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Fiscal Year Ended June 30, 2020 Comprehensive Annual Financial Report (CAFR) Copyrig hted March 1, 2021 City of Dubuque Action Items # 6. City Council Meeting ITEM TITLE: Submission of Fiscal Year Ended June 30, 2020 Comprehensive Annual Financial Report (CAFR) and Auditor's Communication with Those Charged with Governance SUM MARY: City Manager transmitting the Fiscal Year 2020 Comprehensive Annual Financial Report (CAFR) and Auditor's Communication with Those Charged with Governance Letter. City staff will make a presentation. A representative from the City's auditing firm, Eide Bailey LLP, will be available to answer questions. SUGGESTED Receive and File; PresentationSuggested Disposition: DISPOSITION: ATTACHMENTS: Description Type MVM Memo City Manager Memo Staff inemo Staff Memo FY20 Certified Annual Financial Report(CAFR) Supporting Documentation FY20 City AU-C 260 Communication Supporting Documentation FY20 CAFR Presentation Supporting Documentation Dubuque THE CITY OF � ui-Aseria cih DuB E , . � . , � II � Maste iece on tj2e Mississi i zoo�•zoiz•zois YP pp zoi�*zoi9 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Submission of Fiscal Year Ended June 30, 2020 Comprehensive Annual Financial Report (CAFR) and Auditor's Communication with Those Charged with Governance DATE: February 24, 2021 Finance and Budget Director Jennifer Larson is transmitting the Fiscal Year 2020 Comprehensive Annual Financial Report (CAFR) and Auditor's Communication with Those Charged with Governance Letter. The City's independent auditor issued an unmodified opinion on the financial statements. Assistant Finance Director Cassie Ross will make a presentation and then Finance and Budget Director Jennifer Larson and I are available, along with a representative of the auditing firm Eide Bailey LLP, Partner Brian Unsen, to answer questions. I respectfully recommend you receive and file the Fiscal Year 2020 annual audit. v � Mic ael C. Van Milligen MCVM:jh Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Jennifer Larson, Director of Finance and Budget THE CITY OF Dubuque � D�L L All-�mencaCity 1 I Ia I Masterpiece on the Mississippi Zoo,•Zo�2.20,3 TO: Michael C. Van Milligen, City Manager FROM: Jenny Larson, Director of Finance and Budget SUBJECT: Submission of Fiscal Year Ended June 30, 2020 Comprehensive Annual Financial Report (CAFR) and Auditor's Communication with Those Charged with Governance DATE: February 24, 2021 INTRODUCTION The purpose of this memorandum is to submit the Fiscal Year 2020 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 or "clean" 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 provisions of Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award (Uniform Guidance). 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 2020 reports identified above and receives and files this communication and related enclosures. Copies of the financial statements for the Dubuque Metropolitan Area Solid Waste Agency are available in the Finance Department if desired by Council members. Finance will make a brief presentation at the City Council meeting and Brian Unsen, audit partner from Eide Bailly LLC, will be available for any questions. JL/cm Enclosures: Fiscal Year 2020 CAFR Auditor's Communication with Those Charged with Governance Letter Auditor's Compliance letter , COMPREHENSIVE ANNUAL FI NANCIAL REPORT DUBUQUE, IOWA --� w �� I ��; � � f� �� I��', � ., �. �`� :�� s , ''�I' s��_�� ,, . � . .; , .�: . ,��. � . ;�, _ ; •� - ,.. _ , � � � � �u��.� - __ � � + _ � � '�i1I � .-�.� _ � �, I � �� ,-:_�a�= =_ 1 � �.-�--�--� =� �, � �� .r� �� 4 .^v � , �;�� '�' - '' � '� ;.�, � '�, , � , �,► � �� ,Y � �� -�— a�: �`-�.��.� � _ _�� .,. _ ` �� , _ - , - . . �� , - `5 � � � � , �� _ �� - �,�li � � _ a . �� ti� t� t; . � `A , v � �, �,.;� �,, r v. �, ,v,�_ _� ,, �^ ' ` t �� I'r I�� i Y�,Y' � �`�� , d� '�.' — A -`�x ' � � � ' r � �►��.-� � - ` �-zst.�.. ��y�� h J� t � , � , �� ..�i i�.1� - � :ai � .. - .h `.�—-�� _ . '� � � X�`X�'. a � � � T� � � � I� �'�;��• �.�. i �� . � _�1'1'A c � ��.,y+, Y "��—+'t�� - �'� � _ . _ . � , jl�. -`rr't' ' � '��7 � �� '.;^-. ` �,S�S�''.. _ - � /r .Y - �' � y�'� .'>, �� ' �^ ` T`9 +�-}+ - � �. ,r ::� � ,,��-ir, �'I i r '��.'�-r. ��TC� � ��+ti-�Y1'v`_ic� +.�... � �� b � .� 1 � ! ,. . . � µ � � �� " i a �� Dubu ue � � THE CITY OF � � AII�Amerlcaclry �- ' - 3,.�..`-�- � . .. �. ,-� �� F � �: �� r F� �,� , � Masterpiece on the Mississippi Zoi�.zoi9 �- � ___� FISCAL YEAR ENDED JUNE 30, 2020 '----� :� �- _ - %�� YW� ': _ _ .�. ��. - Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2020 City of Dubuque, Iowa Prepared by: Department of Finance THIS PAGE IS INTENTIONALLY LEFT BLANK Introductory Section June 30, 2020 City of Dubuque, Iowa THIS PAGE IS INTENTIONALLY LEFT BLANK CITY OF DUBUQUE,IOWA TABLE OF CONTENTS Exhibit P�e INTRODUCTORY SECTION Table of Contents 1-2 Letter of Transmittal 3-11 City Organizational Chart 13 Officials 14 Certificate of Achievement far Excellence in Financial Reporing 15 FINANCIAL SECTION Independent Auditor's Report 19-21 Management's Discussion and Analysis 23-32 Basic Financial Statements Government-wide Financial Statements Statement of Net Position 1 34-35 Statement of Activities 2 36 Fund Financial Statements Balance Sheet—Governmental Funds 3 38-39 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 3-1 41 Statement of Revenues,Expenditures, and Changes in Fund Balances—Governmental Funds 4 42-43 Reconciliation of the Governmental 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-ll3 Required Supplementary Information Schedule of Receipts,Expenditures,and Changes in Balances—Budget and Actual(Budgetary Basis)—Governmental Funds and Enterprise Funds ll 6 Note to Required Supplementary Information—Budgetary Reporting 117 Schedule of the City's Proportionate Share of Net Pension Liabiliry— Iowa Employees'Retirement System 118 Schedule of City's Contribution—Iowa Employees'Retirement System 119 Notes to Required Supplementary Information— Net Pension Liabiliry IPERS 120 Schedule of the City's Proportionate Share of Net Pension Liabiliry— Municipal Fire and Police Retirement System of Iowa 121 Schedule of City's Contributions—Municipal Fire and Police Retirement System of Iowa 122 Notes to Required Supplementary Information— Net Pension Liability MFPRSI 123 Schedule of Changed in Total OPEB Liabiliry,Realted Ratios and Notes 124 Supplementary Information Combining Fund Statements Combining Balance Sheet—Nonmajor Governmental Funds A-1 128-130 Combining Statement of Revenues,Expenditures,and Changes in Fund Balances—Nonmajar Governmental Funds A-2 132-134 Combining Statement of Net Position—Nonmajor Enterprise Funds B-1 136 Combining Statement of Revenues,Expenses, and Changes in Fund Net Position—Nonmajor Enterprise Funds B-2 137 1 CITY OF DUBUQUE,IOWA TABLE OF CONTENTS FINANCIAL SECTION (continued) Exhibit Page Combining Statement of Cash Flows—Nonmajor Enterprise Funds B-3 138-139 Combining Statement of Net Position—Internal Service Funds C-1 142-143 Combining Statement of Revenues,Expenses, and Changes in Fund Net Position(Deficit)—Internal Service Funds G2 144-145 Combining Statement of Cash Flows—Internal Service Funds C-3 146-147 Combining Statement of Changes in Assets and Liabilities— Agency Funds D-1 150 STATISTICAL SECTION([Jnaudited) Table Page Statistical Section Contents 153 Financial Trends Net Position by Component 1 154-155 Changes in Net Posirion 2 156-159 Fund Balances of Governmental Funds 3 160-161 Changes in Fund Balances of Governmental Funds 4 162-163 Revenue Capacity Taxable and Assessed Value of Property 5 164 Property Tax Rates—Direct and Overlapping Governments 6 165 Principal Property Taxpayers 7 166 Property Tax Levies and Collections 8 167 Debt Capaciry Rarios of Outstanding Debt by Type 9 168-169 Ratios of General Bonded Debt Outstanding 10 170 Direct and Overlapping Governmental Activities Debt 11 171 Legal Debt Margin Information 12 172-173 Revenue Debt Coverage 13 174 Water and Sewer Receipt History 14 175 Water Meters by Rate Class 15 176 Largest Water and Sewer Customers 16 177 Sales Tax Increment Actual Receipts and Cumularive Sales Tax Balance Remaining 17 178 Demographic and Economic Information Demographic and Economic Statistics 18 179 Principal Employers 19 181 Operating Information Full-Time Equivalent City Government Employees by Function/Department 20 182-183 Operating Indicators by Funcrion/Program 21 184-185 Capital Asset Statistics by Function 22 186-187 Retail 23 188 COMPLIANCE SECTION Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 191-192 Independent Auditor's Report on Compliance with Requirements for Each Major Program and on Internal Control Over Compliance Required by The Uniform Guidance 193-194 Schedule of Expenditures of Federal Awards 195-197 Notes to the Schedule of Expenditures of Federal Awards 198 Schedule of Findings and Questioned Costs 199-202 2 Finance Department Dubuque 50 West 13th Street THE CITY OF � Dubuque,Iowa 52001-4805 All•AmericaCit� Office(563)589-4133 ax�u,v.cnr,„�,ci� U� � 1 � �� I Fax(563)690-6689 TTY(563)690-6678 20o��2oi2�2oi3 finance@cityofdubuque.org Masterpiece on the Mississippi 2017*2019 �'�'�'•cityofdubuque.org January 15, 2021 Honorable Mayor, City Council Members, and Citizens of the City of Dubuque: The City of Dubuque, Iowa, pursuant to the requirements set forth by state and federal regulations, hereby submits the Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2020. 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 statements are free of any material misstatements. To the best of our knowledge and belief, the enclosed data is accurate in all material respects, and is reported in a manner designed to present fairly the financial position and results of operations of the various funds and activities of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial operations have been included. The Code of Iowa requires an annual audit by independent certified public accountants or the State Auditor. The accounting firm of Eide Bailly LLP conducted the audit for fiscal year 2020. In addition to meeting the requirements set forth in state statutes, the audit also was designed to meet the requirements of an annual single audit in conformity with the provisions of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administr�ative Requirement, Cost Principals, and Audit Requirements for Federal Awards (Unifarm 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; sanitation services; the construction and maintenance of roads, streets, and infrastructure; inspection and licensing functions; maintenance of grounds and buildings; regional 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 transportation. 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 �nancially accountable. This report includes the Dubuque Metropolitan Area Solid Waste Agency (DMASWA), Dubuque Initiatives and Subsidiaries, and Dubuque Convention and Visitors Bureau as discretely presented component units. A discretely presented component unit is reported in a separate column in the government-wide financial statements to emphasize that it is legally separate from the City of Dubuque and to differentiate its financial position and results of operations from those of the City. The City appoints a voting majority to the DMASWA governing board and operates the landfill. Dubuque Initiatives is organized to render service to the City Council of the City of Dubuque on matters of community interest, and in the event of dissolution, any assets or property of the 3 organization are transferred to the City. Dubuque Convention and Visitors Bureau'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 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 Dubuque Convention and Visitors Bureau 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 (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Dubuque's MD&A can be found immediately following the independent auditor's report. PROFILE OF THE CITY The City of Dubuque, incorporated in 1833, is located on the Mississippi River in northeast Iowa, adjacent to the states of Illinois and Wisconsin. Julien Dubuque, the city's namesake, first began mining lead in the area now known as Dubuque in 1788. Dubuque is the oldest city in Iowa and has a unique combination of the old and new, ranging from a historic downtown, numerous examples of Victorian architecture, and a Civil War era shot tower, to expanding industrial parks, multiple retail centers, revitalized riverfront and millwork districts and two casinos, one with a pari-mutuel dog track. The City of Dubuque has a stable, diversified economic base and is a majar tri-state retail center. The City currently has a land area of 31.6 square miles, and a census 2010 population of 57,637. The U.S. Census Bureau's 2020 population estimate for Dubuque is 57,882. As the largest city in the tri-state area, Dubuque serves as the hub of a trade area with a population estimated at 250,000. As of October 2020, the Ciry's unemployment rate was 3.3%, below the state unemployment rate of 3.6% and the 6.9%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 government 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 mayar 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 government's departments, 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 22% of the total workforce 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. Although COVID-19 has increased unemployment figures, Dubuque had boasted one of the lowest unemployment rates in the United States in January 2020. Local unemployment rates continue to be lower(7%)than statewide(8%) and national (11.1%) figures. 4 Industrial Dubuque Industrial Center West and South (DICW and DICS): Over 550 saleable acres were acquired in 1997, with an additional 163 acres purchased in 2015. The three areas of Dubuque Industrial Center comprise 45 businesses with two of those businesses having arrived in 2019, along with two company expansions. The area continues to have available locations for further investment and job creation. 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 Downtown Development: Over $800 million has been invested in the downtown area in building rehabilitation, new construction, and public improvements where more than 9,000 people work. Over 344 IBM employees work on two renovated floors of the nine-story Roshek Building. Heartland Financial and Cottingham & Butler have partnered to purchase the Roshek Building in order to accommodate their quickly expanding warkfarce. Buildout on portions of several floars of the building will provide office space for an additiona120 Heartland employees in addition to their current 160 at this location. Cottingham & Butler has hired 85 people in the last year in Dubuque, bringing their total employment to 1,050 employees. Historic Millwork District: The Historic Millwork District is saturated with history. It imbues the area with authenticiry and character while offering valuable lessons about the importance of sustainable urban design strategies. Dubuque's Historic Millwork 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, institutions, and businesses prepared to fuel Dubuque's globally competitive and sustainable economy. The District is currently home to multiple eateries, breweries, and shopping venues. To date, nearly $100 million has been invested into the transformation of the Millwork District and it is attracting entrepeneurs, residents, institutions, and businesses that are fueling Dubuque's competitive economy. Dupaco began a $37 million project to renovate the Voices Building in 2019, with plans to complete later this year. The building will become home to the credit union's operations center and include a mix of retail, entertainment and community space. 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 for 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 work to restore the building began. The new owner obtained a demolition permit to deconstruct the unsound section of the structure and plan to stabilize and make immediate repairs to prevent further deterioration. Although a portion of the historic structure will be demolished, there are plans to repair, stabilize, and eventually completely restore the property in the future. The property was rezoned in May 2020 to accommodate an anticipated $30 million mixed-use development providing commercial/retail and residential space. Commercial Development: While COVID-19 slowed commercial construction season beginning in March 2020,building permit revenues still show a strong year for commercial remodels and new development. JoAnn Fabric completed work on a new 30,000 square foot facility. The University of Dubuque constructed a new student clinic, welcome center and outdoor space known as Wallace Commons. Hormel completed renovations to add a new product line at their facility in the Industrial Park. 5 Plan review and construction continues on Phase I of the Mt. Carmel campus for constrction of a new senior housing development by BVM-PHS Senior Housing, Inc. When all four phases are completed, a total of 450 dwelling units will be available. Health Services ENT Medical Building completed construction of a new 9,000 sq. ft. medical facility along Cedar Cross Road in the summer of 2019. Mercy Medical Center along with Medical Associates Clinic has begun construction of a $25 million project to build a two-story building east of the hospital to serve as a hematology/oncology outpatient clinic. Iowa 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 public-school system was ranked#7 out of 2,200 school districts nationwide. 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 features an additional state university and two more community colleges for a total of 18,000 college students. The University of Dubque began the building permit process for a 17,000 square foot Welcome Center addition and a new 4,000 square foot student clinic Dubuque Hempstead completed and opened a 27,000 sq. ft. aquatic facility on the north side of the school. A two-story addition is being added to the Alternative Learning Center. The City's recent awards and recognition from a variety of sources include: • The National Civic League named Dubuque a 2019 All-America City. This makes the fifth time in twelve years Dubuque has received this award which recognizes communities whose citizens work together to identify and tackle community-wide challenges and achieve uncommon results. Dubuque received the 2019 award for the civic infrastructure built on the Inclusive Dubuqe netwark of over 60 partners working to advance justice and social equity, and Imagine Dubuque 2017: A Call to Action, the comphrensive planning process that collected input from 6,000 residents to identify a roadmap for Dubuque's future. The application and presentation also featured three projects deonstrating how partners are impacting health outcomes for all residents. "Health Care for All" highlights the progress Crescent Community Health Center has made, the impact of the Pacific Islander Health Prject, and the recent work of the Brain Health Task Force. The Bee Branch Creek Restoration Proj ect was the seond proj ect highlighted and the collaborative work happening by the Dubuque Easts Well coalition to increase access to healthy local foods is the third. • In 2018, Dubuque became a LEED-Certified City. As one of the 75 STAR-certified cities and counties in the U.S., Dubuque was recently named a LEED Certified City. STAR stands for 6 Sustainability Tools far Assessing and Rating Communities. STAR Communities is a national framework for measuring and advancing local government's environmental, economic and community efforts to achieve sustainability. Leadership in Energy and Enviromental Design, or LEED, for Cities is a program from the U.S. Green Building Council (USGBC) that advances healthy, green, and economically strong cities and communities. 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 $237 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 more than $160 million in state and federal funds for the project. The $60 million Upper Bee Branch Creek Restoration phase of the project was completed, and a ribbon-cutting ceremony was held in July 2017 to celebrate the opening of the Bee Branch Creek Greenway. The $25.9 million Bee Branch Creek Railroad Culverts Project was awarded in early 2019 and construction is underway. When complete in the summer of 2021,the improvements will increase the level of flood proectection for over 1,300 homes and businesses from a 1 in 75-year rain event to a 1 in 500 -year rain event. 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 for 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 $24.9 million for stormwater infrastructure improvements related to the Bee Branch Watershed Flood Mitigation Project. Specifically, this includes funding towards the $25 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 funding for the 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 funding for the 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 HUD 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 stormwater 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 storm sewer system, and ultimately, the Mississippi River. As of fall 2018, more than 80 alleys have been completed. Another phase of the Bee Branch project is the $17.1 million Bee Branch Gate & Pump Replacement Project. Improvements will modernize the gate and pump station where the Bee Branch Watershed drains into the Mississippi. The improvements to the pump station will provide more pumping capacity and allow for gravity flow under some circumstances such that it will be able to accommodate what is statistically 7 considered a 500-year event-the same level of protection to be provided by the upstream Bee Branch Creek Restoration Project when the last component(the Bee Branch Creek Railroad Culverts Project) is complete. The engineering design plans are 90% complete, under review by the US Army Corps of Engineers. The City was awarded a $2.5 million U. S. Economic Development Administration (EDA) grant. However, since being awarded the grant, the estimated project cost increased by $6 million, due in part to site challenges. While the project will be ready for bidding in early 2021, the economic impact of the COVID-19 pandemic will likely delay the project. 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, indoar classroom and outdoor vehicle training areas. The $6.8 million project was supplemented with nearly$5.3 million in state and federal funds. Southwest Arterial: In August of 2019, the City of Dubuque in partnership with Dubuque County and the Iowa Department of Transportation(Iowa DOT) successfully completed and opened the new Southwest Arterial/U.S. Hwy 52 corridor to vehicular traffic. The completed Southwest Arterial project is a 6.1-mile, four-lane, divided freeway with priority-one access control between U.S. Hwy 20 and U.S. Hwy 61 / 151. The new arterial bypass provides an alternate, direct and efficient route for traffic through southwestern Dubuque,thereby reducing traffic congestion on the local street system. It also connects 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/ Seippel Road. Without the collaborative partnership and funding of the Iowa DOT, the completion of the $163 Million Southwest Arterial project would not have been possible. The Iowa DOT has contributed approximately $115 Million to allow for the completion of the 4-lane highway, including bridges and interchanges at both U.S. 20 and at U.S 61/151. The City contributed approximately$44 Million in federal, state, and local match funds while Dubuque County contributed approximately$4 Million. Following the completion of the Southwest Arterial, the new highway corridor has the potential to generate $80 million in property taxes, $1.67 billion in economic output, $653 million in labor income, and$1.02 billion in value added from 2021 to 2030. The Southwest Arterial will also annually generate$135 million in state and local taxes and$130 million in federal tax from new economic development, as well as save $30 million for the 10-year period. This project will also generate $16 million in property tax, $304 million in economic output, $24 million in state and local taxes, and$24 million in federal taxes due to economic development,in addition to $3 million in safety savings from 2030 onwards. Side benefits include removing over 500 commercial vehicles a day from downtown streets and encouraging redevelopment on Central Avenue and White Street. Almost 1,000 trucks per day will be removed from U.S. Hwy 20/Dodge. Additional traffic will be removed from Kelly Lane,Fremont Avenue, Cedar Cross Road,Rockdale Road, and other residential streets. For the Future. The mayor and city council will continue to take action to achieve their goals of maintaining a strong local economy, sustaining stable property tax levies, and enhancing the safety and security of residents through neighborhood vitality. City staff will work 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 opportunities 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 for the next five years and beyond include the following: 8 • Robust Local Economy: Diverse Businesses and Jobs with Economic Prosperity • Vibrant Community: Healthy and Safe • Livable Neighborhoods and Housing: Great Place to Live • Financially Responsible, High-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 Infrastructure, and Mobility FINANCIAL INFORMATION Internal Controls: City management is responsible for establishing and maintaining internal controls to ensure that the assets of the government are protected from loss, theft, or misuse, and to ensure that adequate accounting data is compiled to allow for 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 determine that the government has complied with applicable laws, regulations, contracts, and grants. Budgeting Controls: In addition, the government 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 rypes 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 mutual funds. The City (including DMASWA) received cash basis investment earnings of$2,068,897 far the year. The investment policy adopted by the city council stresses the importance of capital preservation. The policy directives intend to minimize credit and market risks while maintaining a competitive yield on the portfolio. Risk Management: The City of Dubuque is a member of a statewide risk pool for local governments,the Iowa Communities Assurance Pool(ICAP). The coverage for general and auto liability, as well as public official and police professional liability are acquired through this pool. The City has established a Workers' Compensation Reserve Fund for insuring benefits provided to City employees which is included in the Internal Service Fund Type. Through May 15, 2020 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 2020. Coverage from a private insurance company is maintained for losses in excess of the stop-loss amount. As of May 15, 2020 the City changed workers'compensation coverage providers. Under this new agreement, 9 the City is fully insured for all claims with the exception of sworn Police Officers and Fire Fighters medical claims. 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 swarn Police Officers and Fire Fighters medical claims under a self- insured retention of$750,000 for each accident.The accumulated reserve provision for such claims reflected a$1,295,139 net position as of June 30, 2020. The City has also established a self-insurance plan for medical,prescription drug, and short-term disability. The accumulated reserve provision for such claims equaled$4,012,974 as of June 30, 2020. 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 affirmed the Aa3 rating on outstanding general obligation unlimited tax (GOULT) debt on October 2, 2020; a Aa3 rating on outstanding second lien sales tax increment debt that is ultimately backed by an unlimited property tax pledge; and an A2 rating on outstanding senior lien sales tax increment revenue bonds. The ratings incorporate the city's robust financial position, a large tax base, a healthy wealth and income profile, and a somewhat inflated debt and pension liabilities. On October 2, 2020, Moody's also affirmed the A2 rating on the water revenue debt. The A2 rating incorporates moderate income service area, robust liquidity, an affordable debt profile, but a small system size and marginal debt service coverage. 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 firm 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 Reporting to the City of Dubuque, Iowa, for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2019. This was the 32nd consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report. 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 eligibiliry for another certificate. GFOA also awarded a Distinguished Budget Presentation Award to the Ciry of Dubuque, Iowa, for its annual budget for the fiscal year ended June 30, 202L 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 15th 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. lo Acknowledgments: The preparation of this report could not be accomplished without the efficient and dedicated services of the entire Finance Department staf£ We also thank the mayor and city council for their interest and support in planning and conducting the financial operations of the City of Dubuque in a responsible and progressive manner. We also thank the independent certified public accountants, Eide Bailly LLP,whose competent assistance and technical expertise have enabled the production of this report. Sincerely, � � r�� Michael C. Van Milligen Jennifer M. Larson City Manager Director of Finance and Budget 11 THIS PAGE IS INTENTIONALLY LEFT BLANK ia Citizens of Dubuque I City Attorney City Council — City Clerk Library _ _ Airport ManagementlLegislative City Manager Neighborhood ' Develapment Sustainability Builtling Economic Services Development � Arts&Cultural Affairs Emergency Engineering Communications Finance & Fire Budget Am6ulance Emergency Services Management Housing& Health Services Community Development Human Resources Human Rights Advancing Community Equity Engagement Information Leisure Services Services Recreation Parks Civic Center Grand River Planning police Center Services Multicultural Family Center Public public Works Information Metlia Geographic Services Information �stems Transportation Water Services Parking Transit Water& Resource Recovery Center Electetl by the Appointetl by the Appointed by the Appointetl by the Appointetl by the Citizens of Dubuque City Council Library Board of Airport Commission City Manager Trustees 13 CITY OF DUBUQUE, IOWA OFFICIALS JUNE 30,2020 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—1 st Ward Laura J. Roussell Council Member—2nd Ward Danny Sprank Council Member—3rd Ward Brad M. Cavanagh Council Member—4th Ward COUNCIL APPOINTED OFFICIALS Michael C. Van Milligen City Manager Barry A. Lindahl Senior Counsel Crenna M. Brumwell City Attorney Maureen A. Quann Assistant City Attorney Kevin S. Firnstahl City Clerk DEPARTMENT MANAGERS Todd E. Dalsing Airport Manager Cori L. Burbach Assistant City Manager/Acting Bldg Services Manager Therese H. Goodmann Assistant City Manager Gus N. Psihoyos City Engineer Jill M. Connors Economic Development Director Mark P. Murphy Emergency Communications Manager Jennifer M. Larson Director of Finance and Budget Rick A. Steines Fire Chief Mary Rose Corrigan Health Services Manager Alexis M. Steger Housing and Community Development Manager Shelley M. Stickfort Human Resources Director Kelly R. Larson Human Rights Director Christine A. Kohlmann Information Services Manager Marie L. Ware Leisure Services Manager Susan A. Henricks Library Director Jerelyn N. O'Connor Neighborhood Development Specialist Randy W. Gehl Public Information Officer John L. Klostermann Public Works Director Wally C. Wernimont Planning Services Manager Mark M. Dalsing Police Chief Gina S. Bell Sustainable Community Coodinator V. Renee Tyler Transportation Services Director Denise C. Blakeley Ihrig Water Department Manager William J. O'Brien Water&Resource Recovery Center Manager 14 �io�-�iY�iier�t Fi��n�� fficers r�ssa�ia�ion ��r�t�f��at� �f A��ii�v�rr��r�t f�� 1��r�� ir� F1r�ar��ia� R��o�ti�� Presenred to �1�' D� �l��il(�ll� ��W� F�r it� �'�n�prel��si�•e �t�tival Fir�ar�cial Rep�rt For tlie Fisc�l Yea�• Er�ded Jl�ne �30, ?�1� - �. E�ecuti�-e Dir�ctarlC�E� 15 THIS PAGE IS INTENTIONALLY LEFT BLANK i6 Financial Section June 30, 2020 City of Dubuque, Iowa �� THIS PAGE IS INTENTIONALLY LEFT BLANK is EideBailly CPAs&BUSINESS ADVISORS Independent Auditor's Report To the Honorable Mayor and Members of the City Council City of Dubuque, lowa Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business- type activities,the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Dubuque, lowa as of and for the year ended June 30, 2020 and the related notes to the financial statements,which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America;this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of Dubuque Initiatives and Subsidiaries, which represent 29 percent, 39 percent, and 18 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 GovernmentAuditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.The financial statements of Dubuque Initiatives and Subsidiaries and Dubuque Convention and Visitors Bureau, discretely presented component units, were not audited in accordance with GovernmentAuditing Standards. Whnt inspires you,inspires us. eidebailly.com 19 1545 Associates Dr.,Ste. 101 Dubuque,IA 52002-2299 T 563.556.1790 F 563.557.7842 EOE An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 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 information of the City of Dubuque, lowa, as of June 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and the other required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board,who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires of management about the methods or preparing the information and comparing the information for consistency with management's 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 information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Dubuque, lowa'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, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards(Uniform Guidance), and is also not a required part of the financial statements. 20 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 GovernmentAuditing Standards, we have also issued a report dated January 15, 2021, on our consideration of the City of Dubuque, lowa'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 GovernmentAuditing Standards in considering the City's internal control over financial reporting and compliance. �� GT ��s� Dubuque, lowa January 15, 2021 21 THIS PAGE IS INTENTIONALLY LEFT BLANK Za CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2020 This section of the City of Dubuque's annual financial report presents our discussion and analysis of the City's financial performance during the fiscal year that ended on June 30, 2020. Please read it in conjunction with the transmittal letter at the front of this report 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 $590,242,775 compared to net position of $571,955,020 for fiscal year 2019. • Governmental program revenues decreased by $3,382,631 from fiscal year 2019. This decrease was due largely in part to a significant decrease in grant revenues in community and economic development in relation to the HUD Resiliency grant. • The City's business type activities program revenues increased $1,438,132. Charges for services increased $192,744. Water (5%), sewer (4.5%), stormwater (6.83%), and refuse (1.63%) rates were increased in fiscal year 2020. The Stormwater Fund had a $4,445,637 State of Iowa Flood Mitigation grant (Sa1es Tax Increment) for the Bee Branch Creek Restoration project. There were $88,955 capital contributions from outside developers for completed subdivisions. Capital contributions received from governmental funds were $7,849,493 and are shown in the transfers line and are detailed out in Note 5. • Program expenses of the City's governmental activites increased approximately 6.0%, or $5,600,405 from �scal year 2019 to fiscal year 2020. The increase was seen in public safety, public works, community and economic development and general government, which is due to an increase in expenditures related to pension liability accrual. 