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Advertisement for the Sale of Bonds_Series 2009A, 2009B, and 2009CFROiVI: Michael C. Van Milligen, City Manager SUBJECT': Proceedings to Direct Advertisement for Sale, Approve Electronic Bidding Procedures and Authorize a Preliminary Official Statement to be Completed and Distributed for $2,935,000 General Obligation Bonds, Series 2009A, $11,175,000 General Obligation Urban Renewal Bonds, Series 20096 and $9,500,000 General Obligation Refunding Bonds, Series 2009C ®ATE: September 17, 2009 Finance Director Ken TeKippe is recommending the advertisement for sale of the $2,935,000 General Obligation Bonds Series 2009A, $11,175,000 General Obligation Urban Renewal Bonds, Series 20096 and $9,500,000 General Obligation Refunding Bonds, Series 2009C, approve electronic bidding procedures and the form of notice of sale, and authorize a preliminary official statement to be completed and distributed in connection with the offering of the bonds for sale. I concur with the recommendation and respectfully request Mayor and City Council approval. 4- -~. ~.... Michael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Kenneth J. TeKippe, Finance Director TO: Michael C. Van Milligen, City Manager FRO(~i: Kenneth J, TeKippe, Finance Director ~f ry ~` " _ ~` SUEJECT: Proceedings to Direct Advertisement for Sale, Approve Electronic Bidding Procedures and Authorize a Preliminary Official Statement to be Completed and Distributed for $2,935,000 General Obligation Bonds, Series 2009A, $11,175,000 General Obligation Urban Renewal Bonds, Series 20096 and $9,500,000 General Obligation Refunding Bonds, Series 2009C DATE: September 14, 2009 The purpose of this memorandum is to recommend the advertisement for the sale of the $2,935,000 General Obligation Bonds, Series 2009A, $11,175,000 General Obligation Urban Renewal Bonds, Series 20098 and $9,500,000 General Obligation Refunding Bonds, Series 2009C, approve electronic bidding procedures and the form of notice of sale, and authorize a preliminary Official Statement to be completed and distributed in connection with the offering of the Bonds for sale. The Series 2009A bonds will provide funds to pay costs of the acquisition of sewer pipeline inspection equipment; the inspection and certification of the flood control levee system; the construction and installation of storm water management facilities, including the Bee Branch Creek Restoration Project, and the reconstruction of storm sewers; the acquisition and replacement of street lights; the acquisition and installation of fiber optic conduit in connection with street improvements and water main extensions; the repair and improvement of the Dubuque Regional Airport, including hanger heater and terminal boiler replacements, runway and hanger painting, hanger repairs and replacements and parking area paving; the acquisition and replacement of Fire Department ladder and pumper trucks and ambulances; and water utility improvements including the construction and installation of water main extensions, ADA improvements, back-up power supply and water consumption studies and engineering. Although we are selling General Obligation Bonds to support the projects, repayment of the debt will be from fees, taxes and a debt service levy. The Series 20096 bonds will provide funds to pay costs of certain urban renewal project activities under the authority of Chapter 403 of the Code of Iowa and the Amended and Restated Urban Renewal Plans for the Greater Downtown Urban Renewal District and the Dubuque Industrial Center West Economic Development District, including those costs associated with the construction of a multi-story public parking ramp located at 5th and Bluff Streets, and the construction of street, sewer, sidewalk, trail and other public infrastructure improvements within Dubuque Industrial Center West. Although we are selling General Obligation Bonds to support the projects, repayment of the debt will be from parking revenue and tax increment revenues of the Greater Downtown Urban Renewal District and Dubuque Industrial Center West District. The Series 2009C bonds will be used to provide funds to pay costs of refunding and refinancing of certain City indebtedness, including the General Obligation Bonds, Series 2001, dated December 15, 2001, and the General Obligation Bonds, Series 2002, dated December 15, 2001 (America's River Project Bond Issue). The refunding is estimated to save the City $60,000 of interest expense annually. The bond sale will be held on October 5, 2009. A letter from attorney William Noth detailing information on the bond advertisement is enclosed. A draft copy of the preliminary Official Statement prepared by Public Financial Management and City staff is enclosed. Careful review of the draft Official Statement by appropriate City staff and members of the City Council is an important step in the offering of the Bonds for sale to the public. The U.S. Securities and Exchange Commission (the "Commission") has stated that "issuers are primarily responsible for the content of their disclosure documents and may be held liable under the federal securities laws for misleading disclosure." In several recent enforcement proceedings, the Commission has made clear that it expects public officials to generally review disclosure documents in light of their unique knowledge and perspectives on the issuer and its financial circumstances. Rule 15c2-12 of the Commission requires prospective purchasers of the Bonds to obtain and review an official statement that has been "deemed final" by the City prior to submitting a bid to purchase the Bonds. For this purpose, the official statement may omit certain information that is dependent upon the pricing of the issue (such as interest rates, bond maturities and redemption features), but should otherwise be accurate and complete. The requested action step for City Council is to adopt the attached resolution to cover the advertisement for sale of the above bonds, approve electronic bidding procedures, and authorize a preliminary Official Statement to be completed and distributed in connection with the offering of the Bonds for sale. I<JT/jmg Enclosures cc: Barry Lindahl, City Attorney Jenny Larson, Budget Director Jeanne Schneider, City Clerk AHLR~ ~®NY, . 100 COURT AVENUE, SUITE 600 DES MOINES. IOWA 50309-2231 PHONE: 515-243-7611 FAX: 515-243-2149 W W W.AHLERSLAW.COM WILLIAM J. NOTH wnoth®ahlerslaw.com September 15, 2009 BY FEDERAL EXPRESS Mr. Ken TeKippe Finance Officer City of Dubuque 50 West 13th Street Dubuque, Iowa 52001-4864 Direct Dial: (515)246-0332 RE: $2,935,000 General Obligation Bonds, Series 2009A $11,175,000 General Obligation Urban Renewal Bonds, Series 2009B $9,500,000 General Obligation Refunding Bonds, Series 2009C Dear Mr. TeKippe: With this letter I am enclosing suggested proceedings to direct the advertisement of the above Bonds for sale, and to approve the form of Notice of Bond Sale. Under the schedule proposed, these proceedings should be considered immediately following the public hearings and adoption of the three (3) resolutions taking additional action. The Notice of Bond Sale assumes that the sale will be set for 11:00 A.M. on October 5, 2009. The Notice also assumes that the Council will meet at 6:30 P.M. on October 5, 2009 to award the Bonds to the best bidders. If any of those details need to be revised, please let me know. The procedure assumes that your financial consultant has recommended to the Council that electronic bidding procedures be utilized for this bond sale. Based upon this recommendation, the Iowa Code requires that the Council snake a finding that the recommended procedure will provide reasonable security and maintain the integrity of the competitive bidding process and facilitate the delivery of bids by interested parties under the circumstances of the particular sale. The proceedings enclosed are prepared on the basis that the Council will agree with the recommendation and snake the necessary findings. WISHARD & GAILY - 1668: GUERNSEY Sc GAILY -1893; GAILY & STIPP - 1901; STIPP, PERRY. BANNISTER & STARZINGER - 191 G; BANNISTER, CARPENTER. AHLERS & GOONEY- 1950: AHLERS, GOONEY. DORWEILER, ALLBEE, HAYNIE & SMITH - 1974; AHLERS, GOONEY, DORWEILER, HAYNIE. SMITH 8 ALLBEE. P.C. - 1990 September 15, 2009 Page 2 The Notice of Bond Sale must be published at least one time. The sale may be held at any time, but not less than four days following the date of the last publication. An extra copy of the notice is enclosed for use by the newspaper. The resolution also authorizes a preliminary Official Statement to be completed and distributed in connection with the offering of the Bonds for sale. A draft copy of the preliminary Official Statement will be delivered to you separately by Public Financial Management, and should be forwarded to the City Council with the enclosed proceedings. Careful review of the draft Official Statement by appropriate City staff and members of the City Council is an important step in the offering of the Bonds for sale to the public. The U.S. Securities and Exchange Commission (the "Commission") has stated that "issuers are primarily responsible for the content of their disclosure documents r` and maybe held liable under the federal securities laws for misleading disclosure." In several recent enforcement proceedings, the Commission has made clear that it expects public officials to generally review disclosure documents in light of their unique knowledge and perspectives on the issuer and its financial circumstances. As you know, Rule 15c2-12 of the Commission requires prospective purchasers of the Bonds to obtain and review an official statement that has been"deemed final" by the City prior to submitting a bid to purchase the Bonds. For this purpose, the official statement may omit certain information that is dependent upon the pricing of the issue (such as interest rates, bond maturities and redemption features), but should otherwise be accurate and complete. The enclosed resolution authorizes you to complete the draft document, and thereafter authorizes its distribution in connection with the offering of the Bonds to the public. As always, extra copies of the proceedings are enclosed to be completed as the original and returned to us for our transcript of the action taken, along with a copy of the publisher's affidavit covering publication of the Notice of Bond Sale. September 15, 2009 Page 3 If any questions arise, please keep me advised. VAery truly yours, vti William J. Noth WJN:dc encl. cc: Jenny Larson (w/encl.) Barry Lindahl (w/encl.) Tionna Pooler (w/encl.) DCORNELU 630463.1 /MSWord\10422.092 (This Notice to be posted) NOTICE AND CALL OF PUBLIC MEETING Governmental Body: The City Council of Dubuque, Iowa. Date of Meeting: , 2009. Time of Meeting: o'cioclc _.M. Place of Meeting: Historic Federal Building, 350 West 6th Street, Dubuque, Iowa. PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental body will meet at the date, time and place above set out. The tentative agenda for said meeting is as follows: $2,935,000 General Obligation Bonds, Series 2009A $11,175,000 General Obligation Urban Renewal Bonds, Series 2009B $9,500,000 General Obligation Refunding Bonds, Series 2009C X Resolution directing the advertisement of Bonds for sale and approving electronic bidding procedures Such additional matters as are set forth on the additional hereto. page(s) attached (number) This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of Iowa, and the local rules of said governmental body. City Clerk, Dubuque, Iowa -1- 2009 The City Council of Dubuque, Iowa, met in Federal Building, 350 West 6th Street, Dubuque, Iowa, at above date. There were present Mayor following named Council Members: _ session, in the Historic _ o'clock _.M., on the in the chair, and the Absent: ~******~ -2- Council Member Lynch introduced the following Resolution entitled "RESOLUTION DIRECTING THE ADVERTISEMENT FOR SALE OF $2,935,000 GENERAL OBLIGATION BONDS, SERIES 2009A, $11,175,000 GENERAL OBLIGATION URBAN RENEWAL BONDS, SERIES 20096 AND $9,500,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 20090, AND APPROVING ELECTRONIC BIDDING PROCEDURES" and moved its adoption. Council Member Braig seconded the Resolution to adopt. The roll was called and the vote was, AYES: Braig, Connors, Jones, Lynch, Resnick, Voetberg NAYS: None Whereupon, the Mayor declared the resolution duly adopted as follows: RESOLUTION NO. 371-09 RESOLUTION DIRECTING THE ADVERTISEMENT FOR SALE OF $2,935,000 GENERAL OBLIGATION BONDS, SERIES 2009A, $11,175,000 GENERAL OBLIGATION URBAN RENEWAL BONDS, SERIES 20096 AND $9,500,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 20090, AND APPROVING ELECTRONIC BIDDING PROCEDURES WHEREAS, the City of Dubuque, Iowa (the "City") is in need of funds to pay costs of the acquisition of sewer pipeline inspection equipment; the inspection and certification of the flood control levee system; the construction and installation of storm water management facilities, including the Bee Branch Creek Restoration Project, and the reconstruction of storm sewers; the acquisition and replacement of street lights; the acquisition and installation of fiber optic conduit in connection with street improvements and watermain extensions; the repair and improvement of the Dubuque Regional Airport, including hanger heater and terminal boiler replacements, runway and hanger painting, hanger repairs and replacements and parking area paving; the acquisition and replacement of Fire Department ladder and pumper trucks and ambulances; and water utility improvements including the construction and installation of watermain extensions, ADA improvements, back-up power supply and water consumption studies and engineering, essential corporate purpose projects, and it is deemed necessary and advisable that the City issue general obligation bonds for said purpose in the amount of not to exceed $3,000,000 as authorized by Section 384.25 of the City Code of Iowa; and WHEREAS, pursuant to notice published as required by Section 384.25 this Council has held a public meeting and hearing upon the proposal to institute proceedings for the issuance of the above described Bonds, and all objections, if any, to -3- proceedings for the issuance of the above described Bonds, and all objections, if any, to such Council action made by any resident or property owner of said City were received and considered by the Council; and it is the decision of the Council that additional action be taken for the issuance of said Bonds, and that such action is considered to be in the best interests of said City and the residents thereof; and WHEREAS, the City also is in need of funds to pay costs of aiding in the planning, undertaking and carrying out of urban renewal project activities under the authority of Chapter 403 of the Code of Iowa and the Amended and Restated Urban Renewal Plans for the Greater Downtown Urban Renewal District and the Dubuque Industrial Center West Economic Development District, including those costs associated with~the construction of a multi-story public parking ramp located at 5th and Bluff Streets, and the construction of street, sewer, sidewalk, trail and other public infrastructure improvements within Dubuque Industrial Center West, and it is deemed necessary and advisable that the City issue general obligation urban renewal bonds for said purpose to the amount of not to exceed $13,500,000 as authorized by Sections 403.12 and 384.24(3)(q) of the Code of Iowa; and WHEREAS, pursuant to notice published as required by Sections 403.12 and 384.24(3)(q) this Council has held a public meeting and hearing upon~the proposal to institute proceedings for the issuance of the above described Bonds, and no petitions were filed calling for an election thereon and all objections, if any, to such Council action made by any resident or property owner of said City were received and considered by the Council; and it is the decision of the Council that additional action be taken for the issuance of said Bonds, and that such action is considered to be in the best interests of said City and the residents thereof; and WHEREAS, the City also is in need of funds to pay costs of refunding and refinancing of cei~fain City indebtedness, including the General Obligation Bonds, Series 2001, dated December 15, 2001, and the General Obligation Bonds, Series 2002, dated December 15, 2001, an essential corporate purpose project, and it is deemed necessary and advisable that the City issue general obligation bonds for said purpose in the amount of not to exceed $9,500,000 as authorized by Section 384.25 of the City Code of Iowa; and WHEREAS, pursuant to notice published as required by Section 384.25 this Council has held a public meeting and hearing upon the proposal to institute proceedings for the issuance of the above described Bonds, and all objections, if any, to such Council action made by any resident or property owner of said City were received and considered by the Council; and it is the decision of the Council that additional action be taken for the issuance of said Bonds, and that such action is considered to be in the best interests of said City and the residents thereof; and -4- WHEREAS, pursuant to Section 384.28 of the Code of Iowa, it is appropriate to offer the foregoing Bonds for sale in three separate series, in the aggregate principal amounts as hereinafter described; and WHEREAS, a preliminary form of Official Statement has been prepared for the purpose of offering the Bonds for sale to the public; and WHEREAS, it is appropriate that the form of the preliminary Official Statement be approved and deemed final and, upon completion of the same, that the preliminary Official Statement be used in connection with the offering of the Bonds for sale to the public; and WHEREAS, the Council has received information from its Financial Consultant recommending that sealed and electronic facsimile and internet bidding be authorized for the sale of the Bonds, and that such procedures will maintain the integrity and security of the competitive bidding process and facilitate the delivery of bids by interested parties; and WHEREAS, the Council deems it in the best interests of the City and the residents thereof to receive bids to purchase such Bonds by means of sealed and electronic facsimile and internet communication. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the receipt of electronic bids by facsimile machine and through the PARITY© competitive bidding system described in the Notice of Sale are hereby found and determined to provide reasonable security and to maintain the integrity of the competitive bidding process, and to facilitate the delivery of bids by interested parties in connection with the offering of the Bonds hereinafter described at public sale. Section 2. That the preliminary Official Statement in the form presented to this meeting be and the same hereby is approved as to form and deemed final for purposes of Rule 15c2-12 of the Securities and Exchange Commission, subject to such revisions, corrections or modifications as the Finance Director, upon the advice of bond counsel and the City's financial consultant, shall determine to be appropriate, and is authorized to be distributed thereafter in connection with the offering of the Bonds for sale. -5- Section 3. That the City Clerk be and is hereby authorized and directed to publish notice of sale of said Bonds at least once, the last one of which shall be not less than four clear days nor more than twenty days before the date of the sale. Publication shall be made in the Telegraph Herald, a legal newspaper, printed wholly in the English language, published within the county in which the Bonds are to be offered for sale or an adjacent county. Said notice is given pursuant to Chapter 75 of the Code of Iowa, and shall state that this Council, on the 5th day of October, 2009, at 6:30 o'clock P.M., will hold a meeting to receive and act upon bids for said Bonds; said notice to be in substantially the following form: -6- NOTICE OF BOND SALE Time and Place of Sealed Bids: Sealed bids for the sale of Bonds of the City of Dubuque, Iowa, will be received at the office of the Finance Director, City Hall, 50 West 13th Street, in the City of Dubuque, Iowa (the "Issuer") at 11:00 o'clock A.M., on the 5th day of October, 2009. The bids will then be publicly opened and referred for action to the meeting of the City Council in conformity with the terms of offering. Sale and Award: The sale and award of the Bonds will be held at the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at a meeting of the City Council on the above date at 6:30 o'clock P.M. The Bonds: The Bonds to be offered are the following: GENERAL OBLIGATION BONDS, SERIES 2009A, in the amount of $2,935,000, to be dated the date of delivery. GENERAL OBLIGATION URBAN RENEWAL BONDS, SERIES 2009B, in the amount of $11,175,000, to be dated the date of delivery. GENERAL OBLIGATION REFUNDING BONDS, SERIES 2009C, in the amount of $9,500,000, to be dated the date of delivery. (together, the "Bonds") Adjustment of Principal Amounts. The Issuer reserves the right to decrease the aggregate principal amount of each series of the Bonds at the time of sale, as described in the Terms of Offering. Any such change will be in increments of $5,000, and may be made in any of the maturities. The purchase price will be adjusted proportionately to reflect any change in issue size. Manner of Bidding: Open bids will not be received. Bids for each series of the Bonds will be received by any of the following methods: ® Sealed Bidding: Sealed bids may be submitted and will be received at the office of the Finance Director, City Hall, Dubuque, Iowa. Electronic Internet Bidding: Electronic internet bids will be received at the office of the Finance Director, City Hall, Dubuque, Iowa. The bids must be submitted through the PARITY' competitive bidding system. Electronic Facsimile Bidding: Electronic facsimile bids will be received at the office of the Finance Director, Dubuque, Iowa (facsimile number: -7- 563/589-0890 or 563/690-6689). Electronic facsimile bids will be sealed and treated as sealed bids. Consideration of Bids: After the time for receipt of bids has passed, the close of sealed bids will be announced. Sealed bids will then be publicly opened and announced. Finally, electronic Internet bids will be accessed and announced. Official Statement: The Issuer has issued an Official Statement of information pertaining to the Bonds to be offered, including a statement of the Terms of Offering and an Official Bid Form for each series, which is incorporated by reference as a part of this notice. The Official Statement may be obtained by request addressed to the City Clerk, 50 W. 13th Street, Dubuque, Iowa 52001 (telephone: 563/589-4100) or the financial advisor to the City, Public Financial Management, Inc., 2600 Grand Avenue, Suite 214, Des Moines, Iowa 50312 (telephone: 515/243-2600). Terms of Offering: All bids shall be in conformity with and the sale shall be in accord with the applicable Terms of Offering as set forth in the Official Statement. To allow the Issuer to evaluate the possible savings to be achieved by issuing the Series 2009A and Series 20096 Bonds as "Build America Bonds" under section 54AA of the Internal Revenue Code and regulations thereunder, the Issuer requests, but does not require, that bidders submit two bids for the Series 2009A and Series 20096 Bonds, one bid with a rate schedule specifying rates assuming that the Series 2009A and Series 20096 Bonds are issued as tax exempt obligations, and one bid specifying rates assuming that the Series 2009A and Series 20096 Bonds are issued as taxable obligations. Each bid for taxable Series 2009A and Series 20096 Bonds must specify the expected reoffering price for each maturity, and each such offering price may not exceed the par amount of the maturity by more than .25% multiplied by the number of complete years to the earlier of the maturity date or the first optional redemption date for the maturity. Legal Opinion: Said Bonds will be sold subject to the opinion of Ahlers ~ Cooney, P.C., Attorneys of Des Moines, Iowa, as to the legality and their opinion will be furnished together with the printed Bonds without cost to the purchaser and all bids will be so conditioned. Except to the extent necessary to issue their opinion as to the legality of the Bonds, the attorneys will not examine or review or express any opinion with respect to the accuracy or completeness of documents, materials or statements made or furnished in connection with the sale, issuance or marketing of the Bonds. Rights Reserved: The right is reserved to reject any or all bids, and to waive any irregularities as deemed to be in the best interests of the public. By order of the City Council of the City of Dubuque, Iowa. -8- City Clerk of the City of Dubuque, Iowa (End of Notice) PASSED AND APPROVED this 21St day of September, 2009. ~~ / ,Uo ce E. Connors, Mayor Pro-Tem ATTEST: r eanne F. Schneider, CMC City Clerk ®9- CIG-3 CERTIFICATE STATE OF IOWA ) SS COUNTY OF DUBUQUE ) I, the undersigned City Clerk of Dubuque, Iowa, do hereby certify that attached is a true and complete copy of the portion of the corporate records of said Municipality showing proceedings of the Council, and the same is a true and complete copy of the action taken by said Council with respect to said matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council (a copy of the face sheet of said agenda being attached hereto) pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty-four hours prior to the commencement of the meeting as required by said law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective city offices as indicated therein, that no Council vacancy existed except as may be stated in said proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of said Municipality hereto affixed this day of , 2009. City Clerk, Dubuque, Iowa SEAL DCORNELL/ 630449.1 /MSWord\10422.092 -11- ~ ,c ~b o v ° o c m o. ti 'o T p, ~ a~'i ~ U ,D U ~ A ~ Y a T -_ ~ ~ ~N ~_ u T o~ P r' O >; o ; o -d C %a G y O ..C., ~` 0 U a._:~ ~. ~.~. .'", p U G ~' ,~' p O M v _ w F- ti c o ~w~ U r. ~~ o ~ o:. = c ~ ~' o .° c6 U ~ u ~ P. y ~ ~ o Y ° ~' c N 'U a .c a O ~ ~ `y ~ F ~n c c ~ °' .~ ~ c '_~°- P, o o ~ U i. .G- H ~ 7A U y ~ °~ n o p v '- ti ~ .`c_ .-. ~~~, C ~ :~. v id -d o y ~ ~ ~ ~ N '~ c ~ o o ( ~ ~w°N o~~ C 'C .~ ~~.Y J :! C; } O a~~w ~ '~ c «3 ~ ~ ~ 4J U ~ C~.' N ~ ~ ~ U ~ V :+ Q '~ -., ,~ A ~-' "' O G ~ ... V ~ l~p v c .~ ~ ~~,~: F a. ro PRELIMINARY OFFICIAL STATER-TENT DATED SEPTF,bIBER 2,, 2009 New and Refunding Issues Ratings: Application Made Assrnuing conrp[imrce rridr certain corwtmns, in the apinimr of Ahlers 8- Comrey, P.C, Bond Counsel, antler present !mr mrd assraufng continued cmnplimtce iriUr the requirements of the ht(enral Revemre Code of 1986, as aurended (the "Code ): (i) interest on (he Series 1009A Bmxls mrd Series 2009E Bonds for inhich the City does not make nn election (o hm~e the 'Build Aarericn Bond" pronisfons of Sectimr 5-!AA of the Code apply (any such Series 2009A Rmtds and Series 2009E Bonds being referred to collectively ns "Tac-Exempt Bmrds) is exchrdible from gross incmme jm~ federnl income tar purposes, is no( mr item of tar preference jar purposes of the federnl alternnlire nrininnmr tm' imposed mr individuals mrd corpora8mrs ender the Code, mrd evil! not be taken into account in de(en»htfng adjusted currmu emwfngs for the purpose of emnputitrg the altentative urinimuur tae imposed on corporations (as defined for federnl htcrnne tax purposes); (ii) interest cot the Series 2009C Bmrds is exclrrdfble from gross income for federnl income Tar purposes, cord is not mr item of tae preference for purposes of the federal alternnlire mininnnn tcrx imposed on individuals mrd corporations corder The Cade; hmrever, such interest is inchrded in the adjusted arrrent earnings of certain corpora(tmrs for purposes of calculaBng the al(ernatire nrinnnum tax imposed on such corporatfmrs; cord (iii) interest on (he Series 2009A Bmrds mrd Serfes 2009E Bmrds for rrbich the City makes cot eleeh'on to hove the "Build America Bmtd" prorisfons of Sec(imr 5-lAA of the Code apply (collectively, the "Taxable Bonds'J rri[I be incbrdlble in the gross income of the owners ihereoffor federal income tar purposes. Any Tar-Exempt Bmrds mrd the Series 2009C Bonds will be desigtraled as "qualified tax-exempt obligations" under SeGion 265(b)(3) of the Code. See "Tar A~fatters-Tcrx-Exempt Bonds"and "Taxability ajbneresf Taxable BuildAurerica Bonds"hereinjoranrore detailed discussion. CITY OF DUBUQUE, IOWA $2,935,000 General Obligation Bonds, Series 2009A $11,175,000 General Obligation Urban Renewal Bonds, Series 2009B $9,500,000 General Obligation Refunding Bonds, Series 2009C BIDS RECEIVED: Monday, October 5, 2009, 11:00 o'clock A.M., Central Time AWARD: Monday, October 5, 2009, 6:30 o'clock P.M., Central Time The $2,935,000 General Obligation Bonds, Series 2009A (the "Series 2009A Bonds"), the $11,175,000 General Obligation Urban Renewal Bonds, Series 2009B (the "Series 2009B Bonds") and the $9,500,000 General Obligation Refunding Bonds, Series 2009C (the "Series 2009C Bonds") (collectively the "Bonds") are being issued pursuant to Division III of Chapter 384 and Chapter 403 of the Code of Iowa and resolutions to be adopted by the City Council of the City of Dubuque, Iowa (the "City"). The Series 2009A Bonds are being issued to provide funds to pay costs of the acquisition of sewer pipeline inspection equipment; the inspection and certification of the flood control levee system; the construction and installation of stone water management facilities, including the Bee Branch Creek Restoration Project, and the reconstruction of storm sewers; the acquisition and replacement of street lights; the acquisition and installation of fiber optic conduit in connection with street improvements and watermain extensions; the repair and improvement of the Dubuque Regional Airport, including hanger heater and terminal boiler replacements, runway and hanger painting, hanger repairs and replacements and parking area paving; the acquisition and replacement of Fire Department ladder and pumper tracks and ambulances; and water utility improvements including the construction and installation of watermain extensions, ADA improvements, back-up power supply and water consumption studies and engineering. The Series 2009B Bonds are being issued to provide funds to pay costs of aiding in the planning, undertaking and carrying out of urban renewal project activities under the authority of Chapter 403 of the Code of Iowa and the Amended and Restated Urban Renewal Plans for the Greater Downtown Urban Renewal District and the Dubuque Industrial Center West Economic Development District, including those costs associated with the construction of a multi-story public parking ramp located at 5th and Bluff Streets, and the construction of street, sewer, sidewalk, trail and other public infrastructure improvements within Dubuque Industrial Center West. The Series 2009C Bonds are being issued to provide funds to current refund on November I1, 2009 $7,325,000 of the outstanding General Obligation Bonds, Series 2001 dated December 15, 2001 and $2,080,000 of the outstanding General Obligation Bonds, Series 2002 dated December 15, 2002. The Bonds are general obligations of the City for which the City will pledge its power to levy direct ad valorem taxes to the repayment of the Bonds. It is anticipated that the debt service on the Series 2009B Bonds will be abated with tax increment revenues from the City's Urban Renewal Areas. The Bonds will be issued as fully registered Bonds without coupons and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Tmst Company ("DTC"). DTC will act as securities depository for the Bonds. Individual purchases may be made in book-entry-form only, in the principal amount of $5,000 and integral multiples thereof. Purchasers will not receive certificates representing their interest in the Bonds purchased. Principal and interest on the Bonds will be paid to DTC by Wells Fargo Bank, N.A. as Registrar and Paying Agent, which will in turn remit such principal and interest to its participants for subsequent disbursement to the beneficial owners of the Bonds as described herein. Interest and principal shall be paid to the registered holder of a bond as shown on the records of ownership maintained by the registrar as of the fifteenth day preceding such interest payment date (the "Record Date"). To allow the City to evaluate the possible savings it can achieve by issuing the Series 2009A Bonds and the Series 2009B Bonds as "Build America Bonds (Direct Payment)" under Section 54AA of the Internal Revenue Code of 1986, as amended, (the "Code") the City requests, but does not require, that bidders provide rivo bids for the Series 2009A Bonds and the Series 2009B Bonds, one bid with a rate schedule specifying rates assuming that the Series 2009A Bonds and the Series 2009B Bonds will be issued as Tax-Exempt Bonds, and a second bid with a rate schedule specifying rates assuming that the Series 2009A Bonds and the Series 2009B Bonds will be issued as Taxable Build America Bonds. To comply with the "Build America Bond" provisions of the Code, each bid for the Taxable Build America Bonds must specify the expected reoffering price for each maturity, and each such reoffering price cannot exceed the par amount of the maturity by more than 0.25% multiplied by the number of complete years to the earlier of the maturity date or the fast optional redemption date for the maturity. The Series 2009A Bonds and the Series 2009B Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost ("TIC") basis, taking into account the available credit to the City if the Series 2009A Bonds and the Series 2009B Bonds are issued as "qualified Build America Bonds (Direct payment)" and whether any expected reoffering premium would prevent the Series 2009A Bonds and the Series 2009B Bonds from being issued as "Build America Bonds." Separate bid forms and provisions have been made through PARITY® for submitting bids for the Tax-Exempt or Taxable Build America Bonds. THE BONDS WILL MATURE AS LISTED ON THE INSIDE FRONT COVER SERIES 2009A BONDS MAXIMUM BID: See Terms of Offering section "Maximum Permitted Price" MINIMUM BID: $2,905,650 SERIES 2009B BONDS SERIES 2009C BONDS See Terms of Offering section "Maximum Not Applicable. Permitted Price" $11,063,250 $9,438,250 GOOD FAITH DEPOSIT: Required of Purchaser Only Required of Purchaser Only Required of Purchaser Only TAX MATTERS: See "Tar Exemption attd Related Considerations" of See "Tax Exxemp(ion and Related Considerations" or Federal: Tax-Exempt "Taxability of Interest" if issued as Build America "Taxability of Interest" if issued as Build America State: Taxable Bonds for more details. Bonds for more details. The Bonds are offered, subject to prior sale, withdrawal or modification, when, as, and if issued subject to the legal opinion of Ahlers & Cooney, P.C., Bond Counsel, of Des Moines, Iowa, to be furnished upon delivery of the Bonds. It is expected that the Bonds will be available for delivery on or about November 10, 2009. This Preliminary Official Statement vvill be further supplemented by offering prices, interest rates, aggregate principal amount, principal amount per maturity, anticipated delivery date, and underwriter, together with any other information required by law, and shall constitute a "Final Official Statement" of the City with respect to the Bonds, as defined in Rule 15c2-12. ~- r-- ez.~.xa°:~~ ~-_~ ~--~_ The PFM Group Public Financial ivlanauernent, Inc. FF6,1 Asset P~4ana3=:mead PLC PF~n Atl,nsars 2600 Grand Avenue, Suite 214 Des Moines, Iowa 50312 (515)243-2600 d.lli ®~19 VADVQV~y ~®VV S-9 $2,935,000 General Obligation Bonds, Series 2009A SERIES 2009A BONDS MATURITY: June 1 as follows: Year Amount Year Amount 2011 $120,000 2021 $150,000 2012 125,000 2022 160,000 2013 130,000 2023 165,000 2014 130,000 2024 175,000 2015 130,000 2025 175,000 2016 135,000 2026 185,000 2017 140,000 2027 190,000 2018 140,000 2028 195,000 2019 140,000 2029 205,000 2020 145,000 $11.,175,000 General Obligation Urban Renewal Bonds, Series 2009B SERIES 2009B BONDS MATURITY: June 1 as follows: Year Amount Year Amount 2011 $450,000 2021 $590,000 2012 455,000 2022 610,000 2013 465,000 2023 630,000 2014 475,000 2024 655,000 2015 485,000 2025 685,000 2016 500,000 2026 710,000 2017 515,000 2027 735,000 2018 535,000 2028 765,000 2019 545,000 2029 800,000 2020 570,000 $9,500,000 General Obligation Refunding Bonds, Series 2009C SERIES 2009C BONDS MATURITY: June 1 as follows: Year Amount Year Amount 2010 $695,000 2016 $770,000 2011 755,000 2017 795,000 2012 760,000 2018 825,000 2013 750,000 2019 850,000 2014 745,000 2020 880,000 2015 765,000 2021 910,000 DATED: Date of Delivery (November 10, 2009) INTEREST: June 1, 2010 and semiannually thereafter. REDEMPTION: Bonds due after June 1, 2017 will be subject to call on said date or on any date thereafter upon terms of par plus accrued interest to date of call. COMPLIANCE WITH S.E.C. RULE 15c2-12 Municipal obligations (issued in an aggregate amount over $1,000,000) are subject to General Rules and Regulations, Securities Exchange Act of 1934, Rule 15c2-12 Municipal Securities Disclosure. Preliminary Official Statement: This Preliminary Official Statement was prepared for the City for dissemination to prospective bidders. Its primary purpose is to disclose information regarding the Bonds to prospective bidders in the interest of receiving competitive bids in accordance with the Notice of Bond Sale and Terms of Offering contained herein. Unless an addendum is received prior to the sale, this document shall be deemed the "Near Final Official Statement". Review Period: This Preliminary Official Statement has been distributed to city staff as well as to prospective bidders for an objective review of its disclosure. Comments or omissions or inaccuracies must be submitted to Public Financial Management, Inc. (the "Financial Advisor") at least two business days prior to the sale. Requests for additional information or corrections in the Preliminary Official Statement received on or before this date will not be considered a qualification of a bid received. If there are any changes, corrections or additions to the Preliminary Official Statement, prospective bidders will be informed by an addendum at least one business day prior to the sale. Final Official Statement: Upon award of sale of the Bonds, the legislative body will authorize the preparation of a Final Official Statement that includes the offering prices, interest rates, aggregate principal amount, principal amount per maturity, anticipated delivery date and other information required by law and the identity of the Syndicate Manager and Syndicate Members. Copies of the Final Official Statement will be delivered to the underwriter (Syndicate Manager) within seven business days following the bid acceptance. REPRESENTATIONS No dealer, broker, salesperson or other person has been authorized by the City to give any information or to make any representations, other than those contained in the Preliminary Official Statement. This Preliminary Official Statement does not constitute any offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person, in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information, estimates and expressions of opinion herein are subject to change without notice and neither the delivery of this Preliminary Official Statement nor any sale made hereunder, shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. This Preliminary Official Statement is submitted in connection with the sale of the securities referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Preliminary Official Statement and any addenda thereto were prepared relying on information of the City and other sources, which are believed to be reliable. Bond Counsel has not participated in the preparation of this Preliminary Official Statement and is not expressing any opinion as to the completeness or accuracy of the information contained therein. Compensation of Financial Advisor, payable entirely by the City, is contingent upon the sale of the issues. (This page has been left blank intentionally.) TALE ®F' C®1~tTEIoTTS NOTICE OF BOND SALE ..........................................................................................................................................i TERMS OF OFFERING .......................................................................................................................................... to SCHEDULES OF BOND YEARS ............................................................................................................................ix INTRODUCTION .......................................................................................................................................................1 AUTHORITY AND PURPOSE ................................................................................................................................1 PAYMENT OF AND SECURITY FOR THE BONDS ...........................................................................................2 BOOK-ENTRY-ONLY SYSTEM ............................................................................................................................2 FUTURE FINANCING ............................................................................................................................................4 LITIGATION ............................................................................................................................................................4 DEBT PAYMENT HISTORY ..................................................................................................................................5 LEGALITY ...............................................................................................................................................................5 TAX MATTERS -Tax Exempt Bonds .....................................................................................................................5 TAXABILITY OF INTEREST -Taxable Build America Bonds .............................................................................7 RELATED TAX MATTERS ....................................................................................................................................9 RATINGS .................................................................................................................................................................9 FINANCIAL ADVISOR ...........................................................................................................................................9 CONTINUING DISCLOSURE ..............................................................................................................................10 CERTIFICATION ...................................................................................................................................................10 CITY PROPERTY VALUES ................................................................................................................................... 