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Proceedings for Issuance of GO Bonds Series 2018 A& B_Hearing Copyrighted February 19, 2018 City of Dubuque Public Hearings # 1. ITEM TITLE: Proceedings for Issuance of General Obligation Bonds Series 2018A and Taxable General Obligation Refunding Bonds Series 2018B SUMMARY: Proof of publication on notice of public hearing to approve the suggested proceedings for the public hearing, recommending the approval of the preliminary official statement, advertisement for the sale and approval of the electronic bidding procedures on the issuance of General Obligation Bonds Series 2018A and Taxable General Obligation Refunding Bonds Series 2018B and the City Manager recommending approval. RESOLUTION Directing the advertisement for sale of $9,410,000 (Subject to adjustment per terms of Offering) General Obligation Bonds, Series 2018A, and approving electronic bidding procedures and Official Statement RESOLUTION Directing the advertisement for sale of $1,020,000 (Subject to adjustment per terms of Offering) Taxable General Obligation Refunding Bonds, Series 2018B, and approving electronic bidding procedures and Official Statement RESOLUTION Instituting proceedings to take additional action for the issuance of not to exceed $12,750,000 General Obligation Bonds SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt Resolution(s) ATTACHMENTS: Description Type General Obligation Bonds Series 2018 A and B-NNM City Manager Memo Memo Memo for Holding Public Hearing and Approve Prelim Staff Memo OS 2018AB Letter of Instruction from Ahlers Supporting Documentation Letter of Instruction from Ahlers Supporting Documentation Preliminary Official Statement 2018AB Supporting Documentation Public Hearing Resolution Resolutions Resolution directing the ad�rtisement for sale and approving electronic bidding procedures and OFficial Resolutions Statement. 2018A Resolution directing the ad�rtisement for sale and approving electronic bidding procedures and OFficial Resolutions Statement. 2018B Notice of Bond Sale Advertisement Supporting Documentation Proof of Publication on Notice of Hearing Supporting Documentation THE CITY OF Dubuque � AIFA�erlwGh UB E '�� III► Masterpiece on the Mississippi Z°°'�w'2 7A13 2017 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Proceedings for the Public Hearing, Approving the Preliminary Official Statement, Advertisement for Sale and Electronic Bidding Procedures on the Issuance of$9,410,000 (Subject to Adjustment Pursuant to Terms of Offering) General Obligation Bonds, Series 2018A and $1 ,020,000 (Subject to Adjustment Pursuant to Terms of Offering) Taxable General Obligation Refunding Bonds, Series 2018B DATE: February 13, 2018 Finance Director Jean Nachtman is providing the suggested proceedings for the public hearing, recommending the approval of the preliminary official statement, advertisement for the sale and approval of the electronic bidding procedures on the issuance of General Obligation Bonds and Taxable General Obligation Refunding Bonds. The proceeds of the bonds will be used for refunding previously issued bonds and general corporate purpose projects in the City budget previously approved by the City Council. Of the bond amount: • $200,000 is intended to provide funds to pay costs for the acquisition of radios for the transit and public works departments. • $10,055,000 is intended to provide funds to refund previously issued bond series that are now callable to realize interest savings of$259,228. • $170,120 is intended to provide funds for bond issuance costs. • $4,880 to be a contingency for fluctuations in the bond market for interest rates, bond issuance costs and change in project costs. • $2,320,000 in additional bonds that are callable, but not currently generating savings. The not to exceed amount has been sized to allow the inclusion of these bonds in the event the market changes in the City's favor to allow for inclusion of them in the issuance. I concur with the recommendation and respectfully request Mayor and City Council approval. �� Mic ael C. Van Milligen �� MCVM:jh Attachment cc: Crenna Brumwell, City Attorney Teri Goodmann, Assistant City Manager Cori Burbach, Assistant City Manager Jean Nachtman, Finance Director 2 THE CTTY OF Dubuque �" ui��eNe�ah DUB E 'il��i;; Masterpiece on the Mississippi Z°°' Z°'Z 2013 2017 TO: Michael C. VanMilligen, City Manager FROM: Jean Nachtman, Finance Director SUBJECT: Proceedings for the Public Hearing, Approving the Preliminary Official Statement, Advertisement for Sale and Electronic Bidding Procedures on the Issuance of $9,410,000 (Subject to Adjustment Pursuant to Terms of Offering) General Obligation Bonds, Series 2018A and $1 ,020,000 (Subject to Adjustment Pursuant to Terms of Offering) Taxable General Obligation Refunding Bonds, Series 2018B DATE: February 13, 2018 Introduction The purpose of this memorandum is to provide the suggested proceedings for the public hearing, recommend the approval of the preliminary official statement, advertisement for the sale, and approval of the electronic bidding procedures on the issuance of General Obligation Bonds and Taxable General Obligation Refunding Bonds. The proceeds of the bonds will be used for refunding previously issued bonds and general corporate purpose projects in the City budget previously approved by the City Council. Discussion Of the bond amount: • $200,000 is intended to provide funds to pay costs for the acquisition of radios for the transit and public works departments. • $10,055,000 is intended to provide funds to refund previously issued bond series that are now callable to realize interest savings of$259,228. The refunding includes General Obligation Series 2011A $4,710,000; Series 2012E $2,625,000; Series 2012H $1 ,735,000; and Series 2011 B $985,000. • $170,120 is intended to provide funds for bond issuance costs • $4,880 to be a contingency for fluctuations in the bond market for interest rates, bond issuance costs and change in project costs. • $2,320,000 in additional bonds (Series 2012F and 20121) that are callable, but not currently generating savings. The not to exceed amount has been sized to allow the inclusion of these bonds in the event the market changes in the City's favor to allow for inclusion of them in the issuance. Although the City is selling General Obligation Bonds to support the projects, repayments of the new debt for the acquisition of radios for the transit and public works departments will be funded by Sales Tax 20°k. The refunding debt is repaid by debt service levy, sold waste collection fees, road use tax, stormwater user fees, sanitary sewer user fees, water user fees, parking user fees, Dubuque Industrial Center tax increment revenue, and Greater powntown tax increment revenue. The borrowing is subject to the "reverse referendum" procedures, under which petitions may be filed prior to the hearing asking that the bond proposal be submitted to an election. To qualify, a petition must be signed by eligible electors equal to at least ten percent of the number who voted at the last regular municipal election (but not less than ten persons). In the event the Council decides to abandon the proposal to issue said bonds, then the form of resolution included in said proceeding should not be adopted. In this event, a motion needs to be adopted to the effect that such bond proposal is abandoned. Section 384.25 of the Code of lowa provides that any resident or property owner of the City may appeal the decision to take additional action to issue the bonds, to the District Court of a county in which any part of the City is located, within 15 days after such additional action is taken, but that the additional action is final and conclusive unless the court finds that the Council exceeded its authority. The bond sale will be held on March 5, 2018. The letters from attorney Kristin Billingsley Cooper detailing information on the public hearing, advertisement for sale, electronic bidding procedures and preliminary official statement are enclosed. A draft copy of the preliminary Official Statement prepared by Ahlers & Cooney, P.C. and City staff is enclosed. Careful review of the draft Official Statement by appropriate City staff and members of the City Council is an important step in the offering of the Bonds for sale to the public. The U.S. Securities and Exchange Commission (the "Commission") has stated that "issuers are primarily responsible for the content of their disclosure documents and may be held liable under the federal securities laws for misleading disclosure." In several recent enforcement proceedings, the Commission has made clear that it expects public officials to generally review disclosure documents in light of their unique knowledge and perspectives on the issuer and its financial circumstances, or else to ensure that appropriate procedures are in place to provide the necessary review. Rule 15c2-12 of the Commission requires prospective purchasers of the Bonds to obtain and review an official statement that has been "deemed final" by the City prior to submitting a bid to purchase the Bonds. For this purpose, the Official Statement may omit certain information that is dependent upon the pricing of the issue (such as interest rates, bond maturities and redemption features), but should otherwise be accurate and complete. 2 Recommendation I respectfully recommend the adoption of the enclosed resolutions instituting the proceedings to take additional action, directing the advertisement for sale, approving of electronic bidding procedures and the preliminary official statement. TLL Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Teri Goodman, Assistant City Manager Jenny Larson, Budget Director 3 Ahlers &Cooney, P.C. ;'~ � A I-�I L E R S �0 G hJ E Y Altorneys at Law 100 Court Avenue, Suite 600 f� 1� "f� r_� �t tJ L. Y E� Des Moines, lowa 50309-2231 Phone: 515-243-7611 Fax: 515-243-214y www.ahlerslaw.com Kristin B. Cooper 515.246.0330 kcooper@ahlerslaw.com February 9, 2018 VIA �-MAIL & OV�RNiGHT UPS Ms. .Tenny Larson F3udget Director City of Dubuque 50 West 13th Street Dubuque, Iowa 52001 Re: Dubuque, Iowa- $9,410,000 (Subject to Adjustment Pursuant to Terms of Offering) General Obligation Bonds, Series 2018A; and $1,020,000 (Subject to Adjustment Puisuant to Terms of Offering) Taxable General Obligation Refunding Bonds, Series 2018B Dear Jenny: 1 am enclosing the following proceedings to cover the advertisement for sale of $9,410,000 General Obligation Bonds, Series 2018A and $1,020,000 Taxable General Obligation Refiinding Bonds, Series 2018B, as well as approving the Preliminary Official Statement and approving eleclronic bi�laing procedures for the sale. The resolution directing the advertisement of Bonds for sale includes the forin of notice of sale. A copy of the procedure completed as the original should be certified bacic to our office using the form enclosed. Publication Re uirem�nl--Notice of Bond Sale. The Clerk 11as been authorized to select a date for sale and to publish the Notice of Bond Sale, form of which is enclosed. Based on the schedule received, we understand the sale will occur on March 5, 2018. For convenience a combined Notice of Bond Sale covering Uoth series has been provided, .iti�l musf l�e nial�li�lzc�l hct�ti��c�i "T'itex�i��y, i�chriy.ia-v I3a 2[118 .i��l Wedncsdav February 2$ 2018 clates inclusive . The combined notice need only be published once to cover both sales. 'The Notice of I3ond Sale must be publislled at least one time in a newspaper published in the County where the Bonds are offered for sale. The Bond sale may be held at any time; but not less than four clear days nor more than twenty days following the date of the last publication. WISHARU & Bl+II Y - 1888; GUERNSRY �i BAILY - 1893; BAILY & STIPf- 1901; STIPP, PEftRY, BANNISTER & STM7INGER - 1914; BANNISTER. CARPENTER, AHLL:RS & COONLY - 19i0; AlllC'_RS, COON�Y, DORWFILER, ALLk1F:E, HAYNIf- � SMITH - 1974; AIILEF3S, COONCY; UORWEILER, HAYNIf_, S611TH �. ALL�Ef_. P.C. - 1990 February 9, 2018 Page 2 An extra copy of the notice is enclosed for use by the newspaper. (The enclosed certificate covering the pti�blication of the notice should be returned promptly together with a copy of the published notice so we can pr��f the �ublication,) The Notice of Sale includes language to permit the use of electronic bidding. You should havc Indcpcndcnt Public Advisors' recommendation that electronic biddin�procedures be utili�ed f�r tliis Bond sale, Based upon this recommendation, the Iowa Code requires that the Council make a finding that the recominended procedure will provide reasonable security and maintain the integrity of the competitive bidding process and facililate ihe aelivery of bids by interested parties under the circunzstances of the particular sale. The proceedings enclosed are prepared on the basis that the Council will agree with the recommendation and make the necessary findings. This Resolution also approves the OFficial Statement and authorizes its distribution with respect to the above-referenced issues. Please note that the preparation of the Official Statement is subject to Federal Securities Law regulation. Please be certain that any facts and representations contained in the Official Statement are accurate in all material respects and not omitting any information material to the City's financial conditions, to and including the date of the delivery of the above-referenced Bonds. We recommend that the draft Preliminary Official Statement be given to council and department heads for review prior to the meeting, In the near future, we will send proceedings for the receipt of bids and award of sale. Please let me know if you have any questions. Very truly yours, Ahlers & Cooney, P.C. I� istin Billingsley Cooper FOR THE FIRM KBC:seb Enclosures cc: Jean Nachtman, City of Dubuque (via e-mail w/enc.) Kevin Firnstahl, City of Dubuque (via c-mail w/enc.) Tionna Pooler, Independent Public Advisors (via e-mail w/enc.) O l 448643-l\10422-I 90 Ahlers &Cooney, P.C. �� A f-I L E R S �I� G� N �Y Attorneys at Law 100 Court Avenue, S�aite 600 - ._. �� T� I" �:] F� f� I= Y �� Des Moines, lowa 50309-2231 Phone: 515-243-7611 Fax: 515-243-2149 www.ahlerslaw.com Kristin B. Cooper 515.246.0330 kcooper(c�ahlerslaw.com February 9, 2018 Ms. Jenny Larson Budget Director City of Dubuc�ue 50 West 13th Street Dubuque, Iowa 52001 RE: Dubuque., Iowa -Not to Exceed $1�.,750,0O0 (�eneral nhli�atinn Rnncl� Dear Jenny: We enclose suggested proceedings to be acted upon by the Council on the date fixed for the hearing on the issuance of the above mentioned Bonds, pursuant to the provisions of Code Section 384.25. A certificate to attest the proceedings is also enclosed. The proceedings are prepared to show as a first step the receipt of any oral or written objections fi�oin any resident or property owner to the proposed action of the Council to issue the Bonds. A suminary of objections received or made, if any, should be attached to the proceedings. After all objections have been received and considered if the Council decides not to abandon the proposal to issue the Bonds, a form of��esolution follows that should be introduced and adopted, entitled "Resolution Instituting Proceedings to Take Additional Action fur llie Issudri�e uf riul lu exe;ee�l $12,750,000 C3e�ierdl OUli�dliu��Refuiiaiiig Buiias, Sei'ies �018." Action Must Be Taken At The Hearin�. The Council is rec�uired by statute to adopt the resolution instituting proceedings to issue, the Bonds at the hearing or an adjournment thereof. If necessary to adjourn, the minutes are written to acc�mtuodate that action. In the event the Council decides to abandon the proposal, then the form of resolution included in lhe proceedin�s sh�ulcl n�l be adople�l. We waul�l suggest t�iat, iri thi5 evetit, a motion uzerely Ue adopted to the effect that such proposal is abandoned. Scction 384.25 of thc Codc of Io��va, providcs that any residcnt or property o��vncr of the City may appeal the decision to take additional action to issue the Bonds, to the District Court of a county in which any part of the city is located, within 1 S days after such additional action is WISHnRD & BAILY - 1888: GUERNSEY �k BAILY - 12393; BAILY � STIf'P - 1901: STII'P; P[f2RY, BANNISTFR & STARZWGFR - 1914: BANNISTF.R, CARPCM[fZ. AHLf-R� $ COONCV - 1950; AHLCRS, COONFY. DORWFILFR, ALL�CE. HAYME Si SMITH - 1974; AHLCRS, COONCY, DORWEILCR, HAVNIE, SMITH & ALLAGF, P.0 - 1990 February 9, 2018 Page 2 taken, but that the additional action is final and conclusive unless the court finds that the Council exceeded its authority. In the event an appeal is filed by any resident or property owner, please see that we are notified immediately; and, as soon as available, a copy of the notice of appeal should be furnished to our office for review. Also enclosed is an extra copy of the proceedings to be filled in as the original and certified back to this office. If you have any questions pertaining to the proceedings enclosed or this letter, please do not hesitate to either write or call. Very truly yours, Ahlers & Cooney, P.C. ristii7 Billingsley Cooper . FOR THE FIRM KBC:seb Enclosures cc: Jean Nachtman, City of Dubuque (via e-mail w/enc.) Kevin Firnstahl, City of Dubuque (via e-mail w/enc.) Tionna Pooler, Independent Public Advisors (via e-mail w/enc.) 01446399-IU 0422-190 Kevin Firnstahl From:Kevin Firnstahl Sent:Tuesday, February 20, 2018 12:03 PM To:Susan Ball; Jenny Larson Cc:Jean Nachtman; Tionna Pooler; Kristin Billingsley Cooper Subject:RE: Dubuque, Iowa - Not to Exceed $12,750,000 General Obligation Bonds Attachments:Res 39-18 Instituting Proceedings 2018A&B.pdf; Res 40-18 Advertising Sale 2018A.pdf; Res 41-18 Advertising Sale 2018B.pdf Hello Susan, Attached are scans of last night’s documents for instituting proceedings and directing the advertisement of sale for 2018 A&B. I’ll forward certified hard copies of the resolutions advertising the sale once I receive the Certificate of Publication Advertising the Sale. In today’s mail, I’m sending the certified copies of the 2/5 public hearing to include the Certificate of Publication of Notice of Hearing and the certified copies of the 2/19 instituting proceedings. Please contact me if you have questions. Thank you. Kevin S. Firnstahl, City Clerk th 50 W. 13 Street Dubuque, IA 52001 kfirnsta@cityofdubuque.org 563-589-4100 From: Susan Ball \[mailto:sball@Ahlerslaw.com\] Sent: Friday, February 09, 2018 10:30 AM To: Jenny Larson <Jlarson@cityofdubuque.org> Cc: Jean Nachtman <Jnachtma@cityofdubuque.org>; Kevin Firnstahl <Kfirnsta@cityofdubuque.org>; Tionna Pooler <tpooler@independentpublicadvisors.com>; Kristin Billingsley Cooper <KCooper@ahlerslaw.com> Subject: Dubuque, Iowa - Not to Exceed $12,750,000 General Obligation Bonds Good Morning, I have attached the Hearing Proceedings and the Letter of Instruction for the Council Meeting scheduled on Monday, February 19, 2018. The original documents and related certificates will follow via Overnight UPS. Please note that these documents are being provided for informational purposes only, as formatting and character changes sometimes occur during electronic transmission. Please use the hard copies we provide for execution. If you have any questions, please let us know. Thank you! 1 Susan Ball Legal Secretary to Kristin Billingsley Cooper Ahlers & Cooney, P.C. 100 Court Avenue, Suite 600 Des Moines, Iowa 50309-2231 Phone: (515) 246-4410 sball@ahlerslaw.com | www.ahlerslaw.com AHLERS & COONEY P.C. CONFIDENTIALITY NOTICE: This email, and any attachments hereto, contains information which may be CONFIDENTIAL and/or ATTORNEY CLIENT PRIVILEGED. The information is intended to be for the use of the individual or entity named above. If you are not the intended recipient, please note that any unauthorized disclosure, copying, distribution or use of the information is prohibited. If you have received this electronic transmission in error, please return the e-mail to the sender and delete it from your computer. Click here to report this email as spam. 2 ITEMS TO INCLUDE ON AGENDA CITY OF DUBUQUE, IOWA Not to Exceed $12,750,000 General Obligation Bonds • Public hearing on the issuance. • Resolution instituting proceedings to take additional action. NOTICE MUST BE GIVEN PURSUANT TO IOWA CODE CHAPTER 21 AND THE LOCAL RULES OF THE CITY. February 19, 2018 The City Council of the City of Dubuque, State of Iowa, met in regula session, in the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at 6:00 P.M. on the above date. There were present Mayor Roy D. Buol in the chair, and the following named Council Members: Luis Del Toro, Ric Jones, Kate Larson, David Resinic, Jake Rios, Brett Shaw Absent: Vacant: The Mayor announced that this was the time and place for the public hearing and meeting on the matter of the issuance of not to exceed $12,750,000 General Obligation Bonds, in order to provide funds to pay the costs of equipping the public works and transit departments, including the acquisition of emergency radio equipment and systems; and refunding or refinancing certain outstanding indebtedness of the City, including General Obligation Bonds, Series 2011A, dated September 1, 2011, General Obligation Bonds, Series 2012E, dated December 10, 2012, General Obligation Urban Renewal Bonds, Series 2012H, dated December 10, 2012, Taxable General Obligation Bonds, Series 2011B, dated September 1, 2011, Taxable General Obligation Bonds, Series 2012F, dated December 10, 2012, and Taxable General Obligation Refunding Bonds, Series 2012I, dated December 4, 2012, for essential corporate purposes, and that notice of the proposal to issue the Bonds had been published as provided by Section 384.25 of the Code of Iowa. The Mayor then asked the Clerk whether any written objections had been filed by any resident or property owner of the City to the issuance of the Bonds. The Clerk advised the Mayor and the Council that -0- written objections had been filed. The Mayor then called for oral objections to the issuance of the Bonds and -0- were made. Whereupon, the Mayor declared the time for receiving oral and written objections to be closed. (Attach here a summary of objections received or made, if any) Whereupon, the Mayor declared the hearing on the issuance of the Bonds to be closed. The Council then considered the proposed action and the extent of objections thereto. Whereupon, Council Member Resnick introduced and delivered to the Clerk the Resolution hereinafter set out entitled "RESOLUTION INSTITUTING PROCEEDINGS TO TAKE ADDITIONAL ACTION FOR THE ISSUANCE OF NOT TO EXCEED $12,750,000 GENERAL OBLIGATION BONDS", and moved: ® that the Resolution be adopted. I I to ADJOURN and defer action on the Resolution and the proposal to institute proceedings for the issuance of bonds to the meeting to be held at .M. on the day of , 2018, at this place. 2 Council Member Jones seconded the motion. The roll was called and the vote was, AYES: Shaw, Rios, Del Toro, Larson, Jones, Resnick, Buol NAYS: Whereupon, the Mayor declared the measure duly adopted. RESOLUTION NO. 39-18 RESOLUTION INSTITUTING PROCEEDINGS TO TAKE ADDITIONAL ACTION FOR THE ISSUANCE OF NOT TO EXCEED $12,750,000 GENERAL OBLIGATION BONDS WHEREAS, pursuant to notice published as required by law, the City Council has held a public meeting and hearing upon the proposal to institute proceedings for the issuance of not to exceed $12,750,000 General Obligation Bonds, for the essential corporate purposes, in order to provide funds to pay the costs of equipping the public works and transit departments, including the acquisition of emergency radio equipment and systems; and refunding or refinancing certain outstanding indebtedness of the City, including General Obligation Bonds, Series 2011A, dated September 1, 2011, General Obligation Bonds, Series 2012E, dated December 10, 2012, General Obligation Urban Renewal Bonds, Series 2012H, dated December 10, 2012, Taxable General Obligation Bonds, Series 2011B, dated September 1, 2011, Taxable General Obligation Bonds, Series 2012F, dated December 10, 2012, and Taxable General Obligation Refunding Bonds, Series 2012I, dated December 4, 2012, and has considered the extent of objections received from residents or property owners as to the proposed issuance of Bonds; and following action is now considered to be in the best interests of the City and residents thereof. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF TIT TBTMIT TF CLAT TF (lF I(l\ T A Section 1. That this Council does hereby institute proceedings and take additional action for the authorization and issuance in the manner required by law of not to exceed $12,750,000 General Obligation Bonds, for the foregoing essential corporate purposes. Section 2. This Resolution shall serve as a declaration of official intent under Treasury Regulation 1.150-2 and shall be maintained on file as a public record of such intent. It is reasonably expected that the general fund moneys may be advanced from time to time for capital expenditures which are to be paid from the proceeds of the above Bonds. The amounts so advanced shall be reimbursed from the proceeds of the Bonds not later than eighteen months after the initial payment of the capital expenditures or eighteen months after the property is placed in service. Such advancements shall not exceed the amount authorized in this Resolution 3 unless the same are for preliminary expenditures or unless another declaration of intention is adopted. PASSED AND APPROVED this 19th day of February, 2018. ATTEST: Mayor 4 (9 A,./ CERTIFICATE STATE OF IOWA ) SS COUNTY OF DUBUQUE I, the undersigned City Clerk of the City of Dubuque, State of Iowa, do hereby certify that attached is a true and complete copy of the portion of the records of the City showing proceedings of the Council, and the same is a true and complete copy of the action taken by the Council with respect to the matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty-four hours prior to the commencement of the meeting as required by law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective City offices as indicated therein, that no Council vacancy existed except as may be stated in the proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. 2018. WITNESS my hand and the seal of the Council hereto affixed this 20th day of February, #4ek_____ 01446402-1 \10422-190 City Cley1 ity of 1 ubuque, State of Iowa 5 ITEMS TO INCLUDE ON AGENDA CITY OF DUBUQUE, IOWA $9,410,000 (Subject to Adjustment per Terms of Offering) General Obligation Bonds, Series 2018A • Resolution directing the advertisement for sale and approving electronic bidding procedures and Official Statement. NOTICE MUST BE GIVEN PURSUANT TO IOWA CODE CHAPTER 21 AND THE LOCAL RULES OF THE CITY. February 19, 2018 The City Council of the City of Dubuque, State of Iowa, met in regular session, in the Historic Federal Building, 350 West 6t'' Street, Dubuque, Iowa, at 6:00 P.M. on the above date. There were present Mayor Roy D. Buol in the chair, and the following named Council Members: Luis Del Toro, Ric Jones, Kate Larson, David Resinic, Jake Rios, Brett Shaw Absent: Vacant: 1 Council Member Resnick introduced the following Resolution entitled "RESOLUTION DIRECTING THE ADVERTISEMENT FOR SALE OF $9,410,000 (SUBJECT TO ADJUSTMENT PER TERMS OF OFFERING) GENERAL OBLIGATION BONDS, SERIES 2018A, AND APPROVING ELECTRONIC BIDDING PROCEDURES AND OFFICIAL STATEMENT" and moved its adoption. Council Member Jones seconded the Resolution to adopt. The roll was called and the vote was, AYES: Shaw, Rios, Del Toro, Larson, Jones, Resnick, Buol NAYS: Whereupon, the Mayor declared the resolution duly adopted as follows: RESOLUTION NO. 40-18 RESOLUTION DIRECTING THE ADVERTISEMENT FOR SALE OF $9,410,000 (SUBJECT TO ADJUSTMENT PER TERMS OF OFFERING) GENERAL OBLIGATION BONDS, SERIES 2018A, AND APPROVING ELECTRONIC BIDDING PROCEDURES AND OFFICIAL STATEMENT WHEREAS, the Issuer is in need of funds to pay costs of equipping the public works and transit departments, including the acquisition of emergency radio equipment and systems; and refunding or refinancing certain outstanding indebtedness of the City, including General Obligation Bonds, Series 2011A, dated September 1, 2011, General Obligation Bonds, Series 2012E, dated December 10, 2012, and General Obligation Urban Renewal Bonds, Series 2012H, dated December 10, 2012, essential corporate purpose(s), and it is deemed necessary and advisable that General Obligation Bonds, to the amount of Not to Exceed $12,750,000 (when combined with certain other refundings) be authorized for said purpose(s); and WHEREAS, pursuant to notice published as required by Section 384.25 of the Code of Iowa, this Council has held a public meeting and hearing upon the proposal to institute proceedings for the issuance of the Bonds, and the Council is therefore now authorized to proceed with the issuance of said Bonds for such purpose(s); and WHEREAS, in conjunction with its Municipal Advisor, Independent Public Advisors, and Disclosure Counsel, the City has caused a Preliminary Official Statement to be prepared outlining the details of the proposed sale of the Bonds; and WHEREAS, the Council has received information from its Municipal Advisor evaluating and recommending the procedure hereinafter described for electronic, facsimile and internet bidding to maintain the integrity and security of the competitive bidding process and to facilitate the delivery of bids by interested parties; and 2 WHEREAS, the Council deems it in the best interests of the City and the residents thereof to receive bids to purchase such Bonds by means of both sealed and electronic internet communication. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, STATE OF IOWA: Section 1. That the receipt of electronic bids by facsimile machine and through the Parity Competitive Bidding System described in the Notice of Sale and Official Statement are hereby found and determined to provide reasonable security and to maintain the integrity of the competitive bidding process, and to facilitate the delivery of bids by interested parties in connection with the offering at public sale. Section 2. That General Obligation Bonds, Series 2018A, of City of Dubuque, State of Iowa, in the amount of $9,410,000 (Subject to Adjustment per Terms of Offering), to be issued as referred to in the preamble of this Resolution, to be dated April 11, 2018, be offered for sale pursuant to the published advertisement. Section 3. That the preliminary Official Statement in the form presented to this meeting be and the same hereby is approved as to form and deemed final for purposes of Rule 15c2-12 of the Securities and Exchange Commission, subject to such revisions, corrections or modifications as the Mayor and City Clerk, upon the advice of bond/disclosure counsel and the City's Municipal Advisor, shall determine to be appropriate, and is authorized to be distributed in connection with the offering of the Bonds for sale. Section 4. That the Clerk is hereby directed to publish notice of sale of the Bonds at least once, the last one of which shall be not less than four clear days nor more than twenty days before the date of the sale. Publication shall be made in the Telegraph Herald, a legal newspaper, printed wholly in the English language, published within the county in which the Bonds are to be offered for sale or an adjacent county. The notice is given pursuant to Chapter 75 of the Code of Iowa, and shall state that this Council, on the 5th day of March, 2018, at 6:00 P.M., will hold a meeting to receive and act upon bids for said Bonds, which bids were previously received and opened by City Officials at 11:00 A.M. on said date. The notice shall be in substantially the following form: 3 (To be published between: February 13, 2018 and February 28, 2018) NOTICE OF BOND SALE Time and Place of Sealed Bids: Bids for the sale of Bonds of the City of Dubuque, State of Iowa, hereafter described, must be received at the office of the Finance Director, City Hall, 50 West 13th Street, Dubuque, Iowa 52001; Telephone: 563-589-4100 (the "Issuer") in accordance with the official Terms of Offering on the 5th day of March, 2018. The bids will then be publicly opened and referred for action to the meeting of the City Council in conformity with the TERMS OF OFFERING. The Bonds: The Bonds to be offered are the following: GENERAL OBLIGATION BONDS, SERIES 2018A, in the amount of $9,410,000*, to be dated April 11, 2018 (the "2018A Bonds"). Bids to be received before 11:00 A.M C.S.T.; and TAXABLE GENERAL OBLIGATION REFUNDING BONDS, SERIES 2018B, in the amount of $1,020,000*, to be dated April 11, 2018 (the "2018B Bonds"). Bids to be received before 11:00 A.M. C.S.T. (collectively, the "Bonds") *Subject to principal adjustment pursuant to official Terms of Offering. Manner of Bidding: Open bids will not be received. Bids will be received in any of the following methods: • Sealed Bidding: Sealed bids may be submitted and will be received at the office of the Finance Director at City Hall, 50 West 13th Street, Dubuque, Iowa 52001. • Electronic Internet Bidding: Electronic internet bids will be received at the office of the Finance Director at City Hall, 50 West 13th Street, Dubuque, Iowa 52001. The bids must be submitted through the PARITY® competitive bidding system. Electronic Facsimile Bidding: Electronic facsimile bids will be received at the office of the Finance Director at City Hall, 50 West 13th Street, Dubuque, Iowa 52001 (facsimile number: (563-589-0890) and/or the City's Municipal Advisor, Independent Public Advisors, Johnston, Iowa (facsimile number: (515) 259- 8193). Electronic facsimile bids will be treated as sealed bids. Consideration of Bids: After the time for receipt of bids has passed, the close of sealed bids will be announced. Sealed bids will then be publicly opened and announced. Finally, electronic internet bids will be accessed and announced. 4 Sale and Award: The sale and award of the Bonds will be held at the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa at a meeting of the City Council on the above date at 6:00 P.M. Official Statement: The Issuer has issued an Official Statement of information pertaining to the Bonds to be offered, including a statement of the Terms of Offering and an Official Bid Form, which is incorporated by reference as a part of this notice. The Official Statement may be obtained by request addressed to the City Clerk, City Hall, 50 West 13th Street, Dubuque, Iowa 52001; Telephone: (563) 589-4100 or the Issuer's Municipal Advisor, Independent Public Advisors, 8805 Chambery Blvd Ste 300 #114, Johnston, IA 50131, Telephone (515) 259-8193. Terms of Offering: All bids shall be in conformity with and the sale shall be in accordance with the Terms of Offering as set forth in the Official Statement. Legal Opinion: The Bonds will be sold subject to the opinion of Ahlers & Cooney, P.C., Attorneys of Des Moines, Iowa, as to the legality and their opinion will be furnished together with the printed Bonds without cost to the purchaser and all bids will be so conditioned. Except to the extent necessary to issue their opinion as to the legality of the Bonds, the attorneys will not examine or review or express any opinion with respect to the accuracy or completeness of documents, materials or statements made or furnished in connection with the sale, issuance or marketing of the Bonds. Rights Reserved: The right is reserved to reject any or all bids, and to waive any irregularities as deemed to be in the best interests of the public. By order of the City Council of the City of Dubuque, State of Iowa. Kevin S. Firnstahl City Clerk, City of Dubuque, State of Iowa (End of Notice) 5 PASSED AND APPROVED this 19th day of February, 2018. Mayor ATTEST: CERTIFICATE STATE OF IOWA ) SS COUNTY OF DUBUQUE I, the undersigned City Clerk of the City of Dubuque, State of Iowa, do hereby certify that attached is a true and complete copy of the portion of the records of the City showing proceedings of the Council, and the same is a true and complete copy of the action taken by the Council with respect to the matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty-four hours prior to the commencement of the meeting as required by law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective City offices as indicated therein, that no Council vacancy existed except as may be stated in the proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of the Council hereto affixed this 20th . .y of February, 2018. City Cly k, City of Dubuque, State of Iowa ROLL CALL ORDER FOR MEETING OF February 19, 2018 Shaw, Rios, Del Toro, Larson, Jones, Resnick, Buol CITY OF DUBUQUE, IOWA CITY COUNCIL MEETING Historic Federal Building 350 W. 6th Street February 19, 2018 Council meetings are video streamed live and archived at www.cityofdubuque.org/media and on Dubuque's CityChannel on the Mediacom cable system at cable channel 8 and digital 117.2 REGULAR SESSION 6:00 PM PLEDGE OF ALLEGIANCE PROCLAMATION(S) 1. Read Across America Day (March 2, 2018) CONSENT ITEMS The consent agenda items are considered to be routine and non -controversial and all consent items will be normally voted upon in a single motion without any separate discussion on a particular item. If you would like to discuss one of the Consent Items, please go to the microphone and be recognized by the Mayor and state the item you would like removed from the Consent Agenda for separate discussion and consideration. 1. Minutes and Reports Submitted Catfish Creek Watershed Management Authority of 1/10; City Council Proceedings of 2/5, 2/7, 2/8, 2/12; Historic Preservation Commission of 1/18; Housing Commission of 1/16; Investment Oversight Advisory Commission of 1/24; Park and Recreation Commission of 1/9; Zoning Board of Adjustment of 1/25 Suggested Disposition: Receive and File 2. Notice of Claims and Suits Bard Materials for property damage, Kendall Coulson for vehicle damage, and Jeff Kintzle for vehicle damage. Suggested Disposition: Receive and File; Refer to City Attorney 3. Disposition of Claims City Attorney advising that the following claims have been referred to Public Entity Risk Services of Iowa, the agent for the Iowa Communities Assurance Pool: Bard Materials for property damage, Kendal Lee Coulson for vehicle damage, and Jeff Kintzle for vehicle damage. Suggested Disposition: Receive and File; Concur 4. 2017 Certified Local Government (CLG) Annual Report City Manager recommending approval of the 2017 Certified Local Government Annual Report. Pg. 1 CERTIFICATE STATE OF IOWA ) SS COUNTY OF DUBUQUE I, the undersigned, do hereby certify that I am now and was at the times hereinafter mentioned, the duly qualified and acting Clerk of the City of Dubuque, in the County of Dubuque, State of Iowa, and that as such Clerk and by full authority from the Council of the City, I have caused a NOTICE OF BOND SALE ($9,410,000 (Subject to Adjustment per Terms of Offering) General Obligation Bonds, Series 2018A) of which the clipping annexed to the publisher's affidavit hereto attached is in words and figures a correct and complete copy, to be published as required by law in the Telegraph Herald, a legal newspaper published at least once weekly, printed wholly in the English language, published regularly and mailed through the post office of current entry for more than two years and which has had for more than two years a bona fide paid circulation recognized by the postal laws of the United States, and has a general circulation in the City, and that the Notice was published in all of the issues thereof published and circulated on the following date: February 21, 2018. WITNESS my official signature this 01448414-1 \10422-190 day of , 2018. City Clerk, City of Dubuque, State of Iowa ITEMS TO INCLUDE ON AGENDA CITY OF DUBUQUE, IOWA $1,020,000 (Subject to Adjustment Per Terms of Offering) Taxable General Obligation Refunding Bonds, Series 2018B • Resolution directing the advertisement for sale and approving electronic bidding procedures and Official Statement. NOTICE MUST BE GIVEN PURSUANT TO IOWA CODE CHAPTER 21 AND THE LOCAL RULES OF THE CITY. February 19, 2018 The City Council of the City of Dubuque, State of Iowa, met in regular session, in the Historic Federal Building, 350 West 6t'' Street, Dubuque, Iowa, at 6:00 P.M., on the above date. There were present Mayor Roy D. Buol in the chair, and the following named Council Members: Luis Del Toro, Ric Jones, Kate Larson, David Resinic, Jake Rios, Brett Shaw Absent: Vacant: 1 Council Member Resnick introduced the following Resolution entitled "RESOLUTION DIRECTING THE ADVERTISEMENT FOR SALE OF $1,020,000 (SUBJECT TO ADJUSTMENT PER TERMS OF OFFERING) TAXABLE GENERAL OBLIGATION REFUNDING BONDS, SERIES 2018B, AND APPROVING ELECTRONIC BIDDING PROCEDURES AND OFFICIAL STATEMENT" and moved its adoption. Council Member Jones seconded the Resolution to adopt. The roll was called and the vote was, AYES: Shaw, Rios, Del Toro, Larson, Jones, Resnick, Buol NAYS: Whereupon, the Mayor declared the resolution duly adopted as follows: RESOLUTION NO. 41-18 RESOLUTION DIRECTING THE ADVERTISEMENT FOR SALE OF $1,020,000 (SUBJECT TO ADJUSTMENT PER TERMS OF OFFERING) TAXABLE GENERAL OBLIGATION REFUNDING BONDS, SERIES 2018B, AND APPROVING ELECTRONIC BIDDING PROCEDURES AND OFFICIAL STATEMENT WHEREAS, the Issuer is in need of funds to pay costs of refunding or refinancing certain outstanding indebtedness of the City, including Taxable General Obligation Bonds, Series 2011B, dated September 1, 2011, essential corporate purpose(s), and it is deemed necessary and advisable that Taxable General Obligation Refunding Bonds, to the amount of not to exceed $12,750,000 (when combined with certain other refundings) be authorized for said purpose(s); and WHEREAS, pursuant to notice published as required by Section 384.25 of the Code of Iowa, this Council has held a public meeting and hearing upon the proposal to institute proceedings for the issuance of the Bonds, and the Council is therefore now authorized to proceed with the issuance of said Bonds for such purpose(s); and WHEREAS, in conjunction with its Municipal Advisor, Independent Public Advisors, and Disclosure Counsel, the City has caused a Preliminary Official Statement to be prepared outlining the details of the proposed sale of the Bonds; and WHEREAS, the Council has received information from its Municipal Advisor evaluating and recommending the procedure hereinafter described for electronic, facsimile and internet bidding to maintain the integrity and security of the competitive bidding process and to facilitate the delivery of bids by interested parties; and 2 WHEREAS, the Council deems it in the best interests of the City and the residents thereof to receive bids to purchase such Bonds by means of both sealed and electronic internet communication. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, STATE OF IOWA: Section 1. That the receipt of electronic bids by facsimile machine and through the Parity Competitive Bidding System described in the Notice of Sale and Official Statement are hereby found and determined to provide reasonable security and to maintain the integrity of the competitive bidding process, and to facilitate the delivery of bids by interested parties in connection with the offering at public sale. Section 2. That Taxable General Obligation Refunding Bonds, Series 2018B, of City of Dubuque, State of Iowa, in the amount of $1,020,000 (Subject to Adjustment Per Terms of Offering), to be issued as referred to in the preamble of this Resolution, to be dated April 11, 2018, be offered for sale pursuant to the published advertisement. Section 3. That the preliminary Official Statement in the form presented to this meeting be and the same hereby is approved as to form and deemed final for purposes of Rule 15c2-12 of the Securities and Exchange Commission, subject to such revisions, corrections or modifications as the Mayor and City Clerk, upon the advice of bond/disclosure counsel and the City's Municipal Advisor, shall determine to be appropriate, and is authorized to be distributed in connection with the offering of the Bonds for sale. Section 4. That the Clerk is hereby directed to publish notice of sale of the Bonds at least once, the last one of which shall be not less than four clear days nor more than twenty days before the date of the sale. Publication shall be made in the Telegraph Herald, a legal newspaper, printed wholly in the English language, published within the county in which the Bonds are to be offered for sale or an adjacent county. The notice is given pursuant to Chapter 75 of the Code of Iowa, and shall state that this Council, on the 5th day of March, 2018, at 6:00 P.M., will hold a meeting to receive and act upon bids for said Bonds, which bids were previously received and opened by City Officials at 11:00 A.M. on said date. The notice shall be in substantially the following form: 3 (To be published between: February 13, 2018 and February 28, 2018) NOTICE OF BOND SALE Time and Place of Sealed Bids: Bids for the sale of Bonds of the City of Dubuque, State of Iowa, hereafter described, must be received at the office of the Finance Director, City Hall, 50 West 13th Street, Dubuque, Iowa 52001; Telephone: 563-589-4100 (the "Issuer") in accordance with the official Terms of Offering on the 5th day of March, 2018. The bids will then be publicly opened and referred for action to the meeting of the City Council in conformity with the TERMS OF OFFERING. The Bonds: The Bonds to be offered are the following: GENERAL OBLIGATION BONDS, SERIES 2018A, in the amount of $9,410,000*, to be dated April 11, 2018 (the "2018A Bonds"). Bids to be received before 11:00 A.M C.S.T.; and TAXABLE GENERAL OBLIGATION REFUNDING BONDS, SERIES 2018B, in the amount of $1,020,000*, to be dated April 11, 2018 (the "2018B Bonds"). Bids to be received before 11:00 A.M. C.S.T. (collectively, the "Bonds") *Subject to principal adjustment pursuant to official Terms of Offering. Manner of Bidding: Open bids will not be received. Bids will be received in any of the following methods: • Sealed Bidding: Sealed bids may be submitted and will be received at the office of the Finance Director at City Hall, 50 West 13th Street, Dubuque, Iowa 52001. • • Electronic Internet Bidding: Electronic internet bids will be received at the office of the Finance Director at City Hall, 50 West 13th Street, Dubuque, Iowa 52001. The bids must be submitted through the PARITY® competitive bidding system. Electronic Facsimile Bidding: Electronic facsimile bids will be received at the office of the Finance Director at City Hall, 50 West 13th Street, Dubuque, Iowa 52001 (facsimile number: (563-589-0890) and/or the City's Municipal Advisor, Independent Public Advisors, Johnston, Iowa (facsimile number: (515) 259- 8193). Electronic facsimile bids will be treated as sealed bids. Consideration of Bids: After the time for receipt of bids has passed, the close of sealed bids will be announced. Sealed bids will then be publicly opened and announced. Finally, electronic internet bids will be accessed and announced. 4 Sale and Award: The sale and award of the Bonds will be held at the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa at a meeting of the City Council on the above date at 6:00 P.M. Official Statement: The Issuer has issued an Official Statement of information pertaining to the Bonds to be offered, including a statement of the Terms of Offering and an Official Bid Form, which is incorporated by reference as a part of this notice. The Official Statement may be obtained by request addressed to the City Clerk, City Hall, 50 West 13th Street, Dubuque, Iowa 52001; Telephone: (563) 589-4100 or the Issuer's Municipal Advisor, Independent Public Advisors, 8805 Chambery Blvd Ste 300 #114, Johnston, IA 50131, Telephone (515) 259-8193. Terms of Offering: All bids shall be in conformity with and the sale shall be in accordance with the Terms of Offering as set forth in the Official Statement. Legal Opinion: The Bonds will be sold subject to the opinion of Ahlers & Cooney, P.C., Attorneys of Des Moines, Iowa, as to the legality and their opinion will be furnished together with the printed Bonds without cost to the purchaser and all bids will be so conditioned. Except to the extent necessary to issue their opinion as to the legality of the Bonds, the attorneys will not examine or review or express any opinion with respect to the accuracy or completeness of documents, materials or statements made or furnished in connection with the sale, issuance or marketing of the Bonds. Rights Reserved: The right is reserved to reject any or all bids, and to waive any irregularities as deemed to be in the best interests of the public. By order of the City Council of the City of Dubuque, State of Iowa. Kevin S. Firnstahl City Clerk, City of Dubuque, State of Iowa (End of Notice) 5 PASSED AND APPROVED this 19tH day of February, 2018. ATTEST: 6 CERTIFICATE STATE OF IOWA ) SS COUNTY OF DUBUQUE I, the undersigned City Clerk of the City of Dubuque, State of Iowa, do hereby certify that attached is a true and complete copy of the portion of the records of the City showing proceedings of the Council, and the same is a true and complete copy of the action taken by the Council with respect to the matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty-four hours prior to the commencement of the meeting as required by law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective City offices as indicated therein, that no Council vacancy existed except as may be stated in the proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of the Council hereto affix this 20th dayf February, 2018. City Cl r , City of oubuqu , State of Iowa ROLL CALL ORDER FOR MEETING OF February 19, 2018 Shaw, Rios, Del Toro, Larson, Jones, Resnick, Buol CITY OF DUBUQUE, IOWA CITY COUNCIL MEETING Historic Federal Building 350 W. 6th Street February 19, 2018 Council meetings are video streamed live and archived at www.cityofdubuque.org/media and on Dubuque's CityChannel on the Mediacom cable system at cable channel 8 and digital 117.2 REGULAR SESSION 6:00 PM PLEDGE OF ALLEGIANCE PROCLAMATION(S) 1. Read Across America Day (March 2, 2018) CONSENT ITEMS The consent agenda items are considered to be routine and non -controversial and all consent items will be normally voted upon in a single motion without any separate discussion on a particular item. If you would like to discuss one of the Consent Items, please go to the microphone and be recognized by the Mayor and state the item you would like removed from the Consent Agenda for separate discussion and consideration. 1. Minutes and Reports Submitted Catfish Creek Watershed Management Authority of 1/10; City Council Proceedings of 2/5, 2/7, 2/8, 2/12; Historic Preservation Commission of 1/18; Housing Commission of 1/16; Investment Oversight Advisory Commission of 1/24; Park and Recreation Commission of 1/9; Zoning Board of Adjustment of 1/25 Suggested Disposition: Receive and File 2. Notice of Claims and Suits Bard Materials for property damage, Kendall Coulson for vehicle damage, and Jeff Kintzle for vehicle damage. Suggested Disposition: Receive and File; Refer to City Attorney 3. Disposition of Claims City Attorney advising that the following claims have been referred to Public Entity Risk Services of Iowa, the agent for the Iowa Communities Assurance Pool: Bard Materials for property damage, Kendal Lee Coulson for vehicle damage, and Jeff Kintzle for vehicle damage. Suggested Disposition: Receive and File; Concur 4. 2017 Certified Local Government (CLG) Annual Report City Manager recommending approval of the 2017 Certified Local Government Annual Report. Pg. 1 CERTIFICATE STATE OF IOWA ) SS COUNTY OF DUBUQUE I, the undersigned, do hereby certify that I am now and was at the times hereinafter mentioned, the duly qualified and acting Clerk of the City of Dubuque, in the County of Dubuque, State of Iowa, and that as such Clerk and by full authority from the Council of the City, I have caused a NOTICE OF BOND SALE ($1,020,000 (Subject to Adjustment Per Terms Of Offering) Taxable General Obligation Refunding Bonds, Series 2018B) of which the clipping annexed to the publisher's affidavit hereto attached is in words and figures a correct and complete copy, to be published as required by law in the Telegraph Herald, a legal newspaper published at least once weekly, printed wholly in the English language, published regularly and mailed through the post office of current entry for more than two years and which has had for more than two years a bona fide paid circulation recognized by the postal laws of the United States, and has a general circulation in the City, and that the Notice was published in all of the issues thereof published and circulated on the following date: February 21, 2018. WITNESS my official signature this 01448880-1\10422-191 day of , 2018. City Clerk, City of Dubuque, State of Iowa CITY OF DUBUQUE, IOWA NOTICE OF BOND SALE Time and Place of Sealed Bids: Bids for the sale of Bonds of the City of Dubuque, State of Iowa, hereafter described, must be received at the office of the Finance Director, City Hall, 50 West 13th Street, Dubuque, Iowa 52001; Telephone: 563-589-4100 (the "Issuer") in accordance with the official Terms of Offering on the 5th day of March, 2018. The bids will then be publicly opened and referred for action to the meeting of the City Council in conformity with the TERMS OF OFFERING. The Bonds: The Bonds to be offered are the following: GENERAL OBLIGATION BONDS, SERIES 2018A, in the amount of $9,410,000*, to be dated April 11, 2018 (the "2018A Bonds"). Bids to be received before 11:00 A.M C.S.T.; and TAXABLE GENERAL OBLIGATION REFUNDING BONDS, SERIES 2018B, in the amount of $1,020,000*, to be dated April 11, 2018 (the “2018B Bonds”). Bids to be received before 11:00 A.M. C.S.T. (collectively, the “Bonds”) *Subject to principal adjustment pursuant to official Terms of Offering. Manner of Bidding: Open bids will not be received. Bids will be received in any of the following methods:  Sealed Bidding: Sealed bids may be submitted and will be received at the office of the Finance Director at City Hall, 50 West 13th Street, Dubuque, Iowa 52001.  Electronic Internet Bidding: Electronic internet bids will be received at the office of the Finance Director at City Hall, 50 West 13th Street, Dubuque, Iowa 52001. The bids must be submitted through the PARITY® competitive bidding system.  Electronic Facsimile Bidding: Electronic facsimile bids will be received at the office of the Finance Director at City Hall, 50 West 13th Street, Dubuque, Iowa 52001 (facsimile number: (563-589-0890) and/or the City's Municipal Advisor, Independent Public Advisors, Johnston, Iowa (facsimile number: (515) 259- 8193). Electronic facsimile bids will be treated as sealed bids. Consideration of Bids: After the time for receipt of bids has passed, the close of sealed bids will be announced. Sealed bids will then be publicly opened and announced. Finally, electronic internet bids will be accessed and announced. Sale and Award: The sale and award of the Bonds will be held at the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa at a meeting of the City Council on the above date at 6:00 P.M. Official Statement: The Issuer has issued an Official Statement of information pertaining to the Bonds to be offered, including a statement of the Terms of Offering and an Official Bid Form, which is incorporated by reference as a part of this notice. The Official Statement may be obtained by request addressed to the City Clerk, City Hall, 50 West 13th Street, Dubuque, Iowa 52001; Telephone: (563) 589-4100 or the Issuer's Municipal Advisor, Independent Public Advisors, 8805 Chambery Blvd Ste 300 #114, Johnston, IA 50131, Telephone (515) 259-8193. Terms of Offering: All bids shall be in conformity with and the sale shall be in accordance with the Terms of Offering as set forth in the Official Statement. Legal Opinion: The Bonds will be sold subject to the opinion of Ahlers & Cooney, P.C., Attorneys of Des Moines, Iowa, as to the legality and their opinion will be furnished together with the printed Bonds without cost to the purchaser and all bids will be so conditioned. Except to the extent necessary to issue their opinion as to the legality of the Bonds, the attorneys will not examine or review or express any opinion with respect to the accuracy or completeness of documents, materials or statements made or furnished in connection with the sale, issuance or marketing of the Bonds. Rights Reserved: The right is reserved to reject any or all bids, and to waive any irregularities as deemed to be in the best interests of the public. By order of the City Council of the City of Dubuque, State of Iowa. Kevin S. Firnstahl City Clerk, City of Dubuque, State of Iowa 1t 2/21 � � STATE OF IOWA SS: � { � DUBUQUE COUNTY ; ; �� CERTIFICATION OF PUBLICATIQN �� I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher � of the Telegraph Herald,a newspaper of general circulation published in the City of Dubuque, County ;j of Dubuque and State of Iowa; hereby certify tl�at the attached notice was published in said newspaper on the following dates: February 09, 2018, and for which the charge is $36.23. �� '�,1 , '1 � , � __ � � , ; �'� �� '� a J � � Subscribed to before me, a Notary Public in and for Dubuque County, Iowa, '�;I this �� day of,�'"�'��,r��.�-�� , 20�. ,� � �� C: � � c i Notary Public in and for Dubuque County, Iowa. � � � � ,. ; � �R��s�'�1P��,�'�;�9 r�.��°�°�� G�� ,;, �a � �;��s��si�N� ,��;.�r�a�g<��'r I' tn � �� ,",r�r��tti�us�ie�r��Yp.F�^b_�,�q�J� � a,.a�,,....,,.,�.., s..,�,.�...��.,ym�m,._.v.�...�...=..o....�,._-� � � V � �p 2 � � � � Y � � � � E � � � 13th,St., Dubu ue,`lo-- � wta and ma�y be ufewed i � auring normal wo�king ` � CITY OF DUBUQUE,, hours. �. � IOWA; Any vi5ual or hearing- I OFFICl/!L N�TICE impaired persons ! NOTICE OF MEETING needing special as§is- ' OF THE�CITY COUN� tance or persons,with ' � CIL OF THE CITY pF special accessibility DUBUQUE, STATE OF needs shorald contact , e IOWA,ON THE MAT- the City Glerk's Office d YER- OF THE PRO- at (563) 5,89-41Q0 qr ;, POSED'ISSUANCE•OF TDD (563)''690-6678 at ' �� NOT TO IXCEED least 48 hours prior to , g $12,750,000 GENERAL the meeting.;, � pBLIGATION BmNDS This notice is given by; I OF THE CITY(FOR ES- order of the City Coun- ; I SENTIAL` CORPOR- cil`of the Ci#y,of Dubu- � � A4E PU�tPOSES),APID que, State �f lowa, as , i� THE F�EARING ON THE provided by Section 1 ISSUANCE THEREOF . 384.25 of the Code of il � PUBLI'C NOTICE is lowa. � hereby given that the Aated this.5th day of ', �I City Counci)of the City February,2018. ; of Dubuque, State of /s/Kevin S.Fir�stahl lowa,will hoid a public� 'City Clerk; ; � hearing pn the 19th City of Dubuque; ' � day of February,�.2018, State of Iowa I � at 6;00P,M in the His-� it 2/9� � toric Federal Building,�i �—"�— — - 350 W. 6fh Street,Du- i buque, lowa, at which', meeting the Council' � proposes to take addi- � tional action for the is-I I!� suance of, nat`to-ex-' ceed $12,750,o0p Gen=l, ', eraF 061igation:Bonds,>, ,i for essential corporate'� _ u purposes,' to provide' ; funds fo pay the costs� �� of equipping the public I works and transit de- partments, �including ', �i the acquisition 'pf ' � emergeP��Y._. .� �radio � � � equip�nent and- sys-•.. . tems and��efunding;or � ` IJ �refinancing �certain` �I outstandiqg indebted- ' ness of fhe';�ity,inclad- i ing General Obligation ' Bonds, 5e�ies 201iq,:' dated 5eptember ':1, ' i 2011, General Ohliga- �� tion Bonds, Series i � 2012E, dated Decem- GGG 6er 10� 2012 -Gene�al � � � Obligation�;qrban.Re- ; new�l Bontls Series '� I 2012H,�dated. Decem-_ i ber 10, 20P2, Taxable`! Generab Obligafion Bonds,;Series 20116, I � dated Septerriber 1,'��I 2011�Taxable. CieneCal � obligaxiorr Bonds, Ser= I ies 2012F, 'dated De, I � cember, ZO,�2012;�and ; Taxable General fJbli- � gation ' ��Refunding '� � Bonds, Series 20121, ;. dated December 4, ,' 2012. At the above meeting ' t6e Council,,shal6 .re- ! ceive oral or wriiten ' objections :from any ° resident bc property ' owner of the City to ' the above action.After ' all objections `have ' been received and con- ' sidered, tlie Council; y will at the meeting or � at'any adjournmenf Yhereof,take additionab action for the issuance � of the Bonds or will � abandon the proposaf to issue said Bonds. Capies of supporting; � documents for the pub-. � lic hearings are on file ', in the City Clerk's Of- ' fice, City Hall, 50 W. ' � �s i PRELIMINARY OFFICIAL STATEMENT DATED ,2015 � New&Refunding Issues Moody's Investors Service" �3 c E�� Assuming complionce with certoin covenonts, in the opinion of Ahlers& Cooney, P.C., Bond Counsel, under present lmv ond ossuming continued complionce with the ° re uirements o the Internol Revenue Code o I986, os omended the "Code", interest on the Series 20I8A Bonds is excludoble om ross income or ederol income tox a.n 4 f f C ) !r g f f �,;a purposes ond interest on the Series 20I8A Bonds is not on item of tox preference for purposes of the federol olternotive minimum tox;however;with respect to corporotions �c (os'defined for federol income tox purposes), such interest is included in odjusted current eornings for the purpose of determining the olternotive minimum tox imposed on �� such corporotionsfor t¢eoble yeors beginning before Jonuary I,20I8. The Series 20I8B Bonds ore includoble in the income of the recipient for federol income toxpurposes. ,� � The Bonds will not be designoted os"quolified ta�exempt"obligotions. See "F&D&RAL TAXMATT&RS"herein for a more detoiled discussion. 0.5 �� DUBL� CITY OF DUBUQUE, IOWA �'� Mnere�pieran��hrMi.