CAFR Financial Report & Letters
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MEMORANDUM
January 10, 2005
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Submission of Fiscal Year Ended June 30, 2004 Comprehensive Annual
Financial Report (CAFR), Parking Facilities Financial Statements,
Management Letter and Responses to Management Letter
Finance Director Ken TeKippe is transmitting the Fiscal Year 2004 Comprehensive
Financial Report (CAFR), Parking Facilities Financial Statements, Management Letter
and City Responses to the Management Letter. The City's independent auditor found no
instances of material non-compliance with all applicable laws, regulations, contracts,
and grants; and issued an unqualified opinion on the financial statements. The auditor's
report also notes that there are no material weaknesses in the City's internal control
structure. As part of the annual audit, the Auditor provides comments in a management
letter for improving the financial management system of the City. The Auditor's
comments are attached, as well as Finance Department responses.
f hC')¡l) III 'ï )/i{L
Michael C. Van Milligen
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Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Kenneth J. TeKippe, Finance Director
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Memorandum
TO:
Michael C. Van Milligen, City Manager
FROM:
Kenneth J. TeKippe, Finance Director
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SUBJECT: Submission of Fiscal Year Ended June 30, 2004 Comprehensive Annual
Financial Report (CAFR), Parking Facilities Financial Statements,
Management Letter and Responses to Management Letter
DATE:
January 10, 2005
INTRODUCTION
The purpose of this memorandum is to submit the Fiscal Year 2004 CAFR and Parking
Facilities Financial Statements audited by Eide Bailly, LLP, and to enclose the Auditor's
Management Letter along with the City Finance staff's response. The City's
independent auditor found no instances of material non-compliance with all applicable
laws, regulations, contracts, and grants; and issued an unqualified opinion on the
financial statements. The auditor's report also notes that there are no material
weaknesses in the City's internal control structure.
BACKGROUND
The City of Dubuque is required to have an annual audit in accordance with generally
accepted auditing standards, Chapter 11 of the Code ill Iowa, Government Auditinq
Standards and U.S. Office of Management and Budget (OMB) Circular A-133.
This Comprehensive Annual Financial Report is in conformance with the standards set
by OMB Circular A-133. This federal regulation mandates audit standards for federal
programs.
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund
financial statements. Governmental fund financial statements are reported using the
current financial resources measurement focus and the modified accrual basis of
accounting.
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Separate financial statements are required for Parking Facilities and Dubuque
Metropolitan Area Solid Waste Agency and have been received. The financial
information for these entities is included in the City of Dubuque CAFR.
AUDITOR'S MANAGEMENT LETTER
As part of the annual audit, the Auditor provides comments in a management letter for
improving the financial management system of the City. The Auditor's comments are
enclosed as well as Finance Department responses.
ACTION STEP
It is recommended that the City Council receives and files the Fiscal Year 2004 reports
identified above and receives and files this communication and related enclosures.
Copies of the financial statements for the Dubuque Metropolitan Area Solid Waste
Agency are available in the Finance Department if desired by Council members.
KJT/jmg
Enclosures: Fiscal Year 2004 CAFR
Parking Facilities Financial Statements
Auditor Management Letter
Responses to Comments in Auditor Management Letter
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EideBailly,
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CPA, & BUSINESS ADVISORS
To the Honorable Mayor and Members of
the City Council
City of Dubuque
Dubuque, Iowa
We have audited the financial statements of the City of Dubuque, Iowa, for the year ended June 30, 2004, and
have issued our report thereon dated November 10, 2004. Professional standards require that we provide you with
the following information related to our audit.
Our Responsibility under Auditinl! Standards Generally Accepted in the United
States of America and OMB Circular A-133
As stated in our engagement letter dated May 9,2001, our responsibility, as described by professional standards,
is to plan and perform our audit to obtain reasonable, but not absolute, assurance about whether the financial
statements are free of material misstatement and are fairly presented in accordance with accounting principles
generally accepted in the United States of America. Because an audit is designed to provide reasonable, but not
absolute, assurance and because we did not perform a detailed examination of all transactions, there is a risk that
material misstatements may exist and not be detected by us.
In planning and performing our audit, we considered the City's internal control over financial reporting in order to
determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not
to provide assurance on the internal control over financial reporting. We also considered 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 and to test and report
on internal control over compliance in accordance with OMB Circular A-133.
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
grants, noncompliance with which could have a direct and material effect on the determination of financial
statement amounts. However, providing an opinion on compliance with those provisions was not an objective of
our audit. Also, in accordance with OMB Circular A-133, we examined, on a test basis, evidence about the City's
compliance with the types of compliance requirements described in the us. Office of Management and Budget
(OMB) Circular A-I33 Compliance Supplement applicable to each of its major federal programs for the purpose
of expressing an opinion on the City's compliance with those requirements. While our audit provides a reasonable
basis for our opinion, it does not provide a legal determination on the City's compliance with those requirements.
PEOPLE. PRINCIPLES. POSSIBILITIES.
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3999 Pe"'ylva,;a Ave., Soite 1001 Doboqoe, Iowa 52002.26391 Pho,e 563.556.1790 1 Fax 563.557.7B42 1 EOE
To the Honorable Mayor and Members of
the City Council
City of Dubuque
Page 2
Significant Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. In accordance with the
terms of our engagement letter, we will advise management about the appropriateness of accounting policies and
their application. The significant accounting policies used by the City of Dubuque, Iowa, are described in Note 1
to the financial statements. No new accounting policies were adopted and the application of existing policies was
not changed during the year ended June 30, 2004. We noted no transactions entered into by the City during the
year that were both significant and unusual, and of which, under professional standards, we are required to inform
you, or transactions for which there is a lack of authoritative guidance or consensus.
Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management's knowledge and experience about past and current events and assumptions about future events.
Certain accounting estimates are particularly sensitive because oftheir significance to the financial statements and
because of the possibility that future events affecting them may differ significantly from those expected.
Audit Adjustments
For purposes of this letter, professional standards define an audit adjustment as a proposed correction of the
financial statements that, in our judgment, may not have been detected except through our auditing procedures.
An audit adjustment mayor may not indicate matters that could have a significant effect on the City's financial
reporting process (that is, cause future financial statements to be materially misstated). In our judgment, none of
the adjustments we proposed, whether recorded or unrecorded by the City, either individually or in the aggregate,
indicate matters that could have a significant effect on the City's financial reporting process.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or
not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be
significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements
arose during the course of our audit.
Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters,
similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an
accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may
be expressed on those statements, our professional standards require the consulting accountant to check with us to
determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with
other accountants.
To the Honorable Mayor and Members of
the City Council
City of Dubuque
Page 3
Issues Discussed Prior to Retention of Independent Auditors
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City's auditors. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a condition to our
retention.
Difficulties Encountered in Performing the Audit
We encountered no difficulties in dealing with management in performing and completing our audit.
Other Comments
We have included additional comments regarding the financial statements and operations. These comments are
not a result of in-depth study of any specific areas but are based on observations made during the course of our
audit. Our observations indicate that overall financial operations of the City continue to be conducted in an
efficient and effective manner.
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. This
report is not intended to be and should not be used by anyone other than these specified parties.
As always, we will be happy to discuss these or any other topics at your convenience. We would like to take this
opportunity to express our appreciation to you and your staff for the fine cooperation that we received during the
course of the audit. We look forward to many years of continued service to the City of Dubuque, Iowa.
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Dubuque, Iowa
November 10, 2004
CITY OF DUBUQUE, IOWA
YEAR ENDED JUNE 30, 2004
OTHER COMMENTS
Conversion of Accountinl! Records
The City maintains its records using the cash basis of accounting. However, in order to comply with accounting
principles generally accepted in the United States of America, the comprehensive annual financial report (CAFR)
must be prepared using the modified accrual/accrual basis of accounting. Eide Bailly LLP currently posts all
adjustments at year-end which are necessary to convert the City's cash-basis amounts to the amounts used in the
CAFR.
At this time, the City is preparing the workpapers needed to convert the accounting records to the modified
accrual/accrual basis at year-end. Eide Bailly LLP posts the journal entries and prepares the financial statements.
Although it may require increased staffing levels, we encourage the Finance Department to continue in their
advancement of converting to the modified accrual/accrual basis and preparation of the financial statements
required in the CAFR.
Internal Controls of Golf Courses
It is the written policy of the golf courses to issue receipts for green fees. It was noted during our audit
procedures, that this policy is not always followed. It is recommended that all employees be informed of and be
required to follow the City's procedures and policies.
Capital Assets
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. Due to this increased complexity, the City's capital assets records should be closely reviewed for errors
by other staff with knowledge of capital asset policies. The compilation and review of all of the City's capital
asset records, including department summaries, should be completed prior to the beginning of the October audit
fieldwork.
New Governmental Accountinl! Standards Board (GASB) Statements
The Governmental Accounting Standards Board (GASB) has issued five statements not yet implemented by the
City of Dubuque. The statements, which might impact the City, are as follows:
Statement No. 40, Deposit and Investment Risk Disclosures issued March 2003, will be effective for the City for
the fiscal year ending June 30, 2005. This statement addresses common deposit and investment risks related to
credit risk, concentration of credit risk, interest rate risk, and foreign currency risk.
Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance
Recoveries issued November 2003, will be effective for the City for the fiscal year ending June 30, 2006. This
statement establishes accounting and financial reporting standards for impairment of capital assets and also
clarifies and establishes accounting requirements for insurance recoveries.
CITY OF DUBUQUE, IOWA
YEAR ENDED JUNE 30, 2004
OTHER COMMENTS
Statement No. 43, Financial Reportingfor Postemployment Benefit Plans Other Than Pension Plans issued April
2004, will be effective for the City for the fiscal year ending June 30, 2008. This statement establishes uniform
financial reporting standards for other postemployment benefit (OPEB) plans and supersedes the interim guidance
included in Statement No. 26. This statement affects reporting by administrators or trustees of OPEB plan assets
or by employers or sponsors that include OPEB plan assets as trust or agency funds in their financial reports.
Statement No. 44, Economic Condition Reporting: The Statistical Section issued May 2004, will be effective for
the City for the fiscal year ending June 30, 2006. This statement amends previous guidance regarding preparation
of the statistical section for governments that issue a comprehensive annual financial report.
Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than
Pensions issued June 2004, will be effective for the City for the fiscal year ending June 30, 2009. This statement
establishes standards for the measurement, recognition, and display of (OPEB) expense/expenditures and related
liabilities (assets), note disclosures, and, if applicable, required supplementary information (RSI) in the financial
reports of state and local governmental employers.
The City's management has not yet determined the effect these statements will have on the City's financial
statements.
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Memorandum
FROM:
Michael C. Van Milligen, City Manager
Kenneth J. TeKippe, Finance Director ~ g. .(/Q ~
TO:
SUBJECT: Responses to Audit Management Letter-Fiscal Year Ended June 30, 2004
DATE:
January 10, 2005
INTRODUCTION
Responses to the "other comments" section of the November 10, 2004 management
letter issued by Eide Bailly LLP subsequent to completion of the Fiscal Year 2004 audit
of the City are hereby submitted.
BACKGROUND
A separate section in the Comprehensive Annual Financial Report (CAFR) for Fiscal
Year 2004 details specific findings and recommendations as well as City responses.
Pages 106-108 of the report provide this information. In addition to the comments in the
report, a management letter dated November 10, 2004 was issued which includes more
general comments relative to improving the City's overall accounting and control
systems.
DISCUSSION
Finance Department responses to the Auditor's other comments (listed in italics) follow:
Conversion of Accountinq Records
Auditor comment
The City maintains its records using the cash basis of accounting. However, in order to
comply with accounting principles generally accepted in the United States of America,
the comprehensive annual financial report (CAFR) must be prepared using the modified
accrual/accrual basis of accounting. Eide Bailly LLP currently posts all adjustments at
year-end which are necessary to convert the City's cash-basis amounts to the amounts
used in the CAFR.
At this time, the City is preparing the workpapers needed to convert the accounting
records to the modified accrual/accrual basis at year-end. Eide Bailly LLP posts the
journal entries and prepares the financial statements. Although it may require
increased staffing levels, we encourage the Finance Department to continue in their
advancement of converting to the modified accrual/accrual basis and preparation of the
financial statements required in the CAFR.
City of Dubuque response
As noted in the management letter, City staff prepared all workpapers to convert
records to the modified accruallaccrual basis. City staff will continue to work towards
converting records from cash to GAAP at year end and preparation of the financial
statements. The size of the City's professional accounting staff limits available
resources to fully accomplish this goal. The current audit engagement arrangement,
which has one year remaining, provides for the auditing firm to convert the records and
prepare the financial statements. A change or upgrade in accounting software and
continued staff development may assist in our efforts to implement the
recommendation. However, the limited number of professional accounting staff will
most likely result in the audit firm continuing to prepare the financial statements.
Internal Controls of Golf Courses
Auditor comment
It is the written policy of the golf courses to issue receipts for green fees. It was noted
during our audit procedures, that this policy is not always followed. It is recommended
that all employees be informed of and be required to follow the City's procedures and
policies.
City of Dubuque response
A memo has been sent to the Leisure Services Manager requesting that existing and
new staff be informed of the policy to provide customers receipts for green fees and
other purchases from the pro shop.
Capital Assets
Auditor comment
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.
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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. Due to this increased complexity, the City's capital assets records
should be closely reviewed for errors by other staff with knowledge of capital asset
policies. The compilation and review of all of the City's capital asset records, including
department summaries, should be completed prior to the beginning of the October audit
fieldwork.
City of Dubuque response
The Assistant Finance Director and I will work closely with the individual primarily
assigned to maintain capital asset records for the City to continue completing records
by October audit fieldwork. The auditors indicated verbally that significant improvement
has been made by City staff in this area.
New Governmental Accountinq Standards Board (GASB) Statements
Auditor comment
The Governmental Accounting Standards Board (GASB) has issued five statements not
yet implemented by the City of Dubuque. The statements, which might impact the City,
are as follows:
GASB Statement No. 40
Auditor comment
Deposit and Investment Risk Disclosures issued March 2003, will be effective for the
City for the fiscal year ending June 30, 2005. This statement addresses common
deposit and investment risks related to credit risk, concentration of credit risk, interest
rate risk, and foreign currency risk.
City of Dubuque response
The City Finance Department will coordinate with the CPA audit firm any information
required by GASB 40. Since the implementation is next fiscal year, time is available to
research any requirements applicable to the City of Dubuque.
GASB Statement No. 42
Auditor comment
Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance
Recoveries issued November 2003, will be effective for the City for the fiscal year
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ending June 30, 2006. This statement establishes accounting and financial reporting
standards for impairment of capital assets and also clarifies and establishes accounting
requirements for insurance recoveries.
City of Dubuque response
The City Finance Department will coordinate with the CPA audit firm any information
required by GASB 42. Since the implementation is two fiscal years away, time is
available to research any requirements applicable to the City of Dubuque.
GASB Statement No. 43
Auditor comment
Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
issued April 2004, will be effective for the City for the fiscal year ending June 30, 2008.
This statement establishes uniform financial reporting standards for other
postemployment benefit (OPEB) plans and supersedes the interim guidance included in
Statement No. 26. This statement affects reporting by administrators or trustees of
OPEB plan assets or by employers or sponsors that include OPEB plan assets as trust
or agency funds in their financial reports.
City of Dubuque response
The City Finance Department will coordinate with the CPA audit firm any information
required by GASB 43. Since the implementation is four fiscal years away. time is
available to research any requirements applicable to the City of Dubuque.
GASB Statement No. 44
Auditor comment
Economic Condition Reporting: The Statistical Section issued May 2004, will be
effective for the City for the fiscal year ending June 30, 2006. This statement amends
previous guidance regarding preparation of the statistical section for governments that
issue a comprehensive annual financial report.