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 government-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 government-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, 2020 The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs,regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future 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 (known as component units), the Dubuque Metropolitan Area Solid Waste Agency(DMASWA), Dubuque Initiatives (DI) 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 reported 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 activities. This category consists of services provided by the City that are principally supported by taxes and intergovernmental revenues. Basic City services such as police, fire, public works,planning,parks, library, and general administration are governmental activities. Business-type activities. These activities are supported primarily by user fees. The services provided by the City in this category include water, sewer, storm 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 information may be useful in evaluating a government's 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 governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City's near-term financial decisions. Both the governmental 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. 24 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2020 The City maintains four individual major governmental 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 for the general fund, tax increment financing fund, community development fund and debt service fund, all of which are considered to be major funds. Data from all other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor 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. PYoprietary 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, storm 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 workers' compensation. The City's internal service funds predominately benefit the governmental 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 support 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 for 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 for 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 repart also presents certain required supplementary information concerning the budget and actual results of the Ciry, 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 ircforination. The combining statements referred to earlier in connection with nonmajor governmental funds, nonmajar enterprise funds, internal service funds, and agency funds, are presented immediately following the required supplementary information. 25 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2020 GOVERNMENT-WIDE FINANCIAL ANALYSIS Net position. As noted earlier, net position may serve as a useful indicator of a government's 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, constitutional 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 2020 2019 2020 2019 2020 2019 Current and other assets $ 106,111,268 $ 106,778,226 $ 44,069,688 $ 40,258,747 $ 150,180,956 $ 147,036,973 Capital assets 419,863,419 420,219,770 368,493,789 351,502,432 788,357,208 771,722,202 Total assets 525,974,687 526,997,996 412,563,477 391,761,179 938,538,164 918,759,175 Deferred outflows ofresources 11,802,331 12,964,250 1,223,366 1,486,850 13,025,697 14,451,100 Long-term liabilities 114,917,444 119,522,431 184,282,392 184,920,514 299,199,836 304,442,945 Otherliabilities 14,164,454 15,275,931 16,131,621 12,499,475 30,296,075 27,775,406 Totalliabilities 129,081,898 134,798,362 200,414,013 197,419,989 329,495,911 332,218,351 Deferred inflows of resources 30,834,711 28,519,375 990,464 517,529 31,825,175 29,036,904 Net position: Net investment in capital assets 387,344,725 385,005,220 191,757,112 179,561,228 579,101,837 564,566,448 Restricted 26,501,434 28,321,603 3,187,364 3,131,716 29,688,798 31,453,319 Unrestricted (35,985,750) (36,682,314) 17,437,890 12,617,567 (18,547,860) (24,064,747) Totalnetposition $ 377,860,409 $ 376,644,509 $ 212,382,366 $ 195,310,Sll $ 590,242,775 $ 571,955,020 Net position of the governmental activities increased $1,215,900 over fiscal year 2019 balance of $376,644,509. Governmental activities had no capital assets donated from developers. Overall grant revenues decreased by$4,311,880. This was primarily due to the public works grant for the HUD Resiliency grant. 26 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2020 Net position for the business-type activities increased $17,071,855 over fiscal year 2019 of $195,310,Sll. Charges for seroices increased $192,744. Grants increased $1,245,388. The increase in net position is primarily due to transfers of capital assets from governmental funds of$7,849,493. A portion of the Ciry's net position $29,688,798 or 5.0%represents resources that are subject to external restrictions on how they may be used. At the close of fiscal year 2020, the City has negative total unrestricted net position. The government-wide negative unrestricted results from TIF (governmental activities) debt being used to finance capital assets of the business-type activities, along with $50,125,551 in pension liability and $5,882,693 in OPEB Liability. Governmental activities. Taxes are the largest source of governmental revenues with property taxes of $38,354,691 in 2020. Other governmental revenues included gaming$7,394,294, local option sales taxes $9,652,332, and charges for services $17,067,410. Governmental operating expenses during 2020 totaled $99,601,046. The largest programs were public safety of $32,079,903, public works of $22,667,132, community and economic development of $17,848,570, and culture and recreation of$13,576,571. Business-type activities. Operating revenue increased $100,971. Operating expenses decreased from $34,100,914 in 2019 to $33,312,066 in 2020. The decrease was primarily in supplies and services and insurance expenses. Nonoperating expenses consist of interest expense of $4,641,707. Investment earnings decreased from $798,497 in 2019 to $796,494 in 2020. 27 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2020 CITY OF DUBUQUE CONDENSED STATEMENT OF REVENUES, EXPENSES,AND CHANGES IN NET POSITION Governmental Activities Business-type Activities Total 2020 2019 2020 2019 2020 2019 Revenues: Program revenues Charges for services $ 17,067,410 $ 16,138,161 $ 34,451,197 $ 34,258,453 $ 51,518,607 $ 50,396,614 Operating grants and contributions 14,484,320 23,198,271 2,967,619 1,917,366 17,451,939 25,115,637 Capital grants and contributions 15,450,271 11,048,200 6,410,594 6,215,459 21,860,865 17,263,659 General revenues Property taxes 38,354,691 37,973,888 - - 38,354,691 37,973,888 Local option sales tax 9,652,332 8,940,109 - - 9,652,332 8,940,109 Hotel/motel tax 2,117,506 2,113,273 - - 2,117,506 2,113,273 Utility franchise fees 4,976,472 5,072,350 - - 4,976,472 5,072,350 Gaming 7,394,294 8,730,986 - - 7,394,294 8,730,986 Unrestricted investment earnings 1,857,420 1,858,476 796,494 798,497 2,653,914 2,656,973 Gain on sale of capital assets 23,866 94,980 16,500 80,479 40,366 175,459 Total revenues 111,378,582 115,168,694 44,642,404 43,270,254 156,020,986 158,438,948 Expenses: Public safery 32,079,903 29,637,417 - - 32,079,903 29,637,417 Public works 22,667,132 24,835,035 - - 22,667,132 24,835,035 Health and social services 1,677,181 1,442,658 - - 1,677,181 1,442,658 Culture and recreation 13,576,571 12,916,646 - - 13,576,571 12,916,646 Community and economic development 17,848,570 15,837,039 - - 17,848,570 15,837,039 General government 8,821,692 5,944,116 - - 8,821,692 5,944,116 Interest on long-term debt 2,929,997 3,387,730 - - 2,929,997 3,387,730 Sewage disposal works - - 11,725,889 12,177,352 11,725,889 12,177,352 Water utility - - 7,631,411 7,892,423 7,631,411 7,892,423 Stormwaterutility - - 5,887,171 7,025,525 5,887,171 7,025,525 Parking facilities - - 3,414,851 2,850,531 3,414,851 2,850,531 America'sRiverProject - - 3,161 19,874 3,161 19,874 Refuse collection - - 4,387,683 4,215,881 4,387,683 4,215,881 Transit system - - 4,748,463 4,533,060 4,748,463 4,533,060 Salt - - 333,556 182,092 333,556 182,092 Totalexpenses 99,601,046 94,000,641 38,L32,185 38,896,738 137,733,231 132,897,379 Increase in net position before 11,777,536 21,168,053 6,510,219 4,373,516 18,287,755 25,541,569 Transfers (10,561,636) (8,981,064) 10,561,636 8,981,064 - - Increase in net position 1,215,900 12,186,989 17,071,855 13,354,580 18,287,755 25,541,569 Netposition,beginning 376,644,509 364,457,520 195,310,511 181,955,931 571,955,020 546,413,451 Netposition,ending $ 377,860,409 $ 376,644,509 $ 212,382,366 $ 195,310,511 $ 590,242,775 $ 571,955,020 28 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2020 Governmental funds. The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. The City's governmental funds reported a combined fund balance of $61,287,244 at June 30, 2020. $6,106,661 is in nonspendable for inventory, receivables, and prepaid items. $69,412 is nonspendable endowment corpus. $30,467,092 is restricted for debt seroice and bond ordinance, road use tax funds, capital improvements, community development programs, employee benefits, endowments, and various grants. Council ordinance has committed $5,823,218 far capital improvements. $1,396,196 is assigned for capital improvements and equipment. This leaves $17,424,665 for unassigned fund balances in the government funds. The General Fund's fund balance reserve goal is 20% of revenues. The fund balance of the General Fund increased by $575,150 to $26,889,718. Gaming revenues decreased by $1,314,408 or 15.1% in fiscal year 2020. Charges for Services decreased $1,630,542 coupled with an increase in taxes and a decrease investment earnings. General Fund expenditures increased from $59,398,698 in 2019 to $60,501,091 in 2020. The $1,102,393 increase was primarily in the general government function of $835,6ll, but increases were also in the public safety, culture and recreation, and communiry and economic development functions. The fund balance of special revenue fund Tax Increment Financing increased by$387,791 to $9,549,523. Tax revenues increased by $357,275 due to expansions and new businesses added in Dubuque Industrial Center West. Tax Increment Financing expenditures decreased$165,712. The fund balance of the special revenue Community Development Fund decreased by$1,662,232 to $5,600,261. Intergovernmental revenue decreased from$11,277,705 in 2019 to $10,666,574 in 2020 primarily for HUD Resiliency grant. The Debt Service Fund paid$7,065,499 in principal and$2,985,797 in interest and fiscal charges during fiscal year 2020. 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, 2020, totaled $212,382,366 of which the unrestricted is $17,437,890. The Sewer Fund had an increase of$947,264 for total net position of $30,413,588. Operating expenses decreased $355,074 primarily for employee expense and supplies and services. The Sewer Fund operating income from operations was $2,534,554. The Water Utility had an increase in net position by $2,692,669 for total net position of $34,051,168. Water rates were increased 5%in 2020. The Storm Water Utility had an increase in net position of $12,713,362. Ending net position is $82,775,919. Storm Water Utility had capital contributions of$12,343,834 which consisted of a capital grant $4,688,744 and contribution of assets from governmental funds $7,655,090. 29 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2020 The Parking Facilities had a decrease in net position of$886,870. Ending net position is $47,185,335. Operating income decreased $752,774. Parking Facilities had operating loss of $889,279 after depreciation of$1,173,158 for fiscal year 2020. Other Enterprise Funds net position increased by $1,605,430 to $17,956,356. This was primarily due to Transit's increase of$1,488,302 in net position. BUDGETARY HIGHLIGHTS There were three amendments to the City's 2019-2020 cash basis budget. The first amendment was passed in September 2019 to reflect operating and capital budget carryovers (continuing appropriation authority) from fiscal year 2019 and amended the fiscal year 2020 budget for operating and capital City Council actions since the beginning of the fiscal year. The second budget amendment was passed in November 2019 to reflect City Council actions since the second budget amendment and amendments to add additional appropriation authority due to increased revenues. The third budget amendment was passed in May 2020 to reflect budget cuts related to revenue losses caused by the pandemic. The final budget for total cash basis receipts increased by $56,806,013. The increase was primarily attributable to revenue associated with capital projects and operating carryovers which mainly include grants to intergovernmental funds. The final budget for total expenditures increased $78,920,118 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. Actual cash basis revenues were $69,686,594 less than the final amended budget; and, cash basis expenditures were $95,933,410 less than the final amended budget due primarily to projected capital projects not completed by fiscal year end. 30 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2020 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, 2020, amounts to $788,357,208 (net of accumulated depreciation). This investment 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 accumulated depreciation) Governemental Activities Business-type Activities Total 2020 2019 2020 2019 2020 2019 Land $ 79,331,528 $ 78,777,621 $ 24,793,823 $ 24,805,263 $ L04,125,351 $ 103,582,884 Buildings 139,555,836 141,858,066 159,240,025 159,586,137 298,795,861 301,444,203 Improvements otherthan buildings 24,726,686 25,455,654 178,550,296 177,818,388 203,276,982 203,274,042 Machinery and equipment 52,381,639 51,673,620 ll5,073,585 113,861,028 167,455,224 165,534,648 Infrastructure 239,440,411 236,909,111 - - 239,440,411 236,909,111 Constructionin progress 59,256,754 56,019,935 34,113,325 11,853,774 93,370,079 67,873,709 Accumulated depreciation (174,829,435) (170,474,237) (143,277,265) (136,422,158) (318,106,700) (306,896,395) $ 419,863,419 $ 420,219,770 $ 368,493,789 $ 351,502,432 $ 788,357,208 $ 771,722,202 Major expenditures during 2019-2020 were for the construction work on stormwater Bee Branch Creek Restoration, Transit bus replacements, Kerper sanitary reconstruction, and water main replacements. Long-term debt. At year end, the City had$252,847,074 of debt outstanding. During fiscal year 2020, the City issued $4,240,000 of general obligation bonds, which was used for refunding. The City refunded $4,370,000 of general obligation bonds. The refunding was undertaken to reduce total debt service payments. The results of the transaction is a reduction of$193,675 in future debt service payments for an economic gain of$167,292. Revenue capital loan notes have been issued for the planning and construction of sewer, stormwater, and water capital projects through the State of Iowa State Revolving Loan Funds (SRF). The City issued an additional $10,478,152 of SRF debt in 2020 including $5,000 for green alley projects reducing stormwater run off, $5,000 for Upper Bee Branch Stormwater improvements, $31,678 for Eagle Point Park ecological restoration, $80,137 for the Catfish Creek stabilization project, $1,120,000 for CIWA purchase, $866,260 for Kerper sewer project, $2,400,024 for Roosevelt tower, and $5,970,053 for upper Bee Branch culverts. The City has pledged income derived from the acquired or constructed assets to pay debtservice. 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 property in the community. Thus the City's debt capacity is $239,298,248. With$109,020,970 of debt applicable against the capacity, the City is utilizing 45.56% of this limit. Additional information on the City's long-term 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, 2020 ECONOMIC FACTORS The City's unemployment rate as of November, 2020 was 3.3%, up from 2.3% in November, 2019. The national average was 6.7% for November 2020, according to the Bureau of Labor Statistics. State of Iowa was 3.6% as reported in November, 2020. The assessed valuation of taxable properry, net of exemptions, increased by 2.45% to $2,825,245,000. In fiscal year 2020, the minimum monthly refuse rate increased from$15.37 to $15.62, sewer rate increased 4.5%, water rates increased 5%, and the storm water monthly fee increased from $7.76 to $8.29 per single family unit(SFU). Impacts of the COVID-19 Pandemic. In mid-March of 2020, the Governor of Iowa ordered all food and beverage facilities to suspend their indoor food and beverage services, and other non-essential businesses were mandated to be closed to the public in an effort to reduce the spread of the coronavirus. The City continued to provide essential services to the public,but City facilities were closed to the public. The City Council adopted a revised budget recommendation for fiscal year 2021 to include a course of action to help mitigate the financial burden of COVID-19,which included: 1) administratively initiated a hiring freeze on most positions that are vacant or become vacant in Fiscal Year 2021, 2) froze all travel budgets (conferences, education and training, and city business travel), 3) delayed some equipment replacements,4) froze all capital projects unless the project was already under contract,had a grant associated,was part of an agreement, or addressed health and safety, 5) no wage increase for non-bargaining and bargaining unit employees in Fiscal Year 2021, 6) formed multiple employee work groups to assist with the quarterly review of projections, and 7) departments were required to develop budget reduction plans. At the end of fiscal year 2020,there were reductions in revenues as projected. Significant General Fund revenue reductions were in hotel/motel taxes, gaming revenue, construction permits, inspection fees, and Parks and Recreation facility usage and program fees. These reductions,however,were offset by expenditure reductions in most departments. While a decrease in General Fund balance was anticipated due to the revenue reductions,the City was able to maintain the unreserved General Fund balance at the same approximate level as budgeted. Due to the team effort of the City Council and City staff, as well as the recovering economy and CARES (Coronavirus Aid, Relief, and Economic Security)Act funding, the financial impacts of COVID-19 have not been as significant as originally projected for fiscal year 2020. There are still however,revenue concerns going forward. City Council and City staff plan to use caution going forward in fiscal year 2021 due to the uncertainty of these revenues as well as the economy 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 government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Finance and Budget, 50 West 13th Street,Dubuque,Iowa 52001-4864. 32 Basic Financial Statements Fiscal Year Ended June 30, 2020 City of Dubuque, Iowa 33 CITY OF DUBUQUE,IOWA STATEMENT OF NET POSITION JUNE 30,2020 Primary Government Component Units Dubuque Dubuque Metropolitan Dubuque Convenrion Governmental Business-type Area Solid Initiatives and and Visitors Activities Activities Total Waste Agency Subsidiaries Bureau ASSETS CURRENT ASSETS Cash and pooled cash investments $ 48,697,058 $ 29,487,015 $ 78,184,073 $ 7,962,484 $ 10,976,497 $ 112,376 Receivables Property tax Delinquent 1,096,305 - 1,096,305 - - - Succeeding year 26,202,568 - 26,202,568 - - - Accounts and other 2,729,268 3,834,133 6,563,401 530,045 27,373 28,384 Special assessments 426,964 - 426,964 - - - Accrued interest 222,616 102,339 324,955 50,993 - - Notes 2,465,755 - 2,465,755 - 47,065 - Intergovernmental 7,101,310 4,032,439 11,133,749 19,123 - - Inventories 1,559,798 1,034,062 2,593,860 - 133,347 9,041 Prepaid items 655,592 100,881 756,473 28,634 - - TotalCurrentAssets 91,157,234 38,590,869 129,748,103 8,591,279 11,184,282 149,801 NONCURRENT ASSETS Expendable restricted cash and investments 7,083,640 5,478,819 12,562,459 5,361,267 1,420,609 235,587 Nonexpendable restricted cash and investments 69,412 - 69,412 - - - Notes receivable 7,800,982 - 7,800,982 - 105,267 - Capital assets Land 79,331,529 24,793,823 104,125,352 2,737,804 - - Buildings 139,555,836 159,240,025 298,795,861 386,779 - 265,111 Improvements other than buildings 24,726,686 178,550,296 203,276,982 15,903,557 - 27,491 Machinery and equipment 52,381,639 115,073,585 167,455,224 3,990,168 - 105,385 Infrastructure 239,440,410 - 239,440,410 - - - Construction in progress 59,256,755 34,ll3,325 93,370,080 3,295,599 - - Accumulated depreciation (174,829,436) (143,277,265) (318,106,701) (9,427,780) - (126,925) Total Noncurrent Assets 434,817,453 373,972,608 808,790,061 22,247,394 1,525,876 506,649 Total Assets 525,974,687 412,563,477 938,538,16�4 30,838,673 12,710,158 656,450 DEFERRED OUTFLOWS OF RESOURCES Pension related deferred outflows 11,587,791 1,178,292 12,766,083 115,931 - - OPEB related deferred outflows 214,540 45,074 259,614 4,945 - - Total Deferred Outflows of Resources 11,802,331 1,223,366 13,025,697 120,876 - - 34 CITY OF DUBUQUE,IOWA EXHIBIT 1 (continued) STATEMENT OF NET POSITION(continued) JUNE 30,2020 Primary Government Component Units Dubuque Dubuque Metropolitan Dubuque Convention Governmental Business-type Area Solid Initiatives and and Visitors Activities Activities Total Waste Agency Subsidiaries Bureau LIABILITIES CURRENT LIABILiTiES Accountspayable $ 5,467,057 $ 4,956,180 $ 10,423,237 $ 391,015 $ 49,286 $ 255,583 Accruedpayroll 1,851,383 339,195 2,190,578 31,675 - 23,038 Loanspayable 251,865 1,063,545 1,315,410 - - 7,367 Notes payable 91,860 6,094,000 6,185,860 - - - General obligation bonds payable 4,578,192 2,916,809 7,495,001 425,000 - - Revenue bonds payable - 340,000 340,000 - - - Tax increment financing bonds payable 590,000 - 59Q000 - - - Accrued compensated absences 404,373 60,060 464,433 1,139 - - Accruedinterestpayable 229,223 361,832 591,055 19,863 3,235 - Intergovernmental payable 8,141 - 8,141 98,251 - - Unearned revenue 692,360 - 692,360 - - 2,254 Total Current Liabilities 14,164,454 16,131,621 30,296,075 966,943 52,521 288,242 NONCURRENT LIABILITIES Loans payable 3,647,429 1,088,786 4,736,215 - - 10,783 Notes payable - 110,871,647 110,871,647 - - - General obligation bonds payable 37,407,321 33,304,047 70,711,368 7,699,672 - - Revenue bonds payable - 32,366,267 32,366,267 - - - Landfill closure and postclosure care - - - 1,981,708 - - Tax increment financing bonds payable 18,235,306 - 18,235,306 - - - Accrued compensated absences 5,611,886 658,903 6,270,789 211,858 - - Netpensionliability 45,154,154 4,971,397 50,125,551 489,134 - - Total OPEB liability 4,861,348 1,021,345 5,882,693 112,052 - - Total Noncurrent Liabiliries 114,917,444 184,282,392 299,199,836 10,494,424 - ]0,783 Total Liabiliries 129,081,898 200,414,013 329,495,9ll 11,461,367 52,521 299,025 DEFERRED INFLOWS OF RESOURCES Pension related deferred inflows 4,099,839 868,017 4,967,856 85,405 - - OPEB related deferred inflows 277,024 58,203 335,227 6,385 - - Succeeding year property tax 26,202,568 - 26,202,568 - - - Deferred amount on refunding 255,280 64,244 319,524 - - - Total deferred inflows ofresources 30,834,711 990,464 31,825,175 91,790 - - NET POSITION Net investment in capital assets 387,344,725 191,757,112 579,101,837 9,107,248 - 271,062 Restricted for/by: Bond ordinance development agreement 2,140,740 3,187,364 5,328,104 - - - Debt service 5,055 - 5,055 - - - Employee benefits 57,032 - 57,032 - - - Community development 8,776,446 - 8,776,446 - - - Iowa Finance Authority Trust 1,235,968 - 1,235,968 - - - Capitalprojects 12,157,094 - 12,157,094 - - - Franchise agreement 618,857 - 618,857 - - - Endowments,expendable 104,586 - 104,586 - - - Endowments,nonexpendable 69,412 - 69,412 - - - Other 1,336,244 - 1,336,244 - - - State statute - - - 130,309 - - Landfill closure and post closure care - - - 2,903,459 - - Minority interest - - - 1,649,240 - - Unrestricted (35,985,750) 17,437,890 (18,547,860) 5,616,136 12,657,637 86,363 Total Net Posirion $ 377,860,409 $ 212,382,366 $ 590,242,775 $ 19,406,392 $ 12,657,637 $ 357,425 See notes to financial statements. 35 CITY OF DUBUQUE,IOWA STATEMENT OF ACTIVITIES EXHIBIT 2 FOR THE YEAR ENDED JUNE 30,2020 Program Revenues Net(Expense)Revenue and Changes in Net Position Primary Government Component Units Dubuque Operating Capital Grants Metropolitan Dubuque Dubuque Charges for Grants and and Total Program Govemmental Business-rype Area Solid Initiatives and Convention and Functions/Programs Expenses Services Contributions Contributions Revenues Activities Activities Total Waste Agency Subsidiaries Visitors Bureau Primary government Governmental Activities: Publicsafety $ 32,079,903 $ 2,641,633 $ 1,267,198 $ - $ 3,908,831 $ (28,171,072) $ - $ (28,171,072) Public works 22,667,132 6,732,825 5,063,878 13,352,469 25,149,172 2,482,040 - 2,482,040 Health and social services 1,677,181 386,885 11,339 725 398,949 (1,278,232) - (1,278,232) Cultureandrecreation 13,576,571 2,237,000 494,976 460 2,732,436 (10,844,135) - (10,844,135) Community and economic development 17,848,570 2,515,823 7,646,929 1,659,370 11,822,122 (6,026,448) - (6,026,448) General government 8,821,692 2,553,244 - 437,247 2,990,491 (5,831,201) - (5,831,201) Interest on long-term debt 2,929,997 - - - - (2,929,997) - (2,929,997) Total govemmental activities 99,601,046 17,067,410 14,484,320 15,450,271 47,002,001 (52,599,045) - (52,599,045) Business-type activities Sewage disposal works ll,725,889 12,606,632 - 69,575 12,676,207 - 950,318 950,318 Waterudlity 7,631,411 9,273,720 - 19,380 9,293,100 - 1,661,689 1,661,689 Stormwaterutiliry 5,887,171 5,061,855 380,606 4,688,744 10,131,205 - 4,244,034 4,244,034 Parking facilides 3,414,851 2,313,344 79,942 - 2,393,286 - (1,021,565) (1,021,565) America'sRiverProject 3,161 - - - - - (3,161) (3,161) Refuse collection 4,387,683 4,448,317 - - 4,448,317 - 60,634 60,634 Transitsystem 4,748,463 400,576 2,507,071 1,632,895 4,540,542 - (207,921) (207,921) Salt 333,556 346,753 - - 346,753 - 13,197 13,197 Totalbusiness-typeactivities 38,132,185 34,451,197 2,967,619 6,410,594 43,829,410 - 5,697,225 5,697,225 Total primary government $ 137,733,231 $ 51,518,607 $ 17,451,939 $ 21,860,865 $ 90,831,4ll $ (52,599,045) $ 5,697,225 $ (46,901,820) Component units Dubuque Metropolitan Area Solid Waste Agency $ 2,852,380 $ 6,915,660 $ 76,101 $ - $ 6,991,761 $ 4,139,381 $ - $ - Dubuque inidatives and Subsidianes 101,790 - - - - - Q01,790) - Dubuque Convenpon and Visitors Bureau 1,455,694 1,554,348 123,000 - 1,677,348 - - 221,654 TotalComponentUnits $ 4,409,864 $ 8,470,008 $ 199,101 $ - $ 8,669,109 4,139,381 (101,790) 221,654 Generalrevenues Propertytaxes 38,354,691 - 38,354,691 - - - Local option sales tax 9,652,332 - 9,652,332 - - - Hotelmoteltax 2,ll7,506 - 2,117,506 - - - Utility franchise fees 4,976,472 - 4,976,472 - - - Gaming 7,394,294 - 7,394,294 - - - Unrestricted inveshnent eamings 1,857,420 796,494 2,653,914 213,772 13,409 313 Miscellaneous - - - - 1,914,655 - Gain on disposal of capital assets 23,866 16,500 40,366 - - - Transfers (10,561,636) 10,561,636 - - - - Total general revenues and transfers 53,814,945 11,374,630 65,189,575 213,772 1,928,064 313 Change in Net Position 1,215,900 17,071,855 18,287,755 4,353,153 1,826,274 221,967 Net position,beginning of year 376,644,509 195,310,511 571,955,020 15,053,239 10,831,363 135,458 Net position,ending of year $ 377,860,409 $ 212,382,366 $ 590,242,775 $ 19,406,392 $ 12,657,637 $ 357,425 See notes to financial statements 36 THIS PAGE IS INTENTIONALLY LEFT BLANK 37 CITY OF DUBUQUE, IOWA BALANCE SHEET EXHIBIT 3 GOVERNMENTAL FUNDS JUNE 30,2020 Special Revenue Tax Increment Community General Financing Development ASSETS Cash and pooled cash inveshnents $ 21,203,339 $ 6,147,527 $ 1,797,978 Receivables Property tax Delinquent 667,139 319,783 - Succeeding year 22,891,980 - - Accounts and other 2,043,708 188,044 - Special assessments 19,344 - - Accrued interest ll2,645 54,071 12,229 Notes 4,536,665 289,800 3,886,725 Intergovernmental 1,197,287 - 2,547,762 Due from other funds 456,550 - - Inventories 196,531 - 395,828 Prepaid items 412,362 - 21,196 Restricted cash and pooled cash inveshnents 220,741 2,634,920 - Total Assets $ 53,958,291 $ 9,634,145 $ 8,661,718 LIABILITIES,DEFERRED INFLOW5 OF RESOURCES AND FUND BALANCES LIABiLITTES Accounts payable $ 1,407,099 $ 84,622 $ 613,758 Accrued payroll 1,674,452 - 26,574 Intergovemmental payable - - - Due to other funds - - - Unearned revenue 574,676 - - Total Liabilities 3,656,227 84,622 640,332 DEFERRED INFLOW OF RESOURCES Unavailable revenues Succeeding year property tax 22,891,980 - - Special assessments 19,344 - - Grants 21,804 - 2,421,125 Other 479,218 - - Total Deferred Inflows of Resources 23,412,346 - 2,421,125 FUND BALANCES Nonspendable Endowment corpus - - - inventory 196,531 - - Long-term notes receivablc 4,536,665 - - Prepaid items 412,362 - 21,196 Restricted Endowments - - - Library - - - Police - - - Veterans - - - Debt service - - - Bond ordinance - 2,140,740 - Capital improvements 219,741 7,408,783 - Franchise agreement - - - Special assessments - - - Iowa Finance Authority Trust - - - Communityprograms - - 8,182,821 Employee benefits - - - Committed,capital improvements - - - Assigned DRA gaming and distribution 1,396,196 - - Unassigned 20,128,223 - (2,603,756) Total Fund Balances 26,889,718 9,549,523 5,600,261 Total Liabilities,Deferred Inflows of Resources, and Fund Balances $ 53,958,291 $ 9,634,145 $ 8,661,718 See notes to financial statements. 38 Other Governmental Debt Service Funds Total $ - $ 12,584,785 $ 41,733,629 8,795 100,588 1,096,305 276,674 3,033,914 26,202,568 - 229,339 2,461,091 - 407,620 426,964 - 23,693 202,638 - 1,553,547 10,266,737 - 3,356,261 7,101,310 - - 456,550 - 901,636 1,493,995 - 38,271 471,829 - 4,297,391 7,153,052 $ 285,469 $ 26,527,045 $ 99,066,668 $ - $ 1,941,541 $ 4,047,020 - 117,814 1,818,840 - 8,141 8,141 - 456,550 456,550 - 117,685 692,361 - 2,641,731 7,022,912 276,674 3,033,914 26,202,568 - 389,289 408,633 - 860,905 3,303,834 3,740 358,519 841,477 280,414 4,642,627 30,756,512 - 69,412 69,412 - 901,636 1,098,167 - - 4,536,665 - 38,271 471,829 - 104,586 104,586 - 1,157,214 1,157,214 - 7,774 7,774 - 152,925 152,925 5,055 - 5,055 - - 2,140,740 - 8,563,640 16,192,164 - 618,857 618,857 - 18,331 18,331 - 1,235,968 1,235,968 - 593,625 8,776,446 - 57,032 57,032 - 5,823,218 5,823,218 - - 1,396,196 - (99,802) 17,424,665 5,055 19,242,687 61,287,244 $ 285,469 $ 26,527,045 $ 99,066,668 39 THIS PAGE IS INTENTIONALLY LEFT BLANK 40 CITY OF DUBUQUE, IOWA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET EXHIBIT 3-1 TO THE STATEMENT OF NET POSITION JUNE 30,2020 Total fund balances-governmental funds $ 61,287,244 Amounts reported for the governmental activities in the statement of net position are different because: Capital assets used in governmental acriviries are not financial resources and therefore are not reported in the funds. Cost of capital assets $ 594,336,265 Accumulated depreciation (174,566,302) 419,769,963 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 325,720 Special assessments 408,633 Grants and other 3,819,592 4,553,945 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 government funds as follows: Deferred inflows of resources (4,139,180) Deferred outflows of resources 11,479,690 7,340,510 Internal 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 internal service funds are included in governmental activities in the statement of net position. 4,865,697 Some liabilities are not due and payable in the current period and therefore are not reported in the funds.Those liabilities consist o£ General obligation bonds (41,985,513) Tax increment financing bonds (18,825,306) Notes payable (91,860) Loans payable (3,899,294) Deferred amount on debt refundings (255,280) Accrued interest (229,223) Compensated absences (6,016,259) Net pension liability (43,792,867) Total OPEB liability (4,861,348) (119,956,950) Net position of governmental activities $ 377,860,409 See notes to financial statements. 41 CiTY OF DUBUQUE,iOWA STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES EXHIBIT 4 GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30,2020 Special Revenue Tax Tncrement Community General Financing Development REVENUES Taxes $ 35,404,753 $ 10,661,450 $ - Special assessments - - 6,503 Licenses and permits 1,497,086 - - Intergovernmental 1,885,616 - 10,666,574 Charges for services 10,585,690 - 120 Fines and forfeits 365,458 - - Investment earnings 621,920 733,556 91,447 Contributions 948,412 188,045 11,ll 5 Gaming 7,394,294 - - Miscellaneous 1,405,106 688,372 31,674 Total Revenues 60,108,335 12,271,423 10,807,433 EXPENDiTURES Current Public safety 29,515,413 - - Public works 5,510,707 - - Health and social services 991,911 - 348,633 Culture and recreation 12,967,384 - 91,065 Community and economic development 4,028,289 2,496,361 4,453,498 General government 6,845,841 - 24,481 Debt service Principal - - - Interest and fiscal charges 44,882 - 13,020 Capitalprojects 596,664 - 7,649,968 Total Expenditures 60,501,091 2,496,361 12,580,665 EXCESS(DEFICIENCY)OF REVENUES OVER(iJNDER)EXPENDITURES (392,756) 9,775,062 (1,773,232) OTHER FINANCING SOURCES(USES) Issuance of debt - - - Premium on bonds - - - Transfers in 4,539,276 513,374 111,000 Transfers out (3,643,841) (10,509,885) - Insurance recovery 19,422 - - Sale of capital assets 53,049 609,240 - Total Other Financing Sources(Uses) 967,906 (9,387,271) 111,000 NET CHANGE IN FiJND BALANCES 575,150 387,791 (1,662,232) FLTND BALANCES,BEGINNING 26,314,568 9,161,732 7,262,493 FLTND BALANCES,ENDING $ 26,889,718 $ 9,549,523 $ 5,600,261 See notes to financial statements. 