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Comprehensive Annual Financial Report (CAFR) and Auditor's Communication Copyrighted December 17, 2018 City of Dubuque Action Items # 6. ITEM TITLE: Comprehensive Annual Financial Report (CAFR) and Auditor's Communication SUMMARY: City Manager transmitting the Fiscal Year 2018 Comprehensive Annual Financial Report (CAFR), Auditor's Communication with Those Charged with Governance Letter, along with the City Finance staff's responses to the auditor's findings. There will be a presentation. SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Presentation ATTACHMENTS: Description Type CAFR-NNM Memo City Manager Memo Memo to NNM and Council CAFR Submission Staff Memo Final 2018 CAFR Supporting Documentation Auditors Communication Supporting Documentation Auditor Compliance letter Supporting Documentation CAFR Presentation (Added) 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: Submission of Fiscal Year Ended June 30, 2018 Comprehensive Annual Financial Report (CAFR) and Auditor's Communication with Those Charged with Governance DATE: December 13, 2018 Finance Director Jean Nachtman is transmitting the Fiscal Year 2018 Comprehensive Annual Financial Report (CAFR), Auditor's Communication with Those Charged with Governance Letter, along with the City Finance staff's responses to the auditor's findings. The City's independent auditor issued an unmodified opinion on the financial statements. Finance Director Jean Nachtman and Assistant Finance Director Tami Lansing will make a brief presentation to the City Council and Eide Bailly CPA Auditor Partner Brian Unsen will be available for any questions. �� 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 THE CITY OF DU. b_q�u�e F.�iZ�.i DT Tr� � NI-IMencadry �.{ ,.., � � � � � ► Masterpiece an the Mississippi Zo�-Zo,Z-2o„ TO: Michael C. Van Milligen, City Manager FROM: Jean Nachtman, Finance Director SUBJECT: Submission of Fiscal Year Ended June 30, 2018 Comprehensive Annual Financial Report (CAFR) and Auditor's Communication with Those Charged with Governance DATE: December 13, 2018 INTRODUCTION The purpose of this memorandum is to submit the Fiscal Year 2018 CAFR audited by Eide Bailly, LLP, Auditor's Communication with Those Charged with Governance Letter along with the City Finance staff's responses to auditor's findings. The City's independent auditor issued an unmodified opinion on the financial statements. BACKGROUND lowa state code requires an annual audit by independent certified public accountants or the State Auditor. In addition to meeting the requirements set forth in state statues, the audit also was designed to meet the requirements of an annual single audit in conformity with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award. This Comprehensive Annual Financial Report is in conformance with the standards set by Title 2 U.S. Code of Federal Regulations (CFR) Part 200. This federal regulation mandates audit standards for federal programs. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Separate financial statements are required for Dubuque Metropolitan Area Solid Waste Agency, Dubuque Initiatives and Subsidiaries and Dubuque Convention and Visitors Bureau (CVB) and have been received. The financial information for these entities is included in the City of Dubuque CAFR. AUDITOR'S COMMUNICATION with THOSE CHARGED with GOVERNANCE Included is a separate letter from Eide Bailly, LLP. The letter contains audit information required by auditing standards to be communicated to the Mayor and City Council. ACTION STEP It is recommended that the City Council receives and files the Fiscal Year 2018 reports identified above and receives and files this communication and related enclosures. 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F��. d �_� �a- . � '� ` � ^a. k �'"_��"31 �} :y° +�-L 0��1 S r" , ,�T� ./1 - L3� '�� : Y�F �p '�, • x � � r� , ' � I � � � i'�� .��,'ti.��i�.�j� ;�. 'w �+;.�7..� � �_., ,�`�i'��.,. � � � � �� '•',F_�'`�: yr� �y�� g..�'�k,,c J1 � I r r � I 1 � �`-, ',�' � �,��'�` ,'!�,� � "b" - � J J �J J J J � J f � � f J .. .�`�' '°`' ` ' -. �, ' ._ :, �+�\' � .__ - • �,i" c'�� 4 �;� ,._.- � s�'tV= �...�.� "'i� �, .. , � � � � � � � � � � �-� �.� � � � �.��.�._ ;s,� . � ��.�:�.��_ � � � � - � � s � J s � f � l� About the Cover. Eagle Point Park is the crown jewel of the City's park system. Local citizens and tourists from all over the world have enjoyed the park which showcases a panoramic view of lowa, Wisconsin and Illinois, and Mississippi River Lock and Dam#11. Judge Oliver Shiras was chairperson of a citizen's committee formed to acquire the land. In June of 1908, with aid from the Civic Division of the Dubuque's Women's Club, one hundred acres were purchased from A.L. Rhomberg. The property was then deeded to the city and became Eagle Point Park. Since the original purchase, seventeen parcels have been purchased or donated, which brings the park to its present size. The Riverfront Pavilion, built in 1910, is the oldest pavilion in the park. The park took on a new look in the 1930s when the City hired Park Superintendent Alfred Caldwell. A Works Progress Administration grant was received and the gifted landscape architect began work. His love of Frank Lloyd Wright prairie architecture is very recognizable in the buildings and gardens. Caldwell's exceptional use of native construction materials, craftsmanship and unique designs make the park one of the most beautiful in the Midwest. The Terrance Room, Veranda Rooms, Indian Room and Bridge Complex were built in the 1930s as a W.P.A. project during the great depression. The Shiras Memorial Pavilion is located at the walkway's end and was built in 1921, in honor of Judge Oliver Shiras, the person most responsible for the park's creation. The Log Cabin Pavilion was constructed in 1939 with funds from the National Youth Administration. It overlooks Dubuque's Point area and downtown. History and architecture plus natural beauty make Eagle Point Park what it is today. Photo courtesy of: Erich Moeller Cover design by: Kelli Buchenau Copy provided by: Marie Ware Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2018 City of Dubuque, Iowa Prepared by: Department of Finance THIS PAGE IS INTENTIONALLY LEFT BLANI� Introductory Section June 30, 2018 City of Dubuque, Iowa THIS PAGE IS INTENTIONALLY LEFT BLANI� CITY OF DUBUQUE, IOWA TABLE OF CONTENTS E�ibit P�e INTRODUCTORY SECTION Table of Contents 1-2 Letter of Transmittal 3-11 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 57-110 Requued Supplementary Information Schedule of Receipts,Expenditures, and Changes in Balances—Budget and Actual(Budgetary Basis)—Govemmental Funds and Enterprise Funds 112 Note to Required Supplementary Information—Budgetary Reporting 113 Schedule of the City's Proportionate Share of Net Pension Liability— Iowa Employees'Retirement System 114 Schedule of City's Conhibution—Iowa Employees'Retirement System 115 Notes to Requued Supplementary Information— NetPension Liability IPERS 116 Schedule of the City's Proportionate Share of Net Pension Liability— Municipal Fire and Police Retuement System of Iowa 117 Schedule of City's Contributions—Municipal Fue and Police Retirement System of Iowa 118 Notes to Requued Supplementary Information— NetPension Liability MFPRSI 119 Schedule of Changed in Total OPEB Liability,Realted Ratioes and Notes 120 Supplementary Information Combining Fund Statements Combining Balance Sheet—Nonmaj or Govemmental Funds A-1 124-126 Combining Statement of Revenues,Eapenditures, and Changes in Fund Balances—Nonmajor Govemmental Funds A-2 128-130 Combining Statement of Net Position—Nonmajor Enterprise Funds B-1 132 Combining Statement of Revenues,Eapenses, and Changes in Fund Net Position—Nonmaj or Enterprise Funds B-2 133 1 CITY OF DUBUQUE, IOWA TABLE OF CONTENTS FINANCIAL SECTION(continued) Exhibit Page Combining Statement of Cash Flows—Nonmajor Enterprise Funds B-3 134-135 Combining Statement of Net Position—Intemal Service Funds G 1 138-139 Combining Statement of Revenues,Eapenses, and Changes in Fund Net Position(Deficit)—Internal Service Funds G2 140-141 Combining Statement of Cash Flows—Intemal Service Funds G3 142-143 Combining Statement of Changes in Assets and Liabilities— Agency Funds D-1 145 STATISTICAL SECTION(Unaudited) Table Paee Statistical Section Contents 149 Financial Trends Net Position by Component 1 150-151 Changes in Net Position 2 152-155 Fund Balances of Govemmental Funds 3 156-157 Changes in Fund Balances of Govemmental Funds 4 158-159 Revenue Capacity Ta�ble and Assessed Value of Property 5 160 Property Tax Rates—Direct and Overlapping Govemments 6 161 Principal Property Ta�payers 7 162 Property Tax Levies and Collections 8 163 Debt Capacity Ratios of Outstanding Debt by Type 9 164-165 Ratios of General Bonded Debt Outstanding 10 166 Direct and Overlapping Govemmental Activities Debt 11 167 Legal Debt Margin Information 12 168-169 Revenue DebtCoverage 13 170 Water and Sewer ReceiptHistory 14 171 Water Meters by Rate Class 15 172 Largest Water and Sewer Customers 16 173 Sales Tax Increment Actual Receipts and Cumulative Sales Tax Balance Remaining 17 174 Demographic and Economic Information Demographic and Economic Statistics 18 175 Principal Employers 19 177 Operating Information Full-Time Equivalent City Government Employees by Function/Deparhnent 20 178-179 Operating Indicators by Function/Program 21 180-181 Capital Asset Statistics by Function 22 182-183 Retail 23 184 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 187-188 Independent Auditor's Report on Compliance with Requirements for Each Major Program and on Intemal Control Over Compliance Requued by The Uniform Guidance 189-190 Schedule of Expenditures of Federal Awards 191-193 Notes to the Schedule of Expenditures of Federal Awards 194 Schedule of Findings and Questioned Costs 195-197 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 12,2018 Honorable Mayor, City Council Members, and Citizens of the City of Dubuque: The City of Dubuque, Iowa, pursuant to the requirements set forth by staYe and federal regulations, hereby submits the Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2018. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, 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 StaYe Auditor. The accounting firm of Eide Bailly LLP conducted the audit for fiscal year 2018. In addition to meeting the requirements set forth in staYe staYutes, 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, road salt 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 staYements 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 3 organization are transferred to the City. CVB's purpose is to strengthen the Dubuque area economy by 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 nartheast 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, revitalized river&ont and millwark districts and two casinos, one with a pari-mutuel dog track. The City of Dubuque has a stable, diversified economic base and is a major 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 September 2018, the City's unemployment rate was 1.9%, below the state unemployment rate of 2.5%and the 3.7%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 against the negative impact from a downturn in any one area of the economy. Several industry experts and associations have recognized the community's efforts to diversify its economy. a 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. 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 properly consists of six parcels covering 163 total acres, of which 103 acres are developable. Medline Industries, Inc. announced plans to invest in a new 130,000-square-foot facility in the Dubuque Industrial Center West. The medical supply company will add more than 100 jobs and invest nearly $20 million in the new customer service facility to be located on Innovation Drive. Universal Tank and Fabrication announced in November of 2017 that it plans to expand their operations. This locally-grown company manufacbxres high-quality pressure vessels and tanks for customers across the country. Universal Tank opened in October 2007 starting with 24 employees. Today this company employs more than 50 with plans to grow. 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. 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. 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 bringing their total local employment to nearly 700. Historic Millwork District: The Historic Millwark District is saturated with history. It imbues the area with authenticity and character while offering valuable lessons about the importance of sustainable urban design strategies. Dubuque's Historic Millwark District is a keystone to the region's aggressive economic development strategy. With one million square feet of historic warehouse space ideal for urban mixed-use development, the District is perfectly suited to attract entrepreneurs, designers, residents, instibxtions, and businesses prepared to fuel Dubuque's globally competitive and sustainable economy. The District is currently home to multiple eateries,breweries, and shopping venues. Multiple projects in the area were recently awarded tax credits from the Iowa Economic Development Authority for remediation and preservation of historic buildings. Among these was the five-story building at 275 E 10� St, at $37.2 million, Wilmac Properly Co plans to renovate the building's top four floors for commercial office space and the rehab the first floor into mixed commerciaUretail space. It received a $750,000 credit. Just a block away, a 1905 forxner lumber shed at 250 E 8th came away with a $600,000 Grayfield credit. Developer Prescott LLC plans to add a mezzanine inside the building and convert the forxner warehouse into office space. The third project in Dubuque is the forxner St. Mary's Church and Rectory, the namesake feature of downtown's Steeple Square at 15th and White streets. Project developer SS Event Center received a credit of$200,000. 5 Construction of a 54-room Marriot Townplace Suite extended-stay hotel broke ground in June 2017 and is scheduled to open in spring of 2019. 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 2018 was an exceptional year for commercial development as many businesses broke ground on new projects in Dubuque. The Plaza 20 retail center was chosen to be the site of a new VA Clinic that will occupy approximately 22,000 sq,ft. of the former K-Mart building. American Customer Care announced plans in summer of 2017 to relocate to a 22,000-square-foot space at 2460 Kerper Boulevard. The combined investment from the company and the building owner is more than $1,000,000 to renovate and revitalize the space. Over the next 12 to 18 months, the company plans to add an additional 180 positions at the new location. Tri-State Independent Blind Society opened a new 13,123 square foot facility on Cedar Cross Road and sold their existing site on Asbury Road to Natural Grocers who remodeled the existing building and site and hosted their grand opening in November 2018. Portzen Construction expanded their facility on Stone Valley drive by 12,000 square feet. This expansion also came with the addition of 30 new employees in both construction and office positions. In 2018, Starbucks opened a new, stand-alone store on U.S. Hwy 20 / Dodge Street In addition, Freddy's Frozen Custard opened a new restaurant in Asbury Plaza. Health Services ENT Medical Building began construction of a new 9,000 sq. ft. medical facility along Cedar Cross Road in the summer of 2018. In addition, Statera, an integrated health and wellness facility, constructed and opened a new 3,600 sq. ft. office building at the end of 2017. 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 lowa Health Facilities Council did grant their approval for a certificate of need for a linear acceletor included in the project. Education The Dubuque community takes great pride in the quality of its educational system and it is a top priority for Dubuque citizens and leaders. Dubuque's publio-school system was ranked #7 out of 2,200 school districts nationwide. s The Dubuque community schools district provides K-12 education through 11 elementary schools, three junior high schools, one middle school, and three high schools. Dubuque also offers two private school systems accredited by the State of Iowa. Holy Family Catholic Schools offers K-12 education at four elementary schools, one K-5 Spanish Immersion Program, a middle school, and a high school. The Dubuque Lutheran School offers K-5 education at one elementary school. Dubuque boasts three private, liberal arts colleges offering a wide variety of undergraduate and graduate degree programs, a community college with a diverse certificate and degree programs, and a Bible college. The tri-state area feabxres an additional state university and two more community colleges for a total of 18,000 college students. Dubuque Hempstead is in the midst of a 27,000 sq. ft. aquatic facility on the narth side of the school. 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. 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 2018, more than 80 alleys have been completed. Jule Operations and Training Center: The City of Dubuque's Public Transit Division, completed the Jule Operations and Training Center (JOTC) in Spring, 2018. The 41,000-square-foot facility replaced the century-old facility on Central Avenue and provides numerous operating efficiencies. The JOTC was constructed on a city-owned, Superfund site. The facility includes bus storage, dispatch and administrative offices, indoor classroom and outdoor vehicle training areas. The $6.8 million project was 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 construction is currently under way between US20 to US61-151. Highway paving will occur during the 2019 construction season. The Iowa DOT, DMATS, Dubuque County, and the City of Dubuque have budgeted - $170 million to complete the 4-lane construction of the Southwest Arterial and is scheduled for completion in the fall of 2019. 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. a 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 Placeto Live • Financially Responsible, High-Performance City Organization: Sustainable, Equitable, and Effective Service Delivery • Sustainable Environment: 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 Infrastrucbxre, 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 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 investment earnings of$1,243,756 far the year. The inveshnent 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. s 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 $370,328 net position as of June 30, 2018. 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 $3,764,177 as of June 30, 2018. 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 Investors Service assigned a Aa3 rating to the $9AM GO Bonds, Series 2018A and $1M Taxable GO Refunding Bonds, Series 2018B. Moody's maintained a Aa3 rating on outstanding general obligation unlimited tax (GOiJLT) debt; a Aa3 rating on outstanding second lien sales tax increment debt that is ultimately backed by an unlimited properly tax pledge; and an A2 rating on outstanding senior lien sales tax increment revenue bonds. The ratings incorporate the city's large and growing tax base that serves as a regional economic center for northeast Iowa; satisfactory financial position with material revenue raising flexibility; and above average debt and pension burdens. In March 2018, Moody's also affirmed the A2 rating on the water revenue debt The A2 rating incorporates the system's large and diverse customer base and unlimited rate setting authority and moderate debt burden with limited plans for future debt issuance. The rating also considers the system's strong debt service coverage and liquidity. 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, 2017. This was the 30th 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. GFOA also awarded a Certificate of Recognition for Budget Preparation to the City of Dubuque, Iowa, for its annual budget far the fiscal year ended June 30, 2018. 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 13th 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. 10 Arbnwisdgmems: The pveparatiov of tivs veport coWd mt be amomplished w�tho�t tlie effid�t ar�d derlicaed savices of tlie evtire Fivaeme Departmevt naff We alm tharik tlie mayor ar�d dty co�vdl [or tlieiriv[ue4 ae�d mpportiv plarutivg ar�d mvd�c[ivg tlie 5vae�oalopertiovs oftlie Qty of Wb�q�eiv a vespovsible ar�d pmgusive mar�ver. We also tliarik tlieivdep�devt rem5ed p�blic acmwem�n, Eide Ba11yLLP, whosecompaev[assistarmeae�drechnicalv.�putisehave �abledtliepmd�ctiovoftivs �eport Sivcuelg �uA.✓ bLN:y.� . ..,. ..�. ... . Michael C Var� Milligev ]� M. Nach[man, CPA CPFO City Mar�aga Fivar�ceDivec[or THIS PAGE IS INTENTIONALLY LEFT BLANI� 12 Citizens of Dubu ue q I CityAttorney City Council City Clerk Library ___ _ Airport Management/Legislative City Manager's Neighborhood Offi�e Development Sustainability Bud et Building g Services Economic Emergency Development Communications Arts&Cultural Affairs Engineering Finance Department Fire Health Services Department Ambulance Emergency Services Management Housing& Community Human Rights Development Human Training& Relations Workforce Development Information Leisure Services Services Civic Center Grand River Center Multicultural park Division Personnel Planning Family Center Services Recreation Division Police Public Information Department Office Cable TV Geographic Information Systems Public Works Transportation Services Parking Transit Division Division Water Water& D r m n Resource epa t e t Recovery Center Elected b the A ointed b the Apppointed bythe A ointed b the y pp y Librar Board of pp y Citizens of Dubu ue Cit Council y Air ort Commission p y Trustees p 13 CITY OF DUBUQUE, IOWA OFFICIALS JUNE 30,2018 CITY COUNCIL Roy D. Buol Mayor Ric W. Jones Council Member—At Large David T. Resnick Council Member—At Large Brett M. Shaw Council Member— lst Ward Luis Del Toro Council Member—2nd Ward Kate M. Larson 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 David A. Johnson 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 Denise C. Ihrig Water Department Manager William J. O'Brien Water&Resource Recovery Center Manager 14 � Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Dubuqu� Iowa For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2017 � . � �; � Executive Director/CEO 15 THIS PAGE IS INTENTIONALLY LEFT BLANI� 16 Financial Section June 30, 2018 City of Dubuque, Iowa 17 THIS PAGE IS INTENTIONALLY LEFT BLANI� 18 EideBailly cr�a eusixEss nunw�s Indepedent 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, 2018 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 60 percent, 72 percent, and 34 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. What inspires you,inspires us. eidebailly.mm 19 1545 Aswciates Dr.,Ste. 101 Dubuque,IA 52002-2299 T 563556.V90 F 5 63 55 77842 EOE 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. 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, 2018, 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. Em phasis of Matter As discussed in Notes 1 and 17 to the financial statements, the City has adopted the provisions of GASB Statement No. 75, Accounfing and Financial Reporfing for Other Postemplayment Benefits Other Than Pensions, which has resulted in a restatement of the net position as of July 1, 2017. Our opinions are not modified with respect to this matter. 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. zo Othe�Info�mation Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Dubuque,Iowa's financial statements. The introductory section, combining nonmajor 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, Unifo�m Administ�ative Requi�ements, Cost P�inciples, and Audit Requi�ements fo�Fede�al Awa�ds(Uniform Guidance), and is also not a required part of the financial statements. The combining nonmajor 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 information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion,the combining nonmajor 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 statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly,we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Gove�nment Auditing Standa�ds,we have also issued a report dated December 11, 2018, 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 Dubuque, Iowa December 11, 2018 21 THIS PAGE IS INTENTIONALLY LEFT BLANI� zz CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2018 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, 2018. 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 $546,413,451 compared to restated net position of $526,999,638 for fiscal year 2017. • Governmental program revenues increased by $4,034,132 from fiscal year 2017. This increase was due largely in part to a significant increase in grant revenues in Community & Economic Development in relation to the IILJD Resiliency grant, along with decreased costs in the Health Insurance Reserve fund. • The City's business type activities program revenues decreased $7,834,808. Charges for services increased $672,518. Water (3%), sewer (3%), stormwater (7%), and refuse (2%) rates were increased in fiscal year 2018. Grant reimbursements for construction of the new Transit Bus Garage decreased as construction was completed. Capital contributions from outside developers for both storxnwater and sewer decreased as there are mulitple sibdivions currently under contruction, but not yet complete. Capital contributions received from governmental funds are shown in the transfers line and are detailed out in Note 5 • Program expenses of the City's governmental activites increased approximately 2.38%, or $2,251,964 from fiscal year 2017 to fiscal year 2018. The increase was seen in Community and Economic Development, which is due to expendibxres related to the HLJD Resiliency grant. Grant revenues offset these expenses. • The City implemented Governxnental Accunting Standards Board Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, during fiscal year 2018. The beginning net position for governmental activities was restated by $602,194 to retroactively report the increase in the OPEB liability as of July 1, 2017. OPEB expenses for fiscal year 2017 and deferred outflows of resources at June 30, 2017 were not restated because the inforxnation needed to restate those amounts was not available. 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. 23 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2018 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 reported as soon as the underlying event giving rise to the change occurs,regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in fubxre fiscal periods such as uncollected taxes and earned but unused sick and vacation leave. 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 30,2018 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 three fiduciary funds, an agency fund reporting resources held far the Dubuque Racing Association for improvements at the greyhound racing facility, an agency fund used for reporting resources from Mediacom for purchasing equipment relevant to public, educational, and governmental (PEG) access broadcasting and an agency fund used for reporting resources held far the decomissioning of the prior Flexsteel site. 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 schedule of changes in total OPEB liability. 