-.islpyi 0 �. �. $9,410,000* General Obligation Bonds, Series 2018A s� $1,020,000* Taxable General Obligation Refunding Bonds, Series 2018B �,� BIDS RECEIVED: Monday,March 5,2018, 11:00 o'clockA.M., Central Time EN AWARD: Monday,March 5,2018,6:00 o'clock P.M., Central Time `o � c m� Dated: Date of Delivery(April 11, 2018) Principal Due: June 1 as shown on inside front cover � g °c o The $9,41Q000* General Obligation Bonds, Series 2018A (the "Series 2018A Bonds"), and the $1,02Q000* Taxable General Obligation � �' Refunding Bonds,Series 2018B(the"Series 2018B Bonds")(collectively the`Bonds")are being issued puisuant to Division III of Chapter 384 of �� the Code of Iowa,and resolutions to be adopted by the City Council of the City of Dubuque,Iowa(the"Cit}�'). Proceeds of the Bonds will be used �°�� for various City projects as described fully under"AUTHORITY AND PURPOSE"herein. The Bonds will be general obligations of the City for = wMch the City will pledge iTs power to levy direct ad valorem taxes to the repayment of the Bonds. �o � �o�' 9 The Bonds will be issued as fully registered Bonds without coupons and,when issued,will be registered in the name of Cede&Co., as nominee c o .: of The Depository Trust Company("DTC"). DTC will act as securities depository for the Bonds. Individual purchases may be made in book- 'v = r,,° o s entry form only,in the principal amount of$5,000 and integral multiples thereof.Purchaseis will not receive certificates representing their interest 3 � y in the Bonds purchased. Principal of the Bonds payable annually on each June 1,beginning June 1, 2019 and interest thereon,payable initially �o � on December 1, 2018 and thereafter on each June 1 and December 1, will be paid to DTC by the City's Registrar/Paying Agent, Wells Fargo � `� o Bank, N.A., Des Moines, Iowa (the "Registrar"). DTC will in tum remit such principal and interest to its participants for subsequent .�a A disbursements to the beneficial owners of the Bonds as described herein. Interest and principal shall be paid to the registered holder of a 0 0 �,= Bond as shown on the records of ownersMp maintained by the Registrar on the 15�'day of the month preceding said interest payment date(the � " �� "Record Date"). � � � = � � A � � " a THE BONDS WILL MATURE AS LISTID ON THE INSIDE FRONT COVER v� � E� � o E � Series 2018A Bonds Series 2018B Bonds vo �� NIINID�Ii7M BID: $9,334,720 $1,012,860 �.: w �� GOOD FAITH 1% (Required of Purchaser 1% (Required of Purchaser �`'� � DEPOSIT: Only) Only) � yo s " o � e �A TAX Federal: Tax-Exempt Federal: Taxable o � b MATTERS: State: Taxa.ble State: Taxable �' See`"PAX EXEMPTION AND See`"PAX EXEMPTION AND g � o RELATED CONSIDERATIONS" RELATED CONSIDERATIONS" " section for details. section for details. .� 6 � � � C � 9€ � The Bonds are offered for delivery,when, as and if issued and subject to the legal opinions of Ahlers & Cooney, RC., Bond Counsel, of Des �'� 9 Moines, Iowa,to be fumished upon delivery of the Bonds. The Bonds will be available for delivery through DTC in New York,New York,on g w � or about April 11,2018. This Preliminary Official Statement will be further supplemented by offering prices,interest rates,aggregate principal �y� 3 amount,principal amount per maturity,anticipated delivery date and undenvriter,together with any other information required by law,and shall � ts A constitute a"Final Official StatemenY' of the City with respect to the Bonds,as defined in Rule 15c2-12. > 'v `o �a c ° �p .e *Prelimirtary;subject to cktange. c S� o .E � � �� o t F O y CITY OF DUBUQUE, IOWA $9,410,000* General Obliaation Bonds, Series 2018A MATURITY: June 1. Amount* June 1. Amount* 2019 $635,000 2026 $695,000 2020 680,000 2027 710,000 2021 690,000 2028 735,000 2022 705,000 2029 720,000 2023 715,000 2030 735,000 2024 655,000 2031 750,000 2025 670,000 2032 315,000 $1,020,000* Taxable General Obliaation Refundina Bonds, Series 2018B MATURITY: June 1. Amount* June 1. Amount* 2019 $110,000 2025 $135,000 2020 120,000 2026 145,000 2021 120,000 2022 125,000 2023 130,000 2024 135,000 PRINCIPAL Preliminary; subject to change. The City reserves the right to ADJLTSTMENT*: increase or decrease the aggregate principal amounts ofthe Bonds. Such change will be in increments of$5,000 and may be made in any of the maturities. The purchase prices will be adjusted proportionately to reflect any changes in issue size. INTEREST: December 1, 2018 and semiannually thereafter. REDEMPTION: The Series 2018A Bonds due after June 1, 2026 will be subject to call priar to maturity in whole, or from time to time in part, in any order of maturity and within a maturity by lot on said date or on any date thereafter at the option of the City, upon terms of par plus accrued interest to date of call. Written notice of such call shall be given at least thirly(30) days priar to the date fixed for redemption to the registered owners of the Bonds to be redeemed at the address shown on the registration books. The Series 2018B Bonds are not subject to redemption priar to maturity. COMPLIANCE WITH S.E.C. RULE 15c2-12 Municipal obligations (issued in an aggregate amount over $1,000,000) are subject to General Rules and Regulations, Securities Exchange Act of 1934,Rule 15c2-12 Municipal Securities Disclosure. Preliminary Official Statement This Preliminary Official Statement was prepared far the City for dissemination to prospective bidders. Its primary purpose is to disclose inforxnation regarding the Bonds to prospective bidders in the interest of receiving competitive bids in accordance with the TERMS OF OFFERING and NOTICE OF BOND SALE contained herein. Unless an addendum is received priar to the sale,this document shall be deemed the "Near Final Official Statement". Review Period: This Preliminary Official Statement has been distributed to City staff as well as to prospective bidders for an objective review of its disclosure. Comments, omissions or inaccuracies must be submitted to Independent Public Advisors, LLC at least two business days priar to the sale. Requests for additional information or corrections in the Preliminary Official Statement received on or before this date will not be considered a qualification of a bid received. If there are any changes, corrections or additions to the Preliminary Official Statement, prospective bidders will be inforxned by an addendum at least one business day priar to the sale. Final Official Statement: Upon award of sale of the Bonds,the legislative body will authorize the preparation of a Final Official Statement that includes the offering prices,interestrates,aggregate principal amount,principal amount per maturity,anticipated delivery date and other information required by law and the identity of the underwriter(the "Syndicate Manager'� and syndicate members. Copies of the Final Official Statement will be delivered to the Syndicate Manager within seven business days following the bid acceptance. REPRESENTATIONS No dealer, broker, salesperson or other person has been authorized by the City to give any information ar to make any representations, other than those contained in the Preliminary Official Statement This Preliminary Official Statement does not constibxte any offer to sell ar the solicitation of an offer to buy,nor shall there be any sale of the Bonds by any person, in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information, estimates and expressions of opinion herein are subject to change without notice and neither the delivery of this Preliminary Official Statement nor any sale made hereunder, shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereo£ This Preliminary Official Statement is submitted in connection with the sale of the securities referred to herein and may not be reproduced or used, in whole or in part,for any other purpose. This Preliminary Official Statement and any addenda thereto were prepared relying on inforxnation from the City and other sources,which are believed to be reliable,but it makes no warranty, guaranty,or other representation with respect to the accuracy or completeness of such information. This Official Statement is not to be construed as a contract or agreement amongst the City, the Underwriter, ar the holders of any of the Bonds. Any statements made in this OfFicial Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinions and not as representations of fact The information and expressions of opinions contained herein are subject to change without notice and neither the delivery of this Official Statement ar the sale of the Bonds made hereunder shall,under any circumstances,create any implication that there has been no change in the affairs of the City since the date hereo£ The inforxnation contained in this Official Statement is not guaranteed. Bond Counsel has not participated in the preparation of this Preliminary Official Statement and is not expressing any opinion as to the completeness or accuracy of the information contained therein. Compensation of Independent Public Advisors, LLC (the "Municipal Advisor'� payable entirely by the City, is contingent upon the sale of the issues. TABLE OFCONTENTS TERMSOF OFFERING.................................................................................................................................................................................1 INTRODUCTION...........................................................................................................................................................................................2 AUTHORITY AND PURPOSE.......................................................................................................................................................................2 OPTIONAL REDEMPTION OF THE BONDS...............................................................................................................................................4 INTEREST ON THE BONDS..........................................................................................................................................................................4 PAYMENT OF AND SECURITY FOR THE BONDS....................................................................................................................................4 BOOK-ENTRY-ONLY ISSUANCE...............................................................................................................................................................5 FUTUREFINANCING....................................................................................................................................................................................7 LITIGATION...................................................................................................................................................................................................7 DEBT PAYMENT HISTORY..........................................................................................................................................................................7 LEGALMATTERS.........................................................................................................................................................................................7 FEDERALTAX MATTERS............................................................................................................................................................................8 STATE OF IOWA TAX MATTERS............................................................................................................................................................. 10 CHANGES IN FEDERAL AND STATE TAX LAW.................................................................................................................................... 10 RATING......................................................................................................................................................................................................... 11 INVESTMENT CONSIDERATIONS........................................................................................................................................................... 11 MUNICIPALADVLSOR.................................................................................................................................................................................. 13 CONTINUINGDISCLOSURE...................................................................................................................................................................... 13 CERTIFICATION.......................................................................................................................................................................................... 13 APPENDIX A: INFORMATION ABOUT THE ISSUER APPENDIX B: FORM OF LEGAL OPINIONS APPENDIX C:JUNE 3Q 2017 COMPREHENSNE ANNUAL FINANCIAL REPORT APPENDIX D: FORM OF COMBINED CONTINUING DISCLOSURE CERTIFICATE APPENDIX E:NOTICE OF BOND SALE OFFICIAL BID FORMS CITY OF DUBUQUE, IOWA Mavor and Citv Council Member Term Expiration Roy D. Buol,Mayor 2021 Ric W. Jones-At Large 2021 David T. Resnick-At Large 2019 Brett M. Shaw-Ward 1 2021 Luis Del Toro-Ward 2 2019 Kate M. Larson-Ward 3 2021 Jake A. Rios-Ward 4 2019 Administration Michael C. Van Milligen, City Manager Cori Burbach, Assistant City Manager Teri Goodmann, Assistant City Manager Jean Nachtman, Finance Director Jenny Larson,Budget Director Kevin Firnstahl, City Clerk CitV AttorneV Crenna Brumwell Dubuque, Iowa Bond Counsel & Disclosure Counsel Ahlers &Cooney,P.C. Des Moines,Iowa Municipal Advisor Independent Public Advisors, LLC Johnston,Iowa TERMS OF OFFERING 1 TERMS OF OFFERING CITY OF DUBUQUE, IOWA This section sets forth the description of certain of the terms of the Bonds with which all bidders and bid proposals are required to comply, as follows: DETAILS OF THE SERIES 2018A BONDS General Obligation Bonds, Series 2018A(the " Series 2018A Bonds'�, in the aggregate principal amount of$9,410,000* to be dated April 11, 2018, in the denomination of$5,000 or any integral multiples thereof designated by the Purchaser(s)within forly-eight hours of acceptance of the bid,will mature as follows: June 1. Amount* June 1. Amount* 2019 $635,000 2026 $695,000 2020 680,000 2027 710,000 2021 690,000 2028 735,000 2022 705,000 2029 720,000 2023 715,000 2030 735,000 2024 655,000 2031 750,000 2025 670,000 2032 315,000 DETAILS OF THE SERIES 2018B BONDS Taxable General Obligation Refunding Bonds, Series 2018B(the"Series 2018B Bonds'�, in the aggregate principal amount of$1,020,000* to be dated April 11, 2018, in the denomination of$5,000 or any integral multiples thereof designated by the Purchaser(s) within forty-eight hours of acceptance of the bid, will mature as follows: June 1. Amount* June 1. Amount* 2019 $110,000 2023 $130,000 2020 120,000 2024 135,000 2021 120,000 2025 135,000 2022 125,000 2026 145,000 *Preliminary; subject to change. PRINCIPAL ADJUSTMENT OF THE BONDS The City reserves the right to increase or decrease the aggregate principal amounts of the Bonds. Such changes will be in increments of$5,000 and may be made in any of the maturities. The purchase prices of each respective series will be adjusted proportionately to reflect any changes in issue sizes. OPTIONAL REDEMPTION OF THE BONDS The Bonds due after June 1, 2026 will be subject to call priar to maturity in whole, or from time to time in part,in any order of maturity and within a maturity by lot on said date or on any date thereafter at the option of the City,upon terms of par plus accrued interest to date of call. Written notice of such call shall be given at least thirty (30) days priar to the date fixed for redemption to the registered owners of the Bonds to be redeemed at the address shown on the registration books. INTEREST ON THE BONDS Interest on the Bonds will be payable on December 1, 2018 and semiannually on the 15� day of each June and December thereafter until the principal is paid in fu1L Interest and principal shall be paid to the registered holder of a Bond as shown on the records of ownership maintained by the Registrar as of the 15�n day of the month preceding such interest payment date(the "Record Date'�. Interest will be computed on the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to rules of the Municipal Securities Rulemaking Board. GOOD FAITH DEPOSITS Good faith deposits in the amount of $94,100 far the Series 2018A Bonds ("Series 2018A DeposiY�, $10,200 far the Series 2018B Bonds ("Series 2018B DeposiY�, (collectively the "Deposits'� is required from the lowest bidder only. Each lowest bidder is required to submit such respective deposit payable to the order of the City in the form of either(i)a cashier's check provided to the City or its Municipal Advisor priar to the opening of bids ar (ii) a wire transfer as instructed by the City's Municipal Advisor not later than 1:00 P.M. Central Time on the day of sale of the Bonds. If not so received,the bid of the lowest bidder may be rejected and the City may direct the second lowest bidder to submit a deposit and thereafter may award the sale of the Bonds to the same. No interest on the Deposits will accrue to the successful bidder(s) (the "Purchaser(s)'�. The Deposits will be applied to the respective purchase prices of the Bonds. In the event a Purchaser(s)fails to honor its accepted bid proposal,the Deposits will be retained by the City. *Preliminary; subject to change. FORM OF BIDS AND AWARD All bids shall be unconditional for each series of the Bonds for a price not less than $9,334,720 far the Series 2018A Bonds, and $1,012,860 far the Series 2018B Bonds, plus accrued interest, if any, and shall specify the rate or rates of interest in conformity to the limitations set forth under the "RATES OF INTEREST" section. Bids must be submitted on or in substantial compliance with the OFFICIAL BID FORM provided by the City. The Bonds will be awarded to the bidder offering the lowest interest rate to be deterxnined on a true interest cost(the`°PIC'�basis assuming compliance with the"GOOD FAITH DEPOSITS"section. The TIC shall be determined by the present value method, i.e., by ascertaining the semiannual rate, compounded semiannually,necessary to discount to presentvalue as of the dated date of the Bonds,the amount payable on each interest payment date and on each stated maturity date or earlier mandatory redemption, so that the aggregate of such amounts will equal the aggregate purchase price offered therefore. The TIC shall be stated in terxns of an annual percentage rate and shall be that rate of interest,which is twice the semiannual rate so ascertained(also known as the Canadian Method). The TIC shall be as deterxnined by the Municipal Advisor based on the TERMS OF OFFERING and all amendments, and on the bids as submitted. The Municipal Advisor's computation of the TIC of each bid shall be controlling. In the event of tie bids for the lowest TIC, the Bonds will be awarded by lot The City will reserve the right to: (i) waive non-substantive inforxnalities of any bid or of matters relating to the receipt of bids and award of the Bonds, (ii)reject all bids without cause and(iii)reject any bid which the City determines to have failed to comply with the terxns herein. RATES OF INTEREST The rates of interest specified in the bidder's proposal must conform to the following limitations: (a) For each respective series, each annual maturity must bear the same interest rate. Each annual maturity must bear a single rate of interest from the dated date of the Bonds to the date of maturity. (b) Rates of interest bid must be in multiples of one-eighth or one-twentieth of one percent. (c) For each respective series,each rate of interest specified for Bonds of any annual mabxrity shall not be less than a rate of interest specified for any earlier maturity. Rates must be level or in ascending order. RECEIPT OF BIDS Forms of Bids: Bids must be submitted on or in substantial compliance with the TERMS OF OFFERING and OFFICIAL BID FORM provided by the City ar through PARITY� competitive bidding system (the "Internet Bid System'�. The City shall not be responsible for malfunction or mistake made by any person, or as a result of the use of an electronic bid or the means used to deliver or complete a bid. The use of such facilities or means is at the sole risk of the prospective bidder who shall be bound by the terms of the bid as received. No bid will be accepted after the time specified in the TERMS OF OFFERING. The time as maintained by the Internet Bid System shall constitute the official time with respect to all bids submitted. A bid may be withdrawn before the bid deadline using the same method used to submit the bid. If more than one bid is received from a bidder,the last bid received shall be considered. Sealed Biddin¢: Sealed bids may be submitted and will be received at the City Hall, 50 West 13"' Street, Dubuque, Iowa 52001. Electronic Internet Biddine: Electronic internet bids must be submitted through the Internet Bid System. Inforxnation about the Internet Bid System may be obtained by calling(212) 404-8102. Each bidder shall be solely responsible for making necessary arrangements to access the Internet Bid System for purposes of submitting its internet bid in a timely manner and in compliance with the requirements of the TERMS OF OFFERING and OFFICIAL BID FORM. The City is perxnitting bidders to use the services of the Internet Bid System solely as a communication mechanism to conduct the Internet bidding and the Internet Bid System is not an agent of the City. Provisions of the TERMS OF OFF'ERING and OFFICIAL BID FORM shall control in the event of conflict with inforxnation provided by the Internet Bid System. Electronic Facsimile Biddin¢: Electronic facsimile bids will be received at City Hall, Dubuque, Iowa (facsimile number. (563) 589-0890) ar the office of the City's Municipal Advisar (515) 259-8193. Electronic facsimile bids will be sealed and treated as sealed bids. Facsimile Transmissions received after the deadline will be rejected. Bidders electing to submit bids via facsimile transmission bear full responsibility far the transmission of such bid. Neither the City nor its agents shall be responsible for malfunction or mistake made by any person, or as a result of the use of the facsimile facilities or any other means used to deliver or complete a bid. The use of such facilities or means is at the sole risk of the prospective bidder who shall be bound by the terxns of the bid as received. Neither the City nor its agents will assume liability far the inability of the bidder to reach the above named facsimile numbers prior to the time of sale specified above. Time of receipt shall be the time recorded by the facsimile operator receiving the bids. BOOK-ENTRY-ONLY ISSUANCE The Bonds will be issued by means of a book-entry only system with no physical distribution of bonds made to the public. The Bonds will be issued in fully registered form and one note certificate,representing the aggregate principal amount of the Bonds maturing in each year will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC'�, New York, New York, which will act as securities depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of$5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the Registrar to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC;transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The Purchaser(s), as a condition of delivery of the Bonds,will be required to deposit the bond certificates with DTC. MLTNICIPAL BOND INSi JRANCE AT OPTION OF THE PURCHASER(S) If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefore at the option of the bidder, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the Purchaser(s). Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the Purchaser(s), except that, if the City has requested and received a rating on the Bonds from a rating agency,the City will pay that initial rating fee. Any other rating agency fees shall be the responsibility of the Purchaser(s). Failure of the municipal bond insurer to issue the policy after the Bonds have been awarded to the Purchaser(s) shall not constibxte cause for failure or refusal by the Purchaser(s)to accept delivery on the Bonds. The City reserves the right in its sole discretion to accept or deny changes to the financing documents requested by the insurer selected by the Purchaser(s). DELIVERY The Bonds will be delivered to the Purchaser(s)via Fast Automated Securities Transfer("FAST'�delivery with the Registrar holding the Bonds on behalf of DTC,against full payment in immediately available cash or federal funds. The Bonds are expected to be delivered within forty-five days after the sale. Should delivery be delayed beyond sixty days from the date of sale for any reason except failure of performance by the Purchaser(s),the Purchaser(s)may withdraw their bid and thereafter their interest in and liability for the Bonds will cease. When the Bonds are ready for delivery, the City will give the Purchaser(s) five working days notice of the delivery date and the City will expect payment in full on that date, otherwise reserving the right at its option to determine that the Purchaser failed to comply with the offer of purchase. INFORMATION FROM PURCHASER(S) Establishment of Issue Price(10%Test to Apply if Competitive Sale Requirements are Not Satisfied) The winning bidder shall assist the City in establishing the issue price of the Series 2018A Bonds and shall execute and deliver to the City at Closing an"issue price"or similar certificate setting forth the reasonably expected initial offering price to the public or the sales price or prices of the Series 2018A Bonds, together with the supporting pricing wires or equivalent communications, substantially in the forms attached hereto as Ez�hibit A to this Terms of Offering,with such modifications as may be appropriate or necessary, in the reasonable judgxnent of the winning bidder,the City and Bond Counsel. The City intends that the provisions of Treasury Regulation Section 1.148-1(fl(3)(i) (defming "competitive sale" for purposes of establishing the issue price of the Series 2018A Bonds) will apply to the initial sale of the Series 2018ABonds (the "competitive sale requirements'�because: (1) the City shall disseminate this Terms of Offering to potential underwriters in a manner that is reasonably designed to reach potential underwriters; (2) all bidders shall have an equal opporbxnity to bid; (3) the City may receive bids from at leastthree underwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds; and (4) the City anticipates awarding the sale of the Series 2018ABonds to the bidder who submits a firm offer to purchase the Series 2018A Bonds at the highest price (or lowest hue interest cost), as set forth in this Terms of Offering. Any bid submitted pursuant to this Terxns of Offering shall be considered a firm offer for the purchase of the Series 2018A Bonds, as specified in the bid. In the event that the competitive sale requirements are not satisfied,the City shall so advise the winning bidder. The City shall treatthe first price at which 10%of a mabxrity of the Series 2018ABonds(the"10% tesY�is sold to the public as the issue price of that maturity,applied on a maturity-by-maturity basis(and if different interest rates apply within a maturity,to each separate CUSIP number within that maturity). The winning bidder shall advise the City if any maturity of the Series 2018A Bonds satisfies the 10%test as of the date and time of the award of the Series 2018A Bonds. The City will �require bidders to comply with the "hold-the-offering-price rule" and therefore does not intend to use the initial offering price to the public as of the sale date of any maturity of the Series 2018A Bonds as the issue price of that maturity. Bids will �be subject to cancellation in the event that the competitive sale requirements are not satisfied. Bidders should prepare their bids on the assumption that all of the maturities of the Series 2018A Bonds will be subject to the 10%test in order to establish the issue price of the Series 2018A Bonds. If the competitive sale reguirements are not satisfied, then until the 10%test has been satisfied as to each maturity of the Series 2018A Bonds, the winning bidder agrees to promptly report to the City the prices at which the unsold Series 2018A Bonds of that maturity have been sold to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until the 10% test has been satisfied as to the Series 2018A Bonds of that maturity or until all Series 2018A Bonds of that maturity have been sold. By submitting a bid, each bidder confirms that: (i)any agreement among underwriters,any selling group agreement and each retail distribution agreement(to which the bidder is a party) relating to the initial sale of the Series 2018A Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such retail distribution agreement, as applicable,to report the prices at which it sells to the public the unsold Series 2018A Bonds of each mabxrity allotted to it until it is notified by the winning bidder that either the 10%test has been satisfied as to the Series 2018A Bonds of that maturity or all Series 2018A Bonds of that mabxrity have been sold to the public,if and for so long as directed by the winning bidder and as set forth in the related pricing wires, and(ii)any agreement among underwriters relating to the initial sale of the Series 2018A Bonds to the public,together with the related pricing wires, contains or will contain language obligating each underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Series 2018A Bonds to the public to require each broker-dealer that is a party to such retail distribution agreement to report the prices at which it sells to the public the unsold Series 2018A Bonds of each maturity allotted to it until it is notified by the winning bidder or such underwriter that either the 10%test has been satisfied as to the Series 2018A Bonds of that mabxrity or all Series 2018A Bonds of that maturity have been sold to the public, if and for so long as directed by the winning bidder or such underwriter and as set forth in the related pricing wires. Sales of any Series 2018A Bonds to any person that is a related parly to an underwriter shall not constibxte sales to the public for purposes of this Terms of Offering. Further,for purposes of this Terms of Offering: (1) "publid'means any person other than an underwriter or a related party, (2) `5xnderwriter" means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Series 2018A Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause(A)to participate in the initial sale of the Series 2018A Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Series 2018A Bonds to the public), (3) a purchaser of any of the Series 2018A Bonds is a "related party" to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) at least 50% common awnership of the voting pawer or the total value of their stocl� if both entities are corporations (including direct awnership by one corporation of another), (ii) more than 50% common awnership of their capital interests or profits interests, if both entities are partnerships(including direct awnership by one partnership of another), or(iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct awnership of the applicable stock or interests by one entity of the other), and (4) "sale date"means the date that the Series 2018A Bonds are awarded by the City to the winning bidder. PRELIMINARY OFFICIAL STATEMENT The City has authorized the preparation of a Preliminary Official Statement containing pertinent inforxnation relative to the Bonds. The Preliminary Official Statement when further supplemented with maturity dates, principal amounts, and interest rates of the Bonds, and any other inforxnation required by law or deemed appropriate by the City, shall constibxte a Final Official Statement of the City with respect to the Bonds, as that term is defined in Rule 15c2-12 of the Securities and Exchange Commission (the "Rule'�. By awarding the Bonds to any underwriter or underwriting syndicate submitting an OFFICIAL BID FORM therefore, the City agrees that, no more than seven ('� business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Series 2018A Bonds are awarded up to 25 copies of the Final Official Statement, to the senior managing underwriter of the syndicate to which the Series 2018B Bonds are awarded up to 20 copies of the Final Official Statement to permit each"Participating Underwriter"(as that term is defined in the Rule)to comply with the provisions of such Rule. The City shall treat the senior managing underwriter of the syndicate to which the Bonds are awarded as its designated agent for purposes of distributing copies of the Final Official Statement to the Participating Underwriter. Any underwriter executing and delivering an OFFICIAL BID FORM with respect to the Bonds agrees thereby that if its bid is accepted by the City, (i)it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. CONTINLTING DISCLOSURE In order to assist bidders in complying with paragraph(b)(5) of the Rule,the City will undertake,pursuant to the resolution far the Bonds and the Continuing Disclosure Certificate far the Bonds, to provide certain annual financial inforxnation and notices of the occurrence of certain material events. A description of these undertakings is set forth in APPENDIX D of this Preliminary Official Statement. The City will deliver the Continuing Disclosure Certificate at closing, and any failure on the part of the City to deliver the same shall relieve the Purchaser of its obligation to purchase the Bonds. Within the last five years, as part of continued review of policies and procedures regarding the Rule, the City discovered certain tables for financings related to general obligation and water revenue issuances for the years ending June 30,2012 and 2013 were not included as part of the City's annual financial information, and made supplemental filings related to these issues on May 6, 2014. In addition, a table regarding retail sales required as part of the City's previous continuing disclosure undertakings was not included as part of the City's annual financial information for the year ending June 30, 2013, and was subsequently filed on May 27, 2014. The City has taken steps internally to assure future compliance with its Disclosure Covenants. Notices of late filings have been filed related to these matters. CUSIP NLTMBERS It is anticipated that Committee on Uniforxn Security Identification Procedures ("CUSIP'�numbers will be printed on the Bonds and the Purchaser must agree in the bid proposal to pay the cost thereo£ In no event will the City,Bond Counsel ar Municipal Advisor be responsible for the review or express any opinion that the CUSIP numbers are correct Incorrect CUSIP numbers on said Bonds shall not be cause far the Purchaser to refuse to accept delivery of said Bonds. BY ORDER OF THE CITY COUNCIL City of Dubuque 50 West 13"' Street Dubuque, IA 52001 EXHIBIT A [ISSUE PRICE CERTIFICATE IF COMPETITIVE SALE REQUIREMENTS ARE MET] PURCHASER'S CERTIFICATE The undersigned, on behalf of ("Purchaser'�, hereby certifies as setforth below with respect to the sale of the above-captioned obligations (the `Bonds'�. 1. Reasonably Expectedlnitial Offering Price. (a) As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the Public by Purchaser are the prices listed in Schedule A(the "Expected Offering Prices'�. The Expected Offering Prices are the prices for the Maturities of the Bonds used by Purchaser in formulating its bid to purchase the Bonds. Attached as Schedule B is a true and correct copy of the bid provided by Purchaser to purchase the Bonds. (b) Purchaser was not given the opporiunity to review other bids priar to submitting its bid. (c) The bid submitted by Purchaser constituted a firm offer to purchase the Bonds. 2. Defined Terms. (a) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (b) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party"for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (c) Sale Date means the first day on which there is a binding contract in writing far the sale of a Maturity of the Bonds. The Sale Date of the Bonds is March 5, 2018. (d) Underwriter means (i)the Purchaser or any person that agrees pursuantto a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale ofthe Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Purchaser's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. PURCHASER By: Name: Dated: April 11, 2018 SCHEDULE A EXPECTED OFFERING PRICES (Attachec� SCHEDULE B COPY OF UNDERWRITER'S BID (Attachec� [ISSUE PRICE CERTIFICATE IF COMPETITIVE SALE REQUIREMENTS ARE NOT MET] PURCHASER'S CERTIFICATE The undersigned, on behalf of ("Purchaser"), [on behalf of itself and [NAMES OF OTHER UNDERWRITERS] (together, the "Underwriting Group"),] hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the `Bonds"). 1. Sale ofthe Bonds. As ofthe date ofthis certificate,for each Maturity ofthe Bonds, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A. 3. Defined Terms. (d) Issuer means the City of Dubuque, Iowa. (b) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (c) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party"for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) Underwriter means (i)the Purchaser or any person that agrees pursuantto a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale ofthe Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Purchaser's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. PURCHASER By: Name: Dated: April 11, 2018 SCHEDULE A SALE PRICES (Attachec� CITY OF DUBUQUE, IOWA PRELIMINARY OFFICIAL STATEMENT CITY OF DUBUQUE, IOWA $9,410,000* General Obligation Bonds, Series 2018A $1,020,000* Taxable General Obligation Refunding Bonds, Series 2018B INTRODUCTION This Preliminary OfFicial Statement contains inforxnation relating to the City of Dubuque, Iowa (the "City'� and its issuance of$9,410,000* General Obligation Bonds, Series 2018A(the"Series 2018ABonds'�,and the$1,020,000* Taxable General Obligation Refunding Bonds, Series 2018B (the "Series 2018B Bonds'� (collectively the `Bonds'�. This Official Statement has been executed on behalf of the City and by its Budget Director and may be distributed in connection with the sale of the Bonds authorized therein. Inquiries may be directed to Independent Public Advisors, LLC, 8805 Chambery Blvd, Suite 300, #114, Johnston, Iowa 50131, or by telephoning (515) 259-8193. Information can also be obtained from Ms.Jenny Larson, Budget Director, City of Dubuque, 50 West 13"' Street, Dubuque,Iowa 52001,or by telephoning 563-589-4110. AUTHORITY AND Pi JRPOSE The Bonds are being issued pursuant to Division III of Chapter 384 of the Code of Iowa, and resolutions to be adopted by the City Council of the City. Proceeds of the Bonds will be used far to pay costs of the refunding or refinancing certain outstanding indebtedness of the City,as described herein.In addition,the Series 2018A Bonds will be used to provide funds to pay the costs of equipping the public works and transit departments. The following bonds (the"Refunded Bonds") are being refunded by the Bonds. The Refunded Bonds are being called on June 1, 2018 at a call price of 100%. Refunding Refunded Principal Interest Series to be Refunded Series Maturities Amount Rate General Obligation Bonds, Series 2011A Series 2018A 06/O1/2019 290,000 3.000% 06/O1/2020 300,000 3.000% 06/O1/2021 310,000 3.000% 06/O1/2022 320,000 3.000% 06/O1/2023 330,000 3.000% 06/O1/2024 340,000 3.000% 06/O1/2025 355,000 3.125% 06/O1/2026 370,000 3.500% 06/O1/2027 385,000 3.750% 06/O1/2028 400,000 3.750% 06/O1/2029 420,000 4.000% 06/O1/2030 435,000 4.000% 06/O1/2031 455,000 4.000% 2 Refunding Refunded Principal Interest Series to be Refunded Series Maturities Amount Rate General Obligation Bonds, Series 2012E Series 2018A 06/O1/2019 215,000 2.000% 06/O1/2020 220,000 2.000% 06/O1/2021 225,000 2.000% 06/O1/2022 230,000 2.000% 06/O1/2023 230,000 2.125% 06/O1/2024 155,000 2.250% 06/O1/2025 160,000 2.375% 06/O1/2026 165,000 2.500% 06/O1/2027 170,000 2.500% 06/O1/2028 175,000 3.000% 06/O1/2029 165,000 3.000% 06/O1/2030 165,000 3.000% 06/O1/2031 170,000 3.000% 06/O1/2032 180,000 3.000% General Obligation Urban Renewal Bonds, Series 2012H Series 2018A 06/O1/2019 105,000 2.000% 06/O1/2020 110,000 2.000% 06/O1/2021 110,000 2.000% 06/O1/2022 115,000 2.000% 06/O1/2023 115,000 2.125% 06/O1/2024 120,000 2.250% 06/O1/2025 120,000 2.375% 06/O1/2026 125,000 2.500% 06/O1/2027 125,000 2.500% 06/O1/2028 130,000 2.625% 06/O1/2029 135,000 2.750% 06/O1/2030 140,000 2.750% 06/O1/2031 140,000 3.000% 06/O1/2032 145,000 3.000% Taxable General Obligation Bonds, Series 2011B Series 2018B 06/O1/2019 105,000 3.000% 06/O1/2020 110,000 3.250% 06/O1/2021 115,000 3.500% 06/O1/2022 120,000 3.750% 06/O1/2023 125,000 3.900% 06/O1/2024 130,000 4.050% 06/O1/2025 135,000 4.100% 06/O1/2026 145,000 4.350% 3 The estimated Sources and Uses of the Bonds are as follows: Sources of Funds Series 2018A Bonds Series 2018B Bonds Par Amount* $9,410,000.00 $1,020,000.00 Uses of Funds Project Fund $200,000.00 $0.00 Bond Redemption 9,070,000.00 985,000.00 Underwriter's Discount 75,280.00 7,140.00 CostofIssuance& 64.720.00 27.860.00 Rounding Total $9,410,000.00 $1,020,000.00 *Preliminary; subject to change. OPTIONAL REDEMPTION OF THE BONDS The Series 2018A Bonds due after June 1, 2026 will be subject to call priar to maturity in whole, or from time to time in part, in any order of maturity and within a maturity by lot on said date or on any date thereafter at the option of the City, upon terxns of par plus accrued interest to date of call. Written notice of such call shall be given at least thirty(30)days priar to the date fixed for redemption to the registered owners of the Bonds to be redeemed at the address shown on the registration books. The Series 2018B Bonds are not subject to redemption priar to maturity. INTEREST ON THE BONDS Interest on the Bonds will be payable on December 1, 2018 and semiannually on the lst day of June and December thereafter. Interest and principal shall be paid to the registered holder of a note as shown on the records of ownership maintained by the Registrar on the 15th day of the month preceding said interest payment date(the"Record Date'�. Interest will be computed on the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to rules of the Municipal Securities Rulemaking Board. PAYMENT OF AND SECURITY FOR THE BONDS The Bonds are general obligations of the City and the unlimited taxing powers of the City are irrevocably pledged for their payment. Upon issuance of the Bonds,unless funds are available from other sources,the City will levy taxes for the years and in amounts sufficient to provide 100% of annual principal and interest due. The City is required to levy ad valorem taxes upon all taxable properly in the City without limit as to rate or amount sufficient to pay the debt service except to the extent that other monies are deposited in the debt service fund for such purposes. Nothing in the resolutions authorizing the Bonds prohibits or limits the ability of the City to use legally available moneys other than the proceeds of the general ad valorem property taxes levied as described in the preceding paragraph to pay all or any portion of the principal of or interest on the Bonds. If and to the extent such other legally available moneys are used to pay the principal of or interest on the Bonds,the City may,but shall not be required to, (a) reduce the amount of taxes levied for such purpose, as described in the preceding paragraph; ar (b) use proceeds of taxes levied, as described in the preceding paragraph,to reimburse the fund or account from which such other legally available moneys are withdrawn for the amount withdrawn from such fund or account to pay the principal of or interest on the Bonds. The City's obligation to pay the principal of and interest on the Bonds is on parity with the City's obligation to pay the principal of and interest on any other of its general obligation debt secured by a covenant to levy taxes within the City, including any such debt issued or incurred after the issuance of the Bonds. The resolutions authorizing issuance of the Bonds do not restrict the City's ability to issue or incur additional general obligation debt, although issuance 4 of additional general obligation debt is subject to the same constitutional and stabxtory limitations that apply to the issuance of the Bonds. For a further description of the City's outstanding general obligation debt upon issuance of the Bonds and the annual debt service on the Bonds, see DIRECT DEBT under IIVDEBTEDNESS herein. For a description of certain constitutional and stabxtory limits on the issuance of general obligation debt, see DEBT LINIIT under INDEBTEDNESSherein. BOOK-ENTRY-ONLY ISSUANCE The information contained in the follawing paragraphs of this subsection `Book-Entry-Only Issuance" has been extracted from a schedule prepared by Depository Trust Company (`7JTC) entitled "SA�I7PLE OFFERING DOCUMENT LANGUAGE DESCRIBING DTC AND BOOK-ENTRY-ONLY ISSUANCE." The information in this section concerning DTC and DTCs book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. The Depository Trust Company ("DTC'�, New York, NY, will act as securities depository far the securities (the "Securities'�. The Securities will be issued as fully-registered securities registered in the name of Cede&Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New Yark Banking Law, a "banking organization"within the meaning of the New Yark Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New Yark Uniforxn Commercial Code, and a "clearing agency"registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants (the "Direct Participants'� deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust& Clearing Corporation (`DTCC'�. DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants'�. DTC has Standard & Poor's highest rating: AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. Purchases of Securities under the DTC system must be made by ar through Direct Participants, which will receive a credit far the Securities on DTC's records. The ownership interest of each actual purchaser of each Security (the `Beneficial Owner'� is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirxnations providing details of the transaction, as well as periodic statements of their holdings, from the Direct ar Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system far the Securities is discontinued. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative 5 of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited,which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any stabxtory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augxnent the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example,Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities far their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co., nor any other DTC nominee, will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's AdNII Procedures. Under its usual procedures,DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date identified in a listing attached to the Omnibus Proxy. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held far the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, ar the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC, is the responsibility of the City or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Securities purchased ar tendered, through its Participant, to Tender/Remarketing Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to Tender/Remarketing Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book- entry credit of tendered Securities to Tender/Remarketing Agent's DTC account. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the City or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. The inforxnation in this section concerning DTC and DTC's book-entry system has been obtained from sources that the City believes to be reliable,but the City takes no responsibility far the accuracy thereof. 6 FUTLTRE FINANCING The City regularly evaluates its debt for refunding opportunities, however there are no issuances planned. LITIGATION The City Attorney has estimated that all potential settlements and lawsuits against the City as of December 17,2017,not covered by insurance would not materially affect the financial position of the City. The City has authority to levy additional taxes (outside the regular limit)to cover uninsured judgments against the City. To the knowledge of the City, no other litigation is pending ar threatened which, in the opinion of the City Attorney, if decided adversely to the City would be likely to result, either individually or in the aggregate, in final judgxnents against the City which would materially adversely affect its ability to make debt service payments on Bonds when due, or its obligations under the Resolution, or materially adversely affect its financial condition. DEBT PAYMENT HISTORY The City knows of no instance in which it has defaulted in the payment of principal or interest on its debt. LEGAL MATTERS The Bonds are subject to approval as to certain matters by Ahlers&Cooney,P.C. of Des Moines,Iowa as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement and will not pass upon its accuracy, completeness or sufficiency. Bond Counsel has not examined, nor attempted to examine or verify, any of the financial or statistical statements or data contained in this Preliminary Official Statement,and will express no opinion with respect thereto. The FORM OF LEGAL OPI�ONS as set out in APPENDIX B to this Preliminary Official Statement,will be delivered at closing. The legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgxnent of the attorneys rendering the opinions as to legal issues expressly addressed therein. By rendering legal opinions, the opinion giver does not become an insurer or guarantor of the result indicated by that expression of professional judgxnent, or of the transaction on which the opinions are rendered, or of the future performance of parties to the transaction. Nor does the rendering of opinions guarantee the outcome of any legal dispute that may arise out of the transaction. There is no bond trustee or similar person to monitor or enforce the provisions of the resolutions for the Bonds. The owners of the Bonds should, therefore,be prepared to enforce such provisions themselves if the need to do so arises. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the City and certain other public officials to perform the terxns of the resolutions for the Bonds)may have to be enforced from year to year. The obligation to pay general ad valorem property taxes is secured by a statutory lien upon the taxed property, but is not an obligation for which a properly owner may be held personally liable in the event of a deficiency. The owners of the Bonds cannot foreclose on property within the boundaries of the City or sell such property in order to pay the debt service on the Bonds. See LEVIES AND TAX COLLECTIONS herein,for a description of properly tax collection and enforcement In addition,the enforceability of the rights and remedies of owners of the Bonds may be subject to limitation as set forth in Bond Counsel's opinions. The remedies available to the owners of the Bonds upon an event of default under the Bond Resolution,in certain respects,may require judicial action,which is often subject to discretion and delay. Under existing law, including specifically the federal bankruptcy code,certain of the remedies specified in the Bond resolution may not be readily available or may be limited. A court may decide not to order the specific perforxnance of the covenants contained in these documents. The opinions will state, in part,that the obligations of the City with respect to the Bonds may be subject to bax�la�uptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable, to the exercise of judicial discretion in 7 appropriate cases and to the exercise by the State and its governmental bodies of the police power inherent in the sovereignty of the State and to the exercise by the United States of America of the powers delegated to it by the Constitution of the United States of America. No representation is made, and no assurance is given, that the enforcement of any remedies with respect to such assets will result in sufficient funds to pay all amounts due under the Bond Resolution, including principal of and interest on the Bonds. FEDERAL TAX MATTERS With Respect to the Series 2018A Bonds(the"Exempt Bonds") Tax Exemvtions and Related Considerations:Federal tax law contains a number of requirements and restrictions that apply to the Bonds. These include investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of bond proceeds and facilities financed with bond proceeds, and certain other matters. The City has covenanted to comply with all requirements that must be satisfied in order far the interest on the Exempt Bonds to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the Exempt Bonds to become includable in gross income for federal income tax purposes retroactively to the date of issuance of the Exempt Bonds. Subject to the City's compliance with the above referenced covenants,under present law, in the opinion of Bond Counsel, interest on the Exempt Bonds is excludable from gross income of the owners thereof for federal income tax purposes, and is not included as an item of tax preference in computing the federal alternative minimum tax. However, with respect to corporations (as defined for federal income tax purposes), such interest is included in adjusted current earnings far the purpose of determining the federal alternative minimum tax for such corporations for taxable years beginning before January 1, 2018. Prospective purchasers of the Exempt Bonds should be aware that ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers,including,without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred(or continued)indebtedness to purchase or carry tax-exempt obligations. Bond Counsel will not express any opinion as to such collateral tax consequences. Prospective purchasers of the Exempt Bonds should consult their tax advisors as to collateral federal income tax consequences. Tax Accountin¢Treatxnent of Discount and Premium on Certain Bonds. The initial public offering price of certain Exempt Bonds (the"Exempt Discount Bonds'�may be less than the amount payable on such Bonds at maturity. An amount equal to the difference between the initial public offering price of Exempt Discount Bonds (assuming that a substantial amount of the Discount Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes original issue discount to the initial purchaser of such Discount Bonds. A portion of such original issue discount allocable to the holding period of such Exempt Discount Bonds by the initial purchaser will, upon the disposition of such Exempt Discount Bonds (including by reason of its payment at maturity), be treated as interest excludable from gross income, rather than as taxable gain, for federal income tax purposes, on the same terxns and conditions as those for other interest on the Bonds described above under"FEDERAI,TAX MATTERS". Such interest is considered to be accrued actuarially in accordance with the constant interest method over the life of Exempt Discount Bonds, taking into account the semi- annual compounding of accrued interest, at the yield to maturity on such Exempt Discount Bonds and generally will be allocated to an original purchaser in a different amount from the amount of the payment denominated as interest acbxally received by the original purchaser during the tax year. However, such interest may be required to be taken into account in determining the amount of the branch profits tax applicable to certain foreign corporations doing business in the United States, even though there will not be a corresponding cash payment. In addition,the accrual of such interest may result in certain other collateral federal income tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance 8 companies, S corporations with "subchapter C"earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. Moreover, in the event of the redemption, sale or other taxable disposition of Exempt Discount Bonds by the initial owner priar to mabxrity,the amount realized by such owner in excess of the basis of such Exempt Discount Bonds in the hands of such owner(adjusted upward by the portion of the original issue discount allocable to the period for which such Exempt Discount Bonds were held) is includable in gross income. Owners of Exempt Discount Bonds should consult with their own tax advisors with respectto the deterxnination of accrued original issue discount on Exempt Discount Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Exempt Discount Bonds. It is possible that, under applicable provisions governing deterxnination of state and local income taxes, accrued interest on Exempt Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment. The initial public offering price of certain Exempt Bonds (the"Exempt Premium Bonds'�may be greater than the amount of such Bonds at maturity. An amount equal to the difference between the initial public offering price of Exempt Premium Bonds (assuming that a substantial amount of the Exempt Premium Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes premium to the initial purchaser of such Exempt Premium Bonds. The basis for federal income tax purposes of Exempt Premium Bonds in the hands of such initial purchaser must be reduced each year by the amortizable bond premium, although no federal income tax deduction is allowed as a result of such reduction in basis for amortizable bond premium. Such reduction in basis will increase the amount of any gain (or decrease the amount of any loss)to be recognized for federal income tax purposes upon a sale or other taxable disposition of Exempt Premium Bonds. The amount of premium which is amortizable each year by an initial purchaser is determined by using such purchaser's yield to maturity. Purchasers of the Exempt Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond premium on Exempt Premium Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Exempt Premium Bonds. Disclaimer Re¢ardin¢Federal Tax Discussion: The federal income tax discussion set forth above is included for general information only and may not be applicable depending upon a beneficial owner's particular situation. Beneficial owners should consult their tax advisors with respect to the tax consequences to them of the purchase, ownership, and disposition of the Bonds,including the tax consequences under federal,state,local,foreign,and other tax laws and the possible effects of changes in federal or other tax laws. Related Tax Matters: The Internal Revenue Service (the "Service'� has an ongoing program of auditing tax-exempt obligations to deterxnine whether, in the view of the Service, interest on such tax-exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Bonds. If an audit is commenced,under current procedures the Service may treat the City as a taxpayer and the bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the marketvalue and liquidity of the Exempt Bonds until the audit is concluded,regardless of the ultimate outcome. Payments of interest on,and proceeds of the sale,redemption or mabxrity of,tax-exempt obligations,including the Exempt Bonds,are in certain cases required to be reported to the Service. Additionally,backup withholding may apply to any such payments to any Bond owner who fails to provide an accurate Form W-9 Request for Taxpayer ldentification Number and Certification, or a substantially identical form, ar to any bond owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes. Current and future legislative proposals, including some that carry retroactive effective dates, if enacted into law, court decisions, or clarification of the Code may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation, or otherwise prevent owners of the Bonds from realizing the full current benefit of the tax status of such 9 interest. For example, on December 22, 2017, the Tax Cuts and Jobs Act("TCJA'� was signed into law. Far tax years beginning after December 31, 2017, the TCJA, among other things, significantly changes the income tax rates on individuals and corporations, modifies the current provisions relative to the federal alternative minimum tax on individuals, and eliminates the federal alternative minimum tax for corporations. The TCJA, ar the introduction or enactxnent of any other legislative proposals, clarification of the Code or court decisions may also affect, perhaps significantly,the market price for,or marketability of,the Bonds.Prospective purchasers of the Bonds should consult their own tax advisors regarding the TCJA, as well as any pending or proposed tax legislation, as to which Bond Counsel expresses no opinion other than as set forth in its legal opinion. Ovinion: Bond Counsel's opinion is not a guarantee of a result, or of the transaction on which the opinion is rendered, or of the fubxre performance of parties to the transaction,but represents its legal judgxnent based upon its review of existing statutes,regulations,published rulings and court decisions and the representations and covenants of the City described in this section. No ruling has been sought from the Service with respect to the matters addressed in the opinion of Bond Counsel and Bond Counsel's opinion is not binding on the Service. Bond Counsel assumes no obligation to update its opinion after the issue date to reflect any further action, fact or circumstance, or change in law or interpretation, or otherwise. Not Qualified Tax-Exempt Obli¢ations: The City will NOT designate the Series 2018A Bonds as "qualified tax- exempt obligations"under the exception provided in Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code'�. With Respect to the Series 2018B Bonds: Federal Taxability and Related Considerations: The following discussion is a summary of certain Federal income tax consequences relating to the purchase, ownership, and disposition of the Series 2018B Bonds, based on certain relevant provisions of the Code. This discussion does not purport to deal with all aspects of Federal income taxation that may affect particular investors in light of their individual circumstances,and is limited to investors who hold the Series 2018B Bonds as capital assets under Section 1221 of the Code, which generally means property held for investxnent. Prospective investors, particularly those subject to special rules, should consult their tax advisors regarding the consequences of purchasing, owning, and disposing of the Series 2018B Bonds for Federal income tax purposes, and for State and local tax purposes. In general,interest on the Series 2018B Bonds is includable in the gross income of the owners thereof as ordinary interest income for Federal income tax purposes. Not Qualified Tax-Exemvt Obli¢ations: The City will NOT designate the Series 2018B Bonds as "qualified tax- exempt obligations"under the exception provided in Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code'�. STATE OF IOWA TAX MATTERS Interest on the Series 2018A Bonds and the Series 2018B Bonds is NOT exempt from present Iowa income taxes. Ownership of the Series 2018B Bonds and Series 2018B Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Series 2018B Bonds and Series 2018B Bonds. Prospective purchasers of the Series 2018A Bonds and Series 2018B Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. CHANGES IN FEDERAL AND STATE TAX LAW From time to time, there are executive, regulatory and legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to herein or adversely affect the marketability or market value of the Bonds or otherwise prevent holders of the Bonds from realizing the full benefit of the tax exemption 10 of interest on the Bonds. Further, such proposals may impact the marketability or market value of the Bonds simply by being proposed. It cannot be predicted whether or in what form any such proposals might be enacted or whether if enacted it would apply to bonds issued priar to enactment In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value, marketability ar tax status of the Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Bonds would be impacted thereby. It is possible that further legislation will be proposed or introduced that could result in changes in the way that tax exemption is calculated, or whether interest on certain securities are exempt from taxation at all. Prospective purchasers should consult with their own tax advisors regarding any other pending or proposed federal income tax legislation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any proposed or pending legislation, regulatory initiatives or litigation. ALL POTENTIAL PURCHASERS OF THE BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS WITH RESPECT TO FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF OWNERSHIP OF THE BONDS (INCLUDING BUT NOT LIMITED TO THOSE LISTED ABOVE). RATING The Bonds have an uninsured rating of ` ' by Moody's Investors Service (Moody's), with no outlook. In addition, Moody's currently rates the City's outstanding uninsured General Obligation Debt as ` 'with no outlook. Such ratings reflect only the view of the rating agency and any explanation of the significance of such rating may only be obtained from the respective rating agency. There is no assurance that such ratings will continue for any period of time ar that they will not be revised or withdrawn. INVESTMENT CONSIDERATIONS A PROSPECTIVE PURCHASER OF THE BONDS SHOULD BE AWARE THAT THERE ARE CERTAIN INVESTMENT CONSIDERATIONS ASSOCIATED WITH THE BONDS. EACH PROSPECTIVE PURCHASER OF THE BONDS IS ENCOiJRAGED TO READ THIS PRELIMINARY OFFICIAL STATEMENT IN ITS ENTIRETY, AND TO GIVE PARTICULAR ATTENTION TO THE CONSIDERATIONS DESCRIBED BELOW WHICH,AMONG OTHERS,COULD AFFECT THE PAYMENT OF DEBT SERVICE AND THE NI.ARKET PRICE ON THE BONDS. THE FOLLOWING STATEMENTS REGARDING CERTAIN INVESTMENT CONSIDERATIONS SHOULD NOT BE CONSIDERED A COMPLETE DESCRIPTION OF ALL CONSIDERATIONS IN THE DECISION TO PURCHASE THE BONDS. Loss of Tax Exemption: As discussed under the heading"FEDERAI,TAX MATTERS"herein,the interest on the Exempt Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of delivery of the Exempt Bonds, as a result of acts or omissions of the Issuer in violation of its covenants in the Resolution. Should such an event of taxability occur, the Exempt Bonds would not be subject to a special prepayment and would remain outstanding until maturity or until prepaid under the prepayment provisions contained in the Exempt Bonds, and there is no provision for an adjustment of the interest rate on the Exempt Bonds. It is also possible that actions of the Issuer after the closing of the Exempt Bonds will alter the tax status of the Exempt Bonds, and,in the extreme,remove the tax exempt stabxs from the Exempt Bonds. In that instance, the Exempt Bonds are not subject to mandatory prepayment, and the interest rate on the Exempt Bonds does not increase or otherwise reset. A deterxnination of taxability on the Exempt Bonds, after closing of the Exempt Bonds, could materially adversely affect the value and marketability of the Exempt Bonds. 