City of Dubuque response
The City Finance Department will coordinate with the CPA audit firm any information
required by GASB 44. Since the implementation is two fiscal years away, time is
available to research any requirements applicable to the City of Dubuque.
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GASB Statement No. 45
Auditor comment
Accounting and Financial Reporting by Employers for Postemployment Benefits Other
Than Pensions issued June 2004, will be effective for the City for the fiscal year ending
June 30, 2009. This statement establishes standards for the measurement,
recognition, and display of (OPEB) expense/expenditures and related liabilities (assets),
note disclosures, and, if applicable, required supplementary information (RSI) in the
financial reports of state and local governmental employers.
City of Dubuque response
The City Finance Department will coordinate with the CPA audit firm any information
required by GASB 45. Since the implementation is five fiscal years away, time is
available to research any requirements applicable to the City of Dubuque.
KJT/jmg
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
FINANCIAL STATEMENTS
JUNE 30, 2004
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
Table of Contents
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OFFICIALS
INDEPENDENT AUDITOR'S REPORT
2-3
MANAGEMENT'S DISCUSSION AND ANALYSIS
4-7
FINANCIAL STATEMENTS
Statement of Net Assets
Statement of Revenues, Expenses, and Changes in Net Assets
Statement of Cash Flows
Notes to Financial Statements
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9
10-11
12-19
SUPPLEMENTARY INFORMATION
Combining Statement of Net Assets
Combining Statement of Revenues, Expenses, and Changes in Net Assets
Bond Ordinance Requirements
Schedule of Insurance Coverage
Schedule of Statistical Data
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23-24
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REPORT ON BOND ORDINANCE COMPLIANCE
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REPORT ON COMPLIANCE AND OTHER MATTERS AND ON INTERNAL
CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
27-28
SCHEDULE OF FINDINGS
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
OFFICIALS
Name
Title
Term Expires
Terrance M. Duggan
Mayor
December 2005
John H. Markham
Daniel E. Nicholson
Joyce E. Connors
Council Member
Council Member
Council Member
December 2005
December 2005
December 2005
Roy D. Buol
Patricia A. Cline
Ann E. Michalski
Council Member
Council Member
Council Member
December 2007
December 2007
December 2007
Michael C. Van Milligen
City Manager
Appointed by Council
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Barry A. Lindahl
Corporation Counsel
Appointed by Council
Jeanne F. Schneider
City Clerk
Appointed by Council
Kenneth J. TeKippe
Finance Director/Treasurer
Appointed by City Manager
Timothy M. Horsfield
Parking Division Manager
Appointed by City Manager
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EideBailly,
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CPA, & BUSINESS ADVISORS
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INDEPENDENT AUDITOR'S REPORT
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To the Honorable Mayor and Members of
the City Council:
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We have audited the accompanying financial statements of the Parking Facilities of the City of Dubuque,
Iowa, as of and for the year ended June 30, 2004, as listed in the table of contents. These financial
statements are the responsibility of the City's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
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We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; Chapter 11 of the Code of Iowa; and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States. Those standards
and provisions 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 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 opinion.
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As discussed in Note I, the financial statements referred to above present only the Parking Facilities of
the City of Dubuque, Iowa, and are not intended to present fairly the financial position of the City of
Dubuque and the changes in financial position and cash flows of its proprietary fund types in conformity
with accounting principles generally accepted in the United States of America.
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In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the Parking Facilities of the City of Dubuque, Iowa, as of June 30, 2004, and the
changes in financial position and cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
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In accordance with Government Auditing Standards, we have also issued our report dated September 16,
2004, on our consideration of the Parking Facilities' 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 Government Auditing Standards and should be considered in assessing the
results of our audit.
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PEOPLE. PRINCIPLES. POSSIBILITIES.
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The management's discussion and analysis, listed in the table of contents, is not a required part of the
financial statements but is 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.
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Our audit was conducted for the purpose of forming an opinion on the financial statements of the Parking
Facilities of the City of Dubuque. The supplementary information section is presented for purposes of
additional analysis and is not a required part of the financial statements. The combining financial
statements have been subjected to the auditing procedures applied in the audit of the financial statements
and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as
a whole. The bond ordinance requirements, schedule of insurance coverage, and schedule of statistical
data have not been subjected to the auditing procedures applied in the audit of the financial statements,
and accordingly, we express no opinion on them.
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Dubuque, Iowa
September 16, 2004
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CITY OF DUBUQUE PARKING FACILITIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2004
This section of the financial report of the City of Dubuque Parking Facilities presents our
discussion and analysis of the financial performance during the fiscal year that ended on
June 30, 2004. Please read it in conjunction with the financial statements of the City of
Dubuque Parking Facilities found in this report.
FINANCIAL HIGHLIGHTS
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The assets of the Parking Facilities exceeded its liabilities at the close of the fiscal
year by $13,066,716 (net assets). This was an increase of$42,785 over net assets
at June 30, 2003. Unrestricted net assets at June 30, 2004 in the amount of
$614,142 may be used to meet the ongoing obligations of the Parking Facilities.
Total operating and construction fund revenues exceeded expenses by $3,487.
Within the Parking Facilities' operating fund, revenues and transfers exceeded
expenses by $147,660.
Within the Parking Facilities' construction fund, expenses exceeded revenues and
transfers by $104,875.
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OVERVIEW OF THE FINANCIAL STATEMENTS
The Parking Facilities' financial statements consist of a statement of net assets, a
statement of revenues, expenses, and changes in net assets and a statement of cash flows.
This discussion and analysis is intended to serve as an introduction to the financial
statements. This report also contains other supplementary information in addition to the
financial statements themselves.
The statement of net assets presents information on all ofthe Parking Facilities' 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 is improving or deteriorating.
The statement of activities presents information showing how the Parking Facilities' 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 ofthe timing of
related cash flows.
The statement of cash flows reports cash receipts, cash payments and net changes in cash
and cash equivalents resulting from four defined types of activities. It provides answers to
such questions as where did cash come from, what cash was used for and what was the
change in cash and cash equivalents during the reporting year.
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FINANCIAL ANALYSIS
Net assets. As noted earlier, net assets may serve as a useful indicator of a facility's
financial position when observed over time. In the case of the Parking Facilities, assets
exceeded liabilities by $13,066,716 at the close of the most recent fiscal year.
The largest part ofthe Parking Facilities' assets (92.6%) reflects its investment in capital
assets such as land, buildings, 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.
PARKING FACILITIES NET ASSETS
2004
Total
$ 1,245,163
15,680,569
16,925,732
Current and Other Assets
Capital Assets
Total Assets
Long-term Liabilities
Other Liabilities
Total Liabilities
3,482,000
377,016
3,859,016
Net Assets:
Invested in Capital Assets,
Net of Related Debt
Restricted
Unrestricted
Total Net Assets
11,898,569
554,005
614,142
$ 13,066,716
2003
Total
$ 1,208,046
16,023,958
17,232,004
3,777,959
430,114
4,208,073
11,960,999
553,677
509,255
$ 13,023,931
The decrease in long-term liabilities reflects principal paid during the past year.
Certain proceeds of revenue bonds, as well as certain resources set aside for their
repayment, are classified as restricted assets on the statement of net assets because their
use is limited by applicable bond covenants.
At the close of fiscal year 2004, the Parking Facilities are able to report total operating
income of$210,074 and an increase in net assets of$42,785.
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PARKING FACILITIES
CONDENSED STATEMENT OF REVENUES,
EXPENSES AND CHANGES IN NET ASSETS
2004
Total
2003
Total
Operating Revenues $ 1,643,490 $ 1,427,146
Operating Expenses 1,433,416 1,210,000
Operating Income 210,074 217,146
Nonoperating Revenues (Expenses) (206,587) (179,055)
Income (Loss) Before Capital
Contributions and Transfers 3,487 38,091
Capital Contributions 75,300
Transfers from City of Dubuque 55,299 6,716,575
Transfers to City of Dubuque (16,001) (218,986)
Change in Net Assets 42,785 6,610,980
Net Assets, Beginning 13,023,931 6,412,951
Net Assets, Ending $ 13,066,716 $ 13,023,931
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital assets. The Parking Facilities' investment in capital assets for its operating and
construction funds as of June 30, 2004, amounts to $15,680,569 (net of accumulated
depreciation). This investment in capital assets includes land, buildings, machinery and
equipment. Additional information on the Parking Facilities' assets can be found in Note
4 to the financial statements in this report.
CAPITAL ASSETS (net of accumulated depreciation)
2004 2003
Total Total
Land $ 1,296,209 $ 1,296,209
Buildings 19,069,788 18,956,368
Improvements and other buildings 246,961 246,961
Machinery and equipment 651,206 598,197
Construction in progress 86,300
Accumulated depreciation (5,583,595) (5,160,077)
$ 15,680,569 $ 16,023,958
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The financial statements reflected a transfer in during fiscal year 2003 for the completion
of a new parking ramp. Funding for the ramp was provided by a general obligation bond
issue with repayment through tax increment financing. The general obligation bond debt
for the new ramp is not reflected in these financial statements.
Long-term debt. At year end the Parking Facilities had $3,782,000 of debt outstanding.
This is a decrease of$280,959 from June 30, 2003. Additional information on the
Parking Facilities' long-term debt can be found in Note 5 to the financial statements in
this report.
ECONOMIC FACTORS
Revenue was fairly consistent since there were no significant rate changes. However,
revenue and expenses from parking enforcement activities were reflected with parking
facilities beginning in fiscal year ended June 30, 2004. Previously this activity was part of
the general fund.
Requests for information. This financial report is designed to provide a general
overview of the Parking Facilities' 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 City of
Dubuque, Finance Director, 50 West 13th Street, Dubuque, Iowa 52001-4864.
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LIABILITIES
CURRENT LIABILITIES
Accounts payable
Accrued payroll
General obligation bonds payable
Revenue bonds payable
Accrued compensated absences
Accrued interest payable
Total Current Liabilities
$
5,800
12,855
100,000
200,000
35,986
22,375
377,016
NONCURRENT LIABILITIES
General obligation bonds payable (net of
discount of $22,000)
Revenue bonds payable (net of $16,000
deferred amount on refunding)
Total Noncurrent Liabilities
2,348,000
1,134,000
3,482,000
Total Liabilities
3,859,016
NET ASSETS
Invested in capital assets, net of related debt
Restricted by bond ordinance
Unrestricted
Total Net Assets
11,898,569
554,005
614,142
$ 13,066,716
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
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
NONOPERATING REVENUES (EXPENSES)
Investment earnings
Interest expense
Total Nonoperating Revenues (Expenses)
INCOME BEFORE TRANSFERS
TRANSFERS FROM THE CITY OF DUBUQUE
TRANSFERS TO THE CITY OF DUBUQUE
CHANGE IN NET ASSETS
NET ASSETS, BEGINNING
NET ASSETS, ENDING
See notes to financial statements.
1,639,615
3,875
1,643,490
675,465
79,718
36,454
147,413
32,048
462,318
1,433,416
21 0,074
15,426
(222,013)
(206,587)
3,487
55,299
(16,001)
42,785
13,023,931
$ 13,066,716
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
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
$ 1,606,997
(365,722)
(671,622)
3,875
573,528
NET CASH PROVIDED BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES
Transfers from the City of Dubuque
Transfers to the City of Dubuque
55,299
(16,001)
NET CASH PROVIDED BY NONCAPIT AL
FINANCING ACTIVITIES
39,298
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets
Payment of debt
Interest paid
(118,929)
(280,959)
(223,865)
NET CASH USED FOR CAPITAL AND RELATED FINANCING
ACTIVITIES
(623,753)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
15,625
NET INCREASE IN CASH AND CASH EQUIVALENTS
4,698
CASH AND CASH EQUIVALENTS, BEGINNING
1,192,602
CASH AND CASH EQUIVALENTS, ENDING
$ 1,197,300
(continued)
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
STATEMENT OF CASH FLOWS (continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
Operating income
Total Adjustments
$ 210,074
462,318
(32,618)
(70,089)
3,843
363,454
$ 573,528
Adjustments to reconcile operating income to net cash
provided by operating activities
Depreciation
Change in assets and liabilities
Increase in receivables
Decrease in accounts payable
Increase in accrued liabilities
NET CASH PROVIDED BY OPERATING ACTIVITIES
See notes to financial statements.
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
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The financial statements include only those funds of the Parking Facilities and are not intended to present
all funds of the City of Dubuque, Iowa.
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Basis of Accounting
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The Parking Facilities' accounting records are maintained on the cash basis. However, for financial
reporting purposes, the accounting records have been adjusted to the accrual method, recognizing revenue
when earned and expenses when liabilities are incurred.
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Budgets and Budgetary Accounting
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In accordance with the Code of Iowa, the City Council annually adopts a budget on the cash basis of
accounting with an adjustment for accrued payroll following required public notice and hearing for all
funds. The annual budget may be amended during the year utilizing similar statutorily prescribed
procedures.
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Formal and legal budgetary control is based upon nine major classes of expenditures known as functions,
not by fund. These nine functions are public safety, public works, health and social services, culture and
recreation, community and economic development, general government, debt service, capital projects,
and business-type activities.
Deposits and Investments
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The Parking Facilities' 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.
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Restricted Assets
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Certain proceeds of revenue bonds, as well as certain resources set aside for their repayment, are
classified as restricted assets on the statement of net assets because their use is limited by applicable bond
covenants.
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Capital Assets
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Capital assets include property, plant, and equipment. Capital assets are defined by the government as
assets with an initial, individual cost of more than $20,000 for building assets and $5,000 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.
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The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
asset lives are not capitalized.
(continued on next page)
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
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Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest
incurred during the construction phase of capital assets is not included as part of the capitalized value of
the assets constructed.
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Capital assets are depreciated using the straight-line method over the following estimated useful lives:
Assets
Years
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Buildings
Improvements other than buildings
Machinery and equipment
40 to 125
15 to 50
2 to 30
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Compensated Absences
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The Parking Facilities allow employees to accumulate earned but unused vacation and sick pay benefits.
Such benefits are accrued when earned and are reported as liabilities.
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Equity
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Reservations of net assets represent amounts restricted by applicable bond covenants.
NOTE 2 - DEPOSITS AND INVESTMENTS
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The Parking Facilities' deposits at June 30, 2004, were entirely covered by federal depository insurance or
by the State Sinking Fund in accordance with Chapter l2C of the Code of Iowa. This chapter provides for
additional assessments against the depositories to insure there will be no loss of public funds.
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The Parking Facilities 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; prime eligible bankers
acceptances; certain high rated commercial paper; perfected repurchase agreements; certain registered
open-end management investment companies; certain joint investment trusts; and warrants or
improvement certificates of a drainage district.
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Investments are stated at fair value.
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The Parking Facilities' investments are pooled with other investments of the City. It is, therefore, not
possible to list the types of investments held by the Parking Facilities at June 30, 2004, nor is it possible
to categorize the investments to give an indication of the level of risk assumed by the Parking Facilities at
year-eud.
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
NOTE 3 - TRANSFERS
Transfers for the year ended June 30, 2004, consisted of the following:
Transfers to Parking Facilities from:
General Fund
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55 299
Transfers from Parking Facilities to:
America's River Project
$
1 6 J2Ql
Transfers from the General Fund represents the transfer of parking ticket receivables at June 30, 2003.
The Parking Facilities assumed the administration of parking fines in 2004. Transfers to the America's
River Project were made according to grant requirements and represent the financing of capital assets.