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 30,2018 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 Governmental Activities Business-type Activities Total 2018 2017 2018 2017 2018 2017 (notrestated) (notrestated) (notrestated) Cmrentandotherassets $ 98,759,738 $ 96,575,236 $ 41,127,304 $ 41,87Q879 $ 139,887,042 $ 138,446,115 Capital assets 417,486,552 416,559,468 341,272,457 335,581,393 758,759,009 752,14Q861 Total assets 516,7A6,290 513,134,704 382,399,761 377,452,272 898,646,051 89Q586,976 Defe�red outflows ofresources 13,056,573 15,40Q630 1,698,734 1,56Q905 14,755,307 16,961,535 Long-tertn liabilities 122,035,984 129,295,802 191,234,961 193,953,187 313,27Q945 323,248,989 Otherliabilities 13,787,948 15,902,342 1Q538,592 12,71Q097 24,326,540 28,612,439 Total liabilities 135 823 932 145 198 144 201 773 553 206 663 284 337 597 485 351 861 428 Defe�redinflows of resources 29,021,411 27,725,187 369,011 227,991 29,39Q422 27,953,178 Net positio¢ Net investrnent in capital assets 379,04Q697 375,578,520 168,205,523 164,448,390 547,7A6,220 54Q026,910 Restricted 27,269,997 23,955,112 3,053,616 3,796,752 3Q323,613 27,751,864 Unrestricted (41,853,174) (43,921,629) 1Q696,792 3,876,760 (31,156,382) (4Q044,869) Totalnetposition $ 364,457,520 $ 355,612,003 $ 181,955,931 $ 172,121,902 $ 546,413,451 $ 527,733,905 Priar to restatement, net position of the governmental activities increased $8,845,517 over fiscal year 2017 balance of $355,612,003. Governmental activities had $478,000 of capital assets donated from outside sources. There was also a large decrease in deferred outflows of resources due to investments differences in relation to pension liability with IPERS and MFPRSI. Overall grant revenues increased by $960,262. With the IILJD Resiliency Project in full swing, we saw an increase of$4.1 million in grant revenues. Airport grant revenues decreased by $1.9 million as the final draws were made on the New Terxninal project. These two significant changes combined with other smaller increase and decreases spread across other grants accounted far the overall increase in grant revenues. zs CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2018 Priar to restatement, net position far the business-type activities increased $9,834,029 over fiscal year 2017 of $172,121,902. Charges for services increased $672,518. 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. Business type activities also had $3.3M in capital contributions. The majority of these was from governxnental funds, along with $35,000 from outside sources. A portion of the City's net position $30,323,613 or 5.5%represents resources that are subject to external restrictions on how they may be used. At the close of fiscal year 2018, the City has negative total unrestricted net position. The government-wide negative unrestricted results from TIF (governxnental activities) debt being used to finance capital assets of the business-type activities, along with $50,370,620 in pension liability and $6,016,233 in OPEB Liability. Governmental activities. Taxes are the largest source of governmental revenues with property taxes of $39,632,246 in 2018. Other governmental revenues included gaming $8,062,251, local option sales taxes $8,610,948, and charges for services $17,993,886. Governmental operating expenses during 2018 totaled $96,895,727. The largest programs were public safety of $29,482,962, public works of $20,393,871, community and economic development of $21,109,384, and culture and recreation of$14,323,710. Business-type adivities. Operating revenue increased $672,518. Sewer's supplies and services expenses were lower in fiscal year 2018 than fiscal year 2017, due to the renegotiation of supply contracts with chemicals purchases needed in operations. Stormwater also saw a decrease in employee expense as storxnsewer maintenance was lower than in past years. Parking and Transit both realized lower employee expense as synergies were put into place to combine staff across the two departments. z� CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2018 CITY OF DUBUQUE CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION Govemmental Activities Business-rype Activities Total 2018 2017 2018 2017 2018 2017 Revenues: (Not Restated) (Not Restated) (Not Restated) Program revenues Charges for services $ 17,993,886 $ 14,92Q016 $ 33,762,870 $ 33,09Q352 $ 51,756,756 $ 48,O1Q368 Operating grants and contributions 21,569,356 15,028,527 1,648,403 1,70Q171 23,217,759 16,728,698 Capitalgrants and contributions 7,779,713 13,36Q280 5,705,262 14,16Q820 13,484,975 27,521,100 Generalrevenues Proper[ytases 39,632,7A6 39,678,473 - - 39,632,7A6 39,678,473 Local option salestas 8,61Q948 8,89Q046 - - 8,61Q948 8,89Q046 Hotel/moteltas 2,286,469 2,821,745 - - 2,286,469 2,821,745 Utiliryfranchisefees 4,832,958 4,558,847 - - 4,832,958 4,558,847 Gaming 8,062,251 8,098,37A - - 8,062,251 8,098,324 Unrestrictedinvestrnentearnings 688,769 335,577 268,283 231,746 957,052 567,323 Gain on sale of capital assets 30Q857 83,720 4,680 54,074 314,537 137,794 Totalrevenues 111,766,453 107,775,555 41,389,498 49,237,163 153,155,951 157,012,718 Expenses: Public safety 29,482,962 3Q02Q343 - - 29,482,962 3Q02Q343 Publicworks 2Q393,871 19,608,137 - - 2Q393,871 19,608,137 Health and socialservices 883,217 815,251 - - 883,217 815,251 Culture andrecreation 14,323,710 13,653,509 - - 14,323,710 13,653,509 Communiry and economic development 21,109,384 18,096,170 - - 21,109,384 18,096,170 Generalgovemment 7,573,081 8,982,668 - - 7,573,081 8,982,668 Interest on longterm debt 3,129,502 3,467,685 - - 3,129,502 3,467,685 Sewagedisposalworks - - 11,614,347 11,326,661 11,614,347 11,326,661 Waterutiliry - - 7,109,421 6,807,217 7,109,421 6,807,217 Stortnwaterutility - - 6,159,039 6,234,015 6,159,039 6,234,015 Parkingfacilities - - 2,866,510 3,547,856 2,866,510 3,547,856 America'sRiverProject - - 1Q143 22,893 1Q143 22,893 Refuse collection - - 4,244,551 4,208,268 4,244,551 4,208,268 Transitsystem - - 4,722,979 4,237,054 4,722,979 4,237,054 Salt 119,421 45,039 119,421 45,039 Totalexpenses 96,895,727 94,643,763 36,846,411 36,42Q003 133,742,138 131,072,766 Increase(decrease)in net position before exVaordinary item and transfers 14,87Q726 13,131,792 4,543,087 12,808,160 19,413,813 25,939,952 ltansfers (5,423,015) (1,071,163) 5,423,015 1,071,163 Increase(decrease)in netposition 9,447,711 12,06Q629 9,966,102 13,879,323 19,413,813 25,939,952 Netpositioq beginning,as restated 355,009,809 343,551,374 171,989,829 158,242,579 526,999,638 501,793,953 Netpositioq ending $ 364,457,520 $ 355,612,003 $ 181,955,931 $ 172,121,902 $ 546,413,451 $ 527,733,905 28 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2018 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 $55,276,503 at June 30, 2018. $5,760,781 is in nonspendable for inventory, receivables, and prepaid items. $69,412 is nonspendable endowment corpus. $30,347,598 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 $4,660,158 for capital improvements. $1,267,250 is assigned for capital improvements and equipment. This leaves $13,171,304 for unassigned fund balances in the government funds. The General Fund's fund balance reserve goal is 10% of budgeted annual expenditures. The fund balance of the General Fund increased by $2,114,872 to $21,875,413. Gaming revenues decreased slightly by $36,073 ar(0.4)%in fiscal year 2018. Charges for Services increased $760,147 coupled with increases in taxes, licenses and permits, and investment earnings There was an increase in Community& Economic Development in relation to the HLJD Resilieny project This project funds improvements to homes to protect them from flash flooding and create a healthy home environxnent. The other piece funds infrastructure in relation the Bee Branch Watershed project These increased expenses are offset with grant monies received from the IILJD Resiliency grant. There was an increase of expenditures in Culture and Recreation due in part to receiving an additional Americorps grant, and increased expenditures at Five Flags as they continue their initiative to bring in more attractions. Both of these are partially offset by increased revenues. The fund balance of special revenue fund Tax Increment Financing increased by $1,755,868 to $9,111,788. Tax revenues increased by $2.2 million, offset by an increase in TIF rebates given. There were also two land sales making up the $2,071,201 residing in the Sale of Capital Assets line. 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, 2018, totaled $181,955,931 of which the unrestricted is $10,696,792. The net position of the Internal Service Funds increased by $2,609,751 to $3,274,780. The Health Insurance Reserve Fund increased $2,213,326 due to a decrease in costs because of a switch to a new third party administrator with better rates partnered with an increase in Stop-Loss revenues. The City experienced three large claims this year that hit the stop loss limit of $125,000. Workxnan's Comp experienced $352,544 less expenses in 2018 as compared to 2017. The unrestricted net position of the Internal Service Funds is $3,116,274. zs CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2018 The Sewer Fund had an increase of$2,055,488 far total net position of $28,528,318. Sewer Rates were increased 3%in 2018. Sewer also realized a decrease in supplies and services as chemical contracts were renegotiated at a lower cost The Water Utility had an increase in net position by $1,797,473 far total net position of $29,022,469. Water rates were increased 3%in 2018. The Storm Water Utility had an increase in net position of $4,546,440. Ending net position is $59,697,557. Storxnwater had $2.7M in assets contributed from outside sources, most of which came from the Resiliency Grant as Bee Branch infrastrucbxre. Stormwater saw a 7%increase in rate for fiscal year 2018. The Parking Facilities had a increase in net position of$331,873. Ending net position is $48,074,749. Operating income increased $257,487. Parking realized a decrease in overall operating expenses as operating efficiencies were initiated across the Parking and Transit departments. Other Enterprise Funds net position increased by $1,234,828 to $16,632,838. This was primarily due to Transit's increase of$1,259,029 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 increased in fiscal year 2018 by $2,213,326. Revenues increased 7.7% by $846,903 and claims decreased 15%over 2017. Workxnan's Comp Reserve net position increased by $271,220. The fund saw a decrease in both actual claims paid and claims payable accounting for the increase. BUDGETARY HIGHLIGHTS There were two amendments to the City's 2017-2018 cash basis budget. The first amendment was passed in September 2017 to reflect operating and capital budget carryovers (continuing appropriation authority) from fiscal year 2018 and amended the fiscal year 2018 budget for operating and capital City Council actions since the beginning of the fiscal year. The second budget amendment was passed in March 2018 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 $38,565,770. 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 $84,269,269 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 30,2018 Actual cash basis revenues were $42,683,584 less than the final amended budget; and, cash basis expenditures were $84,524,036 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, 2018, amounts to $758,759,009 (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) 6wervemevtalAc[ivities B�sivessiypeAc[ivities Total 2018 201] 2018 201] 2018 20ll Lavd $ ]8,309y98 $ 80,134,Sll $ 24,399,223 $ 24,185y03 $ 102,]09,221 $ 104,320,]20 Buildivgs 141,320,12] 140y98y26 158,539,345 152,109,]]8 199,859,4]2 293,108,]04 Impcwemenls othec Nan b�ilAvgs 24,045,686 23,8]4,592 168,060,566 161,541,265 192,106,252 185,415,85] Macttiveryandequipmevt 50,688,060 4],225,119 112,329y61 110,364,436 163,018,021 15],589,555 Infras[rucNre 234,204,]69 231y30,452 - - 234,204,]69 231y30,452 Covstruc[ionivprog�ess 49y54y19 44,6]3y68 5,819,]82 6,50],415 55,]]4,]ll 51,181,383 Accumiilateddepceciatiov (161,03],Ol]) (152,2]8,406) (12],8]6,420) (119,12],404) (288y13,43]) (2]1,405,810) $ 4ll,486,553 $ 416,559,468 $ 341,2]2,45] $ 335,581,393 $ ]58,]59,009 $ ]52,14Q861 Major expenditures during 2017-2018 were far the construction wark on the Bus Garage, Southwest Arterial construction,IILJD Resiliency Projects, and Bee Branch storxn water projects. Long-term debt At year end, the City had $265,425,720 of debt outstanding. During fiscal year 2018,the City issued $5,955,000 of general obligation bonds, $5,750,000 of which was used for refunding. The City refunded $5,695,000 of general obligation bonds. The refunding was undertaken to reduce total debt service payments. The results of the transaction is a reduction of $235,053 in fubxre debt service payments for an economic gain of$197,121. 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 $1,346,966 of SRF debt in 2018 as part of the Bee Branch Storxnwater construction project and $375,384 for green alley projects reducing stormwater runoff, and $489,758 far the CatFish Creek stabilization project 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 $209,048,707. With $134,915,711 of debt applicable against the capacity, the City is utilizing 64.54% 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 30,2018 ECONOMIC FACTORS The City's unemployment rate as of September, 2018 was 1.9%, down from 2.5% in September, 2017. The national average was 3.7% for September 2018, according to the Bureau of Labor Statistics. State of Iowa was 2.5%as reparted in September, 2018. The assessed valuation of taxable property, net of exemptions, increased by 1.30% to 2,679,030,000. In fiscal year 2018, the minimum monthly refuse rate increased from $14.77 to $15.11, sewer and water rates increased 3%, and the storxn water monthly fee increased from $6.81 to $7.27 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, 2018 City of Dubuque, Iowa 33 CITY OF DUBUQUE,IOWA STATEMENT OF NET POSITION JUNE 3Q 2018 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 $ 41,077,971 $ 23,197,932 $ 64,275,903 $ 3,576,089 $ 2,019,075 $ 25,482 Receivables Proper[y taY Delinquent 198,876 - 198,876 - - - Succeedingyear 26,494,204 - 26,494,204 - - - Accounts and other 2,478,596 3,549,049 6,027,645 436,651 131,07A 18,235 Specialassesgnents 726,596 - 726,596 - - - Acaued interest 126,507 84,537 211,044 48,310 - - Notes 523,095 - 523,095 - 7A,375 - Intergovemmental 9,063,602 2,113,628 11,177,230 480 - - InvenWries 60Q491 947,946 1,548,437 - 133,347 9,044 Prepaiditems 617,998 104,815 722,813 13,008 - - Total CmrentAssets 81,907,936 29,997,907 111,905,843 4,074,538 2,307,821 52,761 NONCURRENTASSETS Expendablerestricted cash andinvestrnents 7,046,718 11,129,397 18,176,115 7,608,226 1,345,313 117,392 Nonespendablerestricted cash andinvestrnents 69,412 - 69,412 - - - Notesreceivable 9,735,672 - 9,735,672 - 167,262 - Capital assets Land 78,309,999 7A,399,223 102,709,222 2,952,666 117,723 - Buildings 141,32Q127 158,539,345 299,859,472 207,715 45,676,454 292,602 Improvements otherthan buildings 7A,045,686 168,06Q566 192,106,252 13,668,654 - - Machineryandequipment SQ688,060 112,329,961 163,018,021 4,048,113 31,735 81,592 InfrasWcture 234,204,768 - 234,204,768 - - - Constructionin progress 49,954,930 5,819,782 55,774,712 3,629,793 121,193 - Accumulated depreciation (161,037,018) (127,876,420) (288,913,438) (9,756,160) (9,161,905) (97,203) TotalNoncurrentAssets 434,338,354 352,401,854 786,74Q208 22,359,007 38,297,775 394,383 Total Assets 516,7A6,290 382,399,761 898,646,051 26,433,545 4Q605,596 447,144 DEFERRED OUTFLOWS OF RESOURCES Pension related defe�red outflows 12,908,746 1,669,475 14,578,221 161,403 - - OPEB related deferred outflows 147,827 29,259 177,086 3,429 - - Total Defe�red Outflows of Resources 13,056,573 1,698,734 14,755,307 164,832 - - 34 CITY OF DUBUQUE,IOWA EXHIBIT 1 STATEMENT OF NET POSITION(continued) (continued) JUNE 3Q 2018 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 $ 5,29Q753 $ 1,003,57A $ 6,294,277 $ 7A2,574 $ 161,164 $ 284,891 Acauedpa}soll 1,603,198 29Q110 1,893,308 27,434 - - Loanspayable 83,969 1,029,495 1,113,464 - - 47,834 Notespayable 79,827 4,482,778 4,562,605 - 489,518 - General obligation bonds payable 4,821,734 2,918,267 7,74Q001 40Q000 - - Revenuebondspayable - 315,000 315,000 - - - Tas inaement financing bonds payable 510,000 - 510,000 - - - Acaued compensated absences 432,776 101,254 534,030 4,257 - - Acauedinterestpayable 7A9,911 398,1&V 648,075 21,888 522,221 - Intergovemmentalpayable 2,499 - 2,499 81,214 - - Uneamedrevenue 713,281 713,281 TotalCmrentLiabilities 13,787,948 1Q538,592 7A,326,540 777,367 1,172,903 332,725 NONCURRENT LIABILITIES Loanspayable 3,983,731 3,152,331 7,136,062 - - 7,770 Notespayable 176,054 108,282,432 108,458,486 - 4,72Q217 - Generalobligationbondspayable 44,011,764 39,061,643 83,073,407 8,56Q386 - - Revenuebondspayable - 33,159,133 33,159,133 - - - Landfill closure andpostclosure care - - - 3,102,165 - - Tas inaement financing bonds payable 19,357,562 - 19,357,562 - - - Acaued compensated absences 5,072,884 626,558 5,699,442 233,608 - - Netpensionliability 44,497,380 5,873,7A0 SQ37Q620 567,817 - - Total OPEB liability 4,936,609 1,079,67A 6,016,233 116,294 TotalNoncurrentLiabilities 122,035,984 191,234,961 313,27Q945 12,58Q270 4,72Q217 7,770 TotalLiabilities 135,823,932 201,773,553 337,597,485 13,357,637 5,893,120 34Q495 DEFERREDINFLOWSOFRESOURCES Pensionrelateddefe�redinflows 2,254,642 322,017 2,576,659 31,132 - - Succeeding year proper[ytas 26,494,204 - 26,494,204 - - - Defe�red arnount on refunding 272,565 46,994 319,559 Totaldefe�redinflowsofresources 29,021,411 369,011 29,39Q422 31,132 NET POSITION Netinvestrnentincapitalassets 379,04Q697 168,205,523 547,7A6,220 8,696,011 36,593,563 276,991 Res[riRed for/by: Bondordinancedevelopmentagreement 2,14Q740 3,053,616 5,194,356 - - - Debtservice 261,118 - 261,118 - - - Employee benefits 7A,685 - 7A,685 - - - Communitydevelopment 8,383,743 - 8,383,743 - - - Iowa Finance Authority Trust 488,375 - 488,375 - - - Capitalprojects 13,889,841 - 13,889,841 - - - Franchise agreement 587,096 - 587,096 - - - Endowments,expendable 95,251 - 95,251 - - - Endowments,nonexpendable 69,412 - 69,412 - - - Other 1,329,736 - 1,329,736 - - - State statute - - - 9Q394 - - Landtill closure and pos[closure care - - - 1,510,051 - - Minoriry interest - - - 661,286 - - Unrestricted (41,853,174) 1Q696,792 (31,156,382) 2,251,866 (1,881,087) (17Q342) TotalNetPosition $ 364,457,520 $ 181,955,931 $ 546,413,451 $ 13,209,608 $ 34,712,476 $ 106,649 See notes W financial statements. 35 CITY OF DUBUQUE,IOWA STATEMENT OFACTNITIES EXHIBIT 2 FOR THE YEAR ENDED JUNE 3Q 2018 HogcamRevev�es Net(Eyievse)Revev�eavdChavgesivNetPositiov Primary 6wemmevt CompovevtUvils Dubuque Dubuque Opecativg Capital6rants Metropolitav D�b�q�e Visitocavd Charges fic 6ravls avd avd Total Prog�arn 6ovemmevtal B�sivess-type Area Solid Initiatives avd Convevtiov FLvctiovs/Prog�ams E4pevses Services CovMb�tiovs Contrib�fions Revev�es Activities Ac[ivities Total WasteAgency S�b9diaries Burea� Primary governmeut 6ovemmental Activities: P�blicsafety $ 29,4ffiy62 $ 2,600,]51 $ 911,239 $ - $ 3,S11y90 $ (25y]Oy]2) $ - $ (25y]Oy]2) P�blicwocks 20,393,8]1 6,654,101 6,851,240 ],633,]59 21,139,100 ]45,229 - ]45,219 Hea1N andsoQalservices 883,2ll 126,399 12,]95 - 139,194 (]44,023) - (]44,023) Giltureavdrecreatiov 14,323,]10 2,8]4,493 401,484 145y54 3,421y31 (10y01,]]9) - (10y01,]]9) Comm�nilyandeconomicdevelopmevt 21,109,384 630,881 12,858,509 - 13,489,390 (],619y94) - (],619y94) 6evecalgovemment ],5]3,081 5,10],261 534,089 - 5,641,350 (1y31,]31) - (1y31,]31) Interes[on longterm debt 3 129 502 (3,12Q502) (3,119,502) Total govemmevtal ac[ivities 96,895,]2] 1]y93,886 21,569,356 ],]]9,]13 4],342y55 (49,552,]]2) (49,552,]]2) B�sivess-type activifies Sewage disposal wocks 11,614,34] 12,659,662 - 4,450 12,664,112 - 1,049,]65 1,049,]65 Watec�tilily ],109,421 Sy06,136 - ]5,54] Sy81,683 - 1,8]2,262 1,8]2,262 Stortnwatec�filily 6,159,039 4,36]y63 - 3,]63,468 8,131,431 - 1,9]2,392 ly]2,392 Parldvgfaalifies 2,866,510 3,034,]44 - ]6,691 3,111,435 - 244,925 244y25 amedoz�sx�vecrco�eoe iqias - - - - - (iqias) (iqias) xer�seoou�eoo a,zaa,ssi a,zsz,saz - - a,zsz,saz - �iz,00v� �iz,00v� 1Yaysitsystem 4,]22y]9 465,550 1,648,403 1,]85,106 3,899,059 - (823,920) (823y20) s�e iiv,azi vc,vs vc,vs �zs,ias� �zs,ias� Total b�sivess-type activifies 36,846,411 33,]62,8]0 1,648,403 5,]05,262 41,116,535 4,2]Q124 4,2]Q124 Totel primary govemment $ 133,]42,138 $ 51,]56,]56 $ 23,21],]59 $ 13,484y]5 $ 88,459,490 $ (49,552,]]2) $ 4,2]0,124 $ (45,282,648) Component units D�b�q�e Metropolitav Area Solid W aste Agevcy $ 3,446,818 $ 5,352,859 $ - $ 55,892 $ 5,408,]51 $ 1y61y33 $ - $ - D�b�q�elnitiativesandS�bsiAaries 3,436,443 3,193,]25 - - 3,193,]25 - (242,]18) - D�b�q�e Covvevfion and Visitocs Burea� 12]1 639 1 245 625 80 50] 1 326132 54 493 TotalCompovevtUvils $ 8,154y00 $ 9]92209 $ - $ 136399 $ 9y28,608 1y61y33 (242,]18) 54493 6evecal revev�es Pcoperty texes 39,632,246 - 39,632,246 - - - Local opfion sales tae 8,610y48 - 8,610y48 - - - Hotel motel tae 2,286,469 - 2,286,469 - - - Utilityfravcttisefees 4,832y58 - 4,832y58 - - - 6arnivg 8,062,251 - 8,062,251 - - - Unrestrictedivvestrnentearnivgs 688,]69 268,283 95],052 136,632 420,04] 265 6aiv on disposal of capital assels 309,85] 4,680 314,53] - - - 1Yaysfers (5,423,015) 5 423 O15 Total general reven�es avd transfecs 59,000,483 5,695y]8 64,696,461 136,632 420,04] 265 ChavgeivNetPositiov 9,44],]ll 9y66,102 19,413,813 2,098,565 ll],329 54,]58 Netpositioqbeginnivgofyeac,ascestated 355,009,809 1]1y89,819 526y99,638 11,111,043 34,535,14] 51,891 Netpositioq evdivg ofyeac $ 364,45],520 $ 181y55y31 $ 546,413,451 $ 13,209,608 $ 34,]12,4]6 $ 106,649 See votes to 5vavcial statemevts 36 THIS PAGE IS INTENTIONALLY LEFT BLANI� 37 CTTY OF DUBUQUE, IOWA BALANCESHEET GOVERNNIENTAL FUNDS JUNE 30,2018 SpecialRevenue TaY Increment General Financing ASSETS Cash and pooled cash investrnents $ 15,96Q662 $ 6,264,163 Receivables Proper[y tas Delinquent 154,281 1Q555 Succeedingyear 22,161,528 - Accounts and other 1,964,186 123,289 Special assessments 14,385 - Accrued interest 31,361 55,707 Notes 4,67A,888 289,800 Intergovemmental 1,083,092 - Due from other funds 18Q873 - InvenWries 24Q827 - Prepaid items 549,207 - Restricted cash and pooled cash investrnents 229,304 2,368,274 Total Assets $ 47,194,594 $ 9,111,788 LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accountspayable $ 1,055,449 $ - Accruedpayroll 1,444,824 - Intergovemmental payable - - Due to other funds - - Uneamed revenue 56$882 Total Liabilities 3,069,155 DEFERREDINFLOW OFRESOURCES Unavailable revenues Succeeding year proper[y tas 22,161,528 - Special assessments 14,385 - Grants 12,174 - Other 61,939 TotalDefe�redInflowsofResources 22,25Q026 - FUND BALANCES Nonspendable Endowmentcorpus - - InvenWry 24Q827 - Long-tertn notes receivable 4,67A,888 - Prepaid items 549,207 - Restricted Endowments - - Library - - Police - - Veterans - - Debt service - - Bondordinance - 2,14Q740 Capital improvements - 6,971,048 Franchise agreement - - Special assessmen[s - - Iowa Finance Authority Trust - - Communityprograms - - Employee benefits - - Committed,capital improvements - - Assigned DRAgaming and distribution 1,267,250 - Unassigned 15,193,7A1 TotalFundBalances 21,875,413 9,111,788 Total Liabilities,Deferred Inflows of Resources, andFundBalances $ 47,194,594 $ 9,111,788 See notes W financial statements. 38 EXHIBIT 3 Other Govemmental DebtService Funds Total $ 259,467 $ 12,815,475 $ 35,299,767 1,416 32,624 198,876 283,612 4,049,064 26,494,204 - 228,385 2,315,860 - 712,211 726,596 579 26,725 114,372 - 5,344,079 1Q258,767 - 7,98Q510 9,063,602 - - 18Q873 - 293,852 534,679 - 52,007 601,214 4,518,552 7,116,130 $ 545,074 $ 36,053,484 $ 92,904,940 $ - $ 2,674,778 $ 3,73Q227 - 129,540 1,574,364 - 2,499 2,499 - 153,075 153,075 144 299 713 181 3,104,191 6,173,346 283,612 4,049,064 26,494,204 - 684,205 698,590 - 4,096,790 4,108,964 344 91,050 153,333 283,956 8,921,109 31,455,091 - 69,412 69,412 - 293,852 534,679 - - 4,624,888 - 52,007 601,214 - 95,251 95,251 - 1,154,830 1,154,830 - $608 $608 - 138,148 138,148 261,118 - 261,118 - - 2,14Q740 - 1Q065,806 17,036,854 - 587,096 587,096 - 28,150 28,150 - 488,375 488,375 - 8,383,743 8,383,743 - 7A,685 24,685 - 4,66Q158 4,66Q158 - - 1,267,250 (2,021,937) 13,171,304 261,118 24,028,184 55,276,503 $ 545,074 $ 36,053,484 $ 92,904,940 39 THIS PAGE IS INTENTIONALLY LEFT BLANI� ao CITY OF DUBUQUE, IOWA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET ExxiBil �1 TO THE STATEMENT OF NET POSITION JUNE 30,2018 Total fund balances-governmental funds $ 55,276,503 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 $ 578,168,552 Accumulated depreciation (16Q84Q505) 417,328,047 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 unavailable in the funds. Those revenues consist of: Property tax 45,675 Special assessments 698,590 Other 4,216,518 4,960,783 Pension and OPEB 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 (2,161,986) Deferred outflows of resources 12,576,207 1 Q414,221 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. 3,274,780 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 (48,833,498) Taxincrementfinancing bonds (19,867,562) Notes payable (255,881) Loans payable (4,067,700) Deferred amount on debt refundings (272,565) Accrued interest (249,911) Compensated absences (5,505,660) Net pension liability (42,807,428) Total OPEB liability (4,936,609) (126,796,814) Net position of govemmental activities $ 364,457,520 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 30,2018 SpecialRevenue TaY Increment General Financing REVEN[JES Tases $ 33,557,813 $ 12,597,948 Special assessmen[s - - Licenses and permits 1,642,498 - Intergovemmental 1,204,424 - Charges for services 11,309,551 - Fines and forfeits 407,322 - Investmenteamings 478,639 22,178 Contributions 416,157 123,289 Gaming 8,062,251 - Miscellaneous 606,836 Total Revenues 57,685,491 12,743,415 EXPENDITURES Cmrent Public safety 28,569,053 - Publicworks 5,75Q658 - Health and social services 843,819 - Culture and recreation 12,482,445 - Communityandeconomicdevelopment 3,735,824 4,188,570 General govemment 6,202,299 - Debt service Principal - - Interestandfiscalcharges - - Capital projects TotalExpenditures 57,584,098 4,188,570 EXCESS(DEFICIENCI�OF REVENUES OVER(UNDER)EXPENDITURES 101,393 8,554,845 OTHER FINANCING SOURCES(USES) Issuance of debt - - Issuance ofrefunding bonds - - Premium on bonds - - Premium on refunding bonds - - ltansfers in 5,513,725 1,111,426 �rar�sferso�c (s,sss,�s�) (9,9si,wa) Insurancerecovery 40,058 - Sale of capital assets 15,483 2,071,201 Totai ou,�r F��ar��g so�r�es�uses) z,ois,a�9 (b,�9s,9��) NET CHANGE IN FUND BALANCES 2,114,872 1,755,868 FUND BALANCES,BEGINNING 19,76Q541 7,355,920 FUND BALANCES,ENDING $ 21,875,413 $ 9,111,788 See notes W financial statements. 42 EXHIBIT 4 Other Govemmental DebtService Funds Total $ 229,953 $ 8,976,907 $ 55,362,621 - 122,968 122,968 - - 1,642,498 - 26,025,130 27,229,554 - 249,466 11,559,017 - - 407,322 16,488 171,464 688,769 - 277,476 816,922 - - 8,062,251 982,236 1,589,072 7A6,441 36,805,647 107,48Q994 - 12,413 28,581,466 - 5,936,651 11,687,309 - 1Q226 854,045 - 294,146 12,776,591 12,473 12,413,333 2Q35Q200 - 553,180 6,755,479 7,989,850 - 7,989,850 3,274,200 - 3,274,200 17,402,848 17,402,848 11,276,523 36,622,797 109,671,988 (ii,oso,osz) isz,sso (z,i9o,99a) - iio,000 iio,000 1,778,325 - 1,778,325 - 1,616 1,616 15,299 - 15,299 9,714,766 2,549,179 18,889,096 (ab�,9ia) (b,9�s,os� (zo,9so,s9i) - 5$000 9$058 67,862 2,154,546 ii,oao,a�b (a,iss,az9) z,obb,sa9 iqs9a (a,00s,s�9) (iza,aas) 25Q77A 28,033,763 55,40Q948 $ 261,118 $ 24,028,184 $ 55,276,503 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 30,2015 Net change in fund balances-total govemmental funds $ (124,445) 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 $ 15,499,511 Transfers of capital assets to enterprise funds (3,318,74'� Contdbutions from developers and federal government 478,852 Depreciation er.pense (9,881,290) 2,778,326 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 (1,844,688) 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 5,278 Special assessments (79,158) Other 823,952 75Q072 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 (1,905,238) Debt repayments 7,989,850 6,084,612 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 30,742 Amortization of bond discounUpremium 126,921 Increase in compensated absences (14,81'� Deferred amount on debt refimdings 12,928 Pension adjustment (965,801) OPEB adjustment 4,110 Total additional expenses (805,917) 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. 2,609,751 Cktange in net position of govemmental activities $ 9,447,711 See notes to firtancial statements. 