11 Additional Indebtedness: The City reserves the right to issue additional bonds payable from the same sources and ranking on a parity with each series of the Bonds. Inveshnent Ratine: The rating assigned to the Bonds by Moody's Investors Service, Inc. (the "Rating Agency'� reflects only the Rating Agency's view of the likelihood the noteholders will receive payments of interest when due and principal on the Bonds on their respective mabxrity dates. There is no assurance that the rating will remain for any given period of time ar that the rating will not be lowered, suspended or withdrawn by the Rating Agency if, in the Rating Agency's judgxnent, circumstances so warrant based upon factors prevailing at the time. The lowering, suspension or withdrawal of the inveshnent rating initially assigned to the Bonds could adversely affect the market price and the market far the Bonds. Additional regulation of rating agencies could materially alter the methodology,rating levels,and types of ratings available, and these changes, if ever, could materially affect the market value of the Bonds. DTGBeneficial Owners: Beneficial Owners of the Bonds may experience some delay in the receipt of distributions of principal of and interest on the Bonds since such distributions will be forwarded by the Paying Agent to DTC and DTC will credit such distributions to the accounts of the Participants which will thereafter credit them to the accounts of the Beneficial Owner either directly or indirectly through indirect Participants. Neither the Issuer nor the Paying Agent will have any responsibility or obligation to assure that any such notice or payment is forwarded by DTC to any Participants or by any Participant to any Beneficial Owner. In addition,since transactions in the Bonds can be effected only through DTC Participants,indirectparticipants and certain banks, the ability of a Beneficial Owner to pledge the Bonds to persons or entities that do not participate in the DTC system, or otherwise to take actions in respect of such Bonds, may be limited due to lack of a physical certificate. Beneficial Owners will be perxnitted to exercise the rights of registered Owners only indirectly through DTC and the Participants. See`BOOK ENTRY-ONLY ISSUANCE." Secondary Market: There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history of economic prospects connected with a particular issue, and secondary marketing practices in connection with a particular Bond or Bonds issue are suspended ar terxninated. Additionally, prices of bond or note issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price of the Bonds. Forward-Lookine Statements: This Official Statement contains statements relating to future results that are `�orward- looking statements" as defined in the Private Securities Litigation Reforxn Act of 1995. When used in this Official Statement, the words "estimate," "forecast," "intend," "expecY' and similar expressions identify forward-looking statements. Any forward-looking statement is subject to uncertainty. Accordingly, such statements are subject to risks that could cause actual results to differ,possibly materially,from those contemplated in such forward-looking statements. Inevitably,some assumptions used to develop forward-looking statements will not be realized or unanticipated events and circumstances may occur. Therefore, investors should be aware that there are likely to be differences between forward looking statements and the actual results. These differences could be material and could impact the availability of funds of the Issuer to pay debt service when due on the Bonds. Redemvtion of Bonds: The Series 2018A Bonds due after June 1, 2026 will be subject to call priar to maturity in whole, or from time to time in part, in any order of maturity and within a mabxrity by lot on said date or on any date thereafter at the option of the City, upon terxns of par plus accrued interest to date of ca1L The redemption of the Bonds priar to their stated maturity may subject noteholders to the risk of reinvestment at a time when comparable returns are not available. The Series 2018B Bonds are not subject to redemption priar to mabxrity. Pendin¢ Federal Tax Le¢islation: From time to time, there are Presidential proposals, proposals of various federal committees, and legislative proposals are pending in Congress that could, if enacted, alter or amend one or more of the federal(or state)tax matters described herein in certain respects or would adversely affect the market value of the Bonds or otherwise prevent holders of the Bonds from realizing the full benefit of the tax exemption of interest on the Exempt Bonds. Further such proposals may impact the marketability or market value of the Bonds simply by being proposed. It cannot be predicted whether or in what forms any of such proposals, either pending ar that may be introduced, may be 12 enacted and there can be no assurance that such proposals will not apply to the Bonds. In addition regulatory actions are from time to time announced or proposed,and litigation threatened or commenced,which if implemented or concluded in a particular manner, could adversely affect the market value, marketability ar tax stabxs of the Bonds. It cannot be predicted whether any such regulatory action will be implemented,how any particular litigation or judicial action will be resolved, or whether the Bonds would be impacted thereby. Tax Lew Procedures: The Bonds are general obligations of the Issuer, payable from and secured by a continuing ad valorem tax levied against all of the property valuation within the Issuer. As part of the budgetary process each fiscal year,the Issuer will have an obligation to request a debt service levy to be applied against all of the taxable property within the Issuer. A failure on the part of the Issuer to make a timely levy request or a levy request by the Issuer that is inaccurate or is insufficient to make full payments of the debt service of the Bonds for a particular fiscal year may cause Bondholders to experience delay in the receipt of distributions of principal of and/or interest on the Bonds. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the Issuer and certain other public officials to perform the terms of the resolution far the Bonds)may have to be enforced from year to year. Summarv: An investment in the Bonds involves an element of risk. The foregoing is intended only as a summary of certain risk factors attendant to an investment in the Bonds. In order for potential investors to identify risk factors and make an informed investxnent decision, potential investors should become thoroughly familiar with this entire Official Statement and the Appendices hereto. MUNICIPAL AD��LSOR The City has retained Independent Public Advisors, LLC, Johnston, Iowa as municipal advisar (the "Municipal Advisor'� in connection with the preparation of the issuance of the Bonds. In preparing the Preliminary Official Statement, the Municipal Advisor has relied on government officials, and other sources to provide accurate information for disclosure purposes. The Municipal Advisor is not obligated to undertake, and has not undertaken, an independent verification of the accuracy,completeness,or fairness of the information contained in the Preliminary Official Statement. Independent Public Advisors, LLC is an independent advisory firxn and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. CONTINLTING DI SCLO SURE In order to assist bidders in complying with paragraph(b)(5)of the Rule,the City will undertake,pursuant to the resolution far the Bonds and the Continuing Disclosure Certificate far the Bonds,to provide certain annual financial information and notices of the occurrence of certain material events. A description of these undertakings is set forth in APPENDIX D of this Preliminary Official Statement. The City will deliver the Continuing Disclosure Certificate at closing, and any failure on the part of the City to deliver the same shall relieve the Purchaser of its obligation to purchase the Bonds. Within the last five years, as part of continued review of policies and procedures regarding the Rule,the City discovered certain tables for financings related to general obligation and water revenue issuances far the years ending June 30, 2012 and 2013 were not included as part of the City's annual financial information, and made supplemental filings related to these issues on May 6, 2014. In addition, a table regarding retail sales required as part of the City's previous continuing disclosure undertakings was not included as part of the City's annual financial information far the year ending June 30, 2013, and was subsequently filed on May 27, 2014. The City has taken steps internally to assure future compliance with its Disclosure Covenants. Notices of late filings have been filed related to these matters. CERTIFICATION The City has authorized the distribution of this Preliminary OfFicial Statement for use in connection with the initial sale of the Bonds. I have reviewed the information contained within the Preliminary Official Statement prepared on behalf of the City of Dubuque, Iowa, by Independent Public Advisors, LLC., Johnston, Iowa, and said Preliminary 13 Official Statement does not contain any material misstatements of fact nor omission of any material fact regarding the issuance of $9,410,000* General Obligation Bonds, Series 2018A, or $1,020,000* Taxable General Obligation Refunding Bonds, Series 2018B. CITY OF DUBUQUE,IOWA /s/Jennv Larson.Bud¢et Director *Preliminary; subjectto change. 14 APPENDIX A- INFORMATION ABOUT THE ISSUER CITY OF DUBUQUE, IOWA CITY HALL 50 W. 13"' Street Dubuque, IA 52001 Telephone 563-589-4100 MAYOR AND CITY COUNCIL Roy D. Buol,Mayor................................................................. Term Expires 2021 Ric W. Jones,At Large............................................................ Term Expires 2021 David T. Resnick,AtLarge..................................................... Term Expires 2019 Brett M. Shaw, Ward 1 ........................................................... Term Expires 2021 Luis Del Toro, Ward 2............................................................. Term Expires 2019 Kate M. Larson Ward 3.......................................................... Term Expires 2021 Jake A. Rios Ward 4................................................................ Term Expires 2019 ADMINISTRATION Michael C. Van Milligen............................................................... CityManager Cori Burbach...................................................................AssistantCityManager Teri Goodman.................................................................AssistantCityManager Jean Nachtm an .........................................................................Finance Director Jenny Larson...............................................................................BudgetDirector Kevin Firnstahl....................................................................................City Clerk FINANCE TEAM Crenna Brumwell, Dubuque, Iowa............................................... CityAttorney Ahlers& Cooney,P.C., Des Moines, Iowa..................................Bond Counsel Ahlers& Cooney,P.C., Des Moines, Iowa.........................Disclosure Counsel Independent Public Advisors, LLC Johnston, Iowa............MunicipalAdvisor A-1 PROPERTY VALUES IOWAPROPERTY VALUATIONS In compliance with Section 441.21 of the Code of Iowa, the State Director of Revenue annually directs all County Auditors to apply prescribed statutory percentages to the assessments of certain categories of real property. The assessments finalized as of January 1 of each year are applied to the following fiscal year. The 2017 final Actual Values were adjusted by the Dubuque County Auditor. The reduced values, determined after the application of rollback percentages, are the Taxable Values subject to tax levy. For assessment year 2017, the Taxable Value rollback rate was 55.6209% of Actual Value for residential property; 54.4480% of Actual Value for agricultural property; 90% of Actual Value for commercial, industrial, and railroad property, 78.7500% of Actual Value for multiresidential property, and 100%of Actual Value for utility property. The Legislabxre's intent has been to limit the growth of statewide taxable valuations for most classes of property to 3% annually; utility taxable valuation growth is limited to 8%. Political subdivisions whose taxable values 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. Ul/2017 VALUATIONS (Taxes payable July 1,2018 through June 30,2019) 100% Taxable Value Actual Value (With Rollback) Residential $2,691,998,204 $1,478,806,673 Commercial 838,619,232 731,643,216 Industrial 96,OSQ317 84,162,777 Multiresidential 167,039,301 128,929,734 Railroad 3,727,355 3,354,620 Uilities w/o Gas &Electric 6,698,096 6,698,096 Other 541,377 487,239 Gross valuation $3,804,673,882 $2,434,082,355 Less military exemption (4,717,044) (4,717,044) Netvaluation $3,799,956,838 $2,429,365,311 TIF increment(used to compute debt service levies and constitutional debt limit) $337,871,388 $334,881,153 Taxed separately Ag. Land&Buildings $5,884,864 $3,204,197 Utilities —Gas &Electric $286,542,020 $69,651,988 Source: Iowa Deputment of Management A-2 2017 GROSS TAXABLE VALUATION BY CLASS OF PROPERTY' Taxable Percent Valuation Total Residential $1,478,806,673 59.064% Multiresidential 128,929,734 5.149% Commercial,Industrial, Other,Railroad&Utility 826,345,948 33.005% Utilities—Gas &Electric 69.651.988 2.782% Total Gross Taxable Valuation $2,503,734,343 100.00% Source: Iowa Deputment of Management TREND OF VALUATIONS The 100% Actual Valuations, before rollback and after reduction of military exemption, include Ag. Land, Ag. Buildings, TIF Increment, and Gas & Electric Utilities. The Net Taxable Valuations, with the rollback and after the reduction of military exemption, include Gas & Electric Utilities, but exclude Ag. Land, Ag Buildings, and Taxable TIF Increment. Iowa cities certify operating levies against Net Taxable Valuation excluding the Taxable TIF Increment and debt service levies are certified against Net Taxable Valuations including the Taxable TIF Increment. Net Taxable Assessment Payable 100% Valuation Taxable Year Fiscal Year Actual Valuation (With Rollback) TIF Increment 2013 2014-15 $3,862,426,062 $2,250,099,910 $346,925,191 2014 2015-16 3,920,621,887 2,255,562,993 327,982,095 2015 2016-17 4,143,482,398 2,358,056,508 367,989,395 2016 2017-18 4,187,371,261 2,371,609,335 388,130,735 2017� 2018-19 4,430,255,110 2,499,017,299 334,881,153 Source: Iowa Deputment of Management �Before military exempfion, and exclusive of taxable TIP increment �Tanuary 1, 2017 valuatians are available from the State oflowa, and are effectiveTuly 1, 2018. A-2 LARGER TAXPAYERS Property/ 1/1/2016 Taxvaver Business Tvne Taxable Valuation Interstate Power&Light CO Utility $172,049,037 Peninsula Gaming Company LLC Commercial 63,778,569 Black Hills Energy Corp Utility 57,726,340 Kenney Mall Inc Commercial 38,925,903 Progressive Processing LLC Industrial 28,270,499 Medical Associates Reality Commercial 25,369,950 Nordstrom, INC Commercial 24,242,206 Walter Development LLC Commercial 21,881,897 McGraw-Hill Global Education LLC Commercial 16,225,373 Otto A LLC Commercial 15,841,174 Source: Dubuque County Iowa Auditor's Office. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] A-3 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 far the City, based on its 2016 Actual Valuation applicable to the fiscal year 2017-18, is as follows: 2016 Actual Valuation of Property $4,192,266,097 Less: Military Exemption (4.894.836� Net Valuation $4,187,371,261 Constitutional Debt Percentage 5.00% Constitutional Debt Limit $209.368.563 Less: Applicable General Obligation Debt (104,295,000) Less: Urban Renewal Debt (20,969,010) Less: Rebate Agreements (15,167,55'� Less: Other Obligations (3.894.19'n Constitutional Debt Margin $65,042,799 DIRECT DEBT First Lien General Obligation Debt(Includes the Bonds, Excludes the Refunded Bonds) Principal Date Original Final Outstanding of Issue Amount Purpose Mabxritv As of 03/OS/18 10/08C $2,465,000 Taxable Urban Renewal 06/18 $430,000 09/11A 6,330,000 CorporatePurpose 06/183 285,000 09/11B 1,590,000 Corporate Purpose 06/18' 105,000 03/12A 4,380,000 UrbanRenewal 06/31 3,550,000 03/12B 7,495,000 Corporate Purpose 06/31 6,010,000 06/12C 6,965,000 Taxable Urban Renewal 06/32 5,780,000 06/12D 7,175,000 CorporatePurpose 06/32 5,235,000 12/12E 3,640,000 Corporate Purpose 06/183 210,000 12/12F 1,035,000 Taxable Urban Renewal 06/22 665,000 12/12H 2,385,000 UrbanRenewal 06/18' 165,000 12/12I 7,285,000 Taxable Refunding 06/21 2,240,000 12/14B 18,835,000 Corporate Purpose 06/34 18,370,000 12/14C 7,615,000 Taxable Corporate Purpose 06/34 7,415,000 04/16A 2,830,000 CorporatePurpose 06/35 2,710,000 04/16B 11,505,000 Refunding 06/28 9,160,000 04/16C 4,145,000 Corporate Purpose 06/35 3,985,000 04/17A 8,495,000 Refunding 06/30 8,495,000 04/17B 9745,000 Urban Renewal Refunding 06/30 9,745,000 04/17C 2,120,000 TaxableUrbanRenewalRefunding 06/30 2,120,000 04/18A 9,410,000 Corporate Purpose&Refunding 06/32 9,410,000 04/18B 1,020,000 TaxableRefunding 06/26 1.020.000 Tota l $97,105,000 3Tune 1, 2019 and later matunfies are being refunded by the Bonds. A-4 Second Lien Sales Tax Increment General Obligation Debt Principal Date Original Final Outstanding of Issue Amount ose Mabxritv As of 03/OS/18 06/14 $7,190,000 Flood Mitigation 06/29 $7,190,000 Total General Obligation Debt Subject to Debt Limit: $104,295,000 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] A-5 ANNUAL FISCAL YEAR DEBT SERVICE PAYMENTS First Lien General Obligation Debt(Includes the Bonds, Excludes the Refunded Bonds) Current Outstanding Total G.O. Debt The Series 2018A Bonds The Series 2018B Bonds G.O. Debt Fiscal Principal Principal Principal Principal and Year Princival and Interest Princival and Interest Princival and Interest Princival Interest FY 2017-18 $7,650,000 $9,089,230 $7,650,000 $9,089,230 FY2018-19 7,000,000 9,377,214 $635,000 $883,590 $110,000 $141,329 7,745,000 10,402,133 FY 2019-20 7,030,000 9,223,641 680,000 886,908 120,000 145,386 7,830,000 10,255,934 FY 2020-21 6,605,000 8,609,939 690,000 883,852 120,000 142,698 7,415,000 9,636,488 FY2021-22 5,485,000 7,305,304 705,000 885,121 125,000 144,818 6,315,000 8,335,242 FY 2022-23 5,405,000 7,072,211 715,000 880,809 130,000 146,543 6,250,000 8,099,563 FY2023-24 5,160,000 6,674,436 655,000 805,723 135,000 147,864 5,950,000 7,628,022 FY 2024-25 5,200,000 6,567,518 670,000 806,444 135,000 143,814 6,005,000 7,517,775 FY2025-26 5,070,000 6,287,021 695,000 816,101 145.000 149.669 5,910,000 7,252,791 FY2026-27 5,220,000 6,287,109 710,000 814,421 5,930,000 7,101,529 FY2027-28 5,250,000 6,157,281 735,000 821,813 5,985,000 6,979,094 FY2028-29 5,170,000 5,912,524 720,000 788,070 5,890,000 6,700,594 FY 2029-30 4,360,000 4,935,329 735,000 784,206 5,095,000 5,719,535 FY 2030-31 3,790,000 4,219,449 750,000 779,508 4,540,000 4,998,957 FY2031-32 3,050,000 3,348,309 315.000 323.883 3,365,000 3,672,192 FY 2032-33 2,350,000 2,538,606 2,350,000 2,538,606 FY2033-34 2,425,000 2,529,113 2,425,000 2,529,113 FY 2034-35 455.000 469.669 455.000 469.669 Total $86,675,000 $108,118,105 $9,410,000 $11,160,449 $1,020,000 $1,162,121 $97,105,000 $118,926,464 A-6 Second Lien General Obligation Debt" Current Outstanding G.O. Debt Fiscal Principal and Year Princival Interest FY 2017-18 $38,171 FY 2018-19 71,993 FY 2019-20 67,493 FY 2020-21 62,618 FY 2021-22 57,193 FY 2022-23 $115,000 166,593 FY 2023-24 1,075,000 1,120,570 FY 2024-25 1,125,000 1,164,195 FY 2025-26 1,125,000 1,344,250 FY 2026-27 1,200,000 1,363,000 FY 2027-28 1,250,000 1,365,000 FY 2028-29 1.300.000 1.365.000 Total $7,190,000 $8,186,076 °Supported by state sales tax increment A-7 Urban Renewal Revenue Debt Principal Date Original Final Outstanding of Issue Amount Purpose Maturi As of 03/OS/08 11/06 810,323 Thiesen Supply 06/18 118,363 10/07 23,025,000 Port of Dubuque Parking Ramp 06/37 20,520,000 08/09 690,529 40 Main LLC 06/37 330.647 Total $20,969,010 Current Outstanding Urban Renewal Revenue Debt Fiscal Principal and Year Princival Interest FY2017-18 $668,129 $1,451,432 FY2018-19 589,825 2,108,784 FY 2019-20 635,176 2,110,534 FY 2020-21 680,880 2,109,284 FY 2021-22 635,000 2,014,625 FY 2022-23 680,000 2,012,000 FY 2023-24 730,000 2,011,000 FY 2024-25 785,000 2,011,250 FY 2025-26 845,000 2,012,375 FY 2026-27 910,000 2,014,000 FY 2027-28 975,000 2,010,750 FY 2028-29 1,050,000 2,012,625 FY2029-30 1,130,000 2,013,875 FY2030-31 1,215,000 2,014,125 FY 2031-32 1,305,000 2,013,000 FY2032-33 1,400,000 2,010,125 FY2033-34 1,505,000 2,010,125 FY 2034-35 1,620,000 2,012,250 FY 2035-36 1,740,000 2,010,750 FY 2036-37 1.870.000 2,010,250 Total $20,969,010 A-8 OTHER DEBT The City has debt payable solely from the net water revenues of the City's water system as follows: Water Revenue Debt Principal Date Original Final Outstanding ofIssue Amount Pumose Maturi Asof03/OS/18 10/07 $915,000 Water Ixnprovements (SRF') 06/28 $571,000 11/08D 1,195,000 WaterImprovements 06/23 590,000 02/10 7,676,000 Water Ixnprovements (SRF') 06/31 2,423,000 09/lOD 5,700,000 Water Improvements 06/30 4,525,000 07/17 10,198,000 WaterIxnprovements (SRF') 06/37 10.198.000 Total $18,307,000 The City has debt payable solely from the net sewer revenues of the City's sewer system as follows: Sewer Revenue Debt Principal Date Original Final Outstanding ofIssue Amount Purpose Maturi Asof03/OS/18 O1/10 912,000 Sewer Ixnprovements (SRF) 06/30 $657,000 08/10 74,285,000 Sewer Ixnprovements (SRF) 06/29 64,867,676 04/13 3,048,000 Sewer Ixnprovements (SRF) 06/33 2,531,000 OS/13 3,058,000 Sewer Ixnprovements (SRF) 06/30 2.423.000 Total $70,478,676 The City has debt payable solely from the net sewer revenues of the City's stormwater system as follows: Stormwater Revenue Debt Principal Date Original Final Outstanding of Issue Amount Purpose Maturi As of 03/20/17 O1/09 1,847,000 StormwaterIxnprovements (SRF) 06/28 $1,152,000 O1/10 800,000 Stormwater Ixnprovements (SRF) 06/30 576,000 10/10 7,850,000 Stormwater Ixnprovements (SRF) 06/41 6,819,000 02/14 1,029,000 Stormwater Ixnprovements (SRF) 06/33 101,720' 06/15 29,541,000 Stormwater Ixnprovements (SRF) 06/37 28.392.547 Total $37,041,267 s Reflects amount drawn as ofTune 30, 2017. A-9 INDIRECT DEBT 1/1/2016 Portion of City's Taxable Taxable Value Percent Indirect Taxin¢District Valuation In the Citv Avvlicable GO Debtb Portion Dubuque CSD $3,835,530,575 $2,759,740,070 71.95% $0 $0 Dubuque County 4,998,431,544 $2,759,740,070 55.21% 21,610,000 11,931,339 NortheastIowa Comm. College 11,969,150,124 $2,759,740,070 23.06% 43,300,000 9.983.728 TOTAL $21,915,067 DEBT RATIOS DebUActual Market Value DebU57,532 G.O. Debt $4.187.371.261 Povulation DirectGeneralObligationDebt $144,325,764 3.45% $2,508.62 Indirect General Obligation Debt 21.915.067 0.52% 380.92 Combined Debt $166,240,831 3.97% $2,889.54 LEVIES AND TAX COLLECTIONS Taxes Current %of Year Levied Collections Taxes Levied 2013-14 23,993 23,915 99.67% 2014-15 24,866 24,715 99.39% 2015-16 24,944 24,899 99.82% 2016-17 26,435 26,318 99.56% 2017-18 In process of collection After the assessment of property in a calendar year, taxes are levied for collection in the following fiscal year. Taxes are certified to the County Auditor in March. The County Treasurer collects taxes for all taxing entities in the County. Statutory dates for payment without penalty are September 30 far the first installment and March 31 far the second installment. Penalty rates are established by State law at 1%per month. 6 School c&stnctfigures exclude Sale and Service TaxRevenue Bonds. A-10 TAX RATES Taxing FY2013/14 FY2014/15 FY2015/16 FY2016/17 FY2017/18 District $/$1,000 $/$1,000 $/$1,000 $/$1,000 $/$1,000 CityofDubuque $11.02586 $11.02588 $11.02590 $11.16739 $10.89220 Dubuque County 6.43124 6.43124 6.38779 6.29673 6.34143 Dubuque CSD 14.60281 13.99630 14.05629 14.97697 14.95665 County Hospital 0.26975 0.26974 0.26975 0.26975 0.26949 City Assessor 0.39028 0.29320 0.26538 0.25816 0.25234 Ag. Extension 0.08941 0.09731 0.10056 0.10025 0.10287 Nartheast Iowa CC 0.90455 0.90807 0.91036 0.93757 1.09993 State of Iowa 0.00330 0.00330 0.00330 0.00330 0.00310 Consolidated Rate $33.71720 $33.02504 $33.01933 $34.01012 $33.91801 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 I). 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's general fund levy subject to the $8.10 limitation is $8.10 for FY 2017-18, and the City is not using the emergency levy. The City also levies for employee benefits. Debt service levies are not limited. FUNDS ON HAND (Cash and Investments as of January 31,2018) Agency $1,593,164 Capital 18,895,734 Component Unit 11,4895,97 Debt Service' (2,261,37'� Enterprise 22,661,615 General 8,017,856 Internal Service 4,234,559 Perxnanent 83,763 Special 25.459.861 Total Cash and Inveshnents $78,685,175 'Deficitto be eliminated with transfers. A-11 THE CITY CITY GOVERNMENT The City has been governed by a Council-Manager-Ward form of government since 1920. Policy is established by a Mayor and six council members, the mayor and two of the council members being elected at large and four members elected from wards. City Council members hold four year staggered terms. The City Clerk, City Manager and City Attorney are appointed by the City Council. LEASE REVENUE The City of Dubuque leases riverfront property, airport property(hangars and terxninal space), farm land, parking areas, space for antennas on top of water towers, and concession areas under operating leases. The most significant lease is the lease of the greyhound racing and gambling facility and related parking area to the Dubuque Racing Association (DRA). The City's cost of the leased DRA assets total $10,144,771. The carrying amount of the assets at June 30, 2017 is $6,299,355, with $142,423 of depreciation expense during the year ended June 30, 2017. The ORA lease amount is based on the association's gross gambling receipts. During the year ended June 30, 2017, the ORA lease generated $4,843,286 in lease revenue. Lease payments from DRA are expected to decrease in future years, due to declining gaming revenues at the leased facility. See the audited financial statements attached as Appendix B for further information. EMPLOYEES,PENSIONS AND OPEB The City has 566 full and 79.39 full time equivalent part-time employees and 58.47 full time equivalent seasonal employees, including a police force of 109 sworn personnel and a fire departxnent of 89 fire fighters. Of the City's 938 employees, 533 are currently enrolled in the Iowa Public Employees Retirement System (the "IPERS'� pension plan administered by the State of Iowa. The City contributes to the Iowa Public Employees' Retirement System ("IPERS'�, which is a state-wide multiple- employer cost-sharing defined benefit pension plan administered by the State of Iowa. IPERS provides retirement and death benefits which are established by State statute to plan members and beneficiaries. All full-time employees of the Issuer are required to participate in IPERS. IPERS plan members are required to contribute a percentage of their annual salary, in addition to the Issuer being required to make annual contributions to IPERS. Contribution amounts are set by State statute. The IPERS Comprehensive Annual Financial Report for its fiscal year ended June 30, 2017 (the "IPERS CAFR'� indicates that as of June 30, 2017,the date of the most recent acbxarial valuation for IPERS,the funded ratio of IPERS was 81.4%, and the unfunded actuarial liability was $6.968 billion. The IPERS CAFR is available on the IPERS website, or by contacting IPERS at 7401 Register Drive, Des Moines, IA 50321. See "APPENDIX C COMPREHENSIVE ANNLJAL FINANCIAL REPORT"for additional information on IPERS. In fiscal year 2016, the Issuer's IPERS contribution totaled approximately $2,227,787 compared to a contribution in fiscal year 2016 of$2,257,038. See note 11 of the audited fmancial statements of the City attached as Appendix C for further information. A-12 The following table sets forth certain inforxnation about the funding status of IPERS that has been extracted from the IPERS CAFR. According to IPERS, as of the end of fiscal year 2017,there were approximately 355,631 total members participating in IPERS, including Issuer employees. Unfunded UAAI, as a Actuarial %of Accrued Covered Liability Funded Payroll Fiscal Year Actuarial Value Actuarial Accrued (UAAI,) Ratio Covered Payroll ([b]-[a]) Ended June 30 of Assets [a] Liability[b] [b]—[a] [a]/[b] [c] /[c] 2014 26,46Q428,085 32,004,456,088 5,544,028,003 82.68% 7,099,277,280 78.09% 2015 27,915,379,103 33,37Q318,731 5,454,939,628 83.65% 7,326,348,141 74.46% 2016 29,033,696,587 34,619,749,147 5,586,052,560 83.86% 7,556,515,720 73.92% 2017 3Q472,423,914 37,44Q382,029 6,967,958,115 8139% 7,863,16Q443 88.62% Source: IPERS Comprehensive Annual Financial Repart(Fiscal Year 201'� When calculating the funding status of IPERS for fiscal year 2017, the following assumptions were used: (1) the amartization period far the total unfunded acbxarial liability is 30 years (which is consistent with the maximum acceptable amartization period set forth by the Governxnental Accounting Standards Board ("GASB'� in GASB Statement No. 25); (2)the rate of return on inveshnents is assumed to be 7.00%; (3) salaries are projected to increase 3.25-16.25%for IPERS, depending on years of service; and(4)the rate of inflation is assumed to be 2.60%for prices and 3.25%for wages. Bond Counsel, Disclosure Counsel, the City, and the Municipal Advisor undertake no responsibility for and make no representations as to the accuracy or completeness of the information available from the IPERS discussed above or included on the IPERS website, including, but not limited to, updates of such information on the State Auditor's website or links to other Internet sites accessed through the IPERS website. In addition, the City contributes to the Municipal Fire and Police Retirement System of Iowa (the "1VIF'PRSP�, a benefit plan administered by a Board of Trustees. MFPRSI provides retirement, disability and death benefits that are established by State statute to plan members and beneficiaries. Plan members are required to contribute 9.40% of their earnable compensation and the City's contribution rate is 25.92% of earnable compensation. The City's contributions to the Plan far the years ended June 30, 2017, 2016, and 2015, were $3,512,627, $3,737,581, and respectively, which met the required minimum contribution for each year. Consistent with Iowa Code section 509A.13, the Issuer offers post-retirement health and dental benefits ("OPEB'� to all full-time employees of the Issuer who retire before attaining age 65. The group health insurance plan provided to full-time Issuer employees allows retirees to continue medical coverage until they reach age 65. Although retirees pay 100%of the "cost of coverage", the pre-age 65 group of retirees is grouped with the active employees when determining the cost of coverage. The computation creates an implicit rate subsidy that would not exist if the cost of the coverage far this group (pre-age 65 retirees)was computed separately and paid 100%by that group. As described in its audited financial statements, as of June 30, 2017, the City has an unfunded actuarial accrued liability relating to its OPEB in an amount of$5,187,750. The Issuer's end of year (as of June 30, 201'� net OPEB obligation is $4,221,176 See note 10 of the audited financial statements of the City attached as Appendix B for further information on OPEB obligations of the City. A-13 UNION CONTRACT S City employees are represented by the following bargaining units: Bar¢ainin¢Unit UnitMembers ContractExpirationDate Teamsters Local Union No 102$ 113 June 30, 2022 Teamsters Local Union No 102 Bus Operators8 58 June 30, 2022 Dubuque Professional Firefighters Association9 76 June 30, 2022 Dubuque Police Protective Association 84 June 30, 2018 International Union of Operating Engineers No. 2348 64 June 30, 2022 INSi JRANCE The City's insurance coverage is noted below. In addition to the coverage noted in the table, the City is self-insured for warker's compensation, unemployment, and health insurance. See note 8 of the audited financial statements of the City attached as Appendix C for further information. Tvne of Insurance Limits General Liability $15,000,000 AutomobileLiability 15,000,000 Public Officials 15,000,000 Police Professional Liability 15,000,000 Boiler&Machinery 100,000,000 Property Blanket 558,460,896 Employees Crime Policy 1,000,000 Airpart Commission 5,000,000 AirpartLiability 20,000,000 8 This is a 5-year agreement with a 2%increase in wages for Piscal Year 2018;a 1.5%increase in wages forPiscal Years 2019, 2020 and 2021; �d a 1.75%increase in wages for Piscal Year 2022. Beginning in Piscal Year 2018, the employees will pay I S%of the cost of the health insurance premium, an increase from the current 10%, and will have increases in the employee cost of out-of pocket marimums and co-paymentsTanuary 1, 2018. 9 The wage increase and increases to out of pocket marimums and co-payments is the smne as the other 3 unions. The health insurance premium increase to l5%does not occur until Piscal Year 2019. A-14 GENERAL INFORMATION LOCATION AND TRANSPORTATION The City is located in northeast Iowa and serves as the county seat for Dubuque County. The City, with a 2010 Census population of 57,532, has a land area of 31.6 square miles. Annexation activity in recent years has been voluntary with over 760 acres annexed in the past five years. The City lies at the intersection of Highways 61/151 and 20. The City is located approximately 22 miles southwest of Platteville, Wisconsin; 92 miles southwest of Madison, Wisconsin; 84 miles northeast of Iowa City, Iowa; 65 miles north of the Quad Cities (Rock Island and Moline, Illinois and Bettendorf and Davenport, Iowa); 175 miles west of Chicago, Illinois and 185 miles northeast of Des Moines. Dubuque Regional Airpart provides jet service to Chicago via American Airlines. Railroad service to the City is provided by the Iowa, Chicago & Eastern Railroad Corp, Canadian NationaUIllinois Central, and Burlington Northern Santa Fe Railroad Company(BNSF), as well as bus service being provided by Greyhound and Burlington Trailways. BUILDING PERNIITS'o City officials report the following construction activity as of January 31, 2018. Permits far the City are reported on a fiscal year basis. FiscalYear Sin¢le Multi-Familv Commercial TotalPermits TotalValuation 2012-13 126 5 20 2,056 $117,253,752 2014-15 77 0 12 1,456 113,132,353 2015-16 104 0 21 1,561 90,214,555 2016-17 64 3 8 1472 115,177,160 2017-18 38 0 9 817 51,171,177 USCENSUSDATA 1980 US Census 62,374 1990 US Census 57,546 2000 US Census 57,686 2010 US Census 57,532 Source:U.S Census Bureau website. L0 Totals include new construcfion totals only for single family, multi family, commerciaUindustrial roofing, sic&ng, decks, and other miscellaneous residential and commercial permits. A-15 UNEMPLOYMENT RATES Calendar Year City of Dubuque State Avera¢e Dubuque'—' Coun " of Iowa'Z 2013 4.5% 4.6% 4.7% 2014 4.0% 4.2% 4.3% 2015 3.6% 3.7% 3.8% 2016 3.5% 3.6% 3.7% 2017 3.1% 3.0% 3.1% Source: Iowa Workforce Development Center. Figures represent calendu yeu averages, and will differ from fiscal yeu-end data reported in Table 18 of the Comprehensive Annual Financial Report for the yeu ended June 30,2017. EDUCATION Public education to the City is provided by the Dubuque Community School District, with certified enrollment for the 2017-2018 school year of 10,507. The Dubuque School District has two high schools, an alternative high school, three middle schools and thirteen elementary schools. The Archdiocese of Dubuque operates four Catholic elementary facilities, one middle school and one high school within the City. Higher education opportunities within the County include Loras College, Clarke University, University of Dubuque, and Northeast Iowa Community College, with local facilities in downtown Dubuque and Peosta (15 minutes west of Dubuque on Highway 20). FINANCIAL STATEMENTS The City's COMPREHENSIVE ANNLJAL FINANCIAL REPORT far the fiscal year ended June 30, 2017 is reproduced in Appendix C. The City's certified public accountant has not consented to the distribution of the audited financial statements and has not undertaken added review of their presentation. Further inforxnation regarding financial performance and copies of the City's priar Comprehensive Annual Financial Report may be obtained from the City's Municipal Advisor,Independent Public Advisors,LLC. ��Notseasonally adfusted ��Seasonally adfusted A-16 APPENDIX B: FORM OF LEGAL OPINIONS � Ahlers&Cooney,P.C. � f� HLER5 COONEY AttorneysafLaw 100 Court Avenue,Suite 600 A T T O R N E V S Des Moines,lowa 50309-2231 Phone: 515-243-7611 Fax: 515-24b2149 www.ahlerslaw.com DRAFT We hereby certify that we ktave examined a certified hanscript of the proceedings of the City Council and acts of adnunishative officers of the City of Dubuque, State of Iowa (the "Issuer"), relating to the issuance of General Obligation Bonds, Series 2018A, by said City, dated , 2018 in the denomination of$5,000 or multiples thereof,in the aggregate amount of$ (the "Bonds"). We ktave examined the law and such certified proceedings and other papers as we deem necessuy to render trus opiruon as bond counsel. As to questions of fact material to our opiruon,we ktave relied upon representations of the Issuer contained in the resolution authorizing issuance of the Bonds (the "Resolution") and in the certified proceedings and other certifications of public officials fiunished to us,without undertalang to verify the same by independent investigation. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we ue of the opinion, under existing law, as follows: 1. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the Bonds. 2. The Bonds ue valid and binding general obligations of the Issuer. 3. All taxable property in the territory of the Issuer is subject to ad valorem taxation without limitation as to rate or amount to pay the Bonds. Taxes have been levied by the Resolution for the payment of the Bonds and the Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Bonds to the extent the necessuy funds ue not provided from other sources. 4. Interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal altemative minimum tax;however, such interest is taken into account in determining adjusted current eunings for the purpose of computing the altemative mirumum tax imposed on certain corporations for taxable yeus beginning before Januuy 1, 2018. The opinion set forth in the preceding sentence is subject to the condition that the Issuer comply with all requirements of the Interrtal Revenue Code of 1986, as amended,that must be satisfied subsequent to the issuance of the Bonds in order trtat the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Issuer has covertanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes rehoactively to the date of issuance of the Bonds. W ISM1aN&Baily-1888,Guemsey&Baily-1883,Baily&SOpp-18�1,SOpp,Perty,Bannistzr&Sbrzinger-1814,Bannistzr,Caryenter, nnie�a coo�ey—i eso,nnie�,coo�ey,oo�weoe�,nimee,Hay��e a sm�m—i wa,nnie�,coo�ey,oo�weoe�,Hay��e,sm�m animee,a c.—i eeo DRAFT City of Dubuque, State of Iowa $ General Obligation Bonds, Series 2018A Page 2 We express no opinion regarding the accuracy, adequacy, or completeness of the Official Statement or other offering material relating to the Bonds. Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. The rights of the owners of the Bonds and the enforceability of the Bonds are limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally, and by equitable principles, whether considered at law or in equity. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Respectfully submitted, 01448308-1\10422-190 ^ Ahlers&Cooney, P.C. l Attorneys at Law � � AHLER5 COONEY 100 Court Avenue, Suite 600 ` A T T ❑ R N E Y 5 Des Moines, lowa 50309-2231 Phone: 515-243-7611 Fax: 515-243-2149 www.ahlerslaw.com DRAFT We hereby certify that we have examined a certified transcript of the proceedings of the City Council and acts of administrative officers of the City of Dubuque, State of Iowa(the "Issuer"), relating to the issuance of Taxable General Obligation Refunding Bonds, Series 2018B, by said City, dated , 2018, in the denomination of$5,000 or multiples thereof, in the aggregate amount of$ (the "Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion as bond counsel. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the resolution authorizing issuance of the Bonds (the "Resolution") and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we are of the opinion, under existing law, as follows: 1. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the Bonds. 2. The Bonds are valid and binding general obligations of the Issuer. 3. All taxable property in the territory of the Issuer is subject to ad valorem taxation without limitation as to rate or amount to pay the Bonds. Taxes have been levied by the Resolution for the payment of the Bonds and the Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Bonds to the eatent the necessary funds are not provided from other sources. 4. The interest on the Bonds is not excluded from gross income for federal income tax purposes under Section 103(a) ofthe Internal Revenue Code of 1986, as amended. THE HOLDERS OF THE BONDS SHOULD TREAT THE INTEREST THEREON AS SUBJECT TO FEDERAL INCOME TAXATION. We express no other opinion regarding any other federal or state income tax consequences caused by the receipt or accrual of interest on the Bonds. We express no opinion regarding the accuracy, adequacy, or completeness of the Official Statement or other offering material relating to the Bonds. Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. Wishard&Baily—i88Q Guemsey&Baily—1893, Baily&Stipp—1901,Stipp, Perrg Bannister&Starzinger—1914, Bannister,Carpenter, Ahlers&Cooney—195Q Ahlers,Cooneg Dorweiler,Allbee,Haynie&Smith—1974,Ahlers,Cooneg Dorweiler,Haynie,Smith&Allbee, P.Q—1990 DRAFT City of Dubuque, State of Iowa $ Taxable General Obligation Refunding Bonds, Series 2018B Page 2 The rights of the owners of the Bonds and the enforceability of the Bonds are limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally, and by equitable principles, whether considered at law or in equity. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Respectfully submitted, 01448336-1\10422-191 APPENDIX C: JUNE 30, 2017 COMPREHENSIVE ANNUAL FINANCIAL REPORT COMPREHENSIVE ANNUAL THECITYOF . �� DUB E �I�� F I N A N C I A L R E P 0 RT Masterpiece on the Mississippi � �.�12 _ ��.��, FISCAL YEAR ENDED JUNE 30, 2017 �� _ �� Y , .�� ., �!# _" �- � --�y i ` . _ . ' r � i ,6 _ 'i.�' . �' � � - _ i �� '_-� �� _ — ` �ti .��i ,_ _r. _. 'wl�_ 4� � - — - , . ,w . ., .. • a R _ ,y �'•'� •�� 7'¢� .. —.- u ' '" . I . � �� — - _ _ " �':� ti � T +'� �� — 7 1 � � . ' . , -' . � ' r . '�� •r , _$ , .. � Ir ` . 1 � � , ��. -- —+�_ l ` - � T^.' L L .1_�_ . . � - -. — �IIY.tr+. , a � �_ �_ -- �=��_ - - -- .r - __ :.,,,• DUBUQUE R. About the Cover. The Dubuque Regional Airport Commercial Passenger Terminal opened to the public on June 9, 2016. The Federal Aviation Administration provided 85°k of the funding for this project with the remaining 15°k being provided by the lowa Department of Transportation, the City of Dubuque, airline passenger facility charges, rental car customer facility charges and public donations. This project replaced the original terminal built in 1948 with a state of the art gateway to the Dubuque area. This building achieved Silver LEED certification by following the City of Dubuque's emphasis on sustainability with several features such as, light pollution reduction, water-efficient landscaping, water use reduction, use of recycled materials, emphasis on regional materials and the use of total energy recovery. This facility has enhanced the Airport's mission of providing quality, viable and competitive airport services while promoting sustainability and economic growth for the Dubuque area. Photo courtesy of: Straka Johnson Architects P.C. Cover design by: Kelli Buchenau Copy provided by: Cheryl Sheldon Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2017 City of Dubuque, Iowa Prepared by: Department of Finance THIS PAGE IS INTENTIONALLY LEFT BLANI� Introductory Section June 30, 2017 City of Dubuque, Iowa THIS PAGE IS INTENTIONALLY LEFT BLANI� CITY OF DUBUQUE, IOWA TABLE OF CONTENTS E�ibit Page INTRODUCTORY SECTION Table of Contents 1-2 Letter of Transmittal 3-12 City Organizational Chart 13 Officials 14 Certificate of Achievement for Excellence in Financial Reporing 15 FINANCIAL SECTION Independent Auditor's Report 19-21 ManagemenYs Discussion and Analysis 23-32 Basic Financial Statements Govemment-wide Financial Statements Statement of Net Position 1 34-35 Statement of Activities 2 36 Fund Financial Statements BalanceSheet—GovemmentalFunds 3 38-39 Reconciliation of the Govemmental Funds Balance Sheet to the Statement of Net Position 3-1 41 Statement of Revenues,Expenditures, and Changes in Fund Balances—Govemmental Funds 4 42-43 Reconciliation of the Govemmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 4-1 45 Statement of Net Position—Proprietary Funds 5 46-49 Statement of Revenues,Expenses, and Changes in Fund Net Position —Proprietary Funds 6 50-51 Statement of Cash Flows—Proprietary Funds 7 52-55 Statement of Fiduciary Assets and Liabilities—Agency Funds 8 56 Notes to Financial Statements 57-106 Requued Supplementary Information Schedule of Receipts,Expenditures, and Changes in Balances—Budget and Actual(Budgetary Basis)—Govemmental Funds and Enterprise Funds 108 Note to Required Supplementary Information—Budgetary Reporting 109 Schedule of the City's Proportionate Share of Net Pension Liability— Iowa Employees'Retirement System 110 Schedule of City's Conhibution—Iowa Employees'Retirement System 111 Notes to Requued Supplementary Information— NetPension Liability IPERS 112 Schedule of the City's Proportionate Share of Net Pension Liability— Municipal Fire and Police Retuement System of Iowa 113 Schedule of City's Contributions—Municipal Fue and Police Retirement System of Iowa 114 Notes to Requued Supplementary Information— NetPension Liability MFPRSI 115 Schedule of Funding Progress for the Retiree Benefit Plan 116 Supplementary Information Combining Fund Statements Combining Balance Sheet—Nonmaj or Govemmental Funds A-1 120-122 Combining Statement of Revenues,Eapenditures, and Changes in Fund Balances—Nonmajor Govemmental Funds A-2 124-126 Combining Statement of Net Position—Nonmajor Enterprise Funds B-1 128 Combining Statement of Revenues,Eapenses, and Changes in Fund Net Position—Nonmaj or Enterprise Funds B-2 129 1 CITY OF DUBUQUE, IOWA TABLE OF CONTENTS FINANCIAL SECTION(continued) Exhibit Paee Combining Statement of Cash Flows—Nonmajor Enterprise Funds B-3 130-131 Combining Statement of Net Position—Intemal Service Funds G 1 134-135 Combining Statement of Revenues,Eapenses, and Changes in Fund Net Position(Deficit)—Internal Service Funds G2 136-137 Combining Statement of Cash Flows—Intemal Service Funds G3 138-139 Combining Statement of Changes in Assets and Liabilities— Agency Funds D-1 141 STATISTICAL SECTION(Unaudited) Table Paae Statistical Section Contents 145 Financial Trends Net Position by Component 1 146-147 Changes in Net Position 2 148-151 Fund Balances of Govemmental Funds 3 152-153 Changes in Fund Balances of Govemmental Funds 4 154-155 Revenue Capacity Ta�ble and Assessed Value of Property 5 156 Property Tax Rates—Direct and Overlapping Govemments 6 157 Principal Property Ta�payers 7 158 Property Tax Levies and Collections 8 159 Debt Capacity Ratios of Outstanding Debt by Type 9 160-161 Ratios of General Bonded Debt Outstanding 10 162 Direct and Overlapping Govemmental Activities Debt 11 163 Legal Debt Margin Information 12 164-165 Revenue DebtCoverage 13 166 Water and Sewer ReceiptHistory 14 167 Water Meters by Rate Class 15 168 Largest Water and Sewer Customers 16 169 Sales Tax Increment Actual Receipts and Cumulative Sales Tax Balance Remaining 17 170 Demographic and Economic Information Demographic and Economic Statistics 18 171 Principal Employers 19 173 Operating Information Full-Time Equivalent City Government Employees by Function/Deparhnent 20 174-175 Operating Indicators by Function/Program 21 176-177 Capital Asset Statistics by Function 22 178-179 Retail 23 180 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 GovemmentAuditing Standards 183-184 Independent Auditor's Report on Compliance with Requirements for Each Major Program and on Intemal Control Over Compliance Required by The Uniform Guidance 185-186 Schedule of E�penditures of Federal Awards 187-189 Notes to the Schedule of Expenditures of Federal Awards 190 Schedule of Findings and Questioned Costs 191-198 2 Dubuque Finance Dep�arhnent THE CTTY OF so west is sneet � Dubuque,Iowa 52001-4805 IIFAmerica City , o,,�„„z, Office(563)589-4133 U L E 1� � � �1 FaX�s6s�69o-66s9 TTY(563)690-6678 finance@cityofdubuque.org 2007•2012 www.cityofdubuque.org Masterpiece on the Mississippi Zo13.zo1, December 21,2017 Honorable Mayor, City Council Members, and Citizens of the City of Dubuque: The City of Dubuque, Iowa, pursuant to the requirements set forth by state and federal regulations, hereby submits the Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2017. Responsibility for both the accuracy of the data and the completeness and fairness of the presentaYion, including all disclosures, rests with the City. Understanding the cost of internal controls should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial staYements are free of any material misstaYements. To the best of our knowledge and belief, the enclosed data is accurate in all material respects, and is reported in a manner designed to present fairly the financial position and results of operations of the various funds and activities of the City.All disclosures necessary to enable the reader to gain an understanding of the City's financial operations have been included. The Code of Iowa requires an annual audit by independent certified public accountants or the State Auditor. The accounting firm of Eide Bailly LLP conducted the audit for fiscal year 2017. In addition to meeting the requirements set forth in state statutes, the audit also was designed to meet the requirements of an annual single audit in conformity with the provisions of Title 2 U.S. Code of Federal Regulations Part 200, Unifonn Administr�ative Requirement, Cost Pnncipals, and Audit Requirements for Federal Awards (Uniform Guidance). Information related to this single audit, including the Schedule of Expenditures of Federal Awards, findings, recommendations, and the auditor's report on internal control over financial reporting and compliance with requirements applicable to laws, regulations, contracts, and grants, are included in the Compliance Section of this report. The independent auditors' report is included in the Financial Section of this report. The City provides a full range of services including: police and fire protection; sanitaYion services; the construction and maintenance of roads, streets, and infrastructure; inspection and licensing functions; maintenance of grounds and buildings; municipal airport; library; recreational activities; and cultural events. In addition to general government activities, the municipality owns and operates enterprises for a water system, water resource and recovery center (wastewater treatment), stormwater system, parking facilities, refuse collection, and public transportaYion. This report includes all funds of the City of Dubuque, as well as its component units. Component units are legally separate entities for which the City is financially accountable. This report includes the Dubuque Metropolitan Area Solid Waste Agency (DMASWA), Dubuque Initiatives and Subsidiaries, and Dubuque Convention and Visitors Bureau (CVB) as discretely presented component units. A discretely presented component unit is reported in a separate column in the government-wide financial statements to emphasize that it is legally separate from the City of Dubuque and to differentiate its financial position and results of operations from those of the City. The City appoints a voting majority to the DMASWA governing board and operates the landfill. Dubuque Initiatives is organized to render service to the City Council of the City of Dubuque on matters of community interest, and in the event of dissolution, any assets or property of the organization are transferred to the City. CVB's purpose is to strengthen the Dubuque area economy by 3 competitively marketing the area as a destination for conventions, tour groups, sparting events, and individual travelers. The organization's board members include one City Council member, the City of Dubuque Mayor, and the City Manager. In the event of dissolution, any assets or property of the organization shall be transferred to the City. The City collects hotel/motel taxes and forwards 50%to CVB as the primary source of funds for its operations. Generally Accepted Accounting Principles (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 (niID&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Dubuque's MD&A can be found immediately following the independent auditor's report. PROFILE OF THE CITY The city of Dubuque, incorporated in 1833, is located on the Mississippi River in northeast Iowa, adjacent to the states of Illinois and Wisconsin. Julien Dubuque, the city's namesake, first began mining lead in the area now known as Dubuque in 1788. Dubuque is the oldest city in Iowa and has a unique combination of the old and new, ranging from a historic downtown, numerous examples of Victorian architecture, and a Civil War era shot tower, to expanding industrial parks, multiple retail centers, a revitalized riverfront, and two casinos, one with a pari-mutuel dog track. The city of Dubuque has a stable, diversified economic base and is a majar tri-state retail center. The city currently has a land area of 31.8 square miles, and a census 2010 population of 57,637. The U.S. Census Bureau's 2016 population estimate for Dubuque is 58,531. As the largest city in the tri-state area, Dubuque serves as the hub of a trade area with a population estimated at 250,000. As of October 2017, the city's unemployment rate was 2.1%, below the state unemployment rate of 3.0%and the 4.1%national rate. The City of Dubuque is empowered to levy a property tax on real property located within the city limits. The City has operated under a council-manager form of governxnent since 1920. Policymaking and legislative authorities are vested in the governing council, which consists of a mayor and a six-member council. The city council is elected on a non-partisan basis. The mayor is elected to a four-year term. Council members are elected to four-year, staggered terms with three council members elected every two years. Four of the council members are elected within their respective wards; the mayor and the two remaining council members are elected at-large. The governing council is responsible, among other things, for setting policy, passing ordinances, adopting the budget, appointing committees, and hiring the city manager, city attorney, and city clerk. The city manager is responsible for overseeing the day-to-day operations of the government, making recommendations to the city council on the budget, and other matters, appointing the heads of the governmenYs departxnents, and hiring employees. ECONOMIC CONDITION AND OUTLOOK The economic condition and outlook of Dubuque continues to thrive. The city's economy has a diverse employer base including manufacturing, technology, health services, insurance, education, and government. The top 10 employers in the area employ less than 19% of the total warkforce and cover five different industries, which insulates the city from the negative impact on a downturn in any one area of the economy. Several industry experts and associations have recognized the community's efforts to diversify its economy. The Mid-America Economic Development Council (MAEDC) presented Greater Dubuque Development Corporation with four of the top honors at the 2016 Economic Development awards held December 2016. a Greater Dubuque Development Corporation took First Place in the following categories: • Annual Repart far the 2015-2016 Report • Business Retention&Expansion far the Info Action Program • Warkforce Development for the HR Action Program • 2016 Deal of the Year far the Alliant Energy Solar Project Alliant Energy's Solar Gardens Project was announced in June 2016 and both sites became operational in the fall of 2017. The two sites in Dubuque form the largest solar development in the state of Iowa. This project was conducted in collaboration with the City of Dubuque and Greater Dubuque Development Corporation (GDDC). Most of the solar panels (15,600) were installed on 21 acres of City-owned property north of Humke Road in Dubuque Industrial Center West. Over 3,500 solar panels were also installed on six acres owned by A.Y. McDonald Mfg. Co. along U.S. 61/151,near the 16th Street detention basin. The spotlight was on the City of Dubuque at the International Economic Development Council (IEDC) annual meeting in September 2016. Mayor Roy D. Buol, Northeast Iowa Community College President Dr. Liang Chee Wee, and Greater Dubuque Development Corporation all received recognition from the IEDC. The council's Excellence in Economic Development Awards recognize the world's best economic development programs and partnerships, marketing materials, and this year's most influential leaders. These awards honor organizations and individuals far their efforts in creating positive change in urban, suburban, and rural communities. Mayor Buol received the Leadership Award for Public Service. Dr. Wee was honored with the Instibxtional Leadership Award. Greater Dubuque Development Corporation was the recipient of the Bronze Excellence in Economic Development Award for the InfoAction program for business retention and expansion. Industrial Dubugue Industrial Center West (DICGV): Over 550 saleable acres were acquired in 1997. The DICW comprises 21 local businesses expansions and four new businesses. Most recently, in the south portion of the park, Rite Hite completed 138,000 square-feet to its current 193,500 square-foot building. This new addition is expected to add 35 new jobs by 2021. In November 2017, the Iowa Economic Development Authority (IEDA) announced that a "development-ready"site near Dubuque's Industrial Center West is the latest industrial