42 Other Governmental Debt Scrvice Funds Total $ 280,677 $ 8,471,794 $ 54,818,674 - 69,891 76,394 - - 1,497,086 - 16,065,870 28,618,060 - 408,788 10,994,598 - - 365,458 �34� zsz,i26 i,699,ois - 16,149 1,163,721 - - 7,394,294 - 1,391,937 3,517,089 280,643 26,676,555 110,144,389 - 3,102 29,518,515 - 6,328,105 ll,838,812 - - 1,340,544 - 140,929 13,199,378 - 5,707,258 16,685,406 - 577,117 7,447,439 7,065,499 - 7,065,499 2,985,797 722 3,044,42] - 12,842,807 21,089,439 10,051,296 25,600,040 111,229,453 (9,770,653) 1,076,515 (1,085,064) 1,372,907 - 1,372,907 62,182 - 62,182 8,329,362 3,653,188 17,146,200 - (5,704,617) (19,858,343) - 52,182 71,604 - 3,000 665,289 9,764,451 (1,996,247) (540,161) �6,zoz> �9i9,�3z� �i,bzs,zas� 11,257 20,162,419 62,912,469 $ 5,055 $ 19,242,687 $ 61,287,244 43 THIS PAGE IS INTENTIONALLY LEFT BLANK 44 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 30,2020 Net change in fund balances-total governmental funds $ (1,625,225) Amounts reported for governmental activities in the statement of activities are different because: Capital outlays are 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 are: Capital assets expended in governmental funds $ 19,399,725 Transfers of capital assets to enterprise funds (7,849,493) Depreciation expense (10,261,179) 1,289,053 �n the statement of activities,only the gain or loss on the sale of capital assets is reported, whereas in the governmental funds,the entire proceeds from the sale increase financial resources.Thus,the change in net position differs from the change in fund balances by the book value of the asset being disposed. (1,604,533) Because some revenues will not be collected for several months after the City's fiscal year ends,they are not considered"available"revenues and are deferred in the governmental funds.Deferred inflows of resources increased(decreased) by these amounts this year: Property tax 282,327 Special assessments (355,635) Grants and other 1,076,337 1,003,029 Debt proceeds provide current financial resources to governmental funds,but issuing debt increases long-term liabiliries in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but it reduces long-term liabilities in the statement of net position and does not affect the statement of activities.Also,governmental funds report the effect of issuance discounts and premiums when debt is first issued,whereas these amounts are deferred and amortized in the statement of activities. Debt issuances including premium (1,435,089) Debt repayments 7,065,499 5,630,410 Some items reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.These items consist of: Decrease in accrued interest 12,752 Amartization of bond discount/premium 21,645 Increase in compensated absences (439,715) Deferred amount on debt refundings (5,323) Pension adjustment (3,137,995) OPEB adjustment (64,419) Total additional expenses (3,613,055) �nternal service funds are used by management to charge the costs of certain activities to individual funds.The change in net position of the internal service funds is reported with governmental activities. 136,221 Change in net position of governmental activities $ 1,215,900 See notes to financial statements. 45 CITY OF DUBUQUE,IOWA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30,2020 Business-type Activities-Enterprise Funds Sewage Disposal Water Stormwater Works Utility Utility ASSETS CURRENT ASSETS Cash and pooled cash investments $ 3,916,552 $ 8,954,694 $ 13,689,675 Receivables Accounts 1,550,320 1,164,994 590,615 Accrued interest 50,529 14,644 34,481 Intergovernmental - - 938,641 Prepaid items 1,746 15,440 61,960 Inventories 305,519 726,499 - Total Current Assets 5,824,666 10,876,271 15,315,372 NONCURRENT ASSETS Restricted cash and pooled cash investments 349,437 1,809,816 2,736,375 Capital assets Land 254,858 209,244 21,393,569 Buildings 72,269,461 11,212,597 - Improvements to other than buildings 50,845,742 2,243,414 120,319,432 Machinery and equipment 40,081,900 60,846,248 1,305,088 Construction in progress 4,174,510 7,583,453 22,160,959 Accumulated depreciation (66,838,207) (29,615,794) (19,191,760) Net Capital Assets 100,788,264 52,479,162 145,987,288 Total Noncurrent Assets 101,137,701 54,288,978 148,723,663 TotalAssets 106,962,367 65,165,249 164,039,035 DEFERRED OUTFLOWS OF RESOURCES Pension related deferred outflows 247,876 283,410 62,460 OPEB related deferred outflows 8,901 10,879 4,030 Total Deferred Outflows of Resources 256,777 294,289 66,490 46 EXHIBIT 5 Business-type Activities-Enterprise Funds Governmental Activities- Parking Other Enterprise Internal Service Facilities Funds Total Funds $ 746,291 $ 2,179,803 $ 29,487,015 $ 6,963,429 103,320 424,884 3,834,133 268,177 2,685 - 102,339 19,978 - 3,093,798 4,032,439 - 9,047 12,688 100,881 183,763 - 2,044 1,034,062 65,803 861,343 5,713,217 38,590,869 7,501,150 383,404 199,787 5,478,819 - 2,900,152 36,000 24,793,823 - 62,216,456 13,541,511 159,240,025 - 3,795,798 1,345,910 178,550,296 - 2,425,115 10,415,234 115,073,585 356,590 194,403 - 34,113,325 - (19,180,244) (8,451,260) (143,277,265) (263,134) 52,351,680 16,887,395 368,493,789 93,456 52,735,084 17,087,182 373,972,608 93,456 53,596,427 22,800,399 412,563,477 7,594,606 80,921 503,625 1,178,292 322,641 2,473 18,791 45,074 - 83,394 522,416 1,223,366 322,641 47 CITY OF DUBUQUE,IOWA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30,2020 Business-type Activities-Enterprise Funds Sewage Disposal Water Stormwater Works Utility Utility LIABILITIES CURRENT LIABILITIES Accounts payable $ 358,918 $ 1,324,941 $ 1,536,084 Accrued payroll 60,326 86,476 20,559 Loans payable-current - 1,000,000 - General obligation bonds payable 633,584 732,649 1,000,952 Revenue bonds payable - 340,000 - Capital loan notes payable 3,000,000 895,000 2,199,000 Accrued compensated absences 31,181 22,890 250 Accrued interest payable 128,397 64,791 150,776 Total Current Liabilities 4,212,406 4,466,747 4,907,621 NONCURRENT LIABILITIES Loans payable - 1,000,000 - General obligarion bonds payable 9,205,857 10,868,576 7,668,210 Revenue bonds payable - 3,839,794 28,526,473 Capital loan notes payable 61,798,641 9,283,948 39,789,058 Accrued compensated absences 127,586 261,640 11,413 Netpension liabiliry 1,045,836 1,195,762 263,522 Total OPEB liabiliry 201,692 246,512 91,321 Total Noncurrent Liabiliries 72,379,612 26,696,232 76,349,997 Total Liabilities 76,592,018 31,162,979 81,257,618 DEFERRED INFLOWS OF RESOURCES Pension related deferred inflows 182,605 208,782 46,011 OPEB related deferred inflows 11,494 14,048 5,204 Deferred amount on refunding 19,439 22,561 20,773 Total Deferred Inflows of Resources 213,538 245,391 71,988 NET POSITION Netinvestmentin capital assets 34,627,197 25,831,633 68,123,801 Restricted by bond ordinance/development agreement - 567,025 2,080,000 Unrestricted (4,213,609) 7,652,510 12,572,118 Total Net Position $ 30,413,588 $ 34,051,168 $ 82,775,919 See notes to financial statements. 48 EXHIBIT 5 Business-type Activities-Enterprise Funds Governmental Activities- Parking Other Enterprise Internal Service Facilities Funds Total Funds $ 85,390 $ 1,650,847 $ 4,956,180 $ 1,420,037 23,729 148,105 339,195 32,543 63,545 - 1,063,545 - 534,956 14,668 2,916,809 - - - 340,000 - - - 6,094,000 - 2,325 3,414 60,060 - 15,166 2,702 361,832 - 725,111 1,819,736 16,131,621 1,452,580 88,786 - 1,088,786 - 5,209,965 351,439 33,304,047 - - - 32,366,267 - - - 110,871,647 - 8,911 249,353 658,903 - 341,412 2,124,865 4,971,397 1,361,287 56,025 425,795 1,021,345 - 5,705,099 3,151,452 184,282,392 1,361,287 6,430,210 4,971,188 200,414,013 2,813,867 59,612 371,007 868,017 237,683 3,193 24,264 58,203 - 1,471 - 64,244 - 64,276 395,271 990,464 237,683 46,453,406 16,721,075 191,757,112 93,456 540,339 - 3,187,364 - 191,590 1,235,281 17,437,890 4,772,241 $ 47,185,335 $ 17,956,356 $ 212,382,366 $ 4,865,697 49 CITY OF DUBUQUE,IOWA STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30,2020 Business-type Activities-Enterprise Funds Sewage Disposal Water Stormwater Works Utility Utility OPERATING REVENUES Charges for sales and services $ 12,592,624 $ 9,223,000 $ 4,972,308 Other 12,463 49,979 60 Total Operaring Revenues 12,605,087 9,272,979 4,972,368 OPERATING EXPENSES Employee expense 3,406,154 2,943,258 1,305,530 Utilities 757,125 827,417 28,525 Repairs and maintenance 851,294 207,802 88,050 Supplies and services 1,529,394 1,533,566 483,611 Insurance 101,283 87,170 58,444 Depreciation 3,425,283 1,212,928 1,921,046 Total Operating Expenses 10,070,533 6,812,141 3,885,206 OPERATING INCOME(LOSS) 2,534,554 2,460,838 1,087,162 NONOPERATING REVENUES(EXPENSES) Intergovemmental - - 54,169 Investment earnings 171,508 224,393 330,956 Contributions - - 415,924 Interest expense (1,655,356) (819,270) (1,989,336) Gain(loss)on disposal of assets 1,545 741 (12,629) NetNonoperating Revenues(Expenses) (1,482,303) (594,136) (1,200,916) INCOME(LOSS)BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS 1,052,251 1,866,702 (113,754) CAPITAL CONTRIBUTIONS 69,575 19,380 12,343,834 TRANSFERS IN - 949,471 483,282 TRANSFERS OUT (174,562) (142,884) - CHANGE IN NET POSITION 947,264 2,692,669 12,713,362 NET POSITTON,BEGINNING 29,466,324 31,358,499 70,062,557 NET POSITION,ENDING $ 30,413,588 $ 34,051,168 $ 82,775,919 See notes to financial statements. 50 EXHIBIT 6 Business-type Activities-Enterprise Funds Governmental Other Activities- Parking Enterprise Internal Facilities Funds Total Service Funds $ 2,173,719 $ S,155,740 $ 34,117,391 $ 14,298,761 139,625 39,906 242,033 70,112 2,313,344 5,195,646 34,359,424 14,368,873 832,278 5,242,008 13,729,228 2,443,277 337,524 112,748 2,063,339 37,632 232,103 1,100,492 2,479,741 54,093 525,502 1,661,851 5,733,924 11,643,220 102,058 65,482 414,437 174,646 1,173,158 1,158,982 8,891,397 40,868 3,202,623 9,341,563 33,312,066 14,393,736 (889,279) (4,145,917) 1,047,358 (24,863) - 2,531,111 2,585,280 - 39,420 30,217 796,494 158,405 79,942 84,280 580,146 - �i�d,sds� �i,igo� �4,64i,�o�> - (35,663) (113,620) (159,626) 2,679 (92,866) 2,530,808 (839,413) 161,084 (982,145) (1,615,109) 207,945 136,221 194,403 1,524,575 14,151,767 - 414,246 1,695,964 3,542,963 - (513,374) - (830,820) - (886,870) 1,605,430 17,071,855 136,221 48,072,205 16,350,926 l 95,310,51 l 4,729,476 $ 47,185,335 $ 17,956,356 $ 212,382,366 $ 4,865,697 51 CITY OF DUBUQUE, IOWA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2020 Business-type Activities-Enterprise Funds Sewage Disposal Water Stormwater Parking Works Utility Utility Facilities CASH FLOWS FROM OPERATING ACTIV ITIES Cash received from customers $ 12,506,959 $ 9,088,706 $ 4,902,513 $ 2,200,072 Cash payments to suppliers for goods and services (4,011,612) (1,916,566) 429,089 (1,139,218) Cash payments to employees for services (3,547,490) (2,764,086) (1,350,410) (802,079) Other operating receipts 12,463 49,979 60 139,625 NET CASH PROVIDED BY(USED FOR)OPERATING ACTNITIES 4,960,320 4,458,033 3,981,252 398,400 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds - 949,471 483,282 414,246 Transfers to other funds (174,562) (142,884) - (513,374) Contributions - - 415,924 79,942 Intergovernmental grant proceeds - - - - NET CASH PROVIDED BY(USED FOR) NONCAPITAL FINANCING ACTNITIES (174,562) 806,587 899,206 (19,186) CASH FLOWS FROM CAPiTAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets 1,545 741 - - Acquisition and construction of capital assets (1,737,603) (3,946,290) (5,747,444) - Proceeds from issuance of debt 2,028,430 4,844,418 6,346,265 126,133 Premium on debt issuance 40,573 48,688 ]0,819 5,410 Paymentofdebt (4,731,132) (4,133,779) (2,781,935) (780,290) Interestpaid (1,668,972) (834,341) (2,066,462) (194,100) Intergovernmental grant proceeds - - 369,602 - NET CASH PROVIDED(USED FOR)CAPITAL AND RELATED FINANCING ACTNITIES (6,067,159) (4,020,563) (3,869,155) (842,847) CASH FLOWS FROM INVESTING ACTNITIES Interest received 168,986 220,128 323,127 39,039 NET INCREASE(DECREASE)IN CASH AND POOLED INVESTMENTS (1,112,415) 1,464,185 1,334,430 (424,594) CASH AND CASH EQUNALENTS,BEGINNING 5,378,404 9,300,325 15,091,620 1,554,289 CASH AND CASH EQUNALENTS,ENDING $ 4,265,989 $ 10,764,510 $ 16,426,050 $ 1,129,695 52 EXHIBIT 7 Business-type Activities-Enterprise Funds Governmental Other Activities- Enterprise Internal Funds Total Service Funds $ 4,733,441 $ 33,431,691 $ 14,258,473 �z,961,4zs� �9,s99,�32� �1z,�4�,ss�> �s,o6o,�49� ��3,sz4,z�4� �z,364,43�� 39,906 242,033 70,112 (3,248,227) 10,549,778 (783,433) 1,695,964 3,542,963 - - (830,820) - 1,608,855 2,104,721 - 613,900 613,900 - 3,918,719 5,430,764 - 16,500 18,786 2,679 �4zo>ii�) �>>,ssi,4s4� - - 13,345,246 - - 105,490 - ��4,szz� ��z,44�,9sa� - (2,064) (4,765,939) - - 369,602 - �a2o,so3> �is,zzo,22�� z,6�9 427,981 1,]79,261 158,304 677,970 1,939,576 (622,450) 1,701,620 33,026,258 7,585,879 $ 2,379,590 $ 34,965,834 $ 6,963,429 (Continued) 53 CITY OF DUBUQUE, IOWA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2020 Business-type Activities-Enterprise Funds Sewage Disposal Water Stormwater Parking Works Urility Utility Facilities RECONCILIATION OF OPERATING INCOME(LOSS) TO NET CASH PROVIDED BY(USED FOR)OPERATING ACTiViTiES Operating income(loss) $ 2,534,554 $ 2,460,838 $ 1,087,162 $ (889,279) Adjustments to reconcile operating income(loss)to net cash provided by(used for)operating activities Depreciation 3,425,283 1,212,928 1,921,046 1,173,158 Change in assets and liabilities (Increase)decreasein receivables (85,665) (134,294) (69,795) 26,353 (increase)decrease in inventories and prepaid items 25,870 (10,125) 19,854 310 Increase(decrease)in accounts payable (798,386) 749,514 1,067,865 57,659 Increase(decrease)in accrued liabilities (6,650) 47,154 3,648 (5,798) Increase(decrease)net pension liability (292,865) (6,033) (83,048) (15,433) (Increase)decrease in deferred outflows 103,382 31,308 28,562 12,149 Increase in deferred inflows 87,236 129,482 22,337 33,594 Increase(decrease)in total OPEB liability (32,439) (22,739) (16,379) 5,687 Total Adjustments 2,425,766 1,997,195 2,894,090 1,287,679 NET CASH PROVIDED BY(USED FOR)OPERATING ACTiVTTiES $ 4,960,320 $ 4,458,033 $ 3,981,252 $ 398,400 NONCASH CAPITAL AND RELATED FiNANCiNG ACTIVITIES Contribution of capital assets from outside sources $ 69,575 $ 19,380 $ 4,688,744 $ - Contributions of capital assets from Governmental Activities $ - $ - $ 7,655,090 $ 194,403 See notes to financial statements. 54 EXHIBIT 7 (continued) Business-type ActiviLies-Enterprise Funds Governmental Other Activities- Enterprisc Internal Funds Total Service Funds $ (4,145,917) $ 1,047,358 $ (24,863) 1,158,982 8,891,397 40,868 (422,299) (685,700) (40,288) (2,563) 33,346 (173,492) (18,289) 1,058,363 (664,504) 16,865 55,219 4,620 (142,952) (540,331) (98,165) 88,083 263,484 60,190 200,286 472,935 112,201 19,577 (46,293) - 897,690 9,502,420 (758,570) $ (3,248,227) $ 10,549,780 S (783,433) $ - $ 4,777,699 $ - $ - $ 7,849,493 $ - 55 CITY OF DUBUQUE,IOWA STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES EXHIBIT 8 AGENCY FUNDS JUNE 30, 2020 Agency Funds ASSETS Cash and pooled cash investments $ 1,921,801 Accounts receivable 57,633 Prepaids 7,552 Accrued interest 3,351 Total Assets $ 1,990,337 LIABILITIES Due to other agency $ 1,990,337 Total Liabilities $ 1,990,337 See notes to financial statements. 56 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 The notes to financial statements contain a summary of significant accounting policies and other notes considered necessary far an understanding of the financial statements of the City and are an integral part of this report. The index to the notes is as follows: 1. Summary of Significant Accounting Policies 2. Deficit Fund Equity 3. Cash on Hand, Deposits, and Investments 4. Notes Receivable 5. Interfund Balances and Transfers 6. Capital Assets 7. Long-Term 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. Subsequent Events 15. Prospective Accounting Pronouncements 16. Tax Abatements 57 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 1 —SUMMARY 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 Ciry is considered to be financially accountable. The City has no blended component units. The discretely presented component units are reported 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 for the Dubuque metropolitan area. The City appoints a voting majority of the Agency's governing board and has authority over those persons responsible for 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, 2020, $652,637 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 Ciry 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 properry of the Organization be transferred to the City of Dubuque, Iowa. During the fiscal year 2008, 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 property of the Organization shall be distributed to the City of Dubuque, Iowa after paying or making provision for 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 governmental 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 for the Component Units may be obtained from the City of Dubuque's Finance Department for 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. 58 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 1 —SUMMARY 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 E-9ll 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 government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for seroices. 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 segment are offset by program revenues. Direct expenses are those clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants, contributions, and interest restricted to meeting the operational or capital requirements of a particular function ar segment. Taxes and other items not properly included among program revenues are reported instead as geneNal revenues. Separate financial statements are provided for governmental funds, proprietary funds, and a fiduciary fund, even though the latter is excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Measurement Focus,Basis of Accounting, and Financial Statement Presentation 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. 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 far 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 reported using the current financial resources measurernent 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 ar 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). 59 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 1 —SUMMARY 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 judgments, 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 government, except those required to be accounted for in another fund. The Tax IncNement Financing Fund is used to account for the receipt of property taxes, for the payment of proj ects within the tax increment financing district, and for the payment of remaining principal and interest costs on the tax increment financing districts' long-term debt service. The Community Development Fund is used to account for the use of Community Development Block Grant funds as received from federal and state governmental agencies. 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 government is obligated in some manner for the payment. The City reports the following maj or proprietary funds: The Sewage Disposal Works Fund is used to account for the operations of the City's sewage disposal works and services. The Water Utility Fund is used to account for the operations of the City's water facilities and services. The Stormwater Utility Fund is used to account for the operations of the City's stormwater services. The Parking Facilities Fund is used to account for 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 worker'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 funds, other than agency funds, use the economic resources measurement focus and the full accrual basis of accounting. Agency funds use the full acci^ual basis of accounting but do not have a measurement focus and therefore report only assets and liabilities. The City reports Agency Funds to account for assets held by the City as an agent under the cable franchise agreement, for the Dubuque Racing Association, and for the decommissioning of the prior Flexsteel site. 60 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) As a general rule the effect of interfund activiry has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the City's water and sewer function and various other functions of the 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 reparted 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-term investments with original maturities of three months or less from the date of acquisition. The cash balances of most City funds are pooled and invested. Interest earned on investments is recorded in the General Fund unless otherwise provided by law. Investments are stated at fair value except for the investment in the Iowa Public Agency Investment Trust and non-negotiable certificates of deposit which are valued at amortized cost. For purposes of the Statement of Cash Flows, all short-term cash investments 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 interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental 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 30,2020 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Advances between funds, as reported in the fund financial statements, are offset by a nonspendable fund balance account in applicable governmental funds to indicate that they 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, 2020, and 2020 unpaid taxes. The succeeding year property tax receivable represents taxes certified by the City to be collected in the next fiscal year for the purposes set out in the budget for the next fiscal year. By statute, the City is required to certify its budget to the County Auditor by March 15 of each year for the subsequent fiscal year. However, by statute, the tax asking and budget certification for the following fiscal year becomes effective on the first day of that year. Although the succeeding year property tax receivable has been recorded, the related revenue is reported 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. Special asssessment receivable represents the amounts due from individuals for work done which benefits their property. These assessments are payable by invidviduals in not less than ten nor more than twenty annual installments. Each annual installment with interest on the unpaid balance is due on September 30 and is subject to the same interest and penalties as the other tax. 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 governmental 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. 62 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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. 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 ageement, or 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 statute for certain specified uses. Capital Assets Capital assets, which include property, plant, equipment, intangibles, and infrastructure 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 for 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 prior 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 63 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Deferred Outflows of Resources Deferred outflows of resources represent a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (expense/expenditure)until then. Deferred outflows of resources consist of unrecognized items not yet charged to pension and OPEB expense and contributions from the employer after the measurement date but before the end of the employer's reporting period. 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 these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Long-Term Obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reparted 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 reported 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 reported by the Systems'. For this purpose,benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. For the governmental activities, the net pension liability is generally liquidated by the General Fund, Community Development Fund, and Seciton VIII Housing Fund. 64 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Total OPEB Liability For purposes of ineasuring the total OPEB liability, deferred outflows of resources related to OPEB and OPEB expense, information has been determined based on the City's actuary report. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. For the governmental activities, the total OPEB liability is generally liquidated by the General Fund, Community Development Fund, and Section VIII Housing Fund. Deferred Inflows of Resources 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 and OPEB expense. Net Position/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 statute. The net position restricted for minority interest is calculated at 22.7% of unrestricted net position, based on the 1976 revenue bond resolution authorizing the issuance of revenue bonds for the construction of the landfill. 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 investment in capital assets excludes unspent debt proceeds. Unspent debt proceeds were $4,034,50] for the governmental activities and$2,448,390 for business-type activities. • Restricted: This consists of net position that is legally restricted by outside parties or by law through constitutional provisions or enabling legislation. Net position restricted through enabling legislation as of June 30, 2020 consists of $5,055 far debt service and $57,032 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 investment in capital assets. 65 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 or they are legally or contractually 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 ar federal laws or imposed by law through constitutional provisions or enabling legislation. • Committed: Committed fund balances can be used only for specific purposes determined pursuant to constraints formally imposed by the City Council through resolution approved prior to year-end. Those committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use by resolution. • 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 autharity to the City Manager, and Director of Finance and Budget. • 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 specific 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. 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 governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the government'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 for 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 20% of the total General Fund operating revenue 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 portion of the revenue sources are beyond the City's control and therefore uncertain. None of the City's policies qualify as stabilization arrangements. 66 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Budgets and Budgetary Accounting The budgetary comparison and related disclosures are reported as Required Supplementary Information. Other Significant Accounting Policies Other significant accounting policies are set forth in the financial statements and the notes thereto. 67 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 2—DEFICIT FUND EQUITY The following funds have deficit net position amounts as of June 30, 2020: Internal Service Funds: General Service $ 652,820 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 $11,261 for the City and $1,200 for the Dubuque Metropolitan Area Solid Waste Agency. Deposits. At year-end, the City's carrying amount of deposits was $61,227,976, and the bank balance was $62,024,494. The City's deposits in banks at June 30, 2020, were entirely covered by federal depository insurance or by the State Sinking Fund in accardance 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 for the Dubuque Metropolitan Area Solid Waste Agency was $13,322,551, and the bank balance was $13,322,551. The Agency's deposits in banks at June 30, 2020, were entirely covered by federal depository insurance or by the State Sinking Fund in accordance with Chapter 12C of the Code of Iowa. 68 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 3—CASH ON HAND,DEPOSITS,AND INVESTMENTS (continued) Investments. As of June 30, 2020, the City had the following investments and maturities. (The City assumes callable bonds will not be called): Investment Maturiries(In Years) Investment Type Less Than 1 1 to 5 6 to 10 More than 10 Total Money Market Funds- U.S. Treasury $ 1,962,700 $ - $ - $ - $ 1,962,700 U.S. Treasury Securities 2,097,587 1,859,971 - 3,235,784 7,193,342 Federal Agency Obligations 2,912,787 12,034,640 2,399,028 4,906,284 22,252,739 Corporate Stock 89,727 - - - 89,727 $ 7,062,801 $ 13,894,6ll $ 2,399,028 $ 8,142,068 $ 31,498,508 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 institutions 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 investment trusts; and warrants ar improvement certificates of a drainage district. Corporate stock was donated in 1957 to the City to establish the Ella Lyons Peony Trail Permanent 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 of the Ciry's investments, except for U.S. Treasury Securities, Federal Agency Obligations, and Managed Accounts L/T CD which were valued by the custodians of the securities using pricing models based on credit quality, time to maturity, stated interest rates, and market-rate assumptions (Level 2 inputs),were determined using the last reported sales price at current exchange rates. (Level 1 inputs) Interest Rate 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 investment policy limits investments in commercial paper and other corporate debt to the top two highest classifications. The City did not invest in any commercial paper or other corporate debt during the year. The City's investments in Money Market Funds and US Agencies were rated AAA. Concentration of Credit Risk. The City's investment policy does not allow for a prime bankers' acceptance or commercial paper and other corporate debt balances to be greater than ten percent of its total deposits and investments. 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 investments during the year. 69 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 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 returned 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 investment, 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 investments, 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 investments earnings associated with other funds. These funds are the employee benefits, communiry 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 a money market account valued at$1,487,929 as of June 30, 2020. A reconciliation of cash and investments as shown on the government-wide statement of net position far the primary government and statement of fiduciary assets and liabilities follows: Cash on hand $ 11,261 Carrying amount of deposits 61,227,976 Carrying amount of investments 31,498,508 Total $ 92,737,745 Government-wide Cash and pooled cash investments $ 78,184,073 Cash and pooled cash investments-temporarily restricted 12,562,459 Cash and pooled cash investments-permanently restricted 69,412 Fiduciary Cash and pooled cash investments 1,921,801 Total $ 92,737,745 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 Carrying amount of deposits 13,322,551 Total $ 13,323,751 Cash and pooled cash invesrinents $ 7,962,484 Cash and pooled cash investments-temporarily restricted 5,361,267 Total $ 13,323,751 70 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 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 31,2019)follows: Deposits $ 10,976,497 Beneficial interest in assets held by others 1,420,609 Total $ 12,397,106 Cash and pooled cash investments $ 10,976,497 Cash and pooled cash investments-tempararily restricted 1,420,609 Total $ 12,397,106 A reconciliation of cash and investments as shown on the government-wide statement of net position for the Dubuque Convention and Visitors Bureau(June 30,2020)follows: Deposits $ 347,963 Total $ 347,963 Cash and pooled cash inveshnents $ 112,376 Cash and pooled cash investments-temporarily restricted 235,587 Total $ 347,963 71 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 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 far 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, 2020 the City had the following notes receivable. Original Interest Current Balance Rate Issued Maturity Balance Portion Downtown Rehabilitation Loan Program Harry&Rosey's $ 300,000 3 % 2011 7/1/2031 $ 226,568 $ 17,766 Clark Wolff 150,000 3 2001 5/1/2022 17,785 9,556 Gronen Adaptive 300,000 2 2006 5/1/2036 148,552 8,043 Plastic Center,Inc. 270,000 3 2020 6/1/2040 50,044 - HJD Landlord LLC 466,000 3 2016 4/1/2036 466,000 4,111 Interstate Building LLP 300,000 3 2010 9/22/2015 219,137 18,540 Urban Development Action Grant 40 Main,LLC-Note A 300,000 - 2009 6/30/2036 241,250 16,250 Downtown Housing Incentive Loan Caradco Landlord,LLC 4,500,000 3 2012 6/1/2030 3,299,296 ll9,314 40 Main Real Estate Loan 156,583 - 2009 8/1/2022 156,583 - Sales Tax Construction DB&T Community Development Corporation 1,700,000 - 2012 2/1/2032 1,700,000 1,700,000 $ 6,525,215 $ 1,893,580 72 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 4—NOTES RECEIVABLE (continued) Interest Current Rate Balance Portion Communiry Development Installment Loans Receivables Residential Rehabilitation Installment Loan Programs First Time Home Buyers 6 %$ 249,879 $ 57,000 Local Housing Assistance Program(LHAP) 6 25,120 4,000 Homebuyers Assistance Program 6 1,294,797 109,000 Infill 6 221,652 1,000 RRP Reserve - 160,601 55,000 Washington Neighborhood Revitalize - 38,304 1,000 The Accessibility Rehabilitation Program(for rentals) 6 306,019 4,000 Iowa Finance Authority - 896,029 23,373 HOME Program(1) - 135,086 17,000 Historic Preservation Revolving Loan Fund/Historic Preservation Housing Forgivable Loan Program 6 34,248 5,000 MicroLending - 89,987 6,000 TIF Receivables Roasting Solutions - 289,800 289,800 $ 3,741,522 $ 572,173 (1)Principal payments deferred if one tenant is low income At December 31, 2019, Dubuque Initiatives and Subsidiaries had the following notes receivable: City of Dubuque, 5.00%,unsecured, matures July 2023 $ 152,332 Less: current maturities (47,065) Noncurrent portion $ 105,267 73 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 5—INTERFUND BALANCES AND TRANSFERS Interfund balances at June 30, 2020, include amounts due to/from other funds. Interfund balances are as follows: Due From Due To Other Funds Other Funds Governmental activities: General Fund $ 456,500 $ - Nonmajor Governmental - 456,500 $ 456,500 $ 456,500 These balances result from a time lag between the date that 1) transactions are recorded in the accounting system, and 2)payments between funds are made. 74 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 5—INTERFUND BALANCES AND TRANSFERS (continued) Interfund transfers for the year ended June 30, 2020, consisted of the following: Transfers From Tax Sewer Increment Nonmajor Disposal Water Parking Transfer to General Financing Governmental Warks Utility Facilities Total General $ - $ 433,860 $ 3,787,970 $ 174,562 $ 142,884 $ - $ 4,539,276 Tax increment financing - - - - - 513,374 513,374 Community development - 100,000 11,000 - - - 111,000 Debt service 1,109,870 6,298,308 921,184 - - - 8,329,362 Nonmajor Governmental 538,407 2,320,880 793,901 - - - 3,653,188 Water utility - 942,591 6,880 - - - 949,471 Stormwater utility 299,600 - 183,682 - - - 483,282 Parking facilities - 414,246 - - - - 414,246 Nonmajor enterprise 1,695,964 - - - - - 1,695,964 $ 3,643,841 $ 10,509,885 $ 5,704,617 $ 174,562 $ 142,884 $ 513,374 $ 20,689,163 Net capital assets of $7,655,090 and $194,403 were transferred from governmental capital assets to Storm Water Utility and Parking Facilities, respectively. The transfer was reported as a capital contribution in the Storm Water Utility and Parking Facilities Funds. No amounts were reported in the governmental funds, as the amounts did not involve the transfer of financial resources. Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations, and(4) fund capital projects. 