45 CITY OF DUBUQUE,IOWA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30,2015 Business-type Activities-Enteiprise hlinds Sewage Disposal Water Stormwater Works Utility Utility ASSETS CURRENT ASSETS Cash and pooled cash investments $ 5,172,357 $ 7,606,058 $ 8,080,816 Receivables Accounts 1,492,008 1,043,349 504,433 Accrued interest 13,486 28,039 37,573 Intergovemmental - - 1,008,134 Prepaiditems 8,539 337 58,108 Inventories 214,868 733,078 - TotalCuirentAssets 6,901,258 9,410,861 9,689,064 NONCURRENT ASSETS Restdcted cash and pooled cash investments 875,506 2,093,657 7,753,337 Capital assets Land 254,858 209,244 2Q987,529 Buildings 72,269,461 10,165,805 - ImprovemenTs to other than buildings 48,641,269 1,807,167 112,750,389 Machinery and equipment 39,59Q547 59,429,429 1,132,413 Construction in progress 943,398 4,025,317 851,067 Accumulated depreciation (60,000,554) (27,285,599) (15,477,553) Net Capital Assets 101,698,979 48,351,363 120,243,845 TotalNoncurrentAssets 102,574,485 50,445,020 127,997,182 Total Assets 109,475,743 59,855,881 137,686,246 DEFERRED OUTFLOWS OF RESOURCES Pension related defeired outflows 364,083 377,565 103,370 OPEB related deferred outflows 6,516 7,184 2,870 Total Defeired Outflows of Resources 370,599 384,749 106,240 46 EXHIBIT 5 Business-type Activities-Enterprise Fhnds Govemmental Activities- Parking Other Enteiprise Intemal Service Facilities Fhnds Total Fhnds $ 1,113,325 $ 1,225,376 $ 23,197,932 $ 5,778,204 101,860 407,399 3,549,049 162,736 3,390 2,049 84,537 12,135 - 1,105,494 2,113,628 - 26,453 11,378 104,815 16,784 - - 947,946 65,812 1,245,028 2,751,696 29,997,907 6,035,671 406,897 - 11,129,397 - 2,911,592 36,000 24,399,223 - 62,337,568 13,766,511 158,539,345 - 3,379,337 1,482,404 168,060,566 - 2,794,827 9,382,745 112,329,961 355,018 - - 5,819,782 - (17,307,900) (7,804,814) (127,876,420) (196,513) 54,115,424 16,862,846 341,272,457 158,505 54,522,321 16,862,846 352,401,854 158,505 55,767,349 19,614,542 382,399,761 6,194,176 92,197 732,260 1,669,475 480,366 1,372 11,317 29,259 - 93,569 743,577 1,698,734 480,366 47 CITY OF DUBUQUE,IOWA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30,2015 Business-type Activities-Enteiprise hlinds Sewage Disposal Water Stormwater Works Utility Utility LIABILITIES CURRENT LIABILITIES Accounts payable $ 99,622 $ 544,722 $ 243,239 Accrued payroll 59,862 62,880 20,645 Loans payable-current - 1,OOQ000 - General obligation bonds payable 595,317 687,687 948,021 Revenuebondspayable - 315,000 - Capital loan notes payable 2,764,000 190,000 1,528,778 Accrued compensated absences 19,356 64,421 - Accruedinterestpayable 143,730 72,895 161,246 Due to other funds - - - Total Cuirent Liabilities 3,681,887 2,937,605 2,901,929 NONCURRENT LIABILITIES Loans payable - 3,OOQ000 - General obligation bonds payable 1Q467,524 12,335,315 9,689,406 Revenuebondspayable - 4,511,572 28,647,561 Capital loan notes payable 65,383,060 6,524,958 36,374,414 Accrued compensated absences 151,531 193,145 10,722 Netpensionliability 1,280,855 1,328,284 363,657 Total OPEB liability 270,877 300,908 65,920 TotalNoncurrentLiabilities 77,553,847 28,194,182 75,151,680 Total Liabilities 81,235,734 31,131,787 78,053,609 DEFERRED INFLOWS OF RESOURCES Pension related defeired inflows 7Q226 72,826 19,938 Deferred amount on refunding 12,064 13,548 21,382 Total Defeired Inflows of Resources 82,290 86,374 41,320 NET POSITION Netinvestmentincapitalassets 32,111,649 21,394,312 51,159,759 Restdcted by bond ordinance/development agreement - 566,719 2,080,000 Unrestdcted (3,583,331) 7,061,438 6,457,798 Total Net Position $ 28,528,318 $ 29,022,469 $ 59,697,557 See notes to financial statements. 48 EXHIBIT 5 Business-type Activities-Enteiprise Fhnds Govemmental Activities- Parking Other Enteiprise Intemal Service Facilities Fhnds Total Fhnds $ 21,612 $ 94,329 $ 1,003,524 $ 1,56Q526 14,525 132,198 29Q110 28,834 29,495 - 1,029,495 - 672,974 14,268 2,918,267 - - - 315,000 - - - 4,482,778 - 8,109 9,368 101,254 - 17,755 2,538 398,164 - - - - 27,798 764,470 252,701 10,538,592 1,617,158 152,331 - 3,152,331 - 6,409,706 159,692 39,061,643 - - - 33,159,133 - - - 108,282,432 - 19,543 251,617 626,558 - 324,346 2,576,098 5,873,240 1,689,948 97,988 343,931 1,079,624 - 7,003,914 3,331,338 191,234,961 1,689,948 7,768,384 3,584,039 201,773,553 3,307,106 17,785 141,242 322,017 92,656 - - 46,994 - 17,785 141,242 369,011 92,656 46,850,917 16,688,886 168,205,523 158,506 406,897 - 3,053,616 - 816,935 (56,048) 10,696,792 3,116,274 $ 48,074,749 $ 16,632,838 $ 181,955,931 $ 3,274,780 49 CITY OF DUBUQUE,IOWA STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 3Q 2015 Business-type Activities-Enteiprise Funds Sewage Disposal Water Stormwater Works Utility Utility OPERATING REVENUES Charges for sales and services $ 12,557,062 $ 8,86Q063 $ 4,316,584 Other 102,600 46,073 51,379 Total Operating Revenues 12,659,662 8,906,136 4,367,963 OPERATING EXPENSES Employee expense 3,929,434 2,533,836 1,396,853 Utilities 552,355 690,346 39,825 Repaiis and maintenance 596,696 165,481 101,398 Supplies and services 1,182,007 1,511,896 83Q925 Insurance 99,336 87,468 16,122 Depreciation 3,403,512 1,404,937 1,727,937 TotalOperatingEr.penses 9,763,340 6,393,964 4,113,060 OPERATING INCOME(LOSS) 2,896,322 2,512,172 254,903 NONOPERATING REVENUES(EXPENSES) Intergovemmental - 2,452 - Investmentearnings 71,179 55,989 117,689 Contdbutions 4,450 - 42,114 inc��egce�enge �i,ssi,00�� is,as�� z,oas,9�9� Gain on disposal of assets 2,791 1,847 42 NetNonoperatingRevenues(Expenses) (1,772,587) (655,169) (1,886,134) INCOME(LOSS)BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS 1,123,735 1,857,003 (1,631,231) CAPITAL CONTRIBUTIONS - 73,095 6,420,173 TRANSFERS IN 1,074,637 10,259 530,105 TRANSFERS OUT (142,884) (142,884) (772,607) CHANGE IN NET POSITION 2,055,488 1,797,473 4,546,440 NET POSITION,BEGINNING,AS RESTATED 26,472,830 27,224,996 55,151,117 NET POSITION,ENDING $ 28,528,318 $ 29,022,469 $ 59,697,557 See notes to financial statements. 50 EXHIBIT 6 Business-type Activities-Enteiprise Funds Govemmental Other Activities- Parking Enterprise Intemal Facilities Funds Total Service Funds $ 2,864,971 $ 4,727,291 $ 33,325,971 $ 17,159,994 169,773 67,074 436,899 73,832 3,034,744 4,794,365 33,762,870 17,233,826 651,076 5,318,431 13,829,630 2,587,998 261,437 105,621 1,649,584 33,233 222,024 1,173,895 2,259,494 93,718 202,562 1,330,222 5,057,612 11,778,148 78,243 64,770 345,939 110,744 1,201,791 1,101,442 8,839,619 37,322 2,617,133 9,094,381 31,981,878 14,641,163 417,6ll (4,300,016) 1,780,992 2,592,663 - 1,564,123 1,566,575 1,294 15,906 7,520 268,283 25,581 76,691 84,280 207,535 - (249,377) (2,713) (4,864,533) - - - 4,680 3,186 �is6,�so� i,6ss,zio �z,si�,a6o� so,o6i z6o,ssi �z,6a6,so6� �i,os6,a6s� z,6zz,�za 151,700 2,253,334 8,898,302 - 655,384 1,886,293 4,156,678 - (736,042) (257,993) (2,052,410) (12,973) 331,873 1,234,828 9,966,102 2,609,751 47,742,876 15,398,010 171,989,829 665,029 $ 48,074,749 $ 16,632,838 $ 181,955,931 $ 3,274,780 51 CITY OF DUBUQUE, IOWA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2018 Business-rype Activities-Enteiprise Funds Sewage Disposal Water SWrtnwater Parking Works Utility Utiliry Facilities CASH FLOWS FROM OPERATING ACTIVITIES Cash received from cusWmers $ 12,384,984 $ 8,759,670 $ 4,7AQ761 $ 2,98Q187 Cash payments W suppliers for goods and services (3,935,369) (2,173,648) (1,911,533) (774,374) Cash payments W employees for services (3,783,660) (2,635,857) (1,371,545) (724,139) Otheroperatingreceipts 102,600 46,073 51,379 169,773 NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES 4,768,555 3,996,238 1,009,062 1,651,447 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES ltansfersfromotherfunds 1,074,637 1Q259 53Q105 655,384 �rar�sferscoou,err��ds (iaz,ssa) (iaz,ssa) (��z,w�) (�sb,oaz) Payment of interfund balances - - - - Contributions - - - - Intergovemmental grant proceeds NET CASH PROVIDED BY(USED FOR) NONCAPITALFINANCINGACTNITIES 931,753 (132,625) (242,502) (8Q658) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets 2,791 1,847 42 - Acquisition and consWction of capital assets (1,225,715) (3,719,99� - - Proceeds from issuance of debt 1,405,384 5,06Q857 3,551,223 45,500 Premium on debtissuance 15,018 16,854 25,000 3,060 Paymentofdebt (4,286,279) (2,838,837) (3,72Q925) (937,673) Interestpaid (1,856,930) (872,553) (2,103,423) (266,093) Contributions 4,450 - 142,316 76,692 Intergovemmentalgrantproceeds 2,452 805,7A1 NET CASH PROVIDED BY(USED FOR)CAPITAL ANDRELAI'EDFINANCINGACTNITIES (5,941,283) (2,349,377) (1,30Q52� (1,078,514) CASH FLOWS FROM INVESTING ACTIVITIES Interestreceived 63,020 34,924 94,040 13,384 NET INCREASE(DECREASE)IN CASH AND POOLEDINVFSTMENTS (177,955) 1,549,160 (439,92� 505,659 CASH AND CASH EQUNALENTS,BEGINNING 6,225,818 8,15Q555 16,274,079 1,014,563 CASH AND CASH EQUNALENTS,ENDING $ 6,047,863 $ 9,699,715 $ 15,834,153 $ 1,52Q222 52 EXHIBIT 7 Business-rype Activities-Enteiprise Funds Govemmental Other Activities- Enteiprise Intemal Funds Total Service Funds $ 4,715,450 $ 33,081,052 $ 17,057,857 (s,9sz,bza) (iz,�a�,sas) (iz,zis,sss) (s,iss,iiz) (is,�os,sis) (z,bss,ssz) 67,074 436,899 73,832 (a,sss,ziz) �,ob�,o9z z,zzs,999 1,886,293 4,156,678 (zs�,99s) (z,osz,aio) (iz,9�s) (z,ss�) (z,ss�) (ii,zia) sa,zso sa,zso - z,siz,azz z,siz,azz a,szz,iis a,99s,oss (za,is�) - 4,680 3,186 (�sb,sb9) (s,�sz,sso) (so,��o) 123,839 1Q186,803 - - 59,932 - (si,isa) (ii,sia,sbs) - (s,00z) (s,ioz,00i) i,z9a - 223,458 - 807,693 (b9�,is� (ii,sbb,sss) (zb,z9o) 6,268 211,636 16,280 (sz�,ois) 9o9,9zs z,i9a,soz 1,752,391 33,417,406 3,583,402 $ 1,225,376 $ 34,327,329 $ 5,778,204 (Continued) 53 CITY OF DUBUQUE, IOWA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2018 Business-rype Activities-Enteiprise Funds Sewage Disposal Water SWrtnwater Parking Works Utility Utiliry Facilities RECONCII,IATION OF OPERATING INCOME(LOSS) TO NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES Operating income(loss) $ 2,896,322 $ 2,512,172 $ 254,903 $ 417,611 Adjustments W reconcile operating income Qoss)W net cash provided by(used for)operating activities Depreciation 3,403,512 1,404,937 1,727,937 1,201,791 Change in assets and liabilities (Increase)decrease in receivables (172,078) (1OQ393) (75,823) 115,216 (Increase)decrease in invenWries and prepaid items (65,968) 31,692 (33,385) (26,453) Increase(decrease)in accounts payable (1,439,007) 249,851 (889,878) 16,345 Increase(decrease)in acemed liabilities 7,260 (46,542) 1,827 (1Q135) Increase(decrease)netpension liabiliry 16Q276 (94,470) 1,517 (83,090) Qncrease)in defe�red outflows (65,879) 2,142 (7,762) 17,227 Increase(decrease)in deferred inflows 37,782 29,864 26,936 1,601 Increase in net OPEB liability 6,335 6,985 2,790 1,334 Total Adjustrnents 1,872,233 1,484,066 754,159 1,233,836 NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES $ 4,768,555 $ 3,996,238 $ 1,009,062 $ 1,651,447 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Contribution of capital assets from outside sources $ $ 73,095 $ 3,721,354 $ Capital Assets financed through loan agreement $ $ 4,OOQ000 $ $ Contributions of capital assets from Govemmental Activities $ $ $ 2,69$819 $ 151,700 See notes W financial statements. 54 EXHIBIT 7 (continued� Business-type Activities-Entemrise Funds Governmental Other Activities- Enteiprise Intemal Funds Total Service Funds � (a,soo,oi� � i,�so,99i � z,s9z,bbs 1,101,442 8,839,619 37,322 (ii,sai) (zaa,9i9) (ioz,is�) (i,a�� (9s,s9o) 9z,ii6 (i,z�b,bao) (s,ss9,sz9) (z9o,isi) 9,os9 (ss,soi) (i,sos) 148,948 133,181 (135,774) (ss,ss�) (is�,sz9) ib,ios 44,837 141,019 2Q140 11,002 28,446 (5$19� 5286097 (363,664) � (a,sss,ziz) � �,ob�,o90 � z,zzs,999 � i,�ss,iob � s,s�9,sss � $ $ a,000,000 $ $ 468,228 $ 3,318,747 $ 55 CITY OF DUBUQUE, IOWA STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES ExxiBil s AGENCY FUNDS JUNE 30, 2018 Agency Funds ASSETS Cash and pooled cash investments $ 2,261,320 Accountsreceivable 49,207 Prepaids 21,246 Accrued interest 2,108 Notes Receivable 2,000,000 Total Assets $ 4,333,881 LIABILITIES Due to other agency 4,333,881 Total Liabilities $ 4,333,881 See notes to financial statements. ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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 17. Accounting Change/Restatement 5� CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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, 2018, $619,039 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 30,2018 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 30,2018 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, far the Dubuque Racing Association, and far the decomissioning of the prior Flexsteel site. so CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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 30,2018 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, 2018, and 2018 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 reparted as a deferred inflow of resources 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 governxnental fund 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 cost 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 30,2018 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 and OPEB expense and contributions from the employer after the measurement date but before the end of the employer's reporting 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 30,2018 NOTE 1—SUMIVI.ARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) these amounts is reported in governxnental 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, governmental 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 issuance's are reparted as other financing sources while discounts on debt issuance's are reported 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, information 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. Total OPEB Liability For purposes of ineasuring the total OPEB liability, deferred outflows of resources related to OPEB and OPEB expense, information has been deterxnined based on the City's actuary report. Far this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Deferredlnflaws ofResources Deferred inflows of resources represents an acquisition of net position that applies to a future period(s) and will not be recognized as an inflow of resources (revenue)until that time. Although certain revenues are measurable, they are not available. Available means collected within the current year or expected to be collected soon enough thereafter to be used to pay liabilities of the current year. Deferred inflows of resources in the governmental fund financial statements represent the amount of assets that have been recognized, but the related revenue has not been recognized since the assets are not collected within the current year or expected to be collected soon enough thereafter to be used to pay liabilities of the current year. Deferred inflows of resources consist of property tax receivable 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. sa CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 1—SUMIVI.ARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 far the construction of the landfill. 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 $4,184,142 for the governmental activities and $10,155,782 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, 2018 consists of $261,118 for debt service and $24,685 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. Positive unassigned fund balance amount is only appropriate in the general fund. However in governmental funds, other than the general fund, if expenditures incurred for spcific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund. ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 1—SUMIVI.ARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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. 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. Implementation ofGASB StatementNo. 75 As of July 1, 2017,the City adopted GASB Statement No. 75,Accounting and Financial Reporting for Other PostemploymentBenefits Other Than Pensions. The implementation of this standard replaces the requirements of GASB Statement No. 45 Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, and requires governments calculate and repart the costs and obligations associated with postemployment benefits other than pensions (OPEB) in their basic financial statements. Employers are required to recognize OPEB amounts for all benefits provided through the plan which include the total OPEB liability, deferred outflows of resources, deferred inflows of resources, and OPEB expense. The effect of the implementation of this standard on beginning net position is disclosed in Note 17 and the additional disclosures required by this standard is included in Note 10. ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 2—DEFICIT FUND EQUITY The following funds have deficit net position amounts as of June 30, 2018: Internal Service Funds: General Service $ 881,484 The General Service deficit will be addressed during next fiscal year's reallocation of expenses. 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 $55,410,020, and the bank balance was $56,496,655. The City's deposits in banks at June 30, 2018, 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 $11,183,115, and the bankbalance was $11,431,784. The Agency's deposits in banks at June 30, 2018, 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 30,2018 NOTE 3—CASH ON HAND,DEPOSITS,AND INVESTMENTS (continued) Investments. As of June 30, 2018, the City had the following investments and mabxrities. (The City assumes callable bonds will not be called): InvestmentMaturities(In Years) Inveshnent Type Less Than 1 1 to 5 6 to 10 More than 10 Total Money Market Funds- U.S. Treasury $ 504,760 $ - $ - $ - $ 504,760 U.S. Treasury Securities - - - 2,57Q653 2,57Q653 Federal Agency Obligations 1,615,568 2Q605,077 42,587 3,685,624 25,948,856 Managed Accounts L/T CD - 241,091 - - 241,091 Corporate Stock 89,885 - - - 89,885 $ 2,21Q213 $ 2Q846,168 $ 42,587 $ 6,256,277 $ 29,355,245 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 instrumentality's; 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 investxnents 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 30,2018 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, 2018. 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 55,41 Q020 Carrying amount of investments 29,355,245 Total $ 84,782,750 Govemment-wide Cash and pooled cash investments $ 64,275,903 Cash and pooled cash investments-temporuily restdcted 18,176,115 Cash and pooled cash investments-permanenTly reshicted 69,412 Fiduciuy Cash and pooled cash investments 2,261,320 Total $ 84,782,750 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 $ 11,183,115 Total $ 11,184,315 Cash and pooled cash investments $ 3,576,089 Cash and pooled cash investments-temporuily restdcted 7,608,226 Total $ 11,184,315 69 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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, 2017)follows: Deposits $ 2,019,075 Beneficial interest in assets held by others 1,345,313 Total $ 3,364,388 Cash and pooled cash investments $ 2,019,075 Cash and pooled cash investments-temporarily reshicted 1,345,313 Total $ 3,364,388 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 2018)follows: Deposits $ 142,874 Total $ 142,874 Cash and pooled cash investments $ 25,482 Cash and pooled cash investments-temporarily reshicted 117,392 Total $ 142,874 70 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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, 2018 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 $ 262,002 $ 16,733 C1arkWolff 15Q000 3 2001 5/1/2022 36,845 9,001 Dubuque Museum of Art 30Q000 3 1999 7/1/2021 108,498 53,586 GronenAdaptive 30Q000 2 2006 5/1/2036 168,156 7,884 HJD Landlord LLC 466,000 3 2016 4/1/2036 466,000 - Interstate Building LLP 30Q000 3 2010 9/22/2015 254,592 17,462 Lower Main Development, 30Q000 LLC 3 2006 3/1/2026 122,071 13,091 Urban Development Action Grant 40 Maiq LLC-Note A 30Q000 - 2009 7/1/2016 268,750 13,750 Downtown Housing Incentive Loan Caradco Landlord,LLC 4,SOQ000 3 2012 6/1/2030 3,367,700 34,223 40 Main Real Estate Loan 156,583 - 2009 11/1/2015 156,583 - Sales Tax Construction DB&T Community Development Corporation 1,70Q000 - 2012 2/1/2032 1,70Q000 - $ 6,911,197 $ 165,730 71 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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 %$ 282,237 $ 57,000 Local Housing Assistance Program (LHAP) 6 54,633 4,000 Homebuyers Assistance Program 6 1,353,198 147,000 Infill 6 229,010 48,000 RRP Reserve - 184,633 11,000 WashingtonNeighborhoodRevitalize - 58,124 5,000 The Accessibility Rehabilitation Program (for rentals) 6 291,571 25,000 Iowa Finance Authority - 298,887 15,368 HOME Program (1) - 217,288 27,000 Historic Preservation Revolving Loan Fund/Historic Preservation Housing Forgivable Loan Program 6 20,911 13,000 MicroLending - 67,280 5,000 TIF Receivables Roasting Solutions - 289,800 - $ 3,347,572 $ 357,368 (1)Principal payments deferred if one tenant is low income At December 31, 2017,Dubuque Initiatives and Subsidiaries had the following notes receivable: Lower Main Development, 4.00%,unsecured,matures August 2018 $ 9,810 City of Dubuque, 5.00%,unsecured,matures July 2023 181,827 Total notes receivable 191,637 Less: current mabxrities (24,375) Noncurrent partion $ 167,262 �z CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 5—INTERFUND BALANCES AND TRANSFERS Interfund balances at June 30, 2018, 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 $ 180,873 $ - Internal Service - 27,798 Nonmajor Governmental - 153,075 $ 180,873 $ 180,873 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 w w rn r rn h v M v N N � � m h o w rn � � v � � � N � m N � � �� aoo hm v T.' +� � .�' Q � �.'�'. p .-r f� O �O � O y ' � � � F v� .-r T N .-r .-r N .� � Li � -�S�1i �j N U W � � 'C 'O n n p � �, � p N p � � � � ti �. p .�3 �y N O ,�' � � � � � � � � � � � rn yr � N O � � . � � ,-N. `� Q � T.�' Q O"p � rCr r/] � � � '� I.�y � � � � � � � � � ��.i � � � � .yi Vi tC � � ^ '� _ _ � � � � � � '� ' , O � � O � � � `T K p 'vN. 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'r-� �U i. � E-� .�+ '� �C 74 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 6—CAPITAL ASSETS Capital asset activity for the year ended June 30, 2018,was as follows: Primary Government: Governmental activities: Beginning Transfers Transfers Ending Balance In Out Increases Decreases Balance Capital assets,not being depreciated: Land $ 8Q134,817 $ - $ - $ - $ (1,87A,818) $ 78,309,999 Construction in Progress 44,673,966 1Q944,394 (5,663,430) 49,954,930 Total Capital assets,not beingdepreciated 17A,808,783 1Q944,394 (7,488,7A8) 128,264,929 Capital assets,being depreciated: Buildings 14Q998,926 - - 321,201 - 141,32Q127 Improvements other than buildings 23,874,592 - - 171,094 - 7A,045,686 Machineryandequipment 47,225,119 - - 4,695,607 (1,232,666) SQ688,060 Infrastructure 231,93Q452 2,274,316 234,204,768 Total capital assets,being depreciated 444,029,089 7,462,218 (1,232,666) 45Q258,641 Less accumulated depreciation for: Buildings (41,008,391) - - (2,419,842) - (43,428,233) Improvements other thanbuildings (1Q837,87� - - (812,953) - (11,65Q829) MachineryandFquipment (25,319,80� - - (3,187,906) 1,16Q000 (27,347,712) Infrastructure (75,112,333) (3,497,911) (7$610,244) Total accumulated depre�tac�o� (isz,z�s,ao� (9,9is,biz) i,ibo,000 (ibi,os�,ois) Total capital assets,being depreciated,net 291,75Q683 (2,456,394) (72,666) 289,221,623 Governmental activities capital assets,net $ 416,559,466 $ $ $ 8,488,000 $ (7,56Q914) $ 417,486,552 75 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 6—CAPITAL ASSETS (continued) Business-type activities: Beginning Transfers Transfers Ending Balance In Out Increases Decreases Balance Capital assets,not being depreciated: Land $ 24,185,903 $ - $ - $ 213,320 $ - $ 7A,399,223 Construction in progress 6,507,417 14,597,802 (15,285,437) 5,819,782 Total Capital assets,not being depreciated 3Q693,320 14,811,122 (15,285,437) 3Q219,005 Capital assets,being depreciated: Buildings 152,109,778 - - 6,429,567 - 158,539,345 Improvements other than buildings 161,541,263 - - 6,519,303 - 168,06Q566 Machineryandequipment 11Q364,436 2,056,128 (9Q603) 112,329,961 Total capital assets,being depreciated 424,015,477 15,004,998 (9Q603) 438,929,872 Less accumulated depreciation for: a��id��gs (si,z�i,ibs) - - (i,9�9,o�i) - (ss,zso,zs9) Improvements other thanbuildings (3Q621,911) - - (2,977,109) - (33,599,020) Machineryandequipment (37,234,325) (3,883,439) 9Q603 (41,027,161) Total accumulated depre�tac�o� (ii9,iz�,aoa) (s,ss9,bi9) 9qbos (iz�,s�b,azo) Total capital assets,being depreciated,net 304,888,073 6,165,379 311,053,452 Business-type activities capital assets,net $ 335,581,393 $ $ $ 20,976,501 $ (15,285,437) $ 341,272,457 76 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 6—CAPITAL ASSETS (continued) Depreciation expense was charged to functions/programs far the primary government as follows: Governmental activities: Public safety $ 906,221 Public works 6,006,667 Health and social services 5,496 Culture and recreation 2,104,625 Community and economic development 20,674 General government 837,607 Capital assets held by the governxnent's internal service funds are charged to various functions based on their usage of their assets 37,322 Total depreciation expense -governmental activities $ 9,918,612 Business-type activities: Sewage disposal works $ 3,403,512 Water utility 1,404,937 Storxnwater utility 1,727,937 Parking facilities 1,201,791 Refuse collection 334,286 Salt 27,639 Transit system 739,517 Total depreciation expense -business-type activities $ 8,839,619 �� CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 6—CAPITAL ASSETS (continued) Dubuque Metropolitan Area Solid Waste Agency(Component Unit): Beginning Transfers Transfers Ending Balance In Out Increases Decreases Balance Capital assets,not being depreciated: Land $ 2,952,666 $ - $ - $ - $ - $ 2,952,666 Construction in progress 1,18$803 2,440,990 3,62Q793 Total Capital assets,not being depreciated 4,141,469 2,44Q990 6,582,459 Capital assets,being depreciated: Buildings 106,495 - - 101,220 - 207,715 Improvements other than buildings 13,668,654 - - - - 13,668,654 Machineryandequipment 4,14Q006 445,560 (537,454) 4,048,112 Total capital assets,being depreciated 17,915,155 546,780 (537,454) 17,924,481 Less accumulated depreciation for: Buildings (55,943) - - (5,43� - (61,379) Improvements other thanbuildings (6,891,380) - - (7A3,292) - (7,134,672) Machineryandequipment (2,872,535) (207,454) 519,881 (2,56Q108) Total accumulated depre�tac�o� (9,si9,sss) (asb,isz) si9,ssi (9,nb,is9) Total capital assets,being depreciated,net 8,095,297 90,598 (17,573) $16$322 Dubuque MeVopolitan Area Solid Waste,capital assets $ 12,236,766 $ $ $ 2,531,588 $ (17,573) $ 14,750,781 Depreciation expense of$456,182 was charged to[he Dubuque MeVopolitan Area Solid Waste Agency. 78 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 6—CAPITAL ASSETS (continued) Dubuque Initiatives (Component Unit): Beginning Ending Balance Increases Decreases Balance Capital assets,not being depreciated: Land $ 117,723 $ - $ - $ 117,723 Construction in Progress 121,193 121,193 Total Capital assets,not being depreciated 117,723 121,193 238,916 Capital assets,being depreciated: Buildings&Land Improvements 45,549,283 127,171 - 45,676,454 OtherProperty 23,107 8,628 31,735 Total capital assets,being depreciated 45,572,390 135,799 45,708,189 Less accumulated depreciation for: Buildings (7,852,793) (1,278,556) - (9,131,349) Improvements other thanbuildings (3Q258) (298) (3Q556) Total accumulated depreciation (7,883,051) (1,27$854) (Q161,905) Total capital assets,being depreciated,net 37,689,339 (1,143,055) 36,546,284 Dubuque Initiatives, capital assets $ 37,807,062 $ (1,021,862) $ $ 36,785,200 79 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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 $111,020,500. During fiscal year 2018, the City issued $5,955,000 of general obligation bonds, $5,750,000 of which was used for a current refunding bonds. The City refunded $5,695,000 of general obligation bonds. The refunding was undertaken to reduce total debt service payments. The results of the transaction is a reduction of$235,053 in fubxre debt service payments for an economic gain of$197,121. 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, 2018, are as follows: Amount Amount Date of Interest Originally Outstanding Purpose Issue Maturity Dates Rates Issued End of Yeu Corporate Purpose Series 2012A 03/15/2012 06/O1/14-06/O1/31 2.00-3.00 4,380,000 3,335,000 Corporate Purpose and Refimd Series 2012B 03/15/2012 06/O1/13-06/O1/31 2.00-3.13 7,495,000 5,645,000 Corporate Purpose 06/28/2012 06/O1/14-06/O1/32 2.00-3.90 6,965,000 5,465,000 (taxable)Series 2012C Corporate Purpose Series 2012D 06/28/2012 06/O1/14-06/O1/32 2.00-3.46 7,175,000 4,71Q000 Corporate Purpose Series 2012E 12/12/2012 06/O1/14-06/O1/32 2.00-3.00 3,640,000 2,625,000 Corporate Purpose (ta�.ble)Series 2012F 12/10/2012 06/O1/14-06/O1/22 1.00-220 1,035,000 54Q000 Corporate Purpose Series 2012H 12/10/2012 06/O1/15-06/O1/32 2.00-3.00 2,385,000 1,735,000 Corporate Purpose(taxable) and Refund Series 2012I 12/04/2013 06/O1/13-06/O1/21 030-220 7,285,000 1,475,000 Corporate Purpose Series 2014B 12/08/2014 06/O1/16-06/O1/34 3.00-3.65 18,835,000 17,928,427 Corporate Purpose(taxable) Series2014C 12/08/2014 06/O1/16-06/O1/34 3.00-4.16 7,615,000 7,31Q000 Corporate Purpose Series 2016A 04/04/2016 06/O1/17-06/O1/35 2.00-3.75 2,830,000 2,58Q000 Corporate Purpose Refunding Series 2016B 04/04/2016 06/O1/16-06/O1/28 2.00-3.00 10,920,000 7,82Q000 Corporate Purpose Series 2016C 04/04/2016 06/O1/17-06/O1/35 2.00-3.13 4,145,000 3,80Q000 Corporate Purpose Series 2017A 04/17/2017 06/O1/18-06/O1/30 3.00 8,495,000 7,365,000 Corporate Purpose Refimding Series 2017B 04/17/2017 06/O1/18-06/O1/30 3.00 9,745,500 9,12Q000 Corporate Purpose Refimding Series 2017C 04/17/2017 06/O1/18-06/O1/30 3.00-3.45 2,120,000 2,005,000 Corporate Purpose Series 2018A 03/19/2018 06/O1/18-06/O1/31 3.00-4.00 4,950,000 4,95Q000 Corporate Purpose Refimding Series 2018B 03/19/2018 06/O1/18-06/O1/26 3.00-3.15 1,005,000 1,005,000 $ 111,020,500 $ 89,413,427 80 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 7—LONGTERM DEBT (continued) Annual debt service requirements to maturity for general obligation bonds are as follows: Fiscal Year Governxnental Activities Business-type Activities June 30 Principal Interest Principal Interest 2019 $ 4,821,734 $ 1,392,523 $ 2,918,266 $ 1,271,682 2020 4,864,365 1,268,245 2,945,635 1,179,879 2021 4,521,539 1,145,301 2,878,462 1,097,164 2022 3,330,837 1,025,706 2,969,163 1,014,909 2023 3,197,337 940,561 3,037,663 929,536 2024-2028 14,949,377 3,451,221 14,780,623 3,310,599 2029-2033 11,098,567 1,228,945 10,146,433 1,171,787 2034-2035 1,391,122 57,312 1,562,304 61,469 Total $ 48,174,878 $ 10,509,814 $ 41,238,549 $ 10,037,025 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, 2018, 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 $ 2Q045,000 $ S1Q000 $ 23,025,000 $ 2Q045,000 $ S1Q000 Annual debt service requirements to maturity far tax increment financing bonds are as follows: Fiscal Year Governxnental Activities June 30 Principal Interest 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 680,000 1,332,000 2024-2028 4,245,000 5,834,375 2029-2033 6,100,000 3,963,750 2034-2037 6,735,000 1,308,375 Total $ 20,045,000 $ 18,212,500 81 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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, 2018, are as follows: Amount Amount Date of Interest Origirtally Outstanding Purpose Issue Maturity Dates Rates Issued End of Yeu WaterUtilitySeries2008D 11/04/2008 06/O1/10-06/Ol/23 3.00-5.00 % $ 1,195,000 $ 500,000 WaterUtility Series 2010D 09/21/2010 06/O1/12-06/Ol/30 2.00-4.00 5,700,000 4,310,000 SalesTaxIncrementa12014 06/14/2014 06/O1/23-06/Ol/29 4.00-5.00 7,190,000 7,190,000 SalesTaxIncrementa12015A 06/15/2015 06/O1/23-06/Ol/29 325-4.00 20,800,000 20,800,000 $ 34,885,000 $ 32,800,000 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 far 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,plus interest earnings,plus depreciation expense)were $498,228 and $3,973,098, 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, 2018,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 far 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 $42,433,428. az 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 the 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 2019 $ 315,000 $ 945,288 2020 330,000 934,308 2021 340,000 922,698 2022 355,000 910,598 2023 2,490,000 897,275 2024-2028 19,005,000 4,276,161 2029-2031 9,965,000 747,100 Total $ 32,800,000 $ 9,633,428 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, 2018, are as follows: Amount Amount Date of Interest Originally Outstanding Current Purpose Issue Maturity Dates Rates Issued End of Yeu Portion 40MainLLC 08/06/09 06/O1/11-06/Ol/37 6.50 % $ 69Q529 $ 255,881 $ 79,827 Annual debt service requirements to maturity for notes payable are as follows: Fiscal Year Governmental Activities June 30 Principal Interest 2019 $ 79,827 $ 15,582 2020 85,174 10,235 2021 90,880 4,529 Total $ 255,881 $ 30,346 83 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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 $1,346,966 of SRF debt in 2018 as part of the Bee Branch storxnwater construction project and $375,384 for green alley projects reducing stormwater run off, and $489,758 for the CatFish Creek stabilization project. The City has pledged income derived from the acquired or constructed assets to pay debt service. The City issued an additiona13,904,958 in SRF debt to finance the west side water system expansion. Capital loan notes payable at June 30, 2018, are as follows: Final Amount Date Maturity Interest Amount Outstanding Current Authorize Authorized End of Yeu Portion Purpose d Date Rates Drinldng Water 10/18/07 06/O1/28 325 % $ 1,037,000 $ 527,000 $ 45,000 Clean Water O1/14/09 06/O1/28 325 1,847,000 1,063,000 92,000 North Catfish Creek Stormwater O1/13/10 06/O1/30 325 80Q000 54Q000 38,000 North Catfish Creek Sewer O1/13/10 06/O1/30 325 912,000 616,000 43,000 Water Meter Replacement 02/12/10 06/O1/30 325 7,676,000 2,284,000 144,000 Water and Resource Recovery Center 08/18/10 06/O1/39 2.00 74,285,000 62,852,060 2,439,000 Bee Branch Sewer 10/27/10 06/O1/41 325 7,85Q000 6,627,000 198,000 Cogeneration OS/17/13 06/O1/33 2.00 3,048,000 2,395,000 138,000 Meter Replacement Sewer OS/31/13 06/O1/30 325 3,058,000 2,284,000 144,000 Bee Branch Stormwater 02/18/14 06/O1/33 2.00 1,029,000 55,720 46,000 Bee Branch Stormwater 06/19/15 06/O1/37 2.00 31,417,953 29,617,472 1,154,778 Bee Branch Stormwater 07/07/17 06/O1/37 2.00 10,198,000 3,903,958 1,000 $ 143,157,953 $ 112,765,210 $ 4,482,778 Annual debt service requirements to maturity for capital loan notes are as follows: Fiscal Year Business-type Activities June 30 Principal Interest 2019 $ 4,482,778 $ 2,432,167 2020 5,064,498 2,334,761 2021 4,349,070 2,224,951 2022 5,156,292 2,128,974 2023 5,207,646 2,016,521 2024-2028 26,789,958 8,361,019 2029-2033 25,567,000 5,449,132 2034-2038 34,982,968 1,966,940 2039-2041 1,165,000 76,537 Total $ 112,765,210 $ 26,991,002 At June 30, 2018, the City of Dubuque had $7,244,223 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 2019. 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 aa CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 7—LONGTERM DEBT (continued) Loans Payable. Loans payable have been issued to fund several City projects. Loans payable at June 30, 2018, are as follows: Amount Amount Date of Interest Originally Outstanding Current Purpose Issue Maturity Dates Rates Issued End of Yeu Portion PukingLotPurcktase 07/08/08 O1/O1/09-07/O1/23 5.0 % $ 40Q000 $ 181,826 $ 29,495 Iowa Finance Authority 08/26/11 06/Ol/20-06/O1/30 3.0 4,500,000 3,367,700 33,969 Bowling&Beyond Inc. 07/25/12 12/04/12-12/04/32 - 1,000,000 70Q000 50,000 Westem Rural Water 12/27/16 12/O1/17-12/O1/21 3.0 5,000,000 4,OOQ000 1,000,000 $ 10,90Q000 $ 8,249,526 $ 1,113,464 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 2019 $ 83,969 $ 101,031 $ 1,029,495 $ 128,727 2020 84,988 100,012 1,030,988 97,234 2021 251,882 98,962 1,032,557 65,665 2022 257,938 92,906 1,034,205 34,017 2023 264,176 86,668 35,937 2,285 2024-2028 1,421,203 333,016 18,644 467 2029-2032 1,703,544 82,540 - - Total $ 4,067,700 $ 895,135 $ 4,181,826 $ 328,395 as CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 7—LONGTERM DEBT (continued) Changes in Long-term Liabilities. Long-term liability activity far the year ended June 30, 2018, was as follows: Balance Beginning Balance End Due Wittun of Yeu Additions Reductions of Yeu One Yeu Governmerrtal ac[ivities: Generalobligationbonds $ 53,024,994 $ 1,886,552 $ (6,736,668) $ 48,174,878 $ 4,821,734 Unaccretedpremium 831,820 18,688 (141,327) 709,181 - un�o�rizeaa�s�o�� s6,o9s� - s,ssa �so,s6i� - Totalgeneralobligationbonds 53,80Q719 1,905,240 (6,872,461) 48,833,498 4,821,734 Taxincrementfirtancingbonds 20,52Q000 - (475,000) 20,045,000 S1Q000 Unamortized discounts (186,310) - 8,872 (177,438) - Totaltaxincrementfirtancingbonds 20,333,690 - (466,128) 19,867,562 S1Q000 Notes payable 451,763 - (195,882) 255,881 79,827 Loanspayable 4,65Q000 - (582,300) 4,067,700 83,969 Compensated absences 5,49Q843 2,642,243 (2,627,426) 5,505,660 432,776 Netpensionliability 46,80Q991 - (2,303,611) 44,497,380 - Total OPEB liability 4,19Q697 745,912 - 4,936,609 - Total governmental ac[ivities $ 135,718,703 $ 5,293,395 $ (13,047,808) $ 127,964,290 $ 5,928,306 Businesstype ac[ivities: Generalobligationbonds $ 43,705,012 $ 4,068,443 $ (6,534,90� $ 41,238,549 $ 2,918,267 Unaccretedpremium 817,707 59,329 (102,833) 774,203 - Unamortized discounts (35,696) - 2,854 (32,842) - Totalgeneralobligationbonds 44,487,023 4,127,772 (6,634,885) 41,979,910 2,918,267 Revenuebonds 33,105,000 - (305,000) 32,80Q000 315,000 Unaccretedpremium 799,528 - (66,360) 733,168 - Unamortized discounts (63,962) - 4,927 (59,035) - Total revenue bonds 33,84Q566 - (366,433) 33,474,133 315,000 Capitalloannotes 110,513,944 6,117,066 (3,865,800) 112,765,210 4,482,778 Loanspayable 5,209,902 - (1,028,076) 4,181,826 1,029,495 Compensated absences 766,296 358,042 (396,526) 727,812 101,254 Netpensionliability 5,74Q059 133,181 - 5,873,240 - TotaIOPEBIiability 919,105 160,519 - 1,079,624 - TotalbusinessTypeac[ivities $ 201,476,895 $ 10,896,580 $ (12,291,720) $ 200,081,755 $ 8,846,794 Far the governmental activities, compensated absences, net pension liability and Total 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 30,2018 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, 2018 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 $ 3,930,000 LandfillFacility 12/28/2016 06/O1/17-06/O1/36 3.0 5,100,000 4,800,000 $ 9,600,000 $ 8,730,000 Annual debt service requirements to maturity of the general obligation bond is as follows: Fiscal Year June 30 Principal Interest 2019 400,000 262,659 2020 410,000 250,659 2021 425,000 238,359 2022 435,000 225,609 2023 450,000 210,459 2024-2028 2,455,000 860,831 2039-2033 2,860,000 480,055 2034-2036 1,295,000 74,760 Total $ 8,730,000 $ 2,603,391 Changes in Long-Term Liabilities. Long terxn liability activity far the year ended June 30, 2018 is as follows: Balance Beginning Balance Due Within of Year Additions Reductions End of Year One Year General obligation bond $ 9,125,000 $ - $ (395,000) $ 8,73Q000 $ 40Q000 Unaccretedpremium 243,243 - (12,857) 23Q386 - Total general obligation bond $ 9,368,243 $ - $ (407,85� $ 8,96Q386 $ 40Q000 87 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 7—LONGTERM DEBT (continued) Dubuque Area Convention and Visitors Bureau. At June 30, 2018, CVB had the following notes and loan payable: Noninterest-bearing note payable due to the Greater Dubuque Development Corporation in yearly installments of$30,560, starting July 10, 2014 through July 10, 2018, discounted at imputed interest rate of 4.125%, secured by real estate $ 30,526 Noninterest-bearing note payable due to the Greater Dubuque Development Corporation in yearly installments of$9,760, starting October 10, 2014 through October 10, 2018, discounted at imputed interest rate of 4.125%, secured by real estate 9,648 Bank loan, due in monthly installments of$370, including interest at 4.74%, maturing April 15, 2021, secured by vehicle 11,736 Capitalized lease obligations 3,694 55,604 Less: Currentmaturities (47,8341 Non-current liability $ 7.770 The following is a schedule by years of the principal maturities of long-term debt obligations for the years ending June 30: Year Amount 2019 $ 47,834 2020 4,159 2021 3,611 $ 55,604 Amortization on the discount on the non-interest bearing notes payable of$1,887 and $3,274 far the years ended June 30, 2018 and 2017 is reparted as interest expense on the statements of activities. During the year ended June 30, 2014, the bureau obtained a loan in the amount of$152,800 from the Greater Dubuque Development Corporation. The loan bears 0% interest and is payable in five equal annual payments of$30,560 beginning July 10, 2014. To reflect the time value of money, the liability far the note payable reflects future payments discounted at an imputed interest rate of 4.125%, which was the Bureau's long-term borrowing rate in February 2014. During the year ended June 30, 2014, the Bureau obtained a loan in the amount of$48,800 from the Dubuque Chamber of Commerce. The loan bears 0% interest and is payable in five equal annual payments of$9,760 beginning October 10, 2014. To reflect the time value of money, the liability far the note payable reflects fubxre payments discounted at an imputed interest rate of 4.125%. 88 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 7—LONGTERM DEBT (continued) Dubuque Initiatives. At December 31, 2017,Dubuque Initiatives long-terxn debt consists of a note payable to a bank totaling$5,209,735 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. The scheduled maturities of long-term debt are as follows: Year Amount 2018 $ 489,518 2019 508,955 2020 529,162 2021 550,173 2022 3,131,927 $ 5,209,735 as CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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 $13,963,891 for 2018. 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 $750,000, and an aggregate-stop loss consistent with statutory limits for 2018. 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 participate in both programs and make 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 $499,834 in the Health Insurance Reserve Fund and $996,687 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, 2018 and 2017, are summarized as follows: Health Workers' Insurance Compensation Reserve Fund Reserve Fund 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 Claims and changes in estimates during fiscal year 2018 9,54Q883 721,516 Claim payments (9,745,993) (843,06� Liabilities at June 3Q 2018 $ 499,834 $ 996,687 90 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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 775 members include various governmental entities throughout the State of Iowa. The Pool was forxned 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 ar 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 property 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 properly 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 for the year ended June 30, 2018, were $457,222. 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 $500,000 per claim. Excess coverage is provided for claims exceeding $500,000 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, property loss 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 exhausts 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, 2018, settled claims have not exceeded the risk pool or reinsurance company coverage since the Pool's inception. 91 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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 forxnula set forth in the Pool's intergovernmental contract with it's members is applied to deterxnine 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 terxns 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, 2018. 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 partion of construction contracts representing construction completed through June 30, 2018. The City has additional commihnents for signed construction contracts of$9,385,587 as of June 30, 2018. These commitxnents will be funded by federal and state grants, cash reserves, and bond proceeds. Dubuque Metropolitan Area Solid Waste Agency has recognized a liability for only that portion of construction contracts representing construction completed through June 30, 2018. DMASWA has an additional commitment for a signed construction contract of $28,607 as of June 30, 2018. This commitment will be funded by bond proceeds. sz CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 10—OTHER POST EMPLOYMENT BENEFITS (OPEB) 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 repart No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement 75. 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 for 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 (MFPRSI). 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 522 active and 89 retired members in the plan, as of most recent actuarial 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. Total OPEB Liability- The City's OPEB liability of$6,016,233 was measured as of June 30, 2018, and was deterxnined by an acbxarial valuation as of July 1, 2017. The City's propartion is basesd on the number of employees in the plan. The City's porportion was 98.1%as of June 30, 2018 Chanees in the Total OPEB Liabilitv Total OPEB Liabiilty Total OPEB Liability beginning of year, as restated $ 5,844,069 Changes for the year: Service cost 277,811 Interest 172,202 Otherchanges 58,583 Changes in assumptions 138,376 Benefit payments (474,808) Net Changes 172,164 Total OPEB Liability end of year $ 6,016,233 93 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 10—OTHER POST EMPLOYMENT BENEFITS (OPEB) (continued) 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, 2017 actuarial valuation date, the Entry Age Normal method was used. The actuarial assumptions include a 2.98% discount rate based on the S&P Municipal Bond 20-year High-Grade Rate Index as of June 29, 2018. The Healthcare cost trend rate of 7.00% initially until fiscal year 2020, decreasing by .25%annually to an ultimate rate of 5.00%in 2028. Salary increase is 4% annually. The underlying inflation rate is 3%. Mortality rates are from the RP2014 Group Annuity Mortality Table for males and females. 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 Table T-2 from the Pension Actuary's Handbook. Projected claim costs of the medical plan are $11,955-$17,015 per year for retirees depending on the age of retiree. The actuarial assumptions used in the June 30, 2018 valuation were based on the results of actual experience dates study with dates corresponding to those listed above. Sensitivity of the City's Total OPEB Liability to Chanees in the Discount Rate -The following presents the total OPEB Liability of the City, as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is 1%lower(1.98%) or 1%higher(3.98%)than the current discount rate. 1%Decrease (1.98%) DiscountRate(2.98%) 1%Increase (3.98%) Total OPEB Liability $ 6,460,150 $ 6,016,233 $ 5,603,719 Sensitivitv of the Citv's Total OPEB Liabilitv to Chanees in the Healthcare Cost Trend Rates - The following presents the total OPEB Liability of the City, as well as what the City's total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1%lower(6.00%) or 1%higher (8.00%)than the current healthcare cost trend rates. 1%Decrease(6.00%) Healthcare CostTrend 1%Increase (8.00%) Rate(7.00%) Total OPEB Liability $ 5,432,929 $ 6,016,233 $ 6,706,838 sa CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 10—OTHER POST EMPLOYMENT BENEFITS (OPEB) (continued) OPEB Expense and Deferred Outflows of Resources Related to OPEB -Far the year ended June 30, 2018 the City recognized OPEB expense of$469,905. At June 30, 2018 the City reparted deferred outflows of resources related to OPEB from the following sources: Deferred Outflows of Resources Changes in Assumptions $ 177,086 The amount reported as deferred outflows of resources related to OPEB will be recognized as OPEB expense as follows: Year Ending June 30 Amount 2019 $ 19,874 2020 19,874 2021 19,874 2022 19,874 2023 19,874 Thereafter 77,716 $ 177,086 Dubuaue Metr000litan Area Solid Waste Aaencv Soecific(DMASWAI OPEB Disclosures Total OPEB Liability-DMASWA OPEB liability of$116,294 was measured as of June 30, 2018, and was determined by an actuarial valuation as of 1 17. 19 3 1 Total OPEB Liability Total OPEB Liability beginning of year, as $ 112,959 restated Changes for the year: Service Cost 5,380 Interest 3,335 Other Changes 1,137 Changes in assumptions 2,679 Benefit payments (9,196) Net Changes 3,335 Total OPEB Liability end of year $ 116,294 ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 10—OTHER POST EMPLOYMENT BENEFITS (OPEB) (continued) Sensitivity of the City's Total OPEB Liability to Chanees in the Discount Rate-The following presents the total OPEB Liability of the DMAS WA, as well as what the DMAS WA's total OPEB liability would be if it were calculated using a discount rate that is 1%lower(1.98%) or 1%higher(3.98%)than the current discount rate. 1%Decrease(1.98%) DiscountRate (2.98) 1%Increase(3.98%) Total OPEB Liability $ 124,856 $ 116,294 $ 108,303 Sensitivitv of the DMASWA's Total OPEB Liabilitv to Changes in the Healthcare Cost Trend Rates- The following presents the total OPEB Liability of the DMASWA, as well as what the DMASWA's total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1%lower(6.00%) or 1%higher(8.00%)than the current healthcare cost trend rates. 1%Decrease(6.00%) Healthcare Cost Trend 1%Increase(8.00% Rate(7.0%) Total OPEB Liability $ 105,002 $ 116,294 $ 129,623 OPEB Exvense and Deferred Outflows of Resources Related to OPEB -Far the year ended June 30, 2018 the DMASWA recognized OPEB expense of$9,082. At June 30, 2018 the DMASWA reparted deferred outflows of resources related to OPEB from the following sources: Deferred Outflows of Resources Changes in Assumptions $ 3,429 The amount reported as deferred outflows of resources related to OPEB will be recognized as OPEB expense as follows: Year Ending June 30 Amount 2019 $ 384 2020 384 2021 384 2022 384 2023 384 Thereafter 1,509 $ 3,429 ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 11—EMPLOYEE PENSION PLANS Iowa Public Employees Retirement System IPERS Plan Description—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.ivers.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. s� CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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 2018, 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, 2018 were $2,234,886. The Dubuque Metropolitan Area Solid Waste Agency's total contributions to IPERS far the year ended June 30, 2018 were $56,884. Citv Soecific IPERS Disclosures Net Pension Liabilities. Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2018, the City reported a liability of $22,308,561 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2017, 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, 2017, the City's collective proportion was .33490%which was a increase of 0.00784%from its proportion measured as of June 30, 2016. sa CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 11—EMPLOYEE PENSION PLANS (continued) Far the year ended June 30, 2018,the City recognized pension expense of$2,829,959. At June 30, 2018, the City reparted deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $ 204,814 $ 193,286 Changes of assumptions 3,876,209 - Net difference between projected and actual - 233,004 earnings on IPERS' investxnents Changes in propartion and differences between City's contributions and City's propartionate share of contributions 25,325 796,834 City contributions subsequent to the measurement date 2,234,886 - Total $ 6,341,234 $ 1,223,124 $2,234,886 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, 2019. 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 2019 $ 302,081 2020 1,465,228 2021 859,093 2022 18,755 2023 238,066 $ 2,883,223 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 7.00%, 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(6.00%) or 1.00%higher(8.00%) than the current rate. ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 11—EMPLOYEE PENSION PLANS (continued) 1% Discount 1% Decrease Rate Increase (6.0)% (7.0)% (8.0)% City's proportionate share of thenetpensionliability: $ 36,755,560 $ 22,308,561 $ 10,170,308 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, 2018, the DMASWA reported a liability of$567,817 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2017, 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 0.008524%which was a decrease of 0.001148%from its proportion measured as of June 30, 2016. Far the year ended June 30, 2018, the DMASWA recognized pension expense of$72,031. At June 30, 2018, the DMAS WA 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 Differences between expected and actualexperience $ 5,213 $ 4,920 Changes of assumptions 98,660 - Net difference between projected and actual - 5,930 earnings on IPERS' investxnents Net changes in proportion and differences between City's contributions and City's propartionate share of contributions 645 20,282 City contributions subsequent to the measurement date 56,884 - Total $ 161,402 $ 31,132 100 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 11—EMPLOYEE PENSION PLANS (continued) $56,884 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, 2019. 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 2019 $ 7,682 2020 37,262 2021 21,847 2022 477 2023 6,118 $ 73,386 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 7.00%, 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% lower (6.00%) or 1% higher (8.00%)than the current rate. 1% Discount 1% Decrease Rate Increase (6.00)% (7.00)% (8.00)% Agency's proportionate share of the netpension liability: $ 935,533 $ 567,817 $ 258,863 There were no non-employer contributing entities at IPERS. Acbxarial Assumptions - The total pension liability in the June 30, 2017, acbxarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Rate of inflation 2.60%per annum (effective June 30, 201'� Rates of salary increase 3.25 to 16.25%average, including inflation. (effective June 30, 201'� Rates vary by membership group. Long-term Investment rate of return 7.00%, compounded annually,net of investment (effective June 30, 201'� expense, including inflation. Wage Growth 3.25%per annum based on 2.60%inflation (effective June 30, 201'� and 0.65%real wage inflation 101 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 11—EMPLOYEE PENSION PLANS (continued) The actuarial assumptions used in the June 30, 2017 valuation were based on the results of actuarial experience study dated March 24, 2017. 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: Long-Terxn Expected Asset Class Asset Real Rate of Return Allocation Core Plus Fixed Income 27 % 2.25% Domestic Equity 24 6.25 International Equity 16 6.71 Private Equity/debt 11 11.15 Private Real Assets 7.5 4.18 Public Real Assets 7 3.27 Public Credit 3.5 3.46 Private Credit 3 4.25 Cash 1 (0.31) Total 100 % Discount Rate - The discount rate used to measure the total pension liability was 7.00%. 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, 2018, the City reported payables to the defined benefit pension plan of $7,124 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. 102 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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.mfvrsi.or¢. 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. Disability 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. 103 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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, ar 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, 2018. Employer contribution rates are based upon an actuarially determined norxnal 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 normal contribution rate is provided by state statute to be the actuarial liabilities of the plan less current plan assets, with such total divided by 1% 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 25.68%far the year ended June 30, 2018. The City's contributions to MFPRSI far the year ended June 30, 2018 was $3,625,630. 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 6'�. There were no state appropriations to MFPRSI during the fiscal year ended June 30, 2018. Net Pension Liabilities. Pension Exvense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2018, the City reported a liability of $28,062,057 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2017, and the total pension liability used to calculate the new pension liability was deterxnined by an 104 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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, 2017, the City's proportion was 4.784868%which was a decrease of 0.168417% from it proportions measured as of June 30, 2016. Far the year ended June 30, 2018, the City recognized pension expense of$3,981,322. At June 30, 2018, 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 $ 1,076,886 $ 17,074 actual experience Changes of assumptions 2,384,670 318,729 Net difference between projected and actual earnings on pension plan investments 1,149,810 - Changes in propartion and differences between - 1,017,729 City contributions and proportionate share of contributions City contributions subsequent to the 3,625,630 - measurement date Total $ 8,236,996 $ 1,353,532 $3,625,630 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, 2019. 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 2019 $ 476,692 2020 1,964,694 2021 1,023,922 2022 (349,094) 2023 141,620 $ 3,257,834 105 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 11—EMPLOYEE PENSION PLANS (continued) Actuarial Assumvtions - The total pension liability in the June 30, 2017 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%, including inflation. Inveshnent rate of return 7.50%, net of pension plan inveshnent expense, including inflation The actuarial assumptions used in the June 30, 2017 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 Healthy Mortality Table with males set-back two years, females set-forward one year and disabled individuals set-forward one year(male only rates), with five years projection of fubxre mortality improvement with Scale BB. 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 rebxrns, net of investxnent 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 fubxre 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 5.5% Small cap 5.8 International large cap 7.3 Emerging markets 9.0 Emerging markets debt 6.3 Private non-core real estate 8.0 Master limited partnerships 9.0 Private equity 9.0 Core plus fixed income 3.3 Private core real estate 6.0 Tactical asset allocation 6.4 106 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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 determine the discount rate assumed employee contributions will be made at the contracbxally required rates, actuarially determined. Based on those assumptions, MFPRSI fiduciary net position was projected to be available to make all projected fubxre benefit payments to current active and inactive employees. Therefore, the long-term expected rate of return on MFPRSI investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivi of Ci , '� s Proportionate Share of the Net Pension Liability 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. 1% Discount 1% Decrease Rate Increase (6.50)% (7.50)% (8.50)% City's propartionate share of the net pension liability: $ 46,118,302 $ 28,062,057 $ 13,043,874 MFPRSI Fiduciary Net Position-Detailed information about the pension plan's fiduciary net position is available in the separately issued MFPRSI financial report which is available on MFPRSPs website at www.mfprsi.ore. Pavables to MFPRSI -At June 30, 2018, City of Dubuque, Iowa reparted payables to the defined benefit pension plan of $5,386 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. 107 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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: 2018 Closure $ 2,964,717 Post-closure care 2,265,000 Totals $ 5,229,717 The total closure and post-closure care costs far the DMASWA has been estimated at approximately $5,229,717 as of June 30, 2018, and the portion of the liability, that has been recognized is $3,102,165. 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 95%of ce119 Phase I and 41%of ce119 Phase II and 1%of cell 9 Phase IIL 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 $4,612,216 as of June 30, 2018. The Agency will recognize the remaining estimated cost of closure and post closure care of$2,127,552 over the estimated remaining life of 18 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, 2018 is $6,156,932, with $142,423 of depreciation expense during the year ended June 30, 2018. The DRA lease amount is based on the association's gross gambling receipts. During the year ended June 30, 2018,the DRA lease generated $4,885,361 in lease revenue. 108 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 NOTE 14—SUBSEQUENT EVENTS On November 5, 2018 a public hearing was held on a $4.9 million Sewer Utility Revenue Capital Loan SRF Note. 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. The loan also has the Eagle Point Park sponsorship project associated with it. On a clean water SRF loan with a sponsorship project, the financing costs are reduced by the amount of the cost of the sponsorship project improvements. Complete action has not yet been taken on the loan. NOTE 15—PROSPECTIVE ACCOUNTING PRONOUNCEMENTS The Governxnental Accounting Standards Board (GASB) has issued six statements not yet implemented by the City. The statements which might impact the City are as follows: 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 andpattern 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. 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. Statement No. 88, Certain Disclosures Related to Debt, Including Direct Borrowing and Direct Placements, will be effective far the fiscal year June 30, 2019. The primary objective of this Statement is to improve the inforxnation that is disclosed in notes to governxnent financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governxnents should include when disclosing inforxnation related to debt Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, will be effective far the fiscal year June 30, 2021. The objectives of this Statement are to enhance the relevance and comparability of information about capital assets and cost of borrowing for a reporting period and to simplify accounting for interest cost incurred before the end of a construction period. Statement No. 90, Majority Equity Interest-an amendment of GASB Statement No. 14 and No. 61, will be effective far the fiscal year June 30, 2020. The primary objective of this Statement are to improve the consistency and comparability of reporting a governxnent's majority equity interest in a legally separate organization and to improve the relevance of financial statement inforxnation for certain component units. The City's management has not yet determined the effect these statements will have on the City's financial statements. 109 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2018 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, 2018, the City abated $3,725,984 of property tax under the urban renewal and economic development projects. NOTE 17—ACCOUNTING CHANGE/RESTATEMENT Governmental Accounting Standards Board Statement No. 75, Accountin¢ and Financial Repartin¢ for Postemplovment Benefits Other Than Pensions (OPEB), was implemented during fiscal year 2018. The revised requirements establish new financial reporting requirements for state and local governments which provide their employees with OPEB benefits, including additional note disclosure and required supplementary information. In addition, GASB Statement No. 75 requires a state or local governxnent employer to use the entry age norxnal actuarial cost method, and requires deferred outflows of resources and deferred inflows of resources which arise from other types of events related to OPEB to be recognized. During the transition year, as perxnitted, beginning balances for deferred outflows of resources and deferred inflows of resources are not reported. Beginning net position for governmental and business-type activities was restated to retroactively repart the change in valuation of the beginning total OPEB liability, as follows: 6ovaxvnmfel B�sinusTypeAdivities CompovmtUvit Activitiu Sewer Weter SWmrv✓eter Parlrng Refuse Trevsit B�sinessType DMASWA Adivitiu NeLPositiovS�ve3Q 201"],esprevio�sly $ 355,612,003 ffi,506,068 Z1,261,925 SS,15Q0.h9 4"],"]55,020 T$515 13,9PA,195 1"]2,121,902 11,125,236 reported RufetedS�ve3Q201"]OPEBBelence (4,"]92,891) (261,542) (293,923) (63,130) (96,654) (23$514) (94,35� (1,051,1"]8) (112,960) RanovelofoldOPEBObligetiov 4,19Q69] 231,30.h 256,954 55,198 &l,510 20$599 82,500 91Q105 9$"]6] NeLPositiovS�ly1,201"],esreSeted $ 355,OOQ809 ffi,4"]2,830 Z1,2PA,996 SS,151,ll"] 4"],"]42,&]6 68$540 13,912,340 1"]1,98Q829 11,111,0.h3 110 Required Supplementary Information June 30, 2018 City of Dubuque, Iowa 111 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 30,2018 Budgeted Amounts Final to Actual Actual Original Final Variance RECEIPTS Propertytax $ 23,376,820 $ 25,062,297 $ 25,062,297 $ (1,685,477) Taxincrementfinancing 12,026,651 11,903,432 11,902,432 124,219 OtherCitytax 13,218,248 18,061,248 17,864,134 (4,645,88� Licenses and permits 6,624,629 1,529,906 1,506,032 5,118,597 Use of money and property 14,327,892 12,553,589 13,97Q309 357,583 Intergovemmental 4Q02Q813 41,763,315 78,436,174 (38,415,361) Charges for fees and service 38,695,869 42,877,311 42,881,139 (4,185,270) Special assessments 169,950 3Q000 3Q000 139,950 Miscellaneous 8,883,684 7,681,272 8,375,623 508,061 TotalReceipts 157,344,556 161,462,370 20Q028,140 (42,683,584) EXPENDITURES Public safety 28,573,783 29,244,056 29,787,146 1,213,363 Publicworks 11,65Q313 12,682,233 13,981,493 2,331,180 Health and social services 854,144 915,654 943,516 89,372 Culture and recreation 11,836,364 12,054,279 12,846,334 1,009,970 Community and economic development 14,753,939 14,755,628 14,676,824 (77,115) Generalgovernment 9,124,758 9,029,607 9,587,835 463,077 Debtservice 12,775,123 10,873,974 16,587,436 3,812,313 Capitalprojects 28,749,793 29,769,433 71,146,986 42,397,193 Business-type activities 51,139,963 50,388,083 84,424,646 33,284,683 TotalExpenditures 169,458,180 169,712,947 253,982,216 84,524,036 EXCESS(DEFICIENCY)OF RECEIPTS OVER(UNDER)EXPENDITURES (12,113,624) (8,25Q577) (53,954,07� 41,84Q452 OTHERFINANCINGSOURCES,NET 14,915,128 13,966,052 55,737,540 (4Q822,412) EXCESS DEFICIENCY OF RECEIPTS AND OTHER FINANCING SOURCES OVER (UNDER)EXPENDITURES AND OTHER FINANCING USES 2,801,504 5,715,475 1,783,464 1,018,040 BALANCE,BEGINNING OF YEAR 72,54Q864 24,386,716 38,312,793 - BALANCE,ENDING OF YEAR $ 75,342,368 $ 3Q102,191 $ 4Q096,257 $ 1,018,040 See Notes to Requued Supplementary Information. 112 CITY OF DUBUQUE, IOWA NOTE TO REQUIRED SUPPLEMENTARY INFORMATION—BUDGETARY REPORTING FOR THE YEAR ENDED JUNE 30,2018 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, 2018, was amended two times during the year to allow the City to increase function expenditures by $84,269,269 primarily far the carry-forward of unfinished capital improvement projects. During the year ended June 30, 2018, expenses for community and economic development exceeded the budgeted amount The following is a reconciliation of the budgetary basis to the modified accrual basis of accounting: Governmental Enterprise Modified Funds Funds Budgetary Accrual Accrual/Accmal Modified Accrual Basis Adjus[men[s Basis Accrual Basis Basis Total ReceiptsBevenue $ 157,344,556 $ (14,053,619) $ 143,29Q937 $ 107,48Q994 $ 35,809,943 $ 143,29Q937 Expenditures/Expenses 169,458,180 (22,939,781) 146,518,399 109,671,988 36,846,411 146,518,399 Deficiency of Receip[sBevenue UnderExpenditures�Expenses (12,113,67A) 8,886,162 (3,227,462) (2,19Q994) (1,036,468) (3,227,462) OtherFinancing Sources 14,915,128 (1,846,009) 13,069,119 2,066,549 11,002,570 13,069,119 Net 2,801,504 7,04Q153 9,841,657 (17A,445) 9,966,102 9,841,657 Balance,Beginning(as restated) 72,54Q864 154,849,913 227,39Q777 55,40Q948 171,989,829 227,39Q777 Balance,Ending $ 75,342,368 $ 161,89Q066 $ 237,232,434 $ 55,276,503 $ 181,955,931 $ 237,232,434 113 CITY OF DUBUQUE, IOWA SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF NET PENSION LIABILITY IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEM LAST FOUR FISCAL YEARS* (IN THOUSANDS) Required Supplementary Information 2018 2017 2016 2015 City's proportion of the net pension liability(asset) 0.33490% 0.34275% 0.35135% 0.37035% City's proportionate share of the net pension liability $ 22,309 $ 21,570 $ 17,358 $ 14,688 City's covered payroll $ 24,961 $ 24,597 $ 24,039 $ 24,210 City's proportionate share of the net pension liability as a percentage of its covered payroll 89.38% 87.69% 72.21% 60.67% Plan fiduciary net position as a percentage of the total 82.21% 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. 114 0 N N O M O O p � Vd Vd � Q Q N D O N D � Vd Vd � � � b � O N D � Vd Vd N � � N � � Vd Vd N � � N � � Vd Vd Q Q ' O o Q V � N O O N �.j N � � Vd Vd O o ti .-�i .-�i O O� O N �.j N � � Vd Vd � � � O� O� O� f�l � O N �.j N W F � Vd Vd � � ti N N � O zz o � � � � ° � `� � � � � a � � � � ; ¢' xF � o � � � � � za R " � � � OoW � � w w � � � � � � m H V � � O a� .p O aIp-�,, L �p .�' � � a� I� '�' � ^�Wr C � +4 '�' v `«�� H W � �/�] � � � � � o � wv � � � � � b � o a O .. 0 - � � � � � � �y [�7 "� � �i � ��, C �a � a � o O `� " ro b 5� � � r�1- O � 'L " o T o a� � p, Q a 'y 0 t�. � � 'C � p � 'o � [il � �cy F •,� o p o p � p � �` o � K � K K U ri ° a � a � � � � � � " 115 CITY OF DUBUQUE, IOWA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION--PENSION LIABILITY IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEMS YEAR ENDED JUNE 30,2018 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 2017 valuation implemented the following refinements as a result of an experience study dated March 24, 2017: • Decreased the inflation assumption from 3.00%to 2.60%. • Decreased the assumed rate of interest on member accounts from 3.75% to 3.50% per year. • Decreased the discount rate from 7.50%to 7.00%. • Decreased the wage growth assumption from 4.00%to 3.25%. • Decreased the payroll growth assumption from 4.00%to 3.25%. The 2014 valuation implemented the following refinements as a result of a quadrennial experience study: • Decreased the inflation assumption from 3.25%to 3.00%. • Decreased the assumed rate of interest on member accounts from 4.00%to 3.75%per year. • Adjusted male mortality rates for retirees in the Regular membership group. • Reduced retirement rates for sheriffs and deputies between the ages of 55 and 64. • Moved from an open 30-year amartization period to a closed 30-year amartization period far the UAL(unfunded acbxarial liability)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. • Lowered employment termination rates. • Generally increased the probability of terminating members receiving a deferred retirement benefit. • Modified salary increase assumptions based on various service duration. 116 CITY OF DUBUQUE, IOWA SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF NET PENSION LIABILITY MUNICIPAL FIRE AND POLICE RETIREMENT SYSTEM OF IOWA LAST FOUR FISCAL YEARS* (IN THOUSANDS) Required Supplementary Information 2018 2017 2016 2015 City's proportion of the net pension liability(asset) 4.7840% 4.9533% 4.9854% 5.0788% City's proportionate share of the net pension liability $ 28,062 $ 30,971 $ 23,423 $ 18,410 City's covered payroll $ 13,552 $ 13,423 $ 13,052 $ 12,968 City's proportionate share of the net pension liability as a percentage of its covered payroll 207.07% 230.73% 179.46% 141.96% Plan fiduciary net position as a percentage of the 80.60% 78.20% 83.04% 86.27% total 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. 117 � O O O r � N N ^ W O N -' Vj Vj Vj O O O Vl O O " " r N " Vj Vj Vj ^ Q Q O O p N N N O N Vj Vj Vj N ^ � W l� p f�l f�l N Q N N Hj Hj Hj O O ' N o � f�l f�l b � p fn fn N D N N Vj Vj Vj Q O � � � p fn fn N O N � Vj Vj Vj O p ' N o m m � �1 O O O Q � p fn fn M O � N � O Vj Vj Vj I�I w , � � � o � N � � � � � Q � � o � � � � W � � F � � � � � � � N o H � � � � � z o �, �; � � zW " " o � � � � .. w H pa m m � o � W � � � � � � � d' x x .o o "' "' Q " ,� N N � zW e � � � O O � i I--I U O = ^✓r �" � F a 0 C C y '�+ i--i � � O � O O U p � 'p � � � W � W y p O p � ro M C F�4 F a a V�] � � 'p � C -" a� � /� a� O r� w w � ' b � b � � � A � a � � ' � c � � a � � w .. �„ v� � � b b o O ,� aw � .� G G � G5. 0 0 � o � � '-' cO L � � .� � > a r� '" �o p o p ° p ro � � i-�i z�y � � � � o � o � o 0 � � -I. � ri � v� O '�' O CJ O " 118 CITY OF DUBUQUE, IOWA NOTES TO REQUIRED SUPPLEMNATRY INFORMATION--PENSION LIABILITY MUNICIPAL FIRE AND POLICE RETIREMENT SYSTEM OF IOWA YEAR ENDED JUNE 30,2018 ChanQes of benefit terms: There were no significant changes of benefit terms. ChanQes of assumptions The 2017 valuation added five years projection of future mortality improvement with Scale BB. The 2016 vlauation changed postretirement martality rates to the RP-2000 Blue Collar Combined Healthy Mortality Table with males set-back two years, females set-forward one year and disabled individuals set-forward one year(male only rates),with no projection of fubxre mortality improvement. The 2015 valuation phased in the 1994 Group Annuity Martality Table for postretirement martality. This resulted in a weighting of 1/12 of the 1971 Group Annuity Mortality Table and 11/12 of the 1994 Group Annuity Mortality Table. The 2014 valuation phased in the 1994 Group Annuity Martality Table for postretirement martality. This resulted in a weighting of 2/12 of the 1971 Group Annuity Mortality Table and 10/12 of the 1994 Group Annuity Mortality Table. 119 CITY OF DUBUQUE, IOWA SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY, RELATED RATIOS AND NOTES YEAR ENDED JUNE 30,2018 2018 Service Cost $ 283,192 Interest Cost 175,537 Changes in assumptions 141,037 Other Changes 59,736 Benefit payments (484,004) Net change in total OPEB Liability 175,498 Total OPEB liability beginning of year 5,957,029 Total OPEB liability end ofyear $ 6,132,527 Covered-employee payroll 39,782,199 Total OPEB liability as a percentage of covered-employee payroll 15.42% Notes to Schedule of Chanaes in the Total OPEB Liabilitv and Related Ratios No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement 75. Changes in benefit terms: There were no significant changes in benefit terxns. Change in assumptions: Changes in assumptions and other inputs reflect the effects of changes in the discount rate,health care trend rates and other changes. Note: GASB Statement No. 75 requires ten years of inforxnation to be presented in this table. However, until a 10-year trend is completed, the City will present information far those years for which information is available. 120 THIS PAGE IS INTENTIONALLY LEFT BLANI� 121 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. Veteran's Memorial - This fund is used to account for contributions given to the Veteran's Memorial for specific purposes and for maintainance. 122 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. 123 CITY OF DUBUQUE,IOWA COMBINING BALANCE SHEET NONMAJORGOVERNMENTALFUNDS JUNE 3Q 2018 Special Revenue Funds Road Use SectionVIII Employee Special Tas Housing Benefite Aeeeeements ASSETS Caeh and pooled cash inveetrneNs $ 5,37Q 162 $ 37Q683 $ - $ 144 Receivables Proper[ytax Delinquent - - 32,624 - Succeedingyeu - - 4,049,064 - Accounts and other 6,483 56,455 - - Special aseeeements - - - 712,211 Accruedintereet - 1,403 - - Notee - - - - Wergovemmental 549,672 - - - Inventories 293,852 - - - Prepaiditeme 17,031 - - - Reetricted cash and pooled caeh inveetrnents - 258,338 - - Total Aeeets $ 6,237,200 $ 686,879 $ 4,081,688 $ 712,355 LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accounte payable $ 295,417 $ 133,900 $ - $ - Accruedpayioll 64,853 21,627 - - Wergovemmentalpayable - 2,499 - - Due to other fimde - - - - Uneamed revenue 5,248 TotalLiabilitiee 36Q270 163,274 - - DEFERREDINFLOWSOFRESOURCES Urtavailable revenues Succeedingyeupropertytas - - 4,049,064 - Special aseeeements - - - 684,205 Gran[s - - - - Other 7,939 TotalDeferredlnfloweofReeourcee - - 4,057,003 684,205 FUND BALANCES Nonspendable: Endowment corpus - - - - Inventory 293,852 - - - Prepaiditeme 17,031 - - - Reetricted: Endowmen[s - - - - Library - - - - Police - - - - Veteiane - - - - CapitalimprovemeNs 5,566,047 - - - Franchise agreement - - - - Specialaseeeements - - - 28,150 Iowa Firtance Authority Truet - - - - Community progiame - 523,605 - - Employee benefits - - 24,685 - Committed,capitalimprovements - - - - Unassigned TotalFundBalancee 5,876,930 523,605 24,685 28,150 Total Liabilitiee,Deferred Inflowe of Reeourcee and Fund Balancee $ 6,237,200 $ 686,879 $ 4,081,688 $ 712,355 124 EXHIBIT A-1 Special Revenue Funde Capital Projects Funds LiMary Police IFA Expendable Expendable Veteran'e Housing Commuruty Auport General Cable TV Gifte Truet Gifte Trust Memorial Trust Development Conetnution Conetruction $ 465,358 $ 1,152,261 $ 8,589 $ 137,841 $ 234,834 $ 1,322,005 $ 27Q583 $ 731,797 140,592 - - - - - - - 1,035 2,569 19 307 - 1Q802 2,692 445 - - - - 253,541 4,387,675 - 45,345 - - - - - 1,844,450 402,160 12,805 19,407 - - - - 15,373 - - - - - - - 290,735 936,566 2,21Q447 $ 626,392 $ 1,154,830 $ 8,608 $ 138,148 $ 488,375 $ 7,871,040 $ 1,612,001 $ 3,OOQ839 $ 6,826 $ - $ - $ - $ - $ 762,481 $ 57,637 $ 37,482 13,063 - - - - 29,997 - - 139,051 19,889 - - - - 931,529 57,637 37,482 - - - - - 1,085,937 5,157 12,805 1,085,937 5,157 12,805 19,407 - - - - 15,373 - - - 1,154,830 - - - - - - - - 8,608 - - - - - - - - 138,148 - - - - - - - - - - 1,549,207 2,95Q552 587,096 - - - - - - - - - - - 488,375 - - - - - - - - 7,86Q138 - - � � � � � (2,021,937) � � 606,503 1,154,830 8,608 138,148 488,375 5,853,574 1,549,207 2,95Q552 $ 626,392 $ 1,154,830 $ 8,608 $ 138,148 $ 488,375 $ 7,871,040 $ 1,612,001 $ 3,OOQ839 (Continued) 125 CITY OF DUBUQUE,IOWA COMBINING BALANCE SHEET EXHIBIT A-1 NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 3Q 2018 CapitalProjecteFunde PermanentFunde Total EllaLyons Library Nonntajor Salee Tas Street Peony Trail Gifte Govemmental Conetnution Conetnution Trust Trust Funde ASSETS CaehandpooledcashinveetrneNs $ 2,751,218 $ - $ - $ - $ 12,815,475 Receivables Proper[ytax Delinquent - - - - 32,624 Succeedingyeu - - - - 4,049,064 Accounts and other - 24,855 - - 228,385 Special aseeeements - - - - 712,211 Accruedintereet 7,602 (341) 150 42 26,725 Notee 657,518 - - - 5,344,079 Inteigovemmental 146,434 5,024,989 - - 7,98Q510 Inventories - - - - 293,852 Prepaiditeme - 196 - - 52,007 Reetrictedcashandpooledcaehinveetrnents 657,995 - 145,724 18,747 4,518,552 Total Aeeets $ 4,220,767 $ 5,049,699 $ 145,874 $ 18,789 $ 36,053,484 LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accountepayable $ 84,112 $ 1,296,923 $ - $ - $ 2,674,778 Accruedpayioll - - - - 129,540 Wergovemmentalpayable - - - - 2,499 Due to other fimde - 153,075 - - 153,075 Uneamed revenue 144,299 TotalLiabilitiee 84,112 1,449,998 - - 3,104,191 DEFERREDINFLOWSOFRESOURCES Urtavailable revenues Succeedingyeupropertytas - - - - 4,049,064 Special aseeeements - - - - 684,205 Grante - 2,992,891 - - 4,096,790 Other 83,111 91,050 Total Deferred Inflowe of Reeourcee 3,076,002 8,921,109 FUND BALANCES Nonspendable: Endowmentcorpue - - 57,412 12,000 69,412 Inventory - - - - 293,852 Prepaiditeme - 196 - - 52,007 Reetricted: Endowmente - - 88,462 6,789 95,251 Library - - - - 1,154,830 Police - - - - 8,608 Veteiane - - - - 138,148 CapitalimprovemeNs - - - - 1Q065,806 Franchise agreement - - - - 587,096 Specialaseeeements - - - - 28,150 Iowa Firtance Authority Truet - - - - 488,375 Communityprogiame - - - - 8,383,743 Employee benefits - - - - 24,685 Committed,capitalimprovements 4,136,655 523,503 - - 4,66Q158 Unaseigned (2,021,937) TotalFundBalancee 4,136,655 523,699 145,874 18,789 24,028,184 Total Liabilitiee,Deferred Inflowe of Reeourcee and Fund Balancee $ 4,220,767 $ 5,049,699 $ 145,874 $ 18,789 $ 36,053,484 126 THIS PAGE IS INTENTIONALLY LEFT BLANI� 127 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 3Q 2018 Special Revenue Funds Road Use SectionVIII Employee Special Tax Housing Benefits Assessmenis REVENUES Taxes $ - $ - $ 4,671,433 $ - Special assessments - - - 120,248 Intergovemmental 7,16Q787 5,481,834 - - Chugesforservices - - - - Investrnenteunings - 2,573 - 42,223 Conhibutions - 3,927 - - Miscellaneous 44,586 79,858 - 3,424 TotalRevenues 7,205,373 5,568,192 4,671,433 165,895 EXPENDITURES Govemmental activities Current Public safety - - - - Public works 5,692,028 - - 267 Health and social services - - - - Culture and recrea.tion - - - - Community and economic development - 5,S 1Q498 - - General govemment - - 176 - Capitalprojects 922,202 - - - TotalExpenditures 6,614,230 5,S1Q498 176 267 EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER)EXPENDITURES 591,143 (242,30� 4,671,257 165,628 OTHER FINANCING SOURCES (USES) Issuance of debt - - - - Premium onbonds - - - - Transfers in - 229,559 - - T�ansf�s ouc ��6,9as) - (a,6si,6�6� �i�i,s6s� Insurance recovery - - - - Sale of capital assets - - - - Total Other Financing Sources(Uses) (76,945) 229,559 (4,681,676) (171,365) NET CHANGE IN FUND BALANCES 514,198 (12,747) (10,419) (5,737) FUND BALANCES,BEGINNING 5,362,732 536,352 35,104 33,887 FUND BALANCES,ENDING $ 5,876,930 $ 523,605 $ 24,685 $ 28,150 128 EXHIBIT A-2 Special Revenue Funds Capital Projects Funds Library Police IFA Expendable Expendable Veteran's Housing Community Airport General Cable TV Gifts Trust Gifts Trust Memorial Trust Development Construction Construction $ - $ - $ - $ - $ - $ - $ - $ - - - - - - 2,720 - - - - - - 227,046 6,376,831 1,451,821 63,091 - 7,004 - - - 4,675 218,517 - 3,422 8,586 71 451 - 56,250 8,530 15,500 - 13,775 (20) 137,697 - 118,278 - 3,319 56Q715 87,391 - - - 6,471 - 58,623 564,137 116,756 51 138,148 227,046 6,565,225 1,678,868 14Q533 - - 12,413 - - - - - - - - - - 244,356 - - 226 - - - - 1Q000 - - - 163,271 - - - 125,328 - - - - - - 114,529 6,488,306 - - 543,899 - - - - 9,105 - - - - - - - 2,736,395 1,581,808 1,638,906 544,125 163,271 12,413 - 114,529 9,613,490 1,581,808 1,638,906 2Q012 (46,515) (12,362) 138,148 112,517 (3,048,265) 97,060 (1,498,373) - - - - 38,000 298,506 373,550 1,474,433 - - - - - �zai,sz�� zoa,9sa� �iis,so6� - - - - az,i9i zz,i�i - - - - - - SQ191 79,150 168,616 1,355,927 2Q012 (46,515) (12,362) 138,148 192,708 (2,969,115) 265,676 (142,446) 586,491 1,201,345 20,970 - 295,667 8,822,689 1,283,531 3,092,998 $ 606,503 $ 1,154,830 $ 8,608 $ 138,148 $ 488,375 $ 5,853,574 $ 1,549,207 $ 2,95Q552 (Continued) 129 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF REVENUES, EXHIBIT A-2 EXPENDITURES,AND CHANGES IN FUND BALANCES (CONTINUED) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30,2018 Capital Projects Funds Permanent Funds Total EllaLyons Library Nonmajor SalesTax Sheet PeonyTrail Gifts Govemmental Construction Construction Trust Trust Fhnds REVENUES Taxes $ 1,722,189 $ 2,583,285 $ - $ - $ 8,976,907 Special assessments - - - - 122,968 Intergovemmental 8,921 5,254,799 - - 26,025,130 Chugesforservices - 19,270 - - 249,466 Investrnenteunings 3Q483 3,243 - 132 171,464 Conhibutions 500 - - - 277,476 Miscellaneous - 14Q933 - 235 982,236 Total Revenues 1,762,093 8,001,530 - 367 36,805,647 EXPENDITURES Govemmental activities Current Public safety - - - - 12,413 Public works - - - - 5,936,651 Health and social services - - - - 1 Q226 Culture and recrea.tion - - 5,547 - 294,146 Community and economic development - - - - 12,413,333 Generalgovemment - - - - 553,180 Capitalprojects 1,367,076 9,156,461 - - 17,402,848 TotalExpenditures 1,367,076 9,156,461 5,547 - 36,622,797 EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER)EXPENDITURES 395,017 (1,154,931) (5,547) 367 182,850 OTHER FINANCING SOURCES (USES) Issuanceofdebt - 11Q000 - - 11Q000 Premium on bonds - 1,616 - - 1,616 Transfersin 9,530 125,601 - - 2,549,179 T�ansf�s ouc �i,iso,9s� �z99,i9�) - - (6,9�s,os� Insurancerecovery - 58,000 - - 58,000 Saleofcapitalassets - 3,500 - - 67,862 Total Other Financing Sources(Uses) (1,171,40� (480) - - (4,188,429) NET CHANGE IN FUND BALANCES (776,389) (1,155,411) (5,547) 367 (4,005,579) FUND BALANCES,BEGINNING 4,913,044 1,679,110 151,421 18,422 28,033,763 FUND BALANCES,ENDING $ 4,136,655 $ 523,699 $ 145,874 $ 18,789 $ 24,028,184 130 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. 