site to achieve certification through the Iowa Certified Sites Program. It joins 18 other sites in the state that have been designated as project-ready. The City-owned property consists of six parcels covering 163 total acres, of which 103 acres are developable. Dubugue Industrial Center South (DICS): In May 2017, Flexsteel Industries announced plans to relocate their manufacturing operations to a new site in the Dubuque Industrial Center South. The company will invest over $28 Million to construct and equip a new state-of-the-art, 250,000-square-foot facility. The current manufacturing plant is located at 3400 Jackson Street. This announcement came as a welcome development after months of collaboration by private and public entities. Priar to the Flexsteel news, Tri-state Quality Metals was the first business to relocate to DICS from its 10,000 square-foot operations in Peosta, Iowa. TriState constructed a 44,000 square-foot facility and increased its warkforce by 27 jobs. Roasting Solutions, LLC(dba Verena Street Coffee) recently constructed a 34,000 square-footfacility. The company invested over $7 million in plant and equipment and plans to hire 10 new full-time workers by 2020,bringing their total employment to 17 full-time positions. Dubuque Technology Park: Located on the south side of the city is a 100-acre park designed to accommodate growing office businesses. Eight businesses are currently located in the park. In 2015, Rockfarxn Holdings completed construction of their new 14,000 square-foot headquarter office building. In August 2016, Kunkel &Associates completed a $2.5 million expansion which added an extra 10,000 square-feet to the company's current Dubuque facility and created 16 new jobs. s Commercial and Retail Downtawn Development: Over $100 million has been invested in the downtown area where more than 9,000 people wark. Over 500 IBM employees wark on three renovated floors of the nine-story Roshek Building where Heartland Financial relocated existing staff to the third floor. A major remodel is also underway to house RSM US LLC's Dubuque warkforce. Cottingham & Butler, headquartered in Dubuque and the nation's 30th largest insurance broker, announced in October 2017 its plans to make an estimated capital investment of$2.3 million and add 20 employees to its Dubuque staff over the next three years. In August 2016, the firm announced its plan to invest $1.2 million and add 90 new employees by April 2019 to its leased space at the Roshek Building. This follows their 2015 decision to invest $1.2 million and add 90 employees to their offices at 1000 and 1030 Main Street by March 2018. Historic Millwork District: The Schxnid Innovation Center, a $33 million private renovation project received $8.9 million in CDBG funds to develop warkforce housing. The 72-unit residential project was completed in September 2012. Nonprofits moved into the basement space while multiple commercial tenants fully occupy the first floor. Gigantic Design opened its new headquarters in the complex in 2016. The $32 million renovation and the creation of 76 residential units in the nearby Novelty Iron Warks has been completed. The Linseed Oil Building renovation, completed in 2015, includes 16 apartxnents. In just the past six months alone,two new attractions opened in the district. Back Pocket Brewing Company constructed and opened a tap room and dining area—already a favorite of both tourists and locals alike—in the Novelty Iron Works building. In August, after nearly $2.5 million in reconstruction and modernization, 7 Hills Brewing Company completed and opened a new brewery and restaurant in the district. Construction of a 54-room Marriot Townplace Suite extended-stay hotel broke ground in June 2017 and is scheduled to open in spring of 2018. The four-story hotel will be in the Historic Millwark District and is being designed to model the existing architecture in the area. Brewery Neighborhood Conservation District: The former Dubuque Brewing and Malting Company complex (aka H&W Building) is a collection of buildings constructed primarily of red brick between 1896 and 1934 on the northeast corner of Jackson and 30th Streets. The complex is eligible far the National Register of Historic Places and is in Dubuque's Brewery Neighborhood Conservation District The southern portion of the building was purchased by 3000 Jackson LC in March 2017 and wark to restore the building began. The new owner obtained a demolition perxnit to deconstruct the unsound section of the structure and plan to stabilize and make immediate repairs to prevent further deterioration. Although a partion of the historic structure will be demolished, there are plans to repair, stabilize, and eventually completely restore the property in the future. Commercial Development: Fiscal Year 2017 was an exceptional year for commercial development as many businesses broke ground on new projects in Dubuque. Ashley Furniture Store constructed a 38,000 square-foot store off the Northwest Arterial and Laundry Max, a 4,160 square-foot laundromat, opened on the corner of Grandview and University Avenue. Truck Country, a long-time Dubuque business, completed their new 53,127 square-foot complex in Key West just off U.S. Hwy 61/151 South. Additionally, Foodliner and McCoy Group intend to start the renovation wark of the previous Truck Country facility, renovating portions of this structure to accommodate additional office space. Walmart submitted plans for an extensive interior and exterior renovation and updates to the existing space with a construction value around $1 million. The Plaza 20 retail center has also submitted plans to add three new commercial buildings totaling of 50,000 square-feet. Currently, a 15,000 square-foot building is under permit for the first phase of this project Lebeda Mattress is building a new 5,800 square-foot store near nartheast corner of the Northwest Arterial and Asbury Road. s Tri-State Independent Blind Society is conshucting a new 13,123 square foot facility on Cedar Cross Road and will sell their existing site on Asbury Road to Natural Grocers who will remodel the existing building and site. Lamar Advertising has completed construction of a new 13,670 square-foot facility on Kerper Court to replace the existing facility on Elm Street that is being redeveloped for a medical service facility. In late 2016, the Barrell House opened at 3rd and Main Streets. In August 2017, a new Caribou Coffee and Einstein Bagels opened in Wacker Plaza. Additionally, Starbucks broke ground on a new, stand-alone store on U.S. Hwy 20 / Dodge. These developments follow recent openings of Chick-Fil-A, Popeye's, Chipotle Grill, Devil's Pit Char-B-Que, Five Guy's Burgers, Smoke Stack, and The Dungeon. And, Freddy's Frozen Custard will open a new restaurant in Asbury Plaza as construction began in the Fall of 2017. Health Services UnityPoint-Health Finley Hospital completed a $42 million project in June 2016. A three-story, 70,000 square-foot addition that houses the Finley Heart and Vascular Center, and new emergency and surgery departxnents. The first floor serves as a new emergency department with 16 exam rooms. Floar two features eight new general surgical suites, three special procedure rooms, an anesthesia care unit and outpatient center. The third floor will allow Finley to consolidate all its heart care services into one location. Mercy Medical Center completed its redesign of the main entrance, admitting, and lab facilities in summer 2017. The transformation provides more coxnfart and convenience for patients, family, and visitors. Mercy Medical Center along with Medical Associates Clinic announced plans for a $25 million project to build a two-story building east of the hospital to serve as a hematology/oncology outpatient clinia The plans are currently on hold. Iowa Health Facilities Council did not grant their approval for a certificate of need for a linear acceletor included in the project. Education Dubuque Senior High School completed most of the renovations to the school just priar to the beginning of the 2017-2018 school year. The $30 million, two-year project added a new main entrance, administrative offices, student commons, cafeteria, gymnasium, and classroom additions to the school. The remaining projects are expected to be fmished in February 2018. Wahlert Catholic High School completed a $17.8 million renovation this fall. The school was completely redone, including new classrooms and hallways, modifying the existing roof structure, and a new heating and cooling system. University of Dubuque received a $60 million estate commitxnent, the largest in the University's history. The investment, an estate gift will support a scholarship Fund. The two-part commitxnent, $37 million of which has already been received by the University, will bring UD's endowment to over $150 million. Loras College, a four-year Catholic liberal arts college, officially raised $105.6 million, during its Inspiring Lives & Leadership campaign. IYs the largest and most successful fundraising effort in the college's 178-year history. Clarke University remodeled its Food Science Labs, which are the first of their kind in the tristate area. The space includes a food preparation and processing lab, sensory evaluation lab, and a food analysis lab. Dubuque is a major center of food production and processing, ingredients manufacturing, and food-related entrepreneurism. The food science sector is a key area for growth, as identified in the Greater Dubuque Development Corporation's (GDDC) current marketing plan. According to the GDDC, 68 companies within 90 minutes of Dubuque are related to food science, and there are 498 food processing-ingredient companies headquartered in Iowa and five surrounding states. � The City's recent awards and recognition from a variety of sources include: • The National Civic League named Dubuque a 2017 All-America City. This makes the fourth time in ten years Dubuque has received this award which recognizes communities whose citizens wark together to identify and tackle community-wide challenges and achieve uncommon results. Dubuque received the 2017 award for the Dubuque Campaign for Grade-Level Reading, a netwark of individuals and organizations working together to ensure that all children read at grade level by the end of third grade. • Dubuque was awarded an Outstanding Achievement Award for the Bee Branch Watershed Flood Mitigation Proj ect at the 2017 City Livability Awards in June 2017. The Conference of Mayors City Livability Program recognizes mayoral leadership in developing and implementing programs that improve the quality of life in America's cities,focusing on the leadership, creativity, and innovation demonstrated by the mayors. • In November of 2017, Alot Travel, an online travel inforxnation source that describes itself as offering "cultivated insights from travel professionals and wanderlust enthusiasts," announced its list of the "30 Best Small Cities in the United States."Dubuque was ranked #12 and was the only Midwestern city in the top 20 and one of just two Iowa cities to make the list. MAJOR INITIATIVES For the Year. The City of Dubuque staff, following the adopted priorities of the mayor and city council, has been involved in a variety of projects throughout the year. These projects reflect the City's commitment to continue to provide high quality services to the residents and stakeholders of Dubuque within the budget guidelines set by the mayor and city council. Bee Branch Watershed Flood Mitigation Project: The City's $219 million Bee Branch Watershed Flood Mitigation Project is a 20-year, multi-phased investment to mitigate flooding, improve water quality, stimulate investment, and enhance quality of life within the Bee Branch Watershed. The City has received $160 million in state and federal funds far the project. The $60 million Upper Bee Branch Creek Restoration phase of the project was finalized, and a ribbon-cutting ceremony was held in July 2017 to celebrate the opening of the Bee Branch Creek Greenway. In 2016, the City of Dubuque was awarded a total of$31.5 million through the U.S. Department of Housing & Urban Development (HUD) National Disaster Resilience Competition (NDRC) Grant awarded to the State of Iowa's "Iowa Watershed Approach." This total includes $8.4 million far the Bee Branch Healthy Homes Resiliency Program in the form of five-year forgivable loans to improve 320 housing units, including owner-occupied homes; single-unit rentals; and small, multi-family residential units. The grant will also provide $23.1 million for stormwater infrastrucbxre improvements related to the Bee Branch Watershed Flood Mitigation Project. Specifically, this includes $9 million towards the $18 million project to install culverts to pass floodwaters from the Upper Bee Branch to the Lower Bee Branch through the railway yard on Garfield Avenue. The grant will also provide $11.5 million towards the $15.4 million project to provide drainage improvements from the Bee Branch Creek to the west along 22nd Street up Kaufmann Avenue all the way to Kane Street. Finally, the grant will provide $2.6 million towards the $11.3 million project to provide drainage improvements from the Bee Branch Creek to the west along 17th Street to West Locust Street and along West Locust Street towards Kirkwood Street The IILJD Resiliency Grant will expedite the completion of the Bee Branch Watershed Flood Mitigation Project, expanding its scope to lessen the flood damage caused by future flash floods. a As part of the Bee Branch project, the City will convert 240 alleys in the Bee Branch Watershed to "green alleys" which feature permeable concrete pavers. These specifically designed pavers allow water to pass through the surface and filter into the soil below. The green alleys are expected to reduce the amount of storxnwater run-off in the watershed by up to 80 percent and prevent flooding. In addition to reducing stormwater run-off, the green alleys will replenish ground water and help prevent pollutants on roadways from running off into the storxn sewer system, and ultimately, the Mississippi River. As of fall 2017, more than 70 alleys have been completed. Water System Purchase: In late 2016, the City of Dubuque executed an agreement to purchase a private water system from the Central Iowa Water Association (CIWA). The agreement settled ongoing litigation between the City and CIWA, resulting in transferred ownership of the private water system to the City of Dubuque. Under the agreement, CIWA relinquished its federally protected service area far two miles outside of the City's current corporate limits. Additionally, CIWA agreed not to serve any water or sewer customers in the future within two miles of the City's corporate limits at the time service is requested, and as the corporate city limits expand. The acquisition of the water system, including the water tower near Swiss Valley Road, enables the City of Dubuque to meet the future needs of residential, commercial, and industrial water customers in these and surrounding areas. Dubuque's municipal water system has readily available capacity and pressure needed for fire suppression to commercial and industrial facilities, as well as serve the needs of industrial manufacturing processes with water pressure requirements. The service area includes the Southwest Arterial project corridor, the development of which is estimated to have the potential to generate $1.67 billion in economic output, $653 million in labor income, and $1.02 billion in value added from 2021-2030. Intermodal Transportation Center: The Jule, the City of Dubuque's Public Transit Division, completed its $12 million Intermodal Transpartation Center in the Historic Millwark District in spring of 2016. This facility provides vital transportation connections required far the success of existing investments and will be instrumental in leveraging additional investments required to achieve the long-term goals for downtown Dubuque. The centralized transportation hub connects automobile, bus, and pedestrian traffic, while increasing demand for alternative transpartation modes. Dubuque County and the Dubuque Community School District will benefit from the center, as it provides various transpartation options for Millwark District and Washington Neighborhood residents, as well as visitors and downtown employees, spurring economic development in the district Part of the project was funded with an $8 million grant from the U.S. Federal Transit Administration. That facility will soon be complimented by a new Jule Operations and Training Center being constructed nearby on Kerper Blvd. It will replace the century-old facility on Central Avenue and provide numerous operating efficiencies. The $6.8 million project will be completed in early 2018 and is supplemented with nearly$5.3 million in state and federal funds. SouthwestArterial: In 2013, the City of Dubuque and the Dubuque Metropolitan Area Transpartation Study (DMATS) successfully negotiated a Memorandum of Understanding with the Iowa Deparhnent of Transpartation (Iowa DOT) far the transfer of jurisdiction of the Southwest Arterial/ U.S. Hwy 52 project, a 6.1-mile, four-lane, divided freeway with priority-one access control and will provide an alternative route far traffic through southwestern Dubuque. It will connect the Dubuque Technology Park on U.S. Hwy 61 / 151 with the new Dubuque Industrial Center West and the existing Dubuque Industrial Center near U.S. Hwy 20 / Dodge. Property acquisition was completed in 2016 and a groundbreaking ceremony was held in October 2016. Extensive grading and construction are currently under way. The Iowa DOT, DMATS, Dubuque County, and the City of Dubuque have budgeted over $159 million to build the Southwest Arterial with a preliminary two-lane design scheduled for completion in 2019. s Following the completion of the Southwest Arterial, the project has the potential to generate $80 million in property taxes, $1.67 billion in economic output, $653 million in labor income, and $1.02 billion in value added from 2021 to 2030. The Southwest Arterial will also annually generate $135 million in state and local taxes and $130 million in federal tax from new economic development, as well as save $30 million for the 10-year period. This project will also generate $16 million in property tax, $304 million in economic output, $24 million in state and local taxes, and $24 million in federal taxes due to economic development, in addition to $3 million in safety savings from 2030 onwards. Side benefits include removing over 500 commercial vehicles a day from downtown streets and encouraging redevelopment on Central Avenue and White Street. Almost 1,000 trucks per day will be removed from U.S. Hwy 20 / Dodge. Additional traffic will be removed from Kelly Lane, Fremont Avenue, Cedar Cross Road, Rockdale Road, and other residential streets. For the Future. The mayor and city council will continue to take action to achieve their goals of maintaining a strong local economy, sustaining stable property tax levies, and enhancing the safety and security of residents through neighborhood vitality. City staff will wark to implement the city council's vision for Dubuque. A program of comprehensive service reviews has continued as a vehicle for analyzing City services, identifying opporbxnities for improvement, and determining areas of possible cost reductions. The goal of the service review program is to ensure that services desired by the citizens are provided in the most cost effective and efficient method possible. The city council's goals far the next five years and beyond include the following: • Robust Local Economy: Diverse Businesses and Jobs with Economic Prosperity • Vibrant Community: Healthy and Safe • Livable Neighborhoods and Housing: Great Place to Live • Financially Responsible, High-Perforxnance City Organization: Sustainable, Equitable, and Effective Service Delivery • Sustainable Environxnent: Preserving and Enhancing Natural Resources • Partnership for a Better Dubuque: Building Our Community that is Viable, Livable, and Equitable Diverse Arts, Culture, Parks, and Recreation Experiences and Activities • Connected Community: Equitable Transportation, Technology Infrastructure, and Mobility FINANCIAL INFORMATION Internal Controls: City management is responsible for establishing and maintaining internal controls to ensure that the assets of the government are protected from loss, theft, or misuse, and to ensure that adequate accounting data is compiled to allow far the preparation of financial statements in conformity with generally accepted accounting principles. Single Audit: As a recipient of federal and state financial assistance, the City of Dubuque's government is responsible for ensuring that adequate internal controls are in place to ensure compliance with applicable laws, regulations, contracts, and grants related to those programs. These internal controls are subject to periodic evaluation by management. As a part of the City's single audit described earlier, tests are made to determine the adequacy of internal controls, including that portion related to federal programs, as well as to deterxnine that the government has complied with applicable laws,regulations, contracts, and grants. Budgeting Controls: In addition, the governxnent maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the city council. All funds, except for fiduciary fund types which include pension trust funds, private purpose trust funds, and agency funds are included in the annual budget process. The level of 10 budgetary control (that is the level at which expenditures cannot legally exceed the appropriated amount) is established by state programs. The government also maintains an encumbrance accounting system as one technique for accomplishing budgetary controL Encumbered amounts lapse at year-end; however, encumbrances generally are re-appropriated as part of the following year's budget. As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. Cash Management: Cash temporarily idle during the year was invested in demand deposits, certificates of deposit, federal agency obligations, and authorized mubxal funds. The City (including DMASWA) received cash basis inveshnent earnings of$872,320 far the year. The investment policy adopted by the city council stresses the importance of capital preservation. The policy directives intend to minimize credit and market risks while maintaining a competitive yield on the portfolio. Risk Management: The City of Dubuque is a member of a statewide risk pool for local governments, the Iowa Communities Assurance Pool (ICAP). The coverage for general and auto liability, as well as public official and police professional liability are acquired through this pool. Workers' compensation coverage up to $500,000 for each accident is provided through self-insurance. The accumulated reserve provision for such claims reflected a $99,108 net position as of June 30, 2017. The City has also established a self-insurance plan for medical, prescription drug, and shart-term disability. The accumulated reserve provision for such claims equaled $1,550,951 as of June 30, 2017. All self-insured health plans are certified as actuarially sound and certificates of compliance have been filed with the State of Iowa. Bond Rating: Moody's Investor Service assigned a Aa3 rating on the Series 2016 A, B, and C bonds,which reflects the City's sizable tax base and role as a regional economic center in nartheastern Iowa; a trend of strong employment growth which is projected to continue;recent declines in fund balance and cash reserves which are expected to stabilize at healthy levels going forward; high debt burden with additional borrowing planned; and moderate exposure to unfunded pension liabilities. In October of 2016, Moody's upgraded the 2015A bond to an A2 from an A3 rating. The notching reflects the city's adequate debt service coverage provided be the pledged sales tax revenue and their expectation to provide coverage of 2.5 times the maximum annual debt service. The City's revenue bonds are rated Aa3. Moody's provides credit ratings and research covering debt instruments and securities. The purpose of Moody's ratings is to provide investors with a simple system to gauge future relative creditworthiness of securities. The firxn uses nine rating classifications to designate least credit risk to greatest credit risk: Aaa, Aa, A, Baa, Ba, B, Caa, Ca, and C. Moody's appends numerical modifiers 1, 2, and 3 to each rating classification. AWARDS AND ACKNOWLEDGEMENTS Awards: The Government Finance Officers Association of the United States and Canada(GFOA) awarded a Certificate of Achievement for Excellence in Financial Reparting to the City of Dubuque, Iowa, for its Comprehensive Annual Financial Report far the fiscal year ended June 30, 2016. This was the 29th consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a governxnent unit must publish an easily readable and efficiently organized comprehensive annual financial repart. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current comprehensive annual financial report continues to meet the Certificate of Achievement program requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. 11 GFOA also awarded a Certificate of Recognition for Budget Preparation to the City of Dubuque, Iowa, for its annual budget for the fiscal year ended June 3 0, 2017. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device. This was the 12th consecutive year that the City has achieved this prestigious award. This award is valid for a period of one year. The City of Dubuque's investment policy was awarded the Certification of Excellence in July 2009 by the Association of Public Treasurers of the United States and Canada. The investment policy is reviewed every five years by the APT US&C. The investment policy was successfully recertified in 2016. Acknowledgments: The preparation of this report could not be accomplished without the efficient and dedicated services of the entire Finance Department staff. We also thank the mayor and city council for their interest and support in planning and conducting the financial operations of the City of Dubuque in a responsible and progressive manner. We also thank the independent certified public accountants, Eide Bailly LLP,whose competent assistance and technical expertise have enabled the production of this report. Sincerely, . ��'�� t Michael C. Van Milligen Jean M.Nachtman, CPA, CPFO City Manager Finance Director 12 CITY OF DUBUQUE ORGANIZATIONAL CHART Citizens of Dubuque I CiTy Attorney — City Cowlcil — City Clerk Library Airport ManagementlLegislative � CIYy Managel''s Neighborhood � OffiCe � DeveAopment PersonneA Public Information Office �� Sustainability � � � Budget Finance Information can�eTv ��a�p�n�� SCCVICRS 9yrtans Emergency Health Services Communications Planning Services Police Departrnent Economic NSre Departrnent T��.mnm�.�� ra�kmq Development a.��q��y e.w��o� Div6ion Managemeu[ 9ervices Arcs antl cmm�a�eaam: Engineering Housing& Departrnent Community Develooment Leisure Services Human Rights R�°�b� PackDivisi� Tcaming& HumanRelatl�s Div6wn Workforce Developm�[ Multlmttucal GcantlRivu' xa.mqc�naP.r c�naP.r BuildingServices Water Departrnent cmmc�re� Public Works �'ater& Resource Recovery Center Elected by the Appointed by the Appointed by the Appointed by the Citizens of Dubuque City Council Library Board of AirpoM Commission Trustees 13 CITY OF DUBUQUE, IOWA OFFICIALS JUNE 30,2017 CITY COUNCIL Roy D. Buol Mayor Ric W. Jones Council Member—At Large David T. Resnick Council Member—At Large Kevin J. Lynch Council Member— lst Ward Luis Del Toro Council Member—2nd Ward Joyce E. Connors Council Member—3rd Ward Jake A. Rios Council Member—4th Ward COUNCIL APPOINTED OFFICIALS Michael C. V an Milligen City Manager Barry A. Lindahl Seniar Counsel Crenna M. Brumwell-Sahxn City Attorney Maureen A. Quann Assistant City Attorney Kevin S. Firnstahl City Clerk DEPARTMENT MANAGERS Robert A. Grierson Airport Manager Therese H. Goodmann Assistant City Manager Jenny M. Larson Budget Director Todd M. Carr Building Services Manager Gus N. Psihoyos City Engineer Maurice S. Jones Economic Development Director Jean M. Nachtman Finance Director Rick A. Steines Fire Chief Mary Rose Corrigan Health Services Manager Alvin L. Nash Housing and Community Development Manager Kelly R. Larson Human Rights Director Randall K. Peck Personnel Manager Christine A. Kohlmann Inforxnation Services Manager Marie L. Ware Leisure Services Manager Susan A. Henricks Library Director John L. Klostermann Public Works Director Laura B. Carstens Planning Services Manager Mark M. Dalsing Police Chief Robert M. Green Water Department Manager William J. O'Brien Water&Resource Recovery Center Manager 14 � Government Finance Officers Association Certificate of Achieve�.nent for Excellence in Financial Reporting Presented to City of Dubuque Iowa For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 2 � ' 4 � I Executive Director/CEO I 15 THIS PAGE IS INTENTIONALLY LEFT BLANI� 16 Financial Section June 30, 2017 City of Dubuque, Iowa 17 THIS PAGE IS INTENTIONALLY LEFT BLANI� 18 EideBailly cr�a eusixEss nunw�s Independent Auditor's Report To the Honorable Mayor and Members of the City Council City of Dubuque, Iowa Report on the Financial Statements We have audited the accompanying financial statements of the governxnental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund inforxnation of the City of Dubuque, Iowa as of and far the year ended June 30, 2017 and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's ResponsibiliTy for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentarion of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's ResponsibiliTy Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of Dubuque Initiatives and Subsidiaries, which represent 61 percent, 76 percent, and 67 percent, of the assets, net position, and revenues of the aggregate discretely presented component units. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Dubuque Initiatives and Subsidiaries, is based on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in GavernmentAuditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perforxn the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The financial statements of Dubuque Initiatives and Subsidiaries and Dubuque Convention and Visitors Bureau, discretely presented component units, were not audited in accordance with GavernmentAuditing Standards. An audit involves perforxning procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the enrity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. What inspires you,inspires us. eidebailly.mm 19 375 E.Horsetooth Rd.Bldg.4200 Fort Collins,CO 805253198 TF 800.4082929 T 970223.8825 F 970223.OS V EOE Opinions In our opinion, based on our audit report and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund inforxnation of the City of Dubuque, Iowa, as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof far the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the managemenYs discussion and analysis and the other required supplementary inforxnation listed in the table of contents be presented to supplement the basic financial statements. Such inforxnation, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary inforxnation in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires of management about the methods or preparing the information and comparing the inforxnation for consistency with managemenYs responses to our inquires, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the inforxnation because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forxning opinions on the financial statements that collectively comprise the City of Dubuque, Iowa's financial statements. The introductory section, combining nonxnajor fund financial statements, and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR)Part 200, Uniform Administrative Requirements, CostPrinciples, andAuditRequirements forFederalAwards (Uniforxn Guidance), and is also not a required part of the financial statements. The combining nonxnajor fund financial statements and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such inforxnation has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements ar to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining nonxnajor fund financial statements and the schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and staristical secrions 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. zo Other Reporting Required by Government Auditing Standards In accordance with Gove�nment Auditing Standa�ds,we have also issued a report dated December 21, 2017, on our consideration of the City of Dubuque,Iowa's internal control over financial reporting and on our tests of its compliance with certain provisions of laws,regulations, contracts, grant agreements, and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Gove�nment Auditing Standa�ds in considering the City's internal control over financial reporting and compliance. �GT Fort Collins, Colorado December 21, 2017 21 THIS PAGE IS INTENTIONALLY LEFT BLANI� zz CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2017 This section of the City of Dubuque's annual financial repart presents our discussion and analysis of the City's financial performance during the fiscal year that ended on June 30, 2017. Please read it in conjunction with the transmittal letter at the front of this repart and the City's financial statements found in the next section of this report. FINANCIAL HIGHLIGHTS • The net position of the City of Dubuque increased to $527,733,905 compared to net position of $501,793,953 for fiscal year 2016. • Governmental program revenues decreased by $5,748,481 from fiscal year 2016. The largest portion of the decrease is the lower grants reimbursement far the new terxninal parking at the airpart and far the SouthWest Arterial project • The City's business type activities program revenues increased $7,724,294. Charges for services increased $1,119,101. Water (3%), sewer (3%), storxnwater (7%), and refuse (2%) rates were increased in fiscal year 2017. Grant reimbursements for construction of the new Transit Bus Garage increased as construction is in full swing, while capital contributions for both storxnwater and sewer increased due to subdivisions being completed and assets being donated to the City. OVERVIEW OF THE FINANCIAL STATEMENTS The City's basic financial statements consist of government-wide financial statements, fund financial statements, and notes to the financial statements. This discussion and analysis is intended to serve as an introduction to the basic financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements The governxnent-wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to private-sector business. The paragraphs below provide a brief description of the governxnent-wide financial statements. The statement of net position presents information on all of the City's assets, deferred outflows, liabilities, and deferred inflows, with the difference between assets plus deferred outflows, and liabilities plus deferred inflows 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. To assess the overall health of the City,you need to consider additional non-financial factors such as changes in the City's property tax base and the condition of the City's infrastructure. The statement of activities presents inforxnation showing how the City's net position changed during the most recent fiscal year. All changes in net position are reparted 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 result in cash flows in future fiscal periods such as uncollected taxes and earned but unused sick and vacation leave. 23 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2017 The government-wide financial statements include not only the City itself (known as the primary government), but also three other legally separate entities (lrnown as component units), the Dubuque Metropolitan Area Solid Waste Agency (DMASWA), Dubuque Initiatives (D� and Subsidiaries, and the Dubuque Convention and Visitors Bureau (CVB) for which the City of Dubuque is considered financially accountable. Financial information for DMASWA,DI, and CVB are reparted separately from the financial information presented for the primary government. The Dubuque Metropolitan Area Solid Waste Agency, Dubuque Initiatives and Subsidiaries, and Dubuque Convention and Visitors Bureau issue separate financial statements. Dubuque Initiatives and Subsidiaries' financial statements are prepared on a calendar year basis while the Dubuque Metropolitan Area Solid Waste Agency's and Dubuque Convention and Visitors Bureau's financial statements are prepared on the same fiscal year basis as the City of Dubuque. The government-wide financial statements are divided into two categories: Governmental adivities. This category consists of services provided by the City that are principally supparted by taxes and intergovernxnental revenues. Basic City services such as police, fire, public works,planning, parks, library, and general administration are governxnental activities. Business-type activities. These activities are supparted primarily by user fees. The services provided by the City in this category include water, sewer, storxn water, refuse, salt, parking,transit and the America's River Project Fund Financial Statements A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with legal requirements for financial transactions and reporting. 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 functions 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 inforxnation may be useful in evaluating a governxnenYs near-term financial requirements. 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 governxnental funds with similar information presented for governxnental activities in the governxnent-wide financial statements. By doing so, readers may better understand the long-term impact of the City's near-term financial decisions. Both the governxnental fund balance sheet and governmental fund statement of revenues, expenditures, and changes in fund balances are followed by a reconciliation to facilitate this comparison between governmental funds and governmental activities. za CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2017 The City maintains three individual major governxnental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances far the general fund, tax increment financing fund, and debt service fund, all of which are considered to be major funds. Data from all other governxnental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonxnajor governmental funds is provided in the form of combining statements elsewhere in this report. The City legally adopts an annual budget by function. A budgetary comparison schedule has been provided. 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 enterprises funds to account for its sewer, water, storxn water, and refuse utilities, transit service, parking facilities, salt, and America's River Project. Internal service funds are accounting devices used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its engineering services, garage services, stores/printing, health insurance, and warkers' compensation. The City's internal service funds predominately benefit the governxnental activities and have been included in the governmental activities in the government-wide financial statements. Fiduciary funds. Fiduciary funds 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 suppart the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City has two fiduciary funds, an agency fund reporting resources held far the Dubuque Racing Association for improvements at the greyhound racing facility and an agency fund used for reporting resources from Mediacom for purchasing equipment relevant to public, educational, and governmental (PEG) access broadcasting. Notes to the 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. Required supplementary information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary inforxnation concerning the budget and actual results of the City, the City's proportionate share of the net pension liability and related contributions for both of the City's pension plans, and the funding progress for the retiree benefit plan. Other information. The combining statements referred to earlier in connection with nonmajor governmental funds, nonxnajor enterprise funds, internal service funds, and agency funds, are presented immediately following the required supplementary information. zs CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2017 GOVERNMENT-WIDE FINANCIAL ANALYSIS Net position. As noted earlier, net position may serve as a useful indicator of a governmenYs financial position when observed over time. The analysis that follows focuses on the change in net position for the governmental and business-type activities. The largest part of the City's net position reflects its net investment in capital assets such as land, buildings, infrastructure, machinery, and equipment less any related debt used to acquire those assets that is still outstanding. The debt related to the investment in capital assets is liquidated with resources other than capital assets. Restricted net position represents resources subject to external restrictions, constibxtional provisions or enabling legislation on how they can be used. Unrestricted net position is the part of net position that can be used to finance day-to-day operations without constraints established by debt covenants, legislation, or other legal requirements. CITY OF DUBUQUE'S NET POSITION 6ovemmevtalAc[ivities B�sivess-typeActivifies Total 201] 2016 201] 2016 201] 2016 CurrevtavdoNecassels $ 96,5]5,236 $ 95y9],489 $ 41,8]0,8]9 $ 46,385,321 $ 138,446,115 $ 142,382,810 Capitalassels 416,559,468 411y32,115 335,581,393 312,026,1]5 ]52,140,861 ]23y58,290 Totalassels 513,134,]04 50]y19,604 3]],452,2]2 358,411,496 89Q586y]6 866,341,100 Deferredo�tflowsofresources 15,40Q630 8,309,113 1,560y05 Slly44 16y61,535 9,121,05] Lovgtertnliabilities 119,295,802 125,242,041 193y53,18] 185,823,5]5 323,248y89 311,065,616 ONerliabilities 15y02,342 16,658,669 12,]10,09] 14,609,023 28,612,439 31,26],692 Total liabilities 145 198 144 141 y0Q]10 206 663 284 200 432 598 351 861 428 342 333 308 Deferredivflowsofresources 2]]2518] 30]86633 22]y91 548263 2]y53,1]8 31334896 Net positiov: Netivvestrnentivcapitalassels 3]5,5]8,520 369,244y04 164,448,390 161,326,]43 540,026y10 530,5]1,64] Res[ricted 23y55,112 21,4]3,309 3,]96,]52 4,254y0] 2],]51,864 25,]28,216 Unrestric[ed (43,921,629) (4],166,839) 38]6]60 (],339,0]1) (4Q044,869) (54,SOSy10) Totalvetpositiov $ 355,612,003 $ 343,551,3]4 $ 1]2,121y02 $ 158,242,5]9 $ 52],]33y05 $ 501,]93y53 Net position of the governmental activities increased $12,060,629 over fiscal year 2016 balance of $343,551,374. Governxnental activities had $2.6M of capital assets donated from outside sources. There was also a large increase in deferred outflows of resources due to investxnents differences in relation to pension liability with IPERS and MFPRSI. Grant revenues decreased by $SSM. The majority of the decrease was made up of a $2.4M decrease as the Airport Terxninal project completed and a $3.3M decrease in grant revenues far the Southwest Arterial Project. These decreases combined with smaller increases spread across other grants accounted far the overall decrease of grant revenues. zs CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2017 Net position far the business-type activities increased $13,879,323 over fiscal year 2016 of $158,242,579. Charges for services increased $1,119,101. The increase in charges for services revenue reflects the increase in water and sewer rates by 3% and the 2% increase in refuse and 7% increase in storxnwater rates Grants and contributions increased $6.6 million, this was due to an increase in transit grants along with an increase in contributions in the sewer, storxnwater and transit funds over fiscal year 2016. A portion of the City's net position $27,751,864 or 5.3%represents resources that are subject to external restrictions on how they may be used. At the close of fiscal year 2017, the City has negative total unrestricted net position. The government-wide negative unrestricted results from the TIF (governxnental activities) debt being used to finance capital assets of the business-type activities. Governmental activities. Taxes are the largest source of governmental revenues with properly taxes of $39,678,473 in 2017. Other governmental revenues included gaming $8,098,324, local option sales taxes $8,890,046, and charges for services $14,920,016. Governmental operating expenses during 2017 totaled $94,643,763. The largest programs were public safety of $30,020,343, public works of $19,608,137, community and economic development of $18,096,170, and culture and recreation of$13,653,509. Business-type activities. Business-type activities increased net position by $13,879,323 in fiscal year 2017 compared to fiscal year 2016 net position of $158,242,579. Operating revenue increased $1,119,101. Sewer's supplies and services expenses were lower in fiscal year 2017 than fiscal year 2016, due to the cessation of the I&I Program, along with a reduction of general sewer repairs. This was also the first year the Sewer fund accounted for inventory at year end. Sewer, Storxn & Water saw large increases in capital contributions as subdivisions were completed and their assets were transferred to the City. Intergovernmental revenue decreased $709,140; of which, $696,163 was a decrease in transit operating grants. z� CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2017 CITY OF DUBUQUE CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION 6ovemmevtalAc[ivities B�sivess-typeActivifies Total 20ll 2016 201] 2016 201] 2016 Revev�es: Prog�am reven�es Chacgesfocservices $ 14y20,016 $ 15,088,466 $ 33,090,352 $ 31y]1,251 $ 48,010,368 $ 4],059,]1] Operafivg gcavls avd covMb�tiovs 15,028,52] 15,301,219 1,]OO,lll 1,648,0]] 16,]28,698 16y49,296 Capital gcavls avd covMb�tiovs 13,360,280 18,66],619 14,160,820 ],60],]21 2],521,100 26,2]5,340 6evecal revev�es Propertytexes 39,6]8,4]3 36,518,506 - - 39,6]8,4]3 36,518,506 Local optiovsalestex 8,890,046 9,155,411 - - 8,890,046 9,155,411 Hotel/motel tex 2,821,]45 2,128,042 - - 2,821,]45 2,128,042 Utilityfravcttisefees 4,558,84] 4,360,10] - - 4,558,84] 4,360,10] 6arttivg 8,098,324 8,440,161 - - 8,098,324 8,440,161 Unrestric[edivvestrnentearnivgs 335,5]] 1,082,165 231,]46 40],528 56],323 1,489,693 6aiv ov sale of capital assets 83]20 813 492 54 0]4 102 824 13]]94 916 316 Totalreven�es 10],]]5,555 111,555,188 49,23],163 41,]3],401 15],012,]18 153,292,589 Er.penses: P�blicsafety 30,020,343 26,851,624 - - 30,020,343 26,851,624 P�blicwocks 19,608,13] 24,323,023 - - 19,608,13] 24,323,023 Hea1N and soQal services 815,251 96]y36 - - 815,251 96]y36 Giltureavdrecreatiov 13,653,509 12y93,331 - - 13,653,509 12y93,331 Comm�niry and economic developmevt 18,096,1]0 15,464,]81 - - 18,096,1]0 15,464,]81 6evecalgovemment Sy82,668 4,101,423 - - Sy82,668 4,101,423 Interes[on longterm debt 3,46],685 2y63,134 5,355,525 - 8,823,210 2y63,134 Sewagedisposalwocks - - 9,442,558 12,Sll,669 9,442,558 12,Sll,669 Watec�tilily - - 5,928y41 6,483,219 Sy28y41 6,483,229 Stortnwatec�tilily - - 4,06],3]4 5,021,523 4,06],3]4 5,021,523 Parldvgfaalifies - - 3,126,ffi3 3,420,296 3,126,823 3,420,296 America'sRivecProject - - 22,893 21,521 22,893 21,521 Refusewllectiov - - 4,202,]96 3y68,]61 4,202,]96 3y68,]61 1Yaysitsystem - - 4,23],054 4,2]4y6] 4,23],054 4,2]4y6] Salt 45,039 181,61] 45,039 181,61] Total er.pevses 94,643,]63 8],665,252 36,429,003 36,189,583 131,0]2,]66 123,854,835 Increase(decrease)iv vet positiov before e#raocdivary item avd traysfecs 13,131,]92 23,889y36 12,808,160 5,54],818 25y39y52 29,43],]54 1Yaysfers (1,0]1,163) (9]9y00) 10]1163 9]9y00 Increase(decrease)ivvetpositiov 12,060,629 22y10,036 13,8]9,323 6,52],]18 25y39y52 29,43],]54 Netpositioqbeginnivg 343,551,3]4 320,641,338 158,242,5]9 151,]14,861 501,]93y53 4]2,356,199 Netpositioqevdivg $ 355,612,003 $ 343,551,3]4 $ ll2,121y02 $ 158,242,5]9 $ 52],]33y05 $ 501,]93y53 28 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2017 Governmental funds. The focus of the City's governxnental funds is to provide information on near-terxn inflows, outflows, and balances of spendable resources. Such inforxnation is useful in assessing the City's financing requirements. The City's governmental funds reported a combined fund balance of $55,400,948 at June 30, 2017. $6,461,116 is in nonspendable for inventory, advances to other funds, receivables, and prepaid items. $69,412 is nonspendable endowment corpus. $28,105,605 is restricted for debt service and bond ordinance, road use tax funds, capital improvements, community development programs, employee benefits, endowments, and various grants. Council ordinance has committed $6,592,154 for capital improvements. $1,590,065 is assigned for capital improvements and equipment. This leaves $12,582,596 for unassigned fund balances in the governxnent funds. The General Fund's fund balance reserve goal is 10% of budgeted annual expenditures. The fund balance of the General Fund increased by $1,785,245 to $19,760,541. Gaming revenues decreased $341,837 ar(4.1)%in fiscal year 2017. Tax revenues increased $2.5 million and there were increases in licenses and permits,fines and forfeits, investment earnings and miscellaneous. There was an increase of expenditures of$69M in the governmental activities. $3.1M of this was in relation to a pension expense increase over the prior year related net pension liability, deferred outflows and deferred inflows. $19M of the increase was in relation to increased expenses in Section 8 and Lead Paint, which in turn was covered by an increase in related grant revenue. General governxnental saw an increase in expenses in relation to the funding of the Bus Storage facility. This is a transit asset that is being partially funded through TIF revenues. The fund balance of special revenue fund Tax Increment Financing increased slightly by $31,639 to $7,355,920. Tax revenues increased by $1.8N1, offset by an increase in TIF rebates given and a decrease in investment revenue due to a drop in market value as compared to prior year. 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 combined net position of the enterprise funds at June 30, 2017, totaled $172,121,902 of which the unrestricted is $3,876,760. The net position of the Internal Service Funds increased by $201,638 to $665,029. The Health Insurance Reserve Fund decreased $454,744 and the General Services increased $612,800. Workxnen's Comp experienced $813,196 more expenses in 2017 as compared to 2016. The unrestricted net position of the Internal Service Funds is $499,972. zs CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2017 The Sewer Fund had a decrease by $846,848 far total net position of $26,506,068. Assets for green alley improvements are moved yearly from Sewer Fund into Storxnwater Fund to reflect the enterprise benefiting from the assets. The debt far the green alley project is paid with sewer revenue funds. This is an agreement with the Iowa State Revolving Loan. Currently $8.7 million of debt for green alley is recorded in the Sewer Fund and assets in the Storxnwater Fund. The Water Utility had an increase in net position by $2,449,289 far total net position of $27,261,925. Water rates were increased 3%in 2017. The Storm Water Utility had a 17.5% increase in net position of $8,239,469. Ending net position is $55,159,049. $2.8 million in assets for green alley project was transferred to Storxnwater from Sewer. The debt far this asset is remaining in the Sewer Fund. Stormwater had a 7% increase in rate for fiscal year 2017. The Parking Facilities had a increase in net position of $27,890. Ending net position is $47,755,020. Revenues increased $39,564. Depreciation expense also increased $156,499 over fiscal year 2016 as this was the first year the parking ramp at the Interxnodal Center was depreciated. Other Enterprise Funds net position increased by $4,009,523 to $15,439,840. This was primarily due to Transit's increase of$3,984,066 in net position due to a contribution of assets from governmental funds along with receiving grant dollars for building of the new bus garage. Health Insurance Reserve decreased in fiscal year 2017 by $454,744. Revenues decreased by $978,457 and claims increased 1%over 2016. Workxnen's Comp Reserve net position decreased by $63,766. The fund saw an increase in both actual claims paid and claims payable accounting for the increase. BUDGETARY HIGHLIGHTS There were two amendments to the City's 2016-2017 cash basis budget. The first amendment was passed in September 2016 to reflect operating and capital budget carryovers (continuing appropriation authority) from fiscal year 2016 and amended the fiscal year 2016 budget for operating and capital City Council actions since the beginning of the fiscal year. The second budget amendment was passed in March 2017 to reflect City Council actions since the second budget amendment and amendments to add additional appropriation authority due to increased revenues. The final budget far total cash basis receipts increased by $42,049,710. The increase was primarily attributable to revenue associated with capital projects and operating carryovers which mainly include grants to intergovernmental funds. The final budget far total expenditures increased $98,730,453 from the original budget. The increase was primarily attributable to purchase order encumbrances carryover, capital projects, and operating carryovers from the prior year and expenditures associated with new grants received. 30 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2017 Actual cash basis revenues were $45,264,235 less than the final amended budget; and, cash basis expenditures were $92,374,940 less than the final amended budget due primarily to projected capital projects not completed by fiscal year end. 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, 2017, amounts to $752,140,861 (net of accumulated depreciation). This inveshnent in capital assets includes land, buildings, improvements other than buildings, machinery and equipment, infrastructure, and construction in progress. Additional information on the City's assets can be found in Note 6 to the financial statements in this report. CAPITAL ASSETS(net of acwmulated depreciation) Gwemmental Activities Business-type Acti4ities Total 201� 2016 201� 2016 201� 2016 Land $ 80,134,81� $ �9,�62,�21 $ 24,185y03 $ 23,0]0,018 $ 104,320,�20 $ 102,832,]39 Buildivgs 140y98,926 140,451y9] 152,109,�]8 151,445�82 193,108,�04 191,89],3�9 Impvwemevl�othevihanbuildivgs 23,8]4,592 23,�64,449 161,541265 142,5�9,440 185,415,85� 166�43,889 Maclilveryandequipmevt 4�,225,119 46,318,912 110,364,436 103,8]2�39 15�,589,555 150,191,311 InfiastrucNre 231y30,452 22�y44,685 - - 231y30,452 22�y44,685 Covstructiovivprogvess 44,6]3y68 38,114214 6,50],415 1,888,488 51,181,383 40,002,�02 n��aeeaaep�e��aeoo (isz2�s,aoc� (iaa,aza,9z3) (iiv,iz�,aoa) (iiqsas,avz) (z�i,aos,sio) (zss,zsa,ais) a aic,ssv,acs a aiiy3z,iis a 33s,ssi�v3 a 3iz,ozc,vs a �sz,iaqsci a n3yss,aso Major expenditures during 2016-2017 were far the construction wark on the Bus Garage, SouthWest Arterial construction, Green Alley projects, Grandview/Delhi Roundabout and Bee Branch storm water projects. Long-term debt At year end, the City had $273,287,607 of debt outstanding. During fiscal year 2017,the City issued $20,360,000 of general obligation bonds, $20,130,000 of which was used for refunding. The City refunded $20,495,000 of general obligation bonds. The refunding was undertaken to reduce total debt service payments. The results of the transaction is a reduction of$1,326,119 in future debt service payments for an economic gain of$1,148,511 Revenue capital loan notes have been issued far the planning and construction of sewer, storxnwater, and water capital projects through the State of Iowa State Revolving Loan Funds (SRF). The City issued an additional $7,388,799 of SRF debt in 2017 as part of the Bee Branch Storxnwater construction project and $2,150,596 for green alley projects reducing storxnwater runoff. The City has pledged income derived from the acquired or constructed assets to pay debt service. The City continues to operate under the State debt capacity limitations. The State limits the amount of general obligation debt outstanding to 5%of the assessed value of all taxable properly in the community. Thus the City's debt capacity is $207,174,109. With $143,800,280 of debt applicable against the capacity, the City is utilizing 69.41% of this limit Additional inforxnation on the City's long-terxn debt can be found in Note 7 of this report. 31 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2017 ECONOMIC FACTORS The City's unemployment rate as of October, 2017 was 2.1%, down from 2.9% in October, 2016. The national average was 4.1% for October 2017, according to the Bureau of Labor Statistics. State of Iowa was 3.0%as reported in October, 2017. The assessed valuation of taxable property, net of exemptions, increased by 5.7%to $2,652,700,000. In fiscal year 2017, the minimum monthly refuse rate increased from $13.90 to $14.77, sewer and water rates increased 3%, and the storxn water monthly fee increased from $6.38 to $6.81 per single family unit (SFU). Requests for information. This financial report is designed to provide a general overview of the City's finances for all those with an interest in the governxnent's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director, 50 West 13th Street,Dubuque,Iowa 52001-4864. 32 Basic Financial Statements Fiscal Year Ended June 30, 2017 City of Dubuque, Iowa 33 CITY OF DUBUQUE,IOWA STATEMENT OF NET POSITION JUNE 3Q 2017 Primary Government Component Units Dubuque MeVopolitan Dubuque Dubuque Governmental Business-type Area Solid Initiatives and Convention and Activities Activities Total WasteAgency Subsidiaries VisiWrsBureau ASSETS CURRENTASSETS Cashandpooledcashinvestrnents $ 36,488,262 $ 15,478,972 $ 51,967,234 $ 2,837,257 $ 1,115,051 $ 3,458 Receivables Proper[y taY Delinquent 353,651 - 353,651 - - - Succeedingyear 25,863,049 - 25,863,049 - - - Accounts and other 1,734,811 3,304,135 5,038,946 44Q634 206,207 23,235 Specialassesgnents 811,635 - 811,635 - - - Acaued interest 111,217 27,886 139,103 28,436 - - Notes 521,437 - 521,437 - 28,776 - Intergovemmental 8,225,765 4,167,168 12,392,933 5,158 - - Intemal balances 2,887 (2,887) - - - - InvenWries 75Q667 906,305 1,656,972 - 133,347 7,899 Prepaiditems 848,186 SQ866 899,052 1Q570 Total Cmrent Assets 75 711 567 23 932 445 99 644 012 3 322 O55 1 483 381 34 592 NONCURRENTASSETS Expendablerestricted cash&investrnents 9,441,722 17,938,434 27,38Q156 1Q097,226 1,217,509 31,396 Nonespendablerestricted cash andinvestrnents 69,412 - 69,412 - - - Notesreceivable 11,352,535 - 11,352,535 - 207,230 - Capital assets Land 8Q134,817 7A,185,903 104,32Q720 2,952,666 117,723 - Buildings 14Q998,926 152,109,778 293,108,704 106,495 45,549,283 - Improvements otherthan buildings 23,874,592 161,541,265 185,415,857 13,668,654 - - Machineryandequipment 47,225,119 11Q364,436 157,589,555 4,14Q006 23,107 293,828 InfrasWcture 231,93Q452 - 231,93Q452 - - - Constructionin progress 44,673,968 6,507,415 51,181,383 1,188,804 - - n��,m�tae�ddepre�ta�o� (isz,z�s,ao� (ii9,iz�,aoa) (z�i,aos,sio) (9,si9,ss9) (�,sss,osi) TotalNoncurrentAssets 437,423,137 353,519,827 79Q942,964 22,333,992 39,231,801 325,27A TotalAssets 513,134,704 377,452,272 89Q586,976 25,656,047 4Q715,182 359,816 DEFERRED OUTFLOWS OF RESOURCES Pension Related defe�red outflows 15 400 630 1 560 905 16961 535 161 696 34 CITY OF DUBUQUE,IOWA EXHIBIT 1 STATEMENT OF NET POSITION(continued) JUNE 3Q 2017 Primary Government Component Units Dubuque MeVopolitan Dubuque Dubuque Governmental Business-type Area Solid Initiatives and Convention and Activities Activities Total WasteAgency Subsidiaries VisiWrsBureau LIABILITIES C[JRRENT LIABILITIES Accountspayable $ 7,206,023 $ 4,342,853 $ 11,548,876 $ 538,537 $ 46,477 $ 16Q992 Acauedpa}soll 1,542,879 29Q127 1,833,006 27,130 - - Loanspayable 68,000 1,028,074 1,096,074 - - 93,071 Notespayable 195,880 3,725,800 3,921,680 - 433,504 - General obligation bonds payable 5,7A1,016 2,408,985 7,65Q001 395,000 - - Revenuebondspayable - 305,000 305,000 - - - Tas inaement financing bonds payable 475,000 - 475,000 - - - Acaued compensated absences 443,005 55,849 498,854 2,840 - - Acauedinterestpayable 28Q653 553,409 834,062 22,713 492,080 - Intergovemmental payable 5,726 - 5,726 74,954 - - Uneamed revenue 444,160 444,160 TotalCmrentLiabilities 15,902,342 12,71Q097 28,612,439 1,061,174 972,061 254,063 NONCURRENT LIABILITIES Loanspayable 4,582,000 4,181,828 8,763,828 - - 53,862 Notespayable 255,883 106,788,144 107,044,027 - 5,207,974 - General obligation bonds payable 48,559,703 42,078,038 9Q637,741 8,973,7A3 - - Revenuebondspayable - 33,535,566 33,535,566 - - - Landfill closure and postclosure care - - - 3,705,392 - - Tas inaement financing bonds payable 19,858,690 - 19,858,690 - - - Acaued compensated absences 5,047,838 71Q447 5,758,285 235,695 - - Netpensionliabiliry 46,80Q991 5,74Q059 52,541,050 594,618 - - NetOPEBLiability 4,19Q697 919,105 5,109,802 98,767 TotalNoncurrentLiabilities 129,295,802 193,953,187 323,7A8,989 13,607,715 5,207,974 53,862 Total Liabilities 145 198 144 206 663 284 351 861 428 14 668 889 6 180 035 307 925 DEFERREDINFLOWSOFRESOURCES Pension related defe�red inflows 1,576,645 227,991 1,804,636 23,618 - - Succeedingyearproper[ytas 25,863,049 - 25,863,049 - - - Defe�red arnount on refunding 285,493 285,493 Total defe�red inflows of resources 27 725 187 227 991 27 953 178 23 618 NET POSITION Netinvestrnentin capitalassets 375,578,520 164,448,390 54Q026,910 8,422,353 37,571,056 293,828 Res[riRed for/by: Bondordinancedevelopmentagreement 2,14Q740 3,796,752 5,937,492 - - - Debtservice 25Q77A - 25Q77A - - - Employeebenefits 35,104 - 35,104 - - - Communirydevelopment 8,984,184 - 8,984,184 - - - Iowa Finance Authoriry Trust 295,667 - 295,667 - - - Capitalprojects 1Q251,141 - 1Q251,141 - - - Franchise agreement 569,299 - 569,299 - - - Endowments,expendable 121,401 - 121,401 - - 1,887 Endowments,nonexpendable 69,412 - 69,412 - - - Other 1,237,440 - 1,237,440 - - - State statute - - - 85,556 - - Landtill closure&pos[closure care - - - 752,448 - - Minority interest - - - 423,828 - - Unrestricted (43,921,629) 3,876,760 (4Q044,869) 1,441,OA (3,035,909) (7A3,87A) TotalNetPosition $ 355,612,003 $ 172,121,902 $ 527,733,905 $ 11,125,236 $ 34,535,147 $ 51,891 See notes W financial statements. 35 CITY OF DUBUQUE,IOWA STATEMENT OFACTNITIES EXHIBIT 2 FOR THE YEAR ENDED JUNE 3Q 2017 HogcamRevev�es Net(Eyievse)Revev�eavdChavgesivNetPositiov Primary 6wemmevt CompovevtUvils Dubuque Opecativg Capital6rants Metropolitav D�b�q�e D�b�q�e Charges fic 6ravts avd avd Total Prog�arn 6ovemmevtal B�sivess-type Area Solid Initiatives avd Covventiov avd FLvctiovs/Prog�ams E4pevses Services CovMb�tiovs Contrib�fions Revev�es Activities Ac[ivities Total WasteAgency S�b9diaries Vi9tocsBurea� Primary governmeut 6ovemmental Activities: P�blicsafety $ 30,020,343 $ 2y30,068 $ 1,088,098 $ ],254 $ 4,025,420 $ (25y94y23) $ - $ (25y94,923) P�blicwocks 19,608,13] 5,681,10] 5,112,]20 11,]30,53] 22,524,364 2y16,22] - 2y16,22] Hea1N and soQal services 815,251 125,016 13,2]8 - 138,294 (6]6y5]) - (6]6y5]) Giltureavdrecreatiov 13,653,509 2,]6],636 363,450 234,653 3,365,]39 (10,28],]]0) - (10,28],]]0) Comm�nilyandeconomicdevelopmevt 18,096,1]0 ]]9,456 8,019,]48 1,366,646 10,165,850 (]y30,320) - (]y30,320) 6evecalgovemment Sy82,668 2,636,]33 431,233 21,190 3,089,1% (5,893,512) - (5,893,512) Interes[on longterm debt 3 46]685 (3 46]685) (3 46]685) Total govemmevtal ac[ivities 94 643]63 14y2Q016 15 028 52] 13 360 280 43 308 823 (51,334y40) (51,334y40) B�sivess-type activifies Interes[on longterm debt 5,355,525 - - - - - (5,355,525) (5,355,525) Sewagedisposalwocks 9,442,558 12,442,584 14,868 1,014,8]0 13,4]2,322 - 4,029,]64 4,019,]64 Watec�tilily Sy28y41 8,553,225 - ]93,491 9,346,]16 - 3,41],]]5 3,4ll,]]5 Stortnwatec�filily 4,06],3]4 4,0]6,396 14,106 6,]5],336 10,84],838 - 6,]80,464 6,]80,464 Parldvgfaalifies 3,126,823 3,286y4] 18],848 635,42] 4,110,222 - 983,399 983,399 �edoa�sx��e�r�o�eoe zz,sys a - - a - �zz,ssv� �zz,ss9� xer�seoou�eoo a,zoz,�vc a,iss,osi - - a,iss,osi - �i�,�as� �v,�as� 1Yaysitsystem 4,23],054 459,258 1,483,349 4y59,696 6y02,303 - 2,665,249 2,665,249 Salt 45039 8688] 8688] 41848 41848 Total b�sivess-type activifies 36 419 003 33 090 352 1]00 ll l 14 160 820 48y51,343 12 522 340 12 522 340 Totel primary govemment $ 131 0]2]66 $ 48 010 368 $ 16]28 698 $ 2]521 100 $ 92 260 166 $ (51,334y40) $ 12 522 340 $ (38,812,600) Component units D�b�q�e Metropolitav Area Solid W aste Agevcy $ 4,]33,425 $ 5,21],019 $ - $ 13,]03 $ 5,230,]22 $ 49],29] $ - $ - D�b�q�elnitiativesandS�bsiAaries 4,266,682 3,032,]24 - - 3,032,]24 - (1,233y58) - D�b�q�e Covvevfion and Visitocs Burea� 1281 63] 1 214 6]9 80 300 1,294y]9 13 342 TotalCompovevtUvils $ 10,281,]44 $ 9,464,422 $ - $ 94,003 $ 9,558,425 49],29] (1,233y58) 13,342 6evecal revev�es Pcopertytexes 39,6]8,4]3 - 39,6]8,4]3 - - - Local opfion sales tae 8,890,046 - 8,890,046 - - - Hotel motel tae 2,821,]45 - 2,821,]45 - - - Utilityfravcttisefees 4,558,84] - 4,558,84] - - - 6arnivg 8,098,324 - 8,098,324 - - - Unrestrictedivvestrnentearnivgs 335,5]] 231,]46 56],323 68,039 502,5]2 158 6aiv on disposal of capital assels 83,]20 54,0]4 13],]94 - - - �taosf«s �i,mi,ies� i,mi,ise - - - - Special items 10,002,5]3 Total general reven�es,haysfers avd special items 63 395 569 1 356y83 64]52 552 68 039 10 505 145 158 ChavgeivNetPositiov 12,060,629 13,8]9,323 25y39y52 565,336 9,2]1,18] 13,500 Netpositioqbeginnivgofyeac 3435513]4 1582425]9 501,]93y53 1Q559y00 25,263y60 38391 Netpositioq evdivg ofyeac $ 355 612 003 $ 1]2,121y02 $ 52],]33y05 $ 11125 236 $ 34 535 14] $ 51 891 See votes to 5vavcial statemevts w m THIS PAGE IS INTENTIONALLY LEFT BLANI� 37 CTTY OF DUBUQUE, IOWA BALANCESHEET GOVERNNIENTAL FUNDS JUNE 30,2017 SpecialRevenue TaY Increment General Financing ASSETS Cash and pooled cash investrnents $ 13,645,812 $ 4,686,666 Receivables Proper[y tas Delinquent 161,286 146,263 Succeeding year 21,151,903 - Accounts and other 1,467,148 - Special assessments 13,714 - Accrued interest 4Q060 39,476 Notes 5,036,975 289,800 Intergovemmental 1,345,045 - Due from other funds 627,079 - InvenWries 198,544 - Prepaiditems 35Q153 - Restricted cash and pooled cash investrnents 825,459 2,254,448 Total Assets $ 44,863,178 $ 7,416,653 LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accountspayable $ 1,799,873 $ 6Q733 Accruedpayroll 1,394,889 - Intergovemmental payable - - Due to other funds - - Uneamed revenue 438,074 Total Liabilities 3,632,836 6Q733 DEFERREDINFLOW OFRESOURCES Unavailable revenues Succeeding year proper[y tas 21,151,903 - Special assessments 13,714 - Grants 182,061 - Other 122,123 Total Defe�red Inflows of Resources 21,469,801 FUND BALANCES Nonspendable Endowmentcorpus - - InvenWry 198,544 - Long-tertn notes receivable 5,036,975 - Prepaiditems 35Q153 - Restricted Endowments - - Library - - Police - - Debt service - - Bondordinance - 2,14Q740 Capital improvements - 5,215,180 Franchise agreement - - Special assessmen[s - - Claims 2,208 - Iowa Finance Authority Trust - - Communityprograms - - Employee benefits - - Committed,capital improvements - - Assigned DRAgaming and distribution 1,59Q065 - Unassigned 12,582,596 Total Fund Balances 19,76Q541 7,355,920 Total Liabilities,Deferred Inflows of Resources, andFundBalances $ 44,863,178 $ 7,416,653 See notes W financial statements. 38 EXHIBIT 3 ou,� Govemmental DebtService Funds Total $ 7A8,335 $ 14,37A,047 $ 32,904,860 2,682 43,420 353,651 22Q507 4,49Q639 25,863,049 - 207,064 1,674,212 - 797,921 811,635 212 28,635 108,383 - 6,547,197 11,873,972 - 6,88Q720 8,225,765 - - 627,079 - 474,919 673,463 - 40Q525 75Q678 6,431,227 9,511,134 $ 471,736 $ 4Q626,314 $ 93,377,881 $ - $ 3,494,760 $ 5,355,366 - 117,853 1,512,742 - 5,726 5,726 - 585,180 585,180 6,085 444,159 4 209 604 7 903 173 22Q507 4,49Q639 25,863,049 - 764,034 777,748 - 3,033,139 3,215,200 505 95,135 217,763 221,012 8,382,947 30,073,760 - 69,412 69,412 - 474,919 673,463 - - 5,036,975 - 40Q525 75Q678 - 1OQ431 1OQ431 - 1,201,345 1,201,345 - 2Q970 2Q970 25Q77A - 25Q77A - - 2,14Q740 - 9,255,866 14,471,046 - 569,299 569,299 - 33,887 33,887 - - 2,208 - 295,667 295,667 - 8,984,184 8,984,184 - 35,104 35,104 - 6,592,154 6,592,154 - - 1,590,065 12,582,596 25Q77A 28,033,763 55,40Q948 $ 471,736 $ 4Q626,314 $ 93,377,881 39 THIS PAGE IS INTENTIONALLY LEFT BLANI� ao CITY OF DUBUQUE, IOWA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET EXHIBIT 3-1 TO THE STATEMENT OF NET POSITION JUNE 30,2017 Total fund balances-governmental funds $ 55,40Q948 Amounts reported for the govemmental activities in the statement of net position are different because: Capital assets used in govemmental activities are not financial resources and therefore are not reported in the funds. Cost of capital assets $ 568,513,626 Accumulated depreciation (152,119,215) 416,394,411 Some of the City's revenues will be collected after year-end but are not available soon enough to pay for the current period's expenditures and therefore are deferred in the funds. Those revenues consist of: Property tax 40,397 Special assessments 777,748 Other 3,392,565 4,210,710 Pension related deferred outflows of resources and deferred inflows of resources are not due and payable in the current year and,therefore, are not reported in the govemment funds as follows: Deferred inflows or resources (1,504,129) Deferred outflows of resources 14,904,161 13,40Q032 Intemal service funds are used by the City's management to charge the costs of equipment maintenance and self-insurance programs to individual funds. The assets and liabilities of the intemal service funds are included in govemmental activities in the statement of net position. 665,029 Some liabilities are not due and payable in the current period and therefore are not reported in the funds. Those liabilities consist of. General obligation bonds (53,80Q719) Tax increment financing bonds (2Q333,690) Notes payable (451,763) Loans payable (4,65Q000) Deferred amount on debt refundings (285,493) Accrued interest (28Q653) Compensated absences (5,49Q843) Net pension liability (44,975,269) Net OPEB liability (4,19Q697) (134,459,127) Net position of govemmental activities $ 355,612,003 See notes to financial statements. 41 CITY OF DUBUQUE,IOWA STATEMENT OF REVEN[JES,EXPENDITURES,AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS FOR THE YEAR ENDED NNE 30,2017 SpecialRevenue TaY Increment General Financing REVEN[JES Tases $ 33,38Q659 $ 12,136,422 Special assessmen[s - - Licensesandpermits 1,505,564 - Intergovemmental 1,609,7A7 - Charges for services 10,549,404 - Finesandforfeits 484,687 - Investmenteamings 338,487 (195,753) Contributions 422,751 123,625 Gaming 8,098,324 - Miscellaneous 731,788 Total Revenues 57,12Q911 12,064,294 EXPENDITURES Cmrent Public safety 29,09Q658 - Publicworks 6,351,236 - Health and social services 857,739 - Cultureandrecreation 12,022,076 - Community and economic development 3,787,854 3,624,251 Generalgovemment 6,779,764 - Debt service Principal - - Interestandfiscalcharges - 3,007 Capital projects 13,233 Total Expenditures 58,889,327 3,64Q491 EXCESS(DEFICIENCI�OF REVENUES OVER(UNDER)EXPENDITURES (1,768,416) 8,423,803 OTHER FINANCING SOURCES(USES) Issuance of debt - - Issuance ofrefunding bonds - - Premium on bonds - - Premium on refunding bonds - - ltansfers in 6,529,026 546,7A5 �rar�sferso�c (s,iis,sss) (s,9ss,ao9) Insurancerecovery 15,033 - Sale of capital assets 125,457 Total Other Financing Sources(Uses) 3,553,661 (8,392,164) NET CHANGE IN FUND BALANCES 1,785,7A5 31,639 FUND BALANCES,BEGINNING 17,975,296 7,324,281 FUND BALANCES,ENDING $ 19,76Q541 $ 7,355,920 See notes W financial statements. 42 EXHIBIT 4 ou,� Govemmental DebtService Funds Total $ 324,881 $ 1Q107,149 $ 55,949,111 - 261,233 261,233 - - 1,505,564 43,802 24,661,7A8 26,314,297 - 266,621 1Q816,025 - - 484,687 19,298 173,545 335,577 - 142,861 689,237 - - 8,098,37A 1 079 893 1 811 681 387 981 36 692 550 106 265 736 - 64,470 29,155,128 - 5,377,480 11,728,716 - 1Q541 868,280 - 375,218 12,397,294 117,379 8,945,069 16,474,553 - 507,822 7,287,586 17,615,698 - 17,615,698 3,576,800 - 3,579,807 16,247,618 16,26Q851 21,309,877 31,528,218 115,367,913 (20,921,89� 5,164,332 (Q102,177) - 23Q000 23Q000 11,023,700 - 11,023,700 - 5,298 5,298 314,086 - 314,086 9,609,837 2,129,478 18,814,586 - (�,sbz,9ss) (i9,9i�,zi9) - 26,312 41,345 253,404 378,861 20 947 623 (5 218 463) 10 890 657 zs,�z� (sa,isi) i,�ss,aso 224,997 28,087,894 53,612,468 $ 25Q77A $ 28,033,763 $ 55,40Q948 43 THIS PAGE IS INTENTIONALLY LEFT BLANI� aa CITY OF DUBUQUE, IOWA RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXHIBIT 4-1 EXPENDITURES,AND CHANGES IN FUND BALANCES TO THE STATEMEMT OF ACTIVITIES FOR THE YEAR ENDED JUNE 3Q 2017 Net change in fund balances-total govemmental funds $ 1,788,480 Amounts reported for governmental activities in the statement of activities ue different because: Capital ouTlays ue reported as expenditures in governmental funds. However,in the statement of activities,the cost of capital assets is allocated over their estimated useful lives and reported as depreciation expense. In the current period,these amounts ue: Capital assets exPended in govemmental fimds $ 14,171,483 Transfers of capital assets to enterprise funds (1,712,339) Contdbutions from developers and federal government 2,599,996 Depreciation er.pense (1 Q099,992) 4,959,148 In the statement of activities,only the gain or loss on the sale of capital assets is reported, whereas in the govemmental funds,the entire proceeds from the sale increase financial resources.Thus,the cktange in net position differs from the cktange in fund balances by the book value of the asset being disposed (295,140) Because some revenues will not be collected for several months after the City's fiscal yeu ends,they ue not considered"available"revenues and ue deferred in the governmental funds. Deferred inflows of resources increased(decreased) by these amounts trus yeu: Property tax 3,886 Special assessments 132,021 Other (1,521,318) (1,385,411) Debt proceeds provide current firtancial resources to governmental funds,but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the govemmental funds, but it reduces long-term liabilities in the statement of net position and does not affect the statement of activities.Alsq govemmental fimds report the effect of issuance discounts and premiums when debt is first issued,whereas these amounts ue deferred and amortized in the statement of activities. Debt issuances including premium (11,573,083) Debt repayments 17,615,698 6,042,615 Some items reported in the statement of activities do not require the use of current financial resources and therefore ue not reported as expenditures in governmental funds.These items consist of. Decrease in accrued interest 69,200 Amortization of bond discounUpremium 328,415 Decrease in compensated absences 415,261 Deferred amount on debt refimdings (285,493) Accounts payable WCS lawsuit 1,595,715 Pension adjustment (992,960) Increase in net OPEB liability (380,839) Total additional expenses 749,299 Intemal service funds ue used by management to chuge the costs of certain activities to individual funds.The change in net position of the interrtal service funds is reported with govemmental activities. 201,638 Cktange in net position of govemmental activities $ 12,060,629 See notes to firtancial statements. 45 CITY OF DUBUQUE,IOWA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30,2017 Business-type Activities-Enteiprise hlinds Sewage Disposal Water Stormwater Works Utility Utility ASSETS CURRENT ASSETS Cash and pooled cash investments $ 4,741,992 $ 5,382,777 $ 2,917,455 Receivables Accounts 1,319,930 942,956 428,610 Accrued interest 5,327 6,974 13,924 Intergovemmental - - 1,813,375 Prepaid items 15,821 420 24,723 Inventories 141,618 764,687 - TotalCuirentAssets 6,224,688 7,097,814 5,198,087 NONCURRENT ASSETS Restdcted cash and pooled cash investments 1,483,826 2,767,778 13,356,624 Capital assets Land 193,238 209,244 2Q987,529 Buildings 72,269,461 10,165,805 - ImprovemenTs to other than buildings 47,821,452 1,807,167 107,050,905 Machinery and equipment 39,532,532 58,398,709 1,116,413 Constructionin progress 657,133 1,262,945 246,580 Accumulated depreciation (56,597,042) (25,880,662) (13,749,616) Net Capital Assets 103,876,774 45,963,208 115,651,811 TotalNoncurrentAssets 105,360,600 48,730,986 129,008,435 Total Assets 111,585,288 55,828,800 134,206,522 DEFERRED OUTFLOWS OF RESOURCES Pension related defeired outflows 304,720 386,891 98,478 46 EXHIBIT 5 Business-type Activities-Enteiprise Fhnds Govemmental Activities- Parking Other Enteiprise Intemal Service Facilities Fhnds Total Fhnds $ 684,357 $ 1,752,391 $ 15,478,972 $ 3,583,402 217,077 395,562 3,304,135 60,599 868 793 27,886 2,834 - 2,353,793 4,167,168 - - 9,902 SQ866 97,508 - - 906,305 77,204 902,302 4,512,441 23,935,332 3,821,547 330,206 - 17,938,434 - 2,759,892 36,000 24,185,903 - 62,337,568 7,336,944 152,109,778 - 3,379,337 1,482,404 161,541,265 - 2,794,827 8,521,955 110,364,436 324,248 - 4,340,757 6,507,415 - �i6,io6,io9� �6,�9s,9�s� �ii9,iz�,aoa� �is9,i9i� 55,165,515 14,924,085 335,581,393 165,057 55,495,721 14,924,085 353,519,827 165,057 56,398,023 19,436,526 377,455,159 3,986,604 110,796 660,020 1,56Q905 496,469 47 CITY OF DUBUQUE,IOWA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30,2017 Business-type Activities-Enteiprise hlinds Sewage Disposal Water Stormwater Works Utility Utility LIABILITIES CURRENT LIABILITIES Accountspayable $ 1,538,629 $ 294,871 $ 1,133,117 Accrued payroll 55,261 70,937 19,017 Loans payable-current - 1,OOQ000 - General obligation bonds payable 571,978 221,031 909,155 Revenuebondspayable - 305,000 - Capital loan notes payable 2,707,000 183,000 835,800 Accrued compensated absences 19,265 18,546 - Accruedinterestpayable 149,653 221,422 158,146 Due to other funds - - - Total Cuirent Liabilities 5,041,786 2,314,807 3,055,235 NONCURRENT LIABILITIES Loans payable - 4,OOQ000 - Generalobligation bondspayable 11,025,124 12,986,735 10,734,898 Revenuebondspayable - 4,827,461 28,708,105 Capital loan notes payable 67,771,676 2,811,000 36,205,468 Accrued compensated absences 148,963 277,505 10,523 Netpensionliability 1,12Q579 1,422,754 362,140 Net OPEB Liability 231,304 256,994 55,198 Total Noncurrent Liabilities 80,297,646 26,582,449 76,076,332 TotalLiabilities 85,339,432 28,897,256 79,131,567 DEFERRED INFLOWS OF RESOURCES Pension related defeired inflows 44,508 56,510 14,384 NET POSITION Net investment in capital assets 31,976,890 21,914,804 48,715,099 Restdcted by bond ordinance/development agreement - 566,638 2,899,908 Unrestdcted (5,470,822) 4,780,483 3,544,042 Total Net Position $ 26,506,068 $ 27,261,925 $ 55,159,049 See notes to financial statements. 48 EXHIBIT 5 (continued) Business-type Activities-Enteiprise Fhnds Govemmental Activities- Parking Other Enteiprise Intemal Service Facilities Fhnds Total Fhnds $ 5,267 $ 1,370,969 $ 4,342,853 $ 1,850,657 18,703 126,209 290,127 30,137 28,074 - 1,028,074 - 702,072 4,749 2,408,985 - - - 305,000 - - - 3,725,800 - 12,811 5,227 55,849 - 21,436 2,752 553,409 - - 2,887 2,887 39,012 788,363 1,512,793 12,712,984 1,919,806 181,828 - 4,181,828 - 7,254,680 76,601 42,078,038 - - - 33,535,566 - - - 106,788,144 - 20,798 252,658 710,447 - 407,436 2,427,150 5,740,059 1,825,722 84,510 291,099 919,105 - 7,949,252 3,047,508 193,953,187 1,825,722 8,737,615 4,560,301 206,666,171 3,745,528 16,184 96,405 227,991 72,516 46,998,862 14,842,735 164,448,390 165,057 330,206 - 3,796,752 - 425,952 597,105 3,876,760 499,972 $ 47,755,020 $ 15,439,840 $ 172,121,902 $ 665,029 49 CITY OF DUBUQUE,IOWA STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 3Q 2017 Business-type Activities-Enteiprise Funds Sewage Disposal Water Stormwater Works Utility Utility OPERATING REVENUES Charges for sales and services $ 12,374,927 $ 8,531,634 $ 4,049,393 Other 67,657 21,591 27,003 Total Operating Revenues 12,442,584 8,553,225 4,076,396 OPERATING EXPENSES Employee expense 3,309,493 2,448,296 1,824,935 Utilities 462,841 585,726 18,213 Repaiis and maintenance 631,814 19Q646 57,888 Supplies and services 1,572,934 1,359,229 674,944 Insurance 105,012 94,602 24,780 Depreciation 3,36Q464 1,25Q442 1,466,614 Total Operating Expenses 9,442,558 5,928,941 4,067,374 OPERATING INCOME(LOSS) 3,000,026 2,624,284 9,022 NONOPERATING REVENUES(EXPENSES) Intergovemmental - - 14,106 Investment eamings 32,353 35,767 147,876 Contdbutions 14,868 - - inc��egce�enge �i,ssa,ios� �s�s,z�6� �z,i66,6ai� Gain on disposal of assets 2,251 1,359 4Q000 NetNonoperatingRevenues(Expenses) (1,834,631) (841,150) (1,964,659) INCOME(LOSS)BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS 1,165,395 1,783,134 (1,955,637) CAPITAL CONTRIBUTIONS 1,014,870 793,491 6,757,336 TRANSFERS IN - 15,548 3,437,770 TRANSFERS OUT (3,027,113) (142,884) - CHANGE IN NET POSITION (846,848) 2,449,289 8,239,469 NET POSITION,BEGINNING 27,352,916 24,812,636 46,919,580 NET POSITION,ENDING $ 26,506,068 $ 27,261,925 $ 55,159,049 See notes to financial statements. 50 EXHIBIT 6 Business-type Activities-Enteiprise Funds Govemmental Other Activities- Parking Enterprise Intemal Facilities Funds Total Service Funds $ 2,965,100 $ 4,65Q131 $ 32,571,185 $ 16,766,988 321,847 81,069 519,167 118,248 3,286,947 4,731,200 33,090,352 16,885,236 844,251 5,301,206 13,728,181 2,787,383 257,022 106,904 1,430,706 32,005 353,546 833,192 2,067,086 48,959 335,946 1,124,220 5,067,273 13,666,008 79,749 68,178 372,321 146,956 1,256,309 1,074,082 8,407,911 36,655 3,126,823 8,507,782 31,073,478 16,717,966 160,124 (3,776,582) 2,016,874 167,270 112,734 1,393,388 1,520,228 - 11,769 3,981 231,746 - 75,114 89,961 179,943 - (421,033) (5,472) (5,355,525) - - 1Q464 54,074 2,898 (221,416) 1,492,322 (3,369,534) 2,898 �6i,z9z� �z,zsa,z6o� �i,ssz,66o� i�o,i6s 635,427 4,959,696 14,16Q820 - - 1,334,087 4,787,405 31,470 �sa6,zas) - (s,�i6,zaz) - 27,890 4,009,523 13,879,323 201,638 47,727,130 11,430,317 158,242,579 463,391 $ 47,755,020 $ 15,439,840 $ 172,121,902 $ 665,029 51 CITY OF DUBUQUE, IOWA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2017 Business-type Activities-Enteiprise Funds Sewage Disposal Water SWrmwater Parking Works Utiliry Utility Facilities CASH FLOWS FROM OPERATING ACTIVITIES Cash received from cusWmers $ 12,249,411 $ 8,426,020 $ 3,99Q210 $ 2,935,022 Cash payments W suppliers for goods and services (3,435,64� (2,505,698) (4,206,853) (1,022,55� Cash payments W employees for services (3,441,837) (2,447,445) (1,721,025) (90Q360) Otheroperatingreceipts 67,657 21,591 27,003 321,847 NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES 5,439,585 3,494,468 (1,91Q665) 1,333,953 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES ltansfers from other funds - 15,548 3,437,770 - �rar�sferscoou,err��ds (s,oz�,iis) (iaz,ssa) - (sab,zas) Proceeds from interfund balances - - - - Payment of interfund balances - - (549,974) - Intergovemmental grant proceeds NET CASH PROVIDED BY(USED FOR) NONCAPITALFINANCINGACTNITIES (3,027,113) (127,33� 2,887,796 (546,7A5) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets 2,251 1,359 4Q000 - Acquisition and consWction of capital assets (2,027,27A) (2,794,620) (16,793,941) (1,006,58� Proceeds from issuance of debt 2,802,754 - 9,401,003 6,388,879 Premium on debtissuance 21,006 - 64,814 201,683 Paymentofdebt (3,742,470) (876,595) (3,307,354) (7,26Q459) Interestpaid (1,881,718) (729,399) (2,225,98� (393,234) Contributions 1,029,738 793,491 6,757,336 71Q541 Intergovemmental grant proceeds 72Q828 112,734 NET CASH PROVIDED BY(USED FOR)CAPITAL AND RELA1'ED FINANCING ACTNITIES (3,795,663) (3,605,764) (5,343,300) (1,246,442) CASH FLOWS FROM INVESTING ACTIVITIES Interestreceived 34,974 38,394 133,952 13,296 NET INCREASE(DECREASE)IN CASH AND POOLED INVFSTMENTS (1,348,217) (20Q238) (4,232,217) (445,438) CASH AND CASH EQUNALENTS,BEGINNING 7,574,035 8,35Q793 2Q506,296 1,46Q001 CASH AND CASH EQUNALENTS,ENDING $ 6,225,818 $ 8,15Q555 $ 16,274,079 $ 1,014,563 52 EXHIBIT 7 Business-rype Activities-Enteiprise Funds Governmental Other Activities- Enterprise Intemal Funds Total Service Funds $ 4,605,766 $ 32,206,429 $ 16,792,338 (i,s��,a�b) (iz,�as,zz9) (is,9ii,ssi) (s,zss,iba) (is,�as,ssi) (s,oii,ss9) 81,069 519,167 118,7A8 (z,izs,sos) b,zzs,ssb (iz,zsa) 1,334,087 4,787,405 31,470 - (3,716,7A2) - 2,887 2,887 (375,172) - (549,974) - 1,017,993 1,017,993 2,354,967 1,542,069 (343,702) - 43,610 2,898 (a,sso,z9s) (zb,9sz,bba) - 52,813 18,645,449 - - 287,504 - (sb,sz�) (is,zas,�ob) - (3,02� (5,233,363) - 5,049,657 14,34Q763 - 833,562 �iz,sza (is,z�s,sas) z,s9s a,azs zzs,oaa a,az� 9az,9ia (s,zss,i9� (sas,bbi) 809,477 38,70Q602 3,932,063 $ 1,752,391 $ 33,417,406 $ 3,583,402 (Continued) 53 CITY OF DUBUQUE, IOWA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2017 Business-rype Activities-Enterprise Funds Sewage Disposal Water Stortnwater Parking Works Utility Utiliry Facilities RECONCII,IATION OF OPERATING INCOME(LOSS) TO NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES Operating income(loss) $ 3,OOQ026 $ 2,624,284 $ 9,022 $ 16Q124 Adjustments W reconcile operating income Qoss)W net cash provided by(used for)operating activities Depreciation 3,36Q464 1,25Q442 1,466,614 1,256,309 Change in assets and liabilities (Increase)decrease in receivables (125,516) (105,614) (59,183) (3Q078) (Increase)decrease in invenWries and prepaid items (154,998) (8,06� (7A,723) 6,720 Increase(decrease)in accounts payable (508,047) (267,429) (3,406,305) (3,013) Increase(decrease)in acemed liabilities (SQ903) (7A,275) 1Q859 (18,058) Increase(decrease)netpension liability 1OQ434 267,583 156,176 29,313 Qncrease)in defe�red outflows (128,37A) (187,147) (62,863) (45,413) Increase(decrease)in deferred inflows (74,603) (78,36� (9,665) (27,96� Increase in net OPEB liability 21,052 23,056 9,403 6,015 TotalAdjustrnents 2,43Q559 870,184 (1,91Q687) 1,173,829 NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES $ 5,439,585 $ 3,494,468 $ (1,91Q665) $ 1,333,953 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Contribution of capital assets from outside sources $ 1,014,870 $ 793,491 $ 6,757,336 $ 635,427 Capital Assets financed through loan agreement $ $ S,OOQ000 $ $ Contributions of capital assets from Govemmental Activities $ $ $ $ See notes W financial statements. 54 EXHIBIT 7 (continued) Business-type Activities-Enteiprise Funds Govemmental Other Activities- Enteiprise Intemal Funds Total ServiceFunds � (s,��b,ssz) � z,oib,s�a � ib�,z�o 1,074,082 8,407,911 36,655 (aa,sbs) (sba,�s� (�z,iss) (a�i) (isi,sss) s�,sab sss,as9 (s,bz9,sos) (�,�ai) (s,osa) (s�,aii) (zi,ssz) 49Q884 1,044,390 125,899 (szs,zia) (�as,96i) (zoz,sa9) (iz9,b�z) (szqz�z) (izs,9sa) 32,078 91,604 i,ba�,�� a,zii,bbz (i�9,ssa) � (z,izs,sos) � b,zzs,ssb � (iz,zsa) � a,9s9,696 � ia,ibo,szo � $ - $ s,000,000 $ $ - $ - $ ss CITY OF DUBUQUE, IOWA STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES EXHIBIT 8 AGENCY FUNDS JUNE 30, 2017 Agency Funds ASSETS Cash and pooled cash investments $ 1,440,140 Accountsreceivable 50,378 Prepaids 16,997 Accrued interest 708 Total Assets $ 1,508,223 LIABILITIES Accounts payable 24,722 Due to other agency 1,483,501 Total Liabilities $ 1,508,223 See notes to financial statements. ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 The notes to financial statements contain a summary of significant accounting policies and other notes considered necessary for an understanding of the financial statements of the City and are an integral part of this repart The index to the notes is as follows: 1. Summary of Significant Accounting Policies 2. Deficit Fund Equity 3. Cash on Hand,Deposits, and Investxnents 4. Notes Receivable 5. Interfund Balances and Transfers 6. Capital Assets 7. Long-Terxn Debt 8. Risk Management 9. Commitments and Contingent Liabilities 10. Other Postemployment Benefits (OPEB) 11. Employee Pension Plans 12. Landfill Closure and Postclosure Care 13. Leases Where City is Lessor 14. SubsequentEvents 15. Prospective Accounting Pronouncements 16. Tax Abatements s� CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 1—SUMNI.ARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity The City of Dubuque, Iowa, is a municipal corporation governed by an elected mayor and a six-member council. As required by accounting principles generally accepted in the United States of America, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. The City has no blended component units. The discretely presented component units are reparted in separate columns in the government-wide financial statements to emphasize that they are legally separate from the City. Discretely Presented Component Units The Dubuque Metropolitan Area Solid Waste Agency was created under the provisions of Chapter 28E of the Code of Iowa by the City of Dubuque and Dubuque County. The purpose of the Agency is to provide solid waste management far the Dubuque metropolitan area. The City appoints a voting majority of the Agency's governing board and has authority over those persons responsible far the day-to-day operations of the Agency. The Agency is presented as a proprietary fund type and has a June 30 year end. During the year ended June 30, 2017, $509,049 of the Dubuque Metropolitan Area Solid Waste Agency's charges for services were related to services provided to the City of Dubuque. Dubuque Initiatives and Subsidiaries is a non-profit corporation organized under the laws of Iowa and Section 501(c)(3) of the Internal Revenue Code. The Organization was created to render service to the City Council of the City of Dubuque,Iowa, on matters of community interest. The Organization's articles require that its board members include two city council members, the mayor, and the city manager of the City of Dubuque, Iowa; and in the event of dissolution, any assets or property of the Organization be transferred to the City of Dubuque, Iowa. During the fiscal year 2009, the City of Dubuque, Iowa guaranteed debt issued by Dubuque Initiatives and Subsidiaries far the rehabilitation of the Roshek Building. The Organization is presented as a proprietary fund type and has a December 31 year end. Dubuque Convention and Visitors Bureau is a non-profit corporation organized under the laws of Iowa and Section 501(c)(3) of the Internal Revenue Code. The Organization's purpose is to strengthen the Dubuque area economy by competitively marketing the area as a destination for conventions, tour groups, sporting events and individual travelers. The Organization's articles require that its board members include one City Council member, the City of Dubuque Mayor and the City Manager. In the event of dissolution, any assets or properly of the Organization shall be distributed to the City of Dubuque, Iowa after paying or making provision far the payment of all liabilities of the Corporation. The City collects hotel/motel taxes and forwards 50%to the CVB as the primary source of funds for its operations. The CVB is presented as a governxnental fund type and has a June 30 year end. Dubuque Initiatives and Subsidiaries and the Dubuque Convention and Visitors Bureau present their financial information in accordance with the Financial Accounting Standards Board(FASB). Complete financial statements far the Component Units may be obtained from the City of Dubuque's Finance Department far the Dubuque Metropolitan Area Solid Waste Agency and Dubuque Area Convention and Visitors Bureau, and the Economic Development Office for Dubuque Initiatives and Subsidiaries. These offices are located at: City Hall, 50 West 13th Street, Dubuque,Iowa 52001. sa CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 1—SUMIVI.ARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Jointly Governed Organizations The City participates in several jointly governed organizations that provide goods or services to the citizenry of the City but do not meet the criteria of a joint venture since there is no ongoing financial interest or responsibility by the participating governments. City officials are members of the following boards and commissions: City of Dubuque Conference Board Dubuque County�911 Committee Dubuque Drug Task Force 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 nonfiduciary activities of the primary governxnent and its component units. Far the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which norxnally are supparted by taxes and intergovernxnental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for services. Likewise, the primary government is reported separately from the legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segxnent are offset by program revenues. Direct expenses are those clearly identifiable with a specific function or segxnent. 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 segxnent and 2) grants, contributions, and interest restricted to meeting the operational or capital requirements of a particular function or segxnent. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governxnental funds, proprietary funds, and a fiduciary fund, even though the latter is excluded from the governxnent-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Measurement Fows, Basis of Accounting, and Financial Statement Presentation The governxnent-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reparted using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Far this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period(year-end). ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 1—SUMIVI.ARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgxnents, are recorded only when payment is due. Property taxes, franchise taxes, licenses, interest, special assessments, and grants are susceptible to accrual. Sales taxes are considered measurable and available at the time the underlying transaction occurs, provided they are collected by the City within 60 days after year-end. All other revenue items are considered to be measurable and available only when cash is received by the City. 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 governxnent, except those required to be accounted for in another fund. The Tax Increment Financing Fund is used to account far the receipt of property taxes, for the payment of projects within the tax increment financing district, and far the payment of remaining principal and interest costs on the tax increment financing districts' long-terxn debt service. The Debt Service Fund is used to account for the accumulation of resources and payment of general obligation bond principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the governxnent is obligated in some manner for the payment. The City reports the following major proprietary funds: The Sewage Disposal Works Fund is used to account far the operations of the City's sewage disposal works and services. The Water Utility Fund is used to account far the operations of the City's water facilities and services. The Stormwater Utility Fund is used to account far the operations of the City's storxnwater services. The Parking Facilities Fund is used to account far the operations of the City-owned parking ramps and other parking facilities. Additionally, the City reports the internal service fund type. Internal service funds are used to account for general, garage, stores/printing, health insurance, and warker's compensation insurance services provided by one department to other departments of the City on a cost-reimbursement basis. These funds cannot be used to support City activities. Fiduciary fixnds, other than agency funds, use the economic resources measurement focus and the full accrual basis of accounting. Agency funds use the full accrual basis of accounting but do not have a measurement focus and therefore report only assets and liabilities. The City reparts Agency Funds to account for assets held by the City as an agent under the cable franchise agreement and far the Dubuque Racing Association. so CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 1—SUMIVI.ARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) As a general rule the effect of interfund activity has been eliminated from the governxnent-wide financial statements. Exceptions to this general rule are charges between the City's water and sewer function and various other functions of the City. Eliminations of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise funds and of the City's internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first,then unrestricted resources as they are needed. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net Position/Fund Balance Deposits and Investments The City's cash, pooled cash investments, and cash equivalents are considered to be cash on hand, demand deposits, and short-terxn investments with original mabxrities of three months or less from the date of acquisition. The cash balances of most City funds are pooled and invested. Interest earned on investxnents is recorded in the General Fund unless otherwise provided by law. Investments are stated at fair value except far the investxnent in the Iowa Public Agency Investxnent Trust and non-negotiable certificates of deposit which are valued at amortized cost For purposes of the Statement of Cash Flows, all short-terxn cash investxnents that are highly liquid are considered to be cash equivalents. Cash equivalents are readily convertible to known amounts of cash and, at the day of purchase, have a maturity date no longer than three months. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at year-end are referred to as either "due to/from other funds" (i.e., the current portion of interfixnd loans) or "advances to/from other funds" (i.e., the non-current partion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governxnental activities and business-type activities are reported in the government-wide financial statements as "internal balances." 61 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 1—SUMIVI.ARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Advances between funds, as reported in the fund financial statements, are offset by a nonspendable fund balance accountin applicable governxnentalfunds to indicate thatthey are not available for appropriation and are not expendable available financial resources. Property tax receivable is recognized in the 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 taxes collected by the County but not remitted to the City at June 30, 2017, and 2017 unpaid taxes. The succeeding year property tax receivable represents taxes certified by the City to be collected in the next fiscal year far 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 far the following fiscal year becomes effective on the first day of that year. Although the succeeding year property tax receivable has been recorded, the related revenue is deferred in both the government-wide and fund financial statements and will not be recognized as revenue until the year for which it is levied. Property taxes are levied as of July 1 on property values assessed as of January 1 of the previous year. The tax levy is divided into two billings. The billings are due September 1 and March 1. On September 30 and March 31,the bill becomes delinquent, and penalties and interest may be assessed by the City. Inventories and Prepaid Items Inventories included in the governmental funds are valued at cost using the first-in first-out (FIFO) method. The costs of governxnentalfund inventories are recorded as expenditures when consumed rather than when purchased. Inventories of materials and supplies in the enterprise funds are determined by actual count and priced on the FIFO method. Inventories included in internal service funds are stated at the lower of cost(FIFO method) or market and consist of consumable supplies. The cost of these supplies is recorded as an expense at the time they are removed from inventory for use. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. The costs of governmental fund prepaids are recorded as expenditures when consumed rather than when purchased. Restricted Assets Certain proceeds of the City's enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net position because their use is limited by applicable bond covenants. The "revenue bond operating" account is used to report resources set aside to subsidize potential deficiencies from the enterprise fund's operation that could adversely affect debt service payments. The "revenue bond sinking" account is used to segregate resources accumulated for debt service payments over the next twelve months. The "revenue bond reserve" account is used to report resources set aside to make up potential future deficiencies in the revenue bond sinking account. sz CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 1—SUMIVI.ARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Certain assets of the special revenue funds and capital project funds are classified as restricted assets because their use is limited by debt agreement, the City's cable television franchise agreement, ar Iowa Finance Authority housing program agreement. Certain assets of the Dubuque Metropolitan Area Solid Waste Agency are classified as restricted assets because their use is restricted by state stabxte for certain specified uses. Capital Assets Capital assets, which include property, plant, equipment, intangibles, and infrastrucbxre assets (e.g., roads,bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide statement of net position and in the proprietary funds statement of net position. Capital assets are defined by the government as assets with an initial, individual cost of more than $100,000 for infrastructure and intangible assets, $20,000 for building assets, and $10,000 far the remaining assets, and an estimated useful life of more than one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. The costs of normal maintenance and repair not adding to the value of the asset or materially extending asset lives are not capitalized. All of the City's infrastructure has been recorded, including infrastructure acquired priar to June 30, 1980. Major outlays for capital assets and improvements are capitalized as projects are constructed. There was no interest incurred during the construction phase of capital assets of business-type activities to capitalize with the value of the assets constructed in the current year. Property, plant, and equipment of the primary government, as well as the component units, are depreciated using the straight-line method over the following estimated useful lives: Assets Years Buildings 40 to 125 Improvements other than buildings 15 to 50 Machinery and equipment 2 to 30 Infrastructure and intangibles 15 to 75 Deferred Outflaws ofResources 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 reparting period. Compensated Absences The City allows employees to accumulate a limited amount of earned but unused vacation and sick pay benefits. Vacation pay is payable to employees upon retirement or termination. Sick pay is payable only upon retirement, in which event, employees with twenty years or more of service are paid 100% of their accrued sick leave balance over a five year period. All vacation pay and applicable sick pay benefits are accrued when incurred in the government-wide and proprietary fund financial statements. A liability for 63 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 1—SUMIVI.ARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Long-Term Obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-terxn obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, and deferred amounts on refunding are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governxnental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reparted as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Pensions For purposes of ineasuring the net pension liability, deferred outflows of resources, and deferred inflows of resources related to pensions, and pension expense, inforxnation about 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 reparted by the Systems'. Far this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terxns. Investxnents are reported at fair value. Deferredlnflaws ofResources Deferred inflows of resources represents an acquisition of net position that applies to a fubxre period(s) and will not be recognized as an inflow of resources (revenue) until that time. Although certain revenues are measurable, they are not available. Available means collected within the current year or expected to be collected soon enough thereafter to be used to pay liabilities of the current year. Deferred inflows of resources in the governmental fund financial statements represent the amount of assets that have been recognized, butthe 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 and other receivables not collected within sixty days after year end. Deferred inflows of resources in the Statement of Net Position consist of succeeding year property tax and tax increment financing receivable that will not be recognized as revenue until the year for which they are levied, and unrecognized items not yet charged to pension expense. NetPosition/Fund Balance The Dubuque Metropolitan Area Solid Waste Agency's restricted net position represents outside third-party restrictions and amounts restricted for minority interest of the Agency. The Agency is restricted to using certain amounts for purposes specified by state stabxte. The net position restricted for minority interest is calculated at 22.7% of unrestricted net position, based on the 1976 revenue bond resolution authorizing the issuance of revenue bonds for the construction of the landfill. 64 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 1—SUMIVI.ARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) In the government-wide and proprietary fund financial statements, net position is displayed in three components as follows: • Net investment in capital assets: This consists of capital assets, net of accumulated depreciation, less the outstanding balances of any bonds, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Net inveshnent in capital assets excludes unspent debt proceeds. Unspent debt proceeds were $6,059,096 for the governmental activities and $14,141,681 for business-type activities. • Restricted: This consists of net position that is legally restricted by outside parties or by law through constibxtional provisions or enabling legislation. Net position restricted through enabling legislation as of June 30, 2017 consists of $250,724 for debt service and $35,104 for employee benefits. All other restrictions are by outside parties through grants, debt agreements or donors. • Unrestricted: This consists of net position that does not meet the definition of restricted or net inveshnent in capital assets. In the governmental fund financial statements,fund balances are classified as follows: • Nonspendable: Nonspendable fund balances cannot be spent because they are not expected to be converted to cash ar they are legally or contracbxally required to remain intact. • Restricted: Restricted fund balances are restricted to specific purposes when constraints placed on the use of the resources are either externally imposed by creditors, grantor or state or federal laws or imposed by law through constitutional provisions or enabling legislation. • Committed: Committed fund balances can be used only for specific purposes deterxnined pursuant to constraints formally imposed by the City Council through resolution approved prior to year-end. • Assigned: Assigned fund balances contain self-imposed constraints of the government to be used for a particular purpose. Intent can be expressed by the City Council or by an official or body to which the City Council delegates the authority. The City Council has by resolution delegated the authority to the City Manager,Budget Director, and Finance Director. • Unassigned: Unassigned fund balances are amounts not included in the other spendable classifications. Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governxnental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the governxnent's policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used far the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 1—SUMIVI.ARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The budget guideline of the City of Dubuque maintains a General Fund working balance or operating reserve of 10%of the total General Fund operating budget requirements. An operating reserve or working balance must be carried into a fiscal year to pay operating costs until tax money, or other anticipated revenue is received. The State of Iowa recommends a reasonable amount for a working balance as (a) anticipated revenues for the first three months of the fiscal year, less anticipated expenditures or (b) 5%of the total General Fund operating budget, excluding fringes and tort liability expenses. The City's rating agency, Moody's Investor Service, recommends a reserve balance of at least 10% for "A"rated cities. This is based on the fact that a large partion of the revenue sources are beyond the City's control and therefore uncertain. Budgets and BudgetaryAccounting The budgetary comparison and related disclosures are reported as Required Supplementary Information. Other SignificantAccounting Policies Other significant accounting policies are set farth in the financial statements and the notes thereto. ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 2—DEFICIT FUND EQUITY The following funds have deficit net position amounts as of June 30, 2017: America's River Project $ 3,432 Internal Service Funds: General Service $ 989,582 The General Service deficit will be addressed during next fiscal year's reallocation of expenses. America's River Project will be addressed next fiscal year with a transfer from the General Fund. NOTE 3—CASH ON HAND,DEPOSITS,AND INVESTMENTS Cash on Hand. Cash on hand represents authorized change funds and petty cash funds used for current operating purposes. The carrying amount at year-end was $17,485 far the City and $1,200 far the Dubuque Metropolitan Area Solid Waste Agency. Deposits. At year-end,the City's carrying amount of deposits was $51,321,485, and the bank balance was $53,526,773. The City's deposits in banks at June 30, 2017, were entirely covered by federal depository insurance 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 carrying amount of deposits far the Dubuque Metropolitan Area Solid Waste Agency was $12,933,283, and the bank balance was $13,079,530. The Agency's deposits in banks at June 30, 2017, were entirely covered by federal depository insurance or by the State Sinking Fund in accordance with Chapter 12C of the Code of Iowa. s� CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 3—CASH ON HAND,DEPOSITS,AND INVESTMENTS (continued) Investments. As of June 30, 2017, the City had the following investments and mabxrities. (The City assumes callable bonds will not be called): Investment Maturities(In Years) More than Inveshnent Type Less Than 1 1 to 5 6 to 10 10 Total Money Market Funds- U.S. Treasury $ 1,944,919 $ - $ - $ - $ 1,944,919 U.S. Treasury Securities 1,613,159 - - 2,702,788 4,315,947 FederalAgencyObligations 2,653,621 15,829,589 229,876 3,949,876 22,662,962 ManagedAccountsL/TCD 25Q000 243,879 - - 493,879 Corporate Stock 1OQ256 - - - 1OQ256 $ 6,561,955 $ 16,073,468 $ 229,876 $ 6,652,664 $ 29,517,963 The City and the Dubuque Metropolitan Solid Waste Agency are 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 depository instibxtions approved by the City Council or Board of Trustees and the Treasurer of the State of Iowa; prime eligible bankers acceptances; certain high rated commercial paper; perfected repurchase agreements; certain registered open-end management investment companies; certain joint inveshnent trusts; and warrants or improvement certificates of a drainage district Corporate stock was donated in 1957 to the City to establish the Ella Lyons Peony Trail Perxnanent Trust Fund. The City uses the fair value hierarchy established by generally accepted accounting principles based on the valuation inputs used to measure the fair value of the asset Level 1 inputs are quoted prices in active markets for identical assets. Level 2 inputs are significant other observable inputs. Level 3 inputs are significant unobservable inputs. All the of the City's investments were deterxnined using the last reparted sales price at current exchange rates. (Level 1 inputs) InterestRate Risk. The City's investment policy limits the investment of operating funds (funds expected to be expended in the current budget year or within 15 months of receipt) to instruments that mature within 397 days. Funds not identified as operating funds may be invested in instruments with maturities longer than 397 days, but the maturities shall be consistent with the needs and use of the City. Credit Risk. The City's inveshnent policy limits investments in commercial paper and other corporate debt to the top two highest classifications. The City did not invest in any commercial paper or other corporate debt during the year. The City's investments in Money Market Funds and US Agencies were rated AAA. Concentration of Credit Risk The City's investment policy does not allow for a prime bankers' acceptance or commercial paper and other corporate debt balances to be greater than ten percent of its total deposits and inveshnents. The policy also limits the amount that can be invested in a single issue to five percent of its total deposits and investments. The City held no such inveshnents during the year. sa CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 3—CASH ON HAND,DEPOSITS,AND INVESTMENTS (continued) Custodial Credit Risk-Deposits. In the case of deposits, this is the risk that in the event of a bank failure, the City's deposits may not be rebxrned to it The City's deposits are entirely covered by federal depository insurance 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. Custodial Credit Risk—Investments. For an inveshnent, this is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City had no custodial risk with regards to inveshnents, since all investments were held by the City or its agent in the City's name. Due to legal and budgetary reasons, the General Fund is assigned a portion of the investxnents earnings associated with other funds. These funds are the employee benefits, community development, road use tax, cable TV, general construction, transit system, general service, garage service, and stores/printing funds. The Dubuque Metropolitan Area Solid Waste Agency had no investments at June 30, 2017. A reconciliation of cash and investments as shown on the governxnent-wide statement of net position for the primary government and statement of fiduciary assets and liabilities follows: Cash on hand $ 17,485 Can}dng amount of deposits 51,321,494 Carrying amount of investments 29,517,963 Total $ 8Q856,942 Govemment-wide Cash and pooled cash investments $ 51,967,234 Cash and pooled cash investments-temporuily restdcted 27,380,156 Cash and pooled cash investments-permanenTly reshicted 69,412 Fiduciuy Cash and pooled cash investments 1,440,140 Total $ 8Q856,942 A reconciliation of cash and investments as shown on the government-wide statement of net position for the Dubuque Metropolitan Solid Waste Agency follows: Cash on hand $ 1,200 Can}dng amount of deposits 12,933,283 Total $ 12,934,483 Cash and pooled cash investments $ 2,837,257 Cash and pooled cash investments-temporuily restdcted 1 Q097,226 Total $ 12,934,483 69 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 3—CASH ON HAND,DEPOSITS,AND INVESTMENTS (continued) A reconciliation of cash and investments as shown on the government-wide statement of net position for the Dubuque Initiatives and Subsidiaries(December 31, 2016)follows: Deposits $ 1,115,051 Beneficial interest in assets held by others 1,217,509 Total $ 2,332,560 Cash and pooled cash investments $ 1,115,051 Cash and pooled cash investments-temporarily reshicted 1,217,509 Total $ 2,332,560 A reconciliation of cash and investments as shown on the government-wide statement of net position for the Dubuque Convention and Visitors Bureau(June 3Q 2017)follows: Deposits $ 34,854 Total $ 34,854 Cash and pooled cash investments $ 3,458 Cash and pooled cash investments-temporarily reshicted 31,396 Total $ 34,854 70 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 4—NOTES RECEIVABLE The City provides low interest and no interest loans to promote economic and community development, provide opportunities for home ownership to low and moderate income citizens and improve rental properties for low income citizens. Loans may contain a forgivable portion if recipient meets specific conditions such as job creation for economic development or residency requirements community development. Loans are secured by mortgage liens against the property. At June 30, 2017 the City had the following notes receivable. Economic Development Notes Receivable: Original Interest Current Balance Rate Issued Maturity Balance Portion Downtown Rehabilitation Loan Program Harry&Rosey's $ 30Q000 3 % 2011 7/1/2031 $ 278,241 $ 16,239 Clark Wolff 15Q000 3 2001 5/1/2022 45,580 8,735 Dubuque Museum of Art 30Q000 3 1999 7/1/2021 108,498 - GronenAdaptive 30Q000 2 2006 5/1/2036 175,884 7,728 HJD Landlord LLC 466,000 3 2016 4/1/2036 466,000 - Interstate Building LLP 30Q000 3 2010 9/22/2015 271,538 16,946 Lower Main Development, 30Q000 LLC 3 2006 3/1/2026 134,775 12,704 Security Partners,L.P. 30Q000 3 2001 8/1/2021 25,027 14,866 Town Clock Building Co. 30Q000 3 2001 8/1/2021 94,018 21,506 Urban Development Action Grant 40 Main,LLC-Note A 30Q000 - 2009 7/1/2016 283,750 13,750 Downtown Housing Incentive Loan Caradco Landlord,LLC 4,SOQ000 3 2012 6/1/2030 3,791,503 - 40 Main Real Estate Loan 156,583 - 2,009 11/1/2015 156,583 - Sales Tax Construction DB&T Community Development Corporation 1,70Q000 - 2012 2/1/2032 1,70Q000 - $ 7,531,397 $ 112,474 71 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 4—NOTES RECEIVABLE(continued) Interest Current Rate Balance Portion Community Development Installment Loans Receivables Residential Rehabilitation Installment Loan Programs First Time Home Buyers 6 % $ 440,581 $ 38,000 Local Housing Assistance Program (LHAP) 6 106,860 25,000 Homebuyers Assistance Program 6 1,992,238 259,000 Infill 6 293,627 9,000 Residential Rehab Program 6 - - RRPReserve - 204,129 13,075 WashingtonNeighborhoodRevitalize - 46,407 3,528 The Accessibility Rehabilitation Program (for rentals) 6 533,546 17,000 Iowa Finance Authority - 142,543 12,360 HOME Program (1) - 246,276 21,000 Historic Preservation Revolving Loan Fund/Historic Preservation Housing Forgivable Loan Program 6 46,568 11,000 TIF Receivables Roasting Solutions - 289,800 - $ 4,342,575 $ 408,963 (1)Principal payments deferred if one tenant is low income At December 31, 2016,Dubuque Initiatives and Subsidiaries had the following notes receivable: Lower Main Development, 4.00%,unsecured,matures August 2018 $ 26,105 City of Dubuque, 5.00%,unsecured,matures July 2023 209,901 Total notes receivable 236,006 Less: current mabxrities (28,776) Noncurrent partion $ 207,230 �z CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 5—INTERFUND BALANCES AND TRANSFERS Interfund balances at June 30, 2017, include amounts due to/from other funds and advances due to/from other funds. Interfund balances are as follows: Due From Due To Other Funds Other Funds Governmental activities: General Fund $ 627,079 $ - Internal Service - 39,012 Nonmajor - 585,180 Business-type activities: Salt - 2,887 $ 627,079 $ 627,079 These balances result from a time lag between the date that 1)the internal service funds goods and services are provided or reimbursement occurs, 2)transactions are recorded in the accounting system, and 3)payments between funds are made. 73 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 5—INTERFUND BALANCES AND TRANSFERS (continued) Interfund transfers far the year ended June 30, 2017, consisted of the following: Transfers From TaY Sewer Increment Nonmajor Disposal Water Parking ltansferto General Financing Governmental Works Utility Facilities Total General $ - $ 588,688 $ 5,654,570 $ 142,884 $ 142,884 $ - $ 6,529,026 Tas incrementfinancing - - - - - 546,7A5 546,245 Debtservice 1,464,065 7,133,198 1,012,574 - - 9,609,837 Nonmajor govemmental 286,233 1,216,523 626,722 - - - 2,129,478 Waterutility - - 15,548 - - - 15,548 SWrtnwater utility - - 553,541 2,884,229 - - 3,437,770 Nonmajor enteiprise 1,334,087 - - - - - 1,334,087 Internal service fund 31,470 - - - - - 31,470 $ 3,115,855 $ 8,938,409 $ 7,862,955 $ 3,027,113 142,884 $ 546,7A5 $ 23,633,461 Net capital assets of$1,076,912 were transferred from governmental capital assets to transit. The transfer was reported as a capital contribution in the Transit Fund. Net capital assets of $635,427 were transferred from governxnental capital assets to parking. The transfer was reported as a capital contribution in the Parking Fund. No amounts were reparted in the governmental funds, as the amounts did not involve the transfer of financial resources. Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that stabxte or budget requires to expend them, (2)move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations, and(4)fund capital projects. V A CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 6—CAPITAL ASSETS Capital asset activity far the year ended June 30, 2017,was as follows: Primary Government: Governmental activities: Beginnivg ltansfecs ltansfers Evdivg Balavice In O�t Increases Decreases Balavice Capital assels,votbeivg depreciated: Lavd $ ]9,]62,]21 $ - $ - $ 509,680 $ (13],584) $ 80,134,Sll Covstruc[ionivProg�ess 38,114,212 10,564,]ffi (4,005,019) 44,6]3y68 Total Capital assets,vot bavgdepreciated 1ll,8]6y33 11,0]4,465 (4,142,613) 124,808,]85 Capital assels,bavg depreciated: Buildivgs 140,451y9] - - 546y19 - 140y98y26 Impcwemenls othec Nan b�ilAvgs 23,]64,449 - - 110,143 - 23,8]4,592 Macttiveryandequipmevt 46,318y]2 - - 3,553y]6 (2,64],819) 4],225,119 Infras[rucNre 22]y44,685 3y85,]6] 231y3Q452 Total capital assels,bavg depreciated 438,48Q103 8,196,815 (2,64],819) 444,02Q089 Less accumiilated depreciafion for: Buildivgs (38,593,6]2) - - (2,414,]19) - (41,008,391) Impcwemenls othec mann��mugs (iqozc,zov) - - (sii,cc�) - (iqss�,s�c) MacttiveryandEquipmevt (24,4]1,3]5) - - (3,131,595) 2,283,164 (25,319,806) Infras[rucNre (�1,333,668) (3,]]8,665) (]5,112,333) Total accumiilated a�,�eo�aeo� (iaa,aza,9za� �iqisc,cac� z,zss,ica �isz,vs,aoc� Total capital assels,bavg depreciated,vet 294,055,1]9 (1y39,831) (364,665) 291,]50,683 6ovemmental activities capital assels,vet $ 411y32,112 $ $ $ 9,134,634 $ (4,50],2]8) $ 416,559,468 �5 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 6—CAPITAL ASSETS (continued) Business-type activities: Beginnivg ltansfecs ltansfers EvAvg Balavice In O�t Increases Decreases Balavice Capital assels,votbeivg depreciated: Lavd $ 23,0]0,018 $ - $ - $ 1,115,885 $ - $ 24,185y03 Covstruc[ionivprog�ess 1,888,490 2,884,219 (2,884,229) 24,15],]6] (19,538,842) 6,50],415 Total Capital assets,vot bavgdepreciated 24y58,508 2,884,219 (2,884,229) 25,2]3,652 (19,538,842) 3Q693,318 Capital assels,bavg depreciated: Buildivgs 151,445,382 - - 664,396 - 152,109,]]8 Impcwemenls othec Nan b�ilAvgs 142,5]9,438 - - 18y61,82] - 161,541,265 Macttivery and equipmevt 103 8]2 339 6 602 09] (11Q000) 110 364 436 Total capital assels,bavg depreciated 39]89]159 26228 320 (11Q000) 424 O15 4]9 Less accumiilated depreciafion for: Buildivgs (49,223,618) - - (2,04],550) - (51,2]1,168) Impcwemenls othec Nanb�ilAvgs (28,058,636) - - (2,563,2]5) - (30,621y11) Macttiveryandequipmevt (33,54],239) (3,]9],086) 110000 (3],234,325) Total accumiilated depreciafion (11Q829,493) (8,40]yll) 11Q000 (11Q12],404) Total capital assels,bavg depreciated,vet 28],06],666 ll,82Q409 304,888,0]5 B�sivess-type activifies capitalassels,vet $ 312,026,1]4 $ 2,884,219 $ (2,884,229) $ 43,094,061 $ (19,538,842) $ 335,581,393 �6 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 6—CAPITAL ASSETS (continued) Depreciation expense was charged to functions/programs far the primary government as follows: Governmental activities: Public safety $ 1,038,511 Public works 6,022,556 Health and social services 6,975 Culture and recreation 2,207,399 Community and economic development 16,892 General government 807,658 Capital assets held by the governxnent's internal service funds are charged to various functions based on their usage of their assets 36,655 Total depreciation expense -governmental activities $ 10,136,646 Business-type activities: Sewage disposal works $ 3,360,464 Water utility 1,250,442 Storxnwater utility 1,466,614 Parking facilities 1,256,309 Refuse collection 319,486 Salt 27,639 Transit system 726,957 Total depreciation expense -business-type activities $ 8,407,911 �� CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 6—CAPITAL ASSETS (continued) Dubuque Metropolitan Area Solid Waste Agency(Component Unit): Beginnivg ltansfecs ltansfecs Evdivg Balavice In O�t Increases Decreases Balavice Capital assels,votbeivg depreciated: Lavd $ 2y52,666 $ - $ - $ - $ - $ 2y52,666 Covstruc[ionivprog�ess 3,464,862 1,086,188 (3,362,246) 1,188,804 Total Capital assets,vot bavg depreciated 6,4ll,528 1,086,188 (3,362,246) 4,141,4]0 Capital assels,bavg depreciated: Buildings 106,495 - - - - 106,495 Impcwemenls othec Nan b�ilAvgs 10,306,408 - - 3,362,246 - 13,668,654 Macttiveryandequipmevt 4,255,081 182,2]8 (19],353) 4,140,006 Total capital assels,bavg depreciated 14,66]y84 3,544,524 (19],353) lly15,155 Less accumiilated depreciafion for: sw�a�o,s �sa,ozz� - - (i,9zz) - (ss5aa� Impcwemenls othec Nan b�ilAvgs (6,]32,144) - - (159,236) - (6,891,380) Macttiveryandequipmevt (2,860,485) (2]2,449) 260,399 (2,8]2,535) Total accumiilated depreciafion (9,646,651) (433,60]) 260,399 (9,819,859) Total capital assels,bavg depreciated,vet 5,021,333 3,110yll (36y54) 8,095,296 D�b�q�e Metropolitav Area Solid Waste,capital assets $ 11,438,861 $ $ $ 4,19],105 $ (3,399,200) $ 12,236,]66 Depreciation expense of$433,607 was charged W the Dubuque Metropolitan Area Solid Waste Agency. 