11 IOWA PROPERTY VALUATIONS ...................................................................................................................... 11 1/1/2008 VALUATIONS (Taxes Payable July 1, 2009 to June 30, 2010) ............................................................. 11 2008 GROSS TAXABLE VALUATION BY CLASS OF PROPERTY ................................................................ 11 TREND OF VALUATIONS ................................................................................................................................... 12 LARGER TAXPAYERS; LEGISLATION ............................................................................................................ 12 CITY INDEBTEDNESS ........................................................................................................................................... 13 DEBT LIMIT .......................................................................................................................................................... 13 DIRECT DEBT ....................................................................................................................................................... 13 OTHER DEBT ........................................................................................................................................................ 16 INDIRECT GENERAL OBLIGATION DEBT ...................................................................................................... 17 DEBT RATIOS ....................................................................................................................................................... 17 LEVIES AND TAX COLLECTIONS .................................................................................................................... 17 TAX RATES; LEVY LIMITS ................................................................................................................................ 18 FUNDS ON HAND (Cash and Investments as of August 31, 2009) ...................................................................... 18 THE CITY .................................................................................................................................................................. 19 CITY GOVERNMENT ........................................................................................................................................... 19 EMPLOYEES; PENSIONS .................................................................................................................................... 19 INSURANCE .......................................................................................................................................................... 19 GENERAL INFORMATION ...................................................................................................................................20 LOCATION AND TRANSPORTATION ..............................................................................................................20 LARGER EMPLOYERS ........................................................................................................................................20 BUILDING PERMITS ............................................................................................................................................21 U.S. CENSUS DATA; UNEMPLOYMENT RATES ............................................................................................21 EDUCATION .........................................................................................................................................................21 EFFECTIVE BUYING INCONIE ...........................................................................................................................22 FINANCIAL SERVICES .......................................................................................................................................22 FINANCIAL STATEMENTS ................................................................................................................................22 APPENDIX A -FORMS OF LEGAL OPINIONS APPENDIX B -JUNE 30, 2008 COMPREHENSIVE ANNUAL FINANCIAL REPORT APPENDIX C -FORMS OF CONTINUING DISCLOSURE CERTIFICATES OFFICIAL BID FORMS City of Dubuque, Iowa Manor & City Council Initial Term Roy Buol Mayor 1994' Ric Jones Council Member - At Large 2005 David Resnick Council Member - At Large 2008 Kevin Lynch Council Member - Ward One 2005 Karla Braig Council Member - Ward Two 2005 Joyce Connors Council Member - Ward Three 2002 Dirk Voetberg Council Member - Ward Four 2008 Current Term Expires 2009 2009 2011 2009 2011 2009 2011 Roy Buol served on the City Council as Council Member -Ward Two from 1994-2005 prior to his election as Mayor in 2005. Administration Michael Van Milligen, City Manager Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager Ken TeKippe, Finance Director Jenny Larson, Budget Director Jeanne Schneider, City Clerk City AttorneX Barry A. Lindahl Dubuque, Iowa Bond Counsel Ahlers & Cooney, PC Des Moines, Iowa Financial Advisor Public Financial Management Des Moines, Iowa NOTICE OF BOND SALE Time and Place of Sealed Bids: Sealed bids for the sale of Bonds of the City of Dubuque, Iowa, will be received at the office of the Finance Director, City Hall, 50 West 13th Street, in the City of Dubuque, Iowa (the "Issuer") at 11:00 o'clock A.M., on the 5th day of October, 2009. The bids will then be publicly opened and referred for action to the meeting of the City Council in conformity with the terms of offering. Sale and Award: The sale and award of the Bonds will be held at the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at a meeting of the City Council on the above date at 6:30 o'clock P.M. The Bonds: The Bonds to be offered are the following: GENERAL OBLIGATION BONDS, SERIES 2009A, in the amount of $2,935,000, to be dated the date of delivery. GENERAL OBLIGATION URBAN RENEWAL BONDS, SERIES 2009B, in the amount of $11,175,000, to be dated the date of delivery. GENERAL OBLIGATION REFUNDING BONDS, SERIES 2009C, in the amount of $9,500,000, to be dated the date of delivery. (together, the "Bonds") Adjustment of Principal Amounts. The Issuer reserves the right to decrease the aggregate principal amount of each series of the Bonds at the time of sale, as described in the Terms of Offering. Any such change will be in increments of $5,000, and may be made in any of the maturities. The purchase price will be adjusted proportionately to reflect any change in issue size. Manner of Bidding: Open bids will not be received. Bids for each series of the Bonds will be received by any of the following methods: Sealed Bidding: Sealed bids may be submitted and will be received at the office of the Finance Director, City Hall, Dubuque, Iowa. ® Electronic Internet Bidding: Electronic internet bids will be received at the office of the Finance Director, City Hall, Dubuque, Iowa. The bids must be submitted through the PARITY® competitive bidding system. ® Electronic Facsimile Bidding: Electronic facsimile bids will be received at the office of the Finance Director, Dubuque, Iowa (facsimile number: 563/589-0890 or 563/690-6689). Electronic facsimile bids will be sealed and treated as sealed bids. Consideration of Bids: After the time for receipt of bids has passed, the close of sealed bids will be announced. Sealed bids will then be publicly opened and announced. Finally, electronic internet bids will be accessed and announced. Official Statement: The Issuer has issued an Official Statement of information pertaining to the Bonds to be offered, including a statement of the Terms of Offering and an Official Bid Form for each series, which is incorporated by reference as a part of this notice. The Official Statement may be obtained by request addressed to the City Clerk, 50 W. 13th Street, Dubuque, Iowa 52001 (telephone: 563/589-4100) or the financial advisor to the City, Public Financial Management, Inc., 2600 Grand Avenue, Suite 214, Des Moines, Iowa 50312 (telephone: 515/243- 2600). Terms of Offering: All bids shall be in conformity with and the sale shall be in accord with the applicable Terms of Offering as set forth in the Official Statement. To allow the Issuer to evaluate the possible savings to be achieved by issuing the Series 2009A and Series 2009B Bonds as "Build America Bonds" under section 54AA of the Internal Revenue Code and regulations thereunder, the Issuer requests, but does not require, that bidders submit two bids for the Series 2009A and Series 2009B Bonds, one bid with a rate schedule specifying rates assuming that the Series 2009A and Series 2009B Bonds are issued as tax exempt obligations, and one bid specifying rates assuming that the Series 2009A and Series 2009B Bonds are issued as taxable obligations. Each bid for taxable Series 2009A and Series 2009B Bonds must specify the expected reoffering price for each maturity, and each such offering price may not exceed the par amount of the maturity by more than .25% multiplied by the number of complete years to the earlier of the maturity date or the first optional redemption date for the maturity. Le ag 1 O ip nion: Said Bonds will be sold subject to the opinion of Ahlers & Cooney, P.C., Attorneys of Des Moines, Iowa, as to the legality and their opinion will be furnished together with the printed Bonds without cost to the purchaser and all bids will be so conditioned. Except to the extent necessary to issue their opinion as to the legality of the Bonds, the attorneys will not examine or review or express any opinion with respect to the accuracy or completeness of documents, materials or statements made or furnished in connection with the sale, issuance or marketing of the Bonds. Rights Reserved: The right is reserved to reject any or all bids, and to waive any irregularities as deemed to be in the best interests of the public. By order of the City Council of the City of Dubuque, Iowa. City Clerk of the City of Dubuque, Iowa ii TERMS ®F ®FFERII~tG CITY ®F D V y V ~iJE, I® V Y In addition to the provisions of the official Notice of Bond Sale, this section sets forth the description of certain of the terms of the Series 2009A Bonds, Series 2009B Bonds and Series 2009C Bonds (collectively "the Bonds") as well as the terms of offering with which all bidders and bid proposals are required to comply, as follows: DETAILS OF THE SERIES 2009A BONDS GENERAL OBLIGATION BONDS, SERIES 2009A (the "Series 2009A Bonds") in the principal amount of $2,935,000 to be dated the date of delivery (November 10, 2009) in the denomination of $5,000 or multiples thereof, and to mature June 1 as follows: Year Amount Year Amount 2011 $120,000 2021 $150,000 2012 125,000 2022 160,000 2013 130,000 2023 165,000 2014 130,000 2024 175,000 2015 130,000 2025 175,000 2016 13 5,000 2026 185,000 2017 140,000 2027 190,000 2018 140,000 2028 195,000 2019 140,000 2029 205,000 2020 145,000 DETAILS OF THE SERIES 2009B BONDS GENERAL OBLIGATION URBAN RENEWAL BONDS, SERIES 2009B (the "Series 2009B Bonds"), in the principal amount of $11,175,000 to be dated the date of delivery (November 10, 2009) in the denomination of $5,000 or multiples thereof, and to mature June 1, as follows: Year Amount Year Amount 2011 $450,000 2021. $590,000 2012 455,000 2022 610,000 2013 465,000 2023 630,000 2014 475,000 2024 655,000 2015 485,000 2025 685,000 2016 500,000 2026 710,000 2017 515,000 2027 735,000 2018 535,000 2028 765,000 2019 545,000 2029 800,000 2020 570,000 iii DETAILS OF THE SERIES 2009C BONDS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2009C (the "Series 2009C Bonds"), in the principal amount of $9,500,000 to be dated the date of delivery (November 10, 2009) in the denomination of $5,000 or multiples thereof, and to mature June 1, as follows: Year Amount Year Amount 2010 $695,000 2016 $770,000 2011 755,000 2017 795,000 2012 760,000 2018 825,000 2013 750,000 2019 850,000 2014 745,000 2020 880,000 2015 765,000 2021 910,000 ADJUSTMENT TO PRINCIPAL AMOUNTS The City reserves the right to decrease the aggregate principal amount of each series of the Bonds at the time of sale, as described herein. Any such change will be in increments of $5,000, and may be made in any of the maturities. The purchase price will be adjusted proportionately to reflect any change in issue size. The dollar amount of the purchase price proposed by the successful bidder (the "Purchaser(s)") will be changed if the aggregate principal amount of the Bonds is adjusted as described above. Any premium offered or discount taken will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced; provided that the City's financial advisor will make every effort to ensure that the net compensation to the Purchaser(s) as a percentage of the adjusted par amount does not increase or decrease materially from what it would have been if no adjustment had been made to the principal amounts shown in the maturity schedule above. The adjustment will be made by dividing (i) the aggregate difference between the offering price of the Bonds to the public and the price to be paid to the City (not including accrued interest), less any bond insurance premium and credit rating fee, to be paid by the Purchaser(s), by (ii) the principal amount of the Bonds. The Purchaser(s) may not withdraw or modify its bid as a result of any post bid adjustment. Any adjustment shall be conclusive, and shall be binding upon the Purchaser(s). INTEREST Interest on the Bonds will be payable on June 1, 2010 and semiannually on the first day of December and June thereafter. Interest and principal shall be paid to the registered holder of a bond as shown on the records of ownership maintained by the registrar as of the fifteenth day preceding such interest payment date (the "Record Date"). Interest will be computed on the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to rules of the MSRB. OPTIONAL REDEMPTION Bonds due after June 1, 2017 will be subject to call for prior redemption on said date or on any day thereafter upon terms of par plus accrued interest to date of call. GOOD FAITH DEPOSIT A Good Faith Deposit (the "Deposit") in the amount of $29,350 for the Series 2009A Bonds, $111,750 for the Series 2009B Bonds and $95,000 for the Series 2009C Bonds is required of the lowest bidder only for each series of the Bonds. The lowest bidder for each series of the Bonds is required to submit such Deposit payable to the order of the City in the form of either (i) a cashier's check provided to the City or its Financial Advisor prior to the opening of bids or (ii) a wire transfer as instructed by the City's Financial Advisor not later than 1:00 P.M. Central Time on the day of sale of the Bonds. If not so received, the bid of the lowest bidder will be rejected and the City may direct the second lowest bidder to submit a Deposit and thereafter may award the sale of the Bonds to the same. No interest on a iv Deposit will accrue to the Purchaser(s). Deposits will be applied to the purchase price of the respective series of Bonds. In the event a Purchaser fails to honor its accepted bid proposal, the Deposit will be retained by the City. FORM OF BIDS AND AWARD All bids shall be unconditional for each series of the Bonds for a price not less than $2,905,650 for the Series 2009A Bonds, $11,063,250 for the Series 2009B Bonds and $9,438,250 for the Series 2009C Bonds, plus accrued interest, and shall specify the rate or rates of interest in conformity to the limitations set forth under "RATES OF INTEREST" on the following page. Bids must be submitted on or in substantial compliance with the Official Bid Form provided by the City. To allow the City to evaluate the possible savings it can achieve by issuing the Series 2009A Bonds and the Series, 2009B Bonds as "Build America Bonds (Direct Payment)" under Section 54AA of the Internal Revenue Code of 1986, as amended, (the "Code"), the City requests, but does not require, that bidders provide two bids for the Series 2009A Bonds and the Series 2009B Bonds, one bid with a rate schedule specifying rates assuming that the Series 2009A Bonds and the Series 2009B Bonds will be issued as Tax-Exempt Bonds, and a second bid with a rate schedule specifying rates assuming that the Series 2009A Bonds and the Series 2009B Bonds will be issued as Taxable Build America Bonds. To comply with the "Build America Bond" provisions of the Code, each bid for the Taxable Build America Bonds must specify the expected reoffering price for each maturity, and each such reoffering price cannot exceed the par amount of the maturity by more than 0.25% multiplied by the number of complete years to the earlier of the maturity date or the first optional redemption date for the maturity of the Series 2009A Bonds and the Series 2009B Bonds. See the "MAXIMUM PERMITTED REOFFERING PRICE" section on the following page for the maximum allowable (de minimis) premium for each maturity issued as "Build America Bonds". Separate bid forms and Parity provisions have been provided for submitting bids for the Series 2009A Bonds and the Series 2009B Bonds if they are to be designated Tax-Exempt Bonds or designated Taxable Build America Bonds. Each series of the Bonds will be awarded to the bidder offering the lowest interest rate to be determined on a true interest cost ("TIC") basis, assuming compliance with the "GOOD FAITH DEPOSIT" section on the previous page, and taking into account the available credit to the City if the Series 2009A Bonds and the Series 2009B Bonds are issued as "qualified Build America Bonds" and whether any expected reoffering premium would prevent the Series 2009A Bonds and the Series 2009B Bonds from being issued as "Build America Bonds." The TIC shall be determined by the "present value method", i.e., by ascertaining the semiannual rate, compounded semi-annually, necessary to discount as of the dated date of the Bonds, the amount payable on each interest payment date and on each stated maturity date or earlier mandatory redemption, so that the aggregate of such amounts will equal the aggregate purchase price offered therefore and taking into account the available credit to the City, if the Series 2009A Bonds and the Series 2009B Bonds are issued as "qualified Build America Bonds", as a reduction in each interest payment and whether any expected reoffering premium would prevent the Series 2009A Bonds and the Series 2009B Bonds from being issued as "Build America Bonds." See the "MAXIMUM PERMITTED REOFFERING PRICE" section on the following page for the maximum allowable (de minimis) premium for each maturity issued as "Build America Bonds". The TIC shall be stated in terms of an annual percentage rate and shall be that rate of interest, which is twice the semiannual rate so ascertained (also known as the "Canadian Method"). The TIC shall be as determined by the Financial Advisor based on the Terms of Offering and all amendments, and on the bids as submitted. The Financial Advisor's computation of the TIC of each bid shall be controlling. In the event of tie bids for the lowest TIC, the Bonds will be awarded by lot. The City will reserve the right to: (i) waive non-substantive receipt of bids and award of the Bonds, (ii) reject all bids determines to have failed to comply with the terms herein. informalities of any bid or of matters relating to the without cause and (iii) reject any bid which the City v The reoffering prices for the Taxable Build America Bonds shall not include more than a de minimis amount of premium as specified below for each maturity: MAXIMUM PERMITTED REOFFERING PRICE Maximum Permitted Year Reoffering Price 2011 100.25% 2012 100.50% 2013 100.75% 2014 101.00% 2015 101.25% 2016 101.50% 2017 101.75% 2018 101.75% 2019 101.75% 2020 101.75% Maximum Permitted Year Reoffering Price 2021 101.75% 2022 101.75% 2023 101.75% 2024 101.75% 2025 101.75% 2026 101.75% 2027 101.75% 2028 101.75% 2029 101.75% RATES OF INTEREST Considering each series separately, the rates of interest specified in the bidder's proposal must conform to the following limitations: 1. All bonds of each annual maturity must bear the same interest rate. 2. Rates of interest bid must be in multiples ofone-eighth or one-twentieth of one percent. 3. Each rate of interest specified for bonds of any annual maturity shall not be less than a rate of interest specified for any earlier maturity. BOOK-ENTRY-ONLY SYSTEM The Bonds will be issued by means of abook-entry-only system with no physical distribution of bond certificates made to the public. The Bonds will be issued in fully registered form and one bond certificate, representing the aggregate principal amount of the Bonds maturing in each year will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest on the Bonds will be paid to DTC or its nominee as registered owner of the Bonds by the City's registration and paying agent. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The Purchaser(s), as a condition of delivery of the Bonds, will be required to deposit the bond certificates with DTC. RECEIPT OF BIDS No bid will be accepted after the time specified in the Notice of Bond Sale. A bid may be withdrawn before the bid deadline using the same method used to submit the bid. If more than one bid is received from a bidder, the last bid received shall be considered. Sealed Bidding: Sealed bids may be submitted and will be received at the office of the Finance Director, Dubuque, Iowa. Internet Bidding: Internet bids must be submitted through the PARITY® competitive bidding system (the "Internet Bid System"). Information about the Internet Bid System may be obtained by calling (212) 404-8102. vi Each prospective bidder shall be solely responsible for making necessary arrangements to access the Internet Bid System for purposes of submitting its Internet bid in a timely manner and in compliance with the requirements of the Terms of Offering. The City is permitting prospective bidders to use the services of Internet Bid System solely as a communication mechanism to conduct the Internet bidding and the Internet Bid System is not an agent of the City. Provisions of the Terms of Offering and Official Bid Form shall control in the event of conflict with information provided by the Internet Bid System. Electronic Facsimile Bidding: Electronic facsimile bids will be received at the office of the Finance Director, Dubuque, Iowa (facsimile number: 563/589-0890 or 563/690-6689). Electronic facsimile bids will be sealed and treated as sealed bids. Transmission received after the deadline will be rejected. Bidders electing to submit bids via facsimile transmission bear full responsibility for the transmission of such bid. The City shall not be responsible for malfunction or mistake made by any person, or as a result of the use of the electronic facsimile facilities or any other means used to deliver or complete a bid. The use of such facilities or means is at the sole risk of the prospective bidder who shall be bound by the terms of the bid as received. Neither the City nor its agents will assume liability for the inability of the bidder to reach the above named fax number prior to the time of sale specified above. Time of receipt shall be the time recorded by the facsimile operator receiving the bids. BOND INSURANCE AT PURCHASER'S OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefore at the option of the bidder, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the Purchaser(s) of the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the Purchaser(s), except that, if the City has requested and received a rating on the Bonds from a rating agency, the City will pay that initial rating fee. Any other rating agency fees shall be the responsibility of the Purchaser(s). Failure of the municipal bond insurer to issue the policy after the Bonds have been awarded to the Purchaser(s) shall not constitute cause for failure or refusal by.the Purchaser(s) to accept delivery on the Bonds. DELIVERY The Bonds will be delivered to the Purchaser(s) via FAST delivery with the Paying Agent holding the Bonds on behalf of DTC, against full payment in immediately available cash or federal funds. The Bonds are expected to be delivered within forty-five days after the sale. Should delivery be delayed beyond sixty days from the date of sale for any reason except failure of performance by the Purchaser(s), the Purchaser(s) may withdraw their bid and thereafter their interest in and liability for the Bonds will cease. When the Bonds are ready for delivery, the City will give the Purchaser(s) five working days notice of the delivery date and the City will expect payment in full on that date; otherwise, reserving the right at their option to determine that the Purchaser(s) failed to comply with the offer of purchase. INFORMATION FROM PURCHASER The Purchaser(s) will be required to certify to the City immediately after the opening of bids: (i) the initial public offering price of each maturity of the Bonds (not including sales to bond houses and brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of the Bonds (not less than 10% of each maturity) were sold to the public; or (ii) if less than 10% of any maturity has been sold, the price for that maturity determined as of the time of the sale based upon the reasonably expected initial offering price to the public; and (iii) that the initial public offering price does not exceed their fair market value of the Bonds on the sale date. The Purchaser(s) will also be required to provide a certificate at closing confirming the information required by this paragraph. vii OFFICIAL STATEMENT The City has authorized the preparation of a Preliminary Official Statement containing pertinent information relative to the Bonds. The Preliminary Official Statement when further supplemented with maturity dates, principal amounts, and interest rates of the Bonds, and any other information required by law or deemed appropriate by the City, shall constitute a Final Official Statement of the City with respect to the Bonds, as that term is defined in Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"). By awarding the Bonds to any underwriter or underwriting syndicate submitting an Official Bid Form therefore, the City agrees that, no more than seven (7) business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which each series of the Bonds are awarded up to 20 copies for the Series 2009A Bonds; up to 35 copies for the Series 2009B Bonds and up to 35 copies for the Series 2009C Bonds of the Final Official Statement to permit each "Participating Underwriter" (as that term is defined in the Rule) to comply with the provisions of such Rule. The City shall treat the senior managing underwriter of the syndicate to which the Bonds are awarded as its designated agent for purposes of distributing copies of the Final Official Statement to the Participating Underwriter. Any underwriter executing and delivering an Official Bid Form with respect to the Bonds agrees thereby that if its bid is accepted by the City, (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. CONTINUING DISCLOSURE In order to assist bidders in complying with paragraph (b)(5) of the Rule, the City will undertake, pursuant to the resolution for the Bonds and a Continuing Disclosure Certificate, to provide certain annual financial information and notices of certain events. The details of this undertaking are set forth in Appendix C of this Preliminary Official Statement. The Continuing Disclosure Certificate will be delivered at closing, and any failure on the part of City to deliver the same shall relieve the successful bidder of its obligation to purchase the Bonds. In accordance with the reporting requirements of SEC Rule 15c2-12(f)(3), the City has complied in all material respects with previous undertakings entered into under the Rule. CUSIP NUMBERS It is anticipated that CUSIP numbers will be printed on the Bonds and the Purchaser(s) must agree in the bid proposal to pay the cost thereof. In no event will the City, Bond Counsel or Financial Advisor be responsible for the review or express any opinion that the CUSIP numbers are correct. Incorrect CUSIP numbers on said Bonds shall not be cause for the Purchaser(s) to refuse to accept delivery of said Bonds. BY ORDER OF THE CITY COUNCIL Jeanne Schneider, City Clerk City of Dubuque, Iowa 50 West 13th Street Dubuque, Iowa 52001 vm SCHEDULE OF BOND YEARS $2,935,000 CITY OF DUBUQUE, IOWA General Obligation Bonds, Series 2009A Bonds Dated: November 10, 2009 Interest Due: June 1, 2010 and each December 1 and June 1 to maturity Principal Due: June 1, 2011-2029 Cumulative Year Principal Bond Years Bond Years 2011 $120,000 187.00 187.00 2012 125,000 319.79 506.79 2013 130,000 462.58 969.3 8 2014 130,000 592.58 1,561.96 2015 130,000 722.58 2,284.54 2016 135,000 885.38 3,169.92 2017 140,000 1,058.17 4,228.08 2018 140,000 1,198.17 5,426.25 2019 140,000 1,33 8.17 6,764.42 2020 145,000 1,530.96 8,29538 2021 150,000 1,733.75 10,029.13 2022 160,000 2,009.33 12,038.46 2023 165,000 2,237.13 14,275.58 2024 175,000 2,547.71 16,823.29 2025 175,000 2,722.71 19,546.00 2026 185,000 3,063.29 22,609.29 2027 190,000 3,336.08 25,945.38 2028 195,000 3,618.88 29,564.25 2029 205,000 4,009.46 33,573.71 Average Maturity (dated date): 11.439 Years ix SCHEDULE OF BOl>TD YEARS $11,175,000 CITY OF DUBUQUE, IOWA General Obligation Urban Renewal Bonds, Series 2009B Bonds Dated: November 10, 2009 Interest Due: June 1, 2010 and each December 1 and June 1 to maturity Principal Due: June 1, 2011-2029 Cumulative Year Principal Bond Years Bond Years 2011 $450,000 701.25 701.25 2012 455,000 1,164.04 1,865.29 2013 465,000 1,654.63 3,519.92 2014 475,000 2,165.21 5,685.13 2015 485,000 2,695.79 8,3 80.92 2016 500,000 3,279.17 11,660.08 2017 515,000 3,892.54 15,552.63 2018 535,000 4,578.71 20,131.33 2019 545,000 5,209.29 25,340.63 2020 570,000 6,018.25 31,358.88 2021 590,000 6, 819.42 3 8,178.29 2022 610,000 7,660.58 45,838.88 2023 630,000 8,541.75 54,380.63 2024 655,000 9,535.71 63,916.33 2025 685,000 10,657.46 74,573.79 2026 710,000 11,756.42 86,330.21 2027 735,000 12,905.38 99,235.58 2028 765,000 14,197.13 113,432.71 2029 800,000 15,646.67 129,079.38 Average Maturity (dated date): 11.551 Years x SCHEDULE OF BOND YEARS $9,500,000 CITY OF DUBUQUE, IOWA General Obligation Refunding Bonds, Series 2009C Bonds Dated: November 10, 2009 Interest Due: June 1, 2010 and each December 1 and June 1 to maturity Principal Due: June 1, 2010-2021 Cumulative Year Principal Bond Years Bond Years 2010 $695,000 388.04 388.04 2011 755,000 1,176.54 1,564.58 2012 760,000 1,944.33 3,508.92 2013 750,000 2,668.75 6,177.67 2014 745,000 3,395.96 9,573.63 2015 765,000 4,252.13 13,825.75 2016 770,000 5,049.92 18,875.67 2017 795,000 6,008.88 24,884.54 2018 825,000 7,060.63 31,945.17 2019 850,000 8,124.58 40,069.75 2020 880,000 9,291.33 49,361.08 2021 910,000 10,518.08 59,879.17 Average Maturity (dated date): 6.303 Years xi (This page has been left blank intentionally.) ®FFICIAL STATEMENT CITY OF DUBUQUE, IOWA $2,935,000 General Obligation Bonds, Series 2009A $11,175,000 General Obligation Urban Renewal Bonds, Series 2009B $9,500,000 General Obligation Refunding Bonds, Series 2009C INTRODUCTION This Preliminary Official Statement contains information relating to the City of Dubuque, Iowa (the "City") and its issuance of $2,935,000 General Obligation Bonds, Series 2009A (the "Series 2009A Bonds"), $11,175,000 General Obligation Urban Renewal Bonds, Series 2009B (the "Series 2009B Bonds") and $9,500,000 General Obligation Refunding Bonds, Series 2009C (the "Series 2009C Bonds") (collectively the "Bonds"). This Preliminary Official Statement has been executed on behalf of the City by its Finance Director and may be distributed in connection with the sale of the Bonds authorized therein. Inquiries may be made to Public Financial Management, 2600 Grand Avenue, Suite 214, Des Moines, Iowa, or by telephoning (515) 243-2600. Information can also be obtained from Mr. Ken TeKippe, Finance Director, City of Dubuque, 50 West 13th Street, Dubuque, Iowa 52001, or by telephoning (563) 589-4133. AUTHORITY AND PURPOSE The Bonds are being issued pursuant to Division III of Chapter 384 and Chapter 403 of the Code of Iowa and resolutions to be adopted by the City Council of the City. The Series 2009A Bonds are being issued to provide funds to pay costs of the acquisition of sewer pipeline inspection equipment; the inspection and certification of the flood control levee system; the construction and installation of storm water management facilities, including the Bee Branch Creek Restoration Project, and the reconstruction of storm sewers; the acquisition and replacement of street lights; the acquisition and installation of fiber optic conduit in connection with street improvements and watermain extensions; the repair and improvement of the Dubuque Regional Airport, including hanger heater and terminal boiler replacements, runway and hanger painting, hanger repairs and replacements and parking area paving; the acquisition and replacement of Fire Department ladder and pumper trucks and ambulances; and water utility improvements including the construction and installation of watermain extensions, ADA improvements, back-up power supply and water consumption studies and engineering. The Series 2009B Bonds are being issued to provide funds to pay costs of aiding in the planning, undertaking and carrying out of urban renewal project activities under the authority of Chapter 403 of the Code of Iowa and the Amended and Restated Urban Renewal Plans for the Greater Downtown Urban Renewal District and the Dubuque Industrial Center West Economic Development District, including those costs associated with the construction of a multi-story public parking ramp located at 5th and Bluff Streets, and the construction of street, sewer, sidewalk, trail and other public infrastructure improvements within Dubuque Industrial Center West. The Series 2009C Bonds are being issued to provide funds to current refund on November 11, 2009 $7,325,000 of the outstanding General Obligation Bonds, Series 2001 dated December 15, 2001 and $2,080,000 of the outstanding General Obligation Bonds, Series 2002 dated December 15, 2002. The estimated Sources and Uses of the Bonds are as follows: Sources of Funds Series 2009A Bonds Par Amount of the Bonds $2,935,000.00 Series 2009B Bonds $11,175,000.00 Series 2009C Bonds $9,500,000.00 Uses of Funds Project Fund Deposit $2,822,219.00 Funds for Redemption of the Refunded Bonds 0.00 Capitalized Interest 57,436.25 Underwriter's Discount (estimated) 29,350.00 Cost of Issuance and Contingency 25,994.75 Total Uses $2,935,000.00 PAYMENT OF AND SECURITY FOR THE BONDS $10,800,000.00 0.00 218,688.21 111,750.00 44.561.79 $11,175,000.00 $0.00 9,405,000.00 0.00 61,750.00 33.250.00 $9,500,000.00 The Bonds constitute valid and binding general obligations of the City, and all taxable property within the corporate boundaries of the City is subject to the levy of taxes to pay the principal of and interest on the Bonds. If the amount credited to the debt service fund for payment of the Bonds is insufficient to pay principal and interest, whether from transfers or from original levies, the City must use funds in its treasury and is required to levy ad valorem taxes upon all taxable property in the City sufficient to pay the debt service deficiency without limit as to rate or amount. It is anticipated that the debt service on the Series 2009B Bonds will be abated with tax increment revenues from the City's Urban Renewal Areas. BOOK-ENTRY-ONLY SYSTEM The information contained in the following paragraphs of this subsection "Book-Entry-Only System" has been extracted from a schedule prepared by Depository Trust Company ("DTC') entitled "SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING BOOK-ENTRY-ONLY ISSUANCE. " The information in this section concerning DTC and DTC's book-entry system has been obtained fi•orn sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue. DTC, the world's largest securities depository, is alimited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants (the "Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtco,com and www.dtc.org. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security (the "Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other corrununications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co., nor any other DTC nominee, will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the Record Date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the Record Date identified in a listing attached to the Omnibus Proxy. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information fi•om the City or Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC, is the responsibility of the City or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to Remarketing Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to Remarketing Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book- entry credit of tendered Securities to Remarketing Agent's DTC account. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the City or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. FUTURE FINANCING The City anticipates issuing an SRF loan in the approximate amount of $10,275,000 in December 2009. LITIGATION The City is a defendant in an action brought in the Iowa District Court for Dubuque County (J. Thomas Zaber v. City of Dubarque), alleging that the gas, electric and cable television franchise fees imposed by the City are illegal because they constitute unauthorized taxes. This case has been certified as a class action with three subclasses defined as follows: (a) All persons or entities who paid a cable television franchise fee imposed by the City of Dubuque any time after September 5, 2001; (b) All persons or entities who paid a gas utility franchise fee imposed by the City of Dubuque any time after September 5, 2001; and (c) All persons or entities who paid an electric utility franchise fee imposed by the City of Dubuque any time after September 5, 2001. Plaintiffs seek a refund of all such franchise fees paid since September 5, 2001 through the date of judgment, pre- judgment interest from the time of the alleged wrongful collection of said franchise fees, post judgment interest as allowed by law and attorney fees as allowed by law. The claim generally is based on a 2006 decision by the Iowa Supreme Court (Kragnes v. City of Des Moines, 714 N.W.2d 632 (Iowa 2006)). In that case, the Iowa Supreme Court concluded that gas and electric franchise fees not reasonably related to the reasonable costs of inspecting, licensing, supervising, or otherwise regulating the activity that is being franchised constitute a tax which has been assessed in violation of Iowa Code Section 364.3(4). A number of other Iowa cities with similar gas, electric and/or cable television franchise fee ordinances in effect are facing similar claims. On May 26, 2009 the Governor signed Senate File 478 authorizing (prospectively) gas and electric franchise fees that do not exceed five percent of a franchisee's gross revenues, without regard to the city's cost of inspecting, supervising, and otherwise regulating the franchise. The City of Dubuque has ordinances in effect that impose gas and electric franchise fees on gross sales of natural gas and electricity within the City, and a franchise fee related to the sale of cable television. The franchise fees are expected to result in collections of approximately $ 1,497,421 during the 2008/2009 fiscal year, with total General Fund budgeted revenues for that year being approximately $47,591,944. This case is currently stayed in the District Court pending resolution of the plaintiffs' interlocutory appeal of the District Court's dismissal of their cable franchise fee claims. This is one of a set of cases the Iowa Supreme Court has consolidated on appeal regarding whether Section 8.5 of Senate File 554 (2007), which retroactively authorized and validated cable franchise fees previously collected by various cities, is constitutional. The parties have submitted their appellate briefs and oral argument occurred on January 21, 2009. The Iowa Supreme Court's ruling is expected later this year. 4 The City believes it has substantial defenses to the action and intends to contest the matter vigorously. There can be no assurance, however, that a future ruling by the Iowa Supreme Court in the litigation will not require the City and other cities with similar ordinances to reduce or eliminate their franchise fees. If the City is required to reduce or eliminate its franchise fees as a result of the foregoing litigation, City staff presently intends to recommend to the City Council that the City address the loss of franchise fee revenues by reducing or delaying discretionary capital improvements, reallocating costs to other funds, or adjusting property tax collections. The City is not aware of any other threatened or pending litigation affecting the validity of the Bonds or the City's ability to meet its financial obligations. DEBT PAYMENT HISTORY The City knows of no instance in which it has defaulted in the payment of principal or interest on its debt. LEGALITY The Bonds are subject to approval as to certain matters by Ahlers & Cooney, P.C. of Des Moines, Iowa as Bond Counsel. Bond Counsel has not participated in the preparation of this Preliminary Official Statement and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify, any of the financial or statistical statements, or data contained in this Preliminary Official Statement and will express no opinion with respect thereto. Forms of the legal opinions expected to be delivered at closing are set forth as Appendix A to this Preliminary Official Statement. TAX MATTERS -Tax Exempt Bonds Federal tax law contains a number of requirements and restrictions that apply to the Series 2009C Bonds and to any Series 2009A Bonds and Series 2009B Bonds for which the City does not make an election to have the "Build America Bond" provisions of Section 54AA of the Internal Revenue Code of 1986, as amended (the "Code") apply (together, the "Tax-Exempt Bonds"). These include investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of Tax-Exempt Bond proceeds and facilities financed with Tax-Exempt Bond proceeds, and certain other matters. The City has covenanted to comply with all requirements that must be satisfied in order for the interest on the Tax-Exempt Bonds to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the Tax-Exempt Bonds to become includable in gross income foi° federal income tax purposes retroactively to the date of issuance of the Tax- ExemptBonds. Subject to the City's compliance with the above-referenced covenants, under present law, in the opinion of Bond Counsel, interest on the Tax-Exempt Bonds (a) is excludable from gross income of the owners thereof for federal income tax purposes; (b) is not included as an item of tax preference in computing the federal alternative minimum tax imposed on individuals and corporations; and (c) in the case of the Series 2009A Bonds and Series 2009B Bonds only, is not taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. In the case of the Series 2009C Bonds, such interest is included in adjusted current earnings for the purpose of determining the federal alternative minimum tax for certain corporations. The interest on the Series 2009A Bonds and Series 2009C Bonds is not exempt from present Iowa income taxes. Interest on the Series 2009B Bonds will not be subject to the taxes imposed by Division II, "Personal Net Income Tax" and Division III, "Business Tax on Corporations" of Chapter 422 of the Iowa Code, but the interest thereon will be subject to the franchise tax imposed by Division V, "Financial Institutions" of Chapter 422 of the Iowa Code. Interest on the Series 2009B Bonds will be required to be included in "adjusted current earnings" to be used in computing "state alternative minimum taxable income" of corporations and financial institutions for purposes of Sections 422.23 and 422.60 of the Iowa Code, as amended. Ownership of the Tax-Exempt Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Tax-Exempt Bonds. Prospective purchasers of the Tax-Exempt Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. Prospective purchasers of the Tax-Exempt Bonds should be aware that ownership of the Tax-Exempt Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Bond Counsel will not express any opinion as to such collateral tax consequences. Prospective purchasers of the Tax-Exempt Bonds should consult their tax advisors as to collateral federal income tax consequences. Qualified Tax-Exempt Obligations The City will designate the Tax-Exempt Bonds as "qualified tax-exempt obligations" under Section 265(b)(3) of the Code, which affords banks and certain other institutions more favorable treatment of their deduction for interest expense than would otherwise be allowed under Section 265(b)(2) of the Code. Tax Accounting Treatment of Discount and Premium on Certain Tax-Exempt Bonds The initial public offering price of certain Tax-Exempt Bonds (the "Discount Bonds") may be less than the amount payable on such Tax-Exempt Bonds at maturity. An amount equal to the difference between the initial public offering price of a Discount Bond (assuming that a substantial amount of the Discount Bond of that maturity are sold to the public at such price) and the amount payable at maturity constitutes original issue discount to the initial purchaser of such Discount Bonds. A portion of such original issue discount allocable to the holding period of such Discount Bonds by the initial purchaser will, upon the disposition of such Discount Bonds (including by reason of their payment at maturity), be treated as interest excludable from gross income, rather than as taxable gain, for federal income tax purposes, on the same terms and conditions as those for other interest on the Tax-Exempt Bonds described above under "Tax Matters -Tax Exempt Bonds." Such interest is considered to be accrued actuarially in accordance with the constant interest method over the life of a Discount Bond, taking into account the semiannual compounding of accrued interest, at the yield to maturity on such Discount Bonds and generally will be allocated to an original purchaser in a different amount from the amount of the payment denominated as interest actually received by the original purchaser during the tax year. However, such interest may be required to be taken into account in determining the amount of the branch profits tax applicable to certain foreign corporations doing business in the United States, even though there will not be a corresponding cash payment. In addition, the accrual of such interest may result in certain other collateral federal income tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance companies, S corporations with "subchapter C" earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. Moreover, in the event of the redemption, sale or other taxable disposition of a Discount Bond by the initial owner prior to maturity, the amount realized by such owner in excess of the basis of such Discount Bonds in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Discount Bonds was held) is includable in gross income. Owners of Discount Bonds should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Discount Bonds. It is possible that, under applicable provisions governing determination of state and local income taxes, accrued interest on Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment. The initial public offering price of certain Tax-Exempt Bonds (the "Premium Bonds") may be greater than the amount of such Tax-Exempt Bonds at maturity. An amount equal to the difference between the initial public offering price of a Premium Bond (assuming that a substantial amount of the Premium Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes a premium to the initial purchaser of such Premium Bonds. The basis for federal income tax purposes of a Premium Bond in the hands of such initial purchaser must be reduced each year by the amortizable Tax-Exempt Bond premium, although no federal income tax deduction is allowed as a result of such reduction in basis for amortizable Tax-Exempt Bond premium. Such reduction in basis will increase the amount of any gain (or decrease the amount of any loss) to be recognized for federal income tax purposes upon a sale or other taxable disposition of a Premium Bond. The amount of premium which is amortizable each year by an initial purchaser is determined by using such purchaser's yield to maturity. Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable Tax-Exempt Bond premium on Premium Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds. TAXABILITY OF INTEREST -Taxable Build America Bonds In the opinion of Bond Counsel, under existing law, interest on any Series 2009A Bonds and Series 2009B Bonds for which the City makes an election to have the "Build America Bond" provisions of Section 54AA of the Code apply (hereinafter, collectively the "Taxable Bonds") will be includible in gross income of the owners thereof for federal income tax purposes. Any discussion of United States federal tax issues included in this Preliminary Official Statement is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding federal tax penalties that may be imposed on the taxpayer. Such discussions were written in connection with the promotion or marketing of any Taxable Bonds. Each taxpayer should seek advice from an independent tax advisor based on the taxpayer's particular circumstances. The following is a summary of certain United States federal income tax consequences resulting from the beneficial ownership of Taxable Bonds by certain persons. This summary does not consider all the possible federal income tax consequences of the purchase, ownership, or disposition of Taxable Bonds and is not intended to reflect the individual tax position of any beneficial owner. Moreover, except as expressly indicated, this summary is limited to those persons who purchase the Taxable Bonds at their issue price, which is the first price at which a substantial amount of the Taxable Bonds are sold to the public, and who hold Taxable Bonds as "capital assets" within the meaning of Section 1221 of the Code. This summary does not address beneficial owners that may be subject to special tax rules, such as banks, insurance companies, dealers in securities or currencies, purchasers that hold Taxable Bonds as a hedge against currency risks or as part of a straddle with other investments or as part of a "synthetic security" or other integrated investment (including a "conversion transaction") comprising the Taxable Bonds and one or more other investments, or United States owners that have a "functional currency" other than the United States dollar (Special Taxpayers). This summary is applicable only to a person ("United States Owner") who or which is the beneficial owner of Taxable Bonds and is (a) an individual citizen or resident of the United States, (b) a corporation created or organized under the laws of the United States or any State (including the District of Columbia), or (c) a person otherwise subject to federal income taxation on its worldwide income. This summary is based upon the United States tax laws and regulations currently in effect and as currently interpreted and does not take into account possible changes in the tax laws or the interpretations, any of which may be applied retroactively. It does not discuss the tax laws of any state, local, or foreign governments. Payments of Stated Interest In general, interest on the Taxable Bonds will be taxable as ordinary income at the time it is received or accrued, depending on the beneficial owner's method of accounting for tax purposes. Original Issue Discount If the stated redemption price at maturity of the Taxable Bonds exceeds their "issue price," such excess is treated as original issue discount ("OID") unless the amount of such excess is less than a specified de minimis amount (generally equal to 0.25% of the stated redemption price at maturity multiplied by the number of complete years to maturity). The issue price of the Taxable Bonds is the first price at which a substantial amount of the Taxable Bonds are sold to the public. With respect to an owner of the Taxable Bonds that purchases in the initial offering the Taxable Bonds issued with OID, the amount of an OID that accrues during any accrual period equals (a) the product of (i) the "adjusted issue price" of the Taxable Bonds at the beginning of the accrual period (which price equals the issue price of such Taxable Bonds plus the amount of an OID that has accrued on a constant-yield basis in all prior accrual periods minus the amount of any payments, other than "qualified stated interest," received on the Taxable Bonds in prior accrual 7 periods) and (ii) the yield to maturity of such Taxable Bonds (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of each accrual period), less (b) any qualified stated interest payable on the Taxable Bonds during such accrual period. The amount of OID so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period. An owner of the Taxable Bonds issued with OID must include in gross income for federal income tax purposes the amount of OID accrued with respect to each day during the taxable year that the owner owns the Taxable Bonds. Such an inclusion in advance of receipt of the cash attributable to the income is required even if the owner is on the cash method of accounting for United States federal income tax purposes. The amount of OID that is includible in an owner's gross income will increase the owner's tax basis in the Taxable Bonds. Such basis will be decreased by the amount of any payments other than qualified stated interest received on the Taxable Bonds. The adjusted tax basis in the Taxable Bonds will be used to determine taxable gain or loss upon a disposition (for example, upon a sale or retirement) of the Taxable Bonds. If the Taxable Bonds issued with OID are purchased by an owner for a cost that exceeds the adjusted issue price as of the purchase date and that is less than the stated redemption price at maturity of the Taxable Bonds, then the amount of OID that is deemed to accrue thereafter to the owner will be reduced to reflect the amortization of such excess ("acquisition premium") over the remaining life of the Taxable Bonds. Original Issue Premium Under the Code, an owner that purchases the Taxable Bonds for an amount in excess of their stated redemption price at maturity may elect to treat such excess as "amortizable bond premium," in which case the amount of interest required to be included in the owner's income each year with respect to interest on the Taxable Bonds will be reduced by the amount of amortizable bond premium allocable (based on the Taxable Bond's yield to maturity) to that year. If such an election is made, the amount of each such reduction in interest income will result in a corresponding reduction in the owner's tax basis in the Taxable Bonds. Any election to amortize bond premium is applicable to all taxable debt instruments held by the owner at the beginning of the first taxable year to which the election applies or thereafter acquired by the owner and may not be revoked without the consent of the Internal Revenue Service (the "Service"). Information Reporting and Back-up Withholding In general, information reporting requirements will apply with respect to payments to an owner of principal and interest (and with respect to annual accruals of OID) on the Taxable Bonds, and with respect to payments to an owner of any proceeds from a disposition of the Taxable Bonds. This information reporting obligation, however, does not apply with respect to certain owners including corporations, tax-exempt organizations, qualified pension and profit sharing trusts, and individual retirement accounts. In the event that an owner subject to the reporting requirements described above fails to supply its correct taxpayer identification number in the manner required by applicable law or is notified by the Service that it has failed to properly report payments of interest and dividends, a backup withholding tax (currently at a rate of 28%) generally will be imposed on the amount of any interest and principal and the amount of any sales proceeds received by the owner on or with respect to the Taxable Bonds. Any amounts withheld under the backup withholding provisions may be credited against the United States federal income tax liability of the beneficial owner, and may entitle the beneficial owner to a refund, provided that the required information is furnished to the Service. Disclaimer Regarding Federal Tax Discussion The federal income tax discussion set forth above is included for general information only and may not be applicable depending upon a beneficial owner's particular situation. Beneficial owners should consult their tax advisors with respect to the tax consequences to them of the purchase, ownership, and disposition of the Taxable Bonds, including the tax consequences under state, local, foreign, and other tax laws and the possible effects of changes in federal or other tax laws. State Tax Considerations In addition to the federal income tax consequences described above, potential investors should consider the state income tax consequences of the acquisition, ownership, and disposition of Taxable Bonds. State income tax law may differ substantially from the corresponding federal law, and the foregoing is not intended to describe any aspect of the income tax laws of any state. Therefore, potential investors should consult their own tax advisors with respect to the various state tax consequences of an investment in Taxable Bonds. RELATED TAX MATTERS The Service has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Tax Exempt Bonds or the Taxable Bonds. If an audit is commenced, under current procedures the Service may treat the City as a taxpayer and the bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Tax Exempt Bonds or the Taxable Bonds until the audit is concluded, regardless of the ultimate outcome. There are or may be pending in the Congress of the United States, legislative proposals, including some that carry retroactive effective dates, that, if enacted, could alter or amend the federal tax matters referred to in this section or affect the market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to Bonds issued prior to enactment. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal or state tax legislation. RATINGS The City has requested a rating on the Bonds from Moody's Investors Service, Inc. ("Moody's"). Currently, Moody's rates the City's outstanding long-term general obligation debt as `Aa2'. The existing rating on long-term debt reflects only the view of the rating agency and any explanation of the significance of such rating may only be obtained from Moody's. There is no assurance that such rating will continue for any period of time or that it will not be revised or withdrawn. Any revision or withdrawal of the rating may have an effect on the market price of the Bonds. FINANCIAL ADVISOR The City has retained Public Financial Management, Des Moines, Iowa as Financial Advisor in connection with the preparation of the issuance of the Bonds. In preparing the Preliminary Official Statement, the Financial Advisor has relied on government officials, and other sources to provide accurate information for disclosure purposes. The Financial Advisor is not obligated to undertake, and has not undertaken, an independent verification of the accuracy, completeness, or fairness of the information contained in the Preliminary Official Statement. Public Financial Management is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. 9 CONTINUING DISCLOSURE In order to permit bidders for the Bonds to comply with paragraph (b)(5) of the Rule, the City will covenant and agree, for the benefit of the Owners (as hereinafter defined) from time to time of the outstanding Bonds, in the resolution awarding the sale and prescribing the terms of the Bonds, and in a related certificate regarding disclosure, to provide annual reports of specified information and notice of the occurrence of certain material events as hereinafter described (the "Disclosure Covenants"). The City has complied in all material respects with its previous undertakings under the Rule. The City is the only "obligated person" in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure must be made. As used herein, "Owner" or "Bond Owner" means, in respect of a Bond, the registered owner or owners thereof appearing in the Bond register maintained by the Registrar or any beneficial owner thereof, if such owner provides to the Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the Registrar. See the form of Continuing Disclosure Certificates included in Appendix C of this Preliminary Official Statement. CERTIFICATION The City has authorized the dishibution of this Preliminary Official Statement for use in connection with the initial sale of the Bonds. I have reviewed the information contained within the Preliminary Official Statement prepared on behalf of the City by Public Financial Management, Des Moines, Iowa, and said Preliminary Official Statement does not contain any material misstatements of fact nor omission of any material fact regarding the issuance of $2,935,000 General Obligation Bonds, Series 2009A, $11,175,000 General Obligation Urban Renewal Bonds, Series 2009B and $9,500,000 General Obligation Refunding, Series 2009C. CITY OF DUBUQUE, IOWA /s/Ken TeKippe, Finance Director 10 c><TY PR®PERT~ vALUES IowA PROPERTY VALUATIONS In compliance with Section 441.21 of the Code of Iowa, the State Director of Revenue annually directs the county auditors to apply prescribed statutory percentages to the assessments of certain categories of real property. The Dubuque County Auditor adjusted the final Actual Values for 2008. The reduced values, determined after the application of rollback percentages, are the Taxable Values subject to tax levy. For assessment year 2008, the taxable value rollback rate was 45.5893% of Actual Value for residential property; 93.8568% of Actual Value for agricultural property; and 100% of Actual Value for commercial, industrial, railroad and utility property. The Legislature's intent has been to limit the growth of statewide Taxable Valuations for the specific classes of property to 4% annually. Political subdivisions whose Taxable Values are thus reduced or are unusually low in growth are allowed to appeal the valuations to the State Appeal Board, in order to continue to fund present services. 1/1/2008 VALUATIONS (Taxes payable July 1, 2009 to June 30, 2010) Taxable Value 100% Actual Value (With Rollback) Residential $2,215,763,936 $1,009,962,841 Commercial 768,443,592 768,443,592 Industrial 73,967,207 73,967,207 Railroads 2,571,981 2,571,981 Other 705,130 705,130 Utilities w/o Gas & Electric 9,274,461 9,274,461 Gross valuation $3,070,726,307 $1,864,925,212 Less military exemption (6 712,574) (6,712,574) Net valuation $3,064,013,733 $1,858,212,638 TIF increment (used to compute debt service levies and constitutional debt limit) $174,885,331 $174,885,331 Taxed separately Ag. Land & Buildings $2,699,520 $2,531,798 Gas & Electric Utilities $103,274,932 $77,454,113 2008 GROSS TAXABLE VALUATION BY CLASS OF PROPERTY Gross Taxable Valuation Residential $1,009,962,841 Gas & Electric Utilities 77,454,113 Commercial, Industrial, Utility and Other 852,390,390 Railroads 2,571,981 Total Gross Taxable Valuation l~ $1,942,379,325 '~ Excludes Taxable TIF Increment and Ag. Land & Buildings. Percent Total 52.00% 3.99% 43.88% 0.13% 100.00% 11 TREND OF VALUATIONS Assessment Payable Net Taxable Valuation Taxable Year Fiscal Year 100% Actual Valuation (With Rollback) TIF Increment 2004 2005-06 $2,778,419,008 $1,669,454,600 $114,635,711 2005 2006-07 2,909,988,480 1,721,363,436 138,074,878 2006 2007-08 2,978,362,258 1,762,000,629 134,777,658 2007 2008-09 3,272,412,812 1,878,770,648 148,458,171 2008 2009-10 3,344,873,516 1,935,666,751 174,885,331 The 100% Actual Valuations, before rollback and after the reduction of military exemption, include Ag. Land & Buildings, Taxable TIF Increment and Gas & Electric Utilities. The Taxable Valuations, with the rollback and after the reduction of military exemption, include Gas & Electric Utilities and exclude Ag. Land & Buildings and Taxable TIF Increment. Iowa cities certify operating levies against Taxable Value excluding TIF Increment and debt service levies are certified against Taxable Value including the TIF Increment. LARGER TAXPAYERS i> Tama, er 1~ Kennedy Mall Inc Medical Associates Realty LP Otto A LLC Nordstrom Inc The McGraw Hill Companies Inc Walter Development LLC Platinum Holdings LLC Minglewood Limited Partnership Asbury Dubuque LLC Lexington Dubuque LLC '~ Larger Taxpayers listed excludes Utilities. LEGISLATION Type of PropertyBusiness 1 /1 /2008 Taxable Valuation Commercial $ 26,371,900 Commercial 19,157,470 Industrial 17,500,000 Commercial 16,883,900 Commercial 11,437,200 Commercial 11,288,140 Commercial 11,178,500 Commercial 9,947,600 Commercial 9,896,100 Commercial 9,843,800 From time to time, legislative proposals are pending in Congress and the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters described herein. It cannot be predicted whether or in what forms any of such proposals, either pending or that may be introduced, may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for taxes levied by the City or have an adverse impact on the future tax collections of the City. Iowa Code section 76.2 provides that when an Iowa political subdivision issues general obligation debt that: "The governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an annual levy upon ail the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds within a period named not exceeding twenty years. A certified copy of this resolution shall be filed with the county auditor or the auditors of the counties in which the political subdivision is located; and the filing shall make it a duty of the auditors to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full." Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed federal tax legislation. The opinions expressed by Bond Counsel are based upon existing legislation as of the date of issuance and delivery of the Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending federal or state tax legislation. 12 CITY II~tDEBTEDIVES~ DEBT LIMIT Article XI, Section 3 of the State of Iowa Constitution limits the amount of debt outstanding at any time of any county, municipality or other political subdivision to no more than 5% of the Actual Value of all taxable property within the corporate limits, as taken from the last state and county tax list. The debt limit for the City, based on its 2008 actual valuation currently applicable to the fiscal year 2009-10, is as follows: 2008 Actual Valuation of Property $3,351,586,090 Less: Military Exemption (6,712,574) Net Actual Valuation of Property $3,344,873,516 Legal Debt Limit of 5% 0.05 Legal Debt Limit $167,243,676 Less: Outstanding G.O. Debt (54,735,000) Less: Urban Renewal Bonds and Notes (26,467,458) Net Debt Limit $85,713,614 DIRECT DEBT General Obligation Debt (Includes the Bonds) Principal Date Original Final Outstanding of Issue Amount Purpose Maturi As of 10/05/09 12/01 $9,500,000 Corporate Purpose's 6/09 $0 01/02 2,860,000 Corporate Purpose's 6/09 0 03/02B 1,000,000 Corporate Purpose 2~ 6/21 735,000 12/02C 3,105,000 Corporate Purpose & Refunding s~ 6/17 1,445,000 10/03 2,110,000 Corporate Purpose a> 6/23 1,595,000 04/OSA 1,750,000 Corporate Purpose a> 6/24 1,480,000 04/OSB 4,270,000 DICW 3rd Addition Urban Renewal z> 6/21 3,835,000 04/OSC 2,995,000 DICW 3rd Addition Urban Renewal z~ 6/16 2,115,000 OS/06A 2,900,000 Corporate Purpose 5~ 6/25 2,370,000 OS/06B 910,000 General Obligation Urban Renewal 6~ 6/21 775,000 OS/06C 3,525,000 Refunding ~~ 6/20 3,525,000 11/07A 1,055,000 General Obligation Sewer s> 6/17 955,000 11/07B 2,985,000 Refunding 7~ 6/17 2,985,000 10/08A 3,885,000 General Obligation Stormwater s> 6/28 3,785,000 10/08B 3,290,000 General Obligation Urban Renewal 2> 6/23 3,160,000 10/08C 2,465,000 General Obligation Urban Renewal (Taxable) 2~ 6/18 2,365,000 10/09A 2,935,000 Corporate Purpose 9> 6/29 2,935,000 10/09B 11,175,000 Corporate Purpose 6> 6/29 11,175,000 10/09C 9,500,000 Refunding10~ 6/21 9,500,000 Total Gene ral Obligation Debt $54,735,000 1) The 201 0-2021 maturities are being refunded by the 7) Paid by tax increment and airport hangar rental Series 2009C Bonds. revenues. 2) Paid by tax increment revenues. 8) Paid by sewer revenues. 3) Paid by water revenues. 9) Paid by local option sales tax, road use tax, property 4) Paid by stormwater and gaming revenues. tax, and Stormwater revenues. 5) Paid by stormwater reven ues. 10) Paid by tax inc rement and gami ng revenues. 6) Paid by tax increment and parking revenues. 13 Urban Renewal Revenue Debt Principal Date Original Final Outstanding of Issue Amount Purpose Maturi As of 10/05/09 3/99 $900,000 Advanced Data-Comm 6/11 $166,218 12/99 360,000 Categraph Systems 12/10 63,492 2/00 3,168,538 Eagle Window & Door 6/12 1,260,441 12/03 140,000 Vessel Systems 6/15 96,656 02/04 500,000 Adams Co. 6/15 272,727 06/04 182,000 Lower Main Development LLC 6/16 140,912 11/06 806,088 Theisen Supply, Inc. 6/18 751,483 10/07 23,025,000 Pont of Dubuque Parking Ramp 6/37 23,025,000 8/09 690,529 40 Main LLC 6/21 690,529 Total Urban Renewal Debt $26,467,458 14 'r~-+ V'1 O N t~ O .~ ~ d' ~i' [~ O N ~D O ~O ~O O cn M ~ _ ~ ~ O 00 t 'ci' O~ O N ~D [~ ~ ~ O N 00 ~O t~ O ~ O .-~ ~ ~ M N d• ~--~ lU O\ 00 M O M l~ cn oo l~ l~ d• ~O O~ ~n N _ N c0 d° [~ .~ vi Ui vi N ~n d~ `t ~t O c~ N oo N o0 ~ ~. ~ CO O 01 \p \p ~D ~!1 l~ N \O 00 M t~ l~ N N N d' d' d' ~ 00 cn N N d• d• et er ,--~ ~ ~ ~ r-+ •°+ t c~ M M c^ O ~ 'O A-a c+•i ~n ~n ~n vi vi vi vi vi d' d' M N N •-~ •~ ,--~ ,~ •-• •-~ ~ ~ ~ O '•~ ~ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O ~., ~ O O O O O O O O O O O O O O O O O O O O O i 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O ~ 'V ~ V) O O O O vi 0 0 0 0 V'1 O O O O ~ O ~ ® ~ ~ O '-+ M N O ~--~ ~n oo ~D ~ l~ d- d' N O~ cn •~ \O M ~ Vl 00 O~ O N O l~ O\ M l~ [~ d' '-+ ~ N N O ~ Q.,, N M M M M M d' ~ d' M M cn •--+ •--~ .•-i ~--~ '-°~ •--~ •--~ ~-+ ~ 64 ~ 69 ~-+ ~ ~ ~ N Vl cn M O O 00 M M M~ ~ ~ O~ 00 vl rt ~ ~ N O~ V7 O~ vl l0 "~ •~ r + O V1 61 ~ V"^ ~ M N ~D ~ M l C ~ H N M ~ N ~ Cn 00 .•-a ~ ~ U'1 M ' ) Vl M ~ ~ ~ d' d' ~f' O 6l t~ V a ~ 00 O 01 ~ 61 ~ ~ ~ O\ O\ ~ ~ U ~ 69 "" O O 0 0 0 0 0 0 0 0 0 0 0 0 p N ~ 0 0 0 0 0 0 0 0 0 0 0 0 O rn O O O O O O O O O O O O O ~ ~ V'i Vi O O N~ O vi X 0 0 O O S. 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V'i M O M [ ~ d' O d' vi O o0 •--i 00 CJ ~ ~ ~ ~ ~ Vl GO O\ 01 ~+ ~ O N l~ N N ~ O O~ O O\ A [~ d• d• d• ~O ~O ~O t~ M O~ ~ .--i ,-~ '-+ ~ M N cn N ~ ~ ~ ~ M M M M M cr1 M c!1 N N N '--~ ~ cd ~ ce , • i L '~ O O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O U ~ O O O O O O O O O O O O O O O O O O O O y o, y ~ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O r°'' O O~ 0 0 0 0 vi vi vi 0 0 0 0 0 0 0 vi v~ v1 U O ~ d- N O N d' ~ ~ ~ d- ~ N v'~ ~ 00 ~ ~ [~ 00 O O O •--~ N M ~D l~ oo O\ l~ d• v'~ ~ O~ O~ ~n N N N N N ~" ~ ~ N N N N N N N N N N ~+ cn ~ O ~--+ N M d' ~ ~O t~ 00 61 O .-. N M ~ ~ ~ ~ 00 d1 ~., .-~ .-+ .--~ .-+ .--~ ~--, .--~ ,~ .--~ N N N N N N N N N N i i ~ ~ ~ ~ ~ i i ~ ~ U y ~ ~ ~ ~ i i ~ ~ ~ ~ ~ 01 O ~--i N M d' vl ~D l~ 00 01 O .--~ N M d' ~/'~ ~O [~ 00 r"' (ay 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N b a~ .y W Urban Renewal Revenue Debt Outstanding Outstanding Fiscal Outstanding Principal & Fiscal Outstanding Principal & Year Principal Interest Year Principal Interest 2009-10 $690,015 $1,351,985 2023-24 $730,000 $2,011,000 2010-11 900,828 2,822,760 2024-25 785,000 2,011,250 2011-12 937,283 2,790,542 2025-26 845,000 2,012,375 2012-13 539,830 2,326,347 2026-27 910,000 2,014,000 2013-14 577,674 2,324,747 2027-28 975,000 2,010,750 2014-15 616,351 2,321,196 2028-29 1,050,000 2,012,625 2015-16 594,811 2,254,676 2029-30 1,130,000 2,013,875 2016-17 612,161 2,227,409 2030-31 1,215,000 2,014,125 2017-18 659,576 2,228,496 2031-32 1,305,000 2,013,000 2018-19 587,249 2,108,784 2032-33 1,400,000 2,010,125 2019-20 632,479 2,110,534 2033-34 1,505,000 2,010,125 2020-21 678,004 2,109,284 2034-35 1,620,000 2,012,250 2021-22 681,195 2,062,330 2035-36 1,740,000 2,010,750 2022-23 680,000 2,012,000 2036-37 1,870,000 2,010,250 Total $26,467,458 OTHER DEBT The City has revenue debt payable solely from the net parking revenues of the City's parking system: Principal Date Original Final Outstanding of Issue Amount Purpose Maturi As of 10/05/09 3/98 $2,515,000 Parking 5/10 $250,000 The City has revenue debt payable solely from the net water revenues of the City's water system: Date Original of Issue Amount Purpose 10/07 $1,037,000 Water Improvements (SRF) 10/08D 1,195,000 Water Improvements Total Principal Final Outstanding Maturi As of 10/05/09 6/28 $998,000 6/23 1,195,000 $2,193,000 The City has revenue debt payable solely from the net water revenues of the City's sewer system: Date Original of Issue Amount 1/09A $2,000,000 3/09B 3,200,000 Purpose Sewer Improvements (SRF) Sewer Interim Financing (SRF) Principal Final Outstanding Maturi As of 10/05/09 6/28 $2,000,000 3/12 3,200,000 Total $5,200,000 16 INDIRECT GENERAL OBLIGATION DEBT City's 1/1/2008 Percent Proportionate Taxing District Taxable Valuation's In Ci G.O. Debt z> Share Dubuque County $3,670,939,489 57.56% $940,000 $541,064 Dubuque Comm. School District 2,862,593,523 73.82% 0 0 Northeast Iowa Comm. College 8,738,776,128 24.18% 66,084,132 15,979,143 City share of total overlapping debt $16,520,207 1) Taxable valuation includes tax increment valuation. 2) Excludes revenue supported debt, tax and aid anticipation certificates and school energy loans. DEBT RATIOS Debt/Actual Market Value Debt/57,686 G.O. Debt ($3,344,873,516 Population Total General Obligation Debt $54,735,000 1.64% $948.84 City's share of overlapping debt $16,520,207 0.49% $286.38 LEVIES AND TAX COLLECTIONS Collected During Percent Fiscal Year Levy Collection Year Collected 2005/06 $16,229,000 $16,148,000 99.50% 2006/07 17,216,000 17,197,000 99.89% 2007/08 18,211,000 18,127,137 99.54% 2008/09 18,736,759 18,667,933 99.63% 2009/10 19,095,444 ---------------In Process of Collection _______________ Taxes in Iowa are delinquent each October 1 and April 1 and a late payment penalty of 1% per month of delinquency is enforced as of those dates. If delinquent taxes are not paid, the property may be offered at the regular tax sale on the third Monday of June following the delinquency date. Purchasers at the tax sale must pay an amount equal to the taxes, special assessments, interest and penalties due on the property and funds so received are applied to taxes. A property owner may redeem from the regular tax sale but, failing redemption within three years, the tax sale purchaser is entitled to a deed, which in general conveys the title free and clear of all liens except future tax installments. 17 TAX RATES Dubuque County City of Dubuque Dubuque Community School District Northeast Iowa Community College City Assessor County Ag. Extension Sunnycrest Manor County Hospital State of Iowa Total Tax Rate LEVY LIMITS FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 $/$1,000 $/$1,000 $/$1,000 $/$1,000 $/$1,000 6.08416 6.17924 6.42691 6.40844 6.40435 9.69910 9.98033 10.31690 9.96904 9.85777 15.09695 15.92538 16.40925 16.88112 16.87918 0.60517 0.61127 0.61270 0.55714 0.99471 0.32435 0.30221 0.32694 0.32436 0.28030 0.04037 0.03934 0.03841 0.03572 0.03298 0.23354 0.26247 0.26275 0.26744 0.26342 0.00400 0.00400 0.00350 0.00350 0.00300 32.08764 33.36475 34.39736 34.44676 34.71571 A city's general fund tax levy is limited to $8.10 per $1,000 of taxable value, with provision for an additional $0.27 per $1,000 levy for an emergency fund which can be used for general fund purposes (Code of Iowa, Chapter 384, Division I). Cities may exceed the $8.10 limitation upon authorization by a special levy election. Further, there are limited special purpose levies which may be certified outside of the above described levy limits (Code of Iowa, Section 384.12). The amount of the City general fund levy subject to the $8.10 limitation is $8.10 for FY 2009-10. The City does levy costs for tort liability and other insurance expense, for the operation and maintenance of publicly owned transit, and for employee benefits in addition to the $8.10 general fund limit as authorized by law. Currently, the City does not levy for an emergency fund. Debt service levies are not limited. FUNDS ON HAND (CASH AND INVESTMENTS AS OF AUGUST 31, 2009) Agency $ 1,136,041 Capital 10,583,411 Component Unit 10,583,987 Debt Service 3,802 Enterprise 12,601,436 General 13,152,043 Internal Service 3,419,601 Permanent 59,025 Special 9,493,095 Total Cash and Investments X61,032,441 18 T>FIE CITY CITY GOVERNMENT The City has been governed by aCouncil-Manager-Ward form of government since 1920. Policy is established by a Mayor and six council members, the mayor and two of the council members being elected at large and four members elected from wards. City Council members hold four year staggered terms. The City Clerk, City Manager and City Attorney are appointed by the City Council. EMPLOYEES; PENSIONS The City has 523 full and 160 permanent part-time employees and 291 seasonal employees, including a police force of 98 sworn personnel and a fire department of 88 fire fighters. Of the City's 974 employees, 535 are currently enrolled in the Iowa Public Employees Retirement System (IPERS) pension plan administered by the State of Iowa. The City is current in its obligation to IPERS, which has been as follows: $1,073,756 in FY 2006/07, $1,217,758 in FY 2007/08 and $1,384,779 in FY 2008/09. In addition, the City contributes to the Municipal Fire and Police Retirement System of Iowa (MFPRSI), a benefit plan administered by a Board of Trustees. MFPRSI provides retirement, disability and death benefits that are established by State statute to plan members and beneficiaries. Plan members are required to contribute 9.4% of their earnable compensation and the City's contribution rate is 17.0% of earnable compensation. The City is current in its obligation to MFPRSI, their contributions to MFPRSI for the last three years has been: $2,107,860 in FY 2008/09, $2,630,188 in 2008 and $2,736,569 in 2007. OTHER POST EMPLOYMENT BENEFITS In addition to providing pension benefits, the City offers health insurance benefits to its retirees. Retirees can purchase health insurance at the group rate cost. Health insurance for these retirees, while at the individual's own expense, is included within the City's overall insurance package. Therefore, a portion of the coverage is being subsidized by the City and its current employees. Based on the results of the City's actuarial study, it has been estimated that the City's accrued liability is $9,117,000 with an annual required contribution for FY 2009/10 of $945,000. INSURANCE The City's insurance coverage is as follows: Type of Insurance General Liability Automobile Liability Public Officials Police Professional Liability Boiler & Machinery Property Blanket Fidelity Bonds -All Employees City Manager, Finance Director, Budget Director, Assistant Finance Director Airport Commission Airport Liability Limits $12,000,000 $12,000,000 $12,000,000 $12,000,000 $2,500,000 $274,837,494 $100,000 Add'1$900,000 $5,000,000 $20,000,000 19 GENERAL INFORMATI®N LOCATION AND TRANSPORTATION The City, with a 2000 Census population of 57,686, has a land area of 29.5 square miles. Annexation activity in recent years has been voluntary with over 760 acres annexed in the past 5 years. The City lies at the intersection of Highways 61/151 and 20. The City is located approximately 16 miles northwest of Galena, Illinois; 65 miles north of the Quad Cities (Rock Island and Moline, Illinois and Bettendorf and Davenport, Iowa); 85 miles east of Waterloo, Iowa; 176 miles west of Chicago Illinois and 185 miles northeast of Des Moines, Iowa. The Dubuque Regional Airport is located 6.5 miles south of the City. The airline serving the City is American Eagle, providing all jet service to Chicago. The City is also served by three railroads, the Burlington Northern, I&M Rail Link and Chicago, Central and Pacific; and Greyhound provides bus service. LARGER EMPLOYERS A representative list of larger employers in the City is as follows: Employ John Deere Dubuque Works Dubuque Community School Dist. Hy-Vee Mercy Medical Center IBM Corp. City of Dubuque The Finley Hospital Eagle Window and Door Medical Associates Clinic, P.C. Prudential Retirement Dubuque County Flexsteel Industries, Inc. McKesson Holy Family Catholic Schools Thermo Fischer Scientific Dubuque Racing Association z> Quebecor World Dubuque Dubuque Bank & Trust Cottingham & Butler, Inc. Loras College A.Y. McDonald Mfg. Co. University of Dubuque Diamond Jo Casino Approximate Number Type of Business of Employ Manufacturing 1,800 Education 1,627 Grocery Stores 1,350 Health Care Services 1,324 Technology Services 1,300' City Government 974 Health Care Services 920 Manufacturing 750 Health Care Services 743 Retirement Administration 550 County Government 450 Manufacturing 450 Data Processing Services 425 Education 400 Laboratory Equipment Manufacturing 400 Entertainment 390 Printing Services 370 Banking 365 Insurance Services 360 Education 350 Manufacturing 345 Education 327 Entertainment 300 1) This new facility opened in July 2009. They are in the process of hiring and anticipate employing approximately 1,300 people. 2) D.B.A. Dubuque Greyhound Park & Casino Source: Greater Dubuque Development Corporation website as of September 2009 and the City. 20 BUILDING PERMITS City officials report the following construction activity as of August 31, 2009. Building permits are reported on a fiscal year basis. Commercial/ Fiscal Year Single Family Multi-Family Industrial Total Permits' Total Valuationl~ 2009/10 15 3 4 308 $8,532,602 2008/09 7 1 5 388 6,735,877 2007/08 62 14 38 1,490 170,518,137 2006/07 97 14 27 1,433 119,690,921 2005/06 82 20 26 1,154 90,882,968 2004/05 110 25 37 1600 162,184,384 '~ Totals include single family, multi-family, commerciaUindustrial, remodeling, roofing, siding, decks, additions and other miscellaneous residential and commercial permits. U.S. CENSUS DATA Population Trend 1980 U.S. Census 62,374 1990 U.S. Census 57,546 2000 U. S. Census 57,686 2008 U. S. Census Estimate 57,250 Source: U.S. Census Bureau website. UNEMPLOYMENT RATES Dubuque State of Coun Iowa Annual Averages: 2005 4.4% 4.3% 2006 3.8% 3.8% 2007 4.0% 3.7% 2008 4.3% 4.1% 2009 (Jan. -July) 6.2% 5.5% Source: Iowa Workforce Development Center website. EDUCATION Public education to the City is provided by the Dubuque Community School District, with an estimated enrollment of 10,812 for the 2008-2009 school year. There are approximately 1,650 full and part-time employees of the district. The Dubuque Community School District is comprised of two high schools, an alternative high school, three middle schools and thirteen elementary schools. 21 EFFECTIVE BUYING INCOME Effective Buying Income ("EBI") and Retails Sales for 2008 are reported as follows: Total Median Total Retail EBI ($000) Household EBI Sales $000) City of Dubuque $1,060,113 $35,743 $1,017,079 Dubuque County 1,775,083 39,097 1,483,931 State of Iowa 56,646,175 38,917 43,914,592 Source: Claritas, Inc. FINANCIAL SERVICES Retail Sales Per Household $43,228 40,578 36,567 Financial services for residents of the City are provided by American Trust and Savings Bank, Dubuque Bank and Trust Company, East Dubuque Savings Bank, Fidelity Bank & Trust, First Community Trust, N.A. and Premier Bank. The City is also serviced by branch offices of Liberty Bank, FSB, State Central Bank and US Bank N.A., as well as several credit unions. American Trust and Savings Bank, Dubuque Bank and Trust Company, East Dubuque Savings Bank and Premier Bank report the following deposits as of December 31st for each year: American Trust Year And Savin sg Bank 2004 $500,004,000 2005 570,883,000 2006 641,463,000 2007 655,032,000 2008 708,594,000 Dubuque Bank and East Dubuque Trust Company Savings Bank Premier Bank $579,895,000 $128,415,000 $113,911,000 608,688,000 144,987,000 138,385,000 636,489,000 167,004,000 161,764,000 670,219,000 169,022,000 166,891,000 749,192,000 162,683,000 186,858,000 Source: FDIC Institution Directory website. FINANCIAL STATEMENTS The City's Comprehensive Annual Financial Report for the fiscal years ending June 30, 2008 is reproduced in Appendix B. The City's certified public accountant has not consented to distribution of the audited financial statements and has not undertaken added review of their presentation. Copies of the complete Comprehensive Annual Financial Report may be obtained from Public Financial Management. 22 APPENDIX A FORMS OF LEGAL OPINIONS (This page has been left blank intentionally.) 1~t l~C\ `Jf ~~~ 1 y e 100 COURT AVENUE, SUITE 600 DES MOINES, IOWA 50309-2231 P HO N E:515-243-761 1 FAX:515-243-2149 W W W.AHLERSLAW.COM We hereby certify that we have examined a certified transcript of the proceedings of the City Council and acts of administrative officers of the City of Dubuque, Iowa (the "Issuer"), relating to the issuance of General Obligation Bonds, Series 2009A [(Taxable Build America Bonds)], by said City, dated the date of delivery, in the denomination of $5,000 or multiples thereof, in the aggregate amount of $2,935,000 ("[Taxable] Series 2009A Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion as bond counsel. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the Resolution authorizing issuance of the [Taxable] Series 2009A Bonds (the "Resolution") and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. We have not been engaged to or undertaken to review the accuracy, completeness or sufficiency of the preliminary Official Statement dated September , 2009, the Addendum thereto dated October , 2009, or any other offering material relating to the [Taxable] Series 2009A Bonds, and we express no opinion relating thereto. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we are of the opinion, under existing law, as follows: 1. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the [Taxable] Series 2009A Bonds. 2. The [Taxable] Series 2009A Bonds are valid and binding general obligations of the Issuer. W (SHARD 8. BAILY - 1888; GUERNSEY &BAILY - 1893; BAILY &STIPP - 1901 ;STIPP, PERRY, BANNISTER & STARZINGER - 1914; BANNISTER, CARPEMER, AHLERS & GOONEY- 1 950: AHLERS. GOONEY. DORWEILER, ALLBEE. HAYNIE & SMITH - 1974: AHLERS. GOONEY. DORWEILER. HAYNIE. SMITH &ALLBEE. P.C. Dubuque, Iowa $2,935,000 General Obligation Bonds, [Taxable] Series 2009A Page 2 3. All taxable property in the territory of the Issuer is subject to ad valorem taxation without limitation as to rate or amount to pay the [Taxable] Series 2009A Bonds. Taxes have been levied by the Resolution for the payment of the [Taxable] Series 2009A Bonds and the Issuer is required by law to include in its annual tax levy the principal and interest coming due on the [Taxable] Series 2009A Bonds to the extent the necessary funds are not provided from other sources. 4. The interest on the Series 2009A Bonds (a) is excludable from gross income of the owners thereof for federal income tax purposes; (b) is not included as an item of tax preference in computing the federal alternative minimum tax imposed on individuals and corporations; and (c) is not taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. We express no opinion regarding other federal income tax consequences caused by the receipt or accrual of interest on the Series 2009A Bonds. [4. The Issuer does not intend or represent that the interest on the Taxable Series 2009A Bonds will be excluded from gross income for federal income tax purposes, and the Issuer is not obligated to take any action to attempt to secure any such exclusion. THE HOLDERS OF THE TAXABLE SERIES 2009A BONDS THEREFORE SHOULD TREAT THE INTEREST THEREON AS BEING SUBJECT TO FEDERAL INCOME TAXATION. We express no opinion regarding other federal income tax consequences caused by the receipt or accrual of interest on the Taxable Series 2009A Bonds.] For the purpose of rendering the opinion set forth in paragraph numbered 4 above, we have assumed compliance by the Issuer with requirements of the Internal Revenue Code of 1986, as amended, that must be met subsequent to the issuance of the Series 2009A Bonds in order that interest thereon be and remain excluded from gross income for federal income tax purposes. Failure to comply with such requirements could cause the interest on the Series 2009A Bonds to be so included in gross income retroactive to the date of issuance of the Series 2009A Bonds. The Issuer has covenanted to comply with such requirements. Dubuque, Iowa $2,935,000 General Obligation Bonds, [Taxable] Series 2009A Page 3 It is to be understood that the rights of the holders of the [Taxable] Series 2009A Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Respectfully submitted, DCORNELL/ 630612.1 /MSWord\10422.092 A ~i l~l \ ~J_, ~~ 1 y ~a ~d• 100 COURT AVENUE, SUITE 600 DES MOINES, IOWA 50309-2231 PHONE: 515-243-761 1 FAX: 515-243-2149 WWW.AHLERSLAW.COM We hereby certify that we have examined a certified transcript of the proceedings of the City Council and acts of administrative officers of the City of Dubuque, Iowa (the "Issuer"), relating to the issuance of General Obligation Urban Renewal Bonds, Series 2009B [(Taxable Build America Bonds)], by said City, dated the date of delivery, in the denomination of $5,000 or multiples thereof, in the aggregate amount of $11,175,000 (the "[Taxable] Series 2009B"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion as bond counsel. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the Resolution authorizing issuance of the [Taxable] Series 2009B Bonds (the "Resolution") and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. We have not been engaged to or undertaken to review the accuracy, completeness or sufficiency of the preliminary Official Statement dated September , 2009, the Addendum thereto dated October , 2009, or any other offering material relating to the [Taxable] Series 2009B Bonds, and we express no opinion relating thereto. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we are of the opinion, under existing law, as follows: 1. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the [Taxable] Series 2009B Bonds. 2. The [Taxable] Series 2009B Bonds are valid and binding general obligations of the Issuer. W ISHARD & GAILY - 1888; GUERNSEY &BAILY- 1893; BAILY $. STIPP - 1901 ;STIPP, PERRY, BANNISTER $. STARZINGER - 1914; BANNISTER, CARPENTER, AHLERS & GOONEY- 1950: AHLERS. GOONEY. DORWEILER. ALLBEE. HAYNIE & SMITH - 1974: AHLERS. GOONEY. DORWEILER. HAYNIE. SMITH &ALLBEE. P.C. Dubuque, Iowa $11,175,000 General Obligation Urban Renewal Bonds, [Taxable] Series 2009B Page 2 3. All taxable property in the territory of the Issuer is subject to ad valorem taxation without limitation as to rate or amount to pay the [Taxable] Series 2009B Bonds. Taxes have been levied by the Resolution for the payment of the [Taxable] Series 2009B Bonds and the Issuer is required by law to include in its annual tax levy the principal and interest coming due on the [Taxable] Series 2009B Bonds to the extent the necessary funds are not provided from other sources. 4. The interest on the Series 2009B Bonds (a) is excludable from gross income of the owners thereof for federal income tax purposes; (b) is not included as an item of tax preference in computing the federal alternative minimum tax imposed on individuals and corporations; and (c) is not taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. We express no opinion regarding other federal income tax consequences caused by the receipt or accrual of interest on the Series 2009B Bonds. [4. The Issuer does not intend or represent that the interest on the Taxable Series 2009B Bonds will be excluded from gross income for federal income tax purposes, and the Issuer is not obligated to take any action to attempt to secure any such exclusion. THE HOLDERS OF THE TAXABLE SERIES 2009B BONDS THEREFORE SHOULD TREAT THE INTEREST THEREON AS BEING SUBJECT TO FEDERAL, INCOME TAXATION. We express no opinion regarding other federal income tax consequences caused by the receipt or accrual of interest on the Taxable Series 2009B Bonds.] 5. Interest on the [Taxable] Series 2009B Bonds is exempt from the taxes imposed by Division II (Personal Net Income Tax) and Division III (Business Tax on Corporations) of Chapter 422 of the Code of Iowa, as amended (the "Iowa Code"); it should be noted, however, that interest on the [Taxable] Series 2009B Bonds is required to be included in adjusted current earnings to be used in computing the "state alternative minimum taxable income" of corporations and financial institutions for purposes of Sections 422.33 and 422.60 of the Iowa Code. Interest on the [Taxable] Series 2009B Bonds is subject to the taxes imposed by Division V (Taxation of Financial Institutions) of Chapter 422 of the Iowa Code. We express no opinion regarding other State tax consequences arising with respect to the [Taxable] Series 2009B Bonds. Dubuque, Iowa $11,175,000 General Obligation Urban Renewal Bonds, [Taxable] Series 2009B Page 3 For the purpose of rendering the opinion set forth in paragraph numbered 4 above, we have assumed compliance by the Issuer with requirements of the Internal Revenue Code of 1986, as amended, that must be met subsequent to the issuance of the [Taxable] Series 2009B Bonds in order that interest thereon be and remain excluded from gross income for federal income tax purposes. Failure to comply with such requirements could cause the interest on the Series 2009B Bonds to be so included in gross income retroactive to the date of issuance of the Series 2009B Bonds. The Issuer has covenanted to comply with such requirements. It is to be understood that the rights of the holders of the [Taxable] Series 2009B Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Respectfully submitted, DCORNELL/630616.1 /MSWord\10422.092 (This page has been left blank intentionally.) 100 COURT AVENUE, SUITE 600 DES MOINES, IOWA 50309-2231 PHONE: 515-243-761 1 FAX:515-243-2149 W W W.AHLERSLAW.COM We hereby certify that we have examined a certified transcript of the proceedings of the City Council and acts of administrative officers of the City of Dubuque, Iowa (the "Issuer"), relating to the issuance of General Obligation Refunding Bonds, Series 2009C, by said City, dated the date of delivery, in the denomination of $5,000 or multiples thereof, in the aggregate amount of $9,500,000 (the "Series 2009C Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion as bond counsel. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the Resolution authorizing issuance of the Series 2009C Bonds (the "Resolution") and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. We have not been engaged to or undertaken to review the accuracy, completeness or sufficiency of the preliminary Official Statement dated September , 2009, the Addendum thereto dated October , 2009, or any other offering material relating to the Series 2009C Bonds, and we express no opinion relating thereto. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we are of the opinion, under existing law, as follows: 1. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the Series 2009C Bonds. 2. The Series 2009C Bonds are valid and binding general obligations of the Issuer. W ISHARD & GAILY - 1888; GUERNSEY &BAILY - 1$93; BAILY &STIPP - 1901; STIPP, PERRY, BANNISTER S. STARZINGER- 1914; BANNISTER, CARPEMER, AHLERS & GOONEY- 1950: AHLERS. GOONEY. DORWEILER. ALLBEE. HAYNIE & SMITH - 1974: AHLERS. GOONEY. DORWEILER. HAYNIE. SMITH &ALLBEE. P.C. Dubuque, Iowa $9,500,000 General Obligation Refunding Bonds, Series 2009C Page 2 3. All taxable property in the territory of the Issuer is subject to ad valorem taxation without limitation as to rate or amount to pay the Series 2009C Bonds. Taxes have been levied by the Resolution for the payment of the Series 2009C Bonds and the Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Series 2009C Bonds to the extent the necessary funds are not provided from other sources. 4. The interest on the Series 2009C Bonds is excluded from gross income for federal income tax purposes and interest on the Series 2009C Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is included in adjusted current earnings for the purpose of determining the alternative minimum tax imposed on such corporations. We express no opinion regarding other federal income tax consequences caused by the receipt or accrual of interest on the Series 2009C Bonds. For the purpose of rendering the opinion set forth in paragraph numbered 4 above, we have assumed compliance by the Issuer with requirements of the Internal Revenue Code of 1986, as amended, that must be met subsequent to the issuance of the Series 2009C Bonds in order that interest thereon be and remain excluded from gross income for federal income tax purposes. Failure to comply with such requirements could cause the interest on the Series 2009C Bonds to be so included in gross income retroactive to the date of issuance of the Series 2009C Bonds. The Issuer has covenanted to comply with such requirements. It is to be understood that the rights of the holders of the Series 2009C Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Respectfully submitted, DCORNELL/ 630618.1 /MSWord\10422.092 APPENDIX ~ JUNE 30, 2008 COMPREHENSIVE ANNUAL FINANCIAL REPORT (This page has been left blank intentionally.) COIVIPREHEI~TSIVE A~1UAL FII~Al\TCIAL REPORT FOR TIE FISCAL YEAR EAIDED JUI~TE 30, 200 CITY OF DUBUQUE, IOWA Prepared by: Department of Finance II~TI~®DUCTORX SECTIOI~1 CITY OF DUBUQiJE, IOWA CITY OF DUBUQUE, IOWA Table of Contents Exhibit PaEe INTRODUCTORY SECTION Table of Contents 1-2 Letter of Transmittal 3-9 City Organizational Chart 10 Officials 11 Certificate of Achievement for Excellence in Financial Reporting 12 FINANCIAL SECTION Independent Auditor's Report 13-14 Management's Discussion and Analysis 15-22 Basic Financial Statements Government-wide Financial Statements Statement of Net Assets 1 23-24 Statement of Activities 2 25 Fund Financial Statements Balance Sheet -Governmental Funds 3 26 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 3-1 27 Statement of Revenues, Expenditures, and Changes in Fund Balances -Governmental Funds 4 28 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 4-1 29 Statement of Net Assets -Proprietary Funds 5 30-31 Statement of Revenues, Expenses, and Changes in Fund Net Assets (Deficit) -Proprietary Funds 6 32 Statement of Cash Flows -Proprietary Funds 7 33-34 Statement of Fiduciary Assets and Liabilities 8 35 Notes to Financial Statements 36-60 Required Supplementary Information Schedule of Receipts, Expenditures, and Changes in Balances -Budget and Actual (Budgetary Basis) -Governmental Funds and Enterprise Funds 61 Notes to Required Supplementary Information -Budgetary Reporting 62 Combining Fund Statements Combining Balance Sheet-Nonmajor Governmental Funds A-1 63-64 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -Nonmajor Governmental Funds A-2 65-66 Combining Statement of Net Assets -Nonmajor Enterprise Funds B-1 67 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets -Nonmajor Enterprise Funds B-2 68 Combining Statement of Cash Flows -Nonmajor Enterprise Funds B-3 69-70 Combining Statement of Net Assets -Internal Service Funds C-1 71 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets (Deficit) -Internal Service Funds C-2 72 Combining Statement of Cash Flows -Internal Service Funds C-3 73 Combining Statement of Changes in Assets and Liabilities -Agency Funds D-1 74 CITY OF DUBUQUE, IOWA Table of Contents Table Page STATISTICAL SECTION (Unaudited) Statistical Section 75 Financial Trends Net Assets by Component 1 76 Changes in Net Assets 2 77-78 Fund Balances of Governmental Funds 3 79 Changes in Fund Balances of Governmental Funds 4 80 Revenue Capacity Taxable and Assessed Value of Property 5 81 Property Tax Rates -Direct and Overlapping Governments 6 82 Principal Property Taxpayers 7 83 Property Tax Levies and Collections 8 84 Debt Capacity Ratios of Outstanding Debt by Type 9 85 Ratios of General Bonded Debt Outstanding 10 86 Direct and Overlapping Governmental Activities Debt 11 87 Legal Debt Margin Information 12 88 Revenue Bond Coverage -Parking Bonds 13 89 Water and Sewer Receipt History 14 90 Water Meters by Rate Class 15 91 Largest Water and Sewer Customers 16 92 Demographic and Economic Information Demographic and Economic Statistics 17 93 Principal Employers 18 94 Full-Time Equivalent City Government Employees by Function/Department 19 95 Operating Information Operating Indicators by Function/Program 20 96 Capital Asset Statistics by Function/Program 21 97 COMPLIANCE SECTION Report on Internal Control over Financial Reporting and on Compliance and other Matters Based on an Audit of Financial Statements Performed in Accordance with GovernmentAarditing Standards 98-99 Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 100-101 Schedule of Expenditures of Federal Awards 102-104 Notes to the Schedule of Expenditures of Federal Awards 105 Schedule of Findings and Questioned Costs 106-108 2 ®UbUgU@ Finance Department ,; '; ,; , 50 West 13th Street All-AmericaGity Dubuque, Iowa 52001-4805 r Office (563) 589-4133 Fax (563) 589-6689 ® TTY (563) 690-6678 financeQcityofdubuque.org 2007 www.cityofdubuque.org December 16, 2008 Honorable Mayor, City Council Members, and Citizens of the City of Dubuque The Comprehensive Annual Financial Report (CAFR) of the City of Dubuque, Iowa, for the fiscal year ended June 30, 2008, is hereby submitted as required by various state and federal regulations. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects, and is reported in a lilanner 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. State code 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 2008. 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 U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. Information related to this single audit, including the Schedule of Expenditures of Federal Awards, findings and recommendations, and the auditor's report on internal control over fmancial 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. This report includes all funds of the City of Dubuque, as well as its component unit. Component units are legally separate entities for which the City of Dubuque is financially accountable. 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, municipal airport, library, recreational activities and cultural events. In addition to general government activities, the municipality owns and operates enterprises for a water system, water pollution control facility, stormwater system, Service People Integrity Responsibility Innovafion Teamwork parking facilities, refuse collection, and public transportation. Also, the governing body is financially accountable for the operations of the Dubuque Library Board, Airport Commission, Civic Center Commission, Cable TV Commission, Transit Board, and the Park and Recreation Commission. These activities are not legally separate entities, and therefore, are included in the reporting entity. This report includes the Dubuque Metropolitan Area Solid Waste Agency (DMASWA) as a discretely presented component unit. The 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 of Dubuque appoints a voting majority to the DMASWA governing board and operates the landfill. 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 report of the independent auditors. PROFILE OF THE GOVERNMENT The City of Dubuque is located on the Mississippi River in northeast Iowa, adjacent to the states of Illinois and Wisconsin. Julien Dubuque 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 cable cars, Victorian architecture, and a Civil War era shot tower, to an enclosed shopping mall, riverboat casino, a parrmutuel dog track with a casino and the National Mississippi Raver Museum and Aquarium (a Smithsonian affiliate). Dubuque has a stable and diversified business or economic base and is the major tri-state retail center. Employment growth was strong throughout the year, as Dubuque ended the fiscal year with an unemployment rate of approximately 3.54 percent. The City of Dubuque currently has a land area of 29.94 square miles, and a census 2000 population of 57,686. 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. The City of Dubuque is empowered to levy a property tax on real property located within the City limits. The City has operated under acouncil-manager form of government since 1920. Policymaking and legislative authorities are vested in the governing council, which consists of a mayor and asix-member council. The governing council is responsible for, among other things, setting policy, passing ordinances, adopting the budget, appointing committees, and hiring the City Manager, Corporation Counsel, 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. The council is elected on anon-partisan basis. Council members are elected to four-year staggered terms with three council members elected every two years. The mayor is elected to a four-year term. Four of the council members are elected within their respective wards; the mayor and the two remaining council members are elected at large. >ECOI~o~rrc co~>D><T><o~t Significant continued development in the Port of Dubuque has begun or is in final planning stages. Projects include: a $32 million expansion by the National Mississippi River Museum and Aquarium; an $80 million Diamond Jo Casino entertainment expansion; a $60 million Briggs/ Durrant mixed-use development project; an $S million renovation of City-owned Dubuque Star Brewery by a private developer for office, restaurant, and retail use (complete), and a new $20 million City parking ramp. The $32 million McGraw-Hill Higher Education office building and the LEED-certified remodeling of the former Adams facility by Durrant were completed in August 2007 and April 2008, respectively. Development of the Dubuque Industrial Center West continues with several business expansions underway, including: Kendall/Hunt Publishing (80,000 square foot distribution center); Art's Way Manufacturing; National Dentex; Giese Manufacturing; Dubuque Screw Products; Hormel Foods (340,000 square foot food processing plant); Medline Industries (67,100 square foot office building); ITC Development; Vanguard Countertops (30,200 square foot fabrication building); and Theisen Supply. Many of these projects were completed as of October 2008 with the exceptions of Medline, Vanguard, and Hormel. . The Dubuque Technology Park on the south side of the City had three new facilities completed in 2007 which added 230 new jobs and $6,000,000 of capital investment (Kunkel, Bounds, and Associates, Sedgwick CMS/Straka Johnson Architects, and Entegee Engineering). Downtown development continues at a brisk pace with the following projects: the $7 million expansion by Cottingham and Butler, which will add 90 new jobs and is scheduled to be completed in October 2008; a $1.5 million restoration of the historic German Bank building was completed in January of 2008; renovation of the former Hartig Drug Stores fora $2.5 million expansion of McGladrey & Pullen CPA's Dubuque Office was completed in late 2007, and the renovation of the former Interstate Power Company headquarters is scheduled to be completed in December 2008. A $6.2 million renovation project at the Carnegie Stout Public Library is scheduled to begin in early 2009. Conversion of the former Dubuque Casket Factory, a $6 million project, was completed in spring 2007. The project included 36 apartments and offices for Crescent Community Health Center and Project Concern, a Gronen Restoration project. The Washington Neighborhood revitalization strategy includes more than $2 million public-private partnership in lending activities to promote home ownership. . The City Council approved a Revitalization Strategy for the Warehouse District in August 2007. The strategy defines six primary goals to be achieved in rehabilitating the area. The revitalization is expected to amount to $200 million in investment from private and public sectors over the next ten years. A master plan for the redevelopment of the district is expected to be completed by early 2009. Other major construction projects include completion of the new Athletic and Wellness Center at Loras College m November 2007 and the University of Dubuque Chlapaty Recreation and Wellness Center, which opened in the Fall of 2008. In September 2008, Loras College also proposed construction of the 32 dwelling unit Oaks Housing project on the north side of the campus. Walgreens has begun construction of a new store at the intersection of 20~' and Elm Street and will serve as their third location in Dubuque. Additionally, Holiday Inn Express has broken ground on a new hotel on Holliday Drive on the west side of town. Construction has also begun on two new residential subdivisions. Pebble Cove #1 and #2, located near the southwest corner of the Northwest Arterial and John F. Kennedy Road, will provide 46 new building lots for single and two-family homes. English Ridge subdivision, located east of the intersection of U.S. 20 and Stone Valley Drive, will create 45 single-family lots. A third new subdivision named North Fork Trails is close to being approved. North Fork Trails will provide 17 building lots for two-family homes and will incorporate sustainable land management and building construction practices on an infill site located at the end of Keymont Drive. Demolition was recently completed on the former meat packing plant, opening 30 acres for future retail development on the Highway 151 /61 corridor. Nearly all of the materials from the former facility have been recycled. The City continues to receive awards and recognition from a variety of sources including: • 2008 Most Livable Small City in the U.S., by the U.S. Conference of Mayors; • One of the 2008 & 2007 100 Best Communities for Young People, by America's Promise Alliance for Youth; • 2007 All-America City, by the National Civic League; • Ranked 22nd among the "Top 25 Boomtowns" in the nation, by Inc. magazine in May 2007; • 2006 Iowa Great Place, by the Iowa Department of Cultural Affairs Citizen Advisory Board; • Ranked 22°d for job growth among 387 U.S. cities between 2005 and October 2006, by Moody'sBconomy.com; and • Ranked 18th in nation in 2008's "Best Small Places for Business and Careers", by Forbes magazine. The operation of an expanded land-base Diamond Jo Casino in December, 2008 may have a negative impact on City revenue from Dubuque Greyhound Park and Casino. However, a plan to address this impact was approved by the City Council as part of the FY 2009 budget process. 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 citizens of Dubuque within the budget guidelines set by the Mayor and City Council. 6 The Dubuque Regional Airport inaugurated service from Northwest Airlines through their Minneapolis, MN hub beginning in June 2008. This service is in addition to the regional jet service from American Airlines through their Chicago hub. The land required to support the new airline terminal as depicted in the FAA approved Airport Layout Plan has entered the eminent domain, phase and final disposition of the land should be resolved in 2009. This action will lead to the funding and implementation of the planned airport expansion and upgrade. The City continues to implement components of the $38 million Drainage Basin Master Plan. The $4 million West 32°d Street Detention Basin Project and $32 million. Bee Branch Creek Restoration Project have involved significant property acquisitions and engineering design to date. Additionally, the City has begun a comprehensive study to provide added capacity for traffic flow and improved connectivity between the western growth areas and the downtown area. Currently the US 20 Corridor serves as the single primary route for east-west travel in the City. Beginning in 2006, the Dubuque City Council identified Green City Designation as one of its top priorities. Since then, many initiatives have been underway to make Dubuque a more sustainable community. The City is in the process of completing several projects that will help it achieve the Council's goal. These include participation in the Sustainable Design Assessment Team program, preparation of the Unified Development Code, completion of a green resources and energy use profile, and a variety of neighborhood-based green initiatives. 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 citizens through neighborhood vitality. The City staff will work to implement the City Council's vision that Dubuque is a "Masterpiece on the Mississippi." 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: • Improved Connectivity: Transportation and Telecommunications, • Diverse, Strong Dubuque Economy • Planned and Managed Growth • Partnering for a Better Dubuque ® Sustainable City 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. The internal controls are designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. 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. The results of the government's single audit for the fiscal year ended June 30, 2008, provided no instances of material weaknesses in internal control over compliance, or significant violations of 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 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 $3,926,402 for 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. Accordingly, deposits were either covered by federal depository insurance or collateralized. All collateral on uninsured deposits was held either by the State Treasurer, the government, its agent, or a financial institution's trust department in the government's name. All of the investments subject to risk categorization were classified in the category of lowest credit risk as defined by the Governmental Accounting Standards Board. The non-classified investments include mutual funds. 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. Worker's compensation coverage up to $450,000 for each accident is provided through self- insurance. The accumulated reserve provision for such claims reflected a $119,142 deficit as of 8 June 30, 2008. Provision for three large claims were accrued at fiscal year end with funds to cover payment available in next fiscal year. The City has also established aself-insurance plan for medical, prescription drug, and short-term disability. The accumulated reserve provision for such claims equaled $3,334,742 as of June 30, 2008. All self-insured health plans are certified as actuarially sound and certificates of compliance have been filed with the State of Iowa. Bond Rating. The rating for the City's outstanding general obligation bonded debt was upgraded by Moody's Investors Service to "Aa2" from a previous rating of "Aa3" in September 2003. This upgrade was due in part to the City's sound financial position, anticipated growth of the City's tax base, and low overall debt burden. The rating was continued for bonds issued since 2003. 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, 2007. This was the 20th 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. We believe our current comprehensive annual fmancial report continues to meet the Certificate of Achievement program requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. The Government Finance Officers Association of the United States and Canada (GFOA} awarded a Certificate of Recognition for Budget Preparation to the City of Dubuque, Iowa, for its annual budget for the fiscal year ended June 30, 2008. In addition we received the award for the fiscal year ending June 30, 2009. 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 fmancial plan and as a communications device. This award is valid for a period of one year. Acknowledgments. We compliment the staff of the Finance Department for their assistance in preparing this report. We also commend the Mayor and City Council and all department and division managers 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, f~ (/ C ~~! Michael C. Van Milligen Kenneth J. TeKippe, CPA City Manager Finance Director 9 V ti V J 1~ L 0 a U ~N 03 ~ v iC O ° ~ p Q ,~ m C ~ V ~ ~ ~ d U V c 0 .G .u .~ Q1 v Q1 ~ ~ 4 ~ ~ ~' ~ o ~ c ~ -• ~ ~ ~ ~ ~ m ~ ~- Q o r~ ~ avE ~ ~ ® ~ ~ ~- O ~ C1 ~ +N+ di ~ ~ a d ar ~' y ~ atS m ; 3 ~ E ~ 'C a ~ ~N ~ O ~ QY 7 ~ ~ ~ ~ ~ m ~ a C ~ ~ E CA +" L m ~•~ R ~ C _~~ •~~ W ~ ~ U 07 Qf ~ G7 ~ LL (0 a7 N Q ~ ~ ~ ~'" d ~ t1 C ~ ~ ~ ~ d C ~ ~ ® C Cy ~ ~~ ~~ ~ ~ ~ ~ C ~ ~ ~C ~ ~ C v ° E e v m ~ m ~ ~ ~ m ~ y~ fA ~ g ® Q~ ~ ~ U! R? ' 3G ~ W ® ® d ~ N QS U ~ +• ~ m w ~ ~' a y ~ ~` ~° t} C a i ` ~ Ud V ' 3~ ~ ~ ~ Q 1~ 0 c~ CITY ®F' tJ~IJ~iJE, I®WA OFFICIALS JUNE 30, 2005 CITY COUNCIL Roy D. Buol Richard W. Jones David T. Resnick Kevin J. Lynch Karla A. Braig Joyce E. Connors Dirk N. Voetberg Mayor Council Member - At Large Council Member - At Large Council Member- lst Ward Council Member - 2nd Ward Council Member - 3rd Ward Council Member - 4th Ward COUNCIL APPOINTED OFFICIALS Michael C. Van Milligen Barry A. Lindahl Crenna M. Brumwell-Sahm James A. O'Brien Jeanne F. Schneider City Manager City Attorney Assistant City Attorney Assistant City Attorney City Clerk DEPARTMENT MANAGERS Robert A. Grierson Therese H. Goodmann Cynthia M. Steinhauser Jenny M. Larson Richard R. Russell David J. Heiar Kenneth J. TeKippe E. Daniel Brown Mary Rose Corrigan David W. Harris, Jr. Kelly R. Larson Randall K. Peck Christine A. Kohlmann Gil D. Spence Susan A. Henricks Donald J. Vogt Laura B. Carstens Kim B. Wadding Gus N. Psihoyos Robert M. Green Jonathan R. Brown Airport Manager Assistant City Manager Assistant City Manager Budget Director Building Services Manager Economic Development Director Finance Director Fire Chief Health Services Manager Housing and Community Development Manager Human Rights Director Personnel Manager Information Services Manager Leisure Services Manager Library Director Public Works Director Planning Services Manager Police Chief Public Works Director Water Department Manager Water Pollution Control Plant Manager 11 City of Dubuque Iowa For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2007 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual fmancial reports (CAFRs) achieve the highest standards in government accounting and fmancial reporting, 12 FII`TAl~tCIAL SECTI®I~t CITY OF DUBUQUE, IOWA /'ey `~ l~LL~' ~.l ~M1., ~~ i:i.~~: ~ eG;tar~::;:~l,v~~~,~.; INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of Dubuque, Iowa We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Dubuque, Iowa, (the City) as of and for the year ended June 30, 2008, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the management of the City of Dubuque, Iowa. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Dubuque, Iowa, as of June 30, 2008, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated December 16, 2008, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with GovernmentAzrditing Standards and should be considered in assessing the results of our audit. PEGPLE. PRINCIPLES. POSSIBILITIES. 13 www.eiclek~c~illy.corr7 3444 Pennsylvonia A~~e., Ste, i 00 F Qul~uque, Iowa 52C1p2-2273 i Phone 583.556. f 7441 Fast 583.557.78A2 ~ Et>E The management's discussion and analysis and budgetary comparison information, listed in the table of contents, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements of the City of Dubuque, Iowa. 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 basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Gove~°nments, and Non- Profrt Organizations, and is also not a required part of the basic financial statements of the City of Dubuque, Iowa. The combining nonmajor fund financial statements and the schedule of expenditures of federal awards have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken 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 express no opinion on them. ~-,, ~~~ Dubuque, Iowa December 16, 2008 14 CITY OF DUBUQUE, IOWA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED .TUNE 30, 2008 This section of the City of Dubuque annual financial report presents our discussion and analysis of the City's financial performance during the fiscal year that ended on June 30, 2008. 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 assets of the City of Dubuque exceeded its liabilities at the close of the fiscal year by $454,073,902 (net assets). This was an increase of $16,020,278 over net assets at June 30, 2007. Unrestricted net assets at June 30, 2008 in the amount of $30,300,647 may be used to meet the City's ongoing obligations to citizens and creditors. • The expenses of the general fund exceeded revenues by $2,151,941. ® The ending general fund balance was $19,681,841. • Within the City's business-type activities, revenues exceeded expenses and transfers by $3,719,136. ® For the year, the revenues of the City's governmental activities exceeded expenses and transfers by $12,301,142. ® The City's debt increased by $22,037,072 due to issuance of new debt exceeding principal payments. 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 assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets 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 15 consider additional non-financial factors such as changes in the City's property tax base and the condition of the City's infrastructure. The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year. All changes in net assets 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 vacation leave. The government-wide financial statements include not only the City itself (known as the primary government), but also one other legally separate entity, the Dubuque Metropolitan Area Solid Waste Agency, for which the City of Dubuque is considered financially accountable. Financial information for the Agency is reported separately from the financial information presented for the primary government. The Dubuque Metropolitan Area Solid Waste Agency issues separate financial statements. 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 the City in this category include water, sewer, storm water, refuse, parking, transit and 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 16 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. 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, employee benefits fund, street construction fund, and community development 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 non-major governmental funds is provided in the form of combining statements elsewhere in this report. The City legally adopts an annual budget by function. A budgetary comparison schedule has been provided. Proprietary funds. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprises funds to account for its sewer, water, storm water, refuse utilities and for transit, parking, 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 general/engineering service, garage service, 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 two fiduciary funds, an agency fund reporting resources held for the Dubuque Racing Association for improvements at the greyhound racing facility and an agency fund used for reporting resources from Mediacom for purchasing equipment relevant to public, educational and governmental (PEG) access broadcasting. Notes to the frna~zcial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Required supplementary information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the budget and actual results of the City. 17 Other information. The combining statements referred to earlier in connection with non- major governmental funds, non-major enterprise funds, and internal service funds, as well as an individual agency fund statement, are presented immediately following the required supplementary information. GOVERNMENT-WIDE FINANCIAL ANALYSIS Net assets. As noted earlier, net assets may serve as a useful indicator of a government's financial position when observed over time. In the case of the City, assets exceeded liabilities by $454,073,902 at the close of the most recent fiscal year. The largest part of the City's net assets (86.2%) reflects its investment in capital assets such as land, buildings, infrastructure, machinery, and equipment less any related debt used to acquire those assets that are still outstanding. These capital assets are used to provide services to the citizens and are not available for future spending. Current and other assets Capital assets Total assets Long-term liabilities Other liabilities Total liabilities Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets CITY OF DUBUQUE'S NET ASSETS Governmental Activities Business-ty pe Activities Total 2008 2007 2008 2007 2008 2007 $ 97,492,862 $ 76,852,268 $ 13,705,545 $ 16,342,247 $ 111,198,407 $ 93,194,515 325,611,587 310,552,621 107,186,474 100,384,974 432,798,061 410,937,595 423,104,449 387,404,889 120,892,019 116,727,221 543,996,468 504,132,110 50,451,804 29,187,528 12,817,868 11,897,067 63,269,672 41,084,595 25,550,629 23,416,487 1,102,265 1,577,404 26,652,894 24,993,891 76,002,433 52,604,015 13,920,133 13,474,471 89,922,566 66,078,486 296,143,451 288,978,975 95,104,575 91,483,532 391,248,026 380,462,507 31,970,724 23,900,328 554,505 554,318 32,525,229 24,454,646 18,987,841 21,921,571 11,312,806 11,214,900 30,300,647 33,136,471 $ 347,102,016 $ 334,800,874 $ 106,971,886 $ 103,252,750 $ 454,073,902 $ 438,053,624 A portion of the City's net assets (7.2%) represents resources that are subject to external restrictions on how they maybe used. The remaining balance of net assets (6.7%) may be used to meet the City's ongoing obligations to citizens and creditors. At the close of fiscal years 2008 and 2007, the City is able to report positive balances in all three categories of net assets, both for the government as a whole and separate governmental and business-type activities. Governmental activities. Governmental activities increased the net assets of the City by $12,301,142 or 76.8% ofthe total increase in net assets in 2008 and $30,212,972 or 97.9% of the total increase in net assets in 2007. Taxes are the largest source of governmental revenues with property taxes of $22,744,563 in 2008. Other governmental revenues included gaming of $15,346,468, local option sales taxes of $8,020,889, hotel/motel tax of $1,622,455, and $9,643,066 of charges for services. 18 Governmental expenses during 2008 totaled $67,814,257. The largest programs were public safety of $16,966,210, public works of $18,847,068, community and economic development of $11,961,584 and culture and recreation of $10,857,409. The State of Iowa changed the reporting requirements for expenses from four to eight programs effective with the 2003 fiscal year. CITY OF DUBUQUE CONDENSED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS Governmental Activities Business-type Activities Total 2008 2007 2008 2007 2008 2007 Revenues: Program revenues Charges for services $ 9,643,066 $ 10,023,217 $ 17,176,090 $ 16,090,766 $ 26,819,156 $ 26,113,983 Operating grants and contributions 11,709,123 11,641,904 1,209,636 1,167,344 12,918,759 12,809,248 Capital grants and contributions 8,032,602 23,741,282 2,830,263 1,670,874 10,862,865 25,412,156 General revenues Property taxes 22,744,563 21,656,908 - - 22,744,563 21,656,908 Local option sales tax 8,020,889 7,817,403 - - 8,020,889 7,817,403 Hotel/motel tax 1,622,455 1,569,743 - - 1,622,455 1,569,743 Utility franchise fees 1,516,123 1,492,920 - - 1,516,123 1,492,920 Gaming 15,346,468 15,556,551 - - 15,346,468 15,556,551 Unrestricted investment earnings 2,741,499 1,870,403 630,049 796,636 3,371,548 2,667,039 Gain on sale of capital assets 92,525 - 11,736 - 104,261 - Other 898,241 586,931 - - 898,241 586,931 Total revenues 82,367,554 95,957,262 21,857,774 19,725,620 104,225,328 115,682,882 Expenses: Public safety 16,966,210 20,326,724 - - 16,966,210 20,326,724 Public works 18,847,068 16,506,560 - - 18,847,068 16,506,560 Health and social services 800,566 759,367 - - 800,566 759,367 Culture and recreation 10,857,409 9,837,299 - - 10,857,409 9,837,299 Community and economic development 11,961,584 11,965,805 - - 11,961,584 11,965,805 General government 5,804,003 4,940,154 - - 5,804,003 4,940,154 Interest on long-term debt 2,577,417 1,400,748 - - 2,577,417 1,400,748 Sewage disposal works - - 6,141,524 5,814,076 6,141,524 5,814,076 Water utility - - 4,814,692 4,780,063 4,814,692 4,780,063 Stormwaterutility - - 1,706,735 1,198,675 1,706,735 1,198,675 Parking facilities - - 2,173,110 1,611,447 2,173,110 1,611,447 America's River Project - - 126,699 434,667 126,699 434,667 Refuse collection - - 2,724,050 2,496,018 2,724,050 2,496,018 Transit system - - 2,703,983 2,760,459 2,703,983 2,760,459 Total expenses 67,814,257 65,736,657 20,390,793 19,095,405 88,205,050 84,832,062 Increase in net assets before transfers 14,553,297 30,220,605 1,466,981 630,215 16,020,278 30,850,820 Transfers (2,252,155) (7,633) 2,252,155 7,633 - - Increase (decrease) in net assets 12,301,142 30,212,972 3,719,136 637,848 16,020,278 30,850,820 Net assets, beginning 334,800,874 304,587,902 103,252,750 102,614,902 438,053,624 407,202,804 Net assets, ending $ 347,102,016 $ 334,800,874 $ 106,971,886 $ 103,252,750 $ 454,073,902 $ 438,053,624 19 Business-type activities. Business type activities increased net assets by $3,719,136 while the City's net assets increased by $16,020,278 at June 30, 2008. FINANCIAL ANALYSIS OF THE GOVERNMENT' S FUNDS 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. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. The City's governmental funds reported a combined fund balance of $66,910,216 at June 30, 2008. A portion of the fund balance is reserved and not available for new spending because it has already been committed for encumbrances, endowments, debt service and state statute restricted purposes. The general fund's fund balance reserve goal is 10% of budgeted annual expenditures. Our balance is slightly higher than the goal at year-end. The unreserved fund balance of special revenue employee benefits fund increased by $10,242 to $117,274. The unreserved fund balance of special revenue community development decreased by $594,753 to $2,158,078. 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 assets of the enterprise funds at June 30, 2008 totaled $106,971,886 of which 10.6% ($11,312,806) is unrestricted. The net assets of the internal service funds are $3,418,227 a $593,727 increase from the 2007 total net assets. The unrestricted net assets of the internal service funds are $3,366,107 (98.5%). The increase in internal service funds is primarily due to favorable results in the employee health insurance reserve fund. The sewer disposal works had an increase in net assets of $353,183 for total net assets of $39,445,257 at June 30, 2008. The water utility had an increase in net assets of $500,745 for total net assets of $24,624,242. The storm water utility had an increase in net assets of $1,943,316 for total net assets of $24,033,641. The parking facilities had an increase in net assets of $1,033,643 for total net assets of $15,163,116. The America's River Project had an increase in net assets of $106,667 for total net assets deficit of $30,947. 20 BUDGETARY HIGHLIGHTS There were two amendments to the City's 2007-2008 budget. The first amendment was passed in October 2007 to reflect operating and capital budget carryovers (continuing appropriation authority) from 2007 and amends the FY 2008 budget for operating and capital City Council actions since the beginning of the fiscal year. The second budget amendment was passed in May 2008 to reflect City Council actions since the first budget amendment and amendments to add additional appropriation authority due to increased revenues. The final budget for total receipts increased by $30,027,918. 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 $65,175,509 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 receipts were $29,154,1871esstban the final amended budget, and expenditures were $68,475,3191esstban the final amended budget due primarily to projected capital projects not completed by fiscal year end. CAPITAL ASSET AND DEBT ADMINISTRATION Cnpitnl ~rssets. The City's investment in capital assets for its governmental and business- type activities as of June 30, 2008, amounts to $432,798,061 (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 the note 5 to the financial statements in this report. CAPITAL ASSETS (net of accumulated depreciation) Governmental Activities Business-typ e Activities Total 2008 2007 2008 2007 2008 2007 Land $ 57,171,699 $ 51,912,748 $ 3,364,857 $ 3,364,857 $ 60,536,556 $ 55,277,605 Buildings 106,145,708 101,663,541 61,828,335 60,964,620 167,974,043 162,628,161 Improvements other than buildings 15,245,857 15,028,954 62,082,852 55,727,107 77,328,709 70,756,061 Machinery and equipment 28,679,138 25,636,645 49,217,914 47,778,284 77,897,052 73,414,929 Infrastructure 187,542,063 178,774,083 - - 187,542,063 178,774,083 Construction in progress 14,044,930 16,067,956 6,390,937 5,298,854 20,435,867 21,366,810 Accumulated depreciation (83,217,808) (78,531,306) (75,698,421) (72,748,748) (158,916,229) (151,280,054) $ 325,611,587 $ 310,552,621 $ 107,186,474 $ 100,384,974 $ 432,798,061 $ 410,937,595 Major expenditures during 2007-2008 were for Historic Federal Building renovations; Bee Branch Storm Water Project, multifunction copiers, parking lot at City Hall, Port of Dubuque Parking Ramp, Cedar Street Lift Station, and streets, water and sewer projects. 21 Long-term debt. At year end the City had $60,398,027 of debt outstanding. This is an increase of $22,037,072 from June 30, 2007. New debt issued during the current year included general obligation bonds for sewer improvements of $1,055,000 and refinancing $2,965,000 of existing debt at more favorable rates. The City's bond rating was Aa2 for these issues. $23,025,000 of urban renewal tax increment revenue bonds were issued for Port of Dubuque parking ramp. The City also received disbursements from the State Revolving Fund construction loan program of $453,336 for drinking water, $19,113 storm water and $56,538 sewer projects. An additional $83,989 disbursement was taken from the SRF planning loans program for sewer project. The City continues to operate well 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 our debt capacity is $148,824,003. With general obligation debt of $60,484,713 we are utilizing 40.64% of this limit. Additional information on the City's long-term debt can be found in note 6 of this report. ECONOMIC FACTORS The City's unemployment rate ended the fiscal year at 3.8%, a .1% increase from the prior year, and is slightly lower than the State of Iowa rate of 4.0 %, and lower than the 5.5% national rate. The City continues to enjoy growth in assessed valuation of taxable property net of exemptions (2.4% for total of $1,814,365,000). In fiscal year 2008, the minimum monthly refuse rate increased $0.43 to $9.89, sewer rates increased 5%, water rates increased 5% and the storm water monthly fee increased $1.00 to $3.25 per single family unit (SFU). Requests for information. This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director, 50 West 13th Street, Dubuque, Iowa 52001-4864. 22 BASIC FII~~TCIAL STATEIVIEIeTTS CITY OF UBUQiJE, IOWA CI'T'Y OF I)U~iTQITE, IOWA STATEMENT OF NET ASSETS JUNE 30, 200 EXHIBIT 1 Component Unit Dubuque Primary Government Metropolitan Governmental Business-type Area Solid Activities Activities Total Waste Agency ASSETS CURRENT ASSETS Cash and pooled cash investments $ 39,784,125 $ 9,915,602 $ 49,699,727 $ 7,168,906 Receivables Property tax Delinquent 237,828 - 237,828 - Succeeding year 18,963,071 - 18,963,071 - Accounts and other 2,146,076 2,463,612 4,609,688 250,525 Special assessments 328,204 - 328,204 - Accrued interest 302,357 62,102 364,459 163,657 Notes 610,311 - 610,311 - Intergovernmental 3,238,706 976,184 4,214,890 - Internal balances 735,095 (735,095) - - Inventories 283,608 463,296 746,904 - Prepaid items 33,757 5,339 39,096 55,286 Total Current Assets 66,663,138 13,151,040 79,814,178 7,638,374 NONCURRENT ASSETS Temporarily restricted cash and pooled cash investments 20,610,313 554,505 21,164,818 3,625,224 Permanently restricted cash and pooled cash investments 88,061 - 88,061 - Notes receivable 10,131,350 - 10,131,350 - Capital assets Land 57,171,699 3,364,857 60,536,556 1,586,092 Buildings 106,145,708 61,828,335 167,974,043 65,922 Improvements other than buildings 15,245,857 62,082,852 77,328,709 7,468,652 Machinery and equipment 28,679,138 49,217,914 77,897,052 2,361,686 Infrastructure 187,542,063 - 187,542,063 - Construction in progress 14,044,930 6,390,937 20,435,867 - Accumulated depreciation (83,217,808) (75,698,421) (158,916,229) (7,085,925) Total Noncurrent Assets 356,441,311 107,740,979 464,182,290 8,021,651 Total Assets 423,104,449 ]20,892,019 543,996,468 15,660,025 (continued) 23 CITY ®~ I)UBIJ~IJE, I®VVA EXHIBIT 1 STATEMENT OF NET ASSETS (continued) .TUNE 30, 2005 Component Unit Dubuque Primary Government Metropolitan Governmental Business-type Area Solid Activities Activities Total Waste Agency LIABILITIES CURRENT LIABILITIES Accounts payable $ 4,694,165 $ 847,782 $ 5,541,947 $ 93,415 Accrued payroll 945,379 208,719 1,154,098 27,620 Notes payable 114,873 22,070 136,943 - General obligation bonds payable 1,305,000 700,000 2,005,000 - Revenue bonds payable - 240,000 240,000 - Tax increment financing bonds payable 524,727 - 524,727 - Accrued compensated absences 2,540,145 331,500 2,871,645 63,649 Accrued interest payable 237,895 39,347 277,242 - Intergovernmental payable 3,256 - 3,256 69,545 Unearned revenue Succeeding year property tax 18,963,071 - 18,963,071 - Other 706,863 6,417 713,280 - Total Current Liabilities 30,035,374 2,395,835 32,431,209 254,229 NONCURRENT LIABILITIES Notes payable 1,164,763 589,927 1,754,690 - General obligation bonds payable 20,447,907 10,684,371 31,132,278 - Revenue bonds payable - 250,000 250,000 - Landfill closure and postclosure care - - - 3,136,395 Tax increment financing bonds payable 24,354,389 - 24,354,389 - Total Noncurrent Liabilities 45,967,059 11,524,298 57,491,357 3,136,395 Total Liabilities 76,002,433 13,920,133 89,922,566 3,390,624 NET ASSETS Invested in capital assets, net of related debt 296,143,451 95,104,575 391,248,026 4,396,427 Restricted for/by Bond ordinance 5,114,998 554,505 5,669,503 - Debt service 3,155 - 3,155 - Employee benefits 117,274 - 117,274 - Community development 13,583,759 - 13,583,759 - Streets 2,430,580 - 2,430,580 - Capital projects 8,868,704 - 8,868,704 - Franchise agreement 401,434 - 401,434 - Endowments Expendable 33,958 - 33,958 - Nonexpendable 88,061 - 88,061 - Other 1,328,801 - 1,328,801 - State statute - - - 239,146 Minority interest - - - 1,732,879 Unrestricted 18,987,841 11,312,806 30,300,647 5,900,949 Total Net Assets $ 347,102,016 $ 106,971,886 $ 454,073,902 $ 12,269,401 See notes to financial statements. 24 CITE' ®F I)U~U~UE, I®WA STATEMENT OF ACTIVITIES FOR TIIE FEAR ENDED JUNE 30, 2005 Functions/Programs Primary government Governmental activities Public safety Public works Health and social services Culture and recreation Community and economic development General government Interest on long-term debt Total governmental activities Expenses Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions Business-type activities Sewage disposal works Water utility Stormwater utility Parking facilities America's River Project Refuse collection Transit system Total business-type activities Total primary government Component unit Dubuque Metropolitan Area Solid Waste Agency $ 16,966,210 $ 2,088,723 18,847,068 4,061,883 800,566 112,580 10,857,409 2,109,571 11,961,584 343,881 5,804,003 926,428 2,577,417 - 67,814,257 9,643,066 $ 625,105 4,962,15 8 65,156 129,409 5,927,295 $ 394,081 7,100,463 373,671 123,574 40,813 11,709,123 8,032,602 6,141,524 5,484,079 - 799,394 4,814,692 4,875,530 - 368,410 1,706,735 1,766,334 - 927,344 2,173,110 2,141,607 - 698,577 126,699 2,140 - 36,538 2,724,050 2,710,583 13,078 - 2,703,983 195,817 1,196,558 - 20,390,793 17,176,090 1,209,636 2,830,263 $ 88,205,050 $ 26,819,156 $ 12,918,759 $ 10,862,865 $ 3,501,071 $ 3,213,432 $ 29,294 $ - General revenues Property taxes Local option sales tax Hotel/motel tax Utility franchise fees Gaming Unrestricted investment earnings Gain on sale of capital assets Other Transfers Total general revenues and transfers Change in net assets Net assets, beginning Net assets, ending See notes to financial statements. EX>FIIBIT 2 Net (Expense) Revenue and Changes in Net Assets Component Unit Primary Government Dubuque Metropolitan Governmental Business-type Area Solid Activities Activities Total Waste Agency $ (13,858,301) $ - $ (13,858,301) $ - (2,722,564) - (2,722,564) - (622,830) - (622,830) - (8,244,758) - (8,244,758) - (5,566,834) - (5,566,834) - (4,836,762) - (4,836,762) - (2,577,417) - (2,577,417) - (38,429,466) - (38,429,466) - - 141,949 141,949 - - 429,248 429,248 - - 986,943 986,943 - - 667,074 667,074 - - (88,021) (88,021) - - (389) (389) - - (1,311,608) (1,311,608) - - 825,196 825,196 - (38,429,466) 825,196 (37,604,270) - - - - (258,345) 22,744,563 - 22,744,563 - 8,020,889 - 8,020,889 - 1,622,455 - 1,622,455 - 1,516,123 - 1,516,123 - 15,346,468 - 15,346,468 - 2,741,499 630,049 3,371,548 462,185 92,525 11,736 104,261 - 898,241 - 898,241 - (2,252,155) 2,252,155 - - 50,730,608 2,893,940 53,624,548 462,185 12,301,142 3,719,136 16,020,278 203,840 334,800,874 103,252,750 438,053,624 12,065,561 $ 347,102,016 $ 106,971,886 $ 454,073,902 $ 12,269,401 25 CITY ®F+' I)U~U~UE, I®VVA EXHIBIT 3 BALANCE SHEET G®VERNIVIENTAL FUNDS JUNE 30, 2005 Special Revenue Capital Projects Other Employee Community Street General Governmental General Benefits Development Construction Construction Funds Total ASSETS Cash and pooled cash investments $ 18,014,113 $ 88,657 $ 1,558,929 $ 1,871,105 $ 4,876,570 $ 8,502,503 $ 34,911,877 Receivables Property tax Delinquent 200,727 32,083 - - - 5,018 237,828 Succeeding year 16,478,894 2,094,685 - - - 389,492 18,963,071 Accounts and other 1,913,144 - - 95,734 - 16,506 2,025,384 Special assessments - - - - - 328,204 328,204 Accrued interest 118,131 - 42,420 14,535 1,146 100,580 276,812 Notes - - 10,739,186 - - 2,475 10,741,661 Intergovemmental 1,263,775 - 259,112 1,045,333 - 670,486 3,238,706 Due from other funds 480,712 - - - - - 480,712 Inventories 225,970 - - - - - 225,970 Advances to other funds 254,383 - - - - - 254,383 Prepaid items 17,427 - 16,330 - - - 33,757 Restricted cash and pooled cash investments - - - - 15,441,355 5,257,019 20,698,374 Total Assets $ 38,967,276 $ 2,215,425 $ 12,615,977 $ 3,026,707 $ 20,319,071 $ 15,272,283 $ 92,416,739 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable $ 1,068,481 $ - $ 82,685 $ 369,417 $ 1,246,816 $ 259,303 $ 3,026,702 Accrued payroll 795,521 - 23,169 - - 84,135 902,825 Intergovernmental payable - - - - - 3,256 3,256 Deferred revenue Succeeding year property tax 16,478,894 2,094,685 - - - 389,492 18,963,071 Other 942,539 3,466 54,879 723,730 - 886,055 2,610,669 Total Liabilities 19,285,435 2,098,151 160,733 1,093,147 1,246,816 1,622,241 25,506,523 FUND BALANCES Reserved for/by Encumbrances 1,445,442 - 167,591 1,245,241 14,457,176 678,134 17,993,584 Long-term notes receivable - - 10,129,575 - - 1,775 10,131,350 Advances 254,383 - - - - - 254,383 Bond ordinance - - - - - 5,114,998 5,114,998 Debt service - - - - - 3,155 3,155 Franchise agreement - - - - - 1,332 1,332 Endowments - - - - - 88,061 88,061 Unreserved Designated for Future equipment and capital maintenance 6,635,215 - - - - - 6,635,215 Future cash flow 3,822,769 - - - - - 3,822,769 Undesignated reported in General fund 7,524,032 - - - - - 7,524,032 Special revenue funds - 117,274 2,158,078 - - 5,156,579 7,431,931 Capital projects funds - - - 688,319 4,615,079 2,572,050 7,875,448 Permanent funds - - - - - 33,958 33,958 Total Fund Balances 19,681,841 117,274 12,455,244 1,933,560 19,072,255 13,650,042 66,910,216 Total Liabilities and Fund Balances $ 38,967,276 $ 2,215,425 $ 12,615,977 $ 3,026,707 $ ..20,319,071 $ 15,272,283 $ 92,416,739 See notes to financial statements. 26 CITY ®F Di1~iT~iTE, I®W1~ EXHIBIT 3-1 RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS JUNE 30, 2008 Total fund balances -governmental funds $ 66,910,216 Amounts reported for the governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Cost of capital assets $ 408,727,361 Accumulated depreciation (83,167,894) 325,559,467 Some of the City's revenues will be collected after year-end but are not available soon enough to pay for the current period's expenditures and therefore are deferred in the funds. Those revenues consist of: Property tax 30,594 Special assessments 294,581 Other 1,578,630 1,903,805 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 assets. 3,418,227 Some liabilities are not due and payable in the current period and therefore are not reported in the funds. Those liabilities consist of: General obligation bonds (21,752,907) Tax increment financing bonds (24,879,116) Notes payable (1,279,636) Accrued interest (237,895) Compensated absences (2,540,145) (50,689,699) Net assets of governmental activities $ 347,102,016 See notes to financial statements. 27 ~I~'Y ®F' UBj7QjTI;, I®WE?~ EXHIBIT 4 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2008 REVENUES Taxes $ 22,568,857 $ 2,453,174 $ - $ 2,406,267 $ - $ 6,470,394 $ 33,898,692 Special assessments - - - - - 177,585 177,585 Licenses and permits 1,153,429 - - - - - 1,153,429 Intergovernmental 1,578,336 - 1,556,808 1,776,163 - 9,345,216 14,256,523 Charges for services 7,648,503 - - - - 184,648 7,833,151 Fines and forfeits 188,603 - - - - - 188,603 Investment earnings 1,251,166 - 147,449 49,502 766,303 517,533 2,731,953 Contributions 239,254 - - 255,500 5,544,825 94,423 6,134,002 Gaming 15,346,468 - - - - - 15,346,468 Miscellaneous 587,653 - 18,342 72 - 663,309 1,269,376 Total Revenues 50,562,269 2,453,174 1,722,599 4,487,504 6,311,128 17,453,108 82,989,782 EXPENDITURES Current Public safety 21,444,125 - - - - 98,536 21,542,661 Public works 10,494,051 - 67,240 - - 5,769,816 16,331,107 Health and social services 684,712 - 85,047 - - 27,885 797,644 Culture and recreation 10,071,036 - 110,366 - - 96,385 10,277,787 Community and economic development 4,296,730 - 2,015,661 - - 5,535,121 11,847,512 General government 5,670,049 337 - - - 640,553 6,310,939 Debt service 53,507 - - - - 4,115,299 4,168,806 Capital projects - - - 3,599,493 10,088,188 1,664,167 15,351,848 Total Expenditures 52,714,210 337 2,278,314 3,599,493 10,088,188 17,947,762 86,628,304 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (2,151,941) 2,452,837 (555,715) 888,011 (3,777,060) (494,654) (3,638,522) OTHER FINANCING SOURCES (USES) Issuance of debt - - - - 23,025,000 58,696 23,083,696 Discount on bonds - - - - (266,158) - (266,158) Issuance of refunding bonds - - - - - 2,965,000 2,965,000 Payment to refunded bond escrow agent - - - - - (2,875,000) (2,875,000) Transfers in 3,810,467 - 377,213 1,059,041 660,806 8,894,062 14,801,589 Transfers out (4,373,258) (2,442,595) (123,226) (699,523) (7,038,997) (3,507,510) (18,185,109) Sale of capital assets 113,639 - - - 2,635,276 152,275 2,901,190 Total Other Financing Sources (iJses) (449,152) (2,442,595) 253,987 359,518 19,015,927 5,687,523 22,425,208 NET CHANGE IN FUND BALANCES (2,601,093) 10,242 (301,728) 1,247,529 15,238,867 5,192,869 18,786,686 FUND BALANCES, BEGINNING 22,282,934 107,032 12,756,972 686,031 3,833,388 8,457,173 48,123,530 FUND BALANCES, ENDING $ 19,681,841 $ 117,274 $ 12,455,244 $ 1,933,560 $ 19,072,255 $ 13,650,042 $ 66,910,216 See notes to financial statements. 28 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 $ 22,984,500 Transfers of capital assets from enterprise funds 1,477,783 Transfers of capital assets to enterprise funds (339,982) Depreciation expense (6,264,027) 17,858,274 In 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 assets differs from the change in fund balances by the book value of the asset being disposed. (2,808,665) 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 revenues increased (decreased) by these amounts this year: Property tax 1,887 Special assessments (116,741) Other (599,898) Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long term liabilities in the statement of net assets. Repayment of debt principal is an expenditure in the governmental funds, but it reduces long-term liabilities in the statement of net assets and does not affect the statement of activities. Also, governmental funds report the effect of issuance discounts when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Debt proceeds (26,048,696) Discounts on bonds issued 266,158 Debt repayments 4,637,374 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: (714,752) (21,145,164) Increase in accmed interest (149,852) Amortization of bond discount (21,133) Increase in compensated absences (97,979) Total additional expenses (268,964) Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue of the internal service funds is reported with governmental activities. 593,727 Change in net assets of governmental activities $ 12,301,142 See notes to financial statements. 29 CITY ®F' DUBUQUE, I®WA STATEMENT OF NET ASSETS PROPRIETA~tX FUNDS JUNE 30, 2008 Business-type Activities - Sewage Disposal Water Stormwater Parking Works Utility Utility Facilities ASSETS CURRENT ASSETS Cash and pooled cash investments Receivables Accounts Accrued interest Intergovernmental Inventories Prepaid items Total Current Assets NONCURRENT ASSETS Restricted cash and pooled cash investments Capital assets Land Buildings Improvements other than buildings Machinery and equipment Construction in progress Accumulated depreciation Net Capital Assets Total Noncurrent Assets $ 5,001,756 $ 788,310 $ 2,753,958 $ 626,425 1,080,432 784,220 227,581 67,922 27,589 6,551 14,903 8,772 - 445,921 - - 5,339 - - - 6,115,116 2,025,002 2,996,442 703,119 - 554,505 167,855 37,449 1,827,344 1,296,209 31,590,936 8,214,651 - 20,135,184 32,309,642 520,295 27,318,976 1,933,939 6,908,215 34,957,465 925,265 1,184,471 858,508 378,995 5,137,779 14,910 (36,938,914) (18,840,008) (7,941,292) (7,228,750) 34,896,242 25,268,847 27,268,072 17,335,963 34,896,242 25,268,847 27,268,072 17,890,468 Total Assets 41,011,358 27,293,849 30,264,514 18,593,587 EXHIBIT 5 Enterprise Funds Governmental America's Other Activities- River Enterprise Internal Project Funds Total Service Funds $ - $ 745,153 $ 9,915,602 $ 4,872,248 - 303,457 2,463,612 120,692 - 4,287 62,102 25,545 - 976,184 976,184 - - 17,375 463,296 57,638 - - 5,339 - - 2,046,456 13,886,135 5,076,123 - - 554,505 - - 36,000 3,364,857 - - 1,887,564 61,828,335 - - - 62,082,852 - - 5,242,498 49,217,914 102,034 745 - 6,390,937 - - (4,749,457) (75,698,421) (49,914) 745 2,416,605 107,186,474 52,120 745 2,416,605 107,740,979 52,120 745 4,463,061 121,627,114 5,128,243 (continued) 30 CITY ®F DUBUQUE, I®WA STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30, 2008 Business-type Activities - Sewage Disposal Water Stormwater Parking Works Utility Utility Facilities LIABILITIES CURRENT LIABILITIES Accounts payable Accrued payroll General obligation bonds payable Revenue bonds payable Capital loan notes payable Accrued compensated absences Accrued interest payable Due to other funds Unearned revenue Advances from other funds Total Current Liabilities NONCURRENT LIABILITIES General obligation bonds payable (net of discount of $78,593 and deferred amount on refunding of $107,036) Revenue bonds payable Capital loan notes payable Total Noncurrent Liabilities $ 232,845 $ 196,946 $ 314,533 $ 20,335 47,507 54,222 233 18,978 100,000 155,000 270,000 175,000 - - - 240,000 5,032 16,348 690 - 92,911 106,230 4,173 21,624 3,098 5,218 20,041 10,990 - - - 6,417 - 254,383 - - 481,393 788,347 609,670 493,344 950,212 1,444,272 5,602,760 2,687,127 - - - 250,000 134,496 436,988 18,443 - 1,084,708 1,881,260 5,621,203 2,937,127 Total Liabilities NET ASSETS Invested in capital assets, net of related debt Restricted by bond ordinance Unrestricted Total Net Assets (Deficit) 1,566,101 2,669,607 6,230,873 3,430,471 33,706,502 23,216,239 21,780,648 13,983,836 - - - 554,505 5,738,755 1,408,003 2,252,993 624,775 $ 39,445,257 $ 24,624,242 $ 24,033,641 $ 15,163,116 See notes to financial statements. EXIIIBIT 5 (continued) Enterprise Funds America's Other River Enterprise Project Funds Total $ 31,692 $ 51,431 $ - 87,779 - 106,562 - 480,712 31,692 726,484 Governmental Activities- Internal Service Funds 847,782 $ 1,667,462 208,719 42,554 700,000 - 240,000 - 22,070 - 331,500 - 39,347 - 480,712 - 6,417 - 254,383 - 3,130,930 1,710,016 - - 10,684,371 - - - 250,000 - - - 589,927 - - - 11,524,298 - 31,692 726,484 14,655,228 1,710,016 745 2,416,605 95,104,575 52,120 - - 554,505 - (31,692) 1,319,972 11,312,806 3,366,107 $ (30,947) $ 3,736,577 $ 106,971,886 $ 3,418,227 31 CITY ®F' I)iTBiJQITE, I®WA STATEMENT OF REVENUES, EXPENSES, AN D CHANGES IN FUND NET ASSETS (DEFICIT) PROPRIETARY FUNDS FOR THE YEAR ENDED J[JNE 30, 2008 OPERATING REVENUES Charges for sales and services Other Total Operating Revenues OPERATING EXPENSES Employee expense Utilities Repairs and maintenance Supplies and services Insurance Depreciation Total Operating Expenses OPERATING INCOME (LOSS) NONOPERATING REVENUES (EXPENSES) Intergovernmental Investment earnings Interest expense Gain on disposal of assets Net Nonoperating Revenues (Expenses) INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS` AND TRANSFERS CAPITAL CONTRIBUTIONS TRANSFERS IN TRANSFERS OUT CI~ANGE IN NET ASSETS NET ASSETS (DEFICIT), BEGINNING NET ASSETS (DEFICIT), ENDING Business-type Activities - Sewage Disposal Water Stormwater Parking Works Utility Utility Facilities $ 5,444,622 $ 4,871,861 $ 1,764,959 $ 2,137,826 39,457 3,669 1,375 3,781 5,484,079 4,875,530 1,766,334 2,141,607 1,871,101 1,962,860 149,987 685,305 556,933 550,192 167 106,753 370,564 ]27,471 273 108,085 2,107,506 1,240,107 938,846 558,970 83,547 77,930 - 35,710 1,130,184 764,908 364,773 513,575 6,119,835 4,723,468 1,454,046 2,008,398 (635,756) 152,062 312,288 133,209 218,444 56,972 239,773 82,432 (21,689) (91,224) (252,689) (164,712) 4,491 147 - - 201,246 (34,105) (12,916) (82,280) (434,510) 117,957 299,372 50,929 799,394 368,410 927,344 1,038,559 121,449 21,953 850,732 - (133,150) (7,575) (134,132) (55,845) 353,183 500,745 1,943,316 1,033,643 39,092,074 24,123,497 22,090,325 14,129,473 $ 39,445,257 $ 24,624,242 $ 24,033,641 $ 15,163,116 See notes to financial statements. EXHIBIT 6 Enterprise Funds Governmental America's Other Activities- River Enterprise Internal Project Funds Total Service Funds $ - $ 2,904,958 $ 17,124,226 $ 10,262,147 2,140 1,442 51,864 240,694 2,140 2,906,400 17,176,090 10,502,841 - 2,933,883 7,603,136 2,247,384 - 75,425 1,289,470 24,009 - 756,212 1,362,605 28,123 126,699 1,167,421 6,139,549 7,278,350 - 71,991 269,178 536,356 - 423,101 3,196,541 5,671 126,699 5,428,033 19,860,479 10,119,893 (124,559) (2,521,633) (2,684,389) 382,948 36,538 1,209,636 1,246,174 - - 32,428 630,049 214,110 - - (530,314) - - 7,098 1],736 3,105 36,538 1,249,162 1,357,645 217,215 (88,021) (1,272,471) (1,326,744) 600,163 - - 3,133,707 - 1,766,447 1,070,053 3,830,634 - (1,571,759) (16,000) (1,918,461) (6,436) 106,667 (218,418) 3,719,136 593,727 (137,614) 3,954,995 103,252,750 2,824,500 $ (30,947) $ 3,736,577 $ 106,971,886 $ 3,418,227 32 CITY OF I)U~UQUE, IOWA STATE1VIElVT OF CASH FLOWS PROPRIETARY FUI~TDS FOR THE FEAR ELIDED J[J10TE 30, 2008 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers Cash payments to suppliers for goods and services Cash payments to employees for services Other operating receipts NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds Transfers to other funds Proceeds from interfund balances Payment of interfund balances Intergovernmental grant proceeds NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets Acquisition and construction of capital assets Proceeds from issuance of debt Payment of debt Interest paid Intergovernmental grant proceeds NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Interest received NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING CASH AND CASH EQUIVALENTS, ENDING Business-type Activities - Sewage Disposal Water Stormwater Parking Works Utility Utility Facilities $ 5,465,016 $ 4,883,309 $ 1,690,560 $ 2,127,773 (3,727,758) (1,932,906) (692,152) (980,112) (1,875,699) (1,942,036) (149,506) (690,810) 39,457 3,669 1,375 3,781 (98,984) 1,012,036 850,277 460,632 121,449 21,953 850,732 - (133,150) (7,575) (134,132) (55,845) - (43,204) - - (11,701) (28,826) 716,600 (55,845) 4,491 147 - - (1,492,489) (1,460,754) (3,484,749) (843,440) 1,188,620 453,336 19,133 - - (150,000) (260,000) (395,000) (17,471) (91,554) (249,305) (160,550) (316,849) (1,248,825) (3,974,921) (1,398,990) 243,513 66,257 248,275 95,836 (184,021) (199,358) (2,159,769) (898,367) 5,185,777 987,668 4,913,727 2,079,297 $ 5,001,756 $ 788,310 $ 2,753,958 $ 1,180,930 EXHIBIT 7 Enterprise Funds Governmental America's Other Activities- River Enterprise Internal Project Funds Total Service Funds $ - $ 2,876,976 $ 17,043,634 $ 10,148,229 (126,699) (2,065,381) (9,525,008) (7,376,366) - (2,867,367) (7,525,418) (2,272,492) 2,140 1,442 51,864 240,694 (124,559) (2,054,330) 45,072 740,065 1,766,447 1,070,053 3,830,634 - (220,726) (16,000) (567,428) (6,436) - 480,712 480,712 - (500,722) - (543,926) (15,722) - 270,324 270,324 - 1,044,999 1,805,089 3,470,316 (22,158) - 7,098 11,736 3,105 (956,978) (28,000) (8,266,410) (15,028) - - 1,661,089 - - - (805,000) - - - (518,880) - 36,538 - 36,538 - (920,440) (20,902) (7,880,927) (11,923) - 34,008 687,889 223,050 - (236,135) (3,677,650) 929,034 - 981,288 14,147,757 3,943,214 $ - $ 745,153 $ 10,470,107 $ 4,872,248 (continued) 33 CITY ®F' I)ITBiJQIJE, I®WA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2008 Business-type Activities - Sewage Disposal Water Stormwater Parking Works Utility Utility Facilities RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating income (loss) $ (635,756) $ 152,062 $ 312,288 $ 133,209 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities Depreciation Change in assets and liabilities (Increase) decrease in receivables (Increase) decrease in inventories and prepaid items Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase in unearned revenue Total Adjustments 1,130,184 764,908 364,773 513,575 20,394 11,448 (74,399) (16,470) - (1,174) - - (609,208) 63,968 247,134 (170,594) (4,598) 20,824 481 (5,505) - - - 6,417 536,772 859,974 537,989 327,423 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ (98,984) $ 1,012,036 $ 850,277 $ 460,632 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Contributions of capital assets from other funds and outside sources $ 799,394 $ 368,410 $ 927,344 $ 1,038,559 Contributions of capital assets to Governmental Activities $ 126,750 $ - $ - $ - See notes to financial statements. Exxls><T 7 (continued) Enterprise Funds Governmental America's Other Activities- River Enterprise Internal Project Funds Total Service Funds $ (124,559) $ (2,521,633) $ (2,684,389) $ 382,948 - 423,101 3,196,541 5,671 - (27,982) (87,009) (113,918) - (8,079) (9,253) (2,889) - 13,747 (454,953) 493,361 - 66,516 77,718 (25,108) - - 6,417 - - 467,303 2,729,461 357,117 $ (124,559) $ (2,054,330) $ 45,072 $ 740,065 $ - $ - $ 3,133,707 $ - $ 1,351,033 $ - $ 1,477,783 $ - 34 CITY ®~ I)iT~iJQiJE, I®WA STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES AGENCY FUNDS ExxIBIT a J[JNE 30, 200a Agency Funds ASSETS Cash and pooled cash investments $ 959,930 Accounts receivable 7,235 Accrued interest 3,445 Total Assets $ 970,610 LIABILITIES Accounts payable $ - Due to other agency 970,610 Total Liabilities $ 970,610 See notes to financial statements. 35 CITY ®F I)LTBiTQiJE, I®A NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 The notes to financial statements contain a summary of significant accounting policies and other notes considered necessary for an understanding of the financial statements of the City and are an integral part of this 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. Interfund Balances and Transfers 5. Capital Assets 6. Long-term Debt 7. Risk Management 8. Commitments and Contingent Liabilities 9. Postemployment Health Care Benefits 10. Employee Retirement Systems 11. Conduit Debt 12. Landfill Closure and Postclosure Care 13. Leases Where City is Lessor 14. Subsequent Events 15. New Governmental Accounting Standards Board (GASB) Standards 36 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2005 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity The City of Dubuque, Iowa, is a municipal corporation governed by an elected mayor and asix-member council. As required by accounting principles generally accepted in the United States of America, these financial statements present the City and its component unit, an entity for which the City is considered to be financially accountable. The City has no blended component units. The 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. The component unit also has a June 30 year end. Discretely Presented Component Unit 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 Agency's purpose 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. Complete financial statements for the Agency may be obtained from the City of Dubuque. City of Dubuque Finance Department 50 West 13`h Street Dubuque, Iowa 52001 Jointly Governed Organizations The City also 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-911 Committee Dubuque Drug Task Force Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component unit. 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 ba~siness-type activities, which rely to a significant extent on fees and charges for services. Likewise, the primary government is reported separately from the legally separate component zrnit for which the primary government is financially accountable. (continued on next page) 37 CITY ®F I)LTBiTQiJE, I®WA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2005 The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenz~es 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 or segment. Taxes and other items not properly included among program revenues are reported instead as general 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 for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement foca~s and the modified accr•zral basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. 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 Employee Beneftts Fzrnd is used to account for pension and related employee benefit costs for those employees paid wages from the General Fund. 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 Street Consri•zrction Farnd is used to account for the resources and costs related to street capital improvements. (continued on next page) 38 ~I~ F ®~ ~~B~~U~y I® VV NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 The General Construction Fund is used to account for the resources and costs related to nonassignable capital improvements. The City reports the following major proprietary funds: The Setivage Disposal Works Fzrnd is used to account for the operations of the City's sewage disposal works and services. The Water Utility Fzrnd 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 Fzrnd is used to account for the operations of the City-owned parking ramps and other parking facilities. The America's River Project is used to account for the construction of all projects covered by the Vision Iowa Grant, including all matching funds.. 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 acost-reimbursement basis. Fiduciary funds account for assets held by the City in a trustee or agency capacity for the benefit of others and cannot be used to support City activities. Fiduciary funds, other than agency funds, use the economic resources measurement focus and the fidl accrual basis of accounting. Agency funds use the full accrual basis of accounting but do not have a measurement focus and therefore report only assets and liabilities. The City reports Agency Funds to account for assets held by the City as an agent under the cable franchise agreement and for the Dubuque Racing Association. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the City's water and sewer function and various other functions of the City. Eliminations of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenzres 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 revenzres rather than as program revenues. Likewise, general revenues include all taxes. (continued on next page) 39 CITY ®F I)IJ~iTQiTE, I®WA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2005 Proprietary funds distinguish operating revenues and expenses from nonoperati~g items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise funds and of the City's internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. Assets, Liabilities, and Equity Deposits and Investments The City's cash 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. Investments are stated at fair value or amortized cost. Amortized cost is used only for money market investments that have a remaining maturity at time of purchase of one year or less. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year 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." Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available fmancial 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 unpaid taxes from the current year. The succeeding year property tax receivable represents taxes certified by the City to be collected in the next fiscal year for the purposes set out in the budget for the next fiscal year. By statute, the City is required to certify its budget to the County Auditor by March 15 of each year for the subsequent fiscal year. However, by statute, the tax asking and budget certification for the following fiscal year becomes effective on the first day of that year. Although the succeeding year property tax receivable has been recorded, the related revenue is deferred in both the government-wide and fund financial statements and will not be recognized as revenue until the year for which it is levied. (continued on next page) 40 CITY ®F' I)IJ~IT~LTE, I®WA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2005 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 I and March 1. On September 30 and March 31, the bill becomes delinquent, and penalties and interest may be assessed by the government. Inventories and Prepaid Items Inventories included in the governmental funds are valued at cost using the first-in, first-out (FIFO) basis. 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 basis. Inventories included in internal service funds are stated at the lower of cost (FIFO basis) or market and consist of consumable supplies. The cost of these supplies is recorded as an expense at the time they are removed from inventory for use. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. 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 balance sheet/statement of net assets 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 agreements and the City's cable television franchise 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. (continued on next page) 41 ~I 1 % ®F' ~ V ~~~ V ~y 1®~ NOTES TO FINANCIAL STATEMENTS J[JNE 30, 2008 Capital Assets Capital assets, which include property, plant, equipment, 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 assets and in the proprietary funds statement of net assets. Capital assets are defined by the government as assets with an initial, individual cost of more than $100,000 for infrastructure assets, $20,000 for building assets, and $10,000 for the remaining assets, and an estimated useful life of more than a year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repair that do not add to the value of the asset or materially extend 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. Interest incurred during the construction phase of capital assets of business-type activities is not included as part of the capitalized value of the assets constructed. Property, plant, and equipment of the primary government, as well as the component unit, is 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 15 to 75 Compensated Absences The City allows employees to accumulate 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 are paid for 25% of all eligible hours (50% in the case of police and fire employees). 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 reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, bond issuance costs, 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 and deferred amount on refundings. 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 issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. (continued on next page) 42 CITY ®F I)U~U~UE, I®VVA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 Equity The Dubuque Metropolitan Area Solid Waste Agency's restricted net assets represent 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 assets restricted for minority interest is calculated at 22.7% of unrestricted net assets, based on the 1976 revenue bond resolution authorizing the issuance of revenue bonds for the construction of the landfill. In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. Budgets and Budgetary Accounting The budgetary comparison and related disclosures are reported as Required Supplementary Information. During the year ended June 30, 2008, disbursements did not exceed the amounts budgeted in any function. NOTE 2 -DEFICIT FUND EQUITY The following funds have deficit net asset amounts as of June 30, 2008: Enterprise America's River Project $ 30,947 Internal Service General Service $ 12,405 Workers' Compensation Reserve $ 119,142 The America's River Project deficit is a result of expenses incurred that are eligible for reimbursement as projects are completed. The General Service deficit will be addressed during next fiscal year's reallocation of expenses. The Worker's Compensation Reserve deficit is a result of a number of projected settlements at fiscal year end that will be paid during next fiscal year with additional funding to cover. 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 $11,262 for the City and $450 for the Dubuque Metropolitan Area Solid Waste Agency. Deposits. At year-end, the City's carrying amount of deposits was $45,234,910, and the bank balance was $46,041,956. The City's deposits in banks at June 30, 2008, were entirely covered by federal depository insurance or by the State Sinking Fund in accordance with Chapter 12C of the Code of Iowa. This chapter provides for additional assessments against the depositories to insure there will be no loss of public funds. The carrying amount of deposits for the Dubuque Metropolitan Area Solid Waste Agency was $10,793,680, and the bank balance was $11,130,680. The Agency's deposits in banks at June 30, 2008, were entirely covered by federal depository insurance or by the State Sinking Fund in accordance with Chapter 12C of the Code of Iowa. (continued on next page) 43 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 Investments. As of June 30, 2008, the City had the following investments and maturities. (The City assumes callable bonds will not be called): Investment Maturities (In Yearsl Investment Tvne Less than 1 1 to 5 6 to 10 More than 10 Total Mutual Funds - U.S. Treasury U.S. Treasury Securities Federal Agency Obligations Corporate Stock 2,759,138 $ 443,936 76,061 701,679 8,771,224 - $ 4,070,524 - $ 2,759,138 - 701,679 9,843,802 23,129,486 76,061 3,279.135 9,472,903 4.070.524 9.843,802 26,666.364 The City and the Dubuque Metropolitan Solid Waste Agency are authorized by statute to invest public funds in obligations of the United States government, its agencies and instrumentalities; certificates of deposit or other evidences of deposit at federally insured depository 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 h•usts; and warrants or improvement certificates of a drainage district. Corporate stock was donated in 1957 to the City to establish the Ella Lyons Peony Trail Permanent Trust Fund. 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. 