131 CITY OF DUBUQUE,IOWA COMBINll�TG STATEMENT OF NET POSITION EXHIBIT�1 NONNIAJOR ENTERPRISE FUNDS JUNE 30,2018 Total Other Refuse Transit America's Enterprise Collection System Salt RiverProject Fhnds ASSETS CURRENT ASSETS Cash and pooled cash investrnents $ 917,122 $ 306,650 $ 1,600 $ 4 $ 1,225,376 Receivables Accounts 404,502 2,897 - - 407,399 Accrned interest 2,045 - 4 - 2,049 Intergovemmental - 1,105,494 - - 1,105,494 Prepaiditems - 11,378 - - 11,378 TotalCurrentAssets 1,323,669 1,426,419 1,604 4 2,751,696 NONCURRENT ASSETS Capital assets Land - 36,000 - - 36,000 Buildings - 13,591,053 175,458 - 13,766,511 Improvements to other than buildings - 796,092 686,312 - 1,482,404 MacMnery and equipment 2,584,032 6,762,371 36,342 - 9,382,745 Accumulated depreciation (1,847,84� (5,834,66� (122,302) - (7,804,814) NetCapitalAssets 736,186 15,35Q850 775,810 - 16,862,846 TotalNoncurrentAssets 736,186 15,35Q850 775,810 - 16,862,846 TotalAssets 2,059,855 16,777,269 777,414 4 19,614,542 DEFERRED OUTFLOWS OF RESOURCES Pension related deferred outflows 28Q085 452,175 - - 732,260 OPEB related deferred outflows 6,859 4,458 - - 11,317 Total Deferred Outflows of Resources 286,944 456,633 - - 743,577 LIABILITIES CURRENT LIABILITIES Accounis payable 7,460 86,869 - - 94,329 Accruedpayroll 49,407 82,791 - - 132,198 General obligation bonds payable 5,000 9,268 - - 14,268 Accrued compensated absences 6,091 3,277 - - 9,368 Accruedinterestpayable 2,303 235 - - 2,538 TotalCurrentLiabilities 7Q261 182,440 - - 252,701 NONCURRENT LIABILITIES General obligation bonds payable 72,567 87,125 - - 159,692 Accrued compensated absences 235,311 16,306 - - 251,617 Netpensionliability 985,343 1,59Q755 - - 2,576,098 Total OPEB liability 245,242 98,689 - - 343,931 TotalNoncurrentLiabilities 1,538,463 1,792,875 - - 3,331,338 Total Liabilities 1,608,724 1,975,315 - - 3,584,039 DEFERRED INFLOWS OF RESOURCES Pension related deferred inflows 54,024 87,218 - - 141,242 NET POSITION Netinvestrnentincapitalassets 658,619 15,254,457 775,810 - 16,688,886 Unreshicted 25,432 (83,088) 1,604 4 (56,048) TotalNetPosition $ 684,051 $ 15,171,369 $ 777,414 $ 4 $ 16,632,838 132 CITY OF DUBUQUE,IOWA EXHIBIT�2 COMBINll�TG STATEMENT OF REVENiJES,EXPENSES,AND CIiANGES IN NET POSITION NONNIAJOR ENTERPRISE FUNDS FOR THE YEAR ENDID JUNE 30,2018 Total Other Refuse Transit America's Enterprise Collection System Salt RiverProject Funds OPERATING REVENUES Charges for sales and services $ 4,228,694 $ 402,324 $ 96,273 $ - $ 4,727,291 Other 3,848 63,226 - - 67,074 Total Operating Revenues 4,232,542 465,550 96,273 - 4,794,365 OPERATING EXPENSES Employee e�pense 2,711,441 2,606,990 - - 5,318,431 Utilities 19,746 85,875 - - 105,621 Repairsand maintenance 387,511 785,650 734 - 1,173,895 Suppliesandservices 769,117 459,914 91,048 1Q143 1,33Q222 Insurance 19,972 44,798 - - 64,770 Depreciation 334,286 739,517 27,639 - 1,101,442 TotalOperatingExpenses 4,242,073 4,722,744 119,421 1Q143 9,094,381 OPERATINGINCOME(LOSS) (9,531) (4,257,194) (23,148) (1Q143) (4,30Q01� NONOPERATING REVENUES Intergovemmental - 1,564,123 - - 1,564,123 Investment earnings 7,520 - - - 7,520 Contributions - 84,280 - - 84,280 Interestexpense (2,478) (235) - - (2,713) NetNonoperating Revenues 5,042 1,648,168 - - 1,653,210 INCOME(LOSS)BEFORE TRANSFERS (4,489) (2,609,02� (23,148) (1Q143) (2,646,80� CAPITAL CONTRIBUTIONS - 2,253,334 - - 2,253,334 TRANSFERS IN - 1,872,714 - 13,579 1,886,293 TRANSFERS OUT - (257,993) - - (257,993) CHANGEINNETPOSITION (4,489) 1,259,029 (23,148) 3,436 1,234,828 NET POSITION,BEGINNING, AS RESTATED 688,540 13,912,340 80Q562 (3,432) 15,398,010 NET POSITION,ENDING $ 684,051 $ 15,171,369 $ 777,414 $ 4 $ 16,632,838 133 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS YEAR ENDED JUNE 30,2015 America's TotalOther Refuse Transit River Enterprise Collection System Salt Project Funds CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 4,215,478 $ 403,703 $ 96,269 $ - $ 4,715,450 Cash payments to suppliers for goods and services (1,194,506) (2,652,75'� (91,782) (13,579) (3,952,624) Cash payments to employees for services (2,681,631) (2,506,481) - - (5,188,112) Other operating receipts 3,848 63,226 - - 67,074 NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES 343,189 (4,692,309) 4,487 13,579 (4,358,212) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds - 1,872,714 - 13,579 1,886,293 T��fe�s c�ome�s�as - �zs�,99s) - - (zs�,99s� Conhibutions - 84,280 - - 84,280 Intergovemmental giant proceeds - 2,812,422 - - 2,812,422 Proceeds from interfimd balances - - (2,887) - (2,88'� NET CASH PROVIDED BY(USED FOR)NONCAPITAL FINANCINGACTIVITIES - 4,511,423 (2,887) 13,579 4,522,115 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from issuance of debt 27,446 96,393 - - 123,839 Acquisition and conshuction of capital assets (352,053) (434,81� - - (786,869) Principal Paid (31,154) - - - (31,154) inc��escP�a �s,00z) - - - (s,00z� NET CASH USED FOR CAPITAL AND RELATEDFINANCINGACTIVITIES (358,763) (338,423) - - (697,18� CASH FLOWS FROM INVESTINGACTIVITIES Interest received 6,268 - - - 6,268 NET INCREASE(DECREASE)IN CASH AND POOLED INVESTMENTS (9,306) (519,309) 1,600 - (527,015) CASH AND POOLED INVESTMENTS,BEGINNING 926,428 825,959 - 4 1,752,391 CASH AND POOLED INVESTMENTS,ENDING $ 917,122 306,650 $ 1,600 $ 4 $ 1,225,376 134 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF CASH FLOWS EXHIBIT B3 NONMAJOR ENTERPRISE FUNDS YEAR ENDED NNE 30,2015 Business-type Activities-Enteiprise 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) $ (9,531) $ (4,257,194) $ (23,148) $ (10,143) $ (4,300,016) Adjustments to reconcile operating income(loss)to net cash provided by(used for)operating activities Depreciation 334,286 739,517 27,639 - 1,101,442 Cktange in assets and liabilities (Increase)Decreaseinreceivables (13,216) 1,379 (4) - (11,841) (Increase)in inventories and prepaid items - (1,476) - - (1,476) Increase(Decrease)in accounts payable 1,840 (1,275,044) - (3,43� (1,276,640) Increase(Decrease)in accrued liabilities (2,127) 11,216 - - 9,089 Increase(Decrease)in net pension liability 38,266 110,682 - - 148,948 (Increase)Decrease in deferred outtlows (29,404) (54,153) - - (83,557) Increase(Decrease)in deferred inflows 16,407 28,430 - - 44,837 Increase in total OPEB liability 6,668 4,334 - - 11,002 TotalAdjustments 352,720 (435,115) 27,635 (3,43� (58,196) NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES $ 343,189 $ (4,692,309) $ 4,487 $ (13,579) $ (4,358,212) NONCASH CAPITAL AND RELATED FINANCING ACTI VITE S Contdbution of capital assets from outside sources $ - $ 1,785,106 $ - $ - $ 1,785,106 Contdbution of capital assets from Govemmental Activities $ - $ 4 $ - $ - $ 4 135 THIS PAGE IS INTENTIONALLY LEFT BLANI� 136 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. 137 CITY OF DUBUQUE,IOWA COMBINll�TG STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30,2018 General Garage Stores/ Service Service Printing ASSETS CURRENT ASSETS Cash and pooled cash investments $ - $ 333,335 $ 2,952 Receivables Accounts - - - Accrued interest - - - Prepaid items - - 2,546 Inventories - 62,923 2,889 TotalCurrentAssets - 396,258 8,387 NONCURRENT ASSETS Capital assets Machinery and equipment - 355,018 - Accumulated depreciation - (196,513) - NetCapitalAssets - 158,505 - TotalNoncurrentAssets - 158,505 - Total Assets - 554,763 8,387 DEFERRID OUTFLOWS OF RESOURCES Pension related deferred outflows 314,906 165,460 - LIABILITIES CiIRRENT LIABILITIES Accountspayable - 58,827 5,178 Accruedpayroll - 28,834 - Due to other funds 27,798 - - TotalCurrentLiabilities 27,798 87,661 5,178 NONCURRENT LIABILITIES Netpensionliability 1,107,851 582,097 - TotalNoncurrentLiabilities 1,107,851 582,097 - TotalLiabilities 1,135,649 669,758 5,178 DEFERRID INFLOWS OF RESOURCES Pension related deferred inflows 60,741 31,915 - NET POSITION Net investment in capital assets - 158,506 - Unrestricted (881,484) (139,95� 3,209 Total Net Position(Deficit) $ (881,484) $ 18,550 $ 3,209 138 EXHIBIT C-1 Health Workers' Insurance Compensation Reserve Reserve Total $ 4,092,150 $ 1,349,767 $ 5,778,204 162,736 - 162,736 9,125 3,010 12,135 - 14,238 16,784 - - 65,812 4,264,011 1,367,015 6,035,671 - - 355,018 - - (196,513) - - 158,505 - - 158,505 4,264,011 1,367,015 6,194,176 - - 480,366 499,834 996,687 1,56Q526 - - 28,834 - - 27,798 499,834 996,687 1,617,158 - - 1,689,948 - - 1,689,948 499,834 996,687 3,307,106 - - 92,656 - - 158,506 3,764,177 37Q328 3,116,274 $ 3,764,177 $ 37Q328 $ 3,274,780 139 CITY OF DUBUQUE,IOWA COMBINll�TG STATEMENT OF REVENiJES,EXPENSES,AND CIiANGES IN NET POSITION(DEFICITS) INTERNAL SERVICE FUNDS FOR THE YEAR ENDID JUNE 30,2018 General Garage Stores/ Service Service Printing OPERATING REVENUES Charges for sales and services $ 1,683,777 $ 2,177,686 $ 526,808 Other - 32,738 - TotalOperatingRevenues 1,683,777 2,21Q424 526,808 OPERATING EXPENSES Employee expense 1,573,167 1,014,831 - Utilities - 26,672 6,561 Repairs and maintenance - 93,718 - Supplies and services 2,512 992,581 52Q660 Insurance - 19,287 - Depreciation - 37,322 - TotalOperatingExpenses 1,575,679 2,184,411 527,221 OPERATING INCOME(LOSS) 108,098 26,013 (413) NONOPERATING REVENUES(EXPENSES) Intergovemmental - 1,294 - Inveshnent eamings - - - Gain on disposal of assets - 3,186 - INCOME(LOSS)BEFORE TRANSFERS 108,098 3Q493 (413) TRANSFERS OUT - (12,973) - CHANGE IN NET POSITION 108,098 17,520 (413) NET POSITION(DEFICIT),BEGINNING (989,582) 1,030 3,622 NET POSITION(DEFICIT),ENDING $ (881,484) $ 18,550 $ 3,209 140 EXHIBIT C-2 Health Workers' Insurance Compensation Reserve Reserve Total $ 11,704,414 $ 1,067,309 $ 17,159,994 34,251 6,843 73,832 11,738,665 1,074,152 17,233,826 - - 2,587,998 - - 33,233 - - 93,718 9,54Q879 721,516 11,778,148 4 91,453 110,744 - - 37,322 9,54Q883 812,969 14,641,163 2,197,782 261,183 2,592,663 - - 1,294 15,544 1Q037 25,581 - - 3,186 2,213,326 271,220 2,622,724 - - (12,973) 2,213,326 271,220 2,609,751 1,SSQ851 99,108 665,029 $ 3,764,177 $ 37Q328 $ 3,274,780 141 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 3Q 2015 General Guage Stores/ Service Service PrintinQ CASH FLOWS FROM OPERATINGACTIVITIES Cash received from customers $ 1,683,777 $ 2,177,686 $ 526,808 Cash payments to suppliers for goods and services (2,512) (1,103,973) (510,131) Cash payments to employees for services (1,683,776) (1,005,056) - Other operating receipts - 32,738 - NET CASH PROVIDED BY(USED FOR)OPERATING ncTiviTiEs �z,sii� ioi,s9s i6,6�� CASH FLOWS FROM NONCAPITAL FINANCING ACTI VITIES Transfers to other funds - (12,973) - Proceeds from interfund balances 2,511 - (13,725) Payment of interfund balances - - - NET CASH PROVIDED BY(USED FOR)NONCAPITAL FINANCINGACTIVITIES 2,Sll (12,973) (13,725) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTI VITIES Acquisition and construction of capital assets - (30,770) - Intergovemmentalgiantproceeds - 1,294 - Proceeds from sale of capital assets - 3,186 - NET CASH PROVIDED BY(USED FOR)CAPITAL AND RELATEDFINANCINGACTIVITIES - (26,290) - CASH FLOWS FROM INVESTINGACTIVITIES Interestreceived - - - NET INCREASE(DECREASE)IN CASH AND POOLED INVESTMENTS - 62,132 2,952 CASH AND POOLED INVESTMENTS,BEGINNING - 271,203 - CASH AND POOLED INVESTMENTS,ENDING $ - $ 333,335 $ 2,952 RECONCILIATION OF OPERATING INCOME(LOSS) TO NET CASH PROVIDED BY(USED FOR)OPERATING ACTI VITIES Operating income(loss) $ 108,098 $ 26,013 $ (413) Adjustments to reconcile operating income(loss)to net cash provided by(used for)operating activities Depreciation - 37,322 - Change in assets and liabilities (Increase)Decrease in receivables - - - (Increase)Decrease in inventories and prepaid items - (3,06� 11,912 Increase(Decrease)in accounts payable - 31,351 5,178 Increase(Decrease)in net pension liability (148,087) 12,313 - (Increase)Decrease in deferred outtlows 26,622 (10,519) - Increase(Decrease)in deferred inflows 1 Q856 9,284 - Increase(Decrease)in accrued liabilities - (1,303) - Total Adjustments (110,609) 75,382 17,090 NET CASH PROVIDED BY(USED FOR)OPERATING ncTiviTiEs � (z,sii� � ioi,s9s � i6,6�� 142 EXHIBIT C-3 Health Workers' Insurance Compensation Reserve Reserve Total $ 11,602,277 $ 1,067,309 $ 17,057,857 �9,�as,99s� �ssi,za9� �iz,zis,sss� - - (z,6ss,ssz� 34,251 6,843 73,832 1,89Q535 222,903 2,228,999 - - (12,973) - - (11,214) - - (24,187) - - (30,770) - - 1,294 - - 3,186 - - (26,290) 8,296 7,984 16,280 1,898,831 230,887 2,194,802 2,193,319 1,118,880 3,583,402 $ 4,092,150 $ 1,349,767 $ 5,778,204 $ 2,197,782 $ 261,183 $ 2,592,663 - - 37,322 �ioz,is�) - (ioz,is�� - 83,270 92,116 �zos,iio� �izi,sso� �z9o,isi� - - (135,774) - - 16,103 - - 20,140 - - (1,303) (307,247) (38,280) (363,664) $ 1,89Q535 $ 222,903 $ 2,228,999 143 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. Flexsteel Decomission Fund—This fund is used to account far the resources held far the decomissioning of the prior Flexsteel site. 144 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES EXHIBIT D-1 AGENCY FUND FOR THE YEAR ENDED JUNE 30,2015 Balance Balance Beginning End of Yeu Additions Deductions of Yeu CABLE EQUIPMENT FUND ASSETS Cash and pooled cash investments $ 612,647 $ 197,609 $ 160,244 $ 650,012 Prepaids 16,997 21,246 16,997 21,246 Accountsreceivable 50,378 49,207 50,378 49,207 Total Assets $ 680,022 $ 268,062 $ 227,619 $ 720,465 LIABILITIES Accounts payable $ 24,722 $ - $ 24,722 $ - Due to other agency 655,300 268,062 202,897 720,465 Total Liabilities $ 680,022 $ 268,062 $ 227,619 $ 720,465 DOG TRACK DEPRECIATION FUND ASSETS Cash and pooled cash investments $ 827,493 $ 124,858 $ 6,882 $ 945,469 Accruedinterest 708 2,108 708 2,108 Total Assets $ 828,201 $ 126,966 $ 7,590 $ 947,577 LIABILITIES Due to other agency $ 828,201 $ 126,966 $ 7,590 $ 947,577 FLEXSTEEL DECOMISSION FUND Cash and pooled cash investments $ - $ 665,839 $ - $ 665,839 Notes receivable - 2,OOQ000 - 2,000,000 Total Assets $ - $ 2,665,839 $ - $ 2,665,839 LIABILITIES Due to other agency $ - $ 2,665,839 $ - $ 2,665,839 Total Liabilities $ - $ 2,665,839 $ - $ 2,665,839 TOTAL AGENCY FUNDS ASSETS Cashandpooledcashinvestments $ 1,440,140 $ 988,306 $ 167,126 $ 2,261,320 Prepaids 16,997 21,246 16,997 21,246 Accountsreceivable 50,378 49,207 50,378 49,207 Notes receivable - 2,OOQ000 - 2,000,000 Accruedinterest 708 2,108 708 2,108 Total Assets $ 1,508,223 $ 3,06Q867 $ 235,209 $ 4,333,881 LIABILITIES Accounts payable $ 24,722 $ - $ 24,722 $ - Dueto other agency 1,483,501 3,06Q867 210,487 4,333,881 Total Liabilities $ 1,508,223 $ 3,06Q867 $ 235,209 $ 4,333,881 145 THIS PAGE IS INTENTIONALLY LEFT BLANI� 146 Statistical Section (Unaudited) June 30, 2018 City of Dubuque, Iowa 147 THIS PAGE IS INTENTIONALLY LEFT BLANI� 148 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. 150 Revenue Capacity These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax. 160 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. 164 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. 175 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. 178 Sources: Unless otherwise noted, the inforxnation in these schedules is derived from the comprehensive annual financial reports for the relevant year. 149 CITY OF DUBUQUE,IOWA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2009 2010 2011 2012 2013 Governmental activities Netinvestrnentincapitalassets $ 298,855,346 $ 309,126,684 $ 329,416,245 $ 347,89Q769 $ 342,046,442 Restricted 27,171,123 26,064,318 23,738,199 26,18Q100 23,491,207 u�reso-��e�d (s,zso,�is) (ii,zsb,siz) (a,s9i,ssi) (ib,s�b,9ss) (s,sbi,bss) Totalgovemmentalactivitiesnetposition $ 320,745,754 $ 323,934,690 $ 34$263,063 $ 357,193,881 $ 357,175,961 Business-type activities Netinvestrnentincapitalassets $ 12Q473,286 $ 124,805,513 $ 135,026,753 $ 132,237,734 $ 138,498,777 Restricted 77Q157 129,642 893,519 957,802 6,011,848 Unrestricted 12 321 125 11 679 961 2 603 799 10 665 596 (641,384) Total business-t}pe activities netposition $ 133,564,568 $ 136,615,116 $ 138,524,071 $ 143,861,132 $ 143,869,241 Primary govemment Netinvestrnentincapitalassets $ 419,328,632 $ 433,932,197 $ 464,442,998 $ 48Q128,503 $ 48Q545,219 Restricted 27,941,280 26,193,960 7A,631,718 27,137,902 29,503,055 u�reso-��e�d �,oaqaio azs,ba9 (z,zs�,ssz) (b,zii,s9z) (9,00s,o�z) Totalprimarygovemmentnetpositions $ 454,310,322 $ 460,54Q806 $ 486,787,134 $ 501,055,013 $ 501,045,202 150 TABLE 1 Year 2014 2015 2016 2017 2018 $ 354,732,451 $ 348,173,267 $ 369,244,904 $ 375,578,520 $ 379,04Q697 21,501,638 22,047,405 21,473,309 23,955,112 27,269,997 (18,151,279) (49,579,334) (47,166,839) (43,921,629) (41,853,174) $ 35$082,810 $ 320,641,338 $ 343,551,374 $ 355,612,003 $ 364,457,520 $ 138,842,390 $ 148,487,126 $ 161,326,743 $ 164,448,390 $ 168,205,523 5,315,519 7,796,668 4,254,907 3,796,752 3,053,616 (593,202) (4,568,933) (7,33Q071) 3,876,760 10,696,792 $ 143,564,707 $ 151,714,861 $ 158,242,579 $ 172,121,902 $ 181,955,931 $ 493,574,841 $ 496,66Q393 $ 53Q571,647 $ 54Q026,910 $ 547,246,220 26,817,157 29,844,073 25,728,216 27,751,864 3Q323,613 (is,�aa,asi) (sa,ias,zb�) (sa,sos,9io) (ao,oaa,sb9) (si,isb,ssz) $ 501,647,517 $ 472,356,199 $ 501,793,953 $ 527,733,905 $ 546,413,451 151 CITY OF DUBUQUE,IOWA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2009 2010 2011 2012 2013 Expenses Govemmental activities: Public safety $ 22,038,265 $ 22,067,988 $ 23,759,068 $ 26,326,367 $ 28,292,481 Publicworks 19,079,688 22,121,629 18,978,423 22,917,747 21,607,536 Health and social services 849,237 852,099 1,072,347 913,954 716,970 Culture andrecreation 12,64Q716 11,446,084 1Q911,733 12,749,558 13,647,178 Communiryandeconomicdevelopment 12,693,140 15,422,099 12,89Q841 22,03Q950 17,388,720 Generalgovemment 6,423,908 7,963,016 9,052,704 6,133,983 6,7A8,483 Intereston longterm debt 3,164,126 3,101,897 3,294,951 3,294,912 4,049,640 Total govemmental activities expenses 76,889,080 82,974,812 79,96Q067 94,367,471 91,951,008 Business-type activities: Sewagedisposalworks 6,326,708 6,631,326 7,899,011 9,718,669 9,375,748 Waterutility 6,1OQ491 6,093,827 6,523,993 7,41Q710 6,817,772 SWrtnwaterutility 2,138,198 2,213,144 2,811,321 2,75Q767 3,347,304 Parkingfacilities 2,147,405 4,003,776 4,775,834 3,152,055 3,586,405 America'sRiverProject 61,927 423,158 18Q086 22,787 22,770 Refuse collection 2,788,665 2,703,887 2,828,891 3,173,075 3,468,859 Transitsystem 2,625,145 2,832,066 2,947,958 3,629,750 3,492,095 Salt 671,647 661,395 346,066 Total business-type activities expenses 22,188,539 24,901,184 28,638,741 3Q519,208 3Q457,019 Total primary government expenses $ 99,077,619 $ 107,875,996 $ 108,598,808 $ 124,886,679 $ 122,408,027 Program Revenues Govemmental activities: Charges for services Public safety 2,02Q625 2,348,064 2,579,573 2,915,562 2,495,737 Publicworks 4,456,364 4,046,583 5,331,667 5,178,439 4,472,479 Cultureandrecreation 2,279,688 2,192,886 2,108,177 2,321,553 2,488,844 Other activities 1,557,597 2,412,880 2,53Q234 2,873,298 3,264,979 Operating grants and contributions 12,599,967 2Q83Q113 14,204,627 23,013,997 13,995,316 Capital grants and contributions 4,811,729 1Q748,522 23,482,866 16,56Q811 1Q791,945 Total govemmental activities program revenues 27,725,970 42,579,048 SQ237,144 52,863,660 37,509,300 Business-type activities: Charges for services Sewage disposalworks 5,904,535 5,893,730 6,643,974 7,827,281 8,924,785 Waterutility 5,32Q642 5,326,202 5,638,277 6,037,073 6,922,582 Stortnwaterutility 2,291,249 2,282,625 2,993,539 3,18Q134 3,192,256 Parkingfacilities 2,27A,185 2,399,843 2,75Q610 2,908,989 2,883,865 America's River Project - 7,000 - - - Refuse collection 2,872,649 2,893,017 3,082,197 3,257,960 3,346,795 Transitsystem 196,260 273,433 193,236 278,835 307,314 Salt - - 773,258 665,942 395,000 Operating grants and contributions 1,095,946 1,652,277 2,773,933 1,579,493 2,264,695 Capital grants and contributions 3,613,321 3,80Q582 6,536,527 5,323,486 1,7AQ583 Total business-t}pe activities program revenues 23,518,787 24,528,709 31,385,551 31,059,193 29,477,875 Totalprimarygovemmentprogramrevenues $ 51,244,757 $ 67,107,757 $ 81,622,695 $ 83,922,853 $ 66,987,175 152 TABLE 2 Year 2014 2015 2016 2017 2018 $ 27,578,517 $ 25,525,937 $ 26,851,67A $ 3Q02Q343 $ 29,482,962 21,306,882 19,207,837 24,323,023 19,608,137 2Q393,871 1,055,398 928,968 967,936 815,251 883,217 13,696,331 13,002,690 12,993,331 13,653,509 14,323,710 14,591,257 18,064,831 15,464,781 18,096,170 21,109,384 9,61Q084 6,42Q173 4,101,423 8,982,668 7,573,081 3,684,993 3,903,667 2,963,134 3,467,685 3,129,502 91,523,462 87,054,103 87,665,252 94,643,763 96,895,727 11,481,103 12,019,866 12,817,669 11,326,661 11,614,347 8,812,340 7,80Q393 6,483,229 6,807,217 7,109,421 3,431,096 4,131,562 5,021,523 6,234,015 6,159,039 3,732,492 3,383,419 3,42Q296 3,547,856 2,866,510 33,579 7A,000 21,521 22,893 1Q143 3,75Q366 3,74Q404 3,968,761 4,208,268 4,7A4,551 3,847,320 4,7A5,823 4,274,967 4,237,054 4,722,979 56,468 244,691 181,617 45,039 119,421 35,144,764 35,59Q158 36,189,583 36,429,003 36,846,411 $ 126,668,226 $ 122,644,261 $ 123,854,835 $ 131,072,766 $ 133,742,138 2,67A,455 2,532,114 2,713,065 2,93Q068 2,60Q751 5,829,293 6,092,356 5,765,075 5,681,107 6,654,101 2,321,265 2,547,843 2,723,270 2,767,636 2,874,493 3,921,256 3,493,143 3,887,056 3,541,205 5,864,541 12,784,907 11,992,439 15,301,219 15,028,527 21,569,356 12,162,649 9,704,043 18,667,619 13,36Q280 7,779,713 39,643,825 36,361,938 49,057,304 43,308,823 47,342,955 1 Q025,673 1 Q582,662 12,158,439 12,442,584 12,659,662 7,248,790 7,463,430 8,406,928 8,553,225 8,906,136 3,27A,504 3,49Q040 3,754,148 4,076,396 4,367,963 2,92Q148 3,036,214 3,7A7,383 3,286,947 3,034,744 - - 1,605 4 - 3,70Q922 3,783,493 3,857,340 4,185,051 4,232,542 275,907 397,545 463,688 459,258 465,550 45,600 232,271 81,720 86,887 96,273 1,717,208 1,866,535 1,648,077 1,70Q171 1,648,403 2,92Q942 1Q02Q715 7,607,721 14,16Q820 5,705,262 32,079,694 4Q872,905 41,227,049 48,951,343 41,116,535 $ 71,723,519 $ 77,234,843 $ 9Q284,353 $ 92,26Q166 $ 88,459,490 (Continued) 153 CITY OF DUBUQUE,IOWA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2009 2010 2011 2012 2013 Net(Expense)Bevenue Govemmental activities $ (49,163,110) $ (4Q395,764) $ (29,722,923) $ (41,503,811) $ (54,441,708) a�s��ess-rypea�c��c�es i,sso,zas (s�z,a�s) z,�ab,sio ss9,9ss (9�9,iaa) Totalprimarygovemmentnetexpense $ (47,832,862) $ (4Q768,239) $ (26,976,113) $ (4Q963,82� $ (55,42Q852) General Revenues and Other Changes in Net Position Govemmental activities: General Revenues Proper[ytases $ 23,716,819 $ 24,876,073 $ 28,7A9,114 $ 3Q816,614 $ 32,668,554 Local option sales tas 7,649,853 8,112,471 7,929,761 8,459,888 8,764,787 Hotel/motel taY 1,611,954 1,678,806 1,826,809 1,903,944 1,953,763 Utilityfranchisefees 1,486,292 1,591,712 2,488,858 2,272,481 2,568,347 Gaming 9,627,391 8,209,761 13,327,223 8,785,453 8,452,298 Unrestrictedinvestrnenteamings 2,215,413 1,339,709 668,363 1,529,149 201,153 Cra.in on sale of capital assets 407,503 - 149,937 1,417,048 907,122 Other 918,605 88Q930 622,494 - - Trar�sfers (za,szb,9sz) (s,ioa,�bz) (i,zii,zbs) (a,�a9,9as) (i,o9z,zs� Total governmental activities 22,806,848 43,584,700 54,051,296 50,434,629 54,423,788 Business-type activities: General Revenues Unrestrictedinvestrnentearnings 433,148 294,562 184,581 206,672 65,351 Gain on sale of capital assets 2,304 23,699 19,337 84,178 384,697 Extraordinaryitem - - (2,253,03� (243,722) (555,031) ltansfers 24,826,982 3,104,762 1,211,263 4,749,948 1,092,236 Totalbusiness-typeactivities 25,262,434 3,423,023 (837,855) 4,797,076 987,253 Totalprimarygovemment $ 48,069,282 $ 47,007,723 $ 53,213,441 $ 55,231,705 $ 55,411,041 Change in Net Position Governmentalactivities $ (26,356,262) $ 3,188,936 $ 24,328,373 $ 8,93Q818 $ (17,920) Business-type activities 26,592,682 3,OSQ548 1,908,955 5,337,061 8,109 Totalprimarygovernment $ 236,420 $ 6,239,484 $ 26,237,328 $ 14,267,879 $ (9,811) 154 TABLE 2 (continued) Year 2014 2015 2016 2017 2018 � (si,s�9,bs�) � (so,b9z,ibs) � (ss,w�,9as) � (si,ssa,9ao) � (a9,ssz,��z) (3,065,070) 5,282,747 5,037,466 12,522,340 4,27Q17A � (sa,9aa,�o�) � (as,ao9,ais) � (ss,s�o,asz) � (ss,siz,boo) � (as,zsz,bas) $ 33,264,283 $ 36,277,719 $ 36,518,506 $ 39,678,473 $ 39,632,246 8,211,366 8,76Q7A6 9,155,411 8,89Q046 8,61Q948 2,006,514 2,623,551 2,128,042 2,821,745 2,286,469 2,609,421 2,828,688 4,36Q107 4,558,847 4,832,958 7,878,008 7,397,709 8,44Q161 8,098,37A 8,062,251 777,958 668,134 1,082,165 335,577 688,769 483,782 19,495 813,492 83,720 309,857 (z,aaa,sa� (�,zss,s9s) (9�9,900) (i,o�i,ibs) (s,azs,ois) 52,786,486 51,286,949 61,517,984 63,395,569 59,OOQ483 135,461 185,356 407,528 231,746 268,283 18Q229 6,571 102,824 54,074 4,680 2,444,846 7,288,593 979,900 1,071,163 5,423,015 2,76Q536 7,48Q520 1,49Q252 1,356,983 5,695,978 $ 55,547,022 $ 58,767,469 $ 63,008,236 $ 64,752,552 $ 64,696,461 $ 906,849 $ 594,784 $ 22,91Q036 $ 12,06Q629 $ 9,447,711 (304,534) 12,763,267 6,527,718 13,879,323 9,966,102 $ 602,315 $ 13,358,051 $ 29,437,754 $ 25,939,952 $ 19,413,813 155 CITY OF DUBUQUE,IOWA FUND BALANCES,GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2009 2010 2011* 2012 2013 General Fund Reserved $ 4,864,701 $ 5,199,760 $ - $ - $ - Unreserved 14,206,181 8,622,705 - - - Nonspendable - - 868,631 5,613,359 6,646,278 Reshicted Assigned - - 8,904,490 5,549,803 3,434,440 Unassigned - - 6,139,306 9,371,016 8,806,171 Total general fimd $ 19,070,882 $ 13,822,465 $ 15,912,427 $ 20,534,178 $ 18,886,889 All Other Govemmental Funds Reserved $ 19,634,305 $ 24,404,656 $ - $ - $ - Unreserved,reported in: Special revenue funds 5,981,390 4,011,022 - - - Debt service fund - - - - - Capital projects funds 5,659,214 (989,025) - - - Permanentfunds 35,550 33,273 - - - Nonspendable - - 10,320,305 10,975,468 9,092,520 Reshicted - - 18,010,570 31,362,126 3Q738,046 Committed - - 5,203,472 5,843,671 1Q827,172 Unassigned - - (377,363) (429,344) - Total all othergovemmental fimds $ 31,310,459 $ 27,459,926 $ 33,156,984 $ 47,751,921 $ SQ657,738 *Classification changed in 2011 due to adoption of GASB 54. 156 TABLE3 Yeu 2014 2015 2016 2017 2018 $ - $ - $ - $ - $ - 6,549,063 6,082,043 6,049,052 5,585,672 5,414,922 2,208 - 1,904,805 647,772 1,015,935 1,590,065 1,267,250 7,356,066 8,693,524 10,908,497 12,582,596 15,193,241 $ 15,809,934 $ 15,423,339 $ 17,973,484 $ 19,760,541 $ 21,875,413 $ - $ - $ - $ - $ - 8,640,780 1,183,423 553,292 944,856 415,271 23,620,615 3Q496,183 27,45Q187 28,103,397 30,347,598 10,548,592 12,298,896 7,635,502 6,592,154 4,66Q158 - - - - (2,021,937) $ 42,809,987 $ 43,978,502 $ 35,638,981 $ 35,640,407 $ 33,401,090 157 CITY OF DUBUQUE,IOWA CHANGES IN FUNDBALANCES,GOVERNMENTALFUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2009 2010 2011 2012 2013 Revenues Tases $ 34,454,146 $ 36,252,156 $ 4Q428,894 $ 43,443,669 $ 45,44Q973 Special assesgnents 25Q372 318,178 232,535 596,138 175,486 Licenses and pertnits 1,088,386 1,115,472 1,17Q922 1,57Q022 1,271,771 Intergovemmental 15,796,822 27,31Q67A 26,171,082 37,574,783 26,58Q831 Chargesforservices 8,029,189 8,063,284 8,723,086 9,296,329 8,952,179 Finesandforfeits 199,839 224,601 454,117 525,389 484,128 Investrnentearnings 2,206,382 1,348,615 654,587 1,511,437 18Q016 Contributions 1,369,759 2,333,995 1,297,621 1,578,376 37Q154 Craming 9,627,391 8,209,761 13,327,223 8,785,453 8,452,298 Miscellaneous 1,60Q679 2,111,834 2,075,262 1,319,558 1,315,915 Totalrevenues 74,622,965 87,288,520 94,535,329 106,201,154 93,223,751 Expenditures Cmrent Public safety 21,335,192 21,979,729 23,95Q386 24,476,772 26,506,714 Public works 14,261,551 19,251,625 14,429,415 12,385,929 13,416,108 Health and social services 815,873 813,609 1,04Q114 828,837 68Q466 Culture andrecreation 12,227,506 14,909,517 11,279,951 1Q873,474 11,218,019 Community and economic development 11,953,279 14,654,816 12,361,176 22,237,140 18,678,496 General govemment 5,836,839 6,368,308 7,686,929 6,335,947 5,035,108 Debt service Principal 2,169,678 2,651,765 2,82Q371 3,27A,680 3,182,240 Interest 3,095,166 3,145,735 3,321,157 3,22Q546 3,991,115 Capitalprojects 7A,274,120 14,831,118 15,102,893 23,459,891 16,636,698 Totalexpenditures 95,969,204 98,606,222 91,992,392 107,043,216 99,344,964 Excess(deficiency)ofrevenues over (under)expenditures (21,346,239) (11,317,702) 2,542,937 (842,062) (6,121,213) Other Financing Sources(Uses) Issuance ofbonds 5,905,000 4,722,176 6,996,722 27,215,363 6,577,268 ��s�o��co�eo�ds (as,si� (si,99o) (s9,sa�) (�i,bs9) - Premiums on bonds - 554,796 1,642 123,990 - Issuanceofrefundingbonds - 8,885,000 705,000 - 4,949,148 Payment W refunded bonds escrow agent - (9,405,000) (69Q000) - (4,949,148) Transfersin 7,451,152 7,993,297 15,85Q523 8,773,387 15,295,630 ltansfersout (9,084,228) (1Q562,137) (18,961,892) (18,336,603) (16,981,203) Insurancerecovery - - 628,482 132,425 49,209 Sale of capital assets 593,956 62,610 753,153 2,221,877 2,438,837 Total other financing sources(uses) 4,817,364 2,218,752 5,244,083 2Q058,750 7,379,741 Netchangeinfundbalances $ (16,528,875) $ (9,098,950) $ 7,787,020 $ 19,216,688 $ 1,258,528 Debt service as a percentage of noncapital expenditures 7.68% 7J4% 8.49% 7.65% 8.57% 158 TABLE4 Year 2014 2015 2016 2017 2018 $ 46,034,361 $ SQ49Q204 $ 51,58Q084 $ 55,949,111 $ 55,362,621 154,692 85,501 111,193 261,233 122,968 1,136,941 1,198,420 1,48Q643 1,505,564 1,642,498 23,OSQ052 2Q828,57A 29,302,87A 26,314,297 27,229,554 1 Q264,257 1 Q711,243 1 Q919,854 1 Q816,025 11,559,017 455,219 362,661 421,925 484,687 407,322 756,809 668,134 1,082,165 335,577 688,769 678,561 789,268 1,44Q405 689,237 816,922 7,878,008 7,397,709 8,44Q161 8,098,37A 8,062,251 1,705,275 1,466,542 1,367,875 1,811,681 1,589,072 92,114,175 93,998,206 106,147,129 106,265,736 107,48Q994 27,644,190 27,57Q773 28,036,551 29,155,128 28,581,466 13,942,772 11,20Q427 14,597,823 11,728,716 11,687,309 1,049,194 939,172 1,015,987 868,280 854,045 12,351,497 12,30Q454 11,909,029 12,397,294 12,776,591 14,42Q980 16,418,909 13,473,413 16,474,553 2Q35Q200 5,898,293 5,977,605 6,436,114 7,287,586 6,755,479 4,595,808 4,91Q735 1Q302,412 17,615,698 7,989,850 3,65Q694 3,577,829 3,707,268 3,579,807 3,274,200 18,779,651 14,829,037 31,504,581 16,26Q851 17,402,848 102,333,079 97,724,941 12Q983,178 115,367,913 109,671,988 (io,zis,9oa) (s,�zb,�ss) (ia,ssb,oa9) (9,ioz,i��) (z,i9o,99a) - 11,137,321 3,933,882 23Q000 11Q000 - 72,852 292,521 319,384 16,915 - - - 11,023,700 1,778,325 - - 4,650,000 - 15,862,516 18,073,553 17,397,007 18,814,586 18,889,096 (i�,z9a,�bz) (zs,zai,�9s) (is,s�b,9o�) (i9,9i�,zi9) (zo,9so,s9i) 59,796 106,288 86,359 41,345 98,058 666,648 36Q436 1,063,814 378,861 2,154,546 (�os,soz) a,sos,bss 9,oa6,6�6 io,s9o,bs� z,obb,sa9 � (io,9za,�o� � �si,9zo � (s,�s9,s�s) � i,�ss,aso � (iza,aas) 9sii 9.9�i is.i�i zo.9ai zo.9ai 159 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 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 2016 2018 2,686,813 3,931,498 7,783 2,679,030 3,931,498 68.14 10.89220 Source: Dubuque County Assessor's and Auditor's Offices 160 CITY OF DUBUQUE,IOWA PROPERTY TAX RATES TABLE6 DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS TAX RATES PER$1,000 ASSESSED VALUE Dubuque Boardof Ratioof Levy Fiscal Dubuque School Education and Area 1 Dubuque Dubuque Year Year City District Independents Voc.Tech County Total City W Total 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 6.43124 3432049 31.42 2012 2014 11.02586 14.60281 OJ5274 0.90455 6.43124 33J1720 32J0 2013 2015 11.02588 13.99630 0.66355 0.90807 6.43124 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 2016 2018 10.89220 14.95665 0.62780 1.09993 634143 33.91801 32.11 Sepuate components of the Dubuque City Rate is as follows: Levy Fiscal Public Employee Debt Yeu Yeu General Transit Insurance Benefits Service Total 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 112441 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 2016 2018 8.10000 0.66319 0.15561 1.89350 0.07990 10.89220 Source: Dubuque County Auditor's Office. 161 CITY OF DUBUQUE,IOWA PRINCIPAL PROPERTY TAXPAYERS TABLE 7 CURRENT YEAR AND NINE YEARS AGO (IN THOUSANDS OF DOLLARS) 2018 2009 Percentage of Percentage of Total City Total City Taxa.ble Taxable Taxa.ble Taxable TaYpayer Value Rank Value Value Rank Value Peninsula Gaming Company LLC $ 63,779 1 237 % KennedyMallInc. 38,926 2 1.45 $ 26,372 1 135 % Walter Development LLC 28,270 3 1.05 11,288 6 0.58 Progressive Processing LLC(Hormel) 25,370 4 0.94 GRDT Investments LLC(Queck) 22,379 5 0.83 MAR Holdings LLC(Medical Assoc.) 21,353 6 0.79 19,157 2 0.98 McGraw Hill Global Education LLC 16,225 7 0.60 11,437 5 0.59 Platinum Holdings LLC 15,749 8 0.59 11,179 7 0.57 Nordshom,Ina 14,800 9 0.55 16,884 4 0.87 Fle�teel Indushies Ina 13,332 10 0.50 Lexington Dubuque LLC 9,844 10 0.51 Otto A LLC 17,500 3 0.90 Asbury Dubuque LLC 9,896 9 0.51 Minglewood Limiited PartnersMp 9,948 8 0.51 $ 260,183 9.67 % $ 143,505 736 % Source: Dubuque County Auditor's Office 162 TABLE 8 CITY OF DUBUQUE,IOWA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (IN THOUSANDS OF DOLLARS) Total Percent of Total Tas Ratio of Tas Cmrent Current Delinquent Total Tas Collections Outstanding Delinquent Fiscal Levy Levy Tas Tases Tas Collections W Total Delinquent Tasesto Total Year Year (1) Collections Collected Collections (2) TasLevy Tases TasLevy 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 2018 2017 25,97A 26,026 100.4 1 26,027 100.4 199 0.77 (1)Excludes tas increment levy. (2)Includes tases collected in June by the County but not received by the City until July. 163 CITY OF DUBUQUE RATIOS OF OUTSTANDING DEBT 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 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 2018 48,833,498 19,867,562 255,881 4,067,700 41,979,910 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 164 TABLE9 T}�7e AChVltles Capital Other Total Percentage of Loan Revenue Loans Primary Personal Per Notes Bonds Payable Govemment Income(1) Capita(1) $ 3,914,076 $ 1,434,713 $ 39Q890 $ 71,813,088 32 % $ 1,245 8,289,621 1,115,430 371,978 87,404,922 3.9 1,515 33,195,408 6,777,793 2,252,109 125,292,437 5.1 2,174 61,957,749 6,521,188 331,235 185,767,647 7.1 3,223 75,415,431 6,260,299 309,304 202,218,641 7.8 3,508 82,924,949 14,151,437 286,263 21Q798,058 8.1 3,657 85,477,970 34,543,432 262,055 253,188,631 10.0 4,393 104,156,549 34,196,999 236,623 271,003,845 9.9 4,637 11Q513,944 33,84Q566 5,209,900 273,287,605 10.1 4,648 112,765,210 33,474,133 4,181,826 265,425,720 * 4,555 165 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 Taxable Assessed Assessed Fiscal Obligation Value of Value of Value of Value of Per Yeu Bonds Proper[y Property Proper[y Proper[y Capita 2009 $ 4Q387 $ 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 2018 9Q552 2,686,813 338 3,931,498 231 1,558 *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. 166 '" �O V Q P Vl N Q W G �D fn O� .� Q O � � � � Q Ni N O ul O � o a � N � N o, N Q, � = � o Q Q �n H ri N N � � —Qy' O t� e e fn d � � � 0 0 0 0 � � o m m m w T O R� O O W O O Q Or G � 0 � � � � N N �r u G 0 ti p � aLi °�« °J A o P. � .� �, �«' p �O v 'O � Y � A 'O o m ' � �n �n � �' o m o o � v, A ro � t� rn t� -. m a� t� vi vi ,-. m u�D U a�i � C o R o � � � � — s "° .� -o a � Q � � ��., U w °: � � � o � � � �, �, : y � � � 7 L A p 4. � 9 � � T 0 0 o Li' p �' 'O � � o 0 o p, O F � G m m W V �p A � y y 7 O v�i v�i �n � .� � �i � b b b 0 i�' N � N F-I a y O � m F» E» v O v A.F,�-' s � � � o b0 m m o a� � '� ca F � •� � z � > � .� , L Gq o c�v c�v 9 s p�q � Oz C. � � m � .�. W « '' � �^ y � � � � a.� o y `Q c�+A'O a;, ... ti N N G � o � � � � � � o y ti � R �' `� � b b L' vC m T 9 � � � m m u � O " � F" � � pa° o; o; v� « �' �� 3 . � ,_. ,_. R �.:, v O � y' O ,�' r�i �' c» c» = 9 p bA � p � � � � G m o � o m bp � O � R G a ~ Q o o Q o u '�a � c�i o zi 0 � Ki vi vi � V R '� �.,' ctl bA y �9 � m M M � 7 N � � � � .� ya G Y.R, � o o � �.� C �O ,�' R, z 0 � > > � s � 3 x `��° /� .� y � ,� �, Fy 0 Y3 Y3 '~ v�i L �-+ � � � ? i�i=. R 0 y A � W = '�' m �' v� -O � Ca � .D °� _ .0 N '� ca U �' o�n '� v °� � 'ys, o w d' �i � q o � � _ � p y �, `3 a' o °o U C �O °' y v v°J, A � d' ,G � '� C o v, v, � '� �7 a °�° � v� � V °� en,3 � .� v en � � NF'a d> N pp � � � `�" 5 .� ° � on D O M C7 i�'` � � .� 7 � o. a�'i �� 9, '� Ca W 4'' ,� � �a p, � "O ve � � m m q � � o �` � U U ° � ,a fo °' � �, � R. L > 0 Fh t� U 0. � � ro � .. � D ,L' � '� w V FT" 'O " �y � � ,�a�' 0 u X .. v�i 6' `i' � F �i � '� N � p p 0 '� '� = W � `/� p i-' p C> .� � rJ Q 0 Q Q ,� F F V�l � -�/-i F � y � 167 CITY OF DUBUQUE, IOWA LEGAL DEBT NI.ARGIN INFORMATION LAST TEN FISCAL YEARS (IN THOUSANDS OF DOLLARS) 2009 2010 2011 2012 Debit limit $ 163,621 $ 167,247 $ 174,333 $ 177,668 Total net debt applicabletolimit 76,182 101,152 92,443 142,316 Legal debit margin $ 87,439 $ 66,095 $ 81,890 $ 35,352 Total net debt applicable to the debt limit as a percentage of debt limit 46.56% 60.48% 53.03% 80.10% 168 TABLE 12 2013 2014 2015 2016 2017 2018 $ 181,668 $ 183,621 $ 193,114 $ 196,031 $ 207,174 $ 209,049 143,303 149,923 173,597 165,838 143,800 134,916 $ 38,365 $ 33,698 $ 19,517 $ 30,193 $ 63,374 $ 74,133 78.88% 81.65% 89.89% 84.60% 69.41% 64.54% Legal Debt Margin Calwlation for Fiscal Year 2018 Estimated acbxal value $ 4,180,974,139 Debt limit- 5%of total actual valuation $ 209,048,707 Debt applicable to limit: (Including GO Debt, TIF Debt, and Lease (134,915,711) Obligations Paid from General Fund) Legal debt margin $ 74,132,996 169 CITY OF DUBUQUE,IOWA REVEN[JEDEBT 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) DebtService Principal Interest Total (3) WATER UTILITY 2009 $ 5,391 5,196 $ 195 $ 70 $ 52 $ 122 1.60 2010 5,353 5,153 200 70 182 252 OJ9 2011 5,680 5,316 364 255 238 493 OJ4 2012 6,087 a 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 3,911 489 288 a 779 5.02 2018 8,962 4,989 3,973 505 352 6 857 4.64 STORMW ATER UTII,ITY 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 474 2.84 2012 3,211 1,497 1,714 462 268 730 235 2013 3,194 2,019 1,715 320 309 629 1.87 2014 3,7A0 1,833 1,407 331 311 642 2.19 2015 3,551 2,162 1,389 341 356 697 1.99 2016 3,948 2,140 1,808 352 346 698 2.59 2017 4,27A 2,601 1,624 836 696 a 1,532 1.06 2018 4,486 2,374 2,112 1,529 869 6 2,398 0.88 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 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 3,749 OJ6 2014 1Q083 6,754 3,329 2,603 1,358 3,961 0.84 2015 1Q629 6,950 3,679 2,610 1,435 4,045 0.91 2016 12,237 7,702 4,535 2,652 1,454 4,106 1.10 2017 12,475 6,082 6,393 2,707 1,476 a 4,183 1.53 2018 12,731 6,360 6,371 2,764 1,393 6 4,157 1.53 PARKING BONDS 2009 2,270 1,412 858 250 12 262 327 Parking revenue bonds matured in 2010. a)Restated W reflect actual SRF principal and interest paid in 2018. b)Includes estimated SRF debt service payments for next fiscal year based on cmrent fiscal year ending debt balance. (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. 170 CITY OF DUBUQUE,IOWA WATER AND SEWER RECEIPT HISTORY TABLE 14 LAST TEN FISCAL YEARS Water Sewer Gallons Fiscal Year Revenue Revenue Billed 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 2018 8,525,072 12,015,480 1,632,426,374 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 Steps Gallons 2018 2017 2016 2015 2014 2013 2012 First 22,440 a� $ 0.00488 $ 0.00474 $ 0.00447 $ 0.00406 $ 0.00387 $ 0.00355 $ 0.00309 Next 89,760 � 0.00399 0.00387 0.00365 0.00332 0.00316 0.00290 0.00252 Next 261,800 a� 0.00372 0.00361 0.00340 0.00309 0.00294 0.00270 0.00235 Next 374,000 a� 0.00329 0.00280 0.00301 0.00274 0.00261 0.00239 0.00208 Excess a� 0.00288 0.00280 0.00264 0.00240 0.00229 0.00210 0.00183 171 CITY OF DUBUQUE,IOWA WATER METERS BY RATE CLASS TABLE ls LAST TEN FISCAL YEARS Fiscal Year Residential Commercial Industrial Government Total 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 2018 2Q498 2,019 83 115 22,715 172 TABLE 16 CITY OF DUBUQUE,IOWA LARGEST WATER AND SEWER CUSTOMERS FISCAL YEAR 2018 Percentage of Percentage of Water Total Water Sewer Total Sewer Customer Receipts Rank Receipts Receipts Rank Receipts RousselotInc #155296 $ 389,690 1 4.57 % Hormel Foods Corporation* 177,151 2 2.08 $ 382,917 1 3.19 % Prauie Farms Dairy Inc 121,670 3 1.43 Hormel Foods Corporation* 105,165 4 123 204,702 2 1.70 Krieg Boys 52,827 5 0.62 FinleyHospital 51,540 6 0.60 72,185 4 0.60 Peninsula Gaming Co LLC 48,273 7 0.57 55,486 7 0.46 Alpine Park Community 36,688 8 0.43 73,070 3 0.61 Stonehill Nursing Home 35,880 9 0.42 66,008 6 0.55 Mercy Medical Center 34,534 10 0.41 IADU Table Mound MHP LLC 66,719 5 0.56 Stonehill Nursing Home 66,008 6 0.55 Georgia Pacific 54,858 8 0.46 Yes Companies Exp Fred,LLC 54,189 9 0.45 Grand Harbor Resor&Waterpark 51,997 10 0.43 TotalReceipts 8,525,072 $ 12,015,480 *Same company,separate accounts. Previously combined several accounts under same business,now listed separately. 173 CITY OF DUBUQUE, IOWA SALES TAX INCREMENT BONDS TABLE 1� FISCAL YEAR ENDING JUNE 30,2018 Estimated Second Lien Remaining Sales Tax Senior Lien Remaining Series 2014 Revenues Increment Series 2015A Revenues After NetDebt 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 * 3,654,915 (762,650) 2,892,265 (323,100) 2,569,165 2019 3,490,326 (762,650) 2,727,676 (323,100) 2,404,576 2020 4,287,442 (762,650) 3,524,792 (323,100) 3,201,692 2021 4,779,835 (762,650) 4,017,185 (323,100) 3,694,085 2022 5,278,481 (762,650) 4,515,831 (323,100) 4,192,731 2023 5,783,460 (2,767,650) 3,015,810 (438,100) 2,577,710 2024 6,294,852 (2,771,000) 3,523,852 (1,393,500) 2,130,352 2025 6,958,272 (2,768,969) 4,189,303 (1,400,500) 2,788,803 2026 6,951,603 (2,771,031) 4,180,572 (1,344,250) 2,836,322 2027 6,952,936 (2,768,719) 4,184,217 (1,363,000) 2,821,217 2028 6,947,493 (2,768,394) 4,179,099 (1,365,000) 2,814,099 2029 6,741,650 (2,767,300) 3,974,350 (1,365,000) 2,609,350 2030 6,270,000 (2,768,800) 3,501,200 - 3,501,200 2031 4,590,479 (686,400) 3,904,079 - 3,904,079 2032 2,275,344 - 2,275,344 - 2,275,344 2033 2,310,000 - 2,310,000 - 2,310,000 * Actual receipts. (1)Net of capitalized interest and the debt service reserve fund. (2)Net of capitalized interest. 174 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) 2009 57,686 $ 2,155,437,390 $ 37,365 37 10,697 6.2 % 2010 57,686 2,188,952,956 37,946 37 10,517 6.4 2011 57,637 2,354,759,635 40,855 37 10,467 5.8 2012 57,637 2,453,952,912 42,576 37 10,469 5.2 2013 57,637 2,489,053,845 43,185 39 10,513 4.6 2014 57,637 2,560,293,177 44,421 39 10,578 4.4 2015 57,637 2,645,653,574 45,902 38 10,634 3.7 2016 58,436 2,734,454,184 46,794 38 10,588 3.9 2017 58,799 2,717,101,790 46,210 38 10,556 2.9 2018 58,276 * * 37 10,507 2.2 Data Sources: (1) U.S. Department of Commerce,Bureau of Economic Analysis. (2) Greater Dubuque Development Corporation. (3) Dubuque Community School District (4) Iowa Departxnent of Employment Services as of June 30. * Unavailable at repart date. 175 THIS PAGE IS INTENTIONALLY LEFT BLANI� 176 CITY OF DUBUQUE,IOWA PRINCIPAL EMPLOYERS TABLE 19 CURRENT YEAR AND NINE YEARS AGO 2018 2009 Percentage of Percentage of #of Total City #of Total City Employer Employees Rank Employment(1) Employees Rank Employment(1) Dubuque Community Schools 2,600 1 4.76 % 1,465 2 2.82 % JohnDeere (2) 2,000 2 3.66 1,955 1 3.76 Mercy Medical Center 1,360 3 2.49 952 4 1.83 Medical Associates 1,050 4 1.92 826 6 1.59 Unity Point Health-Finley Hospital 1,000 5 1.83 900 5 1.73 City of Dubuque 820 6 1.50 750 7 1.44 Andersen Windows 750 7 137 657 8 126 Cottingham &Butler 650 8 1.19 Sedgwick 550 9 1.01 Dubuque Bank&Trust and Heartland Financial USA, 530 10 0.97 IBM 1,300 3 2.50 Prudential Retirement 590 9 1.13 Dubuque Racing Association 525 10 1.01 11,310 20.71 % 9,920 19.08 % 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. 177 CITY OF DUBUQUE,IOWA FULL-TIME EQUIVALENT CITY GOVERND�IENT EMPLOYEES BY FUNCTION/DEPARTMENT LAST TEN FISCAL YEARS Full-Time 2009 2010 2011 2012 Public Safety Emergency Communications 13.00 13.00 13.00 13.00 Fire 90.00 90.00 90.00 90.00 Police 108.67 110.84 11334 11425 Building Services 8.00 8.00 9.00 9.00 Public Works Public Works 88.00 87.42 87.42 87.42 Engineering 26.00 26.00 27.00 27.00 Health&Social Services Health Services 4.00 4.00 4.00 4.00 Human Rights 3.00 3.00 3.00 4.00 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 22.51 22.50 23.50 Recreation 7.93 8.43 8.93 9.93 Community&Economic Development Community/Economic Dev 3.00 3.00 3.00 3.00 Housing Services 22.00 22.00 2225 23.00 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 13.50 15.00 15.00 14.00 Finance 14.00 14.00 14.00 14.00 Legal 4.00 4.66 5.00 5.00 Information Services 7.00 7.00 7.00 7.00 Business Type Water 23.00 24.00 25.00 25.00 Water&Resource Recovery Center 18.00 18.00 18.00 18.00 Parking 7.50 9.00 9.00 9.00 Transit 7.00 6.00 7.00 6.00 Total 532.67 539.01 546.59 54925 Source: City Budget Records Departments with employees who ue allocated to more trtan one function ue reflected in the uea with lugest number of employees. 178 TABLE 20 Equivalent as of June 30 2013 2014 2015 2016 2017 2018 13.00 13.00 13.00 13.00 14.00 14.00 90.00 90.00 90.00 90.00 90.00 90.00 115.00 115.0 8 115.8 8 116.00 116.00 116.00 9.00 924 11.66 12.00 12.00 12.00 86.17 86.42 86.42 86.42 86.42 86.42 29.00 29.00 29.00 30.00 30.00 26.06 4.00 4.00 4.00 4.00 4.00 4.00 5.00 5.00 5.00 5.00 5.00 5.00 0.15 0.15 0.15 0.15 0.15 0.15 19.00 19.00 19.00 19.00 19.00 19.00 23.50 23.50 23.50 23.50 22.50 22.50 9.93 9.93 10.93 11.93 11.93 11.93 3.00 4.00 4.00 2.00 2.00 3.00 25.80 27.00 26.00 21.00 25.00 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 15.00 15.00 16.00 16.00 16.00 17.00 14.00 14.0 8 14.8 8 15.00 15.00 15.00 5.00 5.00 5.00 5.00 5.00 4.00 7.50 8.00 8.00 8.00 8.00 8.00 25.00 26.00 26.00 25.00 25.00 25.00 18.00 18.00 18.00 17.00 17.00 17.00 9.00 9.00 9.00 9.00 8.00 7.00 6.00 632 8.00 13.00 13.00 14.00 557.05 561.72 568.42 567.00 570.00 567.06 179 CITY OF DUBUQUE,IOWA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Fiscal- 2009 2010 2011 2012 Public Safety Police Physical arrests 6,325 6,365 6,350 6,319 Traffic violations 8,801 8,901 12,289 11,836 Parking violations 36,457 37,056 35,799 34,910 Fire Number of calls answered 4,480 4,557 4,884 5,307 Inspectionsconducted 443 1,035 555 589 Sewer Sewage system Daily average treahnent in gallons 7,981,000 9,068,000 8,132,000 7,817,000 Maximum daily capacity of treahnentplant in gallons 21,131,000 21,131,000 23,24Q000 23,24Q000 Water systems Daily average consumption in gallons 7,845,000 7,684,000 7,636,000 7,226,000 Maximum daily capacity of plant in gallons 18,OOQ000 18,OOQ000 18,OOQ000 18,OOQ000 Refuse(Municipal Collection) Tonnage 10,774 1 Q615 1 Q660 11,180 Sources: Various City Departments. Statistics updated for fiscal year 2017 180 TABLE21 Year 2013 2014 2015 2016 2017 2018 6,106 5,532 3,767 3,397 3,238 3,519 12,089 8,959 7,354 9,058 9,063 9,415 35,516 36,768 37,635 38,880 33,953 32,857 4,792 5,165 5,603 5,750 5,990 5,949 512 471 791 993 1,649 1,675 1Q987,000 7,091,000 7,237,000 7,016,000 7,377,000 7,90Q000 23,24Q000 24,SOQ000 24,SOQ000 24,SOQ000 24,SOQ000 24,SOQ000 6,953,000 7,235,000 6,956,000 7,068,184 7,20Q000 6,917,000 18,OOQ 000 18,00 Q000 18,OOQ 000 18,OOQ 000 18,00 Q000 18,OOQ 000 1 Q535 10,311 1 Q690 11,098 11,284 11,481 181 CITY OF DUBUQUE,IOWA CAPITAL ASSETS BY FUNCTION LAST TEN FISCAL YEARS Fiscal- 2009 2010 2011 2012 Public safety Police Stations 1 1 1 1 Patrol units 19 22 22 22 Fire Stations 6 6 6 6 Aerial trucks 3 3 3 3 Public works Streets Miles(1) 320 321 325 328 Street lights(1) 1,877 1,916 1,931 2,081 Health and social services Hospital 2 2 2 2 Number of patient beds 405 389 389 389 Cultural and recreation Library 1 1 1 1 Golf 1 1 1 1 Parks 47 48 48 51 Acreage 898 901 901 1,001 Recreation Civic center 1 1 1 1 Swimming pools 2 2 2 2 Softball fields 7 7 7 7 Baseball fields 1 1 1 1 Tennis courts 20 20 20 20 Sewer Sewage system Miles of sanitary sewer(1) 295 300 300 304 Miles of storm sewers(1) 143 144 150 155 Number of treatmentplants 1 1 1 1 Number of service connectors 21,347 21,599 21,702 22,393 Water systems Miles of water mains 317 318 319 320 Number of service connectors 21,347 21,986 22,092 22,161 Number of city owned fue hydrants 2,831 2,843 2,854 2,863 Sources: Various City Deparhnents. (1) City GIS System 182 TABLE 22 Year 2013 2014 2015 2016 2017 2018 1 1 1 1 1 1 22 22 22 22 22 22 6 6 6 6 6 6 3 3 3 3 3 3 329 331 333 332 336 334 2,084 2,110 2,161 2,162 2,184 2,312 2 2 2 2 2 2 389 389 373 373 373 373 1 1 1 1 1 1 1 1 1 1 1 1 51 51 53 53 53 53 1,001 1,001 974 974 974 974 1 1 1 1 1 1 2 2 2 2 2 2 7 7 11 11 11 11 1 1 1 1 1 1 20 20 20 20 20 20 304 307 320 322 326 321 141 144 145 147 152 156 1 1 1 1 1 1 22,428 22,888 22,928 23,119 23,343 23,423 321 315 318 329 337 370 22,536 22,702 22,787 22,970 23,443 23,546 2,879 2,336 2,346 2,380 2,450 2,973 183 CITY OF DUBUQUE, IOWA RETAIL SALES TABLE 23 LAST TEN CALENDAR YEARS Taxable Number of Year Retail Sales Businesses 2009 $ 961,287,890 2,026 2010 971,050,048 2,043 2011 1,014,284,468 2,009 2012 1,060,222,499 1,993 2013 1,057,837,212 2,008 2014 1,240,664,593 3,337 2015 1,305,893,119 3,347 2016 1,316,561,626 2,997 2017 1,324,993,666 2,971 2018 * * Data Sources: Iowa Department of Revenue * Unavailable at report date 184 Compliance Section June 30, 2018 City of Dubuque, Iowa 185 THIS PAGE IS INTENTIONALLY LEFT BLANI� 186 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, 2018, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated December 11, 2018. 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. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of perfornung their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combinarion of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness,yet impartant enough to merit attention by those charged with governance. What inspires you,inspires us. eidebailly.mm 187 1545 Aswciates Dr.,Ste. 101 Dubuque,IA 52002-2299 T 563556.V90 F 5 63 55 77842 EOE Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 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 questions costs. Comments involving statutory and other legal matters about the City's operations for the year ended June 30,2018 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 findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The City's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly,we express no opinion on them. 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 Dubuque, Iowa December 11,2018 188 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, 2018. 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. What inspires you,inspires us. eidebailly.mm 189 1545 Aswciates Dr.,Ste. 101 Dubuque,IA 52002-2299 T 563556.V90 F 5 63 55 77842 EOE Opinion on Each Major Federal Program In our opinion,the City complied, in all material respects,with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs for the year ended June 30, 2018. 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 a 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. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 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 Dubuque, Iowa December 11, 2018 190 City of Dubuque, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2018 Pass-[hrough Federal Entiry Amounfs Passed- Federal GranWr/Pass-Through CFDA Identifying Through W GranWr/PrograrnorClusterTiHe Number Number EYpenditures Subrecipients U.S.Department of Commerce Directprogram: Economic Development Cluster EconomicAdjustrnentAssistance 11307 $ 90990 $ U.S.Deoartment ofHousine and Urban Develooment Directprogram: CDBG-Entitlement Grants Cluster: Communiry DevelopmentBlock Grants/Entitlement Grants-2015 14.218 523,792 112,032 Communiry DevelopmentBlock Grants/Entitlement Grants-2016 14.218 953,544 - Communiry DevelopmentBlock Grants/Entitlement Granfs-2016 Lump Sum 14.218 169 312 Tohel CDBG-Entitlement Grants Cluster 1 646 648 112 032 Directprogram: Continuum of Care Prograrn 14.267 78 691 Pass-[hrough prograrn from: Iowa Economic Development Autlioriry CDBG-Disaster Ruovery Grants-Pub.L.No.113-2 Cluster NationalDisasterResilienceCompetition 14.272 B-13-DS-19-001 5170862 Directprogram: Sution 8 ProjecbBased Cluster Lower Income Housing Assistance Prograrn- Sution 8 Moderate Rehabilitation 14.856 77 362 Housing Voucher Cluster Sution 8 Housing Choice Vouchers-IA08N 14.871 5,261,247 - Sution 8 Housing Choice Vouchers-IA087FSH 14.871 132 996 Tohel Housing Voucher Cluster 5 394 243 Lead-Based Paint Hazard Control in Privately-Owned Housing 14.900 1 075 488 Total U.S.Departrnent ofHousing and Urban Development 13 443 2J4 112 032 U.S.Department of Justice Pass-[hrough prograrn from: Iowa Department of Justice: ViolenceAgainstWomenFo�rnulaGrants 16.588 VW-18-42B-CJ 3113 Public Safery Parfnership and Communiry PolicingGrants 16J10 14-CAMP-04 6775 Pass-[hrough prograrn from: Dubuque Counry SheriR's Office: Fdward Byrne Memorial Justice AssistanceGrantProgram 16J38 15-JAG-195887 26664 26,66 V Tohel U.S.Departrnent of Justice 36 552 191 City of Dubuque, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2018 Pass-[hrough Federal Entiry Amounts Passed- Federal GranWr/Pass-Through CFDA Identifying Through W GranWr/ProgramorClusterTitle Number Number Expenditures Subrecipients U.S.Department of Transportation Directprogram: AiiportImprovementPrograrn-SnowEquipment 20.106 $ 5,157 $ - AirportImprovementProgram-LandsidePaving 20.106 149,042 AirportImprovementProgram-Te�minalServiceRoad 20.106 722,209 AiiportImprovementProgram-OverheadLighting 20.106 22,032 - AiiportImprovementPrograrn-BoardingBridge 20.106 11,941 AiiportImprovementProgram-PavementSh�dy 20.106 39136 J49 517 Highway Planning and Construction Cluster: Pass-[hrough prograrn from: Iowa Departrnent of Transportatio¢ Highway Planning and Construction 20.205 HDP-2100-(679)J131 31Q555 - Highway Planning and Construction 20.205 STP-U-2100(634)J031 1,087,744 - Highway Planning and Construction 20.205 HDP-2100-(664)J131 2,193,865 - Highway Planning and Construction 20.205 S1P-A-2100(689)-8631 188,105 - Highway Planning and Construction 20.205 EDP-2100-(684)JY31 42 616 Total Highway Planning and Construction Cluster 3 822 885 Federal Transit Cluster: Directprogram: Federal TransiL Fo�rnula Grants 20.507 977,998 - Federal TransiL Fo�rnula Grants 20.507 316795 1 794 793 Directprogram: State of Good Repair Grants Program 20.525 IA-2018-002-00 1,451,807 - State of Good Repair Grants Program 20.525 IA-95-X021-00 115 068 1 566 875 Total Federal Transit Cluster 2 861 668 Pass-[hrough prograrn from: Iowa Department of Transportatio¢ Fo�rnula Grants for Rural Areas 20.509 ICB-CY17 7 500 Transit Services Prograrn Cluster: Enhanced Mobiliry of Seniors and Individuals with Disabilities 20.513 IA-2016-026-210-17 43 970 Highway Safery Cluster Iowa Departrnent of Public Safery: State and Communiry Highway Safery 20.600 PAP 17-402-MOOP 2,162 - State and Communiry Highway Safery 20.600 PAP 18-402-MOOP 25 861 Total Highway Safery Cluster 28 023 Total U.S.Department of Transportation 7 713 563 192 City of Dubuque, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2018 Pass-[hrough Federal Entiry AmountsPassed- Federal GranWr/Pass-Through CFDA Identifying Through W GranWr/PrograrnorClusterTitle Number Number Expenditures Subrecipients Environmental Protection Aeenw Directprograrn: Brownfields Training Research,and Technical Assistance Grants and CooperativeAgreements 66.814 $ 35 585 $ Brownsfields Assessment and Cleanup Cooperative Agreements-BF97741401 66.818 10,790 Brownsfields Assessment and Cleanup Cooperative Agreements-BF97756201 66.818 48 343 59 133 Total Environmental Protection Agency J4 718 Comoration for National and Communitv Service Pass-[hrough prograrn from: Iowa Commission on Volunteers: AmeriCoips 94.006 16-AC-14 22,999 - AmeriCoips 94.006 17-AC-10 156,934 AmeriCoips 94.006 17-AF-OS 14 004 Total Coiporation for National and Communiry Service 193 937 U.S.Deoartment ofHomeland SecuriN/ Pass-[hrough prograrn from: Iowa Departrnent of Homeland Securiry Disaster Grants-Public Assistance 97.036 DR-4334-IA 79 6{9 Total $ 21 602 703 $ 112 032 193 City of Dubuque, Iowa Notes to the Schedule of Expenditures of Federal Awards Year Ended June 30, 2018 Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awards (the schedule)includes the federal award activity of the City of Dubuque, Iowa, (the City)under programs of the federal government far the year ended June 30, 2018. The inforxnation is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrafive Requirements, Cost Principles, andAuditRequirements for FederalAwards(Uniform Guidance). Because the schedule presents only a selected portion of the operarions of the City, it is not intended to and does not present the financial position, changes in net position, fund balance, or cash flows of the City. Note 2 - Significant Accounting Policies Expenditures reported in the schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Note 3 - Indirect Cost Rate The City has not elected to use the 10%de minimis cost rate. 194 City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2018 Part I: Summary of the Independent Auditor's Results: FINANCIAL STATEMENTS Type of auditor's report issued Unmodified Internal control over financial reporting: Material weaknesses identified No 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 None reported Type of auditor's report issued on compliance for major programs: Unmodified Any audit findings disclosed that are requued to be reported in accordance with Uniform Guidance 2 CFR 200.516: No Identification of major programs: Name of Federal ProQram CFDA Number National Disaster Resilience Competition 14272 Highway Planning and Construction Cluster: Highway Planning and Construction 20205 Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee? No 195 City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2018 Part II: Findings related to Financial Statements There were no findings to report. Part III: Findings and Questioned Costs for Federal Awards: There were no findings and questioned costs to report. Part IV: Other Findings Related to Required Statutory Reporting: 2018-IA-A Certified Budget—Disbursements during the year ended June 30, 2018 exceeded the amount budgeted in the community and economic development function. 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. 2018-IA-B Questionable Expenditures—We noted no expenditures that we believe may not meet the requirements of public purpose as defined in an Attorney General's opinion dated April 25, 1979. 2018-IA-C Travel Expense—No expenditures of City money far travel expenses of spouses of City officials or employees were noted. 2018-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 Riley Fairchild, City employee, spouse is owner of Fairchild Business Coaching Services $ 10,489 JeffZasada, City employee, wife is Shelia Zasada Services 260 In accordance with Chapter 3625(3)(j)of the Code of Iowa, the transacrion with Shelia Zasada does not appear to represent conflict of interest since the total transaction was less than $1,500 during the fiscal year. The transactions with Fairchild Business Coaching may represent a conflict of interest since they were not entered into through comperirive bidding in accordance with Chapter 3625(3)(d) of the Code of Iowa. 196 City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2018 2018-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. 2018-IA-F Council Minutes—No transactions were found that we believe should have been approved in the Council minutes but were not. 2018-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. 2018-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. 