75 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 6—CAPITAL ASSETS Capital asset activity for the year ended June 30, 2020,was as follows: Primary Government: Governmental activities: Beginning Transfers Transfers Ending Balance In Out Increases Decreases Balance Capital assets,not being depreciated: Land $ 78,777,621 $ - $ - $ 1,005,397 $ (451,489) $ 79,331,529 Conshuction in Progress 56,019,935 - (7,849,493) 17,549,977 (6,463,664) 59,256,755 Total Capital assets,not being depreciated 134,797,556 - (7,849,493) 18,555,374 (6,915,153) 138,588,284 Capital assets,being depreciated: Buildings 141,858,066 - - 271,247 (2,573,477) 139,555,836 Improvements other than buildings 25,455,654 - - 785,234 (1,514,202) 24,726,686 Machinery and equipment 51,673,620 - - 3,624,057 (2,916,035) 52,381,639 Infrashucture 236,909,111 - - 2,627,476 (96,177) 239,440,410 Total capital assets,being depreciated 455,896,451 - - 7,308,014 (7,099,891) 456,104,574 Less accumulated depreciation for: Buildings (45,863,885) - - (2,398,084) 2,509,135 (45,752,834) Improvements other than buildings (12,474,217) - - (880,192) 614,834 (12,739,575) Machinery and Equipment (29,858,954) - - (3,297,882) 2,745,936 (30,410,900) Infrashucture (82,277,181) - - (3,725,891) 76,942 (85,926,130) Total accumulated depreciation (170,474,237) - - (10,302,049) 5,946,847 (174,829,436) Total capital assets,being depreciated,net 285,422,214 - - (2,994,035) (1,153,044) 281,275,135 Governmental activities capital assets,net $ 420,219,770 $ - $ (7,849,493) $ 15,561,339 $ (8,068,197) $ 419,863,419 76 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 6—CAPITAL ASSETS (continued) Business-type activities: Beginning Transfers Transfers Ending Balance In Out Increases Decreases Balance Capital assets,not being depreciated: Land $ 24,805,263 $ - $ - $ - $ (11,440) $ 24,793,823 Construction in progress 11,853,774 7,849,493 - 17,557,084 (3,147,026) 34,113,325 Total Capital assets,not being depreciated 36,659,037 7,849,493 - 17,557,084 (3,158,466) 58,907,148 Capital assets,being depreciated: Buildings 159,586,137 - - - (346,112) 159,240,025 Improvements other than buildings 177,818,388 - - 916,199 (184,291) 178,550,296 Machinery and equipment 113,861,028 - - 2,922,367 (1,709,810) 115,073,585 Total capital assets,being depreciated 451,265,553 - - 3,838,566 (2,240,213) 452,863,906 Less accumulated depreciation for: Buildings (55,366,625) - - (2,118,361) 346,ll2 (57,138,874) Improvements other than buildings (36,575,209) - - (3,004,617) 147,340 (39,432,486) Machinery and equipment (44,480,324) - - (3,768,419) 1,542,838 (46,705,905) Total accumulated depreciarion (136,422,158) - - (8,891,397) 2,036,290 (143,277,265) Total capital assets,being depreciated,net 314,843,395 - - (5,052,831) (203,923) 309,586,641 Business-type activities capital assets,net $ 351,502,432 $ 7,849,493 $ - $ 12,504,253 $ (3,362,389) $ 368,493,789 77 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 6—CAPITAL ASSETS (continued) Depreciation expense was charged to functions/programs for the primary government as follows: Governmental activities: Public safety $ 929,175 Public works 6,155,998 Health and social services 5,496 Culture and recreation 2,260,698 Community and economic development 68,541 General government 841,274 Capital assets held by the government's internal service funds are charged to various functions based on their usage of their assets 40,867 Total depreciation expense -governmental activities $ 10,302,049 Business-type activities: Sewage disposal works $ 3,425,283 Water utility 1,212,928 Stormwater utility 1,921,046 Parking facilities 1,173,158 Refuse collection 317,135 Salt 27,639 Transit system 814,208 Total depreciation expense-business-type activities $ 8,891,397 78 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 6—CAPITAL ASSETS (continued) Dubuque Metropolitan Area Solid Waste Agency(Component Unit): Beginning Ending Balance Increases Decreases Balance Capital assets,not being depreciated: Land $ 2,737,804 $ - $ - $ 2,737,804 Construction in progress 556,340 2,990,607 (251,348) 3,295,599 Total Capital assets,not being depreciated 3,294,144 2,990,607 (251,348) 6,033,403 Capital assets,being depreciated: Buildings 386,779 - - 386,779 Improvements other than buildings 16,901,278 251,348 (1,249,069) 15,903,557 Machineryandequipment 4,112,793 332,000 (454,625) 3,990,168 Total capital assets,being depreciated 21,400,850 583,348 (1,703,694) 20,280,504 Less accumulated depreciation for: Buildings (74,124) (13,938) - (88,062) Improvements other than buildings (7,467,760) (351,046) 1,249,069 (6,569,737) Machinery and equipment (2,804,766) (199,240) 234,025 (2,769,981) Total accumulated depreciarion (10,346,650) (564,224) 1,483,094 (9,427,780) Total capital assets,being depreciated,net 11,054,200 19,124 (220,600) 10,852,724 Dubuque Metropolitan Area Solid Waste,capital assets $ 14,348,344 $ 3,009,731 $ (471,948) $ 16,886,127 Depreciation expense of$564,224 was charged to the Dubuque Metropolitan Area Solid Waste Agency. 79 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 6—CAPITAL ASSETS (continued) Dubuque Initiatives (Component Unit): Beginning Ending Balance Increases Decreases Balance Capital assets,not being depreciated: Land $ 100,000 $ - $ (100,000) $ - Total Capital assets,not being depreciated 100,000 - (100,000) - Capital assets,being depreciated: Buildings&Land Improvements 12,000,000 - (12,000,000) - Other Property 31,735 - (31,735) - Total capital assets,being depreciated 12,031,735 - (12,031,735) - Less accumulated depreciation for: Buildings (472,744) (474,665) 947,409 - Improvements other than buildings (30,629) (73) 30,702 - Total accumulated depreciation (503,373) (474,738) 978,1ll - Total capital assets,being depreciated,net ll,528,362 (474,738) (11,053,624) - Dubuque Initiatives, capital assets $ 11,628,362 $ (474,738) $ (11,153,624) $ - The Dubuque lnitiatives component unit entered into an agreement to sell the Roshek Building in exchange for cash proceeds of$9,527,861 and various other non-cash considerations of$2,472,139.As a result of this transaction,Roshek Building,LLC results from operations have been reported as miscellaneous income on the government wide statement of net position. 80 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 7—LONG-TERM DEBT General Obligation Bonds. The City issues general obligation bonds to provide funds for 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 $114,120,500. During fiscal year 2020, the City issued $4,240,000 of general obligation bonds, which was used for a current refunding of bonds. The City refunded $4,370,000 of general obligation bonds. The refunding was undertaken to reduce total debt service payments. The results of the transaction is a reduction of$193,675 in future debt service payments for an economic gain of$167,292. 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, 2020, are as follows: Amount Amount Date of Interest Originally Outstanding Purpose Issue Maturity Dates Rates Issued End of Year Cotporate Purpose Series 2012A 03/15/2012 06/O1/14-06/O1/31 2.00-3.00 $ 4,380,000 $ 2,890,000 Corparate Purpose and Refund Series 2012B 03/15/2012 06/O1/13-06/O1/31 2.00-3.13 7,495,000 4,900,000 CorparatePurpose 06/28/2012 06/O1/14-06/Ol/32 2.00-3.90 6,965,000 4,810,000 (taxable)Series 2012C Corporate Purpose Series 2012D 06/28/2012 06/O1/14-06/O1/32 2.00-3.46 7,175,000 - Cotporate Purpose Series 2012E 12/12/2012 06/O1/14-06/O1/32 2.00-3.00 3,640,000 2,190,000 Corparate Purpose (taxable)Series 2012F 12/10/2012 06/O1/14-06/O1/22 1.00-2.20 1,035,000 275,000 CorparatePurpose Series 2012H 12/10/2012 06/O1/15-06/Ol/32 2.00-3.00 2,385,000 1,520,000 Corparate Purpose(taxable) and Refund Series 2012I 12/04/2013 06/O1/13-06/O1/21 0.30-2.20 7,285,000 50,000 Cotporate Purpose Series 2014B 12/08/2014 06/O1/16-06/O1/34 3.00-3.65 18,835,000 15,845,000 Corparate Purpose(taxable) Series 2014C 12/08/2014 06/O1/16-06/O1/34 3.00-4.16 7,615,000 7,045,000 CorparatePurpose Series2016A 04/04/2016 06/O1/U-06/Ol/35 2.00-3.75 2,830,000 2,310,000 Corparate Purpose Refunding Series 2016B 04/04/2016 06/O1/16-06/O1/28 2.00-3.00 10,920,000 5,025,000 Cotporate Purpose Series 2016C 04/04/2016 06/O1/17-06/O1/35 2.00-3.13 4,145,000 3,420,000 Corparate Purpose Series 2017A 04/17/2017 06/O1/18-06/O1/30 3.00 8,495,000 4,925,000 Corporate Purpose Refunding Series 2017B 04/U/2017 06/O1/18-06/Ol/30 3.00 9,745,500 7,730,000 Corparate Purpose Refunding Series 2017C 04/17/2017 06/O1/18-06/O1/30 3.00-3.45 2,120,000 1,745,000 Cotporate Purpose Series 2018A 03/19/2018 06/O1/18-06/O1/31 3.00-4.00 4,950,000 4,300,000 Corparate Purpose Refunding Series 2018B 03/19/2018 06/O1/18-06/O1/26 3.00-3.15 1,005,000 785,000 CorparatePurpose Series 2019A 06/20/2019 06/O1/22-06/Ol/39 3.00 2,240,000 2,240,000 Corporate Purpose Series 2019B 06/20/2019 06/20/20-06/O1/27 3.00 860,000 755,000 Corporate Purpose Refunding Series 2019C 07/03/2019 06/O1/20-06/O1/32 3.00 4,240,000 3,905,000 $ 118,360,500 $ 76,665,000 81 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 7—LONG-TERM DEBT (continued) Annual debt service requirements to maturity for general obligation bonds are as follows: Fiscal Year Governmental Activities Business-type Activities June 30 Principal Interest Principal Interest 2021 $ 4,578,192 $ 1,227,824 $ 2,916,809 $ 1,097,008 2022 3,452,405 1,108,727 3,007,595 1,013,605 2023 3,334,048 1,022,235 3,065,952 927,079 2024 3,079,188 936,395 3,020,812 835,757 2025 3,186,488 856,404 2,983,512 745,541 2026-2030 15,692,123 2,945,283 13,807,558 2,382,542 2031-2035 7,268,961 746,305 6,596,358 556,627 2036-2039 593,748 74,959 81,251 6,191 Total $ 41,185,153 $ 8,918,132 $ 35,479,847 $ 7,564,350 Tax Increment Financing Bonds. The City issues tax increment financing bonds to provide funds for urban renewal projects. The City pledges property 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, 2020, are as follows: Amount Amount Date of Interest Originally Outstanding �rrent Purpose Issue Maturity Dates Rates Issued End of Year Partion Diamond Jo Parking Ramp 10/16/07 06/O1/11-06/O1/37 7.50% $ 23,025,000 $ 18,985,000 $ 590,000 Annual debt service requirements to maturity for tax increment financing bonds are as follows: Fiscal Year Governmental Activities June 30 Principal Interest 2021 $ 590,000 $ 1,423,875 2022 635,000 1,379,625 2023 680,000 1,332,000 2024 730,000 1,281,000 2025 785,000 1,226,250 2026-2030 4,910,000 5,173,625 2031-2035 7,045,000 3,014,625 2036-2037 3,610,000 411,000 Total $ 18,985,000 $ 15,242,000 s2 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 7—LONG-TERM 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, 2020, are as follows: Amount Amount Date of Interest Originally Outstanding Purpose Issue Maturity Datcs Ratcs Issued End of Year Water Uriliry Series 2008D 11/04/2008 06/O1/10-06/O1/23 3.00-5.00 % $ 1,195,000 $ 315,000 Water Utiliry Series 2010D 09/21/2010 06/O1/12-06/O1/30 2.00-4.00 5,700,000 3,850,000 Sales Tax Incrementa12014 06/14/2014 06/O1/23-06/O1/29 4.00-5.00 7,190,000 7,190,000 Sales Tax Incrementa12015A 06/15/2015 06/O1/23-06/O1/31 3.25-4.00 20,800,000 20,800,000 $ 34,885,000 $ 32,155,000 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 125% of the annual principal and interest payments on both bonds. The City sha11 at all times prescribe, fix, and maintain and collect rates, fees and other charges for their services and facilities furnished by the system that are fully sufficient at all times which will (a) equal at least 125% of the debt service requirement of all bonds and parity obligations then outstanding for the year of computation; (b) enable the Ciry to make all required payments, if any, into the debt service reserve fund. For the current year, principal and interest paid and total customer net revenues (operating revenues,plus interest earnings,plus depreciation expense)were$501,658 and$3,898,159,respectively. Except with respect to the Senior SRF Bonds, or any future SRF bonds, the City covenants to establish and maintain a debt service reserve fund in the amount determined 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, or (c) 125% of the average annual principal and interest requirements on the bonds. During the year ended June 30, 2020,the City was in compliance with the revenue bonds' provisions. Pursuant to the Master Resolutions, approved by the City Council, Sales Tax Increment Revenues received as a result of the Flood Mitigation Program under the Award Agreement shall be applied solely for the benefit of the holders of the Series 2016A 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 $39,908,833. 83 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 7—LONG-TERM DEBT (continued) The City issued$7,190,000 Sales Tax Increment Revenue Bonds, June 2014 and$20,800,000 June 2016, 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 Seroice Reserve Account that may secure one or more series of Bonds. Upon the issuance of the Series 2016A Bonds a deposit of$2,080,000 was made into the Debt Service Reserve Account, and the Series 2016A 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 2021 $ 340,000 $ 922,698 2022 355,000 910,598 2023 2,490,000 897,275 2024 3,535,000 1,139,525 2025 3,680,000 1,000,844 2026-2030 16,030,000 2,547,493 2031 5,725,000 335,400 Total $ 32,155,000 $ 7,753,833 Notes Payable. Notes payable have been issued to provide funds for economic development and for the purchase of capital assets. Notes payable at June 30, 2020, are as follows: Amount Amount Date of Interest Originally Outstanding Current Purpose Issue Maturity Dates Rates Issued End of Year Portion 40 Main LLC 08/06/09 06/30/11-06/30/21 6.50 % $ 690,529 $ 91,860 $ 91,860 During Fiscal Year 2010, the City issued $690,529 Urban Renewal Tax Increment Revenue Notes, Taxable Series 2009 (40 Main LLC Project). Interest is payable each December 31 and June 30 at a rate of 6.50%. Principal payments are due each December 31 and June 30 and range from$24,764 to $45,195 with final maturity in 2021. The proceeds were used for the construction of eighteen apartments for market-rate rental and 7,800 square feet of retail space by the Developer on the Development Property in accordance with the terms of the Development Agreement. The debt is owned by Premier Bank and; therefore, constitutes a direct borrowing. Annual debt service requirements to maturity for notes payable are as follows: Fiscal Year Governmental Activities June 30 Principal Interest 2021 $ 91,860 $ 3,549 84 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 7—LONG-TERM DEBT (continued) Capital Loan Notes. Revenue capital loan notes have been issued for the planning and construction of sewer, stormwater, and water capital projects through the State of Iowa State Revolving Loan Funds. The City issued an additional $5,000 of SRF debt in 2020 as part of the Bee Branch stormwater construction project, $5,000 for green alley projects reducing stormwater run off, $80,136 for the Catfish Creek stabilization project, $1,120,000 for CIWA purchase, $866,260 for Kerper sewer project, $2,400,024 for Roosevelt tower, $31,678 for Eagle Point Park project, and $5,970,053 for upper Bee Branch culverts. The City has pledged income derived from the acquired or constructed assets to pay debt service. Capital loan notes payable at June 30, 2020, are as follows: Final Amount Date Maturity Interest Amount Outstanding Current Purpose Authorized Date Rates Authorized End of Year Portion Clear Wells 10/18/07 06/O1/28 2.00 % $ 1,037,000 $ 435,000 $ 48,000 West 32nd St.Detention Basin O1/14/09 06/O1/28 2.00 1,847,000 876,000 98,000 North Catfish Creek Stormwater O1/l3/10 06/O1/30 2.00 800,000 463,000 40,000 North Catfish Creek Sewer O1/13/10 06/O1/30 2.00 912,000 529,000 46,000 Water Meter Replacement 02/12/10 06/O1/30 2.00 7,676,000 1,991,000 154,000 Water and Resource Recovery Center 08/18/10 06/O1/39 2.00 74,285,000 57,961,000 2,538,000 Bee Branch Stormwater 10/27/10 06/O1/41 3.25 7,850,000 6,224,000 211,000 Cogeneration OS/17/13 06/O1/33 2.00 3,048,000 2,116,000 144,000 MeterReplacementSewer OS/3l/13 06/O1/30 3.25 3,058,000 1,991,000 154,000 Bee Branch Stormwater 06/19/15 06/O1/37 1.43 32,446,000 27,682,726 1,176,000 CIWAPurchase 07/07/17 06/O1/37 2.00 10,198,000 4,908,761 512,000 Roosevelt Tower 09/22/17 06/O1/40 2.00 4,400,000 2,844,187 181,000 Kerper Blvd 03/08/19 06/O1/38 0.75 2,763,000 2,201,642 118,000 Bee Branch Culverts 06/07/19 06/O1/40 2.00 16,382,000 6,742,332 674,000 $ 166,702,000 $ 116,965,648 $ 6,094,000 On October 18, 2007 the City entered into an agreement with the Iowa Finance Authority Drinking Water Program Revolving Loan Fund for a line of credit up to $1.037 million. This line of credit was issued to finance the clear well improvements by the Water Fund. The interest rate for this line of credit is 2.00%. Annual payments began in Fiscal Year 2008,with the last payment in Fiscal Year 2028.The note payable is payable solely from the Water Fund. The debt is owned by the Iowa Finance Authority and; therefore, constitutes direct borrowing. On January 14, 2009 the City entered into an agreement with the Iowa Finance Authority Clean Water Program Revolving Loan Fund for a line of credit up to $1.847 million. This line of credit was issued to finance the West 32nd Stormwater Detention Basin improvements by the Stormwater Fund. The interest rate for this line of credit is 2.00%. Annual payments began in Fiscal Year 2009,with the last payment in Fiscal Year 2028.The note payable is payable solely from the Starmwater Fund. The debt is owned by the Iowa Finance Authority and; therefore, constitutes direct borrowing. On January 13, 2010 the City entered into an agreement with the Iowa Finance Authority Clean Water Program Revolving Loan Fund for a line of credit up to $800,000. This line of credit was issued to finance the North Catfish Creek improvements by the Stormwater Fund. The interest rate for this line of credit is 2.00%. Annual payments began in Fiscal Year 2010,with the last payment in Fiscal Year 2030.The note payable is payable solely from the Stormwater Fund. The debt is owned by the Iowa Finance Authority and; therefare, constitutes direct borrowing. On January 13, 2010 the City entered into an agreement with the Iowa Finance Authority Clean Water Program Revolving Loan Fund for a line of credit up to $912,000. This line of credit was issued to finance the North Catfish Creek improvements by the Sanitary Sewer Fund. The interest rate for this line of credit is 2.00%. Annual payments began in Fiscal Year 2010,with the last payment in Fiscal Year 85 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 7—LONG-TERM DEBT (continued) 2030. The note payable is payable solely from the Sanitary Sewer Fund. The debt is owned by the Iowa Finance Authority and; therefore, constitutes direct borrowing. On February 12, 2010 the City entered into an agreement with the Iowa Finance Authority Drinking Water Program Revolving Loan Fund for a line of credit up to $7.676 million. This line of credit was issued to finance the Water Meter Replacements by the Water Fund. The interest rate for this line of credit is 2.00%. Annual payments began in Fiscal Year 2010,with the last payment in Fiscal Year 2031. The note payable is payable solely from the Water Fund. The debt is owned by the Iowa Finance Authority and; therefore, constitutes direct borrowing. On August 18, 2010 the City entered into an agreement with the Iowa Finance Authority Clean Water Program Revolving Loan Fund for a line of credit up to $74.285 million. This line of credit was issued to finance the Water&Resource Recovery Center Renovation and the Green Alley Sponsorship Program by the Sanitary Sewer Fund. The interest rate for this line of credit is 2.00%. Annual payments began in Fiscal Year 2011,with the last payment in Fiscal Year 2039. The note payable is payable solely from the Sanitary Sewer Fund. The debt is owned by the Iowa Finance Authority and; therefore, constitutes direct borrowing. On October 27, 2010 the City entered into an agreement with the Iowa Finance Authority Clean Water Program Revolving Loan Fund for a line of credit up to $7.85 million. This line of credit was issued to finance the Lower Bee Branch Creek Restoration by the Stormwater Fund. The interest rate for this line of credit is 3.25%. Annual payments began in Fiscal Year 2011,with the last payment in Fiscal Year 204 L The note payable is payable solely from the Stormwater Fund. The debt is owned by the Iowa Finance Authority and; therefore, constitutes direct borrowing. On May 17, 2013 the City entered into an agreement with the Iowa Finance Authority Clean Water Program Revolving Loan Fund for a line of credit up to $3.048 million. This line of credit was issued to finance the Water&Resource Recovery Center Cogeneration by the Sanitary Sewer Fund. The interest rate for this line of credit is 3.25%. Annual payments began in Fiscal Year 2011,with the last payment in Fiscal Year 204L The note payable is payable solely from the Sanitary Sewer Fund. The debt is owned by the Iowa Finance Authority and; therefore, constitutes direct barrowing. On May 31, 2013 the City entered into an agreement with the Iowa Finance Authority Clean Water Program Revolving Loan Fund for a line of credit up to $3.058 million. This line of credit was issued to finance the Meter Replacements by the Sanitary Sewer Fund. The interest rate for this line of credit is 3.25%. Annual payments began in Fiscal Year 2011, with the last payment in Fiscal Year 2041. The note payable is payable solely from the Sanitary Sewer Fund. The debt is owned by the Iowa Finance Authority and; therefore, constitutes direct borrowing. On June 19, 2015 the City entered into an ageement with the Iowa Finance Autharity Clean Water Program Revolving Loan Fund for a line of credit up to $31.418 million. This line of credit was issued to finance the Upper Bee Branch Creek Restoration project and Catfish Creek Sponsorship project by the Sales Tax Increment Fund. The interest rate for this line of credit is 1.43%. Annual payments began in Fiscal Year 2016,with the last payment in Fiscal Year 2037. The note payable is payable solely from the Sales Tax Increment Fund. The debt is owned by the Iowa Finance Authority and; therefore, constitutes direct borrowing. 86 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 7—LONG-TERM DEBT (continued) On July 7, 2017 the City entered into an agreement with the Iowa Finance Authority Drinking Water Program Revolving Loan Fund for a line of credit up to $10.198 million. This line of credit was issued to finance the purchase of the Central Iowa Water Association Water System and Improvements by the Water Fund. The interest rate for this line of credit is 2.00%. Annual payments began in Fiscal Year 2018,with the last payment in Fiscal Year 2037. The note payable is payable solely from the Water Fund. The debt is owned by the Iowa Finance Authority and; therefore, constitutes direct borrowing. On March 8, 2019 the City entered into an agreement with the Iowa Finance Authority Clean Water Program Revolving Loan Fund for a line of credit up to $2.763 million. This line of credit was issued to finance the reconstruction of the Kerper Sanitary Sewer project and the Eagle Point Park Sponsorship Project by the Sanitary Sewer Fund. The interest rate for this line of credit is 0.75%. Annual payments began in Fiscal Year 2019,with the last payment in Fiscal Year 2038. The note payable is payable solely from the Sanitary Sewer Fund. The debt is owned by the Iowa Finance Authority and; therefore, constitutes direct borrowing. On June 7, 2019 the City entered into an ageement with the Iowa Finance Authority Clean Water Program Revolving Loan Fund for a line of credit up to $16.382 million. This line of credit was issued to finance the construction of the Bee Branch Creek Restoration Railroad Culverts project by the Stormwater Fund. The interest rate for this line of credit is 2.00%. Annual payments will begin in Fiscal Year 2020,with the last payment in Fiscal Year 2040. The note payable is payable solely from the Stormwater Fund. The debt is owned by the Iowa Finance Authority and; therefore, constitutes direct borrowing. On August 9, 2019 the City entered into an agreement with the Iowa Finance Authority Drinking Water Facilities Financing Program Revolving Loan Fund for a line of credit up to $4.4 million. This line of credit was issued to finance the Roosevelt Street water tower and water distribution improvements and the Eagle Point water treatment plant and water distribution improvements project by the Water Fund. The interest rate for this line of credit is 2.00%. Annual payments will begin in Fiscal Year 2020,with the last payment in Fiscal Year 2040. The note payable is payable solely from the Water Fund. The debt is owned by the Iowa Finance Authority and; therefore, constitutes direct borrowing. 87 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 7—LONG-TERM DEBT (continued) Annual debt service requirements to maturity for capital loan notes are as follows: Fiscal Year Business-rype Activities June 30 Principal Interest 2021 $ 6,094,000 $ 2,249,380 2022 6,195,000 2,125,694 2023 6,313,000 2,012,040 2024 6,443,000 1,890,002 2025 6,573,000 1,765,389 2026-2030 33,535,093 8,120,610 2031-2035 27,156,186 4,992,402 2036-2040 24,255,369 1,171,454 2041 401,000 13,033 Total $ 116,965,648 $ 24,340,004 At June 30, 2020, the City of Dubuque had$14,911,317 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 2022. The Sewer Utility revenue capital loan notes covenants include a requirement for the utility to produce net revenue of at least 110% of the current year debt service requirement. Loans Payable. Loans payable have been issued to fund several City projects. Loans payable at June 30, 2020, are as follows: Amount Amount Date of Interest Originally Outstanding Current Purpose Issue Maturity Dates Rates Issued End of Year Portion Parking Lot Purchase 07/08/08 O1/O1/09-07/O1/23 5.0 % $ 400,000 $ 152,330 $ 63,545 Iowa Finance Autharity 08/26/11 06/O1/20-06/O1/30 3.0 4,500,000 3,299,296 201,865 Bowling&Beyond Ina 10/15/12 12/04/12-12/04/32 - 1,000,000 600,000 50,000 Central Iowa Water 12/O1/16 12/O1/17-12/O1/21 3.0 5,000,000 2,000,000 1,000,000 $ 10,900,000 $ 6,051,626 $ 1,315,410 On July 8, 2008, the City issued a$400,000 loan. Interest is payable each July 1 and January 1 at a rate of 5.00%. Principal payments are due each July 1 and January 1 and range from$9,1 ll to $18,645 with final maturity in 2024. The proceeds were used to purchase parking lots 87, 88, and the north 20 feet 3 inches of lot 86. The debt is owned by Dubuque Initiatives and; therefore, constitutes a direct borrowing. On August 26, 2011,the City issued$4.5 million loan. Interest is payable each December 1 and June 1 at a rate of 3.00%.Principal payments are due each December 1 and June 1 and range from$82,922 to $2,582,540 with final maturity in 2030. The proceeds were used to pay costs of funding workforce housing assistance loans to private developers constructing improvements and rehabilitating historic buildings for residential and commercial use in the Greater powntown Urban Renewal Area. The debt is owned by the Iowa Finance Authority and; therefore, constitutes a direct borrowing. On October 15, 2012, the City terminated the leases with Bowling&Beyond Dubuque,Inc. and entered into a lease buyout agreement. The purchase price is $1.0 million. There is no interest. Principal payments are due each July 25 in the amount of$50,000 with final maturity in 2032. The debt is owned by Michael K. Schmidt and; therefore, constitutes a direct borrowing. ss CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 7-LONG-TERM DEBT (continued) On December 1, 2016, the City issued a$S,OOO,OOO loan. Interest is payable each December 1 at a rate of 3.00%. Principal payments of$1 million are due each December 1 with final maturity in 2022. The proceeds were used to purchase water supply, service and territory. The debt is owned by Iowa Association of Regional Utilities (D/B/A Central Iowa Water Association) and; therefore, constitutes a direct borrowing. 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 2021 $ 251,865 $ 98,979 $ 1,063,545 $ 72,899 2022 257,921 92,923 1,034,205 34,017 2023 264,159 86,685 35,937 2,285 2024 270,583 80,261 18,645 466 2025 277,201 73,643 - - 2026-2030 2,477,567 216,665 - - 2031-2032 100,000 - - - Total $ 3,899,296 $ 649,156 $ 2,152,332 $ 109,667 Changes in Long-term Liabilities. Long-term liability activity for the year ended June 30, 2020, was as follows: Balance Beginning Balance End Due Within of Year Additions Reductions of Year One Year Governmental activities: General obligation bonds $ 46,149,135 $ 1,372,906 $ (6,336,888) $ 41,185,153 $ 4,578,192 Unaccreted premium 812,091 62,184 (34,124) 840,151 - Unamortized discounts (43,398) - 3,607 (39,791) - Total general obligarion bonds 46,917,828 1,435,090 (6,367,405) 41,985,513 4,578,192 Tax increment financing bonds 19,535,000 - (550,000) 18,985,000 590,000 Unamortized discounts (168,566) - 8,872 (159,694) - Total tax increment financing bonds 19,366,434 - (541,128) 18,825,306 590,000 Notes payable 176,054 - (84,194) 91,860 91,860 Loanspayable 3,984,110 - (84,816) 3,899,294 251,865 Compensated absences 5,576,544 3,152,842 (2,713,127) 6,016,259 404,373 Total governmental activities $ 76,020,970 $ 4,587,932 $ (9,790,670) $ 70,818,232 $ 5,916,290 Business-type activities: Generalobligationbonds $ 38,550,865 $ 2,867,094 $ (5,938,113) $ 35,479,846 $ 2,916,809 Unaccreted premium 724,182 105,490 (62,354) 767,318 - Unamortized discounts (29,042) - 2,734 (26,308) - Total general obligation bonds 39,246,005 2,972,584 (5,997,733) 36,220,856 2,916,809 Revenue bonds 32,485,000 - (330,000) 32,155,000 340,000 Unaccreted premium 666,808 - (66,360) 600,448 - Unamortized discounts (54,108) - 4,927 (49,181) - Total revenue bonds 33,097,700 - (39l,433) 32,706,267 340,000 Notes payable 111,655,589 10,478,152 (5,168,094) ll6,965,647 6,094,000 Loans payable 3,152,331 - (1,000,000) 2,152,331 1,063,545 Compensated absences 704,575 349,193 (334,805) 718,963 60,060 Total business-type activities $ 187,856,200 $ 13,799,929 $ (12,892,065) $ 188,764,064 $ 10,474,414 For the governmental activities, compensated absences are generally liquidated by the General Fund, Community Development Fund, and Section VIII Housing Fund. 89 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 7—LONG-TERM DEBT (continued) Legal Debt Margin Calculation. Estimated actual value $ 4,785,964,957 Debt limit- 5% of total actual 239,298,248 valuation Debt applicable to limit (109,020,970) Legal debt margin $ 130,277,278 Dubuque Metropolitan Area Solid Waste Agency General Obligation Bonds. Dubuque Counry, Iowa issued a general obligation landfill facilities bond to provide funds for the acquisition and construction of majar 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, 2020 is as follows: Amount Amount Interest Originally Outstanding Purpose Date of Issue Maturity Date Rate Issued End of Year Landfill Facility 12/30/2014 06/O1/16-06/O1/34 2.0-4.0 % $ 4,500,000 $ 3,535,000 Landfill Facility 12/28/2016 06/O1/17-06/O1/36 3.0 5,100,000 4,385,000 $ 9,600,000 $ 7,920,000 Annual debt service requirements to maturity of the general obligation bond is as follows: Fiscal Year June 30 Principal Interest 2021 $ 425,000 $ 238,359 2022 435,000 225,609 2023 450,000 210,459 2024 465,000 198,609 2025 475,000 186,065 2026-2030 2,605,000 719,488 2031-2035 2,725,000 300,435 2036 340,000 11,050 Total $ 7,920,000 $ 2,090,074 90 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 7—LONG-TERM DEBT (continued) Changes in Long-Term Liabilities. Long term liability activity for the year ended June 30, 2020 is as follows: Balance Beginning Balance Due Within of Year Additions Reductions End of Year One Year General obligation bond $ 8,330,000 $ - $ (410,000) $ 7,920,000 $ 425,000 Unaccreted premium 217,529 - (12,857) 204,672 - Total general obligation bond $ 8,547,529 $ - $ (422,857) $ 8,124,672 $ 425,000 91 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 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 government carries commercial insurance purchased from independent third parties and participates in a local government risk pool. The Ciry 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 125% of expected claims. 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 has established a Workers' Compensation Reserve Fund for insuring benefits provided to City employees which is included in the Internal Service Fund Type. Through May 15, 2020 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 2020. Coverage from a private insurance company is maintained for losses in excess of the stop-loss amount. As of May 15, 2020 the City changed workers' compensation coverage providers. Under this new agreement,the City is fully insured for all claims with the exception of sworn Police Officers and Fire Fighters medical claims. 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 Workers' Compensation Reserve Fund based on actuarial estimates of the amounts needed to pay prior and current year claims. The claims liabiliry of $873,589 in the Health Insurance Reserve Fund and $499,557 in the Workers' 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 information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Changes in reported liabilities, all of which are expected to be paid within one year of year end, for the fiscal years ended June 30, 2020 and 2019, are summarized as follows: Health Workers' Insurance Compensation Reserve Fund Reserve Fund Liabilities at June 30,2018 $ 499,834 $ 996,687 Claims and changes in estimates during fiscal year 2019 9,637,510 693,550 Claimpayments (9,161,398) (667,147) Liabilities at June 30,2019 975,946 1,023,090 Claims and changes in esrimates during fiscal year 2020 10,259,919 - Claimpayments (10,362,276) (523,533) Liabilities at June 30,2020 $ 873,589 $ 499,557 92 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 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 787 members include various governmental entities throughout the State of Iowa. The Pool was formed in August 1986 for 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 portion of any deficiency in capital. Capital contributions are made during the first six years of inembership and are maintained not to exceed 300 percent of the total current members' basis rates or to comply with the requirements of any applicable regulatory authority having jurisdiction over the Pool. The Pool also provides property coverage. Members who elect such coverage make annual 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 Ciry's properry 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 Poo1 for the year ended June 30, 2020,were $986,843. 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, 2020, settled claims have not exceeded the risk pool or reinsurance company coverage since the Pool's inception. 93 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 8—RISK MANAGEMENT(continued) Members agree to continue membership in the Pool through the Iowa Risk Management Agreement for a period of not less than one full year. After such period, a member who has given 60 days' prior written notice may withdraw from the Pool. Upon withdrawal, a formula set forth in the Pool's intergovernmental contract with it's members is applied to determine the amount(if any) to be refunded to the withdrawing member. NOTE 9—COMMITMENTS AND CONTINGENT LIABILITIES Grants The City has received financial assistance from numerous federal and state agencies in the form of grants and entitlements. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, liabilities resulting from disallowed claims, if any,will not have a material effect on the City's financial position as of June 30, 2020. Litigation The City Attorney reported 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 judgments against the City. Construction Contracts The Ciry has recognized as a liability only that portion of construction contracts representing construction completed through June 30, 2020. The City has additional commitments for signed construction contracts of$24,645,567 as of June 30, 2020. These commitments will be funded by federal and state grants, cash reserves, and bond proceeds. Dubuque Metropolitan Area Solid Waste Agency has recognized a liability for only that portion of construction contracts representing construction completed through June 30, 2020. DMASWA has an additional commitments for a signed construction contracts of$1,350,786 as of June 30, 2020. These commitments will be partially funded by bond proceeds. Southwest Arterial The City is currently in process of constructing the Southwest Arterial. As of June 30, 2020, the City has expended$52,182,117 on the project. Upon completion of the project, the Southwest Arterial will be reverted to the State of Iowa. 94 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 10—OTHER POST EMPLOYMENT BENEFITS (OPEB) Plan Description - The City operates a single-employer retiree benefit plan which provides postemployment benefits for eligible participants enrolled in the City-sponsored plans, which include the employees of the Dubuque Metropolitan Area Solid Waste Agency (a component unit). The Plan does not issue a stand-alone financial report. 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 Ciry 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) or 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 goup to be eligible for life insurance benefits. There are approximately 543 active and 46 retired members in the plan, as of most recent actuarial valuation report. Fundin_�Policy-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$5,882,693 was measured as of June 30, 2020, and was determined by an actuarial valuation as of June 30, 2020. The City's proportion is based on the number of employees in the plan. The City's proportion was 98.13% as of June 30, 2020. Changes in the Total OPEB Liability Total OPEB Liabiilty Total OPEB Liability beginning of year $ 6,121,366 Changes for the year: Service cost 288,187 Interest 165,496 Other changes (49,951) Changes in experience (242,264) Changes in assumptions (19,983) Benefit payments (380,158) Net Changes (238,673) Total OPEB Liability end of year $ 5,882,693 95 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 10—OTHER POST EMPLOYMENT BENEFITS (OPEB) (continued) Actuarial Methods and Assumptions - The total OPEB liability in the June 30, 2020 actuarial valuation was determined using the following actuarial assumptions and the entry age normal actuarial cost method, applied to all periods included in the measurement. Rate of inflation effective June 30, 2020 3.00%per annum Rates of salary increase 4.00%per annum, effective June 30, 2020 including inflation Discount rate 2.66% compounded annually, effective June 30, 2020 including inflation Healthcare cost trend rate 6.50% initial rate decreasing by 014% effective June 30, 2020 annually to an ultimate rate of 4.50% Discount Rate - The discount rate used to measure the total OPEB liability was 2.66% which reflects the index rate for 20-year tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher as of the measurement date. Mortality rates are from the PubG.H-2010 Mortality Table. Annual retirement and termination probabilities were developed consistent with the City's experience and the IPERS and MFPRSI retirement patterns. Proj ected claim costs of the medical plan are $12,299-$17,508 per year for retirees depending on the age of retiree. The actuarial assumptions used in the June 30, 2020 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 Changes in the Discount Rate -The following presents the total OPEB Liability of the City, as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is 1% lower(1.66%) or 1%higher(3.66%)than the current discount rate. 1% Decrease (1.66%) Discount Rate (2.66%) 1%Increase(3.66%) Total OPEB Liability $ 6,356,003 $ 5,882,693 $ 5,442,330 Sensitivity of the City's Total OPEB Liability to Chang,es 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(5.50%) or 1%higher (7.50°/o)than the current healthcare cost trend rates. 1%Decrease (5.50°/o) Healthcare Cost Trend 1%Increase (7.50°/o) Rate (6.50%) Total OPEB Liability $ 5,249,207 $ 5,882,693 $ 6,633,694 96 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 10—OTHER POST EMPLOYMENT BENEFITS (OPEB) (continued) OPEB Expense and Deferred Outflows of Resources Related to OPEB -For the year ended June 30, 2020 the City recognized OPEB expense of$452,022. At June 30, 2020 the City reported deferred outflows of resources related to OPEB from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Changes in Experience $ - $ 218 458 , Changes in Assumptions (259,614) 116,769 $ (259,614) $ 335,227 The amount reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows: Year Ending June 30 Deferred Outflows of Resources Deferred Inflows of Resources 2021 $ 34,897 $ (36,557) 2022 34,897 (36,557) 2023 34,897 (36,557) 2024 34,897 (36,557) 2025 34,897 (36,557) Thereafter 85,129 (152,442) $ 259,614 $ (335,227) Dubuque Metropolitan Area Solid Waste Agencv Specific(DMASWA) OPEB Disclosures Total OPEB Liabilitv-DMASWA OPEB liability of$ll2,052 was measured as of June 30, 2020, and was determined by an actuarial valuation as of June 30, 2020. The Agency's portion is based on the number of employees in the plan. The Agency's portion was 1.87% as of June 30, 2020. Total OPEB Liability Total OPEB Liability beginning of year $ 117,066 Changes for the year: Service Cost 5,489 Interest 3,152 Other Changes (1,418) Changes in experience (4,615) Changes in assumptions (381) Benefit payments (7,241) Net Changes (5,014) Total OPEB Liability end of year $ ll 2,052 97 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 10—OTHER POST EMPLOYMENT BENEFITS (OPEB) (continued) Sensitivity of the City's Total OPEB Liability to Changes in the Discount Rate-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 a discount rate that is 1%lower(1.66%) or 1%higher(3.66%) than the current discount rate. 1%Decrease (1.66%) Discount Rate (2.66%) 1%Increase (3.66%) Total OPEB Liability $ 121,066 $ 112,052 $ 103,663 Sensitivity of the DMASWA's Total OPEB Liability to Chan�es 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(5.50%) or 1%higher(7.50%) than the current healthcare cost trend rates. 1%Decrease (5.50%) Healthcare Cost Trend 1% Increase (7.50%) Rate (6.50%) Total OPEB Liability $ 99,985 $ 112,052 $ 126,356 OPEB Expense and Deferred Outflows of Resources Related to OPEB -For the year ended June 30, 2020 the DMASWA recognized OPEB expense of$8,610. At June 30, 2020 the DMASWA reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Changes in Experience $ - $ (4,161) Changes in Assumptions 4,945 (2,224) $ 4,945 $ (6,385) The amount reported as deferred outflows of resources related to OPEB will be recognized as OPEB expense as follows: Deferred Outflows of Deferred Inflows of Year Ending June 30 Resources Resources 2021 $ 665 $ (696) 2022 665 (696) 2023 665 (696) 2024 665 (696) 2025 665 (696) Thereafter 1,620 (2,905) $ 4,945 $ (6,385) 98 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 11 —EMPLOYEE PENSION PLANS Aggregate Pension Expense The primary government participates in two public pension systems,Iowa Public Employees'Retirement System(IPERS) and Municipal Fire and Police Retirement System of Iowa(MFPRSI). The component unit DMASWA participates in IPERS only. The following secitons outline the pension related disclosures for each pension of both entities. The aggregate amount of recognized pension expense for the period associated with the net pension liability for all plans is $9,429,159 for the primary government. Other aggregate amounts related to pension are separately displayed in the financial statements. Iowa Public Employees Retirement System IPERS Plan Description—IPERS membership is mandatory for employees of the City, except for those covered by another retirement system. Employees of the City are provided with pensions through a cost-sharing multiple employer defined benefit pension plan administered by 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 9ll7, Des Moines,Iowa 50306-9117 or at www.ipers.or�. IPERS benefits are established under Iowa Code chapter 97B and the administrative rules thereunder. Chapter 97B and the administrative rules are the official plan documents. The following brief description is provided for general informational purposes only. Refer to the plan documents for more information. Pension Benefits —A Regular member may retire at normal retirement age and receive monthly benefits without an early-retirement reduction. Normal 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 formula used to calculate a Regular member's monthly IPERS benefit includes: • A multiplier based on years of service. • The member's highest five-year average salary, 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 for the rest of the member's lifetime. However, to combat the effects of inflation, retirees who began receiving benefits prior to July 1990 receive a guaranteed dividend with the regular November benefit payments. 99 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 11—EMPLOYEE PENSION PLANS (continued) Disability and Death Benefits - A vested member who is awarded federal Social Security disability or Railroad Retirement disability benefits is eligible to claim IPERS benefits regardless of age. Disability benefits are not reduced for early retirement. If a member dies before retirement, the member's beneficiary wi11 receive a lifetime annuity or a lump-sum payment equal to the present actuarial value of the member's accrued benefit or calculated with a set formula,whichever is greater. When a member dies after retirement, death benefits depend on the benefit option the member selected at retirement. Contributions - 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 actuarial contribution rate be determined using the "entry age normal" actuarial cost method and the actuarial assumptions and methods approved by the IPERS Investment Board. The actuarial contribution rate covers normal cost plus the unfunded actuarial liability payment based on a 30-year amortization period. The payment to amortize the unfunded actuarial liability is determined as a level percentage of payroll, based on the Actuarial Amortization Method adopted by the Investment Board. In fiscal year 2020, pursuant to the required rate, Regular members contributed 6.29% of covered payroll and the City contributed 9.44% for a total rate of 15.73%. The City's total contributions to IPERS for the year ended June 30, 2020 were $2,459,936. The Dubuque Metropolitan Area Solid Waste Agency's total contributions to IPERS for the year ended June 30, 2020 were $62,182. Citv Suecific IPERS Disclosures Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2020, the City reported a liabiliry of $19,350,354 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liabiliry was based on the City's share of contributions to IPERS relative to the contributions of all IPERS participating employers. At June 30,2019,the City's collective proportion was .33194%which was a decrease of-0.00135%from its proportion measured as of June 30, 2018. 100 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 11—EMPLOYEE PENSION PLANS (continued) For the year ended June 30, 2020,the City recognized pension expense of$3,243,4ll. At June 30, 2020, 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 Differences between expected and actual experience $ 53,645 $ 695,737 Changes of assumptions 2,072,700 - Net difference between projected and actual - 2,180,553 earnings on IPERS'investments Changes in proportion and differences between City's contributions and City's proportionate share of contributions - 502,336 City contributions subsequent to the measurement date 2,459,936 - Total $ 4,586,281 $ 3,378,626 $2,459,936 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, 2021. 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 2021 $ 198,509 2022 (625,853) 2023 (409,103) 2024 (369,913) 2025 (45,921) $ (1,252,281) Sensitivity of the Cit. '�portionate Share of the Net Pension Liability to Changes in the Discount Rate- The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.00%, 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. lol CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 11—EMPLOYEE PENSION PLANS (continued) 1% Discount 1% Decrease Rate Increase (6.0)% (7.0)% (8.0)% City's proportionate share of the net pension liability: $ 34,359,983 $ 19,350,354 $ 6,760,443 Dubuque Metropolitan Area Sold Waste A�encv Specific(DMASWA)IPERS Disclosures Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2020, the DMASWA reported a liability of$489,134 for its proportionate share of the net pension liabiliry. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined 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, 2019, the DMASWA's collective proportion was 0.008391% which was an increase of 0.0001934%from its proportion measured as of June 30, 2018. For the year ended June 30, 2020, the DMASWA recognized pension expense of$81,986. At June 30, 2020, the DMASWA 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 actual experience $ 1,356 $ 17,587 Changes of assumptions 52,393 - Net difference between projected and actual - 55,120 earnings on IPERS'investments Net changes in proportion and differences between Agency's contributions and Agency's proportionate share of contributions - 12,698 Agency contributions subsequent to the measurement date 62,182 - Total $ 115,931 $ 85,405 102 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 11—EMPLOYEE PENSION PLANS (continued) $62,182 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, 2021. Other 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 2021 $ 5,018 2022 (15,820) 2023 (10,341) 2024 (9,351) 2025 (1,162) $ (31,656) Sensitivitv of the Agenc. '�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: $ 868,543 $ 489,134 $ 170,889 There were no non-employer contributing entities at IPERS. Actuarial Assumptions - The total pension liability in the June 30, 2019, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Rate of inflation 2.60%per annum (effective June 30, 2017) Rates of salary increase 3.25 to 16.25% average, including inflation. (effective June 30, 2017) Rates vary by membership goup. Long-term Investment rate of return 7.00% , compounded annually,net of investment (effective June 30, 2017) expense, including inflation. Wage Growth 3.25°/o per annum based on 2.60°/o inflation (effective June 30, 2017) and 0.65%real wage inflation 103 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 11—EMPLOYEE PENSION PLANS (continued) The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an economic assumption study dated March 24, 2017 and a demographic assumption study dated June 28,2018. Mortality rates used in the 2019 valuation were based on the RP-2014 Employee and Healthy Annuitant Tables with MP-2017 generational adjustments. 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-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are suininarized in the following table: Asset Long-Term Expected Asset Class Allocation Real Rate of Return Domestic equity 22 % 5.60°/a International equity 15 6.08 Global smart beta equity 3 5.82 Core plus fixed income 27 1.71 Public credit 3.5 3.32 Public real assets 7 2.81 Cash 1.0 (0.21) Private equity 11 10.13 Private real assets 7.5 4.76 Private credit 3 3.01 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, actuarially 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 return on IPERS' investments was applied to all periods of proj ected benefit payments to determine the total pension liability. Il'ERS' Fiduciary Net Position - Detailed information about the pension plan's fiduciary net position is available in the separately issued IPERS financial report which is available on IPERS' website at www.ipers.org. Pavables to IPERS - At June 30, 2020, the City reported payables to the defined benefit pension plan of $104,231 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. 104 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 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 4ll of the Code of Iowa. Employees of the City are provided with pensions through a cost-sharing multiple employer defined benefit pension plan administered by MFPRSI. MFPRSI issues a stand-alone financial report which is available to the public by mail at 7155 Lake Drive, Suite#201,West Des Moines,Iowa 50266 or at www.mfprsi.org. MFPRSI benefits are established under Chapter 411 of the Code of Iowa and the administrative rules thereunder. Chapter 411 of the Code of Iowa and the administrative rules are the official plan documents. The following brief description is provided for general informational purposes only. Refer to the plan documents for more information. Pension Benefits - Members with 4 or more years of service are entitled to pension benefits beginning at age 55. Full service retirement benefits are granted to members with 22 years of service, while partial benefits are available to those members with 4 to 22 years of service based on the ratio of years completed to years required (i.e., 22 years). Members with less than 4 years of service are entitled to a refund of their contribution only,with interest, for the period of employment. Benefits are calculated based upon the member's highest 3 years of compensation. The average of these 3 years becomes the member's average final compensation. The base benefit is 66% 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 work. A member can elect a 3, 4, or 5 year DROP period. By electing to participate in DROP, the member is signing a contract indicating the member will retire at the end of the selected DROP period. During the DROP period the member's retirement benefit is frozen and a DROP benefit is credited to a DROP account established for the member. Assuming the member completes the DROP period, the DROP benefit is equal to 52% of the member's retirement benefit at the member's earliest date eligible and 100% if the member delays enrollment for 24 months. At the member's actual date of retirement, the member's DROP account will be distributed to the member in the form of a lump sum or rollover to an eligible plan. Disability and Death Benefits — Disability 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 or the member's service retirement bene�t calculation amount. Ordinary disability occurs outside the call of duty and pays benefits equivalent to the greater of 50% of the member's average �nal compensation for 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. 105 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 11—EMPLOYEE PENSION PLANS (continued) Death benefits are similar to disability benefits. Benefits for accidental death are 50% of the average final compensation of the member plus an additional amount for each child, or the provisions for ordinary death. Ordinary death benefits consist of a pension equal to 40% of the average final compensation of the member plus an additional amount for each child, or a lump-sum distribution to the designated beneficiary equal to 50% of the previous year's earnable compensation of the member or equal to the amount of the member's total contributions plus interest. Benefits are increased(escalated) annually in accordance with Chapter 41 L6 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$100,0001ump-sum payment. Contributions -Member contribution rates are set by state statute. In accordance with Chapter 411 of the Code of Iowa, the contribution rate was 9.40% of earnable compensation for the year ended June 30, 2020. Employer contribution rates are based upon an actuarially determined normal contribution rate and set by state statute. The required actuarially determined contributions are calculated on the basis of the entry age normal method as adopted by the Board of Trustees as permitted under Chapter 411 of the Code of Iowa. The normal contribution rate is provided by state statute to be the actuarial liabilities of the plan less current plan assets, with such total divided by 1% 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 24.41% for the year ended June 30, 2020. The City's contributions to MFPRSI for the year ended June 30, 2020 was $3,631,952. If approved by the state legislature, state appropriation may further reduce the employer's contribution rate, but not below the minimum statutory contribution rate of 17.00% of earnable compensation. The State of Iowa therefore is considered to be a nonemployer contributing entity in accordance with the provisions of the Governmental Accounting Standards Board Statement No. 67 —Financial Reporting for Pension Plans, (GASB 67). There were no state appropriations to MFPRSI during the fiscal year ended June 30, 2020. Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2020, the City reported a liability of $30,775,196 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the new pension liability was determined by an 106 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 11—EMPLOYEE PENSION PLANS (continued) actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's share of contributions to the pension plan relative to the contributions of all MFPRSI participating employers. At June 30, 2019, the City's proportion was 4.691866% which was a decrease of 0.172025% from it proportions measured as of June 30, 2018. For the year ended June 30, 2020, the City recognized pension expense of$6,185,748. At June 30, 2020, 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 $ 1,059,736 $ 287,981 actual experience Changes of assumptions 1,545,167 133,943 Net difference between projected and actual earnings on pension plan investments 1,695,596 - Changes in proportion and differences between 247,343 1,167,309 City contributions and proportionate share of contributions City contributions subsequent to the 3,631,952 - measurement date Total $ 8,179,794 $ 1,589,233 $3,631,952 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, 2021. 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 2021 $ 1,542,875 2022 195,386 2023 676,980 2024 S ll,965 2025 31,403 $ 2,958,609 107 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 11—EMPLOYEE PENSION PLANS (continued) Actuarial Assumptions - The total pension liability in the June 30, 2019 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 3.75%to 15.11%including inflation Investment rate of return 7.50%, net of pension plan investment expense, including inflation The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period from July 1, 2007 to June 30, 2017. Mortality rates were based on the RP-2014 Blue Collar Healthy Annuitant Table with males set-forward zero years, females set-forward two years and disabled individuals set-forward three years (male only rates), with generational projection of future mortality improvement with 50% of Scale BB beginning 2017. The long-term expected rate of return on MFPRSI investments was determined using a building-block method in which best-estimate ranges of expected future real rates (i.e., expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The best estimates of geometric real rates of return for each major asset class are summarized in the following table: Long-Term 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 Market 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 6.4 108 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 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 contractually required rates, actuarially determined. Based on those assumptions, MFPRSI fiduciary net position was projected to be available to make all projected future benefit payments to current active and inactive employees. Therefore, the long-term expected rate of return on MFPRSI investments was applied to all periods of proj ected benefit payments to determine the total pension liability. Sensitivity of Cit. '�portionate Share of the Net Pension Liability to Chan�es 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 proportionate share of the net pension liability: $ 50,107,415 $ 30,775,196 $ 14,764,335 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.org. Pavables to MFPRSI-At June 30, 2020, City of Dubuque,Iowa reported payables to the defined benefit pension plan of $165,066 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. 109 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 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)for thirty years. State governments are primarily responsible far 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 an annual report with the State to provide compliance with its legal requirements of maintaining a balance per the prescribed formula. Any adjustments 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 environmental monitoring of the landfill during the post-closure period and(4) the cost of any environmental cleanup required after closure. Estimated total cost is based on an engineer's estimate for 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: 2020 Closure $ 3,468,474 Post-closure care 2,265,000 Totals $ 5,733,474 The total closure and post-closure care costs for the DMASWA has been estimated at approximately $5,733,474 as of June 30, 2020, and the portion of the liability, that has been recognized is $1,981,708. 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, 8, and 6% of cell 9. 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 $4,885,167 as of June 30, 2020. The Agency will recognize the remaining estimated cost of closure and post closure care of$4,228,766 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, airport property (hangars and terminal space), farm land, parking areas, space for antennas on top of water towers, and concession areas under operating leases. The most significant lease is the lease of the greyhound racing and gambling facility and related parking area to the Dubuque Racing Association (DRA). The City's cost of the leased DRA assets total $10,144,771. The carrying amount of the assets at June 30, 2020 is $5,872,087, with $142,423 of depreciation expense during the year ended June 30, 2020. The DRA lease amount is based on the association's gross gambling receipts. During the year ended June 30, 2020, the DRA lease generated$3,961,996 in lease revenue. 110 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 14—SUBSEQUENT EVENTS On July 7, 2020, the City of Dubuque accepted the Miracle League Complex project. The final cost of the project totaled$3,354,079. The City owns all amenities constructed by Miracle League of Dubuque and they become a part of Veterans Memorial Park. The Miracle League Complex will be used and owned by the City as a public park to be enjoyed by all. The Miracle League of Dubuque project improvements are subject to a lease agreement. The lease agreement between the City of Dubuque and Miracle League of Dubuque will govern the usage of the park. The lease agreement has a term that is 25 years and started upon the date of City Council acceptance. Miracle League of Dubuque will have preferential but non-exclusive use of the Miracle League Complex. NOTE 15—CONTINGENCIES The COVID-19 outbreak is disrupting business accross a range of industries in the United States and financial markets have experienced a significant decline. As a result,local,regional and national economies, including that of the City, may be adversly impacted. The extent of the financial impact of COVID-19 will depend on future developments, including the duration and spread,which are uncertain and cannot be predicted. Due to the uncertainties surrounding the outbreak, management cannot presently estimate the potential impact to the City's operations and finances. NOTE 16—PROSPECTIVE ACCOUNTING PRONOUNCEMENTS The Governmental Accounting Standards Board (GASB) has issued statements not yet implemented by the City. The statements which might impact the City are as follows: Statement No. 84, Fiduciary Activities, will be effective for the fiscal year June 30, 2021. 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, 2022. The objective of this Statement is to better meet the information needs of financial statements users by improving accounting and financial reporting far leases by governments. Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, will be effective for the fiscal year June 30, 2022. 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 Equiry Interest-an amendment of GASB Statement No. 14 and No. 61, will be effective for the fiscal year June 30, 2021. The primary objective of this Statement are to improve the consistency and comparability of reporting a government's majarity equiry interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. Statement No. 91, Conduit Debt Obligations, will be effective for the fiscal year June 30, 2023. The primary obj ectives of this Statement are to provide a single method of reparting conduit debt obligations by issuers and eliminated diversity in practice associated with(1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and(3)related note disclosures. 111 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 16—PROSPECTIVE ACCOUNTING PRONOUNCEMENTS (continued) Statement No. 92, Omnibus 2020, issued January 2020, will be effective for the City beginning with its fiscal year ending June 30, 2022 except for the requirements related to the effective date of Statement No. 87 and Implementation Guide 2019-3, reinsurance recoveries, and terminology used to refer to derivative instruments effective upon issuance. The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. This Statement addresses a variety of topics including leases, intra-entity transfers, assets accumulated for postemployment benefits, applicability of Statement No. 84 to postemployment benefit arrangements, measurement of liabilities related to asset retirement obligations in a government acquisition, reporting by public entity risk pools for amounts that are recoverable from reinsurers or excess insurers, nonrecurring fair value measurements of assets or liabilities, and terminology to refer to derivative instruments. Statement No. 93, Replacement of Interbank Offered Rates, issued March 2020,will be effective for the City beginning with its fiscal year ending June 2022. The objective of this Statement is to address accounting and financial reporting implications that result from the replacement of an interbank offered rate (IBOR). Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, issued March 2020,will be effective far the City beginning with its fiscal year ending June 30, 2023. The primary objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). Statement No. 96, Subscription-Based Information Technology Arrangements, issued in May 2020, will be effective for fiscal year ending June 30, 2023. This Statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, issued June 2020,will be effective for the fiscal year ended June 30, 2022. This Statement will result in more consistent financial reporting of defined contribution pension plans, defined contribution OPEB plans, and other employee benefit plans,while mitigating the costs associated with reporting those plans. The City's management has not yet determined the effect these statements will have on the City's financial statements. 112 CITY OF DUBUQUE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30,2020 NOTE 17—TAX ABATEMENTS Governmental Accounting Standards Board Statement No. 77 defines tax abatements as a reduction in tax revenues that results from an agreement between one or more governments and an individual or entity in which (a) one or more governments promise to forgo tax revenues to which they are otherwise entitled and (b) the individual or entity promises to take a specific action after the agreement has been entered into that contributes to economic development or otherwise benefits the governments or the citizens of those governments. City Tax Abatements The City provides tax abatements for urban renewal and economic development projects with tax increment financing as provided for in Chapter 15A and 403 of the Code of Iowa. For these types of projects, the City enters into agreements with developers which require the City, after developers meet the terms of the agreements, to rebate a portion of the property tax paid by the developers, to pay the developers an economic development grant ar to pay the developers a predetermined dollar amount. No other commitments were made by the City as a part of these ageements. For the year ended June 30, 2020, the City abated $2,454,454 of property tax under the urban renewal and economic developmentprojects. 113 THIS PAGE IS INTENTIONALLY LEFT BLANK 114 Required Supplementary Information June 30, 2020 City of Dubuque, Iowa 115 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, 2020 Budgeted Amounts Final to Actual Actual Original Final Variance RECEIPTS Property tax $ 25,908,220 $ 25,575,669 $ 25,575,669 $ 332,551 Tax increment financing 9,959,562 10,738,108 10,738,108 (778,546) Other City tax 17,995,431 18,167,857 18,167,857 (172,426) Licenses and permits 1,503,252 1,827,379 1,904,123 (400,871) Use of money and property 14,474,768 14,388,998 14,391,312 83,456 Intergovernmental 40,369,620 48,393,574 101,904,967 (61,535,347) Charges for fees and service 39,175,530 44,184,398 43,907,605 (4,732,075) Special assessments 113,709 30,000 30,000 83,709 Miscellaneous 8,896,634 7,971,324 11,463,679 (2,567,045) Total Receipts 158,396,726 171,277,307 228,083,320 (69,686,594) EXPENDITURES Public safety 29,268,525 30,100,398 30,851,935 1,583,410 Public works 12,307,869 13,022,573 14,053,891 1,746,022 Health and social services 970,434 1,196,081 1,279,935 309,501 Culture and recreation 12,316,173 12,850,660 13,588,266 1,272,093 Community and economic development 14,432,317 14,373,472 15,695,646 1,263,329 General government 10,013,656 10,214,750 10,582,261 568,605 Debt service 12,165,590 10,779,398 12,233,320 67,730 Capital projects 28,946,802 37,057,261 82,014,175 53,067,373 Business-type activities 54,048,579 61,888,644 90,103,926 36,055,347 Total Expenditures 174,469,945 191,483,237 270,403,355 95,933,410 EXCESS(DEFICIENCY)OF RECEIPTS OVER(LJNDER)EXPENDITURES (16,073,219) (20,205,930) (42,320,035) 26,246,816 OTHER FINANCING SOURCES,NET 15,661,869 12,989,828 36,769,518 (21,107,649) EXCESS DEFICIENCY OF RECEIPTS AND OTHER FINANCING SOURCES OVER (UNDER)EXPENDITURES AND OTHERFINANCINGUSES (411,350) (7,216,102) (5,550,517) 5,139,167 BALANCE,BEGINNING OF YEAR 80,882,630 37,452,616 82,384,365 - BALANCE,ENDING OF YEAR $ 80,471,280 $ 30,236,514 $ 76,833,848 $ 5,139,167 See Notes to Required Supplementary Information. 