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. Czzstodial 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. Czzstodial 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. (continued on next page) 44 CITY ®F LTBITQUE, I®i~r~ NOTES TO FINANCIAL STATEMENTS ,I[JNE 30, 2008 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, community development, tort liability, road use tax, cable TV, general construction, transit system, general service, garage service, and stores/printing funds. The Dubuque Metropolitan Area Solid Waste Agency had no investments at June 30, 2008. A reconciliation of cash and investments as shown on the government-wide statement of net assets for the primary government and statement of fiduciary assets and liabilities follows: Cash on hand Carrying amount of deposits Carrying amount of investments Total Government-wide Cash and pooled cash investments Cash and pooled cash investments -temporarily restricted Cash and pooled cash investments -permanently restricted Fiduciary Cash and pooled cash investments Total $ 11,262 45,234,910 26,666,364 71.912,536 $ 49,699,727 21,164,818 88,061 959.930 71,912,536 A reconciliation of cash and investments as shown on the government-wide statement of net assets for the Dubuque Metropolitan Solid Waste Agency follows: Cash on hand $ 450 Carrying amount of deposits 10,793,680 Total 10.794.130 Cash and pooled cash investments $ 7,168,906 Cash and pooled cash investments -temporarily restricted 3,625,224 Total 10.794.130 NOTE 4 - INTERFUND BALANCES AND TRANSFERS Interfund balances at June 30, 2008, include amounts due to/from other funds and advances due to/from other funds. Due to/from other funds balances represent amounts due to the general fund from the nonmajor enterprise funds ($480,712) for deficit pooled cash balances. Advances to/from other fund balance of $254,383 represent amounts due to the general fund from the water utility fiznd for a construction loan. (continued on next page) 45 l~i~E ®~ ~U~~UL' y I® VV~ NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 Interfund transfers for the year ended June 30, 2008, consisted of the following: Transfer from Nonmajor Sewage Employee Community Street General Governmental Disposal General Benefits Development Construction Construction Funds Works Transfer to General $ - $ 2,442,595 $ 123,226 $ 23,950 $ 421,949 $ 637,672 $ 6,400 Community development 23,394 - - - - 353,819 - Street construction 168,816 - - - - 890,225 - General construction 215,562 - - - - 339,910 - Nonmajorgovernmental 1,429,936 - - 14,189 6,395,049 1,054,888 - Sewage disposal works - - - - - 121,449 - Water utility - - - - - 21,953 - Stormwaterutility 634,066 - - - - 69,133 - America's River Project 831,431 - - 661,384 221,999 18,461 - Nonmajor enterprise 1,070,053 - - - - - - $ 4,373,258 $ 2,442,595 $ 123,226 $ 699,523 $ 7,038,997 $ 3,507,510 $ 6,400 Transfer from America's Nonmajor Internal Water Stormwater Parking River Enterprise Service Utility Utility Facilities Project Funds Funds Total Transfer to General $ 7,575 $ 100,960 $ 9,900 $ 13,804 $ 16,000 $ 6,436 $ 3,810,467 Community development - - - - - - 377,213 Street construction - - - - - - 1,059,041 General construction - - 45,945 59,389 - - 660,806 Nonmajor governmental - - - - - - 8,894,062 Sewage disposal works - - - - - - 121,449 Water utility - - - - - - 21,953 Stormwater utility - - - 147,533 - - 850,732 America's River Project - 33,172 - - - - 1,766,447 Nonmajor enterprise - - - - - - 1,070,053 $ 7,575 $ 134,132 $ 55,845 $ 220,726 $ 16,000 $ 6,436 18,632,223 Transfer to governmental act ivities capital assets from enterprise funds 1,477,783 $ 20,110,006 (continued on next page) 46 CITY ®F I)U~UQUE, I®WA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 In the fund financial statements, total transfers out of $20,110,006 are greater than total transfers in of $18,632,223 because of the treatment of transfers of capital assets to the governmental activities capital assets. During the year, capital assets related to America's River Project and street projects with a book value of $1,477,783 were transferred to governmental activities capital assets. No amounts were reported in the governmental funds, as the amounts did not involve the transfer of financial resources. However, America's River Project and Sewage Disposal Works did report transfers out for the capital resources given. 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. During the year ended June 30, 2008, according to grant requirements, the City made various transfers into the America's River Project Fund to finance capital assets. When completed, these capital assets are transferred to their respective fund. NOTE 5 -CAPITAL ASSETS Capital asset activity for the year ended June 30, 2008, was as follows: Primary Government: Governmental activities: Capital assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital assets, being depreciated: Beginning Transfers Transfers Ending Balance In Out Increases Decreases Balance $ 51,912,748 $ - $ - $ 8,003,356 $ (2,744,405) $ 57,171,699 16,067,956 24,164,260 (26.187.286) 14,044,930 67.980,704 Buildings 101,663,541 - Improvements other than buildings 15,028,954 202,296 Machinery and equipment 25,636,645 755,944 Infrastructure 178.774.083 519,543 Total capital assets, being 32,167.616 (28.931.691) 71,216,629 - 4,482,167 - 106,145,708 (339,982) 354,589 - 15,245,857 (37,594) 3,478,384 (1,154,241) 28,679,138 8,704,058 (455,6211 187.542,063 depreciated 321,103.223 1,477.783 (377.5761 17.019,198 (1,609,862) 337.612,766 (continued on next page) 47 CITY ®F I)LT~LT~iTE, I®WA NOTES TO FINANCIAL. STATEMENTS JUNE 30, 2005 Beginning Transfers Transfers Ending Balance In Out Increases Decreases Balance Less accumulated depreciation for: Buildings $ (20,461,542) $ Improvements other than buildings (4,551,420) Machinery and equipment (10,860,285) Infrastructure (42,658.059) _ Total accumulated depreciation (78,531,306) _ Total capital assets, being - $ - $ (1,700,670) $ - $ (22,162,212) - - (490,042) - (5,041,462) - 37,594 (2,557,838) 1,473,172 (11,907,357) _ - (1,521,1481 72,430 (44,106.777) 37,594 (6,269,698) 1,545.602 (83.217.808) depreciated, net 242.57.1,917 1,477.783 (339,982) 10.749,500 (64.260) 254,394,958 Governmental activities capital assets, net $ 310.552.621 $ 1.477.783 (339.9821 $ 42,917,116 (28.995.9511 325.611.587 Business-type activities: Beginning Transfers Transfers Ending Balance In Out Increases Decreases Balance Capital assets, not being depreciated: Land $ 3,364,857 $ - $ - $ - $ - $ 3,364,857 Construction in progress 5.298,854 147,533 (1,625,3161 10.794,957 (8.225,091) 6,390.937 Total capital assets, not being depreciated 8,663,711 147,533 (1,625,3161 10.794,957 (8.225.091) 9,755.794 Capital assets, being depreciated: Buildings 60,964,620 - - 863,715 - 61,828,335 Improvements other than buildings 55,727,107 339,982 - 6,015,763 - 62,082,852 Machinery and equipment 47,778,284 37,594 1,686,498 (284,462) 49,217.914 Total capital assets, being depreciated 164,470,011 377,576 8,565,976 (284,462) 173,129.101 Less accumulated depreciation for: Buildings (36,917,800) - Improvements other than buildings (15,906,606) - Machinery and equipment (19,924,342) (37,5941 Total accumulated depreciation (72,748,748) (37,5941 Total capital assets, being depreciated, net 91,721,263 339,982 - (987,101) - (37,904,901) - (1,028,096) - (16,934,702) _ (1,181,344) 284.462 (20.858,818) (3.196.541) 284,462 (75.698.421) 5.369.435 97,430.680 Business-type activities capital assets, net $ 100.384.974 $ 487,515 (1.625.3161 $ 16 164 392 $ (8.225.0911 $ 107.186.474 (continued on next page) 48 CITY ®I+' I)I.T~iJQZJE, I®WA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 Depreciation expense was charged to functions/programs for the primary government as follows: Governmental activities: Public safety $ 731,380 Public works 3,545,681 Health and social services 7,068 Culture and recreation 1,789,502 Community and economic development 35,243 General government 155,153 Capital assets held by the government's internal service funds are charged to various functions based on their usage of their assets 5,671 Total depreciation expense -governmental activities $ 6.269.698 Business-type activities: Sewage disposal works $ 1,130,184 Water utility 764,908 Stormwater utility 364,773 Parking facilities 513,575 Refuse collection 115,891 Transit system 307,210 Total depreciation expense -business-type activities $ 3,196,541 Component Unit: Dubuque Metropolitan Area Solid Waste Agency: Beginning Ending Balance Increases Decreases Balance Capital assets, not being depreciated: Land $ 1,586,092 $ - $ - $ 1,586,092 Capital assets, being depreciated: Buildings 65,922 - - 65,922 Improvements other than buildings 7,468,652 - - 7,468,652 Machinery and equipment 2,201,318 459,686 (299,318) 2,361,686 Total capital assets, being depreciated 9,735,892 459,686 (299,3181 9,896,260 Less accumulated depreciation for: Buildings (45,068) (719) - (45,787) Improvements other than buildings (5,134,490) (435,385) - (5,569,875) Machinery and equipment (1,354,390) (276,362) 160,489 (1,470,263) Total accumulated depreciation (6,533,948) (712,466) 160,489 (7,085,9251 Total capital assets, being depreciated, net 3,201,944 (252,780) (138,8291 2,810,335 Dubuque Metropolitan Area Solid Waste Agency capital assets, net 4.788.036 $ (252.7801 $ (138.8291 ~ 4,396.427 Depreciation expense of $712,466 was charged to the Dubuque Metropolitan Area Solid Waste Agency. (continued on next page) 49 ~I 1 ~ ®~ ~~~~~~Ey I®~~ NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 NOTE 6 -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 $43,940,000. 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, 2008, are as follows: In a prior year, the City defeased general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on t he old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's fmancial statements. On June 30, 2008, $3,345,000 of bonds outstanding are considered defeased. These b onds will remain outstanding until they are called on June 1, 2009. Amount Amount Date of Interest Originally Outstanding Purpose Issue Maturity Dates Rates Issued End of Year Corporate purpose 06/01/00 06/01/02-06/01/09 5.80% $ 2,750,000 $ 125,000 Corporate purpose 11/O1/00 06/01/02-06/01/17 5.13 6,265,000 285,000 Corporate purpose 12/27/01 06/01/05-06/01/21 4.00-4.90 9,500,000 7,815,000 Corporate purpose 01/09/02 06/01/04-06/01/21 4.10-4.95 2,860,000 2,205,000 Corporate purpose 03/26/02 06/01/03-06/01/21 4.00-5.00 1,000,000 780,000 Corporate purpose and refunding 12/03/02 06/01/03-06/01/17 3.50-4.30 3,105,000 1,600,000 Corporate purpose 10/15/03 06/01/04-06/01/23 3.20-4.75 2,110,000 1,680,000 Corporate purpose 04/18/05 06/01/06-06/01/24 3.15-5.00 9,015,000 7,865,000 Corporate purpose 04/03/06 06/01/07-06/01/25 3.80-4.20 2,900,000 2,705,000 Corporate purpose 04/03/06 06/01/07-06/01/21 3.60-4.20 910,000 825,000 Refunding 04/03/06 06/01/10-06/01/20 3.65-4.10 3,525,000 3,525,000 Corporate purpose and refunding 12/01/07 06/10/10-06/01/17 3.75 2,965,000 2,965,000 Corporate purpose 12/01/07 06/10/09-06/01/17 3.40-3.65 1,055,000 1,055,000 47.960.000 $ 33.430.000 Annual debt service requirements to maturity for general obligation bonds are as follows: Fiscal Year Ending June 30 2009 2010 2011 2012 2013 2014-2018 2019-2023 2024-2025 Total Governmental Activities Principal Interest $ 1,305,000 $ 951,006 1,470,213 896,949 1,532,340 837,529 1,584,468 774,282 1,628,723 707,570 8,917,766 2,423,343 5,421,490 491,789 Business-tvpe Activities Princi a)~ 1 Interest $ 700,000 $ 460,020 684,787 432,882 712,660 408,862 740,532 383,151 761,277 355,869 4,187,234 1,314,061 3,218,510 484,377 565,000 33,570 21.860.000 7.082.468 ~ 11.570.000 3.872.792 (continued on next page) 50 CITY ®F' 1)iTBUQiJE, I®i~A NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 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 generally are issued as serial bond s with varying amounts of principal maturing annually and with interest payable semi-annually. The original amount of tax increment financing bonds issued in prior years was $4,568,538. Tax increm ent financing bonds outstanding at June 30, 2008, are as follows: Amount Amount Date of Interest Originally Outstanding Issue Maturity Dates Rates Issued End of Year Advanced Data- Comm 03/18/99 12/31/01-06/30/11 6.0% $ 900,000 $ 279,220 Cartegraph Systems 12/01/99 12/31/01-12/31/10 8.8 360,000 112,607 Eagle Window & Door 02/15/00 12/31/02-06/30/12 9.1 3,168,538 1,610,775 Vessel Systems 12/30/03 12/30/05-06/30/15 8.0 140,000 108,799 Diamond Jo Parking Ramp 10/16/07 06/01/11-06/01/37 7.5 23,025,000 23,025,000 27.593.538 $ 25,136,402 Annual debt service requirements to maturity for tax increment financing bonds are as follows: Fiscal Year Ending June 30 Governmental Activities Principal Interest 2009 $ 524,727 $ 1,898,128 2010 569,630 1,853,225 2011 774,204 1,805,199 2012 778,939 1,742,354 2013 346,617 1,686,616 2014-2018 2,097,285 8,006,677 2019-2023 2,965,000 7,104,000 2024-2028 4,245,000 5,814,375 2029-2033 6,100,000 3,963,750 2034-2039 6,735,000 1,308,376 Total ~ 25,136.402 35.182.700 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 generally are issued as serial bonds with varying amounts of principal maturing annually and with interest payable semi-annually. Revenue bonds outstanding at June 30, 2008, are as follows: Amount Amount Date of Interest Originally Outstanding Purpose Issue Maturity Dates Rates Issued End of Year Parking facilities 03/01/98 05/01/98-OS/O1/10 4.70-4.75% 2.515,000 ~ 490.000 (continued on next page) 51 CITY ®F I3LTBIJQLTE, I®VVA NOTES TO FINANCIAL STATEMENTS .TUNE 30, 2008 Revenue bond debt service requirements to maturity are as follows: Fiscal Year Ending June 30 2009 2010 Total Business-type Activities Princi a~ Interest $ 240,000 $ 23,155 250,000 11,875 $ 490,000 35.030 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, 2008, are as follows: Amount Amount Date of Interest Originally Outstanding Issue Maturity Dates Rates Issued End of Year Adams Company 02/13/04 06/01/05-06/01/15 4.07% $ 500,000 $ 318,182 Lower Main Development 06/30/04 12/31/06-06/30/16 8.00 182,000 155,415 Theisen Supply 11/22/06 12/31/08-06/30/18 8.25 806,039 806,039 ~ 1.488.039 1.279.636 Annual debt service requirements to maturity for notes payable are as follows: Fiscal Year Ending June 30 2009 2010 2011 2012 2013 2014-2018 Total Governmental Activities Principal Interest $ 114,873 $ 90,844 120,679 83,187 126,973 75,044 133,792 66,374 141,183 55,284 642,136 129,615 1.279.636 ~ 500,348 Capital Loan Notes. 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. Amount Date Interest Amount Outstanding Planning Authorized Maturity Dates Rates Authorized End of Year Northfork Catfish Creek Project 1 12/28/06 12/01/2008-06/01/2028 3.25% $ 85,000 $ 82,990 Construction Drinking Water 10/01/07 Northfork Catfish Creek Project 2 12/28/06 Northfork Catfish Creek Project 3 12/28/06 12/01/2008-06/01/2028 3.25% 12/01/2008-06/01/2028 3.25% 12/01/2008-06/01/2028 3.25% 1,037,000 453,336 231,700 19,133 168,850 56,538 1.522.550 ~ 611,997 (continued on next page) 52 2009 $ 22,070 $ 19,711 2010 22,867 18,985 2011 23,617 18,236 2012 24,390 17,462 2013 25,190 16,663 2014-2018 138,882 70,382 2019-2023 163,174 46,090 2024-2028 191,807 17,549 Total $ 611.997 ~ 225,078 At June 30, 2008, the City of Dubuque had $910,553 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 2009. Changes in Long-term Liabilities. Long-term liability activity for the year ended June 30, 2008, was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental activities: General obligation bonds $ 22,990,000 $ 2,965,000 $ (4,095,000) $ 21,860,000 $ 1,305,000 Less: Unamortized discounts (49,015) (26,050) 32,901 (42,164) - Deferred amount on refunding (70,3392 - 5,410 (64,929) - Total general obligation bonds 22,870,646 2,938,950 (4,056,689) 21,752,907 1,305,000 Tax increment financing bonds 2,594,831 23,025,000 (483,429) 25,136,402 524,727 Less: Unamortized discounts - (266,158) 8,872 (257,286) - Total tax increment financing bonds 2,594,831 22,758,842 474,557 24,879,116 524,727 Notes payable 1,279,885 X8,696 (58,945) 1,279,636 114,873 Compensated absences 2,442,166 2,540,145 (2,442,166) 2,540,145 2,540,145 29.187.528 ~ 28.296.633 (7.032.3571 ~ 50,451,804 $ 4.484.745 (continued on next page) 53 CITY ®F 1)ZT~UQLTE, I®WA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 Beginning Ending Due Within Balance Additions Reductions Balance One Year Business-type activities: General obligation bonds $ 11,090,000 $ 1,055,000 $ (575,000) $ 11,570,000 $ 700,000 Less: Unamortized discounts (78,452) (5,908) 5,767 (78,593) - Deferred amount on refunding (115,955) - 8,919 (107,036) - Total general obligation bonds 10,895,593 1,049,092 (560,314) 11,384,371 700,000 Revenue bonds 720,000 - (230,000) 490,000 240,000 Capital loan notes - 611,997 - 611,997 22,070 Compensated absences 281,474 331,500 (281,474) 331,500 331,500 11.897.067 $ 1.992.589 $ (1.071.7881 12.817.868 1.293.570 For the governmental activities, compensated absences are generally liquidated by the General Fund, Community Development Fund, and Section VIII Housing Fund. NOTE 7 -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 and participates in a local government risk pool. 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 $85,000, and an aggregate stop loss of $6,075,095 for 2008. 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. Workers' compensation benefits were self-insured up to a specific stop loss amount of $450,000, and an aggregate stop loss consistent with statutory limits for 2008. 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. (continued on next page) 54 CI'T'Y ®F' 1)iJ~iJQI.TE, I®i~A NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 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 liability of $829,027 in the Health Insurance Reserve Fund and $774,612 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 for the fiscal years ended June 30, 2008 and 2007, are summarized as follows: Health Workers' Liabilities at June 30, 2006 Claims and changes in estimates during fiscal year 2007 Claim payments Liabilities at June 30, 2007 Claims and changes in estimates during fiscal year 2008 Claim payments Liabilities at June 30, 2008 Insurance Compensation Reserve Fund Reserve Fund $ 657,846 $ 356,082 4,771,063 336,207 (4,714,363) (273,9091 714,546 418,380 5,012,424 969,483 (4,897,943) (613,251) ~ 829.027 $ 774,612 The City is a member in the Iowa Communities Assurance Pool, as allowed by Chapter 670.7 of the Code of Iowa. The Iowa Communities Assurance Pool (Pool) is a local government risk-sharing pool whose 570 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 membership and are maintained to equa1200 percent of the total current members' basis rates or to comply with the requirements of any applicable regulatory authority having jurisdiction over the Pool. The Pool also provides property coverage. Members who elect such coverage make annual operating contributions which are necessary to fund, on a cash basis, the Pool's general and administrative expenses and reinsurance premiums, all of which are due and payable in the current year, plus all or any portion of any deficiency in capital. Any year-end operating surplus is transferred to capital. Deficiencies in operations are offset by transfers from capital and, if insufficient, by the subsequent year's member contributions. The City has property insurance coverage in addition to the Pool. (continued on next page) 55 ~1~I ®~ AJI.I~U~iJ~y 1® Vr~ NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 The City's property and casualty contributions to the risk pool are recorded as expenditures from its operating funds at the time of payment to the risk pool. The City's annual contributions to the Pool for the year ended June 30, 2008, were $540,570. The Pool uses reinsurance and excess risk-sharing agreements to reduce its exposure to large losses. The Pool retains general, automobile, police professional, and public officials liability risks up to $350,000 per claim. The next $2,650,000 in claims are covered with another pool (APEEP). Claims exceeding $3,000,000 are reinsured. Property and automobile physical damage risks are retained by the Pool up to $100,000 each occurrence, each location, with excess coverage reinsured on an individual-member basis. The Pool's intergovernmental contract with its members provides that in the event a casualty claim or series of claims exceeds the amount of risk-sharing protection provided by the member's risk-sharing certificate, or in the event that a series of casualty claims 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, 2008, settled claims have not exceeded the risk pool or reinsurance company coverage since the Pool's inception. Members agree to continue membership in the Pool 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, payments for all claims and claims expenses become the sole responsibility of the withdrawing member, regardless of whether a claim was incurred or reported prior to the member's withdrawal. Members withdrawing within the first six years of membership may receive a partial refund of their capital contributions. If a member withdraws after the sixth year, the member is refunded 100 percent of its capital contributions. However, the refund is reduced by an amount equal to the annual operating contribution which the withdrawing member would have made for the one-year period following withdrawal. NOTE 8 -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 general fund or other applicable funds. 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, 2008. Litigation The City's corporation counsel reported that as of June 30, 2008, various claims and lawsuits were on file against the City. The corporation counsel estimated that all potential settlements 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. (continued on next page) 56 ~,11 I ®~ ~l~V~iJ~.y I® Vr~ NOTES TO FINANCIAL STATEMENTS ,TUNE 30, 2008 Construction Contracts The City has recognized as a liability only that portion of construction contracts representing construction completed through June 30, 2008. The City has additional commitments for signed construction contracts of $18,316,799 as of June 30, 2008. These commitments will be funded by federal and state grants, cash reserves, and bond proceeds. NOTE 9 - POSTEMPLOYMENT HEALTH CARE BENEFITS In addition to providing pension benefits, the City provides certain health care benefits for retired disabled police officers and firefighters as mandated by the Code of Iowa. The cost of health care benefits for retired disabled police officers and firefighters is recognized as an expenditure as claims are paid. As of June 30, 2008, 55 retirees were eligible for these benefits, and the cost of the benefits for the fiscal year ended June 30, 2008, totaled $13,421. NOTE 10 -EMPLOYEE RETIREMENT SYSTEMS MFPRSI The City contributes to the Municipal Fire and Police Retirement System of Iowa (the Plan), which is a cost-sharing, multiple-employer defined benefit pension plan administered by a Board of Trustees. The Plan provides retirement, disability, and death benefits which are established by state statute to plan members and beneficiaries. The Plan issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to Municipal Fire and Police Retirement System of Iowa, 7155 Lake Drive, Suite 201, West Des Moines, Iowa, 50266. Plan members are required to contribute 9.35% of earnable compensation, and the City is required to contribute 25.48% of earnable compensation. Contribution requirements are established by state statute. The City's contributions to the Plan for the years ended June 30, 2008, 2007, and 2006, were $2,632,282, $2,730,207, and $2,704,451, respectively, which met the required minimum contribution for each year. IPERS The City contributes to the Iowa Public Employees Retirement System (IPERS) which is acost-sharing multiple-employer defined benefit pension plan administered by the State of Iowa. IPERS provides retirement and death benefits which are established by state statute to plan members and beneficiaries. IPERS issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to IPERS, P.O. Box 9117, Des Moines, Iowa, 50306-9117. Plan members are required to contribute 3.90% of their annual covered salary, and the City is required to contribute 6.05% of annual covered payroll. Contribution requirements are established by state statute. The City's contributions to IPERS for the years ended June 30, 2008, 2007, and 2006, were $1,200,182, $1,071,260, and $1,016,907, respectively, equal to the required contributions for each year. (continued on next page) 57 CI'T'Y ®F I)iT~IT~iTE, I®WA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 NOTE 11 -CONDUIT DEBT From time to time, the City has issued Industrial Revenue Bonds to provide fmancial assistance to private-sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of June 30, 2008, there was one series of Industrial Revenue Bonds outstanding, with an aggregate principal amount payable of $650,000. NOTE 12 -LANDFILL CLOSURE AND POSTCLOSURE CARE State and federal laws and regulations require the Dubuque Metropolitan Area Solid Waste Agency to place a final cover on each cell of its landfill site when filled and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that each cell stops accepting waste, the Agency reports a portion of these closure and postclosure care costs as an operating expense in each period based on landfill capacity used as of each statement of net assets date. The $3,136,395 reported as landfill closure and postclosure care liability at June 30, 2008, represents the cumulative amount reported to date based on the use of 100% of the estimated capacity of cells 3 and 4, the use of 90% of the estimated capacity of cells 5 and 6, and the use of 30% of the estimated capacity of cells 7 and 8. The Agency will recognize the remaining estimated cost of closure and postclosure care of $961,405 as the remaining capacity is filled. These amounts are based on what it would cost to perform all closure and postclosure care in 2008. The Agency expects to close cells 3 and 4 in 2009, cells 5 and 6 in 2011, and cells 7 and 8 in 2014. The Agency is making plans to construct a second generation of cells to extend the life of the landfill to 2050. Actual cost may be higher due to inflation, changes in technology, or changes in regulations. The Agency has begun to accumulate resources to fund these costs in accordance with state and federal financial assurance requirements. At June 30, 2008, funds have been restricted for closure and postclosure costs in the amount of $3,386,078, which exceeds the liability currently recognized. 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, 2008 is $7,581,159, with $142,423 of depreciation expense during the year ended June 30, 2008. The DRA lease amount is based on the association's gross gambling receipts. During the year ended June 30, 2008, the DRA lease generated $9,720,429 in lease revenue. (continued on next page) 58 CITY OI+' LTBIJQiTE, IOWA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2008 NOTE 14 -SUBSEQUENT EVENTS On October 6, 2008, the City authorized $3,885,000 of General Obligation Bonds, Series 2008A to support stormwater management facilities and improvements, including costs associated with Bee Branch Creek Restoration Project. The interest rate on the bonds range from 3.75% to 4.80% with a maturity date of June 1, 2028. The funds to repay the bonds will be generated via stormwater user fees. On October 6, 2008, the City authorized $3,290,000 of Greater Downtown Urban Renewal District General Obligation Bonds Series 2008B to support the Library Renovation Project and building renovations and improvements to the former Kephart's Building and the non-taxable portion of bonds ($455,000) for the Dubuque Industrial Center West, North Siegert Farm demolition and grading project. The interest rate on the bonds range from 3.75% to 4.25% with a maturity date of June 1, 2023. The funds to repay the debt will be tax increment revenues of the Greater Downtown Urban Renewal District. On October 6, 2008, the City authorized $2,465,000 of Urban Renewal General Obligation Bonds for Urban Renewal taxable Series 2008C to support the Dubuque Industrial Center West Economic Development District, North Siegert Farm demolition and grading project. The interest rate on the bonds range from 5.25% to 5.50% with a maturity date of June 1, 2018. The funds to repay the bonds will be tax increment revenues. On October 6, 2008, the City authorized $1,195,000 Water Revenue Bonds Series 2008D to support water main replacements and repairs, construction of water main extensions, and the installation of pump station radio communication equipment and facilities. The interest rate on the bonds range from 3.00% to 5.00% with a maturity date of June 1, 2023. The funds to repay the bonds will be generated from water utility fees. The City will be borrowing funds for a number of sanitary sewer and stormwater projects and for significant upgrades to the Water Pollution Control Plant. Plans provide for the use of Clean Water State Revolving Fund (SRF) through the Iowa Finance Authority. The loans include construction and planning and design with Intended Use Plans (IUP) for approximately $65,000,000 filed. Construction loans provide a 3% interest rate, .25% annual service fee and a 1% origination fee. Planning and Design Loans have no interest for three years, no initiation fee and no servicing fee. NOTE 15 -NEW GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) STANDARDS The Governmental Accounting Standards Board (GASB) has issued six statements not yet implemented by the City of Dubuque. The statements, which might impact the City of Dubuque, are as follows: Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, issued June 2004, will be effective for the fiscal year ending June 30, 2009. This statement establishes standards for the measurement, recognition, and display of other postemployment benefit (OPEB) expense/expenditures and related liabilities (assets), note disclosures, and, if applicable, required supplementary information in the financial reports of state and local governmental employers. (continued on next page) 59 CI'T'Y ®F I)iT~iJQLTE, I®VVA NOTES TO FINANCIAL STATEMENTS JUNE 30, 200 Statement No. 47, Accozrnting for Termination Benefits, issued June 2005, establishes accounting standards for termination benefits. For termination benefits provided through an existing defined benefit OPEB plan, the provisions of this statement should be implemented simultaneously with the requirements of Statement No. 45. For all other termination benefits, this statement was effective for the fiscal year ended June 30, 2006. Statement No. 49, Accoarnting and Financial Reporting for Pollzrtion Remediation Obligations, issued November 2006, will be effective for the fiscal year ending June 30, 2009. This statement establishes standards for accounting and financial reporting for obligations to address the current or potential detrimental effects of existing pollution. Statement No. 51, Accounting and Financial Reporting for' Intangible Assets, issued June 2007, will be effective for the fiscal year ending June 30, 2010. This statement requires that all intangible assets not specifically excluded by its scope be classified as capital assets. Statement No. 52, Land and Other Real Estate Held as Investments by Endotivrnents, issued November 2007, will be effective for the fiscal year ending June 30, 2009. This statement establishes consistent standards for the reporting of land and other real estate held as investments by essentially similar entities. Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, issued June 2008, will be effective for the fiscal year ending June 30, 2010. This statement addresses the recognition, measurement, and disclosure of information regarding derivative instruments entered into by state and local governments. The City's management has not yet determined the effect these Statements will have on the City's financial statements. 60 REQUIRED SUPPLEMENTARY INFORMATION CITY OF DUBUQUE, IOWA CITY ®F I)iT~LT~TTE, I®WA SCHEDULE OF RECEIPTS, EXPENDITURES, AND CHANGES IN BALANCES - BUDGETAND ACTUAL (BUDGETARY BASIS GOVERNMENTAL FUNDS AND ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2008 Final to Budgeted Amounts Actual Actual Original Final Variance RECEIPTS Property tax $ 17,383,349 $ 17,430,933 $ 18,006,072 $ (622,723) Tax increment financing 4,482,540 4,357,984 4,357,984 124,556 Other City tax 10,969,356 11,197,760 11,222,621 (253,265) Licenses and permits 3,449,744 3,354,041 3,354,041 95,703 Use of money and property 20,117,201 17,729,706 17,862,548 2,254,653 Intergovernmental 14,502,333 17,157,450 37,022,711 (22,520,378) Charges for fees and service 18,400,042 24,035,801 24,228,348 (5,828,306) Special assessments 244,117 700,000 1,382,627 (1,138,510) Miscellaneous 12,250,378 4,961,654 13,516,295 (1,265,917) Total Receipts 101,799,060 100,925,329 130,953,247 (29,154,187) EXPENDITURES Public safety 20,736,955 20,906,502 21,543,195 806,240 Public works 12,885,957 10,578,404 13,477,845 591,888 Health and social services 853,367 846,181 961,972 108,605 Culture and recreation 8,479,941 8,336,448 8,502,032 22,091 Community and economic development 8,756,397 8,512,576 9,430,480 674,083 General government 5,464,091 5,674,587 6,048,553 584,462 Debt service 3,089,509 3,107,249 3,107,249 17,740 Capital projects 27,032,019 21,808,077 67,573,130 40,541,111 Business-type activities 26,220,817 37,048,839 51,349,916 25,129,099 Total Expenditures 113,519,053 116,818,863 181,994,372 68,475,319 EXCESS (DEFICIENCY) OF RECEIPTS OVER (CINDER) EXPENDITURES (11,719,993) (15,893,534) (51,041,125) 39,321,132 OTHER FINANCING SOURCES, NET 27,461,966 12,508,224 33,761,093 (6,299,127) EXCESS (DEFICIENCY) OF RECEIPTS AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES 15,741,973 (3,385,310) (17,280,032) 33,022,005 BALANCE, BEGINNING 49,212,310 49,212,310 49,212,310 - BALANCE, ENDING $ 64,954,283 $ 45,827,000 $ 31,932,278 $ 33,022,005 61 CITY ®F' I)UBU~UE, I®VVA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION -BUDGETARY REPORTING FOR THE YEAR ENDED JUNE 30, 2008 The budgetary comparison is presented as Required Supplementary Information in accordance with Governmental Accounting Standards Board Statement No. 41 for governments with significant budgetary perspective differences resulting from not being able to present budgetary comparisons for the General Fund and each major Special Revenue Fund. The Code of Iowa requires the adoption of an annual budget on or before March 15 of each year which becomes effective July I 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, 2008, was amended two times during the year to allow the City to increase function expenditures by $65,175,509, primarily for the carry-forward of unfinished capital improvement projects and expenditure of additional grants for capital improvements. The following is a reconciliation of the budgetary basis to the modified accrual basis of accounting: Modified Governmental Enterprise AccruaU Funds Funds Budgetary Accrual Accrual Modified Basis Adiustments Basis Accrual Basis Accrual Basis Total Receipts/revenues $ 101,799,060 $ 254,771 $ 102,053,831 $ 82,989,782 $ 19,064,049 $ 102,053,831 Expenditures/expenses 113.519.053 (6,499.956) 107,019,097 86,628,304 20.390,793 107.019,097 Deficiency of receipts/ revenues under expenditures/expenses (11,719,993) 6,754,727 (4,965,266) (3,638,522) (1,326,744) (4,965,266) Other fmancing sources, net 27,461,966 9,122 27.471,088 22,425,208 5,045.880 27,471,088 Net 15,741,973 6,763,849 22,505,822 18,786,686 3,719,136 22,505,822 Balance, beginning 49,212,310 102,163,970 151,376,280 48,123,530 103,252,750 151,376,280 Balance, ending ~ 64,954.283 $ 108,927.819 $ 173.882.102 66.910.216 $ 106.971 886 ~ 173.882.102 62 EC I., V UE U S Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Road Use Tax Fund -This fund is used to account for state revenues allocated to the City for maintenance and improvement of City streets. Section VIII Housing Fund -This fund is used to account for the operations of federal Section VIII existing, voucher, and moderate rehabilitation projects. Tort Liability Fund -This fund is used to collect a special property tax levy which is then transferred to the General Fund. The General Fund accounts for the administration and payment of damage claims against the City. 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. Tax Increment Financing Fund -This fund is used to account for the receipt of property taxes, for the payment of projects 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. 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. DEBT E VICE FUN 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. A I' J S LT S 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. ~Fi ANENT FUN 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. CITY ®I~' I)U~UQUE, I®WA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 200 ASSETS Cash and pooled cash investments Receivables Property tax Delinquent Succeeding year Accounts and other Special assessments Accrued interest Notes Intergovernmental Restricted cash and pooled cash investments Total Assets Road Section VIII Tort Use Tax Housing Liability $ 2,212,075 $ 1,128,495 $ 18,457 - - 5,018 - - 389,492 - 4,687 - - 2,475 - 395,682 13,206 - - 18,919 - $ 2,607,757 $ 1,167,782 $ 412,967 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable Accrued payroll Intergovernmental payable Deferred revenue Succeeding year property tax Other Total Liabilities FUND BALANCES Reserved for/by Encumbrances Long-term notes receivable Bond ordinance Debt service Franchise agreement Endowments Unreserved, undesignated reported in Special revenue funds Capital projects funds Permanent funds Total Fund Balances Total Liabilities and Fund Balances $ 118,427 $ 20,252 $ - 58,750 15,759 - - 3,256 - - - 389,492 - - 655 177,177 39,267 390,147 143,316 3,961 - - 1,775 - 2,287,264 1,122,779 22,820 2,430,580 1,128,515 22,820 $ 2,607,757 $ 1,167,782 $ 412,967 EXHIBIT A-1 Special Revenue Tax Library Special Increment Expendable Assessments Financing Cable TV Gigs Trust $ - $ 1,172,296 $ 985,834 $ 116,043 $ 3,155 - - 16,506 - - 328,204 - - - - - 73,756 2,805 660 - - 5,114,998 1,332 - - $ 328,204 $ 6,361,050 $ 1,006,477 $ 116,703 $ 3,155 $ - $ 55,888 $ 4,598 $ 886 $ - - - 9,626 - - 294,581 - 590,819 - - 294,581 55,888 605,043 886 - - - 13,924 2,066 - - 5,114,998 - - - - - - - 3,155 - - 1,332 - - 33,623 1,190,164 386,178 113,751 - 33,623 6,305,162 401,434 115,817 3,155 $ 328,204 $ 6,361,050 $ 1,006,477 $ 116,703 $ 3,155 (continued) Debt Service 63 CITY ®F' I)iJBiTQiJE, I®A COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2005 Capital Projects Airport Sales Tax Construction Construction ASSETS Cash and pooled cash investments $' 599,732 $ 2,266,416 Receivables Property tax Delinquent - - Succeeding year - - Accounts and other - - Special assessments - - Accrued interest 1,922 16,501 Notes - - Intergovernmental - 261,598 Restricted cash and pooled cash investments - - Total Assets $ 601,654 $ 2,544,515 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable $ 6,243 $ 53,009 Accrued payroll - - Intergovernmental payable - - Deferred revenue Succeeding year property tax - - Other - - Total Liabilities 6,243 53,009 FUND BALANCES Reserved for/by Encumbrances 183,948 330,919 Long-team notes receivable - - Bond ordinance - - Debt service - - Franchise agreement - - Endowments - - Unreserved, undesignated reported in Special revenue funds - - Capital projects funds 411,463 2,160,587 Permanent funds - - Total Fund Balances 595,411 2,491,506 Total Liabilities and Fund Balances $ 601,654 $ 2,544,515 EXHIBIT A-1 (continued) Permanent Funds Total Ella Lyons Library Nonmajor Peony Trail Gifts Governmental Trust Trust Funds $ - $ - $ 8,502,503 - - 5,018 - - 389,492 - - 16,506 - - 328,204 130 119 100,580 - - 2,475 - - 670,486 100,140 21,630 5,257,019 $ 100,270 $ 21,749 $ 15,272,283 $ - $ - $ 259,303 - - 84,135 - - 3,256 - - 389,492 - - 886,055 - - 1,622,241 _ _ 678,134 - - 1,775 - - 5,114,998 - - 3,155 - - 1,332 76,061 12,000 88,061 - - 5,156,579 - - 2,572,050 24,209 9,749 33,958 100,270 21,749 13,650,042 $ 100,270 $ 21,749 $ 15,272,283 64 i..ll i ®~ LIJ~fJ~l.1L` y I® VV L-, COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2008 Road Section VIII Use Tax Housing REVENUES Taxes $ - $ - Special assessments - - Intergovernmental 4,945,039 4,313,421 Charges for services - - Investmentearnings - 52,809 Contributions - - Miscellaneous 2,615 5,861 Total Revenues 4,947,654 4,372,091 EXPENDITURES Current Public safety - 21,750 Public works 5,769,816 - Health and social services - - Culture and recreation - - Community and economic development - 4,508,283 General government - - Debt service - - Capital projects - - Total Expenditures 5,769,816 4,530,033 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (822,162) (157,942) OTHER FINANCING SOURCES (USES) Issuance of debt - - Issuance of refunding bonds - - Payment to refunded bond escrow agent - - Transfers in 1,062,338 - Transfers out (115,134) (23,990) Sale of capital assets 15,275 - Total Other Financing Sources (Uses) 962,479 (23,990) NET CHANGE IN FUND BALANCES 140,317 (181,932) FUND BALANCES, BEGINNING 2,290,263 1,310,447 FUND BALANCES, ENDING $ 2,430,580 $ 1,128,515 EXHIBIT A-2 Special Revenue Tax Library Tort Special Increment Expendable Liability Assessments Financing Cable TV Gifts Trust $ 383,675 $ - $ 4,482,541 $ - $ - $ - 177,585 - - - - - 5 - - - 67,705 218,224 36,417 4,394 - - - - 94,423 - 16,171 - 636,863 - 383,675 261,461 4,700,770 673,280 98,817 _ Debt - - - 76,786 - - - - - 27,885 - - - - - - 94,127 - - - 1,026,838 - - - - 35 - 550,518 - 90,000 - - 3,078,186 - - 1,037,113 - 35 4,105,024 655,189 94,127 1,127,113 383,675 261,426 595,746 18,091 4,690 (1,127,113) - - 58,696 - - - - - - - - 2,965,000 _ _ _ _ - (2,87,000) - - 6,395,049 36,660 - 1,037,114 (382,596) (919,215) (1,316,308) (106,949) - - - - 137,000 - - - (382,596) (919,215) 5,274,437 (70,289) - 1,127,114 1,079 (657,789) 5,870,183 (52,198) 4,690 1 21,741 691,412 434,979 453,632 111,127 3,154 $ 22,820 $ 33,623 $ 6,305,162 $ 401,434 $ 115,817 $ 3,155 (continued) 65 CITY ®F I)ITIJQiJE, I®WA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2005 Capital Projects Airport Sales Tax Construction Construction REVENUES Taxes $ - $ 1,604,178 Special assessments - - Intergovernmental 86,756 - Charges for services 184,643 - Investment earnings 16,815 135,108 Contributions - - Miscellaneous - 1,799 Total Revenues 288,214 1,741,085 EXPENDITURES Current Public safety - - Public works - - Health and social services - - Culture and recreation - - Community and economic development - - General government - - Debt service - - Capital projects 109,066 1,555,101 Total Expenditures 109,066 1,555,101 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 179,148 185,984 OTHER FINANCING SOURCES (USES) Issuance of debt - - Issuance of refunding bonds - - Payment to refunded bond escrow agent - - Transfers in 234,043 128,858 Transfers out (1,860) (641,458) Sale of capital assets - - Total Other Financing Sources (Uses) 232,183 (512,600) NET CIIANGE IN FUND BALANCES 411,331 (326,616) FUND BALANCES, BEGINNING 184,080 2,818,122 FUND BALANCES, ENDING $ 595,411 $ 2,491,506 EXHIBIT A-2 (continued) Permanent Funds Total Ella Lyons Library Nonmajor Peony Trail Gifts Governmental Trust Trust Funds $ - $ - $ 6,470,394 - - 177,585 - - 9,345,216 - - 184,648 (14,945) 1,006 517,533 - - 94,423 - - 663,309 (14,945) 1,006 17,453,108 - - 98,536 - - 5,769,816 - - 27,885 2,258 - 96,385 - - 5,535,121 - - 640,553 - - 4,115,299 - - 1,664,167 2,258 - 17,947,762 (17,203) 1,006 (494,654) - - 58,696 - - 2,965,000 - - (2,875,000) - - 8,894,062 - - (3,507,510) - - 152,27 - - 5,687,523 (17,203) 1,006 5,192,869 117,473 20,743 8,457,173 $ 100,270 $ 21,749 $ 13,650,042 66 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. CITY ®I+' IJBIJQiJE, I®i~A ExxIBIT B-1 COMBINING STATEMENT OF NET ASSETS NONMAJOR ENTERPRISE FUNDS JUNE 30, 2008 Total Other Refuse Transit Enterprise Collection System Funds ASSETS CURRENT ASSETS Cash and pooled cash investments Receivables Accounts Accrued interest Intergovernmental Inventories Total Current Assets NONCURRENT ASSETS Capital assets Land Buildings Machinery and equipment Accumulated depreciation Net Capital Assets $ 745,153 $ - $ 745,153 297,023 6,434 303,457 4,287 - 4,287 - 976,184 976,184 - 17,375 17,375 1,046,463 999,993 2,046,456 - 36,000 36,000 - 1,887,564 1,887,564 1,636,150 3,606,348 5,242,498 (1,476,857) (3,272,600) (4,749,457) 159,293 2,257,312 2,416,605 Total Assets 1,205,756 3,257,305 4,463,061 LIABILITIES CURRENT LIABILITIES Accounts payable Accrued payroll Accrued compensated absences Due to other funds Total Liabilities NET ASSETS Invested in capital assets, net of related debt Unrestricted Total Net Assets 37,822 13,609 51,431 42,518 45,261 87,779 83,900 22,662 106,562 - 480,712 480,712 164,240 562,244 726,484 159,293 2,257,312 2,416,605 882,223 437,749 1,319,972 $ 1,041,516 $ 2,695,061 $ 3,736,577 67 CITY ®F I)IJ~iTQITE, I®A EXHIBIT B-2 COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 200 OPERATING REVENUES Charges for sales and services Other Total Operating Revenues OPERATING EXPENSES Employee expense Utilities Repairs and maintenance Supplies and services Insurance Depreciation Total Operating Expenses OPERATING LOSS NONOPERATING REVENUES (EXPENSES) Intergovernmental Investment earnings Gain on disposal of assets Net Nonoperating Revenues INCOME (LOSS) BEFORE TRANSFERS TRANSFERS IN TRANSFERS OUT CHANGE IN NET ASSETS NET ASSETS, BEGINNING NET ASSETS, ENDING Total Other Refuse Transit Enterprise Collection System Funds $ 2,709,854 $ 195,104 $ 2,904,958 729 713 1,442 2,710,583 195,817 2,906,400 1,663,486 1,270,397 2,933,883 14,730 60,695 75,425 270,020 486,192 756,212 633,793 533,628 1,167,421 26,130 45,861 71,991 115,891 307,210 423,101 2,724,050 2,703,983 5,428,033 (13,467) (2,508,166) (2,521,633) 13,078 1,196,558 1,209,636 32,428 - 32,428 7,098 - 7,098 52,604 1,196,558 1,249,162 39,137 (1,311,608) (1,272,471) - 1,070,053 1,070,053 (16,000) - (16,000) 23,137 (241,555) (218,418) 1,018,379 2,936,616 3,954,995 $ 1,041,516 $ 2,695,061 $ 3,736,577 68 CITY ®F I)U~UQUE, I®WA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2008 EXHIBIT B-3 Total Other Refuse Transit Enterprise Collection System Funds CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers Cash payments to suppliers for goods and services Cash payments to employees for services Other operating receipts NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds Transfers to other funds Proceeds from interfund balances Intergovernmental grant proceeds NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets Acquisition and construction of capital assets NET CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES $ 2,687,742 $ 189,234 $ 2,876,976 (932,557) (1,132,824) (2,065,381) (1,602,927) (1,264,440) (2,867,367) 729 713 1,442 152,987 (2,207,317) (2,054,330) - 1,070,053 1,070,053 (16,000) - (16,000) - 480,712 480,712 13,078 257,246 270,324 (2,922) 1,808,011 1,805,089 7,098 - 7,098 - (28,000) (28,000) 7,098 (28,000) (20,902) CASH FLOWS FROM INVESTING ACTIVITIES Interest received NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING CASH AND CASH EQUIVALENTS, ENDING 34,008 - 34,008 191,171 (427,306) (236,135) 553,982 427,306 981,288 $ 745,153 $ - $ 745,153 (continued) 69 ~:I~ H ®~ ~~~ V ~~~y I® vV 1~ COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2008 EXHIBIT B-3 (continued) Business-type Activities -Enterprise Funds Total Other Refuse Transit Enterprise Collection System Funds RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating loss Adjustments to reconcile operating loss to net cash provided (used) by operating activities Depreciation Change in assets and liabilities Increase in receivables Increase in inventories Increase in accounts payable Increase in accrued liabilities Total Adjustments $ (13,467) $ (2,508,166) $ (2,521,633) 115,891 307,210 423,101 (22,112) (5,870) (27,982) - (8,079) (8,079) 12,116 1,631 13,747 60,559 5,957 66,516 166,454 300,849 467,303 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 152,987 $ (2,207,317) $ (2,054,330) 70 Internal service funds are used to account for the financing of goods or services provided by one department to other departments of the government and to other government units on a cost- reimbursementbasis. 