NOTE 4 - CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2004, was as follows:
Beginning Ending
Balance Increases Decreases Balance
Capital assets, not being depreciated:
Land $ 1,296,209 $ - $ $ 1,296,209
Construction in progress 86.300 108.870 (195.170)
Total capital assets, not being depreciated 1.382.509 108870 (195.170) 1.296.209
Capital assets, being depreciated:
Buildings 18,956,368 113,420 19,069,788
Improvements other than buildings 246,961 246,961
Machinery and equipment 598 197 91.809 (38.800) 651.206
Total capital assets, being depreciated 19.801.526 205.229 138.800) 19.967.955
Less accumulated depreciation for:
Buildings (4,764,864) (409,521) (5,174,385)
Improvements other than buildings (83,591) (10,861) (94,452)
Machinery and equipment (311.622) (41936) 38 800 (314.758)
Total accumulated depreciation (5.160077) (462.318) 38.800 (5.583.595)
Total capital assets, being depreciated, net 14641449 (257.089) 14 384.360
Total capital assets, net Ll6,Q23 958. ~ - !1A8 219) 1-:(195170\ U5.680 569
(continued on next page)
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
NOTE 5 - LONG-TERM DEBT
General Obligation Bonds. The City issued general obligation bonds to provide financing for the
acquisition and construction of parking facilities.
General obligation bonds are direct obligations and pledge the full faith and credit of the City. These
bonds were issued as serial bonds with varying amounts of principal maturing annually and with interest
payable semi-annually. General obligation bonds outstanding at June 30, 2004, are as follows:
Amount Amount
Date of Maturity Interest Originally Outstanding
Purpose Issue Dates Rates Issued End of Year
Corporate purpose 06/01100 06/01105-06/01/20 5.80-5.88% jL 2 750000 ~ 2ÆQ.QQQ-
Annual debt service requirements to maturity for general obligation bonds are as follows:
Fiscal Year Ending June 30 Principal Interest
2005 $ 100,000 $ 143,429
2006 105,000 137,629
2007 115,000 131,539
2008 120,000 124,869
2009 125,000 117,910
2010-2014 730,000 472,964
2015-2019 950,000 237,194
2020 225,000 13 219
Total $ 2470009 JL 1.378.753
Revenue Bonds. The City issued parking revenue bonds to provide financing for the acquisition and
construction of parking facilities. These bonds were issued as serial bonds with varying amounts of
principal maturing annually and with interest payable semi-annually. Parking revenue bonds outstanding
at June 30, 2004, are as follows:
Amount Amount
Date of Maturity Interest Originally Outstanding
Purpose Issue Dates Rates Issued End of Year
Parking facilities 03/01198 05/01105-05/01110 4.50-4.75% 2515000 L~1,35() 00(l
(continued on next page)
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
Revenue bond debt service requirements to maturity are as follows:
Fiscal Year Ending June 30 Principal Interest
2005 $ 200,000 $ 62,525
2006 210,000 53,525
2007 220,000 43,970
2008 230,000 33,850
2009 240,000 23,155
2010 250.000 11875
Total $ I 350000 $ 228900
The resolution providing for the issuance of the revenue bonds includes the following provisions:
a. A sum equal to one-tenth (1/10) of the principal of all bonds maturing on May 1 next succeeding, plus
a sum equal to one-fifth (1/5) ofthe interest coming due on the next succeeding interest payment date
on all of the then outstanding bonds, shall be set aside into a restricted sinking account from the net
revenue of the Operating Fund until the full amount of such installments is on hand.
b. A restricted reserve account shall maintain the lesser of 1) the maximum amount of principal and
interest coming due in any fiscal year; or 2) ten percent of the proceeds of the sale of the bonds.
c. $5,000 shall be set apart and paid into a restricted depreciation account from the balance of the net
off-street parking revenues and net on-street parking revenues remaining after first making the
required payments into the sinking account and the reserve account on the first day of each month of
each year up to a maximum of $250,000.
NOTE 6 - PENSION AND RETIREMENT BENEFITS
The Parking Facilities of the City of Dubuque, Iowa, contribute to the Iowa Public Employees Retirement
System (IPERS) which is a cost-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 3.70% of their annual covered salary, and the Parking Facilities
are required to contribute 5.75% of annual covered payroll. Contribution requirements are established by
state statute. The Parking Facilities' contributions to IPERS for the years ended June 30, 2004, 2003, and
2002, were $24,845, $22,974, and $19,449, respectively, equal to the required contributions for each year.
(continued on next page)
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
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NOTE 7 - LEGAL COMPLIANCE WITH BUDGET
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The City of Dubuque, Iowa, adopts a budget annually as required by Iowa law. The budget, which is
prepared on the cash basis of accounting with an adjustment for accrued payroll, includes those funds of
the Parking Facilities.
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Following is a schedule comparing the Parking Facilities' budget and actual disbursements using the cash
basis of accounting with an adjustment for accrued payroll for the year ended June 30, 2004:
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Function
Budget
Actual
Variance -
Positive
Business-type activities
$ 2.,m~l8L j¡ 1.828,3.83.
$
199.804
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As required by Iowa law, the City prepares its budget based upon nine major classes of expenditures
known as functions, not by individual fund. Therefore, the City must amend the budget only if the entire
City's function amounts will be exceeded, For the year ended June 30, 2004, the City's actual
disbursements were less than budgeted amounts for all functions, so the City has complied with legal
budget requirements.
NOTE 8 - RISK MANAGEMENT
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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.
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The City of Dubuque 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 $80,000 and an aggregate stop loss of
approximately $6,380,000 for 2004. 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.
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The City of Dubuque 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 $400,000, and an aggregate stop loss
consistent with statutory limits for 2004. Coverage from a private insurance company is maintained for
losses in excess of the stop loss amount. All claims handling procedures are perforrued 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 last
three fiscal years. The estimated liability does not include any allocated or unallocated claims adjustment
expense.
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
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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.
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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
490 members include various governmental entities throughout the State ofIowa. 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. There have been no reductions in insurance coverage from prior
years.
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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 equal 300 percent of the total current members' basis
rates or to comply with the requirements of any applicable regulatory authority having jurisdiction over
the Pool.
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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 in addition to the Pool.
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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 $250,000
per claim. Claims exceeding $250,000 are reinsured in an amount not to exceed $1,750,000 per claim and
$5,000,000 in aggregate per year. For members requiring specific coverage from $2,000,000 to
$10,000,000, such excess coverage is also reinsured. All property risks are also reinsured on an
individual-member basis.
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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 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, 2004, settled claims have not exceeded the risk pool or
reinsurance company coverage since the Pool's inception.
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
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.
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
COMBINING STATEMENT OF NET ASSETS
JUNE 30, 2004
Operating Construction
Fund Fund Total
ASSETS
CURRENT ASSETS
Cash and pooled cash investments $ 177,164 $ 466,131 $ 643,295
Receivables
Accounts 41,008 41,008
Accrued interest 6,855 6,855
Total Current Assets 225,027 466,131 691,158
NONCURRENT ASSETS
Restricted cash and pooled cash investments 554,005 554,005
Capital assets
Land 1,296,209 1,296,209
Buildings 19,069,788 19,069,788
Improvements other than buildings 246,961 246,961
Machinery and equipment 651,206 651,206
Accumulated depreciation (5,583,595) (5,583,595)
Net Capital Assets 15,680,569 15,680,569
Total Noncurrent Assets 16,234,574 16,234,574
Total Assets 16,459,601 466,131 16,925,732
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Operating
Fund
Construction
Fund
Total
LIABILITIES
CURRENT LIABILITIES
Accounts payable
Accrued payroll
General obligation bonds payable
Revenue bonds payable
Accrued compensated absences
Accrued interest payable
Total Current Liabilities
$
5,800 $
12,855
100,000
200,000
35,986
22,375
377,016
$
5,800
12,855
100,000
200,000
35,986
22,375
377,016
NONCURRENT LIABILITIES
General obligation bonds payable (net of
discount of $22,000)
Revenue bonds payable (net of$16,000
deferred amount on refunding)
Total Noncurrent Liabilities
Total Net Assets
2,348,000 2,348,000
1,134,000 1,134,000
3,482,000 3,482,000
3,859,016 3,859,016
11,898,569 11,898,569
554,005 554,005
148,011 466,131 614,142
$ 12,600,585 $ 466,131 $ 13,066,716
Total Liabilities
NET ASSETS
Invested in capital assets, net of related debt
Restricted by bond ordinance
Unrestricted
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN
NET ASSETS
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Operating Construction
Fund Fund Total
OPERATING REVENUES
Charges for sales and services 1,639,615 $ $ 1,639,615
Other 3,875 3,875
Total Operating Revenues 1,643,490 1,643,490
OPERATING EXPENSES
Employee expense 675,465 675,465
Utilities 79,718 79,718
Repairs and maintenance 36,454 36,454
Supplies and services 96,072 51,341 147,413
Insurance 32,048 32,048
Depreciation 462,318 462,318
Total Operating Expenses 1,382,075 51,341 1,433,416
OPERATING INCOME (LOSS) 261,415 (51,341) 210,074
NONOPERATING REVENUES (EXPENSES)
Investment earnings 4,990 10.436 15,426
Interest expense (222,013) (222,013)
Total Nonoperating Revenues (Expenses) (217,023) 10,436 (206,587)
INCOME (LOSS) BEFORE TRANSFERS 44,392 (40,905) 3,487
TRANSFERS FROM (TO) OTHER FUNDS 47,969 (47,969)
TRANSFERS FROM THE CITY OF DUBUQUE 55,299 55,299
TRANSFERS TO THE CITY OF DUBUQUE (16,001) (16,001)
CHANGE IN NET ASSETS 147,660 (104,875) 42,785
NET ASSETS, BEGINNING 12,452,925 571,006 13,023,931
NET ASSETS, ENDING $ 12,600,585 $ 466,131 $ 13,066,716
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
BOND ORDINANCE REQUIREMENTS
JUNE 30, 2004
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Following is a summary of the bond ordinance requirements of the parking revenue refunding bond issue
dated March 1, 1998.
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1.
A sum equal to one-tenth (Ill 0) of the principal of all bonds maturing on May I next succeeding, plus
a sum equal to one-fifth (1/5) of the interest coming due on the next succeeding interest payment date
on all of the then outstanding bonds, shall be set aside into a restricted sinking account fÌ'om the net
revenue of the Operating Fund until the full amount of such installments is on hand.
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2. A restricted reserve account shall maintain the lesser of 1) the maximum amount of principal and
interest coming due in any fiscal year; or 2) ten percent of the proceeds of the sale of the bonds.
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3. $5,000 shall be set apart and paid into a restricted depreciation account from the balance of the net
off-street parking revenues and net on-street parking revenues remaining after first making the
required payments into the sinking account and the reserve account on the first day of each month of
each year up to a maximum of $250,000.
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4. The City will cause an audit of such books and accounts of the Parking Facilities to be made by a
certified public accountant not in the regular employ of the City showing the receipts and
disbursements for each account of the Parking Facilities. The audit report required shall include, but
not be limited to, the following:
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a. An evaluation of the manner in which the City has complied with the covenants of this resolution,
including particularly the rate covenants included herein;
b. A statement of net revenues and current expenses;
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c.
Analyses of each fund and account created, including deposits, withdrawals, and beginning and
ending balances;
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d. A statement of net assets;
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e. The rates in etIect at the end of the fiscal year, and the number of customers of the Parking
Facilities;
f.
A schedule of insurance policies and fidelity bonds in force at the end of the fiscal year, showing
with respect to each policy and bond the nature of the risks covered, the limits of liability, the
name of the insurer, and the expiration date;
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g. An evaluation of the issuer's system of internal financial controls and the sufficiency of fidelity
bond and insurance coverage in force;
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h. The names and titles of the principal officers of the City; and
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A general statement covering any events or circumstances which might affect the financial status
of the Parking Facilities.
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
SCHEDULE OF INSURANCE COVERAGE
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
At June 30, 2004, the property of the Parking Facilities was insured through a blanket fire and extended
coverage policy with the Cincinnati Insurance Company in the amount of $25,375,320. This policy
expired July 1, 2004. The Parking Facilities were also insured against general, vehicle, and personal
liability through the Iowa Communities Assurance Pool. These policies expired July I, 2004. Also in
force at June 30, 2004, was a self-funded workers' compensation plan and an employers' liability policy
which expired July 1, 2004.
Listed below is a detailed schedule of the policies in effect at June 30, 2004:
FIRE AND EXTENDED COVERAGE
Description
VALUES
Building and
Structure Contents Total
$ 7,500,000 $ 10,711 $ 7,510,711
5,280,000 44,609 5,324,609
7,500,000 7,500,000
5.040.000 5.040.000
Concrete Parking Ramp
601-795 Iowa Street
Concrete Parking Ramp
801-899 Locust Street
Concrete Parking Ramp
501-599 Iowa Street
Concrete Parking Ramp
100 West Fourth Street
122,320 000 $- 55,320- $ 25,375 320
BUSINESS INCOME
on earnings - $297,900
at 601-795 Iowa Street - 80% co-insurance.
on earnings - $221,500
at 801-899 Locust Street - 80% co-insurance.
on earnings - $297,270
at 501-599 Iowa Street - 80% co-insurance.
on earnings - $180,000
at 100 West Fourth Street - 80% co-insurance.
(continued on next page)
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
SCHEDULE OF INSURANCE COVERAGE (continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
SYSTEMS BREAKDOWN COVERAGE - EQUIPMENT
Each Occurrence
$
2,500,000
GENERAL LIABILITY INSURANCE
BODILY INJURY - PROPERTY DAMAGE - PRODUCTS
ICAP
Each Occurrence
$
5,000,000
VEHICLES
ICAP
Each Occurrence
$
5,000,000
EXCESS WORKERS' COMPENSATION & EMPLOYERS' LIABILITY
Each Accident
Each Disease
Limit
Employers' Liability
$ 400,000 Retention
$ 400,000 Retention
Workers' Compensation - Statutory
$ 1,000,000
FIDELITY BOND COVERAGE
Each employee
$
100,000
City Manager, Budget Director, Finance Director, and Assistant Finance Director - $900,000 additional.
The above insurance policies have been renewed through July 1,2005.
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
SCHEDULE OF STATISTICAL DATA
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Number of Customers: (Estimated)
Locust Ramp:
Cash customers
Monthly customers
28,328
156,000
Iowa Ramp:
Cash customers
Monthly customers
42,945
227,000
4th Street Ramp:
Cash customers
Monthly customers
894
85,000
5th Street Ramp:
Cash customers
Monthly customers
N/A
240,000
Rates in EtTect per Month:
Locust Ramp:
Reserved stalls (Bay)
Reserved stalls (Undercover)
Roof stalls (South Side)
Roof stalls (Center)
$
49
44
38
32
Iowa Ramp:
Reserved stalls
Top oframp stalls
44
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4th Street Ramp:
Non-assigned stalls
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5"t Street Ramp:
Non-assigned stalls
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Other:
Residential Street Meters
Lot 1
Lot 2
Lot 10
Lot 12
37.50/qtr
25
25
35
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Notes: The number of 4th street ramp cash customers is the total through September 30, 2003. Cashiers
were removed on October 1, 2003. Nightly gates are now in effect 24 hours daily.
N/A = Not Applicable
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~~»~
EideBailly"
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CPA, & BUSINESS ADVISORS
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REPORT ON BOND ORDINANCE COMPLIANCE
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To the Honorable Mayor and Members of
the City Council:
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We have audited the financial statements of the Parking Facilities of the City of Dubuque, Iowa, as of
June 30, 2004, and for the year then ended, and have issued our report thereon dated September 16, 2004.
These financial statements are the responsibility of the City's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
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We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; Chapter 11 of the Code of Iowa; and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States. Those standards
and provisions 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 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 opinion.
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In the course of our audit, nothing came to our attention that caused us to believe there had been a lack of
compliance with the accounting or reporting requirements of the bond ordinance governing the parking
revenue refunding bond issue dated March I, 1998.
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LLP
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Dubuque, Iowa
September 16, 2004
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PEOPLE. PRINCIPLES. POSSIBILITIES.
www.eideboilly.com
3999 Pe'",ylvo,;a Ave, S,;le 1001 D,b'q,e, Iowa 52002.2639 1 Pho,e 563.556.1790' Fox 563.557.7842 1 EOE
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EideBailly.
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CPA, & BUSINESS ADVISORS
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REPORT ON COMPLIANCE AND OTHER MATTERS AND ON
INTERNAL CONTROL OVER FINANCIAL REPORTING BASED
ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
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To the Honorable Mayor and
Members of the City Council:
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We have audited the financial statements of the Parking Facilities of the City of Dubuque, Iowa, as of and
for the year ended June 30, 2004, and have issued our report thereon dated September 16, 2004. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America; Chapter 11 of the Code of Iowa; and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.
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Compliance and Other Matters
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As part of obtaining reasonable assurance about whether the Parking Facilities' 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 of non-compliance or other matters that are
required to be reported under Government Auditing Standards.
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Comments involving statutory and other legal matters about the Parking Facilities' operations for the year
ended June 30, 2004, are based exclusively on knowledge obtained ¡rom procedures performed during our
audit of the financial statements of the Parking Facilities and are reported in Part II of the accompanying
Schedule of Findings. 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. There were no prior year
statutory comments and recommendations.
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PEOPLE. PRINCIPLES. POSSIBILITIES.
~ ---~--
www.eideboilly.com
3999 Peoo.ylva,;o Ave, S,lte 1001 D,b'q,e, Iowa 52002.2639. Pho,. 563.556.1790 1 Fax 563.557.7B42' EOE
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Internal Control Over Financial Reporting
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In planning and performing our audit, we considered the Parking Facilities' internal control over financial
reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the
financial statements and not to provide an opinion on the internal control over financial reporting.
However, we noted a certain matter involving the internal control over financial reporting and its
operation that we consider to be a reportable condition. Reportable conditions involve matters coming to
our attention relating to significant deficiencies in the design or operation of the internal control over
financial reporting that, in our judgment, could adversely affect the Parking Facilities' ability to record,
process, summarize, and report financial data consistent with the assertions of management in the
financial statements. The reportable condition is described in Part I of the accompanying Schedule of
Findings.
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A material weakness is a reportable condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low level the risk that misstatements caused by
error or fraud in amounts that would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal course of performing their
assigned functions. Our consideration of the internal control over financial reporting would not
necessarily disclose all matters in the internal control that might be reportable conditions and,
accordingly, would not necessarily disclose all reportable conditions that are also considered to be
material weaknesses. However, we believe that the reportable condition described above is not a material
weakness. There were no prior year reportable conditions to be resolved.
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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 and other parties to whom the City of Dubuque may
report. This report is not intended to be and should not be used by anyone other than these specified
parties.
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We would like to acknowledge the many courtesies and assistance extended to us by personnel of the City
of Dubuque 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.
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ß~
LLP
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Dubuque, Iowa
September 16, 2004
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CITY OF DUBUQUE, IOWA
PARKING FACILITIES
SCHEDULE OF FINDINGS
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
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Part I: Findin!!s Related to the Financial Statements:
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REPORTABLE CONDITION
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I-A-04
Segregation of Duties During our review of internal controls, the existing procedures are
evaluated in order to determine that incompatible duties, from a control standpoint, are not
performed by the same employee. Currently, the City has not segregated accounts payable
disbursement functions, general checking account bank reconciliation functions, and journal
entry posting functions.
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Recommendation - We recommend that the City review operating procedures in order to obtain
the maximum internal control possible.
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Response - The general checking account bank reconciliation will be assigned to other Finance
Department personnel who do not perform accounts payable or journal entry posting functions.
Conclusion ~ Response accepted.
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Part II: Other Findin!!s Related to Statutorv Reportin!!:
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II-A-04 Official Depositories ~ A resolution naming official depositories has been approved by the City
Council. The maximum deposit amounts stated in the resolution were not exceeded during the
year ended June 30, 2004.
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II-B-04 Certified Budget - Disbursements during the year ended June 30, 2004, did not exceed the
amounts budgeted.
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II-C-04 Ouestionable Expenditures - No expenditures that fail to meet the requirements of public
purpose as defined in an Attorney General's opinion dated April 25, 1979, were noted.
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II-D-04 Travel Expense - No expenditures of Parking Facilities' money for travel expenses of spouses of
Parking Facilities' officials or employees were noted.
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II-E-04 Business Transactions - No business transactions between the Parking Facilities and its officials
or employees were noted.
II-F-04 Bond Coverage - Surety bond coverage of Parking Facilities' officials and employees is in
accordance with statutory provisions. The amount of coverage should be reviewed annually to
insure that the coverage is adequate for current operations.
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II-G-04 Council Minutes - No transactions were found that we believe should have been approved in the
Council minutes but were not.
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II-H-04 Revenue Bonds - The provisions of the Parking Facilities' Revenue Refunding Bond resolution
have been met for the year ended June 30, 2004.
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11-1-04
Deposits and Investments - No instances of non-compliance with the deposit and investment
provisions of Chapters l2B and l2C of the Code of Iowa and the City's investment policy were
noted.
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CITY OF DUBUQUE, IOWA
Table of Contents
Ta hIe
Pa2e
ST A TISTICAL SECTION (Unaudited)
Government -wide Infonnation
Government-wide Expenses by Function
Government-wide Revenues
Fund Infonnation
General Governmental Expenditures by Function
General Governmental Revenues by Source
General Governmental Tax Revenues by Source
Property Tax Levies and Collections
Taxable and Assessed Actual Value of Property
Property Tax Rates - Direct and Overlapping Governments
Principal Taxpayers
Special Assessment Billings and Collections
Computation of Legal Debt Margin
Ratio of Net General Obligation Bonded Debt to Taxable
Value and Net General Obligation Bonded Debt Per Capita
Ratio of Annual Debt Service Expenditures for General Obligation
Bonded Debt to Total General Governmental Expenditures
Computation of Direct and Overlapping Bonded Debt - General
Obligation Bonds
Revenue Bond Coverage - Parking Bonds
Property Value, Construction Pennits, and Bank Deposits
Demographic Statistics
Schedule of Insurance in Force
Miscellaneous Statistics
COMPLIANCE SECTION
Report on Compliance and Other Matters and on Internal Control over
Financial Reporting Based on an Audit of Financial Statements
Perfonned in Accordance with Government Auditing Standards
Report on Compliance with Requirements Applicable to Each Major
Program and Internal Control Over Compliance in Accordance with
OMB Circular A-I33
Schedule of Expenditures of Federal Awards
Notes to the Schedule of Expenditures of Federal Awards
Schedule of Findings and Questioned Costs
1
2
78
79
3
4
4A
5
6
7
8
9
10
80
81
82
83
84
85
86
87
88
11
89
12
90
13
14
15
16
17
18
91
92
93
94
95-96
97
98-99
1 00-1 01
1 02 -1 04
105
106-108
2
entire Mississippi River. The Center includes 15 aquariums, including five that
measure 30 feet across. A dynamic immersion theater suITounds visitors with the story
of the Mississippi River"s creation, its floods, its history, and its underwater life. An
outdoor wetland features natural and living history with floating laboratories and
classrooms. Stream tables let visitors create their own rivers, and the educational
overnight program will let visitors sleep on a "Boat and Breakfast" on a National
Historic Landmark steamboat.
.
Heritage Trail Riverfront System
Fifteen and one-half miles of an ] 8-mile extension of the Heritage Trail from the north
end of Dubuque through downtown, to the Mines of Spain State Recreation Area have
been built since 1999. The bike/hike trail has both off-road and on-street segments.
The Heritage Trail Riverfront System, with links to riverfront parks and the Port of
Dubuque, is a major recreational amenity and alternative transportation system for the
communi ty.
.
River's Edge Plaza-opened in 2002
Construction was completed on a 5,000 square foot plaza outside the floodwall gate at
the historic Ice Harbor. This plaza selVes as the City's riverfront gateway, as well as a
landing for large steamboats.
. Mississippi Riverwalk-opened in 2003
Construction was completed in 2003 for the one-mile Mississippi Riverwalk
Recreational Trail at the Port of Dubuque. This 15-foot wide promenade includes
benches, historic lighting, shade structures, and cascading stairs to the river.
. Grand Harbor Resort and Waterpark-opened November 2002
A 196-room seven-story hotel, and a 24,000 square foot indoor water park were
opened.
. Grand River Center-opened October 2003
A 1 15,000 square foot education and conference center had a ribbon cutting. The
City's share of State Vision Iowa funds was utilized for the center and related public
improvements.
. Star Brewery Building-$6. 5 renovation
A proposal for a mixed-use complex was received in November 2002 for the
renovation and reuse of the 40,000 square foot historic building. A one year lease
through April 2005 has been signed with the Historic Star Development Corporation
and a long-tenn lease is under negotiation.
. Phase II Riverfront Development
Phase II redevelopment is underway. The City purchased approximately 20 acres for
fonner logging and saw mills operations in 2003, and demolished the structures. The
City also purchased the Adams Company and relocation of this company was
completed in 2004. These acquisitions were made possible through federal grants of
over $2.3 million.
8
spot after climbing from number 14 last year and number 18 in 2001. According to Milken,
Dubuque's listing is due to a high-tech growth rate that is more than 80 percent higher than
the U.S. average. The Institute measured the total dollar amount of technological goods and
services during the five-year period between 1997 and 2002.
Dubuque moved ahead by almost 50 spots from its 200 1 position to its new rank of 40th in
Forbes Magazine's 2003 Best Places edition. According to Forbes, Dubuque's cost of
doing business is also very favorable with a rank of 13 out of 168 cities in the United
States. Dubuque gained 22 spots last year and moved ahead by another 25 this year despite
the addition of 74 new communities into the small city category.
All of this is being done while the City maintains fiscal integrity. Through efficient operations,
revenue diversification, and debt reduction, the City has not increased its share of the average
homeowners property taxes in ten years.
These are a few of the many activities being addressed by the community, City Council, and City
staff to improve the quality of life in Dubuque.
FIN AN CIAL INFO RMA TI 0 N
Internal Control. 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 confonnity 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 detennine the adequacy of
internal controls, including that portion related to federal programs, as well as to dete11l1ine 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, 2004, 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
appropriated budget. The level of budgetary control (that is the level at which expenditures
cannot legally exceed the appropriated amount) is established by function. The government also
maintains an encumbrance accounting system as one technique for accomplishing budgetary
1 ]
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, repurchase agreements, U.S. Treasury securities, federal agency
obligations, and authorized mutual funds. The City received cash basis investment earnings of
$1,332,515 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. A11 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 poo1.
Werker's compensation coverage up to $400,000 for each accident is provided through se]f-
insurance. The accumulated reserve provision for such claims equaled $290,725 as of June 30,
2004. The City has also established a self-insurance plan for medical, dental, prescription drug,
and short-tenD disability. The accumulated reserve provision for such claims equaled $683,553
as of June 30, 2004. All self-insured health plans are certified as actuarially sound and
certificates of compliance have been filed with the State of Iowa.
0 THE R INFO RMA TI ON
Independent Audit. State Code requires an annua1 audit by independent certified public
accountants or the State Auditor. The accounting firm of Eide Bailly LLP conducted the audit for
fiscal year 2004. In addition to meeting the requirements set forth in state statutes, the audit also
was designed to meet the requirements of OMB Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations. The independent auditor's report on the basic
financial statements and combining fund statements is included in the Financial Section of this
report The auditor's report related specifically to the single audit is included in the Compliance
Section.
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 Annua1 Financial Report for the fiscal year ended June
30, 2003. This was the 16th consecutive year that the government has achieved this prestigious
award. In order to be awarded a Certificate of Achievement, a government unit must publish an
12
CITY OF DUBUQUE ORGANIZATIONAL CHART
Corporation Counsel
Library
Assistant City Manager
Cable TV
Personnel Manager
Budget Director
Cin CouNcIL
City Clerk
CITY MANAGER
Airport
Public Information Officer
Neighborhood Development
Emergency Communications
Building Economic Finance Fire
Services Development Department Department
Department Department
Emergency
Parking System Management
Transit Division
1 1 1
Health Housing & Human Information
Services Community Rights Services
Department Development Department Department
Department
Leisure Services Operations & Planning Police Public Works! Water Water Pollution
Department Maintenance Services Department Engineering Department Control
Department Department Department Department
Civic Center
Park
Recreation
CITY OF DUBUQUE, IOWA
OFFICIALS
JUNE 30, 2004
CITY COUNCIL
T eITance M. Duggan
Daniel E. Nicholson
Ann E. Michalski
John H. Markham
Roy D. Buo}
Joyce E. Connors
Patricia A. CHile
co UN CIL APPOINTED 0 FFI CIALS
Michael C. Van Milligen
Barry A. Lindahl
William G. Blum
James A. O'Brien
Jeanne F. Schneider
DEPARTMENT MANA GERS
Andrew D. Perry
Cynthia M. Steinhauser
Dawn L. Lang
Richard R. Russell
William J. Baum
Kenneth J. TeKippe
E. Daniel Brown
Mary Rose Conigan
David W. Hams, Jr.
Kelly R. Larson
Chrjstine A. KohlmaIU1
GiJ D. Spence
Susan A. Henricks
Donald J. Vogt
Randa}] K. Peck
Laura B. Carstens
Kim B. Wadding
Gus N. Psihoyos
Robert M. Green
Paul J. HorsfalJ
Mayor
Council Member - At Large
Council Member - At Large
Council Member - 1 SI Ward
Council Member - 2nd Ward
Council Member- 3rd Ward
Council Member - 4th Ward
City Manager
Corpora ti on Counsel
City Solicitor
Assistant City Attorney
City CI erk
Airport Manager
Assistant City Manager
Budget Director
Building Services Manager
Economic DeveJopment Director
Finance Director
Fire Chief
Health Services Manager
Housing and Community Development Manager
Human Rights Director
Infonnation Services Manager
Leisure Services Manager
Library Director
OperaÜons & Maintenance Manager
Personnel Manager
Planning Services Manager
Police Chief
Public Warks Director/Engineering Division (Acting)
Water Department Manager
Water Po)]uÜon Control Plant Manager
15
The management's discussion and analysis and budgetary comparison infonnation, listed in the table of
contents, are not required parts of the basic financial statements but are supplementary infonnation
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 infonnation. However, we did not audit
the infonnation and express no opinion on it
OUf audit was conducted for the purpose of fanning 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 tables are presented for purposes of
additional analysis and are not required parts 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 Governments, and Non-
Profit Organizations, and is also not a required part of the basic financial statements of the City of
Dubuque, Iowa. The combining nonmaj or 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 section and statistical tables 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.
z~
B~ LLf'
Dubuque, Iowa
November 10,2004
18
CITY OF DUBUQUE
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2004
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,
2004. 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 $378,475,682 (net assets). This was an increase of$18,966,505 over net
assets at June 30, 2003. Unrestricted net assets at June 30,2004 in the amount of
$21,825,600 may be used to meet the City's ongoing obligations to citizens and
credi tors.
The revenues of the general fund exceeded expenditures by $1,442,381.
The ending general fund balance was $16,918,398.
Within the City's business-type activities, expenses exceeded revenues and
transfers by $2,21 0,607.
For the year, the revenues of the City's governmental activities exceeded
expenses and transfers by $21,1 77,112.
The City's debt decreased by $286,061 due to principal repayments exceeding the
issuance of new debt.
.
.
.
.
.
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 gov.emment-wide financial
statements. -
The statement of net assets presents information on all of the City's assets and 1iabilities,
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
19
consider additional noD-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. AI] 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
Metropo]itan Area Solid Waste Agency, for which the City of Dubuque is considered
financially accountable. Financial information for the Agency is reported separate1y from
the financial infonnation 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, Jibrary, 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, stormwater, 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-tenn financial
requi rem en ts.
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
20
Other information. The combining statements referred to earlier in connection with non-
major governmental funds, non-major enterprise funds, and internal service funds are
presented immediately following the required supplementary information.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net assets. As noted ear1ier, 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 $378,475,682 at the close of the most recent fiscal year.