78 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 7—LONGTERM DEBT General Obligation Bonds. The City issues general obligation bonds to provide funds far the acquisition and construction of major capital facilities. General obligation bonds have been issued for both governmental and business-type activities. The original amount of general obligation bonds issued in prior years was $115,450,000. During fiscal year 2017, the City issued $20,360,000 of general obligation bonds, $20,130,000 of which was used for a current refunding bonds. The City refunded $20,495,000 of general obligation bonds. The refunding was undertaken to reduce total debt service payments. The results of the transaction is a reduction of$1,326,119 in fubxre debt service payments for an economic gain of$1,148,511. General obligation bonds are direct obligations and pledge the full faith and credit of the City. These bonds generally are issued as serial bonds with varying amounts of principal maturing annually and with interest payable semi-annually. General obligation bonds outstanding at June 30, 2017, are as follows: Amount Amount Date of Interest Originally Outstanding Purpose Issue Maturity Dates Rates Issued End of Yeu Corporate purpose (taxable)Series 2008C 11/04/2008 06/O1/09-06/O1/18 525-5.50 2,465,000 430,000 Corporate purpose Series 2011A 09/O1/2011 06/O1/12-06/O1/31 2.00-4.00 6,330,000 4,995,000 Corporate purpose (ta�.ble)Series 2011B 09/O1/2011 06/O1/13-06/O1/26 225-435 1,590,000 1,090,000 Corporate purpose Series 2012A 03/15/2012 06/O1/14-06/O1/31 2.003.00 4,380,000 3,550,000 Corporate purpose and refund Series 2012B 03/15/2012 06/O1/13-06/O1/31 2.003.13 7,495,000 6,010,000 Corporate purpose 06/28/2012 06/O1/14-06/O1/32 2.003.90 6,965,000 (taxable)Series 2012C 5,780,000 Corporate purpose Series 2012D 06/28/2012 06/O1/14-06/O1/32 2.003.46 7,175,000 5,235,000 Corporate purpose Series 2012E 12/12/2012 06/O1/14-06/O1/32 2.003.00 3,640,000 2,835,000 Corporate purpose (ta�.ble)Series 2012F 12/10/2012 06/O1/14-06/O1/22 1.00-220 1,035,000 665,000 Corporate purpose Series 2012H 12/10/2012 06/O1/15-06/O1/32 2.003.00 2,385,000 1,900,000 Corporate purpose(taxable) and refund Series 2012I 12/04/2013 06/O1/13-06/O1/21 030-220 7,285,000 2,240,000 Corporate purpose Series 2014B 12/08/2014 06/O1/16-06/O1/34 3.003.65 18,835,000 18,370,000 Corporate purpose(taxable) Series 2014C 12/08/2014 06/O1/16-06/O1/34 3.00-4.16 7,615,000 7,415,000 Corporate Purpose Series 2016A 04/04/2016 06/O1/17-06/O1/35 2.003.75 2,830,000 2,710,000 Corporate Purpose Refunding Series2016B 04/04/2016 06/O1/16-06/O1/28 2.003.00 10,92Q000 9,160,000 Corporate Purpose Series 2016C 04/04/2016 06/O1/17-06/O1/35 2.003.13 4,145,000 3,985,000 Corporate Purpose Series 2017A 04/17/2017 06/O1/18-06/O1/30 3.00 8,495,000 8,495,000 Corporate Purpose Refunding Seriers 2017B 04/17/2017 06/O1/18-06/O1/30 3.00 9,745,500 9,745,000 Corporate Purpose Refunding Series 2017C 04/17/2017 06/O1/18-06/O1/30 3.00-3.45 2,120,000 2,120,000 $ 115,450,500 $ 96,730,000 79 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 7—LONGTERM DEBT (continued) Annual debt service requirements to maturity for general obligation bonds are as follows: Fiscal Year Governmental Activities Business-type Activities June 30 Principal Interest Principal Interest 2018 $ 5,241,016 $ 1,566,461 $ 2,408,984 $ 1,385,417 2019 4,740,993 1,393,836 2,974,008 1,288,039 2020 4,776,814 1,275,964 2,993,286 1,204,008 2021 4,498,314 1,153,844 2,866,696 1,118,024 2022 3,314,338 1,033,959 2,955,662 1,033,355 2023-2027 15,149,712 3,900,162 14,705,288 3,837,028 2028-2032 12,979,909 1,665,229 11,894,980 1,593,264 2033-2035 2,323,898 144,975 2,906,106 162,413 Total $ 53,024,994 $ 12,134,430 $ 43,705,010 $ 11,621,548 Tax Increment Financing Bonds. The City issues tax increment financing bonds to provide funds for urban renewal projects. The City pledges properly tax revenues from the tax increment financing districts to pay debt service. These bonds are generally issued as serial bonds with varying amounts of principal maturing annually and with interest payable semi-annually. Tax increment financing bonds outstanding at June 30, 2017, are as follows: Amount Amount Date of Interest Originally Outstanding Current Purpose Issue Maturity Dates Rates Issued End of Year Portion Diamond Jo Parking Ramp 10/16/07 06/Ol/11-06/Ol/37 7.50 % $ 23,025,000 $ 2Q52Q000 $ 475,000 $ 23,025,000 $ 2Q52Q000 $ 475,000 Annual debt service requirements to maturity far tax increment financing bonds are as follows: Fiscal Year Governmental Activities June 30 Principal Interest 2018 $ 475,000 $ 1,539,000 2019 510,000 1,505,375 2020 550,000 1,465,125 2021 590,000 1,423,875 2022 635,000 1,379,625 2023-2027 3,950,000 6,110,625 2028-2032 5,675,000 4,409,375 2033-2037 8,135,000 1,918,500 Total $ 20,520,000 $ 19,751,500 ao CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 7—LONGTERM DEBT (continued) Revenue Bonds. The City also issues bonds where the City pledges income derived from the acquired or constructed assets to pay debt service. These bonds are generally issued as serial bonds with varying amounts of principal maturing annually and with interest payable semi-annually. Revenue bonds outstanding at June 30, 2017, are as follows: Amount Amount Date of Interest Originally Outstanding Purpose Issue Maturity Dates Rates Issued End of Yeu Water Utility Series 2008D 11/04/2008 06/O1/10-06/O1/23 3.00-5.00% $ 1,195,000 $ 590,000 Water Utility Series 2010D 09/21/2010 06/O1/12-06/O1/30 2.00-4.00 5,70Q000 4,525,000 SalesTaxIncrementa12014 06/14/2014 06/O1/23-06/O1/29 4.00-5.00 7,19Q000 7,190,000 Sales Tax Incremental 2015A 06/15/2015 06/O1/23-06/O1/29 325-4.00 20,80Q000 2Q800,000 $ 34,885,000 $ 33,105,000 The City has pledged future water customer revenues,net of specified operating expenses, to repay $1,195,000 of water revenue bonds, issued in November 2008, to provide financing for water main replacements and repairs, construction of water main extensions, and the acquisition and installation of a pump station radio communication equipment and facilities. The bonds are payable solely from water customer net operating revenues and are payable through 2023. The City has pledged future water customer revenues,net of specified operating expenses,to repay$5,700,000 of water revenue bonds, issued in November 2010,to provide funds to pay costs of constructing and equipping improvements, and extensions to the municipal water system. The bonds are payable solely from water customer net operating revenues and are payable through 2030. Net operating income is expected to equal or exceed 1.25%of the annual principal and interest payments on both bonds. The City shall at all times prescribe,fix, and maintain and collect rates,fees and other charges for their services and facilities furnished by the system that are fully sufficient at all times which will(a) equal at least 125%of the debt service requirement of all bonds and parity obligations then outstanding far the year of computation; (b) enable the City to make all required payments, if any, into the debt service reserve fund. Far the current year,principal and interest paid and total customer net revenues (operating revenues,plusinterestearnings,plus depreciation expense)were $497,260 and $3,910,493, respectively. Except with respect to the Senior SRF Bonds, or any fubxre SRF bonds,the City covenants to establish and maintain a debt service reserve fund in the amount deterxnined to be a reasonable reserve for the payment of principal and interest on the Bonds and outstanding parity obligations, (b)the maximum annual principal and interest requirements on the bonds and outstanding parity obligations, ar(c) 125% of the average annual principal and interest requirements on the bonds. During the year ended June 30, 2017,the City was in compliance with the revenue bonds' provisions. Pursuant to the Master Resolutions, approved by the City Council, Sales Tax Increment Revenues received as a result of the Flood Mitigation Program under the Award Agreement shall be applied solely for the benefit of the holders of the Series 2015A Bonds $20,800,000, and outstanding from time to time, any other Senior Bonds,the Series 2014 Bonds, $7,190,000 and any other second lien bonds that may be issued in the future under the Master Resolution. The bonds provide financing for costs for acquisition, construction and installation and equipping of the Bee Branch Watershed Flood Mitigation Project. The total principal and interest remaining to be paid on all revenue bonds is $43,694,305. 81 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 7—LONGTERM DEBT (continued) The City issued $7,190,000 Sales Tax Increment Revenue Bonds, June 2014 and $20,800,000 June 2015, for the purpose of paying costs of the acquisition, construction and installation and equipping of he Bee Branch Watershed Flood Mitigation Project The master resolution establishes a Debt Service Reserve Account that may secure one or more series of Bonds. Upon the issuance of the Series 2015A Bonds a deposit of$2,080,000 was made into the Debt Service Reserve Account, and the Series 2015A Bonds shall be secured by amounts held in the Debt Service Reserve Account. The Series 2014 Bonds are revenue bonds secured by and payable as provided in the Master Resolution from all Pledged Revenues which are pledged under the Master Resolution to the payment of the principal and interest of the Series 2014 Bonds. There shall be no deposit made into the Debt Service Reserve Account for Series 2014 Bonds, there is no Debt Service Reserve Requirement applicable to the Series 2014 Bonds, and Series 2014 Bonds shall not be secured by any amounts held in the Debt Service Reserve Account. Revenue bond debt service requirements to maturity are as follows: Fiscal Year Business-type Activities June 30 Principal Interest 2018 $ 305,000 $ 955,878 2019 315,000 945,288 2020 330,000 934,308 2021 340,000 922,698 2022 355,000 910,598 2023-2027 17,410,000 4,607,244 2028-2031 14,050,000 1,313,291 Total $ 33,105,000 $ 10,589,305 Notes Payable. Notes payable have been issued to provide funds for economic development and far the purchase of capital assets. Notes payable at June 30, 2017, are as follows: Amount Amount Date of Interest Originally Outstanding Current Purpose Issue Maturity Dates Rates Issued End of Yeu Portion Theisen Supply 11/22/06 12/31/08-06/30/18 8.00 % $ 810,323 $ 121,116 $ 121,115 40MainLLC 08/06/09 06/O1/11-06/Ol/37 6.50 690,529 330,647 74,765 $ 1,500,852 $ 451,763 $ 195,880 Annual debt service requirements to maturity for notes payable are as follows: Fiscal Year Governmental Activities June 30 Principal Interest 2018 $ 195,880 $ 28,381 2019 79,827 15,582 2020 85,174 10,235 2021 90,882 4,528 Total $ 451,763 $ 58,726 az CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 7—LONGTERM DEBT (continued) Capital Loan Notes. Revenue capital loan notes have been issued far the planning and construction of sewer, storxnwater, and water capital projects through the State of Iowa State Revolving Loan Funds. The City issued an additional $7,388,799 of SRF debt in 2017 as part of the Bee Branch storxnwater construction project and $2,150,596 for green alley projects reducing stormwater run off. The City has pledged income derived from the acquired or constructed assets to pay debt service. Capital loan notes payable at June 30, 2017, are as follows: Final Amount Date Maturity Interest Amount Outstanding Current Purpose Authorized Date Rates Authorized EndofYeu Portion Drinldng Water 10/18/07 06/O1/28 325 % $ 1,037,000 $ 571,000 $ 44,000 C1eanWater O1/14/09 06/O1/28 325 1,827,000 1,152,000 89,000 North Catfish Creek Stormwater O1/13/10 06/O1/30 325 800,000 576,000 36,000 North Catfish Creek Sewer O1/13/10 06/O1/30 325 912,000 657,000 41,000 Water Meter Replacement 02/12/10 06/O1/30 325 7,676,000 2,423,000 139,000 Water Meter Replacement Sewer 02/12/10 06/O1/30 325 3,058,000 2,423,000 139,000 Upper Bee Branch Sewer 10/27/10 06/O1/41 325 7,850,000 6,819,000 192,000 Water and Resource Recovery Center 08/18/10 06/O1/39 2.00 74,285,000 64,867,676 2,391,000 Cogeneration OS/17/13 06/O1/33 2.00 3,048,000 2,531,000 136,000 Bee Branch Stormwater 02/18/14 06/O1/33 2.00 1,029,000 101,720 46,000 Bee Branch Stormwater 06/19/15 06/O1/37 2.00 29,541,000 28,392,547 472,800 $ 131,063,000 $ 11Q513,943 $ 3,725,800 Annual debt service requirements to maturity for capital loan notes are as follows: Fiscal Year Business-type Activities June 30 Principal Interest 2018 $ 3,725,800 $ 2,336,359 2019 4,337,999 2,303,227 2020 4,403,721 2,208,848 2021 3,696,292 2,112,063 2022 4,563,000 2,029,142 2023-2027 24,384,000 8,619,789 2028-2032 25,751,000 5,807,103 2033-2037 31,356,455 2,637,618 203 8-2041 8,295,676 126,230 Total $ 110,513,943 $ 28,180,379 At June 30, 2017,the City of Dubuque had $1,357,010 of capital loan note funds available. These funds are available to the City by filing a disbursement request with the State of Iowa. The City expects to use the remaining available funds in fiscal year 2018. The Sewer Utility revenue capital loan notes covenants include a requirement far the utility to produce net revenue of at least 110%of the current year debt service requirement 83 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 7—LONGTERM DEBT (continued) Loans Payable. Loans payable have been issued to fund several City projects. Loans payable at June 30, 2017, are as follows: Amount Amount Date of Interest Origirtally Outstanding Current Purpose Issue Maturity Dates Rates Issued End of Yeu Portion PukingLotPurcktase 07/08/08 Ol/O1/09-07/Ol/23 5.0 % $ 400,000 $ 209,902 $ 28,074 IowaFinanceAuthority 08/26/11 06/O1/20-06/Ol/30 3.0 4,500,000 3,90Q000 18,000 Bowling&Beyond Inc. 07/25/12 12/04/12-12/04/32 - 1,000,000 75Q000 50,000 WestemRuralWater 12/27/16 12/O1/17-12101/21 3.0 5,000,000 S,OOQ000 1,000,000 $ 10,900,000 $ 9,859,902 $ 1,096,074 Annual debt service requirements to maturity for loans payable are as follows: Fiscal Year Governmental Activities Business-type Activities June 30 Principal Interest Principal Interest 2018 $ 68,000 $ 117,000 $ 1,028,074 $ 149,463 2019 68,540 116,460 1,029,495 128,727 2020 69,096 115,904 1,030,988 97,234 2021 235,513 115,331 1,032,557 65,665 2022 241,078 109,766 1,034,205 34,017 2023-2027 1,294,895 459,325 54,583 2,752 2028-2032 2,672,878 197,318 - - Total $ 4,650,000 $ 1,231,104 $ 5,209,902 $ 477,858 aa CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 7-LONGTERM DEBT (continued) Changes in Long-term Liabilities. Long-term liability activity far the year ended June 30, 2017, was as follows: Balance Beginning Balance End Due Wittun of Yeu Additions Reductions of Yeu One Yeu Governmerrtal ac[ivities: Generalobligationbonds $ 58,076,184 $ 11,253,700 $ (16,304,890) $ 53,024,994 $ 5,241,016 Unaccretedpremium 917,720 319,384 (405,284) 831,820 - un�o�tizeaa�s�o�� (iza,o9z� - 6�,99� �s6,o9s) - Totalgeneralobligationbonds 58,869,812 11,573,084 (16,642,177) 53,800,719 5,241,016 Tax increment firtancing bonds 20,96Q000 - (440,000) 20,520,000 475,000 Unamortizeddiscounts (195,182) - 8,872 (186,310) - Total tax increment firtancing bonds 20,764,818 - (431,128) 20,333,690 475,000 Notes payable 625,429 - (173,666) 451,763 195,880 Loanspayable 5,347,142 - (697,142) 4,650,000 68,000 Compensatedabsences 5,906,104 2,627,426 (3,042,687) 5,490,843 443,005 Netpensionliability 36,085,349 10,715,642 - 46,800,991 - Net OPEB liability 3,809,858 38Q839 - 4,190,697 - Total governmental ac[ivities $ 131,408,512 $ 25,296,991 $ (20,986,800) $ 135,718,703 $ 6,422,901 Businesstype ac[ivities: Generalobligationbonds $ 46,338,822 $ 9,106,300 $ (11,740,110) $ 43,705,012 $ 2,408,985 Unaccretedpremium 563,016 289,152 (34,461) 817,707 - un�o�tizea a�s�o�� (9s,s6s� - s9,669 �ss,69� - Total general obligation bonds 46,806,473 9,395,452 (11,714,902) 44,487,023 2,408,985 Revenue bonds 33,40Q000 - (295,000) 33,105,000 305,000 Unaccretedpremium 865,888 - (66,360) 799,528 - un�o�tizea a�s�o�� (bs,ss9� - a,9z� �6s,96z) - Total revenue bonds 34,196,999 - (356,433) 33,840,566 305,000 Capitalloannotes 104,156,551 9,539,393 (3,182,000) 11Q513,944 3,725,800 Loans payable 236,621 S,OOQ000 (26,719) 5,209,902 1,028,074 Compensatedabsences 903,179 396,526 (533,409) 766,296 55,849 Netpensionliability 4,695,669 1,044,390 - 5,740,059 - Net OPEB liability 827,501 91,604 - 919,105 - TotalbusinessTypeac[ivities $ 191,822,993 $ 25,467,365 $ (15,813,463) $ 201,476,895 $ 7,523,708 For the governxnental activities, compensated absences, net pension liability and net OPEB liability are generally liquidated by the General Fund, Community Development Fund, and Section VIII Housing Fund. as CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 7—LONGTERM DEBT (continued) Dubuque Metropolitan Area Solid Waste Agency General Obligation Bonds. Dubuque County, Iowa issued a general obligation landfill facilities bond to provide funds for the acquisition and construction of major capital facilities. The Dubuque Area Metropolitan Solid Waste Agency will reimburse Dubuque County for interest and principal payments from operating revenue. These bonds generally are issued as serial bonds with varying amounts of principal maturing annually and with interest payable semi-annually. The amount outstanding as of June 30, 2017 is as follows: Amount Amount Interest Originally Outstanding Purpose Date of Issue Maturity Date Rate Issued End of Year LandfillFacility 12/30/2014 06/O1/16-06/O1/34 2.0-4.0 % $ 4,500,000 $ 4,125,000 LandfillFacility 12/28/2016 06/O1/17-06/O1/36 3.0 5,100,000 5,000,000 $ 9,600,000 $ 9,125,000 Annual debt service requirements to maturity of the general obligation bond is as follows: Fiscal Year June 30 Principal Interest 2018 $ 395,000 $ 272,559 2019 400,000 262,659 2020 410,000 250,659 2021 425,000 238,359 2022 435,000 225,609 2023-2027 2,385,000 926,963 2028-2032 2,770,000 563,548 2033-2036 1,905,000 135,595 Total $ 9,125,000 $ 2,875,951 Changes in Long-Term Liabilities. Long terxn liability activity far the year ended June 30, 2017 is as follows: Balance Beginning Balance Due Within of Year Additions Reductions End of Year One Year Generalobligationbond $ 4,315,000 $ S,lOQ000 $ (29Q000) $ 9,125,000 $ 395,000 Unaccretedpremium 132,132 118,065 (6,954) 243,243 - Totalgeneralobligationbond $ 4,447,132 $ 5,218,065 (296,954) $ 9,368,243 $ 395,000 86 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 7—LONGTERM DEBT (continued) Dubuque Initiatives and Subsidiaries. At December 31, 2016,Dubuque Initiatives and Subsidiaries had the following notes and loan payable: Note payable to Dubuque Bank&Trust(Loan A), due in monthly interest-only payments through June 2029; at which time unpaid interest and principal are due. Interest rate through June 2018 is the greater of Federal home Loan Bank rate plus 2.75%or 5.00% with a ceiling of 7.00%(effective rate of 5%at December 31, 2016). Thereafter the interest rate is the Federal Home Loan Bank rate plus 2.75%.* $ 5,294,384 Note payable to Dubuque Bank&Trust(Loan B), due in monthly installments as set farth in the Loan Agreement, including interest at the greater of Federal Home Loan Bank rate plus 2.75%or 5%with a ceiling of 7%(effective rate of 5%at December 31, 201�. Unpaid interest and principal due June 2019.* 347,094 5,641,478 Less: Currentmaturities (433.504) Non-current liability $ 5.207.974 The following is a schedule by years of the principal maturities of long-term debt obligations for the years ending June 30: 2017 $ 433,504 2018 489,518 2019 508,955 2020 529,162 2021 550,173 Thereafter 3.130.166 � 5.641.478 * -Notes are collateralized by substantially all Organization assets, a collateral assignment of tax credit purchase agreement dated June 22, 2009, a collateral assignment of fund loan documents dated June 22, 2009 and are guaranteed by the City of Dubuque. In January 2017, the Organization refinanced the long-term debt. The refinanced note is due in monthly installments of $56,995, including interest at 3.90%. Unpaid principal and interest are due January 2022. The note is collateralized by an assignment of rents, a commercial pledge and substantially all assets of the Organization. During 2016, the Organization satisfied all tax credit compliance requirements. As such, the Organization exercised its option and obtained the outstanding units of Master Tenant held by outside investors. Concurrently, notes receivable of$9,697,427 due from an entity owner by the outside investors was forgiven. RBI was dissolved and RBPs assets and liabilities was transferred to DL QALICB changed its name to Roshek Building, LLC ("RBL") and Master Tenant was dissolved and its assets and liabilities were transferred to RBL. At that time, loans of $19,700,000 owed to the outside investors were forgiven. At December 31, 2016, the remaining entities are DI and RBL, which now includes all operations of the Roshek Building, of which DI is the sole member. 87 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 8—RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the governxnent carries commercial insurance purchased from independent third parties and participates in a local government risk pool. The City assumes liability for deductibles and claims in excess of coverage limitations. The City has established a Health Insurance Reserve Fund for insuring benefits provided to City employees and covered dependents which is included in the Internal Service Fund Type. Health benefits were self-insured up to an individual stop-loss amount of $120,000, and an aggregate stop-loss of $12,336,455 for 2017. Coverage from a private insurance company is maintained for losses in excess of the stop-loss amount. All claims handling procedures are performed by a third-party claims administrator. Incurred but not reparted claims have been accrued as a liability based upon the claims administrator's estimate. Settled claims have not exceeded commercial coverage in any of the past three fiscal years. The estimated liability does not include any allocated or unallocated claims adjustment expense. The City has established a Warkers' Compensation Reserve Fund for insuring benefits provided to City employees which is included in the Internal Service Fund Type. Warkers' compensation benefits were self-insured up to a specific stop-loss amount of $600,000, and an aggregate-stop loss consistent with statutory limits for 2017. Coverage from a private insurance company is maintained for losses in excess of the stop-loss amount. All claims handling procedures are performed by a third-party claims administrator. Incurred but not reported claims have been accrued as a liability based upon the claims administrator's estimate. Settled claims have not exceeded commercial coverage in any of the past three fiscal years. The estimated liability does not include any allocated or unallocated claims adjustment expense. The City purchases private insurance to include sworn Police Officers and Fire Fighters medical claims under a self-insured retention of$750,000 for each accident. All funds of the City participates in both programs and makes payments to the Health Insurance Reserve Fund and the Warkers' Compensation Reserve Fund based on actuarial estimates of the amounts needed to pay prior and current year claims. The claims liability of $704,944 in the Health Insurance Reserve Fund and $1,118,237 in the Warkers' Compensation Reserve Fund is based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that a liability for claims be reported if inforxnation priar 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 reported liabilities, all of which are expected to be paid within one year of year end, for the fiscal years ended June 30, 2017 and 2016, are summarized as follows: Health Workers' Insurance Compensation Reserve Fund Reserve Fund Liabilities at June 3Q 2015 $ 504,512 $ 1,454,193 Claims and changes in estimates during fiscal year 2016 11,71Q806 (152,553) Claim payments (11,419,937) (261,73� Liabilities at June 3Q 2016 795,381 1,039,904 Claims and changes in estimates during fiscal year 2017 11,22Q181 1,153,265 Claim payments (11,31Q618) (1,074,932) Liabilities at June 3Q 2017 $ 704,944 $ 1,118,237 88 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 8—RISK MANAGEMENT (continued) The City is a member in the Iowa Communities Assurance Pool (Pool), as allowed by Chapter 670.7 of the Code of Iowa. The Pool is a local government risk-sharing pool whose 753 members include various governmental entities throughout the State of Iowa. The Pool was formed in August 1986 far the purpose of managing and funding third-party liability claims against its members. The Pool provides coverage and protection in the following categories: general liability, automobile liability, automobile physical damage, public officials' liability, police professional liability, property, inland marine, and boiler/machinery. The City acquires automobile physical damage coverage through the Pool. All other property, inland marine, and boiler/machinery insurance is acquired through commercial insurance. There have been no reductions in insurance coverage from prior years. Each member's annual casualty contributions to the Pool fund current operations and provide capital. Annual operating contributions are those amounts necessary to fund, on a cash basis, the Pool's general and administrative expenses, claims, claims expenses, and reinsurance expenses due and payable in the current year, plus all or any partion of any deficiency in capitaL Capital contributions are made during the first six years of inembership and are maintained not to exceed 300 percent of the total current members' basis rates or to comply with the requirements of any applicable regulatory authority having jurisdiction over the Pool. The Pool also provides property coverage. Members who elect such coverage make annual operating contributions which are necessary to fund, on a cash basis, the Pool's general and administrative expenses and reinsurance premiums, all of which are due and payable in the current year, plus all or any portion of any deficiency in capital. Any year-end operating surplus is transferred to capital. Deficiencies in operations are offset by transfers from capital and, if insufficient, by the subsequent year's member contributions. The City has property insurance coverage in addition to the Pool. The City's property and casualty contributions to the risk pool are recorded as expenditures from its operating funds at the time of payment to the risk pooL The City's annual contributions to the Pool far the year ended June 30, 2017,were $503,078. The Pool uses reinsurance and excess risk-sharing agreements to reduce its exposure to large losses. The Pool retains general, automobile, police professional, and public officials' liability risks up to $350,000 per claim. Excess coverage is provided for claims exceeding $350,000 under various reinsurance agreements. Property and automobile physical damage risks are retained by the Pool up to $250,000 each occurrence, each location, with excess coverage reinsured on an individual-member basis. The Pool's Iowa Risk Management Agreement with its members provides that in the event a casualty claim or series of claims exceeds the amount of risk-sharing protection provided by the member's risk-sharing certificate, or in the event that a series of casualty claims ez�hausts total members' equity plus any reinsurance and any excess risk-sharing recoveries, then payment of such claims shall be the obligation of the respective individual member. As of June 30, 2017, settled claims have not exceeded the risk pool or reinsurance company coverage since the Pool's inception. as CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 8—RISK MANAGEMENT (continued) Members agree to continue membership in the Pool through the Iowa Risk Management Agreement for a period of not less than one full year. After such period, a member who has given 60 days' prior written notice may withdraw from the Pool. Upon withdrawal, a formula set farth in the Pool's intergovernxnental contract with it's members is applied to determine the amount(if any)to be refunded to the withdrawing member. NOTE 9—COMMITMENTS AND CONTINGENT LIABILITIES Grants The City has received financial assistance from numerous federal and state agencies in the form of grants and entitlements. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, liabilities resulting from disallowed claims, if any, will not have a material effect on the City's financial position as of June 30, 2017. Litigation The City Attorney reparted that various claims and lawsuits were on file against the City. The City Attorney has estimated that all potential settlements and lawsuits against the City not covered by insurance would not materially affect the financial position of the City. The City has authority to levy additional taxes (outside the regular limit)to cover uninsured judgxnents against the City. Construction Contracts The City has recognized as a liability only that portion of construction contracts representing construction completed through June 30, 2017. The City has additional commitments for signed construction contracts of $17,825,337 as of June 30, 2017. These commitments will be funded by federal and state grants, cash reserves, and bond proceeds. Dubuque Metropolitan Area Solid Waste Agency has recognized a liability only that portion of construction contracts representing construction completed through June 30, 2017. DMASWA has an additional commitment for a signed construction contract of$2,349,482 as of June 30, 2017. This commitment will be funded by bond proceeds. so CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 10—OTHER POST EMPLOYMENT BENEFITS (OPEB) The City implemented GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits other Than Pensions prospectively during the year ended June 30, 2009. Plan Descrivtion - The City operates a single-employer retiree benefit plan which provides postemployment benefits for eligible participants enrolled in the City-sponsored plans, which include the employees of the Dubuque Metropolitan Area Solid Waste Agency (a component unit). The Plan does not issue a stand-alone financial report. The benefits are provided in the form of: An implicit rate subsidy where pre-65 retirees receive health insurance coverage by paying a combined retiree/active rate for the self-insured medical and prescription drug plan. An explicit rate subsidy where the City pays the full cost of a $1,000 policy in the fully-insured life insurance plan. To be eligible far the health insurance coverage, retirees must be at least 55 years old, have completed 4 years of service, and be vested with either the Iowa Public Employee's Retirement System (IPERS) ar the Municipal Fire and Police Retirement System of Iowa (1VIF'PRS�. In addition to the health eligibility coverage requirements, one must have belonged to a bargaining group to be eligible for life insurance benefits. There are approximately 535 active and 79 retired members in the plan, as of most recent acbxarial valuation report. Fundin¢Policv-The contribution requirements of plan members are established and may be amended by the City. The City currently finances the retiree benefit plan on a pay-as-you-go basis. Annual OPEB Cost and Net OPEB Oblieation - 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 norxnal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years. The following table shows the components of the City's annual OPEB cost far the year ended June 30, 2017, the amount actually contributed to the plan, and changes in the City's net OPEB obligation: Annual required contribution $ 571,435 Interest on net OPEB obligation 212,675 Adjushnent to annual required contribution (277,648) Annual OPEB cost 506,462 Contributions made,net of retiree contributions (23,994) Increase in net OPEB obligation 482,468 Net OPEB obligation, beginning of year 4,726,101 Net OPEB obligation, end of year $ 5,208,569 For calculation of the net OPEB obligation, the actuary has set the transition day as July 1, 2016. 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 far the year ended June 30, 2017. 91 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 10—OTHER POST EMPLOYMENT BENEFITS (OPEB) (continued) For the year ended June 30, 2017, the City paid $519,898 for retiree claims. Plan members eligible for benefits contributed $495,904 or 100% of the premium costs. The net resulted in City contributions of $23,994. The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation as of June 30, 2017 are summarized as follows: Percentage of Net Annual AnnuaIOPEB OPEB Year Ended OPEB Cost Cost Contributed Obligation June 30, 2017 $ 506,462 5 % $ 5,208,569 June 30, 2016 467,960 0 4,726,101 June 30, 2015 466,758 1 4,221,176 Funded Stabxs and Fundin¢Pro¢ress - As of July 1, 2016, the most recent actuarial valuation date far the period July 1, 2016 through June 30, 2017, the actuarial accrued liability was $5,187,750, with no actuarial value of assets,resulting in an unfunded acbxarial accrued liability (UAAI,) of$5,187,750. The covered payroll(annual payroll of active employees covered by the plan)was approximately $33,775,619 and the ratio of the UAAI, to covered payroll was 15%. As of June 30, 2017, 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 occurrence of events far into the fubxre. Examples include assumption about future employment, mortality, and the health care cost trend. Actuarially deterxnined amounts are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as Required Supplementary Inforxnation in the section following the Notes to Financial Statements, presents multiyear trend information about whether the acbxarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Projections of benefits for financial reparting purposes are based on the plan as understood by the employer and the plan members and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in acbxarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. As of the July 1, 2016 actuarial valuation date, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 4.5% discount rate based on the City's funding policy. The projected annual medical trend rate (inflation rate) is 7%. The ultimate medical trend rate is 5% beginning in year 2027. The underlying inflation rate is 3%. Mortality rates are from the RP2014 Group Annuity Mortality Tables, applied on a gender-specific basis. Annual retirement and terxnination probabilities were developed consistent with the City's experience and the IPERS and MFPRSI retirement patterns. Annual bxrnover rates were based on Scale T-2 of the actuary's pension handbook. Projected claim costs of the medical plan are $11,955-$17,015 per year for retirees depending on the age of retiree. The UAAI, is being amortized as a level percentage of pay on an open basis over 30 years. sz CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 11—EMPLOYEE PENSION PLANS Iowa Public Employees Retirement System IPERS Plan Descrivtion—IPERS membership is mandatory for employees of the City, except far 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 Iowa Public Employees' Retirement System (IPERS). IPERS issues a stand-alone financial report which is available to the public by mail at 7401 Register Drive P.O. Box 9117, Des Moines, Iowa 50306-9117 or at www.ipers.or¢. IPERS benefits are established under Iowa Code chapter 97B and the administrative rules thereunder. Chapter 97B and the administrative rules are the official plan documents. The following brief description is provided for general informational purposes only. Refer to the plan documents for more information. Pension Benefits — A Regular member may retire at norxnal retirement age and receive monthly benefits without an early-retirement reduction. Norxnal retirement age is age 65, anytime 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 forxnula 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, except members with service before June 30, 2012 will use the highest three-year average salary as of that date if 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%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%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 far the rest of the member's lifetime. However, to combat the effects of inflation, retirees who began receiving benefits priar to July 1990 receive a guaranteed dividend with the regular November benefit payments. 93 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 11—EMPLOYEE PENSION PLANS (continued) Disabilitv 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 forxnula, whichever is greater. When a member dies after retirement, death benefits depend on the benefit option the member selected at retirement Contributions - Contribution rates are established by IPERS following the annual actuarial valuation, which applies IPERS' Contribution Rate Funding Policy and Actuarial Amortization Method. State statute limits the amount rates can increase or decrease each year to 1 percentage point. IPERS Contribution Rate Funding Policy requires that the acbxarial contribution rate be deterxnined using the "enh-y age norxnal" actuarial cost method and the actuarial assumptions and methods approved by the IPERS Investment Board. The acbxarial contribution rate covers normal cost plus the unfunded actuarial liability payment based on a 30-year amartization period. The payment to amortize the unfunded actuarial liability is determined as a level percentage of payroll, based on the Actuarial Amortization Method adopted by the Investment Board. In fiscal year 2017, pursuant to the required rate, regular members contributed 5.95%of covered payroll and the City contributed 8.93%for a total rate of 14.88%. The City's total contributions to IPERS far the year ended June 30, 2017 were $2,227,787. The Dubuque Metropolitan Area Solid Waste Agency's total contributions to IPERS far the year ended June 30, 2017 were $61,413. Citv Specific IPERS Disclosures Net Pension Liabilities. Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2017, the City reported a liability of $21,570,715 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was deterxnined 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 IPERS relative to the contributions of all IPERS participating employers. At June 30, 2016, the City's collective proportion was .34274%which was a decrease of 0.0086%from its proportion measured as of June 30, 2015. For the year ended June 30, 2017, the City recognized pension expense of$2,405,785. At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: sa CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 11—EMPLOYEE PENSION PLANS (continued) Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $ 190,637 $ 257,430 Changes of assumptions 329,102 - Net difference between projected and acbxal 3,073,057 - earnings on IPERS' investxnents Changes in propartion and differences between City's contributions and City's propartionate share of contributions 45,020 599,318 City contributions subsequent to the measurement date 2,227,787 - Total $ 5,865,603 $ 856,748 $2,227,787 reported as deferred outflows of resources related to pensions resulting from the City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended June 30 Total 2018 $ 263,158 2019 263,158 2020 1,454,079 2021 831,207 2022 (30,534) $ 2,781,068 Sensitivitv of the Citv's Provortionate Share of the Net Pension Liabilitv to Chanees in the Discount Rate- The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.50%, 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 1.00%lower(6.50%) or 1.00%higher(8.50%) than the current rate. ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 11—EMPLOYEE PENSION PLANS (continued) 1% Discount 1% Decrease Rate Increase (6.5%) (7.5%) (8.5%) City's propartionate share of the net pension liability: $ 34,897,492 $ 21,570,094 $ 10,321,594 Dubuque Metropolitan Area Sold Waste Aaencv Specific(DMASWA) IPERS Disclosures Net Pension Liabilities. Pension Exvense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2017, the DMASWA reported a liability of$594,618 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was deterxnined by an actuarial valuation as of that date. The DMASWA's proportion of the net pension liability was based on the DMASWA's share of contributions to the pension plan relative to the contributions of all IPERS participating employers. At June 30, 2017, the DMASWA's collective propartion was 0.009672%which was a decrease of 0.000057%from its proportion measured as of June 30, 2015. Far the year ended June 30, 2017, the DMASWA recognized pension expense of$66,320. At June 30, 2017, the DMAS WA reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actualexperience $ 5,255 $ 7,097 Changes of assumptions 9,072 - Net difference between projected and actual 84,714 - earnings on IPERS' investxnents Net changes in proportion and differences between City's contributions and City's propartionate share of contributions 1,241 16,521 City contributions subsequent to the measurement date 61,413 - Total $ 161,695 $ 23,618 ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 11—EMPLOYEE PENSION PLANS (continued) $61,413 reported as deferred outflows of resources related to pensions resulting from the Agency contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. 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 June 30 Total 2018 $ 7,247 2019 7,247 2020 40,042 2021 22,890 2022 (762) $ 76,664 Sensitivity of the A¢enc, '�portionate Share of the Net Pension Liability to Chan¢es in the Discount Rate - The following presents the Agency's proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the Agency's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1.00%lower(6.50%) or 1.00%higher (8.50%)than the current rate. 1% Discount 1% Decrease Rate Increase (6.50%) (7.50%) (8.50%) Agency's propartionate share of the net pension liability: $ 962,010 $ 594,618 $ 284,533 There were no non-employer contributing entries at IPERS. Acbxarial Assumptions - The total pension liability in the June 30, 2016, acbxarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Rate of inflation 3.00%per annum (effective June 30, 2014) Rates of salary increase 4.00%to 17.00%, average, including inflation. (effective June 30, 2010) Rates vary by membership group. Long-term Investment rate of return 7.50%, compounded annually,net of inveshnent (effective June 30, 199� expense, including inflation. Wage Growth 4.00%per annum based on 3.00% (effective June 30, 1990) inflation and 1.00%real wage inflation s� CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 11—EMPLOYEE PENSION PLANS (continued) The actuarial assumptions used in the June 30, 2016 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. The long-term expected rate of return on IPERS'was determined using a building-block method in which best-estimate ranges of expected future real rates (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-terxn expected rate of return by weighting the expected future real rates of rebxrn 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 Long-Term Expected Asset Class Allocation Real Rate of Rebxrn Core Plus Fixed Income 28 % 1.90% Domestic Income 24 5.85 International Equity 16 6.32 Private Equity/debt 11 10.31 Real Estate 8 3.87 Credit Opportunities 5 4.48 TIPS 5 1.36 Other Real Assets 2 6.42 Cash 1 (0.26) Total 100 % Discount Rate - The discount rate used to measure the total pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the contractually required rate and that contributions from the City will be made at contractually required rates, acbxarially determined. Based on those assumptions, the IPERS' fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of rebxrn on IPERS' investments was applied to all periods of projected benefit payments to determine the total pension liability. IPERS' Fiduciary Net Position - Detailed information about the pension plan's fiduciary net position is available in the separately issued IPERS financial report which is available on IPERS' website at www.ivers.or¢. Pavables to IPERS -At June 30, 2017,the City reported payables to the defined benefit pension plan of $30,640 for legally required employer contributions. There were no legally required employee contributions which had been withheld from employee wages but not yet remitted to IPERS. sa CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 11—EMPLOYEE PENSION PLANS (continued) Municipal Fire and Police Retirement System of Iowa(MFPRSI) Plan Description—MFPRSI membership is mandatory for fire fighters and police officers covered by the provisions of Chapter 411 of the Code of Iowa. Employees of the City are provided with pensions through a cost-sharing multiple employer defined benefit pension plan administered by MFPRSI. MFPRSI issues a stand-alone financial report which is available to the public by mail at 7155 Lake Drive, Suite#201, West Des Moines, Iowa 50266 or at www.mfprsi.ore. 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 inforxnational 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,far 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% of the member's average final compensation. Members who perform more than 22 years of service receive an additional 2%of the member's average final compensation 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%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 wark. 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. Disabilitv and Death Benefits — Disability benefits may be either accidental or ordinary. Accidental disability is defined as a permanent disability incurred in the line of duty, with benefits equivalent to the greater of 60% of the member's average final compensation ar 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%of the member's average final compensation far those with 5 or more years of service or the member's service retirement benefit calculation amount and 25% of average final compensation for those with less than 5 years of service. ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 11—EMPLOYEE PENSION PLANS (continued) Death benefits are similar to disability benefits. Benefits for accidental death are 50%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%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% 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. Contributions -Member contribution rates are set by state statute. In accordance with Chapter 411 of the Code of Iowa, the contribution rate was 9.40% of earnable compensation far the year ended June 30, 2017. Employer contribution rates are based upon an actuarially deterxnined normal contribution rate and set by state statute. The required actuarially deterxnined 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 norxnal contribution rate is provided by state stabxte to be the acbxarial liabilities of the plan less current plan assets, with such total divided by 1% of the actuarially determined present value of prospective future compensation of all members, further reduced by member contributions and state appropriations. Under the Code of Iowa the employer's contribution rate cannot be less than 17.00% of earnable compensation. The contribution rate was 25.92%far the year ended June 30, 2017. The City's contributions to MFPRSI far the year ended June 30, 2017 was $3,512,627. If approved by the state legislature, state appropriation may further reduce the employer's contribution rate, but not below the minimum stabxtory 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 Reparting for Pension Plans, (GASB 67). There were no state appropriations to MFPRSI during the fiscal year ended June 30, 2017. Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2017, the City reported a liability of $30,970,956 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the new pension liability was deterxnined by an 100 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 11—EMPLOYEE PENSION PLANS (continued) actuarial valuation as of that date. The City's propartion 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, 2016, the City's proportion was 4.953285% which was a decrease of 0.0322% from it proportions measured as of June 30, 2015. Far the year ended June 30, 2017, the City recognized pension expense of$4,100,603. At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Net difference between expected and $ 799,321 $ 28,722 actual experience Changes of assumptions 1,307,611 424,218 Net difference between projected and actual earnings on pension plan investments 5,476,383 - Changes in propartion and differences between - 494,947 City contributions and proportionate share of contributions City contributions subsequent to the 3,512,627 - measurement date Total $ 11,095,942 $ 947,887 $3,512,627 is reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2018. Amounts reparted as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended June 30 Total 2018 $ 983,506 2019 983,506 2020 3,020,676 2021 1,740,466 2022 (92,726) $ 6,635,428 101 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 11—EMPLOYEE PENSION PLANS (continued) Actuarial Assumptions: The total pension liability in the June 30, 2016 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Rate of inflation 3.00%per annum Rates of salary increase 4.50%to 15.00%percent, including inflation. Inveshnent rate of return 7.50%,net of pension plan investment expense, including inflation The actuarial assumptions used in the June 30, 2016 valuation were based on the results of an actuarial experience study for the period from July 1, 2002 to June 30, 2012. Postretirement mortality rates were based on the RP-2000 Blue Collar Combined Health Mortality Table with males set-back two years, females set-forward one year and disabled individuals set-forward one year(male only rates), with no projection of future mortality improvement. The long-term expected rate of return on MFPRSI investxnents 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 rebxrn by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The best estimates of geometric real rates of return for each major asset class are summarized in the following table: Long-Terxn Expected Asset Class Real Rate of Return Large cap 6.0% Small cap 5.8 International large cap 7.0 Emerging markets 8.8 Emerging markets debt 6.5 Private non-core real estate 9.3 Master limited partnerships 8.5 Private equity 9.8 Core plus fixed income 3.8 Private core real estate 6.8 Treasury inflation protected securities 2.8 Tactical asset allocation 6.0 102 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 11—EMPLOYEE PENSION PLANS (continued) Discount Rate - The discount rate used to measure the total pension liability was 7.50%. The projection of cash flows used to deterxnine the discount rate assumed employee contributions will be made at the contractually required rates, actuarially determined. Based on those assumptions, MFPRSI fiduciary net position was projected to be available to make all projected future benefit payments to current active and inactive employees. Therefore, the long-term expected rate of rebxrn on MFPRSI investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivitv of Citv's Provortionate Share of the Net Pension Liabilitv to Chanees in the Discount Rate - The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the city's propartionate share of the net pension liability would be if it were calculated using a discount rate that is 1.00% lower (6.50%) or 1.00%higher (8.50%) than the current rate. 1% Discount 1% Decrease Rate Increase (6.50%) (7.50%) (8.50%) City's proportionate share of the net pension liability: $ 48,607,343 $ 30,970,956 $ 16,283,608 MFPRSI Fiduciary Net Position - Detailed information about the pension plan's fiduciary net position is available in the separately issued MFPRSI financial repart which is available on MFPRSPs website at www.mfprsi.ore. Pavables to MFPRSI -At June 30, 2017, City of Dubuque, Iowa reparted payables to the defined benefit pension plan of $78,684 for legally required employer contributions. There were no legally required employee contributions which had been withheld from employee wages but not yet remitted to MFPRSI. 103 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 12—LANDFILL CLOSURE AND POST CLOSURE CARE To comply with federal (40 CFR 258.74) and state regulations (IAC 113.14 (455b)), the Dubuque Metropolitan Area Solid Waste agency (DMASWA) is required to complete a closure and post-closure plan and to provide funding necessary to effect that plan, including the proper monitoring and care of the landfill after closure. Once the landfill is no longer accepting waste and is closed, the owner is responsible for maintaining the final cover, monitoring ground water and methane gas, and collecting leachate (the liquid that drains out of waste)far thirty years. State governxnents are primarily responsible for implementation and enforcement of those requirements and have been given flexibility to tailor requirements to accommodate local conditions that exist. A variety of financial mechanisms can be used to demonstrate compliance with federal and state financial assurance rules. The Agency utilizes the dedicated fund mechanism, which is funded through the tipping fees it receives. The Agency files and annual repart with the State to provide compliance with its legal requirements of maintaining a balance per the prescribed forxnula. Any adjustxnents to the account are made prior to June 30. The Agency is required to estimate total landfill closure and post-closure care costs and recognize a portion of these costs each year based on the percentage of estimated total landfill capacity used that period. Estimated total costs, for closure and post-closure, would consist of four components: (1) the cost of equipment and facilities used in post-closure monitoring and care, (2) the cost of final cover (material and labor), (3) the cost of environxnental monitoring of the landfill during the post-closure period and (4)the cost of any environxnental cleanup required after closure. Estimated total cost is based on an engineer's estimate far these services is required to be updated annually for changes due to inflation or deflation, technology, and/or changes to applicable laws or regulations. The Agency's estimated closure and post-closure care expected costs are as follows: 2017 Closure $ 2,264,840 Post-closure care 2,265,000 Totals $ 4,529,840 The total closure and post-closure care costs far the DMASWA has been estimated at approximately $4,529,840 as of June 30, 2017, and the portion of the liability, that has been recognized is $3,705,392. This liability represents the cumulative amount reported to date based on the use of 100% of the estimated capacity of cells 1, 2, 3, 4, 5, 6, 7 and 8, and 85% of cell 9 Phase 1 and 44% of cell 9 Phase 2. The Agency has accumulated resources to fund closure and post-closure costs; they are included in assets whose use is limited on the balance sheet and total $4,457,840 as of June 30, 2017. The Agency will recognize the remaining estimated cost of closure and post closure care of$824,448 over the estimated remaining life of 22 years as the remaining capacity is filled. NOTE 13—LEASES WHERE CITY IS LESSOR The City of Dubuque leases riverfront property, airpart property (hangars and terminal space), farxn land, parking areas, space for antennas on top of water towers, and concession areas under operating leases. The most significant lease is the lease of the greyhound racing and gambling facility and related parking area to the Dubuque Racing Association (DRA). The City's cost of the leased DRA assets total $10,144,771. The carrying amount of the assets at June 30, 2017 is $6,299,355, with $142,423 of depreciation expense during the year ended June 30, 2017. The DRA lease amount is based on the association's gross gambling receipts. During the year ended June 30, 2017,the DRA lease generated $4,843,286 in lease revenue. 104 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 14—SUBSEQUENT EVENTS On August 31, 2017, the City sold 30.67 acres of industrial land to Dubuque County in order to help Flexsteel build a $25 million plant. Dubuque Initiatives will accept ownership of Flexsteel's existing 100-plus-year-old facility at 3400 Jackson St., demolish all strucbxres and redevelop the site. The city would contribute up to $660,000 far this process, which includes environxnental cleanup. City officials also will provide tax-increment-financing rebates to Flexsteel of up to $4.1 million over 10 years. The city also will provide 10 years of TIF rebates for any new development at Flexsteel's current site on Jackson St. In total, Flexsteel would receive more than $10.2 million worth of state and local incentives in exchange for retaining at least 200 of 218 local jobs. Flexsteel broke ground on their new facility in early October, 2017. On September 22, 2017, the City drew down $1.27M of State Revolving Loan Fund (SRF) proceeds. This was in relation to the Bee Branch Creek Restoration project. On July 5, 2017 complete action was taken on a $3.498 million Sewer Utility Revenue Capital Loan SRF Note. The Note will carry an annual 1.75%interest rate for 20 years, with an annual servicing fee of 0.25%. There is also a one time upfront loan origination fee of 0.5%. The loan funds will be used to pay costs of acquisition, construction, reconstruction, extension, improvement, and equipping all or part of the Municipal Sewer System, including those costs associated with Kerper Boulevard Sanitary Sewer reconstruction project. On August 21, 2017, complete action was taken on a $1.4 million SRF sponsorship project used to fund improvements within the Catfish Creek Watershed. This sponsorship project is funded by a reduction in interest on the Stormwater Utility Revenue Capital Loan Note, Series 2015B. On September 5, 2017, complete action was taken on a $475,000 Water Revenue Capital Loan SRF Note. The proceeds of which will be used to fund The note carries a 0%interest rate for up to three years and has no initiation or servicing fees. The loan may be rolled into an SRF Construction Loan or repaid when perxnanent financing is available. On August 21, 2017, council authorized the submittal of a Clean Water State Revolving Fund (SRF) Sponsorship Project application to the Iowa Deparhnent of Nabxral Resources to secure funding far the Eagle Point Park Environxnenta l Restoration Proj ect for $320,000. NOTE 15—PROSPECTIVE ACCOUNTING PRONOUNCEMENTS The Governxnental Accounting Standards Board (GASB) has issued seven statements not yet implemented by the City. The statements which might impact the City are as follows: Statement No. 75, Accounting and Financial Reparting for Postemployment Benefits Other Than Pension Plans, issued June 2015, will be effective for the fiscal year ending June 30, 2018. The objective of this Statement is to improve the accounting and financial reporting of governments for postemployment benefits other than pensions. This Statement replaces Statement 45 and 57. Statement No. 81 , lrrevocable Split-lnterest Agreements, will be effective far the fiscal year ending June 30, 2018. The objective of this statement is to improve accounting and financial reparting for irrevocable split-interest agreements by providing recognition and measurement guidance for situations in which a government is a beneficiary of the agreement. 105 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2017 NOTE 15—PROSPECTIVE ACCOUNTING PRONOUNCEMENTS (continued) Statement No. 83, Certain Asset Retirement Obligations, will be effective far the fiscal year June 30, 2019. The objective of this Statement is to address accounting and financial reparting for certain asset retirement obligations (ARO). The Statement establishes criteria for determining the timing and pattern of recognition of a liability and a corresponding deferred outflow of resources for AROs. Statement No. 84, Fiduciary Activities, will be effective far the fiscal year June 30, 2020. The objective of this Statement is to improve guidance regarding the identification of certain fiduciary activities for accounting and reporting purposes and how those activities should be reported. Statement No. 85, Omnibus 2017, will be effective for the fiscal year June 30, 2018. The objective of this Statement is to address practice issues that have been identified during implementation and application of certain GASB Statements, The Statement addresses a variety of topics including issues related to blending component units, goodwill, fair value measurement and application, and postemployment benefits (pensions and other postemployment benefits [OPEB]). Statement No. 86, Certain Debt Extinguishxnent issues, will be effective far the fiscal year June 30, 2018. The objective of this Statement is to improve consistency in accounting and financial reporting for in-substance defeasance of debt by providing guidance for transactions in which cash and other monetary assets acquired with only existing resources, resources other than the proceeds of refunding debt, are placed in an irrevocable trust for the sole purpose of extinguishing debt. Statement No. 87, Leases, will be effective far the fiscal year June 30, 2021. The objective of this Statement is to better meet the information needs of financial statements users by improving accounting and financial reporting for leases by governxnents. The City's management has not yet determined the effect these statements will have on the City's financial statements. NOTE 16—TAX ABATEMENTS Governmental Accounting Standards Board Statement No. 77 defines tax abatements as a reduction in tax revenues that results from an agreement between one or more governments and an individual or entity in which (a) one or more governxnents promise to forgo tax revenues to which they are otherwise entitled and (b) the individual or entity promises to take a specific action after the agreement has been entered into that contributes to economic development or otherwise benefits the governments ar the citizens of those governments. Citv Tax Abatements The City provides tax abatements for urban renewal and economic development projects with tax increment financing as provided for in Chapter 15A and 403 of the Code of Iowa. Far these types of projects, the City enters into agreements with developers which require the City, after developers meet the terxns of the agreements, to rebate a portion of the properly tax paid by the developers, to pay the developers an economic development grant ar to pay the developers a predetermined dollar amount. No other commitments were made by the City as a part of these agreements. Far the year ended June 30, 2017, the City abated $3,576,245 of property tax under the urban renewal and economic development projects. 