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 costs. Workers' Compensation Reserve Fund -This fund is used to account for workers' compensation costs. ~;I~~ ®F' ~~ V Q l.l~y i®~~ COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS JUNE 30, 2008 General Service Garage Service ASSETS CURRENT ASSETS Cash and pooled cash investments Receivables Accounts Accrued interest Inventories Total Current Assets NONCURRENT ASSETS Capital assets Machinery and equipment Accumulated depreciation Net Capital Assets Stores/ Printing $ 6,732 $ 184,154 $ 8,360 - 55,217 2,421 6,732 239,371 10,781 Total Assets - 102,034 - - (49,914) - 52,120 - 6,732 291,491 10,781 LIABILITIES CURRENT LIABILITIES Accounts payable Accrued payroll Total Liabilities NET ASSETS Invested in capital assets, net of related debt Unrestricted Total Net Assets (Deficit) - 63,728 95 19,137 23,417 - 19,137 87,145 95 - 52,120 - (12,405) 152,226 10,686 $ (12,405) $ 204,346 $ 10,686 EXHIBIT C-1 Health Workers' Insurance Compensation Reserve Reserve Total $ 4,021,249 $ 651,753 $ 4,872,248 120,692 - 120,692 21,828 3,717 25,545 - - 57,638 4,163,769 655,470 5,076,123 - - 102,034 - - (49,914) - - 52,120 4,163,769 655,470 5,128,243 829,027 774,612 1,667,462 _ 42,554 829,027 774,612 1,710,016 - - 52,120 3,334,742 (119,142) 3,366,107 $ 3,334,742 $ (119,142) $ 3,418,227 71 6..1~~ ®~ ~ U ~SU~~Ey 1®~l COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS (DEFICIT INTERNAL SERVICE FUNDS FOR THE YEAR ENDED J[JNE 30, 2008 OPERATING REVENUES Charges for sales and services Other Total Operating Revenues OPERATING EXPENSES Employee expense Utilities Repairs and maintenance Supplies and services Insurance Depreciation Total Operating Expenses OPERATING INCOME (LOSS) NONOPERATING REVENUES Investment earnings Gain on disposal of assets Total Nonoperating Revenues INCOME (LOSS) BEFORE TRANSFERS TRANSFERS OUT CHANGE IN NET ASSETS NET ASSETS (DEFICIT), BEGINNING NET ASSETS (DEFICIT), ENDING General Garage Stores/ Service Service Printing $ 1,539,021 $ 1,983,876 $ 25,574 1,539,021 1,983,876 25,574 1,473,234 774,150 - - 24,009 - - 28,123 - 5,631 1,056,029 30,407 10,631 12,751 - - 5,671 - 1,489,496 1,900,733 30,407 49,525 83,143 (4,833) - 3,105 - - 3,105 - 49,525 86,248 (4,833) - (6,436) - 49,525 79,812 (4,833) (61,930) 124,534 15,519 $ (12,405) $ 204,346 $ 10,686 EXHIBIT C-2 Health Workers' Insurance Compensation Reserve Reserve Total $ 6,195,666 $ 518,010 $ 10,262,147 222,409 18,285 240,694 6,418,075 536,295 10,502,841 - - 2,247,384 - - 24,009 - - 28,123 5,189,378 996,905 7,278,350 488,747 24,227 536,356 - - 5,671 5,678,125 1,021,132 10,119,893 739,950 (484,837) 382,948 177,722 36,388 214,110 - - 3,105 177,722 36,388 217,215 917,672 (448,449) 600,163 - - (6,436) 917,672 (448,449) 593,727 2,417,070 329,307 2,824,500 $ 3,334,742 $ (119,142) $ 3,418,227 72 CITY OF' I)iJ~iTQiTIJ, IOWA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 200 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers Cash payments to suppliers for goods and services Cash payments to employees for services Other operating receipts NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers to other funds Payment of interfund balances NET CASH USED BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets Acquisition and construction of capital assets NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Interest received NET INCREASE (DECREASE) IN CASH AND General Garage Stores/ Service Service Printing $ 1,539,021 $ 1,983,876 $ 25,574 (16,262) (1,100,210) (31,350) (l,soo,3os> (772,187) - 22,454 111,479 (5,776) - (6,436) - (15,722) - - (15,722) (6,436) - - 3,105 - - (15,028) - - (11,923) - CASH EQUIVALENTS 6,732 93,120 (5,776) CASH AND CASH EQUIVALENTS, BEGINNING - 91,034 14,136 CASH AND CASH EQUIVALENTS, ENDING $ 6,732 $ 184,154 $ 8,360 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating income (loss) $ 49,525 $ 83,143 $ (4,833) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities Depreciation Change in assets and liabilities Increase in receivables Increase in inventories Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Total Adjustments - 5,671 - - (2,175) (714) - 22,877 (229) (27,071) 1,963 - (27,071) 28,336 (943) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 22,454 $ 111,479 $ (5,776) EXIFIIBIT C-3 Health Workers' Insurance Compensation Reserve Reserve Total $ 6,081,748 $ 518,010 $ 10,148,229 (5,563,644) (664,900) (7,376,366) - - (2,272,492) 222,409 18,285 240,694 740,513 (128,605) 740,065 - - (6,436) - - (15,722) - - (22,158) - - 3,105 - - (15,028) - - (11,923) 182,968 40,082 223,050 923,481 (88,523) 929,034 3,097,768 740,276 3,943,214 $ 4,021,249 $ 651,753 $ 4,872,248 $ 739,950 $ (484,837) $ 382,948 - - 5,671 (113,918) - (113,918) - - (2,889) 114,481 356,232 493,361 - - (25,108) 563 356,232 357,117 $ 740,513 $ (128,605) ~ 740,065 73 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 for improvements at the greyhound racing facility. CITY ®F I)LT~T.T~iTE, I®i3~A COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2008 EXHIBIT D-1 Balance Beginning of Year CABLE EQUIPMENT FUND ASSETS Cash and pooled cash investments Accounts receivable Accrued interest Total Assets LIABILITIES Accounts payable Due to other agency Total Liabilities Balance End Additions Deductions of Year $ 285,721 $ 236,797 $ 208,133 $ 314,385 - 7,235 - 7,235 - 6,314 6,314 - $ 285,721 $ 250,346 $ 214,447 $ 321,620 $ 21,317 $ - $ 21,317 $ - 264,404 250,346 193,130 321,620 $ 285,721 $ 250,346 $ 214,447 $ 321,620 DOG TRACK DEPRECIATION FUND ASSETS Cash and pooled cash investments $ 497,059 $ 148,486 $ - $ 645,545 Accrued interest 4,368 27,563 28,486 3,445 Total Assets $ 501,427 $ 176,049 $ 28,486 $ 648,990 LIABILITIES Due to other agency TOTAL AGENCY FUNDS ASSETS Cash and pooled cash investments Accounts receivable Accrued interest Total Assets LIABILITIES Accounts payable Due to other agency Total Liabilities $ 501,427 $ 176,049 $ 28,486 $ 648,990 $ 782,780 $ 385,283 $ 208,133 $ 959,930 - 7,235 - 7,235 4,368 33,877 34,800 3,445 $ 787,148 $ 426,395 $ 242,933 $ 970,610 $ 21,317 $ - $ 21,317 $ - 765,831 426,395 221,616 970,610 $ 787,148 $ 426,395 $ 242,933 $ 970,610 74 STATISTICAL SECTION (IJNA~ITEI)) CITY OF DUBUQUE, IOWA CITY ®F I)~.T~LTQ~JE, I®~1A sTATISTIC~L sECTIOI~ This statistical section of the City's comprehensive annual financial report presents detailed information as a context for understanding what the information 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. 76 Revenue Capacity These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax. 81 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. 85 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. 93 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. 95 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented GASB Statement 34 in 2003; schedules presenting government-wide information include information beginning in that year. 75 CITY ®I+' I)LT~iT~UE, I®A Table 1 NET ASSETS BY COMPONENT LAST SIX FISCAL YEA RS (ACCRUAL BASIS OF ACCOUNTING) Fiscal Year 2003 2004 2005 2006 2007 2008 Governmental activities Invested in capital assets, net of related debt $ 212,767,403 $ 231,863,231 $ 249,881,646 $ 267,762,059 $ 288,978,975 $ 296,143,451 Restricted 29,306,124 31,931,803 24,180,874 21,693,357 23,900,328 31,970,724 Unrestricted 11,528,644 11,322,661 11,236,870 15,132,486 21,921,571 18,987,841 Total governmental activities net assets $ 253,602,171 $ 275,117,695 $ 285,299,390 $ 304,587,902 $ 334,800,874 $ 347,102,016 Business-type activities Invested in capital assets, net of related debt $ 98,706,116 $ 92,301,043 $ 93,036,089 $ 88,802,536 $ 91,483,532 $ 95,104,575 Restricted 553,677 554,005 554,205 554,294 554,318 554,505 Unrestricted 6,308,801 10,502,939 12,854,730 13,258,072 11,214,900 11,312,806 Total business-type activities net assets $ 105,568,594 $ 103,357,987 $ 106,445,024 $ 102,614,902 $ 103,252,750 $ 106,971,886 Primary government Invested in capital assets, netofrelateddebt $ 311,473,519 $ 324,164,274 $ 342,917,735 $ 356,564,595 $ 380,462,507 $ 391,248,026 Restricted 29,859,801 32,485,808 24,735,079 22,247,651 24,454,646 32,525,229 Unrestricted 17,837,445 21,825,600 24,091,600 28,390,558 33,136,471 30,300,647 Total primary government net assets $ 359,170,765 $ 378,475,682 $ 391,744,414 $ 407,202,804 $ 438,053,624 $ 454,073,902 76 ~I~I'~ ®F DIT~jTQjT~' I®~ CHANGES 1N NET ASSETS LAST SIX FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Table 2 Fiscal Year 2003 2004 2005 2006 2007 2008 Expenses Governmental activities: Public safety $ 15,817,052 $ 16,605,481 $ 18,636,877 $ 18,892,980 $ 20,326,724 $ 16,966,210 Public works 14,453,558 12,847,410 17,088,983 16,390,322 16,505,560 18,847,068 Health and social services 815,524 1,290,619 654,469 678,748 759,367 800,566 Culture and recreation 7,367,147 7,849,114 8,474,183 9,627,505 9,837,299 10,857,409 Community and economic development 9,431,702 12,662,552 9,680,046 8,541,167 11,965,805 11,961,584 General government 4,211,922 3,773,136 4,048,475 3,868,687 4,940,154 5,804,003 Interest on long-term debt 1,605,326 1,248,498 1,298,367 1,460,730 1,400,748 2,577,417 Total governmental activities expenses 53,702,231 56,276,810 59,881,400 59,460,139 65,735,657 67,814,257 Business-type activities: Sewage disposal works 4,655,696 5,282,016 4,656,172 5,298,353 5,814,076 6,141,524 Water utility 4,145,983 4,368,738 4,232,489 4,700,483 4,780,063 4,814,692 Stormwaterutility - 1,184,968 1,114,811 1,153,628 1,198,675 1,706,735 Parking facilities 1,445,434 1,655,429 1,604,071 1,629,427 1,611,447 2,173,110 America's River Project 414,830 1,064,701 515,570 82,617 434,667 126,699 Refuse collection 2,140,807 2,238,254 2,202,800 2,463,795 2,496,018 2,724,050 Transit system 2,055,248 2,257,078 2,326,908 2,555,080 2,760,459 2,703,983 Total business-type activities expenses 14,857,998 18,051,184 16,652,821 17,883,383 19,095,405 20,390,793 Total primary government expenses $ 68,560,229 $ 74,327,994 $ 76,534,221 $ 77,343,522 $ 84,831,062 $ 88,205,050 Program Revenues Governmental activities: Charges for services Public safety $ 1,586,255 $ 1,785,787 $ 1,900,938 $ 1,809,481 $ 1,857,324 $ 2,088,723 Public works 3,367,720 3,392,650 3,371,073 3,370,291 4,839,781 4,061,883 Culture and recreation 2,145,435 2,282,983 2,143,246 2,218,315 2,251,562 2,109,571 Other activities 764,732 873,457 945,712 895,920 1,074,550 1,382,889 Operating grants and contributions 13,677,503 12,197,307 14,603,106 12,902,410 11,641,904 11,709,123 Capital grants and contributions 3,447,052 5,153,258 6,919,296 6,881,573 23,741,282 8,032,602 Total governmental activities program revenues 24,988,697 25,685,442 29,883,371 28,077,990 45,406,403 29,384,791 Business-type activities: Charges for services Sewage disposal works 4,300,156 4,719,491 4,552,587 5,077,491 5,259,432 5,484,079 Water utility 3,975,598 4,307,238 4,224,074 4,669,340 4,743,896 4,875,530 Stormwater utility - 754,101 684,570 928,850 1,227,243 1,766,334 Parking facilities 1,427,146 1,643,490 1,889,937 1,886,642 1,977,757 2,141,607 America's River Project 147,695 881,089 26,061 51,373 3,099 2,140 Refuse collection 1,981,105 2,157,285 2,283,677 2,397,525 2,642,251 2,710,583 Transit system 201,367 319,216 389,106 341,743 237,088 195,817 Operating grants and contributions 880,822 825,538 651,967 920,762 1,167,344 1,209,636 Capital grants and contributions 11,938,797 11,007,676 3,030,378 2,769,657 1,670,874 2,830,263 Total business-type activities program revenues 24,852,686 26,615,124 17,732,357 19,043,383 18,928,984 21,215,989 Total primary government program revenues $ 49,841,383 $ 52,300,566 $ 47,615,728 $ 47,121,373 $ 64,335,387 $ 50,600,780. (continued) 77 ~I~~ ®~ IJ~IJ~~.1L` y I® VV 1-1 CHANGES IN NET ASSETS LAST SIX FISCAL YEARS (ACCRUAL BASIS of AccouNT><NG) Table 2 (continued) Fiscal Year Net (Expense)/Bevenue Governmental activities Business-type activities Total primary government net expense General Revenues and Other Changes in Net Assets Governmental activities: General Revenues Property taxes Local option sales tax Hotel/motel tax Utility franchise fees Gaming Unrestricted investment earnings Gain/(loss) on sale of capital assets Other Transfers Total governmental activities Business-type activities: General Revenues Property taxes Unrestricted investment earnings Gain/(loss) on sale of capital assets Transfers Total business-type activities Total primary goverrunent Change in Net Assets Governmental activities Business-type activities Total primary government 2003 2004 2005 2006 2007 2008 $ (28,713,534) $ (30,591,368) $ (29,998,029) $ (31,382,149) $ (20,329,254) $ (38,429,466) 9,994,688 8,563,940 1,079,536 1,160,000 (166,421) 825,196 $ (18,718,846) $ (22,027,428) $ (28,918,493) $ (30,222,149) $ (20,495,675) $ (37,604,270) $ 18,041,049 $ 18,588,367 $ 19,767,492 $ 19,716,620 $ 21,656,908 $ 22,744,563 6,492,203 7,105,183 6,963,124 7,336,124 7,817,403 8,020,889 970,232 1,314,114 1,383,660 1,862,439 1,569,743 1,622,455 - 862,275 1,310,064 1,521,201 1,492,920 1,516,123 9,539,598 11,631,022 11,694,105 14,034,847 15, 556,551 15,346,468 1,749,301 497,361 1,190,337 1,081,141 1,870,403 2,741,499 (149,650) 175,231 170,642 77,627 - 92,525 1,228,232 638,681 560,789 572,602 586,931 898,241 (7,720,462) 10,956,246 (1,684,581) 5,033,974 (7,633) (2,252,155) 30,150,503 51,768,480 41,355,632 51,236,575 50,543,226 50,730,608 506,054 - - - - - 321,447 181,674 322,884 339,599 796,636 630,049 (168,001) 25 36 703 - 11,736 7,720,462 (10,956,246) 1,684,581 (5,033,974) 7,633 2,252,155 8,379,962 (10,774,547) 2,007,501 (4,693,672) 804,269 2,893,940 $ 38,530,465 $ 40,993,933 $ 43,363,133 $ 46,542,903 $ 51,347,495 $ 53,624,548 $ 1,436,969 $ 21,177,112 $ 11,357,603 $ 19,854,426 $ 30,213,972 $ 12,301,142 18,374,650 (2,210,607) 3,087,037 (3,533,672) 637,848 3,719,136 $ 19,811,619 $ 18,966,505 $ 14,444,640 $ 16,320,754 $ 30,851,820 $ 16,020,278 78 ~I~~ ®F' ~~~~~' I®~ Table 3 FUND BALANCES OF GOVERNIVIE NTAL FUN DS LAST SIX FISCAL YEARS (iVIODIFIED ACCRUAL BASIS OF ACCOUNTING) Fiscal Year 2003 2004 2005 2006 2007 2008 General Fund Reserved $ 4,573,723 $ 3,233,335 $ 3,169,453 $ 1,477,141 $ 4,455,303 $ 1,699,825 Unreserved 12,218,787 13,685,063 13,706,134 16,050,997 17,827,631 17,982,016 Total general fund $16.792.510 $16.918.398 516.875.587 517.528.138 $22.282.934 519.681.841 All Other Governmental Funds Reserved $14,525,251 $14,231,390 $13,607,759 $15,564,016 $13,942,519 $31,887,038 Unreserved, reported in: Special revenue funds 11,886,631 9,720,412 5,777,233 7,277,471 7,586,898 7,431,931 Debt service fund - (68,569) (56,320) - - - Capital projects funds 5,846,016 7,353,593 11,191,461 (981,248) 4,195,354 7,875,448 Permanent funds 70,091 71,373 73,628 83,367 115,825 33,958 Total all other governmental funds $32.327.989 531.308.199 530.593.761 521.943.606 $25.840.596 $47.228.375 79 ~IZ'~ ®F' I~~~j.TQj.T~9 I®~ CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST SIX FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Table 4 Fiscal Year 2003 2004 2005 2006 2007 2008 Revenues Taxes $ 25,508,936 $ 27,861,273 $ 29,430,135 $ 30,043,167 $ 32,526,525 $ 33,898,692 Special assessments 561,406 717,305 197,195 322,214 586,459 177,585 Licenses and permits 753,990 1,063,081 1,078,722 965,712 1,052,896 1,153,429 Intergovernmental 17,249,290 17,057,994 18,370,358 15,021,722 16,744,703 14,256,523 Charges for services 5,325,031 5,666,307 5,918,542 6,620,243 7,351,191 7,833,151 Fines and forfeits 465,787 241,572 267,536 204,201 158,360 188,603 Investment earnings 1,750,519 502,932 1,197,691 1,096,445 1,913,420 2,731,953 Contributions 447,960 345,415 306,809 246,908 1,168,463 6,134,002 Gaming 9,539,598 11,631,022 11,694,105 14,034,847 15,556,551 15,346,468 Miscellaneous 1,312,348 1,139,057 1,573,305 1,106,991 1,149,546 1,269,376 Total revenues 62,914,865 66,225,958 70,034,398 69,662,450 78,208,114 82,989,782 Expenditures Current Public safety 15,278,654 16,764,510 18,652,246 19,535,369 20,743,196 21,542,661 Public works 11,860,004 10,723,527 21,301,239 11,605,567 12,506,378 16,331,107 Health and social services 749,435 721,906 662,231 715,598 783,209 797,644 Culture and recreation 7,515,522 7,470,264 8,180,832 9,998,462 10,244,244 10,277,787 Community and economic development 9,010,868 11,924,011 9,825,470 9,981,645 11,695,902 11,847,512 General government 3,835,609 4,227,335 4,022,785 4,090,866 4,441,043 6,310,939 Debt service Principal 2,009,986 2,117,773 1,769,960 1,325,970 1,663,339 1,762,375 Interest 1,668,019 1,304,802 1,240,427 1,493,504 1,412,012 2,406,431 Capital projects 9,930,311 6,865,119 8,226,840 14,528,340 8,227,257 15,351,848 Total expenditures 61,858,408 62,119,247 73,882,030 73,275,321 71,716,580 86,628,304 Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (Uses) Issuance of bonds Issuance of refunding bonds Discount on bonds Payment to refunded bonds escrow agent Transfers in Transfers out Sale of capital assets Total other financing sources (uses) Net change in fund balances Debt service as a percentage of noncapital expenditures 1,056,457 4,106,711 (3,847,632) (3,612,871) 6,491,534 (3,638,522) 150,000 795,000 7,277,665 - - (58,487) (150,000) - - 5,367,986 8,662,300 12,981,655 (21,073,805) (15,060,669) (16,105,184) 117,239 264,344 170,642 (15,588,580) (5,339,025) 4,266,291 $ (14.532.1231 $ (1.232.3141 $ 418.659 13,682 743,591 23,083,696 1,515,750 - 2,965,000 - - (266,158) (1,494,371) - (2,875,000) 7,334,605 10,3 94,726 14,801,589 (11,904,890) (11,789,548) (18,185,109) 150,491 2,811,483 2,901,190 (4,384,733) 2,160,252 22,425,208 $ (7.997.6041 $ 8.651.786 ~ 18.786.686 7.37% 6.32% 5.46% 4.99% 5.01% 6.55% 80 CITY ®F' I)IJ~LTQLTE, I®WA TAXABLE AND ASSESSED VALUE OF PROPERTY LAST TEN FISCAL YEARS (IN TxoUSANDS of DOLLARS Assessed Value Real Property Exemptions Total Levy Fiscal Taxable Assessed Taxable Year Year Value Value Real Property Value 1997 1999 $ 1,354,421 $ 1,987,466 $ 10,319 $ 1,344,102 1998 2000 1,389,352 1,990,428 10,018 1,379,334 1999 2001 1,377,518 2,014,897 10,194 1,367,324 2000 2002 1,429,025 2,050,019 10,097 1,418,928 2001 2003 1,540,206 2,317,926 10,141 1,530,065 2002 2004 1,572,776 2,350,317 9,694 1,563,082 2003 2005 1,666,033 2,575,400 9,599 1,656,434 2004 2006 1,710,334 2,679,078 9,862 1,700,472 2005 2007 1,780,354 2,804,568 9,122 1,771,232 2006 2008 1,823,304 2,870,178 8,939 1,814,365 Table 5 Ratio of Total Taxable Value to Total Assessed Total Direct Value Tax Rate $ 1,987,466 67.63 11.07340 1,990,428 69.30 10.71601 2,014,897 67.86 11.06712 2,050,019 69.22 10.76080 2,317,926 66.01 10.21200 2,350,317 66.51 10.27303 2,575,400 64.32 10.07200 2,679,078 63.47 9.69910 2,804,568 63.16 9.98030 2,870,178 63.21 10.31690 81 CITY ®F' I)U~UQUE, I®WA PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS (TAX RATES PER $1,000 ASSESSED VALUE) Table 6 Dubuque Board of Levy Fiscal Dubuque School Education and Year Year City District Independents 1997 1999 $ 11.07340 $ 11.98226 $ 0.50368 $ 1998 2000 10.71601 11.53111 0.56187 1999 2001 11.06712 12.17096 0.50467 2000 2002 10.76080 13.50444 0.54806 2001 2003 10.21200 13.73882 0.55492 2002 2004 10.27303 13.84768 0.61686 2003 2005 10.07200 14.27491 0.57269 2004 2006 9.69910 15.09695 0.60226 2005 2007 9.98033 15.92538 0.60802 2006 2008 10.31690 16.40925 0.63160 Source: Dubuque County Auditor's Office. Ratio of Area 1 Voc. Dubuque Dubuque City Tech County Total to Total 0.48592 $ 5.52169 $ 29.56695 37.45 0.55128 5.54016 28.90043 37.08 0.56995 5.60750 29.92020 36.99 0.57072 5.73669 31.12071 34.58 0.57507 5.60064 30.68145 33.28 0.57791 5.59515 30.91063 33.23 0.59804 6.08923 31.60687 31.87 0.60517 6.08416 32.08764 30.23 0.61127 6.17924 33.30424 29.97 0.61270 6.42691 34.39736 29.99 82 CI'T'Y ®F I)IT~iJ~iTE, I®i~A PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AG® SIN TIIOUSANVS of noLLARS~ Table 7 2008 1999 Percentage of Percentage of Total City .Total City Taxable Taxable Taxable Assessed Taxable Assessed Taxnayer Assessed Value Rank Value Assessed Value Rank Value Kennedy Mall $ 26,372 1 .92 % $ 19,990 3 1.13 Otto A LLC 17,500 2 .61 Nordstrom, Inc. 16,834 3 .59 12,854 4 .72 Medical Associates Realty 13,631 4 .47 9,955 5 .56 McGraw Hill 11,437 5 .40 7,366 9 .41 Walter Development 11,288 6 .39 Platinum Holdings 11,179 7 .39 Minglewood Limited Partnership 9,948 8 .35 American Trust & Savings Bank 9,947 9 .35 7,278 10 .41 Asbury Dubuque 9,896 10 .34 Plaza 20 Inc. 7,861 8 .44 Interstate Power Company 53,944 1 3.04 Peoples Natural Gas 20,395 2 1.15 A.Y. McDonald Manufacturing Co. 8,150 7 .46 U.S. West Communications 9,199 6 .52 $ 138,032 4.81% $ 156,992 8.84% Effective 2001 utility companies (Alliant Energy/Interstate Power and Aquila Natural Gas) pay excise tax on revenue to the state rather than property taxes. Source: Dubuque County Auditor's Office. 83 CITY ®F' IJ~iTQiJE, I®WA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (~ TxouSANDS of DOLLARS) Table 8 Percent of Fiscal Total Tax Current Tax Current Taxes Year Levy (1) Collections Collected 1999 16,587 16,528 99.6 2000 16,497 16,380 99.3 2001 17,163 16,662 97.1 2002 17,147 16,941 98.8 2003 15,328 15,215 99.3 2004 16,208 15,937 98.3 2005 16,408 16,383 99.8 2006 16,229 16,146 99.5 2007 17,216 17,193 99.9 2008 18,211 18,160 99.7 Ratio of Total Tax Delinquent Collections to Tax Total Tax Total Tax Collections Collections (2) Levy 121 16,649 100.4 115 16,495 100.0 120 16,782 97.8 127 17,068 99.5 216 15,431 100.7 11 15,948 98.4 20 16,403 100.0 2 16,148 99.5 4 17,197 99.9 3 18,163 99.7 Outstanding Delinquent 129 138 150 238 130 207 196 182 174 215 Ratio of Delinquent Taxes to Total Tax Levy (1) Includes tax increment levy. (2) Includes taxes collected in June by the County but not received by the City until July. 0.8 0.8 0.9 1.4 0.8 1.3 1.2 1.1 1.0 1.2 84 Tax Tax General Increment Increment General Percentage Per Fiscal Obligation Financing Financing Obligation Capital Loan Revenue Total Primary of Personal Capita Year Bonds Bonds Notes Bonds Notes Bonds Government Income (1) (i) 1999 $ 5,300,000 $ 2,445,500 $ - $ 1,890,000 $ - $ 2,210,000 $ 11,845,500 0.86% 210 2000 4,522,500 4,378,669 - 3,572,500 - 2,055,000 14,528,669 1.00% 257 2001 3,405,000 5,963,585 - 9,005,000 - 1,890,000 20,263,585 1.34% 351 2002 20,945,000 5,873,155 - 3,105,000 - 1,720,000 31,643,155 2.05% 549 2003 19,865,000 4,943,169 - 5,140,000 - 1,540,000 31,488,169 1.98% 546 2004 19,010,000 3,820,394 655,000 6,660,000 - 1,350,000 31,495,394 1.85% 546 2005 24,960,000 3,450,820 622,211 8,090,000 - 1,150,000 38,273,031 2.16% 663 2006 24,165,750 3,040,304 590,439 11,619,250 - 940,000 40,355,743 2.17°/a 700 2007 22,990,000 2,594,831 1,279,885 11,090,000 - 720,000 38,674,716 2.01% 670 2008 21,860,000 25,136,402 1,279,636 11,570,000 611,977 490,000 60,948,015 * 1,057 Details regarding the City's outstanding debt can be found in the notes to th e financial statements. (1) Population and personal income data can be foun d in Table 17. * Personal Income unavailable at report date. 85 CITY ®F' DUBUQUE, I®~~ Table 10 RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS (IN THOUSANDS OF DOLLARS, EXCEPT PER CAPITA A1VIOUNT) General Percentage of Percentage of Fiscal Obligation Taxable Value Taxable Value of Assessed Value Assessed Value Per Year Bonds (1) of Property Property of Property of Property Capita 1999 $ 5,300 $ 1,344,102 0.39% $ 1,987,466 0.27% 94 2000 4,523 1,379,334 0.33% 1,990,428 0.23% 80 2001 3,405 1,367,324 0.25% 2,014,897 0.17% 59 2002 20,945 1,418,928 1.48% 2,050,019 1.02% 363 2003 19,865 1,530,057 1.30% 2,317,926 0.86% 344 2004 19,010 1,563,082 1.22% 2,350,317 0.81% 330 2005 24,960 1,656,434 1.51% 2,575,400 0.97% 433 2006 24,166 1,700,472 1.42% 2,679,078 0.90% 419 2007 22,990 1,771,232 1.30% 2,804,568 0.82% 399 2008 21,860 1,814,365 1.20% 2,870,178 0.76% 379 (1) Excludes general obligation bonds reported in enterprise funds. 86 CITY ®I+' I)IJ~i1~iTE, I®WA Tabie 11 DIRECT AND OVERLAPPING GOVERNiVIENTAL ACTIVITIES DEBT AS OF JUNE 30, 2008 Jurisdiction Direct, City of Dubuque, Iowa Overlapping: Dubuque County Dubuque Public School District Northeast Iowa Community College Total Overlapping Total Net General Obligation Bonded Debt Outstanding $ 21,860,000 (1) 1,380,000 1,080,000 2,460,000 $ 24,320,000 Percentage Applicable to City 100.00% 57.34 22.75 Source: Dubuque County Auditor and Northeast Iowa Community College. (1) Excludes general obligation bonds reported in enterprise funds. Amount Applicable to Government $ 21,860,000 791,268 245,747 1,037,015 $ 22,897,015 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 responsible for repaying the debt of each overlapping government. 87 N _~ wQ CC Z HI ~~I ® ~4 ~ ~ a O'c~A ~~~a ~AZ~ w O ~~~ U~aC '~ N O ~ O O N 69 O n ~ O ~!1 O 'ch N ,-y 69 00 ~ ~ O o0 O M N ^-~ 69 a, V1 O cri O M N '-+ 6R _~ 7 ~ O ~ N ,-~ M ~ O .~-~ N .~ 69 M O N O O N 69 ~ r O O N .-i 69 N O U1 O p~ O ~ N 69 M n, M nr ~ ~ ~ rl 69 ~ ~ 00 M 7 M O 00 ~O 00 69 O ~O 7 O M DD n M O 69 M ~O V 7 'ct M ~ ~ M G~ 69 [~ N n n a1 t~ vi M G1 6R 00 M r, M O l~ M 00 v~ N ENO O 69 O 01 N ~ O t~ o0 00 V'1 ~O O 00 N .--~ 00 69 .r- O V~ O O ~ 64 7 N DD ~ 0 O M M O <t' ~O O 61 ~O O O t~ N O O V eP' G; ~ N mot' O O 7 M ~O 00 O DD ~ ~ ~ W N 69 69 69 0 00 N 0 N 7 00 N 0 N r N o ~ Q\ ~ G ~ N O ~ ~ a S, ro ~w ~~ O 0 0 ~ ~' ~ ~ Ga ~ ~ O ro C7 ' N ,+.. ~ i ~ O a'Oi ~p Q cC C bA y C r+ o ' N ~ ~ R o Ez ~ ~! ~ ~ U G ~ Gi '~ ~ iC ~ "" ~ ~ y ~ b bA b N G O ~' . O G 9 ~ UV i6 y . . ~ . ~ bA ~ W ~1 (~ C .-7 O V o ~ ~n U v~ C ~ ~ L c6 ~ a G \° ~ ~ Q N ~ O d t-a 0 DD ~~ .~ , ~ by ~ ~ 0 ~ °_ 0 ~ b~ '~ ~ ~ ~ ~~Q ~ b G -~ ~ ° y y ~ ~ G~ ~ b ss ~I~~ ®~ 111.1~V~U~y ~® Vi'~ REVENUE BOND COVERAGE PARKING BONDS LAST TEN FISCAL YEARS (IN TxouSANDS of DoLI.ARS) Table 13 Fiscal Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Gross Revenues (1) $ 1,303 1,278 1,552 1,452 1,484 1,659 1,934 1,933 2,113 2,224 Operating Expenses (2) $ 584 582 717 737 847 971 960 977 1,014 1,495 Net Revenue Available For Debt Service $ 719 696 835 715 637 688 974 956 1,099 729 Debt Service Requirements Principal Interest Total $ 155 $ 98 $ 253 165 93 258 170 86 256 180 79 259 190 71 261 200 63 263 210 54 264 220 44 264 230 34 264 240 23 263 Coverage (3) 2.84 2.70 3.26 2.76 2.44 2.62 3.69 3.62 4.16 2.77 (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 requirements. Bond ordinance requires 1.3 minimum coverage. 89 ~11 Y ®i ~I.I~V~VL' y T®Vi'~ WATER AND SEWER RECEIPT HISTORY LAST TEN FISCAL, YEARS Table 14 Fiscal Year Water Receipts Sewer Receipts 1999 $ 3,770,976 $ 4,806,765 2000 4,055,270 4,834,413 2001 4,135,930 4,387,111 2002 4,233,908 4,319,655 2003 4,154,899 4,252,098 2004 4,350,338 4,466,035 2005 4,340,789 4,478,205 2006 4,798,408 4,920,376 2007 4,856,353 5,276,454 2008 5,020,001 5,481,074 Source: Cash basis receipt ledgers. 90 CI'T'Y ®F I)I.T~IJ~LTE, I®~1A WATER METERS BY RATE CLASS LAST THREE FISCAL YEARS x Table 15 Fiscal Year Residential 2006 19,813 2007 19,914 2008 19,970 Commercial Industrial 1,820 73 1,839 74 1,878 70 35 38 45 Total 21,741 21,865 21,963 *Prior seven years information not available. 91 CITY ®F I)LT~IJQIJE, I®A LARGEST WATER AND SEWER CUSTOMERS FISCAL YEAR 200 Table 16 Percentage of Percentage of Water Total Water Sewer Total Sewer Customer Receipts Rank Receipts Receipts Rank Receipts Rousselot Inc. $ 185,763 1 3.70 % $ 345,941 1 6.31 Swiss Valley Farms 57,357 2 1.14 194,950 2 3.56 Mercy Medical Center 56,450 3 1.12 81,875 4 1.49 Alliant Power Company 49,560 4 0.99 Jeld-Wen 37,782 5 0.75 Finley Hospital 31,495 6 0.63 42,389 9 0.77 Clarke College 31,203 7 0.62 40,555 10 0.74 Loral College 29,628 8 0.59 48,190 6 0.88 City of Dubuque Sewer Treatment 29,096 9 0.58 Premier Linen & Dry Cleaning 29,011 10 0.58 45,533 7 0.83 Inland Protein Corporation 117,438 3 2.14 Western Dubuque Biodiesel 52,389 5 0.96 Tablemound Mobile Home Park 43,665 8 0.80 Total Receipts $ 5,020,001 $ 5,481,074 92 ~1~Y ®~ LI.JI.I~l.J~9 1® VV~ DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN CALENDAR YEARS Table 17 Public Per Capital School Personal Median Enrollment Year Population Personal Income Income (1) Age (2) (3) 1999 56,467 $ 2,173,097,000 $ 24,435 34 9,735 2000 56,467 2,293,137,000 25,691 34 9,697 2001 57,686 2,345,539,000 26,309 34 9,680 2002 57,686 2,421,441,000 26,760 37 9,906 2003 57,686 2,491,982,000 27,631 37 10,122 2004 57,686 2,695,504,000 29,549 37 10,428 2005 57,686 2,807,625,000 30,650 37 10,547 2006 57,686 2,983,000,000 32,290 37 10,733 2007 57,686 3,074,666,000 33,290 37 10,727 2008 57,686 * * 38 10,614 Sources: (1) U.S. Department of Commerce, Bureau of Economic Analysis. (2) Bureau of Census: 2000 Census. (3) Dubuque Community School District. (4) Iowa Department of Employment Services as of June 30. * Unavailable at report date. Unemployment Rate (4) 2.6 2.7 4.0 3.9 4.0 4.4 4.5 3.5 3.7 3.8 93 CITY ®F DiT~LTQLTE, I®i~A PRINCIPAL EMPLOYERS CURRENT YEAR AND YEAR 2000 Table 18 Employer John Deere (2) Dubuque Community Schools Mercy Medical Center Finley Hospital Eagle Window & Door Medical Associates City of Dubuque Prudential Retirement Holy Family Catholic Schools Flexsteel Dubuque County Farmland Foods Times Mirror (Formerly Wm C. Brown) Interstate Power Company 2008 Percentage of # of Total City Employees Rank Employment (1) 1,800 1 1,627 2 1,324 3 920 4 750 5 743 6 604 7 550 8 500 9 450 10 450 10 3.44 3.10 2.53 1.76 1.43 1.42 1.15 1.05 .95 .86 .86 9,718 2000 Percentage of # of Total City Employees Rank Employment (1) 2,250 1 4.64 1,500 2 3.10 1,500 2 3.10 850 8 1.75 450 10 .93 950 6 1.96 825 9 1.70 1,300 4 2.68 1,000 5 2.06 930 7 1.92 11,555 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 Labor Statistics. (2) Located just outside City Limits. 2000 is the closest year to 1998 with employment information available. 94 ~ O O O O O O O O O O O O O O 0 0 ~ O N M ~--~ O G~ ~ O O O O O O O O O O O O O 0 0 0 0 0 0 0 O O O O O O O O O O _ '~ ~ ~ M O 00 N [~ M W 00 N N M~~ M [~ N O t~ ~ ti O -y D\ O W N N O O O O O O O O ~'1 O N M O ~n O c7 0 0 0 0 0 0 O O O O 00 0 0 0 0 0 0 O O .-~ O G1 Q\ O N O N O O O O O O O O O O !I' ~ ~-+ O O [~ [~ ~/1 ~ Cr1 O 00 .-+ l~ M O 00 M N M r+ ~h' M b M 00 00 00 \D O ~--~ a1 O o0 N ~--~ N N ~ ~--~ ~-°~ N ~--~ ~ O ~ ~ N O O O O O O O O Vl O N M O O O O O O O O N O O O O V1 [~ O O O O O O O O ~--~ O 01 O~ O O O O O O O O ~O O O O O vl ~--i `O ~-+ O O~ l~ (\ V'1 Vl M ~ 00 '.~-~ 00 M ~--~ 00 M N M .--~ 'd' N ~O M 00 00 00 O O O .-. ~ q\ 00 N '--~ N N ~ ~--~ ~--~ N ~ ~ 1(J N Fy O O O O V1 O O O ~ O N M O O O O O O O O O O O O O O ~ ~i M N O O O O ~ ~ V'1 O ' O O O ni a\ O O O ~ 0 0 0 0 0 0 0 ~ O O N O M o0 O [~ O --i F-+ W y 0 O O O l [ ~ a\ C\ 00 d 00 N V1 N 01 00 00 P-+ N M l N M N to O 7 N O '--~ ~--~ .r N ~--~ ~ . N ~ ~ N ~ ~ H ~ ` ~ 7 Q ~ O O O O O O O O ~ O N M O O O O O O O O O O O O O O O 3 a ~ o00o tno 00 -~oc~c~ 000 0000000 oov~,o ao 4 W 6 i 7 O O l~ [~ l~ ~ v1 N Q~ GO o0 M O [~ M N M O v1 N ~O M 00 O l~ O\ S Q O N .-+ 01 O~ 00 N ~--~ N N ~ ~ ~-. N ,~ .-a ~ CC J ¢' ® ~ 1 ~ w 0 0 0 0 N O O O v1 O N M O ul O 0 0 0 0 0 0 0 O O O O t~ i H U C. d M O O O O O O t~ t~ O O ~O 7 O O Vl N ~--~ O a\ 41 O~ 00 ~ O O N O M O l~ 0 0 0 0 0 0 0 7 N c7 .-i b N~ O O V1 O M 00 .-i W r ctj < ~ ~ F - ~ > O "'"' O'~ 01 00 N .-+ N N .-. .r .. N ~ ,--i ~ - ~ rr I~ .= N i 0 (y ] ~ ~ O O O O O O O O v1 O N M O O O 0 0 0 0 0 0 0 O O O O O V~ H N O O O O O O ~ [~ O O M 7 O O ~/1 N .--~ O G1 01 01 00 00 O O O h O [~ 0 0 0 0 0 0 0 M t7 M 6~ ~O N V• O O O V'1 M 00 .~ l~ ~ OC ? W ° N ~ i F5 i ® G O O O O O O O O M O N M O O O 0 0 0 0 0 0 0 O O O O O a O O O O O O O O ~ O G1 O~ O O O 0 0 0 0 0 0 0 O O O O O i w O O Vl l~ ~--~ rf' vi N O~ 00 O 00 V7 00 [~ M M M 01 ~O N ~O M Q~ O\ N ~O ~ O ,-. ~ 41 O N ~--~ N '-+ '~-~ ~--~ .--. N ~--~ .~ S W N ~ •y H i 4 W ~ O O O O O O O O V'1 O N M O O O 0 0 0 0 0 0 0 0 0 0 0 O S O O O O O O O O ~ O O1 01 O O O 0 0 0 0 0 0 0 O O O O O f O a; O~ [~ N U1 N Q\ [~ O W h O [~ M M M 01 ~D N ~O M O~ O N ti S ,-~ N ~ + i ® O O O O 0 0 0 0 O O O O O O O O ~h O N M ~ O G1 O~ O O O O O O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O O O O 0 0 0 0 O 0 S G~ Q~ O O [~ O N Vl N O~ [~ O 00 N O l~ M M t!1 01 ~D N 'V M 01 00 N ~ 'S C1 a\ G\ 00 N ~--~ N ,-y ~--~ .-i .-. N ~--~ O S ~ M i V e y ~ s F-+ N P. ~ ~ .? ~y V Q W ~ j Q ~ o . ti ~ a Ca ~ o O i ~ ~ ~ o ~ ~ ~ ~ '~ a U ~ a~i ~~ o • o `~' ~~ w O ~'~ U ~ E ~ W O ..V. ~ U ~ y F" W .V •V ~ Q 0 ~ ~ ~ p ~ ~ a U ~ ~ on _ .c ~. ~ ' ~ y y ~ o W r y" ~ vi O ~ • is ~ ~ • ~ a~'i ~' ^ -Wy y ri1 to ' ~ ;~ ~a o . ~ P7 ': ~ ~w ~ ~ bD ~ ~, ~b y ~ 3 o ~ ~ p Vl ~w ~ ~i N .~ b ~ ~ ~ "D ~ ~ ~ ;~ .~~~ pp,, ~ A > H ~ R N ~ o ~U~ ~H a bA ~, ~, ~•~ ~ H ~ ' . . 3 ~ ~ a ~ ~ ~'> ~ ~ ~ ~~ ~ ~ ~w ~ , ~ R~ ~ i ~ H ~ ~ ~ ~ 0 ~ ~ ` " . ~ o " ' _ ~~ a ~ ~ 1 Ey ~ V .~ W fW P, Cn .~ ~ W .~ .G ~ . ~ U ~l a ~ i7 ~ U , P, ~ d U U U Li-. 1 ~ ,~ ~ ~ F - [ ' L j p ~ a`°i ^' o aoi ~ p ~ p~ a. a :C U U C7 CO v~ G 95 CITY ®F' I)IJ~LTQI.TE, I®WA OPERATING INDICATORS BY FiJNCTION/PROGRAIVI LAST TEN FISCAL PEARS Fiscal Year 1999 2000 2001 2002 2003 Public Safety Police Physical arrestsl 2,825 2,807 2,564 - 4,000 Traffic violations2 - - - 2,462 2,126 Parking violations3 - - - - 51,162 Fire Number of calls answered 3,336 3,158 3,736 4,774 3,974 Inspections conducted 742 829 805 841 524 Sewer Sewage system Daily average treatment in gallons 10,200,000 10,200,000 9,000,000 9,000,000 8,000,000 Maximum daily capacity oftreatment plant in gallons 15,000,000 15,000,000 15,000,000 15,000,000 15,000,000 Water systems Daily average consumption in gallons 8,519,740 8,000,000 8,000,000 8,000,000 8,000,000 Maximum daily capacity of plant in gallons 18,000,000 18,000,000 18,000,000 18,000,000 18,000,000 Refuse (Municipal Collection) Tonnage 14,171 14,279 13,979 13,594 10,435 Sources: Various City Departments. I Statistics not available for fiscal year 2002. z Statistics begin in fiscal year 2002, 3 Statistics begin in fiscal year 2003. Table 20 Fiscal Year 2004 2005 2006 2007 2008 4,550 4,795 4,790 5,078 5,090 2,427 2,171 2,111 1,986 6,881 49,985 51,004 46,575 42,530 40,741 4,181 4,300 4,176 4,454 4,699 408 1,135 409 360 624 8,000,000 8,500,000 8,500,000 8,000,000 10,310,000 15,000,000 13,500,000 13,500,000 13, 500,000 13,500,000 8,000,000 7,720,000 7,360,000 7,647,685 5,793,309 18, 000, 000 18, 000,000 18,000,000 18, 000,000 17, 000,000 10,330 10,428 10,573 10,807 11,798 96 CITY ®F I)U~UQUE, I®WA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Fiscal Year Public safety Police Stations Patrol units Fire Stations Aerial trucks Public works Streets Miles (1) Street lights (1) Health and social services Hospital Number of patient beds Cultural and recreation Library Golf Parks Acreage Recreation Civic center Swimming pools Softball fields Baseball fields Tennis courts Sewer Sewage system Miles of sanitary sewer (1) Miles of storm sewers (1) Number of treatment plants Number of service connectors Water systems Miles of water mains Number of service connectors Number of city owned fire hydrants Sources: Various City Departments. (1) City GIS System (* information not available) 1999 2000 2001 2002 2003 1 1 1 1 1 18 18 18 18 18 6 6 6 6 6 3 3 3 3 3 * * * * 273 * * 1,191 1,195 1,500 2 2 2 2 2 649 478 478 478 584 1 1 1 1 1 1 1 1 1 1 33 38 38 39 42 741 833 833 834 850 1 1 1 1 1 2 2 2 2 2 7 7 7 7 7 1 1 1 1 1 20 20 20 20 20 * * * * * * * * * * 1 1 1 1 1 20,000 20,550 20,550 20,200 20,800 250 301 302 305 305 20,000 21,130 21,000 20,550 21,032 2,004 2,635 2,685 2,712 2,713 Table 21 Fiscal Year 2004 2005 2006 2007 2008 1 1 1 1 1 18 19 19 19 19 6 6 6 6 6 3 3 3 3 3 290 290 295 307 317 1,591 1,631 1,755 1,802 1,855 2 2 2 2 2 560 421 421 405 405 1 1 1 1 1 1 1 1 1 1 42 44 44 47 47 850 855 845 898 898 1 1 1 1 1 2 2 2 2 2 7 7 7 8 7 1 1 1 1 1 20 20 19 19 20 * * 263 286 290 * * 116 120 122 1 1 1 1 1 21,000 21,000 21,443 21,568 21,633 310 312 313 315 316 21,206 21,016 21,257 21,210 21,243 2,736 2,770 2,780 2,798 2,812 97 COMPLIANCE SECTION CITY OF DUBUQUE, IOWA ~ 1 ~d~~~illy., REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the City Council City of Dubuque, Iowa We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Dubuque, Iowa, as of and for the year ended June 30, 2008, which collectively comprise the City's basic financial statements and have issued our report thereon dated December 16, 2008. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing our opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over financial reporting. Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in the internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies, including a deficiency we consider to be a material weakness. A control deficiency exists when the design or operation of the control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the City's ability to initiate, authorize, record, process, or report financial data reliably in accordance with accounting principles generally accepted in the United States of America such that there is more than a remote likelihood a misstatement of the City's financial statements that is more than inconsequential will not be prevented or detected by the City's internal control. We consider the deficiencies in internal control described in Part II of the accompanying Schedule of Findings and Questioned Costs to be significant deficiencies in internal control over financial reporting. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood a material misstatement of the financial statements will not be prevented or detected by the City's internal control. PEOPLE. PPINCIPIES. POSSIBILITIES. 98 www._eid~bpilly.cam 3999 C'enn3ylvania Avr., Sfc. Ibfl ~ Dubuque, lawn 52t}42~2273 M Phone 5b3.554.179Q 1 fax Sb3.S57.78,i2 ~ EQE Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the internal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. However, of the significant deficiencies described above, we believe item II-A-08 is a material weakness. Comnliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, non-compliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances ofnon-compliance or other matters that are required to be reported under GovernmentAuditing Standards. Comments involving statutory and other legal matters about the City's operations for the year ended June 30, 2008, are based exclusively on knowledge obtained from procedures performed during our audit of the financial statements of the City and are reported in Part III 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. The City's responses to findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. While we have expressed our conclusions on the City's responses, we did not audit the City's responses, and accordingly, we express no opinion on them. We noted certain matters that we reported to management of the City of Dubuque, Iowa, in a separate letter dated December 16, 2008. This report, a public record by law, is intended solely for the information and use of the officials, employees, and citizens of the City of Dubuque, Iowa, and other parties to whom the City of Dubuque, Iowa, may report, including federal awarding agencies and pass-through entities. This report is not intended to be and should not be used by anyone other than these specified parties. We would like to acknowledge the many courtesies and assistance extended to us by personnel of the City of Dubuque, Iowa, during the course of our audit. Should you have any questions concerning any of the above matters, we shall be pleased to discuss them with you at your convenience. 6, .~ Dubuque, Iowa December 16, 2008 99 I ids ~.ily., t:I'As ti PiiJti(\ESS nIl\`I~C~ii4 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To the Honorable Mayor and Members of the City Council City of Dubuque, Iowa Compliance We have audited the compliance of the City of Dubuque, Iowa, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Szrpplement that are applicable to each of its major federal programs for the year ended June 30, 2008. The City's major federal programs are identified in the summary of the independent auditor's results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grant agreements applicable to each of its major federal programs is the responsibility of the City's management. Our responsibility is to express an opinion on the City's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Az~diting Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Azrdits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether non-compliance 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 opinion. Our audit does not provide a legal determination on the City's compliance with those requirements. In our opinion, the City of Dubuque, Iowa, complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2008. Internal Control Over Compliance The management of the City of Dubuque, Iowa, is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts, and grant agreements applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, 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. PEOPLE. PRINCIPLES. POSSI~II.ITIES. www,eiclebcsi I ly. com loo X994 Pennsylvania Ava,, Sta. 100 1 DuE~uqua, fawa 520022273 1 Phane 563.5Sfi 1790 1 Fax 563.557.7Ed2 A POE A control deficiency in the City's internal control over compliance 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 non-compliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the City's ability to administer a federal program such that there is more than a remote likelihood that non-compliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the City's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material non-compliance with a type of compliance requirement of a federal program will not be prevented or detected by the City's internal control. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report, a public record by law, is intended solely for the information and use of the officials, employees, and citizens of the City of Dubuque, Iowa, and other parties to whom the City of Dubuque, Iowa, may report, including federal awarding agencies and pass-through entities. This report is not intended to be and should not be used by anyone other than these specified parties. ~~~~ Dubuque, Iowa December 16, 2008 101 CITY ®F DLT~iTQiTE, I®~1'dA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2008 CFDA Agency or Program Grantor/Pro~ram Number Pass-through Number Expenditures Direct: Department of Housing and Urban Development: Community Development Block Grants/ Entitlement Grants 14.218 B-OS-MC-19-0004 $ 1,199,696 Community Development Block Grants/ Special Purpose Grants/Insular Areas 14.225 IAOSSPG23 48,318 Shelter Plus Care 14.238 IA26C601021 5,482 Fair Housing Assistance Program -State and Local 14.401 FF207K077006 26,700 Lower Income Housing Assistance Program -Section 8 Moderate Rehabilitation 14.856 KC-9004MR-002 1,112 Lower Income Housing Assistance Program -Section 8 Moderate Rehabilitation 14.856 KC-9004MR-005 58,474 59,586 Section 8 Housing Choice Vouchers 14.871 KC-9004V 4,244,775 Lead-Based Paint Hazard Control in Privately-Owned Housing 14.900 IALHB0375-07 225.099 Department of Justice: Bulletproof Vest Partnership Program 16.607 2006BUBX050 2,529 Bulletproof Vest Partnership Program 16.607 2005BUBX050 8 2,537 Department of Transportation: Airport Improvement Program 20.106 3-19-0028-43 47,531 Airport Improvement Program 20.106 3-19-0028-38 22,909 Airport Improvement Program 20.106 3-19-0028-42 16,316 Airport Improvement Program 20.106 3-19-0028-44 30,247 117,003 Federal Transit -Capital Investment Grants 20.500 IA-90-X339-00 947,561 Department of Homeland Security: Assistance to Firefighters Grant 97.044 EMW-2006-FG-07317 394,081 Total Direct 7,270,838 (continued) 102 CITY ®F I)I.T~LTQLTE, I®W1~ SCHEDULE OF EXPEI~IDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2008 CFDA Agency or Program Grantor/Program Number Pass-through Number Expenditures Indirect: Department of Housing and Urban Development: Iowa Department of Economic Development: Community Development Block Grants/ Entitlement Grants 14.218 03-CDTA-DUB Department of the Interior: State Historical Society of Iowa: Historic Preservation Fund Grants-In-Aid 15.904 2007-02 Department of Justice: Attorney General's Crime Victim Assistance Division: Violence Against Women Formula Grants 16.588 VW-08-24C Dubuque County, Iowa: Public Safety Partnership and Community Policing Grants Helping Services for Northeast Iowa, Inc.: Enforcing Underage Drinking Laws Program Enforcing Underage Drinking Laws Program Dubuque County, Iowa: Edward Byrne Memorial Justice Assistance Grant Program Department of Transportation: Iowa Department of Transportation: Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Capital Assistance Program for Elderly Persons and Persons with Disabilities Job Access -Reverse Commute 16.710 07 JAG/C06-A16 16.727 20-JD06-F07 16.727 20-JD04-F506 16.738 07 JAG/C06-F07 $ 15,000 8,200 2,104 7,315 5,196 2,730 7,926 20,619 20.205 STP-ES-2100(617)- -8I-31 32,280 20.205 STP-U-2100(635)- -70-31 151,268 20.205 STP-U-2100(634)- -70-31 761,709 20.205 STP-E-2100(631)- -8V-31 28,412 20.205 STP-E-2100(628)- -8V-31 144,842 20.205 STP-A-020-9(187)- -22-31 59,272 20.205 STP-A-020-9(186)- -22-31 201,098 20.205 STP-U-2100(623)- -70-31 1,004,667 20.205 STP-E-2100(618)- -8V-31 39,999 20.205 ER-2100-(636)- -58-31 223,544 2,647,091 20.513 16-X001-210-07 28,623 20.516 37-X006-210-01 33,912 (continued) 103 ~I~ Y ®F' V ~ V ~~~y I®VV ~ SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED J[II~lE 30, 2008 CFDA Agency or Program Grantor/Program Number Pass-through Number Expenditures Indirect: (continued) Department of Transportation: (continued) Governor's Traffic Safety Bureau: State and Community Highway Safety 20.600 PAP 08-03, TASK 06 $ 25,640 State and Community Highway Safety 20.600 07-04, TASK 12 5,360 31,000 Safety Incentives to Prevent Operation of Motor Vehicles by Intoxicated Persons 20.605 PAP 07-163, TASK 27 14,347 Environmental Protection Agency: Iowa Finance Authority: Capitalization Grants for Clean Water State Revolving Funds 66.458 PD-CW-06-41 20,414 Capitalization Grants for Clean Water State Revolving Funds 66.458 PD-CW-06-39 3,271 23,685 Department of Health and Human Services: Iowa Department of Public Health: Childhood Lead Poisoning Prevention Projects -State and Local Childhood Lead Poisoning Prevention and Surveillance of Blood Lead Levels in Children 93.197 5888LP05 19,057 Childhood Lead Poisoning Prevention Projects -State and Local Childhood Lead Poisoning Prevention and Surveillance of Blood Lead Levels in Children 93.197 5887LP05 2,875 21,932 Centers for Disease Control and Prevention - Investigations and Technical Assistance 93.283 3107 7,772 Corporation for National and Community Service: Iowa Commission on Volunteers: AmeriCorps Department of Homeland Security: Iowa Department of Public Defense: Disaster Grants -Public Assistance Total Indirect Total 94.006 07-AF-13 109,479 97.036 FEMA-DR-1763- DR-IA 94,870 3,073,875 10.344.713 See notes to the Schedule of Expenditures of Federal Awards. 104 CITY ®F I)iJ~iJQIJE, I®WA NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED J[JNE 30, 2005 NOTE 1-BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City of Dubuque, Iowa, and is presented on the accrual basis of accounting. The information on this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. NOTE 2 - SUBRECIPIENTS Of the federal expenditures presented in the schedule, the City of Dubuque, Iowa, provided federal awards to subrecipients as follows: Program Title Federal Amount Provided CFDA Number to subrecipients Community Development Block Grants/ Entitlement Grants 14.218 $ 232,060 105 CITY ®F I.T~ITQIJE, I®WA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED ,I[TNE 30, 2008 Part I: Summary of the Independent Auditor's Results: (a) Unqualified opinions were issued on the financial statements. (b) Significant deficiencies in internal control over financial reporting were disclosed by the audit of the financial statements, including a material weakness. (c) The audit did not disclose any non-compliance which is material to the financial statements. (d) No material weaknesses in internal control over the major programs were noted. (e) An unqualified opinion was issued on compliance with requirements applicable to the major programs. (f) The audit disclosed no audit findings which were required to be reported in accordance with the Office of Management and Budget Circular A-133, Section .510(a). (g) The major programs were: • CFDA Number 14.871 -Section 8 Housing Choice Vouchers • CFDA Number 97.044 -Assistance to Firefighters Grant (h) The dollar threshold used to distinguish between Type A and Type B programs was $310,341. (i) The City of Dubuque, Iowa, qualified as a low-risk auditee. Part II: Findings Related to the Financial Statements: SIGNIFICANT DEFICIENCY/MATERIAL WEAKNESS II-A-08 Preparation of Financial Statements - As auditors, we were requested to draft the financial statements and accompanying notes to the financial statements. It is the responsibility of management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Recommendation - We recognize that with a limited number of office employees, preparation of the financial statements is difficult. However, we recommend that City officials continue reviewing operating procedures in order to obtain the maximum internal control possible under the circumstances. Response -The American Institute of Certified Public Accountants implemented new auditing standards in 2007. There have been no changes in City procedures. A cost benefit analysis reflects that the City continue with the current contractual agreement that the CPA firm prepare our financial statements. Conclusion -Response accepted. 106 CITY ®F DLT~I.T~LTE, I®WA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED J[JNE 30, 2008 Part II: Findings Related to the Financial Statements: (continued) SIGNIFICANT DEFICIENCY II-B-08 Capital Assets -During our audit, there were adjustments to capital asset amounts. The City has a centralized custodian in the Finance Department who maintains a record of the City's capital assets, including additions and deletions made during the year. During the 2003 fiscal year, the City adopted Governmental Accounting Standards Board Statement No. 34. This statement increased the complexity of the capital assets by requiring governmental infrastructure and depreciation on governmental capital assets be reported. Adding to the complexity, the City has many large projects that are funded from more than one source, including transfers from multiple funds, bond proceeds, and grant revenue. In addition, the capital asset records are accumulated using many individual worksheets by fund and by department, leaving many opportunities for error. Recommendation -Due to this increased complexity, the City's capital asset records should be closely reviewed for errors by management with knowledge of capital asset policies. Response -The Director and/or the Assistant Finance Director will continue to monitor the preparation of capital asset records. The adjustments made during the audit were not significant as a percent of total capital assets, current year capital additions, or current and future depreciation expense. Conclusion -Response accepted. Part III: Other Findings Related to Required Statutory Reporting: III-A-08 Certified Budget -Function disbursements during the year ended June 30, 2008, did not exceed the amount budgeted. III-B-08 Questionable Expenditures - No expenditures that may not meet the requirements of public purpose as defined in an Attorney General's opinion dated Apri125, 1979, were noted. III-C-08 Travel Expense - No expenditures of City money for travel expenses of spouses of City officials or employees were noted. III-D-08 Business Transactions -Business transactions between the City and City officials or employees are detailed as follows: Name, Title, and Transaction Business Connection Description Amount Stacie Scott, employee, spouse is owner Construction $ 7,120 of Scott Elite Concrete Melissa McGinnis, employee, spouse is Construction 6,238 owner of Quality Brick 107 CITY ®F 1)1J~U~LTE, I®WA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FEAR ENDED JUNE 30, 2008 Part III: Other Findings Related to Required Statutory Reporting: (continued) Name, Title, and Transaction Business Connection Description Amount Dick Voetberg, council member, Airport Services $ 3,014 part-owner of Shepherd, Inc. Kevin Lynch, council member, owner of Services 670 Net Smart Jim Welty, employee, spouse is owner of Services 523 Circle DD Trucking, Inc. Cheryl Pregler, employee, spouse is owner Services 415 of Pregler Photography John Hefel, employee, spouse is owner of Services 395 A Frame of Mind Framing & Gallery Ric Jones, council member, owner of RJ Services 300 Productions In accordance with Chapter 362.5(10) of the Code of Iowa, the transactions with Net Smart, Circle DD Trucking, Inc., Pregler Photography, A Frame of Mind Framing & Gallery, or RJ Productions do not appear to represent conflicts of interest since total transactions with each individual were less than $1,500 during the fiscal year. In accordance with Chapter 362.5(4) of the Code of Iowa, the transactions with Scott Elite Concrete, Quality Brick, and Shepard, Inc., do not appear to represent conflicts of interest since the transactions were entered into through competitive bidding. III-E-08 Bond Coverage -Surety bond coverage of City officials and employees is in accordance with statutory provisions. The amount of coverage should be reviewed annually to insure the coverage is adequate for current operations. III-F-08 Council Minutes - No transactions were found that we believe should have been approved in the Council minutes but were not. III-G-08 Deposits and Investments - No instances of non-compliance with the deposit and investment provisions of Chapters 12B and 12C of the Code of Iowa and the City's investment policy were noted. III-H-08 Revenue Bonds - No instances of non-compliance with the provisions of the City's revenue bond resolutions were noted. III-I-08 Solid Waste Fees Retainage -The Dubuque Metropolitan Area Solid Waste Agency, a component unit of the City, used or retained the solid waste fees in accordance with Chapter 455B.310(2) of the Code of Iowa. 108 (This page has been left blank intentionally.) APPENDIX C FORMS OF CONTINUING DISCLOSURE CERTIFICATES CIG27.TXT CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Dubuque, Iowa (the "Issuer"), in connection with the issuance of $2,935,000 General Obligation Bonds, Series 2009A [(Taxable Build America Bonds)] (the "Bonds") dated the date of delivery. The Bonds are being issued pursuant to a Resolution of the Issuer approved on , 2009 (the "Resolution"). The Issuer covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Dissemination Agent" shall mean the Issuer or any Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Holders" shall mean the registered holders of the Bonds, as recorded in the registration books of the Registrar. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "Municipal Securities Rulemaking Board" or "MSRB" shall mean the Municipal Securities Rulemaking Board, 1900 Duke Street, Suite 600, Alexandria, VA 22314. "National Repository" shall mean the MSRB's Electronic Municipal Market Access website, a/1~/a "EMMA". "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State" shall mean the State of Iowa. SECTION 3. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than two hundred ten days (210) days after the end of the Issuer's fiscal year (presently June 30th), commencing with the report for the 2008/2009 fiscal year, provide to the National Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report must be submitted in such format as is required by the MSRB (currently electronically in PDF format, and after January 1, 2010, in searchable PDF format). The Annual Report may be submitted as a single document or as separate documents comprising a package. The Annual Report may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). (b) If the Issuer is unable to provide to the National Repository an Annual Report by the date required in subsection (a), the Issuer shall send a notice to the Municipal Securities Rulemaking Board, if any, in substantially the form attached as Exhibit A. (c) The Dissemination Agent shall: (i) each year file the Annual Report with the National Repository; and 2 (ii) (if the Dissemination Agent is other than the Issuer), file a report with the Issuer certifying that the Annual Report has been filed pursuant to this Disclosure Certificate, stating the date it was filed. SECTION 4. Content of Annual Reports. The Issuer's Annual Report shall contain or incorporate by reference the following: 1. The last available audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under State law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with generally accepted accounting principles, noting the discrepancies therefrom and the effect thereof. If the Issuer's audited financial statements for the preceding years are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. 2. Information prepared as of the end of the preceding fiscal year, of the type contained in the final Official Statement under the captions "City Property Values" "Debt Limit" "Direct Debt" "Other Debt" "Indirect General > > Obligation Debt", "Levies and Collection", and "Tax Rates". Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been filed with the National Repository. The Issuer shall clearly identify each such other document so included by reference. SECTION 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: (1) principal and interest payment delinquencies; (2) non-payment related defaults; 3 (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting fmancial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax-exempt status of the security; (7) modifications to rights of security holders; (8) bond calls; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the securities; and (11) rating changes. (b) Whenever the Issuer obtains the knowledge of the occurrence of a Listed Event, the Issuer shall as soon as possible determine if such event would be material under applicable federal securities laws. (c) If the Issuer determines that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the Issuer shall promptly file a notice of such occurrence with the Municipal Securities Rulemaking Board through the filing with the National Repository. Notwithstanding the foregoing, notice of Listed Events described in subsections (a) (8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Holders of affected Bonds pursuant to the Resolution. SECTION 6. Termination of Reporting Obli ag_ tion. The Issuer's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds or upon the Issuer's receipt of an opinion of nationally recognized bond counsel to the effect that, because of legislative action or final judicial action or administrative actions or proceedings, the failure of the Issuer to comply with 4 the terms hereof will not cause Participating Underwriters to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended. If such termination occurs prior to the fmal maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5(c). SECTION 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Issuer. SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Section 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of fmancial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same 5 manner as for a Listed Event under Section 5(c), and (ii) the Annual Report for the year in which the change is made will present a comparison or other discussion in narrative form (and also, if feasible, in quantitative form) describing or illustrating the material differences between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 10. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Certificate. Direct, indirect, consequential and punitive damages shall not be recoverable by any person for any default hereunder and are hereby waived to the extent permitted by law. A default under this Disclosure Certificate shall not be deemed an event of default under the Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. 6 SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Date: day of , 2009. CITY OF DUBUQUE, STATE OF IOWA By: Mayor ATTEST: By: City Clerk 7 EXHIBIT A NOTICE TO NATIONAL REPOSITORY OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Dubuque, Iowa. Name of Bond Issue: $2,935,000 General Obligation Bonds, Series 2009A [(Taxable Build America Bonds)] Dated Date of Issue: The date of delivery NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certificate delivered by the Issuer in connection with the Bonds. The Issuer anticipates that the Annual Report will be filed by Dated: day of , 20 CITY OF DUBUQUE, STATE OF IOWA By: Its: DCORNELL/ 630599.1 /MSWord\10422.092 CIG27.TXT CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Dubuque, Iowa (the "Issuer"), in connection with the issuance of $11,175,000 General Obligation Urban Renewal Bonds, Series 2009B [(Taxable Build America Bonds)] (the "Bonds") dated the date of delivery. The Bonds are being issued pursuant to a Resolution of the Issuer approved on 2009 (the "Resolution"). The Issuer covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Dissemination Agent" shall mean the Issuer or any Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Holders" shall mean the registered holders of the Bonds, as recorded in the registration books of the Registrar. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "Municipal Securities Rulemaking Board" or "MSRB" shall mean the Municipal Securities Rulemaking Board, 1900 Duke Street, Suite 600, Alexandria, VA 22314. "National Repository" shall mean the MSRB's Electronic Municipal Market Access website, a/k/a "EMMA". "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State" shall mean the State of Iowa. SECTION 3. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than two hundred ten days (210) days after the end of the Issuer's fiscal year (presently June 30th), commencing with the report for the 2008/2009 fiscal year, provide to the National Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report must be submitted in such format as is required by the MSRB (currently electronically in PDF format, and after January 1, 2010, in searchable PDF format). The Annual Report may be submitted as a single document or as separate documents comprising a package. The Annual Report may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). (b) If the Issuer is unable to provide to the National Repository an Annual Report by the date required in subsection (a), the Issuer shall send a notice to the Municipal Securities Rulemaking Board, if any, in substantially the form attached as Exhibit A. (c) The Dissemination Agent shall: (i) each year file the Annual Report with the National Repository; and 2 (ii) (if the Dissemination Agent is other than the Issuer), file a report with the Issuer certifying that the Annual Report has been filed pursuant to this Disclosure Certificate, stating the date it was filed. SECTION 4. Content of Annual Reports. The Issuer's Annual Report shall contain or incorporate by reference the following: 1. The last available audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under State law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with generally accepted accounting principles, noting the discrepancies therefrom and the effect thereof. If the Issuer's audited financial statements for the preceding years are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited fmancial statements in a format similar to the financial statements contained in the fmal Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. 2. Information prepared as of the end of the preceding fiscal year, of the type contained in the final Official Statement under the captions "City Properly Values" "Debt Limit" "Direct Debt" "Other Debt" "Indirect General Obligation Debt", "Levies and Collection", and "Tax Rates". Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been filed with the National Repository. The Issuer shall clearly identify each such other document so included by reference. SECTION 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: (1) principal and interest payment delinquencies; 3 (2) non-payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax-exempt status of the security; (7) modifications to rights of security holders; (8) bond calls; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the securities; and (11) rating changes. (b) Whenever the Issuer obtains the knowledge of the occurrence of a Listed Event, the Issuer shall as soon as possible determine if such event would be material under applicable federal securities laws. (c) If the Issuer determines that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the Issuer shall promptly file a notice of such occurrence with the Municipal Securities Rulemaking Board through the filing with the National Repository. Notwithstanding the foregoing, notice of Listed Events described in subsections (a) (8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Holders of affected Bonds pursuant to the Resolution. SECTION 6. Termination of Reporting Obli ag tion. The Issuer's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds or upon the Issuer's receipt of an opinion of nationally recognized bond counsel to the effect that, because of legislative action or final judicial 4 action or administrative actions or proceedings, the failure of the Issuer to comply with the terms hereof will not cause Participating Underwriters to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5(c). SECTION 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Issuer. SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate,. and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Section 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in 5 preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(c), and (ii) the Annual Report for the year in which the change is made will present a comparison or other discussion in narrative form (and also, if feasible, in quantitative form) describing or illustrating the material differences between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 10. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Certificate. Direct, indirect, consequential and punitive damages shall not be recoverable by any person for any default hereunder and are hereby waived to the extent permitted by law. A default under this Disclosure Certificate shall not be deemed an event of default under the Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. 6 SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Date: day of , 2009. CITY OF DUBUQUE, STATE OF IOWA By: Mayor ATTEST: By: City Clerk 7 EXHIBIT A NOTICE TO NATIONAL REPOSITORY OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Dubuque, Iowa. Name of Bond Issue: $11,175,000 General Obligation Urban Renewal Bonds, Series 2009B [(Taxable Build America Bonds)] Dated Date of Issue: The date of delivery NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certificate delivered by the Issuer in connection with the Bonds. The Issuer anticipates that the Annual Report will be filed by Dated: day of , 20 CITY OF DUBUQUE, STATE OF IOWA By: Its: DCORNELL/ 630607.1 /MSWord\10422.092 CIG27.TXT CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Dubuque, State of Iowa (the "Issuer"), in connection with the issuance of $9,500,000 General Obligation Refunding Bonds, Series 2009C (the "Bonds") dated the date of delivery. The Bonds are being issued pursuant to a Resolution of the Issuer approved on , 2009 (the "Resolution"). The Issuer covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Dissemination Agent" shall mean the Issuer or any Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Holders" shall mean the registered holders of the Bonds, as recorded in the registration books of the Registrar. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "Municipal Securities Rulemaking Board" or "MSRB" shall mean the Municipal Securities Rulemaking Board, 1900 Duke Street, Suite 600, Alexandria, VA 22314. "National Repository" shall mean the MSRB's Electronic Municipal Market Access website, a/k/a "EMMA". "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State" shall mean the State of Iowa. SECTION 3. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than two hundred ten days (210) days after the end of the Issuer's fiscal year (presently June 30th), commencing with the report for the 2008/2009 fiscal year, provide to the National Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report must be submitted in such format as is required by the MSRB (currently electronically in PDF format, and after January 1, 2010, in searchable PDF format). The Annual Report may be submitted as a single document or as separate documents comprising a package. The Annual Report may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). (b) If the Issuer is unable to provide to the National Repository an Annual Report by the date required in subsection (a), the Issuer shall send a notice to the Municipal Securities Rulemaking Board, if any, in substantially the form attached as Exhibit A. (c) The Dissemination Agent shall: (i) each year file the Annual Report with the National Repository; and 2 (ii) (if the Dissemination Agent is other than the Issuer), file a report with the Issuer certifying that the Annual Report has been filed pursuant to this Disclosure Certificate, stating the date it was filed. SECTION 4. Content of Annual Reports. The Issuer's Annual Report shall contain or incorporate by reference the following: 1. The last available audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under State law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with generally accepted accounting principles, noting the discrepancies therefrom and the effect thereof. If the Issuer's audited financial statements for the preceding years are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the fmancial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. 2. Information prepared as of the end of the preceding fiscal year, of the type contained in the final Official Statement under the captions "City Property Values" "Debt Limit" "Direct Debt" "Other Debt" "Indirect General > > Obligation Debt", "Levies and Collection", and "Tax Rates". Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been filed with the National Repository. The Issuer shall clearly identify each such other document so included by reference. SECTION 5. Reporting of Si~;nificant Events. (a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: (1) principal and interest payment delinquencies; (2) non-payment related defaults; 3 (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax-exempt status of the security; (7) modifications to rights of security holders; (8) bond calls; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the securities; and (11) rating changes. (b) Whenever the Issuer obtains the knowledge of the occurrence of a Listed Event, the Issuer shall as soon as possible determine if such event would be material under applicable federal securities laws. (c) If the Issuer determines that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the Issuer shall promptly file a notice of such occurrence with the Municipal Securities Rulemaking Board through the filing with the National Repository. Notwithstanding the foregoing, notice of Listed Events described in subsections (a) (8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Holders of affected Bonds pursuant to the Resolution. SECTION 6. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds or upon the Issuer's receipt of an opinion of nationally recognized bond counsel to the effect that, because of legislative action or final judicial action or administrative actions or proceedings, the failure of the Issuer to comply with 4 the terms hereof will not cause Participating Underwriters to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5(c). SECTION 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Issuer. SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Section 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver 'either (i) is approved by the Holders of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of fmancial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same 5 manner as for a Listed Event under Section 5(c), and (ii) the Annual Report for the year in which the change is made will present a comparison or other discussion in narrative form (and also, if feasible, in quantitative form) describing or illustrating the material differences between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 10. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Certificate. Direct, indirect, consequential and punitive damages shall not be recoverable by any person for any default hereunder and are hereby waived to the extent permitted by law. A default under this Disclosure Certificate shall not be deemed an event of default under the Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 11. Duties, Immunities and Liabilities of Dissemination A e~nt. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. 6 SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Date: day of , 2009. CITY OF DUBUQUE, STATE OF IOWA By: Mayor ATTEST: By: City Clerk 7 EXHIBIT A NOTICE TO NATIONAL REPOSITORY OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Dubuque, Iowa. Name of Bond Issue: $9,500,000 General Obligation Refunding Bonds, Series 2009C Dated Date of Issue: The date of delivery NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certificate delivered by the Issuer in connection with the Bonds. The Issuer anticipates that the Annual Report will be filed by Dated: day of , 20 CITY OF DUBUQUE, STATE OF IOWA By: Its: DCORNELL/630610.1 /MSWord\10422.092 OFFICIAL BID FORM TO: City Council of City of Dubuque, Iowa Sale Date: October 5, 2009 11:00 AM Central Time RE: $2,935,000 General Obligation Bonds, Series 2009A (the "Series 2009A Tax-Exempt Bonds") For all or none of the above Series 2009A Tax-Exempt Bonds, in accordance with the Terms of Offering, we will pay you $ (not less than $2,905,650 plus accrued interest to date of delivery for fully registered bonds bearing interest rates and maturing in the stated years as follows: due 2011 % due 2021 due 2012 % due 2022 due 2013 % due 2023 due 2014 % due 2024 due 2015 % due 2025 due 2016 % due 2026 due 2017 % due 2027 due 2018 % due 2028 due 2019 % due 2029 due 2020 In making this offer we accept all of the terms and conditions of the Terms of Offering published in the Preliminary Official Statement dated September 25, 2009. In the event of failure to deliver the Series 2009A Tax-Exempt Bonds in accordance with the Terms of Offering as printed in the Preliminary Official Statement and made a part hereof, we reserve the right to withdraw our offer. All blank spaces of this offer are intentional and are not to be construed as an omission. Not as a part of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we have made the following computations: NET INTEREST COST: $ TRUE INTEREST COST: Account Manager: Account Members: By: The foregoing offer is hereby accepted by and on behalf of the City Council of the City of Dubuque, Iowa this 5th day of October, 2009. Attest: (Dated date November 10, 2009) By: Title: Title: (This page has been left blank intentionally.) oFF><c><AL >g>ru Foxlv>< TO: City Council of Sale Date: October 5, 2009 City of Dubuque, Iowa 11:00 AM Central Time RE: $2,935,000 General Obligation Bonds, Taxable Series 2009A (the "Series 2009A Taxable Bonds") For all or none of the above Series 2009A Taxable Bonds, in accordance with the Terms of Offering, we will pay you $ (not less than $2,905,650 plus accrued interest to date of delivery for fully registered bonds bearing interest rates and maturing in the stated years as follows: due 2011 % due 2021 due 2012 % due 2022 due 2013 % due 2023 due 2014 % due 2024 due 2015 % due 2025 due 2016 % due 2026 due 2017 % due 2027 due 2018 % due 2028 due 2019 % due 2029 due 2020 In making this offer we accept all of the terms and conditions of the Terms of Offering published in the Preliminary Official Statement dated September 25, 2009. In the event of failure to deliver the Series 2009A Taxable Bonds in accordance with the Terms of Offering as printed in the Preliminary Official Statement and made a part hereof, we reserve the right to withdraw our offer. All blank spaces of this offer are intentional and are not to be construed as an omission. Not as a part of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we have made the following computations: NET INTEREST COST: $ TRUE INTEREST COST: % (Dated date November 10, 2009) Account Manager: Account Members: By: The foregoing offer is hereby accepted by and on behalf of the City Council of the City of Dubuque, Iowa this 5th day of October, 2009. Attest: Title: By: _ Title: (This page has been left blank intentionally.) OFFICIAL BID FORM TO: City Council of City of Dubuque, Iowa Sale Date: October 5, 2009 11:00 AM Central Time RE: $11,175,000 General Obligation Urban Renewal Bonds, Series 2009B (the "Series 2009B Tax-Exempt Bonds") For all or none of the above Series 2009B Tax-Exempt Bonds, in accordance with the Terms of Offering, we will pay you $ (not less than $11,063,250) plus accrued interest to date of delivery for fully registered bonds bearing interest rates and maturing in the stated years as follows: due 2011 due 2012 due 2013 due 2014 due 2015 due 2016 due 2017 due 2018 due 2019 due 2020 due2021 due 2022 due 2023 due 2024 due 2025 due 2026 due 2027 due 2028 due 2029 In making this offer we accept all of the terms and conditions of the Terms of Offering published in the Preliminary Official Statement dated September 25, 2009. In the event of failure to deliver the Series 2009B Tax-Exempt Bonds in accordance with the Terms of Offering as printed in the Preliminary Official Statement and made a part hereof, we reserve the right to withdraw our offer. All blank spaces of this offer are intentional and are not to be construed as an omission. Not as a part of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we have made the following computations: NET INTEREST COST; $ TRUE INTEREST COST: Account Manager: (Dated date November 10, 2009) By: Account Members: The foregoing offer is hereby accepted by and on behalf of the City Council of the City of Dubuque, Iowa this 5th day of October, 2009. Attest: By: Title: Title: (This page has been left blank intentionally.) OFFICIAL BID FORM TO: City Council of Sale Date: October 5, 2009 City of Dubuque, Iowa 11:00 AM Central Time RE: $11,175,000 General Obligation Urban Renewal Bonds, Taxable Series 2009B (the "Series 2009B Taxable Bonds") For all or none of the above Series 2009B Taxable Bonds, in accordance with the Terms of Offering, we will pay you $ (not less than $11,063,250) plus accrued interest to date of delivery for fully registered bonds bearing interest rates and maturing in the stated years as follows: due 2011 % due 2021 due 2012 % due 2022 due 2013 % due 2023 due 2014 % due 2024 due 2015 % due 2025 due 2016 % due 2026 due 2017 % due 2027 due 2018 % due 2028 due 2019 % due 2029 due 2020 In making this offer we accept all of the terms and conditions of the Terms of Offering published in the Preliminary Official Statement dated September 25, 2009. In the event of failure to deliver the Series 2009B Taxable Bonds in accordance with the Terms of Offering as printed in the Preliminary Official Statement and made a part hereof, we reserve the right to withdraw our offer. All blank spaces of this offer are intentional and are not to be construed as an omission. Not as a part of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we have made the following computations: NET INTEREST COST: $ TRUE INTEREST COST: Account Manager: Account Members: (Dated date November 10, 2009) The foregoing offer is hereby accepted by and on behalf of the City Council of the City of Dubuque, Iowa this 5`h day of October, 2009. Attest: Title: By: _ Title: (This page has been left blank intentionally.) OFFICIAL BID FOI~IVI TO: City Council of City of Dubuque, Iowa Sale Date: October 5, 2009 11:00 AM Central Time RE: $9,500,000 General Obligation Refunding Bonds, Series 2009C (the "Series 2009C Bonds") For all or none of the above Series 2009C Bonds, in accordance with the Terms of Offering, we will pay you $ (not less than $9,438,250) plus accrued interest to date of delivery for fully registered Series 2009C Bonds bearing interest rates and maturing in the stated years as follows: due 2010 due 2011 due 2012 due 2013 due 2014 due 2015 due 2016 due2017 due 2018 due 2019 due 2020 due 2021 In making this offer we accept all of the terms and conditions of the Terms of Offering published in the Preliminary Official Statement dated September 25, 2009. In the event of failure to deliver the Series 2009C Bonds in accordance with the Terms of Offering as printed in the Preliminary Official Statement and made a part hereof, we reserve the right to withdraw our offer. All blank spaces of this offer are intentional and are not to be construed as an omission. Not as a part of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we have made the following computations: NET INTEREST COST: $ TRUE INTEREST COST: (Dated date November 10, 2009) Account Manager: Account Members: The foregoing offer is hereby accepted by and on behalf of the City Council of the City of Dubuque, Iowa this 5th day of October, 2009. Attest: By: Title: Title: