Grant Fund accounts for revenue from the U.S. Department of Housing and Urban Development's Community Development Block Grant programs. 48 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 The Bridge, Street, and Traff c 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 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 Transit Fund is used to account for the operation and maintenance of the public transportation system. Additionally, the City reports internal service funds to account for goods and services provided by one department to other City departments on a cost reimbursement basis. The funds in this category are the Equipment Maintenance Fund, Central Services Fund, Loss Reserve Fund, and the Information Technology Fund. The City also reports fiduciary funds which are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City has one fiduciary fund which is maintained as an agency fund, with no attempt to create an ongoing fund balance. The fund in this category is Project Green, which accounts for donations that are received to plant and develop yards and lawns, both public and private, within Iowa City. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise funds and of the City's internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. 49 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 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 landfill closure and post -closure care costs, total capacity of the landfill at closure, and calculation of the costs of claims incurred, but not reported. Cash and Investments The City maintains one primary demand deposit account through which the majority of its cash resources are processed. Substantially all investment activity is carried on by the City in an investment pool, except for those funds required to maintain their investments separately. The earnings on the pooled investments are allocated to the funds on a systematic basis. All investments are stated at fair value except for the Iowa Public Agency Investment Trust (IPAIT) which is valued at amortized cost pursuant to Rule 2a-7 under the Investment Company Act of 1940. For the purpose of the Statement of Cash Flows, restricted and non -restricted investments with a maturity of three months or less when purchased are considered cash equivalents. Receivables and Revenue Recognition Property tax receivable is recognized in governmental funds on the levy or lien date, which is the date that the tax asking is certified by the City to the County Board of Supervisors. Current year delinquent property tax receivable represents unpaid taxes from the current year. The succeeding year property tax receivable represents taxes certified by the City to be collected in the next fiscal year for the purposes set out in the budget for the next fiscal year. By statute, the City is required to certify its budget to the County Auditor by March 15 of each year for the subsequent fiscal year. However, by statute, the tax asking and budget certification for the following fiscal year becomes effective on the first day of that year. Although the succeeding year property tax receivable has been recorded, it will not be recognized as revenue until the year for which it is levied. Federal and state grants are recorded as receivables and the revenue is recognized during the period in which the City fulfills the requirements for receiving the grant awards, as long as the susceptible to accrual criteria are met. Income from investments in all fund types and from charges for services in proprietary fund types is recognized when earned. Licenses and permits, fines and forfeitures, fees and refunds, charges for services (in governmental fund types), miscellaneous, and other revenues are recorded as revenue when received in cash because they are generally not measurable until actually received. 50 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 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 fair value at the date of donation when received as donated properties. Depreciation is computed using the straight-line method over the following estimated useful lives: Infrastructure 3 — 100 years Buildings and structures 20 — 50 years Improvements other than buildings 10 — 50 years Vehicles 2 20 years Other equipment 3 — 30 years Deferred Outflows of Resources Deferred outflows of resources represent a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (expense/expenditure) until then. Deferred outflows of resources consist of unrecognized items not yet charged to pension expense and contributions from the employer after the measurement date but before the end of the employer's reporting period. Bond Premiums and Discounts Debt issued at a premium or discount is recorded net of the unamortized premium or discount. In the governmental funds, premiums and discounts are recorded entirely as other financing sources or uses in the year of issuance. In the proprietary funds and the government -wide statements, they are amortized over the life of the bonds. 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. 51 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 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 7). Deferred Inflows of Resources Deferred inflows of resources represent an acquisition of net position that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. Although certain revenues are measureable, they are not available. Available means collected within the current year or expected to be collected soon enough thereafter to be used to pay liabilities of the current year. Deferred inflows of resources in the governmental fund financial statements represent the amount of assets that have been recognized, but the related revenue has not been recognized since the assets are not collected within the current year or expected to be collected soon enough thereafter to be used to pay liabilities of the current year. Deferred inflows of resources consist of property tax receivable, notes 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, notes receivable that will not be recognized as revenue until the year for which the payment is received and the unamortized portion of pension related items. 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 52 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 b. The amount to be raised by property taxation c. Income from sources other than property taxation d. Transfers in and transfers out The legal level of control (the level at which expenditures may not legally exceed appropriations) is the function level for all funds combined, rather than at the individual fund level. Management can transfer appropriations within a function, within a fund type, and between fund types, without the approval of the governing body so long as the total budget by function area will not be exceeded. It is necessary, therefore, to aggregate the expenditures of the budgeted activities within the governmental fund types with the expenditures of the budgeted activities within the enterprise funds on a function basis, and to compare such function totals to function budgeted totals in order to demonstrate legal compliance with the budget. The City's budget for revenue focuses on the individual fund revenue rather than on aggregated fund totals. The City formally adopts budgets for several funds that are not required by state law to be included in the annual function budget. Annual operating budgets are adopted for the internal service funds for management control purposes. Such budgets, however, are not legally required to be adopted under state statutes. A City budget for the current fiscal year may be amended for any of the following purposes as prescribed by Iowa statute: a. To permit the appropriation and expenditure of unexpended, unencumbered cash balances on hand at the end of the preceding fiscal year. b. To permit the appropriation and expenditure of amounts anticipated being available from sources other than property taxation. c. To permit transfers between funds. d. To permit transfers between programs. A budget amendment must be prepared and adopted in the same manner as the original budget. The City's budget was amended as prescribed, and the effects of those amendments are shown in the accompanying budgetary comparison schedule. The original budget was increased by $19,065,850 in revenues and other financing sources and by $38,567,410 in expenditures and other financing uses. Appropriations, as adopted or amended, lapse at the end of the fiscal year. As allowed by GASB Statement No. 41, Budgetary Comparison Schedules — Perspective Differences, the City presents budgetary comparison schedules as required supplementary information based on the program structure of nine functional areas as required by state statute for its legally adopted budget. Restricted Assets Assets within the individual funds, which can be designated by the City Council for any use within the fund's purpose, are considered to be unrestricted assets. Assets, which are restricted for specific uses by bonded debt requirements, grant provisions, or other requirements, are classified as restricted assets. Liabilities, which are payable from restricted assets, are classified as such. 53 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 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 9). Implementation of GASB Statement No. 68 and GASB Statement No. 71 As of June 30, 2015, the City adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions and GASB Statement No. 71 Pension Transition for Contributions Made Subsequent to the Measurement Date. The implementation of these standards requires governments calculate and report the costs and obligations associated with pensions in their basic financial statements. Employers are required to recognize pension amounts for all benefits provided through the plan which include the net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense. The effect of the implementation of these standards on beginning net position is disclosed in Note 14 and the additional disclosures required by these standards are included in Note 6. 2. Cash and Pooled Investments The City's deposits in banks at June 30, 2015 were entirely covered by federal depository insurance, national credit union administration, or by the State Sinking Fund in accordance with Chapter 12C of the Code of Iowa. This chapter provides for additional assessments against the depositories to insure there will be no loss of public funds. The City is authorized by statute to invest public funds in obligations of the United States government, its agencies and instrumentalities; certificates of deposit or other evidences of deposit at federally insured Iowa depository institutions approved by City Council and secured pursuant to the limitations set forth in Chapter 12C of the Code of Iowa; prime eligible bankers acceptances; certain high rated commercial paper; perfected repurchase agreements; Iowa Public Agency Investment Trust (IPAIT); certain registered open—end management investment companies registered with the Securities & Exchange Commission under the federal Investment Company Act of 1940; certain joint investment trusts; and warrants or improvement certificates of a drainage district. Investments are stated at fair value. In addition, the City had investments in the Iowa Public Agency Investment Trust, which are valued at an amortized cost of $1,500,000 pursuant to Rule 2a-7 under the Investment Company Act of 1940. At June 30, 2015 the City had the following investments: Type U S Agencies Fair Value Maturities $6,510,646 From December 2015 to August 2017 Interest rate risk. The City's investment policy limits the investment of general and operating funds to one year, unless a temporary extension of maturities is approved by the City Council. In such cases, the average maturity of each fund's portfolio shall not exceed 397 days. Funds not identified as operating funds may be invested in instruments whose maturities do not exceed five years at the time of purchase. 54 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Credit risk. State law limits investments to commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations. It is the City's policy to comply with rating restrictions. The investment in Iowa Public Agency Investment Trust is not rated by Moody's Investors service as it is a state security that is backed by the full faith and credit of the issuing government and is not subject to credit risk. Concentration of credit risk. The City investment policy limits the amount that may be invested in any one issuer to a maximum amount approved by the City Council. The aforementioned Iowa Public Agency Investment Trust (IPAIT) represents an investment in a pool managed by others. IPAIT is a common trust established under Iowa law pursuant to Iowa Code Chapter 28E in 1987 to enable eligible Iowa public agencies to safely and effectively invest their available operating and reserve funds. IPAIT is registered under the Investment Company Act of 1940. The IPAIT portfolios have followed established money market mutual fund investment parameters designed to maintain a $1 per unit net asset value since inception and were registered with the Securities and Exchange Commission (SEC). Due to legal and budgetary reasons, the General Fund is assigned a portion of the investment earnings associated with other funds. These funds are the employee benefits, other shared revenue, and sanitation funds. 3. Interfund Balances and Transfers Interfund balances for the year ended June 30, 2015, consisted of the following: Advances from Community Development Debt General Block Grant Service Sanitation Total Advances to: Nonmajor Governmental $ 2,219,085 $ - $ 150,576 $ - $ 2,369,661 Parking - - - 2,350,969 2,350,969 Housing Authority - 18,000 - - 18,000 Transit - - - 29,651 29,651 Nonmajor Enterprise 462,437 - - - 462,437 Total $ 2,681,522 $ 18,000 $ 150,576 $ 2,380,620 $ 5,230,718 Interfund balances at June 30, 2015, include advances due to/from other funds, which represent amounts for construction loans, revenue bond redemption loan and negative cash balance funding. $2,231,844 of the $2,369,661 advance to the Nonmajor Governmental Funds is expected to be repaid within the next year. $2,129,525 of the $2,350,969 advance to the Parking Fund is not expected to be repaid within the next year. None of the $18,000 advance to Housing Authority is expected to be repaid within the next year. The $29,651 advance to the Transit Fund is expected to be repaid within the next year. The $462,437 advance to the Nonmajor Enterprise Fund is expected to be repaid within the next year. 55 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Interfund transfers for the year ended June 30, 2015, consisted of the following: Transfer to: General Debt Service Capital Projects Bridge, Street and Traffic Control Construction Nonmajor Governmental Wastewater Treatment Water Sanitation Stormwater Housing Authority Transit Nonmajor Enterprise Internal Service Total Transfer to Employee General Benefits Transfer from Capital Projects Bridge, Street Community and Traffic Development Control Nonmajor Block Grant Construction Governmental Parking $ - S 8,536,094 S $ - $ 124,064 S - 195,537 - - 624,185 - 1,362,821 - - 981,759 - 361,417 390,414 5 242,531 - - - 239,181 - - 312,154 35,741 - - 460,094 6,085,990 - - 8,760 - - - 2,972,534 - - - 95 68,415 - - - 82,963 116,616 228,277 - $ 5,043,687 S 8,926,508 S 8,760 $ 1,128,050 $ 8,322,547 S 95 (continued) Transfers are used to move revenues and bond proceeds from the fund that State statutes or the budget requires to collect them to the fund that the State statutes or the budget requires to expend them. In the fund financial statements, total transfers in and transfers out of $24,591,695 are less than total transfers of $25,470,355 because of the treatment of transfers of capital assets from the governmental activities capital assets. 56 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Transfer from Wastewater Housing Nonmajor Total Treatment Water Sanitation Stormwater Authority Enterprise Transfer from $ - $ - $ - $ - $ 64,737 $ 55,000 $ 8,779,895 - - - - - 819,722 2,344,580 - 100,000 50,000 - - 1,144,367 - - - - - 239,181 - - - - - 347,895 691,228 - - - - 691,228 - - - - - 6,546,084 - - - - - 8,760 - - - - - - 2,972,629 - - - - - - 68,415 189,624 - 11,459 - - - 628,939 $ 189,624 $ 691,228 $ 111,459 $ 50,000 $ 64,737 $ 55,000 24,591,695 Transfers from governmental activities capital assets to an internal service fund 878,660 $ 25,470,355 During the year, capital assets related to public safety with a value of $878,660 were transferred to Equipment from governmental activities capital assets. No amounts were reported in the governmental funds, as the amounts did not involve the transfer of financial resources. However, Equipment did report a capital contribution for the capital resources received. 57 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 4. Capital Assets Capital asset activity for the year ended June 30, 2015, was as follows: Acquisitions Disposals Beginning and and Balance July 1, 2014 Transfers Transfers June 30, 2015 Governmental activities: Capital assets, not being depreciated: Land $ 23,102,741 $ 367,471 $ - $ 23,470,212 Construction in progress 15,109,110 13,995,250 4,542,190 24,562,170 Total capital assets, not being depreciated 38,211,851 14,362,721 4,542,190 48,032,382 Capital assets, being depreciated: Buildings 59,128,139 669,139 - 59,797,278 Improvements other than buildings 6,623,274 102,074 - 6,725,348 Machinery and equipment 40,434,485 4,119,673 3,874,980 40,679,178 Infrastructure 126,815,408 5,050,976 - 131,866,384 Total capital assets being depreciated 233,001,306 9,941,862 3,874,980 239,068,188 Less accumulated depreciation for: Buildings 20,044,956 1,514,472 - 21,559,428 Improvements other than buildings 2,739,449 248,460 - 2,987,909 Machinery and equipment 26,560,720 3,083,356 3,818,232 25,825,844 Infrastructure 34,214,009 2,860,514 - 37,074,523 Total accumulated depreciation 83,559,134 7,706,802 3,818,232 87,447,704 Total capital assets, being depreciated, net 149,442,172 2,235,060 56,748 151,620,484 Governmental activities capital assets, net $ 187,654,023 $ 16,597,781 $ 4,598,938 $ 199,652,866 58 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Acquisitions Disposals Beginning and and Balance July 1, 2014 Transfers Transfers June 30, 2015 Business -type activities: Capital assets, not being depreciated: Land $ 33,497,080 $ 352,190 $ 59,388 $ 33,789,882 Construction in progress 7,438,279 11,313,127 7,362,426 11,388,980 Total capital assets, not being depreciated 40,935,359 11,665,317 7,421,814 45,178,862 Capital assets, being depreciated: Buildings 119,258,446 - - 119,258,446 Improvements other than buildings 10,552,725 - - 10,552,725 Machinery and equipment 30,362,587 414,820 61,408 30,715,999 Infrastructure 275,756,870 9,570,237 104,768 285,222,339 Total capital assets being depreciated 435,930,628 9,985,057 166,176 445,749,509 Less accumulated depreciation for Buildings 52,164,511 3,043,417 - 55,207,928 Improvements other than buildings 5,183,111 443,752 - 5,626,863 Machinery and equipment 19,754,750 1,444,893 61,408 21,138,235 Infrastructure 76,581,690 7,030,154 87,277 83,524,567 Total accumulated depreciation 153,684,062 11,962,216 148,685 165,497,593 Total capital assets, being depreciated, net 282,246,566 (1,977,159) 17,491 280,251,916 Business -type activities capital assets, net $ 323,181,925 $ 9,688,158 $ 7,439,305 $ 325,430,778 Depreciation expense was charged to functions as follows Governmental activities: Public safety $ 1,482,781 Public works 3,203,851 Culture and recreation 2,614,107 Community and economic development 62,822 General government 343,241 Total depreciation expense - governmental activities $ 7,706,802 Business -type activities: Parking $ 797,770 Transit 984,735 Wastewater treatment 4,497,533 Water 2,249,938 Sanitation 1,376,941 Stormwater 920,063 Housing authority 126,027 Nonmajor enterprise 1,009,209 Total depreciation expense - business -type activities $ 11,962,216 59 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 5. Long Term Debt Changes in Debt for Bonds Bond debt activity for the year ended June 30, 2015, was as follows: July 1, 2014 Governmental activities: Issues Retirements June 30, 2015 Due Within General obligation bonds $ 63,530,000 $ 7,785,000 $ 12,565,000 $ 58,750,000 $ 11,005,000 Plus: Unamortized Premium 602,510 199,367 130,674 671,203 122,616 Total general obligation bonds 64,132,510 7,984,367 12,695,674 59,421,203 11,127,616 Revenue bonds 2,655,000 - - 2,655,000 130,000 Less: Unamortized Discounts 38,232 - 2,124 36,108 2,124 Total revenue bonds 2,616,768 - (2,124) 2,618,892 127,876 $ 66,749,278 $ 7,984,367 $ 12,693,550 $ 62,040,095 $ 11,255,492 Business -type activities: General obligation bonds $ 890,000 $ - $ 300,000 $ 590,000 $ 295,000 Less: Unamortized Discounts 3,843 - 3,843 - - Total general obligation bonds 886,157 - 296,157 590,000 295,000 Revenue bonds 56,845,000 - 11,895,000 44,950,000 4,940,000 Plus: Unamortized Premium 723,517 - 106,614 616,903 79,135 Total revenue bonds 57,568,517 - 12,001,614 45,566,903 5,019,135 $ 58,454,674 $ - $ 12,297,771 $ 46,156,903 $ 5,314,135 General Obligation Bonds Various issues of general obligation bonds totaling $59,340,000 are outstanding as of June 30, 2015. The bonds have interest rates ranging from 1.0% to 5.6% and mature in varying annual amounts ranging from $6,000 to $2,185,000 per issue, with the final maturities due in the year ending June 30, 2025. Interest and principal payments on all general obligation bonds, except tax abated portions recorded in the enterprise funds, are accounted for through the Debt Service Fund. Portions of several general obligation bond issues have been used to acquire or expand the enterprise fund facilities. In some instances, revenue generated by the enterprise funds is used to pay the general long- term debt principal and interest. The liability for those bonds that are expected to be paid by enterprise funds is included in those funds. 60 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Annual debt service requirements to maturity for general obligation bonds are as follows: Fiscal Year Ending June 30 Governmental Activities Principal Interest Business -t, Principal Activities Interest 2016 $ 11,005,000 $ 1,539,755 $ 295,000 $ 11,800 2017 10,305,000 1,222,600 295,000 5,900 2018 9,535,000 965,756 - - 2019 7,090,000 699,681 - - 2020 6,500,000 508,694 - - 2021-2025 14,315,000 724,779 - - Total $ 58,750,000 $ 5,661,265 $ 590,000 $ 17,700 Revenue Bonds As of June 30, 2015, the following unmatured revenue bond issues are outstanding: Original issue amount Interest rates Annual maturities Amount outstanding Wastewater Taxable Urban Treatment Water Renewal $ 48,020,000 3.0% to 5.0% $ 485,000 to $ 2,205,000 $ 28,585,000 $ 21,815,000 1.5% to 4.5% $ 410,000 to $ 835,000 $ 16,365,000 $ 2,655,000 1.0% to 3.9% $ 130,000 to $ 200,000 $ 2,655,000 The City of Iowa City defeased the remaining $6,605,000 its 2009 Parking Revenue Bonds on November 12, 2014 by prepaying all remaining outstanding bonds and interest from cash on hand. The total defeased outstanding as of June 30, 2015 is $6,605,000. The total amount of interest that was paid was $574,186. Liabilities for the defeased bonds are not included in the City's financial statements. 61 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Revenue bond debt service requirements to maturity are as follows: Fiscal Year Ending June 30 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 Total Governmental Activities Principal $ 130,000 130,000 135,000 135,000 140,000 740,000 855,000 390,000 Interest $ 75,335 74,035 72,345 70,185 67,485 287,405 169,450 22,725 Business -t) Principal $ 4,940,000 5,090,000 5,295,000 5,480,000 5,710,000 16,825,000 1,610,000 Activities Interest $ 1,742,334 1,557,521 1,362,478 1,157,915 931,565 1,865,494 38,162 $ 2,655,000 $ 838,965 $ 44,950,000 $ 8,655,469 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 (a) Revenue Bond and Interest Sinking Reserve (b) Revenue Debt Service Reserve Amount sufficient to pay current bond and interest maturities. Amount required to be deposited in the Revenue Bond and Interest Reserve until the reserve fund equals: Water Revenue and Taxable Urban Renewal Revenue bonds — maximum debt service due on the bonds in any succeeding fiscal year. Wastewater Revenue bonds — 125% of the average principal and interest payments over the life of all the Wastewater Revenue bonds. (c) Improvement Reserve $20,000 per month until the reserve balance equals or exceeds $2,000,000 for Wastewater Revenue bonds and $5,000 per month until the reserve balance equals or exceeds $450,000 for Water Revenue bonds, with no further deposits once the minimum balance is reached. If the reserve falls below the required minimum, monthly transfers in the aforementioned amounts will resume. 62 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Summary of Bond Issues General obligation and revenue bonds payable at June 30, 2015, are comprised of the following issues: $ 106,945,000 63 Date of Amount Interest Final Outstanding Issue Issued Rates Maturity June 30, 2015 General Obligation Bonds: Multi -Purpose June 2008 9,150,000 3.25 - 3.75 6/18 $ 3,085,000 Refunded Multi -Purpose (1) Oct. 2008 17,005,000 3.0- 3.75 6/18 4,530,000 Multi -Purpose June 2009 6,685,000 2.5-4.0 6/19 2,900,000 Refunded Multi -Purpose (2) June 2009 5,840,000 2.0-4.0 6/16 915,000 Multi -Purpose Aug. 2010 7,420,000 2.0-2.75 6/20 3,840,000 Multi -Purpose June 2011 7,925,000 2.0- 3.625 6/21 4,785,000 Refunded Multi -Purpose and Library Construction (3) June 2011 10,930,000 2.0- 3.625 6/21 7,385,000 Muhl -Purpose June 2012 9,070,000 2.0-2.25 6/22 6,565,000 Multi -Purpose July 2013 7,230,000 1.0-2.0 6/23 6,505,000 Refunded Multi -Purpose (4) June 2014 11,980,000 2.0- 3.0 6/24 11,045,000 Multi -Purpose June 2015 7,785,000 2.0-2.25 6/25 7,785,000 Total General Obligation Bonds $ 59,340,000 Date of Amount Interest Final Outstanding Issue Issued Rates Maturity June 30, 2015 Revenue Bonds: Refunded Wastewater Treatment Bonds (5) Oct. 2008 24,280,000 3.0-5.0 7/22 $ 14,345,000 Refunded Wastewater Treatment Bonds (6) May 2009 8,660,000 3.5 - 5.0 7/25 6,760,000 Refunded Wastewater Treatment Bonds (7) Apr. 2010 15,080,000 3.0-4.0 7/20 7,480,000 Refunded Water Bonds (8) Oct. 2008 7,115,000 3.0-4.375 7/24 4,920,000 Refunded Water Bonds (9) May 2009 9,750,000 4.0-4.5 7/25 7,410,000 Refunded Water Bonds (10) June 2012 4,950,000 1.5 -2.1 7/22 4,035,000 Taxable Urban Renewal Nov. 2012 2,655,000 1.0- 3.9 6/32 2,655,000 Total Revenue Bonds 47,605,000 $ 106,945,000 63 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 (1) This bond issue refunded the April 1998, March 1999, and July 2000 General Obligation Bonds. (2) This bond issue refunded the June 2001 General Obligation Bonds. (3) This bond issue refunded the May 2002 General Obligation Bonds. (4) This bond issue is an advance refunding of portions of the September 2006 and May 2007 General Obligation Bonds. (5) This bond issue refunded the March 1996, May 1997, and January 1999 Wastewater Revenue Bonds. (6) This bond issue refunded the October 2000 Wastewater Revenue Bonds. (7) This bond issue refunded the December 2001 and April 2002 Wastewater Revenue Bonds. (8) This bond issue refunded the May 1999 Water Revenue Bonds. (9) This bond issue refunded the December 2000 Water Revenue Bonds. (10) This bond issue refunded the October 2002 Water Revenue Bonds. Conduit Debt Obligations From time to time, the City has issued Industrial Development Revenue Bonds, Facility Refunding 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, 2015, there were four series of Industrial Development Revenue Bonds, Facility Refunding Revenue Bonds, and Midwest Disaster Area Revenue Bonds outstanding, with an aggregate principal amount payable of $39,219,631. Debt Legal Compliance Legal Debt Margin: As of June 30, 2015, the general obligation debt issued by the City did not exceed its legal debt limit computed as follows (amounts expressed in thousands): Assessed valuation: Real property $ 4,748,004 Utilities 78,643 Total valuation $ 4,826,647 Debt limit, 5% of total assessed valuation $ 241,332 Debt applicable to debt limit: General obligation bonds 59,340 Urban renewal revenue bonds 2,655 Letters of credit 2,005 Other legal indebtedness (TIF rebates) 13,506 Total net debt applicable to limit 77,506 Legal debt margin $ 163,826 64 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 6. Pension and Retirement Systems Municipal Fire and Police Retirement System of Iowa (MFPRSI) Plan Description MFPRSI membership is mandatory for fire fighters and police officers covered by the provisions of Chapter 411 of the Code of Iowa. Employees of the City are provided with pensions through a cost- sharing multiple employer defined benefit pension plan administered by MFPRSI. MFPRSI issues a stand-alone financial report which is available to the public by mail at 7155 Lake Drive, Suite #201, West Des Moines, Iowa 50266 or at ww,yjn ;hrsi„org. MFPRSI benefits are established under Chapter 411 of the Code of Iowa and the administrative rules thereunder. Chapter 411 of the Code of Iowa and the administrative rules are the official plan documents. The following brief description is provided for general informational purposes only. Refer to the plan documents for more information. Pension Benefits Members with 4 or more years of service are entitled to pension benefits beginning at age 55. Full service retirement benefits are granted to members with 22 years of service, while partial benefits are available to those members with 4 to 22 years of service based on the ratio of years completed to years required (i.e., 22 years). Members with less than 4 years of service are entitled to a refund of their contribution only, with interest, for the period of employment. Benefits are calculated based upon the member's highest 3 years of compensation. The average of these 3 years becomes the member's average final compensation. The base benefit is 66 percent of the member's average final compensation. Additional benefits are available to members who perform more than 22 years of service (2 percent for each additional year of service, up to a maximum of 8 years). Survivor benefits are available to the beneficiary of a retired member according to the provisions of the benefit option chosen plus an additional benefit for each child. Survivor benefits are subject to a minimum benefit for those members who chose the basic benefit with a 50 percent surviving spouse benefit. Active members, at least 55 years of age, with 22 or more years of service have the option to participate in the Deferred Retirement Option Program (DROP). The DROP is an arrangement whereby a member who is otherwise eligible to retire and commence benefits opts to continue to work. A member can elect a 3, 4, or 5 year DROP period. By electing to participate in DROP the member is signing a contract indicating the member will retire at the end of the selected DROP period. During the DROP period the member's retirement benefit is frozen and a DROP benefit is credited to a DROP account established for the member. Assuming the member completes the DROP period, the DROP benefit is equal to 52% of the member's retirement benefit at the member's earliest date eligible and 100% if the member delays enrollment for 24 months. At the member's actual date of retirement, the member's DROP account will be distributed to the member in the form of a lump sum or rollover to an eligible plan. Disability and Death Benefits Disability coverage is broken down into two types, accidental and ordinary. Accidental disability is defined as permanent disability incurred in the line of duty, with benefits equivalent to the greater of 60 percent of the member's average final compensation or the member's service retirement benefit calculation amount. Ordinary disability occurs outside the call of duty and pays benefits equivalent to the greater of 50 percent of the member's average final compensation, for those with 5 or more years of service, or the member's service retirement benefit calculation amount, and 25 percent of average final compensation for those with less than 5 years of service. 65 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 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 (escalated) 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. C'.nntrihutinns Member contribution rates are set by state statute. In accordance with Chapter 411 of the Code of Iowa as modified by act of the 1994 General Assembly, to establish compliance with the Federal Older Workers Benefit Protections Act, the contribution rate was 9.40% of earnable compensation for the year ended June 30, 2015. 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 30.41% for the year ended June 30, 2015. The City's contributions to MFPRSI for the year ended June 30, 2015 was $2,954,676. 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, 2014. Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2015, the City reported a liability of $13,695,681 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2014, 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, 2014, the City's proportion was 3.778137% which was an increase of. 130838% from its proportions measured as of June 30, 2013. 66 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 For the year ended June 30, 2015, the City recognized pension expense of $1,266,188. At June 30, 2015, 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 Deferred Outflows of Deferred Inflows of Resources Resources $ - $ 38,761 1,012,248 - 6,437,961 595,367 - 2,954,676 - $ 4,562,291 $ 6,476,722 $2,954,676 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, 2016. 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, 2016 $ (1,268,435) June 30, 2017 (1,268,435) June 30, 2018 (1,268,435) June 30, 2019 (1,268,435) June 30, 2020 204,633 $ (4,869,107 67 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Actuarial Assumptions The total pension liability in the June 30, 2014, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Rate of inflation 3.00 percent per annum Salary increases 4.50 to 15.11 percent, including inflation Investment rate of return 7.50 percent, net of pension plan investment expense, including inflation The actuarial assumptions used in the June 30, 2014 valuation were based on the results of an actuarial experience study for the period from July 1, 2002 to June 30, 2012. Mortality rates were based weighting equal to 2/12 of the 1971 GAM table and 10/12 of the 1994 GAM table with no projection of future mortality improvement. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates (i.e., expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The 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 Emerging Markets Debt Domestic Equities Master Limited Partnerships (MLP) International Equities Core Investments Tactical Asset Allocation Private Equity Private Non -Core Real Estate Private Core Real Estate Real Estate Total Target Allocation 7.0% 3.0 12.5 5.0 12.5 40.0% 35.0 15.0 5.0 5.0 10.0 100.0% 68 Long -Term Expected Real Rate of Return 3.8 % 6.5 6.0 8.5 7.0 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Discount Rate The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumed that contributions will be made at 9.40 percent of covered payroll and the City contributions will be made at rates equal to the difference between actuarially determined rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of City's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.5 percent, as well as what the city's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 -percent lower (6.5 percent) or 1 -percent higher (8.5 percent) than the current rate. 1% Decrease Discount Rate 1% Increase (6.5%) (7.5%) (8.5%) City's proportionate share of the net pension liability: $ 26,260,370 $ 13,695,681 $ 3,255,554 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_ ll I- rs----- Payables to the Pension Plan At June 30, 2015, there were no amounts due to MFPRSI. Iowa Public Employees Retirement System (IPERS) Plan Description IPERS membership is mandatory for employees of the City, except for those covered by another retirement system. Employees of the City are provided with pensions through a cost-sharing multiple employer defined benefit pension plan administered by IPERS. IPERS issues a stand-alone financial report which is available to the public by mail at 7401 Register Drive P.O. Box 9117, Des Moines, Iowa 50306-9117 or at wtiy;wj e ,. ,o 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. 69 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Pension Benefits A regular member may retire at normal retirement age and receive monthly benefits without an early- retirement reduction. Normal retirement age is age 65, any time after reaching age 62 with 20 or more years of covered employment, or when the member's years of service plus the member's age at the last birthday equals or exceeds 88, whichever comes first. (These qualifications must be met on the member's first month of entitlement to benefits.) Members cannot begin receiving retirement benefits before age 55. The formula used to calculate a Regular member's monthly IPERS benefit includes: • A multiplier (based on years of service). • The member's highest five-year average salary. (For members with service before June 30, 2012, the highest three-year average salary as of that date will be used if it is greater than the highest five-year average salary.) If a member retires before normal retirement age, the member's monthly retirement benefit will be permanently reduced by an early-retirement reduction. The early-retirement reduction is calculated differently for service earned before and after July 1, 2012. For service earned before July 1, 2012, the reduction is 0.25 percent for each month that the member receives benefits before the member's earliest normal retirement age. For service earned starting July 1, 2012, the reduction is 0.50 percent for each month that the member receives benefits before age 65. Generally, once a member selects a benefit option, a monthly benefit is calculated and remains the same for the rest of the member's lifetime. However, to combat the effects of inflation, retirees who began receiving benefits prior to July 1990 receive a guaranteed dividend with their regular November benefit payments. Disability and Death Benefits A vested member who is awarded federal Social Security disability or Railroad Retirement disability benefits is eligible to claim IPERS benefits regardless of age. Disability benefits are not reduced for early retirement. If a member dies before retirement, the member's beneficiary will receive a lifetime annuity or a lump -sum payment equal to the present actuarial value of the member's accrued benefit or calculated with a set formula, whichever is greater. When a member dies after retirement, death benefits depend on the benefit option the member selected at retirement. Contributions Effective July 1, 2012, as a result of a 2010 law change, the contribution rates are established by IPERS following the annual actuarial valuation, which applies IPERS' Contribution Rate Funding Policy and Actuarial Amortization Method. Statute limits the amount rates can increase or decrease each year to 1 percentage point. IPERS Contribution Rate Funding Policy requires that the actuarial contribution rate be determined using the "entry age normal" actuarial cost method and the actuarial assumptions and methods approved by the IPERS Investment Board. The actuarial contribution rate covers normal cost plus the unfunded actuarial liability payment based on a 30 -year amortization period. The payment to amortize the unfunded actuarial liability is determined as a level percentage of payroll, based on the Actuarial Amortization Method adopted by the Investment Board. 70 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 In fiscal year 2015, pursuant to the required rate, Regular members contributed 5.95 percent of pay and the City contributed 8.93 percent for a total rate of 14.88 percent. The City's total contributions to IPERS for the year ended June 30, 2015 were $2,544,577. Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2015, the City reported a liability of $17,366,321 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2014, 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, 2014, the City's proportion was .4378904% which was an increase of .008867% from its proportions measured as of June 30, 2013. For the year ended June 30, 2015, the City recognized pension expense of $1,235,429. At June 30, 2015, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Deferred Inflows of Resources Resources Differences between expected and actual experience $ 188,738 Change of assumptions 766,415 Net difference between projected and actual earnings on pension plan investments - 6,623,015 Changes in proportion and differences between City contributions and proportionate share of contributions - 275,589 City contributions subsequent to the measurement date 2,544,577 - Total l7l $ 3,499,730 $ 6,898,604 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 $2,544,577 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, 2016. 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, 2016 $ (1,496,977) June 30, 2017 (1,496,977) June 30, 2018 (1,496,977) June 30, 2019 (1,496,977) June 30, 2020 44,457 $ (5,943,451) Actuarial Assumptions The total pension liability in the June 30, 2014, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Rate of inflation 3.00 percent per annum (effective June 30, 2014) Salary increases 4.00 to 17.00 percent, average, including inflation. Rates vary by (effective June 30, 2010) membership group. Investment rate of return 7.50 percent, net of pension plan investment (effective June 30, 1996) expense, including inflation The actuarial assumptions used in the June 30, 2014 valuation were based on the results of actuarial experience studies with dates corresponding to those listed above. Mortality rates were based on the RP -2000 Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale AA. 72 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates (i.e., expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset Class US Equity Non US Equity Private Equity Real Estate Core Plus Fixed Income Credit Opportunities TIPS Other Real Assets Cash Total Discount Rate Target Allocation Long -Term Expected Real Rate of Return 23 % 6.31 % 15 6.76 13 11.34 8 3.52 28 2.06 5 3.67 5 1.92 2 6.27 1 -0.69 100% The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumed that contributions will be made at the contractually required rate and that the contributions from the City will be made at contractually required rates, actuarially determined. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long- term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivitv of Citv's ProDortionate Share of the Net Pension Liabilitv to Changes in the Discount Rate The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.5 percent, as well as what the city's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 -percent lower (6.5 percent) or 1 -percent higher (8.5 percent) than the current rate. 1% Decrease Discount Rate 1% Increase (6.5%) (7.5%) (8.5%) City's proportionate share of the net pension liability: $ 32,813,175 $ 17,366,321 $ 4,327,575 73 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 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 v,_W_\N'_ ingES'_0rg. Payables to the Pension Plan At June 30, 2015, there were no amounts due to IPERS. 7. Other Long-term Liabilities Changes in Long -Term Liabilities - Notes Payable Note Payable activity for the year ended June 30, 2015, was as follows: July 1, 2014 Issues Governmental activities: $ 211,000 $ - Due Within Retirements June 30, 2015 One Year $ - $ 211,000 $ A note payable was issued to Greater Iowa City Housing Fellowship for the purchase of an 11 unit apartment building for low income and disabled housing in the Peninsula Neighborhood. The terms of the loan are 1%, interest only payments for twenty years with a final balloon payment of $211,000 due on August 1, 2025. Changes in Long -Term Liabilities - Employee Vested Benefits Employee Vested Benefits activity for the year ended June 30, 2015, was as follows: Due Within July 1, 2014 Issues Retirements June 30, 2015 One Year Governmental activities: $ 2,105,007 $ 1,135,401 $ 1,163,657 $ 2,076,751 $ 1,148,252 Business -type activities: $ 749,095 $ 404,236 $ 431,645 $ 721,686 $ 413,309 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. 74 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Changes in Long -Term Liabilities - Landfill Closure Post -closure Care Costs Landfill Closure Post -closure care activity for the year ended June 30, 2015, was as follows: Due Within July 1, 2014 Issues Retirements June 30, 2015 One Year Business -type activities: $ 7,316,291 $ 256,966 $ - $ 7,573,257 $ - 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, 2015, is $7,573,257, which is based on 48.8% usage (filled) of the landfill and is included in accrued liabilities within the Sanitation Fund. It is estimated that an additional amount of approximately $7,952,075 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, 2025. The estimated total current cost of the landfill closure and post -closure care costs at June 30, 2015, was determined by a licensed professional engineer and approximated at $15,525,332. 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, 2015. 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, 2015, the Sanitation Fund had $12,494,201 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. 75 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Changes in Long -Term Liabilities - Other Postemployment Benefits Governmental activities: Business -type activities: July 1, 2014 2,635,279 $ 979,169 Net OPEB Obligation Current Year 272,087 $ 83,106 June 30, 2015 2,907,366 $ 1,062,275 Plan Description: The City operates one self-funded medical and dental plan for all employees, which is offered to current and retired employees and their dependents. All full-time employees who retire or terminate/resign and their eligible dependents are offered the following post -employment benefit options: Health insurance and dental insurance — The option of continuing with the City's health insurance plan at the individual's expense. These benefits cease upon Medicare eligibility. Life insurance — The option of converting the employee's City -paid policy to an individual policy at the individual's expense with the City's life insurance carrier. Long-term disability — For employees who terminate/resign and have been on the plan for a minimum of one year, the option of converting the employee's City -paid group policy to a personal policy at the individual's expense with the City's long-term disability insurance carrier. The above options, while at the individual's own expense, are included within the City's overall insurance package, which results in an implicit rate subsidy and an OPEB liability. Funding Policy: The plan member's contribution requirements are established and may be amended by the City. The City currently finances the benefit plans on a pay-as-you-go basis. For governmental activities, this liability is expected to be liquidated by the General Fund. Annual OPEB Cost and Net OPEB Obligation: The City's annual OPEB cost is calculated based on the annual required contribution (ARC) of the City, an amount actuarially determined in accordance with GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years. 76 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 The following table shows the components of the City's annual OPEB cost for the year ended June 30, 2015, the amount actually contributed to the plans, and changes in the City's net OPEB obligation: Annual required contribution $ 571,531 Interest on net OPEB obligation 126,506 Adjustment to annual required contribution (124,699) Annual OPEB costs 573,338 Contributions made (218,146) Increase in net OPEB obligation 355,192 Net OPEB obligation beginning of year 3,614,449 Net OPEB obligation end of year $ 3,969,641 For calculation of the net OPEB obligation, the actuary has set the transition day as July 1, 2008. The end of year net OPEB obligation was calculated by the actuary as the cumulative difference between the actuarially determined funding requirements and the actual contributions for the year ended June 30, 2015. The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plans and the net OPEB obligation are summarized as follows: Percentage of Annual OPEB Cost Annual Year Ended OPEB Cost June 30, 2013 $ 648,466 June 30, 2014 $ 649,497 June 30, 2015 $ 573,338 Percentage of Annual OPEB Cost Net OPEB Contributed from City Obli ag tion 4.6% $3,305,626 52.5% $3,614,449 38.0% $3,969,641 Funded Status and Funding Progress: As of July 1, 2014, the most recent actuarial valuation date for the period July 1, 2014 through June 30, 2015, the actuarial accrued liability was $5,150,697, with no actuarial value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $5,150,697. The covered payroll (annual payroll of active employees covered by the plans) was $35,972,442 and the ratio of the UAAL to covered payroll was 14.3%. As of June 30, 2015, there were no trust fund assets. Actuarial Methods and Assumptions: Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Examples include assumption about future employments, mortality, and the health care cost trend. Actuarially determined amounts are subject to continual review as actual results are compared with past expectations and new estimates are made about the future. Actuarial calculations of the OPEB plan reflect a long-term perspective. The required schedule of funding progress, presented as required supplementary information in the section following the Notes to Financial Statements, will present multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 77 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 Calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. As of the July 1, 2014 actuarial valuation date, the actuarial cost method used is the entry -age normal method. The actuarial assumption includes a 3.5% discount rate and an inflation rate of 3% per annum. The projected annual medical trend rate is 9.0%. The ultimate medical trend rate is 5.0%. The medical trend rate is decreased to 8.5% for year two and then reduced by 0.5% each year until reaching the 5.0% ultimate trend rate. Mortality rates for active employees and retirees are from the SOA RPH-2014 Total Dataset Mortality table fully generational using Scale MP -2014. Annual retirement and termination probabilities were developed from the retirement probabilities from the MFPRSI and IPERS pension plan turnover tables, adjusted to be consistent with expected first fiscal year retirements. Projected claim costs of the health plan is $758.33 per month for retirees and $683.33 for their spouses. The salary increase rate was assumed to be 3.5% per year. The UAAL is being amortized as a level percentage of projected payroll expenses over 30 years on an open basis. 8. Short Term Debt Changes in Short -Term Liabilities - Notes Payable Notes Payable activity for the year ended June 30, 2015, was as follows: July 1, 2014 Issues Retirements Due Within June 30, 2015 One Year Governmental activities: $ 1,943,100 $ 1,215,900 $ 1,154,500 $ 2,004,500 $ 2,004,500 During FY15, the City entered into additional multiple short term loans totaling $1,215,900 and repaid multiple short term loans totaling $1,154,500. The outstanding loans mature one year from the date of the loan and bear interest rates ranging from 2% to 3.25%. The loans were used to fund the acquisition and rehabilitation of single family homes as part of the UniverCity Neighborhood Partnership Program (UniverCity). UniverCity is a cooperative effort of the City of Iowa City and the University of Iowa dedicated to ensuring that the University of Iowa Campus and surrounding neighborhoods remain vital, safe, affordable, and attractive places to live and work for both renters and homeowners. The short term loans have been repaid and will be repaid with the proceeds from the sale of the rehabilitated homes. 78 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 9. Fund Equity Fund balances for the governmental funds are reported in classifications that comprise a hierarchy based on the extent to which the government honors constraints on the specific purposes for which amounts in those funds can be spent. • The Nonspendable classification contains amounts not in spendable form or legally or contractually required to be maintained intact. • Restricted amounts contain restraint on their use externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. • Committed amounts can only be used for specific purposes imposed by formal action of the government's highest level of decision-making authority. The highest level of decision-making authority is the City Council and it takes a resolution to establish, modify or rescind a fund balance commitment. • Amounts intended to be used for specific purposes are Assigned. Assignments should not cause deficits in the Unassigned fund balance. The Finance Director has been delegated authority by the City Council through a resolution to assign amounts to be used for specific purposes. • Unassigned fund balance is the residual classification for the General Fund. The 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. 79 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) Components of Fund Balance Nonspendable: Perpetual Care Principal Total Nonspendable Restricted for: Public Safety Local Option Sales Tax Debt Service GO Bond Projects State Funding Grant Agreement Public Safety Employee Benefits Other Restricted Total Restricted Assigned to: Library Programs Senior Center Programs Emergency Fund Replacement and Acquisition Reserves Other Assigned Total Assigned Unassigned: Total Fund Balances 10. Risk Management June 30, 2015 Bridge, Community Street and Development Traffic Other Employee Block Control Debt Governmental General Benefits Grant Construction Service Funds Total $ 69,000 $ $ - $ - $ $ $ 69,000 69,000 69,000 510,076 510,076 24,282,784 24,282,784 - - 7,051,780 - 7,051,780 376,844 8,515,211 - 4,499,715 13,391,770 - - - - - 5,666,852 5,666,852 - - 277,271 - - - 277,271 - 1,592,570 - 1,592,570 121,042 - - - - 292,841 413,883 25,290,746 1,592,570 277,271 8,515,211 7,051,780 10,459,408 53,186,986 737,513 737,513 34,197 34,197 2,994,574 2,994,574 705,229 - - - - - 705,229 12,126 12,126 4,483,639 4,483,639 19,286,066 - (109) 19,285,957 $ 49,129,451 $ 1,592,570 $ 277,271 $ 8,515,211 $ 7,051,780 $ 10,459,299 $ 77,025,582 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, 2015 the City purchased property, liability, and workers' compensation insurance under the program that provides for a $100,000 self-insured retention per occurrence on property losses, a $500,000 self-insured retention per occurrence on liability, and a $500,000 self-insured retention on workers' compensation losses. The liability insurance provides coverage for claims in excess of the aforementioned self-insured retention up to a maximum of $21,000,000 annual aggregate of losses paid. Settled claims have not exceeded this commercial coverage in any of the past twenty five 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. 80 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 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, 2015 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, 2015 and 2014 are as follows: Current -Year Beginning -of- Claims and Fiscal -Year Changes in Liability Estimates Claim Payments Balance at Fiscal Year -End 2013-2014 $ 1,623,000 $ 2,826,000 $ 2,033,000 $ 2,416,000 2014-2015 2,416,000 1,133,000 1,013,000 2,536,000 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 $8,061,532. 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, 2015 and 2014 are as follows: 2013-2014 2014-2015 Current -Year Beginning -of- Claims and Fiscal -Year Changes in Liability Estimates 509,000 $ 7,292,000 581,000 6,980,000 81 Claim Payments $ 7,220,000 6,993,000 Balance at Fiscal Year -End $ 581,000 568,000 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 11. Commitments and Contingencies Contractual Commitments The total outstanding contractual commitments as of June 30, 2015 are as follows: Fund Pro je ct Bridge, street and traffic Paving and bridge construction, control construction engineering design and consulting Other construction Public works, culture & recreation, Economic Dev, Fire & Police, construction Parking Garage improvements and repair & maintenance Wastewater Sewer construction and south plant expansion Water Water main construction Sanitation Landfill cell reconstruction Airport Runway grading and paving Stormwater Stormwater system improvements Developer Commitments Amount 9,699,109 1,996,899 428,417 1,167,233 68,910 487,381 78,120 56,676 $ 13,982,745 In order to encourage development within designated TIF districts, the City Council has approved developer grants to 5 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 $13,506,152 exist, of which $170,000 may be eligible to be paid in the next fiscal year. These items are expensed in the period in which they are paid. 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 and are subject to the City Council's right of non -appropriation each fiscal year. 82 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 12. 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. 13. Subsequent Events As of July 1, 2015, the City of Iowa City has reclassified Cable Television and it will be recorded as part of the General Fund going forward. The City of Iowa City believed this reclassification was needed as it is anticipated that the fees and charges will not be sufficient to cover the cost of providing cable television services. On July 1, 2015, the City of Iowa City called for redemption General Obligation Bonds, Series 2008A, in the amount of $3,085,000. All outstanding bonds were redeemed with cash on hand. 83 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 14. Accounting Change/Restatement Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reporting for Pensions — an Amendment of GASB No. 27 was implemented during fiscal year 2015. The revised requirements establish new financial reporting requirements for state and local governments which provide their employees with pension benefits, including additional note disclosures and required supplementary information. In addition, GASB No. 68 requires a state or local government employer to recognize a net pension liability and changes in the net pension liability, deferred outflows of resources and deferred inflows of resources which arise from other types of events related to pensions. During the transition year, as permitted, beginning balances for deferred outflows of resources and deferred inflows of resources will not be reported, except for deferred outflows of resources related to contributions made after the measurement date of the beginning net pension liability which is required to be reported by Governmental Accounting Standards Board Statement No. 7I, Pension Transition for Contributions Made Subsequent to the Measurement Date. Beginning net position for governmental and business type activities were restated to retroactively report the beginning net pension liability and deferred outflows of resources related to contributions made after the measurement date, as follows: Governmental Internal Service Total Governmental Activities Change in outflow of resources related to contributions made Net position June 30, 2014, Net pension liability after the June 30, 2013 Net position July 1, 2014, as previously reported at June 30, 2014 measurement date as restated $ 197,806 $ (34,236) $ 20,392 (1,375) 4,363 S 167,933 143 19,160 $ 218,198 $ (35,611) $ 4,506 S 187,093 Parking $ 18,277 $ (986) $ 103 S 17,394 Wastewater Treatment 130,278 (1,478) 154 128,954 Water 66,145 (1,663) 173 64,655 Sanitation 32,143 (1,647) 171 30,667 Stormwater 37,051 (100) 10 36,961 Housing Authority 8,335 (614) 64 7,785 Transit 20,908 (2,371) 246 18,783 Nonmajor Enterprise 31,230 (369) 39 30,900 Internal Service 11,340 - - 11,340 Total Business Type Activities $ 355,707 $ (9,228) $ 960 S 347,439 84 CITY OF IOWA CITY, IOWA NOTES TO FINANCIAL STATEMENTS (continued) June 30, 2015 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. 72, Fair Value Measurement and Application, issued February 2015, will be effective for the fiscal year ending June 30, 2016. The objective of this statement is to improve financial reporting by clarifying the definition of fair value for financial reporting purposes, establishing general principles for measuring fair value, providing additional fair value application guidance, and enhancing disclosures about fair value measurements. Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68, will be effective for fiscal year ending June 30, 2016. The objective is to improve the usefulness of information for decisions made by the various users of the general purpose external financial reports (financial reports) of governments whose employees both active employees and inactive employees are provided with pensions that are not within the scope of Statement No. 68, Accounting and Financial Reporting for Pensions, as amended. Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other than Pension Plans, will be effective for the fiscal year ending June 30, 2017. The objective of this Statement is to improve the usefulness of information about postemployment benefits other than pensions (other postemployment benefits or OPEB) included in the general purpose external financial reports of state and local governmental OPEB plans for making decisions and assessing accountability. Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, will be effective for fiscal year ending June 30, 2018. The primary objective of this Statement is to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions (other postemployment benefits or OPEB). It also improves information provided by state and local governmental employers about financial support for OPEB that is provided by other entities. Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments, will be effective June 30, 2016. The objective of this Statement is to identify—in the context of the current governmental financial reporting environment—the hierarchy of generally accepted accounting principles (GAAP). The "GAAP hierarchy" consists of the sources of accounting principles used to prepare financial statements of state and local governmental entities in conformity with GAAP and the framework for selecting those principles. The City's management has not yet determined the effect these statements will have on the City's financial statements. 85 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, 2015 (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 $ 51,493 $ - $ 51,493 Delinquent property taxes 4 - 4 Tax increment financing taxes 640 - 640 Other city taxes 2,877 - 2,877 Licenses and permits 1,806 8 1,814 Intergovernmental 21,542 13,599 35,141 Charges for services 4,453 38,766 43,219 Use of money and property 999 1,433 2,432 Miscellaneous 3,271 784 4,055 Total revenues 87,085 54,590 141,675 Expenditures/Expenses: Public safety 22,218 - 22,218 Public works 7,187 - 7,187 Health and social services 319 - 319 Culture and recreation 12,904 - 12,904 Community and economic development 7,650 - 7,650 General government 7,552 - 7,552 Debt service 17,209 - 17,209 Capital outlay 24,859 - 24,859 Business -type - 59,970 59,970 Total expenditures/expenses 99,898 59,970 159,868 Excess (deficiency) of revenues over (under) expenditures/expenses (12,813) (5,380) (18,193) Other financing sources and uses, net 7,901 3,498 11,399 Net change in fund balances (4,912) (1,882) (6,794) Balances, beginning of year 81,237 85,357 166,594 Balances, end of year $ 76,325 $ 83,475 $ 159,800 See Note to Required Supplementary Information. 86 Budgeted Amounts Final to Actual Variance - Positive Original Final (Negative) $ 51,609 $ 51,609 $ (116) - - 4 653 653 (13) 2,594 2,594 283 1,581 1,581 233 41,146 45,156 (10,015) 42,403 42,422 797 2,187 2,403 29 5,179 3,719 336 147,352 150,137 (8,462) 22,303 23,013 795 7,595 7,601 414 285 324 5 13,197 13,532 628 13,065 13,912 6,262 8,058 8,130 578 13,780 17,315 106 39,099 41,516 16,657 57,150 72,040 12,070 174,532 197,383 37,515 (27,180) (47,246) 29,053 12,980 13,544 (2,145) (14,200) (33,702) $ 26,908 132,204 166,594 $ 118,004 $ 132,892 87 CITY OF IOWA CITY BUDGETARY COMPARISON SCHEDULE BUDGET TO GAAP RECONCILIATION REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2015 (dollar amounts expressed in thousands) Governmental Fund Types Accrual Modified Accrual Budget Basis Adjustments Basis Revenues $ 87,085 $ 1,150 $ 88,235 Expenditures 99,898 (11,696) 88,202 Net (12,813) 12,846 33 Other financing sources and uses, net 7,901 (10,093) (2,192) Beginning Fund Balances 81,237 (2,052) 79,185 Ending Fund Balances $ 76,325 $ 701 $ 77,026 Enterprise Fund Types Accrual Accrual Budget Basis Adjustments Basis Revenues $ 54,590 $ (355) $ 54,235 Expenditures 59,970 (5,489) 54,481 Net (5,380) 5,134 (246) Other financing sources and uses, net 3,498 7,070 10,568 Beginning Fund Balances 85,357 250,742 336,099 Ending Fund Balances $ 83,475 $ 262,946 $ 346,421 See Note to Required Supplementary Information. 88 City of Iowa City, Iowa Note to Required Supplementary Information - Budgetary Reporting For the Year Ended June 30, 2015 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 $2,785,000 and expenditures by $22,851,000. 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. 89 90 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 Last Fiscal Year* (amounts expressed in thousands) 2015 City's proportion of the net pension liability 3.778137% City's proportionate share of the net pension liability $ 13,696 City's covered -employee payroll 9,648 City's proportionate share of the net pension liability as a percentage of its covered -employee payroll 141.96% Plan fiduciary net position as a percentage of the total pension liability 86.27% * The amounts presented for each fiscal year were determined as of June 30. 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. 91 City of Iowa City, Iowa Required Supplementary Information - Schedule of the City's Contributions Municipal Fire and Police Retirement System of Iowa Last Fiscal Year (amounts expressed in thousands) 92 2015 2014 2013 2012 Statutorily required contributions $ 2,955 $ 2,906 $ 2,383 $ 2,277 Contributions in relation to the statutorily required contribution (2,955) (2,906) (2,383) (2,277) Contribution deficiency (excess) $ - $ - $ - $ - City's covered -employee payroll $ 9,716 $ 9,648 $ 9,122 $ 9,197 Contributions as a percentage of covered -employee payroll 30.41% 30.12% 26.12% 24.76% 92 2011 2010 2009 2008 2007 2006 $ 1,654 $ 1,336 $ 1,425 $ 1,893 $ 1,954 $ 1,924 (1,654) (1,336) (1,425) (1,893) (1,954) (1,924) $ 8,310 $ 7,860 $ 7,601 $ 7,430 $ 7,042 $ 6,820 19.90% 17.00% 18.75% 25.48% 27.75% 28.21% 93 City of Iowa City, Iowa Notes to Required Supplementary Information - Pension Liability Municipal Fire and Police Retirement System of Iowa Year ended June 30, 2015 Changes of benefit terms: There were no significant changes of benefit terms. Changes of assumptions: Effective July 1, 2014, two additional steps were taken to phase in the 1994 Group Annuity Mortality Table for post-retirement mortality. The two additional steps result in weighting of 2/12 of the 1971 Group Annuity Mortality Table and 10/12 of the 1994 Group Annuity Mortality Table. 94 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 Last Fiscal Year* (amounts expressed in thousands) 2015 City's proportion of the net pension liability 0.4378904% City's proportionate share of the net pension liability $ 17,366 City's covered -employee payroll 28,654 City's proportionate share of the net pension liability as a percentage of its covered -employee payroll 60.61% Plan fiduciary net position as a percentage of the total pension liability 87.61% * The amounts presented for each fiscal year were determined as of June 30. 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. 95 City of Iowa City, Iowa Required Supplementary Information - Schedule of the City's Contributions Iowa Public Employees' Retirement System Last Fiscal Year (amounts expressed in thousands) 96 2015 2014 2013 2012 Statutorily required contributions $ 2,545 $ 2,559 $ 2,442 $ 2,327 Contributions in relation to the statutorily required contribution (2,545) (2,559) (2,442) (2,327) Contribution deficiency (excess) $ - $ - $ - $ - City's covered -employee payroll $ 28,495 $ 28,654 $ 28,170 $ 28,833 Contributions as a percentage of covered -employee payroll 8.93% 8.93% 8.67% 8.07% 96 2011 2010 2009 2008 2007 2006 $ 1,877 $ 1,780 $ 1,659 $ 1,522 $ 1,384 $ 1,333 (1,877) (1,780) (1,659) (1,522) (1,384) (1,333) $ 27,013 $ 26,764 $ 26,133 $ 25,151 $ 24,073 $ 23,184 6.95% 6.65% 6.35% 6.05% 5.75% 5.75% 97 City of Iowa City, Iowa Notes to Required Supplementary Information - Pension Liability Iowa Public Employees' Retirement System Year ended June 30, 2015 Changes of benefit terms: Legislation passed in 2010 modified benefit terms for current Regular members. The definition of final average salary changed from the highest three to the highest five years of covered wages. The vesting requirement changed from four years of service to seven years. The early retirement reduction increased from 3 percent per year measured from the member's first unreduced retirement age to a 6 percent reduction for each year of retirement before age 65. Changes of assumptions: The 2014 valuation implemented the following refinements as a result of a quadrennial experience study: • Decreased the inflation assumption from 3.25 percent to 3.00 percent • Decreased the assumed rate of interest on member accounts from 4.00 percent to 3.75 percent per year. • Adjusted male mortality rates for retirees in the Regular membership group. • Moved from an open 30 year amortization period to a closed 30 year amortization period for the UAL beginning June 30, 2014. Each year thereafter, changes in the UAL from plan experience will be amortized on a separate closed 20 year period. The 2010 valuation implemented the following refinements as a result of a quadrennial experience study: • Adjusted retiree mortality assumptions. • Modified retirement rates to reflect fewer retirements. • Lowered disability rates at most ages. • Lowered employment termination rates • Generally increased the probability of terminating members receiving a deferred retirement benefit. • Modified salary increase assumptions based on various service duration. The 2007 valuation adjusted the application of the entry age normal cost method to better match projected contributions to the projected salary stream in the future years. It also included in the calculation of the UAL amortization payments the one-year lag between the valuation date and the effective date of the annual actuarial contribution rate. 98 City of Iowa City, Iowa Notes to Required Supplementary Information - Pension Liability Iowa Public Employees' Retirement System Year ended June 30, 2015 The 2006 valuation implemented the following refinements as a result of a quadrennial experience study: • Adjusted salary increase assumptions to service based assumptions. • Decreased the assumed interest rate credited on employee contributions from 4.25 percent to 4.00 percent. • Lowered the inflation assumption from 3.50 percent to 3.25 percent. • Lowered disability rates for sheriffs and deputies and protection occupation members. 99 City of Iowa City, Iowa Required Supplementary Information — Schedule of Funding Progress for Health and Dental Plans For the Year Ended June 30, 2015 100 UAAL As a Actuarial Actuarial Actuarial Percentage of Valuation Fiscal Value of Accrued Unfunded AAL Funded Covered Date Year Assets Liability (AAL) (UAAL) Ratio Covered Payroll Payroll July 1, 2010 June 30, 2011 $ - $ 6,893,438 $ 6,893,438 0.00% $ 31,505,702 21.9% July 1, 2012 June 30, 2013 $ - $ 7,163,715 $ 7,163,715 0.00% $ 34,992,423 20.5% July 1, 2014 June 30, 2015 $ - $ 5,150,697 $ 5,150,697 0.00% $ 35,972,442 14.3% 100 NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special Revenue Funds account for revenues derived from specific sources that are required to be accounted for as separate funds. The funds in this category and their purpose are as follows: Other Shared Revenue and Grants Fund - accounts for revenue from various sources, primarily road use tax monies from the State of Iowa and reimbursable programs funded by federal and state grants. Economic Development Fund — accounts for revenue and expenditures of economic development activities. Metropolitan Planning Organization of Johnson County Fund — accounts for the financial activities of the metropolitan/rural cooperative planning organization. CAPITAL PROJECT FUND Capital Projects Funds are utilized to account for all resources used in the acquisition and construction of capital facilities and other major fixed assets, with the exception of those that are financed by proprietary fund monies. The fund in this category is as follows: Other Construction Fund - accounts for the construction or replacement of other City general fixed assets, such as administrative buildings with various funding sources, including general obligation bonds, intergovernmental revenues, and contributions. 101 Assets Equity in pooled cash and investments Receivables: Property tax Accounts and unbilled usage Interest Due from other governments Inventories Restricted assets: Equity in pooled cash and investments Total assets CITY OF IOWA CITY COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS June 30, 2015 (amounts expressed in thousands) Capital Special Revenue Projects Total $ 5,071 $ - $ 265 $ - $ 5,336 - 266 - - 266 4 - - 200 204 - - 14 14 760 49 5,142 5,951 148 - - - 148 5 58 - 6,600 6,663 $ 5,988 $ 324 $ 314 $ 11,956 $ 18,582 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable $ 97 $ Contracts payable - Accrued liabilities 63 Advances from other funds 151 Due to other governments - Liabilities payable from restricted assets: Deposits 5 Advances from grantors - Total liabilities 316 Deferred inflows of resources: Metropolitan Other Planning Shared Organization Revenue and Economic of Johnson Other Grants Development County Construction Total $ 5,071 $ - $ 265 $ - $ 5,336 - 266 - - 266 4 - - 200 204 - - 14 14 760 49 5,142 5,951 148 - - - 148 5 58 - 6,600 6,663 $ 5,988 $ 324 $ 314 $ 11,956 $ 18,582 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable $ 97 $ Contracts payable - Accrued liabilities 63 Advances from other funds 151 Due to other governments - Liabilities payable from restricted assets: Deposits 5 Advances from grantors - Total liabilities 316 Deferred inflows of resources: 265 Unavailable revenues: 2,617 Succeeding year property taxes - Grants 5 Other - Total deferred inflows of resources _ 5 Fund balances: 10,460 Restricted 5,667 Total fund balances 5,667 Total liabilities, deferred inflows 58 $ 11 $ 263 $ 429 - - 1,846 1,846 11 4 78 - 2,219 2,370 - 323 323 - 5 - 42 42 58 22 4,697 5,093 265 - - 265 - - 2,612 2,617 - - 147 147 265 - 2,759 3,029 1 292 4,500 10,460 1 292 4,500 10,460 of resources and fund balances $ 5,988 $ 324 $ 314 $ 11,956 $ 18,582 102 CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS Revenues Property taxes Intergovernmental Charges for services Use of money and property Miscellaneous Total revenues Expenditures Current: Public safety Public works Culture and recreation Community and economic development General government Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (Uses) Issuance of debt Sale of capital assets Premium on issuance of bonds Transfers in Transfers out Total other financing sources and (uses) Net change in fund balances Fund Balances, Beginning Fund Balances, Ending For the Year Ended June 30, 2015 (amounts expressed in thousands) 5,212 - 177 315 190 - 5,579 315 311 311 730 5,942 123 123 541 567 1,600 - 119 Capital - 4,759 4,949 Special Revenue 13,044 Projects - - 3,121 Metropolitan 1 - Other - Planning - - Shared 80 Organization 390 - Revenue and Economic of Johnson Other (640) Grants Development County Construction Total $ - $ 921 $ - $ - $ 921 7,442 15 319 6,690 14,466 49 - - 139 188 74 - - 14 88 54 - 2 200 256 7,619 936 321 7,043 15,919 5,212 - 177 315 190 - 5,579 315 311 311 730 5,942 123 123 541 567 1,600 - 119 119 - 4,759 4,949 541 6,609 13,044 2,040 621 (220) 434 2,875 - - - 3,121 3,121 1 - - - 1 - - - 80 80 390 - 341 413 1,144 (1,281) (640) - (6,402) (8,323) (890) (640) 341 (2,788) (3,977) 1,150 (19) 121 (2,354) (1,102) 4,517 20 171 6,854 11,562 $ 5,667 $ 1 $ 292 $ 4,500 $ 10,460 103 104 NONMAJOR ENTERPRISE FUNDS Enterprise Funds account for operations and activities of the City that are financed and operated in a manner similar to a private business enterprise, and where the costs of providing services to the general public on a continuing basis are expected to be financed or recovered primarily through user charges, or where the City has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The funds in this category are as follows: Airport Fund accounts for the operation and maintenance of the airport facility. Cable Television Fund — accounts for the operation and maintenance of the Broadband Telecommunications Commission that oversees the franchise agreement with the cable television company, including production and broadcasting on the government television channels. 105 CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF NET POSITION NONMAJOR ENTERPRISE FUNDS June 30, 2015 (amounts expressed in thousands) Cable Assets Current assets: Equity in pooled cash and investments $ - $ 1,406 $ 1,406 Receivables: Accounts and unbilled usage 28 174 202 Interest - 4 4 Due from other governments 1,003 - 1,003 Total current assets 1,031 1,584 2,615 Noncurrent assets: Restricted assets: Equity in pooled cash and investments 110 120 230 Other post employment benefits asset 5 - 5 Capital assets: Land 12,158 - 12,158 Buildings 5,157 731 5,888 Improvements other than buildings 409 - 409 Machinery and equipment 281 110 391 Infrastructure 17,455 - 17,455 Accumulated depreciation (6,775) (451) (7,226) Construction in progress 65 - 65 Total noncurrent assets 28,865 510 29,375 Total assets 29,896 2,094 31,990 Deferred Outflows of Resources Pension related deferred outflows 7 40 47 Liabilities Current liabilities: Accounts payable 15 123 138 Contracts payable 91 - 91 Accrued liabilities 2 9 11 Employee vested benefits 2 10 12 Total current liabilities 110 142 252 Noncurrent liabilities: Liabilities payable from restricted assets: Deposits 9 - 9 Advances from other funds 462 - 462 Employee vested benefits 2 8 10 Net pension liability 34 226 260 Other post employment benefits obligation - 15 15 Total noncurrent liabilities 507 249 756 Total liabilities 617 391 1,008 Deferred Inflows of Resources Pension related deferred inflows 13 90 103 Net Position Net investment in capital assets 28,750 390 29,140 Restricted for future improvements 100 - 100 Unrestricted 423 1,263 1,686 Total net position $ 29,273 $ 1,653 $ 30,926 106 CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION NONMAJOR ENTERPRISE FUNDS For the Year Ended June 30, 2015 (amounts expressed in thousands) Operating Revenues: Charges for services Miscellaneous Total operating revenues Operating Expenses: Personal services Commodities Services and charges Depreciation Total operating expenses Operating income (loss) Nonoperating Revenues: Gain on disposal of capital assets Operating grants Interest income Total nonoperating revenues Income (loss) before capital contributions and transfers Capital contributions Transfers in Transfers out Change in net position Net Position, Beginning, as restated Net Position, Ending Cable Airport Television Total $ 349 $ 750 $ 1,099 351 68 408 476 26 9 35 557 256 813 651 673 1,324 976 33 1,009 1,627 706 2,333 (1,276) 44 (1,232) 871 - 871 232 - 232 (173) 49 (124) 137 - 137 68 - 68 - (55) (55) 32 (6) 26 29,241 1,659 30,900 $ 29,273 $ 1,653 $ 30,926 107 CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS For the Year Ended June 30, 2015 (amounts expressed in thousands) 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 Operating grants received Transfers from other funds Transfers to other funds Repayment of advances from other funds Net cash flows used for noncapital financing activities Cash Flows From Capital and Related Financing Activities Capital grants received Acquisition and construction of property and equipment Proceeds from sale of property Net cash flows from (used for) capital and related financing activities Cash Flows From Investing Activities Interest on investments Net increase in cash and cash equivalents Cash and Cash Equivalents, Beginning Cash and Cash Equivalents, Ending Reconciliation of operating loss to net cash flows from (used for) operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation expense Changes in: Receivables: Accounts and unbilled usage Accounts payable Employee vested benefits Net pension liability Deferred outflows of resources Deferred inflows of resources Other post employment benefits asset/obligation Total adjustments Net cash flows from (used for) operating activities Cable Airport Television Total $ 323 $ 746 $ 1,069 (647) (261) (908) (71) (421) (492) (395) 64 (331) 33 1,009 81 - 81 68 - 68 - (55) (55) (473) - (473) (324) (55) (379) 13 90 249 - 249 (459) (1) (460) 930 - 930 720 (1) 719 - 3 3 109 1,515 1,624 $ 110 $ 1,526 $ 1,636 $ (1,276) $ 44 $ (1,232) 976 33 1,009 (28) (4) (32) (64) 4 (60) (1) (5) (6) (14) (95) (109) (2) (6) (8) 13 90 103 1 3 4 881 20 901 S (395) S 64 $ (331) 108 INTERNAL SERVICE FUNDS Internal Service Funds account for goods and services provided by one department to other City departments on a cost -reimbursement basis. The funds in this category are: Equipment Maintenance Fund accounts for the provision of maintenance for City vehicles and equipment and vehicle rental to other City departments from a central vehicle pool. Central Services Fund — accounts for the support services of photocopying, paper supplies, mail, overnight shipping, and two-way radios provided to other City departments. Loss Reserve Fund — accounts for the property, liability, Workers' Compensation and health insurance premiums and claims activity for City departments, including the self-insured retention portion. Information Technology Fund — accounts for the accumulation and allocation of costs associated with telecommunications and data processing, including the operation and replacement of equipment. 109 CITY OF IOWA CITY COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS June 30, 2015 (amounts expressed in thousands) Equipment Central Loss Information Maintenance Services Reserve Technology Assets Current assets: Equity in pooled cash and investments Receivables: Accounts and unbilled usage Interest Due from other governments Inventories Total current assets Noncurrent assets: Restricted assets: Equity in pooled cash and investments Other post employment benefits asset 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 Liabilities Current liabilities: Accounts payable Accrued liabilities Employee vested benefits Total current liabilities Noncurrent liabilities: Employee vested benefits Net pension liability Other post employment benefits obligation Total noncurrent liabilities Total liabilities Deferred Inflows of Resources Pension related deferred inflows Net Position Net investment in capital assets Unrestricted Total net position Total $ 11,129 $ 662 $ 14,054 $ 3,088 $ 28,933 41 - 58 - 99 33 2 42 10 87 90 - - - 90 508 - - - 508 11,801 664 14,154 3,098 29,717 - - - 74 74 3 22 - 25 45 - - 45 1,298 - 243 1,541 50 - - - 50 16,626 792 24 2,228 19,670 - 31 - 1,951 1,982 (11,618) (195) (21) (2,542) (14,376) 21 - - 37 58 6,425 628 25 1,991 9,069 18,226 1,292 14,179 5,089 38,786 85 3 17 91 196 253 5 87 152 497 22 1 3,110 24 3,157 30 2 3 20 55 305 8 3,200 196 3,709 25 1 3 16 45 416 14 79 459 968 - 5 - 73 78 441 20 82 548 1,091 746 28 3,282 744 4,800 165 6 31 183 385 6,422 628 3 1,917 8,970 10,978 633 10,880 2,336 24,827 $ 17,400 $ 1,261 $ 10,883 $ 4,253 $ 33,797 110 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, 2015 (amounts expressed in thousands) Equipment Central Loss Information Maintenance Services Reserve Technology Total Operating Revenues: Charges for services $ 6,049 $ 249 $ 9,400 $ 1,747 $ 17,445 Total operating revenues 6,049 249 9,400 1,747 17,445 Operating Expenses: Personal services 875 37 190 973 2,075 Commodities 2,053 52 9 208 2,322 Services and charges 539 152 8,978 411 10,080 3,467 241 9,177 1,592 14,477 Depreciation 1,245 63 3 212 1,523 Total operating expenses 4,712 304 9,180 1,804 16,000 Operating income (loss) 1,337 (55) 220 (57) 1,445 Nonoperating Revenues (Expenses): Gain (loss) on disposal of capital assets 247 (21) - 7 233 Operating grants 2 - - - 2 Interest income 40 3 53 13 109 Total nonoperating revenues (expenses) 289 (18) 53 20 344 Income (loss) before transfers 1,626 (73) 273 (37) 1,789 Capital contributions 879 - - - 879 Transfers in 93 23 - 513 629 Change in net position 2,598 (50) 273 476 3,297 Net Position, Beginning, as restated 14,802 1,311 10,610 3,777 30,500 Net Position, Ending $ 17,400 $ 1,261 $ 10,883 $ 4,253 $ 33,797 CITY OF IOWA CITY, IOWA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended June 30, 2015 (amounts expressed in thousands) 112 Equipment Central Loss Information Maintenance Services Reserve Technology Total Cash Flows From Operating Activities Receipts from customers and users S 5,969 S 249 S 9,364 S 1,747 S 17,329 Payments to suppliers (2,409) (220) (9,095) (530) (12,254) Payments to employees (920) (37) (87) (1,003) (2,047) Net cash flows from (used for) operating activities 2,640 (8) 182 214 3,028 Cash Flows From Noncapital Financing Activities Transfers from other funds 253 23 - 513 789 Net cash flows from noncapital financing activities 253 23 513 789 Cash Flows From Capital and Related Financing Activities Acquisition and construction of property and equipment (2,026) (91) (450) (2,567) Proceeds from sale of property 254 - 7 261 Net cash flows used for capital and related financing activities (1,772) (91) - (443) (2,306) Cash Flows From Investing Activities Interest on investments 22 2 31 7 62 Net increase (decrease) in cash and cash equivalents 1,143 (74) 213 291 1,573 Cash and Cash Equivalents, Beginning 9,986 736 13,841 2,871 27,434 Cash and Cash Equivalents, Ending S 11,129 S 662 S 14,054 S 3,162 S 29,007 Reconciliation of operating income (loss) to net cash flows from (used for) operating activities: Operating income (loss) S 1,337 S (55) S 220 S (57) S 1,445 Adjustments to reconcile operating income (loss) to net cash flows from (used for) operating activities: Depreciation expense 1,245 63 3 212 1,523 Changes in: Receivables: Accounts and unbilled usage (41) - (36) - (77) Due from other governments (39) - (39) Inventories 89 - - - 89 Accounts payable 94 (16) (108) 89 59 Accrued liabilities 1 - 109 2 112 Employee vested benefits (9) 1 - (4) (12) Net pension liability (175) (6) (33) (193) (407) Deferred outflows of resources (24) (1) (5) (23) (53) Deferred inflows of resources 165 6 31 183 385 Other post employment benefits assct/obliigation (3) - 1 5 3 Total adjustments 1,303 47 (38) 271 1,583 Net cash flows from (used for) operating activities S 2,640 S (8) S 182 S 214 S 3,028 112 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. 113 CITY OF IOWA CITY STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended June 30, 2015 (amounts expressed in thousands) Balance Balance July 1, 2014 Increases Decreases June 30, 2015 Project Green Assets Equity in pooled cash and investments Total assets Liabilities Accounts payable Due to agency Total liabilities $ 156 $ 65 $ 70 $ 151 $ 156 $ 65 $ 70 $ 151 $ 5 $ 5 $ 5 $ 5 151 60 65 146 $ 156 $ 65 $ 70 $ 151 114 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 117 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 122 These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity 132 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 142 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 144 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 fi°om the comprehensive annual financial report for the relevant year. 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' M O1 r— ' ' ' ' ' r-- 00 00 Da N 7 N N_ ol 00 a, 00 � p N 7 N N N ffi FA ffi FA O1 Cl� N N N O U N � � w � f{3 6S 6S 6S U F' «F+ j U U 6S ffi FA ffi C 'O N � � F I ti U c o n p,rn a o � a, M O1 M [� 00 O� N oo a M 00 N V � N N F � 6S ffi FA ffi � O Q a � O U oo oa 00 00 00 00 M � F ' ' ' O ' � •-- ' N � ' N M N � ,� N U � 3 E En U rQ V � <� F C � � r^ J � C U y -o w r U c U 'T b0 U C a 3 F" ° � � w � � a � o w C7 to 120 121 10 10 t C V1 V1 10 't O1 N N M V) ' V) ' O1 ' O1 C N O1 c_ -� C 00 C 00 �t M O, 10 10 10 C M 00 10 al 00 M 01 V) O W O N O O N 01 O 00 V1 10 [� N n Clzl --� O1 N [— O 10 a, O, O O N r— 10 �t O M 00 O O1 10 M O �t 10 r- M 00 Q1 00 �--� 00 M 00 [� 10 O N M 10 01 M 00 00 � M M 10 O 00 O N [� N -� -� -� W -� N 69 69 69 69 69 69 69 69 M 00 r— 10 N [� N ~ lf�M 10 r- N N00 Q1 N N Ql [� N 00 O O N V) [— M �t M 10 O ' 01 M V) ' 01 V) �t o O V1 ,-. 1p V1 al 10 [� M V1 al O 10 N al ,-• V1 1p O1 W 10 r. r. � o0 N 00 10 ~ nO M ~ 1p N al N .-• .-• .-• .-• al .-. N N 69 69 69 69 69 69 69 69 [� N O V1 Q1 Q1 N [� 10 W W V1 1p Q1 M N O V1 O V1 � � V1 W N Q1 Q1 c W •� [� •� [� 7 -� -� 1p Ql [� Ql W W [� O 1p M 7 Ql Ql W Vl N [� W N Ol M .-. O G � N U 7 M 0 -� 1p al N al M Vl Vl 7 W W O O O G � Vl N Vl 7 1p M W [� 7 t W � � N U Vl O 10 W 10 [— O Vl 00 M [) M O O O ' ' 1p ' M W N N [� 10 N O S 00 O O O m M O V) �--� N r. [— W W N [- N N Cl N [� ^ [� 7 W � N N C al ^ 7 N N 7 M Vl O C 7 10 10 M fl N 01 r- N 69 69 69 69 69 69 69 69 4J G w G � � � •� O ai p p 'O CA Q U O O 7 N fi 7 p CU.A N s0 -i N s4J- p QX"' w O G N OA r'" F- Y_ ai G COA N OE G G N Y Q"' N cC 4J O N 4: cC cC G cC U s C. C. U U C. .: c¢ N '/' '/' cC cC N N G i W U� Q U .G.0 C F F O �a WU 0�.�.v Q 121 01 t 00 00 V') V') M O \O M C) 110 CIA I- cli O O V) N O F` j L [� 00 N 00 N 00 00 O1 O O1 DD DD DD DD M M I- m 00 Ol t Y! U O .O w 0 M N 00 Ol U .O O � M N 00 N 00 M 00 M O L U O L 0. 122 RR O N O 7 v •O S C. E n `o o � � N o rn N N rn N � ONi O R M N cn N M N V N V N V N V N V N V in V M E � W C 1 � a 1 9 v J L R M N M N M N V N V N V N V N V N V N V M F N `, 7 to L7 L7 to to L7 L7 to 6A to V3 69 69 to V3 69 to L7 L7 to ' O ro i V W W N N Obi N N iD �O O 1 � 1 � K W _ W J A a O V N N V N O O V V R iD b N V N V N V V iD �D V O N O iD N iD V iD iD O� C N O �O N O V N iD V -- a x x x x x x x x x x C 9 O •p r O O O O d = 123 Is` LIM In In �_ a 00 n Nm O O n O M Cl M N 00 In 00 00 00 � � C C1 00 00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N O IO C� C� 00 � � 00 00 OHO ON1 0�1 O O O N N N NO M 00 O DD M �n 01 01 01 01 l� DD O n M M 00 O O n l N � C� � OM N l� OHO l� OHO N 000 � O� O� IO M 000 r-� OM N V V O M O M _ I_ V 01 M Ic 00 M M M M M M M N N N O O O O O O O O O O O O O O N N N N N N N N N N 124 CITY OF IOWA CITY, IOWA PROPERTY TAX BUDGETS AND COLLECTIONS Last Ten Fiscal Years (Cash basis of accounting) (amounts expressed in thousands) Source: Certificate of City Taxes and Johnson County Treasurer's Office Note: This schedule is presented on a cash basis of accounting. Taxes are collected by the Johnson County Treasurer and submitted to the City in the following month. Because of the month delay, some years will show Current Tax Collections in excess of the Total Tax Levied. ' Delinquent tax collection is presented by collection year, rather than levy year, because information is not available from Johnson County Treasurer by levy year. 125 Percent of Total as Collection Total Tax Current Tax Levy Delinquent Tax Total Tax a Percent of Year Levied Collections Collected Collections' Collections Levy 2006 36,460 36,654 100.5 44 36,698 100.7 2007 39,094 38,947 99.6 13 38,960 99.7 2008 39,973 39,768 99.5 70 39,838 99.7 2009 43,168 43,118 99.9 18 43,136 99.9 2010 45,393 45,318 99.8 17 45,335 99.9 2011 47,789 47,826 100.1 8 47,834 100.1 2012 49,595 49,543 99.9 1 49,544 99.9 2013 50,407 50,139 99.5 3 50,142 99.5 2014 50,307 49,835 99.1 1 49,836 99.1 2015 51,609 51,292 99.4 8 51,300 99.4 Source: Certificate of City Taxes and Johnson County Treasurer's Office Note: This schedule is presented on a cash basis of accounting. Taxes are collected by the Johnson County Treasurer and submitted to the City in the following month. Because of the month delay, some years will show Current Tax Collections in excess of the Total Tax Levied. ' Delinquent tax collection is presented by collection year, rather than levy year, because information is not available from Johnson County Treasurer by levy year. 125 126 0 0 --� 00 O O1 A N O O1 � O O O O O 't 110 1�0 7t 7t 7t 7t M M 0 0 0 O O F CC CC w x � � �I t Vl 1--00 OA N Lig N OM--� M \O Q1 00 00 N_ w00 O N d' \O dN' O r- N O N � F' 69 0 0 00 O M Ln O \O O O l0 O O N O O M O V> 1.0 O F' CC w COC x � O 00 00 N ' M O d' 1.0 .- 00 00 N 00LnIn O N O �/1 a n 00 l� 00 00 a n � COC CyC N N O 3 ¢ 71- N o w ctct �> z o d a v h V w •y � cC s-' U O It CIO Q ct • O � •� U ct aw3���x�rzrz¢¢3�x z -o ¢ a 71- ¢ o U O cC Cq 7Z UO CIO IO U v, O❑ U ~ a U b q ct U ¢ Q U y N O U T a a y a 30 Iz °>' ct ct ¢�b�o �o Uz3tirx� 126 127 69 0 Q 4.1 U � 0 N N M C1 00 C1 I �i � �J "O 00 �D I� 00 00 V'1 00 O a� G oo O oo O G' z z z z M U U M 00 00 U 00 U U it U it U 69 0 Q 4.1 U � U N N M C1 00 C1 I �i � �J "O 00 �D I� 00 00 V'1 00 O a� G oo O oo O G' Q 00 U M 00 69 69 0 Q 4.1 U � U N N M C1 00 t I � �J "O 00 �D I� 00 00 V'1 00 O C U rte'\ r G' Q U M 00 00 U 00 U it U 69 Q 4.1 U � N ,l I � �J "O 00 �i O C U rte'\ r Q M 00 00 00 U 69 128 69 11 V9 Q 4.1 U � N ,l I � �J 3 O C U rte'\ r Q QPM' W rU\ V O C/5F-1 Nt r40:, U F�OV FLI 128 69 11 V9 Q 4.1 U ,l I �J 3 O C rte'\ r CITY OF IOWA CITY, IOWA SALES HISTORY AND TOTAL WATER CHARGES Last Ten Fiscal Years Fiscal Water Sales Water System Year Cubic Feet Sold Charges 2006 267,107,998 $ 8,844,993 2007 261,072,632 8,414,310 2008 249,361,929 7,976,536 2009 234,804,167 7,497,903 2010 234,342,825 7,568,378 2011 236,838,370 7,661,898 2012 246,618,257 7,953,738 2013 254,616,773 8,194,467 2014 239,790,719 7,778,364 2015 240,423,612 8,136,670 Sources: City of Iowa City Revenue Department 129 O O N 130 0 0 0 O, 00 �i �i Z Z N N U V O\ cc U O 00 00 00 Vn 110 00 m 00 N 110 oc 1 r- 01 M M U U 69 Lr Lr 69 64 U U 69 130 0 0 O, 00 �i �i Z Z N N U V O\ cc O\ O 00 00 00 Vn 110 00 m 00 N 110 oc 1 r- 01 M M U 69 Lr 69 64 U 69 69 69 130 0 0 O, 00 �i Z Z N N U V O\ cc O\ O 00 00 00 Vn 110 00 m 00 N 110 oc 1 r- 01 M M U 69 Lr 69 64 U 130 O, 00 �i N N V O\ cc O\ O 00 00 00 Vn 110 00 m 00 N 110 oc 1 r- 01 M M 69 69 64 130 N o o a a y U t� U v o 0 3 o U o al o 0 0 0 130 CITY OF IOWA CITY, IOWA SALES HISTORY AND TOTAL SEWER CHARGES Last Ten Fiscal Years Fiscal Sewer Sales Sewer System Year Cubic Feet Sold Charges 2006 302,925,357 $ 12,373,762 2007 315,199,203 11,084,369 2008 285,492,596 12,221,769 2009 276,455,246 12,499,949 2010 265,375,857 12,541,905 2011 280,303,237 12,748,695 2012 282,134,840 12,784,321 2013 285,472,392 12,883,641 2014 269,494,125 12,382,031 2015 266,341,794 12,248,082 Sources: City of Iowa City Revenue Department 131 r,— N [� O O r- N N w P, - c y N 00 N M O1 � CCH llc� N O oo M O l M Cd L P. O Ui 0 0 0 0 0 0 0 0 0 0 °" ° ° ca ca ca ca ca ca ca ca ca ca Jaz 00 V1 N - O N 00 C --� N � Q\ M O V"1 O1 O � ^O L. O L 00 N O Cl N a� Lr) oca C C7,000 N N DD Lr) 7tN N O V ON 00 00 00 V'1 00 [� Cl 00 [� M V'1 O _ 00 M 00 V1 00 O O M O Z. 00 N M M 00 00oc C O N a rii � Q\ 7t � 00 lfl Lr) V � 000 000 V'1 Lr) 0 � � � r 000 u O O O Lr) 7t O O O O O O LZ >0 N N N N N N N N N N w 00 M M - � O C 00 [� 00 7t M uy _ Lr�[� V1 00 M M 00 00 00 O\ 7t 00 7t 00 Lr) O CP �C Lr -zt M M •--� --� 0 Ui 0 0 0 0 0 0 0 0 0 0 °" ° ° ca ca ca ca ca ca ca ca ca ca Jaz 132 O � nmd - 00 N � ^O a� N N N ON G' 00 00 V'1 V'1 [� Cl �O OG V'1 O _ " Z. 00 C O N V � 000 000 V'1 Lr) 0 u O O O O O O O O O LZ >0 N N N N N N N N N N 132 O � nmd 133 _O [� [-- v'i 00 [-- N 00 00 N_ M N O 01 a z y a O O O O O O O O O o y z CA a C� 00 0o oo M [ N oo N wU z°aa AW _ W U N 00 01 v'i N (n O N N � N (n Cl O v'i Do O L 00 o zA ISI A � N O 000 0000 O O lr 06 lr O A O b COO a O rr CL N Oa3b0-0 6 O � O Qt 00 M 1p 01 O .may 00 LL y Qt N 00 01 N M Vl 1p �O 00 0 bq U Qt M M M p � � U bJJ C> cC O � 3 b � In UC� Qt I O O O O O O O O O O O O O .. "' 4-i p v N N N N N N N N N N 133 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 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Notes: Principal 6,099 6,700 7,323 8,418 9,354 10,386 13,294 16,465 13,560 12,564 Last Ten Fiscal Years (amounts expressed in thousands) Interest 3,458 3,464 3,556 3,364 3,064 2,889 2,543 2,339 1,903 1,669 Total Debt Service 9,557 10,164 10,879 11,782 12,418 13,275 15,837 18,804 15,463 14,233 Total General Governmental Expenditures and Transfers 93,360 93,639 99,178 102,607 108,950 120,424 119,242 129,814 104,394 111,632 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. 134 Ratio of Debt Service to General Expenditures .10 : 1.00 .11 : 1.00 .11 : 1.00 .11 : 1.00 .11 : 1.00 .11 : 1.00 .13 : 1.00 .14 : 1.00 .15 : 1.00 .13 : 1.00 Name of Governmental Unit City of Iowa City Iowa City Community School District Total Per capita assessed value CITY OF IOWA CITY, IOWA COMPUTATION OF DIRECT AND OVERLAPPING DEBT June 30, 2015 (amounts expressed in thousands, except per capita) Total General Percent Long -Term Applicable Direct Debt to the City of Outstanding Iowa City $ 62,251 100.00 % $ 17,975 $ 80,226 Source: Johnson County Auditor's Office. Amount Applicable to the City of Iowa City Per Capita 62,251 $ 847.9343 56.80 10,210 $ 72,461 $ 139.0664 987.0007 $ 65,745 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. 135 N '-- 69 FA N '-- 69 FA N '-- 69 FA C N 00 M �O vi O M N '-- 69 FA M V1 00 0 N o N '-- 69 FA 00 C 00 0 C 00 r- V O 0 [� m 00 V M 7i 69 FA V1 �D o 00 al 00 [� M � D (V W N M 0o c00 0 Cl N r—D 7t a WC) 7t 69 FA al C D\ o M OO V1 O O �nC) vt a, WC) 7t 69 FA VC V 0 N D ID [— ID O n D �O\ �D o0 [— v� 69 FA E G M YO s. W ro O <d O .y c a G cd G. ctl G. N N Q H ro a H 75 G, d O N O N L U 7 CC O O L _ > o N U y U U G ro C O .ro O 0 U N CL Q� a U N_ H Q a a O N z 0 O � N O � � N i C'i � U W � O CCS Gry .., clt O H A � H V � � W a O O N O O N O O N N '-- 69 FA N '-- 69 FA N '-- 69 FA C N 00 M �O vi O M N '-- 69 FA M V1 00 0 N o N '-- 69 FA 00 C 00 0 C 00 r- V O 0 [� m 00 V M 7i 69 FA V1 �D o 00 al 00 [� M � D (V W N M 0o c00 0 Cl N r—D 7t a WC) 7t 69 FA al C D\ o M OO V1 O O �nC) vt a, WC) 7t 69 FA VC V 0 N D ID [— ID O n D �O\ �D o0 [— v� 69 FA E G M YO s. W ro O <d O .y c a G cd G. ctl G. N N Q H ro a H 75 G, d 136 O z 00 N FA 69 O N L U CC O � � L _ > o U y U U G ro C O .ro O O W U G CL Q� a U _ cl H Q a a 136 O z 137 O O O O O O O O O O O Qr y w O 3 N � o0 00 r xn Ao M O M �O oo CL - - M M_ - U oc — — xr) xr) DD C � w xn O M 00 00 �O N O xn M Il- C1 N 00 01 00 xn N �O N n N Vo O C 00 C1 vi C1 I� � C1 N DD �O 00 00 01 00 00 01 M M 01 N VO N M �n N 00 r--1 l� o � L 0. o xn o oo 0 0 0 0 I� O xn o0 O� N xn xn O M �O V> 00 M M �O M M oo O 0� oo N( I� 00 N O o0 O x n 00 00 V) 00 00 V) Il- O xn 00 00 01 00 7 0 H xn o a o 0 0 0 i Okr) kr) xn xn O M I- 10 M M \O y 00 00 xr) C� 00 N C1 O r O L O xr)0-4 N `O O M 41 7 P. C Ef3 619 O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O CC xn O O xn O O O xn O O O V) ry `O O O M C� O N M O 00 00 O •V 00 N O xr) L 0. %•+ �n `O I� 00 O� O N M xn cj 137 Fiscal Year Ended June 30 CITY OF IOWA CITY, IOWA SCHEDULE OF REVENUE BOND COVERAGE Last Ten Fiscal Years (amounts expressed in thousands) Net Revenue Available for Revenue Expenses' Debt Service Annual Debt Service Ratio of Principal Interest Total Coverage Revenue 2006 4,161 2,380 1,781 320 645 965 1.85 2007 5,035 2,973 2,062 335 626 961 2.15 2008 4,995 2,454 2,541 355 606 961 2.64 2009 5,630 3,024 2,606 370 584 954 2.73 20106 5,509 3,149 2,360 390 504 894 2.64 2011 5,389 2,920 2,469 420 391 811 3.04 2012 4,945 3,034 1,911 500 339 839 2.28 2013 5,122 3,549 1,573 515 324 839 1.87 2014 5,365 2,969 2,396 530 308 838 2.86 20157 5,620 3,828 1,792 540 254 794 2.26 Wastewater Treatment Revenue 2006 12,798 4,260 8,538 3,815 3,390 7,205 1.19 2007 13,708 4,236 9,472 3,905 3,234 7,139 1.33 20086 13,332 4,581 8,751 4,105 3,071 7,176 1.22 20096 13,462 5,202 8,260 4,260 2,813 7,073 1.17 20106 13,174 5,050 8,124 4,205 2,307 6,512 1.25 20116 13,281 5,477 7,804 1,840 2,054 3,894 2.00 2012 13,175 5,663 7,512 4,615 1,693 6,308 1.19 2013 13,301 5,340 7,961 4,865 1,547 6,412 1.24 2014 12,835 5,708 7,127 3,250 1,428 4,678 1.52 2015 12,620 6,574 6,046 3,370 1,305 4,675 1.29 Water Revenues 2006 9,918 5,722 4,196 880 1,305 2,185 1.92 2007 9,220 5,356 3,864 915 1,268 2,183 1.77 20086 9,258 5,348 3,910 955 1,229 2,184 1.79 20096 8,833 5,726 3,107 995 1,171 2,166 1.43 20106 8,336 5,153 3,183 680 1,055 1,735 1.83 2011 8,354 5,464 2,890 1,110 902 2,012 1.44 20126 8,649 5,653 2,996 1,200 861 2,061 1.45 20136 9,342 6,348 2,994 845 758 1,603 1.87 20146 8,613 5,818 2,795 1,335 650 1,985 1.41 2015 8,715 5,632 3,083 1,380 610 1,990 1.55 Notes: ' Excludes depreciation and interest. 2 Includes principal and interest of revenue bonds only. 3 Parking Revenue bonds ratio of "Net Revenue Available for Debt Service" to "Total Annual Debt Service" is required to be at least 1.25. 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 138 CC O C C C C O C O O C O O C C C C C O O C C O C O C O O C O O C C C O O O O O O O O O O O O O O O O O O O O O C O V1 V1 V1 V1 C OC C V1 C V1 V1 O O V1 C O N 10 01 ;- 7 V1 M v O Q\ [- N [- 10 O N •L .0 � y 21 V7 V7 V1 V1 V1 V1 V1 V7 Vl Vl V7 V7 V1 C 10 V1 C C M M M 00 00 N 7 01 [� 10 7 [- N N C O Q\ M N Q\ 00 7 10 [) M 7 V1 7 7 M 10 7 [) O O O O O O O O O O O O O O O U � CC H 69 y n n 0 0 V1 O 17 0 M M 7 ., 7 7 00 00 O 1C L. V1 N Ol Ql V7 Vl [� [� 00 7 [� > O1 00 [� V1 .� 7 01 10 01 M 00 M > 00 00 00 Ql D1 O> Ql D1 Ql Vl V7 V7 Cl a, Q\ Cl 01 D1 a, 0\ a, 7 7 00 L Y CC 3 y C 01 V1 V1 O M M 00 C O C V1 .� C I� [- O 10 �:; 00 V1 V1 V1 [- C, D1 -� n n7 7 N N N N M > L Y Y Gn � O 01 10 M C 01 7 01 N 10 00 vl V1 V1 O vl O 7 M Oi O O vl C M 7 7 M 10 7 -� 00 vl 10 7 7 N N 1L^Vl 1L^ Vl C C O O C C lC I� 00 GO 00 00 00 M 01 V1 7 7 00 N N N N N N F" 7 1p 1p 1p 1p 1p 1L^ 7 M N N ^-� 69 O a, 10 M O --� D1 � D1 N 1C 00 V1 V1 vl O V1 O M CO O 7 N O> M N [- O> CO 0o 01 O O O 10 vl M D1 7 00 .-. 7 [- Y -o M M N O> 10 Vl Ql CO M M N N--� L o0 W 1p C O O C C C C C O O O C O O C C O O O O O C C C C C O O O C O O C C O O O O O O O O O O O O O O O O O O O O O V1 O O O O C C V1 V1 V1 O V1 O V1 vl C C M vl 10 W [- 0 D1 O U V1 V1 V1 V1 V1 V1 7 M N N C L ~ G. 69 � vl 10 [- W C 7 D1 --� N M V1 1p [- 00 01 U n -E --� -o OO C C C C C O O O C O O C C O O O O N N N NN N N N N N N N N N N N N N 139 Fiscal Year Zu1J 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total Fiscal Year LV1J 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Total CITY OF IOWA CITY, IOWA REVENUE DEBT ANNUAL MATURITY BY FUNDING SOURCE Principal $ 7,145,000 Parking Outstanding Interest $ 828,550 S 7,145,000 $ 828,550 Sewer Outstanding Principal Interest S 3,370,000 $ 1,304,900 3,520,000 1,175,119 3,625,000 1,034,575 3,775,000 886,575 3,915,000 731,400 4,090,000 557,463 3,740,000 378,013 2,485,000 232,288 1,220,000 141,250 700,000 93,250 740,000 57,250 775,000 19,375 S 31,955,000 S 6,611,458 140 Total $ 7,973,550 $ 7,973,550 Total $ 4,674,900 4,695,119 4,659,575 4,661,575 4,646,400 4,647,463 4,118,013 2,717,288 1,361,250 793,250 797,250 794,375 S 38,566,458 (continued) CITY OF IOWA CITY, IOWA REVENUE DEBT ANNUAL MATURITY BY FUNDING SOURCE (continued) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Total 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Total Principal $ 1,380,000 1,420,000 1,465,000 1,520,000 1,565,000 1,620,000 1,680,000 1,740,000 1,805,000 1,325,000 1,390,000 835,000 S 17,745,000 Water Outstanding Interest $ 609,515 567,215 522,946 475,903 426,515 374,103 317,571 256,781 191,764 128,847 68,481 18,788 $ 3,958,429 Taxable Urban Renewal Principal S - 130,000 130,000 135,000 135,000 140,000 140,000 145,000 150,000 150,000 155,000 160,000 165,000 170,000 175,000 185,000 190,000 200,000 $ 2,655,000 Outstanding Interest S 75,335 75,335 74,035 72,345 70,185 67,485 64,545 61,325 57,845 53,945 49,745 45,095 39,975 34,365 28,245 21,770 14,925 7,800 $ 914,300 141 Total $ 1,989,515 1,987,215 1,987,946 1,995,903 1,991,515 1,994,103 1,997,571 1,996,781 1,996,764 1,453,847 1,458,481 853,788 $ 21,703,429 Total S 75,335 205,335 204,035 207,345 205,185 207,485 204,545 206,325 207,845 203,945 204,745 205,095 204,975 204,365 203,245 206,770 204,925 207,800 $ 3,569,300 142 •y Hyl 00 r O � N O � O � � T 01 rn O O F � O U p U � p Q C� G U O b-0 U W O b U � b U � U C 0 b o U O 7 Q J-1 > O N p ►w U+ ,�" L1. U U T'+ •b b G G �+ •b LL t� N '- � N t� t� m ,-- v� U 00 O o0 O o0 O, O, 7 q O ^ m CZ U L U z o o v �I S S S o 0 o o U L o o b b b o U P•, R, � r%� W N� n� �� 142 O N 0 0 N O 0. xl --� N M zT V'1 1p [-- 00 O\ a � �lG N 01 O 01 \.0 O O tr) ' N ti ti ti ti ti ti O O � N U Z C a3 N cu �1 v Q, i�l L b-0 W N 0. xl --� N M zT V'1 1p [-- 00 O\ a xla � �lG N 01 O 01 \.0 O O tr) ' to O kr) O C� 00 U a3 N cu �1 Q, i�l b-0 W N W G xla 143 M rO� V O N E O U N Q c: ct 0 3 r o V'1 O N O M O V'1 V'1 O O to kr) O U a3 O cu �1 Q, i�l b-0 N W G 143 M rO� V O N E O U N Q c: ct 0 3 r o U a3 O cu �1 Q, i�l b-0 N G u y U N cu Gq Y C y U N h 14 Q U U C i Cj a� O U �O U U U 113 C y r y U CU ° ' Z d x U va C7 143 M rO� V O N E O U N Q c: ct 0 3 r o Source: City's Financial Plan 144 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 2006 2007 2008 2009 2010 2011 2012 Public Safety Police 94.25 96.25 96.25 103.25 103.25 98 97 Animal Shelter' 6 6 6 6 6 6 6 Fire 57 57 57 57 57 66 65 Inspection Services 14.88 14.88 15.38 15.55 15.55 15.55 15.55 Public Works Public Works Admin 2 2 2 2 2 2 2 Engineering 11.6 11.6 11.35 11.35 11.35 12.1 12.1 Flood Recovery - - - - - 0.4 0.4 Culture and Recreation Parks and Rec Admin 2 2 2 2 2 2 2 Recreation 15.17 15.42 15.42 15.42 15.42 15.42 15.42 Parks 13 13 13 13 13 13 13 Forestry 3 3 3 3 3 3 3 Cemetery 3 3 3 3 3 3 3 CBD Maintenance 3 3 3 3 3 3 3 Library 42.63 42.89 43.14 43.14 43.14 43.14 43.64 Senior Center 6.31 6.31 6.31 6.31 6.31 6.31 6.5 Community and Economic Development 8.45 8.45 8.95 9.05 9.05 9.1 9.1 General Government City Council 7 7 7 7 7 7 7 City Clerk 4 4 4 4 4 4 4 City Attorney 6.6 6.6 6.6 6 6 5.6 5.6 City ManagerZ 3 3 3 3 3 3 3 Personnel 4 4 4 4 4 4 4 Human Rights 2.5 2.5 2.5 2.5 2.5 2.5 2.5 Finance 26.75 26.75 26.5 26.3 26.3 26.24 27.53 Government Buildings 4.96 4.96 4.96 4.96 4.96 4.96 4.83 Energy Conservation 0.5 0.5 0.25 0.25 0.25 - - Transit3 50.5 50.5 54.75 58.5 58.5 56.25 56.25 Special Revenue Employee Benefits 0.39 0.39 0.29 0.29 0.29 0.26 0.55 CIP / Roads 2 2 1 2 2 - - Flood Mitigation Grants - - - - - 1.6 1.6 Community Development 4.35 4.35 3.98 3.88 3.88 3.83 3.83 UniverCity Program - - - - - - - Traffic Engineering 4.15 4.15 4.15 4.15 4.15 4.15 4.15 Streets 23.5 23.5 23.5 25.5 25.5 25.5 25.5 MPOJC (formerly JCCOG) 6.6 6.6 6.6 6.6 6.6 6.6 6.6 Other Shared Revenues - - - - - - - Library Development 1 1 1 1 1 1 1 Capital Project Administration - - - - - 3 5 Internal Service Funds Infonnation Technology 11.75 12 12.3 12.3 12.3 11.3 11.8 Equipment 11.26 11.26 11.26 11.26 11.26 11.26 11.26 Central Services 0.75 0.75 0.75 0.75 0.75 0.75 0.75 Risk Management 1.38 1.38 1.73 1.93 1.93 2.01 1.8 Business -Type Activities Parking 32.75 32.75 32.75 33.25 33.25 32.75 32.75 Mass Transit3 - - - - - - - Wastewater Treatment 25.5 25.5 25.5 25.6 25.6 25.6 25.4 Water 32.5 32 32.75 32.75 32.75 32.75 32.75 Sanitation 33.85 33.85 34.85 34.85 35.85 35.85 37.85 Airport 1.6 1.6 1.6 1.75 1.75 1.75 1.75 Cable Television 6.19 6.19 6.19 6.44 6.44 6.69 6.63 Stormwater 0.5 1 2 1.9 1.9 1.9 2.1 Housing Authority 13.25 13.25 13.25 13.25 13.25 13.25 13.25 Total 605.37 608.13 614.81 629.03 630.03 633.37 637.74 Source: City's Financial Plan 144 2013 2014 2015 103 105 105 65 65 64 15.55 13.55 13.55 2 2 2 12.1 12.1 12.1 0.4 0.38 - 2 2 2 15.42 15.42 15.42 13 13 13 3 3 3 3 3 3 3 3 3 43.63 45.13 45.13 6.5 6.5 6.5 8.4 8.95 8.95 7 7 7 4 4 4 5.6 5.6 5.6 5 6 6 4 3 3 2 2 2 23.47 23.97 22.47 4.83 4.83 4.83 0.55 0.55 0.55 3.33 2.98 2.98 0.2 - - 4.15 4.15 4.15 25.5 25.5 25.5 5.6 5.6 5.6 1.6 1.62 - 1 6 6 5 10.86 9.86 9.86 10.75 10.75 10.75 0.76 0.5 0.5 1.8 1.8 1.8 29.25 26.25 26.25 51.75 51.25 51.25 25.4 24.4 24.65 32.75 31.75 32 37.85 35.85 35.85 1 1 1 6.63 6.63 5.63 2.1 2.1 2.6 13.18 12.19 10.19 623.91 615.16 607.66 I Beginning in FYI 3, Animal Services is reported under Police 2 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 145 C, 7 O\ C m 7 7 r D\ O O M C O M C Cl O O C, 0, 7 'n 00 C --� M r - = O_ N O, O C 'n lO C O ll O C 7 In C M 01 M vi 1p 7 -- N 0o 0o N O C O a, 01 C O--� 'n N D\ --� N M 00 O O 00 C C M O N C Ol of O r 7 N Ol V M N �O M vi N O C C 7 O C 7 — to vl cr 7 C C O of C C Ic O1 C O 'n O O 7 7 7 r 7 D\ O C C O C 7 7 7 oo O C 7 In C oc 7 C_ N M C 7 -- M O r CO O1 C C O1 'n C C C 'n M C O N O C 'n O O 00 C o0 00 O O 7 ,-. N Ol r M M C O1 'n CT In M xn O O M to C 7 In vi o0 00 7 -- O M 'n 10 M C O r C C 'n oo O\ 'n O\ C M C 'n O O N O O r o, IO 'n N C C M 'n r O O 7 'n O -- 'n M Ol o0 0o M 'n 7 7 N oo O O M M C M 'n 7 0o C �O C N 'n o N a C C O r o 7 n 7 7 C r o oc 'n In 'n O o r O o, a ,-• 7 C 7 Io 7t o o m o0 o m In v oo C N 7 C N C C N C r 'n 7 o0 7 7 7 C M N 7 oo 'n r O O C C C O1 N O C Ol 10 'n C oo N 7 C N r C N N M N 'n p n 7 N 'n 7 to 'n r C C- oc O M oo M [� �--� N 'n C oo vi �O M a, 7 oo C O oo 0 0 7 m O N O r 7 cl In N W IO 1p c,4 N , 'n oo Dv N oo C O 10 C C Dv oo D\ O1 r M M C 0 7 O O N C O O C c,4 7 7 m M 00 C N OC O N N � W w v V1 4 b bq � bd G ° —It :d CL CL 'b G b C N on46 ocL z w ca�z L �p4U�0 zF a a o a m- z z 146 147 O rn V1 N N � DD U U O .b N rn O al .. N O O O cd rn al � U U U yO yC N •� syU. sL) CO N sU. rn sU. Hcn O ��w � y aid �d Ua:cna U O 7T N O M I— N M r- N O N N N .-- x M N rn O N 0 rn N N O N M O O O N M � M U � w V M O O O N M O O rn U N O M O W � O H � M 0, rnp ~ ~ N M 00, O O M N 00 N U � N U 00 00 Ln ,--i --i O O N M 0� N V1 O N -- N N O rn N U U O .b N rn al O O O cd rn al y Cd U U U yO yC N •� syU. sL) CO N sU. rn sU. Hcn �ocna ��w � y aid �d Ua:cna 148 r f \ R 7 J -- � fk\ J r< ©K~2 -- @7 r \ � ^f 2k~N $© -- R n- n\ J r < n 't n « 't c _ \ _ f RS \ 3f ) \ r< -mnm T - 3$ m / 2 a \ \ \ r< zonp K 2 \ _ \ \ N m @ N / $ m © 2 R \ ? \ r » z« m n » - z / 110 2 W $ « f K » m % ^ @ �2 ® - S $ - @ Q K- \ r,4 2 r $ m r 2 n< > - o y j / r/ $ m \ \� 4. © / .9 u \ _ cu \ / / \ / / 149 150 Compliance Section Tab EideBailly. CPAs & BUSINESS ADVISORS Independent Auditor's Deport 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 7o the Honorable Mayor and Members of the City Council City of Iowa City, Iowa We have audited, in accordance with auditing standards generally accepted ,'. :�tc:d States of America and the standards applicable to financial audits contained in issticc.. by the Comptroller General of the United States, the financial statements of the governmentai business -type activities, each major fond. and the ag+sregate ren, ,Ming fund information .:'thy C::\ of Iowa City, Iowa, (City) as of and for the year ended Jun:; ; and the related notes -.o the statements, which collectively comprise the City's basic '.: ;r c:41 � al.ements, and have issued our thereon dated December 11. 2015. Internal Control Over Financial Reporting In planning and performing our audit of the financial statemL:::s- ,` coy s:�:_r ,: City's ir,' '. t. 4ontrol over financial reporting (internal control) to determine the audit appropr:_-.°-::^ the circumstances far the purpose of expressing our opinions on t;74 but Pw,.."l- purpose "l -purpose of expressing an opinion on the effectiveness of the Ci cord in :ti. we do not express an opinion on the effectiveness of the City's internal A deficiency in internal the design or operatic:. c)f a cu;arol does not allow management or employees, in r.7•- -al course of performing .::t:: assigned fu::.::: -:s, to prevent, or detect and correct. misstatcr ;rr:. :.'. a timely basis. A material weakness i -,. 2'::" or a combination of deficiencies, in internal control, such that there is a reasonat'% that ;naterial misstatement of the City°s financial statements will not be prcv cnted, or detected and corrected on a timely basis. A significant dcfrc•ienc-v is a deficil:nuy. or a �:o-n'(7,ination of deficiencies, in internal control that is less severe than a material "Neakness, yetir7 i�cT. 4u:,: .: to merit attention by those charged with governance. Our consideration of internal control oe -„ r financla. ; n)orting was for the limited purpose described in the first paragraph of this section and was >t design,:"7 �,',l deficiencies in internal control over financial reporting that might be mater:`: weakn4 ti:y;'..`icti' 1t deficiencies. Given these limitations, during our audit we did not identify an-, deficienci 4 ~ i:.: rr:a: c,tintrol that we consider to be material 'A"eaknesses. However, material weaknesses may exis: 1;.,tt have ,lot been identified. 151 www.eidebcllly.com 1545 Assaciatft Dr., SGC. 103 1 Dubuque, IA 52042.2299 ' T 563.556,1790 F 563.557.7642 EOE Compliance and Other M.2uers As part of obtaining reasonable assurance about whether the City "s financial statements are free from material misstatement, %%: ncrformed tests of its compliance with certain provisions of laws, regulations, contracts, and grant ay=r: �:- ts, noncompliance with which could have a direct and material effect on the determina*.ion oftir.{;;,Y,,;: s.:;tement amoz.rts. However. providing an opinion on compliance with those provision, :.as not an ::'_ctive o` and accordingly, we da not express such an opinion. The resultw : fy c ' r tests disclosed no ins _a :..�, c• :' noncornpliance or other matters that are required to be reports G ' ., : illd1l tT" Sfai .z1; fd$. Comments involving statutory and other legal matters about the City's operations for the year ondcd June 30, 2015, are based exclusively on knowledge obtained from pros ? .:r ; ,7erformed of the financial statements of the City and are reported in part IV ofo:-,-Fanving 5of Findings and Questioned. Costs. Since our audit was based on tests and sampi<�, hat might stave had an impact on the comments were necessarily audited. The corm:c :ts invo[� :..g statutory and other legal matters are not iwt}n&, t^ constitute legal interpretations of those statutes. Purpose of this Report The purpose of this report is solely to describ:: c,;ac : nU.- a of internal control and com-p'. an -12e results of that testing, and not to p t7L t:n op'sniot� c:: .:'. cctiveness of the City`s internal or on compliance. This report is an integre:; part o!" an audit pe, -Fl. rmed in accordance ::rt�mentAtedilingStandards in considering,,'-,., City's internal control and compliance. Lias communication is not suitable for any other p.:rpose. Dubuque, Iowa December i ? . 201; 152 EideBailly C?As & sus00Ss A1)vls09$ Independent Auditor's Report on Compliance for Each Major FtderFnl Program and Report on Internal Control over Compliance Required by 0 V 3 Ci rc 1'.:3 r A-133 To the Honorable Mayor and Members of the City Council City of Iowa City, Iowa Report on Compliance for Each Major Federal Program We have audited the City of Iowa City, Iowa's (City) compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended June 30, 2015. The City's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to -n oplr, on for each -�f City's major federal programs based on our audit of the typQs 0'. o% We condL:,;ted our audit of compliance in accordance with eu l:il ti; .,lil ..'l' ��c:.Graii�' uG� :� ; .:1 ::,'ti of America; the standards applicable to financial a.:� . in Governm-j . , :, , ti. 4 ;,ed by the Comptroller General of the United 5ta-,,:s: and OMB Circuli:- -' ?_ ...... 4 f � ": <, al Governments. and Non -Profit Organizations. Those standards and OMB .1-133 rec;,, : ihat x,,,: plan and perform the audit to obtain reasonable assurance about whet::- - :,encompliance with the Wc�rnplianee requirements referred to above that could have a direct and mazerial effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circurrim ices, 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 the City's compliance. Opinion on Each Federal Program In .:r onin:4., `he C , : ' iowa City, Iowa_ 4c::,. 4;i.:-� ;ill material respects, with the compliance c i y°aunts r . , v Z" ,, !.I at could material effect on each of its major Federal j,;ar ended June 30, 2015. 153 www.eideboifly.com 1545 Assp6c* dr., Ste, 101 1 Dubuque, 1A 520022294 T 563,556,1790 F 563.557:7$42 EOE "tenort on ]Internal Control over Compliance y:'4:+-atementj the City is responsible for establishing and maintaining effective internal control over C'ianze a compliance requirements referred to above. In planning and performing our audit of tonsidcrcd the City's internal control over compliance with the types of requirements that an r- a! effect on each major federal pro,ram to determine the auditing procedures ti late in the circus„stances fo:- .:54 ~ y,< ae of expressing an opinion on compliance for L to te.< and report on ::,_.mal control over compliance in accordance with OV i; Circus; r -1�3, ."; :h.c ;,urpose of expressing an opinion on the effectiveness of internal conl�c:: over compliance.:%c do not express an opinion on the effectiveness of the City's internal control over cornpiiaace. A ck ic•iencv in internl,-2 4•;.r, „r. rr: 4r ;; r177pliance exists when the design or operation of control over Corr.niiLn,c .L4t}�S .,o -L a! low maria` anent or employees, in the normal course of performing their assigned function:;. to prevent. or detect z;"d correct, noncompliance with a type of compliance requir-:rcn, :-fa fcdcr� grogram on a �:mely basis. A material weakness in inicenal control over compliai-� - ;s a dci'.ti i .ncy, o-, , conibination ofde,V Jencies, in internal control over compliance, such that there is a reasonable ;`)Osw bility that mater:sl noncompliance with a compliance requirement will not be preventec . or del.:c cd 6 corrected. on a ti:::ely basis. A significant deficiency in internal control over cornpliam•e: is a of deficiencies, in internal control over compliance with a type of compliance require .,ent of ;grogram that is less severe than a material weakness in internal control c)ver compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose in tnc paragraph of this section and was not designed to identify all deficiencies in inter,.,ai con'. of that nyi+! )Q material weak.csses or significant deficiencies. We did not identify any deficiencies in internal contra over comp --c that we consider to be material weaknesses. However, material weaknesses may exist that have not b4, dentified. 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 OMB Circular A-13 3. Accordingly, this report is not suitable for anv other purpose. Dubuque, Iowa December 11, 20 1; 154 Grantor/Program U.S. Department of Agriculture: Pass-through program from: Iowa Department of Agriculture: Specialty Crop Block Grant Program - Farm Bill City of Iowa City, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2015 Federal Pass -Through CFDA Entity Identifying Number Number 10.170 12-25-B-1670 Federal Expenditures $ 14,650 U.S. Department of Commerce: Direct program: Economic Adjustment Assistance 11.307 962,309 U.S. Department of Housing and Urban Development: Direct program: Community Development Block Grants/ Entitlement Grants 14.218 312,667 Community Development Block Grants/ Entitlement Grants 14.218 221,743 534,410 Pass-through program from: Iowa Economic Development Authority: Community Development Block Grants/ State's Program and Non -Entitlement Grants in Hawaii 14.228 08 -DRI -273 4,066,494 Community Development Block Grants/ State's Program and Non -Entitlement Grants in Hawaii 14.228 08-DRIEF-276 2,334,576 Community Development Block Grants/ State's Program and Non -Entitlement Grants in Hawaii 14.228 08-DRH-010 122,580 Community Development Block Grants/ State's Program and Non -Entitlement Grants in Hawaii 14.228 08-DRHB-225 2,279 6,525,929 155 Public and Indian Housing Public and Indian Housing Section 8 Housing Choice Vouchers Public Housing Capital Fund Public Housing Capital Fund Public Housing Capital Fund City of Iowa City, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2015 Pass -Through Entity Identifying Number Federal Expenditures $ 195,762 128,278 49,804 22,580 396,424 14.850 129,270 14.850 106,236 235,506 14.871 14.872 14.872 14.872 Total U.S. Department of Housing and Urban Development U.S. Department of Justice: Direct program: Crime Victim Assistance/ Discretionary Grant Pass-through program from: Iowa Department of Justice: Violence Against Women Formula Grants Direct program: Bulletproof Vest Partnership Program 16.582 16.588 16.607 7,299,967 90,986 1,685 1,104 93,775 15,086,011 3,131 VW -15 -51 -CJ 63,583 8,257 Public Safety Partnership and Community Policing Grants 16.710 95,067 156 Federal CFDA Grantor/Program Number U.S. Department of Housing and Urban Development: (continued) Direct program: Home Investment Partnerships Program 14.239 Home Investment Partnerships Program 14.239 Home Investment Partnerships Program 14.239 Home Investment Partnerships Program 14.239 Public and Indian Housing Public and Indian Housing Section 8 Housing Choice Vouchers Public Housing Capital Fund Public Housing Capital Fund Public Housing Capital Fund City of Iowa City, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2015 Pass -Through Entity Identifying Number Federal Expenditures $ 195,762 128,278 49,804 22,580 396,424 14.850 129,270 14.850 106,236 235,506 14.871 14.872 14.872 14.872 Total U.S. Department of Housing and Urban Development U.S. Department of Justice: Direct program: Crime Victim Assistance/ Discretionary Grant Pass-through program from: Iowa Department of Justice: Violence Against Women Formula Grants Direct program: Bulletproof Vest Partnership Program 16.582 16.588 16.607 7,299,967 90,986 1,685 1,104 93,775 15,086,011 3,131 VW -15 -51 -CJ 63,583 8,257 Public Safety Partnership and Community Policing Grants 16.710 95,067 156 Grantor/Program U.S_ Department of Justice: (continued) Direct program: Edward Byrne Memorial Justice Assistance Grant Program Pass-through program from: Governor's Office of Drug Control Policy: Edward Byrne Memorial Justice Assistance Grant Program Total U.S. Department of Justice U.S. Department of Transportation: Direct program: Airport Improvement Program Airport Improvement Program Airport Improvement Program Airport Improvement Program Pass-through program from: Iowa Department of Transportation: Highway Planning and Construction Highway Planning and Construction Iowa Department of Transportation and Metropolitan Planning Organization of Johnson County: Highway Planning and Construction City of Iowa City, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2015 Federal Pass -Through CFDA Entity Identifying Federal Number Number Expenditures 16.738 $ 25,794 16.738 12 -JAG -76676 93,520 119,314 289.352 20.106 209,353 20.106 39,468 20.106 6,659 20.106 5,504 260,984 20.205 STP -U-3715(636)--70-52 733,001 20.205 BRM -3715(650)--8N-52 3,676 20.205 15MPO-MPOJC 163,394 900,071 Metropolitan Transportation Planning and State and Non - Metropolitan Planning and Research 20.505 15MPO-MPOJC 35,930 157 City of Iowa City, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2015 Federal Pass -Through CFDA Entity Identifying Grantor/Program Number Number U.S. Department of Transportation: (continued) Direct program: Federal Transit — Formula Grants 20.507 Transit Services Program Cluster: Pass-through program from: Iowa Department of Transportation: Enhanced Mobility of Seniors and Individuals with Disabilities 20.513 New Freedom Program Total Transit Services Program Cluster Iowa Department of Public Safety: Governor's Traffic Safety Bureau: National Priority Safety Programs National Priority Safety Programs Total U.S. Department of Transportation U.S. Environmental Protection Agency Direct program: Urban Waters Small Grants 20.521 IA -16-X005-371-15 IA -57-X009-371-14 20.616 PAP 14-405d-M6OT, Task 27 20.616 PAP 15-405d-M6OT, Task 27 66.440 158 Federal Expenditures $ 1,439,334 116,604 31,786 148,390 7,089 20,547 27,636 2,812,345 23,162 Grantor/Program U.S. Department of Homeland Security: Pass-through program from: Iowa Homeland Security and Emergency Management Division: Disaster Grants — Public Assistance (Presidentially Declared Disasters) Disaster Grants — Public Assistance (Presidentially Declared Disasters) Disaster Grants — Public Assistance (Presidentially Declared Disasters) Disaster Grants — Public Assistance (Presidentially Declared Disasters) Total U.S. Department of Homeland Security Total City of Iowa City, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2015 Federal Pass -Through CFDA Entity Identifying Federal Number Number Expenditures 97.036 FEMA -1763 DR -IA $ 1,277,233 97.036 FEMA DR -41874A 338,872 97.036 FEMA DR -4119 -IA 33,641 97.036 FEMA DR -4126 -IA 76 1,649,822 $ 20,837,651 See Notes to the Schedule of Expenditures of Federal Awards 159 City of Iowa City, Iowa Notes to the Schedule of Expenditures of Federal Awards Year Ended June 30, 2015 Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of the City of Iowa City, Iowa, and is presented on the modified accrual basis of accounting for governmental funds and the full accrual basis of accounting for proprietary funds. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. The City received federal awards both directly from federal agencies and indirectly through pass-through entities. Federal financial assistance provided to a subrecipient is treated as an expenditure when it is paid to the subrecipient_ Note 2 - Significant Accounting Policies Governmental and proprietary fund types account for the City's federal grant activity. Therefore, expenditures in the schedule of expenditures of federal awards are recognized on the modified accrual basis — when they become a demand on current available financial resources in the governmental fund types and on the full accrual basis — when expenditures are incurred in the proprietary fund types. The City's summary of significant accounting policies is presented in Note 1 in the City's basic financial statements. Note 3 - Subrecipients Of the federal expenditures presented in the accompanying schedule of expenditures of federal awards, the City provided federal awards to subrecipients as follows: Program Title Specialty Crop Block Grant Program - Farm Bill Community Development Block Grants/Entitlement Grants Home Investment Partnerships Program Edward Byrne Memorial Justice Assistance Grant Program New Freedom Program M141 Federal Amount CFDA Provided to Number Subrecipients 10.170 $ 14,650 14.218 207,600 14.239 69,359 16.738 68,290 20.521 31,786 Part I: Summary of the Independent Auditor's Results: Financial Statements Type of auditor's report issued Internal control over financial reporting: Material weaknesses identified Significant deficiencies identified not considered to be material weaknesses Noncompliance material to financial statements noted? Federal Awards Internal control over major programs: Material weaknesses identified Significant deficiencies identified not considered to be material weaknesses Type of auditor's report issued on compliance for major programs: Any audit findings disclosed that are required to be reported in accordance with OMB Circular A-133 §.510(a): Identification of major programs: Name of Federal Program Community Development Block Grants/ State's Program and Non -Entitlement Grants in Hawaii Section 8 Housing Choice Vouchers Disaster Grants - Public Assistance (Presidentially Declared Disasters) Dollar threshold used to distinguish between type A and type B programs: Auditee qualified as low-risk auditee? Part II: Findings Related to the Financial Statements: There were no findings to report. 