The largest part of the City's net assets (85.6%) reflects it's 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.
CITY OF DUBUQUE'S NET ASSETS
Governmental Activities Business-type Activities Total
2004 2003 2004 2003 2004 2003
Current and Other Assets $ 69,886,595 $ 69,832,586 $ 13,707,120 $ ) 2,398,0 14 83,593,715 $ 82,230,600
Capital Assets 250,817,878 230,5 11 ,) 51 99,003,374 104,475,331 349,821,252 334,986,482
Total Assets 320,704,473 300,343,737 ] 12,710,494 ) 16,873,345 433,4 ]4,967 41 7,217,082
Long-tenn Liabilities
Other Liabilities
Total Liabilities
25,838,997
19,747,781
45,586,778
27,096,775
19,644,791
46,741,566
8,249,016
1,103,491
9,352,507
7,194,886
4,109,865
11,304,751
34,088,013
20,851,272
54,939,285
34,291,66 ]
23,754,656
58,046,3] 7
Net Assets:
Invested in Capital Assets,
Net of Related Debt
Restricted
U nrestri cted
Total Net Assets
231,863,231
3] ,931 ,803
11,322,661
$ 275,] 17,695
212,767,403
29,306,) 25
11,528,643
$ 253,602,171
92,30 1,043
554,005
10,502,939
$ ] 03,357,987
98,706,116
553,677
6,308,801
$ ]05,568,594
324,164,274
32,485,808
21,825,600
$ 378,475,682
311,473,519
29,859,802
17,837,444
$ 359,170,765
A portion of the City's net assets (8.60/0) represents resources that are subject to external
restrictions on how they may be used. The remaining ba1ance of net assets (5.80/0) may be
used to meet the City's ongoing obligations to citizens and creditors.
At the close of fiscal years 2004 and 2003, 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. Governmenta] activities increased the net assets of the City by
$21,177,112 or 111.70/0 of the total increase in net assets in 2004 and $1,433,969 or 7.2%
of the total increase in net assets in 2003. Taxes are the largest source of governmental
revenues with property taxes of $18,588,367 in 2004. Other governmental revenues
included gaming of $11 ,631,022, local option sales taxes of $7,105,183, hotel/motel tax
of$1,314,114 and $8,334,877 of charges for services.
22
Increases in net assets before transfers $ 10,220,866 $ 9, I 54,431 $ 8,745,639 $ 10,654,] 88 $ 18,966,505 $ 19,808,619
Transfers 10,956,246 (7,720,462) (10,956,246) 7,720,462
Increase (decrease) in net assets 2 I , 177, 112 1,433,969 (2,210,607) 18,374,650 18,966,505 19,808,619
Net assets - beginning, as restated 253,940,583 252,] 68,202 105,568,594 87,193,944 359,509,177 339,362,146
Net assets - ending $ 275,117,695 $ 253,602,171 $ 103,357,987 $ ] 05,568,594 $ 378,475,682 $ 359,170,765
Business-type activities. Business type activities decreased net assets by $2,2 10,607
primarily due to the transfer of completed America's River Project assets to governmental
activities while the City's net assets increased by $18,966,505 at June 30, 2004.
FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS
Governmentalfunds. 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,
umeserved fund balance may serve as a useful measure of a government's net resources
availab1e for spending at the end of the fiscal year.
The City's governmental funds reported a combined fund balance of $48,226,597 at June
30, 2004. 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 genera] fund's fund balance reserve goal is ] 00/0 of budgeted annual expenditures.
OUf balance is slightly higher than the goal at year-end.
The unreserved fund balance of special revenue employee benefits fund increased by
$17,009 to $119,539. The unreserved fund balance of special revenue community
development decreased by $147,083 to $2,325,431.
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, 2004 totaled $103,357,987 of
which] 0.2% ($10,502,939) is unrestricted. The net assets of the internal service funds
are $1,039,214, a $333,062 increase from the 2003 total net assets. The unrestricted net
assets of the internal service funds are $983,861 (94.7%).
The sewer disposal works had an increase in net assets of $1,081,697 for total net assets
of $37,245,968 at June 30, 2004. The water utility had an increase in net assets of
$669,027 for total net assets of $24,181,707. The stormwater utility that originated in
fiscal year ended June 30, 2004 had total net assets of $ 18,336,380. The parking facilities
had an increase in net assets of$42,785 for total net assets of$13,066,716. The
America's River Project had a decrease in net assets of $22,462,664 for total net assets of
24
improvements, water, sewer and stromwater projects, and new runway maintenance
vehicle at the airport.
Long-term debt. At year end the City had $31,482,144 of debt outstanding. This is a
decrease of $286,061 from June 30, 2003. New debt issued during the current year
included $2,110,000 for stormwater projects and $795,000 for three new TIF projects.
The City's bond rating improved to Aa2 for the issue.
The City continues to operate well under the State debt capacity limitations. The State
limits the amount of genera] obligation debt outstanding to 50/0 of the assessed value of
all taxab]e property in the community. Thus our debt capacity is $117,516,000. With
outstanding general ob]igation debt of $30, 185,000 we are utilizing 25.70/0 of this limit.
Additional information on the City's long-term debt can be found in note 6 of this report.
ECONOMIC FACTORS
The slowing of the national economy had a relatively mi]d impact on the City of
Dubuque and has been less severe than for many local governments. The City's
unemployment rate ended the fiscal year at 3.5%, s]ightly less than the 3.70/0 rate for the
prior year, and is we]] under the State of Iowa rate of 4.30/0 and the 5.60/0 national rate.
The City continues to enjoy growth in assessed valuation of taxable property net of
exemptions (2.00/0 for total of $1 ,563,081 ,000). The minimum refuse rate increased $0.40
to $7.60. Sewer rates increased 30/0 and water rates increased 50/0. A stormwater fee was
initiated in fiscal year 2004, total revenue co]lected of $580,000. The City did not receive
most of the shared revenue and property tax replacement funds provided to local
governments from the State of Iowa in 2003 fiscal year.
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.
26
EXHffiIT 1
Primary Government
Governmental Business-type
Activities Activities
Total
Co m ponen t
Unit
Dubuq ue
Metropo litan
Area So lid
Waste Agency
LIABILITIES
CURRENT LIAB ILIT IE S
Accounts payable $ 2,075,043 $ 938,037 $ 3,013,080 $ 349,529
Accrued payroll 505,536 129,719 635,255 15,319
Notes payable 85,455 85,455
General obligation bonds payable 1 ,3 15,000 320,000 1,635,000
Revenue bonds payable 200,000 200,000
Tax increment financing bonds payable 369,501 369,501
Accrued compensated absences 2,313,603 292,266 2,605,869 43,577
Accrued interest payable 76,928 35,735 112,663
Intergovernmental payable 202,500 202,500 81,693
Deferred revenue
Succeeding year property tax 16,379,091 16,379,091
Other 508,683 508,683
Total Current Liabilities 23,831,340 1,915,757 25,747,097 490,118
NONCURRENT LIABILITIES
Notes payable 609,545 609,545
General obligation bonds payable 17,695,000 6,302,750 23,997,750
Revenue bonds payable 1,134,000 1,134,000
Landfill closure and postclosure care 1,978,164
Tax increment financing bonds payable 3,450,893 3,450,893
Total NoncuITent Liabilities 21,755,438 7,436,750 29,192,188 1,978,164
Total Liabilities 45,586,778 9,352,507 54,939,285 2,468,282
NET ASSETS
Invested in capital assets, net of related debt 231,863,231 92,301,043 324,164,274 4,385,138
Restricted for/by
Bond ordinance 150,526 554,005 704,531
Dog track 1,175,907 1,175,907
Employee benefits 128,299 128,299
Community development 13,436,820 13,436,820
Streets 6,235,019 6,235,019
Capital projects 9,861,763 9,861,763
Franchise agreement 665,478 665,478
Endowments
Ex pendab 1 e 71,743 71,743
Nonexpendable 22,391 22,391
Other 183,857 183,857
State statute 365,041
Minority interest 1,534,921
Unrestricted 11,322,661 10,502,939 21,825,600 5,226,846
Total Net Assets $ 275,117,695 $ 103,357,987 $ 378,475,682 $ 11,511,946"
27
---'~""'-'" ---,,',....., ,"--,-,--,,~.,-,'-->--",-- ""--.-
EXHmIT 2
Net (Expense) Revenue and
Changes in Net Assets
Primary Government
Governmental
Activities
Business-type
Activities
$ (14,204,780) $
(356,080)
(390,712)
(5,232,804)
(5,872,292)
(3,286,202)
(1,248,498)
(30,591,368)
281,571
92,160
(368,634)
(11,939)
9,312,260
(70,275)
(671,203 )
8,563,940
8,563,940
(30,591,368)
Total
Component Unit
Dubuque
Metropo litan
Area Solid
Waste Agency
- $ (14,204,780) $
(356,080)
(390,712)
(5,232,804)
(5,872,292)
(3,286,202)
(1,248,498)
(30,591,368)
281,571
92,160
(368,634 )
(11,939)
9,312,260
(70,275)
(671,203)
8,563,940
(22,027,428)
(74,573)
18,588,367 18,588,367
7,105,183 7,105,183
1,314,114 1,314,114
862,275 862,275
11,631,022 11,631,022
497,361 181,674 679,035 136,384
175,231 25 175,256
638,681 638,681
10,956,246 (10,956,246)
51,768,480 (10,774,547) 40,993,933 136,384
21 ,1 77 ,112 (2,210,607) 18,966,505 61,811
253,940,583 105,568,594 359,509,177 11,450,135
$ 275,117,695 $ 103,357,987 $ 378,475,682 $ 11,511,946
..'m.__.""',""-',--"-",-~,>"-",,-,-,,,,-,,, ,""..-....'
28
CITY OF DUBUQUE, IOWA
BALANCE SHEET
GO VERNMEN-T AL FUNDS
JUNE 30, 2004
EXHffiIT 3
Special Revenue Other
Employee Community Governmental
General Benefits Development Funds Total
ASSETS
Cash and pooled cash investments $ 14,709,351 $ 89,675 $ 1,733,695 $ 18,328,228 $ 34,860,949
Receivables
Property tax
Delinquent 192,293 34,5] 7 7,838 234,648
Succeeding year 13,778,750 2,037,040 563,301 16,379,091
Accounts and other 1,478,416 6,239 1,484,655
Special assessments 515,534 515,534
Accrued interest 109,411 58,296 47,342 215,049
Notes 11,020,159 7,049 11,027,208
Intergovernmental 934,470 219,463 1,062,324 2,216,257
Due from other funds 728,160 728,160
Inventories 100,789 100,789
Advances to other funds 4]4,]46 414,146
Prepaid items 5,475 18,066 23,541
Restricted cash and pooled cash investments 263,890 263,890
Total Assets $ 32,451,261 $ 2,161,232 $ 13,049,679 $ 20,801,745 $ 68,463,917
LIABILITIES AND FUND BALANCES
LIAR ILIT IES
Accounts payable $ 818,042 $ - $ 39,836 $ 186,812 $ 1,044,690
Accrued payroll 408,163 15,597 47,517 471,277
Intergovernmental payable 202,500 202,500
Due to other funds 625,795 625,795
Deferred revenue
Succeeding year property tax 13,778,750 2,037,040 563,301 16,379,09]
Other 527,908 4,653 981,406 1,513,967
Total Liabilities 15,532,863 2,041,693 55,433 2,607,331 20,237,320
FUND BALANCES
Reserved for/by
Ene umb rane e s 2,819,]89 367,868 2,188,776 5,375,833
Long-tenn notes receivable 10,300,947 5 ,649 10,306,596
Advances 414,146 414,146
Bond ordinance 150,526 150,526
Dog track 1,175,906 1,175,906
Franchise agreement 19,327 19,327
Endowments 22,391 22,391
Unreserved
Designated for
Future equipment and capital maintenance 4,236,082 4,236,082
Future cash flow 2,796,000 2,796,000
Unreserved, undesignated, reported in
General fund 6,652,981 6,652,981
Special revenue funds 119,539 2,325,431 7,275,442 9,720,412
Debt service fund (68,569) (68,569)
Capital projects funds 7,353,593 7,353,593
Pennanent funds 7] ,373 71 ,373
Total Fund Balances 16,918,398 119,539 12,994,246 18 , 1 94,4 14 48,226,597
Total Liabilities and Fund Balances $ 32,451,26] $ 2,]61,232 $ 13,049,679 $ 20,801,745 $ 68,463,917
See notes to financial statements. 29
CITY OF DUBUQUE, IOWA
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT
OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2004
EXHmIT 4-1
Net change in fund balances - total governmental funds
(1,232,314)
Amounts reported for governmental activities in the statement of activities are
different because:
Capital outlays are reported as expenditures in governmental funds. However, in the
statement of activities, the cost of capital assets is allocated over their estimated useful lives
as depreciation expense. In the current period, these amounts are:
Capital assets expended in governmental funds
Transfers of capital assets from enterprise funds
Transfers of capital assets to enterprise funds
Depreciation expense
$
7,939,662
34,410,309
(17,051,794 )
(4,893,272)
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.
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 by these amounts this
year:
Property tax
Special assessments
Other
8,666
56,349
381,478
Bond proceeds provide CUITent financial resources to governmental funds, but
issuing debt increases long-tenn liabilities in the statement of net assets.
Repayment of bond principal is an expenditure in the governmental funds,
but it reduces long-tenn liabilities in the statement of net assets and does not
affect the statement of activities. The bond proceeds ($2,117,775) exceeded
the bond repayments ($795,000) by $1,322,775.
Some items reported in the statement of activities do not require the use of
current financial resources and therefore are not reported as expenditures
in governmental funds. These items consist of:
Decrease in accrued interest
Increase in compensated absences
Total additional expenses
56,302
( 64,997)
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.
Change in net assets of governmental activities
See notes to financial statements.
$
20,404,905
(89,113)
446,493
1,322,775
(8,695)
333,061
$
21,177,112
32
CITY OF DUBUQUE, IOWA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2004
Business-type Activities -
Sewage
Disposal
Warks
Water
Utility
Storm water
Utility
Parking
Facilities
ASSETS
CURRENT AS SET S
Cash and pooled cash investments $ 4,630,072 $ 2,491,280 $ 2,657,181 $ 643,295
Receivables
Accounts 662,234 537,304 76,367 41,008
Accrued interest 25,170 14,234 9,300 6,855
ill t er go v emm en tal
illventories 380,985
Prepaid i terns 5,037
Total CuITent Assets 5,322,513 3,423,803 2,742,848 691,158
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
554,005
175,671 76,697 577,033 1,296,209
31,603,036 7,209,392 19,069,788
26,595,870 520,295 22,407,699 246,961
6,316,568 31,809,520 651,206
177,008 47,779 1,395,109
(32,696,235) (16,026,952) (6,685,596) (5,583,595)
32,171,918 23,636,731 17,694,245 15,680,569
32,171,918 23,636,731 17,694,245 16,234,574
Total Assets
37,494,431
27,060,534
20,437,093
16,925,732
EXHmIT 5
Enterprise Funds
America's Other
River Enterprise
Project Funds
Total
Governmental
Acti vities-
Internal
Service Funds
$
1,000 $
563,725 $
10,986,553 $
1,863,746
32,141 275,862 1,624,916 136,274
55,559 10,043
35,750 566,821 602,571
14,005 394,990 38,409
5,037
68,891 1,420,413 13,669,626 2,048,472
554,005
36,000 2,161,610
1,893,590 59,775,806
49,770,825
5,294,077 44,071,371 125,239
5,724,750 7,344,646
(3,128,506) (64,120,884) (69,886)
5,724,750 4,095,161 99,003,374 55,353
5,724,750 4,095,161 99,557,379 55,353
5,793,641
5,515,574
113,227,005
2,103,825
( continued)
33
.. --'---'.-._~--~._-"-~'
EXHffiIT 5
( continued)
Enterprise Funds
America's
Ri v er
Project
Other
En terpri se
Funds
Total
Go vemmen tal
Activities-
Internal
Service Funds
$ 488,149 $ 54,747 $ 938,037 $ 1,030,352
55,151 129,719 34,259
320,000
200,000
81,587 292,266
35,735
102,365 102,365
414, 146
488,149 293,850 2,432,268 1,064,611
6,302,750
1,134,000
7,436,750
488,149
293,850
9,869,018
1,064,611
5,724,750 4,095,161 92,301,043
554,005
(419,258) 1,126,563 10,502,939
$ 5,305,492 $ 5,221,724 $ 103,357,987 $
55,353
983,861
1,039,214
34
CITY OF DUBUQUE, IOWA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
PROPRIET ARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
Business-type Activities -
OPERATING EXPENSES
Employee expense 1,728,885 1,618,454 122,928 675,465
Utilities 425,024 386,880 79,718
Repairs and maintenance 251,888 106,435 36,454
Supplies and services 1,700,035 1,234,047 706,406 147,413
Insurance 85,234 72,242 32,048
Depreciation 1,087,054 840,324 297,876 462,318
T atal Operating Expenses 5,278,120 4,258,382 1,127,210 1,433,416
32,919
63,580 52,584 45,712 15,426
113,049
(3,896) (110,356) (57,758) (222,013)
25
172,758 (57,772) 20,873 (206,587)
Sewage
Disposal
Works
OPERA rING REVENUES
Charges for sales and services
Other
T atal Operating Revenues
$
4,715,405 $
4,086
4,719,491
OPERATING INCOME (LOSS)
(558,629)
NONOPERA TING REVENUES (EXPENSES)
Intergovernmental
Investment earnings
Contributions
Interest expense
Gain (loss) on disposal of assets
Total Nonoperating Revenues (Expenses)
INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS
AND TRANSFERS
(385,871)
CAPIr AL CONTRIBUTIONS
TRANSFERS IN
T RAN S FERS 0 vr
1,092,093
375,475
CHANGE IN NET ASSETS
1,081,697
NET ASSETS, BEGINNING
36,164,271
Water
Utility
S tormwater
Utility
Parking
Facilities
4,271,169 $
36,069
4,307,238
667,585 $
86,516
754,101
1,639,615
3,875
1,643,490
48,856
(373,109)
210,074
(8,916)
(352,236)
3,487
323,644
354,299
16,550,078
2,160,987
(22,449)
55,299
(16,001)
669,027
18,336,380
42,785
23,512,680
13,023,931
NET ASSETS, ENDING
$ 37,245,968 $ 24,181,707 $ 18,336,380 $ 13,066,716
See notes to financial statements.
CITY OF DUBUQUE, IOWA
S T A TEMENT OF CASH FLOWS
PROPRIET ARY FUNDS
FO R THE YEAR END ED JUNE 30, 2004
Business-type Activities -
Sewage
Disposal
Works
Water
Utility
Stonnwater
Utility
Parking
Facilities
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 4,678,810 $ 4,173,814 $ 591 ,218 $ 1,606,997
Cash payments to suppliers for goods and services (2,427,152) (2,041,401) (622,588) (365,722)
Cash payments to employees for services (1,712,919) (1,609,294) (122,928) (671,622)
Other operating receipts 4,086 36,069 86,516 3,875
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES
CASH FLOWS FROM NONCAPIT AL FINANCING
ACT IVII IE S
Transfers from other funds
Transfers to other funds
Proceeds from interfund balances
Payment of interfund balances
Property tax receipts
In tergo vemmental grant proceeds
NET CASH PROVIDED (USED) BY NONCAPIT AL
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
Co ntri buti ons
Intergovernmental grant proceeds
NET CASH PROVIDED (USED) BY CAPITAL AND
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
NET INCREASE (DECREASE) IN CASH AND CASH
EQ UIV ALENTS
CASH AND CASH EQUIVALENTS, BEGINNING
CASH AND CASH EQUIVALENTS, ENDING
- ,'-"- --"....--
542,825
559,188
(67,782)
2,174,225
(22,449)
(34,875)
(34,875)
2,151,776
573,528
55,299
(16,001 )
39,298
25
(318,158) (1,272,290) (1,442,043) (118,929)
2,110,000
(453,188) (219,923) (119,216) (280,959)
(28,547) (110,815) (51,111) (223,865)
113,049
120,159 35,326
(566,660)
(1,603,028)
532,956
63,407
51,588
40,231
39,572
(1,027,127)
2,657,181
4,590,500 3,518,407
$ 4,630,072 $ 2,491,280 $ 2,657,181
(623,753)
15,625
4,698
1,192,602
$ 1,197,300
EXHffiIT 7
Enterprise Funds
America's
River
Project
Other
Enterprise
Funds
Total
Governmental
Activities-
Internal
Service Funds
$ - $ 2,362,769 $ 13,413,608 $ 7,320,470
(1,064,701) (1,716,616) (8,238,180) (5,903,808)
(2,192,585) (6,309,348) (1,638,554)
881,089 34,159 1,045,794 387,957
(183,612)
(1,512,273)
(88,126)
166,065
3,360,894 863,539 6,453,957
(38,450) (3,900)
102,365 102,365
(34,875)
4,124 4,124
716,910 716,910
3,360,894
( 12,650,955)
9,458,744
(3,192,211)
4,265
(10,664 )
1,686,938
(810,690)
(810,613)
(635,841)
7,204,031
77
25
(16,613,065)
2,110,000
(1,073,286)
( 414,338)
113,126
9,614,229
(3,900)
28,610
190,775
$
11,664 1,199,566 10,512,739 1,672,971
1,000 $ 563,725 $ 11,540,558 $ 1,863,746
( continued)
"""",~""",",~.""-"""'~"'~"'-"'-"""""'" ""
(6,263,309)
107
175,223
1,027,819
36
CITY OF DUBUQUE, IOWA
STATEMENT OF CASH FLOWS
PROPRIET ARY FUNDS
FO R THE YEAR END ED JUNE 30, 2004
RECONCILIATION OF OPERA TINa INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES
Operating income (loss)
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 and prepaid items
Increase (decrease) in accounts payable
Increase in accrued liabilities
Total Adjustments
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES
NONCASH CAPITAL AND RELATED FINANCING
ACTIVITIES
Contributions of capital assets from other funds and
outside sources
Contributions of capital assets to other funds
See notes to financial statements.
Business-type Activities -
Sewage
Disposal
Works
Water
Utility
Stormwater
Utility
$
(558,629) $
48,856 $
(373,109) $
1,087,054
840,324
297,876
Parking
Facilities
210,074
462,318
(36,595) (97,355) (76,367) (32,618)
(50,913)
35,029 (190,884) 83,818 (70,089)
15,966 9, 1 60 3,843
1,101,454 510,332 305,327 363,454
$
542,825 $
559,188 $
(67,782) $
$ 1,467,568 $
677,943 $ 16,550,078 $
$
- $
- $
573,528
- $
EXHmIT 7
( continued)
Enterprise Funds
America's
River
Project
Other
Enterprise
Funds
Total
Governmental
Acti vities-
Internal
Service Funds
$
(183,612) $ (2,004,816) $ (2,861,236) $
$
533,160
(79,573)
(5,134)
12,165
31,925
492,543
3,220,732
(322,508)
(56,047)
(129,961 )
60,894
2,773,110
(183,612) $ (1,512,273) $
$
1,378 $
$ 35,140,083 $
(88,126) $
- $ 18,696,967 $
- $ 35,140,083 $
306,365
9,067
(136,274)
( 11 , 164 )
(11,825)
9,896
( 140,300)
166,065
37
CITY OF DUBUQUE, IOWA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
Depreciation expense was charged to functions/programs for the primary government as follows:
Governmental activities:
Public safety
Public works
Health and social services
Culture and recreation
Community and economic development
General government
Total depreciation expense - governmental activities
$
485,504
3,141,713
5,607
1,105,948
24,781
138~786
$ 4,902,339
Business-type activities:
Sewage disposal works
Water utility
Stormwater utility
Parking facilities
Refuse collection
Transit system
Total depreciation expense - business-type activities
$ 1,087,054
840,324
297,876
462,318
188,473
344~687
$ 3,220,732
Component Unit:
Beginning Ending
Balance Increases Decreases Balance
Dubuque Metropolitan Area Solid
Waste Agency:
Capital assets, not being depreciated:
Land $ 552,528 $ - $ - $ 552,528
Construction in progress 1~O71 ~772 1 ~O71 ~ 772
Total capital assets, not being depreciated 552~528 1 ~O71 ~772 1 ~624~300
Capital assets, being depreciated:
Buildings 44,349 44,349
Improvements other than buildings 5,893,766 5,893,766
Machinery and equipment 1 ~827 ,636 558~149 (351,634} 2~O34~ 151
Total capital assets, being depreciated 7~765~751 558,149 (351~634) 7 ,972~266
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Machinery and equipment
Total accumulated depreciation
(44,349) (44,349)
(3,560,322) (282,549) (3,842,871)
_(1 ~414~314} (186,442) 276,548 _(1 ~324~208}
_(5~O18~985) (468~991ì 276~548 _(5~211 ~428)
.
Total capital assets, being depreciated, net 2~ 746~ 766 89~158 (75~O86) 2~760~838
Dubuque Metropolitan Area Solid
Waste Agency capital assets, net
$ 3,299,294 $ U60,930 $
(75,086) $ 4,385,138
Depreciation expense of $468,991 was charged to the Dubuque Metropolitan Area Solid Waste Agency.
(continued on next page)
51
---"-"'..----.'. "-'...-"
CITY OF DUBUQUE, IOWA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
NOTE 6-LONG-TERMDEBT
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 $27,480,000. During the year, general obligation bonds totaling $2,110,000 were issued
to fund stonnwater utilities facilities and improvements.
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, 2004, are as follows:
Purpose
Corporate purpose
Corporate purpose
Corporate purpose
Corporate purpose
Corporate purpose
Corporate purpose
Corporate purpose
and refunding
Corporate purpose
Date of
Issue
07/01/95
06/01/00
11/01/00
12/27/01
01/09/02
03/26/02
12/03/02
10/15/03
Maturity Dates
05/01/96-05/01/05
06/01/02-06/01/20
06/01/02-06/01/20
06/01/05-06/01/21
06/01/04-06/01/21
06/01/03-06/01/21
06/01/03-06/01/17
06/01/04-06/01/23
Interest
Rates
4.90% $
5.80-5.88
5.13-5.25
4.00-4.90
4.00-4.95
3.75-5.00
3.00-4.30
3.20-4.75
Amount
Originall y
Issued
2,000,000 $
2,750,000
6,265,000
9,500,000
2,860,000
1,000,000
3,105,000
2,110,000
$
29,590,000 $
Annual debt service requirements to maturity for general obligation bonds are as follows:
Fiscal Year Ending
June 30
Amount
Outstanding
End of Year
250,000
2,470,000
5,620,000
9,500,000
2,695,000
945,000
2,185,000
2.005,000
25,670,000
Governmental Activities Business-type Acti vi ti es
Princi pal Interest Principal Interest
$ 1,315,000 $ 890,361 $ 320,000 $ 303,719
590,000 832,911 330,000 291,159
830,000 806,598 345,000 278,159
875,000 770,530 355,000 264,429
945,000 732,436 365,000 249,874
5,360,000 2,986,895 2,050,000 1,001,384
6,525,000 1,625,431 2,115,000 492,484
2,570,000 179,693 780.000 79,727
$ 19,010,000 $ 8,824,855 $ 6,660,000 $ 2,960,935
2005
2006
2007
2008
2009
2010-2014
2015-2019
2020-2023
(continued on next page)
Total
52
CITY OF DUBUQUE, IOWA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
Changes in Long-term Liabilities. Long-tenn liability activity for the year ended June 30, 2004, was as
follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities:
General obligation bonds $ 19,865,000 $ $ (855,000) $ 19,010,000 $ 1,315,000
Tax increment financing
bonds 4,021,002 140,000 (340,608) 3,820,394 369,501
Notes payable 962,167 655,000 (922,167) 695,000 85,455
Compensated absences 2~248~606 2~313~603 ---12~248~606) 2~313~603 2~313~603
$ 27,096,775 $ 3,108,603 ~,366,38l) $ 25,838,997 $ 4,083,559
Business-type activities:
General obligation bonds $ 5,140,000 $ 2,110,000 $ (590,000) $ 6,660,000 $ 320,000
Less: Unamortized
discounts (24~486) (14~770) 2 ~ 006 (37~250)
Total general
obligation bonds 5 ~ 115 ~514 2~O95~230 (587~994) 6~622~750 320~OOO
Revenue bonds 1,540,000 (190,000) 1,350,000 200,000
Less: Deferred amounts
on refunding (18~6661 2~666 (16~OOO)
Total revenue bonds 1 ~521 ~334 (187~334) 1 ~334~OOO 200~OOO
Notes payable 283,188 (283,188)
Compensated absences 274~850 292~266 (274~850) 292~266 292~266
$ 7,194,886 $ 2,387,496 $ 0,333,366) $ 8,249,0 ~ $ 812,266
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 caITÍes 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 $80,000, and an aggregate stop loss of
approximately $6,380,000 for 2004. Coverage from a private insurance company is maintained for losses
in excess of the stop loss amount. All claims handling procedures are perfonned 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)
55
CITY OF DUBUQUE, IOWA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
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 $400,000, and an aggregate stop loss consistent with
statutory limits for 2004. Coverage from a private insurance company is maintained for losses in excess
of the stop loss amount. All claims handling procedures are perfonned 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 last three
fiscal years. The estimated liability does not include any allocated or unallocated claims adjustment
expense.
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 cuITent-year claims. The claims liability of $708,254 in the Health Insurance Reserve
Fund and $308,320 in the Workers' Compensation Reserve Fund is based on the requirements of
Governmental Accounting Standards Board Statement No.1 0, which requires that a liability for claims be
reported if infonnation 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, 2003 and 2004, are summarized as
follows:
Heal th
Insurance
Reserve Fund
Workers'
Compensati on
Reserve Fund
Liabilities at June 30, 2002
Claims and changes in estimates during fiscal year 2003
Claim payments
$
608,502 $ 325,751
4,336,860 297,067
(4,187,418) (341 ,690)
757,944 281,128
4,587,080 301,154
( 4,636,770) (273,962}
708 ,254 $ 308,320
Liabilities at June 30, 2003
Claims and changes in estimates during fiscal year 2004
Claim payments
Liabilities at June 30,2004
$
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
490 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. There have been no reductions in insurance coverage from prior
years.
(continued on next page)
56
CITY OF DUBUQUE, IOWA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
Each member's annual casualty contributions to the Pool fund CUITent 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
CUITent 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 equal 300 percent of the total current members' basis
rates or to comply with the requirements of any applicable regulatory authority having jurisdiction over
the Pool.
The Pool also provides property coverage. Members who elect such coverage make annual operating
contributions which are necessary to fund, on a cash basis, the Pool's general and administrative expenses
and reinsurance premiums, all of which are due and payable in the current year, plus all or any portion of
any deficiency in capital. Any year-end operating surplus is transferred to capital. Deficiencies in
operations are offset by transfers from capital and, if insufficient, by the subsequent year's member
contributions. The City has property insurance coverage in addition to the Pool.
The City's property and casualty contributions to the risk pool are recorded as expenditures from its
operating funds at the time of payment to the risk pool. The City's annual contributions to the Pool for the
year ended June 30, 2004, were $452,981.
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 $250,000
per claim. Claims exceeding $250,000 are reinsured in an amount not to exceed $1,750,000 per claim and
$5,000,000 in aggregate per year. For members requiring specific coverage from $2,000,000 to
$10,000,000, such excess coverage is also reinsured. All property risks are also 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, 2004, 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 sale responsibility of the
withdrawing member, regardless of whether a claim was incUITed 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.
(continued on next page)
57
CITY OF DUBUQUE, IOWA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
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 tenus 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,
2004.
Litigation
The City's corporation counsel reported that as of June 30, 2004, 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.
Construction Contracts
The City has recognized as a liability only that portion of construction contracts representing construction
completed through June 30, 2004. The City has additional commitments for signed construction contracts
of approximately $4,301,358 as of June 30, 2004. These connnitments will be funded by federal and state
grants, cash reserves, and bond proceeds.
NOTE 9 - POST-EMPLOYMENT 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, 2004, 58 retirees were eligible for these benefits, and the cost of the benefits for the fiscal year
ended June 30, 2004, totaled $110,471.
NOTE 10 - EMPLOYEE RETIREMENT S Y STEM S
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 infonnation. The report may be obtained by writing to Municipal
Fire and Police Retirement System of Iowa, 2836 lO4th Street, Des Moines, Iowa, 50322.
(continued on next page)
58
, ,.,'" ,- , " . ,-",' , -- ""',' .,,-- ",-., ,,- --,','" ", ,,"'.. ',,-, ",,',
CITY OF DUBUQUE, IOWA
NOTES TO FINANCIAL S T A TEMENTS
JUNE 30, 2004
Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for
Insurance Recoveries issued November 2003, will be effective for the City for the fiscal year ending
June 30, 2006. This statement establishes accounting and financial reporting standards for impairment of
capital assets and also clarifies and establishes accounting requirements for insurance recoveries.
Statement No. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
issued April 2004, will be effective for the City for the fiscal year ending June 30, 2008. This statement
establishes uniform financial reporting standards for other postemployment benefit (OPEB) plans and
supersedes the interim guidance included in Statement No. 26. This statement affects reporting by
administrators or trustees ofOPEB plan assets or by employers or sponsors that include OPEB plan assets
as trust or agency funds in their financial reports.
Statement No. 44, Economic Condition Reporting: The Statistical Section issued May 2004, will be
effective for the City for the fiscal year ending June 30, 2006. This statement amends previous guidance
regarding preparation of the statistical section for governments that issue a comprehensive annual
financial report.
Statement No. 45, Accounting and Financial Reporting by Employers for Pastemployment Benefits Other
Than Pensions issued June 2004, will be effective for the City for the fiscal year ending June 30, 2009.
This statement establishes standards for the measurement, recognition, and display of (OPEB)
expense/expenditures and related liabilities (assets), note disclosures, and, if applicable, required
supplementary infonnation (RSI) in the financial reports of state and local governmental employers.
The City's management has not yet determined the effect these Statements will have on the City's
financial statements.
61
REQUIRED SUPPLEMENTARY INFORMATION
",_,-,"""~"~.,-'",~","',~"",,,,,"--""--" "',
-- ", ",,',~ "".. ,,"- "..., ,~"",
CITY OF DUBUQUE, IOWA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION -
BUDGET ARY REPORTING
FOR THE YEAR END ED JUNE 30, 2004
Community Development Fund
Modified
Bud getary Accrual Accrual
Basis Adjustments Basis
Revenues $ 2,299,005 $ (887,025) $ 1,411,980
Exp endi tures 2~366~993 (200~ 138) 2~ 166~855
Defi ci ency of revenues under expenditures (67,988) (686,887) (754,875)
Other financing sources (uses) 14~306 1 0~694 25~OOO
Net (53,682) (676,193) (729,875)
Fund balance, beginning 1 ~ 777 ~282 11 ~946~839 13.724~ 121
Fund balance, ending $ 1,723,600 $ U ,270,6~ $ 12,994,246
66
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Special revenue funds are used to account for specific revenues that are legally restricted to expenditure
for particular purposes.
Road Use Tax Fund - This fund is used to account for state revenues allocated to the City for
maintenance and improvement of City streets.
Section VIII Housing Fund - This fund is used to account 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.
Police and Fire Retirement Fund - This fund is used to account for the balance of actuarially-
detennined excess pension funds as calculated when local retirement systems were tenninated and
combined into a statewide retirement system. The excess funds may be used to help fund the City's
portion of contributions to the statewide police and fire retirement system.
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-tenn debt
.
servIce.
Tax Increment Financing Fund - This fund is used to account for the receipt of property taxes, for
the payment of proj ects within the tax increment financing district, and for the payment of remaining
principal and interest costs on the tax increment financing districts' long-tenn 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 SERVICE FUND
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.
EXHmIT A-I
Special Revenue
Police
and Fire Special
Retirement Assessments
$
8,760 $
$
8,760 $
$
8,760
8,760
$
8,760 $
_...,._>...",......"-,~....._,..._-".._-....,~..>,.,,..
519,787 $
515,534
9 ,020
1,044,341 $
- $
- $
476,409
476,409
567,932
567,932
1,044,341 $
Tax
Increment
Financin~
731
150,526
151,257 $
3,283 $
552,482
555,765
150,526
(555,034)
( 404,508)
151,257 $
Cable TV
- $
1,154,000 $
6,239
4,707
19,327
1,184,273 $
10,771 $
4,085
503,939
518,795
120,873
19,327
525,278
665,478
1,184,273 $
Library
Expendable
Gifts Trust
161 ,3 84 $
803
162,187 $
218 $
218
161,969
161,969
Debt
Service
3,872
222,330
1,920
228,122
525
73,313
222,330
523
296,691
( 68,569)
( 68,569)
162,187 $ 228,122
(continued)
67
CITY OF DUBUQUE, IOWA
COMBINING BALANCE SHEET
NO NMAJ 0 R GO VE RNME NT AL FUND S
JUNE 30, 2004
Capital Projects
Street
Construction
Dog Track
Depreciation
General
C onstructi 0 n
ASSETS
Cash and pooled cash investments $ 3,835,233 $ 1,169,932 $ 2,754,407
Recei vab les
Property tax
Delinquent
Succeeding year
Accounts and other
Special assessments
Accrued interest 11,883 5,974 1,610
Notes
Intergovernmental 338,613
Restricted cash and pooled cash investments
Total Assets $ 4,185,729 $ 1,175,906 $ 2,756,017
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
Accrued payro 11
Intergo vemmental pa yab Ie
Due to other funds
DefeITed revenue
Succeeding year property tax
Other
T atal Liabilities
$
64,568
$
- $
3,451
64,568
3,451
FUND BALANCES
Reserved for/by
Encumbrances
Long-tenn notes receivable
Bond ordinance
Dog track
Franchise agreement
Endowments
Unreserved, undesignated, reported in
Special revenue funds
Debt service fund
Capital projects funds
Permanent funds
Total Fund Balances
1,594,545
50,319
1,175,906
2,526,616
2,702,247
4,121,161
1,175,906
2,752,566
Total Liabilities and Fund Balances
$
4,185,729 $
1,175,906 $
2,756,017
EXHffiIT A-2
Special Revenue
Po lice
and Fire Special
Retirement Assessments
$
(100,000)
(100,000)
(100,000)
108,760
$
8,760 $
,----- --~---.-----~""-~~---w,--,~-",~' '-".,,--,"- ",,"-<'"-,,-"-"--, .------' "-,
Tax
Increment
F inane in~
Cable TV
- $
- $ 2,495,079 $
717,305
77 , 154
794,459
794,459
62,752
(2,022,639)
(1,959,887)
(1,165,428)
1,733,360
567,932 $
3,948
2,499,027
483,524
2,186,167
2,669,691
(170,664)
155,000
(397,495)
(242,495)
(413,159)
8,651
(404,508) $
16,085
528,345
544,430
61,454
23,213
495,078
579,745
(35,315)
(205,765)
(205,765)
(241,080)
906,558
665,478 $
Library
Expendable
Gifts Trust
- $
3,949
130,284
134,233
41,306
41,306
92,927
92,927
69,042
Debt
Service
- $
278,294
278,294
8,089
1,180,714
1,188,803
(910,509)
758,107
758,107
(152,402)
83,833
161,969 $ (68,569)
( continued)
69
.. -- ---;-~ ,-- .._""--.....~-- ....
CITY OF DUBUQUE, IOWA
COMBINING STATEMENT OF NET ASSETS
NONMAJOR ENTERPRISE FUNDS
JUNE 30, 2004
EXHffiIT B-1
ASSETS
CURRENT ASSETS
Cash and pooled cash investments
Receivables
Accounts
Inter g 0 v emm en tal
Inventories
Total Current Assets
NONCURRENT ASSETS
Capital assets
Land
Buildings
Machinery and equipment
Accumulated depreciation
Net Capital Assets
Total Assets
LIABILITIES
CURRENT L lAB IL ITIE S
Accounts payable
Accrued payroll
Accrued compensated absences
Due to other funds
Total Liabilities
NET ASSETS
Invested in capital assets, net of related debt
U nrestri c ted
Total Net Assets
Refuse
Collection
$
563,725 $
262,533
826,258
1,582,862
(1,034,169)
548,693
1,374,951
Transit
System
13,329
566,821
14,005
594,155
36,000
1,893,590
3,711 ,215
(2,094,337)
3,546,468
4,140,623
T atal Other
En terpri se
Funds
$
563,725
275,862
566,821
14,005
1,420,413
36,000
1,893,590
5,294,077
(3,128,506)
4,095,161
5,515,574
11,047 43,700 54,747
26,586 28,565 55,151
57,393 24,194 81,587
102,365 102,365
95,026 198,824 293,850
548,693 3,546,468 4,095,161
731,232 395,331 1,126,563
$ 1,279,925 $ 3,941,799 $ 5,221,724
71
CITY OF DUBUQUE, IOWA
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES
IN FUND NET ASSETS
NONMAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
EXHmIT B-2
10,617 1,266,659 1,277,276
107 107
77 77
(14,015) (14,015)
10,694 1,252,751 1,263,445
Re fuse
Collection
OPERATING REVENUES
Charges for sales and services
Other
Total Operating Revenues
$
2,157,285 $
2,157,285
OPERATING EXPENSES
Employee expense
Utilities
Repairs and maintenance
Supplies and services
Insurance
Depreciation
Total Operating Expenses
1,311,528
652
218,660
502,376
16,565
188,473
2,238,254
OPERATING LOSS
(80,969)
NONOPERATING REVENUES (EXPENSES)
In terg 0 vemm ental
Investment earnings
Contributions
Loss on disposal of assets
Total Nonoperating Revenues (Expenses)
LOSS BEFORE TRANSFERS
(70,275)
TRANSFERS IN
CHANGE IN NET ASSETS
(70,275)
NET ASSETS, BEGINNING
1,350,200
NET ASSETS, ENDING
$
1,279,925 $
Transit
System
285,057 $
34,159
3 19,216
912,982
49,796
265,925
633,278
36,395
344,687
2,243,063
(1,923,847)
(671,096)
863,539
192,443
3,749,356
3,941,799 $
Total Other
Enterprise
Funds
2,442,342
34,159
2,476,501
2,224,510
50,448
484,585
1,135,654
52,960
533,160
4,481,31 7
(2,004,816)
(741,371 )
863,539
122,168
5,099,556
5,221,724
72
CITY OF DUBUQUE, IOWA
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
EXHffiIT B-3
Total Other
Refuse Transit Enterprise
Coil ec ti 0 n System Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 2,089,376 $ 273,393 $ 2,362,769
Cash payments to suppliers for goods and services (739,036) (977,580) (1,716,616)
Cash payments to employees for services (1,299,801) (892,784) (2,192,585)
Other operating receipts 34,159 34,159
NET CASH PROVIDED (USED) BY OPERATING
A CTIVITIE S 50,539 (1,562,812) (1,512,273)
CASH FLOWS FROM NONCAPIT AL FINANCING
ACTIVITIES
Transfers from other funds
Proceeds from interfund balances
Property tax receipts
Intergovernmental grant proceeds
NET CASH PROVIDED BY NONCAPIT AL FINANCING
ACTIVITIES
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets
Contributions
NET CASH USED BY CAPITAL AND RELATED
FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
NET DECREASE IN CASH AND CASH
EQUIV ALENTS
CASH AND CASH EQUIVALENTS, BEGINNING
CASH AND CASH EQUIVALENTS, ENDING
--'-'-" ,,'~ -""",_,<,-_"",'-_>___'a'~-,","
10,617
10,617
(248,765)
77
(248,688)
(187,532)
$
751,257
563,725 $
863,539
102,365
4,124
706,293
863,539
102,365
4,124
716,910
1,676,321
1,686,938
(561,925)
(810,690)
77
(561,925)
(810,613)
107
107
( 448,309)
(635,841)
448,309 1,199,566
- $ 563,725
(continued)
73
INTERNAL SERVICE FUNDS
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-
reimbursement basis.
General Service Fund - This fund is used to account for engineering, street, and general services
supplied to other departments.
Garage Service Fund - This fund is used to account for the 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 the health insurance costs of the
City.
Workers' Compensation Reserve Fund - This fund is used to account for the workers'
compensation costs of the City.
CITY OF DUBUQUE, IOWA
COMBINING STATEMENT OF NET ASSETS
INTERN AL S ER VI CE FUNDS
JUNE 30, 2004
General
Service
Garage
Service
Stores!
Printing
ASSETS
CURRENT ASSETS
Cash and pooled cash investments $ 9,611 $ 5,165 $ 4,435
Receivables
Accounts
Accrued interest
Inventories 3 1 ,215 7 , 194
T ota1 Current Assets 9,611 36,380 11,629
NONCURRENT ASSETS
Capital assets
Machinery and equipment
Accumulated deprec ia ti on
Net Capital Assets
125,239
(69,886)
55,353
Total Assets
9,611
91,733
11,629
LIABILITIES
CURRENT L lAB IL ITIE S
Accounts payable
Accrued payroll
Total Liabilities
18,652
18,652
13,497
15,607
29,104
281
281
NET AS SETS
Invested in capital assets, net of related debt
Unrestricted
Total Net Assets (Deficit)
$
(9,041 )
(9,041) $
55,353
7,276
62,629 $
11,348
11,348
EXHffiIT C-l
Health
Insuran c e
Reserve
Workers'
Compensation
Reserve
Total
$ 1,248,614 $
595,921 $ 1,863,746
136,274
6,919
3,124
136,274
10,043
38,409
2,048,472
1,391,807
599,045
125,239
(69,886)
55,353
1,391,807
599,045
2,103,825
708,254
308,320
708,254
308,320
1,030,352
34,259
1,064,611
$
683,553
683,553 $
55,353
290,725 983,861
290,725 $ 1,039,214
75
"-,--,',.'é"""~,_,=---,-",""-"",,"",_,-,,_---,,,,,,,- "
-- --' ~""--""'-'" ,-.--~~...',
EXHffiIT C-2
Health
Insurance
Reserve
$ 5,270,611 $
384,034
5,654,645
4,731,747
373,487
5,105,234
549,411
25,165
574,57"6
574,576
108,977
$
683,553 $
. < -.' """""""----"-'->-'""'"',..'.- '.. .... ...."
Workers'
Compensation
Reserve
Total
118,946 $ 7,456,744
1,198 387,957
120,144 7,844,701
324,996
26,532
351,528
(231,384)
5,431
(225,953)
(225,953)
516,678
1,648,450
17,178
10,357
5,441,579
411,705
9,067
7,538,336
306,365
30,596
336,961
(3,900)
333,061
706,153
290,725 $ 1,039,214
76
- '0. ..-I----"'"",","",'",~';o...
CITY OF DUBUQUE, IOWA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL S ER VI CE FUNDS
FOR THE YEAR ENDED JUNE 30, 2004
General Garage S tares/
Service Service Printing
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 1,036,112 $ 1,007,573 $ 23,502
Cash payments to suppliers for goods and services (2,138) (392,063) (30,346)
Cash payments to employees for services (1,027,507) (611,047)
Other operating receipts 2,725
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES 6,467 7,188 (6,844)
CASH FLOWS FROM NONCAPIT AL FINANCING
ACTIVITIES
Transfers to other funds
(3,900)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
6,467
3,288
( 6,844)
CASH AND CASH EQUIVALENTS, BEGINNING
CASH AND CASH EQUIVALENTS, ENDING
$
3,144
9,611 $
1,877
5,165 $
11,279
4,435
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES
Operating income (loss)
$
(60) $
(7,316) $
( 4,286)
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
9,067
Total Adjustments
6,527
6,527
(8,707)
10,775
3,369
14,504
(2,457)
(101)
Increase (decrease) in accounts payable
Increase in accrued liabilities
(2,558)
NET CASH PROVIDED (USED) BY OPERATING
ACT IVIT IE S
$
6,467 $
7,188 $
(6,844)
STATISTICAL SECTION
(Unaudited)
Table 1
Interest on Sewage America's
Long - T enn Disposal Water Stonnwater Parking Ri ver Refuse Transit
Debt Works Utility Utility Facilities Proj ect Collection S ystem T atal
$ 1,605 $ 4,656 $ 4,214 $ - $ 1,445 $ 415 $ 2,141 $ 2,155 $ 68,879
1,249 5,282 4,369 1,185 1,655 1,065 2,238 2,257 74,328
78
Table 2
Gain on
Sale of
Capital
Assets
$
- $
175
Other
1,228 $
639
Total
88,687
93,294
79
CITY OF DUBUQUE, IOWA
PROPERTY TAX LEVIES AND COLLECTIONS
LAS T TEN FIS CAL YEARS
(AMOUNTS EXPRESSED IN THOUSANDS)
(UN AUDITED)
Ratio of
Total Tax
Percent of Delinquent Collections
F iseal Total Tax Current Tax Current Taxes Tax Total Tax to Total
Year Levy (1) Co 11 ecti ons Collected Collections Collections ill Tax Levy
1995 $ 14,997 $ 14,635 97.6% $ 116 $ 14,751 98.4%
1996 15,182 14,832 97.7 118 14,950 98.5
1997 15,299 15,025 98.2 132 15,157 99.1
1998 15,538 15,426 99.3 172 15,598 1 00.4
1999 16,587 16,528 99.6 121 16,649 1 00 .4
2000 16,497 16,380 99.3 115 16,495 99.9
2001 17,163 16,662 97.1 120 16,782 97.8
2002 17,147 16,941 98.8 127 17,068 99.5
2003 15,328 15,215 99.3 216 15,432 1 00 .1
2004 16,208 15,937 98.3 11 15,948 98.4
(1) Includes tax increment levy.
(2) Includes taxes collected in June by the County but not received by the City until July.
Table 5
Outstanding
Delinquent
Taxes
$
245
232
274
138
129
138
150
238
130
207
Ratio of
Delinquent
T axes to Total
T ax Levy
1.6%
1.5
1.8
0.9
0.8
0.8
0.9
1.4
0.8
1.3
83
CITY OF DUBUQUE, IOWA
PROPERTY TAX RATES
DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
TAX RATES PER $1,000 ASSESSED VALUE
(AMOUNTS EXPRESSED IN THOUSANDS)
(UNAUDITED)
Table 7
Board Ratio of
Dubuque of Education Dubuque
Fiscal Dubuque School and Area 1 Dubuque City
Year City District Independents Voc. Tech County Total to Total
1995 $11.78206 $13.60398 $ .53777 $ .49222 $ 6.95885 $ 33.37488 35.30%
1996 11.78215 13.70668 .74972 .49360 6.13169 32.86384 35.85
1997 11.38153 12.39251 .70548 .50348 5.87236 30.85536 36.89
1998 11 .40 112 12.03974 .52563 .49951 5.54113 30.00713 37.99
1999 11.07340 11.98226 .50368 .48592 5.52169 29.56695 37.45
2000 11.15945 11.53111 .66882 .55128 5.54016 29.45082 37.89
2001 11.93556 13.50444 .54806 .57072 5.73669 32.29547 36.96
2002 11.85631 13.73882 .55492 .57507 5.60064 32.32576 36.68
2003 11 .99116 13.84768 .61686 .57791 5.59515 32.62876 36.75
2004 12.48784 14.27491 .57269 .59804 6.08923 34.02271 36.70
Source: Dubuque County Auditor's Office.
85
'"'~""'-'-"'~-""'~..,.......~",",-ø,~",-,',._"~.'n - "
-. -. " ",,- -'" ",,'.. '.. ,,' "'"',"" ,-",
CITY OF DUBUQUE, IOWA
SPECIAL ASSESSMENT BILLINGS AND COLLECTIONS
LAST TEN FISCAL YEARS
(AMOUNTS EXPRESSED IN THOUSANDS)
(UNAUDITED)
Table 9
Fiscal
Year
Special Assessment
Billings
Special Assessment
Collected CD
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
$ 51
33
41
73
67
67
82
87
89
86
$ 609
147
378
179
644
203
698
657
558
793
(1) Includes prepayments.
87
CITY OF DUBUQUE, IOWA
COMPUTATION OF LEGAL DEBT MARGIN
JUNE 30, 2004
(AMOUNTS EXPRESSED IN THOUSANDS)
(UN A un ITED )
Table 10
Actual Valuations
Legal debt margin:
Debt limitation - 50/0 of actual valuations
Debt applicable to limitation:
Total bonded debt
Less: Revenue bonds
Total debt applicable to limitation
Legal debt margin
$
31,535
(1,350}
$
2,350,31~
$
117,516
30,185
$
87,33L
88
CITY OF DUBUQUE, IOWA
RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO TAXABLE
VALUE AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA
LAST TEN FISCAL YEARS
(UN AUDITED)
Table 11
Ratio of
Net Bonded Net
Net Debt to Bonded
Fiscal Population Taxable Bonded Taxable Debt Per
Year W* Value (2) * Debt (3) * Value Capita
1995 58 $1,116,511 $ 14,775 1.320/0 $ 255
1996 59 1,140,720 14,200 1.24 241
1997 59 1,226,841 11,755 0.96 199
1998 59 1,249,431 10,795 0.86 183
1999 56 1,344,102 8,545 0.64 153
2000 56 1,379,334 10,511 0.76 188
2001 58 1,367,324 9,005 0.66 155
2002 58 1,418,928 20,945 1.48 361
2003 58 1,530,057 19,865 1.30 343
2004 58 1,563,082 19,010 1.22 328
* Amounts expressed in thousands.
(1) U.S. Census Bureau.
(2) From Table 6.
(3) From Table 13. Amount does not include revenue bonds.
89
We noted a certain matter involving the internal control over compliance and its operation that we
consider to be a reportable condition. Reportable conditions involve matters coming to our attention
relating to significant deficiencies in the design or operation of the internal control over compliance that,
in our judgment, could adversely affect the City's ability to administer a major federal program in
accordance with applicable requirements of laws, regulations, contracts, and grants. The reportable
condition is described as item III-A-04 in the accompanying Schedule of Findings and Questioned Costs.
A material weakness is a reportable condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low level the risk that non-compliance with
applicable requirements of laws, regulations, contracts, and grants caused by error or fraud that would be
material in relation to a major federal program being audited may occur and not be detected within a
timely period by employees in the normal course of perfonning their assigned functions. Our
consideration of the internal control over compliance would not necessarily disclose all matters in the
internal control that might be reportable conditions and, accordingly, would not necessarily disclose all
reportable conditions that are also considered to be material weaknesses. However, we believe the
reportable condition described above is not a material weakness.
This report, a public record by law, is intended solely for the infonnation 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.
zirfu
ß~ L L f
Dubuque, Iowa
November 10,2004
101
CITY OF DUBUQUE, IOWA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2004
CFDA Agency or Pro gram
Grantor/Pro gram Number Pass- Through Number Exp endi lures
Direct:
Department of Commerce:
Grants for Public Works and Economic
Development Facilities 11.300 05-01-03816 $ 1 ,447,283
Department of Housing and Urban Development:
Community Development Block Grants/
Entitlement Grants 14.218 B-XX-MC-19-0004 1,647,142
Community Development Block Grants/
Brownfields Economic Development
Initiati ve 14.246 B-O2-SP-IA-O178 736,588
Community Development Block Grants/
Brownfields Economic Development
Initiative 14.246 B-O3-SP-IA-O 193 123,370
859,958
Fair Housing Assistance Program - State
and Local 14.401 FF207KO27006 10,000
Fair Housing Assistance Program - State
and Local 14.401 FF207KO37006 102,391
112,391
Lower Income Housing Assistance
Program - Section 8 Moderate
Rehabilitation 14.856 KC-9004MR-OO2 17,552
Lower Income Housing Assistance
Program - Section 8 Moderate
Rehabilitation 14.856 KC-9004MR-OO 1 24,910
Lower Income Housing Assistance
Program - Section 8 Moderate
Rehabilitation 14.856 KC-9004MR-O05 299 ~872
342,334
Section 8 Housing Choice Vouchers
14.871
KC-9004V
4~O93,612
Lead-Based Paint Hazard Control in
Privately-Owned Housing
14.900
IALHBO243-03
240,278
Department of Justice:
Local Law Enforcement Block Grants
Program
16.592
2003-LB-BX-1245
21,651
Bulletproof Vest Partnership Program
Bulletproof Vest Partnership Program
Bulletproof Vest Partnership Program
Bulletproof Vest Partnership Program
16.607
16.607
16.607
16.607
1999BUBX990
2003BUBXO30
2001BUBXOIO
2002BUBXO20
2,475
6,731
1,015
9,075
19,296
( continued)
102
CITY OF DUBUQUE, IOWA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30,2004
NOTE I-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 infonnation 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
CFDA Number
Amount Provided
to Subrecipients
Community Development B lock Grants/
Entitlement Grants
14.218
$
191,086
Community Development Block Grants/Brownfields
Economic Development Iniati ve
14.246
$
736,588
105
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CITY OF DUBUQUE, IOWA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FO R THE YEAR ENDED JUNE 30, 2004
Part I: Summary of the Independent Auditor's Results:
(a)
Unqualified opinions were issued on the financial statements.
(b)
A reportable condition in internal control over financial reporting was disclosed by the audit of
the financial statements but was not considered a material weakness.
(c)
The audit did not disclose any non-compliance which is material to the financial statements.
(d)
A reportable condition in internal control over the major programs was disclosed by the audit of
the financial statements but was not considered a material weakness.
(e)
An unqualified opinion was issued on compliance with requirements applicable to each major
program.
(f)
The audit disclosed an audit finding which is required to be reported in accordance with Office
of Management and Budget Circular A-133, Section .510(a).
(g)
Maj or programs were as follows:
.
CFDA Number 11.300 -
CFDA Number 14.246-
Grants for Public Works and Economic Development Facilities
Community Development Block Grants/Brownsfields Economic
Development Initiative
Lower Income Housing Assistance Program - Section 8
Moderate Rehabiliation
Section 8 Housing Choice Vouchers
Highway Planning and Construction
.
.
CFDA Number 14.856 -
.
CFDA Number 14.871 -
CFDA Number 20.205 -
.
(h)
The dollar threshold used to distinguish between Type A and Type B programs was $408,200.
(i)
The City of Dubuque, Iowa, qualified as a low-risk auditee.
Part II: Findin2s Related to the Basic Financial Statements:
REPORTABLE CONDITION
II-A-04
Segregation of Duties - During our review of internal controls, the existing procedures are
evaluated in order to detennine that incompatible duties, from a control standpoint, are not
perfonned by the same employee. Currently, the City has not segregated accounts payable
disbursement functions, general checking account bank reconciliation functions, and journal
entry posting functions.
Recommendation ~ We recommend that the City review operating procedures in order to
obtain the maximum internal control possible.
Response - The general checking account bank reconciliation will be assigned to other
Finance Department personnel who do not perfonn accounts payable or journal entry posting
functions.
Conclusion - Response accepted.
106
- .. "'-"--",,~-,"" " "__'"~'".-.o""'-_"~-~"'_""";"',-,""--"'~""
CITY OF DUBUQUE, IOWA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2004
Part III: Findin2s and Questioned Costs for Federal Awards:
REPORT ABLE CONDITION
CFDA Number 11.300: Grants for Public Works and Economic Development Facilities
Grant Number: 05-01-03816
Department of Commerce
CFDA Number 14.246: Community Development Block Grants/Brownfields Economic
Development Initiative
Grant Numbers: B-02-SP-IA-O178 and B-O3-SP-IA-O193
Department of Housing and Urban Development
CFDA Number 14.856: Lower Income Housing Assistance Program - Section 8 Moderate
Rehabilitation
Grant Numbers: KC-9004MR-OOl, KC-9004MR-OO2, and KC-9004MR-OO5
Department of Housing and Urban Development
CFDA Number 14.871: Section 8 Housing Choice Vouchers
Grant Number: KC-9004V
Department of Housing and Urban Development
CFDA Number 20.205: Highway Planning and Construction
Grant Numbers: STP-U-2100(622)- -70-31, STP-U-2100(626)- -70-31, and STP-E-2100(6)- -8V-31
Department of Transportation
Passed Through the Iowa Department of Transportation
III-A-O4 ~ation of Duties - The City has not segregated accounts payable disbursement
functions, general checking account bank reconciliation functions, and j oumal entry posting
functions. See item II - A -04.
Part IV: Other Findin2s Related to Statutory Reporting:
IV -A -04 Official Depositories - A resolution naming official depositories has been approved by the
City Council. The maximum deposit amounts stated in the resolution were not exceeded
during the year ended June 30,2004.
IV-B-O4 Certified BudW ~ Function disbursements during the year ended June 30, 2004, did not
exceed the amounts budgeted.
IV -C-O4
Questionable Expenditures ~ An expenditure was noted that may not meet the requirements
of public purpose as defined in an Attorney General's opinion dated April 25, 1979, since the
public benefits to be derived have not been clearly documented. The expenditure was a $15
sympathy gift given from the City's merchandise. According to the opinion, it is possible for
such expenditures to meet the test of serving a public purpose under certain circumstances,
although such items will certainly be subject to a deserved close scrutiny. The line to be
drawn between a proper and an improper purpose is very thin.
107
CITY OF DUBUQUE, IOWA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2004
Part IV: Other Findin2s Related to Statutory Reporting: (continued)
Recommendation - The Council should detennine and document the public purpose served
by this expenditure before authorizing any further payments. If this practice is continued, the
City should establish written policies and procedures, including the requirement for proper
documentation.
Response - The City will comply with this recommendation.
Conclusion - Response accepted.
IV -0-04 Travel Expense - No expenditures of City money for travel expenses of spouses of City
officials or employees were noted.
IV-E-04
Business Transactions - Business transactions between the City and City officials or
employees are detailed as follows:
Name, Title, and
Business Connection
T ransacti on
D escri pti on
Amount
John Zenner, employee, owner of
building
Building rent
$
3,245
J an Anderson, employee, spouse
is owner of Anderson Design &
Consulting, Inc.
Architect services
$
580
In accordance with Chapter 362.5( 10) of the Code of Iowa, the transactions with John Zenner
do not appear to represent conflicts of interest since the transactions were entered into
through competitive bidding in accordance with Chapter 362.5(4) of the Code of Iowa. The
transactions with Anderson Design & Consulting, Inc., do not appear to represent conflicts of
interest since total transactions were less than $1,500 during the fiscal year.
IV -F-O4
Bond Covera~ - Surety bond coverage of City officials and employees is in accordance with
statutory provisions. The amount of coverage should be reviewed annually to insure that the
coverage is adequate for current operations.
IV -G-O4 Council Minutes - No transactions were found that we believe should have been approved in
the Council minutes but were not.
IV -H-O4 ~osits 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.
IV -1-04
Revenue Bonds - No instances of non-compliance with the provisions of the City's revenue
bond resolutions were noted.
IV -J -04
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