2018-IA-I Annual Urban Renewal Report—The annual urban renewal report was properly approved and certified to the Iowa Department of Management on or before December 1. However, the following reporting exception was noted: The City did not include debts related to the English Ridge TIF District. Recommendation —The City should implement additional preparation and review procedures relating to the Annual Urban Renewal Report. Response -The Finance and Economic Development prepared the State Annual Urban Report for fiscal year ended June 30, 2018. The English Ridge TIF District was a new district that had not yet received any revenues or paid any expenses, and therefore was inadvertently missed. New procedures and crosschecks have been put in place to correctly report outstanding debts related to TIF districts. 2018-IA-J Tax Increment Financing—Chapter 403.19 of the Code of Iowa provides a municipality shall certify indebtedness to the County Auditor. While performing our audit procedures, we noted an instance which was certified inaccurately. Recommendation —The City should implement additional preparation and review procedures relaring to the annual TIF Debt Certificarion to the County. Response—The City idenrified and corrected the misreparted debt amounts on City TIF Form 3 of the County TIF Certification Form that was filed December 1, 2018. The TIF form is prepared from source documentation including general ledger reparts, TIF Development Agreements and TIF amortization schedules. The City will continue to monitor source documents to prevent future errors. 2018-IA-K 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. 2018-IA-L 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. 197 EideBailly cr�a eusixEss nunw�s December 11, 2018 To the Honorable Mayor and Members of the City Council City of Dubuque, Iowa We have audited the financial statements of the City of Dubuque, Iowa (City)as of and far the year ended June 30, 2018, and have issued our report thereon dated December 11, 2018. We did not audit the financial statements of Dubuque Initiarives and Subsidiaries (presented as a discretely presented component unit). Those financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for Dubuque Initiative and Subsidiary is based solely on the reports of the other auditors. Professional standards require that we advise you of the following matters relaring to our audit. Our ResponsibiliTy in Relation to the Financial Statement Audit under Generally Accepted Auditing Standards and GovernmentAuditingStandards and our Compliance Audit under the Uniform Guidance As communicated in our letter dated May 17, 2018, our responsibility, as described by professional standards, is to forxn and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America and to express an opinion on whether the City complied 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. Our audit of the financial statements and major program compliance does not relieve you or management of its respective responsibilities. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing 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 over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely far the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. Our responsibility, as prescribed by professional standards as it relates to the audit of the City's major federal program compliance, 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. An audit of major program compliance includes consideration of internal control over compliance with the types of compliance requirements referred to above as a basis for designing audit procedures that are appropriate in the circumstances 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, as a part of our major program compliance audit, we considered internal control over compliance for these purposes and not to provide any assurance on the effectiveness of the City's internal control over compliance. Whaf inspires you,inspires us. eidebailly.mm 1 1545 Aswciates Dr.,Ste. 101 Dubuque,IA 52002-2299 T 563556.V90 F 5 63 55 77842 EOE We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. We have provided our comments regarding internal controls during our audit in our 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 GavernmentAuditing Standards dated December 11, 2018. We have also provided our comments regarding compliance with the types of compliance requirements referred to above and internal controls over compliance during our audit in our Independent Auditor's Report on Compliance with Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniforxn Guidance dated December 11, 2018. Planned Scope and Timing ofthe Audit We conducted our audit consistent with the planned scope and timing we previously communicated to you. Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firxn, as appropriate, our firxn, and other firxns utilized in the engagement, if applicable, have complied with all relevant ethical requirements regarding independence. Qualitative Aspects of the EntiTy's Significant Accounting Practices SignificantAccounfing Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies used by the City are described in Note 1 to the financial statements. As described in Note 1 and Note 17, the City changed accounting policies related to accounring for OPEB to adopt the provisions of GASB Statement No. 75,Accounting and Financial Reporfing for Other Postemplayment Benefits Other Than Pensions(OPEB). Accordingly, the accounring change has been retrospecrively applied to the financial statements beginning July 1, 2017. No matters have come to our attention that would require us, under professional standards, to inform you about(1)the methods used to account for significant unusual transactions and(2)the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. SignificantAccounfing Esfimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from managemenYs current judgments. The most sensitive accounting esrimates affecring the financial statements are health insurance and worker's compensation liabilities, total OPEB liability, and net pension liability. Management's estimate of incurred but not reported health insurance and workers' compensation liabilities are based on third-party administrator's calculations and estimates. We evaluated the key factors and assumptions used to develop incurred but not reported liabilities in deterxnining that they are reasonable in relation to the financial statements taken as a whole. 2 Management's estimate of total OPEB liability, related deferred outflows of resources, and OPEB expense are based on a calculation of actuarially deterxnined contributions for health insurance benefits. We evaluated they key factors and assumptions used to develop other postemployment benefits liability in determining that it is reasonable in relation to the financial statements taken as a whole. ManagemenYs estimates of the net pension liability, pension related deferred outflows of resources and deferred inflows of resources, and pension expense are based on plan level actuarial reports, allocated to the City using annual employer contributions. We evaluated the key factors and assumptions used to develop the pension related balances in deterxnining that they are reasonable in relation to the financial statements taken as a whole. Financial Statement Disclosures Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City's financial statements relate to net pension liability and total OPEB liability. Significant Difficulties Encountered during the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit. Uncorrected and Corrected Misstatements For purposes of this communication, professional standards require us to accumulate all known and likely misstatements idenrified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole. There were no uncorrected financial misstatements identified. The following misstatements, none of which are considered material, that we identified as a result of our audit procedures were brought to the attention of, and corrected by, management: Equity Increase(Decrease) Governmenta U Fund Business-type Statements Activities Water Utility fund To capitalize machinery $ 44,149 $ 44,149 Section VIII Housing(nonmajor fund) To decrease intergovernmental revenue and community and economic development expense by $42,828 - - Street Construction Fund(nonxnajor fund) To increase accounts payable (51,477) (51,47'� 3 Disagreements with Management For pmposes ofthis letter, professional standards define a disagreementwith management as a matter,whether or notresolved W our satisfactioq conceming a financial accounting, reporting, or auditing matter,which could be significant W the financial statements or the audiWr's report.No such disagreements arose during the course ofthe audit. Representations Requested from Management We have requested certain written representations from managementthat are included in the management representation letter dated December 11, 2018. ManagemenNs Consultations with Other Accountants In some cases, management may decide W consultwith other accountants about auditing and accounting matters. Management infortned us that, and W our Imowledge, there were no consultations with other accountants regarding auditing and accounting matters. Othu Significant Matters, NSndings, or Issues In the normal course of our professional association with the City,we generally discuss a variety ofmatters, including the application of accounting principles and auditing standards, business conditions affecting the entity, and business plans and strategies that may affect tlie risks of material misstatement.None of the matters discussed resulted in a condition W our retention as the City's audiWrs. Modification of the Audit Report We have made the following modification W our audiWr's report Emphasis of Matter As discussed in Notes 1 and 17 W the financial statements, the City has adopted the provisions of GASB Statement No. 75,Accountlng ond Finonciol Reporfing for Other Posfemployment Berrefits OfherThon Pensions, which has resulted in a restatement of the netposition as of July 1, 2017. Our opinions are not modifiedwith respect W this matter. This report is intended solely for the infortnation and use of the Mayor, City Council, and management ofthe City of Dubuque, Iowa, and is not intended to be and should not be used by anyone other[han[hese specified parties. Sincerely, EIDE BAILLY LLP �� Dubuque, Iowa 4 Compliance Section June 30, 2018 City of Dubuque, lowa EideBailly eidebailly.com 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, 2018, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated December 11, 2018. 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. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of perfornung their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combinarion of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness,yet impartant enough to merit attention by those charged with governance. What inspires you,inspires us. eidebailly.mm 1545 Aswciates Dr.,Ste. 101 Dubuque,IA 52002-2299 T 563556.V90 F 5 63 55 77842 EOE Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 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 questions costs. Comments involving statutory and other legal matters about the City's operations for the year ended June 30,2018 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 findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The City's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly,we express no opinion on them. 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 Dubuque, Iowa December 11, 2018 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, 2018. 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. What inspires you,inspires us. eidebailly.mm 1545 Aswciates Dr.,Ste. 101 Dubuque,IA 52002-2299 T 563556.V90 F 5 63 55 77842 EOE Opinion on Each Major Federal Program In our opinion,the City complied, in all material respects,with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs for the year ended June 30, 2018. 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 a 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. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 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 Dubuque, Iowa December 11, 2018 City of Dubuque, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2018 Pass-[hrough Federal Entiry Amounfs Passed- Federal GranWr/Pass-Through CFDA Identifying Through W GranWr/Prop'arnorClusterTiHe Number Number EYpenditures Subrecipients U.S.Department of Commerce Directprogram: Economic Development Cluster EconomicAdjustrnentAssistance 11307 $ 90990 $ U.S.Deoartment ofHousine and Urban Develooment Directprogram: CDBG-Entitlement Grants Cluster: Communiry DevelopmentBlock Grants/Entitlement Grants-2015 14.218 523,792 112,032 Communiry DevelopmentBlock Grants/Entitlement Grants-2016 14.218 953,544 - Communiry DevelopmentBlock Grants/Entitlement Granfs-2016 Lump Sum 14.218 169 312 Tohel CDBG-Entitlement Grants Cluster 1 646 648 112 032 Directprogram: Continuum of Care Prograrn 14.267 78 691 Pass-[hrough prograrn from: Iowa Economic Development Autlioriry CDBG-Disaster Ruovery Grants-Pub.L.No.113-2 Cluster NationalDisasterResilienceCompetition 14.272 B-13-DS-19-001 5170862 Directprogram: Sution 8 ProjecbBased Cluster Lower Income Housing Assistance Prograrn- Sution 8 Moderate Rehabilitation 14.856 77 362 Housing Voucher Cluster Sution 8 Housing Choice Vouchers-IA08N 14.871 5,261,247 - Sution 8 Housing Choice Vouchers-IA087FSH 14.871 132 996 Tohel Housing Voucher Cluster 5 394 243 Lead-Based Paint Hazard Control in Privately-Owned Housing 14.900 1 075 488 Tohel U.S.Departrnent ofHousing and Urban Development 13 443 2J4 112 032 U.S.Department of Justice Pass-[hrough prograrn from: Iowa Department of Justice: ViolenceAgainstWomenFo�rnulaGrants 16.588 VW-18-42B-CJ 3113 Public Safery Parfnership and Communiry PolicingGrants 16J10 14-CAMP-04 6775 Pass-[hrough prograrn from: Dubuque Counry SheriR's Office: Fdward Byrne Memorial Justice AssistanceGrantProgram 16J38 15-JAG-195887 26664 26,664 Tohel U.S.Departrnent of Justice 36 552 City of Dubuque, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2018 Pass-[hrough Federal Entiry Amounts Passed- Federal GranWr/Pass-Through CFDA Identifying Through W GranWr/Prop'amorClusterTitle Number Number Expenditures Subrecipients U.S.Department of Transportation Directprogram: AiiportImprovementPrograrn-SnowEquipment 20.106 $ 5,157 $ - AiiportImprovementProgram-LandsidePaving 20.106 149,042 AiiportImprovementProgram-Te�minalServiceRoad 20.106 722,209 AiiportImprovementProgram-OverheadLighting 20.106 22,032 - AiiportImprovementPrograrn-BoardingBridge 20.106 11,941 AiiportImprovementProgram-PavementSh�dy 20.106 39136 J49 517 Highway Planning and Construction Cluster: Pass-[hrough prograrn from: Iowa Departrnent of Transportatio¢ Highway Planning and Construction 20.205 HDP-2100-(679)J131 31Q555 - Highway Planning and Construction 20.205 STP-U-2100(634)J031 1,087,744 - Highway Planning and Construction 20.205 HDP-2100-(664)J131 2,193,865 - Highway Planning and Construction 20.205 S1P-A-2100(689)-8631 188,105 - Highway Planning and Construction 20.205 EDP-2100-(684)JY31 42 616 Total Highway Planning and Construction Cluster 3 822 885 Federal Transit Cluster: Directprogram: Federal TransiL Fo�rnula Grants 20.507 977,998 - Federal TransiL Fo�rnula Grants 20.507 316795 1 794 793 Directprogram: State of Good Repair Grants Program 20.525 IA-2018-002-00 1,451,807 - State of Good Repair Grants Program 20.525 IA-95-X021-00 115 068 1 566 875 Total Federal Transit Cluster 2 861 668 Pass-[hrough prograrn from: Iowa Department of Transportatio¢ Fo�rnula Grants for Rural Areas 20.509 ICB-CY17 7 500 Transit Services Prograrn Cluster: Enhanced Mobiliry of Seniors and Individuals with Disabilities 20.513 IA-2016-026-210-17 43 970 Highway Safery Cluster Iowa Departrnent of Public Safery: State and Communiry Highway Safery 20.600 PAP 17-402-MOOP 2,162 - State and Communiry Highway Safery 20.600 PAP 18-402-MOOP 25 861 Total Highway Safery Cluster 28 023 Tohel U.S.Department of Transportation 7 713 563 City of Dubuque, Iowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2018 Pass-[hrough Federal Entiry AmountsPassed- Federal GranWr/Pass-Through CFDA Identifying Through W GranWr/PrograrnorClusterTitle Number Number Expenditures Subrecipients Environmental Protection Aeenw Directprograrn: Brownfields Training Research,and Technical Assistance Grants and CooperativeAgreements 66.814 $ 35 585 $ Brownsfields Assessment and Cleanup Cooperative Agreements-BF97741401 66.818 10,790 Brownsfields Assessment and Cleanup Cooperative Agreements-BF97756201 66.818 48 343 59 133 Total Environmental Protection Agency J4 718 Comoration for National and Communitv Service Pass-[hrough prograrn from: Iowa Commission on Volunteers: AmeriCoips 94.006 16-AC-14 22,999 - AmeriCoips 94.006 17-AC-10 156,934 AmeriCoips 94.006 17-AF-OS 14 004 Total Coiporation for National and Communiry Service 193 937 U.S.Deoartment ofHomeland SecuriN/ Pass-[hrough prograrn from: Iowa Departrnent of Homeland Securiry Disaster Grants-Public Assistance 97.036 DR-4334-IA 79 6{9 Total $ 21 602 703 $ 112 032 City of Dubuque, Iowa Notes to the Schedule of Expenditures of Federal Awards Year Ended June 30, 2018 Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awards (the schedule)includes the federal award activity of the City of Dubuque, Iowa, (the City)under programs of the federal government far the year ended June 30, 2018. The inforxnation is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrafive Requirements, Cost Principles, and AuditRequirements for FederalAwards(Uniform Guidance). Because the schedule presents only a selected portion of the operarions of the City, it is not intended to and does not present the financial position, changes in net position, fund balance, or cash flows of the City. Note 2 - Significant Accounting Policies Expenditures reported in the schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Note 3 - Indirect Cost Rate The City has not elected to use the 10%de minimis cost rate. City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2018 Part I: Summary of the Independent Auditor's Results: FINANCIAL STATEMENTS Type of auditor's report issued Unmodified Internal control over financial reporting: Material weaknesses identified No 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 None reported Type of auditor's report issued on compliance for major programs: Unmodified Any audit findings disclosed that are requued to be reported in accordance with Uniform Guidance 2 CFR 200.516: No Identification of major programs: Name of Federal Proeram CFDA Number National Disaster Resilience Competition 14272 Highway Planning and Construction Cluster: Highway Planning and Construction 20205 Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee? No City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2018 Part II: Findings related to Financial Statements There were no findings to report. Part III: Findings and Questioned Costs for Federal Awards: There were no findings and questioned costs to report. Part IV: Other Findings Related to Required Statutory Reporting: 2018-IA-A Certified Budget—Disbursements during the year ended June 30, 2018 exceeded the amount budgeted in the community and economic development function. 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. 2018-IA-B Questionable Expenditures—We noted no expenditures that we believe may not meet the requirements of public purpose as defined in an Attorney General's opinion dated April 25, 1979. 2018-IA-C Travel Expense—No expenditures of City money far travel expenses of spouses of City officials or employees were noted. 2018-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 Riley Fairchild, City employee, spouse is owner of Fairchild Business Coaching Services $ 10,489 JeffZasada, City employee, wife is Shelia Zasada Services 260 In accordance with Chapter 3625(3)(j)of the Code of Iowa, the transacrion with Shelia Zasada does not appear to represent conflict of interest since the total transaction was less than $1,500 during the fiscal year. The transactions with Fairchild Business Coaching may represent a conflict of interest since they were not entered into through comperirive bidding in accordance with Chapter 3625(3)(d) of the Code of Iowa. City of Dubuque, Iowa Schedule of Findings and Questioned Costs Year Ended June 30, 2018 2018-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. 2018-IA-F Council Minutes—No transactions were found that we believe should have been approved in the Council minutes but were not. 2018-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. 2018-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. 2018-IA-I Annual Urban Renewal Report—The annual urban renewal report was properly approved and certified to the Iowa Department of Management on or before December 1. However, the following reporting exception was noted: The City did not include debts related to the English Ridge TIF District. Recommendation —The City should implement additional preparation and review procedures relating to the Annual Urban Renewal Report. Response - The Finance and Economic Development prepared the State Annual Urban Report for fiscal year ended June 30, 2018. The English Ridge TIF District was a new district that had not yet received any revenues or paid any expenses, and therefore was inadvertently missed. New procedures and crosschecks have been put in place to correctly report outstanding debts related to TIF districts. 2018-IA-J Tax Increment Financing—Chapter 403.19 of the Code of Iowa provides a municipality shall certify indebtedness to the County Auditor. While performing our audit procedures, we noted an instance which was certified inaccurately. Recommendation —The City should implement additional preparation and review procedures relaring to the annual TIF Debt Certificarion to the County. Response—The City idenrified and corrected the misreported debt amounts on City TIF Form 3 of the County TIF Certification Form that was filed December 1, 2018. The TIF form is prepared from source documentation including general ledger reports, TIF Development Agreements and TIF amortization schedules. The City will continue to monitor source documents to prevent future errors. 2018-IA-K 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. 2018-IA-L 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. �" � I � � s -� > �f : ^�- , .�' - � - �� , -�� : , ,..-,- + � �a`�'4N >�Gf' yn ♦. � � �-� . � R1,""" >". +k�'yy`� t� �..."�` , n n 4�� ~ i'� 1" y� qr� � � � .�' a _ ,�ei_ r} }, �, t�S:T --_ -7 I �..i ��4 l� . 1 � ��R �* .� 1.'^L.�c � ''%' yi :�� — �� d / nueu � ro� . �`.� 'yy'' �.,R. � ". . —.`�� \' S-'.-�. l, �t � II` i _ �,J.�"''_ . � ;� ��µµ `:'�'.l . �� '.� �- . } AR�j�j,, � � 4 �µ, ' � �M, � �`� � , ��§ b��<� — '� �� , . � 1� �' \ 'y: � ::i� e ♦Qii � �� I_r� � � -•.u� � �� . _ � � � �• �1 r� � � � � ��" _ �� > � . , F., � Y` '� t �I _1' .�' r� I . a . � . � q � ` I � �f r _`;; . . I �. � L ti � � - - �', � W. V :Y/:.'.*f�°1`9�+:a�' � ��`. �;4' : ` � �. --�+ir. ~'�'Y +¢ � � � � � CITY OF DU BUQU E CAFR PRESENTATION TO THE CITY COUNCIL FOR YEAR ENDED JUNE 30, 2018 � �- .� �� I � �� . �~ ' , � � � , � I �� - - i. ,� �;. � � '�,�a u � i. " � � �I . . ` + .� � . ,i, n� . \l h ! . �� n I''" "' _ � .. I 1 � � _ _ . � _ .`� � ^"� . . I ...�IJ � r' .. . � � ' � �� \ _�- . � `'I \ _ '` �w . _ ' _ '__, ! :i ; -� .. _ \ � 11 Y` .1 ..:� i i � j : n � i 1 . e � l � -. ? `1 \ �l � � � � � ��. �� . �1 •. _ „�' .- .e, _ ' .,' , ^' C � �,.. ,,f � _ 1' � ' , r', , 1 Evi� � � r r, , , .� ��_ ��_�� ; �, �� ,,�1-- , � _ � � - _ � � IIIiI�� AUDIT RESULTS EideBailly • Auditors' Opinion on Financial Statements — Unmodified Sometimes referred to as a "clean" audit. This is the highest level of assurance auditors can provide over financial statements. • Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards — no material weaknesses or significant deficiencies noted • Independent Auditors' Report on Compliance for Each Major Federal Program, Report on Internal Control, and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance — no findings 0 GOVERNMENT- - �, J ✓ � WIDESUMMARY � � � � � � � � i S ' 1 .��. .'I� � �i � �` �� '�� _. � . � � � • i } 1 �` ,' � r . i'1 . . � �1., � �- ' �� ,. � ��_ ��r�� v � i� '2 �'-,`+��y � I A..�. . . i! �- �� ' � �f� -�! _�� .ys;�.,, � . * `�%� f/ � ��1s r l� .+ ` f� r�� .`�' i f.i ,'.�t �" '��`` �� • Governmental activities increased the City's net ` i"aN � �'� ` "'�'•'�� %�,. T� position by $9.45M. �fi�'�� =� �� . .. • ,;�, � • Operating and capital grants and contributions �::' - � f�' � °� �� `�� y�� ' �� increased by $960k. ��' � - �� ` � ' �:° " � �' � ' �� 1� , �„ � � �a :+ � � �`-— � , ,-.� �, . . Ii� 111 '-• �a j ;� � �-'k �.T ' /j /, ' ! 1' '— • Health Insurance Reserve Fund saw a � � �� " � " , .°�„�n �� ■ � favorable year with $2.2M positive change in � �,�_�r �� , �� ,;;;�l��. ;� m=� � '� '� ��..�� L-��r ..� �, - net position as compared to a negative change - .� �t F- --- - - ° � in net position from prior year. The City r"'rtx''� " ,�_ changed TPA's this year. . �� -�-._ �� _ , .� ' • Overall revenues increased by $3.9M, while �:- = - r �"—x expenses increased by $2.2M. - - `��pe , =� = _ . �� . . 1� _ ':+{.. � �r'* 'r :.: ' �"r'Y:"�•�' ati7.'+• :� ' �-i�C ` '"y`'r _�'. .R�' -�i'�A+��+�'`.��' �lY�� . . _ ' � . � . �'� .:,1.1 �,.�T... -.,.i. r. ��rr. -�f»u . . :y ♦ '� � }w �.l. . ,I . r � 7 _ 'tf�� •r _., • '.� , �}•• �..� . ��: ; � N+ � �r�f~ •v. •- - r. �J�'1 i 7' �! w � ' ) . 'Y+ +. "�l ti��'-' . �y � G OV E R N M E N T- ��=�� + �� .�, �� .. '�- . � � ��. -4� 4v. . � �j:�. �: r.�r_• ',,�_ �� . � lW- , _r ��M-. "��.1 ?��"'-S�TM�L*\� . �S-� �� _• • _ + ` S. 'l '_.2.�+ �� rt �"r:��` r . �tiY,•=t; W I D E S U M M A RY :��-��:� - �-_.; �- � �, ��_ _ . .�A:�� „Y�t.�:•R-a. . ��.�_�� _',�,^:; ' �� —� Kf. ' �_ry�,� Y �-�.i' . V � ' pr�' �r �,,�ti� .H �y� ` i , }.�,�'�_�`,�1�' �r_ ;�,y _ ��: �r �� • . ��^� . .� ��'- • I ' �r r >' . w • Business-type activities increased the City's net ��' r�' � - " �"��-��:: position by $9.97M � !, � �.a- �`;s�� : \ � - r- * +� , ,. �?+1� - � � ,;.�:� r � • Charges for services increased by $673k. �=_,� .� �r�� _ , .�r . i � �� ---x� � r • Total expenses increased by $417k. '+ i � - �r -�`� ,� , . {�" � :�1 __, • - - Lh ; ':+F"" 1 1 .-- I ' •� � I • Capital grants and contributions saw a decrease ` , . , ,F ,��. ��, Fr! . as the JOTC was completed, along with fewer � ' "� '� �= � dedicated storm & sewer from outside developers. � GENERAL FUND REVENUE The General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Interest, Fines & Gaming, 14% Forfeitures, & Other. 3% ' Charges for Services, ' 20% 3 axes,ssr Intergovernmental, 2% Licenses& Permits, 3% 0 TAX REVENUE 3 YEAR H I STO RY $33,558 $33,381 35,000 $30 881 30,000 I� 25,000 N � � f6 V7 20,000 � � L ~ 15,000 10,000 5,000 2018 2017 2016 2018 2017 2016 ■PropertyTax $21,244 $20,679 $19,484 Franchise Fee $4,833 $4,559 $4,360 LocalOptionSalesTax $4,305 $4,445 $4,578 Hotel/Motel $2,286 $2,822 $1,546 Backfill $844 $856 $896 Pari-Mutuel $36 $20 $17 O GENERAL FUND REVENUE 3 YEAR H I STO RY _$59,703 $59,138 $60,000 57 257 5so,000 N 540,000 0 0 0 c i $30,000 �6 O � $20,000 $10,000 $- 2018 2017 2016 ■Taxes $ 33,558 $ 33,381 $ 30,881 Licenses& Permits $ 1,642 $ 1,506 $ 1,481 Intergovernmental $ 1,204 $ 1,609 $ 1,617 Charges for Services $ 11,310 $ 10,549 $ 10,656 Interest, Fines& Forfeitures, & Other $ 1,909 $ 1,978 $ 2,167 Gaming $ 8,062 $ 8,098 $ 8,440 O GENERAL FUND EXPENDITURES General Government, Community & 11% Economic Development, 6% Public Safety, 50% Culture & RecreaYion, 22% Health & Social Services, 1% Public Works, 10% 0 GENERAL FUND EXPENDITURES THREEYEAR HISTORY 57 584 $58,889 $59,203 560,000 5so,000 � N � $40,000 O C N $30,000 L � p $20,000 $10,000 $� 2018 2017 2016 2018 2017 2016 �PublicSafety $28,569 $29,091 $28,037 Public Works $5,751 $6,351 $8,799 Health &Social Services $844 $858 $1,005 Culture & Recreation $12,482 $12,022 $11,677 Community& Economic Development $3,736 $3,788 $3,757 General Government $6,202 $6,780 $5,928 O COMPARISON OF GENERAL FUND BALANCES N � � � � N L � � � . � 2018-26.38% 2017-21.37% 2016-18.42% ■Annual Expenditures* Unassigned Fund Balance *Annual expenditure figure exclude transfers to other funds � UNFUNDED LEGACY COSTS Retiree Healthcare (OPEB) Liability Pension Liability IPERS/MFPRSI 5�,000 O $6,000 $60,000 O O . � .� $5,000 $50,000 N L � $4,000 $40,000 � _ O � �� : v $3,000 $30,000 _ $2,000 $20,000 $1,000 $10,000 $� 5� 2018 2017 2016 2018 2017 2016 ' • • • • • • • • • ' • • • � ' • � NET INVESTMENT IN CAPITAL ASSETS 4��,�� 350,000 � 300,000 O O O �� 250,000 , N L � Q Z�� 15�� 100,000 50,000 2018 2017 2016 ■GovernmentalActivities ■Business-Typeactivites � ��,` � �� ..,` ,. >. , f =:. �� ,� � < ,} ,� '��:. ., i,� ��, l . 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