161 City of Iowa City, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2015 Unmodified No None reported No No None reported Unmodified No CFDA Number 14.228 14.871 97.036 $ 625,130 No City of Iowa City, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2015 Part III: Findings and Questioned Costs for Federal Awards: There were no findings and questioned costs to report. Part IV: Other Findings Related to Required Statutory Reporting: 2015 -IA -A Certified Budget — Disbursements during the year ended June 30, 2015, did not exceed the amount budgeted. 2015 -IA -B Questionable Expenditures — We noted no expenditures that we believe may fail to meet the requirements of public purpose as defined in an Attorney General's opinion dated April 25, 1979. 2015 -IA -C Travel Expense No expenditures of City money for travel expenses of spouses of City officials or employees were noted. 2015 -IA -D Business Transactions — Business transactions between the City and City officials or employees are detailed as follows: Name, Title, and Transaction Business Connection Description Amount Art Bettis, Spouse of Brenda Nations, Sustainability Coordinator, Landfill Consulting Services $ 1,500 In accordance with Chapter 362.5(3)0) of the Code of Iowa, the transaction with the Sustainability Coordinator does not appear to represent a conflict of interest since total transaction with the individual did not exceed $1,500 during the fiscal year. 2015 -IA -E Bond Coverage — Surety bond coverage of City officials and employees is in accordance with statutory provisions. The amount of coverage should be reviewed annually to ensure the coverage is adequate for current operations. 2015 -IA -F Council Minutes No transactions were found that we believe should have been approved in the City Council minutes but were not. 2015 -IA -G Deposits and Investments — No instances of non-compliance with the deposit and investment provisions of Chapters 12B and 12C of the Code of Iowa and the City's investment policy were noted. 2015 -IA -H Revenue Bonds No instances of non-compliance with the provisions of the City's revenue bond resolutions were noted. 2015 -IA -I Urban Renewal Annual Report — The urban renewal annual report was properly approved and certified to the Iowa Department of Management on or before December 1. 162 Findings Related to the Financial Statements: There were no findings reported. Findings Related to the Federal Programs: There were no findings reported. 163 City of Iowa City, Iowa Corrective Action Plan Year Ended June 30, 2015 There were no prior year federal findings. 164 City of Iowa City, Iowa Summary Schedule of Prior Federal Audit Findings Year Ended June 30, 2015 MINUTES PRELIMINARY PLANNING AND ZONING COMMISSION JANUARY 7, 2016 — 7:00 PM — FORMAL EMMA HARVAT HALL — CITY HALL MEMBERS PRESENT: Carolyn Dyer, Charlie Eastham, Ann Freerks, Mike Hensch, Phoebe Martin, Max Parsons, Jodie Theobald MEMBERS ABSENT: STAFF PRESENT: Sara Hektoen, Karen Howard, Bob Miklo, Martina Wolf OTHERS PRESENT: Duane Musser, Greg Hamilton, Frank Mitros, Doug Schnoeblen, Monica Maloney-Mitros, Michael Smith RECOMMENDATIONS TO CITY COUNCIL: By a vote of 7-0 the Commission recommends approval VAC15-00008, a vacation of approximately 12,884 square feet of Herbert Hoover Highway right-of-way. The meeting was called to order at 7:00 PM. PUBLIC DISCUSSION OF ANY ITEM NOT ON THE AGENDA: There were none REZONING/DEVELOPMENT ITEM (REZ15-00023/SUB15-00031): Discussion of an application submitted by Steve Kohli for a rezoning of approximately 9.33 - acres from Low Density Single Family (RS -5) zone and Medium Density Single Family (RS -8) zone to Planned Development Overlay (OPD -8) zone and a preliminary plat and sensitive areas development plan for Pine Grove, a 12 -lot residential subdivision with 10 single family lots and 44 multi -family dwellings located south of Lower West Branch Road between Scott Boulevard and Hummingbird Lane. Miklo began the staff report showing images of the property, there are currently three structures on the property, a house, garage and stable. Those three structures will be removed as part of this project. The western portion of the property is currently zoned Medium Density Single Family (RS -8) and the eastern portion is zoned Low Density Single Family (RS -5). The proposal is to rezone the entire property to Medium Density Single Family (RS -8) and then apply a planned development overlay to the property and the also to subdivide the property into 12 lots. The eastern portion of the property would contain 10 single family lots, and the western portion is would cluster the development into three buildings. Two townhouses style buildings with four units in each and one 36 unit apartment building with parking below. The eastern portion would be developed at a lower density than allowed by the current RS -5 zoning, but the density would Planning and Zoning Commission January 7, 2016 — Formal Meeting Page 2 of 13 be transferred to the western portion where clustering of the units will allow the preservation of the woodlands. Miklo showed images of the proposed buildings in the cluster development area. Miklo said that the Planned Development Overlay Zone is utilized to permit flexibility in the design, placement, and clustering of buildings. The OPD zone is also intended to allow creativity and the preservation of unique features (historic properties, environmental features, etc.). In this situation the northwest corner of the property would be preserved and turned over to a homeowners association and maintained as open space. There are also other trees that would be preserved with this development along Lower West Branch Road. Miklo pointed out the various trees throughout the development that would be preserved. Some of the trees along Hummingbird Lane would need to be removed to allow the construction of Pine Grove Lane, as well as some trees to allow for house construction and driveways. The bulk of the trees in the middle of the property would be removed for the construction of the multi -family buildings. Parsons asked when this property was annexed into the City. Miklo believes it was annexed sometime after 2000. Miklo noted there are a series of criteria the Commission should consider for Planned Development zones. Probably the most important is the Comprehensive Plan for this area. The Northeast District Plan does depict single family along Hummingbird Lane and then transitioning to some sort of multi -family along Scott Boulevard. So it is Staff's opinion that this does comply with what is shown in the Comprehensive Plan. The other aspect of this development is the sensitive areas plan. Because this property is over two acres of woodland there is a requirement that 50% of the woodland be preserved or if more than 50% is disturbed than replacement trees must be planted. In this case the proposal is to remove 52% of the trees. Those additional 2% trees would need to be replaced at a ratio of 1 tree per 200 square feet of land woodland disturbance. Staff does believe this does comply with the objectives of the sensitive areas ordinance and the planned development criteria. Staff originally recommended that this item be deferred, given an issue with stormwater management that hadn't been resolved with the City Engineer, however that has since been resolved. The majority of the property drains to the south and west and there is a large detention basin that the engineers confirmed will suffice for a bulk of this property. The lots that front onto Hummingbird Lane will drain to the north and east and the stormwater sewers along Hummingbird Lane have the capacity to accommodate the proposed development. Staff is recommending approval of REZ1 5-00023/SUB1 5 -00031, a rezoning of 9.33 acres from Low Density Single Family Residential (RS -5) and Medium Density Single -Family Residential (RS -8) to Planned Development and Overlay Zone (OPD -8), and a Preliminary OPD Plan and Plat of Pine Grove, a 12 -lot residential subdivision with 10 single family lots and 44 multi -family dwellings located south of Lower West Branch Road between Scott Boulevard and Hummingbird Lane. Eastham asked for clarification about the sidewalks within this subdivision connect with the external sidewalks, and if additional sidewalks could be constructed within the subdivision to connect with Scott Boulevard. Miklo replied that there is currently a sidewalk on Scott Boulevard, another on Lower West Branch Road and one on Hummingbird Lane. The new street, Pine Grove Lane, will have sidewalks on both sides connecting into that network. The building that fronts onto Scott Boulevard will have sidewalks to Scott Boulevard and the individual townhouses will also have individual sidewalks back to the street. There are also sidewalks from the Pine Grove to the 36 -unit building along Scott Boulevard. Planning and Zoning Commission January 7, 2016 — Formal Meeting Page 3 of 13 Eastham asked if there was any consideration by Staff to installing some kind of paved path into outlot A so that it would be an accessible outlot. Miklo said that was not discussed, the concern would be not disturbing the root systems of the trees. He said he would check with the City Forester to see if a sidewalk might be possible without damaging the trees that are to be protected. Freerks asked if there was bus service out to this area. Miklo said there is on Rochester Avenue and Scott Boulevard. Eastham asked which elementary school attendance area this subdivision would be. Miklo believes it would be Lemme Elementary. Freerks opened the public hearing. Duane Musser (MMS Consultants) noted they were approached by Steve Kohli (Kohli Construction) in October and began working on some concepts and working with City Staff. They also held a good neighbor meeting. One of the original concepts did have a cul-de-sac design rather than a through -street hooking Hummingbird Lane to Lower West Branch Road. Staff said that a cul-de-sac design could not be supported so they went with the through -street design. The applicant did want to make the lots sizes compatible with the lot sizes along Hummingbird Lane instead of using the smaller RS -8 or RS -5 sized lots. Therefore a small single family lot is around 12,000 square feet, and the largest is 25,000 square feet. Musser noted all the public utilities are already in place in the area (water, utilities, etc.). The stormwater retention basin was sized in agreement with the seller and the City when Scott Boulevard was installed and sized for this type of infill project to be developed. The City Engineer has determined that the drainage to the north and east is adequate. As far as the proposed uses, the townhouses will be approximately 1600 square foot units, two story, three bedrooms with rear loaded two car garages. The 36-plex unit will be approximately 1200 square feet units, two to three bedrooms. Perhaps the upper level being larger more custom units, penthouse style. The garage is underground, below the building. Musser said they are trying to do minimal grading to protect the existing trees. Each single-family home will be custom designed to protect the trees on each lot. Freerks asked if there would be fencing around the protected areas, for the trees, during construction. Musser confirmed that yes, an orange safety fence will be constructed to protect the trees during construction. Miklo recommended a note be added to the plat requiring City Forester approval of the tree protection plan prior to construction. Freerks also asked about the single family lots and the trees along the back lot lines and along Hummingbird Lane, where would the homes be placed on these lots to not disturb the trees and perhaps if shared driveways were considered. Specifically lots 7-10 on the plan. Freerks noted that in the past with planned development overlay requests they have required maximum home footprints for each lot before approval. Theobald asked about the topsoil, there has been a change at the State level on four inches of topsoil being replaced. Musser said they have no intention of grading any of the single family lots more than to just to build the city street. Any topsoil disturbed would be replaced and will make that part of the construction plan bid design. Theobald questioned what the definition of penthouse was for this development. Musser said that he is unable to give details at this point. She also said the building is all vinyl siding and Planning and Zoning Commission January 7, 2016 — Formal Meeting Page 4 of 13 asked if there was a possibility of some other upgrade such as fiber cement board. Musser said he could entertain that idea and pass it along to the applicant. Eastham noted a comment received via email from a neighbor regarding considering Pine Grove Lane connecting to Lower West Branch Road and then to Scott Boulevard. Could that be done? Musser said that in some of the earlier meetings with City Staff they were told there wouldn't be access to Scott Boulevard for this development. Miklo confirmed, noting the policy is minimize the number of streets that intersect with Scott Boulevard. He also said it would be problematic given the grade in that area. Greg Hamilton (260 Hummingbird Lane) attended the good neighbor meeting. In this proposal he is happy to see the larger single family lots, particularly on the Hummingbird side, and the greater density of development towards Scott Boulevard. He does have a couple concerns with the proposal as stated, and a couple suggestions on how to resolve them. One concern is regarding the density of the development and rezoning the whole area into RS -8. As the Staff Report noted all of the single family lots are considerably larger than either RS -8 or RS -5 would require but rezoning the entire 9 acre property to RS -8 is used then to justify a greater density on the Scott Boulevard side for a 36 unit apartment complex. He said the staff report notes that if the RS -8 zoning is approved then you have essentially a density of 5.8 units for each of those 9 acres which is greater than the 5.2 density that is historical. Using historical numbers he believes 48 units rather than 54 would be more appropriate which would mean that even if an apartment complex was approved it would be downsized. If the existing zoning is kept with an RS -8 strip along the Scott Boulevard side and the rest kept at RS -5 the density would be more consistent with the rest of the neighborhood with 38 units, if RS -5 density is similar to the lots already in the area, about 11,000 square feet. Overall he does not have a problem with the single family houses in an RS -5 area, and no problem with the four-plexes and he wouldn't have a problem in principle with a larger unit along Scott Boulevard, but something more sized around 20 units rather than 36. The current proposal for the large building is 280 feet long and three stories high so it is a substantial building and the Comprehensive Plan did not contemplate such a large building. While there are other apartment complexes in the area, for diversity he feels they do not need strips and strips of apartment complexes up and down Scott Boulevard. There is no lack of apartment complexes on the east side of Iowa City. Hamilton noted the other problem he has is with Pine Grove Lane, he could rather have a cul-de- sac and the Northeast District Plan contemplates that cul-de-sacs are appropriate and they see them all over the eastside. The District Plan talks about conventional subdivision design and says those are often used to make extensive use of cul-de-sac street design. In the design standards it states a cul-de-sac should be less than 900 square feet from the bulb to the adjoining street and this would be significantly less than that. The Northeast Neighborhood plan includes conservation design and talks about protection of sensitive and environmental features by development of things like cul-de-sacs and single - loaded streets (where development is on one side of the street and sensitive areas are protected on the other). The very first principle in the Northeast District Plan talks about preserving the natural beauties and one of the strategies they mention for that is to encourage single -loaded streets. What is essentially on Hummingbird Street is a single -loaded street with development on the east side and a fence line preserving trees right behind it. Hamilton believes there could be the potential in the open space design to protect many of those. Planning and Zoning Commission January 7, 2016 — Formal Meeting Page 5 of 13 The Staff Report noted that for a development of this size, a little over 15,000 square feet of open space would need to be provided or a fee comparable to that value of that property provided. The eastern border along Hummingbird Lane is 565 feet so if 27 feet of depth was protected that would protect the mature trees. The problems he has with Pine Grove Lane going through is a practical problem in terms of other opportunities it creates for construction. According to the zoning code, duplexes become appropriate on a corner lot and there now becomes a corner at lots 6 and 7 so those could become eligible for duplexes. That would not be consistent with uses on either side of the street. The lots are all large enough that if there is a corner there could be duplexes with either a RS -5 or RS -8 zoning. He also feels there is a safety issue with traffic flow, the Staff Report noted that the Comprehensive Plan suggested that higher density housing should be at an intersection of something like an arterial road (like Scott Boulevard) and collector road (like Lower West Branch Road). In this situation, having high density traffic to the high density units would have to go through Hummingbird Lane, Pine Grove Lane and the lower density housing area. Hummingbird Lane is only 24 feet wide, current design standards suggest 29 feet would be preferable for a subdivision local road. Miklo noted that design standards state 26 feet. Hamilton noted that some of the homes on Hummingbird Lane that are set closer to the street use the street for parking and therefore two-lane traffic is unavailable in those areas. The City Planners anticipate 390 car trips a day and Hamilton feels it will be much greater during the busy times of the day, especially when it is more difficult to make a left hand turn off Lower West Branch Road. He noted that there are many events that take place in this area of town, runs, bicyclists, etc. that would be endangered by the additional traffic. He reiterated that he does not agree with access to a 54 until subdivision to be from Hummingbird Lane. He supports either a cul-de-sac or to have Pine Grove Lane connect to Scott Boulevard. Frank Mitros (290 Hummingbird Lane) agrees with Mr. Hamilton's points and they know this area was going to develop and in many ways this alleviates his fears, but there are still some concerns. He likes the single family dwellings along the eastern part of the boundary. He sent an email yesterday stating his concerns of safety, drainage, and esthetics. The two intersections he is most concerned about where Hummingbird Lane meets Scott Park Drive, it is a very awkward angle, especially with as narrow as Hummingbird Lane is and there are people who will park there. With increased traffic that will be increasingly difficult to maneuver. Likewise the intersection of Lower West Branch Road and Scott Boulevard is difficult. It is an odd angle, especially if you are headed south onto Scott Boulevard and turning onto Lower West Branch Road. At points during the week with traffic due to St. Patrick's Church it can be extremely difficult there. Mitros noted he would have also preferred the cul-de-sac plan. In terms of drainage when he first moved to Hummingbird Lane (and it was chip seal road) during heavy rains his sump pump would be running so much he had to put in a back up to create sufficient drainage. When Hummingbird Lane was improved, that initially improved his drainage but with continued development they are almost back to where they began. He is worried about the drainage from this new subdivision to the north and east and the runoff. Finally, in terms of the esthetics he appreciates the plan is to try and preserve as many trees as possible however it is unfortunate that the most beautiful trees are the ones that run along the eastern boundary. Perhaps there is not a way to preserve those. Planning and Zoning Commission January 7, 2016 — Formal Meeting Page 6 of 13 Mitros also noted his concern the neighborhood hasn't really had a chance to react as this came up at a time of year when people are traveling and busy. He knows that the regulation is anyone within 300 feet gets a letter, but anyone living on Hummingbird Lane is going to be significantly affected by this. The last two houses on the east side and ten houses on the west side further down of Hummingbird Lane were not notified. Doug Schnoeblen (210 & 240 Hummingbird Lane) owns the property with the two lots directly across from the proposed development. He missed the good neighbor meeting so appreciates the opportunity to talk to the Commission this evening. He appreciates the work done on this proposal to save some of the trees and the character of the neighborhood. When he purchased his land and divided it into two lots he could have divided it into much smaller lots but rather than do that he wanted to preserve the character of the neighborhood which is very unique. The road to the new subdivision is a concern for him because it dumps right in front of his lot and the trees along there are very beautiful. He also would have preferred a cul-de-sac and agrees with his neighbors Hamilton and Mitros. He is a hydrologist by profession and very cautious about the environment and hopes the Commission takes these concerns into mind. Monica Maloney-Mitros (290 Hummingbird Lane) stated that she watched Lou Frank plant the trees on the property in question and it is just gorgeous in the fall and spring, really all year long. She feels his intent was to have a preserve in that area. She appreciates the applicant looking at saving as many trees as possible, but has a question on the percentage of trees that will be destroyed. Miklo stated it would be 52% and her question is if that includes anything along Hummingbird Lane. Miklo clarified that there are two types of trees according to how the sensitive areas ordinance treats them on this property. The woodland (a grouping of trees 2 acres or larger): the ordinance requires that 50% of woodland be preserved. If a developer requests to go over the 50% it requires City Council approval and replacement for anything over the 50% being removed. This property also contains groves of trees (small groupings of trees) including the trees along Hummingbird Lane. There is not a percentage requirement for groves of trees, the ordinance encourages protection of groves to the extent possible. The percentage that is referred to in the Staff Report is the larger woodland area. Maloney-Mitros asked if that was where the apartment building was to be located and Miklo confirmed that was correct. Maloney-Mitros then wanted to address the safety issue and asks that the Commission not make any immediate decision but to look at Hummingbird Lane. If one drives south on Hummingbird Lane it curves considerably to the west so that when it meets the curve of Scott Park Drive it is a curve meeting a curve and from any direction it is difficult to not go into another lane. So to increase the traffic using that intersection daily would be a real safety hazard. Additionally Maloney-Mitros noted that her recollection as to why Hummingbird Lane was planned the way it is was in an effort to preserve it as a neighborhood, low density traffic area. That was part of the negotiation that went into the annexation. She also suggests there needs to be an exit from the new subdivision onto Scott Boulevard to alleviate traffic issues. A similar example is the new development at the corner of Scott Boulevard and Muscatine Avenue. She reiterated her husband's concerns of safety, environment, and drainage and asks that the Commission not rush into a decision on this proposal. Michael Smith (3620 Lower West Branch Road) stated he lives across where Pine Grove Lane will exit onto Lower West Branch Road and is also concerned about traffic and would prefer Planning and Zoning Commission January 7, 2016 — Formal Meeting Page 7 of 13 another exit as well, ideally onto Scott Boulevard. He would prefer not to have 350 cars coming directly at his house every day. Musser replied to a couple of the concerns raised in the public comment. With regards to duplexes, there was some access restriction requirements by the City for the corner lots so for example lot 10 can only have access to Pine Grove Lane, no vehicular access to Lower West Branch Road. The same for lot nine, only access to Hummingbird Lane, lots 6 and 7 can only have access to Pine Grove Lane so there is no intent by the developer to build zero -lot duplexes and those restrictions would be part of the final plat. Public open space is out of the control of the developer, the City Parks Department will determine that. Musser reiterated that one of the first proposals they took to the City was a cul-de-sac design and was deterred from that. However it is the developers concern to preserve trees and minimize the grading of the public street and it will not "balance" as many streets are required to do, however that will maximize the number of trees preserved. They are trying to match the character of the neighborhood, the wooded lots that are across the street on Hummingbird Lane, and save the trees as much as possible. One of the neighbors commented on dividing property into smaller lots, and the developer has that option today under the current zoning however that is not what they are looking to do, they want to preserve the larger lots and be consistent with the neighborhood. Miklo noted there were three questions that came up from the Commission, one Musser answered which was putting an note on the plat stating the City Forrester would approve the tree preservation plan, the other was a request in upgrade for siding on the apartment buildings, and the third was if a maximum footprint could be set for lots 7-10 on the plat. Freerks also wanted to see if shared driveways could be utilized. Musser said lots 6 and 7 will access off of Pine Grove Lane so that will save those trees. Freerks wants to see that on the plat along with the footprints. Musser said that they could look at a shared driveway for lots 8 and 9. Miklo clarified that the zoning code allows duplexes on corner lots but each duplex has to face a different street, so with the driveway access restrictions set on these lots to preserve trees, duplexes would not be possible. Eastham asked that since this is a Planned Development Overlay then what will be built is what is approved on this plat correct. Miklo stated that was correct, the overlay plan is for a specific density. Eastham asked if there was any leeway in Pine Grove Lane and the intersection with Hummingbird Lane in terms of preserving the trees that are there. Musser said they were limited to where the road could be placed due to two existing intakes that are directly south of the proposed access. When they designed the street they did try to line up with where garage access would be on a home built Hummingbird Lane as to minimize headlights on a house. Miklo added that regardless of where Pine Grove Lane intersects it is going to take out a few trees. The City Forrester did visit the site yesterday and he noted that a couple of the larger maples in this area weren't pruned correctly and so they are susceptible to splitting in a storm. Musser did request the Commission not defer the vote on this proposal due to time constraints on the project. Freerks closed the public hearing. Eastham moved to defer item REZ1 5-00023/SUB1 5-00031 until the January 21, 2016 meeting. Planning and Zoning Commission January 7, 2016 — Formal Meeting Page 8 of 13 Dyer seconded the motion. Freerks noted it is always complicated when there are beautiful areas such as this one so the idea is to work together with the applicant and the City standards to come up with the best possible solution. Freerks noted there are many positives, but she is interested in the details such as the footprints, possible shared driveways, and to minimize the impact on the residents of Hummingbird Lane. She noted there was a lot of talk about cul-de-sac but she feels the proposal as drawn is a better solution. Hensch asked what the purpose of the deferral is. He is not interested in having the developer decide footprints of the homes that should be up to the individual home purchasers. Freerks said they are not asking for actual footprints, but the maximum area of the home so they can see how much of the land and/or trees will be disturbed. She recognized that some trees will need to be removed and it is better to know that now rather than approve this plan and have the community surprised at the extent of tree removal when this is built. Identify maximum footprints and driveway locations would help clarify that. Parsons asked if those type of things are negotiated at the time of final plat. Miklo said with and Planned Development Overlay rezoning, what the Commission votes on and sends to the Council becomes the approved plan. So if the Commission is able to come up with wording to address the issues that could be added as a condition of approval. Hektoen said it is more in the condition of the rezoning that those type of issues can be discussed and addressed as public needs. Hensch noted he is in favor of the City Forrester approving a tree protection plan, as well as preserving the topsoil and always concerned about stormwater (which has been addressed). Miklo said that if the Commission wanted to vote tonight with conditions added to address their concerns, possible conditions for approval could be the City Forrester approving the tree preservation plan, and even setting a maximum footprint for each lot, however the issue of the shared driveways will need time address if feasible. He would want the City Forester to look at the driveway locations to see if it is better to have individual drives or shared drives to avoid tree damage, so he would not recommend shared driveways as a condition at this time. Eastham added he would also like to hear a report from the Traffic Engineers on the probable or expected routes people will take for access to this subdivision. Miklo said the Transportation Planners did look at that and given destination points they feel the majority of traffic will go to the west. Parsons asked if Hummingbird Lane was on any of the street improvement plans for the future. Miklo said it was not because it was recently improved. He noted that the concern about the intersection, it is a T -intersection and the Transportation Planners looked through records and in the time they reviewed there had been zero accidents reported. It was designed that someone coming up Scott Park Drive isn't likely to turn onto Hummingbird Lane, and that is why there is the kink in the design. Freerks did note this was a good example of transitioning the neighborhood. Eastham agreed and says it follows the plan to incorporate multi -family and single-family together. A vote was taken and the motion carried 7-0. Planning and Zoning Commission January 7, 2016 — Formal Meeting Page 9 of 13 VACATION ITEM VAC15-00008: Discussion of an application submitted by CBD, LLC for the vacation of an approximately 15 - foot wide portion of Herbert Hoover Highway located adjacent to Churchill Meadows - Part One. Wolf presented the staff report stating the request is for a 15 foot portion along the right of way of Herbert Hoover Highway to the north of Churchill Meadows. The vacation is requested to allow the applicant to combine the 15 feet of excess right-of-way with the adjacent residential lots. Typical arterial street right-of-ways are 100 feet. The right-of-way of Herbert Hoover Highway in this area ranges from 135 feet to 160 feet wide. Vacating the requested 15 foot wide portion will leave sufficient right-of-way for public needs and will also make the width more consistent with adjacent areas. No utility, emergency or service will be impacted due to this vacation. It will not impede on any vehicular or pedestrian traffic. This portion of right-of-way along Herbert Hoover Highway is not utilized for access or circulation. Letters were sent to MidAmerican, Centurylink, and Mediacom to see if utilities are present along this portion of the right-of-way of Herbert Hoover Highway and the City received no notification from any of those companies. Staff recommends approval of VAC15-00008, a vacation of approximately 12,884 square feet of Herbert Hoover Highway right-of-way. Eastham asked who owned this section of Herbert Hoover Highway before it was annexed into the City. Miklo said in most cases in Johnson County the county has an easement over private property for roads, but in this case the County actually owned the portion of the highway. Hektoen said by approving this the City is vacating its property interest. Miklo believes this land was dedicated as right-of-way when Herbert Hoover Highway was annexed. Freerks opened the public hearing. Seeing no one, Freerks closed the public hearing. Hensch moved to approve VAC15-0008, a vacation of approximately 12,884 square feet of Herbert Hoover Highway right-of-way. Parsons seconded the motion. A vote was taken and the motion carried 7-0. Miklo noted that in the previous agenda item Eastham had asked about a sidewalk access to the outlot area and wanted to make sure the applicant had that on their list to address at the next meeting. PRESENTATION OF PROJECTS INTHE RIVERFRONT CROSSINGS DISTRICT Howard noted there are quite a few things going on in Riverfront Crossings, many which the Commission may have seen, but since particularly the South Downtown portion of Riverfront Crossings was blanket rezoned early on to get things started there are some projects going on in that area that the Commission may not be aware of. Planning and Zoning Commission January 7, 2016 — Formal Meeting Page 10 of 13 Howard showed a map of the area, with some photos and drawings of buildings. Starting in the north there is the new University of Iowa School of Music building, across Clinton Street will be the new University of Iowa Art Museum. The University of Iowa has not unveiled the design of that building yet, but there are discussions of making that portion of Clinton Street as a festival street, with the possibility of being shut down for special events. That can lead to the streetscape plan for Clinton Street which is supposed to be the "spine" that will run from downtown to the new Riverfront Park. The private development that is occurring there is the Hilton Garden Inn and adjacent to the City's parking structure there (the Mod Pod building) are plans to redesign that corner. All three properties (UI Museum site, Hilton Garden Site, and Mod Pod site) are owned by the same developer so should be designed in conjunction. Down the hill on Burlington Street there is a potential project for a student housing development. It is perfectly located for student housing, 316 Madison Street, across from the UI Recreation Center. The former St. Patrick's Church site is now owned by the City and after a request for proposals there is a 15 story apartment building along with a Hyatt Hotel going up there. The MidWestOne building is completed and occupied. The City was very pleased that MidWestOne was willing to keep both their headquarters and mortgage center downtown and not move it out to the edge of town somewhere. Right next to that new building is the proposal for the City's parking facility and some townhomes that will line that parking facility. On the west side of the river, you can see Kevin Hanick's building going up and that will transform Riverside Drive. There will also be the new Kum and Go on the corner and Brueggers Bagels across the street. The City is in the process of creating a streetscape for Riverside Drive to try to improve pedestrian traffic and the aesthetics along Riverside Drive. Parsons asked if the City is looking for new occupants for the current Kum and Go site, assuming that will be torn down once the new Kum and Go location is built. Howard said Kum and Go has not revealed what they will do, but she assumes they will not want to have two stores that close together. She what happens there will be up to a private developer provided it complies with the Riverfront Crossings Plan. Eastham asked with the improving of Riverside Drive would the railroad treacle be repainted. Howard said it is in the proposal to paint the railroad overpass. Howard said back over on the east side of the river, she forgot to mention the preservation of the Tate Arms building and transfer of development rights to the adjacent new apartment building. She said it would have nice views of the new park site. Hensch mentioned the new ambulance/medical services building, and Howard noted that yes they have seen some renderings of what that new building will look like (at 800 South Dubuque Street). Martin asked about the old Mumm's Bar location, and if there was a timeline from when the Commission talks about projects to when they must be implemented. Howard said that particular project was very difficult to engineer, and after it went through the Planning and Zoning Commission and was approved, the applicant withdrew the application before it went to Council. So the rezoning was never approved. The applicant says they are still planning on doing something there however not sure what, but it would have to come through the Commission again since the rezoning was never seen or approved by Council. Planning and Zoning Commission January 7, 2016 — Formal Meeting Page 11 of 13 Howard then showed the Commission some photos and renderings of buildings. First was the proposed building for 316 Madison Street, the student housing building. It was originally going to be a high-rise but after doing some cost estimates on that the applicant decided to redesign it as a seven story building, or possibly a five story building depending on costs. The plan is to have a rooftop patio and the ground floor will have restaurant space. Next Howard showed a drawing of the Hilton Garden Inn that was approved by design review. The hotel will be 12 stories with a nice rooftop venue on top and amenities such as a pool and conference center. Next she showed the student housing complex, which is full of amenities as well. Dyer and Martin commented on the cost of such units for students, and Martin noted that with the changes at Hawkeye Court there is very little affordable student housing now. Howard said this project will contribute $1 million to the affordable housing fund, and 10% of the units in the building will be affordable. Howard then showed the other tower of the project, which would be the Hyatt hotel tower with some retail space as well. On the second or third floor of the student housing tower there will be an open courtyard space facing west that will be for exclusive use of the residents. The Hyatt will also have some outdoor space on their rooftop, possibly with a pool. Howard then showed the MidWestOne Bank photo, which is now complete and open. They were going for platinum LEED certification, but was not sure if they achieved that. All the windows on the south side of the building collect the light and generate electricity. There are also solar panels on the roof. Right next door to that is the City parking facility, which will eventually be a lease to own parking facility. The townhomes that line the parking facility are stacked townhomes with access from the parking facility. Dyer asked if there was concern about so much housing that was inaccessible. Howard said townhouses are not conducive to accessibility. Howard showed a picture of the apartment complex that is going up from the transfer of development rights from the Tate Arms building. They are nice sized units with nice size outdoor space. The developer is uncertain about the market this far south of downtown, may be student housing but could also be family units. She showed a picture of the Tate Arms building. Freerks asked if that had to be at least started before occupancy of the other building could be approved. Miklo said it does, and that the developer is working Tate Arms rehab. Next Howard showed a color rendering of River View Apartments currently under construction on the west side of Riverside Drive. She ended the slide presentation with renderings of Riverfront Crossings Park. There are currently requests for proposals out for final design for the first phase. There has been a lot of interest from across the country on this RFP. The first phase is the wetlands and stream corridor portion. Another portion of the park project will be the restoration of Ralston Creek. The full park project can be viewed on the Park and Recreation website. Freerks asked the timeline on the park, Howard said the first phase will be completed by the end of this year. Martin asked about Ralston Creek noting it has been a polluted creek and is concerned how that will affect the wetlands when it meets up with the river at the park. Howard said they are hoping to create a Friends of Ralston Creek group that will aid in the clean-up and maintaining of a clean creek. Planning and Zoning Commission January 7, 2016 — Formal Meeting Page 12 of 13 CONSIDERATION OF MEETING MINUTES: DECEMBER 3, 2015 Eastham moved to approve the meeting minutes of December 3, 2015 with changes. Theobald seconded the motion. A vote was taken and the motion passed 7-0. PLANNING AND ZONING INFORMATION: Miklo said they will discuss stormwater issues at the next meeting. ADJOURNMENT: Martin moved to adjourn. Theobald seconded. 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