116 CITY OF DUBUQUE, IOWA NOTE TO REQUIRED SUPPLEMENTARY INFORMATION—BUDGETARY REPORTING FOR THE YEAR ENDED JUNE 30, 2020 The budgetary comparison is presented as Required Supplementary Information in accardance with Governmental Accounting Standards Board Statement No. 41 for governments with significant budgetary perspective differences resulting from not being able to present budgetary comparisons for 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 31 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 for 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 or 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, 2020, was amended three times during the year to allow the City to increase function expenditures by $78,920,118 primarily for the carry-forward of unfinished capital improvement projects. During the year ended June 30, 2020, no function expenses 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/Accrual Modified Accrual Basis Adjustments Basis Accrual Basis Basis Total Receipts/Revenue $ 158,396,726 $ (10,090,619) $ 148,306,107 $ 110,144,389 $ 38,161,718 $ 148,306,107 Expenditures/Expenses 174,469,945 (25,286,719) 149,183,226 111,229,453 37,953,773 149,183,226 Deficiency of Receipts/Revenue Under Ezpenditures/Expenses (16,073,219) 15,196,100 (877,119) (1,085,064) 207,945 (877,119) Other Financing Sources 15,661,869 661,880 16,323,749 (540,161) 16,863,910 16,323,749 Net (411,350) 15,857,980 15,446,630 (1,625,225) 17,071,855 15,446,630 Balance,Beginning 80,882,630 177,340,350 258,222,980 62,912,469 195,310,511 258,222,980 Balance,Ending $ 80,471,280 $ 193,198,330 $ 273,669,610 $ 61,287,244 $ 212,382,366 $ 273,669,610 117 CITY OF DUBUQUE, IOWA SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF NET PENSION LIABILITY IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEM LAST SIX FISCAL YEARS* (IN THOUSANDS) Required Supplementary Information 2020 2019 2018 2017 2016 2015 City's proportion of the net pension liability(asset) 0.33194% 0.33329% 0.33490% 0.34275% 0.35135% 0.37035% City's proportionate share of the net pension $ 19,350 $ 21,091 $ 22,309 $ 21,570 $ 17,358 $ 14,688 liability City's covered payroll $ 25,423 $ 25,024 $ 24,961 $ 24,597 $ 24,039 $ 24,210 City's proportionate share of the net pension liability as a percentage of its covered payroll 76.11% 84.28% 89.38% 87.69% 72.21% 60.67% Plan fiduciary net position as a percentage of the 85.45% 83.62% 82.21% 81.82% 85.19% 87.61% 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 preceding fiscal year. Note: GASB Statement No. 68 requires ten years of information to be presented in this table. However,until a full 10-year trend is compiled,the City will present information for those years for which information is available. 118 CITY OF DUBUQUE, IOWA SCHEDULE OF THE CITY CONTRIBUTION IOWA PUPLIC EMPLOYEES RETIREMENT SYSTEM LAST 10 FISCAL YEARS (IN THOUSANDS) Required Supplementary Information 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Statutorilyrequiredcontriburion $ 2,460 $ 2,403 $ 2,235 $ 2,229 $ 2,196 $ 2,151 $ 2,164 $ 2,022 $ 2,022 $ 1,573 Contributions in relation to the statutarily required contribution (2,460) (2,403) (2,235) (2,229) (2,196) (2,151) (2,164) (2,022) (2,�22) (1,573) Contribution deficiency(excess) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Ciry's covered payroll $ 26,048 $ 25,423 $ 25,024 $ 24,961 $ 24,597 $ 24,039 $ 24,210 $ 23,321 $ 23,676 $ 22,627 Contributions as a percentage of covered payroll 9.44°/o 9.45% 8.93% 8.93% 8.93% 8.95% 8.94% 8.67% 8.54% 6.95% 119 CITY OF DUBUQUE, IOWA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION--PENSION LIABILITY IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEMS YEAR ENDED JUNE 30, 2020 Changes of benefit terms: Thee are no significant changes in benefit terms. Changes of assumption: The 2018 valuation implemented the following refinements as a result of a demographic assumption study dated June 28, 2018: • Changed mortality assumptions to the RP-2014 mortality tables with mortality improvements modeled using Scale MP-2017. • Adjusted retirement rates • Lowered disability rates • Adjusted the probability of a vested Regular member electing to receive a deferred benefit. • Adjusted the merit component of the salary increase assumption. The 2017 valuation implemented the following refinements as a result of an experience study dated March 24, 2017: • Decreased the inflation assumption from 3.00% to 2.60%. • Decreased the assumed rate of interest on member accounts from 3.75% to 3.50% 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 amortization period to a closed 30-year amortization period for the UAL(unfunded actuarial 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. 120 CITY OF DUBUQUE, IOWA SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF NET PENSION LIABILITY MUNICIPAL FIRE AND POLICE RETIREMENT SYSTEM OF IOWA LAST SIX FISCAL YEARS* (IN THOUSANDS) Required Supplementary Information 2020 2019 2018 2017 2016 2015 City's proportion of the net pension liability(asset) 4.6919% 4.8639% 4.7840% 4.9533% 4.9854% 5.0788% City's proportionate share of the net pension liability $ 30,775 $ 28,960 $ 28,062 $ 30,971 $ 23,423 $ 18,410 City's coveredpayroll $ 14,203 $ 14,ll8 $ 13,552 $ 13,423 $ 13,052 $ 12,968 City's proportionate share of the net pension liability as a percentage of its covered payroll 216.68% 205.13% 207.07% 230.73% 179.46% 141.96% Plan fiduciary net position as a percentage of the 79.94% 81.07% 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 preceding fiscal year. Note: GASB Statement No. 68 requires ten years of information to be presented in this table. However,until a full 10-year trend is compiled, the City will present information for those years for which information is available. 121 CITY OF DUBUQUE, IOWA SCHEDULE OF THE CITY CONTRIBUTION MUNICIPAL FIRE AND POLICE RETIREMENT SYSTEM OF IOWA LAST 10 FISCAL YEARS (IN THOUSANDS) Required Supplementary Information 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Statutarily required contribution $ 3,632 $ 3,696 $ 3,626 $ 3,S l3 $ 3,727 $ 3,969 $ 3,906 $ 3,310 $ 3,177 $ 2,404 Contributions in relation to the statutarilyrequiredcontribution (3,632) (3,696) (3,626) (3,513) (3,727) (3,969 3,906 3,310 3,177) (2,404) Contribution deficiency(excess) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - City's coveredpayroll $ 14,879 $ 14,203 $ 14,118 $ 13,552 $ 13,423 $ 13,052 $ 12,968 $ 12,672 $ 12,831 $ 12,080 Contributions as a percentage of coveredpayroll 24.41% 26.02% 25.68% 25.92% 27.77% 30.41% 30.12% 26.12% 24.76% 19.90% 122 CITY OF DUBUQUE, IOWA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION--PENSION LIABILITY MUNICIPAL FIRE AND POLICE RETIREMENT SYSTEM OF IOWA YEAR ENDED JUNE 30, 2020 Chan�es of bene at terms: There were no significant changes of benefit terms. Changes of assumptions The 2018 valuation changed postretirement mortality rates were based on the RP-2014 Blue Collor Healthy Annuitant Table with males set-forward zero years, females set-forward two years and disabled individuals set-forward three years (male only rates), with generational projection of future mortality improvement with 50% of Scale BB beginning in 2017. The 2017 valuation added five years projection of future mortality improvement with Scale BB. The 2016 valuation changed postretirement mortality rates to the RP-2000 Blue Collar Combined Healthy Mortality Table with males set-back two years, females set-forward one year and disabled individuals set-forward one year(male only rates),with no projection of future mortality improvement. The 2015 valuation phased in the 1994 Group Annuity Mortality Table for post retirement mortaliry. This resulted in a weighting of 1/12 of the 1971 Group Annuity Mortality Table and ll/12 of the 1994 Group Annuity Mortality Table. The 2014 valuation phased in the 1994 Group Annuity Mortality Tab1e for post retirement mortality. 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. 123 CITY OF DUBUQUE, IOWA SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY,RELATED RATIOS AND NOTES LAST THREE FISCAL YEARS 2020 2019 2018 Service Cost $ 288,187 $ 296,597 $ 277,469 Interest Cost 165,496 172,576 172,219 Changes in assumptions (19,982) 85,951 138,371 Changes in experience (242,263) - - Other Changes (49,950) 2,582 58,589 Benefitpayments (380,158) (452,573) (474,856) Net change in total OPEB Liability (238,670) 105,133 171,792 Total OPEB liability beginning of year 6,121,366 6,016,233 5,844,441 Total OPEB liability end of year $ 5,882,696 $ 6,121,366 $ 6,016,233 Covered-employee payroll $ 34,543,167 $ 39,626,000 $ 39,782,000 Total OPEB liability as a percentage of covered-employee payroll 17.03% 15.45% 15.12% Notes to Schedule of Chan�es 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 terms. 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 information to be presented in this table. However, until a 10-year trend is completed,the City will present information for those years for which information is available. 124 THIS PAGE IS INTENTIONALLY LEFT BLANK 125 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 Ciry for maintenance and improvement of City streets. Section VIII Housing Fund—This fund is used to account for the operations of federal Section VILI existing,voucher, and moderate rehabilitation projects. Employee Benefits 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 for the financing of public improvements that are deemed to benefit primarily the properties against which special assessments are levied and to accumulate monies for the payment of principal and interest on the outstanding long-term debt service. Cable TV Fund — This fund is used to account for 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. 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. 126 NONMAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS Capital projects funds are used to account for 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 for the resources and costs related to airport capital improvements. Sales Tax Construction Fund — This fund is used to account for the resources and costs related to capital improvements financed through the local option sales tax. General Construction Fund — This fund is used to account for the resources and costs related to general capital improvements. Street Construction Fund—This fund is used to account for the resources and costs related to street capital improvements. PERMANENT FUNDS Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal,may be used for purposes that support 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 account for testamentary gifts to the City library. 127 CITY OF DUBUQUE,IOWA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2020 Special Revenue Funds Road Use Section VIII Employee SpeciaL Tax Housing Benefits Assessments ASSETS Cash and pooled cash inveshnents $ 4,778,396 $ 381,745 $ - $ - Receivables Property tax Delinquent - - 100,588 - Succeeding year - - 3,033,914 - Accounts and other - 67,199 - - Special assessments - - - 407,620 Accrued interest - - - - Notes - - - - Intergovernmental 969,042 3,724 - - Inventories 302,382 - - - Prepaid items 435 11,980 - - Restricted cash and pooled cash investments - 308,903 - - Total Assets $ 6,050,255 $ 773,551 $ 3,134,502 $ 407,620 LiABILiTIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accounts payable $ 319,704 $ 111,731 $ - $ - Accrued payroll 76,481 26,467 - - Intergovernmentalpayable - 8,141 - - Due to other funds - - - - Unearned revenue - 117,685 - - Total Liabiliries 396,185 264,024 - - DEFERRED INFLOWS OF RESOURCES Unavailable revenues Succeeding year property tax - - 3,033,914 - Special assessments - - - 389,289 Grants - 3,724 - - Other - - 43,556 - Total Deferred Inflows of Resources - 3,724 3,077,470 389,289 FUND BALANCES Nonspendable: Endowment corpus - - - - Inventory 302,382 - - - Prepaid items 435 11,980 - - Restricted: Endowments - - - - Library - - - - Police - - - - Veterans - - - - Capital improvements 5,351,253 - - - Franchise agreement - - - - Special assessments - - - 18,331 Iowa Finance Autharity Trust - - - - Community programs - 593,625 - - Employee benefits - - 57,032 - Committed,capital improvements - - - - Unassigned - (99,802) - - Total Fund Balances 5,654,070 505,803 57,032 18,331 Total Liabilities,Deferred Inflows of Resources and Fund Balances $ 6,050,255 $ 773,551 $ 3,134,502 $ 407,620 128 EXHIBIT A-1 Special Revenue Funds Capital Projects Funds Library Police IFA Expendable Expendable Veteran's Housing Airport General Sales Tax Cable TV Gifts Trust Gifts Trust Memorial Trust Construction Construction Construction $ 495,264 $ 1,154,946 $ 7,749 $ 152,925 $ 374,024 $ (146) $ 699 $ 3,070,492 136,095 - - - - - - - 2,081 3,716 25 - - - 648 9,975 - - - - 861,944 - 34,085 657,518 - - - - - 632,963 546,269 152,219 - - - - - - 599,254 - 21,669 - - - - - 3,847 - - - - - - 1,262,287 1,344,808 1,207,665 $ 655,109 $ 1,158,662 $ 7,774 $ 152,925 $ 1,235,968 $ 1,895,104 $ 2,529,610 $ 5,097,869 $ 1,165 $ - $ - $ - $ - $ 291,831 $ 726,502 $ 72,339 13,418 1,448 - - - - - - - - - - - 42,278 414,272 - 14,583 1,448 - - - 334,109 1,140,774 72,339 - - - - - 294,122 47,886 - - - - - - 294,122 47,886 - - - - - - - 599,254 - 21,669 - - - - - 3,847 - - 1,157,214 - - - - - - - - 7,774 - - - - - - - - 152,925 - - - - - - - - - 1,266,873 737,849 1,207,665 618,857 - - - - - - - - - - - 1,235,968 - - - - - - - - - - 3,817,865 640,526 1,157,214 7,774 152,925 1,235,968 1,266,873 1,340,950 5,025,530 $ 655,109 $ 1,158,662 $ 7,774 $ 152,925 $ 1,235,968 $ 1,895,104 $ 2,529,610 $ 5,097,869 (Continued) 129 CITY OF DUBUQUE,IOWA COMBINING BALANCE SHEET EXHIBIT A-1(CONTINUED) NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2020 Capital Projects Funds PermanentFunds Total Ella Lyons Library Nonmajor Street Peony Trail Gifts Governmental Construction Trust Trust Funds ASSETS Cash and pooled cash investments $ 2,168,691 $ - $ - $ 12,584,785 ReceivabLes Property tax Delinquent - - - 100,588 Succeeding year - - - 3,033,914 Accounts and other 26,045 - - 229,339 Special assessments - - - 407,620 Accrued interest 6,978 212 58 23,693 Notes - - - 1,553,547 Intergovernmental 1,052,044 - - 3,356,261 Inventories - - - 901,636 Prepaid items 340 - - 38,271 Restricted cash and pooled cash investments - 155,677 18,051 4,297,391 Total Assets $ 3,254,098 $ 155,889 $ 18,109 $ 26,527,045 LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accounts payable $ 418,269 $ - $ - $ 1,941,541 Accrued payroll - - - 117,814 Intergovernmental payable - - - 8,141 Due to other funds - - - 456,550 Unearned revenue - - - 117,685 Total Liabiliries 418,269 - - 2,641,731 DEFERRED INFLOWS OF RESOURCES Unavailable revenues Succeeding year property tax - - - 3,033,914 Special assessments - - - 389,289 Grants 515,173 - - 860,905 Other 314,963 - - 358,519 Total Deferred Inflows of Resources 830,136 - - 4,642,627 FUND BALANCES Nonspendable: Endowment corpus - 57,412 12,000 69,412 Inventory - - - 901,636 Prepaid items 340 - - 38,271 Restricted: Endowments - 98,477 6,109 104,586 Library - - - 1,157,214 Police - - - 7,774 Veterans - - - 152,925 Capital improvements - - - 8,563,640 Franchise agreement - - - 618,857 Special assessments - - - 18,331 Iowa Finance Authoriry Trust - - - 1,235,968 Community programs - - - 593,625 Employee benefits - - - 57,032 Committed,capital improvements 2,005,353 - - 5,823,218 Unassigned - - - (99,802) Total Fund Balances 2,005,693 155,889 18,109 19,242,687 Total Liabilities,Deferred Inflows of Resources and Fund Balances $ 3,254,098 $ 155,889 $ 18,109 $ 26,527,045 130 THIS PAGE IS INTENTIONALLY LEFT BLANK 131 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30,2020 Special Revenue Funds Road Use Section VIII Employee Special Tax Housing Benefits Assessments REVENUES Taxes $ - $ - $ 3,645,629 $ - Special assessments - - - 69,891 Intergovernmental 7,782,636 5,498,322 - - Charges for services 211,083 - - - Investment earnings - 8,257 - 21,506 Contributions - 650 - - Miscellaneous 38,900 59,808 - 1,255 Total Revenues 8,032,619 5,567,037 3,645,629 92,652 EXPENDITURES Governmental activities Current Public safety - - - - Public works 6,328,105 - - - Culture and recrearion - - - - Community and economic development - 5,707,258 - - General government 6,849 - 242 - Debt service Interest and fiscal charges - - - - Capital projects 442,418 - - - Total Expenditures 6,777,372 5,707,258 242 - EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER)EXPENDITURES 1,255,247 (140,221) 3,645,387 92,652 OTHER FINANCING SOURCES(USES) Transfers in 33,682 97,138 - - Transfers out (462,469) - (3,633,932) (109,439) Insurancerecovery - - - - Sale of capital assets - - - - Total OtherFinancing Sources(Uses) (428,787) 97,138 (3,633,932) (109,439) NET CHANGE IN FUND BALANCES 826,460 (43,083) 11,455 (16,787) FLJND BALANCES,BEGINNING 4,827,610 548,886 45,577 35,118 FLJND BALANCES,ENDING $ 5,654,070 $ 505,803 $ 57,032 $ 18,331 132 EXHIBIT A-2 Special Revenue Funds Capital Projects Funds Library Police iFA Expendable Expendable Veteran's Housing Airport General Cable TV Gifts Trust Gifts Trust Memarial Trust Construction Construction $ - $ - $ - $ - $ - $ - $ - - - - - 106,583 998,895 499,120 750 8,976 - - - 169,259 - 11,710 25,507 176 2,812 - 19,047 42,834 - 460 3,655 8,700 - - 2,684 564,765 98,997 - - 537,161 390 14,292 577,225 133,940 3,831 11,512 643,744 1,187,591 558,930 - - 3,102 - - - - - 137,140 - 2,029 - - - 570,026 - - - - - - 5,000 - - - - - (15,258) - - - - - 1,848,826 5,519,810 575,026 137,140 3,102 2,029 - 1,848,826 5,504,552 2,199 (3,200) 729 9,483 643,744 (661,235) (4,945,622) - - - - 50,000 335,790 2,948,594 - - - - - (34,567) (31,349) - - - - - - 3,000 - - - - 50,000 301,223 2,920,245 2,199 (3,200) 729 9,483 693,744 (360,012) (2,025,377) 638,327 1,160,414 7,045 143,442 542,224 1,626,885 3,366,327 $ 640,526 $ 1,157,214 $ 7,774 $ 152,925 $ 1,235,968 $ 1,266,873 $ 1,340,950 (Continued) 133 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF REVENUES, EXHIBIT A-2(CONTINUED) EXPENDITURES,AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30,2020 Capital Projects Funds Permanent Funds Total Ella Lyons Library Nonmajor Sales Tax Street Peony Trail Gifts Governmental Construction Construction Trust Trust Funds REVENUES Taxes $ 1,930,466 $ 2,895,699 $ - $ - $ 8,471,794 Special assessments - - - - 69,891 Intergovernmental - 1,180,314 - - 16,065,870 Charges far services - 18,720 - - 408,788 Investment earnings 84,478 37,853 (2,470) 416 252,126 Contributions - - - - 16,149 Miscellaneous 2,637 73,574 - 158 1,391,937 Total Revenues 2,O17,581 4,206,160 (2,470) 574 26,676,555 EXPENDITURES Governmental activities Current Public safety - - - - 3,102 Public works - - - - 6,328,105 Culture and recreation - - - 1,760 140,929 Community and economic development - - - - 5,707,258 General government - - - - 577,1U Debt service Interest and fiscal charges 10,980 - - - 722 Capitalprojects 1,617,936 3,413,817 - - 12,842,807 Total Expenditures 1,628,916 3,413,817 - 1,760 25,600,040 EXCESS(DEFICIENCY)OF REVENUES OVER(LJNDER)EXPENDITURES 388,665 792,343 (2,470) (1,186) 1,076,515 OTHER FINANCING SOURCES(USES) Transfers in 102,132 85,852 - - 3,653,188 Transfers out (758,092) (674,769) - - (5,704,617) Insurancerecovery - 52,182 - - 52,182 Sale of capital assets - - - - 3,000 Total Other Financing Sources(Uses) (655,960) (536,735) - - (1,996,247) NET CHANGE IN FiJND BALANCES (267,295) 255,608 (2,470) (1,186) (919,732) FLJND BALANCES,BEGINNING 5,292,825 1,750,085 158,359 19,295 20,162,419 FLTND BALANCES,ENDING $ 5,025,530 $ 2,005,693 $ 155,889 $ 18,109 $ 19,242,687 134 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 for the operations of the City's refuse collection services. Transit System Fund — This fund is used to account for the operations of the City's bus and other transit services. Salt Fund—This fund is used to account for 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. 135 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF NET POSITION EXHIBIT B-1 NONMAJOR ENTERPRISE FUNDS JUNE 30,2020 Total Other Refuse Transit America's Enterprise Collection System Salt River Project Funds ASSETS CURRENT ASSETS Cash and pooled cash investments $ 1,246,871 $ 870,152 $ 62,776 $ 4 $ 2,179,803 Receivables Accounts 424,445 439 - - 424,884 Intergovernmental - 3,093,798 - - 3,093,798 Prepaid items - 12,688 - - 12,688 Inventories - 2,044 - - 2,044 Total Current Assets 1,671,316 3,979,121 62,776 4 5,713,217 NONCURRENT ASSETS Restricted cash and pooled cash investments - 199,787 - - 199,787 Capital assets Land - 36,000 - - 36,000 Buildings - 13,366,053 175,458 - 13,541,511 Improvements to other than buildings - 659,598 686,312 - 1,345,910 Machinery and equipment 2,808,292 7,570,600 36,342 - 10,415,234 Accumulated depreciation (2,114,960) (6,158,720) (177,580) - (8,451,260) Net Capital Assets 693,332 15,473,531 720,532 - 16,887,395 Total Noncurrent Assets 693,332 15,673,318 720,532 - 17,087,182 Total Assets 2,364,648 19,652,439 783,308 4 22,800,399 DEFERRED OUTFLOWS OF RESOURCES Pension related deferred outflows 204,091 299,534 - - 503,625 OPEB related deferred outflows 10,384 8,407 - - 18,791 Total Deferred Outflows of Resources 214,475 307,941 - - 522,416 LIABILITIES CURRENT LIABILITIES Accounts payable 24,317 1,626,530 - - 1,650,847 Accrued payroll 64,016 84,089 - - 148,105 General obligation bonds payable 5,400 9,268 - - 14,668 Accrued compensated absences 3,414 - - - 3,414 Accrued interest payable 1,980 722 - - 2,702 Total Current Liabilities 99,127 1,720,609 - - 1,819,736 NONCURRENT LIABILITIES General obligation bonds payable 61,629 289,810 - - 351,439 Accrued compensated absences 213,160 36,193 - - 249,353 Netpensionliability 861,091 1,263,774 - - 2,124,865 Total OPEB liability 235,307 190,488 - - 425,795 Total Noncurrent Liabilities 1,371,187 1,780,265 - - 3,151,452 Total Liabilities 1,470,314 3,500,874 - - 4,971,188 DEFERRED INFLOWS OF RESOURCES Pension related deferred inflows 150,348 220,659 - - 371,007 OPEB related deferred inflows 13,409 10,855 - - 24,264 Total Deferred Inflows of Resources 163,757 231,514 - - 395,271 NET POSITION Net investment in capital assets 626,303 15,374,240 720,532 - 16,721,075 Unrestricted 318,749 853,752 62,776 4 1,235,281 Total Net Position $ 945,052 $ 16,227,992 $ 783,308 $ 4 $ 17,956,356 136 CITY OF DUBUQUE,IOWA EXHIBTT B-2 COMBINING STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN NET POSITION NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30,2020 Total Other Refuse Transit America's Enterprise Collection System Salt River Project Funds OPERATING REVENUES Charges for sales and services $ 4,444,871 $ 364,116 $ 346,753 $ - $ 5,155,740 Other 3,446 36,460 - - 39,906 Total Operating Revenues 4,448,317 400,576 346,753 - 5,195,646 OPERATING EXPENSES Employee expense 2,805,672 2,436,336 - - 5,242,008 Utilities 21,747 91,001 - - 112,748 Repairs and maintenance 329,703 769,849 940 - 1,100,492 Supplies and services 889,936 463,777 304,977 3,161 1,661,851 Insurance 21,745 43,737 - - 65,482 Depreciation 317,135 814,208 27,639 - 1,158,982 Total Operating Expenses 4,385,938 4,618,908 333,556 3,161 9,341,563 OPERATING INCOME(LOSS) 62,379 (4,218,332) 13,197 (3,161) (4,145,917) NONOPERATING REVENUES Intergovernmental - 2,531,111 - - 2,531,111 Investment earnings 27,158 3,059 - - 30,217 Contributions - 84,280 - - 84,280 Interest expense (1,745) 565 - - (1,180) Gain on disposal of assets 16,500 (130,120) - - (113,620) NetNonoperatingRevenues 41,913 2,488,895 - - 2,530,808 INCOME(LOSS)BEFORE TRANSFERS 104,292 (1,729,437) 13,197 (3,161) (1,615,109) CAPITAL CONTRIBUTIONS - 1,524,575 - - 1,524,575 TRANSFERS IN - 1,693,164 - 2,800 1,695,964 CHANGE IN NET POSITION 104,292 1,488,302 13,197 (361) 1,605,430 NET POSITION,BEGINNING 840,760 14,739,690 770,111 365 16,350,926 NET POSITION,ENDING $ 945,052 $ 16,227,992 $ 783,308 $ 4 $ 17,956,356 137 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS YEAR ENDED JUNE 30,2020 America's TotalOther Refuse Transit River Enterprise Collection System Salt Project Funds CASH FLOWS FROM OPERATING ACTNITIES Cash received from customers $ 4,020,426 $ 366,262 $ 346,753 $ - $ 4,733,441 Cash payments to suppliers for goods and services (1,261,848) (1,390,499) (305,917) (3,161) (2,961,425) Cash payments to employees for services (2,749,600) (2,310,549) - - (5,060,149) Other operating receipts 3,446 36,460 - - 39,906 NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES 12,424 (3,298,326) 40,836 (3,161) (3,248,227) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds - 1,693,164 - 2,800 1,695,964 Transfers to other funds - - - - - Contriburions - 1,608,855 - - 1,608,855 Intergovernmental grant proceeds - 613,900 - - 613,900 NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES - 3,915,919 - 2,800 3,918,719 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from issuance of debt - - - - - Premium on debt issuance - - - - - Acquisition and construction of capital assets (96,987) (323,130) - - (420,117) Proceeds from sale of capital assets 16,500 - - - 16,500 Principal Paid (5,222) (9,600) - - (14,822) Interest paid (2,064) - - - (2,064) NET CASH PROVIDED BY(USED FOR)CAPITAL AND RELATED FINANCING ACTNITIES (87,773) (332,730) - - (420,503) CASH FLOWS FROM INVESTING ACTIVITIES Interest received 424,922 3,059 - - 427,981 NET INCREASE(DECREASE)IN CASH AND POOLED INVESTMENTS 349,573 287,922 40,836 (361) 677,970 CASH AND POOLED INVESTMENTS,BEGINNING 897,298 782,017 21,940 365 1,701,620 CASH AND POOLED INVESTMENTS,ENDING $ 1,246,871 1,069,939 $ 62,776 $ 4 $ 2,379,590 138 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF CASH FLOWS EXHIBIT B-3 NONMAJOR ENTERPRISE FUNDS YEAR ENDED JUNE 30,2020 Business-type Activities-Enterprise Funds America's TotalOther Refuse River Enterprise Collection Transit Salt Project Funds RECONCILIATION OF OPERATING INCOME(LOSS) TO NET CASH PROVIDED BY(USED FOR) OPERATING ACTIVITIES Operating income(loss) $ 62,379 $ (4,218,332) $ 13,197 $ (3,161) $ (4,145,917) Adjustments to reconcile operating income(loss)to net cash provided by(used for)operating activities Depreciation 317,135 814,208 27,639 - 1,158,982 Change in assets and liabilities (Increase)Decrease in receivables (424,445) 2,146 - - (422,299) Decrease in inventories and prepaid items - (2,563) - - (2,563) Increase in accounts payable 1,283 (19,572) - - (18,289) Increase(Decrease)in accrued liabilities (6,253) 23,1 l8 - - 16,865 (Decrease)in net pension liability (59,460) (83,492) - - (142,952) Decrease in deferred outflows 36,000 52,083 - - 88,083 Increase in deferred inflows 84,609 115,677 - - 200,286 Increase in total OPEB liability 1,176 18,401 - - 19,577 Total Adjustments (49,955) 920,006 27,639 - 897,690 NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES $ 12,424 $ (3,298,326) $ 40,836 $ (3,161) $ (3,248,227) 139 THIS PAGE IS INTENTIONALLY LEFT BLANK 140 INTERNAL SERVICE FUNDS Internal service funds are used to account far the financing of goods or services provided by one department to other departments of the government and to other government 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 for the City's automotive equipment. Stores/Printing Fund - This fund is used to account for printing, supplies, and other services provided to other departments. Health Insurance Reserve Fund- This fund is used to account for health insurance costs. Workers' Compensation Reserve Fund - This fund is used to account for workers' compensation costs. 141 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30,2020 General Garage Stores/ Service Service Printing ASSETS CURRENT ASSETS Cash and pooled cash investments $ 165,283 $ 574,541 $ 14,264 Receivables Accounts - - - Accrued interest - - - Prepaid items - - - Inventories - 51,319 14,484 Total Current Assets 165,283 625,860 28,748 NONCURRENT ASSETS Capital assets Machinery and equipment - 356,590 - Accumulated depreciation - (263,134) - Net Capital Assets - 93,456 - Total Noncurrent Assets - 93,456 - Total Assets 165,283 719,316 28,748 DEFERRED OUTFLOWS OF RESOURCES Pension related deferred outflows 206,807 115,834 - LIABILITIES CURRENT LIABILITIES Accounts payable - 38,333 8,558 Accrued payroll - 32,543 - Total Current Liabilities - 70,876 8,558 NONCURRENT LIABILITIES Net pension liability 872,559 488,728 - Total Noncurrent Liabilities 872,559 488,728 - Total Liabilities 872,559 559,604 8,558 DEFERRED INFLOWS OF RESOURCES Pension related deferred inflows 152,351 85,332 - NET POSITION Net investment in capital assets - 93,456 - Unrestricted (652,820) 96,758 20,190 Total Net Position(Deficit) $ (652,820) $ 190,214 $ 20,190 142 EXHIBIT Gl Health Workers' Insurance Compensation Reserve Reserve Total $ 4,603,574 $ 1,605,767 $ 6,963,429 268,177 - 268,177 14,812 5,166 19,978 - 183,763 183,763 - - 65,803 4,886,563 1,794,696 7,501,150 - - 356,590 - - (263,134) - - 93,456 - - 93,456 4,886,563 1,794,696 7,594,606 - - 322,641 873,589 499,557 1,420,037 - - 32,543 873,589 499,557 1,452,580 - - 1,361,287 - - 1,361,287 873,589 499,557 2,813,867 - - 237,683 - - 93,456 4,012,974 1,295,139 4,772,241 $ 4,012,974 $ 1,295,139 $ 4,865,697 143 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN NET POSITION(DEFICITS) INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30,2020 General Garage Stores/ Service Service Printing OPERATING REVENUES Charges for sales and services $ 1,606,347 $ 1,942,010 $ 583,270 Other - 55,543 - Total Operating Revenues 1,606,347 1,997,553 583,270 OPERATING EXPENSES Employee expense 1,501,747 941,530 - Utilities 1 30,810 6,821 Repairs and maintenance - 54,093 - Supplies and services - 824,259 559,042 Insurance - 16,604 - Depreciation - 40,868 - Total Operating Expenses 1,501,748 1,908,164 565,863 OPERATING INCOME(LOSS) 104,599 89,389 17,407 NONOPERATING REVENUES(EXPENSES) Investment earnings - - - Gain on disposal of assets - 2,679 - Net Nonoperating Revenues(Expenses) - 2,679 - CHANGE IN NET POSITION 104,599 92,068 17,407 NET POSITION(DEFICIT),BEGINNING (757,419) 98,146 2,783 NET POSITION(DEFICIT),ENDING $ (652,820) $ 190,214 $ 20,190 144 EXHIBIT G2 Health Warkers' Insurance Compensation Reserve Reserve Total $ 9,359,270 $ 807,864 $ 14,298,761 137 14,432 70,112 9,359,407 822,296 14,368,873 - - 2,443,277 - - 37,632 - - 54,093 10,259,919 - 11,643,220 - 158,042 174,646 - - 40,868 10,259,919 158,042 14,393,736 (900,512) 664,254 (24,863) 119,990 38,415 158,405 - - 2,679 119,990 38,415 161,084 (780,522) 702,669 136,221 4,793,496 592,470 4,729,476 $ 4,012,974 $ 1,295,139 $ 4,865,697 145 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30,2020 General Garage Stores/ Service Service Printing CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 1,606,347 $ 1,942,O10 $ 583,270 Cash payments to suppliers for goods and services (1) (950,333) (569,639) Cash payments to employees far services (1,441,063) (923,368) - Other operating receipts - 55,543 - NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES 165,283 123,852 13,631 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets - 2,679 - NET CASH(USED FOR)CAPITAL AND RELATED FiNANCING ACTIVITIES - 2,679 - CASH FLOWS FROM INVESTING ACTIVITIES Interest received - - - NET INCREASE(DECREASE)IN CASH AND POOLED INVESTMENTS 165,283 126,531 13,631 CASH AND POOLED INVESTMENTS,BEGINNING - 448,010 633 CASH AND POOLED INVESTMENTS,ENDING $ 165,283 $ 574,541 $ 14,264 RECONCILIATION OF OPERATING INCOME(LOSS) TO NET CASH PROVIDED BY(USED FOR)OPERATING ACTIVITIES Operaring income $ 104,599 $ 89,389 $ 17,407 Adjustments to reconcile operating income to net cash provided by(used for)operating activities Depreciation - 40,868 - Change in assets and liabilities (Increase)in receivables - - - (Increase)Decrease in inventories and prepaid items - 15,173 (4,902) Increase(Decrease)in accounts payable - (39,740) 1,126 (Decrease)in net pension liability (47,010) (51,155) - Decrease in deferred outflows 34,407 25,783 - Increase in deferred inflows 73,287 38,914 - Increase in accrued liabilities - 4,620 - Total Adjustments 60,684 34,463 (3,776) NET CASH PROVIDED BY(USED FOR)OPERATING ACT�V�T�ES $ 165,283 $ 123,852 $ 13,631 146 EXHIBIT C-3 Health Workers' Insurance Compensation Reserve Reserve Total $ 9,318,982 $ 807,864 $ 14,258,473 (10,362,276) (865,338) (12,747,587) - - (2,364,431) 137 14,432 70,ll2 (1,043,157) (43,042) (783,433) - - 2,679 - - 2,679 120,568 37,736 158,304 (922,589) (5,306) (622,450) 5,526,163 1,611,073 7,585,879 $ 4,603,574 $ 1,605,767 $ 6,963,429 $ (900,512) $ 664,254 $ (24,863) - - 40,868 (40,288) - (40,288) - (183,763) (173,492) (102,357) (523,533) (664,504) - - (98,165) - - 60,190 - - 112,201 - - 4,620 (142,645) (707,296) (758,570) $ (1,043,157) $ (43,042) $ (783,433) 147 THIS PAGE IS INTENTIONALLY LEFT BLANK 148 AGENCY FUNDS The agency fund is used to report 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 for the resources held far improvements at the greyhound racing facility. Flexsteel Decomission Fund—This fund is used to account for the resources held for the decomissioning of the prior Flexsteel site. 149 CITY OF DUBUQUE,IOWA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIE5 EXHIBIT D-1 AGENCY FUND FOR THE YEAR ENDED JUNE 30,2020 Balance Balance Beginning End of Year Additions Deductions of Year CABLE EQUIPMENT FUND ASSETS Cash and pooled cash investments $ 747,424 $ 200,770 $ 67,916 $ 880,278 Prepaids 12,054 7,552 12,054 7,552 Accounts receivable 50,729 47,633 50,729 47,633 Total Assets $ 810,207 $ 255,955 $ 130,699 $ 935,463 LIABILITIES Dueto otheragency $ 810,207 $ 255,955 $ 130,699 $ 935,463 Total Liabilities $ 810,207 $ 255,955 $ 130,699 $ 935,463 DOG TRACK DEPRECIATION FUND ASSETS Cash and pooled cash investments $ 1,012,729 $ 132,987 $ 104,193 $ 1,041,523 Accounts receivable - 10,000 - 10,000 Accrued interest 2,820 3,351 2,820 3,351 Total Assets $ 1,015,549 $ 146,338 $ 107,013 $ 1,054,874 LIABILITIES Due to other agency $ 1,015,549 $ 146,338 $ 107,013 $ 1,054,874 Total Liabilities $ 1,015,549 $ 146,338 $ 107,013 $ 1,054,874 FLEXSTEEL DECOMISSION FUND ASSETS Cash and pooled cash investments $ 965,839 $ 325,343 $ 1,291,182 $ - Notes receivable 1,700,000 - 1,700,000 - Total Assets $ 2,665,839 $ 325,343 $ 2,991,182 $ - LIABILITIES Due to other agency $ 2,665,839 $ 325,343 $ 2,991,182 $ - Total Liabilities $ 2,665,839 $ 325,343 $ 2,991,182 $ - TOTAL AGENCY FUNDS ASSETS Cash and pooled cash investments $ 2,725,992 $ 659,100 $ 1,463,291 $ 1,921,801 Prepaids 12,054 7,552 12,054 7,552 Accounts receivable 50,729 57,633 50,729 57,633 Notes receivable 1,700,000 - 1,700,000 - Accrued interest 2,820 3,351 2,820 3,351 Total Assets $ 4,491,595 $ 727,636 $ 3,228,894 $ 1,990,337 LIABILITIES Due to other agency $ 4,491,595 $ 727,636 $ 3,228,894 $ 1,990,337 Total Liabilities $ 4,491,595 $ 727,636 $ 3,228,894 $ 1,990,337 150 Statistical Section (Unaudited) June 30, 2020 City of Dubuque, Iowa 151 THIS PAGE IS INTENTIONALLY LEFT BLANK 152 CITY OF DUBUQUE, IOWA STATISTICAL SECTION This statistical section of the City's comprehensive annual financial report presents detailed information as a context far understanding what the infarmation in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. Contents Page Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. 154 Revenue Capacity These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax. 162 Debt Capacity These schedules present information 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. 166 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. 177 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs. 179 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 153 CITY OF DUBUQUE,IOWA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2011 2012 2013 2014 2015 Governmental activities Net inveshnent in capital assets $ 329,416,245 $ 347,890,769 � 342,046,442 $ 354,732,451 $ 348,173,267 Restricted 23,738,199 26,180,100 23,491,207 21,501,638 22,047,405 Unrestricted (4,891,381) (16,876,988) (8,361,688) (18,151,279) (49,579,334) Total governmental activities netposition $ 348,263,063 $ 357,193,881 $ 357,175,961 $ 358,082,810 $ 320,641,338 Business-type activities Net investment in capital assets $ 135,026,753 $ 132,237,734 $ 138,498,777 � 138,842,390 $ 148,487,126 Restricted 893,519 957,802 6,011,848 5,315,519 7,796,668 Unrestricted 2,603,799 10,665,596 (641,384) (593,202) (4,568,933) Total business-rype activities net position $ 138,524,071 $ 143,861,132 $ 143,869,241 $ 143,564,707 $ 151,714,861 Primary government Net invesrinent in capital assets $ 464,442,998 $ 480,128,503 $ 480,545,219 $ 493,574,841 $ 496,660,393 Resh-icted 24,631,718 27,137,902 29,503,055 26,817,157 29,844,073 Unrestricted (2,287,582) (6,211,392) (9,003,072) (18,744,481) (54,148,267) Totalprimarygovernmentnetpositions $ 486,787,134 $ 501,055,013 $ 501,045,202 $ 501,647,517 $ 472,356,199 154 TABLE 1 Year 2016 2017 2018 2019 2020 $ 369,244,904 $ 375,578,520 $ 379,040,697 $ 385,005,220 $ 387,344,725 21,473,309 23,955,112 27,269,997 28,321,603 26,501,434 (47,166,839) (43,921,629) (41,853,174) (36,682,314) (35,985,750) $ 343,551,374 $ 355,612,003 $ 364,457,520 $ 376,644,509 $ 377,860,409 $ 161,326,743 $ 164,448,390 $ 168,205,523 $ 179,561,228 $ 191,757,112 4,254,907 3,796,752 3,053,616 3,131,716 3,187,364 (7,339,071) 3,876,760 10,696,792 12,617,567 17,437,890 $ 158,242,579 $ 172,121,902 $ 181,955,931 $ 195,310,511 $ 212,382,366 $ 530,571,647 $ 540,026,910 $ 547,246,220 $ 564,566,448 $ 579,101,837 25,728,216 27,751,864 30,323,613 31,453,319 29,688,798 (54,505,910) (40,044,869) (31,156,382) (24,064,747) (18,547,860) $ 501,793,953 $ 527,733,905 $ 546,413,451 $ 571,955,020 $ 590,242,775 155 CITY OF DUBUQUE,IOWA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2011 2012 2013 2014 2015 Expenses Governmental activities: Public safety $ 23,759,068 $ 26,326,367 $ 28,292,481 $ 27,578,517 $ 25,525,937 Public works 18,978,423 22,917,747 21,607,536 21,306,882 19,207,837 Health and social services 1,072,347 913,954 716,970 1,055,398 928,968 Culture and recreation 10,911,733 12,749,558 13,647,178 13,696,331 13,002,690 Community and economic development 12,890,841 22,030,950 17,388,720 14,591,257 18,064,831 General government 9,052,704 6,133,983 6,248,483 9,610,084 6,420,173 Interest on long-term debt 3,294,951 3,294,912 4,049,640 3,684,993 3,903,667 Total governmental activities expenses 79,960,067 94,367,471 91,951,008 91,523,462 87,054,103 Business-type activities: Sewage disposal works 7,899,011 9,718,669 9,375,748 11,481,103 12,019,866 Water utility 6,523,993 7,410,710 6,817,772 8,812,340 7,800,393 Stormwaterutility 2,811,321 2,750,767 3,347,304 3,431,096 4,131,562 Parkingfacilities 4,775,834 3,152,055 3,586,405 3,732,492 3,383,419 America's River Project 180,086 22,787 22,770 33,579 24,000 Refuse collection 2,828,891 3,173,075 3,468,859 3,750,366 3,740,404 Transit system 2,947,958 3,629,750 3,492,095 3,847,320 4,245,823 Salt 671,647 661,395 346,066 56,468 244,691 Total business-type activities expenses 28,638,741 30,519,208 30,457,019 35,144,764 35,590,158 Total primary government expenses $ 108,598,808 $ 124,886,679 $ 122,408,027 $ 126,668,226 $ 122,644,261 Program Revenues Governmental activities: Charges for services Public safety 2,579,573 2,915,562 2,495,737 2,624,455 2,532,114 Publicworks 5,331,667 5,178,439 4,472,479 5,829,293 6,092,356 Culture and recreation 2,108,177 2,321,553 2,488,844 2,321,265 2,547,843 Other activities 2,530,234 2,873,298 3,264,979 3,921,256 3,493,143 Operating grants and contributions 14,204,627 23,013,997 13,995,316 12,784,907 11,992,439 Capital grants and contributions 23,482,866 16,560,811 10,791,945 12,162,649 9,704,043 Total governmental activities program revenues 50,237,144 52,863,660 37,509,300 39,643,825 36,361,938 Business-type activities: Charges for services Sewage disposal warks 6,643,974 7,827,281 8,924,785 10,025,673 10,582,662 Water utiliry 5,638,277 6,037,073 6,922,582 7,248,790 7,463,430 Stormwaterutility 2,993,539 3,180,134 3,192,256 3,224,504 3,490,040 Parldngfacilities 2,750,610 2,908,989 2,883,865 2,920,148 3,036,214 America's River Project - - - - - Refuse collection 3,082,197 3,257,960 3,346,795 3,700,922 3,783,493 Transit system 193,236 278,835 307,314 275,907 397,545 Salt 773,258 665,942 395,000 45,600 232,271 Operating grants and contriburions 2,773,933 1,579,493 2,264,695 1,717,208 1,866,535 Capital grants and contributions 6,536,527 5,323,486 1,240,583 2,920,942 10,020,715 Total business-type activities program revenues 31,385,551 31,059,193 29,477,875 32,079,694 40,872,905 Total primary government program revenues $ 81,622,695 $ 83,922,853 $ 66,987,175 $ 71,723,519 $ 77,234,843 156 TABLE 2 Year 2016 2017 2018 2019 2020 $ 26,851,624 $ 30,020,343 $ 29,482,962 $ 29,637,417 $ 32,079,903 24,323,023 19,608,137 20,393,871 24,835,035 22,667,132 967,936 815,251 883,217 1,442,658 1,677,181 12,993,331 13,653,509 14,323,710 12,916,646 13,576,571 15,464,781 18,096,170 21,109,384 15,837,039 17,848,570 4,101,423 8,982,668 7,573,081 5,944,116 8,821,692 2,963,134 3,467,685 3,129,502 3,387,730 2,929,997 87,665,252 94,643,763 96,895,727 94,000,641 99,601,046 12,817,669 11,326,661 ll,614,347 12,177,352 11,725,889 6,483,229 6,807,217 7,109,421 7,892,423 7,631,411 5,021,523 6,234,015 6,159,039 7,025,525 5,887,171 3,420,296 3,547,856 2,866,510 2,845,911 3,414,851 21,521 22,893 10,143 19,874 3,161 3,968,761 4,208,268 4,244,551 4,215,881 4,387,683 4,274,967 4,237,054 4,722,979 4,533,060 4,748,463 181,617 45,039 119,421 182,092 333,556 36,189,583 36,429,003 36,846,411 38,892,118 38,132,185 $ 123,854,835 $ 131,072,766 $ 133,742,138 $ 132,892,759 $ 137,733,231 2,713,065 2,930,068 2,600,751 2,535,504 2,641,633 5,765,075 5,681,107 6,654,101 7,327,692 6,732,825 2,723,270 2,767,636 2,874,493 2,459,644 2,237,000 3,887,056 3,541,205 5,864,541 3,815,321 5,455,952 15,301,219 15,028,527 21,569,356 23,198,271 14,484,320 18,667,619 13,360,280 7,779,713 11,048,200 15,450,271 49,057,304 43,308,823 47,342,955 50,384,632 47,002,001 12,158,439 12,442,584 12,659,662 12,479,684 12,606,632 8,406,928 8,553,225 8,906,136 8,959,023 9,273,720 3,754,148 4,076,396 4,367,963 4,714,670 5,061,855 3,247,383 3,286,947 3,034,744 3,066,118 2,313,344 1,605 4 4 4 - 3,857,340 4,185,051 4,232,542 4,351,428 4,448,317 463,688 459,258 465,550 512,385 400,576 81,720 86,887 96,273 174,784 346,753 1,648,077 1,700,171 1,648,403 1,917,366 2,967,619 7,607,721 14,160,820 5,705,262 6,215,459 6,410,594 41,227,049 48,951,343 41,116,539 42,390,921 43,829,410 $ 90,284,353 $ 92,260,166 $ 88,459,494 $ 92,775,553 $ 90,831,411 (Continued) 157 CITY OF DUBUQUE,IOWA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2011 2012 2013 2014 2015 Nct(Expense)/Revenue Governmental activities $ (29,722,923) $ (41,503,811) $ (54,441,708) $ (51,879,637) $ (50,692,165) Business-type activities 2,746,810 539,985 (979,144) (3,065,070) 5,282,747 Total primary government net expense $ (26,976,113) $ (40,963,826) $ (55,420,852) $ (54,944,707) $ (45,409,418) General Revenues and Other Changes in Net Position Governmental acriviries: General Revenues Property taxes $ 28,249,114 $ 30,816,614 $ 32,668,554 $ 33,264,283 $ 36,277,719 L,ocal option sales tax 7,929,761 8,459,888 8,764,787 8,211,366 8,760,246 Hotel/motel tax 1,826,809 1,903,944 1,953,763 2,006,514 2,623,551 Utility franchise fees 2,488,858 2,272,481 2,568,347 2,609,421 2,828,688 Gaming 13,327,223 8,785,453 8,452,298 7,878,008 7,397,709 Unrestrictedinvestmentearnings 668,363 1,529,149 201,153 777,958 668,134 Gain on sale of capital assets 149,937 1,417,048 907,122 483,782 19,495 Other 622,494 - - - - Transfers (1,211,263) (4,749,948) (1,092,236) (2,444,846) (7,288,593) Total governmental activities 54,051,296 50,434,629 54,423,788 52,786,486 51,286,949 Business-type activities: General Revenues Unrestricted investment earnings 184,581 206,672 65,321 135,461 185,356 Gain on sale of capital assets 19,337 84,178 384,697 180,229 6,571 Extraordinary item (2,253,036) (243,722) (555,031) - - Transfers 1,211,263 4,749,948 1,092,236 2,444,846 7,288,593 Total business-type activities (837,855) 4,797,076 987,223 2,760,536 7,480,520 Total primary government $ 53,213,441 $ 55,231,705 $ 55,411,011 $ 55,547,022 $ 58,767,469 Change in Net Position Governmental activities $ 24,328,373 $ 8,930,818 $ (17,920) $ 906,849 $ 594,784 Business-type activities 1,908,955 5,337,061 8,079 (304,534) 12,763,267 Total primary government $ 26,237,328 $ 14,267,879 $ (9,841) $ 602,315 $ 13,358,051 158 TABLE 2 (continued) Year 2016 2017 2018 2019 2020 $ (38,607,948) S (51,334,940) $ (49,552,772) $ (43,616,009) $ (52,599,045) 5,037,466 12,522,340 4,270,124 3,494,540 5,697,225 $ (33,570,482) $ (38,812,600) $ (45,282,648) $ (40,121,469) $ (46,901,820) $ 36,518,506 $ 39,678,473 $ 39,632,246 $ 37,973,888 $ 38,354,691 9,155,411 8,890,046 8,610,948 8,940,109 9,652,332 2,128,042 2,821,745 2,286,469 2,113,273 2,117,506 4,360,107 4,558,847 4,832,958 5,072,350 4,976,472 8,440,161 8,098,324 8,062,251 8,730,986 7,394,294 1,082,165 335,577 688,769 1,858,476 1,857,420 813,492 83,720 309,857 94,980 23,866 (979,900) (1,071,163) (5,423,015) (8,981,064) (10,561,636) 61,517,984 63,395,569 59,000,483 55,802,998 53,814,945 407,528 231,746 268,283 798,497 796,494 102,824 54,074 4,680 80,479 16,500 979,900 1,071,163 5,423,015 8,981,064 10,561,636 1,490,252 1,356,983 5,695,978 9,860,040 11,374,630 $ 63,008,236 S 64,752,552 $ 64,696,461 $ 65,663,038 $ 65,189,575 $ 22,910,036 $ 12,060,629 $ 9,447,7ll $ 12,186,989 $ 1,215,900 6,527,718 13,879,323 9,966,102 13,354,580 17,071,855 $ 29,437,754 $ 25,939,952 $ 19,413,813 $ 25,541,569 $ 18,287,755 159 CITY OF DUBUQUE,IOWA FUND BALANCES,GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Fiscal- 20ll 2012 2013 2014 2015 General Fund Nonspendable $ 868,631 $ 5,613,359 $ 6,646,278 $ 6,549,063 $ 6,082,043 Restricted - - - - - Assigned 8,904,490 5,549,803 3,434,440 1,904,805 647,772 Unassigned 6,139,306 9,371,016 8,806,171 7,356,066 8,693,524 Total general fund $ 15,912,427 $ 20,534,178 $ 18,886,889 $ 15,809,934 $ 15,423,339 All Other Governmental Funds Nonspendable $ 10,320,305 $ 10,975,468 $ 9,092,520 $ 8,640,780 $ 1,183,423 Restricted 18,010,570 31,362,126 30,738,046 23,620,615 30,496,183 Committed 5,203,472 5,843,671 10,827,172 10,548,592 12,298,896 Unassigned (377,363) (429,344) - - - Total all other governmental funds $ 33,156,984 $ 47,751,921 $ 50,657,738 $ 42,809,987 $ 43,978,502 160 TABLE 3 Year 2016 2017 2018 2019 2020 $ 6,049,052 $ 5,585,672 $ 5,414,922 $ 5,369,478 $ 5,145,558 - 2,208 - 229,995 219,741 1,015,935 1,590,065 1,267,250 1,438,616 1,396,196 10,908,497 12,582,596 15,193,241 19,276,479 20,128,223 $ 17,973,484 $ 19,760,541 $ 21,875,413 $ 26,314,568 $ 26,889,718 $ 553,292 $ 944,856 $ 415,271 $ 406,813 $ 1,030,515 27,450,187 28,103,397 30,347,598 34,367,024 30,247,351 7,635,502 6,592,154 4,660,158 3,009,111 5,823,218 - - (2,021,937) (1,185,047) (2,703,558) $ 35,638,981 $ 35,640,407 $ 33,401,090 $ 36,597,901 $ 34,397,526 161 CITY OF DUBUQUE,IOWA CHANGES IN FUND BALANCES,GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Fiscal- 2011 2012 2013 2014 2015 Revenues Taxes $ 40,428,894 $ 43,443,669 $ 45,440,973 $ 46,034,361 $ 50,490,204 Specialassessments 232,535 596,138 175,486 154,692 85,501 Licenses and permits 1,170,922 1,570,022 1,271,771 1,136,941 1,198,420 Intergovernmental 26,171,082 37,574,783 26,580,831 23,050,052 20,828,524 Charges for services 8,723,086 9,296,329 8,952,179 10,264,257 10,711,243 Fines and forfeits 454,ll7 525,389 484,128 455,219 362,661 Investment earnings 654,587 1,511,437 180,016 756,809 668,134 Contributions 1,297,621 1,578,376 370,154 678,561 789,268 Gaming 13,327,223 8,785,453 8,452,298 7,878,008 7,397,709 Miscellaneous 2,075,262 1,319,558 1,315,915 1,705,275 1,466,542 Total revenues 94,535,329 106,201,154 93,223,751 92,114,175 93,998,206 Expenditures Current Public safety 23,950,386 24,476,772 26,506,714 27,644,190 27,570,773 Public works 14,429,415 12,385,929 13,416,108 13,942,772 11,200,427 Health and social services 1,040,114 828,837 680,466 1,049,194 939,172 Culture and recreation 11,279,951 10,873,474 1],218,O19 12,351,497 12,300,454 Community and economic development 12,361,176 22,237,140 18,678,496 14,420,980 16,418,909 Generalgovernment 7,686,929 6,335,947 5,035,108 5,898,293 5,977,605 Debt service Principal 2,820,371 3,224,680 3,182,240 4,595,808 4,910,735 Interest 3,321,157 3,220,546 3,991,115 3,650,694 3,577,829 Capitalprojects 15,102,893 23,459,891 16,636,698 18,779,651 14,829,037 Total expenditures 91,992,392 107,043,216 99,344,964 102,333,079 97,724,941 Excess(deficiency)ofrevenues over (under)expenditures 2,542,937 (842,062) (6,121,213) (10,218,904) (3,726,735) Other Financing Sources(Uses) Issuance ofbonds 6,996,722 27,215,363 6,577,268 - 11,137,321 Discount on bonds (39,547) (71,689) - - 72,852 Premiums on bonds 1,642 123,990 - - - Issuance of refunding bonds 705,000 - 4,949,148 - - Payment to refunded bonds escrow agent (690,000) - (4,949,148) - - Transfers in 15,850,523 8,773,387 15,295,630 15,862,516 18,073,553 Transfers out (18,961,892) (18,336,603) (16,981,203) (17,294,762) (25,241,795) Insurance recovery 628,482 132,425 49,209 59,796 106,288 Sale of capital assets 753,153 2,221,877 2,438,837 666,648 360,436 Total other financing sources(uses) 5,244,083 20,058,750 7,379,741 (705,802) 4,508,655 Net change in fund balances $ 7,787,020 $ 19,216,688 $ 1,258,528 $ (10,924,706) $ 781,920 Debt service as a percentage of noncapital expenditures 8.49% 7.65% 8.57% 9.51% 9.97% 162 TABLE 4 Year 2016 2017 2018 2019 2020 $ 51,580,084 $ 55,949,ll1 $ 55,362,621 $ 54,101,901 $ 54,818,674 111,193 261,233 122,968 113,178 76,394 1,480,643 1,505,564 1,642,498 1,619,892 1,497,086 29,302,824 26,314,297 27,229,554 31,359,695 28,618,060 10,919,854 10,816,025 11,559,017 12,476,036 10,994,598 421,925 484,687 407,322 404,400 365,458 1,082,165 335,577 688,769 1,701,846 1,699,015 ],440,405 689,237 816,922 1,343,916 1,163,721 8,440,161 8,098,324 8,062,251 8,708,702 7,394,294 1,367,875 1,811,681 1,589,072 1,526,804 3,517,089 106,147,129 106,265,736 107,480,994 ll 3,356,370 ll 0,144,389 28,036,551 29,155,128 28,581,466 28,807,920 29,518,515 14,597,823 11,728,716 11,687,309 12,851,393 11,838,812 1,015,987 868,280 854,045 1,046,184 1,340,544 11,909,029 12,397,294 12,776,591 ]3,037,048 13,199,378 13,473,413 16,474,553 20,350,200 15,730,191 16,685,406 6,436,114 7,287,586 6,755,479 6,571,094 7,447,439 10,302,412 17,615,698 7,989,850 5,509,605 7,065,499 3,707,268 3,579,807 3,274,200 3,320,911 3,044,421 31,504,581 16,260,851 17,402,848 20,145,054 21,089,439 120,983,178 ll 5,367,913 109,671,988 107,019,400 ll 1,229,453 (14,836,049) (9,102,177) (2,190,994) 6,336,970 (1,085,064) 3,933,882 230,000 ll0,000 2,883,875 1,372,907 292,521 319,384 16,915 81,693 62,182 - 11,023,700 1,778,325 - - 4,650,000 - - - _ 17,397,007 18,814,586 18,889,096 17,025,952 17,146,200 (18,376,907) (19,917,219) (20,980,391) (18,876,402) (19,858,343) 86,359 41,345 98,058 87,843 71,604 1,063,814 378,861 2,154,546 96,035 665,289 9,046,676 10,890,657 2,066,549 1,298,996 (540,161) $ (5,789,373) $ 1,788,480 $ (124,445) $ 7,635,966 $ (1,625,225) 15.17% 20.94% 11.96% 9.84% 11A1% 163 CITY OF DUBUQUE,IOWA TAXABLE 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 Taxable Assessed Real Taxable Assessed Assessed Total Direct Year Year Value Value Property Value Value Value Tax Rate 2009 2011 $ 2,159,622 $ 3,349,823 $ 8,885 $ 2,150,737 $ 3,349,823 64.20 % 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 6819 ll.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 ll.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 2017 2019 2,765,470 4,141,732 7,921 2,757,549 4,141,732 66.58 10.58844 2018 2020 2,825,245 4,185,444 7,640 2,825,245 4,185,444 67.50 ]0.33144 Source:Dubuque County Assessor's and Auditar's Offices 164 CITY OF DUBUQUE,IOWA PROPERTY TAX RATES TABLE 6 DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS TAX RATES PER$1,000 ASSESSED VALUE Dubuque Board of Ratio of Levy Fiscal Dubuque School Education and Area 1 Dubuque Dubuque Year Year City District Independents Voa Tech County Total Ciry to Total 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 29.38 2011 2013 10.78477 15.40388 0.71653 0.98407 6.43124 3432049 31.42 2012 2014 11.02586 14.60281 0.75274 0.90455 6.43124 33.71720 32.70 2013 2015 ll.02588 13.99630 0.66355 0.90807 6.43124 33.02504 3339 2014 2016 11.02590 14.05629 0.63899 0.91036 6.38779 33.01933 3339 2015 2017 ll.16739 14.97697 0.63146 0.93757 6.29673 34.01012 32.84 2016 2018 10.89220 14.95665 0.62780 1.09993 6.34143 33.91801 32.17 2017 2019 10.58844 14.59791 0.65204 1.09993 5.97760 32.91592 32.11 2018 2020 10.33144 14.71233 0.64911 1.03168 5.94098 32.66554 31.63 Separate components of the Dubuque City Rate is as follows: Levy Fiscal Public Employee Debt Year Year General Transit Insurance Benefits Service Total 2009 20ll $ 8.10000 $ 0.54469 $ 0.20531 $ 1.12441 $ 0.05300 $ 10.02741 2010 2012 8.10000 0.35273 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 0.38382 0.16288 233093 0.04823 11.02586 2013 2015 8.10000 0.48268 0.16595 2.23209 0.04516 11.02588 2014 2016 8.10000 0.48461 0.16428 2.16440 011261 11.02590 2015 2017 8.10000 0.49739 0.14963 2.30637 011400 11.16739 2016 2018 8.10000 0.66319 0.15561 1.89350 0.07990 10.89220 2017 2019 8.10000 0.62877 0.13933 1.62026 0.10008 10.58844 2018 2020 8.10000 0.61307 0.13974 138492 0.09371 10.33144 Source:Dubuque County Auditor's Office. 165 CITY OF DUBUQUE,IOWA PRINCIPAL PROPERTY TAXPAYERS TABLE 7 CURRENT YEAR AND NINE YEARS AGO (IN THOUSANDS OF DOLLARS) 2020 2011 Percentage of Percentage of Total City Total Ciry Taxable Taxable Taxable Taxable Taxpayer Value Rank Value Value Rank Value Peninsula Gaming Company LLC $ 63,779 1 2.26 % $ 56,784 1 2.63 % Kennedy Mall Inc. 38,960 2 138 31,133 2 1.44 GRDT Investments LLC(Queck) 31,301 3 L ll 19,157 3 0.89 ITC Midwest LLC 28,451 4 1.01 Progressive Proccessing LLC (Hormel) 25,380 5 0.90 Walter Development LLC 25,166 6 0.89 MAR Holdings LLC(Medical Assoc.) 21,343 7 0.76 16,884 5 0.78 Nordstrom,Inc. 14,800 8 0.52 14,440 6 0.67 Flexsteel Industries,Inc. 14,792 9 0.52 Platinum Holdings LLC 13,500 10 0.48 11,179 7 0.52 Lexington Dubuque LLC 9,844 10 0.46 Otto A LLC 17,500 4 0.81 Asbury Dubuque LLC 9,925 9 0.46 Minglewood Limiited Partnership 9,948 8 0.46 $ 277,472 9.83 % $ 196,794 9.12 % Source: Dubuque Counry Auditor's Office 166 CITY OF DUBUQUE,IOWA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS TABLE 8 (IN THOUSANDS OF DOLLARS) Total Percent of Total Tax Ratio of Tax Current Current Delinquent Total Tax Collections Outstanding Delinquent Fiscal Levy Levy Tax Taxes Tax Collections to Total Delinquent Taxes to Total Year Year (1) Collections Collected Collections (2) Tax Levy Taxes Tax Levy 2011 2010 $ 19,906 $ 19,793 99.4 % $ 13 $ 19,806 99.5 % $ 276 1.39 % 2012 20ll 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 99.7 8 23,923 99.7 211 0.88 2015 2014 24,866 24,715 99.4 7 24,722 99.4 362 1.46 2016 2015 24,944 24,889 100.0 84 24,973 100.0 288 115 2017 2016 26,435 26,318 99.6 2 26,320 99.6 354 134 2018 2017 25,924 26,026 100 1 26,027 100.4 199 0.77 2019 2018 26,556 26,442 99.6 4 26,446 99.6 202 0.76 2020 2019 26,360 26,106 99.0 1 26,107 99.0 1,096 416 (1)Excludes tax increment levy. (2)Includes taxes collected in June by the County but not received by the City until July. 167 CITY OF DUBUQUE RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Governmental Activities Business- General Tax Increment Tax Increment General Fiscal Obligation Financing Financing Other Loans Obligation Year Bonds Bonds Notes Payable Bonds 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 21,920,537 1,235,903 5,638,871 34,921,131 2014 52,568,648 21,556,435 1,030,036 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 53,800,719 20,333,690 451,763 4,650,000 44,487,023 2018 48,833,498 19,867,562 255,881 4,067,700 41,979,910 2019 46,917,828 19,366,434 176,054 3,984,111 39,246,002 2020 41,985,513 18,825,306 91,860 3,899,294 36,220,856 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 168 TABLE 9 Type Activities Capital Other Total Percentage of Loan Revenue Loans Primary Personal Per Notes Bonds Payable Government Income(1) Capita(1) $ 33,195,408 $ 6,777,793 $ 2,252,109 $ 125,292,437 5.1 °/a $ 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 14,151,437 286,263 210,798,058 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 4,637 110,513,944 33,840,566 5,209,900 273,287,605 10.1 4,648 112,765,210 33,474,133 4,181,826 265,425,720 9.1 4,555 111,655,588 33,097,700 3,152,331 257,596,051 8.4 4,446 ll6,965,647 32,706,267 2,152,331 252,847,074 * 4,368 169 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 Taxable Taxable Assessed Assessed Fiscal Obligation Value of Value of Value of Value of Per Year Bonds Property Property Property Property Capita 2011 $ 57,816 $ 2,159,622 2.68 % $ 3,349,823 1.73 % $ 1,003 2012 88,196 2,243,474 3.93 3,406,186 2.59 1,530 2013 91,438 2,337,129 3.91 3,476,638 2.63 1,586 2014 85,308 2,398,151 3.56 3,503,774 2.43 1,480 2015 105,483 2,522,048 4.18 3,686,202 2.86 1,830 2016 105,676 2,508,933 4.21 3,723,003 2.84 1,808 2017 98,288 2,652,700 3.71 3,914,425 2.51 1,672 2018 90,813 2,686,813 338 3,931,498 231 1,558 2019 86,164 2,765,470 3.12 4,141,732 2.08 1,487 2020 78,206 2,825,245 2.77 4,185,444 1.87 1,351 *Prior year information has been modified to net GO Bonds with the fund balance in Debt Service. *General Obligation Bonds are netted with the fund balance in the Debt Service fund. 170 CITY OF DUBUQUE,IOWA DIRECT AND OVERLAPPING DEBT TABLE 11 AS OF JUNE 30,2020 Net General Tax Tax Obligation Increment Increment Sales Tax Percentage Amount Bonded Debt Financing Financing Revenue Loans Applicable Applicable to Jurisdiction Outstanding Bonds(1) Notes Bonds Payable to City Government Direct,City of Dubuque,Iowa $ 76,664,999 $ 18,985,000 $ 91,860 $ - $ 3,899,295 100.00 % $ 99,641,154 Overlapping: Dubuque County 20,405,000 - - - 205,561 73.85 % 15,220,899 Dubuque Community School District - - - - - 70.57 % - Northeast Iowa Community College 13,340,000 - - - 18,015,000 53.64 % 16,818,822 TotalOverlapping 33,745,000 - - - 18,220,561 32,039,721 Total $ 110,409,999 $ 18,985,000 $ 91,860 $ - $ 22,119,856 $ 131,680,875 Source: Dubuque County Auditor,Dubuque Community School District and Northeast Iowa Community College (1)Excludes sales tax revenue bonds. Note: Overlapping governments are those that coincide,at least in part,with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of Dubuque. This process recognizes that,when considering the city's ability to issue and repay long-term debt,the entire debt burden borne by the residents and businesses should be taken into account. However,this does not imply that every taxpayer is a resident,and therefore respo- nsible for repaying the debt, of each overlapping government. 171 CITY OF DUBUQUE,IOWA LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS (IN THOUSANDS OF DOLLARS) 2011 2012 2013 2014 Debit limit $ 174,333 $ 177,668 $ 181,668 $ 183,621 Total net debt applicable to limit 109,636 142,551 144,118 131,289 Legal debit margin $ 64,697 $ 35,117 $ 37,550 $ 52,332 Total net debt applicable to the debt limit as a percentage of debt limit 62.89% 80.23°/a 79.33% 71.50% 172 TABLE 12 2015 2016 2017 2018 2019 2020 $ 193,114 $ 196,031 $ 207,174 $ 209,049 $ 221,513 $ 239,298 154,643 152,386 141,076 124,926 117,223 109,021 $ 38,471 $ 43,645 $ 66,098 $ 84,123 $ 104,290 $ 130,277 80.08% 77.74% 68.10% 59.76% 52.92% 45.56% Legal Debt Margin Calculation for Fiscal Year 2020 Estimated actual value $ 4,785,964,957 Debt limit- 5% of total actual valuation $ 239,298,248 Debt applicable to limit: (Including GO Debt, TIF Debt, and Lease) (109,020,970) Legal debt margin $ 130,277,278 173 CITY OF DUBUQUE,IOWA REVENUE DEBT COVERAGE TABLE 13 LAST TEN FISCAL YEARS (IN THOUSANDS OF DOLLARS) Gross Operating Net Revenue Current Fiscal Year's Fiscal Revenues Expenses Available For Debt Service Requirements Coverage Year (1) (2) Debt Service Principal Interest Total (3) WATER UTILITY 2011 5,680 5,316 364 70 182 252 1.44 2012 6,087 5,895 192 255 238 493 0.39 2013 6,944 5,391 1,553 260 231 491 3.16 2014 7,283 7,384 (101) 432 344 776 (0.13) 2015 7,511 6,322 1,189 275 218 493 2.41 2016 8,508 4,826 3,682 285 2ll 496 7.42 2017 8,589 4,678 3,911 473 305 778 5.03 2018 8,962 4,989 3,973 489 288 777 S.11 2019 9,160 5,726 3,434 505 345 850 4.04 2020 9,497 5,599 3,898 1,049 371 1,420 2.75 STORMWATER UTILITY 2011 3,023 1,679 1,344 100 178 278 4.83 2012 3,211 1,497 1,714 231 243 474 3.62 2013 3,194 2,019 1,175 462 268 730 1.61 2014 3,240 1,833 1,407 320 309 629 2.24 2015 3,551 2,162 1,389 331 311 642 2.16 2016 3,948 2,140 1,808 341 301 642 2.82 2017 4,224 2,601 1,623 352 291 643 2.52 2018 4,486 2,374 2,ll2 363 283 646 3.27 2019 5,062 3,229 1,833 343 273 616 2.98 2020 5,303 1,964 3,339 1,503 7ll 2,214 1.51 SEWAGE DISPOSAL WORKS 2011 6,699 6,029 670 33 382 415 1.61 2012 7,878 7,018 860 34 1,129 1,163 0.74 2013 8,951 6,113 2,838 1,719 1,443 3,162 0.90 2014 10,083 6,754 3,329 2,326 1,423 3,749 0.89 2015 10,629 6,950 3,679 2,603 1,358 3,961 0.93 2016 12,237 7,702 4,535 2,610 1,435 4,045 1.12 2017 12,475 6,082 6,393 2,652 1,454 4,106 1.56 2018 12,731 6,360 6,371 2,707 1,476 4,183 1.52 2019 12,667 7,013 5,654 2,878 1,429 4,307 1.31 2020 12,777 6,645 6,131 2,946 1,362 4,308 1.42 (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. 174 CITY OF DUBUQUE,IOWA WATER AND SEWER RECEIPT HISTORY TABLE 14 LAST TEN FISCAL YEARS Water Sewer Gallons Fiscal Year Revenue Revenue Billed 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 2019 8,636,521 12,266,217 1,750,735,443 2020 8,958,162 12,395,751 1,738,198,948 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 2021 2020 2019 2018 2017 2016 2015 2014 First 22,440 @ $ 0.00512 $ 0.00512 $ 0.00488 $ 0.00474 $ 0.00447 $ 0.00406 $ 0.00387 $ 0.00355 Next 89,760 @ 0.00419 0.00419 0.00399 0.00387 0.00365 0.00332 0.00316 0.00290 Next 261,800 @ 0.00391 0.00391 0.00372 0.00361 0.00340 0.00309 0.00294 0.00270 Next 374,000 @ 0.00345 0.00345 0.00329 0.00280 0.00301 0.00274 0.00261 0.00239 Excess @ 0.00302 0.00302 0.00288 0.00280 0.00264 0.00240 0.00229 0.00210 175 CITY OF DUBUQUE,IOWA WATER METERS BY RATE CLASS TABLE 15 LAST TEN FISCAL YEARS Fiscal Year Residential Commercial Industrial Government Total 2011 20,3 3 8 1,904 79 51 22,3 72 2012 20,532 1,902 79 52 22,565 2013 20,753 1,921 80 53 22,807 2014 20,887 1,945 81 68 22,981 2015 20,969 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 20,498 2,019 83 ll5 22,715 2019 20,523 2,148 80 147 22,898 2020 21,886 1,941 69 138 24,034 176 CITY OF DUBUQUE,IOWA LARGEST WATER AND SEWER CUSTOMERS TABLE 16 FISCAL YEAR 2020 Percentage of Percentage of Water Total Water Sewer Total Sewer Customer Receipts Rank Receipts Receipts Rank Receipts Rousselot Inc#155296 $ 390,478 1 3.50 % Prairie Farms Dairy Inc 218,443 2 1.96 Hormel Foods Corporation* 163,328 3 1.46 $ 368,486 1 2.97 % Hormel Foods Corporation* 157,032 4 1.41 353,173 2 2.85 Alpine Park Community 47,996 5 0.43 96,599 3 0.78 Finley Hospital 47,717 6 0.43 73,714 6 0.59 Stonehill Nursing Home 45,4ll 7 0.41 83,082 4 0.67 Yes Companies Exp Fred,LLC 41,322 8 0.37 80,595 5 0.65 APC,Inc. 40,960 9 037 Georgia Pacific 38,867 10 0.35 61,002 7 0.49 IADU Table Mound MHP LLC 60,801 8 0.49 Grand Harbor Resor&Waterpark 52,534 9 0.42 Ronsan Enterprises Inc/Days Inn 42,670 10 0.34 Total Receipts $ 11,168,595 $ 12,395,751 *Same company,separate accounts.Previously combined several accounts under same business,now listed separately. 177 CITY OF DUBUQUE,IOWA SALES TAX INCREMENT BONDS TABLE 17 FISCAL YEAR ENDING JUNE 30,2020 Estimated Second Lien Remaining Sales Tax Senior Lien Remaining Series 2014 Revenues Increment Series 2015A Revenues After Net Debt After Second Fiscal Revenue Net Debt Service Senior Lien Service Lien Debt Year Receipts* (1) Debt Service (2) Service 2015 * $ 2,037,489 $ - $ 2,037,489 $ - $ 2,037,489 2016 * 2,532,846 - 2,532,846 - 2,532,846 2017 * 3,945,134 - 3,945,134 (323,100) 3,622,034 2018 * 3,654,915 (762,650) 2,892,265 (323,100) 2,569,165 2019 * 4,207,297 (762,650) 3,444,647 (323,100) 3,121,547 2020 * 4,709,559 (762,650) 3,946,909 (323,100) 3,623,809 2021 5,574,673 (762,650) 4,812,023 (323,100) 4,488,923 2022 6,380,938 (762,650) 5,618,288 (323,100) 5,295,188 2023 6,866,198 (2,767,650) 4,098,548 (438,100) 3,660,448 2024 6,956,351 (2,771,000) 4,185,351 (1,393,500) 2,791,851 2025 6,957,401 (2,768,969) 4,188,432 (1,400,500) 2,787,932 2026 6,952,046 (2,771,031) 4,181,015 (1,344,250) 2,836,765 2027 6,952,532 (2,768,719) 4,183,813 (1,363,000) 2,820,813 2028 6,947,494 (2,768,394) 4,179,100 (1,365,000) 2,814,100 2029 6,723,750 (2,767,300) 3,956,450 (1,365,000) 2,591,450 2030 6,250,000 (2,768,800) 3,481,200 - 3,481,200 2031 4,467,912 (2,766,400) 1,701,512 - 1,701,512 2032 2,217,912 - 2,217,912 - 2,217,912 2033 2,250,000 - 2,250,000 - 2,250,000 * Actual receipts. (1)Net of capitalized interest and the debt service reserve fund. (2)Net of capitalized interest. 178 CITY OF DUBUQUE,IOWA DEMOGRAPffiC AND ECONOMIC STATISTiCS TABLE 18 LAST TEN CALENDAR YEARS Per Capita Public Personal Median School Unemployment Personal Income Age Enrollment Rate Year Population Income (1) (2) (3) (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 2,903,485,148 49,823 37 10,507 2.2 2019 57,941 3,049,782,476 52,636 38 10,459 2.2 2020 57,882 * * 38 10,489 8.7 Data Sources: (1) U.S. Department of Commerce, Bureau of Economic Analysis. (2) Greater Dubuque Development Corporation. (3) Dubuque Community School District. (4) Iowa Department of Employment Services as of June 30. * Unavailable at report date. 179 THIS PAGE IS INTENTIONALLY LEFT BLANK iso CITY OF DUBUQUE,IOWA PRINCIPAL EMPLOYERS TABLE 19 CURRENT YEAR AND NINE YEARS AGO 2020 2011 Percentage of Percentage of #of Total City #of Total City Employer Employees Rank Employment(1) Employees Rank Employment(1) John Deere(2) 2,600 1 4.88 % 1,946 2 3.58 % Dubuque Community Schools 1,957 2 3.67 2,065 1 3.80 Mercy One 1,410 3 2.65 1,324 3 2.44 Medical Associates 1,061 4 1.99 999 5 1.84 Unity Point Health-Finley Hospital 975 5 1.83 920 6 1.69 Andersen Windows 750 6 1.41 550 9 1.01 City of Dubuque 737 7 1.38 666 7 1.26 Sedgwick 725 8 136 Cottingham&Butler 715 9 1.34 Dubuque Bank&Trust and Heartland Financial USA, 600 10 1.13 IBM 1,300 4 2.39 Holy Family Catholic Schools 575 8 1.06 Prudential Retirement 550 9 1.01 Dubuque Racing Association 413 10 0.76 11,530 21.63 % 11,308 20.86 % Source: Greater Dubuque Development Corp. (1)Based on the percentage of total employment for Dubuque area from the U.S. Department of Labor,Bureau of Labar Statistics. (2)Located just outside Ciry Limits. 181 CITY OF DUBUQUE,IOWA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/DEPARTMENT LAST TEN FISCAL YEARS 2011 2012 2013 2014 Public Safety Emergency Communications 13.00 13.00 13.00 13.00 Fire 90.00 90.00 90.00 90.00 Police 11334 ll4.25 ll 5.00 115.08 Building Services 9.00 9.00 9.00 9.24 Public Works Public Works 87.42 87.42 86.17 86.42 Engineering 27.00 27.00 29.00 29.00 Health&Social Services Health Services 4.00 4.00 4.00 4.00 Human Rights 3.00 4.00 5.00 5.00 Cultural and Recreation Civic Center 0.15 0.15 0.15 0.15 Library 18.00 18.00 19.00 19.00 Park 22.50 23.50 23.50 23.50 Recreation 8.93 9.93 9.93 9.93 Community&Economic Development Community/Economic Dev 3.00 3.00 3.00 4.00 Housing Services 22.25 23.00 25.80 27.00 Planning Services 8.00 8.00 8.00 8.00 General Government Airport 12.00 12.00 12.00 12.00 Cable TV 2.00 2.00 2.00 2.00 City Clerk's Office 3.00 3.00 3.00 3.00 City Manager's Office 15.00 14.00 15.00 15.00 Finance 14.00 14.00 14.00 14.08 Legal 5.00 5.00 5.00 5.00 Information Services 7.00 7.00 7.50 8.00 Business Type Water 25.00 25.00 25.00 26.00 Water&Resource Recovery Center 18.00 18.00 18.00 18.00 Parking 9.00 9.00 9.00 9.00 Transit 7.00 6.00 6.00 6.32 Total 546.59 549.25 557.05 561.72 Source: City Budget Records Departments with employees who are allocated to more than one function are reflected in the area with largest number of employees. 182 TABLE 20 2015 2016 2017 2018 2019 2020 13.00 13.00 14.00 14.00 14.00 15.00 90.00 90.00 90.00 90.00 90.00 91.00 115.88 116.00 116.00 ll 6.00 117.00 ll 8.00 11.66 12.00 12.00 12.00 11.00 11.00 86.42 86.42 86.42 86.42 87.42 87.42 29.00 30.00 30.00 26.06 26.00 27.00 4.00 4.00 4.00 4.00 4.00 5.00 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 22.50 22.50 22.50 22.50 10.93 11.93 11.93 11.93 11.93 11.93 4.00 2.00 2.00 3.00 3.00 3.00 26.00 21.00 25.00 25.00 23.52 27.00 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 16.00 16.00 16.00 17.00 17.50 15.50 14.8 8 15.00 15.00 15.00 14.0 0 19.00 5.00 5.00 5.00 4.00 4.00 4.00 8.00 8.00 8.00 8.00 8.00 8.00 26.00 25.00 25.00 25.00 24.00 25.00 18.00 17.00 17.00 17.00 15.00 15.00 9.00 9.00 8.00 7.00 - - 8.00 13.00 13.00 14.00 20.00 23.00 568.42 567.00 570.00 567.06 562.02 577.50 183 CITY OF DUBUQUE,IOWA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Fiscal- 2011 2012 2013 2014 Public Safety Police Physical arrests 6,350 6,319 6,106 5,532 Traffic violations 12,289 11,836 12,089 8,959 Parking violations 35,799 34,910 35,516 36,768 Fire Number of calls answered 4,884 5,307 4,792 5,165 Inspecrionsconducted 555 589 512 471 Sewer Sewage system Daily average treatment in gallons 8,132,000 7,817,000 10,987,000 7,091,000 Maximum daily capacity of treatment plant in gallons 23,240,000 23,240,000 23,240,000 24,500,000 Water systems Daily average consumption in gallons 7,636,000 7,226,000 6,953,000 7,235,000 Maximum daily capacity of plant in gallons 18,000,000 18,000,000 18,000,000 18,000,000 Refuse(Municipal Collection) Tonnage 10,660 ll,180 10,535 10,311 Sources: Various Ciry Departments. Statistics updated for fiscal year 2017 184 TABLE 21 Year 2015 2016 2017 2018 2019 2020 3,767 3,397 3,238 3,519 3,403 2,830 7,354 9,058 9,063 9,415 8,369 7,156 37,635 38,880 33,953 32,857 25,685 18,044 5,603 5,750 5,990 5,949 6,058 6,304 791 993 1,649 1,675 1,232 1,260 7,237,000 7,016,000 7,377,000 7,900,000 7,930,000 8,730,000 24,500,000 24,500,000 24,500,000 24,500,000 24,500,000 24,500,000 6,956,000 7,068,184 7,200,000 6,917,000 6,133,000 6,210,000 18,000,000 18,000,000 18,000,000 18,000,000 18,000,000 18,000,000 10,690 11,098 11,284 11,481 11,569 12,212 185 CITY OF DUBUQUE,IOWA CAPITAL ASSETS BY FUNCTION LAST TEN FISCAL YEARS 2011 2012 2013 2014 Public safety Police Stations 1 1 1 1 Patrol units 22 22 22 22 Fire Stations 6 6 6 6 Aerial trucks 3 3 3 3 Public works Streets Miles(1) 325 328 329 331 Streetlights(1) 1,931 2,081 2,084 2,110 Health and social services Hospital 2 2 2 2 Number ofpatient beds 389 389 389 389 Cultural and recreation Library 1 1 1 1 Golf 1 1 1 1 Parks 48 51 51 51 Acreage 901 1,001 1,001 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 Tennis courts 20 20 20 20 Sewer Sewage system Miles of sanitary sewer(1) 300 304 304 307 Miles of storm sewers(1) 150 155 141 144 Number of treatment plants 1 1 1 1 Number of service connectors 21,702 22,393 22,428 22,888 Water systems Miles of water mains 319 320 321 315 Number of service connectors 22,092 22,161 22,536 22,702 Number of city owned fire hydrants 2,854 2,863 2,879 2,336 Sources: Various City Departments. (1)City GIS System 186 TABLE 22 2015 2016 2017 2018 2019 2020 1 1 1 1 1 1 22 22 22 22 22 22 6 6 6 6 6 6 3 3 3 3 3 3 333 332 336 334 340 331 2,161 2,162 2,184 2,312 2,436 2,489 2 2 2 2 2 2 373 373 373 373 373 373 1 1 1 1 1 1 1 1 1 1 1 1 53 53 53 53 53 53 974 974 974 974 974 985 1 1 1 1 1 1 2 2 2 2 2 2 11 11 11 11 10 10 1 1 1 1 1 1 20 20 20 20 16 16 320 322 326 321 332 333 145 147 152 156 158 151 1 1 1 1 1 1 22,928 23,ll9 23,343 23,423 23,488 23,601 318 329 337 370 410 325 22,787 22,970 23,443 23,546 23,605 23,695 2,346 2,380 2,450 2,973 2,539 2,553 187 CITY OF DUBUQUE,IOWA RETAIL SALES TABLE 23 LAST TEN CALENDAR YEARS Taxable Number of Year Retail Sales Businesses 20ll $ 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 1,323,052,623 2,970 2019 1,353,208,250 3,353 2020 * * Data Sources: Iowa Department of Revenue * Unavailable at report date 188 Compliance Section June 30, 2020 City of Dubuque, Iowa 189 THIS PAGE IS INTENTIONALLY LEFT BLANK 190 EideBailly CPAs&BUSINESS ADVISORS 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 GovernmentAuditinq Standards To the Honorable Mayor and Members of the City Council City of Dubuque, lowa 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 information of the City of Dubuque, lowa, (City) as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated January 15, 2021. 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 GovernmentAuditing Standards, and accordingly,this report 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 GovernmentAuditing Standards, and accordingly,this report does not extend to those financial statements. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) as a basis for designing 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 effectiveness 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 performing their assigned functions,to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness,yet important enough to merit attention by those charged with governance. Whnt inspires you,inspires us. eidebailly.com 191 1545 Associates Dr.,Ste. 101 Dubuque,IA 52002-2299 T 563.556.1790 F 563.557.7842 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 and therefore, material weaknesses or significant deficiencies may exist that have not been identified. We did identify a certain deficiency in internal control, described in the accompanying schedule of findings and questioned costs as item 2020-001 that we consider to be a material weakness. 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 financial statements. 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 GovernmentAuditing Standards. However, we noted certain immaterial instances of non-compliance which are described in Part IV of the accompanying schedule of findings and questioned costs. Comments involving statutory and other legal matters about the City's operations for the year ended June 30, 2020 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 GovernmentAuditing Standards in considering the City's internal control and compliance. Accordingly,this communication is not suitable for any other purpose. �� G � �� Dubuque, lowa January 15, 2021 192 EideBailly CPAs&BUSINESS ADVISORS 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, lowa Report on Compliance for Each Major Federal Program We have audited the City of Dubuque, lowa'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 for the year ended June 30, 2020.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 GovernmentAuditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred.An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions on compliance for each major federal program. However, our audit does not provide a legal determination of the City's compliance. Whnt inspires you,inspires us. eidebailly.com 193 1545 Associates Dr.,Ste. 101 Dubuque,IA 52002-2299 T 563.556.1790 F 563.557.7842 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 direct and material effect on each of its major federal programs for the year ended June 30, 2020. Report on Internal Control over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered 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 internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions,to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis.A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance,yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. 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 the 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. �� G �° �� Dubuque, lowa January 15, 2021 194 City of Dubuque, lowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2020 Pass-through Federal Entity Amounts Passed- Federal Grantor/Pass-Through CFDA Identifying Through to Grantor/Program or Cluster Title Number Number Expenditures Subrecipients U.S.Department of A�riculture Direct program Soil and Water Conservation 10.902 $ 71,799 $ - Environmental Quality Incentives Program 10.912 15,094 Conservation Stewardship Program 10.924 2,594 - Total U.S.Department of Agriculture 89,487 - U.S.Department of Housin�and Urban Development Direct program CDBG-Entitlement Grants Cluster Community Development Block Grants/Entitlement Grants 14.218 49,237 - Community Development Block Grants/Entitlement Grants 14.218 251,317 - Community Development Block Grants/Entitlement Grants 14.218 312,448 Community Development Block Grants/Entitlement Grants 14.218 846,560 115,880 COVID-19-Community Development Block Grants/Entitlement Grants 14.218 172,900 - Total CDBG-Entitlement Grants Cluster 1,632,462 115,880 Continuum of Care Program 14.267 84,739 - Pass-through program from lowa Economic Development Authority CDBG-Disaster Recovery Grants-Pub.L.No.113-2 Cluster National Resiliency Disaster Recovery Competition 14.272 B-13-DS-19-001 9,680,113 - Direct program Section 8 Project-Based Cluster Lower Income Housing Assistance Program- Section 8 Moderate Rehabilitation 14.856 92,080 - Housing Voucher Cluster Section 8 Housing Choice Vouchers 14.871 5,343,226 - Section 8 Housing Choice Vouchers 14.871 66,740 - Total Housing Voucher Cluster 5,409,966 - Lead-Based Paint Hazard Controlin Privately-Owned Housing 14.900 545,198 - Total U.S.Department of Housing and Urban Development 17,444,558 115,880 U.S.Department of Interior Pass-through program from lowa Department of Cultural Affairs Historic Preservation Fund Grants-In-Aid 15.904 2019-03 6,589 - U.S.Deqartment of Justice Direct program COVID-19-Coronavirus Emergency Supplemental Funding Program 16.034 1,742 - Pass-through program from lowa Department of Justice Violence Against Women Formula Grants 16.588 VW-19-14-G 1,216 - Violence Against Women Formula Grants 16.588 VW-20-41-LE 1,470 - 2,686 - 195 City of Dubuque, lowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2020 Pass-through Federal Entity Amounts Passed- Federal Grantor/Pass-Through CFDA Identifying Through to Grantor/Program or ClusterTitle Number Number Expenditures Subrecipients U.S.Department of Justice(continued) Direct program Bulletproof Vest Partnership Program 16.607 $ 4,428 $ - Pass-through program from lowa Department ofJustice Public Safety Partnership and Community Policing Grants 16J10 18-CAMP-OS 5,315 Public Safety Partnership and Community Policing Grants 16.710 18-COPS-HEROIN-02 2,618 - 7,933 - Direct program Edward Byrne Memorial Justice Assistance Grant Program 16.738 7,185 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 12,168 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 19,548 - Pass-through program from Dubuque County Sheriff's Office Edward Byrne Memorial Justice Assistance Grant Program 16J38 17-JAG-299019 31,658 70,559 - Total U.S.Department of Justice 87,348 - U.S.Department of Transportation Direct program Airport Improvement Program 20.106 294,122 - COVID-19-Airport Improvement Program 20.106 274,162 - Airport Improvement Program 20.106 581,546 - Airport Improvement Program 20.106 338,794 - 1,488,624 - Highway Planning and Construction Cluster Pass-through program from lowa Department of Transportation Highway Planning and Construction 20.205 EDP-2100(695)-7Y-31 547,006 - Highway Planning and Construction 20.205 HDP-2100(664)--71-31 7,916 - Highway Planning and Construction 20.205 HDP-2100(679)-71-31 307,591 - Highway Planning and Construction 20.205 SB-IA-2100(675)--7T-31 17,000 - Highway Planning and Construction 20.205 STP-U-2100(693)-70-31 282,070 - Highway Planning and Construction 20.205 STP-U-2100(634)-70-31 11,469 - Highway Planning and Construction 20.205 TAP-U-2100(683)--81-31 15,668 - Total Highway Planning and Construction Cluster 1,188,720 - Federal Transit Cluster Direct program Federal Transit-Formula Grants 20.507 80,130 - COVID-19-Federal Transit-Formula Grants 20.507 1,175,154 - Federal Transit-Formula Grants 20.507 767,200 - 2,022,484 - Buses and Bus Facilities Formula,Competitive,and Low or No Emissions Programs 20.526 1,632,894 - Total Federal Transit Cluster 3,655,378 - 196 City of Dubuque, lowa Schedule of Expenditures of Federal Awards Year Ended June 30, 2020 Pass-through Federal Entity Amounts Passed- Federal Grantor/Pass-Through CFDA Identifying Through to Grantor/Program or ClusterTitle Number Number Expenditures Subrecipients U.S.Department of Transportation(continued) Pass-through program from lowa Department ofTransportation Formula Grants for Rural Areas and Tribal Transit Program 20.509 ICB-CY19 $ 6,792 $ - Transit Services Program Cluster Enhanced Mobility of Seniors and Individuals with Disabilities 20.513 2020-001-00-SFY20 60,614 - Highway Safety Cluster lowa Department of Public Safety State and Community Highway Safety 20.600 PAP 19-402-MOOP 12,435 - State and Community Highway Safety 20.600 PAP 20-402-MOOP 8,184 - TotalHighwaySafetyCluster 20,619 - Total U.S.Department of Transportation 6,420,747 - Environmental Protection Aeencv Direct program Brownsfields Assessment and Cleanup Cooperative Agreements 66.818 48,878 - Brownsfields Assessment and Cleanup Cooperative Agreements 66.818 99,773 - Brownsfields Assessment and Cleanup Cooperative Agreements 66.818 61,289 - Brownsfields Assessment and Cleanup Cooperative Agreements 66.818 500 Total Environmental Protection Agency 210,440 - Corporation for National and Communitv Service Pass-through program from lowa Commission on Volunteers AmeriCorps 94.006 19-AG10 119,916 AmeriCorps 94.006 19-AF-OS 35,297 AmeriCorps 94.006 18-AC-10 45,459 - AmeriCorps 94.006 18-FP-02 6,725 - Total Corporation for National and Community Service 207,397 - Total $ 24,466,566 $ 115,880 197 City of Dubuque, lowa Notes to the Schedule of Expenditures of Federal Awards Year Ended June 30, 2020 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, lowa, (the City) under programs of the federal government for the year ended June 30, 2020.The information is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position,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. Federal financial assistance provided to a subrecipient is treated as an expenditure when it is paid to the subrecipient. Note 3 - Indirect Cost Rate The City has not elected to use the 10%de minimis cost rate. 198 City of Dubuque, lowa Schedule of Findings and Questioned Costs Year Ended June 30, 2020 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 Yes Significant deficiencies identified not considered to be material weaknesses None reported Noncompliance material to financial statements noted? No FEDERAL AWARDS Internal control over major programs: Material weaknesses identified No Significant deficiencies identified not considered to be material weaknesses None reported Type of auditor's report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with Uniform Guidance 2 CFR 200.516: No Identification of major programs: Name of Federal Pro�ram CFDA Number CDBG - Entitlement Grants Cluster Community Development Block Grants/Entitlement Grants 14.218 CDBG - Disaster Recovery Grants- Pub. L. No. 113-2 Cluster National Resiliency Disaster Recovery Competition 14.272 Housing Voucher Cluster Section 8 Housing Choice Vouchers 14.871 Airport Improvement Program 20.106 Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee? No 199 City of Dubuque, lowa Schedule of Findings and Questioned Costs Year Ended June 30, 2020 Part II: Findings related to Financial Statements Material Weakness 2020-001 Material Audit Adjustments Criteria—A properly designed system of internal control over financial reporting allows entities to initiate, authorize, record, process, and report financial data reliably in accordance with generally accepted accounting principles. Condition—During the course of our engagement, we proposed material audit adjustments to accounts payable and the Schedule of Expenditures of Federal Awards. We also proposed significant audit adjustments to receivables, unavailable revenue, and capital assets. Cause—The City's existing internal controls over accounts payable,the Schedule of Expenditures of Federal Awards, receivables, unavailable revenue, and capital assets are limited. Effect—The effect of this condition was financial data not in accordance with generally accepted accounting principles. Recommendation—We recommend the City increase procedures over accounts payable, the Schedule of Expenditures of Federal Awards, receivables, unavailable revenue, and capital assets. Views of Responsible Officials—We agree with the auditor's comments.The City of Dubuque Finance Department has experienced significant staff turnover, including key management staff, in the past twelve months.The following action will be taken to improve the situation.An Assistant Director of Finance, who possesses significant government accounting experience,was hired on April 1, 2020.The Assistant Director of Finance has taken the lead of the audit and financial preparation and will continue to improve procedures. In addition,the City is in the process of selecting a new Enterprise Resource Planning (ERP) system to be implemented over the next two years.The new ERP system will have better management and controls over accounts payable, grants, accounts receivable, unearned revenue, and assets.The current ERP system lacks functionality and the procedures related to accounts payable,grants, accounts receivable, unearned revenue, and capital assets are all manual and compiled by reviewing invoices and receipts and compiling the information into spreadsheets. Part III: Findings and Questioned Costs for Federal Awards There were no findings and questioned costs to report. 200 City of Dubuque, lowa Schedule of Findings and Questioned Costs Year Ended June 30, 2020 Part IV: Other Findings Related to Required Statutory Reporting 2020-IA-A Certified Budget—Disbursements during the year ended June 30, 2020 did not exceed the budget by function. 2020-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. 2020-IA-C Travel Expense—No expenditures of City money for travel expenses of spouses of City officials or employees were noted. 2020-IA-D Business Transactions—Business transactions between the City and City officials or employees are detailed as follows: Name,Title, and Transaction Business Connection Description Amount Riley Fairchild, City employee, spouse is Services $ 18,950 owner of Fairchild Business Coaching Mike Kerth, City employee, spouse is Supplies 14,100 co-owner of Steve's Ace Hardware Gina Hodgson, City employee, Crop Cover 1,635 spouse is Bob Hodgson Paula Cook, City employee, spouse is Services 483 owner of JASC Property LLC. Douglas Merke, City employee, Services 450 spouse is owner of River Valley Veterinary Services John Hefel, City employee, Services 318 spouse is owner of A Frame of Mind Framing &Gallery In accordance with Chapter 362.5(3)(j) of the Code of lowa,the transaction with Gina Hodgson, Paula Cook, Douglas Merke, and John Hefel do not appear to represent conflict of interest since the total transaction was less than $6,000 during the fiscal year.The transactions with Riley Fairchild and Mike Kerth may represent conflicts of interest since they were not entered into through competitive bidding in accordance with Chapter 362.5(3)(d) of the Code of lowa. 2020-IA-E Restricted Donor Activity—No transactions were noted between the City, City officials, City employees, and restricted donors in compliance with Chapter 68B of the Code of lowa. 201 City of Dubuque, lowa Schedule of Findings and Questioned Costs Year Ended June 30, 2020 Part IV: Other Findings Related to Required Statutory Reporting(continued) 2020-IA-F 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. 2020-IA-G Council Minutes—No transactions were found that we believe should have been approved in the Council minutes but were not. 2020-IA-H Deposits and Investments—No instances of non-compliance with the deposit and investment provisions of Chapters 12B and 12C of the Code of lowa and the City's investment policy were noted. 2020-IA-I 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. 2020-IA-J Annual Urban Renewal Report—The annual urban renewal report was properly approved and certified to the lowa Department of Management on or before December 1. However, we noted instances in which TIF debt balances did not reconcile with City records. Recommendation—The City should implement additional preparation and review procedures relating to the Annual Urban Renewal Report. Response—We agree with the auditor's comments. The following action will be taken to improve the situation.The annual TIF Debt Certification to the County and the Annual Urban Renewal Report will be prepared at the same time. A reconciliation will be done between both reports prior to submittal. 2020-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 lowa by the Dubuque Metropolitan Area Solid Waste Agency, a component unit of the City, were noted. 2020-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 lowa Administrative Code. 2020-IA-M Public Improvement Projects—During our audit, we noted one project in which the City published a notice of public hearing 24 days before the date of the public hearing.To be in accordance with Chapter 26.12 and Chapter 362.3 of the Code of lowa, a notice of public hearing must be published for public improvement projects between 4-20 days before the public hearing date. Recommendation—The City should ensure all notices are published in accordance with Chapter 26.12 and Chapter 362.3 of the Code of lowa. 202 City of Dubuque, lowa Schedule of Findings and Questioned Costs Year Ended June 30, 2020 Part IV: Other Findings Related to Required Statutory Reporting(continued) Response—We agree with the auditor's comments. The following action will be taken to improve the situation. The notice for the Jackson Street Construction Project should have been split into two separate notices: Notice of Hearing and the Notice to Property Owners. A notice to property owners has a different timeline and publication requirement than a Notice of Hearing. In the future, notices for construction projects will be reviewed to ensure that publication requirements are met. 203 THIS PAGE IS INTENTIONALLY LEFT BLANK 204 EideBailly CPAs&BUSINESS ADVISORS January 15, 2021 To the Honorable Mayor and Members of the City Council City of Dubuque, lowa We have audited the financial statements of the City of Dubuque, lowa (City) as of and for the year ended June 30, 2020, and have issued our report thereon dated January 15, 2021. We did not audit the financial statements of Dubuque Initiatives 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 relating to our audit. The financial statements of Dubuque Initiatives and Subsidiaries and Dubuque Convention and Visitors Bureau, discretely presented component units, were not audited in accordance with Government Auditing Standards, and accordingly,this report does not extend to those financial statements. Our Responsibility in Relation to the Financial Statement Audit under Generally Accepted Auditing Standards and GovernmentAuditing Standards and our Compliance Audit under the Uniform Guidance As communicated in our letter dated June 10, 2020, our responsibility, as described by professional standards, is to form 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 for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. Whnt inspires you,inspires us. eidebailly.com 1 1545 Associates Dr.,Ste. 101 Dubuque,IA 52002-2299 T 563.556.1790 F 563.557.7842 EOE 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. 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 GovernmentAuditing Standards dated January 15, 2021. 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 Uniform Guidance dated January 15, 2021. Planned Scope and Timing of the 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 firm, as appropriate, our firm, and other firms utilized in the engagement, if applicable, have complied with all relevant ethical requirements regarding independence. Qualitative Aspects of the Entity's Significant Accounting Practices SignificantAccounting Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements.There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during year ended June 30, 2020. 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. 2 SignificantAccounting Estimates 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 management's current judgments. The most sensitive accounting estimates affecting 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 determining that they are reasonable in relation to the financial statements taken as a whole. Management's estimate of total OPEB liability, related deferred outflows of resources and deferred inflows of resources, and OPEB expense are based on a calculation of actuarially determined 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. Management's 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 determining 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 identified 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. 3 The following misstatements, some 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) Governmental/ Fund Business-type Governmental Activities To increase capital assets $ - $ 228,311 To decrease capital assets - (1,703,455) General Fund To reduce accounts payable (material misstatement) 729,517 729,517 To increase accounts receivable 226,251 263,455 To reduce accounts receivable (151,338) (151,338) To increase unavailable revenue (92,507) - Airport Fund To increase grant receivable - 228,311 To increase accounts payable (228,311) (228,311) General Construction Fund To increase notes receivable 50,000 50,000 The adjustments above also resulted in a $228,311 increase in program expenditures within the Schedule of Expenditures of Federal Awards (material misstatement). Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the financial statements or the auditor's report. No such disagreements arose during the course of the audit. Representations Requested from Management We have requested certain written representations from management that are included in the management representation letter dated January 15, 2021. Management's Consultations with Other Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge,there were no consultations with other accountants regarding auditing and accounting matters. 4 Other Significant Matters, Findings,or Issues In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, business conditions affecting the entity, and business plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City's auditors. This report is intended solely for the information and use of the Mayor, City Council, and management of the City of Dubuque, lowa, and is not intended to be and should not be used by anyone other than these specified parties. Sincerely, EIDE BAILLY LLP �' .� � � � Dubuque, lowa 5 _ _ ,..:K.;�y;.:. � , �_ '' �_— — ' � - � - - I-- �� . � `'u";,i'� ir '�.. �-' �� 6� � w� . � � � • � �"'� '," ^''�"" : ' "t�,,F y s ��L�,x , ...... �. '� , R %�'�'_�,w:..� ' r't+�- �r'��'r �? ti w Y '_ �,. :� �y.,a"-s �� t)�� r `" �y, x:-,'"k�e' q��i:,, .� 'i"'' . ,�tm �'� - '"� �x�}.� '�4 '' [�� T� � t � ��ortpPYiOr� I - - ..�Iy1T ��.` A •A '�t.1.:"�-�1�'�� n' 'y �y7_ �t Tl-`_� �I � �,• 7RAIWNGCk1� - - . � ae � �; �,�Y L ,�,� - °�` z:� �.� .�'.:, � ';cr '. kry�"� � �+v/ _ , �. —�. J_ t y _ ' � --- w7,�,r,f.i�0-y�,i;�' .^,�� ,��,� � � '�' µ ,�4,�' * S- �- � + . �� _ , s��4�ry.. �7. y�i��i.�. e�_ ..-+��;i W :'"� , - � -�--� �I � . �.'� . . . .. r e . . � .,_ , - ,. 'c, . . � , .. .. � r�I .t .. '-.'�., . ."R. _ � , . . . • I _��' y�� . . _. � . i r' w. tiy� ,'� ��'�" � ` ,+,�;�, - ,.',I „i � � y ' �}v � ,�, �4`*1;5 ,y?IK�� •A��k' � •�jt - - '_ L x� .. . L w - ��' ` & �..�F � i� 8 ' F �� " �� . !, ' n7 � ! . . . -.. +b�. �i.'„ �,�} :,,. �t�� .�,� �a'�'j , '�l , _ ._ . v:. i s�,M�..y� • 3 ,' .,ttw �• .•ryt � �� y ,I� � _- � - �„ ' � .. J r.�y�^�'.'� �;. y .�..yh V�� f, � '��,." . �� +y ' � .. `� �• /� � !�";�°��r�'j {'�' f'7�� ' ��Y� ' ., .yf. � a . � 1 ` l+'� . ��.� : i. �. � . . ��9i�� '' ��s.�._._ .�.'Ew.�,_�.tt� ��.riajn��s..i� . rJi . � . a� 1 � .�..�..'_: ''�-_ __ _ ...� iY...LHQA��rn�.•. AUDIT PRESENTATION TO THE CITY COUNCIL FOR YEAR ENDED JUNE 30, 2020 . ,. \ � \ �� , r� �-� '� . � I1 � � .,. � �.=�' �� i� � �� ; � �� - " I M� :�, � , � 1 � � � � �• ; ' �'. " ' Y� 'u' � 1 1 � } �` ' -�� I I � _�r�. � � � i�f�`_.�' �'� � �, r' .� � 1 ..� -� _ ��jF� �'� � � �, /",( _ �` !` . , T ��,� ` ,.�'� � i i i.;I,' - r ^ —� ; � I ! `� I � --- �4 _ _.-�. rl ,�-/-'„ � �'; �@• \ 1�• 1 �y� �— ' � � F P � l � i 'W'n." �N"y � � iGY'� � of IE" i .`.. �� h �, 13 � ! `�� ~ f~ � �; ' \ \ � � l ,� 1 , �I�� -� � -_ 1' 'l� 11 4 ui � ,� �� A11111 i� . -1 I 1 '�G', IIr } ' 1 � � � . - �f . I ..1 _ y i -�i _ - � � " iR� � ��-i i:�u .i_ �� , r . i {� ,i .�f'" .-I: �i m �_ _ , � �, , r �� _ �� ;� . � �"_ � i � �'�' � �� .. , �i�;J�,�� __ , r ' — � � � ��i�� , i� ` ._�— F I S CA L Y EA R 2020 C E RT I F I E D A N N U A L EideBaill �� v FI NANCIAL REPORT • Financial audit performed annually • Required by the Municipal Oversight Law and governmental auditing standards • Examination of City's financial records • Conducted in accordance with generally accepted auditing standards • Report rendered by an independent auditor of how appropriately financial statements depict its financial condition and results of its operations • Performed by persons not in any way affiliated with the City in order to ensure complete objectivity and professionalism 0 TYPES OF I N DEPEN DENT AU DITOR'S EideBaill � v OPINIONS Unmodified Opinion—The statements present fairly the financial position and results of operations of the government unit on a basis consistent with prior years. This is the so called "clean opinion" Modified Opinion—The opinion is like the above but with certain exceptions to generally accepted accounting principles which are clearly explained in the opinion. Adverse Opinion—This "bad opinion" states that the financial statements do not fairly present the financial position and the results of operation of the governmental unit. The opinion would include the reasons for the adverse opinion. Disclaimer of Opinion—The auditor cannot render an opinion usually because the financial records are incomplete or the scope of the audit is too restrictive. 4 M P L I A N E A D I T EideBailly C� C U Auditors perform compliance audits in which the auditor reviews operations in terms of compliance with various laws and regulations regarding grants and financial operations. Compliance audits have always been a vital part of governmental audits. 0 B E N E F I T F A N A D I T EideBailly S � U • The audit provides a professional opinion of the financial condition of the government unit. • Audited financial statements provide reliable financial information to evaluate the financial health and stability of the governmental unit. • Recommendations to strengthen and improve the management and efficiency of the governmental unit. • Ensure that the local government is in compliance with all applicable legal provisions. 4 A U D I T R E S U LT S 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. • Financial Statements are materially accurate • No disagreements with auditors • All proposed audit adjustments were made 0 G OV E R N M E N T- ..:_ :. �:.E i � - 'r ,�� .; �, � f� a n�.`�' � sf��T �3 �r i r3r - .J�:a".`~ �� y,��1.�- ,',r �� ti.f s � _ ; �l �,� € i' . .. rf .Y e✓ • �- - ��fi ,#�, r.2 .� , - � , �,� �'� �� I �0.J F .� . ',�Y ,4� ��' . WI D E S U M MARY _�� :.�} .} �. �_ �� = f ��# �� `. + Y � � t�' � +� 1:_ ._ II'� �,� `. T ��'�s_�� . �� 4�1�4+ r� � .. r l,��._ � �� ,�j- ��t�`� - � � ~� � � _ ,_.., .Yh ".� lr��; j ' -� ' _. ��_.. .� �Sf '!� � sp. �� ... �� '_ � . � ,q� \� r: -e• �'' .-.a_ �' J/,� � _ � �� .. �� `�.I�. � ■��• �J�{ �F�' �"�{�� ! � !I 1 � � -b ,`�. �]►��tl' I :� .' . • Governmental activities increased the City s net ��x�� - p��,�-�� .s �. 4�'.L 4 A�- '. position by $1.2M. �� - '��- �:,� - -h _ _ ,_�" _ k �,.� - _ , .., �' � -�,� ��. - i�i�� i I�I 1 �.r�'1��- ; -�.- � �'� *ti � :.AI � ' 1�1 /A� .� . ��.N��' 1�-• 1; + � � �j �: -�,:��i � s ,A :-i � . �� _, ' _ � � � " �' � :, ' • � i ' i/ � � i � �s ) _ __, -- - - • Operating and capital grants and contributions `�} � �� - �� , ;a ► , , � - � - �� p� ,` � f � � � �' , ��_� 111 decreased by $4.3M � y�,� , ��; , � s :► �• ; fi� � - 11 ff 4 �j . � .��.�' I�M 1.�' � �• "� `{��Y �'�� Y � -��I�- � 1�_L� . - �l1 j�.. • �� ' �� I I I... ��y •.T�" - � � . E ... I Y .... � .. ' I' •1' i . � � ,/ �.. �i�� .�F� , �� "1"'� 11 Overall revenues decreased b $3.8M, while �-.�_ ..�� s--� -� �� a f� � _ Y «�'- �.��.t - � �� - - - �� expenditures increased by $5.6M (excluding k .nYn� ::� ` � A � ��- `� ' transfers out to business type activities) � _-.�..�. . _ .. . � .�. r � �;-� T�_ , 7 �. � , . Y �� •1 3 � i '�-_ L . ._ , `�� 'r%��.s� L,•� ''y' 'f ��iy �: 5�� f yI[;� #T��'� �� L� � . f � f ' �Y {�y�� J!� �. L•J_��yyti�� f1r•�� T {� ' ` ?�.7: -+'4��+- ��'�'` '�• �•`•+'�K.. � +''�. � � • r r - � + �,�� .��:� . �� '� � ,y � �� Y 5��_• � � 14� '�iF+/ �T _ � y µA-#��'+� �"i '� L' +�LM1 �,�`** � �-+��"�'� ��'� �' }�� { , +� ''� G O V E R N M E N T ��i��- -, - �� - � �'+�_� - �� _ ��*rt •fi�� _+-•�7` � �� ,� � `�` � f •�� ti .F _ 1�f tly.. �� l� .M1 �. � '�,--� e��+�� t. �i' �'t?�`��1i±'ti'"�,��— . i d . � �'` y. ��+ � � �" �' . � --� . rt ' �- _ - - ��r rLr�-�* �F -i r'._. *y'. ..�,� �f, �+ �� . 5 r �'� '1 '��. " �. M1�'•�F4��.�� {�r�* .� 'I � ,�r. h{. ' � . W I D E S U M M A RY .�_{r=:��_ =.�::�.:�� - .� . �� .��- - � � •r.:. r � • r � f � # �' �•. _�4� �' '�'+ - �r� �.`'' �+ � �� ` � �i�"�' •14 �'� i �S��.i' � �T.,�:...� '�,��' � , , - r �L}�L,r{�A�� .+ ' , � ��Y�� r ��ii� � � 1 _ r �•' l.. i 5�. •�i�p�� i � `�' } L■ : •iii� T L R#J 3� �1• �� y. i r. -��4 � i + � '��Iv v � ' ,,� � _ ' - �i , y - ,� y}' � w'y+4 � • Business-type activities increased the City's net ��.� �� '. ��t��'• � � r position by $17.1M � �: � '` �h� -. � - �:� �.x;�=•, . ';�:ti _ _ �`� �� t- - 4.` " - � ��# f�� - �� ,r - �� `� - ,,,� ��'. � ., . • Charges for services increased by $193k. � z - .,��,� ��• .. ti� � � � "�y � � � .r .•�,.�-+ � 1� vti.' � - �7 =��' � � ' �� .. • Total expenses decreased by $765k. ��{ � } � � `� • � . � � � �;, �� ._ _.� . � .µ.:� b _,�� , ' + _ - ' : � � � Se . J � F ` Y l • Operating and capital grants and contributions `�-��`� � , . �. , *' , ,� � � # saw an increase of $1.2M. � �-� � - � 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, 12% Forfeitures, & Other, 6% Charges for Services, 18% � Intergovernmental, 3% �axes,59% � Licenses & Permits, 2% O TAX REVEN U E $35,405 $ 34,821 3 YEAR H I STO RY $ 33,558 40,000 35,000 �/ 30,000 N � � 25,000 C6 N � � 20,000 � � 15,000 10,000 5,000 2020 2019 2018 2020 2019 2018 ■Property Tax $22,633 $22,288 $21,244 Franchise Fee $4,976 $5,072 $4,833 Local Option Sales Tax $4,826 $4,470 $4,305 Hotel/Motel $2,118 $2,113 $2,286 Backfill $831 $851 $844 Pari-Mutuel $21 $27 $36 � GENERAL FUND REVENUE 3YEAR HISTORY S�o,000 $61,805 $60,108 $57,685 j�. 560,000 $so,000 � � 0 0 � 540,000 .� i � L cv p S3o,000 � $zo,000 � S1o,000 � �''. S- — 2020 2019 2018 Taxes $ 35,405 $ 34,821 $ 33,558 Licenses& Permits $ 1,497 $ 1,620 $ 1,642 Intergovernmental $ 1,886 $ 1,783 $ 1,204 Charges for Services $ 10,586 $ 12,216 $ 11,310 Interest, Fines & Forfeitures, & Other $ 3,341 $ 2,656 $ 1,909 Gaming $ 7,394 $ 8,709 $ 8,062 � GENERAL FUND EX P E N D I T U R E S Debt Service, o� General Government, �Capital Projects, 1% Community & 11%� Economic � Public Safety, 49% Development, 7% � Culture & Recreatio 21% Health & Social Services, 2% � Public Works, 9% � GENERAL FUND EXPENDITURES THREEYEAR HISTORY $60,501 $59,399 � $57,584 $�o,000 � $60,000 $50,000 $40,000 N = O $30,000 � � .� $20,000 N i � $10,000 O � $0 2020 2019 2018 ■Public Safety ■Public Works ■Health&Social Services Culture&Recreation ■Community&Economic Development ■General Government ■Debt Service ■Capital Projects 2020 2019 2018 Public Safety $29,515 $28,802 $28,569 Public Works $5,511 $6,323 $5,751 Health &Social Services $992 $1,036 $844 Culture & Recreation $12,967 $12,749 $12,482 Community& Economic Development $4,028 $3,979 $3,736 General Government $6,846 $6,011 $6,202 Debt Service $45 $98 $0 � Capital Projects $597 $401 $0 COMPARISON OF GENERAL FUND BALANCES � � � 0 0 0 � � � � 0 0 � ., , � 2020-33.27% 2019-33.21% 2018-26.38% ■Annual Expenditures* Unassigned Fund Balance *Annual expenditure figure exclude transfers to other funds � N ET I NVESTM ENT I N CAPITAL ASSETS 400,000 �� . �. 350,000 p 300,000 O O •� 250,000 N L � Q 2�� 150,000 .: 1. 100,000 50,000 2020 2019 2018 ■Governmental Activities ■Business-Type activites � UNFUNDED LEGACY COSTS 60,000 50,000 � . � � � 40,000 N � � 30,000 0 c N L f6 O 0 20,000 10,000 5,883 6,121 6,016 0 2020 2019 2018 ■ Retiree Healthcare (OPEB) Liability ■ Pension Liability (IPERS/MFPRSI) ' • . • . • • • • • . . • • ' • • . • • ' • ' . • • • . � A U D I T R E S U LT S 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. • Financial Statements are materially accurate • No disagreements with auditors • All proposed audit adjustments were made • Audit performed yearly • Audit required by lowa State Code � COMPLIANCE AUDIT RESULTS EideBailly • 3 level of audit deficiencies • Material weakness — highest level, material adjustments identified • Significant deficiency — does not rise to material level but still something those charged with governance should be aware of • Control deficiency — lowest level, compensating controls in place to mitigate likelihood of a material misstatement • Previous audit results • 2019 — unmodified • 1 material weakness over financial reporting • 3 material weaknesses and 1 significant deficiency over federal awards • 2018 — unmodified, no material weaknesses or significant deficiencies • 2017 — unmodified • 1 material weakness over financial reporting • 3 significant deficiencies over federal awards � COMPLIANCE AUDIT RESULTS EideBailly • Report on Internal Control Over Financial Reporting and on � , Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards • No significant deficiencies or material noncompliance were identified • Material weakness — Material audit adjustments over balance sheet and schedule of federal awards • Caused by lack of internal controls due to this being the first year the consolidated Budget and Finance departments completed all audit workpapers and there was significant staff turnover over the past 12 months • Accruals are manually calculated • CAFR internally with no help from outside consultants � C H A N G E S M A D E EideBaill �� v • New Assistant Director of Finance hired with significant government accounting experience on 4/1/20 • In the process of implementing a new Enterprise Resource Planning ( ERP) System • We are in the contract negotiation phase of this process • $2.4 million budgeted between FY21 and FY22 • A new ERP system will allow us to have better management and controls over accounts payable, grants, accounts receivable, unearned revenue, and assets. Our current ERP system lacks this functionality and procedures related to these areas are all manual and compiled by reviewing invoices and receipts and compiling the information into spreadsheets. � COMPLIANCE AUDIT RESULTS EideBaill �� v • Auditors' Opinion on compliance for major programs • Unmodified for all major federal programs • 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 • Nofindings • In 2019 there were 3 material weaknesses and 1 significant deficiency identified and all were remediated in 2020 • Due to material weakness identified, the City will be a high-risk auditee for the next 2 years • Auditors will have to perform additional testing due to this • Granting agencies may ask for additional information regarding this � ,�--. �,., �' ,fi. � � .4. 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