106 Required Supplementary Information June 30, 2017 City of Dubuque, Iowa 107 CITY OF DUBUQUE, IOWA SCHEDULE OF RECEIPTS, DISBURSEMENTS AND CHANGES IN BALANCES - BUDGET AND ACTUAL (BUDGETARY BASIS) GOVERNMENTAL AND ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30,2017 Budgeted Amounts Final to Actual Actual OriQinal Final Variance RECEIPTS Propertytax $ 23,858,828 $ 25,555,634 $ 25,555,634 $ (1,696,806) TaYincrementfinancing 10,937,338 11,112,649 11,112,649 (175,311) OtherCitytax 12,684,826 18,106,679 17,733,819 (5,048,993) Licenses and peimits 6,601,853 1,505,981 1,531,981 5,069,872 Use of money and property 14,561,637 12,893,350 12,978,348 1,583,289 Intergovemmental 45,547,612 34,561,978 76,358,430 (30,810,818) Charges for fees and service 37,545,385 59,462,089 59,404,187 (21,858,802) Special assessments 309,184 - - 309,184 Miscellaneous 9,643,090 1,705,918 2,278,940 7,364,150 Total Receipts 161,689,753 164,904,278 206,953,988 (45,264,235) EXPENDITURES Publicsafety 29,197,602 29,240,936 29,552,449 354,847 Public works 11,547,440 13,514,802 14,399,227 2,851,787 Health and social services 943,286 994,825 989,508 46,222 Culture and recreation 11,580,800 11,967,321 12,526,578 945,778 Community and economic development 14,847,815 14,203,680 14,359,577 (488,238) Generalgovemment 8,926,106 9,131,313 9,482,984 556,878 Debt service 22,293,960 10,088,563 21,787,938 (506,022) Capitalprojects 27,904,170 27,315,838 80,705,559 52,801,389 Business-type activities 64,269,682 68,698,070 1OQ081,981 35,812,299 Total Expenditures 191,510,861 185,155,348 283,885,801 92,374,940 EXCESS (DEFICIENCY)OF RECEIPTS OVER(UNDER)EXPENDITURES (29,821,108) (20,251,070) (76,931,813) 47,110,705 OTHER FINANCING SOURCES,NET 30,942,315 14,996,651 39,380,222 (8,437,907) EXCESS DEFICIENCY OF RECEIPTS AND OTHER FINANCING SOURCES OVER (UNDER)EXPENDITURES AND OTHER FINANCING USES 1,121,207 (5,254,419) (37,551,591) 38,672,798 BALANCE,BEGINNING OF YEAR 71,419,657 29,641,135 75,864,384 - BALANCE,ENDING OF YEAR $ 72,540,864 $ 24,386,716 $ 38,312,793 $ 38,672,798 See Notes to Requued Supplementary Information. 108 CITY OF DUBUQUE, IOWA NOTE TO REQUIRED SUPPLEMENTARY INFORMATION—BUDGETARY REPORTING FOR THE YEAR ENDED JUNE 30,2017 The budgetary comparison is presented as Required Supplementary Information in accordance with Governmental Accounting Standards Board Statement No. 41 for governments with significant budgetary perspective differences resulting from not being able to present budgetary comparisons far the General Fund and each major Special Revenue Fund. The Code of Iowa requires the adoption of an annual budget by the City Council on or before March 15 of each year which becomes effective July 1 and constitutes the appropriation for each function specified therein until amended. The legal level of control(the level on which expenditures may not legally exceed appropriations) is the function level far the City as a whole, rather than at the fund or fund type level. The internal service fund or agency fund activity is not included in the adopted budget. The City's budget is prepared on the cash basis of accounting with an adjustment for accrued payroll following required public notice and hearings. After the initial annual budget is adopted, it may be amended for specified purposes. Budget amendments must be prepared and adopted in the same manner as the original budget. Management is not authorized to amend the budget ar to make budgetary transfers between functions without the approval of the City CounciL Management may make budgeting transfers between funds as long as the transfers are within the same function. The City has adopted a policy relative to budgetary control and amendment which provides for control at the line-item level and review of the current year's budget at the time the next year's budget is prepared. This usually results in amending the appropriations of all functions to adjust to current conditions. Supplemental appropriations are only provided when unanticipated revenues or budget surpluses become available. Appropriations as adopted lapse at the end of the fiscal year. The budget for the fiscal year ended June 30, 2017, was amended two times during the year to allow the City to increase function expenditures by $98,730,453 primarily far the carry-forward of unfinished capital improvement projects. During the year ended June 30, 2017, expenses for community and economic development and debt service exceeded the budgeted amount. The following is a reconciliation of the budgetary basis to the modified accrual basis of accounting: 6ovemmevtel Evteiprise ModiSed Fwds NLnds B�dgetery Accrual Accrual/Accr�al ModiSed Accrual Ba9s Adj�strnevts Basis Accr�alBasis Ba9s Total ReceiplsBevev�e $ 161,689,]53 $ (20,34],6]4) $ 141,342,0]9 $ 106,265,]36 $ 35,0]6,343 $ 141,342,0]9 Er.penAtures/Er.penses 191,S1Q861 (3Q]13y45) 151,]96y16 115,36]y13 36,429,003 151,]96y16 DeSQevcy ofReceiplsBevev�e UvdecEr.penAtures/Er.penses (29,821,108) 19,366,2]1 (10,454,83]) (9,102,1]]) (1,352,660) (10,454,83]) ONer Fivavcivg Sources 30y42,315 (4,819,6]5) 26,122,640 10,890,65] 15,231y83 26,122,640 Net 1,121,20] 14,546,596 15,66],803 1,]88,480 13,8]9,323 15,66],803 Balavice,Begivnivg �1,419,65] 140,435,390 211,855,04] 53,612,468 158,242,5]9 211,855,04] Balavice,EvAvg $ �2,540,864 $ 154y81y86 $ 22],522,850 $ 55,400y48 $ 1]2,121y02 $ 22],522,850 109 CITY OF DUBUQUE, IOWA SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF NET PENSION LIABILITY IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEM LAST THREE FISCAL YEARS* (IN THOUSANDS) Required Supplementary Information 2017 2016 2015 City's proportion of the net pension liability(asset) 0.34275 % 0.35135 % 0.37035 % City's proportionate share of the net pension liability $ 21,570 $ 17,358 $ 14,688 City's covered payroll $ 24,597 $ 24,039 $ 24,210 City's proportionate share of the net pension liability as a percentage of its covered payroll 87.69 % 72.21 % 60.67 % Plan fiduciary net position as a percentage of the total 81.82 % 85.19 % 87.61 % pension liability *In accordance with GASB Statement No. 68,the amounts presented for each fiscal year were determined as of June 30 of the preceeding fiscal year. Note: GASB Statement No. 68 requires ten years of inforxnation to be presented in this table. However, until a full 10-year trend is compiled, the City will present information far those years for which inforxnation is available. 110 CITY OF DUBUQUE, IOWA SCHEDULE OF THE CITY CONTRIBUTION IOWA PUPLIC EMPLOYEES RETIREMENT SYSTEM LAST 10 FISCAL YEARS (IN THOUSANDS) Required Supplementary Information 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Statutorilyrequiredconhibution $ 2,229 $ 2,196 $ 2,151 $ 2,164 $ 2,022 $ 2,022 $ 1,573 $ 1,415 $ 1,275 $ 1,164 Contdbutions in relation to the statutorilyrequiredconhibution 2,229 2,196 2,151 2,164 2,022 2,022 1,573 1,415 1,275 1,164 Contdbution deficiency(excess) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - City'scoveredpayroll $ 24,961 $ 24,597 $ 24,039 $ 24,210 $ 23,321 $ 23,676 $ 22,627 $ 21,275 $ 20,071 $ 19,246 Conhibutions as a percentage of covered-employee payroll 8.93 % 8.93 % 8.95 % 8.94 % 8.67 % 8.07 % 6.95 % 6.65 % 635 % 6.05 % CITY OF DUBUQUE, IOWA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION--PENSION LIABILITY IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEMS YEAR ENDED JUNE 30,2017 Changes of benefit terms: Legislation passed in 2010 modified benefit terms for current Regular members. The definition of final average salary changed from the highest three to the highest five years of covered wages. The vesting requirement changed from four years of service to seven years. The early retirement reduction increased from 3%per year measured from the member's first unreduced retirement age to a 6%reduction for each year of retirement before age 65. Legislative action in 2008 transferred four groups - emergency medical service providers, county jailers, county attorney investigators, and National Guard installation security officers - from Regular membership to the protection occupation group for future service only. Changes of assumption: The 2014 valuation implemented the following refinements as a result of a quadrennial experience study: • Decreased the inflation assumption from 3.25%to 3.00%. • Decreased the assumed rate of interest on members account from 4.00%to 3.75%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 martality assumptions. • Modified retirement rates to reflect fewer retirements. • Lowered disability rates at most ages. • Generally increased the probability of terminating members receiving a deferred retirement benefit. • Modified salary increase assumptions based on various service duration. 112 CITY OF DUBUQUE, IOWA SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF NET PENSION LIABILITY MUNICIPAL FIRE AND POLICE RETIREMENT SYSTEM OF IOWA LAST THREE FISCAL YEARS* (IN THOUSANDS) Required Supplementary Information 2017 2016 2015 City's proportion of the net pension liability(asset) 4.9533 % 4.9854 % 5.0788 % City's proportionate sktare of the net pension liability $ $30,971 $ 23,423 $ 18,410 City's covered payroll $ $ 13,423 $ 13,052 $ 12,968 City's proportionate sktare of the net pension liability as a percentage of its covered payroll 230.73 % 179.46 % 141.96 % Plan fiduciary net position as a percentage of the total pension liability 7820 % 83.04 % 8627 % *In accordance with GASB Statement No. 68,the amounts presented for each fiscal year were determined as of June 30 of the preceeding fiscal year. Note: GASB Statement No. 68 requires ten years of inforxnation to be presented in this table. However, until a full 10-year trend is compiled, the City will present inforxnation for those years for which he inforxnation is available. 113 CITY OF DUBUQUE, IOWA SCHEDULE OF THE CITY CONTRIBUTION MUNICIPAL FIRE AND POLICE RETIREMENT SYSTEM OF IOWA LAST 10 FISCAL YEARS (IN THOUSANDS) Required Supplementary Information 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Statutorilyrequiredconhibution $ 3,513 $ 3,727 $ 3,969 $ 3,906 $ 3,310 $ 3,177 $ 2,404 $ 1,966 $ 2,078 $ 2,632 Contdbutions in relation to the statutorilyrequiredconhibution 3,513 3,727 3,969 3,90 3,310 3,17 2,404 1,966 (2,078) 2,632 Contdbution deficiency(excess) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - City'scoveredpayroll $ $ 13,552 $ 13,423 $ 13,052 $ 12,968 $ 12,672 $ 12,831 $ 12,080 $ 11,565 $ 11,083 $ 1Q330 Conhibutions as a percentage of covered pa}+toll 25.92 % 27.77 % 30.41 % 30.12 % 26.12 % 24.76 % 19.90 % 17.00 % 18.75 % 25.48 A CITY OF DUBUQUE, IOWA NOTES TO REQUIRED SUPPLEMNATRY INFORMATION--PENSION LIABILITY MUNICIPAL FIRE AND POLICE RETIREMENT SYSTEM OF IOWA YEAR ENDED JUNE 30,2017 ChanQes of benefit terms: There were no significant changes of benefit terms. ChanQes of assumptions Postretirement mortality changed to the RP-2000 Blue Collar Combined Healthy Martality Table with males set-back two years,females set-forward one year and disableds set-forward one year(male only rates),with no projection of fubxre mortality improvement. 115 CITY OF DUBUQUE, IOWA SCHEDULE OF FUNDING PROGRESS FOR THE RETIREE BENEFIT PLAN(OPEB) FOR THE YEAR ENDED JUNE 30,2017 Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Yeu Actuarial Value of Liability AAI, Funded Covered of Covered Ended Valuation Assets (AAI,) (UAAI,) Ratio Payroll Payroll June 30 Date (a) (b) (b-a) (a/b) (c) (b-a/c) 2014 7/1/2012 $ - $ 5,720,577 $ 5,720,577 - % $ 32,626,573 17.43 % 2016 7/1/2014 - 4,550,896 4,550,896 - 32,126,628 14.17 2017 7/1/2016 - 5,187,750 5,187,750 - 33,775,619 1536 116 THIS PAGE IS INTENTIONALLY LEFT BLANI� 117 NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Road Use Tax Fund — This fund is used to account for state revenues allocated to the City for maintenance and improvement of City streets. Section VIII Housing Fund—This fund is used to account far the operations of federal Section VIII existing,voucher, and moderate rehabilitation projects. Employee Benetits Fund — This fund is used to account for pension and related employee benefit costs for those employees paid wages from the General Fund. Special Assessments Fund —This fund is used to account far the financing of public improvements that are deemed to benefit primarily the properties against which special assessments are levied and to accumulate monies far the payment of principal and interest on the outstanding long-term debt service. Cable TV Fund — This fund is used to account far the monies and related costs as set forth in the cable franchise agreement between the City of Dubuque and the cable franchisee. Library Expendable Gifts Trust — This fund is used to account for contributions given to the library to be spent for specific purposes. IFA Housing Trust — This fund is used to account for funds received under the Iowa Finance Authority State Housing Trust Fund Program. Community Development Fund — This fund is used to account far the use of Community Development Block Grant funds as received from federal and state governxnental agencies. Police Expendable Gifts Fund — This fund is used to account for contributions given to the police department to be spent for specific purposes. 118 NONMAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS Capital projects funds are used to account far the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. Airport Construction Fund — This fund is used to account far the resources and costs related to airpart capital improvements. Sales Tax Construction Fund — This fund is used to account far the resources and costs related to capital improvements financed through the local option sales tax. General Construction Fund — This fund is used to account far the resources and costs related to general capital improvements. Street Construction Fund—This fund is used to accountfar the resources and costs related to street capital improvements. PERMANENT FUNDS Perxnanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal,may be used for purposes that suppart the reporting City's programs. Ella Lyons Peony Trail Trust Fund —This fund is used for dividends and maintenance cost related to the City Peony Trail,per trust agreement. Library Gifts Trust Fund—This fund is used to accountfar testamentary gifts to the City library. 119 CITY OF DUBUQUE,IOWA COMBINING BALANCE SHEET NONMAJORGOVERNMENTALFUNDS JUNE 3Q 2017 Special Revenue Funds Road Use SectionVIII Employee Tas Housing Benefits ASSETS Caeh and pooled cash inveetrneNs $ 4,376,199 $ 182,846 $ - Receivables Proper[ytax Delinquent - - 43,420 Succeedingyeu - - 4,49Q639 Accounts and other 2,549 53,441 - Special aseeeements - - - Accruedintereet - 283 - Notee - - - Inteigovemmental 746,732 - - Inventories 474,919 - - Prepaiditeme 8,476 37Q854 - Reetricted cash and pooled caeh inveetrnents 140,744 TotalAeeets $ 5,608,875 $ 748,168 $ 4,534,059 LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accountepayable $ 189,519 $ 179,391 $ - Accruedpayioll 56,624 2Q614 - Wergovemmentalpayable - 5,726 - Due to other fimde - - - Uneamed revenue 6,085 TotalLiabilitiee 246,143 211,816 DEFERREDINFLOWSOFRESOURCES Urtavailable revenues Succeedingyeupropertytas - - 4,49Q639 Special aseeeements - - - Gran[s - - - Other 8,316 Total Deferred Inflowe of Reeourcee 4,498,955 FUND BALANCES Nonspendable: Endowment corpus - - - Inventory 474,919 - - Prepaiditeme 8,476 37Q854 - Reetricted: Endowmen[s - - - Library - - - Police - - - Capital improvemeNs 4,879,337 - - Franchise agreement - - - Special aseeeements - - - Iowa Firtance Authority Truet - - - Communiry progiame - 165,498 - Employeebenefits - - 35,104 Committed,capital improvements TotalFundBalancee 5,362,732 536,352 35,104 Total Liabilitiee,Deferred Inflowe of Reeourcee and Fund Balancee $ 5,608,875 $ 748,168 $ 4,534,059 120 EXHIBIT A-1 Special Revenue Funde Capital Projects Funds Library Police IFA Special Expendable Expendable Housing Commuruty Auport General AeeeeemeNs Cable TV Gifte Trust Gifte Trust Trust Development Conetnution Conetruction $ - $ 437,797 $ 1,207,965 $ 38,470 $ 112,344 $ 2,653,474 $ - $ 64Q455 - 143,938 - - - - - - 797,921 - - - - - - - - 373 1,034 - - 21,116 1,134 177 - - - - 123,383 5,747,136 - 19,160 - - - - 59,940 513,884 1,764,917 34,002 - 17,192 - - - 4,003 - - 507,910 1,91Q397 2,792,903 $ 797,921 $ 599,300 $ 1,208,999 $ 38,470 $ 295,667 $ 9,447,523 $ 3,676,448 $ 3,486,697 $ - $ - $ 7,654 $ 17,500 $ - $ 336,123 $ 1,342,066 $ 359,697 - 12,809 - - - 27,806 - - - - - - - - 585,180 - 12,809 7,654 17,500 363,929 1,927,246 359,697 764,034 - - - - - - - - - - - - 26Q905 465,671 34,002 764,034 26Q905 465,671 34,002 - 17,192 - - - 4,003 - - - - 1,201,345 - - - - - - - - 20,970 - - - - - - - - - - 1,283,531 3,092,998 - 569,299 - - - - - - 33,887 - - - - - - - - - - - 295,667 - - - - - - - - 8,81$686 - - 33,887 586,491 1,201,345 2Q970 295,667 8,822,689 1,283,531 3,092,998 $ 797,921 $ 599,300 $ 1,208,999 $ 38,470 $ 295,667 $ 9,447,523 $ 3,676,448 $ 3,486,697 (Continued) 121 CITY OF DUBUQUE,IOWA EXHIBIT A-1 COMBINING BALANCE SHEET (CONTINUED) NONMAJORGOVERNMENTALFUNDS JUNE 3Q 2017 CapitalProjecteFunde PermanentFunde Total EllaLyons Library Nonntajor Salee Tas Street Peony Trail Gifte Govemmental Conetnution Conetnution Trust Trust Funde ASSETS Caeh and pooled cash inveetrneNs $ 3,373,486 $ 1,301,011 $ - $ - $ 14,324,047 Receivables Proper[ytax Delinquent - - - - 43,420 Succeedingyeu - - - - 4,49Q639 Accountsandother - 7,136 - - 207,064 Special aseeeements - - - - 797,921 Accruedintereet 3,537 921 44 16 28,635 Notee 657,518 - - - 6,547,197 Inteigovemmental 193,806 3,567,439 - - 6,880,720 Inventories - - - - 474,919 Prepaiditems - - - - 400,525 Reetrictedcashandpooledcaehinveetrnents 909,490 151,377 18,406 6,431,227 TotalAeeets $ 5,137,837 $ 4,876,507 $ 151,421 $ 18,422 $ 4Q626,314 LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accountepayable $ 215,872 $ 846,938 $ - $ - $ 3,494,760 Accruedpayioll - - - - 117,853 Wergovemmentalpayable - - - - 5,726 Due to other fimde - - - - 585,180 Uneamed revenue 6,085 TotalLiabilitiee 215,872 846,938 4,209,604 DEFERREDINFLOWSOFRESOURCES Urtavailable revenues Succeedingyeupropertytas - - - - 4,49Q639 Special aseeeements - - - - 764,034 Grante 8,921 2,263,640 - - 3,033,139 Other - 86,819 - - 95,135 Total Deferred Inflowe of Reeourcee 8,921 2,35Q459 8,382,947 FUND BALANCES Nonspendable: Endowmentcorpue - - 57,412 12,000 69,412 Inventory - - - - 474,919 Prepaiditems - - - - 400,525 Reetricted: Endowmente - - 94,009 6,422 1OQ431 Library - - - - 1,201,345 Police - - - - 2Q970 CapitalimprovemeNs - - - - 9,255,866 Franchise agreement - - - - 569,299 Special aseeeements - - - - 33,887 Iowa Firtance Authority Truet - - - - 295,667 Communiryprogiame - - - - 8,984,184 Employeebenefits - - - - 35,104 Committed,capital improvements 4,913,044 1,679,110 6,592,154 TotalFundBalancee 4,913,044 1,679,110 151,421 18,422 28,033,763 Total Liabilitiee,Deferred Inflowe of Reeourcee and Fund Balancee $ 5,137,837 $ 4,876,507 $ 151,421 $ 18,422 $ 4Q626,314 122 THIS PAGE IS INTENTIONALLY LEFT BLANI� 123 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 3Q 2017 Special Revenue Funds Road Use SectionVIII Employee Tax Housing Benefits REVENUES Taxes $ - $ - $ 5,662,126 Special assessments - - - Intergovemmental 7,415,981 5,651,124 - Chugesforservices - - - Investrnenteunings - - - Conhibutions - 853 - Miscellaneous 12Q579 104,099 - TotalRevenues 7,536,560 5,756,076 5,662,126 EXPENDITURES Govemmental activities Current Public safety - - - Public works 5,377,480 - - Health and social services - - - Culture and recrea.tion - - - Community and economic development - 5,709,406 - General govemment - - 184 Capitalprojects 4,500 - - Total Expenditures 5,381,980 5,709,406 184 EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER)EXPENDITURES 2,154,580 46,670 5,661,942 OTHER FINANCING SOURCES (USES) Issuance of debt - - - Premium onbonds - - - Transfers in - 86,801 - T�ansf�s ouc �io9,s6a) - (s,6so,6s9� Insurance recovery - - - Sale of capital assets 500 - - Total Other Financing Sources(Uses) (109,064) 86,801 (5,650,689) NET CHANGE IN FUND BALANCES 2,045,516 133,471 11,253 FUND BALANCES,BEGINNING 3,317,216 402,881 23,851 FUND BALANCES,ENDING $ 5,362,732 $ 536,352 $ 35,104 124 EXHIBIT A-2 Special Revenue Funds Capital Projects Funds Library Police IFA Special Expendable Expendable Housing Community Airport General Assessments Cab1eTV Gifts Trust Gifts Trust Trust Development Construction Construction $ - $ - $ - $ - $ - $ - $ - $ - 261,233 - - - - - - - - - - - 216,320 2,686,016 3,122,952 - - - 7,898 - - 44,270 211,396 7 37,699 127 - - - 88,190 14,363 19,374 - - 432 81,067 - 55,269 - 5,240 3,881 577,724 185,544 - - 58,304 - 2,363 302,813 577,851 193,874 81,067 216,320 2,932,049 3,348,711 26,984 - - - 64,470 - - - - - 541 - - - 1Q000 - - - - 244,760 - - 123,139 - - - - - - 167,161 3,068,502 - - - 507,638 - - - - - - - - - - - - 2,471,016 3,493,540 - 508,179 244,760 64,470 167,161 3,201,641 2,471,016 3,493,540 302,813 69,672 (50,886) 16,597 49,159 (269,592) 877,695 (3,466,556) - - - 4,373 67,359 241,000 33Q444 1,246,131 �z99,isi� - - - - - �zoz,s6s� �zai,000� - - - - - 13Q854 - - (299,131) - - 4,373 67,359 371,854 127,579 1,005,131 3,682 69,672 (50,886) 20,970 116,518 102,262 1,005,274 (2,461,425) 3Q205 516,819 1,252,231 - 179,149 8,72Q427 278,257 5,554,423 $ 33,887 $ 586,491 $ 1,201,345 $ 20,970 $ 295,667 $ 8,822,689 $ 1,283,531 $ 3,092,998 (Continued) 125 CITY OF DUBUQUE,IOWA EXHIBIT A-2 COMBINING STATEMENT OF REVENUES, (CONTINUED) EXPENDITURES,AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 3Q 2017 Capital Projects Funds Permanent Funds Total EllaLyons Library Nonmajor SalesTax Sheet PeonyTrail Gifts Govemmental Construction Construction Trust Trust Fhnds REVENUES Taxes $ 1,778,010 $ 2,667,013 $ - $ - $ 1Q107,149 Special assessments - - - - 261,233 Intergovemmental 43,240 5,525,615 - - 24,661,248 Chugesforservices - 3,050 - - 266,621 Investrnenteunings 1Q429 3,363 - - 173,545 Conhibutions - - - - 142,861 Miscellaneous 1,045 26,125 - 229 1,079,893 TotalRevenues 1,832,724 8,225,166 - 229 36,692,550 EXPENDITURES Govemmental activities Current Public safety - - - - 64,470 Public works - - - - 5,377,480 Health and social services - - - - 1 Q541 Culture and recrea.tion - - 7,319 - 375,218 Community and economic development - - - - 8,945,069 General govemment - - - - 507,822 Capitalprojects 1,729,884 8,548,678 - - 16,247,618 Total Expenditures 1,729,884 8,548,678 7,319 - 31,528,218 EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER)EXPENDITURES 102,840 (323,512) (7,319) 229 5,164,332 OTHER FINANCING SOURCES (USES) Issuanceofdebt 23Q000 - - - 23Q000 Premium on bonds 5,298 - - - 5,298 Transfersin 28,198 125,172 - - 2,129,478 Transfers out (1,025,245) (334,461) - - (7,862,955) Insurance recovery - 26,312 - - 26,312 Sale of capital assets - 122,050 - - 253,404 Total Other Financing Sources(Uses) (761,749) (6Q927) - - (5,218,463) NET CHANGE IN FUND BALANCES (658,909) (384,439) (7,319) 229 (54,131) FUND BALANCES,BEGINNING 5,571,953 2,063,549 158,740 18,193 28,087,894 FUND BALANCES,ENDING $ 4,913,044 $ 1,679,110 $ 151,421 $ 18,422 $ 28,033,763 126 NONMAJOR ENTERPRISE FUNDS Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises --where the intent of the City Council is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or where the City Council has decided that periodic determination of net income is appropriate for accountability purposes. Refuse Collection Fund — This fund is used to account far the operations of the City's refuse collection services. Transit System Fund —This fund is used to account far the operations of the City's bus and other transit services. Salt Fund—This fund is used to account far the operations of the City's salt distribution. America's River Project—This fund is used to account for all projects covered by the Vision Iowa Grant, including all matching funds. 127 CITY OF DUBUQUE,IOWA COMBINll�TG STATEMENT OF NET POSITION EXHIBIT B-1 NONNIAJOR ENTERPRISE FUNDS JUNE 30,2017 Total Other Refuse Transit America's Enterprise Collection System Salt RiverProject Fhnds ASSETS CURRENT ASSETS Cash and pooled cash investrnents $ 926,428 $ 825,959 $ - $ 4 $ 1,752,391 Receivables Accounts 391,286 4,276 - - 395,562 Accrned interest 793 - - - 793 Intergovemmental - 2,353,793 - - 2,353,793 Prepaid items - 9,902 - - 9,902 TotalCurrentAssets 1,318,507 3,193,930 - 4 4,512,441 NONCURRENT ASSETS Capital assets Land - 36,000 - - 36,000 Buildings - 7,161,486 175,458 - 7,336,944 Improvements to other than buildings - 796,092 686,312 - 1,482,404 MacMnery and equipment 2,322,582 6,163,031 36,342 - 8,521,955 Conshuctioninprogress - 4,34Q757 - - 4,34Q757 Accumulated depreciation (1,604,163) (5,095,149) (94,663) - (6,793,975) NetCapitalAssets 718,419 13,402,217 803,449 - 14,924,085 TotalNoncurrentAssets 718,419 13,402,217 803,449 - 14,924,085 TotalAssets 2,036,926 16,596,147 803,449 4 19,436,526 DEFERRED OUTFLOWS OF RESOURCES Pension related deferred outflows 257,540 402,480 - - 66Q020 LIABILITIES CURRENT LIABILITIES Accounis payable 5,620 1,361,913 - 3,436 1,37Q969 Accruedpayroll 5Q600 75,609 - - 126,209 General obligation bonds payable 4,749 - - - 4,749 Accrued compensated absences 1,172 4,055 - - 5,227 Accruedinterestpayable 2,752 - - - 2,752 Due to other funds - - 2,887 - 2,887 TotalCurrentLiabilities 64,893 1,441,577 2,887 3,436 1,512,793 NONCURRENT LIABILITIES General obligation bonds payable 76,601 - - - 76,601 NCAccruedcompensatedabsences 241,164 11,494 - - 252,658 Netpensionliability 947,077 1,48Q073 - - 2,427,150 Net OPEB Liability 208,599 82,500 - - 291,099 Total Noncurrent Liabilities 1,473,441 1,574,067 - - 3,047,508 Total Liabilities 1,538,334 3,015,644 2,887 3,436 4,56Q301 DEFERRED INFLOWS OF RESOURCES Pension related deferred inflows 37,617 58,788 - - 96,405 NET POSITION Netinvestrnentincapitalassets 637,069 13,402,217 803,449 - 14,842,735 Unreshicted 81,446 521,978 (2,887) (3,432) 597,105 TotalNetPosition $ 718,515 $ 13,924,195 $ SOQ562 $ (3,432) $ 15,439,840 128 CITY OF DUBUQUE,IOWA COMBINll�TG STATEMENT OF REVENiJES,EXPENSES,AND CIiANGES IN NET POSITION EXHIBIT B-2 NONNIAJOR ENTERPRISE FUNDS FOR THE YEAR ENDID JUNE 30,2017 Total Other Refuse Transit America's Enterprise Collection System Salt RiverProject Funds OPERATING REVENUES Charges for sales and services $ 4,181,579 $ 381,665 $ 86,887 $ - $ 4,65Q131 Other 3,472 77,593 - 4 81,069 Total Operating Revenues 4,185,051 459,258 86,887 4 4,731,200 OPERATING EXPENSES Employee e�pense 2,879,365 2,421,841 - - 5,301,206 Utilities 18,572 88,332 - - 106,904 Repairsand maintenance 32Q053 511,814 1,325 - 833,192 Supplies and services 643,421 441,831 16,075 22,893 1,124,220 Insurance 21,899 46,279 - - 68,178 Depreciation 319,486 726,957 27,639 - 1,074,082 TotalOperatingExpenses 4,202,796 4,237,054 45,039 22,893 8,507,782 OPERATING INCOME(LOSS) (17,745) (3,777,79� 41,848 (22,889) (3,776,582) NONOPERATING REVENUES Intergovemmental - 1,393,388 - - 1,393,388 Investment earnings 3,217 764 - - 3,981 Contributions - 89,961 - - 89,961 Interest expense (5,472) - - - (5,472) Gain on disposal of assets - 1Q464 - - 1Q464 NetNonoperating Revenues (2,255) 1,494,577 - - 1,492,322 INCOME(LOSS)BEFORE TRANSFERS (2Q000) (2,283,219) 41,848 (22,889) (2,284,260) CAPITAL CONTRIBUTIONS - 4,959,696 - - 4,959,696 TRANSFERS IN - 1,307,589 - 26,498 1,334,087 CHANGE INNET POSITION (2Q000) 3,984,066 41,848 3,609 4,009,523 NET POSITION,BEGINNING 738,515 9,94Q129 758,714 (7,041) 11,43Q317 NET POSITION,ENDING $ 718,515 $ 13,924,195 $ 80Q562 $ (3,432) $ 15,439,840 129 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS YEAR ENDED JUNE 3Q 2017 America's TotalO[her Refuse Transit River Enterprise Collection System Salt Project Funds CASH FLOWS FROM OPERATINGACTIVITIES Cashreceivedfromcustomers $ 4,118,291 $ 400,587 $ 86,888 $ - $ 4,605,766 Cash payments to suppliers for goods and services (1,001,331) (459,417) (90,230) (26,498) (1,577,47� Cash payments to employees for services (2,840,629) (2,397,535) - - (5,238,164) Other operating receipts 3,472 77,593 - 4 81,069 NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES 279,803 (2,378,772) (3,342) (26,494) (2,128,805) CASH FLOWS FROM NONCAPITAL FINANCING ACTI VITIES Transfers from other funds - 1,307,589 - 26,498 1,334,087 Conhibutions - 5,049,657 - - 5,049,657 Intergovemmentalgiantproceeds - 1,017,993 - - 1,017,993 Proceeds from interfund balances - - 2,887 - 2,887 NET CASH PROVIDED BY(USED FOR)NONCAPITAL FINANCINGACTIVITIES - 7,375,239 2,887 26,498 7,404,624 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTI VITIES Proceeds from issuance of debt 52,813 - - - 52,813 Acquisition and construction of capital assets - (4,330,293) - - (4,330,293) P�tn�tP�t P�a �s6,sz� - - - (s6,sz� inc��escP�a (3,oz� - - - (s,oz6� NET CASH USED FOR CAPITAL AND RELATEDFINANCINGACTIVITIES (7,040) (4,330,293) - - (4,337,333) CASH FLOWS FROM INVESTINGACTIVITIES Interestreceived 3,664 764 - - 4,428 NET INCREASE(DECREASE)IN CASH AND POOLED INVESTMENTS 276,427 666,938 (455) 4 942,914 CASH AND POOLED INVESTMENTS,BEGINNING 650,001 159,021 455 - 809,477 CASH AND POOLED INVESTMENTS,ENDING $ 926,428 825,959 $ - $ 4 $ 1,752,391 130 EXHIBIT B-3 Business-Type Activities-Enterprise Funds America's TotalOther Refuse River Enterprise Collection Transit Salt Project Funds RECONCILIATION OF OPERATING INCOME(LOSS) TO NET CASH PROVIDED BY(USED FOR) OPERATING ACTIVITIES Operatingincome(loss) $ (17,745) $ (3,777,79� $ 41,848 $ (22,889) $ (3,776,582) Adjustments to reconcile operating income(loss)to net cash provided by(used for)operating activities Depreciation 319,486 726,957 27,639 - 1,074,082 Cktange in assets and liabilities (Increase)Decrease in receivables (63,288) 18,922 1 - (44,365) (Increase)in inventories and prepaid items - (471) - - (471) Increase(Decrease)in accounts payable 2,614 629,310 (72,830) (3,605) 555,489 Increase(Decrease)in accrued liabilities (16,312) 11,278 - - (5,034) Increase(Decrease)in net pension liability 213,743 277,141 - - 490,884 (Increase)Decrease in deferred outtlows (13Q737) (194,477) - - (325,214) Increase(Decrease)in deferred inflows (48,007) (81,665) - - (129,672) Increase in net OPEB liability 2Q049 12,029 - - 32,078 TotalAdjustments 297,548 1,399,024 45,190 3,605 1,647,777 NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES $ 279,803 $ (2,378,772) $ 3,342 $ 26,494 $ (2,128,805) 131 THIS PAGE IS INTENTIONALLY LEFT BLANI� 132 INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one department to other deparhnents of the government and to other governxnent units, on a cost-reimbursement basis. General Service Fund - This fund is used to account for engineering, street, and general services supplied to other departments. Garage Service Fund - This fund is used to account for maintenance and repair services far the City's automotive equipment. Stores/Printing Fund - This fund is used to account for printing, supplies, and other services provided to other departxnents. Health Insurance Reserve Fund - This fund is used to accountfor health insurance costs. Workers' Compensation Reserve Fund - This fund is used to account for warkers' compensation costs. 133 CITY OF DUBUQUE,IOWA COMBINll�TG STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30,2017 General Garage Stores/ Service Service Printing ASSETS CURRENT ASSETS Cash and pooled cash investments $ - $ 271,203 $ - Receivables Accounts - - - Accrued interest - - - Prepaid items - - - Inventories - 59,857 17,347 TotalCurrentAssets - 331,060 17,347 NONCURRENT ASSETS Capital assets Machinery and equipment - 324,248 - Accumulateddepreciation - (159,191) - Net Capital Assets - 165,057 - TotalNoncurrentAssets - 165,057 - TotalAssets - 496,117 17,347 DEFERRID OUTFLOWS OF RESOURCES Pension related deferred outflows 341,528 154,941 - LIABILITIES CiJRRENT LIABILITIES Accounts payable - 27,476 - Accruedpayroll - 3Q137 - Due to other funds 25,287 - 13,725 TotalCurrentLiabilities 25,287 57,613 13,725 NONCURRENT LIABILITIES Net pension liability 1,255,938 569,784 - TotalNoncurrentLiabilities 1,255,938 569,784 - Total Liabilities 1,281,225 627,397 13,725 DEFERRID INFLOWS OF RESOURCES Pension related deferred inflows 49,885 22,631 - NET POSITION Net investment in capital assets - 165,057 - Unrestricted (989,582) (164,027) 3,622 Total Net Position(Deficit) $ (989,582) $ 1,030 $ 3,622 134 EXHIBIT C-1 Health Workers' Insurance Compensation Reserve Reserve Total $ 2,193,319 $ 1,118,880 $ 3,583,402 6Q599 - 6Q599 1,877 957 2,834 - 97,508 97,508 - - 77,204 2,255,795 1,217,345 3,821,547 - - 324,248 - - (159,191) - - 165,057 - - 165,057 2,255,795 1,217,345 3,986,604 - - 496,469 704,944 1,118,237 1,85Q657 - - 3Q137 - - 39,012 704,944 1,118,237 1,919,806 - - 1,825,722 - - 1,825,722 704,944 1,118,237 3,745,528 - - 72,516 - - 165,057 1,SSQ851 99,108 499,972 $ 1,SSQ851 $ 99,108 $ 665,029 135 CITY OF DUBUQUE,IOWA COMBINll�TG STATEMENT OF REVENiJES,EXPENSES,AND CIiANGES IN NET POSITION(DEFICITS) INTERNAL SERVICE FUNDS FOR THE YEAR ENDID JUNE 30,2017 General Garage Stores/ Service Service Printing OPERATING REVENUES Charges for sales and services $ 2,387,281 $ 2,007,007 $ 479,951 Other - 48,950 8 Total Operating Revenues 2,387,281 2,055,957 479,959 OPERATING EXPENSES Employee expense 1,774,481 1,012,902 - Utilities - 23,391 8,614 Repairs and maintenance - 48,959 - Supplies and services - 828,223 452,235 Insurance - 2Q487 - Depreciation - 36,655 - TotalOperatingExpenses 1,774,481 1,97Q617 46Q849 OPERATING INCOME(LOSS) 612,800 85,340 19,110 NONOPERATING REVENUES(EXPENSES) Gain on disposal of assets - 2,898 - INCOME(LOSS)BEFORE TRANSFERS 612,800 88,238 19,110 TRANSFERSIN - - - CHANGEINNETPOSITION 612,800 88,238 19,110 NET POSITION(DEFICIT),BEGINNING (1,602,382) (87,208) (15,488) NET POSITION(DEFICIT),ENDING $ (989,582) $ 1,030 $ 3,622 136 EXHIBIT C-2 Health Workers' Insurance Compensation Reserve Reserve Total $ 1Q825,344 $ 1,067,405 $ 16,766,988 66,418 2,872 118,248 1 Q 891,762 1,07Q277 16,885,236 - - 2,787,383 - - 32,005 - - 48,959 11,31 Q618 1,074,932 13,666,008 35,888 9Q581 146,956 - - 36,655 11,346,506 1,165,513 16,717,966 (454,744) (95,23� 167,270 - - 2,898 (454,744) (95,23� 17Q168 - 31,470 31,470 (454,744) (63,76� 201,638 2,005,595 162,874 463,391 $ 1,SSQ851 $ 99,108 $ 665,029 137 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 3Q 2017 General Cruage Stores/ Service Service Printing CASH FLOWS FROM OPERATINGACTIVITIES Cash received from customers $ 2,387,281 $ 2,007,007 $ 479,951 Cash payments to suppliers for goods and services - (904,345) (481,991) Cash payments to employees for services (2,010,077) (1,001,462) - Other operating receipts - 48,950 8 NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES 377,204 150,150 (2,032) CASH FLOWS FROM NONCAPITAL FINANCING ACTI VITIES Transfers to other funds - - - Proceeds from interfund balances (377,204) - 2,032 Payment of interfund balances - - - NET CASH PROVIDED BY(USED FOR)NONCAPITAL FINANCINGACTIVITIES (377,204) - 2,032 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTI VITIES Acquisition and construction of capital assets - - - Proceeds from sale of capital assets - 2,898 - NET CASH PROVIDED BY(USED FOR)CAPITAL AND RELATEDFINANCINGACTIVITIES - 2,898 - CASH FLOWS FROM INVESTINGACTIVITIES Interestreceived - - - NET INCREASE(DECREASE)IN CASH AND POOLED INVESTMENTS - 153,048 - CASH AND POOLED INVESTMENTS,BEGINNING - 118,155 - CASH AND POOLED INVESTMENTS,ENDING $ - $ 271,203 $ - RECONCILIATION OF OPERATING INCOME(LOSS) TO NET CASH PROVIDED BY(USED FOR)OPERATING ACTI VITIES Operatingincome(loss) $ 612,800 $ 85,340 $ 19,110 Adjustments to reconcile operating income(loss)to net cash provided by(used for)operating activities Depreciation - 36,655 - Change in assets and liabilities (Increase)Decrease in receivables - - - (Increase)Decrease in inventories and prepaid items - (6,726) (2,064) Increase(Decrease)in accounts payable - 23,441 (19,078) Increase(Decrease)in net pension liability 12,889 113,010 - (Increase)Decrease in deferred outtlows (126,589) (75,960) - Increase(Decrease)in deferred inflows (95,252) (30,702) - Increase(Decrease)in accrued liabilities (26,644) 5,092 - TotalAdjustments (235,596) 64,810 (21,142) NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES $ 377,204 $ 150,150 $ (2,032) 138 EXHIBIT C-3 Health Workers' Insurance Compensation Reserve Reserve Total $ 10,85Q694 $ 1,067,405 $ 16,792,338 (11,436,943) (1,088,052) (13,911,331) - - (3,011,539) 66,418 2,872 118,248 �si9,ssi� �i�,��s� �iz,zsa� - 31,470 31,470 - - (375,172) - 31,470 (343,702) - - 2,898 - - 2,898 3,280 1,147 4,427 �si6,ssi� ia,saz �sas,66i� 2,709,870 1,104,038 3,932,063 $ 2,193,319 $ 1,118,880 $ 3,583,402 $ (454,744) $ (95,236) $ 167,270 - - 36,655 25,350 - 25,350 - (872) (9,662) (9Q437) 78,333 (7,741) - - 125,899 - - (202,549) - - (125,954) - - (21,552) �6s,os�� ,�i �i�9,ssa� $ (519,831) $ (17,775) $ (12,284) 139 AGENCY FUNDS The agency fund is used to repart resources held by the City in a purely custodial capacity. Cable Equipment Fund — This fund is used to account for resources received under the cable franchise agreement to support public, educational, and governmental access and internet use grants. Dog Track Depreciation Fund — This fund is used to account far the resources held for improvements at the greyhound racing facility. 140 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES EXHIBIT D-1 AGENCY FUND FOR THE YEAR ENDED JUNE 3Q 2017 Balance Balance Beginning End of Yeu Additions Deductions of Yeu CABLE EQUIPMENT FUND ASSETS Cash and pooled cash investments $ 724,778 $ 203,322 $ 315,453 $ 612,647 Prepaids 16,997 16,997 Accountsreceivable 51,414 - 1,036 50,378 TotalAssets $ 776,192 $ 220,319 $ 316,489 $ 680,022 LIABILITIES Accountspayable $ 135,135 $ 24,722 $ 135,135 $ 24,722 Due to other agency 641,057 195,597 181,354 655,300 TotalLiabilities $ 776,192 $ 220,319 $ 316,489 $ 680,022 DOG TRACK DEPRECIATION FUND ASSETS Cash and pooled cash investments $ 744,643 $ 120,650 $ 37,800 $ 827,493 Accruedinterest 1,418 708 1,418 708 Total Assets $ 746,061 $ 121,358 $ 39,218 $ 828,201 LIABILITIES Due to other agency $ 746,061 $ 121,358 $ 39,218 $ 828,201 TOTAL AGENCY FUNDS ASSETS Cashandpooledcashinvestments $ 1,469,421 $ 323,972 $ 353,253 $ 1,440,140 Prepaids 16,997 16,997 Accountsreceivable 51,414 - 1,036 50,378 Accruedinterest 1,418 708 1,418 708 Total Assets $ 1,522,253 $ 341,677 $ 355,707 $ 1,508,223 LIABILITIES Accountspayable $ 135,135 $ 24,722 $ 135,135 $ 24,722 Due to other agency 1,387,118 316,955 22Q572 1,483,501 Total Liabilities $ 1,522,253 $ 341,677 $ 355,707 $ 1,508,223 141 THIS PAGE IS INTENTIONALLY LEFT BLANI� 142 Statistical Section (Unaudited) June 30, 2017 City of Dubuque, Iowa 143 THIS PAGE IS INTENTIONALLY LEFT BLANI� 144 CITY OF DUBUQUE, IOWA STATISTICAL SECTION This statistical section of the City's comprehensive annual financial report presents detailed information as a context for understanding what the inforxnation in the financial statements, note disclosures, and required supplementary inforxnation says about the City's overall financial health. Contents Paae Financial Trends These schedules contain trend inforxnation to help the reader understand how the City's financial perforxnance and well-being have changed over time. 146 Revenue Capacity These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax. 156 Debt Capacity These schedules present inforxnation to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. 160 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. 171 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial repart relates to the services the City provides and the activities it performs. 174 Sources: Unless otherwise noted, the inforxnation in these schedules is derived from the comprehensive annual financial reports for the relevant year. 145 CITY OF DUBUQUE,IOWA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2008 2009 2010 2011 2012 Governmental activities Netinvestrnentincapitalassets $ 296,143,451 $ 298,855,346 $ 309,126,684 $ 329,416,245 $ 347,89Q769 Restricted 31,97Q77A 27,171,123 26,064,318 23,738,199 26,18Q100 u�reso-��e�d is,9s�,sai (s,zsq�is) (ii,zsb,siz) (a,s9i,ssi) (ib,s�b,9ss) Totalgovemmentalactivitiesnetposition $ 347,102,016 $ 32Q745,754 $ 323,934,690 $ 348,263,063 $ 357,193,881 Business-type activities Netinvestrnentin capitalassets $ 95,104,575 $ 12Q473,286 $ 124,805,513 $ 135,026,753 $ 132,237,734 Restricted 554,505 77Q157 129,642 893,519 957,802 Unrestricted 11,312,806 12,321,125 11,679,961 2,603,799 1Q665,596 Total business-t}pe activities netposition $ 106,971,886 $ 133,564,568 $ 136,615,116 $ 138,57A,071 $ 143,861,132 Primary govemment Netinvestrnentincapitalassets $ 391,7A8,026 $ 419,328,632 $ 433,932,197 $ 464,442,998 $ 48Q128,503 Restricted 32,525,229 27,941,280 26,193,960 24,631,718 27,137,902 Unrestricted 3Q30Q647 7,04Q410 423,649 (2,287,582) (6,211,392) Totalprimarygovemmentnetpositions $ 454,073,902 $ 454,31Q322 $ 46Q549,806 $ 486,787,134 $ 501,055,013 146 TABLE 1 Year 2013 2014 2015 2016 2017 $ 342,046,442 $ 354,732,451 $ 348,173,267 $ 369,244,904 $ 375,578,520 23,491,207 21,501,638 22,047,405 21,473,309 23,955,112 (8,361,688) (18,151,279) (49,579,334) (47,166,839) (43,921,629) $ 357,175,961 $ 358,082,810 $ 32Q641,338 $ 343,551,374 $ 355,612,003 $ 138,498,777 $ 138,842,390 $ 148,487,126 $ 161,326,743 $ 164,448,390 6,011,848 5,315,519 7,796,668 4,254,907 3,796,752 (641,384) (593,202) (4,568,933) (7,339,071) 3,876,760 $ 143,869,7A1 $ 143,564,707 $ 151,714,861 $ 158,7A2,579 $ 172,121,902 $ 48Q545,219 $ 493,574,841 $ 496,66Q393 $ 53Q571,647 $ 54Q026,910 29,503,055 26,817,157 29,844,073 25,728,216 27,751,864 (9,00s,o�z) (is,�aa,asi) (sa,ias,zb�) (sa,sos,9io) (aqoaa,sb9) $ 501,045,202 $ 501,647,517 $ 472,356,199 $ 501,793,953 $ 527,733,905 147 CITY OFDUBUQUE,IOWA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2008 2009 2010 2011 2012 Expenses Govemmental activities: Publicsafery $ 16,966,210 $ 22,038,265 $ 22,067,988 $ 23,759,068 $ 26,326,367 Publicworks 18,847,068 19,079,688 22,121,679 18,978,423 22,917,747 Health and social services 80Q566 849,237 852,099 1,072,347 913,954 Culture and rureation 1 Q857,409 12,640,716 11,446,084 1 Q911,733 12,749,558 Communiry and economic development 11,961,584 12,693,140 15,422,099 12,89Q841 22,03Q950 Generalgovemment 5,804,003 6,423,908 7,963,016 9,052,7M 6,133,983 Interestonlong-te�rndebt 2,577,417 3,164,126 3,101,897 3,794,951 3,794,912 Total govemmental activities expenses 67,814,257 76,889,080 82,974,812 79,96Q067 94,367,471 Business-rype activities: Sewagedisposalworks 6,141,524 6,326,708 6,631,326 7,899,011 9,718,669 Waterutiliry 4,814,692 6,1OQ491 6,093,827 6,523,993 7,410,710 SW�rnwaterutiliry 1,706,735 2,13$198 2,213,144 2,811,321 2,750,767 Parkingfacilities 2,173,110 2,147,405 4,003,776 4,775,834 3,152,055 America'sRiverRoject 126,699 61,927 423,158 18Q086 22,787 Refusecollection 2,724,050 2,78$665 2,703,887 2,828,891 3,173,075 Transitsystem 2,703,983 2,625,145 2,832,066 2,J47,958 3,629,750 Salt 671,647 661,395 Totalbusiness-rypeactivitiesexpenses 2Q390,793 22,188,539 24,901,184 2$638,741 3Q519,208 Totalprimazygovemmentexpenses $ 8$205,050 $ 9Q077,619 $ 107,875,996 $ 10$59$808 $ 124,886,679 Program Revenues Govemmental activities: Charges for services Public safery 2,088,723 2,02Q625 2,348,06{ 2,579,573 2,915,562 Publicworks 4,061,883 4,456,364 4,M6,583 5,331,667 5,178,439 Cultureandrureation 2,109,571 2,279,688 2,192,886 2,108,177 2,321,553 Other activities 1,382,889 1,557,597 2,412,880 2,53Q234 2,873,298 Operatinggrants and contributions 11,709,123 12,599,967 2Q83Q113 14,204,627 23,013,997 Capital grants and contributions 8,032,602 4,811,729 10,748,522 23,482,866 16,56Q811 Totalgovemmentalactivitiesprograrnrevenues 29,384,791 27,725,970 42,579,048 SQ237,144 52,863,660 Business-rype activities: Charges for services Sewagedisposalworks 5,484,079 5,904,535 5,893,730 6,6{3,974 7,827,281 Waterutiliry 4,875,530 5,32Q642 5,326,202 5,638,277 6,037,073 SW�rnwaterutiliry 1,766,334 2,291,249 2,282,625 2,993,539 3,18Q134 Parkingfacilities 2,141,607 2,224,185 2,399,843 2,75Q610 2,908,989 America'sRiverProject 2,140 - 7,000 - - Refusecollution 2,71Q583 2,872,649 2,893,017 3,082,197 3,257,960 Transitsystem 195,817 196,260 273,433 193,236 278,835 Salt - - - 773,258 665,942 Operating grants and contributions 1,209,636 1,095,946 1,652,277 2,773,933 1,579,493 Capital grants and contributions 2,83Q263 3,613,321 3,80Q582 6,536,527 5,323,486 Totalbusiness-rypeactivitiesprogramrevenues 21,215,989 23,518,787 24,528,709 31,385,551 31,059,193 Totalprimazygovemmentprogramrevenues $ SQ600,780 $ 51,244,757 $ 67,107,757 $ 81,622,695 $ 83,922,853 148 TABLE 2 Year 2013 2014 2015 2016 2017 $ 28,292,481 $ 27,57$517 $ 25,525,937 $ 26,851,624 $ 3Q02Q343 21,607,536 21,306,882 19,207,837 7A,323,023 19,60$137 716,970 1,055,398 92$968 967,936 815,251 13,647,178 13,696,331 13,002,690 12,993,331 13,653,509 17,388,720 14,591,257 18,064,831 15,464,781 18,096,170 6,24$483 9,61Q084 6,42Q173 4,101,423 8,982,668 4,04Q640 3,684,993 3,903,667 2,963,134 3,467,685 91,951,008 91,523,462 87,054,103 87,665,252 J4,643,763 9,375,748 11,481,103 12,019,866 12,817,669 9,442,558 6,817,772 8,812,340 7,80Q393 6,483,229 5,92$941 3,347,3M 3,431,096 4,131,562 5,021,523 4,067,374 3,586,405 3,732,492 3,383,419 3,42Q796 3,126,823 22,770 33,579 24,000 21,521 22,893 3,46$859 3,75Q366 3,74Q4M 3,968,761 4,202,796 3,492,095 3,847,320 4,245,823 4,274,967 4,237,054 346,066 56,468 244,691 181,617 45,039 3Q457,019 35,144,764 35,59Q158 36,189,583 31,073,478 $ 122,408,027 $ 126,668,226 $ 122,6{4,261 $ 123,854,835 $ 125,717,241 2,495,737 2,624,455 2,532,114 2,713,065 2,93Q068 4,472,479 5,829,293 6,092,356 5,765,075 5,681,107 2,48$844 2,321,265 2,547,843 2,723,270 2,767,636 3,264,979 3,921,256 3,493,143 3,887,056 3,541,205 13,995,316 12,784,907 11,992,439 15,301,219 15,02$527 10,791,J45 12,162,6�V9 Q704,043 1$667,619 13,360,280 37,509,300 39,643,825 36,361,938 49,057,304 43,30$823 8,924,785 1Q025,673 1Q582,662 12,15$439 12,442,584 6,922,582 7,248,790 7,463,430 8,406,928 8,553,225 3,192,256 3,224,SM 3,49Q040 3,754,148 4,076,396 2,883,865 2,92Q148 3,036,214 3,247,383 3,286,947 - - - 1,605 4 3,346,795 3,70Q922 3,783,493 3,857,340 4,185,051 307,314 275,907 397,545 463,688 459,258 395,000 45,600 232,271 81,720 86,887 2,264,695 1,717,208 1,866,535 1,64$077 1,70Q171 1,24Q583 2,92Q942 1Q020,715 7,607,721 14,16Q820 79,477,875 32,079,694 40,872,905 41,227,M9 48,951,343 $ 66,987,175 $ 71,723,519 $ 77,234,843 $ 9Q284,353 $ 92,26Q166 (Continued) 149 CITY OFDUBUQUE,IOWA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2008 2009 2010 2011 2012 Net(Fxpense)/Revenue Govemmentalactivities $ (3$429,46� $ (49,163,110) $ (4Q395,76{) $ (29,722,923) $ (41,503,811) Business-rypeactivities 825,196 1,33Q7A8 (372,475) 2,746,810 539,985 Totalprimarygovemmentnetexpense $ (37,604,270) $ (47,832,862) $ (40,768,239) $ (26,976,113) $ (4Q963,82� General Revenues and Other Changes in NetPosition Govemmental activities: General Revenues Propertytaxes $ 22,744,563 $ 23,716,819 $ 7A,876,073 $ 28,249,114 $ 3Q816,614 Local option sales tae 8,02Q889 7,649,853 8,112,471 7,929,761 8,459,888 Hotel/moteltae 1,622,455 1,611,954 1,67$806 1,826,809 1,903,J44 Utiliryfranchisefees 1,516,123 1,486,792 1,591,712 2,48$858 2,272,481 Garning 15,346,468 9,627,391 8,209,761 13,327,223 8,785,453 Unrestricted investrnent eamings 2,741,499 2,215,413 1,339,709 668,363 1,529,149 Gain on saleofcapital assets 92,525 407,503 - 149,937 1,417,M8 Other 89$7A1 91$605 880,930 622,494 - Transfers (2,252,155) (24,826,982) (3,104,762) (1,211,263) (4,749,948) Totalgovemmentalactivities 50,73Q608 22,806,848 43,584,700 54,051,796 SQ434,629 Business-rype activities: General Revenues Unrestrictedinvestrnenteamings 63QM9 433,148 294,562 184,581 206,672 GainonsaleofcapitalassGs 11,736 2,304 23,699 19,337 84,178 Extraordinary item - - - (2,253,03� (7A3,722) Transfers 2,252,155 7A,826,982 3,104,762 1,211,263 4,74QJ48 Totalbusiness-rypeactivities 2,893,940 25,262,434 3,423,023 (837,855) 4,797,076 Totalprimarygovemment $ 53,624,548 $ 48,069,282 $ 47,007,723 $ 53,213,441 $ 55,231,705 Change in Net Position Govemmentalactivities $ 12,301,142 $ (26,356,262) $ 3,188,936 $ 7A,328,373 $ 8,93Q818 Business-rypeactivities 3,719,136 26,592,682 3,OSQ548 1,90$955 5,337,061 Totalprimazygovemment $ 16,020,278 $ 236,420 $ 6,23Q484 $ 26,237,328 $ 14,267,879 150 TABLE 2 (continued) Year 2013 2014 2015 2016 2017 $ (54,441,708) $ (51,879,637) $ (SQ692,165) $ (38,607,J48) $ (51,334,940) (979,144) (3,065,070) 5,282,747 5,037,466 12,522,340 $ (55,420,852) $ (54,J44,70/� $ (45,40Q418) $ (33,570,482) $ (3$812,600) $ 32,66$554 $ 33,264,283 $ 36,277,719 $ 36,518,506 $ 39,67$473 8,764,787 8,211,366 8,76Q246 9,155,411 8,89Q046 1,953,763 2,006,514 2,623,551 2,128,042 2,821,745 2,568,347 2,609,421 2,82$688 4,36Q107 4,55$847 8,452,298 7,87$008 7,397,709 $44Q161 8,098,37A 201,153 777,958 66$134 1,082,165 335,577 907,122 483,782 19,495 813,492 83,720 (1,092,23� (2,444,84� (7,28$593) (97Q900) (1,071,163) 54,423,788 52,786,486 51,286,J49 61,517,984 63,395,569 65,351 135,461 185,356 407,528 231,746 384,697 18Q229 6,571 102,87A 54,074 (555,031) - - - - 1,092,236 2,444,846 7,28$593 979,900 1,071,163 987,253 2,76Q536 7,48Q520 1,49Q252 1,356,983 $ 55,411,M1 $ 55,547,022 $ 58,767,469 $ 63,008,236 $ 6{,752,552 � (i�,9zo) � 9oe,s�9 � s9a,�sa � zz,9io,ose � iz,oeqbz9 8,109 (304,534) 12,763,267 6,527,718 13,879,323 $ (Q811) $ 602,315 $ 13,35$O51 $ 2Q437,754 $ 25,93Q952 151 CITY OF DUBUQUE,IOWA FUND BALANCES,GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2008 2009 2010 2011* 2012 General Fund Reserved $ 1,699,825 $ 4,864,701 $ 5,199,760 $ - $ - Unreserved 17,982,016 14,206,181 8,622,705 - - Nonspendable - - - 868,631 5,613,359 Reshicted Assigned - - - 8,904,490 5,549,803 Unassigned - - - 6,139,306 9,371,016 Total general fund $ 19,681,841 $ 19,07Q882 $ 13,822,465 $ 15,912,427 $ 2Q534,178 All Other Govemmental Funds Reserved $ 31,887,038 $ 19,634,305 $ 24,404,656 $ - $ - Unreserved,reported in: Special revenue fimds 7,431,931 5,981,390 4,011,022 - - Debt service fimd - - - - - Capital projects funds 7,875,448 5,659,214 (989,025) - - Permanent fimds 33,958 35,550 33,273 - - Nonspendable - - - 1Q320,305 1Q975,468 Reshicted - - - 1$010,570 31,362,126 Committed - - - 5,203,472 5,843,671 Unassigned - - - (377,363) (429,344) Total all other govemmental funds $ 47,228,375 $ 31,31Q459 $ 27,459,926 $ 33,156,984 $ 47,751,921 *Classification changed in 2011 due to adoption of GASB 54. 152 TABLE3 Yeu 2013 2014 2015 2016 2017 $ - $ - $ - $ - $ - 6,646,278 6,549,063 6,082,043 6,049,052 5,585,672 2,208 3,434,440 1,904,805 647,772 1,015,935 1,59Q065 8,806,171 7,356,066 8,693,524 1Q908,497 12,582,596 $ 18,886,889 $ 15,809,934 $ 15,423,339 $ 17,973,484 $ 19,76Q541 $ - $ - $ - $ - $ - 9,092,520 8,640,780 1,183,423 553,292 944,856 3Q738,046 23,62Q615 3Q496,183 27,45Q187 28,103,397 1Q827,172 1Q548,592 12,298,896 7,635,502 6,592,154 $ 5Q657,738 $ 42,809,987 $ 43,978,502 $ 35,638,981 $ 35,64Q407 153 CITY OFDUBUQUE,IOWA CHANGES IN FUND BALANCES,GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIN'IED ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2008 2009 2010 2011 2012 Revenues Taxes $ 33,89$692 $ 34,454,146 $ 36,252,156 $ 4Q428,8J4 $ 43,443,669 Special assessments 177,585 25Q372 318,178 232,535 596,138 Licenses and pe�mits 1,153,479 1,088,386 1,115,472 1,17Q922 1,57Q022 Intergovemmental 14,256,523 15,796,822 27,31Q624 26,171,082 37,574,783 Chargesforservices 7,833,151 $029,189 8,063,284 8,723,086 9,796,379 FinesandforFeits 18$603 199,839 27A,601 454,117 525,389 Investrnenteamings 2,731,953 2,206,382 1,34$615 654,587 1,511,437 Contributions 6,134,002 1,369,759 2,333,995 1,797,621 1,578,376 Gaming 15,346,468 9,627,391 8,209,761 13,327,223 8,785,453 Miscellaneous 1,269,376 1,60Q679 2,111,834 2,075,262 1,319,558 Totalrevenues 82,989,782 74,622,965 87,288,520 94,535,379 106,201,154 Expenditures Cmrent Publicsafery 21,542,661 21,335,192 21,979,729 23,95Q386 24,476,772 Public works 16,331,107 14,261,551 19,251,625 14,429,415 12,385,979 Health and socialservices 797,6{4 815,873 813,609 1,MQ114 828,837 Culture and rureation 1Q277,787 12,227,506 14,909,517 11,279,951 1Q873,474 Communiry and economic development 11,847,512 11,953,279 14,654,816 12,361,176 22,237,140 Generalgovemment 6,31Q939 5,836,839 6,368,308 7,686,979 6,335,947 Debt service Principal 1,762,375 2,169,678 2,651,765 2,82Q371 3,224,680 Interest 2,406,431 3,095,166 3,145,735 3,321,157 3,22Q546 Capitalprojects 15,351,848 24,274,120 14,831,118 15,102,893 23,459,891 Total expenditures 86,628,304 95,969,2M 98,606,222 91,992,392 107,M3,216 Excess(deficiency)ofrevenues over (under)expenditures (3,638,522) (21,346,239) (11,317,702) 2,542,937 (842,062) Other Financing Souroes(Uses) Issuanceofbonds 23,083,696 5,905,000 4,722,176 6,996,722 27,215,363 Discountonbonds (266,158) (48,51� (31,990) (39,547) (71,689) Premiums on bonds - - 554,796 1,642 123,990 Issuanceofrefundingbonds 2,965,000 - 8,885,000 705,000 - r�yme�ew�er��aeano�as��owag�e �z,s�s,000� - �9,aos,000� �e9o,000� - Transfers in 14,801,589 7,451,152 7,993,297 15,85Q523 8,773,387 Transfers out (1$185,109) (9,084,228) (1Q562,137) (18,961,892) (18,336,603) Inswancerecovery - - - 628,482 132,425 Saleofcapitalassets 2,901,190 593,956 62,610 753,153 2,221,877 Totalotherfinancingsouroes(uses) 22,425,208 4,817,36�V 2,218,752 5,244,083 2Q058,750 Net change in fund balances $ 18,786,686 $ (16,528,875) $ (9,09$950) $ 7,787,020 $ 19,216,688 Debt service as a percentage of noncapital expenditures 6.55 % 7.68 % 7J4 % 8.49 % 7.65 % 154 TABLE4 Year 2013 2014 2015 2016 2017 $ 45,44Q973 $ 46,034,361 $ SQ49Q204 $ 51,58Q084 $ 55,949,111 175,486 154,692 85,501 111,193 261,233 1,271,771 1,136,941 1,19$420 1,48Q643 1,505,564 26,58Q831 23,OSQ052 2Q82$524 29,302,824 26,314,297 $952,179 1Q264,257 10,711,7A3 1Q919,854 1Q816,025 484,128 455,219 362,661 421,925 484,687 18Q016 756,809 66$134 1,082,165 335,577 37Q154 678,561 789,268 1,440,405 689,237 $452,298 7,878,008 7,397,709 8,440,161 8,098,324 1,315,915 1,705,275 1,466,542 1,367,875 1,811,681 93,223,751 92,114,175 93,99$206 106,147,129 106,265,736 26,506,714 27,6�V4,190 27,570,773 28,036,551 29,155,128 13,416,108 13,J42,772 11,20Q427 14,597,823 11,728,716 68Q466 1,M9,1J4 939,172 1,015,987 868,280 11,218,019 12,351,497 12,30Q454 11,909,029 12,397,294 1$678,496 14,42Q980 16,41$909 13,473,413 16,474,553 5,035,108 5,898,293 5,977,605 6,436,114 7,287,586 3,182,240 4,595,808 4,910,735 1Q302,412 17,615,698 3,991,115 3,65Q6J4 3,577,879 3,707,268 3,579,807 16,636,698 18,779,651 14,829,037 31,SM,581 16,26Q851 99,344,96�V 102,333,079 97,724,J41 12Q983,178 115,367,913 �e,izi,zis� �io,zis,9oa� �s,�ze,�ss� �ia,sse,oa9� �9,ioz,i�� 6,577,268 - 11,137,321 3,933,882 23Q000 - - 72,852 292,521 319,384 4,J49,148 - - - 11,023,700 (4,949,148) - - 4,65Q000 - 15,795,630 15,862,516 18,073,553 17,397,007 18,814,586 �ie,9si,zos� �i�,z�a,�ez� �zs,zai,�9s� �is,s�e,9m� �i9,9i�,zi9� 49,209 59,796 106,288 86,359 41,345 2,438,837 666,648 36Q436 1,063,814 378,861 7,379,741 (705,802) 4,50$655 9,046,676 1Q89Q657 $ 1,258,528 $ (1Q924,70� $ 781,920 $ (5,789,373) $ 1,78$480 8.57 % 9.51 % 9.97 % 15.17% 20.J4 % 155 CITY OF DUBUQUE,IOWA TA%ABLE AND ASSESSED VALUE OF PROPERTY TABLE 5 LAST TEN FISCAL YEARS (IN THOUSANDS OF DOLLARS) Total Taxable Value to Real Property Exemptions Total Total Levy Fiscal Taxa.ble Assessed Real Taxa.ble Assessed Assessed Total Direct Yeu Yeu Value Value Property Value Value Value Tax Rate 2006 2008 $ 1,823,304 $ 2,870,178 $ 8,939 $ 1,814,365 $ 2,87Q178 6321.00% % 1031685% 2007 2009 1,949,071 3,171,681 9,298 1,939,773 3,171,681 61.16 9.96904 2008 2010 2,033,135 3,239,112 9,246 2,023,889 3,239,112 62.48 9.85777 2009 2011 2,159,622 3,349,823 8,885 2,150,737 3,349,823 6420 10.02742 2010 2012 2,243,474 3,406,186 8,875 2,234,599 3,406,186 65.60 10.45111 2011 2013 2,337,129 3,476,638 8,872 2,328,257 3,476,638 66.97 10.78478 2012 2014 2,398,151 3,503,774 8,799 2,389,352 3,503,774 68.19 11.02586 2013 2015 2,522,048 3,686,202 8,729 2,513,319 3,686,202 68.18 11.02588 2014 2016 2,508,933 3,723,003 8,631 2,500,302 3,723,003 67.16 11.02590 2015 2017 2,652,700 3,914,425 8,086 2,644,614 3,914,425 67.56 11.16739 Source: Dubuque County Assessor's and Auditor's Offices 156 CITY OF DUBUQUE,IOWA PROPERTY TAX RATES TABLE6 DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS TAX RATES PER$1,000 ASSESSED VALUE Dubuque Board of Ratio of Levy Fiscal Dubuque School Education and Area 1 Dubuque Dubuque Year Year Ciry District Independents Voc.Tech County Total Ciry W Total 2006 2008 $ 1031690 $ 16.40925 $ 0.63160 $ 0.61270 $ 6.42691 $ 3439736 29.99 % 2007 2009 9.96904 16.89000 0.95250 0.55713 6.41459 34J8326 28.66 2008 2010 9.85777 16.87918 0.57970 0.99471 6.40435 34J1571 28.40 2009 2011 10.02742 16.88349 0.55740 1.03532 6.50193 35.00556 28.65 2010 2012 10.45111 16.87685 0.67766 1.07379 6.49167 35.57108 2938 2011 2013 10J8477 15.40388 OJ1653 0.98407 6.4317A 3432049 31.42 2012 2014 11.02586 14.60281 OJ5274 0.90455 6.4317A 33J1720 32J0 2013 2015 11.02588 13.99630 0.66355 0.90807 6.4317A 33.02504 3339 2014 2016 11.02590 14.05629 0.63899 0.91036 638779 33.01933 3339 2015 2017 11.16739 14.97697 0.63146 0.93757 629673 34.01012 32.84 Sepuate components of the Dubuque City Rate is as follows: Levy Fiscal Public Employee Debt Yeu Yeu General Transit Insurance Benefits Service Total 2006 2008 $ 8.10000 $ 0.60729 $ 021760 $ 139201 $ - $ 1031690 2007 2009 8.10000 0.66727 0.08685 1.11492 - 9.96904 2008 2010 8.10000 0.60000 021492 0.90583 0.03702 9.85777 2009 2011 8.10000 0.54469 Q20531 1.12441 0.05300 10.02741 2010 2012 8.10000 035273 0.19508 1.75052 0.05278 10.45111 2011 2013 8.10000 0.49516 0.13965 2.02267 0.02729 10.78477 2012 2014 8.10000 038382 0.16288 233093 0.04823 11.02586 2013 2015 8.10000 0.48268 0.16595 223209 0.04516 11.02588 2014 2016 8.10000 0.48461 0.16428 2.16440 0.11261 11.02590 2015 2017 8.10000 0.49739 0.14963 230637 0.11400 11.16739 Source: Dubuque County Auditor's Office. 157 CITY OF DUBUQUE,IOWA PRINCIPAL PROPERTY TAXPAYERS TABLE 7 CURRENT YEAR AND NINE YEARS AGO (IN THOUSANDS OF DOLLARS) 2017 2008 Percentage of Percentage of Total City Total City Taxable Taxa.ble Taxable Taxa.ble TaYpayer Value Rank Value Value Rank Value Peninsula Gaming Company LLC $ 63,779 1 2.40 % KennedyMallInc. 38,926 2 1.47 $ 26,372 1 1.45 % Walter Development LLC 28,270 3 1.07 11,288 6 0.62 Progressive Processing LLC(Hormel) 25,370 4 0.96 Medical Associates Realty LLC 21,353 5 0.80 13,631 4 0.75 The McGraw Hill Comparues Ina 16,225 6 0.61 11,437 5 0.63 Queck Capital Management LLC 15,853 7 0.60 Platinum Holdings LLC 15,749 8 0.59 11,179 7 0.61 Nordshom,Ina 14,800 9 0.56 16,834 3 092 Fle�teel Indushies Ina 13,332 10 0.50 Otto A LLC 17,500 2 0.96 Asbury Dubuque LLC 9,896 8 0.54 Minglewood Limited PartnersMp 9,948 9 0.55 American Trust&Savings Bank 9,947 10 0.55 $ 253,657 9.56 % $ 138,032 7.58 % Source: Dubuque County Auditor's Office 158 CITY OF DUBUQUE,IOWA TABLE 8 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (IN THOUSANDS OF DOLLARS) Total Percent of Total Tas Ratio of Tas Current Cmrent Delinquent Total Tas Collections Outstanding Delinquent Fiscal Levy Levy Tas Tases Tas Collections W Total Delinquent TasesW Total Year Year (1) Collections Collected Collections (2) TasLevy Tases TasLevy 2008 2007 18,211 18,160 99J % 3 18,163 99J % 215 1.18 2009 2008 18,992 18,690 98.4 5 18,695 98.4 262 138 zoio zoo9 i9,iza i9,in 99.9 (io) i9,io� 99.9 zoz i.ob 2011 2010 19,906 19,793 99.4 13 19,806 99.5 276 139 2012 2011 21,340 21,339 100.0 1 21,340 99.9 185 0.87 2013 2012 22,789 22,752 99.8 7 22,759 99.9 182 0.80 2014 2013 23,993 23,915 99J 8 23,923 99J 211 0.88 2015 2014 7A,866 7A,715 99.4 7 7A,722 99.4 362 1.46 2016 2015 7A,944 7A,889 100.0 84 7A,973 100.0 288 1.15 2017 2016 26,435 26,318 99.6 2 26,320 99.6 354 134 (1)Excludes tas increment levy. (2)Includes tases collected in June by the County but not received by the City until July. 159 CITY OF DUBUQUE RATIOS OF OUTSTANDINGDEBT BY TYPE LAST TEN FISCAL YEARS Govemmental Activities Business- General TaxIncrement TaxIncrement General Fiscal Obligation Financing Financing Other Loans Obligation Year Bonds Bonds Notes Payable Bonds 2008 $ 21,752,907 $ 24,879,116 $ 1,279,885 $ - $ 11,384,371 2009 25,941,693 24,363,262 1,169,684 15Q000 14,448,770 2010 27,887,864 24,449,674 1,049,696 282,857 23,957,802 2011 32,561,048 23,037,222 1,931,348 282,857 25,254,652 2012 53,087,811 22,258,283 1,767,664 4,735,714 35,108,003 2013 56,517,165 21,92Q537 1,235,903 5,638,871 34,921,131 2014 52,568,648 21,556,435 1,03Q036 5,541,428 32,738,862 2015 59,614,941 21,165,946 811,608 5,444,285 45,868,394 2016 58,869,812 20,764,818 625,429 5,347,142 46,806,473 2017 53,80Q719 2Q333,690 451,763 4,65Q000 44,487,023 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 2016 data changed to include premium and discounts in the outstanding computation. (1)Population and personal income data can be found in Table 18. * Personal Income unavailable at report date 160 TABLE 9 Type ACtrvlhes Capital Other Total Percentage of Loan Revenue Loans Primary Personal Per Notes Bonds Payable Govemment Income (1) Capita(1) $ 611,977 $ 49Q000 $ - $ 6Q398,256 3 % $ 2,174 3,914,076 1,434,713 39Q890 71,813,088 3 1,245 8,289,621 1,115,430 371,978 87,404,922 4 1,515 33,195,408 6,777,793 2,252,109 125,292,437 5 2,174 61,957,749 6,521,188 331,235 185,767,647 7 3,223 75,415,431 6,26Q299 309,304 202,218,641 8 3,508 82,924,949 14,151,437 286,263 21Q798,058 8 3,657 85,477,970 34,543,432 262,055 253,188,631 10 4,393 104,156,549 34,196,999 236,623 271,003,845 10 4,637 11Q513,944 33,84Q566 5,209,900 273,287,605 * 4,648 161 CITY OF DUBUQUE RATIOS OF GENERAL BONDED DEBT OUTSTANDING TABLE 10 LAST TEN FISCAL YEARS DOLLARS IN THOUSANDS EXCEPT PER CAPITA Percentage of Percentage of General Taxa.ble Taxa.ble Assessed Assessed Fiscal Obligation Value of Value of Value of Value of Per Yeu Bonds Proper[y Property Proper[y Proper[y Capita 2008 $ 33,134 $ 1,814,365 1.83 % $ 2,870,178 1.15 % 574 2009 40,387 1,939,773 2.08 3,171,681 127 700 2010 51,770 2,023,899 2.56 3,239,112 1.60 899 2011 57,700 2,159,622 2.68 3,349,823 1.73 1,003 2012 87,962 2,243,474 3.93 3,406,186 2.59 1,530 2013 91,312 2,337,129 3.91 3,476,638 2.63 1,586 2014 85,162 2,398,151 3.56 3,503,774 2.43 1,480 2015 105,166 2,522,048 4.18 3,686,202 2.86 1,830 2016 105,451 2,508,933 421 3,723,003 2.84 1,808 2017 98,037 2,652,700 3.71 3,914,425 2.51 1,672 *Prior yeu information ktas been modified to net GO Bonds with the fund balance in Debt Service. *General Obligation Bonds ue netted with the fund balance in the Debt Service fund. 162 CITY OF DUBUQUE,IOWA DIRECT AND OVERLAPPING DEBT TABLE 11 AS OF JUNE 30,2017 Tax Tax NetGeneral Incremerrt Incremerrt Obligation Financing Bonds Financing Sales Tax Loans Percentage Amount Bonded Debt Notes Revenue Payable Applicable Applicable to Jurisdic[ion Outstanding(1) Bonds toCity Government Direct,CityofDubuque,Iowa $ 53,80Q719 $ 2Q333,690 $ 451,763 $ - $ 4,650,000 100.00 % $ 79,236,172 Overlapping: Dubuque County 11,435,000 - - - 324,245 0.06 % 7,056 Dubuque Community School Dishict - - - 54,513,000 - 99.88 % 54,447,584 Northeast Iowa Community College - - - - 41,925,000 0.06 % 25,155 TotalOverlapping 11,435,000 - - 54,513,000 42,249,245 54,479,795 Total $ 65,235,719 $ 2Q333,690 $ 451,763 $ 54,513,000 $ 46,899,245 $ 133,715,967 Source: Dubuque County Auditor,Dubuque Community School District and Northeast Iowa CommuniTy College (1)Excludes debt reported in enterprise funds. 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 govemments that is bome by the residents and businesses of Dubuque. This process recognizes that,when considering the city's ability to issue and repay long-term debt,the entue debt burden bome by the residents and businesses should be taken into account. However,this does not imply that every taxpayer is a resident, and therefore respo nsible for repaying the debt, of each overlapping govemment. m w CITY OF DUBUQUE, IOWA LEGAL DEBT NI.ARGIN INFORMATION LAST TEN FISCAL YEARS (IN THOUSANDS OF DOLLARS) 2008 2009 2010 2011 Debitlimit $ 148,824 $ 163,621 $ 167,247 $ 174,333 Total net debt applicabletolimit 60,485 76,182 101,152 92,443 Legal debit margin $ 88,339 $ 87,439 $ 66,095 $ 81,890 Total net debt applicable to the debt limit as a percentage of debt limit 40.64% 46.56 % 60.48 % 53.03 % 164 TABLE 12 2012 2013 2014 2015 2016 2017 $ 177,668 $ 181,668 $ 183,621 $ 193,114 $ 196,031 $ 207,174 142,316 143,303 149,923 173,597 165,838 143,800 $ 35,352 $ 38,365 $ 33,698 $ 19,517 $ 30,193 $ 63,374 80.10 % 78.88 % 81.65 % 89.89 % 84.60 % 69.41 % Legal Debt Margin Calwlation for Fiscal Year 2017 Estimated actual value $ 4,143,482,182 Debt limit- 5%of total acbxal valuation $ 207,174,109 Debt applicable to limit: (Including GO Debt, TIF Debt, and Lease Obligations Paid from General Fund) $ (143,800,280) Legal debtmargin $ 63,373,829 165 CITY OF DUBUQUE,IOWA REVEN[JE DEBT COVERAGE TABLE 13 LAST TEN FISCAL YEARS (IN THOUSANDS OF DOLLARS) Gross Operating NetRevenue NextFiscalYear's Fiscal Revenues Expenses AvailableFor Deb[ServiceRequiremen[s Coverage Year (1) (2) Debt Service Principal Interest Total (3) W ATER UTILITY 2008 $ 4,933 $ 3,959 $ 974 $ 39 $ 57 $ 96 10.15 2009 5,391 5,196 195 70 52 122 1.60 2010 5,353 5,153 200 70 182 252 0J9 2011 5,680 a 5,316 364 255 238 493 0J4 2012 6,087 5,895 192 260 231 491 039 2013 6,944 5,391 1,553 432 344 776 2.00 zoia �,zss �,ssa (ioi) z�s zis a9s (o.zo) 2015 7,511 6,322 1,189 285 211 496 2.40 2016 8,508 4,826 3,682 473 305 778 4.73 2017 8,589 4,678 3,911 488 291 779 5.02 STORMWATER UTILITY 2009 2,402 1,309 1,093 75 58 133 822 2010 2,357 1,320 1,037 100 178 278 3.73 2011 3,023 1,679 1,344 231 7A3 6 474 2.84 2012 3,211 1,497 1,714 462 268 730 235 2013 3,194 2,019 1,715 320 309 d 629 1.87 2014 3,7A0 1,833 1,407 331 311 c 642 2.19 2015 3,551 2,162 1,389 341 356 c 697 1.99 2016 3,948 2,140 1,808 352 346 c 698 2.59 2017 4,27A 2,601 1,623 836 797 c 1,633 0.99 SEWAGE DISPOSAL WORKS 2009 6,084 5,093 991 - 7 7 141.57 2010 5,995 5,331 664 33 382 415 1.60 2011 6,699 6,029 670 34 1,129 6 1,163 0.58 2012 7,878 7,018 860 1,719 1,443 3,162 027 2013 8,951 6,113 2,838 2,326 1,423 d 3,749 OJ6 2014 1Q083 6,754 3,329 2,603 1,358 c 3,961 0.84 2015 1Q629 6,950 3,679 2,610 1,435 c 4,045 0.91 2016 12,237 7,702 4,535 2,652 1,454 c 4,106 1.10 2017 12,475 6,082 6,393 2,707 1,442 c 4,149 1.54 PARKING BONDS 2008 2,27A 1,495 729 7A0 23 263 2.77 2009 2,270 1,412 858 250 12 262 327 Parking revenue bonds matured in 2010. a)Restated Prin&Int to remove SRF debt service classified as subordinate debt for FY2010 thru FY 2016. b)Restated W reflect actual SRF principal and interest. c)Includes estimated SRF debt service payments for next fiscal year based on FY ending debt balance. d)contains estimates of prin/int pymts. (1)Total revenues(including interest). (2)Total operating expenses exclusive of depreciation. (3)Coverage is computed by dividing net revenue available for debt service by debt service requirement. 166 CITY OF DUBUQUE, IOWA WATER AND SEWER RECEIPT HISTORY TABLE 14 LAST TEN FISCAL YEARS Water Sewer Gallons Fiscal Year Revenue Revenue Billed 2008 $ 4,747,206 $ 5,348,001 1,971,517,064 2009 5,085,319 5,684,459 1,836,957,848 2010 5,209,591 5,710,768 1,822,051,488 2011 5,561,910 6,502,740 1,903,364,420 2012 6,298,768 8,682,927 1,914,175,940 2013 6,701,771 8,472,382 1,945,227,547 2014 7,028,091 9,756,996 1,845,151,329 2015 7,231,393 10,417,833 1,864,028,948 2016 8,159,240 11,772,847 1,883,797,577 2017 8,248,796 12,000,115 1,844,997,668 Source: Cash basis receipt ledgers. *Revenue includes penalties and investment earnings collected. New in 2015 -revenue does not include sales tax. All years reflect this change. WATER RATE SCHEDULE HISTORY Unit Price by Fiscal Year Steps Gallons 2017 2016 2015 2014 2013 2012 2011 First 22,440 � $ 0.00474 $ 0.00447 $ 0.00406 $ 0.00387 $ 0.00355 $ 0.00309 $ 0.00294 Next 89,760 a� 0.00387 0.00365 0.00332 0.00316 0.00290 0.00252 0.007A0 Next 261,800 a� 0.00361 0.00340 0.00309 0.00294 0.00270 0.00235 0.0027A Next 374,000 a� 0.00280 0.00301 0.00274 0.00261 0.00239 0.00208 0.00198 Excess a� 0.00280 0.00264 0.007A0 0.00229 0.00210 0.00183 0.00174 167 CITY OF DUBUQUE,IOWA WATER METERS BY RATE CLASS TABLE ls LAST TEN FISCAL YEARS Fiscal Year Residential Commercial Industrial Government Total 2008 19,970 1,878 70 45 21,963 2009 2Q058 1,895 72 48 22,073 2010 2Q204 1,887 71 48 22,210 2011 2Q338 1,904 79 51 22,372 2012 2Q532 1,902 79 52 22,565 2013 2Q753 1,921 80 53 22,807 2014 2Q887 1,945 81 68 22,981 2015 2Q969 1,968 83 76 23,096 2016 21,157 1,972 84 104 23,317 2017 21,522 2,061 83 114 23,780 168 CITY OF DUBUQUE,IOWA LARGEST WATER AND SEWER CUTOMERS TABLE 16 FISCAL YEAR 2017 Percentage of Percentage of Water Total Water Sewer Total Sewer Customer Receipts Rank Receipts Receipts Rank Receipts Rousselot Inc#155296 $ 389,690 1 4.72 % Hormel Foods Corporation* 177,151 2 2.15 $ 400,120 1 333 % Prairie Fums Dairy Inc 121,670 3 1.48 Hormel Foods Corporation* 105,165 4 127 232,069 2 1.93 Krieg Boys 52,827 5 0.64 Finley Hospital 51,540 6 0.62 86,739 4 0.72 Premier Linen&Dry Clearung 50,848 7 0.62 105,303 3 0.88 Perunsula Gaming Co LLC 48,273 8 0.59 65,153 9 0.54 Tablemound InvestmenTs 41,690 9 0.51 84,860 5 0.71 Mercy Medical Center* 39,873 10 0.48 StoneMll Nursing Home 66,235 8 0.55 Grand Hubor Resort&Waterpuk 56,532 10 0.47 Alpine Puk Community 69,262 7 0.58 Dubuque Historical Society 77,063 6 0.64 Total Receipts $ 8,248,796 $ 12,000,115 *Same company,sepuate accounts.Previously combined several accounts under same business,now listed seperately. 169 CITY OF DUBUQUE, IOWA SALES TAX INCREMENT BONDS TABLE 1� FISCAL YEAR ENDING JUNE 30,2017 Estimated Second Lien Remaining Sales Tax Senior Lien Remaining Series 2014 Revenues Increment Series 2015A Revenues After Net Debt After Second Fiscal Revenue Net Debt Service Senior Lien Service Lien Debt Year Receipts* (1) Debt Service (2) Service 2015 * $ 2,037,489 $ - $ 2,037,489 $ - $ 2,037,489 2016 * 2,532,846 - 2,532,846 - 2,532,846 2017 * 3,945,134 - 3,945,134 (323,100) 3,622,034 2018 4,744,708 (762,650) 3,982,058 (323,100) 3,658,958 2019 4,782,875 (762,650) 4,02Q225 (323,100) 3,697,125 2020 4,783,907 (762,650) 4,021,257 (323,100) 3,698,157 2021 5,574,673 (762,650) 4,812,023 (323,100) 4,488,923 zozz 6,sso,9ss ��6z,6so� s,6is,zss �szs,ioo� s,z9s,iss zozs 6,s66,i9s �z,�6�,6so� a,o9s,sas �ass,ioo� s,66o,aas zoza 6,9s6,ssi �z,��i,000� a,iss,ssi �i,s9s,soo� z,�9i,ssi zozs 6,9s�,aoi �z,�6s,969� a,iss,asz �i,aoo,soo� z,�s�,9sz zoz6 6,9sz,oa6 �z,��i,osi� a,isi,ois �i,saa,zso� z,ss6,�6s zoz� 6,9sz,ssz �z,�6s,�i9� a,iss,sis �i,s6s,000� z,szo,sis zozs 6,9a�,a9a �z,�6s,s9a� a,i�9,ioo �i,s6s,000� z,sia,ioo zoz9 6,�zs,�so �z,�6�,soo� s,9s6,aso �i,s6s,000� z,s9i,aso 2030 6,25Q000 (2,768,800) 3,481,200 - 3,481,200 2031 4,467,912 (686,400) 3,781,512 - 3,781,512 2032 2,217,912 - 2,217,912 - 2,217,912 2033 2,25Q000 - 2,25Q000 - 2,25Q000 *Actual receipts. (1)Net of capitalized interest and the debt service reserve fund. (2)Net of capitalized interest 170 CITY OF DUBUQUE,IOWA DEMOGRAPHIC AND ECONOMIC STATISTICS TABLE ls LAST TEN CALENDAR YEARS Per Capita Public Personal Median School Unemployment Personal Income Age Enrollment Rate Year Population Income (1) (2) (3) (4) 2008 57,686 $ 2,237,466,882 $ 38,787 38 1Q614 3.8 % 2009 57,686 2,155,437,390 37,365 37 1Q697 62 2010 57,686 2,188,952,956 37,946 37 1Q517 6.4 2011 57,637 2,354,759,635 4Q855 37 1Q467 5.8 2012 57,637 2,453,952,912 42,576 37 1Q469 52 2013 57,637 2,489,053,845 43,185 39 1Q513 4.6 2014 57,637 2,56Q293,177 44,421 39 1Q578 4.4 2015 57,637 2,645,653,574 45,902 38 1Q634 3.7 2016 58,436 2,734,454,184 46,794 38 1Q588 3.9 2017 58,799 * * 38 1Q556 2.9 Data Sources: (1) U.S. Department of Commerce,Bureau of Economic Analysis. (2) Greater Dubuque Development Corporation. (3) Dubuque Community School Dishict (4) Iowa Deparhnent of Employment Services as of June 30. * Unavailable atreport date. 171 THIS PAGE IS INTENTIONALLY LEFT BLANI� 172 CITY OF DUBUQUE,IOWA PRINCIPAL EMPLOYERS TABLE 19 CURRENT YEAR AND NINE YEARS AGO 2017 2008 Percentage of Percentage of #of Total City #of Total City Employer Employees Rank Employment{1) Employees Rank Employment{1) Dubuque Community Schools 2,670 1 4.88 % 1,800 1 3.44 % JohnDeere (2) 2,600 2 4.75 1,627 2 3.10 Mercy Medical Center 1,360 3 2.49 1,324 3 2.53 Medical Associates 1,030 4 1.88 743 6 1.42 Unity Point Health-Finley Hospital 900 5 1.65 920 4 1.76 City of Dubuque 820 6 1.50 750 5 1.43 Andersen Windows 750 7 137 604 7 1.15 Cottingham &Butler 572 8 1.05 Sedgwick 550 9 1.01 Dubuque Bank&Trust and Heartland Financial USA, 538 10 0.98 Prudential Retirement 450 10 0.86 Dubuque County 450 10 0.86 Flexsteel 550 8 1.05 Woodward Communications,Inc. 500 9 0.95 11,790 21.56 % 9,718 18.55 % Source: Greater Dubuque Development Corp. (1)Based on the percentage of total employment for Dubuque area from the U.S. Deparhnent of Labor,Bureau of Labor Statistics. (2)Located just outside City Limits. 173 CITY OF DUBUQUE,IOWA FULL-TIME EQUIVALENT CITY GOVERND�IENT EMPLOYEES BY FUNCTION/DEPARTMENT LAST TEN FISCAL YEARS Full-Time 2008 2009 2010 2011 Public Safety Emergency Communications 11.00 13.00 13.00 13.00 Fire 90.00 90.00 90.00 90.00 Police 101.00 108.67 110.84 11334 Building Services 7.00 8.00 8.00 9.00 Public Works Public Works 87.00 88.00 87.42 87.42 Engineering 25.00 26.00 26.00 27.00 Health&Social Services Health Services 4.00 4.00 4.00 4.00 Human Rights 3.00 3.00 3.00 3.00 Cultural and Recreation Civic Center 0.15 0.15 0.15 0.15 Library 18.00 18.00 18.00 18.00 Park 21.92 21.92 22.51 22.50 Recreation 7.93 7.93 8.43 8.93 Community&Economic Development Community/Economic Dev 3.00 3.00 3.00 3.00 Housing Services 18.00 22.00 22.00 2225 Planning Services 8.00 8.00 8.00 8.00 General Govemment Auport 12.00 12.00 12.00 12.00 Cable TV 2.00 2.00 2.00 2.00 City Clerl�s Office 3.00 3.00 3.00 3.00 City Manager's Office 11.00 13.50 15.00 15.00 Finance 14.00 14.00 14.00 14.00 Legal 3.00 4.00 4.66 5.00 Information Services 7.00 7.00 7.00 7.00 Business Type Water 23.00 23.00 24.00 25.00 Water&Resource Recovery Center 18.00 18.00 18.00 18.00 Parking 7.00 7.50 9.00 9.00 Transit 7.00 7.00 6.00 7.00 Total 512.00 532.67 539.01 546.59 Source: City Budget Records Departrnenis with employees who ue allocated to more than one function ue reflected in the uea with lugest number of employees. 174 TABLE 20 Equivalent as of June 30 2012 2013 2014 2015 2016 2017 13.00 13.00 13.00 13.00 13.00 14.00 90.00 90.00 90.00 90.00 90.00 90.00 114.25 115.00 115.0 8 115.8 8 116.00 116.00 9.00 9.00 924 11.66 12.00 12.00 87.42 86.17 86.42 86.42 86.42 86.42 27.00 29.00 29.00 29.00 30.00 30.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 5.00 5.00 5.00 5.00 5.00 0.15 0.15 0.15 0.15 0.15 0.15 18.00 19.00 19.00 19.00 19.00 19.00 23.50 23.50 23.50 23.50 23.50 22.50 9.93 9.93 9.93 10.93 11.93 11.93 3.00 3.00 4.00 4.00 2.00 2.00 23.00 25.80 27.00 26.00 21.00 25.00 8.00 8.00 8.00 8.00 8.00 8.00 12.00 12.00 12.00 12.00 12.00 12.00 2.00 2.00 2.00 2.00 2.00 2.00 3.00 3.00 3.00 3.00 3.00 3.00 14.00 15.00 15.00 16.00 16.00 16.00 14.00 14.00 14.0 8 14.8 8 15.00 15.00 5.00 5.00 5.00 5.00 5.00 5.00 7.00 7.50 8.00 8.00 8.00 8.00 25.00 25.00 26.00 26.00 25.00 25.00 18.00 18.00 18.00 18.00 17.00 17.00 9.00 9.00 9.00 9.00 9.00 8.00 6.00 6.00 632 8.00 13.00 13.00 54925 557.05 561.72 568.42 567.00 570.00 175 CITY OF DUBUQUE,IOWA OPERATING INDICATORS BY FUNCTION/PROGRAD�I LAST TEN FISCAL YEARS Fiscal- 2008 2009 2010 2011 Public Safety Police Physical arrests 5,090 6,325 6,365 6,350 Traffic violations 6,881 8,801 8,901 12,289 Parking violations 4Q741 36,457 37,056 35,799 Fire Number of calls answered 4,699 4,480 4,557 4,884 Inspections conducted 624 443 1,035 555 Sewer Sewage system Daily average treatment in gallons 10,31Q000 7,981,000 9,068,000 8,132,000 Maximum daily capacity of treatment plant in gallons 13,SOQ000 21,131,000 21,131,000 23,24Q000 Water systems Daily average consumption in gallons 7,812,000 7,845,000 7,684,000 7,636,000 Maximum daily capacity of plant in gallons 17,OOQ000 18,OOQ000 18,OOQ000 18,OOQ000 Refuse(Municipal Collection) Tonnage 11,798 10,774 1 Q615 1 Q660 Sources: Various City Deparhnents. Statistics updated for fiscal year 2006, 2007&2008. 176 TABLE21 Year 2012 2013 2014 2015 2016 2017 6,319 6,106 5,532 3,767 3,397 5,077 11,836 12,089 8,959 7,354 9,058 9,063 34,910 35,516 36,768 37,635 38,880 33,953 5,307 4,792 5,165 5,603 5,750 5,990 589 512 471 791 993 1,649 7,817,000 1Q987,000 7,091,000 7,237,000 7,016,000 7,377,000 23,24Q000 23,24Q000 24,SOQ000 24,SOQ000 24,SOQ000 24,SOQ000 7,226,000 6,953,000 7,235,000 6,956,000 7,068,184 7,20Q000 18,OOQ000 18,OOQ 000 18,OOQ000 18,OOQ000 18,OOQ000 18,OOQ000 11,180 1 Q 535 10,311 1 Q690 11,098 11,284 177 CITY OF DUBUQUE,IOWA CAPITAL ASSETS BY FUNCTION LAST TEN FISCAL YEARS Fiscal- 2008 2009 2010 2011 Public safety Police Stations 1 1 1 1 Patrol units 19 19 22 22 Fire Stations 6 6 6 6 Aerial trucks 3 3 3 3 Public works Streets Miles(1) 317 320 321 325 Street lights(1) 1,855 1,877 1,916 1,931 Health and social services Hospital 2 2 2 2 Number of patient beds 405 405 389 389 Cultural and recreation Library 1 1 1 1 Golf 1 1 1 1 Parks 47 47 48 48 Acreage 898 898 901 901 Recreation Civic center 1 1 1 1 Swimming pools 2 2 2 2 Softball fields 8 7 7 7 Baseball fields 1 1 1 1 Tennis courts 19 20 20 20 Sewer Sewage system Miles of sanitary sewer(1) 290 295 300 300 Miles of storm sewers(1) 122 143 144 150 Number of treatmentplants 1 1 1 1 Number of service connectors 21,633 21,347 21,599 21,702 Water systems Miles of water mains 316 317 318 319 Number of service connectors 21,243 21,347 21,986 22,092 Number of city owned fire hydrants 2,812 2,831 2,843 2,854 Sources: Various City Deparhnents. (1) City GIS System 178 TABLE 22 Year 2012 2013 2014 2015 2016 2017 1 1 1 1 1 1 22 22 22 22 22 22 6 6 6 6 6 6 3 3 3 3 3 3 328 329 331 333 332 336 2,081 2,084 2,110 2,161 2,162 2,184 2 2 2 2 2 2 389 389 389 373 373 373 1 1 1 1 1 1 1 1 1 1 1 1 51 51 51 53 53 53 1,001 1,001 1,001 974 974 974 1 1 1 1 1 1 2 2 2 2 2 2 7 7 7 11 11 11 1 1 1 1 1 1 20 20 20 20 20 20 304 304 307 320 322 326 155 141 144 145 147 152 1 1 1 1 1 1 22,393 22,428 22,888 22,928 23,119 23,343 320 321 315 318 329 7 22,161 22,536 22,702 22,787 22,970 23,443 2,863 2,879 2,336 2,346 2,380 2,450 179 CITY OF DUBUQUE,IOWA Table 23 RETAIL SALES LAST TEN CALENDAR YEARS Taxable Number of Year Retail Sales Businesses 2009 $ 961,287,890 2,026 2010 971,OSQ048 2,043 2011 1,014,284,468 2,009 2012 1,06Q222,499 1,993 2013 1,057,837,212 2,008 2014 1,24Q664,593 3,337 2015 1,305,893,119 3,347 2016 1,316,561,626 2,997 2017 * * Data Sources: Iowa Department of Revenue Prior years not available *Unavailable at report date 180 Compliance Section June 30, 2017 City of Dubuque, Iowa 181 THIS PAGE IS INTENTIONALLY LEFT BLANI� 182 EideBailly cr�a eusixEss nunw�s 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 GovernmentAuditing Standards To the Honorable Mayor and Members of the City Council City of Dubuque, Iowa We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund inforxnation of the City of Dubuque, Iowa, (City) as of and far the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated December 21, 2017. The financial statements of Dubuque Initiatives and Subsidiaries, a discretely presented component unit which was audited by other auditors, were not audited in accordance with GavernmentAudifing Standards, and accordingly, this repart does not extend to those financial statements. The financial statements of Dubuque Convention and Visitors Bureau, a discretely presented component unit, were not audited in accordance with GavernmentAuditing Standards, and accordingly, this report does not extend to those financial statements. Internal Control over Financial Reporting In planning and perfornung our audit of the financial statements, we considered the City's internal control over financial reporting(internal control)to deterxnine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effecriveness of the City's internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. However, as described in the accompanying schedule of findings and questioned costs, we identified a deficiency in internal control that we consider to be a material weaknesses. What inspires you,inspires us. eidebailly.mm 183 375 E.Horsetooth Rd.Bldg.4200 Fort Collins,CO 805253198 TF 800.4082929 T 970223.8825 F 970223.OS V EOE A deficiency in inte�nal cont�ol exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions,to prevent, or detect and correct, misstatements on a timely basis. A mate�ial weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiency described in the accompanying schedule of findings and questioned costs as item 2017-A to be a material weakness. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness,yet important enough to merit attention by those charged with governance. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement,we performed tests of its compliance with certain provisions of laws,regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However,providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly,we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Gove�nment Auditing Standa�ds. However,we noted certain immaterial instances of non- compliance which are described in Part IV of the accompanying schedule of findings and questioned costs. Comments involving statutory and other legal matters about the City's operations for the year ended June 30,2017 are based exclusively on knowledge obtained from procedures performed during our audit of the financial statements of the City and are reported in Part IV of the accompanying schedule of findings and questioned costs. Since our audit was based on tests and samples,not all transactions that might have had an impact on the comments were necessarily audited. The comments involving statutory and other legal matters are not intended to constitute legal interpretations of those statutes. City's Responses to Findings The City's responses to the finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The City's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly,we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Gove�nment Auditing Standa�ds in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. �GT Fort Collins, Colorado December 21,2017 184 EideBailly cr�a eusixEss nunw�s Independent Auditor's Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance To the Honorable Mayor and Members of the City Council City of Dubuque, Iowa Report on Compliance for Each Major Federal Program We have audited the City of Dubuque, Iowa's (City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City's major federal programs far the year ended June 30, 2017. 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 federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's ResponsibiliTy Our responsibility is to express an opinion on the compliance for each of the City's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in GavernmentAuditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of FederalRegulationsPart 200, UniformAdministrafiveRequirements, CostPrinciples, andAudit Requirements forFederalAwards(Uniforxn Guidance). Those standards and the Uniforxn Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and perforxning such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal deterxnination of the City's compliance. Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs for the year ended June 30, 2017. What inspires you,inspires us. eidebailly.mm 185 375 E.Horsetooth Rd.Bldg.4200 Fort Collins,CO 805253198 TF 800.4082929 T 970223.8825 F 970223.OS V EOE Report on Internal Control over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the compliance requirements referred to above. In planning and performing our audit of compliance,we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly,we do not express an opinion on the effectiveness of the City's internal control over compliance. A deficiency in inte�nal cont�ol ove�compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions,to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis.A mate�ial weakness in inte�nal cont�ol ove�compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a compliance requirement will not be prevented, or detected and corrected, on a timely basis.A significant deficiency in inte�nal cont�ol ove�compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance,yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses and significant deficiencies may exist that have not been identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However,we identified certain deficiencies in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as items 2017-001,2017-002 and 2017-003 that we consider to be significant deficiencies. The City's responses to the internal control over compliance findings identified in our audit are described in the accompanying schedule of findings and questioned costs and corrective action plan. The City's responses were not subjected to the auditing procedures applied in the audit of compliance and, accordingly,we express no opinion on the responses. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly,this report is not suitable for any other purpose. �GT Fort Collins, Colorado December 21, 2017 186 City of Dubuque, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2017 Pass-[hrough Federal Entiry Amounts Passed- Federal GranWr/Pass-Through CFDA Identifying Through W GranWr/PrograrnorClusterTiHe Number Number Expenditures Subrecipienfs U.S.Dwartrnent of Commerce Directprograrn: Economic Development Cluster EconomicAdjustrnentAssistance 11307 $ 286600 $ U.S.Deoartrnent of Housine and Urban Develooment Directprograrn: CDBG-Entitlement Grants Cluster: Communiry Development Block Grants/Entitlement Grants-2014 14.218 861,946 119,869 Communiry Development Block Grants/Entitlement Grants-2015 14.218 233,174 - Communiry Development Block Grants/Entitlement Grants-2016 14.218 305 363 Total CDBG-Entitlement Grants Cluster 1 400 483 119 869 Pass-[hrough program from: Iowa Department of Economic Development Communiry Development Block Grants/ State's Prograrn and Non-Fntitlement Granfs in Hawaii 14128 08-DRH-212 5$346 Directprograrn: Shelter Plus Care 14.238 71 118 Directprograrn: CDBG-Disaster Recovery Grants-Pub.L.No.113-2 Cluster NationalDisasterResilienceCompetition 14.272 6J4681 Directprogarn: Sution 8 ProjuGBased Cluster Lower Income Housing Assistance Program- Sution 8 Moderate Rehabilitation 14.856 75 532 Housing Voucher Cluster Section 8 Housing Choice Vouchers-IA087V 14.871 5,466,591 - Section 8 Housing Choice Vouchers-IA087FSH 14.871 132 476 Total Housing Voucher Cluster 5 599 067 Lead-Based PaintHazard Control in Privately-Owned Housing 14.900 1 295 576 Total U.S.Department of Housing and Urban Development 9 1 J4 803 119 869 U.S.Dwartrnent ofJustice Pass-[hrough program from: Iowa Departrnent of Justice: ViolenceAgainstWomenFo�rnulaGrants 16.588 VW-16-42B-CJ 3577 Public Safery Partnership and Communiry PolicingGrants 16J10 14HoGSpots-04 2798 Directprograrn: Fdward Byme Memorial Justice AssistanceGrantPrograrn 16J38 14,745 - Pass-[hrough program from: Dubuque Counry SheriR's Office: Fdward BymeMemorial Justice AssistanceGrantPrograrn 16J38 14-JAG-111022 28350 43,095 Directprograrn: Body Wom Carnera Policy and Implementation 16.835 52 248 Total U.S.Department of Justice 101 718 187 City of Dubuque, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2017 Pass-[hrough Federal Entiry Amounts Passed- Federal GranWr/Pass-Through CFDA Identifying Through W GranWr/PrograrnorClusterTitle Number Number Fxpenditures Subrecipients U.S.DepartmentofTransportation Dirutprograrn: AiiportlmprovementProgram-Sitework 20.106 $ 78$867 $ - AiiportlmprovementProgram-Sitework 20.106 45$823 - AiiportlmprovementProgram-LandsidePaving 20.106 278,332 AiiportImprovementProgram-Te�minalServiceRoad 20.106 22Q085 AiiportlmprovementPrograrn-BuildingConstruction 20.106 61,007 - AiiportImprovementPrograrn-OverheadLighting 20.106 34,314 - AiiportlmprovementPrograrn-UtiliryImprovements 20.106 21,287 - AiiportlmprovementProgram-BoardingBridge 20.106 17,588 AiiportImprovementProgram-Te�minalApron 20.106 4,316 AiiportlmprovementPrograrn-BuildingDesign 20.106 3,059 - AiiportImprovementProgram-PavementStudy 20.106 2718 1 890 396 Highway Planning and Construction Cluster: Pass-[hrough program from: Iowa Department of Transportatio¢ Highway Planning and Construction 20.205 HDP-2100-(679)J131 1,557,252 - Highway Planning and Construction 20.205 HDP-2100-(657)J131 1,323,491 - Highway Planning and Construction 20.205 S1P-U-2100(634)J031 1,069,799 - Highway Planning and Construction 20.205 HDP-2100-(66{)J131 565,804 - Highway Planning and Construction 20.205 S1P-U-2100(681)J031 41,407 - Highway Planning and Construction 20.205 TAP-U-2100(683)-8I31 411,J43 - Highway Planning and Construction 20.205 SB-IA-2100(675)-TT31 945,772 - Highway Planning and Construction 20.205 TCSP-052-2(129)-9531 1,311 - Highway Planning and Construction 20.205 EDP-2100-(684)-7Y31 154,193 - Highway Planning and Construction 20.205 EDP-2100-(684)-7Y31 34,002 - Highway Planning and Construction 20.205 HDP-2100-(655)J031 65 551 Total Highway Planning and Construction Cluster 6170 525 Federal Transit Cluster: Directprograrn: Federal TransiL Fo�rnula Grants 20.507 1,012,571 - Federal TransiL Fo�rnula Grants 20.507 99,120 - Pass-[hrough program from: Iowa Departrnent of Transportatio¢ Federal TransiL Fo�rnula Grants 20.507 2016-017-210-16 290 419 1,402,110 Directprograrn: StateofGoodRepairGrantsPrograrn 20.525 IA-040124-00 1,147,567 - State of Good Repair Grants Prograrn 20.525 IA-95-X021-00 1,084,932 State of Good Repair Grants Prograrn 20.525 IA-M-0124 18 024 2 250 523 Total Federal Transit Cluster 3 652 633 Pass-[hrough prograrn from: Iowa Departrnent of Transportatio¢ Fo�rnula Grants for Rural Areas 20.509 ICB-CY16 7 238 Transit Services Prograrn Cluster: Enhanced Mobiliry of Seniors and Individuals with Disabilities 20.513 IA-2016-026-210-17 44 213 Highway Safery Cluster Iowa Department of Public Safery: State and Communiry Highway Safery 20.600 PAP 17-402-MOOP 3Q838 - State and Communiry Highway Safery 20.600 PAP 16-402-MOOP 7 281 Total Highway Safery Cluster 38 119 Total U.S.DepartrnentofTransportation 11 803 124 188 City of Dubuque, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2017 Pass-[hrough Federal Entiry Amounts Passed- Federal GranWr/Pass-Through CFDA Identifying Through W GranWr/PrograrnorClusterTitle Number Number Fxpenditures Subrecipients Environmental Protection Aeencv Dirutprograrn: Brownfields Training Research,and Tuhnical Assistance Grants and CooperativeAgreements 66.814 $ 88 584 $ Brownsfields Assessment and Cleanup Cooperative Agreements-BF97741401 66.818 96,025 Brownsfields Assessment and Cleanup Cooperative Agreements-BF97756201 66.818 24 632 120 657 Total Environmental Protection Agency 209 7A1 U.S.Department ofHealth and Human Services Pass-[hrough prograrn from: Dubuque Counry Health Department Hospital Preparedness Prograrn(HPP) and Public Health Emergency Preparedness(PHEP)Aligned CooperativeAgreements 93.074 5887BT22 439 Comoration forNational and Communitv Service Pass-[hrough prograrn from: Iowa Commission on Volunteers: AmeriCoips 94.006 16-AC-14 17$494 - AmeriCoips 94.006 15-AC-14 28934 Total Coiporation for National and Communiry Service 207 428 U.S.Deoartment of Homeland SecuriN DirectProgram: Assistance W Firefighters Grant 97.M4 7 252 Total $ 21 810 605 $ 119 869 189 City of Dubuque, Iowa Notes to the Schedule of Expenditures of Federal Awards Year Ended June 30, 2017 Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of the City of Dubuque, Iowa, and is presented on the modified accrual basis of accounting for governxnental funds and the full accrual basis of accounting far the proprietary funds. The information in this schedule is presented in accordance with the requirements of the Uniform Guidance. 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 governxnental 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. The City has not elected to use the 10%de minimis cost rate. 190 City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2017 Section I— Summary of the Independent Auditor's Results FINANCIAL STATEMENTS Type of auditor's report issued Unxnodified Internal control over financial reporting: Material weaknesses identified Yes Significant deficiencies identified not considered to be material weaknesses None reported Noncompliance material to financial statements noted? No FEDERAL AWARDS Internal control over major programs: Material weaknesses identified No Significant deficiencies identified not considered to be material weaknesses Yes Type of auditor's report issued on compliance for major programs: Unxnodified Any audit findings disclosed that are required to be reported in accordance with Uniform Guidance 2 CFR 200.516: Yes Identification of major programs: Name of Federal Proaram CFDA Number Section 8 Housing Choice Vouchers 14.871 Lead-Based Paint Hazard Control in Privately-Owned Housing 14.900 Airpart Improvement Program 20.106 Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee? No 191 City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2017 Section II—Findinas Related to the Financial Statements MATERIAL WEAKNESS 2017-A Material Audit Adjustments and Financial Statement Preparation and Review Criteria: A properly designed system of internal control over financial reporting allows entities to initiate, authorize, record, process, and repart financial data reliably in accordance with generally accepted accounting principles and the requirements of the Uniforxn Guidance. Condifion: We idenrified material adjustments to the Comprehensive Annual Financial Repart (CAFR), which are necessary in order to present accurate financial inforxnarion. Due to the magnitude and number of adjustments required, we have concluded that the current process for financial statement preparation and review does not allow sufficient time for management to adequately review the financial statements prior to providing a draft report at the beginning of the audit. Cause: There is a limited number of office employees with varying levels of experience with the reporting requirements. This significantly limits the City's review procedures. Effect: The effect of this condition was financial data not in accordance with generally accepted accounting principles. Recommendafion: We recommend that finance staff continue to receive relevant training and that additional review procedures be implemented in preparing the financial statements. View ofResponsible Officials: Management agrees with finding. 192 City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2017 Section III—Federal Award Findinas and Questioned Costs 2017-001 U.S Department of Housing and Urban Development CFDA 14.900, IALHB0604-15, 2015 Lead-Based Paint Hazard Control Procurement and Suspension and Debarment Significant Deficiency in Internal Control over Compliance Criteria: The Uniforxn Guidance, Secrion 200.303 Internal Controls, requires the non-federal entity must establish and maintain effective internal controls over federal awards that provide reasonable assurance that awards are being managed in compliance with federal statutes, regulations and the terxns and conditions of the federal award. Suspension and Debarment Requirements and Lead Certification Hazard Control Grants shall be for lead-based paint hazard control in eligible target housing, as defined under Section 217 of Public Law 104-134(the Oxnnibus Consolidated Rescissions and Appropriations Act of 1996, 110 Stat. 1321, approved April 26, 1996) as amended by Section 1011(a) of the Residential Lead-Based Paint Hazard Reducrion Act of 1992 (Title X). Funds shall be available only for projects conducted using contractors and inspectors certified, through an EPA authorized program, ar trained in lead-safe work practices using a IILJD approved curriculum. Non-federal entities are also prohibited from contracting with or making subawards under covered transacrions to parties that are suspended or debarred. "Covered transacrions" include those procurement contracts for goods and services awarded under a non-procurement transaction(e.g, grant or cooperative agreement)that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a recipient(i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non- federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transacrion. This verificarion may be accomplished by (1) checking the Excluded Parties List System (EPLS)maintained by the General Services Administration(GSA) and available at httus://www.sam.gov/vortal/vublic/SAM/, (2) collecring a cerrification from that enrity, ar(3) adding a clause or condition to the covered transaction with that enrity. Condition: We tested compliance and internal controls over suspension and debarxnent including lead abatement certification and noted two contractors out of twelve, in which there was no documentation to support the contractor was not suspended or debarred. Nor was there documentarion that the City perforxned a lead abatement certificarion check to determine if the contractor was certified. Cause: There is a lack of effective controls over the suspension, debarment, and certification compliance requirements. Effect: Failure to provide documentation of the suspension and debarment check being perforxned along with lead abatement certificates may result in disallowed cost. 193 City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2017 Section III—Federal Award Findinas and Questioned Costs Quesfioned Costs: None reported. Context/Sampling: Program expenditures far the year ended June, 30, 2017, contained only the twelve tested"covered transaction". L ead based paint cerrification contained two contractors without documentarion of cerrification. Nonstarisrical sampling was used. Repeat Finding from Prior Years: No. Recommendation: We recommend that management review and improve the approval and documentation process for program expenditures to identify "covered transactions" and ensure suspension and debarxnent and lead abatement certification checks are perforxned. View ofResponsible Officials: Management agrees with finding. 2017-002 U.S Department of Housing and Urban Development CFDA 14.900, IALHB0604-15,2015 Lead-Based Paint Hazard Control Reporting and Matching Significant Deficiency in Internal Control over Compliance Criteria: The Uniforxn Guidance, Secrion 200.303 Internal Controls, requires the non-Federal entity must establish and maintain effective internal controls over Federal awards that provide reasonable assurance that awards are being managed in compliance with Federal statutes, regulations and the terxns and conditions of the Federal award. As described in the 2017 compliance supplement, Part 3 includes the requirements of 2 CFR part 200, subpart F. We consider factors such as the City's internal controls and the internal controls over compliance requirements and tests as prescribed in 2 CFR part 200, subpart F. Condition: We reviewed 3 of 8 reports. We noted the each of these reports tested indicated no approval of the report had occurred. Cause: Due to insufficient controls over the reporting approval process (documentarion) and matching requirements (documentarion), the controls are not operating as designed to prevent, detect and correct errors timely. Effect: Failure to document the review and approval of reporting requirements may result in inaccurate reporting and failure to meet matching requirements. Quesfioned Costs: None reported. Context/Sampling: A nonstatistical sample of 3 out of 8 reports submitted were tested. Repeat Finding from Prior Years:No 194 City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2017 Section III—Federal Award Findinas and Questioned Costs Recommendation: We recommend the City review the approval process for submitting reports. The City needs to exercise judgxnent in deterxnining the most appropriate and cost effecrive internal control in a given environxnent or circumstance to provide reasonable assurance for compliance with Federal program requirements. Views ofResponsible O�cials:Management agrees with finding. 2017-003 U.S Department of Housing and Urban Development CFDA 14.900, IALHB0604-15, 2015 Lead-Based Paint Hazard Control Allowable Costs Significant Deficiency in Internal Control over Compliance Criteria: The Uniforxn Guidance, Section 200.303 Internal Controls requires the non-Federal entity must establish and maintain effective internal controls over Federal awards that provide reasonable assurance that awards are being managed in compliance with Federal statutes, regulation and the terxns and conditions of the Federal award. As described in the 2017 compliance supplement Part 3 includes the requirements of uniform guidance and 2 CFR part 200, subpart F. EB considers factors such as the City's internal controls and the internal controls over compliance requirements and tests as prescribed in 2 CFR part 200, subpart F. Improper Payments Under uniform guidance, Public Law(Pub. L.)No. 107-300, the Ixnproper Payments Information Act of 2002, as amended by Pub. L. No. 111-204, the Improper Payments Elimination and Recovery Act, Executive Order 13520 on reducing improper payments, and the June 18, 2010 Presidential memorandum to enhance payment accuracy, Federal agencies are required to take actions to prevent improper payments, review Federal awards for such payments, and, as applicable, reclaim improper payments. Improper payment includes this specific criteria: "Any payment that an agency's review is unable to discern whether a payment was proper as a result of insufficient or lack of documentation." Condition: We tested 60 expenditures for the June 30, 2017 fiscal year. We noted the following in our testing: • 1 of the 60 transactions tested involved ineffective controls over approval of a payment causing a $10 overpayment to the vendor. 195 City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2017 Section III—Federal Award Findinas and Questioned Costs Cause: Due to insufficient controls over the expenditure approval process (documentarion)the controls are not operaring as designed(or not properly implemented to prevent, detect and correct errors timely. Effect: Failure to document the correct expenditures charged to the grant may result in disallowed costs. Quesfioned Costs:None reported. Context/Sampling: A nonstatistical sample of 1 out of 60 expenditures submitted for reimbursement. RepeatFinding from Prior Years:No Recommendafion: We recommend that the City review the approval process for expenditures to deterxnine why the controls failed and to design and implement controls that will prevent, detect and correct this from occurring in the future. The City needs to exercise judgment in deterxnining the most appropriate and cost effective internal control in a given environment or circumstance to provide reasonable assurance for compliance with Federal program requirements. The uniform guidance also refers non-Federal entities to the following two documents for best practices: • "Standards for Internal Control in the Federal GovernmenY' (Green Book)issued by the Comptroller General. • "Internal Control Framework" issued by the Committee on Sponsoring Organizations (COSO) Views ofResponsible O�cials:Management agrees with finding. 196 City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2017 Part IV: Other Findings Related to Required Statutory Reporting: 2017-IA-A Certified Budget—Disbursements during the year ended June 30, 2017 exceeded the amount budgeted in the community and economic development and debt service functions. Chapter 384.20 of the Code of Iowa states, in part, "Public monies may not be expended or encumbered except under an annual or continuing appropriation." Recommendation—The budget should have been amended in accordance with Chapter 384.18 of the Code of Iowa before disbursements were allowed to exceed the budget. Response —The budget will be amended in the future, if applicable. 2017-IA-B Questionable Expenditures—No expenditures that may not meet the requirements of public purpose as defined in an Attorney General's opinion dated April 25, 1979, were noted. 2017-IA-C Travel Expense—No expenditures of City money far travel expenses of spouses of City officials or employees were noted. 2017-IA-D Business Transactions—Business transactions between the City and City officials or employees are detailed as follows: Name, Title, and Transaction Business Connection Descrivtion Amount Ric Jones, City council member, owner of RJ Productions Music Entertainxnent Services $ 650 John Hefel, City employee, spouse is owner of A Frame of Mind Framing & Gallery Services 532 Peggy Kraus-Abidi, City employee, Services 38 daughter is Hayden J Kraus In accordance with Chapter 3625(3)(j)of the Code of Iowa, the transacrions with A Frame of Mind Framing & Gallery and Hayden J. Kraus do not appear to represent conflicts of interest since total transactions were less than $1,500 during the fiscal year. 2017-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. 2017-IA-F Council Minutes—No transactions were found that we believe should have been approved in the Council minutes but were not. 197 City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2017 Part IV: Other Findings Related to Required Statutory Reporting: (continued) 2017-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. 2017-IA-H Revenue Debt—No instances of non-compliance with the provisions of the Sewage Disposal Works, Water Utility, or Stormwater Utility revenue debt resolutions were noted. 2017-IA-I Solid Waste Tonnage Fees Retained—No instances of non-compliance with the solid waste fees used or retained in accordance with provisions of Chapter 455B.310 of the Code of Iowa by the Dubuque Metropolitan Area Solid Waste Agency, a component unit of the City, were noted. 2017-IA-J Financial Assurance—The Dubuque Metropolitan Area Solid Waste Agency, a component unit of the City, has demonstrated financial assurance for closure and postclosure care costs by establishing a local government dedicated fund as provided in 567-113.14(6)of the Iowa Administrative Code. 198 APPENDIX D: FORM OF COMBINED CONTINUING DISCLOSURE CERTIFICATE DRAFT CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Dubuque, State of Iowa(the "Issuer"), in connection with the issuance of $ General Obligation Bonds, Series 2018A and $ Taxable General Obligation Refunding Bonds, Series 2018B (the "Bonds") dated , 2018. The Bonds are being issued pursuant to Resolutions of the Issuer approved on , 2018, (the "Resolutions"). The Issuer covenants and agrees as follows: Section 1. Pumose ofthe Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2- 12(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Resolutions, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Financial Information" shall mean financial information or operating data of the type included in the final Official Statement, provided at least annually by the Issuer pursuant to, and as described in, Sections 3 and 4 ofthis Disclosure Certificate. "Beneficial Owner" shall mean any person which (a)has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Business Day" shall mean a day other than a Saturday or a Sunday or a day on which banks in Iowa are authorized or required by law to close. "Dissemination Agent" shall mean the Issuer or any Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Holders" shall mean the registered holders of the Bonds, as recorded in the registration books ofthe Registrar. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "Municipal Securities Rulemaking Board" or "MSRB" shall mean the Municipal Securities Rulemaking Board, 1300 I Street NW, Suite 1000, Washington, DC 20005. "National Repository" shall mean the MSRB's Electronic Municipal Market Access website, a/k/a "EMMA" (emmamsrb.org). "OfFicial Statement" shall mean the Issuer's Official Statement for the Bonds, dated , 2018. "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State" shall mean the State of Iowa. Section 3. Provision of Annual Financial Information. a) The Issuer shall, or shall cause the Dissemination Agent to, not later than two hundred ten (210) days after the end of the Issuer's fiscal year (presently June 30th), commencing with information for the 2017/2018 fiscal year, provide to the National Repository an Annual Financial Information filing consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Financial Information filing must be submitted in such format as is required by the MSRB (currently in "searchable PDF" format). The Annual Financial Information filing may be submitted as a single document or as separate documents comprising a package. The Annual Financial Information filing may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Financial Information filing and later than the date required above for the filing of the Annual Financial Information if they are not available by that date. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). b) If the Issuer is unable to provide to the National Repository the Annual Financial Information by the date required in subsection (a), the Issuer shall send a notice to the Municipal Securities Rulemaking Board, if any, in substantially the form attached as Exhibit A. c) The Dissemination Agent shall: i. each year file Annual Financial Information with the National Repository; and ii. (if the Dissemination Agent is other than the Issuer), file a report with the Issuer certifying that the Annual Financial Information has been filed pursuant to this Disclosure Certificate, stating the date it was filed. Section 4. Content of Annual Financial Information. The Issuer's Annual Financial Information filing shall contain or incorporate by reference the following: 2 a) The last available audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under State law, as in effect from time to time, or, if and to the eatent such financial statements have not been prepared in accordance with generally accepted accounting principles, noting the discrepancies therefrom and the effect thereo£ If the Issuer's audited financial statements far the preceding years are not available by the time Annual Financial Information is required to be filed pursuant to Section 3(a),the Annual Financial Information filing shall contain unaudited financial statements of the type included in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Financial Information when they become available. b) A table, schedule or other information prepared as of the end of the preceding fiscal year, of the type contained in the final Official Statement under the captions "Iowa Property Valuations", "1/1/2017 Valuations", "2017 Gross Taxable Valuation by Class of Property", "Trend of Valuations", "Larger Taxpayers", "Debt Limit", "Direct Debt", "Other Debt", "Indirect Debt", "Tax Rates", and "Levies and Collections". Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been filed with the National Repository. The Issuer shall clearly identify each such other document so included by reference. Section 5. Reporting of Significant Events. a) Pursuant to the provisions of this Section, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not later than 10 Business Days after the day of the occurrence of the event: i. Principal and interest payment delinquencies; ii. Non-payment related defaults, if material; iii. Unscheduled draws on debt service reserves reflecting financial difficulties; iv. Unscheduled draws on credit enhancements relating to the Bonds reflecting financial difficulties; v. Substitution of credit or liquidity providers, or their failure to perform; vi. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the 3 tax-exempt status of the Series Bonds, or material events affecting the tax-exempt status of the Bonds; vii. Modifications to rights of Holders of the Bonds, if material; viii. Bond calls (excluding sinking fund mandatory redemptions), if material, and tender offers; ix. Defeasances ofthe Bonds; x. Release, substitution, or sale of property securing repayment of the Bonds, if material; xi. Rating changes on the Bonds; xii. Bankruptcy, insolvency, receivership or similar event of the Issuer; xiii. The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and xiv. Appointment of a successor or additional trustee or the change of name of a trustee, if material. b) Whenever the Issuer obtains the knowledge of the occurrence of a Listed Event,the Issuer shall determine if the occurrence is subject to notice only if material, and if so shall as soon as possible determine if such event would be material under applicable federal securities laws. c) If the Issuer determines that knowledge of the occurrence of a Listed Event is not subject to materiality, or determines such occurrence is subject to materiality and would be material under applicable federal securities laws,the Issuer shall promptly, but not later than 10 Business Days after the occurrence of the event,file a notice of such occurrence with the Municipal Securities Rulemaking Board through the filing with the National Repository. Section 6. Termination of Renortine Oblieation. The Issuer's obligations under this Disclosure Certificate with respect to each Series of Bonds shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds of that Series or upon the Issuer's receipt of an opinion of nationally recognized bond counsel to the effect that, because of legislative action or final judicial action or administrative actions or proceedings,the failure of the Issuer to comply with the terms hereof will not cause Participating Underwriters to be in violation ofthe Rule or other applicable requirements ofthe Securities Exchange Act of 1934, as amended. 4 Section 7. Dissemination A�ent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Issuer. Section 8. Amendment; Waiver. Notwithstanding any other provision ofthis Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: a) If the amendment or waiver relates to the provisions of Section 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, ar the type of business conducted; b) The undertaking, as amended ar taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations ofthe Rule, as well as any change in circumstances; and c) The amendment or waiver either(i) is approved by the Holders of the Bonds in the same manner as provided in the Resolutions for amendments to the Resolutions with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the neat Annual Financial Information filing, and shall include, as applicable, a narrative explanation of the reason far the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Financial Information filing or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Financial Information filing or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Financial Information filing or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance 5 by court order,to cause the Issuer to comply with its obligations under this Disclosure Certificate. Direct, indirect, consequential and punitive damages shall not be recoverable by any person for any default hereunder and are hereby waived to the eatent permitted by law. A default under this Disclosure Certificate shall not be deemed an event of default under the Resolutions, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys'fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Date: day of , 2018. CITY OF DUBUQUE, STATE OF IOWA By: Mayor ATTEST: By: City Clerk 6 EXHIBIT A NOTICE TO NATIONAL REPOSITORY OF FAILURE TO FILE ANNUAL FINANCIAL INFORMATION Name of Issuer: City of Dubuque, Iowa Name of Bond Issue: $ General Obligation Bonds, Series 2018A $ Taxable General Obligation Refunding Bonds, Series 2018B Dated Date of Issue: , 2018 NOTICE IS HEREBY GIVEN that the Issuer has not provided Annual Financial Information with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certificate delivered by the Issuer in connection with the Bonds. The Issuer anticipates that the Annual Financial Information will be filed by Dated: day of , 20 CITY OF DUBUQUE, STATE OF IOWA By: Its: 01448358-1\10422-190 APPENDIX E: NOTICE OF BOND SALE NOTICE OF BOND SALE Time and Place of Sealed Bids: Bids for the sale of Bonds of the City of Dubuque, State of Iowa, hereafter described, must be received at the office of the Finance Director, City Hall, 50 West 13th Street, Dubuque, Iowa 52001; Telephone: 563-589-4100 (the "Issuer") in accordance with the official Terms of Offering on the 5�' day of March, 2018. The bids will then be publicly opened and referred for action to the meeting of the City Council in conformity with the TERMS OF OFFERING. The Bonds: The Bonds to be offered are the following: GENERAL OBLIGATION BONDS, SERIES 2018A, in the amount of$9,410,000*, to be dated April 11, 2018 (the "2018A Bonds"). Bids to be received before 11:00 A.M C.S.T.; and TAXABLE GENERAL OBLIGATION REFUNDING BONDS, SERIES 2018B, in the amount of$1,020,000*,to be dated April 11, 2018 (the "2018B Bonds"). Bids to be received before 11:00 A.M. C.S.T. (collectively, the `Bonds") *Subject to principal adjustment pursuant to official Terms of Offering. Manner of Biddine: Open bids will not be received. Bids will be received in any of the following methods: • Sealed Biddine: Sealed bids may be submitted and will be received at the office of the Finance Director at City Hall, 50 West 13th Street, Dubuque, Iowa 52001. • Electronic Internet Biddin�: Electronic internet bids will be received at the office of the Finance Director at City Hall, 50 West 13th Street, Dubuque, Iowa 52001. The bids must be submitted through the PARITY� competitive bidding system. • Electronic Facsimile Bidding: Electronic facsimile bids will be received at the office ofthe Finance Directar at City Hall, 50 West 13th Street, Dubuque, Iowa 52001 (facsimile number. (563-589-0890) and/or the City's Municipal Advisor, Independent Public Advisors, Johnston, Iowa(facsimile number. (515) 259- 8193). Electronic facsimile bids will be treated as sealed bids. Consideration of Bids: After the time for receipt of bids has passed,the close of sealed bids will be announced. Sealed bids will then be publicly opened and announced. Finally, electronic internet bids will be accessed and announced. Sale and Award: The sale and award of the Bonds will be held at the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa at a meeting of the City Council on the above date at 6:00 P.M. Official Statement: The Issuer has issued an Official Statement of information pertaining to the Bonds to be offered, including a statement of the Terms of Offering and an Official Bid Form, which is incorporated by reference as a part of this notice. The Official Statement may be obtained by request addressed to the City Clerk, City Hall, 50 West 13th Street, Dubuque, Iowa 52001; Telephone: (563) 589-4100 ar the Issuer's Municipal Advisor, Independent Public Advisors, 8805 Chambery Blvd Ste 300 #114, Johnston, IA 50131, Telephone (515) 259-8193. Terms of Offerine: All bids shall be in conformity with and the sale shall be in accordance with the Terms of Offering as set forth in the Official Statement. Leeal Oninion: The Bonds will be sold subject to the opinion of Ahlers & Cooney, P.C., Attorneys of Des Moines, Iowa, as to the legality and their opinion will be furnished together with the printed Bonds without cost to the purchaser and all bids will be so conditioned. Except to the ea�tent necessary to issue their opinion as to the legality of the Bonds, the attorneys will not examine or review or express any opinion with respect to the accuracy or completeness of documents, materials or statements made or furnished in connection with the sale, issuance or marketing of the Bonds. Rights Reserved: The right is reserved to reject any or all bids, and to waive any irregularities as deemed to be in the best interests of the public. By order of the City Council of the City of Dubuque, State of Iowa. Kevin S. Firnstahl City Clerk, City of Dubuque, State of Iowa (End of Notice) OFFICIAL BID FORM Ta The City Council of Sale Date: March 5, 2018 Dubuque, Iowa 11:00 A.M. Central Time RE: $9,410,000* General Obligation Bonds, Series 2018A(the"Series 2018A Bonds'�, dated April 11, 2018. For all or none of the above Series 2018A Bonds in accordance with the TERMS OF OFFERING, we will pay you $ (not less than $9,334,720.00)plus accrued interest to date of delivery for fully registered Bonds bearing interest rates and maturing in the stated years as follows: %due 2019 %due 2026 %due 2020 %due 2027 %due 2021 %due 2028 %due 2022 %due 2029 %due 2023 %due 2030 %due 2024 %due 2031 %due 2025 %due 2032 *The City reserves the rigM to increase or decrease the aggregate principal amount of the issue. Such change will be in increments of$5,000 and may be made in any of the maturities.The purcktase price will be adjusted proportionately to reflect any change in issue size. In making this offer we accept all of the terxns and conditions of the TERMS OF OFFERING published in the Preliminary Official Statement dated February , 2018. In the event of failure to deliver these Bonds in accordance with the TERMS OF OFFERING as printed in the Preliminary Official Statement and made a part hereof, we reserve the right to withdraw our offer. All blank spaces of this offer are intentional and are not to be construed as an omission. We represent that this bid is a firxn offer far the purchase of the Securities identified in the Terxns of Offering, on the terms set farth in this bid form and the Terxns of Offering, and is not subject to any conditions, except as perxnitted by the Terxns of Offering. By submitting this bid, we confirxn that we have an established industry reputation for underwriting new issuances of municipal bonds. Not as a part of our offer,the above quoted prices being controlling,but only as an aid for the verification of the offer,we have made the following computations: NET INTEREST COST: $ TRUE INTEREST COST: % (Based on dated date of April 11, 2018) Account Manager: By: Account Members: The foregoing offer is hereby accepted by and on behalf of the City Council of the City of Dubuque,Iowa this 5`"day of March, 2018. Attest: By: Title: Title: OFFICIAL BID FORM Ta The City Council of Sale Date: March 5, 2018 Dubuque, Iowa 11:00 A.M. Central Time RE: $1,020,000* Taxable General Obligation Refunding Bonds, Series 2018B (the"Series 2018B Bonds'�, dated April 11, 2018. For all or none of the above Series 2018B Bonds in accordance with the TERMS OF OFFERING,we will pay you $ (not less than $1,012,860.00)plus accrued interest to date of delivery for fully registered Bonds bearing interest rates and maturing in the stated years as follows: %due 2019 %due 2023 %due 2020 %due 2024 %due 2021 %due 2025 %due 2022 %due 2026 *The City reserves the rigM to increase or decrease the aggregate principal amount of the issue. Such change will be in increments of$5,000 and may be made in any of the maturities.The purcktase price will be adjusted proportionately to reflect any change in issue size. In making this offer we accept all of the terxns and conditions of the TERMS OF OFFERING published in the Preliminary Official Statement dated February ,2018. In the event of failure to deliver these Bonds in accordance with the TERMS OF OFFERING as printed in the Preliminary Official Statement and made a part hereof, we reserve the right to withdraw our offer. All blank spaces of this offer are intentional and are not to be construed as an omission. Not as a part of our offer,the above quoted prices being controlling,but only as an aid for the verification of the offer,we have made the following computations: NET INTEREST COST: $ TRUE INTEREST COST: % (Based on dated date of April 11, 2018) Account Manager: By: Account Members: The foregoing offer is hereby accepted by and on behalf of the City Council of the City of Dubuque,Iowa this 5`"day of March, 2018. Attest: By: Title: Title: